Bangor Township Schools Year Ended June 30
Bangor Township Schools
Year Ended June 30, 2014
Financial Statements and Single Audit Act Compliance
BANGOR TOWNSHIP SCHOOLS ELECTED OFFICERS For the year ended June 30, 2014 ADMINISTRATION Superintendent
Matt Schmidt
BOARD OF EDUCATION President Vice President Secretary Treasurer Trustee Trustee Trustee
Richard Kowalski John Loop Timothy Allen Brian Tobin Mark Seymour Patrick Shaffer Melissa Kaczmarek
BANGOR TOWNSHIP SCHOOLS Table of Contents Page Independent Auditors' Report
1
Management's Discussion and Analysis
5
Basic Financial Statements District-wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of Fund Balances for Governmental Funds to Net Position of Governmental Activities Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Reconciliation of Net Changes in Fund Balances of Governmental Funds to Change in Net Position of Governmental Activities Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund Statement of Fiduciary Assets and Liabilities Notes to the Financial Statements Combining and Individual Fund Financial Statements and Schedules Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Food Service Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Community Service Special Revenue Fund Single Audit Act Compliance Independent Auditors' Report on the Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 Schedule of Expenditures of Federal Awards Notes to the Schedule of Expenditures of Federal Awards Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors’ Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings
12 13 15 16 17 18 19 27 29
46 48 50 51
53 54 56
57 59 61 62
Rehmann Robson 5800 Gratiot Rd. Suite 201 Saginaw, MI 48638 Ph: 989.799.9580 Fx: 989.799.0227 rehmann.com
INDEPENDENT AUDITORS' REPORT
October 3, 2014 To the Board of Education Bangor Township Schools Bay City, Michigan Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Bangor Township Schools (the “District”), as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Rehmann is an independent member of Nexia International.
CPAs & Consultants
Wealth Advisors
Corporate Investigators
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Bangor Township Schools , as of June 30, 2014, and the respective changes in financial position thereof and the budgetary comparison for the general fund for the year then ended in conformity with accounting principles generally accepted in the United States of Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole.
2
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated October 3, 2014, on our consideration of the District’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control over financial reporting and compliance.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
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BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis The Bangor Township Schools (the "District") is a K-12 school district located in Bay City, Michigan. As management of the District, we offer the readers of the District's financial statements this narrative overview and analysis of its financial activities for the years ended June 30, 2014 and 2013. The management’s discussion and analysis is provided at the beginning of the audit to provide an overview of the past and current position of the District’s financial condition. This summary should not be taken as a replacement for the audit which consists of the financial statements and other supplemental information that presents all the District’s revenue and expenditures by program for the General Fund, Food Service, Community Service, Capital Projects, and Debt Service Funds. Using This Financial Report This discussion and analysis is intended to serve as an introduction to the District's basic financial statement. The District's basic financial statements are comprised of five components: 1) district-wide financial statement, 2) fund financial statements, 3) statement of fiduciary assets and liabilities, 4) notes to the financial statements and 5) single audit. This report contains supplementary information to compliment the financial information provided. District-Wide Financial Statements. The district-wide financial statements are designed to provide readers with a broad overview of the District's finances, similar to the private sector financial statements. They provide a clear picture of the District as a single entity to complement the traditional fund-based financial statements. The statement of net position presents information on all of the District's assets and liabilities, with the difference between the two reported as net position. Net position should be understood as a measure of “net worth” rather than as a measure of expendable or available resources. Over time, increases or decreases in the net position of the District may service as a useful indicator of whether the Bangor Township Schools' financial position is improving or deteriorating. Fund Financial Statements. The fund financial statements focus on individual parts of the District, reporting the District’s operation in more detail than the district-wide statements. The fund level statements are reported on a modified accrual basis. The assets that are measurable and currently available are reported. Liabilities are recognized to the extent they are normally expected to be paid with current financial resources. Fiduciary Fund. The District acts as the trustee for its student activity funds. All of the District’s fiduciary activities are reported in separate statements of fiduciary assets and liabilities. These activities are excluded from the District’s other financial statements because the District cannot use these assets to finance its operations. The District is responsible for ensuring that the assets reported in these funds are used for their intended purposes.
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BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis Statement of Net Position The statement of net position provides the perspective of the District as a whole. Table 1 provides a summary of the District’s net position as of June 30, 2014 and 2013. Table 1 Governmental Activities 2013-2014 Assets Current and other assets Capital assets Less accumulated depreciation Capital asset, net book value Total assets Liabilities Current liabilities Long-term liabilities: Due within one year Due in more than one year Total liabilities Net Position Net investment in capital assets Restricted Unrestricted Total net position
2012-2013
$ 6,102,721 $ 6,264,626 30,555,927 29,892,203 (13,676,637) (12,650,936) 16,879,290 17,241,267 22,982,011 23,505,893
1,992,381
2,408,571
1,310,235 13,350,660 16,653,276
1,147,971 13,590,872 17,147,414
3,860,031 1,444,531 1,024,173 $ 6,328,735
3,990,498 834,264 1,533,717 $ 6,358,479
The above analysis focuses on the net position (see Table 1). The change in net position (see Table 2) of the District’s governmental activities is discussed below. The District’s net position was $6,328,735 at June 30, 2014. The District's net investment in capital assets totaled $3,860,031. This compares the original cost, less depreciation of the District’s capital assets, to long-term debt used to finance the acquisition of those assets. Most of the debt will be repaid from voter-approved property taxes collected as the debt service comes due. An amount of $1,444,531 is restricted to pay debt service amounts owed by the District, and for future food service and community service expenditures. The remaining amount of net position, $1,024,173 was unrestricted. This amount represents the accumulated results of all past years’ operations. The unrestricted net position balance is used for working capital and cash flow needs as well as to provide for future uncertainties. The operating results of the General Fund will have a significant impact on the change in unrestricted net position from year-to-year. The results of this year’s operations for Bangor Township Schools as a whole are reported in the statement of activities (see Table 2), which shows the changes in net position for fiscal year 2014. As reported in the statement of activities, the cost of all governmental activities this year was $22,769,478. Certain activities were partially funded from those who benefited from the programs, in the amount of $900,398, or by other governments and organizations that subsidized certain programs with grants and contributions, in the amount of $2,458,231. The remaining “public benefit” portion of governmental activities was funded with $3,617,674 in taxes, $15,757,840 in State foundation allowance and $5,591 in investment earnings. The District experienced a decrease in net position of $29,744. The assets decreased as a result of both ongoing operations in the School District and long-term debt payments made during the year. Long-term debt decreased by $77,948 in 2014.
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BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis Table 2 Governmental Activities 2013-2014 Revenues Program revenues: Charges for services Operating grants
$
General revenues: Property taxes-general State aid unrestricted Other Investment earnings unrestricted Total revenues Functions/Program Expenses Instruction Supporting services Food services Athletics Community services Interest on long-term debt Depreciation (unallocated) Total expenses Decrease in net position Net position: Beginning of year End of year
2012-2013
900,398 2,458,231
$ 1,027,032 2,266,263
3,617,674 15,757,840 5,591 22,739,734
3,809,274 15,299,562 72,728 4,838 22,479,697
11,783,668 8,055,135 1,030,034 425,085 126,470 318,871 1,030,215 22,769,478 (29,744)
12,060,146 7,841,408 1,027,052 409,064 118,336 296,245 1,028,731 22,780,982 (301,285)
6,358,479 $ 6,328,735
6,659,764 $ 6,358,479
The District's net position was decreased by $29,744 during the current fiscal year, which is a significantly lower decrease from the prior year. This change is mainly due to an increase in the unrestricted State aid revenue of approximately $458,000, which is offset by a decrease in property taxes-general revenue of approximately $192,000. As discussed above, the net cost shows the financial burden that was placed on the State and Bangor Township Schools taxpayers by each of these functions. Since property taxes for operations and unrestricted State aid constitute the vast majority of Districts operating revenue sources, the Board of Education and Administration must annually evaluate the needs of the School District and balance those needs with State-prescribed available unrestricted revenue. Bangor Township Schools Funds As noted earlier, the District uses funds to help it control and manage money for particular purposes. Looking at funds helps the reader consider whether the District is being held accountable for the resources taxpayers and others provide to it and may give more insight into the District’s overall financial health.
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BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis As the District completed the 2014 school year, the governmental funds reported a combined fund balance of $4,152,400, an increase of $253,734 from the prior year. The changes by major and non-major funds are as follows: 2009 Bond Other Total Debt Service Governmental Governmental General Fund Fund Funds Funds Fund balance, beginning of year Increase/(Decrease) Fund balance, end of year
$ 2,653,286
$
(20,157) $ 2,633,129
699,999
$
233,333 $
933,332
$
545,381
$ 3,898,666
40,558
253,734
585,939
$ 4,152,400
In the General Fund, our principal operating fund, the fund balance had a slight decrease of $20,157 from 2013. The fund balance of the General Fund is available to fund costs related to allowable school operating purposes. The fund balance for the Debt Service funds was $1,053,742. Millage rates for debt service were established at 2.1700 mills for the 2013-14 fiscal year. Millage rates are determined annually to ensure that the District accumulates sufficient resources to pay annual bond debt service. The other nonmajor funds (special revenue and capital projects) increased by $54,413 primarily from the community service special revenue fund and public improvement capital project fund. General Fund Budgetary Highlights Over the course of the year, Bangor Township Schools revises its budget as it attempts to account for unexpected changes in revenue and expenditures. State law requires that the budget be amended to ensure that expenditures do not exceed appropriations. The final amendment to the budget was actually adopted in June 2014. A statement showing the District’s original and final budget amounts compared with amounts actually paid and received is provided in these financial statements. Revisions were made to the 2013-14 General Fund original budget on February 17, 2014 and June 16, 2014. There were two significant increases noted from the General Fund original budget to the final amended budget which included; an increase in other business services of $102,352 for tax abatements and an increase in staff/personnel services in the amount of $53,179 for the hiring of a Human Resources Director. Capital Asset and Debt Administration Capital Assets. At June 30, 2014, the District had $16,879,290 invested in a broad range of capital assets, including land, buildings, and furniture and equipment. This amount represents a net decrease (including additions, deductions, and depreciation) of $361,977 or approximately 2.1%, from 2013. 2013-2014 Land Buildings and improvements (net of accumulated depreciation) Furniture, equipment and vehicles (net of accumulated depreciation) Total capital assets
8
$
181,770 15,357,832 1,339,688 $ 16,879,290
2012-2013 $
181,770 16,189,570 869,927 $ 17,241,267
BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis Long-term Debt. At the end of this year, Bangor Township Schools District had $12,510,000 in bonds outstanding versus $13,130,000 in the previous year - a change of approximately 4.7%. Those bonds consisted of the following:
General Obligation Bonds
2013-2014
2012-2013
$ 12,510,000
$ 13,130,000
The District’s general obligation bond rating continues to be AAA. Other obligations include installment notes, accrued retirement incentive, vacation pay, and sick leave. We present more detailed information about our long-term liabilities in the notes to financial statements. Economic Factors and Next Year's Budgets and Rates Our elected officials and administration considered many factors when preparing the District’s 2014-15 fiscal year budget. Retirement rate increased from 24.79% to 25.78% for the upcoming 2014-15 school year. One of the most important factors affecting the budget is our student count. The State foundation revenue is determined by multiplying the blended student count by the foundation allowance per pupil. The blended count for 2014-15 fiscal year is 90% of the September 2014 and 10% of the February 2015 student counts. The 2014-15 budgets were adopted in June 2014, based on an estimate of 2,383 students that will be enrolled in September 2014. Approximately 81% of total General Fund revenue is from the foundation allowance. The State is looking to increase the foundation allowance from 7,076 to 7,126 for the 2014-15 school year. Under State law, the District cannot assess additional property tax revenue for general operations. As a result, District funding is heavily dependent on the State’s ability to fund local school operations. Once the final student count and related per pupil funding is validated, State law requires the School District to amend the budget if actual District resources are not sufficient to fund original appropriations. Since the District’s revenue is heavily dependent on State funding and the health of the State School Aid Fund, the actual revenue received depends on the State’s ability to collect revenue to fund its appropriation to school districts. The State periodically holds revenue estimating conferences to estimate revenue. If actual State revenue is less than their estimates, reduction to the per-pupil funding allowance may be necessary. The District’s unassigned General Fund balance of $2,633,125 is sufficient to meet any unanticipated shortfalls the State may experience in the School Aid Fund for the 2014-15 school year.
Requests for Information This financial report is designed to give our citizens, taxpayers, parents, students, investors and creditors a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. Questions concerning this report or requests for additional information should be addressed to Jonathan Foco, Chief Financial Officer, Bangor Township Schools, 3359 E. Midland Road, Bay City, Michigan 48706; telephone number (989) 684-8121, x1204.
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BASIC FINANCIAL STATEMENTS
10
DISTRICT-WIDE FINANCIAL STATEMENTS
11
BANGOR TOWNSHIP SCHOOLS Statement of Net Position June 30, 2014 Governmental Activities Assets Cash and cash equivalents Investments Receivables Other assets Capital assets not being depreciated Capital assets being depreciated, net
$
Total assets
1,696,481 781,570 3,590,715 33,955 181,770 16,697,520 22,982,011
Liabilities Accounts payable and accrued liabilities Unearned revenue Long-term liabilities: Due within one year Due in more than one year
1,310,235 13,350,660
Total liabilities
16,653,276
1,984,196 8,185
Net position Net investment in capital assets Restricted for: Debt service Food service Community service Unrestricted
3,860,031 1,011,682 331,481 101,368 1,024,173
Total net position
$
The accompanying notes are an integral part of these financial statements.
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6,328,735
BANGOR TOWNSHIP SCHOOLS Statement of Activities For the year ended June 30, 2014 Program Revenues
Functions / Programs Governmental activities: Instruction Supporting services Food service Athletics Community service Interest on long-term debt Unallocated depreciation Total
Charges for Services
Expenses
Operating Grants and Contributions
Net (Expense) Revenue
$
11,783,668 8,055,135 1,030,034 425,085 126,470 318,871 1,030,215
$
68,480 189,879 378,672 106,561 156,806 -
$
526,330 1,224,177 707,724 -
$ (11,188,858) (6,641,079) 56,362 (318,524) 30,336 (318,871) (1,030,215)
$
22,769,478
$
900,398
$
2,458,231
$ (19,410,849)
General revenues: Property taxes Unrestricted state aid Unrestricted investment earnings
3,617,674 15,757,840 5,591
Total general revenues
19,381,105
Change in net position
(29,744)
Net position, beginning of year
6,358,479
Net position, end of year
$
The accompanying notes are an integral part of these financial statements.
13
6,328,735
FUND FINANCIAL STATEMENTS
14
BANGOR TOWNSHIP SCHOOLS Balance Sheet Governmental Funds June 30, 2014
General Fund Assets Cash and cash equivalents Investments Accounts receivable Due from other governments Due from other funds Prepaid items Inventories Total assets Liabilities Accounts payable Salaries payable Accrued liabilities Due to other funds Unearned revenue
2009 Bond Debt Service Fund
Other Governmental Funds
Totals
$
278,436 781,570 233,764 3,349,353 11,737 -
$
933,332 -
$
484,713 7,598 133,948 22,218
$
1,696,481 781,570 233,764 3,356,951 133,948 11,737 22,218
$
4,654,860
$
933,332
$
648,477
$
6,236,669
$
248,486 1,157,644 515,030 100,571 -
$
-
$
2,087 14,262 4,627 33,377 8,185
$
250,573 1,171,906 519,657 133,948 8,185
Total liabilities
2,021,731
-
62,538
2,084,269
Fund balances Nonspendable Restricted Assigned Unassigned
11,737 2,621,392
933,332 -
22,218 531,041 32,680 -
33,955 1,464,373 32,680 2,621,392
Total fund balances
2,633,129
933,332
585,939
4,152,400
Total liabilities and fund balances
$
4,654,860
$
933,332
The accompanying notes are an integral part of these financial statements.
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$
648,477
$
6,236,669
BANGOR TOWNSHIP SCHOOLS Reconciliation Fund Balances for Governmental Funds to Net Position of Governmental Activities June 30, 2014 Fund balances - total governmental funds
$ 4,152,400
Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources, and therefore are not reported in the fund statement. Capital assets
30,555,927
Accumulated depreciation
(13,676,637)
Certain liabilities, such as bonds payable, are not due and payable in the current period, and therefore are not reported in the funds. Bonds and installment notes payable
(12,916,950)
Unamortized premiums
(123,467)
Unamortized discounts
21,158
Accrued interest on bonds payable
(42,060)
Accrued retirement incentives
(1,179)
Compensated absences
(1,640,457)
Net position of governmental activities
$ 6,328,735
The accompanying notes are an integral part of these financial statements.
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BANGOR TOWNSHIP SCHOOLS Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the year ended June 30, 2014
General Fund Revenues Local sources State sources Federal sources Interdistrict sources Charges for services
$
Total revenues Expenditures Current: Instruction Supporting services Community services Food service activities Athletic activities Tax abatements Debt service: Principal repayment Interest and fiscal charges Capital outlay Total expenditures
2,932,388 16,951,218 526,330 30,799 106,561
2009 Bond Debt Service Fund
Other Governmental Funds
$
$
-
1,441,811 42,903 707,724 -
Totals $
4,374,199 16,994,121 1,234,054 30,799 106,561
20,547,296
-
2,192,438
22,739,734
12,432,563 7,334,328 1,889 425,085 -
-
123,185 1,017,591 10,338
12,432,563 7,334,328 125,074 1,017,591 425,085 10,338
77,593 5,512 588,693
-
620,000 332,370 1,396
697,593 337,882 590,089
20,865,663
-
2,104,880
22,970,543
87,558
(230,809)
Revenue over (under) expenditures
(318,367)
-
Other financing sources (uses) Proceeds from issuance of long-term debt Transfers in from other funds Transfers out to other funds
484,543 72,000 (258,333)
233,333 -
25,000 (72,000)
484,543 330,333 (330,333)
Total other financing sources (uses)
298,210
233,333
(47,000)
484,543
Net change in fund balances
(20,157)
233,333
40,558
253,734
699,999
545,381
3,898,666
Fund balance, beginning of year Fund balance, end of year
2,653,286 $
2,633,129
$
The accompanying notes are an integral part of these financial statements.
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933,332
$
585,939
$
4,152,400
BANGOR TOWNSHIP SCHOOLS Reconciliation Net Changes in Fund Balances of Governmental Funds to Change in Net Position of Governmental Activities For the year ended June 30, 2014 Net change in fund balances - total governmental funds
$
253,734
Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay Depreciation expense
767,566 (1,129,543)
Bond proceeds provide current financial resources to governmental funds in the period issued, but issuing bonds increases long-term liabilities in the statement of net position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Issuance of long-term debt Principal payments on long-term liabilities
(484,543) 697,593
Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Change in accrued interest payable on long-term debt Amortization of bond premium Amortization of bond discount Change in the accrual for compensated absences Change in the accrual for retirement incentive payable Change in net position of governmental activities
551 20,576 (2,116) (174,455) 20,893 $
The accompanying notes are an integral part of these financial statements.
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(29,744)
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Revenues Local sources: Property taxes Property taxes-interest and penalties Interest Transfers from other districts: Rental of facilities Transportation fees Other
$
Final Budget
2,902,000 5,000 2,500
$
2,691,538 6,105 2,500
Actual
$
2,666,475 6,104 1,450
Actual Over (Under) Final Budget
$
(25,063) (1) (1,050)
64,248 200,000 67,570
74,248 115,861 60,093
73,203 116,676 68,480
(1,045) 815 8,387
3,241,318
2,950,345
2,932,388
(17,957)
State sources: State Aid Foundation State School Readiness At Risk Special Education
14,798,161 217,260 477,907 850,000
15,101,335 337,125 550,683 859,024
15,208,600 337,125 549,240 856,253
107,265 (1,443) (2,771)
Total revenue from state sources
16,343,328
16,848,167
16,951,218
103,051
Federal sources - restricted: Title I Title IIA
439,406 132,019
395,014 135,206
394,901 131,429
(113) (3,777)
Total revenue from federal sources
571,425
530,220
526,330
(3,890)
Revenue from interdistrict sources: Special education
-
30,799
30,799
-
88,430
104,869
106,561
1,692
20,244,501
20,464,400
20,547,296
82,896
Total revenue from local sources
Charges for services Total revenues
continued…
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BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures Instruction: Basic programs: Elementary school: Salaries Employee benefits Purchased services Supplies and materials Total elementary school
$
2,466,664 1,449,349 121,913 107,675 4,145,601
Final Budget
$
2,492,633 1,401,127 118,013 82,434 4,094,207
Actual
$
2,488,237 1,382,339 141,174 80,022 4,091,772
Actual Over (Under) Final Budget
$
(4,396) (18,788) 23,161 (2,412) (2,435)
Middle school: Salaries Employee benefits Purchased services Supplies and materials Other Total middle school
1,598,530 889,701 51,175 67,300 575 2,607,281
1,675,009 887,161 37,980 53,250 575 2,653,975
1,674,775 884,445 48,744 49,848 487 2,658,299
(234) (2,716) 10,764 (3,402) (88) 4,324
High school: Salaries Employee benefits Purchased services Supplies and materials Total high school
1,830,167 1,057,257 90,269 78,163 3,055,856
1,792,671 1,037,172 77,643 74,657 2,982,143
1,795,762 1,018,348 82,750 73,787 2,970,647
3,091 (18,824) 5,107 (870) (11,496)
Preschool: Salaries Employee benefits Purchased services Supplies and materials Other Total preschool
148,560 65,530 15,925 13,700 2,400 246,115
145,051 67,946 22,525 24,272 2,400 262,194
144,902 67,642 20,097 20,990 2,059 255,690
(149) (304) (2,428) (3,282) (341) (6,504)
10,054,853
9,992,519
9,976,408
(16,111)
Total basic programs
continued…
20
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Added needs: Special Education: Salaries Employee benefits Purchased services Supplies and materials Other Total special education Compensatory education: Salaries Employee benefits Purchased services Supplies and materials Total compensatory education Total added needs Total instruction Supporting services: Pupil services: Guidance: Salaries Employee benefits Purchased services Supplies and materials Total guidance
$
1,099,792 743,154 70,966 9,356 1,923,268
Final Budget
$
1,035,184 667,071 73,390 9,164 1,784,809
Actual
$
1,041,581 658,989 76,752 9,922 59,091 1,846,335
Actual Over (Under) Final Budget
$
6,397 (8,082) 3,362 758 59,091 61,526
404,592 164,526 16,500 8,525 594,143
401,786 174,615 9,000 585,401
406,990 191,639 11,191 609,820
5,204 17,024 2,191 24,419
2,517,411
2,370,210
2,456,155
85,945
12,572,264
12,362,729
12,432,563
69,834
404,381 321,062 8,450 3,900 737,793
464,957 369,137 1,300 2,550 837,944
474,207 366,358 1,125 2,186 843,876
9,250 (2,779) (175) (364) 5,932 continued…
21
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Supporting services (continued): Instructional staff: Improvement of instruction: Salaries Employee benefits Purchased services Supplies and materials Total improvement of instruction Library: Salaries Employee benefits Purchased services Supplies and materials Other Total library Supervision and direction of instructional staff: Salaries Employee benefits Supplies and materials Other Total supervision and direction of instructional staff Total instructional staff
$
251,376 96,443 65,594 12,281 425,694
Final Budget
$
207,552 101,414 36,673 6,036 351,675
Actual
$
199,671 108,002 33,116 7,635 348,424
Actual Over (Under) Final Budget
$
(7,881) 6,588 (3,557) 1,599 (3,251)
58,531 19,776 8,850 10,835 600 98,592
61,118 23,588 12,602 10,160 107,468
58,895 23,565 12,134 9,542 104,136
(2,223) (23) (468) (618) (3,332)
20,746 7,048 900 26,500
28,400 9,680 560 49,263
28,373 9,892 755 44,844
(27) 212 195 (4,419)
55,194
87,903
83,864
(4,039)
579,480
547,046
536,424
(10,622) continued…
22
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Supporting services (continued): General Administration: Board of education: Salaries Purchased services Supplies and materials Other Total board of education Executive administration: Salaries Employee benefits Purchased services Supplies and materials Other Total executive administration Total general administration School administration: Office of the principal: Salaries Employee benefits Purchased services Supplies and materials Other Total office of the principal Business Services: Fiscal Services: Salaries Employee benefits Purchased services Supplies and materials Total fiscal services
$
15,000 72,300 250 12,800 100,350
Final Budget
$
16,911 56,300 550 9,500 83,261
Actual
$
17,261 55,664 503 12,873 86,301
Actual Over (Under) Final Budget
$
350 (636) (47) 3,373 3,040
252,000 135,304 5,500 6,600 6,500 405,904
260,100 122,593 11,776 5,200 7,000 406,669
272,692 123,005 16,193 5,458 5,869 423,217
12,592 412 4,417 258 (1,131) 16,548
506,254
489,930
509,518
19,588
729,832 434,772 22,200 12,345 4,105 1,203,254
741,160 432,761 21,400 7,618 3,400 1,206,339
742,715 430,291 18,522 6,934 1,334 1,199,796
1,555 (2,470) (2,878) (684) (2,066) (6,543)
165,000 104,957 10,900 3,000 283,857
160,900 99,367 11,400 2,700 274,367
160,932 99,128 9,565 2,286 271,911
32 (239) (1,835) (414) (2,456) continued…
23
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Supporting services (continued): Business Services (concluded): Internal services: Salaries Employee benefits Purchased services Supplies and materials Total internal services Other business services: Purchased services Other Tax abatements Total other business services
$
19,000 4,612 36,100 2,000 61,712
Final Budget
$
20,500 4,754 36,000 483 61,737
Actual
$
20,118 4,560 35,082 483 60,243
Actual Over (Under) Final Budget
$
(382) (194) (918) (1,494)
8,600 2,925 10,000 21,525
7,158 2,000 114,720 123,878
7,158 2,145 114,747 124,050
367,094
459,982
456,204
(3,778)
Operation and maintenance of plant: Salaries Employee benefits Purchased services Supplies and materials Other Total operation and maintenance of plant
608,043 438,459 868,750 193,789 15,500 2,124,541
555,477 385,408 922,490 157,089 74,276 2,094,740
555,273 380,224 983,488 147,608 71,348 2,137,941
(204) (5,184) 60,998 (9,481) (2,928) 43,201
Pupil transportation: Salaries Employee benefits Purchased services Supplies and materials Other Total pupil transportation
501,234 324,851 163,981 231,800 5,000 1,226,866
517,173 313,957 98,551 219,000 4,400 1,153,081
488,817 298,725 97,529 208,589 4,779 1,098,439
(28,356) (15,232) (1,022) (10,411) 379 (54,642)
Total business services
145 27 172
continued…
24
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Supporting services (concluded): Central services: Staff/personnel services: Salaries Employee benefits Purchased services Supplies and materials Total staff/personnel services
$
Data processing services: Salaries Employee benefits Purchased services Supplies and materials Total data processing services
63,850 1,300 65,150
Final Budget
$
Actual Over (Under) Final Budget
Actual
55,000 24,679 36,650 2,000 118,329
$
54,788 24,874 35,489 1,999 117,150
$
(212) 195 (1,161) (1) (1,179)
60,000 25,084 204,100 16,800 305,984
60,600 28,981 180,581 15,020 285,182
60,600 28,941 131,884 10,083 231,508
(40) (48,697) (4,937) (53,674)
30,000 39,795 69,795
17,781 17,295 35,076
17,781 15,686 33,467
(1,609) (1,609)
Total central services
440,929
438,587
382,125
(56,462)
Other support services: Student activities Salaries Employee benefits Purchased services Total student activities
90,500 31,640 35,600 157,740
83,417 31,640 43,000 158,057
85,906 30,466 53,306 169,678
2,489 (1,174) 10,306 11,621
9,000 709 1,300
500
327
(173)
11,009
500
327
(173)
168,749
158,557
170,005
7,354,960
7,386,206
7,334,328
Other central services: Salaries Employee benefits Total other central services
Planning, research, development and evaluation: Salaries Employee benefits Purchased services Total planning, research, development and evaluation Total other support services Total supporting services
11,448 (51,705) continued…
25
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (concluded) Community services: Nonpublic school pupils: Purchased services Supplies and materials Total nonpublic school pupils
$
Athletics: Salaries Employee benefits Purchased services Supplies and materials Other Total athletics
1,683 3,695 5,378
Total expenditures
$
6,829 3,916 10,745
Actual
$
1,889 1,889
$
(6,829) (2,027) (8,856)
140,681 59,524 202,704 9,970 5,093 417,972
152,077 63,792 194,961 8,994 5,129 424,953
153,632 62,088 193,597 9,839 5,929 425,085
1,555 (1,704) (1,364) 845 800 132
-
77,594 5,512 83,106
77,593 5,512 83,105
(1) (1)
87,000
590,580
588,693
(1,887)
20,437,574
20,858,319
20,865,663
Debt service: Principal repayment Interest and fiscal charges Total debt service Capital outlay
Final Budget
Actual Over (Under) Final Budget
7,344
Revenue over (under) expenditures
(193,073)
(393,919)
(318,367)
Other financing sources (uses) Proceeds from issuance of long-term debt Transfers in Transfers out
72,000 (268,109)
484,543 72,000 (258,334)
484,543 72,000 (258,333)
(1)
Total other financing sources (uses)
(196,109)
298,209
298,210
(1)
Net change in fund balances
(389,182)
(95,710)
(20,157)
Fund balance, beginning of year Fund balance, end of year
2,653,286 $
2,264,104
2,653,286 $
2,557,576
75,552
75,553
2,653,286 $
2,633,129
$
75,553 concluded
The accompanying notes are an integral part of these financial statements.
26
BANGOR TOWNSHIP SCHOOLS Statement of Fiduciary Assets and Liabilities June 30, 2014 Agency Fund Assets Cash and cash equivalents
$
561,793
Liabilities Due to other funds
230,956
Due to student groups
330,837
Total liabilities
$
The accompanying notes are an integral part of these financial statements.
27
561,793
NOTES TO FINANCIAL STATEMENTS
28
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity Bangor Township Schools (the “District”) has followed the guidelines of the Governmental Accounting Standards Board’s Statement No. 61 and has determined that no entities should be consolidated into its basic financial statements as component units. Therefore, the reporting entity consists of the primary government financial statements only. The criteria for including a component unit include entities for which the District is considered to be financially accountable. District-Wide and Fund Financial Statements The district-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenue, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The District had no businesstype activities during the year ended 2014. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenue. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenue includes 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenue are reported instead as general revenue. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the district-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting and Financial Statement Presentation The district-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the fiduciary fund financial statements, except for agency funds, which do not have a measurement focus. Revenue is recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as they are both measurable and available. Revenue is considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenue to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
29
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Property taxes, intergovernmental revenue, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. The District reports the following major governmental funds: The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for and reported in another fund. The 2009 Bond Debt Service Fund is used to account for all financial resources restricted, committed or assigned to expenditure for principal and interest related to the 2009 Debt Service Bonds. Additionally, the District reports the following fund types: The special revenue funds are used to account and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. The debt service funds are used to account for all financial resources restricted, committed or assigned to expenditure for principal and interest. The capital projects fund is used to account for all financial resources restricted, committed or assigned to expenditure for the acquisition or construction of capital assets. The agency fund accounts for assets held for other groups and organizations and are custodial in nature. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, and then unrestricted resources as they are needed. Deposits and investments The District’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments include deposits with the Michigan Liquid Asset Fund. Receivables and Payables The District follows the practice of recording revenues that have been earned but not yet received as receivables. Receivables consist primarily of State Aid payments from the State of Michigan and Federal grant funds earned but not yet collected. No amounts have been identified as potentially uncollectible by management, and therefore, no amount has been recorded as a provision for bad debts. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans).
30
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Other Assets All inventories are valued at cost using the first-in/first out (“FIFO”) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Payments to vendors for services that will benefit periods beyond a fund's fiscal year-end are recorded as prepaid items in both the government-wide and fund financial statements. Capital Assets Capital assets, which include property and equipment, are reported in the governmental activities column in the government wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets of the primary government are depreciated using the straight line method over the following estimated useful lives: Assets
Years
Buildings Vehicles Equipment and other
20-50 5-10 5-10
Salaries Payable and Accrued Employee Benefits A liability is recorded at June 30 for those amounts owed to teachers and other employees of the District who do not work during the summer when school is not in session but have elected to have their salaries paid over an entire year. This has the effect of properly charging their salaries to expenditures in the fiscal year in which their services are received, even though they are not paid until July and August of the following fiscal year. The liability for accrued retirement and the employer share of FICA related to the salaries payable has been recorded, as has the liability for employee health insurances for the months of July and August. The District pays these insurances for this period as a part of the compensation for services rendered in the preceding school year. Compensated Absences and Other Termination Benefits It is the District’s policy to permit employees to accumulate various earned but unused vacation and sick pay benefits. These are accrued when incurred in the government wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations or retirements.
31
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Benefits are accrued based on various contract stipulations and lengths of service for the various bargaining units. In addition, employees with 15 or more years of service that are members of the District’s teacher’s and administration bargaining units are entitled to severance payouts of $15,000 upon separation from the District. Also, teachers that were hired prior to June 1, 1994, are entitled to a $6,000 longevity payment in their last year of employment. Long-term obligations In the government wide financial statements, long term obligations are reported as liabilities in the governmental activities statement of net position. Where applicable, bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Equity In the fund financial statements, governmental funds report nonspendable fund balance for amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually require to be maintained intact. Restricted fund balance is reported when externally imposed constraints are placed on the use of the resources by grantors, contributors, or laws or regulations of other governments. Committed fund balance is reported for amounts that can be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision making authority, the Board of Education. A formal resolution of the Board of Education is required to establish, modify or rescind a fund balance commitment. The District reports assigned fund balance for amounts that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed. The Board has delegated the authority to assign fund balance to the CFO. Unassigned fund balance is the residual classification for the general fund. When the District incurs an expenditure for purposes for which various fund balance classifications can be used, it is the District's policy to use restricted fund balance first, then committed fund balance, assigned fund balance, and finally unassigned fund balance. 2. BUDGETARY INFORMATION The General Fund and special revenue funds are under formal budgetary control. Budgets shown in the financial statements are adopted annually on a basis consistent with generally accepted accounting principles (“GAAP”), and are not significantly different from the modified accrual basis used to reflect actual results, and consist only of those amounts contained in the formal budget as originally adopted or as amended by the Board of Education. The budgets for the General Fund and special revenue Funds are adopted on a functional activity basis. All annual appropriations lapse at fiscal year-end.
32
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 3. EXCESS OF EXPENDITURES OVER BUDGET Public Act 621 of 1978, as amended, provides that a local unit shall not incur expenditures that are in excess of the amount appropriated. During the year ended June 30, 2014, the District incurred expenditures in the General Fund, which were in excess of the amounts appropriated in various activities as follows: Actual Expenditure
Final Budget General fund: Instruction: Added needs Supporting services: Pupil services General administration Operation and maintenance of plant Other support services Athletics
$
2,370,210
$
2,456,155
Unfavorable Variance
$
85,945
837,944 489,930
843,876 509,518
5,932 19,588
2,094,740 158,557 424,953
2,137,941 170,005 425,085
43,201 11,448 132
3. DEPOSITS AND INVESTMENTS A reconciliation of cash and investments as shown on the Statement of Net Position and Statement of Fiduciary Assets and Liabilities follows: Statement of Net Position Cash and cash equivalents Investments
$
Statement of Fiduciary Assets and Liabilities Cash and cash equivalents
1,696,481 781,570 2,478,051
561,793
Total Deposits and investments Deposits Investments Cash on hand Total
$
3,039,844
$
2,256,843 781,570 1,431
$
3,039,844
The District chooses to disclose its investments by specifically identifying each. As of June 30, 2014, the District had the following investments. Investment Michigan Liquid Asset Fund
Maturity n/a
Fair Value $
33
781,570
Rating S & P AAAm
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Investment and Deposit Risk Interest Rate Risk. State law limits the allowable investments and the maturities of some of the allowable investments as identified in the list of authorized investments below. The District’s investment policy does not have specific limits in excess of state law on investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The District’s investments held at year-end do not have maturity dates. Credit Risk. State law limits investments to specific government securities, certificates of deposits and bank accounts with qualified financial institutions, commercial paper with specific maximum maturities and ratings when purchased, bankers acceptances of specific financial institutions, qualified mutual funds and qualified external investment pools as identified in the list of authorized investments below. The District’s investment policy does not have specific limits in excess of state law on investment credit risk. The ratings for each investment are identified above for investments held at year-end. Custodial Credit Risk [Deposits]. Custodial credit risk is the risk that in the event of a bank failure, the District’s deposits may not be returned. State law does not require and the District does not have a policy for deposit custodial credit risk. As of year-end $2,223,035 of the District’s bank balance of $2,473,035 was exposed to custodial credit risk because it was uninsured and uncollateralized. Custodial Credit Risk [Investments]. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State law does not require and the District does not have a policy for investment custodial credit risk. On the investments listed above, there is no custodial credit risk, as these investments are uncategorized as to credit risk. Concentration of Credit Risk . State law limits allowable investments but does not limit concentration of credit risk as identified in the list of authorized investments below. The District’s investment policy does not have specific limits in excess of state law on concentration of credit risk. All investments held at yearend are reported above and are external investment pools. Michigan law authorizes the District to deposit and invest in: Bonds, bills, or notes of the United States; obligations, the principal and interest of which are fully guaranteed by the United States; or obligations of the State. In a primary or fourth class school district, the bonds, bills or notes shall be payable at the option of the holder upon not more than 90 days notice or, if not so payable, shall have maturity dates not more than five years after the purchase dates. Certificates of deposits issued by a State or national bank, savings accounts of a state or federal savings and loan association, or certificates of deposit or share certificates of a state or federal credit union organized and authorized to operate in this State. Commercial paper rated prime at the time of purchase and maturing not more than 270 days after the date of purchase. Securities issued or guaranteed by agencies or instrumentalities of the United States, United States government or federal agency obligation repurchase agreements, and bankers’ acceptance issued by a bank that is a member of the federal deposit insurance corporation.
34
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Mutual funds composed entirely of investment vehicles that are legal for direct investment by a school district. Investment pools, as authorized by the surplus funds investment pool act, composed entirely of instruments that are legal for direct investment by a school district. 4. RECEIVABLES The District's receivables at year-end consist of the following: General Fund
Nonmajor Funds
Total
Receivables Intergovernmental Accounts receivable
$
3,349,353 233,764
$
7,598 -
$
3,356,951 233,764
Total Receivables
$
3,583,117
$
7,598
$
3,590,715
5. CAPITAL ASSETS Capital asset activity for the year ended June 30, 2014, was as follows: Beginning Balance Governmental Activities Capital assets not being depreciated: Land $ Capital assets being depreciated: Buildings and improvements Vehicles Equipment and other
181,770
Disposals/ Transfers
Additions
$
-
$
Ending Balance
-
$
181,770
27,759,312 800,003 1,151,118
106,429 531,162 129,975
(103,842) -
27,865,741 1,227,323 1,281,093
29,710,433
767,566
(103,842)
30,374,157
Less accumulated depreciation for: Buildings and improvements Vehicles Equipment and other
11,569,742 638,261 442,933
938,167 86,885 104,491
(103,842) -
12,507,909 621,304 547,424
Total accumulated depreciation
12,650,936
1,129,543
(103,842)
13,676,637
Total capital assets being depreciated, net
17,059,497
Total capital assets being depreciated
Governmental activities capital assets, net
$
17,241,267
35
$
(361,977)
-
(361,977) $
-
16,697,520
$
16,879,290
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Depreciation expense was charged to functions / programs of the primary government as follows: Depreciation of governmental activities by function Supporting services - Transportation $ Food service Depreciation - Unallocated
12,443 86,885 1,030,215
Total depreciation expense
1,129,543
$
Bangor Township Schools is depreciating assets by taking cost less salvage value over the estimated useful life of each asset. Assets are depreciated when cost less salvage value is greater than accumulated depreciation. 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities as of June 30, 2014, for the District’s individual major funds and nonmajor funds in the aggregate, are as follows:
Fund financial statements Accounts payable Salaries payable Accrued liabilities
General Fund
Nonmajor Funds
$
248,486 1,157,644 515,030
$
2,087 14,262 4,627
$
1,921,160
$
20,976
Total $
250,573 1,171,906 519,657 1,942,136
District-wide financial statements Accrued interest on long-term debt
42,060
Total accounts payable and accrued liabilities
$
1,984,196
7. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS At June 30, 2014, interfund receivables and payables in the fund financial statements consisted of the following: Due from Other Funds General fund Nonmajor funds
Due to Other Funds
$
133,948
$
100,571 33,377
$
133,948
$
133,948
The District often reports interfund balances between many of its funds. These interfund balances resulted primarily from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made.
36
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements For the year then ended, interfund transfers consisted of the following: Transfers In General fund 2009 bond fund Nonmajor funds
Transfers Out
$
72,000 233,333 25,000
$
258,333 72,000
$
330,333
$
330,333
Transfers are used to: (1) move revenue from the fund that is required to collect them to the fund that is required or allowed to expend them; (2) move receipts restricted to or allowed for debt service from the funds collecting the receipts to the debt service fund as debt service payments become due; and (3) use unrestricted revenue collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. For the year ended June 30, 2014, the District transferred funds from the General Fund to the 2009 Bond Debt Service Fund for debt service payments and the Food Service Special Revenue Fund transferred funds to the General Fund to pay for indirect costs incurred in the General Fund. The District also transferred funds from the General Fund to the Public Improvement Capital Projects Fund. 8. OPERATING LEASES The District has various noncancelable operating leases for buses and copiers. Total costs for such leases were $78,663 for the year ended June 30, 2014. The future minimum lease payments for these leases are as follows: 2015 2016 2017 2018 2019 Total minimum lease payments
37
$
84,659 68,197 68,197 68,197 68,197
$
357,447
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 9. LONG-TERM DEBT The following is a summary of long-term debt transactions of the District for the year ended June 30, 2014: Beginning Balance General obligation bonds $ Thomas passenger bus installment notes Unamortized premium Unamortized discount Accrued retirement incentive Compensated absences
13,130,000
$
14,738,843
Additions $
144,043 (23,274) 22,072 1,466,002 $
Deductions -
$
620,000
484,543 -
77,593 20,576 (2,116)
271,418
20,893 96,963
755,961
$
833,909
Ending Balance $
12,510,000
Due Within One Year $
406,950 123,467 (21,158)
78,832 20,576 (2,116)
1,179 1,640,457 $
14,660,895
665,000
1,179 546,764 $
1,310,235
Bonds and notes payable at June 30, 2014, are comprised of the following individual issues: 2012 Refunding building and site bonds, $5,125,000, due in annual principal installments ranging from $600,000 to $865,000 through May 1, 2020; interest rate of 2.00% to 3.00%, net of premium.
$
4,525,000
2006 Refunding bonds due in annual principal installments ranging from $15,000 to $1,155,000 through May 1, 2024; interest ranging from 3.5% to 4.0%, net of discount.
4,485,000
2009 Building and site Qualified School Construction Bonds(“QSCB”). These bonds require a sinking fund to be established with transfers of $233,333 to an escrow agent annually on September 1st. These zero-coupon bonds are due in total on September 1, 2024.
3,500,000
Installment purchase, four 2014 Thomas 77-passenger school buses, $336,924, due in annual principal installments ranging from $26,870 to $29,316 through May 1, 2019; interest rate of 1.59%.
282,970
Installment purchase, two 2011 Thomas 77-passenger school buses and one Thomas 2014 30-passenger school bus, $147,619, due in annual principal installments ranging from $11,773 to $12,844 through May 1, 2019; interest rate of 1.59%.
123,980 $
12,916,950
Compensated absences and the accrued retirement incentive are generally liquidated by the general fund.
38
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Annual debt service requirements to maturity for general obligation bonds and installment purchase notes are as follows: Year Ended June 30,
Principal
Interest
2015 2016 2017 2018 2019 2020-2024 2025
$
743,832 790,091 831,370 877,669 923,988 5,250,000 3,500,000
$
245,888 235,413 224,263 212,538 200,138 630,382 -
Total
$
12,916,950
$
1,748,622
Defeased Debt The balance of the defeased debt outstanding at June 30, 2014, was $9,215,000. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the district-wide statement of net position. Accrued Retirement Incentive In fiscal year ending June 30, 2010, a teacher that retired and did not reach age 62 within three months of his/her effective retirement date was entitled to a supplementary retirement benefit until he/she reaches age 62. The amount of the supplementary benefit is determined by multiplying the teacher’s final year salary by 1.03%. A liability for this retirement incentive has been recognized in the district-wide financial statements at present value, using a discount factor of 4.65%. Estimated final annual payment, including social security is $1,179 in fiscal 2015. 10. RISK MANAGEMENT The District is exposed to various risks of loss related to property loss, torts, errors and omissions, employee injuries (workers’ compensation) as well as medical benefits provided to employees. The District has purchased commercial insurance for general liability, property and casualty and health claims and participates in the MASB/SET-SEG (risk pool) for claims relating to employee injuries/workers’ compensation. Settled claims relating to the commercial insurance have not exceeded the amount of insurance coverage in any of the past three fiscal years. The shared-risk pool program in which the District participates operates as a common risk-sharing management program for school districts in Michigan; member premiums are used to purchase commercial excess insurance coverage and to pay member claims in excess of deductible amounts.
39
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 11. PROPERTY TAXES Property taxes are assessed as of December 31 each year and attach as an enforceable lien on property as of the following July 1. School property taxes are levied on July 1 each year, based on the previous year’s assessment, by Township governments whose boundaries include property within the District, and are due by September 15. Delinquent real taxes are advanced to the District by the Counties involved. Taxes are recorded as revenue in the year levied. Taxes receivable are recorded for property taxes collected within 60 days of year-end, if any. 12. DEFINED BENEFIT PENSION PLAN Plan Description The District contributes to the Michigan Public School Employees Retirement System (MPSERS), a collection of several retirement plans administered by the State of Michigan Department of Management and Budget, Office of Retirement Systems. MPSERS provides retirement, survivor and disability benefits to plan members and beneficiaries. Benefit provisions are established and may be amended by state statute. The Office of Retirement Systems issues a publicly available financial report that includes financial statements and required supplementary information for MPSERS. That report may be obtained by writing to Michigan Public School Employees' Retirement System, 7150 Harris Drive, P.O. Box 30026, Lansing, Michigan, 48909 or by calling (517) 322-5103. Funding Policy Defined Benefit Plans Member contribution rates vary based on date of hire and certain voluntary elections. Member Investment Plan (“MIP”) members enrolled in MIP prior to January 1, 1990 contribute at a permanently fixed rate of 3.9% of gross wages. Members first hired January 1, 1990 through June 30, 2008 contribute at the following graduated permanently fixed contribution rates: 3 percent of the first $5,000; 3.6 percent of $5,001 through $15,000; 4.3 percent of all wages over $15,000. Members first hired July 1, 2008 through June 30, 2010 contribute at the following graduated permanently fixed contribution rates: 3.0 percent of the first $5,000; 3.6 percent of $5,001 through $15,000; 6.4 percent of all wages over $15,000. Basic Plan members make no contributions. Basic 4% and MIP 7% members contribute 4 percent and 7 percent of pretax salary, respectively. Based on the option selected at enrollment, these individuals contribute at a fixed rate until termination of employment or until reaching 30 years of service. At that time, based on the option selected, employee contributions are no longer required or revert to the contribution requirements under the MIP plan in which the employee initially enrolled. The District is required to contribute the full actuarial funding contribution amount to fund pension benefits, plus an additional amount to fund retiree healthcare benefits on a cash disbursement basis. The rates for the year ended June 30, 2014 as a percentage of payroll ranged from 24.32 to 24.79 percent. In addition, the District is invoiced monthly an amount that approximates 4.56 percent of covered payroll for "MPSERS UAAL Stabilization." This additional contribution is offset by monthly State aid payments equal to the amounts actually billed by the Office of Retirement Services.
40
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Hybrid Plans Members hired between July 1, 2010 and September 3, 2012 are enrolled in the Pension Plus plan. Members hired on or after September 4, 2012 are automatically enrolled in this plan unless an election is made to participate in the defined contribution plan (described below). Participant contributions contain a pension component as well as a savings component. The pension component is based on the following pretax contribution rates: 3 percent of the first $5,000; 3.6 percent of $5,001 through $15,000; 6.4 percent of all wages over $15,000. For the savings component, participants contribute 2 percent of gross pay to a 457 plan. Member contributions for the savings component are matched at a rate of 50 percent by the employer, up to a maximum of one percent and invested in a 401(k) plan. Effective February 1, 2013, members that initially enrolled in the defined benefit plan were provided the option to convert to a defined contribution plan. In these instances, any service credit accumulated under the defined benefit plan before February 1, 2013 is retained. For service performed after this date, the converted plan member receives 4 percent employer contributions to a personal 401(k) account. Voluntary employee contributions are permitted in accordance with IRS guidelines. Employer contributions for the pension component of the plan vest at 10 years of service. Employer contributions for the savings component and earnings thereon vest based on the following schedule: 50 percent at 2 years of service, 75 percent at 3 years of service, and 100 percent at 4 years of service. Any voluntary contributions vest with the employee immediately. If a member participating in the hybrid plan retires with certain age and service requirements, he or she will receive a monthly pension based on compensation received before February 1, 2013. Defined Contribution Plan A member first enrolling in MPSERS on or after September 4, 2012 may elect to enroll in the defined contribution plan. Employer and employee contribution rates and vesting requirements are consistent with the defined contribution component of the hybrid plan as described above. Required Contributions The contribution requirements of plan members and the District are established by Michigan State statute and may be amended only by action of the State Legislature. The District’s contributions to MPSERS under all plans for the years ended June 30, 2014, 2013, and 2012 were $2,748,040, $2,907,159, and $2,649,463, respectively, equal to the required contributions for each year. Other Post Employment Benefits Retirees enrolled in MPSERS before September 4, 2012 have the option of participating in the Premium Subsidy plan, a defined benefit postemployment healthcare plan, which is funded by employers on a cash disbursement basis. The State of Michigan has contracted to provide the comprehensive group medical, hearing, dental and vision coverage for retirees and beneficiaries. All health care benefits are on a selffunded basis. A significant portion of the premium is paid by MPSERS with the balance deducted from the monthly pension. Plan participants contribute 3 percent of covered payroll to the Retiree Healthcare Fund. At retirement, these individuals receive a subsidy for healthcare premiums that cover up to 80 percent of cost.
41
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Plan members enrolled on or after September 4, 2012 participate in the Personal Healthcare Fund. This defined contribution other postemployment benefits plan includes a required 2 percent employee contribution into a personal tax-deferred account, which is matched by an additional 2 percent employer contribution. Employees are fully vested in these contributions which can be used, along with earnings thereon, to pay for postemployment healthcare expenses. Plan members working prior to September 4, 2012 were given the option to convert from the Premium Subsidy plan to the Personal Healthcare Fund option. Effective February 1, 2013, these members are no longer required to make the 3 percent employee contribution. Amounts paid into the Retiree Healthcare Fund between September 4, 2012 and February 1, 2013 were credited to each individual’s Personal Healthcare Fund account. Any contributions made prior to September 4, 2012 are pending a Supreme Court resolution. The District’s contributions to MPSERS for other postemployment benefits are not separately identified and are included in the contribution amounts disclosed above. 13. ECONOMIC DEPENDENCY The District received approximately 82% of its General Fund revenue from the Michigan Department of Education. Due to the significance of this revenue source to the District, the District is considered to be economically dependent. 14. COMMITMENTS AND CONTINGENCIES Under the terms of various Federal and State grants and regulatory requirements, periodic audits are required and certain costs may be questioned as not being appropriate expenditures under the terms of the grants and requirements. Such audits could lead to reimbursement to the grantor or regulatory agencies. However, management does not believe such disallowances, if any, will be material to the financial position of the District. As is the case with other entities, the District faces exposure from potential claims and legal proceedings involving environmental matters. No such claims or proceedings have been asserted as of June 30, 2014. 15. SINKING FUND The Sinking Fund Capital Projects Fund (2010 Bond Debt Issue) records capital project activities with Sinking Funds used to purchase real estate sites for, and the construction or repair of school buildings. For this Fund, the District has complied with the applicable provisions of §1212(1) of the Michigan Revised School Code and the applicable section of the Revised Bulletin for School District Audits of Bonded Construction Funds and Sinking Funds in Michigan. During fiscal year 2014, there were no assets and liabilities or activity in this fund.
42
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 16. FUND BALANCE - GOVERNMENTAL FUNDS The District adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions . GASB 54 establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of resources reported in governmental funds. Detailed information on fund balances of governmental funds is as follows:
General
Nonspendable: Inventories Prepaid items Total nonspendable
$
11,737 11,737
2009 Bond Fund
Nonmajor Governmental Funds
$
$
-
22,218 22,218
Total
$
22,218 11,737 33,955
Restricted for: Food Service Community service Debt service Total restricted
-
933,332 933,332
309,263 101,368 120,410 531,041
309,263 101,368 1,053,742 1,464,373
Assigned for: Public improvement
-
-
32,680
32,680
2,621,392
-
-
2,621,392
Unassigned Totals fund balances governmental funds
$
2,633,129
43
$
933,332
$
585,939
$
4,152,400
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 17. NET INVESTMENT IN CAPITAL ASSETS The composition of net investment in capital assets as of June 30, 2014, was as follows: Governmental Activities Capital assets: Not being depreciated Being depreciated, net
$
181,770 16,697,520 16,879,290
Less related debt: Bonds and notes payable Unamortized premium Unamortized discount
12,916,950 123,467 (21,158) 13,019,259
Net investment in capital assets
$
3,860,031
18. EFFECT OF UPCOMING CHANGES IN ACCOUNTING PRONOUNCEMENTS The Governmental Accounting Standards Board has issued GASB Statement No. 68, Accounting and Financial Reporting for Pensions, which will be effective for the District’s fiscal year ending June 30, 2015. This statement will require the recognition of a “net pension liability” on the statement of net position, equal to the unfunded portion of the District’s defined benefit pension plan, as defined and calculated in accordance with the new standard. While the exact amount of this liability is not readily determinable at this time, management estimates that it may approximate $30,097,000. GASB 68 will require the net pension liability to be recorded for the year ending June 30, 2015, by restating beginning net position as of July 1, 2014. 19. SUBSEQUENT EVENTS In September 2014, the District purchased and received two 2011 Thomas school buses for a total amount of $102,000.
44
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES
45
BANGOR TOWNSHIP SCHOOLS Combining Balance Sheet Nonmajor Governmental Funds June 30, 2014 Special Revenue Food Services Assets Cash and cash equivalents Due from other governments Due from other funds Inventories Total assets Liabilities Accounts payable Salaries payable Accrued liabilities Due to other funds Unearned revenue
Debt Service 2006 Bond Issue Debt Service Fund
Community Service
$
364,053 7,598 22,218
$
100 101,268 -
$
82,667 -
$
393,869
$
101,368
$
82,667
$
2,087 14,262 4,627 33,227 8,185
$
-
$
150 -
Total liabilities
62,388
-
150
Fund balances Nonspendable Restricted Assigned
22,218 309,263 -
101,368 -
82,517 -
Total fund balances
331,481
101,368
82,517
Total liabilities and fund balances
$
46
393,869
$
101,368
$
82,667
Debt Service 2012 Bond Issue Debt Service Fund
Capital Projects
Durant Debt Service
Public Improvement
Totals
$
37,893 -
$
-
$
32,680 -
$
484,713 7,598 133,948 22,218
$
37,893
$
-
$
32,680
$
648,477
$
-
$
-
$
-
$
2,087 14,262 4,627 33,377 8,185
$
-
-
-
62,538
37,893 -
-
32,680
22,218 531,041 32,680
37,893
-
32,680
585,939
37,893
$
-
$
32,680
$
648,477
47
BANGOR TOWNSHIP SCHOOLS Combining Statement of Revenue, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds For the year ended June 30, 2014 Special Revenue Food Services
Debt Service 2006 Bond Issue Debt Service Fund
Community Service
Revenue Local sources
$
State sources
336,152
$
156,806
$
199,302
42,903
-
-
707,724
-
-
1,086,779
156,806
199,302
1,017,591
-
-
Community service
-
123,185
-
Tax abatements
-
-
2,171
Principal repayment
-
-
20,000
Interest and fiscal charges
-
-
178,520
-
1,396
-
1,017,591
124,581
200,691
69,188
32,225
-
-
-
(72,000)
-
-
(72,000)
-
-
(2,812)
32,225
(1,389)
69,143
83,906
Federal sources Total revenue Expenditures Current: Food services
Debt service:
Capital outlay Total expenditures Revenue over (under) expenditures
(1,389)
Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balance, beginning of year
334,293
Fund balance, end of year
$
48
331,481
$
101,368
$
82,517
Capital Projects
Debt Service 2012 Bond Issue Debt Service Fund $
$
749,551
Durant Debt Service $
Public Improvement -
$
-
Totals $
1,441,811
-
-
-
42,903
-
-
-
707,724
749,551
-
-
2,192,438
-
-
-
1,017,591
-
-
-
123,185
8,167
-
-
10,338
600,000
-
-
620,000
153,850
-
-
332,370
-
-
-
1,396
762,017
-
-
2,104,880
(12,466)
-
-
87,558
-
-
25,000
25,000
-
-
-
(72,000)
-
-
25,000
(47,000)
(12,466)
-
25,000
40,558
50,359
-
7,680
545,381
37,893
$
-
$
32,680
$
585,939
49
BANGOR TOWNSHIP SCHOOLS Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - Food Service Special Revenue Fund For the year ended June 30, 2014
Original Budget Revenue Local sources: Food sales Other revenue Interest
$
State sources - restricted
305,000 2,000 400 307,400
Final Budget
$
338,000 6,000 400 344,400
Actual
$
329,275 6,494 383 336,152
Actual Over (Under) Final Budget
$
(8,725) 494 (17) (8,248)
42,615
42,615
42,903
647,000 73,000 720,000
647,000 73,000 720,000
637,773 69,951 707,724
(9,227) (3,049) (12,276)
1,070,015
1,107,015
1,086,779
(20,236)
321,593 161,407 32,908 491,746 12,118
299,474 165,827 35,540 534,975 12,118
295,984 156,124 35,835 519,828 9,820
(3,490) (9,703) 295 (15,147) (2,298)
1,019,772
1,047,934
1,017,591
(30,343)
50,243
59,081
69,188
10,107
Other financing (uses) Transfers out
(75,000)
(75,000)
(72,000)
3,000
Net change in fund balance
(24,757)
(15,919)
(2,812)
13,107
Fund balance, beginning of year
334,293
334,293
Federal sources: Grants Commodities
Total revenue Expenditures Salaries Employee benefits Purchased services Supplies and materials Other expenses Total expenditures Revenue over (under) expenditures
Fund balance, end of year
$
309,536
50
$
318,374
288
334,293 $
331,481
$
13,107
BANGOR TOWNSHIP SCHOOLS Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - Community Service Special Revenue Fund For the year ended June 30, 2014
Original Budget Revenue Local sources: Participation fees
$
Expenditures Community services: Salaries Employee benefits Purchased services Supplies and materials Other expenses Capital outlay Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year
$
Final Budget
115,885
$
154,085
Actual
$
156,806
Actual Over (Under) Final Budget
$
2,721
65,277 28,389 600 10,800 8,295 -
65,238 32,113 300 20,980 6,495 2,420
67,880 31,833 160 18,182 5,130 1,396
2,642 (280) (140) (2,798) (1,365) (1,024)
113,361
127,546
124,581
(2,965)
2,524
26,539
32,225
5,686
69,143
69,143
69,143
-
71,667
$
51
95,682
$
101,368
$
5,686
SINGLE AUDIT ACT COMPLIANCE
52
Rehmann Robson 5800 Gratiot Rd. Suite 201 Saginaw, MI 48638 Ph: 989.799.9580 Fx: 989.799.0227 rehmann.com
INDEPENDENT AUDITORS' REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY OMB CIRCULAR A-133 October 3, 2014 To the Board of Education Bangor Township Schools Bay City, Michigan We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Bangor Township Schools (the "District") as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District's basic financial statements. We issued our report thereon dated October 3, 2014, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Rehmann is an independent member of Nexia International.
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BANGOR TOWNSHIP SCHOOLS Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2014
CFDA Number
Passed Through
Passthrough Grantor Number
10.553 10.553
MDE MDE
131970 141970
Cash assistance: National School Lunch Program: Section 11 Free & Reduced Section 11 Free & Reduced
10.555 10.555
MDE MDE
131960 141960
59,489 438,338
-
Non-cash assistance: Food Distribution: Entitlement commodities
10.555
MDE
N/A
78,136
-
Federal Agency / Cluster / Program Title U.S. Department of Agriculture Child Nutrition Cluster: Cash assistance: National School Breakfast: Breakfast Breakfast
Approved Award Amount
$
13,515 126,431
Accrued Revenue June 30, 2013
$
Total U.S. Department of Agriculture
U.S. Department of Education ESEA Title I Part A: Regular Regular
-
-
84.010 84.010
MDE MDE
131530-1213 141530-1314
465,926 395,013
183,173 183,173
Title II A - Improving Teacher Quality: Regular Regular
84.367A 84.367A
MDE MDE
130520-1213 140520-1314
136,691 135,206
94,472 94,472
McKinney Vento Homeless
84.196A
MDE & TISD
N/A
7,285
1,692
Total U.S. Department of Education
279,337
Total Federal Financial Assistance
$
See notes to schedule of expenditures of federal awards
54
279,337
Current Year Cash/ In-Kind Received
$
$
13,515 126,431 139,946
Expenditures (Memo Only) Prior Year
Expenditures Year Ended June 30, 2014
Accrued (Deferred) Revenue June 30, 2014
$
$
$
-
13,515 126,431 139,946
-
59,489 438,338 497,827
-
59,489 438,338 497,827
78,136
-
69,951
(8,185)
715,909
-
707,724
(8,185)
183,173 218,015 401,188
413,173 413,173
394,901 394,901
176,886 176,886
94,472 86,599 181,071
114,472 114,472
131,429 131,429
44,830 44,830
1,692
7,285
-
-
583,951
534,930
526,330
221,716
1,299,860
$
534,930
$
1,234,054
-
$
213,531
55
BANGOR TOWNSHIP SCHOOLS Notes to Schedule of Expenditures of Federal Awards 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of Bangor Township Schools (the “District”) under programs of the federal government for the year ended June 30, 2014. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations . Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District. 2. RECONCILIATION OF BASIC FINANCIAL STATEMENTS Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 1 to the District's financial statements. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments , wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. Cash received is recorded on the cash basis; expenditures are recorded on the modified accrual basis of accounting. Revenue is recognized when the qualifying expenditures have been included and all grant requirements have been met. The Schedule has been arranged to provide information on both actual cash received and the revenue recognized. Accordingly, the effects of accruals of accounts receivable, deferred revenue and accounts payable items at both the beginning and end of the fiscal year have been reported. Expenditures are in agreement with amounts reported in the financial statements and the financial reports. The amounts on the Grant Auditor Report reconcile with this Schedule. The amounts reported on the Recipient Entitlement Balance (PAL) Report agree with this schedule for USDA donated food commodities. Spoilage and pilferage are included in expenditure amounts reported. 3. PASS-THROUGH AGENCIES The District receives certain federal grant as subawards from non-federal entities. Pass-through entities, where applicable, have been identified in the Schedule with an abbreviation, defined as follows: Pass-through Agency Abbreviation MDE TISD
Pass-through Agency Name
Michigan Department of Education Tuscola Intermediate School District
56
Rehmann Robson 5800 Gratiot Rd. Suite 201 Saginaw, MI 48638 Ph: 989.799.9580 Fx: 989.799.0227 rehmann.com
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS October 3, 2014 Board of Education Bangor Township Schools Bay City, Michigan We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Bangor Township Schools (the "District"), as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, and have issued our report thereon dated October 3, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
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57
Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
58
Rehmann Robson 5800 Gratiot Rd. Suite 201 Saginaw, MI 48638 Ph: 989.799.9580 Fx: 989.799.0227 rehmann.com
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 October 3, 2014 Board of Education Bangor Township Schools Bay City, Michigan Report on Compliance for Each Major Federal Programs We have audited Bangor Township Schools' (the "District") compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on the District's major federal program for the year ended June 30, 2014. The District's major federal program is identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Independent Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of the District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination on the District's compliance.
Rehmann is an independent member of Nexia International.
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59
Opinion on Each Major Federal Program In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2014. Report on Internal Control Over Compliance Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
60
BANGOR TOWNSHIP SCHOOLS Schedule of Findings and Questioned Costs For the Year Ended June 30, 2014 SECTION I - SUMMARY OF AUDITORS’ RESULTS Financial Statements Type of auditors’ report issued:
Unmodified
Internal control over financial reporting: Material weakness(es) identified?
yes
X
no
Significant deficiency(ies) identified?
yes
X
none reported
yes
X
no
Material weakness(es) identified?
yes
X
no
Significant deficiency(ies) identified?
yes
X
none reported
X
no
Noncompliance material to financial statements noted? Federal Awards Internal control over major programs:
Type of auditors’ report issued on compliance for major programs:
Unmodified
Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section 510(a)?
yes
Identification of major programs: CFDA Number
Name of Federal Program or Cluster
10.553 and 10.555
Child Nutrition Cluster
Dollar threshold used to distinguish between Type A and Type B programs:
$
Auditee qualified as low-risk auditee?
300,000 X
SECTION II – FINANCIAL STATEMENT FINDINGS None. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None.
61
yes
no
BANGOR TOWNSHIP SCHOOLS Summary Schedule of Prior Audit Findings
For the Year Ended June 30, 2014 None.
62
Year Ended June 30, 2014
Financial Statements and Single Audit Act Compliance
BANGOR TOWNSHIP SCHOOLS ELECTED OFFICERS For the year ended June 30, 2014 ADMINISTRATION Superintendent
Matt Schmidt
BOARD OF EDUCATION President Vice President Secretary Treasurer Trustee Trustee Trustee
Richard Kowalski John Loop Timothy Allen Brian Tobin Mark Seymour Patrick Shaffer Melissa Kaczmarek
BANGOR TOWNSHIP SCHOOLS Table of Contents Page Independent Auditors' Report
1
Management's Discussion and Analysis
5
Basic Financial Statements District-wide Financial Statements: Statement of Net Position Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation of Fund Balances for Governmental Funds to Net Position of Governmental Activities Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Reconciliation of Net Changes in Fund Balances of Governmental Funds to Change in Net Position of Governmental Activities Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund Statement of Fiduciary Assets and Liabilities Notes to the Financial Statements Combining and Individual Fund Financial Statements and Schedules Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Food Service Special Revenue Fund Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Community Service Special Revenue Fund Single Audit Act Compliance Independent Auditors' Report on the Schedule of Expenditures of Federal Awards Required by OMB Circular A-133 Schedule of Expenditures of Federal Awards Notes to the Schedule of Expenditures of Federal Awards Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors’ Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133 Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings
12 13 15 16 17 18 19 27 29
46 48 50 51
53 54 56
57 59 61 62
Rehmann Robson 5800 Gratiot Rd. Suite 201 Saginaw, MI 48638 Ph: 989.799.9580 Fx: 989.799.0227 rehmann.com
INDEPENDENT AUDITORS' REPORT
October 3, 2014 To the Board of Education Bangor Township Schools Bay City, Michigan Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Bangor Township Schools (the “District”), as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Independent Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Rehmann is an independent member of Nexia International.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Bangor Township Schools , as of June 30, 2014, and the respective changes in financial position thereof and the budgetary comparison for the general fund for the year then ended in conformity with accounting principles generally accepted in the United States of Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole.
2
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated October 3, 2014, on our consideration of the District’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control over financial reporting and compliance.
3
MANAGEMENT'S DISCUSSION AND ANALYSIS
4
BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis The Bangor Township Schools (the "District") is a K-12 school district located in Bay City, Michigan. As management of the District, we offer the readers of the District's financial statements this narrative overview and analysis of its financial activities for the years ended June 30, 2014 and 2013. The management’s discussion and analysis is provided at the beginning of the audit to provide an overview of the past and current position of the District’s financial condition. This summary should not be taken as a replacement for the audit which consists of the financial statements and other supplemental information that presents all the District’s revenue and expenditures by program for the General Fund, Food Service, Community Service, Capital Projects, and Debt Service Funds. Using This Financial Report This discussion and analysis is intended to serve as an introduction to the District's basic financial statement. The District's basic financial statements are comprised of five components: 1) district-wide financial statement, 2) fund financial statements, 3) statement of fiduciary assets and liabilities, 4) notes to the financial statements and 5) single audit. This report contains supplementary information to compliment the financial information provided. District-Wide Financial Statements. The district-wide financial statements are designed to provide readers with a broad overview of the District's finances, similar to the private sector financial statements. They provide a clear picture of the District as a single entity to complement the traditional fund-based financial statements. The statement of net position presents information on all of the District's assets and liabilities, with the difference between the two reported as net position. Net position should be understood as a measure of “net worth” rather than as a measure of expendable or available resources. Over time, increases or decreases in the net position of the District may service as a useful indicator of whether the Bangor Township Schools' financial position is improving or deteriorating. Fund Financial Statements. The fund financial statements focus on individual parts of the District, reporting the District’s operation in more detail than the district-wide statements. The fund level statements are reported on a modified accrual basis. The assets that are measurable and currently available are reported. Liabilities are recognized to the extent they are normally expected to be paid with current financial resources. Fiduciary Fund. The District acts as the trustee for its student activity funds. All of the District’s fiduciary activities are reported in separate statements of fiduciary assets and liabilities. These activities are excluded from the District’s other financial statements because the District cannot use these assets to finance its operations. The District is responsible for ensuring that the assets reported in these funds are used for their intended purposes.
5
BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis Statement of Net Position The statement of net position provides the perspective of the District as a whole. Table 1 provides a summary of the District’s net position as of June 30, 2014 and 2013. Table 1 Governmental Activities 2013-2014 Assets Current and other assets Capital assets Less accumulated depreciation Capital asset, net book value Total assets Liabilities Current liabilities Long-term liabilities: Due within one year Due in more than one year Total liabilities Net Position Net investment in capital assets Restricted Unrestricted Total net position
2012-2013
$ 6,102,721 $ 6,264,626 30,555,927 29,892,203 (13,676,637) (12,650,936) 16,879,290 17,241,267 22,982,011 23,505,893
1,992,381
2,408,571
1,310,235 13,350,660 16,653,276
1,147,971 13,590,872 17,147,414
3,860,031 1,444,531 1,024,173 $ 6,328,735
3,990,498 834,264 1,533,717 $ 6,358,479
The above analysis focuses on the net position (see Table 1). The change in net position (see Table 2) of the District’s governmental activities is discussed below. The District’s net position was $6,328,735 at June 30, 2014. The District's net investment in capital assets totaled $3,860,031. This compares the original cost, less depreciation of the District’s capital assets, to long-term debt used to finance the acquisition of those assets. Most of the debt will be repaid from voter-approved property taxes collected as the debt service comes due. An amount of $1,444,531 is restricted to pay debt service amounts owed by the District, and for future food service and community service expenditures. The remaining amount of net position, $1,024,173 was unrestricted. This amount represents the accumulated results of all past years’ operations. The unrestricted net position balance is used for working capital and cash flow needs as well as to provide for future uncertainties. The operating results of the General Fund will have a significant impact on the change in unrestricted net position from year-to-year. The results of this year’s operations for Bangor Township Schools as a whole are reported in the statement of activities (see Table 2), which shows the changes in net position for fiscal year 2014. As reported in the statement of activities, the cost of all governmental activities this year was $22,769,478. Certain activities were partially funded from those who benefited from the programs, in the amount of $900,398, or by other governments and organizations that subsidized certain programs with grants and contributions, in the amount of $2,458,231. The remaining “public benefit” portion of governmental activities was funded with $3,617,674 in taxes, $15,757,840 in State foundation allowance and $5,591 in investment earnings. The District experienced a decrease in net position of $29,744. The assets decreased as a result of both ongoing operations in the School District and long-term debt payments made during the year. Long-term debt decreased by $77,948 in 2014.
6
BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis Table 2 Governmental Activities 2013-2014 Revenues Program revenues: Charges for services Operating grants
$
General revenues: Property taxes-general State aid unrestricted Other Investment earnings unrestricted Total revenues Functions/Program Expenses Instruction Supporting services Food services Athletics Community services Interest on long-term debt Depreciation (unallocated) Total expenses Decrease in net position Net position: Beginning of year End of year
2012-2013
900,398 2,458,231
$ 1,027,032 2,266,263
3,617,674 15,757,840 5,591 22,739,734
3,809,274 15,299,562 72,728 4,838 22,479,697
11,783,668 8,055,135 1,030,034 425,085 126,470 318,871 1,030,215 22,769,478 (29,744)
12,060,146 7,841,408 1,027,052 409,064 118,336 296,245 1,028,731 22,780,982 (301,285)
6,358,479 $ 6,328,735
6,659,764 $ 6,358,479
The District's net position was decreased by $29,744 during the current fiscal year, which is a significantly lower decrease from the prior year. This change is mainly due to an increase in the unrestricted State aid revenue of approximately $458,000, which is offset by a decrease in property taxes-general revenue of approximately $192,000. As discussed above, the net cost shows the financial burden that was placed on the State and Bangor Township Schools taxpayers by each of these functions. Since property taxes for operations and unrestricted State aid constitute the vast majority of Districts operating revenue sources, the Board of Education and Administration must annually evaluate the needs of the School District and balance those needs with State-prescribed available unrestricted revenue. Bangor Township Schools Funds As noted earlier, the District uses funds to help it control and manage money for particular purposes. Looking at funds helps the reader consider whether the District is being held accountable for the resources taxpayers and others provide to it and may give more insight into the District’s overall financial health.
7
BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis As the District completed the 2014 school year, the governmental funds reported a combined fund balance of $4,152,400, an increase of $253,734 from the prior year. The changes by major and non-major funds are as follows: 2009 Bond Other Total Debt Service Governmental Governmental General Fund Fund Funds Funds Fund balance, beginning of year Increase/(Decrease) Fund balance, end of year
$ 2,653,286
$
(20,157) $ 2,633,129
699,999
$
233,333 $
933,332
$
545,381
$ 3,898,666
40,558
253,734
585,939
$ 4,152,400
In the General Fund, our principal operating fund, the fund balance had a slight decrease of $20,157 from 2013. The fund balance of the General Fund is available to fund costs related to allowable school operating purposes. The fund balance for the Debt Service funds was $1,053,742. Millage rates for debt service were established at 2.1700 mills for the 2013-14 fiscal year. Millage rates are determined annually to ensure that the District accumulates sufficient resources to pay annual bond debt service. The other nonmajor funds (special revenue and capital projects) increased by $54,413 primarily from the community service special revenue fund and public improvement capital project fund. General Fund Budgetary Highlights Over the course of the year, Bangor Township Schools revises its budget as it attempts to account for unexpected changes in revenue and expenditures. State law requires that the budget be amended to ensure that expenditures do not exceed appropriations. The final amendment to the budget was actually adopted in June 2014. A statement showing the District’s original and final budget amounts compared with amounts actually paid and received is provided in these financial statements. Revisions were made to the 2013-14 General Fund original budget on February 17, 2014 and June 16, 2014. There were two significant increases noted from the General Fund original budget to the final amended budget which included; an increase in other business services of $102,352 for tax abatements and an increase in staff/personnel services in the amount of $53,179 for the hiring of a Human Resources Director. Capital Asset and Debt Administration Capital Assets. At June 30, 2014, the District had $16,879,290 invested in a broad range of capital assets, including land, buildings, and furniture and equipment. This amount represents a net decrease (including additions, deductions, and depreciation) of $361,977 or approximately 2.1%, from 2013. 2013-2014 Land Buildings and improvements (net of accumulated depreciation) Furniture, equipment and vehicles (net of accumulated depreciation) Total capital assets
8
$
181,770 15,357,832 1,339,688 $ 16,879,290
2012-2013 $
181,770 16,189,570 869,927 $ 17,241,267
BANGOR TOWNSHIP SCHOOLS Management's Discussion and Analysis Long-term Debt. At the end of this year, Bangor Township Schools District had $12,510,000 in bonds outstanding versus $13,130,000 in the previous year - a change of approximately 4.7%. Those bonds consisted of the following:
General Obligation Bonds
2013-2014
2012-2013
$ 12,510,000
$ 13,130,000
The District’s general obligation bond rating continues to be AAA. Other obligations include installment notes, accrued retirement incentive, vacation pay, and sick leave. We present more detailed information about our long-term liabilities in the notes to financial statements. Economic Factors and Next Year's Budgets and Rates Our elected officials and administration considered many factors when preparing the District’s 2014-15 fiscal year budget. Retirement rate increased from 24.79% to 25.78% for the upcoming 2014-15 school year. One of the most important factors affecting the budget is our student count. The State foundation revenue is determined by multiplying the blended student count by the foundation allowance per pupil. The blended count for 2014-15 fiscal year is 90% of the September 2014 and 10% of the February 2015 student counts. The 2014-15 budgets were adopted in June 2014, based on an estimate of 2,383 students that will be enrolled in September 2014. Approximately 81% of total General Fund revenue is from the foundation allowance. The State is looking to increase the foundation allowance from 7,076 to 7,126 for the 2014-15 school year. Under State law, the District cannot assess additional property tax revenue for general operations. As a result, District funding is heavily dependent on the State’s ability to fund local school operations. Once the final student count and related per pupil funding is validated, State law requires the School District to amend the budget if actual District resources are not sufficient to fund original appropriations. Since the District’s revenue is heavily dependent on State funding and the health of the State School Aid Fund, the actual revenue received depends on the State’s ability to collect revenue to fund its appropriation to school districts. The State periodically holds revenue estimating conferences to estimate revenue. If actual State revenue is less than their estimates, reduction to the per-pupil funding allowance may be necessary. The District’s unassigned General Fund balance of $2,633,125 is sufficient to meet any unanticipated shortfalls the State may experience in the School Aid Fund for the 2014-15 school year.
Requests for Information This financial report is designed to give our citizens, taxpayers, parents, students, investors and creditors a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. Questions concerning this report or requests for additional information should be addressed to Jonathan Foco, Chief Financial Officer, Bangor Township Schools, 3359 E. Midland Road, Bay City, Michigan 48706; telephone number (989) 684-8121, x1204.
9
BASIC FINANCIAL STATEMENTS
10
DISTRICT-WIDE FINANCIAL STATEMENTS
11
BANGOR TOWNSHIP SCHOOLS Statement of Net Position June 30, 2014 Governmental Activities Assets Cash and cash equivalents Investments Receivables Other assets Capital assets not being depreciated Capital assets being depreciated, net
$
Total assets
1,696,481 781,570 3,590,715 33,955 181,770 16,697,520 22,982,011
Liabilities Accounts payable and accrued liabilities Unearned revenue Long-term liabilities: Due within one year Due in more than one year
1,310,235 13,350,660
Total liabilities
16,653,276
1,984,196 8,185
Net position Net investment in capital assets Restricted for: Debt service Food service Community service Unrestricted
3,860,031 1,011,682 331,481 101,368 1,024,173
Total net position
$
The accompanying notes are an integral part of these financial statements.
12
6,328,735
BANGOR TOWNSHIP SCHOOLS Statement of Activities For the year ended June 30, 2014 Program Revenues
Functions / Programs Governmental activities: Instruction Supporting services Food service Athletics Community service Interest on long-term debt Unallocated depreciation Total
Charges for Services
Expenses
Operating Grants and Contributions
Net (Expense) Revenue
$
11,783,668 8,055,135 1,030,034 425,085 126,470 318,871 1,030,215
$
68,480 189,879 378,672 106,561 156,806 -
$
526,330 1,224,177 707,724 -
$ (11,188,858) (6,641,079) 56,362 (318,524) 30,336 (318,871) (1,030,215)
$
22,769,478
$
900,398
$
2,458,231
$ (19,410,849)
General revenues: Property taxes Unrestricted state aid Unrestricted investment earnings
3,617,674 15,757,840 5,591
Total general revenues
19,381,105
Change in net position
(29,744)
Net position, beginning of year
6,358,479
Net position, end of year
$
The accompanying notes are an integral part of these financial statements.
13
6,328,735
FUND FINANCIAL STATEMENTS
14
BANGOR TOWNSHIP SCHOOLS Balance Sheet Governmental Funds June 30, 2014
General Fund Assets Cash and cash equivalents Investments Accounts receivable Due from other governments Due from other funds Prepaid items Inventories Total assets Liabilities Accounts payable Salaries payable Accrued liabilities Due to other funds Unearned revenue
2009 Bond Debt Service Fund
Other Governmental Funds
Totals
$
278,436 781,570 233,764 3,349,353 11,737 -
$
933,332 -
$
484,713 7,598 133,948 22,218
$
1,696,481 781,570 233,764 3,356,951 133,948 11,737 22,218
$
4,654,860
$
933,332
$
648,477
$
6,236,669
$
248,486 1,157,644 515,030 100,571 -
$
-
$
2,087 14,262 4,627 33,377 8,185
$
250,573 1,171,906 519,657 133,948 8,185
Total liabilities
2,021,731
-
62,538
2,084,269
Fund balances Nonspendable Restricted Assigned Unassigned
11,737 2,621,392
933,332 -
22,218 531,041 32,680 -
33,955 1,464,373 32,680 2,621,392
Total fund balances
2,633,129
933,332
585,939
4,152,400
Total liabilities and fund balances
$
4,654,860
$
933,332
The accompanying notes are an integral part of these financial statements.
15
$
648,477
$
6,236,669
BANGOR TOWNSHIP SCHOOLS Reconciliation Fund Balances for Governmental Funds to Net Position of Governmental Activities June 30, 2014 Fund balances - total governmental funds
$ 4,152,400
Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources, and therefore are not reported in the fund statement. Capital assets
30,555,927
Accumulated depreciation
(13,676,637)
Certain liabilities, such as bonds payable, are not due and payable in the current period, and therefore are not reported in the funds. Bonds and installment notes payable
(12,916,950)
Unamortized premiums
(123,467)
Unamortized discounts
21,158
Accrued interest on bonds payable
(42,060)
Accrued retirement incentives
(1,179)
Compensated absences
(1,640,457)
Net position of governmental activities
$ 6,328,735
The accompanying notes are an integral part of these financial statements.
16
BANGOR TOWNSHIP SCHOOLS Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the year ended June 30, 2014
General Fund Revenues Local sources State sources Federal sources Interdistrict sources Charges for services
$
Total revenues Expenditures Current: Instruction Supporting services Community services Food service activities Athletic activities Tax abatements Debt service: Principal repayment Interest and fiscal charges Capital outlay Total expenditures
2,932,388 16,951,218 526,330 30,799 106,561
2009 Bond Debt Service Fund
Other Governmental Funds
$
$
-
1,441,811 42,903 707,724 -
Totals $
4,374,199 16,994,121 1,234,054 30,799 106,561
20,547,296
-
2,192,438
22,739,734
12,432,563 7,334,328 1,889 425,085 -
-
123,185 1,017,591 10,338
12,432,563 7,334,328 125,074 1,017,591 425,085 10,338
77,593 5,512 588,693
-
620,000 332,370 1,396
697,593 337,882 590,089
20,865,663
-
2,104,880
22,970,543
87,558
(230,809)
Revenue over (under) expenditures
(318,367)
-
Other financing sources (uses) Proceeds from issuance of long-term debt Transfers in from other funds Transfers out to other funds
484,543 72,000 (258,333)
233,333 -
25,000 (72,000)
484,543 330,333 (330,333)
Total other financing sources (uses)
298,210
233,333
(47,000)
484,543
Net change in fund balances
(20,157)
233,333
40,558
253,734
699,999
545,381
3,898,666
Fund balance, beginning of year Fund balance, end of year
2,653,286 $
2,633,129
$
The accompanying notes are an integral part of these financial statements.
17
933,332
$
585,939
$
4,152,400
BANGOR TOWNSHIP SCHOOLS Reconciliation Net Changes in Fund Balances of Governmental Funds to Change in Net Position of Governmental Activities For the year ended June 30, 2014 Net change in fund balances - total governmental funds
$
253,734
Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay Depreciation expense
767,566 (1,129,543)
Bond proceeds provide current financial resources to governmental funds in the period issued, but issuing bonds increases long-term liabilities in the statement of net position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Issuance of long-term debt Principal payments on long-term liabilities
(484,543) 697,593
Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Change in accrued interest payable on long-term debt Amortization of bond premium Amortization of bond discount Change in the accrual for compensated absences Change in the accrual for retirement incentive payable Change in net position of governmental activities
551 20,576 (2,116) (174,455) 20,893 $
The accompanying notes are an integral part of these financial statements.
18
(29,744)
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Revenues Local sources: Property taxes Property taxes-interest and penalties Interest Transfers from other districts: Rental of facilities Transportation fees Other
$
Final Budget
2,902,000 5,000 2,500
$
2,691,538 6,105 2,500
Actual
$
2,666,475 6,104 1,450
Actual Over (Under) Final Budget
$
(25,063) (1) (1,050)
64,248 200,000 67,570
74,248 115,861 60,093
73,203 116,676 68,480
(1,045) 815 8,387
3,241,318
2,950,345
2,932,388
(17,957)
State sources: State Aid Foundation State School Readiness At Risk Special Education
14,798,161 217,260 477,907 850,000
15,101,335 337,125 550,683 859,024
15,208,600 337,125 549,240 856,253
107,265 (1,443) (2,771)
Total revenue from state sources
16,343,328
16,848,167
16,951,218
103,051
Federal sources - restricted: Title I Title IIA
439,406 132,019
395,014 135,206
394,901 131,429
(113) (3,777)
Total revenue from federal sources
571,425
530,220
526,330
(3,890)
Revenue from interdistrict sources: Special education
-
30,799
30,799
-
88,430
104,869
106,561
1,692
20,244,501
20,464,400
20,547,296
82,896
Total revenue from local sources
Charges for services Total revenues
continued…
19
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures Instruction: Basic programs: Elementary school: Salaries Employee benefits Purchased services Supplies and materials Total elementary school
$
2,466,664 1,449,349 121,913 107,675 4,145,601
Final Budget
$
2,492,633 1,401,127 118,013 82,434 4,094,207
Actual
$
2,488,237 1,382,339 141,174 80,022 4,091,772
Actual Over (Under) Final Budget
$
(4,396) (18,788) 23,161 (2,412) (2,435)
Middle school: Salaries Employee benefits Purchased services Supplies and materials Other Total middle school
1,598,530 889,701 51,175 67,300 575 2,607,281
1,675,009 887,161 37,980 53,250 575 2,653,975
1,674,775 884,445 48,744 49,848 487 2,658,299
(234) (2,716) 10,764 (3,402) (88) 4,324
High school: Salaries Employee benefits Purchased services Supplies and materials Total high school
1,830,167 1,057,257 90,269 78,163 3,055,856
1,792,671 1,037,172 77,643 74,657 2,982,143
1,795,762 1,018,348 82,750 73,787 2,970,647
3,091 (18,824) 5,107 (870) (11,496)
Preschool: Salaries Employee benefits Purchased services Supplies and materials Other Total preschool
148,560 65,530 15,925 13,700 2,400 246,115
145,051 67,946 22,525 24,272 2,400 262,194
144,902 67,642 20,097 20,990 2,059 255,690
(149) (304) (2,428) (3,282) (341) (6,504)
10,054,853
9,992,519
9,976,408
(16,111)
Total basic programs
continued…
20
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Added needs: Special Education: Salaries Employee benefits Purchased services Supplies and materials Other Total special education Compensatory education: Salaries Employee benefits Purchased services Supplies and materials Total compensatory education Total added needs Total instruction Supporting services: Pupil services: Guidance: Salaries Employee benefits Purchased services Supplies and materials Total guidance
$
1,099,792 743,154 70,966 9,356 1,923,268
Final Budget
$
1,035,184 667,071 73,390 9,164 1,784,809
Actual
$
1,041,581 658,989 76,752 9,922 59,091 1,846,335
Actual Over (Under) Final Budget
$
6,397 (8,082) 3,362 758 59,091 61,526
404,592 164,526 16,500 8,525 594,143
401,786 174,615 9,000 585,401
406,990 191,639 11,191 609,820
5,204 17,024 2,191 24,419
2,517,411
2,370,210
2,456,155
85,945
12,572,264
12,362,729
12,432,563
69,834
404,381 321,062 8,450 3,900 737,793
464,957 369,137 1,300 2,550 837,944
474,207 366,358 1,125 2,186 843,876
9,250 (2,779) (175) (364) 5,932 continued…
21
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Supporting services (continued): Instructional staff: Improvement of instruction: Salaries Employee benefits Purchased services Supplies and materials Total improvement of instruction Library: Salaries Employee benefits Purchased services Supplies and materials Other Total library Supervision and direction of instructional staff: Salaries Employee benefits Supplies and materials Other Total supervision and direction of instructional staff Total instructional staff
$
251,376 96,443 65,594 12,281 425,694
Final Budget
$
207,552 101,414 36,673 6,036 351,675
Actual
$
199,671 108,002 33,116 7,635 348,424
Actual Over (Under) Final Budget
$
(7,881) 6,588 (3,557) 1,599 (3,251)
58,531 19,776 8,850 10,835 600 98,592
61,118 23,588 12,602 10,160 107,468
58,895 23,565 12,134 9,542 104,136
(2,223) (23) (468) (618) (3,332)
20,746 7,048 900 26,500
28,400 9,680 560 49,263
28,373 9,892 755 44,844
(27) 212 195 (4,419)
55,194
87,903
83,864
(4,039)
579,480
547,046
536,424
(10,622) continued…
22
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Supporting services (continued): General Administration: Board of education: Salaries Purchased services Supplies and materials Other Total board of education Executive administration: Salaries Employee benefits Purchased services Supplies and materials Other Total executive administration Total general administration School administration: Office of the principal: Salaries Employee benefits Purchased services Supplies and materials Other Total office of the principal Business Services: Fiscal Services: Salaries Employee benefits Purchased services Supplies and materials Total fiscal services
$
15,000 72,300 250 12,800 100,350
Final Budget
$
16,911 56,300 550 9,500 83,261
Actual
$
17,261 55,664 503 12,873 86,301
Actual Over (Under) Final Budget
$
350 (636) (47) 3,373 3,040
252,000 135,304 5,500 6,600 6,500 405,904
260,100 122,593 11,776 5,200 7,000 406,669
272,692 123,005 16,193 5,458 5,869 423,217
12,592 412 4,417 258 (1,131) 16,548
506,254
489,930
509,518
19,588
729,832 434,772 22,200 12,345 4,105 1,203,254
741,160 432,761 21,400 7,618 3,400 1,206,339
742,715 430,291 18,522 6,934 1,334 1,199,796
1,555 (2,470) (2,878) (684) (2,066) (6,543)
165,000 104,957 10,900 3,000 283,857
160,900 99,367 11,400 2,700 274,367
160,932 99,128 9,565 2,286 271,911
32 (239) (1,835) (414) (2,456) continued…
23
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Supporting services (continued): Business Services (concluded): Internal services: Salaries Employee benefits Purchased services Supplies and materials Total internal services Other business services: Purchased services Other Tax abatements Total other business services
$
19,000 4,612 36,100 2,000 61,712
Final Budget
$
20,500 4,754 36,000 483 61,737
Actual
$
20,118 4,560 35,082 483 60,243
Actual Over (Under) Final Budget
$
(382) (194) (918) (1,494)
8,600 2,925 10,000 21,525
7,158 2,000 114,720 123,878
7,158 2,145 114,747 124,050
367,094
459,982
456,204
(3,778)
Operation and maintenance of plant: Salaries Employee benefits Purchased services Supplies and materials Other Total operation and maintenance of plant
608,043 438,459 868,750 193,789 15,500 2,124,541
555,477 385,408 922,490 157,089 74,276 2,094,740
555,273 380,224 983,488 147,608 71,348 2,137,941
(204) (5,184) 60,998 (9,481) (2,928) 43,201
Pupil transportation: Salaries Employee benefits Purchased services Supplies and materials Other Total pupil transportation
501,234 324,851 163,981 231,800 5,000 1,226,866
517,173 313,957 98,551 219,000 4,400 1,153,081
488,817 298,725 97,529 208,589 4,779 1,098,439
(28,356) (15,232) (1,022) (10,411) 379 (54,642)
Total business services
145 27 172
continued…
24
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (continued) Supporting services (concluded): Central services: Staff/personnel services: Salaries Employee benefits Purchased services Supplies and materials Total staff/personnel services
$
Data processing services: Salaries Employee benefits Purchased services Supplies and materials Total data processing services
63,850 1,300 65,150
Final Budget
$
Actual Over (Under) Final Budget
Actual
55,000 24,679 36,650 2,000 118,329
$
54,788 24,874 35,489 1,999 117,150
$
(212) 195 (1,161) (1) (1,179)
60,000 25,084 204,100 16,800 305,984
60,600 28,981 180,581 15,020 285,182
60,600 28,941 131,884 10,083 231,508
(40) (48,697) (4,937) (53,674)
30,000 39,795 69,795
17,781 17,295 35,076
17,781 15,686 33,467
(1,609) (1,609)
Total central services
440,929
438,587
382,125
(56,462)
Other support services: Student activities Salaries Employee benefits Purchased services Total student activities
90,500 31,640 35,600 157,740
83,417 31,640 43,000 158,057
85,906 30,466 53,306 169,678
2,489 (1,174) 10,306 11,621
9,000 709 1,300
500
327
(173)
11,009
500
327
(173)
168,749
158,557
170,005
7,354,960
7,386,206
7,334,328
Other central services: Salaries Employee benefits Total other central services
Planning, research, development and evaluation: Salaries Employee benefits Purchased services Total planning, research, development and evaluation Total other support services Total supporting services
11,448 (51,705) continued…
25
BANGOR TOWNSHIP SCHOOLS Statement of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - General Fund For the year ended June 30, 2014
Original Budget Expenditures (concluded) Community services: Nonpublic school pupils: Purchased services Supplies and materials Total nonpublic school pupils
$
Athletics: Salaries Employee benefits Purchased services Supplies and materials Other Total athletics
1,683 3,695 5,378
Total expenditures
$
6,829 3,916 10,745
Actual
$
1,889 1,889
$
(6,829) (2,027) (8,856)
140,681 59,524 202,704 9,970 5,093 417,972
152,077 63,792 194,961 8,994 5,129 424,953
153,632 62,088 193,597 9,839 5,929 425,085
1,555 (1,704) (1,364) 845 800 132
-
77,594 5,512 83,106
77,593 5,512 83,105
(1) (1)
87,000
590,580
588,693
(1,887)
20,437,574
20,858,319
20,865,663
Debt service: Principal repayment Interest and fiscal charges Total debt service Capital outlay
Final Budget
Actual Over (Under) Final Budget
7,344
Revenue over (under) expenditures
(193,073)
(393,919)
(318,367)
Other financing sources (uses) Proceeds from issuance of long-term debt Transfers in Transfers out
72,000 (268,109)
484,543 72,000 (258,334)
484,543 72,000 (258,333)
(1)
Total other financing sources (uses)
(196,109)
298,209
298,210
(1)
Net change in fund balances
(389,182)
(95,710)
(20,157)
Fund balance, beginning of year Fund balance, end of year
2,653,286 $
2,264,104
2,653,286 $
2,557,576
75,552
75,553
2,653,286 $
2,633,129
$
75,553 concluded
The accompanying notes are an integral part of these financial statements.
26
BANGOR TOWNSHIP SCHOOLS Statement of Fiduciary Assets and Liabilities June 30, 2014 Agency Fund Assets Cash and cash equivalents
$
561,793
Liabilities Due to other funds
230,956
Due to student groups
330,837
Total liabilities
$
The accompanying notes are an integral part of these financial statements.
27
561,793
NOTES TO FINANCIAL STATEMENTS
28
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity Bangor Township Schools (the “District”) has followed the guidelines of the Governmental Accounting Standards Board’s Statement No. 61 and has determined that no entities should be consolidated into its basic financial statements as component units. Therefore, the reporting entity consists of the primary government financial statements only. The criteria for including a component unit include entities for which the District is considered to be financially accountable. District-Wide and Fund Financial Statements The district-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenue, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The District had no businesstype activities during the year ended 2014. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenue. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenue includes 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenue are reported instead as general revenue. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the district-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting and Financial Statement Presentation The district-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the fiduciary fund financial statements, except for agency funds, which do not have a measurement focus. Revenue is recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as they are both measurable and available. Revenue is considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenue to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
29
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Property taxes, intergovernmental revenue, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. The District reports the following major governmental funds: The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for and reported in another fund. The 2009 Bond Debt Service Fund is used to account for all financial resources restricted, committed or assigned to expenditure for principal and interest related to the 2009 Debt Service Bonds. Additionally, the District reports the following fund types: The special revenue funds are used to account and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. The debt service funds are used to account for all financial resources restricted, committed or assigned to expenditure for principal and interest. The capital projects fund is used to account for all financial resources restricted, committed or assigned to expenditure for the acquisition or construction of capital assets. The agency fund accounts for assets held for other groups and organizations and are custodial in nature. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, and then unrestricted resources as they are needed. Deposits and investments The District’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments include deposits with the Michigan Liquid Asset Fund. Receivables and Payables The District follows the practice of recording revenues that have been earned but not yet received as receivables. Receivables consist primarily of State Aid payments from the State of Michigan and Federal grant funds earned but not yet collected. No amounts have been identified as potentially uncollectible by management, and therefore, no amount has been recorded as a provision for bad debts. Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans).
30
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Other Assets All inventories are valued at cost using the first-in/first out (“FIFO”) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Payments to vendors for services that will benefit periods beyond a fund's fiscal year-end are recorded as prepaid items in both the government-wide and fund financial statements. Capital Assets Capital assets, which include property and equipment, are reported in the governmental activities column in the government wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets of the primary government are depreciated using the straight line method over the following estimated useful lives: Assets
Years
Buildings Vehicles Equipment and other
20-50 5-10 5-10
Salaries Payable and Accrued Employee Benefits A liability is recorded at June 30 for those amounts owed to teachers and other employees of the District who do not work during the summer when school is not in session but have elected to have their salaries paid over an entire year. This has the effect of properly charging their salaries to expenditures in the fiscal year in which their services are received, even though they are not paid until July and August of the following fiscal year. The liability for accrued retirement and the employer share of FICA related to the salaries payable has been recorded, as has the liability for employee health insurances for the months of July and August. The District pays these insurances for this period as a part of the compensation for services rendered in the preceding school year. Compensated Absences and Other Termination Benefits It is the District’s policy to permit employees to accumulate various earned but unused vacation and sick pay benefits. These are accrued when incurred in the government wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations or retirements.
31
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Benefits are accrued based on various contract stipulations and lengths of service for the various bargaining units. In addition, employees with 15 or more years of service that are members of the District’s teacher’s and administration bargaining units are entitled to severance payouts of $15,000 upon separation from the District. Also, teachers that were hired prior to June 1, 1994, are entitled to a $6,000 longevity payment in their last year of employment. Long-term obligations In the government wide financial statements, long term obligations are reported as liabilities in the governmental activities statement of net position. Where applicable, bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Equity In the fund financial statements, governmental funds report nonspendable fund balance for amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually require to be maintained intact. Restricted fund balance is reported when externally imposed constraints are placed on the use of the resources by grantors, contributors, or laws or regulations of other governments. Committed fund balance is reported for amounts that can be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision making authority, the Board of Education. A formal resolution of the Board of Education is required to establish, modify or rescind a fund balance commitment. The District reports assigned fund balance for amounts that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed. The Board has delegated the authority to assign fund balance to the CFO. Unassigned fund balance is the residual classification for the general fund. When the District incurs an expenditure for purposes for which various fund balance classifications can be used, it is the District's policy to use restricted fund balance first, then committed fund balance, assigned fund balance, and finally unassigned fund balance. 2. BUDGETARY INFORMATION The General Fund and special revenue funds are under formal budgetary control. Budgets shown in the financial statements are adopted annually on a basis consistent with generally accepted accounting principles (“GAAP”), and are not significantly different from the modified accrual basis used to reflect actual results, and consist only of those amounts contained in the formal budget as originally adopted or as amended by the Board of Education. The budgets for the General Fund and special revenue Funds are adopted on a functional activity basis. All annual appropriations lapse at fiscal year-end.
32
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 3. EXCESS OF EXPENDITURES OVER BUDGET Public Act 621 of 1978, as amended, provides that a local unit shall not incur expenditures that are in excess of the amount appropriated. During the year ended June 30, 2014, the District incurred expenditures in the General Fund, which were in excess of the amounts appropriated in various activities as follows: Actual Expenditure
Final Budget General fund: Instruction: Added needs Supporting services: Pupil services General administration Operation and maintenance of plant Other support services Athletics
$
2,370,210
$
2,456,155
Unfavorable Variance
$
85,945
837,944 489,930
843,876 509,518
5,932 19,588
2,094,740 158,557 424,953
2,137,941 170,005 425,085
43,201 11,448 132
3. DEPOSITS AND INVESTMENTS A reconciliation of cash and investments as shown on the Statement of Net Position and Statement of Fiduciary Assets and Liabilities follows: Statement of Net Position Cash and cash equivalents Investments
$
Statement of Fiduciary Assets and Liabilities Cash and cash equivalents
1,696,481 781,570 2,478,051
561,793
Total Deposits and investments Deposits Investments Cash on hand Total
$
3,039,844
$
2,256,843 781,570 1,431
$
3,039,844
The District chooses to disclose its investments by specifically identifying each. As of June 30, 2014, the District had the following investments. Investment Michigan Liquid Asset Fund
Maturity n/a
Fair Value $
33
781,570
Rating S & P AAAm
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Investment and Deposit Risk Interest Rate Risk. State law limits the allowable investments and the maturities of some of the allowable investments as identified in the list of authorized investments below. The District’s investment policy does not have specific limits in excess of state law on investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The District’s investments held at year-end do not have maturity dates. Credit Risk. State law limits investments to specific government securities, certificates of deposits and bank accounts with qualified financial institutions, commercial paper with specific maximum maturities and ratings when purchased, bankers acceptances of specific financial institutions, qualified mutual funds and qualified external investment pools as identified in the list of authorized investments below. The District’s investment policy does not have specific limits in excess of state law on investment credit risk. The ratings for each investment are identified above for investments held at year-end. Custodial Credit Risk [Deposits]. Custodial credit risk is the risk that in the event of a bank failure, the District’s deposits may not be returned. State law does not require and the District does not have a policy for deposit custodial credit risk. As of year-end $2,223,035 of the District’s bank balance of $2,473,035 was exposed to custodial credit risk because it was uninsured and uncollateralized. Custodial Credit Risk [Investments]. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. State law does not require and the District does not have a policy for investment custodial credit risk. On the investments listed above, there is no custodial credit risk, as these investments are uncategorized as to credit risk. Concentration of Credit Risk . State law limits allowable investments but does not limit concentration of credit risk as identified in the list of authorized investments below. The District’s investment policy does not have specific limits in excess of state law on concentration of credit risk. All investments held at yearend are reported above and are external investment pools. Michigan law authorizes the District to deposit and invest in: Bonds, bills, or notes of the United States; obligations, the principal and interest of which are fully guaranteed by the United States; or obligations of the State. In a primary or fourth class school district, the bonds, bills or notes shall be payable at the option of the holder upon not more than 90 days notice or, if not so payable, shall have maturity dates not more than five years after the purchase dates. Certificates of deposits issued by a State or national bank, savings accounts of a state or federal savings and loan association, or certificates of deposit or share certificates of a state or federal credit union organized and authorized to operate in this State. Commercial paper rated prime at the time of purchase and maturing not more than 270 days after the date of purchase. Securities issued or guaranteed by agencies or instrumentalities of the United States, United States government or federal agency obligation repurchase agreements, and bankers’ acceptance issued by a bank that is a member of the federal deposit insurance corporation.
34
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Mutual funds composed entirely of investment vehicles that are legal for direct investment by a school district. Investment pools, as authorized by the surplus funds investment pool act, composed entirely of instruments that are legal for direct investment by a school district. 4. RECEIVABLES The District's receivables at year-end consist of the following: General Fund
Nonmajor Funds
Total
Receivables Intergovernmental Accounts receivable
$
3,349,353 233,764
$
7,598 -
$
3,356,951 233,764
Total Receivables
$
3,583,117
$
7,598
$
3,590,715
5. CAPITAL ASSETS Capital asset activity for the year ended June 30, 2014, was as follows: Beginning Balance Governmental Activities Capital assets not being depreciated: Land $ Capital assets being depreciated: Buildings and improvements Vehicles Equipment and other
181,770
Disposals/ Transfers
Additions
$
-
$
Ending Balance
-
$
181,770
27,759,312 800,003 1,151,118
106,429 531,162 129,975
(103,842) -
27,865,741 1,227,323 1,281,093
29,710,433
767,566
(103,842)
30,374,157
Less accumulated depreciation for: Buildings and improvements Vehicles Equipment and other
11,569,742 638,261 442,933
938,167 86,885 104,491
(103,842) -
12,507,909 621,304 547,424
Total accumulated depreciation
12,650,936
1,129,543
(103,842)
13,676,637
Total capital assets being depreciated, net
17,059,497
Total capital assets being depreciated
Governmental activities capital assets, net
$
17,241,267
35
$
(361,977)
-
(361,977) $
-
16,697,520
$
16,879,290
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Depreciation expense was charged to functions / programs of the primary government as follows: Depreciation of governmental activities by function Supporting services - Transportation $ Food service Depreciation - Unallocated
12,443 86,885 1,030,215
Total depreciation expense
1,129,543
$
Bangor Township Schools is depreciating assets by taking cost less salvage value over the estimated useful life of each asset. Assets are depreciated when cost less salvage value is greater than accumulated depreciation. 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities as of June 30, 2014, for the District’s individual major funds and nonmajor funds in the aggregate, are as follows:
Fund financial statements Accounts payable Salaries payable Accrued liabilities
General Fund
Nonmajor Funds
$
248,486 1,157,644 515,030
$
2,087 14,262 4,627
$
1,921,160
$
20,976
Total $
250,573 1,171,906 519,657 1,942,136
District-wide financial statements Accrued interest on long-term debt
42,060
Total accounts payable and accrued liabilities
$
1,984,196
7. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS At June 30, 2014, interfund receivables and payables in the fund financial statements consisted of the following: Due from Other Funds General fund Nonmajor funds
Due to Other Funds
$
133,948
$
100,571 33,377
$
133,948
$
133,948
The District often reports interfund balances between many of its funds. These interfund balances resulted primarily from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made.
36
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements For the year then ended, interfund transfers consisted of the following: Transfers In General fund 2009 bond fund Nonmajor funds
Transfers Out
$
72,000 233,333 25,000
$
258,333 72,000
$
330,333
$
330,333
Transfers are used to: (1) move revenue from the fund that is required to collect them to the fund that is required or allowed to expend them; (2) move receipts restricted to or allowed for debt service from the funds collecting the receipts to the debt service fund as debt service payments become due; and (3) use unrestricted revenue collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. For the year ended June 30, 2014, the District transferred funds from the General Fund to the 2009 Bond Debt Service Fund for debt service payments and the Food Service Special Revenue Fund transferred funds to the General Fund to pay for indirect costs incurred in the General Fund. The District also transferred funds from the General Fund to the Public Improvement Capital Projects Fund. 8. OPERATING LEASES The District has various noncancelable operating leases for buses and copiers. Total costs for such leases were $78,663 for the year ended June 30, 2014. The future minimum lease payments for these leases are as follows: 2015 2016 2017 2018 2019 Total minimum lease payments
37
$
84,659 68,197 68,197 68,197 68,197
$
357,447
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 9. LONG-TERM DEBT The following is a summary of long-term debt transactions of the District for the year ended June 30, 2014: Beginning Balance General obligation bonds $ Thomas passenger bus installment notes Unamortized premium Unamortized discount Accrued retirement incentive Compensated absences
13,130,000
$
14,738,843
Additions $
144,043 (23,274) 22,072 1,466,002 $
Deductions -
$
620,000
484,543 -
77,593 20,576 (2,116)
271,418
20,893 96,963
755,961
$
833,909
Ending Balance $
12,510,000
Due Within One Year $
406,950 123,467 (21,158)
78,832 20,576 (2,116)
1,179 1,640,457 $
14,660,895
665,000
1,179 546,764 $
1,310,235
Bonds and notes payable at June 30, 2014, are comprised of the following individual issues: 2012 Refunding building and site bonds, $5,125,000, due in annual principal installments ranging from $600,000 to $865,000 through May 1, 2020; interest rate of 2.00% to 3.00%, net of premium.
$
4,525,000
2006 Refunding bonds due in annual principal installments ranging from $15,000 to $1,155,000 through May 1, 2024; interest ranging from 3.5% to 4.0%, net of discount.
4,485,000
2009 Building and site Qualified School Construction Bonds(“QSCB”). These bonds require a sinking fund to be established with transfers of $233,333 to an escrow agent annually on September 1st. These zero-coupon bonds are due in total on September 1, 2024.
3,500,000
Installment purchase, four 2014 Thomas 77-passenger school buses, $336,924, due in annual principal installments ranging from $26,870 to $29,316 through May 1, 2019; interest rate of 1.59%.
282,970
Installment purchase, two 2011 Thomas 77-passenger school buses and one Thomas 2014 30-passenger school bus, $147,619, due in annual principal installments ranging from $11,773 to $12,844 through May 1, 2019; interest rate of 1.59%.
123,980 $
12,916,950
Compensated absences and the accrued retirement incentive are generally liquidated by the general fund.
38
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Annual debt service requirements to maturity for general obligation bonds and installment purchase notes are as follows: Year Ended June 30,
Principal
Interest
2015 2016 2017 2018 2019 2020-2024 2025
$
743,832 790,091 831,370 877,669 923,988 5,250,000 3,500,000
$
245,888 235,413 224,263 212,538 200,138 630,382 -
Total
$
12,916,950
$
1,748,622
Defeased Debt The balance of the defeased debt outstanding at June 30, 2014, was $9,215,000. As a result, the refunded bonds are considered to be defeased and the liability has been removed from the district-wide statement of net position. Accrued Retirement Incentive In fiscal year ending June 30, 2010, a teacher that retired and did not reach age 62 within three months of his/her effective retirement date was entitled to a supplementary retirement benefit until he/she reaches age 62. The amount of the supplementary benefit is determined by multiplying the teacher’s final year salary by 1.03%. A liability for this retirement incentive has been recognized in the district-wide financial statements at present value, using a discount factor of 4.65%. Estimated final annual payment, including social security is $1,179 in fiscal 2015. 10. RISK MANAGEMENT The District is exposed to various risks of loss related to property loss, torts, errors and omissions, employee injuries (workers’ compensation) as well as medical benefits provided to employees. The District has purchased commercial insurance for general liability, property and casualty and health claims and participates in the MASB/SET-SEG (risk pool) for claims relating to employee injuries/workers’ compensation. Settled claims relating to the commercial insurance have not exceeded the amount of insurance coverage in any of the past three fiscal years. The shared-risk pool program in which the District participates operates as a common risk-sharing management program for school districts in Michigan; member premiums are used to purchase commercial excess insurance coverage and to pay member claims in excess of deductible amounts.
39
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 11. PROPERTY TAXES Property taxes are assessed as of December 31 each year and attach as an enforceable lien on property as of the following July 1. School property taxes are levied on July 1 each year, based on the previous year’s assessment, by Township governments whose boundaries include property within the District, and are due by September 15. Delinquent real taxes are advanced to the District by the Counties involved. Taxes are recorded as revenue in the year levied. Taxes receivable are recorded for property taxes collected within 60 days of year-end, if any. 12. DEFINED BENEFIT PENSION PLAN Plan Description The District contributes to the Michigan Public School Employees Retirement System (MPSERS), a collection of several retirement plans administered by the State of Michigan Department of Management and Budget, Office of Retirement Systems. MPSERS provides retirement, survivor and disability benefits to plan members and beneficiaries. Benefit provisions are established and may be amended by state statute. The Office of Retirement Systems issues a publicly available financial report that includes financial statements and required supplementary information for MPSERS. That report may be obtained by writing to Michigan Public School Employees' Retirement System, 7150 Harris Drive, P.O. Box 30026, Lansing, Michigan, 48909 or by calling (517) 322-5103. Funding Policy Defined Benefit Plans Member contribution rates vary based on date of hire and certain voluntary elections. Member Investment Plan (“MIP”) members enrolled in MIP prior to January 1, 1990 contribute at a permanently fixed rate of 3.9% of gross wages. Members first hired January 1, 1990 through June 30, 2008 contribute at the following graduated permanently fixed contribution rates: 3 percent of the first $5,000; 3.6 percent of $5,001 through $15,000; 4.3 percent of all wages over $15,000. Members first hired July 1, 2008 through June 30, 2010 contribute at the following graduated permanently fixed contribution rates: 3.0 percent of the first $5,000; 3.6 percent of $5,001 through $15,000; 6.4 percent of all wages over $15,000. Basic Plan members make no contributions. Basic 4% and MIP 7% members contribute 4 percent and 7 percent of pretax salary, respectively. Based on the option selected at enrollment, these individuals contribute at a fixed rate until termination of employment or until reaching 30 years of service. At that time, based on the option selected, employee contributions are no longer required or revert to the contribution requirements under the MIP plan in which the employee initially enrolled. The District is required to contribute the full actuarial funding contribution amount to fund pension benefits, plus an additional amount to fund retiree healthcare benefits on a cash disbursement basis. The rates for the year ended June 30, 2014 as a percentage of payroll ranged from 24.32 to 24.79 percent. In addition, the District is invoiced monthly an amount that approximates 4.56 percent of covered payroll for "MPSERS UAAL Stabilization." This additional contribution is offset by monthly State aid payments equal to the amounts actually billed by the Office of Retirement Services.
40
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Hybrid Plans Members hired between July 1, 2010 and September 3, 2012 are enrolled in the Pension Plus plan. Members hired on or after September 4, 2012 are automatically enrolled in this plan unless an election is made to participate in the defined contribution plan (described below). Participant contributions contain a pension component as well as a savings component. The pension component is based on the following pretax contribution rates: 3 percent of the first $5,000; 3.6 percent of $5,001 through $15,000; 6.4 percent of all wages over $15,000. For the savings component, participants contribute 2 percent of gross pay to a 457 plan. Member contributions for the savings component are matched at a rate of 50 percent by the employer, up to a maximum of one percent and invested in a 401(k) plan. Effective February 1, 2013, members that initially enrolled in the defined benefit plan were provided the option to convert to a defined contribution plan. In these instances, any service credit accumulated under the defined benefit plan before February 1, 2013 is retained. For service performed after this date, the converted plan member receives 4 percent employer contributions to a personal 401(k) account. Voluntary employee contributions are permitted in accordance with IRS guidelines. Employer contributions for the pension component of the plan vest at 10 years of service. Employer contributions for the savings component and earnings thereon vest based on the following schedule: 50 percent at 2 years of service, 75 percent at 3 years of service, and 100 percent at 4 years of service. Any voluntary contributions vest with the employee immediately. If a member participating in the hybrid plan retires with certain age and service requirements, he or she will receive a monthly pension based on compensation received before February 1, 2013. Defined Contribution Plan A member first enrolling in MPSERS on or after September 4, 2012 may elect to enroll in the defined contribution plan. Employer and employee contribution rates and vesting requirements are consistent with the defined contribution component of the hybrid plan as described above. Required Contributions The contribution requirements of plan members and the District are established by Michigan State statute and may be amended only by action of the State Legislature. The District’s contributions to MPSERS under all plans for the years ended June 30, 2014, 2013, and 2012 were $2,748,040, $2,907,159, and $2,649,463, respectively, equal to the required contributions for each year. Other Post Employment Benefits Retirees enrolled in MPSERS before September 4, 2012 have the option of participating in the Premium Subsidy plan, a defined benefit postemployment healthcare plan, which is funded by employers on a cash disbursement basis. The State of Michigan has contracted to provide the comprehensive group medical, hearing, dental and vision coverage for retirees and beneficiaries. All health care benefits are on a selffunded basis. A significant portion of the premium is paid by MPSERS with the balance deducted from the monthly pension. Plan participants contribute 3 percent of covered payroll to the Retiree Healthcare Fund. At retirement, these individuals receive a subsidy for healthcare premiums that cover up to 80 percent of cost.
41
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements Plan members enrolled on or after September 4, 2012 participate in the Personal Healthcare Fund. This defined contribution other postemployment benefits plan includes a required 2 percent employee contribution into a personal tax-deferred account, which is matched by an additional 2 percent employer contribution. Employees are fully vested in these contributions which can be used, along with earnings thereon, to pay for postemployment healthcare expenses. Plan members working prior to September 4, 2012 were given the option to convert from the Premium Subsidy plan to the Personal Healthcare Fund option. Effective February 1, 2013, these members are no longer required to make the 3 percent employee contribution. Amounts paid into the Retiree Healthcare Fund between September 4, 2012 and February 1, 2013 were credited to each individual’s Personal Healthcare Fund account. Any contributions made prior to September 4, 2012 are pending a Supreme Court resolution. The District’s contributions to MPSERS for other postemployment benefits are not separately identified and are included in the contribution amounts disclosed above. 13. ECONOMIC DEPENDENCY The District received approximately 82% of its General Fund revenue from the Michigan Department of Education. Due to the significance of this revenue source to the District, the District is considered to be economically dependent. 14. COMMITMENTS AND CONTINGENCIES Under the terms of various Federal and State grants and regulatory requirements, periodic audits are required and certain costs may be questioned as not being appropriate expenditures under the terms of the grants and requirements. Such audits could lead to reimbursement to the grantor or regulatory agencies. However, management does not believe such disallowances, if any, will be material to the financial position of the District. As is the case with other entities, the District faces exposure from potential claims and legal proceedings involving environmental matters. No such claims or proceedings have been asserted as of June 30, 2014. 15. SINKING FUND The Sinking Fund Capital Projects Fund (2010 Bond Debt Issue) records capital project activities with Sinking Funds used to purchase real estate sites for, and the construction or repair of school buildings. For this Fund, the District has complied with the applicable provisions of §1212(1) of the Michigan Revised School Code and the applicable section of the Revised Bulletin for School District Audits of Bonded Construction Funds and Sinking Funds in Michigan. During fiscal year 2014, there were no assets and liabilities or activity in this fund.
42
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 16. FUND BALANCE - GOVERNMENTAL FUNDS The District adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions . GASB 54 establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of resources reported in governmental funds. Detailed information on fund balances of governmental funds is as follows:
General
Nonspendable: Inventories Prepaid items Total nonspendable
$
11,737 11,737
2009 Bond Fund
Nonmajor Governmental Funds
$
$
-
22,218 22,218
Total
$
22,218 11,737 33,955
Restricted for: Food Service Community service Debt service Total restricted
-
933,332 933,332
309,263 101,368 120,410 531,041
309,263 101,368 1,053,742 1,464,373
Assigned for: Public improvement
-
-
32,680
32,680
2,621,392
-
-
2,621,392
Unassigned Totals fund balances governmental funds
$
2,633,129
43
$
933,332
$
585,939
$
4,152,400
BANGOR TOWNSHIP SCHOOLS Notes to Financial Statements 17. NET INVESTMENT IN CAPITAL ASSETS The composition of net investment in capital assets as of June 30, 2014, was as follows: Governmental Activities Capital assets: Not being depreciated Being depreciated, net
$
181,770 16,697,520 16,879,290
Less related debt: Bonds and notes payable Unamortized premium Unamortized discount
12,916,950 123,467 (21,158) 13,019,259
Net investment in capital assets
$
3,860,031
18. EFFECT OF UPCOMING CHANGES IN ACCOUNTING PRONOUNCEMENTS The Governmental Accounting Standards Board has issued GASB Statement No. 68, Accounting and Financial Reporting for Pensions, which will be effective for the District’s fiscal year ending June 30, 2015. This statement will require the recognition of a “net pension liability” on the statement of net position, equal to the unfunded portion of the District’s defined benefit pension plan, as defined and calculated in accordance with the new standard. While the exact amount of this liability is not readily determinable at this time, management estimates that it may approximate $30,097,000. GASB 68 will require the net pension liability to be recorded for the year ending June 30, 2015, by restating beginning net position as of July 1, 2014. 19. SUBSEQUENT EVENTS In September 2014, the District purchased and received two 2011 Thomas school buses for a total amount of $102,000.
44
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES
45
BANGOR TOWNSHIP SCHOOLS Combining Balance Sheet Nonmajor Governmental Funds June 30, 2014 Special Revenue Food Services Assets Cash and cash equivalents Due from other governments Due from other funds Inventories Total assets Liabilities Accounts payable Salaries payable Accrued liabilities Due to other funds Unearned revenue
Debt Service 2006 Bond Issue Debt Service Fund
Community Service
$
364,053 7,598 22,218
$
100 101,268 -
$
82,667 -
$
393,869
$
101,368
$
82,667
$
2,087 14,262 4,627 33,227 8,185
$
-
$
150 -
Total liabilities
62,388
-
150
Fund balances Nonspendable Restricted Assigned
22,218 309,263 -
101,368 -
82,517 -
Total fund balances
331,481
101,368
82,517
Total liabilities and fund balances
$
46
393,869
$
101,368
$
82,667
Debt Service 2012 Bond Issue Debt Service Fund
Capital Projects
Durant Debt Service
Public Improvement
Totals
$
37,893 -
$
-
$
32,680 -
$
484,713 7,598 133,948 22,218
$
37,893
$
-
$
32,680
$
648,477
$
-
$
-
$
-
$
2,087 14,262 4,627 33,377 8,185
$
-
-
-
62,538
37,893 -
-
32,680
22,218 531,041 32,680
37,893
-
32,680
585,939
37,893
$
-
$
32,680
$
648,477
47
BANGOR TOWNSHIP SCHOOLS Combining Statement of Revenue, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds For the year ended June 30, 2014 Special Revenue Food Services
Debt Service 2006 Bond Issue Debt Service Fund
Community Service
Revenue Local sources
$
State sources
336,152
$
156,806
$
199,302
42,903
-
-
707,724
-
-
1,086,779
156,806
199,302
1,017,591
-
-
Community service
-
123,185
-
Tax abatements
-
-
2,171
Principal repayment
-
-
20,000
Interest and fiscal charges
-
-
178,520
-
1,396
-
1,017,591
124,581
200,691
69,188
32,225
-
-
-
(72,000)
-
-
(72,000)
-
-
(2,812)
32,225
(1,389)
69,143
83,906
Federal sources Total revenue Expenditures Current: Food services
Debt service:
Capital outlay Total expenditures Revenue over (under) expenditures
(1,389)
Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balance, beginning of year
334,293
Fund balance, end of year
$
48
331,481
$
101,368
$
82,517
Capital Projects
Debt Service 2012 Bond Issue Debt Service Fund $
$
749,551
Durant Debt Service $
Public Improvement -
$
-
Totals $
1,441,811
-
-
-
42,903
-
-
-
707,724
749,551
-
-
2,192,438
-
-
-
1,017,591
-
-
-
123,185
8,167
-
-
10,338
600,000
-
-
620,000
153,850
-
-
332,370
-
-
-
1,396
762,017
-
-
2,104,880
(12,466)
-
-
87,558
-
-
25,000
25,000
-
-
-
(72,000)
-
-
25,000
(47,000)
(12,466)
-
25,000
40,558
50,359
-
7,680
545,381
37,893
$
-
$
32,680
$
585,939
49
BANGOR TOWNSHIP SCHOOLS Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - Food Service Special Revenue Fund For the year ended June 30, 2014
Original Budget Revenue Local sources: Food sales Other revenue Interest
$
State sources - restricted
305,000 2,000 400 307,400
Final Budget
$
338,000 6,000 400 344,400
Actual
$
329,275 6,494 383 336,152
Actual Over (Under) Final Budget
$
(8,725) 494 (17) (8,248)
42,615
42,615
42,903
647,000 73,000 720,000
647,000 73,000 720,000
637,773 69,951 707,724
(9,227) (3,049) (12,276)
1,070,015
1,107,015
1,086,779
(20,236)
321,593 161,407 32,908 491,746 12,118
299,474 165,827 35,540 534,975 12,118
295,984 156,124 35,835 519,828 9,820
(3,490) (9,703) 295 (15,147) (2,298)
1,019,772
1,047,934
1,017,591
(30,343)
50,243
59,081
69,188
10,107
Other financing (uses) Transfers out
(75,000)
(75,000)
(72,000)
3,000
Net change in fund balance
(24,757)
(15,919)
(2,812)
13,107
Fund balance, beginning of year
334,293
334,293
Federal sources: Grants Commodities
Total revenue Expenditures Salaries Employee benefits Purchased services Supplies and materials Other expenses Total expenditures Revenue over (under) expenditures
Fund balance, end of year
$
309,536
50
$
318,374
288
334,293 $
331,481
$
13,107
BANGOR TOWNSHIP SCHOOLS Schedule of Revenue, Expenditures and Changes in Fund Balances Budget and Actual - Community Service Special Revenue Fund For the year ended June 30, 2014
Original Budget Revenue Local sources: Participation fees
$
Expenditures Community services: Salaries Employee benefits Purchased services Supplies and materials Other expenses Capital outlay Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year
$
Final Budget
115,885
$
154,085
Actual
$
156,806
Actual Over (Under) Final Budget
$
2,721
65,277 28,389 600 10,800 8,295 -
65,238 32,113 300 20,980 6,495 2,420
67,880 31,833 160 18,182 5,130 1,396
2,642 (280) (140) (2,798) (1,365) (1,024)
113,361
127,546
124,581
(2,965)
2,524
26,539
32,225
5,686
69,143
69,143
69,143
-
71,667
$
51
95,682
$
101,368
$
5,686
SINGLE AUDIT ACT COMPLIANCE
52
Rehmann Robson 5800 Gratiot Rd. Suite 201 Saginaw, MI 48638 Ph: 989.799.9580 Fx: 989.799.0227 rehmann.com
INDEPENDENT AUDITORS' REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY OMB CIRCULAR A-133 October 3, 2014 To the Board of Education Bangor Township Schools Bay City, Michigan We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Bangor Township Schools (the "District") as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District's basic financial statements. We issued our report thereon dated October 3, 2014, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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BANGOR TOWNSHIP SCHOOLS Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2014
CFDA Number
Passed Through
Passthrough Grantor Number
10.553 10.553
MDE MDE
131970 141970
Cash assistance: National School Lunch Program: Section 11 Free & Reduced Section 11 Free & Reduced
10.555 10.555
MDE MDE
131960 141960
59,489 438,338
-
Non-cash assistance: Food Distribution: Entitlement commodities
10.555
MDE
N/A
78,136
-
Federal Agency / Cluster / Program Title U.S. Department of Agriculture Child Nutrition Cluster: Cash assistance: National School Breakfast: Breakfast Breakfast
Approved Award Amount
$
13,515 126,431
Accrued Revenue June 30, 2013
$
Total U.S. Department of Agriculture
U.S. Department of Education ESEA Title I Part A: Regular Regular
-
-
84.010 84.010
MDE MDE
131530-1213 141530-1314
465,926 395,013
183,173 183,173
Title II A - Improving Teacher Quality: Regular Regular
84.367A 84.367A
MDE MDE
130520-1213 140520-1314
136,691 135,206
94,472 94,472
McKinney Vento Homeless
84.196A
MDE & TISD
N/A
7,285
1,692
Total U.S. Department of Education
279,337
Total Federal Financial Assistance
$
See notes to schedule of expenditures of federal awards
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279,337
Current Year Cash/ In-Kind Received
$
$
13,515 126,431 139,946
Expenditures (Memo Only) Prior Year
Expenditures Year Ended June 30, 2014
Accrued (Deferred) Revenue June 30, 2014
$
$
$
-
13,515 126,431 139,946
-
59,489 438,338 497,827
-
59,489 438,338 497,827
78,136
-
69,951
(8,185)
715,909
-
707,724
(8,185)
183,173 218,015 401,188
413,173 413,173
394,901 394,901
176,886 176,886
94,472 86,599 181,071
114,472 114,472
131,429 131,429
44,830 44,830
1,692
7,285
-
-
583,951
534,930
526,330
221,716
1,299,860
$
534,930
$
1,234,054
-
$
213,531
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BANGOR TOWNSHIP SCHOOLS Notes to Schedule of Expenditures of Federal Awards 1. BASIS OF PRESENTATION The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal grant activity of Bangor Township Schools (the “District”) under programs of the federal government for the year ended June 30, 2014. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations . Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net position or cash flows of the District. 2. RECONCILIATION OF BASIC FINANCIAL STATEMENTS Expenditures reported on the Schedule are reported on the accrual basis of accounting, which is described in Note 1 to the District's financial statements. Such expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments , wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. Cash received is recorded on the cash basis; expenditures are recorded on the modified accrual basis of accounting. Revenue is recognized when the qualifying expenditures have been included and all grant requirements have been met. The Schedule has been arranged to provide information on both actual cash received and the revenue recognized. Accordingly, the effects of accruals of accounts receivable, deferred revenue and accounts payable items at both the beginning and end of the fiscal year have been reported. Expenditures are in agreement with amounts reported in the financial statements and the financial reports. The amounts on the Grant Auditor Report reconcile with this Schedule. The amounts reported on the Recipient Entitlement Balance (PAL) Report agree with this schedule for USDA donated food commodities. Spoilage and pilferage are included in expenditure amounts reported. 3. PASS-THROUGH AGENCIES The District receives certain federal grant as subawards from non-federal entities. Pass-through entities, where applicable, have been identified in the Schedule with an abbreviation, defined as follows: Pass-through Agency Abbreviation MDE TISD
Pass-through Agency Name
Michigan Department of Education Tuscola Intermediate School District
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Rehmann Robson 5800 Gratiot Rd. Suite 201 Saginaw, MI 48638 Ph: 989.799.9580 Fx: 989.799.0227 rehmann.com
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS October 3, 2014 Board of Education Bangor Township Schools Bay City, Michigan We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Bangor Township Schools (the "District"), as of and for the year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, and have issued our report thereon dated October 3, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
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Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
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Rehmann Robson 5800 Gratiot Rd. Suite 201 Saginaw, MI 48638 Ph: 989.799.9580 Fx: 989.799.0227 rehmann.com
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 October 3, 2014 Board of Education Bangor Township Schools Bay City, Michigan Report on Compliance for Each Major Federal Programs We have audited Bangor Township Schools' (the "District") compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on the District's major federal program for the year ended June 30, 2014. The District's major federal program is identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Independent Auditors' Responsibility Our responsibility is to express an opinion on compliance for each of the District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination on the District's compliance.
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Opinion on Each Major Federal Program In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2014. Report on Internal Control Over Compliance Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
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BANGOR TOWNSHIP SCHOOLS Schedule of Findings and Questioned Costs For the Year Ended June 30, 2014 SECTION I - SUMMARY OF AUDITORS’ RESULTS Financial Statements Type of auditors’ report issued:
Unmodified
Internal control over financial reporting: Material weakness(es) identified?
yes
X
no
Significant deficiency(ies) identified?
yes
X
none reported
yes
X
no
Material weakness(es) identified?
yes
X
no
Significant deficiency(ies) identified?
yes
X
none reported
X
no
Noncompliance material to financial statements noted? Federal Awards Internal control over major programs:
Type of auditors’ report issued on compliance for major programs:
Unmodified
Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section 510(a)?
yes
Identification of major programs: CFDA Number
Name of Federal Program or Cluster
10.553 and 10.555
Child Nutrition Cluster
Dollar threshold used to distinguish between Type A and Type B programs:
$
Auditee qualified as low-risk auditee?
300,000 X
SECTION II – FINANCIAL STATEMENT FINDINGS None. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None.
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yes
no
BANGOR TOWNSHIP SCHOOLS Summary Schedule of Prior Audit Findings
For the Year Ended June 30, 2014 None.
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