AUDIT REPORT of DUBOIS AREA SCHOOL DISTRICT. DuBois, Pennsylvania A.U.N For The Year Ended June 30, 2013

Transcription

1 AUDIT REPORT of DUBOIS AREA SCHOOL DISTRICT DuBois, Pennsylvania A.U.N For The Year Ended June 30,

2 TABLE OF CONTENTS Page Number Independent Auditor's Report 4 Management's Discussion and Analysis 6 Basic Financial Statements: Statement of Net Position 13 Statement of Activities 15 Balance Sheet - Governmental Funds 17 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 18 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Fund 19 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities 20 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 22 Statement of Net Position - Proprietary Fund 25 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Fund 26 Statement of Cash Flows - Proprietary Fund 27 Statement of Net Position - Fiduciary Funds 29 Statement of Changes in Net Position - Fiduciary Funds 30 Notes to Financial Statements 31 Required Supplementary Information 50 Supplemental Information: Summary Schedule of Prior Audit Findings

3 Page Number Schedule of Expenditures of Federal Awards 52 Notes to Schedule of Expenditures of Federal Awards 54 Independent Auditor s 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 56 Independent Auditor s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by OMB Circular A Schedule of Findings and Questioned Costs

4 INDEPENDENT AUDITOR'S REPORT Board of Directors DuBois Area School District 500 Liberty Boulevard DuBois, PA Members of the Board: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activity, each major fund, and the aggregate remaining fund information of DuBois Area School District, DuBois, PA as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the School 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. Auditor s 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 from 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 entity 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. 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, the business type activity, each major fund, and the aggregate remaining fund information of DuBois Area School District, DuBois, PA, as of June 30, 2013, and the respective changes in financial position, and, where applicable, cash flows thereof, and the respective budgetary comparison for the General Fund, for the year then ended in accordance with accounting principles generally accepted in the United States of America

5 As described in Note 1 to the financial statements, for the year ending June 30, 2013, the DuBois Area School District adopted new accounting guidance, GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis on pages 6 through 12 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 any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the DuBois Area School District, DuBois, PA s basic financial statements. The financial information listed as supplemental information in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The supplemental information and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the 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 financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental information and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 4, 2014, on our consideration of DuBois Area School District's internal control over financial reporting and on 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 DuBois Area School District's internal control over financial reporting and compliance. Mauthe, Yutzey, Gabler & Troxell, LLC Certified Public Accountants February 4,

6 MANAGEMENT S DISCUSSION AND ANALYSIS As management of the DuBois Area School District (School District), we offer readers of the School District s financial statements this narrative overview and analysis of the financial activities of the School District for the fiscal year ended June 30, This discussion and analysis should be read in conjunction with the School District s accompanying financial statements, which immediately follow this section. Financial Highlights - The assets of the School District exceeded its liabilities at the close of the most recent fiscal year by $42,602,364 (net position). Of this amount, $13,371,999 (unrestricted net position) may be used to meet the government s ongoing obligations to citizens and creditors. - The School District s total net position decreased by $2,128,512. The decrease is attributed to the district s expenditures exceeding revenues during the fiscal year. - As of the close of the current year, the School District s governmental funds reported a combined ending fund balance of $10,682,125 this represents a decrease of $5,715,128 in comparison with the prior year. The reason for the decrease is due to spending Capital Project Fund money for construction projects and the loss in the general fund during the year. - At the end of the current fiscal year, the total fund balance for the general fund was $8,856,515 or 17 percent of total budgeted general fund expenditures. - The General Fund Balance consists of the following: Overview of the Financial Statements Committed $ 93,740 Assigned $3,000,000 Unassigned $5,762,775 This discussion and analysis is intended to serve as an introduction to the School District s basic financial statements. The School District s basic financial statements comprise of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements (pages 13-16) are designed to provide readers with a broad overview of the School District s finances in a manner similar to a private-sector business. The statement of net position presents information on all of the School District s assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the School District is improving or deteriorating. - 6

7 The statement of activities presents information showing how the government s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused sick and vacation leave). Both of the government-wide financial statements distinguish functions of the School District that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the School District include all of the School Board s services including instruction, support service, maintenance, and transportation. The business-type activity of the School District consists of the food service program. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The School District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the School District can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statement, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government s near term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenue, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The School District maintains three governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, capital projects fund and the debt service funds. There are no funds considered as non-major funds for the current year. The School District adopts an annual budget for its general fund. A budgetary comparison statement is included in the District s financial statements to demonstrate compliance with this budget. - 7

8 The basic governmental fund financial statements can be found on pages Proprietary funds. The School District has one enterprise fund (a type of proprietary fund) to account for its food service. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The basic proprietary fund financial statements can be found on pages Fiduciary funds. The School District is the trustee, or fiduciary, for its student activity and scholarship funds. All of the School District s fiduciary activities are reported in separate financial statements on pages We exclude these activities from the government-wide financial statements because the School District can not use these assets to finance its operations. Notes to the financial statements. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages Government-wide Financial Analysis Governmental Business-Type Activities Activities Total Current and other assets $ 25,728,886 $ 20,486,851 $ 170,124 $ 199,019 $ 25,899,010 $ 20,685,870 Capital assets 54,415,106 54,287,684 53,683 35,758 54,468,789 54,323,442 Deferred Outflow s 170, ,678 Total Assets 80,143,992 74,945, , ,777 80,367,799 75,179,990 Long-term liabilities 28,854,538 25,480,665 17,123 17,752 28,871,661 25,498,417 Other liabilities 6,228,654 6,998, ,153 80,310 6,402,807 7,079,209 Total Liabilities 35,083,192 32,479, ,276 98,062 35,274,468 32,577,626 Net Position: Invested in capital assets, net of related debt 26,995,010 27,368,997 53,683 35,758 27,048,693 27,404,755 Restricted 4,042,291 1,825,610 4,042,291 1,825,610 Unrestricted 14,023,499 13,271,042 (21,152) 100,957 14,002,347 13,371,999 Total Net Position $ 45,060,800 $ 42,465,649 $ 32,531 $ 136,715 $ 45,093,331 $ 42,602,364-8

9 A portion of the School District s net position (65%) reflects its investment in capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets that is still outstanding. The School District uses these capital assets to provide services to the students; consequently, these assets are not available for future spending. Although the School District s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities. At the end of the current fiscal year, the School District is able to report positive balances in all three categories of net position for the government as a whole. Revenues: Program Revenues: Governmental Business-Type Activities Activities Total Charges for service $ 1,036,055 $ 1,018,200 $ 866,132 $ 823,378 $ 1,902,187 $ 1,841,578 Operating grants and contributions 10,272,285 10,639,954 1,124,445 1,184,810 11,396,730 11,824,764 Capital grants and contributions 968,811 1,253, ,811 1,253,438 General Revenues: Property taxes 17,831,056 18,006,803 17,831,056 18,006,803 Other taxes 4,994,315 5,027,847 4,994,315 5,027,847 Grants and subsidies 14,568,518 14,568,451 14,568,518 14,568,451 Interest income 108,119 38, ,493 38,484 Other 170, , , ,653, Transfers (67,018) (6,616) 67,018 6, Total Revenues 49,882,701 50,688,087 2,057,969 2,014,931 51,940,670 52,703,018 Expenses: Instruction 32,542,955 33,435,482 32,542,955 33,435,482 Student support 4,153,007 4,759,508 4,153,007 4,759,508 Administration 4,695,941 5,131,726 4,695,941 5,131,726 Operation of plant and maintenance 4,876,073 5,026,343 4,876,073 5,026,343 Student transportation 2,807,931 2,804,609 2,807,931 2,804,609 Student activity and community services 696, , , ,152 Interest on long-term debt 1,078, ,963 1,078, ,963 Food services 2,063,211 1,910,747 2,063,211 1,910,747 Total Expenses 50,850,625 52,920,783 2,063,211 1,910,747 52,913,836 54,831,530 Change in Net Position $ (967,924) $ (2,232,696) $ (5,242) $ 104,184 $ (973,166) $ (2,128,512) - 9 -

10 Governmental activities. Governmental activities decreased the School District s net position by $2,232,696. This accounted for most of the decrease in the net assets of the School District. Key elements of this decrease are attributed to expenditures being more than revenue for the year. The additional change in net position of $362,455 is an adjustment to the beginning net position and attributable to the adoption of GASB 65. Business-type activities. $104,184. Business-type activities increased the School District s net assets by Financial Analysis of the Governmental Funds As noted earlier, the School District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the School District s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the School District s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government s net resources available for spending at the end of the fiscal year. As of the end of the current year, the School District s governmental funds reported combined ending fund balances of $10,682,125, a decrease of $5,715,128 in comparison to the prior year. Of this total amount $5,762,775 constitutes unassigned fund balance, which is available for spending at the district s discretion. The remainder of the fund balance is either considered Restricted, Committed or Assigned to indicate that it is not available for new spending because it has already been committed to capital projects, future health care and retirement costs. The general fund is the chief operating fund of the School District. At the end of the current fiscal year, the unassigned fund balance of the general fund was $5,762,775. The fund balance of the School District s general fund decreased by $3,498,477 during the current fiscal year. The original budget passed by the school board for the fiscal year actually allowed for a decrease in the fund balance of $4,947,472, but as you can see the District did not use as much of the fund balance as was budgeted but it did use more than it has had to in awhile. Thus ending the fiscal year in a stronger position than what was initially projected. The capital project fund has a total fund balance of $1,825,610, all of which is restricted or assigned for capital projects. This has decreased by $2,216,681 due to the continuation of the Juniata Elementary School renovation project. Proprietary funds. The School District s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position of the Food Service Fund at the end of the year amounted to $100,957. The total increase in net position was $104,184. Other factors concerning this fund have already been addressed in the discussion of the School District s business-type activities

11 General Fund Budgetary Highlights Differences between the original and the final amended budget were relatively minor. Fluctuations between original budget and actual costs are as follows: - Actual local revenue collected failed to reach the budget amount by $482, Actual state revenue collected exceeded the budget amount by $1,309, Actual federal revenue collected exceeded the budget amount by $24, Actual regular instructional costs exceeded the budget by $227, Actual costs for support services were less than budget by $509,029. This includes a savings in the operation of facilities of $437, The General Fund did transfer monies to the Debt Service Fund in the amount of $3,677,448 and $6,616 to the cafeteria fund. Capital Asset and Debt Administration Capital assets. The School District s investment in capital assets for its governmental and business type activities as of June 30, 2013, amounts to $27,404,755 (net of related debt and accumulated depreciation). This investment in capital assets includes land, buildings and improvements and machinery and equipment. The Juniata Elementary renovation project was completed during the year. Cost of capital assets: Land and improvements $ 12,642,061 $12,642,061 $ $ $ 12,642,061 $ 12,642,061 Buildings and Governmental Business-Type Activities Activities Total improvements 64,085,081 73,401,395 64,085,081 73,401,395 Fixtures and equipment 3,147,479 3,147, , ,146 3,364,625 3,364,625 Construction in progress 7,097,335 7,097,335 0 Total $ 86,971,956 $ 89,190,935 $ 217,146 $ 217,146 $ 87,189,102 $ 89,408,081 Long-term debt. At the end of the current fiscal year, the School District had a total bonded debt outstanding of $27,405,000. All of the debt is backed by the full faith and credit of the government. No debt has been incurred by the food service fund. The District issued Series of 2010, general obligation bonds to finance the High School HVAC project as well as the Juniata Elementary School renovation project

12 Governmental Activities G.O. Bonds, Series of ,000 - G.O. Bonds, Series A of ,990,000 2,965,000 G.O. Bonds, Series B of ,030,000 4,990,000 G.O. Bonds, Series C of ,395,000 4,220,000 G.O. Bonds, Series of ,445,000 15,230,000 Total $ 30,125,000 $ 27,405,000 Additional information on the School District's long-term debt can be found in note 11 on pages Economic Factors and Next Year s Budgets and Rates - The District continues to receive less state funding than it has in previous years and this will have an adverse effect on the district s financial position. - The Board was not able to budget any funds from the general fund to be transferred to the capital account this year. - The Board reserved $200,000 of the fund balance for budgetary reserve. - The Juniata Elementary School renovation project is complete. Also the District will be looking into the future needs of some of its older buildings and equipment in the upcoming fiscal year. - The PSERS contribution rate continues to rise and is a major consideration for this year as well as future budgets. - Also the District is paying close attention to its expenditures during the fiscal year, and trying to minimize unnecessary spending. All of these factors were considered in preparing the School District s budget for the fiscal year. Requests for Information This financial report is designed to provide a general overview of the School District s finances for all those with an interest in the government s finances. Questions concerning any of the information provided in this report or request for additional financial information should be addressed to the DuBois Area School District, 500 Liberty Boulevard, DuBois, PA 15801, Attn: Jeanette Buriak, Business Manager

13 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF NET POSITION June 30, 2013 Governmental Business-Type Activities Activities Total ASSETS Cash and cash equivalents $ 9,052,889 $ 43,413 $ 9,096,302 Investments 2,870,390 2,870,390 Interest receivable Taxes receivable, Net 6,534,678 6,534,678 Intergovernmental receivables 1,922, ,811 2,068,880 Other receivables 106,327 4, ,423 Inventories 4,699 4,699 Capital assets Land and improvements, net of depreciation 7,699,167 7,699,167 Building and building improvements, net of depreciation 46,095,844 46,095,844 Fixtures and equipment, net of depreciation 492,673 35, ,431 Total Assets 74,774, ,777 75,009,312 Deferred Outflows of Resources 170, ,678 Total Assets and Deferred Outflows of Resources $ 74,945,213 $ 234,777 $ 75,179,990 The accompanying notes are an integral part of the financial statements

14 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF NET POSITION June 30, 2013 Page 2 Governmental Business-Type Activities Activities Total LIABILITIES Accounts payable $ 216,489 $ 149,326 $ 365,815 Internal balances 120,626 (120,626) Intergovernmental payable 169, ,644 Accrued salaries and benefits 3,324,893 43,550 3,368,443 Payroll deductions and withholdings 99,366 99,366 Accrued interest 137, ,232 Student lunch advances 8,060 8,060 Other current liabilities 16,320 16,320 Non-current liabilities: Current portion of long-term obligations 2,914,329 2,914,329 Compensated absences 1,295,585 17,752 1,313,337 Extended term financing agreement payable 158, ,001 Bonds payable 24,540,000 24,540,000 Other post employment benefits obligations (512,921) (512,921) Total Liabilities 32,479,564 98,062 32,577,626 Deferred Inflows of Resources NET POSITION Invested in Capital Assets, Net of Related Debt 27,368,997 35,758 27,404,755 Restricted for: Capital Projects 1,825,610 1,825,610 Unrestricted 13,271, ,957 13,371,999 Total Net Position 42,465, ,715 42,602,364 Total Liabilities, Deferred Inflows of Resources and Net Position $ 74,945,213 $ 234,777 $ 75,179,990 The accompanying notes are an integral part of the financial statements

15 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF ACTIVITIES For The Year Ended June 30, 2013 Net (Expense) Revenue and Program Revenues Changes in Net Position Operating Capital Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Governmental Activities: Instruction: Regular Instruction $ 22,084,282 $ 87,411 $ 3,248,449 $ $ (18,748,422) $ (18,748,422) Special Instruction 8,120, ,789 4,058,517 (3,130,865) (3,130,865) Vocational Instruction 2,471, ,034 (2,335,660) (2,335,660) Other Instructional Programs 719,299 45,322 (673,977) (673,977) Non Public School Programs 40,036 (40,036) (40,036) Total Instructional Services 33,435,482 1,018,200 7,352, ,034 (24,928,960) (24,928,960) Support Services: Pupil Personnel 1,432,518 81,475 (1,351,043) (1,351,043) Instructional Staff 2,492, ,590 (2,291,445) (2,291,445) Administration 3,472, ,018 (3,266,461) (3,266,461) Pupil Health 834, ,935 (703,020) (703,020) Business Services 857,661 49,379 (808,282) (808,282) Operation of Plant and Maintenance Services 5,026, ,095 (4,739,248) (4,739,248) Student Transportation Services 2,804,609 2,237,687 (566,922) (566,922) Central 743,478 44,462 (699,016) (699,016) Other Support Services 58,108 3,487 (54,621) (54,621) Total Support Services 17,722,186 3,242,128 (14,480,058) (14,480,058) Non-instructional Services: Student Activities 748,868 42,760 (706,108) (706,108) Community Services 46,284 2,778 (43,506) (43,506) Interest on Long-Term Debt 967,963 1,117, , ,441 Total Non-instructional Services 1,763,115 45,538 1,117,404 (600,173) (600,173) Total Government Activities 52,920,783 1,018,200 10,639,954 1,253,438 (40,009,191) (40,009,191) Business-Type Activities: Food Services 1,910, ,378 1,184,810 97,441 97,441 Total Primary Government $ 54,831,530 $ 1,841,578 $ 11,824,764 $ 1,253,438 $ (40,009,191) $ 97,441 $ (39,911,750) The accompanying notes are an integral part of the financial statements -15-

16 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF ACTIVITIES For The Year Ended June 30, 2013 Page 2 Net (Expense) Revenue and Program Revenues Changes in Net Position Operating Capital Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Total Primary Government (carried forward) $ 54,831,530 $ 1,841,578 $ 11,824,764 $ 1,253,438 $ (40,009,191) $ 97,441 $ (39,911,750) General Revenues: Taxes: Property taxes 18,006,803 18,006,803 Occupation Assessment and Per Capita Taxes 239, ,048 Earned Income Tax 2,952,994 2,952,994 Delinquent Taxes 1,435,639 1,435,639 Public Utility Realty, Deed Transfer and In Lieu of Taxes 400, ,166 Grants, Subsidies, and Contributions Not Restricted 14,568,451 14,568,451 Investment Earnings 38, ,484 Miscellaneous Income 141, ,653 Transfers (6,616) 6,616 Total General Revenues, Special Items, Extraordinary Items, and Transfers 37,776,495 6,743 37,783,238 Change in Net Position (2,232,696) 104,184 (2,128,512) Net Position - Beginning 45,060,800 32,531 45,093,331 Adjustment to beginning Net Position - Adoption of GASB 65 (362,455) (362,455) Net Position - Beginning, as Restated 44,698,345 32,531 44,730,876 Net Position - Ending $ 42,465,649 $ 136,715 $ 42,602,364 The accompanying notes are an integral part of the financial statements -16-

17 DUBOIS AREA SCHOOL DISTRICT BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2013 Total Capital Debt Service Governmental General Projects Funds Funds ASSETS Cash and Cash Equivalents $ 7,227,279 $ 1,825,610 $ $ 9,052,889 Investments 2,870,390 2,870,390 Interest Receivable Taxes Receivable, Net 677, ,290 Intergovernmental Receivables 1,922,069 1,922,069 Other Receivables, Net 106, ,327 Total Assets $ 12,803,853 $ 1,825,610 $ $ 14,629,463 LIABILITIES Accounts payable $ 216,489 $ $ $ 216,489 Due to Food Service Fund 120, ,626 Intergovernmental payables 169, ,644 Accrued salaries and benefits 3,324,893 3,324,893 Payroll deductions and withholdings 99,366 99,366 Other current liabilities 16,320 16,320 Total Liabilities 3,947, ,947,338 FUND BALANCES Restricted 486, ,313 Committed 93,740 93,740 Assigned 3,000,000 1,339,297 4,339,297 Unassigned 5,762,775 5,762,775 Total Fund Balances 8,856,515 1,825, ,682,125 Total Liabilities and Fund Balances $ 12,803,853 $ 1,825,610 $ $ 14,629,463 The accompanying notes are an integral part of the financial statements

18 DUBOIS AREA SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION June 30, 2013 Total Fund Balances - Governmental Funds $ 10,682,125 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 as assets in governmental funds. The cost of the assets is $89,190,935 and the accumulated depreciation is $34,903,251 54,287,684 Delinquent tax revenues are not considered available and measurable until collected and therefore are not reported as assets in governmental funds. 5,857,388 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year end consist of: Bonds Payable (27,405,000) Extended Term Financing Agreement (207,330) Deferred Charges 170,678 Accrued Interest on Bonds (137,232) Compensated Absences (1,295,585) Other Post Employment Benefits 512,921 (28,361,548) Total Net Position - Governmental Activities $ 42,465,649 The accompanying notes are an integral part of the financial statements

19 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For The Year Ended June 30, 2013 Total Capital Debt Service Governmental General Projects Funds Funds Revenues: Local Sources $ 22,647,934 $ 3,789 $ $ 22,651,723 State Sources 25,791,429 25,791,429 Federal Sources 1,833,739 1,833,739 Total Revenues 50,273,102 3, ,276,891 Expenditures: Instructional services 32,194,927 32,194,927 Support services 17,104,333 17,104,333 Non-instructional services 765, ,213 Capital Outlay 2,220,470 2,220,470 Debt Service 2,000 3,677,448 3,679,448 Refund of prior year revenue 21,012 21,012 Total Expenditures 50,087,485 2,220,470 3,677,448 55,985,403 Excess (Deficiency) of Revenues Over Expenditures 185,617 (2,216,681) (3,677,448) (5,708,512) Other Financing Sources (Uses): Transfers in 3,677,448 3,677,448 Operating transfers out (3,684,064) (3,684,064) Total Other Financing Sources (Uses) (3,684,064) - 0-3,677,448 (6,616) Net Change in Fund Balances (3,498,447) (2,216,681) (5,715,128) Fund Balances - Beginning 12,354,962 4,042, ,397,253 Fund Balances - Ending $ 8,856,515 $ 1,825,610 $ $ 10,682,125 The accompanying notes are an integral part of the financial statements

20 DUBOIS AREA SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES For The Year Ended June 30, 2013 Net Change in Fund Balances - Governmental Funds $ (5,715,128) 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 as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period: Capital Outlays 2,218,979 Less: Depreciation Expense (2,346,401) (127,422) Because some property and other taxes will not be collected for several months after the District's year end, they are not considered as "available" revenues in the governmental funds but are recognized as revenues in the Statement of Activities. This represents the net adjustment in the tax revenues for the current year. 417,813 Issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes current financial resources of governmental funds. However, neither transaction has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Repayment of note principal is an expenditure in the governmental funds but the repayment reduces long-term liabilities in the statement of net position. The effect of these transactions in the statement of activities is shown here: Extended Term Financing Purchase (207,330) Repayment of bond and note principal 2,720,000 Amortization of deferred bond issue costs 3,459 2,516,129 The accompanying notes are an integral part of the financial statements

21 DUBOIS AREA SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES For The Year Ended June 30, 2013 Page 2 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, interest expense is recognized as the interest accrues, regardless of when it is due. The interest accrued in the statement of activities under the amount paid in the governmental funds is shown here. 9,038 In the statement of activities, certain operating expenses-compensated absences (vacations and sick days) and other post employment benefits are measured by the amounts earned during the year. In the governmental funds; however, expenditures for these items are measured by the amount of financial resources used. This amount represents the difference between the amount earned versus the amount used. Compensated absences 263,819 Other post employment benefits 403, ,874 Change in Net Position of Governmental Activities $ (2,232,696) The accompanying notes are an integral part of the financial statements

22 DUBOIS AREA SCHOOL DISTRICT GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended June 30, 2013 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Revenues: Local Sources: Taxes: Current real estate tax $ 16,837,755 $ 16,837,755 $ 16,142,149 $ (695,606) Public utility realty tax 30,000 30,000 26,831 (3,169) Current per capita tax - Sec ,700 78,700 72,069 (6,631) Current per capita tax - Act ,700 78,700 72,069 (6,631) Current earned income tax 2,525,000 2,525,000 2,952, ,994 Local services tax 75,000 75,000 94,910 19,910 Real estate transfer tax 325, , ,072 (40,928) Payment in lieu of taxes 72,000 72,000 89,262 17,262 Delinquent taxes 1,412,000 1,412,000 1,017,827 (394,173) Total Taxes 21,434,155 21,434,155 20,752,183 (681,972) Other Local Sources: Interest income 125, ,000 34,568 (90,432) Athletics and other school activities 57,000 57,000 67,380 10,380 Revenue from I.U. - federal funds 550, , , ,478 Revenue from I.U. - state funds ,851 6,851 Regular and summer school tuition 17,000 17,000 87,412 70,412 Special education from other LEA's 850, , ,789 80,789 Rentals 15,200 15,200 20,872 5,672 Other local sources 82,000 82,000 53,401 (28,599) Total Other Local Sources 1,696,200 1,696,200 1,895, ,551 Total Local Sources 23,130,355 23,130,355 22,647,934 (482,421) State Sources: Basic instructional subsidy 14,568,343 14,568,343 14,568, Tuition - court placed/institutional children 60,000 60,000 60, Driver education 3,000 3,000 4,060 1,060 Special education of exceptional pupils 2,787,184 2,787,184 2,787, Transportation 1,734,427 1,734,427 2,069, ,938 Rental payments 1,000,000 1,000,000 1,253, ,438 Medical and nurse services 86,000 86,000 84,051 (1,949) Property tax reduction 1,864,654 1,864,654 1,864, The accompanying notes are an integral part of the financial statements

23 DUBOIS AREA SCHOOL DISTRICT GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended June 30, 2013 Page 2 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) PA accountability grant , ,658 Other state grants 100, , (100,000) Social security reimbursement 1,178,000 1,178,000 1,096,029 (81,971) Retirement reimbursement 1,100,000 1,100,000 1,740, ,352 Total State Sources 24,481,608 24,481,608 25,791,429 1,309,821 Federal Sources: Title I grants 1,263,689 1,263,689 1,265,315 1,626 ARRA - Edu Jobs ,728 16,728 Title II grants 245, , ,762 47,585 Rural and Low Income Schools ,294 83,294 Medical Assist (Access) 225, , ,000 (65,000) Medical Assist (Adm. Fees) 75,000 75,000 15,640 (59,360) Total Federal Sources 1,808,866 1,808,866 1,833,739 24,873 Total Revenues 49,420,829 49,420,829 50,273, ,273 Expenditures: Instruction: Regular programs 21,288,116 21,291,716 21,285,743 5,973 Special programs 7,507,350 7,507,350 7,813,372 (306,022) Vocational programs 2,422,000 2,422,000 2,362,417 59,583 Other instructional programs 698, , ,359 4,791 Nonpublic school programs 48,435 48,435 40,036 8,399 Total Instruction 31,964,051 31,967,651 32,194,927 (227,276) Support Services: Pupil personnel 1,477,900 1,477,900 1,369, ,809 Instructional staff 2,238,471 2,238,471 2,180,491 57,980 Administration 3,457,416 3,453,816 3,461,880 (8,064) Pupil health 845, , ,624 41,176 Business office 826, , ,762 (3,162) The accompanying notes are an integral part of the financial statements

24 DUBOIS AREA SCHOOL DISTRICT GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL For The Year Ended June 30, 2013 Page 3 Variance with Final Budget Original Final Positive Budget Budget Actual (Negative) Operation and maintenance of plant 5,261,900 5,261,900 4,824, ,607 Transportation 2,792,800 2,792,800 2,828,456 (35,656) Support services - Central 653, , ,133 (94,058) Other support services 63,000 63,000 58,603 4,397 Total Support Services 17,616,962 17,613,362 17,104, ,029 Noninstructional Services: Student activities 804, , ,535 86,116 Community services 52,637 52,637 46,678 5,959 Total Noninstructional Services 857, , ,213 92,075 Debt Service 5,000 5,000 2,000 3,000 Refund of prior year revenue ,012 (21,012) Total Expenditures 50,443,301 50,443,301 50,087, ,816 Excess (Deficiency) of Revenues Over Expenditures (1,022,472) (1,022,472) 185,617 1,208,089 Other Financing Sources (Uses): Sale of fixed assets 5,000 5, (5,000) Transfer out to debt service fund (3,680,000) (3,680,000) (3,677,448) 2,552 Transfer out to food service fund (50,000) (50,000) (6,616) 43,384 Budgetary reserve (200,000) (200,000) ,000 Total Other Financing Sources (Uses) (3,925,000) (3,925,000) (3,684,064) 240,936 Net Change in fund balance $ (4,947,472) $ (4,947,472) (3,498,447) $ 1,449,025 Fund balance - beginning of year 12,354,962 Fund balance - end of year $ 8,856,515 The accompanying notes are an integral part of the financial statements

25 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF NET POSITION PROPRIETARY FUND June 30, 2013 Enterprise Fund Food Service ASSETS Current Assets: Cash and Cash Equivalents $ 43,413 Subsidies Receivable 146,811 Due from General Fund 120,626 Other Receivables 4,096 Inventories 4,699 Total Current Assets 319,645 Noncurrent Assets: Machinery and Equipment, Net 35,758 Total Assets 355,403 Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources $ 355,403 LIABILITIES Current Liabilities: Accounts Payable $ 149,326 Accrued Salaries and Benefits 43,550 Student Lunch Advances 8,060 Total Current Liabilities 200,936 Noncurrent Liabilities: Long-Term Portion of Compensated Absence 17,752 Total Liabilities 218,688 Deferred Inflows of Resources NET POSITION Invested in Capital Assets 35,758 Unrestricted 100,957 Total Net Position 136,715 Total Liabilities, Deferred Inflows of Resources and Net Position $ 355,403 The accompanying notes are an integral part of the financial statements

26 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUND For The Year Ended June 30, 2013 Operating Revenues: Food service revenue $ 730,112 Special function sales 39,656 Miscellaneous sales 53,610 Total Operating Revenues 823,378 Operating Expenses: Salaries 580,299 Employee benefits 243,752 Donated commodities 88,090 Other supplies 8,847 Contracted services - Metz 958,388 Other purchased services 5,563 Depreciation 17,925 Other expenses 7,883 Total Operating Expenses 1,910,747 Operating Income (Loss) (1,087,369) Non-Operating Revenues: Local Sources - Earnings on Investments 127 State Sources 127,061 Federal Sources 1,057,749 Enterprise Fund Food Service Total Non-Operating Revenues 1,184,937 Income (Loss) before transfers 97,568 Transfer from General Fund 6,616 Changes in Net Position 104,184 Total Net Position - Beginning 32,531 Total Net Position - Ending $ 136,715 The accompanying notes are an integral part of the financial statements

27 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS PROPRIETARY FUND For The Year Ended June 30, 2013 Cash Flows From Operating Activities: Cash Received from Users $ 730,424 Cash Received from Other Operating Revenue 94,345 Cash Payments to Employees for Services (944,926) Cash Payments to Suppliers for Goods and Services (1,034,251) Cash Payments for Other Operating Expenses (7,883) Enterprise Fund Food Service Net Cash Provided (Used) By Operating Activities (1,162,291) Cash Flows From Non-Capital Financing Activities: State Sources 125,569 Federal Sources 1,023,369 Transfers in from General Fund 6,616 Net Cash Provided By Non-Capital Financing Activities 1,155,554 Cash Flows From Capital and Related Financing Activities: Cash Flows From Investing Activities: Earnings on Investments 127 Net Cash Provided by Investing Activities 127 Net Decrease in Cash and Cash Equivalents (6,610) Cash and Cash Equivalents - Beginning of Year 50,023 Cash and Cash Equivalents - End of Year $ 43,413 The accompanying notes are an integral part of the financial statements -27-

28 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF CASH FLOWS PROPRIETARY FUND For The Year Ended June 30, 2013 Page 2 Enterprise Fund Food Service Reconciliation of Operating Income to Net Cash Provided by (Used for) Operating Activities Operating Income (Loss) $ (1,087,369) Adjustments to Reconcile Operating Income (Loss) to Net cash Provided (Used) in Operating Activities: Depreciation 17,925 Change in Assets and Liabilities: (Increase) Decrease in Accounts Receivable 1,079 (Increase) Decrease in Inventories (711) Increase (Decrease) in Accounts Payable 147,975 Increase (Decrease) in Interfund Payables (248,014) Increase (Decrease) in Accrued Salaries and Benefits 5,884 Increase (Decrease) in Student Lunch Advance 312 Increase (Decrease) in Compensated Absences 628 Total Adjustments (74,922) Cash Provided (Used) by Operating Activities $ (1,162,291) The accompanying notes are an integral part of the financial statements

29 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF NET POSITION FIDUCIARY FUNDS June 30, 2013 Total Student Scholarship Fiduciary Activity Funds Funds ASSETS Cash and Cash Equivalents $ 119,498 $ 7,830 $ 127,328 Investments ,152 12,152 Total Assets 119,498 19, ,480 Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources $ 119,498 $ 19,982 $ 139,480 LIABILITIES Due to student groups $ 119,498 $ $ 119,498 Deferred Inflows of Resources NET POSITION Restricted for Scholarships ,982 19,982 Total Liabilities, Deferred Inflows of Resources and Net Position $ 119,498 $ 19,982 $ 139,480 The accompanying notes are an integral part of the financial statements

30 DUBOIS AREA SCHOOL DISTRICT STATEMENT OF CHANGES IN NET POSITION SCHOLARSHIP FUNDS (FIDUCIARY) For the Year Ended June 30, 2013 Additions: Gifts and contributions $ 2,650 Interest earnings 485 Total Additions 3,135 Deductions: Scholarships and other disbursements 5,050 Change in Net Position (1,915) Net Position - Beginning of Year 21,897 Net Position - End of Year $ 19,982 The accompanying notes are an integral part of the financial statements

31 DUBOIS AREA SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2013 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The DuBois Area School District (School District) is a second class school district located in Clearfield and Jefferson Counties, Pennsylvania. Administrative offices are at 500 Liberty Boulevard, DuBois, Pennsylvania. Fund Accounting The accounts of the School District are organized on the basis of funds, each of which is considered a separate accounting entity. The operation of each fund is accounted for with a separate set of selfbalancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. The funds of the School District are categorized into the following three fund types: Governmental Fund Types - These funds are used to account for most of the School District's finances. The focus is on determination of the financial position and changes in financial position (current financial resources) rather than on income determination. General Fund - The General Fund is the general operating fund of the School District and accounts for all revenues and expenditures of the School District not accounted for within other funds. Capital Projects Fund - The Capital Projects Fund is used to account for all resources for the acquisition of capital facilities by the District. Debt Service Funds - The Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long term debt principal, interest and related costs. Proprietary Fund Type - These fund types account for School District activities that are similar to business operations in the private sector or where the reporting focus is on determining net income, financial position and changes in financial position (economic resources measurement focus). Enterprise Fund (Food Service) - This fund is used to account for the School District s food service operations that are financed and operated in a manner similar to private business enterprises. The fund accounts for all revenues, food purchases, and costs and expenses for the Food Service Program. Fiduciary Fund Type - These funds are used to account for assets held by the School District in a trustee capacity or as an agent for other groups. The School District excludes these activities from their government-wide financial statements because it cannot use those assets to finance its operations. Agency Fund - This fund accounts for the receipts and disbursements of monies from student activity organizations. Other Fiduciary Funds - These funds account for resources to be used to provide scholarships to students of the DuBois Area School District