dallastown area school district financial report … · budget to actual 76 - 77 schedules of...

DALLASTOWN AREA SCHOOL DISTRICT

FINANCIAL REPORT

JUNE 30, 2013

CONTENTS

INDEPENDENT AUDITOR’S REPORT 1 - 3

Management’s Discussion and Analysis 4 - 32

Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position 33

Statement of Activities 34

Fund Financial Statements:

Balance Sheet - Governmental Funds 35

Reconciliation of the Governmental Funds Balance

Sheet to the Statement of Net Position 36

Statement of Revenues, Expenditures and Changes

in Fund Balances - Governmental Funds 37

Reconciliation of the Governmental Funds

Statement of Revenues, Expenditures and Changes

in Fund Balances to the Statement of Activities 38

Statement of Revenues, Expenditures and Changes in

Fund Balance - Budget and Actual -

General Fund 39

Statement of Net Position - Proprietary

Fund - Food Service 40

Statement of Revenues, Expenses and Changes in

Net Position - Proprietary Fund - Food Service 41

Statement of Cash Flows - Proprietary

Fund - Food Service 42

Statement of Fiduciary Assets and Liabilities 43

Notes to Financial Statements 44 - 74

CONTENTS (Continued)

REQUIRED SUPPLEMENTARY INFORMATION

Required Supplementary Information - Other

Post-Employment Benefit Plan

75

SUPPLEMENTARY INFORMATION

General Fund

Schedules of Revenues and Other Financing Sources -

Budget to Actual 76 - 77

Schedules of Expenditures and Other Financing Uses -

Budget to Actual 78 - 81

Statement of Changes in Assets and Liabilities -

Fiduciary Fund - Student Activities Agency Fund 82

Independent Auditor’s Report on Internal Control over

Financial Reporting and on Compliance and Other

Matters Based on an Audit of the Financial Statements

Performed in Accordance with Government Auditing

Standards 83 - 84

Independent Auditor’s Report on Compliance for Each

Major Federal Program and Report on Internal Control

Over Compliance as Required by OMB Circular A-133 85 - 86

Schedule of Findings and Questioned Costs 87 - 88

Schedule of Expenditures of Federal Awards 89 - 92

Notes to Schedule of Expenditures of Federal Awards 93

Summary Schedule of Prior Year’s Audit Findings 94

INDEPENDENT AUDITOR'S REPORT

Board of School Directors

Dallastown Area School District

Dallastown, Pennsylvania

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type

activities, each major fund, and the aggregate remaining fund information of the Dallastown Area School

District, as of and for the year ended June 30, 2013, 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.

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 the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinions.

2

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 activities, each major fund,

and the aggregate remaining fund information of the Dallastown Area School District, as of June 30,

2013, and the respective changes in financial position and, where applicable, cash flows thereof for the

year then ended in accordance with accounting principles generally accepted in the United States of

America.

Emphasis of Matter

As described in Note 1, Dallastown Area School District has implemented a reporting model to account

for deferred inflows of resources, deferred outflows of resources, and net position as required by the

provisions of the Governmental Accounting Standards Board (“GASB”) Statement 63, Financial

Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and

GASB 65, Items Previously Recognized as Assets and Liabilities, as of July 1, 2012. Our opinions on

these statements are not modified with respect to this matter.

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 4 through 32 and the required supplementary information as 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 any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively

comprise the Dallastown Area School District’s basic financial statements. The Schedules of Revenues

and Other Financing Sources - Budget to Actual, Schedules of Expenditures and Other Financing Uses

Budget to Actual, and the Statement of Changes in Assets and Liabilities - Fiduciary Fund - Student

Activities Agency Fund, listed in the table of contents as Supplementary Information are presented for

purposes of additional analysis and are not required parts of the basic financial statements. The

accompanying Schedule of Expenditures of Federal Awards, as required by the U.S. Office of

Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit

Organizations, is presented for purposes of additional analysis and is not a required part of the basic

financial statements.

3

Such supplementary 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.

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.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated November 12,

2013 on our consideration of the Dallastown 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 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 Dallastown Area

School District’s internal control over financial reporting and compliance.

Camp Hill, Pennsylvania

November 12, 2013


MANAGEMENT’S DISCUSSION AND ANALYSIS

JUNE 30, 2013

4

The Dallastown Area School District’s discussion and analysis provides an overview of the District’s

financial performance for fiscal years ended on June 30, 2012 and June 30, 2013. The intent of the

Management Discussion and Analysis (MDA) is to look at the District’s financial performance as a

whole. Please read it in conjunction with the District’s financial statements and notes to the financial

statements, which immediately follow this section.

The MDA is a component of the new reporting model prescribed by the Governmental Accounting

Standards Board (GASB) Statement No. 34 - Basic Financial Statements - and Management’s Discussion

and Analysis - for State and Local Governments issued in June 1999.

The Dallastown Area School District adopted GASB Statement No. 34 for fiscal year ended 2003 and

GASB Statement No. 54 - Fund Balance Reporting and Governmental Fund Type Definitions for fiscal

year ended 2011.

The Dallastown Area School District also adopted 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 for fiscal year ended 2013.

FINANCIAL HIGHLIGHTS

For fiscal year ended 2013, the Board of School Directors adopted a balanced General Fund budget with

the utilization of $1.045 million of fund balance. The millage rate remained the same for 2013 as it was

for 2011 and 2012, which is 22.26. The actual results of operation showed that actual expenditures were

approximately 2% less than budget and that actual revenues were approximately 1% less than budget.

At June 30, 2013, the Governmental Activities total net position was $52.162 million of which $10.356

million was unrestricted and available to meet the District’s ongoing obligations to employees and

creditors. This amount indicates that the District has a strong financial condition.

The Governmental Activities total net position increased $1.075 million from $51.087 million in 2012 to

$52.162 million in 2013. Refer to the section Financial Analysis of the District as a Whole for

explanations regarding the net position increase.

At June 30, 2013, the total fund balance for the General Fund was $13.017 million. Of the $13.017

million, $41 thousand was allocated as nonspendable due to it representing the amount of prepaid

expenses on the balance sheet. The prepaid expenses are comprised of dental health-insurance premiums

paid in advance.

Total funds in the amount of $4.642 million were committed as health insurance and PSERS reserves and

$63 thousand was committed for various high school projects. $893 thousand was assigned for 2013-

2014 budget utilization to assist in eliminating the need for a millage increase and $49 thousand was

assigned for athletic fund activities. The remaining $7.329 million is unassigned and represents 8% of the

General Fund budget for the year ended 2014.



JUNE 30, 2013

5

USING THE ANNUAL FINANCIAL REPORT

This annual report consists of three parts - management’s discussion and analysis, the basic financial

statements, and the required supplementary information. The basic financial statements include two kinds

of statements that present different perspectives of the District:

The first two basic financial statements are government-wide financial statements that provide both short-

term and long-term information about the District’s overall financial status.

The remaining basic financial statements are fund financial statements that focus on individual parts of the

District, reporting the District’s operations in more detail than the government-wide statements. The

governmental statements tell how general services were financed in the short term as well as what remains

for future spending. Proprietary-fund statements offer short-term and long-term financial information

about the activities that the District operates like a business. For Dallastown, this is the Food Service

Fund. Fiduciary fund statements provide information about financial relationships where the District acts

solely as the trustee or agent for the benefit of others such as the Middle School and High School Student

Activities Funds.

The financial statements also include notes that explain certain data in the statements and provide more

comprehensive information.

Figure A-1 shows how the required parts of the Financial Section are arranged and relate to one another:

Figure A-1

Required Compenents of Dallastown Area School District's Financial Report

Governmental-Wide

Financial

Statements

Fund

Financial

Statements

Notes to

Financial

Statements

Management's

Discussion and

Analysis

Basic

Financial

Statements

Required

Supplementary

Information



JUNE 30, 2013

6

Figure A-2 summarizes the major features of the District’s financial statements. The remainder of this

overview section of the management’s discussion and analysis highlights the structure and contents of

each statement.

Figure A-2

Major Features of

Dallastown Area School District’s

Government-wide and Fund Financial Statements

Government-wide Statements

Fund Financial Statements Governmental Funds Proprietary Funds Fiduciary Funds

Scope Entire District (except fiduciary funds)

Activities of the District that are not proprietary or fiduciary, such as general operating and capital projects.

Activities the District operates similar to private businesses, such as food service.

Instances in which the District is the trustee or agent to someone else's resources - Student Activity Funds.

Required Financial Statements

• Statement of net position • Statement of activities

• Balance sheet • Statement of revenues, expenditures, and changes in fund balances

• Statement of net position • Statement of revenues, expenditures, and changes in net position • Statement of cash flows

• Statement of fiduciary net position • Statement of changes in fiduciary net position

Accounting Basis & Measurement Focus

Accrual accounting and economic resources focus.

Modified accrual accounting and current financial focus.



Types of assets/liability information

All assets and liabilities, both financial and capital, and short-term and long-term.

Generally assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets or long-term liabilities included.

All assets and liabilities, both financial and capital, and short-term and long-term.

All assets and liabilities, both short-term and long-term.

Types of inflow/outflow information

All revenues and expenses during year, regardless of when cash is received or paid.

Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter.





JUNE 30, 2013

7

OVERVIEW OF THE FINANCIAL STATEMENTS

Government-Wide Statements

The Government-wide statements report information about the District as a whole using accounting

methods similar to those used by private-sector companies. The Statement of Net Position includes all of

the District’s assets, deferred outflows and inflows, and liabilities, with the difference reported as net

position, portions of which are restricted in accordance with other commitments. Net position is

considered one way to measure the District’s financial health. The Statement of Activities accounts for

all of the current year’s revenues and expenses, regardless of when cash is received or paid.

Over time, increases or decreases in the District’s net position are indicators of whether the District’s

financial position is improving or deteriorating, respectively.

To assess the overall financial condition of the District, non-financial factors, such as changes in the

District’s property tax base and conditions of school buildings and other facilities, should be

considered.

In the government-wide financial statements, the District’s activities are divided into two categories:

Governmental activities: Most of the District’s basic services; such as regular, special and adult

education, transportation, administration, and community services; are included here. Property taxes

and state subsidies finance most of the activities that occur in the General Fund.

Business-type activities: The District charges fees to help it cover the costs of the District’s food-

service program.



JUNE 30, 2013

8

Fund Financial Statements

The fund financial statements provide more detailed information about the District’s funds, not the

District as a whole. Funds are accounting devices the District uses to keep track of specific sources of

funding and spending on particular programs.

Some funds are required by state law and by bond covenants. The District established other funds to

control and manage money for particular purposes (like repaying its long-term debt) or to show that it is

properly using certain revenues (like Federal grants).

The District has three types of funds:

Governmental funds: Most of the District’s basic services are included in governmental funds, which

generally focus on (1) how cash and other financial assets can be readily converted to cash flow in and

out and (2) the balances left at year-end which are available for spending. Consequently, the

governmental-funds statements provide a detailed, short-term view that helps the reader determine

whether there are more or fewer financial resources that can be spent in the near future to finance the

District’s programs. Because this information does not encompass the additional long-term focus of

the government-wide statements, we provide reconciliations of the governmental funds and

government-wide statements that explain the relationships (or differences) between them.

Proprietary funds: These funds are used to account for the District’s activities that are similar to

business operations in the private sector. When the District charges fees for services provided to

customers, the services are usually reported in proprietary funds. The Food Service Fund is the

District’s proprietary fund and is the same as the business-type activities reported in the government-

wide statements.

Fiduciary funds: The District is the trustee, or fiduciary, for assets that belong to others, such as the

Student Activities Agency Funds. The District is responsible for ensuring that those to whom the

assets belong use them only for their intended purposes. The District excludes these activities from the

government-wide financial statements because they cannot use these assets to finance its operations.



JUNE 30, 2013

9

FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE

The District’s total net position was $52.189 million at fiscal year ended 2013, which includes $52.162

million in Governmental Activities and $27 thousand in Business-Type Activities, an increase of $1.047

million or 2% over fiscal year ended 2012.

Figure A-3

Fiscal Years Ended June 30, 2013 and June 30, 2012

Net Position

6/30/2013 6/30/2012 6/30/2013 6/30/2012 6/30/2013 6/30/2012

Total assets 146,815,755$ 151,679,742$ 272,098$ 543,573$ 147,087,853$ 152,223,315$

Total deferred outflows of

resources 111,365$ $ - -$ -$ 111,365$ -$

Total liabilities 94,764,989$ 100,592,459$ 245,390$ 489,421$ 95,010,379$ 101,081,880$

Net investment in capital assets 40,588,455$ 40,579,133$ 235,870$ 280,224$ 40,824,325$ 40,859,357$

Restricted 1,217,782 1,104,467 - - 1,217,782 1,104,467

Unrestricted 10,355,894 9,403,683 (209,162) (226,072) 10,146,732 9,177,611 Total net position 52,162,131$ 51,087,283$ 26,708$ 54,152$ 52,188,839$ 51,141,435$

Governmental Activities Business-Type Activities Total Schol District

During fiscal year ended 2013, total assets decreased 3% or $5.135 million over fiscal year ended 2012. The

majority of the decrease in assets is reflected in a 3% reduction of the value of the capital assets. During

fiscal year ended 2013, approximately $1.038 million in technology assets were removed from inventory due

to obsolescence. This, coupled with adding $5.134 million in depreciation expense but only adding $1.114

million additional in capital assets lead to the overall decrease.

The three largest current assets are cash and investments representing 14% of the total assets, property taxes

receivable which is 1% and state subsidy receivable which is slightly less than 1%.

Capital assets, which consist of the District’s land, buildings, building improvements, furniture and

equipment, and construction-in-progress, represent 84% of the total assets in fiscal years ended 2013 and

2012.

Deferred Outflows of Resources was added for fiscal year ended 2013 due to the implementation of GASB

Statement No. 63 and GASB Statement No. 65. The Deferred Outflows of Resources represents deferred

amounts on refunding debt.

On the other side of the balance sheet, liabilities decreased 6% over fiscal year ended 2012.

The decrease in liabilities is primarily due to $5.735 million in debt service principal payments made on the

general obligation bonds and notes, as well as, a 29% decrease in the pay-fixed, interest-rate swap liability

offset by a 105% increase in the other post-employment benefits (OPEB) obligation.

Refer to Footnote 8 for details regarding the principal payments made on the bonds and notes during fiscal

year ended 2013.

The results of this year’s operations as a whole are reported in the Statement of Activities. All expenses are

reported in the first column. Specific charges, grants, revenues and subsidies that directly relate to specific

expense categories are presented to determine the final amounts of the District’s activities that are supported

by other general revenues. The two largest general revenues are the local taxes assessed to community

taxpayers and the basic education subsidy provided by the State of Pennsylvania.



JUNE 30, 2013

10

Figure A-4 takes the information from that statement and rearranges it slightly in an effort to show the reader the

District’s total revenues and expenses for the year.

Figure A-4


Changes in Net Position

6/30/2013 6/30/2012 6/30/2013 6/30/2012 6/30/2013 6/30/2012

Revenues

Program revenues

Charges for services 359,494$ 355,575$ 1,549,957$ 1,663,058$ 1,909,451$ 2,018,633$

Operating grants and contributions 11,075,266 10,101,620 1,092,514 934,390 12,167,780 11,036,010

General revenues

Property taxes 61,242,397 60,848,750 - - 61,242,397 60,848,750

Other taxes 5,882,759 5,832,754 - - 5,882,759 5,832,754

Grants, subsidies and contributions

not restricted 9,268,267 9,264,089 - - 9,268,267 9,264,089

Investment earnings 102,783 203,583 256 181 103,039 203,764

Transfers (39,773) (162,648) 39,773 162,648 - -

Miscellaneous income 233,688 206,256 (399) - 233,289 206,256

Total revenues 88,124,881 86,649,979 2,682,101 2,760,277 90,806,982 89,410,256

Expenses

Instruction 60,420,941 58,420,619 - - 60,420,941 58,420,619

Instructional student support 6,254,902 6,032,681 - - 6,254,902 6,032,681

Administrative and financial support 7,218,314 6,848,520 - - 7,218,314 6,848,520

Operation and maintenance of plant 6,273,616 6,432,257 - - 6,273,616 6,432,257

Pupil transportation 3,959,551 3,782,620 - - 3,959,551 3,782,620

Student activities 1,686,768 1,677,635 - - 1,686,768 1,677,635

Community services 91,468 87,496 - - 91,468 87,496

Interest on long-term debt 816,534 2,115,132 - - 816,534 2,115,132

Food service - - 2,709,545 2,749,087 2,709,545 2,749,087

Total expenses 86,722,094 85,396,960 2,709,545 2,749,087 89,431,639 88,146,047

Increase (decrease) in net position 1,402,787 1,253,019 (27,444) 11,190 1,375,343 1,264,209

Net position - beginning 51,087,283 49,834,264 54,152 42,962 51,141,435 49,877,226

Prior period adjustment (327,939) - - - (327,939) -

Net position - beginning as restated 50,759,344 49,834,264 54,152 42,962 50,813,496 49,877,226

Net position - ending 52,162,131$ 51,087,283$ 26,708$ 54,152$ 52,188,839$ 51,141,435$

Governmental Activities Business-Type Activities District Total



JUNE 30, 2013

11

The majority of the $1.475 million or 2% increase in governmental revenues from fiscal year ended 2012

to fiscal year ended 2013 was due to a 10% increase or $974 thousand in operating grants and

contributions as well as an increase of $394 thousand in property taxes.

The $1.475 million or 2% increase was primarily driven by the following:

An increase of $772 thousand or 1% in regular and interim taxes offset by a decrease of $378

thousand or 24% in delinquent tax collections and deferrals. The increase in regular and interim

taxes is due to a small increase in the collectible tax base and a new Wellspan property. The

decrease in delinquent tax collections and deferrals is due to more timely payments of taxes.

An increase of $739 thousand in the state share of retirement contributions which is due to the

43% increase in the rate. The rates for fiscal years ended 2013 and 2012, were 12.36% and

8.65%, respectively.

An increase of $207 thousand in rental and sinking-fund reimbursements due to timings of

approvals for reimbursement.

The majority of the $1.325 million or 2% increase in governmental expenses from fiscal year ended 2012

to 2013 can be attributed to an increase of $2 million in instruction, $222 thousand in instructional student

support and $370 thousand in administration and financial services offset by a decrease of $1.299 million

in interest on long-term debt.



JUNE 30, 2013

12

Figure A-5 below presents the expenses of both the Governmental Activities and the Business-type

Activities of the District. Figure A-5 shows the District’s eight largest functions - instruction,

instructional student support, administrative and financial support, operation and maintenance of plant,

pupil transportation, student activities, community services and interest on long-term debt as well as each

program’s net cost (total cost less revenues generated by the activities). This table also shows the net

costs offset by the other unrestricted grants, subsidies and contributions to show the remaining financial

needs supported by local taxes and other miscellaneous revenues.

Figure A-5


Governmental Activities

Total Cost of

Services

Net Cost of

Services

Total Cost of

Services

Net Cost of

Services

Functions/Programs

Instruction 60,420,941$ 52,476,073$ 58,420,619$ 52,177,954$

Instructional student support 6,254,902 5,657,332 6,032,681 4,430,487

Administrative and financial support 7,218,314 6,870,946 6,848,520 6,573,321

Operation and maintenance of plant 6,273,616 6,019,268 6,432,257 6,213,582

Pupil transportation 3,959,551 2,745,819 3,782,620 2,594,656

Student activities 1,686,768 1,522,212 1,677,635 1,449,799

Community services 91,468 37,228 87,496 36,117

Interest on long-term debt 816,534 (41,544) 2,115,132 1,463,849

Total Governmental Activities 86,722,094$ 75,287,334$ 85,396,960$ 74,939,765$

Less:

Unrestricted grants, subsidies 9,268,267 9,264,089

Total Needs from Local

Taxes and Other Revenues 66,019,067$ 65,675,676$

2013 2012



JUNE 30, 2013

13

Figure A-6 reflects the activities of the Food Service Fund, the only business-type activity of the District.

Figure A-6


Business-Type Activities

Total Cost of

Services

Net Cost of

Services

Total Cost of

Services

Net Cost of

Services

Functions/Programs

Food Service 2,709,545$ (67,074)$ 2,749,087$ (151,639)$

Less:

Investment Earnings, Transfers,

and Miscellaneous Income 39,630 162,829

Total Business Type Activities (27,444)$ 11,190$

2013 2012

Revenues of the District’s business-type activities (food and nutrition services) were comprised of

charges for services, Federal and state reimbursements and investment earnings.

Business-type expenses exceeded revenues by $27 thousand in fiscal year ended 2013 and for 2012

business-type revenues exceeded expenses by $11 thousand. During fiscal year ended 2013, operating

expenses decreased $40 thousand or 1% over 2012, and revenues decreased $78 thousand or 3% over

2012. The student-lunch prices increased 10 cents, and the adult-lunch prices increased 15 cents for fiscal

year ended 2013 with no increase in the cost of school-breakfast prices.

The drop in revenue is primarily due to a $125 thousand or 14% decrease in National School Lunch

Program (NSLP) sales and a $123 thousand or 76% decrease in transfers from the General Fund for

unemployment-compensation reimbursement. The unemployment-compensation costs were due to the

outsourcing of the food-service program which started with fiscal year ended 2012.

The reductions in revenue were offset by a $124 thousand increase in Federal subsidies received for the

National School Lunch and Breakfast Programs, as well as an increase of $48 thousand in donated-

commodities usage.

Revenue for charges for services was $1.550 million and $1.663 million in fiscal years ended 2013 and

2012, respectively. This revenue is the amount paid by students and District personnel for daily food

service, including breakfast, lunch, beverages, a la carte purchases and catering services. Charges

represent 58% and 60% of total revenue, respectively.



JUNE 30, 2013

14

Federal reimbursement for meals, including payment for free and reduced lunches, was $875 thousand

and $751 thousand for the fiscal years ended 2013 and 2012, respectively. 2013 and 2012 state

reimbursements for meals, including payment for free and reduced lunches, were $85 thousand and $99

thousand, respectively. Federal reimbursements for meals increased $124 thousand over fiscal year 2012

while state reimbursements decreased $14 thousand.

The 16% increase in Federal subsidy reimbursement is due to the following factors:

9-cent increase in reimbursement for free and reduced lunches

1-cent increase in reimbursement for paid lunches

An additional 6 cents per meal for the Federal Meal Pattern Incentive Reimbursement Rate

Program starting in October 2013

4-cent increase in reimbursement for free and reduced breakfasts

The decrease in state reimbursement is tied directly to the decrease in the number of meals served. Refer

to the paragraph below for the information regarding the number of meals served.

During fiscal year ended 2013, the District served 564,864 National School Lunch Program (NSLP)

meals, which is a 9% decrease over the 620,376 NSLP meals served during fiscal year ended 2012. Of

the meals served in 2013, 32% were free meals, 6% were at reduced prices and 62% were paid at full

price.

The District also served 142,795 National School Breakfast Program (NSBP) meals, which is a 10%

increase from the 129,901 NSBP meals served during 2012. Of the meals served in 2013, 57% were free

meals, 7% were at reduced prices and 36% were paid at full price.

The decrease of $40 thousand in operating expenses is primarily due to a drop of $123 thousand in

unemployment-compensation expense which is directly related to a reduction in the District’s

unemployment liability. This decrease was offset by an increase in donated commodities usage of $48

thousand, as well as, an increase of $48 thousand in the cost of custodial services charged-back from the

General Fund. During the first year of outsourcing, the District received a credit of $50 thousand towards

custodial services.



JUNE 30, 2013

15

FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS

Governmental Funds

The focus of the District’s governmental funds is to provide information on relatively short-term cash

flow and future basic services. Such information is useful in assessing the Dallastown Area School

District’s financing requirements. In particular, fund balance may serve as a useful measure of a

government’s net resources available for spending at the end of the year.

As of June 30, 2013, the District’s governmental funds reported a combined fund balance of $15.603

million, which is a decrease of $422 thousand over fiscal year ended 2012. Refer to Figure A-7 for a

breakdown of governmental fund balances and the total change from fiscal year ended 2012 to 2013.

The majority of the overall, total fund balance increase lies in the increases of the committed and

restricted categories offset by the large decrease in assigned.

Figure A-7


Fund Balances

2013 2012 $ Change % Change

General Fund:

Nonspendable 40,811 $ 673,760 $ (632,949) $ -94%

Committed 4,705,075 4,380,684 324,391 7%

Assigned 942,868 1,102,213 (159,345) -14%

Unassigned 7,328,576 7,201,135 127,441 2%

Capital Projects Fund:

Restricted 2,562,241 2,667,397 (105,156) -4%

Committed 23,459 - 23,459 100%

Total 15,603,030 $ 16,025,189 $ (422,159) $ -3%

The General Fund is the main operating fund of the Dallastown Area School District. For fiscal year

ended 2013, the fund balance of the General Fund was $13.017 million as compared to $13.358 million

for fiscal year ended 2012, an increase of $341 thousand or 3%.

The General Fund balance of $13.017 million is comprised of $41 thousand in nonspendable funds,

$4.705 million in committed, $943 thousand in assigned and $7.329 million in unassigned. For planning

purposes, the Board set aside part of the District’s fund balance for future uses. During fiscal year ended

2013, the Board of School Directors committed $1 million for health-insurance reserves, $3.642 million

to assist with the expected future PSERS rate increase and $63 thousand for various High School projects.

The Board of School Directors also assigned $893 thousand to be utilized to balance the budget for fiscal

year ended 2014.



JUNE 30, 2013

16

Overall revenues in the General Fund were $88.230 million and $86.671 million in fiscal years ended 2013 and

2012, respectively. Revenues increased $1.559 million or 2% over last year. Refer to Figure A-8 below for

classifications of General Fund revenues.

Figure A-8


Comparison of General Fund Revenues


Local Revenues 69,142,666$ 68,572,849$ 569,817$ 0.83%

State Revenues 18,459,422 17,525,602 933,820 5.33%

Federal Revenues 620,331 561,852 58,479 10.41%

Other Financing Sources 7,537 10,968 (3,431) -31.28%

88,229,956$ 86,671,271$ 1,558,685$ 1.80%

The majority of the 2% rise in revenues from fiscal year ended 2012 to 2013 can be credited to the following:

Local revenues:

An increase of $280 thousand or less than 1% growth in regular real estate tax revenue which is primarily

due to a small increase in property assessments, as well as a 7% decrease in the tax rebate refunds.

An increase of $492 thousand in interim real estate taxes, from $267 thousand in fiscal year ended 2012 to

$759 thousand in fiscal year ended 2013. The majority of the increase was due to one Wellspan-property

addition of $425 thousand.

The increases were offset by a decrease of $108 thousand in interest on investments which is due to lower

interest rates.

State revenues:

An increase of $739 thousand in state share of retirement contributions which is due to the 43% increase

in the rate. The rates for fiscal years ended 2013 and 2012 were 12.36% and 8.65%, respectively.

An increase of $207 thousand in rental and sinking-fund payments due to timings of reimbursement

approvals. For fiscal year ended 2012, the District only received payments for the G.O. Bonds, Series

2011A, whereas, during fiscal year ended 2013, the District received payments for G.O. Bonds, Series

2011A, 2011AA and 2012.

Federal revenues:

A growth of $91 thousand in Title I receipts due to a 23% increase in funding for Title I.



JUNE 30, 2013

17

Figure A-9 below details the percentage of each revenue category that the General Fund receives. The largest

source of revenue is real estate tax which is 87% of local sources and 68% of total revenue.

78.37%

20.92%

0.70% 0.01%

Figure A-9

2012-2013 General Fund Revenues

Local Revenues

State Revenues

Federal Revenues

Other Financing Sources

Total expenditures from the General fund were $88.570 million and $86.664 million in fiscal years ended 2013 and

2012, respectively. Expenditures increased $1.906 million or 2% from last year.

Refer to Figure A-10 below for classifications of expenses by program type and the change from 2012.

Figure A-10


Comparison of General Fund Expenditures


Current:

Instructional 56,475,314$ 54,538,394$ 1,936,920$ 3.55%

Support Services 22,483,136 21,749,902 733,234 3.37%

Operation of noninstructional services 1,662,342 1,672,221 (9,879) -0.59%

Refunds of prior year's receipts 9,846 78,019 (68,173) -87.38%

Debt Service 7,520,007 7,845,604 (325,597) -4.15%

Other Financing Uses 419,773 779,825 (360,052) -46.17%

88,570,418$ 86,663,965$ 1,906,453$ 2.20%



JUNE 30, 2013

18

Figure A-11 displays a comparison of expenditures by major object.

Figure A-11


Comparison of General Fund Expenditures by Major Object


100 Salaries 45,075,802 $ 45,527,963 $ (452,161) $ -0.99%

200 Benefits 17,053,982 14,966,404 2,087,578 13.95%

300

Purchased Prof. & Tech

Services 4,072,237 3,790,763 281,474 7.43%

400

Purchased Property

Services 1,672,744 1,901,432 (228,688) -12.03%

500 Other Purchased Services 8,668,875 8,179,995 488,880 5.98%

600 Supplies 3,067,601 2,761,351 306,250 11.09%

700 Equipment 904,736 704,072 200,664 28.50%

800 Other Objects 2,176,087 2,784,324 (608,237) -21.85%

900 Other Uses of Funds 5,878,354 6,047,661 (169,307) -2.80%

88,570,418 $ 86,663,965 $ 1,906,453 $ 2.20%

The majority of the 2% increase in expenditures from fiscal year ended 2012 to 2013 can be credited to:

An increase of $2.088 million in benefits which is due to:

o A growth of 41% or $1.605 million in retirement expenditures which is due to the rate increase.

The rates for fiscal years ended 2013 and 2012 were 12.36% and 8.65%, respectively.

o An increase of $672 thousand in medical insurance expense due to a 14% rate increase in PPO1

medical premiums and a 13% rate increase in PPO2 medical premiums.

A decrease of $229 thousand in purchased property services which is due to a 19% decrease, or $230

thousand, in the cost of electricity. This decrease was due to negotiating with a new electricity provider

which yielded a 7%-rate decrease starting in January 2013, as well as curtailing usage.



JUNE 30, 2013

19

A growth of $306 thousand in supplies and books due to:

o Procurement of $447 thousand in MyMath materials.

o An increase of $70 thousand in the cost of natural gas due to switching the morning warm-up of

the Intermediate School from electricity to natural gas.

o These increases were offset by a decrease of $285 thousand in supplies primarily due to:

A decrease of $107 thousand in regular instruction supplies due to cost cutting measures

employed by the building staff.

A decrease of $153 thousand in ARRA IDEA supplies due to the conclusion of the grant.

An increase of 28.5% or $201 thousand in equipment due to the purchase of technology infrastructure to

include a core switch and sixty Aruba switches. These purchases were funded by unanticipated E-rate

funds.

A decrease in other objects of $608 thousand or 22% due to:

o A decrease of $204 thousand in interest expense that is directly related to reclassification of the

debt-service payments made to the York County School of Technology. The expense was

reclassified out of debt-service to vocation education as suggested by the Comptroller’s Office.

o A decrease of 12%, or $125 thousand, in the interest paid on the swap obligations, which is tied to

the decrease in the notional amounts of the swaps.

o A reduction of $180 thousand, or 13%, in bond-interest expense due to more funds being set aside

in the Bond Sinking Fund during refinancing of the General Obligation Bonds, and the reduction

in total debt owed by the District. The Bond Sinking Fund incurred $94 thousand more in interest

expense for fiscal year ended 2013 as compared to fiscal year ended 2012, thus reducing the

burden of interest costs paid out by the General Fund.



JUNE 30, 2013

20

Figure A-12 displays the percentage make-up of each major object. Since the District is a service organization,

salaries and benefits comprise 70% of all expenditures.

51%

19%

5%

2%

10%

3%

1%2%

7%

Figure A-122012-2013

General Fund Expenses by Major Object

Salaries

Benefits

Purchased Prof. & Tech Services

Purchased Property Services

Other Purchased Services

Supplies

Equipment

Other Objects

Other Uses of Funds

The Capital Projects Fund had a total fund balance of $2.586 million for fiscal year ended 2013 and $2.667

million for fiscal year ended 2012, all of which is restricted for continuing costs related to capital projects as

approved by the Board of School Directors and costs related to the Intermediate School.



JUNE 30, 2013

21

Refer to Figures A-13 and A-14 for comparisons of the 2012 and 2013 balance sheets and statements of

revenues, expenses and changes in fund balances for the Capital Projects Fund.

Figure A-13


Capital Projects Balance Sheet

6/30/2013 6/30/2012

Cash and Cash Equivalents 1,232,116 $ 1,108,497 $

Investments 1,551,894 1,844,896

Other Receivables 5,825 4 Total assets 2,789,835 $ 2,953,397 $

Accounts Payable 204,135 $ 286,000 $ Total liabilities 204,135 $ 286,000 $

Restricted Fund Balance 2,562,241 $ 2,667,397 $

Committed Fund Balance 23,459 - Net position 2,585,700 $ 2,667,397 $



JUNE 30, 2013

22

Figure A-14


6/30/2013 6/30/2012

Revenues

Local Sources 35,665 $ 4,789 $ Total revenues 35,665 $ 4,789 $

Expenditures

Current:

Instructional -$ -$

Support services 338,670 227,492

Capital outlay 310,537 646,409

Debt service 502,384 408,768 Total expenditures 1,151,591 $ 1,282,669 $

Other Financing Sources (Uses)

Transfers in (out) 380,000 $ 617,177 $

Capital contributions 18,366 -

Issuance of refunding bonds 67,900,000 72,865,000

Payment to refunded bond escrow agent (68,830,000) (72,865,000)

Premium 1,565,863 821,577

Total other financing sources 1,034,229 $ 1,438,754 $

Net changes in fund balances (81,697) 160,874

Fund Balances:

July 1, 2012 and 2011 2,667,397 2,506,523

June 30, 2013 and 2012 2,585,700 $ 2,667,397 $

Statement of Revenues, Expenses and Changes in Fund Balances - Capital Projects Fund



JUNE 30, 2013

23

During fiscal year ended 2013, the District completed renovations of the Administration Offices, completed

the paving at Ore Valley Elementary, installed a replacement chiller at Ore Valley Elementary and started

the Middle School and High School Auditorium seating-replacement project.

During fiscal year ended 2014, the District plans to replace the speed-zone signs and repave the rear

playground at Loganville-Springfield Elementary, replace the water tower and chiller at York Township

Elementary, replace the HVAC controls at the Middle and High Schools and complete the replacement of

the auditorium seating that was started during fiscal year end 2013.

Refer to Figure A-15 for a status of the current capital projects as of the fiscal year ended 2013.

-

50,000

100,000

150,000

200,000

250,000

Ore Valley Chiller Administrative Offices Ore Valley Paving MS & HS Auditoruim Seating

Figure A-15Status of Major Capital Reserve Fund

Projects

2012-2013 cost

Total Project Cost as of June 30, 2013

Expected Cost



JUNE 30, 2013

24

GENERAL FUND BUDGETARY HIGHLIGHTS

The Dallastown Area School District’s fiscal year ended 2013 original budget anticipated that expenses would

equal revenues, with a $1.045 million dollar utilization of fund balance. The actual results for the year were that

revenues were under budget by $739 thousand and expenses were less than budget by $1.444 million for a total

use of fund balance of $340 thousand.

Refer to Figure A-16 for a comparison of Budget to Actual by revenue source type.

Figure A-16

Fiscal Year Ended June 30, 2013

Comparison of General Fund Revenues - Budget to Actual

Budget Actual $ Change % Change

Local Revenues 68,908,234 $ 69,142,666 $ 234,432 $ 0.34%

State Revenues 18,966,943 18,459,422 (507,521) -2.75%

Federal Revenues 697,550 620,331 (77,219) -12.45%

Other Financing Sources 396,000 7,537 (388,463) 0.00%

88,968,727 $ 88,229,956 $ (738,771) $ -0.84%

In fiscal year ended 2013, total actual to budgeted revenues were $739 thousand less than expected primarily due

to the following:

State revenues:

$270 thousand less than expected of the Social Security and Medicare Subsidies, and $282 thousand less

of the Retirement Subsidy due to the timing of receipt of funds.

Federal revenues:

During fiscal year ended 2012, the District started the implementation process of applying for Access

Reimbursement and hopes to have it completed by the close of fiscal year ending 2014. This resulted in a

difference of $98 thousand in Federal revenues - budget to actual - offset by larger than anticipated

Federal grant awards.

During fiscal year ended 2013, the District did not receive the note premium through the General Fund on

the 2012 refinanced bonds. The money was set aside in the bond-sinking fund to be used to make debt

payments until the cash is gone. This resulted in a difference of $395 thousand in revenues - budget to

actual - in other financing sources. On the expenditure side, there is an equal savings for debt payments

that were paid out of the bond-sinking fund which netted the loss of revenue to zero.



JUNE 30, 2013

25

Refer to Figure A-17 for a comparison of Budget to Actual by major object.

Figure A-17

Comparison of General Fund Expenditures by Major Object - Original Budget to Actual

Budget Actual $ Change % Change

100 Salaries $45,472,900 45,075,802$ 397,098$ 0.87%

200 Benefits 17,326,900 17,053,982 272,918 1.58%

300

Purchased Prof. & Tech

Services 3,878,575 4,072,237 (193,662) -4.99%

400

Purchased Property

Services 2,085,750 1,672,744 413,006 19.80%

500 Other Purchased Services 7,827,449 8,668,875 (841,426) -10.75%

600 Supplies 3,071,900 3,067,601 4,299 0.14%

700 Equipment 621,050 904,736 (283,686) -45.68%

800 Other Objects 4,051,525 2,176,087 1,875,438 46.29%

900 Other Uses of Funds 5,678,150 5,878,354 (200,204) -3.53%

90,014,199$ 88,570,418$ 1,443,781$ 1.63%

Fiscal Year Ended June 30, 2013

The actual expenses were $1.444 million less than budgeted in fiscal year ended 2013 due to the following:

Within the purchased property services-budget category, the District saved $279 in electricity costs.

This decrease was due to negotiations with a new electricity provider that yielded a 7%-rate drop

starting in January 2013 and energy curtailment. There was also a savings of $105 thousand realized

in the leasing of copiers and printers.

Other purchased services were $841 thousand more than budgeted due to:

o $295 thousand more spent on transportation costs due to unanticipated costs for activity runs,

non-public runs and alternative education mid-day runs and an increased cost for diesel.

o $188 thousand more spent on charter and cyber school students. When budgeting for fiscal

year ended 2013, there were approximately 88 charter and cyber school students; however,

during the year, the District saw enrollment reach close to 100, lending to the 18% increase

over budget.

o Reclassifying the debt-service payments made to the York County School of Technology.

The expense was reclassified out of debt-service to vocational education as suggested by the

Comptroller’s Office and represents a total cost of $498 thousand. This reclassification was

slightly offset by the cost of students attending the York County School of Technology being

15% less than budgeted or $186 thousand.



JUNE 30, 2013

26

Equipment expense was $284 thousand more than budgeted largely due to purchasing technology

infrastructure in advance with additional e-rate funds.

Other objects were $1.875 million under budget due to:

o Savings of $1.167 million in bond-interest costs due to a favorable note rate, as well as $502

thousand of debt-interest payments being paid out of the bond-sinking fund.

o Reclassification of $178 thousand in budgeted debt service-interest payments for the York County

School of Technology as suggested by the Comptroller’s Office.

o $440 thousand due to reclassification of the tax rebate-incentive program. For budgeting

purposes, according to the Department of Education, the tax rebate-incentive program must be

budgeted as an expense, whereas the actual expense is properly recorded as negative revenue.

o Reclassifying of the $200 thousand budgetary reserve to ensure that the adjusted final budget

relative to actual results is positive by major function and major object.

The overage of $200 thousand in the Other Use of Funds category is primarily due to a Board-approved

Capital Reserve Fund transfer of $380 thousand and a $400 thousand accelerated bond-principal payment.

These expenses were offset by interest savings, as well as by a $337 thousand reduction in York County

School of Technology principal payments which were reclassified to vocational education.



JUNE 30, 2013

27

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

In fiscal years ended 2013 and 2012, the Dallastown Area School District invested $123.178 million and

$127.252 million (net of accumulated depreciation), respectively, in capital assets including land,

buildings and improvements, furniture and equipment and construction-in-progress. Refer to Figure A-18

for a comparison of fiscal years ended 2013 and 2012.

Figure A-18


Capital Assets (net of depreciation)

2013 2012 Change

Governmental Activities

Land 4,310,857 $ 4,310,857 $ -$

Buildings and building improvements 113,816,408 116,882,419 (3,066,011)

Furniture and equipment 4,785,046 5,767,479 (982,433)

Construction-in-progress 29,722 11,498 18,224

Total governmental activities - capital assets 122,942,033 $ 126,972,253 $ (4,030,220) $

Business-Type Activities

Furniture and equipment 235,870 $ 280,224 $ (44,354) $

During fiscal year ended 2013, the District purchased approximately $859 thousand in furniture and

equipment, retired $1.038 million in obsolete technology equipment, purchased $255 thousand in

construction-in-progress and moved $236 thousand from construction-in-progress to buildings and

building improvements or furniture and equipment.

The District invested in notebooks, switches, servers, iPads, iPhones, desktop computers, athletic

equipment, musical equipment, a used truck, a vision screener, a floor scrubber and studio-production

equipment.

During fiscal year ended 2013, the District completed renovations of the Administration Offices,

completed the paving at Ore Valley Elementary, installed a replacement chiller at Ore Valley Elementary

and started the Middle School and High School Auditorium seating-replacement project.

During fiscal year ending 2014, the District plans to replace the speed-zone signs and repave the rear

playground at Loganville-Springfield Elementary, replace the water tower and chiller at York Township

Elementary, replace the HVAC controls at the Middle and High Schools and complete the replacement of

the auditorium seating that was started during fiscal year end 2013.

Additional information about capital assets can be found in Note 7 of this report.



JUNE 30, 2013

28

Long-Term Debt

In fiscal year ended 2013, the District had outstanding debt of $81.244 million consisting of $81.225

million in bond principal and $19 thousand in lease obligations. In fiscal year ended 2012, the District had

outstanding debt of $87.963 million consisting of $87.890 million in bond principal and $73 thousand in

lease obligations.

The District made payments against principal during fiscal year ended 2013 of $5.735 million on bonds

and $54 thousand on lease purchase obligations.

Refer to Figure A-19 for a comparison of the long-term debt outstanding for fiscal years ended 2013 and

2012.

Figure A-19


Long-Term Debt

2013 2012

General Obligation Bonds

Series 2010A 955,000$ 1,895,000$

Series 2010B 1,050,000 1,380,000

Series 2011AA 11,320,000 11,750,000

Series 2012 - 72,865,000

Series 2013 57,015,000 -

Series 2013A 10,885,000 -

Capital Lease Obligations

Koch Leasing - SANS server - 45,294

Ford Motor Credit - Driver's Education Vehicles 19,151 27,439 Total 81,244,151$ 87,962,733$

The District also made $454 thousand in annual lease payments (principal and interest) to the York

County School of Technology for the General Obligation Bonds, Series 2007. As of fiscal year ended

2013, the financial obligation due by the Dallastown Area School District to the York County School of

Technology is $4.542 million.

During fiscal year ended 2011, the District issued $1.710 million in General Obligation Bonds on behalf

of the York County School of Technology. The District will share in a pro-rata portion of interest and

principal payments for this debt as it does for the General Obligation Bonds, Series 2007.

The District made $43 thousand in annual lease payments (principal and interest) to the York County

School of Technology for these bonds. As of fiscal year ended 2013, the District’s financial obligation to

the York County School of Technology is $132 thousand. Refer to Note 8 for more information regarding

these transactions.

Other long-term obligations include accrued personal and sick leave for specific employees of the

District, swap payments associated with the variable rate debt on the 1998 and 2000 bonds and other post-

employment benefits. More detailed information about the District’s long-term debt can be found in Note

8 of this report.



JUNE 30, 2013

29

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES

2013-2014 Budget

The General Fund Revenue Budget for fiscal year ending 2014 is $90.714 million which is $1.745 million

or 2% more than the fiscal year ended 2013 budget of $88.969 million.

The three largest revenue increases are current real estate taxes, earned income taxes and the retirement-

reimbursement subsidy.

The General Fund Expenditure Budget for fiscal year ending 2014 is $91.607 million which is $1.593

million or 2% more than the fiscal year ended 2013 budget of $90.014 million. In order to subsidize the

budget so that revenues equaled expenditures, $893 thousand of fund balance is to be utilized.

The following highlights the largest categories where increases and decreases are expected:

Benefits - $1.377 million or 8% more than budgeted for fiscal year ended 2013. Retirement

expense captures the largest piece of the benefit increase with $2.147 or 38%. The significant

increase is due to the PSERS rate increase from 12.36% to 16.93%. This increase was offset by a

decrease of $500 thousand in medical-insurance premiums due to lower rates and an alternative

funding method, as well as a decrease of $317 thousand in unemployment compensation.

Other Purchased Services - $934 thousand more than budgeted for fiscal year ended 2013 which

is predominantly due to an increase of $569 in transportation costs. For fiscal year ending 2014,

special-education transportation will be moved to another carrier. The District’s previous carrier

billed a year behind, and therefore, fiscal year ending 2014 will incur a period of “catch-up”.

There was also an increase of $461 thousand in the vocational-education budget due to

reclassifying the bond payments for the York County School of Technology from the debt-service

function.

Other Use of Funds - $524 thousand less than budgeted for fiscal year ended 2013 due to

reclassifying the bond payments for the York County School of Technology from the debt-

service function to the vocational-education function as suggested by the Comptroller’s Office, as

well as the removal of the Food Service Fund unemployment- compensation transfer.



JUNE 30, 2013

30

Act 1

Fiscal year ended 2007 was the first year that Session Act I of 2006, known as the Taxpayer Relief Act,

was in place. The law stated that school districts may not increase the real estate-tax rate above the

adjusted-index percentage as determined by the state. Please refer to the ACT 1 Adjusted Index History

Chart below.

School districts that wish to increase millage beyond the index to maintain or improve existing programs

must either apply for exceptions from the Department of Education or receive voter approval for an

increase via a tax increase-referendum question.

The law intends to cap the financial burden of home ownership by providing school districts the means to

lower property taxes to homeowners, especially senior citizens. The legislation is complex, setting rules for

gaming-revenue allocations, requiring front-end voter referenda on tax shifting, mandating new school

district-budget restrictions, and requiring back-end voter referenda on future real estate-tax increases above

the index.

The state is still anticipating gaming will generate $1 billion each year for local property-tax relief. The

intent of Act 1 is that school districts will receive property tax-reduction allocations when the gaming

revenues reach $500 million and the Lottery Fund is repaid. Once the minimum level is obtained,

allocations to school districts will be state-formula driven. The state will in rank-order, assign each school

district a numerical rank and assign a tax-reduction index in order to calculate the property tax-reduction

allocation. Districts are eligible to receive the allocations unless their Boards of School Directors, by

resolution, reject the allocation. If rejected, a referendum is submitted to the voters to determine whether

they favor the school district receiving a property tax-reduction allocation.



JUNE 30, 2013

31

There are referendum-exceptions built into Act I should districts need to raise taxes beyond the adjusted

index. The exceptions provide partial relief for increases in the costs of special education, retirement and

health-care expenses, emergencies and disasters and some school- construction projects. It is anticipated

that most school districts will be requesting relief through some of the exceptions.

The Court of Common Pleas will make decisions on some referendum-exceptions, but most will require

approval from the Department of Education. As a result, the budget timeline for all schools needing to go

above the adjusted index has been accelerated to provide the Department with a preliminary proposed

budget by the beginning of February each year along with the proposed exceptions so that the Department

has time to act upon the requested exceptions.

PSERS

The Pennsylvania School Employees Retirement System (PSERS) set the rate for fiscal year ended 2014

at 16.93%, a 37% increase over the 2013 rate of 12.36%. Refer to the chart below for past rates and

actuarial projections.

7.13% 4.76% 4.78%

5.64%

8.65%

12.36%

16.93%

21.40%

25.80%

28.30% 29.15% 30.14% 30.87%

30.76%

30.93%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

200

7-2

008

200

8-2

009

200

9-2

010

201

0-2

011

201

1-2

012

201

2-2

013

201

3-2

014

201

4-2

015

Pro

jected

201

5-2

016

Pro

jected

201

6-2

017

Pro

jected

201

7-2

018

Pro

jected

201

8-2

019

Pro

jected

201

9-2

020

Pro

jected

202

0-2

021

Pro

jected

202

1-2

022

Pro

jected

15 Year History & Projected Retirement (PSERS) Expense

Rates

PSERS Rate



JUNE 30, 2013

32

REQUESTS FOR INFORMATION

The financial report is designed to provide our citizens, taxpayers, investors and creditors with a general

overview of the District’s finances and to demonstrate the District’s accountability. If you have any

questions about this report or need additional information, please contact Miranda Hoefler-Weaver, CPA,

MBA, Director of Accounting Services, or Donna Devlin, MBA, Business Administrator, at (717) 244-

4021 or by mail at the Dallastown Area School District, 700 New School Lane, Dallastown, PA, 17313.

33


STATEMENT OF NET POSITION

June 30, 2013

Governmental Business-Type

Activities Activities Total

Assets

Cash and cash equivalents 10,389,623 $ 4,530 $ 10,394,153 $

Investments 9,545,694 - 9,545,694

Receivables

Due within one year 3,177,594 12,522 3,190,116

Due in more than 1 year 720,000 - 720,000

Inventories - 19,176 19,176

Prepaid expenses 40,811 - 40,811

Capital Assets

Land and construction-in-progress 4,340,579 - 4,340,579

Other capital assets, net of depreciation 118,601,454 235,870 118,837,324

Total capital assets 122,942,033 235,870 123,177,903

Total assets 146,815,755 $ 272,098 $ 147,087,853 $

Deferred Outflows of Resources

Deferred amounts on refunding debt 111,365 $ -$ 111,365 $

Liabilities

Internal balances (87,726) $ 87,726 $ -$

Accounts payable and accrued expenses 6,244,588 47,222 6,291,810

Unearned revenues 19,303 59,442 78,745

Long-term liabilities

Due within one year 59,443,063 17,000 59,460,063

Due in more than one year 29,145,761 34,000 29,179,761

Total long-term liabilities 88,588,824 51,000 88,639,824

Total liabilities 94,764,989 $ 245,390 $ 95,010,379 $

Net Position

Net investment in capital assets 40,588,455 $ 235,870 $ 40,824,325 $

Restricted 1,217,782 - 1,217,782

Unrestricted 10,355,894 (209,162) 10,146,732

Total net position 52,162,131 $ 26,708 $ 52,188,839 $

See Notes to Financial Statements.

34


STATEMENT OF ACTIVITIES

Year Ended June 30, 2013

Operating Capital

Charges for Grants and Grants and Governmental Business-Type

Functions/Programs Expenses Services Contributions Contributions Activities Activities Total

Governmental Activities:

Instruction 60,420,941 $ 232,056 $ 7,712,812 $ -$ (52,476,073) $ -$ (52,476,073) $

Instructional student support 6,254,902 - 597,570 - (5,657,332) - (5,657,332)

Administration and financial services 7,218,314 - 347,368 - (6,870,946) - (6,870,946)

Operation and maintenance of plant services 6,273,616 - 254,348 - (6,019,268) - (6,019,268)

Pupil transportation 3,959,551 - 1,213,732 - (2,745,819) - (2,745,819)

Student activities 1,686,768 84,363 80,193 - (1,522,212) - (1,522,212)

Community services 91,468 43,075 11,165 - (37,228) - (37,228)

Interest on long-term debt 816,534 - 858,078 - 41,544 - 41,544

Total governmental activities 86,722,094 359,494 11,075,266 - (75,287,334) - (75,287,334)

Business-Type Activities:

Food Service 2,709,545 1,549,957 1,092,514 - - (67,074) (67,074)

Total primary government 89,431,639 $ 1,909,451 $ 12,167,780 $ -$ (75,287,334) $ (67,074) $ (75,354,408) $

General Revenues:

Property taxes, levied for general purposes, net 61,242,397 $ -$ 61,242,397 $

5,882,759 - 5,882,759

Grants, subsidies and contributions not restricted 9,268,267 - 9,268,267

Investment earnings 102,783 256 103,039

Transfers (39,773) 39,773 -

Miscellaneous income (expenses) 233,688 (399) 233,289

Total general revenues and transfers 76,690,121 39,630 76,729,751

Changes in net position 1,402,787 (27,444) 1,375,343

Net position - July 1, 2012, as originally stated 51,087,283 54,152 51,141,435

Prior period adjustment (327,939) - (327,939)

Net position - July 1, 2012, as restated 50,759,344 54,152 50,813,496

Net position - June 30, 2013 52,162,131 $ 26,708 $ 52,188,839 $


Public Utility, Realty Transfer, Earned Income, and Per Capita Taxes for general purposes, net

Net (Expense) Revenues and

Changes in Net PositionProgram Revenues

35


BALANCE SHEET - GOVERNMENTAL FUNDS

June 30, 2013

Non-Major Fund

Capital Debt Total

General Projects Service Governmental

Fund Fund Fund Funds

Assets

Cash and cash equivalents 9,157,507 $ 1,232,116 $ -$ 10,389,623 $

Investments 7,993,800 1,551,894 - 9,545,694

Due from other governments 1,474,083 - - 1,474,083

Other receivables 103,588 5,825 - 109,413

Due from other funds 87,726 - - 87,726

Prepaid expenses 40,811 - - 40,811

Taxes receivable 1,264,098 - - 1,264,098

Total assets 20,121,613 $ 2,789,835 $ -$ 22,911,448 $

Liabilities

Accounts payable 1,640,772 $ 204,135 $ -$ 1,844,907 $

Accrued salaries and benefits 4,278,309 - - 4,278,309

Payroll deductions and withholdings 121,372 - - 121,372

Unearned revenues 19,303 - - 19,303

Total liabilities 6,059,756 204,135 - 6,263,891

Deferred Inflows of Resources

Delinquent tax revenues 1,044,527 - - 1,044,527

Fund Balances

Nonspendable 40,811 - - 40,811

Restricted - 2,562,241 - 2,562,241

Committed 4,705,075 23,459 - 4,728,534

Assigned 942,868 - - 942,868

Unassigned 7,328,576 - - 7,328,576

Total fund balances 13,017,330 2,585,700 - 15,603,030

Total liabilities, deferred inflows of

resources and fund balances 20,121,613 $ 2,789,835 $ -$ 22,911,448 $


Major Funds

36


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION

June 30, 2013

Total fund balances - governmental funds 15,603,030 $

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, they are not reported as assets in governmental funds. The cost

of assets is $170,163,761, and the accumulated depreciation is $47,221,728. 122,942,033

Property taxes and earned income taxes receivable will be collected this

year, but are not available soon enough to pay for the current period's

expenditures; therefore, they are deferred inflows of resources in the funds. 1,044,527

The difference between the re-acquisition price and the net carrying

amount of the refunded debt is a deferred outflow of resources,

which is not reported in the funds. 111,365

Long-term receivables are not available for current use and are

recorded in the Statement of Net Position. 1,050,000

Long-term liabilities; including bonds payable, swap liability, compensated

absences, and other post-employment benefits; are not due and payable in

the current period, and therefore, they are not reported as liabilities in the funds.

Long-term liabilities at year-end consist of:

Bonds payable, including bond premium (83,384,427)

Pay-fixed, interest-rate swap liability (2,249,079)

Lease-purchase obligations (19,151)

Other post-employment benefits (1,292,612)

Compensated absences (1,643,555)

(88,588,824)

Total net position - governmental activities 52,162,131 $


37


STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN

FUND BALANCES - GOVERNMENTAL FUNDS


Non-Major Fund

Capital Debt Totals

General Projects Service Governmental

Fund Fund Fund Funds

Revenues

Local sources 69,142,666 $ 35,665 $ 360,450 $ 69,538,781 $

State sources 18,459,422 - - 18,459,422

Federal sources 620,331 - - 620,331

Total revenues 88,222,419 35,665 360,450 88,618,534

Expenditures

Current:

Instructional 56,475,314 - - 56,475,314

Support services 22,483,136 338,670 - 22,821,806

Operation of noninstructional services 1,662,342 - - 1,662,342

Refunds of prior year's receipts 9,846 - - 9,846

Total Current 80,630,638 338,670 - 80,969,308

Capital outlay - 310,537 - 310,537

Debt service

Principal 5,458,581 - 330,000 5,788,581

Interest 2,061,426 502,384 30,450 2,594,260

Total expenditures 88,150,645 1,151,591 360,450 89,662,686

Excess (deficiency) of revenues over

expenditures 71,774 (1,115,926) - (1,044,152)


Transfers in - 380,000 - 380,000

Transfers out (419,773) - - (419,773)

Sale of capital assets 7,537 - - 7,537

Capital contributions - 18,366 - 18,366

Issuance of refunding bonds - 67,900,000 - 67,900,000

Payment to refunded bond escrow agent - (68,830,000) - (68,830,000)

Premium - 1,565,863 - 1,565,863

Total other financing sources (uses) (412,236) 1,034,229 - 621,993

Net changes in fund balances (340,462) (81,697) - (422,159)

Fund Balances:

July 1, 2012 13,357,792 2,667,397 - 16,025,189

June 30, 2013 13,017,330 $ 2,585,700 $ -$ 15,603,030 $


Major Funds

38


RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OFREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THESTATEMENT OF ACTIVITIES


Net changes in fund balances - governmental funds (422,159) $

Amounts reported for governmental activities in the Statement of

Activities are different because:

Capital outlays are reported in governmental funds as expenditures. However, in

the Statement of Activities, the costs of those assets are allocated over their useful

lives as depreciation expense. This is the amount by which depreciation

and dispositions of capital assets exceeds capital outlays.

Capital outlays 1,113,676

Loss on sale of capital assets (9,737)

Less depreciation expense (5,134,159) (4,030,220)

Because some property taxes will not be collected for several months after the

District's fiscal year ends, they are not considered as "available" revenues in the

governmental funds. Deferred inflows of resources decreased by this amount this year. (119,335)

The repayment of notes receivable provides current resources; however, it does not

have any effect on the net assets. (330,000)

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. In addition, refunding losses, bond premiums,

discounts, and changes in swap liabilities are recognized as interest throughout the lives

over the amount due is shown here. 1,828,915

Some expenses reported in the Statement of Activities do not require the use of current

financial resources, and therefore, are not reported as revenues in governmental funds. (677,133)

The issuance of long-term debt provides current financial resources to governmental

funds, while the repayment of the principal of long-term debt consumes the current

financial resources of governmental funds. Neither transaction, however, has any

effect on net position. Also, governmental funds report the effects of

premiums, discounts, and similar items when debt is first issued, whereas these

amounts are deferred and amortized in the Statement of Activities. This

amount is the net effect of these differences in the treatment of long-term

debt and related items.

Issuance of long-term debt, including bond premium (69,465,863)

Repayment of long-term debt 74,618,582 5,152,719

Changes in net position of governmental activities 1,402,787 $


of the related obligations. The additional interest accrued in the Statement of Activities

39


STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -

BUDGET AND ACTUAL - GENERAL FUND


Variance

with Final

Original Final Actual Budget

Revenues

Local sources 68,908,234 $ 68,908,234 $ 69,142,666 $ 234,432 $

State sources 18,966,943 18,966,943 18,459,422 (507,521)

Federal sources 697,550 697,550 620,331 (77,219)

Total revenues 88,572,727 88,572,727 88,222,419 (350,308)

Expenditures

Current:

Instructional 56,030,850 56,827,025 56,475,314 351,711

Support services 22,808,399 23,450,874 22,483,136 967,738

Operation of noninstructional services 1,555,100 1,724,050 1,662,342 61,708

Refunds of prior year's receipts 450,000 11,000 9,846 1,154

Total Current 80,844,349 82,012,949 80,630,638 1,382,311

Capital outlay - - - -

Debt service 8,687,150 7,520,550 7,520,007 543

Total expenditures 89,531,499 89,533,499 88,150,645 1,382,854

Excess (deficiency) of revenues over

expenditures (958,772) (960,772) 71,774 1,032,546


Transfers in 395,000 395,000 - (395,000)

Transfers out (282,700) (480,700) (419,773) 60,927

Sale of capital assets 1,000 1,000 7,537 6,537

Budgetary reserve (200,000) - - -

Total other financing uses (86,700) (84,700) (412,236) (327,536)

Net changes in fund balance (1,045,472) $ (1,045,472) $ (340,462) 705,010 $

Fund Balances - July 1, 2012 13,357,792

Fund Balances - June 30, 2013 13,017,330 $


Budgeted Amounts

General Fund

40


STATEMENT OF NET POSITION - PROPRIETARY FUND - FOOD SERVICE

June 30, 2013

Assets

Cash and cash equivalents 4,530 $

Receivables

State sources 861

Federal sources 9,267

Other 2,394

Inventories 19,176

Other capital assets, net of depreciation 235,870

Total assets 272,098 $

Liabilities

Accounts payable 47,222 $

Unearned revenues 59,442

Due to other funds 87,726

Long-term liabilities

Due within one year 17,000

Due in more than one year 34,000

Total long-term liabilities 51,000

Total liabilities 245,390 $

Net Position

Net investment in capital assets 235,870 $

Unrestricted (209,162)

Total net position 26,708 $


41


STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION -

PROPRIETARY FUND - FOOD SERVICE


Operating Revenues

Food service revenues 1,549,957 $

Operating Expenses

Supplies 172,199

Salaries 15,188

Employee benefits 66,659

Purchased property services 47,160

Other purchased services 2,363,862

Depreciation 44,354

Other operating expenses 123

Total operating expenses 2,709,545

Operating loss (1,159,588)

Nonoperating Revenues (Expenses)

Investment earnings 256

State sources 85,397

Federal sources 1,007,117

Transfers in 39,773

Refund of prior year's receipts (399)

Total nonoperating revenues 1,132,144

Changes in net position (27,444)

Net Position - July 1, 2012 54,152

Net Position - June 30, 2013 26,708 $


42


STATEMENT OF CASH FLOWS - PROPRIETARY FUND - FOOD SERVICE


Cash Flows From Operating Activities

Cash received from meal sales 1,549,972 $

Cash payments for goods and services (2,694,660)

Cash payments to employees for services (81,847)

Net cash used in operating activities (1,226,535)

Cash Flows From Noncapital Financing Activities

State sources 85,446

Federal sources 872,725

Transfers in 39,773

Refund of prior year's receipts (399)

Net cash provided by noncapital financing activities 997,545

Cash Flows From Investing Activities

Investment earnings 256

Net decrease in cash and cash equivalents (228,734)

Cash and Cash Equivalents:

July 1, 2012 233,264

June 30, 2013 4,530 $

Reconciliation of Operating Loss to Net Cash Used

in Operating Activities

Operating loss (1,159,588) $

Adjustments to reconcile operating loss to net

cash used in operating activities

Depreciation 44,354

Value of donated commodities 132,498

Changes in assets and liabilities:

(Increase) decrease in:

Receivables (1,674)

Inventories 1,906

(Decrease) increase in:

Accounts payable (8,849)

Unearned revenues 1,689

Internal balances (219,871)

Other long-term liabilities (17,000)

Net cash used in operating activities (1,226,535) $


43


STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES

June 30, 2013

Agency Fund

Student Activities

Assets

Cash and cash equivalents 263,988 $

Investments 12,810

Total assets 276,798 $

Liabilities

Due to student groups 276,798 $

Total liabilities 276,798 $



NOTES TO FINANCIAL STATEMENTS

44

Note 1. Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Dallastown Area School District (the District) was formed in 1966 under the provisions of P.L. 564, the

School District Reorganization Act of 1963 of the Commonwealth of Pennsylvania. The District operates

a public-school system that encompasses six municipalities in York County. The governing body of the

District is a board of nine school directors who are each elected for a four-year term. The daily operation

and management of the District is carried out by the administrative staff of the District, headed by the

Superintendent of Schools who is appointed by the Board of School Directors. Funding for the District is

received from local, Commonwealth, and Federal sources and must comply with the requirements of the

various funding-source agencies.

The District assesses the taxpayers of these municipalities based upon taxing powers at its disposal. The

ability of the School District’s taxpayers to pay their assessments is dependent upon economic and other

factors affecting the taxpayers.

The financial statements of the District have been prepared in accordance with accounting principles

generally accepted in the United States of America (GAAP) as applied to governmental units. The

Governmental Accounting Standards Board (GASB) is the authoritative, standard-setting body for the

establishment of governmental accounting and financial-reporting principles. The more significant of

these accounting policies are as follows:

A. Reporting Entity

In evaluating the District as a reporting entity, management has addressed all potential component units

which may or may not fall within the District’s financial accountability. The criteria used to evaluate

component units for possible inclusion as part of the District’s reporting entity are financial accountability

and the nature and significance of the relationship. This report presents the activities of the District. The

District is not a component unit of another reporting entity, nor does it have any component units. The

District does, however, participate in jointly-governed organizations which are described in Note 9.



45

Note 1. Summary of Significant Accounting Policies (Continued)

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the Statement of Net Position and the Statement of

Activities) report information on all of the non-fiduciary activities of the primary government. The

significant effects of interfund activity have been removed from these statements. Governmental

activities, which normally are supported by taxes and intergovernmental revenues, are reported separately

from business-type activities, which rely to a significant extent on fees and charges for support.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function, or

segment, are offset by program revenues. Direct expenses are those that are clearly identifiable with a

specific function or segment. Program revenues include 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 revenues.

Separate fund financial statements are provided in the report for all of the governmental, proprietary, and

the fiduciary funds of the District, even though the latter are excluded from the government-wide

financial statements. Major individual governmental funds and the major proprietary fund are reported as

separate columns in the fund financial statements. Non-major funds are also presented in a single

column. Fiduciary funds are reported by fund type.

C. Measurement Focus, Basis of Accounting and Financial Statement Presentation

The District complies with accounting principles generally accepted in the United States of America

(GAAP) and applies all relevant Governmental Accounting Standards Board (GASB) pronouncements.

The provisions of GASB Statement No. 62, Codification of Accounting and Financial Reporting

Guidance Contained in Pre-November 30, 1989, FASB and AICPA Pronouncements, are generally

followed in both the government-wide and proprietary fund financial statements to the extent that those

provisions do not conflict with or contradict guidance provided by the Governmental Accounting

Standards Board. Governments also have the option of following subsequent private-sector guidance for

their business-type activities and enterprise funds, subject to this same limitation. The District has elected

not to follow subsequent private-sector guidance.

The government-wide financial statements are reported using the economic-resources measurement focus

and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements.

Revenues are recorded when earned, and expenses are recorded when related liabilities are incurred,

regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for

which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility

requirements imposed by the provider have been met. Net position (assets plus deferred outflows of

resources less liabilities less deferred inflows of resources) is used as a practical measure of economic

resources, and the operating statement includes all transactions and events that increased or decreased net

position. Depreciation is charged as an expense against current operations, and accumulated depreciation

is reported in the Statement of Net Position.



46


C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)

Governmental fund financial statements are reported using the current financial-resources measurement

focus and the modified-accrual basis of accounting. Revenues are recognized as soon as they are both

measurable and available. Revenues are 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 revenues to be available if they are collected within 60 days of the end of the

current fiscal period. Revenues from Federal, state and other grants designated for payment of specific

District expenditures are recognized when the related expenditures are incurred; accordingly, when such

funds are received, they are recorded as deferred revenues until earned. Expenditures generally are

recorded when related liabilities are 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 payments are due.

When both restricted and unrestricted (including committed, assigned, and unassigned) resources are

available for use, it is the District’s policy to generally use the resources with the most stringent

restrictions first, followed by resources in decreasing order of restriction, as funds are needed. However,

the District does use unassigned monies at times to pay for expenditures that may have been board-

committed.

Governmental funds are those through which most governmental functions of the District are financed.

The acquisition, use, and balances of the District’s expendable financial resources and the related

liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds.

The District reports the following major governmental funds:

General Fund - The General Fund is the District’s primary, operating fund. It accounts for all

financial resources except those required to be in another fund. Revenues are primarily derived

from local property, earned income, and per capita taxes, and state and Federal distributions.

Many of the more important activities for the District, including instruction, administration of the

District and certain non-instructional services are accounted for in this fund.

Capital Projects Fund - The Capital Projects Fund is used to account for and report financial

resources that are restricted, committed, or assigned to expenditures for the acquisition,

construction, or improvement of major capital facilities (other than those financed by proprietary

funds).

Proprietary Fund - The District operates one enterprise fund, the Food Service Fund. This fund

accounts for the activities of the District’s food-service program.



47


C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)

Proprietary funds are used to account for activities that are similar to those often found in the private

sector. The measurement focus is upon determination of net income and capital maintenance.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating

revenues and expenses generally result from providing services and producing and delivering goods in

connection with the proprietary fund’s principal, on-going operations. The principal operating revenues

of the District’s proprietary fund are food-service charges. Operating expenses for the District’s

proprietary fund include food-production costs, supplies, administrative costs, and depreciation on capital

assets. All revenues or expenses not meeting these classifications are reported as non-operating revenues

and expenses. The District allocates certain building-related costs, such as extermination and custodial

fees, to the Food Service Fund.

The District maintains the following fiduciary fund type:

Agency Fund - Student Activities - The Student Activities Fund accounts for assets held by the

District as an agent for various student groups.

The Student Activities Fund accounts for the resources authorized by Section 511 of the Public School

Code of 1949 for school publications and organizations. A portion of this fund is an agency fund which

is separate from other agency funds because of legal requirements. Agency funds are custodial in nature

(assets equal liabilities) and do not involve measurement of results of operations. Agency funds are also

accounted for using the accrual basis of accounting.

D. Budget and Budgetary Accounting

The School Board approves, prior to the beginning of each year, an annual budget on the modified-

accrual basis for the General Fund. This is the only fund for which a budget is required and for which

taxes may be levied. The General Fund is the only fund that has an annual budget that has been legally

adopted by the School Board. The School Board does not legally adopt the Food Service Fund budget;

however, it is approved. The Public School Code allows the School Board to authorize budget-transfer

amendments during the last nine months of each fiscal year.

The School District may not legally exceed the revised budget amounts by function and object. Function

is defined as a program area such as instructional services, and object is defined as the nature of the

expenditure such as salaries or supplies. Amendments require the School Board’s approval. All

appropriations lapse at the end of each fiscal year.



48


E. Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Fund Balance

Cash and Cash Equivalents: For purposes of the Statement of Cash Flows presented for the proprietary

fund, the District considers all highly-liquid investments with maturities of three months or less when

purchased to be cash equivalents.

Investments: Investments are stated at fair value.

Inventories: Inventories in the proprietary fund are generally presented at the lower of cost or market on a

first-in, first-out basis, and are expensed when used. Inventories consist of certain government-donated

commodities which were valued at estimated fair market value, as well as purchased commodities and

supplies.

Prepaid Expenses: Certain payments to vendors reflect costs applicable to future accounting periods and

are recorded as prepaid expenses (consumption method) in both the government-wide and fund financial

statements.

Capital Assets and Depreciation: Capital assets; which include property, plant and equipment, and

infrastructure assets; are reported in the applicable governmental or business-type activities column in the

government-wide financial statements. Capital assets are capitalized in accordance with board policy at

the discretion of management. Management considers various factors in the capitalization of assets,

including the assets’ estimated useful lives, costs, and the extents to which the assets are part of larger

capital projects. The established procedures state that individual assets with costs greater than $2,500 and

group assets costing greater than $10,000 are to be capitalized. Buildings and land improvements are

capitalized at a cost of $25,000 or greater, and modular classrooms are capitalized at $10,000. The

donated capital assets are recorded at their estimated fair market values on the dates of donation.

The costs of normal maintenance and repairs that do not add to the values of the assets or materially

extend assets’ lives are not capitalized.

Depreciation is provided for capital assets on the straight-line basis over the following estimated useful

lives:

Governmental Business-Type

Activities Activities

Land improvements 20 N/A

Buildings and improvements 15-50 N/A

Machinery and equipment 5-20 5-20

Estimated Lives ( in years)

Deferred Outflows of Resources - Deferred amounts on refunding debt: The District recognizes the

difference between the re-acquisition price and the net carrying amount of the old debt as a deferred

outflow which is a component of interest expense over the remaining life of the old or new debt,

whichever is shorter.



49



(Continued)

Long-Term Obligations: In the government-wide financial statements, and proprietary fund types in the

fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the

applicable governmental or business-type activities columns in the Statement of Net Position. Bond

premiums and discounts are deferred and amortized over the lives of the related bonds.

In the fund financial statements, governmental-fund types recognize bond premiums and discounts during

the current period. The face amount of the debt issued is reported as other financing sources. Issuance

costs, whether or not withheld from the actual debt proceeds received, are reported as debt-service

expenditures.

Compensated Absences: The District provides for the accumulation and payout of sick pay upon the

retirement of employees who retire under the terms of the District’s collective-bargaining agreements.

Teachers, administrators, and support employees are eligible to receive a per-diem amount for all

accumulated sick days.

Post-Employment Benefits: In the government-wide financial statements, the District recognizes the

costs and liabilities associated with post-employment benefits other than pension compensation, which is

funded through the District’s contribution to the statewide Public School Employees’ Retirement System,

a governmental, cost-sharing, multiple-employer defined-benefit pension plan. The District provides

retiree health, and dental-care benefits, including prescription-drug coverage, to eligible, retired

employees and qualified spouses/beneficiaries. The District has estimated the cost of providing these

benefits through an actuarial valuation.

Derivative Financial Instruments: Derivative instruments used by the District are swap contracts that

have a variable or fixed payment based on the price of an underlying interest rate or index. Hedging

derivative instruments is used to reduce financial risks, such as offsetting increases in interest costs by

offsetting changes in cash flows of the debt, the hedged item. At year-end, these derivative instruments

are evaluated to determine if the derivative instruments are effective in significantly reducing the

identified financial risk. If the derivative instrument is determined to be an effective hedge, its fair value

is an asset or liability with a corresponding debit or credit to deferred outflows or inflows on the

Statement of Net Position. Deferred outflows or inflows constitute changes in fair value of effectively-

hedged derivative instruments. This account is neither an asset nor a liability. If the derivative

instruments are determined to be ineffective or when there is no item to be hedged, the derivative

instruments are considered to be investment derivatives; their fair values are either assets or liabilities on

the Statement of Net Position, and the changes in their fair values are recognized against investment

income in the Statement of Activities.

Interfund Transfers: Advances between funds that are not expected to be repaid are accounted for as

transfers. In those cases when repayment is expected, the advances are accounted for through the various

“due from” and “due to” accounts. Transactions and balances between governmental activities have been

eliminated in the government-wide financial statements. Residual amounts due between governmental

and business-type activities are indicated on the Statement of Net Position as internal balances.



50



(Continued)

Deferred Inflows of Resources - Unearned revenues: The District recognizes property tax revenues when

they become available. Available includes those property taxes expected to be collected within sixty days

after year-end. Those property taxes expected to be collected beyond sixty days after year-end are shown

as deferred revenue in the fund financial statements. Governmental funds also defer revenues in

connection with resources that have been received, but not yet earned.

Fund Balance

The School District’s fund balance classifications are defined and described as follows:

Nonspendable: Represents fund balance amounts that cannot be spent because they are not in a

spendable form or are contractually required to be maintained intact.

Restricted: Represents fund balance amounts that are constrained for a specific purpose through

restrictions of external parties, through constitutional provisions, or by enabling legislation.

Committed: Represents fund balance amounts that can only be used for specific purposes pursuant to

the constraints imposed by the Board of School Directors, the District’s highest level of decision-

making authority. A formal vote by the Board of School Directors is required to impose funds as

committed, as well as to modify or rescind previously-committed funds.

Assigned: Represents fund balance amounts that are constrained by the government’s intent to be used

for a specific purpose but are neither restricted nor committed. Through Board Policy 620, the Board

has delegated the authority to express intent to the District’s Business Manager.

Unassigned: Represents fund balance amounts that have not been restricted, committed, or assigned to

specific purposes within the General Fund. A negative, unassigned fund balance may be reported in

other governmental funds if expenditures incurred for specific purposes exceeded the amounts

restricted, committed, or assigned to those purposes.

The District has a board policy which prescribes fund balance guidelines. The District will strive to

maintain an assigned and unassigned general fund balance of not less than 5 percent and not more than 8

percent of budgeted expenditures for that year.

When expenditures are incurred for purposes for which both restricted and unrestricted (committed,

assigned, or unassigned) amounts are available, the District will reduce the committed balance first,

followed by the assigned balance, and then by the unassigned balance.

Restricted Net Position: This classification consists of certain assets which were restricted for specific

purposes by law, through constitutional provisions, or enabling legislation.

Use of Estimates: Management uses estimates and assumptions in preparing financial statements. These

estimates and assumptions affect the reported amounts of assets and liabilities and the reported revenues

and expenditures.



51



(Continued)

Implementation of New Accounting Principle: GASB issued Statement No. 63, Financial Reporting of

Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position, which provides

financial-reporting guidance for deferred outflows and inflows of resources. The requirements of this

statement improve financial reporting by standardizing the presentations of deferred outflows and inflows

of resources and their effects on the government’s net position. This standard was adopted for fiscal year

ended June 30, 2013. The adoption of this statement reclassified Net Assets to Net Position, and

identified two new elements as components of the Statement of Net Position

GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, sets forth criteria to

properly classify previously-reported assets and liabilities as deferred outflows or inflows of resources or

to recognize certain items that were previously reported as assets and liabilities as outflows or inflows of

resources. The standard was issued in March 2012 and is effective for the period beginning after

December 15, 2012. This standard was adopted for year ended June 30, 2013.

Subsequent Events: In preparing these financial statements, the District has evaluated events and

transactions for potential recognition or disclosure through November 12, 2013, the date the financial

statements were available to be issued.

Note 2. Deposits and Investments

Deposits and Investments

Under Section 440.1 of the Public School Code of 1949, as amended, the District is permitted to invest

funds consistent with sound business practices in the following types of investments:

● U.S. Treasury Bills

● Short-term obligations of the U.S. Government or its agencies or its

Instrumentalities

● Deposits in savings accounts or time deposits or share accounts of institutions insured by either:

1. The Federal Deposit Insurance Corporation (FDIC), or

2. The Federal Savings and Loan Insurance Corporation (FSLIC), or

3. The National Credit Union Share Insurance Fund (NCUSIF)

to the extent that such accounts are so insured, and for any amounts above

maximum insurable limits, provided that approved collateral, as provided by law,

shall be pledged by the depository

● Obligations of (a) the United States of America or its agencies or instrumentalities backed by

the full-faith and credit of the United States of America, and (b) the Commonwealth of

Pennsylvania or instrumentalities thereof backed by the full-faith and credit of these political

subdivisions

● Shares of investment companies whose investments are restricted to the above categories



52

Note 2. Deposits and Investments (Continued)

The deposit and investment policies of the District adhere to state statutes and prudent business practices.

There were no deposit or investment transactions during the year that violated either state statutes or

District policies.

Deposits: Custodial-Credit Risk

Carrying Bank Financial

Amount Balance Institution

Insured (FDIC) $ 14,934 $ 14,934 Citizens Bank

Insured (FDIC) 5,247 5,427 People's Bank

Insured (FDIC) 250,000 250,000 Susquehanna Bank

Insured (FDIC) 250,000 250,000 PNC Bank

Uninsured, collateralized in accordance

with Act 72 14,370,049 16,141,484 Susquehanna Bank

Uninsured, collateralized in accordance

with Act 72 2,843,569 2,843,569 PNC Bank

$ 17,733,799 $ 19,505,414

Act 72 is an act standardizing the procedures for pledges of assets to secure deposits of public funds with

banking institutions pursuant to other laws; establishing a standard rule for the types, amounts and

valuations of assets eligible to be used as collateral for deposits of public funds; permitting assets to be

pledged against deposits on a pooled basis and authorizing the appointment of custodians to act as the

pledgors of the assets.

Investments

As of June 30, 2013, the District had the following investments:

Weighted-Avg

Maturities Fair Values

Pennsylvania School District Liquid Asset Fund (PSDLAF) 51 days 2,183,427 $

M&T Bank - Federated Treasury Obligations 52 days 299,107

2,482,534 $



53

Note 2. Deposits and Investments (Continued)

Portfolio Assets

PSDLAF - This fund invests in U.S. treasury securities, U.S. government securities, its agencies and

instrumentalities, and repurchase agreements, collateralized by such securities and contracted with highly-

rated counterparties. Weighted-average portfolio maturity for the fund is expected to be kept at or below

60 days. The District’s position in the investment pool is presented at fair value. PSDLAF is not subject

to any regulatory oversight.

Weighted-Average Maturity

The weighted-average maturity (WAM) method expresses investment time horizons - the time when

investments become due and payable - in years or months, weighted to reflect the dollar-size of individual

investments within an investment type. WAMs are computed for each investment type. The portfolio’s

WAM is derived by dollar-weighting the WAM for each investment type.

Interest-Rate Risk

The District does not have a formal investment policy that limits investment maturities as a means of

managing its exposure to fair-value losses arising from increasing interest rates.

Credit Risk

As indicated above, Section 440.1 of the Public School Code of 1949, as amended, limits the composition

of the District’s investments, and the District has no investment policy that would further limit its

investment choices. As of June 30, 2013, the District’s investments in PSDLAF and in Federated

Treasury Obligations were rated AAAm by Standard & Poor’s.

Concentrations-of-Credit Risk

The District places no limit on the amounts invested in any one issuer. The District’s investments in

PSDLAF represent 87.76% of the District’s total investments.



54

Note 3. Taxes Receivable, Deferred Inflows of Resources and Estimated Uncollectible Taxes

Summaries of taxes receivable and related accounts of the General Fund at June 30, 2013, are as

follows:

Amount

Uncollected taxes - Real Estate 1,264,098 $

Taxes to be collected within 60 days 219,571 $

Deferred inflow of resources - delinquent taxes 1,044,527

1,264,098 $

Deferred Inflow of Resources

Delinquent taxes 1,044,527 $

Total Deferred Inflow of Resources 1,044,527 $

Note 4. Intergovernmental Receivables

Amounts due from other governments represent receivables for revenues earned by the District. At

June 30, 2013, the following amounts are due from other governmental units:

General Proprietary

Fund Fund

PA Department of Education

Social Security 200,382$ -$

Retirement 634,574 -

Rental 31,108 -

York Adams Tax Bureau - EIT 248,138 -

Mainstreaming for various LEA's 172,013 -

County of York - Realty Transfer Tax 62,362 -

Federal Subsidies - Title I 91,585 -

Federal Subsidies - Title II 29,479 -

Federal Subsidies - Title III 2,227 -

Federal Subsidies - ACCESS 2,215 -

Federal Subsidies - Food Program - 9,267

State Subsidies - Food Program - 861

1,474,083$ 10,128 $



55

Note 5. Internal Balances and Interfund Transfers

Individual fund receivable and payable balances at June 30, 2013, are as follows:

Interfund Interfund

Fund Receivables PayablesGovernmental Funds

General 87,726 $ -$

Total Governmental 87,726 -

Proprietary Fund

Food Service - 87,726

87,726 $ 87,726 $

The outstanding balances between these funds result mainly from time lags between the dates that the

goods and services are provided, the transactions are recorded in the accounting system and when

payments are made. The Food Service Fund Payable consists of chargebacks for utilities and services,

salaries and a loan from the General Fund. That balance is expected to be collected in the subsequent

year.

Individual fund transfers during the fiscal year ended June 30, 2013, are as follows:

Fund Transfers In Transfers Out

Governmental Fund Types

General -$ 419,773 $

Capital Projects 380,000 -

Total Governmental Fund Types 380,000 419,773

Proprietary Fund Types

Food Service 39,773 -

419,773 $ 419,773 $

Transfers and payments within the District are substantially for the purposes of subsidizing operating

functions, funding capital projects, and asset acquisitions. Resources are accumulated in a fund to support

and simplify the administration of various projects or programs. For the year ended June 30, 2013,

amounts were transferred to the Capital Projects Fund to fund various future improvements and

acquisitions and transferred to the Food Service Fund for the payment of unemployment compensation for

former employees of the District.



56

Note 6. Property Taxes

Based upon assessed valuations provided by York County, the municipal tax collector bills and collects

property taxes on behalf of the District. The schedule for property taxes levied for 2012-2013, is as

follows:

July 13, 2012 Tax Levy Date

Through September 13, 2012 2% Discount

Through November 13, 2012 Face payment period

Starts November 14, 2012 10% Penalty Period

January 1, 2013 Lien Filing Date

The District’s tax rate for all purposes in 2012-2013, was 22.26 mills ($22.26 per $1,000 assessed

valuation). Refunds on payments of prior-year taxes are classified as Other Debt Service items under the

Commonwealth of Pennsylvania accounting system.



57

Note 7. Capital Assets

Capital asset activity for the year ended June 30, 2013, was as follows:

July 1, June 30,

2012 Increases Decreases 2013


Capital assets not being depreciated

Land $ 4,310,857 -$ -$ $ 4,310,857

Construction-in-progress 11,498 254,669 (236,445) 29,722

Total capital assets not being

depreciated 4,322,355 254,669 (236,445) 4,340,579

Capital assets being depreciated

Buildings and building improvements 146,357,481 236,445 - 146,593,926

Furniture and equipment 19,408,656 859,007 (1,038,407) 19,229,256

Total capital assets being depreciated 165,766,137 1,095,452 (1,038,407) 165,823,182

Less accumulated depreciation

Buildings and building improvements 29,475,062 3,302,456 - 32,777,518

Furniture and equipment 13,641,177 1,831,703 (1,028,670) 14,444,210

Total accumulated depreciation 43,116,239 5,134,159 (1,028,670) 47,221,728

Total capital assets being

depreciated, net 122,649,898 (4,038,707) (9,737) 118,601,454

Total Governmental Activities,

Capital Assets - Net 126,972,253 $ (3,784,038) $ (246,182) $ 122,942,033 $


Capital assets being depreciated,

equipment 427,943 $ -$ -$ 427,943 $

Less accumulated depreciation

for equipment 147,719 44,354 - 192,073

Total Business-Type Activities,

Capital Assets - Net 280,224 $ (44,354) $ -$ 235,870 $



58

Note 7. Capital Assets (Continued)

Depreciation expense was charged to the functions/programs of the District as follows:

Amount


Instruction 3,843,863 $

Instructional student support 352,178

Administration and financial support 584,948

Operation and maintenance of plant services 240,711

Pupil transportation 6,152

Student activities 100,465

Community services 5,842

Total Governmental Activities 5,134,159


Food Service 44,354

Total Primary Government 5,178,513 $



59

Note 8. Long-Term Obligations

A summary of the reporting entity’s long-term obligations as of June 30, 2013, and transactions during

the year then ended follows:

July 1, June 30, Due within

2012 Increases Decreases 2013 one yearGeneral Long-Term Obligations

General Obligation Bonds/Notes

Series of 2010A 1,895,000 $ -$ 940,000 $ 955,000 $ 955,000 $

Series of 2010B 1,380,000 - 330,000 1,050,000 340,000

Series of 2011AA 11,750,000 - 430,000 11,320,000 420,000

Series of 2012 72,865,000 72,865,000 - -

Series of 2013 - 57,015,000 - 57,015,000 57,015,000

Series of 2013A - 10,885,000 - 10,885,000 5,000

Bond premium (discounts), net

of amortization 1,512,309 1,565,863 918,745 2,159,427 676,420

Total bonds payable 89,402,309 69,465,863 75,483,745 83,384,427 59,411,420

Pay-fixed, interest-rate swap liability 3,186,876 - 937,797 2,249,079 -

Lease-purchase obligations 72,733 - 53,582 19,151 8,861

Compensated absences 1,627,501 178,774 162,720 1,643,555 22,782

Other post-employment benefits 631,533 1,461,330 800,251 1,292,612 -

Total General Long-Term Obligations 94,920,952 $ 71,105,967 $ 77,438,095 $ 88,588,824 $ 59,443,063 $

General Obligation Bonds - Series A of 2010 - On March 23, 2010, the District issued General

Obligation Bonds - Series A of 2010 in the principal amount of $4,360,000. The proceeds of the bonds

are being used to refund the General Obligation Bonds - Series of 2004. The bonds bear annual interest

rates ranging from 1.00% to 2.00%. Interest is payable semi-annually, and the bonds mature serially in

amounts ranging from $645,000 to $955,000 through 2014. The economic gain on the refunding of the

2004 Bonds was $148,230.

General Obligation Bonds - Series B of 2010 - On July 14, 2010, the District issued General Obligation

Bonds - Series B of 2010 in the principal amount of $1,710,000. The proceeds of the bonds are being

used to fund the costs of design and construction of roof replacements to the York County School of

Technology. The bonds bear annual interest rates ranging from 1.00% to 3.50%. Interest is payable

semi-annually, and the bonds mature serially in amounts ranging from $330,000 to $360,000 through

2015.

General Obligation Notes - Series AA of 2011 - On March 30, 2011, the District issued General

Obligation Notes - Series AA of 2011 in the principal amount of $12,160,000. The proceeds of the

notes are being used to refinance the General Obligation Bonds - Series of 2006. The notes bear annual

interest rates ranging from .70% to 5.00%. Interest is payable semi-annually and on the date of

maturity. The notes mature serially in amounts ranging from $140,000 to $4,850,000 through 2019.

There was no economic gain or loss on this transaction, and the future-debt service requirements cannot

be determined as the 2006 General Obligation Bonds were variable-rate instruments.



60

Note 8. Long-Term Obligations (Continued)

General Obligation Notes - Series of 2012 - On March 30, 2012, the District issued General Obligation

Notes - Series of 2012 in the principal amount of $72,865,000. The proceeds of the notes are being

used to refinance the General Obligation Bonds - Series of A of 2011, which was due to be paid in full

on April 15, 2013. The notes bear interest at annual rates that shall not exceed 6.00%; the initial rate

is 1.50%. Interest is payable quarterly and on the date of maturity. There was no economic gain or

loss on this transaction. On March 30, 2013, the District issued General Obligation Bonds - Series of

2013 and Series A of 2013 to refinance this obligation.

General Obligation Notes - Series A of 2013- On March 30, 2013, the District issued General

Obligation Notes - Series of A of 2013 in the principal amount of $10,885,000. The proceeds of the

notes are being used to refinance the General Obligation Bonds - Series of 2012, which were due to be

paid in full on April 15, 2013. The notes bear interest rates that shall not exceed 4.00%; the initial rate

is 0.45%. Interest is payable semi-annually and on the date of maturity.

General Obligation Notes - Series of 2013 - On March 30, 2013, the District issued General Obligation

Notes - Series of 2013 in the principal amount of $57,015,000. The proceeds of the notes are being

used to refinance the General Obligation Bonds - Series of 2012, which was due to be paid in full on

April 15, 2013. The notes bear interest at annual rates that shall not exceed 6.00%; the initial rate is

1.25%. Interest is payable quarterly and on the date of maturity.

There were no economic gains or losses on the foregoing 2013 refinancing transactions. As explained

in Note 13, the District intends to refinance the 2013 debt prior to the scheduled maturity dates;

therefore, any expected cost-savings may not be realized. Each year, it is the District’s intent to

refinance the debt that is hedged by pay-fixed, interest-rate swaps until the swap-termination dates of

February 1, 2018 and May 1, 2020.

The future debt-service requirements of the fixed and variable general obligation long-term debt are as

follows, assuming current rates:

Years Principal Interest Total

2013-2014 58,735,000 $ 1,643,374 $ 60,378,374 $

2014-2015 1,825,000 885,253 2,710,253

2015-2016 1,860,000 819,248 2,679,248

2016-2017 1,530,000 757,810 2,287,810

2017-2018 1,565,000 681,628 2,246,628

2019-2021 15,710,000 1,065,950 16,775,950

81,225,000 $ 5,853,263 $ 87,078,263 $

All debt-service payments for general obligation notes and bonds are funded by the General Fund. As

required by the Pennsylvania Department of Education Financial Accounting and Reporting Manual,

debt-issuance costs are reported on the Statement of Revenues, Expenditures, and Changes in Fund

Balances as Support Services.

The District has no outstanding, in-substance defeased debt.



61


Prior Period Adjustment - GASB Statement No. 65 Implementation

Implementation of GASB Statement No. 65 recognizes costs of debt issuances as expenses in the

periods of debt issuances; therefore, the adoption of this statement resulted in corresponding decreases

of bond-issuance costs and net position of $327,939 as of July 1, 2012.

The unrealized losses on debt refinancing were reclassified from bonds payable to deferred outflows of

resources.

Swap Payments and Associated Debt

As of June 30, 2013, debt-service requirements of the pay-fixed, interest-rate swap payments, assuming

current interest rates remain constant, were as follows.

Year Principal Interest Swaps, net Total

2013-2014 57,015,000 $ 688,844 $ 867,500 $ 58,571,344 $

2014-2015 - - 729,920 729,920

2015-2016 - - 585,240 585,240

2016-2017 - - 433,093 433,093

2017-2018 - - 272,926 272,926

2019-2021 - - 108,909 108,909

57,015,000 $ 688,844 $ 2,997,588 $ 60,701,432 $

Variable-Rate Bonds

The fair value of the interest-rate swap liability is presented in the Government-Wide Statement of Net

Position.



62


Lease-Purchase Obligations

The District has entered into lease agreements as the lessee for financing the acquisitions of computer

software and hardware, and vehicles. These lease agreements qualify as capital leases for accounting

purposes, and therefore, the related assets and liabilities have been recorded at the present values of their

respective future minimum lease payments as of the inception dates.

The assets acquired through capital leases are as follows:

Amount

Asset:

Vehicles 42,090 $

Less: Accumulated Depreciation (14,907)

Total Buildings and Improvements 27,183 $

Furniture and Equipment 168,064 $

Less: Accumulated Depreciation (166,510)

Total Furniture and Equipment 1,554 $

The future minimum lease obligations and the net present values of these minimum lease obligations as

of June 30, 2013, were as follows:

Years Amount

2013-2014 9,875 $

2014-2015 9,875

2015-2016 822

Total minimum lease payments 20,572

Less: amount representing interest (1,421)

Total present value of net minimum lease payments 19,151 $



63


Operating Leases

The District leases copiers and printers under non-cancelable operating leases. Total costs for the leases

were $190,227 for the year ended June 30, 2013. The future minimum lease payments for these leases

are as follows:

Years Amount

2013-2014 164,990 $

2014-2015 164,450

2015-2016 164,450

2016-2017 130,190

Total minimum lease payments 624,080 $

Compensated Absences

The District’s administrators and support staff are granted vacation time in varying amounts depending

on their years of service. Accumulated vacation days from one fiscal year shall be used by December

31st of the following year unless an extension is granted by the Superintendent. Unused accumulated

vacation days are transferred to sick leave.

The District allows employees to accumulate their unused sick leave as specified in negotiated labor

contracts, the support staff handbook and the administrative compensation plan. Sick leave used is

based on the last-in, first-out (LIFO) method. Twelve-month employees are granted twelve sick days

per year. Support staff and DAEA-eligible staff working ten months per year are granted ten days.

Part-time employees are granted sick days based on the number of hours/days worked.

Upon retirement, accumulated sick leave is paid out of the General Fund as follows:

Administrators: Upon meeting normal retirement standards as set forth by PSERS, 25% over the

DAEA-contract rate as long as policy provisions are met, or $62.50 a day for 2012-2013.

DAEA-eligible staff and support staff: Upon meeting normal retirement standards as set forth by

PSERS, or $50.00 a day for 2012-2013.

Superannuation retirees with twenty years, but less than normal retirement as set forth by PSERS, shall

receive 75% of the amounts detailed above.

Compensated absences totaling $22,782 are due within one year due to retirements of staff during the

year ended June 30, 2013.

All compensated absences are funded by the General Fund.



64

Note 9. Affiliates

York County School of Technology (YCST)

York County School of Technology is a separate legal entity. The YCST provides vocational, technical

and career education to the students in its participating School Districts. The District is one of fourteen

member school districts of the YCST. Member school districts are responsible for funding the major

portion of YCST’s operating budget. The District’s financial obligation to YCST for the year ended

June 30, 2013, was $1,647,375 which has been reported in the General Fund. YCST has separate

financial statements available for further review of financial standing.

During 2010-2011, the District issued General Obligation Bonds - Series B of 2011, in the aggregate

amount of $1,710,000 for the purpose of providing funds to the YCST for the purposes of designing and

constructing roof replacements at the YCST. The debt-service on these bonds will be paid by the

member school districts to the YCST. Accordingly, the District has recorded a long-term receivable on

its government-wide Statement of Net Position to reflect the total amount due. The remaining principal

payments are scheduled to be made as follows.

Years Amount

2013-2014 340,000 $

2014-2015 350,000

2015-2016 360,000

1,050,000 $

The District anticipates, based on current enrollment, when it will make payments to the YCST to assist

in the funding of this debt-service.

Years Amount

2013-2014 43,868 $

2014-2015 43,926

2015-2016 43,904

131,698 $



65

Note 9. Affiliates (Continued)

York County School of Technology Authority

The District is also a member of the York County School of Technology Authority (Authority). The

Authority was created as a financing medium for construction, improvement and maintenance relative to

the operation of the York County School of Technology.

The Authority issued Lease Revenue Bonds - Series of 2007, in the aggregate amount of $42,330,000

for the purpose of providing funds for the advance refunding of the Authority’s Lease Revenue Bonds -

Series of 2003 and to pay for the costs of the bonds’ issuance. The Lease Revenue Bonds - Series of

2003, were used to pay for the costs of design and construction improvements, renovations and

extraordinary repairs to and the acquisition and installation of related equipment for the facilities of

York County School of Technology. The District is required, under terms of the lease, to pay lease

rentals in connection with the Lease Revenue Bonds - Series of 2003, as follows:

Years Amount

2013-2014 454,662 $

2014-2015 454,324

2015-2016 454,686

2016-2017 453,854

2017-2018 453,824

2019-2023 2,271,115

4,542,465 $

The District’s financial obligation to the Authority for the year ended June 30, 2013, was $497,787

which has been reported in the General Fund. The Authority has separate financial statements available

for further review of financial standing.



66

Note 10. Defined-Benefit Pension Plan

Plan Description

Name of plan: The Public School Employees’ Retirement System (the System)

Type of plan: Governmental, cost-sharing, multiple-employer defined-benefit plan

Benefits: Retirement and disability, legislatively-mandated ad hoc cost-of-living adjustments, healthcare

insurance-premium assistance to qualifying annuitants

Authority: The Public School Employees’ Retirement Code (Act No. 96 of October 2, 1975, as amended)

(24 Pa. C.S. 8101-8535)

Annual Financial Report: The System issues a Comprehensive Annual Financial Report (CAFR) that

includes financial statements and required supplementary information for the plan. A copy of the report

may be obtained by writing to Diane J. Wert, Office of Financial Management, Public School Employees’

Retirement System, P.O. Box 125, Harrisburg, PA 17108-0125. The CAFR is also available on the

Publications page of the PSERS website at http://www.psers.state.pa.us/publications/general/cafr.htm.

Funding Policy

Authority: The contribution policy is established in the Public School Employees’ Retirement Code and

requires contributions by active members, employers, and the Commonwealth.

Contribution Rates

Member Contributions: Active members who joined the System prior to July 22, 1983, contribute at

5.25% (Membership Class T-C) or at 6.50% (Membership Class T-D) of the members’ qualifying

compensation. Members who joined the System on or after July 22, 1983, and who were active or

inactive as of July 1, 2001, contribute at 6.25% (Membership Class T-C) or at 7.50% (Membership Class

T-D) of the members’ qualifying compensation. Members who joined the System after June 30, 2001 and

before July 1, 2011, contribute at 7.50% (automatic Membership Class T-D). For all new hires and for

members who elected Class T-D membership, the higher contribution rates began with service rendered

on or after January 1, 2002. Members who joined the System after June 30, 2011, automatically

contribute at the Membership Class T-E rate of 7.50% (base rate) of the members’ qualifying

compensation. All new hires after June 30, 2011, who elect Class T-F membership, contribute at 10.30%

(base rate) of the members’ qualifying compensation. Membership Class T-E and T-F are affected by a

“shared risk” provision in Act 120 of 2010 that in future fiscal years could cause the Membership Class

T-E contribution rate to fluctuate between 7.50% and 9.50% and Membership Class T-F contribution rate

to fluctuate between 10.30% and 12.30%.

Employer Contributions: Contributions required of employers are based upon an actuarial valuation. For

fiscal year ended June 30, 2013, the rate of employers’ contributions was 12.36% of covered payroll. The

12.36% rate is composed of a pension contribution rate of 11.50% for pension benefits and 0.86% for

healthcare insurance-premium assistance.

http://www.psers.state.pa.us/publications/general/cafr.htm



67

Note 10. Defined-Benefit Pension Plan (Continued)

The School District is required to pay the entire contribution and will be reimbursed by the

Commonwealth in an amount equal to the Commonwealth’s share as determined by the income-aid ratio

(as defined in Act 29 of 1994), which is at least one-half of the District’s total rate. The District's

contributions to the Plan, net of state-aid reimbursements, for the years ended June 30, 2013, 2012, and

2011, were $2,960,126, $2,093,295, and $1,488,691, respectively. These amounts are equal to the

required contributions for each year. The District’s contributions are funded and paid through the

District’s General and Food Service Funds.

The amount recognized for revenues and expenses for on-behalf payments relating to fringe benefits for

the year ended June 30, 2013, was $4,670,598.

This includes $1,740,472 to the Federal government for social security and Medicare taxes for the year

ended June 30, 2013. The School District pays these on-behalf payments directly to PSERS, and the

District is reimbursed by the Commonwealth for its appropriate share.



68

Note 11. Other Post-Employment Benefits

The District maintains a single-employer, post-employment, defined-benefit healthcare plan. The plan

description and funding policy for the District is summarized in the chart below:

GROUP ELIGIBILITY COVERAGE AND PREMIUM SHARING DURATION

II. TEACHERS

Act 110/43 Benefit: All employees are eligible for this benefit upon retirement with 30 years of PSERS service or upon superannuation retirement (age

60 with 30 years of service, age 62 with 1 year of service, or 35 years of service regardless of age). Retired employees are allowed to continue coverage

for themselves and their dependents in the employer's group health plan until the retired employee reaches Medicare age. In order to obtain coverage,

retired employees must provide payment equal to the premium determined for the purpose of COBRA.

Notes:

III. SUPPORT STAFF

I. ADMINISTRATORS

Same as IA.

Same as IA.

Upon completion of 20 years

of PSERS service or Act 110-

43 eligibility.



43 eligibility.

Coverage is provided until

retirees are eligible for Medicare

or until retirees die, whichever is

earlier. Spousal coverage ends

with Spousal-Medicare eligibility

if earlier than above.

Coverage: Medical, Prescription-Drug, and Dental coverage for Retiree.

Premium Sharing: If the member completes 20 years of PSERS service, the member

may elect one of the two benefits below, otherwise Act 110-43 benefits apply (see

Notes):

If PP01 is elected: The District pays 80% of the single premium for medical and

prescription drug plus an additional 2% for each year of service above 20 years, up to

100% with 30 or more years of service. The retiree pays any remaining amount.

If PP02 is elected: The District pays the single premium for medical and prescription

drug. The retiree pays $150 per month (beginning at 7/1/2012).

The District also pays 100% of the single-dental premium.

Spousal Coverage: Available if paid by retiree



may elect one of the two benefits below, otherwise Act 110-43 benefits apply (see

Notes):


prescription drug plus an additional 4% for each year of service above 20 years, up to

100% with 35 or more years of service. The District's contribution is capped at $4,000

per year. The retiree pays any remaining amount.


drug. The retiree pays $150 per month (beginning at 7/1/2012).

The retiree may elect dental coverage by paying the full premium.

Spousal Coverage: Available if paid by retiree



may elect one of the two benefits below, otherwise Act 110/43 benefits apply (see

Notes):


prescription drug. If the retiree has 30 years of service upon retirement, the District

will pay 100% of the single premium for medical and prescription drug. The District

contribution is capped at $4,000 per year. The Retiree pays any remaining amount.


drug. The Retiree pays $150 per month (beginning at 7/1/2012).

The Retiree may elect dental coverage by paying the full premium.

Spousal Coverage: Available if paid by Retiree



43 eligibility.

Retired employees who elect coverage remit payments quarterly as calculated by the Business Office. For the

year ended June 30, 2013, the retiree-premiums paid by the District were $561,729.



69

Note 11. Other Post-Employment Benefits (Continued)

Funding Policy

The contribution requirements of plan members are established by contractual obligations and may be

amended by the Board of School Directors. Required contributions are based on projected pay-as-you-go

financing requirements. Plan members receiving benefits contributed $295,437 through their required

monthly contributions. Costs related to the funding of the District’s OPEB obligation are budgeted and

paid for through the District’s General Fund.

Annual OPEB Cost

For 2013, the District funded 54.76% of its annual OPEB cost of $1,461,330 for the District’s employees.

The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net

OPEB obligation for 2013 and the preceding years are as follows:

Percentage of

Annual Annual OPEB Cost Net OPEB

Fiscal Year Ended OPEB Cost Contributed Obligation

6/30/2011 829,985 $ 84.00% 546,394 $

6/30/2012 827,810 $ 90.00% 631,533 $

6/30/2013 1,461,330 $ 55.00% 1,292,612 $

Funding Progress

For the year ended June 30, 2013, the District has estimated the cost (annual expense) of providing retiree

health, and dental-care benefits through an actuarial valuation as of January 1, 2012. In accordance with

GASB Statement No. 45, the valuation computes an annual required contribution, which represents a

level of funding that, if paid on an on-going basis, is projected to cover normal cost each year and

amortize any unfunded actuarial liabilities over a period of thirty years. This valuation’s computed

contribution and actual funding are summarized as follows:

Amount

Annual required contribution 1,471,682 $

Interest on Net OPEB Obligation 28,419

Adjustment to ARC (38,771)

Annual OPEB cost 1,461,330

Amounts contributed

Payments of current premiums and claims (800,251)

Advance funding -

Increase in net OPEB obligation 661,079

OPEB obligation - beginning of the year 631,533

OPEB obligation - end of year 1,292,612 $



70

Note 11. Other Post-Employment Benefits (Continued)

The required schedule of funding progress immediately following the notes to the financial statements

presents information about whether the actuarial value of plan assets is increasing or decreasing relative

to the actuarial accrued liability for benefits.

The annual OPEB cost, the percentage contributed to the plan, and the net OPEB obligation for the

current year are as follows:

For Fiscal Year Ended June 30, 2013: Amount

Annual OPEB cost 1,461,330$

Percentage contributed 55%

Net OPEB obligation 1,292,612$

Actuarial Methods and Assumptions

Actuarial valuations of an on-going plan involve estimates of the value of reported amounts and

assumptions about the probability of occurrence of events far into the future. Examples include

assumptions about future employment, mortality, and the health-care cost trend. Amounts are determined

regarding the funded status of the plan, and the annual required contributions of the employer are subject

to continual revision as actual results are compared with past expectations and new estimates are made

about the future.

Projections of benefits for financial-reporting purposes are based on the substantive plan (the plan as

understood by the employer and the plan members) and include the types of benefits provided at the time

of each valuation and the historical pattern of sharing of benefit costs between the employer and plan

members to that point. The actuarial methods and assumptions used include techniques that are designed

to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of

assets, consistent with the long-term perspectives of the calculations.

In the January 1, 2012 actuarial valuation, the Entry-Age Normal Cost Method was used. The actuarial

assumptions include a 4.50% investment rate-of-return (net of administrative expenses), which is a

blended rate of the expected long-term and short-term investment returns on the District’s own assets to

be used for funding the current liability, and an annual health-care cost trend rate of 7.50% initially,

reduced by decrements to an ultimate rate of 5.50% by 2016. Both rates include a 4.50% inflation

assumption. The UAAL is being amortized over a 30-year open period as a level-dollar amount.

A separate, audited, GAAP-basis, post-employment benefit plan report is not issued.

All other post-employment benefits obligations are funded by the General Fund.



71

Note 12. Derivative Financial Instruments

Objective of the Interest-Rate Swaps

As a means to manage interest-rate exposure, the District entered into two separate pay-fixed, interest-rate

swaps in connection with its Series of 1998 and 2000 General Obligation Bonds. The swap contracts

remained in effect after the refunding of the 1998 and 2000 bonds. The intention of the swaps was to

effectively change the District’s variable-interest rates on the bonds to lower synthetic-fixed rates.

Terms, Fair Value and Credit Risk

The terms, fair values, and credit risks of the outstanding swaps as of June 30, 2013, were as follows.

The notional amounts of the swaps matched the principal amounts of the original associated debt rather

than the 2008 Series. The District’s swap agreements contain scheduled reductions to outstanding

notional amounts that are expected to approximately follow scheduled or anticipated reductions in the

associated “bonds payable” category.

Swap

Notional Effective Fixed Rate Variable Rate Fair Termination

Amounts Date Paid Received Values Date

GO Bonds

Series of 2013 18,050,000$ 5/1/2006 3.816% 67% of LIBOR (1,816,399) $ 2/1/2018

GO Bonds

Series of 2013 3,930,000 5/1/2006 3.836% 67% of LIBOR (432,680) 5/1/2020

21,980,000$ (2,249,079) $

For the year ended June 30, 2013, the derivative instruments are considered to be investment derivatives,

with their fair values recorded as noncurrent liabilities on the Statement of Net Position and the changes

in their fair values recognized as components of interest expense in the Statement of Activities. During

the year ended June 30, 2013, $937,797 was recorded as a reduction of interest expense in the Statement

of Activities to reflect the change in fair values of the derivatives from July 1, 2012.



72

Note 12. Derivative Financial Instruments (Continued)

Fair Value

Because interest rates have declined, all swaps had a negative fair value as of June 30, 2013. The

negative fair values may be countered by reductions in total interest payments required under the

variable-rate bonds, creating lower synthetic-fixed interest rates. Because the coupons on the

government’s variable-rate bonds adjust to changing interest rates, the bonds do not have corresponding

fair-value increases. The fair values were estimated using the zero-coupon method. This method

calculates the future net settlement payments required by the swaps, assuming that the current forward

rates implied by the yield curve correctly anticipate future spot-interest rates. These payments are then

discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon bonds due

on the date of each future net settlement on the swaps.

Credit Risk

As of June 30, 2013, the District was not exposed to credit risk because the swaps had negative fair

values. However, should interest rates change and the fair values of the swaps become positive, the

District would be exposed to credit risk in the amount of the derivatives’ fair values.

The swap agreements contain a collateral agreement with the counterparty. The swaps require full

collateralization of the fair values of the swaps should the counterparty’s credit rating fall below A as

issued by Standard & Poor’s Rating Service or A3 as issued by Moody’s Investors Service. Collateral on

all swaps is to be in the form of U.S. Government securities held by a third-party custodian.

The District also enters into master-netting agreements when the District has entered into more than one

derivative transaction with one counterparty.

Under the terms of these agreements, should one party become insolvent or otherwise default on its

obligations, close-out netting provisions permit the non-defaulting party to accelerate and terminate all

outstanding transactions and net the transactions’ fair values so that a single sum will be owed by, or

owed to, the non-defaulting party.

The District has executed two swap transactions with one counterparty. That counterparty is rated AA-

by Standard & Poor’s Rating Service and Aaa by Moody’s Investors Service.

Basis Risk

The swap exposes the District to basis risk should the relationship between the LIBOR BBA and the

variable rates charged on the loan change the synthetic rate on the bonds. The effect of the difference in

basis is indicated by the difference between the intended synthetic rate (3.816% for Series of 1998 Bonds

and 3.836% for Series of 2000 Bonds) and the actual synthetic rate as of June 30, 2013, (4.935% for

Series of 1998 Bonds and 4.955% for Series of 2000 Bonds). If a change occurs that results in the rates

moving to convergence, the expected cost-savings may not be realized.



73

Note 12. Derivative Financial Instruments (Continued)

Tax Risk

Tax risk is a specific type of basis risk. Tax risk is a permanent mismatch between the interest rate paid

on the District’s underlying variable-rate bonds and the rate received on the swap caused by a reduction

or elimination in the benefits of the tax-exemption for municipal bonds (e.g., a tax cut that results in an

increase in the ratio of tax-exempt to taxable yields). The District is receiving 67% of LIBOR (a taxable

index) on the swaps and would experience a shortfall relative to the rates paid on its bonds if marginal

income-tax rates decrease relative to expected levels, thus increasing the overall cost of its synthetic-fixed

rate debt.

Termination Risk

The derivative contracts use the International Swap Dealers Association Master Agreement, which

includes standard termination events, such as a failure to pay and bankruptcy. The District or the

counterparty may terminate the swap if the other party fails to perform under the terms of the contract. If

the swap is terminated, the variable-rate bonds would no longer carry synthetic interest rates. Also, if at

the time of termination the swaps had negative fair values, the District would be liable to the counterparty

for a payment equal to the swaps’ fair values.

Note 13. Commitments and Contingencies

Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets

and errors or omissions. Significant losses are covered by commercial insurance for all major programs.

For insured programs, there have been no significant reductions in settlement coverage. Settlement

amounts have not exceeded insurance coverage for the current year or three prior years.

Grant Programs

The District participates in numerous state and Federal grant programs, which are governed by various

rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject

to audit and adjustment by the grantor agencies; therefore, to the extent that the District has not complied

with the rules and regulations governing the grants, refunds of any money received may be required, and

the collectability of any related receivables at June 30, 2013, may be impaired. In the opinion of the

District, there are no significant contingent liabilities relating to compliance with the rules and regulations

governing the respective grants; therefore, no provision has been recorded in the accompanying financial

statements for such contingencies.



74

Note 13. Commitments and Contingencies (Continued)

Construction Contracts

The District has one active construction contract, completion of the HVAC system at the Intermediate

School, as of June 30, 2013.

At year-end the government's commitments with contractors are as follows:

Project Spent-to-Date

Remaining

Commitment

Intermediate School building, furniture and equipment 59,944,077$ 5,690$

General Obligation Bonds - Series of 2013 and Series A of 2013

The Board of School Directors and the District’s management team anticipate the refinancing of the

General Obligation Bonds - Series of 2013 and Series A of 2013, prior to their maturity on April 16, 2014.

Note 14. Fund Balance Classifications

The District has classified certain portions of the General and Capital Projects Funds’ fund balances as

follows:

General Capital Projects

Fund Fund

Nonspendable, reported in:

Prepaids 40,811 $ -$

Restricted for, reported in:

Capital Projects Fund - 2,562,241

Committed to, reported in:

Health insurance reserve 1,000,000 -

Various high school projects 62,939 -

PSERS reserve 3,642,136 -

Turf Project - 23,459

Assigned, reported in:

Budget utilization for 2013-2014 893,419 -

Athletic Fund 49,449 -

Unassigned, reported in:

General Fund 7,328,576 -

13,017,330 $ 2,585,700 $

REQUIRED SUPPLEMENTARY INFORMATION


REQUIRED SUPPLEMENTARY INFORMATION - OTHER POST-EMPLOYMENT

BENEFIT PLAN


75

Actuarial

Accrued UAAL as a

Actuarial Liability Unfunded Percentage

Actuarial Value of (AAL)- AAL Funded Covered of Covered

Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)

1/1/2008 -$ 6,708,692$ 6,708,692$ 0.00% 37,304,072$ 17.98%

1/1/2010 -$ 7,258,535$ 7,258,535$ 0.00% 43,160,439$ 16.82%

1/1/2012 -$ 11,676,860$ 11,676,860$ 0.00% 42,918,295$ 27.21%

SUPPLEMENTARY INFORMATION

76


GENERAL FUND

SCHEDULES OF REVENUES AND OTHER FINANCING SOURCES - BUDGET TO ACTUAL

FOR THE FISCAL YEAR ENDED JUNE 30, 2013

Final Budget Actual

Variance with

Final Budget

Positive (Negative)

LOCAL REVENUE SOURCES

Current Real Estate Tax 59,744,716 $ 59,278,793 $ (465,923) $

Interim Real Estate Tax 550,000 759,385 209,385

Public Utility Realty Tax 88,000 91,549 3,549

Payments in Lieu of Current Taxes - 1,050 1,050

Earned Income Taxes - Act 511 4,500,000 5,126,189 626,189

Real Estate Transfer Tax 650,000 645,894 (4,106)

Delinquent Real Estate Taxes 1,600,000 1,323,552 (276,448)

Delinquent Earned Income Taxes 215,000 18,077 (196,923)

Interest on Investments 275,000 90,576 (184,424)

Admissions - 84,363 84,363

Commissions - 62 62

Federal IDEA Revenue Received as Pass Through 800,250 1,165,304 365,054

Federal Revenues from Other Sources 59,500 63,810 4,310

Rentals 60,000 40,107 (19,893)

Contributions from Private Sources - 287 287

Regular Day School Tuition 13,000 - (13,000)

Summer School Tuition 55,000 54,351 (649)

Adult Education Tuition 34,650 37,461 2,811

Receipts from Other LEAs in Pennsylvania 140,000 178,803 38,803

Revenue from Community Service Activities 40,000 43,075 3,075

Miscellaneous Revenue 45,618 67,385 21,767

Energy Incentives/Credits 37,500 72,593 35,093

Refunds of a Prior Year Expenditure - - -

TOTAL REVENUES FROM LOCAL SOURCES 68,908,234 $ 69,142,666 $ 234,432 $

77


GENERAL FUND

SCHEDULES OF REVENUES AND OTHER FINANCING SOURCES - BUDGET TO ACTUAL (Continued)


Final Budget Actual

Variance with

Final Budget

Positive (Negative)

STATE REVENUE SOURCES

Basic Instructional Subsidy 7,887,577 $ 7,885,824 $ (1,753) $

Tuition - Section 1305/1306 120,000 200,795 80,795

Special Education 2,431,168 2,431,071 (97)

Transportation (Regular & Additional) 1,377,430 1,210,423 (167,007)

Rentals & Sinking Fund Payments 905,900 858,078 (47,822)

Health Services 112,250 109,521 (2,729)

State Property Tax Reduction Allocation 1,382,443 1,382,443 -

Pa Accountability Grant - 183,342 183,342

State Share Soc Security and Medicare Tax 1,947,975 1,677,781 (270,194)

State Share of Retirement Contributions 2,802,200 2,520,144 (282,056)

TOTAL STATE REVENUE SOURCES 18,966,943 $ 18,459,422 $ (507,521) $

FEDERAL REVENUE SOURCES

Title I - Basic Program 443,800 $ 479,373 $ 35,573 $

Title II - Improving Teacher Quality 136,850 111,330 (25,520)

Title III - ESL 16,900 27,413 10,513

School-Based Access Medicaid Reimbursement 100,000 2,215 (97,785)

TOTAL FEDERAL REVENUE SOURCES 697,550 $ 620,331 $ (77,219) $

OTHER REVENUE SOURCES

Transfers in 395,000 $ -$ (395,000) $

Sale of Capital Assets 1,000 7,537 6,537

TOTAL OTHER REVENUE SOURCES 396,000 $ 7,537 $ (388,463) $

88,968,727 $ 88,229,956 $ (738,771) $ TOTAL LOCAL, STATE, FEDERAL AND OTHER REVENUES

78


GENERAL FUND

SCHEDULES OF EXPENDITURES AND OTHER FINANCING USES -

BUDGET TO ACTUAL (Continued on next page)


EXPENDITURES

Original

Budget

Transfers

Increase

(Decrease)

Final Revised

Budget Actual

Variance with

Final Budget

Positive

(Negative)

REGULAR PROGRAMS

Salaries 30,311,850$ (332,000)$ 29,979,850$ 29,978,134$ 1,716$

Employee Benefits 11,320,300 (291,000) 11,029,300 11,028,565 735

Purchased Professional Services 37,875 10,275 48,150 30,101 18,049

Purchased Property Services 309,650 (49,100) 260,550 260,499 51

Other Purchased Services 1,227,625 19,500 1,247,125 1,247,087 38

Supplies and Material 1,315,550 254,450 1,570,000 1,517,427 52,573

Property 430,850 92,350 523,200 482,767 40,433

Other Objects 5,400 5,100 10,500 10,487 13

TOTAL REGULAR PROGRAMS 44,959,100$ (290,425)$ 44,668,675$ 44,555,067$ 113,608$

SPECIAL PROGRAMS

Salaries 3,889,700$ 39,000$ 3,928,700$ 3,928,244$ 456$

Employee Benefits 1,411,200 85,000 1,496,200 1,495,448 752

Purchased Professional Services 2,900,100 134,000 3,034,100 3,034,093 7

Purchased Property Services - - - -

Other Purchased Services 711,450 399,840 1,111,290 1,111,092 198

Supplies and Material 26,900 (150) 26,750 19,932 6,818

Property - - - -

Other Objects 650 - 650 - 650

TOTAL SPECIAL PROGRAMS 8,940,000$ 657,690$ 9,597,690$ 9,588,809$ 8,881$

VOCATIONAL EDUCATION

Salaries -$ -$ -$ -$ -$

Employee Benefits - - - - -

Purchased Professional Services - - - - -

Other Purchased Services 1,130,400 430,510 1,560,910 1,405,620 155,290

Supplies and Material - - - - -

Other Objects - - - - -

TOTAL VOCATIONAL EDUCATION 1,130,400$ 430,510$ 1,560,910$ 1,405,620$ 155,290$

OTHER INSTRUCTIONAL PROGRAMS

Salaries 529,900$ -$ 529,900$ 474,617$ 55,283$

Employee Benefits 129,900 - 129,900 129,667 233

Purchased Professional Services 84,050 82,000 166,050 166,014 36

Purchased Property Services 1,200 250 1,450 1,074 376

Other Purchased Services 145,000 (59,000) 86,000 85,144 856

Supplies and Material 55,650 (13,750) 41,900 26,022 15,878

Property 20,000 (19,700) 300 265 35

Other Objects 1,000 - 1,000 525 475

966,700$ (10,200)$ 956,500$ 883,328$ 73,172$

NONPUBLIC SCHOOL PROGRAMS

Purchased Professional Services -$ 5,000$ 5,000$ 4,394$ 606$

TOTAL NONPUBLIC SCHOOL PROGRAMS -$ 5,000$ 5,000$ 4,394$ 606$

ADULT EDUCATION PROGRAMS

Salaries 2,150$ 600$ 2,750$ 2,702$ 48$

Employee Benefits 400 - 400 370 30


Other Purchased Services 6,100 2,000 8,100 8,036 64

Supplies and Material - - - - -

34,650$ 3,600$ 38,250$ 38,096$ 154$

TOTAL INSTRUCTIONAL 56,030,850$ 796,175$ 56,827,025$ 56,475,314$ 351,711$

TOTAL ADULT EDUCATION

TOTAL OTHER INSTRUCTIONAL

INSTRUCTIONAL

79


GENERAL FUND


BUDGET TO ACTUAL (Continued)


EXPENDITURES

Original

Budget

Transfers

Increase

(Decrease)

Final Revised

Budget Actual

Variance with

Final Budget

Positive

(Negative)

SUPPORT SERVICES

PUPIL PERSONNEL

Salaries 1,954,800$ (2,200)$ 1,952,600$ 1,946,192$ 6,408$

Employee Benefits 804,750 32,000 836,750 836,706 44


Purchased Property Services - - -

Other Purchased Services 26,375 (8,700) 17,675 6,841 10,834

Supplies and Material 56,250 10,450 66,700 57,027 9,673

Property - - -

Other Objects 1,025 - 1,025 395 630

TOTAL PUPIL PERSONNEL 2,858,175$ 114,800$ 2,972,975$ 2,944,790$ 28,185$

INSTRUCTIONAL STAFF

Salaries 1,245,300$ -$ 1,245,300$ 1,236,873$ 8,427$

Employee Benefits 491,150 - 491,150 471,642 19,508

Purchased Professional Services 150,225 (69,500) 80,725 24,466 56,259

Purchased Property Services 13,400 (3,700) 9,700 3,594 6,106

Other Purchased Services 29,705 500 30,205 17,507 12,698


Property 25,000 5,650 30,650 21,922 8,728

Other Objects 5,500 2,000 7,500 4,439 3,061

TOTAL INSTRUCTIONAL STAFF 2,110,730$ (50,450)$ 2,060,280$ 1,932,097$ 128,183$

ADMINISTRATION

Salaries 2,327,700$ 133,000$ 2,460,700$ 2,459,949$ 751$


Purchased Professional Services 185,975 (625) 185,350 158,387 26,963



Supplies and Material 29,050 8,550 37,600 37,107 493

Property - 8,300 8,300 8,077 223

Other Objects 57,450 1,150 58,600 48,992 9,608

TOTAL ADMINISTRATION 3,747,550$ 209,625$ 3,957,175$ 3,892,434$ 64,741$

PUPIL HEALTH

Salaries 551,450$ -$ 551,450$ 540,672$ 10,778$

Employee Benefits 236,900 - 236,900 236,686 214

Purchased Professional Services 193,000 - 193,000 190,005 2,995

Purchased Property Services 1,850 - 1,850 737 1,113

Other Purchased Services 1,400 - 1,400 20 1,380

Supplies and Material 18,450 700 19,150 13,412 5,738

Property 7,300 (700) 6,600 2,253 4,347

TOTAL PUPIL HEALTH 1,010,350$ -$ 1,010,350$ 983,785$ 26,565$

80


GENERAL FUND




EXPENDITURES

Original

Budget

Transfers

Increase

(Decrease)

Final Revised

Budget Actual

Variance with

Final Budget

Positive

(Negative)

BUSINESS

Salaries 421,300$ 4,000$ 425,300$ 416,933$ 8,367$



Purchased Property Services 7,500 (4,800) 2,700 2,547 153



Property - 3,000 3,000 2,650 350

Other Objects 8,000 600 8,600 8,562 38

TOTAL BUSINESS 707,500$ 20,800$ 728,300$ 718,807$ 9,493$

OPERATION AND MAINTENANCE OF PLANT SERVICES

Salaries 2,427,150$ -$ 2,427,150$ 2,300,440$ 126,710$

Employee Benefits 1,213,700 - 1,213,700 1,152,213 61,487


Purchased Property Services 1,624,050 (88,500) 1,535,550 1,359,911 175,639

Other Purchased Services 471,200 (109,900) 361,300 322,049 39,251

Supplies and Material 1,038,550 (78,900) 959,650 774,423 185,227

Property 24,700 900 25,600 21,007 4,593

Other Objects 8,950 2,500 11,450 9,427 2,023

6,915,275$ (260,400)$ 6,654,875$ 6,059,608$ 595,267$

STUDENT TRANSPORTATION SERVICES

Salaries 26,050$ 10,000$ 36,050$ 35,534$ 516$


Purchased Professional Services - - -

Purchased Property Services - - -

Other Purchased Services 3,595,944 295,000 3,890,944 3,890,763 181

Supplies and Material 800 - 800 34 766

Property - 100 100 25 75

Other Objects - - - - -

3,644,894$ 310,100$ 3,954,994$ 3,952,879$ 2,115$

CENTRAL

Salaries 860,500$ -$ 860,500$ 829,249$ 31,251$


Purchased Professional Services 73,600 (3,050) 70,550 63,921 6,629




Property 80,000 279,950 359,950 347,626 12,324

Other Objects 6,300 - 6,300 2,447 3,853

TOTAL CENTRAL 1,689,575$ 296,500$ 1,986,075$ 1,872,915$ 113,160$

OTHER SUPPORT SERVICES

Other Purchased Services 124,350$ 1,500$ 125,850$ 125,821$ 29$

124,350$ 1,500$ 125,850$ 125,821$ 29$

TOTAL SUPPORT SERVICES 22,808,399$ 642,475$ 23,450,874$ 22,483,136$ 967,738$

TOTAL OPERATION AND

MAINTENANCE OF PLANT SERVICES

TOTAL STUDENT TRANSPORTATION

SERVICES

TOTAL OTHER SUPPORT SERVICES

81


GENERAL FUND




EXPENDITURES

Original

Budget

Transfers

Increase

(Decrease)

Final Revised

Budget Actual

Variance with

Final Budget

Positive

(Negative)

OPERATION OF NON-INSTRUCTIONAL SERVICES

STUDENT ACTIVITIES

Salaries 859,500$ 1,600$ 861,100$ 861,084$ 16$



Purchased Property Services 45,000 350 45,350 15,925 29,425



Property 33,200 (4,200) 29,000 18,169 10,831

Other Objects 5,600 9,300 14,900 14,815 85

TOTAL STUDENT ACTIVITIES 1,466,100$ 163,650$ 1,629,750$ 1,577,262$ 52,488$

COMMUNITY SERVICES

Salaries 65,550$ -$ 65,550$ 65,178$ 372$


Purchased Professional Services - - - - -

Other Purchased Services - 200 200 120 80

Supplies and Material - 5,100 5,100 5,095 5

Other Objects 9,950 - 9,950 4,700 5,250

TOTAL COMMUNITY SERVICES 89,000$ 5,300$ 94,300$ 85,080$ 9,220$

TOTAL OPERATION OF

1,555,100$ 168,950$ 1,724,050$ 1,662,342$ 61,708$

FACILITIES ACQUISITION, CONSTRUCTION AND IMPROVEMENT SERVICES

EXISTING BUILDING IMPROVEMENT SERVICES

Purchased Property Services -$ -$ -$ -$ -$

Property - - - - -

-$ -$ -$ -$ -$

CONSTRUCTION AND

IMPROVEMENT SVC. -$ -$ -$ -$ -$

OTHER EXPENDITURES AND FINANCING USES

DEBT SERVICE AND OTHER EXPENDITURES/FINANCING USES

Interest 3,291,700$ (1,229,750)$ 2,061,950$ 2,061,426$ 524$

Redemption of Bonds or Capital Leases 5,395,450 63,150 5,458,600 5,458,581 19

Refunds of Prior Year's Receipts 450,000 (439,000) 11,000 9,846 1,154

USES USES 9,137,150$ (1,605,600)$ 7,531,550$ 7,529,853$ 1,697$

282,700$ 198,000$ 480,700$ 419,773$ 60,927$

BUDGETARY RESERVE 200,000$ (200,000)$ -$ -$ -$

9,619,850$ (1,607,600)$ 8,012,250$ 7,949,626$ 62,624$

90,014,199$ -$ 90,014,199$ 88,570,418$ 1,443,781$

NON-INSTRUCTIONAL SERVICES

EXPENDITURES/FINANCING

INTERFUND TRANSFERS - OUT

TOTAL GENERAL FUND EXPENDITURES

TOTAL FACILITIES ACQUISITION,

TOTAL EXISTING BUILDING

IMPROVEMENT SERVICES

TOTAL OTHER EXPENDITURES AND

TOTAL DEBT SERVICE AND OTHER

FINANCING USES

STATEMENT OF CHANGES IN

ASSETS AND LIABILITIES -

FIDUCIARY FUND - STUDENT

ACTIVITIES AGENCY FUND

JUNE 30, 2013

The Agency Fund accounts for assets held by the District as an agent for various

student groups within the Middle and High Schools.

82


STATEMENT OF CHANGES IN ASSETS AND LIABILITIES -

STUDENT ACTIVITIES AGENCY FUND


Beginning Balance,

7/1/12 Additions Reductions

Ending Balance,

6/30/13

Assets

Cash and cash equivalents 237,691 $ 617,670 $ 591,373 $ 263,988 $

Investments 12,810 61 61 12,810

Total Assets 250,501 $ 617,731 $ 591,434 $ 276,798 $

Liabilities

Due to student groups 250,501 $ 617,731 $ 591,434 $ 276,798 $

Total Liabilities 250,501 $ 617,731 $ 591,434 $ 276,798 $

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS




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, the business-type activities, each major fund, and the aggregate remaining fund information of

Dallastown Area School District, as of and for the year ended June 30, 2013, and the related notes to the

financial statements, which collectively comprise Dallastown Area School District’s basic financial

statements, and have issued our report thereon dated November 12, 2013.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered Dallastown Area School

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 Dallastown Area

School District’s internal control. Accordingly, we do not express an opinion on the effectiveness of

Dallastown Area School 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 over financial reporting 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.

84

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Dallastown Area School District's financial

statements are free from 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.


November 12, 2013

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR

FEDERAL PROGRAM AND REPORT ON INTERNAL CONROL OVER COMPLIANCE

AS REQUIRED BY OMB CIRCULAR A-133




Report on Compliance for Each Major Federal Program

We have audited Dallastown Area School District’s 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 each of Dallastown Area School District’s major Federal programs for the year ended

June 30, 2013. Dallastown Area School District’s major Federal programs are identified in the Summary

of Auditor’s 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on compliance for each of Dallastown Area School 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

Dallastown Area School 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 each major

Federal program. However, our audit does not provide a legal determination of Dallastown Area School

District’s compliance.

Opinion on Each Major Federal Program

In our opinion, Dallastown Area School District complied, in all material respects, with the types of

compliance requirements referred to above that could have a direct and material effect on each of its

major Federal programs for the year ended June 30, 2013.

86

Report on Internal Control Over Compliance

Management of Dallastown Area School 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 Dallastown Area School 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 Dallastown Area School 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.

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.


November 12, 2013

87


Schedule of Findings and Questioned Costs


Section I -- Summary of Auditor's Results

Financial Statements

Type of auditor's report issued: Unqualified

Internal control over financial reporting:

● Material weakness (es) identified? Yes X No

● Significant deficiency(ies) identified that are not

considered to be a material weakness (es)? Yes X No

Noncompliance material to financial statements

noted? ___ Yes X No

Federal Awards

Internal control over major programs:

● Material weakness (es) identified? Yes X No

● Significant deficiency(ies) identified that are not

considered to be a material weakness (es)? Yes X None Reported

Type of auditor's report issued on compliance for the major programs: Unqualified

● Any audit findings disclosed that are

required to be reported in accordance

with Section .510(a) of Circular A-133? Yes X No

88


Schedule of Findings and Questioned Costs (Continued)


Identification of the major programs:

CFDA Number(s) Name of Federal Programs/Cluster

84.027

Special Education - Grants to States

84.010 Title I - Grants to Local Educational Agencies

Dollar threshold used to distinguish between

type A and type B programs $300,000

Auditee qualified as low-risk auditee? X Yes No

Section II -- Financial-Statement Findings

A. Significant Deficiency(ies) in Internal Control

There were no findings relating to the financial statement audit required to be reported.

B. Compliance Findings

There were no compliance findings relating to the financial statement audit required to be

reported.

Section III -- Federal-Award Findings and Questioned Costs

A. Compliance Findings

There were no findings relating to the Federal awards required to be reported in

accordance with Section .510(a) of OMB Circular A-133.

B. Significant Deficiency(ies) in Internal Control

There were no findings relating to the Federal awards required to be reported in

accordance with Section .510(a) of OMB Circular A-133.

89


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued on the next page)


Federal Pass-Through Program

Source C.F.D.A. Grantor's Grant or Annual

Grantor Program Title Code Number Number Period Award

U.S. Department of Education

Passed through the PA Dept. of Education

Title I - Grants to Local Educational Agencies I 84.010 013-130112 12-13 479,567 $

Title I - Grants to Local Educational Agencies I 84.010 013-120112 11-12 388,653 $

Title II - Improving Teacher Quality I 84.367 020-130112 12-13 111,330 $

Title II - Improving Teacher Quality I 84.367 020-120112 11-12 110,467 $

Title III - Language Instruction I 84.365 010-130112 12-13 29,060 $

Education Jobs Fund I 84.410 140-120112 11-12 8,546 $

Passed through Lincoln Intermediate Unit

Special Education - Grants to States I 84.027 N/A 12-13 1,119,679 $

Passed through Shippensburg University

I3 Reading Recovery Grant I 84.411 N/A 11-13 6,000 $

Total U.S. Department of Education

U.S. Department of Health and Human Services

Passed through the PA Dept. of Public Welfare

Medical Assistance Program; Title XIX I 93.778 N/A 12-13 2,215 $

Total U.S. Department of Health and Human

Services

90

Accrued or Accrued or

Total (Deferred) (Deferred)

Received for Revenue at Revenue Expenditures Revenue at

the Year July 1, 2012 Recognized Recognized June 30, 2013

387,788 $ -$ 479,373 $ 479,373 $ 91,585 $

75,088 75,088 - - -

81,851 - 111,330 111,330 29,479

29,235 29,235 - - -

25,185 - 27,412 27,412 2,227

8,546 8,546 - - -

1,119,679 - 1,119,679 1,119,679 -

- (6,000) 5,790 5,790 (210)

1,727,372 106,869 1,743,584 1,743,584 123,081

1,337 - 2,215 2,215 878

1,337 - 2,215 2,215 878

91


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)


Federal Pass-Through Program

Source C.F.D.A. Grantor's Grant or Annual

Grantor Program Title Code Number Number Period Award

U.S. Department of Agriculture

Passed through PA Department of Education

National School Lunch Program I 10.555 N/A 12-13 N/A

National School Lunch Program I 10.555 N/A 11-12 N/A

School Breakfast Program I 10.553 N/A 12-13 N/A

School Breakfast Program I 10.553 N/A 11-12 N/A

Passed through the PA Department of Agriculture

National School Lunch Program - Food Donations I 10.555 N/A 11-12 N/A

Total U.S. Department of Agriculture

Total Expenditures of Federal Awards

Test of 25% rule:

Total Federal Expenditures 2,752,916

Programs selected for testing major programs

Title I - Grants to Local Educational Agencies 479,373 $

Special Education - Grants to States 1,119,679

1,599,052 / $ 2,752,916 = 58.09%

Source Codes:

D - Direct Funding

I - Indirect Funding

See Notes to Schedule of Expenditures of Federal Awards.

92

Accrued or Accrued or

Total (Deferred) (Deferred)

Received for Revenue at Revenue Expenditures Revenue at

the Year July 1, 2012 Recognized Recognized June 30, 2013

715,063 - 722,592 722,592 7,529

6,137 6,137 - - -

150,289 - 152,027 152,027 1,738

1,236 1,236 - - -

132,498 - 132,498 132,498 -

1,005,223 7,373 1,007,117 1,007,117 9,267

2,733,932 $ 114,242 $ 2,752,916 $ 2,752,916 $ 133,226 $


NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

93

Note 1. Basis of Presentation

The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the Federal-

grant activity of Dallastown Area School District under programs of the Federal government for the year

ended June 30, 2013. 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 Dallastown Area School District, it is not intended to and does not present the net position, changes in

net position or cash flows of the Dallastown Area School District.

Note 2. Significant Accounting Policies

Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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. Revenue is recognized when earned, and expenses are

recognized when incurred. 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.


SUMMARY SCHEDULE OF PRIOR YEAR’S AUDIT FINDINGS


94

There were no prior year’s audit findings.

dallastown area school district financial report … · budget to actual 76 - 77 schedules of...

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