daviess county school district

DAVIESS COUNTY SCHOOL DISTRICT

BASIC FINANCIAL STATEMENTS AND

SUPPLEMENTARY INFORMATION

Year Ended June 30, 2018

(With Independent Auditor's Report Thereon)

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CONTENTS

Independent Auditor's Report

Management's Discussion and Analysis

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position

Statement of Activities

Fund Financial Statements:

Governmental Funds Financial Statements:

Balance Sheet

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position

Statement of Revenues, Expenditures, and Changes in Fund Balances

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Proprietary Funds Financial Statements:

Statement of Net Position

Statement of Revenues, Expenses, and Changes in Fund Net Position

Statement of Cash Flows

Fiduciary Funds Financial Statements:

Statement of Fiduciary Net Position

Statement of Changes in Fiduciary Net Position

Notes to Financial Statements

1-2

3-11

12

13

14

15

16

17

18

19

20

21

22

23-61

C ONT ENT S, C ON C LU D ED

Required Supplementary Information:

Budgetary Comparison Schedules: General Fund Special Revenue Fund

Pension and Other Postemployment Benefits Schedules: Teachers' Retirement System of the State of Kentucky County Employees Retirement System

Supplementary Infonnation:

Combining Financial Statements: Nonmajor Governmental Funds:

Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund

Balances School Activity Funds:

Combining Statement of School Activity Fund Receipts, Disbursements, and Due To

Statement of School Activity Fund Receipts, Disbursements, and Due To: Apollo High School Daviess County High School

Schedule of Expenditures of Federal Awards

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards

Independent Auditor's Report on Compliance For Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance

Schedule of Findings and Questioned Costs

Summary Schedule of Prior Audit Findings

62 63

64-68 69-73

74

75

76

77-80 81-84

85-86

87-88

89-90

91

92

~Riney Hancock CPAs · · · · · · · · · · · · · · · · · · · · · · · · · · · · WJ PSC

INDEPENDENT AUDITOR'S REPORT

Members of the Board of Education Daviess County School District Owensboro, Kentucky

Kentucky State Committee for School District Audits Frankfort, Kentucky

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 Daviess County School District (District) as of and for the year ended June 30, 2018, 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; and the Kentucky Public School Districts' Audit Contract and Requirements prescribed by the Kentucky State Conunittee for School District Audits. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Daviess County School District as of June 30, 2018, 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 .

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2900 Veach Road, Suite 2 - Owensboro, Kentucky 42303 - 270-926-4540 - Fax: 270-926-1494

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Daviess County School District Page 2

Change in Accounting Principle

As discussed in Note 18 to the financial statements, in 2018 the District adopted new accounting guidance, GASB Statement No. 75, Accounting and Financial Reporting for Postemp!oyment Benefits Other Than Pensions. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplementmy Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3-11, the budgetary comparison schedules on pages 62-63, and the pension and other postemployment benefit schedules on 64-73, 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 District's basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Req11ireme11tsfor Federal A·wards, and is also not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the 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 combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 5, 2018, on our consideration of the 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 the District's internal control over fmancial reporting and compliance.

Owensboro, Kentucky October 5, 2018

Daviess County School District Management's Discussion and Analysis For the Fiscal Year Ended June 30, 2018

The discussion and analysis of Daviess County School District's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2018. The intent of this discussion and analysis is to review the School District's financial performance as a whole. Readers should also review the basic financial statements and the notes to the financial statements to enhance their understanding of the School District's financial perfonnance.

Financial Highlights

• In total, net position, as restated, increased $462,241. Net position of governmental activities, as restated, increased by $1,077,582, while net position of business-type activities decreased by $615,341. Net position was restated due to the accounting and financial reporting requirements of GASB statement No. 75 relating to other postemployment benefits.

• General revenues accounted for $111,905,996 in revenue or 88.0% of all governmental revenues. Program specific revenues in the form of charges for services, grants, and contributions accounted for $15,191,332 or 12.0% of total governmental revenues of$127,097,328.

• Total assets of governmental activities decreased by $1,122,663. For governmental activities, capital assets decreased by $3,056,032, while cash and investments increased by $2,112,427.

• The School District had $126,019,746 in expenses related to governmental activities; only $15,191,332 of these expenses were offset by program specific charges for services, grants, and contributions. General revenues (primarily local taxes and state SEEK allocations) were adequate to provide for these programs.

• Construction continued during fiscal year 2018. Projects completed included secure entrances at several schools, HVAC updates, flooring project, and roofing projects. Projects that were in progress at year end include the secure entrances at two schools and HV AC updates at two schools. Design work for renovations to athletic facilities was begun during the year.

Using the Basic Financial Statements

This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand Daviess County School District as a financial whole. The statements then proceed to provide an increasingly detailed look at specific financial activities.

The Statement of Net Position and the Statement of Activities provide information about the activities of the whole School District, presenting both an aggregate view of the School District's finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term, as well as what remains for future spending. The fund financial statements also look at the School District's major funds with all other non-major funds presented in total in one column. The major funds for the Daviess County School District are the General Fund and Special Revenue Fund.

3


Reporting the School District as a Whole

One of the most important questions asked about the School District is "how did we do financially during 2018?" The Statement of Net Position and the Statement of Activities, which appear first in the School District's financial statements, report information on the School District as a whole and its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received and paid.

These two statements report the School District's net position and changes in that position. This change in net position is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. However, the School District's goal is to provide services to our students, not to generate profits as commercial entities do. One must consider many other non-financial factors, such as the School District's property tax base, current property tax laws in Kentucky restricting revenue growth, required educational programs and other factors.

In the Statement of Net Position and the Statement of Activities, the School District is divided into two distinct kinds of activities:

Governmental Activities - most of the School District's programs and services are reported here, including instruction, support services, operation and maintenance of plant, pupil transportation, and other activities.

Business-Type Activities - these services are provided on a charge for goods or services basis to recover all of the expenses of the goods or services provided. The School District's food service and after school programs are reported as business activities.

Reporting the School District's Most Significant Funds

Fund Financial Statements

The analysis of the School District's major funds begins on page 14. Fund financial reports provide detailed information about the School District's major funds. The School District uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the School District's major funds.

Governmental Funds - most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end available for spending in future periods. These funds are reported using an accounting method called modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance

4


Reporting the School District's Most Significant Funds, Continued

Governmental Funds, Continued

educational programs. The relationship (or difference) between govenunental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is reconciled in the financial statements.

Proprietary Funds - proprietary funds use the same basis of accounting as business-type activities; therefore, the statements for the proprietary fund will essentially match.

Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 23 - 59 of this report.

Government-Wide Financial Analysis

Net position may serve over time as a useful indicator of a government's financial position. In the case of the District, assets and deferred outflows ofresources exceeded liabilities and deferred inflows ofresources by $1,252,074 for governmental activities and liabilities and deferred inflows ofresources exceeded assets and deferred outflows ofresources by $2,476,272 for Business-Type Activities as of June 30, 2018.

The largest portion of the District's net position reflects its investment in capital assets ( e.g., land and improvements, buildings and improvements, vehicles, furniture and equipment, and construction in progress) less any related debt used to acquire those assets that is still outstanding. The District uses these capital assets to provide services to its students; consequently, these assets are not available for future spending. Although the District's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The District's financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets. Included for June 30, 2018, is the district's liability for the net pension obligation and the liability for other postemployment benefits.

5


Government-Wide Financial Analysis, Continued

(Table 1) Net Position

Governmental Activities Business-T~~e Activities

2018 2017 2018 2017

Assets Current and other

assets $ 33,099,731 $ 31,166,362 $2,697,322 $2,507,973 Capital assets 104,914,588 107,970,620 746,003 854,252

Total assets 138,014,319 139,136,982 3,443,325 3,362,225

Deferred Outflows of Resources

Deferred charges on refunding 1,734,577 1,956,478

Pension deferred outflows 8,281,338 5,936,225 1,461,412 1,047,569

OPEB deferred outflows 4,474,880 532 ,678

Total deferred outflows of resources 14,490,795 7,892,703 1,994,090 1,047,569

Liabilities Long-term liabilities 141,304,395 101,007,731 7,518,849 4,755,248 Other liabilities 7,988,592 9,517,382 116,887 106,345

Total liabilities 149,292,987 110,525,113 7,635,736 4,861,593

Deferred Inflows of Resources

Pension deferred inflows 1,004,757 133,710 177,310 23,596

OPEB deferred inflows 955,296 100,641

Total deferred inflows of resources 1,960,053 133,710 277,951 23,596

Net Position Net Investment in 40,959,562 38,757,820 746,003 854,252

capital assets Restricted 5,255,244 3,257,124 Unrestricted (44,962,732} (5,644,082} (3,222,275} (1,329,647}

Total net position $ 1 252 074 $ 36,370 862 $ (2 476,272} $ /475 395}

Total

2018 2017

$ 35,797,053 $ 33,674,335 105,660,591 108,824,872

141,457,644 142,499,207

1,734,677 1,956,478

9,742,750 6,983,794

5,007,558

16,484,885 8,940 ,272

148,823,244 105,762,979 8,105,479 9,623 ,727

156,928,723 115,386,706

1,182,067 157,306

1,055,937

2,238,004 157,306

41,705,565 39,612,072

5,255,244 3,257,124 (48,185,007} (6,973,729}

$ 11 224 198} $ 35 895 467

Total assets decreased $1,041,563 primarily due to depreciation. Total net position, as restated, decreased by $36,669,191 .

6


Government-Wide Financial Analysis, Continued (Table 2)

Net Position

Governmental Activities Business-T~~e Activities 2018 2017 2018 2017

Program revenues: Charges for services $ 581,318 $ 711,341 $ 3,322,664 $ 3,327,377 Operating grants

and contributions 10,728,595 9,919,680 5,140,396 5,561,401 Capital grants

and contributions 3,881,419 4,024,801 General revenues:

Taxes 43,694,142 38,852,658 State aid formula

grants 38,775,242 39,852,174 Investment

earnings 295,382 192,775 27,665 16,628 Gain on sale of

capital assets 8,239 24,935 (493) (211) Miscellaneous 323,138 335,647 State on behalf

payments 28,739,027 19,757,505 Transfers: 70,826 90,321 (70,826} (90,321} Total revenues and

transfers 127,097,328 113,761,837 8,419,406 8,814,874

Program expenses: Instruction 80,357,611 66,776,766 Support services:

Student 4,630,461 4,185,221 Instructional staff 4,147,126 3,772,854 District

administration 1,017,973 993,944 School

administration 8,663,538 7,679,543 Business 2,589,789 2,122,567 Facility

operations/ maintenance 9,458,057 10,427,097

Student transportation 9,944,282 8,040,034

Non-instructional 860,221 901,623 Facility acquisition/

construction 2,220,413 5,649,478 After school program 1,231,371 1,185,696 Interest on long-

term debt 2,130,275 2,257,125 Food service 7,803,376 8,006,522 Total expenses and

transfers 126,019,746 112,806,252 9,034,747 9,192,218 Increase/decrease

in net position $ j QZZ 582 $ 955,585 $ (6j5 341} $ (3ZZ 344)

7

Total 2018 2017

$ 3,903,982 $ 4,038,718

15,868,991 15,481,081

3,881,419 4,024,801

43,694,142 38,852,658

38,775,242 39,852,174

323,047 209,403

7,746 24,724 323,138 335,647

28,739,027 19,757,505

135,516,734 122,576,711

80,357,611 66,776,766

4,630,461 4,185,221 4,147,126 3,772,854

1,017,973 993,944

8,663,538 7,679,543 2,589,789 2,122,567

9,458,057 10,427,097

9,944,282 8,040,034 860,221 901,623

2,220,413 5,649,478 1,231,371 1,185,696

2,130,275 2,257,125 7,803,376 8,006,522

135,054,493 121,998,470

$ 462 24j $ 528 24:1

Governmental Activities


Instruction comprises 63.8% of governmental program expenses. Support services expenses make up 32.1 % of governmental expenses. Non-instructional expenses for community services total . 7% of governmental expenses. Facilities acquisition/construction and interest accounts for the remaining 3 .4% of the total governmental expense.

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for government activities, the total cost of services and the net cost of services. That is, it identifies the cost of these services supported by tax revenue and unrestricted state entitlements. The total cost of services includes state on-behalf payments in the amount of$28,739,027 for 2018.

Instruction

Support services

Non-instructional

Facilities acquisition/construction

Interest on long-term debt

Total expenses

Business-Type Activities

$

(Table 3) Governmental Activities

Total Cost of Services

Net Cost of Services

80,357,611 $

40,451,226

860,221

2,220,413

2,130,275

66,776,766

37,221,260

901,623

5,649,478

2,257,125

$71,841,680 $59,382,711

37,984,282

7,148

(1,134,971)

2,130,275

34,524,559

2,135

1,983,900

2,257,125

$126,0:19,21:6 $112,806,252 $ :l 10,828.414 $98,150,430

The business-type activities are food service and after school programs. These programs had revenues of $8,490,725 and expenses of$9,034,747 for fiscal year 2018. Of the revenues, $3,322,664 was charges for services, $5,140,396 was from state and federal grants, and $27,665 was from investment earnings. Indirect cost transfers and other transfers totaled $70,826. Loss on sale of assets totaled $493. Business activities receive no support from tax revenues. The School District will continue to monitor the charges and costs of these activities. If it becomes necessary, the School District will increase the charges for these activities.

The School District's Funds

Information about the School District's major funds begins on page 16. These funds are accounted for using the modified accrual basis of accounting. All governmental funds had total revenues and other financing sources of$127,115,556 and expenditures of $123,643,555. The General Fund's fund balance increased by $1,473,881.

8

General Fund-Budget Highlights


The increase in General Fund was due to an increase in state aid and taxes.

The School District's budget is prepared according to Kentucky law and is based on accounting for certain transactions on a basis of cash receipts, disbursements and encumbrances. The most significant budgeted fund is the General Fund. The Kentucky Department of Education requires a zero-based budget with any budgeted remaining fund balance shown as a contingency expense in the budget process.

A variance comparison is presented on page 58 between the final budgeted amounts and the actual (GAAP Basis) amounts. The General Fund revenues were budgeted at $92,566,499 with actual amounts of $104,030,571. Budgeted expenditures of $107,358,372 compare with actual expenditures of $103,080,407, a difference of $4,277,965. The source of the expense budget variances is related to amounts budgeted for contingencies. Budgeted other financing sources was $522,772, with actual financing sources of$523,717. The net increase in the General Fund balance is $1,473,881.

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2018, the School District had $105,660,591 invested in land, buildings, equipment, and construction in progress, $104,914,588 in governmental activities, and $746,003 in business-type activities. Table 4 shows fiscal year 2018 balances compared to 2017.

Governmental Activities 2018 2017

Land $ 4,244,370 $ 4,244,370 Land improvements 1,004,294 1,088,077

Buildings and improvements 91,020,129 92,110,005

Technology equipment 2,374,803 3,133,903

Vehicles ~.026,091 4,086,009

(Table 4) Capital Assets at June 30

(Net of Depreciation)


$

2018 2017

5,407

57,749

6,720

9

$

6,180

63,431 10,965

Total 2018 2017

$ 4,244,370 $ 4,244,370 1,009,701 1,094,257

91,020,129

2,432,552 4,032,811

92,110,005

3,197,334 4,096,974


Capital Assets and Debt Administration, Continued

Capital Assets, Continued

General equipment Construction in

progress

Governmental Activities 2018 2017

861,737

1,383,164

988,948

2,319,308

(Table 4) Capital Assets at June 30

(Net of Depreciation), Continued

Business-Type Activities 2018 2017

676,127 773,676 1,537,864

1,383,164

1,762,624

2 ,319,308

Total $104,914,588 $107 970 $ 746,003 $ 854,252 $105,660,591 $108,824 872

The decrease in net capital assets is primarily due to depreciation.

Debt

At June 30, 2018, the School District had $65,507,000 in bonds outstanding, of which $1,645,098 are to be paid from the KSFCC funding provided by the state of Kentucky. A total of$5,138,000 is due within one year.

At June 30, 2017, the School District had $70,543,000 in bonds outstanding, of which $1,715,831 are to be paid from the KSFCC funding provided by the state of Kentucky.

District Challenges for the Future

Daviess County School District's overall financial status remains in a safe financial position. The District is financially stable, but at risk due to continued inadequate state funding. This is the result of three factors: the general decrease in the percentage of state funding for K-12 public education; the rising cost of employer retirement expense; and the related state pension fund financial challenge.

A challenge facing our School District is that of inadequate state funding. In recent years, the state has placed an assortment of mandates on Kentucky school districts, yet adequate funding for those mandates has not been provided. This practice, over time, will place a severe strain on the District's resources. The District maintains a contingency plan to deal with state funding shortfalls, but this will only be effective for the short-term. A long-term solution at the state level must be determined and enacted by the state legislature to ensure adequate funding for Kentucky's public school districts. To balance state funding shortfalls, increased pressure has been placed on local boards of education to increase taxes, placing a hardship on local school districts and local taxpayers.

10


District Challenges for the Future, Continued

Kentucky's constitution clearly directs public education as the state's responsibility. Fiscally speaking, the state must address inadequate school funding on multiple fronts that include operational costs, transportation, and capital infrastructure needs. Should the state fail to proactively respond to this issue, the potential exists for a state-wide lawsuit as evidenced by the Kentucky Education Reform Act (KERA) that occurred in 1990. While KERA ushered in sweeping reform for school accountability, the lawsuit was based on the premise of inadequate state funding for Kentucky's public schools. The Kentucky Supreme Court sided with the school districts in that case, ordering the Legislature to remedy inadequate and inequitable school funding.

A second financial risk facing Daviess County Public Schools is the rising retirement/pension costs and also the financial instability in the state pension fund. The employer matching percentage has more than doubled over the last seven-year period for the support personnel. Additionally, Kentucky school boards now contribute 3.0% to stabilize the KTRS medical fund. This cost has been 100% the obligation oflocal taxpayers with no state assistance. Legislation was approved in the General Assembly that forbids the state from continuing to borrow from the KTRS pension fund to meet the state's pension obligation. No additional state funding has been appropriated to offset this rising cost and the District has been forced to increase local funding to provide the necessary revenue to offset the unavoidable, mandated cost increases. Further, instability in the state pension fund is a large financial concern for the state's budget and if left unresolved, could result in negative financial consequences to Kentucky's public school districts.

With careful planning and monitoring of our finances, the Daviess County School District's goals are to continue to provide a quality education for our students and to secure a positive financial future for the School District.

Contacting the School District's Financial Management

This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have any questions about this report or need additional information, contact Sara Harley, Director of Finance, at Daviess County Public Schools, 1622 Southeastern Parkway, P.O. Box 21510, Owensboro, KY 42304-1510, or email at [email protected].

ll


ST A TEMENT OF NET POSITION

ASSETS Cash and cash cquivaknts $

Investments Accounts n:ceivable:

Taxes Ollt1..'I' Due from other governments

Inventory Prepaids and other current assets Capital assets, net

Total assets

DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding Pension deferred outflows Other postcmployment benefits deferred outflows

Total dererrcd outnows of resources

LIABILITIES Accounts payable Accrued salaries and benefits Payroll withholdings Accrued interest payable Unearned revenue Long-tenn liabilities:

Due within one year Due in more than one year

Other liabilities due in more than one year: N1..1 pension liability Net other postcmploym1..'llt benefits liabiliti1..'S

Total llnbllltles

DEFERRED INFLOWS OF RESOURCES Pension deferred inflows Other postemployment bt.'llefits deferred inflows

Total deferred lnnows of resources

NET POSITION N1..1 investment in capital ass1..1S Restricted for:

Capital projects Otht.'1' Tt.'Chnology

Unrestricted

Totnl net position s

June 30, 2018

Governmental Activities

25,588,555 s 5,280,207

941,217 168,875 752.592 280,914 87,371

104,914,588

138,014,319

1,734,577 8,281,338 4,474.880

14,490,795

149,997 4,202,973

862,851 416,302

2,356,469

5,935,597 62,855,993

31,714.375 40,798,430

149,292,987

1,004,757 955,296

1,960.053

40,959,562

2,891,872 2,244,986

118,386 (44,962,732)

1.252.074 s

See Noles 10 Financial S1.11emcn1s 12


2,301,107

6,021 152.495 237,699

746,003

3.443,325

1,461,412 532.678

1,994,090

4,595

112.292

5,596,655 1,922,194

7,635,736

177,310 100.641

277,951

746,003

(3,222.275)

(2,476.272)

Total

s 27,889,662 5,280,207

941,217 174,896 905,087 518,613 87.371

IOS,660.591

141,457,644

1,734,577 9,742,750 5,007,558

16,484,885

154,592 4,202,973

862,851 416.302

2,468,761

5,935,597 62,855,993

37,311,030 42,720,624

156,928, 723

1,182,067 1,055,937

2,238,004

41.705,565

2,891,872 2,244,986

118,386 ( 48, l 85,007)

s (1,224.198)

Functions / Programs

Governmental activities: Instruction Support services:

Student Instructional staff District administration School administration Business Plant operation and maintenance Student transportation

Community services New building construction Building renovations/ additions Interest on long-term liabilities

Total governmental activities

Business-type activities: Food service Aftc.,r school proi,,>rJm

Total business-type activities

Total district


STATEMENT OF ACTIVITIES


Charges for Expenses Services

$ 80,357,611 $ 325,609

4,630.461 4,147.126 1,017,973 8,663,538 2,589,789 9,458.057 28,937 9,944,282 226,772

860,221 81,710

2,138,703 2.130.275

126,019,746 581,318

7.803,376 1.989,782 1.231.371 1.332.882

9,034,747 3.322.664

$ 135,054.493 $ 3.903,982

General revenues: Property taxes Utility taxes State aid formula !,,'f'Jnts On-behalf payments Investment earnings Gain (loss) on sale of capital assets Miscellaneous

Transfers

Total general revenues and transfers

Change in net position

Net position, June 30, 2017, restated

Net position, June 30, 2018

Program Revenues Operating Grants and

Contributions

$ 7,664,287 $

1,004,069 592,152

15,462

599,552 853,073

10,728.595

5,092,124 48.272

5.140,396

$ 15.868.991 $

S« Notes lo F11uni.:1.il Stalcmc:nts 13

Capital Grants and

Contributions

526,035

3,355,384

3,881.419

3.881.419

Net (Expense) Revenue and Change in Net Position

Governmental Business-Type Activities Activities Total

$ (71,841,680) $ (71,841,680)

(3,626,392) (3,626,392) (3,554,974) (3,554,974) (1,017,973) (1,017,973) (8,648,076) (8,648,076) (2,589,789) (2,589,789) (9,429,120) (9,429,120) (9,117,958) (9,117,958)

(7,148) (7,148) (81,710) (81,710)

1.216,681 1.216.681 (2,130.275) (2.130,275)

(110,828.414) (110,828.414)

$ (721,470) (721,470) 149.783 149,783

(571,687) (571.687)

(110,828,414) __ (571,687) (111.400.IOI)

38,664,186 38,664,186 5,029,956 5,029,956

38,775.242 38,775,242 28,739,027 28,739,027

295,382 27,665 323,047 8,239 (493) 7,746

323,138 323,138 70,826 (70,826)

111.905,996 ___ (43,654) 111,862,342

1,077,582 (615,341) 462,241

174,492 ( 1,860,931) ( 1.686.439)

$ 1.252.074 $ (2,476.272) $ (1,224.198)


ASSETS Cash and cash equivalents s Investments Accounts receivable:

Taxes Other Due from other goverrunents

Inventory Prepaid expenses

Total assets s

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

Liabilities: Accounts payable s Due to other funds Accrued salaries and benefits Payroll withholdings Unearned revenue

Total liabilities

Deferred inflows of resources: Unavailable revenue - delinquent property taxes

Fund balances: Nonspcndable Restricted Committed Assigned Unassigned

Total fund balances

Total liabilities, deferred inflows of resources, and fund balances s

BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2018

Special

General Revenue

Fund Fund

18,689,819 $ 1,668,575 5,280,207

941,217 109,720 59,155

2,539 750,053

280,914 58,947

25,363,363 s 2,477,783

50,135 s 6,559

4,202,973 862,851

3,631 2,352,838

5,119,590 2,359,397

216,218

339,861 160,366

281,964 5,060,420

14,345,310 (41,980)

20,027,555 118,386

25,363,363 s 2,477,783

See Noles to Fmanc,al Stat(ffltnts 14

Nonmajor Governmental

Funds

s 5,230,161

s 5,230,161

s 93,303

93,303

5,136,858

5,136,858

s 5,230,161

Total Governmental

Funds

$ 25,588,555 5,280,207

941,217 168,875 752,592

280,914 58,947

s 33,071,307

$ 149,997

4,202,973 862,851

2,356,469

7,572,290

216,218

339,861 5,297,224

281,964 5,060,420

14,303,330

25,282,799

$ 33,071,307


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION

June 30, 2018

Total fund balances - governmental funds

Amounts reported for governmental activities in the statement of

net position are different because:

Capital assets used in governmental activities are not financial resources, and, therefore, are not reported in the funds:

Certain assets are not available to pay for current period expenditures:

Accrued interest receivable $ Taxes receivable

Long-term liabilities are not due and payable in the current period, and, therefore, are not reported as liabilities in governmental funds:

Bonds payable $ Issuance premiums Issuance discounts Deferred charges on refunding Capital lease obligations KSBIT assessment Compensated absences Net pension liability - CERS Net OPEB liability- CERS Net OPEB liability - KTRS Accrued interest payable

Certain amounts related to the net pension and OPEB liabilities are not reported in the governmental funds, but are deferred in the statement of net position:

Pension and OPEB deferred outflows Pension and OPEB deferred inflows

Net position of governmental activities

See Notes to Financial Statements 15

$

$ 25,282,799

104,914,588

28 ,424 216,218 244,642

(65,507,000) (253,413) 468,468

1,734,577 (397,658)

(55,045) (3,046,942)

(31,714,375) (10,892,430) (29,906,000)

(416,302) (139,986,120)

12,756,218 (1,960,053) 10,796,165

$ 1,252,074


ST AT EM ENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

Revenues: Property taxes Utility taxes Tuition and fees Earnings on investments Other local revenue State aid Federal aid

Total revenues

Expenditures: Instruction Support services:


Community services New building construction Building renovations I additions Debt service:

Principal Interest Bond issuance costs

Total expenditures

Excess ( deficiency) of revenues over expenditures

Other financing sources (uses): Proceeds from sale of capital assets Operating transfers in Operating transfers out

Total other financing sources (uses)

Net change in fund balances

Fund balance, June 30, 2017

Fund balance, June 30, 2018

GOVERNMENTAL FUNDS

$

$


Special General Revenue

Fund Fund

30,211,525 $ 5,029,956

60,021 286,716 498,890 753,708

67,549,739 5,034,244 393,724 5,027,705

I 04,030,571 I 0,815,657

66,895,709 8,980,426

3,806,415 610,344 3,700,151 210,609

970,082 8,246,604 15,462 2,402,115 8,890,644 8,168,687 599,551

853,073

I 03,080,407 11,269,465

950,164 (453,808)

15,945 971,752 463,980

(463,980)

523,717 463,980

1,473,881 10,172

18,553,674 108,214

20,027,555 $ 118,386

Sec Notes to Financial Statements 16

Nonmajor Governmental

Funds

$ 8,462,972 $

8,877 230,493

3,480,215

12,182,557

104,437

93,551

81,710 2,138,703

5,036,000 1,839,282

9,293,683

2,888,874

9,857,964 (10,758,890)

(900,926)

1,987,948

3,148,910

$ 5,136,858 $

Total Governmental

Funds

38,674,497 5,029,956

60,021 295,593

1,483,091 76,064,198 5,421,429

127,028,785

75,980,572

4,416,759 4,004,311

970,082 8,262,066 2,402,115 8,890,644 8,768,238

853,073 81,710

2,138,703

5,036,000 1,839,282

123,643,555

3,385,230

15,945 11,293,696

(11,222,870)

86,771

3,472,001

21,810,798

25,282,799


RECONCILIATION OF THE ST A TEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENT AL FUNDS TO THE ST A TEMENT OF ACTIVITIES


Net change in fund balances - total governmental funds

Amounts reported for govenunental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense :

Capital outlays Depreciation expense

Governmental funds report the disposal of capital assets to the extent proceeds are received. However, the statement of activities reports the gain or loss:

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds:

Increase in taxes receivable Increase in accrued interest receivable

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 effect of certain items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities:

Principal payments on bonds Principal payments on lease obligations Amortization of discounts on debt Amortization of premiums on debt Amortization of deferred refunding charges

Certain expenses reported in the statement of activities do not require the use of current financial resources, and therefore, are not reported as expenditures in governmental funds:

Increase in accrued sick leave liability Increase in pension expense - CERS Increase in OPEB expense - CERS Increase in OPEB expense - KTRS Decrease in KSBIT assessment Decrease in accrued interest payable

Change in net position of governmental activities

Sec Noles to Financial Statemenls 17

$

$

$

$

$ 3,472,001

3,581,108 (6,629,434) {3,048,326)

(7,706)

(10,312) (211) (10,523)

5,036,000 476,960 (60,009) 26,724

(221,901) 5,257,774

(228,287) {3,293,905)

(592,851) (489,625)

18,349 681 {4,585,638)

$ 1,077,582


STATEMENT OF NET POSITION

PROPRIETARY FUNDS

June 30, 2018

Food Service Fund

ASSETS Current assets:

Cash s 1,318,184 Accounts receivable:

Operating Due from other governments 152,495

Inventory 237,699

Total current assets 1,708,378

Noncurrent assets: Capital assets 3,473,708

Less accumulated depreciation (2,811,720)

Total noncurrent assets 661,988

Total assets 2,370,366

DEFERRED OUTFLOWS OF RESOURCES Pension deferred outflows 1,266,557 Other postemployment benefits deferred outflows 461,654

Total deferred outflows of resources 1,728,211

LIABILITIES Current liabilities:

Accounts payable 4,595 Unearned revenue 99,878

Total current liabilities 104,473

Non-current liabilties: Net pension liability 4,850,434 Net other postemployment benefit liability 1,665,902

Total liabilities 6,620,809

DEFERRED INFLOWS OF RESOURCES Pension deferred inflows 153,668 Other postemployment benefits deferred inflows 87,222

Total deferred inflows on resources 240,890

NET POSITION Net investment in capital assets 661,988 Unrestricted (3,425,110)

Total net position $ (2,763.122)

See Notes to Financial Statements IS

Enterprise Funds After

School Fund

s 982,923

6,021

988,944

307,210 (223,195)

84,015

1,072,959

194,855 71,024

265,879

12,414

12,414

746,221

256,292

1,014,927

23,642 13,419

37,061

84,015 202,835

$ 286,850

Total

s 2,301,107

6,021 152,495 237,699

2,697,322

3,780,918 (3,034,915)

746,003

3,443,325

1,461,412

532,678

1,994,090

4,595 112,292

116,887

5,596,655 1,922,194

7,635,736

177,310 100,641

277,951

746,003 (3,222,275)

s (2,476,272)


STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS


Enterprise Funds Food After

Service School Fund Fund Total

Operating revenues: Charges for services $ 1,973,381 $ 1,332,882 $ 3,306,263 Other operating revenues 16,401 16,401

Total operating revenues 1,989,782 1,332,882 3,322,664

Operating expenses: Salaries and wages 2,115,582 817,211 2,932,793 Employee benefits 1,177,267 218,323 1,395,590 Professional and technical services 29,722 12,325 42,047 Property services 52,198 365 52,563 Other purchased services 168,675 1,434 170,109 Supplies and materials 4,043,350 153,373 4,196,723 Property 28,728 3,409 32,137 Miscellaneous 27,350 27,350 Depreciation 160,504 24,931 185,435

Total operating expenses 7,803,376 1,231,371 9,034,747

Operating income (loss) (5,813,594) IO 1,511 (5,712,083)

Nonoperating revenues (expenses): Federal government grants 4,526,150 44,714 4,570,864 State government grants 60,468 3,558 64,026 Donated commodities 505,506 505,506 Gain (loss) on sale of capital assets (493) (493) Interest income 16,121 11,544 27,665

Total nonoperating revenues (expenses) 5,107,752 59,816 5,167,568

Income before transfers (705,842) 161,327 (544,515)

Transfers out (70,826) (70,826)

Change in net position (776,668) 161,327 (615,341)

Net position, June 30, 2017, restated (1,986,454) 125,523 (1,860,931)

Net position, June 30, 2018 $ (2,763,122) $ 286,850 $ (2,476,272)



STATEMENT OF CASH FLOWS

PROPRJETARY FUNDS


Food Service Fund

Cash flows from operating activities: Cash received from:

Charges for services s 1,977,273 Other operating revenues 16,401

Cash paid to / for: Employees (2,698,403)

Supplies (3,619,925) Other services (306,672)

Net cash provided by (used in) operating activities (4,631,326)

Cash flows from noncapital financing activities: Federal government grants 4,526,599 State government grants 60,468

Transfers out (70,826)

Net cash provided by noncapital financing activities 4,516,241

Cash flows from capital and related financing activities:

Acquisition of capital assets (47,420)

Net cash used in capital and related financing activities (47,420)

Cash flows from investing activities: Interest income 16,121

Net cash provided by investing activities 16,121

Net increase (decrease) in cash and cash equivalents (146,384)

Cash and cash equivalents: Beginning of year I ,464,568

End of year s I ,318, I 84

Reconciliation of operating loss to net cash used in operating activities:

Operating income (loss) s (5,813,594) Adjustments to reconcile operating income (loss) to net

cash provided by (used in) operating activities: Depreciation expense 160,504 Commodities used 505,506 Changes in assets and liabilities:

Accounts receivable - operating Inventory (86,248) Accounts payable 4,168 Net other postemployment benefit liability and deferrals 503,774 Net pension liability and deferrals 90,672 Deferred revenue 3,892

Net cash provided by (used in) operating activities s (4,631,326)

Noncash noncapital financing activities: Food commodities from the U.S. Department of Agriculture s 505,506

Sec Noles to f inancial Statements 20

Entell'rise Funds After

School Fund Total

s 1,341,777 s 3,319,050 16,401

(944,081) (3,642,484) (153,373) (3,773,298)

(18,365) (325,037)

225,958 (4,405,368)

44,714 4,571,313 3,558 64,026

(70,826)

48,272 4,564,513

(30,259) (77,679)

(30,259) (77,679)

I 1,544 27,665

11,544 27,665

255,515 109,131

727,408 2,191,976

s 982,923 s 2,301,107

s 101,511 s (5,712,083)

24,931 185,435 505,506

5,581 5,581 (86,248)

(832) 3,336 77,504 581,278 13,949 104,621 3,314 7,206

s 225,958 s (4,405,368)


STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

ASSETS Cash Accounts receivable Inventory

Total assets

LIABILITIES Accounts payable Due to student groups

Total liabilities

NET POSITION

June 30, 2018


$

$

Private Purpose

Trust Fund

Agency Fund

Activity Funds

$ 1,690,266

$

4,612 22,340

1,717,218

3,502 1,713,716

1,717,218


STATEMENT OF CHANGES IN FIDUCIARY NET POSITION


Additions: Contributions

Deductions: Student support services

Change in net position




$

$

Private Purpose

Trust Fund

1,500

1,500

1. Reporting Entity


NOTES TO FINANCIAL ST A TEMENTS


The Daviess County Board of Education (Board) is the level of government which has oversight responsibilities over all activities related to public elementary and secondary school education within the jurisdiction of the Daviess County School District (District). Board members are elected by the public and have decision making authority for the District.

The financial statements of the District include the financial activities of the Board and its blended component unit in accordance with principles defining the governmental reporting entity adopted by the Governmental Accounting Standards Board, as described below.

Daviess County School District Finance Corporation - The Daviess County School District Finance Corporation (Corporation) serves as an agent of the Board in financing the acquisition, construction, and equipping of school buildings and related facilities, including the issuance of bonds. Members of the Board serve as the board of directors for the Corporation. The Corporation has no financial activity, and transactions related to bond issues in which the Corporation acts as an agent are recorded in the District's government-wide financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

Government-Wide Financial Statements - The statement of net position and the statement of activities display information about the District as a whole. These statements include the financial activities of the primary government, except for fiduciary funds. The statements distinguish between those activities of the District that are governmental and those that are considered business-type activities.

The government-wide statements are prepared using the economic resources measurement focus and the accrual basis of accounting. This is the same approach used in the preparation of the proprietary fund financial statements but differs from the manner in which governmental fund financial statements are prepared. Governmental fund financial statements, therefore, include reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds.

The government-wide statement of activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the District and for each function or program of the District's governmental activities. Direct expenses are those that are specifically associated with a service, program, or department and are, therefore, clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program, and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not

23


NOTES TO FINANCIAL STATEMENTS


2. Summary of Significant Accounting Policies, Continued

Basis of Presentation, Continued

classified as program revenues are presented as general revenues of the District, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self-financing or draws from the general revenues of the District.

Fund Financial Statements - Fund financial statements report detailed information about the District. The focus of governmental and enterprise fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Nonmajor funds are aggregated and presented in a single column. Fiduciary funds are reported by fund type.

The accounting and reporting treatment applied to a fund is determined by its measurement focus. All governmental fund types are accounted for using a flow of current financial resources measurement focus and the modified accrual basis of accounting. The financial statements for governmental funds are a balance sheet, which generally includes only current assets and current liabilities, and a statement of revenues, expenditures, and changes in fund balances, which reports on the changes in net total assets.

Proprietary funds and fiduciary funds are reported using the economic resources measurement focus and the accrual basis of accounting. The statement of cash flows provides information about how the District finances the cash flow needs of its proprietary activities.

The District reports the following funds:

Governmental Funds:

General Fund: The General Fund is the main operating fund of the Board. It accounts for financial resources used for general types of operations. This is a budgeted fund, and any fund balances are considered as resources available for use. This is a major fund of the District.

Special Revenue Funds:

Special Revenue Fund: The Special Revenue Fund accounts for proceeds of specific revenue sources ( other than expendable trusts or major capital projects) that are legally restricted to disbursements for specified purposes. It includes federal financial programs where unused balances may be returned to the grantor at the close of the specified project periods, as well as the state grant programs. Project accounting is employed to maintain integrity for the various sources of funds. The separate projects of federally-funded grant programs are identified in the Schedule of Expenditures of Federal Awards included in this report. This is a major fund of the District.

24






District Activity Fund: The District Activity Fund is used to account for funds to support co-curricular and extra-curricular activities not raised or expended by student groups.

Capital Projects Funds: Capital project funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities and equipment ( other than those financed by proprietary funds).

SEEK Capital Outlay Fund: The Support Education Excellence in Kentucky (SEEK) Capital Outlay Fund receives those funds designated by the state as Capital Outlay Funds and is restricted for use in financing projects identified in the District's facility plan.

FSPK Building Fund: The Facility Support Program of Kentucky (FSPK) Building Fund accounts for funds generated by the building tax levy required to participate in the Kentucky School Facilities Construction Commission's construction funding and state matching funds, where applicable. Funds may be used for projects identified in the District's facility plan.

Construction Fund: The Construction Fund accounts for proceeds from sales of bonds and other revenues to be used for authorized construction or renovation.

Debt Service Fund: The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, long-term debt principal and interest.

Proprietary Funds (Enterprise): Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that costs of providing goods or services be financed or recovered primarily through user charges.

Food Service Fund: The Food Service Fund is used to account for school food service activities, including the National School Lunch Program, which is conducted in cooperation with the U.S. Department of Agriculture (USDA). Revenues are primarily charges for meals. Amounts have been recorded for in-kind contributions of commodities from the USDA. This is a major fund of the District.

25






After School Fund: The After School Fund is used to account for after school programs established to provide supervised activities for students after dismissal. Revenues are primarily charges for childcare.

Fiduciary Funds:

Private Purpose Trust Fund: The Private Purpose Trust Fund accounts for assets held by the District in a trustee capacity.

School Activity Funds: The School Activity Funds are agency funds which primarily account for activities of student groups. These funds are accounted for in accordance with the Accounting Procedures for Kentucky School Activity Funds. These funds are custodial in nature and thus do not present results of operations or have a measurement focus.

Basis of Accounting

Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds also use the accrual basis of accounting.

Revenues - Exchange and Non-Exchange Transactions:

Revenues resulting from exchange transactions, in which each party receives essentially equal value, are recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenues are recorded in the fiscal year in which the resources are measurable and available. Available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District, available means expected to be received within 60 days of the fiscal year end.

Non-Exchange Transactions, in which the District receives value without directly giving equal value in return, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted; matching requirements, in which the District must

26





Basis of Accounting, Continued

provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the District on a reimbursement basis. On a modified accrual basis, revenues from Non-Exchange Transactions must also be available before they can be recognized.

Unearned Revenue - Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before the costs have been earned and eligibility requirements are met, are recorded as unearned revenue.

Expenses/Expenditures - On the accrual basis of accounting, expenses are recognized at the time they are incurred. The fair value of donated commodities used during the year is reported in the statement of revenues, expenses, and changes in net position as an expense with a like amount reported as donated commodities revenue. When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the District's policy is to first apply restricted resources.

The measurement focus of governmental fund accounting is on changes in net financial resources (expenditures) rather than revenues (expenses). Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation, are not recognized in governmental funds.

Budgetary Principles

The District's budgetary process accounts for certain transactions on a basis other than generally accepted accounting principles (GAAP). The major differences between the budgetary basis and the GAAP basis are:

Revenues are recorded when received m cash (budgetary), as opposed to when susceptible to accrual (GAAP).

Expenditures are recorded when paid in cash (budgetary), as opposed to when the obligation is incurred (GAAP).

Encumbrance Accounting

Encumbrance accounting is employed in the governmental funds . Encumbrances ( e.g., purchase orders, contracts) outstanding at year end are included in assigned fund balance. For budgetary purposes, appropriations lapse at fiscal year-end and do not constitute expenditures or liabilities because the commitments will be reappropriated in the next year.

27





Cash and Cash Equivalents

The Board considers bank demand deposit accounts to be cash equivalents.

Investments

Investments are measured at fair value on a recurring basis.

Accounts Receivable

Receivables consist of all revenues earned at year-end and not yet received. Major receivable balances for the governmental activities include federal and state funding and taxes. Balances deemed uncollectible are written off; therefore, the District does not record an allowance for doubtful accounts.

Inventory

Inventory in the General Fund consists of maintenance, instructional, and transportation supplies, stated at cost which approximates market, using the first-in, first-out (FIFO) method. Inventory in the Food Service Fund consists of purchased food valued at cost, and donated commodities valued by the U.S. Department of Agriculture at fair value on the date of donation, using the FIFO method.

Capital Assets

General capital assets are those assets not specifically related to activities reported in the proprietary funds and generally result from expenditures in the governmental funds. These assets are reported in the governmental activities column of the government-wide statement of net position but are not reported in the fund financial statements. Capital assets utilized by the proprietary funds are reported both in the business-type activities column of the governmentwide statement of net position and in the respective funds.

All capital assets are capitalized at cost ( or estimated historical cost) and updated for additions and retirements during the year. Donated fixed assets are recorded at fair market value as of the date received. The District maintains a capitalization threshold of one thousand dollars with the exception of computers and real property for which there is no threshold. The District does not possess any infrastructure. Improvements are capitalized; the cost of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset's life are not.

All reported capital assets are depreciated. Improvements are depreciated over the remaining useful lives of the related capital assets. Depreciation is computed using the straight-line method over the following useful lives for both general capital assets and proprietary fund assets per Kentucky Department of Education Guidelines:

28





Capital Assets, Continued

Description

Land improvements Buildings and improvements Technology equipment Vehicles General equipment Food service equipment

Property Taxes

Estimated Lives

20 years 25-50 years

5 years 5-10 years

I 0-20 years 12 years

Property taxes are levied by October 1 on the assessed value listed as of the prior January 1 for all real and personal property in the District. Taxes are due in one installment on December I and become delinquent by January 1 following the levy date.

The assessed value of the roll on January 1, 2017, on which the levy for the 2018 fiscal year was based, totaled $5,641,981,308. Property taxes collected are recorded as revenues in the fiscal year for which they were levied. All taxes collected are initially deposited into the General Fund and then transferred to the appropriate fund.

The tax rates assessed for the year ended June 30, 2018, to finance General Fund and FSPK Building Fund operations were 53 .1 cents and 17.4 cents per $100 valuation, respectively, for a total of 70.5 cents per $100 valuation. In addition, the tax rate assessed for motor vehicles totaled 49.0 cents per $100 valuation.

The District also levies a utility gross receipts license tax in the amount of 3% of the gross receipts derived from the furnishing within the county of telephonic and telegraphic communications services, cablevision services, electric power, water, and natural, artificial, and mixed gas.

Unearned Revenue

The District reports unearned revenue on its government-wide and fund financial statements. Unearned revenues arise when potential revenue does not meet both the "measureable" and "available" criteria for recognition in the current period (fund financial statements). Unearned revenues also arise when resources are unearned by the District and received before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures (fund financial statements and government-wide financial statements). In subsequent periods, when both revenue recognition criteria are met, or when the District has a legal claim to the resources, the liability for unearned revenue is removed from the applicable financial statement and revenue is recognized.

29





Interfund Receivables and Payables

Each fund is a distinct fiscal and accounting entity, and thus interfund transactions are recorded in each fund affected by a transaction. During the year, the General Fund receives and disburses funds that relate to other funds or activities. Transfers are then made between the various funds to more properly reflect the nature of the transactions. No amounts were receivable/payable between the funds at fiscal year-end.

Bonds and Related Premiums, Discounts, and Issuance Costs

In the government-wide financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premiums or discounts. Bond issuance costs are expensed when bonds are issued.

In governmental fund financial statements, bond premiums and discounts, as well as debt issuance costs are recognized in the current period. The face amount of the debt is reported as other financing sources. Premiums received on debt issuance are also reported as other financing sources. Discounts related to debt issuance are reported as other financing uses. Issuance costs are reported as debt service expenditures.

Pension and Other Postemployment Benefits

For purposes of measuring the net liabilities, the deferred outflows of resources and deferred inflows of resources, and expense related to pensions and other postemployment benefits (OPEB), information about the fiduciary net position of the pension/ OPEB plans, and additions to/deductions from the pension/ OPEB plans' fiduciary net position have been determined on the same basis as they are reported by the pension/ OPEB plans. For this purpose, revenues are recognized when earned. Contributions are recognized when due, pursuant to legal ( or statutory) requirements. Benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. The primary government's proportionate share of pension amounts were further allocated to proprietary funds based on the salaries paid by each proprietary fund. Plan investments are reported at fair value.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position and/or balance sheet reports a separate section for deferred outflows of resources. This separate financial statement element, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow ofresources (expense/expenditure) until that time.

30





Deferred Outflows/Inflows of Resources, Continued

In addition to liabilities, the statement of financial position and/or balance sheet reports a separate section for deferred inflows of resources. This separate financial statement element, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow ofresources (revenue) until that time.

Net Position

The District classifies net position in the government-wide financial statements as follows:

• Net investment in capital assets includes the District's capital assets (net of accumulated depreciation) reduced by the outstanding balances of bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

• Restricted net position includes assets that have third-party (statutory, bond covenant, or granting agency) limitations on their use. The District typically uses restricted assets first, as appropriate opportunities arise, but reserves the right to selectively defer the use until a future project.

• Unrestricted net position typically includes unrestricted liquid assets. The Board of Education has the authority to revisit or alter this designation.

Fund Balance Classification

The District reports fund balances in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government's fund balances more transparent. The following classifications describe the relative strength of the spending constraints:

• Nonspendable fund balance-amounts that are not in spendable form (such as inventory) or are required to be maintained intact.

• Restricted fund balance-amounts constrained to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation.

• Committed fund balance-amounts constrained to specific purposes by the District itself, using its highest level of decision-making authority (i.e., Board of Education). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest level action to remove or change the constraint.

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Fund Balance Classification, Continued

• Assigned fund balance- amounts the District intends to use for a specific purpose. Intent can be expressed by the District or by an official or body to which the Board of Education delegates the authority.

• Unassigned fund balance- amounts that are available for any purpose. Positive amounts are reported only in the General Fund.

The Board of Education establishes (and modifies or rescinds) fund balance commitments by passage of a resolution. This is typically done through adoption and amendment of the budget. A fund balance commitment is further indicated in the budget document as a designation or commitment of the fund (such as for special incentives). Assigned fund balance is established by the Board of Education through adoption or amendment of the budget as intended for specific purpose (such as the purchase of fixed assets, construction, debt service, or for other purposes).

The District would typically use Restricted fund balances first, followed by Committed resources, and then Assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend Unassigned resources first to defer the use of these other classified funds.

In the General Fund, the District strives to maintain an unassigned fund balance to be used for unanticipated emergencies of approximately 15% of the actual GAAP basis expenditures and other financing sources and uses.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, designated fund balances, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Standards

The following recently issued accounting standard was implemented by the District at June 30, 2018:

GASBS No. 75 Accounting and Financial Reporting/or Postemployment Benefits Other Than Pensions

In June of 2015, the Governmental Accounting Standards Board (GASB) issued Statement No. 75 to improve accounting and financial reporting for postemployment benefits other than pensions ( other postemployment benefits or OPEB) provided to the employees of state and local governmental employers. This Statement establishes standards for recognizing and measuring

32





Recently Issued Accounting Standards, Continued

liabilities, deferred outflows of resources, deferred inflows of resources, and expense / expenditures, as well as the related required disclosures and required supplementary information. The Statement is effective for fiscal years beginning after June 15, 2017. The cumulative effect of this change in accounting principal is disclosed in Note 18.

The following recently issued accounting standards are expected to impact the financial statements of the District in future periods:

GASBS No. 84 Fiduciary Activities

In January of 2017, the GASB issued Statement No 84 to improve guidance regarding the identification, accounting and financial reporting for fiduciary activities. This Statement establishes criteria for identifying fiduciary activities for all state and local governments, and requires that activities meeting such criteria should present a statement of fiduciary net position and a statement of changes in fiduciary net position. The Statement is effective for reporting periods beginning after December 31, 2018. The District is currently evaluating the impact the standard will have on its financial statements.

GASBS No. 87 Leases

In June of 2017, the GASB issued Statement No. 87 to improve accounting and financial reporting for leases by governments, by establishing standards for leases that previously were classified as operating leases. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset, thus requiring lessees to recognize a lease liability and an intangible right-to-use lease asset, and lessors to recognize a lease receivable and a deferred inflow of resources. The Statement is effective for reporting periods beginning after December 15, 2019. The District is currently evaluating the impact that the standard will have on its financial statements.

3. Deposits and Investments

Deposits

Kentucky Revised Statutes authorize the District to invest money subject to its control in obligations of the United States and ofits agencies and instrumentalities; certificates of deposit or other interest-bearing accounts of any bank or savings and loan institution which are insured by the Federal Deposit Insurance Corporation or similar entity, providing such ·institutions pledge as security obligations, as permitted by KRS 41.240 ( 4), having a current quoted market value at least equal to uninsured deposits; commercial paper rated in the highest category by a nationally recognized rating agency; bonds or certificates of indebtedness of the State of Kentucky and of its agencies and instrumentalities; securities issued by a state or local government, or any instrumentality or agency thereof in the United States, and rated in one of the three highest categories by a nationally recognized rating agency; and shares of mutual funds as more fully described in KRS 66.480.

33




3. Deposits and Investments, Continued

Deposits, Continued

The District maintains a common checking account for all governmental funds and the trust fund. The Food Service Fund and After School Fund (proprietary funds) each maintain separate bank accounts.

At June 30, 2018, the District's bank balances were fully collateralized by FDIC insurance and securities pledged by the District's financial institution.

Due to the nature of the accounts and limitations imposed by the purposes of the various funds, all cash balances are considered to be restricted except for the General Fund.

Investments

At June 30, 2018, the District had the following investments and maturities:

Maturities in Years Less

Type Fair Value Than I 1-5 6-10 10+ None

Cash equivalents $ 13,180 $ $ $ $ $ 13,180

Fixed income:

Bank certificates of deposit 1,918,111 274,326 914,167 682,460 47,158

Corporate bonds and notes 72,910 72,910

U.S. government agencies obligations 2,468,573 82 614,276 1,619,307 234,908

U.S Treasury bonds and notes 347,813 250,781 97,032

Mutual funds 459,620 459,620

Total investments $ 5,280,207 $ 525,189 $ 1,625,475 $ 2,374,677 $ 282,066 $ 472,800

Custodial Credit Risk

Custodial credit risk is the risk that in the event of a failure of the counterparty, a government may not be able to recover the value of its investments that are in the possession of an outside party. The District's deposit policy for custodial credit risk requires compliance with the provisions of state law. The mutual funds were rated between three and five stars by Morningstar. Investments of the District held in U.S. government agency obligations carry the explicit guarantee of the U.S. government and, therefore, are not subject to custodial credit risk.

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The District does not have a

34





Interest Rate Risk, Continued

fonnal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The table above details the District's exposure to this risk.

Concentration of Credit Risk

The District, in accordance with KRS 66.480, limits the amount that may be invested at any time in uncollateralized certificates of deposit, bankers acceptances, commercial paper, and securities issued by a state or local government or any instrumentality or agency thereof, to 20% of the total amount of funds invested by the District. At June 30, 2018, the District did not exceed this limit. In addition, amounts invested in any one issuer did not exceed 5% of total investments at fiscal year-end.

Fair Value Measurements

The District categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset's fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The District does not have any investments that are measured using Level 3 inputs. The fair value measurements of the District's investments at June 30, 2018, are as follows:

Quoted Prices in Active Significant

Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs

Fair Value (Level 1) (Level 2) (Level 3)

Cash equivalents $ 13,180 $ 13,180 $ $

Fixed income:

Bank certificates of deposit 1,918,111 1,918,111 Corporate bonds and notes 72,910 72,910 U.S.govenunentagency

obligations 2,468,573 2,468,573 U.S. Treasury bonds and

notes 347,813 347,813

Mutual funds 459,620 459,620

Total investments $ 5,280,207 $ 2,390,911 $ 2,889,296 $

35





Fair Value Measurements, Continued

The following is a description of the valuation methodologies used for the fair value measurements. There have been no changes in the methodologies used since the prior fiscal year end.

Interest bearing cash and bank certificates of deposit: The carrymg amount approximated fair value due to the short-tenn highly-liquid nature.

C01porate bonds, and U.S. government and Treaswy securities: Valued using pricing models that incorporate market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data.

Mutual funds: Valued at the daily closing price as reported by the fund, based on quoted market prices. Mutual funds held by the District are open-end mutual funds that are registered with the U.S. Securities and Exchange Commission. These funds are required to publish their daily net asset value (NA V) and to transact at that price. The mutual funds held by the District are deemed to be actively traded.

Investment Earnings

Investment earnings for the year ended June 3 0, 2018, consisted of:

Governmental activities: Interest and dividend income Net increase (decrease) in fair value of investments Realized gain (loss) on sale of investments Investment expenses

Business-type activities: Interest and dividend income

$

$

502,497 (167,718)

(28,645) (10,752)

295,382

27,665

323,047

Realized gains or losses on investments that had been held in more than one fiscal year and sold in the current year were included as a net change in the fair value of investments reported in prior years and the current year.

36




4. Capital Assets

Capital asset activity for the year ended June 30, 2018, was as follows:

Balance Balance June 30, 201 7 Increase Decrease June 30, 2018

Governmental activities: Capital assets, not being

depreciated: Land $ 4,244,370 $ $ $ 4,244,370 Construction in progress 2,319,308 2,139,765 (3,075,909} 1,383,164

Total capital assets, not being depreciated 6,563,678 2,139,765 {3,075,909) 5,627,534

Capital assets, being depreciated: Land improvements 3,281,426 3,281,426 Buildings and improvements 156,058,461 3,075,909 159,134,370 Technology equipment 15,303,701 578,589 (642,084) 15,240,206 Vehicles 11,329,003 768,464 (488,572) 11,608,895 General equipment 4,675,050 94,290 (4,833} 4,764,507

Totals capital assets, being depreciated 190,647,641 4,517,252 (I, 135,489) 194,029,404

Less accumulated depreciation: Land improvements (2,193,349) (83,783) (2,277,132) Buildings and improvements (63,948,456) (4,165,785) (68,114,241) Technology equipment (12,169,798) (1,329,983) 634,378 (12,865,403) Vehicles (7,242,994) (828,382) 488,572 (7,582,804) General equipment (3,686, I 02) (221,501 ) 4,833 (3,902,770)

Total accumulated depreciation (89,240,699) (6,629,434) 1,127,783 (94,742,350}

Total capital assets, being depreciated, net 101,406,942 (2,112,182} (7,706) 99,287,054

Governmental activities: Capital assets, net $ I 07, 970,620 $ 27,583 $ (3,083,615) $ 104,914,588

Business-tyye activities: Capital assets, being depreciated:

Land improvements $ 15,452 $ $ $ 15,452 Technology equipment 430,258 18,644 (1,536) 447,366 Vehicles 39,779 39,779 General equipment 3,219,286 59,035 3,278,321

Total capital assets, being depreciated 3,704,775 77,679 (1,536} 3,780,918

Less accumulated depreciation: Land improvements (9,272) (773) (10,045) Technology equipment (366,827) (23,833) 1,043 (389,617) Vehicles (28,814) (4,245) (33,059) General equipment (2,445,6102 (156,584} (2,602,194 2

Total accumulated depreciation (2,850,523} {185,435} 1,043 (3,034,915}

Business-type activities: Capital assets, net $ 854,252 $ (107,756) $ (493) $ 746,003

37



YearEndedJune30,2018

4. Capital Assets, Continued

5.

Depreciation expense was charged to governmental functions, as follows:

Instructional $ 3,814,678 Support services:

Student 1,667 Instructional staff 2,957 District administration 36,722 School administration 58 Business support 16,968 Plant operations and maintenance 1,942,416 Student transportation 813,968

Total depreciation expense $ 6,629,434

Long-Term Liabilities

Long-term liability activity for the year ended June 30, 2018, was as follows:

Balance Balance Due June 30, June 30, Within

2017 Additions Deductions 201 8 One Year

Governmental activities: Long-tenn debt:

School building revenue bonds $ 70,543,000 $ $ (5,036,000) $ 65,507,000 $ 5,138,000

Deferred amounts: For issuance premiums 280,137 (26,724) 253,413 For issuance discounts (528,477) 60,009 (468,468)

Capital lease obligations 874,618 {476,960) 397,658 295,633

Total long-term debt 71,169,278 {5,479,675) 65,689,603 5,433,633

KSBIT assessment 73,394 {18,349) 55,045 18,349

Compensated absences: Accrued sick leave 2,818,655 609,753 (381,466) 3,046,942 483,615

Total governmental activities $ 74,061,327 $ 609,753 $ (5,879,490) $ 68,791,590 $ 5,935,597

The KSBIT assessment is expected to be liquidated by the General Fund. Compensated absences and the net pension liability are expected to be liquidated by the funds which incurred the related salary and wage costs.

School Building Revenue Bonds

The District is obligated to make lease payments in amounts equal to annual debt service requirements on bonds issued by the Daviess County School District Finance Corporation and

38




5. Long-Term Liabilities, Continued

School Building Revenue Bonds, Continued

the Kentucky School Facilities Construction Commission (Commission) to construct or renovate school facilities. The Board has an option to purchase the properties at any time by retiring the bonds outstanding. These lease payments are recorded in the Debt Service Fund.

In addition, the District has entered into participation agreements with the Commission. The Commission was created by the Kentucky Legislature for the purpose of assisting local school districts in meeting school construction needs.

A summary of District and Commission bond activity for the year ended June 30, 2018, is as follows:

District Commission Total

Balance, June 30, 2017 $ 68,827,169 $ 1,715,831 $ 70,543,000 Issued Defeased Retired (4,965,267) (70,733) (5,036,000)

Balance, June 30, 2018 $ 63 ,861,902 $ 1,645,098 $ 65 ,507,000

A summary of the interest rates, maturities, and balances is as follows:

Balance, June 30, 2018 Range of Interest Final Rates Maturity District Commission Total

2007B Issue 4.125 - 4.250% 2018 $ 605,000 $ $ 605,000 2008A Issue 3.00 - 3.400% 2020 825,000 825 ,000 2011 Issue 0.75 - 2.125% 2023 8,085 ,000 8,085,000 2012 Issue 2.00 - 2.500% 2024 2,550,000 2,550,000 2013A Issue 1.50 - 3.250% 2033 1,610,000 1,610,000 2013B Issue 1.00 - 2.000% 2026 2,880,000 2,880,000 2014 Issue 0.35 - 3.625% 2034 7,785,000 7,785,000 2014B Issue 1.35 - 3.750% 2035 592,000 592,000 2014C Issue 1.50 - 3.600% 2027 1,645,000 1,645,000 2015A Issue 2.00 - 3.625% 2035 8,349,346 1,065,654 9,415,000 2015B Issue 2.00 - 3.000% 2030 8,400,000 8,400,000 2015C Issue 2.00 - 3.000% 2027 7,050,000 7,050,000 2016A Issue 1.00 - 3.000% 2027 2,215,000 2,215,000 2016B Issue 1.00 - 3.000% 2030 1,590,000 1,590,000 2016C Issue 2.00 - 3.000% 2036 4,480,000 4,480,000 2017A Issue 3.00% 2028 3,585,000 3,585,000 2017B Issue 2.00 - 3.000% 2037 1,615,556 579,444 2,195,000

$ 63,861,902 $ 1,645,098 $ 65,507,000

39





School Building Revenue Bonds, Continued

The bonds may be called prior to maturity and redemption premiums are specified in each issue. Assuming no bonds are called prior to scheduled maturity, the minimum obligations of the District and amounts to be paid by the Commission, at June 30, 2018, for debt service (principal and interest) are as follows:

Daviess County Kentucky School Facility School District Construction Commission

Year Ending District Commission

June 30, Princieal Interest Total Princieal Interest Total Total

2019 $ 5,066,685 $ 1,8 I 5,833 $ 6,882,518 $ 71,315 $ 53,517 $ 124,832 $ 7,007,350 2020 5,179,545 1,691,323 6,870,868 73,455 51,377 124,832 6,995,700 2021 5,303,341 1,561,260 6,864,601 75,659 49,173 124,832 6,989,433 2022 5,416,072 1,436,999 6,853,071 77,928 46,904 124,832 6,977,903 2023 5,529,734 1,307,039 6,836,773 80,266 44,565 124,831 6,961,604 2024-2028 22,610,288 4,394,939 27,005,227 440,712 183,445 624,157 27,629,384

2029-2033 10,985,470 1,636,064 12,621,534 515,530 108,625 624,155 13,245,689 2033-2037 3,770,767 213,972 3,984,739 310,233 22,183 332,416 4,317,155

$ 63,861,902 $ 14,057,429 $ 77,919,331 $ 1,645,098 $ 559,789 $ 2,204,887 $ 80,124,219

Generally, all bonds issued are secured by a statutory mortgage lien on the respective school buildings and appurtenant properties, including any subsequent additions thereto. The amount of interest expense on bonds payable for the year ended June 30, 2018, totaled $2,102,627, of which $2,048,529 was incurred by the District, and $54,098 was paid by the Commission.

The District defeased various revenue bonds in prior years by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on old bonds. Accordingly, the trust account assets and the liabilities relating to all of these defeased bonds are not included in the District's financial statements. On June 30, 2018, $28,880,000 of bonds outstanding are considered defeased.

Capital Lease Obligations

The District is obligated under leases for equipment that are accounted for as capital leases. Assets under capital leases at June 30, 2018, totaled $457,403, net of accumulated depreciation of $4,240,715. Amortization of these capital leases included in depreciation expense totaled $474,667 for the year ended June 30, 2018. The following is a schedule by year of future minimum lease payments under capital lease obligations, including interest, at rates ranging between 2.585% to 11.867%, together with the present value of the future minimum lease payments as of June 30, 2018:

40





Capital Lease Obligations, Continued

2019 2020

Total minimum lease payments Less amount representing interest

Present value of future minimum lease payments

$

$

313,815 106,789

420,604 22,946

397,658

Interest expense on capital lease obligations for the year ended June 30, 2018, totaled $27,648.

KSBIT Assessment

In years prior to fiscal year 2000, the District participated in the Kentucky School Boards Insurance Trust, which has become insolvent. In accordance with the original participation agreement and a court order dated June 4, 2014, each participant in the trust in any prior year was levied an assessment to cover the deficit in order to close the trust. Installment amounts to be paid by the District are as follows:

Year Ending June 30:

2019 2020 2021

Compensated Absences

$ 18,349 18,348 18,348

$ 55,045

Upon retirement, as defined by the Teachers' Retirement System of the State of Kentucky or the County Employees Retirement System, certified and classified employees received an amount equal to 30% of the value of accumulated sick leave based on the individual final salary. This liability totaled $3,046,942 at June 30, 2018, and is recorded as a long-term liability in the district-wide financial statements. Unused accumulated vacation leave does not vest, and, therefore, is not recorded as a liability in the financial statements.

For governmental fund financial statements, the amount of compensated absences recorded as a liability would be the amount expected to be paid using expendable available resources. These obligations for June 30, 2018, were paid prior to fiscal year end and, therefore, no amount has been accrued in the governmental fund financial statements.

6. Leases

The District leases equipment under cancelable operating leases. Commitments under these agreements provide for minimum future rental payments as of June 30, 2018, as follows:

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6. Leases, Continued

Year ending June 30: 2019 2020 2021 2022

Total minimum rentals

$ 104,663 85,220 54,524

7,884

$ 252,291

Rental expense for operating leases, including contingent rentals on a per copy basis of $114,791 totaled $231,367 for the year ended June 30, 2018.

7. Pension Benefits - Teachers' Retirement System of the State of Kentucky

Plan Description

Teaching-certified employees of the Kentucky School District are provided pensions through the Teachers' Retirement System of the State of Kentucky (KTRS)- a cost-sharing multipleemployer defined benefit pension plan with a special funding situation established to provide retirement annuity plan coverage for local school districts and other public educational agencies in the state. KTRS was created by the 193 8 General Assembly and is governed by Chapter 161 Section 220 through Chapter 161 Section 990 of the Kentucky Revised Statutes (KRS). KTRS is a blended component unit of the Commonwealth of Kentucky and therefore is included in the Commonwealth's financial statements. KTRS issues a publicly available financial report that can be obtained at https://trs.ky.gov/financial-reports-infonnation.

Benefits Provided

For members who have established an account in a retirement system administered by the Commonwealth prior to July 1, 2008, members become vested when they complete five (5) years of credited service. To qualify for monthly retirement benefits, payable for life, members must either:

1. Attain age fifty-five (55) and complete five (5) years of Kentucky service, or 2. Complete 27 years of Kentucky service.

Participants that retire before age 60 with less than 27 years of service receive reduced retirement benefits. Non-university members with an account established prior to July 1, 2002, receive monthly payments equal to two (2) percent (service prior to July 1, 1983) and two and one-half (2.5) percent (service after July 1, 1983) of their final average salaries for each year of credited service. New members (including second retirement accounts) after July 1, 2002, will receive monthly benefits equal to 2% of their final average salary for each year of service if, upon retirement, their total service is less than ten years. New members after July 1, 2002, who retire with ten or more years of total service will receive monthly benefits equal to 2.5% of their final average salary for each year of service, including the first ten years. In addition, members who retire July 1, 2004, and later with more than 30 years of service will have their multiplier increased for all years over 30 from 2.5% to 3.0% to be used in their benefit calculation. Effective July 1, 2008, the System has been amended to change the benefit structure for members hired on or after that date.

42




7. Pension Benefits -Teachers' Retirement System of the State of Kentucky, Continued

Final average salary is defined as the member's five (5) highest annual salaries for those with less than 27 years of service. Members at least age 55 with 27 or more years of service may use their three (3) highest annual salaries to compute the final average salary. KTRS also provides disability benefits for vested members at the rate of sixty (60) percent of the final average salary. A life insurance benefit, payable upon the death of a member, is $2,000 for active contributing members and $5,000 for retired or disabled members.

Cost ofliving increases are one and one-half (1.5) percent annually. Additional ad hoc increases and any other benefit amendments must be authorized by the General Assembly.

Contributions

Contribution rates are established by Kentucky Revised Statutes. Members are required to contribute 12.855% of their salaries to KTRS for the year ended June 30, 2018. The State, as a non-employer contributing entity, contributes 13. I 05% of the salaries of school district members who joined before July I, 2008 and 14.105 % for those who joined thereafter. For local school district members whose salaries are federally funded, the District contributes 16.105% of salaries.

If an employee leaves covered employment before accumulating five (5) years of credited service, accumulated employee pension contributions plus interest are refunded to the employee upon the member's request.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

Because the State, as a non-employer contributing entity, is required by Kentucky Revised Statutes to contribute 100% of the District's contractually required contributions, the District reports no pension liabilities, pension expenses, deferred outflows of resources, or deferred inflows of resources related to KTRS.

The portion of the KTRS net pension liability that was associated with the District recognized at June 30, 2018, was as follows:

District's proportionate share of the net pension liability

State's proportionate share of the net pension liability associated with the District

Total

43

$

427,477,363

$ 427,477,363





Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions, Continued

The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2016. The net pension liability associated with the District was based on a projection of the District's long-term share of contributions to the pension plan relative to the projected contributions of all participating school districts and the State, actuarially determined. At June 30, 2017, the measurement date, the District's proportion of the KTRS net pension liability was 1.5843%, an increase of .0057% from its proportion measured as of June 30, 2016, of 1.5786%.

For the year ended June 30, 2018, the District recognized on-behalf pension expense and revenue of $15,188,017 for contributions provided by the State.

Actuarial Assumptions

The total pension liability in the June 30, 2016, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation

Salary increases, including inflation

Long-term investment rate of return, net of pension plan investment expense, including inflation

Municipal Bond Index Rate:

Prior Measurement Date

Measurement Date

Year FNP is projected to be depleted

Single Equivalent Interest Rate, net of pension plan investment expense, including inflation:

Prior Measurement Date

Measurement Date

Post-Retirement Benefit Increases

44

3.00%

3.50 to 7.30%

7.50%

3.01 %

3.56 %

2038

4.20 %

4.49 %

1.50% annually





Actuarial Assumptions. Continued

Mortality rates were based on the RP-2000 Combined Mortality Table for Males and Females, as appropriate, with adjustments for mortality improvements based on a projection of Scale BB to 2025, set forward two years for males and one year for females, with a setback of one year for females.

The actuarial assumptions used in the June 30, 2016, valuation were based on the results of an actuarial experience study for the period July 1, 2010, to June 30, 2015, adopted by the KTRS Board on November 19, 2016.

The long-term expected rate ofreturn on pension plan investments was determined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return ( expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate ofretum by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Long-Term Expected Asset Class Target Allocation Real Rate of Return

U.S. equity 42% 4.4%

International 20% 5.3%

Fixed income 16% 1.5%

Additional categories 9% 3.6%

Real estate 5% 4.4%

Private equity 6% 6.7%

Cash 2% 0.8%

100%

45




7. Pension Benefits - Teachers' Retirement System of the State of Kentucky, Continued

Discount Rate

The discount rate used to measure the total pension liability (TPL) as of the Measurement Date was 4.49%. The projection of cash flows used to determine the discount rate was performed in accordance with GASB 67. KTRS assumed that Plan member contributions will be made at the current contribution rates and that employer contributions will be made at statutorily required rates. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members until the 2038 plan year and, as a result, the Municipal Bond Index Rate was used in the detennination of the SEIR. There was a change in the Municipal Bond Index Rate from the Prior Measurement Date to the current Measurement Date, so as required under GASB 68, the SEIR at the Measurement Date of 4.49% was calculated using the Municipal Bond Index Rate as of the Measurement Date (3.56%).

Sensitivity of the District's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate

The following presents the State's proportionate share of the net pension liability associated with the District using the discount rate of 4.49%, as well as what the State's proportionate share of the net pension liability associated with the District would be if it were calculated using a discount rate that is I-percentage-point lower (3.49%) or I-percentage-point higher (5.49%) than the current rate:

1 % decrease

Current discount rate

1 % increase

Plan Fiduciary Net Position

Discount rate

3.49%

4.49%

5.49%

State's proportionate share of net pension liability associated with the District

$529.906,731

$427,477,363

$343,428,937

Detailed information about the KTRS fiduciary net position is available in the publicly available financial report.

Payable to the Pension Plan

Because the State is required by statute to contribute 100% of the District's contractually required pension contributions, the District reports no payable for such pension contributions at June 30, 2018.

46




8. Other Postemployment Benefits -Teachers' Retirement System of the State of Kentucky

Medical Insurance Plan (MIP)

Plan description - In addition to the pension benefits described in Note 7, Kentucky Revised Statute 161.675 requires KTRS to provide post-employment healthcare benefits to eligible members and dependents. The MIP is a cost-sharing multiple employer defined benefit plan with a special funding situation. Changes made to the medical plan may be made by the KTRS Board of Trustees, the Kentucky Department of Employee Insurance and the General Assembly.

Benefits provided - To be eligible for medical benefits, the member must have retired either for service or disability. The MIP offers coverage to members under the age of 65 through the Kentucky Employees Health Plan administered by the Kentucky Department of Employee Insurance. KTRS retired members are given a supplement to be used for payment of their health insurance premium. The amount of the member's supplement is based on a contribution supplement table approved by the KTRS Board of Trustees. The retired member pays premiums in excess of the monthly supplement. Once retired members and eligible spouses attain age 65 and are Medicare eligible, coverage is obtained through the KTRS Medicare Eligible Health Plan.

Contributions - In order to fund the post-retirement healthcare benefit, seven and one-half percent (7.50%) of the gross annual payroll of members is contributed. Three percent (3.75%) is paid by member contributions and three quarters percent (.75%) from State appropriation and three percent (3.00%) from the employer. The State contributes the net cost of health insurance premiums for members who retired on or after July 1, 2010, who are in the non-Medicare eligible group. Also, the premiums collected from retirees as described in the plan description and investment interest help meet the medical expenses of the plan.

At June 30, 2018, the District reported a liability for its proportionate share of the collective net OPEB MIP liability and the related deferred ouflows or deferred inflows.

Life Insurance Plan (LIP)

Plan description - KTRS also administers a life insurance plan as provided by Kentucky Revised Statute 161.655 to eligible active and retired members. The LIP is a cost-sharing multiple employer defined benefit plan with a special funding situation. Changes made to the life insurance plan may be made by the KTRS Board of Trustees and the General Assembly.

Benefits provided- KTRS provides a life insurance benefit of five thousand dollars payable for members who retire based on service or disability. KTRS provides a life insurance benefit of two thousand dollars payable for its active contributing members. The life insurance benefit is payable upon the death of the member to the member's estate or to a party designated by the member.

47




8. Other Postemployment Benefits -Teachers' Retirement System of the State of Kentucky, Continued

Life Insurance Plan (LIP), Continued

Contributions - In order to fund the post-retirement life insurance benefit, three hundredths of one percent (.03 %) of the gross annual payroll of members is contributed by the State. Employers do not contribute to the LIP.

At June 30, 2018, the District did not report a liability for a proportionate share of the collective net OPEB LIP liability, nor any related deferred outflows or deferred inflows, because the State of Kentucky provides the OPEB LIP support directly to KTRS on behalf of the District, and the District does not contribute to the LIP.

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs

At June 30, 2018, the District reported a liability of $29,906,000 for its proportionate share of the collective net MIP OPEB liability that reflected a reduction for state MIP OPEB support provided to the District. The collective net MIP OPEB liability was measured as of June 30, 2017, and the total MIP OPEB liability used to calculate the collective net MIP OPEB liability was based on a projection of the District's long-term share of contributions to the MIP OPEB plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2017, the District's proportion was 0.838680%. The District's proportion was not measured at June 30, 2016 prior to the issuance of GASBS No. 75, and thus the change in the proportion is not disclosed.

The amount recognized by the District as its proportionate share of the OPEB liabilities, the related State support, and the total portion of the net OPEB liabilities associated with the District were as follows:

MIP LIP

District's proportionate share of the net OPEB liability $ 29,906,000 $

State's proportionate share of the net OPEB liability associated with the District 24,428,000 327,000

Total $ 54,334,000 $ 327,000

For the year ended June 30, 2018, the District recognized MIP OPEB expense of$2,385, 182 and on-behalf MIP revenue of $1,188,106 for support provided by the State. For the year ended June 30, 2018, the District recognized on-behalf LIP OPEB expense of$19,264 and revenue of

48




8. Other Postemployment Benefits-Teachers' Retirement System of the State of Kentucky, Continued

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs, Continued

$19,264 for support provided by the State. At June 30, 2018, the District reported deferred outflows of resources and deferred inflows of resources related to the MIP OPEB from the following sources:

Differences between expected and actual experience

Changes of assumptions

Net difference between projected and actual earnings on plan investments

Changes in proportion and differences between contributions and proportionate share of contributions

District contributions subsequent to the measurement date

Total

$

$

Deferred Outflows of • Resources

1,456,375

MIP

$

Deferred Inflows of Resources

385,000

1,456,375 $ 385,000 =======~-

Of the total amount reported as deferred outflows of resources related to the MIP OPEB, $1 ,456,375 resulting from District contributions subsequent to the measurement date and before the end of the fiscal year will be included as a reduction of the collective net MIP OPEB liability in the year ended June 3 0, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to MIP OPEB will be recognized in the District's MIP OPEB expense as follows:

Year ended June 30,

2019 2020 2021 2022

$ 96,000 96,000 96,000 97,000

$ 385,000

49






Actuarial assumptions - The total MIP and LIP OPEB liabilities in the June 30, 2016, actuarial valuation were determined using the following actuarial assumptions, applied to all periods included in the measurement:

Investment rate of return, net of OPEB plan investment expense, including inflation:

MIP LIP

Projected salary increases Inflation rate Real Wage Growth Wage Inflation Healthcare cost trend rates,

MIP only: Under 65

Ages 65 and Older

Medicare Part B Premiums

Municipal Bond Index Rate Discount Rate:

MIP LIP

Single Equivalent Interest Rate, net of OPEB plan investment expense, including inflation:

MIP LIP

8.00% 7.50% 3.50 - 7.20%, including inflation 3.00% 0.50% 3.50%

7.75% for FY 2017 decreasing to an ultimate rate of 5.00% by FY 2023 5.75% for FY 2017 decreasing to an ultimate rate of 5.00% by FY 2020 1.02% for FY 2017 with an ultimate rate of 5.00% by 2029 3.56%

8.00% 7.50%

8.00% 7.50%

Mortality rates were based on the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB and set forward two years for males and one year for females is used for the period after service retirement and for dependent beneficiaries. The RP-2000 Disabled Mortality Table set forward two years for males and seven years for females is used for the period after disability retirement.

50






The remaining actuarial assumptions ( e.g. initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2016, valuation were based on a review ofrecent plan experience done concurrently with the June 30, 2016, valuation.

The long-term expected rate of return on OPEB plan investments was detennined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates of return ( expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

The target allocation and best estimates of arithmetic real rates ofreturn for each major asset class, as provided by KTRS's investment consultant, are summarized in the following table:

MIP and LIP

Target Allocation 30 Year Expected Geometric Real

Asset Class MIP LIP Rate of Return

Global Equity 60.0% 0.0% 5.1% U.S. Large Cap Equity 0.0 38.4 4.3% U.S. Small Cap Equity 0.0 2.6 4.8% Developed Int'l Equity 0.0 15.8 5.2% Emerging Markets Equity 0.0 4.2 5.4% Fixed Income 9.0 16.0 1.2% Real Estate 4.5 6.0 4.0% Private Equity 5.5 7.0 6.6% High Yield 10.0 2.0 4.3% Other Additional Categories 10.0 7.0 3.3% Cash (LIBOR) 1.0 1.0 0.5%

Total 100% 100%

Discount rate - The discount rates used to measure the total MIP and LIP OPEB liabilities were 8.00% and 7 .50%, respectively. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rates and the MIP employer contributions will be made at statutorily required rates. Based on those assumptions, the OPEB plans' fiduciary net position were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected

51






rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liabilities.

The following table presents the District's proportionate share of the collective net MIP OPEB liability, calculated using the discount rate of 8.00%, as well as what the District's proportionate share of the collective net MIP OPEB liability would be if it were calculated using a discount rate that is I-percentage-point lower (7.00%) or I-percentage-point higher (9.00%) than the current rate:

1 % decrease (7.00%)

Current discount rate

(8.00%) 1 % increase

(9.00%)

Net MIP OPEB liability $ 34,825,568 $ 29,906,000 $ 25,810,946

Sensitivity of the District's proportionate share of the collective net MIP OPEB liability to changes in the healthcare cost trend rates - The following presents the District's proportionate share of the collective net MIP OPEB liability, as well as what the District's proportionate share of the collective net MIP OPEB liability would be if it were calculated using healthcare cost trend rates that were I-percentage-point lower or I-percentage-point higher than the current healthcare cost trend rates:

1 % decrease Current

trend rate 1 % increase

Net MIP OPEB liability $ 25,045,326 $ 29,906,000 $ 35,907,125

OPEB plans 'fiduciary net position - Detailed information about the OPEB plans' fiduciary net position is available in the separately issued KTRS financial report.

Payable to the OPEB Plans

The District reported payables of $0 for the outstanding amount of MIP and LIP OPEB contributions due to the Plans at June 3 0, 2018.

9. Pension and Other Postemployment Benefits - County Employees Retirement System

Plan Description

The District contributes to the County Employees Retirement System (CERS), which is a costsharing multiple-employer defined benefit pension I OPEB plan administered by Kentucky

52




9. Pension and Other Postemployment Benefits - County Employees Retirement System, Continued

Plan Description, Continued

Retirement Systems (KRS) that covers members employed in positions of each participating county, city, and school board, and any additional eligible local agencies electing to participate in CERS. Kentucky Revised Statute Section 61.645 assigns the authority to establish and amend benefit provisions to the Board of Trustees of Kentucky Retirement Systems (Board). KRS issues a publicly available financial report that can be obtained at www.kyret.ky.gov.

Benefits Provided

CERS provides for retirement, disability, and death benefits to system members through its Pension Fund, as well as other postemployment benefits (OPEB) for hospital and medical insurance through its Insurance Fund.

Retirement benefits may be extended to beneficiaries of members under certain circumstances. Retirement benefits are detennined using a formula which considers the member's final compensation; benefit factors set by statute which vary depending upon the type / amount of service, participation date, and retirement date; and years of service. Plan members with a participation date prior to September I, 2008, are eligible to retire with full benefits at any time with 27 or more years of service credit, or at age 65 with at least 4 years of service credit. Plan members with a participation date on or after September I , 2008, are eligible to retire with full benefits at age 57 if the member's age and years of service equal 87, or at age 65 with at least 5 years of service credit.

Other postemployment benefits provided by CERS consist of prescribed contributions for whole or partial payments of required premiums to purchase hospital and medical insurance.

Contributions

State statute requires active members to contribute 5% of creditable compensation. For members participating on or after September I, 2008, an additional I% of creditable compensation is required. This amount is credited to the Insurance Fund and is non-refundable to the member. Employers contribute at the rate determined by the KRS Board to be necessary for the actuarial soundness of the systems, as required by KRS 61.565 and KRS 61. 752.

The District's actuarially determined contribution rates and contribution amounts, based on annual creditable compensation, for the year ended June 30, 2018, were as follows:

Pension

OPEB

Total

Contribution Rates

14.48%

4.70%

19.18% ~---~=~ 53

Contributions

$ 2,350,081

762,802

$ 3,112,883





Liabilities, Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions and OPEB

The net pension and OPEB liabilities reported as of June 30, 2018, were measured as of June 30, 2017, and the total pension and OPEB liabilities used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2016. The District's proportion of the liabilities was based on a projection of the District's long-term share of contributions to the plan relative to the projected contributions of all participating entities, actuarially determined. At the June 30, 2017, measurement date, the District's pension and OPEB proportion was 0.637435%, a decrease of 0.006434% from its proportion measured as of June 30, 2016, of 0.643869%.

The District's pension and OPEB liabilities and expense as of and for the year ended June 30, 2018, were as follows:

Net Pension Net OPEB Liabilit)::'. Liabilit)::'.

Proportionate Share $ 37,311,030 $ 12,814,624

Pension/OPEB Expense $ 6,232,822 $ 1,462,728

At June 30, 2018, the District reported deferred outflows ofresources and deferred inflows of resources related to pensions and OPEB from the following sources:

Pension OPEB

Deferred Deferred Deferred Deferred

Outflows of Inflows of Outflows of Inflows of

Resources Resources Resources Resources

Differences between expected and actual experience s 46,278 s 947,114 s $ 35,592

Changes of assumptions 6,884,896 2,788,381

Net difference between projected and actual earnings on plan investments 461,495 605,612

Changes in proportion and differences between contributions and proportionate share of contributions 234,953 29,733

Contribut ions subsequent to the measurement date 2,350,081 762,802

Total $ 9,742,750 $ 1,182,067 s 3,551,183 s 670,937

The $2,350,081 and $762,802 of deferred outflows of resources resulting from the District' s pension and OPEB contributions subsequent to the measurement date will be recognized as a

54





Liabilities, Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions and OPEB, Continued

reduction of the net pension and OPEB liabilities in the year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources will be recognized in pension and OPEB expense as follows:

Pension OPEB Year ending June 30,

2019 $ 2,729,562 $ 364,328 2020 2,741,343 364,328 2021 1,218,788 364,328 2022 (479,091) 364,328 2023 515,731 2024 144,401

$ 6,210,602 $ 2,117,444

Actuarial Assum12tions

The total pension / OPEB liabilities in the June 30, 2016, actuarial valuation were determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation

Salary increases

Investment rate of return

Healthcare cost trend rates (OPEB)

2.30%

2.00% average

6.25%, net of investment expenses

Initial trend starting at 7.50% for Pre-65, or 5.5% for Post-65, and gradually decreasing to an ultimate trend rate of 5% over a period of 5 years for Pre-65, or 2 years for Post-65

Mortality rates were based on the following assumptions and assume a margin for future mortality improvement:

Pre-retirement mortality: RP-2000 Combined Mortality Table projected with Scale BB to 2013. Male mortality rates are multiplied by 50% and female mortality rates are multiplied by 30%.

Post-retirement mortality (non-disabled): RP-2000 Combined Mortality Table projected with Scale BB to 2013. Female mortality rates are set back one year.

55





Actuarial Assumptions, Continued

Post-retirement mortality (disabled): RP-2000 Combined Disabled Mortality Table projected with Scale BB to 2013. Male mortality rates are set back four years.

The actuarial assumptions used in the June 30, 2016, valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2013.

The long-tenn expected rate of return was detennined by using a building-block method in which best-estimate ranges of expected future real rate of returns are developed for each asset class. The ranges are combined by weighting the expected future real rate of return by the target asset allocation percentage. The target allocation and best estimates of arithmetic real rate of return for each major asset class are summarized in the tables below.

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Long-Tenn Target Expected Real Rate

Asset Class Allocation of Return

US equity 17.50% 5.97% International equity 17.50% 7.85% Global bonds 4.00% 2.63% Global credit 2.00% 3.63% High yield 7.00% 5.75% Emerging market debt 5.00% 5.50% Private credit 10.00% 8.75% Real estate 5.00% 7.63% Absolute return 10.00% 5.63% Real returns 10.00% 6.13% Private equity 10.00% 8.25% Cash 2.00% 1.88%

Total 100%

Discount Rate

The discount rates used to measure the total pension / OPEB liabilities at the measurement dates and changes since the prior year were as follows:

56





Discount Rate, Continued

Discount rate, June 30, 2016

Increase (decrease)

Discount rate, June 30, 2017

Pension

7.50%

(1.25)%

6.25%

OPEB

6.89%

(1.05)%

5.84%

The discount rate of 6.25% used to measure the total pension liability was based on the expected rate ofretum on pension plan investments. The discount rate of 5.84% used to measure the total OPEB liability was based on the expected rate ofreturn on OPEB plan investments of 6.25% and a municipal bond rate of3.56%, as reported in Fidelity Index's "20-Year Municipal GO AA Index" as of June 30, 2017.

The projection of cash flows used to detennine the discount rates is based on the assumption that each participating employer in CERS will contribute the actuarially determined contribution rates, which are determined using a closed funding period (26 years as of June 30, 2017), as well as the actuarial assumptions and methods adopted by the KRS Board of Trustees. Current assets, future contributions, and investment earnings are projected to be sufficient to pay the projected benefit payments from the system.

Sensitivity of the District's Proportionate Share of the Liabilities to Changes in the Discount Rate

The following presents the District's proportionate share of the net pension/ OPEB liabilities, as well as what the District's proportionate share of the net pension/OP EB liabilities would be if they were calculated using a discount rate that is I-percentage-point lower or I-percentage-point higher than the current rate:

District's Proportionate Share

Discount Net pension Discount Net OPEB Rate Liability Rate Liability

1 % decrease 5.25% $ 47,057,274 4.84% $ 16,305,898

Current discount rate 6.25% $ 37,311,030 5.84% $ 12,814,624

1 % increase 7.25% $ 29,158,371 6.84% $ 9,909,335

57





Sensitivity of the District's Proportionate Share of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates

The following presents the District's proportionate share of the net OPEB liability, as well as what the District's proportionate share of the net OPB liability would be if it were calculated using healthcare cost trend rates that are I-percentage-point lower or I-percentage-point higher than the current rate:

I% decrease

Current healthcare cost trend rate

I% increase

Plan Fiduciary Net Position

Healthcare Cost Trend Rate

7.5% Pre-65 or 5.5% Post-65 decreasing to 4%



$

$

$

District's Proportionate Share of Net OPEB

Liability

9,829,476

12,814,624

16,695,141

Detailed infonnation about the CERS fiduciary net position is available in the separately issued Kentucky Retirement Systems Comprehensive Annual Financial Report.

Payables to the Pension / OPEB Plans

The District reported the following payables for the outstanding amount of pension/OPEB contributions due to CERS for the year ended June 30, 2018.

Pension OPEB

$ 0 $ 0 =-====~ =====~-

10. On-Behalf Payments

Payments are made by the Commonwealth of Kentucky for various purposes on behalf of the District. These on-behalf payments are budgeted and recorded as revenue and expense in the governmental funds of the District, and are comprised of the following for the year ended June 30,2018:

58

10.

11.

12.




On-Behalf Payments, Continued

KTRS contributions $ 16,376,123 Health insurance 11,149,928 Flex spending 943,513 State life insurance 19,264 Technology 125,368 KSFCC debt service 124,831

$ 28,739,027

Deferred Compensation

The District offers its employees participation in a deferred compensation program administered by the Kentucky Public Employees' Deferred Compensation Authority. This program offers a plan authorized by Section 457(b) of the Internal Revenue Code and a plan authorized by Section 401 (k) of the Internal Revenue Code. Both plans are available to all employees and permit them to defer up to 25% of their compensation (subject to limits) until future years. The District makes no contributions to these plans.

Fund Balance Classification

The composition of the fund balance classifications at June 30, 2018, is as follows:

Ma jor Govenunental Funds Nonma jor Governmental Funds

Total Special District FSPK Nonmajor

General Revenue Activity Construction Building Govenunental Fund Fund Fund Fund Fund Funds Total

Fund balances: Nonspendable:

Inventory s 280,914 s s s s s s 280,914 Prepaid expenses 58,947 58,947

339.861 339.861

Restricted for: Future capital needs 543,592 1.058,716 1.602.308 1,602.308 Other 41 ,980 137,134 1.564,260 1,833,156 3.534.550 3,576,530 Technolo1,,y 11 8.386 118.386

160.366 137,134 2.107,852 2.891.872 5.136.858 5,297,224

Conunitted: Site-based carryforward 281.964 281.964

Assigned: Future construction

project 5,024,198 5.024,198 Purchase obligations 36,222 36.222

5,060.420 5,060,420

Unassigned 14,345,310 (41.980) 14,303.330

Total fund balances s 20.027.555 s 118.386 $ 137,134 s 2,107.852 s 2,891.872 s 5.136.858 s 25,282.799

The District has $1,642,462 of encumbrances of operating funds in major and nonmajor funds at June 30, 2018, rolled over into the next fiscal year.

13. Net Position Deficit

The net position deficit reported by the Food Service Fund in the amount of $(2,763,122) resulted from the recording of the net pension and OPEB liabilities.

59

14. Transfers




Interfund transfers for the year ended June 30, 2018, consisted of the following:

Transfers in:

Major Nonmajor Governmental Funds Governmental Funds

Special General Revenue Construction Debt Service

Fund Fund Fund Fund

Transfers out:

Major Governmental Fund: General Fund $ $ 463,980 $ $ $

Nonmajor Governmental Funds: SEEK Capital Outlay

Fund 826,954 192,000 FSPK Building Fund 73,972 2,917,763 6,748,201

Major Enterprise Fund: Food Service Fund 70,826

$ 971,752 $ 463,980 $ 3,109,763 $ 6,748,201 $

Total

463,980

1,018,954 9,739,936

10,758,890

70,826

11,293,696

Transfers are used to: 1) move revenues from the funds with collection authorization to the funds where budgetary authorizations exist for disbursement; 2) reimburse the General Fund for costs incurred to support proprietary fund activity; and 3) to move unrestricted General Fund revenues to programs accounted for in other funds for which the General Fund provides subsidies or matching funds.

15. Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The District purchases unemployment insurance through the Kentucky School Boards Insurance Trust Unemployment Compensation Fund; however, risk has not been transferred to such fund. In addition, the District continues to carry commercial insurance for all other risks of loss. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

16. Contingencies

The District receives funding from Federal, state and local government agencies and from private contributions. These funds are to be used for designated purposes only. For government agency grants, if based upon the grantors' review, the funds are considered not to have been used

60




16. Contingencies, Continued

for the intended purpose, the granters may request a refund of monies advanced, or refuse to reimburse the District for its disbursements. The amount of such future refunds and unreimbursed disbursements, if any, is not expected to be significant. Continuation of the District's grant programs is predicated upon the grantors' satisfaction that the funds provided are being spent as intended and the grantors' intent to continue their programs.

17. Commitments

During fiscal year 2018, the District entered into construction contracts totaling $2,014,639 for various facility improvements. Remaining commitments under these contracts totaled $1,018,090 at June 30, 2018, of which $93,303 was included in accounts payable in the Construction Fund.

In March of 2018, the District entered into an agreement for the sale of the Daviess County Middle School property for $1.5 million on or before June 30, 2021, pending completion of a new middle school facility.

18. Impact of Recently Issued Accounting Principles

In fiscal year 2018, the District implemented GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions (GAS BS No. 75), which amends or supersedes the accounting and financial reporting guidance for Postemployment benefits other than pensions (other postemployment benefits or OPEB) provided to the employees of state and local governmental employers. The objective is to improve accounting and financial reporting for OPEB by state and local governments.

Under GASBS No. 75, the liability to be recognized by participating employers is measured as the portion of the present value of projected benefit payments to be provided through the OPEB plan to current active and inactive employees that is attributed to those employees' past periods of service (total OPEB liability), less the amount of the OPEB plan's fiduciary net position. The OPEB expense and deferred outflows ofresources and deferred inflows ofresources related to OPEB that are required to be recognized by an employer result primarily from changes in the components of the net OPEB liability, as detailed in Notes 8 and 9 to financial statements.

In the financial statements, the implementation of GASBS No. 75 resulted in a reduction of beginning net position, as reflected below:

Business-Type Activities Food After Entity-

Governmental Service School Wide Activities Fund Fund Total Total

Net position, June 30, 2017, as previously reported $ 36,370,862 $ (785,656) $ 310,261 $ (475,395) $ 35,895,467

Restatement (36,196,370) (1,200,798) {184,738) (1,385,536) (3 7,581,906)

Net position, June 30, 2017, restated $ 174,492 $ (1,986,454) $ 125,523 $ (1 ,860,931) $ (1,686,439)

61


BUDGETARY COMPARISON SCHEDULE

GENERAL FUND


Variance with Budget Final Budget

Original Final Actual Over (Under) Revenues:

Property taxes s 30,161,556 $ 29,901 ,556 s 30,211 ,525 $ 309,969 Utility taxes 4,250,000 4,250,000 5,029,956 779,956 Tuition and fees 90,000 60,000 60,021 21 Earnings on investments 130,000 280,000 286,716 6 ,716 Other local revenue 698,800 482,800 498,890 16,090 State aid 58,527,852 57,367,143 67,549,739 10,182,596 Federal aid 225,000 225,000 393,724 168,724

Total revenues 94,083,208 92,566,499 I 04,030,571 11,464,072

Expenditures: Instruction 62,967, I 82 58,397,710 66,895,709 (8,497,999)

Support services: Student 3,285,877 3,683,877 3,806,415 (122,538) Instructional staff 3,823,353 3,681,628 3,700, I 51 (18,523) District administration 10,721,073 13,421,073 970,082 12,450,991 School administration 8,191,610 8,250,630 8,246,604 4,026 Business 2,162,036 2,344,813 2,402,115 (57,302) Plant operation and maintenance 8,392,146 8,998,276 8,890,644 107,632 Student transportation 8,663,365 8,580,365 8,168,687 411,678

Community services Building renovations/ additions

Total expenditures l 08 ,206,642 107,358,372 I 03,080,407 4,277,965

Excess ( deficiency) of revenues over expenditures (14,123,434) (14,791,873) 950,164 15,742,037

Other financing sources (uses): Proceeds from sale of capital assets 15,000 15,000 15,945 945 Operating transfers in 971,752 971,752 Operating transfers out (241,954) (463,980) (463 ,980)

Total other financing sources (uses) (226,954) 522,772 523,717 945

Net change in fund balance (14,350,388) (14,269,101) 1,473,881 15,742,982

Fund balance, June 30, 2017 18,553,674 18,553,674 18,553,674

Fund balance, June 30, 2018 $ 4,203,286 $ 4,284,573 $ 20,027,555 s 15,742,982

62


BUDGETARY COMPARISON SCHEDULE

SPECIAL REVENUE FUND


Variance with Budget Final Budget

Original Final Actual Over (Under) Revenues:

Other local revenue $ 345,705 $ 334,150 $ 753,708 $ 419,558 State aid 4,804,101 4,705,574 5,034,244 328,670 Federal aid 5,077,676 5,185,355 5,027,705 (157,650)

Total revenues 10,227,482 10,225,079 10,815,657 590,578

Expenditures: Instruction 8,484,574 8,347,110 8,980,426 (633,316) Support services:

Student 476,637 477,242 610,344 (133,102) Instructional staff 154,921 214,309 210,609 3,700 School administration 25,486 20,405 15,462 4,943 Plant operation and maintenance 5,419 5,419 5,419 Student transportation 474,581 468,581 599,551 (130,970)

Community services 845,798 853,025 853,073 (48)

Total expenditures 10,467,416 10,386,091 11,269,465 (883,374)

Excess ( deficiency) of revenues over expenditures (239,934) (161,012) (453,808) (292,796)

Other financing sources (uses): Operating transfers in 241,954 163,032 463,980 300,948 Operating transfers out (2,020) (2,020) 2,020

Total other financing sources (uses) 239,934 161,012 463,980 302,968

Net change in fund balance 10,172 10,172

Fund balance, June 30, 2017 108,214 108,214 108,214

Fund balance, June 30, 2018 $ 108,214 $ 108,214 $ 118,386 $ 10,172

63


SCHEDULE Of PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

TEACHERS' RETIREMENT SYSTEM OF THE ST ATE OF KENTUCKY

Last IO Fiscal Years +

2018 2017

District's proportion of the plan total net pension liability 0.0000% 0.0000%

District's proportionate share of the net pension liability associated with the District s s

State's proportionate share of the net pension liability

associated with the District 427,477,363 465,688,704

Total s 427,477,363 s 465,688,70-1

District's covered payroll s 47,896,500 s 47,282,367

District's proportionate share of the net pension liability as a percentage of its co,·ered payroll 0.00% 0.00%

Plan fiduciary net position as a percentage of the total pension liability 39.83% 35.22%

+ Presented for those years for which the infonnation is available.

20 16 2015

0.0000% 0.0000%

s s

360,367,617 318,464,968

$ 360,367,617 $ 318,464,968

$ 45,537,911 s 45,654,333

0.00% 0.00%

42.49% 45.59%


SCHEDULE OF PENSION CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY

Last 10 Fiscal Years *

2018 2017

District's contractually required contributions $ $

District's contributions in relation to the contractually required contributions

Contribution deficiency (excess) $ $

2016

District's covered payroll $ 48,545,737 47,896,500 $ 47,282,367

Contributions as a percentage of covered payroll 0.00% 0.00% 0.00%

* Presented for those years for which the infonnation is available.

6S

2015

$

$

$ 45,537,911

0 .00%


SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITIES TEACHERS' RETIREMENT SYSTEM OF THE ST A TE OF KENTUCKY

Last IO Fis cal Years *

MEDICAL INSURANCE PLAN {MIP)

District's proportion of the plan total net MIP OPEB liability

District's proportionate share of the net MIP OPEB liability associated with the District

State's proportionate share of the net MIP OPEB liability associated with the District

Total

District's covered payroll

District's proportionate share of the net MIP OPEB liability as a percentage of its covered payroll

Plan fiduciary net position as a percentage of the total MIP OPEB liability

LIFE INSURANCE PLAN {LIP)

District's proportion of the plan total net LIP OPEB liability

District's proportionate share of the net LIP OPEB liability associated with the District

State's proportionate share of the net LIP OPEB liability associated with the District

Total


District's proportionate share of the net LIP OPEB liability as a percentage of its covered payroll

Plan fiduciary net position as a percentage of the total LIP OPEB liability

* Presented for those years for which the information is available.

2018

0.838680%

$ 29,906,000

24,428,000

$ 54,334,000

$ 47,896,500

62.44%

21.18%

0.00%

$

327,000

$ 327,000

$ 47,896,500

0.00%

79.99%


SCHEDULE OF OPEB CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY


MEDICAL INSURANCE PLAN (MIP)

District's contractually required contributions


Contribution deficiency (excess)


Contributions as a percentage of covered payroll

LIFE INSURANCE PLAN (MIP)

District's contractually required contributions





2018

$ 1,456,375

(1,456,375)

$

$ 48,545,737

3.00%

$

$

$ 48,545,737

0.00%

* Presented for those ye_ars for which the information is available.

67


NOTES TO REQUIRED SUPPLEMENTARY INFORMATION TEACHERS' RETIREMENT SYSTEM OF THE ST A TE OF KENTUCKY


MEDICAL INSURANCE PLAN (MIP)

Changes of Benefit Terms

With the passage of Kentucky House bill 471 , the eligibility for non-single subsidies (NSS) for the KEHP-participating members who retired prior to July I, 2010, is restored, but the State will only finance, via its KEHP "shared responsibility" calculations, the costs of the NSS related to those KEHP-participating members who retired on or after July 1, 2010.

Changes of Assumptions

None

LIFE INSURANCE PLAN (LIP)

Changes of Benefit Terms

None


None

68


SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY COUNTY EMPLOYEES RETIREMENT SYSTEM

PENSION FUND


2018 2017 2016

District's proportion of the net pension liability 0.637435% 0.643869% 0.646961 %

District's proportionate share of the net pension liability $ 37,311,030 $ 31,701,652 $ 27,816,268

District's covered payroll $ 15,605,728 $ 15,449,693 $ 15,032,371

District's proportionate share of the net pension liability as a percentage of its covered payroll 239.09% 205.19% 185.04%

Plan fiduciary net position as a percentage of the total pension liability 55.30% 55.50% 59.97%


69

2015

0.651196%

$ 21,127,000

$ 14,894,473

141.84%

66.80%

Contractually required contributions


SCHEDULE OF CONTRIBUTIONS

COUNTY EMPLOYEES RETIREMENT SYSTEM

PENSION FUND

Last IO Fiscal Years *

2018 2017

$ 2,350,081 $ 2,176,999

Contributions in relation to the contractually

required contributions (2,350,081) (2,176,999)

Contribution deficiency (excess) $ $

District's covered payroll $ 16,229,838 $ 15,605,728

Contributions as a percentage of covered payroll 14.48% 13.95%


0

2016 20[5

$ 1,918,883 $ 1,916,627

(1,918,883) (1,916,627)

$ $

$ 15,449,693 $ 15,032,371

12.42% 12.75%

DAVIESS COUNTTY SCHOOL DISTRICT

SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY COUNTY EMPLOYEES RETIREMENT SYSTEM

INSURANCE FUND


District's proportion of the net OPEB liability

District's proportionate share of the net OPEB liability


District's proportionate share of the net OPEB liability as a percentage of its covered payroll

Plan fiduciary net position as a percentage of the total OPEB liability


71

2018

0.637435%

$ 12,814,624

$ 15,605,728

82.11 %

52.4%


SCHEDULE OF CONTRIBUTIONS

COUNTY EMPLOYEES RETIREMENT SYSTEM

INSURANCE FUND

Last 10 Fiscal Years*

Contractually required contributions

Contributions in relation to the contractually required contributions





72

2018

$ 762,802

(762,802)

$

$ 16,229,838

4.70%


NOTES TO REQUIRED SUPPLEMENTARY INFORMATION COUNTY EMPLOYEES RETIREMENT SYSTEM


Changes of Benefit Tenns

None


Pension and OPEB: The assumed investment return was changed from 7.50% to 6.25%.

The price inflation assumption was changed from 3.25% to 2.30%, which also resulted in a 0.95% decrease in the salary increase assumption at all years of service.

The payroll growth assumption (applicable for the amortization of unfunded actuarial accrued liabilities) was changed from 4.00% to 2.00%.

OPEB: The single discount rate changed from 6.89% to 5.84%.

73

ASSETS Cash and cash equivalents s Accounts receivable:

Other Due from other funds

Total assets s

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

Liabilities: Accounts payable s Due to other funds

Total liabilities

Deferred inflows of resources

Fund balances: Restricted Assigned

Total fund balances

Total liabilities, deferred inflows of resources, and fund balances s


COMBINING BALANCE SHEET

NONMAJOR GOVERNMENT AL FUNDS

June 30, 2018

Special Re\'enue Capital Projects

District

Activity Fund

137,134

137,134

137,134

137,134

137,13~

SEEK Capital

Outlay Fund

s $

s s

s s

s s

S1..-e Nolt....; to fmaiu.1:il S1a1cmrnl$ 74

FSPK

Building Construction Fund Fund

2,891,872 $ 2,201,155

2,891,872 s 2,20 I, 155

s 93,303

93,303

2,891,872 2, I 07,852

2,891,872 2,107,852

2,891,872 s 2,20 I, 155

Total Debt Nonmajor

Service Governmental Fund Funds

s s 5,230, 161

s s 5,230,161

s s 93,303

93,303

5,136,858

5,136,858

5 s 5,230,161


COMBINING STATEl'v!ENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

Revenues: Property taxes Earnings on investments Other local revenue State aid Federal aid

Total revenues

Expenditures: Instruction Support services:


Community services New building construction Building renovations / additions Debt service:

Principal Interest Bond issuance costs

Total expenditures

Excess (deficiency) of revenues over expenditures

Other financing sources (uses): Operating transfers in Operating transfers out

Total other financing sources (uses)

Net change in fund balances

Fund balances, June 30, 2017

Fund balances. June 30, 2018

NONMAJOR GOVERNl\,IENTAL FUNDS

Special Revenue

District Activity

Fund

s $

230.493

230,493

104.437

93,551

197,988

32,505

32.505

104.629

s 137,134 s

Year Ended June 30.2018

Capital Projects

SEEK

Capital FSPK

Outlay Building

Fund Fund

s 8.462,972 5.000

1.018.954 2.336.430

1.018,954 10.804.402

3.500

2.250

5.750

1,018.954 10,798.652

(1,018,954) (9,739,936)

(1,018,954) (9,739,936)

1,058.716

1,833.156

s 2.891.872

s~~ Nut,:s lll Fman.:1al Stati:mi:nts 75

Construction

Fund

s 3.877

3.877

78,210 2.138,703

2.216,913

(2,213,036)

3. !09,763

3,109,763

896,727

l.211,125

s 2,107,852

Debt

Service

Fund

s

124,831

124,831

5.036.000 1.837.032

6.873,032

(6,748.20 I)

6.748.201

6,748.201

$

Total

Nonmajor

Governmental

Funds

s 8.462,972 8,877

230,493 3,480,215

l 2,182.557

104.437

93,551

81,710 2,138,703

5,036,000 1.839,282

9.293.683

2.888,874

9,857,964 (10,758,890)

(900,926)

1.987,948

3,148,910

s 5,136,858

Apollo High Audubon Elementary Bums Elementary Bums Middle College View Middle Country Heights Elementary Daviess County High Daviess County Middle Deer Park Elementary East View Elementary Heritage Park High Highland Elementary Meadow Lands Elementary Sorgho Elementary Southern Oaks Elementary Tamarack Elementary West Louisville Elementary Whitesville Elementary


COMBINING ST A TEMENT OF SCHOOL ACTIVITY FUND RECEIPTS, DISBURSEMENTS, AND DUE TO

Cash June 30, 2017 Receipts

--$ 323,499 $ 1,023,217

36,766 82,203 61,879 94,205

116,285 263,655 134,095 305,593 32,954 91,770

356,250 1,480,094 53,840 212,513 70,360 112,007 34,022 97,889 14,828 9,534 57,246 119,286 23,558 79,384 37,110 100,920 35,398 70,265 56,061 114,114 53,272 75,695 33,477 61,941

$ 1,530,900 $ 4,394,285


Cash Disbursements June 30, 2018

$

$

936,478 $ 410,238 91,048 27,921 82,566 73,518

272,596 107,344 286,326 153,362

92,246 32,478 1,431,406 404,938

210,021 56,332 99,184 83,183

103,065 28,846 10,421 13,941

113,892 62,640 80,073 22,869 97,097 40,933 74,882 30,781

116,254 53,921 68,438 60,529 68,926 26,492

4,234,919 $ 1,690,266


Accounts Accounts Receivable Inventory Payable

$ 1,630 $ 17,209 $ 2,085 - - -- - -

- - -

- 159 -- - -

2,982 1,004 1,417 - - -- - -- 598 -- - -- 2,787 -- - -- - -- - -- - -- 300 -- 283 -

$ 4,612 $ 22,340 $ 3,502

Due to Student Groups June 30, 2018

-$ 426,992

27,921 73,518

107,344 153,521 32,478

407,507 56,332 83,183 29,444 13,941 65,427 22,869 40,933 30,781 53,921 60,829 26,775

$ 1,713,716


STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS. DISBURSEMENTS. AND DUE TO

APOLLO IIIGH SCHOOL

Year Ended June JO. 2018

Due to (':,sh (':,sh Accounts Accounts Studen1 Groups

June 30. 2017 Rc:c:dp1s D1sburscmcn1s Transfers June 30. 2018 Receivable Inventory Payable June 30, 2018

GENERAL FUND $ 21.109 s 499 s 7.826 s 19.202 s )2.984 s $ s $ 12.984

OFFICE 7.118 100 S,S62 4 ,324 J.000 J.000 AHSALUMNI DCPS FOUNDATION GRANTS 249 249 249 AP EXAMS 79 22,257 21,026 3,,62 4.672 4,672

PSATTESTS 244 1.088 1.228 104 104

BANQUET BAND UNIFORMS 106 106 106 GRADUATION J.784 3.784

PROM 9.577 11.942 I I.SO') 175 9.SS5 9.885 COMPUTER l.2'il 162 1,089 1.089

CONTINGENCY FUNDRAISER 7.99.1 4.416 ().5771

GUIDANCE ).507 455 430 (Ill J.521 '}i21 INTRAMURAL 392 60 H2 .132 INTEREST 6.085 (6,085)

LOCKS NECESSITIES OVER YOUR HEAD S20 80) 896 189 616 4,050 4.666 PROJECT GRADUATION 128 4,440 .J,715 (47

RENAISSANCE 60 60 CHALLENGER 4.586 4,586 4.586 SPECIAL TOPICS STUDENT EXAM FEE REIMB 2.47.5 18.645 18.600 2520 2520 ENL EAGLES NEST NEWS 1.6.10 1,894 1,998 48 U74 1,574

YEARBOOK 20.61? 12.676 21.778 206 11 .12, 11 .72:l STUDENT ASSISTANCE 2.299 .1,774 1,786 25 1 2.SJS 2,!i38 AMP WEIGHT ROOM TEACHER OF THE YEAR AWAR[ 1.000 :mo 1.179 21 21 STUDFNT VENDING 2,042 .176 453 1.965 2,s 2.20J

ADULT VENDING 1,720 1,416 2,()C)S (81 l ?SO 94 1,074 ATHLETIC DIRECTOR AA APOLLO ABA BASKETBALL 75 12.288 ')J22 (688) 2JS3 2 .. 15.1 BOYS BASKETBALL 1.330 685 2,25'i 240 ATHLETIC BOOSTER 6.1.S5.1 42.49() ((5.246) 6,108 U02 7,410

ATHLETIC AWARDS 3.206 \,206 3.206

ATHLETIC BUDGET 6.537 (6,537) ATHLETIC' TRAINER SUPPLIES J.441 1,441 BASEBALULT 9.244 (9.244) ATHLETIC WEIGHT TRAINING 83 (SJ) BASEBALL S'>O 4,792 4,202

ATHLETIC SECURITY 9,151 9, 153 BOYS CROSS COUNTRY 120 .\50 2.\0 :uo BOYS CC UT 5.021 (5.021)

GIRI.S CROSS COUNTRY 4518 4.10 () .5681 520 520 GIRLS CC UT CHEERLEADERS 5.620 1.216 1.61 2 (5 .2081 16 16 ATHLETIC EMERGENCY SER VIC 1..176 1.500 124 124

E-GALS EAGLEITES 1.S06 IO(I 1.086 (2.0471 77,1 771 FOOTBALL 92 9,038 8.946 FIF.LO MAINTENANCE ATHLETIC GAME OfflCIAl.S 7S :?],6:;l) ::u5~u GENERAL ATIILF.TICS 26,716 17.30 1 4.328 1),74.1 )70 14.11.l GIRLS BASKETBALL 3.911 579 7.751 J .769 508 11 0 618 GIRLS GOLF 4.228 1,490 (2,738)

BOYS GOLF 880 1.267 )87

GATE 71 .66) 5,.104 (66,.159)

SL'\!Not.:stt1hn;111..:1:1l!'i1a1 .:111.:11is 77

Cash June .,o. 2017

A TIILETIC GA TEWORKERS GIRLS TRACK 15

GIRLS TRACK I.ff SOCCER FIELD SOUND SYSTEM 460

SOFTBALL 507 SOFTBALL UT 1.185

GIRLS SOCCER 1.7)8

GIRLS SOCCER UT 85

BOYS SOCCER 191

BOYS SOCCER UT SPORTS PROGRAMS SALES AA SPORTS l'ROG. ADS SPIRIT STORE- CLOSED AA SPRING SEASON TOURNEY SWIM TEAM/G&B 2,165

TENNIS/B&G 2.70$. DISTRICT TOURNEY GIRLS DISTRICT TOURNEY BOYS BOYS TRACK HOLIDAY TOURNAMENT A TIILETIC VENDING BOYS TRACK UT VOLLEYBALL 7,26()

WRESTLING 12.469 AA V SLAMDOWN TOURNEY REGIONAL TOURNEY - GIRLS SEMI-STA TE TOURNEY ATHLETIC UNIFORM ACCOUNT 2.812 AA REGION TOURNEY BOYS AA REGION TOURNEY GIRLS AATUESDA Y 4 TEAMS AA BORDER BOWL FB EAGLE cur SOCCER AA TRACK CITY/COUNTY AA BOWLING 1.151 ART CLUB 88 SPIRIT STORE BETA 2.4S9 CHESS DANCE BLUE 4.433 DRAMA COUNCIL FOR EX CHILD 3.108 JUNIOR CIVITAN FFA ALUMNI 1.()00

FBLA 50 FCA 51 Fl.ITURE ED OF AMERICA 191

FFA FCCLA 142 FILM CLUB STRATEGIC GAMING 599

MUSICAUCHORUS/DRAMA 75_,

THESPIAN SOCIETY HABITAT 164

AYL ACADEMY YOUNG LEADEI 653

ACADEMIC TEAM

SPANISH CLUB 9S

LATIN DANCE CLUB KEY CLUB 1.072

NATIONAL HONOR SOCIETY 2520

- ---- ·---. - -- ~---



APOLLO HIGH SCHOOL

Year Endc:d June .,o. 2018

C'ash Accounts

Rc."Ccipls D1sburs1.-incn1s Transfers June \0, 201S Receivable

5.005 5.005 148 6S5 l52

460

1.619 1.112 2,0 11.185)

1.711 17) (85)

252 309 2-18

192 1.408 1,216 515 1575)

751 (1 .215) 199

697 (1.705) 101

3.191 2.617 (57J I

2.797 2.7<l7 2,5'>8 11.481 8.885

414 (414) 78

1.290 (5 .979)

1,275 (10.469) 725 6.934 5,132 (1.802)

1.230 1549 11.681 )

1.001 (1.560) 251

5.966 4.1'7 (1.829)

994 2 .. \25 224 44

88

8.094 3.502 21 4 .613 1.404 775 '.118

78.549 12.634 1.098 11.446

5,7J2 J.884 (960) 888 l,"Q() J.S5S 121 1 1.061

500 ,oo 1.107 1.710 2.397 1,871 4,728 105

51

19' 47.651 49.092 1.441

142

56 l.' 61 599

8.176 J.340 5.589 6.412 4.266 (1.1841 %2

164

653

8 U41 1., 00 167

9S

719 3~3 775 }04 2.9QI

S .. «c Noh:~ 10 h11am:1;1I ~~tl..: t.J111.-,.1, 7K

- - - ~-

Due to Accounts Student Groups

Inventory Pay.ible June 30, 20 IS

3S2

460

230

248

199 .10_1

7S

72'\

251

44

88 K. 187 12.800

3.118

11.446 888

1.061 500

2.397

51 193

142

599 S.589

962 164

65' 167

9S

353 2,991

-- -----·-

Cash June .'\O, 2017

PTSO SPANISH HONOR SOCIETY AFJROTC BOOSTER STUDENT COUNC'IL STAND

APOLLO CLEAN TEAM FIT4 FUN RUN SPIRIT CLUB KYA

YOUNG DEMOCRATS YOUNG REPUBLICANS

ROBOTICS STLP AFJROTC ACTIVITIES

AFJROTC ORG & MAINT.

AFJROTC RPA PRIOR AY06

AFJROTC CADET TR/LODGING AFJROTC CADET MEALS AFJROTC UNIFORM ALLOWANC AfJROTC SCHOLARSHIP FUND

GS ALLIANCE ARCHERY CLUB

ARCHERY REGIONAL TOURN

116

125

7.619

.101

68 1.787

1.214 6,327

501

600

1.769

CAREER NTWK POSTER PRINTE 64 1 DARCHERY

STRENGTH & CONDITIONING

CCR FIELD TRIP IOO°lo WKSLS

AG ART BAND BUSINESS

CHORUS CAREER NETWKING (DOTI')

DRIVER ED F.NGLISH

FRESHMAN TEAM

SOPHOMORE TEAM JUNIOR TEAM

FINE ARTS

SENIOR TEAM FOREIGN LANGUAGE

STAMP TEST-WORLD LANG, SS CHRISTMAS PLAY

GREENHOUSE CONSUMER SCIENCE MATH MMD/HEAD

MMD/BULLINGTON

MMD/JACKSON ORCHESTRA

MMD/mARTIN IIEALTII/PE MMD/MCINTIRE

AFJROTC-SCHOOL BUDGET

SCIENCE

SPECIAL SERVICES

MMD/ROBERTS

SOCIAL STUDIES

GOV'T CLASS DC TRIP

1.961

126 I

1.491 1.064

420 262 457

25%

2 .. n.i 4.412

107 6,6"\2

1.195

20 1.662

JJO 1,4(,2

1.085

2.817

441

6517


STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS. DISBURSEMF.NTS. AND DUE TO

APOLLO HIGII SCHOOL

Receipts

IJ42

6.238

2,P.4 7,6'.!'i

6.82)

267 21.152

231 649

3.145 7.815 1,260

50

W.J21

2,791

121

2.500

527 612 175

10547

80

7.688

~.406

225

Disbursemc:nts

IJl2

!i. 12l

l.l5 .l 7.945

6.455

20.289

141

100

117 1.716

4.074

8.391 1..140 1,272 4.070

4.701 42526

422 ,.,42

.164

2.03'i 1.58.1

1398 2,6'i7 2,926 l.171 l ,569

135 8.861

1.066

7.450 429

1.008

8.482

728 322

314

Year Ended June: lO, 2018

Transfers

(116)

(2.650)

(262) )20

74 (265)

0601

JJO

1641 (J .10) 6)9

79

1,272 4,020 3.524 l .979

786 767

191

1.694

1.58)

1..198 2.6~7

782 1..17)

1.356

2.78S 678

1.860

400 406

400

l.731

5.665

724 400

1.270

Cash Junc J0.2018

15~

6.104

JU I

519

68 2.155 IYi'i 6.925

,100

114

1.032

702 189

"\14 1.840

784 478 284

5 2,'76

.156

2.6.'\S 5.024

147

11.104 678

2.061)

.1

420 2.,06

JOI 2591

1.085

221 521

7.471

s .. ~ Ni"'-"' h 1 b11J11..:1.:1I Sl,1h:n11,.-n1s ,,,

Accounts Receivable

5 10

lnvcn1ory Accounls Payable

Duclo Studcnl Groups June 30, 2018

IS5

6.104 101

<19

68

2.15::i 1.555 6.925

JOO 114

1.012

702

189

314

2.350 784 478 284

5 2.376

)56

2.638 5.024

147

11.104 678

2.069

420 2.)06

.101

2.591

1.085

221 'i21

7.473

Cash June 30, 2017

TECH-ED 891 II/PE UNIFORMS LIBRARY COPY MACHINE 350 LIBRARY FINES 211 AUDIO VISUAL 28 POSTER PRINTER 47 STUDENT FEES LOST/DAMAGED BOOKS ROOK RENTAL ELEARNING REPAIR FINES DRIVER'S ED FEES 6 CASH DRAWER CHANGE LA THAM SCHOLARSHIP 56() NUNN SCIIOLARSHIP STEWART EAGLE FAMILY SCHC 195 COKE SCHOLARS! IIP 21),661 PRUDEN SCHOLARSIIIP 32.071 SA TIERL Y SCIIOLARSHIP 28,227

JONES SCHOLARSHIP SOARING EAGLE SCIIOLARSIIIP STEFANIE M. MEMORIAL SCIIO 1.223 MURPHY FAMILY SCHOLARSHII JONA THAN GRA y voe SCHOLA BOYS BASKETBALL UT BASEBALL UT BOYS CC UT GIRLS CC UT CHEERLEADING !.IT EAGLETIESUf FOOTBALL UT GIRLS BASKETBALL ur GIRLS GOLF UT BOYS GOLF UT TRACK GIRLS ur SOFTBALL UT GIRLS SOCCER ur BOYS SOCCER UT SWIMTEAM BIG UT TENNIS B/G UT TRACK BOYS UT VOLLEYBALL UT WRESTLING UT BOWLING BIG ur DISTRICT ACTIVITY FUND ---

32.,,499 s


STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS, DISBURSEMENTS. AND DUE TO

Recc.'lpts Disbursemcn1s

29-l 118 4.713 4.415

53 186

22, 222 140.169 6,.100

4.623 4,611

1.770 1.775

25 700

1.00U 999

1,000

1.000

8.11 500 500

I.ODO 500 15,269 l.'\.492 ) 0,086 24.556 14 .) 0 1 17.7)9

4556 5.H6 .lJ.)71 38.231 29.784 22.5()4

15,607 9.587 14,738 S.241

2.313 1566 550 )45

5,702 5.420 16,971 28,285 15,979 15.415 8,))() 7.115 2,132 4.275 4,))8 4,900 3,692 4,999

11,005 9.412 190

8,044 ~.06:'i 16,856 16.S~b

1,023,217 s 936,478

ArDLLO HIGH SCIIOOL

Year Ended June .,o. 201 S

Cash Transfers June '\0. 2018

M2S 5.405

270

1281 62

174.752)

10

116

2 )7.1 )9)

352

19

(l.777) 7J21 4.016 5.248 QJ32 .1.756 7.15.1

(2,627) 1.758

41) 749

1.0)7 153 111

2.096 2.646 1.)07 9.429

12.469 1.086

s s

S,:i: N"ti:s In Fl11.mu:1I Sl,11.:111.:nls KIi

---

1,792 ~.70)

671 397

110 117

198 J0.034 .11.464 27579

2.075

500

12,851 578

4,468 4.472

I0.946 1),17> ).870

4,505 618

1.031 9.72l

717 1.146

)

2.084

11.022 12,279 4.065

410.2.IS

Accounts Receivable

s 1.630


Inventory Payable June 30.2018

1,792 ),670 9.)7)

67) 197

I IO ))7

198 ) 0.0)4 11.464 27.579

2.075

500

12.851 578

4,468 4.472

1.)6) 9.58.1 13.17) 1,870 4.505

618 1.0)1

400 9.323 717

1.346 )

2.0S4

322 10.700 12.279 4.06~

---s 17,209 s 2.085 s 426.992

DAVIESS COUNTY SCIIOOL DISTRICT

STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS, DISBURSEMENTS. AND DUE TO

DAVIESS COUNTY HIGH SCHOOL

Year Ended June 30. 20 18

Due to Cash Cash Accounls Accounts Student Groups

June 30, 2017 Rccdpts Disbursements Transfors June 30, 2018 Receivable lnv~ntory Payable June 30.2018

GENERAL FUND $ 26,866 $ 62.824 s 54,371 $ 889 s 36.208 $ s $ $ 36.208 STUDENT ID'S 261 1,380 1.177 464 464 OFFICE SUPPLIES 6.658 415 7,707 3,908 3,274 3,274 NURSE OFFICE 974 1.000 26 26 DRIVER ED FEE 4,075 4.075 ACTIVITY FEES 455 221.102 124.250 (97,087) 220 220 LAPTOP 445 445

CCR MISC. MAINTENANCE SUPP. 2.582 753 1.450 3,279 3.279 STUDENT FEES/$24 7.786 18.289 26.075 26,075 TEXTBOOKS/STA TE 105 105 SHELTON-WALMART 90 90 90 VENDING 1.390 1,736 499 (1,667) 960 120 1,080 FACULTY VENDING 1.169 1,390 1.472 (243) 844 320 1,164 STAFFULTY FUND 999 2,795 2.010 1,784 1.784 PICTURE COMMISSION 5.371 4.152 (860) 8,663 8.663 MAG/FUNDRAISER 12.029 23.092 19.725 (6.500) 8,896 8,896 NICKEL WAR 6.456 8.329 6.202 (116) 8.467 8.467 PANTHER PLACE 8,271 6.182 (2.089) ATHLETICS GENERAL 303 100.456 40.843 (49,463) I 0.453 I 0.453 ATHLETIC TRAINING 3.104 3.153 49 49 ATHLETIC BOOSTERS 2.596 57.752 33.407 (21.657) 5.284 1.0-04 6.288 BASEBALL SIGNS BASEBALL 49 25 .584 25,602 2.142 2.173 2,173 BASEBALl~DISTRICT TOURN 5.378 3.406 (1,972)

BASEBALL TOURNAMENT BKBALL REGIONAL TOURN BASKETBALL CAMP GIRLS BKB TOURNAMENT-GIRLS 225 (225) BASKETBALl,.BOYS 4.766 21,615 24,220 6.645 8.806 8,806 BOYSBKBTOURNAMENT BASKETBALl,.GIRLS 9,300 12.266 3,749 783 783 BASKETBALLSHOTOUT 250 250 250 BASKETBALL CAMP BOYS BKB MIDDLE SCHOOL 588 1.600 555 1.633 1,633 CC/TR INVITATIONALS 5.057 875 2.252 3.680 3,680 DISTRICT BKBALL XC BOYS 9.670 9,816 14.496 1.649 6,639 6.639 XCGIRLS 3.961 6,326 8,177 1.097 3,207 3,207 TRACK GIRLS 3.726 250 1.994 2.289 4.271 4,271 BOWLING 1.230 2,629 5.217 3,391 2.033 2.033 CHEERLEADERS 7.031 71.035 44.520 (59) 33,487 33.487 TRACK-BOYS 2.008 75 1.992 2.267 2,358 2,358 FIELD MAINTENANCE FOOTBALL BOOSTERS 63 10.920 8,007 (2,976) FOOTBALi. 57 34.189 45,739 11.610 117 999 1,116

Sc~ Noles 10 Financial Statcmcn1s

St

Cash June 30.2017

FOOTBALL PLAYOFF GOLF TOURNAMENT GOLF BOYS GOLF GIRLS 454 INTRAMURAL SPORTS 516 PANTHERETTES 2.450

SOCCER BOYS SUB SECTIONAL

SOCCER TOURNAMENT SOCCER REGIONAL'> SOCCER BOYS 694

SOCCER TOURN GIRLS SOCCER GIRLS 103

SOCCER DISTRICT TOURN SOFTBALL 3.760 SOFTBALL TOURNEY BASEBALL FLORIDA SOCCER SIGNS-BOYS 540 STATE TOURNAMENT EXP. TEAM LAUREN/CANCER AWARE 8.401 SWIMMING SOFTBALL DISTRICT TOURN TENNIS BOYS 2.119 TENNIS GIRLS 1,397

SOCCER REGIONALS VOLLEYBALL 2.140 VOLLEYBALL TOURNAMENT

SWIM-REGIONALS WRESTLING WRESTLING TOURN. CROSS COUNTRY REGIONALS MICHAEL CABLE FUND 1,964

REGIONAL GOLF CHILI SUPPER VOLLEYBALL DISTRICT ANIMECLUB 32 ART CLUB 300

ARCHERY CLUB 6.056 BETA CLUB 2.141 CHRISTIAN STU. UNION CHESS CLUB 42 ROBOTICS 1.514 DRAMA CLUB 2.308 DRAMNMUSIC STORAGE FBLA

FCCLA 149

FELLOW CHRISTIAN ATHLETES

FFA 7.878

--- --



DAVIESS COUNTY IIIGl-1 SCHOOL

Y car Ended June 30. 2018

Cash Accounts Receipts Disbursc1nt:"nts Transfers June 30. 2018 Receivable

7.486 7.642 1.649 1.493 1.700 1.564 948 1.538

770 690 (300) 296 45.546 52.905 4.955 46

2.566 1.487 (1.079)

420 4.171 3.194 137 1.643 840 (803)

54.344 57.017 2.573 3 2.598 1.867 (731 l

I 0.528 13.633 4.127 4.782

225 1.835 1.610

8.398 6.417 (940) 1.581 2.566 22.403 19.837 5.037 6.960 742 7.220 6.325 3.992 1.537 3.870

(61) (61)

241 612 938 2.686 1.345 2.258 730 1.214

15.243 16.636 3.133 3,880

9.50 1 '1.105 (346 1 so

212 1.752

8,205 1.690 (6,5 15)

54 86 547 121 (355) 371

12.980 12. 158 (586) 6.292 989 659 2.471

487 372 15 172 5.330 1.768 (250) 4.826 3.610 4.345 21 1.594

180 1.045 865 933 3.343 2.410

4.673 4.433 (378) II

85 .915 81 .737 (2.723) 9,333

Sec Noles lo Financial Statements

SJ

Dm: to

Accounts Stu dent Groups Inventory Payable June 30. 2018

1.493 200 1.738

296 46

137

3

4.782

1.581

7.220 3.870

2,686 1,214

3.880

so

1.752

86 371

6.292 2.471

172 1.4 17 3.409

1.594

II

9.333



DAVIESS COUNTY I-IIGH SCHOOL

Y car Ended June 30. 2018

Due to Cash Cash Accounts Accounts Student Groups

June 30. 20 17 Receipts Disburst:mcnts Transfers June 30. 2018 Receivable Inventory Payable Junc30.2018

FRENCH CLUB nc, 634 866 94 94

CEC 2.092 1.325 1.316 (100) 2.001 2.001 FUTURE EDUCATORS 7 7 7 HABIT AT HELPERS 622 1.204 1.764 62 62 JR CIVITAN CLUB KEY CLUB 553 1.299 1.140 (380) 332 332 JR CLASSICAL LEAGUE 373 1.944 2.040 ( 15) 262 262 LIFESAVERS CLUB 44 44 44

NATIONAL HONOR SOCIETY 2.076 3.140 2.547 (80) 2.589 2.589

PEP CLUB 1.410 2.640 1.639 (6) 2.405 2.405

QUILL & SCROLL CLUB QUIZ BOWL RECYCLE CLUB 237 237 237 SPANISH CLUB 168 929 748 349 349

SPANISH NAT HONOR SOCIETY 1.109 1.070 723 80 1.536 1.536 STUDENT COUNCIL 626 908 867 667 667 YOUNG DEMOCRATS 83 83 83 STLP 610 610 610 TEENAGE REPUBLICANS 379 379 379

YCLUB 1.269 36.402 35.794 1.877 1.877 WISE GUYS 120 120 120 STOP THE TEARS 715 479 236 236 AG MECHANICS 236 1.970 8.681 6.475 AG ACADEMY 43 4.204 4.320 159 159 BUSINESS ED ACADEMY 1.698 564 521 1.655 1.655 MULTIMEDIA PUBLISHING 2.454 1.116 1.482 2.088 2.088 CAREER PREP VISUAL FINE ARTS 6.671 15.787 11.823 2.707 2.707 GUIDANCE 8.110 47J94 52.624 16 2.896 2.896 HEALTH WELLNESS ACADEMY 1.282 5.857 5.104 (2.001) 34 34 FFL & WEIGHT ROOMS 665 3.272 3.077 470 470 HORTICULTURE 6.417 6.159 7.514 726 5.788 5.788 FAMILY & CONSUMER SCI 316 85 2.397 2.058 62 62 LIBERAL ARTS ENGLISH 1.487 49 1.280 5 261 261 LIBRARY 1.160 194 929 171 596 596 LIBRARY LOWES GRANT 5.000 4.997 3 3 SCIENCE ACADEMY 1.354 60 4.863 5.632 2.183 2.183 MATH ACADEMY 891 110 80 1.121 1.121 GILBREATH MD 893 831 1.603 41 162 162 GILBREATH GRANT 605 438 400 (41) 602 602 JRROTC UNIT SUPPORT MA INT 664 1.095 820 110 1.049 1.049 JRROTC BOOSTERS 6.635 17.505 19.957 (177) 4.006 4.006 ALLEN MMD 10 331 440 100 SPECIAL ED 42 42 42 ACADEMIC TEAM 1.619 2.871 2.000 748 748 BAND BOOSTERS 6.239 145.215 156.268 4.876 62 1.343 1.405 BAND WINTERGUARD 14.007 17.174 3.200 33 33 BIG RED MACHINE 879 879 879

See Notes to Financial S1a1cmcn1s 83

Cash June 30.2017

INDOOR WINDS-DCPS

INDOOR PERCUSSION CLASSOF2018

CLASS OF 2017 CLASS OF 2020 CLASS OF 2019 DRAMNSPEECH 720

CLASS OF 2016 DRAMA MUSICAL

DANCE STUDIO GRAD/SR. ACTIVITIES 2,419

CHAMBER CHOIR I ORCHESTRA 948

TARGET DONATION PROM 15,213

CATW 14

RENAISSANCE REWARDS 1.032 FCS BUSINESS 2,065

T-SHIRTS/DC PRINTING 1.616 PERFORM ARTS TRIP YEARBOOK-ECHOES 17.815 NICK BROWN SCHOLARSl-!11'

BRAD SMITH SCHOLARSHIP FULKERSON SCHOLARSHIP 500 ROBIN SWEENEY SCIJOLARSHIP 5,273

JOYCE ASKINS MEM. SCHOLAR 5.650 CONTINGENCY FUND 74.010 PETTY CASH 100

ATHLETIC CASH BOXES 3.000 DISTRICT ACTIVITY FUNDS

$ 356,250



Receipts

18,250 19,870

10.780

12,508

375 16,979 6,935

14,040 16,122

959 2,010

6.463

25.320

JOO 3,000

33,011

$ 1,480,094 $

DAVIESS COUNTY I JJGH SCHOOL


Disbursc::mC"nts Transfc:rs

27.322 9,152

24.507 4,700

10,073 760

11,226 (771)

10,298 10.000 17,113 133 9,828 1,945

12.480 (650)

15.598 (174)

6.414 6.494

3.472 J,409 16,336 11.315

36,294 (75)

500 500

1.000

100 3,000

33,011

1,431.406 $ $

See Notes. to Financi.ll St:itemcnts 84

Cash June30. 2018

80 63

2.187

511

2.496

16,123 364

2.071 2.012 3.058

6,766

500 5.273 4,650

74,010 JOO

3,000

404,938

Accounts Receivable

$ 2,982


lnvt!ntory Payable June 30. 2018

80 63

2,187

511

2,496

16.123 364

2,071 2,012

3.058

6,766

500 5,273 4,650

74,010 JOO

3,000

s 1,004 s 1.417 s 407.507


SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS

Year End June 30. 2018

Pass-Through CFDA Entity Identifying Fund Project Federal Expenditures

Granter I Program Title Number Number Number Number Exeenditures to Subrecieients

U.S. Depanment of Agriculture Passed through Kentucky Depanment of Agriculture:

Food Donation 10.555 057502-15 51 NA s 505.506 5

Passed through Kentucky Depanment of Education: Child and Adult Care Food Prob'fam 10.558 7790021-17 51 NA 1.070 Child and Adult Care Food Program 10.558 7800016-17 51 NA

1.070 Child Nutrition Cluster.

School Breakfast Program 10.55., 7760005-15 51 NA 1.296.956 National School Lunch Program 10.555 7750002-15 51 NA 2,927.529 Summer Food Service Program for Children 10.559 7740023-15 51 2098 300,595

4.525.080

Total U.S. Depanment of Agriculture s 5,031.656 s

!.l S. Department of Defense Direct Program:

ROTC 12.000 504C 2 504C s (3 .220) $

ROTC 12.000 504D 2 504D 118.716 115.496

Total U. S. Department of Defense s 115.496 s

!.l s. Department of Education Passed through Kentucky Depanment of Education:

Title I Grants to Local Educational Agencies: Title I - Local Educational Agencies 84.0IOA 3100002-15 2 3108 s 7.098 s Title I - Parent Involvement 84.0IOA 3100002-15 2 310BM 19 Title I - Local Educational Agencies 84.0IOA 3100002-16 2 310C 270,894 Title I - Parent Involvement 84.0IOA 3100002-16 2 3IOCM 7,787 Title I - Local Educational Agencies 84.0IOA 3100002-17 2 310D 1.685.315 Title I - Parent Involvement 84.0IOA 3100002-17 2 310DM 10.907 Title I - Pan D. Subpan 2 84 .0IOA 3100102-16 2 314C 1.692 Title I - Pan D. Subpan 2 84.0IOA 3100102-17 2 314D 90,612

2.074.324

Migrant Education - State Grant Program 84.0IIA 3110002-16 2 311C 139,545 5.363 Migrant Education - State Grant Program 84.01 IA 3110002-17 2 311D 19,086 5.054

158,631 10.417 Special Education Cluster:

Special Education - Grants to States: IDEA, Part B 84.027A 3810002-16 2 337C 442,019 IDEA. Pan B 84.027A 3810002-17 2 3370 1.682,178

2.124.197 Special Education - Preschool Grants:

IDEA Preschool 84.173A 3800002-16 2 343C 133 IDEA Preschool 84.173A 3800002-17 2 3430 76.571

2.200.901

Career and Technical Education - Basic Grants to States: Perkins - Pan C (Carry-over) 84.048 3710002-17 2 348CA 4,623 Perkins - Part C 84.048 3710002-17 2 348D 88 .748

93,371

Title III Limited English Proficiency 84.365A 3300002-16 2 345C 48.714 Title III Limited English Proficiency 84.365A 3300002-17 2 345D 1.880 Title III Immigrant 84.365A 3300002-17 2 345D(

50,594

85


SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS. CONTINUED

Year Ended June 30. 2018

Pass-Through CFDA Entity Identifying Fund Project Federal

Grantor I Program Title

U. S. Department of Education. Continued Passed through Kentucky Depanment of Education. Continued:

Improving Teacher Quality State Grants: Title II Title II Title II

Student Suppot1 and Academic Enriclunent Grant: Title IV. Pan A

Passed through Green River Regional Educational Co-op: Race to the Top Carryover

Passed through Kentuc~-y Depat1ment of Juvenile Justice : Title I Part D Subpan I

Total U. S. Depat1ment of Education

U.S. Department of Health and Human Services Passed through Kentucky Cabinet for Health and Family Services:

Number Number

84.367A 84.367A 84.367A

84.424A

84.416A

84.013

3230002-15 3230002-16 3230002-17

3420002-17

436CA

3130

Child Care and Development Block Grant 93.575

Passed through Catholic Charities of Louisville. KY: Refugee School Impact Refugee School Impact

Total U. S. Depat1ment of Health and Human Services

Total Federal Awards

Notes to Schedule of Expenditures of Federal Awards

Note A: Basis of Presentation

93.566 93 .566

420C 4200

Number Number Expenditures

2 2 2

2

2

2

52

2 2

4018 401C 4010

552D

436CA

3130

NA

420C 4200

s

s

s

s

7,246 93.486

190,100 290,832

892 892

7,227 7.227

22.529 22.529

4.899.301

44,714

12,908

12,908

57.622

10.104.075

The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of the Daviess County School District (District) under programs of the federal goverrunent for the year ended June 30. 2018. The infonnation in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200. U11ijor111 Administratfre Req11ire111e11ts. Cost Pri11ciples, and Audit Req11ire111e11ts Jar Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the District. it is not intended to. and does not. present the financial position. changes in net assets or cash flows of the District.

Note B: Summary of 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 the Unifonn Guidance. wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Note C: Indirect Cost Rate

The District has elected not to use the I 0% de minimus indirect cost rate as allowed under the Uniform Guidance.

Note D: Nonmonetary assistance for the Food Distribution Program is reported in the Schedule at the fair value of the co1nmodities received.

86

Expenditures to Subrecipients

s

s

s

s 10.417

~Riney Hancock CPAs · · · · · · · · · · · · · · · · r.w PSC

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS



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 the Daviess County School District (District) as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the District's basic financial statements and have issued our report thereon dated October 5, 2018.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the nonnal 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.

87 . . . . . . . www.rineyhancock.com - info @ rineyhancock.com ... ..... .



313 Southeast First Street - Evansville, Indiana 4 7713 - 812-423-0300 - Fax: 812-423-6282 A member of Alli11ial Global -An association of legally imlepe11de11t firms

Daviess County School District - 2

Internal Control Over Financial Reporting, Continued

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the detennination 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 .

In addition, the results of our tests disclosed no material instances of noncompliance with specific statutes or regulations identified in the Kentucky Public School Districts' Audit Contract and Requirements prescribed by the Kentucky State Committee for School District Audits.

We noted certain matters other than significant deficiencies and material weaknesses that we reported to management of the District in a separate letter dated October 5, 2018.

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.


88

~Riney Hancock CPAs · · · · · · · · · · · · · · · · · · · · · · · · · · · · r.w PSC

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL

CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE



Report on Compliance for Each Major Federal Program

We have audited Daviess County School District's (District) compliance with the types of compliance requirements described in the 0MB Compliance Supplement that could have a direct and material effect on each of the District's major federal programs for the year ended June 30, 2018. The 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 oflaws, regulations, contracts, and grants applicable to its federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of the District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administratiie Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the District's compliance.

. . w w w. r i n e y h a n c o c k . c cJ'tn - i n f o @ r i n e y h a n c o c k . c o m · ·



3 I 3 Southeast First Street - Evansville, Indiana 4 77 I 3 - 8 I 2-423-0300 - Fax: 8 I 2-423-6282

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Daviess County School District - 2

Opinion on Each Major Federal Program

In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2018.

Report on Internal Control Over Compliance

Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District's internal control over compliance with the types ofrequirements 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 the Unifonn Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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 the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.


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SCHEDULE OF FINDINGS AND QUESTIONED COSTS


A. Summary of Auditor's Results

1. The auditor's report expresses an unmodified opm10n on whether the financial statements of the Daviess County School District (District) were prepared in accordance with GAAP.

2. No significant deficiencies relating to the audit of the financial statements are reported in the Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Perfonned in Accordance with Government Auditing Standards. No material weaknesses were reported.

3. No instances of noncompliance material to the financial statements of the District, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit.

4. No significant deficiencies in internal control over major federal award programs were reported in the Independent Auditor's Report on Compliance For Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance. No material weaknesses were reported.

5. The auditor's report on compliance for the major federal award programs for the District expresses an unmodified opinion on all major federal programs.

6. The audit did not disclose any findings that are required to be reported in accordance with 2 CFR section 200.516(a).

7. The programs tested as major programs were:

Special Education Cluster:

84.027 IDEA, Part B 84.173 IDEA Preschool

8. The threshold used for distinguishing between Type A and B programs was $750,000.

9. The District was determined to be a low-risk auditee.

B. Findings - Financial Statements Audit

None

C. Findings and Questioned Costs - Major Federal Award Programs Audit

None

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* R"ds ~fl}1RST! Daviess County Public Schools

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS


No audit findings were reported in the schedule of findings and questioned costs for the year ended June 30, 2017.

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Superintendent - Matt Robbins Daviess County Board of Education

Mike Clark Dr. Tom Payne Frank G. Riney III Dale Stewart Todd Anderson 1622 Southeastern Parkway Owensboro KY 42303

www.dcos.org phone: 270-852-7000 fax: 270-852-7030 contact(c"Z dcos.org

daviess county school district

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