Southgate Schools Audit Fy 2011.12

SOUTHGATE COMMUNITY SCHOOL DISTRICT FINANCIAL REPORT WITH SUPPLEMENTAL INFORMATION JUNE 30, 2012
SOUTHGATE COMMUNITY SCHOOL DISTRICT FINANCIAL REPORT WITH SUPPLEMENTAL INFORMATION JUNE 30, 2012 TABLE OF CONTENTS
PAGE INDEPENDENT AUDITORS REPORT MANAGEMENTS DISCUSSION AND ANALYSIS BASIC FINANCIAL STATEMENTS District-wide Financial Statements Statement of Net Assets Statement of Activities Fund Financial Statements Balance Sheet - Governmental Funds Statement of Revenue, Expenditures and Changes in Fund Balance Governmental Funds Reconciliation of the Statement of Revenue, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Fiduciary Funds Statement of Net Assets Statement of Changes in Net Assets Notes to Financial Statements REQUIRED SUPPLEMENTAL INFORMATION Budgetary Comparison Schedule - General Fund Budgetary Comparison Schedule - Special Revenue - Special Education Center Program OTHER SUPPLEMENTAL INFORMATION Combining Balance Sheet - Nonmajor Governmental Funds Combining Statement of Revenue, Expenditures and Changes in Fund Balance - Nonmajor Governmental Funds General Fund Balance Sheet Statement of Changes in Fund Balance Statement of Revenue and Other Financing Sources - Budget and Actual Statement of Expenditures and Other Financing Uses - Budget and Actual 1-2 3-12
13 14
15 16 17
18 19 20-36
37 38
39 40
41 42 43-44 45-53
SOUTHGATE COMMUNITY SCHOOL DISTRICT FINANCIAL REPORT WITH SUPPLEMENTAL INFORMATION JUNE 30, 2012 TABLE OF CONTENTS
PAGE OTHER SUPPLEMENTAL INFORMATION (Continued) Special Revenue Funds Combining Balance Sheet Combining Statement of Revenue, Expenditures and Changes in Fund Balance Statement of Revenue and Expenditures - Budget and Actual - Special Education Center Program Statement of Revenue and Expenditures - Budget and Actual - Cafeteria Debt Service Schedule of Bonds Issued, Redeemed and Outstanding Trust and Agency Funds Balance Sheet Statement of Revenue, Expenditures and Changes in Fund Balance Private-Purpose Trust Funds
54 55 56 57
58-65
66 66
INDEPENDENT AUDITORS REPORT
Board of Education Southgate Community School District
We have audited the accompanying financial statements of the governmental activities, each major fund and the aggregate remaining fund information of Southgate Community School District, as of and for the year ended June 30, 2012, which collectively comprise the School District's basic financial statements as listed in the table of contents. These financial statements are the responsibility of Southgate Community School Districts management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund and the aggregate remaining fund information of Southgate Community School District as of June 30, 2012, and the respective changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2012, on our consideration of Southgate Community School Districts 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 and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the managements discussion and analysis and budgetary comparison information on pages 3 through 12 and pages 37 and 38 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 managements 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.
Board of Education Southgate Community School District Page 2
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Southgate Community School Districts financial statements as a whole. The accompanying other supplemental information, as identified in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. The other supplemental information is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
October 30, 2012
SOUTHGATE COMMUNITY SCHOOL DISTRICT

Managements Discussion and Analysis For the Fiscal Year Ended June 30, 2012
To the Citizens and Board of Education Members: The Southgate Community School District (School District) is a public school district operating under the laws of the State of Michigan to offer a free public education to all students (K-12) within its boundaries and Schools of Choice legislation. The School District is governed by a Board of Education consisting of seven publicly elected members. The enclosed document represents the annual financial report of the School District for the fiscal year ended June 30, 2012. This report has been prepared by the School Districts Department of Finance. Responsibility for the accuracy of the presentation, including all disclosures, rests with the Superintendent. The data presented in this report is accurate in all material respects and is presented in a manner designed to fairly describe the financial position and results of operations of the School District, as measured by the financial activity of the School Districts various funds. All disclosures necessary to maximize user comprehension of the contents of this report have been included.
Report Format This financial report is in accordance with GASB No. 34 Financial Statement Reporting format. It includes a full accrual basis government-wide Statement of Net Assets and Statement of Activities and a Managements Discussion and Analysis of operations.
The School District The present Southgate Community School District was formed from a successful annexation of two school systems that took place in May 1970. Prior to that date, the Southgate Community School District comprised the area formerly known as Ecorse Township #8 and the Heintzen School District, which included portions of the now present City of Allen Park, but formerly Ecorse Township #7. The consolidated district covers 7 square miles within the entire present boundary of the City of Southgate and a portion of southern City of Allen Park. The present facilities include (6) K-5 elementary schools, (1) 6-7 middle school, (1) 8-9 middle school, (1) 10-12 senior high school, and (1) adult and community education building. Enrollment within the School District has shown modest increases for the last ten years, primarily due to school of choice. The 2011-12 school year, however, realized a decrease in students. The Southgate Community School District is also the fiscal agent for Beacon Center, an area program for emotionally impaired students located in the City of River Rouge. The Southgate Community School District Board of Education has oversight responsibility and control over all activities related to the School District. The School District is the lowest level of government exercising direct responsibility for all public school education within its boundaries. As a result, all significant activities and organizations have been included in the basic financial statements. The School District is financially independent. The Board of Education is the governing body and is exclusively responsible for its public decisions. The Board of Education appoints the management of the School District and is accountable for all fiscal matters. The latitude afforded under the State statutes allows the Board of Education to significantly influence operations. Additional information regarding the School District is presented in the other sections of this report.
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Economic Conditions State school district funding in Michigan is dependent primarily upon a state aid formula. This means that local economic conditions have little or no impact on overall School District financing. The formula establishes a foundation base per pupil to fund the operation of the School District. The School District also receives various federal, state and foundation grants to fund specific programs. During the fiscal year 1994-1995, the State revenue source was adjusted away from a local property tax-based system and moved toward a predominately state sales tax-based system. As a result of this funding change, the School District now receives over 80 percent of its total General Fund revenue from the State, with the remainder coming from local, federal, and county sources. Therefore, the dependency on the State economy becomes paramount to what programming can be supported locally. The local economy continues to suffer from higher than average unemployment levels brought on by the loss of manufacturing jobs throughout the region. Funding from the State of Michigan for fiscal year 2011-12 was less than the 2010-2011 fiscal year funding level. The State foundation allowance decreased by $470 per student from $7,535 to $7,065. This was partially offset by the Best Practice Incentive. The School District implemented four of five best practices during the 2011-2012 school year and received $100 per student. In addition, another addback was $107 per pupil to cover District short-falls in the MPSERS Retirement System. Reductions in expenditures through outsourcing of the maintenance and custodial staff and employee wage concessions of 5%-6% did not exceed increases in expenditures due to increases in the MPSERS retirement rate, severance payments, six catastrophic health claims, higher legal expenses due to numerous contract and personnel issues and a decrease in the pupil count of 198 students.
Classification of Funds All funds of the School District are included in the annual financial report, which is available to the public at www.SouthgateSchools.com. The financial section reports separately the major and non-major funds administered by the Board, as discussed in the Managements Discussion and Analysis. The management of the Board is responsible for the financial information and representations contained in the financial statements and other sections of the annual report. In preparing the financial statements, it is necessary that management make informed estimates and judgments, based on currently available information, of the effects of certain events and transactions. The basic financial statements, supplemental statements and schedules presented in the financial section of this report present fairly, and with full disclosure, the financial position and results of the financial operations of the funds in conformity with generally accepted accounting principles and demonstrate compliance with financerelated legal and contractual provisions. The purpose and description of each major fund, along with a summary of the significant accounting policies, are contained in Note 1 to the financial statements. The basis of accounting for each fund is consistent with activities and objectives of the fund as a fiscal and accounting entity. In contrast to the fund level information, the district-wide financial statements report the financial condition and results of operations of the School District as a whole.
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Budgetary and Accounting Controls The Board maintains a system of budgetary and accounting controls designed to assist management in meeting its responsibility for reporting reliable financial information. The system is designed to provide reasonable assurance that assets are safeguarded and transactions are recorded and executed with managements authorization. Internal control systems are subject to inherent limitations with regard to the necessity to balance costs against the benefits produced. Management believes that the existing system of budgetary and accounting controls provides reasonable assurance that errors or irregularities that could be material to the financial statements are prevented or would be detected within a timely period. The Board utilizes a budget that is prepared according to the guidelines and requirements set forth in State law and the State Financial Reporting Manual. During the fiscal year, various financial reports are prepared for the governmental fund types and are distributed to the School District administrators as needed. In addition to these reports, each administrator and school principal is furnished with login and password information for tracking their budgets on a daily/monthly basis. These reports convey the status of the General Fund expenditure accounts for which they are responsible. The finance system details the daily/monthly transactions and summarizes the balances to be spent from the appropriations allocated for goods and services among the programs so managed. The report of our independent certified public accountants, Hungerford and Co. appears at the beginning of the financial section of this report. Their audit of the basic financial statements was performed in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, issued by the Comptroller General of the United States, which includes a review of the Boards system of budgetary and accounting controls.
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Financial Condition of June 30, 2012 Revenues for General fund operations totaled $44,018,217 during the year ended June 30, 2012, a decrease of 7.51% from June 30, 2011. The decrease resulted primarily from the discontinuation of the ARRA Stabilization and Edu-Jobs programs, the reduction in the State Aid foundation allowance and reductions in funding from various other Federal, State and County programs.
June 30, 2012 Amount Revenue and Other Sources Local Sources $ 5,934,526 State Sources 33,468,922 Federal Sources 2,752,836 Other Sources 961,888 Inter-District Sources 900,045 Total Revenue and Other Sources Percent of Total
June 30, 2011 Amount Percent of Total
Variance Amount Percent
13.49% 76.03% 6.25% 2.19% 2.04%
6,117,489 34,820,892 4,568,436 1,257,738 829,513
12.86% $ (182,963) 73.16% (1,351,970) 9.60% (1,815,600) 2.64% (295,850) 1.74% 70,532
-2.99% -3.88% -39.74% -23.52% 8.50%
$ 44,018,217
100.00%
$ 47,594,068
100.00%
$ (3,575,851)
-7.51%
Expenditures and Other Uses Instruction $ 27,383,983 Support Services 17,782,889 Other 537,797 Inter-District Transfers 60,830 Total Expenditures and Other Uses
59.84% 38.86% 1.17% 0.13%
$ 28,324,065 17,809,193 288,461 20,056
60.99% 38.35% 0.62% 0.04%
(940,082) (26,304) 249,336 40,774
-3.32% -0.15% 86.44% 203.30%
$ 45,765,499
100.00%
$ 46,441,775
100.00%
(676,276)
-1.46%
Expenditures decreased by $676,276 or 1.46% over the previous fiscal year. employee wage concessions of 5%-6% and privatization of the custodial staff.
This was primarily due to
Special Revenue Funds The Special Revenue Funds are comprised of the Cafeteria and Special Education Funds. The Special Education Fund is financed primarily through the Wayne County Regional Education Service Agency Act 18 Revenues; those property tax monies derived from a special education millage approved and levied under Sections 1721-1729 of the School Code of 1976, being MCL 380.1721-380.1729, General Fund contributions and per pupil state aid. The Center Program is operated by the School District to meet the individual educational goals and objectives of the low-incident, special education students from within and outside of the School District. The Cafeteria Fund is financed by serving school lunches and breakfast to students, part of which is funded by the National School Lunch Program. For the fiscal year 2011-12, a net profit from operations amounted to $4,967.
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Debt Service Funds The School District has issued General Obligation bonds with a principal balance due of $38,232,277 at June 30, 2012. The largest portion of these obligations relates to a 1999 issue of School Building and Site Bonds sold in June 1999, for the purpose of remodeling, equipping, furnishing and re-furnishing school buildings. In October 2002, the School District advance refunded a portion of the 1999 bond issue, resulting in a reduction in total debt service payments of $1,199,992 over the life of the issue. Again in April 2005, the School District advance refunded a portion of the 1999 bond issue resulting in a reduction in total debt service payments of $638,057 net present value savings over the life of the issue. Again in September 2006, the School District advance refunded a portion of the 1999 bond issue resulting in a reduction in total debt service payments of $326,595 net present value savings over the life of the issue. Payments on the bond issues and semi-annual interest obligations are financed by millage levied against property located within the School District. The debt was 4.90 and 5.15 mills for the 2010 and 2011 tax years, respectively. The last of the outstanding bonds will mature in 2025. In April 2012, the School District advance refunded the 2002 Energy Bonds and a portion of the 2002 Refunding Bonds, resulting in reductions in total debt service payments of $39,581 and $93,774, respectively.
Long-Term Obligations Other long-term obligations are itemized under Note 8 to the financial statements. They consist of estimated Durant Non-Plaintiff Bonds, capital equipment leases, installment notes for buses and three portable modular classroom buildings and compensated absences.
Capital Project Funds On March 14, 2012, the School District issued $2,755,000 General Obligation Limited Tax Bonds for energy conservation improvements in all of the buildings. This project, which is anticipated to take two years, incurred expenditures of $1,344,750 as of June 30, 2012.
Cash Management The Board has an aggressive cash management program that consists of expediting the receipt of revenues and prudently investing available cash in obligations partially insured by the Federal Deposit Insurance Corporation. Unfortunately, interest revenue in the General Fund has decreased considerably over the last several years as interest rates have declined and the available cash to invest has diminished. The total interest for the 2011-12 school year was $1,689 compared to the $50,916 interest received in 2008-09.
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The School District as a Whole The following provides a summary of the School Districts net assets as of June 30:
TABLE 1 Governmental Activities (in Millions) 2011-12 ASSETS Current Assets Capital Assets Total Assets LIABILITIES Current Liabilities Long-Term Liabilities Total Liabilities NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for Debt Service Restricted for Capital Projects Restricted for Other Purposes Unrestricted Deficit Total Net Assets (Deficit) $ $ $ 14.9 34.8 49.7 $ $ 2010-11 14.8 34.9 49.7
19.8 37.6 57.4
18.9 37.6 56.5
(4.3) 1.4 0.2 (5.0) (7.7) $
(3.5) (0.3) (3.0) (6.8)
The above analysis focuses on the net assets (see Table I). The change in net assets (see Table 2) of the School Districts governmental activities is discussed below. The School Districts net assets were a deficit of $7.7 million at June 30, 2012. Capital assets, net of related debt totaling $4.3 million, compares the original cost, less depreciation of the School Districts capital assets to long-term debt used to finance the acquisition of those assets. Most of the debt will be repaid from voter-approved property taxes collected as the debt service comes due. Restricted net assets are reported separately to show legal constraints from debt covenants and enabling legislation that limit the School Districts ability to use those net assets for day-to-day operations. The remaining amount of net assets or the unrestricted portion was a deficit of $5.0 million. The deficit of $5.0 million in unrestricted net assets of governmental activities represents the accumulated results of the current and prior years operations.
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The results of this years operations for the School District as a whole are reported in the Statement of Activities (see Table 2), which shows the changes in net assets for fiscal year ending June 30, 2012.
TABLE 2 Governmental Activities (in Millions) 2011-12 REVENUE Program Revenue Charges for Services Operating Grants General Revenue Property Taxes State Foundation Allowance Other Total Revenue FUNCTIONS/PROGRAM EXPENSES Instruction Support Services Food Services Athletics Special Education Center Program Interest on Long-Term Debt Other Depreciation (Unallocated) Total Expenses 2010-11
1.3 14.7 8.8 30.8 0.2
1.5 17.0 9.2 31.9 0.2
55.8
59.8
27.5 17.6 1.5 0.5 6.4 1.6 1.7
28.4 17.2 1.5 0.6 6.5 1.8 1.5
56.8
57.5
Decrease in Net Assets As reported in the Statement of Activities, the cost of all of our governmental activities this year was $56.8 million. Certain activities were partially funded from those who benefited from the programs ($1.3 million) or by other governments and organizations that subsidized certain programs with grants and contributions ($14.7 million). The School District paid for the remaining public benefit portion of our governmental activities with $8.8 million in taxes, $30.8 million in State foundation allowance, and with our other revenues, i.e., interest and general entitlements.
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The School Districts Funds As we noted earlier, the School District uses funds to help it control and manage money for particular purposes. Looking at funds helps the reader consider whether the School District is being accountable for the resources taxpayers and others provide to it and may provide more insight into the School Districts overall financial health. As the School District completed this year, the governmental funds reported a combined fund deficit of $1,322,902 which is an increase in the deficit of $362,361 from last year.
General Fund In the General Fund, the fund balance decreased by $1,747,282 creating a $3,249,657 fund deficit at June 30, 2012. The School District anticipated a gain of $626,712 in its amended 2011-12 budget. That amount decreased by $2,373,994, primarily due to lower than anticipated funding from federal, state and county programs, higher health insurance costs and unexpected property tax write-offs by Wayne County.
Special Revenue Funds The School District maintains several Special Revenue Funds to deal with a Special Education Center Program and Cafeteria Funds. No fund balances are maintained in these funds with the exception of the Cafeteria. The Special Education Fund tracks the expenditures of our Act 18 Center program. This fund is also funded by State revenues and a local Wayne County special education millage.
Debt Service Funds The combined Debt Service Funds showed a fund balance of $315,919. This is a decrease of $10,913 over the prior year caused primarily by unexpected property tax write-offs by Wayne County.
Capital Project Fund During the year end June 30, 2012, the School District issued general obligation limited tax bonds in the amount of $2,755,000 for the purpose of making energy conservation improvements throughout the buildings in the School District. As of June 30, 2012, $1,344,750 of these bond proceeds was spent on the energy conservation projects.
General Fund Budgetary Highlights Over the course of the year, the School District revises its budget as it attempts to deal with unexpected changes in revenues and expenditures. State law requires that the budget be amended to ensure that expenditures do not exceed appropriations. The final amendment to the budget was actually adopted on April 3, 2012. (A schedule showing the School Districts original and final budget amounts compared with amounts actually paid and received is provided in required supplemental information of these financial statements).
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Capital Assets and Debt Administration Capital Assets At June 30, 2012, the School District had $34.8 million invested in a broad range of capital assets, including construction in progress, buildings, and furniture and equipment. This amount represents a net decrease (including additions, deletions, and depreciation) of approximately $120,000 or 0.3 percent from last year. This years additions of $2,039,827 included energy conservation improvements, copiers, equipment and busses, but scattered throughout the District as well both out of the General Operating and Special Education Funds. Debt At the end of this year, the School District had $38,232,277 in bonds outstanding versus $37,740,461 in the previous year. Those bonds consisted of the following:
2012 General Obligation Bonds $ 38,232,277
2011 $ 37,740,461
The School Districts General Obligation Bond rating is BBB+ by Standard & Poors. The State limits the amount of general obligation debt that school districts can issue to 15 percent of the assessed value of all taxable property within the School Districts boundaries. The School Districts statutorily imposed limit is $111,361,412 of unqualified debt. If the School District issues qualified debt, i.e., backed by the State of Michigan, such obligations are not subject to this debt limit. The School District has no outstanding unqualified debt as of June 30, 2012. Other obligations include compensated absences and equipment notes. We present more information about our long-term liabilities in the notes to financial statements.
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Economic Factors and Next Years Budgets and Rates
One of the most important factors when setting the School Districts budget is the uncertainty of the State of Michigans financial outlook. The state foundation revenue is determined by multiplying the blended student count by the foundation allowance per pupil. The blended count for the 2012-2013 fiscal year is 90 percent and 10 percent of the February 2012 and September 2012 student counts, respectively. The 2012-13 budget was adopted in June 2012, based on an estimate of students that will be enrolled in September 2012. The School District continues to see a decrease in student population. The preliminary totals from the September 2012 pupil count resulted in a decrease of 145 students. Once the final student count and related per pupil funding is validated, state law requires the School District to amend the budget if actual School District resources are not sufficient to fund original appropriations. Any reduction could result in further budget cuts.
Contacting the Districts Financial Management The financial report is intended to provide our citizens and taxpayers with a general overview of the School Districts finances. If you have questions about this report or would like additional information, contact William J. Grusecki at the Business Office, Southgate Community School District.
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SOUTHGATE COMMUNITY SCHOOL DISTRICT STATEMENT OF NET ASSETS JUNE 30, 2012 GOVERNMENTAL ACTIVITIES ASSETS CURRENT ASSETS Cash in Bank Investments Taxes Receivable Accounts Receivable Due From Other Governmental Units Inventories Deposits With Paying Agents Prepaid Expenses Total Current Assets NONCURRENT ASSETS Capital Assets Less: Accumulated Depreciation Total Noncurrent Assets TOTAL ASSETS LIABILITIES AND NET DEFICIT LIABILITIES CURRENT LIABILITIES Note Payable - State Aid Accounts Payable Accrued Payroll and Withholdings Accrued Interest Due to Other Governmental Units Due To Fiduciary Funds Other Liabilities Deferred Revenue Bonds Payable, Due Within One Year Other Obligations, Due Within One Year Total Current Liabilities NONCURRENT LIABILITIES Bonds Payable Notes Payable/Capital Leases Compensated Absences Total Noncurrent Liabilities NET DEFICIT Invested in Capital Assets, Net of Related Debt Restricted for Debt Service Restricted for Capital Projects Restricted for Other Purposes Deficit Total Net Deficit TOTAL LIABILITIES AND NET DEFICIT See accompanying notes. -13$ $
2,495,834 2,788,331 154,893 126,868 7,917,838 102,144 336,220 961,609 14,883,737 68,768,941 (33,930,808) 34,838,133 49,721,870
10,625,000 604,904 3,677,477 394,130 132,330 263 634,551 503,384 3,007,277 214,837 19,794,153
35,225,000 681,726 1,735,306 37,642,032 (4,290,707) (49,481) 1,390,867 219,969 (4,984,963) (7,714,315) 49,721,870
SOUTHGATE COMMUNITY SCHOOL DISTRICT STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012
GOVERNMENTAL PROGRAM REVENUES ACTIVITIES NET (EXPENSE) REVENUE AND CHARGES FOR EXPENSES FUNCTIONS/PROGRAMS Governmental Activities Instruction Support Services Athletics Cafeteria Special Education Center Program Interest on Long-Term Debt Depreciation - Unallocated Total Governmental Activities SERVICES OPERATING GRANTS CHANGES IN NET ASSETS
$ 27,515,719 17,657,614 513,510 1,475,247 6,401,344 1,594,985 1,666,807 56,825,226
607,497 88,994 586,389 1,282,880
4,365,506 2,024,328 981,378 7,283,551 14,654,763
(22,542,716) (15,633,286) (424,516) 92,520 882,207 (1,594,985) (1,666,807) (40,887,583)
General Revenues Taxes Property Taxes Levied for General Operations Property Taxes Levied for Debt Service Other Property Taxes State Aid - Unrestricted State Aid - Durant Interest on Investment and Taxes Miscellaneous Total General Revenues Change in Net Assets Net Deficit, Beginning of Year Prior Period Adjustment Net Deficit, Beginning of Year, Restated Net Deficit, End of Year $
4,891,751 3,823,408 88,456 30,824,643 36,419 1,689 159,028 39,825,394 (1,062,189) (6,790,933) 138,807 (6,652,126) (7,714,315)
See accompanying notes. -14-
SOUTHGATE COMMUNITY SCHOOL DISTRICT BALANCE SHEET - GOVERNMENTAL FUNDS JUNE 30, 2012 SPECIAL EDUCATION GENERAL FUND ASSETS Cash in Bank Investments Taxes Receivable Accounts Receivable Due From Other Funds Due From Other Governmental Units Inventories Deposits With Paying Agent Prepaid Expense TOTAL ASSETS $ 2,478,969 1,329,948 99,524 107,866 7,795,458 53,742 336,220 949,497 CENTER PROGRAM $ 577,415 73,724 6,600 657,739 $ NONMAJOR GOVERNMENTAL FUNDS 16,865 1,458,383 55,369 19,002 403,362 48,656 48,402 5,512 2,055,551 $ TOTAL GOVERNMENTAL FUNDS 2,495,834 2,788,331 154,893 126,868 980,777 7,917,838 102,144 336,220 961,609 15,864,514
$ 13,151,224
LIABILITIES AND FUND BALANCE (DEFICIT) LIABILITIES Note Payable - State Aid Accounts Payable Accrued Payroll and Withholdings Accrued Interest Payable Due to Other Funds Due to Other Governmental Units Other Liabilities Deferred Revenue Total Liabilities FUND BALANCE (DEFICIT) Nonspendable Restricted for Debt Service Restricted for Capital Projects Restricted for Food Service Unassigned Total Fund Balance (Deficit) TOTAL LIABILITIES AND FUND BALANCE (DEFICIT) Total Governmental Fund Balance (Deficit) Amounts reported for governmental activities in the Statement of Net Assets are different because Capital assets used in governmental activities are not financial resources and are not reported in the funds. The cost of the capital assets is $ 68,768,941 Accumulated depreciation is (33,930,808) Long-term liabilities are not due and payable in the current period and are not reported in the fund Bonds Payable Capital Leases Payable Notes Payable Compensated Absences Accrued interest is not included as a liability in governmental funds Net deficit of governmental activities See accompanying notes. -15$ $ 10,625,000 517,249 3,274,430 28,730 981,040 528,488 445,944 16,400,881 $ 16,299 403,047 132,330 106,063 657,739 $ 71,356 57,440 128,796 $ 10,625,000 604,904 3,677,477 28,730 981,040 132,330 634,551 503,384 17,187,416
(3,249,657) (3,249,657) $ 13,151,224 $
657,739 $
8,973 315,919 1,390,867 210,996 1,926,755 2,055,551 $ $
8,973 315,919 1,390,867 210,996 (3,249,657) (1,322,902) 15,864,514 (1,322,902)
34,838,133
(38,232,277) (537,967) (358,596) (1,735,306) (365,400) (7,714,315)
SOUTHGATE COMMUNITY SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2012 SPECIAL EDUCATION GENERAL FUND REVENUE Local Sources State Sources Federal Sources Intergovernmental Sources Total Revenue EXPENDITURES Instruction Support Service Cafeteria Expense Capital Projects Debt Service Total Expenditures Excess Revenue (Expenditures) OTHER FINANCING SOURCES (USES) Operating Transfers In (Out) Payment on Equipment Loans Tuition to Other Districts Payment to Refunded Bond Escrow Agent Bond Issuance Costs Proceeds From Bond Refundings Bond Proceeds Expense Reimbursement Allocation Total Other Financing Sources (Uses) NET CHANGES IN FUND BALANCE FUND BALANCE (DEFICIT), Beginning Prior Period Adjustment FUND BALANCE (DEFICIT), Beginning, Restated FUND BALANCE (DEFICIT), Ending $ 5,934,526 33,468,922 2,752,836 900,045 43,056,329 CENTER PROGRAM $ 2,175,000 284,034 4,824,517 7,283,551 $ NONMAJOR FUNDS 4,430,854 96,776 921,021 5,448,651 $ TOTAL FUNDS 10,365,380 35,740,698 3,957,891 5,724,562 55,788,531 GOVERNMENTAL GOVERNMENTAL
27,383,983 17,782,889 45,166,872 (2,110,543)
4,101,967 2,299,377 6,401,344 882,207
1,475,247 1,344,750 4,147,871 6,967,868 (1,519,217)
31,485,950 20,082,266 1,475,247 1,344,750 4,147,871 58,536,084 (2,747,553)
705,635 (281,141) (60,830) (403) 363,261 (1,747,282) (1,376,681) (125,694)
(874,335) (7,872) (882,207) -
168,700 (5,736,567) (62,995) 5,780,000 2,755,000 2,904,138 1,384,921 277,333 264,501
(289,013) (60,830) (5,736,567) (62,995) 5,780,000 2,755,000 (403) 2,385,192 (362,361) (1,099,348) 138,807
(1,502,375) $ (3,249,657) $ See accompanying notes. -16-
541,834 1,926,755 $
(960,541) (1,322,902)
SOUTHGATE COMMUNITY SCHOOL DISTRICT RECONCILIATION OF THE STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012
NET CHANGES IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds reported capital outlays as expenditures; in the Statement of Activities, these costs are allocated over their estimated useful lives as depreciation Depreciation Expense Proceeds From Sale of Equipment Loss on Sale of Equipment Capital Outlay $ (1,963,168) (25,495) (171,409) 1,466,401
(362,361)
(693,671)
Proceeds from bond issues are other financing sources in the governmental funds, but not in the Statement of Activities (where it increases long-term debt) Defeasance of bonds are an other financing use in the governmental funds, but not in the Statement of Activities (where it decreases long-term debt) Repayments of bond principal, installment notes and capital leases are expenditures in the governmental funds, but not in the Statement of Activities (where it reduces long-term debt) Accrued interest is recorded in the Statement of Activities when incurred; it is not reported in governmental funds until paid Decreases in compensated absences are reported as expenditures when financial resources are used in the governmental funds
(8,535,000)
5,630,000
2,783,442
16,300
99,101
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
$ (1,062,189)
See accompanying notes -17-
SOUTHGATE COMMUNITY SCHOOL DISTRICT STATEMENT OF NET ASSETS FIDUCIARY FUNDS JUNE 30, 2012
PRIVATE-PURPOSE TRUST FUNDS SCHOLARSHIPS ASSETS Cash in Bank Investments Due From Other Funds Total Assets AGENCY FUNDS STUDENT ACTIVITIES
56,600 56,600
188,964 160,353 263 349,580
LIABILITIES Accounts Payable Due to Student and Other School Groups Total Liabilities NET ASSETS Held in Trust
6,897 342,683 349,580
56,600
SOUTHGATE COMMUNITY SCHOOL DISTRICT STATEMENT OF CHANGES IN NET ASSETS FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2012
PRIVATE-PURPOSE TRUST FUNDS SCHOLARSHIPS ADDITIONS Gifts, Contributions and Investment Income, Plus Increase in Market Value of Investments DEDUCTIONS Scholarships Awarded Change in Net Assets NET ASSETS, Beginning of Year NET ASSETS, End of Year $ $ 3,007
15,557 (12,550) 69,150 56,600
SOUTHGATE COMMUNITY SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2012
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of Southgate Community School District (the School District) conform to accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. The following is a summary of the significant accounting policies used by the School District: Reporting Entity The School District is governed by an elected seven-member Board of Education. The accompanying financial statements have been prepared in accordance with criteria established by the Governmental Accounting Standards Board for determining the various governmental organizations to be included in the reporting entity. These criteria include significant operational financial relationships that determine which of the governmental organizations are a part of the School Districts reporting entity, and which organizations are legally separate, component units of the School District. Based on the application of the criteria, the School District has no component units. District-Wide and Fund Financial Statements The district-wide financial statements (i.e., the Statement of Net Assets and the Statement of Changes in Net Assets) report information on all of the nonfiduciary activities of the primary government. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. All the School District's district-wide activities are considered governmental activities. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include: (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function; and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes, intergovernmental payments and other items not properly included among program revenues are reported as general revenue. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the district-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting and Financial Statement Presentation District-Wide Statements - The district-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the fiduciary fund financial statements. Revenue is recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenue in the year for which they are levied. Grants, categorical aid and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fund-Based Statements - Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue is recognized as soon as it is both measurable and available. Revenue is considered to be available if it is collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures and expenditures related to compensated absences are recorded only when payment is due. Property taxes, unrestricted state aid, intergovernmental grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period. All other revenue items are considered to be available only when cash is received by the government. The fiduciary fund statement is also reported using the economic resources measurement focus and the accrual basis of accounting. The School District reports the following major governmental funds: The General Fund is the School District's primary operating fund. It accounts for all financial resources of the School District, except those required to be accounted for in another fund. The Special Education Center Program is a Special Revenue Fund, which operates a center program for Wayne County RESA. Additionally, the School District reports the following fund types: Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted to expenditures for specified purposes. The School Service Funds are Special Revenue Funds that segregate, for administrative purposes, the transactions of a particular activity from regular revenue and expenditure accounts. The School District maintains full control of these funds. The School Service Funds maintained by the School District are the Cafeteria Fund and Special Education Center Program Fund. The Debt Service Fund is used to record tax, interest and other revenue for payment of interest, principal and other expenditures on various bond issues. The Capital Project Fund is used to record bond proceeds and the disbursement of monies specifically designated for energy improvements. The fund is kept open until the purpose for which the fund was created has been accomplished. Fiduciary Funds are used to account for assets held by the School District in a trustee capacity or as an agent. Fiduciary Fund net assets and results of operations are not included in the district-wide statements. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The School District presently maintains a Student Activities Fund to record the transactions of student and parent groups for school and school-related purposes. The funds are segregated and held in trust for the students and parents.
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) As a general rule, the effect of inter-fund activity has been eliminated from the district-wide financial statements. Amounts reported as program revenue include: (1) charges to customers or applicants for goods, services or privileges provided; and (2) operating grants and contributions. Internally dedicated resources are reported as general revenue rather than as program revenue. Likewise, general revenue includes all taxes and unrestricted State Aid. Assets, Liabilities and Net Assets or Equity Bank Deposits and Investments - Cash and cash equivalents include cash on hand, demand deposits and short-term investments with a maturity of three months or less when acquired. Investments are stated at fair value. Receivables and Payables - In general, outstanding balances between funds are reported as "due to/from other funds". Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as "advances to/from other funds". All property tax and other trade receivables are shown as net of allowance for uncollectible amounts. Property taxes are assessed on all real and personal property in the City of Southgate and the City of Allen Park as of December 31 and the related property taxes become a lien on December 1 of the following year. These taxes are billed on July 1 for approximately 50 percent of the taxes and on December 1 for the remainder of the property taxes. The final collection date is February 28, after which penalties and interest are assessed and the total uncollected obligation is added to the Wayne County delinquent tax rolls. The State of Michigan utilized a foundation allowance approach, which provides for a specific annual amount of revenue per student based on a state-wide formula. The foundation allowance is funded from a combination of state and local sources. Revenues from state sources are primarily governed by the School Aid Act and the School Code of Michigan. The state portion of the foundation is provided from the state's School Aid Fund and is recognized as revenue in accordance with state law and accounting principles generally accepted in the United States of America. The School District also receives revenue from the state to administer certain categorical education programs. State rules require that revenue earmarked for these programs be used for its specific purpose. Certain categorical funds require an accounting to the state of the expenditures incurred. For categorical funds meeting this requirement, funds received, which are not expended by the close of the fiscal year are recorded as deferred revenue. Other categorical funding is recognized when the appropriation is received. Inventories and Prepaid Items - Inventories are valued at cost, on a first-in, first-out basis. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future fiscal years and are recorded as prepaid items in both district-wide and fund financial statements. Capital Assets - Capital assets, which include land, buildings, equipment and vehicles, are reported in the applicable governmental column in the district-wide financial statements. Capital assets are defined by the School District as assets with an initial individual cost of more than $5,000 and an estimated useful life in excess of 1 year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. Costs of normal repair and maintenance that do not add to the value or materially extend asset life are not capitalized. The School District does not have infrastructure type assets.
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Buildings, equipment and vehicles are depreciated using the straight-line method over the following useful lives: Land Improvements Building and Building Improvements Buses and Other Vehicles Furniture and Other Equipment 10-20 years 20-50 years 5-15 years 5-20 years
Compensated Absences - The liability for compensated absences reported in the district-wide statements consists of unpaid, accumulated annual and sick leave balances. The liability has been calculated using the vesting method, in which leave amounts for both employees who are currently eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included. Long-Term Obligations - In the district-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the Statement of Net Assets. Fund Equity - In the fund financial statements, governmental funds report the following components of fund balance: Nonspendable - Amounts that are not in spendable form or are legally or contractually required to be maintained intact. Restricted - Amounts that are legally restricted by outside parties, constitutional provisions, or enabling legislation for use for a specific purpose. Committed - Amounts that have been formally set aside by the Board of Education for use for specific purposes. Commitments are made and can be rescinded only via resolution of the Board of Education. Assigned - Intent to spend resources on specific purposes expressed by the Director of Business and Finance, who is authorized by a resolution approved by the Board of Education to make assignments. Unassigned - Includes any remaining amounts after applying the above definitions.
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NOTE 2 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary Information - Annual budgets are adopted on a basis consistent with generally accepted accounting principles and state law for the general and special revenue funds. All annual appropriations lapse at fiscal year end. Annual operating budgets are adopted each fiscal year through approval of an annual budget ordinance and amended as required for all fund types. The same basis of accounting is used to reflect actual revenues and expenditures recognized on a generally accepted accounting principle basis. The budget document presents information by fund and function. The legal level of budgetary control adopted by the governing body (i.e., the level at which expenditures may not legally exceed appropriations) is the function level. State law requires the School District to have its budget in place by July 1. Expenditures in excess of amounts budgeted is a violation of Michigan Law. State law permits districts to amend their budgets during the year. The last amendment to the budget was adopted on April 3, 2012. Encumbrance accounting is employed in governmental funds. Encumbrances (e.g. purchase orders, contracts) outstanding at year-end do not constitute expenditures or liabilities because the goods or services have not been received as of year-end; the commitments will be reappropriated and honored during the subsequent year. Excess of Expenditures Over Appropriations in Budgeted Funds - During the year, the School District incurred expenditures in certain budgeted funds which were in excess of the amounts appropriated, as follows:
Fund General Fund - Basic Instruction General Fund - Instructional Staff General Fund - General Administration General Fund - School Administration General Fund - Business Services General Fund - Operations and Maintenance General Fund - Central Services General Fund - Community Service General Fund - Operating Transfers Out General Fund - Tuitions to Other Districts General Fund - Expense Reimbursement Allocation
Total Appropriations $ 20,300,957 1,747,735 799,238 2,538,231 1,618,037 3,448,945 754,965 404,707 10,001 -
Amount of Expenditures $ 20,529,580 1,965,857 838,709 2,644,533 2,473,838 3,566,412 848,536 428,525 256,253 60,830 403 $
Budget Variance (228,623) (218,122) (39,471) (106,302) (855,801) (117,467) (93,571) (23,818) (256,253) (50,829) (403)
Fund Balance Deficit As of June 30, 2012, the School Districts General Fund had a cumulative fund balance deficit of $3,249,657. Net Asset Deficit As of June 30, 2012, the Government Wide Statement of Net Assets had a cumulative net asset deficit of $7,714,315 because outstanding debt on capital assets exceeded the book value of those assets by $4,290,707, accrued interest on long-term debt exceeded assets available for debt service by $49,481, and current liabilities (primarily the liability for compensated absences) exceeded current assets by $4,984,963. These factors were offset by available funds for energy conservation improvements and food service operations of $1,390,867 and $219,969, respectively.
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NOTE 3 DEPOSITS AND INVESTMENTS Michigan Compiled Laws, Section 129.91, authorizes the School District to make deposits and invest in the accounts of federally insured banks, credit unions and savings and loan associations that have an office in Michigan. The School District is allowed to invest in bonds, securities and other direct obligations of the United States or any agency or instrumentality of the United States; United States government or federal agency obligations; repurchase agreements; bankers acceptance of United States banks; commercial paper rated within the two highest classifications which mature not more than 270 days after the date of purchase; obligations of the State of Michigan or its political subdivisions which are rated as investment grade; and mutual funds composed of investment vehicles which are legal for direct investment by local units of government in Michigan. The School District's deposits and investment policy are in accordance with statutory authority. As of June 30, 2012, the School District's deposits and investments were reported in the basic financial statements in the following categories: Governmental Fiduciary Total Primary Activities Funds Government
Cash in Bank Investments Total
2,495,834 2,788,331 5,284,165
$ 188,964 216,953 $ 405,917
2,684,798 3,005,284 5,690,082
The breakdown between deposits and investments for the School District is as follows:
Deposits (Checking) Investment in Securities, Mutual Funds and Similar Vehicles Total $ 2,684,798 3,005,284 $ 5,690,082
The bank balance of the School Districts deposits is $3,510,010, which is 100% covered by federal depository insurance. The School District's investments at June 30, 2012 were bank investment pools and interlocal agreement investment pools that had a carrying amount and market value of $3,005,284. The bank investment pools are regulated by the Michigan Banking Act and the investments under the interlocal agreement (MILAF) are regulated by the Urban Cooperation Act. The fair value of the position in the bank investment pools and interlocal agreement pools is the same as the value of the pool shares. Investments are normally categorized to give an indication of the level of risk assumed by the School District; however, bank investment pools and interlocal agreement investment pools are not categorized because they are not evidenced by securities that exist in physical or book entry form. Management believes the investments in the funds comply with the investment authority noted above.
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NOTE 4 RECEIVABLES Receivables as of year-end for the School District's individual major and nonmajor funds and fiduciary funds in the aggregate, are as follows:
General Fund Receivables Taxes Accounts Intergovernmental Net Receivables Special Education Center Program Nonmajor Funds
Total
99,524 107,866 7,795,458
73,724 73,724
55,369 19,002 48,656
154,893 126,868 7,917,838
$ 8,002,848
$ 123,027
$ 8,199,599
There are no applicable allowances for uncollectible accounts. Governmental funds report deferred revenue in connection with receivables for revenue that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received but not yet earned. At the end of the current fiscal year, the various components of deferred revenue are as follows:
Unavailable Payments Received Prior to Meeting all Eligibility Requirements Summer School Tuition Grants and Categorical Aid Payments
Unearned
$ $
47,737 455,647
$ 503,384
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NOTE 5 CAPITAL ASSETS Capital asset activity of the School Districts Governmental activities for the current year was as follows:
Balance July 1, 2011 Capital Assets Not Being Depreciated Construction in Progress Capital Assets Being Depreciated Land Improvements Building and Building Improvements Buses and Other Vehicles Furniture and Equipment Subtotal Accumulated Depreciation Land Improvements Building and Building Improvements Buses and Other Vehicles Furniture and Equipment Subtotal Net Capital Assets Being Depreciated Net Capital Assets
Additions
Disposals and Adjustments
Balance June 30, 2012
$ 1,344,750
$ 1,344,750
5,365,786 54,220,605 2,055,549 5,813,690 67,455,630
97,092 18,944 225,605 353,436 695,077
260,475 466,041 726,516
5,462,878 54,239,549 2,020,679 5,701,085 67,424,191
2,449,558 24,954,284 1,442,648 3,650,761 32,497,251 34,958,379 $ 34,958,379 $
167,962 1,419,638 93,646 281,922 1,963,168 (1,268,091) 76,659 $
260,475 269,136 529,611 196,905 196,905
2,617,520 26,373,922 1,275,819 3,663,547 33,930,808 33,493,383 $ 34,838,133
Depreciation expense was charged to activities of the School District as follows:
Governmental Activities Instruction Support Services Unallocated Total Governmental Activities
230,837 236,934 1,495,397
$ 1,963,168
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NOTE 6 - OPERATING LEASES The School District has entered into a lease agreement for office space for an administration building. The lease is an operating lease for a period of three years ending May 1, 2015. The School District has also entered into two lease agreements for property in Southgate and River Rouge, Michigan to operate its Center Program. The leases are operating leases. The Southgate lease was for a period of three years ending July 1, 2012 and was renewed for an additional three years through July 1, 2015. The River Rouge lease is for a period of five years ending August 1, 2013. Future obligations over the primary terms of the School Districts long-term leases as of June 30, 2012 are:
June 30, 2013 June 30, 2014 June 30, 2015
177,200 105,950 74,700
NOTE 7 INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS The composition of interfund balances is as follows:
Due To/From Other Funds Receivable Fund Special Education Center Program Nonmajor Governmental Funds Fiduciary Funds Payable Fund General Fund General Fund General Fund Amount $ 577,415 403,362 263
Amounts due to/from the General Fund and to/from other funds are a result of the General Fund providing banking services for these funds. All amounts due are scheduled to be repaid within one year. Interfund Transfers Transfer in General Fund Nonmajor Governmental Funds General Fund Transfer Out Nonmajor Governmental Funds General Fund Special Education Center Program Amount $ 87,553 256,253 874,335
Interfund transfers to the General Fund are made to cover overhead/indirect costs for the Special Education Center Program and the Cafeteria Fund. Interfund transfers from the General Fund are made to cover the Debt Service Fund payments for the energy bonds.
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NOTE 8 LONG-TERM DEBT The School District issues bonds, notes and other contractual commitments to provide for the acquisition and construction of major capital facilities and improvements and the acquisition of certain equipment. General obligation bonds are direct obligations and pledge the full faith and credit of the School District. Other long-term obligations include capital leases and compensated absences. Long-term obligation activity can be summarized as follows:
Beginning Balance Bonds Payable Other Obligations Capital Leases Payable Installment Notes Payable Compensated Absences Total Other Obligations Total
Bonds Payable
Additions $ 8,535,000 573,426 340,686 914,112 $ 9,449,112
Reductions $ 8,043,184 259,909 110,349 439,787 810,045 $ 8,853,229
Ending Balance $ 38,232,277 537,967 358,596 1,735,306 2,631,869 $ 40,864,146
Due Within One Year $ 3,007,277 100,018 114,819 214,837 $ 3,222,114
$ 37,740,461 224,450 468,945 1,834,407 2,527,802 $ 40,268,263
Bonds payable at June 30, 2012 consist of the following issues: 1998 Durant Bonds of $518,642 are due in one remaining annual installment of $244,703, including interest, on May 15, 2013. 2002 Refunding Bonds of $14,260,000 are due in one remaining annual installment of $2,590,000 on May 1, 2015, plus Interest at 5.00%. 2005 Refunding Bonds of $17,840,000 are due in annual installments of $2,520,000 - $2,550,000 through May 1, 2022. Interest rates are from 3.00% - 5.00%. 2006 Refunding Bonds of $8,360,000 are due in annual installments of $20,000 $2,685,000 through May 1, 2025. Interest rates are from 4.00% - 4.35%. 2007 Energy Bonds of $1,250,000 are due in annual installments of $75,000 $110,000 through May 1, 2022. Interest rates are from 4.00% - 4.15%. 2012 Refunding Bonds of $5,090,000 are due in annual installments of $2,460,000 $2,630,000 through May 1, 2014 at an interest rate of 1.8% 2012 Refunding Energy Bonds of $690,000 are due in annual installments of $130,000 - $150,000 through May 1, 2017 at an interest rate of 2.5% 2012 Energy Bonds of $2,755,000 are due in annual installments of $140,000 $235,000 through May 1, 2027. Interest rates are from 2.50% - 3.95%. $ 182,277 2,590,000 17,750,000 8,260,000
915,000
5,090,000 690,000
2,755,000 $ 38,232,277
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NOTE 8 LONG-TERM DEBT (Continued) Annual debt service requirements to maturity for the above governmental bond obligations are as follows:
Principal 2013 2014 2015 2016 2017 2018-2022 2023-2027 $ 3,007,277 3,015,000 2,990,000 2,960,000 2,970,000 14,205,000 9,085,000 $ Interest 1,692,375 1,557,328 1,498,788 1,357,713 1,218,209 4,002,770 810,398 Total $ 4,699,652 4,572,328 4,488,788 4,317,713 4,188,209 18,207,770 9,895,398 $ 50,369,858
$ 38,232,277
$ 12,137,581
Current Years Defeasance On March 12, 2012, the School District issued refunding bonds of $5,090,000 with an interest rate of 1.80% to advance refund the 2002 General Obligation Unlimited Tax Refunding Bonds that were due and payable on May 1 in the years 2013 and 2014 with interest rates ranging from 3.60% to 3.75% and a par value of $4,960,000. The 2012 Refunding Bonds were issued at par, and after paying issuance costs of $39,003, the net proceeds were $5,050,997. These net proceeds were deposited in an irrevocable trust with an escrow agent until the 2012 Refunding Bonds are due on May 1, 2013 and 2014. The advance refunding met the requirements of an insubstance debt defeasance and the term bonds were removed from the School Districts district-wide financial statements. As a result of the advance refunding, the School District reduced its total debt by $93,774, which resulted in an economic gain (difference between the present value of the debt service payments on the old and new debt) of $94,021. In addition, On March 14, 2012, the School District issued refunding bonds of $690,000 with an interest rate of 2.5% to advance refund the 2002 General Obligation Limited Tax Energy Bonds that were due and payable on May 1 in the years 2013 through 2017 with interest rates ranging from 4.40% to 4.80% and a par value of $670,000. The 2012 Energy Refunding Bonds were issued at par, and after paying issuance costs of $4,430, the net proceeds were $685,570. These net proceeds were deposited in an irrevocable trust with an escrow agent until the 2012 Refunding Bonds are due on May 1, 2013 through 2017. The advance refunding met the requirements of an in-substance debt defeasance and the term bonds were removed from the School Districts district-wide financial statements. As a result of the advance refunding, the School District reduced its total debt by $39,581, which resulted in an economic gain (difference between the present value of the debt service payments on the old and new debt) of $36,313.
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NOTE 8 LONG-TERM DEBT (Continued) Compensated Absences Under several contracts and agreements, School District employees may accumulate payment for sick and vacation days that are not taken as time off. At June 30, 2012, the maximum possible exposure for accumulated sick time is shown below. This liability could be less depending upon the circumstances preceding payment. Retirement incentives are included in the long-term portion.
Short-Term Long-Term
1,735,306
$ 1,735,306
Capital Leases The School District has entered into agreements to purchase computer equipment, copy machines, technology equipment and buses through eleven capital leases. Assets acquired and liabilities incurred through these agreements are accounted for in the Statement of Net Assets. The following is a schedule of fixed assets and outstanding liabilities relating to capital lease agreements:
Capital Lease Fixed Assets Equipment and Vehicles $ 573,426 Payable $ 537,967
The following is a schedule of future minimum capital lease payments with the present value of the net minimum lease payments as of June 30, 2012:
Year Ended June 30, 2013 2014 2015 2016 2017
Lease Payments $ 147,055 147,055 147,055 141,013 85,005 667,183
Less: Amounts Representing Interest Present Value of Net Minimum Lease Payments $
129,216 537,967
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NOTE 8 LONG-TERM DEBT (Continued) Installment Notes Payable The School District has entered into the following installment purchase agreements.
Note Payable dated July 20, 2009 for the purchase of five 71-passenger school buses, due July 20, 2014, payable in annual payments of $84,830 including interest at 4.05% per annum Note Payable dated July 20, 2009 for the purchase of a portable modular classroom building, due July 20, 2014, payable in annual payments of $44,512, including interest at 4.05% per annum
$ 235,189
123,407 $ 358,596
The principal and interest requirements to maturity for the installment purchase agreements for the years ending June 30 are as follows:
Principal 2013 2014 2015 Total $ 114,819 119,469 124,308 358,596 $ Interest 14,523 9,873 5,034 29,430 $ Total 129,342 129,342 129,342 388,026
NOTE 9 NON-PLAINTIFF DURANT SETTLEMENT Public Act 142 of 1997 was enacted in November 1997 as part of the Durant Resolution Package. School districts and intermediate school districts were offered settlement amounts to settle, compromise and resolve in the entirety, any potential claims they may have asserted for violations of Section 29, Article IX, of the Constitution through September 30, 1997. The claims are or were similar to the claims asserted by the plaintiffs in the Durant vs. State of Michigan case. Southgate Community School Districts Board of Education adopted and submitted a waiver resolution, waiving any potential claims through September 30, 1997. As a non-plaintiff, the School District was awarded a settlement amount of $518,642. The School District agreed to participate in a special November 1998 Michigan Municipal Bond Authority Bonding Program, so the settlement is being received and the bonds are being paid off in fifteen annual installments, starting May 15, 1999.
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NOTE 10 STATE AID NOTE PAYABLE As of June 30, 2012, the School District had outstanding borrowings of $10,625,000 pursuant to Act No. 451 of the Public Acts of 1976. This Act authorizes the borrowing of money in a single series of notes in anticipation of the collection of State Aid payments for the 2011-2012 school year.
Beginning Balance State Aid Note Payable dated August 20, 2010, bearing interest at 0.40% and is due August 22, 2011 State Aid Note Payable dated August 22, 2011, bearing interest at 0.311% and is due August 20, 2012 Ending Balance
Additions
Reductions
$ 9,710,000
$ 9,710,000
$ 9,710,000
10,625,000 $ 10,625,000
$ 9,710,000
10,625,000 $ 10,625,000
NOTE 11 DEFINED BENEFIT AND CONTRIBUTION PENSION PLANS AND POST RETIREMENT BENEFITS Plan Description - The School District participates in the Michigan Public School Employees' Retirement System (MPSERS), a statewide, cost-sharing, multiple-employer defined benefit public employee retirement system, with a defined contribution component for those who first worked on or after July 1, 2010, governed by the State of Michigan that covers substantially all employees of the School District. The system provides retirement, survivor and disability benefits to plan members and their beneficiaries. MPSERS issues a publicly available financial report that includes financial statements and required supplementary information for the system. That report may be obtained by writing to the system at 7150 Harris Drive, P.O. Box 30673, Lansing, MI 48909-8103 or is available on the Office of Retirement Services (ORS) Web site http://www.michigan.gov/ors. Funding Policy - Employer contributions to the system result from the implementing effects of the School Finance Reform Act. Under these procedures, each school district is required to contribute the full actuarial funding contribution amount to fund pension benefits, plus an additional amount to fund retiree health care benefit amounts on a cash disbursement basis. The pension benefit rates are as follows:
Employed Before July 1, 2010 (Basic/MIP) July 1, 2011 - September 30, 2011 October 1, 2011 - June 30, 2012 20.66% 24.46% Employed on or After July 1, 2010 (Pension Plus) 19.16% 23.23%
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NOTE 11 DEFINED BENEFIT AND CONTRIBUTION PENSION PLANS AND POST RETIREMENT BENEFITS (Continued) In addition, basic plan members make no contributions, but Member Investment Plan members contribute at rates ranging from 3 percent to 4.3 percent of gross wages. The School Districts contributions to the MPSERS plan for the years ended June 30, 2012, 2011 and 2010 were $6,608,695, $5,973,404 and $5,297,155, respectively. Pension Plus plan members have the option of contributing 2 percent of gross wages to a tax-deferred savings account (with the option of increasing their contribution up to the annual IRS limit), with the School District matching 50% of the employees contribution up to 1 percent. During the year ended June 30, 2012, contributions made by the members and the School District totaled $14,466 and $7,233, respectively. Post Employment Benefits - Under the MPSERS Act, all retirees participating in the MPSERS Pension Plan have the option of continuing health, dental and vision coverage. Retirees having these coverages contribute an amount equivalent to the monthly cost for Part B Medicare and 10 percent of the monthly premium amount for the health, dental and vision coverages. Required contributions for post employment health care benefits make up 8.50% of the School Districts total contribution to the MPSERS plan discussed above.
NOTE 12 LITIGATION, CONTINGENCY AND RISK MANAGEMENT The School District is the recipient of several Federal and State Grant programs. The expenditures for each program are subject to audit for technical compliance by an appropriate agency. In the event such audit procedures indicate that the School District is not in compliance, the Federal government could require repayment of funds to the grantor(s). In the opinion of management, such repayment, if any, is not likely to be material. There are various legal actions that the School District believes will be favorably resolved and some that will be unfavorably resolved, or it is too early to estimate any possible loss resulting from the outcome of such cases. It is the School Districts opinion, the ultimate effect of these matters on the School Districts basic financial statements will not be material. The School 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. Except as noted below, for the year ended June 30, 2012, the School District purchased commercial insurance policies to satisfy any claims related to general liability, vehicle liability, property and casualty, athletic participation, employee health and accident and errors and omissions. The General Fund, since there is no Internal Service Fund, accounts for all risk-financing activity. During the year ended June 30, 2012, there was no significant reduction in insurance coverage in any of the risk categories mentioned above. Additionally, the School District has had no settlements in excess of insurance coverage during any of the past three fiscal years.
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NOTE 12 LITIGATION, CONTINGENCY AND RISK MANAGEMENT (Continued) The School District is self-insured for workers compensation and health insurance claims up to specific and aggregate limits. Those limits are as follows: 1. Workers Compensation - $250,000 per occurrence and subject to an aggregate loss fund in an amount equal to 100% of the standard premiums not to exceed $5 million. 2. Health Care Benefits - $125,000 per occurrence. The School District maintains a deposit of $15,000 for workers compensation claims and a floating deposit depending on a 90-day claims projection for health insurance with a third-party administrator to process and approve claims on behalf of its employees. The deposits are reported as other assets on the balance sheet of the General Fund. Claims expenditures are funded through budgetary appropriations of the General Fund and those Special Revenue Funds that incur claims liabilities. A reconciliation of claims liability (receivable) reported in the General Fund is as follows:
Fiscal Year 2010/11 2011/12 Liability (Receivable) $ (369,565) (344,292) Claims and Changes in Estimates 6,183,644 5,537,727 Claims Paid 6,158,371 5,528,026 Liability (Receivable) $ (344,292) (334,591)
NOTE 13 INSURANCE The School District is a self-insurer under the Michigan Workers' Disability Act. The School District is insured for coverage in excess of $250,000 self-insured retention to a maximum of $5,000,000. The School District has entered into an Administrative Services Contract (ASC) with Blue Cross/Blue Shield of Michigan (BCBSM). ASC is a financing mechanism that allows the School District to self-fund the cost of health insurance yet still retain all services and advantages of a traditional BCBSM third-party administrator of plan benefits. The School District maintains excess claim (stop loss) insurance with BCBSM for specific claims in excess of $125,000. The School District is a reimbursing employer to Michigan Employment Security Commission and as such is responsible to pay the Commission for those benefits paid and charged to its account. Appropriate liabilities have been recorded for all claims paid by the Commission. However, no provision has been made for future payments that might result from claims in process or unfiled. NOTE 14 SUBSEQUENT EVENTS On August 20, 2012, the School District borrowed $5,548,400 on a state aid anticipation note through the Michigan Municipal Bond Authority. The note is payable at an annual interest rate of .27% and is due on August 20, 2013. On August 20, 2012, the School District borrowed $4,539,600 on a state aid anticipation note through the Michigan Municipal Bond Authority. The note is payable at an annual interest rate of 1.46% and is due on August 20, 2013.
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NOTE 15 PRIOR PERIOD ADJUSTMENT During the year ended June 30, 2012, it was discovered that the required transfer from the General Fund to the Debt Service Fund to cover the debt service payments for the energy bonds was not recorded at June 30, 2011. In addition, the overpayment with BCBSM as of June 30, 2011 was understated. The government-wide and fund financial statements were restated as follows:
Government-Wide Statements Governmental Activities Net Assets/Fund Balance (Deficit) as of June 30, 2011, as Previously Reported Transfer from General Fund to Debt Service Fund Overpayment for BCBSM Claims Total Prior Period Adjustments Net Assets/Fund Balance (Deficit) as of June 30, 2011, as Restated
Fund Financial Statements Debt Service Fund
General Fund
(6,790,933) $ 138,807 138,807
(1,376,681) $ (264,501) 138,807 (125,694)
62,331 264,501 264,501
(6,652,126) $
(1,502,375) $
326,832
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REQUIRED SUPPLEMENTAL INFORMATION
SOUTHGATE COMMUNITY SCHOOL DISTRICT REQUIRED SUPPLEMENTAL INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2012 VARIANCE WITH FINAL BUDGET ORIGINAL BUDGET REVENUE Local Sources State Sources Federal Sources Intergovernmental Sources Total Revenue EXPENDITURES Instruction Basic Instruction Added Needs Total Instruction Support Pupil Services Instructional Staff General Administration School Administration Business Services Operations and Maintenance Pupil Transportation Central Services Athletic Activities Community Service Total Support Total Expenditures Excess Revenue (Expenditures) OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Payment on Equipment Loans Tuitions to Other Districts Indirect Cost Allocation Expense Reimbursement Allocation Total Other Financing Sources (Uses) Excess Revenue and Other Sources (Expenditures and Other Uses) FUND DEFICIT, Beginning Prior Period Adjustment FUND DEFICIT, Beginning, Restated FUND DEFICIT, Ending -37$ $ 5,709,765 34,326,346 2,501,113 625,000 43,162,224 FINAL BUDGET $ 6,116,058 33,538,377 3,284,175 880,000 43,818,610 $ ACTUAL 5,934,526 33,468,922 2,752,836 900,045 43,056,329 FAVORABLE (UNFAVORABLE) $ (181,532) (69,455) (531,339) 20,045 (762,281)
19,717,061 6,974,685 26,691,746 2,906,949 1,754,545 540,641 2,619,879 1,472,359 3,063,924 821,592 861,754 537,233 443,328 15,022,204 41,713,950 1,448,274 930,500 (286,000) (124,637) 519,863 $ 1,968,137 $
20,300,957 7,486,031 27,786,988 3,369,831 1,747,735 799,238 2,538,231 1,618,037 3,448,945 1,210,018 754,965 537,233 404,707 16,428,940 44,215,928 (397,318) 1,376,994 (301,000) (10,001) (41,963) 1,024,030 626,712
20,529,580 6,854,403 27,383,983 3,339,404 1,965,857 838,709 2,644,533 2,473,838 3,566,412 1,163,565 848,536 513,510 428,525 17,782,889 45,166,872 (2,110,543) 961,888 (256,253) (281,141) (60,830) (403) 363,261 (1,747,282) $ (1,376,681) (125,694) (1,502,375) (3,249,657)
(228,623) 631,628 403,005 30,427 (218,122) (39,471) (106,302) (855,801) (117,467) 46,453 (93,571) 23,723 (23,818) (1,353,949) (950,944) (1,713,225) (415,106) (256,253) 19,859 (50,829) 41,963 (403) (660,769) (2,373,994)
SOUTHGATE COMMUNITY SCHOOL DISTRICT REQUIRED SUPPLEMENTAL INFORMATION BUDGETARY COMPARISON SCHEDULE - SPECIAL REVENUE SPECIAL EDUCATION CENTER PROGRAM FOR THE YEAR ENDED JUNE 30, 2012
VARIANCE WITH FINAL BUDGET ORIGINAL BUDGET REVENUE State Sources Federal Sources Intergovernmental Sources Total Revenue EXPENDITURES Instruction Support Total Expenditures Excess Revenue OTHER FINANCING SOURCES (USES) Operating Transfers Out Payment on Equipment Loans Total Other Financing Sources (Uses) Excess Revenue and Other Sources (Expenditures and Other Uses) FUND BALANCE, Beginning FUND BALANCE, Ending $ $ 2,175,000 282,820 5,151,805 7,609,625 $ FINAL BUDGET 2,175,000 282,820 5,151,805 7,609,625 $ ACTUAL 2,175,000 284,034 4,824,517 7,283,551 FAVORABLE (UNFAVORABLE) $ 1,214 (327,288) (326,074)
4,254,615 2,575,010 6,829,625 780,000
4,254,615 2,575,010 6,829,625 780,000
4,101,967 2,299,377 6,401,344 882,207
152,648 275,633 428,281 102,207
(780,000) (780,000)
(780,000) (780,000)
(874,335) (7,872) (882,207)
(94,335) (7,872) (102,207)
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OTHER SUPPLEMENTAL INFORMATION
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2012
TOTAL NONMAJOR CAFETERIA FUND ASSETS Cash in Bank Investments Taxes Receivable Accounts Receivable Prepaid Expense Inventories Due From Other Governmental Units Due From Other Funds TOTAL ASSETS $ 19,002 5,512 48,402 48,656 161,101 282,673 CAPITAL PROJECT FUND $ 1,456,827 132 1,456,959 $ DEBT SERVICE FUND 16,865 1,556 55,369 242,129 315,919 $ GOVERNMENTAL FUNDS 16,865 1,458,383 55,369 19,002 5,512 48,402 48,656 403,362 2,055,551
LIABILITIES AND FUND BALANCE LIABILITIES Accounts Payable Deferred Revenue Total Liabilities FUND BALANCE Nonspendable Restricted for Debt Service Restricted for Capital Projects Restricted for Food Service Total Fund Balance TOTAL LIABILITIES AND FUND BALANCE
5,264 57,440 62,704
66,092 66,092
71,356 57,440 128,796
8,973 210,996 219,969
1,390,867 1,390,867
315,919 315,919
8,973 315,919 1,390,867 210,996 1,926,755
282,673
1,456,959
315,919
2,055,551
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2012 TOTAL NONMAJOR CAFETERIA FUND REVENUE Local Sources State Sources Federal Sources Total Revenue EXPENDITURES Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expense Bond Principal Interest on Bonded Debt Paying Agent Fees Tax Appeals and Write-Offs Total Expenditures Excess Revenue (Expenditures) OTHER FINANCING SOURCES (USES) Operating Transfers In (Out) Proceeds From Bond Refundings Bond Proceeds Bond Issuance Costs Payment to Refunded Bond Escrow Agent Total Other Financing Sources (Uses) Excess Revenue and Other Sources (Expenditures and Other Uses) FUND BALANCE, Beginning of Year Prior Period Adjustment FUND BALANCE, Beginning of Year (Restated) FUND BALANCE, End of Year $ $ 586,389 60,357 921,021 1,567,767 466,013 158,024 72,642 734,028 33,753 10,787 1,475,247 92,520 CAPITAL PROJECT FUND $ 179 179 1,344,750 1,344,750 (1,344,571) $ DEBT SERVICE FUND 3,844,286 36,419 3,880,705 2,413,184 1,611,285 1,290 122,112 4,147,871 (267,166) $ GOVERNMENTAL FUNDS 4,430,854 96,776 921,021 5,448,651 466,013 158,024 72,642 734,028 1,378,503 10,787 2,413,184 1,611,285 1,290 122,112 6,967,868 (1,519,217)
(87,553) (87,553)
2,755,000 (19,562) 2,735,438
256,253 5,780,000 (43,433) (5,736,567) 256,253
168,700 5,780,000 2,755,000 (62,995) (5,736,567) 2,904,138
4,967 215,002 -
1,390,867 -
(10,913) 62,331 264,501
1,384,921 277,333 264,501
215,002 219,969 $
1,390,867 $
326,832 315,919 $
541,834 1,926,755
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND BALANCE SHEET JUNE 30, 2012
ASSETS
ASSETS Cash in Bank Investments Taxes Receivable Accounts Receivable Due From Governmental Units Inventories Deposit With Paying Agents Prepaid Expense TOTAL ASSETS
$ 2,478,969 1,329,948 99,524 107,866 7,795,458 53,742 336,220 949,497 $ 13,151,224
LIABILITIES AND FUND DEFICIT LIABILITIES Note Payable - State Aid Accounts Payable Accrued Payroll and Payroll Withholding Accrued Interest Payable Due to Other Funds Deferred Revenue Accrued Health Benefits Total Liabilities FUND DEFICIT Unassigned TOTAL LIABILITIES AND FUND DEFICIT
$ 10,625,000 517,249 3,274,430 28,730 981,040 445,944 528,488 16,400,881
(3,249,657) $ 13,151,224
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2012
FUND DEFICIT, Beginning of Year Prior Period Adjustment FUND DEFICIT, Beginning of Year, Restated Total Revenue Total Expenditures Excess Expenditures FUND DEFICIT, End of Year
$ (1,376,681) (125,694) (1,502,375) 44,018,217 45,765,499 (1,747,282) $ (3,249,657)
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF REVENUE AND OTHER FINANCING SOURCES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012
VARIANCE FAVORABLE BUDGET LOCAL SOURCES Property Tax Levy Interest on Delinquent Taxes Adult Education Tuition Virtual Academy Registration Summer School Tuition Latch-Key Tuition Pre-School Tuition Interest Income, Net of Fees Transportation Fees Athletic Receipts Rental of Buildings Miscellaneous Sale of Property and Equipment Local Grants and Contributions Total Local Sources STATE SOURCES Proposition A Obligation - Section 22(a) Discretionary Payment - Section 22(b) At-Risk Students Basic Membership - Prior Years Special Education - Section 51(a) Best Practices - Section 22(f) MPSERS Offset - Section 147(a) Early Childhood Initiative Adult Education Pre-School Readiness Grant Total State Sources $ 4,966,058 20,000 325,000 50,000 60,000 260,000 30,000 35,000 160,000 40,000 100,000 20,000 50,000 6,116,058 ACTUAL $ 4,891,751 68,386 222,895 10,719 105,919 238,530 29,435 702 45,641 88,994 38,318 94,955 25,941 72,340 5,934,526 (UNFAVORABLE) $ (74,307) 48,386 (102,105) (39,281) 45,919 (21,470) (565) 702 10,641 (71,006) (1,682) (5,045) 5,941 22,340 (181,532)
23,275,995 6,008,794 1,056,949 177,181 1,579,695 1,007,780 33,451 3,900 333,432 61,200 33,538,377
23,360,073 6,008,592 656,532 349,424 1,572,748 520,350 586,205 358,463 56,535 33,468,922
84,078 (202) (400,417) 172,243 (6,947) (487,430) 552,754 (3,900) 25,031 (4,665) (69,455)
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF REVENUE AND OTHER FINANCING SOURCES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012 (Continued)
VARIANCE FAVORABLE BUDGET FEDERAL SOURCES Adult Education A.B.E. Adult Education El Civics Perkins II Title I R.O.T.C. Salary Reimbursement Title II, Part A ESSC Grant P.L. 94-142 Grants Pre-School Incentive Flow-Through ARRA Flow-Through Medicaid Outreach Education Jobs Fund Investing in Innovation Total Federal Sources OTHER FINANCING SOURCES Special Education Tax - Act 18 DCTC Career Tech Consortium Transfer From Special Education Center Program Transfer From Cafeteria Fund Medicaid Fee for Services Total Other Financing Sources TOTAL REVENUE AND OTHER FINANCING SOURCES $ 122,175 25,000 40,000 724,066 70,000 152,487 353,226 31,302 1,440,118 225,801 100,000 3,284,175 $ ACTUAL 122,175 25,000 34,261 460,349 68,032 87,250 341,218 31,302 1,440,118 32,596 13,795 86,939 9,801 2,752,836 (UNFAVORABLE) $ (5,739) (263,717) (1,968) (65,237) (12,008) 32,596 (212,006) (13,061) 9,801 (531,339)
660,000 150,000 1,200,000 176,994 70,000 2,256,994 $ 45,195,604
574,431 79,027 874,335 87,553 246,587 1,861,933 $ 44,018,217 $
(85,569) (70,973) (325,665) (89,441) 176,587 (395,061) (1,177,387)
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012
VARIANCE FAVORABLE BUDGET INSTRUCTION Basic Programs Elementary Instruction Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Total Elementary Instruction Middle School Instruction Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Total Middle School Instruction High School Instruction Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expenses Total High School Instruction Total Basic Programs ACTUAL (UNFAVORABLE)
$ 6,361,387 3,363,495 100,000 80,000 74,496 9,979,378
$ 6,576,684 3,335,023 116,091 76,449 64,597 10,168,844
(215,297) 28,472 (16,091) 3,551 9,899 (189,466)
3,938,021 2,042,999 55,000 20,000 20,000 6,076,020
3,908,514 1,970,533 108,232 14,070 7,125 6,008,474
29,507 72,466 (53,232) 5,930 12,875 67,546
2,707,903 1,414,458 48,198 40,000 25,000 10,000 4,245,559 20,300,957
2,799,234 1,433,109 63,911 28,183 17,835 9,990 4,352,262 20,529,580
(91,331) (18,651) (15,713) 11,817 7,165 10 (106,703) (228,623)
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012 (Continued) VARIANCE FAVORABLE BUDGET INSTRUCTION (Continued) Added Needs Pre-School Instruction Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Total Pre-School Instruction Special Education Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Total Special Education Compensatory Education Purchased Services Vocational Education Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expenses Total Vocational Education Adult and Community Education Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Total Adult and Community Education ACTUAL (UNFAVORABLE)
64,459 46,648 1,200 5,500 117,807 2,404,074 1,690,889 74,337 51,399 500 4,221,199 320,790 339,387 225,753 105,000 35,000 65,000 3,000 773,140 1,216,917 543,844 60,000 83,290 23,500 1,927,551
57,125 17,732 1,176 5,859 2,240 84,132 2,421,804 1,408,183 53,573 50,623 281 3,934,464 320,642 327,681 161,779 55,520 38,719 50,223 3,584 637,506 996,317 635,099 85,804 68,684 24,208 1,810,112
7,334 28,916 24 (359) (2,240) 33,675 (17,730) 282,706 20,764 776 219 286,735 148 11,706 63,974 49,480 (3,719) 14,777 (584) 135,634 220,600 (91,255) (25,804) 14,606 (708) 117,439
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012 (Continued) VARIANCE FAVORABLE BUDGET INSTRUCTION (Continued) Added Needs (Continued) Summer School Salaries Employee Benefits Purchased Services Supplies and Materials Other Expenses Total Summer School Total Added Needs Total Instruction SUPPORT SERVICES Pupil Services - Truancy/Absenteeism Services Purchased Services Pupil Services - Guidance Salaries Employee Benefits Purchased Services Supplies and Materials Other Expenses Total Guidance Pupil Services - Health Salaries Employee Benefits Purchased Services Supplies and Materials Total Health ACTUAL (UNFAVORABLE)
34,496 20,613 18,297 52,038 100 125,544 7,486,031 27,786,988
46,603 6,997 9,655 4,251 41 67,547 6,854,403 27,383,983
(12,107) 13,616 8,642 47,787 59 57,997 631,628 403,005
26,858
23,960
2,898
968,682 525,320 70,000 19,800 1,200 1,585,002
988,244 475,569 80,255 4,031 1,548,099
(19,562) 49,751 (10,255) 15,769 1,200 36,903
36,450 24,872 56,409 117,731
39,856 15,201 91,519 1,391 147,967
(3,406) 9,671 (35,110) (1,391) (30,236)
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SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012 (Continued)
VARIANCE FAVORABLE BUDGET SUPPORT SERVICES Pupil Services - Psychological Salaries Employee Benefits Purchased Services Total Psychological Pupil Services - Speech Pathology Salaries Employee Benefits Purchased Services Total Speech Pathology Pupil Services - Social Workers Salaries Employee Benefits Total Social Workers Pupil Services - Teacher Consultant Salaries Employee Benefits Purchased Services Total Teacher Consultant Pupil Services - Other Pupil Support Salaries Employee Benefits Purchased Services Other Expenses Total Other Pupil Support Total Pupil Services ACTUAL (UNFAVORABLE)
106,375 60,107 166,482
112,428 49,244 12,769 174,441
(6,053) 10,863 (12,769) (7,959)
310,397 169,733 86,000 566,130
300,028 148,839 65,310 514,177
10,369 20,894 20,690 51,953
283,372 142,892 426,264 152,152 74,806 5,000 231,958
266,097 139,138 405,235 205,246 98,888 304,134
17,275 3,754 21,029 (53,094) (24,082) 5,000 (72,176)
19,704 19,302 210,000 400 249,406 3,369,831
15,274 4,826 201,252 39 221,391 3,339,404
4,430 14,476 8,748 361 28,015 30,427
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VARIANCE FAVORABLE BUDGET SUPPORT SERVICES (Continued) Instructional Staff - Improvement of Instruction Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Total Improvement of Instruction Instructional Staff - Library, Audio Visual Salaries Employee Benefits Supplies and Materials Capital Outlay Total Library, Audio Visual Instructional Staff - Instruction Related Technology Salaries Employee Benefits Purchased Services Supplies and Materials Total Instruction Related Technology Supervision and Direction of Instructional Staff Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expenses Total Supervision and Direction of Instructional Staff ACTUAL (UNFAVORABLE)
15,101 4,017 246,299 9,280 2,900 277,597
4,585 1,308 200,051 44,510 22,000 272,454
10,516 2,709 46,248 (35,230) (19,100) 5,143
223,689 175,627 28,400 8,400 436,116
271,025 156,274 5,755 3,763 436,817
(47,336) 19,353 22,645 4,637 (701)
8,700 2,794 244,150 36,350 291,994
2,379 708 314,610 34,082 351,779
6,321 2,086 (70,460) 2,268 (59,785)
206,077 85,430 100,413 9,500 6,000 6,000 413,420
289,142 100,459 83,858 11,250 5,390 7,388 497,487
(83,065) (15,029) 16,555 (1,750) 610 (1,388) (84,067)
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VARIANCE FAVORABLE BUDGET SUPPORT SERVICES (Continued) Other Instructional Staff Services Salaries Employee Benefits Purchased Services Other Expenses Total Other Instructional Staff Services Total Instructional Staff General Administration - Board of Education Salaries Employee Benefits Purchased Services Capital Outlay Total Board of Education General Administration - Executive Salaries Employee Benefits Purchased Services Supplies and Materials Other Expenses Total Executive Administration Total General Administration School Administration Principals' Office Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expenses Total School Administration ACTUAL (UNFAVORABLE)
199,899 108,061 20,000 648 328,608 1,747,735 17,500 183,500 201,000 208,775 105,963 235,000 6,500 42,000 598,238 799,238
256,900 144,656 5,116 648 407,320 1,965,857 16,030 916 200,057 89,685 306,688 206,746 104,347 186,691 12,164 22,073 532,021 838,709
(57,001) (36,595) 14,884 (78,712) (218,122) 1,470 (916) (16,557) (89,685) (105,688) 2,029 1,616 48,309 (5,664) 19,927 66,217 (39,471)
1,577,951 818,080 37,500 52,700 7,400 44,600 2,538,231
1,653,812 869,593 27,310 66,395 3,234 24,189 2,644,533
(75,861) (51,513) 10,190 (13,695) 4,166 20,411 (106,302)
-50-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012 (Continued) VARIANCE FAVORABLE BUDGET SUPPORT SERVICES (Continued) Business Services - Business Office Salaries Employee Benefits Purchased Services Capital Outlay Total Business Office Other Business Services Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expenses Total Other Business Services Total Business Services Operation and Maintenance of Plant Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expenses Total Operation and Maintenance of Plant ACTUAL (UNFAVORABLE)
213,592 101,022 60,500 5,000 380,114
264,516 101,977 62,012 2,379 430,884
(50,924) (955) (1,512) 2,621 (50,770)
32,500 16,311 840,112 6,000 10,000 333,000 1,237,923 1,618,037
13,078 1,043 1,234,934 6,428 2,160 785,311 2,042,954 2,473,838
19,422 15,268 (394,822) (428) 7,840 (452,311) (805,031) (855,801)
554,425 354,183 1,581,837 924,500 31,000 3,000 3,448,945
518,796 359,700 1,664,723 925,883 84,614 12,696 3,566,412
35,629 (5,517) (82,886) (1,383) (53,614) (9,696) (117,467)
-51-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012 (Continued) VARIANCE FAVORABLE BUDGET SUPPORT SERVICES (Continued) Pupil Transportation - Regular and Special Education Salaries Employee Benefits Purchased Services Supplies and Materials Other Total Pupil Transportation Regular and Special Education Support Services - Central Other Central Services Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expenses Total Support Services - Central Athletic Activities Salaries Employee Benefits Purchased Services Supplies and Materials Capital Outlay Other Expenses Total Athletic Activities ACTUAL (UNFAVORABLE)
551,647 460,196 121,875 74,500 1,800
532,233 312,995 166,561 151,088 688
19,414 147,201 (44,686) (76,588) 1,112
1,210,018
1,163,565
46,453
409,920 221,045 91,500 25,500 5,000 2,000 754,965
480,727 246,761 98,500 22,066 482 848,536
(70,807) (25,716) (7,000) 3,434 5,000 1,518 (93,571)
72,391 5,155 425,046 11,951 22,314 376 537,233
52,542 16,207 402,733 10,683 31,177 168 513,510
19,849 (11,052) 22,313 1,268 (8,863) 208 23,723
-52-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION GENERAL FUND STATEMENT OF EXPENDITURES AND OTHER FINANCING USES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012 (Continued) VARIANCE FAVORABLE BUDGET SUPPORT SERVICES (Continued) Community Services Parental Involvement Purchased Services Latch-Key Salaries Employee Benefits Purchased Services Supplies and Materials Total Latch-Key Nutritional Activities Purchased Services Non-Public School Pupils Purchased Services Total Community Services Total Support Services OTHER FINANCING USES Payments on Equipment Loans Operating Transfers Out Tuition - Other Districts Indirect Cost Allocation Expense Reimbursement Allocation Total Other Financing Uses TOTAL EXPENDITURES AND OTHER FINANCING USES ACTUAL (UNFAVORABLE)
5,600
5,635
(35)
276,879 95,245 1,700 4,806 378,630
301,173 94,469 1,580 12,920 410,142
(24,294) 776 120 (8,114) (31,512)
1,539 18,938 404,707 16,428,940
929 11,819 428,525 17,782,889
610 7,119 (23,818) (1,353,949)
301,000 10,001 41,963 352,964 $ 44,568,892
281,141 256,253 60,830 403 598,627 $ 45,765,499 $
19,859 (256,253) (50,829) 41,963 (403) (245,663) (1,196,607)
-53-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET JUNE 30, 2012
SPECIAL EDUCATION CENTER PROGRAM ASSETS Inventories Accounts Receivable Due From Other Governmental Units Prepaid Expense Due From Other Funds TOTAL ASSETS LIABILITIES Accounts Payable Due to Other Governmental Units Accrued Health Care Benefits Salaries Payable Deferred Revenue Total Liabilities FUND BALANCE Nonspendable Restricted for Food Service Total Fund Balance TOTAL LIABILITIES AND FUND BALANCE $ CAFETERIA COMBINED TOTAL
73,724 6,600 577,415 657,739
48,402 19,002 48,656 5,512 161,101 282,673
48,402 19,002 122,380 12,112 738,516 940,412
16,299 132,330 106,063 403,047 657,739
5,264 57,440 62,704
21,563 132,330 106,063 403,047 57,440 720,443
657,739 $
8,973 210,996 219,969 282,673 $
8,973 210,996 219,969 940,412
-54-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2012
SPECIAL EDUCATION CENTER PROGRAM REVENUE Lunches, Breakfasts and Milk Federal Aid State Aid Special Events and Vending Commissions Special Education Tax and Transfers Total Revenue EXPENDITURES Salaries Employee Benefits Purchased Services Supplies and Materials Other Expenses Capital Outlay Total Expenditures Excess Revenue OTHER FINANCING SOURCES (USES) Operating Transfers Out Payment on Equipment Loans Total Other Financing Sources (Uses) Excess Revenue and Other Sources FUND BALANCE, Beginning FUND BALANCE, Ending $ $ 284,034 2,175,000 4,824,517 7,283,551 CAFETERIA $ 531,913 921,021 60,357 54,476 1,567,767 $ COMBINED TOTAL 531,913 1,205,055 2,235,357 54,476 4,824,517 8,851,318
3,575,362 2,105,568 586,266 131,988 1,411 749 6,401,344 882,207
466,013 158,024 72,642 734,028 10,787 33,753 1,475,247 92,520
4,041,375 2,263,592 658,908 866,016 12,198 34,502 7,876,591 974,727
(874,335) (7,872) (882,207) $
(87,553) (87,553) 4,967 215,002 219,969 $
(961,888) (7,872) (969,760) 4,967 215,002 219,969
-55-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION SPECIAL REVENUE FUND - SPECIAL EDUCATION CENTER PROGRAM STATEMENT OF REVENUE AND EXPENDITURES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012 VARIANCE FAVORABLE BUDGET REVENUE State Sources Federal Sources County Sources Total Revenue EXPENDITURES - DIRECT COSTS INSTRUCTION Salaries Employee Benefits Purchased Services Supplies and Material Capital Outlay Total Instruction SUPPORT SERVICES - STAFF AND ADMINISTRATION Salaries Employee Benefits Purchased Services Supplies and Material Capital Outlay Other Expenses Total Staff and Administration SUPPORT SERVICES - BUSINESS Purchased Services Total Direct Expenditures EXPENDITURES - INDIRECT Purchased Services Supplies and Material Total Indirect Expenditures Total Expenditures Excess Revenue OTHER FINANCING USES Operating Transfers Out Payment on Equipment Loans Total Other Financing Uses Excess Revenue and Other Sources -56$ $ 2,175,000 282,820 5,151,805 7,609,625 ACTUAL $ 2,175,000 284,034 4,824,517 7,283,551 (UNFAVORABLE) $ 1,214 (327,288) (326,074)
2,519,639 1,607,392 50,745 26,820 50,019 4,254,615 1,225,539 645,062 177,066 46,016 4,327 2,098,010 132,500 6,485,125 227,500 117,000 344,500 6,829,625 780,000 (780,000) (780,000) $
2,483,444 1,535,610 27,479 55,434 4,101,967 1,091,918 569,958 206,822 20,792 749 1,411 1,891,650 114,184 6,107,801 237,781 55,762 293,543 6,401,344 882,207 (874,335) (7,872) (882,207) $
36,195 71,782 23,266 (28,614) 50,019 152,648 133,621 75,104 (29,756) 25,224 (749) 2,916 206,360 18,316 377,324 (10,281) 61,238 50,957 428,281 102,207 (94,335) (7,872) (102,207) -
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION SPECIAL REVENUE FUND - CAFETERIA STATEMENT OF REVENUE AND EXPENDITURES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2012
VARIANCE FAVORABLE BUDGET REVENUE Student Lunches and Breakfasts Food Sales to Adults Special Milk Sales A la Carte Sales Federal and State Aid Special Events and Vending Total Revenue EXPENDITURES Salaries Employee Benefits Purchased Services Supplies and Materials Other Expenses Capital Outlay Total Expenditures Excess Revenue OTHER FINANCING USES Operating Transfers Out Excess Revenue and Other Sources $ $ 318,065 5,000 12,000 265,000 943,000 64,000 1,607,065 ACTUAL $ 223,431 2,388 8,100 297,994 981,378 54,476 1,567,767 (UNFAVORABLE) $ (94,634) (2,612) (3,900) 32,994 38,378 (9,524) (39,298)
495,113 179,000 83,863 734,500 4,597 25,714 1,522,787 84,278
466,013 158,024 72,642 734,028 10,787 33,753 1,475,247 92,520
29,100 20,976 11,221 472 (6,190) (8,039) 47,540 8,242
(84,278) $
(87,553) 4,967 $
(3,275) 4,967
-57-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION DEBT SERVICE SCHEDULE OF BONDS ISSUED, REDEEMED AND OUTSTANDING 1998 DURANT BONDS AS OF JUNE 30, 2012
PAYMENT DATES DUE ON MAY 15th 2013
AMOUNT OF PRINCIPAL INSTALLMENT $ 182,277 INTEREST $ 62,426
TOTAL PRINCIPAL INSTALLMENT AND INTEREST PAYABLE $ 244,703
-58-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION DEBT SERVICE SCHEDULE OF BONDS ISSUED, REDEEMED AND OUTSTANDING 2002 REFUNDING BONDS AS OF JUNE 30, 2012
PRINCIPAL DATE OF MATURITY 11/01/12 05/01/13 11/01/13 05/01/14 11/01/14 05/01/15 PRINCIPAL $ 2,590,000 INTEREST RATES INTEREST PAYMENTS $ 5.00% 5.00% 5.00% $ 64,750 64,750 64,750 64,750 64,750 64,750 388,500 AND INTEREST $ 64,750 64,750 64,750 64,750 64,750 2,654,750 $
ANNUAL DEBT SERVICE 129,500 129,500 2,719,500
$ 2,590,000
$ 2,978,500
$ 2,978,500
-59-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION DEBT SERVICE SCHEDULE OF BONDS ISSUED, REDEEMED AND OUTSTANDING 2005 REFUNDING BONDS AS OF JUNE 30, 2012 PRINCIPAL DATE OF MATURITY 11/01/12 05/01/13 11/01/13 05/01/14 11/01/14 05/01/15 11/01/15 05/01/16 11/01/16 05/01/17 11/01/17 05/01/18 11/01/18 05/01/19 11/02/19 05/01/20 11/01/20 05/01/21 11/01/21 05/01/22 Total PRINCIPAL INTEREST RATES INTEREST PAYMENTS $ $ 2,550,000 2,545,000 2,545,000 2,535,000 2,530,000 2,525,000 2,520,000 3.00% 3.00% 3.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 443,750 443,750 443,750 443,750 443,750 443,750 443,750 443,750 380,000 380,000 316,375 316,375 252,750 252,750 189,375 189,375 126,125 126,125 63,000 63,000 AND INTEREST $ 443,750 443,750 443,750 443,750 443,750 443,750 443,750 2,993,750 380,000 2,925,000 316,375 2,861,375 252,750 2,787,750 189,375 2,719,375 126,125 2,651,125 63,000 2,583,000 ANNUAL DEBT SERVICE
887,500 887,500 887,500 3,437,500 3,305,000 3,177,750 3,040,500 2,908,750 2,777,250 2,646,000
$ 17,750,000
$ 6,205,250
$ 23,955,250
$ 23,955,250
-60-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION DEBT SERVICE SCHEDULE OF BONDS ISSUED, REDEEMED AND OUTSTANDING 2006 REFUNDING BONDS AS OF JUNE 30, 2012 PRINCIPAL DATE OF MATURITY 11/01/12 05/01/13 11/01/13 05/01/14 11/01/14 05/01/15 11/01/15 05/01/16 11/01/16 05/01/17 11/01/17 05/01/18 11/01/18 05/01/19 11/02/19 05/01/20 11/01/20 05/01/21 11/01/21 05/01/22 11/01/22 05/01/23 11/01/23 05/01/24 11/01/24 05/01/25 Total PRINCIPAL INTEREST RATES INTEREST PAYMENTS $ $ 20,000 25,000 25,000 25,000 25,000 25,000 30,000 30,000 30,000 30,000 2,685,000 2,665,000 2,645,000 4.00% 4.00% 4.00% 4.00% 4.35% 4.35% 4.35% 4.35% 4.35% 4.35% 4.25% 4.25% 4.25% 175,491 175,491 175,091 175,091 174,591 174,591 174,091 174,091 173,592 173,592 173,048 173,048 172,504 172,504 171,851 171,851 171,199 171,199 170,546 170,546 169,894 169,894 112,838 112,838 56,206 56,206 AND INTEREST $ 175,491 195,491 175,091 200,091 174,591 199,591 174,091 199,091 173,592 198,592 173,048 198,048 172,504 202,504 171,851 201,851 171,199 201,199 170,546 200,546 169,894 2,854,894 112,838 2,777,838 56,206 2,701,206 ANNUAL DEBT SERVICE
370,982 375,182 374,182 373,182 372,184 371,096 375,008 373,702 372,398 371,092 3,024,788 2,890,676 2,757,412
$ 8,260,000
$ 4,141,884
$ 12,401,884
$ 12,401,884
-61-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION DEBT SERVICE SCHEDULE OF BONDS ISSUED, REDEEMED AND OUTSTANDING 2007 ENERGY CONSERVATION IMPROVEMENT BONDS AS OF JUNE 30, 2012 PRINCIPAL DATE OF MATURITY 11/01/12 05/01/13 11/01/13 05/01/14 11/01/14 05/01/15 11/01/15 05/01/16 11/01/16 05/01/17 11/01/17 05/01/18 11/01/18 05/01/19 11/02/19 05/01/20 11/01/20 05/01/21 11/01/21 05/01/22 Total PRINCIPAL INTEREST RATES INTEREST PAYMENTS $ $ 75,000 80,000 80,000 85,000 90,000 95,000 95,000 100,000 105,000 110,000 915,000 4.00% 4.00% 4.00% 4.125% 4.125% 4.150% 4.150% 4.150% 4.150% 4.150% $ 18,788 18,788 17,288 17,288 15,688 15,688 14,088 14,088 12,335 12,335 10,479 10,479 8,508 8,508 6,536 6,536 4,461 4,461 2,283 2,283 220,908 AND INTEREST $ 18,788 93,788 17,288 97,288 15,688 95,688 14,088 99,088 12,335 102,335 10,479 105,479 8,508 103,508 6,536 106,536 4,461 109,461 2,283 112,283 ANNUAL DEBT SERVICE
112,576 114,576 111,376 113,176 114,670 115,958 112,016 113,072 113,922 114,566
$ 1,135,908
1,135,908
-62-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION DEBT SERVICE SCHEDULE OF BONDS ISSUED, REDEEMED AND OUTSTANDING 2012 REFUNDING BONDS AS OF JUNE 30, 2012
PRINCIPAL DATE OF MATURITY 11/01/12 05/01/13 11/01/13 05/01/14 PRINCIPAL INTEREST RATES INTEREST PAYMENTS $ $ 2,460,000 2,630,000 $ 5,090,000 1.80% 1.80% $ 53,700 45,810 23,670 23,670 146,850 AND INTEREST $ 53,700 2,505,810 23,670 2,653,670
ANNUAL DEBT SERVICE
$ 2,559,510 2,677,340 $ 5,236,850
$ 5,236,850
-63-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION DEBT SERVICE SCHEDULE OF BONDS ISSUED, REDEEMED AND OUTSTANDING 2012 ENERGY REFUNDING BONDS AS OF JUNE 30, 2012 PRINCIPAL DATE OF MATURITY 11/01/12 05/01/13 11/01/13 05/01/14 11/01/14 05/01/15 11/01/15 05/01/16 11/01/16 05/01/17 Total PRINCIPAL INTEREST RATES INTEREST PAYMENTS $ $ 130,000 130,000 140,000 140,000 150,000 690,000 2.50% 2.50% 2.50% 2.50% 2.50% $ 10,110 8,625 7,000 7,000 5,375 5,375 3,625 3,625 1,875 1,875 54,485 AND INTEREST $ 10,110 138,625 7,000 137,000 5,375 145,375 3,625 143,625 1,875 151,875 744,485 ANNUAL DEBT SERVICE
148,735 144,000 150,750 147,250 153,750
744,485
-64-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION DEBT SERVICE SCHEDULE OF BONDS ISSUED, REDEEMED AND OUTSTANDING 2012 ENERGY CONSERVATION IMPROVEMENT BONDS AS OF JUNE 30, 2012 PRINCIPAL DATE OF MATURITY 11/01/12 05/01/13 11/01/13 05/01/14 11/01/14 05/01/15 11/01/15 05/01/16 11/01/16 05/01/17 11/01/17 05/01/18 11/01/18 05/01/19 11/02/19 05/01/20 11/01/20 05/01/21 11/01/21 05/01/22 11/01/22 05/01/23 11/01/23 05/01/24 11/01/24 05/01/25 11/01/25 05/01/26 11/01/26 5/1/2027 Total PRINCIPAL INTEREST RATES INTEREST PAYMENTS $ $ 140,000 150,000 155,000 160,000 160,000 165,000 175,000 180,000 185,000 195,000 200,000 210,000 220,000 225,000 235,000 2.50% 2.50% 2.50% 2.50% 2.50% 3.95% 3.95% 3.95% 3.95% 3.95% 3.95% 3.95% 3.95% 3.95% 3.95% $ 57,281 48,865 47,115 47,115 45,240 45,240 43,303 43,303 41,303 41,303 39,303 39,303 36,044 36,044 32,588 32,588 29,033 29,033 25,379 25,379 21,528 21,528 17,578 17,578 13,430 13,430 9,085 9,085 4,641 4,641 917,286 AND INTEREST $ 57,281 188,865 47,115 197,115 45,240 200,240 43,303 203,303 41,303 201,303 39,303 204,303 36,044 211,044 32,588 212,588 29,033 214,033 25,379 220,379 21,528 221,528 17,578 227,578 13,430 233,430 9,085 234,085 4,641 239,641 ANNUAL DEBT SERVICE
246,146 244,230 245,480 246,606 242,606 243,606 247,088 245,176 243,066 245,758 243,056 245,156 246,860 243,170 244,282
$ 2,755,000
$ 3,672,286
3,672,286
-65-
SOUTHGATE COMMUNITY SCHOOL DISTRICT OTHER SUPPLEMENTAL INFORMATION TRUST AND AGENCY FUNDS BALANCE SHEET JUNE 30, 2012 ASSETS Cash in Bank Investments Due From Other Funds TOTAL ASSETS LIABILITIES AND FUND BALANCE Accounts Payable Due to Student and Other School Groups Funds Held in Trust TOTAL LIABILITIES AND FUND BALANCE 2011
188,964 216,953 263 406,180
$ 157,245 218,451 944 $ 376,640
6,897 342,683 56,600 406,180
4,127 303,363 69,150
$ 376,640
TRUST AND AGENCY FUNDS STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2012
PRIVATE-PURPOSE TRUST FUNDS SCHOLARSHIPS RECEIPTS DISBURSEMENTS Excess Receipts (Disbursements) FUNDS HELD IN TRUST, Beginning FUNDS HELD IN TRUST, Ending $ $ 3,007 15,557 (12,550) 69,150 56,600 AGENCY FUNDS $ 542,800 503,480 39,320 303,363 $ 342,683
-66-

Southgate Schools Audit Fy 2011.12

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SOUTHGATE COMMUNITY SCHOOL DISTRICT FINANCIAL REPORT WITH SUPPLEMENTAL INFORMATION JUNE 30, 2012

INDEPENDENT AUDITORS REPORT

Board of Education Southgate Community School District

Board of Education Southgate Community School District Page 2

October 30, 2012

SOUTHGATE COMMUNITY SCHOOL DISTRICT

SOUTHGATE COMMUNITY SCHOOL DISTRICT

SOUTHGATE COMMUNITY SCHOOL DISTRICT

SOUTHGATE COMMUNITY SCHOOL DISTRICT

June 30, 2011 Amount Percent of Total

Variance Amount Percent

13.49% 76.03% 6.25% 2.19% 2.04%

6,117,489 34,820,892 4,568,436 1,257,738 829,513

-2.99% -3.88% -39.74% -23.52% 8.50%

59.84% 38.86% 1.17% 0.13%

$ 28,324,065 17,809,193 288,461 20,056

60.99% 38.35% 0.62% 0.04%

(940,082) (26,304) 249,336 40,774

-3.32% -0.15% 86.44% 203.30%

This was primarily due to

SOUTHGATE COMMUNITY SCHOOL DISTRICT

SOUTHGATE COMMUNITY SCHOOL DISTRICT

19.8 37.6 57.4

18.9 37.6 56.5

(4.3) 1.4 0.2 (5.0) (7.7) $

(3.5) (0.3) (3.0) (6.8)

SOUTHGATE COMMUNITY SCHOOL DISTRICT

1.3 14.7 8.8 30.8 0.2

1.5 17.0 9.2 31.9 0.2

27.5 17.6 1.5 0.5 6.4 1.6 1.7

28.4 17.2 1.5 0.6 6.5 1.8 1.5

SOUTHGATE COMMUNITY SCHOOL DISTRICT

SOUTHGATE COMMUNITY SCHOOL DISTRICT

2012 General Obligation Bonds $ 38,232,277

SOUTHGATE COMMUNITY SCHOOL DISTRICT

Economic Factors and Next Years Budgets and Rates

$ 27,515,719 17,657,614 513,510 1,475,247 6,401,344 1,594,985 1,666,807 56,825,226

607,497 88,994 586,389 1,282,880

4,365,506 2,024,328 981,378 7,283,551 14,654,763

(22,542,716) (15,633,286) (424,516) 92,520 882,207 (1,594,985) (1,666,807) (40,887,583)

See accompanying notes. -14-

(3,249,657) (3,249,657) $ 13,151,224 $

8,973 315,919 1,390,867 210,996 1,926,755 2,055,551 $ $

8,973 315,919 1,390,867 210,996 (3,249,657) (1,322,902) 15,864,514 (1,322,902)

(38,232,277) (537,967) (358,596) (1,735,306) (365,400) (7,714,315)

27,383,983 17,782,889 45,166,872 (2,110,543)

4,101,967 2,299,377 6,401,344 882,207

1,475,247 1,344,750 4,147,871 6,967,868 (1,519,217)

31,485,950 20,082,266 1,475,247 1,344,750 4,147,871 58,536,084 (2,747,553)

705,635 (281,141) (60,830) (403) 363,261 (1,747,282) (1,376,681) (125,694)

(874,335) (7,872) (882,207) -

168,700 (5,736,567) (62,995) 5,780,000 2,755,000 2,904,138 1,384,921 277,333 264,501

(1,502,375) $ (3,249,657) $ See accompanying notes. -16-

CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES

See accompanying notes -17-

188,964 160,353 263 349,580

6,897 342,683 349,580

See accompanying notes. -18-

15,557 (12,550) 69,150 56,600

See accompanying notes. -19-

Cash in Bank Investments Total

2,495,834 2,788,331 5,284,165

$ 188,964 216,953 $ 405,917