ROSE TREE MEDIA SCHOOL DISTRICT
MEDIA, PENNSYLVANIA
AUDIT REPORT
JUNE 30, 2012
ROSE TREE MEDIA SCHOOL DISTRICT
TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT
1-2
MANAGEMENT'S DISCUSSION AND ANALYSIS
3- 13
BASIC FINANCIAL STATEMENTS
Entity-wide Financial Statements:
- Statement of Net Assets
14
- Statement of Activities
15
Fund Financial Statements:
- Balance Sheet - Governmental Funds
16
- Reconciliation of Balance Sheet - Governmental Funds
to Statement of Net Assets
17
- Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds
18
-Reconciliation of Statement of Revenues, Expenditures
and Changes in Fund Balances - Governmental Funds
to Statement of Activities
19
- Budgetary Comparison Statement - General Fund
20
- Statement of Net Assets - Proprietary Fund
21
- Statement of Revenues, Expenses and Changes in Fund
Net Assets- Proprietary Fund
22
- Statement of Cash Flows - Proprietary Fund
23
- Statement of Net Assets - Fiduciary Funds
24
- Statement of Changes in Net Assets - Fiduciary Funds
25
NOTES TO FINANCIAL STATEMENTS
26-45
ROSE TREE MEDIA SCHOOL DISTRICT
TABLE OF CONTENTS
SINGLE AUDIT
Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with
Government Auditing standards
46-47
Report on Compliance with Requirements That Could Have
a Direct and Material Effect on Each Major Program and
on Internal Control Over Compliance in Accordance with
OMB Circular A-133
48-49
Schedule of Expenditures of Federal Awards and Certain State Grants
50- 51
Notes to Schedule of Expenditures of Federal Awards and Certain
State Grants
Schedule of Findings and Recommendations
52
53-54
Barbacane, Thornton & Company LLP
INDEPENDENT AUDITORS' REPORT
200 Springer Building
341 1 Silverside Road
Wilmington, Delaware 19810
T 302.478.8940
F 302.468.4001
www.btcpa.com
November 8, 2012
Board of School Directors
Rose Tree Media School District
Media, Pennsylvania
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of Rose Tree Media School
District (the "District"), Media, Pennsylvania, as of and for the year ended June 30, 2012, which collectively
comprise the District's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of Rose Tree Media School District's management. Our responsibility is to
express opinions on these financial statements based on our audit. The prior year summarized
comparative information has been derived from the District's 2011 financial statements and, in our report
dated October 31 , 2011 , we expressed unqualified opinions on the respective financial statements of the
governmental activities. the business-type activities, each major fund and the aggregate remaining fund
information.
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, the business-type activities, each major fund
and the aggregate remaining fund information of Rose Tree Media School District, Media, Pennsylvania, as
of June 30, 2012 , and the respective changes in financial position and cash flows, where applicable,
thereof and the budgetary comparisons for the general fund 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 a lso issued our report dated November 8,
2012, on our consideration of Rose Tree Media School District's internal control over financial reporting and
on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing
the results of our audit.
- 1-
BARBAO\NE
1HORNfON
&CDMPANY
CERTIFIED PUBLIC ACCOUNTMTS
Board of School Directors
Rose Tree Media School District
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 3-1 3 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, which considers it to be an essential part of financial reporting for placing
the basic financial statements in an appropriate operational, economic or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the sole purpose of forming opinions on the financial statements that
collectively comprise Rose Tree Media School District's financial statements as a whole. The
accompanying schedule of expenditures of federal awards and certain state grants is presented for
purposes of additional analysis as required by the U.S. Office of Management and Budget Circular A-133,
"Audits of States, Local Governments and Nonprofit Organizations," and is not a required part of the
financial statements. The schedule of expenditures of federal awards and certain state grants is the
responsibility of management and was derived from and relates 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 acc ordance 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.
;j~~1L'7
BARBACANE,
TH~RNTON & COMPANY LL~
LLP
- 2-
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis (MD&A) - Unaudited
JUNE 30, 2012
Management's Discussion and Analysis ("MD&A") of Rose Tree Media School District's financial
performance provides an overall review of the District's financial activities for the fiscal year ended
June 30, 2012. The intent of the MD&A is to look at the District's financial performance as a whole;
readers also should review the transmittal letter, notes to the basic financial statements and financial
statements to enhance their understanding of the District's financial performance.
FINANCIAL HIGHLIGHTS
The District's total net assets increased in the amount of $3.4 million. The current year increase was
due to an increase in the collection of interim and delinquent taxes as well as the restoration of state
funding for retirement reimbursement and other state grants. The increase is also due to the fact that
expenditures were less than anticipated as a result of a reduction in maintenance expenditures due
to mild weather conditions. Program revenues accounted for $12.1 million, or 15.2 percent, of total
revenues of $79.7 million, and general revenues accounted for $67.6 million, or 84.8 percent.
The General Fund completed the fiscal year with a positive fund balance of $14.1 million, or 17.5
percent of the 2012-2013 $80.3 million operating budget. A portion of fund balance was used to
balance the budget against revenues which resulted in a decrease in fund balance of $1 .1 million.
The instructional programs (including special education, vocational education, summer school,
homebound instruction, adjudicated programs and Delaware County Community College) cost $43.1
million for salaries, benefits, technical services, tuition for private and approved private schools,
supplies and equipment. The cost of the instructional programs was supported by 55.4 percent of
total revenue.
The support services programs (including pupil services, guidance, psychological services, home and
school visitor, child accounting, curriculum and assessment, school and central office administration,
school board of director services, tax collection, legal services, community relations, student health
services, operation and maintenance of plant services and student transportation) cost $23 .3 million
for salaries, benefits, supplies, utilities, diesel fuel and gasoline, the insurance program and
equipment. The cost of the support programs was supported by 30.0 percent of total revenue.
The operation of noninstructional services programs (including student activities, athletics and support
for public libraries) cost $1.3 million for salaries, supplemental contracts, dues, fees for officials,
supplies and equipment. The cost of the noninstructional services programs was supported by 1. 7
percent of total revenue.
The other expenditures and financing uses (including debt service, refund of prior years' revenue and
capital funds transfer) cost $11 .2 million for interest and principal payments and for transfer to the
capital account. The cost of the other financing uses was supported by 14.3 percent of total revenue.
Pennsylvania's Special Session Act 1 of 2006 provides property tax relief for homestead and farmstead
owners through gaming revenue. Approved homestead/farmstead property owners received
approximately $207 per property in property tax relief for the 2011-2012 fiscal year. The District
received approximately $1 .6 million dollars from state sources to distribute tax relief to approved
property owners.
-3-
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30 2012
REPORTING THE DISTRICT AS A WHOLE
Statement of Net Assets end Statement of Activities
The Statement of Net Assets and the Statement of Activities report information about the District as a
whole and about its overall activities. These statements include all the assets and liabilities of the
District (except for fiduciary funds held in trust for student purposes), using the accrual basis of
accounting similar to the accounting used by private sector corporations. All of the current year's
revenues and expenses are taken into consideration regardless of when cash is received or paid.
These two statements report the District's net assets and changes in them during the fiscal year. The
change in net assets provides the reader a tool to assist in determining whether the District's financial
health is improving or deteriorating. The reader will need to consider other nonfinancial factors such
as the District's property tax base, current property tax laws, student enrollment and facility conditions
in arriving at a conclusion regarding the overall health of the District.
Entity-wide Financial Analysis
Net assets may serve over time as a useful indicator of a government's financial position . In the case
of the District. assets exceeded liabilities by $46 .1 million at the close of the most recent fiscal year. In
the prior year, assets exceeded liabilities by $42.7 million.
A portion of the District's total net assets (59 .4 percent) reflects its investment in capital assets, net of
related debt. The District uses capital assets to provide services; consequently, these assets are not
available for future spending. Although the District's investment in its capital assets is reported net of
related debt, it should be noted that the resources needed to repay this debt must be provided from
other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
A comparative analysis of fiscal year 2012 to 2011 follows:
Statement of Net Assets
June 30, 2012 and 2011
Governmental Activities
2012
2011
Business-type Activities
2012
2011
Totals
2012
2011
953,566
121,523
$ 35,876,341
95,906,581
$ 40,426,268
85,726,956
ASSETS:
Current and other
assets
Capital assets
$ 35,028,786
95,723,640
$ 39,472,702
85,605,433
$
TOTAL ASSETS
$130,752,426
$125,078,135
$ 1,030,496
$ 1,075,089
$131,782,922
$1 26,153,224
LIABILITIES AND
NET ASSETS:
Liabilities:
Current liabilities
Long-term liabilities
Total Liabilities
$ 11,446,246
74,050,940
85,497,186
$ 12,068,131
71 ,169,010
83,237,141
$
$
$ 11,675,067
74,050,940
85,726,007
$ 12,291,178
71 ,169,010
83,460,188
847,555
182,941
228,821
228,82 1
-4-
$
223,047
223,047
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30 2012
Statement of Net Assets
June 30, 2012 and 2011
Business-type Activities
2012
2011
Governmental Activities
2012
2011
(cont'd)
Net Assets:
Invested in capital
assets, net of debt
Unrestricted
Total Net Assets
TOTAL LIABILITIES
AND NET ASSETS
Totals
2012
2011
27,192,292
18,062,948
45,255,240
28,048,812
13,792,182
41,840,994
182,941
618,734
801,675
121,523
730,519
852,042
27,375,233
18,681,682
46,056,915
28,170,335
14,522,701
42,693,036
$130,752,426
$125,078,135
$ 1,030,496
$ 1,075,089
$131 ,782,922
$126,153,224
The District's net assets invested in capital assets, net of related debt decreased $0.8 million due to the
issuance of new debt for the Springton Lake Middle School Project.
The Statement of Activities shows the cost of program services and the charges for services and grants
offsetting those services. The table below reflects the cost of program services and the net cost of
those services after taking into account the program revenues for the governmental and businesstype activities.
2012
2011
Total Cost
of Services
Net Cost
of Services
Total Cost
of Services
Net Cost
of Services
$ 46,076,548
$ (38,793,545)
$ 45,319,257
$ (37,608,530)
7,084,179
5,939,118
6,465 ,316
4 ,694,753
1,464,886
87,649
2,776,800
(6,598,494)
(5,717,956)
(6,210,744)
(3,325,011)
(1,31 2 ,180)
1,205
(2,204, 118)
7,549,508
5,645,026
6,658,226
4,560,375
1,449,886
85,118
2,149,662
(7,112,542)
(5,450, 175)
(6,411,794)
(3, 175,825)
(1,349,119)
(887)
(1 ,887,246)
Total Governmental Activities
$ 74,589,249
$ (64,160,843)
$ 73,417,058
$ (62,996,118)
Business-type Activities:
Food service
$
1,706,345
$
(50,551)
$
1,579,600
$
11 ,631
Total Business-type Activities
$
1,706,345
$
~50,551}
$
1,579,600
$
11 ,631
PROGRAM EXPENSES
Governmental Activities:
Instruction
Support services:
Instructional student support
Administration
Maintenance
Pupil transportation
Student activities
Community services
Interest and fiscal charges
The increases in net cost of services for instruction are due to contracted increases in salaries for
employees of the District.
- 5-
ROSE TREE MEDIA SCHOOL DISTRICT
Managements Discussion and Analysis - Unaudited (confd)
JUNE 30 2012
Statement of Changes in Net Assets
Fiscal Years Ended June 30, 2012 and 2011
Business-t~~e
Governmental Activities
2012
2011
2012
Activities
2011
2012
Totals
2011
$1,281,694
374,100
1,655,794
$1,234,576
356,655
1,591,231
$ 4,129,506
7,954,694
12,084,200
$ 3,458,510
8,553,661
12,012,171
184
362
184
1,655,978
362
1,591,593
61,816,176
1,220,831
4,287,836
99,092
151,338
67,575,273
79,659,473
61,130,809
1,180,704
3,896,618
224,308
128,337
66,560,776
78,572,947
REVENUES
Program Revenues:
Charges for services
Operating grants
Total Program Revenues
$ 2,847,812
7,580,594
10,428,406
$ 2,223,934
8,197,006
10,420,940
General Revenues:
Property taxes
Other taxes
Grants and entitlements
Investment earnings
Miscellaneous
Total General Revenues
TOTAL REVENUES
61,816,176
1,220,831
4,287,836
98,908
151,338
67,575,089
78,003,495
61,130,809
1,180,704
3,896,618
223,946
128,337
66,560,414
76,981,354
46,076,548
45,319,257
46,076,546
45,319,257
7,084,179
5,939,118
6,465,316
4,694,753
1,464,886
87,649
2,776,800
7,549,508
5,645,026
6,658,226
4,560,375
1,449,886
85,11 8
2,149,662
74,589,249
73,417,058
1,706,345
1,706,345
1,579,600
1,579,600
7,006,030
5,939,118
6,543,465
4,694,753
1,464,886
87,649
2,776,800
1,706,345
76,295,594
7,549,508
5,645,026
6,658,226
4,560,375
1,449,886
85,118
2,149,662
1,579,600
74,996,658
$ 3,414,246
$ 3,564,296
$ ~50,367~
11,993
$ 3,363,879
$ 3,576,289
EXPENSES
Program Expenses:
Instruction
Support services:
Instructional staff support
Administration
Maintenance
Pupil transportation
Student activities
Community services
Interest and fiscal charges
Food service
TOTAL EXPENSES
CHANGE IN NET ASSETS
$
Property tax revenue is up $0.7 million due to an increase collection of interim taxes and assessment
increases. Interest earnings decreased from the previous year based on the current economic
environment's decline in investment interest rates. Instruction program expenses and support services
expenses increased due to increases in salaries and benefits, especially due to an increase in the
retirement rate from 5.64 percent in 2011 to 8.65 percent in 2012.
Reporting the District's Most Significant Funds
Governmental Funds - Most of the District's activities are reported in governmental funds, which focus
on how money flows into and out of those funds and the balances left at year end available for
spending in future periods. These funds include Fund 10 (General Fund), Funds 32 through 38
(Capital Projects funded with General Obligation Bond funds and General Fund transfers) and Fund 40
(Debt Service Fund). These funds are reported using the modified accrual accounting method, which
- 6-
ROSE TREE MEDIA SCHOOL DISTRICT
Managemenrs Discussion and Analysis - Unaudited (confd)
JUNE 30 2012
measures cash and other financial assets that can readily be converted to cash. The governmental
fund statements provide a detailed short-term view of the District's general government operations
and the basic services provided. Governmental fund information helps the reader determine whether
there are more or fewer financial resources available to spend in the near future to finance the
District's programs. The relationship (or differences) between governmental activities (reported in the
Statement of Net Assets and the Statement of Activities) and governmental funds Is reconciled in the
basic financial statements.
Proprietary Funds - Proprietary funds use the accrual basis of accounting, the same as on the entitywide statements; therefore, the statements will essentially match the business-type activities portion of
the entity-wide statements. The only proprietary fund is the food service fund.
Fiduciary Funds - The District is the trustee, or fiduciary, for its scholarship program and other items
listed as private-purpose trust. In addition, the District is the agent for funds held on behalf of students
of the District. All of the District's fiduciary activities are reported in separate Statements of Fiduciary
Net Assets and Changes in Fiduciary Net Assets. Fiduciary funds include a scholarship fund, student
activity funds and escheat funds. These assets are excluded from the District's other financial
statements because the assets cannot be utilized by the District to finance its operations.
Fund Financial Statements
The fund financial statements of the District's major funds provide detailed information about the most
significant funds - not the District as a whole. Some funds are required to be established by State
statute, while many other funds are established by the District to help manage money for particular
The District's three types of funds,
purposes and compliance with various grant provisions.
governmental, proprietary and fiduciary, use different accounting approaches as further described in
the notes to the financial statements.
The District's governmental funds reported a combined fund balance of $28 .1 million, which is below
last year's total of $31.9 million. This decrease was expected due to the use of fund balance to
balance the budget. The capital projects fund balance decreased due to the completion of various
capital projects throughout the District. Other funds increased due to transfers that were made from
the General Fund to the Capital Reserve Fund. The schedule below indicates the fund balance and
the total change in fund balances as of June 30, 2012 and 2011.
Fund Balance
June 30, 2012
Fund Balance
June 30, 2011
Increase
(Decrease)
General Fund
Capital Projects Funds
Capital Reserve Fund
Other Fund
$ 14,086,271
7,754,000
5,610,039
691,994
$ 15,195,094
11,448,504
4,522 ,282
691 ,842
$ (1 '1 08,823)
Total
$ 28 ,142,304
$ 31 ,857,722
$ (3,715,418)
- 7-
(3,694,504)
1,087,757
152
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30 2012
General Fund
The District's reliance upon tax revenues is demonstrated by the graph below that indicates 77
percent of total revenues for government activities come from local taxes.
0%
• Taxes
• Investment earnings
lntergovenmental
• Other revenue
The tables that follow assist in illustrating the financial activities and balance of the general fund.
General Fund Revenue:
Taxes
Investment earnings
Intergovernmental
Other revenue
Total
Dollar
Change
Percent
Change
$ 59,700,605
$ 616,030
69,957
11 ,309,364
6,145,532
131,312
10,803,228
6,248,771
(61,355)
506,136
(1 03,239)
1.03%
-46.72%
4.69%
-1.65%
$ 77,841 ,488
$ 76,883,916
957,572
-42.66%
2012
2011
$ 60,316,635
$
Real estate tax revenue increased $0.6 million due to an increase collection of interim taxes.
Investment earnings decreased due to market conditions. Intergovernmental revenue increased due
to the increase in social security and retirement reimbursement. The retirement rate increased from
5.64 percent to 8.65 percent. The District is reimbursed fifty percent of retirement and social security
expense from the State, which resulted in increased revenue. Other revenue decreased due to a
decrease in miscellaneous revenue.
- 8-
ROSE TREE MEDIA SCHOOL DISTRICT
Managemenfs Discussion and Analysis - Unaudited (confd)
JUNE 30 2012
Other Funds
The Capital Project Funds had a decrease in fund balance due to the completion of capital projects.
There is also a major ongoing renovation project at the Springton Lake Middle School. The capital
projects funds are used to keep the District's facilities in optimal operational condition to avoid more
costly repairs in the future. The District has been following a five-year capital project plan .
The Capital Reserve Fund increased because the General Fund was able to transfer funds for future
capital purposes. The appropriation from the General Fund was consistent with Board Policy #603.
Other governmental funds consist of the Debt Service Fund. This fund was established for the purpose
of paying down debt.
Business-type Activities
The only business-type activity includes the food service program . This program had a decrease in
net assets of $50 thousand for the fiscal year. The District purchased equipment that was necessary
for the Food Service program.
General Fund Budget Information
The District keeps its books and prepares its financial reports on a modified accrual basis. Major
accrual items are payroll taxes and pension fund contributions payable, loans receivable from other
funds and revenues receivable from other governmental units. The District's financial statements are
audited annually by a firm of independent certified public accountants, as required by
Commonwealth Law. The District budgets and expends funds according to procedures mandated by
the Pennsylvania Department of Education. An annual operating budget is prepared by the
Superintendent and Director of Management Services and submitted to the Board of School Directors
for approval prior to the beginning of the fiscal year on July 1 each year. The most significant
budgeted fund is the General Fund.
Spending Review
The final budget for expenditures reflects required Board-approved budgetary transfers in function
categories due to spending patterns.
Instructional Services:
Regular programs
Special programs
Vocational programs
Other instructional programs
Community college
Total Instructional Services
Function
Code
Original
Budget
Final
Budget
1100
1200
1300
1400
1700
$ 29,313,223
$ 29,385,107
11 ,664,607
779,423
1,694,846
901,231
44,353,330
11,393,478
765,148
1,579,846
901,232
44,024,811
-9-
Dollar
Difference
$
71,884
(271 ,129)
(14,275)
(11 5,000)
1
(328,519)
Percentage
Difference
0.25%
-2.32%
-1.83%
-6.79%
0.00%
-7.40%
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30 2012
Function
Code
(cont'd)
Support Services:
Pupil services
Instructional staff services
Administrative services
Pupil health
Business services
Operation and maintenance
Student transportation services
Central support services
Other support services
Total Support Services
Noninstructional Services:
Student activities
Community services
Total Noninstructional Services
Debt Service and Transfers:
Debt service/refund of
prior year receipts
lnterfund transfers
Budgetary reserve
Total Debt Service and Transfers
Original
Budget
Final
Budget
Dollar
Difference
2100
2200
2300
2400
2500
2600
2700
2800
2900
2,458,144
4,048,442
3,295,964
609,297
1,058, 158
7,526,512
4,900,550
918,140
252,084
25,067,291
2,477,797
3,903,072
3,561,048
610,998
1,058,158
6,859,479
4,600,550
849,839
177,0842
24,098,025
(667,033)
(300,000)
(68,301)
(75,000}
(969,266}
0.80%
-3.59%
8.04%
0.28%
0.00%
-8.86%
-6.12%
-7.44%
-29.75%
-3.87%
3200
3300
1,308,413
103,400
1,411 ,813
1,264,913
93,400
1,358,313
(43,500)
(10,000}
(53,500}
-3.32%
-9.67%
-3.79%
5100
5200
5900
8,955,350
600,000
250,000
9,805,350
8,301,408
2,855,227
11,156,635
(653,942)
2,255,227
(250,000}
1,351 ,285
-7.30%
375.87%
-100.00%
13.78%
$ 80,637,784
$ 80,637,784
TOTAL EXPENDITURES
19,653
{145,370)
265,084
1,701
Percentage
Difference
$
0.00%
Using spending variances in excess of $1 0 ,000 and using five percent as a spending tolerance, the
most significant changes in the District's original vs. final budgeted expenditures were:
Function
Code
Other instructional programs
Administrative services
Operation and maintenance
Student transportation services
Central support services
Other support services
Debt service
lnterfund transfers
Budgetary reserve
1400
2300
2600
2700
2800
2900
5100
5200
5900
Original
Budget
Final
Budget
1,694,846
3,295,964
7,526,512
4,900,550
918,140
252,084
8,955,350
600 ,000
250,000
1,579,846
3,561,048
6,859,479
4,600,550
849,839
177,084
8,301,408
2,855,227
- 10-
Dollar
Difference
(115,000)
265,084
(667,033)
(300,000)
(68,301)
(75,000)
(653,942)
2,255,277
(250,000)
Percentage
Difference
-6.79%
8.04%
-8.86%
-6. 12%
-7.44%
-29.75%
-7.30%
375.87%
-100.00%
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30 2012
The variance for the instructional programs is due to a decrease in the need for homebound
instruction. Administrative services increased due to the negotiation of seven labor contracts whic h
required additional legal servic es. The maintenance and operations budget dec reased as a result in
lower utilities, repairs and maintenance, communication and professional services due to the delayed
opening of the pool at Springton Lake Middle School. The variance in the transportation budget is
due to a decrease in bus runs. The variance in central support services was due to decreases in
advertising and support staff substitutes. The decrease in other support services is a lower than
anticipated fair share payment for the Delaware County Intermediate Unit. The debt service budget
decreased due to the interest being lower on the 2007 variable rate b ond and the timing of the
issuance of a bond for the Springton Lake Middle School project. The increase in interfund transfers
was due to the District complying with Board Policy # 603. Budgetary reserve was not needed:
however, those funds were transferred to the capital projects funds in accordance with Board Policy
#603.
As the graph below illustrates, the largest portions of General Fund expenditures are for salaries and
benefits. The District is a n educational, service entity and a s such is labor-intensive.
• salaries
• Benefits
• Purchased services
• supplies
• Equipment
M iscellanecus
Debt/transfers/prior
General Fund:
Salaries
Benefits
Purchased services
Supplies
Equipment
Miscellaneous
DebUtransfers/prior
TOTAL EXPENDITURES BY OBJECT
$
$
38,207,976
14,218,768
6,198,368
8,291,798
632,034
244,732
11 ' 156,635
$
78,950,311
$
-ll -
Increase
(Decrease}
201 1
2012
37,969,362
13,473,498
6,810,440
8,800,991
628,158
254,254
10,784,851
$
78,721,554
$
238,614
745,270
(612,072)
(509,193)
3,876
(9,522)
371,784
228,757
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30 2012
Expenditures increased $229 thousand, or 0 .3 percent, over the p rior year. The increase was partially
due to an increase in salary and benefits. The retirement rate increased from 5.64 percent in 2011 to
8.65 percent in 2012. The District is mandated to fund the retirement program for its employees.
Debt increased due to the issuance of the 2011 Bond for the Springton Lake Middle School Project.
That Is the final bond that is necessary to complete the project for the 2013 fiscal year.
CAPITAL ASSETS
At June 30, 2012, the District's governmental activities had $95,723,640, net of depreciation , invested
in a broad range of capital assets, including land, buildings, and furniture and equipment.
Business-type activities owned $182,941 worth of net capital assets. These assets consist of movable
equipment that will be depreciated in future years.
2012
Land
Construction-in-progress
Land improvements
Buildings
Furniture and equipment
2011
$
6,253,838
32 ,315,024
1,997,307
48,478,708
6,861,704
$
6,253,838
20,908,556
1,330,787
50,457,709
6,776,066
$
95,906,581
$
85,726 ,956
More detailed information about the District's capital assets is presented in Notes 1 and 5 to the
financial statements.
DEBT ADMINISTRATION
As of July 1, 2011, the District had total outstanding debt of $72,405,000. Total debt outstanding as of
June 30, 2012 was $75,230,000.
Outstanding Debt
2012
General Obligation Notes/Bonds
- Bonds, Series of 2011
- Bonds, Series AA of 2010
- Bonds, Series A of 2010
- Bonds, Series AA of 2009
- Bonds, Series A of 2009
- Bonds, Series A of 2007
- Bonds, Series B of 2007
- Bonds, Series A of 2004
- Bonds, Series of 2004
TOTAL
$
$
- 12-
2011
8,295,000
3,785,000
14,685,000
4,760,000
14,300,000
240,000
14,455,000
14,710,000
$
75,230,000
$ 72,405,000
3,790,000
14,770,000
5,545,000
17,490,000
320,000
14,455,000
14,71 5,000
1,320,000
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30 2012
ECONOMIC FACTORS EXPECTED TO HAVE A SIGNIFICANT EFFECT ON FUTURE OPERATIONS
The District's general obligation bond rating was a Standard & Poor's AA/Stable. Standards cited that
the AA/Stable rating reflected the District's stable financial performance, limited tax base and
manageable debt position . The District's fiscal performance and position have historically been
sound. The District's remaining borrowing capacity is $83.4 million. The District's bonds payable total
as of June 30, 2012 is $75.2 million.
Rose Tree Media School District is listed as a beneficiary in the amount of $240 thousand on a life
insurance policy that was provided to a former Superintendent.
The economy continues to be a concern for the School District. While the housing market is a major
factor in the economic environment, the District has maintained a stable tax base. The District
continues to perform well academically and attract homeowners. A new fifty-one home development
will be completed in the near future. Investment earnings are down as a result of the current
economic environment. However, interest rates for General Obligation bonds are at historic lows. The
District completed the final portion of its financing for the Springton lake Middle School project at
those low rates. The District will continue to benefit from the lower interest rate over the next 12 years
for the life of the bond. The District offered an Early Retirement Incentive program for employees,
which resulted in savings of approximately $1 million. The District took steps to plan for the significant
increases in the Pennsylvania School Employees' Retirement System by assigning a portion of fund
balance for a portion of future increases. The District continues to improve efficiencies and reduce
expenditures to maintain our current programs.
CONTACTING THE DISTRICT'S FINANCIAl MANAGEMENT
The District's financial report is designed to provide citizens, taxpayers, parents, students, investors and
creditors with a general overview of the District's finances and to show the Board's accountability for
the monies it receives. If you have questions about this report or wish to request additional financial
information, please contact Grace Eves, Director of Management Services and Board Secretary, Rose
Tree Media School District, 308 North Olive Street, Media, Pennsylvania 19063-2403, (61 0) 627-6136.
- 13-
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET ASSETS
JUNE 30, 2012
(With Summarized Comparative Data for June 30, 2011)
ASSETS:
Cash and cash equivalents
Investments
Taxes receivable
Due from other governments
Internal balance
Other receivables
Inventories
Bond issuance costs
Land and improvements
Construction-in-progress
Buildings and improvements
Furniture and equipment
Accumulated depreciation
TOTAL ASSETS
LIABILITIES AND NET ASSETS:
LIABILITIES
Accounts payable
Accrued salaries and benefits
Other liabilities
Accrued interest
Deferred revenue
Long-term liabilities
Portion due or payable within one year:
Bonds payable in future years
Bond premiums
Less: Deferred amount on refunding
Less: Bond discount
Capital lease payable
Accumulated compensated absences/
early retirement incentives
Portion due or payable after one year:
Bonds payable in future years
Bond premiums
Less: Deferred am ount on refunding
Less: Bond discount
Capital lease payable
Accumulated compensated absences/
early retirement incentives
Other post-employment benefits
TOTAL LIABILITIES
NET ASSETS
Invested in capital assets, net of related debt
Unrestricted
TOTAL NET ASSETS
TOTAL LIABILITIES AND NET ASSETS
Governmental
Activities
Business-type
Activities
$ 11,604,054
18,158,263
$ 813,301
1 , 892,93~
1,323,800
34,647
1,633,642
381,441
9,358,885
32,315,024
94,660,648
28,938,920
(69,549,837)
42,379
(34,647)
6,850
19,672
Totals
2012
2011
$ 12,417,355
18,158,263
1,892,939
1,366,179
$ 14,803,931
21,299,330
1,815,345
1 '120,261
1,640,492
19,672
381 ,441
9,358,885
32,315,024
94,660,648
29,363,171
(69,791 '147)
424,251
(241 ,31 0)
969,194
30,312
387,895
8,592,529
20,908,556
93,953,304
29,709,306
(67 ,436,739)
$ 130,752,426
$1,030,496
$ 131,782,922
$ 126,153,224
$
$ 193,078
$
$
1,573,667
1,665,818
828,916
542,470
597,157
35,743
1,766,745
1,665,818
864,659
542,470
597,157
3,119,430
1,134,561
787,489
607,705
390,608
5,710,000
207,348
(15,381)
(41,975)
168,738
5,710,000
207,348
(15,381)
(41,975)
168,738
5,470,000
198,171
(15,381)
(35,353)
114,460
209,488
209,488
519,488
69,520,000
1,262,961
(128, 175)
(354,202)
337,475
69,520,000
1,262,961
(128,175)
(354,202)
337,475
66,935,000
1,378,539
(143,556)
(329,957)
343,379
2,666,963
745,918
85,497,186
228,821
2,666,963
745,918
85,726,007
2,365,290
620,315
83,460,188
27,192,292
18,062,948
45,255,240
182,941
618,734
801,675
27,375,233
18,681,682
46,056,915
28,1 70,335
14,522,701
42,693,036
$ 130,752,426
$1,030,496
$131,782,922
$ 126,153,224
The accompanying notes are an integral part of these financial statements.
- 14-
$7.954.694
$4.129.506
$ 76,295,594
$
$
- 15 -
NET ASSETS , END OF YEAR
NET ASSETS, BEGINNING OF YEAR
CHANGE IN NET ASSETS
-
-
-
-
-
Capital
Grants and
Contributions
GENERAL REVENUES
Property taxes, levied for general purposes
Taxes levied for specific purposes
Grants and entitlements not restricted to
specific programs
Investment earnings
Miscellaneous
TOTAL GENERAL REVENUES
374 100
374 100
$ 4,623,806
485,685
221 '162
254,572
1,369,742
49,480
3,465
572,682
7,580,594
1,281,694
1,281,694
2,847,812
103,226
85,389
$2,659,197
1,706,345
1,706,345
$ 46,076,548
7,084,179
5,939,118
6,465,316
4 ,694,753
1,464,886
87,649
2,776,800
74,589,249
Charges for
Services
The accompanying notes are an integral part of these financial statements.
TOTAL PRIMARY GOVERNMENT
BUSINESS-TYPE ACTIVITIES:
Food service
TOTAL BUSINESS-TYPE ACTIVITIES
GOVERNMENTAL ACTIVITIES:
Instruction
Instructional student support
Administrative and financial support services
Operation and maintenance of plant services
Pupil transportation
Student activities
Community services
Interest on long-term debt
TOTAL GOVERNMENTAL ACTIVITIES
Expenses
Program Revenues
Operating
Grants and
Contributions
$ 46,056,915
$ 801,675
$ 45,255.240
$ 42,693,036
39,116,747
42 ,693,036
852,042
41,840,994
-
3,576,289
3,363,879
(50,367)
3,896,618
224,308
128,337
66,560,776
61 ,130,809
1,180,704
(62,984,487)
11 631
11 631
$ (37,608,530)
(7, 112,542)
(5,450, 175)
(6,411 ,794)
(3, 175,825)
(1 ,349,119)
(887)
{1 ,887,246}
(62,996,118)
3,414,246
61,816,176
1,220,831
~211,394)
{50,551}
{50,551}
$ (38,793,545)
(6,598,494)
(5, 717,956)
(6,210,744)
(3,325,011 )
(1,312,180)
1,205
{2,204,118}
(64,160,843}
184
184
-
{50,551}
{50,551}
(50 ,551}
-
-
4,287,836
99,092
151,338
67,575,273
$
4,287,836
98,908
151 ,338
67,575,089
61,816,176
1,220,831
(64, 160,843}
$ (38, 793,545)
(6,598,494)
(5,717,956)
(6,210,744)
(3,325,01 1)
(1,312,180)
1,205
{2,204, 118l
(64,160,843}
Net( Expense} Revenue and Changes in Net Assets
BusinessGovernmental
type
Totals
Activities
Activities
2012
2011
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2012
(With Summarized Comparative Data for the Year Ended June 30, 2011)
2,099,139
4,500,000
1,140,337
19,212
5,974
515
6,321,094
14,086,271
1,665,818
828,916
2,227,152
209,488
5,687,622
756,248
$ 19,773.893
$
202,733
- 16 -
$ 5.81 2.772
5,610,039
-
-
7,754,000
-
-
-
-
5,610,039
7,754,000
-
1,275,070
-
202,733
-
$
$ 5,812,772
660,975
$ 5,151 ,797
Capital
Reserve
Fund
-
614,686
660,384
$ 9.029.070
$
The accompanying notes are an integral part of these financial statements.
TOTAL LIABILITIES AND FUND BALANCES
FUND BALANCES
Restricted for capital projects
Assigned for debt service
Assigned for future expenditures
Assigned for capital projects
Assigned for future benefits funding
Assigned for ERG
Assigned - Summer School
Assigned - GW helping GW
Unassigned
TOTAL FUND BALANCES
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts payable
Due to other funds
Accrued salaries and benefits
Other current liabilities
Deferred revenues
Accumulated compensated absences
TOTAL LIABILITIES
$ 9,029,070
$ 19,773,893
TOTAL ASSETS
434,740
8,594,330
$
$ 5,325,523
9,563,933
1,892,939
34,056
1,323,800
1,633,642
Capital
Projects
Fund
ASSETS
Cash and cash equivalents
Investments
Taxes receivable
Due from other funds
Due from other governments
Other receivables
General
Fund
ROSE TREE MEDIA SCHOOL DISTRICT
BALANCE SHEET- GOVERNMENTAL FUNDS
JUNE 30, 2012
(With Summarized Comparative Data for June 30, 2011)
691,994
-
-
-
691 ,994
-
-
-
$ 691.994
$
$ 691.994
$ 691,994
Debt
Service
Fund
$ 35.307.729
13,364,039
691,994
2,099,139
4,500,000
1,140,337
19,212
5,974
515
6,321,094
28,142,304
$ 1,573,667
660,384
1,665,818
828,916
2,227,152
209,488
7,165,425
$ 39.153.551
8,540,573
31 ,857,722
15,970,786
691,842
4,636,276
1,500,000
485,437
19,212
13,596
$ 2,930,749
68,744
1 '134,561
753,123
1,889,164
519,488
7,295,829
$ 39.153.551
$ 35,307,729
2011
$ 13,865,473
21,299,330
1,815,345
106,614
1,103,970
962,819
Totals
$ 11 ,604,054
18,158,263
1,892,939
695,031
1,323,800
1,633,642
2012
ROSE TREE MEDIA SCHOOL DISTRICT
RECONCILIATION OF BALANCE SHEET· GOVERNMENTAL FUNDS
TO STATEMENT OF NET ASSETS
JUNE 30, 2012
TOTAL GOVERNMENTAL FUND BALANCES
$ 28,142,304
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 therefore are not reported in the funds. These assets consist of:
$ 9,358,885
Land and improvements
Buildings and improvements
Furniture and equipment
Construction-in-progress
Accumulated depreciation
94,660,648
28,938,920
32,315,024
(69,549,837)
95,723,640
(75,230,000)
(506,213)
(2,666,963)
(542,470)
(745,918)
(79,691 ,564)
Some liabilities are not due and payable in the current period and therefore
are not reported in the funds. Those liabilities consist of:
Bonds payable in future years
Capital lease payable in future years
Accumulated compensated absences/early retirement incentives
Accrued interest
Other post-employment benefits
Refunded debt resulted in deferred charges which will be amortized over
the life of new debt but do not represent current rights.
Some of the District's revenues will be collected after year end but are not
available soon enough to pay for the current period's expenditures and
therefore are deferred in the funds.
NET ASSETS OF GOVERNMENTAL ACTIVITIES
(549, 135)
1,629,995
$ 45,255,240
The accompanying notes are an integral part of these financial statements.
- 17-
(1 ' 108,823)
15,195,094
NET CHANGES IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
$14.086,271
- 18 -
$ 7.754.000
11 ,448,504
The accompanying notes are an integral part of these financial statements.
FUND BALANCES, END OF YEAR
-
$ 5,610.039
4,522,282
1,087,757
2,855,227
2,855,227
-
$
691 .994
691,842
152
-
-
152
-
152
-
8,545,217
(3,694,504)
-
152
-
(2,855,227}
-
$
Debt
Service
Fund
-
(2,855,227)
100,947
(72,842)
-
8,300,000
217,112
(1 ,767,470)
-
-
(12,239,721)
1,577,435
114,460
1,771,380
79,485
Refund of prior year revenues
lnterfund transfers
Refund of prior year expenditures
TOTAL OTHER FINANCING SOURCES (USES)
OTHER FINANCING SOURCES (USES)
Proceeds of bond
Proceeds of extended term financing
Bond refunding payment
Premium on bond issuance
Bond Discount
1,746,404
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
12,266,227
-
11,932,252
-
-
3,910
3,910
-
$
------------
Capital
Reserve
Fund
26,506
24,889
1,617
333,975
$
~nd
Capital
Projects
43,117,943
23,336,475
1,339,258
8,301,408
76,095,084
$65,974,675
10,715,018
1,151,795
77,841,488
EXPENDITURES
Current:
Instruction
Support services
Operation of noninstructional services
Capital outlays
Debt service
TOTAL EXPENDITURES
REVENUES
Local sources
State sources
Federal sources
TOTAL REVENUES
General
Fund
-
$28.142.304
31,857,722
(3, 715,418)
8,545,217
-
100,947
(72,842)
8,300,000
217,112
(12,260,635)
~132,691
43,117,943
23,749,935
1,339,258
13,509,687
8,415,868
$ 66,003,626
10,71 6,635
1'151 ,795
77,872,056
2012
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES- GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2012
(With Summarized Comparative Data for the Year Ended June 30, 2011)
Totals
$31.857.722
34,194,578
(2,336,856)
16,808
14,873,666
18,640,000
572,299
(3,880,000)
207,018
(388,878)
(293,581)
(17,210,522)
43,192,287
23,574,095
1,327,568
18,201 ,366
7891,874
94,187,190
$ 64,860,971
10,119,642
1,996,055
76,976,668
2011
ROSE TREE MEDIA SCHOOL DISTRICT
RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS TO STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2012
NET CHANGE IN FUND BALANCES- GOVERNMENTAL FUNDS
$ (3,715,418}
Amounts reported for governmental activities in the statement of activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in the statement
of activities, the cost of those assets is allocated over their estimated useful lives as depreciation
expense. This is the amount by which capital outlays ($14,279,377) exceeded depreciation
expense ($4,161,170) in the period.
10,118,207
Because some revenues will not be collected for several months after the District's fiscal year
ends, they are not considered as "available" revenues in the governmental funds. Deferred
revenues increased by this amount this year.
131,439
The issuance of long-term debt (e.g . bonds, leases) provides current financial resources to
governmental funds, while the repayment of the principal of long-term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any effect
on net assets. This amount is the net effect of these differences.
(2,825,000)
Governmental funds report issuance costs and bond discounts as other financing uses and
deferred bond refunding option proceeds and bond premiums as other financing sources.
However, these amounts are reported on the statement of net assets as deferred charges and
credits and are amortized over the life of the debt.
115,433
The incurrence of a capital lease agreement provides current financial resources to
governmental funds, while the repayment of the principal of capital lease consumes the
current financial resources of governmental funds. Neither transaction, however, has any effect
on net assets. This amount is the net effect of these differences.
(48,374)
In the statement of activities, certain operating expenses--compensated absences (vacations
and sick leave) and special termination benefits (early retirement)--are measured by the
amounts earned during the year. In the governmental funds, however, expenditures for these
items are measured by the amount of financial resources used (essentially, the amounts
actually paid).
(301 ,673)
Other post-employment benefits include post-employment healthcare benefits and all postemployment benefits provided separately from a pension plan , excluding benefits defined as
termination offers and benefits. The annual cost represents the employer's contribution to the
plan which includes the implicit rate subsidy. In the governmental funds, however, expenditures
for these items are measured by the amount of financial resources used (essentially, the
amount actually paid).
(125,603)
Interest on long-term debt in the statement of activities differs from the amount reported in the
governmental funds because interest is recognized as an expenditure in the funds when it is due,
and thus requires the use of current financial resources. In the statement of activities, however,
interest expense is recognized as the interest accrues, regardless of when it is due.
65,235
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
The accompanying notes are an integral part of these financial statements.
- 19 -
$
3.414.246
ROSE TREE MEDIA SCHOOL DISTRICT
BUDGETARY COMPARISON STATEMENT ·GENERAL FUND
FOR THE YEAR ENDED JUNE 30,2012
Budgeted Amounts
Original
Final
REVENU ES
Local sources
State sources
Federal sources
TOTAL REVENUES
Actual
{GAAP Basis)
$65,145,897
9,923,162
932,449
76,001,508
$65,145,897
9,923,162
932,449
76,001,508
$65,974,675
10,715,018
1,151,795
77,841,488
29,313,223
11,664,607
779,423
1,694,846
901,231
44,353,330
29,385,107
11,393,478
765,148
1,579,846
901,232
44,024,811
28,865,620
11 ,047,758
759,336
1,543,997
901,232
43,117,943
Variance with
Final Budget
Positive
{Negative)
$
828,778
791,856
219,346
1,839,980
EXPENDITURES
Instruction:
Regular programs
Special programs
Vocational programs
Other instructional programs
Community college
Total Instruction
Support seNices:
Pupil personnel seNices
Instructional staff seNices
Administrative seNices
Pupil health
Business seNices
Operation and maintenance of plant seNices
Student transportation seNices
Data processing seNices
Other Support SeNices
Total Support SeNices
Operation of Noninstructional Activities:
Student activities
Community seNices
Total Operation of Noninstructional SeNices
DebtseNice
TOTAL EXPENDITURES
2,458,144
4,048,442
3,295,964
609,297
1,058,158
7,526,512
4,900,550
918,140
252,084
25,067,291
2,477,797
3,903,072
3,561,048
610,998
1,058,158
6,859,479
4,600,550
849,839
177,084
24,098,025
2,477,797
3,872,005
3,561,048
599,342
1,051,298
6,439,488
4,353,493
806,736
1751268
23,336,475
1,308,413
103,400
1,411,813
8,955,350
79,787,784
1,264,913
93,400
1,358,313
8,301,408
77,782,557
1,251,609
87,649
1,339,258
8,301,408
76,095,084
1,687,473
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES
{3. 786,276)
{1 ,781 ,049)
1,746,404
3,527,453
OTHER FINANCING USES
Budgetary reseNe
Transfers out
TOTAL OTHER FINANCING USES
(250,000)
(600,000)
(850,000)
{2,855,227)
(2,855,227)
{2,855,227)
(2,855,227)
NET CHANGE IN FUND BALANCE
(4,636,276)
(4,636,276)
( 1'1 08,823}
3,527,453
FUND BALANCE, BEGINNING OF YEAR
{3.289,608)
(3,289,608)
15,195,094
18,484,702
~ (7,925,884)
~ (7,925,884)
~ 14,086,271
P2,012,155
FUND BALANCE, END OF YEAR
The accompanying notes are an integral part of these financial statements.
-20 -
519,487
345,720
5,812
35,849
906,868
31,067
11,656
6,860
419,991
247,057
43,103
1,816
761 ,550
13,304
5,751
19,055
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET ASSETS- PROPRIETARY FUND
JUNE 30, 2012
(With Comparative Data for June 30, 2011)
Major Enterprise Fund
Food Service Fund
2012
ASSETS
CURRENT ASSETS :
Cash and cash equivalents
Due from other governments
Accounts receivable
Inventories
Total Current Assets
$
PROPERTY AND EQUIPMENT:
Furniture and equipment
Accumulated depreciation
Net Property and Equipment
813,301
42,379
6,850
19,672
882,202
2011
$
424,251
(241 ,310)
182,941
$ 1,065,143
TOTAL ASSETS
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES :
Accounts payable
Due to other funds
Deferred revenue
Total Current Liabilities
$
NET ASSETS:
Invested in capital assets, net of related debt
Unrestricted
Total Net Assets
TOTAL LIABILITIES AND NET ASSETS
193,078
34,647
35,743
263,468
610,565
{489,042}
121,523
$ 1,112,912
$
188,681
37,823
34,366
260,870
182,941
618,734
801,675
121,523
730,519
852,042
$ 1,065,143
$ 1,112,912
The accompanying notes are an integral part of these financial statements.
- 21 -
938,458
16,291
6,328
30 ,312
991,389
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETSPROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2012
(With Comparative Data for the Year Ended June 30, 2011)
Major Enterprise Fund
Food Service Fund
OPERATING REVENUES
Food service revenues
TOTAL OPERATING REVENUES
2012
2011
$ 1,281,694
$ 1,234,576
1,281,694
1,234,576
376,991
165,462
278,158
72,498
772,709
40,527
1,706,345
373,469
141,338
245,238
78,318
701,968
39,269
1,579,600
OPERATING EXPENSES
Salaries
Employee benefits
Purchased professional and technical services
Purchased property services
Supplies
Depreciation
TOTAL OPERATING EXPENSES
(424,651)
(345,024)
NONOPERATING REVENUES
Earnings on investments
State sources
Federal sources
TOTAL NONOPERATING REVENUES
184
68,954
305,146
374,284
362
65,409
291,246
357,017
CHANGE IN NET ASSETS
(50,367)
11 ,993
NET ASSETS, BEGINNING OF YEAR
852,042
OPERATING LOSS
$
NET ASSETS, END OF YEAR
801,675
The accompanying notes are an integral part of these financial statements.
- 22 -
840,049
$
852,042
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF CASH FLOWS- PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30,2012
(With Comparative Data for the Year Ended June 30, 2011)
Major Enterprise Fund
Food Service Fund
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from users
Payments to suppliers
Payments to employees
NET CASH USED BY OPERATING ACTIVITIES
2012
2011
$1,282,549
(1 ,034,734)
{545,629}
(297,814)
$1,238,042
(765,811)
{490,417}
{18,186)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
State sources
Federal sources
NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Equipment acquisition
NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Earnings on investments
NET CASH PROVIDED BY INVESTING ACTIVITIES
65,390
209,028
274,418
65,776
224,432
290,208
{101 ,945}
{101 ,945)
p 7,554}
{17,554)
184
184
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
~
CASH AND CASH EQUIVALENTS, END OF YEAR
362
362
(125, 157)
254,830
938,458
683,628
813,301
$ 938,458
RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY
OPERATING ACTIVITIES
CASH FLOWS FROM OPERATING ACTIVITIES:
Operating loss
Adjustments to reconcile operating loss to net cash used by
operating activities:
Depreciation
Donated commodities
(Increase) Decrease in:
Accounts receivable
Inventories
Increase (Decrease) in:
Accounts payable
Due to other funds
Deferred revenue
NET CASH USED BY OPERATING ACTIVITIES
$
SUPPLEMENTAL DISCLOSURE:
NONCASH NONCAPITAL FINANCING ACTIVITY:
USDA donated commodities
$
$ (424,651)
$ (345,024)
40,527
73,595
39,269
67,301
(522)
10,640
5,392
6,714
4,397
(3, 176)
1,376
The accompanying notes are an integral part of these financial statements.
-23-
(2971814~
73,595
185,698
24,390
{1 ,926}
$
{18,186~
$
67,301
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET ASSETS- FIDUCIARY FUNDS
JUNE 30, 2012
PrivatePurpose
Trust
Agency Fund
Student
Activities
Escheat
Funds
ASSETS
16,167
Cash
Due from other funds
$
TOTAL ASSETS
$
16 167
$
355
47
402
$ 129,576
$
355
$ 129,576
$
$
$
355
LIABILITIES AND NET ASSETS
LIABILITIES:
Due to escheat funds
Other current liabilties
NET ASSETS:
Reserved for trust
TOTAL LIABILITIES AND NET ASSETS
129,576
129,576
355
355
15,765
$
16167
$ 129,576
The accompanying notes are an integral part of these financial statements.
- 24 -
$
355
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF CHANGES IN NET ASSETS- FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2012
(With Comparative Data for the Year Ended June 30, 2011)
Private-Purpose Trust
2012
2011
ADDITIONS
$
Local contributions
11 ,288
$
10,296
11,288
10,296
Fees paid and scholarships awarded
14,550
12,650
TOTAL DEDUCTIONS
14,550
12,650
CHANGE IN NET ASSETS
(3,262)
(2,354)
NET ASSETS, BEGINNING OF YEAR
19,027
21,381
TOTAL ADDITIONS
DEDUCTIONS
$
NET ASSETS, END OF YEAR
15 765
The accompanying notes are an integral part of these financial statements.
-25 -
$
191027
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Rose Tree Media School District (the "District") operates four elementary schools, one middle
school and one senior high school to provide education and related services to the residents of
Edgmont, Middletown and Upper Providence Townships and the Borough of Media. The District
operates under current standards prescribed by the Pennsylvania Department of Education in
accordance with the provisions of the School Laws of Pennsylvania as a school district of the
second class. The District operates under a locally elected nine-member Board form of
government.
The financial statements of Rose Tree Media School District have been prepared in accordance
with generally accepted accounting principles ("GAAP") as applied to governmental units. The
Governmental Accounting Standards Board ("GASB") is the authoritative standard-setting body for
the establishment of governmental accounting and financial reporting principles. The more
significant of these accounting policies are as follows:
Reporting Entity
GASB Statement No. 14, "The Financial Reporting Entity," as amended by GASB Statement No. 39,
established the criteria for determining the activities, organization and functions of government to
be included in the financial statements of the reporting entity. In evaluating the District as a
reporting entity, management has addressed all potential component units which may or may
not fall within the District's financial accountability. The criteria used to eva luate component units
for possible inclusion as part of the District's reporting entity are financial accountability and the
nature and significance of the relationship. Rose Tree Media School District is considered to be
an independent reporting entity and has no component units.
Basis of Presentation
Entity-wide Financial Statements
The statement of net assets and the statement of activities display information about the District as
a whole. These statements distinguish between activities that are governmental and those that
are considered business-type. These statements include the financial activities of the primary
government, except for fiduciary funds.
The entity-wide financial statements are prepared using the economic resources measurement
focus and the accrual basis of accounting as further defined under proprietary funds below. This
is the same approach used in the preparation of the proprietary fund financial statements but
differs from the manner in which governmental fund financial statements are prepared.
Therefore, governmental fund financial statements include reconciliation with b rief explanations
to better identify the relationship between the entity-wide statements and the statements of
governmental funds.
-26-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
The entity-wide statement of activities presents a comparison between expenses and program
revenues for each function of the business-type activities of the District and for each
governmental function. Expenses are those that are specifically associated with a service or
program and are, therefore, clearly identifiable to a particular function . Program revenues
include charges paid by the recipients of the goods or services offered by the programs and
grants and contributions that are restricted to meeting the operational or capital requirements of
a particular function. Revenues which are not classified as program revenues are presented as
general revenues. The comparison of program revenues and expenses identifies the extent to
which each function is self-financing or draws from the general revenues of the District.
Except for interfund activity and balances between the funds that underlie governmental
activities and the funds that underlie business-type activities, which are reported as transfers and
internal balances, the effect of interfund activity has been removed from these statements.
The entity-wide financial statements report net assets in one of three components. Invested in net
assets, net of related debt consists of capital assets, net of accumulated depreciation and
reduced by the outstanding balances of borrowing attributable to acquiring, constructing or
improving those assets. Net assets are reported as restricted when constraints placed on net
asset use are either externally imposed by creditors (such as through debt covenants), grantors,
contributors, or laws or regulations of other governments or imposed by law through constitutional
provisions or enabling legislation. Those restrictions affect net assets arising from special revenue
and capital projects funds. Unrestricted net assets consist of net assets that do not meet the
definition of "invested in capital assets, net of related debt" or "restricted."
Fund Financial statements
During the school year, the District segregates transactions related to certain District functions or
activities in separate funds in order to aid financial management and to demonstrate legal
compliance. Fund financial statements report detailed information about the District. The focus
of governmental and proprietary fund financial statements is on major funds rather than reporting
funds by type. Each major fund is presented in a separate column. Fiduciary fund financial
statements are presented by fund type.
Governmental Funds
All governmental funds are accounted for using the modified accrual basis of accounting and
the current financial resources measurement focus. Under this basis, revenues are recognized in
the accounting period in which they become measurable and available. Expenditures are
recognized in the accounting period in which the fund liability is incurred, if measurable. The
District reports the following major governmental funds:
The General Fund is the government's primary operating fund. It accounts for all financial
resources of the general government, except those required to be accounted for in another fund.
- 27-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
The Capital Projects Fund is used to account for the acquisition, construction and renovation of
major capital facilities and their related capital assets.
The Capital Reserve Fund is used to accumulate resources for future capital needs of the District.
The Debt Service Fund is used to account for funds segregated to pay for future debt service
payments.
Revenue Recognition
In applying the "susceptible to accrual concept" under the modified accrual basis, revenues are
considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the government considers tax
revenue to be available if collected within 60 days of the end of the fiscal period. Revenue from
federal, state and other grants designated for payment of specific District expenditures is
recognized when the related expenditures are incurred; accordingly, when such funds are
received, they are reported as deferred revenues until earned.
Other revenues, including certain other charges for services and miscellaneous revenues, are
recorded as revenue when received in cash because they generally are not measurable until
actually received.
Expenditure Recognition
The measurement focus of governmental fund accounting is on decreases in net financial
resources (expenditures) rather than expenses. Most expenditures are measurable and are
recorded when the related fund liability is incurred. However, principal and interest on general
long-term debt which has not matured are recognized when paid. Liabilities for compensated
absences and special termination benefits are recognized as fund liabilities to the extent they
mature each period. Allocations of costs, such as depreciation and amortization, are not
recognized in the governmental funds.
Proprietary Funds
The proprietary fund is accounted for using the accrual basis of accounting. This fund accounts
for operations that are financed primarily by user charges. The economic resource focus
concerns determining costs as a means of maintaining the capital investment and management
control. Revenues are recognized when they are earned and expenses are recognized when
they are incurred. Allocations of certain costs, such as depreciation, are recorded in the
proprietary fund. The District does not attempt to allocate all "building-wide costs" to the
proprietary fund. However, the food service department does partially refund these costs to the
general fund. Similarly, the proprietary fund does not recognize a cost for the building space it
occupies.
This fund distinguishes operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering
goods in connection with the proprietary fund's principal ongoing operations. The principal
operating revenues of the District's proprietary fund are food service charges. Operating
-28-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
expenses for the District's proprietary fund include salaries and benefits, food production costs,
supplies and administrative costs. All revenues or expenses not meeting this definition are
reported as nonoperating revenues and expenses.
Private-sector standards of accounting and financial reporting issued prior to December 1 , 1989
are followed in both the entity-wide and proprietary fund financial statements to the extent that
those standards do not conflict with or contradict the guidance of GASB. Governments also have
the option of following subsequent private-sector guidance for their business-type activities and
enterprise funds, subject to this same limitation. The District has elected not to follow subsequent
private-sector guidance.
Fiduciary Funds
Fiduciary funds account for the assets held by the District as a trustee or agent for individuals,
private organizations and/or governmental units and are, therefore, not available to support the
District's own programs. The District accounts for these assets in a private-purpose trust and
agency fund. The private-purpose trust fund accounts for activities in various scholarship
accounts, whose sole purpose is to provide annual scholarships to particular students as
described by donor stipulations. The agency fund accounts for funds held on behalf of students
of the District, and escheat funds. The measurement focus and basis of accounting for the
private-purpose trust is the same as for proprietary funds, while the agency fund is custodial in
nature (assets equal liabilities) and does not involve measurement of results of operations.
Cash and Cash Equivalents
The District's cash and cash equivalents are considered to be cash on hand, demand deposits
and short-term investments with original maturities of three months or less from the date of
acquisition.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at
the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current
portion of interfund loans) or "advances to/from other funds" (i.e., the noncurrent portion of
interfund loans). Any residual balances outstanding between the governmental activities and
business-type activities are reported in the entity-wide financial statements as "internal balances."
The District does not record an allowance for uncollectible taxes because it is considered to be
immaterial.
Property Taxes
Property taxes attach as an enforceable lien on property as of July 1. Taxes are levied on July 1
and are payable in the following periods:
July 1 - August 31
September 1 - October 31
November 1 to collection
February 28
-
Discount period, 2% of gross levy
Face Period
Penalty Period, 10% of gross levy
Lien Date
- 29-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Real estate taxes for the District are collected from the Townships of Edgmont, Middletown and
Upper Providence and the Borough of Media. The tax on real estate in those municipalities for
public school purposes for fiscal 2011-2012 was 22.2522 mills ($22.25 per $1 ,000 of assessed
valuation) as levied by the Board of School Directors. Assessed valuations of property are
determined by the Delaware County Board of Assessment.
Prepaid Items and Inventories
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both entity-wide and fund financial statements.
All inventories are valued at the lower of cost (first-in, first-out method) or market.
Capital Assets
Capital assets, which include property, plant and equipment, are reported in the applicable
governmental or business-type activities columns in the entity-wide and proprietary fund financial
statements. Capital assets are defined by the District as assets with an initial, individual cost of
more than $1 ,500 or $1 0,000 in the aggregate and an estimated useful life in excess of one year.
Such assets are recorded at historical cost if purchased or constructed . Purchased equipment at
less than $1,500 yet deemed critical to inventory control will be recorded at its original cost.
Donated capital assets are recorded at estimated fair value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets' lives are not capitalized .
Major outlays for capital assets and improvements are capitalized as projects are constructed,
inclusive of ancillary costs.
Property, plant and equipment of the District are depreciated using the straight-line method over
the following estimated useful lives:
40 years
20 years
5-20 years
8 years
School buildings
Site improvements
Furniture and equipment
Vehicles
Compensated Absences
District policies permit employees to accumulate earned but unused vacation, personal and sick
days as stipulated In each bargaining unit's contract. The liability for these compensated
absences is recorded as long-term debt in the entity-wide financial statements. The current
portion of this debt is estimated based on historical trends. In the fund financial statements,
governmental funds report only the compensated absence liability payable from expendable
available financial resources.
-30-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Long-term Obligations
In the entity-wide financial statements and proprietary fund financial statements, long-term debt
and other long-term obligations are reported as liabilities. Bond premiums and discounts are
deferred and amortized over the life of the bonds.
Bond issuance costs, bond premiums, bond discounts and deferred amounts on refunding are
reported as deferred charges and amortized over the term of the related debt. All amounts are
amortized using the straight-line method.
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received and discounts paid on debt
issuances are reported as other financing sources and uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service expenditures,
except for refundings paid from proceeds which are reported as other financing uses.
Fund Eguitv
In the fund financial statements, governmental funds report reservations of fund balance for
amounts that are not available for appropriation or are legally restricted by outside parties for use
for a specific purpose. The proprietary funds report the same three components of net assets as
do the entity-wide financial statements. When an expenditure is incurred for purposes for which
both restricted and unrestricted fund balance is available, the District considers restricted funds to
have been spent first. When an expenditure is incurred for which committed, assigned or
unassigned fund balances are available, the District considers amounts to have been spent first
out of committed funds, then assigned funds and, finally, unassigned funds, as needed, unless
the Board has provided otherwise in its commitment or assignment actions.
As of June 30, 2012, fund balances of the governmental funds are classified, if applicable, as
follows:
Nonspendable - amounts that cannot be spent either because they are in nonspendable form or
because they are legally or contractually required to be maintained intact.
Restricted - amounts that can be spent only for specific purposes because of constitutional
provisions or enabling legislation or because of constraints that are externally imposed by
creditors, grantors, contributors, or the laws or regulations of other governments.
Committed- amounts that can be used only for specific purposes determined by formal action
of the Board of Directors. The Board is the highest level of decision-making authority for the
District. Commitments may be established, modified or rescinded only through resolutions
approved by the Board of Directors.
- 31 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Assigned- amounts that do not meet the criteria to be classified as restricted or committed but
that are intended to be used for specific purposes. The Finance Committee or Director of
Management Services may assign amounts for specific purposes.
Unassigned- all other spendable amounts.
Comparative Data
Comparative totals for the prior year have been presented in the accompanying financial
statements in order to provide an understanding of changes in the District's financial position and
operations. However, presentation of prior year totals by fund and activity type have not been
presented in each of the statements since their inclusion would make the statements unduly
complex and difficult to read . Summarized comparative information should be read in
conjunction with the District's financial statements for the year ended June 30, 2011 , from which
the summarized information was derived.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those estimates.
NOTE 2
STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Budgetary Information
An annual budget is adopted prior to the beginning of each year for the general fund on the
modified accrual basis of accounting . The general fund is the only fund for which a budget is
legally required, although project-length financial plans are adopted for all capital projects
funds.
The District is required to publish notice by advertisement at least once in two newspapers of
general circulation in the municipalities in which it is located, and within 15 days of final action,
that the proposed budget has been prepared and is available for public inspection at the
administrative offices of the District. Notice that public hearings will be held on the proposed
operating budget must be included in the advertisement; such hearings are required to be
scheduled at least 10 days prior to the date final action on adoption is taken by the Board.
Legal budgetary control is maintained at the sub-function/major object level. The Board of
School Directors may make transfers of funds appropriated to any particular item of expenditure
by legislative action in accordance with the Pennsylvania School Code. Management may
amend the budget at the sub-function/sub-object level without Board approval. Appropriations
lapse at the end of the fiscal period. Budgetary information reflected in the financial statements
is presented at or below the level of budgetary control and includes the effect of approved
budget amendments.
-32-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 3
DEPOSITS AND INVESTMENTS
Deposits
Custodial Credit Risk
Custodial credit risk is the risk that in the event of a bank failure, the government's deposits may
not be returned. At June 30, 2012, the carrying amount of the District's deposits was $12,563,098
and the bank balance was $14,251,130. The cash deposits of the District are in the Pennsylvania
School District Liquid Asset Fund ("PSDLAF"). Although not registered with the Securities and
Exchange Commission and not subject to regulatory oversight, PSDLAF acts like a money market
mutual fund in that its objective is to maintain a stable net asset value of $1 per share, is rated by
a nationally recognized statistical rating organization and is subject to an independent annual
audit.
Investments
Statutes authorize the District to invest in U.S. Treasury bills, time or share accounts of institutions
insured by the Federal Deposit Insurance Corporation or in certificates of deposit when they are
secured by proper bond or collateral, repurchase agreements, State Treasurer's investment pools
or mutual funds.
As of June 30, 2012, the District had the following investments:
Certificates of deposit due within one year - collateral
held by pledging bank's agent in the District's name
$ 18 ,158,263
Interest Rate Risk
The District does not have a formal investment policy that limits investment maturities as a means
of managing its exposure to fair value losses arising from Increasing interest rates.
Credit Risk
The District has no investment policy that would limit its investment choices to those with certain
credit ratings. As of June 30, 2012 , PSDLAF was rated as AAA by a nationally recognized
statistical rating organization.
Concentration Risk
The Distric t places no limit on the amount it may invest in any one issuer.
-33 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 4
DEFERRED REVENUES
Governmental funds report deferred revenue in connection with receivables for revenues that are
not considered to be available to liquidate liabilities of the current period. Governmental funds
also defer revenue recognition of resources that have been received, but not yet earned. At the
end of the current fiscal year, deferred revenue reported in the governmental funds resulted from
delinquent property taxes receivable, federal grants received that have not satisfied eligibility
requirements and revenue received but not yet earned.
Deferred revenue in the proprietary funds and the entity-wide financial statements represents
resources that have been received but not yet earned.
NOTE 5
CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2012 was as follows:
Beginning
Balance
GOVERNMENTAL ACTIVITIES:
Capital assets not being depreciated:
Land
Construction-in-progress
$
6,253,838
20,908 ,556
Increases
$
$
Ending
Balance
Decreases
11 ,596,692
190,224
6,253,838
32,315,024
190,224
38 ,568,862
$
Total Capital Assets Not Being Depreciated
27,162,394
11,596,692
Capital assets being depreciated:
Land improvements
Buildings and improvements
Furniture and equipment
2,338 ,691
93,953,304
29,098,741
766,356
707,344
1,399,209
1,559,030
3,105,047
94,660,648
28,938,920
125,390,736
2,872,909
1,559,030
126,704,615
Less accumulated depreciation for:
Land improvements
Buildings and improvements
Furniture and equipment
1,007,904
43,495,595
22,444,198
99,836
2,686,345
1,374,989
1,559,030
1,107,740
46,181 ,940
22,260,157
Total accumulated depreciation
66,947,697
4,161 ,170
1,559,030
69,549,837
Total Capital Assets Being Depreciated, Net
58,443 ,039
(1 ,288 ,261)
Total Capital Assets Being Depreciated
57,154,778
GOVERNMENTAL ACTIVITIES ASSETS, NET
$ 85,605,433
$10,308,431
$
190,224
BUSINESS-TYPE ACTIVITIES:
Capital assets being depreciated:
Machinery and equipment
$
$
101,945
$
(288,259)
Less accumulated depreciation
610,565
(489,042)
BUSINESS-TYPE ACTIVITIES, NET
$
- 34-
121,523
(40,527)
$
61,418
$ 95,723,640
$
288 ,259
$
424,251
(241 ,31 0)
$
182,941
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 5
CAPITAL ASSETS (cont'd)
Depreciation expense was charged to functions/programs of the District as follows:
Governmental Activities:
Instruction
Instructional student support
Administrative and financial support services
Operation and maintenance of plant services
Pupil transportation
Student activities
$ 2,795 ,910
680,298
28,248
90,043
344,878
221 793
J
Total Governmental Activities
$ 4,161 170
J
$
Business-type Activities - food service
NOTE 6
40,527
INTERNAL RECEIVABLES, PAYABLE$ AND TRANSFERS
The composition of interfund balances as of June 30, 2012 is as follows:
Due From
Amount
Capital Reserve
General Fund
Capital Projects
$
660,975
34,056
591
Total
$
695,622
Due To
Capital Projects
Food Service Fund
Food Service Fund
Amount
$
660,975
34,056
591
$
695,622
lnterfund balances between funds represent temporary loans recorded at year end subsequent
to a final allocation of expenses. The balances generally are paid shortly after year end .
lnterfund Transfers:
Transfer Out:
General Fund
Transfers In:
$ 2,855,227
Capital Reserve Fund
Transfers represent funds set aside for the anticipation of future capital needs.
-35-
$
2,855,227
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 7
GENERAL LONG-TERM DEBT
The following summarizes the changes in the long-term liabilities of governmental activities for the
year ended June 30, 2012:
Balance
July 1, 2011
Additions
Reductions
Balance
June 30, 2012
Bonds payable
Bond premiums
Deferred amount on refunding
Bond discount
Capital lease payable
Accumulated compensated
absences/early retirement
incentive
$ 72,405,000
$ 8,300,000
$ (5,475,000)
$ 75,230,000
1,576,710
(158,937)
(365,310)
457,839
100,947
(72,842)
217,112
(207 ,348)
15,381
41,975
(168,738)
1,470,309
(143 ,556)
(396,177)
506,213
2,884,778
533,990
(542,317)
2 ,876,451
TOTALS
$ 76,800,080
$ 9,079,207
$ (6,336,047)
$ 79,543,240
Payments of long-term debt are expected to be funded by the general fund.
General Obligation Bonds
Series of 2004A, maturing through February 2, 2019, bearing
interest ranging from 1 .65% to 5.25%, interest payable semiannually on February 15 and August 15.
$
14,710,000
Series of 2007A, maturing through January 25, 2017, bearing
interest at a variable rate never to exceed 15%.
240,000
Series of 2007B, maturing through January 25, 2022, bearing
interest at a variable rate never to exceed 15%.
14,455,000
Series of 2009A, maturing through February 15, 201 7, bearing
interest ranging from 2.75% to 4%, interest payable semiannually on February 15 and August 15.
14,300,000
Series of 2009AA, maturing through February 15, 2018 , bearing
interest ranging from 2.25% to 5%, interest payable semiannually on February 15 and August 15.
Series of 201 OA, maturing through February 1, 2022, bearing
interest ranging from 0 .45% to 3%, interest payable semiannually on February 1 and August 1.
-36 -
4,760,000
14,685,000
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 7
GENERAL LONG-TERM DEBT (cont'd)
Series of 201 OAA, maturing through May 1, 2016, bearing
interest ranging from 0.8% to 3%, interest payable semiannually on May 1 and November 1 .
3,785,000
Series of 2011, maturing through Feb 1, 2023, bearing interest
Ranging from 1% to 4%, interest payable semi-annually on
February 1 and August 1.
8,295,000
TOTAL
$75,230,000
Presented below is a summary of debt service to maturity by years:
Year Ending June 30,
2013
2014
2015
2016
2017
2018-2022
2023
NOTE 8
Principal
Maturities
Interest
Maturities
$ 5,710,000
$ 2,587,331
$ 8,297,331
5,925,000
5,900,000
6,175,000
6,445,000
36,830,000
8,245,000
2,375,628
2,185,088
1,827,383
1,539,733
4,208,143
329,800
8,300,628
8,085,088
8,002,383
7,984,733
41,038,143
8,574,800
$ 75,230,000
$ 15,053,106
$ 90,283,106
Total
Maturities
PENSION PLAN
Plan DescriQtion
The District contributes to the Public School Employees' Retirement System ("PSERS"), a
governmental cost-sharing multiple-employer defined benefit pension plan administered by the
Commonwealth of Pennsylvania Public School Employees' Retirement System. The PSERS provides
retirement and disability, legislatively mandated ad hoc cost-of-living adjustments and certain
health care insurance premium assistance to plan members and beneficiaries. The Public School
Employees' Retirement Code (Act No. 96, of October 2, 1975, as amended) provides the authority
to establish and amend benefit provisions. The PSERS issues a comprehensive annual financial
report that includes financial statements and required supplementary information for the plan. A
copy of the report may be obtained by writing to Public School Employees' Retirement System,
P.O. Box 125, Harrisburg, PA 171 08-0125; or by accessing its website at http:/www.psers.state.pa.
us/publications/cafr/index. htm.
-37-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 8
PENSION PLAN (cont'd)
Funding Policy
The contribution policy is established in the Public School Employees' Retirement Code and
requires contributions by active members, employers and the Commonwealth. Individual
employees contribute between 5.25 and 7.5 percent of salary depending on their membership
status. Contributions required of employers are based upon an actuarial valuation. For fiscal
year ended June 30, 2012, the rate of employer contribution was 8.65 percent of covered
payroll. The District's contributions to PSERS for the years ended June 30, 2010, 2011 and 2012
were $1,747,740, $2,148,751 and $3,273,546, respectively, equal to the required contribution for
each year. The Commonwealth contributes to PSERS by reimbursing the District 50 percent of its
contribution each year.
NOTE 9
OPERATING LEASES
The District currently is obligated under operating lease agreements for various office equipment.
The following is a summary of the minimum rental costs for the remaining terms:
Year Ending June 30,
36,128
36,128
36,128
34,526
32,924
2013
2014
2015
2016
2017
$
Total
$ 175,834
Rental expense for the year ended June 30, 2012 was $106,856.
NOTE 10
CAPITAL LEASES - LESSEE
The District has entered into lease agreements as a lessee for financing the acquisition of
equipment used for the network throughout the District. These lease agreements qualify as
capital leases for accounting purposes and, therefore, have been recorded at the present value
of future minimum lease payments as of the inception date.
The assets acquired through the capital leases are as follows:
ASSET
Equipment - Corporate Networking Inc.
Equipment - Apple Inc.
Less: Accumulated depreciation
Total
$ 572 ,299
217 ,112
(283,198)
$ 506,213
- 38-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 10
CAPITAL LEASES- LESSEE (cont'd)
The future minimum lease obligations and the net present value of these minimum lease
payments as of June 30, 2012 were as follows:
Year Ending June 30,
NOTE 11
2013
2014
2015
$ 168,738
Total
$ 506,213
168,738'
168,737
JOINT VENTURES
The District participates in a joint venture with the other school districts of Delaware County,
Pennsylvania in the operation of a Vocational-Technical School Authority ("DCVTSA"). The DCVTSA
is governed by seven members. Each member must be a citizen of a school district where the
DCVTSA leases a project. The DCVTSA oversees acquiring, holding, constructing, improving and
maintaining the public area vocational-technical school buildings. The financial statements of
the Vocational-Technical School Authority are available from the DCVTSA located at 200 Yale
Avenue, Morton, Pennsylvania 19070.
The District also participates in a joint venture with other school districts of Delaware County,
Pennsylvania to support the Delaware County Community College. The financial statements of
the Delaware County Community College Authority ("DCCCA") are available from the DCCCA
located at 901 South Media line Road, Media, Pennsylvania 19063.
The District has entered into lease agreements with the Delaware County Community College
Authority and the Delaware County Vocational Technical School Authority to provide rental
payments to retire the Authority's outstanding debt obligations. The lease agreements generally
provide that in the event the individual Authorities either retire all of their outstanding obligations
which were issued to finance school facilities construction or acquisition, or accumulate sufficient
reserves to cover such obligations prior to the expiration of the applicable schedules, there will be
no subsequently scheduled rental payments made. Inasmuch as the annual rentals include
reserve funds which either are invested by Authorities or used for advance retirement of
obligations, it is anticipated that less than scheduled rentals will eventually be paid.
Future Authority rental payments are:
Year Ending June
DCCCA
DCVTSA
2013
2014
2015
2016
2017
2018-2033
Total
Less: Interest requirements
$
231,927
231,927
232 ,136
186,823
186,639
2,175,062
3,244,514
(977 ,644)
$
Outstanding rental payments
$ 2,266,870
$
- 39 -
34,567
34,567
(521)
32,046
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 12
SPECIAL TERMINATION BENEFITS
The District from time to time offers additional retirement incentives, known as early retirement
incentive plans ("ERIPs"} to senior professional staff and administrators contemplating retirement.
These special termination benefits are formally approved by Schoof Board action in the year an
ERIP plan is implemented.
In order for an employee to retire and participate in a District-sponsored ERIP, the District must first
decide whether or not to offer a special termination plan in the year the employee is retiring; the
retiring employee must meet certain age and District service year requirements; a specified
minimum number of employees must opt into the ERIP; and the retiring employee must be eligible
to receive other pension benefits provided through the PSERS, described in Note 8. The District's
various ERIP plans can provide for the payment of specific annuity amounts to the participating
retiree or the payment of specified dollar amounts to be applied toward participating retiree
heafthcare premiums for a limited number of years.
As of June 30, 2012, the District had five ERIP plans in effect. The number of participants and the
present value of those benefits as of June 30, 2012 are summarized below:
ERIP
Began
July
July
July
July
July
1, 1997
1, 2006
1, 2007
1, 2008
1, 2011
Participants
Total
1
22
22
l
15
Heafthcare
Premium
$
31 ' 158
118,426
164,000
5,000
369,000
$
31 '158
118,426
164,000
5,000
369,000
$
687,584
$
687,584
During the year ended June 30, 2012, the cost of these benefits was $519,488 .
NOTE 13
COMMITMENTS AND CONTINGENCIES
Government Grants and Awards
The District participates in both state and federally assisted grant programs. These programs are
subject to program compliance audits by the grantors or their representatives. The District is
potentially liable for any expenditures which may be disallowed pursuant to the terms of these
grant programs. Management is not aware of any material items of noncompliance which would
result in the disallowance of program expenditures.
-40-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 13
COMMITMENTS AND CONTINGENCIES (cont'd)
Litigation
Certain litigation claims are pending against the District. In the opinion of District management
and legal counsel, the potential losses, if any, on such claims are not yet determinable.
Capital Improvement Commitments
As of June 30, 2012, the District was in the process of several capital projects. Construction
commitments completed to date are as follows:
Contract
Amount
Project
Glenwood Elementary School
Boilers and Associated Equipment
Sealant Replacement and
Masonry Repairs
Repaving
Stage Curtain
Painting
Springton Lake Middle School Project
Sanitary Sewer
Permits
Modular Classrooms
Asbestos Abatement
Construction Testing
Phasing Allowance
Professional Services
General Contractor
Electrical Contractor
Mechanical Contractor
Plumbing Contractor
Utility Connection/Municipal Fees
Architect
Asbestos (Eagle)
HVAC Testing
Indian Lane
Repaving
Media
HVAC
Emergency Roof Repairs
ESCo
Johnson Controls
$
547 ,788
Completed
6/30/2012
Commitment
$
$
544,064
3,724
30,050
15,504
9,109
1,850
3,250
26,800
15,504
9,109
1,850
150;000
673,818
873,962
547,224
90,000
299,073
1,130,160
14,024,108
5,139,652
6,509,361
2,083 ,000
300,000
2,534,799
199,475
77,900
124,900
544,855
766,732
443,505
81 ,572
145,264
1,025,407
11,977,717
4,596,455
5,626,275
1,879,055
189,932
1,678,710
136,584
51,093
25,100
128,963
107,230
103,719
8,428
153,809
104,753
2,046,391
543,197
883,086
203,945
110,068
856,089
62,891
26,807
35 ,645
35,465
355,690
75,000
64,665
47,590
291,025
27,410
9,840,967
660,975
9,179,992
$45,544,134
$30,921,820
$14,622,314
In addition, the District has incurred costs in the amount of $1,393,204 for other projects that were
not under a formal construction commitment as of June 30, 2012 .
- 41 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 14
RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of
assets; errors and omissions; injuries to employees; and natural disasters. Significant losses are
covered by commercial insurance for all major programs except for workers' compensation, for
which the District retains risk of loss. For insured programs, there were no significant reductions in
insurance coverages during the 2011-2012 year. Settlement amounts have not exceeded
insurance coverage for the current year or the three prior years.
NOTE 15
POST-EMPLOYMENT HEALTHCARE PLAN
Plan Description
Effective for the 2008-2009 fiscal year, the District adheres to Governmental Accounting
Standards Board Statement No. 45, "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions," for certain post-employment healthcare benefits and
life insurance benefits provided by the District. This Statement generally provides for prospective
implementation - i.e., that employers set the beginning net OPEB obligation at zero as of the
beginning of the initial year. Accordingly, for financial reporting purposes, no liability is reported
for the post-employment benefits liability at the date of transition.
The District's post-employment healthcare plan is a single-employer defined benefit healthcare
plan. The plan provides medical insurance benefits to eligible retirees and their spouses. The
Board of School Directors has the authority to establish and amend benefit provisions through the
collective bargaining process with members of the professional and support staff, an agreement
with administrative employees, and individual employment contracts with certain employees.
The plan does not issue any financial report and is not included in the report of any public
employee retirement system or any other entity.
Funding Policy
The contribution requirements of plan members are established and may be amended by the
Board of School Directors. The required contribution is based on projected pay-as-you-go
financing requirements, with any additional amount to prefund as determined annually by the
Board of School Directors. For fiscal year 2012, plan members receiving benefits contributed
$320,730, or approximately 100 percent of total premiums, through their required monthly
contributions.
Annual OPEB Cost and Net OPEB Obligation
The District's annual other post-employment benefit cost (expense) is calculated based on the
annual required contribution of the employer ("ARC"), an amount actuarially determined in
accordanc e with the parameters of GASB Statement No. 45. The ARC represents a level of
funding that, if paid on an ongoing basis, is projected to cover normal costs each year and
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30
-42-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 15
POST-EMPLOYMENT HEALTHCARE PLAN (conf'd)
years. The following table shows the components of the District's OPEB cost for the year, the
amount actually contributed to the plan and changes in the District's net OPEB obligation to the
plan .
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
$ 456 ,501
27 ,914
(38,082)
Annual OPEB cost (expense)
Contributions made
446,333
(320,730)
Increase in net OPEB obligation
125,603
Net OPEB obligation - beginning of year
620,315
Net OPEB obligation - end of year
$ 745,918
This amount represents the cost of medical expenses for retirees.
Funded Status and Funding Progress
The schedule of funding progress of OPEB is as follows:
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
7/1/2010
1/1/2008
$
$
Actuarial
Accrued
Liability
(AAL)Entry Age
(b)
Unfunded
AAL
(UAAL)
(b-a)
Funded
Ratio
(a/b)
Covered
Payroll
(c)
UAAL as a
Percentage
of Covered
Payroll
[(b-a)/c]
$3 ,522,969
$4,066,104
$3,522,969
$4,066,104
0.00%
0.00%
$34,522,969
$30,779,036
10.07%
13.21%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality and healthcare cost trends. Amounts
determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations
and new estimates are made about the future.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and the plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and assumptions
used include techniques that are designed to reduce the effects of short-term volatility in
actuarial liabilities and the actuarial value of assets, consistent with the long-term perspective of
the calculations.
-43 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 15
POST-EMPLOYMENT HEALTHCARE PLAN (cont'd)
In the July 1, 2010 actuarial valuation, the entry age actuarial cost method was used. The
actuarial assumptions included a 4.50 percent investment rate of return and an annual
healthcare cost trend rate of 7.5 percent in 2010, reduced by decrements to an ultimate rate of
5.5 percent in 2014 or later. The UML is being amortized based on the level dollar, 30-year open
period. The remaining amortization period at June 30, 2012 was 26 years.
NOTE 16
FUND BALANCES
As of June 30, 2012, fund balances are composed of the following:
General
Fund
Restricted:
Capital projects
Assigned:
Debt service
Future expenditures
Capital projects
Future benefits funding
ERC
Summer School
GW helping GW
Unassigned
Total Fund Balances
$
Capital
Projects
Fund
Capital
Reserve
Fund
$ 7,754,000
$ 5,610,039
Debt
Service
Fund
$
$ 13,364,039
691,994
691,994
2,099,139
4,500,000
1,140,337
19,212
5,974
515
6,321 ,094
$ 691,994
$ 281142,304
2,099,139
4,500,000
1,140,337
19,212
5,974
515
6,321,094
$1410861271
$ 7,754,000
$5,6101039
Total
Governmental
Funds
When an expenditure is incurred for purposes for which both restricted and unrestricted fund
balances are available, the District considers restricted funds to have been spent first. When an
expenditure is incurred for which committed, assigned or unassigned fund balances are
available, the District considers amounts to have been spent first out of committed funds, then
assigned funds and, finally, unassigned funds, as needed, unless the Board has provided
otherwise in its commitment or assignment actions.
NOTE 17
SUBSEQUENT EVENTS
On July 30, 2012, the District issued $9,250,000 of General Obligation Bonds for the purpose of
financing an ESCo (energy service company) project. The ESCo provides a broad range of
comprehensive energy solutions including designs and implementation of energy savings
projects and energy conservation.
- 44-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 17
SUBSEQUENT EVENTS (cont'd)
The District has evaluated all subsequent events through November 8, 2012 , the date the
financial statements were available to be issued.
- 45-
SINGLE AUDIT
Barbacane, Thornton & Company LLP
REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAl
STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
200 Springer Building
3411 Silverside Road
Wilmington, Delaware 19810
T 302.478.8940
F 302.468.4001
www.btcpa.com
November 8, 2012
To the Board of School Directors
Rose Tree Media School District
Media, Pennsylvania
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund and the aggregate remaining fund information of Rose Tree Media School District, Media,
Pennsylvania as of and for the year ended June 30, 2012, which collectively comprise the Rose Tree
Media School District's basic financial statements, and have issued our report thereon dated November 8,
2012.
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.
Internal Control Over Financial Reporting
Management of Rose Tree Media School District is responsible for establishing and maintaining effective
control over financial reporting. In planning and performing our audit, we considered Rose Tree Media
School District's internal control over financial reporting as a basis for designing our auditing procedures for
the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of Rose Tree Media School District's internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the District's internal control over
financial reporting .
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented , or detected and corrected, on a
timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not
identify any deficiencies in internal control over financial reporting that we consider to be material
weaknesses. as defined above.
-46-
BARBAO\NE
TI-IORNION
&COMPANY
CERT!FlED PUBLIC AC COUNTANTS
To the Board of School Directors
Rose Tree Media School District
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Rose Tree Media School District's financial
statements are free of material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and, accordingly, we do not express
such an opinion .
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
We noted a matter that we reported to management of Rose Tree Media School District in a separate letter
dated November 8, 2012.
This report is intended solely for the information and use of the Board of School Directors, management
and federal awarding agencies and pass-through entities; and is not intended to be and should not be
used by anyone other than these specified parties.
/J~~~~7
BARBACANE, TH;RNTON & COMPANY
l~
LLP
- 47 -
Barbacane, Thornton & Company LLP
REPORT ON COMPLIANCE
WITH REQUIREMENTS THAT COULD HAVE A
DIRECT AND MATERIAL EFFECT ON EACH
MAJOR PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE IN ACCORDANCE
WITH OMB CIRCULAR A-133
200 Springer Building
3411 Silverside Road
Wilmington, Delaware 19810
T 302.478.8940
F 302.468.4001
www.btcpa.com
November 8, 2012
To the Board of School Directors
Rose Tree Media School District
Media, Pennsylvania
Compliance
We have audited the compliance of Rose Tree Media School District, Media, Pennsylvania, with the types
of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could
have a direct and material effect on each of its major federal programs for the year ended June 30, 2012 .
Rose Tree Media School District's major federal programs are identified in the summary of auditors' results
section of the accompanying schedule of findings and recommendations. Compliance with the
requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is
the responsibility of Rose Tree Media School District's management. Our responsibility is to express an
opinion on Rose Tree Media School District's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, ':A.udits of
States, Local Governments, and Nonprofit Organizations." Those standards and OMB Circular A-133
require that we plan and perform the audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements referred to above that could have a direct
and material effect on a major federal program occurred. An audit includes examining, on a test basis,
evidence about Rose Tree Media School District's compliance with those requirements and performing
such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion . Our audit does not provide a legal determination on Rose
Tree Media School District's compliance with those requirements.
In our opinion, Rose Tree Media School District complied, in all material respects, with the requirements
referred to above that could have a direct and material effect on each of its major federal programs for
the year ended June 30, 2012 .
Internal Control Over Compliance
The management of Rose Tree Media School District, Media, Pennsylvania, is responsible for establishing
and maintaining effective internal control over compliance with requirements of laws, regulations,
contracts and grants applicable to federal programs. In planning and performing our audit, we
BARBAO\NE
TI-IORNfON
- 48 -
&COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
To the Board of School Directors
Rose Tree Media School District
considered Rose Tree Media School District's internal control over compliance with requirements that could
have a direct and material effec t on a major federal program in order to determine our auditing
procedures for the purpose of expressing our opinion on compliance and to test and report on internal
control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an
opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an
opinion on the effectiveness of Rose Tree Media School District's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies or materia l weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material weaknesses,
as defined above.
This report is intended solely for the information and use of the Board of School Directors, management
and federal awarding agencies and pass-through entities; and is not intended to be and should not be
used by anyone other than these specified parties.
;j~~~{_!,.f
BARBACANE,
TH~RNTON & COMPANY L;o--
LLP
-49-
062-1 0-0025
84.391
Continued on next page.
- 50-
1,843
1,843
TOTAL U.S. DEPARTMENT OF HEALTH & HUMAN SERVICES
1,028,435
557,449
8,063
549,386
549,386
1,843
190,409
747,858
288,953
105,724
105,724
8,063
84,685
84,685
1,843
734,965
8,063
559,180
549,386
470,986
2,876
106,594
106,594
361,516
12,031
84,367
265,118
349,485
U.S. Dept of Health & Human Services
Passed through PA Dept of Public Welfare
Medical Assistance Program
07/01 /11-06/30/12
07/01/09-06/30/11
07/01/11-06/30/12
07/01/10-06/30/11
07/01 /11-Q6/30/12
98,544
98,544
12,652
$
REVENUE
RECOGNIZED
1,273,089
97.036
062-12-0025
84.173
062-11-0025
062-12-0025
2,876
99,969
99,969
425,262
24,683
85,892
$ 85,892
07/01 /2011
ACCRUED
(DEFERRED)
REVENUE
Total U.S. Department of Education
I
I
ARRA -J.D.E.A.
Totaii.D.E.A. - ARRA Program Cluster
I
J.D.E.A.- Section 619
84.027
84.027
07/01/11-06/30/12
106,594
210,296
$ 170,259
230,320
400,579
84,685
549,386
634,071
I
I
140-12-9376
07/01111-09/30/12
07/01/09-Q9/30/11
$319 ,220
307,102
GRANT
AMOUNT
TOTAL
RECEIVED
FOR YEAR
Subgrant from U.S. Department of Education
Passed through Delaware Count~ Intermediate Unit
I.D.E.A.
I.D.E.A.
Total CFDA #84.027
84.410
020-12-0368
127-10-Q368
07/01/10-09/30/11
07/01/11-09/30/12
GRANT PERIOD
BEGINNING/
ENDING DATES
525,231
I
ARRA- Education Jobs Fund
84.367
84.389
013-11-0368
013-12-0368
PASSTHROUGH
GRANTOR'S
NUMBER
Total Passed through Pennsylvania Dept of Education
I
I
84.010
84.010
I
I
---
SOURCE
CODE
Title II -Improving Teacher Quality
Total CFDA #84.367
Total Title I Program Cluster
ARRA- Title I
Federal Grantor/Pass-Throuah Grantor Project Title
U.S. Department of Education
Passed throu11h Pennsylvania Department of Education
Title I -Grants to Local Education Agencies
Title 1- Grants to Local Education Agencies
Total CFDA #84.010
FEDERAL
CFDA
NUMBER
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND CERTAIN STATE GRANTS
FOR THE YEAR ENDED JUNE 30,2012
$
1,843
1,843
1,028,435
557,449
8,063
549,386
549,386
470,986
2,876
106,594
106,594
361,516
12,031
84,367
265,118
349,485
EXPENDITURES
$
44,299
44,299
2,876
6,625
6,625
34,798
34,798
34,798
06/30/2012
ACCRUED
(DEFERRED)
REVENUE
=
D = Direct Funding
t = Indirect Funding
S
State Share
Source Codes:
2,416
$ 305,245
16,292
$ 302,829
317,938
2,416
95
2,321
13,876
282,623
2,321
31,591
95
1,308
35,315
728
728
13,148
13,148
728
10,268
10,996
13,148
184,884
271,627
35,315
$ 1,592,870
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
73,595
$ 1,557,555
- 51 -
07/0 1/10-06/30/11
07/01 / 11 -06/30/ 12
07/0 1/ 10-06/30/ 11
07/01/11-06/30/12
07/01 /10-06/30/11
07/01/11-06/30/12
07/01/10-06/30/11
07/01 /11-06/30/12
N/A
ACCRUED
(DEFERRED)
REVEN UE
07/01/2011
TOTAL FEDERAL EXPENDITURES
T OTAL STATE EXPENDITURES
T OTAL FEDERAL AND STATE EXPENDITURES
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
GRANT
AMOUNT
TOTAL
RECEIVED
FOR YEAR
$ 305,245
N/A
N/A
N/A
N/A
10.553
10.553
10.555
10.555
10.555
GRANT PERIOD
BEGINNING/
ENDING DATES
$ 1,592,870
s
s
s
s
I
I
I
I
I
SOURCE
CODE
PASSTHROUGH
GRANTOR'S
NUMBER
TOTAL FEDERAL AWARDS AND CERTAIN STATE GRANTS
Total U.S. Department of Agriculture
State Matching Share- Lunch
State Matching Share- Lunch
State Matching Share- Breakfast
State Matching Share- Breakfast
Subtotal
Total Child Nutrition Cluster
Breakfast Program
Breakfast Program
Total CFDA# 10.553
Passed throuli!h Penns}:lvania Department of Education
National School Lunch Program
National School Lunch Program
Total CFDA# 10.555
Passed through Pennsylvania Department of Agriculture
Value of U.S.D.A. Donated Commodities
U.S. Department of Agriculture
Federal Grantor/Pass-T hrouli!h Grantor Project T itle
(cont'd)
FEDERAL
CFDA
NUMBER
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND CERTAIN STATE GRANTS
FOR THE YEAR ENDED JUNE 30, 2012
$
$
$ 1,335,424
38,879
$ 1,374,303
$
1,335,424
38,879
1,374,303
1,374,303
344,025
1,562
38,879
37,317
305.146
12,159
12,159
219,392
292,987
73,595
EXPENDIT URES
$ 1,374,303
344,025
1,562
38,879
37,317
305.146
12,159
12,159
219,392
292,987
73,595
REVENUE
RECOGNIZED
$
$
$
-
86,678
80,698
5,980
86,678
42,379
254
5,980
5,726
36.399
1,891
1,891
~508
34,508
ACCRUED
(DEFERRED)
REVENUE
06/30/2012
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND CERTAIN STATE GRANTS
NOTE A
SCOPE OF SCHEDULE
The Schedule of Expenditures of Federal Awards and Certain State Grants reflects federal
expenditures for all individual grants which were active during the fiscal year. Additionally, the
Schedule reflects expenditures for certain state grants.
NOTE B
BASIS OF ACCOUNTING
The District uses the modified accrual method of recording transactions except as noted for the
accounting of donated commodities in Note c. Revenues are recorded when measurable and
available. Expenditures are recorded when incurred.
NOTE C
NONMONETARY FEDERAL AWARDS - DONATED FOOD
The Commonwealth of Pennsylvania distributes federa l surplus food to institutions (schools,
hospitals and prisons) and to the needy. Expenditures reported in the Schedule of Expenditures
of Federal Awards and Certain State Grants under CFDA #1 0.555 Value of USDA Donated
Commodities represent surplus food consumed by the District during the 2011-2012 fisca l year.
NOTED
ACCESS PROGRAM
The ACCESS Program is a medic al assistance program that reimburses local educational
agencies for direct eligible health-related services provided to enrolled special needs students.
Reimbursements are federal source revenues but are classified as fee-for-service and are not
considered federal financial assistance. The amount of ACCESS funding recognized for the
year ended June 30, 2012 was $121 ,51 7.
-52-
SCHEDULE OF
FINDINGS AND RECOMMENDATIONS
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
PART A- SUMMARY OF AUDITORS' RESULTS
Financial statements
Type of auditors' report issued [unqualified, qualified, adverse or disclaimer):
Unqualified
Internal control over financial reporting:
• Material weakness(es) identified?
• Significant deflciency(ies) identified?
• Noncompliance material to financial
statements noted?
Yes
Yes
X
X
No
None reported
Yes
X
No
Yes
Yes
X
X
No
None reported
Federal Awards
Internal control over major programs:
• Material weakness(es) identified?
• Significant deficiency(ies) identified?
Type of auditors' report issued on compliance for major programs [unqualified, qualified, adverse or
disclaimer):
Unqualified
Any audit findings disclosed that are
required to be reported in accordance
with Section 51 O(a) of OMB Circular A-133?
Yes
X
No
Identification of major programs:
CFDA Number(s)
Name of Federal Program or Cluster
84.010 and 84.389
Title I Cluster and ARRA - Title I
Dollar threshold used to distinguish between
Type A and Type B programs :
$300,000
_X_ Yes
Auditee qualified as low-risk auditee?
-53-
___ No
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONT'D)
PART B- FINDINGS RELATED TO FINANCIAL STATEMENTS
STATUS OF PRIOR YEAR FINDINGS
None.
CURRENT YEAR FINDINGS AND RECOMMENDATIONS
None.
PART C- FINDINGS RELATED TO FEDERAL AWARDS
STATUS OF PRIOR YEAR FINDINGS
None.
CURRENT YEAR FINDINGS AND RECOMMENDATIONS
None.
- 54-