ROSE TREE MEDIA SCHOOL DISTRICT
MEDIA, PENNSYLVANIA
AUDIT REPORT
JUNE 30, 2010
ROSE TREE MEDIA SCHOOL DISTRICT
TABLE OF CONTENTS
PAGE
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 - 43
ROSE TREE MEDIA SCHOOL DISTRICT
TABLE OF CONTENTS
PAGE
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
44 - 45
Report on Compliance with Requirements Applicable to
Each Major Program and on Internal Control Over
Compliance in Accordance with OMB Circular A-133
46 - 47
Schedule of Expenditures of Federal Awards and Certain State Grants
48
Notes to Schedule of Expenditures of Federal Awards and Certain
State Grants
49
Schedule of Findings and Recommendations
50 - 51
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis (MD&A) - Unaudited
JUNE 30, 2010
Management's Discussion and Analysis ("MD&A") of the financial performance of Rose Tree Media
School District (the "District") provides an overall review of the District's financial activities for the fiscal
year ended June 30, 2010. The intent of the MD&A is to look at the District's financial performance as
a whole; readers also should review the 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 $4.7 million. The current year increase was
due to higher tax assessments, higher tax rates, the American Recovery and Reinvestment Act of 2009,
and expenses being less than anticipated. Program revenues accounted for $12.5 million, or 15.9
percent of total revenues of $78.6 million, and general revenues accounted for $66.1 million, or 84.1
percent.
The General Fund completed the fiscal year with a positive fund balance of $17.0 million, or 20.8
percent of the 2010-2011 $81.8 million operating budget. Revenues received were more than
budgeted, and expenditures were less than budgeted resulting in a fund balance increase of $2.5
million.
The instructional programs (including special education, vocational education, summer school,
homebound instruction, adjudicated programs and Delaware County Community College) cost $41.8
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 54.4 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 $23.0 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 $8.2 million for interest expenses, principal payments and transfer to the
capital account. The cost of the other financing uses was supported by 10.7 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 $206 per property in property tax relief for the 2009-2010 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, 2010
REPORTING THE DISTRICT AS A WHOLE
Statement of Net Assets and 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 $39.1 million at the close of the most recent fiscal year. In
the prior year, assets exceeded liabilities by $34.5 million.
A portion of the District’s total net assets (51.7 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 2010 to 2009 follows:
Statement of Net Assets
June 30, 2010 and 2009
Governmental Activities
2010
2009
Business-type Activities
2010
2009
Totals
2010
2009
ASSETS:
Current and other
Assets
Capital assets
$ 40,570,609
70,291,292
$ 39,914,119
68,453,008
$ 736,086
143,238
$ 767,047
167,023
$ 41,306,695
70,434,530
$ 40,681,166
68,620,031
TOTAL ASSETS
$110,861,901
$108,367,127
$ 879,324
$ 934,070
$111,741,225
$109,301,197
LIABILITIES AND
NET ASSETS:
Liabilities:
Current liabilities
Long-term liabilities
Total Liabilities
$ 10,560,995
62,024,208
72,585,203
$
$ 39,275
39,275
$ 36,196
36,196
$ 10,600,270
62,024,208
72,624,478
$ 7,741,224
67,102,372
74,843,596
7,705,028
67,102,372
74,807,400
-4-
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
Statement of Net Assets
June 30, 2010 and 2009
(continued)
Net Assets:
Invested in capital
assets, net of debt
Restricted for capital
projects
Unrestricted
Total Net Assets
TOTAL LIABILITIES
AND NET ASSETS
Governmental Activities
2010
2009
Business-type Activities
2010
2009
Totals
2010
2009
20,065,089
20,017,033
143,238
167,023
20,208,327
20,184,056
3,237,950
14,973,659
38,276,698
1,134,803
12,407,891
33,559,727
696,811
840,049
730,851
897,874
3,237,950
15,670,470
39,116,747
1,134,803
13,138,742
34,457,601
$110,861,901
$108,367,127
$ 879,324
$ 934,070
$111,741,225
$109,301,197
The District’s net assets restricted for capital projects increased due to a transfer of $2.8 million from
the general fund to the capital reserve fund for various improvements to capital assets.
Governmental Activities
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 activities.
Statement of Activities
Fiscal Years Ended June 30, 2010 and 2009
2010
2009
Total Cost
of Services
Net Cost
of Services
Total Cost
of Services
Net Cost
of Services
$ 44,429,447
$ (36,049,030)
$ 41,190,648
$ (35,360,353)
7,295,922
5,529,739
6,660,372
4,428,095
1,433,808
85,415
2,456,257
(6,959,007)
(5,351,731)
(6,435,241)
(2,982,979)
(1,336,242)
15,857
(2,279,981)
6,624,884
5,409,346
6,781,729
4,170,583
1,301,125
116,241
2,805,791
(6,310,073)
(5,245,822)
(6,539,392)
(2,752,182)
(1,208,126)
696
(2,538,287)
Total Governmental Activities
$ 72,319,055
$ (61,378,354)
$ 68,400,347
$ (59,953,539)
Business-type Activities:
Food service
$
1,619,670
$
(59,618)
$
1,422,485
$
64,712
Total Business-type Activities
$
1,619,670
$
(59,618)
$
1,422,485
$
64,712
PROGRAM EXPENSES
Governmental Activities:
Instruction
Support services:
Instructional student support
Administration
Maintenance
Pupil transportation
Student activities
Community services
Interest and fiscal charges
-5-
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
The increases in net cost of services for instruction are due to contract increases in salaries and
benefits for employees of the District.
Statement of Changes in Net Assets
Fiscal Years Ended June 30, 2010 and 2009
Governmental Activities
2010
2009
Business-type Activities
2010
2009
Totals
2010
2009
REVENUES
Program Revenues:
Charges for services
Operating grants
Total Program Revenues
$ 2,871,138
8,069,563
10,940,701
$ 1,290,218
7,156,590
8,446,808
$1,234,605
325,447
1,560,052
$1,202,848
284,349
1,487,197
$ 4,105,743
8,395,010
12,500,753
$ 2,493,066
7,440,939
9,934,005
General Revenues:
Property taxes
Other taxes
Grants and entitlements
Investment earnings
Miscellaneous
Total General Revenues
TOTAL REVENUES
60,270,643
1,235,194
4,012,085
397,658
179,745
66,095,325
77,036,026
58,524,723
1,294,447
4,282,502
1,815,670
161,717
66,079,059
74,525,867
1,793
1,793
1,561,845
10,276
10,276
1,497,473
60,270,643
1,235,194
4,012,085
399,451
179,745
66,097,118
78,597,871
58,524,723
1,294,447
4,282,502
1,825,946
161,717
66,089,335
76,023,340
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
44,429,447
41,190,648
-
-
44,429,447
41,190,648
7,295,922
5,529,739
6,660,372
4,428,095
1,433,808
85,415
2,456,257
72,319,055
6,624,884
5,409,346
6,781,729
4,170,583
1,301,125
116,241
2,805,791
68,400,347
1,619,670
1,619,670
1,422,485
1,422,485
7,295,922
5,529,739
6,660,372
4,428,095
1,433,808
85,415
2,456,257
1,619,670
73,938,725
6,624,884
5,409,346
6,781,729
4,170,583
1,301,125
116,241
2,805,791
1,422,485
69,822,832
CHANGE IN NET ASSETS
$ 4,716,971
$ 6,125,520
$ (57,825)
$ 4,659,146
$ 6,200,508
$
74,988
Property tax revenue is up $1.8 million due to growth in the District’s tax base, a tax rate increase and
the collection of delinquent taxes. The District received $1.6 million in PA Act I state property tax relief
which is reflected in grants and entitlements.
The District received American Recovery and Reinvestment Act of 2009 funds for the first time during
the 2009-2010 school year. Investment earnings decreased due to the economy and declined
investment rates. Instruction in program expenses increased due to salary and benefits as did
instructional staff support in support services.
-6-
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
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), Fund 22 (Capital Reserve
Fund), Funds 32 through 38 (Capital Projects funded with General Obligation Bond funds) and Fund 40
(Debt Service Fund). These funds are reported using the modified accrual accounting method, which
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
purposes and compliance with various grant provisions. The District’s three types of funds,
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 $34.2 million, which is above
last year’s total of $34.1 million. The schedule below indicates the fund balance and the total
change in fund balances as of June 30, 2010 and 2009.
Fund Balance
June 30, 2010
Fund Balance
June 30, 2009
Increase
(Decrease)
General Fund
Capital Reserve Fund (22)
Capital Projects Funds
Other Funds
$ 16,965,915
3,237,950
13,798,989
191,724
$ 14,491,702
1,134,803
18,478,486
-
$ 2,474,213
2,103,147
(4,679,497)
191,724
Total
$ 34,194,578
$ 34,104,991
$
-7-
89,587
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
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.
9%
14.3%
Taxes
Investment
earnings
Intergovernmental
0.4%
Other revenue
76.3%
The District’s general fund balance increase is due to many factors. The tables that follow assist in
illustrating the financial activities and balance of the general fund.
2010
2009
Dollar
Change
Percent
Change
General Fund Revenue:
Taxes
Investment earnings
Intergovernmental
Other revenue
$ 58,651,472
270,808
10,972,745
6,983,546
$ 57,582,639
846,328
10,823,037
4,256,242
$ 1,068,833
(575,520)
149,708
2,727,304
1.86%
-68.00%
1.38%
64.08%
Total
$ 76,878,571
$ 73,508,246
$ 3,370,325
4.58%
Real estate tax revenue increased $1.1 million due to an increase in millage (2.5 percent). Interest
earnings decreased due to lower interest rates. Intergovernmental revenues increased due to the
American Recovery and Reinvestment Act. Other grants such as Title II and the Accountability Block
Grant actually decreased. Other revenue increased due to an increase in delinquent taxes and an
increase in tuition and enrollment from the Elwyn program.
-8-
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
Other Funds
The Capital Reserve Fund (22) has an increase in the fund balance due to a transfer from the General
Fund of $2.1 million as a result of the savings from the refunding of the Series of 1999 and Series of
2002 general obligation bonds. The appropriation from the General Fund has met the two percent as
required by Board Policy #603. The Capital Reserve Fund was established for major capital
improvements, deferred maintenance projects and purchasing school buses.
The Capital Project Funds (32 through 38) had a decrease in fund balance due to the completion of
capital projects. The capital projects funds are used to keep the District’s facilities in optimal
operational condition to avoid more costly repairs in the future. There is a major renovation project for
the Springton Lake Middle School that will begin in the 2010-2011 school year.
Other Governmental Funds consist of the Debt Service Fund (40). 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 an decrease in
net assets of $58 thousand for the fiscal year. This was the first year the District contracted with a food
service management company. Interest earnings decreased due to declining interest rates.
Purchased professional and technical services increased with the transition to a food service
management company.
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
Dollar
Difference
1100
1200
1300
1400
1700
$ 28,749,782
11,412,847
860,141
1,428,960
762,415
43,214,145
$ 28,594,231
11,467,852
860,141
1,451,962
934,482
43,308,668
$ (155,551)
55,005
23,002
172,067
94,523
-9-
Percentage
Difference
-0.54%
0.48%
0.00%
1.58%
18.41%
19.93%
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
(continued)
Function
Code
Original
Budget
Final
Budget
Dollar
Difference
Percentage
Difference
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
2100
2200
2300
2400
2500
2600
2700
2800
2900
2,551,169
4,030,305
3,351,567
562,364
1,073,700
7,752,848
4,637,906
877,804
277,000
25,114,663
2,551,933
4,037,623
3,351,567
562,364
1,073,700
7,798,379
4,637,906
877,804
277,000
25,168,276
764
7,318
45,531
53,613
0.03%
0.18%
0.00%
0.00%
0.00%
0.58%
0.00%
0.00%
0.00%
0.80%
Noninstructional Services:
Student activities
Community services
Capital outlay
Total Noninstructional Services
3200
3300
4000
1,152,578
95,500
1,248,078
1,221,507
95,500
64,299
1,381,306
68,929
64,299
133,228
5.64%
0.00%
100.00%
9.65%
5100
5200
5900
8,381,336
626,089
500,000
9,507,425
5,944,972
2,826,089
455,000
9,226,061
(2,436,364)
2,200,000
(45,000)
(285,346)
-40.98%
77.85%
-9.89%
-3.05%
$ 79,084,311
$ 79,084,311
-
0.00%
Debt Service and Transfers:
Debt service/refund of
prior year receipts
Interfund transfers
Budgetary reserve
Total Debt Service and Transfers
TOTAL EXPENDITURES
$
Using spending variances in excess of $10,000 and using five percent as a spending tolerance, the
most significant changes in the District’s original vs. final budgeted expenditures were as follows:
Community college
Student activities
Capital outlay
Debt service
Transfers out
Function
Code
1700
3200
4000
5100
5200
$
$
$
$
$
Original
Budget
762,415
1,152,578
8,381,336
626,089
$
$
$
$
$
Final
Budget
934,482
1,221,507
64,299
5,944,970
2,826,089
Dollar
Difference
$ 172,067
$
68,929
$
64,299
$ (2,436,366)
$ 2,200,000
Percentage
Difference
8.41%
5.64%
100.00%
-40.98%
77.85%
The variance for the community college is the result of an account code change related to tuition
and debt service for the community college. The District was able to fund all programs through
unused budgeted dollars in other functions. Additional student participation caused an increase in
student activities. The capital outlay variance is due to the reclassification of a lease payment that
was previously coded to debt service. Debt service decreased due to the proceeds of refunding the
General Obligations Bond Series of 1999 and Series of 2002. Transfers out increased because the
savings from the bond refunding were transferred to the capital reserve fund. The use of budgetary
reserve was necessary for the unplanned purchase of a District maintenance vehicle which was
damaged during the winter storms of 2010.
- 10 -
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
As the graph below illustrates, the largest portions of General Fund expenditures are for salaries and
benefits. The District is an educational, service entity and as such is labor-intensive.
1%
11%
12%
Salaries
49%
Benefits
Purchased services
Supplies
Equipment
10%
Miscellaneous
Debt/transfers/prior
17%
2010
General Fund:
Salaries
Benefits
Purchased services
Supplies
Equipment
Miscellaneous
Debt/transfers/prior
TOTAL EXPENDITURES BY OBJECT
Increase
(Decrease)
2009
$
36,529,873
12,607,575
7,135,626
8,962,121
613,466
275,714
8,279,983
$
34,961,670
11,916,153
6,677,719
8,734,052
777,233
289,232
8,634,114
$
1,568,203
691,422
457,907
228,069
(163,767)
(13,518)
(354,131)
$
74,404,358
$
71,990,173
$
2,414,185
Expenditures increased $2.4 million, or 3.3 percent over the prior year. The increase was due primarily
to wages, benefits and purchased services.
CAPITAL ASSETS
At June 30, 2010, the District's governmental activities had $70,291,292 net of depreciation, invested
in a broad range of capital assets, including land, buildings and furniture and equipment.
Business-type activities owned $143,238 worth of net capital assets. These assets consist of movable
equipment that will be depreciated in future years.
- 11 -
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
2010
Land
Construction-in-progress
Land improvements
Buildings
Furniture and equipment
2009
$
6,250,968
4,448,867
1,393,653
52,033,141
6,307,901
$
4,621,316
4,235,760
1,409,659
52,107,774
6,245,522
$
70,434,530
$
68,620,031
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, 2009, the District had total outstanding debt of $65,680,000. Total debt outstanding as of
June 30, 2010 was $62,895,000.
Outstanding Debt
2010
General Obligation Notes/Bonds
- 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
- Bonds, Series of 2003
$
TOTAL
6,310,000
20,560,000
14,455,000
395,000
14,720,000
2,575,000
3,880,000
$ 62,895,000
2009
$
6,705,000
21,670,000
14,455,000
470,000
14,725,000
3,765,000
3,890,000
$ 65,680,000
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 $166.6 million. The District’s bonds payable total
as of June 30, 2010 is $62.9 million, which results in a remaining borrowing capacity of $103.7 million.
The District will begin construction in the 2010/2011 fiscal year on a $39.1 million renovation project for
the Springton Lake Middle School. This will require the District to borrow an additional $24.1 million in
the near future.
- 12 -
ROSE TREE MEDIA SCHOOL DISTRICT
Management's Discussion and Analysis - Unaudited (cont'd)
JUNE 30, 2010
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.
Current economic conditions have had a minimal impact on the District for the 2009/2010 fiscal year.
There was a decline in investment earnings from the prior year as a result of the downturn in the
economy. The District exceeded the interim, transfer and delinquent tax revenue budgets. Current
real estate tax collection was slightly below budget. While tax collections were favorable for the
2009/2010 fiscal year, numerous tax appeals have been filed for the 2010/2011 fiscal year.
The American Recovery and Reinvestment Act of 2009 was enacted in February of 2009. The District
received approximately $500,000 for the current fiscal year and will receive another $500,000 in the
2010/2011 fiscal year. These funds provide temporary relief for school districts and include IDEA, the
Individuals with Disabilities Act, Title I and Title II. They must be used for special education and school
improvement for Title I schools. The funding will not be available for appropriation in the 2011/2012
fiscal year.
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, (610) 627-6136.
- 13 -
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET ASSETS
JUNE 30, 2010
(With Summarized Comparative Data for June 30, 2009)
Totals
Governmental
Activities
Business-type
Activities
2010
2009
ASSETS:
Cash and cash equivalents
Investments
Taxes receivable
Due from other governments
Internal balance
Other receivables
Inventories
Prepaid expenses
Bond issuance costs
Land and improvements
Construction-in-progress
Buildings and improvements
Furniture and equipment
Accumulated depreciation
$ 20,648,873
14,987,000
1,855,484
938,542
13,433
1,728,540
700
398,037
8,579,692
4,448,867
92,808,220
28,347,023
(63,892,510)
$ 683,628
17,145
(13,433)
11,720
37,026
593,011
(449,773)
$ 21,332,501
14,987,000
1,855,484
955,687
1,740,260
37,026
700
398,037
8,579,692
4,448,867
92,808,220
28,940,034
(64,342,283)
$ 23,953,544
12,300,000
1,763,848
637,677
1,563,665
29,851
432,581
6,888,746
4,235,760
90,179,714
28,374,287
(61,058,476)
TOTAL ASSETS
$ 110,861,901
$ 879,324
$ 111,741,225
$ 109,301,197
$
$
$
$
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
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 amount on refunding
Accumulated compensated absences/
early retirement incentives
Other post-employment benefits
TOTAL LIABILITIES
NET ASSETS:
Invested in capital assets, net of related debt
Restricted for capital projects
Unrestricted
TOTAL NET ASSETS
TOTAL LIABILITIES AND NET ASSETS
2,323,757
1,002,218
631,333
697,922
244,003
2,983
36,292
-
2,326,740
1,002,218
667,625
697,922
244,003
1,057,797
1,462,974
964,887
744,930
500
5,180,000
198,171
(21,295)
-
-
5,180,000
198,171
(21,295)
-
2,785,000
198,171
(21,295)
62,517
304,886
-
304,886
485,743
57,715,000
1,481,951
(130,598)
-
2,514,757
443,098
72,585,203
39,275
2,514,757
443,098
72,624,478
62,895,000
1,576,709
(149,060)
2,553,220
226,503
74,843,596
20,065,089
3,237,950
14,973,659
38,276,698
143,238
696,811
840,049
20,208,327
3,237,950
15,670,470
39,116,747
20,184,056
1,134,803
13,138,742
34,457,601
$ 110,861,901
$ 879,324
$ 111,741,225
$ 109,301,197
The accompanying notes are an integral part of these financial statements.
- 14 -
57,715,000
1,481,951
(130,598)
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2010
(With Summarized Comparative Data for the Year Ended June 30, 2009)
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
BUSINESS-TYPE ACTIVITIES:
Food service
TOTAL BUSINESS-TYPE ACTIVITIES
TOTAL PRIMARY GOVERNMENT
Expenses
Charges for
Services
Program Revenues
Operating
Grants and
Contributions
$ 44,429,447
7,295,922
5,529,739
6,660,372
4,428,095
1,433,808
85,415
2,456,257
72,319,055
$ 2,716,097
56,633
98,408
2,871,138
$ 5,664,320
336,915
178,008
225,131
1,445,116
40,933
2,864
176,276
8,069,563
1,619,670
1,619,670
1,234,605
1,234,605
325,447
325,447
$ 73,938,725
$ 4,105,743
$ 8,395,010
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
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
The accompanying notes are an integral part of these financial statements
- 15 -
Net (Expense) Revenue and Changes in Net Assets
BusinessTotals
Governmental
type
Activities
Activities
2010
-
$ (36,049,030)
(6,959,007)
(5,351,731)
(6,435,241)
(2,982,979)
(1,336,242)
15,857
(2,279,981)
(61,378,354)
-
$
2009
-
$ (36,049,030)
(6,959,007)
(5,351,731)
(6,435,241)
(2,982,979)
(1,336,242)
15,857
(2,279,981)
(61,378,354)
$ (35,360,353)
(6,310,073)
(5,245,822)
(6,539,392)
(2,752,182)
(1,208,126)
696
(2,538,287)
(59,953,539)
-
(59,618)
(59,618)
(59,618)
(59,618)
(61,378,354)
(59,618)
(61,437,972)
(59,888,827)
64,712
64,712
60,270,643
1,235,194
-
60,270,643
1,235,194
58,524,723
1,294,447
4,012,085
397,658
179,745
66,095,325
1,793
1,793
4,012,085
399,451
179,745
66,097,118
4,282,502
1,825,946
161,717
66,089,335
4,716,971
(57,825)
4,659,146
6,200,508
33,559,727
897,874
34,457,601
28,257,093
$ 38,276,698
$ 840,049
$ 39,116,747
$ 34,457,601
ROSE TREE MEDIA SCHOOL DISTRICT
BALANCE SHEET - GOVERNMENTAL FUNDS
JUNE 30, 2010
(With Summarized Comparative Data for June 30, 2009)
General
Fund
Capital
Projects
Fund
Capital
Reserve
Fund
Other
Governmental
Funds
2010
2009
ASSETS
Cash and cash equivalents
Investments
Taxes receivable
Due from other funds
Due from other governments
Other receivables
Prepaid expenses
$ 12,867,415
4,000,000
1,855,484
13,433
938,542
1,728,540
700
$ 4,351,784
10,987,000
-
$ 3,237,950
-
$ 191,724
-
$ 20,648,873
14,987,000
1,855,484
13,433
938,542
1,728,540
700
$ 23,201,604
12,300,000
1,763,848
1,461,800
600,469
1,563,665
-
TOTAL ASSETS
$ 21,404,114
$ 15,338,784
$ 3,237,950
$ 191,724
$ 40,172,572
$ 40,891,386
$
783,962
2,417
1,002,218
628,916
1,715,800
304,886
4,438,199
$ 1,539,795
1,539,795
$
$
-
$ 2,323,757
2,417
1,002,218
628,916
1,715,800
304,886
5,977,994
$ 1,051,611
1,412,918
1,462,974
931,807
1,441,342
485,743
6,786,395
4,973,887
1,500,000
18,573
10,473,455
16,965,915
13,798,989
3,237,950
13,798,989
3,237,950
191,724
191,724
4,973,887
18,536,939
18,573
191,724
10,473,455
34,194,578
2,100,000
21,113,289
10,891,702
34,104,991
$ 21,404,114
$ 15,338,784
$ 3,237,950
$ 191,724
$ 40,172,572
$ 40,891,386
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
FUND BALANCES
Unreserved - designated for future year expenditures
Unreserved - designated for capital projects
Reserved for summer school
Reserved for debt service
Unreserved
TOTAL FUND BALANCES
TOTAL LIABILITIES AND FUND BALANCES
The accompanying notes are an integral part of these financial statements.
- 16 -
-
Totals
ROSE TREE MEDIA SCHOOL DISTRICT
RECONCILIATION OF BALANCE SHEET - GOVERNMENTAL FUNDS
TO STATEMENT OF NET ASSETS
JUNE 30, 2010
TOTAL GOVERNMENTAL FUND BALANCES
$ 34,194,578
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:
Land and improvements
Buildings and improvements
Furniture and equipment
Construction-in-progress
Accumulated depreciation
$ 8,579,692
92,808,220
28,347,023
4,448,867
(63,892,510)
70,291,292
(62,895,000)
(2,514,757)
(697,922)
(443,098)
(66,550,777)
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
Accumulated compensated absences
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.
(1,130,192)
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.
1,471,797
NET ASSETS OF GOVERNMENTAL ACTIVITIES
$ 38,276,698
The accompanying notes are an integral part of these financial statements.
- 17 -
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2010
(With Summarized Comparative Data for the Year Ended June 30, 2009)
Capital
Projects
Fund
General
Fund
REVENUES
Local sources
State sources
Federal sources
TOTAL REVENUES
EXPENDITURES
Current:
Instruction
Support services
Operation of noninstructional services
Capital outlays
Debt service
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Issuance of debt
Proceeds of bond refunding
Bond refunding payment
Premium on bond issuance
Refund of prior year revenues
Interfund transfers
Insurance refunds
Refund of prior year expenditures
TOTAL OTHER FINANCING SOURCES (USES)
NET CHANGES IN FUND BALANCES
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
$ 64,824,743
10,085,086
1,968,393
76,878,222
$
Capital
Reserve
Fund
123,783
123,783
$
2,905
2,905
41,784,315
23,038,779
1,306,960
64,299
5,330,017
71,524,370
137,839
4,468,101
4,605,940
9,384
34,399
682,064
725,847
5,353,852
(4,482,157)
(722,942)
(59,676)
(2,820,312)
349
(2,879,639)
Other
Governmental
Funds
$
Totals
2010
2009
161
161
$ 64,951,592
10,085,086
1,968,393
77,005,071
$ 63,033,271
10,514,256
885,548
74,433,075
-
41,793,699
23,211,017
1,306,960
5,214,464
5,330,017
76,856,157
38,734,576
23,689,652
1,230,453
5,080,058
7,738,169
76,472,908
161
148,914
(2,039,833)
(197,340)
(197,340)
2,826,089
2,826,089
191,563
191,563
(59,676)
349
(59,327)
28,375,000
(29,682,211)
1,396,079
(45,945)
90,693
133,616
2,474,213
(4,679,497)
2,103,147
191,724
89,587
(1,906,217)
14,491,702
18,478,486
1,134,803
-
34,104,991
36,011,208
$ 16,965,915
$ 13,798,989
$ 3,237,950
191,724
$ 34,194,578
$ 34,104,991
The accompanying notes are an integral part of these financial statements.
- 18 -
$
ROSE TREE MEDIA SCHOOL DISTRICT
RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS TO STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2010
NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS
$
89,587
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 ($5,743,157) exceeded depreciation expense
($3,904,873) in the period.
1,838,284
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.
30,955
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.
2,785,000
Governmental funds report issuance costs and bond discounts as expenditures and deferred
bond refunding option proceeds and bond premiums as revenue. 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.
104,269
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).
38,463
Other post-employment benefits include post-employment healthcare benefits and all post-employment 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).
(216,595)
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.
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
The accompanying notes are an integral part of these financial statements.
- 19 -
47,008
$
4,716,971
ROSE TREE MEDIA SCHOOL DISTRICT
BUDGETARY COMPARISON STATEMENT - GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2010
Budgeted Amounts
Original
Final
REVENUES
Local sources
State sources
Federal sources
TOTAL REVENUES
EXPENDITURES
Instruction:
Regular programs
Special programs
Vocational programs
Other instructional programs
Community college
Total Instruction
Support services:
Pupil personnel services
Instructional staff services
Administrative services
Pupil health
Business services
Operation and maintenance of plant services
Student transportation services
Data processing services
Other Support Services
Total Support Services
Operation of Noninstructional Activities:
Student activities
Community services
Total Operation of Noninstructional Services
Capital outlays
Debt service
TOTAL EXPENDITURES
Actual
(GAAP Basis)
Variance with
Final Budget
Positive
(Negative)
$64,731,137
10,402,803
1,443,590
76,577,530
$64,731,137
10,402,803
1,443,590
76,577,530
$64,824,743
10,085,086
1,968,393
76,878,222
$
93,606
(317,717)
524,803
300,692
28,749,782
11,412,847
860,141
1,428,960
762,415
43,214,145
28,594,231
11,467,852
860,141
1,451,962
934,482
43,308,668
27,093,123
11,467,852
836,896
1,451,962
934,482
41,784,315
1,501,108
23,245
1,524,353
2,551,169
4,030,305
3,351,567
562,364
1,073,700
7,752,848
4,637,906
877,804
277,000
25,114,663
2,551,933
4,037,623
3,351,567
562,364
1,073,700
7,798,379
4,637,906
877,804
277,000
25,168,276
2,342,766
3,956,990
3,262,787
561,213
984,284
6,718,280
4,147,473
825,058
239,928
23,038,779
209,167
80,633
88,780
1,151
89,416
1,080,099
490,433
52,746
37,072
2,129,497
1,152,578
95,500
1,248,078
8,381,336
77,958,222
1,221,507
95,500
1,317,007
64,299
5,944,970
75,803,220
1,221,507
85,453
1,306,960
64,299
5,330,017
71,524,370
10,047
10,047
614,953
4,278,850
774,310
5,353,852
4,579,542
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES
(1,380,692)
OTHER FINANCING SOURCES (USES)
Budgetary reserve
Refund of prior year revenues
Refund of prior year expenditures
Transfers out
TOTAL OTHER FINANCING SOURCES (USES)
(500,000)
(626,089)
(1,126,089)
(455,000)
(2,826,089)
(3,281,089)
(59,676)
349
(2,820,312)
(2,879,639)
NET CHANGE IN FUND BALANCE
(2,506,781)
(2,506,779)
2,474,213
4,980,992
4,191,055
4,191,058
14,491,702
10,300,644
$ 1,684,274
$ 1,684,279
$16,965,915
$15,281,636
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
The accompanying notes are an integral part of these financial statements.
- 20 -
455,000
59,676
349
5,777
520,802
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET ASSETS - PROPRIETARY FUND
JUNE 30, 2010
(With Comparative Data for June 30, 2009)
Major Enterprise Fund
Food Service Fund
2010
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
683,628
17,145
11,720
37,026
749,519
2009
$
593,011
(449,773)
143,238
TOTAL ASSETS
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES:
Accounts payable
Due to other funds
Deferred revenue
Total Current Liabilities
582,723
(415,700)
167,023
$
892,757
$
986,022
$
2,983
13,433
36,292
52,708
$
3,116
51,952
33,080
88,148
NET ASSETS:
Invested in capital assets, net of related debt
Unrestricted
Total Net Assets
143,238
696,811
840,049
TOTAL LIABILITIES AND NET ASSETS
$
892,757
The accompanying notes are an integral part of these financial statements.
- 21 -
751,940
37,208
29,851
818,999
167,023
730,851
897,874
$
986,022
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2010
(With Comparative Data for the Year Ended June 30, 2009)
Major Enterprise Fund
Food Service Fund
OPERATING REVENUES
Food service revenues
TOTAL OPERATING REVENUES
2010
2009
$ 1,234,605
1,234,605
$ 1,202,848
1,202,848
410,449
166,576
197,794
80,504
730,274
34,073
1,619,670
360,739
154,410
29,792
65,196
777,620
34,728
1,422,485
OPERATING EXPENSES
Salaries
Employee benefits
Purchased professional and technical services
Purchased property services
Supplies
Depreciation
TOTAL OPERATING EXPENSES
OPERATING LOSS
(385,065)
(219,637)
NONOPERATING REVENUES
Earnings on investments
State sources
Federal sources
TOTAL NONOPERATING REVENUES
1,793
63,871
261,576
327,240
10,276
61,262
223,087
294,625
CHANGE IN NET ASSETS
(57,825)
74,988
NET ASSETS, BEGINNING OF YEAR
897,874
822,886
NET ASSETS, END OF YEAR
$
840,049
The accompanying notes are an integral part of these financial statements.
- 22 -
$
897,874
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF CASH FLOWS - PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2010
(With Comparative Data for the Year Ended June 30, 2009)
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
2010
2009
$ 1,226,097
(955,199)
(615,544)
(344,646)
$ 1,206,722
(843,299)
(542,294)
(178,871)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
State sources
Federal sources
NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES
67,422
217,407
284,829
61,962
175,949
237,911
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Equipment acquisition
NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES
(10,288)
(10,288)
(12,617)
(12,617)
1,793
1,793
10,276
10,276
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(68,312)
56,699
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
751,940
695,241
CASH FLOWS FROM INVESTING ACTIVITIES:
Earnings on investments
NET CASH PROVIDED BY INVESTING ACTIVITIES
CASH AND CASH EQUIVALENTS, END OF YEAR
$
683,628
$
751,940
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
(133)
(38,519)
3,212
$ (344,646)
(33,905)
(27,145)
3,874
$ (178,871)
SUPPLEMENTAL DISCLOSURE:
NONCASH NONCAPITAL FINANCING ACTIVITY:
USDA donated commodities
$
$
$ (385,065)
The accompanying notes are an integral part of these financial statements.
- 23 -
$ (219,637)
34,073
60,681
34,728
44,204
(11,720)
(7,175)
19,010
60,681
44,204
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET ASSETS - FIDUCIARY FUNDS
JUNE 30, 2010
PrivatePurpose
Trust
Agency
Student
Activities
Escheat
Funds
ASSETS
Cash
Accounts receivable
Due from other funds
$
19,783
2,417
$ 116,389
94
-
$
1,246
TOTAL ASSETS
$
22,200
$ 116,483
$
1,246
$
819
819
$
$
1,246
1,246
LIABILITIES AND NET ASSETS
LIABILITIES:
Due to escheat funds
Other current liabilties
NET ASSETS:
Reserved for trust
TOTAL LIABILITIES AND NET ASSETS
$
427
116,056
116,483
21,381
-
22,200
$ 116,483
The accompanying notes are an integral part of these financial statements.
- 24 -
$
1,246
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF CHANGES IN NET ASSETS - FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2010
(With Comparative Data for the Year Ended June 30, 2009)
Private-Purpose Trust
2010
2009
ADDITIONS
Local contributions
$
TOTAL ADDITIONS
11,118
$
7,847
11,118
7,847
Fees paid and scholarships awarded
23,489
16,975
TOTAL DEDUCTIONS
23,489
16,975
(12,371)
(9,128)
33,752
42,880
DEDUCTIONS
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
$
21,381
The accompanying notes are an integral part of these financial statements.
- 25 -
$
33,752
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 evaluate component units
for possible inclusion as part of the District's reporting entity are financial accountability and the
nature and significance of the relationship. 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 brief 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 Funds and Capital Reserve Funds are used to account for the acquisition,
construction and renovation of major capital facilities and their related capital assets.
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
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.
-28-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
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 2009-2010 was 21.6251 mills ($21.63 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 $10,000 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 and bond discounts are reported as deferred charges and
amortized over the term of the related debt. Deferred amounts on refunding are recorded as a
decrease to debt payable and amortized over the life of the old debt or the life of the new debt,
whichever is shorter. 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 Equity
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 both restricted and unrestricted resources are
available for use, it is the District's policy to use restricted resources first and then unrestricted
resources as they are needed.
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, 2009, 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.
-31-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
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.
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, 2010, the carrying amount of the District's deposits was $21,468,673
and the bank balance was $56,936,577. Of the bank balance, $100,017 was covered by
federal depository insurance, and $136 was exposed to custodial credit risk because, in
accordance with Act 72 of the Commonwealth of Pennsylvania, it was uninsured and the
collateral held by the depository’s agent was not in the District’s name. The remaining 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.
-32-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 3
DEPOSITS AND INVESTMENTS (cont'd)
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, 2010, 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
$ 14,987,000
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, 2010, PSDLAF was rated as AAA by a nationally recognized
statistical rating organization.
Concentration Risk
The District places no limit on the amount it may invest in any one issuer.
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.
-33-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 5
CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2010 was as follows:
GOVERNMENTAL ACTIVITIES:
Capital assets not being depreciated:
Land
Construction-in-progress
Beginning
Balance
Increases
$ 4,621,316
4,235,760
$ 1,629,652
2,767,183
8,857,076
Ending
Balance
Decreases
2,554,076
$ 6,250,968
4,448,867
4,396,835
2,554,076
10,699,835
2,267,430
90,179,714
27,791,564
61,294
2,628,506
1,210,598
655,139
2,328,724
92,808,220
28,347,023
120,238,708
3,900,398
655,139
123,483,967
Less accumulated depreciation for:
Land improvements
Buildings and improvements
Furniture and equipment
857,771
38,071,940
21,713,065
77,300
2,703,139
1,124,434
655,139
935,071
40,775,079
22,182,360
Total accumulated depreciation
60,642,776
3,904,873
655,139
63,892,510
Total Capital Assets Being Depreciated, Net
59,595,932
(4,475)
-
59,591,457
GOVERNMENTAL ACTIVITIES ASSETS, NET
$68,453,004
$ 4,392,360
$ 2,554,076
$70,291,292
BUSINESS-TYPE ACTIVITIES:
Capital assets being depreciated:
Machinery and equipment
$
$
$
$
Total Capital Assets Not Being Depreciated
Capital assets being depreciated:
Land improvements
Buildings and improvements
Furniture and equipment
Total Capital Assets Being Depreciated
Less accumulated depreciation
BUSINESS-TYPE ACTIVITIES, NET
582,723
415,700
$
167,023
10,288
$
34,073
$
(23,785)
-
$
-
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
$ 2,773,701
532,001
31,194
81,631
267,961
218,385
Total Governmental Activities
$ 3,904,873
Business-type Activities
$
-34-
34,073
593,011
449,773
$
143,238
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 6
INTERNAL RECEIVABLES, PAYABLES AND TRANSFERS
The composition of interfund balances as of June 30, 2010 is as follows:
Amount
Due To
General Fund
$
13,433
Total
$
13,433
Due From
Amount
Food Service Fund
$
13,433
$
13,433
Interfund 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.
Interfund Transfers:
Transfer Out:
Capital Projects Fund
General Fund
Capital Projects Fund
Transfers In:
$
5,777
2,826,089
191,563
General Fund
Capital Reserve Fund
Debt Service Fund
$
5,777
2,826,089
191,563
Transfers represent funds set aside for the anticipation of future capital needs.
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, 2010:
Balance
July 1, 2009
Bonds payable
Bond premiums
Deferred amount on refunding
Capital leases payable
Accumulated compensated
absences/early retirement
Incentive
$ 65,680,000
1,774,880
(170,355)
62,517
TOTALS
$ 70,386,005
Reductions
Balance
June 30, 2010
-
$ 2,785,000
94,758
(18,462)
62,517
$ 62,895,000
1,680,122
(151,893)
-
266,423
485,743
2,819,643
266,423
$ 3,409,556
$ 67,242,872
Additions
$
3,038,963
$
Payments of long-term debt are expected to be funded by the general fund.
-35-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 7
GENERAL LONG-TERM DEBT (cont'd)
General Obligation Bonds
Series of 2003, maturing through May 1, 2016, bearing interest
ranging from 1.0% to 3.5%, interest payable semi-annually on
May 1 and November 1.
$ 3,880,000
Series of 2004, maturing through February 15, 2012, bearing
interest at 5.3%, interest payable semi-annually on February
15 and August 15.
2,575,000
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.
14,720,000
Series of 2007A, maturing through January 25, 2017, bearing
interest at a variable rate never to exceed 15%
395,000
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, 2017, bearing
interest ranging from 2.75% to 4%, interest payable semiannually on February 15 and August 15.
20,560,000
Series of 2009AA, maturing through February 15, 2018, bearing
interest ranging from 2.5% to 5%, interest payable semiannually on February 15 and August 15.
TOTAL
6,310,000
$62,895,000
Presented below is a summary of debt service to maturity by years:
Year Ending June 30,
Principal
Maturities
Interest
Maturities
2011
2012
2013
2014
2015
2016-2020
2021-2022
$ 5,180,000
5,390,000
5,615,000
5,830,000
5,950,000
27,040,000
7,890,000
$ 2,660,923
2,448,553
2,227,205
2,014,220
1,823,280
5,157,977
418,500
$ 7,840,923
7,838,553
7,842,205
7,844,220
7,773,280
32,197,977
8,308,500
$ 62,895,000
$ 16,750,658
$ 79,645,658
-36-
Total
Maturities
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 8
PENSION PLAN
Plan Description
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 17108-0125; or by accessing its website at
http:/www.psers.state.pa.
us/publications/cafr/index.htm.
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, 2010, the rate of employer contribution was 4.78 percent of covered
payroll. The District’s contributions to PSERS for the years ended June 30, 2008, 2009 and 2010
were $2,358,057, $1,660,227 and $1,747,740, 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,
2011
2012
$ 104,327
74,535
Total
$ 178,862
Rental expense for the year ended June 30, 2010 was $106,127.
-37-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 10
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 ("DCCCA") and the Delaware County Vocational Technical School Authority ("DCVTSA") 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
DCVTSA
DCCCA
2011
2012
2013
2014
2015
2016-2033
Total
Less: Interest requirements
$
267,975
252,467
236,713
243,845
244,064
2,679,483
3,924,547
(1,227,937)
$
35,970
35,862
35,721
107,553
(5,061)
Outstanding rental payments
$ 2,696,610
$
102,492
-38-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 11
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 School 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
healthcare premiums for a limited number of years.
As of June 30, 2010, the District had four ERIP plans in effect. The number of participants and the
present value of those benefits as of June 30, 2010 are summarized below:
ERIP
Began
July 1, 1997
July 1, 2006
July 1, 2007
July 1, 2008
Participants
Total
2
22
22
2
$
71,162
429,000
679,110
15,000
$ 1,194,272
Healthcare
Premium
$
71,162
429,000
679,110
15,000
$ 1,194,272
During the year ended June 30, 2010, the cost of these benefits was $304,685.
NOTE 12
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.
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.
-39-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 12
COMMITMENTS AND CONTINGENCIES (cont'd)
Capital Improvement Commitments
As of June 30, 2010, the District was in the process of several capital projects. Construction
commitments completed to date are as follows:
Contract
Amount
Completed
6/30/2010
Commitment
$ 2,253,314
$ 1,641,844
$
6,145
27,027
13,524
6,145
13,503
73,411
21,249
52,162
51,900
167,666
1,485
54,130
50,415
113,536
82,161
2,870
79,291
106,058
63,990
41,452
21,076
64,606
42,914
20,800
1,125
19,675
7,000
3,150
3,850
7,200
60,855
85,475
547,224
55,000
1,130,216
13,647,000
4,974,000
6,392,000
2,083,000
1,139
21,133
17,449
34,474
14,023
260,416
1,250,827
274,754
78,300
34,830
6,061
39,722
68,026
512,750
40,977
869,800
12,396,173
4,699,246
6,313,700
2,048,170
$31,841,442
$ 3,789,250
$28,052,192
Project
Springton Lake Middle School
Project
Rose Tree Elementary School
Flooring - 2 ramps
Roofing and Chimney
Media Elementary School
Intercom
Penncrest High School
HVAC
Intercom
Smedley Tract
Field Stabilization
Glenwood Elementary School
Siding and Roofing
Intercom
Indian Lane Elementary School
HVAC
Education Center
HVAC Improvements
Springton Lake Middle School Project
Acton Mobile Storage Containers
Moving and Storage
Asbestos Monitoring
Asbestos Abatement
Construction Testing
Professional Services
General Contractor
Electrical Contractor
Mechanical Contractor
Plumbing Contractor
611,470
In addition, the District has incurred costs in the amount of $659,617 for other projects that were
not under a formal construction commitment as of June 30, 2010.
- 40 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 13
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 2009-2010 year. Settlement amounts have not exceeded
insurance coverage for the current year or the three prior years.
NOTE 14
POST-EMPLOYMENT HEALTHCARE PLAN
Plan Description
Effective for the 2008-2009 fiscal year, the District has implemented 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 2010, plan members receiving benefits contributed
$310,491, 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
accordance 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
- 41 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 14
POST-EMPLOYMENT HEALTHCARE PLAN (cont’d)
amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30
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
Annual OPEB cost (expense)
Contributions made
$ 530,798
10,193
(13,905)
527,086
(310,491)
Increase in net OPEB obligation
216,595
Net OPEB obligation - beginning of year
226,503
Net OPEB obligation - end of year
$ 443,098
This amount represents the cost of medical expenses for retirees.
Funded Status and Funding Progress
As of January 1, 2008, the most recent actuarial valuation date, the plan was 0.00 percent
funded. The actuarial accrued liability for benefits was $4,066,104, and the actuarial value of
assets was $0, resulting in an unfunded actuarial accrued liability ("UAAL") of $4,066,104. The
covered payroll (annual payroll of active employees covered by the plan) was $30,779,036, and
the ratio of the UAAL to the covered payroll was 13.21 percent.
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.
- 42 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 14
POST-EMPLOYMENT HEALTHCARE PLAN (cont’d)
In the January 1, 2008 actuarial valuation, the entry age actuarial cost method was used. The
actuarial assumptions included a 4.00 percent investment rate of return and an annual
healthcare cost trend rate of 12.0 percent in 2008, reduced by decrements to an ultimate rate of
five percent in 2022 or later. The UAAL is being amortized based on the level dollar, 30-year open
period. The remaining amortization period at June 30, 2010 was 28 years.
NOTE 15
SUBSEQUENT EVENTS
On October 29, 2010, the District issued $14,850,000 of General Obligation Bonds for the purpose
of financing renovations to the Springton Lake Middle School and $3,790,000 for the purpose of
refunding outstanding Bond Series of 2003.
The Organization has evaluated all subsequent events through January 6, 2011, the date the
financial statements were available to be issued.
- 43 -
SINGLE AUDIT
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND CERTAIN STATE GRANTS
FOR THE YEAR ENDED JUNE 30, 2010
FEDERAL GRANTOR/
PROJECT TITLE
U.S. DEPARTMENT OF EDUCATION
Passed through Delaware County I.U.
IDEA
IDEA
ARRA - IDEA
Total Passed through Delaware County I.U.
Passed through PA Department of Education
Title I - Improving Basic Programs
Title I - Improving Basic Programs
Academic Achievement Award
Academic Achievement Award
Title II - Improving Teacher Quality
Title II - Improving Teacher Quality
Drug-free Schools
ARRA - Title I
ARRA - SFSF
Total Passed through PA Dept of Education
SOURCE
CODE
FEDERAL
CFDA
NUMBER
PASS THROUGH
GRANTOR'S
NUMBER
GRANT PERIOD
BEGINNING /
ENDING DATES
GRANT
AMOUNT
I
I
I
84.027
84.027
84.391
062-09-0025
062-10-0025
062-10-0025
07/01/08-06/30/09
07/01/09-06/30/10
07/01/09-06/30/11
$ 576,768
566,960
734,955
I
I
I
I
I
I
I
I
I
84.010
84.010
84.010
84.010
84.367
84.367
84.186
84.389
84.394
013-09-0368
013-10-0368
077-09-0368
077-10-0368
020-09-0368
020-10-0368
100-09-0368
127-10-0368
126-10-0368
07/01/08-09/30/09
07/01/09-09/30/10
07/01/08-09/30/09
07/01/09-09/30/10
07/01/08-09/30/09
07/01/09-09/30/10
07/01/09-09/30/10
07/01/09-06/30/10
05/15/09-09/30/10
208,312
375,496
1,000
1,800
126,997
130,216
8,190
210,845
320,837
Total U.S. Department of Education
U.S. DEPARTMENT OF AGRICULTURE
Passed through PA Department of Agriculture
Value of USDA Donated Commodities
Passed through PA Department of Education
National School Lunch Program
National School Lunch Program
Breakfast Program
Breakfast Program
State Matching Share - Lunch
State Matching Share - Lunch
State Matching Share - Breakfast
State Matching Share - Breakfast
Total U.S. Department of Agriculture
$
52,811
309,940
495,640
858,391
68,602
200,265
500
21,166
112,854
8,190
99,221
213,891
724,689
1,583,080
ACCRUED
(DEFERRED)
REVENUE AT
07/01/09
$
52,811
52,811
1,251
(500)
13,754
14,505
67,316
$
566,960
516,293
1,083,253
$
566,960
516,293
1,083,253
$
257,020
20,653
277,673
67,351
242,691
1,000
1,800
7,412
127,446
8,190
94,061
320,837
870,788
1,954,041
1,954,041
60,681
60,681
(13,820)
192,390
8,505
38,232
1,061
300,869
13,676
688
2,695
87
3,326
2,254,910
$ 441,603
N/A
07/01/09-06/30/10
N/A
74,238
I
I
I
I
S
S
S
S
10.555
10.555
10.553
10.553
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
07/01/08-06/30/09
07/01/09-06/30/10
07/01/08-06/30/09
07/01/09-06/30/10
07/01/08-06/30/09
07/01/09-06/30/10
07/01/08-06/30/09
07/01/09-06/30/10
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
29,121
178,714
1,751
7,817
6,128
35,537
209
974
334,489
29,121
1,751
6,128
209
36,946
192,390
8,505
38,232
1,061
300,869
$ 1,917,569
$ 104,262
$ 2,254,910
- 48 -
EXPENDITURES
ACCRUED
(DEFERRED)
REVENUE AT
06/30/10
67,351
242,691
1,000
1,800
7,412
127,446
8,190
94,061
320,837
870,788
10.555
Source Codes:
(263)
REVENUE
RECOGNIZED
I
TOTAL FEDERAL AWARDS AND CERTAIN STATE GRANTS
D - Direct Funding
I - Indirect Funding
S - State Funding
TOTAL
RECEIVED
FOR YEAR
$
42,426
1,800
14,592
(5,160)
106,946
160,604
438,277
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 federal 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 #10.550 Value of USDA Donated
Commodities represent surplus food consumed by the District during the 2009-2010 fiscal year.
NOTE D
ACCESS PROGRAM
The ACCESS Program is a medical 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, 2010 was $14,352.
- 49 -
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 deficiency(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 510(a) of OMB Circular A-133?
Yes
X
No
Identification of major programs:
CFDA Number(s)
84.010 and 84.389
84.027 and 84.391
84.394
Name of Federal Program or Cluster
Title I Cluster and ARRA - Title I
I.D.E.A. and ARRA - I.D.E.A.
ARRA - Fiscal Stabilization Fund - Basic Education
Dollar threshold used to distinguish between
Type A and Type B programs:
$300,000
Auditee qualified as low-risk auditee?
X
- 50 -
Yes
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.
- 51 -