RT01~
ROSE TREE MEDIA SCHOOL DISTRICT
MEDIA, PENNSYLVANIA
AUDIT REPORT
JUNE 30, 2014
ROSE TREE MEDIA SCHOOL DISTRICT
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT
1-3
MANAGEMENT'S DISCUSSION AND ANALYSIS
4- 14
BASIC FINANCIAL STATEMENTS
Entity-wide Financial Statements:
- Statement of Net Position
15
- Statement of Activities
16
Fund Financial Statements:
- Balance Sheet - Governmental Funds
17
- Reconciliation of Balance Sheet - Governmental Funds
to Statement of Net Position
18
- Statement of Revenues. Expenditures. and Changes in
Fund Balances - Governmental Funds
19
- Reconciliation of Statement of Revenues. Expenditures,
and Changes in Fund Balances - Governmental Funds
to Statement of Activities
20
- Budgetary Comparison Statement - General Fund
21
- Statements of Net Position - Proprietary Fund
22
- Statements of Revenues, Expenses. and Changes in Fund
Net Position- Proprietary Fund
23
- Statements of Cash Flows - Proprietary Fund
24
- Statement of Net Position - Fiduciary Funds
25
- Statements of Changes in Net Position - Fiduciary Fund
26
NOTES TO FINANCIAL STATEMENTS
27-45
Barbacane, Thornton & Company LLP
INDEPENDENT AUDITOR'S REPORT
200 Springer Building
34 1 1 Silversidc Road
Wilmington, Delaware 19810
T 302.4 78 .8940
F 302.468.4001
www.btcpa.com
November 11. 2014
Board of School Directors
Rose Tree Media School District
Media, Pennsylvania
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of Rose Tree Media School
District ("the District"), Media, Pennsylvania, as of and for the year ended June 30, 2014, and the related
notes to the financial statements, which collectively comprise the School District's basic financial
statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the District's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
- l -
BARBAO\NE
TI-IORNIDN
&CDMPANY
CERTIFi t D PUBLIC ACCOUNTANTS
Board of School Directors
Rose Tree Media School District
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major fund,
and the aggregate remaining fund information of the Rose Tree Media School District, Media,
Pennsylvania, as of June 30, 2014, and the respective changes in financial position, and, where
applicable, cash flows thereof, and the respective budgetary comparison for the general fund for the year
then ended in accordance with accounting principles generally accepted in the United States of
America .
Report on Summarized Comparative Information
We have previously audited the District's 2013 financial statements, and we expressed unmodified opinions
on the respective financial statements of the governmental activities, the business-type activities, each
major fund , and the aggregate remaining fund information in our report dated November 22, 2013. In our
opinion, the summarized comparative information presented herein as of and for the year ended June 30,
2013 is consistent, in all material respects, with the audited financial statements from which it has been
derived.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 4 through 14 be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board , who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise Rose Tree Media School District's basic financial statements. The schedule of expenditures of
federal awards is presented for purposes of additional analysis as requited by U.S. Office of Management
and Budget Circular A- 133, "Audits of States, Local Governments, and Non-Profit Organizations," and is not
a required part of the basic financial statements. The schedule of expenditures of federal awards is the
responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
-2-
Board of School Directors
Rose Tree Media School District
procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the basic financial statements or to the basic financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted
in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly
stated in all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards , we have also issued our report dated November 11,
2014, on our consideration of the Rose Tree Media School District's internal control over financial reporting
and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering the District's internal
control over financial reporting and compliance.
/j~~~a-r
BARBACANE,
THO~NTON & COMPANY Ll~
LLP
- 3-
ROSE TREE MEDIA SCHOOl DISTRICT
MANAGEMENT'S DISCUSSION AND ANAlYSIS (MD&A) - UNAUDITED
JUNE 30, 2014
Management's Discussion and Analysis ("MD&A") of Rose Tree Media School District's financial
performance provides an overall review of the District's financial activities for the fiscal year ended
June 30, 2014. The intent of the MD&A is to look at the District's financial performance as a whole;
readers should also review the transmittal letter, notes to the basic financial statements, and financial
statements to enhance their understanding of the District's financial performance.
FINANCIAL HIGHLIGHTS
The District's total net position increased in the amount of $3.1 million on an entity-wide basis. The
increase is partially the result of the completion of various capital projects. The largest project was the
Energy saving Company, ESCO, project. The project resulted in energy efficiencies and savings
throughout the District.
Revenue for the current year increased at the entity-wide level. This was due to an increase of 1.5
percent in the millage rate, an increase in delinquent taxes, and an increase in state revenue for the
50 percent subsidy reimbursement of retirement costs. The retirement rate increased from 12.36
percent in 2013 to 16.93 percent in 2014. The District also received unanticipated revenue through
rebates and reimbursements. Program revenues for the governmental activities accounted for $11 .1
million, or 13.6 percent, of total revenues of $81.7 million, and general revenues accounted for $70.6
million, or 86.4 percent. Pennsylvania's Special Session Act 1 of 2006 provides property tax relief tor
homestead and farmstead owners through gaming revenue. Approved homestead/farmstead
property owners received approximately $211 in property tax relief per property for the 2013-2014
fiscal year. The District received approximately $1.6 million dollars from state sources to distribute tax
relief to approved property owners.
The General Fund completed the fiscal year with a positive assigned fund balance of $7.8 million for
future benefits funding and future expenditures and $4.0 million in unassigned fund balance. Both
totals combined equate to 13.5 percent of the 2014-2015$87.3 million operating budget. A portion
of fund balance was used to balance the budget against revenues which resulted in a decrease in
fund balance of approximately $2.1 million.
The Instructional programs (including special education, vocational education, summer school,
homebound instruction, adjudicated programs, and Delaware County Community College) cost
$43.8 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 53.6 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 $25.4 million
for salaries, benefits, supplies, utilities, diesel fuel and gasoline, the insurance program, and
equipment. The cost of the support programs was supported by 31 .0 percent of total revenue.
-4-
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENTS DISCUSSION AND ANALYSIS - UNAUDITED (CONTD)
JUNE 30, 2014
The operation of noninstructional services programs (including student activities, athletics, and support
for public libraries) cost $1 .5 million for salaries, supplemental contracts, dues, fees for officials,
supplies, and equipment. The cost of the noninstructional services programs was supported by 1.8
percent of total revenue.
The other expenditures and financing uses (including debt service, refund of prior years' revenue, and
capital funds transfer) cost $13.2 million for interest and principal payments and for a transfer to the
capital account. The cost of the other financing uses was supported by 16.1 percent of total revenue.
REPORTING THE DISTRICT AS A WHOLE
Statement of Net Position and Statement of Activities
The statement of net position 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 deferred outflows
and liabilities and deferred inflows 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 position and changes in the net position during the fiscal
year. The change in net position 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 position may serve over time as a useful indicator of a government's financial position. In the
case of the District, assets and deferred outflows of resources exceeded liabilities by $54.4 million at
the close of the most recent fiscal year. In the prior year, assets and deferred outflows of resources
exceeded liabilities by $51 .3 million.
A portion of the District's total net position (67 .9 percent) reflects its net investment in capital assets.
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 2014 to 2013 follows:
Governmental Activities
2014
ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
Assets:
Current and other assets
Capital assets
Total Assets
Business-tlee Activities
2014
2013
$ 33,344,758 $ 32,599,096
111,489,301
109,058,777
144,834,059
141 ,657,873
- 5-
$
756,650
168,918
925,568
2013
$
Totals
2014
802,970 $ 34,101,408
187,130
111 ,658,219
990,110
145,759,627
2013
$ 33,402,066
109,245,907
142,647;973
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED (CONrD)
JUNE 30, 2014
Governmental Activities
2014
Deferred outflows of resources:
Deferred amounts on bond
Refunding
Total Deferred Outflows of
Resources
TOTAL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
LIABILITIES AND NET POSITION
Liabilities:
Current liabilities
Long-term liabilities
Total Liabilities
Net Position:
Net investment in capital assets
Unrestricted
Total Net Position
TOTAL LIABILITIES AND NET
POSITION
Business-!xpe Activities
2013
2014
2013
Totals
2014
2013
112,794
128,175
112,794
128,175
112,794
128,175
11 2,794
128,175
$144,946,853
$141 ,786,048
$
925,568
$
990,100
$145,872,421
$142,776,148
$ 13,723,230
77,504,259
91 ,227,489
$ 14,436,534
76,779,581
91,216,115
$
197,937
$
220,872
$ 14,657,406
76,779,581
91,436,987
36,816,682
16,902,682
53,719,364
34,606,821
15,963,112
50,569,933
$144,946,853
$141,786,048
$
197,937
220,872
$ 13,921,167
77,504,259
91,425,426
168,918
558,713
727,631
187,130
582,098
769,228
36,985,600
17,461 ,395
54,446,995
34,793,951
16,545,210
51 ,339,161
990,1 00 $145,872,421
$142,776,148
925,568
$
The District's net position, net investment in capital assets increased $2.2 million due to the substantial
completion of the District Wide Energy Savings Projects.
The statement of activities shows the cost of program services, the charges for services, and grants
offsetting those services. The table below reflects the cost of program services and the net cost of
those services after taking into account the program revenues for the governmental and businesstype activities.
2014
PROGRAM EXPENSES
Governmental Activities:
Instruction
Support services:
Instructional student support
Administration
Maintenance
Pupil transportation
Student activities
Community services
Interest and fiscal charges
2013
Total Cost
of Services
Net Cost
of Services
Total Cost
of Services
Net Cost
of Services
$ 48,388,463
$ (41 ,406,772)
$ 45,412,747
$ (37,746,515)
6,981,731
6,512 ,536
7,105,781
5,011,447
1,518,065
115,897
2,880,084
(6,002,325)
(6,166,887)
(6,717,703)
(3,663,933)
(1 ,323,546)
(17,925)
(2,152,944}
7,251,215
6,419,317
6,125,391
4,390,347
1,531 ,629
88,924
3,797,162
(6,707,637)
(6,145,142)
(5,813,239)
(3,034,609)
(1 ,355,019)
(720)
(3,118,291}
Total Governmental Activities
$ 78,514,004
$
~67,452,035}
$ 75,016,732
$ (63,921 '172}
Business-type Activities:
Food service
$
1,716,616
$
(41 ,667}
$ 1,640,601
$
(32,531}
Total Business-type Activities
$
1,716,616
$
~41 ,667}
$ 1,640,601
$
(32,531}
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ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED (CONT'D)
JUNE 30, 2014
In total. Governmental Activities total cost of services increased by $3.5 million over the prior year.
Revenue also increased due to an increase in transfer taxes for several large real estate property
transfers. This resulted in a decrease in net cost of services.
statement of Changes In Net Position
Fiscal Years Ended June 30, 2014 and 2013
Governmental Activities
2014
2013
REVENUES
Program Revenues:
Charges for services
Operating grants
Total Program Revenues
General Revenues:
Property taxes
Other taxes
Grants and entitlements
Investment earnings
Miscellaneous
Total General Revenues
TOTAL REVENUES
EXPENSES
Program Expenses:
Instruction
Support services:
Instructional staff support
Administration
Maintenance
Pupil transportation
Student activities
Community services
Interest and fiscal charges
Food service
TOTAL EXPENSES
CHANGE IN NET POSITION
$ 2,020,577
9,041,392
11,061 ,969
$ 2,978,982
8,116,578
11,095,560
64,256,469
1,780,135
4,348,218
64,676
151,968
70,601,466
81,663,435
63,422,960
1,367,037
4,287,600
90,976
448,733
69,617,306
80,712,866
48,388,463
Business-type Activities
2014
2013
$1,283,321
391,628
1,674,949
$1 ,245,166
362,904
1,608,070
Totals
2014
2013
$ 3,303,898 $ 4,224,148
9,433,020
12,736,918
8,479,482
12,703,630
64,256,469
1,780,135
4,348,218
64,746
151 ,968
70,601 ,536
83,338,454
63,422,960
1,367,037
4,287,600
91,060
448,733
69,617,390
82,321,020
45,412,747
48,388,463
45,412,747
6,981,731
6,512,536
7,105,781
5,011,447
1,518,065
115,897
2,880,084
7,251,216
6,419,317
6,125,391
4,390,347
1,531 ,628
88,924
3,797,162
78,514,004
75,016,732
1,716,616
1,716,616
6,981,731
6,512,536
7,105,781
5,011 ,447
1,518,065
115,897
2,880,084
1,716,616
80,230,620
7,251,216
6,419,317
6,125,391
4,390,347
1,531,628
88,924
3,797,162
1,640,601
76,657,333
$ 3,149,431
$ 5,696,134
$ (41,597)
$ (32,477) $ 3,107,834
$ 5,663,687
70
84
70
1,675,019
84
1,608,154
1,640,601
1,640,601
Property tax revenue is up $800 thousand due to a 1.5 percent increase in the millage rate. The
increase in other taxes is due to an increase in transfer taxes for several large real estate property
transfers. Interest earnings decreased from the previous year based on the current economic
environment's decline in investment interest rates. Miscellaneous revenue decreased due to fewer
refunds. Instructional program, maintenance, and pupil transportation expenses increased due to
increased benefit costs. Interest and fiscal charges decreased due to the refunding of the Series A of
2004 bond.
- 7-
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALVSIS - UNAUDITED (CONTD)
JUNE 30, 2014
Reporting the District's Most Significant Funds
Governmental Funds - Most of the District's activities are reported in governmental funds, which focus
on how money flows into and out of those funds and the balances left at year end available for
spending in future periods. These funds include Fund 10 (General Fund), Funds 32 through 39
(Capital Projects funded with General Obligation Bond funds and General Fund transfers) and Fund 40
(Debt Service Fund). These funds are reported using the modified accrual accounting method, which
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 position 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 position and changes in fiduciary net position. 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 $25.7 million, which is an
increase over last year's total of $23.8 million. The decrease in the General Fund was expected due
to the use of fund balance to balance the budget. The Capital Projects and Capital Reserve Fund
balances increased due to the issuance of debt for various capital projects throughout the District
and a transfer to the Capital Reserve Fund for capital projects. The schedule below indicates the fund
balance and the total change in fund balances as of June 30, 2014 and 2013.
Fund Balance
June 30, 2014
Fund Balance
June 30, 2013
General Fund
Capital Projects Funds
Capital Reserve Fund
Other Funds
$ 11,802,092
6,646,639
6 ,559,408
692,132
$ 13,888 ,642
5 ,455,960
3,741,040
692,063
$
(2,086,550)
1 '190,679
2,818,368
69
Total
$ 25,700,271
$ 23,777,705
$
1,922,566
-8-
Increase
(Decrease)
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED (CONT'D)
JUNE 30, 2014
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 .
Other revenue
7%
Investment earnings
0%
The table that follows helps illustrate the financial activities and balance of the General Fund.
General Fund Revenue:
Taxes
Investment earnings
Intergovernmental
Other revenue
Total
2014
2013
Dollar
Change
Percent
Change
$ 62 ,772,278
$ 61 ,635,462
$ 1,136,816
50,413
13,389,610
5,594,369
62,924
11 ,814,899
7,019,792
(12,511)
1,574,711
(1 ,425,423)
1.84%
-19.88%
13.33%
-20.31%
$ 81,786,670
$ 80,533,077
$ 1,253,593
-22.20%
Real estate tax revenue increased $1.1 million due to a 1.5 percent increase in the millage rate and
collection of interim taxes.
Investment earnings decreased due to market conditions.
Intergovernmental revenue increased due to the increase in retirement reimbursement.
The
retirement rate increased from 12.36 percent to 16.93 percent. The District is reimbursed 50 percent
of retirement expense from the state, which resulted in increased revenue. Other revenue decreased
due to reductions in the collection of delinquent taxes, refunds of prior years, and tuitions.
- 9-
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENTS DISCUSSION AND ANALYSIS - UNAUDITED (CONT'D)
JUNE 30, 2014
Other Funds
The Capital Project Funds (33 through 39) had an increase in fund balance due to the issuance of
debt for the ESCO project throughout the District. The capital projects funds are used to keep the
District's facilities in optimal operational condition to avoid more costly repairs in the future. The District
has substantial completion of the ESCO project which resulted in energy efficiencies and cost savings.
The Capital Reserve Fund increased due to the need for future capital projects. The District continues
to transfers funds from the General Fund to the Capital Reserve Fund in accordance with Board Policy
#603. 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 in the District is the Food Service program. This program had a
decrease in net position of $42 thousand for the fiscal year. The District purchased equipment that
was necessary for the Food Service program.
General Fund Budget Information
The District keeps its books and prepares its financial reports on a modified accrual basis. Major
accrual items are payroll taxes and pension fund contributions payable, loans receivable from other
funds, and revenues receivable from other governmental units. The District's financial statements are
audited annually by a firm of independent certified public accountants, as required by
Commonwealth law. The District budgets and expends funds according to procedures mandated by
the Pennsylvania Department of Education. An annual operating budget is prepared by the
Superintendent and Director of Management Services and submitted to the Board of School Directors
for approval prior to the beginning of the fiscal year on July 1 each year. The most significant
budgeted fund is the General Fund.
Spending Review
The final budget for expenditures reflects required Board-approved budgetary transfers in function
categories due to spending patterns.
Instructional Services:
Regular programs
Special programs
Vocational programs
Other instructional programs
Community college
Total Instructional Services
Function
Code
Original
Budget
Final
Budget
Dollar
Difference
1100
1200
1300
1400
1700
$ 30,817,780
$ 30,385,551
$ (432 ,229)
10,701,129
616,461
1,552,161
937,911
44,625,442
11,138,991
614,461
1,547,661
937,911
44,624,575
437,862
(2,000)
(4,500)
- 10-
{867}
Percentage
Difference
-1 .40%
4.09%
-0.32%
-0.29%
0.00%
0.00%
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS- UNAUDITED (CONT'D)
JUNE 30, 2014
(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
2,730,543
4,600,305
4,132,382
649,042
1,105,497
7,236,745
5,030,487
995,834
172,897
26,653,732
2,705,641
4,542,895
4,121,002
669,042
1,104,289
7,247,433
5,030,488
969,514
202,897
26,593,201
(24,902)
(57,410)
(11 ,380)
20,000
(1 ,208)
10,688
1
(26,320)
30,000
(60,531)
-0.91%
-1.25%
-0.28%
3.08%
-0.11%
0.15%
0.00%
-2.64%
17.35%
-0.23%
Noninstructional Services:
Student activities
Community services
Total Noninstructional Services
3200
3300
1,418,421
170,000
1,588,821
1,409,819
160,400
1,570,219
(8,602)
{10,000}
(18,602)
-0.61%
-5.87%
-1 .17%
5100
5200
5900
8,763,727
600,000
250,000
9,61 3,727
8,843,727
600,000
250,000
9,693,727
80,000
0.91 %
0.00%
0.00%
0.83%
$ 82,481 ,722
$ 82,481,722
Debt Service and Transfers:
Debt service/refund of
prior year receipts
lnterfund transfers
Budgetary reserve
Total Debt Service and Transfers
TOTAL EXPENDITURES
80,000
$
0.00%
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:
Function
Code
Other Support Services
Community Services
2900
3300
Original
Budget
172,897
170,400
Final
Budget
202,897
160,400
Dollar
Difference
30,000
(10,000)
Percentage
Difference
17.35%
-5.87%
The variance for the other support services is due to an increase in Delaware County Intermediate Unit
costs. The variance for community services is due to a reduction in community service programs.
As the graph on the next page 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.
- 11 -
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED (CONT'D)
JUNE 30, 2014
Miscellaneous
General Fund:
Salaries
Benefits
Purchased services
Supplies
Equipment
Miscellaneous
Debt/transfers/prior
TOTAL EXPENDITURES BY OBJECT
Increase
{Decrease}
2013
2014
$
37,193,773
17,674,502
6,458,990
8,481,836
621,791
254,276
13,188,052
$
37,624,111
15,378,723
6,136,756
7,810,598
574,393
252,376
12,953,749
$
(430,338)
2,295,779
322,234
671 ,238
47,398
1,900
234,303
$
83,873,220
$
80,730,706
$
3,142,514
Expenditures increased $3.1 million or 3.89 percent over the prior year. The increase was partially
due to an increase in benefits and the transfer to the Capital Reserve Fund per board policy #603.
The retirement rate increased from 12.36 percent in 2013 to 16.93 percent in 2014. The District is
mandated to fund the retirement program for its employees. Debt increased due to the issuance of
the Series of 2013 B Bond for the ESCO Project.
- 12-
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENfS DISCUSSION AND ANALYSIS - UNAUDITED (CONrD)
JUNE 30, 2014
CAPITAL ASSETS
At June 30, 2014, the District's governmental activities had $111,489,301, net of depreciation,
invested in a broad range of capital assets, including land, buildings, and furniture and equipment.
Business-type activities owned $168,918 worth of net capital assets. These assets consist of movable
equipment that will be depreciated in future years.
2014
Land
Construction-in-progress
Land improvements
Buildings
Furniture and equipment
$
6,253,838
1,656,532
2,101 ,973
92,848,270
8,797,606
$
111,658,219
2013
$
6 ,253,838
11,678,603
2 ,048,242
81,675,992
7,589,232
$ 109,245,907
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, 2013, the District had total outstanding debt of $78,765,000. Total debt outstanding as of
June 30, 2014 was $78,240,000.
Outstanding Debt
2014
2013
General Obligation Notes/Bonds
-
Bond Series B of 2013
Bond Series A of 20 13
Bond Series 201 2
Bonds Series 2011
Bond Series AA of 20 10
Bonds Series A of 201 0
Bonds, Series AA of 2009
Bonds, Series A of 2009
Bonds, Series B of 2007
Bonds, Series A of 2007
Bonds, Series A of 2004
$
TOTAL
$
- 13 -
5,710,000
14,395,000
9,240,000
8,285,000
3,775,000
14,505,000
3,125,000
4,685,000
14,455,000
65,000
$
78,240,000
$
$9,245,000
8,290,000
3,780,000
14,595,000
3,955,000
9,585,000
14,455,000
155,000
14,715,000
78,765,000
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED (CONTD)
JUNE 30, 2014
ECONOMIC FACTORS EXPECTED TO HAVE A SIGNIFICANT EFFECT ON FUTURE OPERATIONS
The District's general obligation bond rating is a Standard & Poor's AA/Stable. Standards cited that the
AA/Stoble 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 $84.4 million. The District's bonds payable total
as of June 30, 2014 is $78.2 million.
Rose Tree Media School District is listed as a beneficiary in the amount of $240 thousand on a life
insurance policy that was provided to a former Superintendent.
The real estate market is a major factor in the economic environment. While the District's assessment
value has shown increases for the past two years, the economy continues to be a concern for the
School District. The Granite Run Mall, which is the District's largest taxpayer has filed a tax appeal,
which resulted in a reduction in tax revenue. The new property owner has proposed major
renovations that will take place over the next several years. Those renovations should increase the
assessment value in the future. The District has maintained a stable tax base and has maintained an
AA/Stable Standard and Poor's bond rating. The District continues to perform well academically as
well as being attractive to homeowners. Investment earnings are down as a result of the current
economic environment. The District took steps to plan for the significant increase in the Pennsylvania
School Employees' Retirement System by assigning a portion of fund balance for a portion of future
increases. The District has completed an energy savings project on facilities throughout the District,
which will improve energy efficiency and provide cost savings. In 201 4, the District will replace one
third of its buses with CNG buses. This will provide savings for the District as well as provide a healthier
and cleaner environment for students, staff members, and members of the community. The District
has been awarded grants to help offset the costs of the CNG vehicles. The District continues to
improve efficiencies and reduce expenditures to maintain current programs.
CONTACnNG 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 oversees. 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.
- 14-
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2014
(With Summarized Comparative Data for June 30, 2013)
Governmental
Activities
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
ASSETS:
Cash and cash equivalents
Investments
Taxes receivable
Due from other governments
Prepaid expenses
Internal balance
Other receivables
Inventories
Land and improvements
Construction-in-progress
Buildings and improvements
Furniture and equipment
Accumulated depreciation
$
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
Deferred amounts on bond refunding
TOTAL DEFERRED OUTFLOWS
OF RESOURCES
TOTAL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
LIABILITIES AND NET POSITION:
LIABILITIES
Accounts payable
Accrued salaries and benefits
Retainage payable
Other liabilities
Accrued interest
Unearned revenue
Long-term liabilities
Portion due or payable within one year:
Bonds payable in future years, net
Capital lease payable
Accumulated compensated absences/
early retirement incentives
Portion due or payable after one year:
Bonds payable in future years, net
Capital lease payable
Accumulated compensated absences/
early retirement incentives
Other post-employment benefits
TOTAL LIABILITIES
NET POSITION
Net investment in capital assets
Unrestricted
TOTAL NET POSITION
TOTAL LIABILITIES AND NET POSITION
2,507,875
26,427,027
1,717,803
2,113,263
9,600
34,950
534,240
Business-type
Activities
$
726,629
Totals
2014
$
15,852
(34,950)
19,609
29,510
3,234,504
26,427,027
1,717,803
2,129,115
9,600
2013
$
7,746,772
21,033,144
1,972,963
1,722,327
3,783
9,701,113
1,656,532
146,006,469
31,556,476
(77 ,431 ,289)
383,366
(214,448)
553,849
29,510
9,701,113
1,656,532
146,006,469
31,939,841
(77 ,645, 736)
144,834,059
925,568
145,759,627
142,647,973
112,794
112,794
128,175
112,794
112,794
128175
901 ,467
21,610
9,529,414
11,678,603
130,472,644
30,385,040
(72,819,794)
~ 144,946,853
$
925,568
~ 145,872,421
~ 142,776,148
1,584,853
2,927,531
545,172
628,119
499,172
308,812
$
170,963
$
$
$
26,974
1,755,816
2,927,531
545,172
628,119
499,172
335,786
2,933,816
2,383,451
653,193
657,656
896,366
511,786
6,275,463
779,183
6,275,463
779,183
6,083,246
248,904
174,925
174,925
288,988
73,550,542
826,864
73,550,542
826,864
73,370,273
333,668
2,221,578
905,275
91,227,489
197,937
2,221 ,578
905,275
91,425,426
2,231,502
844 138
91,436,987
36,816,682
16,902,682
53,719,364
168,918
558 713
727,631
36,985,600
17,461 ,395
54,446,995
34,793,951
16,545,210
51,339,161
925,568
$145,872,421
$142,776,148
$144,946,853
$
The accompanying notes are an integral part of these financial statements.
- 15-
$3.303.898
$ 80.230.620
$9.433.020
391,628
391,628
$5,170,841
979,406
345,649
388,078
1,347,514
76,306
6,458
727140
9,041,392
$
$
- 16-
NET POSITION, END OF YEAR
NET POSITION, BEGINNING OF YEAR
CHANGE IN NET POSITION
-
-
-
-
-
-
-
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
1,283,321
1,283,321
2,020,577
118,213
91 ,514
$1,810,850
1,716,616
1,716,616
$ 48,388,463
6,981 ,731
6,512,536
7,105,781
5,011 ,447
1,518,065
115,897
2,880,084
78,514,004
Charges for
Services
The accompanying notes are an integral part of these financial statements.
TOTAL PRIMARY GOVERNMENT
BUSINESS-TYPE ACTIVITIES:
Food service
TOTAL BUSINESS-TYPE ACTIVITIES
GOVERNMENTAL ACTIVITIES:
Instruction
Instructional student support
Administrative and financial support services
Operation and maintenance of plant services
Pupil transportation
Student activities
Community services
Interest on long-term debt
TOTAL GOVERNMENTAL ACTIVITIES
Expenses
Program Revenues
Operating
Grants and
Contributions
(41 ,597)
769,228
$ 727,631
3,149,431
50, 569,933
_$_9~,719,364
70
70
-
-
4,348,218
64,676
151,968
70,601,466
64,256,469
1,780,135
(41,667)
~452,035)
-
-
-
-
{41,667)
{41,667)
$
-
$(41,406,772)
(6,002,325)
(6,166,887)
(6,717,703)
(3,663,933)
(1,323,546)
(17,925)
{2,152,944)
{67,452,035)
$ 54,446,995
51,339,161
3,107,834
4 ,348,218
64,746
151,968
70,601,536
64,256,469
1,780,135
(67,493,702)
{41 ,667)
{41,667)
$(41,406,772)
(6,002,325)
(6,166,887)
(6,717,703)
(3,663,933)
(1,323,546)
(17,925)
{2,1 52,944)
{67,452,035)
$ 51,339.161
45,675,474
5,663,687
4,287,600
91 ,060
448 733
69,617,390
63,422,960
1,367,037
(63, 953,703)
(32,531)
(32,531)
$(37,746,515)
(6,707,637)
(6,145,142)
(5,813,239)
(3,034,609)
(1,355,01 9)
(720)
(3,118,291 )
(63,921,1 72)
Net (ExEense) Revenue and Changes in Net Position
BusinessGovernmental
type
Totals
Activities
Activities
2014
2013
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2014
(With Summarized Comparative Data for the Year Ended June 30, 2013)
$
$
$
$
$
692,132
692,132
692,132
692,132
2,507,875
26,427,027
1,717,803
34,950
2,113,263
9,600
534,240
$
9,600
13,206,047
692,132
3,502,652
1,200,000
3,018,902
19,212
19,058
1,475,075
1,475,075
2,927,531
628,119
308,812
174,925
6,169,412
1,584,853
545,172
$ 33,344,758
$
2014
$ 18,418,541
- 17-
7,606,956
6,627,129
692,132
$ 33,344,758
6,330
4,005,164
25,700,271
6,559,408
6,559,408
67,721
67,721
6,627,129
327,129
6,300,000
Debt
Service
Fund
6,330
4,005,164
11,802,092
6,646,639
$
$
$
Capital
Reserve
Fund
6,874
14,300
$
960,317
415,145
545,172
6,646,639
The accompanying notes are an integral part of these financial statements.
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES
$
7,606,956
406,956
7,200,000
Capital
Projects
Fund
6,874
14,300
3,502,652
1,200,000
3,018,902
19,212
19,058
9,600
1.475,075
1,475,075
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues- delinquent taxes
TOTAL DEFERRED INFLOWS OF RESOURCES
FUND BALANCES
Nonspendable
Restricted for capital projects
Assigned for debt service
Assigned for future expenditures
Assigned for capital projects
Assigned for future benefits funding
Assigned for SYA
Assigned for SLMS
Assigned for Scoreboard
Assigned for PCHS Science
Assigned - Summer School
Assigned - GW helping GW
Assigned for Save Our Steinway
Unassigned
TOTAL FUND BALANCES
2,927,531
628,119
308,812
174,925
5,141,374
1,101 ,987
$
$ 18.418,541
$
$
1,081 ,658
12,927,027
1,717,803
34,950
2,113,263
9,600
534,240
$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
LIABILITIES:
Accounts payable
Retainage payable
Due to other funds
Accrued salaries and benefits
Other current liabilities
Unearned revenues
Accumulated compensated absences
TOTAL LIABILITIES
TOTAL ASSETS
ASSETS
Cash and cash equivalents
Investments
Taxes receivable
Due from other funds
Due from other governments
Prepaid expenditures
Other receivables
General
Fund
ROSE TREE MEDIA SCHOOL DISTRICT
BALANCE SHEET-GOVERNMENTAL FUNDS
JUNE 30, 2014
(With Summarized Comparative Data for June 30, 2013)
Totals
6,956,063
21 ,033,144
1,972,963
31 ,744
1,709,917
3,783
892,086
6,298,781
23,777,705
3,783
9,197,000
692,063
1,673,879
2,500,000
3,362,658
19,212
16,498
10,223
1,740
1,573
295
1,613,373
1,613,373
2,742,481
653,193
604
2,383,451
628,1 19
51 1,786
288,988
7,208,622
$ 32,599,700
$
$ 32,599,700
$
2013
ROSE TREE MEDIA SCHOOL DISTRICT
RECONCILIATION OF BALANCE SHEET- GOVERNMENTAL FUNDS
TO STATEMENT OF NET POSITION
JUNE 30,2014
TOTAL GOVERNMENTAL FUND BALANCES
$ 25,700,271
Amounts reported for governmental activities in the statement of net position
are different because:
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds. These assets consist of:
Land and improvements
Buildings and improvements
Furniture and equipment
Construction-in-progress
Accumulated depreciation
$ 9,701,113
146,006,469
31,556,476
1,656,532
(77,431 ,289)
111 ,489,301
(79,826,005)
(1,606,047)
(2,221,578)
(499,172)
(905,275)
(85,058,077)
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, net
Capital lease payable in future years
Accumulated compensated absences/early retirement incentives
Accrued interest
Other post-employment benefits
Refunded debt resulted in deferred outflows of resources which will be
amortized over the life of new debt but do not represent current rights.
Some of the District's revenues will be collected after year end but are not
available soon enough to pay for the current period's expenditures and,
therefore, are unavailable in the funds.
NET POSITION OF GOVERNMENTAL ACTIVITIES
112,794
1,475,075
$53.719,364
The accompanying notes are an integral part of these financial statements.
- 18 -
-
6,754,711
8,841 ,768
79,526,935
2,259,735
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
13,888,642
FUND BALANCES, BEGINNING OF YEAR
_j_1J ,8J)l.c092
- 19 -
$ 6,646,639
The accompanying notes are an integral part of these financial statements.
FUND BALANCES, END OF YEAR
1,190,679
(2,086,550)
NET CHANGES IN FUND BALANCES
5,455,960
7,935,046
-
{4,346,285}
(4,346,285)
-
20,285,000
1,868,229
1,222,949
(15,441 ,132)
(6,744,367)
OTHER FINANCING SOURCES (USES)
Proceeds of bond
Proceeds of extended term financing
Premium on bond issuance
Bond refunding payment
Bond discount
lnterfund transfers
TOTAL OTHER FINANCING SOURCES (USES)
-
-
1,095,288
114,460
1,532,567
-
$ 6.559.408
3,741 ,040
2,818,368
4,346,285
4,346,285
-
-
-
(1 ,527,917)
-
64,532
322,819
-
4,650
4,650
10,344
$
-
10,344
6,690,179
$
Capital
Reserve
Fund
-
43,845,597
25,354,388
1,485,182
$68,397,060
12,054,529
1,335,081
81,786,670
Capital
Projects
Fund
EXPENDITURES
Current:
Instruction
Support services
Operation of noninstructional services
Capital outlays
Debt service
TOTAL EXPENDITURES
REVENUES
Local sources
State sources
Federal sources
TOTAL REVENUES
General
Fund
$
$
-
692.132
692,063
69
-
-
-
69
-
69
69
Debt
Service
Fund
$25,700,271
23,777,705
1,922,566
7,935,046
20,285,000
1,868,229
1,222,949
(15,441 ,132)
(6,012,480)
43,845,597
25,741 ,739
1,485,182
7,785,467
8,956,228
87,814,213
$68,412,123
12,054,529
1,335,081
81,801 ,733
201 4
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES· GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2014
(With Summarized Comparative Data for the Year Ended June 30, 2013)
Totals
$23.777.705
28,142,304
(4,364,599)
9,341,032
(238,593)
9,250,000
329,625
(13,705,631)
42,890,055
25,076,893
1,414,043
15,649,763
9,404,365
94,435,119
$68,325,310
11 ,285,136
1,119,042
80,729,488
2013
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, 2014
NET CHANGE IN FUND BALANCES- GOVERNMENTAL FUNDS
$
1,922,566
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 ($8,356,036) exceeded depreciation
expense ($5,925,512) in the period.
2.430,524
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 and are recorded
as deferred inflows of resources. Unavailable revenues decreased by this amount this year.
(138,298)
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 position. This amount is the net effect of these differences.
525,000
Governmental funds report bond discounts as other financing uses and bond premiums as other
financing sources. However, these amounts are reported on the statement of net position as
deferred charges and credits and are amortized over the life of the debt.
(897,486)
Governmental funds report deferred bond refunding option proceeds as other financing sources.
However, these amounts are reported on the statement of net position as deferred outflows of
resources and amortized over the life of the refunding debt.
(15,381)
The incurrence of a capital lease agreement provides current financial resources to
governmental funds, while the repayment of the principal of capital lease consumes the
current financial resources of governmental funds. Neither transaction, however, has any
effect on net position. This amount is the net effect of these differences.
(1 ,023,475)
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).
9,924
Other post-employment benefits include post-employment healthcare benefits and all postemployment benefits provided separately from a pension plan, excluding benefits defined as
termination offers and benefits. The annual cost represents the employer's contribution to the
plan which includes the implicit rate subsidy. In the governmental funds, however, expenditures
for these items are measured by the amount of financial resources used (essentially, the
amount actually paid).
(61 ,137)
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.
397,194
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES
$
The accompanying notes are an integral part of these financial statements.
- 20-
3,149,431
ROSE TREE MEDIA SCHOOL DISTRICT
BUDGETARY COMPARISON STATEMENT -GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2014
Budgeted Amounts
Final
Original
REVENUES
Local sources
State sources
Federal sources
TOTAL REVENUES
Actual
{GMP Basis)
Variance with
Final Budget
Positive
{Negative)
$ 67,268,429
12,342,814
1,1961600
80,807,843
$ 67,268,429
12,342,814
1,196,600
80,807,843
$ 68,397,060
12,054,529
1,335,081
81 ,786,670
30,817,780
10,701 '129
616,461
1,552,161
937,911
44,625,442
30,385,551
11,138,991
614,461
1,547,661
937,911
44,624,575
29,707,403
11 '103,529
592,647
1,504,107
937,911
43,845,597
778,978
2,730,543
4,600,305
4,132,382
649,042
1,105,497
7,236,745
5,030,487
995,834
172,897
26,653,732
2,705,641
4,542,895
4,121,002
669,Q42
1,104,289
7,247,433
5,030,488
969,514
202,897
26,593,201
2,441,533
4,323,593
3,966,812
665,663
1,101,393
6,963,916
4,757,139
935,351
198,988
25,354,388
264,108
219,302
154,190
3,379
2,896
283,517
273,349
34,163
3,909
1,238,813
1,418,421
170,400
1,588,821
8,763,727
81,631,722
1,409,819
160,400
1p0,219
8,843,727
81 ,631,722
1,369,285
115,897
1,485,182
8,841 ,768
79,526,935
40,534
44,503
85,037
1,959
2,104,787
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
Debt service
TOTAL EXPENDITURES
$
1,128,631
(288,285)
138 481
9781827
678,148
35,462
21 ,814
43,554
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES
{823,879)
{823,879)
2,259,735
3,083,614
OTHER FINANCING USES
Budgetary reserve
Transfers out
TOTAL OTHER FINANCING USES
(250,000)
{600,000}
{850,000)
(250,000)
{600,000)
{850,000)
{4,346,285}
{4,346,285)
250,000
{3,746,285)
{3,496,285)
NET CHANGE IN FUND BALANCE
(1 ,673,879)
(1 ,673,879)
(2,086,550)
(412,671)
FUND BALANCE, BEGINNING OF YEAR
13,888,642
13,888,642
13,888,642
12,214,763
~ 11,802,092
FUND BALANCE, END OF YEAR
~
12,214,763
~
The accompanying notes are an integral part of these financial statements.
- 21 -
~
{412,671}
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENTS OF NET POSITION- PROPRIETARY FUND
JUNE 30, 2014
(With Comparative Data for June 30, 2013)
Major Enterprise Fund
Food Service Fund
2014
ASSETS
CURRENT ASSETS :
Cash and cash equivalents
Due from other governments
Accounts receivable
Inventories
Total Current Assets
$
PROPERTY AND EQUIPMENT:
Net furniture and equipment
TOTAL ASSETS
LIABILITIES AND NET POSITION
CURRENT LIABILITIES:
Accounts payable
Due to other funds
Unearned revenue
Total Current Liabilities
790,709
12,410
9,381
21 ,610
834,110
187,130
$
960,518
$ 1,021,240
$
170,963
34,950
26,974
232,887
$
$
191,335
31 '140
29,537
252,012
168,918
558,713
727,631
187,130
582,098
769,228
960,518
$ 11021 1240
The accompanying notes are an integral part of these financial statements.
-22-
$
168,918
NET POSITION :
Net investment in capital assets
Unrestricted
Total Net Position
TOTAL LIABILITIES AND NET POSITION
726,629
15,852
19,609
29,510
791,600
2013
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION·
PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2014
(With Comparative Data for the Year Ended June 30, 2013)
Major Enterprise Fund
Food Service Fund
OPERATING REVENUES
Food service revenues
TOTAL OPERATING REVENUES
2014
2013
$ 1,283,321
$ 1,245,166
1,283,321
1,245,166
384,141
200,292
277,647
74,564
741,449
38,523
1,716,616
385,410
173,922
272,423
70,418
706,005
32,423
1,640,601
OPERATING EXPENSES
Salaries
Employee benefits
Purchased professional and technical services
Purchased property services
Supplies
Depreciation
TOTAL OPERATING EXPENSES
(433,295)
(395,435)
NONOPERATING REVENUES
Earnings on investments
State sources
Federal sources
TOTAL NONOPERATING REVENUES
70
72,742
318,886
391,698
84
64,486
298,418
362,988
CHANGE IN NET POSITION
(41 ,597)
(32,447)
NET POSITION, BEGINNING OF YEAR
769,228
801 ,675
OPERATING LOSS
$
NET POSITION, END OF YEAR
7271631
The accompanying notes are an integral part of these financial statements.
-23-
$
7691228
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENTS OF CASH FLOWS- PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2014
(With Comparative Data for the Year Ended June 30, 2013)
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
2014
2013
$1,270,530
(1 ,030,937)
(580,623}
(341,030}
$1 ,236,429
(972,689)
(5621839}
(299,099}
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
State sources
Federal sources
NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES
72 ,337
224,854
297,191
69,185
2431850
313,035
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Equipment acquisition
NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES
(20,311}
(20 ,311}
(361612)
(36,612}
CASH FLOWS FROM INVESTING ACTIVITIES:
Earnings on investments
NET CASH PROVIDED BY INVESTING ACTIVITIES
84
84
70
70
NET DECREASE IN CASH AND CASH EQUIVALENTS
(64,080)
(22,592)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
7901709
813,301
726,629
$ 790,709
~
CASH AND CASH EQUIVALENTS, END OF YEAR
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
Unearned revenue
NET CASH USED BY OPERATING ACTIVITIES
(10,228)
(7,900)
(2,531)
(1,938)
(20,372)
3,810
(2,563}
$ {341 p30}
(1,743)
(3,507)
(6,206)
$ {2991099}
SUPPLEMENTAL DISCLOSURE
NONCASH NONCAPITAL FINANCING ACTIVITY:
USDA donated commodities
$
$
$ (433,295)
$ (395,435)
38,523
90,995
The accompanying notes are an integral part of these financial statements.
-24-
90,995
32,423
79,838
79,838
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET POSITION- FIDUCIARY FUNDS
JUNE 30, 2014
PrivatePurpose
Trust
Agency Funds
Student
Escheat
Activities
Funds
Total
Agency
Funds
ASSETS
$ 152,500
$
Cash
Due from private-purpose trust fund
$ 22,103
TOTAL ASSETS
$ 22,103
$ 152,500
$
$
$
$
355
$ 152,500
355
355
$ 152,855
LIABILITIES AND NET POSITION
LIABILITIES:
Due to escheat funds
Other current liabilties
355
355
NET POSITION:
Reserved for trust
TOTAL LIABILITIES AND NET POSITION
152,500
152,500
$
355
355
152,855
152,855
355
$ 1521855
21,748
$ 221103
$ 1521500
The accompanying notes are an integral part of these financial statements.
- 25 -
$
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENTS OF CHANGES IN NET POSITION- FIDUCIARY FUND
FOR THE YEAR ENDED JUNE 30, 2014
(With Comparative Data for the Year Ended June 30, 2013)
Private-Purpose Trust
2014
2013
ADDITIONS
$
Local contributions
17,427
$
13,456
17,427
13,456
Fees paid and scholarships awarded
12,450
12,450
TOTAL DEDUCTIONS
12,450
12,450
4,977
1,006
16,771
15,765
TOTAL ADDITIONS
DEDUCTIONS
CHANGE IN NET POSITION
NET POSITION, BEGINNING OF YEAR
NET POSITION, END OF YEAR
$
21l48
The accompanying notes are an integral part of these financial statements.
-26-
$
16 771
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
and GASB Statement No. 61 , 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 position 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 reconciliations with brief explanations
to better identify the relationship between the entity-wide statements and the statements of
governmental funds.
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
- 27 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
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 c lassified 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 position in one of three components. Net
investment in capital assets 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 position is reported as restricted when constraints placed on net
position 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 position arising from
special revenue and capital projects funds. Unrestricted net position consists of net position that
does not meet the definition of "net investment in capital assets" 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.
The Capital Projects Fund is used to account for the acquisition, construction, and renovation of
major capital facilities and their related capital assets.
The Capital Reserve Fund is used to accumulate resources for future capital needs of the District.
The Debt Service Fund is used to account for funds segregated to pay for future debt service
payments.
-28 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
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 unearned 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 a ll "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.
-29-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE l
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
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 c urrent
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 financia l 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 l . Taxes are levied on July 1
and are payable in the following periods:
July l - August 31
September l - Oc tober 31
November l to collection
February 28
-
Discount period, 2% of gross levy
Face Period
Penalty Period, l 0% of gross levy
Lien Date
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 fiscal2013- 2014 was 22 .9913 mills ($22 .9913 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.
- 30-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Prepaid Items and Inventories
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both entity-wide and fund financial statements.
All inventories are valued at the lower of cost (first-in, first-out method) or market.
Capital Assets
Capital assets, which include property, plant, and equipment, are reported in the applicable
governmental or business-type activities columns in the entity-wide and proprietary fund financial
statements. Capital assets are defined by the District as assets with an initial, individual cost of
more than $1 ,500 or $1 0,000 in the aggregate and an estimated useful life in excess of one year.
Such assets are recorded at historical cost if purchased or constructed. Purchased equipment at
less than $1,500 yet deemed critical to inventory control will be recorded at its original cost.
Donated capital assets are recorded at estimated fair value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets' lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed,
inclusive of ancillary costs.
Property, plant, and equipment of the District are depreciated using the straight-line method over
the following estimated useful lives:
School buildings
Site improvements
Furniture and equipment
Vehicles
40 years
20 years
3-20 years
8 years
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.
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.
- 31 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Bond premiums and bond discounts are reported as netting items against the outstanding bond
liability and amortized over the term of the related debt. All amounts are amortized using the
straight-line method. Bond issuance costs are expensed at the time of issuance.
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.
Deferred Inflows and Deferred Outflows of Resources
In addition to assets and liabilities, the financial statements will sometimes report separate
sections for deferred inflows and deferred outflows of resources. These separate financial
statement elements represent acquisition or use of net position that applies to a future period(s)
and so will not be recognized as an inflow or outflow of resources (revenue or
expense/expenditure) until that time. The District currently has two types of items that qualify for
reporting in this category. Deferred amounts on the refunding of bonds are reflected as deferred
outflows of resources on the entity-wide statement of net position. Delinquent taxes not collected
within 60 days of year end and, therefore, not available under modified accrual reporting, are
reflected as deferred inflows of resources on the general fund balance sheet.
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 position as
do the entity-wide financial statements. When an expenditure is incurred for purposes for which
both restricted and unrestricted fund balance is available, the District considers restricted funds to
have been spent first. When an expenditure is incurred for which committed, assigned, or
unassigned fund balances are available, the District considers amounts to have been spent first
out of committed funds, then assigned funds and, finally, unassigned funds, as needed, unless
the Board has provided otherwise in its commitment or assignment actions.
As of June 30, 2014, fund balances of the governmental funds are classified, if applicable, as
follows:
Nonspendable - amounts that cannot be spent either because they are in nonspendable form or
because they are legally or contractually required to be maintained intact.
Restricted - amounts that can be spent only for specific purposes because of constitutional
provisions or enabling legislation or because of constraints that are externally imposed by
creditors, grantors, contributors, or the laws or regulations of other governments.
-32 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Committed- amounts that can be used only for specific purposes determined by formal action
of the Board of Directors. The Board is the highest level of decision-making authority for the
District. Commitments may be established, modified, or rescinded only through resolutions
approved by the Board of Directors.
Assigned - amounts that do not meet the criteria to be classified as restricted or committed but
that are intended to be used for specific purposes. The Finance Committee or Director of
Management Services may assign amounts for specific purposes.
Unassigned - all other spendable amounts.
In the general fund, the District strives to maintain an unassigned fund balance of not less than
two percent and not more than eight percent of budgeted expenditures.
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, 2013, from which
the summarized information was derived.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those estimates.
NOTE 2
STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Budgetary Information
An annual budget is adopted prior to the beginning of each year for the general fund on the
modified accrual basis of accounting. The general fund is the only fund for which a budget is
legally required, although project-length financial plans are adopted for all capital projects
funds.
The District is required to publish notice by advertisement at least once in two newspapers of
general circulation in the municipalities in which it is located, and within 10 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.
- 33-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 2
STEWARDSHIP, COMPLIANCE. AND ACCOUNTABILITY (cont'd)
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, 2014, the carrying amount of the District's deposits was $3.409,107
and the bank balance was $4.426,41 7. The cash deposits of the District are in the Pennsylvania
School District Liquid Asset Fund ("PSDLAF"). Although not registered with the Securities and
Exchange Commission and not subject to regulatory oversight. PSDLAF acts like a money market
mutual fund in that its objective is to maintain a stable net asset value of $1 per share, is rated by
a nationally recognized statistical rating organization, and is subject to an independent annual
audit.
Investments
Statutes authorize the District to invest in U.S. Treasury bills, time or share accounts of institutions
insured by the Federal Deposit Insurance Corporation, or in certificates of deposit when they are
secured by proper bond or collateral, repurchase agreements, State Treasurer's investment pools
or mutual funds.
As of June 30, 2014, 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
Certificates of deposit due between one and two years - collateral
held by pledging bank's agent in the District's name
Total Certificates of Deposit
$ 25,937 ,027
490,000
$ 26,427,027
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.
- 34-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 3
DEPOSITS AND INVESTMENTS (cont'd)
Credit Risk
The District has no investment policy that would limit its investment choices to those with certain
credit ratings. As of June 30, 2014, PSDLAF was rated as AAAm 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
UNEARNED REVENUES
The District records unearned revenue for resources that have been received but not yet earned.
At the end of the current fiscal year, unearned revenue reported In the governmental funds
resulted from federal grants received that have not satisfied eligibility requirements and revenue
received but not yet earned. Unearned revenue in the proprietary funds and the entity-wide
financial statements represents resources that have been received but not yet earned.
NOTE 5
CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2014 was as follows:
Beginning
Balance
GOVERNMENTAl ACTIVITIES:
Capital assets not being depreciated:
land
Construction-in-progress
$ 6,253,838
11,678,603
Increases
$
Ending
Balance
Decreases
-
1,387,505
$
11,409,576
17,932,441
1,387,505
11,409,576
7,910,370
Capital assets being depreciated:
land improvements
Buildings and improvements
Furniture and equipment
3,275,576
130,472,644
30,000,028
172,099
15,534,950
2,671,058
400
1,125
1 '114,610
3,447,275
146,006,469
31,556,476
Total Capital Assets Being Depreciated
163,748,248
18,378,107
1,116,135
181,010,220
less accumulated depreciation for:
land improvements
Buildings and improvements
Furniture and equipment
1,227,334
48,796,652
22,597,926
118,368
4,362,672
1,444,472
400
1 '125
1,114,610
1,345,302
53,158,199
22,927,788
Total accumulated depreciation
72,621 ,912
5,925,512
1,116,135
77,431 ,289
Total Capital Assets Being Depreciated,
Net
91,126,336
12,452,595
$109,058,777
$13,840,1 00
Total Capital Assets Not Being
Depreciated
GOVERNMENTAl ACTIVITIES ASSETS, NET
-35-
$
6,253,838
1,656,532
103,578,931
$11,409,576
$111,489,301
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 5
CAPITAL ASSETS (cont'd)
Beginning
Balance
BUSINESS-TYPE ACTIVITIES:
Capital assets being depreciated:
Machinery and equipment
$
Less accumulated depreciation
Increases
385,012
$
$
BUSINESS-TYPE ACTIVITIES, NET
187,130
$
20,311
$
(18,2121
$
(21 ,957)
(38,523)
(197,882)
Ending
Balance
Decreases
21,957
$
383,366
(214,448)
-
$
168,918
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
NOTE 6
$
4,566,663
651,988
27,053
109,727
352,723
217,358
Total Governmental Activities
$
5 ,925,512
Business-type Activities - food service
$
38,523
INTERNAL RECEIVABLES. PAYABLES, AND TRANSFERS
The composition of interfund balances as of June 30, 2014 is as follows:
Amount
Due To
General Fund
$
34,950
Due From
Food Service
Amount
$
34,950
lnterfund balances between funds represent temporary loans recorded at year end subsequent
to a final allocation of expenses. The balances generally are paid shortly after year end.
lnterfund Transfers:
Transfer Out:
General Fund
Transfers In:
$
4,346,285
Capital Reserve Fund
Transfers represent funds set aside for the anticipation of future capital needs.
-36 -
$
4,346,285
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 7
GENERAL LONG-TERM DEBT
The following summarizes the changes in the long-term liabilities of governmental activities for the
year ended June 30, 2014:
Balance
July 1, 2013
Additions
Reductions
Balance
June 30, 2014
Bonds payable, net
Capital lease payable
Accumulated compensated
absences/early retirement
incentive
Other post-employment benefits
$ 79,453,519
$ 21 ,507,949
$ (21 ,135,463)
$ 79,826,005
582,572
1,868,229
(844,754)
1,606,047
2,520,490
844,138
97 ,500
61 ,137
(221,487)
2 ,396,503
905,275
TOTALS
$ 83,400,719
$ 23,534,815
$ (22,201,704)
$ 84,733,830
Bonds payable, net consists of the following:
$ 78,240,000
Bonds payable , at face
Bond premiums
Bond discounts
Bonds payable , net
2,100,120
(514,115)
$ 79,826,005
Payments of long-term debt are expected to be funded by the general fund.
General Obligation Bonds
Series of 2007A, maturing through January 25, 2017, bearing
interest at a fixed rate of 2.04%, payable monthly.
$
65,000
Series of 2007B, maturing through January 25, 2022, bearing
interest at a fixed rate of 2.04%, payable monthly.
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.
4,685,000
Series of 2009AA, maturing through February 15, 2018, bearing
interest ranging from 2.25% to 5%, interest payable semiannually on February 15 and August 15.
3,125,000
Series of 201 OA, maturing through February 1, 2022, bearing
interest ranging from 0.45% to 3% , interest payable semiannually on February 1 and August 1 .
- 37 -
14,505,000
ROSE TREE MEDIA SCHOOl DISTRICT
NOTES TO FINANCIAl STATEMENTS
NOTE 7
GENERAl lONG-TERM DEBT (cont'd)
Series of 201 OAA, maturing through May 1, 2016, bearing
interest ranging from 0.8% to 3%, interest payable semiannually on May 1 and November 1 .
3,775,000
Series of 2011, maturing through February 1, 2023, bearing
interest ranging from 1% to 4%, interest payable semi-annually
on February 1 and August 1.
8,285,000
Series of 2012, maturing through April 1, 2025, bearing interest
ranging from 0.5% to 2.7%, interest payable semi-annually
on April 1 and October 1 .
9,240,000
Series of 2013A, maturing through February 1, 2019, bearing
Interest ranging from 0.55% to 4.0%, interest payable semiannually on February 1 and August 1.
14,395,000
Series of 20138, maturing through February 1, 2025, bearing
Interest ranging from 0.3% to 5.0%, Interest payable semiannually on February 1 and August 1.
5.710.000
TOTAl
$ 78,240,000
Advance Refunding
The District issued $20,285,000 of general obligation bonds. A new bond of $5,715,000 is to
finance various capital projects and to pay for issuance costs, and $14,570,000 was to refund the
outstanding general obligation Series 2004A bond and to pay the costs of issuing the bond. This
advance refunding was undertaken to reduce total debt service payments over the next five
years by $1 ,211 ,824 and resulted in an economic gain of $1 ,123,491 . The District defeased
$14,705,000 of the 2004A bonds by placing new bond proceeds in an irrevocable trust to
provide for future debt service payments on the defeased bonds. Accordingly, the trust account
assets and the liability for the defeased bonds are not included in the District's financial
statements. At June 30, 2014, $14,700,000 of defeased bonds are still outstanding.
Presented below is a summary of debt service to maturity by years:
Principal
Maturities
Year Ending June 30,
2015
2016
2017
2018
2019
2020-2024
2025
$
5,950,000
6,220,000
6,400,000
6,590,000
6,805,000
39,205,000
7,070,000
$ 78,240,000
- 38 -
Interest
Maturities
$
2,404,784
2,224,752
2,045,601
1,801 ,672
1,539,170
4,869,002
257,015
$ 15,141,996
Total
Maturities
$
8,354,784
8,444,752
8,445,601
8,391 ,672
8,344,170
44,074,002
7,327,015
$ 93,381,996
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 8
CAPITAL LEASES- LESSEE
The District has entered into lease agreements as a lessee tor financing the acquisition of
equipment used for the network throughout the District. These lease agreements qualify as
capital leases for accounting purposes and, therefore, have been recorded at the present value
of future minimum lease payments as of the inception date.
The assets acquired through the capital leases are as follows:
ASSET
Equipment - Corporate Networking Inc.
Equipment - Apple Inc.
Less: Accumulated depreciation
$
572,299
2,422,634
(1 ,343, 725)
$ 1,651,208
Total
The future minimum lease obligations and the net present value of these minimum lease
payments as of June 30, 2014 were as follows:
Year Ending June 30,
2015
2016
2017
Amount representing
interest
Total
NOTE 9
$
806,966
638,227
208,017
(47,163)
$ 1,606,047
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,
2015
2016
2017
$
157,235
54,711
32,924
Total
$
244,870
Rental expense for the year ended June 30, 2014 was $157,325.
-39-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 10
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
healthcare insurance premium assistance to plan members and beneficiaries. The Public School
Employees' Retirement Code (Act No. 96, of October 2, 1975, as amended) provides the authority
to establish and amend benefit provisions. The PSERS issues a comprehensive annual financial
report that includes financial statements and required supplementary information for the plan. A
copy of the report may be obtained by writing to Public School Employees' Retirement System,
P.O. Box 125, Harrisburg, PA 171 08-0125; or by accessing its website at http:/www.psers.state.pa.
us/publications/cafr/index.htm.
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, 2014, the rate of employer contribution was 16.93 percent of covered
payroll. The District's contributions to PSERS for the years ended June 30, 2012, 2013, and 2014
were $3,273 ,546, $4,594,716, and $6,199,268, 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 11
JOINT VENTURES
The District 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 to provide rental payments to retire the Authority's outstanding debt obligations. The
lease agreements generally provide that in the event the Authority either retires all of its
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 antic ipated that less than scheduled rentals will
eventually be paid.
-40 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 11
JOINT VENTURES (cont'd)
Future Authority rental payments are:
Year Ending June 30,
2015
2016
2017
2018
2019
2020-2033
Total
$
(798,091)
Less: Interest requirements
$ 2,022,936
Outstanding rental payments
NOTE 12
169,081
168,731
168,381
168,030
167,680
1,979,124
2,821,027
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 10. 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, 2014, the District had four ERIP plans in effect. The number of participants and the
present value of those benefits as of June 30, 2014 are summarized below:
ERIP
Began
July
July
July
July
1,
1,
1,
1,
Participants
1997
2006
2011
2013
Healthcare
Premium
Total
1
3
15
$
11 ,386
52,221
223,000
292,500
$
11,386
52,221
223,000
292,500
$
579,107
$
579,107
11
During the year ended June 30, 2014, the cost of these benefits was $241,250.
- 41 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 13
COMMITMENTS AND CONTINGENCIES
Government Grants and Awards
The District participates in both state and federally assisted grant programs. These programs are
subject to program compliance audits by the grantors or their representatives. The District is
potentially liable for any expenditures which may be disallowed pursuant to the terms of these
grant programs. Management is not aware of any material items of noncompliance which would
result in the disallowance of program expenditures.
Litigation
Certain litigation claims are pending against the District. In the opinion of District management
and legal counsel, the potential losses, if any, on such claims are not yet determinable.
Capital Improvement Commitments
As of June 30, 2014, the District was in the process of several capital projects. Construction
commitments completed to date are as follows:
Contract
Amount
Project
Penncrest High School
Partial HVAC Replacement
Springton Lake Middle School Project
Asbestos Abatement
General Contractor
Electrical Contractor
Mechanical Contractor
Plumbing Contractor
Architect
HVAC Testing
ESCO
Johnson Controls
Natural Gas Bus Project
Less: Items placed in service
Total commitments related to
construction-in-progress
$
136,500
Completed
6/30/2014
Commitment
$
$
132,236
4,264
571,208
14,441,676
5,207,492
6,509,361
2,083,000
2,534,799
77,900
562,468
14,171,504
5,184,332
6,385,912
2,058,000
1,853,034
75,424
8,740
270,172
23,160
123,449
25,000
681,765
2,476
9,840,967
4,820,492
9,704,999
1,571 ,486
135,968
3,249,006
46,223,395
(40,384, 723)
41,699,395
(40,384, 723)
4,524,000
$ 5,838,672
$ 1,314,672
$ 4,524,000
In addition, the District has incurred costs in the amount of $341 ,860 for other projects that were
not under a formal construction commitment as of June 30, 2014.
- 42 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 14
RISK MANAGEMENT
The District is exposed to various risks of loss related to torts: theft of, damage, to and destruction
of assets: errors and omissions: injuries to employees: and natural disasters. Significant losses are
covered by commercial insurance for all major programs except for workers' compensation, for
which the District retains risk of loss. For insured programs. there were no significant reductions in
insurance coverages during the 2013 - 2014 year. Settlement amounts have not exceeded
insurance coverage for the current year or the three prior years.
NOTE 15
POST-EMPLOYMENT HEALTHCARE PLAN
Plan Description
Effective for the 2008 - 2009 fiscal year, the District adheres to Governmental Accounting
Standards Board Statement No. 45, "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions," for certain post -employment healthcare benefits and
life insurance benefits provided by the District. This statement generally provides for prospective
implementation - i.e., that employers set the beginning net OPEB obligation at zero as of the
beginning of the initial year. Accordingly, for financial reporting purposes, no liability is reported
for the post-employment benefits liability at the date of transition.
The District's post-employment healthcare plan is a single-employer defined benefit healthcare
plan. The plan provides medical insurance benefits to eligible retirees and their spouses. The
Board of School Directors has the authority to establish and amend benefit provisions through the
collective bargaining process with members of the professional and support staff, an agreement
with administrative employees, and individual employment contracts with certain employees.
The plan does not issue any financial report and is not included in the report of any public
employee retirement system or any other entity.
Funding Policy
The contribution requirements of plan members are established and may be amended by the
Board of School Directors. The required contribution is based on projected pay-as-you-go
financing requirements, with any additional amount to prefund as determined annually by the
Board of School Directors. For fiscal year 2014, plan members receiving benefits contributed
$299,371, 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
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.
-43-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 15
POST-EMPLOYMENT HEALTHCARE PLAN (cont'd)
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
$ 374,345
37,986
(51 ,823)
360,508
(299,371)
Annual OPEB cost (expense)
Contributions made
61,137
Increase in net OPEB obligation
Net OPEB obligation - beginning of year
844,138
$ 905,275
Net OPEB obligation - end of year
This amount represents the cost of medical expenses for retirees.
Funded Status and Funding Progress
The schedule of funding progress of OPEB is as follows:
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
7/1/2012
7!1/2010
111/2008
$
$
$
Actuarial
Accrued
Liability
(AAL)Entry Age
(b)
Unfunded
AAL
(UAAL)
(b-a)
Funded
Ratio
(a/b)
Covered
Payroll
(c)
UAAL as a
Percentage
of Covered
Payroll
[(b-a)/c]
$2,793,367
$3,522,969
$4,066,104
$2,793,367
$3,522,969
$4,066,104
0.00%
0.00%
0.00%
$34,298,304
$34,522,969
$30,779,036
8.14%
10.07%
13.21%
Actuarial valuations of an ongoing plan Involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and healthcare cost trends. Amounts
determined regarding the funded status of the plan and the annual required contributions of the
employer are subject to continual revision as actual results are compared with past expectations
and new estimates are made about the future.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the
plan as understood by the employer and the plan members) and include the types of benefits
provided at the time of each valuation and the historical pattern of sharing of benefit costs
between the employer and plan members to that point. The actuarial methods and assumptions
used include techniques that are designed to reduce the effects of short-term volatility in
actuarial liabilities and the actuarial value of assets, consistent with the long-term perspective of
the calculations.
-44-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 15
POST-EMPLOYMENT HEALTHCARE PLAN (cont'd)
In the July 1, 2012 actuarial valuation, the entry age actuarial cost method was used. The
actuarial assumptions included a 4.50 percent investment rate of return and an annual
healthcare cost trend rate of 7.5 percent in 2012, reduced by decrements to an ultimate rate of
5.5 percent in 2016 or later. The UAAL is being amortized based on the level dollar, 30-year open
period. The remaining amortization period at June 30, 2014 was 24 years.
NOTE 16
FUND BALANCES
As of June 30, 2014, fund balances are composed of the following:
NOTE 17
Nonspendable
Restricted:
Capital projects
Assigned:
Capital projects
Debt service
Future expenditures
Future benefits funding
SYA
SLMS
PCHS Science
Summer School
Save our Steinway
Unassigned
$
Total Fund Balances
$11,802,092
9,600
Capital
Reserve
Fund
Capital
Projects
Fund
General
Fund
$
$
6,646,639
Total
Governmental
Funds
Debt
Service
Fund
-
$
-
6,559,408
692,132
3,502,652
3,018,902
19,212
19,058
6,874
14,300
6,330
4,005,164
$ 6,559,408
9,600
13,206,047
1,200,000
$ 6,646,639
$
$
692,132
1,200,000
692,132
3,502,652
3,018,902
19,212
19,058
6,874
14,300
6,330
4,005,164
$ 25,700,271
SUBSEQUENT EVENTS
The District has evaluated all subsequent events through November 11, 2014, the date the
financial statements were available to be issued.
-45-
SINGLE AUDIT
Barbacane, Thornton & Company LLP
INDEPENDENT AUDITOR'S
REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATIERS BASED
ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
200 Springer Building
3411 Silverside Road
Wilmington, Delaware 1981 0
T 302.4 78.8940
F 302.468.4001
wwv>.btcpa.com
November 11 , 2014
Board of School Directors
Rose Tree Media School District
Media, Pennsylvania
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
the Rose Tree Media School District as of and for the year ended June 30, 2014, and the related notes to
the financial statements, which collectively comprise the Rose Tree Media School District's basic financial
statements, and have issued our report thereon dated November 11 , 2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Rose Tree Media
School District's internal control over financial reporting ("internal control") to determine the audit
procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Rose Tree
Media School District's internal control. Accordingly, we do not express an opinion on the effectiveness of
the Rose Tree Media School District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the District's financial statements will not be prevented, or detected and corrected, on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
BARRAO\NE
lHORNTON
- 46-
&COMPANY
I
~1\11~1~11
rlti\Ut At't'Ol•NtANn
Board of School Directors
Rose Tree Media School District
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Rose Tree Media School District's financial
statements are free of material misstatement, we performed tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct
and material effect on the determination of financial statement amounts. However, providing an opinion
on compliance with those provisions was not an objective of our audit and, accordingly, we do not
express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the District's internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
/j~~~a-r
BARBACANE,
TH~RNTON &
COMPANY
LL~
LLP
-47 -
Barbacane, Thornton & Company LLP
INDEPENDENT AUDITOR'S
REPORT ON COMPLIANCE FOR EACH
MAJOR PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE REQUIRED BY
OMB CIRCULAR A-1 33
200 Springer Building
34 1 I Silverside Road
Wilmington, Delaware 19810
T 302.478.8940
F 302468.4001
www.btcpa.com
November 11 , 2014
Board of School Directors
Rose Tree Media School District
Media, Pennsylvania
Report on Compliance for the Major Federal Program
We have audited the Rose Tree Media School District's compliance with the types of compliance
requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and
material effect on the Rose Tree Media School District's major federal program for the year ended June 30,
2014. The Rose Tree Media School District's major federal program is identified in the summary of auditor's
results section of the accompanying schedule of findings and recommendations.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and
grants applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for the Rose Tree Media School District's major
federal program based on our audit of the types of compliance requirements referred to above. We
conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, "Audits of
States, Local Governments, and Non-Profit Organizations." Those standards and OMB Circular A-133
require that we plan and perform the audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements referred to above that could have a direct
and material effect on a major federal program occurred. An audit includes examining, on a test basis,
evidence about the Rose Tree Media School District's compliance with those requirements and performing
such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal
program. However, our audit does not provide a legal determination of the Rose Tree Media School
District's compliance.
BARBAO\NE
1HORNTON
-48-
&COMPANY
l'&RTIFIEO l'lJnUC ACCOUNTANTS
Board of School Directors
Rose Tree Media School District
Opinion on the Maior Federal Program
In our opinion, the Rose Tree Media School District complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on its major
federal program for the year ended June 30, 2014.
Report on Internal Control Over Compliance
Management of the Rose Tree Media School District is responsible for establishing and maintaining
effective internal control over compliance with the types of compliance requirements referred to above.
In planning and performing our audit of compliance, we considered the Rose Tree Media School District's
internal control over compliance with the types of requirements that could have a direct and material
effect on its major federal program to determine the auditing procedures that are appropriate in the
circumstances for the purpose of expressing an opinion on compliance for its major federal program and
to test and report on internal control over compliance in accordance with OMB Circular A-133 , but not for
the purpose of expressing an opinion on the effectiveness of internal control over compliance.
Accordingly, we do not express an opinion on the effectiveness of the Rose Tree Media School District's
internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance with a type of compliance requirement of a federal program that is less severe than a
material weakness in internal control over compliance, yet important enough to merit attention by those
charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of that testing based on the requirements of OMB
Circular A-133. Accordingly, this report is not suitable for any other purpose.
;j~~IL'n-f
BARBACANE,
THO~NTON &
COMPANY
LL~
LLP
- 49 -
859,722
81 ,411
679,762
Total U.S. Department of Education
Continued on next page.
-50-
21 ,428
261 ,371
859,722
2,127
259,244
86,705
86,705
172,539
172,539
2,127
$
ACCRUED
REVENUE
06/30/2014
536,333
2,127
536,333
07/01/12-09/30/15
17,415
FC4100061676
551,621
84.413A
Total Passed through Delaware County Intermediate Unit
I
2,539
2,127
Race to the Top- Phase 3
Totaii.D.E.A. Program Cluster
531,667
531,667
17,415
323,389
100,057
100,057
21,209
202,123
223,332
17,415
$
534.206
323,389
100,057
100,057
21,209
202,123
223,332
534,206
$
534,206
63,996
7,892
7,892
56,104
1g,202
36,go2
EXPENDITURES
2,539
$
REVENUE
RECOGNIZED
2,539
128,1 41
7,892
13,352
21,244
19,202
58,111
29,584
106,897
ACCRUED
REVENUE
07/01/2013
2,539
07/01 /13..06/30/14
062-14-0025
84.173
I
I.D.E.A.- Section 619
$
TOTAL
RECEIVED
FOR YEAR
531 ,667
104,265
100,057
$307,102
261 ,035
221,879
GRANT
AMOUNT
531 ,667
07/01/13..06/30/14
062-14-0025
07/0111 2-09/30/13
07/01/13-09/30/14
84.027
020-13-0368
020-14-0368
84.367
84.367
I
I
07/01/11-09/30/ 12
07/01/12.Qg/30/ 13
07/01 /13..09/30/1 4
GRANT PERIOD
BEGINNING/
ENDING OATES
I
Intermediate Unit
013-12..0368
013-13-0368
01 3-14-0368
84.010
84.010
84.010
---
I
I
I
SOURCE
CODE
PASSTHROUGH
GRANTOR'S
NUMBER
Passed throuah Delaware
I.O.E.A.
Coun~
Su~rant from U.S. Deeartment of Education
Total Passed through Pennsylvania Department
of Education
T itle II - Improving Teacher Quality
Title II- Improving Teacher Quality
Total CFOA #84.367
Passed throuah Penns~vania Department of Education
Title I - Improving Basic Programs
Title I - Improving Basic Programs
Title I - Improving Basic Programs
Total CFDA #84.010
U.S. Deeartment of Education
FEDERAL GRANTOR/PASS-THROUGH GRANTOR
PROJECT TITLE
FEDERAL
CFDA
NUMBER
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2014
I
= Indirect Funding
Source Codes:
TOTAL FEDERAL AWARDS
Total U.S. Department of Agriculture
Total Child Nutrition Cluster
Breakfast Program
Breakfast Program
Total CFDA# 10.553
Passed throuah Penns}:lvania Department of Education
National School Lunch Program
National School Lunch Program
Total CFDA# 10.555
Passed throullh Penns~vania Department of Allriculture
Value of U.S.D.A. Donated Commodities
U.S. Department of Agriculture
FEDERAL GRANTOR/PASS-T HROUGH GRANTOR
PROJECT TITLE
(cont'd)
10.555
10.555
10.553
10.553
I
I
10.555
I
I
I
SOURCE
CODE
FEDERAL
CFDA
NUMBER
NJA
N/A
N/A
N/A
N/A
PASSTHROUGH
GRANTOR'S
NUMBER
N/A
N/A
07/01/ 12-06/30/ 13
07/01/ 13-06/30/ 14
-51 -
N/A
N/A
N/A
GRANT
AMOUNT
07/01/ 12-06/30/ 13
07/01/ 13-06/30/14
07/01 /13-06/30/14
GRANT PERIOD
BEGINNING/
ENDING DATES
$
$
275,537
1,178,608
$
$ 1,178,608
$ 92,540
995,611
14,166
318,886
318,886
11,129
315,849
925
925
13,241
13,241
14,166
318,886
11,129
315,849
13,824
13,824
214,067
305,062
90,995
EXPENDITURES
ACCRUED
REVENUE
06/30/2014
318,886
13,824
13,824
214,067
305,062
90,995
REVENUE
RECOGNIZED
572
572
10,557
10,557
ACCRUED
REVENUE
07/01/2013
572
12,899
13,471
10,557
200,826
302,378
90,995
TOTAL
RECEIVED
FOR YEAR
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2014
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
NOTE A
SCOPE OF SCHEDULE
The schedule of expenditures of federal awards reflects federal expenditures for all individual
grants which were active during the fiscal year.
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.
NOTEC
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 under CFDA #1 0.555, Value of USDA Donated Commodities, represent surplus
food consumed by the District during the 2013 - 2014 fiscal year.
NOTED
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, 2014 was $475,359.
-52 -
SCHEDULE OF
FINDINGS AND RECOMMENDATIONS
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
PART A- SUMMARY OF AUDITOR'S RESULTS
Financial Statements
Type of auditor's report issued [unmodified, qualified, adverse. or disclaimer]:
Unmodified
Internal control over financial reporting:
•
Material weakness(es) identified?
•
Significant deficiency(ies) identified?
•
Noncompliance material to financial
statements noted?
Yes
Yes
_X_No
_x_ None reported
Yes
_X_No
Yes
Yes
_X_No
_x_ None reported
Federal Awards
Internal control over major programs:
•
Material weakness(es) identified?
•
Significant deficiency(ies) identified?
Type of auditor's report issued on compliance for major programs [unmodified, qualified, adverse, or
disclaimer]:
Unmodified
Any audit findings disclosed that are
required to be reported in accordance
with Section 51 O(a) of OMB Circular A-133?
Yes
_X_No
Identification of major program:
CFDA Numbers
Name of Federal Program or Cluster
10.553 and 10.555
Child Nutrition Cluster
Dollar threshold used to distinguish between
Type A and Type B programs:
$300.000
Auditee qualified as low-risk auditee?
_X_ Yes
-53-
No
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND RECOMMENDATIONS (CONT'D)
PART B- FINDINGS RELATED TO FINANCIAL STATEMENTS
STATUS OF PRIOR YEAR FINDINGS
None.
CURRENT YEAR FINDINGS AND RECOMMENDATIONS
None.
PART C- FINDINGS RELATED TO FEDERAL AWARDS
STATUS OF PRIOR YEAR FINDINGS
None.
CURRENT YEAR FINDINGS AND RECOMMENDATIONS
None.
- 54-