RT0l"1
ROSE TREE MEDIA SCHOOL DISTRICT
MEDIA, PENNSYLVANIA
AUDIT REPORT
JUNE 30, 2015
ROSE TREE MEDIA SCHOOL DISTRICT
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT
1-3
MANAGEMENT'S DISCUSSION AND ANALYSIS
4 - 16
BASIC FINANCIAL STATEMENTS
Entity-wide Financial Statements:
- Statement of Net Position
l7
- Statement of Activities
18
Fund Financial Statements:
- Balance Sheet - Governmental Funds
19
- Reconciliation of Balance Sheet - Governmental Funds
to Statement of Net Position
20
- Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds
21
- Reconciliation of Statement of Revenues, Expenditures,
and Changes in Fund Balances - Governmental Funds
to Statement of Activities
22
- Budgetary Comparison Statement - General Fund
23
- Statements of Net Position - Proprietary Fund
24
- Statements of Revenues, Expenses, and Changes in
Net Position - Proprietary Fund
25
- Statements of Cash Flows - Proprietary Fund
26
- Statement of Net Position - Fiduciary Funds
27
- Statements of Changes in Net Position - Fiduciary Fund
28
NOTES TO FINANCIAL STATEMENTS
29 - 54
ROSE TREE MEDIA SCHOOL DISTRICT
TABLE OF CONTENTS
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the District's Proportionate Share of the Net Pension Liability
55
Schedule of District Contributions
56
SINGLE AUDIT
Independent Auditor's Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
57 - 58
Independent Auditor's Report on Compliance for Each
Major Program and on Internal Control Over Compliance
Required by OMB Circular A-1 33
59- 60
Schedule of Expenditures of Federal Awards
61 - 62
Notes to Schedule of Expenditures of Federal Awards
Schedule of Findings and Recommendations
63
64 - 65
Barbacane, Thornton & Company LLP
ZOO Springer Building
3411 Silverside Road
Wilmington, Delaware 19810
INDEPENDENT AUDITOR'S REPORT
T 302.478 .8940
F 302.468.4001
wv,,v.btcpa.com
November l 0, 2015
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 the Rose Tree Media School
District ("the District"), Media, Pennsylvania, as of and for the year ended June 30, 2015, and the related
notes to the financial statements, which collectively comprise the District's basic financial statements as
listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. 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.
BARBACANE
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1HORNTON
&CDMPANY
CERTIFIED 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 Schoof District. Media,
Pennsylvania, as of June 30, 2015, 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 2014 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 11, 2014. In our
opinion, the summarized comparative information presented herein as of and for the year ended June 30,
2014 is consistent, in all material respects, with the audited financial statements from which it has been
derived.
Emphasis of Matter
As discussed in Notes 1 and 18 to the financial statements, the District has adopted the requirements of
GASB Statement No. 68, "Accounting and Financial Reporting for Pensions," and GASB Statement No. 71,
"Pension Transition for Contributions Made Subsequent to the Measurement Date -An Amendment of GASB
Statement No. 68." These statements modify the accounting for the District's pensions. As a result, the
beginning governmental activities, business-type activities, and food service fund net position have been
restated. Our opinion is not modified with respect to this matter.
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 16 and the schedule of the District's proportionate share of the
net pension liability and schedule of District contributions on pages 55 and 56 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 port 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.
-2-
Board of School Directors
Rose Tree Media School District
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the 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
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 l 0,
2015, 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.
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BARBACANE, TH;RNTON & COMPANY LL~
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ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED
JUNE 30, 2015
Management's Discussion and Analysis ("MD&A") of the 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, 2015. 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 decreased in the amount of $1.0 million on an entity-wide basis. The
decrease in part is the result of the completion of various capital projects. The larger portion of the
deficit in net position is due to new reporting requirements of Governmental Accounting Standards
Board ("GASB") Statement No. 68 for the District's proportionate share of the net pension liability.
Statement No. 68 requires governments providing defined benefit pensions to recognize their longterm obligation for pension benefits as a liability for the first time. Detailed information concerning the
net pension liability can be found in Note 10.
Revenue for the current year increased at the entity-wide level. This was due to an increase of 1.8
percent in the millage rate and an increase in state revenue for the 50 percent reimbursement of the
retirement subsidy. The retirement rate increased from 16.93 percent in 2014 to 21.40 percent in
2015. The District also received unanticipated revenue through rebates and reimbursements.
Program revenues for the governmental activities accounted for $12.4 million, or 14.6 percent, of total
revenues of $84.4 million. and general revenues accounted for $72.1 million, or 85.4 percent.
Pennsylvania's Special Session Act 1 of 2006 provides property tax relief for homestead and farmstead
owners through gaming revenue. Approved homestead/farmstead property owners received
approximately $214 in property tax relief per property for the 2014-2015 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 $7.1 million for
future benefits funding and future expenditures and $1 .8 million in unassigned fund balance for a
total of assigned/unassigned fund balance of $8.8 million. In total, assigned and unassigned fund
balance equates to 9.8 percent of the 2015-2016 $90.2 million operating budget. Approximately
$0.3 million of fund balance was used to balance the budget against revenues, and approximately
an additional $2. 7 million was transferred from the General Fund to the Capital Reserve Fund for
capital projects. This resulted in a decrease in fund balance of approximately $3 million.
The instructional programs (including special education, vocational education, summer school,
homebound instruction, adjudicated programs, and Delaware County Community College) cost
$46.8 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 55.6 percent of
total revenue.
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ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
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 $2 7.4 million
for salaries, benefits, supplies, utilities, diesel fuel and gasoline, the insurance program, and
equipment. The cost of the support programs was supported by 32.5 percent of total revenue.
The operation of non-instructional 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 non-instructional 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 $11.4 million for interest and principal payments and for a transfer to the
Capital Reserve Fund account. The cost of the other financing uses was supported by 13.6 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, deferred outflows of
resources, liabilities, and deferred inflows of resources 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
Implementation of GASB statements No. 68 and 71
During the year, the District implemented Government Accounting Standards Board ("GASB")
Statement No. 68, "Accounting and Financial Reporting for Pensions," and GASB Statement No. 71
"Pension Transition for Contributions Made Subsequent to the Measurement Date - An Amendment of
GASB Statement No. 68." The purpose of these statements is to improve the transparency,
consistency, and comparability of the pension information reported by state and local governments
(e.g. school districts).
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ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
The adoption of GASB Statements No. 68 and No. 71 have had, and will continue to have, a profound
effect on the financial statements and net position of school districts and governments not only in
Pennsylvania, but across the nation. By recognizing the impact of any unfunded liability faced by
defined benefit pension plans, plan administrators (at the direction of elected officials), and
participants will be required to evaluate the cost of providing these benefits as compared to the
benefit to be derived through providing for certain retirement benefits to the work force.
More specifically, the District contributes to the Pennsylvania Public School Employees' Retirement
System ("PSERS"), a governmental cost-sharing multiple-employer defined benefit pension plan that
provides retirement benefits to public school employees of the Commonwealth of Pennsylvania. In
cost-sharing multiple-employer plans, the plan assets and liabilities are shared. Plan assets can be
used to pay the pensions of the employees of any employer that provides pensions through the plan.
The new standards have shifted pension reporting from a funding-based approach, in which the
District reported only its contributions to the plan, to an accounting-based approach. Under this new
approach, the District will report its proportionate share of the net pension liability on the statement of
net position of the government-wide and proprietary fund financial statements. Reporting in the
governmental fund statements is not affected by the implementation of these statements.
The net pension liability is the difference between the market value of pension fund assets and the
actuarial present value of projected benefit payments at the measurement date. Included in the
calculation are projected employer and employee contributions as well as the expectation that the
assets will grow at the long-term assumed rate of return on plan investments.
While the net pension liability is significant to the District's financial statements, it is a liability the District
has limited control over. Over the last five years, the PSERS employer contribution rate has risen
significantly, from 4.0 percent in 2009-201 O to 20.5 percent in 2014-2015. These increases are
expected to improve the plan's funding level, which will reduce net position in future years. This rate is
anticipated to continue to increase to a level of over 30 percent in future years.
The implementation of GASB Statement No. 68 has had an impact on entity-wide statements. The
District is now required to report its proportionate share of the net pension liability. This portion of the
unfunded pension liability resulted in a total net position of ($58,607,760). The majority of the
unrestricted net position of ($99,741,902) is a direct result of GASB Statement No. 68 . However, a
portion of the District's total net position, $41 million, reflects its investment in capital assets, net of
related debt. This is an 11 percent increase over last year. 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 2015 to 2014 follows:
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ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALVSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
Statement of Net Position
June 30, 2015 and 2014
Governmental Activities
2014
2015
ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
Assets:
Current and other assets
Capital assets
Total Assets
Business-type Activities
2014
2015
Totals
2015
2014
$ 27,139,293
112,054,335
139, 193,628
$ 33,344,758
111,489,301
144,834,059
$ 671,320
140,432
811,752
$ 756,650
168,918
925,568
$ 27,810,613
112,194,767
140,005,380
$ 34, 101,408
7,622,444
117,827
5,798,836
78,728
1,217
59,893
7,701,172
119,044
5,858,729
97,413
112,794
97,413
112,794
7,837,684
5,911,630
79,945
59,893
7,917,629
5,971,523
TOTAL ASSETS AND
DEFERRED OUTFLOWS
OF RESOURCES
$147,031 ,312
$150,745,689
$ 891,697
$ 985,461
$147,923,009
$151,731 ,150
LIABILITIES, DEFERRED
OUTFLOWS OF RESOURCES ,
AND NET POSITION
Liabilities:
Current liabilities
Long-term liabilities
Total Liabilities
$ 13,675,690
183,075,742
196,751,432
$ 13,723,230
194,195,024
207,918,254
$
197,937
1,205,235
1,403, 172
$ 13,753,957
184,235,812
197,989,769
$ 13,921, 167
Deferred outflows of
resources:
Deferred pension contributions
Deferred pension
Deferred amounts on bond
refunding
Total Deferred Outflows
of Resources
Deferred inflows of
resources:
Deferred pension
Total Deferred Inflows
of Resources
Net Position:
Net investment in capital
assets
Unrestricted (deficit)
Total Net Position (Deficit)
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES,
AND NET POSITION
78,267
1, 160,070
1,238,337
$
8,453,686
87,314
8,541,000
8,453,686
87,314
8,541,000
40,993,710
(99,167,516)
(58,173,806)
36,816,682
(93,989,247)
(57,172,565)
140,432
(574,386)
(433,954)
$147,031,312
$150,745,689
$ 891,697
-7-
168,918
(586,629)
(417,711)
$ 985,461
111,658,219
145,759,627
195,400,259
209,321,426
41, 134, 142
(99,741,902)
(58,607,760)
36,985,600
(94,575,876)
(57,590,276)
$147,923,009
$151,731, 150
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
The District's net position - net investment in capital assets increased $4. l million due to the
completion of the Compressed Natural Gas ("CNG") Fill Station, and the purchase of CNG buses that
were added to the District's fleet. This investment will continue to produce energy and costs savings
for the District in the years to come.
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 otter taking into account the program revenues for the governmental and businesstype activities.
2015
PROGRAM EXPENSES
Governmental Activities:
Instruction
Support services:
2014
Total Cost
of Services
Net Cost
of Services
Total Cost
of Services
of Services
$ 53,237 ,396
$(45,327,378)
$ 48,388,463
$(41,406,772)
8,062 ,135
7,072,108
7,439,305
(6,934,595)
(6,648,704)
(6,975, 197)
(3,807,484)
6,981 ,731
6,512,536
7, 105,781
5,011,447
(6,002,325)
(1,447,611)
(21,891)
1,518,065
Instructional student support
Administration
Maintenance
Pupil transportation
Student activities
Community services
5,256,249
1,673,183
Net Cost
(6,166,887)
(6,717,703)
(1,903,290)
115,897
2,880,084
(3,663,933)
(1 ,323,546)
(17,925)
(2,152,944)
$ 85,425,852
$(73,066,150)
$ 78,514,004
$(67,452,035)
Food service
$
1,629,376
$
(16,318)
$
1,716,616
$
(41,667)
Total Business-type Activities
$
1,629,376
$
(16,318)
$
1,716,616
$
(41,667)
Interest and fiscal charges
Total Governmental Activities
124,584
2,560,892
Business-type Activities:
In total, Governmental Activities total cost of services increased by $6. 9 million over the prior year. This
is mainly due to the pension expense being allocated. The prior period adjustment was made to net
position in the prior year and not allocated over expenses as permitted by GASB Statement No. 71 .
Please see Note 18 for more information. Progrqm revenue also increased by $1.3 million due to an
increase in property and miscellaneous services. This resulted in a decrease in net cost of services of
$5.6 million.
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ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
Statement of Changes In Net Position
Fiscal Years Ended June 30, 2015 and 2014
Governmental Activities
Business-type Activities
Totals
2015
2014
2015
2014
2015
2014
$ 2,101,173
10,258,529
$ 2,020,577
9,041,392
$1,195,967
417,091
$1,283,321
391,628
$ 3,297, 140
10,675,620
Total Program Revenues
12,359,702
11,061,969
1,613,058
1,674,949
13,972,760
$ 3,303,898
9,433,020
12,736,918
General Revenues:
Property taxes
Other taxes
Grants and entitlements
Investment earnings
Miscellaneous
Total General Revenues
65,825,434
1,425,894
4,341,570
78,205
393,806
72,064,909
64,256,469
1,780, 135
4,348,218
64,676
151,968
70,601,466
65,825,434
1,425,894
4,431,570
78,280
393,806
64,256,469
1,780,135
4,348,218
64,746
151,968
TOTAL REVENUES
84,424,611
81,663,435
53,237,396
REVENUES
Program Revenues:
Charges for services
Operating grants
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
75
70
75
70
72,064,984
1,613,133
1,675,019
86,037,744
70,601,536
83,338,454
48,388,463
53,237,396
48,388,463
8,062, 135
7,072,108
7,439,305
5,256,249
1,673, 183
124,584
2,560,892
6,981,731
6,512,536
7,105,781
5,011,447
1,518,065
115,897
2,880,084
1,629,376
1,716,616
8,062, 135
7,072,108
7,439,305
5,256,249
1,673, 183
124,584
2,560,892
1,629,376
6,981,731
6,512,536
7,105,781
5,011 ,447
1,518,065
115,897
2,880,084
1,716,616
85,425,852
78,514,004
1,629,376
1,716,616
87,055,228
80,230,620
$(1,001,241)
$3,149,431
$ (16,243)
$ (41,597)
$(1,017,484)
$ 3,107,834
Property tax revenue is up $ 1.6 million due to a 1 .8 percent increase in the millage rate. The
decrease in Other Taxes is due to a decrease in transfer taxes. Interest earnings increased slightly
from the previous year based on the current economic environment. All of the expenses increased
except Interest and Fiscal Charges. The increases are due to the net pension liability being posted to
the entity-wide financial statements. Interest and Fiscal Charges decreased because the District
made the final payment for the Series of 2004 bond at the end of 2013-2014.
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ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
Reporting the Districf's Most Significanf 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 l O (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 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 Sfatements
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 $19. 7 million. which is a
decrease from last year's total of $25.7 million. The decrease in the General Fund was expected due
to a portion of the fund balance, $0.3 million, that was used to balance the budget and an additional
$2. 7 million that was transferred to the Capital Reserve account. The Capital Projects fund balance
decreased due to the completion of the Compressed Natural Gas ("CNG") project. Capital Reserve
Fund balance increased due to 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,
2015 and 2014.
- 10 -
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
Fund Balance
June 30, 2015
Fund Balance
June 30, 2014
Increase
(Decrease)
General Fund
Capital Projects Fund
Capital Reserve Fund
Other Funds
$ 8,837,374
$ 11,802,092
$ (2,964,718)
3,299,585
6,877,419
692,202
6,646,639
6,559,408
692, l 32
(3,347,054)
318,011
70
Total
$ 19, 706,580
$ 25,700,271
$ (5, 993,691)
General Fund
The District's reliance upon tax revenues is demonstrated by the graph below that indicates 77
percent of total revenues for the general fund come from local taxes.
- - -· ~ Other revenue
lntergovenmental
16%
7%
earnings
0%
The table that follows helps illustrate the financial activities and balance of the General Fund.
- 11 -
---
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONfD)
JUNE 30, 2015
General Fund Revenue:
Real estate taxes
Investment earnings
Intergovernmental
Other revenue
Total
2015
2014
Dollar
Change
Percent
Change
$ 64,449,054
$ 62, 772,278
$ 1,676,776
67,523
14,600,100
5,348,145
50,413
12,853,277
6,110,702
17,110
1,746,823
(762,557}
2.67%
33.94%
13.59%
-12.48%
$ 84,464,822
$ 81,786,670
$ 2,678,152
3.27%
Real estate tax revenue increased $1. 7 million due to a 1.8 percent increase in the millage rate
and collection of interim taxes. Investment earnings increased due to market conditions.
Intergovernmental revenue increased due to the increase in retirement reimbursement.
The
retirement rate increased from 16. 93 percent to 21.4 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 transfer taxes.
Other Funds
The Capital Project Funds (33 through 39) had a decrease in fund balance due to the completion of
various capital projects including the Compressed Natural Gas ("CNG") project. Through the CNG
project, the District is converting the diesel bus fleet to CNG, which will provide energy and cost
savings in the years to come. 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 Capital Reserve Fund
continues to transfer funds
Board Policy #603 . Other
established for the purpose
(32) increased due to the need for future capital projects. The District
from the General Fund to the Capital Reserve Fund in accordance with
governmental funds consist of the Debt Service Fund (40). This fund was
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 $16 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 l each year. The most significant
budgeted fund is the General Fund.
- 12 -
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
Spending Review
The final budget for expenditures reflects required Board-approved budgetary transfers in function
categories due to spending patterns.
Dollar
Difference
Function
Code
Original
Budget
Final
Budget
Instructional Services:
Regular programs
Special programs
Vocational programs
Other instructional programs
Community college
Total Instructional Services
1100
1200
1300
1400
1700
$ 32,754,895
$ 32,645,762
11,551,778
702,037
1,624,701
926,210
47,559,621
11,658,767
702,037
1,624,701
944,210
47,575,477
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
2,840,623
4,882,640
4,329,018
730,050
1,181,274
7,719,720
5,488,138
1,055,662
201,953
28,429,078
2,840,783
4,772,846
4,434,952
765,050
1,181,274
7,615,214
5,390,988
1,056,662
201,953
28,259,722
(160}
109,794
(105,934)
(35,000)
Noninstructional Services:
Student activities
Community services
Total Noninstructional Services
3200
3300
1,483,352
170,400
1,653,752
1,489,852
170,400
1,660,252
(6,500)
Debt Service and Transfers:
Debt service/refund of
prior year receipts
lnterfund transfers
Budgetary reserve
Total Debt Service and Transfers
5100
5200
5900
8,571,806
850,000
250,000
9,671,806
8,753,806
850,000
215,000
9,818,806
$ 87,314,257
$ 87,314,257
TOTAL EXPENDITURES
109,133
(106,989)
$
(18,000)
(15,856)
104,506
97, 150
(1,000}
169,356
(6,500)
(182,000)
35,000
(147,000)
Percentage
Difference
0.33%
-0.93%
0.00%
0.00%
-1.94%
-0.03%
-0.01 %
2.25%
-2.45%
-4.79%
0.00%
1.35%
1.77%
-0.09%
0.00%
0.60%
-0.44%
0.00%
-0.44%
-2.12%
0.00%
14.00%
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:
Budgetary Reserve
5900
Final
Budget
Original
Budget
Function
Code
$
250,000
- 13 -
$
215,000
Dollar
Difference
$
35,000
Percentage
Difference
14.00%
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
The variance in the Budgetary Reserve is due to a transfer to special education services for
contracted services to meet the needs of a student that entered the District after the budget was
approved.
As the graph below illustrates, the largest portions of General Fund expenditures are for salaries and
benefits. The District is an educational service entity and, as such, is labor-intensive.
----- -
- - -- -
--
- ------
-
- -
- - - - -- - -- - ~
Debt/transfers/prior
Miscellaneous
Salaries
44%
Supplies _ _
10%
Purchased services
7%
Benefits
25%
General Fund:
Salaries
Benefits
Purchased services
Supplies
Equipment
Miscellaneous
DebUtransfers/prior
TOTAL EXPENDITURES BY OBJECT
2015
2014
$ 37,937,534
$ 37,193,773
21,774,864
6,514,879
8,507,372
672,885
253,817
11,407,859
17,674,502
6,458,990
8,481,836
621 ,791
254,276
13,188,052
$ 87,069,210
$ 83,873,220
- 14 -
Increase
{Decrease}
$
743,761
4,100,362
55,889
25,536
51,094
(456)
{1,780,193}
$ 3,195,993
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
Expenditures increased $3 .2 million, or 3.81 percent, over the prior year. The increase was partially
due to an increase in salaries and benefits. The retirement rate increased from 16. 93 percent in 2014
to 21.40 percent in 2015. The District is mandated to fund the retirement program for its employees.
Fifty percent of the retirement expense is reimbursed to the District from the Commonwealth of
Pennsylvania.
CAPITAL ASSETS
At June 30, 2015, the District's governmental activities had $112,054,335, net of depreciation,
invested in a broad range of capital assets, including land, buildings, and furniture and equipment.
Business-type activities owned $140 ,432 worth of net capital assets. These assets consist of movable
equipment that will be depreciated in future years.
2014
2015
$
Land
Construction-in-progress
Land improvements
Buildings
Furniture and equipment
6,253,838
839,265
2,034,123
92,907,157
10,160,384
$112,194,767
$
6,253,838
1,656,532
2, 101 ,973
92,848,270
8,797,606
$111,658,219
The increase in furniture and equipment is the result of the purchase of CNG buses as part of the CNG
project. More detailed information about the District's capital assets is presented in Notes l and 5 to
the financial statements.
DEBT ADMINISTRATION
As of July l , 2014 , the District had total outstanding bonds of $78 ,240,000 . Total bonds outstanding as
of June 30, 2015 was $72,290,000.
Outstanding Bonds
2014
2015
General Obligation Bonds
- Bond Series B of 2013
- Bond Series A of 2013
- Bond Series 2012
- Bond Series 2011
- Bond Series AA of 201 O
- Bond Series A of 2010
- Bond Series AA of 2009
- Bond Series A of 2009
- Bond Series A of 2007
- Bond Series B of 2007
$
5,705,000
14,350,000
9,235,000
8,280,000
280,000
14,485,000
2,270,000
3,185,000
14,455,000
45,000
$ 72,290,000
TOTAL
- 15 -
$
5,710,000
14,395,000
9,240,000
8,285,000
3,775,000
14,505,000
3,125,000
4,685,000
65,000
14,455,000
$ 78,240,000
ROSE TREE MEDIA SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A) - UNAUDITED (CONT'D)
JUNE 30, 2015
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/Stable rating reflected the District's stable financial performance, limited tax base, and
manageable debt position. The District's fiscal performance and position have historically been
sound . The District's remaining borrowing capacity is $111 million. The District's bonds payable total
as of June 30, 2015 is $72.3 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. The District's assessment value
has changed slightly over the past several years as a result of tax appeals. Additional housing
developments are in various planning stages throughout the four municipalities located within the
District. Approximately 25 percent of the new housing units are age targeted or restricted, which will
limit enrollment increases. The Granite Run Mall was purchased by a new owner. The new property
owner has proposed major renovations that will take place over next several years. The renovations
include the addition of 385 one or two bedroom apartment units. The interior mall will be demolished
and replaced with new stores, restaurants and entertainment facilities. Those renovations should
increase the assessment value in the near future. The District has maintained a stable tax base and
has maintained a AA/Stable Standard and Poor's bond rating. The District continues to perform well
academically as well as being attractive to homeowners. Investment earnings have increased, but
are producing a low yield 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 completed an
energy savings project on facilities throughout the District, which will improve energy efficiency and
provide cost savings. In 2014 the District replaced one third of its bus fleet 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.
As of this date, there has been no significant progress on the passage of the State budget for the
2015-2016 fiscal year. As a result, the District has not received the majority of its $14.8 million
budgeted revenue for state and federal sources, which comprises approximately 17 percent of total
revenues. The District has received approximately $1.6 million in property tax relief funded through
state revenue. If the budget impasse continues into calendar year 2016, the District may need to
consider short-term borrowing options to fund day-to-day operations this spring.
CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT
The District's financial report is designed to provide citizens, taxpayers, parents, students, investors,
and creditors with a general overview of the District's finances and to show the Board's accountability
for the monies it 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.
- 16 -
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET POSITION
JUNE 30, 2015
(With Summarized Comparative Data for June 30, 2014)
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
ASSETS:
Cash and cash equivalents
Investments
Taxes receivable
Due from other governments
Prepaid expenses
Internal balances
Other receivables
Inventories
Land
Construction-in-progress
Land improvements
Buildings and improvements
Furniture and equipment
Accumulated depreciation
TOTAL ASSETS
Governmental
Activities
Business-type
Activities
$
$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES ,
AND NET POSITION (DEFICIT)
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 leases payable
Accumulated compensated absences/
early retirement incentives
Portion due or payable after one year:
Bonds payable in future years, net
Capital leases payable
Accumulated compensated absences/
early retirement incentives
Other post-employment benefits
Net pension liability
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES :
Deferred pension
TOTAL DEFERRED INFLOWS OF RESOURCES
NET POSITION (DEFICIT)
Net investment in capital assets
Unrestricted (deficit)
TOTAL NET POSITION (DEFICIT)
TOTAL LIABILITIES AND NET POSITION (DEFICIT)
597,794
$
16,958
(33,095)
62,155
27,508
6,253 ,838
839,265
3,500,582
150,633,405
33,576,250
(82,749,005)
139, 193,628
DEFERRED OUTFLOWS OF RESOURCES
Deferred amounts on bond refunding
Deferred pension contributions
Deferred pension
TOTAL DEFERRED OUTFLOWS OF RESOURCES
OF RESOURCES
TOTAL ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
8,447, 106
14,585,000
1,646,392
1,838,874
825
33,095
588,001
Totals
2015
9,044,900
14,585,000
1,646,392
1,855,832
825
2014
$
650,156
27,508
6,253,838
839,265
3,500,582
150,633,405
33,930,617
(82,962,940)
140,005,380
354 ,367
(213,935)
811 ,752
3,234,504
26,427,027
1,717,803
2,129,115
9,600
553,849
29,510
6,253,838
1,656,532
3,447,275
146,006,469
31,939,841
(77,645,736)
145,759,627
97,413
7,622,444
117,827
78,728
1,217
97,413
7,701, 172
119,044
112,794
5,858,729
7,837,684
79,945
7,917 629
5,971,523
~ 147,923,009
~
151,731 ,150
$
$
1,755,816
2,927,531
545, 172
628,119
499, 172
335,786
~ 147,031,312
~
891,697
$
$
51 ,918
1,613,269
3,728,987
294,240
119,582
452,667
64,074
26,349
1,665,187
3,728, 987
294,240
119,582
452,667
90,423
6,545,463
658,942
6,545,463
658,942
6,275,463
779, 183
198,466
198,466
174,925
67,005,079
275,995
67 ,005,079
275,995
73,550,542
826 ,864
2,357,562
1,119,176
112,317,930
196,751,432
1, 160,070
1,238,337
2,357,562
1,119,176
113,478,000
197,989,769
2,221,578
905,275
117,896,000
209,321,426
8,453,686
8,453,686
87,314
87,314
8,541,000
8,541,000
40,993,710
(99,167,516)
(58,173,806)
$147,031,312
140,432
(574,386)
(433,954)
$
The accompanying notes are an integral part of these financial statements.
- 17 -
891 697
41 ,134, 142
(99,741,902)
(58,607, 760)
$ 147,923,009
36,985,600
(94,575,876)
(57,590,276)
$151,731,150
$87,055,228
1,629,376
1,629,376
$53,237,396
7,918, 136
7,216, 107
7,439,305
5,256,249
1,673, 183
124,584
2,560,892
85,425,852
- 18 -
NET POSITION (DEFICIT), END OF YEAR
NET POSITION (DEFICIT), BEGINNING
OF YEAR, RESTATED
$(58, 173,806)
(57, 172,565)
$ (433.954)
(417,711)
(16,243)
$(58.607.760)
(57,590,276)
(1,017,484)
(1,001,241)
(73,082,468)
(16,318)
(16,318)
CHANGE IN NET POSITION
75
75
(16,318)
(16,318)
(16,318)
$ (45,327,378)
(6,790,596)
(6,792,703)
(6,975, 197)
(3,807,484)
(1,447,611)
(21,891)
(1,903,290)
(73,066,150)
4,341,570
78,280
393,806
72,064,984
$
4,341,570
78,205
393,806
72,064,909
(73,066, 150)
$(45,327,378)
(6,790,596)
(6, 792, 703)
(6,975, 197)
(3,807,484)
(1,447,611)
(21,891)
(1 ,903,290)
(73,066, 150)
65,825,434
1,425,894
$
$
$ (57 ,590,276)
(60,698, 110)
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, 152,944)
(67,452,035)
Net (Expense) Revenue and Changes in Net Position
BusinessGovernmental
type
Totals
Activities
Activities
2015
2014
65,825,434
1,425,894
$10,675,620
417,091
417,091
$ 6,040,212
1, 127,540
423,404
464,108
1,448,765
89,089
7,809
657,602
10,258,529
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
$ 3.297.140
1, 195,967
1, 195,967
2,101 , 173
136,483
94,884
$1 ,869,806
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
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2015
(With Summarized Comparative Data for the Year Ended June 30, 2014)
5,110,310
6, 185,000
1,646,392
33,095
1,838,874
825
588,001
$ 15,402,497
1,782,808
8,837,374
16,498
4,707
26,717
2,440,360
4,565,459
825
300,371
3,300,000
Capital
Projects
Fund
3,299,585
3,299,585
300,786
67,864
232,922
- 19 -
$ 3.600,371
$
$ 3.600,371
$
The accompanying notes are an integral part of these financial statements.
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
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 PCHS Science
Assigned - Summer School
Assigned for Save Our Steinway
Unassigned
TOTAL FUND BALANCES
1,414,095
1,114,095
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - delinquent taxes
TOTAL DEFERRED INFLOWS OF RESOURCES
1,039,919
3,728,987
119,582
64,074
198,466
5,151,028
$
$ 15,402,497
$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
LIABILITIES:
Accounts payable
Retainage payable
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
2,344,223
5, 100,000
6,877,419
6,877,419
566,804
505,486
61 ,318
$ 7.444,22L
$
$ 7.444,223
$
Capital
Reserve
Fund
ROSE TREE MEDIA SCHOOL DISTRICT
BALANCE SHEET-GOVERNMENTAL FUNDS
JUNE 30, 2015
(With Summarized Comparative Data for June 30, 2014)
692,202
692,202
692.202
692,202
~202
$
$
$
Debt
Service
Fund
8,447,106
14,585,000
1,646,392
33,095
1,838,874
825
588,001
1,782,808
19,706,580
16,498
4,707
26,717
2,440,360
825
10,177,004
692,202
4,565,459
1 414 095
1 414 095
1,613,269
294,240
3,728,987
119,582
64,074
198,466
6,018,618
$ 27,139,293
$
$ 27.139.293
$
2015
Totals
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
6,874
14,300
6,330
4,005,164
25,700,271
1,475 075
1,475 075
1,584,853
545, 172
2,927,531
628,119
308,812
174,925
6,169,412
$ 33.344, 758
$
$ 33.344. 758
$
2014
ROSE TREE MEDIA SCHOOL DISTRICT
RECONCILIATION OF BALANCE SHEET-GOVERNMENTAL FUNDS
TO STATEMENT OF NET POSITION
JUNE 30, 2015
$ 19,706,580
TOTAL GOVERNMENTAL FUND BALANCES
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
Construction-in-progress
Land improvements
Buildings and improvements
Furniture and equipment
Accumulated depreciation
6,253,838
839,265
3,500,582
150,633,405
33,576,250
(82,749,005)
112,054,335
(73,550,542)
(934,937)
(2,357,562)
(452,667)
(1,119,176)
(112,317,930}
(190,732,814)
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
Net pension liability
Refunded debt resulted in deferred outflows of resources which will be
amortized over the life of new debt but do not represent current rights.
97,413
Deferred inflows and outflows of resources related to the District's
pension plan do not represent current resources or uses of resources
and, therefore, are not reported in the funds . Deferred inflows and
outflows of resources consist of the following :
Deferred outflows of resources:
Deferred pension contributions
Deferred pension
Deferred inflows of resources :
Deferred pension
7,622,444
117,827
(8,453,686)
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 (DEFICIT) OF GOVERNMENTAL ACTIVITIES
The accompanying notes are an integral part of these financial statements.
- 20 -
(713,415)
1,414,095
$ (58.173,806)
- 21 -
$ 3,299,585
The accompanying notes are an integral part of these financial statements.
$ 8,837,374
11,802,092
FUND BALANCES, BEGINNING OF YEAR
FUND BALANCES, END OF YEAR
(3,347,054)
(2,964,718)
NET CHANGES IN FUND BALANCES
6,646,639
143,999
143,999
(3,491,053)
3,506,400
ll, 6,877,419
6,559,408
318,011
3,015, 170
3,015, 170
(2,697,159)
2,469,091
114,460
2,702,511
3,362,401
5,352
5,352
118,960
$
Capital
Reserve
Fu nd
143,999
15,347
15,347
{3,015, 170}
(3,015, 170)
50,452
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
$
Capital
Projects
Fund
OTHER FINANCING SOURCES (USES)
Proceeds of bond
Proceeds of extended term financing
Premium on bond issuance
Bond refunding payment
Interfu nd transfers
TOTAL OTHER FINANCING SOURCES (USES)
8,753,019
84,414,370
46,752,996
27,362,400
1,545,955
$69,864,722
13, 197,777
1,402,323
84,464,822
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
$
$
692,202
692,132
70
70
70
70
Debt
Service
Fund
$19, 706,580
25,700,271
( 5,993,691)
143,999
143,999
(6,137,690)
46,752,996
27,625,359
1,545,955
5,831,492
8,867,479
90,623,281
$69,885,491
13,197,777
1,402,323
84,485,591
2015
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2015
(With Summarized Comparative Data for the Year Ended June 30, 2014)
Totals
$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
$68,948,456
12,054,529
798,748
81,801,733
2014
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, 2015
NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS
$ (5,993,691)
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 ($6,790,064) exceeded depreciation expense ($6,225,030) in the period.
565,034
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.
(60,980)
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.
5,950,000
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.
325,463
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.
671, 110
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).
(135,984)
Other post-employment benefits include post-employment healthcare benefits and all post-employment
benefits provided separately from a pension plan, excluding benefits defined as termination offers and
benefits. The annual cost represents the employer's contribution to the plan which includes the implicit
rate subsidy. In the governmental funds, however, expenditures for these items are measured by the
amount of financial resources used (essentially, the amount acutally paid).
(213,901)
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.
46,505
In the statement of activities, pension expense reflects the change in net pension liability, net of deferrals.
In the governmental funds, however, pension expenditures reflect payments made to fund the pension plan.
This is the amount by which the change in net pension liability and related deferrals ($9, 761,860) exceeded
pension contributions during the year ($7,622,444).
(2,139,416)
$
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES
The accompanying notes are an integral part of these financial statements.
- 22 -
(1,001,241)
ROSE TREE MEDIA SCHOOL DISTRICT
BUDGETARY COMPARISON STATEMENT - GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2015
Budgeted Amounts
Final
Ori9inal
REVENUES
Local sources
State sources
Federal sources
TOTAL REVENUES
Actual
{GAAP Basis)
Variance with
Final Budget
Positive
{Negative)
$
$ 69,431,873
$ 69,431 ,873
$ 69,864,722
13,155,632
1,224, 100
83,811,605
13,155,632
1,224, 100
83,811 ,605
13,197,777
1,402,323
84,464,822
432,849
42, 145
178,223
653,217
32,754,895
11,551,778
702,037
1,624,701
926,210
47,559,621
32,645,762
11,658,767
702,037
1,624,701
944,210
47,575,477
31,914,632
11,658,001
654,881
1,581 ,332
944,150
46,752,996
731, 130
766
47, 156
43,369
60
822,481
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
2,840,623
4 ,882,640
4,329,018
730,050
1,181,274
7,719,720
5,488,138
1,055,662
201,953
28,429,078
2,840,783
4,772,846
4,434,952
765,050
1,181,274
7,615,214
5,390,988
1,056,662
201,953
28,259,722
2,823,498
4,681,096
4,434,422
752,952
1,145,769
7,404,559
5,089,146
903,000
127,958
27,362,400
17,285
91,750
530
12,098
35,505
210,655
301,842
153,662
73,995
897,322
1,483,352
170,400
1,653,752
8,571,806
86,214,257
1,489,852
170,400
1,660,252
8,753,806
86,249,257
1,421,371
124,584
1,545,955
8,753,019
84,414,370
68,481
45,816
114,297
787
1,834,887
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES
(2,402,652)
(2,437,652)
50,452
2,488, 104
OTHER FINANCING USES
Budgetary reserve
Transfers out
TOTAL OTHER FINANCING USES
(250,000)
(850,000)
(1 ,100,000)
(215,000)
(850 ,000)
(1 ,065,000)
(3,015,170)
(3,015 ,170)
NET CHANGE IN FUND BALANCE
(3,502,652)
(3,502,652)
(2,964,718)
FUND BALANCE, BEGINNING OF YEAR
11,802,092
11,802,092
11,802,092
$ 8,299,440
$ 8,299,440
$ 8,837,374
FUND BALANCE, END OF YEAR
The accompanying notes are an integral part of these financial statements.
- 23-
215,000
(2 , 165, 170)
(1 ,950, 170)
537,934
$
537,934
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENTS OF NET POSITION -PROPRIETARY FUND
JUNE 30, 2015
(With Comparative Data for June 30, 2014)
Major Enterprise Fund
Food Service Fund
2015
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Due from other governments
Accounts receivable
Inventories
Total Current Assets
$
PROPERTY AND EQUIPMENT:
Net furniture and equipment
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION (DEFICIT)
CURRENT LIABILITIES:
Accounts payable
Due to other funds
Unearned revenue
Total Current Liabilities
$
726,629
15,852
19,609
29,510
791,600
140,432
168,918
78,728
1,217
79,945
59,893
59,893
$
924,792
$ 1,020,411
$
51,918
33,095
26,349
111,362
$
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension contributions
Deferred pension
Total Deferred Outflows of Resources
TOTAL ASSETS AND DEFERRED
OUTFLOWS OF RESOURCES
597,794
16,958
62,155
27,508
704,415
2014
NONCURRENT LIABILITIES:
Net pension liability
1,160,070
DEFERRED INFLOWS OF RESOURCES
Deferred pension
170,963
34,950
26,974
232,887
1,205,235
87,314
NET POSITION (DEFICIT):
Net investment in capital assets
Unrestricted ( deficit)
Total Net Position (Deficit)
140,432
{574,386)
{433,954)
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND NET POSITION
$
924,792
The accompanying notes are an integral part of these financial statements.
- 24 -
168,918
{586,629)
{417,711)
$ 1,020,411
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2015
(With Comparative Data for the Year Ended June 30, 2014)
Major Enterprise Fund
Food Service Fund
2015
2014
$ 1,195,967
$ 1,283,321
1,195,967
1,283,321
393,836
236,302
233,426
81,003
647,728
37,081
1,629,376
384,141
200,292
277,647
74,564
741,449
38,523
1,716,616
(433,409)
(433,295)
NONOPERATING REVENUES
Earnings on investments
State sources
Federal sources
TOTAL NONOPERATING REVENUES
75
85,248
331,843
417, 166
70
72,742
318,886
391,698
CHANGE IN NET POSITION
(16,243)
(41,597)
(417,711)
(376,114)
OPERATING REVENUES
Food service revenues
TOTAL OPERATING REVENUES
OPERATING EXPENSES
Salaries
Employee benefits
Purchased professional and technical services
Purchased property services
Supplies
Depreciation
TOTAL OPERATING EXPENSES
OPERATING LOSS
NET POSITION (DEFICIT), BEGINNING OF YEAR, RESTATED
$
NET POSITION (DEFICIT), END OF YEAR
The accompanying notes are an integral part of these financial statements.
- 25 -
(4331954}
$
(417,711}
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENTS OF CASH FLOWS- PROPRIETARY FUND
FOR THE YEAR ENDED JUNE 30, 2015
(With Comparative Data for the Year Ended June 30, 2014)
Major Entererise 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
2015
2014
$ 1,152,796
$ 1,270,530
(1,009,307)
(609,896)
(466,407)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:
State sources
Federal sources
NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES
(1,030,937)
(580,623)
(341,030)
85,285
260,807
346,092
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Equipment acquisition
NET CASH USED BY CAPITAL AND RELATED FINANCING ACTIVITIES
72,337
224,854
297,191
(8,595)
(8,595)
CASH FLOWS FROM INVESTING ACTIVITIES:
Earnings on investments
NET CASH PROVIDED BY INVESTING ACTIVITIES
(20,311)
(20,311)
75
75
NET DECREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
$
CASH AND CASH EQUIVALENTS, END OF YEAR
70
70
(128,835)
(64,080)
726,629
790,709
597,794
$
726,629
RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY
OPERATING ACTIVITIES
CASH FLOWS FROM OPERATING ACTI VITIES:
Operating loss
Adjustments to reconcile operating loss to net cash used by
operating activities:
Depreciation
Donated commodities
(Increase) Decrease in:
Accounts receivable
Inventories
Deferred pension contributions
Deferred pension
Increase (Decrease) in:
Accounts payable
Due to other funds
Unearned revenue
Net pension liability
Deferred pension
NET CASH USED BY OPERATING ACTIVITIES
SUPPLEMENTAL DISCLOSURE
NONCASH NONCAPITAL FINANCING ACTIVITY:
USDA donated commodities
$ (433,409)
The accompanying notes are an integral part of these financial statements.
- 26 -
$ (433,295)
37,081
69,893
38,523
90,995
(42,546)
2,002
(18,835)
(1 ,217)
(10,228)
(7,900)
(119,045)
(1,855)
(625)
(45, 165)
87,314
$ (466,407)
(20,372)
3,810
(2,563)
$ (341,030)
$
$
69,893
90,995
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENT OF NET POSITION· FIDUCIARY FUNDS
JUNE 30, 2015
PrivatePurpose
Trust
Agency Fund
Student
Activities
ASSETS
Cash
$
26,426
$
156,450
TOTAL ASSETS
$
26,426
$
156,450
$
2,500
$
LIABILITIES AND NET POSITION
LIABILITIES:
Accounts payable
Other current liabilties
156,450
156,450
2,500
NET POSITION:
Reserved for trust
23,926
$
TOTAL LIABILITIES AND NET POSITION
261426
The accompanying notes are an integral part of these financial statements.
- 27 -
$
156,450
ROSE TREE MEDIA SCHOOL DISTRICT
STATEMENTS OF CHANGES IN NET POSITION· FIDUCIARY FUND
FOR THE YEAR ENDED JUNE 30, 2015
(With Comparative Data for the Year Ended June 30, 2014)
Private-Purpose Trust
2015
2014
ADDITIONS
$
Local contributions
17,578
$
17,427
17,578
17,427
Fees paid and scholarships awarded
15,400
12,450
TOTAL DEDUCTIONS
15,400
12,450
2,178
4,977
21,748
16,771
TOTAL ADDITIONS
DEDUCTIONS
CHANGE IN NET POSITION
NET POSITION, BEGINNING OF YEAR
$
NET POSITION, END OF YEAR
23,926
The accompanying notes are an integral part of these financial statements.
- 28 -
$
21 ,748
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE l
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The 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 the 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. The 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.
- 29 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
The entity-wide statement of activities presents a comparison between expenses and program
revenues for each function of the business-type activities of the District and for each
governmental function. Expenses are those that are specifically associated with a service or
program and are, therefore, clearly identifiable to a particular function . Program revenues
include charges paid by the recipients of the goods or services offered by the programs and
grants and contributions that are restricted to meeting the operational or capital requirements of
a particular function. Revenues which are not classified as program revenues are presented as
general revenues. The comparison of program revenues and expenses identifies the extent to
which each function is self-financing or draws from the general revenues of the District.
Except for interfund activity and balances between the funds that underlie governmental
activities and the funds that underlie business-type activities, which are reported as transfers and
internal balances, the effect of interfund activity has been removed from these statements.
The entity-wide financial statements report net 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. ft accounts for all financial
resources of the general government, except those required to be accounted for in another fund.
- 30 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
The Capital Projects Fund is used to account for the acquisition, construction, and renovation of
major capital facilities and their related capital assets.
The Capital Reserve Fund is used to accumulate resources for future capital needs of the District.
The Debt Service Fund is used to account for funds segregated to pay for future debt service
payments.
Revenue Recognition
In applying the "susceptible to accrual concept" under the modified accrual basis, revenues are
considered to be available when they are collectible within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the government considers tax
revenue to be available if collected within 60 days of the end of the fiscal period. Revenue from
federal, state, and other grants designated for payment of specific District expenditures is
recognized when the related expenditures are incurred; accordingly, when such funds are
received, they are reported as 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 all "building-wide costs" to the
proprietary fund. However, the food service department does partially refund these costs to the
general fund. Similarly, the proprietary fund does not recognize a cost for the building space it
occupies.
- 31 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
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.
Fiduciary Funds
Fiduciary funds account for the assets held by the District as a trustee or agent for individuals,
private organizations and/or governmental units and are, therefore, not available to support the
District's own programs. The District accounts for these assets in a private-purpose trust and
agency fund. The private-purpose trust fund accounts for activities in various scholarship
accounts, whose sole purpose is to provide annual scholarships to particular students as
described by donor stipulations. The agency fund accounts for funds held on behalf of students
of the District, and escheat funds. The measurement focus and basis of accounting for the
private-purpose trust is the same as for proprietary funds, while the agency fund is custodial in
nature (assets equal liabilities) and does not involve measurement of results of operations .
Cash and Cash Equivalents
The District's cash and cash equivalents are considered to be cash on hand, demand deposits,
and short-term investments with original maturities of three months or less from the date of
acquisition.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at
the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current
portion of interfund loans) or "advances to/from other funds" (i.e., the noncurrent portion of
interfund loans). Any residual balances outstanding between the governmental activities and
business-type activities are reported in the entity-wide financial statements as "internal balances."
The District does not record an allowance for uncollectible taxes because it is considered to be
immaterial.
Property Taxes
Property taxes attach as an enforceable lien on property as of July 1. Taxes are levied on July 1
and are payable in the following periods:
July 1 - August 31
September 1 - October 31
November 1 to collection
February 28
-
Discount period, 2% of gross levy
Face Period
Penalty Period, 10% of gross levy
Lien Date
- 32 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE l
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Real estate faxes for the District are collected from the Townships of Edgmont, Middletown, and
Upper Providence and the Borough of Media. The fax on real estate in those municipalities for
public school purposes for fiscal 2014 - 2015 was 23 .3367 mills ($23.3367 per $1,000 of assessed
valuation) as levied by the Board of School Directors. Assessed valuations of property are
determined by the Delaware County Board of Assessment.
Prepaid Items and Inventories
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid items in both entity-wide and fund financial statements.
All inventories are valued at the lower of cost (first-in, first-out method) or market.
Capital Assets
Capital assets, which include property, plant, and equipment, are reported in the applicable
governmental or business-type activities columns in the entity-wide and proprietary fund financial
statements. Capital assets are defined by the District as assets with an initial, individual cost of
more than $1 ,500 or $10,000 in the aggregate and an estimated useful fife in excess of one year.
Such assets are recorded at historical cost if purchased or constructed . Purchased equipment at
less than $1,500 yet deemed critical to inventory control will be recorded at its original cost.
Donated capital assets are recorded at estimated fair value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets' lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed,
inclusive of ancillary costs.
Property, plant, and equipment of the District are depreciated using the straight-line method over
the following estimated useful lives:
40 years
20 years
3-20 years
8 years
School buildings
Site improvements
Furniture and equipment
Vehicles
Compensated Absences
District policies permit employees to accumulate earned but unused vacation, personal, and sick
days as stipulated in each bargaining unit's contract. The liability for these compensated
absences is recorded as long-term debt in the entity-wide financial statements . The current
portion of this debt is estimated based on historical trends. In the fund financial statements,
governmental funds report only the compensated absence liability payable from expendable
available financial resources.
- 33 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Long-term Obligations
In the entity-wide financial statements and proprietary fund financial statements, long-term debt
and other long-term obligations are reported as liabilities.
Bond premiums and 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 hos four 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. Pension
contributions made subsequent to the measurement date, and therefore not reflected in the net
pension liability under full accrual basis reporting, are reported as o deferred outflow of resources
on the entity-wide and proprietary fund statements of net position. Certain changes to the net
pension liability are required to be amortized over a period of years; the unamortized portions of
these changes are reflected as deferred outflows and inflows of resources on the entity-wide and
proprietary fund statements of net position.
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 some three components of net position as
do the entity-wide financial statements. When on 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.
- 34 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE l
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
As of June 30, 2015, fund balances of the governmental funds are classified, if applicable, as
follows:
Nonspendable - amounts that cannot be spent either because they are in nonspendable form or
because they are legally or contractually required to be maintained intact.
Restricted - amounts that can be spent only for specific purposes because of constitutional
provisions or enabling legislation or because of constraints that are externally imposed by
creditors, grantors, contributors, or the laws or regulations of other governments.
Committed - amounts that can be used only for specific purposes determined by formal action
of the Board of School 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 School 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, 2014, 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.
- 35 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE l
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
Implementation of GASB Statements
During the year ended June 30, 2015, the District implemented GASB Statement No. 68,
':A.ccounting and Financial Reporting for Pensions," and GASB Statement No. 71 . "Pension
Transition for Contributions Made Subsequent to the Measurement Date -An Amendment of GASB
Statement No. 68 ." GASB Statement No. 68 replaces the requirements ofGASB Statement No. 27,
with the objective of improving the accounting and financial reporting of state and local
governments for pensions. It requires that state and local governments recognize and record the
actuarially determined net pension liability or, for multi-employer cost sharing plans, the entity's
share of the net pension liability in the entity's financial statements.
GASB Statement No. 71 amends GASB Statement No. 68 and addresses an issue regarding
application of the transition provisions in the year of implementation. It requires that in the year of
implementation, the state or local government recognize a beginning deferred outflow of
contributions for its pension contributions made after the date of measurement.
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.
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.
- 36 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 3
DEPOSITS AND INVESTMENTS
Deposffs
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, 2015, the carrying amount of the District's deposits was $9,227, 776,
and the bank balance was $10,042,883. 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, 2015, the District had the following investments:
Certificates of deposit due within one year - collateral
held by pledging bank's agent in the District's name
$ 14,585,000
Interest Rate Risk
The District does not have a formal investment policy that limits investment maturities as a means
of managing its exposure to fair value losses arising from increasing interest rates.
Credit Risk
The District has no investment policy that would limit its investment choices to those with certain
credit ratings. As of June 30, 2015, 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.
- 37 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
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, 2015 was as follows:
Beginning
Balance
GOVERNMENTAL ACTIVITIES:
Capital assets not being depreciated:
Land
Construction-in-progress
Ending
Balance
Decreases
Increases
836,721
1,653,988
6,253,838
839,265
7,910,370
836, 721
1,653,988
7,093,103
Capital assets being depreciated:
Land improvements
Buildings and improvements
Furniture and equipment
3,447,275
146,006,469
31,556,476
53,307
4,626,936
2,927,088
907,314
3,500,582
150,633,405
33,576,250
Total Capital Assets Being Depreciated
181,010,220
7,607 ,331
907,314
187,710,237
Less accumulated depreciation for:
Land improvements
Buildings and improvements
Furniture and equipment
1,345,302
53, 158, 199
22 ,927,788
121,157
4,568 ,049
1,535,824
907,314
1,466,459
57,726,248
23,556,298
Total accumulated depreciation
77,431,289
6,225,030
907,314
82,749,005
103,578,931
1,382,301
GOVERNMENTAL ACTIVITIES ASSETS, NET
$111,489,301
$2,219,022
BUSINESS-TYPE ACTIVITIES:
Capital assets being depreciated:
Machinery and equipment
$
6,253,838
1,656,532
$
Total Capital Assets Not Being
Depreciated
Total Capital Assets Being Depreciated,
Net
$
$
- 38 -
168,918
$
8,595
$
-
$
104,961,232
$1 ,653,988
$
(37,081)
(214,448)
Less accumulated depreciation
BUSINESS-TYPE ACTIVITIES, NET
383,366
$
!28,486) $
$112,054,335
(37,594) $
37,594
-
354,367
(213,935)
$
140,432
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 5
CAPITAL ASSETS (cont'd)
Depreciation expense was charged to functions/programs of the District as follows:
Governmental Activities:
Instruction
Instructional student support
Administrative and financial support services
Operation and maintenance of plant services
Pupil transportation
Student activities
NOTE 6
$
4,902, l 83
630,509
26,304
127,040
323,852
215,142
Total Governmental Activities
$
6,225,030
Business-type Activities - food service
$
37,081
INTERNAL RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of June 30, 2015 is as follows:
Due To
General Fund
Amount
$
33,095
Due From
Food Service
Amount
$
33,095
lnterfund balances between funds represent temporary loans recorded at year end subsequent
to a final allocation of expenses. The balances generally ore paid shortly ofter year end .
lnterfund Transfers:
Transfers In:
Transfer Out:
General Fund
$ 3,015,170
Capital Reserve Fund
$ 3,015, l 70
Transfers represent funds set aside for the anticipation of future capital needs.
NOTE 7
GENERAL LONG-TERM DEBT
The following summarizes the changes in the long-term liabilities of governmental activities for the
year ended June 30, 2015:
- 39 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 7
GENERAL LONG-TERM DEBT (cont'd)
Balance
July 1, 2014
Bonds payable, net
Capital lease payable
Accumulated compensated
absences/early retirement
incentive
Other post-employment
benefits
$79,826,005 $
1,606,047
TOTALS
Additions
Amounts
Balance
Due Within
Reductions June 30, 2015 One Year
- $ (6,275,463)
143,999
(815,109)
2,396,503
334,450
905,275
213,901
$84, 733,830 $
692,350
(174,925)
$ 73,550,542 $ 6,545,463
934,937
658,942
2,556,028
198,466
1,119,176
$ (7,265,497) $ 78,160,683 $ 7,402,871
Bonds payable, net consists of the following :
$ 72,290,000
Bonds payable, at face
Bond premiums
Bond discounts
Bonds payable, net
1,714,329
(453,787)
$ 73,550,542
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.
$
45,000
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, 201 7. bearing
interest ranging from 2.75% to 4%, interest payable semiannually on February 15 and August 15.
3, 185,000
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.
2,270,000
Series of 2010A, maturing through February 1, 2022, bearing
interest ranging from 0.45% to 3%, interest payable semiannually on February 1 and August 1.
- 40 -
14,485,000
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 7
GENERAL LONG-TERM DEBT (cont'd)
Series of 201 OAA, maturing through May l, 2016, bearing
interest ranging from 0.8% to 3%, interest payable semiannually on May l and November l.
280,000
Series of 2011, maturing through February l, 2023, bearing
interest ranging from l % to 4%, interest payable semi-annually
on February l and August l .
8,280,000
Series of 2012, maturing through April l, 2025, bearing interest
ranging from 0.5% to 2. 7%, interest payable semi-annually
on April l and October l .
9,235,000
Series of 2013A, maturing through February l, 2019, bearing
Interest ranging from 0.55% to 4.0%, interest payable semiannually on February l and August l .
14,350,000
Series of 20138, maturing through February l, 2025, bearing
Interest ranging from 0.3% to 5.0%, interest payable semiannually on February l and August l.
5,705,000
$ 72.290,000
TOTAL
Presented below is a summary of debt service to maturity by years:
Year Ending June 30.
2016
2017
2018
2019
2020
2021-2025
NOTE 8
Principal
Maturities
Interest
Maturities
Total
Maturities
$ 6.220,000
$ 2,224,752
$ 8,444,752
6,400,000
6,590,000
6,805,000
7,355,000
38,920,000
2,045,601
1,801,672
l ,539, l 70
1,368,991
3, 757,025
8,445,601
8,391,672
8,344, 170
8,723,991
42,677,025
$ 72,290,000
$ 12,737,211
$ 85,027,211
CAPITAL LEASES - LESSEE
The District has entered into lease agreements as a lessee for financing the acquisition of
equipment used for the network throughout the District. These lease agreements qualify as
capital leases for accounting purposes and, therefore, have been recorded at the present value
of future minimum lease payments as of the inception date.
- 41 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 8
CAPITAL LEASES - LESSEE (cont'd)
The assets acquired through the capital leases are as follows:
ASSET
Equipment - Apple Inc.
Less: Accumulated depreciation
$ 2,351,521
Total
$
(1,397,278)
954,243
The future minimum lease obligations and the net present value of these minimum lease
payments as of June 30, 2015 were as follows:
Year Ending June 30,
NOTE 9
2016
2017
2018
Amount representing interest
$
674,227
244,016
35,999
(19,305)
Total
$
934,937
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,
2016
2017
$
54,711
32 ,924
Total
$
87 ,635
Rental expense for the year ended June 30, 2015 was $15 7,325.
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 that provides
retirement benefits to public school employees of the Commonwealth of Pennsylvania . The
members eligible to participate in the System include all full-time public school employees, part-
· 42 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 10
PENSION PLAN (cont'd)
time hourly public school employees who render at least 500 hours of service in the school year,
and part-time per diem public school employees who render at least 80 days of service in the
school year in any of the reporting entities in Pennsylvania. PSERS issues a publicly available
comprehensive annual financial report that includes the financial statements and required
supplementary information for the plan. A copy of this report may be obtained by writing to the
Public School Employees' Retirement System, P.O. Box 125, Harrisburg, Pennsylvania, 17108-0125,
or by visiting the PSERS website at www.psers.sfate.pa.us.
Benefits Provided
PSERS provides retirement, disability, and death benefits. Members are eligible for monthly
retirement benefits upon reaching (a) age 62, with at least one year of credited service, (b) age
60 with 30 or more years of credited service, or (c) 35 or more years of service regardless of age.
Act 120 of 201 O ("Act 120") preserves the benefits of existing members, and introduces benefit
reductions for individuals who became new members on or after July l, 2011. Act 120 created
two new membership classes, Membership Class T-E ("Class T-E"), and Membership Class T-F
("Class T-F"). To qualify for normal retirement, Class T-E and Class T-F members must work until age
65 with a minimum of three years of service, or attain a total combination of age and service that
is equal to or greater than 92, with a minimum of 35 years of service. Benefits are generally
equal to two percent or two and one-half percent, depending upon the membership class, of the
member's final average salary as defined in the Code, multiplied by the number of years of
credited service. For members whose membership started prior to July l, 2011 , after completion
of five years of service, a member's right to the defined benefits is vested, and early retirement
may be elected. For Class T-E and Class T-F members, the right to benefits is vested after fen
years of service.
Participants are eligible for disability retirement benefits offer completion of five years of credited
service. Such benefits are generally equal to two percent or two and one-half percent,
depending upon the membership class, of the member's final average salary as defined in the
Code, multiplied by the number of years of credited service, but not less than one-third of such
salary nor greater than the benefit the member would have had at normal retirement age .
Members over normal retirement age may apply for disability benefits.
Death benefits are payable upon the death of an active member who has reached age 62 with
at least one year of credited service (age 65 with at least three years of credited service for Class
T-E and Class T-F members, or who has at least five years of credited service for Class T-E and
Class T-F members). Such benefits are actuarially equivalent to the benefit that would have been
effective if the member had retired on the day before death.
Member Contributions
Active members who joined the system prior to July 22, 1983, contributed at 5.25 percent
(Membership Class T-C). or at 6.50 percent (Membership Class T-D) of the member's qualifying
compensation.
- 43 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 10
PENSION PLAN (cont'd)
Members who joined the system on or after July 22, 1983, and who were active or inactive as of
July 1, 2001, contribute at 6.25 percent (Membership Class T-C), or at 7.50 percent (Membership
Class T-D) of the member's qualifying compensation.
Members who joined the system after June 30, 2001 and before July 1, 2011 contribute at 7.50
percent (automatic Membership Class T-D). For all new hires and for members who elected Class
T-D membership, the higher contribution rates began with service rendered on or after January l ,
2002.
Members who joined the system after June 30, 2011 automatically contribute at the Membership
Class T-E rate of 7.50 percent (base rate) of the member's qualifying compensation. All new hires
after June 30, 2011, who elect Class T-F membership, contribute at 10.30 percent (base rate) of
the member's qualifying compensation. Membership Class T-E and T-F are affected by a "shared
risk" provision in Act 120 of 201 Othat in future fiscal years could cause the Membership Class T-E
contribution rate to fluctuate between 7.50 percent and 9.50 percent, and Membership Class T-F
contribution rate to fluctuate between 10.30 percent and 12.30 percent.
Employer Contributions
The District's contractually required annual contribution is based on an actuarially determined
amount that, when combined with the employee contributions, is expected to finance the costs
of benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. For the year ended June 30, 2015, the rate of the employer
contribution was 21.40 percent of covered payroll, which was comprised of 20.50 percent for
pension contributions and 0. 90 percent for healthcare contributions. The District's contribution to
PSERS for the years ended June 30, 2015, 2014, and 2013 was $8,039,272, $6, 199,268, and
$4,594, 716, respectively.
Pension Liability and Expense. and Deferred Outflows and Inflows of Resources
At June 30, 2015, the District reported a liability of $113,478,000 for its proportionate share of the
net pension liability. The net pension liability was measured as of June 30, 2014, and the total
pension liability used to calculate the net pension liability was determined by rolling forward the
system's total pension liability as of June 30, 2013 to June 30, 2014. The District's proportion of the
net pension liability was calculated utilizing the employer's one-year reported covered payroll as
it relates to the total one-year reported covered payroll. At June 30, 2014, the District's proportion
was 0.2867 percent, which was a decrease of 0.0013 percent from its proportion measured as of
June 30, 2013.
For the year ended June 30, 2015, the District recognized pension expense of $9,862,685. At
June 30, 2015 the District reported deferred outflows of resources and deferred inflows of
resources related to pensions from the following sources:
- 44 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE l O
PENSION PLAN (cont'd)
Deferred
Outflows of
Resources
Net difference between projected and
actual investment earnings
Changes in proportions
Difference between employer contributions
and proportionate share of total contributions
Contributions subsequent to the date of
measurement
$
Deferred
Inflows of
Resources
$ 8, 112,000
429,000
119,044
7,701,172
$ 7,820,216
$ 8,541,000
Deferred outflows of resources of$ 7, 701, 172, resulting from the District's contributions subsequent
to the measurement date, will be recognized as a reduction of the net pension liability in the year
ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred
inflows of resources related to pensions will be recognized in pension expense as follows:
Year Ended June 30,
2016
2017
2018
2019
2020
$ 2, l 02,688
2, l 02,688
2, l 02,688
2, l 02,688
11,204
$ 8,421,956
Actuarial Assumptions
The total pension liability as of June 30, 2014 was determined by rolling forward the system's total
pension liability as of the June 30, 2013 actuarial valuation to June 30, 2014 using the following
actuarial assumptions, applied to all periods included in the measurement:
•
•
•
•
Actuarial cost method - Entry age normal, level percentage of pay.
Investment return - 7.50 percent, including inflation of 3.00 percent.
Salary increases- effective average of 5.50 percent, which reflects an allowance for inflation
of 3.00 percent, real wage growth of 1.00 percent, and merit or seniority increases of 1.50
percent.
Mortality rates were based on the RP-2000 Combined Healthy Annuitant Tables (male and
female) with age set back three years for both males and females. For disabled annuitants,
the RP-2000 Combined Disabled Tables (male and female) with age set back seven years for
moles and three years for females.
- 45 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 10
PENSION PLAN (cont'd)
The actuarial assumptions used in the June 30, 2013 valuation were based on the experience
study that was performed for the five-year period ended June 30, 2010. The recommended
assumption changes based on this experience study were adopted by the PSERS Board of
Directors at its March 11, 2011 Board meeting, and were effective beginning with the June 30,
2011 actuarial valuation.
The long-term expected rate of return on pension plan investments was determined using the
building-block method in which best estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class. These ranges are combined to produce the long-term expected rate of return
by weighting the expected future real rates or return by the target asset allocation percentage
and by adding expected inflation.
The pension plan's policy in regard to the allocation of invested plan assets is established and
may be amended by the PSERS Board of Directors. Plan assets are managed with a long-term
objective of achieving and maintaining a fully-funded status for the benefits provided through the
pension.
A schedule of plan investments by asset class, target allocations, and long-term expected real
rate of return is as follows:
Asset Class
Public markets global equity
Private markets (equity)
Private real estate
Global fixed income
U.S. long treasuries
TIPS
High yield bonds
Cash
Absolute return
Risk parity
M LPs/i nfrastructu re
Commodities
Financing (LIBOR)
Target
Allocation
Long-term
Expected
Real Rate
of Return
19%
21%
13%
8%
3%
12%
6%
3%
10%
5%
3%
6%
(9%)
5.0%
6.5%
4.7%
2.0%
1.4%
1.2%
1.7%
0.9%
4.8%
3.9%
5.3%
3.3%
1.1%
l 00.00%
The above was the PSERS Board's adopted asset allocation policy and best estimates of
geometric real rates of return for each major asset class as of June 30, 2014.
- 46 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE l O
PENSION PLAN (cont'd)
Discount Rate
The discount used to measure the total pension liability was 7.50 percent. The projection of cash
flows used to determine the discount rate assumed that contributions from plan members will be
made at the current contribution rate and that contributions from employers will be made at
contractually required rates which are actuarially determined. Based on those assumptions, the
pension plan's fiduciary net position was projected to be available to make all projected future
benefit payments of current plan members. Therefore, the long-term expected rate of return on
pension plan investments was applied to all periods of projected benefit payments to determine
the total pension liability.
Sensitivity of the District's Proportionate Share of the Net Pension Liability to Changes in the
Discount Rate
The following presents the net pension liability, calculated using the discount rate of 7.50 percent,
as well as what the net pension liability would be if it were calculated using a discount rate that is
one percentage point lower (6.50 percent) or one percentage point higher (8.50 percent) than
the current rate.
District's proportionate share
of the net pension liability
1%
Decrease
6.50%
Current Rate
Discount Rate
7.50%
1%
Increase
8.50%
$ 141 ,548,000
$ 113,478,000
$ 89,514,000
Pension Plan Fiduciary Net Position
Detailed information about PSERS' fiduciary net position is available in PSERS Comprehensive
Annual Financial Report, which can be found on the system's website at www.psers.state.pa.us.
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
- 47 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 11
JOINT VENTURES (cont'd)
applicable schedules, there will be no subsequently scheduled rental payments made.
Inasmuch as the annual rentals include reserve funds which either are invested by Authorities or
used for advance retirement of obligations, it is anticipated that less than scheduled rentals will
eventually be paid.
Future Authority rental payments are:
Year Ending June 30,
$
2016
2017
2018
2019
2020
2021-2035
Total
(1, 156,263)
Less: Interest requirements
$ 2,946,559
Outstanding rental payments
NOTE 12
243, 127
240,868
240,474
240,367
240,047
2,897,939
4, 102,822
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 ore 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, 2015, the District had four ERIP plans in effect. The number of participants and the
present value of those benefits as of June 30, 2015 are summarized below:
- 48 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 12
SPECIAL TERMINATION BENEFITS (cont'd)
ERIP
Began
July
July
July
July
1,
l,
l,
l,
2006
2011
2013
2015
Healthcare
Premium
Total
Participants
3
15
11
8
$
23,683
159,500
221,000
170,625
$
23.683
159,500
221,000
170,625
$
574,808
$
574,808
During the year ended June 30, 2015, the cost of these benefits was $226,925.
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 granters 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, 2015, the District was in the process of several capital projects. Construction
commitments completed to date are as follows:
Contract
Amount
Project
Media Elementary School
HVAC Equipment Replacement
Rose Tree Elementary School
Replacement of HVAC Units
Glenwood Elementary School
Replacement of HVAC Units
Indian Lane Elementary School
Replacement of HVAC Units
Leak Remediation
$
- 49 -
118,700
Completed
6/30/2015
$
7,920
Commitment
$
11
o. 780
61,805
2,932
58,873
61,805
2,932
58,873
61,804
326,000
2,933
14,850
58,871
311,150
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 13
COMMITMENTS AND CONTINGENCIES (cont'd)
Contract
Amount
Project
Penncrest High School
Turf Field
Locker Room HVAC
Springton Lake Middle School Project
Asbestos Abatement
General Contractor
Electrical Contractor
Mechanical Contractor
Plumbing Contractor
Architect
ESCO
Johnson Controls
Natural Gas Bus Project
Less: Items placed in service
Total commitments related to
construction-in-progress
Completed
6/30/2015
Commitment
1,583,952
256,500
498,582
19,687
1,085,370
236,813
571,208
14,441,676
5,207,492
6,509,361
2,083,000
2,534,799
562,648
14,343,599
5,203,638
6,385,912
2,074,986
1,880,011
8,740
270, 172
23,160
123,449
25,000
681,765
9,840,967
4,820,492
48,479,561
(46,008,995)
9,797,740
4,667,017
45,465,387
(44, 915,551)
43,227
153,475
3,014, l 74
$ 2,470,566
$ 549,836
$ 3,014, l 74
In addition, the District has incurred costs in the amount of $289,429 for other projects that were
not under a formal construction commitment as of June 30, 2015.
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 2014 - 2015 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
- so -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 15
POST-EMPLOYMENT HEALTHCARE PLAN (cont'd)
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 2015, plan members receiving benefits contributed
$244,339, or approximately l 00 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.
Annual required contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
$
473,079
40,737
(55,576)
Annual OPEB cost (expense)
Contributions mode
458,240
(244,339)
Increase in net OPEB obligation
213,901
Net OPEB obligation - beginning of year
905,275
Net OPEB obligation - end of year
$
- 51 -
1,119,176
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 15
POST-EMPLOYMENT HEALTHCARE PLAN (cont'd)
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/l/2014
7/l/2012
7/1/2010
l/l/2008
$
$
$
$
Actuarial
Accrued
Liability
(AAL) Entry Age
(b)
Unfunded
AAL
(UAAL)
(b-a)
Funded
Ratio
(a/b)
Covered
Payroll
(c)
UAAL as a
Percentage
of Covered
Payroll
[(b-a)/c]
$3,358,260
$2,793,367
$3,522,969
$4,066,104
$3,358,260
$2,793,367
$3,522,969
$4,066,104
0.00%
0.00%
0.00%
0.00%
$35,094,865
$34,298,304
$34,522. 969
$30, 779,036
9.57%
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 os actual results are compared with past expectations
and new estimates ore mode 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.
In the July l, 2014 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 6.5 percent in 2014, 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, 2015 was 23 years.
- 52 -
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 16
FUND BALANCES
As of June 30, 2015, fund balances are composed of the following:
Capital
Projects
Fund
General
Fund
NOTE 17
Nonspendable
Restricted:
Capital projects
Assigned:
Debt service
Future expenditures
Future benefits funding
SLMS
PCHS Science
Summer School
Unassigned
$
Total Fund Balances
$ 8,837,374
825
Capital
Reserve
Fund
$
$
3,299,585
Debt
Service
Fund
- $
Total
Governmental
Funds
- $
6,877,419
10,177,004
692,202
692,202
4,565,459
2,440,360
16,498
4,707
26,717
1,782,808
692,202
$ 19,706,580
4,565,459
2,440,360
16,498
4,707
26,717
1,782,808
$ 3,299,585
$ 6,877,419 $
825
DEFICIT NET POSITION
For governmental activities, business-type activities, and food service fund, the unrestricted net
deficit amounts of $99, 167,516 (governmental activities) and $574,386 (business-type activities
and food service fund), respectively, includes the effect of the deferring the recognition of
pension contributions made subsequent to the measurement date of the net pension liability, the
unamortized portion of contributions made in excess of the District's share of its proportionate
contributions to its pension plan, and the deferred outflows resulting from the change in the
District's share of the net pension liability. This is offset by the District's actuarially determined
pension liability and the deferred inflows resulting from the differences between projected and
actual investment earnings.
NOTE 18
PRIOR PERIOD RESTATEMENT
The District has restated its July 1, 2013 net position in its governmental activities, business-type
activities, and food service fund to record the net pension liability and deferred outflows at June
30, 2014 in accordance with the requirements of GASB Statement No. 68 and GASB Statement No.
71, as discussed in Note 1. The net result of this change is a decrease of $110,891,929 in
governmental activities net position and a decrease of $1 , 145,342 in business-type activities and
food service fund net position.
- 53-
ROSE TREE MEDIA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
NOTE 19
SUBSEQUENT EVENTS
The District has evaluated all subsequent events through November l 0, 2015, the date the
financial statements were available to be issued.
- 54 -
REQUIRED SUPPLEMENTARY INFORMATION
ROSE TREE MEDIA SCHOOL DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF THE DISTRICT'S PROPORTIONATE SHARE
OF THE NET PENSION LIABILITY
Pennsylvania Public School Employees' Retirement System (PSERS)
June 30, 2014
District's proportion of the net pension liability
0.2867%
District's proportion of the net pension liability dollar value
$113,478,000
District's covered employee payroll
$ 36,591,524
District's proportionate share of the net pension
liability as a percentage of its covered
employee payroll
310.12%
Plan fiduciary net position as a percentage
of the total pension liability
57.24%
In accordance with GASS Statement No. 68, this schedule has been prepared prospectively as the above
information for the preceding years is not readily available. This schedule will accumulate each year until
sufficient information to present a ten-year trend is available.
- 55 -
ROSE TREE MEDIA SCHOOL DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF DISTRICT CONTRIBUTIONS
Pennsylvania Public School Employees' Retirement System (PSERS)
June 30, 2015
Contractually required contribution
$
Contributions in relation to the contractually
required contribution
7,701,172
7,701,172
Contribution deficiency (excess)
$
District's covered-employee payroll
$ 37,566,693
Contributions as a percentage of covered-employee
payroll
20.50%
In accordance with GASB Statement No. 68, this schedule has been prepared prospectively as the above
information for the preceding years is not readily available. This schedule will accumulate each year until
sufficient information to present a ten-year trend is available.
- 56 -
SINGLE AUDIT
Barbacane, Thornton & Company LLP
INDEPENDENT AUDITOR'S
REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED
ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
200 Springer Building
341 J Sil versicle Road
Wilmington, Delaware 19810
T 302.478.8940
F 302.468.4001
www.btcpa.com
November 10, 2015
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, 2015, 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 10, 2015.
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.
BARBACANE
- 57 -
1HORNTON
&COMPANY
CERTIFIED PUDLIC ACCOUNTANTS
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~~l{:,.f
LLP
BARBACANE, TH;RNTON & COMPANY LL:-zr
- 58 -
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-133
200 Springer Building
3411 Silverside Road
Wilmington, Delaware 19810
T 302.478.8940
F 302.468.4001
www.btcpa.com
November 10, 2015
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,
2015. 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.
- 59 -
BARBAO\NE
1HORNfON
&COMPANY
CERTIFlED PUBLIC ACCOU NTANTS
Board of School Directors
Rose Tree Media School District
Opinion on the Major 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, 2015.
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 identity 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
LLP
BARBACANE, TH~RNTON & COMPANY LL~
- 60 -
Federal Granter/Pass-Through Granter Project Title
Continued on next page.
Total U.S. Department of Education
Total Passed through Delaware County Intermediate Unit
Race to the Top - Phase 3
Total I.D.E.A. Program Cluster
I.D.E.A. - Section 619
I
I
84.413A
84.173
84.027
FC4100061676
062-14-0025
062-14-0025
- 61 -
07/01/12-09/30/15
07101 /1 4-06/30/15
07/01/14-06/30/15
07/01/13-09/30/14
07/01/14-09/30/15
07/01/13-09/30/14
07/01/14-09/30/15
21,428
4,595
535,117
100,057
100,131
$221,879
236,196
$
86,705
100, 131
186.836
192,295
174,988
367,283
TOTAL
RECEIVED
FOR YEAR
1,095,958
541,839
2,127
539,712
4,595
535,117
535,117
I
020-14-0368
020-15-0368
013-14-0368
013-15-0368
GRANT
AMOUNT
Subgrant from U.S. Department of Education
Passed throu11h Delaware County Intermediate Unit
I.D.E.A.
Total CFDA #84.027
84.367
84.367
84.010
84.010
GRANT PERIOD
BEGINNING/
ENDING DATES
554,119
I
I
I
I
PASSTHROUGH
GRANTOR'S
NUMBER
Total Passed through Pennsylvania Department
of Education
Title II - Improving Teacher Quality
Title II - Improving Teacher Quality
Total CFDA #84.367
Passed through Pennsylvania Department of Education
Title I - Improving Basic Programs
Title I - Improving Basic Programs
Total CFDA #84.010
U.S. Department of Education
SOURCE
CODE
FEDERAL
CFDA
NUMBER
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2015
261,371
2,127
2,127
259,244
86,705
86,705
172,539
$ 172,539
ACCRUED
REVENUE
07/01/2014
$
884,822
541,598
1,886
539,712
4,595
535,117
535,117
343,224
100,131
100,131
19,756
223,337
243,093
REVENUE
RECOGNIZED
$
884,822
541,598
1,886
539,712
4,595
535,117
535, 117
343,224
100,131
100,131
19,756
223,337
243,093
EXPENDITURES
48,349
48,349
50,235
1,886
1,886
_ _4_8,349
$
ACCRUED
REVENUE
06/30/2015
_$ 1,216,665
$ 275,537
I
=Indirect Funding
Source Code:
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331,843
$ 1,426,658
TOTALFEDERALAWARDS
N/A
N/A
331 ,843
07/01/13-06/30/1 4
07/01/14-06/30/15
14, 166
I
I
12,885
12,885
249,065
318,958
330,700
Breakfast Program
Breakfast Program
Total CFDA# 10.553
925
13,241
13,241
69,893
REVENUE
RECOGNIZED
Total U.S. Department of Agriculture
13,241
234,540
317,674
69,893
ACCRUED
REVENUE
07/01/2014
14,166
N/A
N/A
N/A
TOTAL
RECEIVED
FOR YEAR
330,700
N/A
N/A
10.553
10.553
07/01/13-06/30/ 14
07/01/14-06/30/15
07101 / 14-06/30/ 15
GRANT
AMOUNT
Total Child Nutrition Cluster
N/A
N/A
N/A
10.555
10.555
10.555
GRANT PERIOD
BEGINNING/
ENDING DATES
925
I
I
I
PASSTHROUGH
GRANTOR'S
NUMBER
925
12,101
13,026
Passed through Penns~vania Department of Education
National School Lunch Program
National School Lunch Program
Total CFDA# 10.555
U.S. Department of Agriculture
Passed through Pennsi'.!vanla Department of Agriculture
Value of U.S.D.A. Donated Commodities
Federal Grantor/Pass-Through Grantor Project Title
(cont'd}
SOURCE
CODE
FEDERAL
CFDA
NUMBER
ROSE TREE MEDIA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2015
$
1,216,665
$
65,544
15,309
15,309
331,843
331,843
784
784
14,525
14,525
12,885
12,885
249,065
318,958
69,893
EXPENDITURES
ACCRUED
REVENUE
06/30/2015
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 #10.555, Value of USDA Donated Commodities,
represent surplus food consumed by the District during the 2014 - 2015 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, 2015 was $517 ,501.
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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 OMS Circular A- 133?
_X_No
Yes
Identification of major program:
CFDA Numbers
Name of Federal Program or Cluster
84.027, 84.173
IDEA Cluster
Dollar threshold used to distinguish between
Type A and Type B programs:
$300,000
Auditee qualified as low-risk auditee?
_X_Yes
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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.
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