NORTH PENN SCHOOL DISTRICT
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2014

Unassigned - Amounts not contained in other classifications. Unassigned
amounts are technically available for any purpose. It is the policy of the School
District to follow state requirements that unassigned fund balance will not exceed
8% of the subsequent year operating budget in the unassigned category.
T
The Board of School Directors establishes (and modifies or rescinds) fund balance
commitments by passage of a resolution. Assigned fund balance is intended to be used by the
government for specific purposes but does not meet the criteria to be classified as restricted or
committed. The details of the fund balances are included in the Governmental Funds balance
sheet (page 16). Restricted funds are used first as appropriate, followed by committed
resources and then assigned resources, to the extent that expenditure authority has been
budgeted by the Board of School Directors. The School District does reserve the right to first
reduce unassigned fund balance to defer the use of these other classified funds. In the event
that unassigned fund balance becomes zero, then assigned and committed fund balances are
used in that order.
AF
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Cash
R
CASH AND INVESTMENTS
D
NOTE B
Custodial Credit Risk - Custodial credit risk is the risk that, in the event of a bank failure, the
School District’s deposits may not be returned to it. Of the bank balance, $750,000 was covered
by federal depository insurance. As of June 30, 2014, $69,193,649 of the School District’s bank
balance of $69,943,649 was exposed to custodial credit risk as follows:
Uninsured and collateral held by pledging bank’s
trust department not in the School District’s name
$
69,193,649
Interest Rate Risk - The School District’s investment policy limits investment maturities in
accordance with the Commonwealth of Pennsylvania School Code as a means of managing its
exposure to fair value losses arising from increasing interest rates.
- 34 -