AGENDA #3
LUCIA MAR UNIFIED SCHOOL DISTRICT
BOARD OF EDUCATION
Date:
December 9,20L4
To:
Jim Hogeboom, Superinter¡dent
From:
Raynee J. Daley, Ed.D
tt(
Assistant Superintendent, Business
Subject:
Acceptance,tY 20L3-L4 Audit Report for Lucia Mar Unified School District
Backsround:
The District is required to have an outside independent audit performed on an annual basis. The
District's auditors, Vavrinek, Trine, Day, & Co., LLP (VTD), have prepared the required Annual
Financial Report that accompanies this memo. A VTD representative will be present to discuss
this audit with the Board.
The auditor's opinion is stated on page 3, "ln our opinion, the finonciol statements referred to
obove present foirly, in all material respects, the respective financiol position of the governmental
activities, each major fund, ond the aggregate remoining fund information of the Lucia Mar
Unified School District, øs of June 30, 20L4, and the respective changes in finøncial position the
year then ended in accordance with accounting principles generolly occepted in the United Stotes
of Americo."
lncluded in the audit on pages 6 through 14 is the Management Discussion and Analysis (MD&A)
prepared by District staff. The MD&A is intended to provide an update to the Board on key
financial transactions during the audited fiscal year. The rest of the report has been prepared by
VTD.
The Board will find in the Reconciliation of Annual Financial and Budget Report w¡th Aud¡ted
Financial Statements for the Year Ended June 30, 2014, on page 65, that "There were no
adjustments to the Unaudited Actual Financial Report, which required reconciliation to the
audited financial statements at June 30,20t4."
Recommendation:
It is recommended that the Board of Education accept the
as prepared and presented by the firm ofVTD.
Fiscal lmpact/Support of Board Goals:
Fiscal
lmpact: Not applicable to this item.
Reference - Board Goal # 6
FY 2OL3-L4
audit report for the District
Board of Education
December 9,20L4
Page 2
Fiscal lmoact/Suooort of Board Goals:
Fiscal
lmpact: Not applicable to this item.
Reference - Board Goal # 6
Attachment: Lucia Mar Unified School District Annual Financial Report, June 30, 2014
Contact Persons:
Raynee J. Daley, Ed.D
Assistant Superintendent, Business
Rhonda Seybert
Director of Finance
Lucr¡, Mln
UNrrIno Scnoor, Drsrrucr
ANNUaI- FTNRNCINI- RBPORT
Junn 30,2014
LUCIA MAR UNIFIED SCHOOL DISTRICT
TABLE OF CONTENTS
JUNE 30,2014
FINANCIAL SECTION
2
Independent Auditors' Report
Management's Discussion and Analysis
5
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position
Statement of Activities
Fund Financial Statements
l5
l6
Governmental Funds - Balance Sheet
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
Governmental Funds - Statement of Revenues, Expenditures, and Changes in Fund
Balances
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and
Changes in Fund Balances to the Statement of Activities
Fiduciary Funds - Statement of Net Position
Notes to Financial Statements
REQUI RED SU PPLBM ENTARY I N F O RMATI
O
17
18
t9
20
22
23
N
General Fund - Budgetary Comparison Schedule
Schedule of Other Postemployment Benefits (OPEB) Funding Progress
57
58
SU PPLEMENTARY IN F ORMATION
Schedule of Expenditures of Federal Awards
Local Educ ation Agency Or ganization Structure
Schedule of Average Daily Attendance
Schedule of Instructional Time
Reconciliation of Annual Financial and Budget Report V/ith Audited Financial Statements
Schedule of Financial Trends and Analysis
Combining Statements - Non-Major Governmental Funds
Combining Balance Sheet
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Note to Supplementary Information
60
62
63
64
65
66
67
68
69
INDEPENDENT AUDITORS' REPORTS
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
Report on Compliance for Each Major Program and Report on Internal Control Over
Compliance Required by the OMB Circular A-133
Report on State Compliance
SCHEDTILE OF FINDINGS AND SUESTIONED COSTS
Summary of Auditors' Results
Financial Statement Findings
Federal Awards Findings and Questioned Costs
State Awards Findings and Questioned Costs
Summary Schedule of Prior Audit Findings
ManagementLetter
'72
74
76
79
80
81
82
83
84
This page left blnnk intentionølly.
FIIv¿,NCI¿,L SECTION
This pøge left blank intentionally.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, each major fund, and the aggregate remaining fund information
of the Lucia Mar Unified School District, as of June 30,2014, and the respective changes in financial position for
the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter - Change in Accounting Principles
As discussed in Note 15 to the financial statements, the District has elected to change its method of accounting for
cost of debt issuance as prescribed by GASB Statement No. 65, Items Previously Reported as Assets and
Liabilities. Our opinion is not modified with respect to this matter.
Other Matters
Re
quired S uppleme ntary I nfo rmat ion
Accounting principles generally accepted in the United States of America require that the required supplementary
information, such as management's discussion and analysis on pages 5 through 14, and budgetary comparison and
other postemployment benefit information on pages 57 and 58, respectively, be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. We have
applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management about
the methods of preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Lucia Mar Unified School District's basic financial statements. The accompanying supplementary
information such as the combining and individual non-major fund financial statements and Schedule of
Expenditures of Federal Awards, as required by Office of Management and Budget Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations and the other supplementary information as listed on
the table of contents, are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
The accompanying supplementary information 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 accompanying supplementary information is fairly stated, in
all material respects, in relation to the basic financial statements as a whole.
Uawinek, Trine, Day & Co., LLP
VALUE THE DIFFERENCE
Certif ied Public Accountants
INDEPENDENT AUDITOR'S REPORT
Governing Board
Lucia Mar Unified School District
Arroyo Grande, California
Report on the Financial Statements
'We
have audited the accompanying financial statements of the governmental activities, each major fund, and the
aggregate remaining fund information of the Lucia Mar Unified School District (the District) as of and for the
year ended June 30, 2014, and the related notes to the f,inancial 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; and Standards and Procedures for Audits of Caliþrnia K-12 Local Education Agencies
2013-2014, issued by the California Education Audit Appeals Panel as regulations. 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.
V/e believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
2
6051 N. Fresno Street, Suite
FRESNO
.
TAGUNA
HIttS .
101
PATO AtTO .
Fresno, CA
93710
Tel: 559.248.0871 Far 559.248.0875 www.vtdcpa.com
PTEASANTON
'
RANCHO CUCAMONGA
' RIVERSIDE '
SACRAMENTO
Other Reporting Required by Government Auditing Støndards
In accordance with Government Auditing Standards, we have also issued our report dated November 19,2014, on
our consideration of the Lucia Mar Unified 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 Lucia Mar Unified School District's internal control over financial
reporting and compliance.
Vavrinc KrTetrì., OÈ5
Rancho Cucamonga, California
November
l9,20l4
t Co'¡ L|-P
This page left blank intentionally.
Ð
l^t
LUCIA MAR UNIFIED
SCHOOL DISTRICT
hgage.Challenge. hqtue
Busrx¡ss S¡nvrc¡s D¡pRRrvrNr
602 Orchard Street, Arroyo Grande, CA 93420
Ph805.474.3000 xI070
Fax805.474.3903
This section of Lucia Mar Unified School District's (the District) annual financial repofi presents our discussion
and analysis of the District's financial performance during the fiscal year that ended on June 30, 2014,with
comparative information from 2013. Please read it in conjunction with the District's financial statements, which
immediately follow this section.
OVERVIEW OF THE FINANCIAL STATEMENTS
The Financíal Stalements
The financial statements presented herein include all of the activities of the District and its component units using
the integrated approach as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34.
The Government-l(ide Financial Statements present the financial picture of the District from the economic
resources measurement focus using the accrual basis of accounting. These statements include all assets of the
District, as well as all liabilities (including long-term obligations). Additionally, certain eliminations have
occuned as prescribed by the statement in regards to interfund activity, payables, and receivables.
The Fund Financial Statentents include statements for each of the two categories of activities: governmental and
fiduciary.
The Governmental Activities are prepared using the current financial resources measurement focus and modified
accrual basis of accounting.
The Fiduciary Activìtìes are prepared using the cunent financial resources measurement focus and modified
accrual basis of accounting.
Reconciliatìon of the Fund Financial Statements to the Government-lVide Financial Statements is provided to
explain the differences created by the integrated approach.
The Primary unit of the government is the Lucia Mar Unified School District.
LUCIA MAR UNIFIED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2014
FINANCIAL HIGHLIGHTS OF THE PAST YEAR
.
The fiscal year (FY) 2013-2014 reserve funded from unrestricted General Funds closed the year with a
minimum three percent reserve for economic uncertainties.
.
FY 2013-2014 was the first year of implementation of the new Local Control Funding Formula (LCFF),
the biggest change to public education funding in more that forty years.
o
The District completed a Facilities Master Plan in 2013-2014. This plan will provide a roadmap with
supporting datalhat will be used to help the district prioritize which projects to accomplish as funding
becomes available.
o
Voters of the State of California passed Proposition 30 and 39 in November 2012: Proposition 30 created
the Education Protection Account as well as increased funding for education. The passage ofProposition
39 provides funding to support energy efficiency at school facilities. After review ofenergy audit
information, LED lighting retrofits were completed at each school site.
o
ln20l3-2014 solar projects at were initiated at six school sites,
o
The foufth year of full TIF/TAP implementation continuedin2013-2014'
as
well
as
the District Office complex.
REPORTING THE DISTRICT AS A II/HOLE
The Statement of Net Position and the Stutement of Activities
The Statement of Net Position and the Statement of Activities report information about the District as a whole and
about its activities. These statements include a// assets and liabilities of the District using the accrual basis of
accounting which is similar to the accounting used by most private-sector companies. All of the current year's
revenues and expenses are taken into account regardless ofwhen cash is received or paid.
These two statements report the District's net position and changes in them. Net position is the difference
between assets and defened outflows of resources, and liabilities and deferred inflows of resources, which is one
way to measure the District's financial health, or financial position. Over time, increases or decreases inthe
District's net position are one indicator of whether itsfinancial health is improving or deteriorating. Other factors
to consider are changes in the District's property tax base and the condition of the District's facilities.
The relationship between revenues and expenses is the District's operating results. Since the governing board's
responsibility is to provide services to our students and not to generate profit as commercial entities do, one must
consider other factors when evaluating the overall health of the District. The quality of the education and the
safety of our schools will likely be an important component in this evaluation.
LUCIA MAR UNIFIED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2014
lnthe Statement of Net Position and the Statement of Activities, we present the District activities
as
follows:
GovernmentalAclivíties - Most of the District's services are reported in this category. This includes the
education ofkindergarten through grade twelve students, adult education students, the operation ofcafeteria
activities, and the on-going effort to improve and maintain buildings and sites. Properly taxes, State income
taxes, user fees, interest income, Federal, State, and local grants, as well as general obligation bonds, finance these
activities.
REPORTING THE DISTRICT'S MOST SIGNIFICANT FUNDS
Fund FÍnancial Statements
The fund financial statements provide detailed information about the most significant funds - not the District as a
whole. Some funds are required to be established by State law and by bond covenants. However, management
establishes many other funds to help it control and manage money for particular purposes or to show that it is
meeting legal responsibilities for using certain taxes, grants, and other money that it receives from the
U.S. Department of Education.
Governmental Funds - Most of the District's basic services are reported in governmental funds, which focus on
how money flows into and out of those funds and the balances left at year-end that are available for spending.
These funds are repofted using an accounting method called modified accrual accounting, which measures cash
and all 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 govemment operations and the basic services it provides.
Governmental fund information helps determine whether there are more or fewer financial resources that can be
spent in the near future to finance the District's programs. The differences of results in the governmental fund
financial statements to those in the government-wide financial statements are explained in a reconciliation
following each governmental fund financial statement.
THE DISTRICT AS
A TRUSTEE
ReportÍng the District's Fiduciary Responsibilities
The District is the trustee , or fiduciary, for funds held on behalf of others, like the funds for associated student
body activities, and scholarships. The District's fìduciary activities are repofted inthe Statements of Fiduciary
Net Position We exclude these activities from the District's other financial statements because the District cannot
use these assets to finance its operations. The District is responsible for ensuring that the assets reported in these
funds are used for their intended purposes.
LUCIA MAR UNIFIED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2014
THE DISTRICTAS A WHOLE
Net Position
TheDistrict'snetpositionwas$9l,720,745forthefiscalyearendedJune30,2014. Ofthisamount,$11,835,022
was unrestricted. Restricted net position are reported separately to show legal constraints from debt covenants
and enabling legislation that limit the governing board's ability to use those net position for day-to-day operations.
Our analysis below, in summary form, focuses on the net position (Table I ) and change in net position (Table 2)
of the District's governmental activities.
Table
1
Governmental Activities
(As Restated)
2013
2014
Assets
Current and other assets
Capital assets
TotalAssets
Liabilities
Current
liabilities
obligations
Long-term
Total Liabilities
Net Position
Net investment in capital
assets
Total Net
Assets
Restricted
Unrestricted
s44,501,470 s35,150,729
123,983,187 120,003,114
168,484,657 155,153,843
12,375,334
64,388,848
76,764,182
10,565,272
52,608,348
63,173,620
68,614,584 76,490,285
11,270,869 9,311,119
11,835,022 6,178,819
591,720,475
$91,980,223
The $l1,835,022 in unrestricted net position of governmental activities represents the accumularedresults of all
past years' operations.
LUCIA MAR UNIF'IED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2014
Changes in Net Positìon
The results of this year's operations for the District as a whole are reported inthe Statement of Activities on
page 16. Table 2 takes the information from the Statement, rounds off the numbers, and rearranges them slightly
so you can see our total revenues for the year.
w.
Governmental Activities
2014
2013
Revenues
Program revenues:
Charges for services
Operating grants and contributions
General revenues:
Federal and State aid, not restricted to specific purposes
Property taxes
Other general revenues
Total Revenues
s
851,096 $ 966,732
18,098,583 18,167,601
26,419,984
50,920,614
5,110,431
101,400,708
19,540,897
50,879,096
4,697,617
94,251,943
Expenses
Instruction
Supervision of instruction
Instructional library, media, and technology
School site administration
Home-to-school transportation
Food services
All other pupil services
56,131,934
60,747,263
1,393,457
554,843
6,226,857
2,075,843
l,196,962
544,755
6,058,352
Administration
4,964,539
2,031,206
3,900,239
3,900,897
4,485,643
Plant services
Ancillary services
8,898,921
g,l04,5gl
Community services
Other outgo
Debt service - interest
Total Expenses
Change in Net Position
G overnmental
3,826,166
4,029,558
921,908
975,054
127,286
5,027,170
2,813,499
125,322
101,660,456
_$_(2s94!)
4,246,653
2,582,425
95,230,887
_$_19?89tt)
Activ it ies
As reported inThe Statement of Activities on page 16, the cost of all of our governmental activities this year was
$ 101,660,456. However, the amount that our taxpayers ultimately financed for these activities through local taxes
was only 550,920,614 because the cost was paid by those who benefited from the programs ($85 I ,096) or by
other governments and organizations who subsidized certain programs with grants and contributions
($18,098,583). tWe paid for the remaining "public benefit" portion of our governmental activities with
526,419,984 in Federal and State funds, and with $5,1 10,431 other revenues, like interest and general
entitlements.
LUCIA MAR UNIF'IED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2014
In Table 3, we have presented the cost of each of the District's largest functions, as well as each program's net cosl
(total cost less revenues generated by the activities). As discussed above, net cost shows the frnancial burden that
was placed on the District's taxpayers by each of these functions. Providing this information allows our citizens
to consider the cost ofeach function in comparison to the benefits they believe are provided by that function.
Table 3
Net Cost of Services
Total Cost of Services
2014
Instruction
Instructi on-related activities
Pupil services
Administration
Plant services
s 60,747,263 $
8,175,157
9,931,567
4,964,539
8,898,921
2013
$ 44,
7,353,456
6,328,052
4,357,714
9,633,448
8,943,009 7,876,308 8,336,260
Other
Total
2014
s 47 ,701 ,847
2013
56,131,934
7,800,069
9,832,342
4,485,643
9,104,591
$
101,660,456 $ 95,230,887
Éæ-¡:Ð!¡:
$82f19f,?
Charges
OtherGeneral
Revenues
OperatingGrants
and
Contributions
l8o/"
6%
Capital Grants
and Contributions
6o/o
Stateand Federal
aid not restricted
Property Thxes
50,/"
L9'/o
l0
19,899
7,710,201
4,802,337
3,958,417
8,863,078
7,242,622
s76,096,554
Sources of Revenue for Fiscal Year 2013-2014
for Services
l'/o
1
LUCIA MAR UMFIED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2014
Expenses for Fiscal Year 2013-2014
Other
Maintenance
and Operations
8%
7Vo
Administration
5o/o
Instruction
Related
Student Support
Services
llo/o
69o/o
THE DISTRICT'S FUNDS
As the District completed this year, our governmental funds reported a combined fund balance of $32,800,274,
which is an increase of $7,526,002 from last year (Table 4).
Ise!
Balances and Activity
General Fund
Special Reserve Fund for Capital
Outlay Projects
Bond Interest and Redemption Fund
Non-Maj or Governmental Funds
Total
Julv 1,2013 Revenues Expenditures June 30,2014
s14,411,596 S 89,468,440 $89,257,413 S 14,622,623
1,571,873 15,201,144 8,770,908
4,768,396 5,164,303 4,341,715
4,522,407 7,180,724 7,718,573
s25,274,272
l1
S I 17,014,61
t ..jJry
8,002,109
5,590,984
4,584,558
-Jryj_
LUCIA MAR UNIFIED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
General Fund Increase in fund balance of $21 1,027 as a result of current year local control funding revenues.
Special Reserve Fund for Capital Outlay Projects Increase of 56,430,236 as a result of cunent year capital
lease for solar projects.
Bond Interest and Redemption Fund Bond Interest and Redemption Fund net increase of $822,588 as a result
of current year taxes and interest collected exceeding General Obligation Bond principal and interest payments.
Non-Major Governmental Funds Net increase in fund balance of
o
$62,1
5l
as a result of operations as follows:
Fund 11 Adult Education Fund net increase in fund balance of 577,767, primarily due to carryover from
2012-2013 and the reduction of the programs offered.
o
Fund 13 Cafeteria Fund net decrease in fund balance of 575,494, due to food costs and remodels of some
older kitchen facilities.
o
Fund 14 Deferred Maintenance Fund net decrease in fund balance of $204,929
o
Funds 25 and 26 Capital Facilities and Mitigation Fee funds net increase in fund balance of $638,149
due to an increase in school fees from new homes being built in our attendance area.
o
Fund 35 County School Facilities Fund net decrease in fund balance of $313,714
as a result of a
concentrated effort to maintain older facilities this was funded from both current and prior year caryover
ofprogram funds.
as the Career
Academies at AGHS have been completed.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
a broad range of capital assets (net of depreciation), including
land, buildings, and furniture and equipment. This amount represents a net increase (including additions,
deductions, and depreciation) of$3,980,073, or 3.3 percent, from last year (Table 5).
At June 30,2014, the District had $ 123,983, I 87 in
Table 5
s
Land
Construction in progress
Buildings and improvements
Furniture and equipment
Governmental Activities
2013
18,389,117 S 18,389,117
13,666,332
2014
21,477,745
gI
,500, I 75
85,091 ,993
2,616,150
jJry-[-14993J]L
2,855,672
Total
t2
LUCIA MAR UNIFIED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2OI4
This year's major additions included:
¡
Solar projects throughout the District
I-ong-Term Obligations
At the end of this year, the District had $64,388,848 in debt outstanding versus $52,608,348 last year, an increase
of $11,780,500, or 22.4 percent. The debt consisted of:
Table 6
Governmental Activities
2014
General obligation bonds
Premium on issuance
$
Certificates of participation
Discount on issuance
36,541,863
2013
$ 39,003,2r5
1,063,791
9,620,000
(50,587)
1,208,345
9,170,000
(54,835)
14,663,721
Capitalized lease obligations
Accumulated vacation
OPEB obligation - net
661,067
2,888,993
Total
$
64,388,848
619,107
2,662,576
$ 52,608,348
The State limits the amount of general obligation debt that District's can issue to five percent of the assessed value
of all taxable property within the District's boundaries. The District's outstanding general obligation debt of
$36,541,863 is below the statutorily-imposed limit.
Other obligations include compensated absences payable and other long-term obligations. We present more
detailed information regarding our long-term obligations in Note 8 of the financial statements.
ECONOMIC FACTORS AND NEXT YEARS' BUDGETS
In preparing the District budget for 2014-2015 and the multi-year projections through 2016-2017, the following
assumptions and criteria were considered:
o
The FY 2014-2015 budget includes expenditures sufficient to implement the actions and strategies
included in the Local Control Accountability Plan (LCAP).
o
Includes increases for the employer paid portion of STRS and PERS, both program rates will continue to
increase each year through FY 2020-2021.
.
Funding continues for Board Priorities of GATE at the elementary sites, Anti-bullying funding for each
school site, as well as funding for District-wide professional development.
o
The District has not funded Other Postemployment Benefits cost in accordance with GASB 45 guidelines.
Pay as you go costs are budgeted of approximately 51.2 million per year in accordance with District
payroll contracts.
t3
LUCIA MAR UNIFIED SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30,2014
CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, students, and investors and creditors with a
general overview of the District's finances and to show the District's accountability for the money it receives. If
you have questions about this report or need any additional financial information, contact the Dr. Raynee J. Daley,
Assistant Superintendent, Business/CBO, at Lucia Mar Unified School District, 602 Orchard Street, Arroyo
Grande, California, 93420, or e-mail at rdaley@lmusd.org.
14
LUCIA MAR UNIFIED SCHOOL DISTRICT
STATEMENT OF NET POSITION
Governmental
Activities
ASSETS
s
Deposits and investments
Receivables
Prepaid expenditures
Stores inventories
Capital Assets
39,128,782
5,201,959
25,206
145,523
39,866,862
Land and construction in process
Other capital assets
Less: Accumulated depreciation
Total Capital Assets
144,832,641
(60,716,316)
123.983.187
169,484,657
Total Assets
LIABILITIES
Accounts payable
11,620,001
Interest payable
Unearned revenue
674,738
81,195
Long-Term Obligations
Current portion of long-term obligations
Noncurrent portion of long-term obligations
Total Long-Term Obligations
60,365,850
64,388,848
Total Liabilities
76,764,182
4,022,998
NET POSITION
Net investment in capital assets
Restricted for:
Debt service
Capital projects
Educational programs
Other activities
Unrestricted
Total Net Position
68,614,584
4,977,104
3,740,776
r,976,190
576,859
1r,835,022
The accompanying notes are an integral part of these financial statements.
15
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LUCIA MAR UNIFIED SCHOOL DISTRICT
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2014
Net (Expenses)
Revenues and
Changes in
Net Position
Prosram Revenues
Charges for
Services and
FunctionsÆrograms
Governmental Activities:
Instruction
Instruclion-related activities:
Supervision of instruction
Instructional library, media,
and technology
School site administration
Pupil services:
Home-to-school
Sales
Expenses
$
Governmental
Contributions
Activities
g
(47,701,847)
60,747,263
587,990
12,457,426
1,393,457
36,137
409,547
(947,773)
67,402
(487,441)
(5,918,242)
554,843
6,226,857
306,985
1,630
(2,075,843)
2,075,843
3,826,166
4,029,558
transportatlon
Food services
All other pupil services
Operating
Grants and
154,083
2,649,888
799,544
3,572,688
702
606,123
8,898,921
29,954
235,519
40,600
57,739
(1,176,2',78)
(3,075,931)
Administration:
(1,391,8s 1)
1,391,851
Data processing
All other administration
Plant services
Ancillary services
Community services
Interest on long-term
975,054
127,286
(2,965,863)
(8,633,448)
(97s,054)
(28,947)
(2,913,499)
(4,518,760)
(82,710,777)
2,813,499
obligations
Other outgo
508,410
5,O27,170
$
851,096
101,660,456
$
18,098,583
General revenues and subventions:
Property taxes, levied for general purposes
Property taxes, levied for debt service
Taxes levied for other specific purposes
Federal and State aid not restricted
to specif,rc purposes
Interest and investment earnings
45,763,308
5,157,306
532,929
26,419,984
52,191
4,525,311
82,451,029
Miscellaneous
Subtotal, General Revenues
(259,',l48)
Change in Net Position
Net Position - Beginning
93,0',t0,260
Restatement
(l,090,037)
Net Position - Beginning (As Restated)
Net Position - Ending
The accompanying notes are an integral part of these financial statements.
t6
91,980,223
$
91,720,47s
LUCIA MAR UNIFIED SCHOOL DISTRICT
GOVERNMENTAL FUNDS
BALANCE SHEET
JUNE 30,2014
Special Reserve
Fund for
Capital Outlay
Proiects
General
Fund
ASSETS
Deposits and investments
Receivables
Prepaid expenditures
Stores inventories
Total Assets
$
18,377,666
ç
10,771,966
$
10,771,966
Bond Interest
and Redemption
Fund
$
5,590,984
4,699,883
25.206
$23
10.395
l 13.150
5,590,984
LIABILITIES AND FUND BALANCES
Liabilities:
2,769,857
9,409,332
81.195
9,490,527
Accounts payable
Unearned revenue
Total Liabilities
2,769,857
Fund Balances:
55,602
1,976,190
Nonspendable
Restricted
5,590,984
Committed
Assigned
Unassigned
Total Fund Balances
Total Liabilities and
Fund Balances
$
9,973,365
2.617.466
8,002,109
14,622,623
8,002,109
23,113,150
g
The accompanying notes are an integral part of these financial statements.
l7
10,771,966
5,590,984
$
s,s90,984
Non-Major
Governmental
Total
Governmental
Funds
$
4,388,166
502,076
s
$
5,025,370
8
4,501,470
440,8t2_
*
tt,u3?,?31
Funds
135,128
39,128,782
5,201,959
25,206
145,523
440,812
11.701.196
135,128
190,730
11,945,007
71,597
17,975,474
4,377,833
71,597
2,617,466
32,800,274
4,584,558
$
5,025,370
$
44,501,470
l7
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LUCIA MAR UNIFIED SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
JUNE 30,2014
8
Total Fund Balance - Governmental Funds
Amounts Reported for Governmental Activities in the Statement
of Net Position are Different Because:
32,800,274
Capital assets used in governmental activities are not financial resources
and, therefore, are not reported as assets in governmental funds.
The cost ofcapital assets is:
Accumulated depreciation is :
Net Capital Assets
$ 184,699,503
(60,716,316)
123,983,r87
In governmental funds, unmatured interest on long-term obligations is
recognized in the period when it is due. On the government-wide financial
statements, unmatured interest on long-term obligations is recognized when
(674,t38)
it is incurred.
Long-term obligations, including general obligation bonds, certificates of
participation, capital leases and compensated absences are not due and
payable in the current period and, therefore, are not reported as liabilities in
the funds.
Long-term obligations at year-end consist of:
General obligation bonds
Unamortized premium on issuance
Certificates of participation
Discount on issuance
Capital leases payable
Accumulated vacation
OPEB obligation
ln addition, the District previously issued "capital appreciation" general
obligation bonds. The cumulative capital accretion on the general
obligation bonds is:
Total Long-Term Obligations
Total Net Position - Governmental Activities
The accompanying notes are an integral part of these financial statements.
18
31,080,174
1,063,791
9,620,000
(50,587)
14,663,721
661,067
2,888,993
5,461,689
LUCIA MAR UNIFIED SCHOOL DISTRICT
GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 3O,2OI4
Special Reserve
Fund for
Capital Outlay
Proiects
General
Fund
REVENUES
Local Control Funding Formula
$
69,597,009
Federal sources
7,232,468
Other State sources
Other local sources
8,369,068
Fund
$
$
40,359
537.423
537,423
4,269,895
Total Revenues
EXPENDITURES
Current
Instruction
Instruction-related activities :
Supervision of instruction
Instructional library, media,
and technology
School site administration
Pupil services:
Home-to-school transportation
Bond Interest
and Redemption
89,468,440
5,123,944
5.t64.303
57,687,013
1,305,605
514,824
5,979,120
1,942,147
Food services
All other pupil services
3,862,210
Administration:
r,336,171
Data processing
All other administration
3,220,351
Ancillary services
Community services
Other outgo
Debt service
Principal
Interest and other
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers in
Other sources
Transfers out
Net Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Fund Balance - Beginning
Fund Balance - Ending
32,885
7,507,872
7,332,546
Plant services
Facility acquisition and construction
5,278
930,529
114,449
5,O2',1,170
2,732,068
568.394
4,341,'7t5
89.25',7 413
2tl
5
822,588
027
211,027
14,471,596
14,622,623
$
The accompanying notes are an integral part of these financial statements.
t9
2,209,647
14.001.964
6,430,236
1,571,873
8,002,109
822,588
5,590,984
Non-Major
Governmental
Total
Governmental
Funds
$
458,286
2,826,371
(79,97O)
3,O25,855
6,230,542
tr'unds
$
70,055,295
10,058,839
8.329.457
12,957,117
101.400.708
140,435
57,827,448
3,665
1,309,270
3r4
514,824
5,979,434
3,626,386
I,942,147
3,626,386
3,862,210
r,336,17t
181,993
3,402,344
912,932
8,278,363
894,698-
9,407,848
930,529
114,449
5,027,170
550,000
2,682,068
5t9.725
3,297,766
6,830,148
ro8,538,427
(599,606)
950,182
(7,137,719\
950,182
14,663,72r
(288,425\
66r,757
62,15r
$
4,522,407
4,584,558 s
(95O,r82)
14,663,721
7,526,002
25,274,272
32,800,274
t9
LUCIA MAR UNIFIED SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUBS, EXPENDITURES, AND CHANGES IN FUND BALANCES
TO THE STATEMENT OF ACTIVITIBS
FOR THE YEAR ENDED JUNE 3O,2OI4
$
7,526,002
(4,601,079)
3,980,073
Total Net Change in Fund Balances - Governmental Funds
Amounts Reported for Governmental Activities in the Statement
of Activities are Different Because:
Capital outlays to purchase or build capital assets are reported in
governmental funds as expenditures, however, for governmental
activities, those costs are shown in the Statement of Net Position
and allocated over their estimated useful lives as annual depreciation
expenses in the Statement of Activities.
This is the amount by which capital outlay exceeds depreciation in the period.
Capital outlays
Depreciation expense
Some of the capital assets acquired this year were financed with capital leases.
The amount financed by the leases is reported in the governmental funds as a
source offinancing. On the other hand, the capital leases are not revenues in
the Statement of Activities, but rather constitute long-term liabilities in the
Statement of Net Assets.
$
8,581,152
(t4,663,721)
In the Statement of Activities, certain operating expenses - compensated
absences (vacations) 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). This
year, there are no special termination benefits. Vacation used was less
than amounts earned by $41,960.
(41,960)
Repayment of bond principal is an expenditure in the governmental funds,
but it reduces long-term obligations in the Statement of Net Position
and does not affect the Statement of Activities:
2,915,000
550,000
General obligation bonds
Certificates of participation
Under the modified basis of accounting used in the governmental funds,
expenditures are not recognized for transactions that are not normally
paid with expendable available financial resources. In the Statement
of Activities, however, which is presented on the accrual basis, expenses
and liabilities are reported regardless of when financial resources
are available. This adjustment combines the net changes of the following
balances:
144,554
Amortization of debt premium
Amortization of debt discount
Combined adjustment
(4,248)
140,306
The accompanying notes are an integral part of these financial statements.
20
LUCIA MAR UNIFIED SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
RBVENUES, BXPENDITURES, AND CHANGES IN FUND BALANCES
TO THE DISTRICT-WIDE STATEMENT OF ACTIVITIES (Continued)
FOR THE YEAR ENDED JUNE 30,2014
Interest on long-term obligations in the Statement of Activities differs from
the amount reported in the governmental funds because interest is recorded
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. The additional interest reported in the Statement of Activities
is the result oftwo factors. First, accrued interest on the general
obligation bonds decreased by 914,677, and second, $453,648 of
additional accumulated interest was accreted on the District's "capital
appreciation" general obligation bonds.
In the Statement of Activities, other postemployment benefits (OPEB)
obligation are measured by an actuarially determined Annual Required
Contribution (ARC). In the governmental funds, however, expenditures
for these items are measured by the amount of financial resources
used (essentially, the amounts actually paid). This year, amounts
contributed toward the OPEB obligation were less than the ARC
by 8226,477.
Change in Net Position of Governmental Activities
The accompanying notes are an integral part of these financial statements.
2t
$
(438,971)
$
(226,477)
(259,748)
LUCIA MAR UNIFIED SCHOOL DISTRICT
FIDUCIARY FUNDS
STATEMENT OF NET POSITION
JUNE 30,2014
Associated
Student
Bodies
ASSETS
Deposits and investments
LIABILITTES
Due to student groups
The accompanying notes are an integral part of these financial statements.
22
s
928.001
$
928,001
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3O,2OI4
NOTE 1 . SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Reporting Entity
The Lucia Mar Unified School District (the District) was unified in 1965 under the laws of the State of California.
The District operates under a locally elected seven-member Board form of government and provides educational
services to grades K - 12 as mandated by the State and/or Federal agencies. The District operates eleven
elementary schools, three middle schools, two high schools, one continuation high school, and one adult
education program.
A reporting entity is comprised of the primary government, component units, and other organizations that are
included to ensure the financial statements are not misleading. The primary government of the District consists of
all funds, departments, boards, and agencies that are not legally separate from the District. For Lucia Mar Unified
School District, this includes general operations, food service, and student related activities of the District.
Component Units
Component units are legally separate organizations for which the District is financially accountable. Component
units may also include organizations that are fiscally dependent on the District, in that the District approves their
budget, the issuance of their debt or the levying of their taxes. In addition, component units are other legally
separate organizations for which the District is not financially accountable but the nature and significance of the
organization's relationship with the District is such that exclusion would cause the District's financial statements
to be misleading or incomplete. For financial reporting purposes, the Lucia Mar Unified School District
Financing Corporation (the Corporation) has a financial and operational relationship which meets the reporting
entity definition criteria of the Governmental Accounting Standards Board (GASB) Statement No. 14, The
Financial Reporting Entity, and thus is included in the financial statements of the District. The component unit,
although a legally separate entity, is reported in the financial statements using the blended presentation method as
if it were part of the District's operations because the governing board of the component unit is essentially the
same as the governing board of the District and because its purpose is to finance the construction of facilities to be
used for the direct benefit of the District.
The Corporation's financial activity is presented in the financial statements in the Capital Facilities Fund and the
Debt Service for Blended Component units Fund. Certificates of participation issued by the Corporation are
included as long-term obligations in the government-wide financial statements. Individually prepared financial
statements are not prepared for the Corporation.
Basis of Presentation - Fund Accounting
The accounting system is organized and operated on a fund basis. A fund is defined as a fiscal and accounting
entity with a self-balancing set of accounts, which are segregated for the purpose of carrying on specific activities
or attaining certain objectives in accordance with special regulations, restrictions, or limitations. The District's
funds are grouped into two broad fund categories: governmental and fiduciary.
23
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3O,2OI4
Governmental Funds Governmental funds are those through which most governmental functions typically are
financed. Governmental fund reporting focuses on the sources, uses, and balances ofcurrent financial resources.
Expendable assets are assigned to the various governmental funds according to the purposes for which they may
or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference
between governmental fund assets and liabilities is reported as fund balance. The following are the District's
major and non-major governmental funds:
Major Governmental Funds
General Fund The General Fund is the chief operating fund for all districts. It is used to account for the ordinary
operations of the District. All transactions except those accounted for in another fund are accounted for in this
fund.
Special Reserve Fund for Capital Outlay Projects The Special Reserve Fund for Capital Outlay Projects exists
primarily to provide for the accumulation of General Fund monies for capital outlay purposes (Education Code
Section 42840).
Bond Interest and Redemption Fund The Bond Interest and Redemption Fund is used for the repayment of
bonds issued for a district (Education Code Sections 15125-15262).
Non-Major Governmental Funds
Special Revenue Funds The Special Revenue funds are established to account for the proceeds from specific
revenue sources (other than trusts, major capital projects, or debt service) that are restricted or committed to the
financing of particular activities and that compose a substantial portion of the inflows of the fund. Additional
resources that are restricted, committed, or assigned to the purpose of the fund may also be reported in the fund.
Adult Education Fund The Adult Education Fund is used to account separately for Federal,
State, and
local revenues for adult education programs and is to be expended for adult education purposes only.
Cafeteria Fund The Cafeteria Fund is used to account separately for Federal, State, and local resources to
operate the food service program (Education Code Sections 38090-38093) and is used only for those
expenditures authorized by the governing board as necessary for the operation of the District's food service
program (Education Code Sections 38091 and 38100).
Deferred Maintenance Fund The Deferred Maintenance Fund is used to account separately for
State apportionments and the District's contributions for deferred maintenance purposes (Education
Code Sections 17582-17587) and for items of maintenance approved by the State Allocation Board.
Capital Project Funds The Capital Project funds are used to account for and report financial resources that are
restricted, committed, or assigned to the acquisition or construction of major capital facilities and other capital
assets (other than those financed by proprietary funds and trust funds).
24
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
Capital Facilities Fund The Capital Facilities Fund is used primarily to account separately for monies
received from fees levied on developers or other agencies as a condition of approving a development
(Education Code Sections 17620-17626. Expenditures are restricted to the purposes specified in Government
Code Sections 65970-65981 or to the items specified in agreements with the developer (Government Code
Section 66006).
County School Facilities Fund The County School Facilities Fund is established pursuant to Education
Code Section 17070.43 to receive apportionments from the 1998 State School Facilities Fund (Proposition
lA), the 2002 State School Facilities Fund (Proposition 47), or the 2004 State School Facilities Fund
(Proposition 55) authorized by the State Allocation Board for new school facility construction, modernization
projects, and facility hardship grants, as provided in the Leroy F. Greene School Facilities Act of 1998
(Education Code Section 17070 et seq.).
Debt Service Funds The Debt Service funds are used to account for the accumulation of restricted, committed,
or assigned resources for and the payment ofprincipal and interest on general long-term obligations.
Debt Service for Blended Component Units Fund The Debt Service for Blended Component Units Fund is
used to account for the accumulation of resources for the payment of the principal and interest on bonds
issued by Financing Authorities and similar entities that are considered blended component units of the
District under generally accepted accounting principles (GAAP).
Fiduciary Funds Fiduciary funds are used to account for assets held in trustee or agent capacity for others that
cannot be used to support the District's own programs. The fiduciary fund category is split into four
classifications: pension trust funds, investment trust funds, private-purpose trust funds, and agency funds. The
key distinction between trust and agency funds is that trust funds are subject to a trust agreement that affects the
degree of management involvement and the length of time that the resources are held.
Trust funds are used to account for the assets held by the District under a trust agreement for individuals, private
organizations, or other governments and are therefore, not available to support the District's own programs. The
District's has no trust funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve
measurement of results of operations. Such funds have no equity accounts since all assets are due to individuals
or entities at some future time. The District's agency fund accounts for student body activities (ASB) and
scholarship activities.
Basis of Accounting - Measurement Focus
Government-Wide Financial Statements The government-wide financial statements are prepared using the
economic resources measurement focus and the accrual basis of accounting. 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.
25
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
The government-wide Statement of Activities presents a comparison between expenses, both direct and indirect of
the District and for each governmental function, and excludes fiduciary activity. Direct expenses are those that
are specifically associated with a service, program, or department and are therefore, clearly identifiable to a
particular function. The District does not allocate indirect expenses to functions in the Statement of Activities,
except for depreciation. Program revenues include charges paid by the recipients ofthe goods or services offered
by the programs and grants and contributions that are restricted to meeting the operational or capital requirements
of a particular program. Revenues that are not classified as program revenues are presented as general revenues.
The comparison of program revenues and expenses identifies the extent to which each program is self-financing
or draws from the general revenues of the District. Eliminations have been made to minimize the double counting
of internal activities.
Net position should be reported as restricted when constraints placed on net asset use are either externally
imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other
governments or imposed by law through constitutional provisions or enabling legislation. The net position
restricted for other activities result from special revenue funds and the restrictions on their net asset use.
Fund Financial Statements Fund financial statements report detailed information about the District. The focus
of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund
is presented in a separate column. Non-major funds are aggregated and presented in a single column.
Governmental Funds All governmental funds are accounted for using the flow of current financial
resources measurement focus and the modified accrual basis of accounting. With this measurement focus,
only current assets and current liabilities generally are included on the balance sheet. The Statement of
Revenues, Expenditures, and Changes in Fund Balances reports on the sources (revenues and other financing
sources) and uses (expenditures and other financing uses) ofcurrent financial resources. This approach
differs from the manner in which the governmental activities of the government-wide financial statements are
prepared. Governmental fund financial statements, therefore, include reconciliations with brief explanations
to better identify the relationship between the government-wide financial statements, prepared using the
economic resources measurement focus and the accrual basis of accounting, and the governmental fund
financial statements, prepared using the flow of current financial resources measurement focus and the
modified accrual basis of accounting.
Fiduciary Funds Fiduciary funds are accounted for using the flow of economic resources measurement
focus and the accrual basis of accounting. Fiduciary funds are excluded from the government-wide financial
statements because they do not represent resources of the District.
Revenues - Exchange and Non-Exchange Transactions Revenue resulting from exchange transactions, in
which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange
takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are
measurable and become available. Available means that the resources will be collected within the current fiscal
year or are expected to be collected soon enough thereafter, to be used to pay liabilities of the current fiscal year.
Generally, available is defined as collectible within 60 days. However, to achieve comparability of reporting
among California districts and so as not to distort normal revenue patterns, with specific respect to reimbursement
grants and corrections to State-aid apportionments, the California Department of Education has defined available
for districts as collectible within one year. The following revenue sources are considered to be both measurable
and available at fiscal year-end: State apportionments, interest, certain grants, and other local sources.
26
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
Non-exchange transactions, in which the District receives value without directly giving equal value in return,
include property taxes, certain grants, entitlements, and donations. Revenue from property taxes is recognized in
the fiscal year in which the taxes are received. Revenue from certain grants, entitlements, and donations is
recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements
include time and purpose restrictions. On a modified accrual basis, revenue from non-exchange transactions must
also be available before it can be recognized.
Unearned Revenue Unearned revenue arises when potential revenue does not meet both the "measurable" and
"available" criteria for recognition in the current period or when resources are received by the District prior to the
incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or
when the District has a legal claim to the resources, the liability for unearned revenue is removed from the balance
sheet and revenue is recognized.
Certain grants received before the eligibility requirements are met are recorded as unearned revenue. On the
governmental fund financial statements, receivables that will not be collected within the available period are also
recorded as unearned revenue.
ExpensesÆxpenditures On the accrual basis of accounting, expenses are recognized at the time they are
incurred. The measurement focus of governmental fund accounting is on decreases in net financial resources
(expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in which the
related fund liability is incuned, if measurable, and typically paid within 90 days. Principal and interest on longterm obligations, which has not matured, are recognized when paid in the governmental funds as expenditures.
Allocations of costs, such as depreciation and amortization, are not recognized in the governmental funds but are
recognized in the entity-wide statements.
Investments
Investments held at June 30, 2014, withoriginal maturities greater than one year are stated at fair value. Fair
value is estimated based on quoted market prices at year-end. All investments not required to be reported at fair
value are stated at cost or amortized cost. Fair values of investments in the county investment pool are
determined by the program sponsor.
Prepaid Expenditures
Prepaid expenditures (expenses) represent amounts paid in advance of receiving goods or services. The District
has the option of reporting an expenditure in governmental funds for prepaid items either when purchased or
during the benefiting period. The District has chosen to report the expenditures when incurred.
Stores Inventories
Inventories consist ofexpendable food and supplies held for consumption. Inventories are stated at cost, on the
weighted average basis. The costs of inventory items are recorded as expenditures in the governmental type funds
when used.
27
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
Capital Assets and Depreciation
The accounting and reporting treatment applied to the capital assets associated with a fund are determined by its
measurement focus. Capital assets are long-lived assets of the District. The District maintains a capitalization
threshold of $5,000. The District does not possess any infrastructure. Improvements are capitalized; the costs of
normal maintenance and repairs that do not add to the value of the asset or materially extend an asset's life are not
capitalized, but are expensed as incurred.
When purchased, such assets are recorded as expenditures in the governmental funds and capitalized in the
government-wide statement of net position. The valuation basis for capital assets is historical cost, or where
historical cost is not available, estimated historical cost based on replacement cost. Donated capital assets are
capitalized at estimated fair market value on the date donated.
Depreciation is computed using the straight-line method. Estimated useful lives of the various classes of
depreciable capital assets are as follows: buildings, 25 to 50 years; improvements, 7 to 30 years; equipment, 5 to
20 years.
Interfund Balances
On fund financial statements, receivables and payables resulting from short-term interfund loans are classified as
"interfund receivables/payables". These amounts are eliminated in the governmental activities column of the
statement of net position.
Compensated Absences
Compensated absences are accrued as a liability as the benefits are earned. The entire compensated absence
liability is reported on the government-wide statement of net position. For governmental funds, the current
portion of unpaid compensated absences is recognized upon the occurrence of relevant events such as employee
resignations and retirements that occur prior to year-end that have not yet been paid with expendable available
financial resources. These amounts are reported in the fund from which the employees who have accumulated
leave are paid.
Sick leave is accumulated without limit for each employee at the rate of one day for each month worked. Leave
with pay is provided when employees are absent for health reasons; however, the employees do not gain a vested
right to accumulated sick leave. Employees are never paid for any sick leave balance at termination of
employment or any other time. Therefore, the value of accumulated sick leave is not recognized as a liability in
the District's financial statements. However, credit for unused sick leave is applicable to all classified school
members who retire after January l, 1999. At retirement, each member will receive .004 year of service credit for
each day of unused sick leave. Credit for unused sick leave is applicable to all certificated employees and is
determined by dividing the number of unused sick days by the number of base service days required to complete
the last school year, if employed full-time.
28
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3o,2ol4
Accrued Liabilities and Long-Term Obligations
and long-term obligations are reported in the government-wide financial
statements. In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timely
manner and in full from current financial resources are reported as obligations of the governmental funds.
All payables, accrued liabilities,
However, claims and judgments, compensated absences, special termination benefits, and contractually required
pension contributions that will be paid from governmental funds are reported as a liability in the governmental
fund financial statements only to the extent that they are due for payment during the current year. Bonds, capital
leases, and other long-term obligations are recognized as liabilities in the governmental fund financial statements
when due.
Debt Issuance Costs, Premiums and Discounts
In the government-wide financial statements and in the proprietary fund type financial statements, long-term
obligations are reported as liabilities in the applicable governmental activities, business-type activities, or
proprietary fund statement of net position. Debt premiums and discounts, as well as issuance costs, related to
prepaid insurance costs are amortized over the life of the bonds using the straightJine method.
In governmental fund financial statements, bond premiums and discounts, as well as debt issuance costs are
recognized in the current period. The face amount of the debt is reported as other financing sources. Premiums
received on debt issuance are also reported as other financing sources. Issuance costs, whether or not withheld
from the actual debt proceeds, are reported as debt service expenditures.
Fund Balances - Governmental Funds
As of June 30,2014, fund balances of the governmental funds are classified 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 a formal action of the governing
board. The governing board is the highest level of decision-making authority for the District. Commitments may
be established, modified, or rescinded only through resolutions or other action as approved by the governing
board.
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. Under the District's adopted policy, only the governing board or chief business
officer/assistant superintendent of business services may assign amounts for specific purposes.
Unassigned - all other spendable amounts.
29
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3O,2OI4
Spending Order Policy
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available,
the District considers restricted funds to have been spent first. When an expenditure is incurred for which
committed, assigned, or unassigned fund balances are available, the District considers amounts to have been spent
first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the governing
board has provided otherwise in its commitment or assignment actions.
Minimum Fund Balance Policy
The governing board adopted a minimum fund balance policy for the General Fund in order to protect the District
against revenue shortfalls or unpredicted on-time expenditures. The policy requires a Reserve for Economic
Uncertainties consisting of unassigned amounts equal to no less than three percent of General Fund expenditures
and other financing uses.
Net Position
Net position represents the difference between assets and liabilities. Net position invested in capital assets, net of
related debt consists ofcapital assets, net of accumulated depreciation, reduced by the outstanding balances of any
borrowings used for the acquisition, construction, or improvement of those assets. Net Position are reported as
restricted when there are limitations imposed on their use either through the enabling legislation adopted by the
District or through external restrictions imposed by creditors, grantors, or laws or regulations of other
governments. The District first applies restricted resources when an expense is incurred for purposes for which
both restricted and unrestricted net position is available. The government-wide financial statements report
ç71,270,869 of restricted net position.
Interfund Activity
Exchange transactions between funds are reported as revenues in the seller funds and as expenditures in the
purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are
reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental
funds. Repayments from funds responsible for particular expenditures to the funds that initially paid for them are
not presented in the financial statements.
Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
30
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
Budgetary Data
The budgetary process is prescribed by provisions of the California Education Code and requires the governing
board to hold a public hearing and adopt an operating budget no later than July 1't of each year. The District
governing board satisfied these requirements. The adopted budget is subject to amendment throughout the year to
give consideration to unanticipated revenue and expenditures primarily resulting from events unknown at the time
of budget adoption with the legal restriction that expenditures cannot exceed appropriations by major object
account.
The amounts reported as the original budgeted amounts in the budgetary statements reflect the amounts when the
original appropriations were adopted. The amounts reported as the final budgeted amounts in the budgetary
statements reflect the amounts after all budget amendments have been accounted for. For budget purposes, on
behalf payments have not been included as revenue and expenditures as required under generally accepted
accounting principles.
Property Tax
Secured property taxes attach as an enforceable lien on property as ofJanuary 1. Taxes are payable in two
installments on November I and February I and become delinquent on December 10 and April 10, respectively.
Unsecured property taxes are payable in one installment on or before August 31. The County of San Luis Obispo
bills and collects the taxes on behalf of the District. Local property tax revenues are recorded when received.
Change in Accounting Principles
In March 2012,the GASB issued Statement No. 65, Items Previously Reported as Assets and Liabiliti¿s. This
Statement establishes accounting and financial reporting standards that reclassify, as deferred outflows of
resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and
recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets
and liabilities.
Concepts Statement No. 4, Elements of Financial Statements, introduced and defined the elements included in
financial statements, including deferred outflows of resources and deferred inflows of resources. In addition,
Concepts Statement 4 provides that reporting a deferred outflow ofresources or a deferred inflow ofresources
should be limited to those instances identified by the Board in authoritative pronouncements that are established
after applicable due process. Prior to the issuance of this Statement, only two such pronouncements have been
issued. Statement No. 53, Accounting and FinanciaL Reporting for Derivative Instrumenls, requires the reporting
of a deferred outflow ofresources or a deferred inflow of resources for the changes in fair value of hedging
derivative instruments, and Statement No. 60, Accounting and Financial Reporting for Service Concession
Arrangemenf.s, requires a deferred inflow of resources to be reported by a transferor government in a qualifying
service concession affangement. This Statement amends the financial statement element classification of certain
items previously reported as assets and liabilities to be consistent with the definitions in Concepts Statement
No. 4. This Statement also provides other financial reporting guidance related to the impact of the financial
statement elements deferred outflows of resources and deferred inflows of resources, such as changes in the
determination of the major fund calculations and limiting the use of the term deþrred in financial statement
presentations.
The District has implemented the provisions of this Statement for the year ended June 30,2014.
31
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3O,2OI4
As the result of implementing GASB Statement No. 65, the District has restated the beginning net position in the
government-widestatementof NetPosition,effectivelydecreasingnetpositionasof
The decrease results from no longer deferring and amortizing bond issuance costs.
July l,2013,by$1,090,037.
New Accounting Pronouncements
In June 2012,the GASB issued Statement No. 68, Accounting and Financial Reportingfor Pensions-an
amendment of GASB Statement No. 27. The primary objective of this Statement is to improve accounting and
financial reporting by State and local governments for pensions. It also improves information provided by State
and local governmental employers about financial support for pensions that is provided by other entities. This
Statement results from a comprehensive review of the effectiveness of existing standards of accounting and
financial reporting for pensions with regard to providing decision-useful information, supporting assessments of
accountability and inter-period equity, and creating additional transparency.
This Statement replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local
GovernmentaL Employers, as well as the requirements of Statement No. 50, Pension Disclosures, as they relate to
pensions that are provided through pension plans administered as trusts or equivalent arrangements (hereafter
jointly referred to as trusts) that meet certain criteria. The requirements of Statements No. 2l and No. 50 remain
applicable for pensions that are not covered by the scope of this Statement.
The scope of this Statement addresses accounting and financial reporting for pensions that are provided to the
employees of State and local governmental employers through pension plans that are administered through trusts
that have the following characteristics:
.
Contributions from employers and non-employer contributing entities to the pension plan and earnings on
those contributions are irrevocable.
.
Pension plan assets are dedicated to providing pensions to plan members in accordance with the benefit
terms.
.
Pension plan assets are legally protected from the creditors of employers, non-employer contributing
entities, and the pension plan administrator. If the plan is a defined benefit pension plan, plan assets also
are legally protected from creditors of the plan members.
This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, and
deferred inflows of resources, and expense/expenditures. For defined benefit pensions, this Statement identifies
the methods and assumptions that should be used to project benefit payments, discount projected benefit
payments to their actuarial present value, and attribute that present value to periods of employee service.
32
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTBS TO FINANCIAL STATEMENTS
JUNE 30,2014
Note disclosure and required supplementary information requirements about pensions also are addressed.
Distinctions are made regarding the particular requirements for employers based on the number of employers
whose employees are provided with pensions through the pension plan and whether pension obligations and
pension plan assets are shared. Employers are classified in one of the following categories for purposes of this
Statement:
.
Single employers are those whose employees are provided with defined benefit pensions through singleemployer pension plans-pension plans in which pensions are provided to the employees of only one
employer (as defined in this Statement).
.
Agent employers are those whose employees are provided with defined benefit pensions through agent
multiple-employer pension plans-pension plans in which plan assets are pooled for investment purposes
but separate accounts are maintained for each individual employer so that each employer's share of the
pooled assets is legally available to pay the benefits of only its employees.
o
Cost-sharing employers are those whose employees are provided with defined benefit pensions through
cost-sharing multiple-employer pension plans-pension plans in which the pension obligations to the
employees of more than one employer are pooled and plan assets can be used to pay the benefits of the
employees of any employer that provides pensions through the pension plan.
In addition, this Statement details the recognition and disclosure requirements for employers with liabilities
(payables) to a defined benefit pension plan and for employers whose employees are provided with defined
contribution pensions. This Statement also addresses circumstances in which a non-employer entity has a legal
requirement to make contributions directly to a pension plan.
This Statement is effective for fiscal years beginning after June 15,2014. Early implementation is encouraged.
In November 2013, the GASB issued Statement No. 71, PensionTransitionfor Contríbutions Made Subsequent
No. 68. The objective of this Statement is to
to the Measurement Date
- An Amendment of GASB Statement
address an issue regarding application of the transition provisions of Statement No. 68, Accounting and Financial
Reporting for Pensions. The issue relates to amounts associated with contributions, if any, made by a State or
local government employer or nonemployer contributing entity to a defined benefit pension plan after the
measurement date of the government's beginning net pension liability.
Statement No. 68 requires a State or local government employer (or nonemployer contributing entity in a special
funding situation) to recognize a net pension liability measured as of a date (the measurement date) no earlier
than the end of its prior fiscal year. If a State or local government employer or nonemployer contributing entity
makes a contribution to a defined benefit pension plan between the measurement date of the reported net pension
liability and the end of the government's reporting period, Statement No. 68 requires that the government
recognize its contribution as a deferred outflow of resources. In addition, Statement No. 68 requires recognition
of deferred outflows of resources and deferred inflows of resources for changes in the net pension liability of a
State or local government employer or nonemployer contributing entity that arise from other types of events. At
transition to Statement No. 68, if it is not practical for an employer or nonemployer contributing entity to
determine the amounts of all defened outflows of resources and deferred inflows of resources related to
pensions, paragraph 137 of Statement No. 68 required that beginning balances for deferred outflows of resources
and deferred inflows of resources not be reported.
33
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3O,2OI4
if it is not practical to determine
the amounts of all deferred outflows of resources and deferred
made after the measurement date of the beginning net
pensions,
contributions
related
to
inflows of resources
pension liability could not have been reported as deferred outflows of resources at transition. This could have
resulted in a significant understatement of an employer or nonemployer contributing entity's beginning net
position and expense in the initial period of implementation.
Consequently,
This Statement amends paragraph 137 of Statement No. 68 to require that, at transition, a government
recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to
the measurement date of the beginning net pension liability. Statement No. 68, as amended, continues to
require that beginning balances for other deferred outflows of resources and deferred inflows of resources
related to pensions be reported at transition only if it is practical to determine all such amounts.
The provisions of this Statement are required to be applied simultaneously with the provisions of Statement
No.68.
NOTE 2. DEPOSITS AND INVESTMENTS
Summary of Deposits and Investments
Deposits and investments as of June 30,2014, are classified in the accompanying financial statements as follows:
Governmental activities
Fiduciary funds
Total Deposits and Investments
$
39,128,782
$
929,001
40,056,783
Deposits and investments as of June 30,2014, consisted of the following:
$
Cash in revolving
10,350,948
20,000
Investments
29.685.835
Cash on hand and in banks
$
Total Deposits and Investments
40,056,783
Policies and Practices
The District is authorized under California Government Code to make direct investments in local agency bonds,
notes, or warrants within the State; U.S. Treasury instruments; registered State warrants or treasury notes;
securities of the U.S. Government, or its agencies; bankers acceptances; commercial paper; certificates of deposit
placed with commercial banks and/or savings and loan companies; repurchase or reverse repurchase agreements;
medium term corporate notes; shares of beneficial interest issued by diversified management companies,
certificates of participation, obligations with first priority security; and collateralized mortgage obligations.
34
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
Investment in County Treasury - The District is considered to be an involuntary participant in an external
investment pool as the District is required to deposit all receipts and collections of monies with their County
Treasurer (Education Code Section 41001). The fair value of the District's investment in the pool is reported in
the accounting financial statements at amounts based upon the District's pro-rata share of the fair value provided
by the County Treasurer for the entire portfolio (in relation to the amortized cost of that portfolio). The balance
available for withdrawal is based on the accounting records maintained by the County Treasurer, which is
recorded on the amortized cost basis.
General Authorizations
Limitations as they relate to interest rate risk, credit risk, and concentration of credit risk are indicated in the
schedules below:
Maximum
Maximum
Percentage
Investment
of Portfolio
in One Issuer
Maximum
Remaining
Maturity
Local Agency Bonds, Notes, Warrants
5 years
None
None
Registered State Bonds, Notes, Warrants
5 years
None
None
U.S. Treasury Obligations
5 years
None
None
U.S. Agency Securities
5 years
None
None
Banker's Acceptance
180 days
40Vo
30Vo
Commercial Paper
Negotiable Certificates of Deposit
270 days
25Vo
lÙVo
5 years
30Vo
None
None
None
Authorized
Investment Type
I
Repurchase Agreements
year
Reverse Repurchase Agreements
92 days
207o ofbase
None
Medium-Term Corporate Notes
5 years
30Vo
None
N/A
N/A
20Vo
l0Vo
20Vo
707o
5 years
20Vo
None
N/A
N/A
N/A
None
None
None
None
None
None
Mutual Funds
Money Market Mutual Funds
Mortgage Pass-Through Securities
County Pooled Investment Funds
Local Agency Investment Fund (LAIF)
Joint Powers Authority Pools
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to
changes in market interest rates. 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. The
District manages its exposure to interest rate risk by investing in the county pool and money market mutual funds.
35
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
Weighted Average Maturity
The District monitors the interest rate risk inherent in its portfolio by measuring the weighted average maturity
its portfolio. Information about the weighted average maturity of the District's portfolio is presented in the
of
following schedule:
Fair
Value
Investment Type
Money Market Mutual Funds
San Luis Obispo County Investment Pool
Total
$
60,258
29,645,426
Maturity
Date
7lu20r4
251*
$29,705,684
* Weighted average days to maturity
Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.
This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
Presented below is the minimum rating required by the California Government Code, the District's investment
policy, or debt agreements, and the actual rating as of the year-end for each investment type.
Minimum
Rating
Legal
Rating June30,20l4
Not Required Not Rated
Not Required AAA/VI
Investment Type
Money Market Mutual Funds
San Luis Obispo County Investment Pool
Total
Fair Value
$
60,258
29,645,426
s29,705,684
Custodial Credit Risk - Deposits
This is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District
does not have a policy for custodial credit risk for deposits. However, the California Government Code requires
that a financial institution secure deposits made by State or local governmental units by pledging securities in an
undivided collateral pool held by a depository regulated under State law (unless so waived by the governmental
unit). The market value of the pledged securities in the collateral pool must equal at least 1 10 percent of the total
amount deposited by the public agency. California law also allows financial institutions to secure public deposits
by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits and letters
of credit issued by the Federal Home Loan Bank of San Francisco having a value of 105 percent of the secured
deposits. As of June 30,2014, the District's bank balance was not exposed to custodial credit risk.
36
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2ot4
NOTE 3. RECEIVABLES
Receivables at June 30,2014, consisted of intergovernmental grants, entitlements, interest, and other local
sources. All receivables are considered collectible in full.
General
Fund
Non-Major
Total
Governmental
Governmental
Funds
Federal Government
Categorical
aid
8
State Government
5
853,859
613,535
347,539
apportionment
Categorical aid
Lottery
State principal
Local Government
Other local sources
Total
1,839,497
r.045,453
$
37
4,699,883 $
467,517 $
25,510
Activities
2,307,OI4
853'859
639,045
347,539
9,049
502,076 $
1,054,502
5,201,959
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
NOTE
4. CAPITAL
ASSETS
Capital asset activity for the fiscal year ended June 30, 2014, was as follows:
Balance
Balance
July
1,2013
Deductions
Additions
Governmental Activities
Capital Assets Not Being Depreciated:
Land
progress
Construction in
Total Capital Assets
Not Being Depreciated
Capital Assets Being Depreciated:
Land improvements
Buildings and improvements
Furniture and equipment
Total Capital Assets
Being Depreciated
Less Accumulated Depreciation:
Land improvements
Buildings and improvements
Furniture and equipment
Total Accumulated Depreciation
Governmental Activities Capital Assets, Net
$
18,389,117
$
$
$
June 30, 2014
18,389,117
13,666,332
7,899,177
87,764
2r,477,745
32,055,449
7,899,177
87,764
39,866,862
4,905,136
4,905,136
126,260,852
12,896,914
557,623
126,8r8,475
212,116
13,109,030
t44,062,902
769,739
144,832,641
3,155,727
2,972,319 183,408
47,067,709
43,101,676 3,966,033
10,492,880
10,041,242 451,638
60,716,316
4,607,079
56,175,237
s 4,067,837 $ 87,764 $ 123,983,187
$ 120,003,114
Depreciation expense was charged as a direct expense to governmental functions
Governmental Activities
Instruction
Supervision of instruction
Instructional library, media, and technology
School site administration
Home-to-school transportation
as
follows:
$
2,781,177
78,185
35,134
223,811
r24,048
r81,967
Food services
All other pupil services
Ancillary services
Community services
All other general administration
Data processing
162,175
44,525
ll,156
117,931
53,982
Plant services
Total Depreciation Expenses Governmental Activities
38
$
786,988
4.601,079
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
NOTE 5 . INTERFUND TRANSACTIONS
Operating Transfers
Interfund transfers for the year ended June 30, 2014, consisted of the following:
Transfer From
Transfer To
Special Reserve
Fund for
Non-Major
Capital Outlay
Governmental
Projects
Funds
g
Non-Major Governmental Funds
661,7s7
$
Total
288,425
The Special Reserve Fund for Capital Outlay Projects transferred to the Debt Service
for Blended Component Units Non-Major Governmental Fund for debt service'
$
950,182
g
661,757
$
288,425
950,182
The Capital Facilities Non-Major Governmental Fund transferred to the Debt Service for
Blended Component Units Non-Major Governmental Fund for debt service.
Total
Interfund transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to
the fund that statute or budget requires to expend them, (2) move receipts restricted to debt service from the funds
collecting the receipts to the debt service fund as debt service payments become due, and (3) use unrestricted
revenues collected in the General Fund to finance various programs accounted for in other funds in accordance
with budgetary authorizations.
NOTE 6. ACCOUNTS PAYABLE
Accounts payable at June 30,2074, consisted of the following:
Special Reserve
Vendor payables
State principal apportionment
$
Fund for
Non-Major
Total
General
Capital Outlay
Governmental
Governmental
Fund
Projects
Funds
Activities
3,175,487
$
4,818,133
4,818,133
Construction
$
3,546,996
415,712
415,712
Salaries and benefits
Total
$
s
371,509
$
8,409,332
39
2,769,857
2,769,857
$
69,303
440,812
2,839,160
$
11,620,001
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNB 3O,2OI4
NOTE 7 . UNEARNED REVENUE
Unearned revenue at June 30,2014, consisted of the following:
General
Fund
59,916
Federal financial assistance
State categorical aid
21.279
81,195
$
Total
NOTE 8. LONG.TERM OBLIGATIONS
Summary
The changes in the District's long-term obligations during the year consisted of the following:
Balance
Balance
July
General obligation bonds
Premium on issuance
Cefl ificates of participation
Discount on issuance
Capital leases
Accumulated vacation
OPEB obligation - net
1,2013
Additions Deductions
June
30,2014
Due in
C)ne
$ 453,648 $ 2,915,000 $ 36,541,863 $
144,554 1,063,791
1,208,345
550,000 8,620,000
9,170,000
(4,248) (50,587)
(54,835)
14,663,721
14,663,721
661,067
41,960
619,107
2,662,516 1,911,696 1,145,219 2,888,993
$ 52,608,348 $ t7,131,025 $ 5,350,525 $ 64,388,848 $
$
39,003,215
Year
3,185,000
585,000
252998
4,022,998
a
Payments on the General Obligation Bonds are made in the Bond Interest and Redemption Fund.
a
Payments on the Certificates of Participation are made in the Debt Service for Blended Component Units
Fund.
a
Payments for the Accumulated Vacation are typically liquidated in the fund in which the employee was paid.
a
Payments for the OPEB obligation are made in the General Fund.
a
Payments for the Capital Leases are made in the General Fund.
40
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMBNTS
JUNE 30,2014
Bonded Debt
The outstanding general obligation bonded debt is as follows:
Issue Maturity Interest
Date Date
Original
Rate
Issue
Bonds
Bonds
Outstanding
Outstanding
July
2018 5.157o - 5.607o $ 21,749,593 $
2024 2.00Vo - 5.507o 2,249,576
06ll'7104 2029 3.OOVo -8.OO7o 21,349,802
02/10/05 2023 2.007o - 5,25Vo 12,175,000
03/15/06 2023 4.OO7o - ll.90Vo 19,53'7,198
08109197
02/2OlO2
$
1997 General Obligation Bonds, Series
1, 2013
Redeemed
Accretion
6,899,137
2,071,090
2,208,945
12,090,000
15,734,043
39,003,215
June 30,2014
$
80,000
40,269
500,000
88,509
5,000
980,000
453,648 $ 2,915,000 $
324,870
$
1,350,000
5,874,007
2,031,359
1,79'7,454
12,085,000
14,754,043
36,541,863
A
, the qualified electorate of the Lucia Mar Unified School District approved the issuance and sale
of General Obligation Bonds of $24,000,000, The first issuance of Current Interest Bonds, Series A, in the
amount of $16,1 10,000 and Capital Appreciation Bonds, Series A in the amount of $5,639,593 occurred in
August 1997. The proceeds of 621,477,990 after issuance costs were used to fund capital projects. Payments are
collected by the County Tax Assessor and remitted to a trustee. The bonds mature each August 1 through
August 2017 , with semi-annual interest payments due August and February. At June 30,2014, the principal
In August
1997
balance outstanding was $5,874,007.
The bonds mature through 2018 as follows:
Principal
Including Accreted
Fiscal Year
2015
2016
Interest to Date
$
1,433,191
r,464,068
1,482,144
1,494,604
5,874,007
2017
2018
Total
4t
Future
Interest
Accretion Total
$ 265,055 $ 1,698,246
195,416 1,659,484
115,543 1,597,687
24,979 1,519,583
$ 600,993 $ 6,475,000
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2ol4
1997 General Obligation Bonds, Series B
In February 2002, as authorized by the approved resolution, the District issued additional Current Interest Bonds,
Series B, in the amount of $1,970,000 and Capital Appreciation Bonds, Series B, in the amount of $279,576.
These bonds mature each August 1 through August 2023, with semi-annual interest payments due August and
February. At June 30,2014, the principal balance outstanding was $2,031,359.
The bonds mature through 2024 as follows:
Principal
Interest and
IncludingAccreted Futurelnterest
Accretion Total
95,000 $ 112,535 $ 207,535
$
211,244
100,000 lrl,244
209,985
109,985
100,000
125,000 108,397 233,397
150,000 105,796 255,796
1,46t,359 442,858 1,904,217
2,031,359
$ 990,815 $3,022,174
$
Year
2Ot5
2016
2017
2018
2019
2020-2024
Total
Interest to
Fiscal
2004 General Obligation Bonds, Series
Date
A
In June 2004, the qualified electorate of the Lucia Mar Unified School District approved the issuance and sale of
General Obligation Current Interest Bonds, Series A, in the amount of $20,790,000 and General Obligation
Capital Appreciation Bonds, Series A, in the amount of $559,802. The bonds were issued in June 2004. The
proceeds of $21,823,711 after net issuance costs and premiums are being used to fund capital projects. Payments
are collected by the County Tax Assessor and remitted to a trustee. The bonds mature each August 1 through
August 2028, with semi-annual interest payments due August and February. At June 30,2014, the principal
balance outstanding was $1,797,454, and unamortized premium was $32,858.
42
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
The bonds mature through 2029 as follows:
Principal
Interest and
IncludingAccreted Futurelnterest
$
Date
5es,ooo
Interest to
Fiscal Year
2015
,
Accretion
S
Total
7r7,3ll
2016
i1?,,:r:!
103,1 35
2017
I 1 1,330
1
r20,177
t29.727
r20,177
r29,727
820,670
2018
20r9
820,670
2020-2024
2025-2029
g
Total
99r,965
2,399,321
1,202,454
r.797.4s4
fi
11,330
2,r94,4r9
s
4,196,775
2005 General Obligation Refunding Bonds
In February 2005, the District issued $12,175,000 of General Obligation Refunding Bonds and used the proceeds
to purchase securities to be held in trust to pay off $12,040,000 of the 1997 Current Interest Bonds, Series A, and
Capital Appreciation Bonds, Series A. The reacquisition price exceeded the carrying amount of the old debt by
$850,800. This amount shown as deferred amount on refunding will be amortized over the life of the new debt.
This advance refunding was undertaken to reduce total debt service payments through fiscal year 2023by
approximately $174,000 and resulted in an economic gain of approximately $1,150,000. The refunding bonds
mature each August 1 through August 2022, with semi-annual interest payments due August and February. At
June 30, 2014,tieprincipal balance outstanding was $12,085,000, and unamortized premium was $1,030,933.
The bonds mature through 2023 as follows:
Interest to
Fiscal Year
$
20t5
20r6
2017
Principal
s,000
$
2020-2023
Total
$
43
633,911
$
638,911
5,000
633,733
638,733
10,000
633,455
633,078
582,619
1,134,788
643,455
643,078
11,274,788
4,25t,s84
s 16,336,584
10,000
20r8
20r9
Total
Maturity
1,915,000
10.140.000
12,085,000
g
2,497,6t9
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
2006 General Obligation Refunding Bonds
In March 2006, the District issued $18,795,000 of General Obligation Current Interest Refunding Bonds, and
General Obligation Capital Appreciation Refunding Bonds, in the amount of $742,198. The proceeds from the
bonds were used to purchase securities to be held in trust to pay off $17,910,000 of the 2004 Cunent Interest
Bonds, Series A, through August 2022. As a result, the refunded 2004 bonds are considered defeased and the
liability has been removed from the government-wide financial statements. At June 30, 2014, $14,754,043
remains outstanding.
The bonds mature through 2023 as follows:
Principal
Including Accreted
Fiscal
Year
Interest to Date
$
20r5
20t6
2017
20r8
2019
2020-2023
fi
Total
1,040,000
Interest and
Future Interest
Accretion
83+,69q
799,952
$
1,775,000
1,925,000
2,100,000
2,275,000
5,639,043
14,754,043
$
738,308
662,425
580,897
1,491,839
5,108,115
Total
$
1,874,694
2,574,952
2,663,308
2,762,425
2,855,897
7,130,882
$ 19,862,158
Certifîcates of Participation
The outstanding certificates of participation are as follows:
Certificates
Outstanding
JulY 1,2013
3.007o - 5.00Vo $ 12,500,000 $ 3,305,000
3.507o - 5.757o 4,245,000 3,420,000
2,445,000 2,445,000
5;75Vo
Issue Maturity Interest
Rate
Date Date
08/0U04
2030
04107111 2033
04107111 2026
Certificates
Outstanding
Original
Issue
-7.137o
$9,170,000
44
Issued
Redeemed
$
130,000
420,000
$
s
June 30,2014
$
3,175,000
3,000,000
2.445,000
550,000 $8,620,000
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
2004 Certifrcates of Participation, Series B
On August 1,2004, the District's Financing Corporation issued $8,145,000 in Series A certificates of participation
and $4,355,000 in Series B certificates of participation with interest rates ranging from three to five percent. The
certificates mature each May 1 through May 1, 2030, with semi-annual interest payments due May 1 and
November 1. The proceeds are being used to purchase and construct facilities to be used by the District. The
District repaid $8,045,000 of the 2004 Series A certificates in February 2005 , since the board elected not to
construct Hidden Oaks Elementary School at that time. At June 30, 2014, the principal balance outstanding on
the2004 Series B Certificates was $3,175,000.
The certificates mature through 2030 as follows:
Interest to
Maturity
Principal
Fiscal Year
$
2015
140,000
$
153,063
Total
$
293,063
2016
145,000
r47,ll3
292,113
2017
150,000
140,950
290,950
20t8
155,000
134,763
289,763
2019
165,000
127,594
292,594
2020-2024
945,000
510,000
1,455,000
2025-2029
1,200,000
254,487
1,454,487
275,000
13,750
2030
Total
201,1 Certificates of
$ 3,175,000
s
7,48r,714
g
288,750
4,656,714
Participation
On April 7 ,2011 the District's Financing Corporation issued 54,245,000 in Series A certificates of participation
and $2,445,000 in Series B certificates of participation with interest rates ranging from 3.50 to 7 .73 percent. The
certificates mature each May I through May 1, 2033, with semi-annual interest payments due May I and
November l. The proceeds are being used to refund the remaining portion of the 1998 certificates and construct
facilities to be used by the District. At June 30,2014, the principal balance outstanding on the 2011 Certificates
was $5,445,000 and unamortized discount was $50,587.
45
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATBMENTS
JUNE 30,2014
The certificates mature through 2033 as follows:
Interest to
Maturity
Principal
Fiscal Year
2015
2016
$
445,000
$
346,601
$
Total
79t,6ot
328,801
328,801
2017
2018
328,801
328,801
328,801
2019
2020-2024
328,801
328,801
r,447,35r
2,367,351
895,870
3,480,870
1,68s,088
9,640,114
920,000
2,585,000
1,495,000
2025-2029
2030-2033
328,801
190,088
$ 5,445,000 $ 4,195,rt4 $
Total
Capital Leases
The District's liability on lease agreements is summarized below:
Balance, July 1, 2013
Additions
Balance, June30.2014
$ 21,683,868
46
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3o,2ol4
The capital leases have minimum lease payments as follows:
Lease
Payment
Fiscal Year
$
20r5
20r6
1,117,050
1,030,187
2017
980,789
2018
r,0r7,036
2019
1,054,901
2020-2024
5,502,163
2025-2029
6,747,975
2030-2033
4,233,827
21,683,868
7,020,147
Total
Less: Amount Representing Interest
Present Value of Minimum Lease Payments
$ 74,663,721
Accumulated Unpaid Employee Vacation
The long-term portion of accumulated unpaid employee vacation for the District at June 30,2074, amounted to
$661,067.
Other Postemployment Benefits (OPEB) Obligation
The District's annual required contribution for the year ended June 30, 2014, was $1,838,570, and contributions
made by the District during the year were $1,572,019. Interest on the net OPEB obligation and adjustments to the
annual required contribution were $133,126 and $(173,200), respectively, which resulted in an increase to the net
OPEB obligation of 5226,477. As of June 30,2014, the net OPEB obligation was $2,888,993. See Note 10 for
additional information regarding the OPEB obligation and the postemployment benefits plan.
47
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
NOTE9-FUNDBALANCES
Fund balances are composed of the following elements:
Special Reserve
Fund for
Bond Interest
CapitalOutlay and Redemption Governmental
General
Fund
$
20,000
Stores inventories
10,395
Prepaid expenditures
25,207
Total Nonspendable
$
$
$
2o,ooo
135,128
145,523
25,207
135,128
55,602
190,730
576,859 2,553,049
3,740,716 3,740,716
1,976,190
Capital projects
5,590,984
Debt services
Total Restricted
Total
-
Restricted
Legally restricted programs
Funds
Fund
Projects
Nonspendable:
Revolving cash
Non-Major
5,590,984
1,976,190
60,258
4,377,833
5,651,242
11,945,007
Committed
Adult education program
Defened maintenance program
Total Committed
64,355
64,355
7,242
'7,242
71,597
71,597
Assigned
School site canyover
119,549
119,549
12n3MAA
507,671
507,677
t3/t4MAA
Future board action
Other assignments
Total Assigned
507,671
507,671
8.838.4',14
8,838,474
-
9,9'13,365
8,002,109
8,002,109
8,002,109
17,975,474
Unassigned
Economic uncertainties
2,617,466
Total
s14,622,623
2,617,466
$
48
8,002,109
$
5,590,984 $ 4,584,558
$32,800,274
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3O,2OI4
NOTE 10 . POSTEMPLOYMENT HEALTH CARE PLAN AND OTHER POSTEMPLOYMENT
BENEFITS (OPEB) OBLIGATION
Plan Description
The Postemployment Benefits Plan (the Plan) is a single-employer defined benefit healthcare plan administered
by the Lucia Mar Unihed School District. The Plan provides medical, vision, and dental insurance benefits to
eligible retirees and their spouses. Membership of the Plan consists of 276 retirees and beneficiaries currently
receiving benefits, and932 active Plan members.
Contribution InformatÍon
The contribution requirements of plan members and the District are established and may be amended by the
District and the California Teachers Association (CTA), the local California Service Employees Association
(CSEA), and unrepresented groups. The required contribution is based on projected pay-as-you-go financing
requirements. For fiscal year 2013-2014, the District contributed 9I,572,019, to the Plan, of which $1,289,915
was used for current premiums, and $282,104 was an implicit subsidy.
Funded Status and Funding Progress
Actuarial
Accrued
Liability
(AAL) -
Actuarial
Actuarial
Valuation
Value of
Projected
Date
Assets (a)
Unit Credit (b)
Iuly l,2OI2
$-
$
15,701,597
UAAL as a
Unfunded
Percentage of
Funded
AAL
Covered Covered Payroll
(UAAL)
Ratio
([b - a] / c)
(a / b)
(b - a)
Payroll (c)
$ 15,701,597 O7o S 51,769,861 3OVo
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, investment returns, mortality, and the healthcare cost trend. Amounts determined regarding the
funded status of the Plan and the annual required contributions of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about the future. The schedule of
funding progress, presented as required supplementary information following the notes to the financial statements,
presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for benefits.
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 accrued liabilities and the actuarial value of assets, consistent with the long-term perspective
of the calculations.
49
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
In the July 1,2012, actuarial valuation, the projected unit credit method was used. The actuarial assumptions
included a five percent investment rate of return (net of administrative expenses), based on the plan being funded
in an irrevocable employee benefit trust invested in a combined equity and fixed income portfolio. Healthcare
cost trend rates ranged from an initial eight percent to an ultimate rate of five percent. The cost trend rate used for
the Dental and Vision programs was four percent. The UAAL is being amortized at a level dollar method.
Annual OPEB Cost and Net OPEB Obligation
The District's annual OPEB 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 cost each year
and amortize any unfunded actuarial accrued liabilities (UAAL) (or funding excess) over a period not to exceed
thirty years. The following table shows the components of the District's annual OPEB cost for the year, the
amount actually contributed to the plan, and changes in the District's net OPEB obligation to the Plan:
$
contribution
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost (expense)
Contributions made
Increase in net OPEB obligation
Net OPEB obligation, beginning of year
Net OPEB obligation, end of year
Annual required
1,838,570
133,126
073,200)
1,798,496
Q,572,019)
226,477
2,662,516
$
2,888,993
Trend Information
Trend information for the annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the
net OPEB obligation is as follows:
Actual
Employer
Contribution
Annual
Year Ended
OPEB
June 30,
Cost
$
Percentage
Net OPEB
Contributed
Obligation
s
2,364,651
1,504,100
7l.62Vo
1,802,980
1,505,115
83.48Vo
2,662,516
1,798,496
t.572,019
87.417o
2.888.993
2012
2013
2,100,248
2014
50
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
NOTE 11 . RISK MANAGEMENT
Property and Liability
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. During fiscal year ending June 30, 2014,the District
was a member of Self-Insured Schools of California Property and Liability Program (SISC II) for property and
liability insurance coverage. Settled claims have not exceeded this commercial coverage in any of the past three
years. There has not been a significant reduction in coverage from the prior year.
Workers' Compensation
For lrscal year 20l4,the District participated in Self-Insurance Program for Employees (SIPE), an insurance
purchasing pool. The intent of the SIPE is to achieve the benefit of a reduced premium for the District by virtue
of its grouping and representation with other participants in the SIPE. The workers'compensation experience of
the participating districts is calculated as one experience and a common premium rate is applied to all districts in
the SIPE. Each participant pays its workers' compensation premium based on its individual rate. Total savings
are then calculated and each participant's individual performance is compared to the overall savings percentage.
A participant will then either receive money from or be required to contribute to the "equity-pooling fund". This
"equity pooling" arrangement insures that each participant shares equally in the overall performance of the SIPE.
Participation in the SIPE is limited to districts that can meet the SIPE selection criteria.
Employee Medical Benefits
The District is a member of Self-Insured Schools of California Health and Welfare Benefits Program (SISC ilI) to
provide employee health benefits. SISC m is a shared risk pool comprised of various participating agencies.
Rates are set through an annual calculation process. The District pays a monthly contribution, which is placed in
a common fund from which claim payments are made for all participating districts. Claims are paid for all
participants regardless of claims flow. The Board of Directors has a right to return monies to a District
subsequent to the settlement of all expenses and claims if a District withdraws from the pool.
NOTE 12 . F,M.PLOYEE RETIREMENT SYSTEMS
Qualified employees are covered under multiple-employer retirement plans maintained by agencies of the State of
California. Certificated employees are members of the California State Teachers' Retirement System (CaISTRS)
and classified employees are members of the California Public Employees' Retirement System (CaIPERS).
51
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
CaISTRS
Plan Description
The District contributes to CaISTRS, a cost-sharing multiple-employer public employee retirement system
defined benefit pension plan administered by CaISTRS. The plan provides retirement and disability benefits,
annual cost-of-living adjustments, and survivor benefits to beneficiaries. As a result of the Public Employee
Pension Reform Act of 2013 (PEPRA), changes have been made to the defined benefit pension plan effective
January 1,2013. Benefit provisions are established by State statutes, as legislatively amended, within the State
Teachers'Retirement Law. CaISTRS issues a separate comprehensive annual financial report that includes
financial statements and required supplementary information. Copies of the CaISTRS annual financial report may
be obtained from CaISTRS, 100 Waterfront Place, West Sacramento, California 95605.
Funding Policy
Due to the implementation of the Public Employee Pension Reform Act of 2013 (PEPRA), new members must
pay at least 50 percent of the normal costs of the plan, which can fluctuate from year to year. For 2013-2014, the
required contribution rate for new members is 8.0 percent. "Classic" plan members are also required to contribute
8.0 percent of their salary. The_District is required to contribute an actuarially determined rate. The actuarial
methods and assumptions used for determining the rate aÍe those adopted by CaISTRS Teachers' Retirement
Board. The required employer contribution rate for fiscal year 2013-2014 was 8.25 percent of annual payroll.
The contribution requirements of the plan members are established by State statute. The District's contributions to
CaISTRS for the fiscal years ending June 30, 2014,2013, and2012, were $3,417,194, $3,189,120, and
$3,1 18,300, respectively, and equal 100 percent of the required contributions for each year.
CaIPERS
Plan Description
The District contributes to the School Employer Pool under CaIPERS, a cost-sharing multiple-employer public
employee retirement system defined benefit pension plan administered by CaIPERS, The plan provides
retirement and disability benefits, annual cost-of-living adjustments, and survivor benefits to plan members and
beneficiaries. As a result of the Public Employee Pension Reform Act of 2013 (PEPRA), changes have been
made to the defined benefit pension plan effective January 1,2013. Benefit provisions are established by State
statutes, as legislatively amended, within the Public Employees' Retirement Laws. CaIPERS issues a separate
comprehensive annual financial report that includes financial statements and required supplementary information.
Copies of the CaIPERS' annual financial report may be obtained from the CaIPERS Executive Office,
400 P Street, Sacramento, California 9581 1.
52
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 3O,2OI4
Funding Policy
result of the implementation of the Public Employee Pension Reform Act of 2013 (PEPRA), new members
must pay at least 50 percent of the normal costs of the plan, which can fluctuate from year to year. For 20132014, the normal cost is 1 1.85 percent, which rounds to a 6.0 percent contribution rate. "Classic" plan members
continue to contribute 7.0 percent. The District is required to contribute an actuarially determined rate. The
actuarial methods and assumptions used for determining the rate are those adopted by the CaIPERS Board of
Administration. The required employer contribution rate for fiscal year 2013-2014 was 7L442 percent of covered
payroll. The contribution requirements of the plan members are established by State statute. The District's
õontributions to CaIPERS for the fiscal years ending June 30, 2074,2013, and2012, were 51,446,436,
$1,344,282, and $1,228,788, respectively, and equal 100 percent of the required contributions for each year.
As
a
On Behalf Payments
The State of California makes contributions to CaISTRS on behalf of the District. These payments consist of
State General Fund contributions to CaISTRS in the amount of $2,008,53 4 (5.541percent of annual payroll).
Contributions are no longer appropriated in the annual Budget Ac¿ for the legislatively mandated benefits to
CaIPERS. Therefore, there is no on behalf contribution rate for CaIPERS. Under accounting principles generally
accepted in the United States of America, these amounts are to be repofted as revenues and expenditures.
Accordingly, these amounts have been recorded in these financial statements. On behalf payments have been
excluded from the calculation of available reserves, and have not been included in the budget amounts reported in
the General Fund - Budgetary Comparison Schedule.
NOTE 13. COMMITMENTS AND CONTINGENCIES
Grants
The District received financial assistance from Federal and State agencies in the form of grants. The
disbursement of funds received under these programs generally requires compliance with terms and conditions
specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims
resulting from such audits could become a liability of the General Fund or other applicable funds. However, in
the opinion of management, any such disallowed claims will not have a material adverse effect on the overall
financial position of the District at June 30,2014.
Litigation
The District is involved in various litigation arising from the normal course of business. In the opinion of
management and legal counsel, the disposition of all litigation pending is not expected to have a material adverse
effect on the overall financial position of the District at June 30,2014'
53
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
Construction Commitments
As of June 30,2014, the District had the following commitments with respect to the unfinished capital projects:
Remaining
Construction
Commitment
Capital Projects
Arroyo Grande High School 800 Sub Station Replacement
Arroyo Grande High School Gym Bleachers Replacement
Chevron Energy Solutions
Warehouse Metal Storage Building
Student Services Office Additions
Ocean View Relo Inst
Shell Beach Relo Inst
Central Coast New Tech High School Phase 2
Prop 39 Energy Consulting
$
$
Expected
Date
of
Completion
3,ooo
November 2014
9,993
September 2014
2,476,995
December 2014
145,467
December 2014
5,488
September 2014
42,r52
October 2014
49,129
October 2014
526,324
June 2018
143,000
3,400,548
December 2016
NOTE 14. PARTICIPATION IN PUBLIC ENTITY RISK POOLS AND JOINT POWER AUTHORITIES
The District is a member of the Self-Insurance Program for Employees (SIPE), Self-Insured Schools of California
Property and Liability Program (SISC il), and Self-Insured Schools of California Health and Welfare Benefits
Program (SISC ilI) public entity risk pools and the Santa Lucia Regional Occupational Program (SLROP) and
Central California Schools Financing Authority (CCSFA) joint powers authorities (JPAs). The District pays an
annual premium to the applicable entity for its workers'compensation, and property liability and health coverage.
Payments for the Regional Occupation Program and the tax collections are exchanged with SLROP and CCSFA,
respectively. The relationships between the District, the pools, and the JPAs are such that they are not component
units of the District for financial reporting purposes.
These entities have budgeting and financial repofiing requirements independent of member units and their
financial statements are not presented in these financial statements; however, fund transactions between the
entities and the District are included in these statements. Audited financial statements are generally available
from the respective entities.
During the year ended June 30, 2Ol4,the District made payments of $1,545,754, $356,045, and$12,192,202to
SIPE, SISC II, and SISC III, respectively, for workers' compensation, property liability, and health coverage for
active employees.
54
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30,2014
NOTE 15 . RESTATEMENT OF PRIOR YEAR NET POSITION
The District adopted GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, in the current
year. As a result, the effect on the current fiscal year is as follows:
Statement of Net Position
Net Position - Beginning
$
93,070,260
s
91,980,223
(1,090,037)
Restatemenlcost of issuance
Net Position - Beginning as Restated
55
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u p p rn u n tv r¿.nv
56
I r,¡ r o RMATI o N
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LUCIA MAR UNIFIED SCHOOL DISTRICT
GENERAL FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED JUNE 3O,2OI4
Variances Positive
(Negative)
Actual
Budseted Amounts
Final
Original
REVENUES
Local Control Funding Formula
$
Federal sources
Other State sources
Other local sources
Total Revenues
EXPENDITURES
1
Current
Certificated salaries
Classified salaries
Employee benefits
Books and supplies
Services and operating expenditures
Capital outlay
Other outgo
Total Expenditures
(Defïciency)
of Revenues
Excess
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers out
I
NET CHANGE IN FUND BALANCES
Fund Balances - Beginning
Fund Balances - Ending
I
(GAAP
Final
Basis)
to Actual
s 69,597,009 $ 603,949
7,268,554 8,268,170 7,232,468 (1,035,702)
3,583,580 6,392,631 8,369,068 r,976,437
3,627,865 4,718,907 4,269,895 (449,012)
68,526,002
$
68,993,060
83,006,001 88,372,768 89,468,440
r,095,672
40,826,200 42,985,913 42,456,505 529,408
12,142,216 12,518,218 12,580,853 (62,635)
16,128,966 15,965,006 17,648,524 (1,683,518)
3,234,551 6,208,528 4,824,214
7,567,291 8,536,260 6,715,213
1,384,314
r,821,047
382,170
84,263,355 91,605,468 89,257,413
2,348,055
43,493 560,311 178,141
4,320,638 4,837,232 4,853,963 (22,73r\
(1,257,354)
2tl
(3,232,700)
027
3,443,727
(458,286)
(1,715,640) (3,232,700) 211,027 3,443,'727
14,41r,596 14,411,596 14,417,596 __
$ 12,695,956_ _q_11,1?s,8%_
_s
14,622,623_
_g 3,4Æ3n
On b"hulf puyments of $2,008,534 a¡e included in the actual revenues and expenditures, but have not been included in the
budgeted amounts.
57
LUCIA MAR UNIFIED SCHOOL DISTRICT
SCHEDULE OF OTHER POSTEMPLOYMENT BENEFITS (OPEB) FUNDING
PROGRESS
FOR THE YEAR ENDED JUNE 30 2014
Actuarial
Accrued
Liability
(AAL) -
Actuarial
Valuation
Actuarial
Value of
Projected
Date
Assets (a)
Unit Credit (b)
$-
$
July 1,2007
17,900,000
UAAL
Unfunded
AAL
(UAAL)
(b-a)
$
as a
Percentage
Funded
Ratio
Covered
(a/b)
Payroll (c)
([b-a]/c)
17,900,000
OVo
$
59,699,000
307o
July l,2009
78,129,247
18,129,247
OVo
50,141,646
367o
July 1,2012
15,701,597
15,701,597
OVo
5r,769,861
3OVo
58
of
Covered Payroll
S
u ppnn un wr¿,nv I x p onMATI
59
oN
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LUCIA MAR UNIFIED SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30,2014
Pass-Through
Entity
Federal Grantor/Pass-Through
CFDA
Identifying
Program
Grantor/Program
Number
Number
Expenditures
84.0024
14508
84.002
13978
38,803
84.0024
14109
10,000
U.S. DEPARTMENT OF EDUCATION
Passed through California Department of Education (CDE):
Adult Education - Basic Grants to States Cluster:
Adult Basic Education - Adult Basic Education and ESL
Adult Basic Education - Adult Secondary
Adult Basic Education - English Literacy and Civics Education
Total Adult Education - Basic Grants to
$
10,649
59,452
States Cluster
Carl D. Perkins Vocational and Technical Education Act of
1998 Secondary Education
84.048
14894
84.027
13379
1,658,110
84.027
l0l l5
15,974
84.173
13430
84.027¡^
r3682
74,478
134,482
65,660
Individuals with Disabilities Act (IDEA)
Special Education Cluster (IDEA):
Basic Local Assistance Entitlement, Part B, Section 6l I
Local Assistance, Part B, Section 6l l, Private School ISPs
Preschool Grants, Part B, Section 619 (Age 3-4-5)
Preschool Local Entitlement, Part B, Section 611 (Age 3-4-5)
Total Special Education Cluster (IDEA)
1,883,044
State Improvement Grant, Improving
84.323
14577
4,661
Title I, Part A - Basic Grants Low Income and Neglected
Title I, Part A, Program Improvement LEA Corrective Action,
84.010
t4329
1,130,922
Extensive Performance Problems
Total Title I, Part A Cluster
84.389
r4955
Special Education Systems
No Child Left Behind Act (NCLB)
Title I, Part A Cluster:
1,049,050
2,179,972
Title I, Part C Cluster:
Title I, Part C, Migrant Ed (Regular and Summer Program)
Title I, Migrant Ed Summer Program
Total Title I, Part C Cluster
84.011
14326
84.011
10005
57,769
9,r14
66,883
Title II, Part A Cluster:
Title II, Part A - Improving Teacher Quality Local Grants
Title tr, Part A - Administrator Training
84.367
74341
84.36'1
r4334
353,501
7,868
361,369
Total Title II, Part A Cluster
See accompanying note to supplementary information.
60
LUCIA MAR UNIFIED SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
FOR THE YEAR ENDED JUNE
Pass-Through
Entity
CFDA Identifying Program
Number Number Expenditures
Federal Grantor/Pass-Through
Grantor/Program
U.S. DEPARTMENT OF EDUCATION (Continued)
Title III Cluster:
Title Itr - Immigrant Education Program
84.365
15146 $
84.365
t4346
Title Itr - Limited English Proficient (LEP)
Student Program
Total Title III Cluster
Title V Part A, Innovative Education Strategies
19,688
155,705
175,393
84.2984
t4354
84.196
r4332
84.3'.741'
tll
10,796
Title X, McKinney-Vento Homeless Children
Assistance Grants
Teacher Incentive Fund
47,387
1,603,045
6,457,662
Total U.S. Department of Education
U.S. DEPARTMENT OF AGRICULTURE
10.665
Forest Reserve
10044
1,497
Passed through California Department of Education (CDE):
Child Nutrition Cluster:
Especially Needy Breakfast
10.553
13526
516,819
National School Lunch Program
r0.555
13524
r,940,514
Meal Supplement
10.555
13396
69,109
Food Distribution
10.555
13524
240,4r7
Total Child Nutrition Cluster
2,766,919
Total U.S. Department of Agriculture
2,768,476
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Passed through California Department of Health Services:
Medicaid Cluster:
Medi-Cal Billing Option
93.778
10013
226,166
Medical Administrative Activities Program
93.778
10060
507,671
Total U.S. Department of Health and
Human Services
733,837
$
Total Federal Programs
[]
Pass-Through Entity Identifying Number not available
See accompanying note to supplementary information.
6t
9,9s9,915
LUCIA MAR UNIFIED SCHOOL DISTRICT
LOCAL EDUCATION AGENCY ORGANIZATION STRUCTURE
JUNE 30,2014
ORGANIZATION
The Lucia Mar Unified School District was unified in 1965 and consists of an area comprising approximately 483
square miles. The District operates eleven elementary schools, three middle schools, two high schools, one
continuation high school, and one adult education program. There were no boundary changes during the year.
GOVERNING BOARI)
OFFICE
MEMBER
TERM EXPIRES
Vicki Meagher
President
20r6
Chad Robertson
Vice President
2018
Dee Santos
Clerk
2016
Vern Dahl
Member
2018
Mark Millis
Member
2018
Colleen Martin
Member
2018
Don Stewart
Member
20r6
ADMINISTRATION
Jim Hogeboom
Superintendent
Raynee J. Daley, Ed.D.
Assistant Superintendent, Business
Chuck Fiorentino
Assistant Superintendent, Human Resources
Tom Butler
Assistant Superintendent, Curriculum
Cynthia Ravalin
Director of Student Services
See accompanying note to supplementary information.
62
LUCIA MAR UNIUED SCHOOL DISTRICT
SCHEDI]LE OF AVERAGE DAILY ATTENDANCE
FOR THE YEAR ENDED JUNE 3O,2OI4
Final Report
SecondPeriod Annual
Report
Regular
ADA
Report
3,050.47
2,205.37
L,582.35
2,200.48
3,361.27
3,327.28
10,199.46
t0,t56.67
Transitional kindergarten through third
2.92
2.92
Fourth through sixth
3.09
3.09
Seventh and eighth
1.22
1.22
Ninth through twelfth
Total Extended Year Special Education
0.97
0.97
8.20
8.20
0.97
0.99
0.97
10,208.63
0.99
10,165.86
Transitional kindergarten through third
Fourth through sixth
Seventh and eighth
Ninth through twelfth
Total Regular ADA
3,051.94
1,576.97
Extended Year Special Education
Special Education, Nonpublic, Nonsectarian Schools
Ninth through twelfth
Total Special Education, Nonpublic,
Nonsectarian Schools
Total ADA
See accompanying note to supplementary information.
63
LUCIA MAR UNIFIED SCHOOL DISTRICT
SCHEDULE OF INSTRUCTIONAL TIME
FOR THE YEAR BNDED
Reduced
1986-87
1986-87
2013-14
Number of Days
Traditional
Calendar
Multitrack
Calendar
Status
180
N/A
Complied
N/A
N/A
N/A
Complied
52,585
180
180
180
Grade 4
54,117
180
54,117
180
54,117
180
N/A
N/A
N/A
Complied
Grade 5
GradeT
57,635
180
Grade 8
57,635
180
65,1 15
180
Grade Level
Kindergarten
Grades I - 3
Minutes
Minutes
Actual
Requirement
Requirement
Minutes
36,000
35,000
50,400
49,000
36,150
Grade I
52,585
Grade2
52,58s
Grade 3
Grades 4 - 6
54,000
Graðes 9
-
12
54,000
64,800
Complied
52,500
Grade 6
Grades 7 - 8
Complied
Complied
Complied
52,500
N/A
N/A
Complied
Complied
Complied
Complied
63,000
Grade
l0
65,1 15
180
Grade
11
65,1
l5
180
N/A
N/A
N/A
180
N/A
Grade 9
Grade 12
65,1 15
See accompanying note to supplementary information.
64
Complied
Complied
LUCIA MAR UNIFIED SCHOOL DISTRICT
RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET RBPORT WITH
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30,2014
There were no adjustments to the Unaudited Actual Financial Report, which required reconciliation to the audited
financial statements at June 30,2014.
See accompanying note to supplementary information.
65
LUCIA MAR UNIFIED SCHOOL DISTRICT
SCHEDULE OF FINANCIAL TRENDS AND ANALYSIS
FOR THE YEAR ENDED JUNE 30,2014
(Budget)
2015l
2014
2013
89.468.440
82.425,893
89.25',1,4t3
82,67',7,536
2012
GENERAL FUND
$
Revenues
89,575,666
s
90,864,182
Expenditures
$ 82,933,892
81,322,130
INCREASE (DECREASE)
(251,643) $ 1,611,762
211,027
$ (1,288,516)
$ 13,334,107 fi 14,622,623 $ 14,41r,596 $ 14,663,239
$ 2,725,925 $ 2,617,466 $ 2,420,372 S 2,426,489
IN FUND BALANCE
ENDING FUND BALANCE
AVAILABLE RESERVES
2
AVAILABLE RESERVES AS A
PERCENTAGE OF TOTAL OUTGO
LONG-TERM OBLIGATIONS
3
$
N/A
64,388,848
3.067o
3.00Vo
3.00Vo
3.0070
$
52,608,348
$
ss,0s4,246
K-I2 AVERAGE DAILY
ATTENDANCE AT P-2
10,1 88
10,209
10,100
10,153
TheGeneralFundbalancehasdecreasedby$40,616overthepasttwoyears. Thefiscalyear2014-2015budget
projects a further decrease of $1,288,516 (8.8 percent). For a district this size, the State recommends available
reserves ofat least three percent oftotal General Fund expenditures, transfers out, and other uses (total outgo).
The District has incurred operating surpluses in two of the past three years but anticipates incurring an operating
deficit during the2014-2015 fiscal year. Total long-term obligations have increased by $9,334,602 over the past
two years.
Average daily attendance has increased by 56 over the past two years. Decline of 21 ADA is anticipated during
fiscal year 2014-2015.
t
Budget 2015 is included for analytical purposes only and has not been subjected to audit.
Available reserves consist of all funds reserved for economic uncertainty contained within the General Fund.
'On b.hulf puyments of $2,008,534, $1,998,478, and$'1,927,496, respectively, have been excluded from the calculation of
available reserves for the fiscal years ending June 30, 2014,2013, and 2012.
2
See accompanying note to supplementary information.
66
LUCIA MAR UNIFIED SCHOOL DISTRICT
NON.MAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30,201.4
Adult
Cafeteria
Fund
Education
Fund
ASSETS
Deposits and investments
Receivables
Stores inventories
Total Assets
$
$
18,725
$
203,948
46,085
449,070
135,728
64,810 $
788,146
Deferred
Maintenance
Fund
g
7,242
Capital
Facilities
Fund
$
3,218,578
$
3,218,578
6,92r
$
14,163
6
6,921
LIABILITIES AND FUND BALANCES
Liabilities:
455
Accounts payable
Fund Balances:
-
Nonspendable
Restricted
76,159
Total Fund Balances
$
3,138,539
7,242
64,355
717,987
64,810 $
788,146
See accompanying note to supplementary information.
67
80,039
135,128
576,859
64.355
Committed
Total Liabilities and
Fund Balances
$
$
7,242
14,t63 $
3,138,539
3,218,578
County
School
Facilities
Fund
879,415
Debt Service
Fund for Blended
Component
Units
$
60,259_
Total
Non-Major
Governmental
Funds
$
4,388,166
502,076
879,4t5
$
$
60,258
277,238
r35.t28
$
5,025,370
$
+40,8t2
602J7;
60,258
4,377,833
602,177
60,258
71,597
4,584,558
sz9,4t5
$
60,258
$
135,128
5,025,370
67
LUCIA MAR UNIFIED SCHOOL DISTRICT
NON.MAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 3O,2OI4
Adult
Cafeteria
Fund
Education
f,'und
REVENUES
Local Control Funding Formula
$
75,903
Other State sources
Other local sources
Capital
Facilities
Fund
$ 382,383 $
$
59,452
Federal sources
Deferred
Maintenance
Fund
2.766.919
28,444
;?:r',trÎï ,,ts;
163,799 3,914,503 389,580
Total Revenues
EXPENDITURES
Current
Instruction
Instruction-related activities :
Supervision of instruction
School site administration
Pupil services:
r,er6,so;
1,916,503
140,435
3,665
3r4
3,626,386
Food services
General administration:
All other general administration
Plant services
2,218
t92,620
Facility acquisition and construction
Debt service
Principal
Interest and other
146,632 3,989,997
Total Expenditures
Excess (Defïciency) of Revenues
Over (Under) Expenditures
8,784
170,99r
585,659
8,850
134,653
846,492
594,509
989,929
17,167
(75,494>
(204,929)
fi,16;
(ts,+gi)
(204,s2;)
926,574
OTHER FINANCING SOURCES (USBS)
Transfers in
Transfers out
Net Financing Sources (Uses)
NET CHANGE IN FUND BALANCES
Fund Balance - Beginning
Fund Balance - Ending
$
47,188 787,481 2r2,l7l 2,500,390
7,242 fi 3,138,539
64,355 $ 711,987 $
See accompanying note to supplementary information.
68
County
School
Facilities
Fund
$
Debt Service
Fund for Blended
Component
Units
$
(277,238)
2,880
(274,358)
Total
Non-Major
Governmental
Funds
$
120,51,5
120,515
458,286
2,826,371
(79,970)
3,025,855
6,230,542
140,435
3,665
314
3,626,386
181,993
912,932
894,698
39,356
39,356
550,000
550,000
5r9,725
519,725
830 148
069 725
950,182
(313,71;)
"o'tlT
950,182
(288,425)
'\L:,'rllt
68
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTB TO SUPPLEMENTARY INFORMATION
JUNE 3o,2ot4
NOTE
1
. PURPOSE OF SCHEDULES
Schedule of Expenditures of Federal Awards
The accompanying Schedule of Expenditures of Federal Awards includes the Federal grant activity of the District
and is presented on the modified accrual basis of accounting. The information in this schedule is presented in
accordance with the requirements of the United States Office of Management and Budget Circular A-133, Audits
of States, Local Governments, and Non-Profit Organizatians. Therefore, some amounts presented in this
schedule may differ from amounts presented in, or used in the preparation of, the financial statements.
The following schedule provides reconciliation between revenues reported on the Statement of Revenues,
Expenditures, and Changes in Fund Balances and the related expenditures reported on the Schedule of
Expenditures of Federal Awards. The reconciling amounts consist primarily of Medi-Cal Billing Option funds
that have been recorded in the current period as revenues that have not been expended as ofJune 30,2014. These
unspent balances are reported as legally restricted ending balances within the General Fund.
CFDA
Number
Amount
Description
Total Federal Revenues From the Statement of Revenues,
Expenditures, and Changes in Fund Balances:
Medi-Cal Billing
Total Schedule of Expenditures of Federal Awards
Option
$
10,058,839
(98,924)
93-778
$
9,959,915
Local Education Agency Organization Structure
This schedule provides information about the District's boundaries and schools operated, members of the
governing board, and members of the administration.
Schedule of Average Daily Attendance (ADA)
Average daily attendance (ADA) is a measurement of the number of pupils attending classes of the District. The
purpose of attendance accounting from a fiscal standpoint is to provide the basis on which apportionments of
State funds are made to school districts. This schedule provides information regarding the attendance of students
at various grade levels and in different programs.
Schedule of Instructional Time
The District has received incentive funding for increasing instructional time as provided by the Incentives for
Longer Instructional Day. The District neither met nor exceeded its target funding. This schedule presents
information on the amount of instructional time offered by the District and whether the District complied with the
provisions of Education Code Sections 46200 through 46206.
Districts must maintain their instructional minutes at the 1986-87 requirements, as required by Education Code
Section 46201.
69
LUCIA MAR UNIFIED SCHOOL DISTRICT
NOTE TO SUPPLEMENTARY INFORMATION
JUNE 30,2014
Reconciliation of Annual Financial and Budget Report with Audited Financial Statements
This schedule provides the information necessary to reconcile the fund balance of all funds reported on the
Unaudited Actual Financial Report to the audited financial statements.
Schedule of Financial Trends and Analysis
This schedule discloses the District's financial trends by displaying past years' data along with cunent year budget
information. These financial trend disclosures are used to evaluate the District's ability to continue as a going
concern for a reasonable period of time.
Non-Major Governmental Funds - Balance Sheet and Statement of Revenues, Expenditures, and Changes
in Fund Balances
The Non-Major Governmental Funds Combining Balance Sheet and Combining Statement of Revenues,
Expenditures, and Changes in Fund Balances is included to provide information regarding the individual funds
that have been included in the Non-Major Governmental Funds column on the Governmental Funds Balance
Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance.
70
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7l
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Uavrinek, Trine, Day & Co., LLP
VALUE THE DIFFERENCE
Certified Public Accountants
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 AADITING STANDARDS
Governing Board
Lucia Mar Unified School District
Arroyo Grande, California
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, each major fund,
and the aggre9ate remaining fund information of Lucia Mar Unified School District (the District) as of and for the
year ended June 30, 2014, and the related notes to the financial statements, which collectively comprise Lucia
Mar Unified School District's basic financial statements, and have issued our report thereon dated
November 19,2014.
Emphasis of Matter - Change in Accounting Principles
As discussed in Note 15 to the financial statements, the District has elected to change its method of accounting for
cost of debt issuance as prescribed by GASB Statement No. 65, Items Previously Reported as Assets and
Liabilities. Our opinion is not modified with respect to this matter.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Lucia Mar Unified 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 Lucia Mar Unified School District's internal
control. Accordingly, we do not express an opinion on the effectiveness of Lucia Mar Unified 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 amaterial misstatement of the District's financial statements
will not be prevented, or detected and corrected on a timely basis. A significant defl.ciency is a deficien cy , oÍ 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.
72
6051 N. Fresno Streot, Suite
FRESNO
.
TAGUNA
HItts .
PALO
101
Fresno, CA
93710
Tel: 559.248.0871 Fax 559.248.0875 www.vtdcpa.com
ALTO . PTEASANTON '
RANCHO CUCAMONGA
' RIVERSIDE '
SACRAMENTO
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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Lucia Mar Unified School District's financial statements
are free from 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
Gove rnment
Auditing Standards.
We noted certain matters that we reported to management of Lucia Mar Unified School District in a separate letter
dated November 19, 2014.
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.
Vavrin:K, Tiine, Or5
t
Co¿ Ll,.P
Rancho Cucamonga, California
November 19,2014
73
Uavrinek, Trine, llay & Co., LLP
VALUE THE DIFFERENCE
Certif ied Public Accountants
INDEPENDENT AT]DITOR'S REPORT ON COMPLIANCE FOR
EACH MAJOR PROGRAM AND REPORT ON INTERNAL CONTROL
OVER COMPLIANCE REQUIRED BY OMB CIRCULAR 4.133
Governing Board
Lucia Mar Unified School District
Arroyo Grande, California
Report on Compliance for Each Major Federal Program
We have audited Lucia Mar Unified School District's compliance with the types of compliance requirements
described inthe OMB Circular A-133 Compliance Supplement that could have a direct and material effecton each
of Lucia Mar Unified School District's (the District) major Federal programs for the year ended June 30,2014.
Lucia Mar Unified School District's major Federal programs are identified in the summary of auditor's results
section ofthe accompanying schedule offindings and questioned costs.
Management's ResponsibÍlity
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 each of Lucia Mar Unified School District's major
Federal programs 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 Lucia Mar Unified 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 each major Federal
program. However, our audit does not provide alegal determination of Lucia Mar Unified School District's
compliance.
74
6051 N. Fresno Street, Suite
FRESNO
.
TAGUNA
101
Fresno, CA
93710
Tel: 559.248.0871 Fax 559.248.0875 www.vtdcpa.com
HIttS . PAtO ALTO . PTEASANTON .
RANCHO CUCAMONGA
. RIVERSIDE .
SACRAMENTO
Opinion on Each Major Federal Program
In our opinion, Lucia Mar Unified 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 each of its major Federal programs
for the year ended June 30, 2014.
Report on Internal Control Over Compliance
Management of Lucia Mar Unified 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 Lucia Mar Unified School District's internal control over
compliance with the types of requirements that could have a direct and material effect on each major Federal
program to determine the auditing procedures that are appropriate in the circumstances for the purpose of
expressing an opinion on compliance for each 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 Lucia Mar Unified 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 signfficant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance requirement of a
Federal program that is less severe than a material weakness in internal control over compliance, yet important
enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control over compliance that might be
material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over
compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not
been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133.
Accordingly, this report is not suitable for any other purpose.
Vavri¡¡K, Tiiñ€, OÈ5 t C'o'. LLP
Rancho Cucamonga, California
November 19,2014
75
Uavrinek, Trine, llay & Co., LLP
Certified Public Accountants
VALUE THE DIFFERENCE
INDEPENDENT AUDITOR'S REPORT ON STATE COMPLIANCE
Governing Board
Lucia Mar Unified School District
Arroyo Grande, California
Report on State Compliance
We have audited Lucia Mar Unified School District's compliance with the types of compliance requirements as
identified inthe Standards and Procedures for Audit of Caliþrnia K-12 Local Educational Agencies 2013-2014
that could have a direct and material effect on each of the Lucia Mar Unified School District's State government
programs as noted below for the year ended June 30,2014.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants
applicable to its State's programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance of each of the Lucia Mar Unified School District's State
'We
conducted our audit
programs based on our audit of the types of compliance requirements referred to above.
the
standards
of
America;
in accordance with auditing standards generally accepted in the United States
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of
the United States; and the Standards and Procedures for Audits of California K-12 lncal Educational Agencies
2013-2014. These standards require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the compliance requirements referred to above that could have a material effect on
the applicable government programs noted below. An audit includes examining, on a test basis, evidence about
Lucia Mar Unified 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
opinions. Our audit does not provide alegal determination of Lucia Mar Uniflred School District's compliance
with those requirements.
Unmodifïed Opinion on Each of the Programs
In our opinion, Lucia Mar Unified School District complied, in all material respects, with the compliance
requirements referred to above that are applicable to the government programs noted below that were audited for
the year ended June 30, 2014.
76
6051 N, Fresno Str6ot, Suite
FRESNO
.
LAGUNA HITTS
.
PATO
l0l
Fresno, CA
93710
Tel: 559.248.0871 Fax 559.248.0875 www.vtdcpa.com
ATTO . PLEASANTON . RANCHO CUCAMONGA . RIVERSIDE . SACRAMENTO
ln connection with the audit referred to above, we selected and tested transactions and records to determine the
Lucia Mar Unified School District's compliance with the State laws and regulations applicable to the following
items:
in
Guide
Procedures
Audit
Attendance Accounting:
Attendance Reporting
Teacher Certification and Misassignments
Kindergarten Continuance
Independent Study
6
J
J
23
Procedures
Performed
Yes
Yes
Yes
Continuation Education
Instructional Time:
School Districts
Instructional Materials :
10
No, See Below
Yes, See Below
l0
Yes
General Requirements
Ratios of Administrative Employees to Teachers
Classroom Teacher Salaries
Early Retirement Incentive
Gann Limit Calculation
School Accountability Report Card
Juvenile Court Schools
8
I
Yes
Yes
Yes
4
Not Applicable
I
J
Yes
Yes
8
Not Applicable
I
Local Control Funding Formula Certification
1
Yes
California Clean Energy Jobs Act
After School Education and Safety Program:
J
Not Applicable
General Requirements
After School
Before School
Education Protection Account Funds
Common Core Implementation Funds
4
5
Yes
Yes
6
Not Applicable
I
Yes
Yes
Yes
Unduplicated Local Control Funding Formula Pupil Counts
J
a
J
Charter Schools:
Contemporaneous Records of Attendance
8
Mode of Instruction
Non Classroom-Based Instruction/Independent Study
Determination of Funding for Non Classroom-Based Instruction
Annual Instruction Minutes Classroom-Based
I
15
J
4
I
Charter School Facility Grant Program
Not
Not
Not
Not
Not
Not
Applicable
Applicable
Applicable
Applicable
Applicable
Applicable
We did not perform testing for Independent Study because ADA was below the level required for testing.
Additionally, we did not perform steps related to Work Experience for continuation education because the
program is not offered through the continuation program.
Vovr;ncK,
Tiir*,
Oo.5
{
Cot LLP
Rancho Cucamonga, California
November 19,2014
77
Scnnoarn
or
Fnvntr'vcs AND
78
Qunsnoxøn Cosrs
This page left blank intentionally.
LUCIA MAR UNIFIED SCHOOL DISTRICT
SUMMARY OF AUDITORS' RESULTS
FOR THE YEAR ENDED JUNE 3O,2OI4
FINANCIAL STATEMENTS
Type of auditor's report issued:
Internal control over financial reporting:
Material weakness identified?
Significant deficiency identified?
Noncompliance material to financial statements noted?
Unmodified
No
FEDERAL AWARDS
Internal control over major Federal programs:
Material weakness identified?
No
None reported
Significant deficiency identified?
Type of auditor's report issued on compliance for major Federal programs:
Any audit findings disclosed that are required to be reported in accordance with
Section .510(a) of OMB Circular A-133?
Unmodified
No
Identification of major Federal programs:
CFDA Number(s)
Name of Federal Program or Cluster
84.027.84.027 A 84.t73
Special Education Cluster (IDEA)
93.778
Medicaid Cluster
Dollar threshold used to distinguish between Type A and Type B programs:
Auditee qualified as low-risk auditee?
STATE AWARDS
Type of auditor's report issued on compliance for programs:
79
300.000
Yes
Unmodified
LUCIA MAR UNTFIED SCHOOL DISTRICT
FINANCIAL STATEMENT FINDINGS
FOR THE YEAR ENDED JUNE 30,2014
None reported.
80
LUCIA MAR UNIFIED SCHOOL DISTRICT
FEDERAL AWARDS FTNDINGS AND QIIESTTOI\¡"ED COSTS
FOR THE YEAR ENDED JUNE 30,2014
None reported.
81
LUCIA MAR UNIFIED SCHOOL DISTRICT
sraTE awaRDs
FINDTNGS AND QITESTTOIìIED COSTS
FOR THE YEAR ENDED JUNE
3O,2OI4
None reported.
i
82
i:
LUCIA MAR UNIf,'IED SCHOOL DISTRICT
SUMMARY SCHEDULE OF PRIOR AI'DIT FINDINGS
FOR THE YEAR ENDED JUNE 30,2014
There were no audit findings reported in the prior year's schedule of financial statement findings.
83
This pøge left blnnk intentionally.
vEl
Uavrinek, Trine, llay & Co., LLP
VALUE THE DIFFERENCE
Certified Public Accountants
Governing Board
Lucia Mar Unified School District
Arroyo Grande, California
In planning and performing our audit of the basic financial statements of Lucia Mar Unified School District
(the District) for the year ending June 30, 2014, we considered its internal control structure in order to determine
our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to
provide assurance on the internal control structure.
However, during our audit we noted matters that are an opportunity for strengthening internal controls and
operating efficiency. The following items represent conditions noted by our audit that we consider important
enough to bring to your attention. This letter does not affect our report dated November 19,2014, on the financial
statements of Lucia Mar Unified School District.
2OI3.2OI4 OBSERVATIONS AND RECOMMENDATIONS
DISTRICT OFFICE
Cøl-Card Internal Controls
Observation
The District currently does not have a policy in place regarding the purchase of food and beverages using District
funds. It was noted that a significant amount of transactions related to food and beverages for the 10 month
duration reviewed for testing. It was noted that food and beverages are purchased for entertainment, staff
meetings, departmental events, and travel and conferences. The District has a current per diem rate while on
travel; however Cal-Card holders are allowed to charge food transactions to the card. Most Districts do not allow
food and beverages to be purchased using Cal-Cards due to having a travel per diem policy.
Recommendation
The District should develop a specific policy related to purchasing food and beverages with District funds,
including via Cal-Cards. This policy should either disallow purchase of food and beverages with Cal-Cards or
limit food and beverage purchases via Cal-Card to only management level positions and a few select others who
schedule meetings that appropriately serve or coordinate food and beverages. The District should reinforce or
implement procedures to limit the abuse of the per diem rate while Cal-Card holders are on travel.
84
6051 N. Fresno Street, Suite
FRESNO
I.AGUNA
HItts .
PALO
101
Fresno, CA
93710
Tel: 559.248.0871 Fax 559,248.0875 www.vtdcpa.com
ATTO . PTEASANTON . RANCHO CUCAMONGA '
RIVERSIDE ' SACRAMENTO
Governing Board
Lucia Mar Unified School District
Observation
During the audit we noted that the District currently has 54 Cal-Cards issued and actively used during the FY
2013-2014. During the audit, we assessed a sample of transactions from a 10 month period (July 2013 - March
2014) with a total transaction population of 3,253 which amounts to $565,519. Most cards were active and
heavily used and others had little if no activity at all. The Cal-Card program has the ability to limit each card to a
specified dollar amount or a number of transactions per day, per week, per month, or even by transaction type (i.e.
food and beverages). The District is not taking advantage ofthese control features, despite the fact that the
frequency and amount ofpurchases vary significantly from cardholder to cardholder.
Recommendation
We recommend that the District consider reducing the total amounts of outstanding cards and limiting them to
only management level positions. Also consider establishing new dollar limits per transaction and per month for
each card. Considerations for proposing appropriate dollar limits on each card include historical transaction
frequency and amounts, job responsibilities and level of employee. The District should eliminate cards which are
not being used.
ASSOCIATED STUDENT BODY ACCOUNTS (ASB)
Arroyo Grande High School - Cøsh Collections
Observation
Through Cash Receipt testing we noticed that batch closeout numbers were being skipped. Auditor inquired from
ASB Bookkeeper who could not determine the reason why 20 of the closeout batch numbers skipped for receipts
tested from December 2013 through February 2014. Batch numbers tested were 2950 ttvough 3002. Missing
numbers were 2954-2959 , 2965 , 297 3, 2979 , 2983-2987 , 2996, and 2998. Some of the closeout numbers were
noted to have been issued out of date sequence. Auditor requested a print out of "Bank Deposit History Report"
from July 1,2013 through the day of the audit. Numbers skipped were not located anywhere on the report.
Recommendation
The District should determine the reason why closeout numbers were being skipped and issued out of sequence.
Additionally, the individual reviewing the financial statements and bank reconciliations should be aware the date
and number sequence related to cash collections since batch numbers could potentially be deleted and funds
misappropriated.
85
Governing Board
Lucia Mar Unified School District
Arroyo Grande Hígh School - Bank Reconciliations
Observation
Through Bank Statement Reconciliation testing, we noted that two of the three months tested were reconciled
untimely. The December bank statement was reconciled on March 4,2014 and the January bank statement was
reconciled on March 70,2014. Additionally, the June 2014bankreconciliation was noted to be reconciled on
August 25,2014.
Recommendation
It is recommended that the bank reconciliation be performed and reviewed on a monthly basis as well as included
in the Associated Student Body council minutes. Monthly bank reconciliation's must be done in order to ensure
that the cash balances reported on the books are accurate and that the financial institution has not made a mistake.
Reconciling the cash accounts, the balances ofthe student body accounts should be totaled and compared to this
reconciled cash amount to ensure that the two amounts are equal.
Arroyo Grønde High School - Inaccurøte Finøncial Statement Balances
Observation
In reviewing scholarship accounts, we noted that financial statement balances did not agree to bank statement
balances. The purpose of performing the monthly reconciliations and review of financial statements is to ensure
that no errors have occurred in the banks' posting of transactions and that the agency trust balances and monthly
activity is accurately reported.
Recommendation
The site should ensure that the financial statement balances match the bank reconciliation balances. If
unreconciled differences are found, they must be investigated to determine in what account (asset, liability,
agency or trust account balance) the error has occurred. The account must be adjusted appropriately. Those in
charge of reviewing bank reconciliations and financial statements should investigate difference between financial
statements and bank reconciliations.
Arroyo Grande High School
-
Booster Clubs Commingling of Funds
Observation
There are booster club activities being run through the Associated Student Body account which is prohibited since
the organization is not made up of students as outlined in the California Educational Code. Funds collected
through Parking Ticket Fees were beings utilized to purchase food for the staff at the athletic boosters.
Associated Student Bodies are an integral part of the District and exist under the federal tax identification number
of the District, the booster or parents clubs do not. Per the Internal Revenue Code regulations, they are separate
entities much like a business and must apply for their own non-profit status and obtain their own tax identification
number. In addition, the non-profit status must be obtained before the group can accept tax deductible donations.
86
Governing Board
Lucia Mar Unified School District
Recommendation
The activity of the Booster Club must not be commingled with the Associated Student Body accounts; they
should open their own checking account. Donations from the Booster Club are allowed as long as no monies are
ever paid from the Student Body to the Booster Club. The Booster Club must apply for its own tax identification
number and non-profit status as required by the Internal Revenue Code.
Arroyo Grande High School and Nipomo High School
-
Defícit Account Balances
Observation
In reviewing the financial statements for the student body accounts we noted that Arroyo Grande High School and
Nipomo High School had several negative balances. Since the student body accounts represent individual
portions of the cash and asset pool, by some having negative balances, they have in actuality spent the available
funds of other accounts. A key control in any internal control system is the control of expenditures by ensuring
the expenditure is allowable and that the account requesting the expenditure has the funds to cover it. This
control feature has not been sufficiently followed.
Recommendation
The site bookkeeper has a fiduciary responsibility to all student body organizations to act in each group's best
interest. By allowing certain clubs to spend in excess of their available reserves, the bookkeeper is not meeting
this responsibility to the other clubs and organizations. Request for disbursements from student groups should be
reviewed for appropriateness and also to ensure that funds are available in the groups account.
We will review the status of the current year comments during our next audit engagement.
VavrincK,
linc,
On5
t
Lo't Ll,.P
Rancho Cucamonga, California
November 19,2014
87