DAVIESS COUNTY SCHOOL DISTRICT - Kentucky

DAVIESS COUNTY SCHOOL DISTRICT

BASIC FINANCIAL STATEMENTS AND

SUPPLEMENTARY INFORMATION

Year Ended June 30, 2019

(With Independent Auditor's Report Thereon)

Independent Auditor's Report

Management's Discussion and Analysis

Basic Financial Statements:

CONTENTS

Govenunent-Wide Financial Statements:

Statement of Net Position

Statement of Activities

Fund Financial Statements:

Governmental Funds Financial Statements:

Balance Sheet

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position

Statement of Revenues, Expenditures, and Changes in Fund Balances

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities

Proprietary Funds Financial Statements:

Statement of Net Position

Statement of Revenues, Expenses, and Changes in Fund Net Position

Statement of Cash Flows

Fiduciary Funds Financial Statements:

Statement of Fiduciary Net Position

Statement of Changes in Fiduciary Net Position

Notes to Financial Statements

1-2

3-11

12

13

14

15

16

17

18

19

20

21

22

23-62

C ONT ENT S, C ON C LU D ED

Required Supplementary Information:

Budgetary Comparison Schedules: General Fund Special Revenue Fund

Pension and Other Postemployment Benefits Schedules: Teachers' Retirement System of the State of Kentucky County Employees Retirement System

Supplementary Information:

Combining Financial Statements: Nonmajor Governmental Funds:

Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund

Balances School Activity Funds:

Combining Statement of School Activity Fund Receipts, Disbursements, and Due To

Statement of School Activity Fund Receipts, Disbursements, and Due To: Apollo High School Daviess County High School

Schedule of Expenditures of Federal Awards

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Perfonned in Accordance With Government Auditing Standards

Independent Auditor's Report on Compliance For Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance

Schedule of Findings and Questioned Costs

Summary Schedule of Prior Audit Findings

63 64

65-69 70-74

75

76

77

78-81 82-85

86-87

88-89

90-91

92

93

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INDEPENDENT AUDITOR'S REPORT

Members of the Board of Education Daviess County School District Owensboro, Kentucky

Kentucky State Committee for School District Audits Frankfort, Kentucky

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Daviess County School District (District) as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Kentucky Public School Districts' Audit Contract and Requirements prescribed by the Kentucky State Committee for School District Audits. 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 entity'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 entity'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 fmancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Daviess County School District, as of June 30, 2019, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America .

. . www.rineyhancock.com - info @ rineyhancock.com- ·

2900 Veach Road, Suite 2 - Owensboro, Kentucky 42303 - 270-926-4540- Fax: 270-926-1494

P.O. Box 255 - Henderson, Kentucky 42419-0255 - 270-827-5828 - Fax: 270-830-7500

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Daviess County School District Page 2

Other Matters

Required Supplementmy Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3-11, the budgetary comparison schedules on pages 63-64, and the pension and other postemployment benefit schedules on 65-74, 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 District's basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate 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 combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Govemment Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 4, 2019, on our consideration of the 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 the effectiveness of the District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control over financial reporting and compliance.

Owensboro, Kentucky October 4, 2019

Daviess County School District Management's Discussion and Analysis For the Fiscal Year Ended June 30, 2019

The discussion and analysis of Daviess County School District's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2019. The intent of this discussion and analysis is to review the School District's financial performance as a whole. Readers should also review the basic financial statements and the notes to the financial statements to enhance their understanding of the School District's financial perfonnance.

Financial Highlights

• In total, net position increased $985,843. Net position of governmental activities increased by $1,614,405, while net position of business-type activities decreased by $628,562.

• General revenues accounted for $115,010,529 in revenue or 88.8% of all governmental revenues. Program specific revenues in the fonn of charges for services, grants, and contributions accounted for $14,476,389 or 11.2% of total governmental revenues of $129,486,918.

• Total assets of governmental activities increased by $15,113,554. For governmental activities, capital assets increased by $11,329,179, while cash and investments increased by $3,934,340.

• The School District had $127,872,513 in expenses related to governmental activities; only $14,476,389 of these expenses were offset by program specific charges for services, grants, and contributions. General revenues (primarily local taxes and state SEEK allocations) were adequate to provide for these programs.

• Construction continued during fiscal year 2019. Projects completed included HVAC updates and a flooring project. Projects that were in progress at year end include the two high school stadiums and HV AC updates at two schools. Design work continued for the new middle school and the renovations at Apollo High school.

Using the Basic Financial Statements

This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand Daviess County School District as a financial whole. The statements then proceed to provide an increasingly detailed look at specific financial activities.

The Statement of Net Position and the Statement of Activities provide information about the activities of the whole School District, presenting both an aggregate view of the School District's finances and a longer-term view of those finances . Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term, as well as what remains for future spending. The fund financial statements also look at the School District's major funds with all other non-major funds presented in total in one column. The major funds for the Daviess County School District are the General Fund, Special Revenue Fund, and Construction Fund.

3


Reporting the School District as a Whole

One of the most important questions asked about the School District is "how did we do financially during 2019?" The Statement of Net Position and the Statement of Activities, which appear first in the School District's financial statements, report infonnation on the School District as a whole and its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received and paid.

These two statements report the School District's net position and changes in that position. This change in net position is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. However, the School District's goal is to provide services to our students, not to generate profits as commercial entities do. One must consider many other non-financial factors, such as the School District's property tax base, current prope1iy tax laws in Kentucky restricting revenue growth, required educational programs and other factors.

In the Statement of Net Position and the Statement of Activities, the School District is divided into two distinct kinds of activities:

Governmental Activities - most of the School District's programs and services are reported here, including instruction, support services, operation and maintenance of plant, pupil transportation, and other activities.

Business-Type Activities - these services are provided on a charge for goods or services basis to recover all of the expenses of the goods or services provided. The School District's food service and after school programs are reported as business activities.

Reporting the School District's Most Significant Funds

Fund Financial Statements

The analysis of the School District's major funds begins on page 14. Fund financial reports provide detailed information about the School District's major funds. The School District uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the School District's major funds.

Governmental Funds - most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end available for spending in future periods . These funds are reported using an accounting method called modified accrual basis of 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 School District's general government 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

4


Reporting the School District's Most Significant Funds, Continued

Governmental Funds, Continued

educational programs. The relationship (or difference) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is reconciled in the financial statements.

Proprietary Funds - proprietary funds use the same basis of accounting as business-type activities; therefore, the statements for the proprietary fund will essentially match.

Notes to the Financial Statements. The notes provide additional infonnation that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 23-62 of this report.

Government-Wide Financial Analysis

Net position may serve over time as a useful indicator of a government's financial position. In the case of the District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $2,866,479 for governmental activities, and liabilities and deferred inflows ofresources exceeded assets and deferred outflows ofresources by $3,104,834 for business-type activities as of June 30, 2019.

The largest portion of the District's net position reflects its investment in capital assets ( e.g., land and improvements, buildings and improvements, vehicles, furniture and equipment, and construction in progress) less any related debt used to acquire those assets that is still outstanding. The District uses these capital assets to provide services to its students; consequently, these assets are not available for future spending. Although the District's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The District's financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets. Included for June 30, 2019 is the district's liability for the net pension obligation and the liability for other postemployment benefits.

5



Government-Wide Financial Analysis, Continued

(Table 1) Net Position

Governmental Activities Business-Ty1:1e Activities

2019 2018 2019 2018

Assets Current and other

assets $ 36,884,106 $ 33,099,731 $2,838,961 $2,697,322 Capital assets 116,243,767 104,914,588 620,097 746,003

Total assets 153,127,873 138,014,319 3,459,058 3,443,325

Deferred Outflows of Resources

Deferred charges on refunding 1,509,104 1,734,577

Pension deferred outflows 7,049,391 8,281,338 1,244,010 1,461,412

OPEB deferred outflows 4,701,953 4,474,880 497,591 532,678

Total deferred outflows of resources 13,260,448 14,490,795 1,741,601 1,994,090

Liabilities Long-term liabilities 149,778,947 141,304,395 7,686,984 7,518,849 Other liabilities 8,671,778 7,988,592 113 781 116,887

Total liabilities 158,450,725 149,292,987 7,800,765 7,635,736

Deferred Inflows of Resources

Pension deferred inflows 993,874 1,004,757 175,390 177,310

OPEB deferred inflows 4,077,243 955,296 329,338 100,641

Total deferred inflows of resources 5,071 ,117 1,960,053 504,728 277,951

Net Position Net Investment in 43,238,856 40,959,562 620,097 746,003

capital assets Restricted 12,167,356 5,255,244 Un restricted (52,539,733) (44,962,732) (3,724,931) (3,222,275)

Total net position $ 2,866 479 $ 1 252 074 $ (3 104 834) $ (2 476.272)

2019

$ 39,723,067 116,863,864

156,586,931

1,509,104

8,293,401

5,199,544

15,002,049

157,465,931 8,785,559

166,251,490

1,169,264

4,406,581

5,575,845

43,858,953

12,167,356 (56,264,664}

$ (238 355)

Total assets increased $15,129,287 primarily due to construction . Total net position increased by $985,843.

6

Total

2018

$ 35,797,053 105,660,591

141,457,644

1,734,577

9,742,750

5,007,558

16,484,885

148,823,244 8,105,479

156,928,723

1,182,067

1,055,937

2,238,004

41,705,565

5,255,244 (48,185,007}

$ 0 224,198)



Government-Wide Financial Analysis, Continued (Table 2)

Net Position

Governmental Activities Business-Tyi;1e Activities 2019 2018 2019 2018

Program revenues: Charges for services $ 563,410 $ 581,318 $ 3,311,707 $ 3,322,664 Operating grants

and contributions 9,398,377 10,728,595 5,442,437 5,140,396 Capital grants

and contributions 4,514,602 3,881,419 General revenues:

Taxes 45,354,668 43,694,142 State aid formula

grants 39,320,866 38,775,242 Investment

earnings 1,120,908 295,382 51,954 27,665 Gain on sale of

capital assets 27,753 8,239 (1,190) (493) Miscellaneous 361,674 323,138 State on behalf

payments 28,720,023 28,739,027 Transfers: 104 637 70,826 (104,637) (70,826) Total revenues and

transfers 129,486,918 127,097,328 8,700,271 8,419,406

Program expenses: Instruction 75,594,039 80,357,611 Support services:

Student 4,837,499 4,630,461 Instructional staff 4,221,095 4,147,126 District

administration 1,187,006 1,017,973 School

administration 8,576,530 8,663,538 Business 2,621,289 2,589,789 Facility

operations/ maintenance 1,264,533 9,458,057

Student transportation 9,767,169 9,944,282

Non-instructional 885,725 860,221 Facility acquisition/

construction 16,739,207 2,220,413 After school program 1,318,454 1,231,371 Interest on long-

term debt 2,178,421 2,130,275 Food service 8,010,379 7,803,376 Total expenses and

transfers 127,872,513 126,019,746 9,328,833 9,034,747 Increase/decrease

In net position $ :l 6:14 405 $ :l OZZ 582 $ (628 562) $ (6:l 5,34:l)

7

Total 2019 2018

$ 3,875,117 $ 3,903,982

14,840,814 15,868,991

4,514,602 3,881,419

45,354,668 43,694,142

39,320,866 38,775,242

1,172,862 323,047

26,563 7,746 361,674 323,138

28,720,023 28,739,027

138,187,189 135,516,734

75,594,039 80,357,611

4,837,499 4,630,461 4,221,095 4,147,126

1,187,006 1,017,973

8,576,530 8,663,538 2,621,289 2,589,789

1,264,533 9,458,057

9,767,169 9,944,282 885,725 860,221

16,739,207 2,220,413 1,318,454 1,231,371

2,178,421 2,130,275 8,010,379 7,803,376

137,201,346 135,054,493

$ 985,843 $ 462 24:l



Governmental Activities

Instruction comprises 59.1 % of governmental program expenses. Support services expenses make up 25.4% of governmental expenses. Non-instructional expenses for community services total .7% of governmental expenses. Facilities acquisition/construction and interest accounts for the remaining 14.8% of the total governmental expense.

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for government activities, the total cost of services and the net cost of services. That is, it identifies the cost of these services supported by tax revenue and unrestricted state entitlements. The total cost of services includes state on-behalf payments in the amount of$28,720,023 for 2019.

Instruction

Support services

Non-instructional

Facilities acquisition/construction

Interest on long-term debt

Total expenses

Business-Type Activities

$

(Table 3) Governmental Activities

Total Cost of Services

75,594,039 $ 80,357,611 32,475,121 40,451,226

885,725 860,221 16,739,207 2,220,413 2,178,421 2,130,275

Net Cost of Services

2019 2018

$68,543, 179 $71,841,680

30,477,007 37,984,282

(27,088) 7,148

12,224,605 (1 J 134,971)

2,178,421 2,130,275

$127,872,513 $126,019,746 $113,396,124 $110...828,414

The business-type activities are food service and after school programs. These programs had revenues of $8,806,098 and expenses of$9,328,833 for fiscal year 2019. Of the revenues, $3,311,707 was charges for services, $5,442,437 was from state and federal grants, and $51,954 was from investment earnings. Indirect cost transfers and other transfers totaled $104,637. Loss on disposition of assets totaled $1,190. Business activities receive no support from tax revenues. The School District will continue to monitor the charges and costs of these activities. If it becomes necessary, the School District will increase the charges for these activities.

The School District's Funds

Information about the School District's major funds begins on page 16. These funds are accounted for using the modified accrual basis of accounting. All governmental funds had total revenues and other financing sources of$143,656,582 and expenditures of $140,599,618. The General Fund's fund balance decreased by $3,855,148.

8



General Fund-Budget Highlights

The decrease in General Fund was due to transfers to the Construction Fund.

The School District's budget is prepared according to Kentucky law and is based on accounting for certain transactions on a basis of cash receipts, disbursements and encumbrances. The most significant budgeted fund is the General Fund. The Kentucky Department of Education requires a zero-based budget with any budgeted remaining fund balance shown as a contingency expense in the budget process.

A variance comparison is presented on page 63 between the final budgeted amounts and the actual (GAAP Basis) amounts. The General Fund revenues were budgeted at $103,340,451 with actual amounts of $106,646,599. Budgeted expenditures of$117,631,637 compare with actual expenditures of $106,364,011, a difference of $11,267,626. The source of the expense budget variances is related to amounts budgeted for contingencies. Budgeted other financing sources was $22,089, with actual financing uses of $4,137,736. The net decrease in the General Fund balance is $3,855,148.

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2019, the School District had $116,863,864 invested in land, buildings, equipment, and construction in progress, $116,243,767 in governmental activities, and $620,097 in business-type activities. Table 4 shows fiscal year 2019 balances compared to 2018.

Governmental Activities 2019 2018

Land $ 10,169,490 $ 4,244,370 Land improvements 921,011 1,004,294 Buildings and

improvements 88,919,424 91,020,129 Technology

equipment 1,357,744 2,374,803 Vehicles 4,148,603 4,026,091

(Table 4) Capital Assets at June 30

(Net of Depreciation)


$

2019 2018

4,634

34,468 28,815

9

$

5,407

57,749 6,720

Total 2019 2018

$ 10,169,490 $ 4,244,370 925,645 1,009,701

88,919,424 91 ,020,129

1,392,212 2,432,552 4,177,418 4,032,811

Daviess County School District Management's Discussion and Analysis For the Fiscal Year Ended June 3 0, 2019

Capital Assets and Debt Administration, Continued

Capital Assets, Continued

General equipment Construction in

progress

Governmental Activities 2019 2018

705,131

10,022,364

861,737

1,383,164

(Table 4) Capital Assets at June 30

(Net of Depreciation), Continued

Business-Type Activities 2019 2018

552,180 676,127 1,257,311

10,022,364

1,537,864

1,383,164

Total $116,243.767 $104.914.588 $ 620.097 $ 746.003 $116.863.864 $105.660.591

The increase in net capital assets is primarily due to ongoing construction.

Debt

At June 30, 2019, the School District had $74,479,000 in bonds outstanding, of which $1,573,783 are to be paid from the KSFCC funding provided by the state of Kentucky. A total of $5,743,000 is due within one year.

At June 30, 2018, the School District had $65,507,000 in bonds outstanding, of which $1,645,098 were to be paid from the KS FCC funding provided by the state of Kentucky.

District Challenges for the Future

Daviess County School District's overall financial status remains in a safe financial position. The District is financially stable, but at risk due to continued inadequate state funding. This is the result of three factors: the general decrease in the percentage of state funding for K-12 public education; the rising cost of employer retirement expense; and the related state pension fund financial challenge.

A challenge facing our School District is that of inadequate state funding. In recent years, the state has placed an assortment of mandates on Kentucky school districts, yet adequate funding for those mandates has not been provided. This practice, over time, will place a severe strain on the District's resources. The District maintains a contingency plan to deal with state funding shortfalls, but this will only be effective for the short-term. A long-term solution at the state level must be determined and enacted by the state legislature to ensure adequate funding for Kentucky's public school districts. To balance state funding shortfalls, increased pressure has been placed on local boards of education to increase taxes, placing a hardship on local school districts and local taxpayers.

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District Challenges for the Future, Continued

Kentucky's constitution clearly directs public education as the state's responsibility. Fiscally speaking, the state must address inadequate school funding on multiple fronts that include operational costs, transportation, and capital infrastructure needs. Should the state fail to proactively respond to this issue, the potential exists for a state-wide lawsuit as evidenced by the Kentucky Education Reform Act (KERA) that occurred in 1990. While KERA ushered in sweeping reform for school accountability, the lawsuit was based on the premise of inadequate state funding for Kentucky's public schools. The Kentucky Supreme Court sided with the school districts in that case, ordering the Legislature to remedy inadequate and inequitable school funding.

A second financial risk facing Daviess County Public Schools is the rising retirement/pension costs and also the financial instability in the state pension fund. The employer matching percentage has more than doubled over the last seven-year period for the support personnel. Additionally, Kentucky school boards now contribute 3.0% to stabilize the KTRS medical fund. This cost has been 100% the obligation oflocal taxpayers with no state assistance. Legislation was approved in the General Assembly that forbids the state from continuing to borrow from the KTRS pension fund to meet the state's pension obligation. No additional state funding has been appropriated to offset this rising cost and the District has been forced to increase local funding to provide the necessary revenue to offset the unavoidable, mandated cost increases. Further, instability in the state pension fund is a large financial concern for the state's budget and if left unresolved, could result in negative financial consequences to Kentucky's public school districts.

With careful planning and monitoring of our finances, the Daviess County School District's goals are to continue to provide a quality education for our students and to secure a positive financial future for the School District.

Contacting the School District's Financial Management

This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have any questions about this report or need additional information, contact Sara Harley, Director of Finance, at Daviess County Public Schools, 1622 Southeastern Parkway, P.O. Box 21510, Owensboro, KY 42304-1510, or email at [email protected].

I I


STATEMENT OF NET POSITION

ASSETS Cash and cash equivalents $ Investments Accounts receivable:

Taxes Other Due from other governments

Inventory Prepaids and other current assets Capital assets, net

Total assets

DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding Pension deferred outflows Other postemployrnent benefits deferred outflows

Total deferred outflows of resources

LIABILITIES Accounts payable Accrued salaries and benefits Payroll withholdings Accrued interest payable Unearned revenue Long-term liabilities:

Due within one year Due in more than one year

Other liabilities due in more than one year: Net pension liability Net other postemployment benefits liabilities

Total liabilities

DEFERRED INFLOWS OF RESOURCES Pension deferred inflows Other postemployment benefits deferred inflows

Total deferred inflows of resources

NET POSITION Net investment in capital assets Restricted for:

Capital projects Other Technology

Unrestricted

Total net position $

June 30, 2019

Governmental Activities

29,169,832 $ 5,633,270

1,411,653 138,027 161,003 282,053

88,268 116,243,767

153,127,873

1,509,104 7,049,391 4,701,953

13,260,448

1,007,854 4,333,403

835,534 433,835

2,061,155

6,338,040 71,518,335

33,727,465 38,195,104

158,450,725

993,874 4,077,243

5,071 ,117

43 ,238,856

2,332,626 9,682,802

151 ,928 (52 ,539,733)

2,866,479 $

See Notes to Financial Statements 12


2,171,355

11,323 461,570 194,713

620,097

3,459,058

1,244,010 497,591

1,741,601

3,035

110,746

5,951,906 1,735,078

7,800,765

175,390 329,338

504,728

620,097

(3,724,931)

(3 ,104,834)

Total

$ 31,341,187 5,633,270

1,411,653 149,350 622,573 476,766

88,268 116,863,864

156,586,931

1,509,104 8,293,401 5,199,544

15,002,049

1,010,889 4,333,403

835,534 433,835

2,171,901

6,338,040 71,518,335

39,679,371 39,930,182

166,251,490

1,169,264 4,406,581

5,575,845

43 ,858,953

2,332,626 9,682,802

151 ,928 (56,264,664)

$ (238 ,355)

Functions I Prob>rams Governmental activities:

Instruction Support services:

Student Instructional staff District administration School administration Business Plant operation and maintenance Student transportation

Community services New building construction Building renovations/ additions Interest on long-term liabilities

Total governmental activities

Business-type activities: Food service After school prob>ram

Total business-type activities

Total district

DAVIESS COUNTY SCUOOL DISTRICT

STATEMENT OF ACTIVITIES

Year Ended June 30, 20 19

Prob,ram Revenues

Operating Charges for Grants and

Expenses Services Contributions

$ 75 ,594,039 $ 322,908 $ 6,727,952 $

4,837,499 771,707 4,221,095 493.713 I, 187,006 8,576,530 16,716 2,621,289 1,264,533 22,489 9,767, 169 218,013 475,476

885,725 912 ,813 6,288,210

10,450,997 2,178,421

127,872,513 563.410 9,398,377

8,010,379 2,058,293 5,391,090 1,318,454 1,253,414 51.347

9,328,833 3,311.707 5,442,437

$ 137,201,346 $ 3,875,117 $ 14,840,814 $

General revenues: Property taxes Utility taxes State aid formula b'Tants On-behalf payments Investment earnings Gain (loss) on disposition of capital assets Miscellaneous

Transfers

Totnl general revenues and 1r:insfcrs

Change in net position

Net position, June 30, 2018


S'-,: N111ei: 111 Fm:u11.:1al Slah.,m.,11s ll

Capital Grants and

Contributions

4,514,602

4,514,602

4,514,602

Net (Expense) Revenue and Change in Net Position

Governmental Business-Type Activities Activities Total

s (68,543,179) $ (68.543 , I 79)

(4,065,792) (4,065 ,792) (3,727,382) (3,727,382) (1.187,006) (1,187,006) (8.559.814) (8,559,814) (2,621 ,289) (2,621 ,289) (1.242.044) (1,242,044) (9,073,680). (9,073,680)

27.088 27,088 (6,288.210) (6,288,210) (5.936,395) (5,936,395) (2,178 ,421) (2,178,421)

(113 ,396,124) (113 ,396,124)

$ (560,996) (560,996) (13,693) (13.693)

(574,689) (574,689)

(113 ,396,124) (574,689) (113,970,813)

39,824.779 39,824,779 5,529,889 5,529,889

39.320,866 39,320,866 28 ,720.023 28,720,023

1.120.908 51 .954 1,172,862 27.753 (1 ,190) 26,563

361,674 361,674 104,637 (104,637)

115.010,529 (53,873) 114,956,656

1,614,405 (628,562) 985,843

1,252,074 (2,476,272) (1,224,198)

$ 2,866,479 $ (3 ,104,834) $ (238,355)


ASSETS Cash and cash equivalents s Investments Accounts receivable:

Taxes Other Due from other governments

Inventory Prepaid expenses

Total assets s

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

Liabilities: Accounts payable s Due to other funds Accmed salaries and benefits Payroll withholdings Unearned revenue

Total liabilities

Deferred inflows of resources: Unavailable revenue - delinquent property taxes

Fund balances: Nonspendable Restricted Committed Assigned Unassigned

Total fund balances

Total liabilities, deferred inflows of resources, and fund balances s

BALANCE SHEET

GOVERNMENTAL FUNDS

June 30, 2019

Special General Revenue

Fund Fund

14,222,502 s 2,112,651 5,633,270

1,411,653 138,027 80,713 80,290

282,053 58,492

21,826,710 s 2,192,941

187,104 s 1,499

4,333,403 835,534

21,641 2,039,514

5,377,682 2,041,013

276,621

340,545 152,940

177,064

1,240,824 14,413,974 (1,012)

16,172,407 151,928

21,826,710 s 2,192,941

Set N'o1cs 10 Financial Smcmcnls 14

Constmction Fund

s 12,199,229

s 12,199,229

s 819,251

819,251

11,379,978

11,379,978

s 12,199,229

Nonmajor Total Governmental Governmental

Funds Funds

s 635,450 s 29,169,832 5,633,270

1,411,653 [38,027

161,003 282,053

58,492

s 635,450 s 36,854,330

s s 1,007,854

4,333,403 835,534

2,061,155

8,237,946

276,621

340,545 635,450 12,168,368

177,064 1,240,824

14,412,962

635,450 28,339,763

s 635,450 s 36,854,330


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION

June 30, 2019

Total fund balances - governmental funds

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds:

Certain assets are not available to pay for current period expenditures:

Accmed interest receivable $ Taxes receivable

Long-term liabilities are not due and payable in the current period and, therefore, are not reported as liabilities in governmental funds:

Bonds payable $ Issuance premiums Issuance discounts Deferred charges on refunding Capital lease obligations KSBIT assessment Compensated absences Net pension liability - CERS Net OPEB liability- CERS Net OPEB liability - KTRS Accmed interest payable

Certain amounts related to the net pension and OPEB liabilities are not reported in the governmental funds, but are deferred in the statement of net position:

Pension and OPEB deferred outflows Pension and OPEB deferred inflows

Net position of governmental activities


$

$ 28,339,763

116,243,767

29,776 276,621 306,397

(74,479,000) (353,627) 420,637

1,509,104 (102,025)

(36,696) (3,305,664)

(33,727,465) (9,832,104)

(28,363,000) (433,835) (148,703,675)

11 ,751 ,344 (5,071 ,117) 6,680,227

$ 2,866,479


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

Revenues: Property taxes s Utility taxes Tuition and fees Earnings on investments Other local revenue State aid Federal aid

Total revenues

Expenditures: Instruction Support services:


Community services New building construction Building renovations/ additions Debt service:

Principal Interest Bond issuance costs

Total expenditures

Excess ( deficiency) of revenues over expenditures

Other financing sources (uses): Proceeds from the issuance of bonds Discount on bonds issued Premium on bonds issued Proceeds from sale of capital assets

Operating transfers in Operating transfers out

Total other financing sources (uses)

Net change in fund balances

Fund balance, June 30, 2018

Fund balance, June 30, 2019 $

GOVERNMENT AL FUNDS


Special General Revenue

Fund Fund

31,054,855 s 5,529,889

61,625 1,036,907

529,331 281,349 68,060,088 4,361,100

373,904 4,843,177

I 06,646,599 9,485,626

68,928,702 8,223,212

4,235,801 39.7,803 3,851,968 139,177 1,020,136 8,204,167 16,716 2,452,045 9,337,921 8,333,271 475,479

912,812

I 06,364,011 10,165,199

282,588 (679,573)

31,050 1,826,327 713,115

(5,995,113)

(4,137,736) 713,115

(3,855,148) 33,542

20,027,555 118,386

16,172,407 $ 151,928

See Notes to Financial Stiltemcms 16

Nonmajor Construction Governmental

Fund Funds

s s 8,709,521

77,649 5,000 239,261

4,129,117

77,649 13,082,899

90,201

90,782

6,284,710 3,500 10,450,997

5,138,000 1,887,878

124,340

16,860,047 7,210,361

(16,782,398) 5,872,538

14,110,000 (8,867)

126,989

11,826,402 6,898,797 (15,164,891)

26,054,524 (8,266,094)

9,272,126 (2,393,556)

2,107,852 3,029,006

$ 11,379,978 $ 635,450

Total Governmental

Funds

s 39,764,376 5,529,889

61,625 1,119,556 1,049,941

76,550,305 5,217,081

129,292,773

77,242,115

4,633,604 4,081,927 1,020,136 8,220,883 2,452,045 9,337,921 8,808,750

912,812 6,288,210

10,450,997

5,138,000 1,887,878

124,340

140,599,618

(11,306,845)

14,110,000 (8,867)

126,989 31,050

21,264,641 (21,160,004)

14,363,809

3,056,964

25,282,799

$ 28,339,763


RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES


Net change in fund balances - total governmental funds

Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense:

Capital outlays Depreciation expense

Governmental funds report the disposal of capital assets to the extent proceeds are received. However, the statement of activities reports the gain or loss.

Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds:

Increase in taxes receivable Increase in accrued interest receivable

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of certain items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities:

Principal payments on bonds Principal payments on lease obligations Proceeds from issuance of bonds Discount on bonds issued Premium on bonds issued Amortization of discounts on debt Amortization of premiums on debt Amortization of deferred refunding charges

Certain expenses reported in the statement of activities do not require

the use of current financial resources and, therefore, are not reported as expenditures in governmental funds :

Increase in accrued sick leave liability Increase in pension expense - CERS Increase in OPEB expense • CERS Decrease in OPEB expense • KTRS Decrease in KSBIT assessment Increase in accrued interest payable

Change in net position of governmental activities


$

$

$

$

$ 3,056,964

17,715,356 (6,382,880) I 1,332,476

(3,297)

60,403 1,352 61,755

5,138,000 295,633

(14,110,000) 8,867

(126,989) (56,698) 26,775

(225,473) (9,049,885)

(258,722) (3,234,154)

(434,449) 142,901

18,349 (17,533) (3,783 ,608)

$ 1,614,405


ST A TEMENT OF NET POSITION

PROPRIETARY FUNDS

June30,2019

Food Service Fund

ASSETS Current assets:

Cash s 1,078,481 Accounts receivable:

Operating Due from other governments 461,570

Inventory 194,713

Total current assets 1,734,764

Noncurrent assets: Capital assets 1,615,419

Less accumulated depreciation (1,060,377)

Total noncurrent assets 555,042

Total assets 2,289,806

DEFERRED OUTFLOWS OF RESOURCES Pension deferred outflows 1,078,142 Other postemployment benefits deferred outflows 431,245

Total deferred outflows of resources 1,509,387

LIABILITIES Current liabilities:

Accounts payable 2,570

Unearned revenue 98,782

Total current liabilities 101,352

Non-current liabilties:

Net pension liability 5,158,318

Net other postemployment benefits liability 1,503,735

Total liabilities 6,763,405

DEFERRED INFLOWS OF RESOURCES Pension deferred inflows 152,004 Other postemployment benefits deferred inflows 285,426

Total deferred inflows on resources 437,430

NET POSITION Net investment in capital assets 555,042

Unrestricted (3,956,684)

Total net position $ (3,401,642)

See Notes to Financial S1atcmcnts IS

Enterprise Funds After

School Fund

s 1,092,874

11,323

1,104,197

202,862 (137,807)

65,055

1,169,252

165,868 66,346

232,214

465 11,964

12,429

793,588 231,343

1,037,360

23,386 43,912

67,298

65,055 231 ,753

$ 296,808

Total

s 2,171,355

11,323 461,570 194,713

2,838,961

1,818,281 (I, 198,184)

620,097

3,459,058

1,244,010 497,591

1,741,601

3,035 110,746

113,781

5,951,906

1,735,078

7,800,765

175,390 329,338

504,728

620,097 (3 ,724,931)

$ (3, 104,834)


STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS


Enterprise Funds Food After

Service School Fund Fund Total

Operating revenues: Charges for services $ 2,040,493 $ 1,253,374 $ 3,293,867 Other operating revenues 17,800 40 17,840

Total operating revenues 2,058,293 1,253,414 3,311,707

Operating expenses: Salaries and wages 2,194,869 823,607 3,018,476 Employee benefits 1,213,377 225,869 1,439,246 Professional and technical services 32,455 15,096 47,551 Property services 66,150 5,180 71,330 Other purchased services 170,149 1,247 171,396 Supplies and materials 4,094,007 181,767 4,275,774 Property 75,484 41,727 117,211 Miscellaneous 19,050 19,050 Depreciation 144,838 23,961 168,799

Total operating expenses 8,010,379 1,318,454 9,328,833

Operating income (loss) (5,952,086) (65,040) (6,017,126)

Nonoperating revenues (expenses): Federal government grants 4,842,965 46,536 4,889,501 State government grants 59,886 4,811 64,697 Donated commodities 488,239 488,239 Gain (loss) on sale of capital assets (1,190) (1,190) Interest income 28,303 23,651 51,954

Total nonoperating revenues (expenses) 5,418,203 74,998 5,493,201

Income before transfers (533,883) 9,958 (523,925)

Transfers out (104,637) (104,637)

Change in net position (638,520) 9,958 (628,562)

Net position, June 30, 2018 (2,763,122) 286,850 (2,476,272)

Net position, June 30, 2019 $ (3,401,642) $ 296,808 $ (3,104,834)



STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS


Food Service Fund

Cash flows from operating activities: Cash received from:

Charges for se1vices s 2,039,397 Other operating revenues 17,800

Cash paid to/ for: Employees (2,847,165) Supplies (3,566,161) Other services (361,934)

Net cash provided by (used in) operating activities (4,718,063)

Cash flows from noncapital financing activities: Federal government grants 4,533,890 State government grants 59,886 Transfers out (104,637)

Net cash provided by noncapital financing activities 4,489,139

Cash flows from capital and related financing activities:

Acquisition of capital assets (39,082)

Net cash used in capital and related financing activities (39,082)

Cash flows from investing activities: Interest income 28,303

Net cash provided by investing activities 28,303

Net increase (decrease) in cash and cash equivalents (239,703)

Cash and cash equivalents: Beginning of year 1,318,184

End of year $ 1,078,481

Reconciliation of operating loss to net cash used in operating activities:

Operating income (loss) s (5,952,086) Adjustments to reconcile operating income (loss) to net

cash provided by ( used in) operating activities: Depreciation expense 144,838 Conunodities used 488,239 Changes in assets and liabilities:

Accounts receivable • operating Inventory 42,986 Accounts payable (2 ,025) Net other postemployment benefit liability and deferrals 66,446 Net pension liability and deferrals 494,635 Deferred revenue (1,096)

Net cash provided by (used in) operating activities $ (4,718,063)

Noncash noncapital financing activities: Food commodities from the U.S. Department of Agriculture $ 488,239

Sec Notes to Financial Sta.ttmtnts 20

Ente!Erise Funds After

School Fund Total

s 1,247,622 s 3,287,019 40 17,840

(963,156) (3,810,321) (181,767) (3,747,928)

(62,785) (424,719)

39,954 (4,678,109)

4,811 4,538,701 46,536 106,422

(104,637)

51,347 4,540,486

(5,001) (44,083)

(5,001) (44,083)

23,651 51,954

23,651 51,954

109,951 (129,752)

982,923 2,301,107

s 1,092,874 s 2,171,355

s (65,040) s (6,017,126)

23,961 168,799 488,239

(5,302) (5,302) 42,986

465 (1,560) 10,222 76,668 76,098 570,733

(450) (1,546)

s 39,954 s (4,678,109)

ASSETS Cash


STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

June 30, 2019

Private Purpose

Trust Fund

$ Accounts receivable Inventory

Total assets

LIABILITIES Accounts payable Due to student groups

Total liabilities

NET POSITION


$

Agency Fund

Activity Funds

$ 1,953,008 952

17,935

1,971,895

4,847 1,967,048

1,971,895

$


STATEMENT OF CHANGES IN FIDUCIARY NET POSITION


Additions: Contributions

Deductions: Student support services

Change in net position




$

$

Private Purpose

Trust Fund

1,500

1,500

1. Reporting Entity


NOTES TO FINANCIAL STATEMENTS


The Daviess County Board of Education (Board) is the level of government which has oversight responsibilities over all activities related to public elementary and secondary school education within the jurisdiction of the Daviess County School District (District). Board members are elected by the public and have decision making authority for the District.

The financial statements of the District include the financial activities of the Board and its blended component unit in accordance with principles defining the governmental reporting entity adopted by the Governmental Accounting Standards Board, as described below.

Daviess County School District Finance Corporation - The Daviess County School District Finance Corporation (Corporation) serves as an agent of the Board in financing the acquisition, construction, and equipping of school buildings and related facilities, including the issuance of bonds. Members of the Board serve as the board of directors for the Corporation. The Corporation has no financial activity, and transactions related to bond issues in which the Corporation acts as an agent are recorded in the District's government-wide financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

Government-Wide Financial Statements - The statement of net position and the statement of activities display information about the District as a whole. These statements include the financial activities of the primary government, except for fiduciary funds . The statements distinguish between those activities of the District that are governmental and those that are considered business-type activities.

The government-wide 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. Governmental fund financial statements, therefore, include reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds.

The government-wide statement of activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the District and for each function or program of the District's governmental activities. Direct expenses are those that are specifically associated with a service, program, or department and are, therefore, clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program, and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not

23




2. Summary of Significant Accounting Policies, Continued

Basis of Presentation, Continued

classified as program revenues are presented as general revenues of the District, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business segment or govenunental function is self-financing or draws from the general revenues of the District.

Fund Financial Statements - Fund financial statements report detailed infonnation about the District. The focus of govenunental and enterprise fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Nonmajor funds are aggregated and presented in a single column. Fiduciary funds are reported by fund type.

The accounting and reporting treatment applied to a fund is determined by its measurement focus. All govenunental fund types are accounted for using a flow of current financial resources measurement focus and the modified accrual basis of accounting. The financial statements for govenunental funds are a balance sheet, which generally includes only current assets and current liabilities, and a statement of revenues, expenditures, and changes in fund balances, which reports on the changes in net total assets.

Proprietary funds and fiduciary funds are reported using the economic resources measurement focus and the accrual basis of accounting. The statement of cash flows provides information about how the District finances the cash flow needs of its proprietary activities.

The District reports the following funds:

Govenunental Funds:

General Fund: The General Fund is the main operating fund of the Board. It accounts for financial resources used for general types of operations. This is a budgeted fund, and any fund balances are considered as resources available for use. This is a major fund of the District.

Special Revenue Funds:

Special Revenue Fund: The Special Revenue Fund accounts for proceeds of specific revenue sources ( other than expendable trusts or major capital projects) that are legally restricted to disbursements for specified purposes. It includes federal financial programs where unused balances may be returned to the grantor at the close of the specified project periods, as well as the state grant programs. Project accounting is employed to maintain integrity for the various sources of funds. The separate projects offederally-funded grant programs are identified in the Schedule of Expenditures of Federal Awards included in this report. This is a major fund of the District.

24


NOTES TO FrNANCIAL STATEMENTS



Basis of Presentation, Continued

District Activity Fund: The District Activity Fund is used to account for funds to support co-curricular and extra-curricular activities not raised or expended by student groups.

Capital Projects Funds: Capital project funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities and equipment (other than those financed by proprietary funds).

SEEK Capital Outlay Fund: The Support Education Excellence in Kentucky (SEEK) Capital Outlay Fund receives those funds designated by the state as Capital Outlay Funds and is restricted for use in financing projects identified in the District's facility plan.

FSPK Building Fund: The Facility Support Program of Kentucky (FSPK) Building Fund accounts for funds generated by the building tax levy required to participate in the Kentucky School Facilities Construction Commission's construction funding and state matching funds, where applicable. Funds may be used for projects identified in the District's facility plan.

Construction Fund: The Construction Fund accounts for proceeds from sales of bonds and other revenues to be used for authorized construction or renovation. This is a major fund of the District.

Debt Service Fund: The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, long-tenn debt principal and interest.

Proprietary Funds (Enterprise): Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that costs of providing goods or services be financed or recovered primarily through user charges.

Food Service Fund: The Food Service Fund is used to account for school food service activities, including the National School Lunch Program, which is conducted in cooperation with the U.S. Department of Agriculture (USDA). Revenues are primarily charges for meals. Amounts have been recorded for in-kind contributions of commodities from the USDA. This is a major fund of the District.

25





Basis of Presentation. Continued

After School Fund: The After School Fund is used to account for after school programs established to provide supervised activities for students after dismissal. Revenues are primarily charges for childcare.

Fiduciary Funds:

Private Purpose Trust Fund: The Private Purpose Trust Fund accounts for assets held by the District in a trustee capacity.

School Activity Funds: The School Activity Funds are agency funds which primarily account for activities of student groups. These funds are accounted for in accordance with the Accounting Procedures for Kentuc/,.y School Activity Funds. These funds are custodial in nature and thus do not present results of operations or have a measurement focus.

Basis of Accounting

Basis of accounting detennines when transactions are recorded in the financial records and reported on the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds also use the accrual basis of accounting.

Revenues - Exchange and Non-Exchange Transactions:

Revenues resulting from exchange transactions, in which each party receives essentially equal value, are recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenues are recorded in the fiscal year in which the resources are measurable and 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. For the District, available means expected to be received within 60 days of the fiscal year end.

Non-Exchange Transactions, in which the District receives value without directly giving equal value in return, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted; matching requirements, in which the District must

26





Basis of Accounting, Continued

provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the District on a reimbursement basis. On a modified accrual basis, revenues from Non-Exchange Transactions must also be available before they can be recognized.

Unearned Revenue - Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received before the costs have been earned and eligibility requirements are met, are recorded as unearned revenue.

Expenses/Expenditures - On the accrual basis of accounting, expenses are recognized at the time they are incurred. The fair value of donated commodities used during the year is reported in the statement of revenues, expenses, and changes in net position as an expense with a like amount reported as donated commodities revenue. When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the District's policy is to first apply restricted resources.

The measurement focus of governmental fund accounting is on changes in net financial resources (expenditures) rather than revenues (expenses). Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation, are not recognized in governmental funds.

Budgetary Principles

The District's budgetary process accounts for certain transactions on a basis other than generally accepted accounting principles ( GAAP). The major differences between the budgetary basis and the GAAP basis are:

Revenues are recorded when received m cash (budgetary), as opposed to when susceptible to accrual (GAAP).

Expenditures are recorded when paid in cash (budgetary), as opposed to when the obligation is incurred (GAAP).

Encumbrance Accounting

Encumbrance accounting is employed in the governmental funds. Encumbrances ( e.g., purchase orders, contracts) outstanding at year end are included in assigned fund balance. For budgetary purposes, appropriations lapse at fiscal year-end and do not constitute expenditures or liabilities because the commitments will be reappropriated in the next year.

27





Cash and Cash Equivalents

The Board considers bank demand deposit accounts to be cash equivalents.

Investments

Investments are measured at fair value on a recurring basis.

Accounts Receivable

Receivables consist of all revenue.s earned at year-end and not yet received. Major receivable balances for the governmental activities include federal and state funding and taxes. Balances deemed uncollectible are written off; therefore, the District does not record an allowance for doubtful accounts.

Inventory

Inventory in the General Fund consists of maintenance, instructional, and transportation supplies, stated at cost which approximates market, using the first-in, first-out (FIFO) method. Inventory in the Food Service Fund consists of purchased food valued at cost, and donated commodities valued by the U.S. Department of Agriculture at fair value on the date of donation, using the FIFO method.

Capital Assets

General capital assets are those assets not specifically related to activities reported in the proprietary funds and generally result from expenditures in the governmental funds. These assets are reported in the governmental activities column of the government-wide statement of net position but are not reported in the fund financial statements. Capital assets utilized by the proprietary funds are reported both in the business-type activities column of the governmentwide statement of net position and in the respective funds.

All capital assets are capitalized at cost ( or estimated historical cost) and updated for additions and retirements during the year. Donated fixed assets are recorded at fair market value as of the date received. The District maintains a capitalization threshold of five thousand dollars. The District does not possess any infrastructure. Improvements are capitalized; the cost of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset's life are not.

All reported capital assets are depreciated. Improvements are depreciated over the remaining useful lives of the related capital assets. Depreciation is computed using the straight-line method over the following useful lives for both general capital assets and proprietary fund assets per Kentucky Department of Education Guidelines:

28





Capital Assets, Continued

Description

Land improvements Buildings and improvements Technology equipment Vehicles General equipment Food service equipment

Property Taxes

Estimated Lives

20 years 25-50 years

5 years 5-10 years

10-20 years 12 years

Property taxes are levied by October 1 on the assessed value listed as of the prior January 1 for all real and personal property in the District. Taxes are due in one installment on December 1 and become delinquent by January I following the levy date.

The assessed value of the roll on January 1, 2018, on which the levy for the 2019 fiscal year was based, totaled $5,806,347,315. Property taxes collected are recorded as revenues in the fiscal year for which they were levied. All taxes collected are initially deposited into the General Fund and then transferred to the appropriate fund.

The tax rates assessed for the year ended June 30, 2019, to finance General Fund and FSPK Building Fund operations were 53.6 cents and 17.1 cents per $100 valuation, respectively, for a total of 70. 7 cents per $100 valuation. In addition, the tax rate assessed for motor vehicles totaled 49 .0 cents per $100 valuation.

The District also levies a utility gross receipts license tax in the amount of 3% of the gross receipts derived from the furnishing within the county of telephonic and telegraphic communications services, cablevision services, electric power, water, and natural, artificial, and mixed gas.

Unearned Revenue

The District reports unearned revenue on its government-wide and fund financial statements. Unearned revenues arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period (fund financial statements). Unearned revenues also arise when resources are unearned by the District and received before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures (fund financial statements and government-wide financial statements). 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 applicable financial statement and revenue is recognized.

29





Interfund Receivables and Payables

Each fund is a distinct fiscal and accounting entity, and thus interfund transactions are recorded in each fund affected by a transaction. During the year, the General Fund receives and disburses funds that relate to other funds or activities. Transfers are then made between the various funds to more properly reflect the nature of the transactions. No amounts were receivable/payable between the funds at fiscal year-end.

Bonds and Related Premiums, Discounts, and Issuance Costs

In the government-wide financial statements, bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premiums or discounts. Bond issuance costs are expensed when bonds are issued.

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 repo1ied as other financing sources. Discounts related to debt issuance are reported as other financing uses. Issuance costs are reported as debt service expenditures.

Pension and Other Postemployment Benefits

For purposes of measuring the net liabilities, the deferred outflows of resources and deferred inflows of resources, and expense related to pensions and other postemployment benefits (OPEB), information about the fiduciary net position of the pension I OPEB plans, and additions to/deductions from the pension/ OPEB plans' fiduciary net position have been determined on the same basis as they are reported by the pension/ OPEB plans. For this purpose, revenues are recognized when earned. Contributions are recognized when due, pursuant to legal ( or statutory) requirements. Benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. The primary government's proportionate share of pension amounts were further allocated to proprietary funds based on the salaries paid by each proprietary fund. Plan investments are reported at fair value.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position and/or balance sheet reports a separate section for deferred outflows ofresources. This separate financial statement element, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until that time.

30


NOTES TO FINANCIAL ST A TEMENTS



Deferred Outflows/Inflows of Resources, Continued

In addition to liabilities, the statement of financial position and/or balance sheet repo1is a separate section for deferred inflows of resources. This separate financial statement element, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow ofresources (revenue) until that time.

Net Position

The District classifies net position in the government-wide financial statements as follows:

• Net investment in capital assets includes the District's capital assets (net of accumulated depreciation) reduced by the outstanding balances of bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

• Restricted net position includes assets that have third-party (statutory, bond covenant, or granting agency) limitations on their use. The District typically uses restricted assets first, as appropriate opportunities arise, but reserves the right to selectively defer the use until a future project.

• Unrestricted net position typically includes unrestricted liquid assets. The Board of Education has the authority to revisit or alter this designation.

Fund Balance Classification

The District reports fund balances in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government's fund balances more transparent. The following classifications describe the relative strength of the spending constraints:

• Nonspendable fund balance-amounts that are not in spendable form (such as inventory) or are required to be maintained intact.

• Restricted fund balance-amounts constrained to specific purposes by their providers ( such as grantors, bondholders, and higher levels of government), through constitutional provisions, or by enabling legislation.

• Committed fund balance- amounts constrained to specific purposes by the District itself, using its highest level of decision-making authority (i.e., Board of Education). To be reported as committed, amounts cannot be used for any other purpose unless the District takes the same highest-level action to remove or change the constraint.

31





Fund Balance Classification, Continued

• Assigned fund balance-amounts the District intends to use for a specific purpose. Intent can be expressed by the District or by an official or body to which the Board of Education delegates the authority.

• Unassigned fund balance- amounts that are available for any purpose. Positive amounts are reported only in the General Fund.

The Board of Education establishes (and modifies or rescinds) fund balance commitments by passage of a resolution. This is typically done through adoption and amendment of the budget. A fund balance commitment is further indicated in the budget document as a designation or commitment of the fund (such as for special incentives). Assigned fund balance is established by the Board of Education through adoption or amendment of the budget as intended for specific purpose (such as the purchase of fixed assets, construction, debt service, or for other purposes).

The District would typically use Restricted fund balances first, followed by Committed resources, and then Assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend Unassigned resources first to defer the use of these other classified funds.

In the General Fund, the District strives to maintain an unassigned fund balance to be used for unanticipated emergencies of approximately 15% of the actual GAAP basis expenditures and other financing sources and uses.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, designated fund balances, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Standards

The following recently issued accounting standards are expected to impact the financial statements of the District in future periods:

GASES No. 84 Fiduciary Activities

In January of 2017, the GASB issued Statement No 84 to improve guidance regarding the identification, accounting and financial reporting for fiduciary activities. This Statement establishes criteria for identifying fiduciary activities for all state and local governments, and requires that activities meeting such criteria should present a statement of fiduciary net position and a statement of changes in fiduciary net position. The Statement is effective for reporting periods beginning after December 31, 2018. The District is currently evaluating the impact the standard will have on its financial statements.

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GASBS No. 87 Leases

In June of 2017, the GASB issued Statement No. 87 to improve accounting and financial reporting for leases by governments, by establishing standards for leases that previously were classified as operating leases. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset, thus requiring lessees to recognize a lease liability and an intangible right-to-use lease asset, and lessors to recognize a lease receivable and a deferred inflow of resources. The Statement is effective for reporting periods beginning after December 15, 2019. The District is currently evaluating the impact that the standard will have on its financial statements.

3. Deposits and Investments

Deposits

Kentucky Revised Statutes authorize the District to invest money subject to its control in obligations of the United States and ofits agencies and instrumentalities; certificates of deposit or other interest-bearing accounts of any bank or savings and loan institution which are insured by the Federal Deposit Insurance Corporation or similar entity, providing such institutions pledge as security obligations, as pennitted by KRS 41.240 ( 4), having a current quoted market value at least equal to uninsured deposits; commercial paper rated in the highest category by a nationally recognized rating agency; bonds or certificates of indebtedness of the State of Kentucky and of its agencies and instrumentalities; securities issued by a state or local govenunent, or any instrumentality or agency thereof in the United States, and rated in one of the three highest categories by a nationally recognized rating agency; and shares of mutual funds as more fully described in KRS 66.480.

The District maintains a common checking account for all govenunental funds and the trust fund. The Food Service Fund and After School Fund (proprietary funds) each maintain separate bank accounts.

The District's deposits (demand deposits accounts) are carried a cost, which approximates fair value. At June 30, 2019, the book balance of the District's bank deposits was $31,341,187 and the bank balances were $35,167,382. Of the bank balances, $250,000 was covered by federal depository insurance and $34,917,382 was collateralized by securities held by the pledging financial institution. There were no uninsured or uncollateralized balances.

Due to the nature of the accounts and limitations imposed by the purposes of the various funds, all cash balances are considered to be restricted except for the General Fund.

33

3.




Deposits and Investments, Continued

Investments

At June 30, 2019, the District had the following investments and maturities:

Maturities in Years Less

T e Fair Value Than 1 1-5 6-10

Cash equivalents $ 189,802 $ $ $ $

Fixed income:

Bank certificates of deposit 2,424,856 399,666 1,317,506 707,684

Corporate bonds and notes 126,108 51,020 75,088

U.S. government agency obligations 2,542,750 646,209 1,749,781

U.S Treasury bonds and notes 100,000 100,000

Mutual funds 249,754

Total investments $ 5,633,270 $ 399,666 $ 2,114,735 $ 2,532,553 $

Custodial Credit Risk

10+ None

$ 189,802

146,760

249,754

146,760 $ 439,556

Custodial credit risk is the risk that in the event of a failure of the counterparty, a government may not be able to recover the value of its investments that are in the possession of an outside party. The District's deposit policy for custodial credit risk requires compliance with the provisions of state law. The mutual funds were rated between three and five stars by Morningstar. Investments of the District held in U.S. government agency obligations carry the explicit guarantee of the U.S. government and, therefore, are not subject to custodial credit risk.

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 table above details the District's exposure to this risk.

Concentration of Credit Risk

The District, in accordance with KRS 66.480, limits the amount that may be invested at any time in uncollateralized certificates of deposit, bankers acceptances, commercial paper, and securities issued by a state or local government or any instrumentality or agency thereof, to 20% of the total amount of funds invested by the District. At June 30, 2019, the District did not exceed this limit. In addition, amounts invested in any one issuer did not exceed 5% of total investments at fiscal year-end.

34




3. Deposits and Investments, Continued

Fair Value Measurements

The District categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset's fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The District does not have any investments that are measured using Level 3 inputs. The fair value measurements of the District's investments at June 30, 2019, are as follows:

Quoted Prices in Active Significant

Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs

Fair Value (Level 1) (Level 2) (Level3)

Cash equivalents $ 189,802 $ 189,802 $ $

Fixed income:

Bank certificates of deposit 2,424,856 2,424,856 Corporate bonds and notes 126,108 126, l 08 U.S.governmentagency

obligations 2,542,750 2,542,750 U.S. Treasury bonds and

notes 100,000 100,000

Mutual funds 249,754 249,754

Total investments $ 5,633,270 $ 2,864,412 $ 2,768,858 . $

The following is a description of the valuation methodologies used for the fair value measurements. There have been no changes in the methodologies used since the prior fiscal year end.

Interest bearing cash and bank certificates of deposit: The carrymg amount approximated fair value due to the short-term highly-liquid nature.

Corporate bonds, and US. government and Treasury securities: Valued using pricing models that incorporate market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data.

Mutual funds : Valued at the daily closing price as reported by the fund, based on quoted market prices. Mutual funds held by the District are open-end mutual funds that are registered with the U.S. Securities and Exchange Commission. These funds are required to publish their daily net asset value (NA V) and to transact at that price. The mutual funds held by the District are deemed to be actively traded.

35




3. Deposits and Investments, Continued

Investment Earnings

Investment earnings for the year ended June 3 0, 2019, consisted of:

Governmental activities: Interest and dividend income Unrealized gain (loss) Realized gain (loss) on sale of investments Investment expenses

Business-type activities: Interest and dividend income

$ 903,201 227,118

1,462 (10,873)

1,120,908

51,954

$ 1,172,862

Realized gains or losses on investments that had been held in more than one fiscal year and sold in the current year were included as a net change in the fair value of investments reported in prior years and the current year.

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4. Capital Assets

Capital asset activity for the year ended June 30, 2019, was as follows:

Balance Balance June 30, 2018 Additions Dis2osals June 30, 2019

Governmental activities: Capital assets, not being

depreciated: Land $ 4,244,370 $ 5,925,120 $ $ 10,169,490 Construction in progress 1,383,164 10,736,804 (2,097,604} 10,022,364

Total capital assets, not being depreciated 5,627,534 16,661,924 (2,097,604) 20,191,854

Capital assets, being depreciated: Land improvements 3,281,426 3,281,426 Buildings and improvements 159,134,370 2,097,604 161,231,974 Technology equipment 15,240,206 (9,673,284) 5,566,922 Vehicles 11,608,895 1,012,740 (3,702,784) 8,918,851 General equipment 4,764,507 40,692 (2,444,923) 2,360,276

Totals capital assets, being depreciated 194,029,404 3,151,036 {15,820,991} 181,359,449

Less accumulated depreciation: Land improvements (2,277,132) (83,283) (2,360,415) Buildings and improvements (68,114,241) (4,198,309) (72,312,550) Technology equipment (12,865,403) (1,016,962) 9,673,187 (4,209,178) Vehicles (7,582,804) (890,228) 3,702,784 (4,770,248) General equipment (3,902,770) (194,098} 2,441,723 (1,655,145)

Total accumulated depreciation (94,742,350} (6,382,880) 15,817,694 (85,307,536)

Total capital assets, being depreciated, net 99,287,054 (3,231,844) (3,297} 96,051,913

Governmental activities: Capital assets, net $ 104,914,588 $ 13,430,080 $ (2,100,901) $ 116,243,767

Business-tn1e activities: Capital assets, being depreciated:

Land improvements $ 15,452 $ $ $ 15,452 Technology equipment 447,366 (309,239) 138,127 Vehicles 39,779 26,787 (18,558) 48,008 General equipment 3,278,321 17,296 (1,678,923} 1,616,694

Total capital assets, being depreciated 3,780,918 44,083 (2,006,720} 1,818,281

Less accumulated depreciation : Land improvements (10,045) (773) (10,818) Technology equipment (389,617) (23,281) 309,239 (103,659) Vehicles (33,059) (4,691) 18,557 (19,193) General equipment (2,602,194} (140,054} 1,677,734 (1,064,514}

Total accumulated depreciation (3,034,915} (168,799} 2,005,530 (1,198,184}

Business-type activities: Capital assets, net $ 746,003 $ (124,716) $ (1,190l $ 620,097

37




4. Capital Assets, Continued

s.

Depreciation expense was charged to governmental functions, as follows:

Instructional $ 3,508,577 Support services:

Student support 1,099 Instructional staff 2,909 District administration 31,954 School administration 691 Business support 17,101 Plant operations and maintenance 1,947,817 Student transportation 872,732

Total depreciation expense $ 6,382,880

Long-Term Liabilities

Long-tenn liability activity for the year ended June 30, 2019, was as follows:

Balance Balance Due June 30, June 30, Within

2018 Additions Deductions 2019 One Year

Governmental activities: Long-tenn debt:

School building revenue bonds $ 65,507,000 $ 14,110,000 $ (5,138,000) $ 74,479,000 $ 5,743,000

Deferred amounts: For issuance premiums 253,413 126,989 (26,775) 353,627 For issuance discounts (468,468) (8,867) 56,698 (420,637)

Capital lease obligations 397,658 {295,633) 102,025 102,025

Total long-term debt 65,689,603 14,228,122 (5,403,710) 74,514,015 5,845,025

KSBIT assessment 55,045 (18,349) 36,696 18,348

Compensated absences: Accrued sick leave 3,046,942 644,072 {385,350) 3,305,664 474,667

Total governmental activities $ 68,791,590 $ 14,872,194 $ (5,807,409) $ 77,856,375 $ 6,338,040

The KSBIT assessment is expected to be liquidated by the General Fund. Compensated absences are expected to be liquidated by the funds which incurred the related salary and wage costs.

School Building Revenue Bonds

The District is obligated to make lease payments in amounts equal to annual debt service requirements on bonds issued by the Daviess County School District Finance Corporation and

38




5. Long-Term Liabilities, Continued

School Building Revenue Bonds, Continued

the Kentucky School Facilities Construction Commission (Commission) to construct or renovate school facilities. The Board has an option to purchase the properties at any time by retiring the bonds outstanding. These lease payments are recorded in the Debt Service Fund.

In addition, the District has entered into participation agreements with the Commission. The Commission was created by the Kentucky Legislature for the purpose of assisting local school districts in meeting school construction needs.

A summary of District and Commission bond activity for the year ended June 30, 2019, is as follows:

District Commission Total

Balance, June 30, 2018 $ 63,861,902 $ 1,645,098 $ 65,507,000 Issued 14,110,000 14,110,000 Retired (5,066,685) (71,315) (5,138,000)

Balance, June 30, 2019 $ 72,905,217 $ 1,573,783 $ 74,479,000

A summary of the interest rates, maturities, and balances is as follows:

Balance, June 30, 2019 Range of Interest Final Rates Maturity District Commission Total

2008A Issue 3.00 - 3.400% 2020 $ 415,000 $ $ 415,000 2011 Issue 0.75 - 2.125% 2023 7,110,000 7,110,000 2012 Issue 2.00 - 2.500% 2024 2,145,000 2,145,000 2013A Issue 1.50 - 3.250% 2033 1,520,000 1,520,000 2013B Issue 1.00 - 2.000% 2026 2,520,000 2,520,000 2014 Issue 0.35 - 3.625% 2034 7,385,000 7,385,000 2014B Issue 1.35 - 3.750% 2035 564,000 564,000 20I4C Issue 1.50 - 3.600% 2027 1,545,000 1,545,000 2015A Issue 2.00 - 3.625% 2035 8,177,685 1,017,315 9,195,000 2015B Issue 2.00 - 3.000% 2030 7,785,000 7,785,000 20I5C Issue 2.00 - 3.000% 2027 6,970,000 6,970,000 2016A Issue 1.00 - 3.000% 2027 1,990,000 1,990,000 2016B Issue 1.00 - 3.000% 2030 1,475,000 1,475,000 2016C Issue 2.00 - 3.000% 2036 4,370,000 4,370,000 2017A Issue 3.00% 2028 3,270,000 3,270,000 2017B Issue 2.00 - 3.000% 2037 1,553,532 556,468 2,110,000 2018 Issue 3.00 - 4.000% 2039 8,205,000 8,205,000 2019 Issue 3.00 - 5.000% 2039 5,905,000 5,905,000

$ 72,905,217 $ 1,573,783 $ 74,479,000

39





School Building Revenue Bonds, Continued

The bonds may be called prior to maturity and redemption premiums are specified in each issue. Assuming no bonds are called prior to scheduled maturity, the minimum obligations of the District and amounts to be paid by the Commission, at June 30, 2019, for debt service (principal and interest) are as follows:

Daviess County Kentucky School Facility School District Construction Commission

Year Ending District Commission

June 30, Princieal Interest Total Princieal Interest Total Total

2020 $ 5,669,545 $ 2,063,960 $ 7,733,505 $ 73,455 $ 51,377 $ 124,832 $ 7,858,337 2021 5,813,341 1,927,313 7,740,654 75,659 49,173 124,832 7,865,486 2022 5,946,072 1,793,703 7,739,775 77,928 46,904 124,832 7,864,607 2023 6,079,734 1,655,639 7,735,373 80,266 44,565 124,831 7,860,204 2024 6,229,326 1,508,479 7,737,805 82,674 42,157 124,831 7,862,636 2025-2029 22,795,330 5,281,307 28,076,637 454,670 169,487 624,157 28,700,794 2030-2034 13,984,327 2,442,032 16,426,359 532,673 91,481 624,154 17,050,513

2035-2039 6,387,542 531,710 6,919,252 196,458 11,127 207,585 7,126,837

$ 72,905,217 $ 17,204,143 $ 90, I 09,360 $ 1,573,783 $ 506,271 $ 2,080,054 $ 92,189,414

Generally, all bonds issued are secured by a statutory mortgage lien on the respective school buildings and appurtenant properties, including any subsequent additions thereto. The agreements contain a provision that in the event of default, action can be taken to compel specific performance. The amount of interest expense on bonds payable for the year ended June 30, 2019, totaled $2,167,178, of which $2,113,662 was incurred by the District, and $53,516 was paid by the Commission.

The District defeased various revenue bonds in prior years by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on old bonds. Accordingly, the trust account assets and the liabilities relating to all of these defeased bonds are not included in the District's financial statements. On June 30, 2019, $33,755,000 of bonds outstanding are considered defeased.

Capital Lease Obligations

The District is obligated under leases for equipment that are accounted for as capital leases. The lease obligations are secured by the related equipment. The lease contains a provision that in the event of default, the lessor may take whatever action at law or in equity necessary to enforce its

40





Capital Lease Obligations, Continued

rights. Assets under capital leases at June 30, 2019, totaled $217,017, net of accumulated depreciation of $1,099,475. Amortization of these capital leases included in depreciation expense totaled $240,386 for the year ended June 30, 2019. The following is a schedule by year of future minimum lease payments under capital lease obligations, including interest, at rates ranging between 4.474% to 4.631 %, together with the present value of the future minimum lease payments as of June 30, 2019:

2020

Less amount representing interest

Present value of future minimum lease payments

$

$

106,789

(4,764)

102,025

Interest expense on capital lease obligations for the year ended June 30, 2019, totaled $11,243.

KSBIT Assessment

In years prior to fiscal year 2000, the District pa1ticipated in the Kentucky School Boards Insurance Trust, which has become insolvent. In accordance with the original participation agreement and a court order dated June 4, 2014, each participant in the trust in any prior year was levied an assessment to cover the deficit in order to close the trust. Installment amounts to be paid by the District are as follows:

Year ending June 30:

2020 2021

Compensated Absences

$ 18,348 18,348

$ 36,696 =========

Upon retirement, as defined by the Teachers' Retirement System of the State of Kentucky or the County Employees Retirement System, certified and classified employees received an amount equal to 30% of the value of accumulated sick leave based on the individual final salary. This liability totaled $3,305,664 at June 30, 2019, and is recorded as a long-term liability in the district-wide financial statements. Unused accumulated vacation leave does not vest, and, therefore, is not recorded as a liability in the financial statements.

For governmental fund financial statements, the amount of compensated absences recorded as a liability would be the amount expected to be paid using expendable available resources. These obligations for June 30, 2019, were paid prior to fiscal year end and, therefore, no amount has been accrued in the governmental fund financial statements.

41

6. Leases




The District leases equipment under cancelable operating leases. Commitments under these agreements provide for minimum future rental payments as of June 30, 2019, as follows:

Year ending June 30:

2020 2021 2022 2023

Total minimum rentals

$

$

109,008 75,312 32,947 10,322

227,589

Rental expense for operating leases, including contingent rentals on a per copy basis of $137,013 totaled $250,825 for the year ended June 30, 2019.

7. Pension Benefits - Teachers' Retirement System of the State of Kentucky

Plan Description

Teaching-certified employees of the Kentucky School District are provided pensions through the Teachers' Retirement System of the State of Kentucky (KTRS)- a cost-sharing multipleemployer defined benefit pension plan with a special funding situation established to provide retirement annuity plan coverage for local school districts and other public educational agencies in the state. KTRS was created by the 193 8 General Assembly and is governed by Chapter 161 Section 220 through Chapter 161 Section 990 of the Kentucky Revised Statutes (KRS). KTRS is a blended component unit of the Commonwealth of Kentucky and, therefore, is included in the Commonwealth's financial statements. KTRS issues a publicly available financial report that can be obtained at https://trs.ky.gov/financial-reports-information.

Benefits Provided

For members who have established an account in a retirement system administered by the Commonwealth prior to July 1, 2008, members become vested when they complete five (5) years of credited service. To qualify for monthly retirement benefits, payable for life, members must either:

1. Attain age fifty-five (55) and complete five (5) years of Kentucky service, or 2. Complete 27 years of Kentucky service.

Participants that retire before age 60 with less than 27 years of service receive reduced retirement benefits. Non-university members with an account established prior to July 1, 2002, receive monthly payments equal to two (2) percent (service prior to July 1, 1983) and two and one-half (2.5) percent (service after July 1, 1983) of their final average salaries for each year of credited service. New members (including second retirement accounts) after July 1, 2002, will receive monthly benefits equal to 2% of their final average salary for each year of service if,

42




7. Pension Benefits - Teachers' Retirement System of the State of Kentucky, Continued

Benefits Provided, Continued

upon retirement, their total service is less than ten years. New members after July 1, 2002, who retire with ten or more years of total service will receive monthly benefits equal to 2.5% of their final average salary for each year of service, including the first ten years. In addition, members who retire July 1, 2004, and later with more than 30 years of service will have their multiplier increased for all years over 30 from 2.5% to 3.0% to be used in their benefit calculation. Effective July 1, 2008, the System has been amended to change the benefit structure for members hired on or after that date.

Final average salary is defined as the member's five (5) highest annual salaries for those with less than 27 years of service. Members at least age 55 with 27 or more years of service may use their three (3) highest annual salaries to compute the final average salary. KTRS also provides disability benefits for vested members at the rate of sixty (60) percent of the final average salary. A life insurance benefit, payable upon the death of a member, is $2,000 for active contributing members and $5,000 for retired or disabled members.

Cost ofliving increases are one and one-half (1.5) percent annually. Additional ad hoc increases and any other benefit amendments must be authorized by the General Assembly.

Contributions

Contribution rates are established by Kentucky Revised Statutes. Members are required to contribute 12.855% of their salaries to KTRS for the year ended June 30, 2019. The State, as a non-employer contributing entity, contributes 13 .105% of the salaries of school district members who joined before July 1, 2008 and 14.105 % for those who joined thereafter. For local school district members whose salaries are federally funded, the District contributes 16. l 05% of salaries.

If an employee leaves covered employment before accumulating five (5) years of credited service, accumulated employee pension contributions plus interest are refunded to the employee upon the member's request.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

Because the State, as a non-employer contributing entity, is required by Kentucky Revised Statutes to contribute I 00% of the District's contractually required contributions, the District reports no pension liabilities, pension expenses, deferred outflows of resources, or deferred inflows of resources related to KTRS.

The portion of the KTRS net pension liability that was associated with the District recognized at June 30, 2019, was as follows:

43




7. Pension Benefits -Teachers' Retirement System of the State of Kentucky, Continued

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions, Continued

District's proportionate share of the net pension liability

State's proportionate share of the net pension liability associated with the District

Total

$

206,836,340

$ 206,836,340

The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2016. The net pension liability associated with the District was based on a projection of the District's long-tenn share of contributions to the pension plan relative to the projected contributions of all participating school districts and the State, actuarially detennined. At June 30, 2018, the measurement date, the District's propo1tion of the KTRS net pension liability was 1.5796%, an increase of .0047% from its proportion measured as of June 30, 2017, of 1.5843%.

For the year ended June 30, 2019, the District recognized on-behalf pension expense and revenue of $14,986,869 for contributions provided by the State.

Actuarial Assumptions

The total pension liability in the June 30, 2017, actuarial valuation was detennined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 3.00%

Salary increases, including inflation 3.50 to 7.30%

Long-term investment rate of return, net of pension plan investment expense, including inflation 7.50%

Municipal Bond Index Rate:

Prior Measurement Date 3.56%

Measurement Date 3.89%

Single Equivalent Interest Rate, net of pension plan investment expense, including inflation:

Prior Measurement Date 4.49%

Measurement Date 7.50%

Post-Retirement Benefit Increases 1.50% annually

44





Actuarial Assumptions, Continued

Mortality rates were based on the RP-2000 Combined Mortality Table for Males and Females, as appropriate, with adjustments for mortality improvements based on a projection of Scale BB to 2025, set forward two years for males and one year for females, with a setback of one year for females.

The actuarial assumptions used in the June 30, 2017, valuation were based on the results of an actuarial experience study for the period July 1, 2010, to June 30, 2015, adopted by the KTRS Board on November 19, 2016.

The long-term expected rate ofreturn on pension plan investments was determined using a lognonnal distribution analysis in which best-estimate ranges of expected future real rates ofreturn ( expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate ofreturn by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Long-Term Expected Asset Class Target Allocation Real Rate of Return

U.S. equity 40% 4.2%

International 22 5.2%

Fixed income 15 1.2%

Additional categories 8 3.3%

Real estate 6 3.8%

Private equity 7 6.3%

Cash 2 0.9%

100%

45





Discount Rate

The discount rate used to measure the total pension liability (TPL) as of the Measurement Date was 7.50%. The projection of cash flows used to detennine the discount rate was perfonned in accordance with GASB 67. KTRS assumed that Plan member contributions will be made at the current contribution rates and that employer contributions will be made at statutorily required rates, adjusted by 95% for all fiscal years in the future. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the District's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate

The following presents the State's proportionate share of the net pension liability associated with the District using the discount rate of 7.50%, as well as what the State's proportionate share of the net pension liability associated with the District would be ifit were calculated using a discount rate that is I-percentage-point lower (8.50%) or 1-percentage-point higher (7.50%) than the current rate:

1 % decrease

Current discount rate

1 % increase

Plan Fiduciary Net Position

Discount rate

6.50%

7.50%

8.50%

State's proportionate share of net pension liability associated with the District

$265,125,587

$206,836,340

$157,791,569

Detailed information about the KTRS fiduciary net position is available in the publicly available financial report.

Payable to the Pension Plan

Because the State is required by statute to contribute 100% of the District's contractually required pension contributions, the District reports no payable for such pension contributions at June 30, 2019.

46




8. Other Postemployment Benefits -Teachers' Retirement System of the State of Kentucky

Medical Insurance Plan (MIP)

Plan description - In addition to the pension benefits described in Note X, Kentucky Revised Statute 161.675 requires KTRS to provide post-employment healthcare benefits to eligible members and dependents. The MIP is a cost-sharing multiple employer defined benefit plan with a special funding situation. Changes made to the medical plan may be made by the KTRS Board of Trustees, the Kentucky Department of Employee Insurance and the General Assembly.

Benefits provided-To be eligible for medical benefits, the member must have retired either for service or disability. The MIP offers coverage to members under the age of 65 through the Kentucky Employees Health Plan administered by the Kentucky Department of Employee Insurance. KTRS retired members are given a supplement to be used for payment of their health insurance premium. The amount of the member's supplement is based on a contribution supplement table approved by the KTRS Board of Trustees. The retired member pays premiums in excess of the monthly supplement. Once retired members and eligible spouses attain age 65 and are Medicare eligible, coverage is obtained through the KTRS Medicare Eligible Health Plan.

Contributions - In order to fund the post-retirement healthcare benefit, seven and one-half percent (7.50%) of the gross annual payroll of members is contributed. Three percent (3.75%) is paid by member contributions and three quarters percent(. 75%) from State appropriation and three percent (3.00%) from the employer. The State contributes the net cost of health insurance premiums for members who retired on or after July l, 2010, who are in the non-Medicare eligible group. Also, the premiums collected from retirees as described in the plan description and investment interest help meet the medical expenses of the plan.

At June 30, 2019, the District reported a liability for its proportionate share of the collective net OPEB MIP liability and the related deferred ouflows or deferred inflows.

Life Insurance Plan (LIP)

Plan description - KTRS also administers a life insurance plan as provided by Kentucky Revised Statute 161.655 to eligible active and retired members. The LIP is a cost-sharing multiple employer defined benefit plan with a special funding situation. Changes made to the life insurance plan may be made by the KTRS Board of Trustees and the General Assembly.

Benefits provided - KTRS provides a life insurance benefit of five thousand dollars payable for members who retire based on service or disability. KTRS provides a life insurance benefit of two thousand dollars payable for its active contributing members. The life insurance benefit is payable upon the death of the member to the member's estate or to a party designated by the member.

47




8. Other Postemployment Benefits-Teachers' Retirement System of the State of Kentucky, Continued

Life Insurance Plan (LIP), Continued

Contributions - In order to fund the post-retirement life insurance benefit, three hundredths of one percent (.03%) of the gross annual payroll of members is contributed by the State. Employers do not contribute to the LIP.

At June 30, 2019, the District did not report a liability for a proportionate share of the collective net OPEB LIP liability, nor any related deferred outflows or deferred inflows, because the State of Kentucky provides the OPEB LIP support directly to KTRS on behalf of the District, and the District does not contribute to the LIP.

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs

At June 30, 2019, the District reported a liability of $28,363,000 for its proportionate share of the collective net MIP OPEB liability that reflected a reduction for state MIP OPEB support provided to the District. The collective net MIP OPEB liability was measured as of June 30, 2018, and the total MIP OPEB liability used to calculate the collective net MIP OPEB liability was based on a projection of the District's long-term share of contributions to the MIP OPEB plan relative to the projected contributions of all participating employers, actuarially determined. At the June 30, 2018 measurement date, the District's proportion was 0.8174520%, an increase of0.0212280% from its proportion measured as ofJune 30, 2017, of 0.838680%.

The amount recognized by the District as its proportionate share of the OPEB liabilities, the related State support, and the total portion of the net OPEB liabilities associated with the District were as follows:

MIP LIP

District's proportionate share of the net OPEB

liability $ 28,363,000 $

State's proportionate share of the net OPEB liability associated with the District

Total

48

24,443,000

$ 52,806,000

419,000

$ 419,000 __ ..,... __





OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs, Continued

For the year ended June 30, 2019, the District recognized MIP OPEB expense of$1,429,013. In addition, on-behalf MIP and LIP OPEB revenue and expense for support provided by the State totaled $1,254,889 and $14,561 for the year ended June 30, 2019. At June 30, 2019, the District reported deferred outflows ofresources and deferred inflows ofresources related to the MIP OPEB from the following sources:

Differences between expected and actual experience

Changes of assumptions

Net difference between projected and actual earnings on plan investments

Changes in proportion and differences between contributions and proportionate share of contributions

District contributions subsequent to the measurement date

Total

$

$

MIP

Deferred Deferred Outflows of Inflows of Resources Resources

$ 1,453,000

390,000

115,000

643,000

1,492,276

1,882,276 $ 2,211,000 =====-

Of the total amount reported as deferred outflows of resources related to the MIP OPEB, $1,492,276 resulting from District contributions subsequent to the measurement date and before the end of the fiscal year will be included as a reduction of the collective net MIP OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows ofresources and deferred inflows of resources related to MIP OPEB will be recognized in the District's MIP OPEB expense as follows:

Year ended June 30,

2020 2021 2022 2023 2024 2025

$ (357,000) (357,000) (357,000) (305,000) (315,000) (130,000)

$ (1,821,000)

49






Actuarial assumptions-The total MIP and LIP OPEB liabilities in the June 30, 2017, actuarial valuation were determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation 3.00% Real Wage Growth 0.50% Wage Inflation 3.50% Salary increases, including

wage inflation 3.50 - 7.20% Long-term Investment Rate of Return,

net of OPEB plan investment expense, including inflation:

MIP 8.00% LIP 7.50%

Municipal Bond Index Rate 3.56% Single Equivalent Interest Rate, net

of OPEB plan investment expense, including inflation (Discount rate):

MIP 8.00% LIP 7.50%

MIP Health Care Cost Trends: Under 65

Ages 65 and Older

Medicare Part B Premiums

7.75% for FY 2018 decreasing to an ultimate rate of 5.00% by FY 2024 5.75% for FY 2018 decreasing to an ultimate rate of 5.00% by FY 2021 1.10% for FY 2018 with an ultimate rate of 5.00% by 2030

Mortality rates were based on the RP-2000 Combined Mortality Table projected to 2025 with projection scale BB and set forward two years for males and one year for females is used for the period after service retirement and for dependent beneficiaries. The RP-2000 Disabled Mortality Table set forward two years for males and seven years for females is used for the period after disability retirement.

50




8. Other Postemployment Benefits -Teachers' Retirement System of the State of Kentucky, Continued


The remaining actuarial assumptions ( e.g. initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2017, valuation were based on a review ofrecent plan experience done concurrently with the June 30, 2017, valuation.

The long-term expected rate of return on OPEB plan investments was determined using a lognormal distribution analysis in which best-estimate ranges of expected future real rates ofretum ( expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

The target allocation and best estimates of aritlunetic real rates of return for each major asset class, as provided by KTRS's investment consultant, are summarized in the following table:

Target Allocation

Asset Class MIP LIP

Global Equity 58.0% 0.0% U.S. Equity 0.0 40.0 International Equity 0.0 23.0 Fixed Income 9.0 18.0 Real Estate 5.5 6.0 Private Equity 6.5 5.0 Other Additional Categories 20.0 6.0 Cash (LIBOR) 1.0 2.0

Total 100% 100%

30 Year Expected Geometric Real Rate of Return

MIP

4.6%

LIP

4.2% 5.2%

1.2% 1.2% 3.8% 3.8% 6.3% 6.3% 3.3% 3.3% 0.9% 0.9%

Discount rate - The discount rates used to measure the total MIP and LIP OPEB liabilities were 8.00% and 7.50%, respectively. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rates and the MIP employer contributions will be made at statutorily required rates. Based on those assumptions, the OPEB plans' fiduciary net position were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liabilities.

51




8. Other Postemployment Benefits - Teachers' Retirement System of the State of Kentucky, Continued


The following table presents the District's proportionate share of the collective net MIP OPEB liability, calculated using the discount rate of 8.00%, as well as what the District's proportionate share of the collective net MIP OPEB liability would be if it were calculated using a discount rate that is I-percentage-point lower (7.00%) or 1-percentage-point higher (9.00%) than the current rate:

1 % decrease (7.00%)

Current discount rate

(8.00%) I% increase

(9.00%)

Net MIP OPEB liability $ 33,260,000 $ 28,363,000 $ 24,284,000

Sensitivity of the District's proportionate share of the collective net MIP OPEB liability to changes in the healthcare cost trend rates - The following presents the District's proportionate share of the collective net MIP OPEB liability, as well as what the District's proportionate share of the collective net MIP OPEB liability would be if it were calculated using healthcare cost trend rates that were I-percentage-point lower or I-percentage-point higher than the current healthcare cost trend rates:

1 % decrease Current

trend rate 1 % increase

Net MIP OPEB liability $ 23,SI 9,000 $ 28,363,000 $ 34,340,000

OPEB plans 'fiduciary net position - Detailed information about the OPEB plans' fiduciary net position is available in the separately issued KTRS financial report.

Payable to the OPEB Plans

The District reported payables of $0 for the outstanding amount of MIP and LIP OPEB contributions due to the Plans at June 30, 2019.

52




9. Pension and Other Postemployment Benefits - County Employees Retirement System

Plan Description

The District contributes to the County Employees Retirement System (CERS), which is a costsharing multiple-employer defined benefit pension / OPEB plan administered by Kentucky Retirement Systems (KRS) that covers members employed in positions of each participating county, city, and school board, and any additional eligible local agencies electing to participate in CERS. Kentucky Revised Statute Section 61.645 assigns the District to establish and amend benefit provisions to the Board of Trustees of Kentucky Retirement Systems (Board). KRS issues a publicly available financial report that can be obtained at www.kyret.ky.gov.

Benefits Provided

CERS provides for retirement, disability, and death benefits to system members through its Pension Fund, as well as other postemployment benefits (OPEB) for hospital and medical insurance through its Insurance Fund.

Retirement benefits may be extended to beneficiaries of members under certain circumstances. Retirement benefits are detennined using a formula which considers the member's final compensation; benefit factors set by statute which vary depending upon the type / amount of service, participation date, and retirement date; and years of service. Plan members with a participation date prior to September 1, 2008, are eligible to retire with full benefits at any time with 27 or more years of service credit, or at age 65 with at least 4 years of service credit. Plan members with a participation date on or after September 1, 2008, are eligible to retire with full benefits at age 57 if the member's age and years of service equal 87, or at age 65 with at least 5 years of service credit.

Other postemployment benefits provided by CERS consist of prescribed contributions for whole or partial payments of required premiums to purchase hospital and medical insurance.

Contributions

State statute requires active members to contribute 5% of creditable compensation. For members participating on or after September 1, 2008, an additional 1 % of creditable compensation is required. This amount is credited to the Insurance Fund and is non-refundable to the member. Employers contribute at the rate determined by the KRS Board to be necessary for the actuarial soundness of the systems, as required by KRS 61.565 and KRS 61. 752.

The District's actuarially determined contribution rates and contribution amounts, based on annual creditable compensation, for the year ended June 30, 2019, were as follows:

53




9. Pension and Other Postemployment Benefits - County Employees Retirement System, Continued

Contributions, Continued

Contribution Rates Contributions

Pension 16.22% $ 2,632,524

OPEB 5.26 853 ,704

Total 21.48% $ 3,486,228

Liabilities, Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions and OPEB

The net pension and OPEB liabilities reported as of June 30, 2019, were measured as of June 30, 2018, and the total pension and OPEB liabilities used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017. The District's proportion of the liabilities was based on a projection of the District's long-term share of contributions to the plan relative to the projected contributions of all participating entities, actuarially determined. Changes in the District's pension and OPEB proportions as of the measurement dates were as follows:

June 30, 2017

Increase

June 30, 2018

Pension

0.637435%

0.014082

0.651517%

OPEB

0.637435%

0.014061

0.651496%

The District's pension and OPEB liabilities and expense as of and for the year ended June 30, 2019, were as follows:

Proportionate Share

Pension/OPEB Expense

Net Pension Net OPEB Liability Liability

$ 39,679,371 $ 11,567,182 =====-----$ 6,434,263 $ 1,363,800

At June 30, 2019, the District reported deferred outflows ofresources and deferred inflows of resources related to pensions and OPEB from the following sources:

54





Liabilities, Ex2ense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions and OPEB, Continued

Pension OPEB

Deferred Defe1Ted Deferred Defe1Ted

Outflows of Inflows of Outflows of Inflows of

Resources Resources Resources Resources

Differences between expected and actual experience $ 1,294,230 $ 580,822 $ $ 1,348,002

Changes of assumptions 3,877,829 2,310,138 26,725

Net difference between projected and actual earnings on plan investments 475,778 796,752

Changes in proportion and differences between contributions and proportionate share of contributions 488,818 112,664 153,426 24,102

Contributions subsequent to the measurement date 2,632,524 853,704

Total $ 8,293,401 $ 1,169,264 $ 3,317,268 $ 2,195,581

The $2,632,524 and $853,704 of deferred outflows ofresources resulting from the District's pension and OPEB contributions subsequent to the measurement date will be recognized as a reduction of the net pension and OPEB liabilities in the year ending June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources will be recognized in pension and OPEB expense as follows:

Pension OPEB Year ending June 30,

2020 $ 3,315,518 $ 64,487 2021 1,758,290 64,487 2022 (369,228) 64,487 2023 (212,967) 219,230 2024 (77,245) 2025 (67,463)

$ 4,491,613 $ 267,983

Actuarial Assum2tions

The total pension/ OPEB liabilities in the June 30, 2017, actuarial valuation were determined using the following actuarial assumptions, applied to all periods included in the measurement:

55






Inflation

Healthcare payroll growth rate

Salary increases

Net investment rate

Healthcare cost trend rates (OPEB)

2.30%

2.00%

3.05% average

6.25%

Pre-65: Initial trend starting at 7.0% at January 2020, and gradually decreasing to an ultimate trend rate of 4.05% over a period of 12 years. Post-65: Initial trend starting at 5.0% at January 1, 2020, and gradually decreasing to an ultimate trend rate of 4.05% over a period of 10 years.

The mortality table used for active members is RP-2000 Combined Mortality Table projected with Scale BB to 2013 (multiplied by 50% for males and 30% for females). For healthy retired members and beneficiaries, the mortality table used is the RP-2000 combined Mortality Table projected with Scale BB to 122013 (set-back for one year for females). For disabled members, the RP-2000 Combined Disabled Mortality Table projected with Scale BB to 2013 (set-back four years for males) is used for the period after disability retirement.

The actuarial assumptions used in the June 30, 2017, valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2013.

The long-term expected rate of return was detennined by using a building-block method in which best-estimate ranges of expected future real rate of returns are developed for each asset class. The ranges are combined by weighting the expected future real rate of return by the target asset allocation percentage. The target allocation and best estimates of aritlunetic real rate of return for each major asset class are summarized in the tables below.

56






Long-Tenn Target Expected Real Rate

Allocation of Return

US equity: US large cap 5.00% 4.50% US mid cap 6.00 4.50% US small cap 6.50 5.50%

Non US equity: International developed 12.50 6.50% Emerging markets 5.00 7.25% Global bonds 4.00 3.00%

Credit fixed: Global IG credit 2.00 3.75% High yield 7.00 5.50% EMD 5.00 6.00% Illiquid private 10.00 8.50% Private equity 10.00 6.50% Real estate 5.00 9.00% Absolute return 10.00 5.00% Real return 10.00 7.00% Cash 2.00 1.50%

Total 100.00%

Discount Rate

The discount rates used to measure the total pension / OPEB liabilities at the measurement dates and changes since the prior year were as follows:

Discount rate, June 30, 2017

Increase (decrease)

Discount rate, June 30, 2018

57

Pension

6.25%

6.25%

OPEB

5.84%

0.01

5.85%





Discount Rate, Continued

The discount rate of 6.25% used to measure the total pension liability was based on the expected rate ofreturn on pension plan investments. The discount rate of 5.85% used to measure the total OPEB liability was based on the expected rate of return on OPEB plan investments of 6.25% and a municipal bond rate of3.62%, as reported in Fidelity Index's "20-Year Municipal GO AA Index" as ofJune 30, 2018.

The projections of cash flows used to determine the discount rates assumed that local employers would contribute the actuarially determined contribution rates of projected compensation over the remaining 25 years ( closed) amortization period of the unfunded actuarial accrued liability.

Sensitivity of the District's Proportionate Share of the Liabilities to Changes in the Discount Rate

The following presents the District's proportionate share of the net pension/ OPEB liabilities, as well as what the District's proportionate share of the net pension/OPEB liabilities would be if they were calculated using a discount rate that is I -percentage-point lower or I-percentage-point higher than the current rate:

District's Proportionate Share

Discount Net pension Discount NetOPEB Rate Liability Rate Liability

1 % decrease 5.25% $ 49,952,219 4.85% $ 15,023,915

Current discount rate 6.25% $ 39,679,371 5.85% $ 11,567,182

l % increase 7.25% $ 31,072,524 6.85% $ 8,622,677

Sensitivity of the District's Proportionate Share of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates

The following presents the District's proportionate share of the net OPEB liability, as well as what the District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are I-percentage-point lower or I-percentage-point higher than the current rate:

S8





Sensitivity of the District's Proportionate Share of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates, Continued

1 % decrease

Current healthcare cost trend rates

1 % increase

Plan Fiduciary Net Position

Healthcare Cost Trend Rates

6.0% Pre-65 or 4.0% Post-65

7.0% Pre-65 or 5.0% Post-65

8.0% Pre-65 or 6.0% Post-65

$

$

$

District's Proportionate Share of Net OPEB

Liability

8,611,881

11,567,182

15,050,630

Detailed information about the CERS fiduciary net position is available in the separately issued Kentucky Retirement Systems Comprehensive Annual Financial Report.

Payables to the Pension I OPEB Plans

The District reported the following payables for the outstanding amount of pension/OPEB contributions due to CERS for the year ended June 30, 2019.

Pension OPEB

$ 0 $ 0

10. On-Behalf Payments

Payments are made by the Commonwealth of Kentucky for various purposes on behalf of the District. These on-behalf payments are budgeted and recorded as revenue and expense in the governmental funds of the District, and are comprised of the following for the year ended June 30, 2019:

KTRS: Premiums Retiree health insurance Retiree life insurance

Health insurance Flex spending State life insurance Technology KSFCC debt service

59

$ 14,986,869 1,254,889

14,561 11,195,200

949,418 19,273

174,982 124,831

$ 28,720,023




11. Deferred Compensation

12.

The District offers its employees participation in a deferred compensation program administered by the Kentucky Public Employees' Deferred Compensation Authority. This program offers a plan authorized by Section 457(b) of the Internal Revenue Code and a plan authorized by Section 401 (k) of the Internal Revenue Code. Both plans are available to all employees and permit them to defer up to 25% of their compensation (subject to limits) until future years. The District makes no contributions to these plans.

Fund Balance Classification

The composition of the fund balance classifications at June 30, 2019, is as follows:

Ma jor Governmental Funds Nonmajor Governmental Funds

Total-Special District FSPK Nonmajor

General Revenue Construction Activity Building Goverrunental Fund Fund Fund Fund Fund Funds Total

Fund balances: Nonspendable:

Invento,y $ 282,053 s s s s s s 282,053 Prepaid expenses 58,492 58.492

340,545 340,545

Restricted for: Future capital needs 1,892,588 440,038 440,038 2,332,626 Other 1,012 9,487,390 195.412 195.412 9,683,814 Technology 151,928 151,928

152.940 11,379.978 195.412 440.038 635.450 12,168,368

Committed: Site-based car,yforward 177,064 177.064

Assigned: Future construction

project 1,200,000 1.200,000 Purchase obligations 40,824 40,824

1.240.824 1.240.824

Unassigned 14.413.974 ( 1.0 12) 14.412.962

Total fund balances $ 16. 172.407 s 151.928 s 11.379,978 s 195,412 s 440.038 s 635.450 s 28.339,763

The District has $1,642,462 of encumbrances of operating funds in major and nonmajor funds at June 30, 2019, rolled over into the next fiscal year.

13. Net Position Deficit

The net position deficit reported by the Food Service Fund in the amount of $(3,401,642) resulted from the recording of the net pension and OPEB liabilities.

60

14. Transfers




Interfund transfers for the year ended June 30, 2019, consisted of the following:

Transfers in:

Nonmajor Major Governmental

Governmental Funds Funds

Special General Revenue Construction Debt Service

Fund Fund Fund Fund

Transfers out:

Major Governmental Fund: General Fund $ $ 713,115 $ 5,281,998 $ $

Nonmajor Governmental Funds: SEEK Capital Outlay

Fund 1,014,826 FSPK Building Fund 706,864 6,544,404 6,898,797

Major Enterprise Fund: Food Service Fund 104,637

$ 1,826,327 $ 7 13,115 $ 11,826,402 $ 6,898,797 $

Total

5,995,113

1,014,826 14,150,065 15,164,891

104,637

21,264,641

Transfers are used to: 1) move revenues from the funds with collection authorization to the funds where budgetary authorizations exist for disbursement; 2) reimburse the General Fund for costs incurred to support proprietary fund activity; and 3) to move unrestricted General Fund revenues to programs accounted for in other funds for which the General Fund provides subsidies or matching funds.

15. Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The District purchases unemployment insurance through the Kentucky School Boards Insurance Trust Unemployment Compensation Fund; however, risk has not been transferred to such fund. In addition, the District continues to carry commercial insurance for all other risks of loss. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

16. Contingencies

The District receives funding from Federal, state and local governrnent agencies and from private contributions. These funds are to be used for designated purposes only. For governrnent agency grants, if based upon the granters' review, the funds are considered not to have been used

61




16. Contingencies, Continued

for the intended purpose, the grantors may request a refund of monies advanced, or refuse to reimburse the District for its disbursements. The amount of such future refunds and unreimbursed disbursements, if any, is not expected to be significant. Continuation of the District's grant programs is predicated upon the grantors' satisfaction that the funds provided are being spent as intended and the grantors' intent to continue their programs.

17. Commitments

In March of 2018, the District entered into an agreement for the sale of the Daviess County Middle School property for $1 .5 million on or before June 30, 2021, pending completion of a new middle school facility.

In fiscal year 2019, proceeds from the 2019 bond issue totaling $5.9 million were used to purchase land on which the new middle school will be built. The project will be bid late fall 2019 to early 2020 and construction is expected to be completed before the start of the 2021-2022 school year.

During fiscal year 2019, the District entered into construction contracts totaling $17,287,314 for various facility improvements. Remaining commitments under these contracts totaled $10,321,078 at June 30, 2019, of which $819,251 was included in accounts payable in the Construction Fund.

62


BUDGETARY COMPARISON SCHEDULE

GENERAL FUND


Variance with Budget Final Budget

Original Final Actual Over (Under) Revenues:

Property taxes s 31,379,814 s 30,979,814 s 31,054,855 s 75,041 Utility taxes 4,250,000 4,250,000 5,529,889 1,279,889 Tuition and fees 70,000 70,000 61,625 (8,375) Earnings on investments 150,000 150,000 1,036,907 886,907 Other local revenue 675,500 475,500 529,331 53,831 State aid 67,329,381 67,225,137 68,060,088 834,951 Federal aid 225,000 190,000 373,904 183,904

Total revenues I 04,079,695 I 03,340,451 I 06,646,599 3,306,148

Expenditures: Instruction 72,089,538 69,840,144 68,928,702 91 I,442 Support services:

Student 3,354,074 4,088,074 4,235,801 (147,727) Instructional staff 3,733,590 3,848,289 3,851,968 (3,679) District administration 10,757,671 11,027,671 1,020,136 10,007,535 School administration 8,613,136 8,515,522 8,204,167 311,355 Business 2,431,997 2,556,061 2,452,045 104,016 Plant operation and maintenance 8,630,389 9,432,389 9,337,921 94,468 Student transportation 8,760,487 8,323,487 8,333,271 (9,784)

Community services Building renovations / additions

Total expenditures 118,370,882 117,631,637 106,364,011 11,267,626

Excess (deficiency) ofrevenues over expenditures (14,291,187) (14,291,186) 282,588 14,573,774

Other financing sources (uses): Proceeds from sale of capital assets 15,000 15,000 31,050 16,050 Operating transfers in 249,043 249,043 1,826,327 1,577,284 Operating transfers out (241,954) (241,954) (5,995,113) (5,753,159)

Total other financing sources (uses) 22,089 22,089 (4,137,736) (4,159,825)

Net change in fund balance (14,269,098) (14,269,097) (3,855,148) 10,413,949

Fund balance, June 30, 2018 20,027,555 20,027,555 20,027,555

Fund balance, June 30, 2019 s 5,758,457 s 5,758,458 $ 16,172,407 s 10,413,949

6)


BUDGET ARY COMPARISON SCHEDULE

SPECIAL REVENUE FUND


Variance with Budget Final Budget

Original Final Actual Over (Under)

Revenues: Other local revenue $ 332,695 $ 336,695 $ 281,349 $ (55,346) State aid 3,906,897 4,132,494 4,361,100 228,606 Federal aid 5,127,667 5,253,842 4,843,177 (410,665)

Total revenues 9,367,259 9,723,031 9,485,626 (237,405)

Expenditures: Instruction 7,392,993 7,943,420 8,223,212 (279,792) Support services:

Student 477,766 487,955 397,803 90,152 Instructional staff 100,000 117,841 139,177 (21,336) School administration 20,405 17,048 16,716 332 Plant operation and maintenance 5,419 3,547 3,547 Student transportation 471,081 477,500 475,479 2,021

Community services 897,575 911,814 912,812 (998)

Total expenditures 9,365,239 9,959,125 10,165,199 (206,074)

Excess ( deficiency) of revenues over expenditures 2,020 (236,094) (679,573) (443,479)

Other financing sources (uses): Operating transfers in (2,020) 213,115 713,115 500,000 Operating transfers out

Total other financing sources (uses) (2,020) 213,115 713,115 500,000

Net change in fund balance (22,979) 33,542 56,521

Fund balance, June 30, 2018 118,386 118,386 118,386

Fund balance, June 30, 2019 $ 118,386 $ 95,407 $ 151,928 $ 56,521

64


SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS' RETIREMENT SYSTEM OF THE ST ATE OF KENTUCKY

Last IO Fiscal Years *

2019 2018 2017 2016

District's proportion of the plan total net

pension liability 0.0000% 0.0000% 0.0000% 0.0000%

District's proportionate share of the net pension

liability associated with the District s s s s

State's proportionate share of the net pension liability

associated with the District 206,836,340 427,477,363 465,688,704 360,367,617

Total s 206,836,340 s 427,477,363 s 465,688,704 s 360,367,617

District's covered payroll s 48,545,737 s 47,896,500 s 47,282,367 s 45,537,911

District's proportionate share of the net pension

liability as a percentage of its covered payroll 0.00% 0.00% 0.00% 0.00%

Plan fiduciary net position as a percentage of the

total pension liability 59.30% 39.83% 35.22% 42.49%

* Presented for those years for which the infonnation is available.

6S

2015

0.0000%

s

318,464,968

s 318,464,968

s 45,654,333

0.00%

45.59%


SCHEDULE OF PENSION CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF THE ST ATE OF KENTUCKY

Last 10 Fiscal Years *

2019 2018 2017

District's contractually required contributions $ $ $ $

District's contributions in relation to the contractually required contributions

Contribution deficiency (excess) $ $ $ $

2016

District's covered payroll $ 49,755,274 $ 48 ,545,737 47,896,500 $ 47,282,367

Contributions as a percentage of covered payroll 0.00% 0.00% 0.00% 0.00%

* Presented for those years for which the information is available.

66

2015

$

$

$ 45 ,537,911

0.00%


SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITIES TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY

Last 10 Fiscal Years*

2019

MEDICAL INSURANCE PLAN (MIP)

District's proportion of the plan total net MIP OPEB liability 0.817452%

District's proportionate share of the net MIP OPEB liability associated with the District $ 28,363,000 $

State's proportionate share of the net MIP OPEB liability associated with the District 24,443,000

Total $ 52,806,000 $

District's covered payroll $ 48,545,737 $

District's proportionate share of the net MIP OPEB liability as a percentage of its covered payroll 58.43%

Plan fiduciary net position as a percentage of the total MIP OPEB liability 25.50%

LIFE INSURANCE PLAN (LIP)

District's proportion of the plan total net LIP OPEB liability 0.00%

District's proportionate share of the net LIP OPEB liability associated with the District $ $

State's proportionate share of the net LIP OPEB liability associated with the District 419,000

Total $ 419,000 $

District's covered payroll $ 48,545,737 $

District's proportionate share of the net LIP OPEB liability as a percentage of its covered payroll 0.00%

Plan fiduciary net position as a percentage of the total LIP OPEB liability 75.00%


67

2018

0.838680%

29,906,000

24,428,000

54,334,000

47,896,500

62.44%

21.18%

0.00%

327,000

327,000

47,896,500

0.00%

79.99%


SCHEDULE OF OPEB CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY


2019 2018

MEDICAL INSURANCE PLAN (MIP)

District's contractually required contributions $ 1,492,651 $ 1,456,375

District's contributions in relation to the contractually required contributions (1,492,651) (1,456,375)

Contribution deficiency (excess) $ $

District's covered payroll $ 49,755,274 $ 48,545,737

Contributions as a percentage of covered payroll 3.00% 3.00%

LIFE INSURANCE PLAN (LIP)

District's contractually required contributions $ $

District's contributions in relation to the contractually required contributions

Contribution deficiency (excess) $ $


Contributions as a percentage of covered payroll 0.00% 0.00%


68


NOTES TO REQUIRED SUPPLEMENTARY INFORMATION TEACHERS' RETIREMENT SYSTEM OF THE STATE OF KENTUCKY


PENSION

Changes of Benefit Tenns 2019 None 2018 None 2017 None 2016 None

Changes of Assumptions 2019 The municipal bond index rate increased from 3.56% to 3.89%.

The discount rate increased from 4.49% to 7.50%. 2018 None 2017 The municipal bond index rate decreased from 3.82% to 3.0 I%.

The discount rate decreased from 4.88% to 4.2%. 2016 None

MEDICAL INSURANCE PLAN {MIP)

Chan ges of Benefit Tenns 2019 None 2018 With the passage of Kentucky House bill 4 71, the eligibility for non-single subsidies (NSS) for the

KEHP-participating members who retired prior to July I, 2010, is restored, but the State will only finance, via its KEHP "shared responsibility" calculations, the costs of the NSS related to those KEHP-participating members who retired on or after July I, 20 I 0.

Chan ges of Assumptions 2019 The municipal bond index rate increased from 3.56% to 3.89%.

Health Care Cost Trends for Medicare Part B Premiums decreased from 1.02% to 0.00%. 2018 None

LI FE INSURANCE PLAN (LIP)

Changes of Benefit Terms 2019 None 2018 None

Changes of Assumptions 2019 The municipal bond index rate increased from 3.56% to 3.89%. 2018 None

69


SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY COUNTY EMPLOYEES RETIREMENT SYSTEM

PENSION FUND

Last IO Fiscal Years *

2019 2018 2017

District's proportion of the net pension liability 0.651517% 0.637435% 0.643869%

District's proportionate share of the net pension liability $ 39,679,371 s 37,311,030 $ 31,701,652 s

District's covered payroll s 16,229,838 s 15,605,728 s 15,449,693 s

District's proportionate share of the net pension liability as a percentage of its covered payroll 244.48% 239.09% 205.19%

Plan fiduciary net position as a percentage of the

total pension liability 53.54% 55.30% 55.50%

* Presented for those years for which the infonnation is available.

70

2016 2015

0.646961 % 0.651196%

27,816,268 s 21,127,000

15,032,371 s 14,894,473

185.04% 141.84%

59.97% 66.80%

Contractually required contributions


SCHEDULE OF CONTRIBUTIONS COUNTY EMPLOYEES RETIREMENT SYSTEM

PENSION FUND

Last 10 Fiscal Years*

2019 2018 2017

s 2,632,524 s 2,350,081 s 2,176,999

Contributions in relation to the contractually

required contributions (2,632,524) (2,350,081) (2,176,999)

Contribution deficiency (excess) s s s

District's covered payroll s 16,230,111 s 16,229,838 s 15,605,728

Contributions as a percentage of covered payroll 16.22% 14.48% 13.95%


71

2016 2015

s 1,918,883 s 1,916,627

(1,918,883) (1,916,627)

s s

s 15,449,693 s 15,032,371

12.42% 12.75%

DAVIESS COUNTTY SCHOOL DISTRICT

SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY

COUNTY EMPLOYEES RETIREMENT SYSTEM

INSURANCE FUND


2019 2018

District's prop01tion of the net OPEB liability 0.651496% 0.637435%

District's propo1tionate share of the net OPEB liability $ 11,567,182 $ 12,814,624


District's prop01tionate share of the net OPEB liability

as a percentage of its covered payroll 71.27% 82.11 %

Plan fiduciaiy net position as a percentage of the

total OPEB liability 57.62% 52.4%


72


SCHEDULE OF CONTRIBUTIONS

COUNTY EMPLOYEES RETIREMENT SYSTEM

INSURANCE FUND


2019

Contractually required contributions $ 853,704

Contributions in relation to the contractually

required contributions (853,704)

Contribution deficiency (excess) $

District's covered payroll $ 16,230,111

Contributions as a percentage of covered payroll 5.26%


73

2018

$ 762,802

(762,802)

$

$ 16,229,838

4.70%


NOTES TO REQUIRED SUPPLEMENTARY INFORMATION COUNTY EMPLOYEES RETIREMENT SYSTEM


Changes of Benefit Tenns

2019 None 2018 None 2017 None 2016 None

Changes of Assumptions

2019 Pension and OPEB: The salary increases assumption was changed from 2.00% to 3.05%.

OPEB: The single discount rate changed from 5.84% to 5.85%.

2018 Pension and OPEB:

OPEB:

2017 None

2016 Pension:

The assumed investment return was changed from 7.50% to 6.25%. The price inflation assumption was changed from 3.25% to 2.30%, which also resulted

in a 0.95% decrease in the salary increase assumption at all years of service. The payroll growth assumption (applicable for the amortization of unfunded actuarial

accrued liabilities) was changed from 4.00% to 2.00%.

The single discount rate changed from 6.89% to 5.84%.

The assumed investment rate ofretum was decreased from 7.75% to 7.50%. The assumed rate of inflation was reduced from 3 .50% to 3 .25%. The assumed rate of wage inflation was reduced from 1.00% to 0.75%. Payroll growth assumption was reduced from 4.50% to 4.00%. The assumed rates of Retirement, Withdrawal, and Disability were updated to more

accurately reflect experience.

74

ASSETS Cash and cash equivalents Accounts receivable:

Other Due from other funds

Total assets

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

Liabilities: Accounts payable Due to other funds

Total liabilities

Deferred inflows of resources

Fund balances:

Restricted Assigned

Total fund balances

Total liabilities, deferred inflows of resources, and fund balances


COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS

June 30, 2019

Special Revenue Capital Projects

s

s

$

s

SEEK District Capital

Activity Outlay Fund Fund

195,412 s

195,412 s

s

195,412

195,412

195,412 s


FSPK

Building Fund

s 440,038

s 440,038

s

440,038

440,038

s 440,038

Total Debt Nonmajor

Service Governmental

Fund Funds

s s 635,450

s s 635,450

s $

635,450

635,450

s $ 635,450


COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

Revenues: Property taxes Earnings on investments Other local revenue State aid Federal aid

Total revenues

Expenditures: Instruction Support services:


Community services New building construction Building renovations I additions Debt service:

Principal Interest Bond issuance costs

Total expenditures

Excess ( deficiency) of revenues over expenditures

Other financing sources (uses): Operating transfers in Operating transfers out

Total other financing sources (uses)

Net change in fund balances

Fund balances, June 30, 2018

Fund balances, June 30, 2019

NONMAJOR GOVERNMENT AL FUNDS


Special Revenue Capital Projects

s

s

SEEK

District Capital

Activity Outlay

Fund Fund

s

239,261 1,014,826

239,261 1,014,826

90,201

90,782

180,983

58,278 1,014,826

(1,014,826)

(1,014,826)

58,278

137,134

195,412 $

Sec Notes to Financial Statements 76

FSPK

Building

Fund

s 8,709,521 5,000

2,989,460

11,703,981

3,500

2,250

5,750

11,698,231

(14,150,065)

(14,150,065)

(2,451,834)

2,891,872

$ 440,038

Debt

Service

Fund

s

124,831

124,831

5,138,000 1,885,628

7,023,628

(6,898,797)

6,898,797

6,898,797

$

Total

Nonmajor

Governmental

Funds

s 8,709,521 5,000

239,261 4,129,117

13,082,899

90,201

90,782

3,500

5,138,000 1,887,878

7,210,361

5,872,538

6,898,797 (15,164,891)

(8,266,094)

(2,393,556)

3,029,006

s 635,450

Apollo High Audubon Elementary Burns Elementary Burns Middle College View Middle Country Heights Elementary Daviess County High Daviess County Middle Deer Park Elementary East View Elementary Heritage Park High Highland Elementary Meadow Lands Elementary Sorgho Elementary Southern Oaks Elementary Tamarack Elementary West Louisville Elementary Whitesville Elementary


COMBINING STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS, DISBURSEMENTS, AND DUE TO

Cash June 30, 2018 Receipts

$ 410,238 $ 987,848 27,921 107,696 73,518 86,004

107,344 261,733 153,362 251,776 32,478 98,870

404,938 1,495,611 56,332 217,952 83,183 112,070 28,846 105,186 13,941 10,848 62,640 123,211 22,869 71,598 40,933 84,766 30,781 71,663 53,921 131,379 60,529 66,971 26,492 74,114

$ 1,690,266 $ 4,359,296


Cash Disbursements June 30, 2019

$

$

913,689 $ 484,397 89,021 46,596 71,307 88,215

263,682 105,395 237,770 167,368

95,043 36,305 1,428,763 471,786

204,558 69,726 108,301 86,952 91,034 42,998

9,744 15,045 113,187 72,664

62,907 31,560 87,828 37,871 66,061 36,383

105,512 79,788 71,682 55,818 76,465 24,141

4,096,554 $ 1,953,008


Accounts Accounts Receivable Inventory Payable

$ 447 $ 16,335 $ 123

505 879 4,724

534

56 131

$ 952 $ 17,935 $ 4,847

Due to Student Groups June 30, 2019

$ 501,056 46,596 88,215

105,395 167,368 36,305

468,446 69,726 86,952 42,998 15,045 73,198 31,560 37,871 36,383 79,788 55,874 24,272

$ 1,967,048

DAVIESS COUNTY SCIIOOL DISTRICT

STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS, DISBURSEMENTS, AND DUE TO

APOLLO HIGH SCHOOL


Due to Cash Cash Accounts Accounts Student Groups

June 30, 20 I 8 Receipts Disbursements Transfers June 30, 2019 Receivable Inventory Payable June 30, 2019

GENERAL FUND s 32,984 s 1,383 s 9,626 s 24,068 s 48.809 s 5 s 123 $ 48,686 OFFICE 3,000 515 5.027 10,720 9,208 9,208 DCPS FOUNDATION GRANTS 249 (249) AP EXAMS 4.672 17,668 16,848 5,492 5,492 PSATTESTS 104 799 820 83 83 BAND UNIFORMS 106 106 106 GRADUATION 28 7,375 7,347 PROM 9,885 10,800 15,167 (260) 5,258 5,258 COMPUTER 1,089 (1,089) FUND RAISER 7,900 80 (7,820) GUIDANCE 3.521 937 725 (I) 3.732 3,732 INTRAMURAL 332 332 332 INTEREST 11,814 (I 1,814) LOCKS OVER YOUR HEAD 616 584 944 299 555 4,340 4,895 PROJECT GRADUATION 5,340 5,588 248 RENAISSANCE 2,031 2,031 CMALLENGER 4.586 4,586 4.586 STUDENT EXAM FEE REIMB 2,520 28.504 27.565 (350) 3,109 3,109 ENL EAGLES NEST NEWS 1.574 1,986 359 (12) 3,189 3,189 YEARBOOK I 1,723 13,146 5,059 12 19,822 19.822 STUDENT ASSISTANCE 2.538 2,468 3,115 1,305 3,196 3,196 TEACHER OF THE YEAR AWARD 21 21 21 STUDENT VENDING I.965 179 406 (t,738) 90 90 ADULT VENDING 980 1,576 l.653 (IS) 885 96 981 ATHLETIC DIRECTOR AA APOLLO ABA BASKETBALL 2,353 5.507 4,905 (2,955) BOYS BASKETBALL 755 2,500 1,745 1,745 ATHLETIC BOOSTER 6,108 49,950 3 I ,745 (22,313) 2,000 788 2,788 ATHLETIC AWARDS 3,206 1,300 2,624 4.530 4,530 ATHLETIC BUDGET ATHLETIC TRAINER SUPPLIES 2,609 3,000 391 391 ATHLETIC WEIGHT TRAINING 2,165 1,392 (773) BASEBALL 1.280 2,000 720 no ATHLETIC SECURITY 10,080 10,080 BOYS CROSS COUNTRY 230 240 812 802 802 GIRLS CROSS COUNTRY 520 515 950 895 895 CHEERLEADERS 16 742 1,200 474 474 ATHLETIC EMERGENCY SERVIC 124 1.575 1.500 49 49 EAGLETIES 773 1,200 1,973 1,973 FOOTBALL 4,573 9,043 4,470 4,470 ATHLETIC GAME OFFICIALS 24, 101 30.525 6,424 6,424 GENERAL ATHLETICS 13,743 2,744 7,065 39.859 49,281 49,281 GIRLS BASKETBALL 508 140 I .485 1.100 263 263 GIRLS GOLF 1.525 1.525 BOYS GOLF 1,250 1,250 GATE 73,58 I 4.050 (69,53 t) ATHLETIC GA TEWORKERS 5,015 5.795 780 780 GIRLS TRACK 352 275 (77)

SOCCER FIELD SOUND SYSTEM 460 460 460 SOFTBALL 270 1,000 730 730

SC'(' Notcs 10 fuunc1;a\ S1:ua ncn1s ,.

Cash June 30, 2018

GIRLS SOCCER

BOYS SOCCER 248 SPORTS PROGRAMS SALES AA SPORTS PROG. ADS AA SPRING SEASON TOURNEY SWIM TEAM/G&B 199 TENNIS/B&G 303

DISTRICT TOURNEY GIRLS DISTRICT TOURNEY BOYS BOYS TRACK HOLIDAY TOURNAMENT ATHLETIC VENDING

BOYS TRACK UT VOLLEYBALL WRESTLING 725 AA V SLAMDOWN TOURNEY REGIONAL TOURNEY · GIRLS SEMI-STA TE TOURNEY ATHLETIC UNIFORM ACCOUNT 251

AA REGION TOURNEY BOYS AA REGION TOURNEY GIRLS AA BORDER BOWL FB EAGLE CUP SOCCER AA CITY/COUNTY AA BOWLING 44

AA ARCHERY ATHLETIC CHILI SUPPER ART CLUB 88

SPIRIT STORE 4,613

BETA 3,118

CHESS DANCE BLUE 11.446 DRAMA 888 COUNCIL FOR EX CHILD 1.061 JUNIOR CIVITAN 500 FFAALUMNI 2,397 FBLA

FCA 5 I FUTURE ED OF AMERICA 193

FFA FCCLA 142 FILM CLUB STRATEGIC GAMING 599 MUSICAUCHORUS/DRAMA 5,589 THESPIAN SOCIETY 962 HABITAT 164 A YL ACADEMY YOUNG LEADER 653 ACADEMIC TEAM 167

SPANISH CLUB 98

KEY CLUB 353 NATIONAL HONOR SOCIETY 2,991

PTSO


STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS. DISBURSEMENTS. AND DUE TO

Receipts Disbursements

20 274

100 153 132

17,600 1,994

1.520

19,510 13,717

329 732 732 417

703 975

7,073 5,986

7,891 6.301 6,167 5.490

1.103 1,471 1,105

66 1,086

13.746 1,862

4,861 5.820 676 461

63.044 71,106

3,547 2,685 2,175 1,385

1,416 493 1,994 (464) 3,362 4.556

48,050 54,625

5,067 7,213 3,786 4,349

1.723

163

300 1,707

APOLLO HIGH SCHOOL


Cash Transfers June 30, 2019

1,754

500 (21)

(15,606)

1,321 1,000

(5,793)

329

(417)

715 2.000 (737)

5,427 (1,590)

(677)

368 1.061 1,020

(11,884)

(977)

2,013

1% (850)

1,194

6,575 (142)

(164)

1,566

Sex Noles 10 Fm.1nc1.1I St;itc:m:nts 7')

1.500 648

1.303

12 1,750

350

5,678

88 2,677 3,333

5,397 1,750 2,047

573 4.855

51 193

599 3,443

399

653 10 98

190 1.584

Accounts Receivable

164

Due to Accounts. Student Groups

Inventory Payable June 30.2019

1,500 648

1,303

164

12 1,750

350

5,67&

88 10,757 13,434

3,333

5,397

1,750 2,047

573

4.855

51 193

599

3.443 399

653 10 98

190 1,584

DAVIESS COUNTY SCIIOOL DISTRICT

STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS. DISBURSEMENTS. AND DUE TO

APOLLO HIGH SCHOOL


Duclo Cash Cash Accounts Account!\ Student Groups

June 30,2018 Receipts Disbursements Transfers June 30, 2019 Receivable Inventory Payable June 30, 20 I 9

SPANISH HONOR SOCIETY 155 2,547 2,085 617 617 STUDENT COUNCIL 6,104 6,131 3,161 (2,225) 6.849 6,849 STAND 301 301 301 SPIRIT CLUB 519 561 2,523 1,443 KYA 12.425 13.480 1,055 YOUNG REPUBLICANS 68 (68) ROBOTICS 2.155 10,974 4,991 8,138 8,138 STLP 1.555 435 80 1.200 1,200 AFJROTC ACTIVITIES 6.925 24.415 23.628 (1,267) 6.445 6,445 AFJROTC SCHOLARSHIP FUND 300 300 300 GS ALLIANCE 114 114 114 ARCHERY CLUB 1,032 (215) (1,247) 3 DARCHERY 702 700 (2) STRENGTH & COND1Tl0N1NG 189 7.8% 12,710 4,625 CCR FIELD TRIP 100% PBIS POSITIVE BE!·IA VIOR 2.352 1,487 (34) 831 831 WKSLS 1.018 1.018 AG 401 3.972 3.571 ART 314 4,292 4.052 74 74 RAND 1.840 32,744 33,953 1,665 2,296 2,296 BUSINESS 784 90 1,654 2,348 2,348 CHORUS 478 4,190 4,926 1,246 988 988 CAREER OPTIONS 284 199 483 483 DRIVER ED 5 25 (30) ENGLISH 2.376 305 375 1.761 4,067 4,067 FRESHMAN TEAM 1.802 1,802 SOPHOMORE TEAM 1,578 1,578 JUNIOR TEAM 2,705 2,705 FINE ARTS 356 2,380 2,301 515 950 950 SENIOR TEAM J,927 1,927 FOREIGN LANGUAGE 2.638 569 1,036 1,396 3,567 3,567 STAMP TEST-WORLD LANG. 5,024 621 3,050 2,595 2,595 SS CHRISTMAS PLAY 147 282 363 228 228 GREENHOUSE I 1.104 10.679 10,944 (402) 10,437 10,437 CONSUMER SCIENCE 678 678 678 MATH 2,069 1,479 2,124 2.714 2,714 MMD/HEAD MMD/BULLINGTON (3) MMD/JACKSON 420 I 87 403 636 636 ORCHESTRA 2,306 2,006 2.910 818 2.220 2,220 MMD/MARTIN 301 391 321 23 I 231 f-lEALTH/PE 2,591 2,565 3,626 1.566 3,096 3,096 AFJROTC-SCHOOL BUDGET 1.085 1,760 675 SCIENCE 3,427 4,134 707 707 SPECIAL SERVICES 221 50 810 761 222 222 MMD/ROBERTS 521 823 400 98 98 SOCIAL STUDIES 7.473 103 1.340 8,710 8,710 TECJ-1-ED 1,792 5,044 3,873 845 3.808 3,808 1-VPE UNIFORMS 5,703 4,375 5.715 3,%5 8,328 450 8,778 LIBRARY COPY MACHINE 673 22 481 1,176 1,176 LIBRARY FINES 397 305 (40) 662 662 POSTER PRINTER I 10 203 428 115

S« Noles 10 F1nanc1al Statc:rnrnls MO

Cash June 30. 2018

STUDENT FEES 117 LOST/DAMAGED BOOKS BOOK RENTAL ELEARNING REPAIR FINES DRIVER'S ED FEES LATHAM SCHOLARSlilP STEWART EAGLE FAMILY SCI 10 198

COKE SCHOLARSHIP 30.034 PRUDEN SCHOLARSHIP 31.464 SATTERLY SCHOLARSHIP 27.579 STEFANIE M. MEMORIAL SCHO 2,075 MURPHY FAMILY SCHOLARSHIP JONATHAN GRA y voe SCI-IOLAI 500 BOYS BASKETBALL UT BASEBALL UT 12.851 BOYSCCl/r 578 GIRLSCCl/r 4.468 CI-IEERLEADING Lfl' 4.472 EAGLETIES UT 10.946 FOOTBALLl/r 13.173 GIRLS BASKETBALL 1/r 3.870 GIRLS GOLF 1/r 4,505 BOYSGOLFl/r 618 TRACK GIRLS 1/r 1.031 SOFTBALLl/r 9,723 GIRLS SOCCER 1/r 717 BOYS SOCCER 1/r 1,346 SWIMTEAM BIG 1/r TENNIS B/G 1/r 2.084 TRACK BOYS 1/r VOLLEYBALL 1/r 11.022 WRESTLING 1/r 12.279 BOWLING B/G UT 4.065 AA ARCHERY UT DISTRICT ACTIVITY FUND

s 410,238 $


STATEMENT OF SCHOOL ACTIVITY FUND RECEIPTS, DISBURSEMENTS. AND DUE TO

Receipts Disbursements

148.137 62.125

5,885 5,885 2,360 2,375

999 1,000 2.000 1.000 1.000

500 500 1,000

10,653 11,386 30.900 42.298 4,807 5,844

849 3.872 41,676 35,490 27,857 25.631 20.21 I 27.353 13,153 14,154 4,338 3,531

1,531 3.261 27.315 28,035

2,238 3.569 7.716 5.473 7,376 5,900

3.339 4,293 1,277 3,660

10.183 16,292 450 1,035

5,827 2,668 860 341

20,156 20,156

987,848 $ 913,689

APOLLO HIGJ-1 SCHOOL

Year Ended June 30. 2019

Cash Transfers June 30, 2019

(85,129)

14 (I)

592 640 576 44

1,815

1,292 900 (23) (22)

(3,027) 986

(1,046) (454) 699

(155) 692

(14) 395

2,383 2.155 (525)

20 729

$ s

Sec Noles 10 fuunc1al S1:uernrnts kl

1,000

202 28,626 31,104 27.155

2,119

1.500 1,082 1,453

833 2,345

10,635 13,150 3,004 3,855 4,266

164

8,848 78

3,589 1,465 1.525

7.068 11.169 7,244 1,248

484,397

Accounts Rccc1vablc

97

s 447

Due to Accounts Student Groups

Inventory Payable June 30, 2019

1.000

202 28.626 31.104 27,155

2.119

1.500 1.082 1.453

833 2,345

10.635 13.150 3.004 3,952 4.266

164

8.848 78

3,589 1,465 1.525

7,068 11,169 7,244 1,248

s 16,335 s 123 s 501,056



DAVIESS COUNTY 1-IIGH SCHOOL

Y car Ended June 30, 2019


Jun.: 30, 2018 Receipts Disbursements Transfers June 30, 2019 Receivable Inventory Payable June 30, 2019

GENERAL FUND $ 36,208 s 96,096 $ 92,691 s 34,309 $ 73,922 $ 25 $ $ $ 73,947 STUDENT ID'S 464 1,591 1,612 6 449 449

OFFICE SUPPLIES 3,274 4,857 5,000 3,417 3,417 NURSE OFFICE 26 1,052 1,200 174 174 DRIVER ED FEE 4,485 4,585 100 ACTIVITY FEES 220 216,192 114,068 (102,344) LAPTOP 1,085 1,085 MISC. MAINTENANCE SUPP. 3,279 364 1,500 4,415 4,415 STUDENT FEES/$24 26,075 21,259 47,334 47,334

TEXTBOOKS/ST ATE 48 85 37 SHEL TON-WALMART 90 48 42 42 VENDING 960 597 40 1,517 120 1,637

FACULTY VENDING 844 1,507 915 (SI I) 925 320 1,245 ST AFFUL TY FUND 1,784 3,841 5,907 300 18 18 PICTURE COMMISSION 8,663 5,027 (3 ,934) 9,756 9,756

MAG/FUND RAISER 8,896 15,142 16,363 962 8,637 8,637 NICKEL WAR 8,467 7,641 4,521 (73) I 1,514 I 1,514 PANTHER PLACE 2,796 2,886 203 113 113 ATHLETICS GENERAL I0,453 96,127 76,552 (29,083) 945 945 ATHLETIC TRAINING 49 2,711 3,600 938 938 ATHLETIC BOOSTERS 5,284 56,586 29,612 (29,258) 3,000 879 3,879 BASEBALL 2,173 21,674 22,628 425 1,644 1,644

BASEBALL-DISTRICT TO URN BASEBALL TOURNAMENT BKBALL REGIONAL TOURN BASKETBALL-BOYS 8,806 19,916 18,807 55 9,970 9,970 BOYSBKBTOURNAMENT BASKETBALL-GIRLS 783 10,206 9,929 (9) 1,051 1,051 BASKETBALL SHOOTOUT 250 500 (750) BASKETBALL CAMP BOYS BKB MIDDLE SCHOOL 1,633 550 214 1,969 1,969 CC/TR INVITATIONALS 3,680 670 1,143 3,207 3,207 DISTRICT BKBALL XC BOYS 6,639 10,441 14,169 1,709 4,620 4,620 XCGIRLS 3,207 10,533 9,800 1,109 5,049 5,049 TRACK GIRLS 4,271 3,150 2,400 3,521 3,521

BOWLING 2,033 l,667 4,822 3,423 2,301 2,301

CHEERLEADERS 33,487 73,609 79,622 (1 ,859) 25,615 4,724 20,891 TRACK-BOYS 2,358 4,146 2,400 612 612 FOOTBALL BOOSTERS 5,600 5,353 (247)

Sec Notes to Financial Statements 82


STATEMENT OF SCI-IOOL ACTIVITY FUND RECEIPTS, DISBURSEMENTS, AND DUE TO

DAVIESS COUNTY IIIGI-I SCHOOL

Y car Ended J unc 30, 20 I 9


June 30, 2018 Receipts Disbursements Transtcrs June 30, 2019 Receivable Inventory Payable June 30, 2019

FOOTBALL I 17 32,871 48.855 15,869 2 2

FOOTBALL !'LAYOFF GOLF BOYS 1,493 5,974 9,237 I,770

GOLF GIRLS 1,538 1,224 3,083 1,044 723 723

INTRAMURAL SPORTS 296 160 456 456

PANTHERETTES 46 45,175 36,489 (4,382) 4,350 4,350

SOCCER BOYS SUB SECTIONAL SOCCER TOURNAMENT 1,084 I,055 (29)

SOCCER REGIONALS SOCCER BOYS 137 977 5,387 6,597 2,324 2,324

SOCCER TOURN GIRLS SOCCER GIRLS 3 55,832 59,663 5,047 1,219 1,219

SOCCER DISTRICT TOURN

SOFTBALL 4,782 17,793 13,433 660 9,802 40 9,842

SOFTBALL TOURNEY BASEBALL FLORIDA 2,035 2,035

SOCCER SIGNS-BOYS 1,581 19,160 19.405 170 1,506 1,506

STATE TOURNAMENT EXP. 2,291 10,615 8,324

TEAM LAUREN/CANCER AW ARE 7,220 6,508 7,088 (1,081) 5,559 5,559

SWIMMING 3,870 918 1,950 4,902 4,902

SOFTBALL DISTR!CT TOURN TENNIS BOYS 2,686 375 372 l,000 3,689 3,689

TENNIS GIRLS I,214 1,567 1,752 800 1,829 l,829

VOLLEYBALL 3,880 6,518 11 ,401 3,305 2,302 2,302

VOLLEYBALL TOURNAMENT SWIM-REGIONALS WRESTLING 50 13,718 15,527 2,144 385 385 WRESTLING TOURN. CROSS COUNTRY REGIONALS 4,664 3,675 (989)

MICHAEL CABLE FUND 1,752 1,752 1,752

VOLLEYBALL DISTRICT 2,330 1,870 (460)

ANIMECLUB 86 87 67 106 106

ART CLUB 371 260 140 (250) 241 241

ARCHERY CLUB 6,292 11,667 12,299 (45) 5,615 5,615 BETA CLUB 2,471 1,164 813 (100) 2,722 2,722

CHESS CLUB 172 1,714 1,482 38 442 442

ROBOTICS 4,826 1,775 3,051 3,051

DRAMA CLUB 1,594 5,694 5,762 1,526 1,526

FBLA 539 457 (80) 2 2

FCCLA II 6,498 4,176 (49) 2,284 2,284

FFA 9,333 52,427 48,564 690 13,886 13,886

See Notes to Fin:mci.tl Statements 83

DAVIESS COUNTY SCHOOL DISTRICI'


DAVIESS COUNTY HIGH SCI IOOL


---Due to

Cash Cash Accounts Accounts Student Groups June 30, 2018 Receipts Disbursements Transfers June 30, 2019 Receivable Jnvento1y Payable June 30, 2019

FRENCH CLUB 94 94 94 CEC 2,001 3,246 3,004 (132) 2, 111 2,111 FUTURE EDUC A TORS 7 7 7 IIABIT AT HELPERS 62 1,335 585 52 864 864 KEY CLUB 332 3,684 2,378 (610) 1,028 1,028 JR CLASSICAL LEAGUE 262 1,162 1,130 (24) 270 270 LIFESAVERS CLUB 44 44 44 NATIONAL HONOR SOCIETY 2,589 2,973 2,846 165 2,881 2,881 PEP CLUB 2,405 3,216 1,996 (1,440} 2, 185 2,185 QUIZ BOWL RECYCLE CLUB 237 237 237 SPANISH CLUB 349 716 518 (40) 507 507 SPANISH NAT HONOR SOCIETY 1,536 380 296 40 1,660 1,660 STUDENT COUNCIL 667 641 633 (41) 634 634 YOUNG DEMOCRATS 83 83 83 STLP 610 147 371 500 886 886 TEENAGE REPUBLICANS 379 130 509 509 YCLUB 1,877 36,780 36,899 1,758 1,758 WISE GUYS 120 120 120 STOP THE TEARS 236 236 236 AG MECHANJCS 3,120 7,606 4,486 AG DEPT 159 5,006 4,999 152 152 BUSINESS EDUCATION DEPT 1,655 1,226 1,009 1,438 1,438 MULTIMEDIA PUBLISHING 2,088 1,424 1,418 2,094 2,094 VISUAL FINE ARTS 2,707 20 13,449 11,605 883 883 GUIDANCE 2,896 43,844 43,795 2,945 2,945 HEALTH/P.E. 34 9,519 376 (2,693) 6,484 6,484 FFL & WEIGHT ROOMS 470 520 458 408 408 HORTICULTURE 5,788 5,958 8,677 761 3,830 3,830 FAMILY & CONSUMER SCI 62 80 2,288 2,271 125 125 LIBERAL ARTS ENG LISI I 261 311 597 37 12 12 LIBRARY 596 5 25 576 576 LIBRARY LOWES GRANT 3 (3) SCIENCE DEPT 2, 183 5 5,926 5,467 1,729 1,729 MATH DEPT 1,121 4JO 148 1,383 1,383 GILBREATH MD 162 446 482 (16) 110 I JO GILBREATH GRANT 602 460 515 16 563 563 JRROTC UNIT SUPPORT MAINT 1,049 1,315 1,099 1,265 1,265 JRROTC BOOSTERS 4,006 14,700 13,583 (6JO) 4,513 4,513 ALLEN MMD I 433 391 43 43 SPECIAL ED 42 42 42 ACADEMIC TEAM 748 4,385 3,637

Sci! Notes to Financial Statements R4

Cash June 30, 2018

BAND BOOSTERS 62 BAND WINTERGUARD 33 BIG RED MACHINE 879 INDOOR WINDS-DCPS 80 INDOOR PERCUSSION 63 DRAMA/SPEECH 2,187 DRAMA MUSIC AL 511 GRAD/SR. ACTIVITIES 2,496 CHAMBER CHOIR ORCHESTRA PROM 16,123 CATW 364 RENAISSANCE REWARDS 2,071 FCS BUSINESS 2,012 T-SHIRTS/DC PRINTING 3,058 PERFORM ARTS TRIP YEARBOOK-ECHOES 6,766 FULKERSON SCI IOLARSHIP 500 ROBIN SWEENEY SCHOLARSHIP 5,273 JOYCE ASKINS MEM. SCHOLAR 4,650 CONTINGENCY FUND 74,010 PETTY CASH 100 ATHLETIC CASI-I BOXES 3,000 DISTRICT ACTIVITY FUNDS

$ 404,938

DAVIESS COUNTY SCHOOL DISTRICI'

STATEMENT OF SCI IOOL ACTIVITY FUND RECEIPTS, DISBURSEMENTS, AND DUE TO

Receipts

143,191 19,286

44,165 18,705 !0,719 14,640

375 17,265

1,913 13,609 12,699

665 6,437

15,454

23,990

!00 3,000

50,540

$ 1,495,611 $

DAVIESS COUNTY HIGII SCIIOOL

Y car Ended June 30, 2019

Disbursements Transfers

126,086 (16,952) 25,381 6,062

34,222 (3,563) 19,429 661 !0,573 (405) 13,371 572 10,278 9,250 17,668 1,230 2,778 1,500

12,638 (1,229) 13,026

701 7,669 510

31,636 16,423

25,357 30 500 500

500 (400)

100 3,000

50,550 10

1,428,763 $ $

Sec Notes to Financial Statements

85

Cash June 30, 2019

215

879 6,460

1,928 2,352 1,843

827 635

15,865 37

2,035 1,290 3,299

5,429 500

5,273 3,750

74,0!0 100

3,000

471,786

Accounts Receivable

$

Due to Accounts Student Groups

Inventory Payable June 30, 2019

215

879 6,460

1,928 2,352 1,843

827 635

15,865 37

2,035 1,290 3,299

5,429 500

5,273 3,750

74,010 !00

3,000

505 $ 879 $ 4,724 $ 468,446


SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS

Year End June 30. 2019

Pass-Through CFDA Entity Identifying Fund Project Federal Expenditures

Grantor I Program Title Number Number Number Number Exeenditures to Subrecieients

U.S. DeQartment of Agriculnire Passed through Kentucky Department of Agriculture:

Food Donation 10.550 057502-15 51 NIA s 488,239 s

Passed through Kentucky Department of Education: Child and Adult Care Food Program 10.558 7790021-17 SI NA Child and Adult Care Food Program 10.558 7800016-17 51 NA 13,744

13,744 Child Nutrition Cluster:

School Breakfast Program 10.553 7760005-15 51 N'A 1,500,761 National School Lunch Program 10.555 7750002-15 51 N'A 3,028,943 Sununer Food Service Program for Children 10.559 7740023-15 51 2098 299,517

4,829.221

Total U.S. Department of Agriculture s 5,331,204 s

U.S. DeQartment of Defense Direct Program:

ROTC 12.000 504E 2 504E $ 128,889 s

Total U. S. Department of Defense s 128,889 s

U. S. DeQartment of Education Passed through Kentucky Department of Education:

Title I Grants to Local Educational Agencies: Title I - Local Educational Agencies 84.0lOA 3100002-16 2 310C s 4,001 s Title I - Parent Involvement 84.0lOA 3100002-16 2 310CM 202 Title 1 - Local Educational Agencies 84.0lOA 3100002-I 7 2 310D 254,515 Title 1 - Parent Involvement 84.0lOA 3100002-17 2 310DM 8,687 Title I - Local Educational Agencies 84.0lOA 3100002-18 2 310E 1.585,084 Title 1 - Parent Involvement 84.0lOA 3100002-18 2 310EM 12,459 Title 1 - Part D, Subpart 2 84.0lOA 3100102-17 2 314D 520 Title 1 - Part D, Subpart 2 84.0lOA 3100102-18 2 314E 73,278

1.938,746

Migrant Education - State Grant Program 84.01 lA 3110002-17 2 311D 110,706 3,481 Migrant Education - State Grant Program 84.01 lA 3110002-18 2 31 lE 83,280

193,986 3,481 Special Education Cluster:

Special Education - Grants to States: IDEA, Part B 84.027A 3810002-17 2 337D 514,490 IDEA, Part B 84.027A 3810002-18 2 337E 1,444,713

1.959,203 Special Education - Preschool Grants:

IDEA Preschool 84.173A 3800002-17 2 343D 3,545 IDEA Preschool 84.173A 3800002-18 2 343E 80,498

84,043

2,043,246

Career and Tecluiical Education - Basic Grants to States: Perkins • Part C (Carry-over) 84.048 3710002-18 2 348DA 3,087 Perkins - Part C 84.048 3710002-18 2 348E 80,769

83 ,856

English Language Acquisition Grants: Title Ill Limited English Proficiency 84.365A 3300002-17 2 345D 19.955 Title Ill Immigrant 84.365A 3300002- 17 2 345DI 606

20.561

86


SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS, CONTINUED

Granter I Program Title

U. S. Department of Education. Continued Passed through Kentucky Department of Education, Continued:

Improving Teacher Quality State Grants: Title II Title II Title II

Student Support and Academic Enrichment Grant: Title IV, Part A

Passed through Kentucky Department of Juvenile Justice: Title I Part D Subpart I

Total U. S. Department of Education

U.S. Department of Health and Human Services


Pass-Through CFDA Entity Identifying

Number Number

84.367A 84.367A 84.367A

84.424A 84.424A

84.013

3230002-16 3230002-17 3230002-18

3420002-17 3420002-18

313D 84.013 313E

Passed through Kentucky Cabinet for Health and Family Services: Child Care and Development Block Grant 93.575

Passed through Catholic Charities of Louisville. KY: Refugee School Impact Refugee School Impact

Total U.S. Department of Health and Human Services

Total Federal Awards

Notes to Schedule of Expenditures offederal Awards

Note A: Basis of Presentation

93.566 93.566

420D 420E

Fund Project Federal Number Number Expenditures

2 2 2

2 2

2 2

52

2 2

401C 401D 401E

552D 552E

313D 313E

NA

420D 420E

s

s

5

s

2,183 188,265 107.588 298,036

45,199 51,482 96,681

452 23,618 24,070

4.699.182

46,536

13,000 2,106

15,106

61.642

10,220.917

Expenditures to Subrecipients

s 3.481

s

s

s 3,481

The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of the Daviess County School District (District) under programs of the federal government for the year ended June 30, 2019. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrati,•e Requirements, Cost Principles, and Audit Requirements for Federal Awards (Unifonn Guidance). Because the Schedule presents only a selected portion of the operations of the District, it is not intended to, and does not, present the financial position, changes in net assets or cash flows of the District.

Note B: Surrunary of Significant Accounting Policies

Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Unifonn Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Note C: Indirect Cost Rate

The District has elected not to use the 10% de minimus indirect cost rate as allowed under the Uniform Guidance.

Note D: Nonmonetary assistance for the Food Distribution Program is reported in the Schedule at the fair value of the commodities received.

87

~Riney Hancock CPAs · · · · · · · · · · · · · · · · · · · · · · · · · · · · WJ PSC

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS



We have audited, in accordance with the auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund infonnation of the Daviess County School District (District) as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the District's basic financial statements and have issued our report thereon dated October 4, 2019.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the 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 perfonning their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

88 www.rineyhancock.com - info @ rineyhancock.com . .

2900 Veach Road, Suite 2 - Owensboro, Kentucky 42303 - 270-926-4540 - Fax : 270-926-1494

P.O. Box 255 - Henderson, Kentucky 42419-0255 - 270-827-5828 - Fax : 270-830- 7500

313 Southeast First Street - Evansville, Indiana 47713 - 812-423-0300 - Fax: 812-423-6282

A member of Alli11ial Global -A11 association of legally imlepentlent firms

Daviess County School District - 2

Internal Control Over Financial Reporting, Continued

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 the District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the detennination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

In addition, the results of our tests disclosed no material instances of noncompliance with specific statutes or regulations identified in the Kentucky Public School Districts' Audit Contract and Requirements prescribed by the Kentucky State Committee for School District Audits.

We noted certain matters other than significant deficiencies and material weaknesses that we reported to management of the District in a separate letter dated October 4, 2019.

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 entity'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 entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.


89

~Riney Hancock CPAs · · · · · · · · · · · · · · · · · · t.W PSC

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL

CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE



Report on Compliance for Each Major Federal Program

We have audited Daviess County School District's (District) compliance with the types of compliance requirements described in the 0MB Compliance Supplement that could have a direct and material effect on each of the District's major federal programs for the year ended June 30, 2019. The District's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

Management is responsible for compliance with federal statues, regulations, contracts, and the tenns and conditions of its federal awards applicable to its federal programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of the 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 the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the 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 a legal determination of the District's compliance.

90 . . . . . . . www . rineyhancock.com - info @ rineyhancock.com ........ .

2900 Veach Road, Suite 2 - Owensboro, Kentucky 42303 - 270-926-4540 - Fax: 270-926-1494

P.O. Box 255 - Henderson, Kentucky 42419-0255 - 270-827-5828 - Fax: 270-830-7500

313 Southeast First Street - Evansville, Indiana 47713 - 812-423-0300 - Fax : 812-423-6282

A member of Allinial Global - An association of legally i11depe11de11t firms

Daviess County School District - 2

Opinion on Each Major Federal Program

In our opinion, the 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, 2019.

Report on Internal Control Over Compliance

Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and perfonning our audit of compliance, we considered the District's internal control over compliance with the types ofrequirements that could have a direct and material effect on each major federal program to detennine 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 the Unifonn Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the 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 perfonning their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a defo;:iency, 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 ofinternal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.


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SCHEDULE OF FINDINGS AND QUESTIONED COSTS


A. Summary of Auditor's Results

1. The auditor's report expresses an unmodified op1mon on whether the financial statements of the Daviess County School District (District) were prepared in accordance with GAAP.

2. No significant deficiencies relating to the audit of the financial statements are reported in the Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Perfonned in Accordance with Government Auditing Standards. No material weaknesses were reported.

3. No instances of noncompliance material to the financial statements of the Dishict, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit.

4. No significant deficiencies in internal control over major federal award programs were reported in the Independent Auditor's Report on Compliance For Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance. No material weaknesses were reported.

5. The auditor's report on compliance for the major federal award programs for the District expresses an unmodified opinion on all major federal programs.

6. The audit did not disclose any findings that are required to be reported in accordance with 2 CFR section 200.516(a).

7. The programs tested as major programs were:

Child Nutrition Cluster:

10.553 - School Breakfast Program 10.555 - National School Lunch Program 10.559 - Summer Food Service Program for Children

8. The threshold used for distinguishing between Type A and B programs was $750,000.

9. The District was determined to be a low-risk auditee.

B. Findings - Financial Statements Audit

None

C. Findings and Questioned Costs - Major Federal Award Programs Audit

None

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Daviess County Public Schools

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS


No audit findings were reported in the schedule of findings and questioned costs for the year ended June 30, 2018.

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Superintendent - J. Matthew Robbins Daviess County Board of Education

Dr. Tom Payne Frank G. Riney III Dale Stewart Todd Anderson James Morgan 1622 Southeastern Parkway Owensboro KY 42303

www.dcps.org phone: 270-852-7000 fax: 270-852-7030 [email protected]

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DAVIESS COUNTY SCHOOL DISTRICT - Kentucky

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