The following document was not prepared by the Office of the State Auditor, but was prepared by and submitted to the Office of the State Auditor by a private CPA firm. The document was placed on this web page as it was submitted. The Office of the State Auditor assumes no responsibility for its content or for any errors located in the document. Any questions of accuracy or authenticity concerning this document should be submitted to the CPA firm that prepared the document. The name and address of the CPA firm appears in the document.
Transcript
The following document was not prepared by the Office of the State Auditor, but was prepared by and submitted to the Office of the State Auditor by a private CPA firm. The document was placed on this web page as it was submitted. The Office of the State Auditor assumes no responsibility for its content or for any errors located in the document. Any questions of accuracy or authenticity concerning this document should be submitted to the CPA firm that prepared the document. The name and address of the CPA firm appears in the document.
Coffeeville School District
Audited Financial StatementsFor the Year Ended June 30, 2013
Fortenberry & Ballard, PCCertified Public Accountants
1
Coffeeville School DistrictTABLE OF CONTENTS
PAGE #
INDEPENDENT AUDITOR’S REPORT ON THE BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 4
OTHER INFORMATIONStatement of Revenues, Expenditures and Changes in Fund Balances - General Fund, Last Four Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Funds, Last Four Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
REPORTS ON INTERNAL CONTROL AND COMPLIANCEIndependent 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 . . . . . . . . . . . . 62Independent Auditor’s Report on Compliance for Each Major Federal Program; Report On Internal Control Over Compliance; Required by OMB Circular A-133 . . . . . . . . . . . . . 64
INDEPENDENT AUDITOR'S REPORT ON THE BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION
Superintendent and School BoardCoffeeville School District
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, eachmajor fund, and the aggregate remaining fund information of the Coffeeville School District asof and for the year ended June 30, 2013, and the related notes to the financial statements, whichcollectively comprise the Coffeeville School District’s basic financial statements as listed in thetable of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in the United States of America;this includes the design, implementation, and maintenance of internal control relevant to thepreparation 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. Weconducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the entity’s preparation and fair presentation of thefinancial 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 internalcontrol. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.
1929 Spillway Road, Suite BBrandon, Mississippi 39047
Telephone 601-992-5292 Fax 601-992-20334
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,the respective financial position of the governmental activities, each major fund, and theaggregate remaining fund information of the Coffeeville School District, as of June 30, 2013,and the respective changes in financial position thereof for the year then ended in accordancewith accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that themanagement’s discussion and analysis and budgetary comparison information on pages 8 to 18and 47 to 54 be presented to supplement the basic financial statements. Such information,although not a part of the basic financial statements, is required by the GovernmentalAccounting Standards Board, who considers it to be an essential part of financial reporting forplacing the basic financial statements in an appropriate operational, economic, or historicalcontext. We have applied certain limited procedures to the required supplementary informationin accordance with auditing standards generally accepted in the United States of America, whichconsisted of inquiries of management about the methods of preparing the information andcomparing the information for consistency with management’s responses to our inquiries, thebasic financial statements, and other knowledge we obtained during our audit of the basicfinancial statements. We do not express an opinion or provide any assurance on the informationbecause the limited procedures do not provide us with sufficient evidence to express an opinionor provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the Coffeeville School District's financial statements. The accompanyingSchedule of Expenditures of Federal Awards, as required by the Office of Management andBudget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations(Circular A-133), the Schedule of Instructional, Administrative and Other Expenditures forGovernmental Funds, and the other information section, which includes the Statement ofRevenues, Expenditures and Changes in Fund Balances - General Fund, Last Four Years and theStatement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Funds,Last Four Years are presented for purposes of additional analysis and are not a required part ofthe basic financial statements.
The accompanying Schedule of Expenditures of Federal Awards, as required by the Office ofManagement and Budget Circular A-133, Audits of States, Local Governments, and Non-ProfitOrganizations (Circular A-133) and the Schedule of Instructional, Administrative and OtherExpenditures for Governmental Funds are the responsibility of management and were derivedfrom and relate directly to the underlying accounting and other records used to prepare the basicfinancial statements. Such information has been subjected to the auditing procedures applied inthe audit of the basic financial statements and certain additional procedures, including comparingand reconciling such information directly to the underlying accounting and other records used to
5
prepare the financial statements or to the financial statements themselves, and other additionalprocedures in accordance with auditing standards generally accepted in the United States ofAmerica. In our opinion, the information is fairly stated in all material respects in relation to thebasic financial statements as a whole.
The other information section, which includes the Statement of Revenues, Expenditures andChanges in Fund Balances - General Fund, Last Four Years and the Statement of Revenues,Expenditures and Changes in Fund Balances - All Governmental Funds, Last Four Years has notbeen subjected to the auditing procedures applied in the audit of the basic financial statementsand, accordingly, we do not express an opinion or provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report datedNovember 11, 2013, on our consideration of the Coffeeville School District's internal controlover 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 todescribe the scope of our testing of internal control over financial reporting and compliance andthe results of that testing, and not to provide an opinion on internal control over financialreporting or on compliance. That report is an integral part of an audit performed in accordancewith Government Auditing Standards in considering Coffeeville School District’s internalcontrol over financial reporting and compliance.
Fortenberry & Ballard, PC Certified Public AccountantsNovember 11, 2013
6
japonte
Placed Image
MANAGEMENT’S DISCUSSION AND ANALYSIS
7
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
The following discussion and analysis of Coffeeville School District’s financial performanceprovides an overview of the School District’s financial activities for the year ended June 30, 2013. The intent of this discussion and analysis is to look at the School District’s performance as a whole. Readers are encouraged to review the financial statements and the notes to the financial statementsto enhance their understanding of the School District’s financial performance.
FINANCIAL HIGHLIGHTS
P Total net position for 2013 decreased $109,029, including a prior period adjustment of($65,951), which represents 2% decrease from fiscal year 2012. Total net position for2012 increased $496,325, including a prior period adjustment of ($61,540), whichrepresents a 12% increase from fiscal year 2011.
P General revenues amounted to $4,538,800 and $4,775,475, or 70% and 71% of allrevenues for fiscal years 2013 and 2012, respectively. Program specific revenues in theform of charges for services and grants and contributions accounted for $1,967,826, or30% of total revenues for 2013 and $1,919,272, or 29% of total revenues for 2012.
P The District had $6,549,704 and $6,136,882 in expenses for fiscal years 2013 and 2012;only $1,967,826 for 2013 and $1,919,272 for 2012 of these expenses were offset byprogram specific charges for services, grants and contributions. General revenues of$4,538,800 for 2013 were not adequate to provide for these programs. However, $4,775,475 for 2012 were adequate to provide for these programs.
P Among the major funds, the General Fund had $4,237,732 in revenues and $4,268,681 inexpenditures for 2013, and $4,266,090 in revenues and $4,069,760 in expenditures for2012. The General Fund’s fund balance decreased by $63,439 from 2012 to 2013, andincreased by $26,961 from 2010 to 2012.
P Capital assets, net of accumulated depreciation, increased by $1,004,217 for 2013 andincreased by $82,881 for 2012. The increase for 2013 was due to the additions to theconstruction in progress, mobile equipment and furniture equipment.
P Long-term debt decreased by $86,000 for 2013 and decreased by $74,000 for 2012. Thisdecrease for 2013 was due primarily to the principal payments made on outstanding long-term debt. In addition, the liability for compensated absences increased by $1,000 for2013 and decreased by $1,000 for 2012.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to the District’s basic financial statements,which include government-wide financial statements, fund financial statements, and notes to thefinancial statements. This report also contains required supplementary information,supplementary information, and other information.
8
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
Government-wide Financial Statements
The government-wide financial statements are designed to provide the reader with a broadoverview of the District’s finances. These statements consist of the Statement of Net Positionand the Statement of Activities, which are prepared using the flow of economic resourcesmeasurement focus and the accrual basis of accounting. The current year’s revenues andexpenses are taken into account regardless of when cash is received or paid.
The Statement of Net Position presents information on all the District’s nonfiduciary assets andliabilities, with the differences between the two reported as “net position.” Over time, increasesor decreases in the District’s net position may serve as a useful indicator of whether its financialposition is improving or deteriorating.
The Statement of Activities presents information showing how the District’s net positionchanged during the most recent fiscal year. All changes in net position are reported as soon asthe underlying event giving rise to the change occurs, regardless of the timing of related cashflows. Thus, revenues and expenses are reported in this statement for some items that will onlyresult in cash flows in future fiscal periods.
The government-wide financial statements outline functions of the District that are principallysupported by property taxes and intergovernmental revenues (governmental activities). Thegovernmental activities of the District include instruction, support services, non-instructional,sixteenth section and interest on long-term liabilities.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that havebeen segregated for specific activities or objectives. The District uses fund accounting to ensureand demonstrate compliance with finance-related legal requirements. All of the funds of theDistrict can be divided into two categories: governmental funds and fiduciary funds.
Governmental funds - Most of the District’s general activities are reported in itsgovernmental funds. Governmental funds are used to account for essentially the samefunctions reported as governmental activities in the government-wide financialstatements. However, governmental funds are accounted for using the modified accrualbasis of accounting and the flow of current financial resources measurement focus. Theapproach focuses on near-term inflows and outflows of spendable resources, as well asbalances of spendable resources available at year end. The governmental fund statementsprovide a detailed view of the District’s near term financing requirements.
9
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
Because the focus of governmental funds is narrower than that of the government-widefinancial statements, it is useful to compare the information presented for governmentalfunds with similar information presented for governmental activities in the government-wide financial statements. By doing so, the reader may gain a better understanding of thelong-term impact of the District’s near term financing decisions. The governmentalfunds Balance Sheet is reconciled to the Statement of Net Position, and the governmentalfunds Statement of Revenues, Expenditures, and Changes in Fund Balances is reconciledto the Statement of Activities to facilitate this comparison between governmental fundsand governmental activities.
The District maintains individual governmental funds in accordance with the FinancialAccounting Manual for Mississippi Public School Districts. Information is presentedseparately in the governmental funds Balance Sheet and in the governmental fundsStatement of Revenues, Expenditures, and Changes in Fund Balances for all major funds. All non-major funds are combined together and presented in these reports as othergovernmental funds.
Fiduciary funds - Fiduciary funds are used to account for resources held for the benefitof parties outside the District. Fiduciary funds are not reflected in the government-widefinancial statements because resources of those funds are not available to support theDistrict’s own programs. These funds are reported using the accrual basis of accounting. The school district is responsible for ensuring that the assets reported in these funds areused for their intended purpose.
Reconciliation of Government-wide and Fund Financial Statements
The financial statements include two schedules that reconcile the amounts reported on thegovernmental funds financial statements (modified accrual basis of accounting) withgovernment-wide financial statements (accrual basis of accounting). The following summarizesthe major differences between the two statements:
Capital assets used in governmental activities are not reported on governmental fundsfinancial statements.
Capital outlay spending results in capital assets on government-wide financial statements,but is reported as expenditures on the governmental funds financial statements.
Bond and note proceeds result in liabilities on government-wide financial statements, butare recorded as other financing sources on the governmental funds financial statements.
Certain other outflows represent either increases or decreases in liabilities on thegovernment-wide financial statements, but are reported as expenditures on thegovernmental funds financial statements.
10
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
Notes to the financial statements
The notes provide additional information that is essential to a full understanding of the dataprovided in the government-wide and fund financial statements. The notes to the financialstatements can be found immediately following the basic financial statements.
Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presentsbudgetary comparison schedules as required supplementary information. The District adopts anannual operating budget for all governmental funds. A budgetary comparison schedule has beenprovided for the General Fund and each additional major special revenue fund as required by theGovernmental Accounting Standards Board.
Supplementary Information
Additionally, a Schedule of Expenditures of Federal Awards as required by OMB Circular A-133 and a Schedule of Instructional, Administrative and Other Expenditures for governmentalfunds can be found in this report.
Other Information
Although not a required part of the basic financial statements, the Statement of Revenues,Expenditures and Changes in Fund Balances - General Fund, Last Four Years and the Statementof Revenues, Expenditures and Changes in Fund Balances - All Governmental Funds, Last FourYears, is presented for purposes of additional analysis as required by the Mississippi Departmentof Education.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net position
Net position may serve over time as a useful indicator of the District’s financial position. Assetsexceeded liabilities by $4,373,236 as of June 30, 2013.
The District’s financial position is a product of several financial transactions including the netresult of activities, the acquisition and payment of debt, the acquisition and disposal of capitalassets and the depreciation of capital assets.
Table 1 presents a summary of the District’s net position at June 30, 2013 and June 30, 2012.
11
Coffeeville School DistrictManagement’s Discussion and Analysis
Net investment in capital assets 1,660,973 570,756 191%
Restricted 2,418,138 3,552,000 (32)%
Unrestricted 294,125 359,509 (18)%
Total net position $ 4,373,236 4,482,265 (2)%
The following are significant current year transactions that have had an impact on the Statementof Net Position:
# Increase in net capital assets in the amount of $1,004,217.
# The principal retirement of $86,000 of long-term debt.
Changes in net position
The District’s total revenues for the fiscal years ended June 30, 2013 and June 30, 2012 were$6,506,626 and $6,694,747, respectively. The total cost of all programs and services was$6,549,704 for 2013 and $6,136,882 for 2012.
Table 2 presents a summary of the changes in net position for the fiscal years ended June 30,2013 and June 30, 2012.
12
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
Table 2Changes in Net Position
Year Ended June 30, 2013
Year EndedJune 30, 2012
PercentageChange
Revenues:
Program revenues:
Charges for services $ 202,143 149,716 35%
Operating grants and contributions 1,747,095 1,750,968 0%
Capital grants and contributions 18,588 18,588 0%
Total program revenues 1,967,826 1,919,272 3%
General revenues:
Property taxes 1,183,582 1,215,974 (3)%
Grants and contributions not restricted 3,101,795 3,159,502 (2)%
Interest on long-term liabilities 1,114 7,914 (86)%
Total expenses 6,549,704 6,136,882 7%
Increase (Decrease) in net position (43,078) 557,865 (108)%
Net Position, July 1, as previously reported 4,482,265 3,985,940 12%
Prior period adjustments (65,951) (61,540) (7)%
Net Position, July 1, as restated 4,416,314 3,924,400 13%
Net Position, June 30 $ 4,373,236 4,482,265 (2)%
13
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
Governmental activities
The following table presents the cost of five major District functional activities: instruction,support services, non-instructional, sixteenth section and interest on long-term liabilities. The tablealso shows each functional activity’s net cost (total cost less charges for services generated by theactivities and intergovernmental aid provided for specific programs). The net cost presents thefinancial burden that was placed on the State and District’s taxpayers by each of these functions.
Table 3Net Cost of Governmental Activities
Total Expenses
2013 2012
Percentage
Change
Instruction $ 3,534,113 3,132,949 13%
Support services 2,473,592 2,461,763 0%
Non-instructional 498,992 524,491 (5)%
Sixteenth section 41,893 9,765 329%
Interest on long-term liabilities 1,114 7,914 (86)%
Total expenses $ 6,549,704 6,136,882 7%
14
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
Net (Expense) Revenue
2013 2012Percentage
Change
Instruction $ (2,690,017) (2,384,543) 13%
Support services (1,898,767) (1,889,922) 0%
Non-instructional 36,615 31,401 17%
Sixteenth section (28,595) 33,368 (186)%
Interest on long-term liabilities (1,114) (7,914) (86)%
Total net (expense) revenue $ (4,581,878) (4,217,610) 9%
P Net cost of governmental activities ($4,581,878 for 2013 and $4,217,610 for 2012) wasfinanced by general revenue, which is primarily made up of property taxes ($1,183,582 for2013 and $1,215,974 for 2012) and state and federal revenues ($3,101,795 for 2013 and$3,159,502 for 2012). In addition, there was $137,701 and $281,464 in Sixteenth Sectionsources for 2013 and 2012, respectively.
# Investment earnings amounted to $88,486 for 2013 and $92,280 for 2012.
15
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS
As noted earlier, the District uses fund accounting to ensure and demonstrate compliance withfinance-related legal requirements.
Governmental funds. The focus of the District’s governmental funds is to provide information oncurrent inflows, outflows and balances of spendable resources. Such information is useful inassessing the District’s financing requirements. In particular, unassigned fund balance may serveas a useful measure of the District’s net resources available for spending at the end of the fiscalyear.
The financial performance of the District as a whole is reflected in its governmental funds. As theDistrict completed the year, its governmental funds reported a combined fund balance of$2,777,162, a decrease of $1,198,131, which includes an increase in inventory of $1,911. $318,327,or 11% of the fund balance is unassigned, which represents the residual classification for thegeneral fund’s fund balance that has not been assigned to other funds and that has not beenrestricted, committed, or assigned to specific purposes within the general fund. The remaining fundbalance of $2,458,835 or 89% is either nonspendable, restricted, committed or assigned to indicatethat it is not available for spending except only for the purposes to which it is restricted, committedor assigned.
The General Fund is the principal operating fund of the District. The decrease in fund balance inthe General Fund for the fiscal year was $63,439. The fund balance of Other Governmental Fundsshowed an increase in the amount of $42,922, which includes an increase in inventory of $1,911.The increase (decrease) in the fund balances for the other major funds were as follows:
Major Fund Increase (Decrease)
Title I Fund no increase or decrease
IDEA/EHA Part B Fund no increase or decrease
Sixteenth Section Interest Fund $ (19,892)
Upward Bound Fund no increase or decrease
QSCB Renovations Fund $ (1,157,722)
BUDGETARY HIGHLIGHTS
Over the course of the year, the District revised the annual operating budget. Budget revisions weremade to address and correct the original budgets to reflect more accurately the sources and uses offunding for the school district.
16
Coffeeville School DistrictManagement’s Discussion and Analysis
For the Year Ended June 30, 2013
A schedule showing the original and final budget amounts compared to the District’s actualfinancial activity for the General Fund and major special revenue funds is provided in this report asrequired supplementary information.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. As of June 30, 2013, the District’s total capital assets were $5,891,841, includingland, school buildings, building improvements, buses, other school vehicles and furniture andequipment. This amount represents an increase of $825,101 from 2012. Total accumulateddepreciation as of June 30, 2013, was $2,305,868 and total depreciation expense for the year was$145,758, resulting in total net capital assets of $3,585,973.
Table 4Capital Assets, Net of Accumulated Depreciation
June 30, 2013 June 30, 2012Percentage
Change
Land $ 30,503 30,503 0%
Construction in progress 0 243,072 (100)%
Buildings 3,135,132 1,820,120 72%
Building improvements 40,746 42,598 (4)%
Mobile equipment 248,093 312,093 (21)%Furniture and equipment 131,499 133,370 (1)%
Total $ 3,585,973 2,581,756 39%
Additional information on the District’s capital assets can be found in Note 5 included in thisreport.
Debt Administration. At June 30, 2013, the District had $1,991,000 in outstanding long-termdebt, of which $104,000 is due within one year. The liability for compensated absences increased$1,000 from the prior year.
The District maintains an AA bond rating.
17
Coffeeville School DistrictManagement’s Discussion and Analysis
Additional information on the District’s long-term debt can be found in Note 6 included in thisreport.
CURRENT ISSUES
The Coffeeville School District is financially stable. The District is proud of its community supportof its public schools.
The District has committed itself to financial excellence for many years. The District’s system offinancial planning, budgeting and internal financial controls is well regarded. The District plans tocontinue its sound fiscal management to meet the challenges of the future.
The District actively pursues grant funding to supplement the local, state and federal revenue.
Enrollment for the 2012-2013 school year decreased by 6% with 580 students from the prior year.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
If you have questions about this report, contact the Superintendent’s Office of the CoffeevilleSchool District, 16849 Okahoma Street, Coffeeville, MS 38922.
18
FINANCIAL STATEMENTS
19
Statement of Net Position Exhibit AJune 30, 2013
GovernmentalActivities
AssetsCash and cash equivalents $ 2,157,617 Due from other governments 338,724 Other receivables, net 17,713 Inventories 17,709 Prepaid items 2,603 Deferred debt issuance costs 6,930 Restricted assets 351,982 Capital assets, non-depreciable:
Land 30,503 Capital assets, net of accumulated depreciation:
Buildings 3,135,132 Building improvements 40,746 Mobile equipment 248,093 Furniture and equipment 131,499
Total Assets 6,479,251
LiabilitiesAccounts payable and accrued liabilities 109,187 Interest payable on long-term liabilities 5,828 Long-term liabilities, due within one year
Capital related liabilities 104,000 Long-term liabilities, due beyond one year
Capital related liabilities 1,821,000 Non-capital related liabilities 66,000
Total Liabilities 2,106,015
Net PositionNet Investment in capital assets 1,660,973 Restricted for:
Expendable:School-based activities 1,857,918 Debt service 439,829 Capital improvements 10,789 Forestry improvements 45,615 Unemployment benefits 14,871 Sixteenth section 102
Non-Expendable:Sixteenth section 49,014
Unrestricted 294,125 Total Net Position $ 4,373,236
COFFEEVILLE SCHOOL DISTRICT
The notes to the financial statements are an integral part of this statement.20
Statement of Activities Exhibit BFor the Year Ended June 30, 2013
Net (Expense)Revenue and
Changes in NetPosition
Operating CapitalCharges for Grants and Grants and Governmental
General purpose levies 1,104,789 Debt purpose levies 78,793
Unrestricted grants and contributions:State 3,023,089 Federal 78,706
Unrestricted investment earnings 88,486 Sixteenth section sources 137,701 Other 27,236
Total General Revenues 4,538,800
Change in Net Position (43,078)
Net Position - Beginning, as previously reported 4,482,265 Prior Period Adjustments (65,951) Net Position - Beginning, as restated 4,416,314 Net Position - Ending $ 4,373,236
Program Revenues
COFFEEVILLE SCHOOL DISTRICT
The notes to the financial statements are an integral part of this statement. 21
Bal
ance
Sh
eet
Exh
ibit
CJu
ne
30, 2
013
IDE
A/E
HA
S
ixte
enth
Sec
tion
Upw
ard
QS
CB
Oth
erT
otal
Gen
eral
Titl
e I
Par
t BIn
tere
stB
ound
Ren
ovat
ions
Gov
ernm
enta
lG
over
nmen
tal
Fun
dF
und
Fun
dF
und
Fun
dF
und
Fun
dsF
unds
Ass
ets
Cas
h an
d ca
sh e
quiv
alen
ts
$34
5,73
6
1,
565,
416
10,7
89
35
7,29
1
2,
279,
232
In
vest
men
ts23
0,36
8
23
0,36
8
D
ue fr
om o
ther
gov
ernm
ents
43
,216
11
9,96
8
30
,076
61,7
60
83
,704
338,
724
Oth
er r
ecei
vabl
es, n
et9,
662
8,
051
17
,713
Due
from
oth
er fu
nds
250
166,
446
2,
778
16
9,47
4
In
vent
orie
s-
17,7
09
17
,709
Pre
paid
item
s2,
603
-
2,60
3
Tot
al a
sset
s$
401,
467
119,
968
30,0
76
1,
731,
862
61,7
60
10
,789
699,
901
3,05
5,82
3
Lia
bili
ties
an
d F
un
d B
alan
ces
Lia
bili
ties
:A
ccou
nts
paya
ble
and
accr
ued
liabi
litie
s$
48,2
72
10,1
03
1,
621
5,
000
37
,325
6,86
6
109,
187
Due
to o
ther
fund
s -
109,
865
28,4
55
24
,435
6,71
9
169,
474
Tot
al L
iabi
litie
s48
,272
11
9,96
8
30
,076
5,00
0
61,7
60
-
13,5
85
27
8,66
1
Fu
nd
Bal
ance
s:N
on
spen
dab
le:
Per
man
ent f
und
purp
oses
49,0
14
49
,014
Inve
ntor
y17
,709
17,7
09
P
repa
id it
ems
2,60
3
2,60
3
Res
tric
ted
:D
ebt s
ervi
ce
445,
657
445,
657
Ca p
ital p
roje
cts
10,7
89
10
,789
For
estr
y im
prov
emen
ts p
urpo
ses
45,6
15
45
,615
G
rant
act
iviti
es9,
076
9,
076
U
nem
ploy
men
t ben
efits
14,8
71
14
,871
Six
teen
th s
ectio
n1,
726,
862
1,72
6,86
2
Foo
d se
rvic
e84
,891
84,8
91
C
om
mit
ted
:
Deb
t pay
men
ts -
QS
CB
19,3
81
19
,381
Ass
ign
ed:
Act
ivit y
fund
s32
,265
32
,265
Per
man
ent f
und
purp
oses
102
102
Un
assi
gn
ed31
8,32
7
31
8,32
7
T
otal
Fun
d B
alan
ces
35
3,19
5
-
-
1,
726,
862
-
10
,789
686,
316
2,77
7,16
2
Tot
al L
iabi
litie
s an
d F
und
Bal
ance
s$
401,
467
119,
968
30,0
76
1,
731,
862
61,7
60
10
,789
699,
901
3,05
5,82
3
Maj
or F
unds
Go
vern
men
tal F
un
ds
CO
FF
EE
VIL
LE
SC
HO
OL
DIS
TR
ICT
The notes to the financial statemen
ts are an integral part of this statemen
t.
22
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Exhibit C-1June 30, 2013
Total fund balances for governmental funds $ 2,777,162
1. Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds:
Land $ 30,503 Buildings 4,460,307 Building improvements 46,302 Mobile equipment 881,266 Furniture and equipment 473,463 Accumulated depreciation (2,305,868) 3,585,973
2. Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds: Limited obligation refunding bonds (675,000) Qualified school construction bonds (1,250,000) Compensated absences (66,000) Accrued interest payable (5,828)
Unamortized bond issuance costs 6,930 (1,989,898)
3. Rounding difference (1)
Net position of governmental activities $ 4,373,236
Amounts reported for governmental activities in the statement of net position are different because:
COFFEEVILLE SCHOOL DISTRICTGovernmental Funds
The notes to the financial statements are an integral part of this statement. 23
Sta
tem
ent
of
Rev
enu
es, E
xpen
dit
ure
s an
d C
han
ges
in F
un
d B
alan
ces
Exh
ibit
DF
or
the
Yea
r E
nd
ed J
un
e 30
, 201
3
IDE
A/E
HA
S
ixte
enth
Sec
tion
Upw
ard
QS
CB
Oth
erT
otal
Gen
eral
Titl
e I
Par
t BIn
tere
stB
ound
Ren
ovat
ions
Gov
ernm
enta
lG
over
nmen
tal
Fun
dF
und
Fun
dF
und
Fun
dF
und
Fun
dsF
unds
Rev
enu
es:
Loca
l sou
rces
$1,
260,
329
15
4
1,
969
3,17
6
21
9,04
3
1,
484,
671
S
tate
sou
rces
2,91
3,65
3
277,
075
3,19
0,72
8
Fed
eral
sou
rces
63,7
50
65
2,04
0
157,
010
234,
878
14,9
56
554,
116
1,67
6,75
0
Six
teen
th s
ectio
n so
urce
s13
0,10
8
24
,370
15
4,47
8
T
otal
Rev
enue
s4,
237,
732
65
2,04
0
157,
164
130,
108
236,
847
18,1
32
1,07
4,60
4
6,50
6,62
7
Exp
end
itu
res:
Inst
ruct
ion
2,41
4,98
2
305,
878
56
,716
78
,263
18
,067
55
1,08
8
3,
424,
994
S
u ppo
rt s
ervi
ces
1,85
3,69
9
278,
696
97
,926
15
7,58
4
39
,044
2,
426,
949
N
onin
stru
ctio
nal s
ervi
ces
51,7
45
1,
000
433,
582
486,
327
Six
teen
th s
ectio
n41
,893
41
,893
F
acili
ties
acqu
isiti
on a
nd c
onst
ruct
ion
1,15
7,78
7
1,15
7,78
7
Deb
t ser
vice
:P
rinci
pal
86,0
00
86,0
00
Inte
rest
-
O
the r
1,00
0
1,00
0
T
otal
Ex p
endi
ture
s4,
268,
681
63
6,31
9
154,
642
-
236,
847
1,17
5,85
4
1,15
2,60
7
7,62
4,95
0
Exc
ess
(Def
icie
ncy)
of R
even
ues
over
(un
der)
Exp
endi
ture
s(3
0,94
9)
15
,721
2,52
2
130,
108
-
(1
,157
,722
)
(78,
003)
(1,1
18,3
23)
Oth
er F
inan
cin
g S
ou
rces
(U
ses)
:O
pera
ting
tran
sfer
s in
16
8,49
3
-
300,
282
468,
775
Ope
ratin
g tr
ansf
ers
out
(200
,983
)
(15,
721)
(2,5
22)
(1
50,0
00)
(99,
549)
(468
,775
)
Oth
er fi
nanc
ing
uses
(81,
719)
(81,
719)
T
otal
Oth
er F
inan
cin g
Sou
rces
(U
ses)
(32,
490)
(15,
721)
(2,5
22)
(1
50,0
00)
-
-
119,
014
(81,
719)
Net
Cha
n ge
in F
und
Bal
ance
s(6
3,43
9)
-
-
(19,
892)
-
(1,1
57,7
22)
41
,011
(1
,200
,042
)
Fun
d B
alan
ces:
Jul y
1, 2
012,
as
prev
ious
ly r
epor
ted
416,
634
1,74
6,75
4
1,16
8,51
1
643,
394
3,97
5,29
3
I
ncre
ase
in in
vent
ory
-
-
-
-
-
-
1,91
1
1,91
1
June
30,
201
3$
353,
195
-
-
1,
726,
862
-
10,7
89
686,
316
2,77
7,16
2
Maj
or F
unds
CO
FF
EE
VIL
LE
SC
HO
OL
DIS
TR
ICT
Go
vern
men
tal F
un
ds
The notes to the financial statemen
ts are an integral part of this statemen
t.
24
Reconciliation of the Governmental Funds Statement of Revenues, Exhibit D-1Expenditures and Changes in Fund Balances to the Statement of ActivitiesFor the Year Ended June 30, 2013
Net change in fund balances - total governmental funds $ (1,200,042)
1. Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital outlay $ 1,229,505 Depreciation expense (145,758) 1,083,747
2. In the statement of activities, only the gain/loss on the sale of assets is reported, while in the governmental funds, the proceeds from the sale increases financial resources. Thus, the change in net position differs from the change in fund balance by the cost of the assets sold. (13,579)
3. 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 transation, however, has any effect on net position. Also, the governmental funds report the effect of issuance costs, premiums, discounts and the difference between the carrying value of refunded debt and the acquisition of refunded debt when the debt is first issued. These amounts are deferred and amortized in the statements of activities:
Payment of debt principal $ 86,000 Accrued interest payable 831 86,831
4. Some items reported in the statement of activities do not provide or require the use of current financial resources and therefore are not reported as revenues/expenditures in the governmental funds. These activities include:
Change in compensated absences $ (1,000) Change in inventory 1,911 Amortization of bond issuance costs (945) (34)
5. Rounding difference (1)
Change in net position of governmental activities $ (43,078)
Amounts reported for governmental activities in the statement of activities are
COFFEEVILLE SCHOOL DISTRICTGovernmental Funds
The notes to the financial statements are an integral part of this statement. 25
Statement of Fiduciary Assets and Liabilities Exhibit EJune 30, 2013
AgencyFunds
AssetsCash and cash equivalents $ 257,646
Total Assets $ 257,646
LiabilitiesAccounts payable and accrued liabilities $ 251,027 Due to student clubs 5,087
Other payables 1,532 Total Liabilities $ 257,646
COFFEEVILLE SCHOOL DISTRICTFiduciary Funds
The notes to the financial statements are an integral part of this statement.26
Coffeeville School District
Notes to the Financial StatementsJune 30, 2013
27
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
Note 1 - Summary of Significant Accounting Policies
The accompanying financial statements of the school district have been prepared inconformity with generally accepted accounting principles (GAAP) as prescribed by theGovernmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The mostsignificant of the school district’s accounting policies are described below.
A. Financial Reporting Entity
As defined by accounting principles generally accepted in the United States ofAmerica, the school district is considered a "primary government." The schooldistrict is governed by a five member board to which each member is elected by thecitizens of each defined county district.
For financial reporting purposes, Coffeeville School District has included all fundsand organizations. The District has also considered all potential component units forwhich it is financially accountable and other organizations for which the nature andsignificance of their relationship with the District are such that exclusion wouldcause the District’s financial statements to be misleading or incomplete. TheGovernmental Accounting Standards Board has set forth criteria to be considered indetermining financial accountability. These criteria include appointing a votingmajority of an organization’s governing body and (1) the ability of the District toimpose its will on that organization or (2) the potential for the organization toprovide specific benefits to or impose specific financial burdens on the District.
B. Government-wide and Fund Financial Statements
Government-wide Financial Statements - The Statement of Net Position and theStatement of Activities report information on all of the non-fiduciary activities of theDistrict. For the most part, the effect of inter-fund activity has been removed fromthese statements. Governmental activities, which normally are supported by tax andintergovernmental revenues, are reported separately from business type activities,which rely to a significant extent on fees and charges for support.
The Statement of Net Position presents the District’s non-fiduciary assets andliabilities, with the difference reported as net position. Net position is reported inthree categories:
1. Net investment in capital assets consists of capital assets, net of accumulateddepreciation, and reduced by outstanding balances of bonds, notes and otherdebt attributable to the acquisition, construction or improvement of thoseassets.
28
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
2. Restricted net position results when constraints placed on net position use areeither externally imposed or imposed by law through constitutionalprovisions or enabling legislation.
3. Unrestricted net position consist of net position not meeting the definition ofthe two preceding categories. Unrestricted net position often has constraintson resources imposed by management which can be removed or modified.
The Statement of Activities demonstrates the degree to which the direct expenses ofa given function, or segment, are offset by program revenues. Direct expenses arethose clearly identifiable with a specific function. Program revenues include 1)charges to customers or applicants who purchase, use, or directly benefit fromgoods, services, or privileges provided by a given function and 2) grants,contributions and interest restricted to meeting the operational or capitalrequirements of a particular function. Property taxes and other items not includedamong program revenues are reported instead as general revenues.
Fund Financial Statements - Separate financial statements are provided forgovernmental and fiduciary funds, even though the latter are excluded from thegovernment-wide financial statements. Major individual governmental funds arereported in separate columns in the fund financial statements. All remaininggovernmental funds are aggregated and reported as other governmental funds.
The school district reports the following major governmental funds:
General Fund - This is the school district’s primary operating fund. The general fundis used to account for and report all financial resources not accounted for andreported in another fund.
Title I Fund - This is a special revenue fund that accounts for the proceeds of Title Ifunds from the federal government, that are programmatically and legally restrictedto expenditures for specified purposes.
IDEA/EHA Part B Fund - This fund accounts for the resources from the grants tostates to assist them in providing a free appropriate public education to all childrenwith disabilities.
Sixteenth Section Interest Fund - This is a special revenue fund that accounts for proceeds of timber sales, forest products and rental revenues on 16th section landleases that are legally restricted to expenditures for specified purposes. Upward Bound Fund - This is a special revenue fund that helps high school studentsfrom low-income families to succeed in their precollege performance and ultimatelyin their higher education pursuits. The program is intended to increase the rate at
29
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
which participants complete secondary education and enroll in and graduate frominstitutions of postsecondary education.
QSCB Renovations Fund - This is a capital project fund that handles theexpenditures from the Qualified School Construction Bonds Fund.
All other governmental funds not meeting the criteria established for major funds arepresented in the other governmental column of the fund financial statements.
The District’s fiduciary funds include the following:
Payroll Clearing Fund - This fund serves as a clearing fund for payroll typetransactions.
Student Club Fund - This fund accounts for the monies raised through school clubactivities and fund raisers and club related expenditures approved by the individualclubs.
Accounts Payable Clearing - This fund is used as a clearing account for non-payrolltransactions.
Additionally, the school district reports the following fund types:
GOVERNMENTAL FUNDS
Special Revenue Funds - Special Revenue Funds are used to account for and reportthe proceeds of specific revenue sources that are restricted or committed toexpenditure for specified purposes other than debt service or capital projects.
Capital Projects Funds - Capital Projects Funds are used to account for and reportfinancial resources that are restricted, committed, or assigned to expenditure forcapital outlays, including the acquisition or construction of capital facilities andother capital assets.
Debt Service Funds - Debt Service Funds are used to account for and report financialresources that are restricted, committed, or assigned to expenditure for principal andinterest.
Permanent Funds - Permanent Funds are used to account for and report resourcesthat are restricted to the extent that only earnings, and not the principal, may be usedfor purposes that support the district’s programs.
30
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
FIDUCIARY FUNDS
Agency Funds - Agency Funds are used to report resources held by the district in apurely custodial capacity (assets equal liabilities) and do not involve measurement ofresults of operations.
D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
In the government-wide Statement of Net Position and Statement of Activities,governmental activities are presented using the economic resources measurementfocus and the accrual basis of accounting, as are the Fiduciary Fund financialstatements. Revenues are recorded when earned, and expenses are recorded when aliability is incurred or economic asset used, regardless of the timing of the relatedcash flows. Grants and similar items are recognized as revenue as soon as alleligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financialresources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Measurable means knowing or being able to reasonably estimate the amount. Revenues are considered to be available when they are collectible within the currentperiod or soon enough thereafter to pay liabilities of the current period. For thispurpose, the government considers revenues to be available if they are collectedwithin 60 days after year end. Expenditures (including capital outlay) are recordedwhen the related fund liability is incurred, as under accrual accounting. However,debt service expenditures, as well as expenditures related to compensated absencesand judgments, are recorded only when payment is due.
Federal grants and assistance awards made on the basis of entitlement periods arerecorded as receivables and revenues when entitlement occurs. Federalreimbursement type grants are recorded as revenues when the related expendituresare recognized. Use of grant resources is conditioned upon compliance with termsof the grant agreements and applicable federal regulations, which include subjectinggrants to financial and compliance audits.
Property taxes, intergovernmental revenues (shared revenues, grants andreimbursements from other governments) and interest associated with the currentfiscal period are all considered to be susceptible to accrual.
Ad valorem property taxes are levied by the governing authority of the county onbehalf of the school district based upon an order adopted by the school board of theschool district requesting an ad valorem tax effort in dollars. Since the taxes are notlevied and collected by the school district, the revenues to be generated by the
31
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
annual levies are not recognized until the taxes are actually collected by the taxlevying authority.
Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reportedas other financing sources.
Under the terms of grant agreements, the District funds certain programs by acombination of specific cost-reimbursement grants and general revenues. Thus,when program expenses are incurred, there is both restricted and unrestricted netposition available to finance the program. It is the District’s policy to first applycost-reimbursement grant resources to such programs and then general revenues.
The effect of inter-fund activity has been eliminated from the government-widestatements.
Revenues from the Mississippi Adequate Education Program are appropriated on afiscal year basis and are recorded at the time the revenues are received from the Stateof Mississippi.
The account classifications used in the financial statements conform to the broadclassifications recommended in Governmental Accounting, Auditing, and FinancialReporting, issued in 2012 by the Government Finance Officers Association and areconsistent with the broad classifications recommended in Financial Accounting forLocal and State School Systems, 2003, issued by the U.S. Department of Education.
E. Encumbrances
An encumbrance system is not maintained to account for commitments resultingfrom approved purchase orders, work orders and contracts.
F. Assets, liabilities, and net position/fund balances
1. Cash, Cash equivalents and Investments
Cash and cash equivalents
The district’s cash and cash equivalents are considered to be cash on hand,demand deposits, and short-term investments with original maturities of threemonths or less from the date of acquisition. The school district depositsexcess funds in the financial institutions selected by the school board. Statestatutes specify how these depositories are to be selected.
32
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
Investments
The school district can invest its excess funds, as permitted by Section 29-3-113, Miss. Code Ann. (1972), in interest-bearing deposits or otherobligations of the types described in Section 27-105-33, Miss. Code Ann.(1972), or in any other type investment in which any other agency,instrumentality or subdivision of the State of Mississippi may invest, exceptthat 100% of said funds are authorized to be so invested.
For accounting purposes, certificates of deposit are classified as investmentsif they have an original maturity greater than three months when acquired.
Investments for the district are reported at fair market value.
2. Receivables and payables
Activities between funds that are representative of lending/borrowingarrangements outstanding at the end of the fiscal year are referred to as either“due to/from other funds” (i.e., the current portion of inter-fund loans) or“advances to/from other funds” (i.e., the non-current portion of inter-fundloans). All other outstanding balances between funds are reported as “dueto/from other funds.”
Advances between funds, as reported in the fund financial statements, areoffset by a fund balance reserve account in applicable governmental funds toindicate that they are not available for appropriation and are not expendableavailable financial resources.
3. Due from Other Governments
Due from other governments represents amounts due from the State ofMississippi and various grants and reimbursements from other governments.
4. Inventories and Prepaid Items
Donated commodities are received from the USDA and are valued at USDAcost. Other inventories are valued at cost (calculated on the first-in, first-outbasis). The costs of governmental fund type inventories are reported asexpenditures when purchased.
Certain payments to vendors reflect costs applicable to future accountingperiods and are recorded as prepaid items in both the government-wide andgovernmental fund financial statements.
33
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
5. Restricted Assets
Certain resources set aside for repayment of debt are classified as restrictedassets on the Statement of Net Position because their use is limited byapplicable debt statutes, e.g. Qualified Zone Academy Bond sinking funds. Also, the nonexpendable portion of the Permanent Fund, if applicable, isclassified as restricted assets because the 16th Section Principal fund is notavailable for use by the district except as provided for under state statute forloans from this fund.
6. Capital Assets
Capital assets include land, improvements to land, easements, water rights,timber rights, buildings, building improvements, vehicles, machinery,equipment, works of art and historical treasures, infrastructure, and all othertangible or intangible assets that are used in operations and that have initialuseful lives extending beyond a single reporting period. Capital assets arereported in the applicable governmental or business type activities columnsin the government-wide Statement of Net Position. Capital assets arerecorded at historical cost or estimated historical cost based on appraisals ordeflated current replacement cost. Donated capital assets are recorded atestimated fair market value at the date of donation. The costs of normalmaintenance and repair that do not add to the value of the asset or materiallyextend asset lives are not capitalized. Capital assets are defined by theDistrict as assets with an initial, individual cost in excess of the thresholds inthe table below.
Capital acquisition and construction are reflected as expenditures in theGovernmental Fund statements and the related assets are reported as capitalassets in the governmental activities column in the government-widefinancial statements.
Depreciation is calculated on the straight-line basis for all assets, except land.
The following schedule details the capitalization thresholds:
CapitalizationPolicy
Estimated Useful Life
Land $ 0 0Buildings 50,000 40 yearsBuilding Improvements 25,000 20 yearsImprovements other than Buildings 25,000 20 yearsMobile Equipment 5,000 5-10 yearsFurniture and Equipment 5,000 3-7 yearsLeased Property Under Capital Leases ‘* ‘*
34
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
( * ) The threshold amount will correspond with the amounts for the assetclassifications, as listed. See Note 5 for details.
7. Compensated Absences
Employees of the school district accumulate sick leave at a minimum amountas required by state law. A greater amount may be provided by schooldistrict policy provided that it does not exceed the provisions for leave asprovided in Sections 25-3-93 and 25-3-95. Some employees are allowedpersonal leave and/or vacation leave in accordance with school districtpolicy. The district pays for unused leave for employees as required bySection 37-7-307(5), Miss. Code Ann. (1972).
The liability for these compensated absences is recorded as a long-termliability in the government-wide statements. The current portion of thisliability is estimated based on historical trends. In the fund financialstatements, governmental funds report the liability for compensated absencesfrom expendable available financial resources only if the payable hasmatured, for example, an employee retires.
8. Long-term Liabilities, Deferred Debt Expense, and BondDiscounts/Premiums
In the government-wide financial statements, outstanding debt is reported asliabilities. Bond issue cost, bond discounts or premiums, and the differencebetween reacquisition price and the net carrying value of refunded debt arecapitalized and amortized over the terms of the respective bonds using amethod that approximates the effective interest method.
The governmental fund financial statements recognize the proceeds of debtand premiums as other financing sources of the current period. Issuancecosts are reported as expenditures. See Note 6 for details.
9. Fund Balances
Fund balance for governmental funds is reported in classifications thatcomprise a hierarchy based primarily on the extent to which the governmentis bound to honor constraints on the specific purposes for which amounts inthose funds can be spent.
Governmental fund balance is classified as nonspendable, restricted,committed, assigned or unassigned. Following are descriptions of fundclassifications used by the district:
35
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
Nonspendable fund balance includes items that cannot be spent. Thisincludes activity that is not in a spendable form (inventories, prepaidamounts, long-term portion of loans/notes receivable, or property held forresale unless the proceeds are restricted, committed, or assigned) and activitythat is legally or contractually required to remain intact, such as a principalbalance in a permanent fund.
Restricted fund balance includes amounts that have constraints placed uponthe use of the resources either by an external party or imposed by lawthrough a constitutional provision or enabling legislation.
Committed fund balance includes amounts that can be used only for thespecific purposes pursuant to constraints imposed by a formal action of theSchool Board, the District’s highest level of decision-making authority.
Assigned fund balance includes amounts that are constrained by the District’sintent to be used for a specific purpose, but are neither restricted norcommitted. For governmental funds, other than the general fund, this is theresidual amount within the fund that is not restricted or committed. Assignments of fund balance are created by the Superintendent and BusinessManager pursuant to authorization established by the policy adopted by theschool district.
Unassigned fund balance is the residual classification for the general fund. This classification represents fund balance that has not been assigned to otherfunds and that has not been restricted, committed, or assigned to specificpurposes within the general fund. The general fund should be the only fundthat reports a positive unassigned fund balance amount. In othergovernmental funds, it may be necessary to report a negative unassignedfund balance.
When an expenditure is incurred for purposes for which both restricted andunrestricted (committed, assigned, or unassigned) resources are available, itis the District’s general policy to use restricted resources first. Whenexpenditures are incurred for purposes for which unrestricted (committed,assigned and unassigned) resources are available, and amounts in any ofthese unrestricted classifications could be used, it is the District’s generalpolicy to spend committed resources first, followed by assigned amounts, andthen unassigned amounts.
It is the goal of the District to achieve and maintain an unassigned fundbalance in the general fund at fiscal year end of not less than 7% of generalrevenues. If the unassigned fund balance at fiscal year end falls below thegoal, the District shall develop a restoration plan to achieve and maintain theminimum fund balance.
36
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
Note 2 - Cash and Cash Equivalents and Investments
The district follows the practice of aggregating the cash assets of various funds to maximizecash management efficiency and returns. Restrictions on deposits and investments areimposed by statutes as follows:
Deposits. The school board must advertise and accept bids for depositories no less thanonce every three years as required by Section 37-7-333, Miss. Code Ann. (1972). Thecollateral pledged for the school district’s deposits in financial institutions is held in thename of the State Treasurer under a program established by the Mississippi StateLegislature and is governed by Section 27-105-5, Miss. Code Ann. (1972). Under thisprogram, the entity’s funds are protected through a collateral pool administered by the StateTreasurer. Financial institutions holding deposits of public funds must pledge securities ascollateral against those deposits. In the event of failure of a financial institution, securitiespledged by that institution would be liquidated by the State Treasurer to replace the publicdeposits not covered by the Federal Deposit Insurance Corporation.
Investments. Section 29-3-113 and 37-59-43, Miss. Code Ann. (1972), authorizes theschool board to invest excess funds in the types of investments authorized by Section 27-105-33 (d) and (e), Miss. Code Ann. (1972). This section permits the following types ofinvestments: (a) certificates of deposit or interest bearing accounts with qualified statedepositories; (b) direct United States Treasury obligations; (c) United States Governmentagency, United States Government instrumentality or United States Government sponsoredenterprise obligations, not to exceed fifty percent of all monies invested with maturities ofthirty days or longer; (d) direct security repurchase agreements and reverse direct securityrepurchase agreements of any federal book entry of only those securities enumerated in (b)and (c) above; (e) direct obligations issued by the United States of America that are deemedto include securities of, or other interests in, any open-end or closed-end management typeinvestment company or investment trust approved by the State Treasurer and the ExecutiveDirector of the Department of Finance and Administration, not to exceed twenty percent ofinvested excess funds. Investment income on bond funds (Capital Projects), bond sinkingfunds (Debt Service Funds) and sixteenth section principal funds (Permanent Funds) mustbe credited to those funds. Investment income of $100 or more of any fund must be creditedto that fund. Investment income of less than $100 can be credited to the General Fund.
Cash and Cash Equivalents
The carrying amount of the school district’s deposits with financial institutions reported inthe governmental funds and fiduciary funds was $2,279,232 and $257,646, respectively.
Custodial Credit Risk - Deposits. Custodial credit risk is defined as the risk that, in theevent of the failure of a financial institution, the district will not be able to recover depositsor collateral securities that are in the possession of an outside party. The district does nothave a deposit policy for custodial credit risk. However, the Mississippi State Treasurermanages that risk on behalf of the district. Deposits above FDIC coverage are collateralized
37
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
by the pledging financial institution’s trust department or agent in the name of theMississippi State Treasurer on behalf of the district. As of June 30, 2013, none of thedistrict’s bank balance of $2,592,567 was exposed to custodial credit risk.
Investments
As of June 30, 2013, the district had the following investments. The District has no internalinvestment pool.
Investment Type Rating Maturities in (years) Fair Value
Federal U. S. Treasury Cash Reserve Unrated less than one year $ 63,023 Federal U. S. Treasury Money Market Funds Unrated less than one year 167,345 Total $ 230,368
This amount is reflected as restricted assets on Exhibit A (see Note 4).
Interest Rate Risk. The district does not have a formal investment policy that limitsinvestment maturities as a means of managing its exposure to fair value losses arising fromincreasing interest rates.
Credit Risk. State law limits investments to those prescribed in Sections 27-105-33(d) and27-105-33(e), Miss. Code Ann. (1972). The district does not have a formal investmentpolicy that would further limit its investments choices or one that addresses credit risk.
Custodial Credit Risk - Investments. Custodial credit risk is defined as the risk that, in theevent of the failure of the counterparty, the district will not be able to recover the value ofits investments or collateral securities that are in the possession of an outside party. Thedistrict does not have a formal investment policy that addresses custodial credit risk.
Concentration of Credit Risk. Disclosures of investments by amount and issuer for anyissuer that represents five percent or more of total investments is required. This requirementdoes not apply to investments issued or explicitly guaranteed by the U.S. government,investments in mutual funds and external investment pools, and other pooled investments.
Note 3 - Interfund Receivables, Payables, and Transfers
The following is a summary of interfund transactions and balances:
38
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
A. Due From/To Other Funds
Receivable Fund Payable Fund Amount
General Fund Other Governmental Funds $ 250Sixteenth Section Interest Fund Title I Fund 109,865
Upward Bound Fund 24,435IDEA/EHA Part B Fund 28,455Other Governmental Funds 3,691
Other Governmental Funds Other Governmental Funds 2,778Total $ 169,474
The purpose of the inter-fund loans was to cover federal and state funds not received priorto year end and amounts due from and amounts due to agency funds. Payments are made ofamounts due between funds within three months.
B. Interfund Transfers
Transfers In Transfers Out Amount
General Fund Title I Fund $ 15,721IDEA/EHA Part B Fund 2,522Other Governmental Funds 250Sixteenth Section Interest Fund 150,000
Other Governmental Funds General Fund 200,983Other Governmental Funds 99,299
Total $ 468,775
The primary purpose of the inter-fund transfers was to transfer federal program indirect costand to close out federal program funds at fiscal year end. These transfers were consistentwith the activities of the fund making the transfer.
Note 4 - Restricted Assets
The restricted assets represent investment balance, totaling $63,023, of the MAEP LimitedObligation Bond Fund.
In addition, the restricted assets represent the cash and investment balance, totaling $72,498and $167,345, respectively, of the QSCB Debt Retirement Fund (4042) which is legallyrestricted and may not be used for purposes that support the district’s programs.
In addition, the restricted assets represent the cash balance, totaling $49,116 of the SixteenthSection Principal Fund (Permanent Fund) which is legally restricted and may not be usedfor purposes that support the district’s programs.
39
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
Note 5 - Capital Assets
The following is a summary of changes in capital assets for governmental activities:
Balance 7-1-2012 Additions Retirements
CompletedConstruction Adjustments
Balance 6-30-2013
Non-depreciable capital assets Land $ 30,503 30,503 Construction in progress 243,072 1,157,787 (1,391,062) (9,797) 0Total non-depreciable capital assets 273,575 1,157,787 0 (1,391,062) (9,797) 30,503
Depreciable capital assets: Buildings 3,069,245 1,391,062 4,460,307 Building improvements 46,302 46,302 Mobile equipment 947,428 40,873 107,035 881,266 Furniture and equipment 730,190 30,845 287,572 473,463
Total depreciable capital assets 4,793,165 71,718 394,607 1,391,062 0 5,861,338
Less accumulated depreciation for: Buildings 1,249,125 73,383 2,667 1,325,175 Building improvements 3,704 1,852 5,556 Mobile equipment 635,335 40,683 96,332 53,487 633,173 Furniture and equipment 596,820 29,840 284,696 341,964Total accumulated depreciation 2,484,984 145,758 381,028 0 56,154 2,305,868
Total depreciable capital assets, net 2,308,181 (74,040) 13,579 1,391,062 (56,154) 3,555,470
The following is a summary of changes in long-term liabilities and other obligations forgovernmental activities:
40
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
Amounts dueBalance Balance within one
7-1-2012 Additions Reductions 6-30-2013 year
A. Limited obligation refunding bonds payable $ 761,000 86,000 675,000 104,000B. Qualified school construction bonds payable 1,250,000 1,250,000C. Compensated absences payable 65,000 1,000 66,000
Total $ 2,076,000 1,000 86,000 1,991,000 104,000
A. Limited obligations refunding bonds payable
Limited obligation bonds are direct obligations and pledge the full faith and credit of theschool district. Limited obligation bonds currently outstanding is as follows:
Description
Interest Rate
Issue Date
Maturity Date
AmountIssued
AmountOutstanding
State Aid Capital ImprovementBonds, Refunding Series 2012 2.1% 10-18-11 02-01-18 $ 761,000 675,000
The following is a schedule by years of the total payments due on this debt:
This debt will be retired from the MAEP Bond Fund.
The state aid capital improvement bonds are secured by an irrevocable pledge of certainrevenues the district receives from the State of Mississippi pursuant to the MississippiAccountability and Adequate Education Program Act, Sections 37-151-1 through 37-151-7, Miss. Code Ann. (1972). The state aid capital improvement bonds are notincluded in the computation of the debt limit percentage.
B. Qualified school construction bonds payable
As more fully explained in Note 12, debt has been issued by the school district thatqualifies as Qualified School Construction bonds debt currently outstanding is as follows:
41
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
As more fully explained in Note 1(E)(7), compensated absences payable is adjusted on anannual basis as required by Section 37-7-307(5), Miss. Code Ann. (1972). Compensatedabsences will be paid from the fund from which the employees’ salaries were paid.
Note 7 - Prior Year Defeasance of Debt
In prior years, the Coffeeville School District defeased certain general obligation and other bonds by placing the proceeds of new bonds in an irrevocable trust to provide forall future debt service payments on the old bonds. Accordingly, the trust account assetsand liabilities for the defeased bonds were removed from the district’s financialstatements. On June 30, 2013, there were no defeased bonds.
Note 8 - Defined Benefit Pension Plan
Plan Description. The school district contributes to the Public Employees' RetirementSystem of Mississippi (PERS), a cost-sharing multiple-employer defined benefit pensionplan. PERS provides retirement and disability benefits, annual cost-of-livingadjustments, and death benefits to plan members and beneficiaries. Benefit provisionsare established by state law and may be amended only by the State of MississippiLegislature. PERS issues a publicly available financial report that includes financialstatements and required supplementary information. That report may be obtained bywriting to Public Employees' Retirement System of Mississippi, PERS Building,429 Mississippi Street, Jackson, MS 39201 or by calling (601) 359-3589 or 1-800-444-PERS.
Funding Policy. PERS members are required to contribute 9.00% of their annual coveredsalary, and the school district is required to contribute at an actuarially determined rate. The employer’s rate as of June 30, 2013 was 14.26% of annual covered payroll. Thecontribution requirements of PERS members and employers are established and may beamended only by the State of Mississippi Legislature. The school district's contributionsto PERS for the fiscal years ending June 30, 2013, 2012 and 2011 were $478,308,$421,912, and $414,764, respectively, which equaled the required contributions for eachyear.
Note 9 - Sixteenth Section Lands
Sixteenth section school lands, or lands granted in lieu thereof, constitute property held intrust for the benefit of the public schools. The school board, under the general
42
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
supervision of the Office of the Secretary of State, has control and jurisdiction of saidschool trust lands and all funds arising from any disposition thereof. It is the duty of theschool board to manage the school trust lands and all funds arising therefrom as trustproperty. Accordingly, the board shall assure that adequate compensation is received forall users of the trust lands, except for uses by the public schools. The following are thefuture rental payments to be made to the school district for the use of school trust lands. These future rental payments are from existing leases and do not anticipate renewals ornew leases.
Year Ending June 30 Amount
2014 $ 45,127
2015 21,127
2016 21,127
2017 17,327
2018 6,800
2019 - 2023 750
2024 - 2028 750
2029 - 2033 750
2034 - 2037 750
Total $ 114,508
Note 10 - Contingencies
Federal Grants - The school district has received federal grants for specific purposes that are subject to audit by the grantor agencies. Entitlements to these resources are generallyconditional upon compliance with the terms and conditions of the grant agreements and applicable federal regulations, including the expenditure of resources for allowablepurposes. Any disallowances resulting from the grantor audit may become a liability ofthe school district.
Litigation - The school district is party to legal proceedings, many of which occur in thenormal course of governmental operations. It is not possible at the present time toestimate the outcome or liability, if any, of the school district with respect to the variousproceedings. However, the school district’s legal counsel believes that ultimate liabilityresulting from these lawsuits will not have a material adverse effect on the financialcondition of the school district.
43
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
Note 11 - Risk Management
The school district is exposed to various risks of loss related to torts; theft of, damage toand destruction of assets; errors and omissions; injuries to employees; and naturaldisasters. Except as described below, the district carries commercial insurance for theserisks. Settled claims resulting from these insured risks have not exceeded commercialinsurance coverage in any of the past three fiscal years.
Participation in Public Entity Risk Pool
The school district is a member of the Mississippi School Boards Association Workers’Compensation Trust (MSBAWCT). The trust is a risk-sharing pool; such a pool isfrequently referred to as a self-insurance pool. The trust consists of approximately 90school districts and covers risks of loss arising from injuries to the member’s employees. The Mississippi Workers’ Compensation Commission requires that an indemnityagreement be executed by each member in a workers’ compensation self-insurance poolfor the purpose of jointly and severally binding the pool and each of the employerscomprising the group to meet the workers’ compensation obligations of each member. Each member of the MSBAWCT contributes quarterly to a fund held in trust by WellsFargo in Portland, Oregon. The funds in the trust account are used to pay any claim up to$750,000. For a claim exceeding $750,000, MSBAWCT has insurance which will paythe excess to the statutory amount required by the Mississippi Workers’ CompensationCommission Act. If total claims during a year were to deplete the trust account, then themember school districts would be required to pay for the deficiencies. The District hasnot had an additional assessment for excess losses incurred by the pool.
Note 12 - Qualified School Construction Bonds
Section 1521 of the American Recovery and Reinvestment Act (ARRA) of 2009 providesfor a source of capital at no or at nominal interest rates for costs incurred by certainpublic schools in connection with the construction, rehabilitation or repair of a publicschool facility or for the acquisition of land where a school will be built. Investorsreceive Federal income tax credits at prescribed tax credit rates in lieu of interest, whichessentially allows state and local governments to borrow without incurring interest costs. While Qualified School Construction Bonds (QSCBs) are intended to be interest free to aborrower, the ARRA legislation allows a lender to charge supplemental interest, and suchsupplemental interest is the responsibility of the school district.
When the stated interest rate on the QSCB results in interest payments that exceed thesupplemental interest payments discussed in the preceding paragraph, the school districtmay apply for a direct cash subsidy payment from the U. S. Treasury which is intended toreduce the stated interest rate to a nominal percentage. These subsidy payments do notinclude the amount of any supplemental interest paid on a QSCB.
44
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
The school district makes equal annual payments into a sinking fund which is used topayoff the bonds at termination. The current maturity limit of tax credit bonds is 17years, per the U. S. Treasury Department. Under this program, ten percent of theproceeds must be subject to a binding commitment to be spent within six months ofissuance and 100% must be spent within three years. Up to two percent of bond proceedscan be used to pay costs of issuance. Annual sinking fund deposit amounts are inclusiveof any interest earnings for the prior 12 months. The indicated deposit amount will bereduced by the amount of the prior 12 months’ interest earnings. The amount on depositat June 30, 2013 was $239,843. The amount accumulated in the sinking fund at the endof the fourteen-year period will be sufficient to retire the debt. The following schedulereports the annual deposits to be made to the sinking fund by the school district.
Year Ending June 30 Amount
2013 $ 83,000
2014 83,000
2015 83,000
2016 83,000
2017 83,000
2018 - 2022 416,000
2023 - 2026 336,000
Total $ 1,167,000
Note 13 - Prior Period Adjustments
A summary of significant Net Position/Fund Balance adjustments is as follows:
Exhibit B - Statement of Activities
Explanation Amount Adjustments were made to properly present capital assets. $ (65,951)
Note 14 - Subsequent Events
Events that occur after the Statement of Net Position date but before the financialstatements are available to be issued must be evaluated for recognition or disclosure. Theeffects of subsequent events that provide evidence about conditions that existed at theStatement of Net Position date are recognized in the accompanying financial statements.Subsequent events which provide evidence about conditions that existed after theStatement of Net Position date require disclosure in the accompanying notes.Management of the Coffeeville School District evaluated the activity of the district
45
Coffeeville School District
Notes to the Financial StatementsFor the Year Ended June 30, 2013
through the date the financial statements were available to be issued, and determined thatno subsequent events have occurred requiring disclosure in the notes to the financialstatement.
46
REQUIRED SUPPLEMENTARY INFORMATION
47
COFFEEVILLE SCHOOL DISTRICT Exhibit 1Budgetary Comparison Schedule General FundFor the Year Ended June 30, 2013
Actual Original FinalOriginal Final (GAAP Basis) to Final to Actual
Revenues: Local sources $ 1,251,838 1,381,622 1,260,329 129,784 (121,293) State sources 3,038,126 3,074,225 2,913,653 36,099 (160,572) Federal sources 139,347 139,347 63,750 0 (75,597) Total Revenues 4,429,311 4,595,194 4,237,732 165,883 (357,462)
Excess (Deficiency) of Revenues Over (Under) Expenditures 3,777 347 0 (3,430) (347)
Other Financing Sources (Uses): Operating transfers out (3,152) 0 0 3,152 0 Total Other Financing Sources (Uses) (3,152) 0 0 3,152 0
Net Change in Fund Balances 625 347 0 (278) (347)
Fund Balances: July 1, 2012 0 0 0 0 0 June 30, 2013 $ 625 347 0 (278) (347)
The notes to the required supplementary information are an integral part of this schedule.
VariancesPositive (Negative)
Budgeted Amounts
52
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
53
Coffeeville School District
Notes to the Required Supplementary InformationFor the Year Ended June 30, 2013
Budgetary Comparison Schedule
(1) Basis of Presentation
The Budgetary Comparison Schedules present the original legally adopted budget, thefinal legally adopted budget, the actual data on the GAAP basis, variances between theoriginal budget and the final budget, and variances between the final budget and theactual data.
(2) Budget Amendments and Revisions
The budget is adopted by the school board and filed with the taxing authority. Amendments can be made on the approval of the school board. By statute, final budgetrevisions must be approved on or before October 15. A budgetary comparison ispresented for the General Fund and each major Special Revenue Fund consistent withaccounting principles generally accepted in the United States of America.
54
SUPPLEMENTARY INFORMATION
55
Coffeeville School District Schedule 1Schedule of Expenditure of Federal AwardsFor the Year Ended June 30, 2013 Catalog of
FederalFEDERAL GRANTOR/ DomesticPASS-THROUGH GRANTOR/ Assistance FederalPROGRAM TITLE Number Expenditures
U. S. Department of Agriculture Passed-through the Mississippi Department of Education:Child Nutrition Cluster:
School Breakfast Program 10.553 $ 121,920National School Lunch Program 10.555 299,355Summer Food Service Program for Children 10.559 12,297 Total child nutrition cluster 433,572
Fresh Fruit and Vegetable Program 10.582 19,528Schools and Roads - Grants to States 10.665 14,961 Total passed-through Mississippi Department of Education 468,061
Total U. S. Department of Agriculture 468,061
Federal Communications CommissionAdministered through Universal Service Administrative Company:
The Schools and Libraries Program of the Universal Service Fund 32.xxx 36,651 Total Federal Communications Commission 36,651
U. S. Department of EducationPassed-through the Mississippi Department of Education:
Title I Grants to Local Educational Agencies 84.010 652,040Career and Technical Education - Basic Grants to States 84.048 10,864Improving Teacher Quality - State Grants 84.367 84,032 Subtotal 746,936
Special Education Cluster:Special Education - Grants to States 84.027 157,164Special Education - Preschool Grants 84.173 6,120 Total special education cluster 163,284 Total passed-through the Mississippi Department of Education 1,147,067
U.S. Department of Health and Human ServicesPassed-through the Mississippi Department of Education:
Medical Assistance Program 93.778 5,589 Total passed-through Mississippi Department of Education 5,589 Total U.S. Department of Health and Human Services 5,589
TOTAL FOR ALL FEDERAL AWARDS $ 1,657,368
Notes to Schedule1. This schedule was prepared using the same basis of accounting and significant accounting policies,
as applicable, used for the financial statements.2. The expenditure amounts include transfers out.3. The pass-through entities did not assign identifying numbers to the school district.
56
Coffeeville School District Schedule 2Schedule of Instructional, Administrative and Other Expenditures - Governmental FundsFor the Year Ended June 30, 2013
Salaries and fringe benefits $ 4,591,444 3,251,679 432,671 221,252 685,842 Other 3,033,506 448,195 94,904 6,091 2,484,316 Total $ 7,624,950 3,699,874 527,575 227,343 3,170,158
Total number of students * 580
Cost per student $ 13,146 6,379 909 392 5,466
For purposes of this schedule, the following columnar descriptions are applicable:
Instruction and other Student Instructional Expenditures - includes the activities dealing directly with the interaction between teachers and students. Included here are the activities of teachers, teachers aides or classroom assistants of any type. General Administration - includes expenditures for the following functions: Support Services - General Administration; Support Services - Business School Administration - includes expenditures for the following functions: Support Services - School Administration Other - includes all expenditure functions not included in Instruction or Administration categories
* includes the number of students reported on the ADA report submission for month 9, which is the final submission for the fiscal year
57
OTHER INFORMATION
58
COFFEEVILLE SCHOOL DISTRICTStatement of Revenues, Expenditures and Changes in Fund BalancesGeneral FundLast Four Years
Excess (Deficiency) of Revenues over (under) Expenditures (1,118,323) 398,043 (806,607) (129,637)
Other Financing Sources (Uses):Proceeds of bonds 1,250,000Proceeds of refunding bonds 752,180Sale of Transporation Equipment 1,411Other Financing Sources 21,712Operating transfers in 468,775 362,930 363,647 985,026Operating transfers out (468,775) (362,930) (363,647) (985,026)Other Financing Uses (81,719) (828,000)Total Other Financing Sources (Uses) (81,719) (75,820) 1,251,411 21,712
Net Change in Fund Balances (1,200,042) 322,223 444,804 (107,925)
Fund Balances:July 1, 3,975,293 3,654,419 3,213,930 3,322,022 Increase (Decrease) in inventory 1,911 (1,349) (4,315) (167)June 30 2,777,162$ 3,975,293$ 3,654,419$ 3,213,930$
*SOURCE - PRIOR YEAR AUDIT REPORTS
60
REPORTS ON INTERNAL CONTROL AND COMPLIANCE
61
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
Superintendent and School BoardCoffeeville School District
We have audited, in accordance with the auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in GovernmentAuditing Standards issued by the Comptroller General of the United States, the financialstatements of the governmental activities, each major fund, and the aggregate remaining fundinformation of Coffeeville School District, as of and for the year ended June 30, 2013, and therelated notes to the financial statements, which collectively comprise the Coffeeville SchoolDistrict’s basic financial statements, and have issued our report thereon dated November 11,2013.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the schooldistrict’s internal control over financial reporting (internal control) to determine the auditprocedures that are appropriate in the circumstances for the purpose of expressing our opinionson the financial statements, but not for the purpose of expressing an opinion on the effectivenessof the school district’s internal control. Accordingly, we do not express an opinion on theeffectiveness of the school district’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, misstatements on a timely basis. A material weakness is adeficiency, or combination of deficiencies, in internal control, such that there is a reasonablepossibility 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 acombination of deficiencies, in internal control that is less severe than a material weakness, yetimportant enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraphof this section and was not designed to identify all deficiencies in internal control that might bematerial weaknesses or significant deficiencies and therefore, material weaknesses or significantdeficiencies may exist that were not identified. Given these limitations, during our audit we didnot identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We did identify a certaindeficiency in internal control, described in the accompanying schedule of findings andquestioned costs that we consider to be a significant deficiency. [Finding 2013-1]
1929 Spillway Road, Suite BBrandon, Mississippi 39047
Telephone 601-992-5292 Fax 601-992-2033
62
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Coffeeville School District’sfinancial statements are free from material misstatement, we performed tests of its compliancewith certain provisions of laws, regulations, contracts, and grant agreements, noncompliancewith which could have a direct and material effect on the determination of financial statementamounts. However, providing an opinion on compliance with those provisions was not anobjective of our audit, and accordingly, we do not express such an opinion. The results of ourtests disclosed no instances of noncompliance or other matters that are required to be reportedunder Government Auditing Standards.
Coffeeville School District’s Response to Finding
The Coffeeville School District’s response to the finding identified in our audit is described inthe accompanying auditee’s corrective action plan. The Coffeeville School District’s responsewas not subjected to the auditing procedures applied in the audit of the financial statements and,accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness ofthe entity’s internal control or on compliance. This report is an integral part of an auditperformed in accordance with Government Auditing Standards in considering the entity’sinternal control and compliance. Accordingly, this communication is not suitable for any otherpurpose.
This report is intended solely for the information and use of management, the school board,others within the entity, and entities with accreditation overview, and federal awarding agencies,and pass-through entities and is not intended to be and should not be used by anyone other thanthese specified parties.
Fortenberry & Ballard, PC Certified Public AccountantsNovember 11, 2013
63
japonte
Placed Image
1929 Spillway Road, Suite BBrandon, Mississippi 39047
Telephone 601-992-5292 Fax 601-992-2033
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERALPROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; REQUIRED BY
OMB CIRCULAR A-133
Superintendent and School BoardCoffeeville School District
Report on Compliance for Each Major Federal Program
We have audited Coffeeville School District’s compliance with the types of compliancerequirements described in the OMB Circular A-133 Compliance Supplement that could have adirect and material effect on each of Coffeeville School District’s major federal program for theyear ended June 30, 2013. The Coffeeville School District’s major federal program is identifiedin the summary of the auditor’s results section of the accompanying schedule of findings andquestioned costs.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts,and grants applicable to its federal program.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for Coffeeville School District’s majorfederal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally acceptedin the United States of America; the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States; andOMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtainreasonable assurance about whether noncompliance with the types of compliance requirementsreferred to above that could have a direct and material effect on a major federal programoccurred. An audit includes examining, on a test basis, evidence about the school district'scompliance with those requirements and performing such other procedures as we considerednecessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for its majorfederal program. However, our audit does not provide a legal determination on the schooldistrict’s compliance.
64
Opinion on Each Major Federal Program
In our opinion, the Coffeeville School District complied, in all material respects, with the typesof compliance requirements referred to above that could have a direct and material effect on itsmajor federal program for the year ended June 30, 2013.
Report on Internal Control Over Compliance
Management of the Coffeeville School District is responsible for establishing and maintainingeffective internal control over compliance with the type of compliance requirements referred toabove. In planning and performing our audit of compliance, we considered Coffeeville SchoolDistrict’s internal control over compliance with the types of requirements that could have adirect and material effect on its major federal program to determine the auditing procedures thatare appropriate in the circumstances for the purpose of expressing an opinion on compliance forits major federal program and to test and report on internal control over compliance inaccordance with OMB Circular A-133, but not for the purpose of expressing an opinion on theeffectiveness of internal control over compliance. Accordingly, we do not express an opinion onthe effectiveness of the school district’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a controlover compliance does not allow management or employees, in the normal course of performingtheir assigned functions, to prevent, or detect and correct, noncompliance with a type ofcompliance requirement of a federal program on a timely basis. A material weakness in internalcontrol over compliance is a deficiency, or combination of deficiencies, in internal control overcompliance, such that there is a reasonable possibility that material noncompliance with a type ofcompliance requirement of a federal program will not be prevented, or detected and corrected, ona timely basis. A significant deficiency in internal control over compliance is a deficiency, or acombination of deficiencies, in internal control over compliance with a type of compliancerequirement of a federal program that is less severe than a material weakness in internal controlover compliance, yet important enough to merit attention by those charged with governance.
Our consideration of the internal control over compliance was for the limited purpose describedin the first paragraph of this section and was not designed to identify all deficiencies in internalcontrol over compliance that might be material weaknesses or significant deficiencies. We didnot identify any deficiencies in internal control over compliance that we consider to be materialweaknesses. 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 ofout testing of internal control over compliance and the results of that testing based on therequirements of OMB Circular A-133. Accordingly, this report is not suitable for any otherpurpose.
65
This report is intended solely for the information and use of management, the school board,others within the entity, entities with accreditation overview, and federal awarding agencies andpass-through entities and is not intended to be and should not be used by anyone other than thesespecified parties.
Fortenberry & Ballard, PC Certified Public AccountantsNovember 11, 2013
66
japonte
Placed Image
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH STATE LAWS AND REGULATIONS
67
1929 Spillway Road, Suite BBrandon, Mississippi 39047
Telephone 601-992-5292 Fax 601-992-2033
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITHSTATE LAWS AND REGULATIONS
Superintendent and School BoardCoffeeville School District
We have audited the financial statements of the governmental activities, each major fund, andthe aggregate remaining fund information of the Coffeeville School District as of and for theyear ended June 30, 2013, which collectively comprise Coffeeville School District’s basicfinancial statements and have issued our report thereon dated November 11, 2013. Weconducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.
Section 37-9-18(3)(a), Miss. Code Ann. (1972), states in part, “the auditor shall test to ensurethat the school district is complying with the requirements of Section 37-61-33(3)(a)(iii), Miss.Code Ann. (1972), relating to classroom supply funds.” As required by the state legalcompliance audit program prescribed by the Office of the State Auditor, we have also performedprocedures to test compliance with certain other state laws and regulations. However, providingan opinion on compliance with all state laws and regulations was not an objective of our auditand, accordingly, we do not express such an opinion.
The results of our procedures performed to test compliance with the requirements of Section 37-61-33(3)(a)(iii), Miss. Code Ann. (1972), disclosed no instances of noncompliance. The districtreported $4,365 of classroom supply funds carried over from previous years.
Section 37-9-18(3)(b), Miss. Code Ann. (1972), states in part, “the auditor shall test to ensurecorrect and appropriate coding at the function level. The audit must include a report showing thecorrect and appropriate functional level expenditure codes in expenditures by the schooldistrict.”
The results of our procedures performed to test compliance with the requirements of Section 37-9-18(3)(b), Miss. Code Ann. (1972), disclosed no instances of noncompliance related toincorrect or inappropriate functional level expenditure coding.
As required by the state legal compliance audit program prescribed by the Office of the StateAuditor, we have also performed procedures to test compliance with certain other state laws andregulations. However, providing an opinion on compliance with all state laws and regulationswas not an objective of our audit and, accordingly, we do not express such an opinion.
The results of procedures performed to test compliance with certain other state laws andregulations and our audit of the financial statements did not disclose any instances ofnoncompliance with other state laws and regulations.
68
This report is intended solely for the information and use of the school board and management,entities with accreditation overview, and federal awarding agencies, the Office of the StateAuditor and pass-through entities and is not intended to be and should not be used by anyoneother than these specified parties.
Fortenberry & Ballard, PC Certified Public AccountantsNovember 11, 2013
69
japonte
Placed Image
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
70
Coffeeville School District
Schedule of Findings and Questioned CostsFor the Year Ended June 30, 2013
Section I: Summary of Auditor’s Results
Financial Statements:
1.1. Type of auditor’s report issued: Unqualified.
2. Internal control over financial reporting:a. Material weakness(es) identified? No.
b. Significant deficiency(ies) identified? Yes.
3. Noncompliance material to financial statements noted? No.
Federal Awards:
4. Internal control over major programs:a. Material weakness(es) identified? No.b. Significant deficiency(ies) identified? None reported.
5. Type of auditor’s report issued on compliance for major programs: Unqualified.
6. Any audit findings disclosed that are required to be reported in accordance with Section510(a) of OMB Circular A-133? No.
7. Identification of major programs:
CFDA Numbers Name of Federal Program or Cluster
10.553, 10.555 & 10.559 Child Nutrition Cluster
8. Dollar threshold used to distinguish between type A and type B programs: $300,000.
9. Auditee qualified as low-risk auditee? Yes.
Section II: Financial Statement Findings
The results of our tests disclosed the following finding related to the financial statements that arerequired to be reported under Government Auditing Standards.
71
Significant Deficiency
Finding 2013-1:
Condition:The school district failed to properly record transactions in the general ledger.
Criteria:Management is responsible for establishing an internal control system that ensures strongfinancial accountability and safeguarding of assets.
Effect:1. Qualified School Construction Bonds cash was understated by $72,498. Auditoradjustments were proposed and performed to properly state account activity at year-end.
2. MAEP Retirement Fund investment was overstated by $181,312. Auditor adjustments wereproposed and performed to properly state account activity at year-end.
3. Qualified School Construction Bonds cash with fiscal agents was overstated by $181,312. Auditor adjustments were proposed and performed to properly state account activity at year-end.
4. In addition, we noted that the district did not include architecture fees and other itemsincluded in completed construction of a gym and central office building totaling $133,340 whichcaused assets to be understated. Auditor adjustments were proposed and performed to properlystate account activity at year-end.
Recommendation:Internal controls should be implemented to ensure the inclusion of all transactions and balancesthat impact the financial statements.
Section III: Findings and Questioned Costs for Federal Awards
The results of our tests did not disclose any findings and questioned costs related to the federalawards.
72
AUDITEE’S CORRECTIVE ACTION PLAN AND SUMMARY OF PRIOR FEDERALAUDIT FINDING
73
Coffeeville School District Office of the Superintendent
96 Mississippi Street Coffeeville, MS 38922
662-675-8941* fax 662-675-5004 Mr. Eddie Anderson, Superintendent Rita Lancaster, Business Manager
AUDITEE’S CORRECTIVE ACTION PLAN As required by Section ___.315(c) of OMB Circular A-133, the Coffeeville School District has prepared and hereby submits the following corrective action plan for the findings included in the Schedule of Findings and Questioned Costs for the year ended June 30, 2013: Findings Corrective Action Plan Details 2013-1 a. Name of Contact Person Responsible for Corrective Action Name: Rita Lancaster Phone Number: 662-675-8941 b. Corrective Action Planned: Internal controls will be implemented to ensure the inclusion of all transactions and balances that impact the financial statements. c. Anticipated Completion Date: June 30, 2014
74
Coffeeville School District16849 Okahoma StreetCoffeeville, MS 38922
Mr. Eddie Anderson - SuperintendentRita Lancaster - Business Manager
AUDITEE’S SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
As required by Section ____.315(b) of OMB Circular A-133, the Coffeeville School District hasprepared and hereby submits the following summary schedule of prior audit findings as of June 30, 2013:
