STATE OF MISSISSIPPI OFFICE OF THE STATE AUDITOR_part2 doc

8 SENATOBIA MUNICIPAL SCHOOL DISTRICT Exhibit B Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds For the Year Ended June 30, 1997 Fiduciary Governmental Fund Types Fund Type Total Special Capital Debt Expendable (Memorandum General Revenue Projects Service Trust Only) Revenues Local sources $ 1,276,778 191,656 13,367 144,202 1,635 1,627,638 State sources 4,112,657 420,488 215,000 4,748,145 Federal sources 3,406 1,026,190 1,029,596 Total Revenues 5,392,841 1,638,334 228,367 144,202 1,635 7,405,379 Expenditures Instruction 3,632,883 680,839 859 4,314,581 Support services: Students 203,040 98,431 301,471 Instructional staff 176,006 333,593 509,599 General administration 126,356 76,625 202,981 School administration 341,084 39,408 380,492 Business 95,999 95,999 Operation and maintenance of plant 474,286 28,645 37,876 540,807 Transportation 174,409 72,674 247,083 Central 6,436 321 6,757 Noninstructional services 53,833 364,759 335 418,927 Facilities acquisition and construction 70,824 4,637 702,461 777,922 Debt service: Principal 20,000 70,000 90,000 Interest 29,560 69,594 99,154 Other 816 1,486 2,302 Total Expenditures 5,405,532 1,699,932 740,337 141,080 1,194 7,988,075 Excess of Revenues Over (Under) Expenditures (12,691) (61,598) (511,970) 3,122 441 (582,696) Other Financing Sources (Uses) Proceeds of loans 800,000 800,000 Operating transfers in 41,191 50,563 91,754 Operating transfers out (84,162) (7,592) (91,754) Total Other Financing Sources (Uses) (42,971) 42,971 800,000 800,000 This is trial version www.adultpdf.com 9 Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses (55,662) (18,627) 288,030 3,122 441 217,304 Fund Balances July 1, 1996 1,000,911 234,011 40,128 31,181 1,306,231 June 30, 1997 $ 945,249 215,384 288,030 43,250 31,622 1,523,535 The notes to the financial statements are an integral part of this statement. This is trial version www.adultpdf.com 10 SENATOBIA MUNICIPAL SCHOOL DISTRICT Combined Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual All Governmental Fund Types For the Year Ended June 30, 1997 General Fund Special Revenue Funds Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues Local sources $ 1,300,787 1,276,778 (24,009) 191,656 191,656 State sources 4,087,327 4,112,657 25,330 420,488 420,488 Federal sources 3,406 3,406 1,026,190 1,026,190 Total Revenues 5,391,520 5,392,841 1,321 1,638,334 1,638,334 0 Expenditures Instruction 3,632,883 3,632,883 680,839 680,839 Support services: Students 203,040 203,040 98,431 98,431 Instructional staff 176,006 176,006 333,593 333,593 General administration 126,356 126,356 76,625 76,625 School administration 341,084 341,084 39,408 39,408 Business 95,999 95,999 Operation and maintenance of plant 474,286 474,286 28,645 28,645 Transportation 174,409 174,409 72,674 72,674 Central 6,436 6,436 321 321 Noninstructional services 53,833 53,833 364,759 364,759 Facilities acquisition and construction 70,824 70,824 4,637 4,637 Debt service: Principal 20,000 20,000 Interest 29,560 29,560 Other 816 816 Total Expenditures 5,405,532 5,405,532 0 1,699,932 1,699,932 0 Excess of Revenues Over (Under) Expenditures (12,691) (61,598) Other Financing Sources 41,191 41,191 50,563 50,563 Other Financing Uses (84,162) (84,162) (7,592) (7,592) Total Other Financing Sources (Uses) 0 (42,971) (42,971) 0 42,971 42,971 Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses (55,662) (18,627) Fund Balances July 1, 1996 1,000,911 234,011 June 30, 1997 $ 945,249 215,384 The notes to the financial statements are an integral part of this statement. 11 Exhibit C Capital Projects Funds Debt Service Funds Variance Variance Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) 13,367 13,367 144,202 144,202 215,000 215,000 228,367 228,367 0 144,202 144,202 0 37,876 37,876 702,461 702,461 70,000 70,000 69,594 69,594 1,486 1,486 740,337 740,337 0 141,080 141,080 0 (511,970) 3,122 800,000 800,000 0 800,000 800,000 0 0 0 288,030 3,122 0 40,128 288,030 43,250 SENATOBIA MUNICIPAL SCHOOL DISTRICT Notes to Financial Statements For the Year Ended June 30, 1997 12 (1) Summary of Significant Accounting Policies. A. Financial Reporting Entity. For financial reporting purposes, the reporting entity includes all funds that are covered by the oversight responsibility of the school district's governing board. As defined by generally accepted accounting principles, the school district is considered an "other stand-alone government." The school district is a related organization of, but not a component unit of, the city of Senatobia since the governing authorities of the municipality select a majority of the school district's board but do not have financial accountability for the school district. B. Financial Reporting. The accompanying financial statements are presented using the concepts of reporting promulgated in Statement 1 of the Governmental Accounting Standards Board. The general purpose financial statements show the basic financial statements of the school district by providing a combined overview of financial position and results of operations of the district. The total (memorandum only) columns in these statements are presented for overview information purposes and are not meant to present fairly the financial position and results of operations or consolidated financial information for the district as a whole in conformity with generally accepted accounting principles. C. Account Classifications. The account classifications used in the financial statements conform to the classifications prescribed in the Financial Accounting Manual for Mississippi Public School Districts issued by the Office of the State Auditor. The classifications in that manual are consistent with the broad classifications recommended in Financial Accounting for Local and State School Systems, 1990 issued by the U.S. Department of Education. D. Fund Accounting. The accounts of the school district are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures. School district resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped into generic fund types and broad fund categories as follows: GOVERNMENTAL FUNDS General Fund - The General Fund is the general operating fund of the district. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted for specific expenditure purposes. SENATOBIA MUNICIPAL SCHOOL DISTRICT Notes to Financial Statements For the Year Ended June 30, 1997 13 Capital Projects Funds - Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities. Debt Service Funds - Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. The primary revenue source is local property taxes levied specifically for debt service. FIDUCIARY FUNDS Trust and Agency Funds - Trust and Agency Funds are used to account for assets held by the district in a trustee capacity or as an agent for individuals, private organizations and/or other funds. These include Expendable Trust and Agency Funds. Expendable Trust Funds are accounted for in essentially the same manner as governmental funds. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. E. Fixed Assets and Long-term Liabilities. The costs incurred for the purchase or construction of general fixed assets are recorded as capital outlay expenditures in the governmental funds. The fixed assets are accounted for in the General Fixed Assets Account Group rather than in the governmental funds. Fixed assets are valued at cost. Donated fixed assets are valued at the fair market value or estimates of the fair market value on the date of donation. Infrastructure fixed assets, such as roads, curbs and gutters, streets and sidewalks, drainage systems, lighting systems, and similar assets are not capitalized, as these assets are immovable and of value only to the school district. No depreciation has been provided on the general fixed assets. The long-term liabilities incurred by the school district which are to be financed from the governmental funds are accounted for in the General Long-term Debt Account Group, not in the governmental funds. The account groups are not funds. The concern is only with the measurement of financial position and not the measurement of results of operations. F. Basis of Accounting. Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The modified accrual basis of accounting is used in measuring financial position and operating results: Governmental fund revenues and expenditures are recognized on the modified accrual basis. Revenues are recognized in the accounting period in which they become available and measurable. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable, except for interest on general long-term debt, which is recognized when due. SENATOBIA MUNICIPAL SCHOOL DISTRICT Notes to Financial Statements For the Year Ended June 30, 1997 14 Fiduciary fund revenues and expenditures are recognized on the basis consistent with the fund's accounting measurement objective. Expendable Trust Funds are accounted for on the modified accrual basis. Agency Fund assets and liabilities are accounted for on the modified accrual basis. Transfers are recognized in the accounting period in which the interfund receivable and payable arise. G. Budgets. 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 budget revisions must be approved on or before August 15 of the following fiscal year. For comparison purposes, only budgeted governmental funds are included and are presented on the same basis of accounting as the budget which is consistent with generally accepted accounting principles. H. Encumbrances. An encumbrance system is not maintained to account for commitments resulting from approved purchase orders, work orders and contracts. I. Cash and Other Deposits. The school district deposits excess funds in the financial institutions selected by the school board. State statutes specify how these depositories are to be selected. Cash consists of amounts on deposit in demand accounts. Other deposits consist of certificates of deposit. Cash and other deposits are valued at cost. Various restrictions on these deposits are imposed by state statutes. These restrictions are summarized as follows: All deposits with financial institutions must be collateralized in an amount at least equal to 105% of the amount not insured by the Federal Deposit Insurance Corporation (FDIC) or by the Federal Savings and Loan Insurance Corporation (FSLIC), or any successors to such insurance corporations. J. Investments. The school district is allowed, by statute, to invest excess funds in any bonds or other direct obligations of the United States of America or the state of Mississippi, or of any county or municipality of this state, when such county or municipal bonds have been properly approved; or in interest-bearing time certificates of deposit or interest-bearing accounts with any financial institution approved for the deposit of state funds; or in any type of investment permitted by Sections 27-105- 33(d) and 27-105-33(e), Miss. Code Ann. (1972). SENATOBIA MUNICIPAL SCHOOL DISTRICT Notes to Financial Statements For the Year Ended June 30, 1997 15 K. Inventories and Prepaid Items. Donated commodities are received from the USDA and are valued at USDA cost. Other inventories are valued at cost (calculated on the first-in, first-out basis). The costs of governmental fund type inventories are reported as expenditures when consumed rather than when purchased. Prepaid items, such as prepaid insurance, are not reported for governmental fund types since the costs of such items are accounted for as expenditures in the period of acquisition. L. Interfund Loans. Short-term (due within one year) interfund loan receivables are reported as "due from other funds" and are considered available expendable resources. M. Fund Reserves. Fund reserves are portions of fund equity that are legally segregated for a specific future use or are not available for current operations. Following is a description of fund reserves used by the district: Reserved for unemployment benefits - An account that represents the fund balance of the unemployment compensation revolving fund which is legally restricted for the payment of unemployment benefits. Reserved for capital improvements - An account that represents the portion of the fund balance that is legally restricted for capital improvements. Reserved for debt service - An account that represents the fund balance for the Debt Service Fund resources which are legally restricted for the payment of general long-term debt principal and interest amounts maturing in future years. Reserved for inventory - An account that represents a portion of the fund balance which indicates that inventories do not represent available spendable resources even though they are a component of net current assets. Donated commodities inventory is recorded as deferred revenue since the revenue recognition criteria have not been met. N. Property Taxes. Ad valorem property taxes are levied by the governing authorities of the city on behalf of the school district based upon an order adopted by the school board of the school district requesting an ad valorem tax effort in dollars. Since the taxes are not levied and collected by the school district, the revenues to be generated by the annual levies are not recognized until the taxes are actually collected by the tax levying authority. SENATOBIA MUNICIPAL SCHOOL DISTRICT Notes to Financial Statements For the Year Ended June 30, 1997 16 O. Minimum Education Program Revenues. Revenues from the state minimum education program are appropriated on a fiscal year basis and are recorded at the time the revenues are received from the state of Mississippi. P. Compensated Absences. Employees of the school district accumulate sick leave at a minimum amount as required by state law or at a greater amount provided by school district policy. Some employees are allowed personal leave and/or vacation leave in accordance with school district policy. The district pays for unused leave for employees as required to do so by Section 37-7-307(5), Miss. Code Ann. (1972). (2) Cash and Other Deposits. The carrying amount of the school district's deposits with financial institutions was $1,658,224 and the bank balance was $2,223,361. The bank balance is categorized as follows: Amount insured or collateralized with securities held by the school district or its agent in the school district's name $ 174,410 Amount collateralized with securities held by the pledging financial institution's trust department or agent in the school district's name 2,048,951 Total Bank Balance $ 2,223,361 The uninsured bank balance at June 30, 1997, was $2,048,951. As described in Note 1(I), this uninsured bank balance was required to be collateralized in the amount of 105%. The uninsured bank balance at June 30, 1997, was collateralized in an amount equal to or greater than the legally required amount. (3) Interfund Assets/Liabilities. The following is a summary of due from/to other funds: Due From Due To General Fund District maintenance fund $ 152,808 Total 152,808 Special Revenue Funds Uniform millage fund 5,411 Education technology fund 1,617 Title I #61 fund 17,055 Title I #71 fund 2,382 Transportation fund 2,997 Classroom supplies fund 5,407 Title II fund 5,521 Special education fund 11,144 SENATOBIA MUNICIPAL SCHOOL DISTRICT Notes to Financial Statements For the Year Ended June 30, 1997 17 Due From Due To Special Revenue Funds - cont'd Preschool fiscal year 1997 fund 6,046 Vocational tech-prep fund 5,708 Title IV fund 3,520 Total 66,808 Capital Projects Fund Capital improvement fund 86,000 Total 86,000 Total $ 152,808 152,808 (4) General Fixed Assets. The following is a summary of changes in general fixed assets: Balance Completed Balance 7-1-96 Additions Retirements Construction 6-30-97 Land $ 34,924 30,000 64,924 Buildings 3,637,208 138,815 651,077 4,149,470 Improvements other than buildings 138,815 138,815 Mobile equipment 421,890 97,810 519,700 Furniture and equipment 569,020 90,584 54,683 604,921 Leased property under capital leases 505,100 505,100 Construction in progress 722,180 (651,077) 71,103 Total $ 5,168,142 1,079,389 193,498 0 6,054,033 (5) General Long-term Debt. The following is a summary of changes in general long-term debt: Balance Balance 7-1-96 Additions Reductions 6-30-97 A. Building purpose loans payable $ 800,000 800,000 B. Obligations under capital lease 430,100 20,000 410,100 C. General obligation bonds payable 1,095,000 70,000 1,025,000 D. Compensated absences payable 108,161 22,000 130,161 Total $ 1,633,261 822,000 90,000 2,365,261 [...]... lease The school district has entered into a lease agreement that qualifies as a capital lease for accounting purposes Leased property under this lease is composed of a football stadium, parking area and related facilities The various options available to the lessee for this lease is that at the end of the primary lease period or when the general obligations bonds, series 1991, issued by the city of Senatobia... series 1991, issued by the city of Senatobia for the construction of the football facility are paid in full, the lessee shall have the option to purchase the leased premises for $100 The following is a schedule by years of the total payments due on this debt: Principal Year Ending June 30 Interest and Maintenance Charges Total 1998 1999 2000 2001 2002 Thereafter $ 20,000 20,000 20,000 25,000 25,000...SENATOBIA MUNICIPAL SCHOOL DISTRICT Notes to Financial Statements For the Year Ended June 30, 1997 A Building purpose loans payable The following is a schedule by years of the total payments due on this debt: Year Ending June 30 Principal Interest Total 1998 1999 2000 2001 2002 Thereafter 65,000 70,000 75,000 75,000 85,000 430,000 42,628 37,865 34,285 30,435 26,585 . invest excess funds in any bonds or other direct obligations of the United States of America or the state of Mississippi, or of any county or municipality of this state, when such county or municipal. prescribed in the Financial Accounting Manual for Mississippi Public School Districts issued by the Office of the State Auditor. The classifications in that manual are consistent with the broad classifications recommended. government." The school district is a related organization of, but not a component unit of, the city of Senatobia since the governing authorities of the municipality select a majority of the school