Jordan - Elbridge Central School District Audit

October2,2013
TotheBoardofEducationand ManagementofJordanElbridgeCentralSchoolDistrict We have audited, in accordance with auditing standards generally accepted in the United States of AmericaandthestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards issuedbytheComptrollerGeneraloftheUnitedStates,thefinancialstatementsofthegovernmental activities, each major fund, and the aggregate remaining fund information of the Jordan Elbridge Central School District as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Jordan Elbridge Central School Districts basic financialstatements,andhaveissuedourreportthereondatedOctober2,2013. InternalControloverFinancialReporting In planning and performing our audit of the financial statements, we considered the Jordan Elbridge Central School Districts internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Jordan Elbridge Central School Districts internal control. Accordingly, we do not express an opinion on the effectiveness of the Jordan Elbridge Central School District's internal control. Ourconsiderationofinternalcontroloverfinancialreportingwasforthelimitedpurposedescribedin the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying attachment schedule of findings, we identified certain deficiencies ininternalcontrolthatweconsidertobematerialweaknessesandsignificantdeficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entitys financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiencies described in the accompanying attachment scheduleoffindingstobematerialweaknesses:20131. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying attachment schedule of findingstobesignificantdeficiencies:20132through20135.
ComplianceandOtherMatters As part of obtaining reasonable assurance about whether the JordanElbridge Central School Districts financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards, and which are described in the accompanying attachment scheduleoffindingsasitems20136and20137. Inaddition,wenotedothermattersinvolvinginternalcontrolanditsoperationthatwearereporting to management. These matters are described in the accompanying schedule as other internal control related matters are labeled 20138 and 20139. We have also provided updates to the prior yearcommentswhicharelabeled20121through201216. TheJordanElbridgeCentralSchoolDistrictsResponsetoFindings The JordanElbridge Central School Districts response to the findings identified in our audit are describedintheaccompanyingattachmentscheduleoffindings.TheJordanElbridgeCentralSchool Districts response was not subjected to the auditing procedures applied in the audit of the financial statementsand,accordingly,weexpressnoopiniononit. PurposeofthisReport The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entitys internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance.Accordingly,thiscommunicationisnotsuitableforanyotherpurpose. GROSSMANST.AMOUR, CERTIFIEDPUBLICACCOUNTANTS,PLLC
AttachmentScheduleofFindings I) MaterialWeakness: 20131AnnualFinancialClosingProcess Observation: Management had not examined or reconciled certain accounts prior to the onset of the audit. This includes consideration of accounts payable, due from other governments and accounts receivable balances. Managements current procedures do not address the annual closing of account balances for financial statement purposes, especially thoserelatedtoaccrualbasedaccounting. Numerousaccountingadjustmentswereproposedasaresultoftheauditwhichwasmaterial to the individual funds. Management recorded all such adjustments whereby the approximateimpactontheindividualfundswas: GeneralFund$659,000 SchoolFoodService$23,000 SpecialAidFund$(453,000) CapitalFund$1,041,000 Recommendation: An annual closing process and procedure should be developed by management to reconcile all significant account balances with adequate supporting documentation. This should not only include the fund accounts but also the Districtwide accounts,suchasfixedassetsandlongtermdebt. ManagementsCorrective ActionPlan: Theconversiontoanewsoftwareaccountingsystem created some challenges in adapting to new procedures for processing and training new staff members. Issues were uncovered at the end of the year that required review and adjustments outside of normal year end procedures. Procedures for an annual closing process will be established and adhered to going forward; matters will be resolved for the closingprocessJune30,2014. 3
II)
SignificantDeficiencies: 20132BudgetMonitoring Observation: A budget status report is required to be communicated to the Board of Education on at least a quarterly basis and on a monthly basis if budget transfers were completed by the District as required by section 170.2 of the New York State Education Departments Commissioner's Regulations. The District did not comply with these requirements as the first status report was not provided until the February 6, 2013 board meeting which was for the period ended December 31, 2012. Although such report was provided, it was not compliant with the level of detail mandated by the regulations as such reportdidnotdetailtheappropriationsbyobjectcode.TheDistrictprovidedreportsforthe months ended February, March and April. The March and April reports were in greater detail as required by the regulations. No reports were provided for the months of January, MayorJune. Recommendation: The District should consistently provide the budget status reports on a monthly basis within 15 days of each month end. These reports should be at the level of detail mandated by the Commissioner's regulations which includes both revenues and appropriationsbyobject/functioncodes.Thesereportsshouldbereviewed bytheBoardof Educationwherebysuchreviewisdocumentedintheboards'minutes. ManagementsCorrectiveActionPlan:Managementwillbegintoprovidethebudgetstatus reports in the detail required within 15 days after each month end beginning for the month ended September 30, 2013. Such reports will be included as an agenda item for the board toconsidereachmonth.
20133CashManagementSchoolFoodService Observation: The District has established a separate bank account to account for the daily sales activity related to the District's food service program. The bank balance of this account was $326,168 as of June 30, 2013. This bank account does not pay any of the food service expenses which are paid from a separate bank account associated with the General Fund. The District had not appropriately reconciled the ending cash balance to reflect the payments from the General fund. As such, the net cash in the school food service fund should have been $41,596. The District subsequently transferred the difference of $284,572 to the appropriate general fund bank account and recorded the adjustment accordingly. Recommendation:TheDistrictshouldimplementprocedurestorecordthenettransfersof cashactivityinatimelybasis.Thefrequencyofthesetransfersshouldatleastquarterly,if notmonthlytoadjustthebalancesaccordinglybasedonthebankreconciliation. Managements Corrective Action Plan: Management will implement a policy to transfer schoollunchfundsonaquarterlybasisbeginningSeptember30,2013. 4
II)
SignificantDeficiencies(continued): 20134InterfundAccounting Observation: The District routinely has transactions among different government funds which result in receivables / payables between funds. Many of these transactions are system designed transactions which automatically post certain activity across different funds, such as payroll and related benefit activity. Certain interfund transactions were not appropriately recorded or settled within the year resulting in adjustments to the balances. Theadjustmentsrecordedacrossthefundsapproximatedthefollowing: GeneralFund$(20,000) SpecialAidFund$304,000 CapitalFund$32,000 National Council on Governmental Accounting (NCGA) Statement No. 1, Governmental Accounting and Financial Reporting Principles, paragraphs 57 and 75 state that interfund transfers should be recognized in the period in which the interfund receivable and payable arise. If the interfund receivable and payable are not expected to be settled within a reasonableamountoftime,theinterfundbalancesshouldbereduced. Recommendation:Managementshoulddesignaprocesstoreconcileinterfundactivityona monthlybasisandtosettleinterfundactivityonatleastanannualbasis. Managements Corrective Action Plan: The District integrated a new accounting software system (Finance Manager) on July 1, 2012 that complicated this reconciliation process. Management will work to design a process to reconcile these accounts and implementthisprocessbyDecember31,2013.
20135AccountingforFixedAssets Observation: A complete and accurate record of fixed assets, including consideration of related depreciation, is not maintained. In addition, a physical inventory of the District's fixedassetshasnotbeenrecentlyconducted. In order to accurately reflect the Districts fixed asset balances, audit adjustments of approximately $623,000 and $359,000, respectively for asset additions and asset disposals werenecessarytofairlystatetheaccountbalances. Recommendation: Procedures should be implemented to ensure proper records and tracking of fixed assets. In addition, physical inventories should be performed on a periodic basiswherebytheaccountingrecordsarereconciledtothephysicalinventoryofassets. Managements Corrective Action Plan: The District will establish a plan to create, monitor and maintain a fixed asset listing that reflects the Districts fixed assets and depreciation schedules.ThiswillbecompletedbyJune30,2014. 5
III)
OtherInternalControlRelatedMatters: 20136ProgramExpenditureOversight Observation: There was not adequate oversight with respect to the preparation of federal reimbursementrequestsmadebypreviousmanagementunderthe201112RacetotheTop Program. The drawdowns received by the District exceeded actual expenditures by $13,195, with this amount being remitted back to the New York State Education Departmentforallocationtothe201314programbudget. Recommendation: The District should continue to adhere to its recently implemented policies and procedures over federal grant expenditures, which include a consistent review ofthebudgetstatusofallfederalgrantexpendituresthroughoutthefiscalyear. Managements Corrective Action Plan: The District has remitted the excess drawdowns, in theamountof$13,195totheNewYork StateDepartmentofEducationtobeapplied tothe 201314 grant period. The District has also developed and implemented new procedures to closely monitor federal reimbursement requests and monitor grant status on a monthly basis.
20137GrantDrawdowns Observation: Although the District was able to reconcile its yeartodate federal grant expenditures and corresponding drawdowns to its general ledger as of June 30, 2013, supporting general ledger documentation was not maintained for the individual FS25 request for funds forms submitted to the New York State Education Department (NYSED) duringtheyear. Recommendation:TheDistrictshouldimplementprocedureswithrespecttothedrawdown of federal grant monies, which include the attachment of supporting general ledger documentationtotheindividualFS25submissionsmadeduringtheyear. Managements Corrective Action Plan: The District will ensure that general ledger documentation is maintained for all amounts included within its FS25 submissions. The Districts Treasurer and Assistant Superintendent for Instruction are responsible for carrying outthisplanandsuchplanisexpectedtobecompletedbySeptember30,2013. 6
III)
OtherInternalControlRelatedMatters(continued): 20138PurchasingProcedures Observation:TheDistrictisrequiredtoobtainvalidpurchaseorderspriortothepurchaseof goods and services. We noted ten instances of a total 40 tested (25% failure rate) that purchase orders were not approved prior to the actual invoice date. This would indicate thatthepurchaseorderwasenteredintothesystemafterthegoodsorserviceshadalready beendelivered. Recommendation: The District should adhere to its policies and procedures for purchases and ensure that purchase orders are initiated and approved prior the ordering of any goods orservices. Managements Corrective Action Plan: The District will reiterate policies and procedures to all individuals involved in the procurement process.They will continue to monitor staff purchases to ensure adherence to policy. The AP claims auditor identifies and reports any transactions that do not follow purchasing policy in warrant reports presented to the Board monthly.
20139PayrollCertifications Observation: The Districts policy is for all employees that are paid through federal grants that a monthly time and effort be completed by such employee. We noted ten instances of a total of 25 tested (40% failure rate) that the monthly time and effort certifications were notcompleteornotabletobeproducedbymanagement. Recommendation: The District should adhere to its policies and procedures for obtaining thesecertificationsonamonthlybasis. Managements Corrective Action Plan: The District will ensure adherence to the monthly timeandeffortcertificationsandproperretentionofsuchdocumentation.
UpdateofcontroldeficienciescommunicatedfortheyearendedJune30,2012: 20121MonthlyFinancialClosingProcess Observation: Management had not examined or reconciled certain accounts prior to the start of the audit. This includes consideration of all accounts payable, accrued liability, deferred revenue, due from state and federal, and accounts receivable balances. Significant audit adjustments, with a net impact to governmental funds in aggregate of approximately $500,000, were necessary to reconcile and properly state the accounts payable, accrued liability, deferred revenue, due from state and federal,andaccountsreceivablebalancesasofJune30,2012. Recommendation: Monthly financial closing policies and procedures designed by management shouldbeimplementedrequiringtimelyreconciliationandreviewofaccountbalances. Update: Although improvements were noted throughout various processes during the year, we continued to identify issues upon the year end annual closing with account reconciliations and supportingdocumentationforaccounts.Seecomment20131. Managements Corrective Action Plan: See response to the Annual Financial Closing Process, item 20131. 20122BusinessOfficePoliciesandProcedures Observation: The District has not fully implemented its policies and procedures for fiscal operations within the business office, including: cash receipts, cash disbursements and payroll. Certain transactions selected for testing were found to lack adequate required supporting documentation. The District designed policies and procedures during the fiscal year to address the business office functions. Such policies and procedures were not completed until May 2012 and were not fully implementedbyJune2012. Recommendation: Management should continue working to implement the policies and procedures withrespecttofiscaloperationwithinthebusinessoffice. Update: The District has prepared a comprehensive set of policies and procedures to address not only the monthly financial closing process, as previously discussed, but to address all significant accounting cycles within the District. Certain transactions selected for testing were again found to lack adequate supporting documentation, making it evident that the Districts implementation of these policies and procedures is not complete. The District will need to continue implementing its revisedpoliciesandprocedurestoaddressthemonthlyandannualclosingprocess. ManagementsCorrectiveActionPlan:Seeresponsesto20131,20138and20139 8
20123PreparationofFinancialStatements Observation: Management has established a chart of accounts and has structured its trial balance to reflect New York State financial reporting requirements and requirements of the Governmental Accounting Standards Board. Although all adjusting and correcting audit entries were approved by management, management does not possess the ability to prepare external full fund basis and governmentwide financial statements, including all required financial statement disclosures, in accordancewithgovernmentalaccountingstandards,andrequiredsupplementaryinformation. Recommendation: Management should examine responsibilities and resources to identify an individual with the skillset to prepare the financial statements, including notes and supplementary information. Update: Management has examined its account structure within its accounting system and has simplified the account structure upon implementation of its new general ledger accounting system. The current general ledger system appears adequate for management to prepare its financial statements. ManagementsCorrectiveActionPlan:Managementhastakencorrectiveaction. 20124ScheduleofFederalExpenditures(SEFA) Observation: Management was not able to prepare the schedule of expenditures of federal awards. Circular A133, subpart C, Section 300, states that the auditee (the District) should identify in its accountsallfederalawardsreceivedandexpended,aswellasthefederalprogramsunderwhichthey were received. Federal program and award identification includes, as applicable, the CFDA title and number, the award number and year, the name of the federal granting agency, and the name of the passthrough entity. Using this information, the auditee (the District) should be able to reconcile amountspresentedinthefinancialstatementstorelatedamountsinthescheduleofexpendituresof federalawards.Totalfederalexpenditureswere$1,325,299fortheyearendedJune30,2012. Recommendation: We recommend the District seek out and provide the necessary training to the designatedindividualtoprepareacompleteandaccurateSEFA. Update: Upon implementing its new general ledger accounting system, management has demonstrateditsabilitytoproducecompleteandaccuratefederalgrantexpenditurereportstoallow forpreparationoftheJune30,2013SEFA. ManagementsCorrectiveActionPlan:Managementhastakencorrectiveaction 9
20125CashManagementSchoolLunch Observation: The District currently maintains separate bank accounts for its respective funds. However, we noted instances whereby the District had not internally transferred the necessary cash balances to reimburse the General Fund for obligations paid on behalf of the School Food Service Fundthroughouttheyearunderaudit.Thetotalofthesetransfersshouldhavebeen$284,712. Recommendation: We recommend the District continue to implement its cash management policies and procedures to ensure the necessary transfers are made between bank accounts to accurately reflectthecashbalanceandactivityofeachrespectivefund. Update: The District has not addressed this recommendation from the prior year. The District will need to continue implementing the policies and procedures necessary to ensure the necessary cash transfers are made between the General and School Food Service Funds throughout the year. See comment20132. ManagementsCorrectiveActionPlan:Seeresponseto20133. 20126InterfundAccounting Observation: The District routinely has transactions among different governmental funds which result in receivables / payables between funds. Interfund activity has not been settled within one year, which is not consistent with requirements noted below. In addition, interfund activity was not properly recorded during the year under audit, requiring audit adjustments of approximately $398,000. National Council on Governmental Accounting (NCGA) Statement No. 1, Governmental Accounting and Financial Reporting Principles, paragraphs 57 and 75 state that interfund transfers should be recognized in the period in which the interfund receivable and payable arise. If the interfund receivable and payable are not expected to be settled within a reasonable amount of time, the interfundbalancesshouldbereduced. Recommendation: Management should complete the implementation process to ensure interfund activityisrecordedandbalancesaresettledwithinoneyear. Update: Although the new system automated certain aspects of interfund accounting, there continues to be issues with the interfund accounts causing significant adjustments required to be madetofairlystatethebalances.Seecomment20133. ManagementsCorrectiveActionPlan:Seeresponseto20134. 10
20127PayrollExpenseReconciliation Observation:Thegeneralledgerpayrollexpendituresfortheyearunderauditwerenotreconciledto the Districts payroll registers on a periodic basis. The District treasurer prepared payroll reconciliation at the request of the auditors for the period ending June 30, 2012. This analysis reconciledover$11,600,000ofpayrollexpenditures. In addition, three individuals salaries of a total of eighteen possible selections were inappropriately charged to the 201011 IDEA Part B, 611, Recovery Act budget code which had a contract period endingonJune30,2011.Thesesalariestotaledapproximately$172,000. Recommendation: Policies and procedures to ensure payroll expenditures are reconciled to the general ledger and Federal grant budgets on a consistent basis throughout the year should be implemented. Update: Upon implementation of the new general ledger accounting system, wages for all employees were input at the beginning of the school year and automatically recorded to the appropriate expenditure accounts throughout the year. Given the fact that the payroll registers are generatedautomaticallyfromthesamesystem,noexceptionshavebeennoteduponreconciling the payrollregistertothegeneralledgerasofJune30,2013. ManagementsCorrectiveActionPlan:Managementhastakencorrectiveaction. 20128GeneralLedgerCashBalances Observation: The District has implemented procedures that include independent review and approval of the bank reconciliations during the year under audit; however, the general ledger cash balances were not adjusted to reflect the reconciled balances on a consistent basis throughout the year under audit. Audit adjustments with a net effect on governmental funds of approximately $115,000werenecessarytoaccuratelyreflecttheJune30,2012reconciledcashbalances. Recommendation: Policies and procedures should be implemented requiring that general ledger cash accounts are adjusted on a consistent basis throughout the year to reflect the reconciled balances. Update: We noted improvements across all the cash balance accounts except for the Primary bank account.Furtheradjustmentswererequiredtoberecordedtoadjustthisbalancewhichwasaresult of the automated posting of certain cash transactions which also impacted the interfund accounts. Seecomments20131and20133. ManagementsCorrectiveActionPlan:Seeresponseto20131and20134. 11
20129SegregationofDutiesTreasuryFunctions Observation: Over the course of the year, the business office continued to have turnover in accounting personnel, which resulted in treasury functions not consistently being segregated according to function. The District Treasurer was responsible for recording cash receipts and making thebankdepositsduringtheyearunderaudit. Recommendation: Procedures should be implemented to ensure that treasury duties are appropriatelysegregated. Update: Through the addition of staff members, as well as restructuring of job duties among existing business office personnel, the District has appropriately segregated cash receipt and bank depositduties. ManagementsCorrectiveActionPlan:Managementhastakencorrectiveaction. 201210JournalEntries Observation: We noted that of the 64 budget adjusting entries selected for testing, 34 lacked supportingdocumentation;ofthe30remainingselectionsthatcontainedsupportingdocumentation, 7lackeddocumentationofanindependentreviewandapproval.Inaddition,noindependentreview andapprovalprocessofmanualadjustingjournalentrieswasinplaceduringtheyearunderaudit. Recommendation:Policiesandproceduresshouldbeimplementedtoensurethatallsuchentriesare independently reviewed and approved prior to posting. Supporting documentation for all adjustmentsshouldberetained. Update:Managementhastakencorrectiveaction. ManagementsCorrectiveActionPlan:Managementhastakencorrectiveaction. 201211AccountingforFixedAssets Observation: A complete and accurate record of fixed assets, including consideration of related depreciation, was not maintained. In addition, a physical inventory of the District's fixed assets has notbeenrecentlyconducted. Recommendation:Proceduresshouldbeimplementedtoensureproperrecordsandtrackingoffixed assets, including documentation specific to federal funds utilized. In addition, physical inventories shouldbeperformedonaperiodicbasis. Update: The District has not addressed this recommendation. Management needs to begin recording all fixed asset additions into its accounting software on a monthly basis. In addition, management needs to begin to review all of its past fixed assets, and in connection with a physical inventoryoffixedassets,adjustfixedassetsaccordingly.Seecomment20135. ManagementsCorrectiveActionPlan:Seemanagementsresponseto20135. 12
201212ProcurementPoliciesBidDocumentation Observation:Aspartofcashdisbursementstesting18vendorswereselectedwithcompetitivebidor quote documentation requirements in accordance with the Districts procurement policy; supporting documentation evidencing compliance with the procurement policy could not be provided. The selection sample for these 18 vendors amounted to approximately $460,000 with the average individual payment approximating $18,000. The Districts policy requires that at least three written quotes be obtained for purchases in excess of $1,500 and that competitive bids be solicited for purchase and public work contracts of $20,000 or higher. Professional services are exempt from competitivebidrequirements. Recommendation: Policies and procedures should be implemented and monitored to ensure consistent adherence to District procurement policies and adequate retention of supporting documentation. Update:Managementhastakencorrectiveaction. ManagementsCorrectiveActionPlan:Managementhastakencorrectiveaction. 201213BudgetMonitoring Observation: The District's business office and special education departments did not communicate throughout the school year to determine the amounts charged to each Federal grant, as well as the remaining grant budget balances. As such, the District over charged its 201011 Title I, IDEA Part B 611 and IDEA Part B 611, Recovery Act Grants by a total of approximately $183,000. This resulted in an audit adjustment of approximately $183,000 to transfer these excess expenditures from the specialaidfundbacktothegeneralfund. In addition, although the budget status reports were prepared by the District as required by New YorkStatelawandweredistributedtotheBoardofEducationforreview,therewasnoevidencethat these budget status reports were reviewed by appropriate staff levels within the District responsible fortheirspecificportionsofthebudget. Recommendation: Procedures should implement to ensure adequate communication between departments to analyze the budget versus actual Federal grant expenditures to maximize available grants. In addition, a detailed review of the budget status reports should be reviewed on a monthly basisbythosestaffresponsibleforthoseportionsofthebudget. Update: The District has implemented policies and procedures that include a review of the budget statusofallfederalgrantsonaconsistentbasisthroughoutthefiscalyear. ManagementsCorrectiveActionPlan:Seemanagement'sresponsefor20132 13
201214ConflictofInterestForms Observation:Conflictofinterestdisclosureformswerenotmaintainedduringtheperiodunderaudit formembers oftheCommitteeonSpecialEducation(CSE).Inaccordancewith Part6oftheJune30, 2012 OMB Circular A133 Compliance Supplement, conflictofinterest statements should be maintainedforindividualswhodetermineandrevieweligibilityunderFederalawardprograms. Recommendation:TheDistrictshoulddistributeandcollectconflictofinterestdisclosureformsfrom allCSEmembersonatleastanannualbasis. Update: Management has distributed and collected conflict of interest forms from all CSE members forthe201213schoolyear. ManagementsCorrectiveActionPlan:Managementhastakencorrectiveaction. 201215ProgramExpenditureOversight Observation: There was not adequate oversight with respect to the preparation of federal reimbursement requests. The District requested total 201011 Title IIa and Mentor Teacher Internship Program (ARRA) funding based on contract amounts rather than actual allowable expendituresduringthegrantperiods. For the Title IIa grant, the grant budget was $74,376 while the actual allowable expenditure was $58,059. The District requested and received reimbursement of $74,376, therefore receiving $16,317inexcessoftheallowableamountperthegrantagreement. FortheMentorTeacherInternshipProgram,thegrantbudgetwas$15,000whiletheactualallowable expenditure was $6,463. The District requested and received reimbursement of $15,000, therefore receiving$8,537inexcessoftheallowableamountperthegrantagreement. Recommendation: The District should implement an oversight function with respect to federal requests; in addition communication between fiscal and special aid departments should be enhanced. Update: The District was required to repay $13,195 of 201112 Race to the Top proceeds that were requestedunderpreviousmanagementinexcessofactualgrantexpenditures(seecomment20136) However, it was evident through the fact that no such issues were noted with regard to 201213 programs, that management has implemented additional policies and procedures with regard to the oversightoffederalgrantexpenditures. ManagementsCorrectiveActionPlan:Seemanagementsresponseto20138. 14
201216WireTransfersandElectronicDisbursements Observation: It was noted that wire transfers for short and longterm debt for principal and interest of approximately $4,100,000 were made without an independent review or approval of such wire transferbeforesuchtransfertookplace.Section1724oftheNewYorkState EducationLawrequires allschooldistrictstoauditeachvoucherpackagebeforeitispaid.TheDistricthasappointedaclaims auditor to carry out this responsibility. It wasnt evident that a review of the voucher package took placepriortothedisbursement. Recommendation: All transfers should be approved and reviewed by the claims auditor. Managementshouldadoptprocedurestoensureallwiresareappropriatelyapproved. Update: The District has implemented policies and procedures that now provide for an email notification to be issued to the Superintendent upon initiation of electronic wire payments. In addition,allsuchpaymentsarenowincludedwithinthewarrantsapprovedbytheclaimsauditor. ManagementsCorrectiveActionPlan:Managementhastakencorrectiveaction.
15
October2,2013 TotheAuditCommitteeand ManagementofJordanElbridgeCentralSchoolDistrict In planning and performing our audit of the statement of cash receipts and disbursements of the Extraclassroom ActivityFundsofJordanElbridgeCentralSchoolDistrictasofandfortheyearendedJune30,2013,inaccordance with auditing standards generally accepted in the United States of America, we considered JordanElbridge Central School Districts internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purposeofexpressinganopinionontheeffectivenessoftheExtraclassroomActivityFundsoftheJordanElbridge Central School Districts internal control. Accordingly, we do not express an opinion on the effectiveness of the ExtraclassroomActivityFundsoftheJordanElbridgeCentralSchoolDistrictsinternalcontrol. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be significant deficiencies or material weaknesses and therefore there can be no assurance that all such deficiencies have been identified. However, as discussed below, we identified a certain deficiency in internal control that we consider to be a material weakness andanotherdeficiencythatweconsidertobeasignificantdeficiency. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entitys financial statements will not be prevented, or detected and corrected on a timely basis. We consider the deficiency noted inExhibitAtobeamaterialweakness. In addition, we noted other matters that are opportunities for strengthening internal controls and operating efficiencythatwehaveincludedwithinExhibitBofthisletter The purpose of this communication, which is an integral part of our audit, is to describe for management, the auditcommittee,theboardofeducationandotherswithintheorganization,andtheNewYorkStateDepartment of Education, the scope of our testing of internal control and the results of that testing. Accordingly, this communicationisnotintendedtobeandshouldnotbeusedforanyotherpurpose. GROSSMANST.AMOUR, CERTIFIEDPUBLICACCOUNTANTS,PLLC
MaterialWeakness: ExhibitA DocumentationofCashReceipts Observation: The extraclassroom activity funds had $126,019 of receipts recorded during the fiscal year. We noted that the majority of the receipts lacked supporting documentation. Supporting documentation to be retained in accordance with the Districts policies and procedures includes duplicate deposit tickets, receipt for the money deposits and backup indicating the source from which the funds were received that agrees to the deposit. Although the District implemented new procedures and policies for cash receipts, these policies and procedureswerenotconsistentlyappliedthroughoutthefiscalyear. Recommendation:TheDistrictshouldcontinuetoreinforceitspoliciesandprocedurestoensureallactivitieshave appropriate documentation to support the receipts. This documentation should include detailed deposit breakdowns by student activity, use of profit and loss statements for significant fundraising events and tracking ticketsalesforevents. ManagementResponse:TheDistrictwillcontinuetoreviewprocedureswithstafftoconfirmanunderstandingof whatisrequiredtocomplywithdocumentationpolicies. ExhibitB OtherControlDeficiencies: DocumentationofCashDisbursements Observation: The District implemented new policies and procedures related to cash disbursements. These new policiesandprocedureswereforthemostpart,appropriatelycarriedoutbythedifferentclubs.Weexamined25 disbursementsandnoted: a) Two transactions totaling $475 did not have adequate documentation for the disbursement, such as an invoice.Foronetransaction,theonlydocumentationwasaverbalapproval. b) Seven transactions, totaling $11,411 did not have appropriate approval from the student activity treasurerorfacultyadvisor;and c) One advance, totaling $1,300, did not have appropriate supporting documentation for the advanced amount. Recommendation: The District should continue to reinforce its policies and procedures to ensure all appropriate proceduresarecarriedoutrelatedtocashdisbursements,especiallyrelatedtoadvances. Management Response: The District will continue to review policies with staff to confirm an understanding of whatisrequiredtocomplywithcashdisbursementprocedures.Thepracticeofcashadvanceswillcontinuetobe reviewed.
JORDANELBRIDGE CENTRALSCHOOLDISTRICT STATEMENTOFCASHRECEIPTSAND DISBURSEMENTSOFTHE EXTRACLASSROOMACTIVITYFUNDS June30,2013
INDEPENDENTAUDITORSREPORT BoardofEducation JordanElbridgeCentralSchoolDistrict Jordan,NewYork ReportontheFinancialStatements We have audited the accompanying statement of cash receipts and disbursements of the Extraclassroom Activity FundsoftheJordanElbridgeCentralSchoolDistrictfortheyearendedJune30,2013,andtherelatednotestothe financialstatements ManagementsResponsibilityfortheFinancialStatements JordanElbridge Central School Districts management is responsible for the preparation and fair presentation of these financial statements in accordance with the cash basis of accounting as described in Note 1; this includes determining that the cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management is also responsible for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are freefrommaterialmisstatement,whetherduetoerrororfraud. AuditorsResponsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsarefreefrommaterialmisstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.The proceduresselecteddependontheauditorsjudgment,includingtheassessmentofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of thefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotfor thepurposeofexpressinganopinionontheeffectivenessoftheentitysinternalcontrol.Accordingly,weexpress no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentationofthefinancialstatements. Insufficient accounting controls are exercised over cash receipts at the point of collection to the time of submission to the Central Treasurer. Accordingly, it was impracticable to extend our audit of such receipts beyondtheamountsrecorded.
As described in the note to the statement of cash receipts and disbursements, this financial statement has been prepared on the cash receipts and disbursements basis of accounting, which is a comprehensive basis of accountingotherthanaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica. Inouropinion,exceptfor the effectsofsuchadjustments,ifany,asmighthavebeen determinedto be necessary had we been able to audit the cash receipts, the financial statement referred to in the first paragraph presents fairly, in all material respects, the cash receipts and disbursements of the Extraclassroom Activity Funds of the JordanElbridge Central School District for the year ended June 30, 2013, on the basis of accounting described in thenotetothestatementofcashreceiptsanddisbursements. Syracuse,NewYork October2,2013
JordanElbridgeCentralSchoolDistrict StatementofCashReceiptsandDisbursementsoftheExtraclassroomActivityFunds FortheYearEndedJune30,2013
CashBalance July1,2012 HighSchool ChemistryClub Classof2010 Classof2012 Classof2013 Classof2014 Classof2015 Classof2016 CultureClubH.S. DramaClubH.S. EagleCardShop HonorSociety ArtClub JELiteraryMagazine JEMusicalPlayers LanguageClub SchoolStore ScienceClub SkiClub StudentCouncil(JEHS) VarsityClub Yearbook TotalHighSchool MiddleSchool HonorSocietyM.S. StudentCouncilOnlyM.S. YearbookM.S. TotalMiddleSchool TOTALS $591 791 3,239 3,125 1,043 1,518 659 5,963 673 671 208 5,791 13,274 846 3,612 452 554 2,531 5,786 4,395 55,722
Receipts $ 42 789 11,540 12,114 5,597 7,923 35 3,132 628 162 102 10,233 23,364 162 4,949 24 3,680 1,998 7,695 9,862 104,031
Disbursements $ 500 4,028 13,106 10,003 3,963 5,119 1,397 907 614 200 15,421 25,365 4,171 3,946 2,856 5,570 12,535 109,701
CashBalance June30,2013 $91 833 1,559 3,154 3,152 2,804 694 7,698 394 219 110 603 11,273 1,008 4,390 476 288 1,673 7,911 1,722 50,052
852 7,690 5,286 13,828 $ 69,550
2,611 13,345 6,032 21,988 $ 126,019
2,970 8,887 7,378 19,235 $ 128,936
493 12,148 3,940 16,581 $66,633
Seenotestofinancialstatements 2
JordanElbridgeCentralSchoolDistrict NotestoCashReceiptsandDisbursementsoftheExtraclassroomActivityFunds 1. SignificantAccountingPolicies Organization The Student Extraclassroom Activity Funds of the JordanElbridge Central School District represents funds of the students of the School District. The Board of Education exercises general oversight of these funds. Therefore, these funds are included in the Agency Fund of the School Districts basic financial statements. The Extraclassroom Activity Funds are independent of the School District with respecttoitsfinancialtransactionsanddesignationofstudentmanagement. New York State Education Law (Title 8. Education Department, Chapter II. Regulations of the Commissioner, Subchapter L. Finance, Part 172) define the activity funds as an organization within a school district whose activities are conducted by students and whose financial support is raised other than by taxation or through charges of the board of education shall be known as an extraclassroom activityandthemoneysreceivedbyitasextraclassroomactivityfunds. BasisofAccounting The accounts of the Extraclassroom Activity Funds of the JordanElbridge Central School District are maintained on the cash basis of accounting, and the statement of cash receipts and disbursements reflectsonlycashreceivedanddisbursed.Therefore,receivablesandpayables,inventories,longlived assets and accrued income and expenses, which would be recognized under generally accepted accounting principles,andwhich maybematerialin amount,are notrecognizedintheaccompanying statementofcashreceiptsanddisbursements. 2. Taxes The Student Extraclassroom Activity Funds of the District represent an organization within the school district which are exempt from income taxes. Although the organization is exempt from income taxes, the extraclassroom activities of the district are not included in the exemption granted to the DistrictfromNewYorkStatesalestax.Assuch,unlesstheactivitiesaredeemednottaxable,salestax mustbecollectedbytheorganizationandremittedtotheNewYorkStateDepartmentoftaxationand finance.TheExtraclassroomActivitiesareprohibitedfromusingtheDistrictssalestaxexemption.
JordanElbridgeCentralSchool District
ReporttotheBoardofDirectors October2,2013
MichaelLisson,CPA,Partner ChristopherR.Alger,CPA,Supervisor
GrossmanSt.AmourCertifiedPublicAccountantsPLLC 110WestFayetteStreet,Suite900,OneLincolnCenter,Syracuse,NY13202 P315.422.1391F315.423.0829www.gsacpas.com
Agenda
A. CommunicationswithThoseChargedwith Governance B. BasicFinancialStatements
i. IndependentAuditorsReport ii. BasicFinancialStatements Overview
C. D. E. F.
Comments ExtraclassroomActivityReports ExtraclassroomComments SingleAuditReports
A.CommunicationwithThoseCharged
withGovernance
Managementsresponsibility
The preparation and fair presentation of the financial statements in accordance with GAAP, including the design, implementation and maintenance of internal control.
Our responsibility under GAAS

To express opinions on your financial statements in accordance with GAAP governmental activities, each major fund, aggregate remaining fund information, each fiduciary fund
Compliancewithallethicsrequirementsregardingindependence Qualitative aspects of the entitys significant accounting practices

Significantaccountingpolicies Significantaccountingestimates Financialstatementdisclosures
Significant difficulties encountered during the audit

None noted
A.CommunicationwithThoseCharged
withGovernance
Uncorrectedandcorrectedmisstatements
Journalentriesmadeduringthecourseoftheauditattachedtothe requiredcommunicationsletter
Disagreementswithmanagement
None
Representationsrequestedfrommanagement
Separateletter
Managementsconsultationswithotheraccountants
Nonethatweareawareof
Othersignificantmatters,findingsorissues
Discussionsnotaconditiontoretention
B.BasicFinancialStatements
Opinion: Unmodified (clean audit opinion) (pgs 13) Managements Discussion and Analysis (pgs 417) Basic Financial Statements District Wide Financial Statements (pgs 1819) Fund Financial Statements (pgs 20 & 22) Reconciliations (pgs 21 & 23) Fiduciary Fund Statements (pgs 2425) Notes to the Financial Statements (pgs 2650) Supplemental Schedules (pgs 5156) Highlights: Total expenses for functions and programs $28.9 million Total revenues $28.9 million
C.Comments
MaterialWeakness
Adeficiencyorcombinationofdeficienciesin internalcontrol,suchthatthereisareasonable possibilitythatamaterialmisstatementinthe financialstatementswouldnotbepreventedor detectedandcorrectedonatimelybasis 20131AnnualFinancialClosingProcess
C.Comments
SignificantDeficiency
Adeficiencyorcombinationofdeficienciesin internalcontrolthatislessseverethanamaterial weakness,yetimportantenoughtomeritthe attentionofthosechargedwithgovernance
20132BudgetMonitoring 20133CashManagement SchoolFoodService 20134InterfundAccounting 20135AccountingforFixedAssets
C.Comments
Otherobservationsandrecommendations
Duringthecourseoftheauditcertainother opportunitiesforimprovementofinternal controlscametoourattention.
20136ProgramExpenditureOversight 20137GrantDrawdowns 20138PurchasingProcedures 20139PayrollCertifications
D.&E.ExtraclassroomActivities
StatementofCashReceiptsandDisbursements
Opinion:ModifiedforScopeLimitation CashReceipt Information
Comments
MaterialWeakness
LackofSupportingDocumentationofCashReceipts
OtherControlDeficiency
Lack of Supporting Documentation of Cash Disbursements
F.SingleAuditReports
Reports:
InternalControl unmodified Compliance unmodified
MajorPrograms:
84.010 TitleI 84.027 SpecialEducation GrantstoStates(IDEA,B) 84.173 SpecialEducation PreschoolGrants(IDEA Preschool)
NotaLowriskauditee Findings:
FinancialStatementFindings 20131thru20135 FederalAwardFindingsandQuestionedCosts NONE
FINANCIALSTATEMENTSAND SUPPLEMENTARYINFORMATION June30,2013
JORDANELBRIDGECENTRALSCHOOLDISTRICT TableofContents Page IndependentAuditorsReport 13 ManagementsDiscussionandAnalysis 417 BasicFinancialStatements StatementofNetPosition 18 StatementofActivitiesandChangesinNetPosition 19 BalanceSheetGovernmentalFunds 20 ReconciliationofGovernmentalFundsBalanceSheet totheStatementofNetPosition 21 StatementofRevenues,ExpendituresandChangesin FundBalancesGovernmentalFunds 22 ReconciliationofGovernmentalFundsStatementofRevenues,Expenditures andChangesinFundEquitytotheStatementofActivities 23 StatementofFiduciaryNetPosition 24 StatementofChangesinFiduciaryNetPosition 25 NotestoBasicFinancialStatements 2650 RequiredSupplementaryInformation ScheduleofFundingProgressOtherPostemploymentBenefitPlan 51 ScheduleofRevenues,ExpendituresandChangesinFundBalance Budget(NonGAAPBasis)andActualGeneralFund 5253 SupplementaryInformation ScheduleofChangefromAdoptedtoFinalBudgetandtheRealProperty TaxLimit 54 ScheduleofCapitalProjectsFundProjectExpendituresandFinancingResources 55 NetInvestmentinCapitalAssets 56
INDEPENDENTAUDITORSREPORT BoardofEducation JordanElbridgeCentralSchoolDistrict Jordan,NewYork ReportontheFinancialStatements Wehaveauditedtheaccompanyingfinancialstatementsofthegovernmental activities,eachmajorfund,andthe aggregate remaining fund information of JordanElbridge Central School District (the District), as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the Districts basic financial statements as listed in the table of contents. We also have audited each fiduciary fund type of the District, as of and for the year ended June 30, 2013, as displayed in the Districts basic financial statements. ManagementsResponsibilityfortheFinancialStatements JordanElbridge Central School Districts management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due tofraudorerror. AuditorsResponsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our auditinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmericaandthestandards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhetherthefinancialstatementsarefreefrommaterialmisstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.The proceduresselecteddependontheauditorsjudgment,includingtheassessmentofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of thefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotfor thepurposeofexpressinganopinionontheeffectivenessoftheentitysinternalcontrol.Accordingly,weexpress no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentationofthefinancialstatements. Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouraudit opinions.

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information, and each fiduciary fund type of the District, as of June 30, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generallyacceptedintheUnitedStatesofAmerica. OtherMatters RequiredSupplementaryInformation Accounting principles generally accepted in the United States of America require that the managements discussion and analysis, schedule of funding progress other postemployment benefit plans and schedule of revenues, expenditures and changes in fund balance on pages 417, 51 and pages 5253, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and otherknowledgeweobtainedduringourauditofthebasicfinancialstatements.Wedonotexpressanopinionor provide any assurance on the information because the limited procedures do not provide us with sufficient evidencetoexpressanopinionorprovideanyassurance. OtherInformation Our audit was conducted for the purpose of forming opinions on the financial statements that collectively compriseJordanElbridgeCentralSchoolDistrictsbasicprimarygovernmentfinancialstatements.Thescheduleof changefromadoptedtofinalandtherealpropertytaxlimit,thescheduleofprojectexpenditurescapitalprojects fund and net investment in capital assets (the supplemental information) on pages 5456 are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplemental informationistheresponsibilityofmanagementandhasnotbeensubjectedtotheauditingproceduresappliedin the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assuranceonit.
OtherReportingRequiredbyGovernmentAuditingStandards InaccordancewithGovernmentAuditingStandards,wehavealsoissuedourreportdatedOctober2,2013onour considerationofJordanElbridgeCentralSchoolDistrictsinternalcontroloverfinancialreportingandonourtests ofitscompliancewithcertainprovisionsoflaws,regulations,contractsandgrantagreements,andothermatters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government AuditingStandardsinconsideringtheDistrictsinternalcontroloverfinancialreportingandcompliance. Syracuse,NewYork October2,2013
JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013
The following is a discussion and analysis of the School District's financial performance for the fiscal year ended June 30, 2013. This section is a summary of the School District's financial activities based on currently known facts,decisions,orconditions.ItisalsobasedonboththeDistrictwideandfundbasedfinancialstatements.The results of the current year are discussed in comparison with the prior year, with an emphasis placed on the current year. The Management's Discussion and Analysis (MD&A) section is only an introduction and should be readinconjunctionwiththeSchoolDistrict'sfinancialstatements,whichimmediatelyfollowthissection. FinancialHighlights The District completed the year ended June 30, 2013 with a net position of $10,181,553 compared to $10,170,664 in 2012, an increase of $10,889. Unrestricted net deficit decreased by $18,438,918, to $(8,052,642). Capitalassetadditionsduring2013amountedto$3,183,768,mostofwhichwastheresultoftheongoing $21,900,000 voterapproved capital project. The Districts additions included $2,561,173 of capital improvements related to buildings, $19,892,420 of reclassifications from construction in progress and $622,595relatedtofurnitureandequipment.Significantadditionsincludedthefollowing: Buses $360,000 FireAlarms $400,000 Stage $225,000 BuildingConstruction $1,100,000 The overall longterm indebtedness of the School District decreased $2,029,000, to $28,186,000, which is the result of the District making principal payments of $2,395,000, as well as issuing serial bonds in the amountof$366,000forthepurchaseofschoolbuses. Total General Fund fund balance, including reserves, was $5,179,153 at June 30, 2013, compared to $5,803,309in2012.TheunassignedfundbalanceintheGeneralFunddecreasedby$132,437from2012, withabalanceof$704,381atJune30,2013.TheassignedappropriatedfundbalanceintheGeneralFund increased$115,000from2012,withabalanceof$1,000,000atJune30,2013.This$1,000,000represents the amount of unassigned fund balance expected to be used in the 20132014 budget of the District whichwasapprovedbyDistrictvotersinMay2013. OverviewoftheFinancialStatements ThisdiscussionandanalysisisintendedtoserveasanintroductiontotheDistrictsbasicfinancialstatements. The basic financial statements consist of four sections: MD&A (this section), the basic financial statements, requiredsupplementaryinformationandsupplementaryinformationrequiredbyNewYorkStatelaw.
4
OverviewoftheFinancialStatements,continued The basic financial statements include two (2) kinds of statements that present different views of the School District. The Statement of Net Position and Statement of Activities & Changes in Net Position provide information on a governmentwide basis. These statements present an aggregate view of the Districts finances. The governmentwide financial statements provide both longterm and shortterm information about the Districtsoverallfinancialstatus. The fund financial statements focus on the individual parts of the District, reporting the District's operations with more information and detail than the governmentwide statements. The fund financial statements concentrate on the District's most significant funds, called major funds. The District currently classifiesallofitsgovernmentfundsasmajorfunds. Bothperspectives(governmentwideandfund)allowtheusertoaddressrelevantquestions,broadenthebasisof comparison (yeartoyear, or government to government) and enhance the Districts accountability. The notes to the financial statements explain some of the information in the statements and provide additional disclosures so that the statement users have a complete picture of the Districts financial activities and position. The required supplementary information and supplementary information required by New York State further explains and supportsthefinancialstatements. GovernmentwideStatements The governmentwide statements report information about the District as a whole using accounting methods similar to those used by privatesector companies. The Statement of Net Position includes all of the Districts assetsandliabilitiesusingtheaccrualbasisofaccounting,whichissimilartotheaccountingusedbymostprivate sector companies. All of the current year's revenues and expenses are accounted for in the Statement of Activitiesregardlessofwhencashisreceivedorpaid. The two (2) Districtwide statements report the School District's net position and how it has changed. Net position, the difference between the School Districts assets and liabilities, is one way to measure the School District's financial health or position. Over time, increases or decreases in the School District's net position is an indicatorofwhetheritsfinancialpositionisimprovingordeteriorating,respectively. ToassesstheDistrict'soverallhealth,oneneedstoconsideradditionalnonfinancialfactorssuchaschangesinthe District'spropertytaxbaseandtheconditionofschoolbuildingsandotherfacilities. In the governmentwide financial statements, the District's activities are shown as Governmental Activities. Most of the District's basic services are included here, such as regular and special education, transportation, and administration.PropertytaxesandStateformulaaidfinancethemajorityoftheseactivities.
5
OverviewoftheFinancialStatements,continued FundFinancialStatements The fund financial statements provide more detailed information about the District's funds, focusing on its most significantor"Major"FundsnottheSchoolDistrictasawhole.FundsareaccountingdevicestheSchoolDistrict usestokeeptrackofspecificsourcesoffundingandspendingonparticularprograms.TheSchoolDistricthastwo (2)categoriesoffunds: Governmental Funds: The majority of the District's basic services are included in Governmental Funds, which generally focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at yearend that are available for spending. Consequently, the Governmental Funds statements provide a detailed shortterm view that helps one determine whether there are more or fewer financial resources that can be spent in the near future to finance the District's programs. Because this information does not encompass the additional longterm focus of the governmentwide statements, additional information following the Governmental Funds statements explainstherelationship(ordifferences)betweenthem. Fiduciary Funds: The District is the trustee, or fiduciary, for assets that belong to others, such as the Scholarship Fund and the Student Activities Funds. The District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong.TheDistrictexcludestheseactivitiesfromthegovernmentwidefinancialstatementsbecausethe Districtcannotusetheseassetstofinanceitsoperations.
FinancialAnalysisoftheSchoolDistrictasaWhole TheSchoolDistrictscombinednetpositionforfiscalyearendedJune30,2013increasedby$10,889.Ouranalysis below focuses on the net position (Figure 1) and changes in net position (Figure 2) of the School District's GovernmentalActivities. FinancialAnalysisoftheSchoolDistrictasaWhole (Figure1)
GovernmentalActivities 2012 2013 CurrentandOtherAssets Capital Assets Total Assets CurrentLiabilities NoncurrentLiabilities Total Liabilities NetPosition: NetInvestmentinCapital Assets Restricted UnrestrictedDeficit Total NetPosition
Total Percentage Change 201213 73.92% 3.03% 29.19% 83.21% 2.05% 34.25%
$28,939,263 40,169,740 $69,109,003 $23,380,886 35,557,453 $58,938,339
$ 7,546,138 41,388,752 $48,934,890 $ 3,925,191 34,828,146 $38,753,337
$11,135,892 25,526,332 (26,491,560) $10,170,664
$13,202,752 5,031,443 (8,052,642) $10,181,553
18.56% 80.29% 69.60% 0.11%
TheDistrictscurrentandotherassetsdecreasedover$21,300,000(74%).Thiswasprimarilyduetothedecrease in restricted cash, which decreased $21,700,000. Restricted cash is cash that cannot be used for general expenditures of the District and must be used by the District for its specified purposes. The majority of the 2012 restricted cash balance pertained to the unspent proceeds from the $18,145,000 of serial bonds issued in June 2012 which were restricted to be used to repay the outstanding bond anticipation note of $19,000,000 outstandingasofJune30,2012.ThisbondanticipationnotewaspaidinJuly2012.
7
FinancialAnalysisoftheSchoolDistrictasaWhole(continued) TheDistricts capitalassets,netofdepreciation,increasedbyapproximately$1,200,000(3%).Thisistheresultof Districts ongoing capital projects, whereby the District expended approximately $3,200,000 related to its capital projects, offset by depreciation of approximately $2,000,000 recorded during the year. The capital projects includedsignificantadditionsofbusesandbuildingimprovements,includingfirealarmsandstaging. Current liabilities have decreased over $19,400,000 (83%) primarily due to the District repayment of the $19,000,000 of bond anticipation notes relating to the ongoing capital project that were outstanding as of June 30,2012.Thesenoteswerepaidfully bytheDistrictinJuly2012withproceedsfrom$18,145,000ofserialbonds thatwereissuedinMay2012. Noncurrent liabilities have decreased approximately $2,100,000 (6%) due to the District making principal payments of $2,395,000, as well as issuing serial bonds in the amount of $366,000 for the purchase of school buses. Restricted net position decreased over $20,400,000 (80%) due to the utilization of the proceeds from the serial bonds issued by the District in May 2012. These serial bonds were issued to repay the outstanding bond anticipationnotestotaling$19,000,000inJuly2012.TheDistrictusedtheproceedsfromtheserialbondissuance of $18,145,000 plus $855,000 from current year appropriations to pay off the outstanding bond anticipation note of$19,000,000. Unrestricted net deficit decreased by approximately $18,500,000 (70%) mainly due to the $19,000,000 in restricted cash held at June 30, 2012 being utilized to repay the outstanding bond anticipation note in July of 2012. Net investment in capital assets, net of related debt increased $2,066,860. Total related debt decreased to $28,186,000dueprimarilytoprincipalpaymentsmadebytheDistrict.
FinancialAnalysisoftheSchoolDistrictasaWhole(continued) Revenues for the District are highly concentrated from two significant sources, which include New York State aid andrealpropertytaxes.ThefollowingtwochartsareasummaryofsignificantrevenuesourcesfortheDistrict.
FinancialAnalysisoftheSchoolDistrictasaWhole(continued) Although the District has received approximately $1,186,000 of additional aid from New York State, as compared to 2012, the amount of state aid is highly dependent on New York States annual budget and legislation in New York State. The District expects that state aid will remain relatively flat given the current economic affairs of the state. TheDistrictsoverallpropertytaxrevenuesincreasedslightlyovertheprioryear.Propertytaxleviesarebasedon the voter approved budgets. The property tax cap law establishes a limit on the annual growth of property taxes leviedbylocalgovernmentsandschooldistrictstotwopercent(2%)ortherateofinflation,whicheverisless.The District believes it was in compliance with the law when the 20132014 budget, which included a 1.9% tax levy increase,waspresentedtoandapprovedbyvotesonMay21,2013. The District also receives various funding through Federal grant programs, which are generally administered by the New York State Education Department. The District routinely receives federal grants from the U.S. Department of Agriculture related to our school breakfast and lunch programs which totaled approximately $239,000 and $245,000 for the years ended June 30, 2013 and 2012, respectively. In addition, the District routinely receives funding from the U.S. Department of Education under the Individuals with Disabilities Act (IDEA) and under Title I, part A of the Elementary and Secondary Education Act (ESEA) whereby amount received under these grants totaled approximately $578,000 and $543,000 for the years ended June 30, 2013 and 2012, respectively. The District also received grant monies from the American Recovery and Reinvestment Act of 2009 (ARRA) which providedmoniesforanumberofprogramsthroughouttheUnitedStates.ARRAwasenactedbylawmakersto(1) preserve and create jobs and promote economic recovery, (2) assist those most impacted by the recession, (3) provide investments needed to increase economic efficiency by spurring technological advances in science and health, (4) to invest in transportation, environmental protection, and other infrastructure that will provide long term economic benefits, and (5) to stabilize state and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases. The District received ARRA monies directly related to the stabilization purposes of the act totaling approximately $202,000 and $601,000 for theyearsendedJune30,2013and2012,respectively.UnlikefederalgrantprogramsforIDEAandTitleI,ARRAis a temporary grant program and the District is likely to see significant decreases in ARRA related grants in the future.
10
FinancialAnalysisoftheSchoolDistrictasaWhole(continued) Program costs for the District are generally related to instruction and related benefits. The following two charts areasummaryofsignificantprogramcostsfortheDistrict.

11
FinancialAnalysisoftheSchoolDistrictasaWhole(continued) The Districts program expenses consist of all activities necessary to educate students of the district. Naturally, themostsignificantexpensefortheDistrictrelatestoinstructionwhichrepresentsclosetohalfofalltheDistricts program expenses. The District increased its workforce in the current fiscal year, which resulted in additional costs to the District for instructional salaries of approximately $620,000. However, the cost of providing employeebenefitswithinthegovernmentalfundsdecreasedbyapproximately$350,000,primarilyasaresultofa reduction in retirement incentives, workers compensation and unemployment insurance costs. Employee benefits presented on the Governmentwide basis reflect an increase over the prior year of $138,639, including considerationsforotherpostemploymentbenefits. Similartothepastyear,themostsignificantbenefitisforhealthinsurancewhichtotalsapproximately$3,329,000 for 2013, while health insurance was approximately $3,249,000 in the prior year. Health insurance includes both active and retired employees who participate in the Districts health care plan. The annual net other postemployment obligation increase approximated $1,380,000 and 960,000 for the years ended June 30, 2013 and 2012, respectively. Included within benefits is the statutory payroll taxes for social security and Medicare which totaled $904,000 and $848,000 for the years ended June 30, 2013 and 2012, respectively. In addition, the Districts ERS contributions totaled $407,000 and $342,000 for the years ended June 30, 2013 and 2012 respectively,whiletheTRScontributiontotaled$1,035,000and$1,192,000fortheyearsendedJune30,2013and 2012, respectively. The District has been notified by the New York State Teachers Retirement System that the Districts contribution rate applicable to 20122013 salaries is 11.84% and for 20132014 salaries is 16.25%. The 20122013 contribution will be paid in the fall of 2013 and is recorded as a liability of $1,025,050 on these financial statements. The District believes that the costs of both health insurance and contributions to both ERS andTRSwillcontinuetoincreaseinfutureyears. Depreciation expense, which is noncash expenditure, increased slightly from 2012 to 2013, increasing approximately $20,000. This was the result of 2013 representing the first full year of depreciation for various piecesofequipmentpurchasedintheprioryear.DepreciationcanbeviewedastheprocessbywhichtheDistrict gradually records the loss in value of its capital assets over a period of time. Depreciation is considered a non cashitemasnomoneyisactuallypaidatthetimedepreciationisrecorded.
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FinancialAnalysisoftheSchoolDistrictasaWhole(continued) OuranalysisinFigure2considerstheoperationsoftheSchoolDistrict'sactivitiesingreaterdetail.Themajorityof thesignificantvarianceshavebeendiscussedthroughoutthisMDA. FinancialAnalysisoftheSchoolDistrictasaWhole (Figure2) Total Percentage GovernmentalActivities Change 2012 2013 2012 13
REVENUES: ProgramRevenues: ChargesforServices OperatingGrants&Contributions General Revenues: PropertyTaxes&OtherTax Items State Sources Use ofmoneyandproperty OtherGeneral Revenues Total Revenues PROGRAMEXPENSES: General Support Instruction Pupil Transportation Employee benefits School FoodService DebtService Total Expenses Change InNetPosition
$242,884 1,497,819
$217,743 1,272,331
10.35% 15.05%
12,005,404 13,201,602 14,790 440,992 $27,403,491
12,278,843 14,826,110 31,102 250,840 $28,876,969
2.28% 12.31% 110.29% 43.12% 5.38%
$3,395,407 14,277,405 1,471,744 6,988,420 469,970 548,931 $27,151,877 $251,614
$ 3,867,085 15,006,748 1,467,164 7,127,059 420,714 977,310 $28,866,080 $ 10,889
13.89% 5.11% 0.31% 1.98% 10.48% 78.04% 6.31%
Debt service expense increased approximately $400,000 (78%) due to new borrowings; more of the payment is appliedtointerestinitialyearsofdebt,whereasmoreprincipalisappliedasdebtnearsmaturity.
13
FinancialAnalysisoftheSchoolDistrict'sFunds Figure 3 shows the changes for the year in total fund balances for the Districts major funds and reflects a net decrease of $1,679,747 which is primarily attributable to the fact that the Capital Project Fund has not yet issued additionalborrowingsrelatedtotheongoing$21,900,000capitalproject. FinancialAnalysisoftheSchoolDistrict'sFundBalances (Figure3)
2012 General Fund School FoodService Fund Special AidFund DebtServiceFund Capital ProjectFund Totals $5,803,309 117,460 898,972 1,148,937 $7,968,678
2013 $5,179,153 48,288 900,633 160,857 $6,288,931
%Change 201213 10.76% 58.89% 0.00% 0.18% 86.00%
TheGeneralFunddecreaseditsbalanceby$624,156,ascomparedtotheprioryear.Thiswasprimarilytheresult ofincreasesininstructionalanddebtserviceexpendituresofapproximately$822,000and$261,000,respectively. The instructional expenditures increased due to an increased workforce and debt service expenditures increased primarily as a result of the conversion of the bond anticipation note for $19,000,000 to the long term serial bond totaling $18,145,000. Next years principal payment is expected to be $1,125,000. These increases offset the fact that total General Fund revenues increased by approximately $1,500,000 in 2013 due primarily to an increase in stateaidofapproximately$1,185,000. The School Food Service Fund decreased by $69,172 compared to the prior year. The decrease is primarily the result of cafeteria equipment purchases made during the current year. This fund oversees the activity of our school food services (breakfast, lunch, etc.) and has been able to operate efficiently without a need to be subsidizedfromthe Generalfund.TheDistricthasbeenabletoeffectively managementitscostscomparedtoits revenueswhichhasallowedthefoodservicefundtobeselfsufficient. The Debt service fund of the District represents monies previously set aside to pay principal and interest related to the Districts outstanding longterm debt. This fund is invested in a nominal money market account which has addedtothebalanceofthefund.TheDistrictexpectstobeginutilizingthisfundinthefuturetopaytheprincipal and interest on our longterm debt. During the current year, all principal and interest payments were made by theGeneralfund.
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FinancialAnalysisoftheSchoolDistrict'sFunds(continued) The Capital Fund decreased by $988,080 compared to the prior year, which is primarily due to the fact that there has not yet been additional longterm debt borrowings issued tofund the ongoing $21,900,000 capital project. A total of $19,000,000 of bonds have been issued to fund the $21,900,000 project. The District may obtain additionalbondingof$2,355,000basedonthevoterapprovedDecember2008proposition. Figure 4 summarizes the original voter approved budget of $27,200,000, plus prior years encumbrances of $205,298, compared to the actual revenues and expenditures, and the variances for the year ending June 30, 2013. GeneralFundBudgetaryHighlights (Figure4)
CondensedBudgetaryComparison GeneralFund2013 REVENUES: Real propertytaxesandothertaxitems State sources Otherrevenuesand financingsources Total Revenuesand FinancingSources EXPENDITURES: General support Instruction Pupil transportation Employee benefits DebtService Capital outlay Total ExpendituresandOther FinancingUses
201213 Operating Budget
Actual
TotalDollar Variance
$11,984,181 13,838,819 1,492,408
$12,278,843 14,387,228 315,441
$ 294,662 548,409 (1,176,967)
$27,315,408
$26,981,512
$(333,896)
$ 4,257,549 10,728,160 1,585,441 6,309,065 4,435,193
$ 4,000,054 12,327,092 1,329,631 5,766,366 4,030,627 151,898
$(257,495) 1,598,932 (255,810) (542,699) (404,566) 151,898
$27,315,408
15
$27,605,668
$ 290,260
CapitalAssetsandDebtAdministration CapitalAssets AttheendofJune30,2013,theSchoolDistricthadinvestedinabroadrangeofcapitalassets. CapitalAssets (Figure5)
ChangesinCapitalAssets,net
GovernmentalActivities 2012 2013 $ 74,885 17,748,573 42,845,470 5,215,245 (25,714,433) $40,169,740 $ 74,885 417,327 62,737,890 5,478,845 (27,320,195) $41,388,752
Total Percentage Change 201213 0.00% 97.65% 46.43% 5.05% 6.24% 3.03%
Land Constructioninprocess BuildingsandImprovements Equipment Accumulateddepreciation Total
DebtAdministration Debt, both short and longterm, is considered a liability of Governmental Activities. Although the Districts total debtdecreasedover$21millionyearoveryear,thisisprimarilyduetothetimingofthe2012serialbondseriesB issuance for $18,145,000 which took place in May 2012. The District issued these bonds to fully redeem the outstanding bond anticipation note of $19,000,000. The bond anticipation note was not redeemed until July 2012, as such, this bond anticipation note continued to be presented as a liability for the District as of June 30, 2012.
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CapitalAssetsandDebtAdministration(continued) DebtAdministration (Figure6)
OutstandingDebt
GovernmentalActivities 2012 2013 $ 30,215,000 19,000,000 $ 49,215,000 $28,186,000 $28,186,000
Total Percentage Change 201213 6.72% 100.00% 42.73%
Serial Bonds BAN Total OutstandingDebt
Additional information on the maturities and terms of the School Districts outstanding debt can be found in the notestothesefinancialstatements. FactorsBearingontheDistrict'sFuture The School District has concerns with the condition of the New York State economy and the effect on future school funding. The district is anticipating potential flat to decreasing state aid for next year. TheDistrictalsoanticipatesasignificantincreaseinexpendituresforERSandTRSretirementbenefits. The greater 45 square mile of the District includes the Villages of Jordan and Elbridge and various portions of the Towns of Elbridge, Camillus, Van Buren, Lysander, Skaneateles, Brutus and Sennett. The character of the District is primarily rural with the majority of homes being single family. Commercial activity in the district is centered in and around the Villages of Jordan and Elbridge. Industrial development within the district is centered within the Town of Elbridge. The overall area has a fairly stable level of tax assessments which impact the amounts of revenues the District can raisethroughpropertytaxlevies.Significant,stableandinternationalcompaniessuchasWelchAllyn, TessyPlasticsandAllRedprovideaverystrongeconomicbasefortheDistrictandtheregion. ContactingtheSchoolDistrict'sFinancialManagement This financial report is designed to provide the Districts citizens, taxpayers, customers, investors, and creditors withageneraloverviewoftheDistrictsfinancesandtodemonstratetheDistrict'saccountabilityforthemoneyit receives. If you have questions about this report or need additional financial information concerning the District, contact the District's Business Office at PO Box 902, Jordan, NY 13080, (315) 6898500 for additional information. This financialstatementisalsoavailablebyvisitingtheDistrictswebsiteatwww.jecsd.org.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT StatementofNetPosition GovernmentalActivities June30,2013
ASSETS Cash Unrestricted Restricted Receivables Accountsreceivable Due fromothergovernments Inventories Capital assets,net Total assets LIABILITIES Payables Accountspayable Accruedliabilities Deferredrevenue Longtermliabilities Due andpayable withinone year Bondspayable Due toteachers'retirementsystem Due toemployees'retirementsystem Due andpayable afterone year Compensatedabsences Otherpostemploymentbenefitspayable Bondspayable,net Total liabilities NETPOSITION Netinvestmentincapital assets Restricted Unrestricteddeficit Total netposition Total liabilitiesandnetposition
$ 1,389,508 3,833,424 3,607 2,315,585 4,014 41,388,752 $48,934,890
$109,638 216,984 4,104
2,451,000 1,025,050 118,415 173,419 8,919,727 25,735,000 38,753,337
13,202,752 5,031,443 (8,052,642) 10,181,553 $48,934,890
Theaccompanyingnotesareanintegralpartofthesefinancialstatements 18
JORDANELBRIDGECENTRALSCHOOLDISTRICT StatementofActivitiesandChangesinNetPosition FortheyearendedJune30,2013
Expenses FUNCTIONS/PROGRAMS General support Instruction Pupil transportation Employee benefits Debtservice School foodservice program Total functionsandprograms GENERALREVENUES Real propertytaxes Nonpropertytax items Use ofmoneyandproperty Sale ofpropertyandcompensationforloss Miscellaneous Statesources Federal sources Total general revenues Change innetposition Total netpositionbeginningofyear Total netpositionendofyear
ProgramRevenues Chargesfor Operating Services Grants
Net(Expense) Revenue and Changesin NetPosition
$(3,867,085) (15,006,748) (1,467,164) (7,127,059) (977,310) (420,714) $ (28,866,080)
$44,968 172,775 $ 217,743
$ 1,021,866 250,465 $1,272,331
$(3,822,117) (13,984,882) (1,467,164) (7,127,059) (977,310) 2,526 (27,376,006) 12,203,343 75,500 17,671 13,431 187,195 14,826,110 63,645 27,386,895 10,889 10,170,664
$10,181,553
JORDANELBRIDGECENTRALSCHOOLDISTRICT BalanceSheetGovernmentalFunds June30,2013
General ASSETS Cash Unrestricted Restricted Receivables Due fromotherfunds Due fromothergovernments Accountsreceivable Inventory Total assets LIABILITIES Accountspayable Deferredrevenuesanddeposits Due tootherfunds Due toteachers'retirementsystem Due toemployees'retirementsystem Total liabilities FUNDBALANCES Nonspendable Reservedforinventory Restricted Reservedforunemploymentinsurance Reservedforliabilityclaims Reservedfortax certiorari Reservedforemployee benefits ReservedforERS BuildingCapital Reserve Fund School BusReserve Fund OperationsCapital Reserve Fund Restrictedother: Restrictedforschool foodservice Restrictedforcapital project Restrictedfordebtservice Restrictedforcarryoverencumbrances Total restrictedfundbalance Assigned Assignedappropriatedfundbalance Assignedunappropriatedfundbalance (includescarryoverencumbrances) Total assignedfundbalance Unassigned Unassignedfundbalance Total unassignedfundbalance Total fundbalances Total liabilitiesandfundbalances
School Food Service
Special Aid
Debt Service
Capital Projects
Total Governmental Funds
$ 1,389,508 2,869,083 645,956 1,778,125 $ 6,682,672
$ 41,596 3,175 3,607 4,014 $ 52,392
$ 95,403 $ 95,403
$ 900,633 $ 900,633
$ 22,112 302,402 438,882 $ 763,396
$ 1,389,508 3,833,424 948,358 2,315,585 3,607 4,014 $ 8,494,496
$ 57,652 302,402 1,025,050 118,415 1,503,519
$ 4,104 4,104
$ 95,403 95,403
$ 51,986 550,553 602,539
$ 109,638 4,104 948,358 1,025,050 118,415 2,205,565
519,083 825,000 70,000 693,654 150,000 311,000 750,000 3,318,737 1,000,000 156,035 1,156,035 704,381 704,381 5,179,153 $6,682,672
4,014 43,361 913 44,274 48,288 $52,392
$95,403
900,633 900,633 900,633 $ 900,633
270,000 493,785 763,785 (602,928) (602,928) 160,857 $763,396
4,014 519,083 825,000 70,000 693,654 150,000 311,000 750,000 43,361 270,000 900,633 494,698 5,027,429 1,000,000 156,035 1,156,035 101,453 101,453 6,288,931 $8,494,496
JORDANELBRIDGECENTRALSCHOOLDISTRICT ReconciliationofGovernmentalFundsBalanceSheettotheStatementofNetPosition June30,2013
Total Governmental Funds ASSETS Cash Unrestricted Restricted Receivables Due fromotherfunds Due fromothergovernments Accountsreceivable Inventory Capital assets,net Total assets LIABILITIES Accountspayable Accruedliabilities Deferredrevenues Due tootherfunds Long termdebtdue withinone year Due toemployees'retirementsystem Due toteachers'retirementsystem Bondspayable Long termdebtdue inmore thanone year Compensatedabsencespayable,net Postemploymentbenefitspayable Bondspayable Total liabilities FUNDBALANCE/NETPOSITION Total fundbalance/netposition Total liabilitiesandfundbalance/netposition
Longterm Assets, Liabilities
Reclassifications and Eliminations
Statementof NetPosition Totals
$1,389,508 3,833,424 948,358 2,315,585 3,607 4,014 $8,494,496
$ 41,388,752 $ 41,388,752
$ (948,358) $(948,358)
$1,389,508 3,833,424 2,315,585 3,607 4,014 41,388,752 $48,934,890
$ 109,638 4,104 948,358 118,415 1,025,050 2,205,565
$ 216,984 2,451,000 173,419 8,919,727 25,735,000 37,496,130
$ (948,358) (948,358)
$109,638 216,984 4,104 118,415 1,025,050 2,451,000 173,419 8,919,727 25,735,000 38,753,337
6,288,931 $8,494,496
3,892,622 $ 41,388,752
$(948,358)
10,181,553 $48,934,890
JORDANELBRIDGECENTRALSCHOOLDISTRICT StatementofRevenues,ExpendituresandChangesinFundBalancesGovernmentalFunds FortheyearendedJune30,2013

Total Governmental Funds $12,203,343 75,500 44,968 17,671 13,431 187,195 15,001,946 1,160,140 172,775 28,876,969 3,690,257 13,356,353 1,329,631 5,766,366 2,390,000 785,627 420,714 3,183,768 30,922,716 (2,045,747) 366,000 366,000
General REVENUES Real propertytaxes Nonpropertytax items Chargesforservices Use ofmoneyandproperty Sale ofpropertyandcompensationforloss Miscellaneous State sources Federal sources Salesschool foodservice Total revenues EXPENDITURES General support Instruction Pupil transportation Employee benefits Debtservice principal Debtservice interest Costofsales Capital outlay Total expenditures Excessofrevenues Over(under)expenditures OTHERFINANCINGSOURCESANDUSES Interfundtransfers BANsredeemedfromappropriations Proceedsfromdebt Total othersources(uses) Excess(deficiency) ofrevenues andothersourcesover expendituresandother(uses) Fundbalancesbeginningofyear Fundbalances(deficit) endofyear $12,203,343 75,500 44,968 6,202 13,431 187,195 14,387,228 63,645 26,981,512 3,690,257 12,327,092 1,329,631 5,766,366 2,390,000 785,627 151,898 26,440,871 540,641 (309,797) (855,000) (1,164,797)
School Food Service $ 597 11,163 239,302 172,775 423,837 420,714 72,295 493,009 (69,172)
Special Aid $ 164,673 857,193 1,021,866 1,029,261 1,029,261 (7,395) 7,395 7,395
Debt Service $ 1,661 1,661 1,661
Capital Projects $ 9,211 438,882 448,093 2,959,575 2,959,575 (2,511,482) 302,402 855,000 366,000 1,523,402
(624,156) 5,803,309 $5,179,153
(69,172) 117,460 $48,288
1,661 898,972 $900,633
(988,080) 1,148,937 $160,857
(1,679,747) 7,968,678 $6,288,931
JORDANELBRIDGECENTRALSCHOOLDISTRICT ReconciliationofGovernmentalFundsRevenues,Expenditures,andChangesin FundEquitytotheStatementofActivities FortheyearendedJune30,2013
Total Governmental Funds REVENUES Real propertytaxes Nonpropertytax items Chargesforservices Use ofmoneyandproperty Sale ofpropertyandcompensationforloss Miscellaneous State sources Federal sources Salesschool foodservice Total revenues EXPENDITURES/EXPENSES General support Instruction Pupil transportation Employee benefits Debtservice principal Debtservice interest Costof sales Capital outlay Total expenditures/expenses Excess(deficiency)ofrevenues overexpenditures/expenses OTHERSOURCESANDUSES Proceedsfromdebt Total othersources(uses) Netchange forthe year $ 12,203,343 75,500 44,968 17,671 13,431 187,195 15,001,946 1,160,140 172,775 $ 28,876,969
Longterm Revenue, Expenses $ $
Capital Related Items $ $
Longterm Debt Transactions $ $
Statementof Activities Totals $ 12,203,343 75,500 44,968 17,671 13,431 187,195 15,001,946 1,160,140 172,775 $ 28,876,969
$3,690,257 13,356,353 1,329,631 5,766,366 2,390,000 785,627 420,714 3,183,768 $ 30,922,716
$ 1,360,693 $1,360,693
$ 176,828 1,650,395 137,533 (3,183,768) $(1,219,012)
$ (2,390,000) 191,683 $(2,198,317)
$3,867,085 15,006,748 1,467,164 7,127,059 977,310 420,714 $ 28,866,080
$(2,045,747)
$(1,360,693)
$1,219,012
$2,198,317
$10,889
366,000 366,000 $(1,679,747)
$(1,360,693)
$1,219,012
(366,000) (366,000) $1,832,317
$10,889
JORDANELBRIDGECENTRALSCHOOLDISTRICT StatementofFiduciaryNetPosition June30,2013
Private Purpose Trusts ASSETS Cash LIABILITIES Extraclassroomactivitybalances NETPOSITION Reservedforscholarships $40,676
Agency $66,633
$66,633
$40,676
JORDANELBRIDGECENTRALSCHOOLDISTRICT StatementofChangesinFiduciaryNetPosition FortheyearendedJune30,2013
Private Purpose Trusts ADDITIONS Investmentearnings REDUCTIONS Scholarships Change innetposition Netpositionbeginningofyear Netpositionendofyear $44
2,050 (2,006) 42,682 $40,676
JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies The financial statements of theJordanElbridge Central School District (the District) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. Those principles are prescribed by the Governmental Accounting Standards Board (GASB), which is the accepted standardsetting body for establishing governmental accounting and financial reporting principles. CertainsignificantaccountingprinciplesandpoliciesutilizedbytheDistrictaredescribedbelow: A) Reportingentity: The District is located in Upstate New York and its geographical coverage includes portions of both Onondaga and Cayuga Counties. The Districts coverage includes portions of the towns of Camillus, Elbridge, Lysander, Skaneateles and Van Buren in Onondaga County and the towns of Brutus and Sennett in Cayuga County. The District has three facilities which are used to provide educations for pupils, including the JordanElbridge High School (grades 9 through 12), Ramsdell Middle School (grades 5 through 8) and Elbridge Elementary (universal prekindergarten through the 4th grade). The District also has a bus garage located next to the Ramsdell Middle School to support its transportation needs. The DistrictscentraladministrationislocatedattheRamsdellMiddleSchool. Essentially,theprimaryfunctionoftheSchoolDistrictistoprovideeducationsforpupils.Servicessuchas transportationofpupils,administration,finance,andplantmaintenancesupporttheprimaryfunction. The District is governed by the laws ofNew York State. The District is an independent entity governed by an elected Board of Education consisting of seven members. The President of the Board serves as the chief fiscal officer and the Superintendent is the chief executive officer. The Board is responsible for, and controls all activities related to public school education within the District. Board members have authority to make decisions, power to appoint management, and primary accountability for all fiscal matters. The reporting entity of the District is based upon criteria set forth by GASB Statement 14, The Financial Reporting Entity, as amended by GASB Statement 39, Component Units. The financial reporting entity consists of the primary government, organizations for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primarygovernmentaresuchthatexclusionwouldcausethereportingentitysfinancialstatementstobe misleadingorincomplete. The accompanying financial statements present the activities of the District and other organizational entities determined to be includable in the Districts financial reporting entity. The District is not a component unit of another reporting entity. The decision to include a potential component unit in the Districts reporting entity is based on several criteria including legal standing, fiscal dependency, and financial accountability. Based on the application of these criteria, the following is a brief description of certainentitiesincludedintheDistrictsreportingentity.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) i) Extraclassroomactivityfunds The Extraclassroom Activity Funds of the District represent funds of the students of the District. The Board of Education exercises general oversight of these funds. The Extraclassroom Activity Funds are independent of the District with respect to its financial transactions and the designation of student management.Separateauditedfinancialstatements(cashbasis)oftheExtraclassroomActivityFundscan befoundattheDistrictsbusinessoffice,locatedattheRamsdellMiddleSchool.TheDistrictaccountsfor assetsheldasanagentforvariousstudentorganizationsinanagencyfund. B) Jointventure: The District is a component district in CayugaOnondaga Board of Cooperative Education Services (BOCES). A BOCES is a voluntary, cooperative association of school districts in a geographic area that shares planning, services, and programs which provide educational and support activities. There is no authority or process by which a school district can terminate its status as a BOCES component. The DistrictjoinedtheBOCESonJuly1,1982. BOCES are organized under 1950 of the New York State Education Law. A BOCES Board is considered a corporate body. Members of a BOCES Board are nominated and elected by their component member boards in accordance with provisions of 1950 of the New York State Education Law. All BOCES property is held by the BOCES Board as a corporation (1950(6)). In addition, BOCES Boards also are considered municipal corporationsto permitthem tocontractwithothermunicipalitiesonacooperativebasisunder 119n(a)oftheNewYorkStateGeneralMunicipalLaw. A BOCES budget is comprised of separate budgets for administrative, program and capital costs. Each component districts share of administrative and capital cost is determined by resident public school district enrollment, as defined in the New York State Education Law, 1950(4)(b)(7). In addition, componentdistrictspaytuitionoraservicefeeforprogramsinwhichitsstudentsparticipate. Duringtheyear,theDistrictpaid$3,572,437forBOCESadministrativeandprogramcosts. Participating school districts may issue debt on behalf of BOCES. During the year ended June 30, 2013, the District did not issue serial bonds on behalf of BOCES. As of June 30, 2013, the District had debt outstandingrelatedtoaBOCESreconstructionprojectof$4,105,000. TheDistrictsshareofBOCESaidamountedto$1,525,900. Financial statements from the BOCES are available from the BOCES administrative office located at 1879 WestGeneseeStreetRoad,Auburn,NewYork13021.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) C) Basisofpresentation: i) Districtwidestatements: TheStatementofNetPositionandtheStatementofActivitiespresentfinancialinformationaboutthe Districts governmental activities. These statements include the financial activities of the overall governmentinitsentirety,exceptthosethatarefiduciary. Eliminationshavebeen made to minimize the double counting of internal transactions. Governmental activities generally are financed through property taxes, New York state aid, intergovernmental revenues, and other exchange and non exchange transactions. Operating grants include operatingspecific and discretionary (either operatingorcapital)grants. The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the Districts governmental activities. Direct expenses are those that are specifically associated with and are clearly identifiable to a particular function. Indirect expenses, principally employee benefits, are allocated to functional areas in proportion to the payroll expended forthoseareas.Programrevenuesincludechargespaidbytherecipientsofgoodsorservicesoffered by the programs, and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, includingalltaxes,arepresentedasgeneralrevenues. ii) Fundfinancialstatements: The fund statements provide information about the Districts funds, including fiduciary funds. Separate statements for each fund category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. TheDistrictreportsthefollowingmajorgovernmentalfunds: General Fund: This is the Districts primary operating fund. It accounts for all financial transactions thatarenotrequiredtobeaccountedforinanotherfund. Special Revenue Funds: Special revenue funds are used to account for and report the proceeds of specificrevenuesourcesthatarerestrictedorcommittedtoexpenditureforspecifiedpurposesother than debt service or capital projects. The term proceeds of specific revenue sources establishes that oneormorespecificrestrictedorcommittedrevenuesshouldbethefoundationforaspecialrevenue fund.TheDistricthastwospecialrevenuefunds,theSchoolFoodServiceandSpecialAidfunds.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) Capital Projects Funds: Capital projects funds are used to account for and report financial resources thatarerestricted,committed,orassignedtoexpenditureforcapitaloutlays,includingtheacquisition orconstructionofcapital facilitiesand othercapitalassets.Capitalprojectsfundsexcludethosetypes of capitalrelated outflows financed by proprietary funds or for assets that will be held in trust for individuals,privateorganizations,orothergovernments.TheDistricthasonevoterauthorizedcapital project ongoing which is a $21,900,000 authorization for various capital improvements across the District facilities. As of June 30, 2013 $20,101,326 has been incurred on this project. In addition, significant acquisitions of capital assets, such as school buses are recorded within capital project funds. DebtService Fund:Debtservicefundsareusedtoaccountforandreportfinancialresourcesthatare restricted,committed,orassignedtoexpenditureforprincipalandinterest.Debtservicefundsshould be used to report resources if legally mandated. Financial resources that are being accumulated for principalandinterestmaturinginfutureyearsalsoshouldbereportedindebtservicefunds. The Districts debt service fund represents prior years accumulation of resources to pay both principalandinterest.TheDistrictisnotlegallymandatedtoaccumulateitsresourceswithinthedebt service fund based on its outstanding debt. The District did not use the debt service fund to pay any of its principal and interest for the year as such resources were from appropriations within the generalfund. TheDistrictreportsthefollowingfiduciaryfunds: Fiduciary Funds: Fiduciary activities are those in which the District acts as trustee or agent for resources that belong to others. These activities are not included in the Districtwide financial statements, because their resources do not belong to the District, and are not available to be used. TherearetwoclassesoffiduciaryfundsapplicablefortheDistrict: Private Purpose Trust Funds: These funds are used to account for trust arrangements in which principal and income benefits annual third party awards and scholarships for students. Established criteria govern the use of the funds and members of the District or representativesofthedonorsmayserveoncommitteestodeterminewhobenefits. Agency Funds: These funds are strictly custodial in nature and do not involve the measurementofresultsofoperations.AssetsareheldbytheDistrictasagentforvarious studentgroupsorextraclassroomactivityfundsandforpayrolloremployeewithholding.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) D) Measurementfocusandbasisofaccounting: The Districtwide and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash transaction takes place. Nonexchange transactions, in which the District gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants and donations. On an accrual basis,revenuefrompropertytaxesisrecognizedinthefiscalyearforwhichthetaxesarelevied.Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Thegovernmentalfundstatementsarereportedusingthecurrentfinancialresourcesmeasurementfocus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The District considers all revenues reported in the governmental funds to be availableiftherevenuesarecollectedwithinninetydaysaftertheendofthefiscalyear. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general longterm debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general longterm debt and acquisitions under capital leases are reported as other financing sources. Proceeds of shortterm debt, such as a bond anticipation note(BAN)arenotrecordedasotherfinancingsourceuntilsuchdebtisconvertedintoalongtermnote. E) Cashandinvestments: The Districts cash and cash equivalents consist of cash on hand, demand deposits, and shortterm investmentswithoriginalmaturitiesofthreemonthsorlessfromdateofacquisition.NewYorkStatelaw governs the Districts investment policies. Resources must be deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks or trust companies located within the State. Permissible investments include obligations of the United States Treasury, United States Agencies, repurchase agreementsandobligationsofNewYorkStateoritslocalities.Collateralisrequiredfordemandandtime deposits and certificates of deposit not covered by FDIC insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalitiesandDistricts.Investmentsarestatedatfairvalue. TheDistrict'srestrictedcashbalanceof$3,833,424atJune30,2013representscashandcashequivalents where use is limited by legal requirements. Such balances include General Fund reserves established under New York State General Municipal and Education Law and balances restricted for use in the District'sspecialrevenuefunds.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) F) Propertytaxes: Taxes are collected in Onondaga County and Cayuga County. Real property taxes are levied annually by the Board of Education no later than September 1 and become a lien on August 31, 2012. Unpaid taxes aresubmittedtotherespectivecountytreasurersnolaterthanNovember15. UncollectedrealpropertytaxesaresubsequentlyenforcedbyOnondagaCountyandCayugaCounty.The counties pay an amount representing the uncollected real property taxes transmitted to the counties by theSchoolTaxCollectornolaterthanApril1ofthefollowingyear. G) Inventories: Inventories of food in the school food fund are recorded at cost on a firstin, firstout basis,or in the case ofsurplusfood,atstatedvaluewhichapproximatesmarket. H) Accountsreceivable: Accounts receivable are shown gross, with uncollectible amounts recognized under the direct writeoff method. No allowance for uncollectible accounts has been provided since it is believed that such an allowance would not be material. All receivables are expected to be collected within the subsequent fiscalyear. I) Interfundtransactions: The operations of the District include transactions between funds. These transactions may be temporary innature,suchaswithinterfundborrowings.TheDistricttypically loansresourcesbetweenfundsforthe purpose of providing cash flow. These interfund receivables and payables are expected to be repaid with one year. Permanent transfers of funds include the transfer of expenditure and revenues to provide financingorotherservices. In the districtwide statements, the amounts reported on the Statement of Net Position for interfund receivables and payables represent amounts due between different fund types (governmental activities andfiduciaryfunds).Eliminationshavebeenmadeforallinterfundreceivablesandpayablesbetweenthe funds,withtheexceptionofthoseduefromortothefiduciaryfunds. The governmental funds report all interfund transactions as originally recorded. Interfund receivables and payables may be netted on the accompanying governmental funds balance sheet when it is the Districtspracticetosettletheseamountsatanetbalancebasedupontherightoflegaloffset.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) J) Estimates: Thepreparationoffinancialstatementsinconformitywithaccountingprinciplesgenerallyacceptedinthe United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions are made in a variety of areas, including computation of encumbrances, compensated absences, potential contingent liabilities and usefullivesoflonglivedassets. K) Capitalassets: Capital asset acquisitions are reported at actual cost. Assets acquired prior to June 30, 2003 were valued at estimated historical cost, based on an appraisal conducted by an independent third party. Donated assetsarereportedatestimatedmarketvalueatthetimereceived. Capitalization thresholds (the dollar value above which asset acquisitions are added to the capital asset accounts),depreciationmethods,andestimatedusefullivesofcapitalassetsreportedintheDistrictwide statementsareasfollows:
Land Buildingsandimprovements Vehiclesandequipment

L) Vestedemployeebenefits:
Capitalization Threshold $ 5,000 5,000 5,000
Depreciation Method StraightLine StraightLine StraightLine
Estimated Useful Life N/A 2030years 510years
The District employees are granted vacation in varying amounts, based primarily on length of service and service position. Some earned benefits may be forfeited if not taken within varying time periods. Sick leave eligibility and accumulation is specified in negotiated labor contracts, and in individual employment contracts.Sickleave useisbasedonalastinfirstout(LIFO) basis.Uponretirement,resignationordeath, employees may receive a payment based on unused accumulated sick leave, based on contractual provisions. An accrual for accumulated sick leave is included in the compensated absences liability at yearend.Thecompensatedabsencesliabilityiscalculatedbasedonthecontractualamounttobepaidto theemployeewhilevacationisbasedonthecurrentpayrateasofJune30,2013.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) District employees participate in the New York State Employees' Retirement System and the New York StateTeachers'RetirementSystem.SeeNote9forfurtherdescriptionsurroundingpensionplans. In addition to providing pension benefits, the District provides health insurance coverage and survivor benefits for retired employees and their survivors. Substantially all of the District's employees may become eligible for these benefits if they reach normal retirement age while working for the District. Health care benefits are provided through plans whose premiums are based on the benefits paid during the year. The cost of providing postretirement benefits is shared between the District and the retired employee. The District recognizes the cost of providing health insurance by recording its share of insurance premiums as an expenditure or operating transfer to other funds in the General fund, in the yearpaid.SeeNote10forfurtherdescriptionsurroundingotherpostemploymentbenefitsofferedbythe District. M) Deferredrevenue: Deferredrevenuesarereportedwhen potentialrevenuesdonotmeetboththemeasurableandavailable criteria for recognition in the current period. Deferred revenues also arise when resources are received by the District before it has legal claim to them, as when grant monies are received prior to the incidence of qualifying expenditures. In subsequent periods, when both recognition criteria are met, or when the District has legal claim to the resources, the liability for deferred revenues is removed and revenues are recorded. The Districts deferred revenues relate to its school food program whereby students have paid monies for future purchases. Deferred revenues for the school food program totaled $4,104 as of June 30,2013. Statute provides the authority for the District to levy taxes to be used to finance expenditures within the first120daysofthesucceedingfiscalyear.Consequently,suchamountsarerecognizedasrevenueinthe subsequentfiscalyear,ratherthanwhenmeasurableandavailable. DeferredrevenuesrecordedingovernmentalfundsarerecordedintheDistrictwidestatements. N) Deposits: TheDistricthasreceivedaperformancesecuritydepositrelatedtovendorintheamountof$36,542.This amount will be returned to the vendor upon completion or termination of such contract, in accordance withthetermsandconditionswithinthecontract. O) Restrictedresources: When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the Districts policy concerning which to apply first varies with the intended use, and with associatedlegalrequirements,manyofwhicharedescribedelsewhereintheseNotes.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) P) Shorttermdebt: TheDistrictmayissueRevenueAnticipationNotes(RAN)andTaxAnticipationNotes(TAN),inanticipation ofthereceiptofrevenues.Thesenotesarerecordedasaliabilityofthefundthatwillactuallyreceivethe proceeds from the issuance of the notes. The RANs and TANs represent a liability that will be extinguishedbytheuseofexpendable,availableresourcesofthefund. The District may issue budget notes up to an amount not to exceed 5% of the amount of the annual budget during any fiscal year for expenditures for which there is an insufficient or no provision made in the annual budget. The budget note must be repaid no later than the close of the second fiscal year succeedingtheyearinwhichthenotewasissued. The District may issue Bond Anticipation Notes (BAN), in anticipation of proceeds from the subsequent sale of bonds. These notes are recorded as current liabilities of the funds that will actually receive the proceeds from the issuance of bonds. State law requires that BANs issued for capital purposes be convertedtolongtermfinancingwithinfiveyearsaftertheoriginalissuedate. Q) Accruedliabilitiesandlongtermobligations: Payables, accrued liabilities and longterm obligations are reported in the districtwide financial statements. In the governmental funds, payables and accrued liabilities are paid in a timely manner and in full from current financial resources. Claims and judgments, other postemployment benefits payable and compensated absences that will be paid from governmental funds, are reported as a liability in the funds financial statements only to the extent that they are due for payment in the current year. Bonds and other longterm obligations that will be paid from governmental funds are recognized as a liability in thefundfinancialstatementswhendue. Longterm obligations represent the Districts future obligations or future economic outflows. The liabilities are reported as due in one year or due within more than one year in the Statement of Net Position.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) R) Equityclassifications Districtwidestatements: Inthedistrictwidestatementstherearethreeclassesofnetposition: i. Net investment in capital assets consists of net capital assets (cost less accumulated depreciation) reduced by outstanding balances of related debt obligations from the acquisition,constructionorimprovementofthoseassets. ii. Restrictednetpositionreportsnetpositionwhenconstraintsplacedontheassetsareeither externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or imposed by law through constitutional provisionsorenablinglegislation. iii. Unrestricted net position reports the balance of net position that does not meet the definition of the above two classifications and are deemed to be available for general use by theDistrict. Fundstatements: Inthefundbasisstatementstherearefiveclassificationsoffundbalance: Nonspendable fund balance Includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Nonspendable fund balance includestheinventoryrecordedintheSchoolFoodServiceFundof$4,014. Restricted fund balance includes amounts with constraints placed on the use of resources either externally imposed by creditors, grantors, contributors or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. The Districts restricted balance includes all reserves established in accordance with New York State General Municipal Law and New York State EducationLawandtheremainingfund balanceintheschoolfoodservice,capital projects,anddebt servicefunds. Committed fund balance Includes amounts that can only be used for the specific purposes pursuant to constraintsimposedbyformalactionoftheschooldistrictshighestlevelofdecisionmakingauthority,i.e., theBoardofEducation.TheSchoolDistricthasnocommittedfundbalancesasofJune30,2013. Assigned fund balance Includes amounts that are constrained by the school districts intent to be used for specific purposes, but are neither restricted nor committed. All encumbrances are classified as Assigned Fund Balance in the respective fund. Encumbrances reported at June 30, 2013 amounted to $156,035.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) Unassigned fund balance Includes all other General Fund net position that do not meet the definition of the above four classifications and are deemed to be available for general use by the School District. In funds other than the General Fund, the unassigned fund balance includes deficit balances resulting from overspendingofrestricted,committedorassignedfundbalance. OrderofUseofFundBalance: The Board of Education is the highest level of decisionmaking authority at the District in relation to committing or assigning fund balances. Assignments are generally authorized through voter approvals during the annual budget vote. The assigned appropriated fund balance represents the amounts approved by voters in May 2013 for the 20132014 fiscal year budget which totaled $1,000,000. The assigned unappropriated fund balance of $156,035 generally represents encumbrances and other items which were authorized through voter approvals through approval of the 20122013 fiscal year budget whichwasapprovedbyvotersinMay2012. The Districts policy is to apply expenditures first against restricted balances, then to assigned fund balancesandfinallytounassignedfundbalances. UnexpendedSurplusFunds: New York State Real Property Tax Law (section 1318) limits the amount of unexpended surplus funds a school district can retain to no more than 4 percent of the next years budgetary appropriations. The 4% limitation is $1,100,000 which is derived from the 20122013 budget of $27,500,000 approved by voters inMay2013. Fundsproperlyretainedunderothersectionsoflaw(i.e.,reserve fundsestablishedpursuanttoNewYork State Education Law or New York State General Municipal Law) are excluded from the 4 percent limitation. Unexpended surplus are interpreted to be applied to unrestricted fund balance (the total of the committed, assigned, and unassigned classifications), minus appropriated fund balance and encumbrancesincludedincommittedandassignedfundbalance.TheDistrictsunrestrictedfundbalance is $704,381 which is less than 4% of next years budgetary appropriations, which is less than the 4% maximumlimitation.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) S) Reserves: The establishment of reserves is generally authorized by either the General Municipal Law (GML) or EducationLawofNewYorkState.NewYorkStatestatutesdefinetheunderlyingpurposeanduseofsuch reserves, including the appropriate recordkeeping for such reserves. Reserves are mechanisms for accumulating cash for future capital outlays and other allowable purposes. The District has the following reserves: a) UnemploymentInsuranceReserve Unemployment Insurance Reserve (GML 6m) is used to pay the cost of reimbursement to the State Unemployment Insurance Fund for payments made to claimants where the employer has elected to use the benefit reimbursement method. The reserve may be established by Board action and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal years budget. If the District elects to convert to tax (contribution) basis, excess resources in the fund over the sum sufficient to pay pending claims may be transferred to any other reserve fund. This reserve is accountedforintheGeneralFund. b) PropertyLossandLiabilityClaimsReserve(EducationLaw1709[8c]) Thepurposeofthisreserveistocoverpropertylossandliabilityclaims.Thereservewascreatedbya resolution of the Board of Education and there are no referendum requirements to create the funds orexpendmoneyfromthefundsforpropertylossandliabilityclaims.Fundingforthereserveisfrom budgetary appropriations. The maximum amount of the reserve is the greater of $15,000 or 3% of theannualbudget.TheannualbudgetapprovedbyvotersinMay2013was$27,500,000;assuchthe Districtsmaximumreservecannotexceed$825,000. c) TaxCertiorariReserve(EducationLaw3651[1a]) Thepurposeofthisreserveistopayjudgmentsandclaimsintaxcertiorariproceedingsinaccordance with article 7 of the New York State Real Property Tax Law. There is no requirement for voters to approve such reserve and the reserve is funded from budgetary appropriations. The total amount of the reserve may not exceed the amount that might reasonably be deemed necessary to meet anticipated tax certiorari judgments and claims. Monies not expended for the payment of judgments or claims arising out of tax certiorari proceedings must be returned to the general fund on or before the first day of the 4th fiscal year following the deposit of such monies. The reserve is accounted for intheGeneralfund.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) d) EmployeeBenefitAccruedLiabilityReserveFund(GML6p) The purpose of this reserve is to pay for any accrued employee benefit due an employee on terminationoftheemployeesservice.ThereserveiscreatedbyresolutionoftheBoardofEducation and there is no requirement for a referendum to create or expend monies from the reserve. The reserve is generally funded from budgetary appropriations. Employee benefits for this reserve are defined as the cash payment of the monetary value of accrued and accumulated but unused and unpaid sick leave, personal leave, holiday leave, vacation time and other time allowances earned by employees of the District. The District is not allowed to use this fund to pay the cost of health insurance for retired employees. The 201213 New York State Budget allowed districts to withdraw excess amounts from this reserve; the excess amount is the lesser of the dollar value of excess funding as determined by the New York State Comptrollers office or the amount of the school districts remaining gap elimination adjustment as calculated but the Commissioner of Education. In theyearendedJune30,2013theDistrictutilized$206,346ofthisexcessreserve. e) ERSRetirementReserve(GML6r) The purpose of this reserve fund is to accumulate moneys for the payment of retirement contributionstotheNewYorkStateandLocalEmployeesRetirementSystem(ERS),pursuanttothe Retirement and Social Security Law. The establishment of this reserve was approved by the Board of EducationonJune20,2012. f) CapitalReserveFunds(EducationLaw3651) The purpose of these reserves are to pay the cost of any object or purpose for which bonds may be issued by, or for the objects or purposes of, a school district pursuant to the Local Finance Law. Establishment of such reserves requires an approval by a majority of qualified voters. Each capital reserve that is established must specify the purpose for such capital reserve, the ultimate amount of the reserve and the probable term and source from which funding will be obtained for the reserve. The source of the funding is generally an annual amount necessary to meet the requirements of the voter proposition. The maximum reserve amount represents the gross amounts that the District can include as a reserve; reductions/uses of capital reserves cannot be further replenished. The District hasthefollowingcapitalreserves:
(1)
SchoolBusReservefund ThisreservewasapprovedbyDistrictvotersonMay15,2012. This reserve was established for the purchase of school buses, vehicles and equipment, and costs related to such purchases. This reserve has a maximum funding of $750,000 plus earnings thereon and the term of the fund is for a 5 year period, ending May 15, 2017. As of June 30, 2013, this reserve has been funded to its maximum limit. On May 21, 2013, voters approved the use of $150,000 to fund the purchase of buses for the 20132014schoolyear.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) f) CapitalReserveFunds(EducationLaw3651)(continued) Building Capital Reserve fund This reserve was approved by District voters on May 15, 2007. This reserve was established for site work, reconstruction, and equipping of school buildings and facilities, and costs related to such activities. This reserve has a maximum funding of $1,000,000 plus earnings thereon and the term of the fund is for a 10 year period, ending May 15, 2017. As of June 30, 2013, this reserve has been funded to its maximum limit. On May 21, 2013 voters approved the use of $270,000 to fund the purchase and installation of security locks throughout the District, resurfacing of the athletic track and the purchase of a lathe for the Project Lead the Way program for the 20132014schoolyear. Operations Capital Reserve fund This reserve was approved by District voters on May 19, 2009. This reserve was established to finance the purchase of equipment and costs related to such equipment. This reserve has a maximum funding of $250,000 plus earningsthereonandthetermofthefundisfora5yearperiod,endingMay19,2014.As ofJune30,2013,thisreservehasbeenfundedtoitsmaximumlimitandsincetheDistrict did not embark on a capital project for this reserve the reserve has been reclassified to unassignedfundbalance.
(2)
(3)
T) Encumbrances: Encumbrances represent formal commitments (usually contracts or purchase orders) to acquire goods or services not yet received. The use of encumbrances is a component of budgetary control used by the District to lessen the risk that expenditures exceed appropriations. Encumbrances outstanding as of June 30th do not represent expenditures of the district for the year ended June 30, 2013. Encumbrances are included within restricted resources for such activities that are restricted and other encumbrances are consideredassignedbasedontheformalcommitment. U) NewAccountingStandards: The District has adopted all current Statements of the Governmental Accounting Standards Board (GASB) that are applicable. At June 30, 2013, the District implemented the following new standard issued by GASB: GASB has issued Statement 62, Codification of Accounting and Financial Reporting Guidance Contained in PreNovember 30, 1989 FASB and AICPA Pronouncements, which incorporates into the GASB's authoritative literature, certain accounting and financial reporting guidance that is included in certain pronouncementsissuedonorbeforeNovember30,1989,whichdoesnotconflictwithorcontradictGASB pronouncements. GASB has also issued Statement 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, which provides financial reporting guidance for deferred outflows ofresourcesanddeferredinflowsofresources.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note1Summaryofcertainsignificantaccountingpolicies(continued) V) FutureChangesinAccountingStandards: GASB has also issued Statement 65, Items Previously Reported as Assets and Liabilities, which clarifies the appropriate reporting of deferred outflows of resources and deferred inflows of resources to ensure consistencyinfinancialreporting.TheDistrictiscurrentlystudyingthestatementandplansonadoptionif andwhenrequired,whichwillbefortheJune30,2014financialstatements. GASB has also issued Statement 66, Technical Corrections 2012, which enhances the usefulness of financial reports by resolving conflicting accounting and financial reporting guidance that could diminish the consistency of financial reporting. The District is currently studying the statement and plans on adoptionifandwhenrequired,whichwillbefortheJune30,2014financialstatements. GASBhasalsoissuedStatement67,FinancialReportingforPensionPlans,revisesexistingguidanceforthe financial reports of most pension plans. The District is currently studying the statement and plans on adoptionifandwhenrequired,whichwillbefortheJune30,2014financialstatements. GASB has also issued Statement 68, Accounting and Financial Reporting for Pensions, revises and establishes new financial reporting requirements for most governments that provide their employees with pension benefits. The District is currently studying the statement and plans on adoption if and when required,whichwillbefortheJune30,2015financialstatements. GASB has issued Statement 69, Government Combinations and Disposals of Government Operations, effective for the year ending June 30, 2015. The District is currently studying the statement and plans on adoptionifandwhenrequired,whichwillbefortheJune30,2015financialstatements. GASB has issued Statement 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, effective for the year ending June 30, 2015. The District is currently studying the statement andplansonadoptionifandwhenrequired,whichwillbefortheJune30,2015financialstatements. Note 2 Explanation of certain differences between governmental fund statements and Districtwide statements Due to the differences in the measurement focus and basis of accounting used in the governmental fund statements and the Districtwide statements, certain financial transactions are treated differently. The basic financial statements contain a full reconciliation of these items. The differences result primarily from the economic focus of the Statement of Activities, compared with the current financial resources focus of the governmentalfunds. A) Totalfundbalancesofgovernmentalfundsversusnetpositionofgovernmentalactivities: Total fund balances of the Districts governmental funds differ from Net Position of governmental activities reported in the Statement of Net Position. This difference primarily results from the additional longterm economic focus of the Statement of Net Position versus the solely current financial resources focusofthegovernmentalfundBalanceSheets.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note 2 Explanation of certain differences between governmental fund statements and Districtwide statements(continued) B)StatementofRevenues,ExpendituresandChangesinFundBalancevs.StatementofActivities: Differences between the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balance and the Statement of Activities fall into one of three broad categories. The amounts shown belowrepresent: i) Longtermrevenuedifferences: Longterm revenue differences arise because governmental funds report revenues only when they are considered available, whereas the Statement of Activities reports revenues when earned. Differences in longterm expenses arise because governmental funds report on a modified accrual basis, whereas the accrual basis of accounting is used on the Statement of Activities. ii) Capitalrelateddifferences: Capital related differences include the difference between proceeds for the sale of capital assets reported on governmental fund statements and the gain or loss on the sale of assets as reported on the Statement of Activities, and the difference between recording an expenditure for the purchase of capital items in the governmental fund statements and depreciation expense on thoseitemsasrecordedintheStatementofActivities. iii) Longtermdebttransactiondifferences: Longterm debt transaction differences occur because both interest and principal payments are recorded as expenditures in the governmental fund statements, whereas interest payments are recorded in the Statement of Activities as incurred, and principal payments are recorded as a reductionofliabilitiesintheStatementofNetPosition. Note3Stewardship,complianceandaccountability Budgets: The District administration prepares a proposed budget for approval by the Board of Education for the General Fund which legal (appropriated) budgets are adopted. This budget must be presented to the voters in three components: (1) a Program Component, (2) a Capital Component, and (3) and Administrative Component. The budget must be written in plain language and include categories of revenues, expenditures and fund balance information, as well as comparison data from the prior years budget. The budget and/or proposition(s) may be submittedtovotersnomorethantwotimes.Ifthevotersfailtoapprovethebudgetafterthesecondsubmission, the Board of Education must adopt a contingency budget. The Districts 20122013 budget was approved by votersinMay2012andtheDistricts20132014budgetwasapprovedbyvotersinMay2013.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note3Stewardship,complianceandaccountability(continued) Budgets:(continued) Appropriations established by the adoption of the budget constitute a limitation on expenditures (and encumbrances) that may be incurred. Appropriations lapse at the end of the fiscal year unless expended or encumbered.Encumbranceswilllapseifnotexpendedinthesubsequentyear.Appropriationsauthorizedforthe current year are increased by the planned use of specific reserves, and budget amendments approved the Board of Education as a result of selected new revenue sources not included in the original budget (when permitted by law). Thesesupplementalappropriationsmayoccursubjecttolegalrestrictions,iftheBoardapprovesthembecauseof a need that exists which was not determined at the time the budget was adopted. No supplemental appropriationsoccurredduringtheyear. Budgets are adopted annually on a basis consistent with accounting principles generally accepted in the United States of America. Appropriations authorized for the year are increased by the amount of encumbrances carried forward from the prior year. The budget and actual comparison reflects budgeted and actual amounts for funds withlegallyauthorized(appropriated)budgets. Budgetsarealsorequiredtobepreparedfortheschoolfoodservice,specialaid,debtserviceandcapitalprojects fundasrequiredbytheNewYorkStateUniformSystemofAccountsforSchoolDistrictsandtheStateofNewYork Office of the State Comptroller. These budgets are considered to be nonappropriated budgets, which exempts the District from presenting the required budgetary comparison information within these financial statements. SincetheGeneralFundistheonlyappropriatedbudgetfortheDistrict,thebudgetarycomparisonispresentedas requiredsupplementaryinformationinthesefinancialstatements. Note4Cashandcashequivalentscustodialcreditandconcentrationofcredit Custodialcreditriskisthe riskthatintheeventofabankfailure, theDistrictsdepositsmaynotbereturnedtoit. While the District does not have a specific policy for custodial credit risk, New York State statutes govern the Districtsinvestmentpolicies,asdiscussedpreviouslyintheseNotes. The Districts aggregate bank balances of $5,693,667 are either insured or collateralized with securities held by thepledgingfinancialinstitutionintheDistrictsname.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note5Capitalassets CapitalassetbalancesandactivityfortheyearendedJune30,2013wereasfollows: Beginning Retirements/ Balance Additions Reclassifications
Ending Balance
Governmental activities: Capital assetsthatare notdepreciated: Land Constructioninprocess Total nondepreciable historical cost Capital assetsthatare depreciated: Buildings Furniture andequipment Total depreciable historical cost Lessaccumulateddepreciation: Buildings Furniture andequipment Total accumulateddepreciation Total historical cost,net
$74,885 17,748,574 17,823,459
$ 2,561,173 2,561,173
$ (19,892,420) (19,892,420)
$74,885 417,327 492,212
42,845,470 5,215,245 48,060,715
622,595 622,595
19,892,420 (358,995) 19,533,425
62,737,890 5,478,845 68,216,735
22,624,456 3,089,978 25,714,434 $ 40,169,740
1,339,808 514,496 1,854,304 $1,329,464
(248,543) (248,543) $(110,452)
23,964,264 3,355,931 27,320,195 $ 41,388,752
Depreciationexpense waschargedto governmental functionsasfollows: General support Instruction Pupil transportation
$ 166,887 1,557,615 129,802 $1,854,304
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note6Shorttermdebt The District may issue Bond Anticipation Notes (BAN), in anticipation of proceeds from the subsequent sale of bonds. These notes, including any discount or premium, are recorded as current liabilities of the funds that will actuallyreceivetheproceedsfromtheissuanceofbonds.StatelawrequiresthatBANsissuedforcapitalpurposes be converted to longterm financing within five years after the original issue date. A summary of BAN activity for theyearisasfollows:
BANmaturing7/27/2012@1.00% BANmaturing7/27/2012@1.50%
Beginning Balance $ 13,500,000 5,500,000 $ 19,000,000
Issued $ $
Redeemed $13,500,000 5,500,000 $19,000,000
Ending Balance $ $
The$19,000,000ofBANswereredeemedwiththeissuanceof2012SeriesBbondsintheamountof$18,145,000. The payment occurred on July 27, 2012. The remaining portion of the BAN, $855,000, was redeemed through appropriationsfromthegeneralfundinthe20122013budgetyear. Note7Longtermdebt Serial Bonds the District borrows money in order to acquire land or equipment or construct buildings and improvements. The Districts serial bonds generally require payments of interest only in December and interest andprincipalinJuneeachyear. The following is a summary of the School Districts notes payable and longterm debt for the year ended June 30, 2013:
Description School District(serial)Bonds,2006(BOCESproject) School District(serial)Bonds,2009 School District(serial)Bonds,2010 School District(serial)Bonds,2011 School District(serial)Bonds,2012SeriesB School District(serial)Bonds,2012SeriesA School District(serial)Bonds,2013 School District(refundingserial)Bonds,2013 Dateof OriginalIssue 6/15/2006 6/17/2009 6/15/2010 6/15/2011 5/15/2012 5/15/2012 6/20/2013 6/20/2013 Original Amount 4,864,257 400,000 356,238 272,000 18,145,000 1,006,603 366,000 4,350,000 YearofFinal Maturity 2032 2014 2015 2016 2026 2025 2018 2022 InterestRate (%) 4.125,4.375 2.753.19 2.3 2.47 2.62 2.79 1.52.0 1.052.75 Outstanding Amount $ 4,105,000 85,000 150,000 165,000 18,145,000 820,000 366,000 4,350,000 $28,186,000
Effective June 19, 2013, the District issued a $4,350,000 Refunding Bond to refund the Districts previously outstanding $4,355,000 principal balance of the School District (Serial) Bonds, 2002, 2003A, and 2003B. The present value of cash flow savings amounts to approximately $324,000 over the remaining nine year term of the Refunding Bond. The liability for the defeased bonds, $4.355 million, and the trust account assets are not includedinthefinancialstatements.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note7Longtermdebt(continued): Interest paid and expensed on longterm debt for the year was $785,627. Interest paid on the Serial Bonds varies fromyeartoyear,inaccordancewiththeinterestratesspecifiedinthebondagreements. Bondholders are protected in the event of default by State Finance Law Section 99b, which constitutes a covenant with bondholders. In the event of default the State Comptroller is required to intercept state aid and assistancetoapplytothepaymentofdefaultedprincipaland/orinterest. Longtermliabilitybalancesandactivityfortheyeararesummarizedbelow:
Balance at June 30,2012 Governmentactivities Serial bonds Otherpostemploymentbenefitspayable Compensatedabsences Total longtermliabilities $30,215,000 7,539,742 192,711 $ 37,947,453 Balance at June30,2013 $28,186,000 8,919,727 173,419 $37,279,146 Amounts Due within One Year $ 2,451,000 $ 2,451,000
Increase $361,000 2,873,594 $3,234,594
Decrease $2,390,000 1,493,609 19,292 $3,902,901
TheGeneralFundhastypicallybeenusedtoliquidatelongtermliabilitiessuchascompensatedabsences. Thefollowingisasummaryofthematurityoflongtermindebtedness: Fiscal yearendedJune 30, Principal Interest Total
2014 2015 2016 2017 2018 20192023 20242028 20292033 Totals

$2,451,000 2,435,000 2,430,000 2,430,000 2,390,000 8,295,000 6,580,000 1,175,000 $28,186,000
$838,680 767,869 695,461 619,232 541,625 1,910,896 710,926 131,468 $6,216,157
$3,289,680 3,202,869 3,125,461 3,049,232 2,931,625 10,205,896 7,290,926 1,306,468 $34,402,157
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note8Interfundbalancesandactivity Interfund receivables and payables, other than between governmental activities and fiduciary funds, are eliminated on the Statement of Net Position. The District typically transfers from the General Fund to the Capital Fund to help fund capital renovations and additions. The district also transfers from the General Fund to the SpecialAidfundthelocalportionoftheSpecialEducationSummerSchoolProgram. The District typically loans resources between funds for the purpose of mitigating the effects of transient cash flow issues. All interfund payables are expected to be repaid within one year. A summary of the interfund activityfortheyearendingJune30,2013: Receivable Payable Revenues Expenditures General Fund $645,956 $ $ $ 7,395 Special AidFund 95,403 7,395 Capital Fund 550,553 Total governmentactivities $645,956 $645,956 $7,395 $ 7,395 Note9Pensionplans The District participates in the New York State Employees Retirement System (ERS) and the New York State Teachers Retirement System (TRS). These are costsharing multiple employer public employee retirement systems. The Systems offer a wide range of plans and benefits, which are related to years of service and final averagesalary,vestingofretirementbenefits,death,anddisability. The New York State Teachers Retirement Board administers NYSTRS. The System provides benefits to plan membersandbeneficiariesasauthorizedbytheEducationLawandtheRetirementandSocialSecurityLawofthe StateofNewYork. The New York State Teachers Retirement System (TRS) was created and exists, pursuant to Article 11 of the New State Education Law. The System is the administrator of a costsharing, multipleemployer public employee retirement system, administered by a 10member Board to provide pension benefits for teachers employed by participating employers in the State of New York, excluding New York City. The benefits provided to members of the System are established by New York State law and may be amended only by the Legislature with the Governors approval. Benefit provisions vary depending on date of membership and are subdivided into the followingsixclasses: Tier 1 Members who last joined prior to July 1, 1973 are covered by the provisions of Article 11 of the EducationLaw. Tier 2 Members who last joined on or after July 1, 1973 and prior to July 27, 1976 are covered by the provisionsofArticle11oftheEducationLawandArticle11oftheRetirementandSocialSecurityLaw. Tier3MemberswholastjoinedonorafterJuly27,1976andpriortoSeptember1,1983arecoveredby theprovisionsofArticle14andArticle15oftheRetirementandSocialSecurityLaw. Tier4MemberswholastjoinedonorafterSeptember1,1983andpriortoJanuary1,2010arecovered bytheprovisionsofArticle15oftheRetirementandSocialSecurityLaw.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note9Pensionplans(continued): Tier5MemberswhojoinedonorafterJanuary1,2010arecoveredbytheprovisionsofArticle15ofthe RetirementandSocialSecurityLaw. Tier 6 Members who joined on or after April 1, 2012 are covered by the provision of Article 15 of the RetirementandSocialSecurityLaw. TheDistrictisrequired tocontributeat anactuariallydetermined ratewhichisadoptedby theRetirementBoard. The employer contribution rate was 11.84% for 20122013 salaries. In July 2013, the Retirement Board adopted an employer contribution rate of 16.25% for 20132014 salaries which will be paid in the fall 2014. The amounts paid are withheld from the Districts State Aid payments. Members may or may not contribute depending on their Tier level. Members in Tier 1 and 2 do not contribute towards the plan. Members in Tier 3 and 4 who have less than 10 years of service or membership are required to contribute 3% of their salary to the system. Tier 5 members are required by law to contribute 3.5% of salary throughout their active membership. Tier 6 members will contribute 3.5% from April 1, 2012 through March 31, 2013. Beginning April 1, 2013, during any Tier 6 members first 3 school years of membership, the Tier 6 member will contribute a percentage based on a projection, by the employer, of annual wages during those school years in accordance with a Tier 6 contribution chart.Thecontributionratesrangefrom3%to6%andarebasedonprojectedannualwages.Beginninginyear4 ofmembership,Tier6memberscontributionratewillbedeterminedbyTRS. TRS issues a publicly available financial report that contains financial statements and required supplementary information for the System. The report may be obtained by writing to NYSTRS, 10 Corporate Woods Drive, Albany, New York 122112395 or by email at communit@nystrs.state.ny.us. This report may be found also at www.nystrs.org. ERSprovidesretirementbenefitsaswellasdeathanddisabilitybenefits.Obligationsofemployersandemployees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (NYSRSSL). As set forth in the NYSRSSL, the Comptroller of the State of New York (Comptroller) serves as sole trusteeandadministrativeheadoftheNYSLRS.TheComptrollershalladoptandmayamendrulesandregulations fortheadministrationandtransactionofthebusinessoftheNYSLRSandforthecustodyandcontrolofitsfunds. The NYSLRS issues a publicly available financial report that includes financial statements and required supplementary information. That report may be found at www.osc.state.ny.us/retire/publications/index.php or obtainedbywritingtotheNewYorkStateandLocalRetirementSystem,110StateStreet,Albany,NY12244. The Systems are noncontributory for the employee who joined prior to July 27, 1976. For employees who joined theSystemsafterJuly27,1976,andpriortoJanuary1,2010,employeescontribute3%oftheirsalary,exceptthat employees in the Systems more than ten years are no longer required to contribute. For employees who joined after January 1, 2010, employees in ERS contribute 3% of their salary throughout their active membership and thoseinTRScontribute3.5%throughouttheiractivemembership.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note9Pensionplans(continued): For ERS, under the authority of the NYSRSSL, the Comptroller annually certifies the actuarially determined rates expresslyusedincomputingtheemployerscontributionsbasedonsalariespaidduringtheERSfiscalyearending March31.RequiredcontributionsforNYSTRSandNYSERSwereexpensedasfollows: NYSTRS NYSERS 20122013 $1,011,578 $406,499 20112012 1,112,032 411,755 20102011 829,594 316,572 Note10Postemployment(HealthInsurance)Benefits The District provides postemployment (health insurance, dental insurance, etc.) coverage to retired employees in accordance withtheprovisionsofvariousemployment contracts.Thebenefitlevels,employeecontributionsand employercontributionsaregovernedbytheDistrictscontractualagreements. The District has implemented GASB Statement No. 45, Accounting and Financial Reporting by employers for Postemployment Benefits Other than Pensions. This requires the District to calculate and record a net other postemploymentbenefitobligationatyearend.Thenetotherpostemploymentbenefitobligationisbasicallythe cumulativedifferencebetweentheactuariallyrequiredcontributionandtheactualcontributionsmade. The District recognizes the cost of providing health insurance annually as expenditures in the General Fund of the funds financial statements as payments are made. For the year ended June 30, 2013, the District recognized $1,482,843foritsshareofinsurancepremiumsfor204currentlyenrolledretiredemployeesandbeneficiaries. Currently, there are 468 eligible plan participants as of June 30, 2012. To be eligible for benefits, an employee mustbe55yearsofagewith10yearsofservicewiththeDistrictforeithermedicalordentalcoverage. Medical coverage, the District pays 100% of the premium cost for the medical that was in effect at the time of retirement for employees, and 85% of the cost for spousal premiums. Effective February 1, 2009, the JECSD Transportation Local employees are not eligible for postemployment medical benefits with the exception of a grandfathered group of employees. Effective July 1, 2011, the District pays 90% of the premium cost for postemployment medical benefits for employees not represented by a collective bargaining unit. For Dental coverage,itpaysasubsidyofupto,onaverage,$213perretiree.Thisamountincreasesannually. The District has obtained an actuarial valuation report for the year ending June 30, 2012 dated July 25, 2012 which indicates that the total liability for other postemployment benefits is $40,070,220. The District has elected to amortize this liability over a period of 30 years, which has been determined by the actuarial valuation to be $1,634,372 each fiscal year. The annual required contribution of $2,419,420 reflects this amortization and the normalcostoftheplanwhichisreflectedintheStatementofNetPosition.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note10Postemployment(HealthInsurance)Benefits(continued) AnnualOPEBCostandNetOPEBObligation:
The Districts annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projectedtocovernormalcosteachyearandamortizeanyunfundedactuarialliabilities(orfundingexcess)overa periodnottoexceedthirtyyears.
Annual requiredcontribution InterestonnetOPEBobligation Adjustmenttoannual requiredcontribution Annual OPEBcost Contributionsmade Increase innetOPEBobligation NetOPEBobligationbeginningof year NetOPEBobligationendof year $2,884,326 301,590 (312,322) 2,873,594 (1,493,609) 1,379,985 7,539,742 $8,919,727
The Districts annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligationfortheyearsendedJune30,20092012wereasfollows:
Fiscal YearEnded 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013
Annual OPEBCost $ 2,726,436 2,726,436 2,616,084 2,443,225 2,873,594
Contributions $ 1,489,596 1,482,843 1,493,609
Percentage of Annual OPEBCostContributed 0.0% 0.0% 56.94% 60.69% 51.98%
NetOPEB Obligation $2,726,436 5,452,872 6,579,360 7,539,742 8,919,727
FundedStatusandFundingProgress: As of June 30, 2013, the most recent actuarial valuation date, the plan was not funded. The actuarial accrued liability for benefits was $44,636,614, and the actuarial value of assets was $ 0, resulting in an unfunded actuarial accrued liability (UAAL) of $44,636,614. The covered payroll (annual payroll of active employees covered by the plan) was approximately $10,873,000, and the ratio of the UAAL to the covered payroll was 410.53%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared withpastexpectationsandnewestimatesaremadeaboutthefuture.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoFinancialStatements FortheyearendedJune30,2013 Note10Postemployment(HealthInsurance)Benefits(continued) ActuarialMethodsandAssumptions: Projectionsofbenefitsforfinancialreportingpurposesarebasedonthesubstantiveplan(theplanasunderstood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarialmethodsandassumptionsusedincludetechniquesthataredesignedtoreducetheeffectsofshortterm volatilityinactuarialaccruedliabilitiesandtheactuarialvalueofassets,consistentwiththelongtermperspective ofthecalculations. IntheJune30,2013,actuarialvaluation,theEntryAgeNormalMethod,overalevelpercentofpaywasused.The actuarial assumptions included a 4.00% investment rate of return which is a blended rate of the expected long term investment returns on plan assets and on the employers own investments calculated based on the funded level of the plan at the valuation date, and a combined medical and dental cost trend rate of 13.00% initially, reducedbydecrementstoanultimaterateof10%after7years.Bothratesincludeda2.50%inflationassumption. The actuarial value of assets was determined using techniques that spread the effects of shortterm volatility in the market value of investments over a 30year period. The UAAL is being amortized as a level percentage of projectedpayrollonanopenbasis.TheremainingamortizationperiodatJune30,2013,was26years. Note11RiskManagement The District is exposed to various risks of loss related to torts, theft, damage, injuries, errors and omissions, natural disasters, and other risks. These risks are generally covered by commercial insurance purchased from independentthirdparties.TheDistricthasanestimatedreserveof$65,000relatedtosuchrisks. Note12Donorrestrictedendowments The District administers endowment funds, which are restricted by the donor for the purposes of student scholarships. Donorrestricted endowments are reported at fair value. The District authorizes expenditures from donorrestricted endowments in compliance with the wishes expressed by the donor, which varies among the uniqueendowmentsadministeredbytheDistrict. Note13Contingentliabilities The District has received grants, which are subject to audit by agencies of the State and federal governments. Such audits may result in disallowances and a request for a return of funds. Based on prior audits, the districts administration believes disallowances, if any, will be immaterial. The District is also subject to ongoing litigation andbelievesthatanycontingentlosswouldnotbesignificanttothesefinancialstatements. Note14SubsequentEvents OnAugust6,2013theDistrictissuedaBANintheamountof$1,916,118fortheongoingcapitalproject.Thisnow brings the total borrowing to the maximum allowed under the $21,900,000 project. Repayment of this BAN is scheduledforJuly24,2014.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT RequiredSupplementaryInformation ScheduleofFundingProgressOtherPostemploymentBenefitPlans FortheyearendedJune30,2013
Actuarial Valuation Date July1,2012 July1,2011 July1,2010 July1,2009
Acturaial Value of Assets (a) $ $ $ $
Accuarial Accrued Liability(AAL) (inthousands) (b) $44,636,616 $40,070,220 $42,127,832 $38,489,947
UnfundedAAL (UAAL) (inthousands) Funded (ba) Ratio(a/b) $ 44,636,616 0.00% $ 40,070,220 0.00% $ 42,127,832 0.00% $ 38,489,947 0.00%
UAALasa Percentage CoveredPayroll ofCovered Payroll (inthousands) ((ba)/c) (c) $10,873,000 410.53% $10,608,000 377.74% $10,200,000 413.02% $10,548,020 364.90%
JORDANELBRIDGECENTRALSCHOOLDISTRICT RequiredSupplementaryInformation ScheduleofRevenues,ExpendituresandChangesinFundBalanceBudget(NonGAAPBasis)andActualGeneralFund FortheyearendedJune30,2013

Original Budget REVENUES Local sources Real propertytaxes Nonpropertytaxes Chargesforservices Use of moneyandproperty Sale of propertyandcompensationforloss Miscellaneous Total local sources State sources Federal sources Total revenues OTHERFINANCING SOURCES Transfersfromotherfunds Prioryearencumbrances Use of employee benefitsreserve Appropriatedfundbalance Total revenuesandotherfinancingsources Final Budget Actual (BudgetaryBasis) Final Budget Variance With BudgetaryActual
$ 11,972,181 12,000 45,000 10,000 2,000 185,000 12,226,181 13,938,819 100,000 26,265,000
$ 11,972,181 12,000 45,000 10,000 2,000 185,000 12,226,181 13,938,819 100,000 26,265,000
$ 11,791,699 75,500 44,968 6,202 13,431 187,195 12,118,995 14,387,228 63,645 26,569,868
$(180,482) 63,500 (32) (3,798) 11,431 2,195 (107,186) 448,409 (36,355) 304,868
50,000 885,000 $ 27,200,000
50,000 205,298 885,000 $ 27,405,298
205,298 206,346 $ 26,981,512
(50,000) 206,346 (885,000) $(423,786)
JORDANELBRIDGECENTRALSCHOOLDISTRICT RequiredSupplementaryInformation StatementofRevenues,ExpendituresandChangesinFundEquityGovernmentalFunds FortheyearendedJune30,2013

(a) Original Budget EXPENDITURES General support Boardofeducation Central administration Finance Staff Central services Special items Total general support Instruction Instruction,administrationandimprovement Teachingregularschool Programsforchildrenwithhandicappingconditions Teachingspecial school Instructional media Pupil services Total instruction Pupil transportation Employee benefits Debtservice Total expenditures Otherfinancinguses Transfertootherfunds Total expendituresandotheruses Netchange infundbalances Fundbalance beginning (b) Final Budget Actual Yearend (BudgetaryBasis) Encumbrances Final Budget Variance With BudgetaryActual AndEncumbrances
$30,688 187,004 334,266 450,619 2,082,869 321,849 3,407,295 779,702 6,424,170 1,925,293 84,615 1,184,170 1,109,912 11,507,862 1,590,441 6,312,065 4,382,337 27,200,000
$22,511 194,866 726,135 546,827 2,007,276 336,200 3,833,815 851,836 6,743,348 2,402,764 90,943 1,167,562 1,167,832 12,424,285 1,334,457 5,782,114 4,030,627 27,405,298
$22,401 194,866 726,135 491,052 1,980,662 338,351 3,753,467 843,044 6,787,872 2,399,042 90,943 1,138,901 1,155,978 12,415,780 1,329,631 5,766,366 4,030,627 27,295,871
$110 55,775 26,614 82,499 8,792 10,976 3,722 28,661 11,854 64,005 4,826 4,705 156,035
$ (2,151) (2,151) (55,500) (55,500) 11,043 (46,608)
$ 27,200,000
$ 27,405,298
309,797 $27,605,668 (624,156) 5,803,309
$ 156,035
(309,797) $(356,405)
Fundbalance ending $5,179,153 (a) Includesthe voterapprovedbudgetof$27,200,000plusprioryearencumbrancescarriedoverof$205,298,inaccordance withGASBStatementNo34, BasicFinancial StatementsandManagement'sDiscussionandAnalysisforState andLocal Governments (b) Includesall transfersandotherlegallyauthorizedchangesapplicable tothe fiscal yearasapprovedbythe BoardofEducation (c) Includesthe May2013voterapproveduse ofthe capital reserve forthe nextyearinthe amountof$270,000,the May2012voterapproveduse ofGeneral fundrevenue tocoveraportionofthe buspurchasesinthe amountof$32,402andthe General fundrequiredmatchforthe section4408programin the amountof$7,395
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JORDANELBRIDGECENTRALSCHOOLDISTRICT SupplementaryInformation ScheduleofChangefromAdoptedBudgettoFinalBudgetandtheRealPropertyTaxLimit FortheYearEndedJune30,2013
CHANGEFROMADOPTEDBUDGETTOFINALBUDGET Adoptedbudget Add:Prioryear'sencumbrances Original budget Budgetrevision Final budget SECTION1318OFREALPROPERTYTAXLAW LIMITCALCULATION 201314voterapprovedexpenditure budget maximumallowed(4%of 201314budget) General fundfundbalance subjecttoSection1318of Real PropertyTax Law*: Unrestrictedfundbalance: Assignedfundbalance Unassignedfundbalance Total unrestrictedfundbalance Less: Appropriatedfundbalance Encumbrancesincludedincommittedandassignedfundbalance Total adjustments $ 27,500,000 $ 27,200,000 205,298 27,405,298 $ 27,405,298
1,156,035 704,381 1,860,416
1,000,000 156,035 1,156,035 $ 704,381 2.6%
General fundfundbalance subjecttoSection1318ofReal PropertyTax Law Actual percentage
*Per Office of the State Comptroller's "Fund Balance Reporting and Governmental Fund Type Definitions", Updated April 2011 (Originally Issued November 2010), the portion of General Fund fund balance subject to Section 1318 of the Real Property Tax Law is: unrestricted fund balance (i.e., the total of the committed, assigned, and unassigned classifications), minus appropriated fund balance, amounts reserved for insurance recovery, amounts reserved for tax reduction, and encumbrances included in committedandassignedfundbalance.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT SupplementaryInformation ScheduleofProjectExpendituresCapitalProjectsFund FortheYearEndedJune30,2013
Expenditures Original Appropriation ProjectTitle Renovations $21,900,000 Buses 505,745 Totals $22,405,745 Revised Appropriation $21,900,000 505,745 $22,405,745 PriorYears $17,540,063 $17,540,063 CurrentYear $2,561,173 398,402 $2,959,575 Total $ 20,101,236 398,402 $ 20,499,638 Unexpended Balance $ 1,798,764 107,343 $ 1,906,107 Proceedsof Obligations(a) $ 19,000,000 366,000 $ 19,366,000
MethodsofFinancing Local Sources State Aid(b) (c) $ 438,882 $ 438,882 $ 992,093 32,402 $1,024,495
Total $20,430,975 398,402 $20,829,377
FundBalance June 30,2013 $ 329,739 $ 329,739
(a) Proceeds of obligations only include obligations that impact fund balance which only include longterm debt. Longterm debt is recognizedasrevenuewhenissuedwhichincreasesfundbalance. (b) Local sources represent the monies directly from the Districts appropriations and capital reserves established by the District. All local sourcesareapprovedbyDistrictvotersforuseinspecificvoterapprovedcapitalprojects.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT SUPPLEMENTARYINFORMATION NetInvestmentinCapitalAssets FortheYearEndedJune30,2013
Capital assets,net Deduct: Shorttermportionof bondspayable Longtermportionof bondspayable
$41,388,752
(2,451,000) (25,735,000) (28,186,000)
Netinvestmentincapital assets
$13,202,752
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REPORTONINTERNALCONTROLOVERFINANCIALREPORTINGANDON COMPLIANCEANDOTHERMATTERSBASEDONANAUDITOFFINANCIALSTATEMENTSPERFORMEDIN ACCORDANCEWITHGOVERNMENTAUDITINGSTANDARDS
IndependentAuditorsReport
BoardofEducation JordanElbridgeCentralSchoolDistrict Jordan,NewYork Wehaveaudited,inaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesofAmerica andthestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandardsissuedbythe Comptroller General of the United States, the financial statements of the governmental activities, each majorfund,andtheaggregateremainingfundinformationofJordanElbridgeCentralSchoolDistrict(the District)asofandfortheyearendedJune30,2013,andtherelatednotestothefinancialstatements,which collectivelycompriseJordanElbridgeCentralSchoolDistrictsbasicfinancialstatementsandhaveissuedour reportthereondatedOctober2,2013. InternalControlOverFinancialReporting In planning andperformingourauditofthefinancialstatements,weconsideredJordanElbridgeCentral SchoolDistrictsinternalcontroloverfinancialreporting(internalcontrol)todeterminetheauditprocedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,butnotforthepurposeofexpressinganopinionontheeffectivenessofJordanElbridgeCentral SchoolDistrictsinternalcontrol.Accordingly,wedonotexpressanopinionontheeffectivenessofJordan ElbridgeCentralSchoolDistrictsinternalcontrol. Ourconsiderationofinternalcontroloverfinancialreportingwasforthelimitedpurposedescribedinthe preceding paragraph and was not designed to identify all deficiencies in internal control over financial reportingthatmightbesignificantdeficienciesormaterialweaknessesandtherefore,materialweaknesses orsignificantdeficienciesmayexistthatwerenotidentified.However,asdescribedintheaccompanying scheduleoffindingsandquestionedcosts,weidentifiedcertaindeficienciesininternalcontroloverfinancial reporting that we consider to be material weaknesses and other deficiencies that we consider to be significantdeficiencies. Adeficiencyininternalcontrolexistswhenthedesignoroperationofacontroldoesnotallowmanagement oremployees,inthenormalcourseofperformingtheirassignedfunctions,topreventordetectandcorrect misstatementsonatimelybasis.Amaterialweaknessisadeficiency,oracombinationofdeficiencies,in internal control such that there is a reasonable possibility that a material misstatement of the entity's financialstatementswillnotbeprevented,ordetectedandcorrectedonatimelybasis.Weconsiderthe deficiencydescribedintheaccompanyingscheduleoffindingsandquestionedcosts,whichisdescribedas item20131,tobeamaterialweakness.
Asignificantdeficiencyisadeficiency,oracombinationofdeficiencies,ininternalcontrolthatislesssevere thanamaterialweakness,yetimportantenoughtomeritattentionbythosechargedwithgovernance.We considerthedeficienciesdescribedintheaccompanyingscheduleoffindingsandquestionedcosts,which aredescribedasitems20132through20135,tobesignificantdeficiencies. ComplianceandOtherMatters AspartofobtainingreasonableassuranceaboutwhetherJordanElbridgeCentralSchoolDistrictsfinancial statementsarefreeofmaterialmisstatement,weperformedtestsofitscompliancewithcertainprovisions oflaws,regulations,contracts,andgrantagreements,noncompliancewithwhichcouldhaveadirectand material effect on the determination of financial statement amounts. However, providing an opinion on compliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,wedonotexpresssuch anopinion.Theresultsofourtestsdisclosednoinstancesofnoncompliancethatarerequiredtobereported underGovernmentAuditingStandards. WenotedcertainothermattersthatwereportedtomanagementofJordanElbridgeCentralSchoolDistrict inaseparateletterdatedOctober2,2013. JordanElbridgeCentralSchoolDistrictsResponsetoFindings JordanElbridgeCentralSchoolDistrictsresponsestothefindingsidentifiedinourauditaredescribedinthe accompanyingscheduleoffindingsandquestionedcosts.JordanElbridgeCentralSchoolDistrictsresponses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly,weexpressnoopiniononthem. PurposeofthisReport Thepurposeofthisreportissolelytodescribethescopeofourtestingofinternalcontrolandcompliance andtheresultsofthattesting,andnottoprovideanopinionontheeffectivenessoftheDistrictsinternal control or on compliance. This report is an integral part of an audit performed in accordance with GovernmentAuditingStandardsinconsideringtheDistrictsinternalcontrolandcompliance.Accordingly, thiscommunicationisnotsuitableforanyotherpurpose. ThisreportisintendedsolelyfortheinformationanduseoftheBoardofEducation,management,federal awardingagenciesandpassthroughentitiesandisnotintendedtobeandshouldnotbeusedbyanyone otherthanthesespecifiedparties. Syracuse,NewYork October2,2013

REPORTONCOMPLIANCEFOREACHMAJORFEDERALPROGRAMANDREPORTONINTERNAL CONTROLOVERCOMPLIANCEINACCORDANCEWITHOMBCIRCULARA133
IndependentAuditorsReport
BoardofEducation JordanElbridgeCentralSchoolDistrict Jordan,NewYork ReportonComplianceforEachMajorFederalProgram We have audited Jordan Elbridge Central School Districts compliance with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A133 Compliance SupplementthatcouldhaveadirectandmaterialeffectoneachofJordanElbridgeCentralSchoolDistricts majorfederalprogramsfortheyearendedJune30,2013.JordanElbridgeCentralSchoolDistrictsmajor federalprogramsareidentifiedinthesummaryofauditorsresultssectionoftheaccompanyingscheduleof findingsandquestionedcosts. ManagementsResponsibility Managementisresponsibleforcompliancewiththerequirementsoflaws,regulations,contracts,andgrants applicabletoitsfederalprograms. AuditorsResponsibility OurresponsibilityistoexpressanopiniononcomplianceforeachofJordanElbridgeCentralSchoolDistricts majorfederalprogramsbasedonourauditofthetypesofcompliancerequirementsreferredtoabove.We conductedourauditofcomplianceinaccordancewithauditingstandardsgenerallyacceptedintheUnited StatesofAmerica;thestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, Local Governments,andNonProfitOrganizations.ThosestandardsandOMBCircularA133requirethatweplan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliancerequirementsreferredtoabovethatcouldhaveadirectandmaterialeffectonamajorfederal program occurred. An audit includes examining, on a test basis, evidence about Jordan Elbridge Central School Districts compliance with those requirements and performing such other procedures as we considerednecessaryinthecircumstances. Webelievethatourauditprovidesareasonablebasisforouropiniononcomplianceforeachmajorfederal program. However, our audit does not provide a legal determination of Jordan Elbridge Central School Districtscompliance.
OpiniononEachMajorFederalProgram Inouropinion,JordanElbridgeCentralSchoolDistrictcomplied,inallmaterialrespects,withthetypesof compliancerequirementsreferredtoabovethatcouldhaveadirectandmaterialeffectoneachofitsmajor federalprogramsfortheyearendedJune30,2013. ReportonInternalControloverCompliance Management of JordanElbridge Central School District is responsible for establishing and maintaining effectiveinternalcontrolovercompliancewiththetypesofcompliancerequirementsreferredtoabove.In planningandperformingourauditofcompliance,weconsideredJordanElbridgeCentralSchoolDistricts internalcontrolovercompliancewiththetypesofrequirementsthatcouldhaveadirectandmaterialeffect on each major federal program as a basis for designing auditing procedures that are appropriate in the circumstancesforthepurposeofexpressinganopiniononcomplianceforeachmajorfederalprogramand totestandreportoninternalcontrolovercomplianceinaccordancewithOMBCircularA133,butnotfor thepurposeofexpressinganopinionontheeffectivenessofinternalcontrolovercompliance.Accordingly, we do not express an opinion on the effectiveness of JordanElbridge Central School Districts internal controlovercompliance.
Our consideration of internal control over compliance was for the limited purpose described in the precedingparagraphandwasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliance that might be material weaknesses or significant deficiencies, and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control over compliance that we consider to be material weaknesses and significantdeficiencies.
A deficiency in internal control over compliance exists when the design or operation of a control over compliancedoesnotallowmanagementoremployees,inthenormalcourseofperformingtheirassigned functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a federalprogramonatimelybasis.Amaterialweaknessininternalcontrolovercomplianceisadeficiency,or combinationofdeficienciesininternalcontrolovercompliance,suchthatthereisareasonablepossibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented,ordetectedandcorrectedonatimelybasis.Weconsiderthedeficiencyininternalcontrolover compliancedescribedintheaccompanyingscheduleoffindingsandquestionedcostsasitem20131tobea materialweakness. Asignificantdeficiencyininternalcontrolovercomplianceisadeficiency,oracombinationofdeficiencies,in internalcontrolovercompliancewithatypeofcompliancerequirementofafederalprogramthatisless severe than a material weakness in internal control over compliance, yet important enough to merit attentionbythosechargedwithgovernance.Weconsiderthedeficiencyininternalcontrolovercompliance describedintheaccompanyingscheduleoffindingsandquestionedcostsasitems20134tobesignificant deficiencies. ScheduleofExpendituresofFederalAwards WehaveauditedthefinancialstatementsofJordanElbridgeCentralSchoolDistrictasofandfortheyear ended June 30, 2013, and have issued our report thereon dated October 2, 2013, which contained an
unqualifiedopiniononthosefinancialstatements.Ourauditwasperformedforthepurposeofformingan opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awardsispresentedforpurposesofadditionalanalysisasrequiredbyCircularA133andisnotarequired partofthefinancialstatements.Suchinformationistheresponsibilityofmanagementandwasderivedfrom andrelatesdirectlytotheunderlyingaccountingandotherrecordsusedtopreparethefinancialstatements. The information has been subjected to the auditing procedures applied in the audit of the financial statementsandcertainotherprocedures,includingcomparingandreconcilingsuchinformationdirectlyto theunderlyingaccountingandotherrecordsusedtopreparethefinancialstatementsortothefinancial statementsthemselves,andotheradditionalproceduresinaccordancewithauditingstandardsgenerally acceptedintheUnitedStatesofAmerica.Inouropinion,thescheduleofexpendituresoffederalawardsis fairlystated,inallmaterialrespects,inrelationtothefinancialstatementsasawhole. RestrictedUse Thepurposeofthisreportoninternalcontrolovercomplianceissolelytodescribethescopeofourtesting of internal control over compliance and the results of that testing based on the requirements of OMB CircularA133.Accordingly,thisreportisnotsuitableforanyotherpurpose. Syracuse,NewYork October2,2013
JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoScheduleofExpendituresofFederalAwards
Federal CFDA Number U.S.DepartmentofAgriculture: (Passedthroughthe State Departmentof Education) (Grantor'sNo.251601060000) ChildNutritionCluster National School BreakfastProgram National School LunchProgram National School LunchProgramcommodities Total U.S.DepartmentofAgriculture U.S.DepartmentofEducation: (Passedthroughthe State Departmentof Education) (Grantor'sNo.251601060000) SpecialEducationCluster(IDEA) Special EducationGrantstoStates(IDEA,B) Special EducationPreschool Grants(IDEA,Preschool) Total Special EducationCluster(IDEA) Title IGrantstoLocal Educational Agencies (Title I,PartAof the ESEA) RecoveryEducationJobsFund(EdJobs) RecoveryRace tothe Top MentorTeacherInternshipProgram ImprovingTeacherQualityState Grants(Title II,A) Total U.S.DepartmentofEducation Total ExpendituresofFederal Awards 84.027A 84.173A 0032120643 0033120643 354,467 13,654 368,121 10.553 10.555 10.555 $44,117 195,185 40,604 279,906
Passthrough Number
CurrentYear Expenditures
84.010A 84.410A 84.395A 84.397A 84.367A
0021122105 5400 122105 5500132105 0663130104 0147122105
210,240 171,532 30,380 9,024 67,896 857,193 $1,137,099
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JORDANELBRIDGECENTRALSCHOOLDISTRICT NotestoScheduleofExpendituresofFederalAwards
1. SignificantAccountingPolicies The accompanying schedule of expenditures of federal awards is a summary of the activity of JordanElbridgeCentralSchoolDistrictsfederalawardprogramsandpresentstransactionsthatare includedinthebasicfinancialstatementsoftheDistrictpresentedonthemodifiedaccrualbasisof accounting,asrequiredbyaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica. 2. BasisofAccounting Theaccompanyingscheduleofexpendituresoffederalawardsincludesthefederalgrantactivityof JordanElbridge Central School District and is presented on the accrual basis of accounting. The informationinthisscheduleispresentedinaccordancewiththerequirementsofOMBCircularA 133,AuditsofStates,LocalGovernmentsandNonProfitOrganizations.Therefore,someamounts presentedinthisschedulemaydifferfromamountspresentedin,orusedinthepreparationof,the basicfinancialstatements.CFDAnumbersandpassthroughnumbersareprovidedwhenavailable. DuringtheyearendedJune30,2013,JordanElbridgeCentralSchoolDistrictreceivedfundsfrom theAmericanRecoveryandReinvestmentActof2009(RecoveryAct).Suchfundsaredesignated asRecoveryonthescheduleofexpendituresoffederalawardsandamountedto$201,912forthe yearendedJune30,2013.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT StatusofPriorAuditFindingsandRecommendations
FinancialStatementFindings MaterialWeaknesses: 20121MonthlyFinancialClosingProcess Condition:Managementhadnotexaminedorreconciledcertainaccountspriortothestart oftheaudit.Thisincludesconsiderationofallaccountspayable,accruedliability,deferred revenue,duefromstateandfederal,andaccountsreceivablebalances.Significantaudit adjustments, with a net impact to governmental funds in aggregate of approximately $500,000,werenecessarytoreconcileandproperlystatetheaccountspayable,accrued liability,deferredrevenue,duefromstateandfederal,andaccountsreceivablebalancesas ofJune30,2012. Recommendation: Monthly financial closing policies and procedures designed by managementshouldbeimplementedrequiringtimelyreconciliationandreviewofaccount balances Currentstatus:Seecurrentyearfinding20131. 20122BusinessOfficePoliciesandProcedures Condition: The District has not fully implemented its policies and procedures for fiscal operations within the business office, including: cash receipts, cash disbursements and payroll. Certain transactions selected for testing were found to lack adequate required supportingdocumentation.TheDistrictdesignedpoliciesandproceduresduringthefiscal year to address the business office functions. Such policies and procedures were not completeduntilMay2012andwerenotfullyimplementedbyJune2012. Recommendation:Managementshouldcontinueworkingtoimplementthepoliciesand procedureswithrespecttofiscaloperationwithinthebusinessoffice.
Currentstatus:Managementhastakencorrectiveaction.
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FinancialStatementFindings(continued) MaterialWeaknesses(continued): 20123PreparationofFinancialStatements Condition: Management has established a chart of accounts and has structured its trial balancetoreflectNewYorkStatefinancialreportingrequirementsandrequirementsofthe Governmental Accounting Standards Board. Although all adjusting and correcting audit entries were approved by management, management does not possess the ability to prepare external full fund basis and governmentwide financial statements, including all required financial statement disclosures, in accordance with governmental accounting standards,andrequiredsupplementaryinformation. Recommendation:Managementshouldexamineresponsibilitiesandresourcestoidentify an individual with the skillset to prepare the financial statements, including notes and supplementaryinformation. Currentstatus:Managementhastakencorrectiveaction. SignificantDeficiencies: 20124ScheduleofExpendituresofFederalAwards(SEFA) Condition:Managementwasnotabletopreparethescheduleofexpendituresoffederal awards.CircularA133,subpartC,Section300,statesthattheauditee(theDistrict)should identify in its accounts all federal awards received and expended, as well as the federal programs under which they were received. Federal program and award identification includes,asapplicable,theCFDAtitleandnumber,theawardnumberandyear,thename of the federal granting agency, and the name of the passthrough entity. Using this information,theauditee(theDistrict)shouldbeabletoreconcileamountspresentedinthe financialstatementstorelatedamountsinthescheduleofexpendituresoffederalawards. Totalfederalexpenditureswere$1,325,299fortheyearendedJune30,2012. Recommendation:WerecommendtheDistrictseekoutandprovidethenecessarytraining tothedesignatedindividualtoprepareacompleteandaccurateSEFA. Currentstatus:Managementhastakencorrectiveaction.
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FinancialStatementFindings(continued) OtherControlDeficiencies: 20125CashManagement Condition:TheDistrictcurrentlymaintainsseparatebankaccountsforitsrespectivefunds. However, we noted instances whereby the District had not internally transferred the necessarycashbalancestoreimbursetheGeneralFundforobligationspaidonbehalfofthe School Food Service Fund throughout the year under audit. The total of these transfers shouldhavebeen$284,712. Recommendation: We recommend the District continue to implement its cash managementpoliciesandprocedurestoensurethenecessarytransfersaremadebetween bankaccountstoaccuratelyreflectthecashbalanceandactivityofeachrespectivefund. Currentstatus:Seecurrentyearfinding20133. 20126InterfundAccounting Condition: The District routinely has transactions among different governmental funds which result in receivables / payables between funds. Interfund activity has not been settledwithinoneyear,whichisnotconsistentwithrequirementsnotedbelow.Inaddition, interfundactivitywasnotproperlyrecordedduringtheyearunderaudit,requiringaudit adjustmentsofapproximately$398,000. National Council on Governmental Accounting (NCGA) Statement No. 1, Governmental AccountingandFinancialReportingPrinciples,paragraphs57and75statethatinterfund transfersshouldberecognizedintheperiodinwhichtheinterfundreceivableandpayable arise. If the interfund receivable and payable are not expected to be settled within a reasonableamountoftime,theinterfundbalancesshouldbereduced. Recommendation:Managementshouldcompletetheimplementationprocesstoensure interfundactivityisrecordedandbalancesaresettledwithinoneyear. Currentstatus:Seecurrentyearfinding20134.
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FinancialStatementFindings(continued) OtherControlDeficiencies:(continued) 20127PayrollExpenseReview Condition: The general ledger payroll expenditures for the year under audit were not reconciled to the Districts payroll registers on a periodic basis. The District treasurer preparedpayrollreconciliationattherequestoftheauditorsfortheperiodendingJune30, 2012.Thisanalysisreconciledover$11,600,000ofpayrollexpenditures. In addition, three individuals salaries of a total of eighteen possible selections were inappropriatelychargedtothe201011IDEAPartB,611,RecoveryActbudgetcodewhich had a contract period ending on June 30, 2011. These salaries totaled approximately $172,000. Recommendation:Policiesandprocedurestoensurepayrollexpendituresarereconciledto the general ledger and Federal grant budgets on a consistent basis throughout the year shouldbeimplemented. Currentstatus:Managementhastakencorrectiveaction.
20128GeneralLedgerCashBalances Condition:TheDistricthasimplementedproceduresthatincludeindependentreviewand approval of the bank reconciliations during the year under audit; however, the general ledgercashbalanceswerenotadjustedtoreflectthereconciledbalancesonaconsistent basis throughout the year under audit. Audit adjustments with a net effect on governmentalfundsofapproximately$115,000werenecessarytoaccuratelyreflectthe June30,2012reconciledcashbalances. Recommendation:Policiesandproceduresshouldbeimplementedrequiringthatgeneral ledgercashaccountsareadjustedonaconsistentbasisthroughouttheyeartoreflectthe reconciledbalances.
Currentstatus:Seecurrentyearfindings20131and20134.
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FinancialStatementFindings(continued) OtherControlDeficiencies:(continued) 20129SegregationofDutiesTreasuryFunctions Condition:Overthecourseoftheyear,thebusinessofficecontinuedtohaveturnoverin accounting personnel, which resulted in treasury functions not consistently being segregatedaccordingtofunction.TheDistrictTreasurerwasresponsibleforrecordingcash receiptsandmakingthebankdepositsduringtheyearunderaudit. Recommendation:Proceduresshouldbeimplementedtoensurethattreasurydutiesare appropriatelysegregated.
201210JournalEntries Condition:Wenotedthatofthe64budgetadjustingentriesselectedfortesting,34lacked supporting documentation; of the 30 remaining selections that contained supporting documentation, 7 lacked documentation of an independent review and approval. In addition,noindependentreviewandapprovalprocessofmanualadjustingjournalentries wasinplaceduringtheyearunderaudit. Recommendation:Policiesandproceduresshouldbeimplementedtoensurethatallsuch entries are independently reviewed and approved prior to posting. Supporting documentationforalladjustmentsshouldberetained. Currentstatus:Managementhastakencorrectiveaction.
201211AccountingforFixedAssets Condition: A complete and accurate record of fixed assets, including consideration of relateddepreciation,wasnotmaintained.Inaddition,aphysicalinventoryoftheDistrict's fixedassetshasnotbeenrecentlyconducted. Recommendation: Procedures should be implemented to ensure proper records and tracking of fixed assets, including documentation specific to federal funds utilized. In addition,physicalinventoriesshouldbeperformedonaperiodicbasis. Currentstatus:Seecurrentyearfinding20135.
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FinancialStatementFindings(continued) OtherControlDeficiencies:(continued) 201212ProcurementPoliciesBidDocumentation Condition: As part of cash disbursements testing 18 vendors were selected with competitive bid or quote documentation requirements in accordance with the Districts procurement policy; supporting documentation evidencing compliance with the procurement policy could not be provided. The selection sample for these 18 vendors amountedtoapproximately$460,000withtheaverageindividualpaymentapproximating $18,000.TheDistrictspolicyrequiresthatatleastthreewrittenquotesbeobtainedfor purchasesinexcessof$1,500andthatcompetitivebidsbesolicitedforpurchaseandpublic workcontractsof$20,000orhigher.Professionalservicesareexemptfromcompetitivebid requirements. Recommendation: Policies and procedures should be implemented and monitored to ensure consistent adherence to District procurement policies and adequateretentionof supportingdocumentation.
201213BudgetMonitoring Condition: The District's business office and special education departments did not communicate throughout the school year to determine the amounts charged to each Federalgrant,aswellastheremaininggrantbudgetbalances.Assuch,theDistrictover chargedits201011TitleI,IDEAPartB611andIDEAPartB611,RecoveryActGrantsbya total of approximately $183,000. This resulted in an audit adjustment of approximately $183,000 to transfer these excess expenditures from the special aid fund back to the generalfund. Inaddition,althoughthebudgetstatusreportswerepreparedbytheDistrictasrequiredby NewYorkStatelawandweredistributedtotheBoardofEducationforreview,therewasno evidencethatthesebudgetstatusreportswerereviewedbyappropriatestafflevelswithin theDistrictresponsiblefortheirspecificportionsofthebudget. Recommendation: Procedures should implement to ensure adequate communication betweendepartmentstoanalyzethebudgetversusactualFederalgrantexpendituresto maximize available grants. In addition, a detailed review of the budget status reports shouldbereviewedonamonthlybasisbythosestaffresponsibleforthoseportionsofthe budget.
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Currentstatus:Managementhastakencorrectiveaction. FinancialStatementFindings(continued) OtherControlDeficiencies:(continued) 201214WireTransfersandElectronicDisbursements Condition:Itwasnotedthatwiretransfersforshortandlongtermdebtforprincipaland interest of approximately $4,100,000 were made without an independent review or approvalofsuchwiretransferbeforesuchtransfertookplace.Section1724oftheNew YorkStateEducationLawrequiresallschooldistrictstoauditeachvoucherpackagebefore it is paid. The District has appointed a claims auditor to carry out this responsibility. It wasntevidentthatareviewofthevoucherpackagetookplacepriortothedisbursement. Recommendation:Alltransfersshouldbeapprovedandreviewedbytheclaimsauditor. Managementshouldadoptprocedurestoensureallwiresareappropriatelyapproved.
FederalAwardFindingsandQuestionedCosts: 201215ConflictofInterestForms Condition: Conflict of interest disclosure forms were not maintained during the period underauditformembersoftheCommitteeonSpecialEducation(CSE).Inaccordancewith Part6oftheJune30,2012OMBCircularA133ComplianceSupplement,conflictofinterest statementsshouldbemaintainedforindividualswhodetermineandrevieweligibilityunder Federalawardprograms. Recommendation:TheDistrictshoulddistributeandcollectconflictofinterestdisclosure formsfromallmembersofmanagementandthosechargedwithgovernanceonatleastan annualbasis.
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FinancialStatementFindings(continued) OtherControlDeficiencies:(continued) 201216ProgramExpenditureOversight Condition: There was not adequate oversight with respect to the preparation of federal reimbursementrequests.TheDistrictrequestedtotal201011TitleIIaandMentorTeacher InternshipProgram(ARRA)fundingbasedoncontractamountsratherthanactualallowable expendituresduringthegrantperiods. FortheTitleIIagrant,thegrantbudgetwas$74,376whiletheactualallowableexpenditure was $58,059.TheDistrictrequestedandreceivedreimbursementof$74,376,therefore receiving$16,317inexcessoftheallowableamountperthegrantagreement. FortheMentorTeacherInternshipProgram,thegrantbudgetwas$15,000whiletheactual allowableexpenditurewas$6,463.TheDistrictrequestedandreceivedreimbursementof $15,000, therefore receiving $8,537 in excess of the allowable amount per the grant agreement. Recommendation: The District should implement an oversight function with respect to federalrequests;inadditioncommunicationbetweenfiscalandspecialaiddepartments should be enhanced. Also, the District should contact the New York State Education Department(NYSED)todeterminetheappropriatecourseofaction. Currentstatus:Seecurrentyearfinding20136.
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JORDANELBRIDGECENTRALSCHOOLDISTRICT ScheduleofFindingsandQuestionedCosts FortheyearendedJune30,2013
SectionI. SummaryofAuditResults FinancialStatements Typeofauditorsreportissued: Internalcontroloverfinancialreporting: Materialweaknessesidentified? Significantdeficienciesidentifiedthat arenotconsideredtobematerialweaknesses? Noncompliancematerialtofinancialstatementsnoted? FederalAwards Internalcontrolovermajorprograms: Materialweaknessesidentified? Significantdeficienciesidentifiedthat arenotconsideredtobematerialweaknesses?
unmodified
XYes
_______No
XYes Yes
_______No ___X___No
XYes
_______No
XYes
_______No
Typeofauditorsreportissuedoncomplianceformajorprograms: unmodified Anyauditfindingsdisclosedthatarerequiredtobe reportedinaccordancewithsection510(a)ofCircularA133? Yes ___X___No Identificationofmajorprogramstested: CFDANumber(s) 84.027 84.173 84.010 Dollarthresholdusedtodistinguishbetweentype AandtypeBprograms: Auditeequalifiedaslowriskauditee? - 21 Yes XNo $300,000 NameofFederalProgramorCluster SpecialEducationCluster: SpecialEducationGrantstoStates(IDEA,PartB) SpecialEducationPreschoolGrants(IDEAPreschool) TitleIGrantstoLocalEducationAgencies(TitleI,PartAoftheESEA)
SectionII. FinancialStatementFindings MaterialWeaknesses: 20131AnnualFinancialClosingProcess Condition:Managementhadnotexaminedorreconciledcertainaccountspriortotheonsetof the audit. This includes consideration of accounts payable, due from other governments and accounts receivable balances. Managements current procedures do not address the annual closingofaccountbalancesforfinancialstatementpurposes,especiallythoserelatedtoaccrual basedaccounting. Criteria: Formal policies and procedures should be implemented to ensure that allnecessary adjustments are posted to the general ledger in a timely manner rather than allowing such misstatementstobedetectedduringtheexternalaudit.Inaccordancewith34CFR80.41(b)(2), theDistrictdidnotimplementaprocesstoconvertitscashbasisaccountingrecordstoaccrual basis records as required by New York State Education Department requirements. New York State Education Department requires the financial statements and related accounts to be presented in accordance with governmental accounting standards which require the accrual basisofaccountingforfinancialreporting. Cause: The District has not fully implemented procedures ensuring all account balances are examinedandreconciledthroughoutthefiscalyearduringthemonthlyfinancialclosingprocess. Effect: Numerous accounting adjustments were proposed as a result of the audit which was material to the individual funds. Management recorded all such adjustments whereby the approximateimpactontheindividualfundswas: GeneralFund$659,000 SchoolFoodService$23,000 SpecialAidFund$(453,000) CapitalFund$1,041,000 Recommendation: An annual closing process and procedure should be developed by management to reconcile all significant account balances with adequate supporting documentation. This should not only include the fund accounts but also the Districtwide accounts,suchasfixedassetsandlongtermdebt. ViewsofResponsibleOfficialandPlannedCorrectiveActions:Theconversiontoanewsoftware accountingsystemcreatedsomechallengesinadaptingtonewproceduresforprocessingand trainingnewstaffmembers.Issueswereuncoveredattheendoftheyearthatrequiredreview and adjustments outside of normal year end procedures. Procedures for an annual closing processwillbeestablishedandadheredtogoingforward;matterswillberesolvedfortheclosing processJune30,2014. - 22 -
SectionII. FinancialStatementFindings(continued) SignificantDeficiencies: 20132BudgetMonitoring Condition:AbudgetstatusreportisrequiredtobecommunicatedtotheBoardofEducationonat leastaquarterlybasisandonamonthlybasisifbudgettransferswerecompletedbytheDistrict as required by section 170.2 of the New York State Education Departments Commissioner's Regulations.TheDistrictdidnotcomplywiththeserequirementsasthefirststatusreportwas notprovideduntiltheFebruary3,2013boardmeetingwhichwasfortheperiodendedDecember 31, 2012. Although such report was provided, it was not compliant with the level of detail mandatedbytheregulationsassuchreportdidnotdetailtheappropriations&revenuesbyobject code.TheDistrictprovidedreportsforthemonthsendedFebruary,MarchandApril.TheMarch andAprilreportswereingreaterdetailasrequiredbytheregulations.Noreportswereprovided forthemonthsofJanuary,MayorJune. Criteria:BudgetstatusreportsshouldbeprovidedonamonthlybasistotheBoardofEducation. Cause: Management has failed to comply with the regulations to provide such reports on a monthlybasisinthedetailmandatedtotheBoardofEducation. Effect: Management did not comply with the New York State Department of Education Commissioner'sregulationsforthefrequencyandformatofitsbudgetstatusreports. Recommendation:TheDistrictshouldconsistentlyprovidethebudgetstatusreportsonamonthly basiswithin15daysofeachmonthend.Thesereportsshouldbeatthelevelofdetailmandated by the Commissioner's regulations which includes both revenues and appropriations. These reportsshouldbereviewedbytheBoardofEducationwherebysuchreviewisdocumentedinthe boards'minutes. Managements Corrective Action Plan: Management will begin to provide the budget status reportsinthedetailrequiredwithin15daysaftereachmonthendbeginningforthemonthended September30,2013.Suchreportswillbeincludedasanagendaitemfortheboardtoconsider eachmonth. - 23 -
SectionII. FinancialStatementFindings(continued) 20133CashManagement Condition:TheDistricthasestablishedaseparatebankaccounttoaccountforthedailysales activity related to the District's food service program. The bank balance of this account was $326,168asofJune30,2013.Thisbankaccountdoesnotpayanyofthefoodserviceexpenses whicharepaidfromaseparatebankaccountassociatedwiththeGeneralFund.TheDistricthad notappropriatelyreconciledtheendingcashbalancetoreflectthepaymentsfromtheGeneral fund. As such, the net cash in the school food service fund should have been $41,596. The District subsequently transferred the difference of $284,572 to the appropriate general fund bankaccountandrecordedtheadjustmentaccordingly. Criteria:Cashmanagementproceduresshouldbedesignedandimplementedtoensurethatthe District'sseparatebankaccountbalancesandindividualfundscashpositionaccuratelyreflectthe revenueandexpendituresrecognizedwithineachrespectivefund. Cause: Management has not fully implemented developed policies and procedures to consistentlymonitorthecashbalanceswithinalloftheDistrict'sbankaccountsandfunds. Effect:Assuch,thenetcashintheschoolfoodservicefundshouldhavebeen$41,596.The District subsequently transferred the difference of $284,572 to the appropriate general fund bankaccountandrecordedtheadjustmentaccordingly. Recommendation: We recommend the District continue to implement its cash management policiesandprocedurestoensurethenecessarytransfersaremadebetweenbankaccountsto accuratelyreflectthecashbalanceandactivityofeachrespectivefund. Views of Responsible Official and Planned Corrective Actions: Management will implement a policytotransferschoollunchfundsonaquarterlybasisbeginningSeptember30,2013. - 24 -
SectionII. FinancialStatementFindings(continued) SignificantDeficiencies:(continued) 20134InterfundAccounting Condition: The District routinely has transactions among different government funds which resultinreceivables/payablesbetweenfunds.Manyofthesetransactionsaresystemdesigned transactionswhichautomaticallypostcertainactivityacrossdifferentfunds,suchaspayrolland relatedbenefitactivity. Criteria:NationalCouncilonGovernmentalAccounting(NCGA)StatementNo.1,Governmental Accounting and Financial Reporting Principles, paragraphs 57 and 75 state that interfund transfersshouldberecognizedintheperiodinwhichtheinterfundreceivableandpayablearise. If the interfund receivable and payable are not expected to be settled within a reasonable amountoftime,theinterfundbalancesshouldbereduced. Cause: Management has not fully implemented procedures to ensure proper recording and settlingofinterfundbalances. Effect:Certaininterfundtransactionswerenotappropriatelyrecordedorsettledwithintheyear resulting in adjustments to the balances. The adjustments recorded across the funds approximatedthefollowing: GeneralFund$(20,000) SpecialAidFund$304,000 CapitalFund$32,000 Recommendation: Management should design a process to reconcile interfund activity on a monthlybasisandtosettleinterfundactivityonatleastanannualbasis. Views of Responsible Official and Planned Corrective Actions: The District integrated a new accounting software system (Finance Manager) on July 1, 2012 that complicated this reconciliationprocess.Managementwillworktodesignaprocesstoreconciletheseaccounts andimplementthisprocessbyDecember31,2013. - 25 -
SectionII. FinancialStatementFindings(continued) SignificantDeficiencies:(continued) 20135AccountingforFixedAssets Condition: Acompleteandaccuraterecordoffixedassets,includingconsiderationofrelated depreciation,isnotmaintained.Inaddition,aphysicalinventoryoftheDistrict'sfixedassetshas notbeenrecentlyconducted. Criteria:Inaccordancewith34CFR80.32(4),Propertyrecordsmustbemaintainedthatinclude a description of the property, a serial number or other identification number, the source of property,whoholdstitle,theacquisitiondate,andcostoftheproperty,percentageofFederal participationinthecostoftheproperty,thelocation,useandconditionoftheproperty,andany ultimate disposition data including the date of disposal and sale price of the property. In addition,aphysicalinventoryofthepropertymustbetakenandtheresultsreconciledwiththe propertyrecordsatleastonceeverytwoyears. Cause:Policiesandproceduresrequiringtherecording,disposalandtrackingtheDistrict'sfixed assetshavenotbeenimplemented. Effect: In order to accurately reflect the Districts fixed asset balances, audit adjustments of approximately$623,000and$359,000,respectivelyforassetadditionsandassetdisposalswere necessarytofairlystatetheaccountbalances. Recommendation:Proceduresshouldbeimplementedtoensureproperrecordsandtrackingof fixedassets.Inaddition,physicalinventoriesshouldbeperformedonaperiodicbasiswhereby theaccountingrecordsarereconciledtothephysicalinventoryofassets. ViewsofResponsibleOfficialandPlannedCorrectiveActions:TheDistrictwillestablishaplanto create, monitor and maintain a fixed asset listing that reflects the Districts fixed assets and depreciationschedules.ThiswillbecompletedbyJune30,2014. - 26 -
SectionIII. FederalAwardFindingsandQuestionedCosts 20131AnnualFinancialClosingProcess DepartmentofEducation U.S.DepartmentofEducation(PassedthroughtheStateDepartmentofEducation) SpecialEducationGrantstoStates(IDEA,B)CFDANo.84.027 SpecialEducationPreschoolGrants(IDEAPreschool)CFDANo.84.173 GrantstoLocalEducationAgenciesCFDANo.84.010 Condition:SeeSectionIIFinancialStatementFinding20131. Criteria:SeeSectionIIFinancialStatementFinding20131. Cause:SeeSectionIIFinancialStatementFinding20131. Effect:SeeSectionIIFinancialStatementFinding20131. QuestionedCosts:None Recommendation:SeeSectionIIFinancialStatementFinding20131. ViewsofResponsibleOfficialandPlannedCorrectiveActions:SeeSectionIIFinancialStatement Finding20131.
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SectionIII. FederalAwardFindingsandQuestionedCosts(continued) 20134InterfundAccounting DepartmentofEducation U.S.DepartmentofEducation(PassedthroughtheStateDepartmentofEducation) SpecialEducationGrantstoStates(IDEA,B)CFDANo.84.027 SpecialEducationPreschoolGrants(IDEAPreschool)CFDANo.84.173 GrantstoLocalEducationAgenciesCFDANo.84.010 Condition:SeeSectionIIFinancialStatementFinding20134. Criteria:SeeSectionIIFinancialStatementFinding20134. Cause:SeeSectionIIFinancialStatementFinding20134. Effect:SeeSectionIIFinancialStatementFinding20134. QuestionedCosts:None Recommendation:SeeSectionIIFinancialStatementFinding20134. ViewsofResponsibleOfficialandPlannedCorrectiveActions:SeeSectionIIFinancialStatement Finding20134.
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October2,2013 TotheBoardofEducation JordanElbridgeCentralSchoolDistrict Jordan,NewYork We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of JordanElbridge Central School District (the District) as of and for the year ended June 30, 2013, and have issued our report thereon dated October 2, 2013. Professionalstandardsrequirethatweadviseyouofthefollowingmattersrelatingtoouraudit. OurResponsibilityinRelationtotheFinancialStatementAudit As communicated in our engagement letter dated June 3, 2013, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that havebeenpreparedbymanagementwithyouroversightarepresentedfairly,inallmaterialrespects,in conformity with accounting principles generally accepted in the United States of America. Our audit of thefinancialstatementsdoesnotrelieveyouormanagementofyourrespectiveresponsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable,ratherthanabsolute,assuranceaboutwhetherthefinancialstatementsarefreeofmaterial misstatement. An audit of financial statements includes consideration of internal control over financial reportingasabasisfordesigningauditproceduresthatareappropriateinthecircumstances,butnotfor the purpose of expressing an opinion on the effectiveness of the entitys internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the District solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internalcontrol. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicatetoyou. We have provided our findings regarding control deficiencies over financial reporting and other matters notedduringourauditinaseparatelettertoyoudatedOctober2,2013.
PlannedScopeandTimingoftheAudit We conducted our audit consistent with the planned scope and timing we previously communicated to you. CompliancewithAllEthicsRequirementsRegardingIndependence The engagement team, others in our firm, as appropriate, our firm, and our network firms have compliedwithallrelevantethicalrequirementsregardingindependence. QualitativeAspectsoftheEntitysSignificantAccountingPractices SignificantAccountingPolicies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the District is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during 2013. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areasforwhichthereisalackofauthoritativeguidanceorconsensus. SignificantAccountingEstimates Accounting estimates are an integral part of the financial statements prepared by management and are based on managements current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimatesareparticularlysensitivebecauseoftheirsignificancetothefinancialstatementsandbecause of the possibility that future events affecting them may differ markedly from managements current judgments. The most sensitive accounting estimates affecting the financial statements are managements estimate of: the postemployment benefit obligation, the liability for compensated absences, and the useful lives of depreciable assets. We have evaluated the key factors and assumptions used to develop these estimates and determined they are reasonable in relation to the basic financial statements taken as a wholeandinrelationtotheapplicableopinionunits. Thedisclosuresinthefinancialstatementsareneutral,consistent,andclear. SignificantDifficultiesEncounteredduringtheAudit We encountered no significant difficulties in dealing with management relating to the performance of theaudit.
UncorrectedandCorrectedMisstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and eachapplicableopinionunit.Therewerenouncorrectedmisstatements. In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. The attached schedule presents a summary of the misstatements detected as a result of our audit proceduresandcorrectedbymanagement. DisagreementswithManagement Forpurposesofthisletter,professionalstandardsdefineadisagreementwithmanagementasamatter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the Districts financial statements or the auditors report. No such disagreementsaroseduringthecourseoftheaudit. RepresentationsRequestedfromManagement We have requested certain written representations from management, which are included in the attachedletterdatedOctober2,2013. ManagementsConsultationswithOtherAccountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations withotheraccountantsregardingauditingandaccountingmatters. OtherSignificantMatters,Findings,orIssues In the normal course of our professional association with the District, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the Districtsauditors.
This information is intended solely for the information and use of the Board of Education and managementofJordanElbridgeCentralSchoolDistrictandisnotintendedtobeandshouldnotbeused byanyoneotherthanthesespecifiedparties. GROSSMANST.AMOUR CERTIFIEDPUBLICACCOUNTANTS,PLLC
JordanElbridgeCentralSchoolDistrict AccumulationofAuditAdjustments June30,2013 GeneralFund: DescriptionofAdjustment Toadjustschooltaxrelief(STAR)aid TorecordadditionalNYSbasicformulaaid ToadjustotherNYSaid TorecordoutstandingtransferfromSchoolFoodServiceFund TotransferreservemoniestotheCapitalFund Aggregateremainingentries Total GeneralFundtotals Percentageoffundtotals Assets $ (531,994) 1,179,414 (346,990) 284,571 216,913 $801,914 $6,682,672 12.00% Liabilities $ 270,000 206,464 $476,464 $1,503,519 31.69% FundBalance $(531,994) 1,179,414 (346,990) 284,571 (270,000) 10,449 $ 325,450 $ 5,179,153 6.28% Revenues $ (531,994) 1,179,414 (346,990) 284,571 216,913 $801,914 $ 26,981,512 2.97% Expenditures $ 270,000 206,464 $476,464 $ 27,605,668 1.73%
SchoolFoodServiceFund: DescriptionofAdjustment ToadjustNYSaidrevenue Toadjustcafeteriasalesrevenue Aggregateremainingentries Total SchoolFoodServiceFundtotals Percentageoffundtotals Assets $ (5,274) 20,912 3,470 $ 19,108 $ 52,392 36.47% Liabilities $ (4,228) $ (4,228) $ 4,104 103.02% FundBalance $ (5,274) 25,140 3,470 $ 23,336 $ 48,288 48.33% Revenues $ (5,274) 25,140 2,112 $ 21,978 $423,837 5.19% Expenditures $ (1,358) $ (1,358) $493,009 0.28%
JordanElbridgeCentralSchoolDistrict AccumulationofAuditAdjustments June30,2013 SpecialAidFund: DescriptionofAdjustment TorecordEducationJobsFundsalaries ToadjustNYSsummerschoolaid ToadjustFederalgrantrevenues Total SpecialAidFundtotals Percentageoffundtotals Assets $ (149,375) $ (149,375) $ 95,403 156.57% Liabilities $171,532 11,455 120,763 $303,750 $ 95,403 318.39% FundBalance $(171,532) (11,455) (270,138) $(453,125) $ 100.00% Revenues $ (11,455) (270,138) $ (281,593) $1,029,261 27.36% Expenditures $171,532 $171,532 $1,029,261 16.67%
CapitalProjectsFund: DescriptionofAdjustment Toadjustretainagepayable TorecordNYSExcelaidrevenue TorecordGeneralFundcoverageof201213buspurchases TorecordtransferofreservemoniesfromGeneralFund Aggregateremainingentries Total CapitalFundtotals Percentageoffundtotals Assets $ 438,882 32,402 270,000 $741,284 $763,396 97.10% Liabilities $ (572,595) 2,806 $ (569,789) $602,539 94.56% FundBalance $ 572,595 438,882 32,402 270,000 (2,806) $ 1,311,073 $ 160,857 815.05% Revenues $ 438,882 32,402 270,000 $741,284 $1,971,495 37.60% Expenditures $ (572,595) 2,806 $ (569,789) $2,959,575 19.25%
AgencyFund DescriptionofAdjustment Toclearoutautomatedpostingactivity AgencyFundtotals Percentageoffundtotals Assets $ (138,359) $ 66,633 207.64% Liabilities $(33,828) $ 100.00% FundBalance $(104,531) $ 66,633 156.88% Revenues $ $ 0.00% Expenditures $104,531 $ 100.00%

Jordan - Elbridge Central School District Audit

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Jordan - Elbridge Central School District Audit

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October2,2013

JORDANELBRIDGE CENTRALSCHOOLDISTRICT STATEMENTOFCASHRECEIPTSAND DISBURSEMENTSOFTHE EXTRACLASSROOMACTIVITYFUNDS June30,2013

JordanElbridgeCentralSchoolDistrict StatementofCashReceiptsandDisbursementsoftheExtraclassroomActivityFunds FortheYearEndedJune30,2013

852 7,690 5,286 13,828 $ 69,550

2,611 13,345 6,032 21,988 $ 126,019

2,970 8,887 7,378 19,235 $ 128,936

493 12,148 3,940 16,581 $66,633

Comments ExtraclassroomActivityReports ExtraclassroomComments SingleAuditReports

Our responsibility under GAAS

Compliancewithallethicsrequirementsregardingindependence Qualitative aspects of the entitys significant accounting practices

Significant difficulties encountered during the audit

FINANCIALSTATEMENTSAND SUPPLEMENTARYINFORMATION June30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

$28,939,263 40,169,740 $69,109,003 $23,380,886 35,557,453 $58,938,339

$ 7,546,138 41,388,752 $48,934,890 $ 3,925,191 34,828,146 $38,753,337

$11,135,892 25,526,332 (26,491,560) $10,170,664

$13,202,752 5,031,443 (8,052,642) $10,181,553

18.56% 80.29% 69.60% 0.11%

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

12,005,404 13,201,602 14,790 440,992 $27,403,491

12,278,843 14,826,110 31,102 250,840 $28,876,969

2.28% 12.31% 110.29% 43.12% 5.38%

$3,395,407 14,277,405 1,471,744 6,988,420 469,970 548,931 $27,151,877 $251,614

$ 3,867,085 15,006,748 1,467,164 7,127,059 420,714 977,310 $28,866,080 $ 10,889

13.89% 5.11% 0.31% 1.98% 10.48% 78.04% 6.31%

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

2013 $5,179,153 48,288 900,633 160,857 $6,288,931

%Change 201213 10.76% 58.89% 0.00% 0.18% 86.00%

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

201213 Operating Budget

$11,984,181 13,838,819 1,492,408

$12,278,843 14,387,228 315,441

$ 294,662 548,409 (1,176,967)

$ 4,257,549 10,728,160 1,585,441 6,309,065 4,435,193

$ 4,000,054 12,327,092 1,329,631 5,766,366 4,030,627 151,898

$(257,495) 1,598,932 (255,810) (542,699) (404,566) 151,898

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

CapitalAssetsandDebtAdministration CapitalAssets AttheendofJune30,2013,theSchoolDistricthadinvestedinabroadrangeofcapitalassets. CapitalAssets (Figure5)

Land Constructioninprocess BuildingsandImprovements Equipment Accumulateddepreciation Total

JORDANELBRIDGECENTRALSCHOOLDISTRICT Management'sDiscussionandAnalysis(MD&A)Unaudited FortheyearendedJune30,2013

CapitalAssetsandDebtAdministration(continued) DebtAdministration (Figure6)

GovernmentalActivities 2012 2013 $ 30,215,000 19,000,000 $ 49,215,000 $28,186,000 $28,186,000

Total Percentage Change 201213 6.72% 100.00% 42.73%

Serial Bonds BAN Total OutstandingDebt

JORDANELBRIDGECENTRALSCHOOLDISTRICT StatementofNetPosition GovernmentalActivities June30,2013

$ 1,389,508 3,833,424 3,607 2,315,585 4,014 41,388,752 $48,934,890

$109,638 216,984 4,104

2,451,000 1,025,050 118,415 173,419 8,919,727 25,735,000 38,753,337

13,202,752 5,031,443 (8,052,642) 10,181,553 $48,934,890

JORDANELBRIDGECENTRALSCHOOLDISTRICT StatementofActivitiesandChangesinNetPosition FortheyearendedJune30,2013

ProgramRevenues Chargesfor Operating Services Grants

Net(Expense) Revenue and Changesin NetPosition

$(3,867,085) (15,006,748) (1,467,164) (7,127,059) (977,310) (420,714) $ (28,866,080)

$44,968 172,775 $ 217,743

$ 1,021,866 250,465 $1,272,331