DAVIESS COUNTY SCHOOL DISTRICT - education.ky.gov

DAVIESS COUNTY SCHOOL DISTRICT

BASIC FINANCIAL STATEMENTS AND

SUPPLEMENTARY INFORMATION

Year Ended June 30, 2020

(With Independent Auditor's Report Thereon)

Independent Auditor's Report

Management's Discussion and Analysis

Basic Financial Statements:

CONTENTS

Government-Wide Financial Statements:

Statement of Net Position

Statement of Activities

Fund Financial Statements:

Governmental Funds Financial Statements:

Balance Sheet

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

Statement of Revenues, Expenditures, and Changes in Fund Balances

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

Proprietary Funds Financial Statements:

Statement of Net Position

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

Statement of Cash Flows

Notes to Financial Statements

1-2

3-11

12

13

14

15

16

17

18

19

20

21-60

C ONT ENT S, C ON C LU D ED

Required Supplementary Information:

Budgetary Comparison Schedules: General Fund Special Revenue Fund

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

Supplementary Information:

Nonmajor Governmental Funds: Combining Financial Statements:

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

Balances School Activity Fund:

Combining Schedule of Receipts, Disbursements, Accruals, and Fund Balance

Schedules of Receipts, Disbursements, Accruals, and Fund Balance: Apollo High School Daviess County High School

Schedule of Expenditures of Federal Awards

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

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

Schedule of Findings and Questioned Costs

Summary Schedule of Prior Audit Findings

61 62

63-67 68-72

73

74

75

76-79 80-83

84-85

86-87

88-89

90

91

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INDEPENDENT AUDITOR'S REPORT

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

Kentucky State Committee for School District Audits Frankfort, Kentucky

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Daviess County School District (District) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, as listed in the table of contents.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the Kentucky Public School Districts' Audit Contract and Requirements prescribed by the Kentucky State Committee for School District Audits. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Daviess County School District, as of June 30, 2020, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America .

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

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Daviess County School District Page 2

Change in Accounting Principle

As discussed in Note 18 to the financial statements, in 2020 the District adopted new accounting guidance, GASB Statement No. 84, Fiduciary Activities. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplementa,y Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3-11, the budgetary comparison schedules on pages 61-62, and the pension and other postemployment benefits schedules on 63-72, 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 infonnation for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the infonnation because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Infonnation

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Un(fonn Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 1, 2020, on our consideration of the District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control over financial reporting and compliance.

Owensboro, Kentucky October I, 2020

Daviess County School District Management's Discussion and Analysis For the Fiscal Year Ended June 30, 2020

The discussion and analysis of Daviess County School District's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2020. The intent of this discussion and analysis is to review the School District's financial performance as a whole. Readers should also review the basic financial statements and the notes to the financial statements to enhance their understanding of the School District's financial perfonnance.

Financial Highlights

• In total, net position, as restated, decreased $1,141,386. Net position of governmental activities, as restated, decreased by $706,352, while net position of business-type activities decreased by $435,034.

• General revenues accounted for $116,710,718 in revenue or 87 .2% of all governmental revenues. Program specific revenues in the fonn of charges for services, grants, and contributions accounted for $17,200,622 or 12.8% of total governmental revenues of$133,91 l,340.

• Total assets of governmental activities increased by $48,215,934. For governmental activities, capital assets increased by $9,522,671, while cash and investments decreased by $8,127,163.

• The School District had $134,617,692 in expenses related to governmental activities; only $17,200,622 of these expenses were offset by program specific charges for services, grants, and contributions. General revenues (primarily local taxes and state SEEK allocations) were adequate to provide for these programs.

• Construction continued during fiscal year 2020. Projects completed included HV AC updates and a flooring project. Projects that were in progress at year end include the two high school stadiums, flooring projects, the ne~ middle school and the renovations at Apollo High school.

Using the Basic Financial Statements

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

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


Reporting the School District as a Whole

One of the most important questions asked about the School District is "how did we do financially during 2020?" The Statement of Net Position and the Statement of Activities, which appear first in the School District's financial statements, report information on the School District as a whole and its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received and paid.

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

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

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

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

Reporting the School District's Most Significant Funds

Fund Financial Statements

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

Governmental Funds - most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end available for spending in future periods. These funds are reported using an accounting method called modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance

4


Reporting the School District's Most Significant Funds, Continued

Governmental Funds, Continued

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

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

Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 21-60 of this report.

Government-Wide Financial Analysis

Net position may serve over time as a useful indicator of a government's financial position. In the case of the District, assets and deferred outflows ofresources exceeded liabilities and deferred inflows ofresources by $4,127,175 for governmental activities, and liabilities and deferred inflows ofresources exceeded assets and deferred outflows of resources by $3,539,868 for business-type activities as of June 30, 2020.

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

The District's financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets. Included for June 30, 2020 is the district's liability for the net pension obligation and the liability for other postemployment benefits.

5



Government-Wide Financial Analysis, Continued

(Table 1) Net Position

Governmental Activities Business-Tl£~e Activities

2020 2019 2020 2019

Assets Current and other

assets $75,577,369 $ 36,884,106 $3,239,403 $2,838,961 Capital assets 125,766,438 116,243,767 602,489 620,097

Total assets 201,343,807 153,127,873 3,841,892 3,459,058

Deferred Outflows of Resources

Deferred charges on refunding 1,272,754 1,509,104

Pension deferred outflows 7,783,869 7,049,391 1,373,624 1,244,010

OPEB deferred outflows 6,983,710 4,701,953 613,146 497,591

Total deferred outflows of resources 16,040,333 13,260,448 1,986,770 1,741,601

Liabilities Long-term liabilities 191,597,964 149,778,947 8,358,866 7,686,984 Other liabilities 10,541,523 8,671,778 211,429 113 781

Total liabilities 202.139,487 158,450,725 8,570,295 7,800,765

Deferred Inflows of Resources

Pension deferred inflows 1,140,718 993,874 201,453 175,390

OPEB deferred inflows 9,976,760 4,077,243 596,782 329,338

Total deferred inflows of resources 11 117 478 5,071,117 798,235 504,728

Net Position Net Investment in 11,711,672 43,238,856 602,489 620,097

capital assets Restricted 47,321,935 12,167,356 Unrestricted (54,906,432} (52,539,733} (4,142,357} (3,724,931}

Total net position $ 4 127 175 $ 2 866 479 $ (3 539 868) $ (3 104 834)

Total

2020 2019

$ 78,816,772 $ 39,723,067 126,368,927 116,863,864

205.185,699 156,586,931

1,272,754 1,509,104

9,157,493 8,293,401

7,596,856 5,199,544

18,027,103 15,002,049

199,956,830 157,465,931 10,752,952 8,785,559

210,709,782 166,251,490

1,342,171 1,169,264

10,573,542 4,406,581

11,915,713 5,575,845

12,314,161 43,858,953

47,321,935 12,167,356 (59,048,789} (56,264,664}

$ 587 307 $ (238 355)

Total assets increased $48,598,768 primarily due to construction . Total net position, as restated, decreased by $1,141,386.

6



Government-Wide Financial Analysis, Continued (Table 2)

Net Position

Governmental Activities Business-Tl£E!e Activities 2020 2019 2020 2019

Program revenues: Charges for services $3,896,555 $ 563,410 $ 2,573,521 $ 3,311,707 Operating grants

and contributions 8,934,150 9,398,377 5,516,509 5,442,437 Capital grants

and contributions 4,369,917 4,514,602 General revenues:

Taxes 47,258,653 45,354,668 State aid formula

grants 37,636,852 39,320,866 Investment

earnings 696,487 1,120,908 35,518 51,954 Gain on sale of

capital assets 220,951 27 ,753 (1,190) Miscellaneous 348,514 361,674 .State on behalf

payments 30,432,983 28,720,023 Transfers: 116 278 104 637 (116,278} (104,637} Total revenues and

transfers 133,911,340 129,486,918 8,009,270 8,700,271

Program expenses: Instruction 86,998,199 75,594,039 Support services:

Student 5,278,060 4,837,499 Instructional staff 4,182,275 4,221,095 District

administration 1,306,592 1,187,006 School

administration 8,678,044 8,576,530 Business 2,608,333 2,621,289 Facility

operations/ maintenance 8,831,578 1,264,533

Student transportation 9,655,692 9,767,169

Non-instructional 942,673 885,725 Facility acquisition/

construction 3,383,870 16,739,207

After school program 166,595 1,025,734 1,318,454 Interest on long-

term debt 2,336,052 2,178,421 Food service 249,729 7,418,570 8,010,379 Total expenses and

transfers 134,617,692 127,872,513 8,444,304 9,328,833 Increase/decrease

in net position $ (ZQ6 352) $ 1 6H 405 $ (435 Q34) $ (628 562)

7

Total 2020 2019

$ 6,470,076 $ 3,875,117

14,450,659 14,840,814

4,369,917 4,514,602

47,258,653 45,354,668

37,636,852 39,320,866

732,005 1,172,862

220,951 26,563 348,514 361,674

30,432,983 28,720,023

141,920,610 138,187,189

86,998,199 75,594,039

5,278,060 4,837,499 4,182,275 4,221,095

1,306,592 1,187,006

8,678,044 8,576,530 2,608,333 2,621,289

8,831,578 1,264,533

9,655,692 9,767,169 942,673 885,725

3,383,870 16,739,207

1,192,329 1,318,454

2,336,052 2,178,421 7,668,299 8,010,379

143,061,996 137,201,346

$ (1 H1 386) $ 985 843



Governmental Activities

Instruction comprises 64.6% of governmental program expenses. Support services expenses make up 30.4% of governmental expenses. Non-instructional expenses for community services total . 7% of governmental expenses. Facilities acquisition/construction and interest accounts for the remaining 4.3% of the total governmental expense.

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for government activities, the total cost of services and the net cost of services. That is, it identifies the cost of these services supported by tax revenue and unrestricted state entitlements. The total cost of services includes state on-behalf payments in the amount of$30,432,983 for 2020.

Instruction

Support services

Non-instructional

Facil ities acquisition/construction

Interest on long-term debt

(Table 3) Governmental Activities

Total Cost of Services

$ 86,998,199 $ 75,594,039

40,956,898

942,673

3,383,870

2,336,052

32,475,121

885,725

16,739,207

2,178,421

Net Cost of Services

2020

$77,280,474

38,745,533

41 ,058

(986,047)

2,336,052

2019

$68,543,179

30,477,007

(27,088)

12,224,605

2.178,421

Total expenses $134 617 692 $127,872,513 $117,417.070 $113,396,124

Business-Type Activities

The business-type activities are food service and after school programs. These programs had revenues of $8,125,548 and expenses of $8,444,304 for fiscal year 2020. Of the revenues, $2,573,521 was charges for services, $5,516,509 was from state and federal grants, and $35,518 was from investment earnings. Indirect cost transfers and other transfers totaled $116,278 . Business activities receive no support from tax revenues. The School District will continue to monitor the charges and costs of these activities . If it becomes necessary, the School District will increase the charges for these activities.

The School District's Funds

Information about the School District's major funds begins on page 16. These funds are accounted for using the modified accrual basis of accounting. All governmental funds had total revenues and other financing sources of $180,547,196 and expenditures of $145,735,136. The General Fund's fund balance increased by $1,624,529.

8



General Fund-Budget Highlights

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

A variance comparison is presented on page 61 between the final budgeted amounts and the actual (GAAP Basis) amounts. The General Fund revenues were budgeted at $ I 06, 172,578 with actual amounts of $107,789,507. Budgeted expenditures of$122, 179,963 compare with actual expenditures of $108,713,322, a difference of $13,466,641. The source of the expense budget variances is related to amounts budgeted for contingencies. Budgeted other financing sources was $1,252,867, with actual financing uses of $2,548,344. The net increase in the General Fund balance is $1,624,529.

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2020, the School District had $126,368,927 invested in land, buildings, equipment, and construction in progress, $125,766,438 in governmental activities, and $602,489 in business-type activities. Table 4 shows fiscal year 2020 balances compared to 2019.

(Table 4) Capital Assets at June 30

(Net of Depreciation)

Governmental Activities Business-T)l~e Activities Total 2020 2019 2020 2019 2020 2019

Land $10,169,490 $10,169,490 $ $ $ 10,169,490 $ 10,169,490 Land improvements 1,041,278 921,011 3,861 4,634 1,045,139 925,645 Buildings and

improvements 87,574,266 88,919,424 87,574,266 88,919,424 Technology

equipment 601,443 1,357,744 19,658 34,468 621,101 1,392,212 Vehicles 4,118,015 4,148,603 20,982 28,815 4,138,997 4,177,418 General equipment 619,363 705,131 557,988 552,180 1,177,351 1,257,311 Construction in

progress 2t642.583 10.022.364 21,642.583 10,022,364

Total $:125,Z66,438 $:1 :l 6 2!13,Z6Z $6Q2 489 $620 Q9Z $:126 368,92Z $:] :16,863 864

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

9

Debt


At June 30, 2020, the School District had $111,676,000 in bonds outstanding, of which $1,866,769 are to be paid from the KS FCC funding provided by the state of Kentucky. A total of $6,824,000 is due within one year.

At June 30, 2019, the School District had $74,479,000 in bonds outstanding, of which $1,573,783 were to be paid from the KS FCC funding provided by the state of Kentucky.

District Challenges for the Future

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

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

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

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

10


District Challenges for the Future, Continued

Further, instability in the state pension fund is a large financial concern for the state's budget and if left unresolved, could result in negative financial consequences to Kentucky's public school districts.

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

Contacting the School District's Financial Management

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

II


ST A TEMENT OF NET POSITION

ASSETS Cash and cash equivalents $ Investments Accounts receivable:

Taxes Other Due from other governments

Inventory Prepaids and other current assets Capital assets, net

Total assets

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

Total deferred outflows of resources

LIABILITIES Accounts payable Accrued salaries and benefits

Payroll withholdings Accrued interest payable Unearned revenue Long-tem1 liabilities:

Due within one year

Due in more than one year Other liabilities due in more than one year:

Net pension liability

Net other postemployment benefits liabilities

Total liabilities

DEFERRED INFLOWS OF RESOURCES Pension deferred inflows

Other postemployment benefits deferred inflows

Total deferred inflows of resources

NET POSITION Net investment in capital assets Restricted for:

Capital projects Other Technology

Unrestricted

Total net position $

June 30, 2020

Governmental Activities

20,777,878 $ 5,898,061

972,078 47,475,540

12,457 357,963

83 ,392 125,766,438

201,343,807

1,272,754 7,783,869 6,983,710

16,040,333

2,001,360 4,471,994

845,315 399,793

2,823,061

7,301,219 1 11 ,846,846

38,226,643 34,223,256

202, 139,487

1,140,718 9,976,760

11,117,478

11,711,672

2,324,506 44,905,986

91,443 (54,906,432)

4,127,175 $

Sec l':otes to Financial Statements I ]

Business-Type Activities

2,639,299

14,778 256,201 329,125

602,489

3,841,892

1,373,624 613,146

1,986,770

50.389

161 ,040

6,745,879 1,6 12,987

8,570,295

201,453 596,782

798,235

602,489

(4,142,357)

(3,539,868)

Total

$ 23,417,177 5,898,061

972,078 47,490,318

268,658 687,088

83,392 126,368,927

205,185,699

1,272,754 9,157,493 7,596,856

18,027,103

2,051,749 4,471,994

845,315 399,793

2,984,101

7,301,219 111,846,846

44,972,522 35,836,243

210,709,782

1,342,171 10,573,542

11,915,713

12,3 14,16 1

2,324,506 44,905,986

91,443 (59,048,789)

$ 587,307

Functions I Programs Governmental activities:

Instruction Support services:

Student Instructional staff District administration School administration Business Plant operation and maintenance Student transportation Food service After school

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

Total governmental activities

Business-type activities: Food service After school program

Total business-type activities

Total district


STATEMENT OF ACTIVITIES


Program Revenues Operating Capital

Charges for Grants and Grants and

Exeenses Services Contributions Contributions

s 86,998,199 $ 3,532,617

5,278,060 30,685 4,182,275 28,101 1,306,592 8,678,044 2,608,333 8,831,578 70,083 9,655,692 235,069

249,729 166,595 942,673

S0,524 3,333,346 2,336,052

134,617,692 3,896,555

7,418,570 1,583,191 1,025,734 990,330

8,444,304 2,573,521

$ 143,061,996 $ 6,470,076

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

Transfers

Total general revenues and transfers

Change in net position

Net position, June 30, 2019, restated

Net position, June 30, 2020

$

$

6,185,108 s

704,609 511,784

16,806

4,349 193,555 249,729 166,595 901,615

8,934,150

5,482,564 33,945

5,516,509

14,450,659 $

Sec Noic:s lO Ftnancual Statcmc:nts

"

4,369,917

4,369,917

4,369,917

Net (Expense) Revenue and Chan1ie in Net Position

Governmental Business-Type Activities Activities Total

s (77,280,474) s (77,280,474)

(4,542,766) (4,542,766) (3 ,642,390) (3,642,390) (1,306,592) (1,306,592) (8,661,238) (8,661,238) (2,608,333) (2,608,333) (8,757,146) (8,757,146) (9,227,068) (9,227,068)

(41,058) (41,058) (50,524) (50,524)

1,036,571 1,036,571 (2,336,052) (2,336,052)

(117,417,070) (117,417,070)

$ (352,815) (352,815) (1,459) (1,459)

(354,274) (354,274)

(117,417,070) (354,274) (117,771,344)

42,328,544 42,328,544 4,930,109 4,930,109

37,636,852 37,636,852 30,432,983 30,432,983

696,487 35,518 732,00S 220,951 220,951 348,514 348,514 116,278 (116,278)

116,710,718 (80,760) 116,629,958

(706,352) (435,034) (1,141,386)

4,833,527 (3,104,834) 1,728,693

s 4,127,175 $ (3,539,868) s 587,307

ASSETS Cash and cash equivalents Investments Accounts receivable:

Taxes Other Due from other governments

Inventory Prepaid expenses

Total assets

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

Liabilities: Accounts payable Accrued salaries and benefits Payroll withholdings Unearned revenue

Total liabilities

Deferred inflows of resources : Unavailable revenue - delinquent property

taxes

Fund balances: Nonspendable Restricted Committed Assigned Unassigned

Total fund balances

Total liabilities, deferred inflon s ofresources, and fund balances


s

s

s

s

BALANCE SHEET

GOVERNMENT AL FUNDS

June 30, 2020

Special General Revenue

Fund Fund

16,176,374 s 1,896,801 5,898,061

972,078 126,038 24,895

12,457 902,129 325,398

56,627

23,567,033 s 2,823,825

68,115 s 3,991 4,471,994

845,3 I 5 94,670 2,728,391

5,480,094 2,732,382

290,003

382,025 295,236

326,238 2,217,499

14,871,174 (203,793)

17,796,936 91 ,443

23,567,033 s 2,823 ,825

Sec Notes to Financial Statemenis I~

Construction Fund

s

46,422,138

s 46,422,138

s 1,916,754

1,916,754

44,505,384

44,505,384

s 46,422,138

Nonmajor Total Governmental Governmental

Funds Funds

s 2,704,703 s 20,777,878 5,898 ,061

972,078 340 46,573,4 I I

914,586 32,565 357,963

56,627

s 2,737,608 s 75,550,604

s 12,500 s 2,001 ,360 4,471,994

845,3 I 5 2,823,06 I

12,500 10,141,730

290,003

382,025 2,725, I 08 47,525,728

326,238 2,217,499

14,667,381

2,725, I 08 65,118,871

s 2,737,608 s 75 ,550,604


RECONCILIATION OF THE GOVERNMENT AL FUNDS BALANCE SHEET TO THE ST A TEMENT OF NET POSITION

June 30, 2020

Total fund balances - governmental funds $

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

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

65,118,871

governmental funds: 125,766,438

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

Accrued interest receivable $ Taxes receivable

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

Bonds payable $ Issuance premiums Issuance discounts

Deferred charges on refunding KSBIT assessment

Compensated absences Net pension liability - CERS

Net OPEB liability - CERS Net OPEB liability - KTRS Accrued interest payable

Certain amounts related to the net pension and OPEB liabilities

are not reported in the governmental funds, but are deferred in the statement of net position:

Pension and OPEB deferred outflows

Pension and OPEB deferred inflows

Net position of governmental activities

See Notes to Financial Statements

15

$

26,765

290,003 316,768

(111,676,000) (4,026,152)

374,632 1,272,754

(18,348)

(3,802,197) (38,226,643)

(9,140,256)

(25,083,000)

(399,793) (190,725,003)

14,767,579 (11,117,478) 3,650,101

$ 4,127,175


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

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

Total revenues

Expenditures: Instruction Support services:

Student Instructional staff District administration School administration Business Plant operation and maintenance Student transportation Food service After school

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

Principal Interest Bond issuance costs

Total expenditures

Excess (deficiency) of revenues over expenditures

Other financing sources (uses): Proceeds from the issuance of bonds Premium on bonds issued Proceeds from sale of capital assets Operating transfers in Operating transfers out

Total other financing sources (uses)

Net change in fund balances

Fund balance, June 30, 2019, restated

Fund balance, June 30, 2020 $

GOVERNMENTAL FUNDS


Special General Revenue

Fund Fund

33,130,166 $ 4,930,109

53,750 660,541 570,896 (266,724)

68,085,847 4,014,460 358,198 5,478,388

I 07, 789,507 9,226,124

70,986,421 8,519,855

4,655,803 346,412 3,851,109 101,206 1,056,503 8,294,768 16,806 2,426,957 9,135,480 4,349 8,306,281 193,555

249,729 I 66,595 901,616

I 08, 713,322 10,500,123

(923,815) (1,273,999)

221,580 3,540,278 1,213,514

(1,213,514)

2,548,344 1,213,514

1,624,529 (60,485)

16,172,407 151,928

17,796,936 $ 91,443

See Not.es to Financial Statements 16

Nonmajor Construction Governmental

Fund Funds

$ $ 9,184,996

38,957 3,531,831 3,792,325

16,548,109

3,298,917

30,685 86,601

405 18,450

2,272,766 3,500 12,727,822

5,743,000 2,116,085

223,460

15,224,048 11,297,643

(15,224,048) 5,250,466

42,940,000 3,705,598

1,703,856 7,897,162 (13,025,018)

48,349,454 (5,127,856)

33,125,406 122,610

11,379,978 2,602,498

$ 44,505,384 $ 2,725,108

Total Governmental

Funds

$ 42,315,162 4,930,109

53,750 699,498

3,836,003 75,892,632

5,836,586

133,563,740

82,805,193

5,032,900 4,038,916 1,056,503 8,311,574 2,426,957 9,140,234 8,518,286

249,729 166,595 901,616

2,276,266 12,727,822

5,743,000 2,116,085

223,460

145,735,136

(12,171,396)

42,940,000 3,705,598

221,580 14,354,810

(14,238,532)

46,983,456

34,812,060

30,306,811

$ 65,118,871


RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES


Net change in fund balances - total governmental funds

Amounts reported for governmental acti vities in the statement of activities

are different because:

Governmental funds report capital outlays as expenditures. However,

in the statement of activities, the cost of those assets is allocated

over their estimated useful lives and reported as depreciation expense:

Capital outlays

Depreciation expense

Governmental funds report the disposal of capital assets to the extent

proceeds are received. However, the statement of activities

reports the gain or loss.

Revenues in the statement of activities that do not provide current

financial resources are not reported as revenues in the governmental

funds :

Decrease in accrued interest receivable

Increase in taxes receivable

The issuance of long-term debt provides current financial resources

to governmental fund s, while the repayment of the principal of

long-term debt consumes the current financial resources of

governmental funds. Neither transaction, however, has any effect

on net position. Also, governmental funds report the effect of

certain items when debt is first issued, whereas these amounts

are deferred and amortized in the statement of activities:

Principal payments on bonds

Principal payments on lease obligations

Proceeds from issuance of bonds

Premium on bonds issued

Amortization of premiums on bonds

Amortization of discounts on bonds

Amortization of deferred charges on refunding

Certain expenses reported in the statement of activities do not require

the use of current financial resources and, therefore, are not

reported as expenditures in governmental funds :

Increase in accrued sick leave liability

Increase in pension expense - CERS

Increase in OPES expense - CERS

Decrease in OPES expense - KTRS

Decrease in KSBIT assessment

Decrease in accrued interest payable

Change in net position of governmental activities

Sec Notes to Financial Statements 17

$ 34,812,060

$ 15,733,030

(6,209,730) 9,523,300

(629)

$ (3,011)

13,382 10,371

$ 5,743,000

102,025

(42,940,000)

(3 ,705,598)

33 ,073

(46,005)

(236,350) (41,049,855)

$ (496,533)

(3 ,911,544)

(168,856)

522,944

18,348

34,042 ( 4,00 I ,599)

$ (706,352)


STATEMENT OF NET POSITION

PROPRIETARY FUNDS

June 30, 2020

Food Service

Fund

ASSETS Current assets:

Cash s 1,418,143 Accounts receivable:

Operating Due from other governments 256,201

Inventory 329,125

Total current assets 2,003,469

Noncurrent assets: Capital assets 1,628,755 Less accumulated depreciation (1,077,968)

Total noncurrent assets 550,787

Total assets 2,554,256

DEFERRED OUTFLOWS OF RESOURCES Pension deferred outflows 1,190,474 Other postemployment benefits deferred outflows 531,393

Total deferred outflows of resources 1,721,867

LIABILITIES Current liabilities:

Accounts payable 50,389 Unearned revenue 141,578

Total current liabilities 191,967

Non-current liabilities:

Net pension liability 5,846,428 Net other postemployment benefits liability 1,397 ,923

Total liabilities 7,436,318

DEFERRED INFLOWS OF RESOURCES Pension deferred inflows 174,610 Other postemployment benefits deferred inflows 517,211

Total deferred inflows on resources 691,821

NET POSITION Net investment in capital assets 550,787 Unrestricted (4,402,803)

Total net position $ (3,852,016)

Sec Notes to Fmanc1al Statements 18

Enterprise Funds After

School Fund

s 1,221,156

14,778

1,235,934

166,954 (115,252)

51,702

1,287,636

183, l 50 81,753

264,903

19,462

19,462

899,451 215,064

1,133,977

26,843 79,571

106,414

51,702 260,446

$ 312,148

Total

s 2,639,299

14,778 256,20 I 329,125

3,239,403

1,795,709 (1,193,220)

602,489

3,841,892

1,373,624 613,146

1,986,770

50,389 161,040

211,429

6,745,879 1,612,987

8,570,295

201,453 596,782

798,235

602,489 (4, 142,357)

s (3,539,868)


ST A TEMENT OF REVENUES, EXPENSES, AND CHANGES rN FUND NET POSITION

PROPRIETARY FUNDS


Enterprise Funds Food After

Service School Fund Fund Total

Operating revenues: Charges for services $ 1,569,892 $ 990,330 $ 2,560,222 Other operating revenues 13,299 13,299

Total operating revenues 1,583 ,191 990,330 2,573,521

Operating expenses: Salaries and wages 2,157,133 596,404 2,753,537 Employee benefits 1,334,048 219,438 1,553,486 Professional and technical services 28,595 8,353 36,948 Property services 51,186 95 51,281 Other purchased services 146,786 1,130 147,916 Supplies and materials 3,468,030 150,317 3,618,347 Property 66,093 32,645 98,738 Miscellaneous 18,600 18,600 Depreciation 148,099 17,352 165,451

Total operating expenses 7,418,570 1,025,734 8,444,304

Operating income (loss) (5,835,379) (35,404) (5,870,783)

Nonoperating revenues (expenses): Federal government grants 4,947,594 32 ,605 4,980,199 State government grants 62,076 1,340 63,416 Donated commodities 472,894 472,894 Gain (loss) on disposition of capital assets Interest income 18,719 16,799 35,518

Total nonoperating revenues (expenses) 5,501,283 50,744 5,552,027

Income before transfers (334,096) 15,340 (318,756)

Transfers out (116,278) (116,278)

Change in net position (450,374) 15,340 (435,034)

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

Net position, June 30, 2020 $ (3,852,016) $ 312,148 $ (3,539,868)

Sec Notes to Financial Statements 19


STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS


Food Sc1vicc

Fund Cash flows from operating activities :

Cash received from : Charges for se1vices s 1,6 12,688 Other operating revenues 13 ,299

Cash paid to / for: Employees (2 ,866,972)

Supplies {3,080,950)

Other se1vices (312,039)

Net cash provided by (used in) operating activities (4 ,633 ,974)

Cash flows from noncapital financing activities: Federal government grants 5,1 52,963

State government grants 62,076

Transfers out (116,278)

Net cash provided by noncapital financing activities 5,098 ,761

Cash flows from capital and related financing activities:

Acquisition of capital assets (143,844)

Net cash used in capital and related financing activities (143 ,844)

Cash flows from investing activities: Interest income [8 ,719

Net cash provided by investing activities [8 ,719

Net increase in cash and cash equivalents 339,662

Cash and cash equivalents: Beginning of year l ,078,48 l

End of year s 1,418 ,143

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

Operating income (loss) s (5,835,379)

Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities:

Depreciation expense 148,099 Commodities used 472 ,894

Changes in assets and liabilities: Accounts receivable - operating Inventory (134,412) Accounts payable 47,819 Net other postemployment benefits liability and deferrals 25 ,825 Net pension liability and deferrals 598 ,384 Deferred revenue 42,796

Net cash provided by (used in) operating activities s (4,633,974)

Noncash noncapital financing activities: Food coITunodities from the U.S. Department of Agriculture s 472,894

See Notes to Financ ial S1a1emtnts JU

Ente!Erise Funds After

School Fund Total

s 994,373 s 2,607,061 13 ,299

(719,83 [) (3 ,586,803 ) (150,317) (3,231 ,267)

(42,688) (354,727)

81 ,537 (4,552,437)

1,340 5,154,303 32,605 94,681

(116,278)

33 ,945 5,132,706

(3,999) (147,843)

(3 ,999) ( [47,843)

[6,799 35,518

[6,799 35,518

[28,282 467,944

l ,092,874 2,171,355

s l ,221 ,156 s 2,639,299

s (35,404) s (5 ,870,783)

l 7,352 165,451 472 ,894

(3,455) (3,455) (134,412)

(465) 47,354 3,973 29,798

92,038 690,422 7,498 50,294

s 81,537 s (4,552,437)

1. Reporting Entity


NOTES TO FINANCIAL STATEMENTS


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

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

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

2. Summary of Significant Accounting Policies

Basis of Presentation

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

The government-wide statements are prepared using the economic resources measurement focus and the accrual basis of accounting. This is the same approach used in the preparation of the proprietary fund financial statements but differs from the manner in which governmental fund financial statements are prepared. Governmental fund financial statements, therefore, include reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds.

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

21




2. Summary of Significant Accounting Policies, Continued

Basis of Presentation, Continued

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

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

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

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

The District reports the following funds:

Governmental Funds:

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

Special Revenue Funds:

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

22


NOTES TO FINANCIAL ST A TEMENTS




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

Student Activity Fund: The Student Activity Fund is used to account for funds raised and expended by student groups for co-curricular and extra-curricular activities.

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

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

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

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

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

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

23






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

After School Fund: The After School Fund is used to account for after school programs established to provide supervised activities for students after dismissal. Revenues are primarily charges for childcare. This is a major fund of the District.

Basis of Accounting

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

Revenues - Exchange and Non-Exchange Transactions:

Revenues resulting from exchange transactions, in which each party receives essentially equal value, are recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenues are recorded in the fiscal year in which the resources are measurable and available. Available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District, available means expected to be received within 60 days of the fiscal year end.

Non-Exchange Transactions, in which the District receives value without directly giving equal value in return, include property taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted; matching requirements, in which the District must provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the District on a reimbursement basis. On a modified accrual basis, revenues from Non-Exchange Transactions must also be available before they can be recognized.

24





Basis of Accounting, Continued

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

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

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

Budgetary Principles

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

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

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

Encumbrance Accounting

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

Cash and Cash Equivalents

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

25





Investments

Investments are measured at fair value on a recurring basis.

Accounts Receivable

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

Inventory

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

Capital Assets

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

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

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

26





Capital Assets, Continued

Description

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

Property Taxes

Estimated Lives

20 years 25-50 years

5 years 5-10 years

10-20 years 12 years

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

The assessed value of the roll on January 1, 2019, on which the levy for the 2020 fiscal year was based, totaled $6,123,330,775. Property taxes collected are recorded as revenues in the fiscal year for which they were levied. All taxes collected are initially deposited into the General Fund and then transferred to the appropriate fund.

The tax rates assessed for the year ended June 30, 2020, to finance General Fund and FSPK Building Fund operations were 54.4 cents and 17.1 cents per $100 valuation, respectively, for a total of 71.5 cents per $100 valuation. In addition, the tax rate assessed for motor vehicles totaled 49.0 cents per $100 valuation.

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

Unearned Revenue

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

27





Interfund Receivables and Payables

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

Bonds and Related Premiums, Discounts, and Issuance Costs

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

In governmental fund financial statements, bond premiums and discounts, as well as debt issuance costs are recognized in the current period. The face amount of the debt is reported as other financing sources. Premiums received on debt issuance are also reported as other financing sources. Discounts related to debt issuance are reported as other financing uses. Issuance costs are reported as debt service expenditures.

Pension and Other Postemployment Benefits

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

Deferred Outflows/Inflows of Resources

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

28





Deferred Outflows/Inflows of Resources. Continued

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

Net Position

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

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

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

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

Fund Balance Classification

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

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

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

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

29





Fund Balance Classification, Continued

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

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

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

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

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates.

Recently Issued Accounting Standards

The following recently issued accounting standard was implemented by the District at June 30, 2020:

GASBS No. 84 Fiduciary Activities

In January of 2017, the GASB issued Statement No. 84 to improve guidance regarding the identification, accounting and financial reporting for fiduciary activities. This Statement establishes criteria for identifying fiduciary activities for all state and local govenunents, and requires that activities meeting such criteria should present a statement of fiduciary net position and a statement of changes in fiduciary net position. The Statement is effective for reporting periods beginning after December 31 , 2019; however, the District, at the direction of the Kentucky Department of Education, elected to early-implement this standard. The cumulative effect of this change in accounting principle is disclosed in Note 18.

30





Recently Issued Accounting Standards, Continued

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

GASBS No. 87 Leases

In June of 2017, the GASB issued Statement No. 87 to improve accounting and financial reporting for leases by governments, by establishing standards for leases that previously were classified as operating leases. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset, thus requiring lessees to recognize a lease liability and an intangible right-to-use lease asset, and lessors to recognize a lease receivable and a deferred inflow of resources. The Statement is effective for reporting periods beginning after June 15, 2021. The District is currently evaluating the impact that the standard will have on its financial statements.

3. Deposits and Investments

Kentucky Revised Statutes (KRS) permit the District to invest money subject to its control in obligations of the United states and its agencies, certificates of deposit or other interest-bearing accounts, bankers acceptances, commercial paper, bonds of the commonwealth of Kentucky and its agencies, securities issued by a state or local government, mutual funds, exchange-traded funds, individual equity securities, and individual corporate bonds, as more fully described in Kentucky Revised Statute (KRS) KRS 66.480.

Deposits

The District's deposits (demand deposits accounts) are carried a cost, which approximates fair value. At June 30, 2020, the book balance of the District's bank deposits was $23,417,177 and the bank balances were $23,133,024. Of the bank balances, $250,000 was covered by federal depository insurance and $22,883,024 was collateralized by securities held by the pledging financial institution. There were no uninsured or uncollateralized balances.

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

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

31

3.




Deposits and Investments, Continued

Investments

At June 30, 2020, the District had the following investments and maturities:

Maturities in Years Less

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

Cash equivalents $ 861,907 $ $ $ $

Fixed income:

Bank certificates of deposit 1,496,301 213 ,796 1,010,686 271,819

Corporate bonds and notes 54,320 54,320

U.S. government agency obligations 2,326,604 51 ,967 774,7 17

U.S Treasury bonds and notes 102,235 I 02 ,235

Exchange traded funds 130,130

Mutual funds 926,564

Total investments $ 5,898,061 $ 213,796 $ 1,219,208 $ 1,046,536 $

Credit Risk

IO+ None

$ 861,907

1,499,920

130,130

926,564

1,499,920 $ 1,918,601

The risk that an issuer or other counterparty to an investment will not fulfill its obligations. The District's policy complies with K.RS 66.480, which requires that investments be rated in one of the three highest categories by a competent rating agency. U.S. Government securities or obligations carry the explicit guarantee of the U.S. government and, therefore, are not considered to have credit risk exposure.

Custodial Credit Risk

The risk that an entity will not be able to recover the value of its investments that are in the possession of an outside party if the counterparty fails. The District averts this risk by maintaining all investments in the entity's name.

Interest Rate Risk

The risk that changes in market interest rates will adversely affect the fair value of an investment. The District's policy provides for coordinating investment maturities to closely match cash flow needs, and complies with KRS 66.480, which requires that corporate bonds have a maturity of no more than l O years .

32




3. Deposits and Investments, Continued

Concentration of Credit Risk

The risk ofloss attributed to an over concentration in the portfolio of a security type or issuer. The District's policy complies with KRS 66.480, which requires that amounts invested in individual equity securities may not exceed 25% of total equity securities in the portfolio; amounts invested in any one type of investment may not exceed 20% of the total portfolio; amounts invested in mutual funds, exchange traded funds, individual equity securities, and corporate bonds may not aggregately exceed 40% of the total portfolio; and amounts invested in any one issuer may not exceed 5% of the portfolio.

Fair Value Measurements

The District categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset's fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The District does not have any investments that are measured using Level 3 inputs. The fair value measurements of the District's investments at June 30, 2020, are as follows:

Quoted Prices in Active Significant

Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs

Fair Value (Level 1) (Level 2) (Level 3)

Cash equivalents $ 861,907 $ 861,907 $ $

Fixed income:

Bank certificates of deposit 1,496,301 1,496,301 Corporate bonds and notes 54,320 54,320 U.S.governmentagency

obligations 2,326,604 2,326,604

U.S. Treasury bonds and notes 102,235 102,235

Exchange traded funds 130,130 130,130 Mutual funds 926,564 926,564

Total investments $ 5,898,061 $ 3,414,902 $ 2,483 ,159 $

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

33




3. Deposits and Investments, Continued

Fair Value Measurements, Continued

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

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

Exchange traded funds: Valued using the midpoint between the bid and asked prices as of the closing time of the New York Stock Exchange on business days.

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

Investment Earnings

Investment earnings for the year ended June 30, 2020, consisted of:

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

Business-type activities:

$ 569,488 138,904

(202) (11,703)

696,487

Interest and dividend income 35,518

$ 732,005

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

34




4. Capital Assets

Capital asset activity for the year ended June 30, 2020, was as follows:

Balance Balance June 30, 2019 Additions Dis~osals June 30, 2020

Governmental activities: Capital assets, not being

depreciated: Land $ 10,169,490 $ $ $ 10,169,490 Construction in progress 10,022,364 14,570,919 (2,950,700) 21,642,583

Total capital assets, not being depreciated 20,191 ,854 14,570,919 (2,950,700) 31,812,073

Capital assets, being depreciated: Land improvements 3,281,426 209,666 3,491,092 Buildings and improvements 161,231,974 2,950,700 164,182,674 Technology equipment 5,566,922 25,719 (1,095,220) 4,497,421 Vehicles 8,918,851 844,625 (85,075) 9,678,401 General equipment 2,360,276 82,101 (429,446) 2,012,931

Totals capital assets, being depreciated 181,359,449 4,112,811 (1,609,741} 183,862,519

Less accumulated depreciation: Land improvements (2,360,415) (89,399) (2,449,814) Buildings and improvements (72,312,550) (4,295,858) (76,608,408) Technology equipment (4,209,178) (781,389) 1,094,589 (3,895,978) Vehicles (4,770,248) (875,213) 85,075 (5,560,386) General equipment (ll655,145) (167,871} 429,448 (1,393,568)

Total accumulated depreciation (85,307,536) (6,209,730) 1,609,112 (89,908,154)

Total capital assets, being depreciated, net 96,051,913 (2,096,919) (629) 93,954,365

Governmental activities: Capital assets, net $ 116,243,767 $ 12,474,000 $ ~2,951,329) $ 125,766,438

Business-t:me activities: Capital assets, being depreciated:

Land improvements $ 15,452 $ $ $ 15,452 Technology equipment 138,127 (27,341) 110,786 Vehicles 48,008 48,008 General equipment 1,616,694 147,843 (143,074) 1,621,463

Total capital assets, being depreciated 1,818,281 147,843 (170,415) 1,795,709

Less accumulated depreciation: Land improvements (10,818) (773) (11,591) Technology equipment (103,659) (14,810) 27,341 (91,128) Vehicles (19,193) (7,833) (27,026) General equipment (1,064,514) (142,035) 143,074 (1,063,475)

Total accumulated depreciation (1!198,184) (165,451) 170 415 (1,193,220)

Business-type activities: Capital assets, net $ 620,097 $ ~17,608) $ $ 602,489

35




4. Capital Assets, Continued

5.

Depreciation expense was charged to governmental functions, as follows:

Instructional $ 3,222,641 Support services:

Student support 881 Instructional staff 2,799 District administration 32,955 School administration 1,541 Business support 15,805 Plant operations and maintenance 2,091,798 Student transportation 841,310

Total depreciation expense $ 6,209,730

Long-Term Liabilities

Long-term liability activity for the year ended June 30, 2020, was as follows:

Balance Balance Due June 30, June 30, Within

20\9 Additions Deductions 2020 One Year

Governmental activities: Long-tenn debt:

School building revenue bonds $ 74,479,000 $ 42,940,000 $ (5,743,000) $ l 11,676,000 $ 6,824,000

Deferred amounts: For issuance premiums 353,627 3,705,598 (33,073) 4,026,152 For issuance discounts (420,637) 46,005 (374,632)

Capital lease obligations 102,025 {102,025)

Total long-term debt 74,514,015 46,645,598 (5,832,093) 115,327,520 6,824,000

KSBIT assessment 36,696 (18,348) 18,348 18,348

Compensated absences: Accrued sick leave 3,305,664 869,861 (373,328) 3,802, l 97 458,871

Total governmental activities $ 77,856,375 $ 47,515,459 $ (6,223,769) $ 119,148,065 $ 7,301,219

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

School Building Revenue Bonds

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

36




5. Long-Term Liabilities, Continued

School Building Revenue Bonds, Continued

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

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

A summary of District and Commission bond activity for the year ended June 30, 2020, is as follows:

Balance, June 30, 2019 Issued Retired

Balance, June 30, 2020

$

$

District Commission

72,905,217 $ 1,573,783 42,573,559 366,441 (5,669,545) (73,455)

109,809,231 $ 1,866,769 ~======""""""==

Total

$ 74,479,000 42,940,000 (5,743,000)

$ 111,676,000

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

Balance, June 30, 2020 Range of Interest Final Rates Maturity District Commission Total

2011 Issue 0.75 - 2.125% 2023 $ 6,100,000 $ $ 6,100,000 2012 Issue 2.00 - 2.500% 2024 1,730,000 1,730,000 2013A Issue 1.50 - 3.250% 2033 1,425,000 1,425,000 2013B Issue 1.00 - 2.000% 2026 2,155,000 2,155,000 2014 Issue 0.35 - 3.625% 2034 6,980,000 6,980,000 2014B Issue 1.35 - 3.750% 2035 536,000 536,000 2014C Issue 1.50 - 3.600% 2027 1,455,000 1,455,000 2015A Issue 2.00 - 3.625% 2035 7,997,474 967,526 8,965,000 2015B Issue 2.00 - 3.000% 2030 7,155,000 7,155,000 2015C Issue 2.00 - 3.000% 2027 6,265,000 6,265,000 2016A Issue 1.00 - 3.000% 2027 1,760,000 1,760,000 2016B Issue 1.00 - 3.000% 2030 1,355,000 1,355,000 2016C Issue 2.00 - 3.000% 2036 4,270,000 4,270,000 2017A Issue 3.00% 2028 2,945,000 2,945,000 2017B Issue 2.00 - 3.000% 2037 1,487,198 532,802 2,020,000 2018 Issue 3.00- 4.000% 2039 7,915,000 7,915,000 2019 Issue 3.00 - 5.000% 2039 5,705,000 5,705,000 2020 Issue 2.00 - 5.000% 2040 42,573,559 366,441 422940,000

$ 109,809,231 $ 1,866,769 $ 111,676,000

37





School Building Revenue Bonds, Continued

The bonds may be called prior to maturity and redemption premiums are specified in each issue. Assuming no bonds are called prior to scheduled maturity, the minimum obligations of the District and amounts to be paid by the Commission, at June 30, 2020, for debt service (principal and interest) are as follows:

Daviess County Kentucky School Facility School District Construction Commission

Year Ending District Commission

June 30, Princieal Interest Total Princieal Interest Total Total

2021 $ 6,734,869 $ 3,167,9I8 $ 9,902,787 $ 89,131 $ 59,585 $ 148,716 $ 10,051,503 2022 6,748,338 3,I56,5I5 9,904,853 90,662 58,054 I48,7I6 10,053,569 2023 6,926,363 2,978,339 9,904,702 93,637 55,079 148,7I6 I0,053,4I8 2024 7,120,286 2,788,847 9,909,I33 96,714 52,001 148,715 10,057,848 2025 7,062,104 2,591,620 9,653,724 99,896 48,820 148,716 9,802,440 2026-2030 36,045,261 8,913,117 44,958,378 554,739 188,839 743,578 45,701,956 2031-2035 29,912,320 3,582,325 33,494,645 65I ,680 91 ,897 743,577 34,238,222

2036-2040 9,259,690 646,219 9,905,909 I90,310 11,866 202,I 76 10,108,085

$ I 09,809,231 $ 27,824,900 $ I37,634,I31 $ 1,866,769 $ 566,I41 $ 2,432,910 $ 145,110,041

Generally, all bonds issued are secured by a statutory mortgage lien on the respective school buildings and appurtenant properties, including any subsequent additions thereto. The agreements contain a provision that in the event of default, action can be taken to compel specific performance. The amount of interest expense on bonds payable for the year ended June 30, 2020, totaled $2,333,509, of which $2,282,132 was incurred by the District, and $51 ,377 was paid by the Commission.

The District defeased various revenue bonds in prior years by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on old bonds. Accordingly, the trust account assets and the liabilities relating to all of these def eased bonds are not included in the District's financial statements. On June 30, 2020, $29,790,000 of bonds outstanding are considered defeased.

Capital Lease Obligations

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

38





Capital Lease Obligations, Continued

rights. Assets under capital leases at June 30, 2020, totaled $65,057, net of accumulated depreciation of $1,245,397. Amortization of these capital leases included in depreciation expense totaled $151,558 for the year ended June 30, 2020. The lease obligations were paid in full during fiscal year 2020, and interest expense for the year ended June 30, 2020, totaled $2,543.

KSBIT Assessment

In years prior to fiscal year 2000, the District participated in the Kentucky School Boards Insurance Trust, which has become insolvent. In accordance with the original pai1icipation agreement and a court order dated June 4, 2014, each participant in the trust in any prior year was levied an assessment to cover the deficit in order to close the trust. The final installment to be paid by the District for the year ending June 30, 2021, is $18,348.

Compensated Absences

Upon retirement, as defined by the Teachers' Retirement System of the State of Kentucky or the County Employees Retirement System, certified and classified employees received an amount equal to 30% of the value of accumulated sick leave based on the individual final salary. This liability totaled $3,802,197 at June 30, 2020, and is recorded as a long-term liability in the district-wide financial statements. Unused accumulated vacation leave does not vest and, therefore, is not recorded as a liability in the financial statements.

For governmental fund financial statements, the amount of compensated absences recorded as a liability would be the amount expected to be paid using expendable available resources. These obligations for June 30, 2020, were paid prior to fiscal year end and, therefore, no amount has been accrued in the governmental fund financial statements.

6. Leases

The District leases equipment under cancelable operating leases. Commitments under these agreements provide for minimum future rental payments as of June 30, 2020, as follows:

Year ending June 30:

2021 2022 2023 2024

Total minimum rentals

$

$

97,143 54,778 32,064 14,039

198,024

Rental expense for operating leases, including contingent rentals on a per copy basis of $113,321 totaled $225,325 for the year ended June 30, 2020.

39




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

Plan Description

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

Benefits Provided

For members who have established an account in a retirement system administered by the Commonwealth prior to July 1, 2008, members become vested when they complete five (5) years of credited service. To qualify for monthly retirement benefits, payable for life, members must either: 1. Attain age fifty-five (55) and complete five (5) years of Kentucky service, or 2. Complete 27 years of Kentucky service.

Participants that retire before age 60 with less than 27 years of service receive reduced retirement benefits. Non-university members with an account established prior to July 1, 2002, receive monthly payments equal to two (2) percent (service prior to July 1, 1983) and two and one-half (2.5) percent (service after July 1, 1983) of their final average salaries for each year of credited service. New members (including second retirement accounts) after July 1, 2002, will receive monthly benefits equal to 2% of their final average salary for each year of service if, upon retirement, their total service is less than ten years. New members after July 1, 2002, who retire with ten or more years of total service will receive monthly benefits equal to 2.5% of their final average salary for each year of service, including the first ten years. In addition, members who retire July 1, 2004, and later with more than 30 years of service will have their multiplier increased for all years over 30 from 2.5% to 3.0% to be used in their benefit calculation. Effective July 1, 2008, the System has been amended to change the benefit structure for members hired on or after that date.

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

40




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

Benefits Provided, Continued

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

Contributions

Contribution rates are established by Kentucky Revised Statutes. Members are required to contribute 12.855% of their salaries to KTRS for the year ended June 30, 2020. The State, as a non-employer contributing entity, contributes 13 .105% of the salaries of school district members who joined before July 1, 2008, and 14.105 % for those who joined thereafter. For local school district members whose salaries are federally funded, the District contributes 16.105% of salaries.

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

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

Because the State, as a non-employer contributing entity, is required by Kentucky Revised Statutes to contribute 100% of the District's contractually required contributions, the District reports no pension liabilities, pension expenses, deferred outflows of resources, or deferred inflows ofresources related to KTRS.

The portion of the KTRS net pension liability that was associated with the District recognized at June 30, 2020, was as follows:

District's proportionate share of the net pension liability

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

Total

$

218,463 ,948

$ 218,463,948

The net pension liability was measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2018 . The net pension liability associated with the District was based on a projection of the District 's long-term share of contributions to the pension plan relative to the projected contributions of all participating school districts and the State, actuarially determined. At June 30, 2019, the measurement date, the District's proportion of the KTRS net pension liability was 1.6012%, an increase of .0216% from its proportion measured as of June 30, 2018, of 1.5796%.

41





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

For the year ended June 30, 2020, the District recognized on-behalf pension expense and revenue of $16,440,617 for contributions provided by the State.

Actuarial Assumptions

The total pension liability in the June 30, 2018, actuarial valuation was detennined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation

Salary increases, including inflation

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

Municipal Bond Index Rate:

Prior Measurement Date

Measurement Date

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

Prior Measurement Date

Measurement Date

Post-Retirement Benefit Increases

3.00%

3.50 to 7.30%

7.50%

3.89%

3.50%

7.50%

7.50%

1.50% annually

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

The actuarial assumptions used in the June 30, 2018, valuation were based on the results of an actuarial experience study for the period July I, 20 I 0, to June 30, 2015, adopted by the KTRS Board on November 19, 2016.

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

42





Actuarial Assumptions. Continued

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

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

U.S. equity 40% 4.2%

International 22 5.2%

Fixed income 15 1.2%

Additional categories 8 3.3%

Real estate 6 3.8%

Private equity 7 6.3%

Cash _ 2_ 0.9%

100%

Discount Rate

The discount rate used to measure the total pension liability (TPL) as of the Measurement Date was 7 .50%. The projection of cash flows used to determine the discount rate was performed in accordance with GASB 67. KTRS assumed that Plan member contributions will be made at the current contribution rates and that employer contributions will be made at statutorily required rates, adjusted by 95% for all fiscal years in the future. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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

The following presents the State's proportionate share of the net pension liability associated with the District using the discount rate of 7 .50%, as well as what the State's proportionate share of the net pension liability associated with the District would be if it were calculated using a discount rate that is I-percentage-point lower (8.50%) or I-percentage-point higher (6.50%) than the current rate:

43





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

1 % decrease

Current discount rate

1 % increase

Plan Fiduciary Net Position

Discount rate

6.50%

7.50%

8.50%

State's proportionate share of net pension liability associated

with the District

$278,949,311

$218,463,948

$167,566,981

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

Payable to the Pension Plan

Because the State is required by statute to contribute 100% of the District's contractually required pension contributions, the District reports no payable for such pension contributions at June 30, 2020.

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

Medical Insurance Plan (MIP)

Plan description - In addition to the pension benefits described in Note 7, Kentucky Revised Statute 161.675 requires KTRS to provide post-employment healthcare benefits to eligible members and dependents . The MIP is a cost-sharing multiple employer defined benefit plan with a special funding situation. Changes made to the medical plan may be made by the KTRS Board of Trustees, the Kentucky Department of Employee Insurance and the General Assembly.

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

44




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

Medical Insurance Plan (MIP), Continued

Contributions - In order to fund the post-retirement healthcare benefit, seven and one-half percent (7.50%) of the gross annual payroll of members is contributed. Three percent (3.75%) is paid by member contributions and three quarters percent (.75%) from State appropriation and three percent (3.00%) from the employer. The State contributes the net cost of health insurance premiums for members who retired on or after July 1, 2010, who are in the non-Medicare eligible group. Also, the premiums collected from retirees as described in the plan description and investment interest help meet the medical expenses of the plan.

At June 30, 2020, the District reported a liability for its proportionate share of the collective net OPEB MIP liability and the related deferred ouflows or deferred inflows.

Life Insurance Plan (LIP)

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

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

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

At June 30, 2020, the District did not report a liability for a proportionate share of the collective net OPEB LIP liability, nor any related deferred outflows or deferred inflows, because the State of Kentucky provides the OPEB LIP support directly to KTRS on behalf of the District, and the District does not contribute to the LIP.

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

At June 30, 2020, the District reported a liability of $25,083,000 for its proportionate share of the collective net MIP OPEB liability that reflected a reduction for state MIP OPEB support provided to the District. The collective net MIP OPEB liability was measured as of June 30,

45




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

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

2019, and the total MIP OPEB liability used to calculate the collective net MIP OPEB liability was based on a projection of the District's long-tenn share of contributions to the MIP OPEB plan relative to the projected contributions of all participating employers, actuarially detennined. At the June 30, 2019 measurement date, the District's proportion was 0.85700 I 0%, an increase of 0.0395490% from its proportion measured as of June 30, 2018 of 0.8174520%.

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

MIP LIP

District's proportionate share of the net OPEB liability $ 25,083,000 $

State's proportionate share of the net OPEB liability associated with the District 20,256,000 471,000

Total $ 45,339,000 $ 471,000

For the year ended June 30, 2020, the District recognized MIP OPEB expense of$1,071,803. In addition, on-behalf MIP and LIP OPEB revenue and expense for support provided by the State totaled $1,205,120 and $19,897 for the year ended June 30, 2020. At June 30, 2020, the District reported deferred outflows ofresources and deferred inflows ofresources related to the MIP OPEB from the following sources:

Differences between expected and actual experience

Changes of assumptions

Net difference between projected and actual earnings on plan investments

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

District contributions subsequent to the measurement date

Total

46

$

$

Deferred Outflows of Resources

667,000

107,000

1,218,000

1,517,220

MIP

Deferred Inflows of Resources

$ 6,071,000

524 ,000

3,509,220 $ 6,595,000 -~--------




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


Of the total amount reported as deferred outflows of resources related to the MIP OPEB, $1,517,220 resulting from District contributions subsequent to the measurement date and before the end of the fiscal year will be included as a reduction of the collective net MIP OPEB liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to MIP OPEB will be recognized in the District's MIP OPEB expense as follows:

Year ended June 30,

2021 $ (891 ,000) 2022 2023 2024 2025 2026 target

(891,000) (837,000) (848,000) (706,000) (430,000)

$ (4,603,000)

Actuarial assumptions - The total MIP and LIP OPEB liabilities in the June 30, 2018, actuarial valuation were determined using the following actuarial assumptions, applied to all periods included in the measurement:

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

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

net of OPEB plan investment expense, including inflation:

MIP 8.00% LIP 7.50%

Municipal Bond Index Rate 3.50% Single Equivalent Interest Rate, net

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

MIP 8.00% LIP 7.50%

47




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


MIP Health Care Cost Trends: Under 65

Ages 65 and Older

Medicare Part B Premiums

7.50% for FY 2019 decreasing to an ultimate rate of 5.00% by FY 2024 5.50% for FY 2019 decreasing to an ultimate rate of 5.00% by FY 2021 2.63% for FY 2019 with an ultimate rate of 5.00% by 2031

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

The remaining actuarial assumptions ( e.g. initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2018, valuation were based on a review of recent plan experience done concurrently with the June 30, 2018, valuation.

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

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

48




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


30 Year Expected Geometric Real

Target Allocation Rate of Return

Asset Class MIP LIP MIP LIP

Global Equity 58.0% 0.0% 5.1% U.S. Equity 0.0 40.0 4.3% International Equity 0.0 23.0 5.2% Fixed Income 9.0 18.0 1.2% 1.2% Real Estate 6.5 6.0 3.8% 3.8% Private Equity 8.5 5.0 6.3% 6.3% Other Additional Categories 17.0 6.0 3.2% 3.2% Cash (LIBOR) 1.0 2.0 0.9% 0.9%

Total 100% 100%

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

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

1 % decrease (7.00%)

Current discount rate

(8.00%) 1 % increase

(9.00%)

Net MIP OPEB liability $ 29,713,000 $ 25,083,000 $ 21,204,000

49




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


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

1 % decrease Current

trend rate l % increase

Net MIP OPEB liability $ 20,418,000 $ 25,083,000 $ 30,818,000

OPEB plans 'fiducia,y net position - Detailed infonnation about the OPEB plans' fiduciary net position is available in the separately issued KTRS financial report.

Payable to the OPEB Plans

The District reported payables of $0 for the outstanding amount of MIP and LIP OPEB contributions due to the Plans at June 30, 2020.

9. Pension and Other Postemployment Benefits - CERS

Plan Description

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

Benefits Provided

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

50




9. Pension and Other Postemployment Benefits - CERS, Continued

Benefits Provided, Continued

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

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

Contributions

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

The District's actuarially determined contribution rates and contribution amounts, based on annual creditable compensation for the year ended June 30, 2020, were as follows:

Contribution Rates Contributions

Pension 19.30% $ 3,167,368

OPEB 4.76 781 ,175

Total 24.06% $ 3,948,543

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

The net pension and OPEB liabilities reported as of June 30, 2020, were measured as of June 30, 2019, and the total pension and OPEB liabilities used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2018. The District's proportion of the liabilities was based on a projection of the District's long-term share of contributions to the plan relative to the projected contributions of all participating entities, actuarially determined. Changes in the District's pension and OPEB proportions as of the measurement dates were as follows:

51





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

June 30, 2018

Decrease

June 30, 2019

Pension

0.651517%

(0.012071)

0.639446%

OPEB

0.651496%

(0.012166)

0.639330%

The District's pension and OPEB liabilities and expense as of and for the year ended June 30, 2020, were as follows:

Proportionate Share

Pension/OPEB Expense

Net Pension Net OPEB Liability Liability

$ 44,972,522 $ 10,753,243 =====~"====

$ 7,769,334 $ 979,829

At June 30, 2020, the District reported deferred outflows of resources and deferred inflows of resources related to pensions and OPEB from the following sources:

Pension OPEB

Deferred Deferred Deferred Deferred

Outflows of Inflows of Outflows of Inflows of

Resources Resources Resources Resources

Differences between expected and actual experience $ I, 148,283 $ 190,020 $ $ 3,244,502

Changes of assumptions 4,551,730 3,181 ,984 21,278

Net difference between projected and actual earnings on plan investments 724,976 477,612

Changes in proportion and differences between contributions and proportionate share of contributions 290,112 427,175 124,477 235,150

Contributions subsequent to the measurement date 3,167,368 781,175

Total $ 9, 15 7,493 $ 1,342,171 $ 4,087,636 $ 3,978,542

The $3,167,368 and $781,175 of deferred outflows ofresources resulting from the District's pension and OPEB contributions subsequent to the measurement date will be recognized as a reduction of the net pension and OPEB liabilities in the year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources will be recognized in pension and OPEB expense as follows:

52




9. Pension and Other Posternployrnent Benefits - CERS, Continued

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

Pension OPEB Year ending June 30,

2021 $ 3,148,197 $ (97,813) 2022 1,058,717 (97,813) 2023 389,605 54,040 2024 51,435 (236,823) 2025 (245,277) 2026 (48,395)

$ 4,647,954 $ (672,081)

Actuarial Assumptions

The total pension/OPEB liabilities in the June 30, 2018, actuarial valuation were detennined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation

Healthcare payroll growth rate

Salary increases

Net investment rate

Healthcare cost trend rates (OPEB)

2.30%

2.00%

3.30% to 10.30%, varies by service

6.25%

Pre-65: Initial trend starting at 7 .0% at January 1, 2020, and gradually decreasing to an ultimate trend rate of 4.05% over a period of 12 years. Post-65: Initial trend starting at 5.0% at January 1, 2020, and gradually decreasing to an ultimate trend rate of 4.05% over a period of l O years.

The mortality table used for active members was a Pub-20 l O General Mortality table, projected with the ultimate rates from the MP-2014 mortality improvement scale using a base year of 20 l 0. The mortality table used for healthy retired members was a system-specific mortality table based on mortality experience from 2013-2018, projected with the ultimate rates from MP-2014 mortality improvement sale using a base year of 2019. The mortality table used for the disabled members was PUB-2010 Disabled Mortality table, with a 4-year set-forward for both male and female rates, projected with the ultimate rates from the MP-2014 mortality improvement scale using a base year of 2010.

53





Actuarial Assumptions, Continued

The actuarial assumptions used in the June 30, 2018, valuation were based on the results of an actuarial experience study for the five-year period ended June 30, 2018.

The long-tenn expected rate of return was determined by using a building-block method in which best-estimate ranges of expected future real rate of returns are developed for each asset class. The ranges are combined by weighting the expected future real rate of return by the target asset allocation percentage. The target allocation and best estimates of arithmetic real rate of return for each major asset class are summarized in the following table.

Long-Term Target Expected Real Rate

Asset Class Allocation of Return

Growth US equity 18.75% 4.30% Non US equity 18.75 4.80% Private equity 10.00 6.65% Specialty credit/high yield 15.00 2.60%

Liquidity Core bonds 13.50 1.35% Cash 1.00 .20%

Diversifying strategies Real estate 5.00 4.85% Opportunistic 3.00 2.97% Real return 15.00 4.10%

Total 100.00%

Discount Rate

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

Discount rate, June 30, 2018

Increase (decrease)

Discount rate, June 30, 2019

54

Pension

6.25%

6.25%

OPEB

5.85%

( 0.17)

5.68%





Discount Rate, Continued

The discount rate of 6.25% used to measure the total pension liability was based on the expected rate ofretum on pension plan investments. The discount rate of 5.68% used to measure the total OPEB liability was based on the expected rate of return of 6.25% and a municipal bond rate of 3.13%, as reported in Fidelity Index's "20-Year Municipal GO AA Index" as ofJune 30, 2019.

The projection of cash flows used to detennine the pension discount rate assumed that the funds would receive the required employer contributions in each future year, as detennined by the current funding policy established in Statute last amended by House Bill 362 (passed in 2018). The projection of cash flows used to detennine the OPEB discount rate assumed that employers would contribute the actuarially detennined contribution rate of projected compensation over the remaining 24 years ( closed) amortization period of the unfunded actuarial accrued liability.

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

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

District's Proportionate Share

Discount Net pension Discount Net OPEB Rate Liability Rate Liability

l % decrease 5.25% $ 56,247,869 4.68% $ 14,404,921

Current discount rate 6.25% $ 44,972,522 5.68% $ 10,753,243

l % increase 7.25% $ 35,574,629 6.68% $ 7,744,502

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

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

55





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

1 % decrease

Current healthcare cost trend rates

1 % increase

Plan Fiduciary Net Position

Healthcare Cost Trend Rates

6.0% Pre-65 or 4.0% Post-65

7.0% Pre-65 or 5.0% Post-65

8.0% Pre-65 or 6.0% Post-65

$

$

$

District's Proportionate Share of Net OPES

Liability

7,997,241

10,753,243

14,095,221

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

Payables to the Pension/OPES Plans

The District reported the following payables for the outstanding amount of pension/OPES contributions due to CERS for the year ended June 30, 2020.

Pension OPES

$ $ ====~=

10. On-Behalf Payments

Payments are made by the Commonwealth of Kentucky for various purposes on behalf of the District. These on-behalf payments are budgeted and recorded as revenue and expense in the governmental funds of the District, and are comprised of the following for the year ended June 30, 2020:

KTRS: Pension Retiree heal th insurance Retiree life insurance

Health insurance HRA and administrative fees State life insurance Technology KSFCC debt service

56

$ 16,440,617 1,205,120

19,897 11,508,287

942,734 19,495

172,001 124,832

$ 30,432,983




11. Deferred Compensation

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

12. Fund Balance Classification

The composition of the fund balance classifications at June 30, 2020, is as follows :

Maior Govenunental Funds Nonmajor Governmental Funds

Total Special District School FSPK Nonmajor

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

Fund balances: Nonspendable:

Inventory s 325.398 s s s s s s s 325J98 Prepaid expenses 56.627 56.627

382.025 382.025

Restricted for: Future capital needs 1.892.588 431.918 431.918 2.324 .506 Other 203.793 42.612.796 190.076 2. 10 .114 2.293.190 45 .109.779 Technology 91.443 91.443

295.236 44.505.384 190.076 2.103.114 43 1.918 2.725. 108 47.525.728

Committed: Site-based

carryforward 326.238 326.238

Assigned: Future construction

project 2.200.000 2.200.000 Purchase obligat ions 17.499 17.499

2.217.499 2.217.499

Unass igned 14.871,174 (203.793) 14.667.381

Total fund balances s 17.796.936 s 91.443 5 44.505.384 5 190.076 s 2.103.114 $ 43 1.918 s 2.725.1 08 $ 65.118.871

The District has $41,184,582 of encumbrances of operating funds in major and nonmajor funds at June 30, 2020, rolled over into the next fiscal year.

13. Net Position Deficit

The net position deficit reported by the Food Service Fund in the amount of $(3,852,016) resulted from the recording of the net pension and OPEB liabilities.

57

14.




Transfers

Interfund transfers for the year ended June 30, 2020, consisted of the following:

Transfers in:

Major Norunajor Governmental Funds Governmental Funds

Special District General Revenue Constmction Activity Debt Service

Fund Fund Fund Fund Fund Total

Transfers out:

Major Governmental Fund: General Fund s s 1,213.S 14 s s s s 1,213,514

Nonmajor Governmental

Funds: School Activity

Funds 163,659 163,659 SEEK Capital

Outlay Fund 1,016,734 1,016,734 FSPK Building

Fund 2,407,266 1,703 ,856 7,733 ,503 11,844,625 13 ,025,018

Major Enterprise Fund:

Food Service Fund 116,278 116,278

s 3,540,278 s 1,213,514 s 1,703,856 s 163,659 s 7,733,503 s 14,354,810

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

15. Risk Management

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

58

16. Contingencies




The District receives funding from Federal , state and local government agencies and from private contributions. These funds are to be used for designated purposes only. For government agency grants, if based upon the grantors' review, the funds are considered not to have been used for the intended purpose, the grantors may request a refund of monies advanced, or refuse to reimburse the District for its disbursements. The amount of such future refunds and unreimbursed disbursements, if any, is not expected to be significant. Continuation of the District's grant programs is predicated upon the grantors' satisfaction that the funds provided are being spent as intended and the grantors' intent to continue their programs.

17. Commitments

In March of 2018, the District entered into an agreement for the sale of the Daviess County Middle School property for $1.5 million on or before June 30, 2021, pending completion of a new middle school facility.

During fiscal year 2020, the District entered into construction contracts totaling $55,748,126 for various facility improvements. Remaining commitments under these contracts totaled $41,469,673 at June 30, 2020, of which $1 ,911 ,112 was included in accounts payable in the Construction Fund.

18. Impact of Recently Issued Accounting Standard

In fiscal year 2020, as disclosed in Note 2, the District implemented GASB Statement No. 84, Fiduciary Activities, which established criteria for identifying and reporting fiduciary activities for all state and local governments.

As a result of implementing this Statement, the fiduciary fund which previously reported the school activity funds , is now reported as a special revenue fund identified as the Student Activity Fund, and beginning fund balance/net position was restated as follows:

Fund Balance Net Position

Student Nonmajor Total Activity Govenunental Govenunental Govenunental

Fund Funds Funds Activities

Balance, June 30, 2019, as previously reported $ $ 635 ,450 $ 28,339,763 $ 2,866,479

Restatement 1,967,048 1,967,048 1,967,048 1,967,048

Balance, June 30, 2019, restated $ 1,967,048 $ 2,602,498 $ 30,306,811 $ 4,833,527

59




19. Impact of COVID-19

In March 2020, the World Health Organization declared the outbreak of a novel corona virus (COVID-19) as a pandemic. The District moved to nontraditional instruction from March 16, 2020, through the end of the school year. In response to COVID-19, governmental assistance received included the following:

1) Federal CARES Act funds totaling $1,833,365 were awarded to the District through the Kentucky Department of Education, of which $415,217 was expended and recognized as grant revenue in fiscal year 2020. The remainder of the awards totaling $1,418,748 is available to draw in fiscal year 2021 for eligible expenditures. These funds are required to be used to support remote learning and district food service (losses).

2) Federal CARES Act funds totaling $196,500 were awarded to the District through the Kentucky Cabinet for Health and Family Services, of which $166,595 was expended and recognized as grant revenue in fiscal year 2020. The remainder of the awards totaling $29,905 is available to draw in fiscal year 2021 for eligible expenditures. These funds were for the sustainment of childcare programs operating at the District's elementary schools.

60

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

Total revenues

Expenditures : Instruction Support services:

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

Community services Building renovations/ additions

Total expenditures


BUDGETARY COMPARISON SCHEDULE

GENERAL FUND

YearEndedJune30,2020

Budget

Original Final

s 32,777,681 s 32,777,681 4,250,000 4,250,000

70,000 70,000

I 50,000 I 50,000

675,500 675,500 66,954 ,049 68,024,397

225,000 225,000

I 05, I 02,230 I 06, 172,578

73 ,437,740 73 ,880,454

3,393,679 4,800,894 3,895,884 3,815,527

10,760,282 10,766,463 8,612,300 8,398,386

2,660,458 2,613,026

8,793,478 9,496,357

8,760,425 8,408,856

120,3 14,246 122,179,963

Excess (deficiency) of revenues over expenditures (15,212,016) ( 16,007,385)

Other financing sources (uses): Proceeds from sale of capital assets 15,000 15,000

Operating transfers in 726,452 1,521,821

Operating transfers out (283,954) (283,954)

Total other financing sources (uses) 457,498 1,252,867

Net change in fund balance (14,754,518) (14,754,518)

Fund balance, June 30, 2019 16, 172,407 16,172,407

Fund balance, June 30, 2020 s 1,417,889 s 1,417,889

61

Variance with Actual Final Budget

s 33 , 130, 166 s 352,485 4,930,109 680,109

53,750 (16,250) 660,541 510,541 570,896 (104,604)

68,085,847 61,450 358,198 133,198

107,789,507 1,616,929

70,986,421 2,894,033

4,655,803 145,091 3,851,109 (35,582) 1,056,503 9,709,960 8,294,768 103,618 2,426,957 186,069 9,135,480 360,877 8,306,28 I 102,575

108,713 ,322 13,466,641

(923,815) I 5,083,570

221,580 206,580 3,540,278 2,018,457

(1 ,213,514) (929,560)

2,548,344 1,295,477

1,624,529 16,379,047

16,172,407

$ 17,796,936 s 16,379,047

Revenues: Other local revenue State aid Federal aid

Total revenues

Expenditures: Instruction Support services:

Student Instructional staff School administration Plant operation and maintenance Student transportation Food service After school

Community services

Total expenditures


BUDGETARY COMPARISON SCHEDULE

SPECIAL REVENUE FUND


Budget Original Final

$ 316,420 $ 395,946 3,650,179 3,917,632 5,360,900 7,541,952

9,327,499 11,855,530

7,786,290 9,920,263

172,609 279,157 61,078

17,048 17,323 3,547 2,067

444,889 439,708 249,832 196,500

903,116 903,116

9,327,499 12,069,044

Excess (deficiency) of revenues over expenditures (213,514)

Other financing sources (uses): Operating transfers in 213,514 Operating transfers out

Total other financing sources (uses) 213,514

Net change in fund balance

Fund balance, June 30, 2019 151,928 151,928

Fund balance, June 30, 2020 $ 151,928 $ 151,928

62

Variance with Actual Final Budget

$ (266,724) $ (662,670) 4,014,460 96,828 5,478,388 (2,063,564)

9,226,124 (2,629,406)

8,519,855 1,400,408

346,412 (67,255) 101,206 (40,128)

16,806 517 4,349 (2,282)

193,555 246,153 249,729 103 166,595 29,905 901,616 1,500

10,500,123 1,568,921

(1,273,999) (1,060,485)

1,213,514 1,000,000

1,213,514 1,000,000

(60,485) (60,485)

151,928

$ 91,443 $ (60,485)


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

Last l O Fiscal Years *

2020 2019 2018 2017

District's proportion of the plan total net pension liability 0.0000% 0.0000% 0.0000% 0.0000%

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

State's proportionate share of the net pension liability associated with the District 218,463,948 206,836,340 427,477,363 465,688,704

Total $ 218,463,948 $ 206,836,340 $ 427,477,363 $ 465 ,688,704

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

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

Plan fiduciary net position as a percentage of the

total pension liability 58 .80°1., 59.30% 39.83% 35.22%

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

63

2016 2015

0.0000% 0.0000%

$ $

360,367,617 318,464,968

$ 360,367,617 $ 318,464,968

$ 45 ,537,911 $ 45 ,654,333

0.00% 0.00%

42.49% 45.59%


SCHEDULE OF PENSION CONTRIBUTIONS TEACHERS' RETIREMENT SYSTEM OF THE ST A TE OF KENTUCKY

Last 10 Fiscal Years *

2020 2019 2018 2017

District's contractually required contributions $ $ $ $

District's contributions in relation to the contractually required contributions

Contribution deficiency (excess) $ $ $ $

2016 2015

$ $

$ $

District's covered payroll $ 50,574,405 $ 49,755,274 $ 48,545,737 47,896,500 $ 47,282,367 $ 45,537,911

Contributions as a percentage of

covered payroll 0.00%

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

0.00%

64

0.00% 0.00% 0.00% 0.00%


SCI I EDU LE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITIES TEACHERS' RETIREMENT SYSTEM OF TIIE STATE OF KENTUCKY

Las1 IO Fiscal Y cars •

2020 20 19

MEDICAL INSURANCE PLAN {Mil')

District's proportion of the plan total ncl Mil' OPEB liability 0.857001% 0.817452%

District's proportionate: share of the net MIi' Ol'EB liability associated with the District s 25,083,000 $ 28,363,000

State's proportionate share of the net MIi' OPEB liability associated with the District 20,256,000 24,443,000

Total $ 45,339,000 $ 52,806,000

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

District's proportionate sha ofihc net Mil' OPEB liability as a

percentage of its covereil payroll 50.41 % 58.43%

Plan liduciary net position s a percentage of the total Mil' OPEB liability 32.58% 25.50%

LIFE INSUR NCE PLAN LIP

District's proportion or the Ian 101al net LIP OPEB liability 0.00% 0.00%

District's proportionate sha of the net LIP Ol'EB liability associated with the Dis ict s $

State's proportionate share fthc net LIi' Ol'EB liability associated with the Dis ict 471,000 419,000

Total s 471,000 $ 419,000


District's proportionate share ofthc net LIP OPEB liability as a percentage of its co cred payroll 0.00% 0.00%

Plan fiduciary net position s a percentage of the total LIi' OPEB liability 73.40% 75.00%

• Presented for those yea for which the information is available.

20 18

0.838680%

$ 29,906,000

24,428,000

s 54,334,000

s 47,896,500

62.44%

21 .18%

0.00%

$

327,000

s 327,000

$ 47,896,500

0.00%

79.99%


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


2020 2019 2018

MEDICAL INSURANCE PLAN (MIP)

District's contractually required contributions $ 1,517,222 $ 1,492,651 $ 1,456,375

District's contributions in relation to the contractually required contributions (1,517,222) (1,492,651) (1,456,375)

Contribution deficiency (excess) $ $ $

District's covered payroll $ 50,574,405 $ 49,755,274 $ 48,545,737

Contributions as a percentage of covered payroll 3.00% 3.00% 3.00%

LIFE INSURANCE PLAN (LIP)

District's contractually required contributions $ $ $

District's contributions in relation to the contractually required contributions

Contribution deficiency (excess) $ $ $

District's covered payroll $ 50,574,405 $ 49,755,274 $ 48,545,737

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


66


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


PENSION

Changes of 13endit Terms 2020 None 2019 None 2018 None 2017 None 2016 None

Changes of Assumptions 2020 The municipal bond index rate increased from 3.89% to 3.50%. 2019 The municipal bond index rate increased from 3.56% to 3.89%.

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

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

MEDICAL INSURANCE PLAN !MIP)

Changes of 13eneflt Terms 2020 None 2019 None 2018 With the passage of Kentucky House bill 471, the eligibility for non-single subsidies (NSS) for the

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

Changes of Assumptions 2020 The municipal bond index rate decreased from 3.89% to 3.50%.

Health Care Cost Trends for Under Age 65 decreased from 7.75% to 7.50%. Health Care Cost Trends for Ages 65 and Older decreased from 5.75% to 5.50%. Health Care Cost Trends for Medicare Part B Premiums increased from 0.00% to 2.63 %.

2019 The municipal bond index rate increased from 3.56% to 3.89%. Health Care Cost Trends for Medicare Part B Premiums decreased from 1.02% to 0.00%.

2018 None

LIFE INSURANCE PLAN CLIP)

Chanees of Benefit Terms 2020 None 2019 None 2018 None

Changes of Assumptions 2020 The municipal bond index rate decreased from 3.89% to 3.50%. 2019 The municipal bond index rate increased from 3.56% to 3.89%. 2018 None

67


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

PENSION FUND

Last IO Fiscal Years *

2020 2019 2018 2017

District's proportion of the net pension liability 0.639446% 0.651517% 0.637435% 0.643869%

District's proportionate share of the net pension liability $ 44,972,522 $ 39,679,371 $ 37,311,030 $ 31,701,652

District's covered payroll $ 16,230,111 $ 16,229,838 $ 15,605,728 $ 15,449,693

District's proportionate share of the net pension liability as a percentage of its covered payroll 277.09% 244.48% 239.09% 205 .19%

Plan fiduciary net position as a percentage of the total pension liability 50.45% 53.54% 55.30% 55.50%

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

(18

2016 2015

0.646961% 0.65 1196%

$ 27,816,268 $ 21,127,000

$ 15,032,371 $ 14,894,473

185.04% 141.84%

59.97% 66.80%

Contractually required contributions

Contributions in relation to the contractually required contributions

Contribution deficiency (excess)

District's covered payroll

Contributions as a percentage of covered payroll


SCHEDULE OF CONTRIBUTIONS COUNTY EMPLOYEES RETIREMENT SYSTEM

PENSION FUND


2020 2019 2018

$ 3,167,368 $ 2,632,524 $ 2,350,081

(3,167,368) (2,632,524) (2,350,081)

$ $ $

$ 16,411,233 $ 16,230,111 $ 16,229,838

19.30% 16.22% 14.48%


69

2017 2016 2015

$ 2,176,999 $ 1,918,883 $ 1,916,627

(2,176,999) (1,918,883) (1,916,627)

$ $ $

$ 15,605,728 $ 15,449,693 $ 15,032,371

13.95% 12.42% 12.75%

DAVIESS COUNTTY SCHOOL DISTRICT

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

INSURANCE FUND


2020 2019

District's proportion of the net OPEB liability 0.639330% 0.651496%

District's proportionate share of the net OPEB liability $ 10,753,243 $ 11,567,182


District's proportionate share of the net OPEB liability as a percentage of its covered payroll 66.25% 71.27%

Plan fiduciary net position as a percentage of the total OPEB liability 60.44% 57.62%


70

2018

0.637435%

$ 12,814,624

$ 15,605,728

82.11 %

52.4%


SCHEDULE OF CONTRIBUTIONS

COUNTY EMPLOYEES RETIREMENT SYSTEM

INSURANCE FUND

Last IO Fiscal Years *

2020

Contractually required contributions $ 781,175

Contributions in relation to the contractually required contributions (781,175)

Contribution deficiency (excess) $

District's covered payroll $ 16,411,233

Contributions as a percentage of covered payroll 4.76%


71

2019 2018

$ 853,704 $ 762,802

(853,704) (762,802)

$ $

$ 16,230,111 $ 16,229,838

5.26% 4.70%


NOTES TO REQUIRED SUPPLEMENTARY INFORMATION COUNTY EMPLOYEES RETIREMENT SYSTEM


Changes of Benefit Terms 2020 None 2019 None 2018 None 2017 None 2016 None

Changes of Assumptions 2020 Pension and OPEB:

The salary increases assumption was changed from 3.05% to 3.30% - 10.30%.

OPEB: The single discount rate changed from 5.85% to 5.68%.

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

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

2018 Pension and OPEB:

OPEB:

2017 None

2016 Pension:

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

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

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

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

The assumed investment rate of return was decreased from 7.75% to 7.50%. The assumed rate of inflation was reduced from 3.50% to 3.25%. The assumed rate of wage inflation was reduced from 1.00% to 0.75%. Payroll growth assumption was reduced from 4.50% to 4.00%. The assumed rates of Retirement, Withdrawal, and Disability were updated to more

accurately reflect experience.

72

.-\SSETS Cash and cash equivalents $

Accounts receivable: Other

Due from other funds Inventory

Tota I assets $

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND HIND B.-\L.-\i\CES

Liabilities: Accounts payable $ Due to other funds

Total liabilities

Deferred inflows of resources

Fund balances_ Restricted Assigned

Total fund balances

Total liabilities, deferred in non s of resources, and fund balances $

DAVIESS COllNTY SCHOOL DISTRICT

COMBINING BALANCE SHEET

NON MAJOR GOVERNMENTAL FUNDS

June 30, 2020

Special Revenue Capital Projects

District Activity

Fund

190,076

190.076

190,076

190.076

190.076

School Activity

Fund

$ 2,082,709 $

340

32,565

$ 2.115,614 $

$ 12,500 $

12.500

2.103.114

2.103.114

$ 2,115.614 $

Sec; No1u to Financi:t\ S1:ucme.n1s 73

SEEK Capital FSPK Outlay Build ing Fund Fund

$ 431,918

$ 431.918

$

-131,918

431,918

$ 431,918

Total Debt Nonmajor

Service Governmental Fund Funds

$ $ 2.704,703

340

32,565

$ 'I, 2.737.608

$ 'I, 12.500

12.500

2.725,108

2.725.108

$ $ 2.737,608


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

Re,·enues:

Property taxes s Earnings on in, estments Other local re, enue

State aid

Federal aid

Total re,·enues

Expenditures: Instruction

Support services:

Student Instructional staff

District administration School administration

Business Plant operation and maintenance

Student transportation Community sen·ices

New building construction

Building reno\'ations / additions Debt service:

Principal Interest

Bond issuance costs

Total expenditures

Excess (deficiency) of re1·enues

over expenditures

Other financing sources (uses):

Operating transfers in Operating transfers out

Total other financing sources (uses)

Net change in fund balances

Fund balances. June 30. 2019, restated

Fund balances. June 30, 2020 s

NONMAJOR GOVERNMENTAL FUNDS

Year Ended June 30. 2020

Seecial Re, enue Caeital Projects

District

Acti\'ity

Fund

s

4.J.979

4.J,979

155.-174

58.500

213.974

( 168.995 )

163,659

163,659

(5,336)

195,412

190,076 s

School

Acthity

Fund

s 33.957

3.486.852

3.520,809

3.I.J3,4.J3

30.685 28.10 I

405

18.450

3.221 ,084

299,725

(163 ,659)

(163,659)

136,066

1,967,0.J8

2, 103.114 s

s~o,: N,11..:~ to Fuun.:1JI StJt~in,mt~ ,,

SEEK

Capital FSPK Outlay Building

Fund Fund

s 9, 18.J ,996

5,000

1.016.734 2,650,759

1.016.734 11 ,840.755

).500

750

.J .2 50

1.016.73.J 11.836,505

(1.016,734) (I I ,8.J.J,625)

(1.016.734) (I l,8.J.J,625)

(8,120)

4.J0,038

s 431 ,918

Debt

Sen ice

Fund

s

124,832

12.J,832

5,7-13,000

2.1 15,335

7,858.335

(7,7)),50))

7.733.503

7.733,503

s

Total

Nonmajor

Go,·emmental

Funds

s 9. 184,996

38,957 3,531,831 3,792,325

16.5-18, 109

3.298,917

30.685 86,601

405

18.450

3.500

;.7-13,000

2.116,085

11 ,297,643

5.250,466

7,897,162 (13,025,018)

(5,127,856)

122,610

2,602,498

$ 2,725 ,108

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


COMBINING SCHEDULE OF RECEIPTS, DISBURSEMENTS, ACCRUALS, AND FUND BALANCE

SCHOOL ACTIVITY FUND


Cash Cash Accounts June 30, 2019 Receipts Disbursements June 30, 2020 Receivable Inventory

$ 484,397 $ 771,819 $ 811,157 $ 445,059 $ 110 $ 28,148 46,596 95,154 98,270 43,480 88,215 78,510 57,084 109,641

I 05,395 215,678 176,740 144,333 167,368 209,923 196,060 181,231 284 36,305 82,125 68,718 49,712

471,786 1,263,250 1,182,778 552,258 230 4,076 69,726 178,651 159,676 88,701 86,952 58,589 55,735 89,806 42,998 89,012 78,246 53,764 15,045 6,071 6,189 14,927 72,664 85,241 88,305 69,600 31,560 58,816 75,999 14,377 37,871 80,202 69,882 48,191 36,383 58,468 59,006 35,845 79,788 78,735 89,315 69,208 55,818 63,531 55,419 63,930 18 24,141 47,648 63,143 8,646 39

$ 1,953,008 $ 3,521,423 $ 3,391,722 $ 2,082,709 $ 340 $ 32,565

75

Accounts Fund Balance Payable June 30, 2020

$ $ 473,317 43,480

109,641 144,333 181,515 49,712

12,500 544,064 88,701 89,806 53,764 14,927 69,600 14,377 48,191 35,845 69,208 63,948

8,685

$ 12,500 $ 2,103,114

Cash June 30. 2019

GENERAL FUND $ 48,809 $

OFFICE 9.208 DC'PS FOUNDATION GRANTS

AP EXAMS 5.492 PSATTESTS 81

BAND UNIFORMS 106

GRADUATION

PROM 5,258

COMPUTER FUNORAISER

GUIDANCE 3.732 INTRAMURAL 332 INTEREST

LOCKS 5 OVER YOUR IIEAD 555 PROJECT GRADUATION RENAISSANCE

CHALLENGER 4,586

STUDENT REIMBURSEMENT 3.10? ENL EAGLES NEST NEWS 3.189 YEARBOOK 19,822 STUDENT ASSISTANCE 3,196 TEACHER OF THE YEAR AWARD 21

YOUNG FOUNDATION SI.G STUDENT VENDING ADULT VENDING 885 ATHLETIC' DIRECTOR AA APOLLO ABA BASKETBALL

BOYS BASKETBALL l .745 ATHLETIC BOOSTER 2,000

ATHLETIC' AWARDS 4.530 ATHLETIC BUDGET ATHLETIC' TRAINER SUPPLIES 391

ATHLETIC' WEIGHT TRAINING BASEBALL 720

ATHLETIC' SECURITY BOYSCROSSC'OUNTRY 802

GIRLS CROSS COUNTRY 895

CHEERLEADERS 474

ATllLETIC EMERGENCY SERVICE 49

EAGLETTES l.?73

BASS FISHING FOOTBALL 4.470 ATHLETIC' GAME OFFIC'IALS 6.424 GENERAL ATHLETICS 49,281

GIRLS BASKETBALL 263

GIRLS GOLF BOYS GOLF

GATE

ATIILETIC GATE.WORKERS 780

GIRLS TRACK

SOCCER FIELD SOUND SYSTEM 460

DAVIESS COUNTY SCIIOOL DISTKICT

SCHEDULE OF RECEIPTS. DISBURSEMENTS. ACCRUALS. AND FUND BALANCE

APOLLO HIGH SCHOOL

Y c.tr Ended June 10, 2020

C'.1sh Accllunls

Receipts D1sbursemi:nts Transfers June 30. 2020 Rccc1vablc

393 $ 10.294 $ IOJl8 s 6'lJ,226 $

593 3,783 10.649 16,667

15.887 12,625 8.754

833 748 168 106

780 7,741 6.%1

2.404 2.854

120 120 158 J9:! ( 16) 3,682

'32 7,936 17.936)

5 137 522 12 382

700 700

2.250 2,250 591 5.179

32.343 30.676 (1.214) 3.562

228 2,558 859

10,244 15.848 203 14.421

2,408 2,779 2,825 1.000 ( 1.021)

1.000 1.000

802 %3 16 1 1,112 1.162 (1')4) 641

7.644 3.470 (4.174) 5.)8) 3.436

44,406 29,876 ( )5.530) ).000

109 2.500 6.?21

2.484 5.828 1,000 47

500 500 2.596 2.000 124

9.442 9.442 240 (562)

135 740 1,5(K)

1.193 719

2,126 2,077

I.J:!3 1,200 1.850

::? 75 635 500 140 5.945 1.475

50 20.622 30.000 15.852

3.754 20.017 116.900) 16.098

457 1,196 1.100 424

1,215 1.215 1.015 1.()65 so

63.761 5,734 (58.027)

3.910 6,000 2,870

1.084 1,084

460

7(,

lnvcnto1y

s $

AccouUls

Payable

$

rund Ralancc June 30. 2020

49.226 16.(,67

8.754 168

106

2.854

120 ;1,682

33:!

5 4,208

700

5.17'!

3.562 859

14.421

:!.825

1.000

641

3J02 6.9:!i

47

124

1.500

1.850 140

15.852

16.0'!8 424

5(1

2,870

460

Cash June 30, W19

SOFTBALL no GIRLS SOCCER 1,500

BOYS SOCCER 648

SPORTS PROGRAMS SALES AA SPORTS PROG. ADS AA SPRING SEASON TOURNEY SWIM TEAM/G&B TENNIS/B&G 1,303

DISTRICT TOURNEY GIRLS DISTRICT TOURNEY BOYS BOYS TRACK HOLIDAY TOURNAMENT ATHLETIC VENDING BOYS TRACK L/f VOLLEYBALL 12 WRESTLING 1,750 AA V SLAM DOWN TOURNEY 350 REGIONAL TOURNEY - GIRLS SEMI-STATE TOURNEY ATHLETIC UNIFORM ACCOUNT 5,678

AA REGION TOURNEY BOYS AA REGION TOURNEY GIRLS AA BORDER BOWL FB EAGLE CUP SOCCER AA CITY/COUNTY AA BOWLING AA ARCHERY ATHLETIC Cl-llLI SUPPER ART CLUB 88 SPIRIT STORE 2,677

BETA 3.333 CHESS DANCE BLUE 5,397

DRAMA 1.750 COUNCIL FOR EX CHILD 2,047 JUNIOR CIVITAN 573 FFAALUMNI 4,855 FBLA FCA 51 FUTURE ED OF AMERICA 193

FFA FCCLA FILM CLUB STRATEGIC GAMING 599 MUSICAUCHORUS/DRAMA 3.443 THESPIAN SOCIETY .199 IIABITAT A YL ACADEMY YOUNG LEADERS 653 ACADEMIC TEAM JO SPANISH CLUB 98

KEY CLUB 190

NATIONAL HONOR SOCIETY 1,584

PTSO


SCHEDULE OF RECEIPTS, DISBURSEMENTS, ACCRUALS, AND FUND BALANCE

APOLLO MIGII SCHOOL

Year Ended June 30, :!O:!O

Cash Accounts Receipts Disbursements Transfers June JO, 2020 Rccci\'ahlt

1,63 I <JOI

981 1,510 2,029 346 960 1.262

153 879 716 2,000 1.071 (929)

798 1,000 202 742 1,000 1.561

3,793 1,032 (761)

1,084 1,084

327 (327)

467 72J 26K 2.200 2.500 2,050

7,87:! 5,715 ( 1.797) 700

2,000 4.')00 R,578

594 760 166

(,461 1.461 840 509 500 831

15.576 1,710 ( 1.1 ,866)

88 10,181 8,627 (5%) .l,635

765 596 3.502

50.416 56.080 1.000 7JJ 4.347 5,805 (2) 290

80 2SI 1.876

571 603 541

500 1.777 (400) 3.178 883 1.556 673

51

l'H 33.079 10 ,197 77.1 1.655

136 463 1.039 1,528 95..J

4.962 4.056 1.305

653 1.409 1.566 167

98

190

1.584

n

Act:0unts Fund Balance: Invcn1ory Payable June JO, 2020

2,029 1.262

202 1,561

268 2,050

700

8,578

831

88 8,410 12,045

3.502

733 290

1,876 541

3.178

51 193

3.655

463 954

1.305

653 167 98

190

1.584

Cash June 30. 2019

SPANISH HONOR SOCIETY 617 STUDENT COUNCIL 6,849

STAND 301 SPIRITC'LUB KYA YOUNG REPURLIC'ANS ROBOTICS 8,118 STLP 1,200 AFJROTC ACTIVITIES 6,445 AFJROTC SC'HOLARSIIIJ> FUND 300 GS ALLIANCE 114 ARCHERY C'LUII 3 DARCHERY STRENGTH & CONDITIONING C'C'R FIELD TRIP I 00", !'BIS POSITIVE REHA VIOR 831 WKSLS AG ART 74 BAND :!.:?96 BUSINESS 2,348 CHORUS 988 C' AREER OPTIONS 483 DRIVER ED

ENGLISH 4,067 FRESHMAN TEAM SOPliOMORE TEAM JUNIOR TEAM FINE ARTS 950 SENIOR TEAM WORLD LANGUAGE 1,567 STAMP TEST-WORLD LANG. 2,595 SS CHRISTMAS PLAY 228 GREENHOUSE 10,437 CONSUMER SCIENCE 678 MATH 2,714 MMD/liEAD MMD/BULLINGTON MMD/JACKSON 636 ORCHESTRA 2,220

MMD/SIMMONS 231 IIEALTH/l'E 3,0% AFJROTC'-SCIIOOL BUDGET SCIENCE 707 SPECIAL SERVICES 222 MMD/HEAD 98 SOCIAL STUDIES 8,710 ENGINEERING 3,808 H/PE UNIFORMS 8,328 LIRRARY C'Ol'Y MACHINE 1,176

LIBRARY FINES 662 POSTER PRINTER STUDENT FEES 1,000


SCHEDULE OF RECEIPTS, DISRURSEMENTS, ACCRUALS, AND FUND BALANCE

APOLLO IIIGH SCHOOL

Year Endc.:d June JO. ::w20

Cash Accoun1s Reccipls Disburscmcnls Transfers June 10, 2020 Rccc1vablc

(300) 917

6,690 2.545 (1,940) 9,054

301 416 3,011 2,615

18,871> 19,621 747

4,496 7,251 5,383 170 680 :!85 975

13,119 14,588 (31) 4,945

330 JO 114

8.546 6,684 (75) 1,787

1,735 1,958 608

5,292 5,496 204 3,512 3,538 100

12,046 17,932 3.590 (30) 1,340 3,718

3,221 5.026 1,370 553 199 682

1,149 1,096 4.014 1,695 1,695 2.987 2.987 2.tr!. 2. IT!.

2,440 2.206 517 1,70 1 170 1,110 940 137 1,026 1,347 4,025

(87) :?,682 560 456 332

10,163 5,687 14,913 678

677 1,874 3,911

720 400 316 1,541 1,110 545 \198

247 400 384 1,930 2,016 911 3,921

675 675 4,336 5,092 1,463

681 903 145 400 151 104 1,319 9,925

845 4,653 5,297 17.447 7,290 3,468

91 /113 1,900

332 994

133,242 56,360 (77,882)

7~

Accounts Fund Balance Inventory Payable June 30, 2020

917 9,054

301

5,38_1

975 4,945

114

1,787

608

204 100

1,718

553 682

4,014

1,701

4,025 2,682

332 14,911

678 3,911

316 3,198

384 3,921

675 1.461

901

353 9,925 4.653

1.1,61 0 17.078 1,900

994

lash Junc J0,:!019

LOST/DAMAGED BOOKS BOOK RENTAL ELEARNING REPAIR FINES DRIVER'S ED FEES LATHAM SCHOLARSIIIP STEWART EAGLE FAMILY SCIIO 202 COKE SCHOLARSlilP 28,626 PRUDEN SCHOLARSHIP 31,104 SATTERLY SCIIOLARSHIP 27, 155 STEFANIE M. MEMORIAL SCHO 2,119 MURPHY FAMILY SCHOLARSHIP JONATHAN GRAY voe SCHOLAR 1,500 BOYS BASKETBALL L/f 1,082 BASEBALLL/f 1,453 BOYSCCL/f 8.» GIRLSCCL/f 2.345 CHEERLEADING ur 10,635 EAGLETTES ur 13. 150 BASS FISl·IING L/f FOOTBALL UT 3,004

GIRLS BASKETBALL L/f 3.855 GIRLS GOLF ur 4,266 BOYSGOLFL/1' 164 TRACK GIRLS ur SOFTBALL LIT 8,848 GIRLS SOCCER ur 78 BOYS SOCCER LIT 3.589 SWIMTEAM BIG L/f 1,465 TENNIS RIG LIT 1,525 TRACK BOYS UT VOLLEYBALL UT 7,068 WRESTLING UT 11.169 BOWLING B/G LIT 7,244 AA ARCHERY LIT 1.248 DISTRICT ACTIVITY fUND

$ 484.397 $

DAVIESS COUNTY SCHOOL Dl~'TRICT

SCI-I EDU LE OF RECEIPTS. DISBURSEMENTS. ACCRUALS. AND FUND BALANCE

APOLLO IHGII SCHOOL

Year Ended June 30, :!020

Cash Accounls

Rcc!!1pts D1sbursc1ncn1s Tr.rnsli..·rs June 30, :!0:!0 Rccc1 vablc

3.390 3.390 1,5:!5 l.500 (25)

1,000 l.000 205 J.000 (21 l) 25,415 2.000 440 29,54-1 ).000 393 26,548

(20) 2.099 500 500

1,000 500 1.768 1.435 3.507 4,9:!2

28.01 7 24,,;:!3 Ill) 5.04 1 :U,:!9 7.293 2.831 9,435 10.950 830

48.4-16 69.243 10.162 8,880 9,285 12.745 l .135 1,135 2,089 13.572 8,479 9,162 5.016 JOO 8.301 3,646 3.806 (148) 3,958

l.566 680 (265) 785 1.250 2.538 l .288

27.387 :!5,7:!3 11 .401) 9,)))

1,624 830 872 4,953 5.364 3.178

:!:!3 l.446 1,040 1,282 4,746 J.738 2.s:n 1,250 2.7% 1,546 7,835 14,871 3,994 4,026

996 9,065 1,167 4,267 J,596 6,966 (566) 3.308

1.248 10,668 J 0.668

771,819 $ 811.157 $ $ 445 ,059 $

Accounts Fund Balance Inventory Pay,1blc June 30, 2020

205 25.4 15 29 .544 26.548

2.099

500 ~.9::!:! 5,041

830

12,745 l , )15

110 8.411 3.958

785

9,)11

872 3,178 1.28:! 2.SJJ

4.026 4,267 3.308 1,248

11 0 s 28, 148 $ $ 471.317

GENERAL FUND STUDENT ID'S OFFICE SUPPLIES NURSE OFFICE DRIVER ED FEE ACTIVITY FEES LAPTOP MISC. MAINTENANCE SUPP. STUDENT FEES/$24 TEXTBOOKS/ST ATE SHELTON-WALMART VENDING FACULTY VENDING STAFFULTY FUND YOUNG FOUND. LEADERSHIP PICTURE COMMISSION MAG/FUNDRAISER NICKEL WAR PANTHER PLACE ATHLETICS GENERAL ATIILETIC TRAINING ATI-ILETIC BOOSTERS BASEBALL BASEBALL-DISTRICT TOURN BASEBALL TOURNAMENT BKBALL REGIONAL TOURN BASKl:"TBALL-BOYS

BOYSBKBTOURNAMENT BASKETBALL-GIRLS BASKETBALL SHOOTOUT BASKETBALL CAMP BOYS BKB MIDDLE SCHOOL CC/TR INVITATIONALS DISTRICT BKBALL XC BOYS XC GIRLS TRACK GIRLS BOWLING

CHEERLEADERS

TRACK-BOYS WETZEL MEMORIAL SCHOLAR

$

Cash June 30, 2019

73,922 449

3,417 174

4,415 47,334

42 1,517

925 18

9,756 8,637

11,514 113 945 938

3,000 1,644

9,970

1,051

1,969 3,207

4,620 5,049 3,521 2,301

25,615

612

$

DAVIESS COUNTY SCHOOL DISTRICf

SCI-IEDULE OF RECEIPTS, DISBURSEMENTS, ACCRUALS, AND FUND BALANCE

Receipts

99,652 1,153

3,930 211,497

2,325

38

642 1,712 2,346 1,000 4,209

16,325

5,943 2,183

71,131

54,958 25,411

12,836

7,933

13,527 6,072 1,110 1,550

56,422 2,340 1,075

s

DAVIESS COUNTY HIGI I SCI IOOL


---

Cash Accounts Disbursements Translcrs June 30, 2020 Receivable

123,859 $ 40,603 $ 90,318 $ l ,S47 245 4,633 4,972 3,756 1,512 1,500 162 3,955 25

108,296 ( I 02,599) 602 2,590 265

405 1,500 5,510 (1,569) 45,765

199 161 42

1,180 979 92S (20) 1,689

1,059 1,305 (1,000)

312 (4,753) 8,900 13,545 (1,679) 9,738

4,371 (1,138) 11,948

2,273 (23) 41,374 (30,652) 50

4,402 3,600 136 29,438 (26,443) 2,077 10,451 6,336 22,940

19,159 4,695 8,342

13,970 4,986

1,972 3 3,207

10,040 900 9,007 7,031 900 4,990 2,943 2,400 4,088 4,622 1,905 1,134

74,100 (1,394) 6,543 3,584 2,310 1,678

500 2,615 3,190

8()


s $ $ 90,318

3,756 162

602

5,510 45,765

50 1,029 180 1,869

1,305

8,900 9,738

11,948

50 136

4,076 6,153 22,940

8,342

3,207

9,007 4,990 4,088 1, 134

6,543

1,678 3,190

Cash June 30, 2019

FOOTBALL BOOSTERS FOOTBALL 2 FOOTBALL PLAYOFF FOOTBALL LOCKER ROOM GOLF BOYS GOLF REGIONALS GOLF GIRLS 723 INTRAMURAL SPORTS 456 PANTI-IERETTES 4,350 SOCCER BOYS SUB SECTIONAL SOCCER TOURNAMENT SOCCER REGIONALS SOCCER BOYS 2,324 SOCCER TOURN GIRLS SOCCER GIRLS 1,219 SOCCER DISTRICT TOURN SOFTBALL 9,802 SOFfBALL TOURNEY BASEBALL FLORIDA SOCCER SIGNS-BOYS 1,506 STATE TOURNAMENT EXP. TEAM LAUREN/CANCER AWARE 5,559 SWIMMING 4,902 SOFTBALL DISTRICT TOURN TENNIS BOYS 3,689 TENNIS GIRLS 1,829 VOLLEYBALL 2,302 VOLLEYBALL TOURNAMENT SWIM-REGIONALS WRESTLING 385 WRESTLING TOURN. CROSS COUNTRY REGIONALS MICHAEL CABLE FUND 1,752 VOLLEYBALL DISTRICT ANIMECLUB 106 FINE ART SOCIETY 241 ARCHERY CLUB 5,615 BETA CLUB 2,722 CHESS CLUB 442

ROBOTICS 3,051

THESPIAN SOCIETY 1,526

FBLA 2


SCI I EDU LE OF RECEIPTS, DISBURSEMENTS. ACCRUALS. AND FUND BALANCE

DAVIESS COUNTY I IIGII SCHOOL


Cash Accounts Receipts Disbursements Transfers June 30, 2020 Receivable

10,309 3,454 (6,855) 39,856 57.328 17,470

6,750 95 5,845 12,500 10,420 11 ,247 1,052 225 2,850 3,073 ~~· --~

100 2,545 1,750 28

456 33,983 36,957 1,020 2.396

4,341 3,369 (972) 960 3,633 4,504 4,155

54,828 59,095 3,855 807 3,799 2,745 (1,054) 7,008 7,540 2,650 11,920

1,720 2,458 (768) 1,260 9,076 8,000 184

1,000 4.559 260 1,373 1,950 5,739

1,000 4,689 410 1,232 800 1,807

9,895 11,344 1,687 2,540

3,664 5,944 2,280 8,947 12,147 3,283 468

1.752

33 106 33 259 28 (250) 222

7,242 8,494 (6) 4,357 1,365 627 26 3,486 2,671 1,059 2,054

889 2,162

2,716 2.657 60 1,645

806 710 32 130

81


12,500

225

28 456

2,396

4,155

807

11,920

184 4,559 5,739

4,689 1,807 2,540

468

1,752

33 222

4,357 3,486 2,054

2,162

1,645

130


SCI-I EDU LE OF RECEIPTS, DISBURSEMENTS, ACCRUALS, AND FUND BALANCE

DAVIESS COUNTY HIGH SCHOOL

Y car Ended June 30, 2020

---

Cash Cash Accounts Accounts Fund Balance June 30, 2019 Receipts Disbursements Transfers June 30, 2020 Receivable Inventory Payable June 30, 2020

FCCLA 2,284 4,555 2.488 (182) 4,169 4,169

FFA 13,886 45,485 41,930 (1,868) 15,573 15,573

FRENCI I CLUB 94 94 94

CEC 2,111 776 1, 193 1,694 1,694

FUTURE EDUCATORS 7 7 7

HABITAT HELPERS 864 1,043 601 1,306 1,306

KEY CLUB 1,028 891 747 1,172 1,172

JR CLASSIC AL LEAGUE 270 765 1,116 81

LIFESAVERS CLUB 44 44 44

NATIONAL HONOR SOCIETY 2,881 2.198 3,613 1,000 2,466 2,466

PEP CLUB 2,185 1,866 3,099 (46) 906 906

QUIZ BOWL RECYCLE CLUB 237 237 237

SPANISH CLUB 507 130 454 183 183

SPANISH NAT HONOR SOCIETY 1,660 20 180 1,500 1,500

STUDENT COUNCIL 634 372 240 766 766

YOUNG DEMOCRATS 83 83 83

STLP 886 886 886

TEENAGE REPUBLICANS 509 509 509

YCLUB 1,758 27,655 27,905 1,508 1,508

WISE GUYS 120 120 120

AOKCLUB 236 236 236 AG MECHANICS 125 5,242 5,290 173 173

AG DEPT 152 2,388 4,990 2,754 2,754

BUSINESS EDUCATION DEPT 1,438 1,366 1,040 1,112 1,112

MULTIMEDIA PUBLISHING 2,094 258 (150) 1,686 1,686

VISUAL FINE ARTS 883 8,789 10,867 2,961 2,961

GUIDANCE 2,945 32.527 30,017 (2) 5,453 5,453

HEALTl-1/P.E. 6,484 I 0,558 1,425 (6,934) 8,683 8,683

FFL & WEIGHT ROOMS 408 646 1,054 1,054

HORTICULTURE 3,830 5,578 3,672 5,736 5,736

FAMILY & CONSUMER SCI 125 480 2,970 2,664 299 299

LIBERAL ARTS ENGLISH 12 81 (35) 27 155 155

LIBRARY 576 269 845 845

LIBRARY LOWES GRANT SCIENCE DEPT 1,729 3,41 I 5,947 4,265 4,265

MATH DEPT 1,383 375 (19) 1,739 1,739

KIRKPATRICK MSD I 10 9 272 373 373 GILBREATH GRANT 563 24 315 (272)

JRROTC UNIT SUPPORT MAINT 1,265 1,201 64 64

JRROTC BOOSTERS 4,513 13,645 8,373 7T2 10,557 10,557

ALLEN MMD 43 206 211 38 38

SPECIAL ED 42 42 42

Cash June 30, 2019

ACADEMIC TEAM BAND BOOSTERS 215 BAND WINTERGUARD BIG RED MACHINE 879

INDOOR WINDS-DCPS 6,460

INDOOR PERCUSSION DRAMA/SPEECH 1,928

DRAMA MUSICAL 2,352

GRAD/SR. ACTIVITIES 1,843 CHAMBER CHOIR 827 ORCHESTRA 635 PROM 15,865 CATW 37 RENAISSANCE REWARDS 2,035

FCS BUSINESS 1,290

T-SHIRTS/DC PRINTING 3,299

PERFORM ARTS TRIP YEARBOOK-ECHOES 5,429 FULKERSON SCHOLARSlllP 500 ROBIN SWEENEY SCHOLARSHIP 5,273 JOYCE ASKINS MEM. SCHOLAR 3,750 CONTINGENCY FUND 74,010

PETTY CASH 100 ATHLETIC CASH BOXES 3,000 DISTRICT ACTIVITY FUNDS

$ 471,786 $

DAVIESS COUNTY SCIIOOL DISTRICT

SCI !EDU LE OF RECEIPTS, DISBURSEMENTS, AC'C'RUALS, AND FUND BALANCE

DAVIESS COUNTY lllGII SCHOOL

Y car Ended June 30, 2020

Cash Accounts Receipts Disbursements Transfers June 30, 2020 Receivable

1,044 1,152 863 755 109,541 83,349 (18,564) 7,843

7,290 3,966 (3,324) (879)

24,322 24,456 2,689 9,015

15, 119 13,346 (1,773)

10,663 8,619 (1,118) 2,854

15,871 8,861 1,956 11,318 210 7,621 10,000 4,432

13,610 13,969 1,448 1,916 977 2,209 1,360 763 790 15,776 879

11,100 10,394 1,320 2,063 1,277 1,500 2,258

96 299 (530) 557 9,025 29,575 20,047 2,796

22.036 7,484 879 20,860

500 500 500 5,273

500 3,250 74,010

100 100 100

3.000 3,000 3,000 45,329 48,330 3,001

1,263,250 $ 1,182,778 s $ 552,258 $

Accounts Fund Balance Inventory Payable June.: 30, 2020

755 7,843

9,015

2,854 11,318 4,432 1,916

763 879

2,063 2,258

557 2,796

20,860 500

5,273 3,250

74,010 100

3,000

230 $ 4,076 $ 12,500 $ 544,064


SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS

Year End June 30, 2020

Pass-Through

CFDA Entity Identifying Fund Project Federal Expenditures

Grantor I Program Titk 1':umba i\'umber Number Number Exeenditures 10 Subr~siRi~at,

!.! S Q~Rartment of Agriculture

Passed through Kentuck-y Department of Agriculture:

Food Donation IO.S50 057502-15 SI NA s 472.894 s

Passed through Kentucky Department of Educatiow

Child and Adult Care Food Program 10.558 7790021-17 51 NA Child and Adult Care Food Program 10 558 7800016-17 51 NA 14,375

14,375

Child 1'utrition Cluster: School Breakfast Program 10.553 7760005- 15 51 NA 1.224,297

:-Sational School Lunch Program I 0.555 7750002-15 51 NA 2.391.246

Summer Food Serv ice Program for Children 10 559 77400~3-15 51 20913 1,317,677

4,933,220

Total U.S. Department of Agriculture s 5.420,489 s

!.! s Qc;partment of Dl!fense Direct Program:

ROTC 11.000 504F 504F s 118,732 s

Total U. S Department of Oefonsc s 128,732 s

l.i s Cl~Rartment of EducaliQn Passed through Kentucky Department of Education:

Title I Grants to Local Educational Agencies:

Title I - Local Educational Agencies 84.0IOA 3100002, 18 l !rlEtEM ENIEP $ 338,558 s Title I - Local Educational Agencies 84.0IOA 3100002-19 _\ IOF F~l FN FP 1.494,913

Title I - Part D. Subpart 2 84.0IOA 3100102-18 314E 498

Title I - Part D. Subpart 2 84 .0IOA 3100102-19 314F 60,697

1,894,666

Migrant Education. State Grant Program 84.01 IA 3110002-18 31 IE 54,681

Migrant Education. State Grant Program 84 .01 IA 3110002-19 2 31 IF 88.729 19,577

143.410 19,577

Special Education Cluster:

Special Education - Grants to States :

IDEA. Part B 84.017A 3810001-18 337E EP 787,700

IDEA. Part B 84.017A 3810001-19 337F1FP 1.116.198 1,903,898

Special Education - Preschool Grants:

IDEA Preschool 84.173A 3800002-18 343E/EP 3,554

IDEA Preschool 84 .173A 3800002-19 343F•FP 81,190

85,744

1.989.642

Career and Technical Education - Basic Grants lo States:

Perkins - Part C (Carry-over) 84.048 3710002-18 348EA

Perkins - Pan C 84.048 3710002-18 2 34SF 77,964

77.964

English Language Acquisition Grants:

Title Ill Limited English Proficiency 84.365A 3300002-17 3450 44,859

Title Ill Immigrant 84.365A 3300002-17 34501 10,695

Title Ill Limited English Proficiency 84.365A 3300002-18 345E 12,034

Title Ill Immigrant 84.365A 3300002-19 345F

67,588

Improving Teacher Quality State Grants:

Titkll 84.367A 3230002-18 401E/EP 254.381

Titkll 84.367A 3230002-19 401F1FP 95.042

349.423

DA \'IESS COUNTY SCHOOL DISTRICT

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS, CONTINUED


Grantor I Program Title

U. S. Depanment of Education Continued Passed through Kentucky Depanment of Education. Continued:

Student Suppon and Academic Enrichment Grant: Title IV. Pan A

CARES Act (COVID-19) :

CFDA Number

84.424A 84.424A 84.424A

Elementary and Secondary School Emergency Relief Fund S4.425D Go\'emor's Emergency Education Relief Fund 84 .425C

Passed through Kentuc,,' Depanment of Ju\'enile Justice: Title I Pan D Subpan I

Passed through Green River Regional Education Cooperative: Project Pr.- ent

Total U. S. Depanment of Education

U.S. Depanment of Health and lluman Seiviccs Passed through Kentucl.-y Cabinet for Health and Family Services·

Child Care and Development Block Grant Child Care and De,elopment Block Grant (COVID-19)

Passed through Kentucky Depanment of Education· Promoting Adolescent Health Through School-Based

Suneillance (COVID- 19)

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

Total U. S. Depanment of Health and Human Services

U. S. Depanm.:nt of Homeland Security

Passed through Kentucky, Division of Emergency Manag:emt!nt: Disaster Relief Fund (COVID-19)

84.013 84.013

84.184M

93 .575 93 .575

93 .079

93.566

93 566

97.036

Pass-Through Entity ldentif)'ing

~umber

3420002 - 17 3420002- 18 3420002- 19

4000002-20 CARE-20

313E 313F

658FC

493F

420E 420F

677FC

Fund Number

2

52

2

Project l'\umbc-r

552DIDA/DP

613FIFP 633F FP

313E 3 13F

534FM

NA 658FC

49 3F

420E 420F

677FC

s

s

s

s

Federal Expenditures

1.375 82,764

109.913 194,052

164,888 249.729 414.617

382

22.41 6 22 .798

6.057

5.160.217

32 .605 166.595 199.200

600

600

17.894

17.894

217.694

4.349 ------

s

s

s

s

Expenditures to Subn:cipients

29 .577

- ------Total U. S. Depanment of Homeland Security

Total Federal Awards

S =~===4,:34,..9=

s ==I0=.9=3='1 ... 4s_1_

s=====

S ==- "'29;.; ... 57,..7=

Notes to Schedule of Expenditures of Federal Awards

Note A:

Note 8 :

NoteC:

Note D:

Basis of Presentation

The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award act ivity of the Daviess County School District (District) under programs of the federal government for the year ended June 30, 2020. The infonnation in this Schedule is presented in accordance with the requirements of Title 2 U.S. Cod, oj Federal Regulations Pan 200, Uniform Administrati1·e Requireme111s, Cast Principles. and Audit Requireme111s /or Federal .foards (Unifonn Guidance). Because the Schedule presents only a selected ponion of the operations of the District, it is not intended to, and does not , present the financial position. changes in net assets or cash flows of the District.

Summary of Significant Accounting Policies

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

Indirect Cost Rate

The District has elected not to use the I 0% de minimus indirect cost rate as allowed under the Unifonn Guidance.

Norunonetary assistance for the Food Distribution Program is reponed in the Schedule at the fair value of the commodities received.

~Riney Hancock CPAs · · · · · · · · · · · · · · · · · · · · · · · · · · · · tw PSC

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

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL ST A TEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS



We have audited, in accordance with the auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund infonnation of the Daviess County School District (District) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the District's basic financial statements and have issued our report thereon dated October I, 2020.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of 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 entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

86

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

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Daviess County School District - 2

Internal Control Over Financial Reporting, Continued

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

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

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

We noted certain matters other than significant deficiencies and material weaknesses that we reported to management of the District in a separate letter dated October 1, 2020.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit perfonned in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Owensboro, Kentucky October 1, 2020

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(Rr)Riney Hancock CPAs · · · · · · · · · · · · · · · · · · · · · · · · · · · · tw PSC

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

CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE



Report on Compliance for Each Major Federal Program

We have audited Daviess County School District's (District) compliance with the types of compliance requirements described in the 0MB Compliance Supplement that could have a direct and material effect on each of the District's major federal programs for the year ended June 30, 2020. The District's major federal programs a~e identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management's Responsibility

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

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of the District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the District's compliance.

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www.riney h anc o ck.c o m - inf o @ ri n eyha n cock.c o m . .. . .... .

2900 Veach Road, Sui te 2 - Owensboro, Kentucky 42303 - 270-926-4540 - Fax: 270-926-1494 313 Southeast First Street - Evansville, Indiana 47713 - 812-423-0300 - Fax: 812-423-6282

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Daviess County School District - 2

Opinion on Each Major Federal Program

In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020.

Report on Internal Control Over Compliance

Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District's internal control over compliance with the types ofrequirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Owensboro, Kentucky October 1, 2020

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SCHEDULE OF FINDINGS AND QUESTIONED COSTS


A. Summary of Auditor's Results

1. The auditor's report expresses an unmodified opm1on on whether the financial statements of the Daviess County School District (District) were prepared in accordance with GAAP.

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

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

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

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

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

7. The programs tested as major programs were:

Special Education Cluster:

84.027 - IDEA, Part B 84.173 - IDEA Preschool

84.010 - Title I Grants to Local Educational Agencies

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

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

B. Findings - Financial Statements Audit

None

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

None

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Daviess County Public Schools

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS


No audit findings were reported in the schedule of findings and questioned costs for the year ended June 30, 2019.

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Superintendent - J. Matthew Robbins Daviess County Board of Education

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

www.dcps .org phone: 270-852-7000 fax: 270-852-7030 contact@. dcps.org

DAVIESS COUNTY SCHOOL DISTRICT - education.ky.gov

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