REPORT ON SOUDERTON AREA SCHOOL DISTRICT …€¦ · · 2017-12-15Expenditures, and Changes in...

REPORT ON SOUDERTON AREA SCHOOL DISTRICT

SINGLE AUDIT REPORT FISCAL YEAR ENDED JUNE 30, 2009

SOUDERTON AREA SCHOOL DISTRICT

Single Audit Report

For the Fiscal Year Ended June 30, 2009

TABLE OF CONTENTS

PAGE (S)

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Introductory Section Transmittal Letter ........................................................................................................................... 1

Letter to Management ............................................................................................................... 2 - 8

Report Distribution List ................................................................................................................... 9

Financial Section Independent Auditor's Report................................................................................................ 10 - 11

Management's Discussion and Analysis ............................................................................... 12 - 21

Basic Financial Statements District-wide Financial Statements:

Statement of Net Assets ................................................................................................. 22

Statement of Activities..................................................................................................... 23

Fund Financial Statements:

Balance Sheet - Governmental Funds ........................................................................... 24

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets................................................................................... 25

Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds................................................................................ 26

Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities .........................................................................................27 - 28

Statement of Net Assets - Proprietary Funds................................................................. 29

Statements of Revenues, Expenses, and Changes in Net Assets - Proprietary Funds ......................................................................................... 30

Statements of Cash Flows - Proprietary Funds ......................................................31 - 32

Statement of Net Assets - Fiduciary Funds.................................................................... 33

Statement of Changes in Net Assets - Fiduciary Funds ................................................ 34


Single Audit Report


TABLE OF CONTENTS (continued)

PAGE (S)

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Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund ............................................................ 35

Notes to Basic Financial Statements................................................................................. 36 – 74

Required Supplemental Information

Schedule of Funding Progress .................................................................................................. 75

Supplemental Information:

Combining Balance Sheet - Non-Major Governmental Funds ...................................... 76

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Governmental Funds.................................................... 77

Combining Balance Sheet - All Capital Project Funds................................................... 78

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - All Capital Project Funds ........................................................................ 79

General Fund-Schedule on Tax Collectors’ Receipts.................................................... 80

General Fund - Statement of Revenue, Expenditures, and Changes in Fund Balance .................................................................................................81 - 84

Capital Reserve Fund - Statement of Revenues and Expenditures.............................. 85

Food Service Fund - Statement of Revenues, Expenses, and Changes in Net Assets............................................................................................... 86

Athletic Fund - Statement of Revenues and Expenditures............................................ 87

Debt Service Payment Fund– Statement of Revenues and Expenditures ................... 88

2009 Bond Fund – Statement of Revenues and Expenditures ..................................... 88

2009A Bond Fund – Statement of Revenues and Expenditures................................... 89

2009AA Bond Fund – Statement of Revenues and Expenditures ................................ 89

2005AA Construction Fund - Statement of Revenues and Expenditures ..................... 90

Construction Fund – Statement of Revenues and Expenditures .................................. 91


Single Audit Report


TABLE OF CONTENTS (continued)

PAGE (S)

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General Long-Term Debt:

Schedule on General Obligation Bonds - Series of 2005 .............................................. 92



Schedule on General Obligation Bonds – Series A of 2009.......................................... 93

Schedule on General Obligation Bonds – Series AA of 2009 ....................................... 94

Single Audit Section Schedule of Expenditures of Federal Awards .............................................................................. 95

Notes to the Schedule of Expenditures of Federal Awards .......................................................... 96

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................... 97 – 98

Independent Auditor’s Report on Compliance with Requirements Applicable to each Major Program and on Internal Control over Compliance in accordance with OMB Circular A-133 ..................................................... 99 - 100

Schedule of Findings and Questioned Costs .................................................................... 101 - 102

I N T R O D U C T O R Y S E C T I O N

Board of School Directors Dr. Charles Amuso, Superintendent

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In addition, the representation letter provided to us, by management, confirmed there were no uncorrected misstatements. Management has recorded all of our adjusting journal entries, and has agreed to the conversion entries necessary to convert governmental funds and proprietary funds to governmental activities and business-type activities, respectively.

In accordance with auditing standards, generally accepted in the United States of America, we have acquired a sufficient understanding of the District and its environment, including its internal control, to assess the risk of material misstatements of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures that were necessary to express an opinion on the 2008-09 basic financial statements.

Our consideration of the District’s internal control components was not designed for the purpose of making detailed recommendations and would not necessarily disclose all significant deficiencies within the components. Our audit procedures have been appropriately adjusted to compensate for any observed significant deficiencies. The following three paragraphs define the three different types of deficiencies that can occur:

A control deficiency 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 misstatements on a timely basis.

A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data reliably, in accordance with generally accepted accounting principles, such that there is more than a remote likelihood that a misstatement of the entity’s financial statements, that is more than inconsequential, will not be prevented or detected by the entity’s internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity’s internal control.

As the primary purpose of our audit is to form an opinion on the basic financial statements, you will appreciate that reliance must be placed on adequate methods of internal control as your principal safeguard against errors and fraud which audit procedures may not disclose. The objective of internal control over financial reporting is to provide reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use and that financial records are reliable for preparing financial statements in accordance with generally accepted accounting principles and for maintaining the accountability for assets. The concept of reasonable assurance recognizes that the cost of internal control should not exceed the related benefits; to operationalize this concept, management is required to formulate estimates and judgments of the cost/benefit ratios of alternative controls.

There are inherent limitations that should be recognized in considering the potential effectiveness of internal control over financial reporting. Errors can result from misunderstanding of instructions, mistakes of judgment, carelessness, fatigue, and other personnel factors. Control procedures whose effectiveness depends upon the segregation of duties can be circumvented by collusion or by management. What's more, any projection of internal control evaluations to future periods is subject to the risk that the procedures may become inadequate because of changes in conditions or due to the deterioration of the degree of compliance with control procedures.


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As an adjunct to our audit, we remained alert throughout for opportunities to enhance internal controls and operating efficiency. These matters were discussed with management as the audit progressed and have subsequently been reviewed in detail to formulate practical recommendations. We wish to thank your staff for their courtesies and cooperation, which facilitated the efficient performance of audit procedures. The remainder of this letter will explain any internal control deficiencies discovered during the audit, other auditor recommendations, and other information pertinent to the District.

A control deficiency is determined to be considered a material weakness or significant deficiency based upon the magnitude of the problem as it pertains to a particular opinion unit. In other words, what is considered a significant deficiency in one fund may only be a control deficiency in another fund of greater size.

The following section in this governance/management letter is separated by categories based on importance, with any material weaknesses or significant deficiencies listed in the beginning:

CONTROL DEFICIENCIES

General Fund – Tax Collections

During our review of recorded tax revenue, we discovered problems in proving to the various tax duplicates. Although we have had prior year issues associated with the recording of property tax revenues, the business office has attempted to fix these problems each year. The last phase is to correct mispostings and other errors pertaining to the timing of when taxes collected by elected tax collectors are recorded and the District utilizing more accounts than is necessary.

For example, when the elected tax collector deposits taxes collected into the district’s bank accounts, the receipts are not recorded to revenue, until they are transferred to the general fund key account. At that point, they are posted to a revenue clearing account until the tax collector submits the Act 169 monthly report showing what type of tax was collected and deposited during the previous month.

Our recommendations are two-fold. First, we recommend the business office record the deposit to the tax clearing account at the time the tax collector deposits the funds into the district’s bank account, not when the money is transferred to the key account. This recommendation will clear up timing issues that occur during the year. Second, we recommend that the district’s use of recording discounts and penalties to their own general ledger accounts for each municipality should end. This would eliminate positing errors from occurring during the year between the various account codes that exists for each municipality. Following this recommendation, the business office would only record the net amount received for each tax into one revenue account, per municipality. This recommendation will improve the audit trail making it easier to trace each deposit directly to a corresponding tax revenue account.

General Fund – Purchase Orders

During our review of testing invoices in the general fund, we discovered forty-five invoices with purchase orders attached that did not have any approval on the purchase orders. Proper controls pertaining to expenditures requires each purchase order issued to be properly approved reflecting a supervisor’s signature or initials. We recommend the business office improve their review procedures on issued purchase orders.


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Activity Clubs

During our review of the student activity clubs, we came across the following clubs that may not be considered a student club by the auditor general’s office. As such, we are recommending that this listing be investigated by management to make sure there are proper by-laws, student officers, and appropriate minutes of meetings:

High School Activity:

• AP Guidance

• All School

• Presidential Classroom

• Physical Education

• Starving Artist

• Student Parking

• Career Day

• Men’s Lacrosse Fundraiser

• Senior CD

• School Pop

• Safe Schools

• Girls Lacrosse Fundraiser

• Women’s Volleyball Fundraiser

• Men’s Cross Country Fundraiser

• Golf Fundraiser

• Arts Night Out

• Girls Track Fundraiser

• Class Gift

Indian Crest Jr. High Activity:

• Athletics - should be in the athletic fund

• 30th anniversary brick pavers sale

• Ferdock Fund

• Target/Genuardi’s

• Lost Textbooks

• Fundraisers


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• PE

• Shop

• England Trip

• Recycling

• General

• Montgomery County 9/11 Memorial Fund

Indian Valley Jr. High Activity:

• Athletics – should be in Athletic Fund

• Fundraising

• Clubs

• General

• Library

• Hawks

• Knights

• Vikings

• Monarchs

2005 AA Construction Fund

During our review of construction fund invoices, we discovered a number of mispostings that occurred between major object codes 450 and 700 series. As examples, check no. 1381 and 1443 were originally posted to object code 757 and later journalized into code 450 in the amount of $388,563.76. These checks should have been coded to object code 788 for infrastructure technology. Check nos. 1402 and 1459 were also miscoded. We would like to recommend the business office utilize the PA School Accounting Manual more closely to verify the correct posting of all construction fund expenditures.

RECOMMENDATIONS

Journal Entries

We would like to recommend all journal entries made during the year should be numbered in numeric sequence, with proper documentation and explanation attached to each entry, and maintained in a three ring binder, segregated by month. By making this improvement the audit trail will improve by tracing the entries posted in the detailed general ledger directly to the journal entry books.


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Self-balancing accounts

During this year’s audit, we discovered the district was posting across funds in the pentamation computer system. As such, the computer system developed an automatic self-balancing account that was not cleared at the end of the fiscal year. We do not recommend positing across funds, since this creates a problem in tracing the transactions that should be present in each fund. When one fund pays the expenses of another fund, there should be a corresponding interfund receivable and payable account in both funds. In addition, any support from the general fund to pay athletic fund expenditures should be done by the School Board’s approval of an interfund transfer. OTHER INFORMATION

GASB Statement No. 53 – Derivatives During the 2008 calendar year, the Governmental Accounting Standards Board issued the latest accounting principle standard for all governments to follow. GASB Statement No. 53 is associated with the proper accounting and reporting of derivative instruments. The only derivative instruments to be acquired, in the Commonwealth of Pennsylvania, by governments are derivatives pertaining to debt; i.e. interest rate swaps, forward swaptions, constant maturity basis swaps, and etc. Governments who use this type of financial instrument are now required to record the fair value of the derivative onto the government-wide financial statements reflected as an asset or liability. The recording of the net change in fair value depends on the effectiveness of the hedge. These types of financial instruments can potentially save governments money, but are as risky as adjustable rate mortgages versus fixed rate mortgages. If the District would like further clarification of this accounting standard, we will be happy to discuss it with you. The effective date for this standard is the 2009-10 fiscal year. GASB Statement No. 54 – Fund Balancing Reporting In February 2009, the Governmental Accounting Standards Board issued Statement No. 54 redefining the various components of fund balance that is used in government funds (General Fund, Capital Reserve Fund, Athletic Fund, Capital Project Fund, and Debt Service Funds). This standard goes into effect for the 2010-11 fiscal year. The new categories of fund balance are: Nonspendale Restricted Committed Assigned Unassigned The Nonspendable fund balance classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractual required to be maintained intact. The “not in spendable form” includes items not expected to be converted into cash, for example, inventories and prepaid amounts. The corpus (principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact. The Restricted fund balance classification occurs when constraints placed on the use of resources are either:

a. Externally imposed by creditors (such as debt covenants), grantors, contributors, or laws and regulations of other governments; or

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REPORT DISTRIBUTION LIST

The Souderton Area School District has distributed copies of the Single Audit Act Package to the following:

ONE COPY TO: BUREAU OF THE CENSUS (Electronically Filed) DATA PREPARATION DIVISION ONE COPY TO: COMMONWEALTH OF PENNSYLVANIA (Electronically Filed) BUREAU OF AUDITS ONE COPY TO : MONTGOMERY COUNTY INTERMEDIATE UNIT 1605 WEST MAIN STREET NORRISTOWN, PA 19403-3290

F I N A N C I A L S E C T I O N

Souderton Area School District Souderton, Pennsylvania

MANAGEMENT'S DISCUSSION AND ANALYSIS

Required Supplementary Information (RSI) (UNAUDITED)

For the Year Ended June 30, 2009

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The discussion and analysis of Souderton Area School District's financial performance provides an overall review of the District's financial activities for the fiscal year ended June 30, 2009. The intent of this discussion and analysis is to look at the District's financial performance as a whole; readers should also review the financial statements and notes to enhance their understanding of the District's financial performance.

The Management Discussion and Analysis (MD&A) is an element of the new reporting model adopted by the Governmental Accounting Standards Board (GASB) in their Statement No. 34 Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments issued June 1999. Certain comparative information between the current year and the prior year is required to be presented in the MD&A.

FINANCIAL HIGHLIGHTS

The 2008-2009 budgets for Souderton Area School District was the first prepared under the guidelines set forth in Act 1 of 2006. Due to the complexity of Act 1, the annual budget was prepared over a period of nine months. Previously the budget was developed over six months. Construction is completed on the new high school, and it opened in September 2009. The construction project significantly reduced the capital projects fund from $30.5 million the prior year to $894 thousand as the funds were used for its intended purpose to construct the new high school. The capital reserve funds also decreased by one million to $7.1 million as funds were used to support the high school construction project. Enrollment had decreased by 71 students for fiscal year 2008-09 compared to a growth of 19 students for 2007-08. The decline in interest rates will continue to erode investment earnings for the school district. The declining real estate market, financial bank crisis, and the overall weakened economy have resulted in fewer new homes in the district. This situation has led to a stagnant student enrollment population in the immediate future. Special education costs continued to increase, jumping to $12.7 million, and an increase of 8.5% over the previous year. The Board of School Directors were able to balance the revenue and expenditure budgets with no real estate tax increase and utilize $1.4 million of fund balance for 2008-09. Actual revenues exceeded the budget by more than $1.1 million. However, actual expenditures, before transfers, exceeded the budget amount by $805 thousand due to the sharp increase in interest expense on the variable rate bond issue. The original budget appropriated $821 thousand of fund balance to be used. However, the significant increase in interest expense that was incurred in the debt service of the variable rate bond caused the fund balance to decrease by $1.4 million. The fund balance of the general fund decreased from $12.4 million to $10.9 million.

USING THE ANNUAL FINANCIAL REPORT

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

The first two statements are government-wide financial statements - the Statement of Net Assets and the Statement of Activities. These provide both long-term and short-term information about the District's overall financial status.

Souderton Area School District Management’s Discussion and Analysis

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The remaining statements are fund financial statements that focus on individual parts of the District’s operations in more detail than the government-wide statements. The governmental funds statements tell how general District services were financed in the short term as well as what remains for future spending. Proprietary fund statements offer short and long-term financial information about the activities that the District operates like a business. For this District this is our Food Service Fund. Fiduciary fund statements provide information about financial relationships where the District acts solely as a trustee or agent for the benefit of others, to whom the resources in question belong.

The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data.

Figure A-1 shows how the required parts of the Financial Section are arranged and relate to one another:

Figure A-1 Required components of

Souderton Area School District's Financial Report

Management

Discussion and Analysis

Basic

Financial Statements

Required

Supplementary Information

Government-wide


Fund


Notes to the



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Figure A-2 summarizes the major features of the District's financial statements, including the portion of the District they cover and the types of information they contain. The remainder of this overview section of management discussion and analysis explains the structure and contents of each of the statements.

Figure A-2 Major Features of Souderton Area School District's Government-wide and Fund Financial Statements

Fund Statements Government-

wide Statements Governmental

Funds Proprietary

Funds

Fiduciary Funds Scope Entire District

(except fiduciary funds)

The activities of the District that are not proprietary or fiduciary, such as education, administration and community services

Activities the District operates similar to private business - Food Services

Instances in which the District is the trustee or agent to someone else's resources - Scholarship Funds

Required financial statements

Statement of net assets Statement of activities

Balance Sheet Statement of revenues, expenditures, and changes in fund balance

Statement of net assets Statement of revenues, expenses and changes in net assets Statement of cash flows

Statement of fiduciary net assets Statement of changes in fiduciary net assets

Accounting basis and measurement focus

Accrual accounting and economic resources focus

Modified accrual accounting and current financial resources focus



Type of asset/liability information

All assets and liabilities, both financial and capital, and short-term and long-term

Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets included



Type of inflow-outflow information

All revenues and expenses during year, regardless of when cash is received or paid

Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter




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OVERVIEW OF FINANCIAL STATEMENTS

Government-wide Statements

The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Assets includes all of the government's assets and liabilities. All of the current year's revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid.

The two government-wide statements report the District’s net assets and how they have changed. Net assets, the difference between the District's assets and liabilities, are one way to measure the District's financial health or position.

Over time, increases or decreases in the District's net assets are an indication of whether its financial health is improving or deteriorating, respectively.

To assess the overall health of the District, you need to consider additional factors, such as the increasing property tax base, outlook for future growth, strength of financial policies and planning, and student performance and achievement.

The government-wide financial statements of the District are divided into two categories:

• Governmental activities - All of the District's basic services are included here, such as instruction, administration and community services. Property taxes and state and federal subsidies and grants finance most of these activities.

• Business type activities -The District operates a food service operation and charges fees to staff, students and visitors to help it cover the costs of the food service operation.

Fund Financial Statements

The District's fund financial statements provide detailed information about the most significant funds - not the District as a whole. Some funds are required by state law and by bond requirements.

Governmental funds - Most of the District's activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. They are reported using an accounting method called modified accrual 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 District's operations and the services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the District's programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements.

Proprietary funds - These funds are used to account for the District activities that are similar to business operations in the private sector; or where the reporting is on determining net income, financial position, changes in financial position, and a significant portion of funding through user charges. When the District charges customers for services it provides - whether to outside customers or to other units in the District - these services are generally reported in proprietary funds. The Food Service Fund is the District's proprietary fund and is the same as the business-type activities we report in the government-wide statements, but provide more detail and additional information, such as cash flows.


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Fiduciary funds - The District is the trustee, or fiduciary, for some scholarship funds. All of the District's fiduciary activities are reported in separate Statements of Fiduciary Net Assets. We exclude these activities from the District's other financial statement because the District cannot use these assets to finance its operations.

FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE

The District's total net assets were $74,859,145 at June 30, 2009. This is a decrease in net assets of $2,808,872 from the net assets for the previous fiscal year.

Table A-1 Fiscal Year ended June 30

Net Assets (In Millions)

Govern- Business- Total Govern- Business- Totalmental Type Primary mental Type Primary

Activities Activities Government Activities Activities GovernmentCurrent assets 25.3$ 0.6$ 25.9$ 43.6$ 0.5$ 44.1$ Non-Current assets 178.9 0.8 179.7 169.5 0.9 170.4

Total Assets 204.2$ 1.4$ 205.6$ 213.1$ 1.4$ 214.5$

Current and other liabilities 10.9 0.1 11.0 12.2 0.1 12.3 Long-term liabilities 119.7 - 11.0 124.5 - 124.5

Total Liabilities 130.6 0.1 22.0 136.7 0.1 136.8

Net AssetsInvested in capital assets, net of related debt 56.8 0.8 57.6 51.2 0.9 52.1 Retirement of Long-Term Debt - - - - - - Other Restrictions 0.3 - 0.3 0.5 0.5 Capital Projects - - - - - - Unrestricted 16.4 0.5 16.9 24.7 0.4 25.1

Total Net Assets 73.5$ 1.3$ 74.8 76.4$ 1.3$ 77.7

2009 2008

Most of the District's net assets are invested in capital assets (buildings, land, and equipment). At June 30, 2009, the District had a balance of $57,587,629 for this class of assets. This is a 10% increase from the $52 million at June 30, 2008. Unrestricted net assets reflect a positive balance which consists of the effect of funds on hand to be invested in capital in future years and the District’s decision not to currently fund long-term benefits for accumulated and unused vacation, sick, other post employment benefits, and early retirement incentive payments.

The results of this year's operations as a whole are reported in the Statement of Activities. All expenses are reported in the first column. Specific charges, grants, revenues and subsidies that directly relate to specific expense categories are represented to determine the final amount of the District's activities that are supported by other general revenues. The two largest general revenues are the local real estate taxes assessed on residents and property owners and grants and entitlements not restricted to specific


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programs. The Basic Education Subsidy provided by the State of Pennsylvania is the largest example of such a grant. Table A-2 takes the information from that Statement and rearranges it slightly, so that you can see our total revenues for the year.


Changes in Net Assets (In Thousands)

Govern- Business- Total Govern- Business- Totalmental Type Primary mental Type Primary

Activities Activities Government Activities Activities GovernmentREVENUESProgram revenuesCharges for services 826$ 1,635$ 2,461$ 1,051$ 1,579$ 2,630$ Operating grants and contributions 11,748 687 12,435 12,548 638 13,186 Capital grants and contributions 1,096 - 1,096 1,056 - 1,056 General revenuesProperty taxes 64,208 - 64,208 66,084 - 66,084 Other taxes 7,443 - 7,443 6,793 - 6,793 Grants, subsidies and contributions,

unrestricted 10,126 - 10,126 7,638 - 7,638 Other 1,302 6 1,308 2,489 710 3,199

TOTAL REVENUES 96,749$ 2,328$ 99,077$ 97,659$ 2,927$ 100,586$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

EXPENSESInstruction 54,709$ -$ 54,709$ 53,453$ -$ 53,453$ Instructional student support 6,471 - 6,471 6,563 - 6,563 Administrative and financial support 7,435 - 7,435 6,917 - 6,917 Operation and maintenance of plant 8,095 - 8,095 9,267 - 9,267 Pupil transportation 7,404 - 7,404 6,852 - 6,852 Student activities 1,180 - 1,180 1,259 - 1,259 Community services 478 - 478 453 - 453 Interest on long-term debt 12,024 - 12,024 4,718 - 4,718 Unallocated depreciation expense 1,793 - 1,793 1,730 - 1,730 Food Services - 2,297 2,297 - 2,378 2,378

TOTAL EXPENSES 99,589 2,297 101,886 91,212 2,378 93,590

Increase (decrease) in net assets (2,840)$ 31$ (2,809)$ 6,447$ 549$ 6,996$

2009 2008

Total governmental activities expenses of $99,589,977 include $1,793,436 of unallocated depreciation expense. Wages and benefits comprise about two thirds of the total Governmental Activity expenses. Total Business-Type Activities (food services) expenses of $2,296,644 include the costs necessary to operate the cafeterias in all the schools. The District’s practice is to operate food service activities on a break-even basis. Menu prices are reviewed each year and changed to attain this goal. Any excess revenue at year-end is accumulated to offset future large purchases of food service/kitchen equipment. In future years, the Board of Directors may elect to transfer excess funds to the general fund in partial for indirect expenses, such as utilities and cleaning costs. The tables below present the expenses of both the Governmental Activities and the Business-type Activities of the District.


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Table A-3 shows the District's eight largest functions - instructional programs, instructional student support, administrative, operation and maintenance of plant, pupil transportation, student activities, community services, food service as well as each program's net cost (total cost less revenues generated by the activities). This table also shows the net costs offset by the other unrestricted grants, subsidies and contributions to show the remaining financial needs supported by local taxes and other miscellaneous revenues. Unrestricted grants and subsidies of $10,126,063 were available to reduce the cost of services of governmental activities to a net cost of $75,793,584. Significant unrestricted grants and subsidies include the Basic Education Subsidy which equaled $8,043,562 for 2008-09.


Governmental Activities (In Thousands)

Total Cost Net Cost Total Cost Net CostFunctions/Programs of Services of Services of Services of ServicesInstruction 54,709$ 46,104$ 53,453$ 44,086$ Instructional student support 6,471 5,843 6,563 5,965 Administrative 7,435 7,206 6,917 6,650 Operation and maintenance 8,095 7,927 9,267 9,062 Pupil transportation 7,404 5,083 6,852 4,304 Student activities 1,180 1,006 1,259 1,111 Community services 478 29 453 (12) Interest on long-term debt 12,024 10,928 4,718 3,662 Unallocated depreciation expense 1,793 1,793 1,730 1,730

Total governmental activities 99,589$ 85,919 91,212$ 76,558 Less:

Unrestricted grants, subsidies 10,126 7,638 Total needs from local

taxes and other revenues 75,793$ 68,920$

2009 2008

Table A-4 reflects the activities of the Food Service program, the only Business-type activity of the District.

Table A 4 Fiscal Year ended June 30 Business-type Activities

Total Cost Net Cost Total Cost Net CostFunctions/Programs of Services of Services of Services of ServicesFood Services 2,296,644$ 25,542$ 2,378,176$ (161,392)$ Less:

Investment earnings & other misc. 5,873 710,388 Total business-type activities 31,415$ 548,996$

2009 2008

The Statement of Revenues, Expense, and Changes in Fund Net Assets for this proprietary fund will further detail the actual results of the operations.


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THE DISTRICT FUNDS

At June 30, 2009, the District governmental funds reported a combined fund balance of $19,035,553, a decrease of $17,035,815 from the previous year. This was primarily due to the construction of the new high school and the related Capital Project’s fund balance decrease of $9,483,654. The Capital Reserve’s fund balance also declined $2,025,916, as a result of the high school project. The Capital Reserve Fund is also used for unexpected and proposed capital projects each year. In order to fund these projects without the need for additional borrowing issues, the District has established this fund and makes transfers from available fund balance of the General Fund to this fund.

The District General Fund also dropped $1,450,403 to $10,992,058, as a result of the increased interest expense related to the spike in the interest rate on the variable rate bond issue Series of 2007. This situation has been corrected by refinancing this bond with a fixed rate General Obligation Series of 2009. This decrease in the fund balance of other Non-Major Governmental Funds is also related to this refinancing. This fund balance declined by $4,075,842, primarily due to the refinancing of the variable rate bond series of 2007 and the termination of the interest rate swap attached to the bond.

General Fund Budget

During the fiscal year, the Board of School Directors (The Board) authorizes revisions to the original budget to accommodate differences from the original budget to the actual expenditures of the District. All adjustments are again confirmed at the time the annual audit is accepted, which is after the end of the fiscal year, which is not prohibited by state law. A statement showing the District's original and final budget amounts compared with amounts actually paid and received is provided in the Annual Financial Report.

Our local revenues exceeded budgetary figures due to higher than anticipated earned income tax and delinquent real estate. Earned income tax exceeded the budget by $443 thousand and delinquent real estate tax came in at $485 thousand over the budget amount. Interest income on investments came to under the budget by $315 thousand generating $684 thousand in revenues. This is a result of the drop in interest rates due to the weakened economy. State revenue was slightly more than originally budgeted, as was federal revenue.

CAPITAL ASSET AND DEBT ADMINISTRATION

CAPITAL ASSETS

At June 30, 2009, the District had $178,648,227 invested in a broad range of capital assets, including land, buildings and furniture and equipment. This amount represents a net increase (including additions, deletions and depreciation) of $8,974,848 from last year. The majority of the increase is the direct result of the construction of the new high school.

Table A-5 Governmental Activities

Fiscal Year Ended June 30 Capital assets - net of depreciation

2009 2008Land 10,879,541$ 10,879,541$ Site Improvements 1,065,382 1,235,741 Buildings 62,527,323 63,273,243 Furniture & Equipment 3,666,161 3,984,285 Construction in Progress 100,509,820 90,300,569


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The District did not have any significant additions in capital assets other than construction in progress and site improvements.

DEBT ADMINISTRATION

As of July 1, 2008, the District had total outstanding debt of $126,325,000. The District took advantage of lower interest rates last year and refinanced six bond issues to save on interest expense on outstanding debt. The Series of 2007 was refunded and replaced by the Series of 2009. Four bond issues; Series A of 2001, Series of 2002, Series A of 2003, and Series of 2004 were refunded and replaced by Series A 2009. Additionally, Series of 2003 was refunded and replaced by Series AA of 2009. The total savings to the district amounted to $677,265. During the year, the District issued no additional debt and retired and repaid $8,945,000 of principal resulting in ending outstanding debt as of June 30, 2009, of $117,380,000.

Table A-6 Outstanding Debt

2009 2008General Obligation Notes/Bonds: - Bonds, Series of 2009 AA 8,095,000$ -$ - Bond, Series of 2009 A 14,105,000 - - Bonds, Series of 2009 43,815,000 - - Bonds, Series of 2007 46,920,000 - Bonds, Series of 2006 6,380,000 7,060,000 - Bonds, Series of 2005 44,985,000 44,990,000 - Bonds, Series of 2004 - 6,860,000 - Bond, Series A of 2003 - 4,865,000 - Bonds, Series of 2003 - 8,515,000 - Bonds, Series of 2002 - 3,430,000 - Bonds, Series A of 2001 - 3,685,000

TOTAL 117,380,000$ 126,325,000$

Other obligations include accrued vacation pay and sick leave for specific employees of the District. More detailed information about our long-term liabilities is included in the notes to the financial statements.

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES

In May, 2009, Standard and Poor’s issued an underlying rating of “AA”. This rating means the district has an extremely strong capacity to meet its financial commitments. It is expected the “the district will maintain a stable financial position given a track record of conservative budgeting practices.

The financial future of the District will be impacted by employment agreements and/or contracts for the employee groups listed below. Included is the expiration date of each existing agreement.

a) Employee Group b) Members c) Agreement

Expiration Date

Act 93 Administration June 30, 2010 Souderton Area Education Assn. Professional Staff June 30, 2012 Secretaries Secretaries/Bookkeepers June 30, 2010 Teamsters Custodial/Maintenance/Grounds June 30, 2010 Building Facility Managers Building Facility Managers June 30, 2010 Support Staff Aides June 30, 2010 Cabinet Administrators Cabinet Administration June 30, 2010 Cabinet Secretaries Cabinet Secretaries June 30, 2010


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The District expects that growth will moderate in the near future given weakening economy and the overall tightening of credit markets.

The District faces several challenges in the upcoming years. The weakened economy has had a negative impact on revenues, affecting earned income tax, and transfer tax and investment income. The benefit expense that is projected to rise at alarming rates is PSERS (Public School Employees’ Retirement System). The current rate is 4.78% for 2009-10 school year. However, the PSERS rate is expected to jump to 8.40% for 2010-2011, 10.70% for 2011-2012, and 29.55% for 2012-2013. If these rates are not readjusted it will have a huge negative impact on the district of several million dollars.

Another benefit expense that is a concern to the district is health care. This expense continues to rise at a rate that outpaces inflationary levels. The district has helped to control this expense by remaining self funded.

The revenue budget for the 2009-2010 year is $2,695,993 more than the original budget for 2008-2009. This represents only a 2.8% increase in budgeted revenues primarily due to the 2% increase in local property tax. The expenditure budget for the 2009-2010 year is $4,091,226 higher than the original budget for 2008-2009. This amounts a 4.3% increase from the prior year. This increase is primarily due to the opening of the new high school. Additionally, the district had to hire additional staff to reformat the two middle schools. This change was planned with the opening of the new high school, allowing more room at the middle school level.

The comparison of original budgeted revenue and expenditure categories is as follows:

Table A-7 BUDGETED REVENUES

2009-2010 2008-2009Local 76.9% 77.6%State 21.9% 21.5%Federal/Other 1.2% 0.9%

BUDGETED EXPENDITURES

2009-2010 2008-2009Instruction 59.2% 57.3%Support Services 29.1% 29.7%Non-Instruction/Community 1.6% 1.7%Fund Transfers/Debt 10.1% 11.3%

CONTACTING THE DISTRICT FINANCIAL MANAGEMENT

Our financial report is designed to provide our citizens, taxpayers, parents, students, investors and creditors with a general overview of the District's finances and to show the Board's accountability for the money it receives. If you have questions about this report or wish to request additional financial information, please contact Robert Bruchak, Director of Business Affairs, Souderton Area School District, 760 Lower Road, Souderton, PA 18964, 215.723.6061.

B A S I C F I N A N C I A L S T A T E M E N T S

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GOVERNMENTAL BUSINESS-TYPEACTIVITIES ACTIVITIES TOTAL

ASSETSCURRENT ASSETS:

Cash and cash equivalents 17,930,033$ 355,188$ 18,285,221$ Investments 4,549,623 - 4,549,623 Receivables, net 1,802,387 - 1,802,387 Internal Balances 867 46,146 - (1)Due From Other Governments 871,385 30,678 902,063 Other Receivables 48,936 7,462 56,398 Inventories 98,118 143,417 241,535 Prepaid Expenses - - - Other Current Assets - - -

TOTAL CURRENT ASSETS 25,301,349 582,891 25,837,227 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -NON-CURRENT ASSETS:

Restricted Cash and Cash Equivalents - - - Land 10,879,541 - 10,879,541 Site Improvements (net of depreciation) 1,065,382 - 1,065,382 Building and Bldg. Improvements (net of depreciation) 62,527,323 - 62,527,323 Furniture and Equipment (net of depreciation) 2,873,124 793,037 3,666,161 Construction in Progress 100,509,820 - 100,509,820 Bond Issue Costs (net of amortization) 1,069,851 - 1,069,851

TOTAL NON-CURRENT ASSETS 178,925,041 793,037 179,718,078

TOTAL ASSETS 204,226,390$ 1,375,928$ 205,555,305$

LIABILITIESCURRENT LIABILITIES:

Internal Balances 46,146$ 867$ -$ (1)Due to other governments 25,517 - 25,517 Accounts Payable 2,564,097 256 2,564,353 Current Portion of Long-Term Obligations 5,904,063 - 5,904,063 Accrued Salaries and Benefits 1,116,817 5,916 1,122,733 Payroll Deductions and Withholdings 123,207 - 123,207 Deferred Revenue 527,397 61,391 588,788 Other Current Liabilities 669,675 - 669,675

TOTAL CURRENT LIABILITIES 10,976,919 68,430 10,998,336

NON-CURRENT LIABILITIES:Bonds and Notes Payable 117,364,595 - 117,364,595 Claims and Judgments 78,888 - 78,888 Lease Purchase Obligations - - - Long-Term Portion of Compensated Absences 1,604,722 - 1,604,722 Net OPEB Obligations 335,229 90 335,319 Other Retirement Benefits 314,300 - 314,300

TOTAL LIABILITIES 130,674,653 68,520 130,696,160

NET ASSETSInvested in capital assets, net of related debt 56,794,592 793,037 57,587,629

RESTRICTED FOR: Retirement of Long-Term Debt - - - Capital Projects - - - Other Restrictions 295,213 - 295,213 Unrestricted (deficit) 16,461,932 514,371 16,976,303

TOTAL NET ASSETS 73,551,737 1,307,408 74,859,145

TOTAL LIABILITIES AND NET ASSETS 204,226,390$ 1,375,928$ 205,555,305$

The Accompanying Notes are an integral part of these financial statements.

(1) Internal balances represent the amount owed to or from the two types of activities within the Primary Government. Since internal balances do not represent assetsor liabilities of the total Primary Government, their balances are eliminated in the "total" column (GASB Statement No. 34, para. 58).

PRIMARY GOVERNMENT

Souderton Area School DistrictStatement of Net Assets

As of June 30, 2009

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OPERATING CAPITAL

CHARGES FOR GRANTS AND GRANTS AND GOVERNMENTAL BUSINESS-TYPEFUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS ACTIVITIES ACTIVITIES TOTALGOVERNMENTAL ACTIVITIES:

Instruction 54,709,379$ 235,337$ 8,368,588$ -$ (46,105,454)$ -$ (46,105,454)$ Instructional Student Support 6,470,429 - 627,948 - (5,842,481) - (5,842,481) Admin. & Fin'l Support Services 7,435,243 - 228,800 - (7,206,443) - (7,206,443) Oper. & Maint. of Plant Svcs. 8,095,328 - 168,766 - (7,926,562) - (7,926,562) Pupil Transportation 7,404,286 2,176 2,319,011 - (5,083,099) - (5,083,099) Student activities 1,180,311 140,576 33,907 - (1,005,828) - (1,005,828) Community Services 478,027 447,872 1,350 - (28,805) - (28,805) Interest on Long-Term Debt 12,023,538 - - 1,095,999 (10,927,539) - (10,927,539) Unallocated Depreciation Expense 1,793,436 - - - (1,793,436) - (1,793,436)

TOTAL GOVERNMENTAL ACTIVITIES 99,589,977 825,961 11,748,370 1,095,999 (85,919,647) - (85,919,647)

BUSINESS-TYPE ACTIVITIES: Food Services 2,296,644 1,635,446 686,740 - - 25,542 25,542 Other Enterprise Funds - - - - - - -

TOTAL PRIMARY GOVERNMENT 101,886,621$ 2,461,407$ 12,435,110$ 1,095,999$ (85,919,647)$ 25,542$ (85,894,105)$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

GENERAL REVENUES:Property taxes. Levied for general purposes, net 64,207,870$ -$ 64,207,870$ Taxes levied for specific purposes 7,443,341 - 7,443,341 Grants, subsidies, & contributions not restricted 10,126,063 - 10,126,063 Investment Earnings 988,525 5,873 994,398 Miscellaneous Income 313,880 - 313,880 Special item - Gain (Loss) on sale of capital assets (319) - (319) Extraordinary Items - - Transfers - - -

TOTAL GENERAL REVENUES, SPECIAL ITEMS,EXTRAORDINARY ITEMS, AND TRANSFERS 83,079,360 5,873 83,085,233

CHANGE IN NET ASSETS (2,840,287) 31,415 (2,808,872)

NET ASSETS - BEGINNING 76,392,024 1,275,993 77,668,017

NET ASSETS - ENDING 73,551,737$ 1,307,408$ 74,859,145$


PROGRAM REVENUES NET (EXPENSE) REVENUEAND CHANGES IN NET ASSETS

Souderton Area School DistrictStatement of Activities


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NON-MAJOR TOTALCAPITAL CAPITAL GOVERNMENTAL GOVERNMENTAL

GENERAL RESERVE PROJECTS FUNDS FUNDSASSETS

Cash and cash equivalents 9,889,827$ 7,737,364$ 243,364$ 59,477$ 17,930,032$ Investments 3,749,748 - 799,875 - 4,549,623 Taxes Receivable, net 1,787,449 - - - 1,787,449 Due from other funds 867 - 141,475 31,230 173,572 Due from Other Governments 742,272 - - - 742,272 Other Receivables 48,936 - - - 48,936 Inventories - - - - - Prepaid Expenditures - - - - - Other Current Assets - - - - -

TOTAL ASSETS 16,219,099$ 7,737,364$ 1,184,714$ 90,707$ 25,231,884$

LIABILITIES AND FUND BALANCESLIABILITIES:

Due to Other Funds 218,851$ -$ -$ -$ 218,851$ Due to Other Governments 25,517 - - - 25,517 Accounts Payable 1,655,040 592,144 290,566 26,347 2,564,097 Current Portion of Long-Term Debt 244,063 - - - 244,063 Accrued Salaries and Benefits 1,116,817 - - 5,856 1,122,673 Payroll Deductions and Withholdings 117,351 - - - 117,351 Deferred Revenues 1,849,402 - - 54,377 1,903,779 Other Current Liabilities - - - - -

TOTAL LIABILITIES 5,227,041 592,144 290,566 86,580 6,196,331 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

FUND BALANCES:Standard Fund Balance Reserves - - - - - Reserve for Next Year Appropriations 2,216,690 - - - 2,216,690 Specific Fund Balance Reserves - - - - - Unreserved-Designated Fund Balances 4,000,000 - - - 4,000,000 Unreserved-Undesignated Fund Balances -

- General Fund 4,775,368 - - - 4,775,368 - Capital Projects Fund - - 894,148 - 894,148 - Capital Reserve Fund - 7,145,220 - - 7,145,220 - Debt Service Fund - - - 12,510 12,510 - Athletic Fund - - - (8,383) (8,383)

TOTAL FUND BALANCES 10,992,058 7,145,220 894,148 4,127 19,035,553

TOTAL LIABILITIES AND FUND BALANCES 16,219,099$ 7,737,364$ 1,184,714$ 90,707$ 25,231,884$


Souderton Area School DistrictBalance Sheet

Governmental FundsAs of June 30, 2009

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TOTAL FUND BALANCES - GOVERNMENTAL FUNDS 19,035,553$

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

Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. The cost of the assets is $221,995,604 and the accumulated depreciation is $44,140,414. 177,855,190

Additional receivables established that do not meet the availability criteria reflected in the fund financial statements. This amount represents the difference between the prior year receivables and the current year receivables established under the accrual basis of accounting. 129,113

Property taxes receivable will be collected this year, but are not available soon enough to pay for the current period's expenditures and therefore are deferred in the funds. 1,391,321

The governmental funds follow the purchase method of inventory; therefore no inventory is reflected on the balance sheet. However, the statement of net assets uses the consumption method of inventory. 98,118

Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year end consist of:

Bonds payable (121,954,744)$ Accrued interest on the bonds (669,675)

Compensated absences (1,604,722) Net OPEB Obligation (335,229)

Other Retirement Benefits (314,300) Claims and Judgments (78,888) (124,957,558)

TOTAL NET ASSETS - GOVERNMENTAL ACTIVITIES 73,551,737$


Souderton Area School DistrictReconciliation of the Governmental Funds Balance Sheet

to the Statement of Net AssetsAs of June 30, 2009

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NON-MAJOR TOTALCAPITAL CAPITAL GOVERNMENTAL GOVERNMENTAL

GENERAL RESERVE PROJECTS FUNDS FUNDSREVENUES

Local Sources 74,522,696$ 142,308$ 97,536$ 137,780$ 74,900,320$ State Sources 20,681,819 - - 31,207 20,713,026 Federal Sources 1,018,788 - - - 1,018,788

TOTAL REVENUES 96,223,303 142,308 97,536 168,987 96,632,134 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

EXPENDITURESInstruction 54,322,645 - 118,080 - 54,440,725 Support Services 28,027,791 617 21,974 768,199 28,818,581 Operation of Non-Instructional Services 578,438 - 9,656 1,097,822 1,685,916 Capital Outlay - 2,215,638 9,431,480 - 11,647,118 Debt Service 13,762,281 - - 4,092,000 17,854,281

TOTAL EXPENDITURES 96,691,155 2,216,255 9,581,190 5,958,021 114,446,621

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (467,852) (2,073,947) (9,483,654) (5,789,034) (17,814,487)

OTHER FINANCING SOURCES (USES)Proceeds from Bond Issues - - - - - Refunding Bond Proceeds - - - 66,015,000 66,015,000 Bond Premiums - - - 4,129,207 4,129,207 Proceeds from Extended Term Financing - - - - - Interfund Transfers In - 48,031 - 934,595 982,626 Sale/Compensation for Fixed Assets 75 - - - 75 Payment to bond refunding escrow agent - - - (69,365,610) (69,365,610) Bond Discounts - - - - - Refunds of Prior Year Receipts - - - - - Operating Transfers Out (982,626) - - - (982,626)

TOTAL OTHER FINANCING SOURCES (USES) (982,551) 48,031 - 1,713,192 778,672

SPECIAL/EXTRAORDINARY ITEMSSpecial Items - - - - - Extraordinary Items - - - - -

NET CHANGE IN FUND BALANCES (1,450,403) (2,025,916) (9,483,654) (4,075,842) (17,035,815)

FUND BALANCES - BEGINNING 12,442,461 9,171,136 10,377,802 4,079,969 36,071,368

FUND BALANCES - ENDING 10,992,058$ 7,145,220$ 894,148$ 4,127$ 19,035,553$


Souderton Area School DistrictStatement of Revenues, Expenditures, and Changes in Fund Balances

Governmental FundsFor the Year Ended June 30, 2009

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NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS (17,035,815)$

Amounts reported for governmental activities in the statement ofactivities 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 as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.

Depreciation expense $ 2,415,070 less - capital outlays 11,463,023 9,047,953

In the statement of activities, only the gain on the sale of the capital assets is reported, whereas in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balance by the cost of fixed assets sold. (394)

Because some property taxes will not be collected for several months after the District's fiscal year ends, they are not considered as "available" revenues in the governmental funds. Deferred revenues increased by this amount this year. (11,239)

Repayment of bond and lease principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. 5,740,000

In the statement of activities, certain operating expenses--compensated absences (vacations) and special termination benefits (early retirement) - are measured by the amounts earned during the year. In the governmental funds; however, expenditures for these items are measured by the amount of financial resources used. This amount represents the difference between the amount earned versus the amount used. (780,256) SUB-TOTAL IN CHANGES BETWEEN BASIS OF ACCOUNTING (3,039,751)


Souderton Area School DistrictReconciliation of the Governmental Funds

Statement of Revenues, Expenditures, and Changes In Fund Balancesto the Statement of Activities

-28-

SUB-TOTAL IN CHANGES BETWEEN BASIS OF ACCOUNTING (cont'd) (3,039,751)$

In the statement of activities, certain operating revenues are recognized when earned versus the revenues using the modified accrual basis of accounting in the fund statements that are recognized when the funds are available. As such, the amount shown here represents the difference between earned revenues and revenues that are earned, but not available. 129,113

Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, interest expense is recognized as the interest accrues, regardless of when it is due. This would include accumulated interest accreted on capital appreciation bonds. The additional interest accrued in the statement of activities over the amount due is shown here. 90,743

Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of assets. Refunding bond issues becomes a use of current financial resources in governmental funds, but refundings represent payments of long-term debt in the statement of net assets. This figure represents the difference between bond proceeds and refunding payments made to paying agents. (10,398)

The governmental funds use the purchase method of inventory, where all items purchased are charged to expenditures. However, the statement of activities is reflected on the consumption method of recording inventory type items; therefore, this adjustment reflects the inventory difference. (9,994)

Change in net assets of governmental activities (2,840,287)$


to the Statement of ActivitiesFor the Year Ended June 30, 2009

Souderton Area School DistrictReconciliation of the Governmental Funds

Statement of Revenues, Expenditures, and Changes In Fund Balances

-29-

FOOD NON-MAJORSERVICE FUNDS TOTAL

ASSETSCURRENT ASSETS:

Cash and cash equivalents 355,188$ -$ 355,188$ Investments - - - Due from other funds 46,146 - 46,146 Due From Other Governments 30,678 - 30,678 Other Receivables 7,462 - 7,462 Inventories 143,417 - 143,417 Prepaid expenses - - - Other Current Assets - - -

TOTAL CURRENT ASSETS 582,891 - 582,891 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

NON-CURRENT ASSETS:Building & Bldg. Improvements (net) - - - Machinery & Equipment (net) 793,037 - 793,037 Other Long-Term Receivables - - -

TOTAL NON-CURRENT ASSETS 793,037 - 793,037

TOTAL ASSETS 1,375,928$ -$ 1,375,928$

LIABILITIESCURRENT LIABILITIES:

Due to Other Funds 867$ -$ 867$ Due to Other Governments - - - Accounts Payable 256 - 256 Compensated Absences - - - Accrued Salaries and Benefits 5,916 - 5,916 Payroll Deductions and Withholdings - - - Deferred Revenue 61,391 - 61,391

TOTAL CURRENT LIABILITIES 68,430 - 68,430 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

NON-CURRENT LIABILITIES:Long-Term Portion of Compensated Absences - - - Net OPEB Obligation 90 - 90

TOTAL NON-CURRENT LIABILITIES 90 - 90 TOTAL LIABILITIES 68,520 - 68,520

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

NET ASSETSInvested in capital assets, with no related debt 793,037 - 793,037 Restricted for Legal Purposes - - - Unrestricted 514,371 - 514,371

TOTAL NET ASSETS 1,307,408 - 1,307,408 TOTAL LIABILITIES AND NET ASSETS 1,375,928$ -$ 1,375,928$



Proprietary FundsAs of June 30, 2009

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FOOD NON-MAJOR SERVICE FUNDS TOTAL

OPERATING REVENUES:Food Service Revenue 1,595,512$ -$ 1,595,512$ Charges for Services - - - Other Operating Revenues 39,934 - 39,934

TOTAL OPERATING REVENUES 1,635,446 - 1,635,446 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

OPERATING EXPENSES: Salaries 719,085 - 719,085 Employee Benefits 221,734 - 221,734 Purchased Professional and Technical Services 6,969 - 6,969 Purchased Property Service 75,761 - 75,761 Other Purchased Services 4,723 - 4,723 Supplies 1,168,302 - 1,168,302 Depreciation 76,906 - 76,906 Dues and Fees 729 - 729 Claims and Judgments - - - Other Operating Expenses 22,435 - 22,435

TOTAL OPERATING EXPENSES 2,296,644 - 2,296,644 OPERATING INCOME (LOSS) (661,198) - (661,198)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

NON-OPERATING REVENUES (EXPENSES)Earnings on investments 5,873 - 5,873 Contributions and Donations - - - Gain/Loss on Sale of Fixed Assets - - - State Sources 129,466 - 129,466 Federal Sources 557,274 - 557,274

TOTAL NON-OPERATING REVENUES (EXPENSES) 692,613 - 692,613

INCOME (LOSS) BEFORE CONTRIBUTIONS 31,415 - 31,415

Capital Contributions - - - Transfers in (out) - - -

CHANGES IN NET ASSETS 31,415 - 31,415

NET ASSETS - BEGINNING 1,275,993 - 1,275,993

NET ASSETS - ENDING 1,307,408$ -$ 1,307,408$


Souderton Area School DistrictStatement of Revenues, Expenses, and Changes in Net Assets

Proprietary FundsFor the Year Ended June 30, 2009

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CASH FLOWS FROM OPERATING ACTIVITIESCash Received from Users 1,603,752$ -$ 1,603,752$ Cash Received from Assessments made to Other Funds - - - Cash Received from Earnings on Investments - - - Cash Received from Other Operating Revenue 39,934 - 39,934 Cash Payments to Employees for Services (973,265) - (973,265) Cash Payments for Insurance Claims - - - Cash Payments to Suppliers for Goods and Services (1,165,881) - (1,165,881) Cash Payments to Other Operating Expenses (729) - (729)

NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (496,189) - (496,189) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIESLocal Sources - - - State Sources 128,775 - 128,775 Federal Sources 386,638 - 386,638 Notes and Loans Received - - - Interest Paid on Notes/Loans - - - Operating Transfers In (Out) - - -

NET CASH PROVIDED BY (USED FOR) NON-CAPITAL FINANCING ACTIVITIES 515,413 - 515,413 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESPurchase of Equipment (4,195) - (4,195) Contributions and Donations - Capital Contributions - Gain/Loss on Sale of Fixed Assets (Proceeds) - - -

NET CASH PROVIDED BY (USED FOR) CAPITAL AND RELATED FINANCING ACTIVITIES (4,195) - (4,195) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CASH FLOWS FROM INVESTING ACTIVITIESEarnings on Investments 5,873 - 5,873 Purchase of Investment Securities/Deposits to Investment Pools - - - Withdrawals from Investment Pools - - - Proceeds from Sale and Maturity of Investment Securities - - -

NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 5,873 - 5,873

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 20,902 - 20,902

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 334,286 - 334,286

CASH AND CASH EQUIVALENTS - END OF YEAR 355,188$ -$ 355,188$

Souderton Area School DistrictStatement of Cash Flows


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RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES


OPERATING INCOME (LOSS) (661,198)$ -$ (661,198) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO NET CASHPROVIDED BY (USED FOR) OPERATING ACTIVITIES

Depreciation and Net Amortization 76,906 - 76,906 Provision for Uncollectible Accounts - - - Donated Commodities Used 116,862 - 116,862

CHANGE IN ASSETS AND LIABILITIES:(Increase) Decrease in Accounts Receivable (354) - (354) (Increase) Decrease in Advances from Other Funds 8,594 - 8,594 (Increase) Decrease in Inventories (3,495) - (3,495) (Increase) Decrease in Prepaid Expenses - - - (Increase) Decrease in Other Current Assets - - - Increase (Decrease) in Accounts Payable (1,676) - (1,676) Increase (Decrease) in Accrued Salaries and Benefits (32,535) - (32,535) Increase (Decrease) in Advances to Other Funds 867 - 867 Increase (Decrease) in Net OPEB Obligation 90 - 90 Increase (Decrease) in Other Current Liabilities (250) - (250)

TOTAL ADJUSTMENTS 165,009 - 165,009

NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (496,189)$ -$ (496,189)$


Souderton Area School DistrictStatement of Cash Flows


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PENSION AND

PRIVATE OTHER EMPLOYEEPURPOSE BENEFIT AGENCY

TRUST TRUST FUNDSASSETS

Cash and cash equivalents -$ -$ 151,130$ Investments - - 135,000 Due from Other Funds - - - Other Receivables - - - Prepaid Expenses - - - Other Current Assets - - -

TOTAL ASSETS -$ -$ 286,130$

LIABILITIESAccounts Payable -$ -$ -$ Due to Other Funds - - - Due to Student Clubs - - 286,130 Other Current Liabilities - - -

TOTAL LIABILITIES - - 286,130

NET ASSETSRestricted - - - Unrestricted - - -

TOTAL NET ASSETS -$ -$ -$



Fiduciary FundsAs of June 30, 2009

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PENSION ANDOTHER EMPLOYEE

PRIVATE-PURPOSE BENEFITTRUST FUND TRUST FUNDS

ADDITIONSContributions -$ -$ Transfers from other funds - - INVESTMENT EARNINGS: Interest and Dividends - - Net increase (decrease) in fair value of investments - - Less investment expense - -

TOTAL ADDITIONS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

DEDUCTIONSTransfers to other funds - - Administrative charges - - Scholarships - -

TOTAL DEDUCTIONS - -

CHANGE IN NET ASSETS - -

NET ASSETS - BEGINNING OF YEAR - -

NET ASSETS - END OF YEAR -$ -$


Souderton Area School DistrictStatement of Changes in Net Assets

Fiduciary FundsFor the Year Ended June 30, 2009

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VARIANCE WITH FINAL BUDGET BUDGET TO ACTUAL

ACTUAL POSITIVE GAAP AMOUNTSORIGINAL FINAL (BUDGETARY BASIS) (NEGATIVE) DIFFERENCE GAAP BASIS

REVENUES Local Sources 73,809,047$ 73,809,047$ 74,522,696$ 713,649$ -$ 74,522,696$ State Sources 20,400,337 20,400,337 20,681,819 281,482 - 20,681,819 Federal Sources 855,029 855,029 1,018,788 163,759 - 1,018,788

TOTAL REVENUES 95,064,413 95,064,413 96,223,303 1,158,890 - 96,223,303 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

EXPENDITURES Regular Instruction 40,127,777 39,216,652 39,214,226 2,426 - 39,214,226 Special Programs 12,389,400 12,748,884 12,740,292 8,592 - 12,740,292 Vocational Programs 1,771,442 1,771,442 1,771,442 - - 1,771,442 Other Instructional Programs 444,071 418,071 413,595 4,476 - 413,595 Adult Education Programs 201,563 187,563 183,090 4,473 - 183,090 Community/Junior College Ed. Programs - - - - - - Pupil Personnel Services 2,894,057 2,809,057 2,799,400 9,657 - 2,799,400 Instructional Staff Services 3,121,735 2,756,041 2,743,743 12,298 - 2,743,743 Administrative Services 4,677,645 4,687,748 4,670,943 16,805 - 4,670,943 Pupil Health 811,990 793,990 790,433 3,557 - 790,433 Business Services 690,841 649,841 648,030 1,811 - 648,030 Operation & Maintenance of Plant Services 8,015,162 7,366,162 7,363,883 2,279 - 7,363,883 Student Transportation Services 6,735,918 7,403,918 7,401,220 2,698 - 7,401,220 Central Support Services 1,431,200 1,555,900 1,536,286 19,614 - 1,536,286 Other Support Services 76,327 76,327 73,853 2,474 - 73,853 Student Activities 1,151,541 113,541 100,667 12,874 - 100,667 Community Services 479,175 479,175 477,771 1,404 - 477,771 Facilities, Acquisition and Construction - - - - - - Debt Service 10,866,028 12,851,560 13,762,281 (910,721) - 13,762,281

TOTAL EXPENDITURES 95,885,872 95,885,872 96,691,155 (805,283) - 96,691,155 Excess (deficiency) of revenues over expenditures (821,459) (821,459) (467,852) 353,607 - (467,852)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -OTHER FINANCING SOURCES (USES)

Proceeds From Extended Term Financing - - - - - - Interfund Transfers In - - - - - - Sale/Compensation for Fixed Assets - - 75 75 - 75 Fund Transfers Out - - (982,626) (982,626) - (982,626) Budgetary Reserve - - - - - -

TOTAL OTHER FINANCING SOURCES (USES) - - (982,551) (982,551) - (982,551) Special Items - - - - - - Extraordinary Items - - - - - -

NET CHANGE IN FUND BALANCES (821,459) (821,459) (1,450,403) (628,944) - (1,450,403)

FUND BALANCE - JULY 1, 2008 11,161,698 11,161,698 12,442,461 1,280,763 - 12,442,461

FUND BALANCE - JUNE 30, 2009 10,340,239$ 10,340,239$ 10,992,058$ 651,819$ -$ 10,992,058$


BUDGET AMOUNTS

Souderton Area School DistrictStatement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual -

General FundFor the Year Ended June 30, 2009

Souderton Area School District Notes to Basic Financial Statements

Fiscal Year Ended June 30, 2009

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Note 1 - Description of the School District and Reporting Entity

School District

The Souderton Area School district (SASD) includes an area of 49 square miles in Upper Montgomery County. It is the largest school district in square miles, in the County. The district is situated midway between the cities of Allentown and Philadelphia. Due to its locale the district has the best of both worlds: proximity to the city, while in a semi-rural setting. Six municipalities are within the boundaries of the SASD: the two boroughs of Souderton and Telford and the four townships of Franconia, Lower Salford, Upper Salford and Salford.

Souderton Area is a growing community with farmlands becoming home sites at a steady pace. To meet the needs of this growing community, the school district closely monitors student population. Vernfield Elementary, the district’s seventh elementary school, opened in September 2003. The opening of Vernfield answered SASD’s elementary space concerns. However, at the secondary level crowded conditions have resulted in modular classroom additions at the high school, Indian Crest Junior High, and Indian Valley Middle School. Subsequent to year end, a new high school opened in September 2009.

The Souderton Area School District is a unit established, organized and empowered by the Commonwealth of Pennsylvania for the express purpose of carrying out, on the local level, the Commonwealth's obligation to public education, as established by the constitution of the Commonwealth and by the School Law Code of the same (Article II; Act 150, July 8, 1968).

As specified under the School Law Code of the Commonwealth of Pennsylvania, this and all other school districts of the state "shall be and hereby are vested as, bodies corporate, with all necessary powers to carry out the provisions of this act." (Article II, Section 211).

Board of School Directors

The public school system of the Commonwealth shall be administered by a board of school directors, to be elected or appointed, as hereinafter provided. At each election of school directors, each qualified voter shall be entitled to cast one vote for each school director to be elected.

The Souderton Area School District is governed by a board of nine School Directors who are residents of the School District and who are elected every two years, on a staggered basis, for a four-year term.

The Board of School Directors has the power and duty to establish, equip, furnish, and maintain a sufficient number of elementary, secondary, and other schools necessary to educate every person, residing in such district, between the ages of six and twenty-one years, who may attend.

In order to establish, enlarge, equip, furnish, operate, and maintain any schools herein provided, or to pay any school indebtedness which the school district is required to pay, or to pay any indebtedness that may at any time hereafter be created by the school district, the board of school directors are vested with all the necessary authority and power annually to levy and collect the necessary taxes required and granted by the legislature, in addition to the annual State appropriation, and are vested with all necessary power and authority to comply with and carry out any or all of the provisions of the Public School Code of 1949.



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Administration

The Superintendent of Schools shall be the executive officer of the Board of School Directors and, in that capacity shall administer the School District in conformity with Board policies and the School Laws of Pennsylvania. The Superintendent shall be directly responsible to, and therefore appointed by, the Board of School Directors. The Superintendent shall be responsible for the overall administration, supervision, and operation of the School District.

The Director of Business and Fiscal Affairs, recommended by the Superintendent and appointed by the Board of School Directors, shall supervise and coordinate all business aspects of the School District. In this capacity, he or she shall be responsible to insure that all work accomplished by him/her, or by persons under his/her supervision, is in the best interests of the Souderton Area School District. The Director of Business and Fiscal Affairs is directly responsible to the Superintendent.

Reporting Entity

A reporting entity is comprised of the primary government, component units, and other organizations that are included to insure that the financial statements of the School District are not misleading. The primary government consists of all funds, departments, boards, and agencies that are not legally separate from the School District. For Souderton Area School District, this includes general operations, food service, and student related activities of the School District.

Souderton Area School District is a municipal Corporation governed by an elected nine-member board. As required by generally accepted accounting principles, these financial statements are to present Souderton Area School District (the primary government) and organizations for which the primary government is financially accountable. The School District is financially accountable for an organization if the School District appoints a voting majority of the organization's governing board and (1) the School District is able to significantly influence the programs or services performed or provided by the organization; or (2) the School District is legally entitled to or can otherwise access the organization's resources; the School District is legally obligated or has otherwise assumed the responsibility to finance the deficits of, or provide financial support to, the organization; or the School District is obligated for the debt of the organization. Component units may also include organizations that are financially dependent on the School District in that the School District approved the budget, the issuance of debt, or the levying of taxes. The Souderton Area School District does not have any component units.

Joint Ventures

North Montco Tehnical Career Center

The School District is a participating member of the North Montco Technical Career Center (NMTCC) The NMTCC is run by a joint committee consisting of members from each participating district. No participating district appoints a majority of the joint committee. The board of directors of each participating district must approve the NMTCC’s annual operating budget. Each participating district pays a pro-rata share of the NMTCC’s operating costs based on the number of students attending the NMTCC for each District. The District's share of the NMTCC's operating costs for 2008-09 was $1,771,442.

On dissolution of the North Montco Technical Career Center, the net assets of NMTCC will be shared on a pro-rata basis of each participating district's current market value of taxable real property as certified by the Pennsylvania State Tax Equalization Board. However, the District does not have an equity interest in NMTCC as defined by GASB Statement No. 14, except a residual interest in the net assets upon dissolution that should not be reflected on the basic financial statements. Complete financial statements for the NMTCC can be obtained from the NMTCC's administrative office at 1265 Sumneytown Pike, Landsdale, PA 19446.



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Jointly Governed Organizations

Montgomery County Intermediate Unit

The School District is a participating member of the Montgomery County Intermediate Unit (MCIU). The MCIU is run by a joint committee consisting of members from each participating district. No participating district must approve the MCIU’s annual operating budget. The MCIU is a self-sustaining organization that provides services for fees to participating districts. As such, the District has no on-going financial interest or financial responsibility in the MCIU. The MCIU contracts with participating districts to supply special education services, computer, and acts as a conduit for certain federal programs.

Note 2 - Summary of significant accounting policies

The financial statements of the District have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting. On June 15, 1987, the GASB issued a codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units. The School District also applies Financial Accounting Standards Board (FASB) statements and interpretations issued on or before November 30, 1989, to its business-type activities and to its proprietary funds, provided they do not conflict with or contradict GASB pronouncements. The more significant of these accounting policies are described below and, where appropriate, subsequent pronouncements will be referenced.

A. Basis of Presentation

The School District's basic financial statements consist of government-wide statements, including a statement of net assets, a statement of activities, and fund financial statements which provide a more detailed level of financial information.

Government-wide Financial Statements The statement of net assets and the statement of activities display information about the School 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 School District that are governmental and those that are considered business-type activities.

The statement of net assets presents the financial condition of the governmental and business-type activities of the School District at year-end. The statement of activities presents a comparison between direct expenses and program revenues for each program or function of the School District's governmental activities and for one business-type activity of the School District. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and interest earned on grants that is required to be used to support a particular program. Revenues which are not classified as program revenues are presented as general revenues of the School District, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business activity or governmental function is self-financing or draws from the general revenues of the School District.

Fund Financial Statements During the year, the School District segregates transactions related to certain School District functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Fund financial statements are designed to present financial information of the School District at this more detailed level. The focus of governmental and enterprise fund financial



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statements is on major funds. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. The fiduciary funds are reported by type.

B. Fund Accounting

The School District uses funds to maintain its financial records during the year. A fund is defined as a fiscal and accounting entity with a self balancing set of accounts. There are three categories of funds: governmental, proprietary and fiduciary.

Governmental Funds Governmental funds are those through which most governmental functions typically are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets and liabilities is reported as fund balance. The following are the School District's major governmental funds:

General Fund

The General Fund is the general operating fund of the School District. It is used to account for all financial resources, except those required to be accounted for in another fund.

Special Revenue Funds

The District has established a Capital Reserve Fund in accordance with the PA School Laws. This fund is used to account for the proceeds of specific revenue sources as outlined by school laws that are legally restricted to expenditures for specified purposes.

Capital Reserve Fund

This fund was created in accordance with Section 1432 of the Municipal Code. As such, the PA Department of Education has decided this fund should be classified as a major fund regardless of whether or not GASB’s major fund criteria are met.

Capital Project Funds

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

The District has the following Capital Project Funds:

a) 2005 AA Construction Fund

This fund received the proceeds of $47,430,965 from the issuance of $45,000,000 in General Obligation Bonds - Series of 2005. This fund also received the proceeds of $46,642,110 from the issuance of $46,920,000 in General Obligation Bonds – Series of 2007. The District will use the proceeds towards: (1) planning, designing, acquiring, constructing, furnishing and equipping alterations, additions, renovations and improvements to (a) New High School, (b) various existing school buildings and facilities of the school district; and (2) pay the costs of issuing the bonds.

b) Construction Fund

This fund’s remaining proceeds are being used to help finish the construction of a new high school.



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Proprietary Funds Proprietary funds focus on the determination of changes in net assets, financial position and cash flows and are classified as enterprise funds.

Enterprise Funds Enterprise funds may be used to account for any activity for which a fee is charged to external users for goods or services. The School District's major enterprise fund is:

Food Service Fund - This fund accounts for the financial transactions related to the food service operations of the School District.

Fiduciary Funds Fiduciary funds reporting focuses on net assets and changes in net assets. The fiduciary fund category is split into four classifications: pension trust funds, investment trust funds, private-purpose trust funds and agency funds. Trust funds are used to account for assets held by the School District under a trust agreement for individuals, private organizations, or other governments and are therefore not available to support the School District's own programs. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations.

C. Measurement Focus

Government-wide Financial Statements The government-wide financial statements are prepared using the economic resources measurement focus. All assets and all liabilities associated with the operation of the School District are included on the statement of net assets.

Fund Financial Statements All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach differs from the manner in which the governmental activities of the government-wide financial statements are prepared. Governmental fund financial statements therefore include reconciliations with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds.

Like the government-wide statements, all enterprise funds are accounted for on a flow of economic resources measurement focus. All assets and all liabilities associated with the operation of these funds are included on the statement of net assets. The statement of revenues, expenses and changes in fund net assets presents increases (i.e., revenues) and decreases (i.e., expenses) in total net assets. The statement of cash flows provides information about how the School District finances and meets the cash flow needs of its enterprise activities.

D. 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. Government funds use the modified accrual basis of accounting. Proprietary and fiduciary funds also use the accrual basis of accounting. Differences in the accrual and the modified accrual basis of accounting arise in the recognition of revenue, the recording of deferred revenue, and in the presentation of expenses versus expenditures.



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Revenues - Exchange and Non-Exchange Transactions. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become 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.

Non-exchange transactions, in which the School District receives value without directly giving equal value in return, include property taxes, grants, entitlements and donations. 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 School District must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the School District on a reimbursement basis. On a modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized.

E. Budgetary Process

An operating budget is adopted prior to the beginning of each year for the General Fund on the modified accrual basis of accounting. The General Fund is the only fund for which a budget is legally required.

In accordance with Act 1 of 2006, the Board shall annually, but not later than the first business meeting of January, decide the budget option to be used for the following fiscal year. The Board shall approve either the Accelerated Budget Process Option or the Board Resolution Option.

Accelerated Budget Process Option

Under this option, a preliminary budget must be prepared 150 days prior to the primary election. Under this Option, the preliminary budget must be available for public inspection at least 110 days prior to the primary election. The Board shall give public notice of its intent to adopt the preliminary budget at least 10 days prior to the adoption. The adoption must occur at least 90 days prior to the primary election.

If the preliminary budget exceeds the increase authorized by the Index, an application for an exception may be filed with either a Court of Common Pleas with jurisdiction or PDE and made available for public inspection. The Board may opt to forego applying for an exception by submitting a referendum question seeking voter approval for a tax increase, in accordance with Act 1.

The final budget shall include any necessary changes from the adopted preliminary budget. Any reduction required as the result of the failure of referendum shall be clearly stated. The final budget shall be made available for public inspection at least 20 days prior to final adoption. The Board shall annually adopt the final budget by a majority vote of all members of the Board prior to June 30.

Board Resolution Option

Under the Board Resolution Option, the Board shall adopt a resolution that it will not raise the rate of any tax for the following fiscal year by more than the Index. Such resolution shall be adopted no later than 110 days prior to the primary election. At least 30 days prior to adoption of the final budget the Board shall prepare a proposed budget. The proposed budget shall be available for public inspection at least 20 days prior to adoption of the budget. The Board shall give public notice of its intent to adopt at least 10 days prior to adoption of the proposed budget. The Board shall annually adopt the final budget by a majority vote of all members of the Board by June 30.



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Legal budgetary control is maintained at the sub-function/major object level. The PA School Code allows the School Board to make budgetary transfers between major function and major object codes only within the last nine months of the fiscal year, unless there is a two-thirds majority of the Board approving the transfer. Appropriations lapse at the end of the fiscal period. Budgetary information reflected in the financial statements is presented at or below the level of budgetary control and includes the effect of approved budget amendments.

The amounts reported as the original budgeted amounts in the budgetary statements reflect the amounts in the PDE 2028 when the original appropriations were adopted. The amounts reported as the final budgeted amounts in the budgetary statements reflect the amounts after all 2008-09 budget transfers.

Encumbrances

Any encumbrances outstanding at year-end do not represent GAAP expenditures or liabilities but represent budgetary accounting controls. The General Fund Budget is maintained on the modified accrual basis of accounting, except that budgetary basis expenditures include any encumbrances issued for goods or services not received at year-end and not terminated.

The actual results of operations are presented in accordance with GAAP and the District's accounting policies do not recognize encumbrances as expenditures until the period in which the goods or services are actually received and a liability is incurred. Any encumbrances are presented as a reservation for encumbrances on the balance sheet of the General Fund. If budgetary encumbrances exist at year-end, they are included in the fund financial statements to reflect actual revenues and expenditures on a budgetary basis consistent with the District's legally adopted budget.

F. Change in Accounting Principle

During this past fiscal year, the District was required to implement the provisions of GASB Statement No. 45 on Other Post Employment Benefits. The Net OPEB Obligation and disclosures are more fully explained in Note 5.

G. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

H. Assets, Liabilities, and Net Assets

Cash and Cash Equivalents

For purposes of the Statement of Cash Flows, the Proprietary Fund type considers all highly liquid investments with a maturity of three months or less, when purchased, to be cash equivalents.

Investments

In accordance with GASB Statement 31, investments are stated at fair value, except:

a) Non-participating interest earning investment contracts are recorded at amortized cost;

b) Money market investments and participating interest earning investment contracts that mature within one year of acquisition are recorded at amortized cost; and,

c) Investments held in 2a7-like pools (Pennsylvania Local Government Investment Trust, Pennsylvania Treasurer's Invest Program), are recorded at the pool’s share price.



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Receivables and Payables

Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds". Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances".

Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

Property Tax Levy

Property taxes, which were levied during the fiscal year ended June 30, 2009, are recognized as revenue in the fund financial statements when received by the District during the fiscal year and also estimated to be received by the District within sixty (60) days after the fiscal year ended.

Property taxes that were levied during the current fiscal year, which are not estimated to be received within sixty (60) days after the fiscal year-end, are recorded as receivable and deferred revenue in the fund financial statements.

In the government-wide financial statements, all property taxes levied during the fiscal year are recognized as revenue, net of estimated uncollectible amount.

Inventories

On government-wide financial statements, inventories are to be presented at the lower of cost or market on a first-in, first-out basis, and are expensed when used. As of June 30, 2009, there was $98,118 in inventory shown on the governmental activities column of the government-wide statement of net assets and $143,417 is shown as inventory in the business-type activities column of the government-wide statement of net assets.

Inventory type items in governmental funds utilize the purchase method, that is, they are charged to expenditures when purchased. There was no physical inventory taken as of June 30, 2009; therefore, there is no offsetting reservation of fund balance in the General Fund.

Inventory type items in Proprietary Funds use the consumption method, in which items are purchased for inventory and charged to expenses when used. The only Proprietary Fund of the District is the Food Service Fund. Inventory within this fund includes donated commodities, which are valued at U.S.D.A.'s approximate costs. Inventories on hand at June 30, 2009, consist of:

Donated Commodities 100,646$

Purchased Food 15,278 Purchased Supplies 27,493

TOTAL 143,417$

Prepaid Expenses

In both the government-wide and fund financial statements, prepaid expense are recorded as assets in the specific governmental fund in which future benefits will be derived.



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Capital Assets

General capital assets are those assets not specifically related to activities reported in the proprietary funds. These assets generally result from expenditures in the governmental funds. These assets are reported in the governmental activities column of the government-wide statement of net assets, but are not reported in the fund financial statements. Capital assets utilized by the enterprise funds are reported both in the business-type activities column of the government-wide statement of net assets 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 their fair market values as of the date received. The School District maintains a capitalization threshold of four thousand ($4,000) dollars. The School District does not possess any infrastructure. Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset's life are not. Interest incurred during the construction of capital assets utilized by the enterprise funds is also capitalized.

All reported capital assets, except land, certain land improvements, and construction in progress 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:

Description

Governmental Activities

Estimated Lives

Business-Type Activities

Estimated Lives Buildings and Improvements 10 -50 years 10 - 50 years Furniture and Equipment 5 - 20 years 5 -20 years Vehicles 8 years 8 years

Compensated Absences

The School District reports compensated absences in accordance with the provisions of GASB No. 16, "Accounting for Compensated Absences". Vacation benefits are accrued as a liability as the benefits are earned if the employees' rights to receive compensation are attributable to services already rendered and it is probable that the School District will compensate the employees for the benefits through paid time off or some other means.

Sick leave benefits are accrued as a liability using the termination method. An accrual for earned sick leave is made to the extent that it is probable that benefits will result in termination payments. The liability is an estimate based on the School District's past experience of making termination payments.

The entire compensated absence liability is reported on the government-wide financial statements.

For governmental funds, the current portion of unpaid compensated absences is the amount that is normally expected to be paid using expendable available financial resources. In enterprise funds, the entire amount of compensated absences is reported as a fund liability.

Long-Term Obligations

In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities or proprietary fund type statement of net assets. Bond premiums and discounts, bond issuance costs, and deferred amounts on refundings are deferred and amortized over the life of the bonds using modification of the effective interest method. Bonds payable are reported net of the applicable bond



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premium or discount and any deferred amount on refundings. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources while discounts and premiums on debt issuances are reported as other financing uses and other financing sources, respectively. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as support service expenditures.

Reclassification

Certain amounts have been reclassified to conform to the June 30, 2009, presentation of government-wide financial statements on the accrual basis of accounting versus the governmental fund financial statements reported on the modified accrual basis of accounting.

Net Assets

Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net assets are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by a higher governmental authority or through external restrictions imposed by creditors, grantors or laws or regulations of other governments.

The School District applies restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net assets are available.

Fund Balance Reserves

The School District reserves those portions of fund equity which are legally segregated for specific future use or which do not represent available expendable resources and therefore are not available for appropriations for expenditures. Unreserved fund balance indicates that portion of fund equity which is available for appropriation in future periods.

Contributions of Capital

Contributions of capital in proprietary fund financial statements arise from outside contributions of fixed assets, or from grants or outside contributions of resources restricted to capital acquisition and construction. The proprietary funds received no capital contributions during this fiscal year.

Note 3 - Reconciliation of government-wide and fund financial statements

A. Explanation of certain differences between the governmental fund balance sheet and the government-wide statement of net assets.

The governmental fund balance sheet includes a reconciliation between "fund balance -total governmental funds" and "net assets - governmental activities" as reported in the government-wide statement of net assets. One element of that reconciliation explains that "long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds". The details of this $124,957,558 differences are:



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Bonds payable 117,380,000$ Less: Deferred charge on refunding (to be amortized as

interest expense) (759,541) Less: Deferred charge for issuance costs (to be amortized

over life of debt) (1,069,851) Less: Issuance discount (to be amortized as interest expense) (14,428) Add: Issuance premium (to be amortized as a contra to

interest expense) 6,418,564

Claims and Judgments 78,888 Accrued interest payable 669,675 Other Retirement Benefits 314,300 Net OPEB Obligation 335,229 Compensated absences 1,604,722

Net adjustment to reduce "fund balance - total governmental funds"to arrive at "net assets - governmental activities" 124,957,558$

B. Explanation of Differences between Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances and the Statement of Activities

Due to the differences in the measurement focus and basis of accounting used on the government fund statements and district-wide statements certain financial transactions are treated differently. The basic financial statements contain a full reconciliation of these items. Differences between the governmental funds statement of revenues, expenditures and changes in fund balance and the statement of activities fall into one of three broad categories. The amounts shown in the columns on the following page represent:

a) Long-term revenue differences arise because governmental funds report revenues only when they are considered "available", whereas the statement of activities reports revenues when earned. Differences in long-term expenses arise because governmental funds report on a modified accrual basis whereas the accrual basis of accounting is used on the statement of activities. The long-term expenses reported below recognize the change in vested employee benefits.

b) Capital related differences include (1) the difference between proceeds for the sale of capital assets reported on governmental fund statements and the gain or loss on the sale of assets as reported on the statement of activities, and (2) the difference between recording an expenditure for the purchase of capital items in the governmental fund statements, and capitalization and recording of depreciation expense on those items as recorded in the statement of activities.

c) Long-term debt transaction differences occur because long-term debt proceeds are recorded as revenue and both interest and principal payments are recorded as expenditures in the governmental fund statements. In the statement of activities, long-term debt proceeds are recorded as a liability; principal payments are recorded as a reduction of liabilities.



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TOTAL LONG-TERM TOTAL FORGOVERN- LONG-TERM CAPITAL DEBT STATEMENTMENTAL REVENUES/ RELATED TRANS- OFFUNDS EXPENSES ITEMS ACTIONS ACTIVITIES

REVENUES AND OTHER SOURCES LOCAL SOURCES:

Property Taxes 64,226,062$ (18,192)$ -$ -$ 64,207,870$ Taxes levied for specific purposes 7,436,387 6,954 - - 7,443,341 Interest and investment earnings 988,525 - - - 988,525 Miscellaneous 256,334 - - - 256,334 Contributions and Donations 57,546 - - - 57,546 Charges for Services 825,961 - - - 825,961 Grants, subsidies & contributions not restricted 10,126,063 - - - 10,126,063 Transfers in - - - - - Bond Premium 4,129,206 - - (4,129,206) - Proceeds from Refunding of Bonds 66,015,000 - - (66,015,000) -

INTERMEDIATE SOURCES: - Charges for Services - - - - - Operating grants and contributions - - - - -

STATE SOURCES: - Operating & Capital grants and contributions 10,616,962 129,113 - - 10,746,075

FEDERAL SOURCES: - Operating & Capital grants and contributions 2,098,294 - - - 2,098,294

SPECIAL AND EXTRAORDINARY SOURCES: - - Gain or (Loss) on disposal of assets 75 - (394) - (319)

TOTAL REVENUES 166,776,415 117,875 (394) (70,144,206) 96,749,690 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

EXPENDITURES/EXPENSESInstruction 54,440,725 247,794 20,860 - 54,709,379 Instructional Student Support 6,355,550 34,953 79,926 - 6,470,429 Admin. & Fin'l Support Services 7,697,927 383,030 43,596 (689,310) 7,435,243 Oper. & Maint. Of Plant Svcs. 8,031,442 43,309 20,577 - 8,095,328 Pupil Transportation 7,401,220 - 3,066 - 7,404,286 Student activities 1,208,144 2,275 (30,108) - 1,180,311 Community Services 477,771 - 256 - 478,027 Capital Outlay 10,979,559 - (10,979,559) - Debt Service 87,219,891 - - (75,196,353) 12,023,538 Transfers Out - - - - - Depreciation - unallocated - - 1,793,436 - 1,793,436 Impairment Loss - - - - -

TOTAL EXPENDITURES/EXPENSES 183,812,229 711,361 (9,047,950) (75,885,663) 99,589,977

NET CHANGE FOR THE YEAR (17,035,814)$ (593,486)$ 9,047,556$ 5,741,457$ (2,840,287)$

Explanation of Differences between Governmental Fund Statements and District-Wide Statements



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Note 4 - Stewardship, Compliance, and Accountability

A. Compliance with finance related legal and contractual provisions The District has no material violations of finance related legal and contractual provisions.

B. Deficit fund balance or net assets of individual funds No individual fund contains a deficit fund balance or net assets at June 30, 2009, except the Athletic Fund has a $8,383 deficit.

C. Excess of expenditures over appropriations in individual funds

No individual fund, which had a legally adopted budget, had an excess of expenditures over appropriations, except the General Fund ‘s expenditures exceeded appropriations by $1,787,909 as a result of transfers made to other funds and excess debt service payments,. In accordance with the PA Department of Education, this is not considered a violation of the PA School Code, as amended.

D. Budgetary compliance

The District's only legally adopted budget is for the General Fund. All budgetary transfers were made within the last nine months of the fiscal year. The District cancels all purchase orders open at year-end; therefore, it does not have any outstanding encumbrances at June 30, 2009. In addition, the District includes a portion of the prior year's fund balance represented by unappropriated liquid assets remaining in the fund as budgeted revenue in the succeeding year. The results of operations on a GAAP basis do not recognize the fund balance allocation as revenue as it represents prior period's excess of revenues over expenditures.

Note 5 - Detailed notes on all funds and account groups

Assets

Cash Custodial Credit Risk – Deposits

Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. The District does not have a policy for custodial credit risk. As of June 30, 2009, $7,178,721 of the District’s bank balance of $9,643,237 was exposed to custodial credit risk as follows:

Uninsured and uncollateralized -$ Collateralized with securities held by the pledging financial institution - Uninsured and collateral held by the pledging bank's trust department not in

the District's name 7,178,721 TOTAL 7,178,721$



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Reconciliation to Financial Statements

Uncollateralized Amount above 7,178,721$ Plus: Insured Amount 2,464,516 Less: Outstanding Checks (232,626) Carrying Amount - Cash Balances 9,410,611

Plus: Petty Cash 1,130 Deposit in Pooled Investments Considered Cash Equivalents 10,024,610 Deposit in Money Market Mutual Funds Considered Cash Equivalents -

Less: Certificates of Deposit considered Investments by School Code (1,000,000) TOTAL CASH PER FINANCIAL STATEMENTS 18,436,351$

Investments

Permitted investments for Pennsylvania School Districts are defined in the Public School Code of 1949 as:

1. United States Treasury Bills;

2. Short-term obligations of the United States Government or its agencies or instrumentalities;

3. Deposits in savings accounts or time deposits or share accounts of institutions insured by the F.D.I.C; and,

4. Obligations of the United States of America or any of its agencies or instrumentalities, the Commonwealth of Pennsylvania or any of its agencies or instrumentalities or any political subdivision of the Commonwealth of Pennsylvania or any of its agencies or instrumentalities.

As of June 30, 2009, the District had the following investments:

Investment Maturities Fair ValueRepurchase Agreements 2,884,748$ PLGT/PLGIT PLUS 8,236,972 PA Treasurer's Invest Program 847,715 Commerce-Treasury Bills 799,875 PSDLAF 1,939,922

TOTAL 14,709,232$

Interest Rate Risk

The District has a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.



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Credit Risk

The District has no investment policy that would limit its investment choices to certain credit ratings. As of June 30, 2009, the District's investment in PLGIT and PSDLAF was rated AAA by Standard & Poor’s. The District's investment in the PA Treasurer’s Invest Program was rated AAA by Standard & Poor’s and Moody’s. The District’s investment in the Sovereign Bank U.S. Government Money Market Participant Class was rated AAA by Standard’s and Poor’s. The District’s investment in Commerce Bank’s government securities were rated AAA by Standard & Poor’s.

Concentration of Credit Risk

The District places no limit on the amount the District may invest in any one issuer. Of the District’s investments, 5.56% is in U.S. Treasury Bills in Commerce Bank and 20.05% is in repurchase agreements with Univest Bank. Of the Governmental Activities’ investments, 5.61% is in U.S. Treasury Bills at Commerce Bank. and 19.21% is in repurchase agreements with Univest Bank. In the General Fund, 28.50% is repurchase agreements with Univest Bank. In the Capital Projects Funds’, 94.58% is invested in U.S. Treasury Bills at Commerce Bank. Reconciliation to Financial Statements

Total Investments Above 14,709,233$ Less: Deposits in Investment Pool Considered Cash Equivalents (10,024,610)

Deposits in Money Market Funds Considered Cash Equivalents - Total Investments Per Financial Statements 4,684,623$

Property Taxes

Property taxes are levied on July 1, on the assessed value listed, as of that date, for all taxable real property located in the District. Assessed values are established by the County Board of Assessments. All taxable real property was assessed at $2,732,966,837. In accordance with Act 1 of 2006, the District received $2,082,501 in property tax reduction funds for the 2008-09 fiscal year. The tax rate for the year was $2.466 per $100 of assessed valuation or 24.46 mills.

The property tax calendar is:

July 1 - Full year tax assessed for current year.

July 1 - August 31 - Discount period during which a 2% discount is allowed.

September 1 - October 31 - Face amount of tax is due

November 1 - January 15 - A 10% penalty is added to all payments.

January 15 - - All unpaid taxes become delinquent and are turned over to the County Tax Claim Bureau for Collection.

The School District, in accordance with GAAP, recognized the delinquent and unpaid taxes receivable reduced by an allowance for uncollectible taxes as determined by the administration. A portion of the net amount estimated to be collectible, which was measurable and available within 60 days, was recognized as revenue and the balance deferred in the fund financial statements.



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Receivables

Receivables, as of year end, for the government's individual major funds and non-major and fiduciary funds, in the aggregate, including the applicable allowances for uncollectible accounts, are:

CAPITAL CAPITAL FOOD NON-GENERAL RESERVE PROJECT SERVICE MAJOR FIDUCIARY

FUND FUND FUNDS FUND FUNDS FUNDS TOTALRECEIVABLES: Interest 4$ -$ -$ -$ -$ -$ 4$ Taxes 1,787,449 - - - - - 1,787,449 Accounts 48,932 - - 7,462 - - 56,394 Intergovernmental 742,272 - - 30,678 - - 772,950

GROSS RECEIVABLES 2,578,657 - - 38,140 - - 2,616,797 Less: Allowance for Uncollectibles - - - - - - -

NET RECEIVABLES 2,578,657$ -$ -$ 38,140$ -$ -$ 2,616,797$

Schedule on Receivables for major, nonmajor, and fiduciary funds

Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were:

UNAVAILABLE UNEARNEDDelinquent Property Taxes - General Fund 1,376,383$ -$ Community Education - 97,914 Camp 169,843 Old High School Sale Deposit 200,166 Summer Sport Revenue 54,378 Grants drawdowns prior to meeting

eligibility requirements - 5,096 TOTAL 1,376,383$ 527,397$

Schedule on Deferred Revenue - Unavailable and Unearned



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Capital Assets

Capital asset balances and activity for the year ending June 30, 2009, were:

BEGINNING ENDINGBALANCE INCREASES DECREASES BALANCE

GOVERNMENTAL ACTIVITIES:Capital Assets not being depreciated:

Land 10,879,541$ -$ -$ 10,879,541$ Construction in Progress 90,300,569 10,979,560 (770,309) 100,509,820

Total Capital Assets not being depreciated 101,180,110 10,979,560 (770,309) 111,389,361 Capital Assets being depreciated: -

Site Improvements 3,786,961 - - 3,786,961 Buildings and Improvements 93,186,355 901,844 - 94,088,199 Furniture and Equipment 12,383,100 351,928 (3,945) 12,731,083

TOTAL CAPITAL ASSETS BEING DEPRECIATED 109,356,416 1,253,772 (3,945) 110,606,243 Less accumulated depreciation for:

Site Improvements (2,551,220) (170,359) - (2,721,579) Buildings and Improvements (29,913,112) (1,647,764) - (31,560,876) Furniture and Equipment (9,264,563) (596,946) 3,550 (9,857,959)

TOTAL ACCUMULATED DEPRECIATION (41,728,895) (2,415,069) 3,550 (44,140,414) TOTAL CAPITAL ASSETS BEING DEPRECIATED

NET OF ACCUMULATED DEPRECIATION 67,627,521 (1,161,297) (395) 66,465,829

GOVERNMENTAL ACTIVITIES CAPITAL ASSETS,NET OF ACCUMULATED DEPRECIATION 168,807,631$ 9,818,263$ (770,704)$ 177,855,190$

BUSINESS-TYPE ACTIVITIES:Capital Assets being depreciated:

Furniture and Equipment 1,739,634$ 4,195$ -$ 1,743,829$ Less accumulated depreciation (873,886) (76,906) - (950,792)

BUSINESS-TYPE ACTIVITIES CAPITAL ASSETS,NET OF ACCUMULATED DEPRECIATION 865,748$ (72,711)$ -$ 793,037$

CAPITAL ASSET BALANCES AND CURRENT YEAR ACTIVITY



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* DEPRECIATION EXPENSE WAS CHARGED TO GOVERNMENTAL FUNCTIONS AS FOLLOWS:

Regular Instruction 234,050$ Special Instruction 2,509 Vocational Instruction - Other Instruction 3,933 Adult Instruction - Community College Instruction - Pupil Services 997 Instructional Staff Svcs. 99,233 Administrative Services 4,825 Health Services 1,670 Business Services 2,534 Operation & Maintenance of Plant Svcs. 209,376 Pupil Transportation 3,066 Central Services 44,756 Other Support Services - Student Activities 14,430 Community Services 255 Depreciation - unallocated 1,793,436

TOTAL DEPRECIATION FOR GOVERNMENTAL ACTIVITIES 2,415,070$

The governmental activities disposed of $3,945 of capital assets during the year with accumulated depreciation of $3,550 leaving a net loss from disposition of $319.



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Long –term construction commitments

The District has the following construction commitments in the Capital Project Funds:

Long-term construction commitments

The District has the following construction commitments in the Capital Project Funds:CONTRACT EXPENDED OUTSTANDING

VENDOR AMOUNT TO 6/30/09 COMMITMENTS

High School StadiumPLUMBING CONSTRUCTION WORTH AND COMPANY 414,132$ 384,272$ 29,860$ GENERAL CONSTRUCTION SKEPTON CONSTRUCTION 922,431 920,191 2,240 HVAC CONSTRUCTION BORO DEVELOPERS 76,055 48,420 27,635 ELECTRICAL CONSTRUCTION MJF ELECTRICAL CONSTRUCTION 222,124 159,502 62,622

TOTAL 1,634,743$ 1,512,385$ 122,357$

High School Maint Storage BuildingGENERAL CONSTRUCTION ADAMS BICKEL ASSOCIATES 49,442$ 49,442$ ELECTRICAL CONSTRUCTION LEDERACH ELECTRIC, INC 38,800 38,800.00 PLUMBING CONSTRUCTION RICHARD BONDURANT PLUMBING & HEATING 14,646 14,646.00 WOOD POLE BUILDING SHELL GRABER SUPPLY, LLC 39,825 39,825.00

TOTAL 142,713$ -$ 142,713$

Indian Crest Technology CenterPROJECT MANAGEMENT GATEWAY PROJECT MANAGEMENT 383,350$ 27,709$ 355,641$ ELECTRICAL CONSTRUCTION CATANZARO ELECTRIC, LLC 399,000 181,537 217,463.25 MECHANICAL CONSTRUCTION SLATTS MECHANICAL, INC 162,000 34,182 127,818.00

TOTAL 944,350$ 243,428$ 700,922$

High SchoolGENERAL CONSTRUCTION SKEPTON CONSTRUCTION 64,849,731$ 64,697,712$ 152,019$ PLUMBING CONSTRUCTION JBM MECHANICAL INC 3,857,000 3,725,764 131,236 HVAC CONSTRUCTION BORO DEVELOPERS 7,161,000 7,110,754 50,246 ELECTRICAL CONSTRUCTION THE FAIRFIELD COMPANY 8,410,434 8,156,459 253,975 FIRE SUPPRESSION CONSTRUCTION GUY M COOPER 1,285,000 1,210,189 74,811 FOOD SERVICE EQUIPMENT TODD DEVIN FOOD EQUIPMENT INC 697,000 622,530 74,470 SWIMMING POOL CONSTRUCTION GALL CONSTRUCTION OF AMERICA 790,645 743,987 46,658 AUTO TEMPERATURE CONTROLS NRG CONTROLS INC 2,354,885 2,051,711 303,174 ARCHITECHT FEES BRESLIN RIDYARD & FADERO 4,544,288 4,536,739 7,548 PROFESSIONAL SERVICES D'HUY ENGINEERING 1,235,455 1,235,364 91

TOTAL 95,185,437$ 94,091,210$ 1,094,228$

GRAND TOTAL 97,907,243$ 95,847,023$ 2,060,220$



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Short-term debt

Interfund receivables and payables

The following interfund receivables and payables were in existence on June 30, 2009:

INTERFUND INTERFUND RECEIVABLES PAYABLES

General Fund 867$ 218,851$ Special Revenue (Athletic) Fund 31,230 - Special Revenue (Capital Reserve) Fund - - Capital Project (2005AA Construction) Fund 141,475 - Enterprise (Food Service) Fund 46,146 867 Agency (Activity) Fund - -

TOTAL 219,718$ 219,718$

The District also made the following interfund transfers during the fiscal year ended June 30, 2009:

TRANSFER IN TRANSFER OUTGeneral Fund -$ 982,626$ Special Revenue (Athletic) Fund 934,595 - Capital Reserve Fund 48,031 - Debt Service Payment Fund - - TOTAL 982,626$ 982,626$



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Long-term liabilities Long-term liability balances and activity for the year ended June 30, 2009, were:

AMOUNTSBEGINNING ENDING DUE WITHINBALANCE ADDITIONS REDUCTIONS BALANCE ONE YEAR

GOVERNMENTAL ACTIVITIESGeneral Obligation Debt: Bonds and notes payable: Capital Projects 128,716,195$ 70,194,994$ 75,886,594$ 123,024,595$ 5,660,000$ Claims and Judgments - 78,888 - 78,888 - Total general obligation debt 128,716,195 70,273,882 75,886,594 123,103,483 5,660,000 Other liabilities: Vested employee benefits: Vacation pay 220,699 - 29,360 191,339 85,374 Sick pay 1,614,412 41,424 - 1,655,836 157,079 Net OPEB Obligation - 335,229 - 335,229 - Other retirement benefits 74,401 241,509 - 315,910 1,610 Total other liabilities 1,909,512 618,162 29,360 2,498,314 244,063 TOTAL GOVERNMENTAL ACTIVITY

LONG-TERM LIABILITIES 130,625,707$ 70,892,044$ 75,915,954$ 125,601,797$ 5,904,063$

BUSINESS TYPE ACTIVITIESOther liabilities: Vested employee benefits: Vacation pay 1,905 - 1,905 - - Net OPEB Obligation - 90 - 90 - Sick pay 32,293 - 32,293 - - TOTAL BUSINESS-TYPE ACTIVITY

LONG-TERM LIABILITIES 34,198$ 90$ 34,198$ 90$ -$

Payments on bonds and notes are made by the general fund. Vested employee benefits will be liquidated by governmental and proprietary funds. The School District currently does not have any bonds or notes payable in business-type activities. Total Interest paid and accrued during the year:

GOVERNMENTAL ACTIVITIES: EXPENSE PAIDGeneral obligation debt 12,023,538$ 12,114,281$ Short-term borrowings - -

TOTAL INTEREST PAID BY GOVERNMENTAL ACTIVITIES 12,023,538$ 12,114,281$

General Obligation Bonds – Series A 0f 2001 On September 15, 2001 the District issued $7,785,000 of general obligation bonds for the purpose of financing a current refunding of its 1996 bond series. Repayments are scheduled in varying amounts due each August 15 into the year 2011. A sinking fund has been established with the paying agent in accordance with the Local Governmental Unit Debt Act. Interest is payable semi-annually on February 15 and August 15 with interest rates ranging from 3.45% to 4.15%, with total interest indebtedness of $1,782,954.



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On June 15, 2009, the District refunded the Series A of 2001 ($2,815,000), the Series of 2002 ($1,690,000), the Series A of 2003 ($4,110,000), and the Series of 2004 General Obligation Bonds ($5,565,000), with interest rates ranging from 2.0% to 4.15%, with new debt in the amount of $14,105,000 with interest rates at 3.0%. The new debt is dated June 15, 2009.

PORTION PERTAINING TO THE SERIES OF 2001 A

BONDS REFUNDED SOURCES 19.85%

Gross Proceeds of Bonds 2,800,111$ Plus: Accrued Interest

Premium - Less: Original Issue Discount 72,551

Underwriter's Discount (21,729) TOTAL SOURCES 2,850,933$

USESEscrow Deposit 2,838,364$ Issuance Costs 11,510 Sinking Fund Deposits 1,059

TOTAL USES 2,850,933

DIFFERENCE IN CASH FLOW REQUIREMENTSOld Debt Service Cash Flows 2,991,058$ Cash Flows From New Debt:

New Debt Service Cash Flow 2,942,793$ Less: Excess Funds Deposited in Sinking Fund (1,059)

Net cash Flows From New Debt 2,941,734

Net Difference in Cash Flows 49,324$

ECONOMIC GAIN/LOSSPresent Value of Old Debt Service Cash Flows 2,953,820$

Present Value of New Debt Service Cash Flows 2,890,246$ Less: Amount Deposited in Sinking Fund (1,059)

TOTAL 2,889,187

ECONOMIC GAIN 64,633$

General Obligation Bonds - Series of 2002 On December 1, 2002, the District issued $10,000,000, of the General Obligation Bonds - Series of 2002. The purpose of this issue is to currently refund a portion of the General Obligation Bonds - Series of 1997, and to pay the costs of issuing the bonds. Proceeds of $10,237,529 were deposited with the escrow agent, which, along with interest earnings, will be sufficient to refund all bonds at their respective maturity dates. A Sinking fund has been established with the paying agent in accordance with the Local Governmental Unit Debt Act. The bonds will mature from September 1, 2003, to September 1, 2010. Interest rates range from 2.00% to 3.80% with total interest indebtedness of $1,368,486.



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On June 15, 2009, the District refunded the Series A of 2001 ($2,815,000), the Series of 2002 ($1,690,000), the Series A of 2003 ($4,110.000), and the Series of 2004 General Obligation Bonds ($5,565,000) with interest rates ranging from 2.0% to 4.15%, with new debt in the amount of $14,105,000 with interest rates at 3.0%. The new debt is dated June 15, 2009.

PORTION PERTAINING TOTHE SERIES 2002

BONDS REFUNDEDSOURCES 11.92%

Gross Proceeds of Bonds 1,681,061$ Plus: Accrued Interest -

Premium 43,557 Less: Original Issue Discount -


USESEscrow Deposit 1,704,027 Issuance Cost 6,910 Sinking Fund Deposit 636

TOTAL USES 1,711,573$

DIFFERENCE IN CASH FLOW REQUIREMENTSOld Deb Service Cash Flows 1,753,960$

Cash Flows From New Debt:New Debt Service Cash Flow 1,766,721$ Less: Excess Funds Deposited in Sinking Fund (636)

Net Cash Flows From New Debt 1,740,566

Net Difference in Cash Flows (12,125)$

ECONOMIC GAIN/LOSSPresent Value of Old Dept Service Cash Flows 1,740,566$

Present Value of New Debt Service Cash Flows 1,735,174$ Less Excess Funds Deposited in Sinking Fund (636)

TOTAL 1,734,538

ECONOMIC GAIN 6,028$ General Obligation Bonds - Series of 2003

On January 15, 2003, the District issued $10,000,000, of the General Obligation Bonds - Series of 2003. The purpose of this issue is to construct, furnish and equip the Vernfield Elementary School, various capital improvements, and the purchase of land for the site of a new high school and to pay the costs of issuing the bonds. A Sinking fund has been established with the paying agent in accordance with the Local Governmental Unit Debt Act. The bonds will mature from November 15, 2004, to November 15, 2023. Interest rates range from 2.00% to 4.60% with total interest indebtedness of $5,231,718.



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On June 15, 2009, the District advanced refunded the Series of 2003 General Obligation Bonds ($8,120,000), with interest rates of 2.0% to 4.6%, with new debt in the amount of $8,095,000, with interest rates that range from 3.0% to 5.0%.

SOURCES




USESEscrow Deposit 8,147,916 Issuance Cost 37,204 Sinking Fund Deposit 5,063



Cash Flows From New Debt:New Debt Service Cash Flow 10,604,357$ Less: Excess Funds Deposited in Sinking Fund (5,063)




Present Value of New Debt Service Cash Flows 8,248,163$ Less Excess Funds Deposited in Sinking Fund (5,063)

TOTAL 8,243,100


General Obligation Bonds - Series A of 2003

On November 1, 2003, the District issued $7,865,000, of the General Obligation Bonds - Series A of 2003. The purpose of this issue is to advance refund the outstanding General Obligation Bonds - Series of 1998, and to pay the costs of issuing the bonds. Proceeds of $8,025,252 were deposited with the escrow agent, which, along with interest earnings, will be sufficient to refund all bonds at their respective maturity dates. A Sinking fund has been established with the paying agent in accordance with the Local Governmental Unit Debt Act. The bonds will mature from May 15, 2004, to November 15, 2013. Interest rates range from 2.00% to 3.50% with total interest indebtedness of $4,452,453.

On June 15, 2009, the District refunded the Series A of 2001 ($2,815,000), the Series of 2002 ($1,690,000), the Series A of 2003 ($4,100,000), and the Series of 2004 General Obligation Bonds ($5,565,000) with interest rates ranging from 2.9% to 4.15%, with new debt in the amount of $14,105,000 with interest rates at 3.0%. The new debt is dated June 15, 2009.



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PORTION PERTAINING TOTHE SERIES 2003 A BONDS REFUNDED

SOURCES 28.98%












TOTAL 4,218,316

ECONOMIC GAIN 124,681$ General Obligation Bonds - Series of 2004

On June 1, 2004, the District issued $10,000,000 of General Obligation Bonds - Series of 2004. The purpose of this issue is to provide funds for: (a) the advance refunding of the General Obligation Bonds - Series of A of 1997, and (b) paying the costs of issuing and insuring the bonds. In accordance with the Local Governmental Unit Debt Act, a sinking fund has been established with the paying agent. The bonds mature from September 1, 2005, to September 1, 2012. Interest rates range from 2.00% to 3.00%.

On June 15, 2009, the District refunded the Series A of 2001 ($2,815,000), the Series of 2002 ($1,690,000), the Series A of 2003 ($4,110,000), and the Series of 2004 General Obligation Bonds ($5,565,000) with interest rates ranging from 2.9% to 4.15%, with new debt in the amount of $14,105,000 with interest rates at 3.0%. The new debt is dated June 15, 2009.



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PORTION PERTAINING TOTHE SERIES 2004

BONDS REFUNDEDSOURCES 39.25%



Underwriter's Discount (42,956)

TOTAL SOURCES 5,636,037$









TOTAL 5,711,661


General Obligation Bonds - Series of 2005

On May 15, 2005, the District issued $45,000,000 of General Obligation Bonds - Series of 2005. The purposes of this issue are to provide funds for: (1) the planning, designing, acquiring, constructing, furnishing and equipping (a) a new High School, and (2) paying the costs of issuing the bonds. In accordance with the Local Governmental Unit Debt Act, a sinking fund has been established with the paying agent. The bonds mature from November 15, 2006 to November 15, 2024. Interest rates range from 2.60% to 5.00%. The outstanding debt service requirements at June 30, 2009 , are:



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FISCAL YEAR PRINCIPAL INTEREST2009-10 5,000$ 2,245,745$ 2010-11 5,000 2,245,591 2011-12 5,000 2,245,431 2012-13 210,000 2,241,675 2013-14 1,520,000 2,200,000 2014-19 15,720,000 9,055,000 2019-24 23,110,000 4,100,250 2024-25 4,410,000 110,250

SUB-TOTAL 44,985,000 24,443,942$ Unamortized Premium 2,289,357 Unamortized Discount - Unamortized Deferred Amounts -

TOTAL OUTSTANDING 47,274,357$

General Obligation Bonds - Series of 2006

On December 15, 2006, the District issued $7,490,000 of General Obligation Bonds - Series of 2006. The purposes of this issue are to provide funds for: (1) the advance refunding of the General Obligation Bonds -Series of 2001, and (2) paying the costs of issuing the bonds. Proceeds of $7,344,925 were deposited with the escrow agent, which along with interest earnings will be sufficient to refund all bonds at their respected maturity dates. In accordance with the Local Governmental Unit Debt Act, a sinking fund has been established with the paying agent. The bonds mature from November 15, 2007 to November 15, 2016. Interest rates range from 3.25% to 3.50%. The outstanding debt service requirements at June 30, 2009, are:

FISCAL YEAR PRINCIPAL INTEREST2009-10 710,000$ 206,790$ 2010-11 730,000 182,490 2011-12 755,000 157,430 2012-13 780,000 131,528 2013-14 810,000 104,595 2014-17 2,595,000 138,337

6,380,000 921,170$ Unamortized Premium (14,427) Unamortized Deferred Amt. (54,311)


General Obligation Bonds – Series of 2007

On April 11, 2007, the District issued $46,920,000 of General Obligation Bonds – Series of 2007. The purpose of this issue is to provide funds for: (a) the cost of planning, designing, acquiring, constructing, furnishing and equipping a New High School, and (b) paying the costs and expenses of issuing the bonds. In accordance with the Local Governmental Unit Debt Act, a Sinking Fund has been established with the paying agent. The bonds mature from November 1, 2009, to November 1, 2024. Unless and until converted to another Interest Rate Mode, the Bonds are to bear interest from the date of their initial delivery at the Weekly Rate determined weekly by the Underwriter as remarketing agent, to be



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that rate which would cause the Bonds to have a market value equal to 100% of the principal amount thereof on the date of each determination, except that the Weekly Rate may not to exceed 15.00% per annum (the “Maximum Rate”). The bonds shall be authorized, issued and secured pursuant to one or more applicable resolutions (collectively, the “Resolution”), adopted by the School District on December 20, 2005. The scheduled interest payment dates for interest accrued and payable on the Bonds in the Weekly Mode will be monthly on the first business day of each month, beginning in October 1, 2007. During the Weekly Mode, interest will be computed on the Bonds on the basis of a year of 365 days or 366 days, as appropriate, for the actual number of days elapsed. On June 1, 2009, the District refunded these variable rate outstanding bonds, including payment of the Swap Termination fee ($6,214,000), with the issuance of General Obligation Bonds – Series of 2009. General Obligation Bonds – Series of 2009 On June 1, 2009, the District issued $43,815,000 of General Obligation Bonds – Series of 2009. The purpose of this issue is to provide funds to: (1) currently refund the variable Rate Demand Bond of 2007; (2) to pay the related costs of issuance. In accordance with the Local Governmental Unit Debt Act, a sinking fund has been established with a paying agent. The interest rate ranges from 3.0% to 5.0% payable on November 1, and May 1, each year. Total interest indebtedness is $17,483,134,38. The bonds mature from November 1, 2009 to November 1, 2024. The debt service requirements on this bond issue at June 30, 2009, are:

FISCAL YEAR PRINCIPAL INTEREST2009-10 1,170,000$ 1,680,953$ 2010-11 1,040,000 1,802,212 2011-12 1,855,000 1,758,787 2012-13 2,675,000 1,684,150 2013-14 2,735,000 1,582,638 2014-19 18,070,000 7,058,825 2019-20 16,270,000 1,915,569

SUB-TOTAL 43,815,000 17,483,134$ Less:Unamortized Premium (448,312) Add: Unamoritize Bond Premium 3,538,312


General Obligation Bonds – Series A of 2009 On June 15, 2009, the District issued $14,105,000 of General Obligation Bonds – Series A of 2009. The purpose of this issue is to provide funds to: (1) currently refund all the GOB, Series A of 2001; (2) currently refund all the GOB, Series of 2002; (3) currently refund all the GOB, Series A of 2003; (4) currently refund all of the GOB, Series of 2004; and (5) pay the costs incurred in connection with the issuance In accordance with the Local Governmental Debt Act, a sinking fund has been established with a paying agent. The interest rate is 3.0% payable on September 1, and March 1, each year. Total interest indebtedness is $718,731,67. The bonds mature from September 1, 2009 to September 1, 2013. The debt service requirements on this bond issue at June 30, 2009, are:



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FISCAL YEAR PRINCIPAL INTEREST2009-10 3,680,000$ 245,707$ 2010-11 3,995,000 252,825 2011-12 3,240,000 144,300 2012-13 2,255,000 61,875 2013-14 935,000 14,025

SUB-TOTAL 14,105,000 718,732$ Less:Unamortized Premium (165,269) Add: Unamoritize Bond Premium 365,463


General Obligation Bonds – Series AA of 2009 On June 15, 2009, the District issued $8,095,000 of General Obligation Bonds – Series AA of 2009. The purposes of this issue are to provide funds to: (1) currently refund all of the GOB, Series 2003; and (2) pay the costs incurred in connection with the issuance. In accordance with the Local Governmental Debt Act, a sinking fund has been established with a paying agent. The interest rate ranges from 3.0% to 5.0% payable on September 1, and March 1, each year. Total indebtedness is $2,509,356.53. The bonds mature from September 1, 2009 to September 1, 2013. The debt service requirements on this bond issue at June 30, 2009, are:

FISCAL YEAR PRINCIPAL INTEREST2009-10 95,000$ 207,313$ 2010-11 450,000 283,938 2011-12 465,000 270,213 2012-13 480,000 256,037 2013-14 495,000 241,413 2014-19 2,775,000 907,512 2019-24 3,335,000 342,931

SUB-TOTAL 8,095,000 2,509,357$ Less:Unamortized Premium (91,650) Add: Unamoritize Bond Premium 225,432




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Combined Long-Term Debt

G.O.B. G.O.B. G.O.B. G.O.B. G.O.B. TOTAL SERIES SERIES SERIES SERIES A SERIES AA PRINCIPAL

FISCAL YEAR OF 2005 OF 2006 OF 2009 OF 2009 OF 2009 PAYMENTS2009-10 5,000$ 710,000$ 1,170,000$ 3,680,000$ 95,000$ 5,660,000$ 2010-11 5,000 730,000 1,040,000 3,995,000 450,000 6,220,000 2011-12 5,000 755,000 1,855,000 3,240,000 465,000 6,320,000 2012-13 210,000 780,000 2,675,000 2,255,000 480,000 6,400,000 2013-14 1,520,000 810,000 2,735,000 935,000 495,000 6,495,000 2014-19 15,720,000 2,595,000 14,835,000 - 2,775,000 35,925,000 2019-24 23,110,000 - 17,440,000 - 3,335,000 43,885,000 2024-25 4,410,000 - 2,065,000 - - 6,475,000

TOTAL 44,985,000 6,380,000 43,815,000 14,105,000 8,095,000 117,380,000 LESS PAYABLE WITH- IN ONE YEAR 5,000 710,000 1,170,000 3,680,000 95,000 5,660,000 LONG-TERM PRIN. DUE AFTER ONE YEAR 44,980,000$ 5,670,000$ 42,645,000$ 10,425,000$ 8,000,000$ 111,720,000$

G.O.B. G.O.B. G.O.B. G.O.B. G.O.B. TOTAL SERIES SERIES SERIES SERIES A SERIES AA DEBT SVC.

FISCAL YEAR OF 2005 OF 2006 OF 2009 OF 2009 OF 2009 PAYMENTS2009-10 2,250,745$ 916,790$ 2,850,953$ 3,925,707$ 302,313$ 10,246,508$ 2010-11 2,250,591 912,490 2,842,212 4,247,825 733,938 10,987,056 2011-12 2,250,431 912,430 3,613,787 3,384,300 735,213 10,896,161 2012-13 2,451,675 911,528 4,359,150 2,316,875 736,037 10,775,265 2013-14 3,720,000 914,595 4,317,638 949,025 736,413 10,637,671 2014-19 24,775,000 2,733,337 21,023,987 - 3,682,512 52,214,836 2019-24 27,210,250 - 20,173,782 - 3,677,931 51,061,963 2024-25 4,520,250 - 2,116,625 - - 6,636,875

TOTAL 69,428,942$ 7,301,170$ 61,298,134$ 14,823,732$ 10,604,357$ 163,456,335$

Summary of Principal Requirements

Summary of Principal And Interest Requirements

The combined general long-term debt obligations for subsequent years, except for compensated absences and retirement benefits, are:



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Compensated Absences

Sick-Pay

Under the District's various bargaining agreements and plans, professional and eligible support personnel accumulate unused sick days from year to year based on their classification. These accumulated sick days are non-vesting during the employee's tenure. Upon retirement, certain classes of employees are eligible for remuneration for unused sick days under the bargaining agreements.

The District maintains records of each employee's accumulated sick days that are vested with employees who are eligible to retire, and for those under the administrative plan. The amount recorded in the General Fund for governmental employees, which will use currently available financial resources, is $157,079, including FICA tax (net of reimbursement). This amount is reflected as a current liability in the governmental activities column of the government-wide statement of net assets. The remaining sick leave termination benefit of $1,498,757, including FICA tax (net of reimbursement), is recorded as a long-term liability in the governmental activities column of the government-wide statement of net assets.

Vacation Leave

Unused vacation leave is paid upon an employee's termination. The District maintains records of each employee's accumulated vacation days. In accordance with GASB Statement No. 16, the portion of vacation pay earned at June 30, 2009, that will use currently available financial resources is $85,374, including fica tax and retirement contributions (net of reimbursement), which has been recorded in the General Fund and Athletic Fund. This amount is also shown as a current liability in the governmental activities column of the government-wide statement of net assets. The remaining vacation pay earned at June 30, 2009, of $105,965, including fica tax and retirement contributions (net of reimbursement), is recorded as a long-term liability in the governmental activities column of the government-wide statement of net assets.

Defined benefit pension plans

Plan Description

Name of plan: The Public School Employees’ Retirement System (the System).

Type of Plan: Governmental cost sharing multiple-employer defined benefit plan.

Benefits: Retirement and disability legislatively mandated ad hoc cost-of-living adjustments, healthcare insurance premium assistance to qualifying annuitants.

Authority: The Public School Employees’ Retirement Code (Act No. 96 of October 2, 1975, as amended) (24 PA C.S. 8101-8535).

Annual Financial Report: The System issues a comprehensive annual financial report that includes financial statements and required supplementary information for the plan. A copy of the report may be obtained by writing to Barbara D. Flurie, Office of Financial Management, Public School Employees’ Retirement System, P. O. Box 125, Harrisburg, PA 17108-0125. The report is also available in the publications section of the PSERS website at www.psers.state.pa.us.



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Funding Policy

Authority: The contribution policy is established in the Public School Employees’ Retirement Code and requires contributions by active members, employers, and the Commonwealth.

Contribution Rates

Member Contributions: Active members, who joined the System prior to July 22, 1983, contributed at 5.25 percent (Membership Class TC) or at 6.50 percent (Membership Class TD) of the member's qualifying compensation. Members who joined the System on or after July 22, 1983 and who were active or inactive as of July 1, 2001, contribute at 6.25 percent (Membership Class TC) or at 7.50 percent (Membership Class TD) of the member's qualifying compensation. Members who joined the System after June 30, 2001, contribute at 7.50 percent (automatic Membership Class TD). For all new hires and for members who elected Class TD membership, the higher contribution rates began with service rendered on or after January 1, 2002.

Contributions required of employers are based upon an actuarial valuation. For fiscal year ended June 30, 2009, the rate of employer contribution was 4.76 percent of covered payroll. The 4.76 percent rate is comprised of a pension contribution rate of 4.00 percent for pension benefits and 0.76 for healthcare insurance premium assistance.

The employer’s current year covered payroll was $45,194,638 and total payroll was $45,921,204.

The total employee and employer contributions for this current year were $2,141,476 and $2,146,972, respectively.

Other Employee Benefits

Pursuant to previous contractual special termination benefits offered to certain classes of employees, the district has recorded $1,610 in the General Fund and as a current liability in the governmental activities column of the government-wide statement of net assets, and $314,300 as a long-term liability in the government-wide statement of net assets. Other Post Employment Benefits Plan Description: The following table describes the plan:



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Summary of Plan Provisions

Group Eligibility Coverage And Premium Sharing Duration

I. ADMINISTRATORS

A. Former Superintendent

N/A – Already retired • Coverage: Medical, Prescription Drug, Dental, Vision and Life

Insurance.

• Premium Sharing: District pays 100% of premium for Medical, Prescription Drug, Dental and Vision until the earlier of the Former Superintendent’s death or May 31, 2022. Afterwards, the Former Superintendent may continue coverage, but he must pay 100% of the premium for Medical, Prescription Drug, Dental and Vision. However, if member or spouse is over 65 and covered by Medicare, member or spouse pays only 50% of the premium for Medical and Prescription Drug. Life insurance is provided in the amount .of $5,000 on the member’s life only. For life of the member, District pays 100% of the premium for Life Insurance.

• Dependents: Spouse included. If retiree dies, spouse gets to continue coverage. In such case, spouse pays full premium.

Life of the Member

B. Current Superintendent

Must retire at completion of current contract on June 30, 2012.

• Coverage: Medical, Prescription Drug, Dental, Vision and Life Insurance.

• Premium Sharing: District pays 100% of premium until the earlier of the Current Superintendent’s death or May 31, 2018. During this time period, if current superintendent is receiving the $100 PSERS Supplement, he must forward that to the district. Afterwards, the Current Superintendent may continue coverage, but he must pay 100% of the premium. However, if member or spouse is over 65 and covered by Medicare, member or spouse pays only 50% of the premium for Medical and Prescription Drug. Life insurance is provided in the amount .of $5,000 on the member’s life only. For life of the member, District pays 100% of the premium for Life Insurance

• Dependents: Spouse included. If retiree dies, spouses get to continue coverage. In such case, spouse pays full premium.

Same as IA.



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C. Former and Current Administrators and Cabinet Secretaries

Must meet one of the following conditions to be eligible:: i) Must have ten years of service with the District and be eligible for PSERS retirement. II) Act 110/43

• Coverage: Medical, Prescription Drug, Dental Vision and Life Insurance.

• Premium Sharing: If a member has at least 10 years of service with the district and is eligible for retirement through PSERS, the district pays 100% of the single coverage premium for one year for Medical, Prescription Drug, Dental and Vision. Member must pay for any amount over the single coverage premium. After one year, member may continue coverage, but he must pay 100% of the premium. However, if member or spouse is over 65 and covered by Medicare, member or spouse pays only 50% of the premium for Medical and Prescription Drug. Life insurance is provided in the amount .of $5,000 on the member’s life only. District pays for Life Insurance for one year. Afterwards, member must pay 100% of the premium for Life Insurance.

If the member does not meet the requirements for the district subsidy but requirements are met for the Act 110/43 benefit, the member and spouse may continue coverage by paying the full premium as determined for the purchase of COBRA.

• Dependents: Spouse Included. If retiree dies, spouse gets to continue coverage. In such case, spouse pays full premium.

Grandfathered Retiree: For one who retired under a previous contract, District pays $100 towards the premium until age 65. Member pays remainder of the premium. After age 65, member pays 100% of premium. However, if member or spouse is over 65 and covered by Medicare, member or spouse pays only 50% of the premium for Medical and Prescription Drug.

• If member is eligible for District subsidy, member and spouse can receive coverage for life of the member.

• If member is only eligible for the Act 110/43subsidy, member is covered until age 65. Spouse is coverage until age 65.

II. TEACHERS

Must meet one of the following conditions to be eligible: i) Must be 50 or older with at least 10 years of service with the district and eligible for PSERS retirement. ii) ACT 110/43

• Coverage: Medical, Prescription Drug, and Life Insurance.

• Premium Sharing: Member must pay 100% of the premium. Life Insurance is provided in the amount of $5,000 on the member’s life only.

• Dependents: Spouse included: If retiree dies, spouse gets to continue coverage until the earlier of age 65 or two years. In such case, spouse pays full premium.

• Member is covered until age 65.

• Spouse is covered until age 65..

III. SUPPORT STAFF

Same as II

Same as II

Same as II



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Summary of Plan Provisions

Group Eligibility Coverage And Premium Sharing Duration

IV. FOOD SERVICE

Same as II

Same as II

Same as II

V. PART-TIME BENEFITS

Same as II

Same as II

Same as II

Notes: Act 110/43 Benefit: All employees are eligible for this benefit upon retirement with 30 years of PSERS service or upon superannuation retirement (age 60 with 30 years of service, age 62, with 1 year of service, or 35 years of service regardless of age) Retired employees are allowed to continue coverage for themselves and their dependents in the employer’s group health plan until the retired employee reaches Medicare age. In order to obtain coverage, the retiree must provide payment equal to the premium determined for the purpose of COBRA.

PSERS Supplement: A retiree may receive a $100 medical reimbursement from PSERS if he (or she) meets one of the following qualifications at retirement:

1. 24.5 years of PSERS service 2. Termination of employment on or after age 62 with at least 15 years of PSERS service.

PSERS Retirement: An employee is eligible for PSERS retirement at age of 55 with 25 years of service, age 60 with 30 years of service, age 62 with 1 year of service or 35 years of service regardless of age.

Coordination with Medicare Benefits: Medicare pays primary.



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Funding Policy and Annual OPEB Cost. This benefit is state mandated via the School Code statute. The District’s annual other post-employment benefit (OPEB) cost (expense) for the plan is calculated based on the annual required contribution of the employer (ARC), an the amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost, each year, and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The District’s annual OPEB cost for the current year and the related information is as follows:

Contribution Rates:

OPEB Benefit Actuarially Determined

Interest Rate 4.5%

Plan Members 940

Annual Required Contribution 560,756$ Interest on net OPEB obligation - Adjustment to annual required contribution -

Annual OPEB cost 560,756

Contributions made (225,437)

Increase in net OPEB obligation 335,319

Net OPEB obligation - beginning of year - Net OPEB obligation - end of year 335,319$

The following table shows the benefit separated by fund:

General Fund Food Service Fund TotalDemographic Information:

Active Participants 854 3 857Retired Participants 83 0 83Total 937 3 940

Annual Payroll of Active Participants $43,897,253 $30,895 $43,928,148

Annual Required Contributions 560,666$ 90$ 560,756$ Interest on Net OPEB Obligation - - - Adjustment to Annual Required Contribution - - -

Annual OPEB Cost 560,666 - 90 560,756

Contributions made (225,437) - (225,437)

Increase in Net OPEB Obligation 335,229 - 90 335,319 Net OPEB Obligation - beginning of year - - -

Net OPEB Obligation - end of year 335,229$ 90$ 335,319$

Actuarial Valuation by Fund

Other Post Employment Benefit Plan



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Since this is the first year of implementation for GASB Statement 45, prior year data has been omitted for the two preceding years. The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation of the fiscal year ending June 30, 2009, for the benefits were as follows:

Annual PercentageYear OPEB of OPEB Cost Net OPEB

ended Cost Contributed Obligation6/30/2009 560,756$ 40.2% 335,319$ 6/30/2008 - 0.0% - 6/30/2007 - 0.0% -

Funding Status and Funding Process. The funded status of benefits as of June 30, 2009, was as follows:

State-mandated State-mandatedHealthcare Healthcare

Benefit BenefitGovernmental Activity Business-Type Activity

Actuarial accrued liability (a) 4,575,336$ 90$ Actuarial value of plan assets (b) - -

Unfunded actuarial accrued liability (a) - (b) 4,575,336$ 90$

Funded Ratio (b) / (a) 0.0% 0.0%Covered payroll 43,897,253$ 30,895$

Unfunded actuarial accrued liability (funding excess) as a percentage of covered payroll. 10.4% 0.3%

Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the benefits and the annual required contributions of the employer are subject to continual revision actual results are compared to past expectations and new estimates are made about the future. The required schedule of funding progress presented as required supplementary information provides multiyear trend information that shows whether the actuarial value of plan Net Assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits in force at the valuation date and the pattern of sharing benefit costs between the district and the plan members to that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant methods and assumptions were as follows:



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20132014

2015

5.0%

Healthcare

Increment Benefit7/1/2008

Entry Age Normal

29 years

pay as you go basis

Level dollar methodover a 30 year

period

4.5%4.25% to 7.25%

Actuarial Valuation Date

Actuarial Cost Method

Amortization Method

Remaining amortization period

Asset Valuation Method

Actuarial Assumptions:

Investment rate of returnProjected salary increasesHealthcare inflation rate

2008 8.5%2009 8.0%2010 7.5%2011 7.0%2012 6.5%

2016 + 5.0%

6.0%5.5%

Note 6 - Risk Management

The District is subject to risk of loss from employee acts, property damage, personal injury, auto accidents, theft, etc. The District covers those risks through the purchase of commercial insurance. The Souderton Area School district is a participating member of a Workers’ Compensation Consortium. The Consortium is comprised of 81 member School districts which jointly self-assume their workers’ compensation liabilities. Each District is required to make contributions to the Consortium based on formulae set forth in the contract. Each member school district individually retains sole liability up to a retention level, which is fixed annually by multiplying its Experience Modification Factor times the last audited fiscal year payroll of the member. The result is then multiplied by a contribution rate, which is the same for all members. Even though the member school districts contribute to a central fund, they remain individually liable for any workers’ compensation claims.

Above the level of retention, the Consortium pays claims up to the level of coverage of $100,000 for the year ended June 30, 2009, provided by an excess insurance policy. Claims above the maximum coverage of excess insurance are paid by the members of the Consortium through additional assessments against members.

The members of the Consortium are required to participate in deficiencies and are subject to periodic assessments by the Executive Committee, as required.

At June 30, 2009, the most recent available financial statements, the consortium did not have a deficit, in which the ultimate responsibility to pay for a deficit belongs to the member districts.



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Note 7 – Fund Balance Designations/Reserves

Reserved Fund Balance

The fund balance reservations, in the general fund totaling $2,216,690, represent the amount appropriated for 2009-10 expenditures.

Designated Fund Balance

Management designated $4,000,000 of its general fund’s fund balance at June 30, 2009 for future increases for retirement contributions ($1.1million) and completion of the high school and renovations to North Montco Technical Career Center ($2.9 million).

Note 8 - Net Asset Restrictions

The portion of net assets for governmental activities, shown on the government-wide statement of net assets invested in capital assets, net of related debt is $56,794,592. The governmental activities column has $295,213 restricted for federal grants. The business-type activities column reflects $793,037 invested in capital assets with no related debt.

Note 9 - Contingencies

Grants

The School District received financial assistance from federal and state agencies in the form of grants. The expenditure of funds received under these programs generally requires compliance with terms and a condition specified in the grant agreements, and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the general fund, or other applicable funds. However, in the opinion of management any such disallowed claims will not have a material adverse effect on the overall financial position of the School District as of June 30, 2009.

Litigation

In accordance with management, there are no legal matters that could materially affect the financial position of the District as of June 30, 2009.

R E Q U I R E D

S U P P L E M E N T A L I N F O R M A T I O N

Souderton Area School District Schedule of Funding Progress


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Healthcare benefit

ActuarialAccrued UAAL as a

Actuarial Liability Unfunded Percentage ofActuarial Value of (AAL)- AAL Funded Covered CoveredValuation Assets Unit Credit (UALL) Ratio Payroll Payroll

Date (a) (b) (b - a) (a / b) ( c ) ((b - a) / c)7/1/2008 -$ 4,575,426$ 4,575,426$ 0.0% 43,928,148$ 10.42%7/1/2006 - - - 0.0% - 0.00%7/1/2004 - - - 0.0% - 0.00%

S U P P L E M E N T A L I N F O R M A T I O N S E C T I O N

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TOTAL DEBT TOTAL TOTALSPECIAL SERVICE 2009 2009 A 2009 AA DEBT NON-MAJOR

ATHLETIC REVENUE PAYMENT BOND BOND BOND SERVICE GOVERNMENTALFUND FUNDS FUND FUND FUND FUND FUNDS FUNDS

ASSETSCash and cash equivalents 46,967$ 46,967$ 2,071$ -$ 5,356$ 5,083$ 12,510$ 59,477$ Investments - - - - - - - - Other Receivables - - - - - - - - Due from other funds 31,230 31,230 - - - - - 31,230 Receivables from other governments - - - - - - - - Other Recoverable Disbursements - - - - - - - - Prepaid Expenditures - - - - - - - - Inventories - - - - - - - -

TOTAL ASSETS 78,197$ 78,197$ 2,071$ -$ 5,356$ 5,083$ 12,510$ 90,707$

LIABILITIES AND FUND BALANCESLIABILITIES:

Accounts Payable 26,347$ 26,347$ -$ -$ -$ -$ -$ 26,347$ Due to other funds - - - - - - - - Interest Payable - - - - - - - - Accrued Payroll and Benefits 5,856 5,856 - - - - - 5,856 Deferred Revenue 54,377 54,377 - - - - - 54,377 Compensated Absences - - - - - - - -

TOTAL LIABILITIES 86,580 86,580 - - - - - 86,580 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

FUND BALANCES:Reserved for: Inventories - - - - - - - - Prepaid Expenditures - - - - - - - - Unreserved (8,383) (8,383) 2,071 - 5,356 5,083 12,510 4,127

TOTAL FUND BALANCES (8,383) (8,383) 2,071 - 5,356 5,083 12,510 4,127 TOTAL LIABILITIES AND FUND BALANCES 78,197$ 78,197$ 2,071$ -$ 5,356$ 5,083$ 12,510$ 90,707$

SPECIAL REVENUE FUNDS

Souderton Area School DistrictCombining Balance Sheet

Non-Major Governmental FundsAs of June 30, 2009

DEBT SERVICE FUNDS

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TOTAL DEBT TOTAL TOTALSPECIAL SERVICE 2009 2009 A 2009 AA DEBT NON-MAJOR

ATHLETIC REVENUE PAYMENT BOND BOND BOND SERVICE GOVERNMENTAFUND FUNDS FUND FUND FUND FUND FUNDS FUNDS

REVENUESLocal Sources 73,948$ 73,948$ 63,791$ -$ 21$ 20$ 63,832$ 137,780$ State Sources 31,207 31,207 - - - - - 31,207 Federal Sources - - - - - - - -

TOTAL REVENUES 105,155 105,155 63,791 - 21 20 63,832 168,987 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

EXPENDITURESInstruction - - - - - - - - Support Services - - - 433,312 167,434 167,453 768,199 768,199 Operation of Non-Instructional Services 1,097,822 1,097,822 - - - - - 1,097,822 Capital Outlay - - - - - - - - Debt Service - - 4,092,000 - - - 4,092,000 4,092,000

TOTAL EXPENDITURES 1,097,822 1,097,822 4,092,000 433,312 167,434 167,453 4,860,199 5,958,021

EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (992,667) (992,667) (4,028,209) (433,312) (167,413) (167,433) (4,796,367) (5,789,034)

OTHER FINANCING SOURCES (USES) Proceeds from Refunding Bond Issues - - - 43,815,000 14,105,000 8,095,000 66,015,000 66,015,000 Bond Premium - - - 3,538,312 365,463 225,432 4,129,207 4,129,207 Payment to bond refunding escrow agent - - - 46,920,000 14,297,694 8,147,916 69,365,610 69,365,610 Bond Discount - - - - - - - - Sale/Compensation for Fixed Assets - - - - - - - - Transfers in 934,595 934,595 - - - - - 934,595 Transfers out - - - - - - - -

TOTAL OTHER FINANCING SOURCES AND USES 934,595 934,595 - 433,312 172,769 172,516 778,597 1,713,192

NET CHANGE IN FUND BALANCES (58,072) (58,072) (4,028,209) - 5,356 5,083 (4,017,770) (4,075,842)

FUND BALANCES - BEGINNING 49,689 49,689 4,030,280 - - - 4,030,280 4,079,969

FUND BALANCES - ENDING (8,383)$ (8,383)$ 2,071$ -$ 5,356$ 5,083$ 12,510$ 4,127$

SPECIAL REVENUE FUNDS

Souderton Area School DistrictCombining Statement of Revenues, Expenditures and Changes in Fund Balances

Non-Major Governmental FundsFor the Year Ended June 30, 2009

DEBT SERVICE FUNDS

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2005AACONSTRUCTION CONSTRUCTION

FUND FUND TOTALASSETS

Cash 197,515$ 45,849$ 243,364$ Investments 799,875 - 799,875 Accounts Receivable - - - Accrued Interest Receivable - - - Other Recoverable Disbursements - - - Due from Other Funds 141,475 - 141,475

TOTAL ASSETS 1,138,865$ 45,849$ 1,184,714$

LIABILITIESAccounts Payable 290,566$ -$ 290,566$ Due to Other Funds - - - Other Liabilities - - - Deferred Revenue - - -

EQUITY Unreserved Fund Balances 848,299 45,849 894,148

TOTAL LIABILITIES AND FUND EQUITY 1,138,865$ 45,849$ 1,184,714$

Souderton Area School DistrictCombining Balance Sheet - All Capital Project Funds

As of June 30, 2009

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2005AACONSTRUCTION CONSTRUCTION

FUND FUND TOTAL

REVENUESLocal Sources 96,805$ 731$ 97,536$

OTHER FINANCING SOURCES Bond Proceeds - - - Bond Premium - - - Interfund Transfers - - -

TOTAL REVENUES AND OTHER FINANCINGSOURCES 96,805 731 97,536

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

EXPENDITURES AND OTHER FINANCING USESInstructional Services 118,080 - 118,080 Support Services 21,974 - 21,974 Non-Instructional Services 9,656 9,656 Capital Outlay 9,431,480 - 9,431,480 Debt Service - - - Bond Discount - - - Interfund Transfers - - -

TOTAL EXPENDITURES AND OTHERFINANCING USES 9,581,190 - 9,581,190

EXCESS OF REVENUES AND OTHER FINANCINGSOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (9,484,385) 731 (9,483,654)

FUND BALANCE - JULY 1, 2008 10,332,684 45,118 10,377,802

FUND BALANCE - JUNE 30, 2009 848,299$ 45,849$ 894,148$


Souderton Area School DistrictCombining Statement of Revenues, Expenditures, andChanges in Fund Balances - All Capital Project Funds

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Franconia Lower Salford Salford Souderton Telford Upper SalfordTownship Township Township Borough Borough Township Total

Current Real Estate TaxesAssessed Value 820,938,572$ 1,029,069,308$ 177,063,805$ 277,646,858$ 214,171,810$ 214,076,484$ 2,732,966,837$ Millage Rate 0.02446 0.02446 0.02446 0.02446 0.02446 0.02446 0.02446

Total Tax to be Collected 20,080,157 25,171,035 4,330,981 6,791,242 5,238,642 5,236,311 66,848,368 Less: Act 1 Deduction 671,436 676,708 134,507 256,185 182,036 161,631 2,082,503 Total Taxable Duplicate 19,408,721 24,494,327 4,196,474 6,535,057 5,056,606 5,074,680 64,765,865

Plus - Rollback Taxes 69,960 105,593 - - - - 175,553 Additions 394 2,293 185 1,707 - 33 4,612 Penalties 16,164 33,357 4,837 10,263 9,957 8,876 83,454

Total Taxes to be Collected 19,495,239 24,635,570 4,201,496 6,547,028 5,066,562 5,083,589 65,029,484

Less - Discounts 345,692 425,216 70,805 114,347 89,581 86,852 1,132,493 Reductions 19,550 - - - - - 19,550 Refunds - - 27,747 Returned to County 219,045 660,933 55,557 154,301 117,041 117,634 1,324,511 Exonerations - - - - - - - Outstanding - - - -

Net Current Real Estate Taxes Collected 18,910,952$ 23,549,421$ 4,075,134$ 6,278,380$ 4,859,940$ 4,879,103$ 62,525,183$

Current Interim Real Estate Taxes Collected 229,096$ 383,560$ 17,108$ 47,504$ 7,196$ 30,993$ 715,457$

Current Per Capita TaxesNo. of Persons Assessed 9,501 10,212 1,907 4,542 3,250 2,162 31,574 Tax Rate 10$ 10$ 10$ 10$ 10$ 10$ 10$ Taxable Valuation 95,010 102,120 19,070 45,420 32,500 21,620 315,740

Plus - Additions - - 260 2,110 330 - 2,700 Penalties 144 357 67 171 102 69 910

Taxes to be Collected 95,154 102,477 19,397 47,701 32,932 21,689 319,350

Less - Discounts 1,564 1,550 289 647 495 336 4,881 Exonerations 1,340 1,970 210 780 - 170 4,470 Refunds - - - - - - - NSF - - 11 - - - 11 Outstanding - - - - (1,680) - (1,680) Returned to County 3,910 3,530 660 5,070 3,910 690 17,770 Reductions 2,760 7,450 959 3,580 2,490 251 17,490

Net Current Per Capita Taxes Collected 85,580$ 87,977$ 17,268$ 37,624$ 27,717$ 20,242$ 276,408$

Souderton Area School DistrictGeneral Fund

Schedule on Tax Collectors' ReceiptsFor the Year Ended June 30, 2009

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REVENUESLOCAL SOURCES:

Current Real Estate Taxes 62,525,183$ Interim Real Estate Taxes 715,457 Public Utility 93,753 Payment in Lieu of Taxes 110,000 Current Per Capita Taxes - 511 138,204 Current Per Capita Taxes - 679 138,204 Earned Income Tax 5,977,680 Real Estate Transfer Tax 968,740 Amusement Taxes - Delinquent Real Estate Taxes 985,422 Delinquent Per Capita Taxes - 511 4,903 Delinquent Per Capita Taxes - 679 4,903 Delinquent Occupation Taxes - Interest 684,720 Fees 73,853 Revenue Received from I.S. - State 30,000 I/U Services - Federal 1,079,506 Rentals 38,033 Contributions 57,546 Regular Day School Tuition - Summer School 15,915 Adult Education Tuition 141,415 Receipts from Other LEA's - Education 78,007 Other Tuition From Patrons - Services Provided Other PA LEAs 2,176 Revenue from Community Services 447,872 Miscellaneous 160,460 Refunds of Prior Yr. Expenditures 50,744

TOTAL LOCAL SOURCE REVENUE 74,522,696$

STATE SOURCES:Basic Subsidy - ESBE 8,043,562 Read to Succeed - Charter Schools 432,586 Orphan Tuition 216,338 Homebound 2,326 Alternative Education 27,880 Migratory Children 160 Special Education 3,150,439

SUB-TOTAL 11,873,291


Statement of Revenue, Expenditures, and Changes in Fund BalanceFor the Year Ended June 30, 2009

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REVENUE (CONT'D)SUB-TOTAL (CARRIED FORWARD) 11,873,291$

Transportation 2,303,178 Rentals 966,886 Health Services 140,500 State Property Tax Reduction Allocation 2,082,501 Classrooms for the Future 71,780 Project 720 62,573 Accountability Grants 425,329 FICA Revenue 1,704,546 Retirement Revenue 1,051,235 Other State Grants -

TOTAL STATE SOURCE REVENUE 20,681,819$

FEDERAL SOURCES:Title I 544,080 Title IIA, IID 160,451 Title III 30,376 Medical Access 267,499 Drug Free 16,382

TOTAL FEDERAL SOURCE REVENUE 1,018,788 TOTAL REVENUE 96,223,303

EXPENDITURESRegular Programs - Elem./Secondary 38,634,168 Federally Funded Regular Programs 580,058 Special Education - Life Skills Support - Public 559,226 Life Skills Support - PRRI - Deaf or Hearing Impaired Support -

Blind or Visually Impaired Support - Speech & Language Impaired 566,984 Emotional Support - Public - Autistic Support 713,810 Learning Support - Public 5,189,056 Gifted Support 535,556 Physical Support - Multi-Handicapped Support 207,336 Development Delay Support - Early Intervention Support - Other Support 4,968,324

SUB-TOTAL 51,954,518



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SUB-TOTAL (CARRIED FORWARD) 51,954,518$ Business Education - Other Vocational Education Programs 1,771,442 Drivers' Education - Summer School 21,186 Homebound Instruction 61,538 Adjudicated/Court Placed Programs 27,699 Alternative Education Program - Additional Other Instructional Program 303,172 Other Adult Education Programs 183,090 Community College Programs - Supervision of Pupil Personnel Services 246,073 Guidance Services 1,671,419 Attendance Services 377,767 Psychological Services 445,641 Social Work Services 58,500 Other Pupil Personnel Services - Supervision of Educational Media Services 109,390 Technology Support Services 442,136 Educational Television Services - Computer Assisted Instruction Services - School Library Services 1,214,197 Instructional & Curriculum Dev. Service 695,839 Instructional Staff Development 282,181 Instructional Staff Development - Non-certified - Other Instructional Staff Services - Board Services 125,227 Board Treasurer Services - Tax Assessment & Collection Service 238,657 Staff Relations 55,193 Legal Services 512,994 Office of the Superintendent Services 291,711 Community Relations Services 109,287 Office of the Principal Services 3,266,562 Other Administration Services 71,312 Support Services - Health 790,433 Medical Services - Dental Services - Nursing Services - Non-Public Health Services - Support Services - Business 648,030

SUB-TOTAL 65,975,194$



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SUB-TOTAL (CARRIED FORWARD) 65,975,194$ Operation and Maintenance of Plant Services 7,329,883 Security Services 34,000 Student Transportation Services 7,401,220 Support Services - Central - Planning, Research, Development & Evaluation Svcs. 189 System-Wide Technology Services 123,065 Information Services 94,039 Staff Services 348,271 Data Processing Services 939,521 State and Federal Agency Liaison Services 31,201 Other Support Services 73,853 Pass-Thru Funds - Student Activities 57,607 School Sponsored Student Activities 43,060 School Sponsored Athletics - Community Services 477,771 Site Acquisition Services - Debt Service 13,762,281 Refund of Prior Yr. Receipts -

TOTAL EXPENDITURES 96,691,155$

EXCESS (DEFICIENCY) OF REVENUESOVER EXPENDITURES (467,852)$

OTHER FINANCING SOURCES (USES)Proceeds from Extended Term Financing - Sale of or Compensation for Loss of Fixed Assets 75 Debt Service Fund Transfers In - Transfer from Activity Funds - Special Revenue Fund Transfers Out (982,626) Capital Projects Funds Transfers Out - Debt Service Fund Transfers Out - Food Service Fund Transfers Out - Activity Fund Transfers Out -

TOTAL OTHER FINANCING SOURCES (USES) (982,551) Special Items - Extraordinary Items - (982,551)

NET CHANGE IN FUND BALANCE (1,450,403)

FUND BALANCE - JULY 1, 2008 12,442,461

FUND BALANCE - JUNE 30, 2009 10,992,058$



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FUND BALANCE - JULY 1, 2008 9,171,136$

REVENUES AND OTHER FINANCING SOURCESInterest 142,308$ Rentals - Transfer from General Fund 48,031 190,339

TOTAL FUNDS AVAILABLE 9,361,475

EXPENDITURESINSTRUCTIONAL SERVICES:

Equipment - SUPPORT SERVICES:

Professional Services - Repairs and Maintenance - Dues and Fees 617

CAPITAL OUTLAY:Professional Services 29,612 Repairs and Maintenance 1,425 Construction Services 1,661,931 Capitalized Equipment 116,859 Replacement Equipment 405,811 Miscellaneous - 2,216,255

FUND BALANCE - JUNE 30, 2009 7,145,220$

Souderton Area School DistrictCapital Reserve Fund

For the Year Ended June 30, 2009Statement of Revenues and Expenditures

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REVENUESStudent Sales 1,036,976$ Daily School Breakfast 29,202 Daily Adult Sales 34,709 Ala Carte - Lunch 398,427 Ala Carte - Breakfast 9,471 Special Events 86,727 Rebates 10,041 Summer Camp 29,893 State Subsidy 83,880 Federal Subsidy 393,212 Fica Revenue 28,249 Retirement Revenue 17,337 Non-Capital Contributions - Capital Contributions - Donated Commodities 164,062 Interest income 5,873

TOTAL REVENUES 2,328,059$

COST OF COMMODITIESBeginning Inventory 92,723 Purchases 1,136,809 Ending Inventory (143,417)

TOTAL COST OF COMMODITIES SOLD 1,086,115 GROSS PROFIT 1,241,944

- - - - - - - - - - -SALARY AND BENEFIT EXPENSES

Admin. 78,617 Clerical 32,984 Managers 233,861 Custodial/Maintenance 373,623 Benefits 221,734 940,819

OPERATING EXPENSESMaintenance & Support 6,969 Repairs and Maintenance 75,761 Printing 503 Insurance - Travel 4,220 Supplies 47,650 Processing Fees 34,537 Software 10,272 Dues and Fees 729 Depreciation 76,906 Uncapitalized Equipment 12,163 269,710

TOTAL EXPENSES 1,210,529

CHANGES IN NET ASSETS 31,415

NET ASSETS - JULY 1, 2008 1,275,993

NET ASSETS - JUNE 30, 2009 1,307,408$


Souderton Area School DistrictFood Service Fund

Statement of Revenues, Expenses, and Changes in Net Assets

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REVENUESFootball 40,431$ Girls - Volleyball 2,346 Boys - Volleyball 2,609 Boys - Soccer 1,845 Girls - Soccer 957 Boys Basketball 8,162 Girls Basketball 4,090 Wrestling 1,966 Boys Lacrosse 1,104 Girls Lacrosse 638 Water Polo 2,576 Interest 127 Fica Revenue 21,217 Retirement Revenue 9,990 Miscellaneous Revenue 7,097 105,155$

EXPENDITURES AND OTHER FINANCING USESSalaries 560,682 Employee Benefits 135,963 Professional Services 46,986 Officials 43,279 Repairs and Maintenance 16,584 Rentals 1,124 Transportation 104,657 Liability Insurance 4,140 Advertising 360 Printing 7,296 Travel 9,177 Workshops 648 Supplies 116,608 Books & Software 589 Equipment 35,888 Dues and Fees 13,841 1,097,822 EXCESS EXPENDITURES AND OTHER FINANCING

USES OVER REVENUES (992,667)

OTHER FINANCING SOURCESTransfer from General Fund 934,595

EXCESS REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES (58,072)

FUND BALANCE - JULY 1, 2008 49,689

FUND BALANCE - JUNE 30, 2009 (8,383)$

Souderton Area School DistrictAthletic Fund

Statement of Revenues and ExpendituresFor the Year Ended June 30, 2009

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REVENUES AND OTHER FINANCING SOURCESInterest 63,791$ Bond Premium - Transfer from General Fund - 63,791


EXPENDITURES AND OTHER FINANCING USESProfessional Services - Insurance - Printing - Swap Termination Fee 4,092,000 4,092,000

FUND BALANCE - JUNE 30, 2009 2,071$

FUND BALANCE - JULY 1, 2008 -$

REVENUES AND OTHER FINANCING SOURCESProceeds From Refunding Bond Issues 43,815,000$ Bond Premium 3,538,312 Transfer from General Fund - 47,353,312


EXPENDITURES AND OTHER FINANCING USESProfessional Services 374,711 Insurance 55,000 Printing 3,601 Bond Discount - Payment to Refunded Bonds Escrow Agent 46,920,000 Transfer to General Fund - 47,353,312

FUND BALANCE - JUNE 30, 2009 -$


2009 Bond Fund

Souderton Area School District

Statement of Revenues and Expenditures

Debt Service Payment FundStatement of Revenues and Expenditures


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REVENUES AND OTHER FINANCING SOURCESProceeds from Refunding Bond Issues 14,105,000$ Bond Premium 365,463 Interest income 21 14,470,484


EXPENDITURES AND OTHER FINANCING USESProfessional Services 145,049 Insurance 20,000 Printing 2,385 Bond Discount - Payment to Refunded Bonds Escrow Agent 14,297,694 Transfer to General Fund - 14,465,128



REVENUES AND OTHER FINANCING SOURCESProceeds from Refunding Bond Issues 8,095,000$ Bond Premium 225,432 Interest income 20 8,320,452


EXPENDITURES AND OTHER FINANCING USESProfessional Services 151,084 Insurance 15,000 Printing 1,369 Payment to Refunded Bonds Escrow Agent 8,147,916 Transfer to General Fund - 8,315,369


2009 AA Bond Fund

2009 A Bond FundStatement of Revenues and Expenditures





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REVENUES AND OTHER FINANCING SOURCESRefund of Prior Year Expenditures -$ Interest 96,805 96,805


EXPENDITURES AND OTHER FINANCING USESINSTRUCTIONAL:

Equipment 118,080 SUPPORT SERVICES:

Professional Services - Equipment 21,974

NON-INSTRUCTIONAL SERVICESEquipment 9,656

CAPITAL OUTLAY: Professional Services 1,001,722 Construction Services 7,950,641 Insurance 50,102 Advertising 148 Supplies 281 Technology Infrastructure 388,564 Equipment 39,535 Dues and Fees 487

DEBT SERVICE: Bond Discount -

INTERFUND TRANSFERS:Transfer to Construction Fund - 9,581,190


2005AA Construction FundSouderton Area School District

Statement of Revenues and ExpendituresFor the Year Ended June 30, 2009

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FUND BALANCE - JULY 1, 2008 45,118$

REVENUES AND OTHER FINANCING SOURCESInterest 731

TOTAL FUNDS AVAILABLE 45,849

EXPENDITURES AND OTHER FINANCING USESSUPPORT SERVICES:

Professional Services - Equipment - Miscellaneous -

CAPITAL OUTLAY: Professional Services - General Construction - Municipal Fees - Fire Protection - Equipment - Miscellaneous -

INTERFUND TRANSFERS:Transfer to Debt Service Fund - -



Souderton Area School DistrictConstruction Fund


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FISCAL YEAR INTEREST PRINCIPAL2009-10 2,245,745 5,000 2010-11 2,245,591 5,000 2011-12 2,245,431 5,000 2012-13 2,241,675 210,000 2013-14 2,200,000 1,520,000 2014-15 2,099,500 2,500,000 2015-16 1,971,250 2,630,000 2016-17 1,836,500 2,760,000 2017-18 1,671,750 3,830,000 2018-19 1,476,000 4,000,000 2019-20 1,271,000 4,200,000 2020-21 1,056,125 4,395,000 2021-22 831,000 4,610,000 2022-23 594,875 4,835,000 2023-24 347,250 5,070,000 2024-25 110,250 4,410,000

TOTAL OUTSTANDING 24,443,942$ 44,985,000$

FISCAL YEAR INTEREST PRINCIPAL2009-10 206,790$ 710,000$ 2010-11 182,490 730,000 2011-12 157,430 755,000 2012-13 131,528 780,000 2013-14 104,595 810,000 2014-15 76,212 835,000 2015-16 46,463 865,000 2016-17 15,662 895,000

TOTAL OUTSTANDING 921,170$ 6,380,000$

Souderton Area School DistrictSchedule on General Obligation Bonds - Series of 2005

Dated as of May 15, 2005For the Year Ended June 30, 2009

Schedule on General Obligation Bonds - Series of 2006Dated as of December 15, 2006


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FISCAL YEAR INTEREST PRINCIPAL2009-10 1,680,953$ 1,170,000$ 2010-11 1,802,212 1,040,000 2011-12 1,758,787 1,855,000 2012-13 1,684,150 2,675,000 2013-14 1,582,638 2,735,000 2014-15 1,471,738 2,810,000 2015-16 1,357,837 2,885,000 2016-17 1,240,937 2,960,000 2017-18 1,121,038 3,035,000 2018-19 997,437 3,145,000 2019-20 869,838 3,235,000 2020-21 725,694 3,345,000 2021-22 559,250 3,480,000 2022-23 381,750 3,620,000 2023-24 197,250 3,760,000 2024-25 51,625 2,065,000


FISCAL YEAR INTEREST PRINCIPAL2009-10 245,707$ 3,680,000$ 2010-11 252,825 3,995,000 2011-12 144,300 3,240,000 2012-13 61,875 2,255,000 2013-14 14,025 935,000

TOTAL OUTSTANDING 718,732$ 14,105,000$

Dated as of June 15, 2009For the Year Ended June 30, 2009

Schedule on General Obligation Bonds - Series of 2009Dated as of June 1, 2009



Schedule on General Obligation Bonds - Series A of 2009

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FISCAL YEAR INTEREST PRINCIPAL2009-10 207,313$ 95,000$ 2010-11 283,938 450,000 2011-12 270,213 465,000 2012-13 256,037 480,000 2013-14 241,413 495,000 2014-15 221,112 515,000 2015-16 199,544 535,000 2016-17 181,831 555,000 2017-18 162,750 575,000 2018-19 142,275 595,000 2019-20 120,331 615,000 2020-21 95,900 645,000 2021-22 69,700 665,000 2022-23 42,600 690,000 2023-24 14,400 720,000


Souderton Area School DistrictSchedule on General Obligation Bonds - Series AA of 2009

Dated as of June 15, 2009For the Year Ended June 30, 2009

S I N G L E A U D I T S E C T I O N

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GRANTORPASS ACCRUED OR ACCRUED OR

FEDERAL GRANTOR/ SOURCE CFDA THROUGH AWARD TOTAL (DEFERRED) EXPENDI- (DEFERRED)PROJECT TITLE CODE NUMBER NUMBER GRANT PERIOD AMOUNT RECEIVED AT 7/01/08 REVENUE TURES AT 6/30/09 FOOTNOTES

U. S. DEPARTMENT OF EDUCATIONPASSED THROUGH THE PA.DEPARTMENT OF EDUCATIONESEA - TITLE I IMPROVING BASIC PROGRAMS I 84.010 013-080392 7/1/07-9/30/08 487,241$ 161,927$ 48,573$ 113,354$ 113,354$ -$ ESEA - TITLE I IMPROVING BASIC PROGRAMS I 84.010 013-090392 7/1/08-9/30/09 414,154$ 331,323 - 350,505 350,505 19,182 ESEA - ACADEMIC ACHIEVEMENT AWARD I 84.010 077-090392 7/1/08-9/30/09 5,000$ 2,000 - 1,700 1,700 (300) ESEA - TITLE I - DELINQUENT I 84.010 107-080392 7/1/07-9/30/08 60,890$ 4,059 (1,612) 5,671 5,671 - ESEA - TITLE I - DELINQUENT I 84.010 107-090392 7/1/08-9/30/09 98,255$ 77,646 - 72,851 72,851 (4,795) ESEA - TITLE IIA IMPROVING TEACHER QUALITY I 84.367 020-080392 7/1/07-9/30/08 161,432$ 21,524 21,524 - - - ESEA - TITLE IIA IMPROVING TEACHER QUALITY I 84.367 020-090392 7/1/08-9/30/09 160,451$ 106,967 - 160,451 160,451 53,484 ESEA - TITLE III - LANGUAGE INSTRUCTION I 84.365 010-090392 7/1/08-9/30/09 47,603$ 19,835 - 30,376 30,376 10,541 DRUG FREE SCHOOLS I 84.186 100-090393 7/1/08-9/30/09 16,382$ 14,042 - 16,382 16,382 2,340

PASSED THROUGH THE MONTGOMERY COUNTY I.U.IDEA I 84.027 N/A 7/01/07 - 6/30/08 1,052,010$ 374,707 374,707 - - - 1IDEA I 84.027 N/A 7/01/08 - 6/30/09 1,048,360$ 958,452 - 1,048,360 1,048,360 89,908 1TITLE III - ENGLISH LANGUAGE ACQUISITION GRANT I 84.365 N/A 7/01/07 - 9/30/08 35,070$ 26,747 - 31,146 31,146 4,399 1

TOTAL U.S. DEPARTMENT OF EDUCATION 2,099,229 443,192 1,830,796 1,830,796 174,759

U.S DEPARTMENT OF HEALTH & HUMAN SERVICESPASSED THROUGH THE PA.DEPARTMENT OF PUBLIC WELFARETITLE 19 - MEDICAL REIMBURSMENT I 93.778 N/A 10/1/2007-9/30/08 N/A 2,395 - 2,395 2,395 -

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -U. S. DEPT. OF AGRICULTUREPASSED THROUGH THE PA.DEPT OF EDUCATIONNATIONAL SCHOOL LUNCH I 10.555 N/A 7/01/07 - 6/30/08 N/A - F 17,073 17,073 - - - 5NATIONAL SCHOOL LUNCH S N/A N/A 7/01/07 - 6/30/08 N/A 3,668 3,668 - - - NATIONAL SCHOOL LUNCH I 10.555 N/A 7/01/08 - 6/30/09 N/A - F 336,481 - 359,261 359,261 22,780 NATIONAL SCHOOL LUNCH S N/A N/A 7/01/08 - 6/30/09 N/A 63,350 - 67,529 67,529 4,179 BREAKFAST PROGRAM I 10.553 N/A 7/01/07 - 6/30/08 N/A - F 1,773 1,773 - - - 5BREAKFAST PROGRAM S N/A N/A 7/01/07 - 6/30/08 N/A 261 261 - - - BREAKFAST PROGRAM I 10.553 N/A 7/01/08 - 6/30/09 N/A - F 31,311 - 33,952 33,952 2,641 BREAKFAST PROGRAM S N/A N/A 7/01/08 - 6/30/09 N/A 4,285 - 4,634 4,634 349

PASSED THROUGH THE PADEPARTMENT OF AGRICULTUREUSDA COMMODITIES I 10.550 N/A 7/01/08 - 6/30/09 N/A 164,062 (53,447) 116,862 116,862 (100,647) 3 & 4

TOTAL U.S. DEPARTMENT OF AGRICULTURE 622,264 (30,672) 582,238 582,238 (70,698)

TOTAL AWARDS 2,723,888$ 412,520$ 2,415,429$ 2,415,429$ 104,061$

LESS: STATE SHARE (71,564) (3,929) (72,163) (72,163) (4,528)

TOTAL FEDERAL AWARDS 2,652,324$ 408,591$ 2,343,266$ 2,343,266$ 99,533$

SOUDERTON AREA SCHOOL DISTRICTSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

FISCAL YEAR ENDED JUNE 30, 2009

Souderton Area School District Notes to the Schedule of Expenditures of Federal Awards


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Note 1 - Significant Accounting Policies

The accompanying Schedule of Expenditures of Federal Awards is presented on the modified accrual basis of accounting for all federal awards charged to governmental funds and on the accrual basis of accounting for all federal awards charged to proprietary funds, as contemplated by generally accepted accounting principles.

Note 2- Organization and Scope

The District recognized 2.18% of its total general fund revenue in federal awards, and 23.94% of its total enterprise fund revenue.

Note 3 - Program Disclosure – Footnotes

U.S. Department of Education

1. The IDEA and Title III grants, passed through the Montgomery County I. U., are reflected as local source revenue in the basic financial statements, as per PDE instructions.

2. The Medical Access grant passed through the PA Department of Education is reflected as federal source revenue on the basic financial statements; however, pursuant to instructions from the Commonwealth of PA, it is not reported as revenue on the Schedule of Federal Awards.

U. S. Department of Agriculture

3. The District received non-monetary assistance of $164,062 in the form of commodities. These commodities are valued at U.S.D.A.’s approximate costs. During the 2008-09 fiscal year, the District used $116,862 in commodities and established a year end inventory of $100,647 at June 30, 2009.

4. The revenues reported on the SFA represent the commodities used versus the financial statements, which recognize commodity revenue when received.

5. The National School Lunch Program (CFDA No. 10.555), the National School Breakfast Program (CFDA No. 10.553), and USDA Commodities (CFDA No. 10.550) are considered a cluster program

General Fund Federal Source Revenues 1,018,788$ Federal Grants in Local Sources 1,079,506 Food Service Fund Federal Revenue 557,274

Total Federal Revenue, per financial statements 2,655,568

Less - Medical Access Reimbursement (2) (265,103) ADD - Indirect Costs - Change in Donated Commodities (47,199)

Federal Revenue on SEFA 2,343,266$

FINANCIAL STATEMENT RECONCILIATION

Souderton Area School District Schedule of Findings and Questioned Costs


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Section I – Summary of Auditor Results


Type of auditor's report issued: Unqualified

Internal control over financial reporting:

• Material weakness(es) Identified? yes no

• Significant Deficiencies identified that are not considered to be material weaknesses?

yes

none reported

Noncompliance material to financial statements noted?

yes no

Federal Awards

Internal control over major programs:

• Material weakness(es) Identified? yes no

• Significant Deficiencies identified that are not considered to be material weaknesses?

yes

none reported

Type of auditor's report issued on compliance for major programs: Unqualified

Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133?

yes

no

Identification of major program:

CFDA Number(s) Name of Federal Program or Cluster 84.027 IDEA 10.550* USDA Commodities 10.553* National School Breakfast 10.555* National School Lunch

*These programs are considered a cluster of programs in accordance with OMB Circular A-133.

Percentage of programs tested to total awards 66.5%

Dollar threshold used to distinguish between type A and type B program:

$ 300,000

Auditee qualified as low-risk auditee? yes no

Souderton Area School District Schedule of Findings and Questioned Costs


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Section II - Financial Statement Findings

There were no findings discovered, relating to the financial statements, which are required to be reported in accordance with generally accepted government auditing standards.

Section III - Financial Statement Findings

There were no findings discovered, relating to federal awards, which are required to be reported in accordance with OMB Circular A-133, Section 510. Audit Follow-Up Procedures We did not perform any follow-up procedures, since there were no findings in the previous year.

REPORT ON SOUDERTON AREA SCHOOL DISTRICT …€¦ · · 2017-12-15Expenditures, and Changes in...

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