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Document Accessibility If you have a disability and the format of any material on our web pages interferes with your ability to access the information or you have a question regarding the School District’s website accessibility, please contact us via any of the following means for assistance: The School District of Philadelphia Office of Family and Community Engagement 440 N. Broad Street, Suite 114 Philadelphia, PA 19130-4015 Email: [email protected] Tel: (215) 400-4000 Fax: (215) 400-4181 To help us respond in a manner most helpful to you, please indicate the nature of the accessibility problem, the web address of the requested material, your preferred format in which you want to receive the material (electronic format (ASCII, etc.), standard print, large print, etc.), and your contact information (name, email, telephone, and physical mailing address). THE COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE SCHOOL DISTRICT OF PHILADELPHIA A COMPONENT UNIT OF THE CITY OF PHILADELPHIA, PENNSYLVANIA YEAR ENDED JUNE 30, 2017 SCHOOL DISTRICT OF PHILADELPHIA, PENNSYLVANIA 440 N. BROAD STREET, PHILADELPHIA, PENNSYLVANIA 19130 COMPREHENSIVE ANNUAL FINANCIAL REPORT A COMPONENT UNIT OF THE CITY OF PHILADELPHIA, PENNSYLVANIA YEAR ENDED JUNE 30, 2017 Marcy F. Blender, CPA Comptroller Prepared by Office of General Accounting STUDENT ART The art displayed throughout this report is the work of the School District of Philadelphia’s art students. The winners were chosen from the entries submitted for the 2017 Annual Accounting Cover Design Contest. The theme for this year is “Helping Our Neighbors”. In view of the back-to-back to back natural disasters that have befallen our country, the young and old and everybody in between have stepped up to help! Students, teachers, administrators, parents, the community and religious organizations have found many ways to help those who have been affected by the recent unusual weather conditions be they friends, neighbors, community members or those in need across our nation. First responders and average citizens alike worked tirelessly to save many lives. This contest theme provides a unique opportunity for students to challenge their intellect, imagination and creativity to visually express their ideas, influence and experiences that these natural disasters have had on their lives and how they relate to all Americans. It also provides an opportunity to research weather and the scientific causes of hurricanes. The winners are as follows: STUDENT ART TEACHER 1st Prize Jessica Cameron Ms. Marsha Rosenthal Front Cover Northeast High School Grade 12 2nd Prize Nga Yee Lam Ms. Marsha Rosenthal Back Cover Northeast High School Grade 9 3rd Prize Divider: 1st Susan Zheng Ms. Marsha Rosenthal Northeast High School Grade 11 Christian Zagabe Mrs. Janis Hill Woodrow Wilson Middle School Grade 7 2nd Samia Ria Ms. Marsha Rosenthal Northeast High School Grade 10 Khaled Kalafalla Mrs. Janis Hill Woodrow Wilson Middle School Grade 6 3rd Marlene Dalakishvili Ms. Marsha Rosenthal Northeast High School Grade 12 Destinee Sherrod Mrs. Janis Hill Woodrow Wilson Middle School Grade 7 Ms. Deborah Klose, Director of Arts Education Office of Arts and Academic Enrichment Introductory Section SCHOOL DISTRICT OF PHILADELPHIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS I. INTRODUCTORY SECTION Page Letter of Transmittal 1-7 Certificate of Achievement for Excellence in Financial Reporting, Government Finance Officers Association 8 Certificate of Excellence in Financial Reporting, Association of School Business Officials 9 Organizational Chart 10 List of Principal Officials 11 II. FINANCIAL SECTION Independent Auditor’s Report 13-15 A. Management’s Discussion and Analysis 16-32 B. Basic Financial Statements 33 District-Wide Financial Statements Statement of Net Position 34 Statement of Activities 35 Governmental Funds Financial Statements Balance Sheet 36-37 Reconciliation of the Balance Sheet for Governmental Funds to the Statement of Net Position 38 Statement of Revenues, Expenditures, and Changes in Fund Balances 40-41 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 42 Proprietary Funds Financial Statements Statement of Net Position 43 Statement of Revenues, Expenses, and Changes in Fund Net Position 44 Statement of Cash Flows 45 Fiduciary Funds Financial Statements Statement of Net Position 46 Statement of Changes in Fiduciary Net Position 47 Notes to the Basic Financial Statements 49-86 - I - SCHOOL DISTRICT OF PHILADELPHIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS Page II. FINANCIAL SECTION, CONT. C. Required Supplementary Information other than Management’s Discussion & Analysis 87 Budgetary Comparison Schedules General and Intermediate Unit Funds 88-89 Other Postemployment and Pension Required Schedules 90 Notes to the Required Supplementary Information 91-92 D. Other Supplementary Information 93 Non-Major Governmental Funds 94 Combining Balance Sheet 95 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 96 Governmental Funds 97 Schedule of Detailed Budgetary and Actual Revenues – General Fund 98 Schedule of Budgetary and Actual Organizational Unit Obligations By Object Class and Uses – General Fund 99- 105 Schedule of Budgetary and Actual Revenues and Organizational Unit Obligations By Object Class and Uses – Intermediate Unit Fund 106-107 Schedule of Budgetary and Actual Revenues and Organizational Unit Obligations By Object Class and Uses – Debt Service Fund 108 Schedule of Budgetary and Actual Revenues and Organizational Unit Obligations By Object Class and Uses – Capital Projects Fund 109 Fiduciary Funds 111 Combining Statement of Fiduciary Net Position - Agency Funds 112 Combining Statement of Changes in Assets and Liabilities - Agency Funds 113 Schedule of Bonds Outstanding 114-116 -II - SCHOOL DISTRICT OF PHILADELPHIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS Page III. STATISTICAL SECTION Statistical Section 117 Financial Trends: Table 1 Net Position by Component For the Fiscal Years 2008 through 2017 118 Table 2 Expenses, Program Revenues, and Net (Expense)/Revenue For the Fiscal Years 2008 through 2017 119 Table 3 Net (Expenses)/Revenue, General Revenues, and Total Change in Net Position For the Fiscal Years 2008 through 2017 120 Table 4 Fund Balances of Governmental Funds For the Fiscal Years 2008 through 2017 121 Table 5 Governmental Funds Revenues For the Fiscal Years 2008 through 2017 122 Table 6 Governmental Funds Expenditures and Debt Service Ratio For the Fiscal Years 2008 through 2017 123 Table 7 Other Financing Sources and (Uses) and Net Change in Fund Balance Governmental Funds For the Fiscal Years 2008 through 2017 124 Revenue Capacity: Table 8 Governmental Funds Revenue By Own-Sources For the Fiscal Years 2008 through 2017 125 Table 9 Assessed and Estimated Actual Market Value of Taxable Property For the Calendar Years 2008 through 2017 126 Table 10 Property Tax Rates – All Direct and Overlapping Governments For the Calendar Years 2008 through 2017 127 Table 11 Principal Property Taxpayers Current Calendar Year and Nine Years Ago 128 Table 12 Real Estate Tax Levies and Collections For the Years 2008 through 2017 129 Debt Capacity: Table 13 Ratios of Outstanding Debt by Type For the Fiscal Years 2008 through 2017 130 Table 14 Ratios of Net General Bonded Debt Outstanding For the Fiscal Years 2008 through 2017 131 Table 15 Direct and Overlapping Governmental Activities Debt As of June 30, 2017 132 Table 16 Legal Debt Margin Information For the Fiscal Years 2008 through 2017 133 Table 17 Ratio of Annual Debt Service for General Bonded Debt and Authority Payments To Total Governmental Funds Expenditures Excluding Categorical Funds For the Fiscal Years 2008 through 2017 134 Demographic and Economic Information Table 18 Demographic and Economic Statistics For the Calendar Years 2008 through 2017 135 Table 19 Principal Employers Current Calendar Year and Nine Years Ago 136 Operating Information Table 20 School District Employees by Function For the Fiscal Years 2008 through 2017 137 Table 21 Operating Statistics For the Fiscal Years 2008 through 2017 138 Table 22 Miscellaneous Statistics For the Fiscal Years 2008 through 2017 139 Table 23 Teacher Base Salaries For the Calendar Years 2008 through 2017 140 Table 24 Capital Asset Information For the School Year 2016-2017 141 -III - THIS PAGE INTENTIONALLY LEFT BLANK -IV- THE SCHOOL DISTRICT OF PHILADELPHIA OFFICE OF THE SUPERINTENDENT 440 NORTH BROAD STREET, SUITE 301 PHILADELPHIA, PENNSYLVANIA 19130 WILLIAM R. HITE, JR., Ed.D. TELEPHONE (215) 400-4100 SUPERINTENDENT FAX (215) 400-4104 February 13, 2018 To the Members of the School Reform Commission, Honorable Mayor and Citizens of the City of Philadelphia: We are pleased to present this Comprehensive Annual Financial Report (“CAFR”) of The School District of Philadelphia (“School District” or “District”) for the Fiscal Year ended June 30, 2017. Pursuant to provisions of The Philadelphia Home Rule Charter (“Charter”), these financial statements were prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States of America. As such, management of the School District assumes full responsibility for the completeness and reliability of all information presented in this report and provides reasonable assurance that