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Carteret Board of Education CARTERET BOARD OF EDUCATION COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30,2014 CARTERET, NEW JERSEY COMPREHENSIVE ANNUAL FINANCIAL REPORT of the Carteret Board of Education Carteret, New Jersey For The Fiscal Year Ended June 30,2014 Prepared by the The Business Office CARTERET BOARD OF EDUCATION TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal 1-X Organizational Chart xi Roster of Officials xii Consultants and Advisors xiii FINANCIAL SECTION Independent Auditor's Report 1-3 REQUIRED SUPPLEMENTARY INFORMATION- PART I Management's Discussion and Analysis 4-16 Basic Financial Statements A. District-wide Financial Statements A-1 Statement of Net Position 17 A-2 Statement of Activities 18-19 B. Fund Financial Statements Governmental Funds B-1 Balance Sheet 20-21 B-2 Statement of Revenues, Expenditures, and Changes in Fund Balances 22 B-3 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances with the District-Wide Statements 23 Proprietary Funds B-4 Statement of Net Position 24 B-5 Statement of Revenues, Expenses, and Changes in Net Position 25 B-6 Statement of Cash Flows 26 Fiduciary Funds B-7 Statement of Fiduciary Net Position 27 B-8 Statement of Changes in Fiduciary Net Position 28 Notes to the Basic Financial Statements 29-59 REQUIRED SUPPLEMENTARY INFORMATION -PART II C. Budgetary Comparison Schedules C-1 Budgetary Comparison Schedule -General Fund 60-67 C-IA Combining Schedule of Revenues, Expenditures and Changes in Fund Balance­ Budget and Actual- Not Applicable 68 C-2 Budgetary Comparison Schedule - Special Revenue Fund 69 C-3 Notes to the Required Supplementary Information- Budget to GAAP Reconciliation 70 CARTERET BOARD OF EDUCATION TABLE OF CONTENTS OTHER SUPPLEMENTARY INFORMATION D. School Level Schedules- Not Applicable E. Special Revenue Fund E-1 Combining Schedule of Program Revenues and Expenditures Special Revenue Fund- Budgetary Basis 71-73 E-2 Preschool Education Aid Schedule of Expenditures- Budgetary Basis 74 F. Capital Projects Fund F-1 Summary Schedule of Project Expenditures 75 F-2 Summary Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budgetary Basis 76 F-2a Schedule of Project Revenues, Expenditures, Project Balances and Project Status­ Budgetary Basis 77 G. Enterprise Fund G-1 Statement of Net Position 78 G-2 Statement of Revenues, Expenses and Changes in Net Position 79 G-3 Statement of Cash Flows 80 H. Fiduciary Funds H-1 Combining Statement of Net Position 81 H-2 Combining Statement of Changes in Net Position- Not Applicable 82 H-3 Student Activity Agency Fund Schedule of Receipts and Disbursements 82 H-4 Payroll Agency Fund Schedule of Receipts and Disbursements 83 I. Long-Term Debt 1-1 Schedule of Bonds Payable 84 1-2 Schedule of Obligations Under Certificates of Participation 85 1-3 Schedule of Capital Leases 86 1-4 Debt Service Fund Budgetary Comparison Schedule 87 CARTERET BOARD OF EDUCATION TABLE OF CONTENTS J. STATISTICAL SECTION (Unaudited) Introduction to the Statistical Section Financial Trends J-1 Net Position by Component 88 J-2 Changes in Net Position 89-90 J-3 Fund Balances- Governmental Funds 91 J-4 Changes in Fund Balances- Governmental Funds 92 J-5 General Fund Other Local Revenue by Source 93 Revenue Capacity J-6 Assessed Value and Actual Value of Taxable Property 94 J-7 Direct and Overlapping Property Tax Rates 95 J-8 Principal Property Taxpayers 96 J-9 Property Tax Levies and Collections 97 Debt Capacity J-1 0 Ratios of Outstanding Debt by Type 98 J-11 Ratios of Net General Bonded Debt Outstanding 99 J-12 Direct and Overlapping Government Activities Debt 100 J-13 Legal Debt Margin Information 101 Demographic and Economic Information J-14 Demographic and Economic Statistics 102 J-15 Principal Employers 103 Operating Information J-16 Full Time Equivalent District Employees by Function/Program 104 J-17 Operating Statistics 105 J-18 School Building Information 106 J-19 Schedule of Required Maintenance for School Facilities 107 J-20 Schedule oflnsurance 108 SINGLE AUDIT SECTION K-1 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards - Independent Auditor's Report 109-110 K-2 Report on Compliance for each Major Federal and State Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by U.S. OMB Circular A-133 and Schedule of Expenditures of State Financial Assistance as Required by New Jersey OMB Circular 04-04- Independent Auditor's Report 111-113 K-3 Schedule of Expenditures of Federal Awards 114-115 K-4 Schedule of Expenditures of State Financial Assistance 116 K-5 Notes to the Schedules of Expenditures of Federal Awards and State Financial Assistance 117-118 K-6 Schedule of Findings and Questioned Costs 119-124 K-7 Summary Schedule of Prior Year Audit Findings 125 INTRODUCTORY SECTION Carteret Board ofEducation 599 Roosevelt Avenue Carteret, New Jersey 07008-2199 Nilkanth Patel Tel: (732) 541 8960 Business Administrator/Board Secretary Fax: (732) 541 7028 December 4, 2014 Honorable President Mr. Jerome Mitchell Members of the Carteret Board of Education 599 Roosevelt Ave. Carteret, NJ 07008 Dear President and Members ofthe Board of Education: State Department of Education statutes require all school districts to prepare a complete set of financial statements presented in conformity with Generally Accepted Accounting Principles (GAAP) in the United States of America and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR) of the Carteret Board of Education for the fiscal year ended June 30, 2014. This report consists of management's representations concerning the finances of the Cruieret Board of Education. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, the Carteret Board of Education has established a comprehensive internal control framework that are designed both to protect the school district's assets from loss, theft, or misuses and to compile sufficient reliable information for the prepru·ation of the Carteret Board of Education's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Carteret Board of Education's comprehensive framework of internal controls are designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Lerch, Vinci & !-Iiggins, LLP, a firm of licensed certified public accountants and public school accountants, have .audited the Cruieret Board of Education's financial statements. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Carteret Board of Education for the fiscal yeru· ended Jtme 30, 2014, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the Carteret Board of Education's financial statements, for the fiscal year ended June 30, 2014, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the Carteret Board of Education was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal and state grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards and state financial assistance. These reports are available in the Single Audit Section of the Carteret Board of Education's CAFR. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The Carteret Board of Education's MD&A can be found immediately following the report of the independent auditor's. REPORT FORMAT The Comprehensive Annual Financial Report is presented in four sections: Introductory, Financial, Statistical and Single Audit. The purpose of each section of the CAFR is as follows: • Introductory Section - This section includes this transmittal letter, the District's organization chart and a list of principal officials. This section is intended to familiarize the reader
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