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PRINCETON PUBLIC SCHOOLS Princeton, New Jersey PRINCETON PUBLIC SCHOOLS Princeton, New Jersey Princeton Public Schools Live to Learn, Learn to Live Comprehensive Annual Financial Report for the Year ended June 30, 2017 Princeton Public Schools Comprehensive Annual Financial Report For the Year Ended June 30, 2017 Princeton Public Schools Princeton, New Jersey Prepared by Princeton Public Schools Business Office Stephanie Kennedy Business Administrator, Board Secretary Table of Contents Page INTRODUCTORY SECTION Letter of Transmittal 1 Organizational Chart 7 Roster of Officials 8 Independent Auditors and Advisors 9 Certificate of Excellence 10 FINANCIAL SECTION Independent Auditors' Report 11 Required Supplementary Information - Part I Management's Discussion and Analysis 14 Basic Financial Statements Government-wide Financial Statements: A-1 Statement of Net Position 23 A-2 Statement of Activities 24 Fund Financial Statements: Governmental Funds: B-1 Balance Sheet 25 B-2 Statement of Revenues, Expenditures, and Changes in Fund Balances 26 B-3 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 27 Enterprise Fund: B-4 Statement of Net Position 28 B-5 Statement of Revenues, Expenses and Changes in Fund Net Position 29 B-6 Statement of Cash Flows 30 Fiduciary Funds: B-7 Statement of Fiduciary Net Position 31 B-8 Statement of Changes in Fiduciary Net Position 32 Notes to the Basic Financial Statements 33 (i) Table of Contents (continued) Page FINANCIAL SECTION (continued) Required Supplementary Information and Note to the RSI- Part II Schedule of the District's Proportionate Share of the Net Pension Liability- Public Employee's Retirement System (PERS) 71 Schedule of District Contributions - Public Employee's Retirement System (PERS) 72 Schedule of State's Proportionate Share of the Net Pension Liability Liability Associated with the District - Teacher's Pension and Annuity Fund (TP AF) 73 Required Supplementary Information - Part III Budgetary Comparison Schedules: C-1 Budgetary Comparison Schedule - General Fund - Budgetary Basis 74 C-la Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Budgetary Basis - Not Applicable NI A C-1 b Community Development Block Grant Program - Budget and Actual -Budgetary Basis -Not Applicable NIA C-2 Budgetary Comparison Schedule - Special Revenue Fund - Budgetary Basis 80 Note to the Required Supplementary Information C-3 Budget to GAAP Reconciliation 81 Supplementary Information D School Based Budget Schedules NIA Special Revenue Fund: E-1 Combining Schedule of Program Revenues and Expenditures - Budgetary Basis 82 E-2 Schedule of Preschool Education Aid Expenditures - Budgetary Basis 84 Capital Projects Fund: F-1 Summary Schedule of Project Revenues, Expenditures, Project Balance and Project Status - Budgetary Basis 85 F-la- Schedule of Project Revenues, Expenditures, Project Balance and F-lf Project Status -Budgetary Basis 86 F-2 Summary Schedule of Project Expenditures 92 Enterprise Fund: G-1 Statement of Net Position NIA G-2 Statement of Revenues, Expenses, and Changes in Fund Net Position NIA G-3 Statement of Cash Flows NIA (ii) Table of Contents (continued) Page FINANCIAL SECTION (continued) Supplementary Information ( continued) Fiduciary Funds: H-1 Combining Statement of Fiduciary Net Position 93 H-2 Combining Statement of Changes in Fiduciary Net Position 94 H-3 Schedule of Cash Receipts and Cash Disbursements - Student Activity Agency Fund 95 H-4 Schedule of Cash Receipts and Cash Disbursements - 96 Payroll Agency Fund Long-Term Debt: I-1 Schedule of Serial Bonds Payable 97 I-2 Schedule of Obligations Under Capital Leases - Not Applicable NIA I-3 Budgetary Comparison Schedule-Debt Service Fund 98 STATISTICAL SECTION -Other Information (Unaudited) Financial Trends: J-1 Net Position by Component 99 J-2 Changes in Net Position 100 J-3 Fund Balances, Governmental Funds 102 J-4 Changes in Fund Balances, Governmental Funds 103 J-5 General Fund Other Local Revenues by Source 104 Revenue Capacity: J-6 Assessed Value and Actual Value of Taxable Property 105 J-7 Property Tax Rates - Direct and Overlapping Governments 106 J-8 Principal Property Tax Payers 108 J-9 Property Tax Levies and Collections 109 Debt Capacity: J-10 Ratios of Outstanding Debt by Type 111 J-11 Ratios of Net General Bonded Debt Outstanding 112 J-12 Ratios of Overlapping Governmental Activities Debt 113 J-13 Legal Debt Margin Information 114 Demographic and Economic Information: J-14 Demographic and Economic Statistics 115 J-15 Principal Employers 116 J-16 Full-Time Equivalent District Employees by Function/Program 117 Operating Information: J-17 Operating Statistics 118 J-18 School Building Information 119 J-19 Schedule of Required Maintenance for School Facilities 120 J-20 Insurance Schedule 121 (iii) Table of Contents ( continued) SINGLE AUDIT SECTION K-1 Report on Internal Control Over Financial Reporting and Report on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 123 K-2 Report on Compliance For Each Major Federal and State Program and on Internal Control Over Compliance Required by the Uniform Guidance and New Jersey 0MB Circular 15-08 125 K-3 Schedule A- Schedule of Expenditures of Federal Awards- Supplementary Information 128 K-4 Schedule B- Schedule of Expenditures of State Financial Assistance - Supplementary Information 129 K-5 Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance 130 K-6 Schedule of Findings and Questioned Costs -Part I- Summary of Auditors' Results 133 K-7 Schedule of Findings and Questioned Costs - Parts II and III - Schedule of Financial Statement Findings and Schedule of Federal Award and State Financial Assistance Findings and Questioned Costs 135 K-8 Summary Schedule of Prior Year Audit Findings 137 (iv) Introductory Section Princeton Public Schools Stephanie Kennedy, Business Administrator/Board Secretary 25 Valley Road, Princeton, New Jersey 08540 t 609.806.4204 f 609.806.4225 Live to learn, learn to Live October 18, 2017 Honorable President and Members of the Princeton Board of Education Princeton Public Schools County of Mercer Princeton, New Jersey Dear Board Members and Constituents: The Comprehensive Annual Financial Report ("CAFR") of the Princeton Public Schools (hereinafter, the "District") as of and for the year ended June 30, 2017, is hereby submitted. Responsibility for both the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the management of the Board of Education ("Board"). To the best of our knowledge and belief, the data presented in this report is accurate in all material respects and is reported in a manner designed to present fairly the financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund infmmation at June 30, 2017, and the respective changes in financial position and cash flows, where applicable, for the year then ended. All disclosures necessary to enable the reader to gain an understanding of the District's financial activities have been included. The CAFR is presented in four sections: introductory, financial, statistical, and single audit. The introductory section includes this transmittal letter (designed to complement Management's Discussion and Analysis and should be read in conjunction with it), the District's organizational chart, a roster of officials, independent auditors and advisors and the certificate of excellence in financial reporting. The financial section includes Management's Discussion and Analysis, basic financial statements, required supplementary information and supplementary information, as well as the auditors' report thereon. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis and is unaudited. The District is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act, the Uniform Guidance and the New Jersey 0MB Circular 15-08, "Single Audit Policy for Recipients of Federal Grants, State Grants, and State Aid Payments." Information related to this single audit, including the independent auditors' reports on internal control and compliance with applicable laws and regulations and findings and questioned costs, is included in the single audit section of this report. 1 1. Reporting Entity and Its Services The Princeton Public Schools is an independent reporting entity within the criteria adopted by the Governmental Accounting Standards Board (GASB). All funds and the government-wide financial statements of the District are included in this report. The Princeton Board of Education and all its schools constitute the District's reporting entity. The District provides a full range of educational services appropriate to grade levels PK through 12. These include regular education as well as special education for disabled students. The District sends its vocational students to county vocational schools, which are more suited to provide that form of educational program. The District completed the 2016-2017 fiscal year with an average daily enrollment of3,724 students, which is 171 students more than the previous year's average daily enrollment. The following chart details the changes in the average daily student enrollment of the District over the last five years: Average Daily Enrollment Fiscal Student
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