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Audited Annual Financial Report Fiscal Year Ended June 30, 2019

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Audited Annual Financial Report Fiscal Year Ended June 30, 2019 LOS ANGELES UNIFIED SCHOOL DISTRICT LOS ANGELES, CALIFORNIA AUDITED ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2019 MR. AUSTIN BEUTNER SUPERINTENDENT OF SCHOOLS MS. MEGAN K. REILLY DEPUTY SUPERINTENDENT, BUSINESS SERVICES & OPERATIONS (EFFECTIVE JULY 8, 2019) MR. V. LUIS BUENDIA INTERIM CHIEF FINANCIAL OFFICER (EFFECTIVE SEPTEMBER 3, 2019) MR. SCOTT S. PRICE, PH.D. CHIEF FINANCIAL OFFICER (JULY 3, 2017 – AUGUST 31, 2019) MS. JOY MAYOR INTERIM CONTROLLER (EFFECTIVE OCTOBER 16, 2019) PREPARED BY ACCOUNTING AND DISBURSEMENTS DIVISION 333 S. BEAUDRY AVENUE LOS ANGELES, CALIFORNIA 90017 LOS ANGELES UNIFIED SCHOOL DISTRICT Audited Annual Financial Report Year Ended June 30, 2019 Table of Contents I N T R O D U C T O R Y S E C T I O N Page Letter of Transmittal ………………………………………………………………………………………………….…………………i Board of Education and Principal School District Officials ………………………………………………………………………..v Organizational Structure …………………………………………………………………………………………………………………………….vi F I N A N C I A L S E C T I O N Independent Auditor's Report ………………………………………………………………………………………………………………………………………..1 Management’s Discussion and Analysis …………………………………………………………………………………………………………….4 B a s i c F i n a n c i a l S t a t e m e n t s: G o v e r n m e n t - w i d e F i n a n c i al S t a t e m e n t s: Statement of Net Position …………………………………………………………………………………………………………………14 Statement of Activities ………………………………………………………………………………………………………………………….15 F u n d F i n a n c i a l S t a t e m e n t s: Balance Sheet – Governmental Funds ………………………………………………………………………………………..16 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position …………………………………………………………………………………….17 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ………………………………………………………….18 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities ……………………………………………………………………………………………………………………19 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund ……………………..………………………………………………………………………………………….20 Statement of Net Position – Proprietary Funds – Governmental Activities – Internal Service Funds ………………………21 Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds – Governmental Activities – Internal Service Funds ………………………………………………………………………………………………..22 Statement of Cash Flows – Proprietary Funds – Governmental Activities – Internal Service Funds ……………………….…….23 Statement of Net Position – Fiduciary Funds …………………………………………………………………………………………………24 Statement of Changes in Net Position – Fiduciary Funds …………………………………………………………………………………………………25 N o t e s t o B a s i c F i n a n c i a l S t a t e m e n t s ………………………………………………………………………………………………………………….26 R E Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N Schedule of Changes in the Net OPEB Liability and Related Ratios …………………………………………………………………………………………………75 Schedule of Changes in the Net Pension Liability and Related Ratios – Agent Multiple-Employer Defined Benefit Pension Plan – California Public Employees' Retirement System (Safety Plan) …………………………………………………………………………………………………76 Schedule of Contributions – Agent Multiple-Employer Defined Benefit Pension Plan – California Public Employees' Retirement System (Safety Plan) …………………………………………………………………………………………………77 Schedule of District Proportionate Share of the Net Pension Liability and Related Ratios and District Contributions – California Public Employees' Retirement System (Miscellaneous Plan) …………………………………………………………………………………………………78 Schedule of District Proportionate Share of the Net Pension Liability and Related Ratios and District Contributions – California State Teachers' Retirement System…………………………………………………………………………………………………79 Los Angeles Unified School District LOS ANGELES UNIFIED SCHOOL DISTRICT Audited Annual Financial Report Year Ended June 30, 2019 Table of Contents C o m b i n i n g a n d I n d i v i d u a l F u n d S c h e d u l e s a n d S t a t e m e n t s : Page District Bonds Fund – Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual………………………………………………………………………………………………………..80 Bond Interest and Redemption Fund – Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual………………………………………………………………………………………………………..81 N o n m a j o r G o v e r n m e n t a l F u n d s : Special Revenue Funds/Debt Service Funds/Capital Projects Funds: Nonmajor Governmental Funds – Combining Balance Sheet …………………………………………………………………………………………………………………………84 Nonmajor Governmental Funds – Combining Statement of Revenues, Expenditures, and Changes in Fund Balances …………………………...……...……………………..………………………………… 88 Special Revenue Funds – Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual …………………………...……...……………………..…………………………………92 Debt Service Funds – Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual …………………………...……...……………………..…………………………………96 Capital Projects Funds – Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual …………………………...……...……………………..…………………………………98 Internal Service Funds: Internal Service Funds – Combining Statement of Net Position ...………………………………………………………………………105 Internal Service Funds – Combining Statement of Revenues, Expenses, and Changes in Fund Net Position …………………………………………………………………………………………………..106 Internal Service Funds – Combining Statement of Cash Flows ……………..………………………………………………………………107 Fiduciary Funds: Fiduciary Funds – Agency Funds – Combining Statement of Changes in Assets and Liabilities ………….……………………………………………………..…………109 S U P P L E M E N T A R Y I N F O R M A T I O N Assessed Value of Taxable Property – Last Ten Fiscal Years ………………………………………………………………………………………………………………………….111 Largest Local Secured Taxpayers – Current Year and Nine Years Ago……………………………………………………………………………………………..112 Property Tax Levies and Collections – Last Ten Fiscal Years ……………………………………………………………………………………………………………………….113 Average Daily Attendance – Annual Report – Last Ten Fiscal Years ………………………………………………………………………………………………………….114 Organization Structure ……….……………………………………………………………………....…………………………………………………………116 Schedule of Average Daily Attendance ……….………………………..…………………………………………………………117 Schedule of Average Daily Attendance – Affiliated Charter Schools ……….………………………..…………………………………………………………118 Schedule of Instructional Time Offered ............................................................................................................................................122 Schedule of Financial Trends and Analysis ...........................................................................................................................................................123 Schedule to Reconcile the Annual Financial Budget Report (SACS) with Audited Financial Statements ………………………….124 Schedule of Charter Schools ……………………………..……….………………………………………………………………………….125 Notes to Supplementary Information ...........................................................................................................…………………………………130 Schedule of Expenditures of Federal Awards ......................................................................................................................... 131 Notes to Schedule of Expenditures of Federal Awards …............................................................................................................…………………………………134 Audited Annual Financial Report LOS ANGELES UNIFIED SCHOOL DISTRICT Audited Annual Financial Report Year Ended June 30, 2019 Table of Contents O T H E R I N D E P E N D E N T A U D I T O R R E P O R T S 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 ………………………..………….135 Report on Compliance for Each Major Federal Program and Report on Internal Control over Compliance ………………………..……………………………………………………….……………………………………………………….….137 Independent Auditor's Report on State Compliance .......................................................................................................................……………140 Schedule of Findings and Questioned Costs ...........................................................................................................…………….144 Status of Prior Year Findings and Recommendations ..........................................................................................…………… 188 Independent Auditor's Management Letter ........................................................………………………………………...…………………196 Los Angeles Unified School District INTRODUCTORY SECTION MEMBERS OF THE BOARD LOS ANGELES UNIFIED SCHOOL DISTRICT DR. RICHARD A. VLADOVIC, PRESIDENT AUSTIN BEUTNER MÓNICA GARCÍA Superintendent of Schools JACKIE GOLDBERG KELLY GONEZ MEGAN K. REILLY DR. GEORGE J. MCKENNA III Deputy Superintendent NICK MELVOIN SCOTT M. SCHMERELSON V. LUIS BUENDIA. Interim Chief Financial Officer JOY MAYOR Interim Controller December 13, 2019 The Honorable Board of Education Los Angeles Unified School District 333 South Beaudry Avenue Los Angeles, California 90017 Dear Board Members: The Audited Annual Financial Report of the Los Angeles Unified School District (District), for the fiscal year ended June 30, 2019, is hereby submitted. Responsibility for both the accuracy of the presented data and the completeness and fairness
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