MORRIS SCHOOL DISTRICT MORRIS SCHOOL DISTRICT BOARD OF EDUCATION COUNTY OF MORRIS MORRISTOWN, NEW JERSEY COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2017 MORRIS SCHOOL DISTRICT COUNTY OF MORRIS, NEW JERSEY COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS PAGE(S) INTRODUCTORY SECTION I Letter of Transmittal 2 - 11 Organizational Chart 12 Roster of Officials 13 Consultants and Advisors 14 FINANCIAL SECTION 15 Independent Auditor's Report 16 - 18 Required Supplementary Information - Part I 19 Management's Discussion and Analysis 20-30 Basic Financial Statements 31 A. District-wide Financial Statements 32 A- 1 Statement of Net Position 33 A- 2 Statement of Activities 34 B. Fund Financial Statements 35 Governmental Funds: 36 B- 1 Balance Sheet 37 - 38 B-2 Statement of Revenues, Expenses, and Change in Fund Balances 39 B-3 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 40 Proprietary Funds: 41 B-4 Statement ofNet Position 42 B-5 Statement of Revenues, Expenses, and Changes in Net Position 43 B-6 Statement of Cash Flows 44 MORRIS SCHOOL DISTRICT COUNTY OF MORRIS, NEW JERSEY COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2016 TABLE OF CONTENTS PAGE(S) Fiduciary Funds: 45 B- 7 Statement of Fiduciary Net Position 46 B- 8 Statement of Changes in Fiduciary Net Position 47 Notes to the Financial Statements 48 - 81 Required Supplementary Information - Part II 82 C. Budgetary Comparison Schedules 83 C-1 Budgetary Comparison Schedule - General Fund 84 - 99 C- la Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual NIA C- lb American Recovery and Reinvestment Act - Budget and Actual NIA C-2 Budgetary Comparison Schedule - Special Revenue Fund 100 - 101 Notes to the Required Supplementary Information - Part II 102 C- 3 Budgetary Comparison Schedule - Note to RSI 103 Required Supplementary Information - Part III 104 L. Schedules Related to Accounting and Reporting for Pensions (GASB 68) 105 L- 1 Schedule of the District's Proportionate Share of the Net Pension Liability - PERS 106 L-2 Schedule of District Contributions - PERS 107 L-3 Schedule of the District's Proportionate Share of the Net Pension Liability - TPAF 108 Notes to Required Supplementary Information - Part III 109 Notes to Required Supplementary Pension Information 110 Other Supplementary Information 111 D. School Level Schedules: 112 D- 1 Combining Balance Sheet NIA D-2 Blended Resource Fund - Schedule of Expenditures Allocated by Resource Type - Actual NIA D-3 Blended Resource Fund - Schedule of Blended Expenditures NIA D-4 Schedule ofDEOA Expenditures - Budget and Actual NIA MORRIS SCHOOL DISTRICT COUNTY OF MORRIS, NEW JERSEY COMPREHENSIVE i\NNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS PAGE(S) E. Special Revenue Fund: 113 E- 1 Combining Schedule of Revenues and Expenditures Special Revenue Fund - Budgetary Basis 114-118 E- 2 Demonstrably Effective Program Aid Schedule of Expenditures - Budgetary Basis 119 E- 3 Early Childhood Program Aid Schedule of Expenditures - Budgetary Basis NIA E- 4 Distance Leaming Network Aid Schedule of Expenditures - Budgetary Basis NIA E- 5 Instructional Supple1pent Aid Schedule of Expenditures - Budgetary Basis NIA F. Capital Projects Fund: 120 F- I Summary Statement of Project Expenditures 121 F- 2 Summary Schedule of Revenues, Expenditures, and Change in Fund Balance - Budgetary Basis 122 F- 2a Schedule of Project Revenues, Expenditures, Project Balance and Project Status - Budgetary Basis - MHS Expansion 123 F- 2b Schedule of Project Revenues, Expenditures, Project Balance and Project Status - Budgetary Basis - MHS Fire Alarm Upgrade 124 F - 2c Schedule of Project Revenues, Expenditures, Project I3alance and Project Status - Budgetary Basis - FMS Partial Roof 125 F- 2d Schedule of Project Revenues, ExpendituresLProject Balance and Project Status - Budgetary Basis - MHS Auditorium Lighting 126 F- 2e Schedule of Project Revenues, Expenditures, Project Balanc~ and Project Status - Budgetary Basis - MHSISX Gym Bleachers 127 F- 2f Schedule of Project Revenues, Expenditures, Project Balance and Project Status - Budgetary Basis - MHS Grandstand 128 F- 2g Schedule of Project Revenues, Expenditures, Project Balance and Project Status - Budgetary Basis - MHS Parking Lot 129 G. Proprietary Funds: 130 Enterprise Fund: 131 G- I Combining Statement of Net Position 132 G- 2 Combining Statement of Revenues, Expenses and Changes in Net Position 133 G-3 Combining Statement of Cash Flows 134 MORRIS SCHOOL DISTRICT COUNTY OF MORRIS, NEW JERSEY COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS PAGE(S) Internal Service Fund: 135 G-4 Combining Statement of Net Assets NIA G-5 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets NIA G-6 Combining Statement of Cash Flows NIA H. Fiduciary Funds: 136 H- l Combining Statement of Fiduciary Net Position 137 H-2 Combining Statement of Changes in Fiduciary Net Position 138 H-3 Schedule of Receipts and Disbursements - Student Activity Agency Fund 139 H-4 Schedule of Receipts and Disbursements - Payroll Agency Fund 140 I. Long-Term Debt: 141 I- l Schedule of Serial Bonds 142 I- 2 Schedule of Obligations Under Capital Leases 143 I- 3 Budgetary Comparison Schedule - Debt Fund Service 144 STATISTICAL SECTION (Unaudited) 145 Financial Trends 146 J- l Net Position/Net Assets by Component 147 J- 2 Changes in Net Assets/Net Position 148 - 149 J- 3 Fund Balances, Governmental Funds 150 J- 4 Change in Fund Balances, Governmental Funds 151 J- 5 General Fund - Other Local Revenue by Source 152 Revenue Capacity 153 J- 6 Assessed Value and Actual Value of Taxable Property 154 J- 7 Direct and Overlapping Property Tax Rates 155 J- 8 Principal Property Taxpayers 156 J- 9 Property Tax Levies and Collections 157 MORRIS SCHOOL DISTRICT COUNTY OF MORRIS, NEW JERSEY COMPREHENSIVE ANNUAL FINANCIAL REPORT JUNE 30, 2017 TABLE OF CONTENTS PAGE(S) STATISTICAL SECTION (Unaudited) (Cont'd.) Debt Ca pa city 158 J-10 Ratios of Outstanding Debt by Type 159 J-11 Ratios of Net General Bonded Debt Outstanding 160 J-12 Direct and Overlapping Governmental Activities Debt 161 J-13 Legal Debt Margin Information 162 Demographic and Economic Information 163 J-14 Demographic and Economic Statistics 164 J-15 Principal Employers 165 Operating Information 166 J-16 Full-time Equivalent District Employees by Function/Program 167 J-17 Operating Statistics 168 J-18 School Building Information 169-170 J-19 Schedule of Required Maintenance 171 J-20 Insurance Schedule 172 SINGLE AUDIT SECTION 173 K- 1 Report 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 174-175 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 and State Financial Assistance Required by the Uniform Guidance and New Jersey 0MB Circular 15-08 176 - 178 K - 3 Schedule of Expenditures of Federal Awards, Schedule A 179 K - 4 Schedule of Expenditures of State Financial Assistance, Schedule B 180 - 181 K - 5 Notes to the Schedules of Awards and Financial Assistance 182-183 K- 6 Schedule of Findings and Questioned Costs 184 - 186 K - 7 Summary Schedule of Prior Audit Findings 187 INTRODUCTORY SECTION - 1 - Morris School District Office of the Business Administrator 31 Hazel Street Morristown, NJ 07960 973-292-2300 ext 2021 November 30, 2017 Honorable President and Members of the Board of Education Morris School District Morristown, New Jersey Dear President Posey and Board Members: The Comprehensive Annual Financial Report of the Morris School District for the fiscal year ended June 30, 2017 is hereby submitted. Responsibility for both the accuracy of these data and completeness and fairness of the presentation, including all disclosures, rests with the management of the Board of Education. To the best of our knowledge and belief, data presented in this report is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds and account groups of the Morris School District. All disclosures necessary to enable the reader to gain an understanding of the District's financial activities have been included. The Comprehensive Annual Financial Report is presented in four sections: Introductory, Financial, Statistical and Single Audit. The Introductory Section includes this transmittal letrer, the District's organizational chart and a list of principal officials. The Financial Section includes the general-purpose financial statements and schedules, as well as the auditor's report thereon. The Statistical Section includes selected financial and demographic information generally presented on a multi-year basis. The District is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget Circular Uniform Guidance, and the State Treasury Circular Letter 15- 08 0MB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid Payments. Information related to this single audit, including the auditor's report on the internal control structure and compliance with applicable laws and regulations and findings and recommendations, are included in the Single Audit Section of this report. 1. REPORTING ENTITY AND ITS SERVICES: Morris School District is an independent reporting entity within the criteria adopted by the GASB as established by GASB Statement No. 14. All funds and account groups of the District are included in this report. The Morris School District Board of Education and its schools constitute the District's reporting entity. The District provides a full range of educational services appropriate to grade levels Pre-K through 12. These include regular, vocational, special education, gifted and talented and advanced placement programs that address the Morris School District's student needs.