HOBOKEN PUBLIC SCHOOLS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 Hoboken, New Jersey COMPREHENSIVE ANNUAL FINANCIAL REPORT of the Hoboken School District Hoboken, New Jersey For The Fiscal Year Ended June 30, 2016 Prepared by Business Office HOBOKEN PUBLIC SCHOOLS TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal i-v Organizational Chart vi Roster of Officials vii Consultants and Advisors viii Certificates of Achievement for Excellence in Financial Reporting ix-xii FINANCIAL SECTION Independent Auditor's Report 1-3 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. Fond 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 Notes to the Financial Statements 28-62 REQUIRED SUPPLEMENTARY INFORMATION- PART II C. Budgetary Comparison Schedules C-1 Budgetary Comparison Schedule- General Fund 63-71 C-Ia Combining Budgetary Comparison Schedule- General Fund 72-79 C-2 Budgetary Comparison Schedule- Special Revenue Fund 80 HOBOKEN PUBLIC SCHOOLS TABLE OF CONTENTS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION- PART II C. Budgetary Comparison Schedules (Continued) C-3 Required Supplementary Information- Budgetary Comparison Schedule­ Notes to the Required Supplementary Information 81 REQUIRED SUPPLEMENTARY INFORMATION -PART lll L. Schedules Related to Accounting and Reporting for Pensions (GASB 68) L-1 Required Supplementary Information- Schedule of the District's Proportionate Share of the Net Pension Liability- Public Employees Retirement System 82 L-2 Required Supplementary Information- Schedule of District Contributions­ Public Employees Retirement System 83 L-3 Required Supplementary Information- Schedule of the District's Proportionate Share of the Net Pension Liability- Teachers Pension and Annuity Fund 84 Notes to Required Supplementary Information 85 OTHER SUPPLEMENTARY INFORMATION D. School Level Schedules D-1 Combining Balance Sheet- General Fund 86 D-2 Statement of Expenditures Allocated by Resource Type- Actual­ Blended Resource Fund 15 87 D-3 Schedule of Blended Expenditures- Budget and Actual­ Blended Resource Fund 15 88-110 E. Special Revenue Fund E-1- E-1B Combining Schedule of Revenues and Expenditures Special Revenue Fund- Budgetary Basis 111-116 E-2 Preschool Education Program Aid Schedule of Expenditures­ Budgetary Basis 117 E-2a Early Childhood Program Aid Schedule of Expenditures­ Budgetary Basis 118 F. Capital Projects Fund F-1 Summary Statement of Project Expenditures 119 F-2 Summary Schedule of Revenues, Expenditures and Changes in Fund Balance 120 F-2a Schedule of Project Revenues, Expenditures, Project Balance and F-2f Project Status- Budgetary Basis 121-127 G. Enterprise Fund G-1 Statement of Net Position 128 G-2 Statement of Revenues, Expenses and Changes in Net Position 129 G-3 Statement of Cash Flows 130 HOBOKEN PUBLIC SCHOOLS TABLE OF CONTENTS OTHER SUPPLEMENTARY INFORMATION (Continued) H. Fiduciary Funds H-1 Combining Statement of Agency Assets and Liabilities 131 H-2 Combining Statements of Changes in Fiduciary Net Position 132 H-3 Student Activity Agency Fund Schedule of Receipts and Disbursements 133 H-4 Payroll Agency Fund Schedule of Receipts and Disbursements 134 I. Long-Term Debt I-1 Schedule of Bonds Payable- Not Applicable 135 I-2 Schedule of Obligations Under Capital Leases/Lease Purchase Agreements 136 I-3 Schedule of Loans Payable- Not Applicable 137 I-4 Debt Service Fund- Budgetary Comparison- Not Applicable 138 J. STATISTICAL SECTION (Unaudited) J-1 Net Position by Component 139 J-2 Changes in Net Position 140-141 J-3 Fund Balances - Governmental Funds 142 J-4 Changes in Fund Balances - Governmental Funds 143 J-5 General Fund Other Local Revenue by Source 144 J-6 Assessed Value and Actual Value of Taxable Property 145 J-7 Direct and Overlapping Property Tax Rates 146 J-8 Principal Property Taxpayers 147 J-9 Property Tax Levies and Collections 148 J-10 Ratios of Outstanding Debt by Type 149 J-11 Ratios of Net General Bonded Debt Outstanding 150 J-12 Computation of Direct and Overlapping Bonded Debt 151 J-13 Legal Debt Margin Information 152 J-14 Demographic and Economic Statistics 153 J-15 Principal Employers 154 J-16 Full-Time Equivalent District Employees by Function/Program 155 J-17 Operating Statistics 156 J-18 School Building Information 157 J-19 Schedule of Required Maintenance for School Facilities 158 J-20 Schedule oflnsurance 159 HOBOKEN PUBLIC SCHOOLS TABLE OF CONTENTS K. 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 160-161 K-2 Report on Compliance for each Major Federal and State Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by U.S. Uniform Guidance and Schedule of Expenditures of State Financial Assistance Required by New Jersey OMB Circular 15-08- Independent Auditor's Report 162-164 K-3 Schedule of Expenditures ofFedera1 Awards 165-166 K-4 Schedule of Expenditures of State Financial Assistance 167-168 K-5 Notes to the Schedules of Expenditures of Federal Awards and State Financial Assistance 169-170 K-6 Schedule of Findings and Questioned Costs 171-175 K-7 Summary Schedule of Prior Audit Findings 176 INTRODUCTORY SECTION HOBOKEN BOARD OF EDUCATION OFFICE OF THE BUSINESS ADMINISTRATOR I BOARD SECRETARY 158 Fourth Street •!• Hoboken, NJ 07030 •!• 201.356.3610 •!• Fax: 201 .356.3642 William Moffitt Business Administrator I Board Secretary [email protected] 7 November 2016 Honorable President and Members of the Hoboken Board of Education County of Hudson, New Jersey Dear Board Members and Constituents of Hoboken: The comprehensive annual financial report of the Hoboken Board of Education (Board) for the fiscal year ended June 30, 2016 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. 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 fmancial position and results of operations of the various funds of the Board. All disclosures necessary to enable the reader to gain an understanding of the Boards' 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 letter, the Board organizational chart and a list of principal officials. The financial section includes the District­ wide Statements as required by GASB 34, basic financial statements, schedules and footnotes 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 Board is required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 as amended by the Single Audit Act Amendments of 1996; U.S. Uniform Guidance, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards; and New Jersey OMB's Circular 15-08 OMB, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. Information related to this single audit, including the auditor's reports covering compliance with applicable laws, regulations and requirements, and internal control over compliance and financial reporting, as well as a schedule of related fmdings, is included in the single audit section ofthis report. REPORTING ENTITY AND ITS SERVICES: The Hoboken Board of Education is an independent reporting entity within the criteria adopted by the Goverrunental Accounting Standards Board (GASB) as established by Statement No. 14. All funds and account groups of the Board are included in this report. The Hoboken Board of Education and all its schools constitute the Board's reporting entity. For the past five years the Board provided a full range of educational services appropriate to grade levels Pre-K through 12. These include regular and special education for handicapped youngsters. The Board completed the 2015-2016 fiscal year with an average daily enrollment of 1,934 students, which is 62 students above the previous year's average daily enrollment. The following details the changes in the student emollment of the District over the last five years. Where Students Come First i HOBOKEN BOARD OF EDUCATION FY2016 Audit Introduction 7 November 2016 Page2 Hoboken School District Average Daily Enrollment Last Five Years Student Percent Fiscal Year Enrollment Change 2015-2016 1,934 3.3% 2014-2015 1,872 (3.4%) 2013-2014 1,938 13.31% 2012-2013 1,710 (4.36%) 2011-2012 1,788 (1.5%) MAJOR INITIATIVES: The Hoboken Public School District continued to undertake a rigorous and comprehensive school improvement process designed to increase academic performance for all students. The district goals, budgeting process, technology program, educational materials selection processes, staff evaluation system, student performance assessment tools, curriculum revisions, facility improvements, and a variety of work in other areas is aligned in support of teaching, learning, and the new Common Core State Standards. New textbooks and professional activities continued districtwide as the district implemented changes related to the Common Core State Standards. A new language arts program and textbook was adopted for grades K-8 and continued to be implemented from the prior year.