North Bergen Board of Education Comprehensive
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NORTH BERGEN BOARD OF EDUCATION COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016 North Bergen, New Jersey COMPREHENSIVE ANNUAL FINANCIAL REPORT of the North Bergen Board of Education North Bergen, New Jersey For The Fiscal Year Ended June 30, 2016 Prepared by Business Office NORTH BERGEN BOARD OF EDUCATION TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal i-iv Organizational Chart v Roster of Officials VI Consultants and Advisors Vll FINANCIAL SECTION Independent Auditors' 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 ofNet Position 17-18 A-2 Statement of Activities 19 B. Fund Financial Statements Governmental Funds B-1 Balance Sheet 20 B-2 Statement of Revenues, Expenditures, and Changes in Fund Balances 21 B-3 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Govermnental Funds to the Statement of Activities 22 Proprietary Funds B-4 Statement of Net Position 23 B-5 Statement of Revenues, Expenses, and Changes in Net Position 24 B-6 Statement of Cash Flows 25 Fiduciary Funds B-7 Statement of Fiduciary Net Position 26 B-8 Statement of Changes in Fiduciary Net Position 27 Notes to the Financial Statements 28-65 NORTH BERGEN BOARD OF EDUCATION TABLE OF CONTENTS REQUIRED SUPPLEMENTARY INFORMATION- PART II C. Budgetary Comparison Schedules C-1 Budgetary Comparison Schedule- General Fund 66-73 C-2 Budgetary Comparison Schedule- Special Revenue Fund 74 C-3 Budgetary Comparison Schedule- Note to Required Supplementary Information 75 REQUIRED SUPPLEMENTARY INFORMATION - PART III L. Schedules Related to Accounting and Reporting for Pensions L-1 Required Supplementary Information- Schedule of the District's Proportionate Share of the Net Pension Liability- Public Employees Retirement System 76 L-2 Required Supplementary Information- Schedule of District Contributions- Public Employees Retirement System 77 L-3 Required Supplementary Information- Schedule of the District's Proportionate Share of the Net Pension Liability- Teachers Pension and Annuity Fund 78 L-4 Notes to Required Supplementary Information 79 OTHER SUPPLEMENTARY INFORMATION D. School Level Schedules (Not Applicable) E. Special Revenue Fund E-1 Combining Schedule of Revenues and Expenditures Special Revenue Fund - Budgetary Basis 80-82 E-2 Preschool Education Aid - Schedule of Expenditures- Budgetary Basis 83 F. Capital Projects Fund F-1 Summary Schedule of Project Expenditures 84 F-2 Summary Schedule of Revenues, Expenditures and Changes in Fund Balance 85 F-2a- F-2v Schedule of Project Revenues, Expenditures, Project Balances and Project Status 86-107 NORTH BERGEN BOARD OF EDUCATION TABLE OF CONTENTS G. Proprietary Funds Enterprise Fund G-1 Statement of Net Assets- Not Applicable 108 G-2 Statement of Revenues, Expenses and Changes in Net Assets- Not Applicable 108 G-3 Statement of Cash Flows- Not Applicable 108 H. Fiduciary Funds H-1 Combining Statement of Agency Assets and Liabilities 109 H-2 Combining Statement of Changes in Fiduciary Net Position- Not Applicable II 0 H-3 Student Activity Fund Schedule of Receipts and Disbursements 110 H-4 Payroll Agency Fund Schedule of Receipts and Disbursements 110 I. Long-Term Debt I-1 Schedule of Serial Bonds Ill I-2 Schedule of Obligations under Lease-Purchase Agreements 112 I-3 Schedule of Sales/Leaseback Obligations Payable 113 I-4 Debt Service Fund Budgetary Comparison Schedule 114 J. STATISTICAL SECTION (Unaudited) J-1 Net Position by Component 115 J-2 Changes in Net Position 116-117 J-3 Fund Balances - Governmental Funds 118 J-4 Changes in Fund Balances - Governmental Funds 119 J-5 General Fund Other Local Revenue by Source 120 J-6 Assessed Value and Actual Value of Taxable Property 121 J-7 Property Tax Rates 122 J-8 Principal Property Taxpayers 123 J-9 Property Tax Levies and Collections 124 J-10 Ratios of Outstanding Debt by Type 125 J-11 Ratios of Net General Bonded Debt Outstanding 126 J-12 Computation of Direct and Overlapping Debt 127 J-13 Legal Debt Margin Information 128 J-14 Demographic Statistics 129 J-15 Principal Employers 130 J-16 Full-Time Equivalent District Employees by Function/Program 131 J-17 Operating Statistics 132 J-18 School Building Information 133 J-19 Schedule of Required Maintenance for School Facilities 134 J-20 Schedule oflnsurance 135 NORTH BERGEN BOARD OF EDUCATION 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 136-13 7 K-2 Report on Compliance with Requirements for Each Major Program State Program; Report on Internal Control Over Compliance; and Report on the 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 138-140 K-3 Schedule of Expenditures of Federal Awards 141 K-4 Schedule of Expenditures of State Financial Assistance 142-143 K-5 Notes to the Schedules of Expenditures of Federal Awards and State Financial Assistance 144-145 K-6 Schedule of Findings and Questioned Costs 146-149 K-7 Summary Schedule ofPrior Year Audit Findings and Questioned Costs !50 INTRODUCTORY SECTION ~©~u[H] ~~~~~~ BOARD OF EDUCATION 7317 Kennedy Boulevard, North Bergen, New Jersey 07047 • (201) 868-1000 LUIS RABELO PRESIDENT GEORGE J. SOLTER JR., Ed.D SUPERINTENDENT KANAIYALAL PATEL NICHOLAS J. SACCO VICE PRESIDENT DIRECTOR OF ELEMENTARY AND SECONDARY EDUCATION HUGO D. CABRERA BOARD SECRETARY STEVEN P. SOMICK BUSINESS ADMINISTRATOR November 30,2016 Honorable President and Members of the Board of Education North Bergen, New Jersey The New Jersey Department of Education statutes require that all school districts publish within five months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) 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 (the "CAFR") of the North Bergen Board of Education for the fiscal year ended June 30, 2016. The report consists of management's representations concerning the finances of the North Bergen 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, management of the North Bergen Board of Education has established a comprehensive internal control framework that is designed both to protect the Board's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the North Bergen Board of Education's fmancials statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the North Bergen Board of Education's comprehensive framework or internal controls has been 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. The North Bergen Board of Education's financial statements have been audited by Lerch, Vinci & Higgins, LLP, a firm of licensed certified public accountants and public school accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Board for the fiscal year ended June 30, 2016, 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 North Bergen Board of Education's financial statements for the fiscal year ended June 30, 2016, 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 North Bergen Board of Education as part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grant 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 Board'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. Superintendent's Office Fax i The North Bergen Board of Education is an Business Office Fax (201) 868-5713 Affirmative Action I Equal Opportunity Employer (201) 295-2747 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. North Bergen Board of Education's MD&A can be found immediately following the report of the independent auditors. The North Bergen 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 Pre-K through 12. These include regular and vocational, Early Childhood Development, as well as special education for handicapped students. The District completed the 2015/2016 school year with an enrollment of 8,005 students, which is 244 students more than the previous year's enrollment.