BOARD OF EDUCATION OF WICOMICO COUNTY _________________________________________ A Component Unit of Wicomico County, Maryland Comprehensive ANNUAL FINANCIAL REPORT For fiscal year ended June 30, 2017 SUCCESS – Every Student, Every Day 2424 Northgate Drive, Suite 100 Salisbury, Maryland 21802-1538 www.wcboe.org Board of Education of Wicomico County A Component Unit of Wicomico County, Maryland Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 Prepared by: Board of Education of Wicomico County Division of Business Support Services Jonathan Bailey Accounting Manager Jesse Reid, CPA, MBA Comptroller THE BOARD OF EDUCATION OF WICOMICO COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 TABLE OF CONTENTS Page(s) INTRODUCTORY SECTION Letter of Transmittal 1 - 7 List of Appointed Officials 8 Organizational Chart 9 Certificate of Achievement - Government Finance Officers Association (GFOA) 10 Certificate of Excellence - Association of School Business Officials (ASBO) 11 FINANCIAL SECTION Independent Auditors' Report on the Financial Statements 13 - 15 Management's Discussion and Analysis 16 - 28 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position 29 Statement of Activities 30 - 31 Fund Financial Statements: Balance Sheet - Governmental Funds 32 Reconciliation of the Balance Sheet to the Statement of Net Position - Governmental Funds 33 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 34 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities - Governmental Funds 35 Statement of Net Position - Proprietary Fund 36 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Fund 37 Statement of Cash Flows - Proprietary Fund 38 Statement of Net Position - Fiduciary Funds 39 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 40 Notes to the Basic Financial Statements 41 - 71 THE BOARD OF EDUCATION OF WICOMICO COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 TABLE OF CONTENTS (continued) FINANCIAL SECTION (continued) Required Supplementary Information: Schedule of Funding Progress and Employer Contributions - Retiree Health Insurance Plan Trust 73 Schedule of Proportionate Share of Net Pension Liability - Pension Plans - Teachers' Retirement and Pension Systems 74 Schedule of Board Contributions - Pension Plans - Teachers' Retirement and Pension Systems 75 Schedule of Changes in the Employer's Net Pension Liability and Related Ratios - Pension Plan for Employees 76 Schedule of Revenues and Expenditures - Budget and Actual - General Fund 77 - 78 Schedule of Revenues and Expenditures - Budget and Actual - Special Revenue 79 Notes to Required Supplementary Information 80 - 84 Additional Supplementary Information: Schedule of Appropriations and Expenditures - General Fund - Budgetary Basis 86 - 88 Schedule of Revenues and Expenditures - Budget to Actual - Capital Projects - Budgetary Basis 89 Schedule of Revenues and Expenditures - Budget to Actual - Food Service - Budgetary Basis 90 Combining Schedule of Fiduciary Net Position - Pension and Retiree Health Plan Trust Funds 91 Combining Schedule of Changes in Fiduciary Net Position - Pension and Retiree Health Plan Trust Funds 92 Statement of Changes in Assets and Liabilities - Agency Fund 93 THE BOARD OF EDUCATION OF WICOMICO COUNTY Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 TABLE OF CONTENTS (continued) STATISTICAL SECTION Contents 95 Net Position by Component - Last Ten Fiscal Years (Accrual Basis of Accounting) 96 Changes in Net Position - Last Ten Fiscal Years (Accrual Basis of Accounting) 97 - 98 Fund Balances of Governmental Funds - Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 99 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 100 - 101 Approved Operating Budgets, General Fund - Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 102 - 103 Retiree Health Plan Trust (GASB No. 45) - Since Inception, Fiscal Years 104 Retirement Plan for Employees of the Board of Education of Wicomico County (GASB No. 67) 105 Ratios of Outstanding Debt - Last Ten Fiscal Years 106 Enrollment by School - Last Ten Years 107 Enrollment by Grade - Last Ten Years 108 Budgeted Full Time Equivalent Positions by Function - Last Ten Fiscal Years 109 Demographic and Economic Statistics - Last Ten Years 110 Operating Information - Last Ten Fiscal Years 111 - 112 Where the Money Comes From - General Fund & Special Revenue Fund (Current Expense Fund) - Last Ten Fiscal Years 113 Facilities Inventory 114 Capital Asset Statistics by Function 115 Insurance Summary 116 Property Tax Levies and Collections 117 INTRODUCTORY SECTION Board of Education of Wicomico County Appointed Officials for FY 2017 Donald L. Fitzgerald, President Joseph R. Olinger, Vice President Tyrone A. Chase, Ph.D. N. Eugene Malone, Jr. John Palmer Maria A. Waller Ronald O. Willey Student Members Laura Toner, James M. Bennett High School Leah Fetzer, Mardela High School Patrick Temple, Parkside High School Katie Beach, Wicomico High School Donna C. Hanlin, Ed.D., Superintendent of Schools 8 Board of Education of Wicomico County Organizational Chart FY 2017 BOARD OF EDUCATION Public Information Officer Superintendent of Schools Assistant Superintendent for Assistant Superintendent for Assistant Superintendent for Instruction Student & Family Services Administration Director of Curriculum & Professional Development Supervisor of Guidance and Director of Human Resources Director of Elementary At-Risk Education Beaver Run; Delmar; East; Fruitland Prim; Fruitland Inter; Glen; North; Northwestern; Coordinator of Safe Schools Comptroller Pemberton; Pinehurst; Prince St; Chipman; West; Westside Prim; Westside Interm; Willards Coordinator of Nurses Director of Transportation Director of Secondary Education Bennett Mid; Pittsville El/Mid; Coordinator of Mentoring Salisbury Mid; Wicomico Mid; Director of Food Service Bennett High; Mardela M/Hi; Project Parkside High; Wicomico High Director of Special Education Director of Technology Supervisor for School Director of Facility Services Improvement/Strategic Plans Coordinator for School Director of Planning/ Assessments & Accountability Construction The Certificate of Excellence in Financial Reporting is presented to Board of Education of Wicomico County for its Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2016. The CAFR has been reviewed and met or exceeded ASBO International’s Certificate of Excellence standards. Anthony N. Dragona, Ed.D., RSBA John D. Musso, CAE President Executive Director FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT The Board of Education of Wicomico County Salisbury, Maryland Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of The Board of Education of Wicomico County, a component unit of Wicomico County, Maryland, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the Board’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly,