Comprehensive Annual Financial Report of the North Scott Community School District Eldridge, Iowa For the Fiscal Year Ended June 30, 2015 Official Issuing Report Jill Van Roekel – Director of Business Affairs Office Issuing Report Business Office Notice The North Scott Community School District does not discriminate on the basis of race, color, national origin, religion, sex, disability, sexual orientation, gender identity or marital status in its educational programs, services or employment practices. Inquiries concerning application of this statement should be addressed to: Kelly Rohlf, Equity Coordinator 308 North Main Street Donahue, Iowa 52746 563‐282‐9627 Table of Contents INTRODUCTORY SECTION (UNAUDITED) Letter of transmittal i ‐ vii Certificate of excellence viii Certificate of achievement for excellence ix Organizational chart x Board of Education and School District Administration xi Consultants and advisors xii FINANCIAL SECTION Independent auditor’s report 1 ‐ 3 Management’s discussion and analysis 4 ‐15 Basic financial statements: Government‐wide financial statements: Statement of net position 16‐17 Statement of activities 18‐19 Governmental fund financial statements: Balance sheet governmental funds 20 Reconciliation of the balance sheet – governmental funds to statement of net position 21 Statement of revenues, expenditures and changes in fund balances ‐ governmental funds 22 Reconciliation of the statement of revenues, expenditures and changes in fund balances – governmental funds to the statement of activities 23 Proprietary fund financial statements: Statement of net position proprietary funds 24 Statement of revenues, expenses and changes in net position proprietary funds 25 Statement of cash flows proprietary funds 26‐27 Fiduciary fund financial statements: Statement of fiduciary assets and liabilities fiduciary fund 28 Notes to basic financial statements 29‐55 Required supplementary information: Budgetary comparison schedule of revenues, expenditures/expenses and Changes in balances – actual to budget – all governmental funds and enterprise funds 56‐57 Schedule of funding progress for the retiree health plan 58 Iowa Public Employees’ Retirement System: Schedule of the District’s proportionate share of the net pension liability 59 Schedule of District contributions 60‐61 Notes to required supplementary information 62‐63 Other supplementary information: Nonmajor governmental funds: Combining balance sheet 64 Combining statement of revenues, expenditures and changes in fund balances 65 Capital projects funds: Schedule of Combining balance sheet, by account 66 Schedule of combining statement of revenues, expenditures and changes in fund 67 balances, by account Agency fund: Statement of changes in assets and liabilities 68 STATISTICAL SECTION (UNAUDITED) Statistical section contents 69 Net position by component 70‐ 71 Expenses, program revenues and net (expense)/revenue 72‐ 73 General revenues and total change in net position 74‐ 75 Fund balances, governmental funds 76‐ 77 Governmental funds revenues 78‐ 79 Governmental funds expenditures and debt service ratio 80‐ 81 Other financing sources and uses and net change in fund balances, governmental funds 82‐ 83 Assessed value and actual value of taxable property 84 Direct and overlapping property tax rates 85‐ 86 Principal property tax payers 87 Property tax levies and collections 88 Outstanding debt by type 89 Ratio of net bonded debt to assessed values 90 Ratio of annual debt service principal and interest for general bonded debt to total general expenditures 91 Legal debt margin information 92‐ 93 Direct and overlapping governmental activities debt 94 Pledged‐revenue coverage 95 Demographic and economic statistics 96 Principal employers 97 Full‐time equivalent district employees by type 98‐ 99 Operating statistics 100‐ 101 Free and reduced students 102 School building information 103‐ 104 Capital asset information 105‐ 106 Miscellaneous demographic statistics 107‐ 112 Property values, construction and bank deposits 113 Enrollment by grade and certified enrollment 114‐115 Schedule of insurance coverage 116‐117 History of state aid payments 118 Local regular program budget vs. teacher settlements, new money 119 Average salary by education level 120‐121 Total package settlement 122‐123 Financial solvency ratio 124 COMPLIANCE SECTION Schedule of expenditures of federal awards 125‐126 Summary schedule of prior audit findings 127 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 128‐129 Independent auditor’s report on compliance for each major federal program and report on Internal control over compliance in accordance with OMB Circular A‐133 130‐131 Schedule of findings and questioned costs 132‐136 Corrective action plan 137 INTRODUCTORY SECTION THIS PAGE INTENTIONALLY LEFT BLANK North Scott Community School District 251 East Iowa Street, Eldridge, Iowa 52748 Fax (563) 285-6075 Phone (563) 285-4819 . a commitment to the community. December 15, 2015 Mr. John Maxwell, President and Members of the Board of Education and Citizens of North Scott Community School District Eldridge, Iowa We are delighted to submit to you the Comprehensive Annual Financial Report, (CAFR) of the North Scott Community School District, (the “District”) for the year ending June 30, 2015. This report has been prepared to conform to guidelines recommended by the Association of School Business Officials International and the Government Finance Officers Association of the United States and Canada. The report presents the financial information of the District accurately and concisely. It is comprehensive, yet easily readable. The Comprehensive Annual Financial Report will be submitted to the Association of School Business Officials of the United States and Canada (ASBO) for review for the ASBO Certificate of Excellence and to the Government Finance Officers Association for the GFOA Certificate of Achievement. This letter of transmittal is designed to complement the Management’s Discussion and Analysis included within the financial section of the CAFR and should be read in conjunction with it. Management Responsibility Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the District. To the best of our knowledge and belief, the enclosed information is fairly stated in all material respects and is presented in a manner which sets forth the financial position and results of operations of the various funds and account groups of the District in accordance with generally accepted accounting principles, (GAAP). It includes the entire District. The District is not included in any other reporting entity, nor is any other entities included within this report. All disclosures necessary to enable a reader to gain maximum understanding of the District’s financial activities have been included. i Basis of Accounting and Accounting System The District’s accounting records for general operations are maintained on a modified accrual basis, with the revenue being accrued when available and measurable. Expenditures are recorded when the services or goods are received and the liabilities are incurred. Accounting records for the District’s nutrition and day care programs and internal service fund are maintained on the accrual basis. All the District’s funds are presented in this report and have been audited by the District’s independent certified public accountants, Bohnsack & Frommelt LLP, Certified Public Accountants. The chart of accounts used by the District is in conformance with the revised Uniform Accounting System for Iowa Schools and Area Education Agencies 2009 Edition. The chart of accounts manual is updated on an annual basis. In developing and evaluating the accounting system of the school District, much consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognized that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the internal accounting controls of the school District adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Profile of the Government North Scott Community School District was incorporated November 1956. The District is supported financially by state aid, property taxes, state and federal grants for special projects and local revenue. The District is governed by a seven‐member board of education. The elections are held in September of odd‐numbered years. Three and four positions are up for election on alternate odd‐numbered years. All board members are elected at large. The combined financial statements include all funds, organizations, account groups, agencies, boards, commissions and other authorities. The District has also considered all potential component units for which it is financially accountable, and other organizations