COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended June 30, 2007 Saginaw Intermediate School District 6235 Gratiot Road Saginaw, Michigan 48638 Comprehensive Annual Financial Report Year Ended June 30, 2007 Board of Education Richard F. Burmeister, Jr. President Joseph W. Powe Vice President Ruth A. Coppens Treasurer Leola Wilson Secretary Ronald J. Gnatkowski Trustee Superintendent Richard D. Lane Prepared by the Finance Department Director of Finance & Business Operations Sally Peterson Assistant Director of Finance & Business Operations Christopher J. Frank Kimberly Bruske – Finance Technician-Payroll Wanda Dankert – Finance Coordinator Pat Garchow – Program Secretary An Stevenson – Finance Technician-Accounts Payable Saginaw Intermediate School District Comprehensive Annual Financial Report Year Ended June 30, 2007 Table of Contents Page No. INTRODUCTORY SECTION Letter of Transmittal i - ix Organizational Chart xi Administration xii Certificate of Excellence in Financial Reporting xiii FINANCIAL SECTION Independent Auditors’ Report 1 - 1 Management’s Discussion and Analysis 2 - 1 Basic Financial Statements 3 - 1 District-wide Financial Statements Statement of Net Assets 3 - 2 Statement of Activities 3 - 4 Fund Financial Statements Governmental Funds Balance Sheet 3 - 5 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Assets 3 - 6 Saginaw Intermediate School District Comprehensive Annual Financial Report Year Ended June 30, 2007 Table of Contents (Continued) Page No. Statement of Revenues, Expenditures and Changes in Fund Balances 3 - 7 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 3 - 8 Fiduciary Funds Statement of Fiduciary Net Assets 3 - 9 Statement of Changes in Fiduciary Net Assets – Private Purpose Trust Funds 3 - 10 Notes to Basic Financial Statements 3 - 11 Required Supplemental Information 4 - 1 Budgetary Comparison Schedule – General Fund 4 - 2 Budgetary Comparison Schedule – Special Education Fund 4 - 3 Budgetary Comparison Schedule – Cooperative Education Fund 4 - 4 Other Supplemental Information 5 - 1 Combining Balance Sheet – Nonmajor Governmental Funds 5 - 2 Combining Statement of Revenue, Expenditures and Changes in Fund Balance – Nonmajor Governmental Funds 5 - 3 General Fund Comparative Balance Sheet 5 - 6 Statement of Revenues and Other Financing Sources Compared to Budget 5 - 7 Statements of Expenditures and Other Financing Uses Compared to Budget 5 - 8 Saginaw Intermediate School District Comprehensive Annual Financial Report Year Ended June 30, 2007 Table of Contents (Continued) Page No. Special Revenue Funds Food Service Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual 5 - 12 Special Education Statement of Revenues and Other Financing Sources Compared to Budget 5 - 13 Statement of Expenditures and Other Financing Uses Compared to Budget 5 - 14 Cooperative Education Statement of Revenues and Other Financing Sources Compared to Budget 5 - 17 Statement of Expenditures and Other Financing Uses Compared to Budget 5 - 18 Debt Service Funds Transition Center Bonds - Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 5 - 24 Saginet Installment Purchase Agreements - Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 5 - 25 Bus Installment Purchase Agreements - Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 5 - 26 Fiduciary Funds Combining Balance Sheet 5 - 28 Private Purpose Trust Funds Detailed Statement of Revenues, Expenditures and Changes in Fund Balance 5 - 29 Agency Fund Activity Funds Statement of Changes in Amounts Due to Student Groups 5 - 30 General Long Term Debt Schedule of Outstanding Bonded Indebtedness 5 - 32 Schedule of Outstanding Installment Note Indebtedness 5 - 36 Schedule of Intergovernmental Expenditures General Fund 5 - 40 Special Revenue Fund - Special Education 5 - 41 Saginaw Intermediate School District Comprehensive Annual Financial Report Year Ended June 30, 2007 Table of Contents (Continued) Page No. STATISTICAL SECTION (Unaudited) Financial Trends Information Net Assets by component, last five fiscal years 6 - 2 Expenses, revenues, and other changes in net asets, last five fiscal years 6 - 3 Fund Balances, governmental funds, last ten fiscal years 6 - 4 Governmental funds revenues, last ten fiscal years 6 - 5 Governmental funds expenditures and debt service ratio, last ten fiscal years 6 - 6 Other financing sources and uses and net change in fund balances, governmental funds, last ten fiscal years 6 - 7 General Fund Revenues and Other Financing Sources by Source - Last Ten Fiscal Years 6 - 8 General Fund Revenues and Other Financing Sources by Source – Bar Chart 6 - 9 General Fund Expenditures and Other Financing Uses by Function - Last Ten Fiscal Years 6 - 10 General Fund Expenditures and Other Financing Uses – Bar Chart 6 - 11 Special Education Fund Revenues and Other Financing Sources by Source - Last Ten Fiscal Years 6 - 12 Special Education Fund Revenues and Other Financing Sources by Source – Bar Chart 6 - 13 Special Education Fund Expenditures and Other Financing Uses by Function - Last Ten Fiscal Years 6 - 14 Special Education Fund Expenditures and Other Financing Uses – Bar Chart 6 - 15 Revenue Capacity Information State taxable value, assessed value and estimated actual value of taxable property, last ten fiscal years 6 - 18 Tax Base Composition 6 - 19 Property tax rates, all overlapping governments, last ten fiscal years 6 - 20 Principal Taxpayers, current year and nine years ago 6 - 21 Property tax levies and collections, last ten fiscal years 6 - 22 Debt Capacity Information Outstanding debt by type, last ten fiscal years 6 - 24 Direct and overlapping bonded debt, as of June 30, 2007 6 - 25 Legal debt margin information, last ten fiscal years 6 - 26 Saginaw Intermediate School District Comprehensive Annual Financial Report Year Ended June 30, 2007 Table of Contents (Continued) Page No. Demographic and Economic Information Demographic statistics – Saginaw County, last ten calendar years 6 - 28 Principal employers, current year and nine years ago 6 - 29 Operating Information Full-time-equivalent employees by type, last ten fiscal years 6 - 32 Enrollment statistics, last ten fiscal years 6 - 33 Teacher base salaries, last ten fiscal years 6 - 34 Capital asset information, last ten fiscal years 6 -35 SAGINAW INTERMEDIATE SCHOOL DISTRICT 6235 Gratiot Road x Saginaw, MI 48603 (989) 799-4733 x FAX (989) 793-1571 October 29, 2007 Board of Education Saginaw Intermediate School District 6235 Gratiot Road Saginaw, MI 48638 Dear Board Members: INTRODUCTION The Comprehensive Annual Financial Report of the Saginaw Intermediate School District (ISD) for the fiscal year ended June 30, 2007 is submitted herewith. The report was prepared by Saginaw ISD’s Finance and Business Department. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the Superintendent and Director of Finance & Business Operations. This report has been prepared following generally accepted accounting principles. We believe that the data presented is accurate in all material respects and clearly reflects the financial position and results of operations of Saginaw ISD. All disclosures necessary to enable the reader to gain a full understanding of Saginaw ISD’s financial activity have been made. The Comprehensive Annual Financial report is presented in three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, Saginaw ISD’s organizational chart, a listing of Saginaw ISD’s top administrative officials and the Certificate of Excellence in Financial Reporting for the year ended June 30, 2006. The financial section includes the management’s discussion and analysis, district-wide financial statements, the fund financial statements, notes to the financial statements, required, and other supplemental information, as well as the independent auditor’s report on these financial statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. i OVERVIEW In 1962 the Michigan State Legislature authorized Intermediate School Districts for the purpose of creating Regional Education Service Agencies. Saginaw ISD was formed that same year. The goal of the Legislature was to consolidate resources and provide cost-effective special services for: students with special needs, staff training and development, instructional programs, as well as business and administrative operations. Saginaw ISD serves the 13 local school districts, 6 public school academies, and 24 non-public schools in Saginaw County. Michigan Law requires that students identified as needing special education services be educated through age 26. Michigan Law also makes it the responsibility of Intermediate School Districts (ISD), known as Education Service Agencies in much of the country, to provide for the education of special education students. ISD’s or ESA’s in Michigan have the authority to operate the programs necessary for special education children and bill local school districts for their share of services provided to the children that are residents of their district. Saginaw ISD operates two center-based programs for Special Education students at the Millet