SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND AUDIT REPORT. August 31, 2016 * * *

Transcription

1 SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND AUDIT REPORT August 31, 2016 * * * CHAVAN & ASSOCIATES, LLP CERTIFIED PUBLIC ACCOUNTANTS 1475 SARATOGA AVE., SUITE 180 SAN JOSE, CA 95129

2 SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND August 31, 2016 Table of Contents Page No. FINANCIAL SECTION: Independent Auditor s Report Program Statements: Statement of Approved Budget and Cumulative Expenditures Statement of Expenditures for the Period of July 1, 2015 through August 31, Notes to Program Statements Schedule of Findings and Recommendations OTHER INDEPENDENT AUDITOR S REPORTS: 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 Independent Auditor s Report on Compliance with Requirements that could have a Direct and Material Effect on the Measure J Bond Program

3 FINANCIAL SECTION

4 Measure J Citizens Oversight Committee and Governing Board Members Sequoia Union High School District Report on the Program Statements INDEPENDENT AUDITOR S REPORT We have audited the accompanying Proposition 39/Measure J Bond program statements of the Sequoia Union High School District as of and for the period ended June 30, Management s Responsibility for the Program Statements The Sequoia Union High School District s management is responsible for the preparation and fair presentation of these 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 these statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these 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 program statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the program 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 program 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 program statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion Saratoga Ave, Suite 180, San Jose, CA Tel: E-Fax: info@cnallp.com

5 Opinion In our opinion, the program statements referred to above present fairly, in all material respects, the approved budget, cumulative expenditures and allowable costs for the Proposition39/Measure J Bond proceeds for the period audited. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have issued our report dated October 5, 2016 on our consideration of the Proposition 39/Measure J Bond of Sequoia Union High School District s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Sequoia Union High School District s internal control over financial reporting and compliance. October 5, 2016 San Jose, California Saratoga Ave, Suite 180, San Jose, CA Tel: E-Fax: info@cnallp.com

6 PROGRAM STATEMENTS 3

7 SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND Statement of Approved Budget and Cumulative Expenditures August 31, 2016 Site Project Description Summary Sum of Adjusted Budget Sum of Total Expended Alternative Schools 5th Ave. Alternative School $ 15,337,140 $ 15,337,140 Classroom Refresh 9,832 9,832 EPA Green St. Site & Buildings 2,907,158 2,907,158 Myrtle St. Alternative School 16,401,524 16,401,524 Property Evaluation - Bing, Veterans, EPA 317, ,650 Purchase Green St., Myrtle St. 6,962,349 6,962,349 Alternative Schools Total 41,935,653 41,935,653 Carlmont Caree Tech/Green 18,786 18,786 Career Tech Child Care 58,644 58,644 Classroom Refresh 420, ,422 CTE Facility - Biotech - Carlmont 6,937,389 6,937,389 CTE Facility - U-wing demolition 120, ,455 Energy Phase I & Stogner gym 215, ,739 Football Field 1,660,830 1,660,830 Gym Floor & Renovated Bleachers 286, ,085 Music Arts Building 15,216,188 15,216,188 Music Building Canopies 89,942 89,942 New Classrooms 451, ,266 New Parking Lot 60,251 60,251 New Storage Building 62,040 62,040 Restroom at Track 224, ,993 Carlmont Total 25,823,030 25,823,030 District Facilities Acquisition of 980 Myrtle 1,379,225 1,379,225 Construction Management Salaries and benefits 294, ,151 DW Incident Command System 3,588 3,588 Network Comm Sys Upgrade 1,205,240 1,205,240 Rekey Classroom Door Locks 181, ,887 Solar Thermal Pool Heating 37,639 37,639 Tech- DWHVAC for MDF Room 3,234 3,234 Tech- DWIndependent Learning DW located 7,429 7,429 Tech- DWInternet Edge Upgrade 157, ,255 Tech- DWVirtual Servers 295, ,054 Technology Bond Funds 2,724,792 2,724,792 Telecom System Upgrade 1,041,745 1,041,745 Security Cameras 1,067,480 1,067,480 District Facilities Total 8,398,718 8,398,719 District-Wide 1090 Mills Acquisition 4,006,069 4,006,069 Classroom Refresh 26,021 26,021 Construction Admin 844, ,494 Construction Management 781, ,356 District/Corp Yard 2,920,835 2,920,835 Douglas St. - Bus Yard - Phase I 1,811,763 1,811,763 Douglas St. - Bus Yard - Phase II 109, ,002 Douglas St. - Bus Yard Land Acquisition 4,814,317 4,814,317 Facilities funding consultant, appraisals, performance audit 287, ,033 Final Douglas Hold Back 7,487 7,487 District-Wide Total 15,608,377 15,608,377 Menlo Atherton Classroom Refresh 476, ,246 Classrooms D 4-5 Renovation 26,415 26,415 CTE Facility - Digital 7,090,543 7,090,543 Electrical Upgrade Infrastructure 815, ,812 Fire Lane Access 188, ,380 Football Field Lights 439, ,269 Gym Floor - Phase II 345, ,100 Gym Floor, Bleachers, Doors, Solar - Phase I 230, ,586 Kiln Project 290, ,106 MA PAC Phase III Front of school 4,374,111 4,374,111 Move Portable, Fire Water Infrastructure 297, ,773 New Biology Labs 370, ,553 New Storage Building 14,789 14,789 Old Music Building Upgrades 900, ,634 Performing Arts - Phase II 16,072,430 16,072,430 Pride Hall renovation 2,132,778 2,132,778 Menlo Atherton Total 34,065,525 34,065,525 The notes to the program statements are an integral part of this statement. 4

8 SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND Statement of Approved Budget and Cumulative Expenditures August 31, 2016 Site Project Description Summary Sum of Adjusted Budget Sum of Total Expended Redwood Administration Renovation 1,190,912 1,190,912 Classroom Refresh 91,241 91,241 Counseling/Classroom Modular & 557, ,836 Redwood Marquee 3,127 3,127 Second Modular 221, ,437 Redwood Total 2,064,553 2,064,553 Sequoia Additional Classrooms 32,958 32,958 Athletic Facility 14,835,266 14,835,266 Baseball Bleachers 357, ,572 Biotech Room Renovation 2,000,533 2,000,533 Classroom Renovations 3,345,610 3,345,610 Culinary Academy / CTE 382, ,821 Electronic Marquee 115, ,209 New Storage/Butler Building 124, ,339 Sequoia B-Wing 237, ,509 SHS Classroom Refresh 423, ,000 Woodshop / Classroom Renovation 970, ,296 Sequoia Total 22,825,113 22,825,113 Woodside Alameda Entrance Road 125, ,712 Classroom Refresh 382, ,006 CTE Facility 7,819,213 7,819,213 Electronic Marquee 90,844 90,844 Field House 2,032,546 2,032,546 Guidance Center 966, ,705 Health Sci/Engineering Rooms Design & DSA 1,490,412 1,490,412 Landscaping, Perimeter, Fence, Wall, Court 358, ,849 Move Portables 572, ,846 Multipurpose Room 852, ,126 Plumbing Upgrades 32,866 32,866 Restroom Renovations 792, ,797 Sound Room 34,926 34,926 Track Movement Problem 21,256 21,256 Woodside Total 15,573,104 15,573,104 Grand Total $ 166,294,073 $ 166,294,074 The notes to the program statements are an integral part of this statement. 5

9 SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND Statement Expenditures for the Period of July 1, 2015 through August 31, 2016 Site Project Description Total Carlmont Classroom Refresh $ 3,721 Carlmont Total 3,721 District-Wide Construction Admin salaries/benefits/ services, supplies 157 Corporate Yard 271,367 Facilities funding consultant, appraisals, performance/financial audit 9,647 Security Camera Phase 4 5,583 Telecom Sys Upgrade 2,216 District-Wide Total 288,970 Menlo Atherton Classroom Refresh 3,478 Menlo Atherton Total 3,478 Redwood Classroom Refresh 1,481 Redwood Total 1,481 Sequoia Classroom Refresh 13,037 Sequoia Total 13,037 Woodside Classroom Refresh 16,457 Sound Room 34,926 Woodside Total 51,383 Grand Total $ 362,070 The notes to the program statements are an integral part of this statement. 6

10 NOTE 1 - THE PROGRAM SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND Notes to Program Statements August 31, 2016 Proposition 39 was enacted by the voters on November 7, 2000, and changed the required majority for local voter approval of public school and community college general obligation bonds from twothirds to fifty-five percent of votes. It also required school districts to provide facilities to charter schools operating within their jurisdictions. On February 5, 2008, the Sequoia Union High School District put Measure J, a $165 Million General Obligation Bond Measure, to the voters for approval. Measure J follows two previous Local Bond Measures, the recently completed $70 Million Measure H, and the previous $88 Million Measure G programs. The District's previous Measure V bond was substantially complete prior to Prop 39. Proceeds from the Measure J Bond are intended to develop a ten year technology fund, help improve energy efficiency, and continue to modernize, expand, improve and create new facilities within the District. The Measure J election results indicated a 65.9% affirmation among registered voters within the Sequoia Union High School District. All projects funded by the issuance of Measure J general obligation bonds will be subject to review both by the District s Board of Trustees and by an independent citizens oversight committee. The District will also provide many public forums to present progress and seek input from community members, parents, and staff. NOTE 2 - CITIZEN S OVERSIGHT COMMITTEE Duties of the committee include ensuring that bond revenues are expended only for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities. The committee must also ensure that no funds are used for any teacher or administrative salaries or other school operation expenses. Furthermore, the committee is authorized to receive and review copies of the annual independent performance audit and the annual independent financial audit required by Article XIIIA, Section 1(b)(3)(C) and Article XIIIA, Section 1(b)(3)(D), respectively, of the California Constitution. The Committee was formed by the Board of Trustees and met throughout each fiscal year during the span of the bond program. The Citizens Bond Oversight Committee was comprised of the following members as of August 31, 2016: 1. Janet Hart 2. Carole Haythornewhite 3. Christy Heaton 4. Robert Hutson 5. Larry Moody 7

11 SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND Notes to Program Statements August 31, 2016 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basis of accounting utilized in preparation of this report may differ from accounting principles generally accepted in the United States of America. Accordingly, the accompanying program statement is not intended to present the financial position and the results of operations in conformity with accounting principles generally accepted in the United States of America. Revenue and expenditures incurred for Proposition 39/Measure J Bond proceeds are recorded on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenue is recognized when it is measureable and available, not when the payment is received. Similarly, expenses are recognized when they are incurred, not when they are paid. 8

12 SCHEDULE OF FINDINGS AND RECOMMENDATIONS 9

13 SEQUOIA UNION HIGH SCHOOL DISTRICT PROPOSITION 39/MEASURE J BOND Schedule of Findings and Recommendations August 31, 2016 ** No findings or exceptions noted ** 10

14 OTHER INDEPENDENT AUDITOR S REPORTS 11

15 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 Measure J Citizens Oversight Committee and Governing Board Members Sequoia Union High School District We have audited, 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, the accompanying Proposition 39/Measure J Bond program statements of the Sequoia Union High School District as of and for the period ended June 30, Internal Control over Financial Reporting In planning and performing our audit, we considered the Sequoia Union High School District s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the program financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Sequoia Union High School District s internal control. Accordingly, we do not express an opinion on the effectiveness of the Sequoia Union High School District s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Proposition 39/Measure J Bond of Sequoia Union High School District s program statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination Saratoga Ave, Suite 180, San Jose, CA Tel: E-Fax: info@cnallp.com

16 of program statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. October 5, 2016 San Jose, California Saratoga Ave, Suite 180, San Jose, CA Tel: E-Fax: info@cnallp.com

17 INDEPENDENT AUDITOR S REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON THE MEASURE J BOND PROGRAM Measure J Citizens Oversight Committee and Governing Board Members Sequoia Union High School District Compliance We have audited Sequoia Union High School District's (the District) compliance with Proposition 39/Measure J Bond of the February 5, 2008 presidential primary election, as approved under Proposition 39, and with the performance requirements referred to in Proposition 39 and outlined in Article XIIIA, Section 1(b)(3)(C) of the California Constitution. Management s Responsibility Compliance with the requirements referred to above is the responsibility of the District s management. Auditor s Responsibility Our responsibility is to express an opinion on the District s compliance with the laws and regulations identified above based on our audit. We conducted our audit of compliance 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 noncompliance with the compliance requirements referred to above that could have a material effect on compliance with the laws and regulations have occurred. An audit includes examining, on a test basis, evidence supporting the District s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. The following summarizes specific procedures performed during our audit, but is not intended to be an all-inclusive list: 1. We verified that bond proceeds were deposited in the District s name and invested in accordance with applicable legal requirements. 2. We tested payments made to the architectural service companies and reviewed the terms of the contract. 3. We tested approximately 80% of the expenditures from July 1, 2015 through August 31, 2016, which totaled $362,070, to ensure they were valid, allowable and accurate. We believe our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the District s compliance with those requirements Saratoga Ave, Suite 180, San Jose, CA Tel: E-Fax: info@cnallp.com

18 Opinion In our opinion, the District complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on the Proposition 39/Measure J Bond program for the period ended August 31, Purpose of This Report The purpose of this report is solely to describe the scope of our testing over compliance and the results of that testing based on the standards referred to above. Accordingly, this report is not suitable for any other purpose. October 5, 2016 San Jose, California Saratoga Ave, Suite 180, San Jose, CA Tel: E-Fax: info@cnallp.com