School District must complete a deficit reduction plan

Transcription

1 . jscotrwheaton.. - Due to ROB on October 15th Due to ISBE on November 15th SDIJA1 5 X School District Joint Agreement School DistrictlJoint Agreement Information (See instructions on inside of this page.) 1S~~1 District/Joint Agreement Number County Name: COOK Name ot School Oistrict/Joint Agreement: CALUMET CITY SCHOOL DISTRICT #155 Address: 54 SUPERIOR City: CALUMET CITY Address: tdaradav@calumetcityl55.org Zip Code: ILLINOIS STATE BOARD OF EDUCATION School Business Services Division 1 North First Street, Springfield, Illinois / Illinois School DistrictlJoint Agreement Annual Financial Report * June 3, 215 U Accounting Basis: CASH ACCRUAL Filing Status: Submit electronic AFR directly to ISBE Click on the Link to Submit: Send ISBE a File School District must complete a deficit reduction plan Certified Public Accountant Information Name of Auditing Firm: JOHN KASPEREK CO:,!NC. Name of Audit Manager: JOHN KASPEREK JR. Address: 1471 RING ROAD ~ity: State: Zip Cod - -~ 649 Phone Number Fax Number: (78) (78) il. License Number xplration Date: [ Address: Annual Financial Report Type of Auditor s Report issued: X Qualified ~ Unqualified X Adverse Disclaimer A-133 Single Audit Status: X~ YES I NO Are Federal espenditures greater than $5,? Ix YES NO Is all A-133 Single Audit Information completed and attached? - YES NO Were any financiai statement or federal awards findings issued -.~ -- ikasderek@kaa~cdacom. - ISBE Use Only X Reviewed by District SuperintenderitiAdministrator Reviewed by Township Treasurer (Cook County only) ~ Reviewed by Regionai Superintendent/Cook lsc Name of Township: THORNTON FRACTIONAL District Superintendent/Administrator Name (Type or Print) Township Treasurer Name (type or print( RegionalSuperintendent/Cook isc Name (Type or Printj: Address: Address: Address: tparaday@calumetcjtv155.org - Jtftwp@aol.com -. Telephone: Fax Number: Telephone: Fax Number: Telephone: Fax Number: (78) (78) ~78) (78) I Signature & Date: Signatur te Signature & Date- This ~ bta, Chapter ~ form is based on 23 iiiinois Administrative Code, Subtitle A, Chapter i. Subchapter C, Part 1. ISBE Form SD5O-351JA5-6 (5/15) In some instances, use of open account codes Icells) may not be authorized by statute or administrative rule. Each school district or joint agreement is responsible for obtaining the concurring legal opinion and/or others upporting authorization/documentation, as necessary, to use the applicable account code Icell). Printed: 114/ AFR

2 TABLE OF CONTENTS TAB Name AFR Page No. Auditors Questionnaire Aud Quest 2 Comments Applicable to the Auditors Questionnaire Aud Quest 2 Financial Profile Information FP Info 3 Estimated Financial Profile Summary Financial Profile 4 Basic Financial Statements Statement of Assets and Liabilities Arising from Cash Transactions/Statement of Position Assets-Liab Statement of Revenues Received/Revenues, Expenditures Disbursed/Expenditures, Other Sources (Uses) and Changes in Fund Balances (All Funds) Acct Summary 7-S Statements of Revenues Received/Revenues (All Funds) Revenues 9-14 Statements of Expenditures Disbursed/Expenditures Budget to Actual (All Funds) Expenditures Supplementary Schedules Federal Stimulus - American Recovery and Reinvestment Act (ARRA) Schedule ARRA Sched Schedule of Ad Valorem Tax Receipts Tax Sched 24 Schedule of Short-Term Debt/Long-Term Debt Short-Term Long-Term Debt 25 Schedule of Restricted Local Tax Levies and Selected Revenue Sources/ Schedule of Tort Immunity Expenditures Rest Tax Levies-Tort Im 26 Statistical Section Schedule of Capital Outlay and Depreciation Cap Outlay Deprec 27 Estimated Operating Expenditures Per Pupil and Per Capita Tuition Charge Computation PCTC-OEPP Estimated Indirect Cost Rate for Federal Programs (Section I, Section II) ICR Computation Report on Shared Services or Outsourcing Shared Outsourced Serv. ~j. Administrative Cost Worksheet AC 32 Itemization Schedule ITEMIZATION 33 Reference Page REF 34 Notes, Opinion Letters, etc Opinion-Notes Deficit Reduction Calculation Deficit AFR Sum CaIc 36 Audit Checklist/Balancing Schedule AUDITCHECK A-133 Single Audit Section Annual Federal Compliance Report A-133 Cover - CAP INSTRUCTIONS/REQUIREMENTS: For School Districts/Joint Agreements All School Districts/Joint Agreements must complete this form (Note: joint agreement supplementary/statistical schedules may not be applicable) Round all amounts to the nearest dollar. Do not enter cents. (Exception: g Month ADA on page 28, line 78) This form complies with Part 1 (Requirements for Accounting, Budgeting, Financial Reporting, and Auditinqi. 23, um,u,~ Administrative Code 1, Subtitle A, Chapter I, Subchapter C lpsrt 11 Any errors left unresolved by the Audit Checklist/Balancing Schedule must be explained in the itemization page. Submit AFR Electronically * The Annual Financial Reports (AFR) must be submitted directly through the Attachment Manager to the AFR Group by the Auditor or School District designated personnel (Please see Instructions for complete submission procedures). Attachment Manager Link Note: CD/Disk no longer accepted. * AFR supporting documentation must be embedded as Microsoft Word (.doc), Word Perfect (*.wpd) or Adobe (*.pdf) and inserted within tab Opinions & Notes. These documents include: The Audit, Management letter, Opinion letters, Compliance letters, Financial notes etc... For embedding instructions see Opinions & Notes tab of this form. Note: Adobe Acrobat (*.pdf) files cannot be embedded if you do not have the software. Simply attach files as separate docs in the Attachment Manager and they will be embedded for you. Submit Paper Copy of AFR with Signatures 1) The auditor must send three paper copies of the AFR form (cover through page 8 at minimum) to the School District with the auditor signature. Note: School Districts and Regional Superintendents may prefer a complete paper copy in lieu of an electronic file. Please comply with their requests as neccessary, 2) Upon receipt, the School District retains one copy for their records, signs, and forwards the remaining two copies to the Regional Superintendent s office no later than October 15, annually. 3) Upon receipt, the Hegional Superintendents office retains one copy for their records, signs, and forwards the remaining paper copy to ISBE no later than November 15, annually. Yellow Book, CPE, and Peer Review requirements must be met if the Auditor issues an opinion stating Governmental Auditing Standards were utilized. Single Audit Act A-133 Qualifications of Auditing Firm * School District/Joint Agreement entities must verify the qualifications of the auditing firm by requesting the most current peer review report and the corresponding acceptance letter from the approved peer review program, for the current peer review period. * A school district/joint agreement who engages with an auditing firm who is not licensed and qualified will be required to complete a new audit by a qualified auditing firm at the school district s/joint agreement s expense. Printed: 11/4/ AFR

3 John Kas, r~ Co., Inc. ertified PublicAccountants INDEPENDENT AUDITOR S REPORT ON SUPPLEMENTARY INFORMATION To the Board of Education Calumet City School District No.155 Calumet City, Illinois We have audited the financial statements of Calumet City School District No.155 (District) as of and for the year ended June 3, 215, and the related notes to the financial statements, which collectively comprise the District s basic financial statements and have issued our reports thereon dated October 3, 215, which contained an adverse opinion on those financial statements because the financial statements are not prepared in accordance with generally accepted accounting principles. However, the financial statements were found to be fairly stated on the regulatory basis of accounting, in accordance with regulatory reporting requirements established by the Illinois State Board of Education, which is a comprehensive basis of accounting other than generally accepted accounting principles. Our audit was performed for the purpose of forming opinions on the basic financial statements as a whole. The accompanying Annual Financial Report is presented for purposes of additional analysis and is not a required part of the basic financial statements. As described more fully in Note I, these regulatory-based financial statements are issued to comply with regulatory provisions prescribed by the Illinois State Board of Education, which is a comprehensive basis of accounting other than, and differs from, accounting principles generally accepted in the United States of America. They are intended to assure effective legislative and public oversight of school district financing and spending activities of accountable Illinois public school districts. The effects on the financial statements of the variances between these regulatory accounting practices and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material. The accompanying Basic Financial Statements, Supplementary Schedules, and Notes to Financial Statements, as listed in the table of contents, are the responsibility of management and were derived from and related directly to the underlying accounting and other records used to prepare the basic financial statements. That information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, that information is fairly stated in all material respects in relation to the basic financial statements as a whole. The financial profile information, estimated financial profile summary, statistical section, estimated indirect cost rate for federal programs, report on shared services or outsourcing, administrative cost worksheet, itemization schedule and deficit reduction calculation has not been subjected to the auditing procedures applied in the audit ~f the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Calumet City, Illinois October 3, 215 Telephone: (78) I Facsimile (78) Ring Road I Calumet City, Illinois 649

4 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, 215 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Calumet City School District No. 155 (the District ) is located in Thornton Fractional Township, in Southern Cook County, Illinois. The District is responsible for educating students in kindergarten through eighth grade who reside within the boundaries of a portion of Calumet City. The District operates three schools, Wentworth Jr. High School, Wentworth Intermediate School, and Woodrow Wilson School. Its accounting structure conforms to the guidelines prescribed by the Illinois State Board of Education for public local educational agencies in the State of Illinois. A. THE FINANCIAL REPORTING ENTITY The District is a primary government. It is governed by a Board of Education composed of seven elected board members. These financial statements present Calumet City School District No. 155, a legally separate and fiscally independent government. There are no legally separate organizations for which the elected officials of the District are financially accountable that would be considered to be component units of the District s financial reporting entity. B. BASIS OF PRESENTATION - FUND ACCOUNTING The accounts of the District are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets and liabilities (arising from cash transactions). fund balance, revenues received and expenditures disbursed. The District maintains individual funds required by the State of Illinois. The various funds are summarized by type in the financial statements. District resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The District uses the following fund types and account groups: Governmental Fund Types Governmental Funds are those through which most governmental functions of the District are financed. The acquisition, use and balances of the District s expendable financial resources and the related liabilities (arising from cash transactions) are accounted for through governmental funds. The General Fund, which consists of the Educational Fund and the Operations and Maintenance Fund, is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds, which include the Transportation Fund and the Municipal Retirement/Social Security Fund, are used to account for cash received from specific sources (other than those accounted for in the Debt Service Fund or Fiduciary Funds) that are legally restricted to cash disbursements for specified purposes. The Debt Service Fund (Bond and Interest Fund) accounts for the accumulation of resources for, and the payment of general long-term debt principal, interest and related costs. The Capital Projects Fund (Site and Construction Fund) accounts for linancial resources to be used for the acquisition or construction of major capital facilities. The Working Cash Fund accounts for financial resources held by the District to be used for temporary and permanent interfund loans to any other fund in the District. I of 24

5 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, 215 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Fiduciary Fund Types Fiduciary Funds are used to account for assets held by the District in a trustee capacity or as an agent for individuals. private organizations. other governments, or other funds. The Agency Funds (Activity Funds) include both Student Activity Funds and Convenience Accounts. They account for assets held by the District as an agent for the students and teachers. These funds are custodial in nature and do not involve the measurement of the results of operations. The amounts due to the activity fund organizations are equal to the assets. Governmental Funds - Measurement Focus The linancial statements of all governmental funds focus on the measurement of spending or financial flow and the determination of changes in financial position rather than upon net income determination. This means that only cultent assets and current liabilities are generally included on their statement of assets and liabilities arising from cash transactions. The reported fund balance (net current assets) is considered a measure of available spendable resources. Governmental fund operating statements present increases (cash collected and other financing sources) and decreases (cash payments and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of available spendable resources during a period. General Fixed Assets and General Long-Term Debt Account Group The accounting and reporting treatment applied to the fixed assets and long-term liabilities associated with a fund are determined by its measurement focus. Fixed assets used on governmental fund type operations are accounted for in the General Fixed Assets Account Group, rather than in governmental funds. Long-term liabilities expected to be financed from governmental funds are accounted for in the General Long-Term Debt Account Group, not in the governmental funds. The two account groups are not funds. They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. C. BASIS OF ACCOUNTING Basis of accounting refers to when revenues and expenditures are recognized in the accounts and how they are reported on the financial statements. The District maintains its accounting records for all funds and account groups on the cash basis of accounting under guidelines prescribed by the Illinois State Board of Education. Accordingly, revenues are recognized and recorded in the accounts when cash is collected. In the same manner expenditures are recognized and recorded upon the payment of cash. Assets of a fund are only recorded when a right to collect cash exists which arises frog~ a previous cash transaction. Liabilities of a fund. similarly. result from previous cash transactions. Cash basis financial statements omit recognition of receivables and payables and other accrued and deferred items that do not arise from previous cash transactions. Proceeds from sales of bonds are included as other financing sources in the appropriate fund on the date received. Related bond principal payable in the future is recorded at the same time in the General Long-Term Debt Account Group. 2 of 24

6 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, 215 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED D. BUDGETS AND BUDGETARY ACCOUNTING The budget for all governmental fund types is prepared on the cash basis of accounting which is the same basis that is used in financial reporting, except that the budget basis excludes on-behalf payments for which the District is not legally responsible. This difference has no effect on the excess (deficiency) of revenues received and other financing sources over (under) expenditures disbursed and other linancing uses because on-behalf revenues received and expenditures disbursed are equal. The budget. which was not amended, was passed on September For each fund, total fund expenditures disbursed may not legally exceed the budgeted amounts. The budget lapses at the end of each fiscal year. The District, in accordance with Chapter 15, Section 5/17-1 of the Illinois Compiled Statutes, follows these procedures in establishing the budgetary data reflected in the financial statements. I. Prior to July 1, the Superintendent submits to the Board of Education a proposed operating budget for the fiscal year commencing on that date. The operating budget includes proposed expenditures disbursed and the means of financing them. 2. A public hearing is conducted to obtain taxpayer comments. 3. Prior to October 1. the budget is legally adopted through passage of a resolution. 4. Formal budgetary integration is employed as a management control device during the year. 5. The Board of Education may make transfers between the various items in any fund not exceeding in the aggregate 1% of the total of such fund as set forth in the budget. 6. The Board of Education may amend the budget (in other ways) by the same procedures required of its original adoption. E. CASH AND INVESTMENTS The Thornton Fractional Township School Treasurer is the official custodian of monies for the school districts within the township, including the District, as prescribed by Chapter 15. Section 5, Article 8 of the Illinois Compiled Statutes. The Township School Treasurer s Office, a legally separate entity under the oversight of the Thornton Fractional Township Trustees of Schools, pools the districts monies and invests, on the districts behalf, in a cash and investment portfolio. The Township School Treasurer s Office has adopted a formal written investment and cash management policy. The policy requires collateralization or independent third party insurance for deposits in federally insured institutions in excess of FDIC coverage limits, and other institutions in which the Treasurer s Office has invested. The Township School Trustees must approve the type of institution in which investments are made. The Thornton Fractional Township School Treasurer is separately audited and is not included in these financial statements. Financial information may be obtained directly from the Thornton Fractional Township School Treasurer at 66 Burnham Avenue, Calumet City. Illinois 649. Deposits held in the District s name, consisting of imprest and activity fund accounts, are reported at cost. The District s equity in the Township School Treasurer s Pool is reported based on the cost or amortized cost of the underlying deposits and investments of the pool, which approximates fair value. Interest earned is deposited quarterly into the participating school districts various funds. 3 of 24

7 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, 215 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED F. GENERAL FIXED ASSETS General fixed assets have been acquired for general governmental purposes. At the time of purchase. assets are recorded as expenditures disbursed in the Governmental Fund and capitalized at cost in the General Fixed Assets Account Group. Donated general fixed assets are stated at estimated fair market value as of the date of acquisition. Depreciation accounting is not considered applicable. G. MEMORANDUM ONLY - TOTAL COLUMNS The total columns presented in the combined financial statements are captioned Memorandum Only to indicate that they are presented only to facilitate financial analysis. No consolidating entries or other eliminations were made in the aggregation of the totals; thus, they do not present consolidated information and do not purport to present financial position or results of operations of the District as a whole. H. COMPARATIVE DATA Comparative totals for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in the District s financial position and operations. However, comparative data (presentation of prior year amounts by fund type) in each of the statements has not been included since their inclusion would make the combined statements unduly complex and difficult to read. I. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. J. USE OF RESTRICTED RESOURCES When both restricted and unrestricted resources are available to use, it is the District s policy to use restricted resources first, then unrestricted resources, as they are needed. K. INVENTORIES It is the District s policy to charge all purchases of items for resale or supplies to expenditures when purchased. inventory accounts are maintained to reflect the values of resale or supply items on hand. No 2. DEPOSITS AND INVESTMENTS The District is allowed to invest in securities as authorized by the Illinois Compiled Statutes, Chapter 3, Sections 235/2 and 235/6; and Chapter 15, Section 5/8-7. The District s cash is deposited with the I hornton Fractional Township School Treasurer s Office. The Treasurer invests the cash in a pool under policy guidelines established through the Treasurer s investment policy. Credit risk, concentration of credit risk, and interest rate risk (as applicable) regarding the cash held by the Treasurer is included in the annual audited financial statements of the Thornton Fractional Township Trustees of Schools. All deposits and investments of the District, except imprest and activity fund accounts, are maintained in the external cash and investment pool managed by the Thornton Fractional Township School Treasurer s Office. Each fund type s portion of this pool is displayed on the combined statement of assets and liabilities arising from cash transactions as Cash/investments - pooled accounts. As of June 3, 215, there was no material difference between the fair value 4 of 24

8 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, DEPOSITS AND INVESTMENTS - CONTINUED and reported amount of the District s equity in the pool. were entirely covered by federal depository insurance. The District s imprest and activity fund accounts at year-end 3. INTERFUND RECEIVABLES AND PAYABLES The District had no interfund loans outstanding at June 3, CHANGES IN GENERAL FIXED ASSETS A summary of changes in General Fixed Assets follows: Balance Balance July 1,214 Additions Deletions June 3, 215 Land $ 219,64 $ - $ - $ Construction in Progress Land Improvements 858, ,56-1, Buildings and Improvements ,595 OtherEquipment 1,654, ,32 2,199,772 $ 18,27,8 $ 1.449,157 $ 86,32 $ 19,39,25 5. GENERAL LONG-TERM DEBT Changes in general long-term debt are summarized as follows: Balance Balance Due Within July Additions Reductions June One Year General Obligation Bonds $ $ - $ (775.) $ $ 85. Capital Lease Obligations 137,361 - (31.231) 16,13 32,742 Total Long-Term Debt $ 3,456,234 $ - $ (86,231) $ 29,65.3 $ of 24

9 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, GENERAL LONG-TERM DEBT - CONTINUED A. BONDS PAYABLE General obligation bonds payable at June 3, 215 are comprised of the following individual issues: Series 29C Capital Appreciation Taxable Refunding bonds, issued for $6,243, dated October 8, 29 (refunding of non-voting portion of series 26C). providing for the serial retirement of principal on December 1 with final payment due on June , at rates ranging from 6.75 to 7.15 percent through 229. $ 6.243,873 Series 212A Refunding Limited School bonds, issued for $3,695, dated August (refunding of 29A limited school bonds and a portion of series 29B taxable limited school bonds), providing for the serial retirement of principal on December 1 and interest payable on June I and December 1, at a rate of 3.1 percent through , Series 212B Taxable Refunding Limited School Bonds, issued for $1,74, dated August 15, 212 (refunding a portion of series 29B taxable limited school bonds and a portion of series 29E taxable refunding school bonds), providing for the serial retirement of principal on December 1 and interest payable on June 1 and December 1, at a rate of 3.9 percent through , Series 212C Taxable Refunding School bonds, issued for $2,365, dated August 15, 212 (refunding of a portion of series 29E taxable refunding school bonds), providing for the serial retirement of principal on December 1 and interest payable on June 1 and December 1 at rates ranging from 1.35 to 5.3 percent through 232. $ At June 3, 215 the annual cash flow requirements of bond principal and interest are as follows: Year Ending June 3 Principal Interest Total 216 $ 85, $ 972,997 $ 1.777, ,87 1,957, , ,444, ,61. 83,2 2.44, , , , , , , $ 29, $ 24, $ 54,186,19 In prior years. the District defeascd certain general obligation bonds by placing the refunding portion of the proceeds of new bonds in irrevocable trusts to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the District financial statements. 6 of 24

10 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, GENERAL LONG-TERM DEBT - CONTINUED As of June , $26,357,737 of bonds outstanding are considered defeased. As of June the District s legal debt margin is zero based on a debt limitation of $ equal to 6.9% of the 214 equalized assessed valuation of $97,567,16 and outstanding debt of $29,65,3. The Illinois School Code permits school districts to issue certain types of bonds, such as the Series 29 and series 212 Bonds, in excess of statutory debt limitations. B. OPERATING LEASE OBLIGATIONS In 214. the District acquired a copier under the provisions of a lease agreement. The copier s lease is for five years and expires August 218. All lease terms are subject to annual appropriation of funds for the rental payments. Year Ending June 3 Principal Interest Total 216 $ 32,742 $ $ , ,986 1,75 37, , $ 16,13 $ 8.14 $ 114,27 6. DEFICIT FUND BALANCES At June , the District had no deficit fund balances. 7. PROPERTY TAXES The Districts property tax is levied each year on all taxable real property located in the District on or before the last Tuesday in December. Property is appraised by the County Assessor at various percentages of fair market value and then subjected to equalization by the Illinois Department of Revenue to bring the aggregate County level toward the statutory standard of 33-1/3 of fair market value. Property taxes levied for any year attach as an enforceable lien on property as of January 1 and are due and payable in the following calendar year. Real estate tax bills are payable in two installments. The first installment is computed at 55% of the prior year s bill and is mailed in late January with a March 1 due date. The second installment is computed after the assessed valuations for the current year have been determined, usually in August or September. Final tax bills are mailed with a penalty date at least 3 days after the date of mailing, but not earlier than August 1. The District receives significant distributions of tax receipts approximately one month after these due dates. The District considers that the first installment of the 214 levy is to be used to finance operations in fiscal 215. The District has determined that the second installment of the 214 levy is to be used to finance operations in fiscal 216. The Board passed the current levy on December 23, 214. The following are the tax rate limits permitted by the School Code and by local referendum and the actual rates levied per $1. of equalized assessed valuation. 7 of 24

11 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, PROPERTY TAXES - CONTINUED Actual Actual Limit 214 Levy 213 Levy Education Building Transportation As needed Municipal Retirement As needed Social Security As needed Bond and Interest As needed For taxing districts in Cook County. including the District, the tax rate limit is required to be applied to the equalized assessed valuation (EAV) of property for the levy year prior to the levy year for which taxes are then being extended. The actual levy rate is stated based on the current EAV of property. As a result, a tax rate may be at its maximum for the levy year even though it is less than its corresponding limit. 8. OVEREXPENDITURE OF BUDGET At June the following funds over expended their budget: Fund Budget Actual Expenditures Difference Operation and Maintenance $ 2,25,69 $ 3.31,399 $ 1,15,33 Bond and Interest $ 1, $ 1,778,336 $ 19, JOINT VENTURES EXCEPTIONAL CHILDREN HAVE OPPORTUNITIES (A JOINT AGREEMENT) The District is a participant in Exceptional Children Have Opportunities (ECHO). which was established as a result of a joint agreement between 17 local public school districts for the purpose of providing special education services to the children of its member districts. The joint agreement is governed by a Board of Directors composed of superintendents (or an alternative person appointed by the superintendent) from each member district. Complete financial statements of the joint agreement may be obtained from its administrative office at 35 West 154th Street, South Holland, Illinois The District paid $ to ECHO for tuition and services during the year ended June The following is summary financial information on the joint agreement as of and for the year ended June the most recent information available: 8 of 24

12 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, JOINT VENTURES - CONTINUED Total assets - modified cash basis $ ,465 Revenues Received $ 41, Total liabilities - modified cash basis $ Expenditures disbursed $ 42,527,24 Net assets - invested in capital assets. modified cash basis $ 5,427,275 Net increase/(dccrease) in fund balance $ (1.151,313) Unrestricted net assets - modified cash $ Total net assets - modified cash basis $ , RISK MANAGEMENT The District is exposed to various risks of loss including general liability, property and casualty, errors and omissions. workers compensation. unemployment compensation, and employee health and accident. In lieu of paying unemployment contributions, the District has elected to reimburse the State of Illinois for the actual amount of benefits paid to their former workers. The District has joined together with other school districts to form various pools through which to manage its risk of loss. The District is a member of the Collective Liability Insurance Cooperative (CLIC) for its general liability, property and casualty. and errors and omissions coverage and Illinois Public Risk Fund for workers compensation coverage. These public entity risk pools operate as common risk management and insurance programs. They receive premiums from member districts and reinsure through commercial companies to limit the liability for claims in excess of coverage provided by the pool. The District had no significant decreases in coverage nor have any claims exceeded coverage in the past three fiscal years. 11. CONTINGENCIES The District has received funding from State and Federal grants in the current and prior years which are subject to audits by the granting agencies. Such audits could lead to requests for reimbursement to the grantor agency for expenditures disallowed under terms of the grant. Based on prior experience, District management believes that such disallowances, if any, would be immaterial. 12. EMPLOYEE RETIREMENT PROGRAMS A. TEACHERS RETIREMENT SYSTEM General Information about the Pension Plan Plan description The District participates in the Teachers Retirement System of the State of Illinois (TRS). TRS is a cost-sharing multiple-employer delined benefit pension plan that was created by the Illinois legislature for the benefit of Illinois public school teachers employed outside the City of Chicago. TRS members include all active nonannuitants who are employed by a TRS-covered employer to provide services for which teacher licensure is required. The Illinois Pension Code outlines the benefit provisions of TRS. and amendments to the plan can be made only by legislative action with the Governor s appioval. The TRS Boaid of Trustees is responsible for the System s administration. TRS issues a publicly available financial report that can be obtained at j//t~s.illin~isgo~iuhsicafr; by writing to the TRS at 2815 W. Washington Street, P.O. Box Springfield, Illinois 62794; or by calling (888) option 2. 9 of 24

13 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, EMPLOYEE RETIREMENT PROGRAMS - CONTINUED Benefits provided TRS provides retirement, disability, and death benefits. Tier I members have TRS or reciprocal system service prior to January Tier I members qualify for retirement benefits at age 62 with five years of service. at age 6 with 1 years, or age 55 with 2 years. The benefit is determined by the average of the four highest years of creditable earnings within the last 1 years of creditable service and the percentage of average salary to which the member is entitled. Most members retire under a formula that provides 2.2 percent of final average salary up to a maximum of 75 percent with 34 years of service. Disability and death benefits are also provided. Tier II members qualify for retirement benefits at age 67 with 1 years of service, or a discounted annuity can be paid at age 62 with 1 years of service. Creditable earnings for retirement purposes are capped and the final average salary is based on the highest consecutive eight years of creditable service rather than the last four. Disability provisions for Tier II are identical to those of Tier I. Death benefits are payable under a formula that is different from Tier I. Essentially all Tier I retirees receive an annual 3 percent increase in the current retirement benefit beginning January 1 following the attainment of age 61 or on January 1 following the member s first anniversary in retirement, whichever is later. Tier II annual increases will be the lesser of three percent of the original benefit or one-half percent of the rate of inflation beginning January 1 following attainment of age 67 or on January 1 following the member s first anniversary in retirement, whichever is later. Contributions The State of Illinois maintains the primary responsibility for funding TRS. The Illinois Pension Code, as amended by Public Act and subsequent acts, provides that for years 21 through 245, the minimum contribution to the System for each fiscal year shall be an amount determined to be sufficient to bring the total assets of the System up to 9 percent of the total actuarial liabilities of the System by the end of fiscal year 245. Contributions from active members and TRS contributing employers are also required by the Illinois Pension Code. The contribution rates are specified in the pension code. The active member contribution rate for the year ended June 3, 215, was 9.4 percent of creditable earnings. The member contribution, which may be paid on behalf of employees by the employer, is submitted to TRS by the employer. On-behalf contributions to TRS. The State of Illinois makes employer pension contributions on behalf of the District. For the year ended June 3, 215, State of Illinois contributions recognized by the employer were based on the State s proportionate share of the collective net pension liability associated with the employer, and the employer recognized revenue and expenditures of $2,5,537 in pension contributions freim the State of Illinois. 2.2 formula contributions. Employers contribute.58 percent of total creditable earnings for the 2.2 formula change. The contribution rate is specified by statute. Contributions for the year ended June were $36.l64, and are deferred because they were paid after the June 3, 214 measurement date. Federal and special trust fund contributions. When TRS members are paid from federal and special trust funds administered by the District, there is a statutory requirement for the District to pay an employer pension contribution from those lunds. Under a policy adopted by the TRS Board of Trustees that has been in effect since the fiscal year ended June 3. 26, employer contributions for employees paid from federal and special trust funds will be the same as the State contribution rate to TRS. Public Act now requires the two rates to be the same. For the year ended June the employer pension contribution was 33. percent of salaries paid from federal and special trust funds. For the year ended June salaries totaling $13,983 were paid from federal and special trust funds that required employer contributions of $4,614. These contributions are deferred because they were paid after the June 3, 214 measurement date. 1 of 24

14 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, EMPLOYEE RETIREMENT PROGRAMS - CONTINUED Early retirement cost contribution. Under GASB Statement No. 68, contributions that an employer is required to pay because of a TRS member retiring are categorized as specific liability payments. The employer is required to make a one-time contribution to TRS for members retiring under the Early Retirement Option (ERO). The payments vary depending on the member s age and salary. The maximum employer ERO contribution under the current program is percent and applies when the member is age 55 at retirement. For the year ended June , the employer paid $ to TRS for employer ERO contributions. The employer is also required to make a one-time contribution to TRS for members granted salary increases over 6 percent if those salaries are used to calculate a retiree s final average salary. A one-time contribution is also required for members granted sick leave days in excess of the normal annual allotment if those days are used as TRS service credit. For the year ended June 3, 215, the employer paid $ to TRS for employer contributions due on salary increases in excess of 6 percent and $ for sick leave days granted in excess of the normal annual allotment. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 3, 215, the employer reported a liability for its proportionate share of the net pension liability (first amount shown below) that reflected a reduction for State pension support provided to the employer. The State s support and total are for disclosure purposes only. The amount recognized by the employer as its proportionate share of the net pension liability, the related State support, and the total portion of the net pension liability that was associated with the employer were as follows: Employers proportionate share of the net pension liability $ 636,4 State s proportionate share of the net pension liability associated with the employer 36,773,147 Total $ 37,49,547 The net pension liability was measured as of June and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 3, 213, and rolled forward to June The employer s proportion of the net pension liability was based on the employer s share of contributions to TRS for the measurement year ended June 3, 214, relative to the projected contributions of all participating TRS employers and the State during that period. At June 3, 214, the employer s proportion was % percent. The net pension liability as of the beginning of this first measurement period under GASB Statement No. 68 was measured as of June , and the total pension liability was based on the June actuarial valuation without any roll-up. The employer s proportion of the net pension liability as of June , was based on the employer s share of contributions to TRS for the measurement year ended June 3, 213. relative to the projected contributions of all participating TRS employers and the State during that period. At June , the employer s proportion was % percent. For the year ended June 3, 215, the employer recognized pension expense of $2,5,537 and revenue of $2,5,537 for support provided by the State. At June 3, 215, the employer reported deferred outflows of resources and deferred inflows of resources related to pensions were from the following sources: II of24

15 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, EMPLOYEE RETIREMENT PROGRAMS - CONTINUED Differences between expected and actual experience Net difference between projected and actual earnings on pension plan investments Changes in proportion and differences between employer contributions and proportionate share of contributions Total Deferred Outflows of Resources $ 336 $ 336 Deferred Inflows of Resources $ $ $ reported as deferred outflows of resources related to pensions resulting from employer contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the reporting year ended June Other amounts reported as deferred outflows of resources and (deferred inflows) of resources related to pensions will be recognized in pension expense as follows: Year ended June 3: $ (39.913) $ (39.913) $ (39,913) $ (39,913) $ (3,83) Actuarial Assumptions The total pension liability in the June 3, 214 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary Increases Investment rate of return 3. percent 5.75 percent. average, including inflation 7.5 percent, net of pension plan investment expense, including inflation Mortality rates were based on the RP-2 White Collar Table with projections using scale AA that vary by member group. For GASB disclosure purposes. the actuarial assumptions for the years ended June and 213 were assumed to be the same. However, for funding purposes. the actuarial valuations for those two years were different. The actuarial assumptions used in the June 3, 214 valuation were based on updates to economic assumptions adopted in 214 which lowered the investment return assumptions from 8. percent to 7.5 percent. The salary increase and inflation assumptions were also lowered. The actuarial assumptions used in the June 3, 213 valuation were based on the 212 actuarial experience analysis and first adopted in the June valuation. The investment return assumption was lowered from 8.5 percent to 8. percent and the salary increase and inflation assumptions wer@ also lowered. Mortality assumptions were adjusted to anticipate continued improvement in mortality. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) arc developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class that were used by the actuary are summarized in the Following table: 12 of 24

16 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, EMPLOYEE RETIREMENT PROGRAMS - CONTINUED Target Long-Term Expected Asset Class Allocation Real Rate of Return U.S. large cap 18% 8.23% Global equity excluding U.S. 18% 8.58% Aggregate bonds 16% 2.27% U.S. TIPS 2~ 3.52% NCREIF 11% 5.81% Opportunistic real estate 4(3 9.79% ARS 8(3 3.27% Risk parity 8(3 5.57% Diversified inflation strategy I (3 3.96% Private equity 14(3 13.3% Total 1(3 Discount rate The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions, employer contributions, and State contributions will be made at the current statutorily-required rates. Based of those assumptions, TRS s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive members and all benefit recipients. Tier I s liability is partially-funded by Tier II members, as the Tier II member contribution is higher than the cost of Tier II benefits. Due to this subsidy. contributions from future members in excess of the service cost are also included in the determination of the discount rate. Therefore, the long-term expected rate of return on TRS investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the employer s proportionate share of the net pension liability to changes in the discount rate The following presents the employer s proportionate share of the net pension liability calculated using the discount rate of 7.5 percent. as well as what the employer s proportionate share of the net pension liability would be if it were calculated using a discount rate that is I-percentage-point lower (6.5 percent) or 1-percentage-point higher (8.5 percent) than the current rate. Current 1% Decrease Discount Rate 1% Increase (6.5%) (7.5%) (8.5%) Employer s proportionate share of the net pension liability $ $ 636,4 $ 512,578 R IMRF PENSION PLAN GASB 5 Plan Description. The District s defined benefit pension plan for Regular employees provides retirement and disability benefits, post retirement increases, and death benefits to plan members and beneficiaries. The District plan is affiliated with the Illinois Municipal Retirement Fund (IMRF), an agent multiple-employer plan. Benefit provisions are established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly available financial report that includes financial statements and supplementary information (SI). That report may be obtained on-line at ~w.in~rf.~g. 13 of 24

17 CALUMET CITY SCHOOL DISTRICT NO. 155 NOTES TO ANNUAL FINANCIAL REPORT JUNE 3, EMPLOYEE RETIREMENT PROGRAMS - CONTINUED Funding Policy. As set by statute, the District s Regular plan members are required to contribute 4.5 percent of their annual covered salary. The statute requires employers to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The District annual required contribution rate for calendar year 214 was percent. The District also contributes for disability benefits, death benefits, and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates 6r disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute. Annual Pension Cost. For fiscal year ending June the District s actual contributions for pension cost for regular were $216,775. Its required contribution for fiscal year 215 was $216,775. Annual required contribution Interest on net pension obligation ARC adjustment Annual pension cost Contribution made Increase in net pension oblig. NPO beginning of year NPO ending of year June S 216,775 1,717 (1,279) 217,213 (216,775) ,891 $ 23,329 THREE-YEAR TREND INFORMATION FOR THE REGULAR PLAN Annual Percentage Year Pension of APC Net Pension Ending Cost (APC) Contributed Obligation 6/3/15 $217,213 99% $23,329 6/3/14 $22,911 99% $22,891 6/3/13 $214,445 99% $22,435 The required contribution for 214 was determined as part of the December 31, 212, actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions at December 31, 212, included (a) 7.5 percent investment rate of return (net of administrative and direct investment expenses), (b) projected salary increases of 4.% a year, attributable to inflation, (c) additional projected salary increases ranging from.4% to 1. % per year depending on age and service, attributable to seniority/merit, and (d) post retirement benefit increases of 3% annually. The actuarial value of the District s Regular plan assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period with a 2% corridor between the actuarial and market value of assets. The District s Regular plan s unfunded actuarial accrued liability at December 31, 212 is being amortized as a level percentage of projected payroll on an open 29 year basis. Funded Status and Funding Progress. As of December 31, 214. the most recent actuarial valuation date, the Regular plan was percent funded. The actuarial accrued liability for benefits was $4,937,646 and the actuarial value of assets was $3,594,173. resulting in an underfunded actuarial accrued liability (UAAL) of $1,343,473. The covered payroll for calendar year 214 (annual payroll of active employees covered by the plan) was $1,765,56 and the ratio of the UAAL to the covered payroll was 76 percent. The schedule of funding progress, presented as supplementary information following the notes to the financial Statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. 14 of 24