LOMBARD ELEMENTARY SCHOOL DISTRICT 44 LOMBARD, ILLINOIS

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1 COMPREHENSIVE ANNUAL FINANCIAL REPORT OF LOMBARD ELEMENTARY SCHOOL DISTRICT 44 LOMBARD, ILLINOIS As of and for the Year Ended June 30, 2016 Officials Issuing Report Dr. Michael Robey, Superintendent of Schools Mr. Ted Stec, Assistant Superintendent for Finance and Operations Department Issuing Report Finance and Operations

2 Introductory Section Transmittal Letter Organizational Chart Principal Officers and Advisors Financial Section LOMBARD ELEMENTARY SCHOOL DISTRICT 44 TABLE OF CONTENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 Page(s) Independent Auditors' Report 1-3 Required Supplementary Information i - iii iv v Management's Discussion and Analysis (MD&A) - Unaudited 4-10 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 11 Statement of Activities 12 Fund Financial Statements Balance Sheet - Governmental Funds Reconciliation of the Governmental Funds - Balance Sheet to the Statement of Net Position 15 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds Reconciliation of the Governmental Funds - Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 18 Statement of Fiduciary Assets and Liabilities - Agency Fund 19 Notes to Basic Financial Statements Required Supplementary Information Illinois Municipal Retirement Fund - Schedule of Changes in the District's Net Pension Liability and Related Ratios 44 Illinois Municipal Retirement Fund - Schedule of District Contributions 45 Teachers' Retirement System - Schedule of the District's Proportionate Share of the Collective Net Pension Liability and Schedule of District Contributions 46 Schedule of Funding Progress For Retiree Health Plan 47

3 TABLE OF CONTENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 Required Supplementary Information - (Continued) General and Major Special Revenue Funds - Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual Page(s) General Fund - Non-GAAP Budgetary Basis Operations and Maintenance Fund 56 Transportation Fund 57 Municipal Retirement/Social Security Fund Notes to Required Supplementary Information 60 Supplementary Information Major Debt Service and Major Capital Projects Funds - Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual Debt Service Fund 61 Capital Projects Fund 62 Fire Prevention and Life Safety Fund 63 General Fund - Combining Balance Sheet 64 General Fund - Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 65 General Fund Accounts - Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual Educational Accounts - Non-GAAP Budgetary Basis Tort Immunity and Judgment Accounts Working Cash Accounts 76 Schedule of Changes in Assets and Liabilities - Agency Funds 77 Operating Cost and Tuition Charge 78 General Obligation Limited Tax Bonds, Series General Obligation Refunding Bonds, Series General Obligation Limited Tax Refunding Certificates, Series 2014A 81 Statistical Section Net Position by Component Changes in Net Position Fund Balances of Governmental Funds Governmental Funds Revenues Governmental Funds Expenditures and Debt Service Ratio 90-91

4 Statistical Section - (Continued) LOMBARD ELEMENTARY SCHOOL DISTRICT 44 TABLE OF CONTENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 Page(s) Other Financing Sources and Uses and Net Change in Fund Balances Assessed Valuation and Estimated Actual Value of Taxable Property Property Tax Rates - All Direct and Overlapping Governments Principal Property Taxpayers in the District 98 Property Tax Levies and Collections 99 Ratio of Outstanding Debt by Type 100 Ratios of General Bonded Debt Outstanding 101 Computation of Direct and Overlapping Debt 102 Legal Debt Margin Information Demographic and Economic Statistics 105 Principal Employers 106 Number of Employees by Type Operating Indicators by Function 109 School Building Information Miscellaneous Statistics 112

5 INDEPENDENT AUDITORS' REPORT Baker Tilly Virchow Krause, LLP 1301 W 22nd St, Ste 400 Oak Brook, IL tel fax bakertilly.com To the Board of Education Lombard Elementary School District 44 Lombard, Illinois Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Lombard Elementary School District 44, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise Lombard Elementary School District 44'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. Auditors' 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 auditors' 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 over financial reporting relevant to Lombard Elementary School District 44'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 Lombard Elementary School District 44'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. ~ ani11dependentmemberof BAKER TILLY INTERNATIONAL - 1-

6 To the Board of Education Lombard Elementary School District 44 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Lombard Elementary School District 44 as of June 30, 2016 and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit for the year ended June 30, 2016 was conducted for the purpose of forming opinions on the financial statements that collectively comprise Lombard Elementary School District 44's basic financial statements. The supplementary information for the year ended June 30, 2016 as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended June 30, 2016, 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, the supplementary information is fairly stated in all material respects, in relation to the basic financial statements as a whole for the year ended June 30, We also previously audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statements of Lombard Elementary School District 44 as of and for the year ended June 30, 2015 (not presented herein), and have issued our report thereon dated November 17, 2015, which contained unmodified opinions on the respective financial statements of the the governmental activities, each major fund, and the aggregate remaining fund information. The supplementary information for the year ended June 30, 2015 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the 2015 financial statements. The information has been subjected to the auditing procedures applied in the audit of the 2015 basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare those financial statements or to those financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole for the year ended June 30,

7 To the Board of Education Lombard Elementary School District 44 Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Lombard Elementary School District 44's basic financial statements. The introductory and statistical section as described in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Prior-Year Comparative Information We have previously audited Lombard Elementary School District 44's 2015 financial statements, and we expressed unmodified audit opinions on the respective financial statements of the governmental activities, each major fund, and the aggregate remaining fund information in our report dated November 17, In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2015, is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 7, 2016 on our consideration of Lombard Elementary School District 44's internal control over financial reporting and on 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 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 Lombard Elementary School District 44's internal control over financial reporting and compliance. Oak Brook, Illinois December 7,

8 Lombard Elementary School District 44 Management's Discussion and Analysis (Unaudited) As of and for the Year Ended June 30, 2016 The discussion and analysis of Lombard Elementary School District 44 s (the "District") financial performance provides an overall review of the District s financial activities as of and for the year ended June 30, The management of the District encourages readers to consider the information presented herein in conjunction with the transmittal letter found in the introductory section and the basic financial statements to enhance their understanding of the District s financial performance. All amounts, unless otherwise indicated, are expressed in millions of dollars. Certain comparative information between the current year and the prior is required to be presented in the Management s Discussion and Analysis (the MD&A ). Financial Highlights In total, net position increased by $4.1. This represents a 6% increase from 2015 and The District performed many capital improvements and coming in under budget on the expenditure side. General revenues accounted for $47.5 in revenue or 71% of all revenues. Program specific revenues in the form of charges for services and fees and grants accounted for $19.0 or 29% of total revenues of $66.5. The District had $62.4 in expenses related to government activities. However, only $19.0 of these expenses were offset by program specific charges and grants. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the District s basic financial statements. The basic financial statements are comprised of three components: Government-wide financial statements, Fund financial statements, and Notes to basic financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements The government-wide financial statements are designed to provide readers with a broad overview of the District s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the District s assets/deferred outflows of resources and liabilities/deferred inflows of resources, with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The statement of activities presents information showing how the government s net position changed during the fiscal year being reported. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods

9 Lombard Elementary School District 44 Management's Discussion and Analysis (Unaudited) As of and for the Year Ended June 30, 2016 The government-wide financial statements present the functions of the District that are principally supported by taxes and intergovernmental revenues (governmental activities). The District has no business-type activities; that is, functions that are intended to recover all or a significant portion of their costs through user fees and charges. The District s governmental activities include instructional services (regular education, special education and other), supporting services, operation and maintenance of facilities and transportation services. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the District can be divided into two categories: governmental funds and fiduciary funds (the District maintains no proprietary funds). Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a school district s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The District maintains seven individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund, Operations and Maintenance Fund, Transportation Fund, IMRF/Social Security Fund, Debt Service Fund, Capital Projects Fund, and Fire Prevention and Safety Fund, all of which are considered to be major funds. The District adopts an annual budget for each of the funds listed above. A budgetary comparison schedule has been provided for each fund to demonstrate compliance with this budget. Fiduciary funds are used to account for resources held for the benefit of parties outside the School District. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the District s own programs. The accounting used for fiduciary funds is much like that for the government-wide financial statements. Notes to basic financial statements The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements

10 Lombard Elementary School District 44 Management's Discussion and Analysis (Unaudited) As of and for the Year Ended June 30, 2016 Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the District s progress in funding its obligation to provide pension benefits to its non-certified employees. Government-Wide Financial Analysis The District s combined net position was higher on June 30, 2016, than it was the year before, increasing 6% to $77.2. Table 1 Condensed Statements of Net Position (in millions of dollars) Assets: Current and other assets $ 69.7 $ 71.9 Capital Assets Total assets Total deferred outflows of resources Liabilities: Current liabilities Long-term liabilities Total liabilities Total deferred inflows of resources Net position: Net investment in capital assets Restricted Unrestricted Total net position $ 73.1 $ 77.2 Revenues in the governmental activities of the District of $66.5 exceeded expenditures by $4.1. This was attributable primarily to adherence to budget, maximizing resources and reduction of organizational inefficiencies

11 Lombard Elementary School District 44 Management's Discussion and Analysis (Unaudited) As of and for the Year Ended June 30, 2016 Table 2 Changes in Net Position (in millions of dollars) Revenues: Program revenues: Charges for services $ 1.7 $ 2.1 Operating grants & contributions General revenues: Taxes General state aid Other Total revenues Expenses: Instruction Pupil & instructional staff services Administration & business Transportation Operations & maintenance Other Total expenses Increase (decrease) in net position $ 4.2 $ 4.1 Property taxes accounted for the largest portion of the District s revenues, contributing 68%. The remainder of revenues came from state, federal grants and other sources. The total cost of all the District s programs was $62.4, mainly related to instructing and caring for the students and student transportation at 84%

12 Lombard Elementary School District 44 Management's Discussion and Analysis (Unaudited) As of and for the Year Ended June 30, 2016 Financial Analysis of the District s Funds The District s Governmental Funds balance increased from $44.1 to $

13 Lombard Elementary School District 44 Management's Discussion and Analysis (Unaudited) As of and for the Year Ended June 30, 2016 General Fund Budgetary Highlights In the General Fund (which includes the Education, Tort Immunity, and Working Cash Accounts), the Districts revenues outweighed the expenditures for the eighth consecutive year. District officials review the General Fund on a regular basis and provide the Board of Education with a statement of expenditures and a statement of income. Both of these reports provide the Board of Education with a monthly budget to actual financial analysis. Revenues in the General Fund were below the budgeted amounts of $41.9 by $0.6. Better than expected revenue from the State of Illinois within mandated categorical grants offset slight shortfalls in local and federal revenue. Expenditures in the General Fund exceeded the budgeted expenditures of $41.3 by $0.1. The District maintained a strict adherence to budget in 2016 as previously mentioned. Capital Assets and Debt Administration Capital assets By the end of 2016, the District had compiled a total investment of $93.4 ($46.9 net of accumulated depreciation) in a broad range of capital assets including buildings, land and equipment. Total depreciation expense for the year was $2.7. More detailed information about capital assets can be found in Note 5 of the basic financial statements. Table 3 Capital Assets (net of depreciation) (in millions of dollars) Land $ 0.4 $ 0.4 Land improvements Buildings Equipment Construction in progress Total $ 45.9 $ 46.9 Long-term debt The District retired $2.0 in bonds and certificates in Net pension liability and other increased by $2.3. At the end of fiscal 2016, the District had a debt margin of $63.1. More detailed information on long-term debt can be found in Note 6 of the basic financial statements. Table 4 Outstanding Long-Term Debt (in millions of dollars) General Obligation Bonds and Certificates $ 9.7 $ 7.7 Net Pension Liability Other Long-Term Liabilities Total $ 17.4 $

14 Lombard Elementary School District 44 Management's Discussion and Analysis (Unaudited) As of and for the Year Ended June 30, 2016 Factors Bearing on the District s Future At the time these financial statements were prepared and audited, the District was aware of the following circumstances that will significantly affect financial operations in the future: The District continues to rely heavily on local resources of revenue (i.e. property tax receipts). Tax levy information and financial projections are updated to reflect current CPI, decreasing EAV, and declining new construction amounts. Additionally, district officials continue to monitor the lack of state funding and its effect on district operations. Requests for Information This financial report is designed to provide the District s citizens, taxpayers, and creditors with a general overview of the District s finances and to demonstrate the District s accountability for the money it receives. If you have questions about this report, or need additional financial information, contact the Business Office: Ted Stec, Assistant Superintendent for Finance and Operations Lombard Elementary School District West Madison Lombard, Illinois

15 STATEMENT OF NET POSITION AS OF JUNE 30, 2016 GOVERNMENTAL ACTIVITIES Assets Cash and investments $ 47,851,758 Receivables (net of allowance for uncollectibles): Property taxes 22,016,369 Replacement taxes 140,050 Intergovernmental 1,019,348 Accounts 387,357 Tuition 413,578 Capital assets: Land 425,032 Depreciable buildings, property and equipment, net 46,521,737 Total assets 118,775,229 Deferred outflows of resources Deferred outflows related to pensions 3,049,380 Total deferred outflows of resources 3,049,380 Liabilities Accounts payable 1,068,122 Salaries and wages payable 2,290,860 Payroll deductions payable 657,809 Retainage payable 102,373 Other current liabilities 98,939 Interest payable 26,495 Long-term liabilities: Other long-term liabilities - due within one year 2,025,000 Other long-term liabilities - due after one year 15,649,878 Total liabilities 21,919,476 Deferred inflows of resources Property taxes levied for a future period 21,949,792 Deferred inflows related to pensions 711,724 Total deferred inflows of resources 22,661,516 Net position Net investment in capital assets 40,575,395 Restricted for: Tort immunity 604,928 Operations and maintenance 5,497,362 Student transportation 1,984,866 Debt service 34,508 Capital projects 1,774 Unrestricted 28,544,784 Total net position $ 77,243,617 See Notes to Basic Financial Statements

16 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2016 FUNCTIONS/PROGRAMS EXPENSES PROGRAM REVENUE CHARGES FOR SERVICES OPERATING GRANTS AND CONTRIBUTIONS NET (EXPENSES) REVENUE AND CHANGES IN NET POSITION GOVERNMENTAL ACTIVITIES Governmental activities Instruction: Regular programs $ 19,887,703 $ 454,253 $ 3,490 $ (19,429,960) Special programs 8,126, ,631 2,491,891 (4,649,183) Other instructional programs 2,643,371 28, ,388 (2,476,960) State retirement contributions 13,176,168-13,176,168 - Support Services: Pupils 2,534, (2,534,471) Instructional staff 4,200,184-80,012 (4,120,172) General administration 1,891, (1,891,499) School administration 1,964, (1,964,726) Business 2,022, , ,504 (1,264,614) Transportation 1,608, ,365 (1,089,447) Operations and maintenance 4,097, ,377 - (3,699,418) Central 8, (8,287) Other supporting services 12, (12,211) Community services 65, (65,072) Interest and fees 117, (117,988) Total governmental activities $ 62,357,934 $ 2,148,108 $ 16,885,818 (43,324,008) General revenues: Taxes: Real estate taxes, levied for general purposes 33,916,849 Real estate taxes, levied for specific purposes 8,239,402 Real estate taxes, levied for debt service 1,683,378 Personal property replacement taxes 818,378 State aid-formula grants 1,923,321 Investment income 133,808 Miscellaneous 755,353 Total general revenues 47,470,489 Change in net position 4,146,481 Net position, beginning of year 73,097,136 Net position, end of year $ 77,243,617 See Notes to Basic Financial Statements

17 GOVERNMENTAL FUNDS BALANCE SHEET AS OF JUNE 30, 2016 WITH COMPARATIVE TOTALS AS OF JUNE 30, 2015 GENERAL FUND OPERATIONS AND MAINTENANCE TRANSPORTATION FUND FUND MUNICIPAL RETIREMENT/SOCIAL SECURITY FUND Assets Cash and investments $ 38,451,388 $ 6,259,903 $ 2,016,262 $ 1,051,859 Receivables (net allowance for uncollectibles): Property taxes 17,244,170 2,368, , ,770 Replacement taxes 140, Intergovernmental 889, ,338 - Accounts 387, Tuition 413, Prepaid items Total assets $ 57,525,553 $ 8,628,866 $ 2,877,598 $ 1,883,629 Liabilities, deferred inflows of resources, and fund balance Liabilities Accounts payable $ 307,221 $ 598,269 $ 162,632 $ - Salaries and wages payable 2,290, Payroll deductions payable 586,188 69,063 1,313 1,245 Retainage payable - 102, Other current liabilities 98, Total liabilities 3,283, , ,945 1,245 Deferred inflows of resources Property taxes levied for a future period 17,192,026 2,361, , ,254 Unavailable state and federal aid receivable 513, ,338 - Unavailable tuition receivable 413, Total deferred inflows of resources 18,119,565 2,361, , ,254 Fund balance Nonspendable Restricted 604,928 5,497,362 1,854,528 1,053,130 Assigned Unassigned 35,517, Total fund balance 36,122,780 5,497,362 1,854,528 1,053,130 Total liabilities, deferred inflows of resources, and fund balance $ 57,525,553 $ 8,628,866 $ 2,877,598 $ 1,883,629 See Notes to Basic Financial Statements

18 DEBT SERVICE FUND CAPITAL PROJECTS FUND FIRE PREVENTION AND LIFE SAFETY FUND TOTAL $ 58,461 $ 12,111 $ 1,774 $ 47,851,758 $ 46,325, , ,016,369 22,122, , ,019, , , , , ,094 $ 898,929 $ 12,111 $ 1,774 $ 71,828,460 $ 69,673,471 $ - $ - $ - $ 1,068,122 $ 842, ,290,860 2,200, , , ,373 33, , ,218,103 3,790, , ,949,792 21,751, , , , ,007,669 21,751, ,094 61,003-1,774 9,072,725 8,509,552-12,111-12,111 12, ,517,852 35,574,032 61,003 12,111 1,774 44,602,688 44,131,766 $ 898,929 $ 12,111 $ 1,774 $ 71,828,460 $ 69,673,

19 RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION AS OF JUNE 30, 2016 Total fund balances - governmental funds $ 44,602,688 Amounts reported for governmental activities in the Statement of Net Position are different because: Net capital assets used in governmental activities and included in the Statement of Net Position do not require the expenditure of financial resources and, therefore, are not reported in the Governmental Funds Balance Sheet. 46,946,769 Certain revenues receivable by the District and recognized in the Statement of Net Position do not provide current financial resources and are included as deferred inflows of resources in the Governmental Funds Balance Sheet, as follows: Grant revenues $ 644,299 Tuition revenue 413,578 1,057,877 Deferred outflows of resources related to pensions do not relate to current financial resources and are not included in the Governmental Funds Balance Sheet. 3,049,380 Deferred inflows of resources related to pensions do not relate to current financial resources and are not included in the Governmental Funds Balance Sheet. (711,724) Long-term liabilities applicable to the District's governmental activities are not due and payable in the current period, and accordingly, are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the Statement of Net Position. Balances at June 30, 2016 are: Bonds payable $ (4,872,500) Debt certificates (2,775,000) Unamortized bond premium (38,874) Net other post employment obligation (393,508) Net pension liability (9,474,434) Compensated absences (120,562) (17,674,878) Interest on long-term liabilities accrued in the Statement of Net Position will not be paid with current financial resources and, therefore, is not recognized in the Governmental Funds Balance Sheet. (26,495) Net position of governmental activities $ 77,243,617 See Notes to Basic Financial Statements

20 GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE TOTALS FOR THE YEAR ENDED JUNE 30, 2015 OPERATIONS AND GENERAL FUND MAINTENANCE FUND TRANSPORTATION FUND MUNICIPAL RETIREMENT/SOCIAL SECURITY FUND Revenues Property taxes $ 34,314,351 $ 4,739,624 $ 1,464,112 $ 1,638,164 Corporate personal property replacement taxes 759, ,676 State aid 16,102, ,027 - Federal aid 1,171, Investment income 109,565 17,848 4,420 1,911 Other 2,091, , Total revenues 54,548,749 5,155,849 1,857,559 1,698,751 Expenditures Current: Instruction: Regular programs 17,203, ,008 Special programs 6,178, ,240 Other instructional programs 2,623, ,803 State retirement contributions 13,176, Support Services: Pupils 2,453, ,318 Instructional staff 3,904, ,114 General administration 1,575, ,710 School administration 1,991, ,679 Business 1,719,765 7,411-81,815 Transportation 118,241-1,487, Operations and maintenance 580,272 2,974, ,917 Central 10, Other supporting services 10,147-2,046 - Community services 66, Payments to other districts and gov't units 1,566, Debt Service: Principal Interest and other Capital outlay 1,407,595 2,360, Total expenditures 54,584,971 5,342,686 1,489,995 1,383,301 Excess (deficiency) of revenues over expenditures (36,222) (186,837) 367, ,450 Net change in fund balance (36,222) (186,837) 367, ,450 Fund balance, beginning of year 36,159,002 5,684,199 1,486, ,680 Fund balance, end of year $ 36,122,780 $ 5,497,362 $ 1,854,528 $ 1,053,130 See Notes to Basic Financial Statements

21 DEBT SERVICE FUND CAPITAL PROJECTS FUND FIRE PREVENTION AND LIFE SAFETY FUND TOTAL $ 1,683,378 $ - $ - $ 43,839,629 $ 43,213, , , , ,993,299 16,797, ,171,541 1,212, , , ,489,883 2,511,467 2,185, ,446,538 64,762, ,423,819 16,740, ,476,339 6,386, ,667,738 2,588, ,176,168 12,138, ,508,701 2,421, ,052,203 3,466, ,650,127 1,574, ,118,828 2,028, ,808,991 1,679, ,606,586 1,765, ,887,819 3,829, ,477 21, ,211 8, ,664 81, ,566,060 2,428,588 2,005, ,005,000 1,970, , , , ,768,240 2,505,407 2,174, ,975,616 61,840,550 10, ,922 2,922,096 10, ,922 2,922,096 50,063 12,088 1,770 44,131,766 41,209,670 $ 61,003 $ 12,111 $ 1,774 $ 44,602,688 $ 44,131,

22 RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2016 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the Statement of Activities are different because: $ 470,922 Governmental funds report capital outlay as expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which current year net capital outlay exceeds depreciation expense. 1,011,889 Certain revenues included in the Statement of Activities do not provide current financial resources and, therefore, are included as deferred inflows of resources in the fund statements: Grant revenue $ 644,299 Tuition revenue 413,578 1,057,877 The issuance of long-term debt (bonds, capital leases, etc.) provides current financial resources to the governmental funds, while its principal repayment consumes current financial resources of the governmental funds. Neither transaction, however, has any effect on net position. This is the amount of current year principal repayments. 2,005,000 Governmental funds report the effects of premiums, discounts and similar items when the debt is issued. However, these amounts are deferred and amortized in the Statement of Activities. This is the amount of the current year, net effect of these differences. 13,482 Deferred outflows and inflows of resources related to pensions do not consume current financial resources and are not included in the governmental funds: Deferred outflows of resources due to pensions $ 214,534 Deferred inflows of resources due to pensions 1,677,308 In the Statement of Activities, operating expenses are measured by the amounts incurred during the year. However, certain of these items are included in the governmental funds only to the extent that they require the expenditure of current financial resources: Interest payable $ 38,175 Compensated absences (2,425) Other post employment benefits (32,257) Net pension liability (2,308,024) 1,891,842 (2,304,531) Change in net position of governmental activities $ 4,146,481 See Notes to Basic Financial Statements

23 AGENCY FUND STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AS OF JUNE 30, 2016 AGENCY FUND Assets Cash and investments $ 145,209 Total assets $ 145,209 Liabilities Due to student groups $ 130,525 Due to employees 14,684 Total liabilities $ 145,209 See Notes to Basic Financial Statements

24 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Lombard Elementary School District 44 (the District ) operates as a public school system governed by a seven-member board. The District is organized under the School Code of the State of Illinois, as amended. The accounting policies of the District conform to the accounting principles generally accepted in the United States of America, as applicable to local governmental units of this type. The following is a summary of the more significant accounting policies of the District: Reporting Entity This report includes all of the funds of the District. The reporting entity for the District consists of the primary government and its component units. Component units are legally separate organizations for which the primary government is financially accountable or other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading. The District has not identified any organizations that meet this criteria. Basis of Presentation Government-wide Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the District. The effect of interfund activity has been removed from these statements. The District s operating activities are all considered governmental activities, that is, activities normally supported by taxes and intergovernmental revenues. The District has no operating activities that would be considered business activities. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include: (1) amounts paid by the recipient of goods or services offered by the program and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. Governmental Funds Financial Statements Governmental funds financial statements are organized and operated on the basis of funds and are used to account for the District's general governmental activities. Fund accounting segregates funds according to their intended purpose, and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. A fund is an independent fiscal and accounting entity with a selfbalancing set of accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, reserves, fund balance, revenues and expenditures. The minimum number of funds is maintained consistent with legal and managerial requirements. Separate financial statements are provided for all governmental funds and fiduciary funds; the fiduciary funds are excluded from the government-wide financial statements

25 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) Measurement Focus and Basis of Accounting The government-wide financial statements are reported using the economic resources measurement focus, while the fiduciary fund statements do not have a measurement focus. The government-wide financial statements and the fiduciary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue when all eligibility requirements have been met. Governmental fund financial statements are reported using the flow of current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they are both "measurable and available". "Measurable" means that the amount of the transaction can be determined, and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers all revenues available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred. However, expenditures for unmatured principal and interest on general long-term debt are recognized when due; and certain compensated absences, claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Major Governmental Funds General Fund - the general operating fund of the District. It accounts for all financial resources except those required to be accounted for in another fund. This fund is primarily used for most of the instructional and administrative aspects of the District's operations. Revenues consist largely of local property taxes and state government aid. Special Revenue Funds - account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes, other than those accounted for in the Debt Service Fund, Capital Projects Funds or Fiduciary Funds. Operations and Maintenance Fund - accounts for expenditures made for repair and maintenance of the District s buildings and land. Revenue consists primarily of local property taxes. Transportation Fund - accounts for all revenue and expenditures made for student transportation. Revenue is derived primarily from local property taxes and state reimbursement grants. Municipal Retirement/Social Security Fund - accounts for the District's portion of pension contributions to the Illinois Municipal Retirement Fund, payments to Medicare, and payments to the Social Security System for non-certified employees. Revenue to finance the contributions is derived primarily from local property taxes and personal property replacement taxes. Debt Service Fund - accounts for the accumulation of resources that are restricted, committed, or assigned for, and the payment of, long-term debt principal, interest and related costs. The primary revenue source is local property taxes levied specifically for debt service on general obligation bonds. Capital Project Funds - accounts for the financial resources that are restricted, committed, or assigned to be used for the acquisition or construction of, and/or additions to, major capital facilities. Capital Projects Fund - accounts for construction projects and renovations financed through serial bonds

26 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) Fire Prevention and Life Safety Fund - accounts for State-approved life safety projects financed through serial bond issues or local property taxes levied specifically for such purposes. Other Fund Types Fiduciary Funds - account for assets held by the District in a trustee capacity or as an agent for individuals, private organizations, other governments or other funds. Agency Funds - include Student Activity Funds, Convenience Accounts and Other Agency Funds. These funds are custodial in nature and do not present results of operations or have a measurement focus. Although the Board of Education has the ultimate responsibility for Activity Funds, they are not local education agency funds. Student Activity Funds account for assets held by the District which are owned, operated and managed generally by the student body, under the guidance and direction of adults or a staff member, for educational, recreational or cultural purposes. Convenience Accounts account for assets that are normally maintained by a local education agency as a convenience for its faculty, staff, etc. On-behalf payments (payments made by a third party for the benefit of the district, such as payments made by the state to the Teachers' Retirement System) have been recognized in the financial statements. Property taxes, replacement taxes, certain state and federal aid, and interest on investments are susceptible to accrual. Other receipts become measurable and available when cash is received by the District and recognized as revenue at that time. Grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant. Accordingly, when such funds are received, they are recorded as unearned revenues until earned. All Financial Statements The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities, and deferred inflows of resources and disclosure of contingent assets, deferred outflows of resources, liabilities, and deferred inflows of resources at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position or Equity Deposits and Investments State statutes authorize the District to invest in obligations of the U.S. Treasury, certain highly-rated commercial paper, corporate bonds, repurchase agreements, and the State Treasurer's Investment Pool. Investments are stated at fair value. Changes in fair value of investments are included as investment income

27 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds". These amounts are eliminated in the governmental activities column in the statement of net position. Receivables are expected to be collected within one year. Property Tax Revenues The District must file its tax levy resolution by the last Tuesday in December of each year. The District's 2015 levy resolution was approved during the December 8, 2015 board meeting. The District's property tax is levied each year on all taxable real property located in the District and it becomes a lien on the property on January 1 of that year. The owner of real property on January 1 in any year is liable for taxes of that year. The tax rate ceilings are applied at the fund level. These ceilings are established by state law subject to change only by the approval of the voters of the District. The PTELA limitation is applied in the aggregate to the total levy (excluding certain levies for the repayment of debt). PTELA limits the increase in total taxes billed to the lessor of 5% or the percentage increase in the Consumer Price Index (CPI) for the preceding year. The amount can be exceeded to the extent there is new growth in the District s tax base. The new growth consists of new construction, annexations and tax increment finance district property becoming eligible for taxation. The CPI rates applicable to the 2015 and 2014 tax levies were 0.8% and 1.5%, respectively. Property taxes are collected by the County Collector/Treasurer, who remits to the District its share of collections. Taxes levied in one year become due and payable in two equal installments: the first due on June 1 and the second due on September 1. Property taxes are normally collected by the District within 60 days of the respective installment dates. The 2015 property tax levy is recognized as a receivable in fiscal 2016, net of estimated uncollectible amounts approximating.5% and less amounts already received. The District considers that the first installment of the 2015 levy is to be used to finance operations in fiscal The District has determined that the second installment of the 2015 levy is to be used to finance operations in fiscal 2017 and has included the corresponding receivable as a deferred inflow of resources. Personal Property Replacement Taxes Personal property replacement taxes are first allocated to the Municipal Retirement / Social Security Fund, and the balance is allocated to the remaining funds at the discretion of the District. Capital Assets Capital assets, which include land, land improvements, buildings and equipment are reported in the government-wide financial statements. Capital assets are defined by the District as assets with an initial individual cost of more than $1,000 and an estimated useful life of more than 1 year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation

28 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) Depreciation of capital assets is provided using the straight-line method over the following estimated useful lives: Assets Years Land improvements 20 Buildings 40 Equipment 5 In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Deferred Outflows of Resources A deferred outflow of resources represents a consumption of net position that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until that future time. Compensated Absences Under terms of employment, employees are granted sick leave and vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. All vested vacation and sick leave pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements, or are payable with expendable available resources. Payments for vacation and sick leave will be made at rates in effect when the benefits are used. Accumulated vacation and sick leave liabilities at June 30, 2016 are determined on the basis of current salary rates and include salary related payments. Employees who work a twelve-month year are entitled to be compensated for vacation time. Applicable employees are allowed to carryover earned but unused vacation into the next fiscal year, with certain restrictions. For governmental funds, the current portion of the compensated absences is the amount that is normally expected to be paid using expendable available financial resources. These amounts are recorded in the fund from which the employees who have accumulated vacation leave are paid. Employees may carry one full year's allotment plus 10 days vacation time into the next year. All certified employees receive a specified number of annual sick days, depending on their years of service, in accordance with the agreement between the Board of Education and the Education Association. Unused sick leave days accumulate each year. Upon retirement, a certified employee may apply up to 340 days of unused sick leave toward service credit to TRS

29 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) Long-Term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the statement of net position. Bond premiums and discounts are deferred and amortized over the life of the applicable bonds using the effective interest method. The balance at year end for premiums/discounts is shown as an increase or decrease in the liability section of the statement of net position. In the fund financial statements, governmental funds recognize bond premiums and discounts during the period incurred. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Deferred Inflows of Resources A deferred inflow of resources represents an acquisition of net position that applies to a future period and therefore will not be recognized as an inflow of resources (revenue) until that future time. Equity Classifications Equity is classified as net position in the government-wide financial statements and displayed in three components: Net investment in capital assets - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets less than any unspent debt proceeds. Restricted net position - Consists of net position with constraints placed on its use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or, 2) law through constitutional provisions or enabling legislation. Unrestricted net position - All other net position that does not meet the definition of "restricted" or "net investment in capital assets." When both restricted and unrestricted resources are available for use, it is the District s policy to use restricted resources first and then unrestricted resources. Equity is classified as fund balance in the fund financial statements and displayed in five components: Nonspendable - includes amounts not in spendable form, such as inventory, or amounts required to be maintained intact legally or contractually (principal endowment) (e.g. inventory, pre-paid items, permanent scholarships). Restricted - includes amounts constrained for a specific purpose by external parties (e.g. Debt Service, Capital Projects, State and Federal Grant Funds)

30 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED) Committed - includes amounts constrained for a specific purpose by a government using its highest level of decision making authority, the Board of Education. This formal action (a resolution) must occur prior to the end of the reporting period, but the amount of the commitment, which will be subject to the constraints, may be determined in the subsequent period. Any changes to the constraints imposed require the same formal action of the Board of Education board that originally created the commitment. Assigned - includes general fund amounts constrained for a specific purpose by the Board of Education or by an official that has been delegated authority to assign amounts. The Board of Education has declared that Ted Stec, Assistant Superintendent for Finance and Operations, may assign amounts for a specific purpose. The Board of Education may also take official action to assign amounts. Additionally, all remaining positive spendable amounts in governmental funds, other than the General Fund, that are neither restricted nor committed are considered assigned. Assignments may take place after the end of the reporting period. Unassigned - includes residual positive fund balance within the General Fund which has not been classified within the other above mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed or assigned for those specific purposes. In circumstances where an expenditure is to be made for a purpose for which amounts are available in multiple fund balance classifications, the order in which resources will be expended in the General Fund is as follows: restricted fund balance, followed by committed fund balance, assigned fund balance, and lastly, unassigned fund balance. In all other funds (Special Revenue, Debt Service, Capital Projects), assigned fund balance will be spent first, followed by committed fund balance, and then restricted fund balance. Governmental fund balances reported on the fund financial statements at June 30, 2016 are as follows: The restricted fund balance in the General Fund is comprised of $604,928 for tort immunity. The remaining restricted fund balances are for the purpose of the respective funds as described above in the Major Governmental Funds section. The committed and assigned fund balances are for the purpose of the respective fund as described above in the Major Governmental Funds section. Comparative Data The financial statements include summarized prior-year comparative information. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the District's financial statements for the year ended June 30, 2015, from which such summarized information was derived. Eliminations and Reclassifications In the process of aggregating data for the government-wide financial statements, some amounts reported as interfund activity and balances were eliminated or reclassified

31 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Excess of Expenditures over Budget For the year ended June 30, 2016, expenditures exceeded budget in the General Fund, IMRF/Social Security Fund, Capital Projects Fund, and Fire Prevention and Life Safety Fund by $82,975, $1,947, $16, and $2, respectively. These excesses were funded by available fund balances. NOTE 3 - CHANGES IN ACCOUNTING PRINCIPLES In February 2015, the GASB issued statement No Fair Value Measurement and Application. The primary objective of this statement is to provide guidance for determining a fair value measurement for financial reporting purposes as well as to provide guidance for applying fair value to certain investments and disclosures related to all fair value measurements. This standard was implemented effective July 1, NOTE 4 - DEPOSITS AND INVESTMENTS At year end, the District's cash and investments was comprised of the following: Governmentwide Fiduciary Total Cash and investments $ 47,851,758 $ 145,209 $ 47,996,967 Total $ 47,851,758 $ 145,209 $ 47,996,967 For disclosure purposes, this amount is segregated into the following components: 1) cash on hand 2) deposits with financial institutions, which include amounts held in demand accounts, savings accounts and non-negotiable certificates of deposit; and 3) other investments, which consist of all investments other than certificates of deposit, as follows: Cash and investments Cash on hand $ 1,350 Deposits with financial institutions 21,081,969 Other investments 26,913,648 Total $ 47,996,967 The District categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The District's investments detailed in the interest rate risk table below are measured using the market valuation method and Level 2 valuation inputs. Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investment. The District's investment policy does not limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates

32 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 4 - DEPOSITS AND INVESTMENTS - (CONTINUED) At year end, the District had the following investments: Investment Maturity (In Years) Fair Value Less than one More than 10 Illinois Funds $ 205,348 $ 205,348 $ - $ - $ - IIIT Money Markets 6,708,300 6,708, IIIT Term Series 20,000,000 20,000, Total $ 26,913,648 $ 26,913,648 $ - $ - $ - Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State Statutes limit the investments in commercial paper and corporate bonds to the top three ratings of two nationally recognized statistical rating organizations (NRSRO's). The District's investment policy authorizes investments in any type of security as permitted be Sections 2 through 6 of the Illinois Public Funds Investment Act. Illinois Institutional Investors Fund (IIIT) is a not-for-profit investment trust formed pursuant to the Illinois Municipal Code and managed by a Board of Trustees elected from participating members. The trust is not registered with the SEC as an investment company. Investments are rated AAAm and are valued at share price, which is the price for which the investment could be sold. Illinois Funds is an investment pool managed by the State of Illinois, Office of the Treasurer, which allows governments within the State to pool their funds for investment purposes. Illinois Funds is not registered with the SEC as an investment company, but does operate in a manner consistent with Rule 2a7 of the Investment Company Act of Investments in Illinois Funds are rated AAAm and are valued at Illinois Funds share price, which is the price for which the investment could be sold. Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The District's investment policy requires the diversification of the investment portfolio to minimize risk of loss resulting from over-concentration in a particular type of security, risk factor, issuer, or maturity. Custodial Credit Risk - Deposits. With respect to deposits, custodial credit risk refers to the risk that, in the event of a bank failure, the District s deposits may not be returned to it. The District s investment policy limits the exposure to deposit custodial credit risk by requiring all deposits in excess of FDIC insurable limits to be secured by collateral in the event of default or failure of the financial institution holding the funds. As of June 30, 2016, the bank balance of the District s deposit with financial institutions totaled $23,022,377; which was fully insured and colleteralized. Custodial Credit Risk - Investments. With respect to investments, custodial credit risk is the risk that, in the even of the failure of the counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The District s investment policy limits the exposure to investment custodial credit risk by requiring all investments be secured by private insurance or collateral. Separate cash and investment accounts are not maintained for all District funds; instead, the individual funds maintain their invested and uninvested balances in the common checking and investment accounts, with accounting records being maintained to show the portion of the common account balance attributable to each participating fund

33 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 4 - DEPOSITS AND INVESTMENTS - (CONTINUED) Occasionally certain funds participating in the common bank accounts will incur overdrafts (deficits) in the account. The overdrafts result from expenditures that have been approved by the Board of Education. NOTE 5 - CAPITAL ASSETS Capital asset activity for the District for the year ended June 30, 2016, was as follows: Beginning Balance Increases Decreases Ending Balance Capital assets not being depreciated: Land $ 425,032 $ - $ - $ 425,032 Construction in progress 383, ,002 - Total capital assets not being depreciated 808, , ,032 Capital assets being depreciated: Land improvements 3,206, ,206,808 Buildings 65,504,809 2,744,155-68,248,964 Equipment 20,070,571 1,399,928-21,470,499 Total capital assets being depreciated 88,782,188 4,144,083-92,926,271 Less Accumulated Depreciation for: Land improvements 2,146, ,490-2,305,786 Buildings 22,343,743 1,386,747-23,730,490 Equipment 19,165,303 1,202,955-20,368,258 Total accumulated depreciation 43,655,342 2,749,192-46,404,534 Net capital assets being depreciated 45,126,846 1,394,891-46,521,737 Net governmental activities capital assets $ 45,934,880 $ 1,394,891 $ 383,002 $ 46,946,769 Depreciation expense was recognized in the operating activities of the District as follows: Governmental Activities Depreciation Regular programs $ 2,512,487 Special programs 120,140 Other instructional programs 35,464 General administration 26,667 School administration 9,072 Business 23,093 Transportation 2,474 Operations and maintenance 550 Food Service 18,420 Information services 825 Total depreciation expense - governmental activities $ 2,749,

34 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 6 - LONG TERM LIABILITIES Changes in General Long-term Liabilities. The following is the long-term liability activity for the District for the year ended June 30, 2016: Beginning Balance Additions Deletions Ending Balance Due Within One Year General obligation bonds $ 6,447,500 $ - $ 1,575,000 $ 4,872,500 $ 1,590,000 Debt certificates 3,205, ,000 2,775, ,000 Unamortized premium 52,356-13,482 38,874 - Total bonds payable 9,704,856-2,018,482 7,686,374 2,025,000 OPEB liability 361, ,004 95, ,508 - Net pension liability 7,166,410 3,371,483 1,063,459 9,474,434 - Compensated absences 118, , , ,562 - Total long-term liabilities - governmental activities $ 17,350,654 $ 3,686,381 $ 3,362,157 $ 17,674,878 $ 2,025,000 The obligations for the compensated absences and OPEB liabilities will be paid from the General Fund. The net pension liability will be repaid from the General Fund and the Municipal Retirement/Social Security Fund. General Obligation Bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the District. All will be repaid from the Debt Service Fund. Amounts currently outstanding are as follows: Purpose Interest Rates Original Indebtedness Carrying Amount Series 2011 Limited Tax Bonds - Refunding dated October 4, 2011 are due in annual installments through December 30, % $ 1,315,000 $ 1,315,000 Series 2013 General Obligation Refunding Bonds dated December 3, 2013 are due in annual installments through December 30, % 6,682,500 3,557,500 Total $ 7,997,500 $ 4,872,500 Annual debt service requirements to maturity for general obligation bonds are as follows for governmental type activities: Principal Interest Total 2017 $ 1,590,000 $ 76,825 $ 1,666, ,610,000 56,791 1,666, ,002,500 28,630 1,031, ,000 8, ,125 Total $ 4,872,500 $ 170,371 $ 5,042,

35 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 6 - LONG TERM LIABILITIES - (CONTINUED) The District is subject to the Illinois School Code, which limits the amount of certain indebtedness to 6.9% of the most recent available equalized assessed valuation of the District. As of June 30, 2016, the statutory debt limit for the District was $70,733,355, providing a debt margin of $63,085,855. Debt Certificates Debt certificates will be repaid from the Debt Service Fund and are funded by General State Aid revenue. Debt certificates currently outstanding are as follows: Purpose Interest Rates Original Indebtedness Carrying Amount Series 2014A General Obligation Limited Tax Refunding Debt Certificates dated February 5, 2014 are due in annual installments through February 1, %-2.50% $ 3,625,000 $ 2,775,000 Total $ 3,625,000 $ 2,775,000 Annual debt service requirements to maturity for Debt Certificates are as follows for governmental type activities: Principal Interest Total 2017 $ 435,000 $ 63,588 $ 498, ,000 54, , ,000 41, , ,000 32, , ,000 22, , ,000 12, ,250 Total $ 2,775,000 $ 227,537 $ 3,002,537 NOTE 7 - RISK MANAGEMENT The District is exposed to various risks of loss related to employee health benefits; workers' compensation claims; theft of, damage to, and destruction of assets; and natural disasters. To protect from such risks, the District participates in the following public entity risk pools: Educational Benefits Cooperative (EBC), Suburban School Cooperative Insurance Pool (SCCIP) and School Employees Loss Fund (SELF). The District pays annual premiums to the pools for insurance coverage. The arrangements with the pools provide that each will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of certain levels established by the pools. There have been no significant reductions in insurance coverage from coverage in any of the past three fiscal years

36 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 8 - JOINT AGREEMENTS The District is a member of Cooperative Association for Special Education (CASE), a joint agreement that provides certain special education services to residents of many school districts. The District believes that because it does not control the selection of the governing authority, and because of the control over employment of management personnel, operations, scope of public service, and special financing relationships exercised by the joint agreement governing boards, these are not included as component units of the District. NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS Teachers' Health Insurance Security The District participates in the Teacher Health Insurance Security (THIS) Fund, a cost-sharing, multipleemployer defined benefit post-employment healthcare plan that was established by the Illinois legislature for the benefit of retired Illinois public school teachers employed outside the city of Chicago. The THIS Fund provides medical, prescription, and behavioral health benefits, but it does not provide vision, dental, or life insurance benefits to annuitants of the Teachers Retirement System (TRS). Annuitants not enrolled in Medicare may participate in the state-administered participating provider option plan or choose from several managed care options. Annuitants who are enrolled in Medicare Parts A and B may be eligible to enroll in a Medicare Advantage plan. The State Employees Group Insurance Act of 1971 (5 ILCS 375) outlines the benefit provisions of the THIS Fund and amendments to the plan can be made only by legislative action with the Governor s approval. The plan is administered by the Illinois Department of Central Management Services (CMS) with the cooperation of TRS. Section 6.6 of the State Employees Group Insurance Act of 1971 requires all active contributors to TRS who are not employees of the state to make a contribution to the THIS Fund. The percentage of employer required contributions in the future will not exceed 105 percent of the percentage of salary actually required to be paid in the previous fiscal year. On Behalf Contributions to THIS Fund. The State of Illinois makes employer retiree health insurance contributions on behalf of the District. State contributions are intended to match contributions to THIS Fund from active members which were 1.07 percent of pay during the year ended June 30, State of Illinois contributions were $275,623, and the District recognized revenues and expenditures of this amount during the year. State contributions intended to match active member contributions during the years ended June 30, 2015 and June 30, 2014 were 1.02 and 0.97 percent of pay, respectively. For these years, state contributions on behalf of District employees were $247,436 and $230,156, respectively. Employer Contributions to THIS Fund. The District also makes contributions to THIS Fund. The District's THIS Fund contribution was 0.80 percent during the year ended June 30, 2016 and 0.76 and 0.72 percent during the years ended June 30, 2015 and 2014, respectively. For the years ended June 30, 2016, 2015 and 2014 the District paid $206,073, $184,364 and $170,837 to the THIS Fund, respectively, which was 100 percent of the required contribution for those years

37 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS - (CONTINUED) The publicly available financial report of the THIS Fund may be found on the website of the Illinois Auditor General: The current reports are listed under "Central Management Services." Prior reports are available under "Healthcare and Family Services." Retiree Health Plan The District's group health insurance plan provides coverage to active employees and retirees (or other qualified terminated employees) at blended premium rates. This results in an other postemployment benefit (OPEB) for the retirees, commonly referred to as an implicit rate subsidy. Contribution requirements are established through personnel policy guidelines and may be amended by the action of the governing body The District provides continuation of health care benefits to employees who retire from the District. Eligible, non-certified employees may elect to continue their health care coverage by paying the monthly premium rate. Non-certified employees must meet the eligibility requirements of age 55 and 25 years of service; or age 60 and 8 years of service; or a combined age and service of 85. Retirees contribute the blended average employee group cost and the District pays the difference between actuarial cost of the health coverage for the retirees and the blended average employee group cost, or the implicit rate. For fiscal year 2016, the District contributed $95,747 to the plan. The District's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC) The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the District's annual OPEB cost for the year, the amount actually contributed to the Retiree Health Plan, and changes in the District's net OPEB obligation to the Retiree Health Plan: Annual required contribution $ 133,642 Interest on net OPEB obligation 14,450 Adjustment to annual required contribution (20,088) Annual OPEB cost 128,004 Contributions made (95,747) Increase in net OPEB obligation (asset) 32,257 Net OPEB Obligation (Asset) - Beginning of Year 361,251 Net OPEB Obligation (Asset) - End of Year $ 393,

38 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS - (CONTINUED) The District's annual OPEB cost, the percentage of annual OPEB cost contributed to the Retiree Health Plan, and the net OPEB obligation for June 30, 2016 and two proceeding years is as follows: Fiscal Year Ended Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation (Asset) June 30, 2016 $ 128, % $ 393,508 June 30, , % 361,251 June 30, , % 392,656 The funded status of the Retiree Health Plan as of July 1, 2015, the most recent actuarial valuation date, is as follows: Actuarial accrued liability (AAL) $ 1,771,637 Actuarial value of plan assets - Unfunded Actuarial Accrued Liability (UAAL) $ 1,771,637 Funded ratio (actuarial value of plan assets/aal) -% Covered payroll (active plan members) $ 5,879,358 UAAL as a percentage of covered payroll 30.13% Actuarial valuations of an ongoing plan involve estimates for the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan is understood by the employer and plan members) and include the type of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the employer and plan members to that point. The methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations

39 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 9 - OTHER POST-EMPLOYMENT BENEFITS - (CONTINUED) In the July 1, 2015 actuarial valuation, the entry age actuarial cost method was used. The actuarial assumptions include a 4 percent investment rate of return and an annual healthcare cost trend rate of 9 percent initially, reduced by decrements to an ultimate rate of 5 percent after 8 years. Both rates include a 3 percent inflation assumption. The actuarial value of the Retiree Health Plan assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a threeyear period. The Retiree Health Plan's unfunded actuarial accrued liability is being amortized as a level of percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2016 is 30 years. NOTE 10 - RETIREMENT SYSTEMS The retirement plans of the District include the Teachers Retirement System of the State of Illinois (TRS) and the Illinois Municipal Retirement Fund (IMRF). Most funding for TRS is provided through payroll withholdings of certified employees and contributions made by the State of Illinois on-behalf of the District. IMRF is funded through property taxes and a perpetual lien of the District s corporate personal property replacement tax. Each retirement system is discussed below. Teachers' Retirement System Plan Description. The District participates in the Teachers Retirement System of the State of Illinois (TRS). TRS is a cost-sharing multiple-employer defined 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 approval. The TRS Board of Trustees is responsible for the System s administration. TRS issues a publicly available financial report that can be obtained at by writing to TRS at 2815 W. Washington, PO Box 19253, Springfield, IL 62794; or by calling (888) , option 2. Benefits Provided. TRS provides retirement, disability, and death benefits. Tier I members have TRS or reciprocal system service prior to January 1, Tier I members qualify for retirement benefits at age 62 with five years of service, at age 60 with 10 years, or age 55 with 20 years. The benefit is determined by the average of the four highest years of creditable earnings within the last 10 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 10 years of service, or a discounted annuity can be paid at age 62 with 10 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

40 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 10 - RETIREMENT SYSTEMS - (CONTINUED) 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 2010 through 2045, 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 90 percent of the total actuarial liabilities of the System by the end of fiscal year 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 30, 2016 was 9.4 percent of creditable earnings. The member contribution, which may be paid on behalf of employees by the District, is submitted to TRS by the District. On Behalf Contributions to TRS. The State of Illinois makes employer pension contributions on behalf of the District. For the year ended June 30, 2016, State of Illinois contributions recognized by the District were based on the state s proportionate share of the collective net pension liability associated with the District, and the District recognized revenue and expenditures of $12,900,545 in pension contributions from the State of Illinois. 2.2 Formula Contributions. Employers contribute 0.58 percent of total creditable earnings for the 2.2 formula change. The contribution rate is specified by statute. Contributions for the year ended June 30, 2016, were $149,403, and are deferred because they were paid after the June 30, 2015 measurement date. Federal and 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 funds. Under a policy adopted by the TRS Board of Trustees that has been in effect since the fiscal year ended June 30, 2006, 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 30, 2016, the District pension contribution was percent of salaries paid from federal and special trust funds. Contributions for the year ended June 30, 2016, were $66,869,The District contributions were $107,203. These contributions are deferred because they were paid after the June 30, 2015 measurement date. TRS Fiduciary Net Position. Detailed information about the TRS s fiduciary net position as of June 30, 2015 is available in the separately issued TRS Comprehensive Annual Financial Report

41 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 10 - RETIREMENT SYSTEMS - (CONTINUED) Net Pension Liability. At June 30, 2016, the District 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 District. The state s support and total are for disclosure purposes only. The amount recognized by the District 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 District were as follows: District's proportionate share of the collective net pension liability $ 3,427,496 State's proportionate share of the collective net pension liability associated with the District 157,461,145 Total $ 160,888,641 The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2014, and rolled forward to June 30, The District s proportion of the net pension liability was based on the District s share of contributions to TRS for the measurement year ended June 30, 2015, relative to the projected contributions of all participating TRS employers and the state during that period. At June 30, 2015 and 2014, the District s proportion was percent and percent, respectively. Summary of Significant Accounting Policies. For purposes of measuring the collective net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of TRS and additions to/deductions from TRS fiduciary net position have been determined on the same basis as they are reported by TRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Actuarial Assumptions. The assumptions used to measure the total pension liability in the June 30, 2015 actuarial valuation included (a) 7.50% investment rate of return net of pension plan investment expense, including inflation, (b) projected salary increases varies by amount of service credit, and (c) inflation of 3.00%. The actuarial assumptions for the years ended June 30, 2015 and 2014 were different. The actuarial assumptions used in the June 30, 2015 valuation were based on the 2015 actuarial experience analysis. The investment return assumption remained at 7.5 percent, salary increase assumptions were lowered, retirement rates were increased, mortality updates were made and other assumptions were revised. The actuarial assumptions used in the June 30, 2014 valuation were based on updates to economic assumptions adopted in 2014 which lowered the investment return assumption from 8.0 percent to 7.5 percent. The salary increase and inflation assumptions were also lowered from their 2013 levels. Mortality. Mortality rates were based on the RP-2014 White Collar Table with adjustments as appropriate for TRS experience. The rates are used on a fully-generational basis using projection table MP

42 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 10 - RETIREMENT SYSTEMS - (CONTINUED) Long-Term Expected Real Rate of Return. 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) are 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: Asset Class Target Allocation Long-Term Expected Real Rate of Return U.S. large cap % 7.53 % Global equity excluding U.S % 7.88 % Aggregate bonds % 1.57 % U.S. TIPS 2.00 % 2.82 % NCREIF % 5.11 % Opportunistic real estate 4.00 % 9.09 % ARS 8.00 % 2.57 % Risk parity 8.00 % 4.87 % Diversified inflation strategy 1.00 % 3.26 % Private equity % % Discount Rate. At June 30, 2015, the discount rate used to measure the total pension liability was a blended rate of 7.47 percent, which was a change from the June 30, 2014 rate of 7.50 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 on those assumptions, TRS s fiduciary net position at June 30, 2015 was not 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. Despite the subsidy, all projected future payments were not covered, so a slightly lower long-term expected rate of return on TRS investments was applied to all periods of projected benefit payments to determine the total pension liability. At June 30, 2014, the discount rate used to measure the total pension liability was 7.50 percent. The discount rate was the same as the actuarially-assumed rate of return on investments that year because TRS s fiduciary net position and the subsidy provided by Tier II were sufficient to cover all projected benefit payments

43 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 10 - RETIREMENT SYSTEMS - (CONTINUED) Discount Rate Sensitivity. The following presents the District s proportionate share of the net pension liability calculated using the discount rate of 7.47 percent, as well as what the District s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.47 percent) or 1-percentage-point higher (8.47 percent) than the current rate: 1% Decrease Current Discount Rate 1% Increase District's proportionate share of the collective net pension liability $ 4,235,545 $ 3,427,496 $ 2,764,875 Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions. For the year ended June 30, 2016, the District recognized pension expense of $130,196 and on-behalf revenue and expense of $12,900,545 for support provided by the state. At June 30, 2016, the District's deferred outflows of resources and deferred inflows of resources related to pensions were from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 1,274 $ 3,757 Net difference between projected and actual earnings on pension plan investments 67, ,019 Assumption changes 47,399 - Changes in proportion and differences between District contributions and proportionate share of contributions 169, ,948 District contributions subsequent to the measurement date 254,847 - Total $ 540,578 $ 711,724 The amount reported as deferred outflows resulting from contributions subsequent to the measurement date in the above table will be recognized as a reduction in the net pension liability for the year ending June 30, The remaining amounts reported as deferred outflows and inflows of resources related to pensions ($(425,993)) will be recognized in pension expense as follows: Year Ending June 30, Amount 2017 $ (156,920) 2018 (156,920) 2019 (156,920) ,767 Total $ (425,993) Illinois Municipal Retirement Fund 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's 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 required supplementary information. The report may be obtained on-line at

44 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 10 - RETIREMENT SYSTEMS - (CONTINUED) All employees hired in positions that meet or exceed the prescribed annual hourly standard must be enrolled in IMRF as participating members. Public Act created a second tier for IMRF s Regular Plan. IMRF assigns a benefit tier to a member when he or she is enrolled in IMRF. The tier is determined by the member s first IMRF participation date. If the member first participated in IMRF before January 1, 2011, they participate in Regular Tier 1. If the member first participated in IMRF on or after January 1, 2011, they participate in Regular Tier 2. For Regular Tier 1, pension benefits vest after eight years of service. Participating members who retire at or after age 60 with 8 years of service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit, plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any consecutive 48 months within the last 10 years of service, divided by 48. Under Regular Tier 1, the pension is increased by 3% of the original amount on January 1 every year after retirement. For Regular Tier 2, pension benefits vest after ten years of service. Participating members who retire at or after age 67 with 10 years of service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit, plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any 96 consecutive months within the last 10 years of service, divided by 96. Under Regular Tier 2, the pension is increased on January 1 every year after retirement, upon reaching age 67, by the lesser of 3% of the original pension amount, or 1/2 of the increase in the Consumer Price Index of the original pension amount. IMRF also provides death and disability benefits. These benefit provisions and all other requirements are established by state statute. Plan Membership. At December 31, 2015, the measurement date, membership of the plan was as follows: Retirees and beneficiaries 254 Inactive, non-retired members 341 Active members 134 Total 729 Contributions. As set by statute, District employees participating in IMRF are required to contribute 4.50 percent of their annual covered salary. The statute requires the District to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The District's actuarially determined contribution rate for calendar year 2015 was percent of annual covered payroll. The District also contributes for disability benefits, death benefits and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by the IMRF Board of Trustees, while the supplemental retirement benefits rate is set by statute. Net Pension Liability/(Asset). The net pension liability/(asset) was measured as of December 31, 2015, and the total pension liability used to calculate the net pension liability/(asset) was determined by an annual actuarial valuation as of that date

45 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 10 - RETIREMENT SYSTEMS - (CONTINUED) Summary of Significant Accounting Policies. For purposes of measuring the net pension liability/(asset), deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of IMRF and additions to/deductions from IMRF fiduciary net position have been determined on the same basis as they are reported by IMRF. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Actuarial Assumptions. The assumptions used to measure the total pension liability in the December 31, 2015 annual actuarial valuation included (a) 7.48% investment rate of return, (b) projected salary increases from 3.75% to 14.50%, including inflation, and (c) price inflation of 2.75%. The retirement age is based on experience-based table of rates that are specific to the type of eligibility condition. The tables were last updated for the 2014 valuation pursuant to an experience study of the period Mortality. For non-disabled retirees, an IMRF specific mortality table was used with fully generational projection scale MP-2014 (base year 2014). The IMRF specific rates were developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with adjustments to match current IMRF experience. For disabled retirees, an IMRF specific mortality table was used with fully generational projection scale MP (base year 2014). The IMRF specific rates were developed from the RP-2014 Disabled Retirees Mortality Table applying the same adjustment that were applied for non-disabled lives. For active members, an IMRF specific mortality table was used with fully generational projection scale MP-2014 (base year 2014). The IMRF specific rates were developed from the RP-2014 Employee Mortality Table with adjustments to match current IMRF experience. Long-Term Expected Real Rate of Return. 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) are 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 to the target asset allocation percentage and adding expected inflation. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Projected Returns/Risk Asset Class Target Allocation One Year Arithmetic Ten Year Geometric Equities % 8.85 % 7.39 % International equities % 9.55 % 7.59 % Fixed income % 3.05 % 3.00 % Real estate 8.00 % 7.20 % 6.00 % Alternatives 9.00 % Private equity % 8.15 % Hedge funds 5.55 % 5.25 % Commodities 4.40 % 2.75 % Cash equivalents 1.00 % 2.25 % 2.25 %

46 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 10 - RETIREMENT SYSTEMS - (CONTINUED) Discount Rate. The discount rate used to measure the total pension liability for IMRF was 7.48%. The discount rate calculated using the December 31, 2014 measurement date was 7.48%. The projection of cash flows used to determine the discount rate assumed that member contributions will be made at the current contribution rate and that District contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the fiduciary net position was projected not to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on investments of 7.50% was blended with the index rate of 3.57% for tax exempt 20-year general obligation municipal bonds with an average AA credit rating at December 31, 2015 to arrive at a discount rate of 7.48 used to determine the total pension liability. The year ending December 31, 2085 is the last year in the 2016 to 2115 projection period for which projected benefit payments are fully funded. Discount Rate Sensitivity. The following is a sensitivity analysis of the net pension liability/(asset) to changes in the discount rate. The table below presents the pension liability of the District calculated using the discount rate of 7.48% as well as what the net pension liability/(asset) would be if it were to be calculated using a discount rate that is 1 percentage point lower (6.48%) or 1 percentage point higher (8.48%) than the current rate: 1% Decrease Current Discount Rate 1% Increase Total pension liability $ 39,045,931 $ 34,725,325 $ 31,143,852 Plan fiduciary net position 28,678,387 28,678,387 28,678,387 Net pension liability/(asset) $ 10,367,544 $ 6,046,938 $ 2,465,465 Changes in Net Pension Liability/(Asset). The District's changes in net pension liability/(asset) for the calendar year ended December 31, 2015 was as follows: Total Pension Liability (a) Increase (Decrease) Plan Fiduciary Net Pension Net Position Liability/(Asset) (b) (a) - (b) Balances at December 31, 2014 $ 33,174,523 $ 28,990,053 $ 4,184,470 Service cost 546, ,758 Interest on total pension liability 2,436,895-2,436,895 Differences between expected and actual experience of the total pension liability 186, ,034 Change of assumptions 119, ,291 Benefit payments, including refunds of employee contributions (1,738,176) (1,738,176) - Contributions - employer - 672,966 (672,966) Contributions - employee - 217,689 (217,689) Net investment income - 142,831 (142,831) Other (net transfer) - 393,024 (393,024) Balances at December 31, 2015 $ 34,725,325 $ 28,678,387 $ 6,046,

47 NOTES TO BASIC FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 NOTE 10 - RETIREMENT SYSTEMS - (CONTINUED) Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions. For the year ended June 30, 2016, the District recognized pension expense of $1,541,489. The District's deferred outflows and inflows of resources related to pension were from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ 86,894 $ - Assumption changes 57,718 - Net difference between projected and actual earnings on pension plan investments 1,848,883 - Contributions subsequent to the measurement date 515,397 - Total $ 2,508,892 $ - The amount reported as deferred outflows resulting from contributions subsequent to the measurement date in the above table will be recognized as a reduction in the net pension liability/(asset) for the year ending June 30, The remaining amounts reported as deferred outflows and inflows of resources related to pensions ($1,993,495) will be recognized in pension expense as follows: Year Ending December 31, Amount 2016 $ 626, , , ,875 Total $ 1,993,495 NOTE 11 - STATE AND FEDERAL AID CONTINGENCIES The District has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies. Such audits could lead to requests for reimbursements to the grantor agency for expenditures disallowed under the terms of the grants. Management believes such disallowance, if any, would be immaterial. NOTE 12 - EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT-PERIOD FINANCIAL STATEMENTS The Governmental Accounting Standards Board (GASB) has approved GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, GASB Statement No. 77, Tax Abatement Disclosures, GASB Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, GASB Statement No. 80, Blending Requirements for Certain Component Units an amendment of GASB Statement No. 14, GASB Statement No. 81, Irrevocable Split-Interest Agreements, and GASB Statement No. 82, Pension Issues an amendment of GASB Statements No. 67, No. 68, and No. 73. Application of these standards may restate portions of these financial statements

48 ILLINOIS MUNICIPAL RETIREMENT FUND SCHEDULE OF CHANGES IN THE DISTRICT'S NET PENSION LIABILITY AND RELATED RATIOS Two Last Fiscal Years Total pension liability Service cost $ 546,758 $ 585,339 Interest 2,436,895 2,247,768 Differences between expected and actual experience 186,034 68,292 Changes of assumptions 119,291 1,295,617 Benefit payments, including refunds of member contributions (1,738,176) (1,480,158) Net change in total pension liability 1,550,802 2,716,858 Total pension liability - beginning 33,174,523 30,457,665 Total pension liability - ending (a) $ 34,725,325 $ 33,174,523 Plan fiduciary net position Employer contributions $ 672,966 $ 655,086 Employee contributions 217, ,175 Net investment income 142,831 1,661,797 Benefit payments, including refunds of member contributions (1,738,176) (1,480,158) Other (net transfer) 393, ,637 Net change in plan fiduciary net position (311,666) 1,453,537 Plan fiduciary net position - beginning 28,990,053 27,536,516 Plan fiduciary net position - ending (b) $ 28,678,387 $ 28,990,053 Employer's net pension liability - ending (a) - (b) $ 6,046,938 $ 4,184,470 Plan fiduciary net position as a percentage of the total pension liability 82.59% 87.39% Covered-employee payroll $ 4,706,049 $ 4,720,922 Employer's net pension liability as a percentage of coveredemployee payroll % 88.64% Notes to Schedule: The District implemented GASB Statement No. 68 in fiscal year Information prior to fiscal year 2015 is not available. See Auditors' Report and Notes to Required Supplementary Information

49 Two Last Fiscal Years LOMBARD ELEMENTARY SCHOOL DISTRICT 44 ILLINOIS MUNICIPAL RETIREMENT FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS Actuarially determined contribution $ 672,965 $ 689,271 Contributions in relation to the actuarially determined contribution (672,966) (655,086) Contribution deficiency (excess) $ (1) $ 34,185 Covered-employee payroll $ 4,706,049 $ 4,720,922 Contributions as a percentage of coveredemployee payroll 14.30% 13.88% Notes to Schedule: The District implemented GASB Statement No. 68 in fiscal year Information prior to fiscal year 2015 is not available. Valuation date: Actuarially determined contribution rates are calculated as of December 31 each year, which are 6 months prior to the beginning of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percentage of payroll, closed Remaining amortization period 29 years Asset valuation method 5-Year Smoothed Market Inflation 3.00% Salary increases 4.40% to 16.00% including inflation Investment rate of return 7.50% Retirement Age Experience-based table of rates that are specific to the type of eligibility condition Mortality RP-2000 CHBCA Other information: There were no benefit changes during the year. See Auditors' Report and Notes to Required Supplementary Information

50 TEACHERS' RETIREMENT SYSTEM SCHEDULE OF DISTRICT'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AND DISTRICT CONTRIBUTIONS Two Last Fiscal Years District's proportion of the net pension liability % % District's proportionate share of the net pension liability $ 3,427,496 $ 2,981,940 State's proportionate share of the net pension liability 157,461, ,698,549 Total net pension liability $ 160,888,641 $ 150,680,489 Covered-employee payroll $ 25,759,180 $ 24,258,413 District's proportionate share of the net pension liability as a percentage of covered payroll 13.31% 12.29% Plan fiduciary net position as a percentage of the total pension liability 41.50% 43.00% Contractually required contribution $ 216,272 $ 183,541 Contributions in relation to the contractually required contribution (254,847) (181,076) Contribution deficiency (excess) $ (38,575) $ 2,465 Contributions as a percentage of covered employee payroll % % Note: The District implemented GASB 68 in Information for fiscal years prior to 2015 is not applicable. Notes to Schedule: Amounts reported in 2016 reflect an investment rate of return of 7.5 percent, an inflation rate of 3.0 percent and real return of 4.5 percent, and salary increases that vary by service credit. In 2015, assumptions used were an investment rate of return of 7.5 percent, an inflation rate of 3.0 percent and real return of 4.5 percent, and salary increases of 5.75 percent. See Auditors' Report and Notes to Required Supplementary Information

51 SCHEDULE OF FUNDING PROGRESS FOR RETIREE HEALTH PLAN AS OF JUNE 30, 2016 Actuarial Valuation Date Actuarial Value of Assets (a) Actuarial Accrued Liability (AAL) Entry Age (b) Unfunded AAL (UAAL) (b-a) Funded Ratio (a/b) Covered Payroll (c) UAAL as a Percentage of Covered Payroll ((b-a)/c) 7/1/15 $ - $ 1,771,637 $ 1,771,637 N/A $ 5,879, % 7/1/12-1,543,233 1,543,233 N/A 4,780, % 7/1/10-1,424,825 1,424,825 N/A 5,856, % Valuations must be performed every two years for OPEB plans with more than 200 members and at least every three years for plans with fewer than 200 members. The District's plan has less than 200 members. See Auditors' Report and Notes to Required Supplementary Information

52 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL General levy $ 33,546,510 $ 33,543,546 $ (2,964) $ 33,142,853 Tort immunity levy 315, ,502 82, ,987 Special education levy - 373, , ,527 Corporate personal property replacement taxes 790, ,702 (30,298) 792,445 Summer school - tuition from pupils or parents (in state) - 28,023 28,023 25,208 Summer school - tuition from other sources (out of state) 23,000 - (23,000) - Special education - tuition from pupils or parents (in state) 350, , , ,209 Investment income 142, ,565 (32,465) 153,521 Sales to pupils - lunch 305, ,824 (23,176) 284,426 Rentals - regular textbook 300, ,491 62, ,739 Rentals - other 47,222 - (47,222) - Other - textbooks 40,500 - (40,500) - Contributions and donations from private sources ,736 Payments of surplus monies from TIF districts 800, ,353 (44,647) 736,921 Other 200,000 91,762 (108,238) 354,898 Total local sources 36,859,313 37,275, ,811 36,690,470 State sources General state aid 1,875,427 1,421,133 (454,294) 1,389,168 Special education - private facility tuition 470, ,158 (163,842) 490,482 Special education - extraordinary 400, ,982 (97,018) 392,078 Special education - personnel 725, ,190 (144,810) 709,233 Special education - orphanage - individual 55,000 21,280 (33,720) 80,436 Special education - orphanage - summer 7,500 6,617 (883) 4,265 Special education - summer school 3,200 5,679 2,479 5,383 Bilingual education - downstate - TPI 134,562 49,952 (84,610) 115,164 State free lunch & breakfast 12,800 2,220 (10,580) 4,472 Early childhood - block grant 221, ,215 4, ,746 Other restricted revenue from state sources - 3,490 3,490 - Total state sources 3,905,130 2,925,916 (979,214) 3,408,427 See Auditors' Report and Notes to Required Supplementary Information

53 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Federal sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL National school lunch program $ 336,190 $ 341,080 $ 4,890 $ 372,144 School breakfast program 84,361 87,552 3,191 79,672 Food service - other - 44,212 44,212 41,401 Title I - Low income 309, ,764 94, ,623 Title III - English language acquisition 72,950 49,869 (23,081) 35,146 Title II - Teacher quality 125,081 80,012 (45,069) 106,122 Medicaid matching funds - administrative outreach 253, ,052 (88,905) 63,620 Medicaid matching funds - fee-for-service program ,860 Total federal sources 1,182,105 1,171,541 (10,564) 1,212,588 Total revenues 41,946,548 41,372,581 (573,967) 41,311,485 Expenditures Instruction Regular programs Salaries 15,122,425 14,461, ,351 13,999,470 Employee benefits 2,495,140 2,307, ,902 2,190,883 Purchased services 90,600 34,362 56,238 29,977 Supplies and materials 434, ,195 35, ,087 Capital outlay 215, ,431 13, ,461 Other objects 1,550 1,942 (392) 668 Total 18,359,115 17,405, ,873 16,655,546 Pre-K programs Salaries 186, ,467 (468,632) 624,273 Employee benefits 51,547 76,047 (24,500) 76,671 Purchased services - 39,736 (39,736) 38,997 Supplies and materials 13,000 9,814 3,186 11,288 Other objects - 1,515 (1,515) 800 Total 251, ,579 (531,197) 752,029 See Auditors' Report and Notes to Required Supplementary Information

54 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Special education programs Salaries $ 3,410,100 $ 3,390,256 $ 19,844 $ 3,572,621 Employee benefits 687, , , ,676 Supplies and materials 4,500 10,412 (5,912) 687 Capital outlay 5,000 6,259 (1,259) 23,565 Other objects 900,000 1,096,009 (196,009) 1,077,718 Termination benefits - (20,031) 20,031 8,546 Total 5,007,455 5,049,845 (42,390) 5,273,813 Special education programs Pre-K Salaries 332, ,430 (286,430) 525,812 Employee benefits 67,095 94,913 (27,818) 88,365 Purchased services Supplies and materials 35,000-35,000 - Total 434, ,343 (278,748) 614,177 Remedial and supplemental programs K - 12 Salaries 151, ,608 (138,196) 136,385 Employee benefits 73, ,007 (55,442) 43,996 Purchased services 1, Supplies and materials 15,000 1,860 13,140 10,626 Capital outlay 10,000-10,000 9,785 Total 250, ,170 (170,193) 201,542 Summer school programs Salaries 73,500 69,781 3,719 65,874 Employee benefits 799 1,853 (1,054) 768 Purchased services 14,000 10,014 3,986 13,221 Supplies and materials 6,500 4,710 1,790 5,583 Total 94,799 86,358 8,441 85,446 Gifted programs Salaries 334, ,882 44, ,458 Employee benefits 38,738 39,775 (1,037) 46,310 Supplies and materials Total 372, ,782 43, ,768 Bilingual programs Salaries 1,100,000 1,195,940 (95,940) 1,116,465 Employee benefits 185, ,161 (17,799) 192,186 Supplies and materials 31,300 19,875 11,425 14,107 Capital outlay 15,000-15,000 13,086 Total 1,331,662 1,418,976 (87,314) 1,335,844 See Auditors' Report and Notes to Required Supplementary Information

55 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Truant's alternative and optional programs Termination benefits $ 7,500 $ 6,240 $ 1,260 $ 6,050 Total 7,500 6,240 1,260 6,050 Total instruction 26,110,423 26,213,535 (103,112) 25,302,215 Support services Pupils Attendance and social work services Salaries 425, ,486 (97,486) 426,045 Employee benefits 71,355 95,899 (24,544) 79,670 Total 496, ,385 (122,030) 505,715 Guidance services Salaries 325, ,108 (2,327) 317,579 Employee benefits 48,820 38,167 10,653 45,909 Total 374, ,275 8, ,488 Health services Salaries 385, ,085 (10,085) 376,051 Employee benefits 56,605 54,973 1,632 57,298 Purchased services 72,000 36,166 35,834 59,245 Supplies and materials 3,800 5,588 (1,788) 6,048 Total 517, ,812 25, ,642 Psychological services Salaries 200, ,842 (62,842) 236,774 Employee benefits 30,105 34,718 (4,613) 33,639 Total 230, ,560 (67,455) 270,413 Speech pathology and audiology services Salaries 620, ,092 43, ,779 Employee benefits 104, ,259 1, ,094 Total 724, ,351 45, ,873 Total pupils 2,343,266 2,453,383 (110,117) 2,369,131 See Auditors' Report and Notes to Required Supplementary Information

56 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Instructional staff ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Improvement of instructional services Salaries $ 1,395,500 $ 1,445,871 $ (50,371) $ 1,383,418 Employee benefits 499, ,318 60, ,369 Purchased services 172, ,724 8, ,064 Supplies and materials 380, ,803 (53,803) 115,047 Capital outlay 5,000-5,000 2,805 Other objects 2,200 1, ,156 Total 2,455,190 2,485,486 (30,296) 2,082,859 Educational media services Salaries 848, ,651 (77,651) 810,659 Employee benefits 192, ,461 (23,011) 164,430 Purchased services 162, ,927 11, ,574 Supplies and materials 115, ,714 (7,714) 85,969 Capital outlay 707, ,980 (286,980) 365,007 Total 2,024,600 2,408,733 (384,133) 1,556,639 Assessment and testing Purchased services 57,000 3,278 53,722 52,316 Supplies and materials (572) - Total 57,000 3,850 53,150 52,316 Total instructional staff 4,536,790 4,898,069 (361,279) 3,691,814 General administration Board of education services Salaries 7,500-7,500 8,000 Employee benefits 1,920-1,920 3,660 Purchased services 164, ,525 (53,825) 158,010 Supplies and materials 28,000 21,035 6,965 25,387 Other objects 30,100 24,117 5,983 26,357 Total 232, ,677 (31,457) 221,414 Executive administration services Salaries 415, ,136 21, ,437 Employee benefits 71, ,954 (31,397) 55,538 Purchased services 23,850 56,967 (33,117) 7,700 Supplies and materials 5,000 20,248 (15,248) 6,899 Other objects 2,000 2,501 (501) 2,820 Total 517, ,806 (58,399) 490,394 See Auditors' Report and Notes to Required Supplementary Information

57 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Special area administration services Salaries $ 202,000 $ 187,508 $ 14,492 $ 190,847 Employee benefits 63,277 62, ,516 Purchased services 66,800 46,254 20,546 66,968 Supplies and materials 101,000 60,391 40,609 99,429 Capital outlay 5,000 3,308 1,692 5,506 Other objects 1, ,057 - Total 439, ,325 78, ,266 Tort immunity services Purchased services 234, ,142 (9,142) 242,219 Supplies and materials 135, ,312 (312) 127,621 Other objects (463) 1,059 Total 369, ,917 (9,917) 370,899 Total general administration 1,557,924 1,578,725 (20,801) 1,506,973 School administration Office of the principal services Salaries 1,490,000 1,449,212 40,788 1,407,258 Employee benefits 480, ,616 (17,124) 476,910 Purchased services 7,250 6, ,250 Supplies and materials 46,474 37,385 9,089 16,626 Total 2,024,216 1,991,149 33,067 1,908,044 Business Total school administration 2,024,216 1,991,149 33,067 1,908,044 Direction of business support services Salaries 363, ,387 (96,787) 337,741 Employee benefits 108, ,057 (33,642) 105,428 Purchased services 208, ,632 (34,232) 241,875 Supplies and materials 17,000 14,980 2,020 10,618 Capital outlay 2,500 1,285 1,215 - Other objects 81,804 52,848 28,956 87,701 Total 781, ,189 (132,470) 783,363 Operation and maintenance of plant services Purchased services 531, ,587 (14,587) 532,756 Supplies and materials 35,000 34, ,755 Capital outlay 300, ,298 99, ,203 Total 866, ,570 85, ,714 See Auditors' Report and Notes to Required Supplementary Information

58 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Pupil transportation services Salaries $ 27,522 $ 28,186 $ (664) $ 26,531 Employee benefits (29) 489 Purchased services 99,000 89,526 9,474 83,692 Total 127, ,241 8, ,712 Food services Salaries 241, ,002 18, ,610 Employee benefits 7,440 12,711 (5,271) 7,259 Purchased services 606, ,291 80, ,158 Supplies and materials 1,500 45,857 (44,357) 41,801 Capital outlay 10,000 1,034 8,966 9,465 Other objects 3,500-3,500 2,625 Central Total 870, ,895 62, ,918 Total business 2,644,947 2,620,895 24,052 2,592,707 Information services Salaries 5,000-5,000 4,790 Purchased services 15,500 9,070 6,430 14,384 Supplies and materials 1,500 1, ,060 Total 22,000 10,420 11,580 20,234 Staff services Supplies and materials - 57 (57) - Total - 57 (57) - Total central 22,000 10,477 11,523 20,234 Other supporting services Purchased services 6,000 9,859 (3,859) 5,487 Supplies and materials (138) 153 Total 6,150 10,147 (3,997) 5,640 Total support services 13,135,293 13,562,845 (427,552) 12,094,543 Community services Salaries 28,000 24,276 3,724 44,705 Employee benefits 6,604 10,075 (3,471) 11,210 Purchased services 18,350 20,619 (2,269) 19,218 Supplies and materials 8,250 11,393 (3,143) 6,379 Total community services 61,204 66,363 (5,159) 81,512 See Auditors' Report and Notes to Required Supplementary Information

59 GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Payments to other districts and governmental units ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Payments for special education programs Purchased services $ - $ - $ - $ 4,125 Total ,125 Payments for special education programs - tuition Other objects 1,918,000 1,566, ,940 2,424,463 Total 1,918,000 1,566, ,940 2,424,463 Total payments to other districts and governmental units 1,918,000 1,566, ,940 2,428,588 Debt services Interest on short term debt Other interest on short term debt Total Total debt services Provision for contingencies 100, ,000 - Total expenditures 41,325,828 41,408,803 (82,975) 39,906,858 Net change in fund balance $ 620,720 (36,222) $ (656,942) 1,404,627 Fund balance, beginning of year 36,159,002 34,754,375 Fund balance, end of year $ 36,122,780 $ 36,159,002 See Auditors' Report and Notes to Required Supplementary Information

60 OPERATIONS AND MAINTENANCE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL General levy $ 4,831,586 $ 4,739,624 $ (91,962) $ 4,643,565 Investment income 11,457 17,848 6,391 23,242 Rentals 613, ,377 (214,623) 589,973 Other 85,000 - (85,000) 25,357 Total local sources 5,541,043 5,155,849 (385,194) 5,282,137 Total revenues 5,541,043 5,155,849 (385,194) 5,282,137 Expenditures Support services Business Direction of business support services Other objects 11,500 7,411 4,089 13,209 Total 11,500 7,411 4,089 13,209 Operation and maintenance of plant services Salaries 1,142,500 1,148,030 (5,530) 1,110,191 Employee benefits 467, ,900 28, ,876 Purchased services 1,184, , , ,489 Supplies and materials 673, ,596 41, ,303 Capital outlay 2,056,000 2,360,645 (304,645) 1,632,574 Other objects 50,000-50,000 - Total 5,573,700 5,335, ,425 4,574,433 Total business 5,585,200 5,342, ,514 4,587,642 Total support services 5,585,200 5,342, ,514 4,587,642 Total expenditures 5,585,200 5,342, ,514 4,587,642 Net change in fund balance $ (44,157) (186,837) $ (142,680) 694,495 Fund balance, beginning of year 5,684,199 4,989,704 Fund balance, end of year $ 5,497,362 $ 5,684,199 See Auditors' Report and Notes to Required Supplementary Information

61 TRANSPORTATION FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL General levy $ 1,178,966 $ 1,464,112 $ 285,146 $ 1,458,468 Investment income 1,225 4,420 3,195 4,243 Total local sources 1,180,191 1,468, ,341 1,462,711 State sources Transportation - regular/vocational 13,574 10,203 (3,371) 9,667 Transportation - special education 755, ,824 (376,216) 715,755 Total state sources 768, ,027 (379,587) 725,422 Total revenues 1,948,805 1,857,559 (91,246) 2,188,133 Expenditures Support Services Business Pupil transportation services Purchased services 1,592,500 1,487, ,753 1,653,750 Supplies and materials Capital outlay 2,000-2, Other objects 1,300-1,300 - Total 1,596,300 1,487, ,351 1,655,093 Total business 1,596,300 1,487, ,351 1,655,093 Other supporting services Other objects - 2,046 (2,046) 2,659 Total - 2,046 (2,046) 2,659 Total support services 1,596,300 1,489, ,305 1,657,752 Total expenditures 1,596,300 1,489, ,305 1,657,752 Net change in fund balance $ 352, ,564 $ 15, ,381 Fund balance, beginning of year 1,486, ,583 Fund balance, end of year $ 1,854,528 $ 1,486,964 See Auditors' Report and Notes to Required Supplementary Information

62 MUNICIPAL RETIREMENT/SOCIAL SECURITY FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL General levy $ 1,325,779 $ 819,082 $ (506,697) $ 790,256 Social security/medicare only levy - 819, , ,255 Corporate personal property replacement taxes 50,000 58,676 8,676 51,840 Investment income 3,040 1,911 (1,129) 1,816 Total local sources 1,378,819 1,698, ,932 1,634,167 Total revenues 1,378,819 1,698, ,932 1,634,167 Expenditures Instruction Regular programs 195, ,008 (24,791) 210,740 Pre-K programs 15,678 9,344 6,334 8,803 Special education programs 310, ,888 31, ,544 Special education programs Pre-K - 8,583 (8,583) 7,222 Remedial and supplemental programs K ,528 9,769 7,759 13,154 Summer school programs 6,479 6, ,833 Gifted programs 3,577 4,094 (517) 4,608 Bilingual programs 21,442 24,342 (2,900) 25,358 Total instruction 570, ,051 8, ,262 Support services Pupils Attendance and social work services 5,874 7,240 (1,366) 5,973 Guidance services 4,400 4,705 (305) 4,431 Health services 31,997 32,461 (464) 31,995 Psychological services 2,458 4,712 (2,254) 3,228 Speech pathology and audiology services 6,565 6, ,037 Total pupils 51,294 55,318 (4,024) 52,664 Instructional staff Improvement of instructional staff 37,757 41,480 (3,723) 39,803 Educational media services 107, , ,860 Total instructional staff 144, ,114 (3,243) 142,663 General administration Board of education services Executive administration services 54,989 53,204 1,785 51,770 Special area administration services 22,092 21, ,197 Total general administration 77,081 74,710 2,371 73,071 See Auditors' Report and Notes to Required Supplementary Information

63 MUNICIPAL RETIREMENT/SOCIAL SECURITY FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 School administration ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Office of the principal services $ 128,407 $ 127,679 $ 728 $ 120,871 Business Total school administration 128, , ,871 Direction of business support services 58,496 54,458 4,038 53,416 Operations and maintenance of plant services 324, ,917 (8,784) 320,222 Pupil transportation services (41) 376 Food services 24,962 27,357 (2,395) 25,462 Central Total business 407, ,128 (7,182) 399,476 Information services Total central Other supporting services Total support services 810, ,949 (10,885) 789,689 Community services Total expenditures 1,381,354 1,383,301 (1,947) 1,375,362 Net change in fund balance $ (2,535) 315,450 $ 317, ,805 Fund balance, beginning of year 737, ,875 Fund balance, end of year $ 1,053,130 $ 737,680 See Auditors' Report and Notes to Required Supplementary Information

64 NOTES TO REQUIRED SUPPLEMENTARY INFORMATION AS OF AND FOR THE YEAR ENDED JUNE 30, 2016 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY Budgetary Data Except for the exclusion of on-behalf payments from other governments, discussed below, the budgeted amounts for the Governmental Funds are adopted on the modified accrual basis, which is consistent with accounting principles generally accepted in the United States of America. The Board of Education follows these procedures in establishing the budgetary data reflected in the general purpose financial statements: 1. The Administration submits to the Board of Education a proposed operating budget for the fiscal year commencing July 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted and the proposed budget is available for inspection to obtain taxpayer comments. 3. Prior to September 30, the budget is legally adopted through passage of a resolution. By the last Tuesday in December, a tax levy resolution is filed with the county clerk to obtain tax revenues. 4. Management is authorized to transfer budget amounts, provided funds are transferred between the same function and object codes. The Board of Education is authorized to transfer up to a legal level of 10% of the total budget between functions within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the Board of Education, after following the public hearing process mandated by law. 5. Formal budgetary integration is employed as a management control device during the year for all governmental funds. 6. All budget appropriations lapse at the end of the fiscal year. The budget amounts shown in the financial statements are as originally adopted because there were no amendments during the past fiscal year. Budget Reconciliations The Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds (GAAP basis) includes on-behalf payments received and made for the amounts contributed by the State of Illinois for the employer s share of the Teachers Retirement System pension. The District does not budget for these amounts in the Educational Accounts of the General Fund. The differences between the budget and GAAP basis are as follows: Revenues Expenditures General Fund Budgetary Basis $ 41,372,581 $ 41,408,803 To adjust for on-behalf payments received 13,176,168 - To adjust for on-behalf payments made - 13,176,168 General Fund GAAP Basis $ 54,548,749 $ 54,584,971 Excess of Expenditures over Budget For the year ended June 30, 2016, expenditures exceeded budget in the General Fund and IMRF/Social Security Fund by $82,975, and $1,947, respectively. These excesses were funded by available fund balances. See Auditors' Report

65 DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL General levy $ 1,753,169 $ 1,683,378 $ (69,791) $ 1,682,723 Investment income (931) 656 Total local sources 1,754,119 1,683,397 (70,722) 1,683,379 State sources General state aid - 502, , ,543 Total state sources - 502, , ,543 Total revenues 1,754,119 2,185, ,466 2,207,922 Expenditures Debt services Interest on short term debt State aid anticipation certificates 225, ,000 - Other interest on short term debt 1,800-1,800 - Total 226, ,800 - Payments on long term debt Interest on long term debt 1,970, ,645 1,800, ,166 Principal payments on long term debt - 2,005,000 (2,005,000) 1,970,000 Total 1,970,000 2,174,645 (204,645) 2,174,166 Total debt services 2,196,800 2,174,645 22,155 2,174,166 Total expenditures 2,196,800 2,174,645 22,155 2,174,166 Excess (deficiency) of revenues over expenditures (442,681) 10, ,621 33,756 Net change in fund balance $ (442,681) 10,940 $ 453,621 33,756 Fund balance, beginning of year 50,063 16,307 Fund balance, end of year $ 61,003 $ 50,

66 CAPITAL PROJECTS FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Investment income $ 35 $ 39 $ 4 $ 57 Total local sources Total revenues Expenditures Support services Other supporting services Other objects - 16 (16) 29 Total - 16 (16) 29 Total support services - 16 (16) 29 Total expenditures - 16 (16) 29 Net change in fund balance $ $ (12) 28 Fund balance, beginning of year 12,088 12,060 Fund balance, end of year $ 12,111 $ 12,

67 FIRE PREVENTION AND LIFE SAFETY FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Investment income $ 5 $ 6 $ 1 $ 8 Total local sources Total revenues Expenditures Support services Other supporting services Other objects - 2 (2) 4 Total - 2 (2) 4 Total support services - 2 (2) 4 Total expenditures - 2 (2) 4 Net change in fund balance $ 5 4 $ (1) 4 Fund balance, beginning of year 1,770 1,766 Fund balance, end of year $ 1,774 $ 1,

68 GENERAL FUND COMBINING BALANCE SHEET AS OF JUNE 30, 2016 EDUCATIONAL ACCOUNTS TORT IMMUNITY AND JUDGMENT ACCOUNTS WORKING CASH ACCOUNTS TOTAL Assets Cash $ 153,198 $ - $ - $ 153,198 Investments 35,726, ,262 1,952,042 38,298,190 Receivables (net allowance for uncollectibles): Property taxes 17,042, ,060-17,244,170 Replacement taxes 140, ,050 Intergovernmental 889, ,010 Accounts 387, ,357 Tuition 413, ,578 Total assets $ 54,752,189 $ 821,322 $ 1,952,042 $ 57,525,553 Liabilities, deferred inflows of resources, and fund balance Liabilities Accounts payable $ 292,276 $ 14,945 $ - $ 307,221 Salaries and wages payable 2,290, ,290,860 Payroll deductions payable 586, ,188 Other current liabilities 98, ,939 Total liabilities 3,268,263 14,945-3,283,208 Deferred inflows of resources Property taxes levied for a future period 16,990, ,449-17,192,026 Unavailable state and federal aid receivable 513, ,961 Unavailable tuition receivable 413, ,578 Total deferred inflows of resources 17,918, ,449-18,119,565 Fund balance Restricted - 604, ,928 Unassigned 33,565,810-1,952,042 35,517,852 Total fund balance 33,565, ,928 1,952,042 36,122,780 Total liabilities, deferred inflows of resources, and fund balance $ 54,752,189 $ 821,322 $ 1,952,042 $ 57,525,

69 GENERAL FUND COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2016 TORT IMMUNITY EDUCATIONAL AND JUDGMENT ACCOUNTS ACCOUNTS WORKING CASH ACCOUNTS TOTAL Revenues Property taxes $ 33,916,849 $ 397,502 $ - $ 34,314,351 Corporate personal property replacement taxes 759, ,702 State aid 16,102, ,102,084 Federal aid 1,171, ,171,541 Investment income 104,777 1,373 3, ,565 Other 2,091, ,091,506 Total revenues 54,146, ,875 3,415 54,548,749 Expenditures Current: Instruction: Regular programs 17,203, ,203,811 Special programs 6,178, ,178,099 Other instructional programs 2,623, ,623,935 State retirement contributions 13,176, ,176,168 Support Services: Pupils 2,453, ,453,383 Instructional staff 3,904, ,904,089 General administration 1,196, ,917-1,575,417 School administration 1,991, ,991,149 Business 1,719, ,719,765 Transportation 118, ,241 Operations and maintenance 580, ,272 Central 10, ,477 Other supporting services 10, ,147 Community services 66, ,363 Payments to other districts and gov't units 1,566, ,566,060 Capital outlay 1,407, ,407,595 Total expenditures 54,206, ,917-54,584,971 Net change in fund balance (59,595) 19,958 3,415 (36,222) Fund balance, beginning of year 33,625, ,970 1,948,627 36,159,002 Fund balance, end of year $ 33,565,810 $ 604,928 $ 1,952,042 $ 36,122,

70 EDUCATIONAL ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL General levy $ 33,546,510 $ 33,543,546 $ (2,964) $ 33,142,853 Special education levy - 373, , ,527 Corporate personal property replacement taxes 790, ,702 (30,298) 792,445 Summer school - tuition from pupils or parents (in state) - 28,023 28,023 25,208 Summer school - tuition from other sources (out of state) 23,000 - (23,000) - Special education - tuition from pupils or parents (in state) 350, , , ,209 Investment income 134, ,777 (29,454) 146,972 Sales to pupils - lunch 305, ,824 (23,176) 284,426 Rentals - regular textbook 300, ,491 62, ,739 Rentals - other 47,222 - (47,222) - Other - textbooks 40,500 - (40,500) - Contributions and donations from private sources ,736 Payments of surplus monies from TIF districts 800, ,353 (44,647) 736,921 Other 200,000 91,762 (108,238) 354,898 Total local sources 36,536,463 36,872, ,371 36,294,934 State sources General state aid 1,875,427 1,421,133 (454,294) 1,389,168 Special education - private facility tuition 470, ,158 (163,842) 490,482 Special education - extraordinary 400, ,982 (97,018) 392,078 Special education - personnel 725, ,190 (144,810) 709,233 Special education - orphanage - individual 55,000 21,280 (33,720) 80,436 Special education - orphanage - summer 7,500 6,617 (883) 4,265 Special education - summer school 3,200 5,679 2,479 5,383 Bilingual education - downstate - TPI 134,562 49,952 (84,610) 115,164 State free lunch & breakfast 12,800 2,220 (10,580) 4,472 Early childhood - block grant 221, ,215 4, ,746 Other restricted revenue from state sources - 3,490 3,490 - Total state sources 3,905,130 2,925,916 (979,214) 3,408,

71 EDUCATIONAL ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Federal sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL National school lunch program $ 336,190 $ 341,080 $ 4,890 $ 372,144 School breakfast program 84,361 87,552 3,191 79,672 Food service - other - 44,212 44,212 41,401 Title I - Low income 309, ,764 94, ,623 Title III - English language acquisition 72,950 49,869 (23,081) 35,146 Title II - Teacher quality 125,081 80,012 (45,069) 106,122 Medicaid matching funds - administrative outreach 253, ,052 (88,905) 63,620 Medicaid matching funds - fee-for-service program ,860 Total federal sources 1,182,105 1,171,541 (10,564) 1,212,588 Total revenues 41,623,698 40,970,291 (653,407) 40,915,949 Expenditures Instruction Regular programs Salaries 15,122,425 14,461, ,351 13,999,470 Employee benefits 2,495,140 2,307, ,902 2,190,883 Purchased services 90,600 34,362 56,238 29,977 Supplies and materials 434, ,195 35, ,087 Capital outlay 215, ,431 13, ,461 Other objects 1,550 1,942 (392) 668 Total 18,359,115 17,405, ,873 16,655,546 Pre-K programs Salaries 186, ,467 (468,632) 624,273 Employee benefits 51,547 76,047 (24,500) 76,671 Purchased services - 39,736 (39,736) 38,997 Supplies and materials 13,000 9,814 3,186 11,288 Other objects - 1,515 (1,515) 800 Total 251, ,579 (531,197) 752,

72 EDUCATIONAL ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Special education programs Salaries $ 3,410,100 $ 3,390,256 $ 19,844 $ 3,572,621 Employee benefits 687, , , ,676 Supplies and materials 4,500 10,412 (5,912) 687 Capital outlay 5,000 6,259 (1,259) 23,565 Other objects 900,000 1,096,009 (196,009) 1,077,718 Termination benefits - (20,031) 20,031 8,546 Total 5,007,455 5,049,845 (42,390) 5,273,813 Special education programs Pre-K Salaries 332, ,430 (286,430) 525,812 Employee benefits 67,095 94,913 (27,818) 88,365 Purchased services Supplies and materials 35,000-35,000 - Total 434, ,343 (278,748) 614,177 Remedial and supplemental programs K - 12 Salaries 151, ,608 (138,196) 136,385 Employee benefits 73, ,007 (55,442) 43,996 Purchased services 1, Supplies and materials 15,000 1,860 13,140 10,626 Capital outlay 10,000-10,000 9,785 Total 250, ,170 (170,193) 201,542 Summer school programs Salaries 73,500 69,781 3,719 65,874 Employee benefits 799 1,853 (1,054) 768 Purchased services 14,000 10,014 3,986 13,221 Supplies and materials 6,500 4,710 1,790 5,583 Total 94,799 86,358 8,441 85,446 Gifted programs Salaries 334, ,882 44, ,458 Employee benefits 38,738 39,775 (1,037) 46,310 Supplies and materials Total 372, ,782 43, ,768 Bilingual programs Salaries 1,100,000 1,195,940 (95,940) 1,116,465 Employee benefits 185, ,161 (17,799) 192,186 Supplies and materials 31,300 19,875 11,425 14,107 Capital outlay 15,000-15,000 13,086 Total 1,331,662 1,418,976 (87,314) 1,335,

73 EDUCATIONAL ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Truant's alternative and optional programs Termination benefits $ 7,500 $ 6,240 $ 1,260 $ 6,050 Total 7,500 6,240 1,260 6,050 Total instruction 26,110,423 26,213,535 (103,112) 25,302,215 Support services Pupils Attendance and social work services Salaries 425, ,486 (97,486) 426,045 Employee benefits 71,355 95,899 (24,544) 79,670 Total 496, ,385 (122,030) 505,715 Guidance services Salaries 325, ,108 (2,327) 317,579 Employee benefits 48,820 38,167 10,653 45,909 Total 374, ,275 8, ,488 Health services Salaries 385, ,085 (10,085) 376,051 Employee benefits 56,605 54,973 1,632 57,298 Purchased services 72,000 36,166 35,834 59,245 Supplies and materials 3,800 5,588 (1,788) 6,048 Total 517, ,812 25, ,642 Psychological services Salaries 200, ,842 (62,842) 236,774 Employee benefits 30,105 34,718 (4,613) 33,639 Total 230, ,560 (67,455) 270,413 Speech pathology and audiology services Salaries 620, ,092 43, ,779 Employee benefits 104, ,259 1, ,094 Total 724, ,351 45, ,873 Total pupils 2,343,266 2,453,383 (110,117) 2,369,

74 EDUCATIONAL ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Instructional staff ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Improvement of instructional services Salaries $ 1,395,500 $ 1,445,871 $ (50,371) $ 1,383,418 Employee benefits 499, ,318 60, ,369 Purchased services 172, ,724 8, ,064 Supplies and materials 380, ,803 (53,803) 115,047 Capital outlay 5,000-5,000 2,805 Other objects 2,200 1, ,156 Total 2,455,190 2,485,486 (30,296) 2,082,859 Educational media services Salaries 848, ,651 (77,651) 810,659 Employee benefits 192, ,461 (23,011) 164,430 Purchased services 162, ,927 11, ,574 Supplies and materials 115, ,714 (7,714) 85,969 Capital outlay 707, ,980 (286,980) 365,007 Total 2,024,600 2,408,733 (384,133) 1,556,639 Assessment and testing Purchased services 57,000 3,278 53,722 52,316 Supplies and materials (572) - Total 57,000 3,850 53,150 52,316 Total instructional staff 4,536,790 4,898,069 (361,279) 3,691,814 General administration Board of education services Salaries 7,500-7,500 8,000 Employee benefits 1,920-1,920 3,660 Purchased services 164, ,525 (53,825) 158,010 Supplies and materials 28,000 21,035 6,965 25,387 Other objects 30,100 24,117 5,983 26,357 Total 232, ,677 (31,457) 221,414 Executive administration services Salaries 415, ,136 21, ,437 Employee benefits 71, ,954 (31,397) 55,538 Purchased services 23,850 56,967 (33,117) 7,700 Supplies and materials 5,000 20,248 (15,248) 6,899 Other objects 2,000 2,501 (501) 2,820 Total 517, ,806 (58,399) 490,

75 EDUCATIONAL ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Special area administration services Salaries $ 202,000 $ 187,508 $ 14,492 $ 190,847 Employee benefits 63,277 62, ,516 Purchased services 66,800 46,254 20,546 66,968 Supplies and materials 101,000 60,391 40,609 99,429 Capital outlay 5,000 3,308 1,692 5,506 Other objects 1, ,057 - Total 439, ,325 78, ,266 Total general administration 1,188,924 1,199,808 (10,884) 1,136,074 School administration Office of the principal services Salaries 1,490,000 1,449,212 40,788 1,407,258 Employee benefits 480, ,616 (17,124) 476,910 Purchased services 7,250 6, ,250 Supplies and materials 46,474 37,385 9,089 16,626 Total 2,024,216 1,991,149 33,067 1,908,044 Business Total school administration 2,024,216 1,991,149 33,067 1,908,044 Direction of business support services Salaries 363, ,387 (96,787) 337,741 Employee benefits 108, ,057 (33,642) 105,428 Purchased services 208, ,632 (34,232) 241,875 Supplies and materials 17,000 14,980 2,020 10,618 Capital outlay 2,500 1,285 1,215 - Other objects 81,804 52,848 28,956 87,701 Total 781, ,189 (132,470) 783,363 Operation and maintenance of plant services Purchased services 531, ,587 (14,587) 532,756 Supplies and materials 35,000 34, ,755 Capital outlay 300, ,298 99, ,203 Total 866, ,570 85, ,714 Pupil transportation services Salaries 27,522 28,186 (664) 26,531 Employee benefits (29) 489 Purchased services 99,000 89,526 9,474 83,692 Total 127, ,241 8, ,

76 EDUCATIONAL ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Food services Salaries $ 241,666 $ 223,002 $ 18,664 $ 213,610 Employee benefits 7,440 12,711 (5,271) 7,259 Purchased services 606, ,291 80, ,158 Supplies and materials 1,500 45,857 (44,357) 41,801 Capital outlay 10,000 1,034 8,966 9,465 Other objects 3,500-3,500 2,625 Central Total 870, ,895 62, ,918 Total business 2,644,947 2,620,895 24,052 2,592,707 Information services Salaries 5,000-5,000 4,790 Purchased services 15,500 9,070 6,430 14,384 Supplies and materials 1,500 1, ,060 Total 22,000 10,420 11,580 20,234 Staff services Supplies and materials - 57 (57) - Total - 57 (57) - Total central 22,000 10,477 11,523 20,234 Other supporting services Purchased services 6,000 9,859 (3,859) 5,487 Supplies and materials (138) 153 Total 6,150 10,147 (3,997) 5,640 Total support services 12,766,293 13,183,928 (417,635) 11,723,644 Community services Salaries 28,000 24,276 3,724 44,705 Employee benefits 6,604 10,075 (3,471) 11,210 Purchased services 18,350 20,619 (2,269) 19,218 Supplies and materials 8,250 11,393 (3,143) 6,379 Total community services 61,204 66,363 (5,159) 81,512 Payments to other districts and governmental units Payments for special education programs Purchased services ,125 Total ,

77 EDUCATIONAL ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL - NON- GAAP BUDGETARY BASIS FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Payments for special education programs - tuition Other objects $ 1,918,000 $ 1,566,060 $ 351,940 $ 2,424,463 Total 1,918,000 1,566, ,940 2,424,463 Total payments to other districts and governmental units 1,918,000 1,566, ,940 2,428,588 Provision for contingencies 100, ,000 - Total expenditures 40,955,920 41,029,886 (73,966) 39,535,959 Net change in fund balance $ 667,778 (59,595) $ (727,373) 1,379,990 Fund balance, beginning of year 33,625,405 32,245,415 Fund balance, end of year $ 33,565,810 $ 33,625,

78 TORT IMMUNITY AND JUDGMENT ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Tort immunity levy $ 315,051 $ 397,502 $ 82,451 $ 388,987 Investment income 1,010 1, ,805 Total local sources 316, ,875 82, ,792 Total revenues 316, ,875 82, ,792 Expenditures Support Services General administration Workers' compensation or workers' occupational disease act payments Purchased services 200, ,235 (10,235) 196,399 Total 200, ,235 (10,235) 196,399 Unemployment insurance payments Purchased services 20,000 17,962 2,038 19,017 Total 20,000 17,962 2,038 19,017 Insurance payments (regular or selfinsurance Supplies and materials 135, ,312 (312) 127,621 Total 135, ,312 (312) 127,621 Risk management and claims services payments Purchased services 14,000 14,945 (945) 26,803 Total 14,000 14,945 (945) 26,803 Educational, inspectional, supervisory services related to loss prevention or reduction Other objects (463) 1,059 Total (463) 1,059 Total general administration 369, ,917 (9,917) 370,

79 TORT IMMUNITY AND JUDGMENT ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Debt services ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Interest on short term debt Other interest on short term debt $ 908 $ - $ 908 $ - Total Total debt services Total expenditures 369, ,917 (9,009) 370,899 Net change in fund balance $ (53,847) 19,958 $ 73,805 19,893 Fund balance, beginning of year 584, ,077 Fund balance, end of year $ 604,928 $ 584,

80 WORKING CASH ACCOUNTS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL FOR THE YEAR ENDED JUNE 30, 2016 WITH COMPARATIVE ACTUAL AMOUNTS FOR THE YEAR ENDED JUNE 30, 2015 Revenues Local sources ORIGINAL AND FINAL BUDGET 2016 ACTUAL VARIANCE WITH FINAL BUDGET 2015 ACTUAL Investment income $ 6,789 $ 3,415 $ (3,374) $ 4,744 Total local sources 6,789 3,415 (3,374) 4,744 Total revenues 6,789 3,415 (3,374) 4,744 Expenditures Total expenditures Net change in fund balance $ 6,789 3,415 $ (3,374) 4,744 Fund balance, beginning of year 1,948,627 1,943,883 Fund balance, end of year $ 1,952,042 $ 1,948,

81 AGENCY FUNDS - ACTIVITY FUNDS SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED JUNE 30, 2016 BALANCE BALANCE JUNE 30, 2015 ADDITIONS DELETIONS JUNE 30, 2016 Assets Cash $ 172,718 $ 354,596 $ 382,105 $ 145,209 Total assets $ 172,718 $ 354,596 $ 382,105 $ 145,209 Liabilities Butterfield School $ 13,883 $ 11,829 $ 13,885 $ 11,827 Hammerschmidt School 61,505 17,138 26,018 52,625 Manor Hill School 5,744 6,082 4,605 7,221 Parkview School 4,458 13,513 14,902 3,069 Pleasant Lane School 5,019 14,428 12,319 7,128 Madison School (3,303) 6,612 12,183 (8,874) Glen Westlake Middle School 48, ,260 91,107 57,529 Due to student groups 135, , , ,525 Flexible Spending 46,982-18,140 28,842 District Office (12,532) 184, ,876 (16,682) Employee Cafeteria Plan 2, ,524 Due to employees 37, , ,086 14,684 Total liabilities $ 172,718 $ 354,596 $ 382,105 $ 145,

82 Operating Cost Per Pupil LOMBARD ELEMENTARY SCHOOL DISTRICT 44 OPERATING COST AND TUITION CHARGE FOR THE YEAR ENDED JUNE 30, Average Daily Attendance (ADA): 2,832 2,842 Operating Costs: Educational $ 41,029,886 $ 39,535,959 Operations and maintenance 5,342,686 4,587,642 Debt service 2,174,645 2,174,166 Transportation 1,489,995 1,657,752 Municipal retirement/social security 1,383,301 1,375,362 Tort 378, ,899 Subtotal 51,799,430 49,701,780 Less Revenues/Expenditures of Nonregular Programs: Pre-K programs 1,513,849 1,382,231 Summer school 92,381 91,279 Capital outlay 3,768,240 2,505,407 Debt principal retired 2,005,000 1,970,000 Community services 66,664 81,923 Payments to other districts & governmental units 1,566,060 2,428,588 Subtotal 9,012,194 8,459,428 Operating costs $ 42,787,236 $ 41,242,352 Operating Cost Per Pupil - Based on ADA $ 15,111 $ 14,512 Tuition Charge Operating Costs $ 42,787,236 $ 41,242,352 Less - revenues from specific programs, such as special education or lunch programs 3,881,828 4,943,661 Net operating costs 38,905,408 36,298,691 Depreciation allowance 2,925,247 2,741,476 Allowable Tuition Costs $ 41,830,655 $ 39,040,167 Tuition Charge Per Pupil - based on ADA $ 14,773 $ 13,

83 GENERAL OBLIGATION LIMITED TAX BONDS, SERIES 2011 AS OF JUNE 30, 2016 YEAR ENDED JUNE 30, PRINCIPAL INTEREST TOTAL 2017 $ - $ 32,000 $ 32, ,000 32, ,000 24, , ,000 8, ,125 Total $ 1,315,000 $ 96,250 $ 1,411,250 Paying Agent: The Bank of New York Mellon Trust Company, N.A. Principal payment date: December 30 Interest payment dates: December 30 and June 30 Interest rates: 2.50%

84 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2013 AS OF JUNE 30, 2016 YEAR ENDED JUNE 30, PRINCIPAL INTEREST TOTAL 2017 $ 1,590,000 $ 44,825 $ 1,634, ,610,000 24,791 1,634, ,500 4, ,005 Total $ 3,557,500 $ 74,121 $ 3,631,621 Paying Agent: The Bank of New York Trust Company Principal payment date: December 30 Interest payment dates: June 30 and December 30 Interest rates: 1.25%

85 GENERAL OBLIGATION LIMITED TAX REFUNDING CERTIFICATES, SERIES 2014A AS OF JUNE 30, 2016 YEAR ENDED JUNE 30, PRINCIPAL INTEREST TOTAL 2017 $ 435,000 $ 63,588 $ 498, ,000 54, , ,000 41, , ,000 32, , ,000 22, , ,000 12, ,250 Total $ 2,775,000 $ 227,537 $ 3,002,537 Paying Agent: The Bank of New York Trust Company Principal payment date: February 1 Interest payment dates: February 1 and August 1 Interest rates: 2.00% %

86 Statistical Section This part of the District's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the District's overall financial health. Contents Page Financial Trends 82 These schedules contain trend information to help the reader understand how the District's financial performance and well-being have changed over time. Revenue Capacity 94 These schedules contain information to help the reader assess the District's most significant local revenue source, the property tax. Debt Capacity 100 These schedules present information to help the reader assess the affordability of the District's current levels of outstanding debt and the District's ability to issue additional debt in the future. Demographic and Economic Information 105 These schedules offer demographic and economic indicators to help the reader understand the environment within the District's financial activities take place. Operating Information 109 These schedules contain information about the District's service and resources to help the reader understand how the District's financial information relates to the services the District provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

87 NET POSITION BY COMPONENT LAST TEN FISCAL YEARS Governmental activities Net investment in capital assets $ 40,575,395 $ 37,545,024 $ 35,845,568 $ 34,784,080 Restricted 8,123,438 7,757,903 6,513,130 5,820,132 Unrestricted 28,544,784 27,794,209 26,513,138 30,295,194 Total governmental activities Net Position $ 77,243,617 $ 73,097,136 $ 68,871,836 $ 70,899,406 Note: The District adopted GASBs 68 and 71 as of June 30, The years of 2014 and prior were not restated

88 $ 32,994,298 $ 31,606,395 $ 29,238,763 $ 28,832,472 $ 28,943,111 $ 29,178,802 4,412,696 4,434, ,437 1,106,163 1,318,543 1,129,317 29,053,721 28,387,347 28,244,990 23,271,492 17,318,033 11,363,407 $ 66,460,715 $ 64,428,703 $ 58,354,190 $ 53,210,127 $ 47,579,687 $ 41,671,

89 CHANGES IN NET POSITION LAST TEN FISCAL YEARS Expenses Instruction: Regular programs $ 19,887,703 $ 19,193,613 $ 18,939,140 $ 18,803,905 Special programs 8,126,705 9,042,300 8,035,819 7,880,650 Other instructional programs 2,643,371 2,590,804 2,521,910 2,467,187 State retirement contributions 13,176,168 12,138,737 8,594,937 6,638,382 Support services: Pupils 2,534,471 2,455,791 2,383,225 2,233,994 Instructional staff 4,200,184 3,167,987 3,876,113 3,062,324 General administration 1,891,499 1,624,971 1,575,096 1,363,062 School administration 1,964,726 2,040,458 2,078,876 1,975,186 Business 2,022,942 1,745,414 1,616,531 1,511,052 Transportation 1,608,812 1,768,567 1,759,318 1,703,378 Operations and maintenance 4,097,795 4,378,164 3,638,669 3,880,813 Food service Central 8,287 22,420 77,363 16,427 Other supporting services 12,211 8,332 6,852 8,353 Community services 65,072 81,909 46,375 46,636 Nonprogrammed charges Interest and fees 117, , , ,336 Total expenses $ 62,357,934 $ 60,480,301 $ 55,869,938 $ 52,149,685 Program Revenues Charges for services Instruction: Regular programs $ 454,253 $ 709,994 $ 505,085 $ 485,772 Special programs 985, , , ,032 Other instructional programs 28,023 25,208 23,848 21,170 Support services: Business 281, , , ,746 Operations and maintenance 398, , , ,246 Operating grants and contributions 16,885,818 16,038,961 12,393,684 10,249,491 Capital grants and contributions ,000 - Total program revenues $ 19,033,926 $ 17,758,771 $ 14,173,150 $ 12,049,457 Net (expense)/revenue $ (43,324,008) $ (42,721,530) $ (41,696,788) $ (40,100,228) General revenues Taxes: Real estate taxes, levied for general purposes $ 33,916,849 $ 33,459,380 $ 32,968,526 $ 32,004,480 Real estate taxes, levied for specific purposes 8,239,402 8,071,531 7,910,151 7,161,959 Real estate taxes, levied for debt service 1,683,378 1,682,723 1,697,602 1,669,907 Personal property replacement taxes 818, , , ,661 Federal and State aid-formula grants 1,923,321 1,913,711 1,802,960 1,573,529 Investment earnings 133, ,543 94,134 67,727 Miscellaneous 755, , ,265 1,291,656 Total general revenues $ 47,470,489 $ 46,946,830 $ 46,063,264 $ 44,538,919 Change in net position $ 4,146,481 $ 4,225,300 $ 4,366,476 $ 4,438,

90 $ 19,751,324 $ 18,633,857 $ 17,543,308 $ 17,459,559 $ 16,457,522 $ 15,695,471 7,535,633 7,058,890 6,223,027 6,006,574 5,788,414 5,237,856 2,314,479 1,939,349 1,484, , , ,679 6,003,283 5,328,875 3,792,069 3,622,507 2,717,422 1,825,185 2,439,264 2,257,555 2,139,853 2,103,604 1,881,434 1,828,467 3,954,762 3,022,547 3,652,395 3,186,712 3,254,645 3,217,113 1,442,711 1,477,687 1,288,730 1,222,334 1,281,468 1,253,430 1,916,530 1,845,543 1,739,539 1,993,833 1,792,320 1,600,411 1,530,757 1,520,769 1,501,992 1,421, ,383 1,581,185 1,557,881 1,358,340 1,414,259 1,338,715 1,193,149 1,102,531 3,559,417 2,769,115 3,338,781 3,295,350 3,586,296 3,136, , , ,411 98,540 85,549 86,583 13,404 8,771 1,224 3,049 1, ,316 61,440 67,675 61,486 55,676 52, , , , , , , ,371 $ 52,814,364 $ 48,059,131 $ 45,009,366 $ 43,392,048 $ 40,379,252 $ 38,423,449 $ 492,953 $ 368,946 $ 388,740 $ 403,147 $ 311,170 $ 275, , , , , , ,490 18,342 20,191 21,216 13,199 30,995 29, , , , , , , , , , , , ,908 9,564,560 9,756,274 7,665,344 7,154,589 5,805,292 4,713, $ 11,323,643 $ 11,508,805 $ 9,376,136 $ 9,037,621 $ 7,525,092 $ 6,237,126 $ (41,490,721) $ (36,550,326) $ (35,633,230) $ (34,354,427) $ (32,854,160) $ (32,186,323) $ 32,407,058 $ 31,998,535 $ 31,334,305 $ 30,375,856 $ 28,320,324 $ 26,234,819 6,359,113 5,941,878 5,547,674 5,304,626 5,276,454 4,996,646 1,686,466 1,697,031 1,362,694 1,365,531 1,630,190 1,448, , , , , , ,037 1,441,169 1,370,546 1,053, ,185 1,148,981 1,066, ,980 82, , , , , , , , , , ,574 $ 43,522,733 $ 42,624,839 $ 40,777,293 $ 39,984,867 $ 38,762,321 $ 36,043,810 $ 2,032,012 $ 6,074,513 $ 5,144,063 $ 5,630,440 $ 5,908,161 $ 3,857,

91 FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS General Fund Restricted $ 604,928 $ 584,970 $ 565,077 $ 504,608 Unassigned 35,517,852 35,574,032 34,189,298 32,057,786 Reserved Unreserved Total general fund $ 36,122,780 $ 36,159,002 $ 34,754,375 $ 32,562,394 All other governmental funds Nonspendable $ - $ 36,094 $ - $ - Restricted Special revenue funds 8,405,020 7,908,843 6,425,162 5,313,758 Debt service fund 61,003 13,969 16,307 33,182 Capital projects funds 1,774 1,770 1,766 1,766 Assigned Capital projects funds 12,111 12,088 12,060 12,059 Reserved Capital projects funds Unreserved Special revenue funds Debt service fund Capital projects funds Total all other governmental funds $ 8,479,908 $ 7,972,764 $ 6,455,295 $ 5,360,765 Note: The District adopted GASB 54 as of June 30, Prior years are not restated

92 $ 479,835 $ 427,691 $ - $ - $ - $ - 30,250,779 29,455, ,250 4, , , ,259,500 20,890,193 15,916,340 10,923,756 $ 30,730,614 $ 29,883,326 $ 24,263,750 $ 20,894,443 $ 16,258,798 $ 11,273,869 $ - $ - $ - $ - $ - $ - 3,931,199 4,005, ,085 41, ,766 1, ,873 33, ,103 45,103 22, ,392,778 4,981,888 4,182,007 3,758, , , , , , ,823 50,350 50,648 $ 3,990,923 $ 4,082,034 $ 5,606,449 $ 5,471,644 $ 5,013,018 $ 4,590,

93 GOVERNMENTAL FUNDS REVENUES LAST TEN FISCAL YEARS Local Sources Property taxes $ 43,839,629 $ 43,213,634 $ 42,576,279 $ 40,836,346 $ 40,452,637 Replacement taxes 818, , , , ,196 Tuition 600, , , , ,714 Earnings on investments 133, ,543 94,134 67, ,980 Other local sources 1,889,807 2,376,050 2,138,919 2,678,420 2,137,120 Total local sources 47,281,698 46,752,929 45,994,770 44,765,356 43,840,647 State sources General state aid 1,923,321 1,913,711 1,802,960 1,573,529 1,441,169 Other state aid 15,069,978 14,883,418 11,283,486 9,700,879 8,494,699 Total state sources 16,993,299 16,797,129 13,086,446 11,274,408 9,935,868 Federal sources 1,171,541 1,212,588 1,099,176 1,099,557 1,055,653 Total $ 65,446,538 $ 64,762,646 $ 60,180,392 $ 57,139,321 $ 54,832,

94 $ 39,637,444 $ 38,244,673 $ 37,046,013 $ 35,226,968 $ 32,679, , , , , , , , , , ,870 82, , , , ,815 1,976,944 2,032,608 2,131,639 2,118,907 2,186,429 43,006,824 41,503,432 40,807,846 39,394,774 36,658,692 1,370,546 1,053, ,185 1,148,981 1,066,843 7,944,838 5,614,043 6,247,023 4,982,637 3,766,927 9,315,384 6,667,721 7,206,208 6,131,618 4,833,770 2,092,660 1,206,677 1,041, , ,644 $ 54,414,868 $ 49,377,830 $ 49,055,302 $ 46,349,047 $ 42,292,

95 GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO LAST TEN FISCAL YEARS Current: Instruction Regular programs 17,423,819 $ 16,740,825 $ 16,443,630 $ 16,279,286 Special programs 6,476,339 6,386,102 6,253,515 5,956,143 Other instructional programs 2,667,738 2,588,653 2,511,507 2,464,853 State retirement contributions 13,176,168 12,138,737 8,594,937 6,638,382 Total instruction 39,744,064 37,854,317 33,803,589 31,338,664 Supporting Services Pupils 2,508,701 2,421,795 2,358,399 2,209,296 Instructional staff 4,052,203 3,466,665 3,865,035 3,667,037 General administration 1,650,127 1,574,538 1,549,699 1,337,644 School administration 2,118,828 2,028,915 2,072,779 1,968,880 Business 1,808,991 1,679,903 1,575,182 1,469,858 Transportation 1,606,586 1,765,231 1,756,855 1,700,923 Operations and maintenance 3,887,819 3,829,592 3,839,551 3,399,893 Central 10,477 21,178 76,794 15,607 Other supporting services 12,211 8,332 6,852 8,353 Total supporting services 17,655,943 16,796,149 17,101,146 15,777,491 Community services 66,664 81,923 46,408 46,695 Nonprogrammed charges 1,566,060 2,428,588 1,667,568 1,808,703 Total current 59,032,731 57,160,977 52,618,711 48,971,553 Other: Debt service: Principal 2,005,000 1,970,000 11,975,000 1,712,600 Interest 169, , , ,692 Capital outlay 3,768,240 2,505,407 2,278,181 2,738,854 Total Other 5,942,885 4,679,573 14,703,020 4,966,146 Total $ 64,975,616 $ 61,840,550 $ 67,321,731 $ 53,937,699 Debt service as a percentage of noncapital expenditures 3.55% 3.66% 19.10% 4.35%

96 $ 16,801,113 $ 15,860,741 $ 14,867,120 $ 15,231,741 $ 14,544,674 $ 13,981,868 5,998,159 5,611,414 5,144,308 4,851,256 4,544,451 4,253,914 2,307,441 1,924,363 1,688, , , ,679 6,003,283 5,328,875 3,792,069 3,622,507 2,717,422 1,825,185 31,109,996 28,725,393 25,491,882 24,444,323 22,605,948 20,784,646 2,403,935 2,223,929 2,106,458 2,070,400 1,861,450 1,810,437 3,353,808 3,468,656 3,256,944 3,193,522 3,457,061 2,957,601 1,407,011 1,446,576 1,256,377 1,193,691 1,255,957 1,234,468 1,899,594 1,827,866 1,719,315 1,962,984 1,786,270 1,612,367 1,477,708 1,465,772 1,453,811 1,382,420 1,250,455 1,552,381 1,554,999 1,355,668 1,411,667 1,326,499 1,281,231 1,100,858 3,832,228 3,284,476 3,085,282 3,189,143 3,627,354 2,654, , ,915 94,988 84,800 85, ,516 8,769 1,224 3,049 1, ,404 16,042,826 15,179,082 14,387,891 14,404,889 14,605,017 13,136,691 61,331 67,542 61,274 55,582 52,671 55,316 1,386,303 1,306, ,226 1,035,889 1,153, ,598 48,600,456 45,278,175 40,892,273 39,940,683 38,417,567 34,886,251 1,629,939 1,590,087 1,508,695 1,390,086 1,208, , , , , , , ,984 3,294,964 2,818,260 2,785,304 1,840,031 1,174,784 1,394,328 5,515,625 5,041,532 4,981,445 4,051,859 3,216,555 3,232,445 $ 54,116,081 $ 50,319,707 $ 45,873,718 $ 43,992,542 $ 41,634,122 $ 38,118, % 4.68% 5.10% 5.25% 5.05% 5.01%

97 OTHER FINANCING SOURCES AND USES AND NET CHANGE IN FUND BALANCES LAST TEN FISCAL YEARS Excess of revenues over (under) expenditures $ 470,922 $ 2,922,096 $ (7,141,339) $ 3,201,622 Other financing sources (uses) Transfers in ,360 Transfer out (437,360) Principal on bonds sold ,307,500 - Premium on bonds sold ,350 - Payment to escrow Bond refunding Sale of capital assets ,000 - Capital lease proceeds Total ,427,850 - Net change in fund balances $ 470,922 $ 2,922,096 $ 3,286,511 $ 3,201,

98 $ 716,087 $ 4,131,902 $ 3,504,112 $ 5,062,760 $ 4,714,925 $ 4,173, , , (25,451) (336,669) - - 1,315, ,195, , (1,274,910) - - (4,216,349) , , ,521 40, , , ,496 $ 756,177 $ 4,131,902 $ 3,504,112 $ 5,094,271 $ 5,407,072 $ 4,658,

99 ASSESSED VALUATION AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN LEVY YEARS LEVY ASSESSED VALUATION YEAR RESIDENTIAL FARMS COMMERCIAL INDUSTRIAL RAILROAD 2015 $ 698,475,549 $ - $ 297,248,677 $ 28,664,120 $ 732, ,921, ,618,727 27,213, , ,572, ,851,304 28,443, , ,219, ,123,102 30,229, , ,469, ,541,674 33,227, , ,904, ,557,510 35,695, , ,913, ,464,385 38,572, , ,020, ,604,911 38,371, , ,672,830 1, ,422,120 36,210, , ,792,888 1, ,409,875 33,313, ,006 Source: DuPage County Clerk Note: The county assesses property at approximately 33.3% of actual value for all types of real property

100 TOTAL ASSESSED VALUE ESTIMATED ACTUAL VALUE $ 1,025,121,091 $ 3,075,363, ,367,876 2,959,103,628 1,001,457,508 3,004,372,524 1,071,054,821 3,213,164,463 1,163,668,372 3,491,005,116 1,263,564,290 3,790,692,870 1,362,280,577 4,086,841,731 1,375,276,167 4,125,828,501 1,280,564,641 3,841,693,923 1,189,755,345 3,569,266,

101 PROPERTY TAX RATES - ALL DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN TAX LEVY YEARS District direct rates Educational $ $ $ $ Tort immunity Operations and maintenance Special education Debt service Transportation Illinois municipal retirement Social security Total direct Overlapping rates DuPage County DuPage County Forest Preserve York Township York Township road district Village of Lombard Helen Plum Library District Lombard Park District DuPage Airport Authority High School District # Community College District # Total direct and overlapping rate $ $ $ $ Source: DuPage County Clerk Note: Tax rates are per $100 of assessed value

102 $ $ $ $ $ $ $ $ $ $ $ $

103 PRINCIPAL PROPERTY TAXPAYERS IN THE DISTRICT CURRENT YEAR AND NINE YEARS AGO 2015 PERCENTAGE OF EQUALIZED EQUALIZED ASSESSED ASSESSED TAXPAYER VALUATION VALUATION YTC Mall Owner LLC $ 26,063, % City View Highland Apartments 17,394, % Grove Residential LLC 12,689, % Three Galleria Tower 11,998, % YTC Butterfield Owner LLC 11,979, % Federal Realty Investment 9,236, % Legacy Partners Residentl 8,853, % Oak Creek Center LL LLC 8,161, % UBS Realty Investors 6,942, % Royal Mgmt Corp 6,591, % Total $ 119,911, % Source: DuPage County Clerk PERCENTAGE OF 2006 TOTAL 2006 EQUALIZED EQUALIZED ASSESSED ASSESSED TAXPAYER VALUATION VALUATION City View Apartments $ 17,500, % SMII Oak Creek LP 14,189, % TA Associate Realty 12,896, % Federal Realty Investment 9,552, % Aimco 8,982, % Woodlake Prkview Investments 8,747, % Yorktown LLC 7,995, % Centro Bradley Spe 5 LLC and Bradley Operating Ltd. Prt. 7,822, % Avalon IL Value III LLC 7,639, % Dan Development 7,055, % Total $ 102,381, % Source: DuPage County Clerk

104 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN LEVY YEARS COLLECTED WITHIN THE TAXES LEVIED FISCAL YEAR OF THE LEVY COLLECTIONS IN TOTAL COLLECTIONS TO DATE LEVY FOR THE PERCENTAGE SUBSEQUENT PERCENTAGE YEAR LEVY YEAR AMOUNT OF LEVY YEARS AMOUNT OF LEVY 2015 $ 44,120,186 $ 21,949, % $ - $ 21,949, % ,721,742 21,380, % 22,259,321 43,640, % ,057,666 21,005, % 21,873,417 42,879, % ,216,697 20,166, % 21,990,425 42,156, % ,865,706 19,886, % 20,849,987 40,736, % ,139,647 19,546, % 20,525,265 40,071, % ,811,373 18,125, % 20,586,773 38,712, % ,744,454 17,564, % 20,119,979 37,684, % ,599,817 17,181, % 19,341,935 36,523, % ,875,904 16,498, % 17,272,513 33,770, % Source: DuPage County Clerk and District Financial Records

105 OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS GENERAL OUTSTANDING OBLIGATION CAPITAL DEBT DEBT PER YEAR BONDS LEASES CERTIFICATES TOTAL CAPITA 2016 $ 4,872,500 $ - $ 2,775,000 $ 7,647,500 $ ,447,500-3,205,000 9,652, ,997,500-3,625,000 11,622, ,290, ,290, ,855, ,600-15,002, ,085, , ,000 16,592, ,320, , ,000 18,182, ,480, , ,000 19,691, ,565, , ,000 21,086, ,590, , ,000 21,602, Note: See Demographic and Economic Statistics table for personal and population data. Note: Personal income information not available. Source: DuPage County Clerk and District Financial Records

106 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS LESS: PERCENTAGE AMOUNTS NET OF NET GENERAL GENERAL AVAILABLE GENERAL BONDED DEBT NET GENERAL FISCAL BONDED TO REPAY BONDED TO ESTIMATED BONDED DEBT YEAR DEBT PRINCIPAL DEBT ACTUAL VALUATION PER CAPITA 2016 $ 4,872,500 $ (61,003) $ 4,811, % $ ,447,500 (13,969) 6,433, % ,997,500 (16,307) 7,981, % ,290,000 (33,182) 13,256, % ,855,000 (42,085) 14,812, % ,085,000 (41,021) 16,043, % ,320,000 (63,945) 17,256, % ,480,000 (343,830) 18,136, % ,565,000 (758,489) 18,806, % ,590,000 (781,275) 19,808, % 451 Source: DuPage County Clerk and District Financial Records

107 COMPUTATION OF DIRECT AND OVERLAPPING DEBT JUNE 30, 2016 NET DIRECT AND DEBT OVERLAPPING OVERLAPPING GOVERNMENTAL JURISDICTION OUTSTANDING PERCENT DEBT Overlapping debt: County DuPage County $ 42,020,000 (1)(3) 3.025% $ 1,271,220 DuPage County Forest Preserve 140,577,987 (2) 3.025% 4,252,867 School Districts High School District 87 57,705,000 (1)(3) % 12,237,727 Community Colleges CC District ,170,000 (1) 2.698% 5,212,402 Park Districts Butterfield Park District 3,135,370 (1) % 1,412,403 Downers Grove Park District 9,620,000 (1) 1.534% 147,589 Glen Ellyn Park District 6,245, % 71,035 Lombard Park District 6,657, % 4,671,733 York Center Park District 480, % 13,930 Municipalities Village of Downers Grove 75,185,000 (4) 2.428% 1,825,793 Village of Glen Ellyn 21,995, % 444,476 Total overlapping debt 31,561,175 Direct debt: Lombard School District 44 4,872,500 (3) % 4,872,500 Total Direct and Overlapping Debt $ 36,433,675 (1) Excludes principal amounts of outstanding General Obligation Alternate Revenue Source Bonds which are expected to be paid from sources other than general taxation. (2) Includes principal amounts of outstanding General Obligation Capital Appreciation Bonds (3) Excludes outstanding Debt Certificates (4) Includes outstanding TIF bonds Source: DuPage County Clerk NOTE: Percent applicable to School District calculated using assessed valuation of the School District area value contained within the noted governmental unit divided by assessed valuation of the governmental unit. Overlapping governments with no outstanding debt are not reflected

108 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS Debt Limit $ 70,733,355 $ 68,059,383 $ 69,100,568 $ 73,902,783 Total Net Debt Applicable to Limit 7,647,500 9,652,500 11,622,500 13,290,000 Legal Debt Margin $ 63,085,855 $ 58,406,883 $ 57,478,068 $ 60,612,783 Total Net Debt Applicable to the Limit as a Percentage of Debt Limit 11% 14% 17% 18% Source: DuPage County Clerk and District Financial Records

109 Fiscal Year $ 80,293,118 $ 87,185,936 $ 93,997,360 $ 94,894,056 $ 88,358,958 $ 82,093,119 15,002,600 16,592,539 16,592,539 19,691,321 21,086,047 21,602,903 $ 65,290,518 $ 70,593,397 $ 77,404,821 $ 75,202,735 $ 67,272,911 $ 60,490,216 19% 19% 18% 21% 24% 26%

110 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN YEARS AVERAGE FISCAL PER CAPITA DAILY PER STUDENT UNEMPLOYMENT YEAR POPULATION EAV EAV ATTENDANCE EAV RATE ,311 $ 1,025,121,091 $ 29,031 2,832 $ 361, % , ,367,876 27,944 2, , % ,968 1,001,457,508 28,639 2, , % ,968 1,071,054,821 30,630 2, , % ,968 1,163,668,372 33,278 2, , % ,968 1,263,564,290 36,135 2, , % ,968 1,362,280,577 38,958 2, , % ,975 1,375,276,167 32,002 2, , % ,894 1,280,564,641 29,174 2, , % ,894 1,189,755,345 27,105 2, , % Source: DuPage County Clerk and District Financial Records

111 PRINCIPAL EMPLOYERS CURRENT YEAR AND TEN YEARS AGO 2016 NUMBER OF PERCENTAGE OF EMPLOYER EMPLOYEES TOTAL EMPLOYMENT (6) Acosta % Pernix Group (HQ) % Von Mauer % West Suburban Bancorp, Inc % Unisys Corp % Carson Pirie Scott % Imperial Service Systems % Jewel-Osco % Village of Lombard % Glenbard East % Lombard School District % Beacon Hill % 3, % (6) Calculation using Illinois Department of Employment reports an estimated 16,205 persons were employed in the district in Data Sources (1) 2016 Illinois Manufacturers Directory (2) 2016 Illinois Services Directory (3) ReferenceUSA.com (4) Phone canvass of employers (5) Company/Organization Website (6) Illinois Department of Employment Security PERCENTAGE OF EMPLOYER EMPLOYEES TOTAL EMPLOYMENT Glenbard High School District N/A Commercial Testing & Engineering Company 800 Newark Electronics Corp. 530 Von Maur 500 Acosta-PMI-Inc. 500 Lombard SD Adjustable Forms Inc. 350 JC Penney 300 Carson Pirie Scott 300 Professional Marketers ,975 SOURCE OF INFORMATION: District Financial Records. Total employment not available

112 NUMBER OF EMPLOYEES BY TYPE LAST TEN FISCAL YEARS Administration: Superintendent Assistant Superintendent District Administrators Principals and assistants Total administration Teachers: Literacy Support Elementary Middle school Instrumental music Special education and bilingual Psychologists Social workers and counselors Learning center Total teachers Other supporting staff: Learning center assistants Clerical 10/12 Month Teacher assistants Health assistants Maintenance, custodians and warehouse Nurses Total support staff Total staff Source: District personnel records

113

114 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS PERCENTAGE OF STUDENTS RECEIVING AVERAGE COST PUPIL - FREE OR FISCAL DAILY OPERATING PER PERCENTAGE TEACHING TEACHER REDUCED PRICE- YEAR ATTENDANCE EXPENDITURES PUPIL CHANGE STAFF RATIO MEALS ,832 $ 42,787,236 $ 15, % % ,842 41,242,352 14, % % ,822 39,663,320 14, % % ,935 38,146,700 12, % % ,943 38,032,693 12, % % ,925 41,567,982 14, % % ,862 39,885,508 13, % % ,894 38,158,207 13, % % ,895 41,047,578 14, % % ,865 32,087,996 11, % % Source: District records Note: Amounts exclude state "on-behalf" payments

115 SCHOOL BUILDING INFORMATION LAST TEN FISCAL YEARS Butterfield Elementary School (1962) Square Feet 46,346 46,346 46,346 46,346 Capacity (Students) Enrollment William Hammerschmidt Elem School (1927) Square Feet 59,980 59,980 59,980 56,853 Capacity (Students) Enrollment Madison Elementary School (1952) Square Feet 78,080 78,080 78,080 78,080 Capacity (Students) Enrollment Manor Hill Elementary School (1959) Square Feet 55,680 55,680 55,680 55,680 Capacity (Students) Enrollment Park View Elementary School (1955) Square Feet 37,770 37,770 37,770 37,770 Capacity (Students) Enrollment Pleasant Lane School (1951) Square Feet 55,038 55,038 55,038 55,038 Capacity (Students) Enrollment Glenn Westlake Middle School (1965) Square Feet 129, , , ,056 Capacity (Students) ,320 1,320 1,320 Enrollment ,004 1, Source: District records

116 ,346 46,346 40,880 40,880 40,880 40, ,853 56,853 56,853 56,853 56,853 56, ,080 78,080 78,080 78,080 78,080 78, ,680 55,680 55,680 55,680 55,680 55, ,770 37,770 37,770 37,770 37,770 37, ,038 55,038 55,038 55,038 55,038 55, , , , , , ,056 1,320 1,320 1,320 1,320 1,320 1, ,038 1,038 1,044 1,

117 MISCELLANEOUS STATISTICS JUNE 30, 2016 Location: DuPage County, Illinois Date of Organization: 1861 Number of Schools: 7 Area Served: Portions of the communities of Lombard and Glen Ellyn Median Home Value: 276,839 Average Daily Attendance: 2,832 Certified Teaching Staff: 257 Average Class Size: K Pupil/Teacher Ratio: 11.0 Source: District records

118 Page 37 Page 37 ANNUAL FEDERAL FINANCIAL COMPLIANCE REPORT (COVER SHEET) DISTRICT/JOINT AGREEMENT Year Ending June 30, 2016 DISTRICT/JOINT AGREEMENT NAME RCDTNUMBER CPA FIRM 9-DIGIT STATE REGISTRATION NUMBER Lombard Elementary School District ADMINISTRATIVE AGENT IF JOINT AGREEMENT (as applicable) NAME AND ADDRESS OF AUDIT FIRM Baker Tilly Virchow Krause, LLP 1301 West 22nd Street, Suite 400 ADDRESS OF AUDITED ENTITY Oak Brook IL (Street and/or P.O. Box, City, State, Zip Code) ADDRESS: 150 West Madison NAME OF AUDIT SUPERVISOR Lombard James White IL CPA FIRM TELEPHONE NUMBER (630) james. wh 'FAX NUMBER (630) THE FOLLOWING INFORMATION MUST BE INCLUDED IN THE SINGLE AUDIT REPORT: [R] A copy of the CPA firm's most recent peer review report and acceptance letter has been submitted to IS BE (either with the audit or under separate cover). [R] Financial Statements including footnotes Title 2 CFR (a) [R] Schedule of Expenditures of Federal Awards including footnotes Title 2 CFR (b) [R] Independent Auditor's Report Title 2 CFR (a) [R] Independent Auditor's Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Title 2 CFR (b) 0 Independent Auditor's Report on Compliance with Requirements Applicable to each Major Program and Internal Control over Compliance Title 2 CFR (c) [R] Schedule of Findings and Questioned Costs Title 2 CFR (d) (1)- (3) 0 Summary Schedule of Prior Year Audit Findings Title 2 CFR (b) 0 Corrective Action Plan Title 2 CFR (c) THE FOLLOWING INFORMATION IS HIGHLY RECOMMENDED TO BE INCLUDED: D Copy of Federal Data Collection Form Title 2 CFR (b) 0 Copy(ies) of Management Letter(s)

119 Baker Tilly Virchow Krause, LLP 1301 W 22nd Sr, Sre 400 Oak Brook, IL rel fax bakertilly.com REPORTONINTERNALCONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Independent Auditors' Report To the Board of Education Lombard Elementary School District 44 Lombard, Illinois We have audited, in accordance with the 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 financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Lombard Elementary School District 44 as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise Lombard Elementary School District 44's basic financial statements and have issued our report thereon dated December 7, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Lombard Elementary School District 44'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 financial statements, but not for the purpose of expressing an opinion on the effectiveness of Lombard Elementary School District 44's internal control. Accordingly, we do not express an opinion on the effectiveness of Lombard Elementary School District 44's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be material weaknesses and another deficiency that we consider to be a significant deficiency. ~ anindependentmemberof BAKER TILLY I NTERNATIONAL

120 To the Board of Education Lombard Elementary School District 44 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. We consider certain deficiencies described in the accompanying schedule of findings and questioned costs to be material weaknesses. These material weaknesses are items , , and 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. We consider the following deficiency described in the accompanying schedule of findings and questioned costs to be a significant deficiency. This significant deficiency is item Compliance and Other Matters As part of obtaining reasonable assurance about whether Lombard Elementary School District 44's financial 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 of financial 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. Lombard Elementary School District 44's Responses to Findings Lombard Elementary School District 44's responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. Lombard Elementary School District 44's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. 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 result 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. Oak Brook, Illinois December 7, 2016

121 Baker Ti lly Virchow Krause, LLP 1301 W 22nd St, Ste 40 0 Oak Brook, IL rel fax bakerrilly.com REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE Independent Auditors' Report To the Board of Education Lombard Elementary School District 44 Lombard, Illinois Report on Compliance for Each Major Federal Program We have audited Lombard Elementary School District 44's compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on Lombard Elementary School District 44's major federal program for the year ended June 30, Lombard Elementary School District 44's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditors' Responsibility Our responsibility is to express an opinion on compliance for Lombard Elementary School District 44's major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Lombard Elementary School District 44's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Lombard Elementary School District 44's compliance. ~ anindependentmemberof BAKER TILLY I NTERNAT IONAL

122 To the Board of Education Lombard Elementary School District 44 Opinion on Each Major Federal Program In our opinion, Lombard Elementary School District 44 complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, Report on Internal Control Over Compliance Management of Lombard Elementary School District 44 is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Lombard Elementary School District 44's internal control over compliance with the types of requirements that could have a direct and material effect on its major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Lombard Elementary School District 44's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance 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 compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

123 To the Board of Education Lombard Elementary School District 44 Purpose of this Report The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Lombard Elementary School District 44 as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise Lombard Elementary School District 44's basic financial statements. We issued our report thereon dated December 7, 2016, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the 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, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole. We also previously audited, in accordance with auditing standards generally accepted in the United States, the Lombard Elementary School District 44's basic financial statements as of and for the year ended June 30, 2015 (not presented herein), and have issued our report thereon dated November 17, 2015 which contained unmodified opinions on the respective financial statements of the governmental activities, each major fund, and the aggregate remaining fund information. The 2015 information included in the schedule of expenditures of federal awards is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the 2015 financial statements. The 2015 information has been subjected to the auditing procedures applied in the audit of the 2015 basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare those basic financial statements or to those basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the 2015 information included in the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements for the year ended June 30, 2015 as a whole. Oak Brook, Illinois December 7, 2016

124 Page 38 Page 38 Lombard Elementary School District SINGLE AUDIT INFORMATION CHECKLIST The following checklist is OPTIONAL; it is not a required form for completion of Single Audit information. The purpose of the checklist is to assist in determining if appropriate information has been correctly completed within the Annual Financial Report (AFR). This is not a complete listing of all Single Audit requirements, but highlights some of the more common errors found during IS BE reviews. GENERAL INFORMATION 1. Signed copies of audit opinion letters have been included with audit package submitted to IS BE. 2. All opinion letters use the most current audit language and formatting as mandated in SAS 115/SAS 117 and other pronouncements. 3. ALL Single Audit fonms within the AFR Excel workbook have been completed, where appropriate. - For those fonms that are not applicable, "N/A" or similar language has been indicated. 4. ALL Federal revenues reported in FRIS Report 0053 (Summary of Payments} are accounted for in the Schedule of Expenditures of Federal Awards (SEFA). Programs funded through ARRA are identified separately in SEFA 5. Federal revenues reported on the AFR reconcile to Federal revenues reported on the SEFA. -Verify or reconcile on reconciliation worksheet. 6. The total value of non-cash COMMODITIES has been included within the AFR on the INDIRECT COSTS page (ICR Computation 30) on Line 11. It should not be included in the Statement of Revenues Received (REVENUES 9-14) within the AFR Accounts Those accounts are specific cash programs, not non-cash assistance such as COMMODITIES. [!] 7. Complete audit package (Data Collection Form, audit reports, etc.) has been submitted electronically to the Federal Audit Clearinghouse in Jeffersonville, Indiana. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ~ 8. Programs funded through ARRA (Federal Stimulus funds) are identified separately from "regula~ Federal programs - Program name includes "ARRA- 11 prefix - Correct ARRA CFDA and IS BE program numbers are listed [!] 9. All prior yea~s projects are included and reconciled to final FRIS report amounts. - Including recieptlrevenue and expenditure/disbursement amounts. [!] 10. All current yea~s projects are included and reconciled to most recent FRIS report filed. - Including revenue and expenditure/disbursement amounts. l!illil11. Differences in reported spending amounts on the SEFA and the final FRIS reports should be detailed and/or documented in a finding, with discrepancies reported as Questioned Costs. [!] 12. Prior-year and Current-year Child Nutrition Programs (CNP) are included on the SEFA (with prior-year program showing total cash received): Project year runs from October 1 to September 30, so projects will cross fiscal year; This means that audited year revenues will include funds from both the prior year and current year projects. [KJ 13. Each CNP project should be reported on separate line (one line per project year per program). ~ 14. Total CNP Revenue amounts are consistent with grant amounts awarded by ISBE for each program by project year. 15. Total CNP Expenditure amounts are consistent with grant amounts awarded by ISBE for each program by project year. 16. Exceptions should result in a finding with Questioned Costs. 17. The total value of non-cash COMMODITIES has been reported on the SEFA (CFDA ). -The value is determined from the following, with each item on a separate line: [Kj Non-Cash Commodities: Monthly Commodities Bulletin for April (From the Illinois Commodities System accessed through ISBE web site) Total commodities= A PAL Allocated+ B PAL Allocated+ Processing Deductions+ Total Bonus Allocated Verify Non-Cash Commodities amount on ISBE web site: ~ Non-Cash Commodities: Commodities infonmation for non-cash items received through Other Food Services Districts should track separately through year; no specific report available from IS BE Verify Non-Cash Commodities amount through Other Food Services on IS BE web site: [Kj * Department of Defense Fresh Fruits and Vegetables (District should track through year) -The two commodity programs should be reported on separate lines on the SEFA. Verify Non-Cash Commodities amount through DoD Fresh Fruits and Vegetables on ISBE web site: ~ Amounts verified for Fresh Fruits and Vegetables cash grant program (ISBE code 4240) CFDA number: TOTALS have been calculated for Federal revenue and expenditure amounts (Column totals). 19. Obligations and Encumbrances are included where appropriate. 20. FINAL STATUS amounts are calculated, where appropriate. 21. Medicaid Fee-for-Service funds, E-Rate reimbursements and Build America Bond interest subsidies have not been included on the SEFA. 22. All programs tested (not just Type A programs) are indicated by either an or (M) on the SEFA. 23. NOTES TO THE SEFA within the AFR Excel workbook (SEFA NOTES) have been completed. Including, but not limited to: 24. Basis of Accounting 25. Name of Entity 26. Type of Financial Statements 27. Subrecipient information (Mark "N/A" if not applicable) N/A ARRA funds are listed separately from "regula~ Federal awards 128. Audit opinions expressed in opinion letters match opinions reported in Summary. 29. All Summary of Auditor Results questions have been answered. 30. All tested programs are listed. 31. Correct testing threshold has been entered. Title 2 CFR Findings have been filled out completely and correctly (if none, mark "N/A"l. 32. Financial Statement and/or Federal Awards Findings information has been completely filled out for each finding, with finding numbers in correct fonmat. ; 32. Finding completed for each Significant Deficiency and for each Material Weakness noted in opinion letters. 33. Separate finding for each Federal program (i.e., don't report same finding for multiple programs on one sheet). 34. Separate finding sheet for each finding on programs (e.g., excess interest earned and unallowable expenditures are two findings and should be reported separately, even if both are on same program). 35. Questioned Costs have been calculated where there are questioned costs. I 36. Questioned Costs are separated by project year and by program (and sub-project, if necessary). 37. Questioned Costs have been calculated for Interest Earned on Excess Cash on Hand. - Should be based on actual amount of interest earned - Questioned Cost amounts are broken out between programs if multiple programs are listed on the finding [RJ 38. A CORRECTIVE ACTION PLAN has been completed for each finding. - Including Finding number, action plan details, projected date of completion, name and title of contact person

125 Page 39 Page 39 Lombard Elementary School District RECONCILIATION OF FEDERAL REVENUES Annual Financial Report to Schedule of Expenditures of Federal Awards TOTAL FEDERAL REVENUE IN AFR Account Summary 7-8, Line 7 Account4000 $ Flow-through Federal Revenues Revenues 9-14, Line 112 Account2200 Value of Commodities Indirect Cost Info 30, Line 11 1,171,541 44,212 Less: Medicaid Fee-for-Service Revenues 9-14, Line 271 Account4992 AFR TOTAL FEDERAL REVENUES: $ 1,215,753 ADJUSTMENTS TO AFR FEDERAL REVENUE AMOUNTS: Reason for Adjustment: g ~!.1]9_~~~~_:;- ~1!5:~9Y.. J!:l_~l-~95:~ _ i_~ -~-~f-~ ~ {~~.-~ ~.~1. ADJUSTED AFR FEDERAL REVENUES $ 1,171,541 Total Current Year Federal Revenues Reported on SEFA: Federal Revenues Column D $ 1,171,541 Adjustments to SEFA Federal Revenues: Reason for Adjustment: ADJUSTED SEFA FEDERAL REVENUE: -~ ~!Z_1, 54 2_ DIFFERENCE: $ ~~-

126 Page 38 Page 38 Lombard Elementary School District SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6/30/2016 ' Federal Grantor/Pass-Through Grantor/Subrecipients 1... ~r~~~a~:o;r~~~;~i:~:ti~;d......! U.S. Department of Education Passed through Illinois State I Board of Education - ~."... ~ - ~ Receipts/Revenues ' Year I - Low Income- PY15!Food Commodity Program PY 15 (M) [F~~d c~~;;;~;;iiy P;~9~~~~;;;-1~i0C - - ~

127 Page 39 Page 39 Lombard Elementary School District SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6/30/2016 i NATIONAL SCHOOL LUNCH PROGRAM 1.,, i Grand Total I L,, (M) Program was audited as a major program as defined by *Also include the total amount provided to subrecipients from each Federal program (b)(4). The accompanying notes are an integral part of this schedule. To meet state or other requirements, auditees may decide to include certain nonfederal awards (for example, state awards) in this schedule. If such nonfederal data are presented, they should be segregated and clearly designated as nonfederal. The title of the schedule should also be modified to indicate that nonfederal awards are included. 2 When the CFDA number is not available, the auditee should indicate that the CFDA number is not available and include in the schedule the program's name and, if applicable, other identifying number. 3 When awards are received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included in the schedule (b)(2) The Uniform Guidance requires that the value of federal awards expended in the form of non-cash assistance, the amount of insurance in effect during the year, and loans or loan guarantees outstanding at year end be included in either the schedule or a note to the schedule. Although it is not required, the Uniform Guidance states that it is preferable to present this information in the schedule (versus the notes to the schedule). If the auditee presents non-cash assistance in the notes to the schedule, the auditor should be aware that such amounts must still be included in part Ill of the data collection form.

128 Page 41 Lombard Elementary School District NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (SEFA) Year Ending June 30, 2016 Page 41 Note 1: Basis of Presentation 5 The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of Lombard Elementary School District 44 and is presented on the Modified Accrual Basis of Accounting. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the Basic financial statements. Note 2: Indirect Facilities & Administration costs 6 Auditee elected to use 10% de minimis cost rate? Note 3: Subrecipients 7 Of the federal expenditures presented in the schedule,lombard Elementary School District 44 provided federal awards to subrecipients as follows: YES X ---- NO Program Title/Subrecipient Name None Federal CFDA Number Amount Provided to Subrecipients Note 4: Non-Cash Assistance The following amounts were expended in the form of non-cash assistance by Lombard School District 44 and are included in the Schedule of Expenditures of Federal Awards: NON-CASH COMMODITIES (CFDA )**: OTHER NON-CASH ASSISTANCE Note 5: Other Information Insurance coverage in effect paid with Federal funds during the fiscal year: Property Auto General Liability Workers Compensation Loans/Loan Guarantees Outstanding at June 30: District had Federal grants requiring matching expenditures $44,212 N/A N/A N/A N/A N/A N/A No (Yes/No) **The amount reported here should match the value reported for non-cash Commodities on the Indirect Cost Rate Computation page. 5 This note is included to meet the Uniform Guidance requirement that the schedule include notes that describe the significant accounting policies used in preparing the schedule. 6 The Uniform Guidance requires the Schedule of Expenditures of Federal Awards to note whether or not the auditee elected to use the 10% de minimis cost rate as covered in ndirect (F&A) costs (b)(6) 7 The Uniform Guidance requires the Schedule of Expenditures of Federal Awards to include, to the extent practical, an identification of the total amount provided to subrecipients, from each federal program. Although this example includes the required subrecipient information in the notes to the schedule, the information may be included on the face of the schedule as a separate column or section, if that is preferred by the auditee (b)(2)

129 Page 42 Page 42 Lombard Elementary School District SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2016 SECTION I -SUMMARY OF AUDITOR'S RESULTS FINANCIAL STATEMENTS Type of auditor's report issued: Unmodified (Unmodified, Qualified, Adverse, Disclaimer) INTERNAL CONTROL OVER FINANCIAL REPORTING: Material weakness(es) identified? X YES None Reported Significant Deficiency(s) identified that are not considered to X YES None Reported be material weakness(es)? Noncompliance material to financial statements noted? YES X NO FEDERAL AWARDS INTERNAL CONTROL OVER MAJOR PROGRAMS: Material weakness(es) identified? YES X None Reported Significant Deficiency(s) identified that are not considered to YES X None Reported be material weakness(es)? Type of auditor's report issued on compliance for major programs: Unmodified (Unmodified, Qualified, Adverse, Disclaimer 7 ) Any audit findings disclosed that are required to be reported in accordance with Title 2 CFR (a)? YES X NO IDENTIFICATION OF MAJOR PROGRAMS 8 CFDA NUMBER(S) 9 NAME OF FEDERAL PROGRAM or CLUSTER , Child Nutrition Cluster Dollar threshold used to distinguish between Type A and Type B programs: $750, Auditee qualified as low-risk auditee? YES X NO 7 10 If the audit report for one or more major programs is other than unmodified, indicate the type of report issued for each program. Example: "Unmodified for all major programs except for [name of program], which was modified and [name of program], which was a disclaimer." Major programs should generally be reported in the same order as they appear on the SEFA. When the CFDA number is not available, include other identifying number, if applicable. The name of the federal program or cluster should be the same as that listed in the SEFA. For clusters, auditors are only required to list the name of the cluster.

130 Page 43 Page43 Lombard Elementary School District SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2016 SECTION II- FINANCIAL STATEMENT FINDINGS 1. FINDING NUMBER: THIS FINDING IS: New 0 Repeat from Prior Year? Year originally reported? Criteria or specific requirement The District should have functioning controls over external financial reporting. 4. Condition The District does not have functioning internal controls or processes over external financial reporting, but instead relies upon the auditor for this expertise. This includes preparation of the Schedule of Expenditures of Federal Awards and material journal entries required to properly state the financial statements in accordance with US GAAP. Multiple material cash basis adjusting journal entries were identified during the course of the audit to ensure that the financial statements were free of material errors. 5. Context12 The District auditors prepare the financial statements, the Schedule of Expenditures of Federal Awards, and any related disclosures with information provided by the District. The District also relies upon the audit firm to prepare all adjustments to restate internal cash basis financials to the proper accrual based external financial statements. 6. Effect Management may not be able to detect material cash basis errors and omissions to its financial statements and financial statements would not be presented in accordance with GAAP. 7.Cause Finding was caused due to the inability of the District to maintain its own external financial reporting function due to its size and cost constraints. 8. Recommendation The District should continue to analyze the cost/benefit relationship of having its external auditors prepare external financial reports. Like many in the State, it will likely choose to continue to rely on the auditors for this function. 9. Management's response 13 It is not cost beneficial at this time for the District to maintain its own external financial reporting function. The District will continue to rely upon our auditors for this function for the foreseeable future. However, in relation to the material cash basis adjustmets, the District will review the cause of the cash basis error to avoid potential errors in the future. 11 A suggested format for assigning reference numbers is to use the digits of the fiscal year being audit~d followed by a numeric sequence of findings. For example, findings identified and reported in the audit of fiscal year 2016 would be assigned a reference number of , , etc. The sheet is formatted so that only the number need be entered (1, 2, etc.). 12 Provide sufficient information for judging the prevalence and consequences of the finding, such as relation to universe of costs and/or number of items examined and quantification of audit findings in dollars. 13 See Title 2 CFR Management decision for additional guidance on reporting management's response.