Greenwood County School District Number 52 Report on Financial Statements For the year ended June 30, 2017
Board of Trustees Term of office Name From To Paul Cobb, Chairman July 1, 2016 June 30, 2019 Dayne Pruitt, Vice Chairman July 1, 2014 June 30, 2017 Deborah Bolton, Secretary July 1, 2015 June 30, 2018 Ronnie Peeler July 1, 2014 June 30, 2017 Ricky Werts July 1, 2016 June 30, 2019
Table of Contents Independent Auditor s Report... 1-3 Management s Discussion and Analysis... 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... 13-14 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds... 15 Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities... 16 Statement of Net Position - Proprietary Fund... 17 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Fund... 18 Statement of Cash Flows - Proprietary Fund... 19 Statement of Fiduciary Assets and Liabilities - Agency Fund... 20 Notes to Financial Statements... 21-45 Page Required Supplementary Information Schedule Budgetary Comparison Schedule General Fund... 1... 46-51 Schedule of the District s Proportionate Share of the Net Pension Liability... 2... 52 Schedule of the District s Contributions... 3... 53
Table of Contents, Continued Other Supplementary Information Schedule Page Governmental Funds Special Revenue - Other Combining Schedule of Revenues, Expenditures and Changes in Fund Balance... A-1... 54-58 Summary Schedule for Designated Restricted State Grants... A-2... 59 Special Revenue - EIA Combined Schedule of Revenues, Expenditures and Changes in Fund Balance... A-3... 60-63 Summary Schedule by Program... A-4... 64 Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balance... B... 65 Debt Retirement Fund Schedule of Revenues, Expenditures and Changes in Fund Balance... C... 66 Proprietary Fund Food Service Fund Schedule of Revenues, Expenses and Changes in Net Position... D... 67 Agency Fund - Student Activities Schedule of Receipts, Disbursements and Changes in Due to Student Organizations... E... 68 Detailed Schedule of Due to State Department of Education/Federal Government... F... 69 Location Reconciliation Schedule... G... 70 Independent Auditor s Report on Internal Control Over Financial Reporting and On Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards... 71-72 Independent Auditor s Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance; Required by the Uniform Guidance... 73-74 Schedule of Expenditures of Federal Awards... 75 Schedule of Findings... 76 Summary Schedule of Prior Audit Findings... 77
Independent Auditor s Report Board of Trustees Greenwood County School District Number 52 Ninety Six, South Carolina Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Greenwood County School District Number 52 (the District) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the District 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. Auditor's 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 auditor's 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 relevant to the entity'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 the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. www.manleygarvin.com
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the District as of June 30, 2017, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Restatement As discussed in Note IV. G. to the financial statements, the District changed its accounting policy with respect to compensated absences. As a result, the June 30, 2016 ending total net position was restated. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, Budgetary Comparison Schedule General fund, Schedule of the District s Proportionate Share of the Net Pension Liability, and the Schedule of the District s Contributions, as presented 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The combining and individual fund financial schedules and other supplementary information, including the Schedule of Expenditures of Federal Awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), are presented for purposes of additional analysis and are 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. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial schedules and other supplementary information, including the Schedule of Expenditures of Federal Awards, are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 2
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 28, 2017 on our consideration of the District 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District s internal control over financial reporting and compliance. Greenwood, South Carolina November 28, 2017 3
Management s Discussion and Analysis For the fiscal year ended June 30, 2017 This section of Greenwood County School District Number 52 s annual financial report presents our discussion and analysis of the District s financial performance during the fiscal year that ended on June 30, 2017. Please read it in conjunction with the District s financial statements, which follow this section. FINANCIAL HIGHLIGHTS The District s net position at the close of the most recent fiscal year was $245,085. As of the close of the current fiscal year, the District s governmental funds reported combined ending fund balances of $7,941,787. Approximately 63.7% of the total amount is available for spending at the government s discretion. At the end of the current fiscal year, unassigned fund balance for the general fund was $5,062,393, which is 41.4% of the total general fund expenditures. During the current fiscal year, the District s governmental funds expenditures were $697,884 less than the revenues generated in taxes and other revenues for governmental programs. Total expenditures were $16,776,653. Total revenues from property taxes, state aid, investment income and miscellaneous revenues were $17,474,537. OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of five parts - Management s Discussion and Analysis, Basic Financial Statements, Required Supplementary Information, a Supplementary Information section and the Compliance section. The first two statements are government-wide financial statements that provide both long-term and shortterm information about the District s overall financial status. The remaining statements are fund financial statements that focus on individual parts of the District, reporting the District s operations in more detail than the government-wide statements. The governmental funds statements tell how general government services were financed in the short term as well as what remains for future spending. Proprietary fund statements offer short-term and long-term financial information about the activities the government operates like businesses, such as the food service operation. Fiduciary fund statements provide information about resources held for the benefit of parties outside the District. Fiduciary funds are not reflected in the government-wide financial statements 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 of the proprietary funds. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the information in the financial statements. In addition to these required elements, we have included a section with combining statements that provide details about our non-major governmental funds, each of which are added together and presented in single columns in the basic financial statements. 4
Management s Discussion and Analysis For the fiscal year ended June 30, 2017 Figure A-1 summarizes the major features of the District s financial statements, including the portion of the District government they cover and the types of information they contain. The remainder of this overview section of management s discussion and analysis explains the structure and contents of each of the statements. Figure A-1 Major Features of Greenwood County School District Number 52 Government-Wide and Fund Financial Statements Fund Statements Government-Wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Scope Entire District The activities of the Activities the District operates Instances in which government (except District that are not similar to private businesses: the District is the fiduciary funds) and the proprietary or fiduciary the food service fund agent for someone District s else s resources, component units such as the Pupil Activity Fund Required financial Statement of net position Balance sheet Statement of net position Statement of statements Statement of activities Statement of revenues, Statement of revenues, fiduciary expenditures, and changes expenses, and changes in assets and in fund balances net position liabilities Statement of cash flows Accounting basis and Accrual accounting and Modified accrual accounting Accrual accounting and Accrual accounting measurement focus economic resources focus and current financial resources economic resources focus and economic focus resources focus Type of asset/liability All assets and liabilities, Only assets expected to be All assets and liabilities, both All agency assets information both financial and capital, used up and liabilities that financial and capital, and and liabilities, short-term and long-term come due during the year or short-term and long-term both short-term and soon thereafter; no capital long-term assets included Type of inflow/outflow All revenues and expenses Revenues for which cash is All revenues and expenses All revenues and Information during year, regardless of received during or soon after during year, regardless of expenses during when cash is received or the end of the year; when cash is received or year, regardless of paid expenditures when goods or paid when cash is services have been received received or paid and payment is due during the year or soon thereafter Government-Wide Statements The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the government s assets and liabilities. All of the current year s revenues and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two government-wide statements report the District s net position and how it has changed. Net position - the difference between the District s assets and liabilities - is one way to measure the District s financial health, or position. Over time, increases or decreases in the District s net position are an indicator of whether its financial health is improving or deteriorating, respectively. To assess the overall health of the District you need to consider additional nonfinancial factors such as changes in the District s property tax base. 5
Management s Discussion and Analysis For the fiscal year ended June 30, 2017 The government-wide financial statements of the District are divided into two categories: Governmental activities - Most of the District s basic services are included here, such as the instructional program, special educational programs, operational requirements and general administration. Property taxes and state and federal grants finance most of these activities. Business-type activities - The District charges fees to customers to help it cover the costs of certain services it provides. The District's food service program is included here. Fund Financial Statements The fund financial statements provide more detailed information about the District s most significant funds - not the District as a whole. Funds are a governmental accounting tool that the District uses to keep track of specific sources of funding and spending for particular purposes. Some funds are required by State law and by bond covenants. The Board of Trustees establishes other funds to control and manage resources for particular purposes or to show that it is properly using certain taxes and grants. The District has three kinds of funds: Governmental funds - Most of the District s basic services are included in governmental funds, which focus on (1) how cash and other financial assets can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the District s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information at the bottom of the governmental funds statement, or on the subsequent page, that explains the relationship (or differences) between them. Proprietary funds - Services for which the District charges customers a fee are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long and shortterm financial information. In fact, the District s enterprise funds (one type of proprietary fund) are the same as its business-type activities, but provide more detail and additional information, such as cash flows. Fiduciary funds - The District acts as agent, or fiduciary, for other entities resources. The District is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the District s fiduciary activities are reported in a separate statement of fiduciary assets and liabilities. We exclude these activities from the District s government-wide financial statements because the District cannot use these assets to finance its operations. 6
Management s Discussion and Analysis For the fiscal year ended June 30, 2017 FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE Net Position. The District s combined net position as of June 30, 2017 compared to 2016: Table A-1 Greenwood County School District Number 52 s Net Position Governmental Business-Type Activities Activities Total 2017 2016 2017 2016 2017 2016 Assets and deferred outflows Current and other assets $ 8,153,949 $ 7,735,681 $ 858,574 $ 102,858 $ 9,012,523 $ 7,838,539 Capital assets 33,609,126 34,808,153 7,899 10,810 33,617,025 34,818,963 Deferred outflows 2,768,233 1,407,673 70,297 44,448 2,838,530 1,452,121 Total assets and deferred outflows $ 44,531,308 $ 43,951,507 $ 936,770 $ 158,116 $ 45,468,078 $ 44,109,623 Liabilities and deferred inflows Long-term liabilities $ 41,652,058 $ 41,643,436 $ 489,222 $ 374,693 $ 42,141,280 $ 42,018,129 Other liabilities 1,630,976 2,346,605 834,544 127,220 2,465,520 2,473,825 Deferred inflows 600,921 355,997 15,272 7,566 616,193 363,563 Total liabilities and deferred inflows 43,883,955 44,346,038 1,339,038 509,479 45,222,993 44,855,517 Net position Net investment in Capital assets 9,899,360 9,456,028 7,899 10,810 9,907,259 9,466,838 Restricted 2,885,160 3,103,549 - - 2,885,160 3,103,549 Unrestricted (deficit) (12,137,167) (12,954,108) (410,167) (362,173) (12,547,334) (13,316,281) Total net position $ 647,353 $ (394,531) $ (402,268) $ (351,363) $ 245,085 $ (745,894) Total net position of the District was $245,085. Unrestricted net position amounted to a deficit balance of $12,547,334. The net position of our business-type activities is a deficit balance of $402,268. Changes in net position. The District s total revenues (excluding special items) were $18,265,588 (See Table A- 2.) A significant portion of the District s revenue comes from property taxes, operating grants, fee-in-lieu, and county allocation. The total cost of all programs and services was $17,565,378. Of these cost, the largest portion of expenses are for instructional and student services. Governmental Activities Revenues for the District s governmental activities were $17,527,121, while total expenses were $16,731,683. The District s management continued to take actions this year to absorb state funding cuts and at the same time to increase the general fund ending balance, including monitoring costs closely, utilizing special revenue funds to the fullest extent and cutting costs determined to be unnecessary. 7
Management s Discussion and Analysis For the fiscal year ended June 30, 2017 Table A-2 Changes in Greenwood County School District Number 52 s Net Position Governmental Business-Type Activities Activities Total 2017 2016 2017 2016 2017 2016 Revenues Program revenues: Charges for services $ 26,044 $ 28,524 $ 213,051 $ 213,421 $ 239,095 $ 241,945 Operating grants and contributions 7,133,530 6,969,851 525,128 533,844 7,658,658 7,503,695 General revenues: Property taxes 4,980,537 4,704,196 - - 4,980,537 4,704,196 Other taxes 2,666,266 2,652,832 - - 2,666,266 2,652,832 Federal and state aid 2,664,912 2,634,816 - - 2,664,912 2,634,816 Other 55,832 249,158 288 5,725 56,120 254,883 Total revenues 17,527,121 17,239,377 738,467 752,990 18,265,588 17,992,367 Expenses Instruction 9,304,442 9,926,420 - - 9,304,442 9,926,420 Support services 6,491,352 6,722,983 - - 6,491,352 6,722,983 Intergovernmental and other 55,825 54,660 - - 55,825 54,660 Interest and other charges 880,064 887,768 - - 880,064 887,768 Food service - - 833,695 815,185 833,695 815,185 Total expenses 16,731,683 17,591,831 833,695 815,185 17,565,378 18,407,016 Excess (deficiency) before transfers 795,438 (352,454) (95,228) (62,195) 700,210 (414,649) Transfers - - - - - - Increase (decrease) in net position $ 795,438 $ (352,454) $ (95,228) $ (62,195) $ 700,210 $ (414,649) FINANCIAL ANALYSIS OF THE DISTRICT S FUNDS As the District completed the year, its governmental funds reported a combined fund balance of $7,941,787. Reflected in this year s total change in fund balance is an increase of $933,914 in the District s general fund and a decrease of $241,194 in the District s debt service fund. General Fund Budgetary Highlights Over the course of the year, the Board of Trustees reviewed the District s general fund budget on a monthly basis. 42% of the District s general fund revenues are made up of local funding. The District saw an increase of $56,506 in local funding for FY 2016-2017 compared to prior year. Greenwood County and the District are also projecting local funding for FY 2017-2018 to be comparable to prior year funding. General fund actual expenditures were $1,037,874 below the final budget amounts. Expenditures were closely monitored during the course of the year. 8
Management s Discussion and Analysis For the fiscal year ended June 30, 2017 Capital Assets CAPITAL ASSET AND DEBT ADMINISTRATION As of the end of 2017, the District had invested $46,463,758 in capital assets and land. Total depreciation expense for the year was $1,201,938. Accumulated depreciation is $12,846,733. (See Table A-3.) Table A-3 Greenwood County School District Number 52 s Capital Assets Governmental Business-Type Activities Activities 2017 2016 2017 2016 Land $ 1,425,078 $ 1,425,078 $ - $ - Buildings and improvements 42,502,609 42,502,609 - - Equipment 2,328,833 2,328,833 207,238 207,238 Construction in progress - - - - Total $ 46,256,520 $ 46,256,520 $ 207,238 $ 207,238 Long-term Debt The state limits the amount of general obligation debt the District can issue without a public referendum to 8% percent of the assessed value of all taxable property within the District s limits. At June 30, 2017, our outstanding debt under this provision is approximately $2,999,000 below this limit. At year end the District had $23,704,000 in bonds outstanding, as shown in Table A-4. More detailed information about the District s long-term liabilities is presented in Note III.D to the financial statements. Table A-4 Greenwood County School District Number 52 s Outstanding Debt Governmental Activities 2017 2016 General obligation bonds $ 23,704,000 $ 25,364,000 Total $ 23,704,000 $ 25,364,000 ECONOMIC FACTORS AND NEXT YEAR S BUDGETS AND RATES The 2017-2018 budget represents an effort to maintain our existing program of providing a high quality education for the students of Greenwood County School District Number 52. For fiscal year 2017-2018, the District should see a slight increase in state revenue over fiscal year 2016-2017 primarily because of an increase in the base student cost to $2,425 for the Education Finance Act of 1977 (EFA). Local revenues for FY 2017-2018 are projected by the county and administration to be equal to or slightly more than budgeted for and requested in FY 2016-2017. 9
Management s Discussion and Analysis For the fiscal year ended June 30, 2017 Although the state and national economy is showing signs of some recovery, it is the opinion of administration that this turn around will take several years. In the meantime, management will continue to strive to be fiscally conservative and maintain a sufficient fund balance. CONTACTING THE DISTRICT S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, 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 Greenwood County School District Number 52, 605 Johnston Road, Ninety Six, South Carolina 29666, or visit the District s website at www.greenwood52.org. 10
Statement of Net Position As of June 30, 2017 Assets Governmental Business-Type Activities Activities Total Current assets Cash and investments $ 742,208 $ 302,144 $ 1,044,352 Due from county treasurer 6,492,127 525,615 7,017,742 Taxes receivable, net 170,082-170,082 Accounts receivable 9,215 259 9,474 Due from State Department of Education 740,317-740,317 Inventories - 30,556 30,556 Total current assets 8,153,949 858,574 9,012,523 Non-current assets Capital assets not being depreciated 1,425,078-1,425,078 Capital assets - net 32,184,048 7,899 32,191,947 Total noncurrent assets 33,609,126 7,899 33,617,025 Total assets 41,763,075 866,473 42,629,548 Deferred Outflows of Resources Deferred outflows - pension 2,768,233 70,297 2,838,530 Total Assets and Deferred Outflows of Resources $ 44,531,308 $ 936,770 $ 45,468,078 Liabilities Current liabilities Accounts payable $ 85,620 $ - $ 85,620 Accrued salaries and benefits 187,613-187,613 Accrued interest 272,943-272,943 Unearned revenue 576,248 7,486 583,734 Due to State Department of Education 33,610-33,610 Internal balances (827,058) 827,058 - Current portion of noncurrent liabilities Bonds payable 1,302,000-1,302,000 Total current liabilities 1,630,976 834,544 2,465,520 Non-current liabilities Bonds payable 22,402,000-22,402,000 Net pension liability 19,250,058 489,222 19,739,280 Total non-current liabilities 41,652,058 489,222 42,141,280 Total liabilities 43,283,034 1,323,766 44,606,800 Deferred Inflows of Resources Deferred inflows - pension 600,921 15,272 616,193 Net position Net investment in capital assets 9,899,360 7,899 9,907,259 Restricted for: Debt service 2,792,010-2,792,010 Special revenue 93,150-93,150 Unrestricted (deficit) (12,137,167) (410,167) (12,547,334) Total net position 647,353 (402,268) 245,085 Total Liabilities, Deferred Inflows of Resources, and Net Position $ 44,531,308 $ 936,770 $ 45,468,078 See Notes to Financial Statements 11
Statement of Activities For the year ended June 30, 2017 Program revenues Net revenue (expense) and changes in net position Charges for Operating Sales and Grants and Governmental Business-Type Expenses Service Contributions Activities Activities Total Functions/programs Governmental activities Instruction $ 9,304,442 $ - $ 4,293,730 $ (5,010,712) $ (5,010,712) Support services 6,491,352-2,839,800 (3,651,552) (3,651,552) Intergovernmental and other 55,825 26,044 - (29,781) (29,781) Interest and other charges 880,064 - - (880,064) (880,064) Total governmental activities 16,731,683 26,044 7,133,530 (9,572,109) (9,572,109) Business-type activities Food service 833,695 213,051 525,128 $ (95,516) (95,516) Total business-type activities 833,695 213,051 525,128 (95,516) (95,516) Total $ 17,565,378 $ 239,095 $ 7,658,658 (95,516) (9,667,625) General revenues: Property taxes levied for: General purposes 3,367,142-3,367,142 Debt service 1,613,395-1,613,395 Payments in lieu of taxes 2,666,266-2,666,266 State aid/grants (unrestricted) 2,664,912-2,664,912 Unrestricted investment earnings 14,137-14,137 Miscellaneous 41,695 288 41,983 Total general revenues and transfers 10,367,547 288 10,367,835 Change in net position 795,438 (95,228) 700,210 Net position (deficit), beginning of year as previously reported (394,531) (351,363) (745,894) Restatement, see note IV. G. 246,446 44,323 290,769 Net position (deficit), beginning of year as restated (148,085) (307,040) (455,125) Net position (deficit), end of year $ 647,353 $ (402,268) $ 245,085 See Notes to Financial Statements 12
Balance Sheet - Governmental Funds As of June 30, 2017 Special Revenue Funds Special Education Total Revenue - Improvement Capital Debt Governmental General Other Act Projects Retirement Funds Assets Cash and investments $ 742,208 $ - $ - $ - $ - $ 742,208 Due from county treasurer 3,570,925 - - 25,659 2,895,543 6,492,127 Accounts receivable 9,215 - - - - 9,215 Due from other governmental units - 531,693 - - 208,624 740,317 Taxes receivable - net 132,561 - - - 37,521 170,082 Due from other funds 977,088-257,470 - - 1,234,558 Total assets $ 5,431,997 $ 531,693 $ 257,470 $ 25,659 $ 3,141,688 $ 9,388,507 Liabilities Accounts payable $ 60,884 $ 17,842 $ 6,894 $ - $ - $ 85,620 Accrued salaries and benefits 187,613 - - - - 187,613 Unearned revenues - 155,781 216,966-203,501 576,248 Due to State Department of Education - - 33,610 - - 33,610 Due to other funds - 264,920-31,425 111,155 407,500 Total liabilities 248,497 438,543 257,470 31,425 314,656 1,290,591 Deferred inflows of resources Unavailable revenues - property taxes 121,107 - - - 35,022 156,129 Total deferred inflows of resources 121,107 - - - 35,022 156,129 See Notes to Financial Statements 13
Balance Sheet - Governmental Funds, Continued As of June 30, 2017 Special Revenue Funds Special Education Total Revenue - Improvement Capital Debt Governmental General Other Act Projects Retirement Funds Fund balances (deficit) Restricted for debt service - - - - 2,792,010 2,792,010 Restricted for special revenue purposes - 93,150 - - - 93,150 Unassigned (deficit) 5,062,393 - - (5,766) - 5,056,627 Total fund balance 5,062,393 93,150 - (5,766) 2,792,010 7,941,787 Total liabilities, deferred inflows of resources, and fund balances $ 5,431,997 $ 531,693 $ 257,470 $ 25,659 $ 3,141,688 $ 9,388,507 Total governmental fund balances $ 7,941,787 Amounts reported for governmental activities in the Statement of Net Position are different because of the following: Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds. 33,609,126 Other long-term assets are not available to pay for current period expenditures and, therefore, are unavailable in the funds: Property taxes receivable 156,129 Deferred inflows and outflows of resources are not reported in the funds: Deferred outflows related to pension 2,768,233 Deferred inflows related to pension (600,921) Some liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Bonds $ (23,704,000) Net pension liability (19,250,058) Accrued interest (272,943) (43,227,001) Net position of governmental activities $ 647,353 See Notes to Financial Statements 14
Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds For the year ended June 30, 2017 Special Revenue Funds Special Education Total Revenue - Improvement Capital Debt Governmental General Other Act Projects Retirement Funds Revenues Local $ 5,324,175 $ 103,520 $ - $ 5 $ 2,059,990 $ 7,487,690 State 7,559,135 245,947 956,350-249,268 9,010,700 Federal - 976,147 - - - 976,147 Total revenues 12,883,310 1,325,614 956,350 5 2,309,258 17,474,537 Expenditures Current: Instruction 7,081,887 817,181 446,377 - - 8,345,445 Support services 5,081,890 564,334 161,061 17,646-5,824,931 Intergovernmental 54,660-1,165 - - 55,825 Debt service: Principal - - - - 1,660,000 1,660,000 Interest - - - - 890,452 890,452 Total expenditures 12,218,437 1,381,515 608,603 17,646 2,550,452 16,776,653 Excess (deficiency) of revenues over (under) expenditures 664,873 (55,901) 347,747 (17,641) (241,194) 697,884 Other financing sources (uses) Operating transfers in 395,962 114,313 10,435 - - 520,710 Operating transfers out (126,921) (35,607) (358,182) - - (520,710) Total other financing sources (uses) 269,041 78,706 (347,747) - - - Net change in fund balances 933,914 22,805 - (17,641) (241,194) 697,884 Fund balances, beginning of year 4,128,479 70,345-11,875 3,033,204 7,243,903 Fund balances (deficit), end of year $ 5,062,393 $ 93,150 $ - $ (5,766) $ 2,792,010 $ 7,941,787 See Notes to Financial Statements 15
Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities For the year ended June 30, 2017 Total net change in fund balance - Governmental funds $ 697,884 Amounts reported for governmental activities in the Statement of Activities are different because of the following: Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. Depreciation expense (1,199,027) Because some property taxes will not be collected for several months after fiscal year ends, they are not considered available revenues and are deferred in the governmental funds. Unavailable tax revenues decreased by this amount over the prior year. 52,584 Activity related to deferred inflows and outflows of the pension plan in the current fiscal year are not included on the Statement of Activities: Deferred inflows of resources (244,924) Deferred outflows of resources 1,360,560 Repayment of long-term debt is reported as an expenditure in governmental funds. But the repayment reduces long-term liabilities in the Statement of Net Position. In the current year, these amounts consisted of: Bond principal retirement 1,660,000 Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures In the governmental funds. The net changes are as follows: Net pension liability (1,542,027) Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. 10,388 Change in net position of governmental activities $ 795,438 See Notes to Financial Statements 16
Statement of Net Position - Proprietary Fund As of June 30, 2017 Assets Current assets Cash $ 302,144 Due from other governmental units 259 Due from county treasurer 525,615 Supplies, purchased food, and USDA commodities 30,556 Total current assets 858,574 Noncurrent assets Equipment 207,238 Less: Accumulated depreciation 199,339 Total noncurrent assets 7,899 Deferred Outflows of Resources Deferred outflows - pension 70,297 Total assets and deferred outflows of resources $ 936,770 Liabilities and Net Position Current liabilities Accounts payable $ - Due to general fund 827,058 Unearned revenue 7,486 Total current liabilities 834,544 Non-current liabilities Net pension liability 489,222 Total non-current liabilities 489,222 Total liabilities 1,323,766 Deferred Inflows of Resources Deferred inflows - pension 15,272 Net position (deficit) Net investment in capital assets 7,899 Unrestricted (deficit) (410,167) Total net position (deficit) (402,268) Total liabilities, deferred inflows of resources and net position $ 936,770 See Notes to Financial Statements 17
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Fund For the year ended June 30, 2017 Operating revenues Meal sales $ 213,051 Other operating revenues 288 Total operating revenues 213,339 Operating expenses Food costs 300,835 Salaries 301,751 Employee benefits 202,157 Depreciation 2,911 Purchased services 24,010 Supplies 134 Other 1,897 Total operating expenses 833,695 Operating loss (620,356) Nonoperating revenues Commodities received from USDA 3,444 USDA reimbursements 521,594 Other state aid 90 Total nonoperating revenues 525,128 Loss before operating transfers (95,228) Operating transfers in - Change in net position (95,228) Net position, beginning of year, as previously reported (351,363) Restatement, see note IV. G. 44,323 Net position, beginning of year, as restated (307,040) Net position, end of year $ (402,268) See Notes to Financial Statements 18
Statement of Cash Flows - Proprietary Fund For the year ended June 30, 2017 Cash flows from operating activities Cash received from patrons $ 212,792 Cash received from local sources 288 Cash payments to suppliers for goods and services (161,338) Cash payments for employee benefits (64,153) Cash payments to employees for services (294,265) Other payments (1,897) Net cash used for operating activities (308,573) Cash flows from noncapital financing activities Operating grants received 90 Federal grants received 525,038 Net cash provided by noncapital financing activities 525,128 Net increase in cash and cash equivalents 216,555 Cash and cash equivalents, beginning of year 85,589 Cash and cash equivalents, end of year $ 302,144 Reconciliation of operating loss to net cash used for operating activities Operating loss $ (620,356) Adjustments to reconcile operating loss to net cash used for operating activities Depreciation 2,911 Change in deferred and accrued amounts Accounts receivable (259) Inventories (13,287) Accounts payable - Deferred outflows of resources (25,849) Deferred inflows or resources 7,706 Net pension liability 156,147 Unearned revenue 7,486 Due from county treasurer (525,615) Due to general fund 702,543 Net cash used for operating activities $ (308,573) See Notes to Financial Statements 19
Statement of Fiduciary Assets and Liabilities - Agency Fund As of June 30, 2017 Assets Cash $ 293,476 Accounts receivable $ 15,374 308,850 Liabilities Accounts payable $ 10,092 Due to student organizations and scholarships $ 298,758 308,850 See Notes to Financial Statements 20
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Greenwood County School District Number 52 (the District) is governed by a five member board of trustees. The District provides regular and exceptional education for students in kindergarten through grade twelve. The financial statements of the District have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. A. Reporting Entity The District s financial statements include all funds over which the Board is considered to be financially accountable. The District receives funding from local, state and federal government sources and must comply with the requirements of these funding source entities. Board members have decision-making authority, the power to designate management, the ability to significantly influence operations and the primary accountability for fiscal matters. The District invests funds and receives property tax revenues through its relationship with Greenwood County. The District has determined that there are no support entities that meet the requirements for inclusion as a discretely presented component unit. B. Basis of Presentation The statements of the District are presented as follows: Government-wide financial statements - The Statement of Net Position and the Statement of Activities display information about the financial activities of the District as a whole, except for fiduciary funds. For the most part, the effect of interfund activity has been removed from these statements. The statements distinguish between those activities of the District that are governmental and those that are considered business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in part by fees charged to external parties. The government-wide statements are prepared using the economic resources measurement focus. This is the same approach used in the preparation of the proprietary fund financial statements but differs from the manner in which governmental fund financial statements are prepared. Governmental fund financial statements therefore include a reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds. The government-wide Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the District and for each function or program of the District s governmental activities. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues, including taxes, which are not classified as program revenues are presented as general revenues of the District, with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self-financing or draws from the general revenues of the District. 21
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Presentation, Continued Fund financial statements - Fund financial statements report detailed information about the District. The focus of governmental and enterprise fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. The District has no nonmajor funds. Fiduciary funds are reported by fund type. The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental fund types are accounted for using a flow of current financial resources measurement focus. The financial statements for governmental funds are a Balance Sheet, which generally includes only current assets, current liabilities, and deferred inflows of resources; and a Statement of Revenues, Expenditures and Changes in Fund Balances, which reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. All proprietary fund types are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Net Position presents increases (i.e., revenues) and decreases (i.e., expenses) in total net position. The Statement of Cash Flows provides information about how the District s finances meet cash flow needs of its proprietary activities. Fiduciary funds are reported using the economic resources measurement focus. Cash flow statement - For purposes of the Statement of Cash Flows, the proprietary fund considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. C. Measurement Focus and Basis of Accounting Fund accounting The accounts of the District are organized and operated on the basis of funds during the fiscal year, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a self-balancing set of accounts. The various funds are grouped into the categories governmental, proprietary and fiduciary. Governmental Funds Governmental funds focus on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets and liabilities is separated as fund balance. The following are the District s major governmental funds: General Fund - to account for all financial transactions not properly accounted for in another fund. The District uses this fund to account for expenditures principally for administration, instruction, pupil services, operation and maintenance of plant and related fixed charges. 22
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting, Continued Governmental Funds, continued Special Revenue Funds - to account for the proceeds of specific revenue sources (other than debt service or major capital projects) requiring separate accounting because of legal or regulatory provisions or administrative action. The District has two special revenue funds: 1. The Education Improvement Act (EIA) Fund, used to account for the revenue from the Education Improvement Act of 1984 and legally required to be accounted for as a specific revenue source. 2. Special Revenue Fund Other, used to account for financial resources provided by federal, state, and local projects and grants. Capital Projects Fund - to account for the revenues and expenditures associated with capital building and site improvements. Debt Retirement Fund - to account for annual payments of principal and interest on long-term general obligation debt and related costs. Proprietary Funds Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to provide sound financial administration. Goods or services from such activities can be provided either to outside parties (enterprise funds) or to other departments or agencies primarily within the government (internal service funds). The District has no internal service funds. Within proprietary funds, operating revenues and expense are presented in the Statement of Revenue, Expenses and Changes in Net Position. Operating revenues are those revenues that are generated directly from the primary activity of the proprietary funds. Sales for food service represent the operating revenues of the District s proprietary fund. Operating expenses are necessary cost incurred to provide the goods or services that are the primary activity of the fund. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Enterprise Funds - to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or covered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenue earned, expenses incurred and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The Food Service Fund is the District s only enterprise fund and is used to account for the United States Department of Agriculture (USDA) approved school breakfast and lunch programs. 23
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting, Continued Fiduciary Funds Fiduciary funds are used to account for assets held on behalf of outside parties, including other governments, or on behalf of other funds within the government. The District s fiduciary funds consist of agency funds which are custodial in nature and do not involve measurement of results of operation. The agency funds are used to account for amounts held for student activity organizations, and scholarships. Basis of Accounting Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds also use the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recognized when incurred. Under the modified accrual basis of accounting, revenues and expenditures are recognized when they become both measurable and available/due. Revenues resulting from exchange transactions, in which each party gives and receives essentially equal value, are recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. Available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District, available means expected to be received within sixty days of fiscal year-end. Nonexchange transactions, in which the District receives value without directly giving equal value in return, include property taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted; matching requirements, in which the District must provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the District on a reimbursement basis. On a modified accrual basis, revenue from nonexchange transactions must also be available before it can be recognized. Under the modified accrual basis, the following revenue sources are considered to be both measurable and available at fiscal yearend: property taxes, interest, tuition, grants, student fees and rentals. 24
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting, Continued Basis of Accounting, Continued Unavailable or unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Delinquent property taxes and property taxes for which there is an enforceable legal claim as of June 30, but which have not met the revenue recognition criteria, have been recorded as unavailable revenue. Grants and entitlements received before the eligibility requirements are met are also recorded as unearned revenue. On governmental fund financial statements, receivables that will not be collected within the available period have also been reported as unavailable revenue. On the accrual basis of accounting, expenses are recognized at the time they are incurred. The fair value of donated commodities used during the year is reported in the operating statement as an expense with a like amount reported as donated commodities revenue. Under the modified accrual basis of accounting, revenues and expenditures are recognized when they become both measurable and available. The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation, are not recognized in governmental funds. D. Assets, Liabilities, and Equity or Net Position 1. Cash and Cash Equivalents and Investments The District s investments are carried at fair value, except that repurchase agreements and U.S. Government Agencies that have a maturity at the time of purchase of one year or less are shown at amortized cost. The District s cash consists of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. 2. Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. On fund financial statements, these receivables and payables are classified as due from other funds or due to other funds on the balance sheet. These amounts are eliminated in the governmental and business-type activities columns of the statement of net assets, except for net residual amounts due between governmental and business-type activities, which are presented as internal balances. 25
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, and Equity or Net Position, Continued 3. Inventories and Prepaid Items Inventories School Food Service inventory, other than USDA commodities, is valued at the lower of cost or market on a first-in, first-out basis. USDA commodities are valued using cost data supplied by the South Carolina Department of Education. School Food Service inventory consists of supplies and purchased food and USDA commodities. Prepaid Items Payments made to vendors for services benefiting future periods are recorded as prepaid items in both government-wide and fund financial statements using the consumption method. A current asset for the prepaid amount is recorded at the time of the purchase and an expenditure/expense is reported in the year in which services are consumed. 4. Capital Assets General capital assets are those assets not specifically related to activities reported in the enterprise fund. These assets generally result from expenditures in the governmental funds. These assets are reported in the governmental activities column of the government-wide Statement of Net Position but are not reported in the fund financial statements. Capital assets utilized by the enterprise fund are reported both in the business-type activities column of the government-wide Statement of Net Position and in the respective fund. All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. In addition, the District capitalizes interest costs related to construction of buildings. Donated capital assets are recorded at their acquisition values as of the date received. The cost and accumulated depreciation of property sold or retired are removed from the accounts, and gains or losses, if any, are reflected in revenue or expenditures/expenses for the year. The District maintains a capitalization threshold of $5,000. The District does not possess any infrastructure. Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset s life are expensed. In the enterprise fund, assets acquired or constructed by grants and shared revenues externally restricted for capital acquisitions and construction are reported as revenue in the period received. All reported capital assets are depreciated. Depreciation is computed using the straight-line method over the following useful lives: Governmental Business-Type Activities Activities Description Estimated Lives Estimated Lives Land improvements 15-40 years N/A Buildings and improvements 15-50 years 20 years Furniture and equipment 5-20 years 12 years Vehicles 5-10 years 6 years 26
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, and Equity, Continued 5. Compensated Absences Compensated absences are absences for which employees will be paid, such as vacation and sick leave. As of June 30, 2017, district employees are no longer paid for unused absences at resignation, retirement or on any other interval. 6. Accrued Liabilities and Long-term Obligations All payables, accrued liabilities and long-term obligations are reported in the government-wide financial statements, and all payables, accrued liabilities and long-term obligations payable from proprietary funds are reported on the proprietary fund financial statements. In general, payables and accrued liabilities that will be paid from governmental funds are reported on the governmental fund financial statements regardless of whether they will be liquidated with current resources. However, claims and judgments, the noncurrent portion of capital leases and compensated absences that will be paid from governmental funds are reported as a liability in the fund financial statements only to the extent that they will be paid with current, expendable, available financial resources. In general, payments made within sixty days after year end are considered to have been made with current available financial resources. Bonds and other longterm obligations that will be paid from governmental funds are not recognized as a liability in the fund financial statements until due. For governmental funds, bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as another financing source net of the applicable premium or discount. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. 7. Fund Balances and Net Position The District has five classifications of governmental funds balances: nonspendable, restricted, committed, assigned, and unassigned. Where applicable, these classifications are presented on the face of the governmental funds balance sheet. For the government-wide financial statements the District applies restricted resources when an expenditure is incurred for the purposes for which both restricted and unrestricted net assets are available. For the governmental funds financial statements, the District applies committed, then assigned, then unassigned resources when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. 27
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, and Equity, Continued 7. Fund Balances and Net Position, Continued Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position is reported as restricted when there are limitations imposed on its use either through the enabling legislation adopted by the District or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The District applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available. As of June 30, 2017, the capital projects fund had a deficit fund balance of 5,766. This deficit will be made up from future operational revenues or transfers from the general fund. 8. Pensions For purposes of measuring the 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 the South Carolina Retirement System (SCRS) and additions to/deductions from SCRS s fiduciary net position have been determined on the same basis as they are reported by SCRS. 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. 9. Deferred Outflows/Inflows of Resources In addition to assets, the Statement of Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as on outflow of resources (expense/expenditure) until then. In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. 10. Interfund Activity Transfers between governmental and business-type activities on the government-wide statements are reported in the same manner as general revenues. Transfers between governmental funds and enterprise balances are eliminated. 28
Notes to Financial Statements June 30, 2017 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, and Equity, Continued 10. Interfund Activity, Continued Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in proprietary funds. Repayments from funds responsible for particular expenditures/expenses to the funds that initially paid for them are not presented on the financial statements. E. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the District s financial position and results of operations and disclosure of contingent assets and liabilities. Actual results could differ from these estimates. II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY The budgetary data reflected in the financial statements is prepared and adopted on a basis consistent with accounting principles generally accepted in the United States of America. The following procedures are used in establishing budgetary data: 1. The Superintendent submits a proposed budget to the District Board of Trustees by the March board meeting each year for approval. 2. During March, a copy of the proposed budget is submitted to the Greenwood County Council for approval of local funding levels. 3. Amendments are made during the year as approved by the Board of Trustees. In addition, board policy gives the school administration authority to make limited budget transfers between line items. The budget is used as a management control device during the year for the general and special revenue funds. Encumbrances represent uncompleted purchase orders, contracts and other commitments outstanding at year end and are recorded as reservations of fund balances since they do not constitute expenditures or liabilities. At June 30, 2017, there were no encumbrances. 29
Notes to Financial Statements June 30, 2017 III. DETAILED NOTES ON ALL FUNDS A. Deposits and Investments The District is authorized by South Carolina state law to invest in the following types of investments: 1) Obligations of the United States and agencies thereof. 2) General obligations of the State of South Carolina or any of its political units. 3) Banks and Savings and loan associations to the extent they are guaranteed by the Federal Deposit Insurance Corporation (FDIC). 4) Deposits in certificates of deposit where the certificates are collaterally secured by securities of the type described in (1) and (2) above held by a third party as escrow agent or custodian, of a market value not less than the amount of the certificate of deposit so secured, including interest. 5) The State Treasurer s Local Government Investment Pool (monitored by the State Treasurer for investments invested in government guaranteed securities in accordance with South Carolina State laws). 6) Repurchase agreements. At June 30, 2017, the carrying amount of the District s deposits was $1,337,828, $293,476 of which represents deposits held for the Pupil Activity (agency) fund, and the bank balance was $1,784,593. Custodial credit risk Custodial credit risk is the risk that the District s deposits will not be returned to it. The District has no formal policy regarding custodial credit risk. The District s deposits were covered by federal depository insurance and by collateral held in the District s name at the pledging financial institution. Credit risk South Carolina statutes authorize investments in certificates of deposit, savings accounts, repurchase agreements, the State Treasurer s Local Government Investment Pool (invested in government guaranteed securities), obligations of the U.S. Government and government agencies unconditionally guaranteed by the U.S. Government. The District has no investment policy that would further restrict its choices. Interest rate risk The District does not have a formal investment policy that limits maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Amounts on deposit with Greenwood County Treasurer Amounts on deposit with the Greenwood County Treasurer are not categorized since they cannot be identified by securities that exist in physical or book entry form. These amounts are subject to the same investment authorizations as the District under state law. The carrying values of these investments approximate the fair values. The Greenwood County Treasurer is responsible for maintaining these investments in accordance with state laws. 30
Notes to Financial Statements June 30, 2017 III. DETAILED NOTES ON ALL FUNDS, Continued B. Taxes and Accounts Receivable Assessed valuation of taxable property for 2016 in Greenwood County School District Number 52 was approximately $58,000,000. The District also participated in a county-wide levy of 39 mills applied to the total assessed valuation of Greenwood County taxable property. Three mills of the levy are distributed to the Greenwood County school district with the lowest assessed value of taxable property. Greenwood County School District Number 52 did not qualify to receive the three mills levy. The remaining 36 mills are distributed based on the student population in the various school districts in Greenwood County. The entire amount of the county-wide levy is for the general fund. Taxes are assessed as of January 1, billed the following October, due January 15, and become delinquent March 15. Taxes receivable reflected in the accompanying financial statements represent both taxes levied and collected by Greenwood County during the first sixty days after June 30, 2017, as well as taxes not yet collected. Taxes receivable of $132,561 in the general fund and $37,521 in the debt retirement fund are net of an allowance for uncollectibles of $4,100 and $1,160, respectively. South Carolina Code Section 12-37-251(A) provides a property tax exemption for property classified pursuant to Section 12-43-220(C) (homestead exemption) from property taxes levied for other than bonded indebtedness and payments pursuant to lease purchase agreements for capital construction. The exemption applies against millage imposed for school operations and the amount of fair market value of the homestead that is exempt from such millage must be set by the Department of Revenue and Taxation based on the amount available in the State Property Tax Relief Fund. Accounts receivable from state and federal agencies are also remitted to the County for the District. Intergovernmental receivables at June 30, 2017 consisted of taxes, intergovernmental grants, reimbursements and interest. All intergovernmental receivables are considered collectible in full. A summary of the principal items of intergovernmental receivables follows: Governmental activities Due from other governments Special projects Title I $ 79,775 IDEA 419,494 Preschool handicapped 10,465 Other special revenue programs 21,959 Debt service 208,624 Total governmental activities $ 740,317 Receivables for property taxes are reported net of the allowance for uncollectible accounts. Governmental funds report unavailable revenue (deferred inflows of resources) in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. At June 30, 2017, unavailable revenue related to property taxes reported in the governmental funds totaled $121,107 and $35,022 in the general and debt retirement funds, respectively. 31
Notes to Financial Statements June 30, 2017 III. DETAILED NOTES ON ALL FUNDS, Continued C. Capital Assets Capital asset activity for the year ended June 30, 2017 was as follows: Balance Additions Deletions Balance July 1, 2016 Transfers Transfers June 30, 2017 Governmental activities Capital assets, not being depreciated Land $ 1,425,078 $ - $ - $ 1,425,078 Total capital assets, not being depreciated 1,425,078 - - 1,425,078 Capital assets, being depreciated Buildings and structures 42,502,609 - - 42,502,609 Furniture, equipment and vehicles 2,328,833 - - 2,328,833 Total capital assets, being depreciated 44,831,442 - - 44,831,442 Totals at cost 46,256,520 - - 46,256,520 Less accumulated depreciation Buildings and structures 9,924,700 1,060,144-10,984,844 Furniture, equipment and vehicles 1,523,667 138,883-1,662,550 Total accumulated depreciation 11,448,367 1,199,027-12,647,394 Governmental activities capital assets, net $ 34,808,153 $ (1,199,027) $ - $ 33,609,126 Business-type activities Equipment $ 207,238 $ - $ - $ 207,238 Less accumulated depreciation 196,428 2,911-199,339 Business-type activities capital assets, net $ 10,810 $ (2,911) $ - $ 7,899 Depreciation expense was charged to governmental functions as follows: Instruction $ 707,426 Support services 491,601 Total depreciation expense $ 1,199,027 D. Long-term Liabilities A summary of changes in long-term liabilities follows: Balance Balance Amounts July 1, Additions/ June 30, Due In 2016 Transfers Reductions 2017 One Year Governmental activities General obligation bonds $ 25,364,000 $ - $ 1,660,000 $ 23,704,000 $ 1,302,000 Bonds at June 30, 2017 are comprised of general obligation bonds for school building as follows: Bonds issued October 2009 by referendum and due in annual installments of $150,000 $1,745,000 through March 1, 2034, interest from 1.00 6.00% $ 22,465,000 Bonds issued March 2014 due in annual installments of $194,000 $206,000 through March 1, 2019, interest at 1.64% 409,000 Bonds issued March 2016 due in annual installments of $94,000 - $485,000 through March 1, 2021, interest at 2.42% 830,000 Total general obligation bonds $ 23,704,000 32
Notes to Financial Statements June 30, 2017 III. DETAILED NOTES ON ALL FUNDS, Continued D. Long-term Liabilities, Continued Annual requirements to amortize all bonds, including interest, are as follows for the fiscal years ending June 30: Principal Interest Total 2018 $ 1,302,000 $ 818,829 $ 2,120,829 2019 1,338,000 784,156 2,122,156 2020 1,375,000 748,516 2,123,516 2021 1,414,000 710,233 2,124,233 2022 1,125,000 670,840 1,795,840 2023-2027 6,230,000 2,780,964 9,010,964 2028-2032 7,495,000 1,544,730 9,039,730 2033-2034 3,425,000 200,496 3,625,496 $ 23,704,000 $ 8,258,764 $ 31,962,764 The taxing power of Greenwood County has been pledged for the payment of outstanding indebtedness. The District has a legal debt limit of 8% of the assessed value of property in the District for debt incurred after November 30, 1982, unless approved in voter referendum. At June 30, 2017, the debt limit was approximately $4,619,000. As of June 30, 2017, the remaining debt margin available to the District was $3,380,000. E. Interfund Receivables and Payables The District maintains a pooled cash account in the general fund for a majority of the funds of the District. Interfund receivables and payables are a result of cash activity related to the pooled cash account. As of June 30, 2017, amounts receivable/payable from (to) other funds related to the District s cash pool are as follows: Fund Receivables Payables General $ 977,088 $ - Special revenue Other - 264,920 Special revenue EIA 257,470 - Debt retirement - 111,155 Capital projects - 31,425 Food service - 827,058 $ 1,234,558 $ 1,234,558 F. Transfers From and To Other Funds During the course of normal operations, the District has transactions between funds to provide services, construct assets, service debt, etc. These transactions are generally reflected as operating transfers. Total operating transfers during the year ended June 30, 2017, consisted of the following individual fund amounts: Fund Transfers In Transfers Out General fund $ 395,962 $ 126,921 Special revenue other 114,313 35,607 Special revenue - EIA fund 10,435 358,182 Capital projects fund - - Total $ 520,710 $ 520,710 33
Notes to Financial Statements June 30, 2017 III. DETAILED NOTES ON ALL FUNDS, Continued F. Transfers From and To Other Funds, Continued Transfers out of the special revenue EIA fund are to cover salaries and fringes paid out of the general fund. Transfers out of the general fund to the food service fund are to cover an operating deficit. Transfers out of the general fund to the capital projects fund are to partially fund the capital projects program. G. Operating Leases The District leases equipment, primarily copiers and computers, under non-cancelable operating leases. During the year, lease payments totaled approximately $163,000. In addition to the regular monthly rental amount, the District pays an additional monthly charge on a per copy basis of $0.03. The approximate remaining minimum payments on the leases are due as follows: 2018 $ 167,000 2019 164,000 2020 164,000 2021 63,000 $ 558,000 IV. OTHER INFORMATION A. Employee Benefits Pension Plan The South Carolina Public Employee Benefit Authority (PEBA), which was created July 1, 2012, administers the various retirement systems and retirement programs managed by its Retirement Division. PEBA has an 11-member Board of Directors, appointed by the Governor and General Assembly leadership, which serves as co-trustee and co-fiduciary of the systems and the trust funds. By law, the State Fiscal Accountability Authority (SFAA), which consists of five elected officials, also reviews certain PEBA Board decisions regarding the funding of the South Carolina Retirement Systems (Systems) and serves as a co-trustee of the Systems in conducting that review. For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Systems and additions to/deductions from the Systems fiduciary net position have been determined on the accrual basis of accounting as they are reported by the Systems in accordance with generally accepted accounting principles (GAAP). For this purpose, revenues are recognized when earned and expenses are recognized when incurred. Benefit and refund expenses are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value. PEBA issues a Comprehensive Annual Financial Report (CAFR) containing financial statements and required supplementary information for the Systems Pension Trust Funds. The CAFR is publicly available through the Retirement Benefits link on PEBA s website at www.peba.sc.gov, or a copy may be obtained by submitting a request to PEBA, 202 Arbor Lake Drive, Columbia, SC 29223. PEBA is considered a division of the primary government of the state of South Carolina and therefore, retirement trust fund financial information is also included in the comprehensive annual financial report of the state. 34
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued A. Employee Benefits, Continued Pension Plan, Continued Plan descriptions: The South Carolina Retirement System (SCRS), a cost sharing multiple-employer defined benefit pension plan, was established effective July 1, 1945, pursuant to the provisions of Section 9-1-20 of the South Carolina Code of Laws for the purpose of providing retirement allowances and other benefits for employees of the state, its public school districts, and political subdivisions. The State Optional Retirement Program (State ORP) is a defined contribution plan that is offered as an alternative to SCRS to certain newly hired state, public school, and higher education employees. State ORP participants direct the investment of their funds into a plan administered by one of four investment providers. Membership: Membership requirements are prescribed in Title 9 of the South Carolina Code of Laws. A brief summary of the requirements under each system is presented below. SCRS - Generally, all employees of covered employers are required to participate in and contribute to the system as a condition of employment. This plan covers general employees and teachers and individuals newly elected to the South Carolina General Assembly beginning with the November 2012 general election. An employee member of the system with an effective date of membership prior to July 1, 2012, is a Class Two member. An employee member of the system with an effective date of membership on or after July 1, 2012, is a Class Three member. State ORP - As an alternative to membership in SCRS, newly hired state, public school, and higher education employees and individuals newly elected to the S.C. General Assembly beginning with the November 2012 general election have the option to participate in the State Optional Retirement Program (State ORP), which is a defined contribution plan. State ORP participants direct the investment of their funds into a plan administered by one of four investment providers. PEBA assumes no liability for State ORP benefits. Rather, the benefits are the liability of the investment providers. For this reason, State ORP programs are not part of the retirement systems trust funds for financial statement purposes. Employee and Employer contributions to the State ORP are at the same rates as SCRS. A direct remittance is required from the employer to the member s account with investment providers for the employee contribution and a portion of the employer contribution (5 percent). A direct remittance is also required to SCRS for the remaining portion of the employer contribution and an incidental death benefit contribution, if applicable, which is retained by SCRS. Benefits: Benefit terms are prescribed in Title 9 of the South Carolina Code of Laws. PEBA does not have the authority to establish or amend benefit terms without a legislative change in the code of laws. Key elements of the benefit calculation include the benefit multiplier, years of service, and average final compensation. A brief summary of benefit terms for each system is presented below. 35
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued A. Employee Benefits, Continued Pension Plan, Continued Benefits, continued: SCRS - A Class Two member who has separated from service with at least five or more years of earned service is eligible for a monthly pension at age 65 or with 28 years credited service regardless of age. A member may elect early retirement with reduced pension benefits payable at age 55 with 25 years of service credit. A Class Three member who has separated from service with at least eight or more years of earned service is eligible for a monthly pension upon satisfying the Rule of 90 requirement that the total of the member s age and the member s creditable service equals at least 90 years. Both Class Two and Class Three members are eligible to receive a reduced deferred annuity at age 60 if they satisfy the five- or eight-year earned service requirement, respectively. An incidental death benefit is also available to beneficiaries of active and retired members of employers who participate in the death benefit program. The annual retirement allowance of eligible retirees or their surviving annuitants is increased by the lesser of one percent or five hundred dollars every July 1. Only those annuitants in receipt of a benefit on July 1 of the preceding year are eligible to receive the increase. Members who retire under the early retirement provisions at age 55 with 25 years of service are not eligible for the benefit adjustment until the second July 1 after reaching age 60 or the second July 1 after the date they would have had 28 years of service credit had they not retired. The retirement allowance of eligible retirees or their surviving annuitants is increased by the lesser of one percent or five hundred dollars every July 1. Only those annuitants in receipt of a benefit on July 1 of the preceding year are eligible to receive the increase. Contributions: Contributions are prescribed in Title 9 of the South Carolina Code of Laws. Upon recommendation by the actuary in the annual actuarial valuation, the PEBA Board may adopt and present to the SFAA for approval an increase in the SCRS and PORS employer and employee contribution rates, but any such increase may not result in a differential between the employee and total employer contribution rate that exceeds 2.9 percent of earnable compensation for SCRS and 5 percent for PORS. An increase in the contribution rates adopted by the Board may not provide for an increase of more than one-half of one percent in any one year. If the scheduled employee and employer contributions provided in statute or the rates last adopted by the Board are insufficient to maintain a thirty year amortization schedule of the unfunded liabilities of the plans, the Board shall increase the contribution rates in equal percentage amounts for the employer and employee as necessary to maintain the thirty-year amortization period; and, this increase is not limited to one-half of one percent per year. 36
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued A. Employee Benefits, Continued Pension Plan, Continued Contributions, continued: Required employee contribution rates 1 are as follows: Fiscal Year 2017 Fiscal Year 2016 SCRS Employee Class Two 8.66% 8.16% Employee Class Three 8.66% 8.16% State ORP Employee 8.66% 8.16% Required employer contribution rates 1 are as follows: Fiscal Year 2017 Fiscal Year 2016 SCRS Employer Class Two 11.41% 10.91% Employer Class Three 11.41% 10.91% Employer Incidental Death Benefit 0.15% 0.15% State ORP Employer Contribution 2 11.41% 10.91% Employer Incidental Death Benefit 0.15% 0.15% 1 Calculated on earnable compensation as defined in Title 9 of the South Carolina Code of Laws. 2 Of this employer contribution, 5% of earnable compensation must be remitted by the employer directly to the ORP vendor to be allocated to the member s account with the remainder of the employer contribution remitted to the SCRS. Actuarial assumptions and methods: Actuarial valuations involve estimates of the reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and future salary increases. Actuarial assumptions and methods used during the annual valuation process are subject to periodic revision, typically with an experience study, as actual results over an extended period of time are compared with past expectations and new estimates are made about the future. South Carolina state statute requires that an actuarial experience study be completed at least once in each five-year period. An experience report on the Systems was most recently issued as of July 1, 2015. The June 30, 2016, total pension liability, net pension liability, and sensitivity information were determined by the Systems consulting actuary, Gabriel, Roeder, Smith and Company (GRS) and are based on the July 1, 2015, actuarial valuations, as adopted by the PEBA Board and SFAA which utilized membership data as of July 1, 2015. The total pension liability was rolled-forward from the valuation date to the Systems fiscal year ended June 30, 2016, using generally accepted actuarial principles. Information included in the following schedules is based on the certification provided by GRS. 37
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued A. Employee Benefits, Continued Pension Plan, Continued Actuarial assumptions and methods: The following provides a summary of the actuarial assumptions and methods used in the July 1, 2015, valuations for SCRS. SCRS Actuarial cost method Entry age normal Investment rate of return 1 7.5% Projected salary increases 3.5% to 12.5% (varies by service) 1 Benefit adjustments lesser of 1% or $500 annually 1 Includes inflation at 2.75% The post-retiree mortality assumption is dependent upon the member s job category and gender. This assumption includes base rates which are automatically adjusted for future improvement in mortality using published Scale AA projected from the year 2000. Assumptions used in the July 1, 2015, valuations for SCRS is as follows: Former Job Class Males Females Educators General Employees and Members of the General Assembly RP-2000 Males (with White Collar adjustment) multiplied by 110% RP-2000 Females (with White Collar adjustment) multiplied by 95% RP-2000 Males multiplied by 100% RP-2000 Females multiplied by 90% Public Safety and Firefighters RP-2000 Males (with Blue Collar adjustment) multiplied by 115% RP-2000 Females (with Blue Collar adjustment) multiplied by 115% Net pension liability: The net pension liability (NPL) is calculated for SCRS and represents the System s total pension liability determined in accordance with GASB No. 67 less the System s fiduciary net position. NPL totals, as of June 30, 2016, for SCRS is presented below. System Total Pension Liability Plan Fiduciary Net Position Employers Net Pension Liability Plan Fiduciary Net Position as a Percentage of the Total Pension Liability SCRS $ 45,356,214,752 $ 23,996,362,354 $ 21,359,852,398 52.9% The total pension liability is calculated by the Systems actuary, and its fiduciary net position is reported in the System s financial statements. The net pension liability is disclosed in accordance with the requirements of GASB 67 in the System s notes to the financial statements and required supplementary information. Liability calculations performed by the System s actuary for the purpose of satisfying the requirements of GASB Nos. 67 and 68 are not applicable for other purposes, such as determining the plan s funding requirements. 38
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued A. Employee Benefits, Continued Pension Plan, Continued Long-term expected rate of return: The long-term expected rate of return on pension plan investments, as used in the July 1, 2015, actuarial valuations, was based upon the 30 year capital markets outlook at the end of third quarter 2015. The long-term expected rate of returns represent assumptions developed using an arithmetic building block approach primarily based on consensus expectations and market based inputs. Expected returns are net of investment fees. The expected returns, along with the expected inflation rate, form the basis for the revised target asset allocation adopted beginning January 1, 2016. The long-term expected rate of return is produced by weighting the expected future real rates of return by the target allocation percentage and adding expected inflation and is summarized in the table below. For actuarial purposes, the 7.50 percent assumed annual investment rate of return used in the calculation of the total pension liability includes a 4.75 percent real rate of return and a 2.75 percent inflation component. Asset Class Target Asset Allocation Expected Arithmetic Real Rate of Return Long Term Expected Portfolio Real Rate of Return Global Equity 43.0% Global Public Equity 34.0% 6.52% 2.22% Private Equity 9.0% 9.30% 0.84% Real Assets 8.0% Real Estate 5.0% 4.32% 0.22% Commodities 3.0% 4.53% 0.13% Opportunistic 20.0% GTAA/Risk Parity 10.0% 3.90% 0.39% HF (Low Beta) 10.0% 3.87% 0.39% Diversified Credit 17.0% Mixed Credit 5.0% 3.52% 0.17% Emerging Markets Debt 5.0% 4.91% 0.25% Private Debt 7.0% 4.47% 0.31% Conservative Fixed Income 12.0% Core Fixed Income 10.0% 1.72% 0.17% Cash and Short Duration (Net) 2.0% 0.71% 0.01% Total Expected Real Return 100% 5.10% Inflation for Actuarial Purposes 2.75% Total Expected Nominal Return 7.85% Discount rate: The discount rate used to measure the total pension liability was 7.50 percent. The projection of cash flows used to determine the discount rate assumed that the funding policy specified in the South Carolina State Code of Laws will remain unchanged in future years. Based on those assumptions, each System s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 39
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued A. Employee Benefits, Continued Pension Plan, Continued Sensitivity analysis: The following table presents the collective net pension liability of the participating employer calculated using the discount rate of 7.50 percent, as well as what the employer s net pension liability would be if it were calculated using a discount rate that is 1.00 percent lower (6.50 percent) or 1.00 percent higher (8.50 percent) than the current rate. Sensitivity of the Net Pension Liability to Changes in the Discount Rate System 1.00% Decrease (6.50%) Current Discount Rate (7.50%) 1.00% Increase (8.50%) SCRS $24,624,212 $19,739,280 $15,672,759 Additional financial and actuarial information: Detailed information regarding the fiduciary net position of the plans administered by PEBA is available in the Systems audited financial statements for the fiscal year ended June 30, 2016 (including the unmodified audit opinion on the financial statements). Additional actuarial information is available in the accounting and financial reporting actuarial valuation as of June 30, 2016. Deferred Compensation Plans The District employees may participate in the 457 and/or 401(k) deferred compensation plans available to state and local governmental employees through the state public employee retirement system. These programs are administered by a state approved nongovernmental third party. There are no employer contributions made by the District to these plans. B. Post-Employment Benefits Other Than Pensions Plan Description In accordance with the South Carolina Code of Laws and the annual Appropriations Act, the State provides post-employment health and dental and long-term disability benefits to retired State and school district employees and their covered dependents. The District contributes to the Retiree Medical Plan (RMP) and the Long-term Disability Plan (LTDP), cost-sharing multiple-employer defined benefit postemployment healthcare and long-term disability plans administered by the Employee Insurance Program (EIP), a part of the State Budget and Control Board (SBCB). Generally, retirees are eligible for the health and dental benefits if they have established at least ten years of retirement service credit. For new hires May 2, 2008 and after, retirees are eligible for benefits if they have established twenty-five years of service for 100% employer funding and fifteen through twenty-four years of service for 50% employer funding. Benefits become effective when the former employee retires under a State retirement system. Basic long-term disability benefits (BLTD) are provided to active state, public school district and participating local government employees approved for disability. 40
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued B. Post-Employment Benefits Other Than Pensions, Continued Funding Policies Section 1-11-710 and 1-11-720 of the South Carolina Code of Laws of 1976, as amended, requires these postemployment healthcare and long-term disability benefits be funded through annual appropriations by the General Assembly for active employees to the EIP and participating retirees to the SBCB except the portion funded through the pension surcharge and provided from other applicable sources of the EIP for its active employees who are not funded by state general fund appropriations. Employers participating in the RMP are mandated by State statute to contribute at a rate assessed each year by the Office of the State Budget, 5.48% of annual covered payroll for 2017. The EIP sets the employer contribution rate based on a pay-as-you-go basis. The District paid $449,461, $489,761 and $444,692 applicable to the surcharge included with the employer contribution for retirement benefits for the fiscal years ended June 30, 2017, 2016 and 2015, respectively. BLTD benefits are funded through a per person premium charged to State agencies, public school districts, and other participating local governments. The monthly premium per active employee paid to EIP was $3.23 for the fiscal years ended June 30, 2017, 2016 and 2015. Effective May 1, 2008, the State established two trust funds through Act 195 for the purpose of funding and accounting for the employer costs of retiree health and dental insurance benefits and long-term disability insurance benefits. The South Carolina Retiree Health Insurance Trust Fund is primarily funded through the payroll surcharge. Other sources of funding include additional State appropriated dollars, accumulated EIP reserves, and income generated from investments. The Long Term Disability Insurance Trust Fund is primarily funded through investment income and employer contributions. One may obtain complete financial statements for the benefit plans and the trust funds from Employee Insurance program, 1201 Main Street, Suite 360, Columbia, South Carolina 29201. C. Commitments and Contingencies The District participates in a number of federally assisted programs, which are audited in accordance with the Single Audit Act Amendments of 1996. Audits have not resulted in any material disallowed costs, however, grantor agencies may conduct further examinations based on reported questioned costs. Based on prior experience, the District believes that further examinations would not result in any material disallowed costs. From time to time, the District is a defendant in lawsuits. It is the opinion of the District s management after conferring with legal counsel that the liability at June 30, 2017, if any, which might arise from these lawsuits would not exceed the District s liability insurance policy limits. 41
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued D. Risk Management The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters for which the District carries state or commercial insurance. Management believes such coverage is sufficient to preclude any significant uninsured losses for the covered risks. The District has had no significant reduction in coverage due to settled claims. Settled claims have not exceeded this coverage in the past three years. The District pays insurance premiums to certain State agencies and commercial insurers to cover risks that may occur in normal operations. The insurers promise to pay to or on behalf of the insured for covered economic losses sustained during the policy period in accordance with insurance policy and benefit program limits. For property losses, the District s deductible is $2,500. The District pays premiums to the South Carolina School Board s Insurance Trust which issues policies, accumulates assets to cover the risks of loss, and pays claims incurred for covered losses related to the following assets, activities, and/or events: 1. Theft of, damage to, or destruction of assets; 2. Real property, its contents, and other equipment; 3. Motor vehicles; 4. Torts; and 5. Natural disasters The South Carolina School Board s Insurance Trust is a self-insurer and purchases reinsurance to obtain certain services and specialized coverage and to limit losses in the areas of property, boiler and machinery, automobile liability, and School Board liability insurance. The South Carolina School Board s rates are determined actuarially. The District obtains coverage through a commercial insurer for employee fidelity bond insurance for all employees for losses arising from theft or misappropriation, up to a maximum of $100,000. Management believes such coverage is sufficient to preclude any significant uninsured losses for the covered risks. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three years. Prior to July 1, 1978, school districts in South Carolina were exempt from unemployment tax. Legislation was enacted providing that, effective July 1, 1978, these employing units would no longer be excluded by the South Carolina Employment Security Commission (Commission). In lieu of payment of contributions, the District, as permitted by the Act, elected to be self-insured, whereby it would reimburse the Commission s unemployment fund for any claims attributable to service in the employ of the District. Payments of claims for reimbursement to the Commission are paid out of the general operating fund. No payments were made by the District for this purpose during the current year. 42
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued E. Fund Balance and Net Position The fund balances and net position have been classified to reflect the limitations and restrictions placed on the respective funds as follows: Governmental fund financial statements Fund balances - Nonspendable balances that by their nature are unable to be spent. Fund balances - Restricted balances that can only be spent for the specific purpose stipulated by constitution, external resources providers, or through enabling legislation. Fund balances - Committed balances that can only be used for the specific purpose determined by the District s Board of Trustees. The Board of Trustees must take a formal action during one of its meetings to commit fund balance. Fund balances - Assigned balances meant to be used for a specific purpose but that do not meet the criteria as restricted or committed. Senior management at the District may assign fund balance. Fund balances - Unassigned balances that are spendable amounts not contained in other classifications. Government-wide financial statements Net investment in capital assets represents the net cost less accumulated depreciation and outstanding debt attributable to the organization of the capital assets. Restricted net position represents net position restricted externally by creditors, grantors, contributors or laws and regulations of other governments; or restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted net position - represents net position not contained in other classifications and are available for expenditure at the District s discretion. F. Tax Abatement The County provides tax abatements under four programs: Fee-in-Lieu of Tax Program (FILOT), Special Source Revenue Credit Program (SSRC), Fee-in-Lieu of Tax and Special Source Revenue Credit Program (FILOT + SSRC), and Special Source Revenue Credit and Infrastructure Program (SSRC + IP). 1. The Fee-in-Lieu of Tax Program (FILOT) offers individual incentive packages by abating property taxes to attract new business to the County and to retain current businesses. The FILOT program was established by the SC Code Title 12, Chapter 44 and Title 4, Chapter 12. Generally, for taxpayers to be approved for this program they must agree to invest the statutory minimum (A higher amount may be negotiated) during the investment period. The investment period begins on the day in which the property described in the agreement is entered into service and ends at an agreed upon point in time. Once the investment period begins, the taxpayer may receive a reduction of assessed rate, reduction in millage rate and elimination of (or reduction in) the number of times the millage rates change for the property over the length of the agreement. Repayments of any savings in property taxes are required by state law if the taxpayer fails to maintain the conditions set forth in the agreement. Other recapture provisions may be negotiated on a case by case basis. 43
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued F. Tax Abatement, Continued 2. The Special Source Revenue Credit Program (SSRC) offers individual incentive packages by abating property taxes to attract new business to the County and to retain current businesses. The SSRC program was established by the SC Code Sections 4-29-68, 4-1-170, and 12-44-70. Generally, for taxpayers to be approved for this program they must agree to incur costs of designing, acquiring, constructing, improving, or expanding improved or unimproved real estate or personal property used in the operation of a manufacturing or commercial enterprise, infrastructure servicing the project, or certain aircraft within the investment period. The investment period begins on the day in which the property described in the agreement is entered into service and ends at an agreed upon point in time. Once the investment period begins, the taxpayer will receive a specified percentage refund of their property taxes for the property included in the agreement within 30 days of their property tax payment. If the taxpayer fails to maintain conditions set forth in the agreement, state law requires that the taxpayer pay two additional years of property tax if the SSRC was received on personal property. Other recapture provisions may be negotiated on a case by case basis. 3. Fee-in-Lieu of Tax and Special Source Revenue Credit Program (FILOT + SSRC) offers individual incentive packages by abating property taxes to attract new business to the County and to retain current businesses. The Fee-in-Lieu of Tax and Special Source Revenue Credit Program (FILOT + SSRC) was established by SC Code Title 12, Chapter 44 and Title 4, Chapter 12 as SC Code Sections 4-29-68, 4-1-170, and 12-44-70. Generally, for taxpayers to be approved for this program they must agree to invest the statutory minimum (A higher amount may be negotiated) within the investment period. The investment period begins on the day in which the property described in the agreement is entered into service and ends at an agreed upon point in time. The taxpayer must also agree to incur costs of designing, acquiring, constructing, improving, or expanding improved or unimproved real estate or personal property used in the operation of a manufacturing or commercial enterprise, infrastructure servicing the project, or certain aircraft within the investment period. Once the investment period begins, the taxpayer may receive a reduction of assessed rate, reduction in millage rate and elimination of (or reduction in) the number of times the millage rates change for the property over the length of the agreement. Then the taxpayer will receive a specified percentage refund of their fee-in-lieu of tax payment within 30 days of their FILOT payments. If the taxpayer fails to maintain conditions set forth in the agreement, state law requires that the taxpayer repay all savings in property taxes from fee-in-lieu of tax payments and the taxpayer is also required by state law to pay two additional years of property tax if the SSRC was received on personal property. Other recapture provisions may be negotiated on a case by case basis. 44
Notes to Financial Statements June 30, 2017 IV. OTHER INFORMATION, Continued F. Tax Abatement, Continued 4. The Special Source Revenue Credit and Infrastructure Program (SSRC + IP) offers individual incentive packages by abating property taxes and giving property grants to attract new business to the County and to retain current businesses. The Special Source Revenue Credit and Infrastructure Program (SSRC + IP) was established by the SC Code Sections 4-29-68, 4-1-170, and 12-44-70. Generally, for taxpayers to be approved for this program they must agree to incur costs of designing, acquiring, constructing, improving, or expanding improved or unimproved real estate or personal property used in the operation of a manufacturing or commercial enterprise, infrastructure servicing the project, or certain aircraft within the investment period. The investment period begins on the day in which the property described in the agreement is entered into service and ends at an agreed upon point in time. Generally, the taxpayer agrees to invest the statutory minimum and a job creation minimum within the investment period. Once the investment period begins, the taxpayer will receive a specified percentage refund of their property taxes for the property included in the agreement within 30 days of their property tax payment. The taxpayer will also receive a land grant for an amount negotiated in the agreement. If the taxpayer fails to maintain conditions set forth in the agreement, state law requires that the taxpayer pay two additional years of property tax if the SSRC was received on personal property. Additionally, the taxpayer will be required to reimburse the County for the land grant as well as interest based on the negotiated percentage in the agreement. Other recapture provisions may be negotiated on a case by case basis. The District s property tax revenues were reduced by $6,324,686 under agreements entered into by Greenwood County as of June 30, 2017. G. Restatement Effective July 1, 2017 the District eliminated its compensated absences policy. Prior to this date the District s policy was to pay out accumulated leave in excess of 90 days to employees and up to 90 days to retiring employees. All accrued days over 90 were paid out at June 30, 2017 therefore the accrued liability associated with compensated absences was eliminated. As a result, ending unrestricted net position for the District for the year ended June 30, 2016 increased by $246,446 and $44,323 for the governmental and business-type activities respectively. This increase resulted in the restatement of total net position to a deficit balance of $148,085 for the governmental activities and a restatement of total net position to a deficit balance of $307,040 for business-type activities for the year ended June 30, 2016. 45
Required Supplementary Information Schedule 1 - Budgetary Comparison Schedule - General Fund For the year ended June 30, 2017 Variance Budgeted Amounts with Final Original and Final Actual Budget Revenues 1000 Revenue from local sources 1200 Revenue from Local Governmental Units other than LEA's 1210 Ad valorem taxes-including delinquent $ 2,313,928 $ 2,606,335 $ 292,407 1240 Penalties and interest on taxes 11,178 10,152 (1,026) 1280 Revenue in lieu of taxes 2,029,112 1,971,769 (57,343) 1290 Other taxes (dependent) 852,205 698,071 (154,134) 1300 Tuition 1310 From patrons for regular day school 25,004 20,710 (4,294) 1500 Earnings on investments 1510 Interest on investments 10,680 - (10,680) 1530 Gain or loss on sale of investments - 12,766 12,766 1700 Pupil activity 1790 Other pupil activity income 7,620 5,334 (2,286) 1900 Miscellaneous local revenue 1910 Rentals 2,540 150 (2,390) 1999 Revenue from other local sources 25,745 (1,112) (26,857) Total local sources 5,278,012 5,324,175 46,163 3000 Revenue from state sources 3130 Special programs 3131 Handicapped transportation - 9 9 3160 School bus drivers' salary 3160 School bus drivers' salary 70,446 74,493 4,047 3162 Transportation workers' compensation 6,015 6,015-3180 Fringe benefits employer contributions 3180 Fringe benefits employer contributions 1,353,329 1,291,729 (61,600) 3181 Retiree insurance 344,958 365,135 20,177 3300 Education Finance Act 3310 Full-time programs 3311 Kindergarten 141,781 156,042 14,261 3312 Primary 512,535 456,787 (55,748) 3313 Elementary 745,049 744,740 (309) 3314 High school 133,803 182,741 48,938 3315 Trainable mentally handicapped 534 6,392 5,858 3316 Speech handicapped 168,359 140,087 (28,272) 3317 Homebound 3,122 1,573 (1,549) 3320 Part-time programs 3321 Emotionally handicapped - 7,391 7,391 3322 Educable mentally handicapped 11,086 7,465 (3,621) 3323 Learning disabilities 267,215 296,975 29,760 3325 Visually handicapped 3,715 11,754 8,039 3326 Orthopedically handicapped - 4,040 4,040 3327 Vocational 732,750 612,844 (119,906) 3330 Other EFA programs 3331 Autism 18,615 38,899 20,284 3332 High achieving 46,826 39,300 (7,526) 3334 Limited English proficiency 3,758 2,212 (1,546) 3351 Academic assistance 53,330 109,010 55,680 3352 Pupils in poverty 338,481 325,619 (12,862) 3353 Dual credit enrollment - 12,971 12,971 3800 State revenue in lieu of taxes 3810 Reimbursement for local property tax relief 274,466 270,144 (4,322) 3820 Homestead exemption 248,043 244,137 (3,906) 3825 Reimbursement property tax relief 1,572,358 1,562,974 (9,384) 3830 Merchants inventory tax 18,777 18,481 (296) 3840 Manufacturers depreciation reimbursement 550,888 544,331 (6,557) 3890 Other state property tax revenues 21,946 24,845 2,899 Total state sources 7,642,185 7,559,135 (83,050) Total revenue all sources $ 12,920,197 $ 12,883,310 $ (36,887) 46
Required Supplementary Information Schedule 1 - Budgetary Comparison Schedule General Fund, Continued For the year ended June 30, 2017 Variance Budgeted Amounts with Final Original and Final Actual Budget EXPENDITURES 100 INSTRUCTION 110 General instruction 111 Kindergarten programs 100 Salaries $ 350,072 $ 305,549 $ 44,523 200 Employee benefits 133,156 114,350 18,806 400 Supplies and materials 9,025 5,250 3,775 492,253 425,149 67,104 112 Primary programs 100 Salaries 1,278,798 956,972 321,826 200 Employee benefits 463,572 370,165 93,407 300 Purchased services 87,153 63,541 23,612 400 Supplies and materials 32,653 18,998 13,655 500 Capital outlay 891-891 600 Other objects 5,548-5,548 1,868,615 1,409,676 458,939 113 Elementary programs 100 Salaries 1,496,191 1,592,035 (95,844) 200 Employee benefits 558,691 580,942 (22,251) 300 Purchased services 147,301 115,428 31,873 400 Supplies and materials 40,825 30,346 10,479 600 Other objects 5,893-5,893 2,248,901 2,318,751 (69,850) 114 High school programs 100 Salaries 1,578,001 1,217,594 360,407 200 Employee benefits 555,427 460,215 95,212 300 Purchased services 112,182 81,677 30,505 400 Supplies and materials 42,328 25,206 17,122 600 Other objects 345 59 286 2,288,283 1,784,751 503,532 115 Career and technology programs 100 Salaries 82,884 224,763 (141,879) 200 Employee benefits - 85,629 (85,629) 300 Purchased services 1,950 1,500 450 400 Supplies and materials 11,621 1,126 10,495 96,455 313,018 (216,563) Total general instruction 6,994,507 6,251,345 743,162 120 Exceptional programs 125 Hearing handicapped 400 Supplies and materials 2,228 33 2,195 2,228 33 2,195 127 Learning disabilities 100 Salaries 162,122 305,656 (143,534) 200 Employee benefits 37,798 97,340 (59,542) 199,920 402,996 (203,076) Total exceptional programs 202,148 403,029 (200,881) 130 Preschool programs 135 Pre-school handicapped - Speech (3 & 4 year olds) 100 Salaries 61,401 61,853 (452) 200 Employee benefits 20,190 20,167 23 81,591 82,020 (429) 47
Required Supplementary Information Schedule 1 - Budgetary Comparison Schedule General Fund, Continued For the year ended June 30, 2017 Variance Budgeted Amounts with Final Original and Final Actual Budget EXPENDITURES, Continued 100 INSTRUCTION, Continued 130 Preschool programs, continued 137 Pre-school handicapped - Self contained (3 & 4 year olds) 100 Salaries 54,096 41,929 12,167 200 Employee benefits 20,513 10,666 9,847 74,609 52,595 22,014 Total preschool programs 156,200 134,615 21,585 140 Special programs 141 Gifted and talented - Academic 100 Salaries 108,101 109,726 (1,625) 200 Employee benefits 44,911 44,832 79 153,012 154,558 (1,546) 145 Homebound 100 Salaries - 312 (312) 200 Employee benefits - 80 (80) 300 Purchased services 494-494 494 392 102 147 CDEP 100 Salaries 145,544 84,051 61,493 200 Employee benefits 62,816 49,552 13,264 208,360 133,603 74,757 148 Gifted and talented - artistic 100 Salaries - 3,200 (3,200) 200 Employee benefits - 806 (806) - 4,006 (4,006) Total special programs 361,866 292,559 69,307 180 Adult/continuing educational programs 188 Parenting/family literacy 300 Purchased services 292 339 (47) 400 Supplies and materials 201-201 493 339 154 Total adult programs 493 339 154 Total instruction 7,715,214 7,081,887 633,327 200 SUPPORT SERVICES 210 Pupil services 211 Attendance and social work services 300 Purchased services 32 103 (71) 32 103 (71) 212 Guidance services 100 Salaries 320,456 348,729 (28,273) 200 Employee benefits 127,292 132,879 (5,587) 300 Purchased services 533 202 331 400 Supplies and materials 2,346 1,596 750 450,627 483,406 (32,779) 213 Health services 100 Salaries 57,763 52,836 4,927 200 Employee benefits 46,245 16,981 29,264 300 Purchased services 4,735 5,404 (669) 400 Supplies and materials 3,921 1,354 2,567 112,664 76,575 36,089 Total pupil services 563,323 560,084 3,239 48
Required Supplementary Information Schedule 1 - Budgetary Comparison Schedule General Fund, Continued For the year ended June 30, 2017 Variance Budgeted Amounts with Final Original and Final Actual Budget EXPENDITURES, Continued 200 SUPPORT SERVICES, Continued 220 Instructional staff services 221 Improvement of instruction - Curriculum development 100 Salaries 175,384 125,619 49,765 200 Employee benefits 58,158 36,345 21,813 300 Purchased services 55,014 130,701 (75,687) 400 Supplies and materials 21,048 10,950 10,098 600 Other objects 5,231 2,760 2,471 314,835 306,375 8,460 222 Library and media services 100 Salaries 235,489 228,945 6,544 200 Employee benefits 88,688 86,647 2,041 300 Purchased services 590 973 (383) 400 Supplies and materials 13,739 13,010 729 338,506 329,575 8,931 223 Supervision of special programs 100 Salaries 83,173 85,536 (2,363) 200 Employee benefits 28,029 28,313 (284) 111,202 113,849 (2,647) 224 Improvement of instruction - Inservice and staff training 300 Purchased services 31,416 10,746 20,670 31,416 10,746 20,670 Total instructional staff services 795,959 760,545 35,414 230 General administration services 231 Board of education 100 Salaries - 750 (750) 200 Employee benefits - 189 (189) 300 Purchased services 221,933 155,545 66,388 318 Audit services 35,650 23,650 12,000 400 Supplies and materials 570 447 123 600 Other objects 19,038 9,265 9,773 277,191 189,846 87,345 232 Office of the superintendent 100 Salaries 225,061 90,167 134,894 200 Employee benefits 58,460 27,234 31,226 300 Purchased services 18,789 76,563 (57,774) 400 Supplies and materials 10,880 8,712 2,168 500 Capital outlay 446-446 600 Other objects 1,299 1,390 (91) 314,935 204,066 110,869 233 School administration 100 Salaries 696,956 595,005 101,951 200 Employee benefits 265,751 215,968 49,783 300 Purchased services 975 120 855 400 Supplies and materials 6,025 2,093 3,932 600 Other objects 955 1,408 (453) 970,662 814,594 156,068 Total general administration services 1,562,788 1,208,506 354,282 49
Required Supplementary Information Schedule 1 - Budgetary Comparison Schedule General Fund, Continued For the year ended June 30, 2017 Variance Budgeted Amounts with Final Original and Final Actual Budget EXPENDITURES, Continued 200 SUPPORT SERVICES, Continued 250 Finance and operations services 252 Fiscal services 100 Salaries 143,531 98,506 45,025 200 Employee benefits 51,858 33,966 17,892 300 Purchased services 26,252 13,445 12,807 400 Supplies and materials 2,346 855 1,491 500 Capital outlay 4,143-4,143 600 Other objects 616 34,216 (33,600) 228,746 180,988 47,758 254 Operation and maintenance of plant 100 Salaries 239,063 198,712 40,351 200 Employee benefits 102,007 80,657 21,350 300 Purchased services 691,333 647,314 44,019 321 Public utilities 56,496 35,878 20,618 400 Supplies and materials 145,452 70,073 75,379 470 Energy 407,060 433,477 (26,417) 500 Capital outlay 4,887-4,887 600 Other objects 24,126 15,219 8,907 1,670,424 1,481,330 189,094 255 Student transportation 100 Salaries 166,393 199,377 (32,984) 200 Employee benefits 61,427 66,798 (5,371) 300 Purchased services 30,480 82,072 (51,592) 400 Supplies and materials 3,351 1,037 2,314 600 Other objects 405 341 64 262,056 349,625 (87,569) 256 Food service 200 Employee benefits - 94,622 (94,622) - 94,622 (94,622) 258 Security 100 Salaries 18,650 8,126 10,524 200 Employee benefits 1,120 622 498 300 Purchased services 16,170 17,353 (1,183) 400 Supplies and materials 168 2,377 (2,209) 500 Capital outlay 3,049 5,952 (2,903) 39,157 34,430 4,727 Total finance and operation services 2,200,383 2,140,995 59,388 260 Central support services 266 Technology and data processing services 100 Salaries 88,085 91,220 (3,135) 200 Employee benefits 37,525 37,972 (447) 500 Capital outlay 4,455-4,455 130,065 129,192 873 Total central support services 130,065 129,192 873 270 Pupil services 271 Pupil services activities 100 Salaries 150,000 162,618 (12,618) 200 Employee benefits - 37,379 (37,379) 300 Purchased services 3,705 745 2,960 400 Supplies and materials 37,236 40,567 (3,331) 500 Capital outlay 3,564 2,906 658 600 Other objects 39,414 38,353 1,061 233,919 282,568 (48,649) Total pupil services 233,919 282,568 (48,649) Total support services 5,486,437 5,081,890 404,547 50
Required Supplementary Information Schedule 1 - Budgetary Comparison Schedule General Fund, Continued For the year ended June 30, 2017 Variance Budgeted Amounts with Final Original and Final Actual Budget EXPENDITURES, Continued 410 INTERGOVERNMENTAL EXPENDITURES 412 Payments to other governmental units 720 Transits 54,660 54,660 - Total intergovernmental expenditures 54,660 54,660 - Total expenditures 13,256,311 12,218,437 1,037,874 OTHER FINANCING SOURCES (USES) Interfund Transfers, From (To) Other Funds: 5220 Transfer from special revenue fund - 2,174 2,174 5230 Transfer from special revenue EIA fund 332,427 393,788 61,361 421-710 Transfer to special revenue fund - (126,921) (126,921) Total other financing sources (uses) 332,427 269,041 (63,386) Excess / (deficiency) of revenues and other financing sources over/(under) expenditures and other financing uses $ (3,687) 933,914 $ 937,601 Fund balance, beginning of year 4,128,479 Fund balance, end of year $ 5,062,393 Accounting principles generally accepted in the United States of America serve as the budgetary basis of accounting. 51
Greenwood County School District 52 Required Supplementary Information Schedule 2 - Schedule of the District's Proportionate Share of the Net Pension Liability For the fiscal year ended June 30, 2017 SCRS 2017 2016 2015 2014 District's proportion of the net pension liability 0.09241% 0.09513% 0.09738% 0.09738% District's proportionate share of the net pension liability $ 19,739,280 $ 18,041,105 $ 16,765,091 $ 17,465,960 District's covered payroll during the measurement period $ 8,976,379 $ 8,935,123 $ 8,839,860 $ 8,817,708 District's proportionate share of the net pension liability as a percentage of its covered-employee payroll 219.90248% 201.91222% 189.65335% 198.07823% Plan fiduciary net position as a percentage of the total pension liability 52.91% 56.99% 59.92% 56.39% Note: Data unavailable for years prior to 2014. 52
Greenwood County School District 52 Required Supplementary Information Schedule 3 - Schedule of the District's Contributions For the fiscal year ended June 30, 2017 SCRS 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 Contractually required contribution $ 973,202 $ 989,758 $ 972,193 $ 937,097 n/a n/a n/a n/a n/a n/a Contributions in relation to the contractually required contribution 973,202 989,758 972,193 937,097 n/a n/a n/a n/a n/a n/a Contribution deficiency (excess) $ - $ - $ - $ - n/a n/a n/a n/a n/a n/a District's covered-employee payroll during the measurement period $ 8,432,602 $ 8,976,379 $ 8,935,123 $ 8,839,860 n/a n/a n/a n/a n/a n/a Contributions as a percentage of covered-employee payroll 11.54095% 11.02625% 10.88058% 10.60081% Note: Data unavailable for years prior to 2014 53
Schedule A-1 - Special Revenue - Other Combining Schedule of Revenues, Expenditures and Changes in Fund Balance For the year ended June 30, 2017 Other Preschool Designated Other Handi- Restricted Special Title I IDEA capped CATE State Revenue (201) (203) (205) (207) Grants* Programs* Total REVENUES 1000 Revenues from local sources 1900 Other revenue from local sources 1931 Medicaid $ - $ - $ - $ - $ - $ 60,863 $ 60,863 1999 Revenue from other local sources - - - - - 42,657 42,657 Total local sources - - - - - 103,520 103,520 3000 Revenue from state sources 3100 Restricted state grants 3110 Occupational education 3118 EEDA career specialists - - - - 94,306-94,306 3130 Special programs 3134 CDEP Expansion - - - - 4,140-4,140 3135 Reading coaches - - - - 62,730-62,730 3136 Student health and fitness - nurses - - - - 29,034-29,034 3177 Summer reading camp - - - - 6,507-6,507 3600 Education lottery act revenue 3630 K-12 technology initiative - - - - 49,230-49,230 Total state sources - - - - 245,947-245,947 4000 Revenues from federal sources 4200 Occupational education 4210 Vocational aid, Title I - - - 19,152 - - 19,152 4300 Elementary and Secondary Education Act of 1965 4310 Title I, Basic state grant programs 254,420 - - - - - 254,420 4312 Rural and low-income school program, Title VI - - - - - 33,979 33,979 4351 Improving teacher quality - - - - - 2,996 2,996 4500 Programs for children with disabilities 4510 IDEA - 643,486 - - - - 643,486 4520 Pre-school grants - - 22,114 - - - 22,114 Total federal sources 254,420 643,486 22,114 19,152-36,975 976,147 Total revenue all sources 254,420 643,486 22,114 19,152 245,947 140,495 1,325,614 54
Schedule A-1 - Special Revenue - Other Combining Schedule of Revenues, Expenditures and Changes in Fund Balance, Continued For the year ended June 30, 2017 Other Preschool Designated Other Handi- Restricted Special Title I IDEA capped CATE State Revenue (201) (203) (205) (207) Grants* Programs* Total EXPENDITURES 100 INSTRUCTION 110 General instruction 112 Primary programs 400 Supplies and materials - - - - 31,766-31,766 - - - - 31,766-31,766 113 Elementary programs 400 Supplies and materials - - - - 8,772 8,252 17,024 - - - - 8,772 8,252 17,024 114 High school programs 400 Supplies and materials - - - - 8,692-8,692 - - - - 8,692-8,692 115 Career and technology education programs 300 Purchased services - - - 6,834 - - 6,834 400 Supplies and materials - - - 7,345 - - 7,345 500 Capital outlay - - - 4,500 - - 4,500 - - - 18,679 - - 18,679 Total general instruction - - - 18,679 49,230 8,252 76,161 120 Exceptional programs 121 Educable mentally handicapped 100 Salaries - 17,183 - - - - 17,183 200 Employee benefits - 9,145 - - - - 9,145-26,328 - - - - 26,328 122 Trainable mentally handicapped 100 Salaries - 67,477 - - - - 67,477 200 Employee benefits - 25,659 - - - - 25,659-93,136 - - - - 93,136 123 Orthopedically Handicapped 300 Purchased services - 46,401 - - - - 46,401-46,401 - - - - 46,401 124 Visually handicapped 300 Purchased services - 1,624 - - - - 1,624-1,624 - - - - 1,624 126 Speech handicapped 100 Salaries - 56,638 - - - - 56,638 200 Employee benefits - 24,989 - - - - 24,989-81,627 - - - - 81,627 127 Learning disabilities 100 Salaries - 88,847 - - - - 88,847 200 Employee benefits - 19,814 - - - - 19,814 400 Supplies and materials - 69,240 - - - - 69,240-177,901 - - - - 177,901 Total exceptional programs - 427,017 - - - - 427,017 55
Schedule A-1 - Special Revenue - Other Combining Schedule of Revenues, Expenditures and Changes in Fund Balance, Continued For the year ended June 30, 2017 Other Preschool Designated Other Handi- Restricted Special Title I IDEA capped CATE State Revenue (201) (203) (205) (207) Grants* Programs* Total EXPENDITURES 100 INSTRUCTION, Continued 130 Pre-school programs 137 Preschool handicapped self contained 100 Salaries - - 14,098 - - - 14,098 200 Employee benefits - - 8,016 - - - 8,016 - - 22,114 - - - 22,114 Total preschool programs - - 22,114 - - - 22,114 140 Special Programs 142 Disadvantaged 100 Salaries 173,991 - - - - - 173,991 200 Employee benefits 71,420 - - - - - 71,420 300 Purchased services 21,483 - - - - - 21,483 400 Supplies and materials 3,104 - - - - - 3,104 269,998 - - - - - 269,998 145 Homebound 100 Salaries - 4,603 - - - - 4,603 200 Employee benefits - 857 - - - - 857-5,460 - - - - 5,460 147 CDEP 400 Supplies and materials - - - - 4,141-4,141 - - - - 4,141-4,141 Total special programs 269,998 5,460 - - 4,141-279,599 160 Other Exceptional Programs 161 Autism 400 Supplies and materials - 493 - - - - 493-493 - - - - 493 Total other exceptional programs - 493 - - - - 493 170 Summer School Programs 172 Elementary summer school 100 Salaries - 3,198 - - 1,507-4,705 200 Employee benefits - 814 - - - - 814 300 Purchased services - - - - 5,000-5,000-4,012 - - 6,507-10,519 Total summer school programs - 4,012 - - 6,507-10,519 180 Adult/Continuing Educational Programs 188 Parenting/family literacy 400 Supplies and materials 1,278 - - - - - 1,278 1,278 - - - - - 1,278 Total adult/continuing educational programs 1,278 - - - - - 1,278 Total instruction 271,276 436,982 22,114 18,679 59,878 8,252 817,181 56
Schedule A-1 - Special Revenue - Other Combining Schedule of Revenues, Expenditures and Changes in Fund Balance, Continued For the year ended June 30, 2017 Other Preschool Designated Other Handi- Restricted Special Title I IDEA capped CATE State Revenue (201) (203) (205) (207) Grants* Programs* Total EXPENDITURES 200 SUPPORT SERVICES 210 Pupil services 212 Guidance services 100 Salaries - - - - 54,398-54,398 200 Employee benefits - - - - 17,867-17,867 - - - - 72,265-72,265 213 Health services 100 Salaries - - - - 32,790-32,790 200 Employee benefits - - - - 18,997-18,997 300 Purchased services - - - - - 38,060 38,060 - - - - 51,787 38,060 89,847 214 Psychological services 300 Purchased services - 127,936 - - - - 127,936 400 Supplies and materials - 2,916 - - - - 2,916-130,852 - - - - 130,852 217 Career specialist services 100 Salaries - - - - 32,963-32,963 200 Employee benefits - - - - 11,741-11,741 - - - - 44,704-44,704 Total pupil services - 130,852 - - 168,756 38,060 337,668 220 Instructional staff services 221 Improvement of instruction - curriculum development 100 Salaries - - - - 60,653-60,653 200 Employee benefits - - - - 23,944-23,944 400 Supplies and materials - - - - - 7,050 7,050 - - - - 84,597 7,050 91,647 223 Supervision of special programs 100 Salaries - 30,886 - - - - 30,886 200 Employee benefits - 18,373 - - - - 18,373 300 Purchased services 1,203 7,445-7,508 - - 16,156 400 Supplies and materials 2,390 17,099 - - - - 19,489 600 Other objects - 400 - - - - 400 3,593 74,203-7,508 - - 85,304 224 Improvement of instruction - in-service and staff training 100 Salaries - - - - - 2,500 2,500 200 Employee benefits - - - - - 667 667 300 Purchased services 1,601 1,205 - - - 14,620 17,426 400 Supplies and materials - - - - - 16,117 16,117 1,601 1,205 - - - 33,904 36,710 Total instructional staff services 5,194 75,408-7,508 84,597 40,954 213,661 250 Finance and operations services 251 Student transportation (federal/district mandated) 300 Purchased services - 245 - - - - 245-245 - - - - 245 57
Schedule A-1 - Special Revenue - Other Combining Schedule of Revenues, Expenditures and Changes in Fund Balance, Continued For the year ended June 30, 2017 Other Preschool Designated Other Handi- Restricted Special Title I IDEA capped CATE State Revenue (201) (203) (205) (207) Grants* Programs* Total EXPENDITURES 200 SUPPORT SERVICES 255 Student transportation (State Mandated) 400 Supplies and materials - - - - - 12,760 12,760 - - - - - 12,760 12,760 Total finance and operation services - 245 - - - 12,760 13,005 Total support services 5,194 206,505-7,508 253,353 91,774 564,334 OTHER FINANCING SOURCES (USES) Total expenditures 276,470 643,487 22,114 26,187 313,231 100,026 1,381,515 5210 Transfer from general fund 22,050 - - 7,035 67,284 17,944 114,313 420-710 Transfer to general fund - - - - - (35,607) (35,607) Total other financing sources (uses) 22,050 - - 7,035 67,284 (17,663) 78,706 Excess/(Deficiency) of Revenues over Expenditures - (1) - - - 22,806 22,805 Fund balance, beginning of year - - - - - 70,345 70,345 Fund balance, end of year $ - $ (1) $ - $ - $ - $ 93,151 $ 93,150 * Listing of LEA subfund codes and titles included in these columns are as follows: Other Restricted State Grants 914 Digital instructional materials 918 Technology professional development 919 Education license plates 924 CDEPP Expansion 926 Summer reading camp 928 EEDA career specialists 935 Reading coaches 936 Student Health and Fitness - Nurses 937 Student Health and Fitness - PE Teachers 963 K-12 technology initiative Other Special Revenue Grants 251 REAP Title VI 267 Improving teacher quality 299 Medicaid 801 Profoundly mentally handicapped 888 Local special revenue fund 896 E-rate 58
Schedule A-2 - Special Revenue Fund - Other Summary Schedule for Designated Restricted State Grants For the year ended June 30, 2017 Transfers Unearned Subfund Revenue Programs Revenues Expenditures In/(Out) Revenue 914 3194 Digital instructional materials $ - $ - $ - $ 1,501 918 3198 Technology professional development - - - 2,780 928 3118 EEDA career specialists 94,306 94,306 - - 937 3127 Student health and fitness - - - 11,884 924 3134 CDEP expansion 4,140 4,140-5,140 935 3135 Reading coaches 62,730 84,597 21,867-936 3136 Student health and fitness - nurses 29,034 51,788 22,754-926 3177 Summer reading camp 6,507 6,507-23,240 928 3118 EEDA career specialist - 22,663 22,663-919 3193 Education license plates - - - 1,207 963 3630 K-12 technology initiative 49,230 49,230-3,398 $ 245,947 $ 313,231 $ 67,284 $ 49,150 59
Schedule A-3 - EIA Combined Schedule of Revenues, Expenditures and Changes in Fund Balance For the year ended June 30, 2017 Total REVENUES 3000 Revenue from state sources 3511 Professional development $ 10,540 3512 Technology professional development 5,799 3525 Vocational education equipment 18,766 3526 Teacher specialists 23 3532 National board certification salary supplement 56,043 3533 Teacher of the year awards 1,077 3538 Students at risk of school failure 170,849 3541 Childhood development education program (CDEP) 158,134 3550 Teacher salary increase 312,629 3555 School employer contributions 45,553 3558 Reading 8,265 3577 Teacher supplies 31,075 3578 High schools that work 5,064 3587 IDEA MOE Tier 1 12,754 3592 School to work transition act 3,753 3594 EEDA 86,350 3597 Aid to districts 29,676 Total revenue from state sources $ 956,350 60
Schedule A-3 - EIA Combined Schedule of Revenues, Expenditures and Changes in Fund Balance, Continued For the year ended June 30, 2017 Total EXPENDITURES 100 INSTRUCTION 110 General instruction 111 Kindergarten programs 400 Supplies and materials $ 2,200 2,200 112 Primary programs 100 Salaries 6,750 200 Employee benefits 1,717 400 Supplies and materials 5,776 14,243 113 Elementary programs 100 Salaries 1,000 200 Employee benefits 338 400 Supplies and materials 13,362 14,700 114 High school programs 100 Salaries 35,378 200 Employee benefits 13,381 300 Purchased services 1,500 400 Supplies and materials 9,625 59,884 115 Career and technology education programs 300 Purchased services 5,278 400 Supplies and materials 10,861 500 Capital outlay 4,128 20,267 Total general instruction 111,294 120 Exceptional programs 127 Learning disabilities 100 Salaries 7,500 200 Employee benefits 1,908 400 Supplies and materials 11,679 21,087 Total exceptional programs 21,087 140 Special programs 147 CDEP 100 Salaries 126,097 200 Employee benefits 32,037 158,134 Total special programs 158,134 61
Schedule A-3 - EIA Combined Schedule of Revenues, Expenditures and Changes in Fund Balance, Continued For the year ended June 30, 2017 Total EXPENDITURES, Continued 100 INSTRUCTION, Continued 180 Adult/ continuing educational programs 188 Parenting/family literacy 100 Salaries 107,668 200 Employee benefits 40,579 300 Purchased services 7,615 155,862 Total adult/continuing education programs 155,862 Total instruction 446,377 200 SUPPORTING SERVICES 210 Pupil services 212 Guidance services 100 Salaries 15,000 200 Employee benefits 3,787 18,787 Total pupil services 18,787 220 Instructional staff services 224 Improvement of instruction-inservice and staff training 100 Salaries 13,589 200 Employee benefits 3,785 300 Purchased services 16,700 400 Supplies and materials 1,303 35,377 Total instructional staff services 35,377 230 General administrative services 233 School administration 100 Salaries 79,884 200 Employee benefits 26,970 106,854 Total general administrative services 106,854 62
Schedule A-3 - EIA Combined Schedule of Revenues, Expenditures and Changes in Fund Balance, Continued For the year ended June 30, 2017 200 SUPPORTING SERVICES, Continued 270 Support services - pupil activity 271 Pupil service activities 300 Purchased services 43 Total support services - pupil activity 43 Total support services 161,061 400 OTHER CHARGES 410 Intergovernmental expenditures 411 Payments to South Carolina Department of Education Total 720 Transits 1,165 Total other charges 1,165 Total expenditures 608,603 OTHER FINANCING SOURCES (USES) Interfund transfers from (to) other funds 5210 Transfer from general fund 10,435 420-710 Transfer to general fund (358,182) Total interfund transfers from (to) other funds (347,747) Excess of revenues over expenditures and other financing uses - Fund balance, beginning of year Fund balance, end of year $ - - 63
Schedule A-4 - EIA Summary Schedule by Program For the year ended June 30, 2017 Transfers Unearned Revenues Expenditures In/(Out) Revenue 3500 Education Improvement Act 3502 ADEPT $ - $ - $ - $ 1,367 3505 Technology support - - - 189 3511 Professional development 10,540 14,881 4,341 7,254 3512 Technology professional development 5,799 5,799-2,939 3518 Formative assessment - - - 7,428 3519 Grade 10 assessments - - - 1,755 3525 Vocational education equipment 18,766 18,766-49,638 3526 Teacher specialists 23 23-21,981 3532 National board certification salary supplement 56,043 56,043-281 3533 Teacher of the year awards 1,077 1,338 261-3538 Students at risk of school failure 170,849 176,365 5,516 20,978 3541 Childhood development education program (CDEP) 158,134 158,134-10,007 3550 Teacher salary increase 312,629 - (312,629) - 3555 School employer contributions 45,553 - (45,553) - 3558 Reading 8,265 8,265-4,350 3577 Teacher supplies 31,075 31,075 - - 3578 High schools that work 5,064 5,064-10,379 3587 IDEA MOE Tier 1 12,754 12,754-48,468 3592 School to work transition act 3,753 3,753-1,241 3594 EEDA supplemental programs 86,350 86,350-23,258 3595 EEDA Supplies and Materials - - - 5,453 3597 Aid to districts 29,676 29,993 317 - Total $ 956,350 $ 608,603 $ (347,747) $ 216,966 64
Schedule B - Capital Projects Fund Schedule of Revenues, Expenditures and Changes in Fund Balance For the year ended June 30, 2017 Revenues 1000 Revenue from local sources 1500 Earnings on investments 1510 Interest on investments $ 5 Total local sources 5 Total revenue all sources 5 Expenditures 200 Support Services 250 Finance and operations 252 Fiscal services 300 Purchased services 17,646 Total fiscal services 17,646 Excess of expenditures over revenues (17,641) Fund balance, beginning of year 11,875 Fund balance (deficit), end of year $ (5,766) 65
Schedule C - Debt Retirement Fund Schedule of Revenues, Expenditures and Changes in Fund Balance For the year ended June 30, 2017 Revenues 1000 Revenue from local sources 1200 Revenues from local governmental units other than LEA's 1210 Ad valorem taxes, including delinquent taxes $ 759,080 1240 Penalties and interest on taxes 5,156 1280 Revenue in Lieu of Taxes (Dependent and Independent) 694,497 1290 Other taxes (dependent) 599,891 1500 Earnings on investments 1510 Interest on investments 1,366 Total local sources 2,059,990 3000 Revenue from state sources 3800 State revenue in lieu of taxes 3820 Homestead exemption 48,792 3840 Manufacturer's depreciation reimbursement 191,725 3890 Other state tax revenues 8,751 Total state sources 249,268 Total revenue all sources 2,309,258 Expenditures 500 Debt service 610 Redemption of principal 1,660,000 620 Interest 890,452 Total expenditures 2,550,452 Excess of expenditures over revenues (241,194) Fund balance, beginning of year 3,033,204 Fund balance, end of year $ 2,792,010 66
Schedule D - Food Service Fund Schedule of Revenues, Expenditures and Changes in Net Position For the year ended June 30, 2017 Revenues 1000 Revenue from local sources 1600 Food service 1610 Lunch sales to pupils $ 150,668 1620 Breakfast sales to pupils 12,857 1630 Special sales to pupils 23,250 1640 Lunch sales to adults 18,331 1650 Breakfast sales to adults 290 1660 Special sales to adults 7,655 1900 Other revenue from local sources 1999 Revenue from other local sources 288 Total local sources 213,339 3000 Revenue from state sources 3140 School lunch 3142 Program aid 90 Total state sources 90 4000 Revenue from federal sources 4800 USDA reimbursements 4810 School lunch and after school snacks program 408,903 4830 School breakfast program 112,691 4900 Other federal sources 4991 USDA commodities 3,444 Total federal sources 525,038 Total revenue all sources 738,467 Expenditures 256 Food service 100 Salaries 301,751 200 Employee benefits 202,157 300 Purchased services 24,010 400 Supplies and materials 300,835 500 Capital outlay 3,045 600 Other objects 1,897 Total expenditures 833,695 Excess of expenditures over revenues (95,228) Net position, beginning of year (351,363) Restatement, see note IV. G. 44,323 Net position, beginning of year, as restated (307,040) Net position, end of year $ (402,268) This schedule is presented in the format prescribed by the South Carolina Department of Education. 67
Schedule E - Agency Fund - Student Activities Schedule of Receipts, Disbursements and Changes in Due to Student Organizations For the year ended June 30, 2017 Receipts 1000 Revenues from local sources 1700 Pupil activities 1790 Other $ 533,540 Total revenues 533,540 Disbursements 270 Supporting services - Pupil activity 273 Trust and agency activities 660 Enterprise activities 471,003 Excess of receipts over disbursements 62,537 Due to student organizations, beginning of year 236,221 Due to student organizations, end of year $ 298,758 This schedule is presented in the format prescribed by the South Carolina Department of Education. 68
Schedule F - Detailed Schedule of Due to State Department of Education/Federal Government June 30, 2017 Program Grant or Project Revenue Amount Number and FY code Description due Status CATE equipment 15 EIA/16 EIA 3525/325 Unspent Funds $ 29,950.00 Unpaid Work-Based learning 16 EIA 3592/392 Unspent Funds $ 741.00 Unpaid EEDA - Supplies and materials 16 EIA 3595/395 Unspent Funds $ 1,754.00 Unpaid National Board Salary Supplement 17 EIA 3532/332 Unspent Funds $ 615.08 Unpaid Teacher supplies 17 EIA 3577/377 Unspent Funds $ 550.00 Unpaid 69
Schedule G - Location Reconciliation Schedule June 30, 2017 00/01 Administration/District Wide Totals: Non-Schools Central $ 5,071,769 28 Ninety Six Primary School Totals: Schools School 3,035,999 27 Ninety Six Elementary School Totals: Schools School 2,782,861 26 Edgewood Middle School Totals: Schools School 2,774,659 25 Ninety Six High School Totals: Schools School 4,313,950 29 Maintenance Shop Totals: Non-Schools Central 2,238 30 Adult Education Totals: Non-Schools Central $ 99,875 18,081,351 General Fund $ 12,218,437 Special Revenue Fund 1,381,515 Special Revenue EIA Fund 608,603 Debt Service Fund 2,550,452 Capital Projects Fund 17,646 Proprietary Fund 833,695 Trust and Agency Fund $ 471,003 18,081,351 70
Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Board of Trustees Greenwood County School District Number 52 Ninety Six, South Carolina We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in the Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the businesstype activities, each major fund and the aggregate remaining fund information of Greenwood County School District Number 52 (the District) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the District s basic financial statements, and have issued our report thereon dated November 28, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the District s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District s internal control. Accordingly, we do not express an opinion on the effectiveness of the District s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be a material weakness. However, material weaknesses may exist that have not been identified. 71 www.manleygarvin.com
Compliance and Other Matters As part of obtaining reasonable assurance about whether the District 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. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Greenwood, South Carolina November 28, 2017 72
Independent Auditor s Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance; Required by the Uniform Guidance Board of Trustees Greenwood County School District Number 52 Greenwood, South Carolina Report on Compliance for Each Major Federal Program We have audited Greenwood County School District Number 52 s (the District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the District s major federal programs for the year ended June 30, 2017. The District s major federal programs are 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. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of the District s major federal programs 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 the District 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 the District s compliance. Opinion on Each Major Federal Program In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017. 73 www.manleygarvin.com