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DALLASTOWN AREA SCHOOL DISTRICT
FINANCIAL REPORT
JUNE 30, 2013
CONTENTS
INDEPENDENT AUDITOR’S REPORT 1 - 3
Management’s Discussion and Analysis 4 - 32
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 33
Statement of Activities 34
Fund Financial Statements:
Balance Sheet - Governmental Funds 35
Reconciliation of the Governmental Funds Balance
Sheet to the Statement of Net Position 36
Statement of Revenues, Expenditures and Changes
in Fund Balances - Governmental Funds 37
Reconciliation of the Governmental Funds
Statement of Revenues, Expenditures and Changes
in Fund Balances to the Statement of Activities 38
Statement of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual -
General Fund 39
Statement of Net Position - Proprietary
Fund - Food Service 40
Statement of Revenues, Expenses and Changes in
Net Position - Proprietary Fund - Food Service 41
Statement of Cash Flows - Proprietary
Fund - Food Service 42
Statement of Fiduciary Assets and Liabilities 43
Notes to Financial Statements 44 - 74
CONTENTS (Continued)
REQUIRED SUPPLEMENTARY INFORMATION
Required Supplementary Information - Other
Post-Employment Benefit Plan
75
SUPPLEMENTARY INFORMATION
General Fund
Schedules of Revenues and Other Financing Sources -
Budget to Actual 76 - 77
Schedules of Expenditures and Other Financing Uses -
Budget to Actual 78 - 81
Statement of Changes in Assets and Liabilities -
Fiduciary Fund - Student Activities Agency Fund 82
Independent Auditor’s Report on Internal Control over
Financial Reporting and on Compliance and Other
Matters Based on an Audit of the Financial Statements
Performed in Accordance with Government Auditing
Standards 83 - 84
Independent Auditor’s Report on Compliance for Each
Major Federal Program and Report on Internal Control
Over Compliance as Required by OMB Circular A-133 85 - 86
Schedule of Findings and Questioned Costs 87 - 88
Schedule of Expenditures of Federal Awards 89 - 92
Notes to Schedule of Expenditures of Federal Awards 93
Summary Schedule of Prior Year’s Audit Findings 94
INDEPENDENT AUDITOR'S REPORT
Board of School Directors
Dallastown Area School District
Dallastown, Pennsylvania
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 the Dallastown Area School
District, as of and for the year ended June 30, 2013, 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 the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
2
Opinions
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 Dallastown Area School District, as of June 30,
2013, 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.
Emphasis of Matter
As described in Note 1, Dallastown Area School District has implemented a reporting model to account
for deferred inflows of resources, deferred outflows of resources, and net position as required by the
provisions of the Governmental Accounting Standards Board (“GASB”) Statement 63, Financial
Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and
GASB 65, Items Previously Recognized as Assets and Liabilities, as of July 1, 2012. Our opinions on
these statements are 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 on pages 4 through 32 and the required supplementary information as listed in
the table of contents, be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board who considers it to be an essential part of financial reporting for placing the basic
financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the Dallastown Area School District’s basic financial statements. The Schedules of Revenues
and Other Financing Sources - Budget to Actual, Schedules of Expenditures and Other Financing Uses
Budget to Actual, and the Statement of Changes in Assets and Liabilities - Fiduciary Fund - Student
Activities Agency Fund, listed in the table of contents as Supplementary Information are presented for
purposes of additional analysis and are not required parts of the basic financial statements. The
accompanying Schedule of Expenditures of Federal Awards, as required by the U.S. Office of
Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, is presented for purposes of additional analysis and is not a required part of the basic
financial statements.
3
Such supplementary 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 information is fairly
stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated November 12,
2013 on our consideration of the Dallastown Area School 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 to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on internal control over financial reporting or on compliance. That report is an integral part of
an audit performed in accordance with Government Auditing Standards in considering Dallastown Area
School District’s internal control over financial reporting and compliance.
Camp Hill, Pennsylvania
November 12, 2013
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
4
The Dallastown Area School District’s discussion and analysis provides an overview of the District’s
financial performance for fiscal years ended on June 30, 2012 and June 30, 2013. The intent of the
Management Discussion and Analysis (MDA) is to look at the District’s financial performance as a
whole. Please read it in conjunction with the District’s financial statements and notes to the financial
statements, which immediately follow this section.
The MDA is a component of the new reporting model prescribed by the Governmental Accounting
Standards Board (GASB) Statement No. 34 - Basic Financial Statements - and Management’s Discussion
and Analysis - for State and Local Governments issued in June 1999.
The Dallastown Area School District adopted GASB Statement No. 34 for fiscal year ended 2003 and
GASB Statement No. 54 - Fund Balance Reporting and Governmental Fund Type Definitions for fiscal
year ended 2011.
The Dallastown Area School District also adopted GASB Statement No. 63 - Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position and GASB Statement
No. 65 - Items Previously Reported as Assets and Liabilities for fiscal year ended 2013.
FINANCIAL HIGHLIGHTS
For fiscal year ended 2013, the Board of School Directors adopted a balanced General Fund budget with
the utilization of $1.045 million of fund balance. The millage rate remained the same for 2013 as it was
for 2011 and 2012, which is 22.26. The actual results of operation showed that actual expenditures were
approximately 2% less than budget and that actual revenues were approximately 1% less than budget.
At June 30, 2013, the Governmental Activities total net position was $52.162 million of which $10.356
million was unrestricted and available to meet the District’s ongoing obligations to employees and
creditors. This amount indicates that the District has a strong financial condition.
The Governmental Activities total net position increased $1.075 million from $51.087 million in 2012 to
$52.162 million in 2013. Refer to the section Financial Analysis of the District as a Whole for
explanations regarding the net position increase.
At June 30, 2013, the total fund balance for the General Fund was $13.017 million. Of the $13.017
million, $41 thousand was allocated as nonspendable due to it representing the amount of prepaid
expenses on the balance sheet. The prepaid expenses are comprised of dental health-insurance premiums
paid in advance.
Total funds in the amount of $4.642 million were committed as health insurance and PSERS reserves and
$63 thousand was committed for various high school projects. $893 thousand was assigned for 2013-
2014 budget utilization to assist in eliminating the need for a millage increase and $49 thousand was
assigned for athletic fund activities. The remaining $7.329 million is unassigned and represents 8% of the
General Fund budget for the year ended 2014.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
5
USING THE ANNUAL FINANCIAL REPORT
This annual report consists of three parts - management’s discussion and analysis, the basic financial
statements, and the required supplementary information. The basic financial statements include two kinds
of statements that present different perspectives of the District:
The first two basic financial statements are government-wide financial statements that provide both short-
term and long-term information about the District’s overall financial status.
The remaining basic financial 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 statements tell how general 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 that the District operates like a business. For Dallastown, this is the Food Service
Fund. Fiduciary fund statements provide information about financial relationships where the District acts
solely as the trustee or agent for the benefit of others such as the Middle School and High School Student
Activities Funds.
The financial statements also include notes that explain certain data in the statements and provide more
comprehensive information.
Figure A-1 shows how the required parts of the Financial Section are arranged and relate to one another:
Figure A-1
Required Compenents of Dallastown Area School District's Financial Report
Governmental-Wide
Financial
Statements
Fund
Financial
Statements
Notes to
Financial
Statements
Management's
Discussion and
Analysis
Basic
Financial
Statements
Required
Supplementary
Information
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
6
Figure A-2 summarizes the major features of the District’s financial statements. The remainder of this
overview section of the management’s discussion and analysis highlights the structure and contents of
each statement.
Figure A-2
Major Features of
Dallastown Area School District’s
Government-wide and Fund Financial Statements
Government-wide Statements
Fund Financial Statements Governmental Funds Proprietary Funds Fiduciary Funds
Scope Entire District (except fiduciary funds)
Activities of the District that are not proprietary or fiduciary, such as general operating and capital projects.
Activities the District operates similar to private businesses, such as food service.
Instances in which the District is the trustee or agent to someone else's resources - Student Activity Funds.
Required Financial Statements
• Statement of net position • Statement of activities
• Balance sheet • Statement of revenues, expenditures, and changes in fund balances
• Statement of net position • Statement of revenues, expenditures, and changes in net position • Statement of cash flows
• Statement of fiduciary net position • Statement of changes in fiduciary net position
Accounting Basis & Measurement Focus
Accrual accounting and economic resources focus.
Modified accrual accounting and current financial focus.
Accrual accounting and economic resources focus.
Accrual accounting and economic resources focus.
Types of assets/liability information
All assets and liabilities, both financial and capital, and short-term and long-term.
Generally assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets or long-term liabilities included.
All assets and liabilities, both financial and capital, and short-term and long-term.
All assets and liabilities, both short-term and long-term.
Types of inflow/outflow information
All revenues and expenses during year, regardless of when cash is received or paid.
Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter.
All revenues and expenses during year, regardless of when cash is received or paid.
All revenues and expenses during year, regardless of when cash is received or paid.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
7
OVERVIEW OF THE FINANCIAL STATEMENTS
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 District’s assets, deferred outflows and inflows, and liabilities, with the difference reported as net
position, portions of which are restricted in accordance with other commitments. Net position is
considered one way to measure the District’s financial health. The Statement of Activities accounts for
all of the current year’s revenues and expenses, regardless of when cash is received or paid.
Over time, increases or decreases in the District’s net position are indicators of whether the District’s
financial position is improving or deteriorating, respectively.
To assess the overall financial condition of the District, non-financial factors, such as changes in the
District’s property tax base and conditions of school buildings and other facilities, should be
considered.
In the government-wide financial statements, the District’s activities are divided into two categories:
Governmental activities: Most of the District’s basic services; such as regular, special and adult
education, transportation, administration, and community services; are included here. Property taxes
and state subsidies finance most of the activities that occur in the General Fund.
Business-type activities: The District charges fees to help it cover the costs of the District’s food-
service program.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
8
Fund Financial Statements
The fund financial statements provide more detailed information about the District’s funds, not the
District as a whole. Funds are accounting devices the District uses to keep track of specific sources of
funding and spending on particular programs.
Some funds are required by state law and by bond covenants. The District established other funds to
control and manage money for particular purposes (like repaying its long-term debt) or to show that it is
properly using certain revenues (like Federal grants).
The District has three types of funds:
Governmental funds: Most of the District’s basic services are included in governmental funds, which
generally focus on (1) how cash and other financial assets can be readily converted to cash flow in and
out and (2) the balances left at year-end which are available for spending. Consequently, the
governmental-funds statements provide a detailed, short-term view that helps the reader 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 reconciliations of the governmental funds and
government-wide statements that explain the relationships (or differences) between them.
Proprietary funds: These funds are used to account for the District’s activities that are similar to
business operations in the private sector. When the District charges fees for services provided to
customers, the services are usually reported in proprietary funds. The Food Service Fund is the
District’s proprietary fund and is the same as the business-type activities reported in the government-
wide statements.
Fiduciary funds: The District is the trustee, or fiduciary, for assets that belong to others, such as the
Student Activities Agency Funds. The District is responsible for ensuring that those to whom the
assets belong use them only for their intended purposes. The District excludes these activities from the
government-wide financial statements because they cannot use these assets to finance its operations.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
9
FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE
The District’s total net position was $52.189 million at fiscal year ended 2013, which includes $52.162
million in Governmental Activities and $27 thousand in Business-Type Activities, an increase of $1.047
million or 2% over fiscal year ended 2012.
Figure A-3
Fiscal Years Ended June 30, 2013 and June 30, 2012
Net Position
6/30/2013 6/30/2012 6/30/2013 6/30/2012 6/30/2013 6/30/2012
Total assets 146,815,755$ 151,679,742$ 272,098$ 543,573$ 147,087,853$ 152,223,315$
Total deferred outflows of
resources 111,365$ $ - -$ -$ 111,365$ -$
Total liabilities 94,764,989$ 100,592,459$ 245,390$ 489,421$ 95,010,379$ 101,081,880$
Net investment in capital assets 40,588,455$ 40,579,133$ 235,870$ 280,224$ 40,824,325$ 40,859,357$
Restricted 1,217,782 1,104,467 - - 1,217,782 1,104,467
Unrestricted 10,355,894 9,403,683 (209,162) (226,072) 10,146,732 9,177,611 Total net position 52,162,131$ 51,087,283$ 26,708$ 54,152$ 52,188,839$ 51,141,435$
Governmental Activities Business-Type Activities Total Schol District
During fiscal year ended 2013, total assets decreased 3% or $5.135 million over fiscal year ended 2012. The
majority of the decrease in assets is reflected in a 3% reduction of the value of the capital assets. During
fiscal year ended 2013, approximately $1.038 million in technology assets were removed from inventory due
to obsolescence. This, coupled with adding $5.134 million in depreciation expense but only adding $1.114
million additional in capital assets lead to the overall decrease.
The three largest current assets are cash and investments representing 14% of the total assets, property taxes
receivable which is 1% and state subsidy receivable which is slightly less than 1%.
Capital assets, which consist of the District’s land, buildings, building improvements, furniture and
equipment, and construction-in-progress, represent 84% of the total assets in fiscal years ended 2013 and
2012.
Deferred Outflows of Resources was added for fiscal year ended 2013 due to the implementation of GASB
Statement No. 63 and GASB Statement No. 65. The Deferred Outflows of Resources represents deferred
amounts on refunding debt.
On the other side of the balance sheet, liabilities decreased 6% over fiscal year ended 2012.
The decrease in liabilities is primarily due to $5.735 million in debt service principal payments made on the
general obligation bonds and notes, as well as, a 29% decrease in the pay-fixed, interest-rate swap liability
offset by a 105% increase in the other post-employment benefits (OPEB) obligation.
Refer to Footnote 8 for details regarding the principal payments made on the bonds and notes during fiscal
year ended 2013.
The results of this year’s operations as a whole are reported in the Statement of Activities. All expenses are
reported in the first column. Specific charges, grants, revenues and subsidies that directly relate to specific
expense categories are presented to determine the final amounts of the District’s activities that are supported
by other general revenues. The two largest general revenues are the local taxes assessed to community
taxpayers and the basic education subsidy provided by the State of Pennsylvania.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
10
Figure A-4 takes the information from that statement and rearranges it slightly in an effort to show the reader the
District’s total revenues and expenses for the year.
Figure A-4
Fiscal Years Ended June 30, 2013 and June 30, 2012
Changes in Net Position
6/30/2013 6/30/2012 6/30/2013 6/30/2012 6/30/2013 6/30/2012
Revenues
Program revenues
Charges for services 359,494$ 355,575$ 1,549,957$ 1,663,058$ 1,909,451$ 2,018,633$
Operating grants and contributions 11,075,266 10,101,620 1,092,514 934,390 12,167,780 11,036,010
General revenues
Property taxes 61,242,397 60,848,750 - - 61,242,397 60,848,750
Other taxes 5,882,759 5,832,754 - - 5,882,759 5,832,754
Grants, subsidies and contributions
not restricted 9,268,267 9,264,089 - - 9,268,267 9,264,089
Investment earnings 102,783 203,583 256 181 103,039 203,764
Transfers (39,773) (162,648) 39,773 162,648 - -
Miscellaneous income 233,688 206,256 (399) - 233,289 206,256
Total revenues 88,124,881 86,649,979 2,682,101 2,760,277 90,806,982 89,410,256
Expenses
Instruction 60,420,941 58,420,619 - - 60,420,941 58,420,619
Instructional student support 6,254,902 6,032,681 - - 6,254,902 6,032,681
Administrative and financial support 7,218,314 6,848,520 - - 7,218,314 6,848,520
Operation and maintenance of plant 6,273,616 6,432,257 - - 6,273,616 6,432,257
Pupil transportation 3,959,551 3,782,620 - - 3,959,551 3,782,620
Student activities 1,686,768 1,677,635 - - 1,686,768 1,677,635
Community services 91,468 87,496 - - 91,468 87,496
Interest on long-term debt 816,534 2,115,132 - - 816,534 2,115,132
Food service - - 2,709,545 2,749,087 2,709,545 2,749,087
Total expenses 86,722,094 85,396,960 2,709,545 2,749,087 89,431,639 88,146,047
Increase (decrease) in net position 1,402,787 1,253,019 (27,444) 11,190 1,375,343 1,264,209
Net position - beginning 51,087,283 49,834,264 54,152 42,962 51,141,435 49,877,226
Prior period adjustment (327,939) - - - (327,939) -
Net position - beginning as restated 50,759,344 49,834,264 54,152 42,962 50,813,496 49,877,226
Net position - ending 52,162,131$ 51,087,283$ 26,708$ 54,152$ 52,188,839$ 51,141,435$
Governmental Activities Business-Type Activities District Total
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
11
The majority of the $1.475 million or 2% increase in governmental revenues from fiscal year ended 2012
to fiscal year ended 2013 was due to a 10% increase or $974 thousand in operating grants and
contributions as well as an increase of $394 thousand in property taxes.
The $1.475 million or 2% increase was primarily driven by the following:
An increase of $772 thousand or 1% in regular and interim taxes offset by a decrease of $378
thousand or 24% in delinquent tax collections and deferrals. The increase in regular and interim
taxes is due to a small increase in the collectible tax base and a new Wellspan property. The
decrease in delinquent tax collections and deferrals is due to more timely payments of taxes.
An increase of $739 thousand in the state share of retirement contributions which is due to the
43% increase in the rate. The rates for fiscal years ended 2013 and 2012, were 12.36% and
8.65%, respectively.
An increase of $207 thousand in rental and sinking-fund reimbursements due to timings of
approvals for reimbursement.
The majority of the $1.325 million or 2% increase in governmental expenses from fiscal year ended 2012
to 2013 can be attributed to an increase of $2 million in instruction, $222 thousand in instructional student
support and $370 thousand in administration and financial services offset by a decrease of $1.299 million
in interest on long-term debt.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
12
Figure A-5 below presents the expenses of both the Governmental Activities and the Business-type
Activities of the District. Figure A-5 shows the District’s eight largest functions - instruction,
instructional student support, administrative and financial support, operation and maintenance of plant,
pupil transportation, student activities, community services and interest on long-term debt as well as each
program’s net cost (total cost less revenues generated by the activities). This table also shows the net
costs offset by the other unrestricted grants, subsidies and contributions to show the remaining financial
needs supported by local taxes and other miscellaneous revenues.
Figure A-5
Fiscal Years Ended June 30, 2013 and June 30, 2012
Governmental Activities
Total Cost of
Services
Net Cost of
Services
Total Cost of
Services
Net Cost of
Services
Functions/Programs
Instruction 60,420,941$ 52,476,073$ 58,420,619$ 52,177,954$
Instructional student support 6,254,902 5,657,332 6,032,681 4,430,487
Administrative and financial support 7,218,314 6,870,946 6,848,520 6,573,321
Operation and maintenance of plant 6,273,616 6,019,268 6,432,257 6,213,582
Pupil transportation 3,959,551 2,745,819 3,782,620 2,594,656
Student activities 1,686,768 1,522,212 1,677,635 1,449,799
Community services 91,468 37,228 87,496 36,117
Interest on long-term debt 816,534 (41,544) 2,115,132 1,463,849
Total Governmental Activities 86,722,094$ 75,287,334$ 85,396,960$ 74,939,765$
Less:
Unrestricted grants, subsidies 9,268,267 9,264,089
Total Needs from Local
Taxes and Other Revenues 66,019,067$ 65,675,676$
2013 2012
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
13
Figure A-6 reflects the activities of the Food Service Fund, the only business-type activity of the District.
Figure A-6
Fiscal Years Ended June 30, 2013 and June 30, 2012
Business-Type Activities
Total Cost of
Services
Net Cost of
Services
Total Cost of
Services
Net Cost of
Services
Functions/Programs
Food Service 2,709,545$ (67,074)$ 2,749,087$ (151,639)$
Less:
Investment Earnings, Transfers,
and Miscellaneous Income 39,630 162,829
Total Business Type Activities (27,444)$ 11,190$
2013 2012
Revenues of the District’s business-type activities (food and nutrition services) were comprised of
charges for services, Federal and state reimbursements and investment earnings.
Business-type expenses exceeded revenues by $27 thousand in fiscal year ended 2013 and for 2012
business-type revenues exceeded expenses by $11 thousand. During fiscal year ended 2013, operating
expenses decreased $40 thousand or 1% over 2012, and revenues decreased $78 thousand or 3% over
2012. The student-lunch prices increased 10 cents, and the adult-lunch prices increased 15 cents for fiscal
year ended 2013 with no increase in the cost of school-breakfast prices.
The drop in revenue is primarily due to a $125 thousand or 14% decrease in National School Lunch
Program (NSLP) sales and a $123 thousand or 76% decrease in transfers from the General Fund for
unemployment-compensation reimbursement. The unemployment-compensation costs were due to the
outsourcing of the food-service program which started with fiscal year ended 2012.
The reductions in revenue were offset by a $124 thousand increase in Federal subsidies received for the
National School Lunch and Breakfast Programs, as well as an increase of $48 thousand in donated-
commodities usage.
Revenue for charges for services was $1.550 million and $1.663 million in fiscal years ended 2013 and
2012, respectively. This revenue is the amount paid by students and District personnel for daily food
service, including breakfast, lunch, beverages, a la carte purchases and catering services. Charges
represent 58% and 60% of total revenue, respectively.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
14
Federal reimbursement for meals, including payment for free and reduced lunches, was $875 thousand
and $751 thousand for the fiscal years ended 2013 and 2012, respectively. 2013 and 2012 state
reimbursements for meals, including payment for free and reduced lunches, were $85 thousand and $99
thousand, respectively. Federal reimbursements for meals increased $124 thousand over fiscal year 2012
while state reimbursements decreased $14 thousand.
The 16% increase in Federal subsidy reimbursement is due to the following factors:
9-cent increase in reimbursement for free and reduced lunches
1-cent increase in reimbursement for paid lunches
An additional 6 cents per meal for the Federal Meal Pattern Incentive Reimbursement Rate
Program starting in October 2013
4-cent increase in reimbursement for free and reduced breakfasts
The decrease in state reimbursement is tied directly to the decrease in the number of meals served. Refer
to the paragraph below for the information regarding the number of meals served.
During fiscal year ended 2013, the District served 564,864 National School Lunch Program (NSLP)
meals, which is a 9% decrease over the 620,376 NSLP meals served during fiscal year ended 2012. Of
the meals served in 2013, 32% were free meals, 6% were at reduced prices and 62% were paid at full
price.
The District also served 142,795 National School Breakfast Program (NSBP) meals, which is a 10%
increase from the 129,901 NSBP meals served during 2012. Of the meals served in 2013, 57% were free
meals, 7% were at reduced prices and 36% were paid at full price.
The decrease of $40 thousand in operating expenses is primarily due to a drop of $123 thousand in
unemployment-compensation expense which is directly related to a reduction in the District’s
unemployment liability. This decrease was offset by an increase in donated commodities usage of $48
thousand, as well as, an increase of $48 thousand in the cost of custodial services charged-back from the
General Fund. During the first year of outsourcing, the District received a credit of $50 thousand towards
custodial services.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
15
FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS
Governmental Funds
The focus of the District’s governmental funds is to provide information on relatively short-term cash
flow and future basic services. Such information is useful in assessing the Dallastown Area School
District’s financing requirements. In particular, fund balance may serve as a useful measure of a
government’s net resources available for spending at the end of the year.
As of June 30, 2013, the District’s governmental funds reported a combined fund balance of $15.603
million, which is a decrease of $422 thousand over fiscal year ended 2012. Refer to Figure A-7 for a
breakdown of governmental fund balances and the total change from fiscal year ended 2012 to 2013.
The majority of the overall, total fund balance increase lies in the increases of the committed and
restricted categories offset by the large decrease in assigned.
Figure A-7
Fiscal Years Ended June 30, 2013 and June 30, 2012
Fund Balances
2013 2012 $ Change % Change
General Fund:
Nonspendable 40,811 $ 673,760 $ (632,949) $ -94%
Committed 4,705,075 4,380,684 324,391 7%
Assigned 942,868 1,102,213 (159,345) -14%
Unassigned 7,328,576 7,201,135 127,441 2%
Capital Projects Fund:
Restricted 2,562,241 2,667,397 (105,156) -4%
Committed 23,459 - 23,459 100%
Total 15,603,030 $ 16,025,189 $ (422,159) $ -3%
The General Fund is the main operating fund of the Dallastown Area School District. For fiscal year
ended 2013, the fund balance of the General Fund was $13.017 million as compared to $13.358 million
for fiscal year ended 2012, an increase of $341 thousand or 3%.
The General Fund balance of $13.017 million is comprised of $41 thousand in nonspendable funds,
$4.705 million in committed, $943 thousand in assigned and $7.329 million in unassigned. For planning
purposes, the Board set aside part of the District’s fund balance for future uses. During fiscal year ended
2013, the Board of School Directors committed $1 million for health-insurance reserves, $3.642 million
to assist with the expected future PSERS rate increase and $63 thousand for various High School projects.
The Board of School Directors also assigned $893 thousand to be utilized to balance the budget for fiscal
year ended 2014.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
16
Overall revenues in the General Fund were $88.230 million and $86.671 million in fiscal years ended 2013 and
2012, respectively. Revenues increased $1.559 million or 2% over last year. Refer to Figure A-8 below for
classifications of General Fund revenues.
Figure A-8
Fiscal Years Ended June 30, 2013 and June 30, 2012
Comparison of General Fund Revenues
2013 2012 $ Change % Change
Local Revenues 69,142,666$ 68,572,849$ 569,817$ 0.83%
State Revenues 18,459,422 17,525,602 933,820 5.33%
Federal Revenues 620,331 561,852 58,479 10.41%
Other Financing Sources 7,537 10,968 (3,431) -31.28%
88,229,956$ 86,671,271$ 1,558,685$ 1.80%
The majority of the 2% rise in revenues from fiscal year ended 2012 to 2013 can be credited to the following:
Local revenues:
An increase of $280 thousand or less than 1% growth in regular real estate tax revenue which is primarily
due to a small increase in property assessments, as well as a 7% decrease in the tax rebate refunds.
An increase of $492 thousand in interim real estate taxes, from $267 thousand in fiscal year ended 2012 to
$759 thousand in fiscal year ended 2013. The majority of the increase was due to one Wellspan-property
addition of $425 thousand.
The increases were offset by a decrease of $108 thousand in interest on investments which is due to lower
interest rates.
State revenues:
An increase of $739 thousand in state share of retirement contributions which is due to the 43% increase
in the rate. The rates for fiscal years ended 2013 and 2012 were 12.36% and 8.65%, respectively.
An increase of $207 thousand in rental and sinking-fund payments due to timings of reimbursement
approvals. For fiscal year ended 2012, the District only received payments for the G.O. Bonds, Series
2011A, whereas, during fiscal year ended 2013, the District received payments for G.O. Bonds, Series
2011A, 2011AA and 2012.
Federal revenues:
A growth of $91 thousand in Title I receipts due to a 23% increase in funding for Title I.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
17
Figure A-9 below details the percentage of each revenue category that the General Fund receives. The largest
source of revenue is real estate tax which is 87% of local sources and 68% of total revenue.
78.37%
20.92%
0.70% 0.01%
Figure A-9
2012-2013 General Fund Revenues
Local Revenues
State Revenues
Federal Revenues
Other Financing Sources
Total expenditures from the General fund were $88.570 million and $86.664 million in fiscal years ended 2013 and
2012, respectively. Expenditures increased $1.906 million or 2% from last year.
Refer to Figure A-10 below for classifications of expenses by program type and the change from 2012.
Figure A-10
Fiscal Years Ended June 30, 2013 and June 30, 2012
Comparison of General Fund Expenditures
2013 2012 $ Change % Change
Current:
Instructional 56,475,314$ 54,538,394$ 1,936,920$ 3.55%
Support Services 22,483,136 21,749,902 733,234 3.37%
Operation of noninstructional services 1,662,342 1,672,221 (9,879) -0.59%
Refunds of prior year's receipts 9,846 78,019 (68,173) -87.38%
Debt Service 7,520,007 7,845,604 (325,597) -4.15%
Other Financing Uses 419,773 779,825 (360,052) -46.17%
88,570,418$ 86,663,965$ 1,906,453$ 2.20%
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
18
Figure A-11 displays a comparison of expenditures by major object.
Figure A-11
Fiscal Years Ended June 30, 2013 and June 30, 2012
Comparison of General Fund Expenditures by Major Object
2013 2012 $ Change % Change
100 Salaries 45,075,802 $ 45,527,963 $ (452,161) $ -0.99%
200 Benefits 17,053,982 14,966,404 2,087,578 13.95%
300
Purchased Prof. & Tech
Services 4,072,237 3,790,763 281,474 7.43%
400
Purchased Property
Services 1,672,744 1,901,432 (228,688) -12.03%
500 Other Purchased Services 8,668,875 8,179,995 488,880 5.98%
600 Supplies 3,067,601 2,761,351 306,250 11.09%
700 Equipment 904,736 704,072 200,664 28.50%
800 Other Objects 2,176,087 2,784,324 (608,237) -21.85%
900 Other Uses of Funds 5,878,354 6,047,661 (169,307) -2.80%
88,570,418 $ 86,663,965 $ 1,906,453 $ 2.20%
The majority of the 2% increase in expenditures from fiscal year ended 2012 to 2013 can be credited to:
An increase of $2.088 million in benefits which is due to:
o A growth of 41% or $1.605 million in retirement expenditures which is due to the rate increase.
The rates for fiscal years ended 2013 and 2012 were 12.36% and 8.65%, respectively.
o An increase of $672 thousand in medical insurance expense due to a 14% rate increase in PPO1
medical premiums and a 13% rate increase in PPO2 medical premiums.
A decrease of $229 thousand in purchased property services which is due to a 19% decrease, or $230
thousand, in the cost of electricity. This decrease was due to negotiating with a new electricity provider
which yielded a 7%-rate decrease starting in January 2013, as well as curtailing usage.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
19
A growth of $306 thousand in supplies and books due to:
o Procurement of $447 thousand in MyMath materials.
o An increase of $70 thousand in the cost of natural gas due to switching the morning warm-up of
the Intermediate School from electricity to natural gas.
o These increases were offset by a decrease of $285 thousand in supplies primarily due to:
A decrease of $107 thousand in regular instruction supplies due to cost cutting measures
employed by the building staff.
A decrease of $153 thousand in ARRA IDEA supplies due to the conclusion of the grant.
An increase of 28.5% or $201 thousand in equipment due to the purchase of technology infrastructure to
include a core switch and sixty Aruba switches. These purchases were funded by unanticipated E-rate
funds.
A decrease in other objects of $608 thousand or 22% due to:
o A decrease of $204 thousand in interest expense that is directly related to reclassification of the
debt-service payments made to the York County School of Technology. The expense was
reclassified out of debt-service to vocation education as suggested by the Comptroller’s Office.
o A decrease of 12%, or $125 thousand, in the interest paid on the swap obligations, which is tied to
the decrease in the notional amounts of the swaps.
o A reduction of $180 thousand, or 13%, in bond-interest expense due to more funds being set aside
in the Bond Sinking Fund during refinancing of the General Obligation Bonds, and the reduction
in total debt owed by the District. The Bond Sinking Fund incurred $94 thousand more in interest
expense for fiscal year ended 2013 as compared to fiscal year ended 2012, thus reducing the
burden of interest costs paid out by the General Fund.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
20
Figure A-12 displays the percentage make-up of each major object. Since the District is a service organization,
salaries and benefits comprise 70% of all expenditures.
51%
19%
5%
2%
10%
3%
1%2%
7%
Figure A-122012-2013
General Fund Expenses by Major Object
Salaries
Benefits
Purchased Prof. & Tech Services
Purchased Property Services
Other Purchased Services
Supplies
Equipment
Other Objects
Other Uses of Funds
The Capital Projects Fund had a total fund balance of $2.586 million for fiscal year ended 2013 and $2.667
million for fiscal year ended 2012, all of which is restricted for continuing costs related to capital projects as
approved by the Board of School Directors and costs related to the Intermediate School.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
21
Refer to Figures A-13 and A-14 for comparisons of the 2012 and 2013 balance sheets and statements of
revenues, expenses and changes in fund balances for the Capital Projects Fund.
Figure A-13
Fiscal Years Ended June 30, 2013 and June 30, 2012
Capital Projects Balance Sheet
6/30/2013 6/30/2012
Cash and Cash Equivalents 1,232,116 $ 1,108,497 $
Investments 1,551,894 1,844,896
Other Receivables 5,825 4 Total assets 2,789,835 $ 2,953,397 $
Accounts Payable 204,135 $ 286,000 $ Total liabilities 204,135 $ 286,000 $
Restricted Fund Balance 2,562,241 $ 2,667,397 $
Committed Fund Balance 23,459 - Net position 2,585,700 $ 2,667,397 $
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
22
Figure A-14
Fiscal Years Ended June 30, 2013 and June 30, 2012
6/30/2013 6/30/2012
Revenues
Local Sources 35,665 $ 4,789 $ Total revenues 35,665 $ 4,789 $
Expenditures
Current:
Instructional -$ -$
Support services 338,670 227,492
Capital outlay 310,537 646,409
Debt service 502,384 408,768 Total expenditures 1,151,591 $ 1,282,669 $
Other Financing Sources (Uses)
Transfers in (out) 380,000 $ 617,177 $
Capital contributions 18,366 -
Issuance of refunding bonds 67,900,000 72,865,000
Payment to refunded bond escrow agent (68,830,000) (72,865,000)
Premium 1,565,863 821,577
Total other financing sources 1,034,229 $ 1,438,754 $
Net changes in fund balances (81,697) 160,874
Fund Balances:
July 1, 2012 and 2011 2,667,397 2,506,523
June 30, 2013 and 2012 2,585,700 $ 2,667,397 $
Statement of Revenues, Expenses and Changes in Fund Balances - Capital Projects Fund
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
23
During fiscal year ended 2013, the District completed renovations of the Administration Offices, completed
the paving at Ore Valley Elementary, installed a replacement chiller at Ore Valley Elementary and started
the Middle School and High School Auditorium seating-replacement project.
During fiscal year ended 2014, the District plans to replace the speed-zone signs and repave the rear
playground at Loganville-Springfield Elementary, replace the water tower and chiller at York Township
Elementary, replace the HVAC controls at the Middle and High Schools and complete the replacement of
the auditorium seating that was started during fiscal year end 2013.
Refer to Figure A-15 for a status of the current capital projects as of the fiscal year ended 2013.
-
50,000
100,000
150,000
200,000
250,000
Ore Valley Chiller Administrative Offices Ore Valley Paving MS & HS Auditoruim Seating
Figure A-15Status of Major Capital Reserve Fund
Projects
2012-2013 cost
Total Project Cost as of June 30, 2013
Expected Cost
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
24
GENERAL FUND BUDGETARY HIGHLIGHTS
The Dallastown Area School District’s fiscal year ended 2013 original budget anticipated that expenses would
equal revenues, with a $1.045 million dollar utilization of fund balance. The actual results for the year were that
revenues were under budget by $739 thousand and expenses were less than budget by $1.444 million for a total
use of fund balance of $340 thousand.
Refer to Figure A-16 for a comparison of Budget to Actual by revenue source type.
Figure A-16
Fiscal Year Ended June 30, 2013
Comparison of General Fund Revenues - Budget to Actual
Budget Actual $ Change % Change
Local Revenues 68,908,234 $ 69,142,666 $ 234,432 $ 0.34%
State Revenues 18,966,943 18,459,422 (507,521) -2.75%
Federal Revenues 697,550 620,331 (77,219) -12.45%
Other Financing Sources 396,000 7,537 (388,463) 0.00%
88,968,727 $ 88,229,956 $ (738,771) $ -0.84%
In fiscal year ended 2013, total actual to budgeted revenues were $739 thousand less than expected primarily due
to the following:
State revenues:
$270 thousand less than expected of the Social Security and Medicare Subsidies, and $282 thousand less
of the Retirement Subsidy due to the timing of receipt of funds.
Federal revenues:
During fiscal year ended 2012, the District started the implementation process of applying for Access
Reimbursement and hopes to have it completed by the close of fiscal year ending 2014. This resulted in a
difference of $98 thousand in Federal revenues - budget to actual - offset by larger than anticipated
Federal grant awards.
During fiscal year ended 2013, the District did not receive the note premium through the General Fund on
the 2012 refinanced bonds. The money was set aside in the bond-sinking fund to be used to make debt
payments until the cash is gone. This resulted in a difference of $395 thousand in revenues - budget to
actual - in other financing sources. On the expenditure side, there is an equal savings for debt payments
that were paid out of the bond-sinking fund which netted the loss of revenue to zero.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
25
Refer to Figure A-17 for a comparison of Budget to Actual by major object.
Figure A-17
Comparison of General Fund Expenditures by Major Object - Original Budget to Actual
Budget Actual $ Change % Change
100 Salaries $45,472,900 45,075,802$ 397,098$ 0.87%
200 Benefits 17,326,900 17,053,982 272,918 1.58%
300
Purchased Prof. & Tech
Services 3,878,575 4,072,237 (193,662) -4.99%
400
Purchased Property
Services 2,085,750 1,672,744 413,006 19.80%
500 Other Purchased Services 7,827,449 8,668,875 (841,426) -10.75%
600 Supplies 3,071,900 3,067,601 4,299 0.14%
700 Equipment 621,050 904,736 (283,686) -45.68%
800 Other Objects 4,051,525 2,176,087 1,875,438 46.29%
900 Other Uses of Funds 5,678,150 5,878,354 (200,204) -3.53%
90,014,199$ 88,570,418$ 1,443,781$ 1.63%
Fiscal Year Ended June 30, 2013
The actual expenses were $1.444 million less than budgeted in fiscal year ended 2013 due to the following:
Within the purchased property services-budget category, the District saved $279 in electricity costs.
This decrease was due to negotiations with a new electricity provider that yielded a 7%-rate drop
starting in January 2013 and energy curtailment. There was also a savings of $105 thousand realized
in the leasing of copiers and printers.
Other purchased services were $841 thousand more than budgeted due to:
o $295 thousand more spent on transportation costs due to unanticipated costs for activity runs,
non-public runs and alternative education mid-day runs and an increased cost for diesel.
o $188 thousand more spent on charter and cyber school students. When budgeting for fiscal
year ended 2013, there were approximately 88 charter and cyber school students; however,
during the year, the District saw enrollment reach close to 100, lending to the 18% increase
over budget.
o Reclassifying the debt-service payments made to the York County School of Technology.
The expense was reclassified out of debt-service to vocational education as suggested by the
Comptroller’s Office and represents a total cost of $498 thousand. This reclassification was
slightly offset by the cost of students attending the York County School of Technology being
15% less than budgeted or $186 thousand.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
26
Equipment expense was $284 thousand more than budgeted largely due to purchasing technology
infrastructure in advance with additional e-rate funds.
Other objects were $1.875 million under budget due to:
o Savings of $1.167 million in bond-interest costs due to a favorable note rate, as well as $502
thousand of debt-interest payments being paid out of the bond-sinking fund.
o Reclassification of $178 thousand in budgeted debt service-interest payments for the York County
School of Technology as suggested by the Comptroller’s Office.
o $440 thousand due to reclassification of the tax rebate-incentive program. For budgeting
purposes, according to the Department of Education, the tax rebate-incentive program must be
budgeted as an expense, whereas the actual expense is properly recorded as negative revenue.
o Reclassifying of the $200 thousand budgetary reserve to ensure that the adjusted final budget
relative to actual results is positive by major function and major object.
The overage of $200 thousand in the Other Use of Funds category is primarily due to a Board-approved
Capital Reserve Fund transfer of $380 thousand and a $400 thousand accelerated bond-principal payment.
These expenses were offset by interest savings, as well as by a $337 thousand reduction in York County
School of Technology principal payments which were reclassified to vocational education.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
27
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
In fiscal years ended 2013 and 2012, the Dallastown Area School District invested $123.178 million and
$127.252 million (net of accumulated depreciation), respectively, in capital assets including land,
buildings and improvements, furniture and equipment and construction-in-progress. Refer to Figure A-18
for a comparison of fiscal years ended 2013 and 2012.
Figure A-18
Fiscal Years Ended June 30, 2013 and June 30, 2012
Capital Assets (net of depreciation)
2013 2012 Change
Governmental Activities
Land 4,310,857 $ 4,310,857 $ -$
Buildings and building improvements 113,816,408 116,882,419 (3,066,011)
Furniture and equipment 4,785,046 5,767,479 (982,433)
Construction-in-progress 29,722 11,498 18,224
Total governmental activities - capital assets 122,942,033 $ 126,972,253 $ (4,030,220) $
Business-Type Activities
Furniture and equipment 235,870 $ 280,224 $ (44,354) $
During fiscal year ended 2013, the District purchased approximately $859 thousand in furniture and
equipment, retired $1.038 million in obsolete technology equipment, purchased $255 thousand in
construction-in-progress and moved $236 thousand from construction-in-progress to buildings and
building improvements or furniture and equipment.
The District invested in notebooks, switches, servers, iPads, iPhones, desktop computers, athletic
equipment, musical equipment, a used truck, a vision screener, a floor scrubber and studio-production
equipment.
During fiscal year ended 2013, the District completed renovations of the Administration Offices,
completed the paving at Ore Valley Elementary, installed a replacement chiller at Ore Valley Elementary
and started the Middle School and High School Auditorium seating-replacement project.
During fiscal year ending 2014, the District plans to replace the speed-zone signs and repave the rear
playground at Loganville-Springfield Elementary, replace the water tower and chiller at York Township
Elementary, replace the HVAC controls at the Middle and High Schools and complete the replacement of
the auditorium seating that was started during fiscal year end 2013.
Additional information about capital assets can be found in Note 7 of this report.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
28
Long-Term Debt
In fiscal year ended 2013, the District had outstanding debt of $81.244 million consisting of $81.225
million in bond principal and $19 thousand in lease obligations. In fiscal year ended 2012, the District had
outstanding debt of $87.963 million consisting of $87.890 million in bond principal and $73 thousand in
lease obligations.
The District made payments against principal during fiscal year ended 2013 of $5.735 million on bonds
and $54 thousand on lease purchase obligations.
Refer to Figure A-19 for a comparison of the long-term debt outstanding for fiscal years ended 2013 and
2012.
Figure A-19
Fiscal Years Ended June 30, 2013 and June 30, 2012
Long-Term Debt
2013 2012
General Obligation Bonds
Series 2010A 955,000$ 1,895,000$
Series 2010B 1,050,000 1,380,000
Series 2011AA 11,320,000 11,750,000
Series 2012 - 72,865,000
Series 2013 57,015,000 -
Series 2013A 10,885,000 -
Capital Lease Obligations
Koch Leasing - SANS server - 45,294
Ford Motor Credit - Driver's Education Vehicles 19,151 27,439 Total 81,244,151$ 87,962,733$
The District also made $454 thousand in annual lease payments (principal and interest) to the York
County School of Technology for the General Obligation Bonds, Series 2007. As of fiscal year ended
2013, the financial obligation due by the Dallastown Area School District to the York County School of
Technology is $4.542 million.
During fiscal year ended 2011, the District issued $1.710 million in General Obligation Bonds on behalf
of the York County School of Technology. The District will share in a pro-rata portion of interest and
principal payments for this debt as it does for the General Obligation Bonds, Series 2007.
The District made $43 thousand in annual lease payments (principal and interest) to the York County
School of Technology for these bonds. As of fiscal year ended 2013, the District’s financial obligation to
the York County School of Technology is $132 thousand. Refer to Note 8 for more information regarding
these transactions.
Other long-term obligations include accrued personal and sick leave for specific employees of the
District, swap payments associated with the variable rate debt on the 1998 and 2000 bonds and other post-
employment benefits. More detailed information about the District’s long-term debt can be found in Note
8 of this report.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
29
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
2013-2014 Budget
The General Fund Revenue Budget for fiscal year ending 2014 is $90.714 million which is $1.745 million
or 2% more than the fiscal year ended 2013 budget of $88.969 million.
The three largest revenue increases are current real estate taxes, earned income taxes and the retirement-
reimbursement subsidy.
The General Fund Expenditure Budget for fiscal year ending 2014 is $91.607 million which is $1.593
million or 2% more than the fiscal year ended 2013 budget of $90.014 million. In order to subsidize the
budget so that revenues equaled expenditures, $893 thousand of fund balance is to be utilized.
The following highlights the largest categories where increases and decreases are expected:
Benefits - $1.377 million or 8% more than budgeted for fiscal year ended 2013. Retirement
expense captures the largest piece of the benefit increase with $2.147 or 38%. The significant
increase is due to the PSERS rate increase from 12.36% to 16.93%. This increase was offset by a
decrease of $500 thousand in medical-insurance premiums due to lower rates and an alternative
funding method, as well as a decrease of $317 thousand in unemployment compensation.
Other Purchased Services - $934 thousand more than budgeted for fiscal year ended 2013 which
is predominantly due to an increase of $569 in transportation costs. For fiscal year ending 2014,
special-education transportation will be moved to another carrier. The District’s previous carrier
billed a year behind, and therefore, fiscal year ending 2014 will incur a period of “catch-up”.
There was also an increase of $461 thousand in the vocational-education budget due to
reclassifying the bond payments for the York County School of Technology from the debt-service
function.
Other Use of Funds - $524 thousand less than budgeted for fiscal year ended 2013 due to
reclassifying the bond payments for the York County School of Technology from the debt-
service function to the vocational-education function as suggested by the Comptroller’s Office, as
well as the removal of the Food Service Fund unemployment- compensation transfer.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
30
Act 1
Fiscal year ended 2007 was the first year that Session Act I of 2006, known as the Taxpayer Relief Act,
was in place. The law stated that school districts may not increase the real estate-tax rate above the
adjusted-index percentage as determined by the state. Please refer to the ACT 1 Adjusted Index History
Chart below.
School districts that wish to increase millage beyond the index to maintain or improve existing programs
must either apply for exceptions from the Department of Education or receive voter approval for an
increase via a tax increase-referendum question.
The law intends to cap the financial burden of home ownership by providing school districts the means to
lower property taxes to homeowners, especially senior citizens. The legislation is complex, setting rules for
gaming-revenue allocations, requiring front-end voter referenda on tax shifting, mandating new school
district-budget restrictions, and requiring back-end voter referenda on future real estate-tax increases above
the index.
The state is still anticipating gaming will generate $1 billion each year for local property-tax relief. The
intent of Act 1 is that school districts will receive property tax-reduction allocations when the gaming
revenues reach $500 million and the Lottery Fund is repaid. Once the minimum level is obtained,
allocations to school districts will be state-formula driven. The state will in rank-order, assign each school
district a numerical rank and assign a tax-reduction index in order to calculate the property tax-reduction
allocation. Districts are eligible to receive the allocations unless their Boards of School Directors, by
resolution, reject the allocation. If rejected, a referendum is submitted to the voters to determine whether
they favor the school district receiving a property tax-reduction allocation.
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
31
There are referendum-exceptions built into Act I should districts need to raise taxes beyond the adjusted
index. The exceptions provide partial relief for increases in the costs of special education, retirement and
health-care expenses, emergencies and disasters and some school- construction projects. It is anticipated
that most school districts will be requesting relief through some of the exceptions.
The Court of Common Pleas will make decisions on some referendum-exceptions, but most will require
approval from the Department of Education. As a result, the budget timeline for all schools needing to go
above the adjusted index has been accelerated to provide the Department with a preliminary proposed
budget by the beginning of February each year along with the proposed exceptions so that the Department
has time to act upon the requested exceptions.
PSERS
The Pennsylvania School Employees Retirement System (PSERS) set the rate for fiscal year ended 2014
at 16.93%, a 37% increase over the 2013 rate of 12.36%. Refer to the chart below for past rates and
actuarial projections.
7.13% 4.76% 4.78%
5.64%
8.65%
12.36%
16.93%
21.40%
25.80%
28.30% 29.15% 30.14% 30.87%
30.76%
30.93%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
200
7-2
008
200
8-2
009
200
9-2
010
201
0-2
011
201
1-2
012
201
2-2
013
201
3-2
014
201
4-2
015
Pro
jected
201
5-2
016
Pro
jected
201
6-2
017
Pro
jected
201
7-2
018
Pro
jected
201
8-2
019
Pro
jected
201
9-2
020
Pro
jected
202
0-2
021
Pro
jected
202
1-2
022
Pro
jected
15 Year History & Projected Retirement (PSERS) Expense
Rates
PSERS Rate
DALLASTOWN AREA SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2013
32
REQUESTS FOR INFORMATION
The financial report is designed to provide our citizens, taxpayers, investors and creditors with a general
overview of the District’s finances and to demonstrate the District’s accountability. If you have any
questions about this report or need additional information, please contact Miranda Hoefler-Weaver, CPA,
MBA, Director of Accounting Services, or Donna Devlin, MBA, Business Administrator, at (717) 244-
4021 or by mail at the Dallastown Area School District, 700 New School Lane, Dallastown, PA, 17313.
33
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF NET POSITION
June 30, 2013
Governmental Business-Type
Activities Activities Total
Assets
Cash and cash equivalents 10,389,623 $ 4,530 $ 10,394,153 $
Investments 9,545,694 - 9,545,694
Receivables
Due within one year 3,177,594 12,522 3,190,116
Due in more than 1 year 720,000 - 720,000
Inventories - 19,176 19,176
Prepaid expenses 40,811 - 40,811
Capital Assets
Land and construction-in-progress 4,340,579 - 4,340,579
Other capital assets, net of depreciation 118,601,454 235,870 118,837,324
Total capital assets 122,942,033 235,870 123,177,903
Total assets 146,815,755 $ 272,098 $ 147,087,853 $
Deferred Outflows of Resources
Deferred amounts on refunding debt 111,365 $ -$ 111,365 $
Liabilities
Internal balances (87,726) $ 87,726 $ -$
Accounts payable and accrued expenses 6,244,588 47,222 6,291,810
Unearned revenues 19,303 59,442 78,745
Long-term liabilities
Due within one year 59,443,063 17,000 59,460,063
Due in more than one year 29,145,761 34,000 29,179,761
Total long-term liabilities 88,588,824 51,000 88,639,824
Total liabilities 94,764,989 $ 245,390 $ 95,010,379 $
Net Position
Net investment in capital assets 40,588,455 $ 235,870 $ 40,824,325 $
Restricted 1,217,782 - 1,217,782
Unrestricted 10,355,894 (209,162) 10,146,732
Total net position 52,162,131 $ 26,708 $ 52,188,839 $
See Notes to Financial Statements.
34
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF ACTIVITIES
Year Ended June 30, 2013
Operating Capital
Charges for Grants and Grants and Governmental Business-Type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
Governmental Activities:
Instruction 60,420,941 $ 232,056 $ 7,712,812 $ -$ (52,476,073) $ -$ (52,476,073) $
Instructional student support 6,254,902 - 597,570 - (5,657,332) - (5,657,332)
Administration and financial services 7,218,314 - 347,368 - (6,870,946) - (6,870,946)
Operation and maintenance of plant services 6,273,616 - 254,348 - (6,019,268) - (6,019,268)
Pupil transportation 3,959,551 - 1,213,732 - (2,745,819) - (2,745,819)
Student activities 1,686,768 84,363 80,193 - (1,522,212) - (1,522,212)
Community services 91,468 43,075 11,165 - (37,228) - (37,228)
Interest on long-term debt 816,534 - 858,078 - 41,544 - 41,544
Total governmental activities 86,722,094 359,494 11,075,266 - (75,287,334) - (75,287,334)
Business-Type Activities:
Food Service 2,709,545 1,549,957 1,092,514 - - (67,074) (67,074)
Total primary government 89,431,639 $ 1,909,451 $ 12,167,780 $ -$ (75,287,334) $ (67,074) $ (75,354,408) $
General Revenues:
Property taxes, levied for general purposes, net 61,242,397 $ -$ 61,242,397 $
5,882,759 - 5,882,759
Grants, subsidies and contributions not restricted 9,268,267 - 9,268,267
Investment earnings 102,783 256 103,039
Transfers (39,773) 39,773 -
Miscellaneous income (expenses) 233,688 (399) 233,289
Total general revenues and transfers 76,690,121 39,630 76,729,751
Changes in net position 1,402,787 (27,444) 1,375,343
Net position - July 1, 2012, as originally stated 51,087,283 54,152 51,141,435
Prior period adjustment (327,939) - (327,939)
Net position - July 1, 2012, as restated 50,759,344 54,152 50,813,496
Net position - June 30, 2013 52,162,131 $ 26,708 $ 52,188,839 $
See Notes to Financial Statements.
Public Utility, Realty Transfer, Earned Income, and Per Capita Taxes for general purposes, net
Net (Expense) Revenues and
Changes in Net PositionProgram Revenues
35
DALLASTOWN AREA SCHOOL DISTRICT
BALANCE SHEET - GOVERNMENTAL FUNDS
June 30, 2013
Non-Major Fund
Capital Debt Total
General Projects Service Governmental
Fund Fund Fund Funds
Assets
Cash and cash equivalents 9,157,507 $ 1,232,116 $ -$ 10,389,623 $
Investments 7,993,800 1,551,894 - 9,545,694
Due from other governments 1,474,083 - - 1,474,083
Other receivables 103,588 5,825 - 109,413
Due from other funds 87,726 - - 87,726
Prepaid expenses 40,811 - - 40,811
Taxes receivable 1,264,098 - - 1,264,098
Total assets 20,121,613 $ 2,789,835 $ -$ 22,911,448 $
Liabilities
Accounts payable 1,640,772 $ 204,135 $ -$ 1,844,907 $
Accrued salaries and benefits 4,278,309 - - 4,278,309
Payroll deductions and withholdings 121,372 - - 121,372
Unearned revenues 19,303 - - 19,303
Total liabilities 6,059,756 204,135 - 6,263,891
Deferred Inflows of Resources
Delinquent tax revenues 1,044,527 - - 1,044,527
Fund Balances
Nonspendable 40,811 - - 40,811
Restricted - 2,562,241 - 2,562,241
Committed 4,705,075 23,459 - 4,728,534
Assigned 942,868 - - 942,868
Unassigned 7,328,576 - - 7,328,576
Total fund balances 13,017,330 2,585,700 - 15,603,030
Total liabilities, deferred inflows of
resources and fund balances 20,121,613 $ 2,789,835 $ -$ 22,911,448 $
See Notes to Financial Statements.
Major Funds
36
DALLASTOWN AREA SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
June 30, 2013
Total fund balances - governmental funds 15,603,030 $
Amounts reported for governmental activities in the Statement of Net
Position are different because:
Capital Assets used in governmental activities are not financial resources,
and therefore, they are not reported as assets in governmental funds. The cost
of assets is $170,163,761, and the accumulated depreciation is $47,221,728. 122,942,033
Property taxes and earned income taxes receivable will be collected this
year, but are not available soon enough to pay for the current period's
expenditures; therefore, they are deferred inflows of resources in the funds. 1,044,527
The difference between the re-acquisition price and the net carrying
amount of the refunded debt is a deferred outflow of resources,
which is not reported in the funds. 111,365
Long-term receivables are not available for current use and are
recorded in the Statement of Net Position. 1,050,000
Long-term liabilities; including bonds payable, swap liability, compensated
absences, and other post-employment benefits; are not due and payable in
the current period, and therefore, they are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of:
Bonds payable, including bond premium (83,384,427)
Pay-fixed, interest-rate swap liability (2,249,079)
Lease-purchase obligations (19,151)
Other post-employment benefits (1,292,612)
Compensated absences (1,643,555)
(88,588,824)
Total net position - governmental activities 52,162,131 $
See Notes to Financial Statements.
37
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES - GOVERNMENTAL FUNDS
Year Ended June 30, 2013
Non-Major Fund
Capital Debt Totals
General Projects Service Governmental
Fund Fund Fund Funds
Revenues
Local sources 69,142,666 $ 35,665 $ 360,450 $ 69,538,781 $
State sources 18,459,422 - - 18,459,422
Federal sources 620,331 - - 620,331
Total revenues 88,222,419 35,665 360,450 88,618,534
Expenditures
Current:
Instructional 56,475,314 - - 56,475,314
Support services 22,483,136 338,670 - 22,821,806
Operation of noninstructional services 1,662,342 - - 1,662,342
Refunds of prior year's receipts 9,846 - - 9,846
Total Current 80,630,638 338,670 - 80,969,308
Capital outlay - 310,537 - 310,537
Debt service
Principal 5,458,581 - 330,000 5,788,581
Interest 2,061,426 502,384 30,450 2,594,260
Total expenditures 88,150,645 1,151,591 360,450 89,662,686
Excess (deficiency) of revenues over
expenditures 71,774 (1,115,926) - (1,044,152)
Other Financing Sources (Uses)
Transfers in - 380,000 - 380,000
Transfers out (419,773) - - (419,773)
Sale of capital assets 7,537 - - 7,537
Capital contributions - 18,366 - 18,366
Issuance of refunding bonds - 67,900,000 - 67,900,000
Payment to refunded bond escrow agent - (68,830,000) - (68,830,000)
Premium - 1,565,863 - 1,565,863
Total other financing sources (uses) (412,236) 1,034,229 - 621,993
Net changes in fund balances (340,462) (81,697) - (422,159)
Fund Balances:
July 1, 2012 13,357,792 2,667,397 - 16,025,189
June 30, 2013 13,017,330 $ 2,585,700 $ -$ 15,603,030 $
See Notes to Financial Statements.
Major Funds
38
DALLASTOWN AREA SCHOOL DISTRICT
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OFREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THESTATEMENT OF ACTIVITIES
Year Ended June 30, 2013
Net changes in fund balances - governmental funds (422,159) $
Amounts reported for governmental activities in the Statement of
Activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in
the Statement of Activities, the costs of those assets are allocated over their useful
lives as depreciation expense. This is the amount by which depreciation
and dispositions of capital assets exceeds capital outlays.
Capital outlays 1,113,676
Loss on sale of capital assets (9,737)
Less depreciation expense (5,134,159) (4,030,220)
Because some property taxes will not be collected for several months after the
District's fiscal year ends, they are not considered as "available" revenues in the
governmental funds. Deferred inflows of resources decreased by this amount this year. (119,335)
The repayment of notes receivable provides current resources; however, it does not
have any effect on the net assets. (330,000)
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, interest expense is recognized as the interest accrues,
regardless of when it is due. In addition, refunding losses, bond premiums,
discounts, and changes in swap liabilities are recognized as interest throughout the lives
over the amount due is shown here. 1,828,915
Some expenses reported in the Statement of Activities do not require the use of current
financial resources, and therefore, are not reported as revenues in governmental funds. (677,133)
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the current
financial resources of governmental funds. Neither transaction, however, has any
effect on net position. Also, governmental funds report the effects of
premiums, discounts, and similar items when debt is first issued, whereas these
amounts are deferred and amortized in the Statement of Activities. This
amount is the net effect of these differences in the treatment of long-term
debt and related items.
Issuance of long-term debt, including bond premium (69,465,863)
Repayment of long-term debt 74,618,582 5,152,719
Changes in net position of governmental activities 1,402,787 $
See Notes to Financial Statements.
of the related obligations. The additional interest accrued in the Statement of Activities
39
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE -
BUDGET AND ACTUAL - GENERAL FUND
Year Ended June 30, 2013
Variance
with Final
Original Final Actual Budget
Revenues
Local sources 68,908,234 $ 68,908,234 $ 69,142,666 $ 234,432 $
State sources 18,966,943 18,966,943 18,459,422 (507,521)
Federal sources 697,550 697,550 620,331 (77,219)
Total revenues 88,572,727 88,572,727 88,222,419 (350,308)
Expenditures
Current:
Instructional 56,030,850 56,827,025 56,475,314 351,711
Support services 22,808,399 23,450,874 22,483,136 967,738
Operation of noninstructional services 1,555,100 1,724,050 1,662,342 61,708
Refunds of prior year's receipts 450,000 11,000 9,846 1,154
Total Current 80,844,349 82,012,949 80,630,638 1,382,311
Capital outlay - - - -
Debt service 8,687,150 7,520,550 7,520,007 543
Total expenditures 89,531,499 89,533,499 88,150,645 1,382,854
Excess (deficiency) of revenues over
expenditures (958,772) (960,772) 71,774 1,032,546
Other Financing Sources (Uses)
Transfers in 395,000 395,000 - (395,000)
Transfers out (282,700) (480,700) (419,773) 60,927
Sale of capital assets 1,000 1,000 7,537 6,537
Budgetary reserve (200,000) - - -
Total other financing uses (86,700) (84,700) (412,236) (327,536)
Net changes in fund balance (1,045,472) $ (1,045,472) $ (340,462) 705,010 $
Fund Balances - July 1, 2012 13,357,792
Fund Balances - June 30, 2013 13,017,330 $
See Notes to Financial Statements.
Budgeted Amounts
General Fund
40
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF NET POSITION - PROPRIETARY FUND - FOOD SERVICE
June 30, 2013
Assets
Cash and cash equivalents 4,530 $
Receivables
State sources 861
Federal sources 9,267
Other 2,394
Inventories 19,176
Other capital assets, net of depreciation 235,870
Total assets 272,098 $
Liabilities
Accounts payable 47,222 $
Unearned revenues 59,442
Due to other funds 87,726
Long-term liabilities
Due within one year 17,000
Due in more than one year 34,000
Total long-term liabilities 51,000
Total liabilities 245,390 $
Net Position
Net investment in capital assets 235,870 $
Unrestricted (209,162)
Total net position 26,708 $
See Notes to Financial Statements.
41
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION -
PROPRIETARY FUND - FOOD SERVICE
Year Ended June 30, 2013
Operating Revenues
Food service revenues 1,549,957 $
Operating Expenses
Supplies 172,199
Salaries 15,188
Employee benefits 66,659
Purchased property services 47,160
Other purchased services 2,363,862
Depreciation 44,354
Other operating expenses 123
Total operating expenses 2,709,545
Operating loss (1,159,588)
Nonoperating Revenues (Expenses)
Investment earnings 256
State sources 85,397
Federal sources 1,007,117
Transfers in 39,773
Refund of prior year's receipts (399)
Total nonoperating revenues 1,132,144
Changes in net position (27,444)
Net Position - July 1, 2012 54,152
Net Position - June 30, 2013 26,708 $
See Notes to Financial Statements.
42
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF CASH FLOWS - PROPRIETARY FUND - FOOD SERVICE
Year Ended June 30, 2013
Cash Flows From Operating Activities
Cash received from meal sales 1,549,972 $
Cash payments for goods and services (2,694,660)
Cash payments to employees for services (81,847)
Net cash used in operating activities (1,226,535)
Cash Flows From Noncapital Financing Activities
State sources 85,446
Federal sources 872,725
Transfers in 39,773
Refund of prior year's receipts (399)
Net cash provided by noncapital financing activities 997,545
Cash Flows From Investing Activities
Investment earnings 256
Net decrease in cash and cash equivalents (228,734)
Cash and Cash Equivalents:
July 1, 2012 233,264
June 30, 2013 4,530 $
Reconciliation of Operating Loss to Net Cash Used
in Operating Activities
Operating loss (1,159,588) $
Adjustments to reconcile operating loss to net
cash used in operating activities
Depreciation 44,354
Value of donated commodities 132,498
Changes in assets and liabilities:
(Increase) decrease in:
Receivables (1,674)
Inventories 1,906
(Decrease) increase in:
Accounts payable (8,849)
Unearned revenues 1,689
Internal balances (219,871)
Other long-term liabilities (17,000)
Net cash used in operating activities (1,226,535) $
See Notes to Financial Statements.
43
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES
June 30, 2013
Agency Fund
Student Activities
Assets
Cash and cash equivalents 263,988 $
Investments 12,810
Total assets 276,798 $
Liabilities
Due to student groups 276,798 $
Total liabilities 276,798 $
See Notes to Financial Statements.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
44
Note 1. Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Dallastown Area School District (the District) was formed in 1966 under the provisions of P.L. 564, the
School District Reorganization Act of 1963 of the Commonwealth of Pennsylvania. The District operates
a public-school system that encompasses six municipalities in York County. The governing body of the
District is a board of nine school directors who are each elected for a four-year term. The daily operation
and management of the District is carried out by the administrative staff of the District, headed by the
Superintendent of Schools who is appointed by the Board of School Directors. Funding for the District is
received from local, Commonwealth, and Federal sources and must comply with the requirements of the
various funding-source agencies.
The District assesses the taxpayers of these municipalities based upon taxing powers at its disposal. The
ability of the School District’s taxpayers to pay their assessments is dependent upon economic and other
factors affecting the taxpayers.
The financial statements of the District have been prepared in accordance 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 authoritative, standard-setting body for the
establishment of governmental accounting and financial-reporting principles. The more significant of
these accounting policies are as follows:
A. Reporting Entity
In evaluating the District as a reporting entity, management has addressed all potential component units
which may or may not fall within the District’s financial accountability. The criteria used to evaluate
component units for possible inclusion as part of the District’s reporting entity are financial accountability
and the nature and significance of the relationship. This report presents the activities of the District. The
District is not a component unit of another reporting entity, nor does it have any component units. The
District does, however, participate in jointly-governed organizations which are described in Note 9.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
45
Note 1. Summary of Significant Accounting Policies (Continued)
B. Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of
Activities) report information on all of the non-fiduciary activities of the primary government. The
significant effects of interfund activity have been removed from these statements. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported separately
from business-type activities, which rely to a significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function, or
segment, are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services or privileges provided by a given function or
segment and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among
program revenue are reported instead as general revenues.
Separate fund financial statements are provided in the report for all of the governmental, proprietary, and
the fiduciary funds of the District, even though the latter are excluded from the government-wide
financial statements. Major individual governmental funds and the major proprietary fund are reported as
separate columns in the fund financial statements. Non-major funds are also presented in a single
column. Fiduciary funds are reported by fund type.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The District complies with accounting principles generally accepted in the United States of America
(GAAP) and applies all relevant Governmental Accounting Standards Board (GASB) pronouncements.
The provisions of GASB Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre-November 30, 1989, FASB and AICPA Pronouncements, are generally
followed in both the government-wide and proprietary fund financial statements to the extent that those
provisions do not conflict with or contradict guidance provided by the Governmental Accounting
Standards Board. Governments also have the option of following subsequent private-sector guidance for
their business-type activities and enterprise funds, subject to this same limitation. The District has elected
not to follow subsequent private-sector guidance.
The government-wide financial statements are reported using the economic-resources measurement focus
and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements.
Revenues are recorded when earned, and expenses are recorded when related liabilities are incurred,
regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for
which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility
requirements imposed by the provider have been met. Net position (assets plus deferred outflows of
resources less liabilities less deferred inflows of resources) is used as a practical measure of economic
resources, and the operating statement includes all transactions and events that increased or decreased net
position. Depreciation is charged as an expense against current operations, and accumulated depreciation
is reported in the Statement of Net Position.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
46
Note 1. Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Governmental fund financial statements are reported using the current financial-resources measurement
focus and the modified-accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
government considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. Revenues from Federal, state and other grants designated for payment of specific
District expenditures are recognized when the related expenditures are incurred; accordingly, when such
funds are received, they are recorded as deferred revenues until earned. Expenditures generally are
recorded when related liabilities are incurred, as under accrual accounting. However, debt-service
expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payments are due.
When both restricted and unrestricted (including committed, assigned, and unassigned) resources are
available for use, it is the District’s policy to generally use the resources with the most stringent
restrictions first, followed by resources in decreasing order of restriction, as funds are needed. However,
the District does use unassigned monies at times to pay for expenditures that may have been board-
committed.
Governmental funds are those through which most governmental functions of the District are financed.
The acquisition, use, and balances of the District’s expendable financial resources and the related
liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds.
The District reports the following major governmental funds:
General Fund - The General Fund is the District’s primary, operating fund. It accounts for all
financial resources except those required to be in another fund. Revenues are primarily derived
from local property, earned income, and per capita taxes, and state and Federal distributions.
Many of the more important activities for the District, including instruction, administration of the
District and certain non-instructional services are accounted for in this fund.
Capital Projects Fund - The Capital Projects Fund is used to account for and report financial
resources that are restricted, committed, or assigned to expenditures for the acquisition,
construction, or improvement of major capital facilities (other than those financed by proprietary
funds).
Proprietary Fund - The District operates one enterprise fund, the Food Service Fund. This fund
accounts for the activities of the District’s food-service program.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
47
Note 1. Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)
Proprietary funds are used to account for activities that are similar to those often found in the private
sector. The measurement focus is upon determination of net income and capital maintenance.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with the proprietary fund’s principal, on-going operations. The principal operating revenues
of the District’s proprietary fund are food-service charges. Operating expenses for the District’s
proprietary fund include food-production costs, supplies, administrative costs, and depreciation on capital
assets. All revenues or expenses not meeting these classifications are reported as non-operating revenues
and expenses. The District allocates certain building-related costs, such as extermination and custodial
fees, to the Food Service Fund.
The District maintains the following fiduciary fund type:
Agency Fund - Student Activities - The Student Activities Fund accounts for assets held by the
District as an agent for various student groups.
The Student Activities Fund accounts for the resources authorized by Section 511 of the Public School
Code of 1949 for school publications and organizations. A portion of this fund is an agency fund which
is separate from other agency funds because of legal requirements. Agency funds are custodial in nature
(assets equal liabilities) and do not involve measurement of results of operations. Agency funds are also
accounted for using the accrual basis of accounting.
D. Budget and Budgetary Accounting
The School Board approves, prior to the beginning of each year, an annual budget on the modified-
accrual basis for the General Fund. This is the only fund for which a budget is required and for which
taxes may be levied. The General Fund is the only fund that has an annual budget that has been legally
adopted by the School Board. The School Board does not legally adopt the Food Service Fund budget;
however, it is approved. The Public School Code allows the School Board to authorize budget-transfer
amendments during the last nine months of each fiscal year.
The School District may not legally exceed the revised budget amounts by function and object. Function
is defined as a program area such as instructional services, and object is defined as the nature of the
expenditure such as salaries or supplies. Amendments require the School Board’s approval. All
appropriations lapse at the end of each fiscal year.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
48
Note 1. Summary of Significant Accounting Policies (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Fund Balance
Cash and Cash Equivalents: For purposes of the Statement of Cash Flows presented for the proprietary
fund, the District considers all highly-liquid investments with maturities of three months or less when
purchased to be cash equivalents.
Investments: Investments are stated at fair value.
Inventories: Inventories in the proprietary fund are generally presented at the lower of cost or market on a
first-in, first-out basis, and are expensed when used. Inventories consist of certain government-donated
commodities which were valued at estimated fair market value, as well as purchased commodities and
supplies.
Prepaid Expenses: Certain payments to vendors reflect costs applicable to future accounting periods and
are recorded as prepaid expenses (consumption method) in both the government-wide and fund financial
statements.
Capital Assets and Depreciation: Capital assets; which include property, plant and equipment, and
infrastructure assets; are reported in the applicable governmental or business-type activities column in the
government-wide financial statements. Capital assets are capitalized in accordance with board policy at
the discretion of management. Management considers various factors in the capitalization of assets,
including the assets’ estimated useful lives, costs, and the extents to which the assets are part of larger
capital projects. The established procedures state that individual assets with costs greater than $2,500 and
group assets costing greater than $10,000 are to be capitalized. Buildings and land improvements are
capitalized at a cost of $25,000 or greater, and modular classrooms are capitalized at $10,000. The
donated capital assets are recorded at their estimated fair market values on the dates of donation.
The costs of normal maintenance and repairs that do not add to the values of the assets or materially
extend assets’ lives are not capitalized.
Depreciation is provided for capital assets on the straight-line basis over the following estimated useful
lives:
Governmental Business-Type
Activities Activities
Land improvements 20 N/A
Buildings and improvements 15-50 N/A
Machinery and equipment 5-20 5-20
Estimated Lives ( in years)
Deferred Outflows of Resources - Deferred amounts on refunding debt: The District recognizes the
difference between the re-acquisition price and the net carrying amount of the old debt as a deferred
outflow which is a component of interest expense over the remaining life of the old or new debt,
whichever is shorter.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
49
Note 1. Summary of Significant Accounting Policies (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Fund Balance
(Continued)
Long-Term Obligations: In the government-wide financial statements, and proprietary fund types in the
fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the
applicable governmental or business-type activities columns in the Statement of Net Position. Bond
premiums and discounts are deferred and amortized over the lives of the related bonds.
In the fund financial statements, governmental-fund types recognize bond premiums and discounts during
the current period. The face amount of the debt issued is reported as other financing sources. Issuance
costs, whether or not withheld from the actual debt proceeds received, are reported as debt-service
expenditures.
Compensated Absences: The District provides for the accumulation and payout of sick pay upon the
retirement of employees who retire under the terms of the District’s collective-bargaining agreements.
Teachers, administrators, and support employees are eligible to receive a per-diem amount for all
accumulated sick days.
Post-Employment Benefits: In the government-wide financial statements, the District recognizes the
costs and liabilities associated with post-employment benefits other than pension compensation, which is
funded through the District’s contribution to the statewide Public School Employees’ Retirement System,
a governmental, cost-sharing, multiple-employer defined-benefit pension plan. The District provides
retiree health, and dental-care benefits, including prescription-drug coverage, to eligible, retired
employees and qualified spouses/beneficiaries. The District has estimated the cost of providing these
benefits through an actuarial valuation.
Derivative Financial Instruments: Derivative instruments used by the District are swap contracts that
have a variable or fixed payment based on the price of an underlying interest rate or index. Hedging
derivative instruments is used to reduce financial risks, such as offsetting increases in interest costs by
offsetting changes in cash flows of the debt, the hedged item. At year-end, these derivative instruments
are evaluated to determine if the derivative instruments are effective in significantly reducing the
identified financial risk. If the derivative instrument is determined to be an effective hedge, its fair value
is an asset or liability with a corresponding debit or credit to deferred outflows or inflows on the
Statement of Net Position. Deferred outflows or inflows constitute changes in fair value of effectively-
hedged derivative instruments. This account is neither an asset nor a liability. If the derivative
instruments are determined to be ineffective or when there is no item to be hedged, the derivative
instruments are considered to be investment derivatives; their fair values are either assets or liabilities on
the Statement of Net Position, and the changes in their fair values are recognized against investment
income in the Statement of Activities.
Interfund Transfers: Advances between funds that are not expected to be repaid are accounted for as
transfers. In those cases when repayment is expected, the advances are accounted for through the various
“due from” and “due to” accounts. Transactions and balances between governmental activities have been
eliminated in the government-wide financial statements. Residual amounts due between governmental
and business-type activities are indicated on the Statement of Net Position as internal balances.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
50
Note 1. Summary of Significant Accounting Policies (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Fund Balance
(Continued)
Deferred Inflows of Resources - Unearned revenues: The District recognizes property tax revenues when
they become available. Available includes those property taxes expected to be collected within sixty days
after year-end. Those property taxes expected to be collected beyond sixty days after year-end are shown
as deferred revenue in the fund financial statements. Governmental funds also defer revenues in
connection with resources that have been received, but not yet earned.
Fund Balance
The School District’s fund balance classifications are defined and described as follows:
Nonspendable: Represents fund balance amounts that cannot be spent because they are not in a
spendable form or are contractually required to be maintained intact.
Restricted: Represents fund balance amounts that are constrained for a specific purpose through
restrictions of external parties, through constitutional provisions, or by enabling legislation.
Committed: Represents fund balance amounts that can only be used for specific purposes pursuant to
the constraints imposed by the Board of School Directors, the District’s highest level of decision-
making authority. A formal vote by the Board of School Directors is required to impose funds as
committed, as well as to modify or rescind previously-committed funds.
Assigned: Represents fund balance amounts that are constrained by the government’s intent to be used
for a specific purpose but are neither restricted nor committed. Through Board Policy 620, the Board
has delegated the authority to express intent to the District’s Business Manager.
Unassigned: Represents fund balance amounts that have not been restricted, committed, or assigned to
specific purposes within the General Fund. A negative, unassigned fund balance may be reported in
other governmental funds if expenditures incurred for specific purposes exceeded the amounts
restricted, committed, or assigned to those purposes.
The District has a board policy which prescribes fund balance guidelines. The District will strive to
maintain an assigned and unassigned general fund balance of not less than 5 percent and not more than 8
percent of budgeted expenditures for that year.
When expenditures are incurred for purposes for which both restricted and unrestricted (committed,
assigned, or unassigned) amounts are available, the District will reduce the committed balance first,
followed by the assigned balance, and then by the unassigned balance.
Restricted Net Position: This classification consists of certain assets which were restricted for specific
purposes by law, through constitutional provisions, or enabling legislation.
Use of Estimates: Management uses estimates and assumptions in preparing financial statements. These
estimates and assumptions affect the reported amounts of assets and liabilities and the reported revenues
and expenditures.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
51
Note 1. Summary of Significant Accounting Policies (Continued)
E. Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Fund Balance
(Continued)
Implementation of New Accounting Principle: GASB issued Statement No. 63, Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position, which provides
financial-reporting guidance for deferred outflows and inflows of resources. The requirements of this
statement improve financial reporting by standardizing the presentations of deferred outflows and inflows
of resources and their effects on the government’s net position. This standard was adopted for fiscal year
ended June 30, 2013. The adoption of this statement reclassified Net Assets to Net Position, and
identified two new elements as components of the Statement of Net Position
GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, sets forth criteria to
properly classify previously-reported assets and liabilities as deferred outflows or inflows of resources or
to recognize certain items that were previously reported as assets and liabilities as outflows or inflows of
resources. The standard was issued in March 2012 and is effective for the period beginning after
December 15, 2012. This standard was adopted for year ended June 30, 2013.
Subsequent Events: In preparing these financial statements, the District has evaluated events and
transactions for potential recognition or disclosure through November 12, 2013, the date the financial
statements were available to be issued.
Note 2. Deposits and Investments
Deposits and Investments
Under Section 440.1 of the Public School Code of 1949, as amended, the District is permitted to invest
funds consistent with sound business practices in the following types of investments:
● U.S. Treasury Bills
● Short-term obligations of the U.S. Government or its agencies or its
Instrumentalities
● Deposits in savings accounts or time deposits or share accounts of institutions insured by either:
1. The Federal Deposit Insurance Corporation (FDIC), or
2. The Federal Savings and Loan Insurance Corporation (FSLIC), or
3. The National Credit Union Share Insurance Fund (NCUSIF)
to the extent that such accounts are so insured, and for any amounts above
maximum insurable limits, provided that approved collateral, as provided by law,
shall be pledged by the depository
● Obligations of (a) the United States of America or its agencies or instrumentalities backed by
the full-faith and credit of the United States of America, and (b) the Commonwealth of
Pennsylvania or instrumentalities thereof backed by the full-faith and credit of these political
subdivisions
● Shares of investment companies whose investments are restricted to the above categories
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
52
Note 2. Deposits and Investments (Continued)
The deposit and investment policies of the District adhere to state statutes and prudent business practices.
There were no deposit or investment transactions during the year that violated either state statutes or
District policies.
Deposits: Custodial-Credit Risk
Carrying Bank Financial
Amount Balance Institution
Insured (FDIC) $ 14,934 $ 14,934 Citizens Bank
Insured (FDIC) 5,247 5,427 People's Bank
Insured (FDIC) 250,000 250,000 Susquehanna Bank
Insured (FDIC) 250,000 250,000 PNC Bank
Uninsured, collateralized in accordance
with Act 72 14,370,049 16,141,484 Susquehanna Bank
Uninsured, collateralized in accordance
with Act 72 2,843,569 2,843,569 PNC Bank
$ 17,733,799 $ 19,505,414
Act 72 is an act standardizing the procedures for pledges of assets to secure deposits of public funds with
banking institutions pursuant to other laws; establishing a standard rule for the types, amounts and
valuations of assets eligible to be used as collateral for deposits of public funds; permitting assets to be
pledged against deposits on a pooled basis and authorizing the appointment of custodians to act as the
pledgors of the assets.
Investments
As of June 30, 2013, the District had the following investments:
Weighted-Avg
Maturities Fair Values
Pennsylvania School District Liquid Asset Fund (PSDLAF) 51 days 2,183,427 $
M&T Bank - Federated Treasury Obligations 52 days 299,107
2,482,534 $
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
53
Note 2. Deposits and Investments (Continued)
Portfolio Assets
PSDLAF - This fund invests in U.S. treasury securities, U.S. government securities, its agencies and
instrumentalities, and repurchase agreements, collateralized by such securities and contracted with highly-
rated counterparties. Weighted-average portfolio maturity for the fund is expected to be kept at or below
60 days. The District’s position in the investment pool is presented at fair value. PSDLAF is not subject
to any regulatory oversight.
Weighted-Average Maturity
The weighted-average maturity (WAM) method expresses investment time horizons - the time when
investments become due and payable - in years or months, weighted to reflect the dollar-size of individual
investments within an investment type. WAMs are computed for each investment type. The portfolio’s
WAM is derived by dollar-weighting the WAM for each investment type.
Interest-Rate Risk
The District does not have a formal investment policy that limits investment maturities as a means of
managing its exposure to fair-value losses arising from increasing interest rates.
Credit Risk
As indicated above, Section 440.1 of the Public School Code of 1949, as amended, limits the composition
of the District’s investments, and the District has no investment policy that would further limit its
investment choices. As of June 30, 2013, the District’s investments in PSDLAF and in Federated
Treasury Obligations were rated AAAm by Standard & Poor’s.
Concentrations-of-Credit Risk
The District places no limit on the amounts invested in any one issuer. The District’s investments in
PSDLAF represent 87.76% of the District’s total investments.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
54
Note 3. Taxes Receivable, Deferred Inflows of Resources and Estimated Uncollectible Taxes
Summaries of taxes receivable and related accounts of the General Fund at June 30, 2013, are as
follows:
Amount
Uncollected taxes - Real Estate 1,264,098 $
Taxes to be collected within 60 days 219,571 $
Deferred inflow of resources - delinquent taxes 1,044,527
1,264,098 $
Deferred Inflow of Resources
Delinquent taxes 1,044,527 $
Total Deferred Inflow of Resources 1,044,527 $
Note 4. Intergovernmental Receivables
Amounts due from other governments represent receivables for revenues earned by the District. At
June 30, 2013, the following amounts are due from other governmental units:
General Proprietary
Fund Fund
PA Department of Education
Social Security 200,382$ -$
Retirement 634,574 -
Rental 31,108 -
York Adams Tax Bureau - EIT 248,138 -
Mainstreaming for various LEA's 172,013 -
County of York - Realty Transfer Tax 62,362 -
Federal Subsidies - Title I 91,585 -
Federal Subsidies - Title II 29,479 -
Federal Subsidies - Title III 2,227 -
Federal Subsidies - ACCESS 2,215 -
Federal Subsidies - Food Program - 9,267
State Subsidies - Food Program - 861
1,474,083$ 10,128 $
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
55
Note 5. Internal Balances and Interfund Transfers
Individual fund receivable and payable balances at June 30, 2013, are as follows:
Interfund Interfund
Fund Receivables PayablesGovernmental Funds
General 87,726 $ -$
Total Governmental 87,726 -
Proprietary Fund
Food Service - 87,726
87,726 $ 87,726 $
The outstanding balances between these funds result mainly from time lags between the dates that the
goods and services are provided, the transactions are recorded in the accounting system and when
payments are made. The Food Service Fund Payable consists of chargebacks for utilities and services,
salaries and a loan from the General Fund. That balance is expected to be collected in the subsequent
year.
Individual fund transfers during the fiscal year ended June 30, 2013, are as follows:
Fund Transfers In Transfers Out
Governmental Fund Types
General -$ 419,773 $
Capital Projects 380,000 -
Total Governmental Fund Types 380,000 419,773
Proprietary Fund Types
Food Service 39,773 -
419,773 $ 419,773 $
Transfers and payments within the District are substantially for the purposes of subsidizing operating
functions, funding capital projects, and asset acquisitions. Resources are accumulated in a fund to support
and simplify the administration of various projects or programs. For the year ended June 30, 2013,
amounts were transferred to the Capital Projects Fund to fund various future improvements and
acquisitions and transferred to the Food Service Fund for the payment of unemployment compensation for
former employees of the District.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
56
Note 6. Property Taxes
Based upon assessed valuations provided by York County, the municipal tax collector bills and collects
property taxes on behalf of the District. The schedule for property taxes levied for 2012-2013, is as
follows:
July 13, 2012 Tax Levy Date
Through September 13, 2012 2% Discount
Through November 13, 2012 Face payment period
Starts November 14, 2012 10% Penalty Period
January 1, 2013 Lien Filing Date
The District’s tax rate for all purposes in 2012-2013, was 22.26 mills ($22.26 per $1,000 assessed
valuation). Refunds on payments of prior-year taxes are classified as Other Debt Service items under the
Commonwealth of Pennsylvania accounting system.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
57
Note 7. Capital Assets
Capital asset activity for the year ended June 30, 2013, was as follows:
July 1, June 30,
2012 Increases Decreases 2013
Governmental Activities:
Capital assets not being depreciated
Land $ 4,310,857 -$ -$ $ 4,310,857
Construction-in-progress 11,498 254,669 (236,445) 29,722
Total capital assets not being
depreciated 4,322,355 254,669 (236,445) 4,340,579
Capital assets being depreciated
Buildings and building improvements 146,357,481 236,445 - 146,593,926
Furniture and equipment 19,408,656 859,007 (1,038,407) 19,229,256
Total capital assets being depreciated 165,766,137 1,095,452 (1,038,407) 165,823,182
Less accumulated depreciation
Buildings and building improvements 29,475,062 3,302,456 - 32,777,518
Furniture and equipment 13,641,177 1,831,703 (1,028,670) 14,444,210
Total accumulated depreciation 43,116,239 5,134,159 (1,028,670) 47,221,728
Total capital assets being
depreciated, net 122,649,898 (4,038,707) (9,737) 118,601,454
Total Governmental Activities,
Capital Assets - Net 126,972,253 $ (3,784,038) $ (246,182) $ 122,942,033 $
Business-Type Activities:
Capital assets being depreciated,
equipment 427,943 $ -$ -$ 427,943 $
Less accumulated depreciation
for equipment 147,719 44,354 - 192,073
Total Business-Type Activities,
Capital Assets - Net 280,224 $ (44,354) $ -$ 235,870 $
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
58
Note 7. Capital Assets (Continued)
Depreciation expense was charged to the functions/programs of the District as follows:
Amount
Governmental Activities:
Instruction 3,843,863 $
Instructional student support 352,178
Administration and financial support 584,948
Operation and maintenance of plant services 240,711
Pupil transportation 6,152
Student activities 100,465
Community services 5,842
Total Governmental Activities 5,134,159
Business-Type Activities:
Food Service 44,354
Total Primary Government 5,178,513 $
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
59
Note 8. Long-Term Obligations
A summary of the reporting entity’s long-term obligations as of June 30, 2013, and transactions during
the year then ended follows:
July 1, June 30, Due within
2012 Increases Decreases 2013 one yearGeneral Long-Term Obligations
General Obligation Bonds/Notes
Series of 2010A 1,895,000 $ -$ 940,000 $ 955,000 $ 955,000 $
Series of 2010B 1,380,000 - 330,000 1,050,000 340,000
Series of 2011AA 11,750,000 - 430,000 11,320,000 420,000
Series of 2012 72,865,000 72,865,000 - -
Series of 2013 - 57,015,000 - 57,015,000 57,015,000
Series of 2013A - 10,885,000 - 10,885,000 5,000
Bond premium (discounts), net
of amortization 1,512,309 1,565,863 918,745 2,159,427 676,420
Total bonds payable 89,402,309 69,465,863 75,483,745 83,384,427 59,411,420
Pay-fixed, interest-rate swap liability 3,186,876 - 937,797 2,249,079 -
Lease-purchase obligations 72,733 - 53,582 19,151 8,861
Compensated absences 1,627,501 178,774 162,720 1,643,555 22,782
Other post-employment benefits 631,533 1,461,330 800,251 1,292,612 -
Total General Long-Term Obligations 94,920,952 $ 71,105,967 $ 77,438,095 $ 88,588,824 $ 59,443,063 $
General Obligation Bonds - Series A of 2010 - On March 23, 2010, the District issued General
Obligation Bonds - Series A of 2010 in the principal amount of $4,360,000. The proceeds of the bonds
are being used to refund the General Obligation Bonds - Series of 2004. The bonds bear annual interest
rates ranging from 1.00% to 2.00%. Interest is payable semi-annually, and the bonds mature serially in
amounts ranging from $645,000 to $955,000 through 2014. The economic gain on the refunding of the
2004 Bonds was $148,230.
General Obligation Bonds - Series B of 2010 - On July 14, 2010, the District issued General Obligation
Bonds - Series B of 2010 in the principal amount of $1,710,000. The proceeds of the bonds are being
used to fund the costs of design and construction of roof replacements to the York County School of
Technology. The bonds bear annual interest rates ranging from 1.00% to 3.50%. Interest is payable
semi-annually, and the bonds mature serially in amounts ranging from $330,000 to $360,000 through
2015.
General Obligation Notes - Series AA of 2011 - On March 30, 2011, the District issued General
Obligation Notes - Series AA of 2011 in the principal amount of $12,160,000. The proceeds of the
notes are being used to refinance the General Obligation Bonds - Series of 2006. The notes bear annual
interest rates ranging from .70% to 5.00%. Interest is payable semi-annually and on the date of
maturity. The notes mature serially in amounts ranging from $140,000 to $4,850,000 through 2019.
There was no economic gain or loss on this transaction, and the future-debt service requirements cannot
be determined as the 2006 General Obligation Bonds were variable-rate instruments.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
60
Note 8. Long-Term Obligations (Continued)
General Obligation Notes - Series of 2012 - On March 30, 2012, the District issued General Obligation
Notes - Series of 2012 in the principal amount of $72,865,000. The proceeds of the notes are being
used to refinance the General Obligation Bonds - Series of A of 2011, which was due to be paid in full
on April 15, 2013. The notes bear interest at annual rates that shall not exceed 6.00%; the initial rate
is 1.50%. Interest is payable quarterly and on the date of maturity. There was no economic gain or
loss on this transaction. On March 30, 2013, the District issued General Obligation Bonds - Series of
2013 and Series A of 2013 to refinance this obligation.
General Obligation Notes - Series A of 2013- On March 30, 2013, the District issued General
Obligation Notes - Series of A of 2013 in the principal amount of $10,885,000. The proceeds of the
notes are being used to refinance the General Obligation Bonds - Series of 2012, which were due to be
paid in full on April 15, 2013. The notes bear interest rates that shall not exceed 4.00%; the initial rate
is 0.45%. Interest is payable semi-annually and on the date of maturity.
General Obligation Notes - Series of 2013 - On March 30, 2013, the District issued General Obligation
Notes - Series of 2013 in the principal amount of $57,015,000. The proceeds of the notes are being
used to refinance the General Obligation Bonds - Series of 2012, which was due to be paid in full on
April 15, 2013. The notes bear interest at annual rates that shall not exceed 6.00%; the initial rate is
1.25%. Interest is payable quarterly and on the date of maturity.
There were no economic gains or losses on the foregoing 2013 refinancing transactions. As explained
in Note 13, the District intends to refinance the 2013 debt prior to the scheduled maturity dates;
therefore, any expected cost-savings may not be realized. Each year, it is the District’s intent to
refinance the debt that is hedged by pay-fixed, interest-rate swaps until the swap-termination dates of
February 1, 2018 and May 1, 2020.
The future debt-service requirements of the fixed and variable general obligation long-term debt are as
follows, assuming current rates:
Years Principal Interest Total
2013-2014 58,735,000 $ 1,643,374 $ 60,378,374 $
2014-2015 1,825,000 885,253 2,710,253
2015-2016 1,860,000 819,248 2,679,248
2016-2017 1,530,000 757,810 2,287,810
2017-2018 1,565,000 681,628 2,246,628
2019-2021 15,710,000 1,065,950 16,775,950
81,225,000 $ 5,853,263 $ 87,078,263 $
All debt-service payments for general obligation notes and bonds are funded by the General Fund. As
required by the Pennsylvania Department of Education Financial Accounting and Reporting Manual,
debt-issuance costs are reported on the Statement of Revenues, Expenditures, and Changes in Fund
Balances as Support Services.
The District has no outstanding, in-substance defeased debt.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
61
Note 8. Long-Term Obligations (Continued)
Prior Period Adjustment - GASB Statement No. 65 Implementation
Implementation of GASB Statement No. 65 recognizes costs of debt issuances as expenses in the
periods of debt issuances; therefore, the adoption of this statement resulted in corresponding decreases
of bond-issuance costs and net position of $327,939 as of July 1, 2012.
The unrealized losses on debt refinancing were reclassified from bonds payable to deferred outflows of
resources.
Swap Payments and Associated Debt
As of June 30, 2013, debt-service requirements of the pay-fixed, interest-rate swap payments, assuming
current interest rates remain constant, were as follows.
Year Principal Interest Swaps, net Total
2013-2014 57,015,000 $ 688,844 $ 867,500 $ 58,571,344 $
2014-2015 - - 729,920 729,920
2015-2016 - - 585,240 585,240
2016-2017 - - 433,093 433,093
2017-2018 - - 272,926 272,926
2019-2021 - - 108,909 108,909
57,015,000 $ 688,844 $ 2,997,588 $ 60,701,432 $
Variable-Rate Bonds
The fair value of the interest-rate swap liability is presented in the Government-Wide Statement of Net
Position.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
62
Note 8. Long-Term Obligations (Continued)
Lease-Purchase Obligations
The District has entered into lease agreements as the lessee for financing the acquisitions of computer
software and hardware, and vehicles. These lease agreements qualify as capital leases for accounting
purposes, and therefore, the related assets and liabilities have been recorded at the present values of their
respective future minimum lease payments as of the inception dates.
The assets acquired through capital leases are as follows:
Amount
Asset:
Vehicles 42,090 $
Less: Accumulated Depreciation (14,907)
Total Buildings and Improvements 27,183 $
Furniture and Equipment 168,064 $
Less: Accumulated Depreciation (166,510)
Total Furniture and Equipment 1,554 $
The future minimum lease obligations and the net present values of these minimum lease obligations as
of June 30, 2013, were as follows:
Years Amount
2013-2014 9,875 $
2014-2015 9,875
2015-2016 822
Total minimum lease payments 20,572
Less: amount representing interest (1,421)
Total present value of net minimum lease payments 19,151 $
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
63
Note 8. Long-Term Obligations (Continued)
Operating Leases
The District leases copiers and printers under non-cancelable operating leases. Total costs for the leases
were $190,227 for the year ended June 30, 2013. The future minimum lease payments for these leases
are as follows:
Years Amount
2013-2014 164,990 $
2014-2015 164,450
2015-2016 164,450
2016-2017 130,190
Total minimum lease payments 624,080 $
Compensated Absences
The District’s administrators and support staff are granted vacation time in varying amounts depending
on their years of service. Accumulated vacation days from one fiscal year shall be used by December
31st of the following year unless an extension is granted by the Superintendent. Unused accumulated
vacation days are transferred to sick leave.
The District allows employees to accumulate their unused sick leave as specified in negotiated labor
contracts, the support staff handbook and the administrative compensation plan. Sick leave used is
based on the last-in, first-out (LIFO) method. Twelve-month employees are granted twelve sick days
per year. Support staff and DAEA-eligible staff working ten months per year are granted ten days.
Part-time employees are granted sick days based on the number of hours/days worked.
Upon retirement, accumulated sick leave is paid out of the General Fund as follows:
Administrators: Upon meeting normal retirement standards as set forth by PSERS, 25% over the
DAEA-contract rate as long as policy provisions are met, or $62.50 a day for 2012-2013.
DAEA-eligible staff and support staff: Upon meeting normal retirement standards as set forth by
PSERS, or $50.00 a day for 2012-2013.
Superannuation retirees with twenty years, but less than normal retirement as set forth by PSERS, shall
receive 75% of the amounts detailed above.
Compensated absences totaling $22,782 are due within one year due to retirements of staff during the
year ended June 30, 2013.
All compensated absences are funded by the General Fund.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
64
Note 9. Affiliates
York County School of Technology (YCST)
York County School of Technology is a separate legal entity. The YCST provides vocational, technical
and career education to the students in its participating School Districts. The District is one of fourteen
member school districts of the YCST. Member school districts are responsible for funding the major
portion of YCST’s operating budget. The District’s financial obligation to YCST for the year ended
June 30, 2013, was $1,647,375 which has been reported in the General Fund. YCST has separate
financial statements available for further review of financial standing.
During 2010-2011, the District issued General Obligation Bonds - Series B of 2011, in the aggregate
amount of $1,710,000 for the purpose of providing funds to the YCST for the purposes of designing and
constructing roof replacements at the YCST. The debt-service on these bonds will be paid by the
member school districts to the YCST. Accordingly, the District has recorded a long-term receivable on
its government-wide Statement of Net Position to reflect the total amount due. The remaining principal
payments are scheduled to be made as follows.
Years Amount
2013-2014 340,000 $
2014-2015 350,000
2015-2016 360,000
1,050,000 $
The District anticipates, based on current enrollment, when it will make payments to the YCST to assist
in the funding of this debt-service.
Years Amount
2013-2014 43,868 $
2014-2015 43,926
2015-2016 43,904
131,698 $
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
65
Note 9. Affiliates (Continued)
York County School of Technology Authority
The District is also a member of the York County School of Technology Authority (Authority). The
Authority was created as a financing medium for construction, improvement and maintenance relative to
the operation of the York County School of Technology.
The Authority issued Lease Revenue Bonds - Series of 2007, in the aggregate amount of $42,330,000
for the purpose of providing funds for the advance refunding of the Authority’s Lease Revenue Bonds -
Series of 2003 and to pay for the costs of the bonds’ issuance. The Lease Revenue Bonds - Series of
2003, were used to pay for the costs of design and construction improvements, renovations and
extraordinary repairs to and the acquisition and installation of related equipment for the facilities of
York County School of Technology. The District is required, under terms of the lease, to pay lease
rentals in connection with the Lease Revenue Bonds - Series of 2003, as follows:
Years Amount
2013-2014 454,662 $
2014-2015 454,324
2015-2016 454,686
2016-2017 453,854
2017-2018 453,824
2019-2023 2,271,115
4,542,465 $
The District’s financial obligation to the Authority for the year ended June 30, 2013, was $497,787
which has been reported in the General Fund. The Authority has separate financial statements available
for further review of financial standing.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
66
Note 10. Defined-Benefit Pension Plan
Plan Description
Name of plan: The Public School Employees’ Retirement System (the System)
Type of plan: Governmental, cost-sharing, multiple-employer defined-benefit plan
Benefits: Retirement and disability, legislatively-mandated ad hoc cost-of-living adjustments, healthcare
insurance-premium assistance to qualifying annuitants
Authority: The Public School Employees’ Retirement Code (Act No. 96 of October 2, 1975, as amended)
(24 Pa. C.S. 8101-8535)
Annual Financial Report: The System issues a Comprehensive Annual Financial Report (CAFR) that
includes financial statements and required supplementary information for the plan. A copy of the report
may be obtained by writing to Diane J. Wert, Office of Financial Management, Public School Employees’
Retirement System, P.O. Box 125, Harrisburg, PA 17108-0125. The CAFR is also available on the
Publications page of the PSERS website at http://www.psers.state.pa.us/publications/general/cafr.htm.
Funding Policy
Authority: The contribution policy is established in the Public School Employees’ Retirement Code and
requires contributions by active members, employers, and the Commonwealth.
Contribution Rates
Member Contributions: Active members who joined the System prior to July 22, 1983, contribute at
5.25% (Membership Class T-C) or at 6.50% (Membership Class T-D) of the members’ qualifying
compensation. Members who joined the System on or after July 22, 1983, and who were active or
inactive as of July 1, 2001, contribute at 6.25% (Membership Class T-C) or at 7.50% (Membership Class
T-D) of the members’ qualifying compensation. Members who joined the System after June 30, 2001 and
before July 1, 2011, contribute at 7.50% (automatic Membership Class T-D). For all new hires and for
members who elected Class T-D membership, the higher contribution rates began with service rendered
on or after January 1, 2002. Members who joined the System after June 30, 2011, automatically
contribute at the Membership Class T-E rate of 7.50% (base rate) of the members’ qualifying
compensation. All new hires after June 30, 2011, who elect Class T-F membership, contribute at 10.30%
(base rate) of the members’ qualifying compensation. Membership Class T-E and T-F are affected by a
“shared risk” provision in Act 120 of 2010 that in future fiscal years could cause the Membership Class
T-E contribution rate to fluctuate between 7.50% and 9.50% and Membership Class T-F contribution rate
to fluctuate between 10.30% and 12.30%.
Employer Contributions: Contributions required of employers are based upon an actuarial valuation. For
fiscal year ended June 30, 2013, the rate of employers’ contributions was 12.36% of covered payroll. The
12.36% rate is composed of a pension contribution rate of 11.50% for pension benefits and 0.86% for
healthcare insurance-premium assistance.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
67
Note 10. Defined-Benefit Pension Plan (Continued)
The School District is required to pay the entire contribution and will be reimbursed by the
Commonwealth in an amount equal to the Commonwealth’s share as determined by the income-aid ratio
(as defined in Act 29 of 1994), which is at least one-half of the District’s total rate. The District's
contributions to the Plan, net of state-aid reimbursements, for the years ended June 30, 2013, 2012, and
2011, were $2,960,126, $2,093,295, and $1,488,691, respectively. These amounts are equal to the
required contributions for each year. The District’s contributions are funded and paid through the
District’s General and Food Service Funds.
The amount recognized for revenues and expenses for on-behalf payments relating to fringe benefits for
the year ended June 30, 2013, was $4,670,598.
This includes $1,740,472 to the Federal government for social security and Medicare taxes for the year
ended June 30, 2013. The School District pays these on-behalf payments directly to PSERS, and the
District is reimbursed by the Commonwealth for its appropriate share.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
68
Note 11. Other Post-Employment Benefits
The District maintains a single-employer, post-employment, defined-benefit healthcare plan. The plan
description and funding policy for the District is summarized in the chart below:
GROUP ELIGIBILITY COVERAGE AND PREMIUM SHARING DURATION
II. TEACHERS
Act 110/43 Benefit: All employees are eligible for this benefit upon retirement with 30 years of PSERS service or upon superannuation retirement (age
60 with 30 years of service, age 62 with 1 year of service, or 35 years of service regardless of age). Retired employees are allowed to continue coverage
for themselves and their dependents in the employer's group health plan until the retired employee reaches Medicare age. In order to obtain coverage,
retired employees must provide payment equal to the premium determined for the purpose of COBRA.
Notes:
III. SUPPORT STAFF
I. ADMINISTRATORS
Same as IA.
Same as IA.
Upon completion of 20 years
of PSERS service or Act 110-
43 eligibility.
Upon completion of 20 years
of PSERS service or Act 110-
43 eligibility.
Coverage is provided until
retirees are eligible for Medicare
or until retirees die, whichever is
earlier. Spousal coverage ends
with Spousal-Medicare eligibility
if earlier than above.
Coverage: Medical, Prescription-Drug, and Dental coverage for Retiree.
Premium Sharing: If the member completes 20 years of PSERS service, the member
may elect one of the two benefits below, otherwise Act 110-43 benefits apply (see
Notes):
If PP01 is elected: The District pays 80% of the single premium for medical and
prescription drug plus an additional 2% for each year of service above 20 years, up to
100% with 30 or more years of service. The retiree pays any remaining amount.
If PP02 is elected: The District pays the single premium for medical and prescription
drug. The retiree pays $150 per month (beginning at 7/1/2012).
The District also pays 100% of the single-dental premium.
Spousal Coverage: Available if paid by retiree
Coverage: Medical, Prescription-Drug, and Dental coverage for Retiree.
Premium Sharing: If the member completes 20 years of PSERS service, the member
may elect one of the two benefits below, otherwise Act 110-43 benefits apply (see
Notes):
If PP01 is elected: The District pays 40% of the single premium for medical and
prescription drug plus an additional 4% for each year of service above 20 years, up to
100% with 35 or more years of service. The District's contribution is capped at $4,000
per year. The retiree pays any remaining amount.
If PP02 is elected: The District pays the single premium for medical and prescription
drug. The retiree pays $150 per month (beginning at 7/1/2012).
The retiree may elect dental coverage by paying the full premium.
Spousal Coverage: Available if paid by retiree
Coverage: Medical, Prescription-Drug, and Dental coverage for Retiree.
Premium Sharing: If the member completes 20 years of PSERS service, the member
may elect one of the two benefits below, otherwise Act 110/43 benefits apply (see
Notes):
If PP01 is elected: The District pays 80% of the single premium for medical and
prescription drug. If the retiree has 30 years of service upon retirement, the District
will pay 100% of the single premium for medical and prescription drug. The District
contribution is capped at $4,000 per year. The Retiree pays any remaining amount.
If PP02 is elected: The District pays the single premium for medical and prescription
drug. The Retiree pays $150 per month (beginning at 7/1/2012).
The Retiree may elect dental coverage by paying the full premium.
Spousal Coverage: Available if paid by Retiree
Upon completion of 20 years
of PSERS service or Act 110-
43 eligibility.
Retired employees who elect coverage remit payments quarterly as calculated by the Business Office. For the
year ended June 30, 2013, the retiree-premiums paid by the District were $561,729.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
69
Note 11. Other Post-Employment Benefits (Continued)
Funding Policy
The contribution requirements of plan members are established by contractual obligations and may be
amended by the Board of School Directors. Required contributions are based on projected pay-as-you-go
financing requirements. Plan members receiving benefits contributed $295,437 through their required
monthly contributions. Costs related to the funding of the District’s OPEB obligation are budgeted and
paid for through the District’s General Fund.
Annual OPEB Cost
For 2013, the District funded 54.76% of its annual OPEB cost of $1,461,330 for the District’s employees.
The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for 2013 and the preceding years are as follows:
Percentage of
Annual Annual OPEB Cost Net OPEB
Fiscal Year Ended OPEB Cost Contributed Obligation
6/30/2011 829,985 $ 84.00% 546,394 $
6/30/2012 827,810 $ 90.00% 631,533 $
6/30/2013 1,461,330 $ 55.00% 1,292,612 $
Funding Progress
For the year ended June 30, 2013, the District has estimated the cost (annual expense) of providing retiree
health, and dental-care benefits through an actuarial valuation as of January 1, 2012. In accordance with
GASB Statement No. 45, the valuation computes an annual required contribution, which represents a
level of funding that, if paid on an on-going basis, is projected to cover normal cost each year and
amortize any unfunded actuarial liabilities over a period of thirty years. This valuation’s computed
contribution and actual funding are summarized as follows:
Amount
Annual required contribution 1,471,682 $
Interest on Net OPEB Obligation 28,419
Adjustment to ARC (38,771)
Annual OPEB cost 1,461,330
Amounts contributed
Payments of current premiums and claims (800,251)
Advance funding -
Increase in net OPEB obligation 661,079
OPEB obligation - beginning of the year 631,533
OPEB obligation - end of year 1,292,612 $
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
70
Note 11. Other Post-Employment Benefits (Continued)
The required schedule of funding progress immediately following the notes to the financial statements
presents information about whether the actuarial value of plan assets is increasing or decreasing relative
to the actuarial accrued liability for benefits.
The annual OPEB cost, the percentage contributed to the plan, and the net OPEB obligation for the
current year are as follows:
For Fiscal Year Ended June 30, 2013: Amount
Annual OPEB cost 1,461,330$
Percentage contributed 55%
Net OPEB obligation 1,292,612$
Actuarial Methods and Assumptions
Actuarial valuations of an on-going plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and the health-care cost trend. Amounts are determined
regarding the funded status of the plan, and the annual required contributions of the employer are subject
to continual revision as actual results are compared with past expectations and new estimates are made
about the future.
Projections of benefits for financial-reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the time
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used include techniques that are designed
to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspectives of the calculations.
In the January 1, 2012 actuarial valuation, the Entry-Age Normal Cost Method was used. The actuarial
assumptions include a 4.50% investment rate-of-return (net of administrative expenses), which is a
blended rate of the expected long-term and short-term investment returns on the District’s own assets to
be used for funding the current liability, and an annual health-care cost trend rate of 7.50% initially,
reduced by decrements to an ultimate rate of 5.50% by 2016. Both rates include a 4.50% inflation
assumption. The UAAL is being amortized over a 30-year open period as a level-dollar amount.
A separate, audited, GAAP-basis, post-employment benefit plan report is not issued.
All other post-employment benefits obligations are funded by the General Fund.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
71
Note 12. Derivative Financial Instruments
Objective of the Interest-Rate Swaps
As a means to manage interest-rate exposure, the District entered into two separate pay-fixed, interest-rate
swaps in connection with its Series of 1998 and 2000 General Obligation Bonds. The swap contracts
remained in effect after the refunding of the 1998 and 2000 bonds. The intention of the swaps was to
effectively change the District’s variable-interest rates on the bonds to lower synthetic-fixed rates.
Terms, Fair Value and Credit Risk
The terms, fair values, and credit risks of the outstanding swaps as of June 30, 2013, were as follows.
The notional amounts of the swaps matched the principal amounts of the original associated debt rather
than the 2008 Series. The District’s swap agreements contain scheduled reductions to outstanding
notional amounts that are expected to approximately follow scheduled or anticipated reductions in the
associated “bonds payable” category.
Swap
Notional Effective Fixed Rate Variable Rate Fair Termination
Amounts Date Paid Received Values Date
GO Bonds
Series of 2013 18,050,000$ 5/1/2006 3.816% 67% of LIBOR (1,816,399) $ 2/1/2018
GO Bonds
Series of 2013 3,930,000 5/1/2006 3.836% 67% of LIBOR (432,680) 5/1/2020
21,980,000$ (2,249,079) $
For the year ended June 30, 2013, the derivative instruments are considered to be investment derivatives,
with their fair values recorded as noncurrent liabilities on the Statement of Net Position and the changes
in their fair values recognized as components of interest expense in the Statement of Activities. During
the year ended June 30, 2013, $937,797 was recorded as a reduction of interest expense in the Statement
of Activities to reflect the change in fair values of the derivatives from July 1, 2012.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
72
Note 12. Derivative Financial Instruments (Continued)
Fair Value
Because interest rates have declined, all swaps had a negative fair value as of June 30, 2013. The
negative fair values may be countered by reductions in total interest payments required under the
variable-rate bonds, creating lower synthetic-fixed interest rates. Because the coupons on the
government’s variable-rate bonds adjust to changing interest rates, the bonds do not have corresponding
fair-value increases. The fair values were estimated using the zero-coupon method. This method
calculates the future net settlement payments required by the swaps, assuming that the current forward
rates implied by the yield curve correctly anticipate future spot-interest rates. These payments are then
discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon bonds due
on the date of each future net settlement on the swaps.
Credit Risk
As of June 30, 2013, the District was not exposed to credit risk because the swaps had negative fair
values. However, should interest rates change and the fair values of the swaps become positive, the
District would be exposed to credit risk in the amount of the derivatives’ fair values.
The swap agreements contain a collateral agreement with the counterparty. The swaps require full
collateralization of the fair values of the swaps should the counterparty’s credit rating fall below A as
issued by Standard & Poor’s Rating Service or A3 as issued by Moody’s Investors Service. Collateral on
all swaps is to be in the form of U.S. Government securities held by a third-party custodian.
The District also enters into master-netting agreements when the District has entered into more than one
derivative transaction with one counterparty.
Under the terms of these agreements, should one party become insolvent or otherwise default on its
obligations, close-out netting provisions permit the non-defaulting party to accelerate and terminate all
outstanding transactions and net the transactions’ fair values so that a single sum will be owed by, or
owed to, the non-defaulting party.
The District has executed two swap transactions with one counterparty. That counterparty is rated AA-
by Standard & Poor’s Rating Service and Aaa by Moody’s Investors Service.
Basis Risk
The swap exposes the District to basis risk should the relationship between the LIBOR BBA and the
variable rates charged on the loan change the synthetic rate on the bonds. The effect of the difference in
basis is indicated by the difference between the intended synthetic rate (3.816% for Series of 1998 Bonds
and 3.836% for Series of 2000 Bonds) and the actual synthetic rate as of June 30, 2013, (4.935% for
Series of 1998 Bonds and 4.955% for Series of 2000 Bonds). If a change occurs that results in the rates
moving to convergence, the expected cost-savings may not be realized.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
73
Note 12. Derivative Financial Instruments (Continued)
Tax Risk
Tax risk is a specific type of basis risk. Tax risk is a permanent mismatch between the interest rate paid
on the District’s underlying variable-rate bonds and the rate received on the swap caused by a reduction
or elimination in the benefits of the tax-exemption for municipal bonds (e.g., a tax cut that results in an
increase in the ratio of tax-exempt to taxable yields). The District is receiving 67% of LIBOR (a taxable
index) on the swaps and would experience a shortfall relative to the rates paid on its bonds if marginal
income-tax rates decrease relative to expected levels, thus increasing the overall cost of its synthetic-fixed
rate debt.
Termination Risk
The derivative contracts use the International Swap Dealers Association Master Agreement, which
includes standard termination events, such as a failure to pay and bankruptcy. The District or the
counterparty may terminate the swap if the other party fails to perform under the terms of the contract. If
the swap is terminated, the variable-rate bonds would no longer carry synthetic interest rates. Also, if at
the time of termination the swaps had negative fair values, the District would be liable to the counterparty
for a payment equal to the swaps’ fair values.
Note 13. Commitments and Contingencies
Risk Management
The District is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets
and errors or omissions. Significant losses are covered by commercial insurance for all major programs.
For insured programs, there have been no significant reductions in settlement coverage. Settlement
amounts have not exceeded insurance coverage for the current year or three prior years.
Grant Programs
The District participates in numerous state and Federal grant programs, which are governed by various
rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject
to audit and adjustment by the grantor agencies; therefore, to the extent that the District has not complied
with the rules and regulations governing the grants, refunds of any money received may be required, and
the collectability of any related receivables at June 30, 2013, may be impaired. In the opinion of the
District, there are no significant contingent liabilities relating to compliance with the rules and regulations
governing the respective grants; therefore, no provision has been recorded in the accompanying financial
statements for such contingencies.
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
74
Note 13. Commitments and Contingencies (Continued)
Construction Contracts
The District has one active construction contract, completion of the HVAC system at the Intermediate
School, as of June 30, 2013.
At year-end the government's commitments with contractors are as follows:
Project Spent-to-Date
Remaining
Commitment
Intermediate School building, furniture and equipment 59,944,077$ 5,690$
General Obligation Bonds - Series of 2013 and Series A of 2013
The Board of School Directors and the District’s management team anticipate the refinancing of the
General Obligation Bonds - Series of 2013 and Series A of 2013, prior to their maturity on April 16, 2014.
Note 14. Fund Balance Classifications
The District has classified certain portions of the General and Capital Projects Funds’ fund balances as
follows:
General Capital Projects
Fund Fund
Nonspendable, reported in:
Prepaids 40,811 $ -$
Restricted for, reported in:
Capital Projects Fund - 2,562,241
Committed to, reported in:
Health insurance reserve 1,000,000 -
Various high school projects 62,939 -
PSERS reserve 3,642,136 -
Turf Project - 23,459
Assigned, reported in:
Budget utilization for 2013-2014 893,419 -
Athletic Fund 49,449 -
Unassigned, reported in:
General Fund 7,328,576 -
13,017,330 $ 2,585,700 $
REQUIRED SUPPLEMENTARY INFORMATION
DALLASTOWN AREA SCHOOL DISTRICT
REQUIRED SUPPLEMENTARY INFORMATION - OTHER POST-EMPLOYMENT
BENEFIT PLAN
Year Ended June 30, 2013
75
Actuarial
Accrued UAAL as a
Actuarial Liability Unfunded Percentage
Actuarial Value of (AAL)- AAL Funded Covered of Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (c) ((b-a)/c)
1/1/2008 -$ 6,708,692$ 6,708,692$ 0.00% 37,304,072$ 17.98%
1/1/2010 -$ 7,258,535$ 7,258,535$ 0.00% 43,160,439$ 16.82%
1/1/2012 -$ 11,676,860$ 11,676,860$ 0.00% 42,918,295$ 27.21%
SUPPLEMENTARY INFORMATION
76
DALLASTOWN AREA SCHOOL DISTRICT
GENERAL FUND
SCHEDULES OF REVENUES AND OTHER FINANCING SOURCES - BUDGET TO ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
Final Budget Actual
Variance with
Final Budget
Positive (Negative)
LOCAL REVENUE SOURCES
Current Real Estate Tax 59,744,716 $ 59,278,793 $ (465,923) $
Interim Real Estate Tax 550,000 759,385 209,385
Public Utility Realty Tax 88,000 91,549 3,549
Payments in Lieu of Current Taxes - 1,050 1,050
Earned Income Taxes - Act 511 4,500,000 5,126,189 626,189
Real Estate Transfer Tax 650,000 645,894 (4,106)
Delinquent Real Estate Taxes 1,600,000 1,323,552 (276,448)
Delinquent Earned Income Taxes 215,000 18,077 (196,923)
Interest on Investments 275,000 90,576 (184,424)
Admissions - 84,363 84,363
Commissions - 62 62
Federal IDEA Revenue Received as Pass Through 800,250 1,165,304 365,054
Federal Revenues from Other Sources 59,500 63,810 4,310
Rentals 60,000 40,107 (19,893)
Contributions from Private Sources - 287 287
Regular Day School Tuition 13,000 - (13,000)
Summer School Tuition 55,000 54,351 (649)
Adult Education Tuition 34,650 37,461 2,811
Receipts from Other LEAs in Pennsylvania 140,000 178,803 38,803
Revenue from Community Service Activities 40,000 43,075 3,075
Miscellaneous Revenue 45,618 67,385 21,767
Energy Incentives/Credits 37,500 72,593 35,093
Refunds of a Prior Year Expenditure - - -
TOTAL REVENUES FROM LOCAL SOURCES 68,908,234 $ 69,142,666 $ 234,432 $
77
DALLASTOWN AREA SCHOOL DISTRICT
GENERAL FUND
SCHEDULES OF REVENUES AND OTHER FINANCING SOURCES - BUDGET TO ACTUAL (Continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
Final Budget Actual
Variance with
Final Budget
Positive (Negative)
STATE REVENUE SOURCES
Basic Instructional Subsidy 7,887,577 $ 7,885,824 $ (1,753) $
Tuition - Section 1305/1306 120,000 200,795 80,795
Special Education 2,431,168 2,431,071 (97)
Transportation (Regular & Additional) 1,377,430 1,210,423 (167,007)
Rentals & Sinking Fund Payments 905,900 858,078 (47,822)
Health Services 112,250 109,521 (2,729)
State Property Tax Reduction Allocation 1,382,443 1,382,443 -
Pa Accountability Grant - 183,342 183,342
State Share Soc Security and Medicare Tax 1,947,975 1,677,781 (270,194)
State Share of Retirement Contributions 2,802,200 2,520,144 (282,056)
TOTAL STATE REVENUE SOURCES 18,966,943 $ 18,459,422 $ (507,521) $
FEDERAL REVENUE SOURCES
Title I - Basic Program 443,800 $ 479,373 $ 35,573 $
Title II - Improving Teacher Quality 136,850 111,330 (25,520)
Title III - ESL 16,900 27,413 10,513
School-Based Access Medicaid Reimbursement 100,000 2,215 (97,785)
TOTAL FEDERAL REVENUE SOURCES 697,550 $ 620,331 $ (77,219) $
OTHER REVENUE SOURCES
Transfers in 395,000 $ -$ (395,000) $
Sale of Capital Assets 1,000 7,537 6,537
TOTAL OTHER REVENUE SOURCES 396,000 $ 7,537 $ (388,463) $
88,968,727 $ 88,229,956 $ (738,771) $ TOTAL LOCAL, STATE, FEDERAL AND OTHER REVENUES
78
DALLASTOWN AREA SCHOOL DISTRICT
GENERAL FUND
SCHEDULES OF EXPENDITURES AND OTHER FINANCING USES -
BUDGET TO ACTUAL (Continued on next page)
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
EXPENDITURES
Original
Budget
Transfers
Increase
(Decrease)
Final Revised
Budget Actual
Variance with
Final Budget
Positive
(Negative)
REGULAR PROGRAMS
Salaries 30,311,850$ (332,000)$ 29,979,850$ 29,978,134$ 1,716$
Employee Benefits 11,320,300 (291,000) 11,029,300 11,028,565 735
Purchased Professional Services 37,875 10,275 48,150 30,101 18,049
Purchased Property Services 309,650 (49,100) 260,550 260,499 51
Other Purchased Services 1,227,625 19,500 1,247,125 1,247,087 38
Supplies and Material 1,315,550 254,450 1,570,000 1,517,427 52,573
Property 430,850 92,350 523,200 482,767 40,433
Other Objects 5,400 5,100 10,500 10,487 13
TOTAL REGULAR PROGRAMS 44,959,100$ (290,425)$ 44,668,675$ 44,555,067$ 113,608$
SPECIAL PROGRAMS
Salaries 3,889,700$ 39,000$ 3,928,700$ 3,928,244$ 456$
Employee Benefits 1,411,200 85,000 1,496,200 1,495,448 752
Purchased Professional Services 2,900,100 134,000 3,034,100 3,034,093 7
Purchased Property Services - - - -
Other Purchased Services 711,450 399,840 1,111,290 1,111,092 198
Supplies and Material 26,900 (150) 26,750 19,932 6,818
Property - - - -
Other Objects 650 - 650 - 650
TOTAL SPECIAL PROGRAMS 8,940,000$ 657,690$ 9,597,690$ 9,588,809$ 8,881$
VOCATIONAL EDUCATION
Salaries -$ -$ -$ -$ -$
Employee Benefits - - - - -
Purchased Professional Services - - - - -
Other Purchased Services 1,130,400 430,510 1,560,910 1,405,620 155,290
Supplies and Material - - - - -
Other Objects - - - - -
TOTAL VOCATIONAL EDUCATION 1,130,400$ 430,510$ 1,560,910$ 1,405,620$ 155,290$
OTHER INSTRUCTIONAL PROGRAMS
Salaries 529,900$ -$ 529,900$ 474,617$ 55,283$
Employee Benefits 129,900 - 129,900 129,667 233
Purchased Professional Services 84,050 82,000 166,050 166,014 36
Purchased Property Services 1,200 250 1,450 1,074 376
Other Purchased Services 145,000 (59,000) 86,000 85,144 856
Supplies and Material 55,650 (13,750) 41,900 26,022 15,878
Property 20,000 (19,700) 300 265 35
Other Objects 1,000 - 1,000 525 475
966,700$ (10,200)$ 956,500$ 883,328$ 73,172$
NONPUBLIC SCHOOL PROGRAMS
Purchased Professional Services -$ 5,000$ 5,000$ 4,394$ 606$
TOTAL NONPUBLIC SCHOOL PROGRAMS -$ 5,000$ 5,000$ 4,394$ 606$
ADULT EDUCATION PROGRAMS
Salaries 2,150$ 600$ 2,750$ 2,702$ 48$
Employee Benefits 400 - 400 370 30
Purchased Professional Services 26,000 1,000 27,000 26,988 12
Other Purchased Services 6,100 2,000 8,100 8,036 64
Supplies and Material - - - - -
34,650$ 3,600$ 38,250$ 38,096$ 154$
TOTAL INSTRUCTIONAL 56,030,850$ 796,175$ 56,827,025$ 56,475,314$ 351,711$
TOTAL ADULT EDUCATION
TOTAL OTHER INSTRUCTIONAL
INSTRUCTIONAL
79
DALLASTOWN AREA SCHOOL DISTRICT
GENERAL FUND
SCHEDULES OF EXPENDITURES AND OTHER FINANCING USES -
BUDGET TO ACTUAL (Continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
EXPENDITURES
Original
Budget
Transfers
Increase
(Decrease)
Final Revised
Budget Actual
Variance with
Final Budget
Positive
(Negative)
SUPPORT SERVICES
PUPIL PERSONNEL
Salaries 1,954,800$ (2,200)$ 1,952,600$ 1,946,192$ 6,408$
Employee Benefits 804,750 32,000 836,750 836,706 44
Purchased Professional Services 14,975 83,250 98,225 97,629 596
Purchased Property Services - - -
Other Purchased Services 26,375 (8,700) 17,675 6,841 10,834
Supplies and Material 56,250 10,450 66,700 57,027 9,673
Property - - -
Other Objects 1,025 - 1,025 395 630
TOTAL PUPIL PERSONNEL 2,858,175$ 114,800$ 2,972,975$ 2,944,790$ 28,185$
INSTRUCTIONAL STAFF
Salaries 1,245,300$ -$ 1,245,300$ 1,236,873$ 8,427$
Employee Benefits 491,150 - 491,150 471,642 19,508
Purchased Professional Services 150,225 (69,500) 80,725 24,466 56,259
Purchased Property Services 13,400 (3,700) 9,700 3,594 6,106
Other Purchased Services 29,705 500 30,205 17,507 12,698
Supplies and Material 150,450 14,600 165,050 151,654 13,396
Property 25,000 5,650 30,650 21,922 8,728
Other Objects 5,500 2,000 7,500 4,439 3,061
TOTAL INSTRUCTIONAL STAFF 2,110,730$ (50,450)$ 2,060,280$ 1,932,097$ 128,183$
ADMINISTRATION
Salaries 2,327,700$ 133,000$ 2,460,700$ 2,459,949$ 751$
Employee Benefits 965,900 - 965,900 947,050 18,850
Purchased Professional Services 185,975 (625) 185,350 158,387 26,963
Purchased Property Services 12,600 (3,700) 8,900 1,052 7,848
Other Purchased Services 168,875 62,950 231,825 231,820 5
Supplies and Material 29,050 8,550 37,600 37,107 493
Property - 8,300 8,300 8,077 223
Other Objects 57,450 1,150 58,600 48,992 9,608
TOTAL ADMINISTRATION 3,747,550$ 209,625$ 3,957,175$ 3,892,434$ 64,741$
PUPIL HEALTH
Salaries 551,450$ -$ 551,450$ 540,672$ 10,778$
Employee Benefits 236,900 - 236,900 236,686 214
Purchased Professional Services 193,000 - 193,000 190,005 2,995
Purchased Property Services 1,850 - 1,850 737 1,113
Other Purchased Services 1,400 - 1,400 20 1,380
Supplies and Material 18,450 700 19,150 13,412 5,738
Property 7,300 (700) 6,600 2,253 4,347
TOTAL PUPIL HEALTH 1,010,350$ -$ 1,010,350$ 983,785$ 26,565$
80
DALLASTOWN AREA SCHOOL DISTRICT
GENERAL FUND
SCHEDULES OF EXPENDITURES AND OTHER FINANCING USES -
BUDGET TO ACTUAL (Continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
EXPENDITURES
Original
Budget
Transfers
Increase
(Decrease)
Final Revised
Budget Actual
Variance with
Final Budget
Positive
(Negative)
BUSINESS
Salaries 421,300$ 4,000$ 425,300$ 416,933$ 8,367$
Employee Benefits 177,950 3,550 181,500 181,454 46
Purchased Professional Services 46,600 6,500 53,100 52,823 277
Purchased Property Services 7,500 (4,800) 2,700 2,547 153
Other Purchased Services 4,000 2,500 6,500 6,302 198
Supplies and Material 42,150 5,450 47,600 47,536 64
Property - 3,000 3,000 2,650 350
Other Objects 8,000 600 8,600 8,562 38
TOTAL BUSINESS 707,500$ 20,800$ 728,300$ 718,807$ 9,493$
OPERATION AND MAINTENANCE OF PLANT SERVICES
Salaries 2,427,150$ -$ 2,427,150$ 2,300,440$ 126,710$
Employee Benefits 1,213,700 - 1,213,700 1,152,213 61,487
Purchased Professional Services 106,975 13,500 120,475 120,138 337
Purchased Property Services 1,624,050 (88,500) 1,535,550 1,359,911 175,639
Other Purchased Services 471,200 (109,900) 361,300 322,049 39,251
Supplies and Material 1,038,550 (78,900) 959,650 774,423 185,227
Property 24,700 900 25,600 21,007 4,593
Other Objects 8,950 2,500 11,450 9,427 2,023
6,915,275$ (260,400)$ 6,654,875$ 6,059,608$ 595,267$
STUDENT TRANSPORTATION SERVICES
Salaries 26,050$ 10,000$ 36,050$ 35,534$ 516$
Employee Benefits 22,100 5,000 27,100 26,523 577
Purchased Professional Services - - -
Purchased Property Services - - -
Other Purchased Services 3,595,944 295,000 3,890,944 3,890,763 181
Supplies and Material 800 - 800 34 766
Property - 100 100 25 75
Other Objects - - - - -
3,644,894$ 310,100$ 3,954,994$ 3,952,879$ 2,115$
CENTRAL
Salaries 860,500$ -$ 860,500$ 829,249$ 31,251$
Employee Benefits 329,250 9,000 338,250 338,179 71
Purchased Professional Services 73,600 (3,050) 70,550 63,921 6,629
Purchased Property Services 70,500 (2,000) 68,500 27,405 41,095
Other Purchased Services 54,925 6,450 61,375 61,302 73
Supplies and Material 214,500 6,150 220,650 202,786 17,864
Property 80,000 279,950 359,950 347,626 12,324
Other Objects 6,300 - 6,300 2,447 3,853
TOTAL CENTRAL 1,689,575$ 296,500$ 1,986,075$ 1,872,915$ 113,160$
OTHER SUPPORT SERVICES
Other Purchased Services 124,350$ 1,500$ 125,850$ 125,821$ 29$
124,350$ 1,500$ 125,850$ 125,821$ 29$
TOTAL SUPPORT SERVICES 22,808,399$ 642,475$ 23,450,874$ 22,483,136$ 967,738$
TOTAL OPERATION AND
MAINTENANCE OF PLANT SERVICES
TOTAL STUDENT TRANSPORTATION
SERVICES
TOTAL OTHER SUPPORT SERVICES
81
DALLASTOWN AREA SCHOOL DISTRICT
GENERAL FUND
SCHEDULES OF EXPENDITURES AND OTHER FINANCING USES -
BUDGET TO ACTUAL (Continued)
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
EXPENDITURES
Original
Budget
Transfers
Increase
(Decrease)
Final Revised
Budget Actual
Variance with
Final Budget
Positive
(Negative)
OPERATION OF NON-INSTRUCTIONAL SERVICES
STUDENT ACTIVITIES
Salaries 859,500$ 1,600$ 861,100$ 861,084$ 16$
Employee Benefits 209,900 - 209,900 199,493 10,407
Purchased Professional Services 59,200 44,500 103,700 103,278 422
Purchased Property Services 45,000 350 45,350 15,925 29,425
Other Purchased Services 130,100 19,800 149,900 149,351 549
Supplies and Material 123,600 92,300 215,900 215,147 753
Property 33,200 (4,200) 29,000 18,169 10,831
Other Objects 5,600 9,300 14,900 14,815 85
TOTAL STUDENT ACTIVITIES 1,466,100$ 163,650$ 1,629,750$ 1,577,262$ 52,488$
COMMUNITY SERVICES
Salaries 65,550$ -$ 65,550$ 65,178$ 372$
Employee Benefits 13,500 - 13,500 9,987 3,513
Purchased Professional Services - - - - -
Other Purchased Services - 200 200 120 80
Supplies and Material - 5,100 5,100 5,095 5
Other Objects 9,950 - 9,950 4,700 5,250
TOTAL COMMUNITY SERVICES 89,000$ 5,300$ 94,300$ 85,080$ 9,220$
TOTAL OPERATION OF
1,555,100$ 168,950$ 1,724,050$ 1,662,342$ 61,708$
FACILITIES ACQUISITION, CONSTRUCTION AND IMPROVEMENT SERVICES
EXISTING BUILDING IMPROVEMENT SERVICES
Purchased Property Services -$ -$ -$ -$ -$
Property - - - - -
-$ -$ -$ -$ -$
CONSTRUCTION AND
IMPROVEMENT SVC. -$ -$ -$ -$ -$
OTHER EXPENDITURES AND FINANCING USES
DEBT SERVICE AND OTHER EXPENDITURES/FINANCING USES
Interest 3,291,700$ (1,229,750)$ 2,061,950$ 2,061,426$ 524$
Redemption of Bonds or Capital Leases 5,395,450 63,150 5,458,600 5,458,581 19
Refunds of Prior Year's Receipts 450,000 (439,000) 11,000 9,846 1,154
USES USES 9,137,150$ (1,605,600)$ 7,531,550$ 7,529,853$ 1,697$
282,700$ 198,000$ 480,700$ 419,773$ 60,927$
BUDGETARY RESERVE 200,000$ (200,000)$ -$ -$ -$
9,619,850$ (1,607,600)$ 8,012,250$ 7,949,626$ 62,624$
90,014,199$ -$ 90,014,199$ 88,570,418$ 1,443,781$
NON-INSTRUCTIONAL SERVICES
EXPENDITURES/FINANCING
INTERFUND TRANSFERS - OUT
TOTAL GENERAL FUND EXPENDITURES
TOTAL FACILITIES ACQUISITION,
TOTAL EXISTING BUILDING
IMPROVEMENT SERVICES
TOTAL OTHER EXPENDITURES AND
TOTAL DEBT SERVICE AND OTHER
FINANCING USES
STATEMENT OF CHANGES IN
ASSETS AND LIABILITIES -
FIDUCIARY FUND - STUDENT
ACTIVITIES AGENCY FUND
JUNE 30, 2013
The Agency Fund accounts for assets held by the District as an agent for various
student groups within the Middle and High Schools.
82
DALLASTOWN AREA SCHOOL DISTRICT
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES -
STUDENT ACTIVITIES AGENCY FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
Beginning Balance,
7/1/12 Additions Reductions
Ending Balance,
6/30/13
Assets
Cash and cash equivalents 237,691 $ 617,670 $ 591,373 $ 263,988 $
Investments 12,810 61 61 12,810
Total Assets 250,501 $ 617,731 $ 591,434 $ 276,798 $
Liabilities
Due to student groups 250,501 $ 617,731 $ 591,434 $ 276,798 $
Total Liabilities 250,501 $ 617,731 $ 591,434 $ 276,798 $
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of School Directors
Dallastown Area School District
Dallastown, Pennsylvania
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
Dallastown Area School District, as of and for the year ended June 30, 2013, and the related notes to the
financial statements, which collectively comprise Dallastown Area School District’s basic financial
statements, and have issued our report thereon dated November 12, 2013.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered Dallastown Area School
District's internal control over financial reporting (internal control) to determine the audit procedures that
are appropriate in the circumstances for the purpose of expressing our opinions on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of Dallastown Area
School District’s internal control. Accordingly, we do not express an opinion on the effectiveness of
Dallastown Area School District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control 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 material weaknesses. However,
material weaknesses may exist that have not been identified.
84
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Dallastown Area School 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.
Camp Hill, Pennsylvania
November 12, 2013
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR
FEDERAL PROGRAM AND REPORT ON INTERNAL CONROL OVER COMPLIANCE
AS REQUIRED BY OMB CIRCULAR A-133
Board of School Directors
Dallastown Area School District
Dallastown, Pennsylvania
Report on Compliance for Each Major Federal Program
We have audited Dallastown Area School District’s compliance with the types of compliance
requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and
material effect on each of Dallastown Area School District’s major Federal programs for the year ended
June 30, 2013. Dallastown Area School 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 the requirements of laws, regulations, contracts and
grants applicable to its Federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of Dallastown Area School 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 OMB Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133
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
Dallastown Area School 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 Dallastown Area School
District’s compliance.
Opinion on Each Major Federal Program
In our opinion, Dallastown Area School 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, 2013.
86
Report on Internal Control Over Compliance
Management of Dallastown Area School District is responsible for establishing and maintaining effective
internal control over compliance with the types of compliance requirements referred to above. In planning
and performing our audit of compliance, we considered Dallastown Area School District’s internal
control over compliance with the types of requirements that could have a direct and material effect on
each major Federal program to determine the auditing procedures that are appropriate in the
circumstances for the purpose of expressing an opinion on compliance for each major Federal program
and to test and report on internal control over compliance in accordance with OMB Circular A-133, but
not for the purpose of expressing an opinion on the effectiveness of internal control over compliance.
Accordingly, we do not express an opinion on the effectiveness of Dallastown Area School District’s
internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
Federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies, in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance with a type of compliance requirement of a Federal program that is less severe than a material
weakness in internal control over compliance, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.
Camp Hill, Pennsylvania
November 12, 2013
87
DALLASTOWN AREA SCHOOL DISTRICT
Schedule of Findings and Questioned Costs
Year Ended June 30, 2013
Section I -- Summary of Auditor's Results
Financial Statements
Type of auditor's report issued: Unqualified
Internal control over financial reporting:
● Material weakness (es) identified? Yes X No
● Significant deficiency(ies) identified that are not
considered to be a material weakness (es)? Yes X No
Noncompliance material to financial statements
noted? ___ Yes X No
Federal Awards
Internal control over major programs:
● Material weakness (es) identified? Yes X No
● Significant deficiency(ies) identified that are not
considered to be a material weakness (es)? Yes X None Reported
Type of auditor's report issued on compliance for the major programs: Unqualified
● Any audit findings disclosed that are
required to be reported in accordance
with Section .510(a) of Circular A-133? Yes X No
88
DALLASTOWN AREA SCHOOL DISTRICT
Schedule of Findings and Questioned Costs (Continued)
Year Ended June 30, 2013
Identification of the major programs:
CFDA Number(s) Name of Federal Programs/Cluster
84.027
Special Education - Grants to States
84.010 Title I - Grants to Local Educational Agencies
Dollar threshold used to distinguish between
type A and type B programs $300,000
Auditee qualified as low-risk auditee? X Yes No
Section II -- Financial-Statement Findings
A. Significant Deficiency(ies) in Internal Control
There were no findings relating to the financial statement audit required to be reported.
B. Compliance Findings
There were no compliance findings relating to the financial statement audit required to be
reported.
Section III -- Federal-Award Findings and Questioned Costs
A. Compliance Findings
There were no findings relating to the Federal awards required to be reported in
accordance with Section .510(a) of OMB Circular A-133.
B. Significant Deficiency(ies) in Internal Control
There were no findings relating to the Federal awards required to be reported in
accordance with Section .510(a) of OMB Circular A-133.
89
DALLASTOWN AREA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued on the next page)
Year Ended June 30, 2013
Federal Pass-Through Program
Source C.F.D.A. Grantor's Grant or Annual
Grantor Program Title Code Number Number Period Award
U.S. Department of Education
Passed through the PA Dept. of Education
Title I - Grants to Local Educational Agencies I 84.010 013-130112 12-13 479,567 $
Title I - Grants to Local Educational Agencies I 84.010 013-120112 11-12 388,653 $
Title II - Improving Teacher Quality I 84.367 020-130112 12-13 111,330 $
Title II - Improving Teacher Quality I 84.367 020-120112 11-12 110,467 $
Title III - Language Instruction I 84.365 010-130112 12-13 29,060 $
Education Jobs Fund I 84.410 140-120112 11-12 8,546 $
Passed through Lincoln Intermediate Unit
Special Education - Grants to States I 84.027 N/A 12-13 1,119,679 $
Passed through Shippensburg University
I3 Reading Recovery Grant I 84.411 N/A 11-13 6,000 $
Total U.S. Department of Education
U.S. Department of Health and Human Services
Passed through the PA Dept. of Public Welfare
Medical Assistance Program; Title XIX I 93.778 N/A 12-13 2,215 $
Total U.S. Department of Health and Human
Services
90
Accrued or Accrued or
Total (Deferred) (Deferred)
Received for Revenue at Revenue Expenditures Revenue at
the Year July 1, 2012 Recognized Recognized June 30, 2013
387,788 $ -$ 479,373 $ 479,373 $ 91,585 $
75,088 75,088 - - -
81,851 - 111,330 111,330 29,479
29,235 29,235 - - -
25,185 - 27,412 27,412 2,227
8,546 8,546 - - -
1,119,679 - 1,119,679 1,119,679 -
- (6,000) 5,790 5,790 (210)
1,727,372 106,869 1,743,584 1,743,584 123,081
1,337 - 2,215 2,215 878
1,337 - 2,215 2,215 878
91
DALLASTOWN AREA SCHOOL DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
Year Ended June 30, 2013
Federal Pass-Through Program
Source C.F.D.A. Grantor's Grant or Annual
Grantor Program Title Code Number Number Period Award
U.S. Department of Agriculture
Passed through PA Department of Education
National School Lunch Program I 10.555 N/A 12-13 N/A
National School Lunch Program I 10.555 N/A 11-12 N/A
School Breakfast Program I 10.553 N/A 12-13 N/A
School Breakfast Program I 10.553 N/A 11-12 N/A
Passed through the PA Department of Agriculture
National School Lunch Program - Food Donations I 10.555 N/A 11-12 N/A
Total U.S. Department of Agriculture
Total Expenditures of Federal Awards
Test of 25% rule:
Total Federal Expenditures 2,752,916
Programs selected for testing major programs
Title I - Grants to Local Educational Agencies 479,373 $
Special Education - Grants to States 1,119,679
1,599,052 / $ 2,752,916 = 58.09%
Source Codes:
D - Direct Funding
I - Indirect Funding
See Notes to Schedule of Expenditures of Federal Awards.
92
Accrued or Accrued or
Total (Deferred) (Deferred)
Received for Revenue at Revenue Expenditures Revenue at
the Year July 1, 2012 Recognized Recognized June 30, 2013
715,063 - 722,592 722,592 7,529
6,137 6,137 - - -
150,289 - 152,027 152,027 1,738
1,236 1,236 - - -
132,498 - 132,498 132,498 -
1,005,223 7,373 1,007,117 1,007,117 9,267
2,733,932 $ 114,242 $ 2,752,916 $ 2,752,916 $ 133,226 $
DALLASTOWN AREA SCHOOL DISTRICT
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
93
Note 1. Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the Federal-
grant activity of Dallastown Area School District under programs of the Federal government for the year
ended June 30, 2013. The information in this Schedule is presented in accordance with the requirements
of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments,
and Non-Profit Organizations. Because the Schedule presents only a selected portion of the operations of
the Dallastown Area School District, it is not intended to and does not present the net position, changes in
net position or cash flows of the Dallastown Area School District.
Note 2. Significant Accounting Policies
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such
expenditures are recognized following the cost principles contained in OMB Circular A-87, Cost
Principles for State, Local and Indian Tribal Governments, wherein certain types of expenditures are not
allowable or are limited as to reimbursement. Revenue is recognized when earned, and expenses are
recognized when incurred. Negative amounts shown on the Schedule represent adjustments or credits
made in the normal course of business to amounts reported as expenditures in prior years. Pass-through
entity identifying numbers are presented where available.
DALLASTOWN AREA SCHOOL DISTRICT
SUMMARY SCHEDULE OF PRIOR YEAR’S AUDIT FINDINGS
Year Ended June 30, 2013
94
There were no prior year’s audit findings.