Postville Community School District Independent Auditor's ... · PDF fileStatement of Net Position ... My responsibility is to express an opinion on compliance for each of Postville

Postville Community School District

Independent Auditor's Reports Basic Financial Statements

And Supplementary Information Schedule of Findings

June 30, 2017

Officials Independent Auditor's Report Management's Discussion and Analysis

Basic Financial Statements: Government-wide Financial Statements:

Statement of Net Position Statement of Activities

Governmental Fund Financial Statements: Balance Sheet

Table of Contents

Reconciliation of the Balance Sheet-Governmental Funds to the Statement of Net Position Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances

Governmental Funds to the Statement of Activities Proprietary Fund Financial Statements:

Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows

Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position

Notes to Financial Statements

Required Supplementary Information: Budgetary Comparison Schedule of Revenue, Expenditures/Expenses And Changes in Balances-

Budget and Actual · All Governmental Funds and Proprietary Funds Notes to Required Supplementary lnfonnation-Budgetary Reporting Schedule of the District's Proportionate Share of the Net Pension Liability Schedule of District Contributions Notes to Required Supplementary Infonnation - Pension Liability Schedule of Funding Progress for the Retiree Health Plan

Supplementary Information: Non-major Governmental Funds:

Combining Balance Sheet Combining Schedule of Revenues, Expenditures and Changes In Fund Balances

Capital Projects Fund Accounts: Combining Balance Sheet Combining Schedule of Revenues, Expenditures and Changes in Balances

Schedule of Changes in Special Revenue Fund-Student Activity Accounts Schedule of Changes in Fiduciary Assets and Liabilities-Agency Funds-Summary Schedule of Changes in Fiduciary Assets and Liabilities-Agency Funds-Detail Schedule of Fiduciary Net Position-Private Purpose Trusts Schedule of Change in Fiduciary Net Position-Private Purpose Trusts Schedule of Revenues by Source and Expenditures by Function-All Governmental Funds Schedule of Expenditures of Federal Awards

Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

Independent Auditor's Report on Compliance for Each Major Federal Program and on Internal Control over Compliance required by the Uniform Guidance

Schedule of Findings Summary Schedule of Prior Audit Findings Corrective Action Plan

Exhibit

A B

C D E

F

G H I

J K

Schedule

I 2

3 4 5 6 7 8 9 10 11

Page I

2-3 4-IO

11-12 13-14

15 16

17-18

19

20 21 22

23 24

25-39

40 41 42 43 44 45

46 47

48 49 50 51 52 53 54 55

56-57

58-59

60-61

62-72 73 74


Officials

Name Title Term Expires

Board of Education

Jamie Smith President 2019

Brad Rekow Vice President 2017

Jeff Cox Board Member 2019 JoAnn Jacobs Board Member 2019 Staci Malcom Board Member 2017

School Officials

Abe Maske Superintendent 2017

Clara Lensing* District Secretary/Business Manager 2017

Mike Kruckenberg District Treasurer 2017

Ahlers & Cooney Attorney 2017

*Retired June 30, 20 I 7

Page I

Keith Oltrogge, CPA, P.C.

To the Board of Education of Postville Community School District:

Report on the Financial Statements

Independent Auditor's Report

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I have audited the accompanying financial statements of the governmental activities, the business type activities, each major fund and the aggregate remaining fund information of Postville Community School District, Postville, Iowa, as of and for the year ended June 30, 2017, and the related Notes to Financial Statements, which collectively comprise the District's basic financial statements 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 U.S. generally accepted accounting principles. 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

My responsibility is to express opinions on these financial statements based on my audit. I conducted my audit in accordance with U.S. generally accepted auditing standards and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I 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 District'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 District's internal control. Accordingly, I 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.

l believe the audit evidence l have obtained is sufficient and appropriate to provide a basis for my audit opinions.

Opinions

In my 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 Postville Community School District, as of June 30, 2017, and the respective changes in its financial position and, where applicable, its cash flows thereof for the year then ended in accordance with lJ.S. generally accepted accounting principles.

/v\EfIBFR: b.tm Srxie1y of Certified Pubiic Accoun1ants • Minnesoro Society of Ce11ified Public Accounlonts • A.rn1:-ricon lnc,tilute of Co21Llied Accounlon!s ~ Divisio'l for CP/1. Firms ~ P1i,mte Companies Proc!ice Section

Page 2

Other Matters

Required Supplement my Jnf(Jrmation

U.S. generally accepted accounting principles require Management's Discussion and Analysis, the Budgetary Comparison Information, the Schedule of the District's Proportionate Share of the Net Pension Liability, the Schedule of District Contributions and the Schedule of Funding Progress for the Retiree Health Plan on pages 4 through IO and 40 through 45 be presented to supplement the basic financial statements. Such infonnation, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. I have applied certain limited procedures to the required supplementary information in accordance with U.S. generally accepted auditing standards, which consisted of inquiries of management about the methods of preparing the infonnation and comparing the information for consistency with management's responses to my inquiries, the basic financial statements and other knowledge I obtained during my audit of the basic financial statements. I do not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to express an opinion or provide any assurance.

Supp/ementwy Information

My audit was conducted for the purpose offo1111ing opinions on the financial statements that collectively comprise Postville Community School District's basic financial statements. I previously audited, in accordance with the standards referred to in the third paragraph of this report, the financial statements for the nine years ended June 30, 2016 (which are not presented herein) and expressed unmodified opinions on those financial statements. The supplementary information included in Schedules 1 through 11, including the Schedule of Expenditures of Federal Awards required by Title 2, U.S, Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), is presented for purposes of additional analysis and is not a required part of the basic financial statements.

The 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 U.S. generally accepted auditing standards. In my opinion, the supplementary information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Other jleporting Re_quired by Government Auditing Standards

In accordance with Government Auditing Standards, I have also issued my report dated January 19, 2018 on my consideration of Postville Community School District"s internal control over financial reporting and on my tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's 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 Postville Community School District's internal control over financial reporting and compliance.

Keith Oltrogge Certified Public Accountant

January 19, 20 I 8

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Post, ille Community School District

Manai:ement's Discussion and Analysis

For Fiscal Year Ended June 30, 2017

Postville Community School District provides this Management's Discussion and Analysis of its financial statements. This narrative overview and analysis of the financial activities is for the fiscal year ended June 30, 20 l 7. We encourage readers to consider this information in conjunction with the Districfs financial statements, which follow.

2017 FINANCIAL HIGHLIGHTS

• General Fund revenues increased from $7,2 I 9,957 in fiscal 2016 to $7,719,346 in fiscal 2017, and General Fund expenditures increased from $7,669,832 in fscal 2016 to $8,289,983 in fiscal 2017. The District's General Fund balance decreased from $2,306,217 in fiscal year 20 6 to $1,746,930 in fiscal year 2017, a 24.3% decrease.

• The increase in General Fund revenues was ,lttributable to an increase in local and state revenue in fiscal year 2017. The increase in expenditures was due primarily t1) an increase in instruction and support services costs.

• The District's solvency ratio decreased from 16.7% at June 30, 2016 to 9.4% at June 30, 2017. A District's solvency level indicates a District is able to meet unforeseen financing requirements and presents a sound risk for the timely repayment of short-term debt obligations.

lJSING THIS ANNlJAL REPORT

The annual report consists of a series of financial statements and other information, as follows:

Management's Discussion and Analysis ntroduces the basic financial statements and provides an analytical overview of the District's financial activities.

The Government-wide Financial Statements consist ofa Statement of Net Position and a Statement of Activities. These provide information about the activities uf Postville Community School District as a whole and present an overall view of the District's finances.

The Fund Financial Statements tell how governmental services were financed in the short term as well as what remains for future spending. Fund financial state11ents report Postville Community School District's operations in more detail than the government-wide financial statements by providing information about the most significant funds. The remaining financial statements provide information about activities for which Postville Community School District acts solely as an agent or custodian for the benefit of thos1! outside of the District.

Notes to Financial Statements provide additional information essential to a full understanding of the data provided in the basic financial statements.

Required Supplementary Information further explains and supports the financial statements with a comparison of the District's budget for the year, the Distric1's proportionate share of the net pension liability and related contributions, as well as presenting the Schedule of Fundilg Progress for the Retiree Health Plan.

Supplementary Information provides detailed information about the non-major governmental funds. In addition, the Schedule of Expenditures off ederal Aw irds provides details of various federal programs benefiting the District.

Page 4

REPORTING THE DISTRICT'S FINANCIAL ACTIVITIES

Government-wide Financial Statements

The government-wide financial 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 of resources, liabilities and deferred inflows of resources, with the difference reported as net position. All of the current year's revenues and expenses are accounted for in the Statement of Activities. regardless of when cash is received or paid.

The two government-wide financial statements report the District's net position and how it has changed. Net position is one way to measure the District's financial health or financial position. Over time, increases or decreases in the District's net position is an indicator of whether financial position is improving or deteriorating. To assess the District's overall health, additional non-financial factors, such as changes in the District's property tax base and the condition of school buildings and other facilities, need to 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 are included here, such as regular and special education, transportation and administration. Property tax and state aid finance most of these activities.

• Business type activities: The District charges fees to help cover the costs of certain services it provides. The District's school nutrition program is included here.

Fund Financial Statements

The fund financial statements provide more detailed information about the District's funds, focusing on its most significant or "major" 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 establishes other funds to control and manage money for particular purposes, such as accounting for student activity funds, or to show it is properly using certain revenues, such as federal grants.

The District has three kinds of funds:

I) Governmental funds: Most of the District's basic services are included in governmental funds, which generally focus on (I) how cash and other financial assets that can readily be converted to cash flow in and out and (2) the balances left at year-end that are available for spending. Consequently, the governmental fund statements provide a detailed short-term view that helps detennine whether there are more or fewer financial resources that can be spent in the near future to finance the District's programs.

The District's governmental funds include the General Fund, the Special Revenue Funds, the Debt Service Fund and the Capital Projects Fund.

The required financial statements for governmental funds include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances.

2) Proprietary fimds: Services for which the District charges a fee are generally reported in proprietary funds. Proprietary funds are reported in the same way as the government-wide financial statements. The District's Enterprise Fund, one type of proprietary fund, is the same as its business type activities, but provides more detail and additional information, such as cash flows. The District currently has three Enterprise Funds, the School Nutrition Fund, the Student Construction Fund and the Pirate Enterprise Fund.

The required financial statements for proprietary funds include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Fund Net Position and a Statement of Cash Flows.

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3) Fiduchuyfimds: The District is the trustee, or fiduciary, for assets that belong to others. These funds include Private Purpose Trust and Agency Funds, as follow~:

• Private Purpose Trust Fund - The District accounts for outside donations for scholarships for individual students in this fund.

• Agency Funds - These are funds through which the District administers and accounts for certain federal and/or state grants as a fiscal agent.

The District is responsible for ensuring the assets reported in the fiduciary fonds are used only for their intended purposes and by those to whom the assets belong. The District excludes the,:e activities from the government-wide financial statements because it cannot use these assets to finance its operations.

The required financial statements for fiduciary funds includes a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position.

Reconciliations between the government-wide financ·a1 statements and the governmental fund financial statements follow the governmental fund financial statements.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Figure A-1 below provides a summary of the Districts net position at June 30, 2017 compared to June 30, 2016.

Figure A-1 Condensed Statement of Net Position

Governmental Business Type Total Activi1ies Activities District June :,0, June 30, June 30,

Total Change June 30,

2017 2016 2017 2016 2017 2016 2016-2017

Current and other assets $7, I 02,463 $7,884,210 $106,272 $121,442 $7,208,735 $8,005,652 -10.0% Capital assets 9,765,470 9,4 I 8,185 80,414 54,389 9,845,884 9,472,574 3.9~/()

Total assets $16,867,933 $ I 7,302,395 $186,686 $175,831 $17,054,619 $17,478,226 -2.4%

Deferred outflows of resources $1,761,724 $921,505 $60,309 $32,335 $1,822,033 $953,840 91.0%

Long-term liabilities $5,468,280 $4,896,445 $130,219 $100,804 $5,598,499 $4,997,249 12.0% Other liabilities 1,183,027 I, 127,502 6,472 9,783 I, 189,499 1,137,285 4.6%

Total liabilities $6,651,307 $6,023,947 $136,691 $110,587 $6,787,998 $6,134,534 10,7%

Deferred in1lows of resources $2,345,883 $2,898,128 $1,554 $23,472 $2,347,437 $2,921,600 -19.7%

Net position Net investment in capital assets $8,234,602 $7,675,881 $80,414 $54,389 $8,315,016 $7,730,270 7,6% Restricted 2,741,906 2,976,194 2,741,906 2,976,194 -7.8% Unrestricted -1,344,041 -1,350,250 28,336 19,718 -1,315,705 -1,330,532 1.1% Total net position $9,632,467 $9,301,825 $108,750 $74,107 $9,741,217 $9,375,932 3.9%

The District's combined net position increased 3.9%, or $365,285, from the prior year. The largest portion of the District's net position is invested in capital assets (e.g., land, infrasiructure, buildings and equipment), less the related debt. The debt related to the investment in capital assets is liquidated with sources other than capital assets.

Restricted net position represents resources subject to external restrictions, constitutional provisions or enabling legislation on how they can be used. The District's restricted net positio, decreased $234,288 or 7.8% from the prior year.

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Unrestricted net position - the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation or other legal requirements - increased by $14,827, or 1.1 %,. This increase in unrestricted net position was primarily a result of the District's increase in revenues.

Figure A-2 shows the changes in net position for the year ended June 30, 2017 compared to the year ended June 30, 2016.

Figure A-2 Changes in Net Position

Governmental Business Type Total Activities Activities Total District Change

2017 2016 2017 2016 2017 2016 2016-2017 Revenues: Program revenues: Charges for service $262,672 $250,626 $59,984 $62,470 $322.656 $313.096 3.1% Operating grants, contributions and restricted interest 1,872,948 1,713,048 429,458 415,979 2,302,406 2,129,027 8.1%

Capital grants, contributions and restricted interest

General revenues: Property tax 2,229,068 2,212,855 2,229,068 2,212.855 0.7% Income surtax 315,064 263,573 315,064 263,573 19.5% Statewide sales, services and use tax 644,866 628,257 644,866 628,257 2.6% Unrestricted state grants 3,707,343 3,480,091 3,707,343 3,480,091 6.5% Unrestricted investment earnings 14,253 14.728 JOO 79 14,353 14,807 -3.1% Other 80,023 70,734 80,023 70,734 13.1%

Total revenues $9,126.237 $8,633,912 $489,542 $478,528 $9,615,779 $9,112,440 5.5%

Program expenses: Governmental activities:

Instruction $5,931,782 $6,254,536 $3 $- $5,931,785 $6,254,536 -5.2% Support services 2,4 I 8,623 2,138,120 16,065 17,118 2,434,688 2,155,238 13.0'% Non-instructional programs 53,548 42,988 438,831 455,153 492,379 498,141 0.7% Other expenses 405,089 362,151 405,089 362,151 11.9% Total expenses $8,809,042 $8,797,795 $454,899 $472,271 $9,263,941 $9,270,066 -0.1%

Change in net position before sale of assets $317,195 -$ I 63,883 $34,643 $6.257 $351,838 -$157,626 323.2% Sale of assets 13,447 19,493 13,447 19,493 -13.0% Change in net position $330,642 -$ 144,390 $34,643 $6,257 $365,285 -$138,133 364.4%

Net position beginning of year $9,301,825 $9,448,346 $74,107 $67,850 $9,375,932 $9,516,196 -1.5% Prior period adjustment -2, 131 -2, 13 I 100.0% Adjusted net position beginning of Year $9,301,825 $9,446,215 $74,107 $67,850 $9,375,932 $9,514,065 -1.5%

Net position end of year $9,632,467 $9,301,825 $108,750 $74,107 $9,741.217 $9,375.932 3.9%

In fiscal year 2017, property tax and unrestricted state grants accounted for 61.7% of governmental activities revenue while charges for service and operating grants, contributions and re~.tricted interest accounted for 99.9% of business type activities revenue. The District's total revenues were approximately $9.6 mil lion, of which approximately $9.1 million was for governmental activities and less than $0.5 million was for business type activities

As shown in Figure A-2, the District as a whole experienced a 5.5% increase in revenues and a 0.1 % decrease in expenses. Property tax increased approximately $16,000.

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Governmental Activities

Revenues for governmental activities were $9,126,237 and expenses were $880,942 for the year ended June 30, 2017. In a difficult budget year, the District was able to balance the budget by trimming expenses to match available revenues.

The following table presents the total and net cost of:he District's major governmental activities, instruction, support services, noninstructional programs and other expenses for the year ended June 30, 2017 compared to those expenses for the year ended June 30. 2016.

Instruction Support services Non-instructional programs Other expenses

Totals

For the year ended June 30, 2017:

Figure A-3 Total and Net Cost of Governmental Activities

Total Cost Net Cost of Services Change of Services

2017 2016 2016-2017 2017 2016

$5,931,782 $6,254,536 -5.2% $3,802,275 $4,302,582 2,418,623 2,138,120 13.1% 2,412,510 2,126,400

53,548 42,988 24.6% 53,548 42,988 405,089 362,151 11.9% 405,089 362,151

$8,809,042 $8,797,795 0.1% $6.673,422 $6,834,121

• The cost financed by users of the District's ~rograms was $322,656.

Change 2016-2017

-11.6% 13.5% 24.6% 11.9%

-2.4%

• Federal and state governments subsidized certain programs with grants and contributions totaling $2,302,406.

• The net cost of governmental activities was tinanced with $2,544,132 of property and other taxes and $3,707,343 of unrestricted state grants.

Business Type Activities

Revenues for business type activities during the year ,,nded June 30, 2017 were $489,542 representing a 2.3% increase over the prior year, while expenses totaled $454,899, a 3.7% decrease from the prior year. The District's business type activities include the School Nutrition and Pirate Enterprise Funds. Revenues of these activities were comprised of charges for service, federal and state reimbursements and investment income.

INDIVIDUAL FUND ANALYSIS

As previously noted, Postville Community School Dhtrict uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements.

The financial perfonnance of the District as a whole i~ reflected in its governmental funds, as well. As the District completed the year, its governmental funds reported a combined fund balance of$9,632,467, above last year's ending fund balances of$9,301,825.

Governmental Fund Highlights

• The District's decrease in General Fund financial position is the result of many factors. The decrease during the year in tax and other local sources resulted in a decreasr in revenues. The increase in expenditures and the decrease in revenue resulted in the decrease in the General Fund.

• The General Fund balance decreased from $1,306,217 to $1,746,930 due, in part, to the expenditures exceeding revenue.

• Capital Projects Funds balance decreased fr,m $1,308,063 to $978,659, due in part to expenditures exceeding revenue.

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Proprietary Fund Highlights

School Nutrition Fund net position increased from $73,789 at June 30, 2016 to$ I 07,425 at June 30, 2017. representing an increase of approximately 45.6%. The Private Enterprises Fund net position increased from $257 at June 30, 2016 to $1,264 at June 30, 2017, representing an increase of 392.0%

BUDGETARY HIGHLIGHTS

Over the course of the year, Postville Community School District amended its budget one time to reflect additional expenditures in instruction and other expenditures.

The District's total revenues were $117,284 less than total budgeted revenues, a variance of 1.2%. The most significant variance resulted from the District receiving less in federal sauces than originally anticipated.

Total expenditures were less than budgeted, due primarily to the District's budget for the General Fund. It is the District's practice to budget expenditures at the maximum authorized spenjing authority for the General Fund. The District then manages or controls General Fund spending through its line-item budget. As a result, the District's certified budget should always exceed actual expenditures for the year.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At June 30, 2017, the District had invested $9,845,884, net of accumulated depreciation, in a broad range of capital assets. including land, buildings, athletic facilities, computers, audio-v sual equipment and transportation equipment. (See Figure A-4) This represents a net increase of 3.9% from last year. More detailed information about the District's capital assets is presented in Note 5 to the financial statements. Depreciation expense for the year was $709,383.

The original cost of the District's capital assets was $22,029,939. Governmental funds accounted for $21,912,949, with the remainder of $116.990 accounted for in the Proprieta,y, School 'Jutrition Fund.

Land Construction in process Buildings Improvements other than

buildings Furniture and equipment

Totals

Governmental Activities June 30,

2017 2016

$89,000 $89,000 78,673 108,489

8,261,786 7,645,164

283,559 294,390 1,052,452 1,281,142

$9,765,470 $9,418,185

Figure A-4 Capital Assets, net of Depreciation

Business Type Total Activities District June 30, June 30,

2017 2016 2017 2016

$- $- $89,000 $89,000 78,673 I 08,489

8,261,786 7,645,164

283,559 294,390 80,414 54.389 I, 132,866 1,335,531

$80,414 $54,389 $9,845,884 $9,472,574

Total Change June 30,

2016-2017

-27.5% 8.1%

-3.7% -15.2% 3.9%

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Long-Term Debt

At June 30, 2017, the District had $1,530,868 in other long-term debt outstanding. This represents a decrease of 12. I% from last year. (See Figure A-5) Additional information about the District's long-term debt is presented in Note 6 to the financial statements.

The District continues to carry a general obligation bond rating of Aa3 assigned by national rating agencies to the District's debt since 1997. The Constitution of the State of Iowa limits the amount of general obligation debt districts can issued to 5% of the assessed value of all taxable property within the District. The District's outstanding general obligation debt is significantly below its constitutional debt limit of approximately $17.0 milli,,n.

Revenue bonds Capital lease

Totals

Figure A-5 Outstanding Long-term Obligations

Total Total District Change June 30, June 30,

2017 2016 2016-2017

$1,200,000 $1,300,000 -7.7% 330,868 442,304 -25.2%

$ I ,530,868 $1,742,304 -12.1%

ECONOMIC FACTORS BEARING ON THE DISTRICT'S FUTURE

At the time these financial statements were prepared and audited, the District was aware of existing circumstances which could significantly affect its financial health in the future:

• Funding to local school districts from federal and state agencies needs to be monitored closely, as possible decreases will result in less funding and may require budget adjustments in some areas in the future.

CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT

This financial report is designed to provide the District's citizens, taxpayers, customers, investors and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Melissa Fettkether, District Secretary, Postville Community School District, P.O. Box 717, Postville IA 52162.

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Basic Financial Statements

Exhibit A Postville Community School District

Statement of Net Position

June 30, 2017

Govern- Business mental Type

Activities Activities Total Assets Cash, cash equivalents and pooled investments $ 4,233,466 $ 104,794 $ 4,338,260 Receivables:

Property tax: Delinquent 34,960 34,960 Succeeding year 2,300,485 2,300,485

1 ncome surtax 292,918 292,918 Accounts 24,979 251 25,230

Due from other governments 212,761 212,761 Due from other funds 2,894 2,894 Inventories 1,227 1,227 Capital assets, net of accumulated depreciation/amortization 9,765,470 80,414 9,845,884

Total Assets $ 16,867,933 $ 186,686 $ 17,054,619

Deferred Outnows of Resources Pension related deferred outflows $ 1,761,724 $ 60,309 $ 1,822,033

Liabilities Accounts payable $ 107,796 $ $ 107,796 Salaries and benefits payable 734,349 734,349 Other liabilities 13,263 13,263 Advances from grantors 68,965 68,965 Due to other governments 6,600 6,600 Accrued interest payable 8,939 8,939 Unearned revenue 6,472 6,472 Long-term liabilities:

Portion due within one year: Revenue bonds 100,000 100,000 Capital lease 113,081 113,081 Early retirement 30,034 30,034

Portion due after one year: Revenue bonds 1,100,000 1,100,000 Capital lease 217,787 217,787 Early retirement 30,000 30,000 Net pension liability 3,803,881 130,219 3,934,100 Net OPEB liability 316,612 316,612 Total Liabilities $ 6,651,307 $ 136,691 $ 6,787,998

Deferred Inflows of Resources Unavailable property tax revenue $ 2,300,485 $ $ 2,300,485 Pension related deferred inflows 45,398 1,554 46,952

Total deferred inflows of resources $ 2,345,883 $ 1,554 $ 2,347,437

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Net Position Net investment in capital assets Restricted for:

Categorical funding Debt service Capital projects Management levy purposes Student activities Physical plant and equipment

Unrestricted

Total Net Position

See notes to financial statements.


Statement of Net Position

,June 30,2017

$

Govern-mental

Activities

8,234,602 $

970,783 177,825 900,365 607,082

7,557 78,294

-1,344,041

$ 9,632,467 $

Exhibit A

Business Type

Activities Total

80,414 $ 8,315,016

970,783 177,825 900,365 607,082

7,557 78,294

28,336 -1,315,705

108,750 $ 9,741,217

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Poshille Community School District

Statement of Activities

Year Ended June 30, 2017

Program Revenues Operating Capital

Grants, Grants. Contributions Contributions

Charges and and for Restricted Restricted

Exr:enses Services Interest Interest Functions/Programs Governmental Activities:

Instruction: Regular instruction $ 4,043,736 $ 126,934 $ 1,189,180 $ Special instruction 1,224,034 35,610 62.714 Other instruction 664,012 95,333 619.736

$ 5,931,782 $ 257,877 $ 1,871,630 $ Support Services:

Student services $ 297,827 $ $ 1,318 $ Instructional staff services 607,894 Administration services 612,815 Operation and maintenance of plant services 634,697 4,695 Transportation services 265,390 100

$ 2,418,623 $ 4,795 $ 1,318 $

Non-instructional programs $ 53,548 $ $ $

Other Expenditures: Facilities acquisition $ 45,697 $ $ $ Long-term debt interest 67,087 A EA flow-through 292,305

$ 405,089 $ $ $

Total Governmental Activities $ 8,809,042 $ 262,672 $ 1,872,948 $

Business Type Activities: Non-Instructional Programs:

Food service operations $ 438,831 $ 58,974 $ 429,458 $

Instructional: Pirate enterprise $ 3 $ 1,010 $ $

Support Services: Administration services $ 15,529 $ $ $ Operation and maintenance of plant services 536

$ 16,065 $ $ $

Total Business Type Activities $ 454,899 $ 59,984 $ 429,458 $

Total $ 9,263,941 $ 322.656 $ 2,302,406 $

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Net (Expense) Revenue And Chanoes in Net Position


-2,727,622 -1,125,710

51,057 -3,802,275

-296,509 -607,894 -612,815 -630,002 -265,290

-2.412,510

-53,548

-45,697 -67,087

-292,305 -405,089

-6,673,422

-

-

-6,673,422

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Business Type

Activities

49,601

1,007

-15,529 -536

-16,065

34,543

34,543

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Exhibit B

T)tal

-2,727,622 -1.125,710

51,057 -3,802,275

-296,509 -607,894 -612,815 -630,002 -265,290

-2,412,510

-53,548

-45,697 -67,087

-292,305 -405,089

-6,673,422

49,601

1,007

-15,529 -536

-16,065

34,543

-6,638,879

Page 13

General Revenues: Property Tax Levied For:

General purposes Capital outlay

Income surtax Statewide sales, services and use tax Unrestricted state grants Unrestricted investment earnings Other

Total General Revenues

Change in net position before sale of assets

Sale of assets

Change in net position

Net position beginning of year

Net Position End of Year



Statement of Activities


Expenses

Charges for

Services

Program Revenues Operating

Grants, Contributions

and Restricted Interest

Capital Grants,

Contributions and

Restricted Interest

$

$

$

$

$

Net (Expense) Revenue And Changes in Net Position


1,969,651 259,417 315,064 644,866

3,707,343 14,253 80,023

6,990,617

317,195

13,447

330,642

9,301,825

9,632,467

$

$

$

$

$

Business Type

Activities

100

100

34,643

34,643

74,107

I 08,750

$

$

$

$

$

Exhibit B

Total

1,969,651 259,417 315,064 644,866

3,707,343 14,353 80,023

6,990,717

351,838

13,447

365,285

9,375,932

9,741.217

Page 14

Assets Cash, Cash Equivalents and Pooled Investments Receivables:

Property Tax: Delinquent Succeeding year

Income surtax Accounts

Due from other governments Due from other funds

Total Assets


Balance Sheet Governmental Funds

June 30, 2017

Liabilities, Deferred Inflows of Resources & Fund Balances Liabilities:

Due to other governments Accounts payable Salaries and benefits payable Advances from grantors Other liabilities

Total Liabilities

Deferred inflows of resources Unavailable revenues:

Succeeding year property tax Other

Total deferred inflows of resources

Fund Balances: Restricted for:

Categorical funding Debt service Management levy purposes Student activities School infrastructure Physical plant and equipment

Unassigned Total Fund Balances

Total Liabilities, Deferred Inflows of Resources & Fund Balances


General Management

$ 2,453,063 $ 662,413

26,178 4,703 1,982,022 55,000

253,862 24,979

159,087

$ 4,899,191 $ 722,116

$ 6,600 $ 106,463 734,349 68,965

$ 916,377 $

$ 1,982,022 $ 55,000 253,862

$ 2,235,884 $ 55,000

$ 970,783 $

667,116

776,147 $ 1,746,930 $ 667,116

$ 4,899,191 $ 722,116

$

$

$

$

$

$

$

$

$

Capital Projects

934,169 $

4,079 263,463

39,056

53,674

1,294,441 $

$

13,263

13,263 $

263,463 $ 39,056

302,519 $

$

900,365 78,294

978,659 $

1,294,441 $

Non-Major Funds

183,821

2,894

186,715

1,333

1,333

177,825

7,557

I 85,382

186,715

Total

4,233,466

34,960 2,300,485

292,918 24,979

212,761 2,894

$ 7,102,463

$ 6,600 107,796 734,349 68,965 13,263

$ 930,973

$ 2,300,485 292,918

$ 2,593,403

$ 970,783 177,825 667,116

7,557 900,365

78,294 776,147

$ 3,578,087

$ 7, I 02,463

Exhibit C

Page 15


Reconciliation of the Balance Sheet - Governmental Funds To the Statement of Net Position

June 30, 2017

Total fund balances of governmental funds (page 15)

Antou11ts reported for gm1er11me11tal activities in the Statement of Net Position are d{fferent becau,'ie:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in the govemmen:al funds

Other long-term assets, including income surtax receivable, are not available to pay current year expenditures and, therefore, are recognized as deferred inflows of resources in the governmental funds.

Accrued interest payable on long-term liabilities is not due and payable in the current year and, therefore, is not reported as a liability in the governmental funds

Pension related deferred outflows of resources and deferred inflows of resources are not due and payable in the current year and, therefore, are not reported in the governmental funds, as follows:

Deferred outflows of resources Deferred inflows of resources

Long-term liabilities, including bonds and notes payaJle, early retirement, other postemployment benefits payable and net pension liability are not due and payable in the current year and, therefore, are not reported in the governmental funds

Net position of governmental activities (page 12)


$ 1,761,724 -45,398

Exhibit D

3,578,087

9,765,470

292,918

-8,939

1,716,326

-5,711,395

$ 9,632,467

Page 16

Exhibit E

Posl\ille Community School District

Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds


Non-Capital Major

General Management Projects Funds Total Revenues:

Local Sources: Local tax $ 1,934,424 $ 299,966 $ 300,147 $ $ 2,534,537 Tuition 160,625 160,625 Other 52,692 12,726 36,135 94,769 196,322

Intermediate sources State sources 4,929,205 4,710 648,842 5,582,757 Federal sources 642,400 642,400

Total Revenues $ 7,719,346 $ 317,402 $ 985,124 $ 94,769 $ 9,116,641

Expenditures: Current:

Instruction: Regular instruction $ 3,753,824 $ 30,398 $ $ $ 3,784,222 Special instruction 1,291,140 1,291,140 Other instruction 588,698 103,927 692,625

$ 5,633,662 $ 30,398 $ $ 103,927 $ 5,767,987 Support Services:

Student services $ 296,276 $ 1,484 $ $ $ 297,760 Instructional staff services 452,930 2,370 17,300 472,600 Administration services 752,722 2,891 1,000 756,613 Operation and maintenance of

plant services 56 I ,044 44,431 28,853 634,328 Transportation services 250,450 12,830 263,280

$ 2,313,422 $ 64,006 $ 47,153 $ $ 2,424,581 Non-instructional programs $ 50,594 $ 1,496 $ $ $ 52,090 Other Expenditures:

Facilities acquisition $ $ $ 989,630 $ $ 989,630 Long-Term Debt:

Principal 211,436 211,436 Interest and fiscal charges 68,295 68,295

AEA flow-through 292,305 292.305 $ 292,305 $ $ 989,630 $ 279,731 $ 1,561,666

Total Expenditures $ 8,289,983 $ 95,900 $ 1,036,783 $ 383,658 $ 9,806,324

Excess (deficiency) of revenues over (under) expenditures $ -570,637 $ 221,502 $ -51,659 $ -288,889 $ -689,683

Other Financing Sources (Uses): Operating transfers in $ $ $ $ 279,842 $ 279,842 Operating transfers out -2,097 -277,745 -279,842 Sale of equipment 13,447 13,447

Total Other Financing Sources (Uses) $ 11,350 $ $ -277,745 $ 279,842 $ 13,447

Page 17


Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds


Capital General Management Projects

Change in fund balances $ -559,287 $ 221,502 $ -329,404

Fund balances beginning of year 2,306,217 445,614 1,308,063

Fund Balances End of Year $ 1,746,930 $ 667,116 $ 978,659

See notes to financial statements,

Exhibit E

Non-Major Funds Total

$ -9,047 $ -676,236

194,429 4,254,323

$ 185,382 $ 3,578,087

Page 18


Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds

T> the Statement of Activities


Change in fund balances - total governmental funjs (page 18)

Amou11t.\· reported for governme11tal activities ill the Statement of Activities are different hecau.5e:

Capital outlays to purchase or build capital assets are reported in governmental funds as expenditures. These costs are not rep01ted in the Stat=ment of Activities but they are allocated over the estimated useful lives of the capital assets as depreciation expense in the Statement of Activities. Capital outlay expenditures exceeded dep··eciation expense in the current year, as follows:

Expenditures for capital assets Depreciation expense

Income surtax revenue not received until several months after year end is not considered available revenue and is recognized as deferred inflows ofreso.1rces in the governmental funds.

Proceeds from issuing long-term liabilities provide ctrrent financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of long-term liabilities is an expenditure in the goverr-mental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Current year repayments exceeded issuances as follows:

Repaid

Interest on long-term debt in the Statement of Activifes differs from the amount reported in the governmental funds because interest is recorded as ar expenditure in the governmental funds when due. In the Statement of Activities, interest expense j5 recognized as the interest accrues, regardless of when it is due.

The current year District IPERS contributions are rep)rted as expenditures in the governmental funds but are reported as deferred outflows of resources in the Statement of Net Position.

Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds, as follows:

Early retirement Pension expense Other postemployment benefits

Change in Net Position of Governmental Activitie, (page 14)


$

$

1,046,919 -699,634

-59,556 90,566

-35,724

$

$

Exhibit F

-676,236

347,285

9,596

211,436

1,208

442,067

-4,714

330,642

Page 19

Exhibit G


Statement of Net Position Proprietary Funds

June 30, 2017

School Student Pirate Nutrition Construction Enterprise Total

Assets Current assets: Cash and cash equivalents $ 103,469 $ 61 $ 1,264 $ 104,794 Accounts receivable 251 251 Inventories 1,227 1,227

Total Current Assets $ 104,947 $ 61 $ 1,264 $ 106,272

Non-current assets: Capital assets, net of accumulated depreciation $ 80,414 $ $ $ 80,414

Total non-current assets $ 80,414 $ $ $ 80,414

Total Assets $ 185,361 $ 61 $ 1,264 $ 186,686

Deferred Outflows of Resources Pension related deferred outflows $ 60,309 $ $ $ 60,309

Liabilities Current liabilities: Unearned revenue $ 6,472 $ $ $ 6,472

Total Current Liabilities $ 6,472 $ $ $ 6,472

Non-current liabilities: Net pension liability $ 130,219 $ $ $ 130,219

Total non-current liabilities $ 130,219 $ $ $ 130,219 Total Liabilities $ 136,691 $ $ $ 136,691

Deferred Inflows of Resources Pension related deferred inflows $ 1,554 $ - $ $ 1,554

Net Position Net investment in capital assets $ 80,414 $ $ $ 80,414 Unrestricted 27,01 I 61 l,264 28,336

Total Net Position $ 107,425 $ 61 $ 1,264 $ 108,750

See notes to financial statements. Page 20

Exhibit H


Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds


School Student Pirate Nutrition Construction Enterprise Total

Operating revenues: Local sources: Charges for service/product $ 58,974 $ $ 1,010 $ 59,984

Operating expenses: Instruction:

Other $ $ $ 3 $ 3 Support services:

Administration services $ 15,529 $ $ $ 15,529 Operation and maintenance of plant services 536 536

$ 16,065 $ $ $ 16,065

Non-instructional programs: Food service operations: Salaries $ 148,247 $ $ $ 148,247 Benefits 35,722 35,722 Purchased services 5,565 5,565 Supplies 239,548 239,548 Depreciation 9,749 9,749

$ 438,831 $ $ $ 438,831 Total operating expenses $ 454,896 $ $ 3 $ 454,899

Operating income (loss): $ -395,922 $ $ 1,007 $ -394,915

Non-operating revenues: State sources $ 3,631 $ $ $ 3,631 Federal sources 425,827 425,827 Interest income 100 100 Total non-operating revenues $ 429,558 $ $ $ 429,558

Increase (Decrease) in net position $ 33,636 $ $ 1,007 $ 34,643

Net position beginning of year 73,789 61 257 74,107

Net Position End of Year $ I 07,425 $ 61 $ 1,264 $ I 08,750


Page 21

Posh ille Community School District

Statement of Cash Flows Proprietary Funds


Cash flo\VS from operating activities: Cash received from sale of products and donations Cash received from sale of lunches and breakfasts Cash paid to employees for services Cash paid to suppliers for goods or services

Net cash provided (used) by operating activities

Cash flows from non-capital financing activities: State grants received Federal grants received Net cash provided by non-capital financing activit es

Cash flows from capital and related financing activitii!s: Acquisition of capital assets

Cash flows from investing activities: Interest on investments

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents beginning of year

Cash and Cash Equivalents End of Year

$

$

$

$

$

$

$

$

Reconciliation of operating income (loss) to net c,sh provided (used) by operating activities: Operating income (loss) $ Adjustments to reconcile operating income (loss) to net cash provided

(used) by operating activities: Commodities used Depreciation Decrease in inventories Decrease in accounts receivable (Decrease) in accounts payable (Decrease) in salaries and benefits payable Increase in unearned revenue Increase in net pension liability (Increase) in deferred outflows of resources (Decrease) in deferred inflows of resources

Net Cash Provided (Used) by Operating Activities $

Non-cash investing, capital and financing activitiei;: During the year ended June 30, 2017, the District received $38,520 of federal commodities.


Exhibit I

School Pirate Nutrition Enterprise

$ 1,010 61,035

-222,718 -207,055 -3 -368,738 $ 1,007

3,631 $ 396,383 400,014 $

-35, 774 $

100 $

-4,398 $ 1,007

107,867 257

103,469 $ 1.264

-395,922 $ 1,007

38,520 9,749 1,706

997 -273

-4,102 1,064

29,415 -27,974 -21,918

-368,738 $ 1,007

Page 22

Assets

Cash, cash equivalents and pooled investments Accounts receivable

Total Assets

Liabilities Due to other funds Other accounts payable Accounts payable

Total liabilities

Net position

Restricted for scholarships



Stat<ment of Fiduciary Net Position Fiduciary Funds

June 30, 2017

$

$

$

$

$

Private Purpose Trust

Scholarships

22,109 $

22,109 $

$

$

22,109 $

Exhibit J

Agency

16,147

16,147

2,894 1.369

I 1.884

16,147

Page 23

Additions: Local sources:

Interest income

Deductions: Instruction:

Regular instruction: Scholarships awarded

Change in net position

Net position beginning of year

Net Position End of Year



Statement of Changes in Fiduciary Net Position Fiduciary Funds


$

$

$

$

Private Purpose Trust

Scholarships

249

400

- I 5 I

22,260

22,109

Exhibit K

Page 24

Pos1'ille Community School District

Notes to Financial Statements

June 30, 2017

(I) Summary of Significant Accounting Polic1es

Postville Community School District is a po itical subdivision of the State oflowa and operates public schools for children in grades kindergarten through twelve. Additionally, the District either operates or sponsors various adult education programs. These courses include remedial education as well as career and technical and recreational courses. The geographic area served includes the City of Postville, Iowa and portions of the predominately agricultural territories in Allamakee, Clayton, Fayette and Winneshiek Counties. The District is governed by a Board of Education whose members are elected on a nonpartisan basis.

The District's financial statements are prepared in conformity with U.S. generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board.

A. Reporting Enti!}'.

For financial reporting purposes, Postville Community School District has included all funds, organizations, agencies, boards, commissions and authorities. The District has also considered all potential component units for which it is financially accountable and other organizations for which the nature and significance of their relationship with the District are such that exclusion would cause the District's financial statements to be misleading or incomplete. The Governmental Ac,:ounting Standards Board has set forth criteria to be considered in determining financial accountability. These crit~ria include appointing a voting majority ofan organization's governing body and (I) the ability of the District to impose its will on that organization or (2) the potential for the organization to provide specific benefits to or impose specific financial burdens on the District. The District has no component units which meet the Governmental Accounting Standards Board criteria.

Jointly Governed Organization The District participates in a jointly governed organization that provides services to the District but does not meet the c1iteria of a joint venture since there is no ongoing financial interest or responsibility by the participating governments. The District is a member of the County Assessor's Conference Board.

B. Basis of Presentation

Government-wide Financial Statements~ The Statement of Net Position and the Statement of Activities report information on all of the non-fiduci ,ry activities of the District. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by tax and intergovernmental revenues, are reriarted separately from business type activities, which rely to a significant extent on fees and charges for service.

The Statement of Net Position presents the District's non-fiduciary assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference reported as net position. Net position is reported in the following categories:

Net investment in capital l.Ssets, consists of capital assets, net of accumulated depreciation/amortization and reduced by outstanding ba ances for bonds, notes and other debt attributable to the acquisition, construction or improvement of those a;sets.

Restricted net position results when constraints placed on net position use are either externally imposed or are imposed by law through constitutional provisions or enabling legislation. Enabling legislation did not result in any restricted net position

Unrestricted net position consists of net position not meeting the definition of the preceding categories. Unrestricted net position ii, often subject to constraints imposed by management which can be removed or modified.

Page 25

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 clearly identifiable with a specific function. Program revenues include (I) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function and (2) grants, contributions and interest restricted to meeting the operational or capital requirements of a particular function. Property tax and other items not properly included among program revenues are reported instead as general revenues.

Fund Financial Statements - Separate financial statements are provided for governmental, proprietary and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. All remaining governmental funds are aggregated and reported as non-major governmental funds. Combining schedules are also included for the Capital Projects Fund accounts.

The District reports the following major governmental funds:

The General Fund is the general operating fund of the District. All general tax revenues and other revenues not allocated by law or contractual agreement to some other fund are accounted for in this fund. From the fund are paid the general operating expenditures, including instructional, support and other costs.

The Management Fund is used to account for all resources used for the cost of employment benefits, early retirement benefits and insurance agreements.

The Capital Projects Fund is used to account for all resources used in the acquisition and construction of capital facilities and other capital assets.

The District reports the following major proprietary fund:

The Enterprise, School Nutrition Fund is used to account for the food service operations of the District.

The District also reports fiduciary funds which focus on net position and changes in net position. The District's fiduciary funds include the following:

The Private Purpose Trust Fund is used to account for assets held by the District under trust agreements which require income earned to be used to benefit individuals through scholarship awards.

The Agency Fund is used to account for assets held by the District as an agent for individuals, private organizations and other governments. The Agency Fund is custodial in nature, assets equal liabilities, and does not involve measurement of results of operations.

C. Measurement Focus and Basis of Accounting

The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property tax is recognized as revenue in the year for which it is levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been satisfied.

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 after year-end.

Page 26

Property tax, intergovernmental revenues (shared revenues, grants and reimbursements rrom other governments) and interest associated with the current fiscal period are all considered to be susceptible to accrual. All other revenue items are considered to be measurable and available only when cash is received by the District.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, principal and interest on long-term debt, claims and judgments and compensated absences are recognized as expenditures only when payment is due. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources.

Under the terms of grant agreements, the District funds certain programs by a combination of specific costreimbursement grants and general revenues. _Thus, when program expenses are incurred, there are both restricted and unrestricted net position available to finance the program. It is the District's policy to first apply costreimbursement grant resources to such programs and then general revenues.

When an expenditure is incurred in governmental funds which can be paid using either restricted or unrestricted resources, the District's policy is generally to first apply the expenditure toward restricted fund balance and then to less-restrictive classifications - committed, assigned and then unassigned fund balances.

Proprietary funds distinguish operating revenues and expenses rrom non-operating items. Operating revenues and expenses generally result rrom providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the District's Enterprise Funds is charges to customers for sales and services. Operating expenses for Enterprise Funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

The District maintains its financial records on the cash basis. The financial statements of the District are prepared by making memorandum adjusting entries to the cash basis financial records.

D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Fund Equity

The following accounting policies are followed in preparing the financial statements:

Cash, Cash Equivalents and Pooled Investments -The cash balances of most District funds are pooled and invested. Investments are stated at fair value.

For purposes of the Statement of Cash Flows, all short-term cash investments that are highly liquid are considered to be cash equivalents. Cash equivalents are readily convertible to known amounts of cash and, at the day of purchase, have a maturity date no longer than three months.

Property Tax Receivable - Property tax in governmental funds is accounted for using the modified accrual basis of accounting.

Property tax receivable is recognized in these funds on the levy or lien date, which is the date the tax asking is certified by the Board of Education. Delinquent property tax receivable represents unpaid taxes for the current and prior years. The succeeding year property tax receivable represents taxes certified by the Board of Education to be collected in the next fiscal year for the purposes set out in the budget for the next fiscal year. By statute, the District is required to certify its budget in April of each year for the subsequent fiscal year. However, by statute, the tax asking and budget certification for the following fiscal year becomes effective on the first day of that year. Although the succeeding year property tax receivable has been recorded, the related revenue is deferred in both the government-wide and fund financial statements and will not be recognized as revenue until the year for which it is levied.

Page 27

Property tax revenue recognized in these funds become due and collectible in September and March of the fiscal year with a I½% per month penalt:1 for delinquent payments; is based on January 1, 2015 assessed property valuations; is for the tax accrual period July I, 2016 through June 30, 2017 and reflects the tax asking contained in the budget certified to the County Board of Supervisors in April 2016.

Due from Other Governments - Due from other governments represents amounts due from the State of Iowa, various shared revenues, grants and reimbursements from other governments.

Inventories Inventories are valuec. at cost using the first-in, first-out method for purchased items and government commodities. Inventories of proprietary funds are recorded as expenses when consumed rather than when purchased or received.

Capital Assets~ Capital assets, which include property, furniture and equipment, are reported in the applicable governmental or business type acth-ities columns in the government-wide Statement of Net Position. Capital assets are recorded at historical cost. Donated capital assets are recorded at acquisition value. Acquisition value is the price that would have been paid to acquire a capital asset with equivalent service potential. The costs of normal maintenance and repair that do not :1dd to the value of the asset or materially extend asset lives are not capitalized. Capital assets are defined by the Di;trict as assets with an initial, individual cost in excess of the following thresholds and estimated useful lives in excess of two years.

Asset Class Land Buildings Improvements other than building:; Furniture and equipment:

School Nutrition Fund equipment Other furniture and equipment

Capital assets are depreciated using the straight-line method over the following estimated useful lives:

Asset Class Buildings Improvements other than building:; Furniture and equipment

Amount $ 2,000

10,000 10,000

500 2,000

Estimated Useful Lives

(In Years) 50 years

20 - 50 years 5 - 15 years

Deferred Outflows of Resources--· DefeJTed outflows of resources represent a consumption of net position applicable to a future year(s) which will not b, recognized as an outflow of resources (expense/expenditure) until then. Deferred outflows of resources con:;ist of unrecognized items not yet charged to pension expense and contributions from the District after the measurement date but before the end of the District's reporting period.

Salaries and Benefits Payable Pa,roll and related expenditures for teachers with annual contracts corresponding to the current school year, which are ,ayable in July and August, have been accrued as liabilities.

Advances from Grantors ~ Grant proceeds which have been received by the District but will be spent in a succeeding fiscal year.

Long-Tenn Liabilities In the govtTnrnent-wide financial statements, long-term debt and other long-term obligations are reported as liabilitie; in the governmental activities column in the Statement of Net Position.

Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions and pension expense, information about the fiduciary net position of the Iowa Public Employees' Retirement System (!PERS) and additions to/deductions from !PERS' fiduciary net position have been determined on the same basis as they are reported by !PERS. For this purpose, benefit payments including refunds of employee contributions are recotnized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The net rosition liability attributable to the governmental activities will be paid primarily by the General Fund.

Page 28

Deferred Inflows of Resources Deferred inflows of resources represent an acquisition of net position applicable to a future year(s) which \Vill not be rtcognized as an inflow of resources (revenue) until that time. Although certain revenues are measurable, they are not available. Available means collected within the current year or expected to be collected soon enough thereafter to be used to pay liabilities of the current year. Deferred inflows of resources in the governmental fund financial statements represent the amount of assets that have been recognized, but the related revenue has not been recognized since the assets are not collected within the current year or expected to be collected soon enough thereafi:er to be used to pay liabilities of the current year. Deferred inflows of resources consist of property tax receivable and other receivables not collected within sixty days after year-end.

Deferred inflows of resources in the Statement of Net Position consist of succeeding year property tax receivable that will not be recognized until the year for which it is levied and the unamortized portion of the net difference between projected and actual earnings on pension plan investments.

_Fund Eguity - In the governmental fund financial statements, fund balances are classified as follows:

Restricted Amounts restricted to specific purposes when constraints placed on the use of the resources are either externally imposed by creditors, grantors or state or federal laws or imposed by law through constitutional provisions or enabling legislation.

Committed·- Amounts which can be used only for specific purposes determined pursuant to constraints formally imposed by the Board of Education through resolution approved prior to year end. Those committed amounts cannot be used for any other purpose unless the Board of Education removes or changes the specified use by taking the same action it employed to commit those amounts.

Unassigned All amounts not included in the preceding classifications.

E. Budgets and Budgetary Accounting

The budgetary comparison and relaced disclosures are reported as Required Supplementary Information.

(2) Cash, Cash Equivalents and Pooled Investments

The District's deposits in banks at June 30, ,017 were entirely covered by federal depository insurance or by the State Sinking Fund in accordance with Chapter I 2C of the Code of Iowa. This chapter provides for additional assessments against the depositories to insure there will be no loss of public funds.

The District is authorized by statute to invesr public funds in obligations of the United States government, its agencies and instrumentalities; certificates of deposit or 01her evidences of deposit at federally insured depository institutions approved by the Board of Education; prime eligible bankers acceptances; certain high rated commercial paper; perfected repurchase agreements; certain registered open-end maragement investment companies; certain joint investment trusts; and warrants or improvement certificates of a drainage distrkt.

The District had no investments meeting the disclosure requirements of Governmental Accounting Standards Board Statement No. 72.

(3) Inter-fund Transfers

The detail of inter-fund transfers for the yeai ended June 30, 2017 is as follows:

Transfer to Debt Service Debt Service Special Revenue - Student Activity

Total

Transfer from Capital Projects-· Physical Plant and Equipment Levy Capital Projects - Statewide Sales, Services, and Use Tax General Fund

$

$

Amount 120,33 I 157,414

2,097 279,842

Transfers generally move revenues from the fund statutorily required to collect the resources to the fund statutorily required to expend the resources.

Page 29

(4) Due From and Due to Other Funds

The detail of inter-fund receivables and payables at June 30, 2017 is as follows:

Receivable Fund Pa~able Fund Amount Special Revenue - Student Activity Agency Fund $ 2,894

The Agency Fund owes the Special Revenue - Student Activity Fund for negative cash. The balance is to be repaid by June 30,2018.

(5) Capital Assets

Capital assets activity for the year ended June 30.2017 was as follows:

Balance Balance Beginning End Of Year Increases Decreases Of Year

Governmental Activities: Capital assets not being depreciated: Land $ 89,000 $ $ $ 89,000 Construction in process 108,489 78,673 108,489 78,673 Total capital assets not being depreciated $ 197,489 $ 78,673 $ 108,489 $ 167,673

Capital assets being depreciated: Buildings $ 14,119,592 $ 918,717 $ $ 15,038,309 Improvements other than buildings 730,460 16,072 746,532 Furniture and equipment 5,8 l 8,489 141,946 5,960,435 Total capital assets being depreciated $ 20,668,541 $ 1,076,735 $ $ 21,745,276

Less accumulated depreciation for: Buildings $ 6,474,428 $ 302,095 $ $ 6,776,523 Improvements other than buildings 436,070 26,903 462,973 Furniture and equipment 4,537,347 370,636 4,907,983 Total accumulated depreciation $ 11,447,845 $ 699,634 $ $ 12,147,479

Total capital assets being depreciated, net $ 9,220,696 $ 377,101 $ $ 9,597,797

Governmental Activities Capital Assets, Net $ 9,418,185 $ 455,774 $ 108,489 $ 9,765,470

Balance Balance Beginning End Of Year Increases Decreases Of Year

Business type activities: Furniture and equipment $ 95,887 $ 35,774 $ 14,671 $ 116,990 Less accumulated depreciation 41,498 9,749 14,671 36,576

Business Type Activities Capital Assets, Net $ 54,389 $ 26,025 $ $ 80,414

Page 30

Depreciation expense was charged to the following functions: Governmental Activities:

Instruction: Regular Other Special

Support services: Student support Instructional staff Administrative Operation and maintenance of plant Transportation

Total Depreciation Expense - Governmental Activities

Business Type Activities: Food service operations

(6) Long-term Liabilities

Changes in long-term liabilities for the year ended June 30, 2017 are summarized as follows:

Governmental activities: Revenue bonds Early retirement Net OPEB liability Capital lease Net pension liability

Total

Business type activities: Net pension liability

Early Retirement

$

$

$

Balance Beginning Of Year

1,300,000 478

280,888 442,304

2,872,775

4,896,445

Balance Beginning Of Year

100,804

Additions Reductions

$ $ 100,000 60,000 444 35,724

111,436 931,106

$ 1,026,830 $ 211,880

Additions Reductions

$ 29,415 $

$

$

$

Balance End

Of Year

$ 1,200,000 $ 60,034

316,612 330,868

3,803,881

$ 5,711,395 $

Balance End

Of Year

$ 130,219 $

468,829 20,127

2,563

220 140,813

7,693 16,413 42,976

699,634

9,749

Due Within

One Year

I 00,000 30,034

113,081

243,115

Due Within

One Year

The District offers a voluntary early retirement plan to its certified employees. Eligible employees must be at least age fiftyfive and must have completed fifteen years of continuous service to the District. Employees must complete an application, which is required to be approved by the Board of Education. Early retirement expenditures for the year ended June 30, 2017 totaled $444.

Page 31

Capital Lease

The District entered into a capital lease with Apple Inc. to purchase computers for $61,740 with a 5.32% interest rate. Annual lease payments are $16,876.43 endir g July 15, 2018. Details of the Capital Lease are as follows:

Capital Lease Issued July 15, 2015

Year Ending Interest June 30, Rate Principal Interest Total

2018 5.32% $ 15,215 $ 1,662 $ 16,877 2019 5.32% 16,024 852 16,876

$ 31,239 $ 2,514 $ 33,753

The District entered into a capital lease with Apple Inc. to purchase computers for $396,619 with a 2.47% interest rate. Semi-annual lease payments are $51,727.23 ending January 15, 2020. Details of the Capital Lease are as follows:

Capital Lease Issued Februa12 4, 2016

Year Ending Interest June 30, Rate Principal Interest Total

2018 2.47% $ 97,866 $ 5,588 $ I 03.454 2019 2.47% 99,863 3,592 I 03.455 2020 2.47% 101,900 1,554 I 03,454

$ 299,629 $ 10,734 $ 310,363

Revenue Bonds

Details of the District's June 30, 2017 StateHide Sales, Services and Use Tax Revenue indebtedness are as follows:

Issued July I, 2009 Year Ending Interest

June 30, Rates Principal Interest Total 2018 4.0% $ 100,000 $ 53,800 $ 153,800 2019 4.0% 100,000 49,800 149,800 2020 4.2% 100,000 45,800 145,800 2021 4.2% 100,000 41,600 141.600 2022 4.4% 100,000 37,400 137,400

2023-2027 4.4%-4.8% 500,000 119,600 619,600 2028-2029 4.9% 200,000 14,700 214,700

Total $ 1,200,000 $ 362,700 $ 1,562,700

The District has pledged future statewide sales, services and use tax revenues to repay the $1,675,000 of bonds issued in July 2009. The bonds were issued for the purpos, of financing a portion of the costs of the Niches Project. The bonds are payable solely from the proceeds of the statewide sal~s, services and use tax revenues received by the District and are payable through 2029. The bonds are not a general obligation of the District. However, the debt is subject to the constitutional debt limitation of the District. Annual principal and interest payments on the bonds are expected to require approximately 12% of the statewide sales, services and use tax revenues. The total principal and interest remaining to be paid on the bonds is $1,562,700. For the current year,$ 100,000 principal and $57,400 of interest was paid on the bonds and total statewide sales, services and use tax revenues were $644,86{.

Page 32

The resolution providing for the issuance of the statewide sales, services and use tax revenue bonds includes the following provisions:

a) $161,130 of the proceeds from the issuance of the revenue bonds shall be deposited to a reserve account to be used solely for the purpose of paying prncipal and interest on the bonds if insufficient money is available in the sinking account. The balance of the proceeds shall be deposited to the project account.

b) All proceeds from the statewide sal,s, services and use tax shall be placed in a revenue account.

c) Monies in the revenue account shall be disbursed to make deposits into a sinking account to pay the principal and interest requirements of the revenue bonds for the fiscal year.

d) Any monies remaining in the reven1e account after the required transfer to the sinking account may be transferred to the project account to be used for any lawful purpose.

The District complied with all of the revenu,· bond provisions during the year ended June 30, 2017.

During the year ended June 30, 2017, the Di.strict made principal, interest and fees payments totaling $279,731 under the agreements.

(7) Pension Plan

Plan Description~ !PERS membership is m,,ndatory for employees of the District, except for those covered by another retirement system. Employees of the District are provided with pensions through a cost-sharing, multiple-employer defined benefit pension plan administered by Iowa Public Employees' Retirement System (!PERS). !PERS issues a stand-alone financial report which is available to the public by mail at 740 I Register Drive P.O. Box 91 17, Des Moines, Iowa, 50306-9117 or at ,_, W\\'. ipL'rs.org.

!PERS benefits are established under Iowa Code Chapter 97B and the administrative rules thereunder. Chapter 97B and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information.

Pension Benefits A regular member may retire at nom1al retirement age and receive monthly benefits without an earlyretirement reduction. Normal retirement age is age 65, anytime after reaching age 62 with 20 or more years of covered employment, or when the member's years of service plus the member's age at the last birthday equals or exceeds 88, whichever comes first. These qualifications must be met on the member's first month of entitlement to benefits. Members cannot begin receiving retirement benefits before age 55. The formula used to calculate a Regular member's monthly !PERS benefit includes:

• A multiplier based on years of service. • The members highest five-year average salary, except members with service before June 30, 2012, the highest

three-year average salary as of that date will be used ifit is greater than the highest five-year average salary.

!fa member retires before normal retirement age, the member's monthly retirement benefit will be permanently reduced by an early-retirement reduction. The early-retirement reduction is calculated differently for service earned before and after July I, 2012. For service earned before July I, 21112, the reduction is 0.25% for each month the member receives benefits before the member's earliest normal retirement age. For service earned on or after July 1, 2012, the reduction is 0.50% for each month the member receives benefits before tge 65.

Generally, once a member selects a benefit cption, a monthly benefit is calculated and remains the same for the rest of the member's lifetime. However, to combat the effects of inflation, retirees who began receiving benefits prior to July 1990 receive a guaranteed dividend with their regular November benefit payments.

Disability and Death Benefits~ A vested member who is awarded federal Social Security disability or Railroad Retirement disability benefits is eligible to claim !PERS benefits regardless of age. Disability benefits are not reduced for early retirement. If a member dies before retirement, the member's beneficiary will receive a lifetime annuity or a lump-sum payment equal to the present actuarial value of the member's accrued benefit or calculated with a set formula, whichever is greater. When a member dies after retirement, death benefits depend on the benefit option the member selected at retirement.

Page 33

Contributions Contribution rates are established by !PERS following the annual actuarial valuation, which applies IPERS' Contribution Rate Funding Policy and Actuarial Amortization Method. State statute limits the amount rates can increase or decrease each year to 1 percentage point. !PERS Contribution Rate Funding Policy requires the actuarial contribution rate be determined using the "'entry age normal" actL1arial cost method and the actuarial assumptions and methods approved by the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30-year amortization period. The payment to amortize the unfunded actuarial liability is determined as a level percentage of payroll based on the Actuarial Amortization Method adopted by the Investment Board.

In fiscal year 2017, pursuant to the required cate, Regular members contributed 5.95% of covered payroll and the District contributed 8.93% of covered payroll, for a total rate of 14.88%.

The District's contributions to IPERS for th, year ended June 30, 2017 totaled $442,067.

Net Pension Liability, Pension Expense, Deterred Outflows of Resources and Deferred Inflows of Resources Related to Pensions~ At June 30, 2017, the District reported a liability of$3,934, 100 for its proportionate share of the net pension liability. The net pension liability was measJred as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The District's proportion of the net pension liability was based on the District's share of contributions to IPERS relative to the contributions of all !PERS participating employers. At June 30, 2016, the District's proportion was 0.0625124%, which was an increase of 0.002324% from its proportion measured as of June 30, 2015.

For the year ended June 30, 2017 the Distric: recognized pension expense of$497,702. At June 30, 2017, the District reported deferred out1lows of resources and deferred inflows of resources related to pensions from the following sources:

Differences between expected and actud experience

Changes of assumptions

Net difference between projected and actual earnings on IPERS' investments

Changes in prop011ion and differences t etween District contributions and the District's proportionate share of contributions

District contributions subsequent to the measurement date

Total

$

$

Deferred Outflows of Resources

34,770 $

60,022

560,485

724,689

442,067

1,822,033 $

Deferred Inflows of Resources

46,952

46,952

Page 34

$442,067 reported as deferred outflows of resources related to pensions resulting from the District contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Ye:tr Ended J1me 30,

2018 2019 2020 2021 2022 Total

There were no non-employer contributing entities to IPERS.

$

$

346,866 346,866 425,660 207,143

6,479 1,333,014

Actuarial Assumptions~ The total pension liability in the June 30, 2016 actuarial valuation was determined using the following actuarial assumptions applied to ail periods included in the measurement, as follows:

Rate of inflation (effective June 30, 2014)

Rates of salary increase (effective June 30, 2010)

Long-term investment rate of return (effective June 30, 1996)

Wage growth (effective June 30, 1990)

3.00% per annum.

4.00 to 17.00% average, including inflation. Rates vary by membership group.

7.50% compounded annually, net of investment expense, including inflation.

4.00%) per annum, based on 3.00% inflation and 1.00% real wage inflation.

The actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial experience studies with dates corresponding to those listed above.

Mortality rates were based on the RP-2000 Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA.

The long-term expected rate of return on IPLRS' investments was determined using a building-block method in which bestestimate ranges of expected future real rates (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are corribined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Long-Tenn Expected Asset Class Asset Allocation Real Rate of Return

Core plus fixed income 28% 1.90% Domestic equity 24% 5.85% International equity 16% 6.32% Private equity/debt 11% 10.31% Real estate 8% 3.87% Credit opportunities 5% 4.48%) U.S. TIPS 5% 1.36% Other real assets 2%) 6.42% Cash 1% -0.26%

Total 100%

Page 35

Discount Rate-·- The discount rate used to m=asure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed employee contributions will be made at the contractually required rate and contributions from the District will be made at contractually required rates, actuarially determined. Based on those assumptions, the !PERS' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Ther=fore, the long-term expected rate of return on IPERS. investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the District's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following presents the District's proportionate share of the net pension liability calculated using the discount rate of 7.50%. as well as what the District's proportionate share of tht net pension liability would be if it were calculated using a discount rate I% lower (6.50%) or 1% higher (8.50%) than the current rate.

1% Discount 1% Decrease Rate Increase (6.50%) (7.50%) (8.50%)

District's proportionate share of the net pension liability $6,364,841 $3,934,100 $1,882,522

!PERS' Fiduciary Net Position - Detailed information about !PERS' fiduciary net position is available in the separately issued !PERS financial report which is available on !PERS' website at WW\\.ipcrs.on!.

Payables to !PERS At June 30, 2017, the District reported no payables to !PERS' for legally required District contributions and for legally required District contributions withheld from employee wages which had not yet been remitted to !PERS.

(8) Other Postemployment Benefits (OPEB)

Plan Description - The District is a member of a ten school trust·- (NEISIT) Northeast Iowa Schools Insurance Trust. Each school provided active and retired employee information. The plan provides medical benefits to retirees and their spouses. The District had 93 active and O retired meJTbers in the plan. Retired participants must be 55 or older at retirement.

The medical/prescription drug benefits are p·ovided through a fully-insured plan with Well mark. Retirees under age 65 pay the same premium for the medical/prescriptiJn drug benefit as active employees, which results in an implicit subsidy and an OPEB liability.

Funding Policy- The contribution requiremrnts of plan members are established and may be amended by the District. The District currently finances the retiree benefit plan on a pay-as-you-go basis.

Annual OPEB Cost and Net OPEB Obligation - The District's annual OPEB cost is calculated based on the annual required contribution (ARC) of the District, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding which, if paid en an ongoing basis, is projected to cover nonnal cost each year and amortize any unfunded actuarial liabilities over a period n-Jt to exceed 30 years.

The following table shows the components cf the District's annual OPEB cost forthe year ended June 30, 20 I 7, the amount actually contributed to the plan and changes in the District's net OPEB obligation:

Annual required contribution $ 41,795 Interest on net OPEB obligation 7,022 Adjustment to annual required contribution -13,093

Annual OPEB cost $ 35,724 Contributions made

Increase in net OPEB obligation $ 35,724 Net OPEB obligation beginning of year 280,888

Net OPEB obligation end of year $ 316,612

Page 36

For calculation of the net OPEB obligation, 1he actuary has set the transition day as July I, 2016. The end of year net OPEB obligation was calculated by the actuary as the cumulative difference between the actuarially determined funding requirements and the actual contributions for the year ended June 30, 2017.

For the year ended June 30, 20 I 7, the District contributed $666,148 to the medical plan. Plan members eligible for benefits contributed $63,554 or 8.7% of the premium costs.

The District's annual OPEB cost, the percen:age of annual OPEB cost contributed to the plan and the net OPEB obligation are summarized as follows:

Percentage of Net Year Annual Annual OPEB OPEB Ended OPEB Cost Cost Contributed Obligation June 30, 20 I 5 $42,C33 8.9% $241,895 June 30, 2016 $38,,93 0% $280,888 June 30, 2017 $41,795 0% $316,612

Funded Status and Funding Progress As of July I, 2016, the most recent actuarial valuation date for the period July I.2016 through June 30, 2017, the actuarial accrued liability was $232,732, with no actuarial value of assets. resulting in an unfunded actuarial accrued liability (UAAL) of$232,732. The covered payroll (annual payroll of active employees covered by the plan) was $3,857,431 and the ratio of the UAAL to covered payroll was 6.0%. As of June 30, 2017, there were no trust fund assets.

Actuarial Methods and Assumptions Actuarial valuations ofan ongoing plan involve estimates of the value ofrepotied 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. Actuarially determined amounts are subject to continual revision as actual results are compared with Jast expectations and new estimates are made about the future. The Schedule of Funding Progress for the Retiree Health Plai\ presented as Required Supplementary Information in the section following the Notes to Financial Statements, presents multiyear trend infonnation about whether the actuarial value of plan assets is increasing or decreasing over time relative tc1 the actuarial accrued liabilities for benefits.

Pr~jections of benefits for financial reporting purposes are based on the plan as understood by the employer and the plan members 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 designed to reduce the effects of short-term '-'Oiatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

As of the July I. 2016 actuarial valuation date, the unit credit actuarial cost method was used. The actuarial assumptions include a 2.5% discount rate based on the Districfs funding policy. The projected annual medical trend rate is 6%.

Mortality rates are from the RP2000 Group Annuity Mortality Table, applied on a gender-specific basis. Annual retirement and termination probabilities were developed from the retirement probabilities from the IPERS Actuarial Report as of June 30, 2015 and applying the termination factors used in the IPERS Actuarial Report as of June 30, 2015.

The UAAL is being amortized as a level per,;entage of projected payroll expense on an open basis over 30 years.

(9) Risk Management

Postville Community School District is expcsed to various risks of loss related to torts; theft; damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks are covered by the purchase of commercial insurance. The District assume~ liability for any deductibles and claims in excess of coverage limitations. Settled claims from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years.

Page 37

(10) Area Education Agency

The District is required by the Code of Iowa to budget for its share of special education support, media and educational services provided through the Area Education Agency. The District's actual amount for this purpose totaled $292,305 for the year ended June 30, 2017 and is recorded in the General Fund by making a memorandum adjusting entry to the cash basis financial statements.

(11) Tax Abatements

Governmental Accounting Standards Board Statement No. 77 defines tax abatements as a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which (a) one or more governments promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments.

Tax Abatements of Other Entities

Property tax revenues of the District were reduced by the following amounts for the year ended June 30, 2017 under agreements entered into by the following entities:

Entity City of Postville Fayette County Allamakee County

Tax Abatement Program

Other tax abatement program

$

$ $

Amount of Tax Abated

346

The State of Iowa reimburses the District an amount equivalent to the increment of valuation on which property tax is divided times $5.40 per $1,000 of taxable valuation. For the year ended June 30, 2017, this reimbursement amounted to $119.

( 12) Categorical Funding

The Districr s restricted fund balance for categorical funding at June 30, 2017 is comprised of the following programs:

Program Limited English Proficiency Home School Assistance Gifted and Talented Programs Dropout Prevention Beginning Teacher Mentoring Teacher Salary Supplement At Risk Core Curriculum Preschool Before and After School Early Readers

Total

(13) Subsequent Events

$

$

Amount 387,686 301,401

53,905 7,647 2,044

35.244 97,738 33,321 15,577 17,940 18,280

970,783

The District has evaluated subsequent events through January 19, 2018 which is the date that the financial statements were available to be issued.

Page 38

(14) Construction Commitment

The District entered into a contract totaling $547,858 for school improvements. As of June 30, 2017, costs of$78.673 had been incurred. The balance of $5 I 8,498 remaining at June 30, 20 I 7 will be paid as work on the project progresses.

(15) New Accounting Pronouncement

The District adopted the tax abatement disclosure guidance set forth in Governmental Accounting Standards Board Statement No. 77, Tax Abatement Disclosures. The St:ttement sets forth guidance for the disclosure of information about the nature and magnitude of tax abatements which will make these transactions more transparent to financial statement users. Adoption of the guidance did not have an impact on amounts reported in the financial statements. The Notes to Financial Statements include information about tax abatements of other entities which impact the District.

(l 6) Prospective Accounting Change

The Governmental Accounting Standards Board has issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. This statement will be implemented for the fiscal year ending June 30. 2018. The revised requirements establish new financial reporting requirements for state and local governments which provide their employees with postemployment benefits other than pensions, including additional note disclosures and required supplementary information. In addition, the Statement of Net Position is expected to include a significant liability for the government's other postemployment benefit~.

Page 39

Required Supplementary Information


Budgetary Comparison Schedule of Revenues, Expenditures/Expenses and Changes in Balances -Budget and Actual - All Governmental Funds and Proprietary Funds

Revenues: Local sources Intermediate sources State sources Federal sources

Total Revenues

Expenditures/Expenses: Instruction Support services Non-instructional programs Other expenditures

Total Expenditures/Expenses



Excess (deficiency) of revenues over (under) expenditures/expenses

Other financing sources, net

Excess (deficiency) of revenues and other financing sources over (under) expenditures/expenses and other financing uses Balances beginning of year

Balances end of year

See accompanying independent auditor's report.

Governmental Funds Actual

$ 2,891,484 $

5,582,757 642,400

$ 9,116,641 $

$ 5,767,987 $ 2,424,581

52,090 1,561,666

$ 9,806,324 $

$ -689,683 $

13,447

$ -676,236 $ 4,254,323

$ 3,578,087 $

Proprietary Fund

Actual

60,084

3,631 425,827 489.542

3 16,065

438,831

454,899

34,643

34,643 74,107

108,750

Final to Total Budgeted Amounts Actual

Actual Original Final Variance

$ 2,951,568 $ 2,935,833 $ 2,935,833 $ 15,735

5,586,388 5,612,634 5,612,634 -26,246 1,068,227 1,175,000 1,175,000 -106,773

$ 9,606,183 $ 9,723,467 $ 9,723,467 $ -117,284

$ 5,767,990 $ 5,605,100 $ 5,900,000 $ 132,010 2,440,646 2,460,300 2,460,300 19,654

490,921 518,000 518,000 27,079 1,561,666 1,591,090 2,100,000 538,334

$ 10,261,223 $ 10,174,490 $ 10,978,300 $ 717,077

$ -655,040 $ -451,023 $ -1,254,833 $ 599,793

13,447 30,000 30,000 -16,553

$ -641,593 $ -421,023 $ -1,224,833 $ 583,240 4,328,430 3,953,446 3,953,446 374,984

$ 3,686,837 $ 3,532,423 $ 2,728,613 $ 958,224

Page 40


Notes to Required Supplementary Information - Budgetary Reporting


This budgetary comparison is presented as Required Supplementary Information in accordance with Governmental Accounting Standards Board Statement No. 41 for governments with significant budgetary perspective differences resulting from not being able to present budgetary comparisons for the General Fund and each major Special Revenue Fund.

In accordance with the Code oflowa, the Board of Education annually adopts a budget following required public notice and hearing for all funds except Private Purpose Trust and Agency Funds. The budget may be amended during the year utilizing similar statutorily prescribed procedures. The District's budget is prepared on a GAAP basis.

Formal and legal budgetary control for the certified budget is based upon four major classes of expenditures known as functions, not by fund. These four functions are instruction, support services, non-instructional programs and other expenditures. Although the budget document presents function expenditures or expenses by fund, the legal level of control is at the aggregated functional level, not by fund. The Code of Iowa also provides District expenditures in the General Fund may not exceed the amount authorized by the school finance formula. During the year, the District adopted one budget amendment, increasing budgeted expenditures by $803,810.

Page 41


Schedule of the District's Proportionate Share of the Net Pension Liability

Iowa Public Employees' Retirement System For the Last Three Years*


2017 2016

District's proportion of the net pension liability 0.0625124% 0.060188%

District's proportionate share of the net pension liability $ 3,934,100 $ 2,973,579

District's covered-employee payroll $ 4,950,355 $ 4,506,932

District's proportionate share of the net pension liability as a percentage of its covered-employee payroll 79.47% 65.98%

IPERS' net position as a percentage of the total pension liability 81.82% 85.19%

2015

0.055509%

$ 2,246,502

$ 4,123,446

54.48%

87.61%

*In accordance with GASB Statement No. 68, the amounts presented for each fiscal year were determined as of June 30 of the preceding year.

See accompanying independent auditor's report. Page 42

Statutorily required contribution

Contributions in relation to the statutorily required contribution

Contribution deficiency (excess)

District's covered-employee payroll

Contributions as a percentage of covered-employee payroll


Schedule of District Contributions

Iowa Public Employees' Retirement System For the Last Ten Years


2017 2016 2015

$ 442,067 $ 402,469 $ 368,224

-442,067 -402,469 -368,224

$ $ $

$ 4,950,355 $ 4,506,932 $ 4,123,446

8.93% 8.93% 8.93%


2014 2013

$ 330,805 $ 304,509

-330,805 -304,509

$ $

$ 3,704,425 $ 3,512,212

8.93% 8.67%

2012 201 I 2010 2009 2008

$ 276,612 $ 250,208 $ 234,066 $ 215,427 $ 195,860

-276,612 -250,208 -234,066 -215,427 -195,860

$ $ $ $ $

$ 3,427,658 $ 3,648,098 $ 3,519,787 $ 3,392,551 $ 3,237,358

8.06% 6.92% 6.65% 6.35% 6.05%

Page 43

Changes o(henefit terms:

Post,ille Community School District

Notes to Required Supplementary Information - Pension Liability

Year ended June 30, 2017

Legislation enacted in 20 IO modified benefit terns for Regular members. The definition of final average salary changed from the highest three to the highest five years of covered wages. The vesting requirement changed from four years of service to seven years. The early retirement reduction increased from 3% per year measured from the member's first unreduced retirement age to a 6% reduction for each year of retirement before age 65.

Legislative action in 2008 transferred four group:, - emergency medical service providers, county jailers, county attorney investigators, and National Guard installation security officers - from Regular membership to the protection occupation group for future service only.

('hanges of assumptions:

The 2014 valuation implemented the following refinements as a result ofa quadrennial experience study:

• Decreased the inflation assumption from 3.25% to 3.00%. • Decreased the assumed rate of interest on member accounts from 4.00% to 3.75% per year. • Adjusted male mortality rates for retirees in :he Regular membership group. • Moved from an open 30 year amortization period to a closed 30 year amortization period for the UAL (Unfunded Acturarial

Liability) beginning June 30, 2014. Each year thereafter, changes in the UAL from plan experience will be amortized on a separate closed 20 year period.

The 2010 valuation implemented the following refinements as a result ofa quadrennial experience study:

• Adjusted retiree mortality assumptions. • Modified retirement rates to reflect fewer retirements. • Lowered disability rates at most ages. • Lowered employment termination rates. • Generally increased the probability of terminating members receiving a deferred retirement benefit. • Modified salary increase assumptions based on various service duration,

Page 44

Actuarial Year Actuarial Value of

Ended Valuation Assets June 30, Date (a)

2009 July 1, 2008 2010 July 1, 2008 201 I July I, 2010 2012 July 1, 2010 2013 July 1,2012 2014 July 1,2012 2015 July 1, 2014 2016 July I, 2014 2017 July 1,2016


Schedule of Funding Progress for the Retiree Health Plan

(In Thousands)


Actuarial Accrued Unfunded Liability AAL Funded (AAL) (UAAL) Ratio

(b) (b-a) (alb)

$437 $437 0.0% $427 $427 0.0% $271 $271 0.0% $266 $266 0.0% $263 $263 0.0% $264 $264 0.0% $259 $259 0.0% $250 $250 0.0% $233 $233 0.0%

UAAL as a Percentage

Covered of Covered Payroll Payroll

© ((b-a)/c)

$2,915 14.9% $2,676 15.9% $2,713 10.0% $2,617 9.8% $2,673 10.2% $2,831 9.3% $3,122 8.3% $3,460 7.2% $3,857 6.0%

See Note 8 in the accompanying Notes to Financial Statements for the plan description, funding policy, annual OPEB Cost, net OPEB obligation, funded status and funding progress.

See accompanying independent auditor's report Page 45

Supplementary Information

Assets Cash, cash equivalents and pooled investments Due from other funds

Total Assets

Liabilities, Deferred Inflows of Resources & Fund Balances Liabilities:

Accounts payable Total Liabilities


Debt service Student activities

Total fund balances

Total Liabilities, Deferred Inflows of Resources & Fund Balances



Combining Balance Sheet Non-Major Governmental Funds

,lune 30, 2017

$

$

$ $

$

$

$

Debt Service

177,825 $

177,825 $

$

$

177,825 $

177,825 $

177,825 $

Schedule I

Special Revenue

Student Activity

5,996 $ 2,894

8,890 $

1,333 $ 1,333 $

$

7,557 7,557 $

8,890 $

Total

183,821 2,894

186,715

1,333 1,333

177,825 7,557

185,382

186,715

Page 46

Schedule 2


Combining Schedule of Revenues, Expenditures and Changes in Fund Balances

Non-Ma,jor Governmental Funds


Special Revenue

Debt Student Service Activity Total

Revenues: Local Sources:

Other $ 1,820 $ 92,949 $ 94,769 Total Revenues $ 1,820 $ 92,949 $ 94,769


Instruction: Other instruction $ $ 103,927 $ 103,927

Other Expenditures: Long-Term Debt:

Principal 211,436 211,436 Interest and fiscal charges 68,295 68,295

Total Expenditures $ 279,731 $ 103,927 $ 383,658

Excess (deficiency) of revenues over (under) expenditures $ -277,911 $ -10,978 $ -288,889

Other Financing Sources (Uses): Operating transfers in 277,745 2,097 279,842

Change in fund balances $ -166 $ -8,881 $ -9,047

Fund balances beginning of year 177,991 16,438 194,429

Fund Balances End of Year $ 177,825 $ 7,557 $ 185,382


Schedule 3


Combining Balance Sheet Capital Projects Fund Accounts

June 30, 2017

Caeital Projects Statewide Physical

Sales, Services Plant and and Equipment

Use Tax Levy Total Assets Cash, cash equivalents and pooled investments $ 846,691 $ 87.478 $ 934,169 Receivables:

Property Tax: Delinquent 4,079 4,079 Succeeding year 263,463 263,463

Income surtax 39,056 39,056 Due from other governments 53,674 53,674

Total Assets $ 900,365 $ 394,076 $ 1,294,441

Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Other liabilities $ $ 13,263 $ 13,263 Total Liabilities $ $ 13,263 $ 13,263

Deferred inflows of resources: Unavailable revenues:

Succeeding year property tax $ $ 263,463 $ 263,463 Other 39,056 39,056

Total deferred inflows of resources $ $ 302,519 $ 302,519


School infrastructure $ 900,365 $ $ 900,365 Physical plant and equipment 78,294 78,294

Total fund balances $ 900,365 $ 78,294 $ 978,659

Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 900,365 $ 394,076 $ 1,294,441


Page 48

Schedule 4


Combining Schedule of Revenues, Expenditures and Changes in Fund Balances Capital Projects Fund Accounts


Caeital Projects Statewide Physical

Sa Jes, Services Plant and and Equipment

Use Tax Levi, Total Revenues:

Local Sources: Local tax $ $ 300,147 $ 300,147 Other 2,882 33,253 36,135

State sources 644,866 3,976 648,842 Total Revenues $ 647,748 $ 337,376 $ 985,124


Support Services: Instructional staff services $ $ 17,300 $ 17,300 Administrative services 1,000 1.000 Operation and maintenance of prope1ty

services 28,853 28,853 Other Expenditures:

Facilities acquisition 635,135 354.495 989,630 Total Expenditures $ 636,135 $ 400,648 $ 1,036,783

Excess (deficiency) of revenues over (under) expenditures $ 11,613 $ -63,272 $ -51,659

Other Financing Sources (Uses): Operating transfers out -157,414 -120,331 -277,745

Change in Fund Balances $ -145,80 I $ -183,603 $ -329.404 Fund balances beginning of year 1,046,166 261,897 1,308,063

Fund Balances End of Year $ 900,365 $ 78,294 $ 978,659


Schedule 5


Schedule of Changes in Special Revenue Fund, Student Activity Accounts


Revenues Expenditures Balance and and Intra- Balance

Beginning Inter-fund Inter-fund Fund End of Account Of Year Transfers Transfers Transfers Year

Drama $ $ 4,522 $ 4,471 $ $ 51 Vocal music 1,940 1,742 293 -3,389 High School golf 26 765 739 High School boys basketball 2,156 2,276 120 High School boys football 6,455 6,800 345 High School baseball 1,646 5,056 3,410 High School boys track I, 175 739 436 High School wrestling 2,985 4,794 1,809 High School girls basketball 2,156 2,505 349 High School volleyball 2,495 1,305 -1, 190 High School softball 3 254 2,464 2,207 High School girls track 752 752 Thespians 400 400 Class of20 I 7 1,019 6,364 5,769 -) ,614 Class of 2018 10,464 10,895 431 Cross Country 90 90 High School student council 81 1,787 I, 123 -81 664 Student Ambassadors 497 1,770 1,414 57 910 Mirror 1,743 2,548 1,717 -2,574 Cheerleaders 399 1,261 1,162 498 Middle School student council 65 1,661 1,232 -65 429 Interest account 36 36 Resale athletics I 1,631 10,045 -1,035 551 Resale band 680 680 FFA 9,875 18,733 22,636 -3,297 2,675 High School boys soccer 490 3,392 2,902 Athletics 136 10,385 8,569 -1,952 Middle School boys basketball 567 720 153 Middle School football 648 648 Middle School boys track 251 99 152 Middle School wrestling 80 80 Middle School girls basketball 605 605 Middle School volleyball 500 500 Middle School girls track 251 214 37 Middle School drama 835 797 38

Total $ 16,438 $ 95,046 $ 103,927 $ $ 7,557


Schedule 6


Schedule of Changes in Fiduciary Assets and Liabilities -.\gency Funds - Summary


Balance Balance Beginning End

of Year Additions Deductions of Year Assets Cash, cash equivalents and pooled investments $ 6,620 $ 73,628 $ 80,248 $ Accounts receivable 23,230 7,083 16,147

Tota I Assets $ 29,850 $ 73,628 $ 87,331 $ 16,147

Liabilities Due to other funds $ $ 2,894 $ $ 2,894 Other accounts payable 17,191 3 15,825 1,369 Accounts payable 12,659 70,731 71,506 11.884

Total Liabilities $ 29,850 $ 73,628 $ 87,331 $ 16,147


Schedule 7


Schedule of Changes in Fiduciary Assets and Liabilities -Agency Funds - Detail


Balance Balance Beginning End

of Year Additions Deductions Transfers of Year

Band boosters $ 2,694 $ 15,689 $ 16,832 $ $ 1,551 Athletic events 6 6,784 6,784 6 Climate committee 163 891 789 265 Retiree insurance 5,191 12,009 11,743 5,457 Bell fund 2,252 2,252 Outdoor bulletin 1.869 1,869 Production class I I Music event 482 482 AEA-l Superintendents 32,483 32,483 Upper IA conference 711 711 PSAT/Bookfair 2,164 2,164

Total $ 12,659 $ 70,731 $ 71,506 $ $ 11,884


Assets

Cash, cash equivalents and pooled investments

Total Assets

Liabilities Liabilities

Net Position Restricted for Scholarships



Sch,·dule of Fiduciary Net Position Private Purpose Trusts

June 30, 2017

Knutson Scholarship

$ 351 $

$ 351 $

$ $

$ 351 $

Schedule 8

Harnack Capper Scholarship Scholarship Total

10,729 $ 11,029 $ 22,109

10,729 $ 11,029 $ 22,109

$ $

10,729 $ 11,029 $ 22,109

Page 53

Additions: Local Sources:

Interest from non-expendable trust fund investments

Deductions: Instruction:

Regular Instruction: Scholarships

Change in Net Position

Net Position, beginning of year

Net Position, End of Year


Schedule of Changes in Fiduciary Net Position Private Purpose Trusts


$

$

$

$

Knutson Scholarship

$

150 $

-150 $

501

351 $

Harnack Scholarship

116 $

117 $

-I $

10,730

10,729 $


Capper Scholarship

133 $

133 $

$

11,029

11,029 $

Schedule 9

Total

249

400

-151

22.260

22,109

Page 54


Schedule of Revenues by Source and Expenditures by Function All Governmental Funds

For the Last Ten Years

Modified Accrual Basis 2017 2016 2015 2014

Revenues: Local Sources:

Local tax $ 2,534,537 $ 2,516,102 $ 2,668,724 $ 2,766,754 Tuition 160,625 127,565 207,813 167,036 Other 196,322 208,522 235,749 178,006

Intennediate sources State sources 5,582,757 5,089,633 5,112,671 4,327,169 Federal sources 642,400 731,763 718,115 780,516

Total $ 9,116,641 $ 8,673,585 $ 8,943,072 $ 8,219,481

Expenditures: lnstruction:

Regular instruction $ 3,784,222 $ 3,395,630 $ 2,798,260 $ 2,600,007 Special instruction 1,291,140 711,208 657,157 705,582 Other instruction 692,625 1,786,473 1,469,858 1,305,995

Support services: Student services 296,760 207,199 211,329 178,393 Instructional staff services 472,600 350,166 338,013 369,028 Administrative services 757,613 752,629 719,463 713,130 Operation and maintenance of plant services 634,328 663,860 622,354 558,222 Transportation services 263,280 142,759 202,636 255,853 Community services

Non-instructional programs 52,090 45,132 55,653 58,408 Other expenditures:

Facilities acquisition 989,630 171,344 487,866 339,432 Long-term debt: Principal 211,436 232,793 213,110 211,901 Interest and other charges 68,295 66,615 72,522 77,331

AEA flow-through 292,305 284,571 283,428 247,673

Total $ 9,806,324 $ 8,810,379 $ 8,131,649 $ 7,620,955


Schedule 10

Modified Accrual Basis 2013 2012 2011 2010 2009 2008

$ 3,042,624 $ 3,060,899 $ 2,747,374 $ 2,576,536 $ 2,350,617 $ 2,322,407 132,378 I 33,517 95,741 102,964 88,840 87,343 212,850 218,099 294,400 248,477 298,821 263,029

3,282,778 3,262,702 3,076,340 3,555,051 3,292,417 3,428,842 705,258 743,043 916,518 896,392 556,900 440,658

$ 7,375,888 $ 7,418,260 $ 7,130,373 $ 7,379,420 $ 6,587,595 $ 6,542,279

$ 2,353,382 $ 2,286,919 $ 2,331,606 $ 2,542,918 $ 2,225,896 $ 2,169,542 643,297 623,360 643,509 812,871 580,703 608,506

1,317,039 1,351,055 1,309,057 874,474 1,090,093 969,838

180,748 187,149 251,485 219,731 219,095 211,933 380,007 144,507 160,323 147,346 174,991 181,102 682,153 675,881 658,275 593,482 580,954 628,033 508,013 486,220 558, I 52 547,806 537,891 558,463 257,836 231,943 268,730 156,599 212,470 241,865

21,062 2,173 1,681 1,386 I, 151 1,160

203,470 304,091 562,985 2,014,889 307,074 21,313

134,024 1,223,354 259,393 250,752 242,300 229,016 77,639 81,060 93,752 I 39,951 62,138 51,120

228,603 228,360 253,008 252,467 236,277 226,362

$ 6,987,273 $ 7,826,072 $ 7,351,956 $ 8,554,672 $ 6,471,033 $ 6,098,253

Page 55


Schedule of Expenditures of Federal Awards


Grantor/Program Indirect:

U.S. Department of Agriculture: Iowa Department of Education:

Child Nutrition Cluster: Healthier U.S. School Challenge School Breakfast Program

National School Lunch Program

Summer Food Service Program Basic Building and Strengthening Iowa Community Support for

Nutrition and Health Fresh Fruit and Vegetables

U.S. Department of Education: Iowa Department of Education:

Title I, Part A Cluster: Title I Grants to Local Educational Agencies

Title I Grants Migrant Education

Career and Technical Education - Basic Grams to State Safe and Drug Free Schools and Communities - State Grants Twenty-First Century Community Leaming Center Rural Education Achievement Program Title Ill English Language Acquisition State Grants Supporting Effective Instruction State Grants Grants for State Assessments and Related Activities

Keystone Area Education Agency: Special Education -- Grants to States

Total

*- Includes $38,520 of non-cash awards.


CFDA Number

10.543 10.553

I 0.555

10.559

10.561 10.582

84.010

84.011

84.048 84. 186 84.287 84.358 84.365 84.367 84.369

84.027

Pass-through Entity

Identifying

NIA NIA NIA NIA

NIA N/A

2807.40 FYI?

GG-08.22 FYI? FYI? FYI?

17ELA-05 23-5741

FYl7

FYI?

$

$

$

$

$

$ $ $ $ $ $

$

$

Schedule 11

Expenditures

500 53,283

349.632 * 992

4,241 21.420

430,068

291.780

172,646 464,426

8,270 525

59.959 14.168 6,949

24,071 1,3 I 8

39,032

1,048,786

Page 56


Schedule of Expenditures of Federal Awards


Schedule 11

Basis of Presentation - The accompanying :khedule of Expenditures of Federal Awards (Schedule) includes the federal award activity of Postville Community School District under programs of the federal government for the year ended June 30, 2017. The information in this Schedule is presented in accordance with the requirements of Title 2, U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Unifonn Guidance). Because the Schedule presents only a selected portion of the operations of Postville Community School District, it is not intended to and does not present the financial position, changes in financial position or cash flows of Postville Community School District.

Summary of Significant Accounting Policies Expenditures reported in the Schedule are reported on the accrual or modified accrual basis of accounting. Such ,~xpenditures are recognized following, as applicable, either the cost principles in 0MB Circular A-87, Cost Principles for Stare, Local and Indian Tribal Governments, or the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. .

Indirect Cost Rate - Postville Community School District has elected to use the I 0% de minim is indirect cost rate as allowed under the Uniform Guidance.


Page 57

Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters

Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards


Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters

To the Board of Education of Postville Community School District:

Based on an Audit of Financial Statements Perforn1ed in Accordance with Government Auditing Standards

20 l East /v\o;ia S1ree!

PO Box 310 Den·Jer. bNo 50622

13 -i 9) 984-5292

FAX i3l9i 9846408

I have audited in accordance with U.S. generally accepted auditing standards 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 infonnation of Postville Community School District as of and for the year ended June 30, 2017, and the related Notes to Financial Statements, which collectively comprise the District's basic financial statements, and have issued my report thereon dated January 19, 2018.

Internal Control Over Financial Reporting

In planning and performing my audit of the financial statements, I considered Postville Community School District's internal control over financial reporting to determine the audit procedures appropriate in the circumstances for the purpose of expressing my opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Postville Community School District ·s internal control. Accordingly, I do not express an opinion on the effectiveness of Postville Community School District"s interna I control.

My consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying Schedule of Findings, I identified deficiencies in internal control I consider to be material weaknesses and significant deficiencies.

A deficiency in internal control exists when the design or operation of the control does not allow management or employees, in the normal course ofperfonning 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 a material misstatement of the District's financial statements will not be prevented or detected and corrected on a timely basis. I consider the deficiencies described in Part II of the accompanying Schedule of Findings as items 2017-002 through 2017-004 to be material weaknesses.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control which is less severe than a material weakness, yet important enough to merit attention by those charged with governance. I consider the deficiency described in Part II of the accompanying Schedule of Findings as item 2017-005 to be a significant deficiency.

N,t/v\B[R: lov_;o SuciEc-1y of Certified PuLlic. Accouniants • tV1innesoto Soc!ely d Ceitified Public Accoun1on1s • Americo'1 lns1;tute d Ceri1fied Accountonls • Division for CPL\ Firms • Pr!vole Con•pon1es P1octice Sec.lion

Page 58

Complia.r1,e and Other Matters

As pm1 of obtaining reasonable assurance about whether Postville Community School District's financial statements are free of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, non-compliance 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 ofmy audit and, accordingly, I do not express such an opinion. The results ofmy tests disclosed one instance of non-compliance that is required to be reported under Government Auditing Standarsf_;;. It is described as item 2017-00 I in the accompanying Schedule of Findings. I also noted certain immaterial instances of noncompliance or other matters which are described in Part IV of the accompanying Schedule of Findings.

Comments involving statutory and other legal matters about the District's operations for the year ended June 30, 2017 are based exclusively on knowledge obtained from procedures performed during my audit of the financial statements of the District. Since my audit was based on tests and samples, not all transactions that might have had an impact on the comments were necessarily audited. The comments involving statutory and other legal matters are not intended to constitute legal interpretations of those statutes.

Postville Communitv School District's Responses to the Findings

Postville Community School District's responses to the findings identified in my audit are described in the accompanying Schedule of Findings. Postville Community School District's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, I express no opinion on them.

Puroose of this Report

The purpose of this report is solely to describe the scope ofmy testing ofintemal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District'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 District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

I would like to acknowledge the many courtesies and assistance extended to me by personnel of Postvi11e Community School District during the course ofmy audit. Should you have any questions concerning any of the above matters, I shall be pleased to discuss them with you at your convenience.


January 19, 2018

Page 59

Independent Auditor's Report on Compliance for Each Major Federal Program and on Internal Control over Compliance

Required by the Uniform Guidance


Independent Auditor's Repo11 on Compliance for Each Major Federal Program and on Internal Control over Compliance

Reouired bv the Uniform Guidance

To the Board of Education of Postville Community School District

!{eport on Compliance for Each Major Federal Program

20 l fos1 Main Sireel PO.Box310

Denver, lovvo 50622

(3 i9) 984 5292 FAX (319) 9846408

I have audited Postville Community School District's compliance with the types of compliance requirements described in U.S. Office of Management and Budget (0MB) Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017. Postville Community School District's major federal programs are identified in Part I of the accompanying Schedule of Findings.

Management's Responsibility

Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor's Responsibilitv

My responsibility is to express an opinion on compliance for each of Postville Community School District's major federal programs based on my audit of the types of compliance requirements referred to above. I conducted my audit of compliance in accordance with U.S. generally accepted auditing standards, the standcrds applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United StatES, and the audit requirements of Title 2, U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Reguirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that I plan and perfonn 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 h test basis, evidence about Postville Community School District's compliance with those requirements and performing such other procedures as I considered necessary in the circumstances.

I believe my audit provides a reasonable basis for my opinion on compliance for each of the major federal programs. However, my audit does not provide a legal determination of Postville Community School District's compliance.

Opinion on Each Major Federal Program

In my opinion, Postville Community 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, 2017.

/v'{i'JB[R: b,,,,-o Souety of Certified Public Accountants • /v\inneso10 Society of Ce11ified Pubk Accounlonts • Amciriccn hslilute of Certified Accountonls • Division for CPfa, Firms • Pri-mtc Companies Prcctice Sec!ion

Page 60

Report on Internal Control Over Compliance

The management of Postville Community 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 perfonning my audit of compliance, I considered Postville Community 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 detennine the auditing procedures 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 the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, I do not express an opinion on the effectiveness of Postville Community 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 ofa federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance such that there is a reasonable possibility 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 ofa 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.

My 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 and, therefore, material weaknesses or significant deficiencies may exist that were not identified. I identified a deficiency in internal control over compliance described in the accompanying Schedule of Findings as item 2017-007 I consider to be a material weakness.

Postville Community School District's response to the internal control over compliance finding identified in my audit is described in the accompanying Schedule of Findings. Postville Community School District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, I express no opinion on the response.

The purpose of this report on internal control over compliance is solely to describe the scope ofmy testing of internal control over compliance and the results of that testing based on the requirements of Uniform Guidance. Accordingly, this report is not suitable for any other purpose.


January 19,2018

Page 61


Schedule of Findings


Part I Summary of the Independent Auditor's Results:

a) Unmodified opinions were issued on the fimmcial statements prepared in accordance with U.S. generally accepted accounting principles.

b) A significant deficiency and material weakn 1!sses in internal control over financial reporting were disclosed by the audit of the financial statements.

c) The audit disclosed one non-compliance item which is not material to the financial statements.

d) A material \\1eakness in internal control over the major programs was disclosed by the audit of the financial statements

e) An unmodified opinion was issued on compliance with requirements applicable to each major program.

f) The audit disclosed no audit findings which 1re required to be reported in accordance with the Uniform Guidance, Section 200.515.

g) The major programs were as follows:

• Child Nutrition Cluster

o CFDA Number 10.543 - Healthier U.S. School Challenge o CFDA Number 10.553 - School Breakfast Program o CFDA Number I 0.555 - National School Lunch Program o CFDA Number I 0.559 - Summer Food Service Program o CFDA Number I 0.56 I - Basic Building and Strengthening Iowa Community Support for

Nutrition and Health o CFDA Number 10.582 - Fresh Fruit and Vegetables

• Title I Part A Cluster

o CFDA Number 84.010-Title I Grants to Local Education Agencies o CFDA Number 84.011 ·-Title I Grants- Migrant Education

h) The dolJar threshold used to distinguish between Type A and Type B programs was $750,000.

i) PostvilJe Community School District did not qualify as a low-risk auditee.

Page 62




Part II - Findings Related to the Financial Statements:

INSTANCES OF NON-COMPLIANCE:

20 I 7-001 Adult Meal Pricing

Criteria - The USDA 's Food and Nutrition Service requires adult meals must be priced high enough so they are not subsidized by the federal reimbursemen-:s and other income of the school nutrition program.

Condition - Adult lunch prices were nine cents ($.09) below the required price.

Cause - District personnel were unawar~ of the requirement.

Effect·- The cost of adult meals was subsidized by other income of the school nutrition program.

t;:_ontext - Adult lunch prices were nine :ents ($.09) below the required price.

Recommendation - The District should increase meal prices.

Response and Corrective Action Plan - Meal prices were increased .

.fonclusion Response accepted.

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Posh illc Community School District



Part II Findings Related to the Financial Statem,,nts (continued):

INTERNAL CONTROL DEFICIENCIES:

2017-002 Segregation of Duties

Criteria -- One important aspect of internal control is the segregation of duties among employees to prevent an individual employee from handling duties which are incompatible.

Condition Cash receipts are issued and bank deposits are prepared by the same person. An independent person does not open the mail and prepare an initial listing of the checks received and later compare the listing to the receipts issued. Also, vouchers are processed, disbursements are recorded and checks are prepared by the same person.

Cause -- The District has a limited numter of employees and procedures have not been designed to adequately segregate duties or provide compensating controls through additional oversight of transactions and processes.

Effect Inadequate segregation of duties could adversely affect the District's ability to prevent or detect and correct misstatements, errors or misappropriaticn on a timely basis by employees in the normal course of performing their assigned functions.

Context -- Pervasive.

Recommendation·- I realize segregatior_ of duties is difficult with a limited number of office employees. However, the District should review its procedures to obtain the maximum internal control possible under the circumstances utilizing currently available staff including eleckd officials.

Response and Corrective Action Plan -- We will continue to review our procedures and implement additional controls where possible.

Conclusion - Response accepted.

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Year Ended ,June 30, 2017

Part II Findings Related to the Financial Statements (continued):

INTERNAL CONTROL DEFICIENCIES (continued):

2017-003 Proper Supporting Documentation

Crite_ria -- Proper supporting documentation should be maintained for all expenditures of District funds.

Condition - In a sample of expenditures made by the District. I noted two instances that were either not supp011ed with appropriate documentation or completely lacked any documentation.

Cause -- The District has not implemented procedures to hold those staff accountable when receipts were missing.

Effect - Lack of proper documentation could result in unauthorized or improper transactions and the opportunity for misappropriation.

Context -- The dollar amount of the tran:;actions with insufficient or missing documentation totaled $497.69 out of a sample of$l65,708.27. or an error rate of approximately 0.3%.

Auditor's Recommendation - The Distr:ct should ensure all expenditures of District funds are supported with proper documentation. Employees who do not comply with the policy should be held accountable for payment of the unsupported charges.

Response and Corrective Action Plan - The District will communicate this matter to all staff and ensure they understand the importance of obtaining the proper receipts. Further, we will make necessary changes to ensure that all expenditures of District funds have proper documentaion to prove an appropriate public purpose.

Conclusion Response accepted.

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Post\ ille Community School District



Part 11 - Findings Related to the Financial Statements (continued):

INTERNAL CONTROL DEFICIENCIES (contin,1ed):

20 I 7-004 Financial Reporting

Criteria --- Properly designed policies and procedures and implementation of the policies and procedures are an integral part of ensuring the reliability and accuracy of the District's financial statements ..

Condition-~ In a sample of expenditures made with the District, I identified several disbursements recorded in incorrect accounts with wrong object codes, mostly in the Activity Fund.

Cause -- The District is not utilizing The Uniform Financial Accounting for Iowa LEAs and AEAs.

Effect -- The District is not preparing accurate financial statements.

Context - 17 of 88 disbursements recei\ed \Vere coded incorrectly.

Recommendation - The District should review the coding of all bills and receipts to ensure they are properly coded in accordance with The Uniform Financial Accounting for lm\'a LEAs and AEAs. The purpose of governmental fund accounting is to facilitate that the District is demonstrating compliance with the use of designated or restricted revenue by segregating the revenue and related expenditures. In addition, timely and complete recording of all bills and receipts is essential for accurate financial statem-ents. The general ledger is supposed to be an accurate history of the District's financial transactions.

Response and Corrective Action Plan - We will review the coding of bills and receipts, to ensure they are all properly recorded.

Conclusion Response acknowledged.

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Year Ended ,June 30, 2017

Part II - Findings Related to the Financial Statements (continued):

INTERNAL CONTROL DEFICIENCIES (contin"ed):

2017-005 Financial Statement Preparation

Criteria -- An effective internal control system provides for internal controls related to ensuring the financial statements and the related disclosures are fairly prec;ented in conformity \Vith U.S. generally accepted accounting principles.

Condition - The District relies upon the audit firm to draft the financial statements and disclosures.

Cause -- As is inherent in many governmental entities of this size, the District has management and employees who, while knowledgeable and skillful, do not have the time to maintain the current knowledge and expertise to fully apply generally accepted accounting principle:; in preparing the financial statements and the related disclosures.

Effect - Errors could occur in the financial statements and not be detected by management.

[Qntext - Pervasive.

Identification of Repeat Finding-· I found the same condition existed in my prior year audit.

Recommendation.__ I recommend that the business office staff look for educational opportunities to increase their knowledge of U.S. generally accepted accounting principles as they relate to the District's financial statements.

Response and Corrective Action Plan - We will look for opportunities to improve our knowledge; however, we \viii continue to rely on our auditors to assist us in drafting the financial statements and required disclosures.

Conclusion -- Response accepted.

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Part Ill - Findings For Federal Awards:

INSTANCES OF NON-COMPLIANCE:




CFDA Number 10.543 - Healthier U.S. School Challenge CFDA Number 10.553 - School Breakfast Program CFDA Number 10.555 - National School Lunch Program CFDA Number 10.559- Summer Food Service Program CFDA Number 10.561 - Basic Building and Strengthening Iowa Community Support for Nutrition and Health CFDA Number 10.582 - Fresh Fruit and Vegetables Pass through entity identifying number: N/A Federal Award Year: 2017 Prior year finding number: NIA U.S. Department of Agriculture Passed through the Iowa Department of Education

2017-006 Adult Meal Pricing - Adult lunch prices were nine cents ($0.09) below the required price. See Finding 2017-00 I

INTERNAL CONTROL DEFICIENCIES:

CFDA Number 10.543 - Healthier U.S. School Challenge CFDA Number 10.553 -School Breakfast Program CFDA Number 10.555- National School Lunch Program CFDA Number 10.559 - Summer Food Service Pngram CFDA Number 10.561 - Basic Building and Stren1:thening Iowa Community Support for Nutrition and Health CFDA Number 10.582 - Fresh Fruit and Vegetables Pass through entity identifying number: N/A Federal Award Year: 2017 Prior year finding number: N/A U.S. Department of Agriculture Passed through the Iowa Department of Educatio11

CFDA Number 84.010: Title I Grants to Local Ed11cational Agencies CFDA Number 84.01 I: Title I Grant- Migrant Education Pass through entity identifying number: 2807-40 Federal Award Year: 2017 Prior year finding number: 2016-006 U.S. Department of Education Passed through the Iowa Department of Educatiou

2017-007 Segregation of Duties-The District did not properly segregate custody, record-keeping and reconciling functions for revenues, including those related to feceral programs. See Finding 2017-002.

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Part IV - Other Findings Related to Required Statutory Reporting:

IV-A-17 Certified Budget Expenditures fo1· the year ended June 30, 2017 did not exceed the amended ce11ified budget.

IV-B-17 Questionable Expenditures ~Certain disbursements were noted I believe may not meet the requirements of public purpose as defined in an Attorney General's opinion dated April 25, 1979 since the public benefits to be derived have not been clearly documented.

General Fund: Employee

Activity Fund: UNI

Nutrition Fund:

Vendor

Guppy's on the Go

Description

Reimbursed overnight shipping

Scholarship FFA

Donuts and juice - meeting

Amount

$23.00

$200.00

$20.00

Recommendation - The District should review Chapter 298A.8 of the Code of Iowa and Iowa Administrative Code 281-12.6( I) for the allowability of expenditures. When the District purchases items such as food for teacher appreciation, these purchases would be more appropriate from the General Fund as long as public purpose is documented and the items are de minimis according to Internal Revenue Service Publication 15-B. Additionally, the Board of Directors should approve the purchase of such items prior to the expenditure and document the public purpose derived.

Response -- Beginning in fiscal 2018, the District will not make any purchases for expenditures that are not appropriate.

Conclusion -- Response acknowledged.

IV-C-17 Travel Expense - No expenditures of District money for travel expenses of spouses of District officials or employees were noted. No travel advances to District officials or employees were noted.

IV-D-17 Business Transactions Business transactions between the District and District officials or employees are detailed as follows:

Name, Title & Business Connection Transaction Description Amount Szabo Construction~ Jamie Smitt - Board Member Services ( various payments) $8,680

In accordance with an Attorney General's opinion date November 9, 1976, the above transactions may represent a conflict of interest since total transactions were more than $2,500 during the fiscal year and the transactions were not competitively bid.

Recommendation - The District should review the bidding requirements of the Code of Iowa.

Response - We will review our pro::edures.


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Part IV - Other Findings Related to Required Statutory Reporting (continued):

IV-F-17 Board Minutes - No transactions requiring Board approval, which had not been approved by the Board were noted.

Closed Session - I noted two instances where the Board did not vote to come out of closed session as required by the Iowa Code.

Recommendation - The Board should vote to exit closed session.

Response - The District board minutes will document the vote to come out of closed session in the future.


IV-G-17 Certified Enrollment - No variances in the basic enrollment data certified to the Iowa Department of Education were noted.

IV-H-I 7 Supplementary Weighting - No variances regarding the supplementary weighting certified to the Iowa Department of Education were noted.

IV-I-17 Deposits and Investments - No instances of non-compliance with the deposit and investment provisions of Chapter 128 and Chapter l2C of the Code oflowa and the District's investment policy were noted.

IV-J-17 Certified Annual Report- The Certified Annual Report was filed with the Iowa Department of Education timely.

IV-K-17 Categorical Funding - No instances were noted of categorical funding being used to supplant rather than supplement other funds.

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Part IV· Other Findings Related to Required Statutory Reporting (continued):

IV-L-17 Statewide Sales, Services and Use Tax - No instances of non-compliance with the allowable uses of the statewide sales, services and use tax revenue provided in Chapter 423F.3 of the Code of Iowa were noted.

Pursuant to Chapter 423F.5 of the Code of Iowa, the annual audit is required to include certain reporting elements related to the statewide sales, services, and use tax revenue. Districts are required to include these reporting elements in the Certified Annual Report (CAR) submitted to the Iowa Department of Education. For the year ended June 30, 2017, the District reported the following information regarding the statewide sales, services and use tax revenue in the District's CAR:

Beginning balance $ 1,046,166

Revenues/transfers in: Sales tax revenue $ 644,866 Other local revenues 2,882 647,748

$ 1,693.9 I 4

Expenditures/transfers out: School infrastructure comtruction $ 635,135 Other 1,000 Transfers to other funds:

Debt service fund 157,414 793.549

Ending balance $ 900,365

For the year ended June 30, 2017, tile District reduced the following levies as a result of the moneys received under Chapter 423E or 423F of the Code of Iowa:

Rate of Levy Reduction Property Per $1,000 Tax of Taxable Dollars Valuation Reduced

Debt service levy $ 0.892033 $ 644,866 Physical plant and equipment levy (PPEL) 0.673395 203,670

$ 848,536

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Part IY - Other Findings Related to Required Statutory Reporting (continued):

IV-M-17 Electronic Check Retention -- Chap'er 554D. I 14 of the Code of Iowa allows the District to retain cancelled checks in an electronic format and requires retention in this manner to include an image of both the front and back of each cancelled check. The District retains cancelled checks but does not obtain an image of the back of each cancelled check as required.

_Recommendation - The District sh.,uld obtain and retain an image of both the front and back of each cancelled check.

Response - We started receiving images of both the front and back of our cancelled checks in September 2017.

Conclusion -- Response accepted.

IV-N-17 Sales Tax -- I noted sales tax was ptid on two disbursements tested.

Recommendation - Supporting documentation should be reviewed carefully before disbursements are made.

Response - We will review all invoices before payment is made.


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Comment Reference Comment

2017-001 Adult Meal Pricing


2017-003 Disbursements

2017-004 Financial Reporting

2017-005 Annual Financial Statements

2017-006 Adult Meal Pricing



Corrective Action Plan


Corrective Action Plan

See corrective action plan 2017-001







Anticipated Contact Date of Completion Person

June 30, 2018 Business Manager







In accordance with Uniform Guidance Section 200.51 l(a), the Corrective Action Plan must include findings relating to the financial statements which are required to be reported in accordance with Government Auditing Standards.

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Comment Reference

2016-001

2016-002

2016-003

2016-004

2016-005

2016-006

Comment

Nutrition Fund


Summary Schedule of Prior Federal Audit Findings


Status

Corrective action taken

If not corrected, provide reason for finding's recurrence and planned corrective action or other explanation

Continuing Education

Segregation of Duties

Payroll/Time Cards

Annual Financial Statements

Nutrition Fund Continuing Education

Segregation of Duties

Not corrected


Not corrected


Not corrected

Plan to segregate duties when opportunities arise.

Limited staff will continue to rely on our auditors for assistance.

Plan to segregate duties when opportunities arise.

In accordance with Uniform Guidance Section 200.51 l(a}, the Summary Schedule of Prior Audit Findings must also include findings relating to the financial statements which are required to be reported in accordance with Government Auditing Standards.

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Documents

Postville Community School District Independent Auditor's ... · PDF fileStatement of Net Position ... My responsibility is to express an opinion on compliance for each of Postville