comprehensive annual financial report - new jersey comprehensive annual financial report is...

Comprehensive Annual

Financial Report

of the

Borough of West Wildwood Board of Education

West Wildwood, New Jersey

For the Fiscal Year Ended June 30, 2012

Page

Letter of Transmittal 1-4Organizational Chart N/ARoster of Officials 5Consultants and Advisors 6

Independent Auditor's Report 7-8

Required Supplementary Information - Part IManagement's Discussion and Analysis 9-16

Basic Financial Statements

A DISTRICT - WIDE FINANCIAL STATEMENTS

A-1 Statement of Net Assets 17

A-2 Statement of Activities 18

B FUND FINANCIAL STATEMENTS

Governmental Funds:B-1 Balance Sheet 19B-2 Statement of Revenues, Expenditures and Changes in Fund Balances 20B-3 Reconciliation of the Statement of Revenues, Expenditures and Changes

in Fund Balances of Governmental Funds to the Statement of Activities 21

Proprietary Funds:B-4 Statement of Net Assets N/AB-5 Statement of Revenues, Expenses, and Changes in Fund Net Assets N/AB-6 Statement of Cash Flows N/A

Fiduciary Funds:B-7 Statement of Fiduciary Net Assets N/AB-8 Statement of Changes in Fiduciary Net Assets N/A

Notes to Financial Statements 22-31

Required Supplementary Information - Part II

C Budgetary Comparison SchedulesC-1 Budgetary Comparison Schedule - General Fund 32-33C-1b Education Jobs Fund - Budget and Actual 34C-2 Budgetary Comparison Schedule - Special Revenue Fund N/A

TABLE OF CONTENTS

INTRODUCTORY SECTION

FINANCIAL SECTION

Page

Notes to the Required Supplementary InformationC-3 Budget - to - GAAP Reconciliation 35

Other Supplementary Information

D School Level Schedules N/A

E Special Revenue Fund:

E-1 Combining Schedule of Revenues and Expenditures - Special Revenue Fund - Budgetary Basis N/A

E-2 Demonstrably Effective Program Aid Statement of Expenditures - Budgetary Basis N/A

E-3 Early Childhood Program Aid Statement of Expenditures - Budgetary Basis N/A

E-4 Distance Network Learning Aid Statement of Expenditures - Budgetary Basis N/A

E-5 Instructional Supplemental Aid Statement of Expenditures - Budgetary Basis N/A

F Capital Projects Fund:

F-1 Summary Schedule of Project Revenues, Expenditures, and Changesin Fund Balance - Budgetary Basis N/A

G Proprietary Funds:

Enterprise Fund:B-4 Statement of Net Assets N/AB-5 Statement of Revenues, Expenses, and Changes in Fund Net Assets N/AB-6 Statement of Cash Flows N/A

H Fiduciary Funds

H-1 Combining Statement of Fiduciary Net Assets N/AH-2 Combining Statement of Changes in Fiduciary Net Assets N/AH-3 Student Activity Agency Fund Schedule of Receipts and Disbursements N/AH-4 Payroll Agency Fund Schedule of Receipts and Disbursements N/A

I Long-Term Debt

I-1 Schedule of Serial Bonds N/AI-2 Statement of Obligations Under Capital Leases N/AI-3 Debt Service Fund Budgetary Comparison Schedule N/A

TABLE OF CONTENTS (Continued)

Page

J STATISTICAL SECTION (Unaudited)

Financial Trends

J-1 Net Assets by Component 36

J-2 Changes in Net Assets 37-39

J-3 Fund Balances - Governmental Funds 40

J-4 Changes in Fund Balances - Governmental Funds 41

J-5 General Fund Other Local Revenue by Source 42

Revenue Capacity

J-6 Assessed Value and Estimated Actual Value of Taxable Property 43

J-7 Direct and Overalpping Property Tax Rates 44

J-8 Principal Property Taxpayers 45

J-9 Property Tax Levies and Collections 46

Debt Capacity

J-10 Ratios of Outstanding Debt by Type N/A

J-11 Ratios of General Bonded Debt Outstanding N/A

J-12 Direct and Overlapping Governmental Activities Debt 47

J-13 Legal Debt Margin 48

Demographic and Economic Data

J-14 Demographic and Economic Statistics 49

J-15 Principal Employers 50

Operating Information

J-16 Full-time Equivalent District Employees by Function/Program 51

J-17 Operating Statistics N/A

J-18 School Building Information N/A

J-19 Schedule of Required Maintenance Expenditures

by School Facility N/A

J-20 Insurance Schedule 52

K SINGLE AUDIT SECTION

K-1 Report on Internal Control Over Financial Reporting and on Complianceand Other Matters Based on an Audit of Financial StatementsPerformed In Accordance with Government Auditing Standards 53-54

K-2 Report on Compliance with Requirements Applicable to EachMajor Program and Internal Control Over Compliance inAccordance with OMB Circular A-133 and New Jersey OMB Circular 04-04 N/A

K-3 Schedule of Expenditures of Federal Awards, Schedule A 55K-4 Schedule of Expenditures of State Financial Assistance, Schedule B 56K-5 Notes to Schedules of Awards and Financial Assistance 57-58K-6 Schedule of Findings and Responses 59-62K-7 Summary Schedule of Prior Audit Findings 63

TABLE OF CONTENTS (Continued)

Introductory Section

West Wildwood Board of Education 701 West Glenwood Avenue West Wildwood, NJ 08260

Phone (609) 391-2119 Fax (609) 390-3689

November 16, 2012

Honorable President and Members of the Board of Education

Borough of West Wildwood School District County of Cape May, New Jersey

Dear Board Members:

The Comprehensive Annual Financial Report of the Borough of West Wildwood School District for the fiscal year ended June 30, 2012 is hereby submitted. Responsibility for both the accuracy of the data and completeness and fairness of the presentation, including all disclosures, rests with the management of the Board of Education. To the best of our knowledge and belief, the data presented in this report are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the various funds of the District. All disclosures necessary to enable the reader to gain an understanding of the District's financial activities have been included. The Comprehensive Annual Financial Report is presented in four sections: Introductory, Financial, Statistical and Single Audit. The Introductory section includes the table of contents, this transmittal letter and a roster of officials. The Financial section includes the Independent Auditor’s Report, Management’s Discussion and Analysis, the Basic Financial Statements and Notes providing an overview of the District’s financial position and operating results, and other schedules providing detailed budgetary information. The Statistical Section includes selected financial and demographic information, generally presented on a multi-year basis. The District is not required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations and the New Jersey OMB Circular 04-04, Single Audit Policy for Recipients of Federal Grants, State Grants and State Aid. REPORTING ENTITY AND ITS SERVICES The Borough of West Wildwood Board of Education is an independent reporting entity within the criteria adopted by the GASB Statement No. 14 as established by NCGA Statement No. 3. All funds of the District are included in this report. The West Wildwood Board of Education constitutes the District's reporting entity.

Page 1

REPORTING ENTITY AND ITS SERVICES (Continued) As a non-operating district, our major responsibilities are providing tuition and transportation for the District's resident students. The District completed the 2011-2012 fiscal year with an enrollment of 53.0 students, 11.67% percent below the previous year's student count. The following details the changes in the students sent from the District over the last ten years.

Fiscal Student PercentYear Enrollment Change

2011-2012 53.0 -11.67%2010-2011 60.0 7.14%2009-2010 56.0 -8.20%2008-2009 61.0 8.93%2007-2008 56.0 -8.20%2006-2007 61.0 8.93%2005-2006 56.0 3.70%2004-2005 54.0 -14.96%2003-2004 63.5 4.10%

ECONOMIC CONDITION AND OUTLOOK The Borough of West Wildwood community has an economy based on tourism. Due to a significant increase in property values among all of the beach communities in the county, and a down-turn in the economy, West Wildwood is undergoing a change in the demographics of residents, and this appears to be contributing to a decline in the school population. MAJOR INITIATIVES As a non-operating school district, the Borough of West Wildwood School District, a sending district only, adheres to all policies and procedures of our receiving school districts, with regard to student achievement and Scholastic Aptitude Tests. Our main concern is the funding for tuition and transportation of resident students to receiving districts. INTERNAL ACCOUNTING CONTROLS Management of the District is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the District are protected from loss, theft or misuse, and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP). The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. As a recipient of state financial assistance, the District also is responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. This internal control structure is also subject to periodic evaluation by the District management.

Page 2

BUDGETARY CONTROLS In addition to internal accounting controls, the District maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the voters of the municipality. Annual appropriated budgets are adopted for the general fund, and when applicable, the special revenue fund. The final budget amount as amended for the fiscal year is reflected in the financial section. An encumbrance accounting system is used to record outstanding purchase commitments on a line item basis. Open encumbrances at year-end are either canceled or are included as reappropriations of fund balance in the subsequent year. Those amounts to be reappropriated are reported as reservations of fund balance at year-end. There were no encumbrance payables at June 30, 2012.

ACCOUNTING SYSTEM AND REPORTS The District’s accounting records reflect accounting principles generally accepted in the United States of America, as promulgated by the Governmental Accounting Standards Board (GASB). The accounting system of the District is organized on the basis of funds. These funds are explained in the "Notes to the Financial Statements", Note 1. FINANCIAL INFORMATION AT FISCAL YEAR-END As demonstrated by the various statements and schedules included in the financial section of this report, the District continues to meet its responsibility for sound financial management.

DEBT ADMINISTRATION As a non-operating district, with no capital assets, the District has no general bond obligations or outstanding debt.

CASH MANAGEMENT The investment policy of the District is guided in large part by state statute as detailed in "Notes to the Financial Statements," Note 2. The District has adopted a cash management plan, which requires it to deposit public funds in public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act ("GUDPA"). GUDPA was enacted in 1970 to protect Governmental Units from a loss of funds on deposit with a failed banking institution in New Jersey. The law requires governmental units to deposit public funds only in public depositories located in New Jersey, where the funds are secured in accordance with the Act. RISK MANAGEMENT The Board carries Surety Bond coverage for the Treasurer of School Moneys and the Board Secretary, which conforms to the minimum required by the New Jersey Administrative Code.

Page 3

OTHER INFORMATION State statutes require an annual audit by independent certified public accountants or registered municipal accountants. The accounting firm of Ford, Scott & Associates, L.L.C. was selected by the Board. In addition to meeting the requirements set forth in state statutes, the audit was also designed to meet the requirements of the Single Audit Act of 1984 and the related OMB Circular A-133 and New Jersey OMB Circular 04-04. The auditor's report on the basic financial statements and combining and individual fund statements and schedules is included in the financial section of this report. The auditor's reports related specifically to the single audit are included in the single audit section of this report. ACKNOWLEDGMENTS We would like to express our appreciation to the members of the Borough of West Wildwood School Board for their concern in providing fiscal accountability to the citizens and taxpayers of the school district and thereby contributing their full support to the development and maintenance of our financial operation. The preparation of this report could not have been accomplished without the efficient and dedicated services of our financial and accounting staff. Respectfully submitted, Judson Moore School Board Secretary

Page 4

BOROUGH OF WEST WILDWOOD BOARD OF EDUCATION COUNTY OF CAPE MAY, NEW JERSEY

ROSTER OF OFFICIALS

JUNE 30, 2012

Members of the Board of Education Term Expires April Howard, President 2014 Donna Howard, Vice-President 2012 Cornelius Maxwell 2013 James Perloff 2013 Dawn Sockriter 2014 Other Officials Judson Moore, Board Secretary / Business Administrator Dorothy A. Tomlin, Treasurer of School Monies

Page 5

BOROUGH OF WEST WILDWOOD BOARD OF EDUCATION CONSULTANTS AND ADVISORS

AUDIT FIRM

Ford, Scott & Associates, L.L.C. Certified Public Accountants

1535 Haven Avenue P.O. Box 538

Ocean City, NJ 08226-0538

OFFICIAL DEPOSITORY

PNC Bank of New Jersey P.O. Box 609

Pittsburgh, PA 15230-9738

Page 6

Financial Section

INDEPENDENT AUDITOR’S REPORT

The Honorable President and Members of the Board of Education Borough of West Wildwood School District County of Cape May, New Jersey We have audited the accompanying financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Board of Education of the West Wildwood School District, in the County of Cape May, State of New Jersey, as of and for the fiscal year ended June 30, 2012, which collectively comprise the District’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the West Wildwood Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and audit requirements as prescribed by the Division of Finance, Department of Education, State of New Jersey. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the West Wildwood Board of Education, in the County of Cape May, State of New Jersey, as of June 30, 2012, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated November 16, 2012 on our consideration of the West Wildwood Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

Page 7

Accounting principles generally accepted in the United States of America require that the Management Discussion and Analysis and Budgetary Comparison Information identified in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying introductory section, combining statements and related major fund supporting statements and schedules, and statistical information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material aspects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them. Ford, Scott & Associates, L.L.C.

FORD, SCOTT & ASSOCIATES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS

Glen J. Ortman Glen J. Ortman Certified Public Accountant Licensed Public School Accountant No. 853 November 16, 2012

Page 8

REQUIRED SUPPLEMENTARY INFORMATION

PART I

WEST WILDWOOD SCHOOL DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2012

UNAUDITED

The discussion and analysis of the West Wildwood School District's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2012. The intent of this discussion and analysis is to look at the School District's financial performance as a whole; readers should also review the basic financial statements and notes to enhance their understanding of the School District's financial performance. Financial Highlights Key financial highlights for 2012 are as follows:

In total, net assets increase $22,351.78, which represents a twelve percent increase in total net assets from 2011.

General revenues accounted for $1,432,170.99 in revenue or 100 percent of all revenues.

Total assets of governmental activities increased by $38,378.97.

The School District had $1,409,819.21 in expenses. General revenues (primarily taxes) of

$1,432,170.99 were adequate to provide for these expenses.

Among governmental funds, the General Fund had $1,432,170.99 in revenues and $1,409,819.21 in expenditures. The General Fund's fund balance increased $22,351.78 over 2011.

Using this Comprehensive Annual Financial Report (CAFR) This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the West Wildwood School District as a financial whole, an entire operating entity. The statements then proceed to provide an increasingly detailed look at specific financial activities. The Statement of Net Assets and Statement of Activities provide information about the activities of the whole School district, presenting both an aggregate view of the School district's finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the School district's most significant funds with all other non-major funds presented in total in one column. In the case of West Wildwood School District, the General Fund is by far the most significant fund.

Page 9


UNAUDITED (CONTINUED)

Reporting the School District as a Whole Statement of Net Assets and the Statement of Activities While this document contains the large number of funds used by the School District to provide programs and activities, the view of the School District as a whole looks at all financial transactions and asks the question, "How did we do financially during 2012?” The Statement of Net Assets and the Statement of Activities answer this question. These statements include all assets and liabilities using the accrual basis of accounting similar to the accounting used by most private-sector businesses. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid. These two statements report the School District's net assets and changes in those assets. This change in net assets is important because it tells the reader that, for the school district as a whole, the financial position of the School district has improved or diminished. The causes of this change may be the result of many factors, some financial and some not. Non-financial factors include the School District's property tax base, current laws in New Jersey restricting revenue growth, facility condition, required educational programs and other factors. In the Statement of Net Assets and the Statement of Activities, the School District has only one kind of activity:

Governmental Activities - All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant facilities, pupil transportation and extracurricular activities.

Reporting the School District's Most Significant Funds Fund Financial Statements Fund financial reports provide detailed information about the School District's funds. The School District's governmental funds consist only of the General Fund. Governmental Funds The School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in the future years. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School district's general government operations and the basic services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements.

Page 10



Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the District-wide and fund financial statements. The Notes to the Financial Statements can be found on pages 22 to 31 of this report. The School District as a Whole Recall that the Statement of Net Assets provides the perspective of the School District as a whole. Net assets may serve over time as a useful indicator of a government's financial position. The District's financial position is the product of financial transactions such as the net results of activities. Factors such as the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets are not relevant to the District as it is a non-operating district in that all students are sent to other, operating districts. Table 1 provides a summary of the School District's net assets for 2012 and 2011.

Table 1

Net Assets

2012 2011Assets

Current and Other Assets $ 225,958.34 $ 187,579.37

Total Assets 225,958.34 187,579.37

LiabilitiesAccounts Payable 16,024.11 - Other Liabilities 19.11 16.03

Total Liabilities 16,043.22 16.03

Net AssetsRestricted - - Unrestricted 209,915.12 187,563.34

Total Net Assets $ 209,915.12 $ 187,563.34

The District's combined net assets were $209,915.12 on June 30, 2012. This was a increase of approximately 12 percent from the prior year.

Page 11



The School District as a Whole (Continued) Table 2 shows changes in net assets for fiscal year 2012 and 2011.

Table 2 Changes in Net Assets

Governmental Activities The unique nature of property taxes in New Jersey creates the legal requirements to annually seek voter approval for the School District operations. Property taxes made up 97.3 percent of revenues for governmental activities for the West Wildwood School District for fiscal year 2012. The District's total revenues were $1,432,170.99 for the year ended June 30, 2012. Federal and state aid accounted for another 2.2 percent of revenue.

2012 2011RevenuesGeneral Revenues:

Property Taxes $ 1,394,011.00 $ 1,396,090.00 Grants and Entitlements 32,631.00 28,922.00 Other 5,528.99 148.33

Total Revenues 1,432,170.99 1,425,160.33

Program ExpensesSupport Servces:

Tuition 1,364,594.00 1,522,897.00 General and School Administration, and

Business and Other Support Services 17,924.90 23,862.17 Pupil Transportation 21,582.31 20,718.99 Plant Operation and Maintenance 5,718.00 5,786.00

Total Expenses 1,409,819.21 1,573,264.16 Increase/(Decrease) in Net Assets $ 22,351.78 $ (148,103.83)

Page 12



Governmental Activities (Continued)

Sources of Revenue for 2012

Federal/State Aid2.3%

Property Taxes97.3%

Other0.4%

The total cost of all programs and services was $1,409,819.21. Tuition comprises 96 percent of District expenses.

Expenses for 2012

Tuition96.79%

Administration0.67%

Transportation1.53% Business and Other

Support Services0.60%

Plant Operation and Maintenance

0.4%

Page 13



Governmental Activities The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows the total cost of services and the net cost of services. The net cost shows the financial burden that was placed on the District's taxpayers by each of these functions.

Table 3

Total Cost of Net Cost of Total Cost of Net Cost ofServices 2012 Services 2012 Services 2011 Services 2011

Support Services:Tuition $ 1,364,594.00 $ 1,364,594.00 $ 1,522,897.00 $ 1,522,897.00 General Administration, Business, and Support Services 17,924.90 17,924.90 23,862.17 23,862.17 Plant Operation & Maintenance 5,718.00 5,718.00 5,786.00 5,786.00 Pupil Transportation 21,582.31 21,582.31 20,718.99 20,718.99

Total Expenses $ 1,409,819.21 $ 1,409,819.21 $ 1,573,264.16 $ 1,573,264.16

Tuition is predominately made up of charges to send students to North Wildwood School District for grades K-8 and Wildwood School District for grades 9-12. General administration and business include expenses associated with administrative and financial supervision of the District. Pupil transportation includes activities involved with the conveyance of students to and from school, as well as to and from school activities, as provided by State law. The School District's Funds All governmental funds (i.e., general fund, special revenue fund, capital projects, and debt service fund presented in the fund-based statements) are accounted for using the modified accrual basis of accounting. Total revenues amounted to $1,432,170.99 and expenditures were $1,409,819.21. The net change in fund balance for the year for the General Fund was a increase of $22,351.78. As demonstrated by the various statements and schedules included in the financial section of this report, the District continues to meet its responsibility for sound financial management. The following schedules present a summary of the revenues of the governmental funds for the fiscal year ended June 30, 2012, and the amount and percentage of increases and decreases in relation to prior year revenues.

Page 14



The School District's Funds (Continued)

Increase Percent ofPercent of (Decrease) Increase

Revenue Amount Total from 2011 (Decrease)

Local Sources $ 1,399,539.99 97.72% $ 3,301.66 0.24%State Sources 32,555.00 2.27% 26,353.00 424.91%Federal Sources 76.00 0.01% (22,644.00) 100.00%

Total $ 1,432,170.99 100.00% $ 7,010.66 0.49%

Local revenues increased by $3,301.66. The increase in local revenue was due to an increase in the local tax levy and various miscellaneous revenue. The following schedule represents a summary of general fund, special revenue fund and debt service fund expenditures for the fiscal year ended June 30, 2012, and the percentage of increases and decreases in relation to prior year amounts.

Increase Percent ofPercent of (Decrease) Increase

Expenditures Amount Total from 2011 (Decrease)

Current expense:Undistributed expenditures $ 1,409,819.21 100.00% $ (163,444.95) -10.39%

Total $ 1,409,819.21 100.00% $ (163,444.95) -10.39%

Changes in expenditures were the results of varying factors. Current expense decreased due to decrease in enrollment. General Fund Budgeting Highlights The School District's budget is prepared according to New Jersey law, and is based on accounting for certain transactions on a basis of cash receipts, disbursements, and encumbrances. The most significant budgeted fund is the General Fund. There are no modifications noted from the original adopted budget. Capital Assets At June 30, 2012, the School District did not have any capital assets.

Page 15



Debt Administration At June 30, 2012, the School District had no outstanding debt. At June 30, 2012, the School District's overall legal debt margin was $8,182,166.00. For more detailed information, please refer to the Notes to the Financial Statements. For the Future The West Wildwood School District is in good financial condition presently In conclusion, the West Wildwood School District has committed itself to financial excellence for many years. In addition, the School District's system for financial planning, budgeting, and internal financial controls are well regarded. The School District plans to continue its sound fiscal management to meet the challenges of the future. Contacting the School District's Management This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional information, contact Judson Moore, School Board Secretary at Borough of West Wildwood, 701 West Glenwood Avenue, P.O. Box 644, West Wildwood, NJ 08260.

Page 16

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS The statement of net assets and the statement of activities display information about the District. These statements include the financial activities of the overall District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business - type activities of the District.

A-1

Governmental Business-TypeActivities Activities Total

ASSETSCash and Cash Equivalents 225,882.34$ -$ 225,882.34$ Intergovt. Accounts Receivable

Federal 76.00

Total Assets 225,958.34 - 225,882.34

LIABILITIESAccounts Payable 16,024.11 Payroll Withholdings Payable 19.11 19.11

Total Liabilities 16,043.22 - 19.11

NET ASSETSUnrestricted 209,915.12 209,915.12

Total Net Assets 209,915.12$ -$ 209,915.12$

Statement of Net AssetsBOROUGH OF WEST WILDWOOD SCHOOL DISTRICT

For the Year Ended June 30, 2012

The accompanying Notes to Financial Statements are an integral part of this statement

Page 17

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Page 18

FUND FINANCIAL STATEMENTS

The individual Fund statements and schedules present more detailed information for the individual fund in a format the segregates information by fund type.

B-1

Special TotalGeneral Revenue Governmental

Fund Fund FundsASSETS

Cash and Cash Equivalents 225,882.34$ -$ 225,882.34$ Intergovt. Accounts Receivable -

Federal 76.00 76.00

Total Assets 225,958.34$ -$ 225,958.34$

LIABILITIES AND FUND BALANCESLiabilities:

Accounts Payable 16,024.11$ 16,024.11$ Payroll Withholdings Payable 19.11 - 19.11

Total Liabilities 16,043.22 - 16,043.22

Fund Balances:Unassigned: -

General Fund 209,915.12 209,915.12 Total Fund Balances 209,915.12 - 209,915.12

Total Liabilities and Fund Balances 225,958.34$ -$

Amounts reported for governmental activities in the statement ofnet assets (A-1) are different because:

No adjustments needed

209,915.12$


Balance SheetBOROUGH OF WEST WILDWOOD SCHOOL DISTRICT

Governmental Funds


Page 19

B-2

Special TotalGeneral Revenue Governmental

Fund Fund FundsREVENUES

Local Sources:Local Tax Levy 1,394,011.00$ -$ 1,394,011.00$ Miscellaneous 5,528.99 5,528.99

Total Local Sources 1,399,539.99 - 1,399,539.99 Federal Sources 76.00 - 76.00 State Sources 32,555.00 32,555.00

Total Revenues 1,432,170.99 - 1,432,170.99

EXPENDITURESCurrent:

Support Services:Tuition 1,364,594.00 - 1,364,594.00 Other Administrative Services 8,672.71 8,672.71 Plant Operation and Maintenance 5,718.00 5,718.00 Pupil Transportation 21,582.31 21,582.31 Business and Other Support Serv. 8,500.00 8,500.00 Employee Benefits 752.19 752.19

Total Expenditures 1,409,819.21 - 1,409,819.21

Excess (Deficiency) of RevenuesOver Expenditures 22,351.78 - 22,351.78

OTHER FINANCING SOURCES (USES)None -

Total Other Financing Sources and Uses - - -

Net Changes in Fund Balance 22,351.78 - 22,351.78

Fund Balance - July 1 187,563.34 - 187,563.34

Fund Balance - June 30 209,915.12$ -$ 209,915.12$


Statement of Revenues, Expenditures, and Changes in Fund BalanceBOROUGH OF WEST WILDWOOD SCHOOL DISTRICT

Governmental Funds


Page 20

B-3

Total Net Change in Fund Balance - Governmental Funds (from B-2) 22,351.78$

Amounts reported for governmental activities in the statement ofactivities (A-2) are different because:

No adjustments required

Change in Net Assets of Governmental Activities 22,351.78$

BOROUGH OF WEST WILDWOOD SCHOOL DISTRICT

of Governmental Funds to the Statement of ActivitiesReconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance



Page 21

BOROUGH OF WEST WILDWOOD SCHOOL DISTRICT NOTES TO BASIC FINANCIAL STATEMENTS

FOR THE YEAR ENDED JUNE 30, 2012

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Board of Education (Board) of the Borough of West Wildwood School District (District) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the Board’s accounting policies are described below. A. Reporting Entity The District is an instrumentality of the State of New Jersey, established to function as an educational institution. The Board consists of elected officials and is responsible for the fiscal control of the District. A superintendent is appointed by the Board and is responsible for the administrative control of the District. The primary criterion for including activities within the District’s reporting entity, as set forth in Section 2100 of the GASB Codification of Governmental Accounting and Financial Reporting Standards, is whether:

• the organization is legally separate (can sue or be sued in their own name); • the District holds the corporate powers of the organization; • the District appoints a voting majority of the organization’s board; • the District is able to impose its will on the organization; • the organization has the potential to impose a financial benefit/burden on the District; • there is a fiscal dependency by the organization on the District;

Based on the aforementioned criteria, the District has no component units. Furthermore, the District is not includable in any other reporting entity on the basis of such criteria. B. Basis of Presentation, Measurement Focus and Basis of Accounting Basis of Presentation The School District’s basic financial statements consist of District-wide statements (i.e. statement of net assets and a statement of activities) and fund financial statements, which provide a more detailed level of financial information. District-Wide Financial Statements: The statement of net assets and the statement of activities display information about the district as a whole. These statements report the financial activities of the overall District, except for fiduciary activities. Individual funds are not displayed but the statements distinguish governmental activities, generally supported by property taxes, intergovernmental revenues, and other non-exchange transactions from business-type activities, generally financed in whole or in part with fees charged to external parties.

Page 22


FOR THE YEAR ENDED JUNE 30, 2012 (CONTINUED)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Basis of Presentation, Measurement Focus and Basis of Accounting - Continued Basis of Presentation - Continued The statement of net assets presents the financial condition of the governmental and business-type activity of the School District at fiscal year end. The statement of activities presents a comparison between direct expenses and program revenues for the business-type activity of the District and for each function of the District’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges and fees paid by the recipients of goods or services offered by the programs; and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including taxes, are presented as general revenues. The comparison of direct expenses with program revenues identifies the extent to which each governmental function or business segment is self-financing, or draws from the general revenues of the School District. Fund Financial Statements: During the fiscal year, the School District segregates transactions related to certain School District functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. The fund financial statements provide information about the District’s funds, including its fiduciary funds. Separate statements for each fund category – governmental, proprietary, and fiduciary - are presented. The New Jersey Department of Education (“Department”) has elected to require New Jersey districts to treat each governmental fund as a major fund in accordance with the option noted in GASB No. 34, paragraph 76. The Department believes that the presentation of all funds as major is important for public interest and to promote consistency among district financial reporting models. Governmental Funds The District reports the following governmental funds:

General Fund - The General Fund is the general operating fund of the District and is used to account for all expendable financial resources except those required to be accounted for in another fund. Included are certain expenditures for non-instructional equipment, which are classified in the capital outlay sub-fund. As required by the New Jersey State Department of Education, the District includes budgeted capital outlay in this fund. Generally accepted accounting principles, as they pertain to governmental entities, state that general fund resources may be used to directly finance capital outlays for long-lived improvements as long as the resources in such cases are derived exclusively from unrestricted revenues. Resources for budgeted capital outlay purposes are normally derived from State of New Jersey Aid, district taxes and appropriated fund balance. Expenditures are those that result in the acquisition of or additions to fixed assets for land, existing buildings, improvements of grounds, construction of buildings, additions to or remodeling of buildings and the purchase of built-in equipment. These resources can be transferred from and to Current Expense by board resolution.

Page 23



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued B. Basis of Presentation, Measurement Focus and Basis of Accounting - Continued Measurement Focus and Basis of Accounting Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. The District-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund and the fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year in which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Net assets (total assets less total liabilities) are used as a practical measure of economic resources and the operating statement includes all transactions and events that increased or decreased net assets. Depreciation is charged as expense against current operations and accumulated depreciation is reported on the statement of net assets. The 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 District considers revenues to be available is they are collected within 60 days of the end of the fiscal year. Revenue from federal, state and other grants designated for payment of specific school district expenditures is recognized when the related expenditures are incurred; accordingly, when such funds are received, they are recorded as deferred revenues until earned. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due.

C. Budgets/Budgetary Control Annual appropriated budgets are prepared in the spring of each year for the general, special revenue, and debt service funds. The budgets are submitted to the county office for approval and are voted upon at the annual school election on the third Tuesday in April. Budgets are prepared using the modified accrual basis of accounting, except for special revenue funds. The legal level of budgetary control is established at line item accounts within each fund. Line item accounts are defined as the lowest (most specific) level of detail as established pursuant to the minimum chart of accounts referenced in N.J.A.C. 6A:23-2.2(g). All budget amendments/transfer must be approved by School Board resolution. All budget amounts presented in the accompanying supplementary information reflect the original budget and the amended budget (which have been adjusted for legally authorized revisions of the annual budgets during the year. Appropriations, except remaining project appropriations, encumbrances and unexpended grant appropriations, lapse at the end of each fiscal year. The capital projects fund presents the remaining project appropriations compared to current year expenditures.

Page 24



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued C. Budgets/Budgetary Control - Continued Formal budgetary integration into the accounting system is employed as a management control device during the year. For governmental funds, there are no substantial differences between the budgetary basis of accounting and generally accepted accounting principles with the exception of the legally mandated revenue recognition of the last state aid payment for budgetary purposes only and the special revenue fund as noted below. Encumbrance accounting is also employed as an extension of formal budgetary integration in the governmental fund types. Unencumbered appropriations lapse at fiscal year end. The accounting records of the special revenue fund are maintained on the grant accounting budgetary basis. The grant accounting budgetary basis differs from GAAP in that the grant accounting budgetary basis recognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basis does not. Sufficient supplemental records are maintained to allow for the presentation of GAAP basis financial reports. D. Encumbrance Accounting Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve a portion of the applicable appropriation. Open encumbrances in governmental funds other than the special revenue fund are reported as reservations of fund balances at fiscal year end as they do not constitute expenditures or liabilities but rather commitments related to unperformed contracts for goods and services. Open encumbrances in the special revenue fund for which the District has received advances are reflected in the balance sheet as deferred revenues at fiscal year end. The encumbered appropriation authority carries over into the next fiscal year. An entry will be made at the beginning of the next fiscal year to increase the appropriation reflected in the certified budget by the outstanding encumbrance amount as of the current fiscal year end. E. Assets, Liabilities and Equity Cash, Cash Equivalents and Investments Cash and cash equivalents include petty cash, change funds, bank deposits and all highly liquid investments with a maturity of three months or less at the time of purchase and are stated at cost plus accrued interest. U.S. Treasury and agency obligations and certificates of deposit with maturities of one year or less when purchased are stated at cost. All other investments are stated at fair value. New Jersey school districts are limited as to the types of investments and types of financial institutions they may invest in. New Jersey statute 18A:20-37 provides a list of permissible investments that may be purchased by New Jersey school districts. Additionally, the District has adopted a cash management plan that requires it to deposit public funds in public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act ("GUDPA"). GUDPA was enacted in 1970 to protect governmental units from a loss of funds on deposit with a failed banking institution in New Jersey.

Page 25



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued E. Assets, Liabilities and Equity - Continued Cash, Cash Equivalents and Investments - Continued N.J.S.A. 17:9-41 et. seq. establishes the requirements for the security of deposits of governmental units. The statute requires that no governmental unit shall deposit public funds in a public depository unless such funds are secured in accordance with the Act. Public depositories include savings and loan institutions, banks (both state and national banks) and savings banks the deposits of which are federally insured. All public depositories must pledge collateral, having a market value at least equal to five percent of the average daily balance of collected public funds, to secure the deposits of Governmental Units. If a public depository fails, the collateral it has pledged, plus the collateral of all other public depositories, is available to pay the full amount of their deposits to the governmental units. Interfund Transactions Transfers between governmental and business-type activities on the District-wide statements are reported in the same manner as general revenues. Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds and after non-operating revenues/expenses in the Enterprise Fund. Repayments from funds responsible for particular expenditure/expenses to the funds that initially paid for them are not presented on the financial statements. Inventories Inventories, other than those recorded in the enterprise fund, are recorded as expenditures during the year of purchase. Inventories in the Enterprise Fund are recorded at cost, computed on a first-in, first out method. In the fund based financial statements, commodities received from the U.S. Department of Agriculture are recorded as deferred revenue until consumed. Capital Assets The District has established a formal system of accounting for its capital assets. Purchased or constructed capital assets are reported at cost. Donated assets are recorded as capital assets at their estimated fair market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. The capitalization threshold used by school districts in the State of New Jersey is $2,000. All reported capital assets except for land and construction in progress are depreciated. Depreciation is computed using the straight-line method over their estimated useful lives. Useful lives vary from 20 to 50 years for land improvements and buildings, and 5 to 15 years for equipment. The District does not possess any material amounts of infrastructure capital assets, such as sidewalks and parking lots. Such items are considered to be part of the cost of buildings or other improvable property.

Page 26



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued E. Assets, Liabilities and Equity - Continued Compensated Absences This District has no policy for compensated absences. Deferred Revenue Deferred revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and entitlements received in the Special Revenue Fund before they have been earned are recorded as deferred revenue. Accrued Liabilities and Long-Term Obligations All payables, accrued liabilities, and long-term obligations are reported on the District-wide financial statements. In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timely manner and in full from current financial resources are reported as obligations of the funds. However, contractually required pension contributions and compensated absences that are paid from governmental funds are reported as liabilities on the fund financial statements only to the extent that they are due for payment during the current year. Bonds are recognized as a liability on the fund financial statements when due. This District has no Long-Term Obligations. Net Assets Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt, consists of capital assets, net of accumulated depreciation, reduced by the outstanding balance of any borrowing used for the acquisition, construction, or improvement of those assets. Net assets are reported as restricted when there are limitations imposed on their use, either through the enabling legislation adopted by the School District, or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. The School District’s policy is to first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. Fund Balance Reserves The District uses restricted/committed amounts to be spent first when both restricted an unrestricted fund balance is available unless there are legal documents/contracts that prohibit doing this, such as a grant agreement requiring dollar for dollar spending. Additionally, the District does not have a formal fund balance spending policy therefore the default spending order requires committed, assigned and then unassigned to be used be spent first when expenditures are made. In accordance with Governmental Accounting Standards Board Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, the District classified governmental fund balances as follows;

• Non-Spendable – Includes fund balance amounts that cannot be spent either because it is not in spendable form or because of legal or contractual restraints.

• Restricted – Includes fund balance amounts that are constrained for specific purposes which are

externally imposed by providers such as creditors or amounts constrained due to constitutional provisions or enabling legislation.

Page 27



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued E. Assets, Liabilities and Equity - Continued Fund Balance Reserves - Continued

• Committed – Includes fund balance amounts that are constrained for specific purposes that are

internally imposed by the government through formal action of the highest level of decision making authority and does not lapse at year end.

• Assigned - Includes fund balance amounts that are intended to be used for specific purposes that

are neither considered restricted or committed. Fund Balance may be assigned by, the Board of Education, Superintendent or Business Administrator.

• Unassigned - Includes positive fund balance within the General Fund which has not been

classified within the above mentioned categories and negative fund balances in other governmental funds.

Revenues – Exchange and Nonexchange Transactions Revenues resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On the modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. Available means the resources will be collected within the current fiscal year, or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District, available means within sixty days of the fiscal year end. Nonexchange transactions, in which the School District receives value without directly giving equal value in return, include property taxes, grants, entitlements and donations. On the accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from income taxes is recognized in the period in which the income is earned. Revenue from grants, entitlement, and donations is recognized in the period in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted; matching requirements, in which the School District must provide local resources to be used for a specific purpose; and expenditure requirements, in which the resources are provided to the School District on a reimbursement basis. On the modified accrual basis, revenue from nonexchange transactions must also be available before it can be recognized. Under the modified accrual basis, the following revenue sources are considered to be both measurable and available at fiscal year end: property taxes as an advance, interest and tuition. Operating Revenues and Expenses Operating revenues are those revenues that are generated directly from the primary activity of the enterprise fund. For the School District, these revenues are sales for food service. Operating expenses are necessary costs incurred to provide the service that is the primary activity of the enterprise fund.

Page 28



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued E. Assets, Liabilities and Equity - Continued Allocation of Indirect Expenses The District reports all direct expenses by function in the Statement of Activities. Direct expenses are those that are clearly identifiable with a function. Employee benefits, including the employer’s share of social security, workers compensation, and medical and dental benefits, were allocated based on salaries of that program. Depreciation expense, where practicable, is specifically identified by function and is included in the direct expense column of the Statement of Activities. Depreciation expense that could not be attributed to a specific function is considered an indirect expense and is reported separately on the Statement of Activities. Interest on long-term debt is considered an indirect expense and is reported separately on the Statement of Activities. Extraordinary and Special Items Extraordinary items are transactions or events that are unusual in nature and infrequent in occurrence. Special items are transactions or events that are within control of management and are either unusual in nature or infrequent in occurrence. Neither of these types of transactions occurred during the fiscal year. Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. F. Recent Accounting Pronouncements In November 2010, the Governmental Accounting Standards Board (GASB) issued Statement No. 60, “Accounting and Financial Reporting for Service Concession Arrangements” to improve financial reporting related to service concession arrangements (SCAs) which are a type of public-private or public-public partnership. This statement will become effective for fiscal periods beginning after December 15, 2011. This statement is not anticipated to have any effect on the District’s financial reporting. In November 2010, the Governmental Accounting Standards Board (GASB) issued Statement No. 61 “The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34”. The purpose of the statement is to amend the criteria for reporting and including component units with the primary government. This statement, which is effective for fiscal periods beginning after June 15, 2012, is not anticipated to have any effect on the District’s financial reporting. In December 2010, the Governmental Accounting Standards Board (GASB) issued Statement No. 62 “Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements”. The statement, which is effective for periods beginning after December 15, 2011, amends and supersedes several previously issued GASB statements to incorporate guidance that had been included in AICPA and FASB guidance. The statement will have a minimum, but undetermined impact on the proprietary fund financial statements of the District.

Page 29



NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued F. Recent Accounting Pronouncements - Continued In June 2011, the Governmental Accounting Standards Board (GASB) issued Statement No. 63 “Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and net Position”. The statement, which is effective for periods beginning after December 15, 2011, amends several previously issued GASB statements to standardize reporting of deferred inflows and outflows of financial resources. This statement is not anticipated to have any effect on the District’s financial reporting. In June 2011, the Governmental Accounting Standards Board (GASB) issued Statement No. 64 “Derivative Instruments: Application of Hedge Accounting Termination Provisions – an amendment of GASB Statement No. 53”. This statement, which is effective for fiscal periods beginning after June 15, 2011, is not anticipated to have any effect on the District’s financial reporting. NOTE 2 – CASH AND CASH EQUIVALENTS AND INVESTMENTS Custodial Credit Risk Related to Deposits - Custodial credit risk is the risk that, in the event of a bank failure, the School District’s deposits might not be recovered. Although the School District does not have a formal policy regarding custodial credit risk, N.J.S.A. 17:9-41 et seq. requires that governmental units shall deposit public funds in public depositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act. Of the School District’s bank Balance of $225,882.34 as of June 30, 2012, the entire balance was insured and collateralized. NOTE 3 – RECEIVABLES Receivables at June 30, 2012, consisted of intergovernmental (State Aid). All receivables are considered collectible in full. A summary of the principal items of intergovernmental receivables follows:

Governmental GovernmentFund Wide

Financial FinancialStatements Statements

Federal Aid $ 76.00 $ 76.00 Gross Receivables 76.00 76.00 Less: Allowance for Uncollectibles Total Receivables, Net $ 76.00 $ 76.00

NOTE 4 – INTERFUND TRANSFERS AND BALANCES Transfers between funds are used to repay expenses paid by another fund. There were no interfund balances for the year ended June 30, 2012.

Page 30



NOTE 5 – CAPITAL ASSETS The District has no capital assets. NOTE 6 – RISK MANAGEMENT The District’s exposure to risks of loss is limited due to the fact that it is a non-operating district, with no buildings or grounds. Property and Liability Insurance - The District maintains insurance coverage for general, liability and surety bonds. NOTE 7 – FUND BALANCE APPROPRIATED Restrictions of funds balances of governmental funds are established to either (1) satisfy legal covenants that require a portion of the fund balance to be segregated or (2) identify the portion of the fund balance that is not appropriate for future expenditures. The District follows the State of New Jersey’s minimum fund balance policy for New Jersey Regular Public School Districts (N.J.S.A. 18A:7F-7). Pursuant to that policy, an undesignated fund balance of 2% of the general fund budget or $250,000, whichever is greater may be maintained. Specific classifications of fund balance are summarized below; Non-Spendable Fund Balance – The District had no non-spendable fund balance at June 30, 2012. Restricted Fund Balance-The District has no restricted fund balance at June 30, 2012. Assigned Fund Balance – The District did not assign any fund balance in the 2012-2013 budget. Unassigned Fund Balance – At June 30, 2012, the District has $209,915.12 of unassigned fund balance in the general fund. NOTE 8 – CALCULATION OF EXCESS SURPLUS In accordance with N.J.S.A. 18A:7F-7, the designation for Reserved Fund Balance - Excess Surplus is a required calculation pursuant to the New Jersey Comprehensive Educational Improvement and Financing Act of 1996 (CEIFA). New Jersey school districts are required to reserve General Fund fund balance at the fiscal year end of June 30 if they did not appropriate a required minimum amount of budgeted fund balance in their subsequent years' budget. The excess fund balance at June 30, 2012 is $0. NOTE 9- SUBSEQUENT EVENTS The District has evaluated subsequent events for potential recognition and/or disclosure through November 16, 2012, the date the financial statements were available to be issued.

Page 31

REQUIRED SUPPLEMENTARY INFORMATION PART II

Budgetary Comparison Schedules

C-1

Variance withUnder/(Over)

Original Budget Final BudgetBudget Transfers Final Budget Actual to Actual

REVENUES:Local Sources:

Local Tax Levy 1,394,011.00$ -$ 1,394,011.00$ 1,394,011.00$ -$ Miscellaneous 225.00 225.00 5,528.99 5,303.99

Total Local Sources 1,394,236.00 - 1,394,236.00 1,399,539.99 5,303.99

State Sources:Categorical Special Education Aid 19,047.00 19,047.00 32,555.00 13,508.00 Categorical Adjustment Aid - - -

Total State Sources 19,047.00 - 19,047.00 32,555.00 13,508.00

Federal SourcesEducation Jobs Fund Program - 76.00 76.00 76.00 -

Total Federal Sources - 76.00 76.00 76.00 -

Total Revenues 1,413,283.00 76.00 1,413,359.00 1,432,170.99 18,811.99

EXPENDITURES:CURRENT EXPENSE

UNDISTRIBUTED EXPENDITURESUndistributed Expenditures - Instruction

Tuition to Other LEAs Within the State-Reg 1,187,838.00 53,000.00 1,240,838.00 1,240,387.00 451.00 Tuition to Other LEAs Within the State-Spec 62,000.00 - 62,000.00 27,525.00 34,475.00 Tuition to County Voc. School Dist.-Reg. 32,165.00 32,165.00 32,011.00 154.00 Tuition to CSSD & Regional Day Schools 126,111.00 (53,000.00) 73,111.00 64,671.00 8,440.00

Total Undistributed Expenditures - Instruction 1,408,114.00 - 1,408,114.00 1,364,594.00 43,520.00 -

Undist. Expend. - Supp. Serv. - General Admin.Salaries 530.00 250.00 780.00 765.00 15.00 Legal Services 5,000.00 (2,750.00) 2,250.00 866.85 1,383.15 Audit Fees 3,900.00 3,900.00 3,800.00 100.00 Communications/Telephone 902.00 (405.78) 496.22 218.52 277.70 Miscellaneous Purchased Services 250.00 1,000.00 1,250.00 856.69 393.31 General Supplies 450.00 5.28 455.28 455.28 - Miscellaneous Expenditures 650.00 650.00 541.72 108.28 BOE Member Dues/ Fees 1,250.00 1,250.00 1,168.65 81.35

Total Undistributed Expenditures - Support Services - General Administration 12,932.00 (1,900.50) 11,031.50 8,672.71 2,358.79

Undist. Expend. - Supp. Serv. - Attendance & Social WorkPurchased Professional and Technical Services 2,500.00 - 2,500.00 - 2,500.00

Total Undistributed Expenditures - Support Total Undistributed Expenditures - Attendence & Social Work 2,500.00 - 2,500.00 - 2,500.00

Undist. Expend. - Other Oper. & Maint.of PlantInsurance 6,000.00 400.50 6,400.50 5,718.00 682.50

Total Undistributed Expenditures - OtherOperations and Maintenance of Plant 6,000.00 400.50 6,400.50 5,718.00 682.50

Undist. Expend. - Student Transportation Serv.Contr. Serv.Trans. (Reg Students) - ESC's & CTSAs 30,000.00 30,000.00 21,582.31 8,417.69

Total Undistributed Expenditures - StudentTransportation Services 30,000.00 - 30,000.00 21,582.31 8,417.69


General FundBOROUGH OF WEST WILDWOOD SCHOOL DISTRICT

Budgetary Comparison Schedule

Page 32

C-1

Variance withUnder/(Over)

Original Budget Final BudgetBudget Transfers Final Budget Actual to Actual


General FundBOROUGH OF WEST WILDWOOD SCHOOL DISTRICT

Budgetary Comparison Schedule

Undist. Expend. - Other Support ServicesSalaries 8,500.00$ -$ 8,500.00$ 8,500.00$ -$

Total Undistributed Expenditures Other Support Services 8,500.00 - 8,500.00 8,500.00 -

Unallocated Benefits Social Security Contribution 670.00 1,200.00 1,870.00 709.35 1,160.65 Unemployment Compensation 70.00 300.00 370.00 42.84 327.16

Total Unallocated Benefits 740.00 1,500.00 2,240.00 752.19 1,487.81

Total Personal Services - Employee Benefits 740.00 1,500.00 2,240.00 752.19 1,487.81

TOTAL UNDISTRIBUTED EXPENDITURES 1,468,786.00 0.00 1,468,786.00 1,409,819.21 58,966.79

TOTAL GENERAL CURRENT EXPENSE 1,468,786.00 0.00 1,468,786.00 1,409,819.21 58,966.79

Transfer of Funds to Charter Schools - - -

TOTAL EXPENDITURES 1,468,786.00 0.00 1,468,786.00 1,409,819.21 58,966.79

EXCESS (DEFICIENCY) OF REVENUES OVER(UNDER) EXPENDITURES (55,503.00) 76.00 (55,427.00) 22,351.78 77,778.78

Fund Balance July 1 187,563.34$ - 187,563.34$ 187,563.34$

Fund Balance June 30 132,060.34$ 76.00$ 132,136.34$ 209,915.12$ 77,778.78$

Recapitulation:Unassigned Fund Balance 209,915.12

209,915.12 Reconciliation to Governmental Funds Statements (GAAP):Last State Aid Payment not Recognized on GAAP basis - Fund Balance per Governmental Funds (GAAP) 209,915.12$

Page 33

C-1

b1

Req

uir

ed S

up

ple

men

tary

Info

rmat

ion

Bud

get

Orig

inal

Mod

ifica

tions

/F

inal

Var

ianc

eB

udge

tT

rans

fers

Bud

get

Act

ual

Fin

al to

Act

ual

RE

VE

NU

ES

:F

eder

al S

ourc

es-

$

76

.00

$

76

.00

$

76.0

0$

-

$

Tot

al R

even

ues

-

76.0

0

76.0

0

76

.00

-

EX

PE

ND

ITU

RE

S:

Und

istr

ibut

ed E

xpen

ditu

res:

Und

istr

ibut

ed E

xpen

ditu

res

- In

stru

ctio

nT

uitio

n to

Oth

er L

EA

s W

ithin

the

Sta

te-R

eg76

.00

76

.00

76.0

0

-

Tot

al R

egul

ar P

rogr

ams

- In

stru

ctio

n-

76

.00

76

.00

76.0

0

-

Oth

er F

inan

cing

Sou

rces

(U

ses)

Non

e-

-

T

otal

Out

flow

s-

76

.00

76

.00

76.0

0

-

Exc

ess

(Def

icie

ncy)

of R

even

ues

Ove

r (U

nder

)E

xpen

ditu

res

and

Oth

er F

inan

cing

Sou

rces

(U

ses)

-$

-$

-

$

-

$

-

$

Ed

uca

tio

n J

ob

s F

un

d P

rog

ram

- B

ud

get

an

d A

ctu

alF

or

the

Fis

cal Y

ear

En

ded

Ju

ne

30, 2

012

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Gen

eral

Fu

nd

Page 34

NOTES TO THE

REQUIRED SUPPLEMENTARY INFORMATION

C-3

Note A - Explanation of Differences Between Budgetary Inflows andOutflows GAAP Revenue and Expenditures

SpecialGeneral Revenue

Fund FundSources / inflows of resources

Actual amounts (budgetary basis) "revenue"from the budgetary comparison schedule [C-1] 1,432,170.99$ [C-2] -$

Difference - budget to GAAP:

Final State Aid Payment that was delayed until July 2011

Final Two State Aid payments for the Year Ended June 30, 2012 that was delayed until July 2012 was recorded as budgetary revenue for the Year Ended

June 30, 2012 but is not recognized under GAAP until the Year EndedJune 30, 20123.

Total revenues as reported on the statement of revenues, expenditures

and changes in fund balance - governmental funds. [B-2] 1,432,170.99$ [B-2] -$

Uses / outflows of resourcesActual amounts (budgetary basis) "total outflows" from the

budgetary comparison schedule [C-1] 1,409,819.21$ [C-2] -$

Difference - budget to GAAP:None

Total expenditures as reported on the statement of revenues, expenditures and changes in fund balance - governmental funds. [B-2] 1,409,819.21$ [B-2] -$

Required Supplementary InformationBOROUGH OF WEST WILDWOOD SCHOOL DISTRICT


Budget-to-GAAP ReconciliationNote to RSI

Page 35

Statistical Section

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-1

Net

Ass

ets

by

Co

mp

on

ent,

Las

t E

igh

t F

isca

l Yea

rs(a

ccru

al b

asis

of a

ccou

ntin

g)

2005

2006

2007

2008

2009

2010

2011

2012

Gov

ernm

enta

l act

iviti

esIn

vest

ed in

cap

ital a

sset

s, n

et o

f rel

ated

deb

t-

$

-$

-

$

-$

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-

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Bus

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Inve

sted

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-$

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-$

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Inve

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in c

apita

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209,

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Sou

rce:

CA

FR

Sch

edul

e A

-1

Page 36

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-2

Ch

ang

es in

Net

Ass

ets,

Las

t E

igh

t F

isca

l Yea

rs(a

ccru

al b

asis

of a

ccou

ntin

g)

2005

2006

2007

2008

2009

2010

2011

2012

Exp

ense

sG

over

nmen

tal a

ctiv

ities

:In

stru

ctio

n:R

egul

arS

peci

al e

duca

tion

Oth

er s

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duca

tion

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atio

nal

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er in

stru

ctio

nN

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sch

ool p

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ams

Adu

lt/co

ntin

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n pr

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port

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00$

1,

158,

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00$

94

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$

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$

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$

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00$

1,36

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$

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ices

478.

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21

Page 37

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-2

Ch

ang

es in

Net

Ass

ets,

Las

t E

igh

t F

isca

l Yea

rs(a

ccru

al b

asis

of a

ccou

ntin

g)

2005

2006

2007

2008

2009

2010

2011

2012

Bus

ines

s-ty

pe a

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ities

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ice

-$

-

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ense

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otal

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t exp

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s96

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$

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$

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m R

even

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Gov

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Cha

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for

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Page 38

BO

RO

UG

H O

F W

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OD

SC

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OL

DIS

TR

ICT

Exh

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Ch

ang

es in

Net

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2008

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Net

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(965

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(148

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$

Sou

rce:

CA

FR

Sch

edul

e A

-2

Page 39

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-3

Fu

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Bal

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(mod

ified

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f acc

ount

ing)

2005

2006

2007

2008

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2011

2012

Gen

eral

Fun

dR

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$

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All

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rce:

CA

FR

Sch

edul

e B

-1

Page 40

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-4

Ch

ang

es in

Fu

nd

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ance

s, G

ove

rnm

enta

l Fu

nd

s,L

ast

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cal Y

ears

2003

2004

2005

2006

2007

2008

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2010

2011

2012

Rev

enu

esT

ax L

evy

657,

107.

00$

76

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940,

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late

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otal

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Sou

rce:

CA

FR

Sch

edul

e B

-2

Page 41

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-5

Gen

eral

Fu

nd

Oth

er L

oca

l Rev

enu

e b

y S

ou

rce,

Las

t T

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l Yea

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naud

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cal Y

ear

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rest

on

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tion

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30,

Inve

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99

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291.

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528.

99

Sou

rce:

Dis

tric

t Rec

ords

Page 42

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-6

Ass

esse

d V

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Sou

rce:

Ext

ende

d T

ax D

uplic

ate

& M

unic

ipal

Tax

Ass

esso

r

Page 43

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-7

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Sou

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Dis

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RO

UG

H O

F W

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DIS

TR

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Ove

rlapp

ing

Rat

es

Page 44

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

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Sou

rce:

Dis

tric

t CA

FR

& M

unic

ipal

Tax

Ass

esso

r

2012

2002

Page 45

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

J-9

Pro

per

ty T

ax L

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d C

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for

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1,07

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1.00

1,04

7,34

1.00

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-

2009

1,08

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5.00

1,08

6,03

5.00

100%

-

2010

1,12

9,47

6.00

1,12

9,47

6.00

100%

-

2011

1,39

6,09

0.00

1,39

6,09

0.00

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-

2012

1,39

4,01

1.00

1,39

4,01

1.00

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-

Sou

rce:

Dis

tric

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incl

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e C

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choo

l Tax

es (

A4F

form

)

Col

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ed w

ithin

the

Fis

cal Y

ear

of th

e Le

vy

Page 46

BO

RO

UG

H O

F W

ES

T W

ILD

WO

OD

SC

HO

OL

DIS

TR

ICT

Exh

ibit

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O

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Page 47

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Page 48

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Page 49

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Page 52

Single Audit Section

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 The Honorable President and Members of Board of Education Borough of West Wildwood School District County of Cape May West Wildwood, New Jersey We have audited the financial statements of the Borough of West Wildwood School District, in the County of Cape May, State of New Jersey, as of and for the fiscal year ended June 30, 2012, and have issued our report thereon dated November 16, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting West Wildwood Board of Education is responsible for establishing and maintaining effective internal controls over financial reporting. In planning and performing our audit, we considered West Wildwood Board of Education’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of West Wildwood Board of Education’s internal controls over financial reporting. Accordingly, we do not express an opinion on the effectiveness of West Wildwood’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we did identify certain deficiencies in internal control over financial reporting, described in the accompanying Schedule of Findings and Responses that we consider to be significant deficiencies in internal control over financial reporting, as Finding 12-3. A significant deficiency is a deficiency, or a combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Page 53

Compliance and Other Matters As part of obtaining reasonable assurance about whether West Wildwood Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying, Schedule of Findings and Responses as items Finding 12-3 and Finding 12-5. We noted certain matters that we reported to management of West Wildwood Board of Education in a separate letter dated November 16, 2012. West Wildwood Board of Education’s response to the findings identified in our audit are described in the accompanying Schedule of Findings and Responses. We did not audit West Wildwood Board of Education’s response and, accordingly, we express no opinion on it. This report is intended solely for the information and use of the management of the West Wildwood Board of Education, others within the entity, and the New Jersey State Department of Education and other state and federal awarding agencies and pass-through entities and is not intended and should not be used by anyone other than these specified parties. Ford, Scott & Associates, L.L.C. FORD, SCOTT & ASSOCIATES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS

Glen J. Ortman Glen J. Ortman Certified Public Accountant Licensed Public School Accountant No. 853 November 16, 2012

Page 54

Sch

edul

e A

K-3

Rep

aym

ent

Due

toF

eder

alG

rant

or

Bal

ance

Car

ryov

erof

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r (A

ccou

nts

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d G

rant

or

CF

DA

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te P

roje

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rant

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ard

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30,

(Wal

kove

r)C

ash

Bud

geta

ry Y

ears

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ecei

vabl

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even

ue/

June

30,

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ber

Num

ber

Per

iod

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ount

2011

Adj

ustm

ents

Am

ount

Rec

eive

dE

xpen

ditu

res

Bal

ance

s06

/30/

2012

06/3

0/20

1220

12

U.S

. Dep

artm

ent

of

Ed

uca

tio

nG

ener

al F

und:

Edu

catio

n Jo

bs F

und

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10

7/1/

2011

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/201

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0

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)

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)

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-

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otal

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eral

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(7

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)

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(7

6.00

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al S

peci

al R

even

ue F

und

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ard

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Page 55

Sch

edul

e B

K-4

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ustm

ents

/R

epay

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tD

efer

red

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r C

umul

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otal

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tate

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lic C

lust

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tal S

tate

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anci

al A

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tan

ce$

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at

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e 30

, 201

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, 201

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hedu

le.

Page 56

BOROUGH OF WEST WILDWOOD SCHOOL DISTRICT NOTES TO SCHEDULES OF EXPENDITURES OF AWARDS

AND FINANCIAL ASSISTANCE JUNE 30, 2012

NOTE 1. GENERAL The accompanying schedules of expenditures of awards and financial assistance present the activity of all federal and state award programs of the Board of Education, West Wildwood School District. The Board of Education is defined in Note 1(A) to the Board's basic financial statements. All federal and state awards received directly from federal and state agencies, as well as federal awards and state financial assistance passed through other government agencies, is included on the schedule of expenditures of federal awards and state financial assistance. NOTE 2. BASIS OF ACCOUNTING The accompanying schedules of expenditures of awards and financial assistance are presented on the budgetary basis of accounting with the exception of programs recorded in the enterprise funds, which are presented using the accrual basis of accounting. These bases of accounting are described in Notes 1(B) to the Board's basic financial statements. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. NOTE 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS The basic financial statements present the general fund and special revenue fund on a GAAP basis. Budgetary comparison statements or schedules (RSI) are presented for the general fund and special revenue fund to demonstrate finance-related legal compliance in which certain revenue is permitted by law or grant agreement to be recognized in the audit year, whereas GAAP reporting, revenue is not recognized until the subsequent year or when the expenditures have been made. The general fund is presented in the accompanying schedules on the modified accrual basis with the exception of the revenue recognition of the last two state aid payments in the current budget year, which is mandated pursuant to N.J.S. 18A:22-4.2. For GAAP purposes that payment is not recognized until the subsequent year due to the state deferral and recording of the last two state aid payments in the subsequent year. The special revenue fund is presented in the accompanying schedules on the grant accounting budgetary basis, which recognizes encumbrances as expenditures and recognizes the related revenues, whereas the GAAP basis does not. The special revenue fund also recognizes the last two state aid payments in the current budget year, consistent with N.J.S. 18A:22-4.2. The net adjustment to reconcile from the budgetary basis to the GAAP basis is $0 for the general fund and $0 for the Special Revenue Fund. See the Notes to Required Supplementary Information for a reconciliation of the budgetary basis to the modified accrual basis of accounting for the general and special revenue funds. Awards and financial assistance revenues are reported in the Board's basic financial statements on a GAAP basis as follows:

Federal State Total

General Fund $ 76.00 $ 32,555.00 $ 32,631.00 $ 76.00 $ 32,555.00 $ 32,631.00

The On-Behalf Pension Contributions made for the district by the State of New Jersey are recognized as revenue in the basic financial statements, but are not considered in the major program determination.

Page 57

BOROUGH OF WEST WILDWOOD SCHOOL DISTRICT NOTES TO SCHEDULES OF EXPENDITURES OF AWARDS

AND FINANCIAL ASSISTANCE JUNE 30, 2012 (CONTINUED)

NOTE 4. RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS Amounts reported in the accompanying schedules agree with the amounts reported in the related federal and state financial reports.

Page 58

BOROUGH OF WEST WILDWOOD SCHOOL DISTRICT

SCHEDULE OF FINDINGS AND RESPONSES FOR THE FISCAL YEAR ENDED JUNE 30, 2012

Section I - Summary of Auditor's Results

Financial Statements Type of auditor's report issued: Unqualified Opinion Internal control over financial reporting: 1) Material weakness(es) identified? Yes X No

2) Significant Deficiencies identified?

X

Yes

No

Non-compliance material to basic financial statements noted?

X

Yes

No

Federal Awards N/A Internal Control over major programs: 1) Material weakness(es) identified? Yes No 2) Significant Deficiencies identified?

Yes

No

Type of auditor's report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with section .510(a) of Circular A-133?

Yes

No

Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

Dollar threshold used to distinguish between type A and type B programs: $ N/A Auditee qualified as low-risk auditee? Yes No

Page 59

BOROUGH OF WEST WILDWOOD SCHOOL DISTRICT SCHEDULE OF FINDINGS AND RESPONSES

FOR THE FISCAL YEAR ENDED JUNE 30, 2012 (CONTINUED)

Section I - Summary of Auditor's Results (Continued)

State Awards N/A Dollar threshold used to distinguish between type A and type B programs: $ N/A Auditee qualified as low-risk auditee? Yes No

Type of auditor's report issued on compliance for major programs: N/A Internal Control over major programs:

1) Material weakness(es) identified? Yes No 2) Significant Deficiencies identified?

Yes

none reported

Any audit findings disclosed that are required to be reported in accordance with NJOMB Circular Letter 04-04?

Yes

Identification of major programs:

GMIS Number(s) Name of State Program

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Section II - Financial Statement Findings

Finding 12-3 The District does not maintain a general ledger for accounting records. As a result, $16,024.11 of accounts payable were not recorded in the FY 2012 accounting system. Criteria: The District is required to maintain a double entry accounting system. Condition: No double entry system was maintained in Fiscal Year 12. Questioned Costs: The questioned cost is $16,024.11. Context: Not determinable Effect: By not maintaining a general ledger, there is potential for the financial statements to be materially misstated. Cause: The Business Administrator did not maintain a general ledger. Recommendation: The District must maintain a general ledger in order to mitigate the risk of material misstatement. View of Responsible Official: The District understands and agrees with this finding.

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Section III - Federal Awards and State Financial Assistance Statement Findings and Questioned

Costs STATE AWARDS: Finding 12-5 The District did not properly record low income students on the Application of State School Aid. There were 27 students in total, 21 regular students and 6 special education, who were not recorded as low income on the Application of State School Aid. Information on workpapers from receiving districts indicated that these students were classified as low income students, therefore these students should have been recorded as low income on the Application of State School Aid. Criteria: The District is required to record low income students sent to other districts on their Application of State School Aid report. Condition: The District did not record low income students on the Application of State School Aid. Questioned Costs: Not determinable. Context: Not determinable Effect: Information reported on the Application for State School Aid is not accurate. Cause: The Business Administrator did not record the low income students on the Application of State School Aid. Recommendation: The District must reconcile the student registers with the Application of State School Aid to ensure low income students are included on the Application of State School Aid. View of Responsible Official: The District understands and agrees with this finding. FEDERAL AWARDS: NONE

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STATUS OF PRIOR YEAR FINDINGS Finding 11-1 The District improperly charged 2010-2011 IDEA Basic and IDEA ARRA expenditures in the General Fund instead of a Special Revenue Fund. Audit adjustments were necessary to properly classify the expenditures to the Special Revenue Fund from the General Fund. The result of these reclassifications was individual line item over expenditures in the General Fund of $2,372 in the Tuition to CSSD and Regional Day Schools Budget line. Criteria: The District is not permitted to incur expenditures in excess of the amounts appropriated. The district is also permitted to classify Grant funds as Special Revenue Funds. Condition: As a result of reclassifying $20,301.00 from the General Fund to the Special Revenue Fund, the Tuition for CSSD and Regional Day Schools budget line was over expended by $2,372.00. Context: One budget line was over expended by $2,372.00 due to the reclassification of $20,301.00 from the General Fund to the Special Revenue Fund. Effect: None compliance with IDEA Basic and IDEA ARRA grant requirements. Cause: The District charged the IDEA Basic and IDEA ARRA to the Tuition to CSSD and Regional Day Schools Budget Line for tuition costs. The funds needed to be moved from General Fund to Special Revenue Fund which caused an over expenditure in the budget line. Recommendation: The District should classify IDEA Basic and IDEA ARRA funds in as Special Revenue Funds and classify both grants separately. Current Status: A corrective action plan has been implemented for this finding.

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