AUDITED FINANCIAL STATEMENTS
For the Year Ended June 30, 2009
PAGE
Financial Section
Independent Auditors' Report 1-2
Management’s Discussion and Analysis 3-12
Basic Financial Statements:
Government-wide Financial Statements
Statement of Net Assets 13
Statement of Activities 14
Fund Financial Statements:
Balance Sheet - Governmental Funds 15
Reconciliation of Fund Balances on the Balance Sheet for Governmental Funds
to Net Assets of Governmental Activities on the Statement of Net Assets 16
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 17-18
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities 19
Statement of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual - General Fund 20
Statement of Net Assets - Internal Service Fund 21
Statement of Revenues, Expenses and Changes in Fund Net Assets -
Internal Service Fund 22
Statement of Cash Flows - Internal Service Fund 23
Statement of Fiduciary Assets and Liabilities - Agency Funds 24
Notes to Financial Statements 25-42
Combining and Individual Fund Financial Statements and Schedules
Combining Balance Sheet - Nonmajor Governmental Funds 43-44
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental Funds 45-46
Statement of Changes in Fiduciary Assets and Liabilities - Agency Fund 47
MONA SHORES PUBLIC SCHOOLS
TABLE OF CONTENTS
Rehmann Robson
3597 Henry St., Ste. 201
Muskegon, MI 49441
Ph: 231.739.9441
Fx: 231.733.0031
www.rehmann.com
Muskegon, Michigan
INDEPENDENT AUDITORS' REPORT
Board of Education
Mona Shores Public Schools
We have audited the accompanying financial statements of the governmental activities, each major fund
and the aggregate remaining fund information of Mona Shores Public Schools (the "District"), as of
and for the year ended June 30, 2009, which collectively comprise the District’s basic financial
statements as listed in the table of contents. These financial statements are the responsibility of Mona
Shores Public Schools’ 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. 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 Mona Shores Public Schools as of June 30, 2009, and the respective
changes in financial position, where applicable, thereof and the budgetary comparison of the general
fund for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
October 28, 2009
In accordance with Government Auditing Standards, we have also issued, under separate cover, our
report dated October 28, 2009, on our consideration of Mona Shores Public School’s internal control
over financial reporting and 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.
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As discussed in Note 16 to the financial statements, accounts receivable were restated during the year in
connection with the Durant bonds. Accordingly, beginning net assets of governmental activities as of
July 1, 2008 have been restated to adjust these balances.
The Management’s Discussion and Analysis on pages 3-12 is not a required part of the basic financial
statements but is supplementary information required by the Governmental Accounting Standards
Board. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise Mona Shores Public Schools’ basic financial statements. The combining fund
financial statements and schedules are presented for purposes of additional analysis and are not a
required part of Mona Shores Public Schools' basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly presented, in all material respects, in relation to the basic financial statements taken as
a whole.
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MANAGEMENT'S DISCUSSION
AND ANALYSIS
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
- 3 -
The management discussion and analysis of Mona Shores Public Schools’ financial performance provides an overall review of the School District’s financial activities for the fiscal year ended
June 30, 2009. The intent of this discussion and analysis is to provide, in layman’s terms, a look
at the District’s past performance and current position. Readers should also review financial
statements and notes to the financial statements to enhance their understanding of the district’s financial performance.
This reporting model was adopted by the Governmental Accounting Standards Board (GASB) in
their Statement No. 34 Basic Financial Statements – and Management Discussion and Analysis (MD&A) – for State and Local Governments issued in June of 1999.
Overview of the Financial Statements
This annual report consists of three parts: (1) management’s discussion and analysis (this
section), (2) the basic financial statements, and (3) other supplemental information. The financial
statements include notes that explain some of the information in the statements by providing detailed data. These statements are followed by a section of other supplementary information that
further explains and supports the financial statements. Additionally, the basic financial
statements also include district-wide financial statements and fund financial statements that
present different views of the district.
District-wide Financial Statements
The district-wide financial statements are full accrual basis statements that provide information about the District’s overall financial status. They are used to help determine whether or not the
District is better off, or worse off, as the result of the year’s activities. The Statement of Net
Assets reports all of the district’s assets and liabilities, both short-term and long-term, whether
they are “currently available” or not. Capital assets and long-term obligations of the District are reported in this statement. All of the current year’s revenues and expenses are accounted for in
the Statement of Activities, regardless of when cash is received or paid.
The two district-wide statements report the District’s net assets and how they have changed. Net assets – the difference between the District’s assets and liabilities – is one way to measure the
District’s financial health or position.
Over time, increases or decreases in net assets are an indicator of whether the District’s financial position is improving or deteriorating.
To assess the District’s overall health, you need to consider additional non-financial factors such as changes in the District’s property tax base, the quality of the education
provided, and the condition of the District’s buildings.
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
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In district-wide statements, the District’s activities are classified as governmental activities. This includes most of the District’s basic services, such as regular and special education, food service,
athletics, transportation, and administration. Property taxes and state aid finance most of these
services.
Fund Financial Statements
The fund financial statements focus on individual parts of the District, while reporting the
District’s operations in more detail than the district-wide statements. The fund level statements are reported on a modified accrual basis. Only those assets that are “measurable” and
“currently available” are reported. Liabilities are recognized to the extent that they are normally
expected to be paid with current financial resources.
Fund statements are formatted to comply with the legal requirements of the Michigan
Department of Education’s “Accounting Manual.” In the State of Michigan, the District’s major
instructional and instructional support activities are reported in the General Fund. Additional activities are reported in their relevant funds including: Special Revenue Funds for Food
Service, Athletics, Community Services, and memorial scholarship activities, Debt Service
Fund, Internal Service Fund, Capital Projects Funds and Fiduciary Funds.
In fund financial statements, capital asset purchases are reported as expenditures in the year of
acquisition. No capital asset is reported. The issuance of debt is recorded as a financial resource.
The current year’s payments of principal and interest on long-term obligations are recorded as
expenditures. Future year’s debt obligations are not recorded.
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
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Financial Analysis of the District as a Whole
The net assets of the District at June 30, 2009 amounted to $20.875 million. Figure A-1 shows a
condensed breakdown of the net assets.
Figure A-1
Condensed Statement of Net Assets
Governmental Activities
2009 2008
Current assets $ 26,197,298
$ 12,652,039
Noncurrent assets 39,199,458
41,660,106
Total assets 65,396,756
54,312,145
Current liabilities 9,764,946
9,006,619
Noncurrent liabilities 34,756,109
25,416,849
Total liabilities 44,521,055
34,423,468
Net assets
Invested in capital assets, net of related debt 14,723,525
14,427,262
Restricted 940,851
252,902
Unrestricted 5,211,325
5,208,513
Total net assets, as restated $ 20,875,701
$ 19,888,677
The largest portion of the District’s net assets (70.5%) reflects investment in capital assets (e.g., land, buildings and improvements, and furniture and equipment), less any related debt used to
acquire those assets that is still outstanding. The District uses these capital assets to provide
services to students; consequently, these assets are not available for future spending. Although
the District’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay the debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
The remaining net assets, with the exception of the amount specifically restricted for debt service and capital improvements, represent resources that are unrestricted on how they may be used.
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
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The net assets of the District increased by $987,024 during the 2008/09 fiscal year. Figure A-2 shows the breakdown of this change. The Statement of Activities presented later in the
government-wide financial statements, provides greater detail on the District’s annual activity.
The cost of the District’s governmental activities for the year was $38.95 million. However, the
amount that the District’s taxpayers ultimately financed for these activities was $32.09 million because $3.07 million of the cost was paid for by those who benefited from the programs, and
$3.79 million was paid for by other governments and organizations who subsidized certain
programs with grants and contributions. The remaining “public benefit” portion was paid for
with property taxes, state pupil foundation aid, investment earnings, and other miscellaneous revenues.
Figure A-2
Statement of Activities
Governmental Activities For the year ended June 30,
2009 2008
Revenues
Program Revenues
Charges for services $ 3,069,222
$ 3,314,892
Operating grants and contributions 3,790,425
3,117,827
General revenues
Property taxes 9,891,858
10,108,145
State formula aid 22,842,070
22,955,787
Other 341,597
615,011
Total revenues 39,935,172
40,111,662
Expenses
Instruction 20,352,637
20,287,504
Supporting services 12,015,344
11,737,798
Community services 663,431
766,865
Food service 1,127,229
1,184,957
Athletics 741,921
794,550
Interest on long-term debt 1,232,380
1,379,537
Depreciation 2,815,206
2,888,200
Total Expenses 38,948,148
39,039,411
Increase in net assets $ 987,024
$ 1,072,251
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
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A substantial portion, 59 percent, of the District’s revenue is received from State sources. This portion is consistent with amounts received in the previous year with a shift of 5% in revenues to
Federal sources from state and local sources. This change is mostly the result of the State of
Michigan utilizing federal stimulus money to back fill a portion of the State’s per student
foundation. The current economic conditions required this immediate utilization of a large portion of the Federal stimulus. The financial stability of the District rests primarily with the
economic health of the State of Michigan. Figure A-3 depicts the breakdown of the sources of
revenue for the District.
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
- 8 -
As Figure A-4 depicts, 59% of the District’s resources are spent on instruction and pupil and instructional support services. This is down 6% from last year, mostly due to depreciation being
classified separately. Another 9% is spent on administrative and business services necessary to
efficiently operate the District, while 8% is spent for buildings, operations and maintenance,
which includes utilities and custodial services. 7% represents the depreciation of on District assets and the final 17% is spent on interest and other support services. With the exception of
depreciation, this is consistent with the prior years.
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
- 9 -
Financial Analysis of the District’s Funds
The financial performance of the District as a whole is reflected in its governmental funds as
well. The combined governmental funds equity increased by $12.8 million during the 2008/09
fiscal year, resulting in total fund equity of $19.1 million at year end. (The general operating fund portion of this is $5.5 million.) The primary reasons for the change in fund equity are as
follows:
Factors Increasing Fund Equity
Federal Funding – The State of Michigan passed along $1.44 million of Federal stimulus to the
District to backfill the per pupil foundation. This money increased the total per pupil foundation to $7,316, a $112 increase over the prior year. This resulted in an increase of total revenues to
the District of $427,360.
Building and Site Funds – The District passed a millage in February and was able to sell $12.345 million in bonds in June. This money is intended to fund many District projects over the next
three years.
Sinking Funds – The 2005 Sinking Fund experienced revenues over expenditures totaling $677,304. This increase is expected to be used to fund a portion of the High School gymnasium
project that will begin fall of 2009.
Reduced Program Spending – Many of the District’s programs spent less than the prior year. These significant differences were as follows:
The District experienced many reductions in staff. The teacher group had a reduction of
10.7 positions. There was also a reduction of one clerical position in the central office and two special education parapro positions.
The teacher groups health cost went down as many staff moved from a more expensive
health insurance policy.
The yearly Early Retirement obligation was less than is typical. There were less
retirements than is typical as well as many retirees opted for Medicare early, eliminating
the District’s financial obligation.
Operation and Transportation expenses were less than anticipated. This was mostly due
to staff resignations and retirements that were replaced with temporary staff. Also
impacted by a significant reduction in the cost of heating and diesel fuel.
Factors Decreasing Fund Equity
Building & Site Funds – $554,253 was spent on bond projects during the course of the fiscal year.
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
- 10 -
Declining enrollment – Enrollment declined by 83 blended pupils (cost of approximately $597,932 using prior year per pupil foundation). This is similar to the downward trend that will
likely continue in the years ahead (See Figure A-5). Declining birthrates will continue to hold
down future kindergarten enrollments and large classes will continue to graduate in the coming
years. Additionally, smaller schools of choice numbers could have the potential of dramatically lowering enrollments and funding as well.
General Fund Budgetary Highlights
The Uniform Budget Act of the State of Michigan requires that the local Board of Education approve the original budget for the upcoming fiscal year prior to July 1, the start of the fiscal
year. As a matter of practice, the District amends its budget quarterly during the school year.
These revisions are made in order to deal with unexpected changes in revenues and expenditures.
The following analysis describes the reasons for changes in the budget during the year.
Revenues – There was a $319,320 (0.97%) increase in the total General Fund revenue budget
from the beginning to the end of the year. There were significant changes in funding sources as
follows:
The local source revenue budget increased by $265,727. This increase was the result of
additional property tax revenues needing to be budgeted for Commercial Personal tax value in the amount of $135,000. There was also an unanticipated $90,000 increase in
the Medicaid Fee for Service revenues during the year.
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
- 11 -
The state source and federal source revenue budgets decreased and increased by similar amounts. This was mostly due to the allocation of approximately $370 per student of
federal stimulus money to offset this same decrease to the state per student foundation.
Expenditures – There was a $138,831 (0.41%) increase in the total General Fund expenditures
from the original budget to the final revised budget. The significant changes by functional
category are as follows:
The operations and transportation budgets saw a decrease of just over $100,000. This
was a result of significant decreases in the cost of heating fuel and diesel fuel.
Capital Assets and Debt Administration
Capital Assets – A summary of the District’s capital assets at year end is outlined in Figure A-6.
Figure A-6
Summary of Capital Assets (Net of Depreciation)
Governmental Activities
2009
2008
Land $ 344,401
$ 344,401
Construction in Progress 227,134
-
Building and improvements 31,103,895
32,025,034
Furniture and equipment 6,939,526
8,255,699
Buses and other Vehicles 394,580
578,560
Total $ 39,009,536
$ 41,203,694
Mona Shores Public Schools Management Discussion and Analysis
For the Fiscal Year Ended June 30, 2009
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Debt Administration – A summary of the District’s indebtedness is outlined in figure A-7.
Figure A-7
Summary of Indebtedness
Outstanding at June 30,
2009
2008
Balance of 1995 bond issue $ 2,220,000
$ 4,295,000
2002 refunding bond issue 8,715,000
8,805,000
2003 refunding bond issue 2,690,000
2,690,000
2005 bond issue 2,760,000
3,165,000
2008 refunding bond issue 7,850,000
7,915,000
2009 bond issue 12,345,000
-
1998 school improvement bond (Durant) 247,110
272,825
Equipment note payable 125,763
144,002
Early retirement incentives 964,369
1,267,325
Compensated absences 560,273
520,900
Deferred amounts (discounts/premiums) (74,752)
(125,327)
Total $ 38,402,763
$ 28,949,725
Under State statute, the District is legally restricted from incurring long-term bonded debt in
excess of 15% of the assessed value of taxable property within the school district. At June 30,
2009, the District’s net bonded debt of $36,827,110 was well below the legal limit of approximately $135.8 million.
Requests for Information This financial report is designed to provide the District’s citizens, taxpayers, parents, students,
investors and creditors with a general overview of the District’s finances, and to show how the
District is accountable for the money it receives. Questions concerning any of the information
provided in this report, or requests for additional financial information should be addressed to Mr. Michael Schluentz, Chief Financial Officer, Mona Shores Public Schools, 3374 McCracken
St., Muskegon, MI 49441, telephone number (231) 780-4751 Extension 8209.
BASIC FINANCIAL STATEMENTS
MONA SHORES PUBLIC SCHOOLS
Statement of Net Assets
June 30, 2009
Governmental
Activities
Assets
Cash and investments 19,879,568$
Accounts receivable 6,316,466
Inventory 1,264
Deferred charges 189,922
Nondepreciable capital assets 571,535
Depreciable capital assets, net 38,438,001
Total assets 65,396,756
Liabilities
Accounts payable 1,351,243
Accrued expenses 4,431,563
Accrued interest on long-term debt 247,050
Unearned revenue 88,436
Long-term liabilities
Due within one year 3,735,090
Due in more than one year 34,667,673
Total liabilities 44,521,055
Net assets
Invested in capital assets, net of related debt 14,723,525
Restricted for debt service 426,800
Restricted for capital projects 514,051
Unrestricted 5,211,325
Total net assets 20,875,701$
The accompanying notes are an integral part of these financial statements.
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MONA SHORES PUBLIC SCHOOLS
Statement of Activities
For the Year Ended June 30, 2009
Program Revenues
Operating Net
Charges Grants and (Expense)
Functions / Programs Expenses for Services Contributions Revenue
Governmental activities:
Instruction 20,352,637$ 1,202,547$ 3,055,926$ (16,094,164)$
Supporting services 12,015,344 411,321 734,499 (10,869,524)
Community services 663,431 726,197 - 62,766
Athletics 741,921 108,933 - (632,988)
Food service 1,127,229 620,224 - (507,005)
Interest on long-term debt 1,232,380 - - (1,232,380)
Depreciation - unallocated 2,815,206 - - (2,815,206)
Total governmental activities 38,948,148$ 3,069,222$ 3,790,425$ (32,088,501)
General revenues:
Property taxes - operations 5,018,032
Property taxes - debt service 3,954,952
Property taxes - capital projects 918,874
State of Michigan aid - unrestricted 22,842,070
Grants and contributions not
restricted to specific programs 176,430
Unrestricted investment earnings 126,763
Gain on sale of capital assets 38,404
Total general revenues 33,075,525
Change in net assets 987,024
Net assets, beginning of year, as restated 19,888,677
Net assets, end of year 20,875,701$
The accompanying notes are an integral part of these financial statements.
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General Building and Nonmajor
Fund Site Fund Funds Total
Assets
Cash and investments 5,309,760$ 11,797,803$ 1,806,047$ 18,913,610$
Accounts receivable 25,699 745 21,532 47,976
Due from other
governmental units 6,012,290 - 256,200 6,268,490
Inventory - - 1,264 1,264
Total assets 11,347,749$ 11,798,548$ 2,085,043$ 25,231,340$
Liabilities
Accounts payable 1,351,243$ -$ -$ 1,351,243$
Accrued expenses 4,419,073 - 12,490 4,431,563
Deferred revenue 70,766 - 264,780 335,546
Total liabilities 5,841,082 - 277,270 6,118,352
Fund balance
Reserved for inventory - - 1,264 1,264
Unreserved, designated
for capital projects - 11,798,548 - 11,798,548
Unreserved, undesignated 5,506,667 - - 5,506,667
Unreserved, undesignated,
reported in nonmajor:
Special revenue funds - - 72,156 72,156
Debt service funds - - 673,850 673,850
Capital projects funds - - 1,060,503 1,060,503
Total fund balances 5,506,667 11,798,548 1,807,773 19,112,988
Total liabilities and
fund balances 11,347,749$ 11,798,548$ 2,085,043$ 25,231,340$
MONA SHORES PUBLIC SCHOOLS
Balance Sheet
Governmental Funds
June 30, 2009
The accompanying notes are an integral part of these financial statements.
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MONA SHORES PUBLIC SCHOOLS
Reconciliation of Fund Balances on the Balance Sheet
for Governmental Funds to Net Assets of
Governmental Activities on the Statement of Net Assets
June 30, 2009
Fund balances - total governmental funds 19,112,988$
Amounts reported for governmental activities in the statement of net assets are
different because:
Long-term receivables are reported as an asset and revenue when earned on the
statement of net assets while the governmental funds report these balances as an
asset and deferred revenue until the availability criterion for revenue recognition
is met.
Add - deferred long-term receivables 247,110
Capital assets used in governmental activities are not financial resources and
therefore are not reported in the funds.
Add - Nondepreciable capital assets 571,535
Add - Depreciable capital assets, nets 38,438,001
The assets and liabilities of the internal service fund are included in the
governmental activities in the statement of net assets.
Add - net assets of internal service fund 1,589
Certain liabilities, such as bonds payable, are not due and payable in the current
period and therefore are not reported in the funds.
Deduct - bonds payable and other long-term obligations (36,878,121)
Deduct - accrued interest on bonds payable (247,050)
Deduct - compensated absences (560,273)
Add - bond issuance costs, net of amortization 189,922
Net assets of governmental activities 20,875,701$
The accompanying notes are an integral part of these financial statements.
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General Building and Nonmajor
Fund Site Fund Funds Total
Revenue
Local sources:
Property taxes 5,018,032$ -$ 4,873,826$ 9,891,858$
Tuition 150,453 - 68,092 218,545
Investment income 88,945 3,588 34,230 126,763
Food sales, athletics
and recreation - - 744,149 744,149
Other 595,513 - 521,630 1,117,143
State sources 23,382,019 - 79,675 23,461,694
Federal sources 2,624,866 - 561,557 3,186,423
Interdistrict sources 1,175,908 - - 1,175,908
Total revenue 33,035,736 3,588 6,883,159 39,922,483
Expenditures
Current:
Instructional services 20,313,264 - - 20,313,264
Supporting services 11,848,968 - - 11,848,968
Community services 51,485 - 611,946 663,431
Food services - - 1,127,229 1,127,229
Athletic activities - - 741,921 741,921
Debt service:
Principal - - 2,660,715 2,660,715
Interest expense
and other charges - - 1,255,555 1,255,555
Bond issuance costs - 48,943 - 48,943
Capital outlay 12,920 505,310 244,969 763,199
Total expenditures 32,226,637 554,253 6,642,335 39,423,225
Revenues over (under)
expenditures 809,099 (550,665) 240,824 499,258
MONA SHORES PUBLIC SCHOOLS
Statement of Revenue, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2009
The accompanying notes are an integral part of these financial statements.
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General Building and Nonmajor
Fund Site Fund Funds Total
MONA SHORES PUBLIC SCHOOLS
Statement of Revenue, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2009
Other financing sources (uses)
Transfers in 189,961 - 771,384 961,345
Transfers out (771,612) (315) (189,418) (961,345)
Proceeds on sale of
capital assets 38,404 - - 38,404
Issuance of general
obligation bonds - 12,345,000 - 12,345,000
Total other financing
sources (uses) (543,247) 12,344,685 581,966 12,383,404
Net change in fund balances 265,852 11,794,020 822,790 12,882,662
Fund balances, beginning of year 5,240,815 4,528 984,983 6,230,326
Fund balances, end of year 5,506,667$ 11,798,548$ 1,807,773$ 19,112,988$
The accompanying notes are an integral part of these financial statements.
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MONA SHORES PUBLIC SCHOOLS
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Year Ended June 30, 2009
Net change in fund balances - total governmental funds 12,882,662$
Amounts reported for governmental activities in the statement of activities are different
because:
Long-term receivables are reported as revenue when earned on the statement of
activities while the governmental funds report these balances as revenue when the
availability criterion for revenue recognition is met.
Deduct - change in deferred long-term receivables (25,715)
Governmental funds report capital outlays as expenditures. However, in the
statement of activities, the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense.
Add - capital outlay 621,048
Deduct - depreciation expense (2,815,206)
Deduct - proceeds on the sale of capital assets (38,404)
Add - gain on disposal of capital assets 38,404
The net revenue (expense) of the internal service fund is reported with
governmental activities.
Add - net income of the internal service fund 144
Bond proceeds provide current financial resources to governmental funds in the
period issued, but issuing bonds increases long-term liabilities in the statement of
net assets. Repayment of bond principal and other obligations is an expenditure in
the governmental funds, but a reduction in long-term liabilities in the statement of
net assets.
Add - principal payments on long-term debt 2,660,715
Add - principal payments on equipment notes payable 18,239
Deduct - issuance of long-term debt (12,345,000)
Add - bond issuance costs 48,943
Some expenses reported in the statement of activities do not require the use of
current financial resources and therefore are not reported as expenditures in the
funds.
Add - decrease in accrued interest payable on bonds 73,750$
Deduct - amortization of bond premiums, discounts and deferred loss (50,575)
Deduct - increase in the accrual for compensated absences (39,373)
Deduct - amortization of deferred charges (42,608)
Change in net assets of governmental activities 987,024$
The accompanying notes are an integral part of these financial statements.
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MONA SHORES PUBLIC SCHOOLS
Statement of Revenue, Expenditures and
Changes in Fund Balance - Budget and Actual
General Fund
For the Year Ended June 30, 2009
Variance -
Over/(Under)
Original Amended Actual Budget
Revenue
Local sources:
Property taxes 4,933,587$ 5,070,448$ 5,018,032$ (52,416)$
Tuition 182,500 191,215 150,453 (40,762)
Investment income 120,000 90,000 88,945 (1,055)
Other 509,600 552,751 595,513 42,762
State sources 24,868,441 23,244,111 23,382,019 137,908
Federal sources 1,033,443 2,672,966 2,624,866 (48,100)
Interdistrict sources 1,060,000 1,167,000 1,175,908 8,908
Total revenue 32,707,571 32,988,491 33,035,736 47,245
Expenditures
Current:
Instructional services 20,834,321 20,590,963 20,313,264 (277,699)
Supporting services 12,107,105 12,200,609 11,848,968 (351,641)
Community services 26,979 34,736 51,485 16,749
Capital outlay - - 12,920 12,920
Total expenditures 32,968,405 32,826,308 32,226,637 (599,671)
Revenues over (under)
expenditures (260,834) 162,183 809,099 646,916
Other financing sources
(uses)
Transfers in 158,750 158,750 189,961 31,211
Transfers out (822,395) (825,661) (771,612) 54,049
Proceeds from sale of
capital assets - 38,400 38,404 4
Total other financing
sources (uses) (663,645) (628,511) (543,247) 85,264
Net changes in fund balance (924,479) (466,328) 265,852 732,180
Fund balance, beginning of year 5,240,815 5,240,815 5,240,815 -
Fund balance, end of year 4,316,336$ 4,774,487$ 5,506,667$ 732,180$
The accompanying notes are an integral part of these financial statements.
Budget
- 20 -
Assets
Cash and cash equivalents 965,958$
Liabilities
Retirement liabilities 964,369
Net assets
Unrestricted 1,589$
MONA SHORES PUBLIC SCHOOLS
Statement of Net Assets
Internal Service Fund
June 30, 2009
The accompanying notes are an integral part of these financial statements.
- 21 -
MONA SHORES PUBLIC SCHOOLS
For the Year Ended June 30, 2009
Operating revenue
Charges for services 20,455$
Operating expenses
Wages and benefits 20,228
Other 83
Total operating expenses 20,311
Operating income 144
Net assets, beginning of year 1,445
Net assets, end of year 1,589$
Statement of Revenue, Expenses
and Changes in Fund Net Assets
Internal Service Fund
The accompanying notes are an integral part of these financial statements.
- 22 -
MONA SHORES PUBLIC SCHOOLS
For the Year Ended June 30, 2009
Cash flows from operating activities
Receipts from users 20,455$
Payments for insurance (323,267)
Net cash used in operating activities (302,812)
Cash flows from financing activities
Decrease in due to other funds (2,618)
Net decrease in cash and cash equivalents (305,430)
Cash and cash equivalents, beginning of year 1,271,388
Cash and cash equivalents, end of year 965,958$
Cashflows from operating activities
Operating income 144$
Adjustments to reconcile operating income to net
cash used in operating activities:
Decrease in:
Retirement liabilities (302,956)
Net cash used in operating activities (302,812)$
Statement of Cash Flows
Internal Service Fund
The accompanying notes are an integral part of these financial statements.
- 23 -
Assets
Cash and investments 316,289$
Liabilities
Due to student groups 316,289$
MONA SHORES PUBLIC SCHOOLS
Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2009
The accompanying notes are an integral part of these financial statements.
- 24 -
NOTES TO FINANCIAL STATEMENTS
1.
Government-wide and Fund Financial Statements
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
The statement of activities demonstrates the degree to which the direct expenses of a given function
or segment is offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function or segment. Program revenues include 1) charges to customers or
applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a
given function or segment and 2) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular function or segment. Taxes and other items not
properly included among program revenues are reported instead as general revenues .
A summary of the significant accounting policies of Mona Shores Public Schools (the "District")
consistently applied in the preparation of the accompanying financial statements follows:
The Reporting Entity
The District is governed by an elected seven-member Board of Education. As required by generally
accepted accounting principles, these financial statements present the reporting entity of Mona
Shores Public Schools. The criteria identified in GASB Statements 14 and 39, including financial
accountability, have been utilized in identifying the District's reporting entity which includes no
component units.
The government-wide financial statements (i.e., the statement of net assets and the statement of
activities) report information on all of the nonfiduciary activities of the primary government. For the
most part, the effect of interfund activity has been removed from these statements. Governmental
activities, which normally are supported by taxes and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and charges for
support. The District had no business-type activities during the year ended June 30, 2009.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Separate financial statements are provided for governmental funds, proprietary funds and fiduciary
funds even though the latter are excluded from the government-wide financial statements.
Major individual governmental funds are reported as separate columns in the fund financial
statements.
- 25 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting . Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes
are recognized as revenues in the year for 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.
The agency fund follows the accrual basis of accounting, but does not have a measurement focus.
The debt service funds account for the accumulation of resources which are restricted for the
payment of principal and interest on bonds.
The capital projects funds account for the accumulation and disbursement of funds for
construction projects.
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 if they are collected within 60 days
of the end of the current fiscal period or within one year for expenditure-driven grants. Expenditures
generally are recorded when a liability is incurred, as under accrual accounting. However, debt
service expenditures are recorded only when payment is due.
The building and site fund accounts for the costs of capital improvements. Financing is provided
by the Building & Site bonds issued in 2009.
Property taxes, expenditure-driven grant revenue and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenues of the
current fiscal period. All other revenue items are considered to be measurable and available only
when cash is received by the District.
The District reports the following major governmental funds:
The special revenue funds account for assets which are restricted for specific purposes.
The general fund is the District’s primary operating fund. It accounts for all financial resources
of the general government, except those required to be accounted for in another fund.
Additionally, the District reports the following fund types:
- 26 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
1.
2.
Budgets are adopted for general and special revenue funds as required by state law and are adopted
on a basis consistent with generally accepted accounting principles (GAAP). The District considers
the debt service payment schedule to be an adequate budgetary control. The District follows these
procedures in establishing the budgetary data reflected in the financial statements:
Amounts reported as program revenues include 1) charges to customers or applicants for goods,
services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and
contributions. Internally dedicated resources are reported as general revenues rather than as program
revenues. Likewise, general revenues include all taxes, unrestricted grants and interest income.
The effect of interfund activity has been eliminated from the government-wide financial statements.
Budgets and Budgetary Accounting
Private-sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in the government-wide financial statements to the extent that those standards
do not conflict with or contradict guidance of the Governmental Accounting Standards Board.
When both restricted and unrestricted resources are available for use, it is the District's policy to use
restricted resources first, then unrestricted resources as they are needed.
Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with a proprietary fund's principal ongoing operations. The principal
operating revenue of the internal service fund is charges to other funds to recover the costs of
benefits to retired employees. Operating expenses for the internal service fund includes the cost of
services. All revenues and expenses not meeting this definition are reported as nonoperating
revenues and expenses.
The internal service fund accounts for the cost of providing specific benefits to retired
employees. Operating expenses include the cost of services.
The Superintendent submits to the Board a proposed operating budget for the fiscal year
commencing the following July 1.
Public hearings are conducted to obtain taxpayer comments.
The agency fund accounts for resources held on behalf of other individuals and governments.
The District maintains a Student Activities Fund to record the transactions of student and parent
groups for school and school-related purposes. The funds are segregated and held in trust for the
students and parents.
- 27 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
3.
4.
5.
In general, outstanding balances between funds are reported as “due to/from other funds.” Activity
between funds that are representative of lending/borrowing arrangements outstanding at the end of
the fiscal year are referred to as “advances to/from other funds.”
For Mona Shores Public Schools, all properties are assessed as of December 31 and the related
property taxes are levied and become a lien on July 1 for 100 percent of the taxes which are due
September 15 and February 15.
Receivables and Revenue
Encumbrance accounting is employed in governmental funds. Encumbrances (purchase orders,
contracts) outstanding at year end are reported as reservations of fund balances and do not constitute
expenditures or liabilities because the goods or services have not been received as of year end; the
commitments will be reappropriated and honored during the subsequent year.
Cash and cash equivalents include cash on hand, demand deposits, and short-term investments with a
maturity of three months or less when acquired. Investments are stated at fair value.
Property taxes are recognized as revenue in the General and Debt Service funds on a levy year basis.
The 2008 levy amounts are recognized as current property tax revenue to the extent they are
collected during the year or within sixty days after year end. Collections of delinquent taxes in
subsequent years are recognized as property tax revenues in the year collected. Assessed values are
established annually by the various governmental units within the District and are equalized by the
State of Michigan.
Adoption and amendments of all budgets used by the District are governed by Public Act 621,
which was followed for the year ended June 30, 2009. Expenditures may not exceed
appropriations at the function level. The appropriations resolutions are based on the projected
expenditures budget of the department heads of the District. Any amendment to the original
budget must meet the requirements of Public Act 621. Any revisions that alter the total
expenditures of any fund must be approved by the Board of Education.
The budget is legally enacted through passage of a resolution.
Formal budgetary integration is employed as a management control device during the year for all
governmental funds requiring budgets.
Cash and Investments
The District did not have significant expenditure budget variances.
Encumbrances
Property Taxes
- 28 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Years
20-50
5-10
5-20
Capital Assets
The State of Michigan utilized a foundation allowance approach, which provides for a specific
annual amount of revenue per student based on a state-wide formula. The foundation allowance is
funded from a combination of state and local sources. Revenues from state sources are primarily
governed by the District Aid Act and the School Code of Michigan. The State portion of the
foundation is provided from the State’s School Aid Fund and is recognized as revenue in accordance
with state law and accounting principles generally accepted in the United States of America.
The District also receives revenue from the state to administer certain categorical education
programs. State rules require that revenue earmarked for these programs be used for its specific
purpose. Certain categorical funds require an accounting to the State of the expenditures incurred.
For categorical funds meeting this requirement, funds received, which are not expended by the close
of the fiscal year, are recorded as deferred revenue. Other categorical funding is recognized when
the appropriation is received.
Inventory
Assets
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Capital assets of the District are depreciated using the straight line method over the following
estimated useful lives:
Capital assets, which include land, buildings, equipment, and vehicles, are reported in the
governmental activities column in the government-wide financial statements. Capital assets are
defined by the District as assets with an initial, individual cost of more than $5,000 and an estimated
useful life in excess of one year. Such assets are recorded at historical cost or estimated historical
cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the
date of donation.
Inventory is stated at cost (first-in, first-out). They consist primarily of food and cafeteria supplies
in the Food Service Fund. The donated commodities inventory in the Food Service Fund is valued
at current market value, based on government guidelines.
The costs of normal repair and maintenance that do not add to the value or materially extend asset
lives are not capitalized.
Buildings and additions
Furniture and other equipment
Buses and other vehicles
- 29 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Salaries Payable and Accrued Employee Benefits
The liability for accrued retirement and the employer share of FICA related to the salaries payable
has been recorded as has the liability for employee health insurances for the months of July and
August. The District pays these insurances for this period as a part of the compensation for services
rendered in the preceding school year.
Reserves and Designations of Fund Balance/Restricted Net Assets
Compensated Absences
The liability for the sick leave has been computed using the vesting method in accordance with
Governmental Accounting Standards Board Statement No. 16. This liability is shown on the
statement of net assets.
Designations of fund balance are established to identify amounts set aside by the Board of Education
for future expenditures.
Reservations of fund balance are established to identify 1) third party claims against resources of the
entity that have not materialized as liabilities at the balance sheet date, or 2) the existence of assets
that, because of their nonmonetary nature or lack of liquidity, represent financial resources not
available for current appropriation or expenditure, or 3) the existence of assets that are legally
restricted to a future use.
A liability is recorded at June 30 for those amounts owed to teachers and other employees of the
District who do not work during the summer when school is not in session but have elected to have
their salaries paid over an entire year. This has the effect of properly charging their salaries to
expenditures in the fiscal year in which their services are received, even though they are not paid
until July and August of the following fiscal year.
Most employees of the District are compensated for leaves of absences chargeable to sick days.
Each school year, the covered employees are credited with a number of sick days and any unused
portion of such allowances can accumulate. Upon retirement, those employees who meet certain age
and years of service requirements will be paid for a portion of sick days accumulated to a maximum
number of days and at a rate determined by their job category.
Restricted net assets represent assets which are legally restricted by outside parties or enabling
legislation.
- 30 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Districts electing to bond under the Durant settlement received a lump sum amount (bond proceeds)
on November 24, 1998. This created a liability which will be reduced each year with an annual state
appropriation made for debt service on the bonds. The annual State of Michigan appropriation is the
only revenue source for making the annual debt service payment on the bonds. If the legislature fails
to appropriate the funds, the District is under no obligation for payment. Additionally, the bond
documentation states specifically that the Bonds shall not be in any way a debt or liability of the
State of Michigan. This liability has been booked on the statement of net assets. Annual
appropriations from the State are recorded in the 1998 Bond Issue Fund along with the payment of
the interest and principal of the bonds.
The original bond proceeds were recorded in the 1998 Bond Issue Fund and expended for purposes
specified in Section 1351a of the Revised School code.
Interfund Transactions
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
During the course of normal operations, the District has numerous transactions between funds,
including expenditures and transfers of resources to provide services, construct assets, and service
debt. The accompanying financial statements generally reflect such transactions as transfers.
Operating subsidies are also recorded as transfers. The amounts recorded as subsidies or advances
are determined by the District.
Use of Estimates
Durant Related Issues
Settlement amounts were based on the formula used to determine amounts owed to Durant
plaintiffs. Half the settlement amount was received in ten annual payments; the other half was
received in a lump sum by participating in a special bonding program offered through the Michigan
Municipal Bond Authority (MMBA) or in fifteen annual payments. Mona Shores Public Schools
elected to participate in the special bonding program.
Under Public Act 142 of 1997, enacted in November 1997 as part of the Durant Resolution
Package, school districts and intermediate school districts were offered settlement amounts to settle,
compromise, and resolve, in their entirety, any potential claims they may have asserted for violations
of section 29, Article IX, of the constitution through September 30, 1997, which were similar to the
claims asserted by the plaintiffs in the Durant v. State of Michigan case. To be eligible to receive
its offer of settlement amount, the non-plaintiff district needed to adopt and submit to the State
Treasurer a waiver resolution, in the form set forth in Public Act 142 of 1997, waiving any potential
claims through September 30, 1997.
- 31 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
2.
3.
Governmental
Activities
Fiduciary
Activities Total
2,890$ -$ 2,890$
3,919,839 32,948 3,952,787
15,956,839 283,341 16,240,180
19,879,568$ 316,289$ 20,195,857$
a.
b.
c.
Subsequent Events
In preparing these financial statements, management has evaluated, for potential recognition or
disclosure, significant events or transactions that occurred during the period subsequent to June 30,
2009, the most recent statement of net assets presented herein, through the auditors' report date, the
date these financial statements were available to be issued. No significant such events or
transactions were identified.
Certificates of deposit insured by a State or national bank, savings accounts of a state or federal
savings and loan association, or certificates of deposit or share certificates of a state or federal
credit union organized and authorized to operate in this State.
Commercial paper rated prime at the time of purchase and maturing not more than 270 days after
the date of purchase.
Michigan law authorizes the School District to deposit and invest in:
The District reports State of Michigan school aid in the fiscal year in which the District is entitled to
the revenue as provided by State of Michigan school aid appropriation acts. State funding
represented 71% of the District's general fund revenue during the 2009 fiscal year.
Cash and investments are comprised of the following at year-end:
Deposits
Total cash and investments
STATE OF MICHIGAN SCHOOL AID
Investments
DEPOSITS AND INVESTMENTS
Bonds, bills or notes of the United States; obligations, the principal and interest of which are
fully guaranteed by the United States; or obligations of the State. In a primary or fourth class
school district, the bonds, bills or notes shall be payable at the option of the holder upon not
more than 90 days notice or, if not so payable, shall have maturity dates not more than 5 years
after the purchase dates.
Petty cash
- 32 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
d.
e.
f.
Maturity Fair Value Rating
MILAF External Investment Pool N/A $ 15,401,423 AAA S&P
Federal Home Loan Mortgage Corp 3/25/2014 250,000 AAA S&P
Federal National Mortgage Association 4/9/2012 200,000 AAA S&P
Federal Home Loan Bank 6/13/2016 162,434 AA S&P
Federal National Mortgage Association 7/2/2018 100,000 Aaa Moody
Shorebank CD 1/21/2011 100,000 Not Rated
GNMA II Single Family Pool 8/20/2025 9,991 Not Rated
Community Shores CD 3/3/2010 5,443 Not Rated
Community Shores CD 3/3/2011 5,444 Not Rated
Community Shores CD 3/3/2012 5,445 Not Rated
Total investments 16,240,180$
Interest Rate Risk - State law limits the allowable investments and the maturities of some of the
allowable investments as identified above. The District's investment policy does not have specific
limits in excess of state law on investment maturities as a means of managing its exposure to fair
value losses arising from increasing interest rates. None of the District's investments had fixed
maturities at year end.
The District has designated twelve banks for the deposit of its funds. All accounts are in the name
of the District and a specific fund or common account. They are recorded in District records at fair
value.
The District’s cash and investments are subject to several types of risk, which are examined in more
detail below:
The District chooses to disclose its investments by specifically identifying each. As of year end, the
District had the following investments:
Investment
Securities issued or guaranteed by agencies or instrumentalities of the United States government
or federal agency obligation repurchase agreements, and bankers' acceptance issued by a bank
that is a member of the federal deposit insurance corporation.
Mutual funds composed entirely of investment vehicles that are legal for direct investment by a
school district.
Investment and Deposit Risk
Investment pools, as authorized by the surplus funds investment pool act, composed entirely of
instruments that are legal for direct investment by a school district.
- 33 -
4.
General
Fund
Building
and Site
Fund
Nonmajor
and Other
Funds Total
Receivables
25,699$ 745$ 21,532$ 47,976$
6,012,290 - 256,200 6,268,490
6,037,989$ 745$ 277,732$ 6,316,466$
-$ -$ 220,172$ 220,172$ Noncurrent portion
Custodial Credit Risk - Investments - For an investment, custodial credit risk is the risk that, in the
event of the failure of the counterparty, the District will not be able to recover the value of its
investments or collateral securities that are in the possession of an outside party. The District
minimizes this risk by pre-qualifying the financial institutions, brokers/dealers, intermediaries and
advisors to be in compliance with the requirements set forth in the District's investment policy. Of
the above external investment pool the District's custodial credit risk exposure can not be
determined because the contains mutual funds which do not consist of specifically identifiable
securities.
Concentration of Credit Risk - State law limits allowable investments but does not limit
concentration of credit risk as identified above. The District's investment policy does not have
specific limits in excess of state law on concentration of credit risk.
RECEIVABLES
Receivables as of year-end for the District's individual major funds and the nonmajor and other
funds in the aggregate, including the applicable allowances for uncollectible accounts, are as
follows:
Trade
Intergovernmental
Credit Risk - State law limits investments to specific government securities, certificates of deposits
and bank accounts with qualified financial institutions, commercial paper with specific maximum
maturities and ratings when purchased, bankers acceptances of District's specific financial
institutions, qualified mutual funds, and qualified external investment pools as identified above.
The District's investment policy does not have specific limits in excess of state law on investment
credit risk. The ratings for each investment are identified above for investments held at year end.
Custodial Credit Risk - Deposits - Custodial credit risk is the risk that in the event of a bank failure,
the District’s deposits may not be returned. The District minimizes this risk by pre-qualifying the
financial institutions, broker/dealers, intermediaries, and advisors to be in compliance with the
requirements set forth in the District's investment policy. As of year end, $4,067,665 of the
District’s bank balance of $4,352,356 was exposed to custodial credit risk because it was uninsured
and uncollateralized.
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Total governmental activities
- 34 -
5.
Balance Balance
July 1, June 30,
2008 Additions Dispositions 2009
Governmental activities
344,401$ -$ -$ 344,401$
- 227,134 - 227,134
344,401 227,134 - 571,535
51,040,828 242,322 - 51,283,150
21,140,840 151,592 45,683 21,246,749
72,181,668 393,914 45,683 72,529,899
(19,015,794) (1,163,461) - (20,179,255)
(12,306,581) (1,651,745) (45,683) (13,912,643)
(31,322,375) (2,815,206) (45,683) (34,091,898)
40,859,293 (2,421,292) - 38,438,001
41,203,694$ (2,194,158)$ -$ 39,009,536$
Land
capital assets
Depreciable capital assets:
capital assets, net
and equipment
Building furnishings
Depreciation expense was reported as unallocated on the statement of activities because the
District considers its assets to impact multiple activities and allocation is not practical.
Governmental activities
Total capital assets
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Building and improvements
Building furnishings
and equipment
Nondepreciable capital assets:
Construction in progress
CAPITAL ASSETS
A summary of changes in capital assets activity for the year ended June 30, 2009 was as follows:
Total nondepreciable
Accumulated depreciation:
Building and improvements
Total depreciable capital assets
Total accumulated depreciation
being depreciated, net
- 35 -
6.
Transfers Transfers
In
Transfers
Out
Interfund Transfers
189,961$ 771,612$
Building and Site Fund - 315
Community services special revenue 47,667 38,750
Food service special revenue - 60,000
Athletics special revenue 723,402 90,668
1995 Bond issue debt service 315 -
Total $ 961,345 $ 961,345
7.
Balance Balance Due
July 1, June 30, Within
2008 Deletions 2009 One Year
1995 General
Obligation Bonds due
in a final installment of
$2,220,000 plus
interest ranging from
5.50% to 6.75%
through 2010 $ 4,295,000 $ 2,075,000 $ 2,220,000 $ 2,220,000
Transfers primarily reflect subsidies allocated from the General Fund.
Interfund balances primarily reflect balances utilized to facilitate appropriate cash flow for
operations. The composition of interfund balances is as follows:
Nonmajor Funds:
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
$ -
LONG-TERM LIABILITIES
The District issues bonds, notes, and other contractual commitments to provide for the acquisition
and construction of major capital facilities and the acquisition of certain equipment. General
obligation bonds are direct obligations and pledge the full faith and credit of the District. Other
long-term obligations include notes payable for equipment purchases, compensated absences and
early retirement incentives. The following is a summary of long-term debt transactions of the
District for the year ended June 30, 2009:
General Fund
INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS
Additions
- 36 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Balance Balance Due
July 1, June 30, Within
2008 Deletions 2009 One Year
2005 General
Obligation Bonds due
in annual installments
ranging from $420,000
to $480,000 plus
interest ranging from
4.0% to 5.0% through
2015 $ 3,165,000 $ 405,000 $ 2,760,000 $ 420,000
2009 General
Obligation Bonds due
in annual installments
ranging from $65,000
to $4,895,000 plus
interest of 3.99%
through 2019 - - 12,345,000 65,000
2002 Refunding
General Obligation
Bonds due in annual
installments ranging
from $65,000 to
$1,805,000 plus
interest ranging from
3.35% to 4.2% through
2017 8,805,000 90,000 8,715,000 90,000
2003 Refunding
General Obligation
Bonds due in annual
installments ranging
from $1,325,000 to
$1,900,000 plus
interest ranging from
3.25% to 3.5% through
2012 2,690,000 - 2,690,000 -
$ -
-
-
12,345,000
Additions
- 37 -
MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Balance Balance Due
July 1, June 30, Within
2008 Deletions 2009 One Year
2008 Refunding
General Obligation
Bonds due in annual
installments ranging
from $1,090,000 to
$1,200,000 plus
interest ranging from
3.0% to 5.0% through
2017 $ 7,915,000 $ 65,000 $ 7,850,000 $ -
1998 School
Improvement Bonds
(Durant Settlement)
due in amounts ranging
from $22,365 to
$162,389 plus interest
at 4.76% through 2013 272,825 25,715 247,110 26,938
Equipment Note
Payable due in
amounts ranging from
$2,415 to $7,539
including interest
ranging from 3.27% to
8.258% through 2013 144,002 18,239 125,763 26,197
Subtotal installment
debt 27,286,827 2,678,954 36,952,873 2,848,135
Compensated
absences 520,900 - 560,273 560,273
Deferred issuance
discounts (22,625) - (4,873) (17,752) -
Deferred issuance
premiums 370,269 - 77,478 292,791 -
Deferred loss on
refunding (472,971) (123,180) (349,791) -
Net installment debt 27,682,400 2,628,379 37,438,394 3,408,408
Early retirement
incentives 1,267,325 302,956 964,369 326,682
Total long-term debt $ 28,949,725 $ 2,931,335 $ 38,402,763 $ 3,735,090
-
-
$ -
-
39,373
12,384,373
$ 12,384,373
-
Additions
12,345,000
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MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
Interest
2010 1,490,879$
2011 1,352,239
2012 1,245,890
2013 1,188,919
2014 1,009,400
2015-2019 2,740,581
Total 9,027,908$
8.
9.
RISK MANAGEMENT
Plan Description
3,046,226
RETIREMENT PLAN
2,848,135$
3,319,486
Principal
21,270,000
The District contributes to the Michigan Public School Employees’ Retirement System (MPSERS),
a cost-sharing multiple-employer defined benefit pension plan administered by the State of
Michigan Department of Management and Budget, Office of Retirement Systems. MPSERS
provides retirement, survivor and disability benefits to plan members and beneficiaries. Benefit
provisions are established and may be amended by state statute.
36,952,873$
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction
of assets; errors and omissions; injuries to employees and natural disasters. During the year ended
June 30, 2009, the District carried commercial insurance to cover losses related to these risks. The
District has had no settled claims resulting from these risks that exceeded their commercial
coverage in any of the past three fiscal years.
3,079,530
Following is a summary of future bond and loan principal maturities and interest requirements:
In prior years, the District had defeased certain bond issues by creating irrevocable trust funds.
New debt has been issued and the proceeds have been used to purchase U.S. government securities
that were placed in the trust funds. The investments and fixed earnings from the investments are
sufficient to fully service the defeased debt until the debt is called or matures. For financial
reporting purposes, the debt has been considered defeased and therefore removed as a liability from
the District’s long-term debt. As of June 30, 2009, the amount of defeased debt outstanding, but
removed from the long-term debt, amounted to $19,600,000.
The Office of Retirement Systems issues a publicly available financial report that includes
financial statements and required supplementary information for MPSERS. That report may be
obtained by writing to Michigan Public School Employees Retirement System, 7150 Harris Drive,
P.O. Box 30026, Lansing, Michigan 48909 or by calling (517) 322-6000.
3,389,496
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MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
10.
Member Investment Plan (MIP) members enrolled in MIP prior to January 1, 1990 contribute at a
permanently fixed rate of 3.9% of gross wages. Members first hired between January 1, 1990 and
June 30, 2008 contribute at the following graduated permanently fixed contribution rate: 3.0% of
the first $5,000; 3.6% of $5,001 through $15,000; 4.3% of all wages over $15,000. Members hired
after July 1, 2008 contribute at the following graduated permanently fixed contribution rate: 3.0%
of the first $5,000; 3.6% of $5,001 through $15,000; 6.4% of all wages over $15,000. Basic Plan
members make no contributions. The District is required to contribute the full actuarial funding
contribution amount to fund pension benefits, plus an additional amount to fund retiree health care
benefits on a cash disbursement basis.
During the year ended June 30, 2009, the District recorded expenses of approximately $40,000
relating to this plan. Estimated amounts under this and previous severance plans have been
accrued as of June 30, 2009.
The District negotiated a voluntary severance retirement incentive plan, which is offered to
teachers with 10 or more years of service with the District. Eligible employees who elect to retire
under the plan will receive a lump sum contribution into a 403(b) account in the amount of $1,000
for each full-time year of service with the District. This amount is reduced by any previous non-
elective employer contributions made to the teacher’s 403(b) account and shall not exceed $12,500.
The severance plan also includes an amount of up to $3,000 per year to be contributed as a non-
elective contribution into a 403(b) account or a Voluntary Employee Benefit Account for up to five
years after retirement. This benefit is intended to offset any out of pocket costs incurred by the
transition to the MPSERS retirement health plan.
Other Post-Employment Benefits
Post-employment benefits for health, dental, vision and hearing insurance are available at
retirement through the State Retirement Plan. Employees eligible for retirement benefits can use a
portion of those benefits to purchase these insurance benefits. Mona Shores Public Schools has no
obligation for post-employment benefits after an employee terminates employment.
The rate from July to September was 16.72%, and from October through June was 16.54% of
covered payroll. The contribution requirements of plan members and the District are established
by Michigan State statute and may be amended only by action of the State Legislature. The
District's contributions to MPSERS for the years ended June 30, 2009, 2008, and 2007 were
approximately $3,311,000, $3,318,000, and $3,504,000, respectively, equal to the required
contributions for each year.
Funding Policy
SEVERANCE / RETIREMENT INCENTIVE PLAN
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MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
11.
12.
13.
763,199$
Adjustments:
Purchases under capitalization
policy limits (142,151)
Net assets capitalized 621,048$
14.
Since
Inception
Revenues 16,726,697$
Expenditures 4,928,149
The Building and Site Fund includes capital project activities funded with bonds issued after May
1, 1994. The following is a summary of the revenues and expenditures in the fund.
The District participates in federally assisted grant programs, which are subject to program
compliance audits by the grantor or its representatives. Such audits of these programs may be
performed at some future date. The amount, if any, of expenditures which may be disallowed by
the granting agencies cannot be determined at this time, although the District expects such
amounts, if any, not to be material.
Total capital outlay as reported in the governmental funds
CAPITAL PROJECTS FUNDS
CONTINGENCIES
ENDOWMENT FUNDS
The District holds funds in a trustee capacity which are restricted for scholarships and school
projects. At June 30, 2009, $16,332 was held by the District under its capacity as trustee.
Federal Grant Programs
Capital outlay expenditures for governmental funds differ from amounts capitalized. The
differences are detailed as follows:
RECONCILIATION OF CAPITAL OUTLAY
554,568
Year ended
June 30, 2009
For this capital project, the District has complied with the applicable provisions of Section 1351a
of the Michigan School Code.
12,348,588$
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MONA SHORES PUBLIC SCHOOLS
Notes to Financial Statements
15.
16.
*****
RESTATEMENT
Beginning net assets were increased by $272,825 to adjust amounts due from other governments in
connection with the Durant bonds.
BOND SINKING FUND
The Bond Sinking Fund records capital project activities funded with Sinking Fund millage. For
this fund, the District has complied with the applicable provisions of section 1212(1) of the
Revised School Code and the applicable section of the Revised Bulletin for School District Audits
of Bonded Construction Funds and of Sinking Funds in Michigan.
- 42 -
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
NONMAJOR GOVERNMENTAL FUNDS
MONA SHORES PUBLIC SCHOOLS
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2009
Special Revenue
Community Food Memorial
Services Service Athletics Scholarship
Assets
Cash and investments 1,507$ 46,645$ 10,532$ 16,332$
Accounts receivable 18,210 - - -
Due from other governmental
units - 9,090 - -
Inventory - 1,264 - -
Total assets 19,717$ 56,999$ 10,532$ 16,332$
Liabilities
Accrued expenses 2,047$ (89)$ 10,532$ -$
Deferred revenue 17,670 - - -
Total liabilities 19,717 (89) 10,532 -
Fund balances
Reserved for inventory - 1,264 - -
Unreserved, undesignated - 55,824 - 16,332
Total fund balances - 57,088 - 16,332
Total liabilities
and fund balances 19,717$ 56,999$ 10,532$ 16,332$
- 43 -
MONA SHORES PUBLIC SCHOOLS
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2009
Special Revenue
District Bond Durant Bond Bond Capital
Issues Issue Sinking Projects Total
670,528$ -$ 1,052,745$ 7,758$ 1,806,047$
3,322 - - - 21,532
- 247,110 - - 256,200
- - - - 1,264
673,850$ 247,110$ 1,052,745$ 7,758$ 2,085,043$
-$ -$ -$ -$ 12,490$
- 247,110 - - 264,780
- 247,110 - - 277,270
- - - - 1,264
673,850 - 1,052,745 7,758 1,806,509
673,850 - 1,052,745 7,758 1,807,773
673,850$ 247,110$ 1,052,745$ 7,758$ 2,085,043$
Capital ProjectsDebt Service
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MONA SHORES PUBLIC SCHOOLS
Combining Statement of Revenue, Expenditures
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2009
Special Revenue
Community Food Memorial
Services Service Athletics Scholarship
Revenue
Local sources:
Property taxes -$ -$ -$ -$
Tuition 68,092 - - -
Investment income 646 900 254 -
Food sales, athletics
and recreation 14,992 620,224 108,933 -
Other 519,299 - - -
State sources - 47,227 - -
Federal sources - 561,557 - -
Total revenue 603,029 1,229,908 109,187 -
Expenditures
Current:
Recreational activities 611,946 - - -
Food service - 1,127,229 - -
Athletic activities - - 741,921 -
Debt service:
Principal - - - -
Interest expense and
other charges - - - -
Capital outlay - - - -
Total expenditures 611,946 1,127,229 741,921 -
Revenues over (under)
expenditures (8,917) 102,679 (632,734) -
Other financing sources (uses)
Transfers in 47,667 - 723,402 -
Transfers out (38,750) (60,000) (90,668) -
Total other financing
sources (uses) 8,917 (60,000) 632,734 -
Net change in fund balances - 42,679 - -
Fund balances, beginning of year - 14,409 - 16,332
Fund balances, end of year -$ 57,088$ -$ 16,332$
- 45 -
District Bond Durant Bond Bond Capital
Issues Issue Sinking Projects Total
3,954,952$ -$ 918,874$ -$ 4,873,826$
- - - - 68,092
28,703 - 3,399 328 34,230
- - - - 744,149
- - - 2,331 521,630
- 32,448 - - 79,675
- - - - 561,557
3,983,655 32,448 922,273 2,659 6,883,159
- - - - 611,946
- - - - 1,127,229
- - - - 741,921
2,635,000 25,715 - - 2,660,715
1,248,822 6,733 - - 1,255,555
- - 244,969 - 244,969
3,883,822 32,448 244,969 - 6,642,335
99,833 - 677,304 2,659 240,824
315 - - - 771,384
- - - - (189,418)
315 - - - 581,966
100,148 - 677,304 2,659 822,790
573,702 - 375,441 5,099 984,983
673,850$ -$ 1,052,745$ 7,758$ 1,807,773$
Capital ProjectsDebt Service
- 46 -
AGENCY FUND
MONA SHORES PUBLIC SCHOOLS
Statement of Changes in Assets and Liabilities
Agency Fund
For the Year Ended June 30, 2009
Balance Balance
July 1, June 30,
2008 Increases Decreases 2009
Assets
Cash and investments 315,793$ 809,312$ (808,816)$ 316,289$
Liabilities
Due to student groups 315,793$ 809,312$ (808,816)$ 316,289$
- 47 -