ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Financial Statements and Schedules June 30, 2016   Contents Introductory Section Principal Officials Superintendent’s Letter of Transmittal Independent Auditor’s Report i ii - iv 1-3 Required Supplementary Information - (Part I) Management’s Discussion and Analysis 4 -11 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position Statement of Activities 13 - 14 15 - 16 Fund Financial Statements Governmental Funds Balance Sheet Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities Proprietary Funds Statement of Net Position Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows Fiduciary Funds Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position Notes to Financial Statements 18 19 20 - 21 22 23 24 25 - 26 27 28 30 - 78 Required Supplementary Information - (Part II) Budgetary Comparison Schedule - General Fund 80 - 81 Contents (Continued) Required Supplementary Information - (Part II) - Continued Budgetary Comparison Schedule - Pass-Through Fund Budgetary Comparison Schedule - Federal Grant Fund Other Post-Employment Benefits Information Schedule of the School Board’s Proportionate Share of Net Pension Liability Schedule of School Board Pension Contributions Notes to Required Supplementary Information 82 - 83 84 - 85 86 87 88 89 Other Supplementary Information Combining and Individual Fund Statements Non-Major Governmental Funds - By Fund Type Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances 91 92 Non-Major Special Revenue Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances 93 94 Non-Major Capital Projects Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances 95 96 Proprietary Fund Type - Internal Service Funds Combining Statement of Net Position Combining Statement of Revenues, Expenses and Changes in Net Position Combining Statement of Cash Flows 97 98 99 Fiduciary Fund Type - Trust Funds Combining Statement of Assets and Liabilities Combining Statement of Changes in Assets and Liabilities 100 101 Fiduciary Fund Type - Agency Funds Combining Statement of Assets and Liabilities Combining Statement of Changes in Assets and Liabilities 102 103 Schedule of Compensation, Benefits and Other Payments to Agency Head 104 Statistical Schedules Government-Wide Expenses by Function Government-Wide Revenues General Fund Expenditures by Function 106 107 108 - 109 Contents (Continued) 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 110 - 111 Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance 112 - 113 Schedule of Expenditures of Federal Awards 114 - 115 Notes to Schedule of Expenditures of Federal Awards 116 Schedule of Findings and Questioned Costs 117 Summary Schedule of Prior Audit Findings 118 Summary of Charter School Findings 120 - 134 Independent Accountant’s Report on Applying Agreed-Upon Procedures 135 - 138 Schedules Required by Louisiana State Law (R.S. 24:514 Performance and Statistical Data) General Fund Instructional and Support Expenditures and Certain Local Revenue Sources Schedule 1 140 Education Levels of Public School Staff 2 141 Number and Type of Public Schools 3 142 Experience of Public Principals, Assistant Principals and Full Time Classroom Teachers 4 143 Public School Staff Data: Average Salaries 5 144 Contents (Continued) Schedules Required by Louisiana State Law (R.S. 24:514 Performance and Statistical Data) - Continued Class Size Characteristics 6 145 Louisiana Educational Assessment Program (LEAP) 7 146 Graduation Exit Exam (GEE) 8 147 iLEAP Test Results 9 148 Principal Officials School Board Members John Brown, Sr. Cynthia Cade District 1 District 2 Sarah Usdin Leslie Ellison District 3 District 4 Seth Bloom District 5 Woody Koppel Nolan Marshall, Jr. District 6 District 7 Vice President President Officers are elected for a term of one calendar year by Board Members. The 2016 officers are shown above. Administrative Officials Dr. Henderson Lewis, Jr. Superintendent Michelle Blouin-Williams Chief Administrative Officer Mary K. Garton Chief Portfolio Officer Stanley C. Smith Chief Financial Officer i 1-. The and Beard Members Ufleana Pariah Eehe-zil Heard ill-11:1 Act?l'l was passed int-a lana- in earls.- itestabliahrd a histnrie [or the ?sh-ans Parish Selmal Heard re- rede?ne leeal everatghtefall puhIie animal: in New ?rf-Hna. more [harm ID years: a?er lire tragedy-11F Hurricane Katrina. sits Superintmdent. Act 9 has charged mt: willt purcsm?ngaplm mar details haw this task ul'uni Fsrl'nml'r: RED sch-ml: achutlls urn-d: lucal awrsigm I-I-ill Nauru-n July I. EDIE. Much hues in the Immune ul'putlli: :duu?nrk in New Drlur-a em: 1h: pas-1 decade. FirstarHi bur nude-1mm: perl?hm'nina: at hijhrr lr'nrla than awn an mu: Iceslsmigh ache-3 graduation rams-s. and alter measure-s. Ems wages-s has dranarieallj- eupaeed 1hr: rear of sin: State. al1lmugls we Elli]! much tugn in Incl-rm: arhirs-nmr? mm the rust nFIl1e sure and rLa1iI: n, We and: ill-Isa: grunts b1.- several em: val tits. Includlng: chum: ltI-r empowerment ell mill-ml! incl Eds-3m. atria-1: aulhm'izalim and arruumnhil?y standards Fur armband a fun-us equity so that more rcatrurr? are pres-Mud Far Elm-El: stud-urns when nus-tad additimal supperla ?ir'e belies-1: rims:- 5am: valu? Iwill Fishtail nus: sed1nlb'lstluwaa'? flu-pests: in ll'us Fulune. ii is it privilegcm land UFSB and ear 1hrtlugh a period all unique help the ?sturc alpulsliit: education In New ?rleana Distriet sand-mt enrollment I?ar 1lse ELI Isa-11 sehaal year ins Increased Ia liu?d studenla. The ?rk?ana Pariah Eeheel liner-:1 Eris: [Euju Hermit :uaditierral} mural-hi. I'm- mljiuiir-aleul :h-n-l lune ?wreiH-l-sl m-l-imle 1' Th: UPEE cmrdinarcs spacial matte?animal services far nun-public selmh- - The pros-ids: child nutrilic-n services Far l? animal aim: in Uri-tans Peri-m. DEM [?53 Fl AN UNUS- - Dalia mn?r released by the Lnuisiann tIl' Eduentim mamlhatth: cits-"s Dialrict Perfarmanee Sun": has inure-sad by 5 paints. DLI is new 345'. This awn: is inclusiu: ultra-Ill sh: Film-cry Salsa-3 Diauim and Erie-aria Parish Eel-reel Haerd'a Eehaela. I 13 HF 15 arhu-ula ?Ht mandrel presses: paints. including nun which unis-1rd til-I: Minimum malt-l: 91' It]. 1- 22 2? wheels which received letter yadlss this year war: A. Bar rises-a1 I- 25- seht-n-Is smith accountability seams d1i5 and lass. 15 selteals. Jrad inn-eased til-'5 stares. Our eiry's eel-sen rate is new 15-5 pereerrL. up [ram Tl? percent laar year. The cits-amid?: pawntagc tIFgrad: 1-H: siudents scaring "marry" aha-rem ELA and rrta1h has- increased tu- pur?m, up Frurn 23: percent in 3m 5. - 5434 Ell-1 55m 3520 General: Da?aullc ch Drlaans. Ltlu-slana T01 1:1- AND CGLLEGE and CA REEFI READINESS- - Nh?r?vu ul'llachas null-Ill rut-ind maliciml -:Ir highly :f?acli'n: Campus?: wings. {Ct-mph.? is the mitt-'5 edut-attii amt-M and mum deaigued HI ?pl'iil'r?idl: Emit-3mm ?Ill-I regular. maningl'ul I'bEdI'uuiv: L'l1 ch'i'urrnan-a-EJ - Urn: hmdred percenl aria-chat are utilizing innruriiun. CDMPET ?v'E GRAN T5 REC EVED list C?lltl': (ii-ant Editin- and Balanced and - Elia-rm Prujt-ci Lad til-t: Grant - Elite-I: Up ?mnl - Edumitln Far Humd?s Childrm and Hum - Iligh Casi Finn-itch IDEA. MFP. Elf-F - Inmti? tun - Grant - Climate and TrunEIiImatinri - SHIV-15 Read-um Cum Uta-ii - Tilli Lita-um [mm Izidumiunni - W?i'l?ll .IID - Tuna churn-r Mania ?'prcs-t Mind-my and Fcuridmi-n-n Putnam A?dmy. For 1min EU i?E?ib - Eha?Et?J- have Int-en Wmud 54.11am ?-l'lill'd 1n 11p!" 'm Fulun: 3.1mm - Ema-Yul Mum HIHJF Type Ehau'lu' mm In E-chnzii ?t'qrd during 5:th blur - LEUlir? Mar}.- IJ. L'Dgi'uil. Lain:- aim Nh'r Ht. L'apihu aibd Hii'i' Hmaimnuu High Eat-ml DPERATIEIHS AND FINANCE ch building dadicniim: For Marion High 5Ci?l-Wi. Lilt-i: Fturcsi Eltmunlary S'Dil?lili. ?it-urge Wail-lineman fill-ref High 5mm]. 51mm Flam-1 5 :th aritl Euphii: E. Wright 5 :th i?tn nitliLim'tnl $25? million Ella-cmcd 1hr th-r. ":qu pin): nFnc'n n: mum-ltd crinluimtlm'i pitting?. I An additional 519.1 millitln [mm ihi: I.I.-il gt: Inward the nut phase til" cunstruclimi a?lci?ted wiih Tul'urhixi'u'nmls Fur 111i: ihlinwing sci-mix.- Lulu: Ana Him: Tach Early High School. Mellon-ugh 11 Literacy Chart-2t- Lyme J-?rantm die is ?rI-mnnt- tm-d ?nhmon . Fit?alimd a nun uni" i: $545.9 million. :1 Increase nf' 5 111.41 millim I'mm put-inns. ymar million. .. Within list-til 3.2-3.1- Eap?'idjlur?'? urt Edam] and state awards. lulal?d Hull mitIi-m-i. The: expendth-H school Enid-mi: and ntli-putIIi-I: Elld?'l'lt?. I Capital prtujeu dhpt?u?tllf? during. ?scal year 211m. It: Biz-it: Mlj?l? mum-trim and mini: iu'ul Fruit-m 1 us - 53-1- E?d EEPB - 3531:- General Drive - New ?rlean? - 7'01 Th: Pariah Emu-3 Bun-arid ID instill a mrld-GIME public :ducati-Jn 53mm than is child- and suppuns Iiu: of m: Ell} arr-1m il?pnc?hlly. II3 .1 Fl. R. Dr. l-Etml?snn Illa-is. .Ir. Emir-1:151:11 uIS-chmla u: - 5M SCI-I1 5'51"} I 3520 Guneml DEG-anus Haw Brie?an:- Lnulaana . 1-4 Independent Auditor’s Report To the Orleans Parish School Board New Orleans, Louisiana Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the Orleans Parish School Board (School Board) as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the School Board's basic financial statements as listed in the accompanying table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the following discretely presented component units which represent 73%, 71% and 70%, respectively, of the assets, net position, and revenues of the aggregate discretely presented component units: Bricolage Academy, Cypress Academy, Encore Learning, Foundation Preparatory, Homer A. Plessy Community School, Hynes Charter School, InspireNOLA Charter Schools - Alice M. Harte Elementary, Edna Karr High School and Wilson Charter School, Lusher Charter School, New Orleans Charter Science and Math High School, Robert Russa Moton Charter School, and Warren Easton Senior High School. These financial statements were audited by other auditors whose reports thereon were furnished to us, and our opinion, insofar as it relates to the amounts included for the discretely presented component units, is based solely on the report of the other auditors. 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 involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. 1 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the businesstype activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Orleans Parish School Board as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison, other post-employment benefits information, and net pension liability information on pages 4 through 11 and 80 through 89 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 (GASB) who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Orleans Parish School Board’s basic financial statements. The introductory section, the schedules in the other supplementary information section as listed in the table of contents, and statistical schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedules in the other supplementary information section as listed in the table of contents are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedules in the other supplementary information section as listed in the table of contents are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical schedules have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2016 on our consideration of Orleans Parish School Board’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 in considering the School Board’s internal control over financial reporting and compliance. Emphasis of a Matter As discussed in Note 2 to the financial statements, the School System adopted new accounting guidance, GASB Statement No. 72, Fair Value Measurement and Application, for the year ended June 30, 2016. The adoption of this standard required additional disclosures about fair value measurements. Our opinion is not modified with respect to this matter. A Professional Accounting Corporation Metairie, LA December 20, 2016 3 Overview and Analysis of Financial Activities The Orleans Parish School Board (School Board or OPSB), as the financial manager of the Orleans Parish School System, offers the readers of these financial statements an overview and analysis of the financial activities of the School Board. This overview and analysis is designed to assist the users of these financial statements to focus on significant issues, identify significant changes in the School Board’s financial position, both at the government-wide and fund levels, and highlight material changes from the School Board’s approved budget. Our discussion and analysis of the School Board’s financial performance includes a section entitled Financial Highlights which provides an overview of its financial activities for the fiscal years ended June 30, 2016 and 2015. This discussion and analysis should be read in conjunction with the Annual Financial Report’s Letter of Transmittal in the Introductory Section, the School System’s Financial Statements (Financial Section) and the Notes to the Financial Statements. Financial Highlights • As of June 30, 2016, the School Board reported a consolidated net position of $556.9 million, which is an increase of $173.4 million from the June 30, 2015, balance of $383.5 million. • As of June 30, 2016, the School Board reported a General Fund balance of $69.3 million. This represents an increase of $21.6 million from the June 30, 2015, balance of $47.7 million. The increase is primarily due to a settlement from BP Oil for $19.3 million. Expenses also increased pursuant to a Cooperative Endeavor Agreement with the Recovery School District (RSD) stipulating a $1.3 million contribution to city-wide services for exceptional needs funding. • For fiscal year 2016, Ad Valorem Tax Revenues, including the gross up for fees, totaled $158.3 million. This represents an increase of $10 million from the prior year. • Sales Tax Revenues totaled $127.8 million for the fiscal year 2016, which represents an increase of $4.3 million from the prior year. • The Minimum Foundation Program (MFP) distribution from the State of Louisiana totaled $64.4 million for fiscal year 2016. Louisiana funds public education through a block grant known as the Minimum Foundation Program, or MFP. The MFP formula is developed and approved annually by the Louisiana State Board of Elementary and Secondary Education. • Within fiscal year 2016, expenditures on Federal and State awards totaled $102.3 million. The largest grants were as follows: (1) U.S. Department of Homeland Security (FEMA Disaster Relief Program) = $71.2 million; (2) U.S. Department of Education, No Child Left Behind, Title I = $15.9 million and (3) U.S. Department of Education, Individuals with Disabilities and Exceptionalities, IDEA Part B = $4.9 million. These expenditures benefit OPSB students, OPSB charter school students and non-public students. • Principal payment on the General Obligation Bonds totaled $9.9 million. The Qualified School Construction Bond (QSCB) is required to make an annual deposit to a sinking fund for maturation. The contribution in fiscal year 2016 was $11.9 million. Interest payments for both bonds totaled $2.9 million. • As of June 30, 2016, the School Board had total Long-Term debt of $234.5 million. This is comprised of the following: (1) Bonds totaling $130.7 million; (2) Bond Premiums of $3.5 million; (3) OPEB Obligation payable of $489,000; (4) Pension Obligation payable of $65.5 million; (5) Compensated absences of $2.6 million and (6) Claims payable of $31.7 million. 4 • As of June 30, 2016, the School Board had a fund balance of $56.1 million in its Debt Service funds. The components are as follows: (1) General Obligation Bonds of $21.7 million and (2) QSCB Bonds of $34.4 million. These funds are dedicated by Board action to the repayment of the related outstanding debt. • As of June 30, 2016, the School Board had a net investment in capital assets, book value less accumulated depreciation, of $436.6 million. This net investment does not include property transfers from the RSD. The long-term debt plus accrued interest on these capital assets totaled $135.1 million. The difference between the net investment in capital assets, net of related debt represents a surplus of approximately $305.9 million. • Capital project expenditures during fiscal year 2016, for both major construction and repair and maintenance projects totaled $45.9 million. • At June 30, 2016 the component units (i.e., the seventeen charter schools) had a net position of $7.2 million. Additionally, revenue for the current fiscal year totaled $138.6 million. Using this Annual Financial Report This discussion and analysis is intended to serve as an introduction to the School Board’s basic financial statements. The basic financial statements consist of the following: (1) Government-Wide Financial Statements; (2) Fund Financial Statements; (3) Notes to the Financial Statements and (4) Supplementary Financial Information. Government-Wide Financial Statements (pages 13 through 16) include the Statement of Net Position and Statement of Activities, which provide information about the activities of the School Board as a whole and present a longer-term view of the School Board’s finances. In summary, the Government-Wide Financial Statements show the results of operations and financial position using the total economic resources measurement focus and the accrual basis of accounting which emphasizes the long-term financial picture and are very similar to the financial statements of the private sector. The Fund Financial Statements (pages 18 through 28) represent information for three fund categories governmental, proprietary and fiduciary. Financial statements for governmental funds tell how we financed our services in the short-term as well as what remains for future spending. These fund statements provide the reader with some insight into the School Board’s overall financial health. In short, the fund-level financial statements show the results of operations and financial position using the current financial resources measurement focus and the modified accrual basis of accounting, emphasizing the change in fund balances as a result of the current year’s operations, as well as the amount of resources available to spend. Fund Financial Statements also report the School Board’s operations in more detail than the Government-Wide Financial Statements by providing information about the School Board’s most significant funds - such as the General Fund, Pass-Through Fund, General Obligation Bond Fund, Hurricane Katrina Restoration Fund, Capital Projects Fund, Facilities Preservation Fund and the Federal Grant Fund. The Governmental Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balances include the major funds as well as an aggregate of the remaining funds that report general government operations. The School Board maintains two types of Proprietary Funds. The Enterprise Fund is used to report the same functions presented as business-type activities in the Government-Wide Financial Statements. An enterprise fund was established to account for the rental receipts and operating costs of a five story building purchased. Another enterprise fund, which represents a blended component unit, was established to facilitate tax credit financing for the construction and renovation of school buildings as described in Note 22. The Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the School Board’s major functions/funds. The School Board uses internal service funds for its employee health insurance, retiree health insurance and workers’ compensation. Because these services predominantly benefit the governmental rather than business-type functions, they are included within governmental activities in the Government-Wide Financial Statements. 5 The Statement of Fiduciary Net Position and the Statement of Changes in Fiduciary Net Position provide financial information about activities for which the School Board acts solely as an agent for the benefit of students and parents. Other sections include Notes to the Financial Statements (pages 30 through 78) and certain Required Supplementary Information (pages 80 through 89). Included in the Required Supplementary Information is a comparison of the General Fund budget with actual results on pages 80 through 85. Over the course of the year, the School Board revises its budget as it attempts to deal with unexpected changes in revenues and expenditures. Reporting on School Board as a Whole Government-Wide Financial Analysis The following analysis focuses on the Statement of Net Position (Table 1) and Statement of Activities (Table 2) of the School Board’s governmental and business-type activities: Table 1 Condensed Comparative Statement of Net Position (In Thousands) At. June 30, 2016 and 2015 Governmental Activities 2016 2015 Current and Other Assets Capital Assets, Net Loan Receivable and Accrued Interest Long-Term Receivable RSD $ Total Assets Deferred Outflows of Resources Current and Other Liabilities Long-Term Liabilities Total Liabilities Deferred Inflows of Resources Net Position: Net Investment in Capital Assets Restricted Unrestricted Total Net Position $ Business-Type Activities 2016 2015 Total 2016 2015 Increase (Decrease) Amount Increase (Decrease) Percent 257,199 $ 429,525 109,899 213,840 $ 349,051 126,554 5,260 $ 7,080 67,834 - (12,642) $ 6,845 39,094 - 262,459 $ 436,605 67,834 109,899 201,198 $ 355,896 39,094 126,554 61,261 80,709 28,740 (16,655) 30.45 22.68 73.52 (13.16) 796,623 689,445 80,174 33,297 876,797 722,742 154,055 21.32 % 14,443 14,088 - - 14,443 14,088 355 96,615 234,538 99,622 244,902 217 - 122 - 96,832 234,538 99,744 244,902 (2,912) (10,364) (2.92) % (4.23) % 331,153 344,524 217 122 331,370 344,646 (13,276) (3.85) % 2,951 8,657 - - 2,951 8,657 (5,706) nm 404,272 131,787 (59,097) 329,573 115,894 (95,115) 7,080 72,877 6,845 26,330 411,352 131,787 13,780 336,418 115,894 (68,786) 74,934 15,893 82,566 22.27 % 13.71 % (120.03) % 476,962 $ 350,352 $ 79,957 $ 33,175 $ 556,919 $ 383,526 $ 173,393 45.21 % % % % % nm The School Board’s net position was $556.9 million at June 30, 2016, and $383.5 million at June 30, 2015. Of which, $13.8 million and $(68.8) million were unrestricted at June 30, 2016 and 2015, respectively. Restricted net position is reported separately to show legal constraints from debt covenants, capital projects and enabling legislation that limit the School Board’s ability to use the net position for day-to-day operations. As of June 30, 2016 and 2015, the restricted net position amounted to $131.8 million and $115.9 million, respectively. Current and other assets increased from June 30, 2015 to June 30, 2016, by $61.3 million. 6 Net capital assets increased from June 30, 2015 to June 30, 2016, by $80.7 million primarily due to the acquisition of a new school site and the completion of construction on new school sites to accommodate the city’s master plan. (See Notes 2 and 6, Capital Assets in the accompanying financial statements for additional discussion regarding depreciation methods and related accumulated depreciation). The June 30, 2016, financial statements reflect $109.9 million in capital assets transferred to the RSD as a long-term receivable. This is a $16.7 million decrease from fiscal year 2015 due to the transfer of eighteen sites back to the School Board from the RSD. These transfers will continue over the next few years as the enactment of school re-unification progresses. Liabilities decreased by $13.3 million reflecting an improved accounts payable process. Long-term liabilities decreased by $10.4 million. This net change is composed of decreases in most long-term obligations and a decrease in Compensated Absences totaling $5.0 million, $4.2 million of which pursuant to a review of internal policy and data. Claims Payable increased by a negligible amount. Table 2 Condensed Comparative Statement of Activities (in Thousands) For the Years Ended June 30, 2016 and 2015 Governmental Activities Revenues Program Revenues Charges for Services Operating Grants Capital Grants Governmental Activities Business-Type Activities 2016 2015 2016 2015 $ 685 $ 33,570 75,236 842 $ 37,038 63,514 1,433 $ - 1,485 $ - Total 2016 2,118 $ 33,570 75,236 2015 2,327 $ 37,038 63,514 Variance Increase (Decrease) Amount Variance Increase (Decrease) Percent (209) (3,468) 11,722 (8.98) % (9.36) % 18.46 % 7.82 % Total Program Revenues 109,491 101,394 1,433 1,485 110,924 102,879 8,045 General Revenues Ad Valorem Taxes Sales and Use Taxes State Revenue Sharing Interest and Investment Earnings Minimum Foundation Program (MFP) Donation of Capital Assets Gain on Disposal of Capital Assets Contributions and Donations Judgments Other General Revenues 158,311 127,844 2,691 76 64,378 43,359 20,499 14,756 148,299 123,557 2,760 65 56,597 70,629 8,320 868 22,839 5,670 - 360 14,631 - 158,311 127,844 2,691 944 64,378 43,359 22,839 5,670 20,499 14,756 148,299 123,557 2,760 425 56,597 70,629 14,631 8,320 10,012 4,287 (70) 519 7,781 (27,270) 8,208 5,670 20,499 6,436 Total General Revenues 431,914 410,227 29,377 14,991 461,291 425,218 36,073 8.48 % 511,621 $ 30,810 $ 16,476 $ 572,215 $ 528,097 $ 44,118 8.35 % Total Revenues $ 541,405 $ 6.75 3.47 (2.52) 122.09 13.75 (38.61) 56.10 100.00 100.00 77.35 % % % % % % % % % % 7 Table 2 (Continued) Condensed Comparative Statement of Activities (in Thousands) For the Years Ended June 30, 2016 and 2015 Governmental Activities Governmental Activities Business-Type Activities 2016 2015 2016 2015 Variance Increase (Decrease) Amount Total 2016 2015 Variance Increase (Decrease) Percent Functions/Program Instruction Regular Education Programs Special Education Programs Other Educational Programs Support Services Student Services Instructional Staff Support General Administration School Administration Business Services Student Transportation Services Central Services Plant Services Other Food Services Transfer to RSD Schools - Local MFP Transfer to Charter Schools - Local and State MFP Interest on Long-Term Debt Transfer to Other LEA Rental Properties 21,519 7,265 18,790 17,578 7,420 22,088 - - 21,519 7,265 18,790 17,578 7,420 22,088 3,941 (155) (3,298) 22.42 % (2.09) % (14.93) % 8,684 7,488 17,642 3,377 2,638 5,307 3,011 11,033 10,707 6,050 161,061 106,540 1,962 - 8,468 8,664 15,568 3,024 2,695 4,387 4,134 10,029 12,819 6,383 150,173 92,299 2,577 - 4,570 1,179 6,761 1,220 8,684 7,488 17,642 3,377 2,638 5,307 3,011 11,033 10,707 6,050 161,061 106,540 1,962 4,570 1,179 8,468 8,664 15,568 3,024 2,695 4,387 4,134 10,029 12,819 6,383 150,173 92,299 2,577 6,761 1,220 216 (1,176) 2,074 353 (57) 920 (1,123) 1,004 (2,112) (333) 10,888 14,241 (615) (2,191) (41) 2.55 (13.58) 13.32 11.68 (2.10) 20.97 (27.17) 10.01 (16.48) (5.22) 7.25 15.43 (23.86) (32.41) (3.37) Total Expenses 393,073 368,306 5,749 7,981 398,822 376,286 22,535 5.99% % Changes in Net Position Before Transfers 148,332 143,316 25,062 8,495 173,393 151,812 21,581 14.22 % (21,721) (10,662) 21,721 10,662 Changes in Net Position 126,611 132,653 46,782 19,158 173,393 151,812 Net position - June 30, 2015 350,351 217,698 33,175 14,017 383,527 231,715 Net Position - June 30, 2016 $ 476,962 $ 350,351 $ 79,957 $ 33,175 $ 556,920 $ Transfers - - 21,581 % % % % % % % % % % % % % % % - % 14.22 % 383,527 Total revenues for all governmental and business-type activities for the fiscal years ended June 30, 2016 and June 30, 2015, were $572.2 million and $528.1 million, respectively. The increase in total revenue in 2016 compared to 2015 is due to significant increases in Ad Valorem Taxes, Sales and Use Tax and MFP revenues. A judgment award from BP Oil for $19.3 million also contributed to said increase. These increases were offset somewhat by decreases in Donations of Capital Assets. As reported in the Statement of Activities (Table 2) the total cost of all governmental and business-type activities for the fiscal years ended June 30, 2016 and June 30, 2015, were $398.8 million and $376.3 million, respectively. The overall increase is mainly due to Transfers to the RSD and charter schools. The transfer to the RSD schools represents their share of local revenues for the fiscal year based on the ratio of students serviced by each entity. The transfers to charter schools represent their share of state MFP and local revenue share based on their student population. The School Board continues to focus on the provisions of instructional and related support services aimed at all of its student population. 8 Some of the costs were funded by those who benefited from the programs or by other governments and organizations who subsidized certain programs as reflected in operating grants revenues. The School Board funded the remaining “public benefit” portion of our governmental costs with revenues from Ad Valorem Taxes and Sales and Use Taxes of $286.2 million for 2016 and $271.9 million for 2015. MFP funding provided $64.4 million for 2016 versus $56.6 million for 2015. State revenue sharing funded the remaining “public benefit” governmental costs. Table 3, Comparable Governmental and Business-Type Activities, reflects the gross cost of program services and the net costs after taking into account the program revenues for the governmental and business-type activities. General revenues (including tax revenues), investment earnings and unrestricted State revenues are used to support the net remaining costs of the School Board activities. Table 3 Comparable Governmental and Business-Type Activities (in Thousands) For the Years Ended June 30, 2016 Gross Cost of Services Description GOVERNMENTAL ACTIVITIES Regular Education Programs Special Education Programs Other Education Programs Student Services Instructional Staff Support General Administration School Administration Business Services Student Transportation Services Central Services Plant Services Other Food Services Transfer to RSD Schools - Local MFP Transfer to Charter Schools - Local and State MFP Interest on Long-Term Debt BUSINESS-TYPE ACTIVITIES Rental Properties Transfers to Other LEA TOTAL PRIMARY GOVERNMENT 2015 Net Cost of Services Gross Cost of Services Net Cost of Services $ 21,519 $ 7,265 18,790 8,684 7,488 17,642 3,377 2,638 5,307 3,011 11,033 10,707 6,050 161,061 106,540 1,962 5,367 (43) (8,821) (1,827) (2,068) 4,839 926 716 1,295 784 3,025 10,707 (882) 161,061 106,540 1,962 $ 17,578 $ 7,420 22,088 8,468 8,664 15,568 3,024 2,695 4,387 4,134 10,029 12,819 6,383 150,173 92,299 2,577 5,961 337 (7,505) (1,185) (2,164) 5,713 1,110 981 1,464 1,470 3,671 12,819 (812) 150,173 92,299 2,577 $ 393,073 $ 283,582 $ 368,306 $ 266,909 $ 1,179 $ 4,570 (254) 4,570 $ 1,220 $ 6,761 (265) 6,761 $ 5,749 $ 4,316 $ 7,981 $ 6,496 $ 398,822 $ 287,898 $ 376,287 $ 273,406 Overall, the net cost of services in fiscal year 2016 increased by $14.5 million. 9 Reporting on the Individual Funds Fund Financial Analysis Our analysis of the School Board’s major funds begins on page 18 of the basic financial statements. The Fund Financial Statements provide detailed information about the most significant funds - not the School Board as a whole. Some funds are required to be established by State law and by bond covenants. However, the School Board has established other funds for particular purposes (such as the Child Nutrition) to help it control, manage and reflect legal responsibilities for using certain taxes, grants and other funds (such as grants from the Department of Education). The School Board’s funds (governmental, proprietary and fiduciary) use the following accounting approach: Governmental Funds - All of the School Board’s services are reported in governmental funds. Governmental fund reporting focuses on funds flowing into and out of funds and the balances left at yearend that are available for spending. Said funds are reported using an accounting method called modified accrual accounting. The governmental fund statements provide a detailed short-term view of the School Board’s operations and the services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the School Board’s programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds, through reconciliation to the basic financial statements, is described on page 22 of the financial statements. Proprietary Funds - Proprietary funds for the School Board use the accrual basis of accounting, the same as on the government-wide statements. The Internal Service funds are used to account for the financing services provided by the School Board’s departments (such as employee health, retiree health and workers’ compensation). The Enterprise Fund is used to account for the rental receipts and operating costs of a five story building owned by the School Board as well as a blended component unit that facilities tax credit financing for the construction and renovation of school buildings. The Balance Sheet, Statement of Revenues Expenses and Changes in Net Position and Statement of Cash Flows reports are presented on pages 23 through 26 of the basic financial statements. Fiduciary Funds - The School Board is the trustee, or fiduciary, for its student activities funds. All of the School Board’s fiduciary activities are reported in the separate Statements of Assets and Liabilities and Changes in Assets and Liabilities on pages 27 and 28 of the basic financial statements, respectively. We exclude these activities from the School Board’s other financial statements because the assets cannot be utilized by the School Board to finance its operations. Capital Asset and Debt Administration Capital Assets The School Board’s capital assets include land, buildings and improvements, furniture and equipment, and construction-in-progress. 10 A comparative analysis of capital assets as of June 30, 2016 and 2015, is as follows: Governmental Activities 2016 2015 Land Buildings and Improvements Furniture and Equipment Construction in Progress Accumulated Depreciation Total $ Business-Type Activities 2016 2015 Total 2016 2015 25,349,188 $ 16,591,800 $ 454,806,281 244,670,661 13,389,660 12,188,174 11,613,990 152,951,944 1,440,992 $ 6,309,639 - 1,440,992 $ 26,790,180 $ 18,032,792 5,953,135 461,115,920 250,623,796 13,389,660 12,188,174 11,613,990 152,951,944 505,159,119 (75,633,905) 7,750,631 (670,846) 7,394,127 (548,937) 7,079,785 $ 6,845,190 $ 436,604,999 $ 355,895,931 426,402,579 (77,351,838) $ 429,525,214 $ 349,050,741 $ 512,909,750 (76,304,751) 433,796,706 (77,900,775) Overall net capital assets increased from June 30, 2015 to June 30, 2016, by $80.7 million. This increase reflects construction and improvement costs pursuant to the City of New Orleans’ master plan to re-build schools. Additional information on Capital Assets can be found in Note 2, Summary of Significant Accounting Policies and Note 6, Capital Assets. On November 6, 2008, the School Board approved a Master Plan for Orleans Parish school facilities. The Master Plan provides a blueprint for determining which school facilities will be rebuilt and which sites will be renovated. During October 2011, the School Board and RSD completed a revised Master Plan that incorporated cost savings made possible through the standardization of systems across all school facilities that will be constructed or rehabilitated. A complete copy of the Master Plan is available on the School Board’s web site: www.opsb.us. Construction expenditures are anticipated to increase as more rebuilding projects commenced in fiscal year 2016. Long-Term Debt Obligations include bonds and other long-term obligations, such as accrued vacation and sick leave pay. More detailed information about long-term liabilities is presented in Note 9 in the notes to the accompanying financial statements and in earlier sections of this Management’s Discussion and Analysis. Pursuant to the requirements of LSA-R.S. 39:562, the School Board is legally restricted from incurring long-term bonded debt in excess of 35% of the assessed value of the taxable property (including homestead exempt and nonexempt property) within the Parish of Orleans. At June 30, 2016, the statutory debt limit for general obligation bonds is $888,951,414 with a net legal debt margin of $859,001,584. Economic Factors and Next Year’s Budget The economic viability of the School Board is related primarily to the Ad Valorem Taxes and Sales and Use Tax Revenues and MFP. For fiscal year 2016, the School Board reflected increased Ad Valorem Taxes and Sales and Use Tax Revenues. Ad Valorem Tax increases reflect higher assessments. The Sales and Use Tax base growth is attributable to commercial development inclusive of the Louisiana State University’s medical complex center near the central business district, new retail developments including a high-end retail outlet and increased population. Contacting the School Board’s Financial Management This financial report is designed to provide the citizens, taxpayers, parents, students, investors and creditors with a general overview of the School Board’s finances and to provide accountability for the funds it receives. If you have questions about this report or wish to request additional financial information, please call 504-304-4185, 3520 General DeGaulle Dr., Ste. 5055, New Orleans, LA 70114-4000. 11 BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS 12 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Net Position June 30, 2016 Assets Cash and Cash Equivalents Investments Taxes Receivable Sales Taxes Ad Valorem Taxes Due from Other Governments Internal Balances Equity in Pooled Cash Prepaid Items Inventory Other Receivables Other Long-Term Accounts Receivable - RSD Loan Receivable and Accrued Interest Restricted Investments Capital Assets Land Construction in Progress Capital Assets, Net of Accumulated Depreciation Total Assets Deferred Outflows of Resources Deferred Outflows on Pension Obligation Total Deferred Outflows of Resources Liabilities Accounts Payable Payroll Withholdings Salaries Payable Other Payables Accrued Interest Payable Due to Fiduciary Funds Due to Other Governments Unearned Revenues Funds Held for Future Distribution Long-Term Liabilities Bonds, Notes and Loans Due Within One Year Bonds, Notes and Loans Due in More Than One Year Compensated Absences Due Within One Year Compensated Absences Due in More Than One Year OPEB Obligation Payable Pension Obligation Payable Claims Payable Due Within One Year Claims Payable Due in More Than One Year Total Liabilities Governmental Activities $ Primary Government Business-Type Activities - $ 1,607,833 $ - Component Units Total 1,607,833 - $ 54,302,811 18,548,038 21,060,931 7,333,235 12,612,459 (1,690,936) 184,056,752 2,412,844 51,637 8,775,160 109,898,303 22,587,143 1,690,936 1,951,504 9,738 67,834,467 - 21,060,931 7,333,235 12,612,459 186,008,256 2,412,844 51,637 8,784,898 109,898,303 67,834,467 22,587,143 8,105,736 1,108,200 5,017 584,544 294,175 - 25,349,188 11,613,990 392,562,036 1,440,992 5,638,793 26,790,180 11,613,990 398,200,829 6,233,305 796,622,742 80,174,263 876,797,005 89,181,826 14,442,868 - 14,442,868 47,250,087 14,442,868 - 14,442,868 47,250,087 10,699,669 1,639,689 1,114,875 2,766,377 937,417 374,563 9,057,737 55,684,362 14,557,618 3,370,200 563,509 3,300,763 275,029 342,755 - 11,219,095 122,994,668 2,602,276 489,000 65,549,001 31,683,934 50,238 578,803 62,682 114,147,177 - 331,370,281 122,691,156 10,527,114 1,639,689 1,114,875 2,721,836 937,417 374,563 9,057,737 55,684,362 14,557,618 11,219,095 122,994,668 2,602,276 489,000 65,549,001 31,683,934 331,153,185 172,555 44,541 217,096 The accompanying notes are an integral part of these financial statements. 13 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Net Position (Continued) June 30, 2016 Deferred Inflows of Resources Deferred Inflows on Pension Obligation Governmental Activities Total Deferred Inflows of Resources Net Position Net Investment in Capital Assets Restricted - Nonspendable Restricted for: School Food Service Debt Service Capital Projects Instructional Services Student Activities Scholarships Other Unrestricted Total Net Position $ Primary Government Business-Type Activities Component Units Total 2,950,767 - 2,950,767 6,546,106 2,950,767 - 2,950,767 6,546,106 404,272,337 - 7,079,785 - 411,352,122 - 6,233,305 138,023 51,637 56,058,162 75,676,913 (59,097,391) 72,877,382 51,637 56,058,162 75,676,913 13,779,991 640,252 695,327 16,120 717,807 (1,246,183) 476,961,658 $ 79,957,167 $ 556,918,825 $ 7,194,651 The accompanying notes are an integral part of these financial statements. 14 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Activities Fiscal Year Ended June 30, 2016 Program Revenues Functions/Programs Governmental Activities Instruction Regular Education Programs Special Education Programs Other Education Programs Support Services Student Services Instructional Staff Support General Administration Services School Administration Services Business Services Student T ransportation Services Central Services Plant Services Other Food Services T ransfer to RSD Schools T ransfer to Charter Schools Other Interest on Long-T erm Debt Total Governmental Activities Business-Type Activities Rental Properties T ransfer to Other LEA Total Business-Type Activities Total Primary Government Component Units Audubon Charter School Hynes Charter School Corporation Lake Forest Elementary Charter School Lusher Charter School Einstein Charter School Encore Learning Robert Russa Moton Charter School Warren Easton Senior High School Benjamin Franklin High School InspireNOLA Charter Schools Homer A. Plessy Community School Bricolage Academy Cypress Academy Foundation Preparatory New Orleans Charter Science and Math High School Total Component Units Expenses $ 21,518,727 7,264,584 18,789,952 Charges for Services $ - Operating Grants Capital Grants and Contributions and Contributions $ 986,065 2,188,042 14,368,041 $ 15,165,679 5,119,835 13,242,530 Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business-Type Activities Activities Total $ (5,366,983) 43,293 8,820,619 $ - $ (5,366,983) 43,293 8,820,619 Component Units $ - 8,683,924 7,487,693 17,641,687 3,377,102 2,638,366 5,307,002 3,010,617 11,033,319 1,300,000 6,050,027 161,061,267 106,540,381 9,406,816 1,962,020 252,118 10,105 422,884 - 4,138,236 4,278,769 369,328 70,700 62,877 271,532 95,101 232,672 6,508,667 - 6,120,139 5,277,075 12,433,270 2,380,069 1,859,432 3,740,197 2,121,783 7,775,914 - 1,826,569 2,068,151 (4,839,089) (926,333) (716,057) (1,295,273) (783,629) (3,024,733) (1,300,000) 881,524 (161,061,267) (106,540,381) (9,406,816) (1,962,020) - 1,826,569 2,068,151 (4,839,089) (926,333) (716,057) (1,295,273) (783,629) (3,024,733) (1,300,000) 881,524 (161,061,267) (106,540,381) (9,406,816) (1,962,020) - 393,073,485 685,107 33,570,030 75,235,923 (283,582,425) - (283,582,425) - 1,178,919 4,569,625 5,748,544 1,432,970 1,432,970 254,051 (4,569,625) (4,315,574) 254,051 (4,569,625) (4,315,574) - 398,822,029 2,118,077 (4,315,574) (287,897,999) - 33,570,030 75,235,923 (283,582,425) 8,322,522 7,303,712 6,015,036 17,145,308 14,124,293 5,292,759 2,900,831 10,916,321 9,596,150 34,872,711 2,377,701 3,131,679 1,073,487 996,079 7,813,166 - - - - - - (8,322,522) (7,303,712) (6,015,036) (17,145,308) (14,124,293) (5,292,759) (2,900,831) (10,916,321) (9,596,150) (34,872,711) (2,377,701) (3,131,679) (1,073,487) (996,079) (7,813,166) 131,881,755 - - - - - - (131,881,755) The accompanying notes are an integral part of these financial statements. 15 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Activities (Continued) Fiscal Year Ended June 30, 2016 Program Revenues Functions/Programs Net Expenses from Previous Page General Revenues Taxes Ad Valorem (Property) Taxes Sales and Use Taxes State Revenue Sharing Minimum Foundation Program (MFP) Minimum Foundation Program and Local Share Orleans Parish School Board, State and Other Grants and Contracts Interest and Investment Earnings Gain on Disposal of Capital Assets Internal Service Funds Net Operating Loss Contributions and Donations Judgments Donation of Capital Assets Miscellaneous Transfers Expenses Charges for Services Operating Grants Capital Grants and Contributions and Contributions and Changes in Net Position Primary Government Governmental Business-Type Activities Activities Total (283,582,425) (4,315,574) (287,897,999) Component Units (131,881,755) 158,311,016 127,844,470 2,690,500 64,377,681 75,553 20,499,056 43,359,340 14,755,785 (21,720,670) 868,325 22,838,667 5,670,315 21,720,670 158,311,016 127,844,470 2,690,500 64,377,681 943,878 22,838,667 5,670,315 20,499,056 43,359,340 14,755,785 - 100,344,463 21,636,995 644,617 11,516,688 4,422,993 410,192,731 51,097,977 461,290,708 138,565,756 Change in Net Position 126,610,306 46,782,403 173,392,709 6,684,001 Net Position - June 30, 2015 350,351,352 33,174,764 383,526,116 510,650 Net Position - June 30, 2016 $ 476,961,658 $ 79,957,167 $ 556,918,825 Total General Revenues, Transfers and Special Items $ 7,194,651 The accompanying notes are an integral part of these financial statements. 16 BASIC FINANCIAL STATEMENTS FUND FINANCIAL STATEMENTS 17 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Balance Sheet Governmental Funds June 30, 2016 General Assets Cash and Cash Equivalents Taxes Receivable Sales Taxes Ad Valorem Taxes Due from Other Governments Equity in Pooled Cash Prepaid Items and Other Assets Inventory Other Receivables Restricted Investments Total Assets Liabilities and Fund Balances Liabilities Accounts Payable Payroll Withholdings Salaries Payable Due to Other Funds Due to Other Governments Equity in Pooled Cash Unearned Revenues Funds Held For Future Distribution General Fund $ - $ 2,668,513 67,371,172 1,761,547 7,572,193 - - Obligation Bond Fund $ 21,060,931 7,333,235 - $ 79,373,425 $ 28,394,166 $ $ 3,446,864 1,639,689 1,114,875 374,562 3,493,530 - $ 924,251 202,919 12,709,378 14,557,618 $ Total Liabilities 10,069,520 Fund Balances (Deficit) Nonspendable: Prepaid Items Inventory Restricted for: Debt Service Capital Projects Committed for: Capital Projects Assigned to: Special Programs Unassigned Total Fund Balances (Deficit) Total Liabilities and Fund Balances Pass-Through Fund 28,394,166 1,761,547 - $ - $ - Federal Other Preservation Fund Grant Fund Governmental Funds $ $ $ $ - 21,665,170 - 118,266 - - 1,600,000 65,942,358 - - - 69,303,905 - 34,392,992 - 21,665,170 34,392,992 21,665,170 $ 34,511,258 $ - 1,820,948 15,160,407 - $ $ 10,775,744 $ $ 56,772 - $ - $ 10,775,744 $ 291,921,604 $ $ 5,333,079 - $ 1,101,261 28,209 8,451,909 - $ 1,750,266 3,248,122 70,971 - $ 9,218,628 1,639,689 1,114,875 2,065,498 9,057,737 39,569,816 53,176,308 14,557,618 - 54,796,273 5,333,079 - 14,713,382 - - (36,195,452) 52,242,003 (36,195,452) 52,242,003 $ 18,600,821 9,581,379 - - 14,713,382 20,046,461 $ 21,060,931 7,333,235 12,612,459 218,251,041 1,761,547 51,637 8,263,611 22,587,143 5,069,359 130,400,169 - 51,637 1,761,547 51,637 - 8,721,528 56,058,162 75,676,913 - - $ 519,141 15,676,555 51,637 640,418 - - 16,887,751 52,242,003 $ $ $ 1,690,936 53,105,337 - 9,424,805 - - 9,424,805 - - $ $ - 20,046,461 - - 20,046,461 - 10,718,972 $ $ - (16,981,355) - $ 18,600,821 - - $ 52,242,003 - (16,981,355) 18,600,821 - - 10,718,972 $ Total 52,242,003 - 56,772 - $ 10,724,744 51,000 - 16,981,355 - - - 118,266 - $ Facilities Plan Fund $ 34,511,258 - 28,394,166 Master Construction Fund 21,665,170 - $ QSCB Projects Fund 11,924,115 22,587,143 - 79,373,425 Capital Restoration Fund 21,665,170 - - - Hurricane Katrina QSCB Fund - 10,718,972 (156,574) 5,774,208 (2,728,981) 7,374,208 9,879,996 (156,574) 11,818,392 161,521,435 9,424,805 $ 16,887,751 $ 291,921,604 The accompanying notes are an integral part of these financial statements. 18 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2016 Total Fund Balances at June 30, 2016 - Governmental Funds Cost of Capital Assets at June 30, 2016 Less: Accumulated Depreciation as of June 30, 2016 Buildings Movable Property $ 505,159,119 (64,792,555) (10,841,350) 429,525,214 109,898,303 Accounts Receivable - RSD Deferred Outflows on Pension Obligation Deferred Inflows on Pension Obligation 14,442,868 (2,950,767) 11,492,101 Short-Term Interest Payable Long-Term Liabilities at June 30, 2016 Bonds Payable Bond Premium Claims Payable OPEB Obligation Payable Pension Obligation Payable Compensated Absences Payable Total Net Position at June 30, 2016 - Governmental Activities 161,521,435 (937,421) (130,670,000) (3,543,763) (31,683,934) (489,000) (65,549,001) (2,602,276) (234,537,974) $ 476,961,658 The accompanying notes are an integral part of these financial statements. 19 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Fiscal Year Ended June 30, 2016 Revenues Local Sources Ad Valorem Taxes Sales and Use Tax Earnings on Investments Food Services Donations Other State and Federal Sources Minimum Foundation Program State Revenue Sharing Other Federal Sources Total Revenues Expenditures Current Instruction Regular Programs Special Programs Other Programs Support Student Services Instructional Staff Support General Administration School Administration Business Services Student Transportation Services Central Services Plant Services Food Services Capital Outlay Other Debt Service Principal Retirement Interest and Bank Charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures General Fund $ General Obligation Bond Fund Pass-Through Fund 11,913,137 8,122,929 39,307 1,500 3,943,697 $ 129,185,840 99,742,330 - 17,716,158 2,690,500 769,129 41,399 46,556,720 663,056 - 45,237,756 276,147,946 13,554,994 3,958,191 1,571,703 3,250,828 2,087,964 3,836,725 2,750,339 2,023,742 4,171,244 2,349,547 7,765,991 28,002 1,300,000 - 9,121,985 - $ Hurricane Katrina Restoration Fund QSCB Fund 12,363,577 49 12,363,626 - $ 11,866,588 11,866,588 - 524,796 - 192,129 - 9,905,000 2,692,950 245,229 $ 71,235,923 71,235,923 3,064,903 83,395 5,560 37,567 43,104,723 - Capital Projects Fund $ QSCB Construction Fund 3,699,751 3,699,751 356,721 72,171 1,102,401 757,681 - $ Master Plan Fund 19,624 19,624 $ Facilities Preservation Fund 16,573 3,081,120 - - - - - - 48,649,270 9,121,985 13,122,746 437,358 46,296,148 2,288,974 - (3,411,514) 267,025,961 (759,120) 11,429,230 24,939,775 1,410,777 19,624 4,848,462 8,112,623 - 3,097,693 - $ Federal Grant Fund 12,961,085 335,173 - $ Other Governmental Funds - $ 422,884 4,291,582 - Total $ 158,311,016 127,844,470 75,553 422,884 4,293,082 10,724,568 24,492,005 104,803 802,689 6,508,667 64,377,681 2,690,500 2,234,874 102,277,994 24,492,005 12,130,625 473,252,622 503,488 1,914,006 13,137,604 401,636 44,137 509,984 17,525,021 5,916,334 15,302,686 3,719,452 3,875,110 7,185 150,820 30,153 1,588 - 101,976 134,962 112,219 78,075 6,050,027 2,058,268 - 7,072,256 6,098,036 14,367,529 2,750,339 2,148,706 4,322,064 2,451,871 8,985,622 6,050,027 45,948,674 1,300,000 - - 9,905,000 2,938,179 - 335,173 23,339,406 9,491,284 153,082,344 3,097,693 12,625,912 1,152,599 2,639,341 320,170,278 The accompanying notes are an integral part of these financial statements. 20 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Revenues, Expenditures and Changes in Fund Balances (Continued) Governmental Funds Fiscal Year Ended June 30, 2016 General Fund Other Financing Sources (Uses) Proceeds from Debt Service Revenue Bonds Refunding Bonds Gain (Loss) on Disposal of Capital Assets Judgments Other Transfers In Transfers Out Transfers Out - Building Transfers Out - Charter Schools Transfers Out - Recovery School District Transfers Out - Other LEA Total Other Financing Sources (Uses) Net Change in Fund Balances Capital Projects Fund QSCB Construction Fund Master Plan Fund Facilities Preservation Fund Federal Grant Fund Other Governmental Funds Total (9,406,817) (101,890,956) (155,728,188) - - - - 1,220,085 1,417,906 (107,429) - 11,663,729 (11,668,222) - (21,613,241) - (1,417,906) (5,333,079) - (1,294,142) - (110,550) (4,649,425) - 20,499,056 (5,113,375) 26,154,547 (47,875,219) (106,540,381) (161,061,267) - 24,981,596 (267,025,961) - - - 2,530,562 (4,493) (21,613,241) (6,750,985) (1,294,142) (4,759,975) (273,936,639) 3,941,339 15,131 (18,515,548) 5,874,927 (141,543) (2,120,634) 46,233,639 - 47,733,823 $ Hurricane Katrina Restoration Fund QSCB Fund 19,278,971 4,293,442 13,072,912 (11,663,729) - 21,570,082 Fund Balances, June 30, 2015 Fund Balances, June 30, 2016 General Obligation Bond Fund Pass-Through Fund 69,303,905 (759,120) $ - 11,429,230 22,424,290 $ 21,665,170 24,939,775 22,963,762 $ 34,392,992 The accompanying notes are an integral part of these financial statements. (41,921,130) $ (16,981,355) 6,777,633 $ 10,718,972 52,226,872 $ 52,242,003 (17,679,904) $ (36,195,452) 8,838,455 $ 14,713,382 (15,031) $ (156,574) 13,939,026 $ 11,818,392 115,287,796 $ 161,521,435 21 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities Fiscal Year Ended June 30, 2016 Excess of Expenditures and Other Uses Over Revenues and Other Financing Sources - Total Governmental Funds Capital Assets Capital Outlay and Other Expenditures Capitalized Depreciation Expense for Year Ended June 30, 2016 Assets Disposed Long-Term Debt Bond Premium, Net Principal Portion of Debt Service and Capital Lease Payments Excess of Interest Paid Over Interest Accrued Increase in Estimate of Long-Term Claims Payable Decrease in OPEB Obligation Payable Excess of Pension Expense Over Actual Employer Contributions Excess of Compensated Absences Used Over Amounts Earned Change in Net Position - Governmental Activities $ 46,233,639 98,816,103 (5,614,609) (29,382,962) 63,818,532 844,095 9,905,000 132,064 (73,806) 195,000 591,340 4,964,442 16,558,135 $ 126,610,306 The accompanying notes are an integral part of these financial statements. 22 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Net Position Proprietary Funds June 30, 2016 Business-Type Activities Enterprise Funds Assets Current Cash and Cash Equivalents Equity in Pooled Cash Other Receivables Due from Other Funds Due from Other Governments Loan Receivable and Accrued Interest Prepaid Items and Other Assets $ Noncurrent Loan Receivable Capital Assets Land Net Investment in Capital Assets 1,951,504 9,738 - $ - 1,607,833 1,690,936 1,448,824 - 71,133,236 172,555 44,541 - Noncurrent Claims Payable Unearned Revenue - - Total Liabilities - 217,096 Net Position Unrestricted 8,823,931 71,133,236 $ 5,644,972 511,549 651,297 66,385,643 - 1,440,992 5,638,793 - 80,174,263 6,807,818 172,555 44,541 - 1,308,483 269,445 2,721,836 2,508,054 217,096 71,133,236 $ 1,607,833 1,951,504 9,738 1,690,936 1,448,824 - - - 8,823,931 $ $ - 9,041,027 Liabilities and Net Position Liabilities Current Accounts Payable Deposit Payable Due to Other Funds Equity in Pooled Cash Totals 66,385,643 1,440,992 5,638,793 Total Assets Total Net Position Orleans Schools Facility Foundation Timbers Governmental Activities Internal Service 6,807,818 79,957,167 $ 79,957,167 $ - The accompanying notes are an integral part of these financial statements. 23 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds Fiscal Year Ended June 30, 2016 Operating Revenues Employer Contributions Retiree Contributions Employee Contributions Workers Compensation Reimbursement Rental Income Other Miscellaneous Timbers $ Total Operating Revenues 1,427,929 4,877 Business-Type Activities Enterprise Funds Orleans Schools Facility Foundation $ 164 - Totals $ 1,428,093 4,877 Governmental Activities Internal Service $ 7,621,155 1,461,950 19,853 1,287,104 - 1,432,806 164 1,432,970 10,390,062 121,909 1,011,383 45,528 99 - 121,909 1,011,482 45,528 10,306,379 83,683 1,178,820 99 1,178,919 10,390,062 Operating Income 253,986 65 254,051 - Nonoperating Revenues Investment Income Contributions and Donations Gain on Disposal of Capital Assets Transfers In Transfers Out Transfers Out - Other LEA 18 107,429 - 868,307 5,670,315 22,838,667 44,493,346 (22,880,105) (4,569,625) 868,325 5,670,315 22,838,667 44,600,775 (22,880,105) (4,569,625) - 107,447 46,420,905 46,528,352 - 361,433 46,420,970 46,782,403 - 8,462,498 24,712,266 33,174,764 - Operating Expenses Business Services Central Services Plant Services General Administrative Total Operating Expenses Total Nonoperating Revenues Change in Net Position Net Position, June 30, 2015 Net Position, June 30, 2016 $ 8,823,931 $ 71,133,236 $ 79,957,167 $ - The accompanying notes are an integral part of these financial statements. 24 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Cash Flows Proprietary Funds Fiscal Year Ended June 30, 2016 Cash Flows from Operating Activities Cash Premiums Received $ Receipts from Customers Payments for Claims and Benefits Payments to Suppliers Payments to Employees and for Employee Benefits Net Cash Provided by (Used in) Operating Activities Business-Type Activities Enterprise Funds Orleans Schools Facility Foundation Timbers 1,423,068 (665,142) (296,459) $ 164 (99) - Governmental Activities Internal Service Totals $ 1,423,232 (665,241) (296,459) $ 9,108,315 (10,273,048) (1,164,733) 461,467 65 461,532 (356,504) (155,707) 5,670,315 42,802,410 22,838,667 (4,569,625) (38,379,105) 5,670,315 42,802,410 22,838,667 (356,504) (4,569,625) (38,534,812) - (512,211) 28,362,662 27,850,451 - 18 395,800 (28,952,908) 791,947 395,800 (28,952,908) 791,965 - 18 (27,765,161) (27,765,143) - Net Increase (Decrease) in Cash (50,726) 597,566 546,840 (1,164,733) Cash at Beginning of Year 50,726 1,010,267 1,060,993 1,164,733 Cash Flows from Capital and Related Financing Activities Contributions and Donations Receipts from Other Funds Proceeds from Sale of Capital Assets Purchase of Capital Assets Contribution to Others Payments to Other Funds Net Cash (Used in) Provided by Capital and Related Financing Activities Cash Flows from Investing Activities Cash Receipts from Loan Collections Cash Payments for Loans to Others Interest Income Net Cash Provided by (Used in) Investing Activities Cash at End of Year $ - $ 1,607,833 $ 1,607,833 $ - The accompanying notes are an integral part of these financial statements. 25 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Cash Flows (Continued) Proprietary Funds Fiscal Year Ended June 30, 2016 Timbers Reconciliation of Operating Income to Net Cash Provided by (Used in) Operating Activities Operating Income Adjustments to Reconcile Operating Income to Net Cash Provided by (Used in) Operating Activities: Depreciation Changes in: Equity in Pooled Cash Other Receivables Due from Other Funds Prepaid Items and Other Assets Accounts Payable Unearned Revenue Due to Other Funds Deposits Payable Claims Payable Net Cash Provided by (Used in) Operating Activities $ $ 253,986 Business-Type Activities Enterprise Funds Orleans Schools Facility Foundation $ 65 Governmental Activities Internal Service Totals $ 254,051 121,909 - 121,909 (9,738) 93,659 1,651 - - (9,738) 93,659 1,651 - 461,467 $ 65 $ 461,532 $ - (5,375,528) 484,972 31,806,645 (357,780) 461,053 (1,521,594) (27,682,035) 1,019,534 $ (1,164,733) The accompanying notes are an integral part of these financial statements. 26 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Fiduciary Net Position Fiduciary Funds June 30, 2016 Assets Cash Investments Due from Other Funds Equity in Pooled Cash Trust Funds $ Total Assets Liabilities Accounts Payable Due to Student Groups Total Liabilities Net Position Held in Trust for Various Purposes $ 312,670 373,650 479,499 Agency Funds $ 279,271 913 - 1,165,819 280,184 352,805 - 280,184 352,805 280,184 813,014 $ - The accompanying notes are an integral part of these financial statements. 27 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Statement of Changes in Fiduciary Net Position Fiduciary Funds Fiscal Year Ended June 30, 2016 Additions Other Miscellaneous Interest and Investment Gain Trust Funds $ 1,300,000 42,532 1,342,532 Total Additions Deductions Instruction Special Programs Support Student Services Business Services Student Transportation Services 1,249,851 9,750 - Total Deductions 1,259,601 Change in Net Position 82,931 Net Position - Beginning 730,083 Net Position - Ending $ 813,014 The accompanying notes are an integral part of these financial statements. 28 NOTES TO FINANCIAL STATEMENTS 29 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 1. General Information The Orleans Parish School Board (School Board) is a corporate body created under Louisiana Revised Statutes 17:51 and 17:121. A board consisting of seven members (the Board) elected from legally established districts is charged with the management and operation of the school system. As of the report date, the School Board has 864 full-time or part-time employees of which 501 are involved in the instructional process. In November 2005, Louisiana House Bill 121 (Act 35) transferred control of each School Board school deemed to be in academic crisis, as determined by standardized student testing results, resulting in approximately 83% (106 schools) of the School Board’s former schools being transferred to the Louisiana State Department of Education’s Recovery School District (RSD). The RSD is responsible for providing all educational services to students attending the School Board transferred schools. Act 35 provided for the transfer of operational and managerial control of the transferred schools for a period of not less than five years. Further, Act 35 provides the RSD with authorization to manage and retain funding under the Minimum Foundation Program corresponding to the students attending the transferred schools. While the School Board retains ownership of each School Board transferred school, all rights and responsibilities associated with property ownership were transferred to the RSD. As of the report date, the School Board is operating six schools and two programs with approximately 3,700 students. The School Board also has seventeen charter schools opened and operating that have approximately 11,200 students. The School Board is working collaboratively with the RSD to ensure that a sufficient number of additional schools are opened to provide educational services to the New Orleans student population. The regular school term begins in mid-August and runs through late May. Note 2. Summary of Significant Accounting Policies The School Board complies with accounting principles generally accepted in the United States of America (GAAP). The School Board's reporting entity applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. This financial report has been prepared in conformity with GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, issued in June 1999. The following is a summary of the School Board's significant accounting policies: Financial Reporting Entity The accompanying financial statements present the School Board and its component units, as determined under the guidelines established by GASB Statement No. 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34. 30 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Financial Reporting Entity (Continued) GASB has set forth criteria to be considered in determining when a potential component unit should be included in the financial statements of a primary government. These criteria include: 1. The primary government is financially accountable if it appoints a voting majority of the organization’s governing, and a. It is able to impose its will on that organization. b. There is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on the primary government. 2. The primary government is financially accountable if an organization is fiscally dependent on and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government regardless of whether the organization has (a) a separately elected governing board, (b) a governing board appointed by a higher level of government, or (c) a jointly appointed board. 3. The primary government may determine, through exercise of management’s judgment, that an organization that does not meet the specific financial accountability criteria should be included as a component unit to prevent the reporting entity’s financial statements from being misleading. This determination should be based on the nature and significance of the organization’s relationship with the primary government. Under provisions of this Statement, the School Board is considered a primary government, since it is a special purpose government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. The School Board has seventeen discretely presented component units, defined by GASB Statement No. 61 as other legally separate organizations for which the School Board is financially accountable. Copies of submitted audited financial statements are available on the legislative auditor’s web site at www.lla.state.la.us. The School Board also has one component unit blended with the primary government due to the closeness of their relationship with the primary government. This component unit is the Orleans Schools Facility Foundation (OSFF), a non-profit organization, reported as an enterprise fund. Separate financial statements for OSFF are not issued. There are no other primary governments with which the School Board has a significant relationship. Certain units of local government over which the School Board exercises no authority, such as the City-Parish government and other independently elected officials, are excluded from the accompanying financial statements. These units of government are considered separate from those of the School Board. The School Board is not a component unit of any other entity. 31 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Financial Reporting Entity (Continued) Discretely presented component units which require inclusion in the basic financial statements are as follows: Component Units Charter Schools * Audubon Charter School * Benjamin Franklin High School * Bricolage Academy * Cypress Academy * Einstein Charter School * Encore Learning * Foundation Preparatory * Homer A. Plessy Community School * Hynes Charter School * InspireNOLA Charter Schools Alice M. Harte Elementary Edna Karr High School Wilson Charter School * Lake Forest Elementary Charter School * Lusher Charter School * New Orleans Charter Science and Math High School * Robert Russa Moton Charter School * Warren Easton Senior High School Total Charter Student Enrollment Number of Students 832 901 241 51 1,191 472 38 244 688 787 1,113 550 613 1,712 430 342 996 11,201 * Submitted June 30, 2016 audited financial statements. Primary Government Orleans Parish School Board (OPSB) Schools Schools: Bethune Elementary School McDonogh No. 35 High School Eleanor McMain High School Benjamin Franklin Elementary Math and Science Mahalia Jackson Elementary School McDonogh No. 35 Career Academy Programs: Alternative Learning Center Youth Study Center Total OPSB Student Enrollment Number of Students 516 1,028 794 815 260 200 72 33 3,718 32 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Basis of Presentation The School Board’s Basic Financial Statements consist of the government-wide statements on all of the nonfiduciary activities and the fund financial statements (individual major funds and combined non-major funds). Separate financial statements are provided for governmental funds and proprietary funds. The statements are prepared in accordance with accounting principles generally accepted in the United States of America, as applied to governmental units. Government-Wide Financial Statements The Government-Wide Financial Statements (GWFS) were prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability has been incurred, regardless of the timing of the 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 Statement of Net Position and the Statement of Activities were prepared using the economic resources measurement focus and the accrual basis of accounting. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Program revenues include 1) charges for services provided, 2) operating grants and contributions, and 3) capital grants and contributions; program revenues reduce the cost of the function to be financed from the School Board’s general revenues. Operating grants and contributions consist of the many educational grants received from the federal and state government. As a general rule, the effect of interfund activity has been removed from these statements. Exceptions to the general rule are advances between fiduciary funds and the various functions of the School Board. The government-wide presentation focuses primarily on the sustainability of the School Board as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. The internal service funds provide services to the governmental funds. Accordingly, the internal service funds activities were rolled up into the governmental activities in the GWFS. Pursuant to GASB Statement No. 34, the internal activities have been eliminated in order to avoid the “grossing-up” effect of a straight inclusion. The School Board reports all direct expenses by function in the Statement of Activities. Direct expenses are those that are clearly identifiable with a function. Indirect expenses of other functions are not allocated to those functions but are reported separately in the Statement of Activities. Depreciation expense, which can be specifically identified by function, is included in the direct expenses of each function. Interest on general long-term debt is considered an indirect expense and is reported separately on the Statement of Activities. Fund Financial Statements The Fund Financial Statements (FFS) are very similar to the traditional government fund statements as presented by governments prior to the issuance of GASB Statement No. 34. Emphasis is on the major funds in either the governmental or business-type categories. Non-major funds (by category or fund type) are summarized into a single column. 33 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Fund Financial Statements (Continued) The daily accounts and operations of the School Board are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, equity, revenues, and expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The funds of the School Board are classified into three broad categories: Governmental, Proprietary and Fiduciary. In turn, each category is divided into separate fund types. Governmental Fund Types General Fund - The General Fund is the primary operating fund of the School Board. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes. These funds account for the revenues and expenditures related to federal, state and local grant and entitlement programs for various educational objectives and child nutrition services. Debt Service Funds - Debt Service Funds, established to meet requirements of bond ordinances and other long-term borrowing, are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs and some capitalized leases. A separate Debt Service Fund is maintained for each similar bond issue type (e.g., General Obligation Bonds, Refunding Bonds) or each refunding, unique issue, or long-term loan currently outstanding. Capital Projects Funds - Capital Projects Funds are used to account for the receipt and disbursement of the proceeds of general bond issues and other special or designated revenues used for the acquisition or construction of major capital facilities, renovations and major repairs (other than General Fund capital outlays, and Special Revenue Fund capital outlays). Proprietary Fund Type Enterprise Fund - Timbers - An enterprise fund established to account for the rental receipts and operating costs of three buildings located in New Orleans, LA. The Timbers Enterprise Fund is reported as a major fund. Enterprise Fund - Orleans Schools Facility Foundation - An enterprise fund established to account for the activity of the Orleans Schools Facilities Foundation (OSFF), a public benefit corporation of the School Board organized under the provisions of the Public School Facilities Financing Act contained in LA. R.S. 17:100.10. The purpose of OSFF is to assist in facilitating tax credit financing for the construction and renovation school buildings as described in Note 21. The Orleans Schools Facility Foundation Enterprise Fund is reported as a major fund. 34 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Proprietary Fund Types (Continued) Internal Service Funds - Internal Service Funds are used to account for the financing of services provided by one department or agency to other departments or agencies of the governmental unit, or to other governmental units, on a cost-reimbursement basis. The Employee Health Insurance Fund, Retiree Health Insurance Fund, Workers’ Compensation Insurance Fund and E-Rate Fund are reported as Internal Service Funds. Fiduciary Fund Types Agency Funds - Agency Funds are used to account for assets held by the School Board as an agent for individuals, private organizations or other governmental units and/or other funds. The School Board has one agency fund which is used to account for those monies collected by pupils and school personnel for school and school-related purposes. Trust Funds - Trust Funds are created to account for cash, investments and other resources contributed by various individuals to the School Board to be expended for purposes for which the trusts were established. In accordance with GASB, the Fiduciary Funds information is presented separately within this report and is not included in the Government-Wide Financial Statements or Fund Financial Statements. Major Funds The School Board reports the following major governmental funds: General Fund – The General Fund is the primary operating fund of the School Board. It is used to account for all financial resources except those required to be accounted for in another fund. Pass-Through Fund – Special revenue fund established to account for the collection of ad valorem taxes, sales taxes and certain state funding. These revenues are then transferred to the appropriate funds or other entities. General Obligation Bond Fund – Debt service fund established to account for the accumulation of resources for and payment of long-term debt principal, interest and related costs on outstanding general obligation bonds issued by the School Board. Fund revenues include receipt of ad valorem taxes from constitutional millage and interest earned on cash balances. Additionally, the School Board may transfer from the General Fund amounts to cover deficiencies, if any, or to provide additional reserves to service future obligations. Qualified School Construction Bond (QSCB) Fund – Established to account for the accumulation of resources for and payment of long-term debt principal, interest and related costs on outstanding bonds issued by the School Board. Fund revenues include receipt of sales and use taxes and interest earned on cash balances. Effective fiscal year 2014, sales and use tax revenues were transferred to fund debt service obligations that commenced in fiscal year 2015. Additionally, the School Board may transfer additional sales and use tax amounts to cover deficiencies, if any, or to provide additional reserves to service future obligations. 35 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Major Funds (Continued) Hurricane Katrina Restoration Fund – Capital projects fund established to account for receipts and expenditures for projects funded by FEMA grant monies for reimbursement of allowable expenditures. Fund expenditures are used for mold remediation inside flooded schools, repairs and major construction to hurricane damaged schools, school facilities and administrative facilities. Capital Projects Fund – Capital projects fund established to account for the receipts and disbursements for projects funded from the sales of surplus properties and insurance proceeds. Fund expenditures are used for both new construction and the renovation of existing facilities. QSCB Construction Fund – Capital projects fund established to account for the construction, rehabilitation and repair of public school facilities funded through the Qualified School Construction Bonds (QSCB). Master Plan Fund – Capital projects fund established to account for the receipts and disbursements for the rebuilding of schools funded by insurance proceeds. Facilities Preservation Fund – Capital projects fund established pursuant to Act 543. It is to provide the allocation and dedication of certain local tax revenues to the replacement, repair and improvement of school facilities. Federal Grant Fund – Special revenue fund established to account for revenues from federal sources which are legally restricted to expenditures for specified purposes. Basis of Accounting/Measurement Focus Government-Wide Financial Statements (GWFS) The GWFS are prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses, assets, liabilities, deferred outflows of resources and deferred inflows of resources resulting from exchange or exchange-like transactions are recognized when the exchange occurs (regardless of when cash is received or disbursed). Revenues, expenses, gains, losses, assets, liabilities, deferred outflows of resources and deferred inflows of resources resulting from nonexchange transactions are recognized in accordance with the requirements of GASB Statement No. 33, Accounting and Financial Reporting for Non-exchange Transactions. Fund Financial Statements (FFS) The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All Governmental Funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. 36 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Fund Financial Statements (FFS) (Continued) The Proprietary Fund and Fiduciary Fund types are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the balance sheet. The Proprietary Fund type's operating statement presents increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. For the Enterprise Fund Timbers, the principal operating revenues are charges to tenants for rent, and operating expenses include costs to maintain and operate the building. For the Enterprise Fund – Orleans Schools Facility Foundation, there are no significant operating revenues or expenses as the activity is principally collection of payments related to the loan receivable. In the Internal Service Funds, current premium and claims expenses or increases in claims estimates occurring in the current period are considered operating expenses. Contributions received which are related to these operating expenses are considered operating revenues. Interest earned on bank accounts or monies received from other funds which exceed their allocated share of the current operating expenses of the Proprietary Fund are considered non-operating revenues or transfers in to the fund. The Governmental Fund type is accounted for on the modified accrual basis of accounting. The following paragraphs describe the revenue recognition practices under that basis. Revenues Governmental fund revenues resulting from exchange transactions are recognized in the fiscal year in which the exchange takes place and meets the government’s availability criteria (susceptible to accrual). Available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. Charges for services, fines and forfeits, and most governmental miscellaneous revenues, including investment earnings are recorded as earned since they are measurable and available. The School Board’s definition of available means expected to be received within sixty days of the end of the fiscal year for property taxes and generally the next twelve months for other revenues. Revenues not considered available are recorded as unearned revenues. Non-exchange transactions, in which the School Board receives value without directly giving value in return, include sales taxes, property taxes, special assessments, grants, entitlements, and donations. Property taxes are considered measurable in the calendar year of the tax levy if collected soon enough to meet the availability criteria. Sales taxes are considered measurable when the underlying transaction occurs and meets the availability criteria. Anticipated refunds of such taxes are recorded as fund liabilities and reductions of revenue when they are measurable and valid. Special assessments are recognized as revenues only to the extent that individual installments are considered current assets in the governmental fund types. Revenue from grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources can be used. Expenditures Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred. Costs of accumulated unpaid vacation, sick leave and other employee benefit amounts are reported in the period due and payable rather than the period earned by employees, and general longterm obligations principal and interest payments are recognized only when due. The Proprietary Fund and Trust Funds are accounted for using the accrual basis of accounting; revenues are recognized when earned and expenses are recognized when incurred. 37 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Budget and Budgetary Accounting The School Board follows these procedures in establishing the budgetary data reflected in the financial statements: The General Fund and the Special Revenue Funds are the only funds with legally required budgets. The General Fund budget and the Special Revenue Funds' budgets are adopted on an annual basis. These budgets include proposed expenditures and the means of financing them. Annually, the Superintendent submits to the School Board a proposed annual appropriated budget for the General Fund and Special Revenues Funds. Public hearings are advertised and conducted to obtain taxpayer comments and the proposed budgets are published. The budget is adopted by the School Board and, as required, is submitted no later than September 30th to the State Department of Education for approval. The Superintendent is authorized to move budgeted items within the functional categories, the legal level of control, but may not increase the total amount authorized. Expenditures for Special Revenue Fund budgets, except for the Child Nutrition Program, may not exceed budgeted amounts by more than five percent unless a budget revision is approved by the State Department of Education. For the Child Nutrition Program, budget amendments follow the same requirements as the General Fund. The Capital Projects Funds’ budgets are adopted on a project basis, since such projects may be started and completed at any time during the year or may extend beyond one fiscal year. Capital Projects Funds are allocated by project using architectural and engineering estimates. All projects remain programmed and funded until completed or until the School Board decides to eliminate the project. Accordingly, budget and actual comparisons are not reported in the basic financial statements for those funds. Budgets are prepared on the modified accrual basis of accounting, consistent with generally accepted accounting principles. Unencumbered appropriations lapse at the end of the fiscal year. Encumbered appropriations at year end that have been approved by the Board are generally expended during the next fiscal year's operations, assuming that the underlying liability is ultimately incurred. Budgeted amounts are as originally adopted or as amended by the Board. Legally, the Board must adopt a balanced budget; that is, total budgeted revenues and other financing sources including fund balance must equal or exceed total budgeted expenditures and other financing uses. State statutes require the School Board to amend its budgets when revenues plus projected revenues within a fund are expected to be less than budgeted revenues by five percent or more and/or expenditures within a fund are expected to exceed budgeted expenditures by five percent or more. Encumbrances Encumbrances are commitments related to unperformed contracts for goods or services; they are reported as restricted, committed or assigned fund balance. Cash, Cash Equivalents and Investments Cash and cash equivalents include interest-bearing demand deposits and short-term investments as described below, with a maturity date within three months of the date of acquisition. The School Board maintains an accounting record reflecting the equity or deficit of each participating fund's interest in a pooled operating cash account. 38 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Cash, Cash Equivalents and Investments (Continued) State statutes authorize the School Board to invest in United States bonds, treasury notes, or certificates and time deposits of state banks organized under Louisiana law and national banks having principal offices in Louisiana. The School Board’s Cash Management and Investment Policy requires that cash balances of all funds are combined and invested to the extent possible in direct obligations of the U.S. Government or its agencies, certificates of deposit and other short-term obligations. Interest earned on these investments is distributed to the individual funds on the basis of invested balances of the participating funds during the year. Investments for the School Board are reported at fair value. Accounts Receivable Management has recorded a $253,159 allowance for Federal Grant Fund receivables. Management considers all other receivables outstanding at June 30, 2016, to be fully collectible and as such, has no provision for uncollectible receivables recorded related to these receivables. Inventory - Government-Wide Level Inventory is stated at first-in, first-out (FIFO) cost and consists of food items held for consumption at the various schools. The cost of inventory items is recognized as an expense when used. Inventory - Fund Level Inventory of the Child Nutrition Special Revenue Fund consists of food, lunchroom materials, and supplies purchased by the School Board and commodities granted by the United States Department of Agriculture (USDA) through the Louisiana Department of Agriculture and Forestry. Inventory items purchased are valued at FIFO cost. Costs are recorded as expenditures at the time individual items are consumed (consumption method). Commodities are valued at the market value at the date of donation based on market values provided by the USDA. The amount of commodity inventory is included in unearned revenue until consumed. Long-Term Accounts Receivable - RSD and Return of Capital Assets from the RSD As disclosed in Note 1, Act 35 transferred 106 schools from the School Board to the RSD. For the schools transferred to the RSD, the School Board recognized a receivable for the net book value of the land, buildings and equipment for the schools transferred. For those schools that are returned to and accepted by the School Board from the RSD, Long-Term Accounts Receivable - RSD is reduced and capital assets are increased by the net book value of the land, buildings and equipment that were initially transferred to the RSD. Management will then perform an assessment to determine whether the land, buildings and equipment (the facilities) have incurred impairment, as well as perform an assessment to determine whether any significant enhancements or improvements have been made to the facilities. For facilities deemed to be impaired, an impairment charge is recorded to the GWFS. For facilities which significant improvements or enhancements have been made, the value of the enhancements or improvements are recorded for the actual costs incurred for the new structure or improvements, net of the amount of depreciation calculated for the period from when the enhancements or improvements were initially placed in service by the RSD to the date in which the facilities were returned to the School Board. For those instances in which cost information is not available, a professional appraisal shall be obtained. 39 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Long-Term Accounts Receivable - RSD and Return of Capital Assets from the RSD (Continued) For facilities transferred to the School Board, depreciation resumes/initiates once the facilities are placed into service by the School Board. The remaining useful lives of facilities transferred to the School Board are evaluated for reasonableness. Depreciation on the facilities is recognized on a straight-line basis over the estimated remaining useful life. During the year ended June 30, 2016, numerous properties were transferred from the RSD to the School Board. An adjustment was made to reduce the Long-Term Accounts Receivable – RSD and increase capital assets totaling $16,655,941 as of June 30, 2016. Improvements made to these properties, which were recorded as donations of capital assets, totaled $43,359,340 for the year ended June 30, 2016. Impairment recognized on twelve properties totaled $5,853,247 for the year ended June 30, 2016 and are recorded as program expense within the statement of activities. Capital Assets All capital assets are capitalized at historical cost, or estimated historical cost for assets where actual historical cost is not available. Donated assets are recorded as capital assets at their estimated fair market value at the date of donation. The School Board maintains threshold levels for capitalizing capital assets as follows: movable capital assets with a cost of $5,000 or more per unit, all land and land improvements with a cost of $50,000 or more, and buildings and building improvements that extend the useful life of a building with a cost of $50,000 or more. Capital assets are recorded in the GWFS, but are not reported in the FFS. All capital assets are depreciated using the straight-line method over their estimated useful lives. Since surplus assets are sold for an immaterial amount when declared as no longer needed for public school purposes by the School Board, no salvage value is taken into consideration for depreciation purposes. Useful lives are as follows: from 3 to 10 years for furniture and equipment, 5 to 8 years for transportation equipment, 5 to 20 years for equipment, 25 years for building improvements, 10 to 20 years for improvements other than building, and 20 to 40 years for buildings. Costs of assets damaged by Hurricane Katrina were reduced by the impairment and the adjusted cost depreciated over the assets’ remaining useful life. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the GWFS as “internal balances.” Fund Equity The School Board follows GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions which provides more clearly defined fund balance categories to make the nature and extent of the constraints placed on a government’s fund balance more transparent. The following classifications describe the relative strength of the spending constraints placed on the purposes for which the resources can be used. Nonspendable - amounts that are not in a spendable form (such as inventory) or are required to be maintained intact. 40 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Fund Equity (Continued) Restricted - amounts constrained to specific purposes by their providers (such as grantors, bondholders and higher levels of government) through constitutional provisions, or by enabling legislation. Committed - amounts constrained to specific purposes by a government itself, using its highest level of decision making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest level action to remove or change the constraint. Assigned - amounts a government intends to use for a specific purpose; intent can be expressed by the governing body or an official or body which the governing body delegates the authority. Unassigned - amounts that are available for any purpose. The School Board establishes (and modifies or rescinds) fund balance commitments by passage of a resolution. This is typically done through adoption and amendment of the budget. A fund balance commitment is further indicated in the budget document as a designation or commitment of the fund. Assigned fund balance is established by the School Board through adoption or amendment of the budget as intended for specific purpose (such as the purchase of capital assets, construction, debt service or other purposes). Interfund Transactions Transactions that constitute reimbursements to a fund for expenditures initially made from it that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed. All other interfund transactions are reported as transfers. Nonrecurring or non-routine permanent transfers of equity are reported as residual equity transfers. All interfund transfers are reported as operating transfers. Compensated Absences Under School Board policy, each employee is entitled to ten days of sick leave per year. Sick leave may be accumulated without limit; however, employees or their heirs are only reimbursed for accumulated sick leave up to twenty-five days upon death or retirement at the employees’ current rate of pay. The accrual computation for earned sick leave is calculated on a 25-day maximum per employee. Sick leave is not payable upon discharge or termination (non-retirement). Upon retirement, accumulated sick leave in excess of reimbursement may be used in the retirement benefit computation as earned service. Full-time employees who work year-round are granted vacation in varying amounts (maximum of 22 days per year) as established by School Board policy. Such leave is credited on a pro rata basis at the end of each payroll reporting period and accumulates. All leave earned during any fiscal year must be taken within the following six month period or it is forfeited. Any unused leave may be paid to the employee at termination. 41 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Compensated Absences (Continued) Sabbatical leave may be granted for medical or professional purposes. Any employee with a teaching certificate is entitled, subject to approval by the School Board, to one semester of sabbatical leave after three years of continuous services, or two semesters of sabbatical leave after six or more years of continuous service. Sabbatical leave is paid at 65% of salary. Sabbatical leave is accrued upon Board approval. Unearned Revenues The School Board reports unearned revenues when resources are received by the School Board before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when the School Board has a legal claim to the resources, the liability for unearned revenue is removed from the balance sheet and the revenue is recognized. Funds Held For Future Distribution Funds held for future distribution represent funds for which the School Board has not made a determination as to the amount or who may have a legal claim to the funds, such as RSD or charter schools. Once the School Board has determined that either it or another entity has a legal claim to the resources, the amounts identified are reclassified as either revenue or as an obligation due to another entity. Long-Term Obligations For government-wide reporting, the issuance costs associated with the bonds are considered an outflow of resources in the reporting period in which they are incurred in accordance with GASB Statement No. 65. For governmental fund types, bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as other financing sources, net of the applicable premium or discount. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. Restricted Net Position For the government-wide statement of net position, net position is reported as restricted when constraints placed on net position use are either externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of other governments; or imposed by law through constitutional provisions or enabling legislation. When both restricted and unrestricted resources are available for use, it is the School Board’s policy to use restricted resources first, then unrestricted resources as they are needed. Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 42 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 2. Summary of Significant Accounting Policies (Continued) Pension Plans (Plans) For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net positions of the Plans, and additions to/deductions from the Plans’ fiduciary net positions have been determined on the same basis as they are reported by the Plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Adoption of New Accounting Principles For the year ended June 30, 2016, the following statements were implemented: Governmental Accounting Standards Board Statement No. 72 (GASB 72) The objective of GASB Statement No. 72, Fair Value Measurement and Application, is to improve financial reporting by clarifying the definition of fair value for financial reporting purposes, establishing general principles for measuring fair value, providing additional fair value application guidance, and enhancing disclosures about fair value measurements. Governmental Accounting Standards Board Statement No. 76 (GASB 76) The objective of GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, is to identify, within the context of the current governmental financial reporting environment, the sources of accounting principles used to prepare financial statements of state and local governmental entities in conformity with GAAP and the framework for selecting those principles. Note 3. Deposits and Investments Custodial Credit Risk - Deposits Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may not be returned to it. Under state law, all deposits are secured by federal depository insurance or the pledge of securities held by the pledging banks agent in the School Board’s name. At June 30, 2016, the carrying amount of the School Board’s deposits (demand deposits) was $186,487,752 and the related bank balances were $189,068,527. The bank balance of $189,068,527 was covered by federal depository insurance or secured by bank owned securities specifically pledged to the School Board and held in joint custody by an independent bank or trust department. In addition, six schools maintained Student Activity Funds with book and bank balances at June 30, 2016 of $279,271 and $301,955, respectively. The bank balances of these accounts were secured by federal depository insurance and the pledge of securities held by the pledging bank’s agent in the School Board’s name. These funds are not assets of the School Board, but rather assets held for the benefit of the students attending those schools and are reported as Agency Funds in the Other Supplementary Information section and not included in the GWFS. Investments Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. In general, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The School Board has a formal investment policy that limits investment of amounts in excess of immediate cash requirements only to statutorily permitted investments. 43 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 3. Deposits and Investments (Continued) Investments (Continued) Credit risk. State law limits investments to the following: 1. Direct United States Treasury obligations 2. Bonds, debentures, notes, or other evidence of indebtedness issued or guaranteed by federal agencies and provided such obligations are backed by the full faith and credit of the United States of America 3. Bonds, debentures, notes, or other evidence of indebtedness issued or guaranteed by U.S. government instrumentalities, which are federally sponsored 4. Direct security repurchase agreements of any federal book entry only securities 5. Time certificates of deposit of any bank domiciled or having a branch office in the state of Louisiana, savings accounts or shares of savings and loan associations and savings banks 6. Mutual or trust fund institutions which are registered with the SEC and which have underlying investments consisting solely of and limited to securities of the United States government or its agencies 7. Guaranteed investment contracts issued by a bank, financial institution, insurance company, or other entity having one of the two highest short-term rating categories of either Standard & Poor’s Corporation or Moody’s Investors Service 8. Investment grade commercial paper of domestic United States corporations The School Board has no investment policy that would further limit its investment choices. Included in investments as of June 30, 2016, are marketable securities, which are uninsured investments for which the securities are held in a fiduciary trust fund, of $312,670. Fair Value Measurement The Trust Fund’s investments measured and reported at fair value are classified according to the following hierarchy: • • • Level 1 - Investments reflect prices quoted in active markets. Level 2 - Investments reflect prices that are based on a similar observable asset either directly or indirectly, which may include inputs in markets that are not considered to be active. Level 3 - Investments reflect prices based upon unobservable sources. The categorization of investments within the hierarchy is based upon the pricing transparency of the instrument and should not be perceived as the particular investment’s risk. Debt, equities, and investment derivatives classified in Level 1 of the fair value hierarchy are valued directly from a predetermined primary external pricing vendor. Assets classified in Level 2 are subject to pricing by an alternative pricing source due to lack of information available by the primary vendor. Mortgage and asset backed securities classified in Level 3, due to lack of an independent pricing source, are valued using an internal fair value as provided by the investment manager. 44 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 3. Deposits and Investments (Continued) Fair Value Measurement (Continued) The following table sets forth by level, within the fair value hierarchy, the Trust Fund’s assets at fair value as of June 30, 2016: June 30, 2016 Investments by Fair Value Level Marketable Securities Total Investments by Fair Value Level Note 4. $ $ 312,670 $ 312,670 $ Fair Value Measurements Using: Quoted Prices In Active Markets for Significant Significant Identical Other Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) 312,670 $ 312,670 $ - $ $ - Ad Valorem Taxes and Sales Taxes Ad valorem taxes were levied by the School Board on September 16, 2015 for the calendar year 2016 based on the assessed valuation of property as of October 2015. Values are established by the Orleans Parish Assessors' Offices each year based on 10% of the assessed market value of residential property and commercial land and on 15% of the assessed market value of commercial buildings, public utilities and personal property. The taxes become due on January 1 of each year, and become delinquent on February 1. Before the taxes can be collected, the assessment list (tax roll) must be submitted to the Louisiana Tax Commission for approval. From the day the tax roll is filed in the Board of Tax Commission, it shall act as a lien on each specific piece of real estate thereon assessed, which shall be subject to a legal mortgage after the year for the payment of the tax due on it. Ad valorem taxes are collected by the City of New Orleans and remitted to the School Board on a periodic basis. The taxes are generally collected in December, January, and February of the fiscal year. A list of property on which taxes have not been paid is published in the official journal by the City of New Orleans. If taxes are not paid within the period stipulated in the public notice, the property is sold for taxes due at a tax sale held by the City of New Orleans. The tax sale is usually held prior to the end of the School Board’s fiscal year. 45 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 4. Ad Valorem Taxes and Sales Taxes (Continued) The following is a summary of authorized and levied ad valorem taxes: Authorized Millage Constitutional Millage Dedicated Millage Purpose A Purpose B Purpose C Purpose D School Books, Materials and Supplies Early Childhood, Discipline and Dropout Programs Employee Salary, Benefits and Incentives Air Conditioning, Asbestos Removal and Facilities School Board General Obligation Bond Taxes Total Millage Levied Millage Expires 27.65 27.65 Not Applicable 1.550 1.550 2018 1.550 1.550 2018 7.270 7.270 2018 2.320 2.320 2028 4.97 4.97 2025 45.31 45.31 On July 19, 2008, the voters of Orleans Parish approved an extension of the Dedicate Millage for Purposes A, B and C for another 10 years, and Purpose D for another 20 years. All ad valorem taxes are recorded on the basis explained in Note 2. For governmental funds, revenues are recognized in the accounting period in which they become measurable and available. Property taxes are considered measurable in the calendar year of the tax levy. Available means due, or past due, and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to pay liabilities of the current period. The remaining property taxes receivable are considered available because they are substantially collected within 60 days subsequent to year end. The School Board records these taxes gross of the Assessor’s and City’s collection fees, which amounted to $3,626,213 and $3,020,474, respectively, for the year ended June 30, 2016. Since ad valorem taxes receivable are secured by property, there is no allowance for uncollectible taxes. Sales taxes are assessed and due on the first day of the month subsequent to the month of sale of any retail sales of goods used or consumed within Orleans Parish, including leases and rentals of movable tangible property. The rate of sales tax dedicated to the School Board is one and one-half percent. Revenues arising from the one percent sales tax authorized by the voters of Orleans Parish in 1966 are used exclusively for the payment of salaries of teachers and/or for the general operations of the School Board. The proceeds of the one-half percent sales tax, which was authorized in 1980, are used for the payment of salaries of teachers and other educational employees of the School Board, for the expenses of maintaining and operating schools and for providing funds to pay for capital improvements. 46 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 4. Ad Valorem Taxes and Sales Taxes (Continued) Sales taxes which remain uncollected on the twenty-first day of the month due are classified as delinquent. Sales taxes are collected by the City of New Orleans and the State of Louisiana and are remitted monthly to the School Board. The School Board records these taxes in the period that the underlying transaction occurred, including the City’s collection fees, which amounted to $2,239,859, for the year ended June 30, 2016. Note 5. Loans Receivable On April 1, 2013, as part of a New Market Tax Credit (NMTC) transaction, the OSFF advanced $6,948,587 to Wheatley NMTC Investment Fund, LLC in the form of a subordinate loan note. The note accrues interest at 1.40% and the maturity date is March 11, 2048. Interest only payments are due quarterly for the first seven years of the note, with principal and interest payments due quarterly for the remainder of the note. At maturity, final payment of all outstanding principal, accrued interest and any and all unpaid fees and others charges are due. Interest earned for the year ended June 30, 2016 totaled $48,725. The loan is collateralized by a grant of a first position security interest in all of Wheatley NMTC Investment Fund LLC rights, title and interest in its 100% membership interest in the Sub-CDE. Future maturities are as follows: Fiscal Year Ending June 30, 2017 2018 2019 2020 2021 Thereafter Total Principal $ $ 163,666 168,810 6,616,111 6,948,587 On October 22, 2013, as part of a NMTC transaction, the OSFF advanced $6,849,000 to McDonogh Elementary Investment Fund, LLC in the form of a subordinate loan note. The note accrues interest at 0.78% and the maturity date is October 23, 2045. Interest only payments are due quarterly for the first seven years of the note, with principal and interest payments due quarterly for the remainder of the note. At maturity, final payment of all outstanding principal, accrued interest and any and all unpaid fees and others charges are due. Interest earned for the year ended June 30, 2016 totaled $53,444. The loan is collateralized by a grant of a first position security interest in all of McDonogh Elementary Investment Fund, LLC rights, title and interest in its 99.99% membership interest in the Sub-CDE. 47 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 5. Loans Receivable (Continued) Future maturities are as follows: Fiscal Year Ending June 30, 2017 2018 2019 2020 2021 T hereafter Total Principal $ $ 46,915 249,467 6,552,618 6,849,000 On May 19, 2015, as part of a tax credit transaction, the OSFF advanced $6,296,500 to COCRF Investor 41, LLC in the form of a subordinate loan note. The note accrues interest at 1.43% and the maturity date is June 10, 2040. Interest only payments are due quarterly for the first seven years of the note, with principal and interest payments due quarterly for the remainder of the note. At maturity, final payment of all outstanding principal, accrued interest and any and all unpaid fees and other charges are due. Interest earned for the year ended June 30, 2016 totaled $89,993. The loan is collateralized by a multiple indebtedness leasehold mortgage, pledge of leases and rents and security agreement under Uniform Commercial Code covering certain assets. Future maturities are as follows: Fiscal Year Ending June 30, 2017 2018 2019 2020 2021 Thereafter Total Principal $ $ 6,296,500 6,296,500 48 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 5. Loans Receivable (Continued) On February 27, 2015, as part of a tax credit transaction, the OSFF advanced $18,997,332 to Drew Elementary School Facility (DESF) in the form of a subordinate loan note. The note accrues interest at 3.0% and the maturity date is February 27, 2045. Interest only payments are due monthly through April 30, 2015, with principal and interest payments due annually for the remainder of the note. At maturity, final payment of all outstanding principal, accrued interest and any and all unpaid fees and other charges are due. Interest earned for the year ended June 30, 2016 totaled $562,952. The loan is collateralized by a grant of a first position security interest in the leasehold estate, including the land and building. Future maturities are as follows: Fiscal Year Ending June 30, 2017 2018 2019 2020 2021 Thereafter Total Principal $ $ 480,800 457,050 465,750 586,191 501,204 16,074,987 18,565,982 On April 28, 2016, as part of a tax credit transaction, the OSFF advanced $28,952,908 to SBW School Facility L.L.C. (SBWSF) in the form of a subordinate loan note. The note accrues interest at 2.23% and the maturity date is April 27, 2046. Principal and interest payments are due annually for the remainder of the note. At maturity, final payment of all outstanding principal, accrued interest and any and all unpaid fees and other charges are due. Interest earned for the year ended June 30, 2016 totaled $112,989. The loan is collateralized by a grant of a first position security interest in the leasehold estate, including the land and building. Future maturities are as follows: Fiscal Year Ending June 30, 2017 2018 2019 2020 2021 Thereafter Total Principal $ $ 746,534 705,285 721,175 737,423 754,036 25,288,455 28,952,908 49 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 6. Capital Assets Capital assets and depreciation activity as of and for the year ended June 30, 2016, are as follows: Governmental Activites Assets at Cost Balance at June 30, 2015 Additions Deletions Transfers Transfers from RSD Balance at June 30, 2016 $ Accumulated Depreciation Balance at June 30, 2015 Additions Deletions Balance at June 30, 2016 Total Governmental Activities Capital Assets, Net of Accumulated Depreciation at June 30, 2016 Business-Type Activities Assets at Cost Balance at June 30, 2015 Additions Deletions Transfers Transfers from RSD Balance at June 30, 2016 * 16,591,800 4,318,382 (281,391) 4,720,397 25,349,188 $ 244,670,661 62,106,621 (36,434,113) 172,527,568 11,935,544 454,806,281 - $ 25,349,188 $ 1,440,992 1,440,992 Accumulated Depreciation Balance at June 30, 2015 Additions Deletions Balance at June 30, 2016 Total Business-Type Activities Capital Assets, Net of Accumulated Depreciation at June 30, 2016 Total Primary Government Capital Assets, Net of Accumulated Depreciation at June 30, 2016 Not being depreciated Land* Buildings and Improvements 1,440,992 $ 26,790,180 $ 67,180,853 4,944,244 (7,332,542) 64,792,555 $ $ $ 5,953,135 356,504 6,309,639 548,937 121,909 670,846 $ 12,188,174 1,201,486 13,389,660 Construction in Progress* Total $ 152,951,944 31,189,614 (172,527,568) 11,613,990 $ 426,402,579 98,816,103 (36,715,504) 16,655,941 505,159,119 10,170,985 670,365 10,841,350 $ 390,013,726 - $ Furniture and Equipment 2,548,310 - - $ $ - 5,638,793 $ $ 395,652,519 $ - 2,548,310 11,613,990 - 77,351,838 5,614,609 (7,332,542) 75,633,905 $ 429,525,214 $ - $ $ - 11,613,990 7,394,127 356,504 7,750,631 548,937 121,909 670,846 $ 7,079,785 $ 436,604,999 50 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 6. Capital Assets (Continued) The School Board reviewed its capital assets and noted no impairment as of June 30, 2016. Depreciation expense and loss on disposals for the year ended June 30, 2016, was charged to the following governmental functions: Instruction Regular Education Programs Special Education Programs Other Education Programs Support Student Services Instructional Staff Services General Administration School Administration Business and Central Services Transportation Services Central Services Plant Services Total Note 7. Depreciation $ 1,131,764 382,076 988,246 Loss on Disposals $ 456,726 393,811 927,854 177,617 138,763 279,119 158,342 580,291 $ 5,614,609 5,922,869 1,999,523 5,171,795 2,390,185 2,060,932 4,855,743 929,522 726,191 1,460,713 828,650 3,036,840 $ 29,382,963 Pension Plans Teachers’ Retirement System of Louisiana Plan Description - Employees of the School Board are provided with pensions through a cost-sharing multiple-employer defined benefit plan administered by the Teachers’ Retirement System of Louisiana (TRSL). Chapter 2 of Title 11 of the Louisiana Revised Statutes (La. R.S. 11:401) grants to TRSL Board of Trustees and the Louisiana Legislature the authority to review administration, benefit terms, investments, and funding of the plan. TRSL issues a publicly available financial report that can be obtained at www.trsl.org. Benefits Provided The following is a description of the plan and its benefits and is provided for general informational purposes only. TRSL provides retirement, deferred retirement option (DROP), disability, and survivor’s benefits. Participants should refer to the appropriate statutes for more complete information. 51 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 7. Pension Plans (Continued) Benefits Provided (Continued) Normal Retirement Regular Plan - Members whose first employment makes them eligible for membership in a Louisiana state retirement system on or after July 1, 2015, may retire with a 2.5% benefit factor after attaining age sixty-two with at least 5 years of service credit and are eligible for an actuarially reduced benefit with 20 years of service at any age. Members hired between January 1, 2011 and June 30, 2015 may retire with a 2.5% benefit factor after attaining age sixty with at least 5 years of service credit and are eligible for an actuarially reduced benefit with 20 years of service at any age. Members hired between July 1, 1999 and December 21, 2010, are eligible for a 2.5% benefit factor at the earliest of age 60 with 5 years of service, age 55 with 25 years of service, or at any age with 30 years of service. Members may retire with an actuarially reduced benefit with 20 years of service at any age. If hired before July 1, 1999, members are eligible for a 2% benefit factor at the earliest of age 60 with 5 years of service, or at any age with 20 years of service and are eligible for a 2.5% benefit factor at the earliest of age 65 with 20 years of service, age 55 with 25 years of service, or at any age with 30 years of service. Plan B - Members may retire with a 2.0% benefit factor at age 55 with 30 years of service, or age 60 (first employed between January 1, 2011 – June 30, 2015) with 5 years of service, or age 62 (first employed after July 1, 2015) with 5 years of service, or an actuarially reduced benefit with 20 years of service at any age. For all plans, retirement benefits are based on a formula which multiplies the final average compensation by the applicable benefit factor, and by the years of creditable service. For Regular Plan and Plan B members whose first employment makes them eligible for membership in a Louisiana state retirement system on or after January 1, 2011, final average compensation is defined as the highest average 60-month period. For all other members, final average compensation is defined as the highest average 36-month period. A retiring member is entitled to receive the maximum benefit payable until the member’s death. In lieu of the maximum monthly benefit, the member may elect to receive a reduced benefit payable in the form of a Joint and Survivor Option, or as a lump sum that can not exceed 36 months of the members’ maximum monthly benefit amount. Effective July 1, 2009, members may make an irrevocable election at retirement to receive an actuarially reduced benefit which increases 2.5% annually, beginning on the first retirement anniversary date, but not before age 55 or before the retiree would have attained age 55 in the case of a surviving spouse. This option can be chosen in combination with the above options. Deferred Retirement Option Program (DROP) In lieu of terminating employment and accepting a service retirement, an eligible member can begin participation in the Deferred Retirement Option Program (DROP) on the first retirement eligibility date for a period not to exceed the third anniversary of retirement eligibility. Delayed participation reduces the three year participation period. During participation, benefits otherwise payable are fixed, and deposited in an individual DROP account. Upon termination of DROP, the member can continue employment and earn additional accruals to be added to the fixed pre-DROP benefit. Upon termination of employment, the member is entitled to the fixed benefit, an additional benefit based on post-DROP service (if any), and the individual DROP account balance which can be paid in a lump sum or an additional annuity based upon the account balance. 52 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 7. Pension Plans (Continued) Benefits Provided (Continued) Disability Benefits Active members whose first employment makes them eligible for membership in a Louisiana state retirement system before January 1, 2011, and who have five or more years of service credit are eligible for disability retirement benefits if certified by the State Medical Disability Board (SMDB) to be disabled from performing their job. All other members must have at least 10 years of service to be eligible for a disability benefit. Calculation of the disability benefit as well as the availability of a minor child benefit is determined by the plan to which the member belongs and the date on which the member’s first employment made them eligible for membership in a Louisiana state retirement system. Survivor Benefits A surviving spouse with minor children of an active member with five years of creditable service (2 years immediately prior to death) or 20 years of creditable service is entitled to a benefit equal to the greater of (a) $600 per month, or (b) 50% of the member’s benefit calculated at the 2.5% accrual rate for all creditable service. When a minor child(ren) is no longer eligible to receive survivor benefits, the spouse’s benefit reverts to a survivor benefit in accordance with the provisions for a surviving spouse with no minor child(ren). Benefits for the minor child(ren) cease when he/she is no longer eligible. Each minor child (maximum of 2) shall receive an amount equal to the greater of (a) 50% of the spouse’s benefit, or (b) $300 (up to 2 eligible children). Benefits to minors cease at attainment of age 18, marriage, or age 23 if enrolled in an approved institution of higher education. A surviving spouse without minor children of an active member with 10 years of creditable service (2 years immediately prior to death) or 20 years of creditable service is entitled to a benefit equal to the greater of (a) $600 per month, or (b) the option 2 equivalent of the benefit calculated at the 2.5% accrual rate for all creditable service. Permanent Benefit Increases/Cost-of-Living Adjustments As fully described in Title 11 of the Louisiana Revised Statutes, the System allows for the payment of permanent benefit increases, also known as cost-of-living adjustments (COLAs) that are funded through investment earnings when recommended by the Board of Trustees and approved by the State Legislature. Contributions The employer contribution rate is established annually under La. R.S. 11:101-11:104 by the Public Retirement Systems’ Actuarial Committee (PRSAC), taking into consideration the recommendation of the System’s actuary. Each sub plan pays a separate actuarially determined employer contribution rate. However, all assets of TRSL are used for the payment of benefits for all classes of members, regardless of their plan. The rates in effect during the fiscal year ended June 30, 2016 are as follows: 2016 TRSL Sub Plan K-12 Regular Plan Plan B Contributions Employee Employer 8.00% 26.30% 5.00% 28.80% 53 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 7. Pension Plans (Continued) Contributions (Continued) The School Board’s contractually required composite contribution rate for the year ended June 30, 2016 was 25.0% of annual payroll, actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any Unfunded Actuarial Accrued Liability. Contributions to the pension plan from the School Board were $7,169,650 for the year ended June 30, 2016. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2016, the School Board reported a liability of $65,549,001 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015 and the total pension liability used to calculate the net pension obligation was determined by an actuarial valuation as of that date. The School Board’s proportion of the net pension liability was based on a projection of the School Board’s longterm share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. At June 30, 2015, the School Board’s proportion was 0.60963%, which was an increase of 0.02183% from its proportion measured as of June 30, 2014. For the year ended June 30, 2016, the School Board recognized pension expense of $4,537,296 plus employer’s amortization of change in proportionate share and differences between employer contributions and proportionate share of contributions, $2,041,034. At June 30, 2016, the School Board reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Deferred Outflows of Resources Deferred Inflows of Resources $ $ - Changes of assumptions - Net difference between projected pension plan investments - Changes in proportion and differences between School Board contributions and proportionate share of contributions 7,273,218 School Board contributions subsequent to the measurement date 7,169,650 Total $ 14,442,868 752,206 1,446,578 751,983 - $ 2,950,767 $7,169,650 reported as deferred outflows of resources related to pensions resulting from School Board contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2017. 54 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 7. Pension Plans (Continued) Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Amortization Amounts Year Ended June 30: 2017 2018 2019 2020 $ $ $ $ 957,097 957,097 957,097 1,451,137 Actuarial Assumptions A summary of the actuarial methods and assumptions used in determining the total pension liability as of June 30, 2015 are as follows: Actuarial cost method Amortization approach Actuarial assumptions: Expected remaining service lives Investment rate of return Inflation rate TRSL Entry Age Normal Closed 5 years 7.75% net of investment expenses 2.5% per annum Projected salary increases 3.5% - 10.0% (varies depending on duration of service) Cost-of-living adjustments None Mortality RP-2000 Mortality Table with projection to 2025 using Scale AA Disability and Termination Based on a five year (2008-2012) experience study of the System's members The actuarial assumptions used in the June 30, 2015 valuation were based on the results of an actuarial experience study for the period July 1, 2007 and ending June 30, 2012. 55 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 7. Pension Plans (Continued) Actuarial Assumptions (Continued) The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and an adjustment for the effect of rebalancing/diversification. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of June 30, 2015, are summarized in the following table: Asset Class Target Allocation 31.00% 19.00% 14.00% 7.00% 29.00% Domestic Equity International Equity Domestic Fixed Income International Fixed Income Alternative Investments Long-Term Expected Real Rate of Return 4.71% 5.69% 2.04% 2.80% 5.94% 100.00% Discount Rate The discount rate used to measure the total pension liability was 7.75%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Employer’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the School Board’s proportionate share of the net pension liability using the discount rate of 7.75%, as well as what the School Board’s proportionate share of the net pension obligation would be if it were calculated using a discount rate that is one percentage-point lower (6.75%) or one percentage-point higher (8.75%) than the current rate: School Board's Proportionate Share of the TRSL Net Pension Liability 1.0% Decrease Current Discount Rate $ $ 82,943,310 65,549,001 1.0% Increase $ 50,754,805 56 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 7. Pension Plans (Continued) Support of Non-Employer Contributing Entities Contributions received by a pension plan from non-employer contributing entities that are not in a special funding situation are recorded as revenue by the respective pension plan. The School Board recognizes revenue in an amount equal to their proportionate share of the total contributions to the pension plan from these non-employer contributing entities. During the year ended June 30, 2016, the School Board recognized revenue as a result of support received from non-employer contributing entities of $228,157 for its participation in TRSL. Pension Plan Fiduciary Net Position Detailed information about the pension plan’s fiduciary net position is available in the separately issued TRSL 2015 Comprehensive Annual Financial Report at www.trsl.org. Payables to the Pension Plan As of June 30, 2016, the School Board had payables to the plan of $663,971 (Regular Plan) and $44,181 (Plan B). Louisiana School Employees’ Retirement System Some School Board employees participate in the Louisiana School Employees’ Retirement System (the System), which is a cost-sharing, multiple-employer public employee retirement system. The system is administered and controlled at the State level by a separate board of trustees with contribution rates and benefit provisions approved by the Louisiana Legislature. The School Board does not consider the amounts related to the School Board’s proportionate share of the net pension liability associated with the System to be material to the financial statements. The System issues a publicly available financial report that can be obtained at www.lsers.net. Funding Policy Contributions to the System plan is required and determined by State statute (which may be amended) and are expressed as a percentage of covered payroll. The contribution rate in effect for the year ended June 30, 2016, for the School Board was 30.20% and for covered employees was 8.0% effective July 1, 2010 for new System members and 7.5% for existing System members. As provided by Louisiana Revised Statute 11:103, the School Board’s contributions are determined by actuarial valuation and are subject to change each year based on the results of the valuation for the prior fiscal year. The contributions made to the System for the past three fiscal years, which substantially equaled the required contributions for each of these years, were $210,011, $193,999, and $136,670 for the years ended June 30, 2016, 2015 and 2014, respectively. 57 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 8. Other Post Employment Benefits (OPEB) In accordance with state statutes, the School Board provides certain post employment health care to its retired employees. Substantially all of the School Board's employees may become eligible for such benefits upon reaching retirement age, if they are currently participating in the active health plan. Starting on February 1, 2006, the School Board paid approximately 25% of the health insurance costs for retired employees and their covered dependents. Retirees contribute 75% of the retiree and dependent coverage premiums. Retirees who are eligible for Parts A and B of Medicare pay a reduced premium for health coverage. Prior to February 1, 2006, the School Board had a traditional fully-insured Health Insurance Plan and recorded expenditures as premiums were paid. On February 1, 2006, the School Board changed to a self insured Health Insurance Plan and records expenditures as amounts are remitted to Blue Cross Blue Shield Louisiana, a third party administrator that reimbursed medical providers for participant claims. For the year ended June 30, 2016, the School Board's cost for providing all health care benefits to the 301 retired employees and their dependents amounted to $1,194,516. The School Board follows Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Post Employment Benefits Other than Pensions (GASB 45). Annual OPEB Cost The School Board’s Annual Required Contribution (ARC) is an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, would cover normal cost each year and amortize any unfunded actuarial liabilities (UAL) over a period not to exceed thirty years. A level dollar, closed amortization period has been used. The total ARC for the fiscal year beginning July 1, 2015 is $822,000, as set forth below. Normal Cost Interest on Normal Cost Amortization Payment Interest on Amortization Payment Annual Required Contribution (ARC) $ 71,000 3,000 719,000 29,000 $ 822,000 58 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 8. Other Post Employment Benefits (OPEB) Annual OPEB Cost (Continued) The following table shows the School Board’s OPEB Obligation for the fiscal year 2016: Beginning Net OPEB Obligation, July 1, 2015 Annual Required Contribution Interest on Net OPEB Obligation ARC Adjustment OPEB Cost Contributions Made Current Year Retiree Premium $ 684,000 822,000 27,000 (24,000) 825,000 1,020,000 Change in Net OPEB Obligation (195,000) $ Ending Net OPEB Obligation, June 30, 2016 489,000 The following table shows the School Board’s annual Post-Employment Benefits (PEB) cost, percentage of the cost contributed, and the net unfunded Post-Employment Benefits (PEB) liability: Fiscal Year Ended June 30, 2016 June 30, 2015 June 30, 2014 Annual OPEB Cost $ $ $ 825,000 731,000 733,000 Percentage of Annual Cost Contributed Net OPEB Liability (Asset) 123.64% $ 127.50% $ 118.01% $ 489,000 684,000 885,000 59 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 8. Other Post Employment Benefits (OPEB) (Continued) Funded Status and Funding Progress In the fiscal year ended June 30, 2016, the School Board made no contributions to its post employment benefits plan trust since such a trust had not been established. The plan was not funded at all, has no assets, and hence has a funded ratio of zero. As of July 1, 2015, the most recent actuarial valuation, the Actuarial Accrued Liability (AAL) was $20,136,000, which is defined as that portion, as determined by a particular actuarial cost method (the School Board uses the Projected Unit Credit Cost Method), of the actuarial present value of post employment plan benefits and expenses which is not provided by normal cost. Since the plan was not funded in fiscal year 2015-2016, the entire actuarial liability of $20,136,000 was unfunded. Below is the schedule of funding progress for the year ended June 30, 2016: Fiscal Year 2016 2015 2014 Actuarial Valuation Date 7/1/2015 7/1/2014 7/1/2013 (a) Actuarial Value of Assets $ - (b) Actuarial Accrued Liability (AAL) (b-a) Unfunded AAL (UAAL) $ 20,136,000 17,439,000 17,508,000 $ 20,136,000 17,439,000 17,508,000 (a/b) (c) Funded Ratio Covered Payroll 0% 0% 0% $ 31,824,242 33,109,777 31,380,631 ((b-a)/c) UAAL as a Percentage of Covered Payroll 63% 53% 56% Actuarial Methods and Assumptions Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. The actuarial valuation for post employment benefits includes estimates and assumptions regarding (1) termination probabilities; (2) retirement rate; (3) health care cost trend rate; (4) participation assumption; (5) mortality rate and age based morbidity; (6) discount rate (investment return assumption); (7) non-claim expenses; and (8) salary increase assumption. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. The actuarial calculations are based on the types of benefits provided under the terms of the substantive plan (the plan as understood by the School Board and its employee plan members) at the time of the valuation and on the pattern of sharing costs between the School Board and its plan members to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate the potential effects of legal or contractual funding limitations on the pattern of cost sharing between the School Board and plan members in the future. Consistent with the long-term perspective of actuarial calculations, the actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial liabilities and the actuarial value of assets. Actuarial Cost Method The ARC is determined using the Projected Unit Credit Cost Method with benefits attributed from the date of hire to expected retirement age. The employer portion of the cost for retiree medical care in each future year is determined by projecting the current cost levels using the healthcare cost trend rate and discounting this projected amount to the valuation date using the other described pertinent actuarial assumptions, including the investment return assumption (discount rate), mortality and turnover. 60 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 8. Other Post Employment Benefits (OPEB) (Continued) Actuarial Value of Plan Assets Since the ARC has not yet been funded, there are not any assets. It is anticipated that, if funding should take place in the future, a smoothed market value consistent with Actuarial Standards Board Actuarial Standards of Practice Number 6 (ASOP 6) would be used, as provided in paragraph number 125 of GASB Statement No. 45. Termination The rate of withdrawal for reasons other than death and retirement were developed from the Teachers’ Retirement System of Louisiana (TRSL) Actuarial Valuation as of June 30, 2015. Sample termination probabilities are as follows: Age < 1 Year 20 25 30 35 40 45 50 55 60 20.0% 18.0% 19.0% 18.0% 16.5% 16.3% 17.5% 17.5% 20.0% Years of Service 1 - 2 Years 2 - 3 Years 20.0% 12.6% 12.0% 11.7% 12.3% 9.9% 11.2% 10.6% 10.6% 9.5% 9.5% 10.9% 9.5% 9.0% 9.0% 9.0% 9.0% 9.0% 4+ Years 18.0% 9.0% 5.3% 4.0% 3.7% 4.0% 4.0% 4.0% 4.0% Eligibility Criteria To be eligible for retiree health benefits, a retired employee must have met the requirements for retirement eligibility through the Teachers’ Retirement System of Louisiana (TRSL): • Employees hired on or after July 1, 2015:  Age 62 with 5 years of service, or  20 years of service at any age (actuarially reduced benefit) • Employees hired on or after July 1, 2011 and before July 1, 2015:  Age 60 with 5 years of service, or  20 years of service at any age (actuarially reduced benefit) • Employees hired on or after July 1, 1999 and before July 1, 2011:  Age 60 with 5 years of service, or  Age 55 with 25 years of service, or  30 years of service at any age, or  20 years of service at any age (actuarially reduced benefit) • Employees hired before July 1, 1999:  Age 60 with 5 years of service, or  20 years of service at any age 61 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 8. Other Post Employment Benefits (OPEB) (Continued) Investment Return Assumption (Discount Rate) GASB Statement No. 45 states that the investment return assumption should be the estimated long-term investment yield on the investments that are expected to be used to finance the payment of benefits. Based on the assumption that the ARC will be funded, a 4.0% annual investment return has been used in this valuation. Amortization Method The unfunded actuarial accrued liability is amortized over the period of 30 years on an open basis. It is calculated assuming a level percentage of projected payroll. Health Care Cost Trend Rate The following annual trend rates are applied on a select and ultimate basis: Benefit Pre 65 Medical/Rx benefits Post Medicare benefits Administrative Fees Select 7.5% 6.5% 4.5% Ultimate 4.5% 4.5% 4.5% Select trends are reduced 0.5% each year until reaching the ultimate trend. Participation Assumption The participation assumption is the assumed percentage of future retirees that participate and enroll in the health plan. The participation assumption used in this valuation is 25% for pre-65 retirees and 70% of pre-65 enrollees continuing coverage beyond age 65, and is based on data provided by the School Board. Per Capita Health Claim Cost Per capita health claim costs for the School Board’s plan are developed using a blend of historical claims experience and manual claim costs. The annual age 60 and age 70 per capita health claim costs by plan are show below: Age 60 Age 70 $8,548 $11,221 62 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 8. Other Post Employment Benefits (OPEB) (Continued) Age Based Morbidity The assumed per capita health claim costs are adjusted to reflect expected increases related to age. The increase in per capita health claim costs related to age are assumed to be the following: Age 42 - 46 47 - 51 52 - 56 57 - 61 62 - 64 Increase 3.19% 3.89% 3.58% 4.52% 5.06% Age 65 - 69 70 - 74 75 - 79 80 - 84 85 - 89 Increase 3.00% 2.50% 2.00% 1.00% 0.05% Post-65 Plan Election It is assumed that all future post-65 retirees elect the fully-insured Humana plan. Pre-65 Plan Costs The current annual plan costs assumed in the valuation of excise tax are based on the School Board’s current premium information and plan enrollment and are estimated to be $11,300 per year for retirees and $11,500 per year for spouses. Contributions Premiums and employer contributions are assumed to increase with healthcare cost trend in future years. Mortality RP-2014 Generational Table with MP-2015 Projection Scale and applied on a gender-specific basis. Retirement Age Annual retirement probabilities were development from the TRSL Actuarial Valuation as of June 30, 2015. Sample retirement ages and associated probabilities are as follows: Age 50 55 60 65 70 71 72 73 74 75 Years of Service (Teachers) 30+ Years < 25 Years 25 - 29 Years 3% 15% 25% 20% 20% 20% 20% 20% 20% 100% 5% 75% 30% 20% 30% 30% 30% 30% 30% 100% 30% 30% 20% 30% 40% 20% 25% 25% 25% 100% 63 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 8. Other Post Employment Benefits (OPEB) (Continued) Salary Increase Assumption The salary increase assumption is 3.5% per annum. Census Data The census data was provided by the School Board as of September 2016. CPI Trend Health CPI is assumed to increase at a rate of 3% each year. Inflation Rate Inflation rate is assumed a rate of 3% per year. Excise Tax Threshold The 2018 annual threshold costs for excise tax, trended by CPI to 2020, are as follows: Active Single Active Family Pre-65 Retiree Single Pre-65 Retiree Single $ $ $ $ 10,200 27,500 11,850 30,950 Spousal Coverage The assumed number of eligible dependents is based on the current proportions of single and family contracts. If spouse date of birth information was not available, then males were assumed to be 3 years older than their spouse. Medicare Eligibility All future retirees are assumed to be eligible for Medicare at age 65. Non-Claim Expenses Non-claim expenses are based on the current amounts charged per retired employee. These amounts are provided in the table below: Expense Type Stop Loss - Specific (Single) Stop Loss - Specific (Family) Administrative Fee Cost Per Retired Employee Per Month PPO $18.27 $48.76 $35.84 64 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 9. Long-Term Obligations All of the bonds and notes payable of the School Board are reported in the GWFS and are serviced by the debt service funds with revenues as described below. Bonds Payable Range of Interest in Remaining Years Refunding Bonds Series 2010 - Issued September 1, 2010 2.50 - 5.00% 9/1/2020 Revenue Bonds QSCB 2011 - Issued December 20, 2011 4.40% 2/1/2021 Total Balance as of June 30, 2016 Final Maturity $ 51,615,000 79,055,000 $ 130,670,000 Refunding Bonds The Refunding Bond is a special limited School Board obligations payable from and secured by pledge of and lien on ad valorem taxes, sales taxes and revenue sharing. The bonds do not constitute general indebtedness or pledge of the general credit of the School Board. $97,005,000 Public School Refunding Bonds, dated September 1, 2010 – The purpose of the bonds was to refund the outstanding (a) General Obligation School Bonds Series 1995, (b) General Obligation School Bonds, Series 1996, (c) General Obligation School Bonds, Series 1997, (d) General Obligation School Bonds, Series 1997A, (e) General Obligation School Bonds, Series 1998A, and (f) General Obligation School Bonds, Series 1998B. The debt will be paid from the unlimited ad valorem taxation. Revenue Bonds $79,055,000 Public School Revenue Bonds (Taxable QSCB), Series 2011B – The Qualified School Construction Bonds (QSCB) were issued for the purpose of construction, rehabilitation, and repair of public school facilities, including the equipping of school facilities. The bonds are secured by and payable from the revenues from the ad valorem tax and the ½% sales and use tax. The School Board irrevocably designated the Series 2011B bonds as “Qualified School Construction Bonds” as defined in Section 54F of the Internal Revenue Code and has elected under Section 6431(f)(1) of the Code to receive a subsidy from the United States Department of the Treasury equal to the lesser of the amount of interest payable on the Series 2011A Bonds if interest were determined at the applicable credit rate determined under Section 54A(b)(3) of the Code. The QSCB Revenue Bonds Sinking Fund issued on December 20, 2011 mature on February 1, 2021. The School Board is required to establish and make annual deposits to a sinking fund in order to pay the bonds when they mature. The required sinking fund minimum value at June 30, 2016 was $22,587,143. The actual balance of the sinking fund at June 30, 2016, was $22,587,143, which equals the required deposit. 65 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 9. Long-Term Obligations (Continued) Debt Service Requirements The annual requirements to amortize all long-term debt outstanding at June 30, 2016, excluding capital leases, accrued compensated absences and claims payable is as follows: Year Ending June 30, Refunding Bonds Principal Interest Principal Revenue Bonds Interest Principal * Total - All Debt Interest 2017 2018 2019 2020 2021 $ 10,375,000 10,880,000 11,420,000 9,240,000 9,700,000 $ 2,243,475 1,730,000 1,196,600 705,150 242,500 $ 79,055,000 $ 3,478,420 3,478,420 3,478,420 3,478,420 3,478,420 $ 10,375,000 10,880,000 11,420,000 9,240,000 88,755,000 $ 5,721,895 5,208,420 4,675,020 4,183,570 3,720,920 Total $ 51,615,000 $ 6,117,725 $ 79,055,000 $ 17,392,100 $ 130,670,000 $ 23,509,825 * The School Board received a federal borrowing subsidy related to the interest payments. Long-Term Obligations Refunding Bonds Series 2010 Unamortized Premium on 2010 Bond Revenue Bonds QSCB 2011 Bond Unamortized Premium on QSCB 2011 Bond OPEB Obligation Payable Pension Obligation Payable Accrued Compensated Absences Liability for Claims Payable Total Long-Term Obligations Additions/ Change in Estimates Beginning Balance $ 61,520,000 4,030,092 $ 79,055,000 357,766 684,000 60,078,661 7,566,718 31,610,128 $ 244,902,365 - Retirements/ Debt Forgiveness $ (195,000) 5,470,340 (4,964,442) 73,806 $ 384,704 9,905,000 780,017 $ 64,078 $ 10,749,095 Balance Due Within One Year Ending Balance 51,615,000 3,250,075 $ 79,055,000 293,688 489,000 65,549,001 2,602,276 31,683,934 $ 234,537,974 10,375,000 780,017 64,078 - $ 11,219,095 Bond Indentures There are a number of limitations and restrictions contained in the various bond indentures. The School Board is in compliance with all significant covenants. Statutory Debt Limit As of June 30, 2016, the statutory debt limit for general obligation bonds was $888,951,414, and the net legal debt margin was $859,001,584. At June 30, 2016, the primary government has accumulated $56,058,162 in the debt service funds for future debt requirements. 66 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 10. Leases Operating Leases The School Board owns the building in which its offices are held and created the Enterprise Fund - Timbers Fund. Future annual rental payments to be received for these leases are as follows: Fiscal Year Ending June 30, 2017 2018 2019 2020 2021 Thereafter Total Amount $ 331,944 251,424 81,656 29,117 26,965 321,112 $ 1,042,218 The following are the amounts expected to be charged internally to the School Board for rent and utilities: Fiscal Year Ending June 30, Amount 2017 2018 2019 $ 689,556 689,556 57,463 Total $ 1,436,575 67 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 11. Changes in Agency Funds - Deposits Due Others Balance at July 1, 2015 Agency Fund Student Activity Total Note 12. Additions Balance at June 30, 2016 Deletions $ 305,156 $ 1,003,370 $ 1,028,342 $ 280,184 $ 305,156 $ 1,003,370 $ 1,028,342 $ 280,184 Due To/From Other Funds Individual balances due to/from other funds at June 30, 2016, are as follows: Due To Other Funds Governmental Funds General Fund Master Plan Fund $ Enterprise Funds Fiduciary Funds Total 374,562 1,690,936 Due From Other Funds $ $ 2,065,498 1,690,936 374,562 $ 2,065,498 The primary purpose of interfund receivables/payables are to loan monies from the General Fund to individual funds through operating transfers. All interfund payables are expected to be repaid within the next fiscal year. 68 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 12. Due To/From Other Funds (Continued) Equity in Pooled Cash To the extent possible, cash is pooled into common pooled accounts in order to maximize investment opportunities. Each fund whose funds are deposited in the pooled cash account has equity therein. Pooled cash at June 30, 2016, was as follows: Governmental Activities General Fund Pass-Through Fund General Obligation Fund QSCB Fund Hurricane Katrina Restoration Fund Capital Projects Fund QSCB Construction Fund Master Plan Fund Direct-Run Schools R&M Capital Projects Federal Grant Fund Other Governmental Funds, Net Internal Service Fund, Net $ $ Business-Type Activities Timbers 1,951,504 $ Note 13. 67,371,172 (12,709,378) 21,665,170 11,924,115 (15,160,407) 10,724,744 52,242,003 18,600,821 20,046,461 (8,451,909) 12,428,433 5,375,527 184,056,752 186,008,256 On-Behalf Payments for Fringe Benefits and Salaries On-behalf payments for fringe benefits and salaries are direct payments made by an entity (the paying agent) to a third-party recipient for the employees of another legally separate entity (the employer entity). GASB Statement No. 24 requires employer governments to recognize revenue and expenditures or expenses for these on-behalf payments. The state of Louisiana made pension contributions directly to the Teachers’ Retirement System of Louisiana on behalf of the School Board in the amount of $197,190 for the year ended June 30, 2016. On-behalf revenues and related expense are recorded in the General Fund. 69 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 14. Act No. 640 Act No. 640 of the 2010 Regular Session of the Louisiana Legislature allows the School Board to exclude certain costs from the amount of local revenues that it would otherwise be required to transfer to the Recovery School District to fund certain legacy cost arising from Hurricane Katrina and Act 35 of the 2010 Extraordinary Legislative Session. The exclusion is limited to $6 million dollars each year, although any excess in cost may be carried over to the next fiscal year. Legacy costs as of June 30, 2016 are as follows: Legacy Costs Carryover from Prior Fiscal Year Employer’s Cost of Health Insurance for Retired Participants in the Board’s Plan as of July 1, 2015, not to Exceed 25% of Total Premium Costs A Supplement of $200 per Month for Health Insurance Premiums for Retired Participants in the Board’s Plan as of July 1, 2015 Workers’ Compensation Claims Filed Against the Board Prior to August 29, 2005, including Administrative Costs Costs to Defend Legal Claims Against the Board Prior to August 29, 2005 Legal Claims Against the Board after August 29, 2005 Attributable to Hurricane Katrina or Act 35 of 1995 1st Extraordinary Session Cost of Short-Term Borrowing, Including but not Limited to Attorney Fees and Interest Fee of One-Tenth of One Percent of Total Ad Valorem and Sales Taxes Collected Total Maximum Allowed Carryover to Next Fiscal Year 2016 $ 737,304 476,200 935,664 391,694 6,599 171,362 286,155 3,004,978 $ (6,000,000) - The exclusion expires (1) once the above costs are extinguished, (2) upon action by the Orleans Parish School Board to reduce the constitutional millage from the level in effect for fiscal year 2009-2010, (3) 12 months following the full settlement of the Orleans Parish School Board Special Community Disaster Loans, or (4) 20 tax years from the roll forward millage adoption, whichever occurs first. 70 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 15. Act No. 543 Act 543 of the 2014 Regular Session of the Louisiana Legislature requires the establishment of a school facilities preservation program (the “program”). The program is to be funded by the following sources: • • The proceeds of local sales taxes at a rate equivalent to the rate being used as of July 1, 2014, by the OPSB to pay school facility debt. The proceeds from property taxes dedicated to capital outlay and authorized by voters after July 1, 2014. Each year, OPSB is required to transfer to the RSD a proportion of the funds equal to the proportion of students attending school on campuses that are in the school district and that are controlled by the RSD to the total number of students attending school on campuses that are in the school district that are controlled by either OPSB or the RSD, based on the February 1st student enrollment counts. Student enrollment for each campus are as follows: OPSB Controlled Campuses RSD Controlled Campuses Total Students Enrolled in the School District 12,143 31,023 43,166 Percentage of Students Enrolled at OPSB Controlled Campuses 28% Percentage of Students Enrolled at RSD Controlled Campuses 72% A schedule of the amount of funds generated for the program, and the amount retained by the OPSB and the amount transferred to the RSD follows: Source of Funds: Sales Taxes $ 7,420,549 $ 7,420,549 Amount Retained by the OPSB (28%) $ 2,087,470 Amount Transferred to the RSD (72%) $ 5,333,079 Total Funds Available 71 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 16. Litigation and Contingencies Claims The School Board is a defendant in several workers' compensation, personal injury, personnel action and contractual lawsuits. Provisions for losses for these lawsuits are recorded in the financial statements, principally in long-term debt obligations. Management and legal counsel for the School Board believe that the potential claims against the School Board, not covered by insurance, are covered by the recorded liability. A summary of significant claims are as follows: John Johnson, et al. vs. Orleans Parish School Board, et al., CDC No. 93-14333 c/w 94-5446, 9412996, 95-13271 (Toxic Tort) Plaintiffs filed this environmental class action law suit related to a school built on an allegedly contaminated site. Judgment was rendered in favor of the class and against the School Board (the Housing Authority of New Orleans, and the City of New Orleans were also cast in judgment). The district court approved a procedure for claims of unnamed class-members to be presented to the School Board to determine whether the facts of those claims are consistent with the Board’s records. At this time, the Board is engaged in that determination. The School Board’s liability estimate is $12,000,000. Federal and State Grants In the normal course of operations, the School Board receives grant funds from various Federal and State agencies. The grant programs are subject to audit by agents of the granting authority, the purpose of which is to ensure compliance with conditions precedent to the granting of funds. Such audits could lead to requests for reimbursement by the grantor agency for expenditures disallowed under the terms of the grants. FEMA On August 29, 2010, President Obama announced the Federal Emergency Management Agency’s (FEMA) award of $1.8 billion to the New Orleans Public Schools. This funding, plus an additional $206 million not discussed in the announcement, represent FEMA’s total funding to settle the School Board and the Recovery School District’s (RSD) eligible disaster damage claim for school facilities and contents. 72 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 16. Litigation and Contingencies (Continued) FEMA (Continued) In addition to addressing damages to facilities and contents, this award has also supported and will continue to support temporary leased facilities, nine temporary modular school campuses, temporary busing costs, and other expenses that are necessary due to the impact of Hurricane Katrina. The majority of the FEMA funding awarded to the School Board and RSD has been structured into Alternative Projects under FEMA’s Public Assistance program, which allows applicants to designate alternative ways to utilize FEMA funding to support the best interests of the community. This alternate funding vehicle will provide maximum flexibility to facilitate the implementation of the School Facilities Master Plan for Orleans Parish. The School Board has been issued in excess of 200 FEMA Project Worksheets which authorized or obligated $406.6 million. As of June 30, 2016 the School Board has submissions to FEMA totaling $252.1 million and has been reimbursed $276.4 million. The School Board plans on using the majority of the remaining authorized monies to fund Phase One of the Master Plan, and to recover properly procured and executed work in the years immediately following the disaster. Construction Contracts At June 30, 2016, the School Board had construction commitments of approximately $14.5 million. These commitments will be paid out of the Capital Projects Funds. Note 17. Interfund Operating Transfers Interfund operating transfers for the year ended June 30, 2016, were as follows: Transfers In Governmental Funds General Fund Pass-Through Fund Refunding Bond Fund Capital Projects Fund QSCB Construction Fund Master Plan Fund Direct-Run Schools R&M Capital Projects Federal Grant Fund $ Non-Major Governmental Funds Non-Major Special Revenue Funds 13,072,912 1,417,906 11,663,729 - $ - Proprietary Funds Enterprise Funds Total Transfers Out 110,550 44,600,775 $ 70,755,322 11,663,729 107,429 11,668,222 21,613,241 1,417,906 1,294,140 22,880,105 $ 70,755,322 Operating transfers between the General Fund and other funds are generally made to provide supplemental funds for program operations. 73 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 18. Risk Management The School Board is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors or omissions; workers' compensation and health insurance for its employees. The School Board has established the following internal service funds to account for and finance these risks of loss: Employee Health Insurance/Retiree Health Insurance These funds are used to account for the employee, retiree and employer contributions to, and the payment of self-insured claims for the Health Insurance Plan. On February 1, 2006, the School Board offered a selfinsured employee medical and Health Insurance Plan financed solely by employees and the School Board. The plan has a $200,000 stop-loss provision, whereby any claims incurred in excess of the amount for a single insured is covered by reinsurance purchased by the School Board. Prior to February 1, 2006, the School Board offered a fully-insured Health Insurance plan. Workers' Compensation Insurance This fund is used to account for claims arising from employment related injuries prior to July 1, 2006. The School Board maintained a self-insurance plan, which included the purchase of insurance for claims in excess of $500,000 per occurrence. The workers’ compensation limit for each accident is the statutory amount. At June 30, 2016, there were 32 active claims. Self-insured litigated claims are not reported in internal service funds, but the revenues and expenses for non-litigated claims are in the General Fund. The estimate for litigated claim liabilities is reported in the Government-Wide Financial Statements. A reconciliation of the unpaid claims liability, including the litigated claims reserve, as of June 30th is as follows: Unpaid Claims, as Previously Reported June 30, 2015 Employee Health Insurance Fund Retiree Health Insurance Fund Workers' Compensation Fund $ $ $ 46,863 514,137 Litigated Claims 1,141,302 $ 31,610,128 Total $ 33,312,430 Current Year Claims Incurred and Changes in Estimates 4,470,989 3,557,527 2,919,108 480,201 11,427,825 Claims Paid (4,512,029) (3,588,487) (1,827,574) (406,395) (10,334,485) Unpaid Claims as of Year Ended June 30, 2016 $ 5,823 $ 483,177 $ 2,232,836 $ 31,683,934 $ 34,405,770 The above unpaid claims as of June 30th include amounts for claims incurred but not yet reported, as determined from actual claims paid subsequent to year-end as well as an estimate based upon historical lag trends. 74 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 19. Deficits in Fund Equity The Hurricane Katrina Restoration Fund has a fund deficit of $16,981,355. This fund deficit is expected to be funded by making a draw down from the funds set aside for the School Board by FEMA as discussed in Note 16. The Master Plan Fund has a fund deficit of $36,195,452. This fund deficit is expected to be funded through reimbursement from funding sources for allowable expenditures that have been incurred. The Federal Grant Fund has a fund deficit of $156,570. This fund deficit is expected to be funding through reimbursement from funding sources for allowable expenditures that have been incurred. The CDBG Capital Projects Fund has a fund deficit of $2,728,981. This fund deficit is expected to be funded through the General Fund. Note 20. Contingency for Unbilled Federal Revenue Included in Due from Other Governments are $5,845,925 of amounts that are unbilled. At this time, it is uncertain whether all of these amounts will be recovered under the federal programs as they are recorded. Once the School Board has billed these amounts and received the reimbursements, adjustments will be recorded as required. Note 21. Fund Balances The nature and purpose of the fund balance designations are as follows: Nonspendable for Prepaid Items – Represents property insurance which will be used in the future fiscal period. . Nonspendable for Inventory – Represents the purchased food inventories in the Child Nutrition Fund which will be used in the future fiscal period. Restricted for Debt Service – This restriction represents the amounts restricted for payment of principal and interest maturing in future years on bonded debt. Restricted for Capital Projects – This restriction was established by funding providers or by enabling legislation for capital purchases which will be used in future fiscal periods. Committed for Capital Projects – This restriction was established by the School Board for capital purchases which will be used in future fiscal periods. Assigned to Special Programs – This represents an assignment of funds that are designated for construction and renovation projects. 75 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 22. Tax Credit Transactions The School Board and OSFF have entered into various tax credit transactions to provide financing for the construction and development of charter schools located in New Orleans, Louisiana. OSFF is a public benefit corporation which will serve as leverage lender. OSFF is a blended component unit of the School Board as described in Note 1 to the financial statements. The following is a summary of relevant information pertaining to tax credit transactions effective as of June 30, 2016: Phyllis S. Wheatley School In April 2013, the School Board and the RSD signed a cooperative endeavor agreement (CEA) to approve the transfer of the Phillis S. Wheatley School to the OSFF through a 99 year ground lease. Rent under this lease is $1 per year of the term. The CEA then required the transfer of the Phillis S. Wheatley School from OSFF to the Wheatley School Facility Foundation, Inc. (Wheatley QALICB) through the execution of a 65 year ground lease, with Wheatley QALICB obtaining debt and equity financing to complete construction of the Wheatley School. Rent under this lease is $1 per year of the term. The CEA further required the School Board to provide sufficient funds to the OSFF, by either loan or grant, as necessary to complete construction of the Wheatley School. Pursuant to this requirement, the School Board advanced $23,911,217 to OSFF, $6,948,587 of which was loaned to Wheatley NMTC Investment Fund LLC, with OSFF as the leveraged lender. The remaining $16,962,630 was provided to Wheatley QALICB as a grant to be used solely and exclusively to pay for the construction costs of the Wheatley School. See Note 5 for terms of the loan from OSFF to Wheatley NMTC Investment Fund LLC. McDonogh 42 Elementary School In October 2013, the School Board and the RSD entered into a CEA which provides for the transfer of McDonogh 42 Elementary School (McDonogh 42 School) to the OSFF through a 99 year ground lease. Rent under this lease is $1 per year of the term. The CEA then required the transfer of the McDonogh 42 Elementary School from OSFF to the McDonogh 42 School Facility, LLC (McDonogh 42 QALICB) through the execution of a 65 year ground lease, with McDonogh 42 QALICB obtaining debt and equity financing to complete construction of the McDonogh 42 School. Rent under this lease is $1 per year of the term. The CEA further required the School Board to provide sufficient funds to the OSFF, by either loan or grant, as necessary to complete construction of the McDonogh 42 School. Pursuant to this requirement, the School Board advanced $15,499,000 to OSFF, $6,849,000 of which was loaned to McDonogh Elementary Investment Fund, LLC, with OSFF as the leveraged lender. Of the remaining $8,650,000, $1,307,050 was provided to McDonogh 42 QALICB as a grant to be used solely and exclusively to pay for the construction costs of the McDonogh 42 School. See Note 5 for terms of the loan from OSFF to McDonogh Elementary Investment Fund LLC. Avery Alexander School In May 2015, the School Board and the RSD entered into a CEA which provides for the transfer of land to the OSFF through a 99 year ground lease. Rent under this lease is $1 per year of the term. The CEA then required the transfer of the land from OSFF to Alexander School Facility, LLC through the execution of a 65 year ground lease, with Alexander School Facility, LLC obtaining debt and equity financing to complete the construction of the Alexander School. The CEA further required the School Board to provide funding to finance the construction of the Alexander School. Pursuant to this requirement, the School Board granted $6,296,500 to OSFF which was then loaned to COCRF Investor 41, LLC, with OSFF as the leveraged lender. See Note 5 for terms of the loan from OSFF to COCRF Investor 41, LLC. 76 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 22. Tax Credit Transactions (Continued) Drew Elementary School In February 2015, the School Board and the RSD entered into a CEA which provides for the sale of building improvements, and the transfer of land to the OSFF through a 99 year ground lease. Rent under this lease is $1 per year of the term. The CEA then required the transfer of the land from OSFF to the Drew Elementary School Facility (DESF), LLC through the execution of a 65 year ground lease, and the sale of the building improvements to DESF, with DESF obtaining debt and equity financing to complete the construction of the Drew Elementary School. The CEA further required the School Board to provide funding to finance the purchase of the building improvements, costs for historic rehabilitation and renovation of the Drew Elementary School, and fees and expenses in connection with the project. Pursuant to this requirement, the School Board granted $18,997,332 to OSFF which was then loaned to DESF, with OSFF as the leveraged lender. See Note 5 for terms of the loan from OSFF to DESF. In addition, under the charter lease subsidy agreement entered into as of June 1, 2015, OSFF is to provide a subsidy to the charter school operator, Arise Academy, to enable the operator to fulfill its lease payment obligation to DESF. As of June 30, 2016, a total of $898,357 was paid as a subsidy. During 2016, $3,081,121 of historic tax credits were donated to OSFF from DESF. Those tax credits were subsequently sold, and the proceeds were transferred to the Master Plan fund. Sophie B. Wright High School In April 2016, the School Board and the RSD entered into a CEA which provides for the sale of building improvements, and the transfer of land to the OSFF through a 99 year ground lease. Rent under this lease is $1 per year of the term. The CEA then required the transfer of the land from OSFF to the SBW School Facility, L.L.C. (SBWSF) through the execution of a 65 year ground lease, and the sale of the building improvements to SBWSF, with SBWSF obtaining debt and equity financing to complete the construction of the Sophie B. Wright High School. The CEA further required the School Board to provide funding to finance the purchase of the building improvements, costs for historic rehabilitation and renovation of the Sophie B. Wright High School, and fees and expenses in connection with the project. Pursuant to this requirement, the School Board granted $28,952,908 to OSFF which was then loaned to SBWSF, with OSFF as the leveraged lender. See Note 5 for terms of the loan from OSFF to SBWSF. In addition, under the charter lease subsidy agreement entered into as of April 28, 2016, OSFF is to provide a subsidy to the charter school operator, Institute for Academic Excellence, to enable the operator to fulfill its lease payment obligation to SBWSF. Payments are set to commence July 1, 2016. 77 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Financial Statements Note 23. Recent Reporting and Disclosure Developments As of June 30, 2016, the Government Accounting Standards Board has issued several statements not yet implemented by the School Board. The Statements, which might impact the School Board, are as follows: Governmental Accounting Standards Board Statement No. 74 (GASB 74) The objective of GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, is to improve the usefulness of information about postemployment benefits other than pensions included in the general purpose external financial reports of state and local governmental benefit plans for making decisions and assessing accountability. This Statement is effective for financial statements for fiscal years beginning after June 15, 2016. Governmental Accounting Standards Board Statement No. 75 (GASB 75) The objective of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, is to improve the usefulness of information for decisions made by the various users of the general purpose external financial reports of governments whose employees, both active and inactive, are provided with postemployment benefits other than pensions. This Statement is effective for fiscal years beginning after June 15, 2017. Governmental Accounting Standards Board Statement No. 77 (GASB 77) The objective of GASB Statement No. 77, Tax Abatement Disclosures, is to provide financial statement users with essential information about the nature and magnitude of the reduction in tax revenues through tax abatement programs in order to better assess (a) whether current-year revenues were sufficient to pay for current-year services, (b) compliance with finance-related legal or contractual requirements, (c) where a government’s financial resources come from and how it uses them, and (d) financial position and economic condition and how they have changed over time. The requirements of this Statement are effective for reporting periods beginning after December 31, 2015. Note 24. Subsequent Events Management has evaluated subsequent events through the date that the financial statements were available to be issued, December 20, 2016, and determined that there were no events, except as noted above, which occurred which require disclosure. No subsequent events occurring after the date above have been evaluated for inclusion in these financial statements. 78 REQUIRED SUPPLEMENTARY INFORMATION - (PART II) 79 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Budgetary Comparison Schedule General Fund Fiscal Year Ended June 30, 2016 Revenues Local Sources Ad Valorem Taxes Sales and Use Tax (Including Vehicle) Earnings on Investments Donations Other State and Federal Sources Minimum Foundation Program State Revenue Sharing Other Federal Sources Total Revenues Expenditures Current Instruction Regular Programs Special Programs Other Programs Support Student Services Instructional Staff Support General Administration School Administration Business Services Student Transportation Services Central Services Plant Services Food Services Capital Outlay Other Debt Service Principal Retirement Interest and Bank Charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Original $ 15,104,485 7,123,483 100,000 4,732,777 Final $ Variance with Final Budget Positive (Negative) Actual 13,688,146 6,455,518 100,000 4,381,575 $ 11,913,137 8,122,929 39,307 1,500 3,943,697 $ (1,775,009) 1,667,411 (60,693) 1,500 (437,878) 18,131,706 2,455,088 492,000 17,507,387 2,455,088 701,575 492,000 17,716,158 2,690,500 769,129 41,399 208,771 235,412 67,554 (450,601) 48,139,539 45,781,289 45,237,756 (543,533) 14,600,062 3,880,503 1,878,278 13,827,641 3,980,503 1,622,109 13,554,994 3,958,191 1,571,703 272,647 22,312 50,406 3,264,548 2,216,168 4,130,123 2,912,152 2,055,629 3,727,752 3,338,405 8,417,956 477,862 1,510,000 3,264,038 2,162,095 3,934,618 2,808,691 2,024,934 4,327,752 2,882,303 8,010,058 460,596 1,489,836 3,520,828 2,087,964 3,836,725 2,750,339 2,023,742 4,171,244 2,349,547 7,765,991 28,002 1,300,000 (256,790) 74,131 97,893 58,352 1,192 156,508 532,756 244,067 432,594 189,836 189,835 - - - 52,599,273 50,795,174 48,919,270 1,875,904 (4,459,734) (5,013,885) (3,681,514) 1,332,371 80 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Budgetary Comparison Schedule (Continued) General Fund Fiscal Year Ended June 30, 2016 Total Other Financing Sources (Uses) Net Change in Fund Balance - Budgetary Basis Final Actual 3,100,000 - 19,278,971 3,413,885 - 19,278,971 4,293,442 13,072,912 (11,663,729) 1,600,000 1,600,000 1,600,000 4,700,000 5,013,885 26,581,596 Original Other Financing Sources (Uses) Judgments Other Transfers In Transfers Out Appropriations from Prior Year Budgetary Fund Balance $ 240,266 $ 22,900,082 - Fund Balance, June 30, 2015 879,557 13,072,912 (11,663,729) 2,288,740 $ 22,900,082 47,733,823 Less: Appropriations from Beginning of Year Fund Balance Fund Balance - Budgetary Basis, June 30, 2016 Variance with Final Budget Positive (Negative) (1,600,000) $ 69,033,905 81 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Budgetary Comparison Schedule Pass-Through Fund Fiscal Year Ended June 30, 2016 Revenues Local Sources Ad Valorem Taxes Sales and Use Tax (Including Vehicle) Earnings on Investments Other State and Federal Sources Minimum Foundation Program State Revenue Sharing Other Federal Sources Total Revenues Expenditures Current Instruction Regular Programs Special Programs Other Programs Support Student Services Instructional Staff Support General Administration School Administration Business Services Student Transportation Services Central Services Plant Services Other Food Services Capital Outlay Other Debt Service Principal Retirement Interest and Bank Charges Total Expenditures Excess of Revenues Over Expenditures Original $ Final 129,185,840 99,742,330 - $ Variance with Final Budget Positive (Negative) Actual 129,185,840 99,742,330 - $ 129,185,840 99,742,330 - $ - 46,556,720 663,056 - 46,556,720 663,056 - 46,556,720 663,056 - - 276,147,946 276,147,946 276,147,946 - 9,121,985 - 9,121,985 - 9,121,985 - - 9,121,985 9,121,985 9,121,985 - 267,025,961 267,025,961 267,025,961 - 82 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Budgetary Comparison Schedule (Continued) Pass-Through Fund Fiscal Year Ended June 30, 2016 Original Other Financing Sources (Uses) Transfers In Transfers Out Transfers Out - Charters and RSD Other Total Other Financing Sources (Uses) Final Variance with Final Budget Positive (Negative) Actual (257,619,144) (9,406,817) (257,619,144) (9,406,817) (257,619,144) (9,406,817) - (267,025,961) (267,025,961) (267,025,961) - Net Change in Fund Balance - - - - Fund Balance, June 30, 2015 - - - - Fund Balance, June 30, 2016 $ - $ - $ - $ - Budget amounts for the Pass Through Fund were set equal to actual revenues and expenditures incurred since the fund has no formal budget, all revenues recognized are fully expended or transferred out to other funds and to the Recovery School District and to charter schools. 83 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Budgetary Comparison Schedule Federal Grant Fund Fiscal Year Ended June 30, 2016 Revenues Local Sources Ad Valorem Taxes Sales and Use Tax (Including Vehicle) Earnings on Investments Other State and Federal Sources Minimum Foundation Program State Revenue Sharing Other Federal Sources Total Revenues Expenditures Current Instruction Regular Programs Special Programs Other Programs Support Student Services Instructional Staff Support General Administration School Administration Business Services Student Transportation Services Central Services Plant Services Other Food Services Capital Outlay Other Debt Service Principal Retirement Interest and Bank Charges Total Expenditures Excess of Revenues Over Expenditures Original $ Final - $ Variance with Final Budget Positive (Negative) Actual - $ - $ - 24,492,005 24,492,005 24,492,005 - 24,492,005 24,492,005 24,492,005 - 503,488 1,914,006 13,137,604 503,488 1,914,006 13,137,604 503,488 1,914,006 13,137,604 - 3,719,452 3,875,110 7,185 150,820 30,153 1,588 - 3,719,452 3,875,110 7,185 150,820 30,153 1,588 - 3,719,452 3,875,110 7,185 150,820 30,153 1,588 - - - - - - 23,339,406 23,339,406 23,339,406 - 1,152,599 1,152,599 1,152,599 - 84 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Budgetary Comparison Schedule (Continued) Federal Grant Fund Fiscal Year Ended June 30, 2016 Variance with Original Other Financing Sources Transfers In Transfers Out Transfers Out - Charters and RSD Other Final Final Budget Positive (Negative) Actual (1,294,142) - (1,294,142) - (1,294,142) - - (1,294,142) (1,294,142) (1,294,142) - Net Change in Fund Balance (141,543) (141,543) (141,543) - Fund Balance, June 30, 2015 (15,031) (15,031) (15,031) - Total Other Financing Sources (Uses) Fund Balance, June 30, 2016 $ (156,574) $ (156,574) $ (156,574) $ - The budgeted amounts of revenues and expenditures for the Federal Grant Fund were set equal to actual due to differences in grant periods compared to the fiscal period as well as extensions of grant periods. 85 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Other Post-Employment Benefits Information Fiscal Year Ended June 30, 2016 Fiscal Year 2016 2015 2014 Actuarial Valuation Date 7/1/2015 7/1/2014 7/1/2013 (a) Actuarial Value of Assets $ - (b) Actuarial Accrued Liability (AAL) (b-a) Unfunded AAL (UAAL) $ 20,136,000 17,439,000 17,508,000 $ 20,136,000 17,439,000 17,508,000 (a/b) (c) Funded Ratio Covered Payroll 0% 0% 0% $ 31,824,242 33,109,777 31,380,631 ((b-a)/c) UAAL as a Percentage of Covered Payroll 63% 53% 56% Actuarial Assumptions 2016 Actuarial Cost Method Amortization Method Amortization Period Asset Valuation Method Investment Rate of Return Projected Salary Increases Projected Unit Credit Cost Level Percentage of Payroll 30 Years - Open Basis Not Funded 4.0% 3.5% Actuarial Assumptions 2015 Actuarial Cost Method Amortization Method Amortization Period Asset Valuation Method Investment Rate of Return Projected Salary Increases Projected Unit Credit Cost Level Percentage of Payroll 30 Years - Open Basis Not Funded 4.5% 3.5% Actuarial Assumptions 2014 Actuarial Cost Method Amortization Method Amortization Period Asset Valuation Method Investment Rate of Return Projected Salary Increases Projected Unit Credit Cost Level Percentage of Payroll 30 Years - Open Basis Not Funded 4.5% 3.5% 86 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Schedule of the School Board’s Proportionate Share of Net Pension Liability For the Year Ended June 30, 2016 School Board's Proportion of the Net Pension Liability 2016 2015 0.60963% 0.58780% School Board's Proportionate Share of the Net Pension Liability $ 65,549,001 $ 60,078,661 School Board's Covered-Employee Payroll $ 28,572,101 $ 27,040,210 School Board's Proportionate Share of the Net Pension Liability as a Percentage of its Covered-Employee Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 229.4% 222.2% 62.5% 63.7% *The amounts presented have a measurement date of the previous fiscal year end. **GASB 68 requires this schedule to show information for 10 years. The School Board implemented GASB 68 in its 2015 fiscal year. Therefore, additional years will be displayed as they become available. 87 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Schedule of School Board Pension Contributions For the Year Ended June 30, 2016 2016 2015 Contractually Required Contribution $ 7,560,172 $ 7,607,985 Contributions in Relation to Contractually Required Contribution $ 7,169,650 $ 7,100,084 Contribution Deficiency (Excess) $ 390,522 $ 507,901 School Board's Covered-Employee Payroll $ 28,572,101 $ 27,040,210 Contributions as a Percentage of Covered-Employee Payroll K-12 Regular Plan 25% 28% *The amounts presented have a measurement date of the previous fiscal year end. **GASB 68 requires this schedule to show information for 10 years. The School Board implemented GASB 68 in its 2015 fiscal year. Therefore, additional years will be displayed as they become available. 88 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Required Supplementary Information For the Year Ended June 30, 2016 Note 1. Budget and Budgetary Accounting The School Board follows these procedures in establishing the budgetary data reflected in the financial statements: The General Fund and the Special Revenue Funds are the only funds with legally required budgets. The General Fund budget and the Special Revenue Funds' budgets are adopted on an annual basis. These budgets include proposed expenditures and the means of financing them. Annually, the Superintendent submits to the School Board a proposed annual appropriated budget for the General Fund and Special Revenues Funds. Public hearings are advertised and conducted to obtain taxpayer comments and the proposed budgets are published. The budget is adopted by the School Board and, as required, is submitted no later than September 30th to the State Department of Education for approval. The Superintendent is authorized to move budgeted items within the functional categories, the legal level of control, but may not increase the total amount authorized. Expenditures for Special Revenue Fund budgets, except for the Child Nutrition Program, may not exceed budgeted amounts by more than five percent unless a budget revision is approved by the State Department of Education. For the Child Nutrition Program, budget amendments follow the same requirements as the General Fund. The Capital Projects Funds’ budgets are adopted on a project basis, since such projects may be started and completed at any time during the year or may extend beyond one fiscal year. Capital Projects Funds are allocated by project using architectural and engineering estimates. All projects remain programmed and funded until completed or until the School Board decides to eliminate the project. Accordingly, budget and actual comparisons are not reported in the basic financial statements for those funds. Budgets are prepared on the modified accrual basis of accounting, consistent with GAAP. Unencumbered appropriations lapse at the end of the fiscal year. Encumbered appropriations at year end that have been approved by the Board are generally expended during the next fiscal year's operations, assuming that the underlying liability is ultimately incurred. Budgeted amounts are as originally adopted or as amended by the Board. Legally, the Board must adopt a balanced budget; that is, total budgeted revenues and other financing sources including fund balance must equal or exceed total budgeted expenditures and other financing uses. State statutes require the School Board to amend its budgets when revenues plus projected revenues within a fund are expected to be less than budgeted revenues by five percent or more and/or expenditures within a fund are expected to exceed budgeted expenditures by five percent or more. Note 2. Pension Plan Schedules Changes of Benefit Terms Members whose first employment makes them eligible for membership in a Louisiana state retirement system on or after July 1, 2015, may retire with a 2.5% benefit factor after attaining age sixty-two with at least 5 years of service credit and are eligible for an actuarially reduced benefit with 20 years of service at any age. Changes of Assumptions There were no changes of benefit assumptions for the year ended June 30, 2016. 89 OTHER SUPPLEMENTARY INFORMATION 90 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Balance Sheet - By Fund Type Non-Major Governmental Funds June 30, 2016 Assets Cash Due from Other Funds Due from Other Governments Equity in Pooled Cash Other Receivables Inventory Total Assets Liabilities and Fund Balances Liabilities Accounts Payable Due to Other Funds Due to Other Governments Equity in Pooled Cash Unearned Revenues Special Revenue Total $ 519,141 5,639,693 640,418 51,637 $ 10,036,862 - $ 519,141 15,676,555 640,418 51,637 $ 6,850,889 $ 10,036,862 $ 16,887,751 $ 434,932 519,141 70,971 $ 1,315,334 2,728,981 - $ 1,750,266 3,248,122 70,971 Total Liabilities 1,025,044 Fund Balances Nonspendable: Inventory Restricted for: Capital Projects Debt Service Committed for: Capital Projects Assigned to: Special Programs Unassigned 4,044,315 51,637 51,637 8,721,528 - - $ 5,069,359 - - Total Fund Balances Total Liabilities and Fund Balances Capital Projects 8,721,528 - - - 5,774,208 - (2,728,981) 5,774,208 (2,728,981) 5,825,845 5,992,547 11,818,392 6,850,889 $ 10,036,862 $ 16,887,751 91 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Revenues, Expenditures and Changes in Fund Balance - By Fund Type Non-Major Governmental Funds Fiscal Year Ended June 30, 2016 Revenues Local Sources Sales and Use Taxes Food Services Donations State and Federal Minimum Foundation Program Federal Sources Other Special Revenue $ Capital Projects 422,884 291,582 $ 104,803 6,508,667 802,689 Total Revenues $ 12,130,625 - 101,976 134,962 112,219 30,567 6,050,027 - 401,636 44,137 509,984 47,508 2,058,268 - 422,884 4,291,582 104,803 6,508,667 802,689 4,000,000 401,636 44,137 509,984 Total Expenditures 4,000,000 - 8,130,625 Expenditures Instruction Regular Education Programs Special Education Programs Other Education Programs Support Student Services Instructional Staff Support General Administration School Administration Business Services Plant Services Food Services Capital Outlay Debt Service Interest and Bank Charges Total 101,976 134,962 112,219 78,075 6,050,027 2,058,268 - - 7,385,508 2,105,776 9,491,284 Excess (Deficiency) of Revenues Over (Under) Expenditures 745,117 1,894,224 2,639,341 Other Financing Sources and Uses Proceeds from Debt Service Transfers In Transfers Out Transfers Out - Charter Schools Transfers Out - Recovery School District (110,550) - (4,649,425) - (110,550) (4,649,425) - (110,550) (4,649,425) (4,759,975) Net Change in Fund Balance 634,567 (2,755,201) (2,120,634) Fund Balance, June 30, 2015 5,191,278 8,747,748 13,939,026 Total Other Financing Sources (Uses) Fund Balance, June 30, 2016 $ 5,825,845 $ 5,992,547 $ 11,818,392 92 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Balance Sheet Non-Major Special Revenue Funds June 30, 2016 Assets Cash Accounts Receivable Due from Other Funds Due from Other Governments Equity in Pooled Cash Inventory Total Assets Liabilities and Fund Balances Liabilities Accounts Payable Due to Other Funds Equity in Pooled Cash Unearned Revenues State and Local Non-Recurring Operational Total $ 519,141 249,963 - $ 640,418 4,800,403 51,637 $ 589,327 - $ 640,418 519,141 5,639,693 51,637 $ 769,104 $ 5,492,458 $ 589,327 $ 6,850,889 $ 1,646 519,141 70,971 $ 428,032 - $ 5,254 - $ 434,932 519,141 70,971 Total Liabilities 591,758 Fund Balances Nonspendable: Inventory Assigned to: Special Programs 428,032 - Total Fund Balances Total Liabilities and Fund Balances Child Nutrition $ 5,254.00 51,637 1,025,044 - 51,637 177,346 5,012,789 584,073 5,774,208 177,346 5,064,426 584,073 5,825,845 769,104 $ 5,492,458 $ 589,327 $ 6,850,889 93 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Special Revenue Funds Fiscal Year Ended June 30, 2016 Revenues Local Sources Food Services Donations Other State and Federal Minimum Foundation Program Federal Funds Other State and Local $ Total Revenues Expenditures Instruction Regular Education Programs Special Education Programs Other Education Programs Support Student Services Instructional Staff Support School Administration Business Services Central Services Plant Services Food Services 291,582 - Child Nutrition $ Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources and Uses Transfers In Transfers Out $ - Total $ 422,884 291,582 - 770,373 104,803 6,508,667 32,316 - 104,803 6,508,667 802,689 1,061,955 7,068,670 - 8,130,625 320,584 44,137 509,984 Total Expenditures 422,884 - Non-Recurring Operational - 81,052 - 401,636 44,137 509,984 101,976 94,311 - 6,050,027 40,651 112,219 30,567 - 101,976 134,962 112,219 30,567 6,050,027 1,070,992 6,050,027 264,489 7,385,508 (9,037) 1,018,643 (264,489) 745,117 - (110,550) - (110,550) - (110,550) - (110,550) Net Change in Fund Balance (9,037) 908,093 (264,489) 634,567 Fund Balance, June 30, 2015 186,383 4,156,333 848,562 5,191,278 Total Other Financing Sources (Uses) Fund Balance, June 30, 2016 $ 177,346 $ 5,064,426 $ 584,073 $ 5,825,845 94 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Balance Sheet Non-Major Capital Projects Funds June 30, 2016 G.O. Bond Capital Project Fund Assets Due from Other Funds Due from Other Governments Equity in Pooled Cash Total Assets Liabilities and Fund Balances Liabilities Accounts Payable Due to Other Funds Due to Other Governments Equity in Pooled Cash CDBG Capital Projects Total $ 4,171,508 $ 5,865,354 $ - $ $ 4,171,508 $ 5,865,354 $ - $ 10,036,862 $ 179,784 - $ 1,135,550 - $ Total Liabilities Fund Balances Restricted for Capital Projects Committed for Capital Projects Unassigned 179,784 1,135,550 3,991,724 - 4,729,804 - - Total Fund Balances Total Liabilities and Fund Balances Harrah's Casino Capital Projects $ 4,171,508 2,728,981 - - 3,991,724 4,729,804 $ 5,865,354 2,728,981 $ $ 10,036,862 1,315,334 2,728,981 4,044,315 (2,728,981) 8,721,528 (2,728,981) (2,728,981) 5,992,547 - $ 10,036,862 95 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Capital Projects Funds Fiscal Year Ended June 30, 2016 G.O. Bond Capital Project Fund Revenues Local Sources Sales and Use Tax Donations State and Federal Federal Funds Other $ - Harrah's Casino Capital Projects CDBG Capital Projects $ $ - - $ 4,000,000 - - - - Total Revenues 4,000,000 Total 4,000,000 - 4,000,000 Expenditures Support General Administration Plant Services Capital Outlay 47,508 475,447 1,582,821 - 47,508 2,058,268 Total Expenditures 522,955 1,582,821 - 2,105,776 (522,955) 2,417,179 - 1,894,224 - (4,649,425) - - (4,649,425) - - (4,649,425) - (4,649,425) - (2,755,201) Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources and Uses Transfers In Transfer Out Transfers Out - Charter Schools Transfers Out - Recovery School District Total Other Financing Sources (Uses) Net Change in Fund Balance (522,955) (2,232,246) Fund Balance, June 30, 2015 4,514,679 6,962,050 Fund Balance, June 30, 2016 $ 3,991,724 $ 4,729,804 8,747,748 (2,728,981) $ (2,728,981) $ 5,992,547 96 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Net Position Proprietary Fund Type - Internal Service Funds June 30, 2016 Employee Health Insurance Assets Cash and Cash Equivalents Other Receivables Due from Other Funds Equity in Pooled Cash Prepaid Items and Other Assets $ Total Assets Liabilities and Net Position Liabilities Accounts Payable Due to Other Funds Equity in Pooled Cash Claims Payable Unearned Revenue Total Liabilities Net Position Restricted $ 123,103 463,572 Retiree Health Insurance $ 126,494 1,435,916 - Workers' Compensation Insurance $ 4,085,953 187,725 Total Internal Service Funds E-Rate $ 385,055 - $ 511,549 5,644,972 651,297 586,675 1,562,410 4,273,678 385,055 6,807,818 580,852 5,823 - 578,690 483,177 500,543 33,331 2,232,836 2,007,511 115,610 269,445 - 1,308,483 269,445 2,721,836 2,508,054 586,675 1,562,410 4,273,678 385,055 6,807,818 - $ - $ - $ - $ - 97 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Revenues, Expenses and Changes in Net Position Proprietary Fund Type - Internal Service Funds Fiscal Year Ended June 30, 2016 Employee Health Insurance Operating Revenues Employer Contributions Retiree Contributions Employee Contributions Workers Compensation Reimbursement $ Total Operating Revenues Operating Expenses General Administrative Central Services Total Operating Expenses 4,492,176 19,853 - Retiree Health Insurance $ 2,126,537 1,461,950 - Workers' Compensation Insurance $ 1,002,442 1,287,104 Total Internal Service Funds E-Rate $ - $ 7,621,155 1,461,950 19,853 1,287,104 4,512,029 3,588,487 2,289,546 - 10,390,062 4,512,029 3,588,487 83,683 2,205,863 - 83,683 10,306,379 4,512,029 3,588,487 2,289,546 - 10,390,062 Operating Income - - - - - Nonoperating Revenues Transfers In Transfers Out - - - - - Change in Net Position - - - - - Net Position at June 30, 2015 - - - - - Net Position at June 30, 2016 $ - $ - $ - $ - $ - 98 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Cash Flows Proprietary Fund Type - Internal Service Funds Fiscal Year Ended June 30, 2016 Retiree Health Insurance Employee Health Insurance Cash Flows from Operating Activities Cash Premiums Received Payments for Claims and Benefits $ Net Cash (Used in) Provided by Operating Activities 4,569,655 (4,569,655) $ $ (1,118,914) - Cash Flows from Non-Capital Financing Activities Interfund Transfers 3,141,960 (4,260,874) Workers' Compensation Insurance 1,781,755 (1,827,574) Total Internal Service Funds E-Rate $ (385,055) 385,055 (45,819) - $ 9,108,315 (10,273,048) (1,164,733) - - - - - Net Cash Provided by Non-Capital Financing Activities - - - - - Net (Decrease) Increase in Cash - (1,118,914) (45,819) - (1,164,733) Cash, Beginning of Year - 1,118,914 45,819 - 1,164,733 Cash, End of Year $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Reconciliation of Operating Income to Net Cash (Used in) Provided by Operating Activities Operating Income Adjustments to Reconcile Operating Income to Net Cash (Used in) Provided by Operating Activities: Changes in: Other Receivables Due from Other Funds Equity in Pooled Cash Prepaid Items and Other Assets Accounts Payable Unearned Revenue Due to Other Funds Claims Payable/Self-Insured Net Cash (Used in) Provided by Operating Activities $ - $ (1,118,914) $ (45,819) 484,972 31,806,645 (5,375,528) (357,780) 461,053 (1,521,594) (27,682,035) 1,019,534 (77,859) 269,445 76,831 (268,417) - 10,316,557 (4,085,953) (187,725) 9,959 (639,521) (6,550,670) 1,091,534 (4,013) 1,027,409 (1,435,917) 240,646 (882,073) (34,006) (30,960) 566,844 20,462,679 (123,103) (170,055) 133,617 (20,828,942) (41,040) $ - $ (1,164,733) 99 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Assets and Liabilities Fiduciary Fund Type - Trust Funds June 30, 2016 City-Wide Exceptional Needs Expendable Trust Assets Investments Due from Other Funds Equity in Pooled Cash Total Assets Liabilities Accounts Payable Total Liabilities Net Position Held in Trust for Various Purposes Trust Total $ 312,670 373,650 - $ 479,499 $ 312,670 373,650 479,499 $ 686,320 $ 479,499 $ 1,165,819 $ 1,500 $ 351,305 $ 352,805 $ 1,500 $ 351,305 $ 352,805 $ 684,820 $ 128,194 $ 813,014 100 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Changes in Assets and Liabilities Fiduciary Fund Type - Trust Funds June 30, 2016 City-Wide Exceptional Needs Expendable Trust Additions Other Miscellaneous Interest and Investment Gain $ Total Additions Deductions Instruction Special Programs Support Student Services Business Services Student Transportation Services Total Deductions 42,532 $ 1,300,000 - Trust Total $ 1,300,000 42,532 42,532 1,300,000 1,342,532 - 1,249,851 1,249,851 - 9,750 - 9,750 - - 1,259,601 1,259,601 Changes in Net Position 42,532 40,399 82,931 Net Position - Beginning 642,288 87,795 730,083 Net Position - Ending $ 684,820 $ 128,194 $ 813,014 101 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Assets and Liabilities Fiduciary Fund Type - Agency Funds June 30, 2016 Student Activity Assets Cash Due from Other Funds Equity in Pooled Cash Agency Total $ 279,271 913 - $ 279,271 913 - $ 280,184 $ 280,184 Liabilities Due to Student Groups $ 280,184 $ 280,184 Total Liabilities $ 280,184 $ 280,184 Total Assets 102 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Combining Statement of Changes in Assets and Liabilities Fiduciary Fund Type - Agency Funds Fiscal Year Ended June 30, 2016 Balance June 30, 2015 Student Activity Assets Cash Due from Other Funds Equity in Pooled Cash Total Assets Liabilities Due to Student Groups Total Liabilities Total Agency Funds Assets Cash Due from Other Funds Equity in Pooled Cash Total Assets Liabilities Due to Student Groups Total Liabilities Additions/ Transfers to OPSB Deductions Balance June 30, 2016 $ 304,243 913 - $ 1,003,370 - $ 1,028,342 - $ 279,271 913 - $ 305,156 $ 1,003,370 $ 1,028,342 $ 280,184 $ 305,156 $ 1,003,370 $ 1,028,342 $ 280,184 $ 305,156 $ 1,003,370 $ 1,028,342 $ 280,184 $ 304,243 913 - $ 1,003,370 - $ 1,028,342 - $ 279,271 913 - $ 305,156 $ 1,003,370 $ 1,028,342 $ 280,184 $ 305,156 $ 1,003,370 $ 1,028,342 $ 280,184 $ 305,156 $ 1,003,370 $ 1,028,342 $ 280,184 103 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Schedule of Compensation, Benefits and Other Payments To Agency Head Agency Head Dr. Henderson Lewis, Jr. Superintendent Purpose Salary Benefits-Insurance Benefits-Retirement Benefits-Other Car Allowance Per Diem Reimbursements Conference Travel Total Amount $ $ $ $ $ $ $ $ $ 190,500 18,565 31,894 4,838 12,000 639 126 93 258,655 104 STATISTICAL SCHEDULES 105 Statistical Schedule I ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Government-Wide Expenses by Function For the Three Years Ended June 30, 2016 (Unaudited) Governmental Activities Instruction Regular Education Programs Special Education Programs Other Education Programs 2016 $ Support Services Student Services Instructional Staff Support General Administration School Administration Services Business Services Student Transportation Services Central Services Plant Services Other Food Services Transfer to Charter Schools and RSD Interest on Long-Term Debt Total Governmental Activities $ 2015 2014 21,518,727 7,264,584 18,789,952 $17,578,428 7,419,801 22,087,652 $15,196,874 7,721,568 20,961,766 8,683,924 7,487,693 17,641,687 3,377,102 2,638,366 5,307,002 3,010,617 11,033,319 10,706,816 8,467,577 8,664,341 15,567,842 3,024,129 2,694,690 4,387,320 4,133,550 10,028,975 11,518,514 6,946,863 8,982,741 14,269,942 3,121,943 2,763,926 4,096,178 4,986,110 11,808,290 10,241,702 6,050,027 6,382,602 6,051,146 267,601,648 242,472,608 242,596,291 1,962,020 2,576,631 2,621,318 393,073,485 $367,004,661 $ 362,366,658 106 Statistical Schedule II ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Government-Wide Revenues For the Three Years Ended June 30, 2016 (Unaudited) Governmental Activities Program Revenues Charges for Services Operating Grants and Contributions Capital Grants and Contributions $ General Revenues Ad Valorem Taxes Sales and Use Taxes State Revenue Sharing Minimum Foundation Program (MFP) Interest and Investment Earnings Donation of Capital Assets Judgements Insurance Proceeds CDL Debt Forgiveness CDL Refund Miscellaneous Total Governmental Activities 2015 2016 685,107 33,570,030 75,235,923 $ 541,404,461 $ $ 511,620,178 917,812 36,979,554 100,729,786 136,834,464 113,721,226 2,719,832 51,497,324 135,717 12,830,745 8,636,118 4,892,601 9,030,517 148,298,545 123,557,264 2,759,731 56,596,779 65,351 70,628,578 8,319,615 158,311,016 127,844,470 2,690,500 64,377,681 75,553 43,359,340 20,499,056 14,755,785 $ 842,089 37,037,918 63,514,308 2014 $ 478,925,696 107 Statistical Schedule III ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA General Fund Expenditures by Function (Continued) Last Ten Fiscal Years June 30, 2016 (Unaudited) Governmental Activities Instructional Regular Programs Special Programs Other Programs 2015 - 2016 $ Support Services Student Services Instructional Staff Support General Administration School Administration Business Administration Business Services Plant Services Student Transportation Services Central Services Food Services Capital Outlay Other Debt Service Total $ 2014 - 2015 2013 - 2014 2012 - 2013 2011 - 2012 13,554,994 3,958,191 1,571,703 $12,410,465 3,656,783 1,820,091 $11,266,628 3,239,265 1,950,512 $13,027,746 3,183,692 1,967,446 $10,783,639 3,029,204 2,051,161 3,250,828 2,087,964 3,836,725 2,750,339 2,958,673 1,850,248 3,482,791 2,433,712 2,092,943 1,817,001 2,705,463 2,423,014 2,097,799 1,689,262 2,389,186 2,401,313 2,181,313 1,564,722 4,076,291 2,378,693 2,023,742 7,765,991 4,171,244 2,349,547 28,002 1,300,000 - 1,904,154 6,036,785 3,393,135 3,138,057 1,300,000 - 1,960,726 6,373,241 3,165,738 3,809,623 - 1,763,709 5,570,994 3,206,358 2,769,916 - 1,639,885 5,699,167 3,468,801 2,496,616 5,783 - 48,649,270 $ 44,384,894 $ 40,804,154 $ 40,067,421 $ 39,375,275 108 Statistical Schedule III ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA General Fund Expenditures by Function (Continued) Last Ten Fiscal Years June 30, 2016 (Unaudited) Governmental Activities Instructional Regular Programs Special Programs Other Programs 2010 - 2011 $ Support Services Student Services Instructional Staff Support General Administration School Administration Business Administration Business Services Plant Services Student Transportation Services Central Services Food Services Capital Outlay Other Debt Service Total $ 9,708,233 2,881,996 2,411,786 2009 - 2010 $ 11,741,153 2,224,169 1,485,948 2008 - 2009 $ 12,293,081 2,297,469 1,682,444 2007 - 2008 $ 13,135,211 2,248,217 1,896,083 2006 - 2007 $ 14,704,750 1,644,518 953,387 2,026,753 1,417,888 4,262,910 2,017,519 1,060,801 1,127,846 3,000,371 1,457,434 1,937,578 1,929,356 3,249,389 1,593,290 2,441,699 2,230,574 12,816,283 1,794,791 1,701,780 1,057,502 7,130,149 1,434,032 1,886,694 5,928,194 3,159,234 2,745,644 5,412 - 2,041,587 5,361,358 2,551,994 3,475,355 370,000 - 2,181,043 5,869,546 2,837,647 1,718,313 5,911,773 - 2,706,386 8,917,945 2,567,773 10,136,366 61 - 8,120,944 13,317,687 4,908,926 8,265,779 41,782 7,619 - 38,452,263 $ 35,898,016 $ 43,500,929 $ 60,891,389 $ 63,288,855 109 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor’s Report To the Orleans Parish School Board New Orleans, Louisiana We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the Orleans Parish School Board (the School Board), as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the School Board’s basic financial statements, and have issued our report thereon dated December 20, 2016. Our report includes a reference to other auditors who audited the financial statements of the following aggregate discretely presented component units: Bricolage Academy, Cypress Academy, Encore Learning, Foundation Preparatory, Homer A. Plessy Community School, Hynes Charter School, InspireNOLA Charter Schools - Alice M. Harte Elementary, Edna Karr High School and Wilson Charter School, Lusher Charter School, New Orleans Charter Science and Math High School, Robert Russa Moton Charter School, and Warren Easton Senior High School, as described in our report on the School Board’s financial statements. The report does not include the results of the other auditors’ testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the School Board’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School Board’s internal control. Accordingly, we do not express an opinion on the effectiveness of the School Board’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 110 Compliance and Other Matters As part of obtaining reasonable assurance about whether the School Board’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. This report is intended solely for the information and use of the School Board, the State of Louisiana, federal awarding agencies and pass-through entities, and the Legislative Auditor of the State of Louisiana, and is not intended to be and should not be used by anyone other than those specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document. A Professional Accounting Corporation Metairie, LA December 20, 2016 111 Report on Compliance For Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance Independent Auditor’s Report To the Orleans Parish School Board New Orleans, Louisiana Report on Compliance for Each Major Federal Program We have audited the Orleans Parish School Board’s (the School Board) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the School Board’s major federal programs for the year ended June 30, 2016. The School Board’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the School Board’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the School Board’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the School Board’s compliance. Opinion on Each Major Federal Program In our opinion, the School Board complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2016. Report on Internal Control Over Compliance Management of the School Board is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School Board’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the School Board’s internal control over compliance. 112 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the School Board as of and for the year ended June 30, 2016, and have issued our report thereon dated December 20, 2016, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance 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 and other 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 schedule of expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole. This report is intended solely for the information and use of the School Board, the State of Louisiana, federal awarding agencies and pass-through entities, and the Legislative Auditor of the State of Louisiana, and is not intended to be and should not be used by anyone other than those specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document. A Professional Accounting Corporation Metairie, LA December 20, 2016 113 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2016 Federal Grantor/Pass-Through Grantor Program Title United States Department of Agriculture Passed Through Louisiana Department of Agriculture Noncash Assistance (Commodities): National School Lunch Program Noncash Assistance Subtotal Cash Assistance: School Breakfast Program National School Lunch Program Summer Food Service Program for Children Cash Assistance Subtotal CFDA Number Pass-Through Grantor No. 10.555 - 10.553 10.555 10.559 - Total United States Department of Agriculture United States Department of Defense ROTC 12.998 - Total United States Department of Defense United States Department of Education Passed through the Louisiana Department of Education No Child Left Behind Act (NCLB) Title I Title I - Striving Readers Comprehensive Literacy Program Title II, Part A - Elementary and Secondary Education Act Title III School Board Expenditures $ Charter Pass-Through Expenditures 365,050 365,050 - 1,658,586 4,209,969 275,062 6,143,617 - 6,508,667 - 41,399 - 41,399 - 84.010A 84.371C 84.367A 84.365A 84.287 28-16-T1-36 28-16-SO-36 28-16-50-36 28-16-60-36 28-16-C8-36 10,084,965 737,362 1,082,827 73,791 214,760 3,161,321 201,558 52,053 249,645 Individuals with Disabilities and Exceptionalities Act (IDEA) IDEA Part B IDEA High Cost Services Grant-Round 1 IDEA High Cost Services Grant-Round 2 IDEA Preschool 84.027A 84.027A 84.027A 84.173A 28-16-B1-36 28-16-RK-36 28-16-RK-36 28-16-P1-36 4,161,996 147,457 4,237 10,966 697,507 317,391 - Vocational Education Carl Perkins 84.048 28-16-02-36 233,501 28-15-H1-36 157,228 167,379 71,354 418,362 401,674 - 17,147,823 5,499,511 Title IV - Twenty-First Century Community Learning Centers Direct Funding PBIS Improvement Intiative Literacy for Life Project McKinney-Vento Homeless Total United States Department of Education 84.184G 84.215G 84.196A - 114 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Schedule of Expenditures of Federal Awards (Continued) For the Year Ended June 30, 2016 Federal Grantor/Pass-Through Grantor Program Title United States Department of Health and Human Services Passed through the Louisiana Department of Education Temporary Assistance for Needy Families (TANF) After School For All CFDA Number Pass-Through Grantor No. 93.558B 28-15-36-36 Total United States Department of Health and Human Services United States Department of Homeland Security Passed through the Louisiana Department of Education Disaster Grants - Public Assistance 97.036 - Charter Pass-Through Expenditures School Board Expenditures 558,612 1,286,057 558,612 1,286,057 71,235,925 - Total United States Department of Homeland Security 71,235,925 - Total Expenditures of Federal Awards 95,492,426 6,785,568 $ 102,277,994 115 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Notes to Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2016 Note 1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of the Orleans Parish School Board and is presented on the modified accrual basis of accounting. Commodities received, which are non-cash revenue are valued at prices provided by the U.S. Department of Agriculture. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. Note 2. Reconciliation to the Basic Financial Statements The expenditures listed in the accompanying schedule are reported in the following funds in either the governmental funds statement of revenues, expenditures and changes in fund balances (basic statement) or the non-major special revenue funds combining statement of revenues, expenditures and changes in fund balance, (supplementary information) of the Orleans Parish School Board’s June 30, 2016, financial statements. General Fund Hurricane Katrina Restoration Fund Federal Grant Fund Child Nutrition Fund Financial Statement Total Schedule of Expenditures of Federal Awards Total $ 41,399 71,235,923 24,492,005 6,508,667 $ 102,277,994 $ 102,277,994 116 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Schedule of Findings and Questioned Costs For the Year Ended June 30, 2016 Section 1. Summary of Auditor’s Results Financial Statements 1. Type of auditors’ report issued 2. Internal control over financial reporting a. Material weaknesses identified b. Significant deficiencies identified c. Noncompliance material to the financial statements noted Unmodified No None reported No Federal Awards 1. Internal control over major programs a. Material weaknesses identified b. Significant deficiencies identified 2. Type of auditors’ report issued on compliance for major programs 3. Audit findings disclosed that are required in accordance with Section 2 CFR 200.516(a) 4. Identification of major programs Title I Disaster Grants – Public Assistance 5. Dollar threshold used to distinguish between Type A and B programs 6. Auditee qualified as a low-risk auditee? Section 2. No None reported Unmodified No 84.010A 97.036 $3,068,340 Yes Findings – Financial Statement Audit None Section 3. Findings and Questioned Costs – Major Federal Award Programs Audit None 117 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Schedule of Prior Audit Findings For the Year Ended June 30, 2016 None 118 ORLEANS PARISH SCHOOL BOARD SUMMARY OF CHARTER SCHOOL FINDINGS 119 FRENCH AND MONTESSORI EDUCATION, INC. D/B/A AUDUBON CHARTER SCHOOL Section I. Summary of Audit Results Financial Statement Section 1. Type of auditor’s report 2. Internal control over financial reporting and compliance and other matters a. Material weaknesses identified b. Significant deficiencies identified not considered to be material weaknesses c. Noncompliance noted Section II. Unmodified None None None Internal Control Over Financial Reporting None. Section III. Compliance and Other Matters None. 120 ADVOCATES FOR ACADEMIC EXCELLENCE IN EDUCATION, INC. D/B/A BEN FRANKLIN HIGH SCHOOL Section I. Summary of Audit Results Financial Statement Section 1. Type of auditor’s report 2. Internal control over financial reporting and compliance and other matters a. Material weaknesses identified b. Significant deficiencies identified not considered to be material weaknesses c. Noncompliance noted Section II. Unmodified None None None Internal Control Over Financial Reporting None. Section III. Compliance and Other Matters None. 121 BRICOLAGE ACADEMY No summary of findings included in stand-alone financial statements. Independent Auditors Report on Internal Control and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards did not report findings. 122 CYPRESS ACADEMY A. Summary of Auditors’ Results 1. The Independent Auditors’ Report expresses an unmodified opinion on the financial statements of Cypress Charter School Association. 2. No control deficiencies were disclosed during the audit of the financial statements and are reported in the Independent Auditors’ 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. 3. No instances of noncompliance material to the financial statements reported in the Independent Auditors’ 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. 4. A management letter was not issued for the year ended June 30, 2016. B. Findings Related to the Financial Statements There were no findings related to the financial statements for the year ended June 30, 2016. C. Findings Related to Compliance and Other Matters There were no findings related to compliance and other matters for the year ended June 30, 2016. 123 THE EINSTEIN GROUP, INC. Section I. Summary of Audit Results Financial Statements 1) Type of auditor’s report Unmodified 2) Internal control over financial reporting and compliance and other matters a) Material weaknesses identified b) Significant deficiencies identified not considered to be material weaknesses c) Noncompliance noted None None None 3) Management letter comment provided None Federal Awards 4) Internal control over major program a) Material weaknesses identified b) Significant deficiencies identified not considered to be material weaknesses 5) Type of auditor’s report issued on compliance for major programs None None Unmodified 6) Audit findings disclosed that are required in accordance with Uniform Guidance None 7) Identification of major programs 10.553 and 10.555 – Child Nutrition Cluster 8) Dollar threshold used to distinguish between Type A and B programs $750,000 9) Auditee qualified as a low-risk auditee under Uniform Guidance 10) De minimis indirect cost rate of 10% used Section II. Yes No, School receive no indirect costs. Internal Control Over Financial Reporting None. Section III. Findings and Questioned Costs Related to Major Federal Award Programs None. 124 ENCORE LEARNING Summary of Auditor’s Results Financial Statements • Type of auditor’s report issued: Unqualified • Material weaknesses identified No • Significant deficiencies identified not considered to be material weaknesses No • Noncompliance material to the financial statements noted No Finding – Financial Statement Audit There are no findings for the year ended June 30, 2016. Questioned Costs There are no questioned costs for the year ended June 30, 2016. 125 FOUNDATION PREPARATORY, INC. Summary of Auditor’s Results Financial Statements • Type of auditor’s report issued: Unqualified • Material weaknesses identified? No • Significant deficiencies identified not considered to be material weaknesses? No • Noncompliance material to the financial statements noted? No Findings – Financial Statement Audit There are no findings for the year ended June 30, 2016. Questioned Costs There are no questioned costs for the year ended June 30, 2016. 126 CITIZEN’S COMMITTEE FOR EDUCATION D/B/A HOMER A. PLESSY COMMUNITY SCHOOL Summary of Auditor’s Results Financial Statements • Type of auditor’s report issued: Unqualified • Material weaknesses identified No • Significant deficiencies identified not considered to be material weaknesses No • Noncompliance material to the financial statements noted No Finding – Financial Statement Audit There are no findings for the year ended June 30, 2016. Questioned Costs There are no questioned costs for the year ended June 30, 2016. 127 HYNES CHARTER SCHOOL CORPORATION SECTION I – SUMMARY OF AUDITORS’ REPORTS 1. The auditors’ report expresses an unmodified opinion on the financial statements of Hynes Charter School Corporation (a nonprofit organization). 2. No instances of noncompliance material to the financial statements of Hynes Charter School Corporation were disclosed and identified during the audit. 3. There was on (1) instance of noncompliance with laws, rules, and regulations that was disclosed and identified during the audit but was not considered material to the financial statements. SECTION II – FINDINGS RELATED TO FINANCIAL STATEMENTS No findings noted. SECTION III – FINDINGS RELATED TO COMPLIANCE AND OTHER MATTERS Finding 2016-001 Background Check Compliance Condition: The School’s current internal control structure or operation does not allow management or staff to identify if background checks have been completed or reviewed for adequacy. Criteria: In accordance with Louisiana regulations R.S. 17:15 “Criminal History Review” and R.S. 15:1587.1 “The Louisiana Child Protection Act”, the School is required to request and review criminal history reports from the State Bureau of Criminal Identification and Information. Any employees who do not meet the criteria to obtain a position of authority over children may not be employed by the School. Effect: Teachers or other employees with authority over children may not be eligible to maintain their position. Cause: The School has not implemented controls over the performance and review of background checks for new and existing employees. Recommendation: We recommend that management implement internal control procedures for the performance and review of background checks for all employees in a timely manner. Management’s Response and Corrective Action Plan: During the course of our audit, it came to light that the proof for one background check could not be located. The fingerprinting was done and we recall that the Louisiana State Police (LSP) returned this employee’s fingerprints due to the lack of quality of the imprint. The employee then repeated the process. However to date, we cannot locate the LSP response. In the meantime, we have since resubmitted fingerprints of this employee to LSP and await those results. Furthermore, we have modified the procedure for submitting fingerprints to the agency so there is no repeat occurrence. 128 InspireNOLA CHARTER SCHOOLS A. SUMMARY OF AUDIT RESULTS 1. The independent auditors’ report expresses an unmodified opinion on the financial statements of the InspireNOLA Charter Schools. 2. No control deficiencies relating to the audit of the financial statements are reported in the 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. 3. No instances of noncompliance material to the financial were disclosed during the audit. 4. No control deficiencies relating to the audit of the major federal award programs are reported in the Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major Federal Award Program and on Internal Control Over Compliance Required by the Uniform Guidance. 5. The auditors’ report on compliance with requirements applicable to major federal award programs for InspireNOLA Charter Schools expresses an unmodifiied opinion. 6. The auditors’ report disclosed no findings that were required to be reported in accordance with the Uniform Guidance. 7. A management letter was not issued for the year ended June 30, 2016. 8. The programs tested as major programs were: Title I, Part A CFDA No. 84.010 9. The threshold for distinguishing between type A and type B programs was $750,000. 10. InspireNOLA Charter Schools was determined to be a low-risk auditee. B. FINDINGS RELATED TO THE FINANCIAL STATEMENTS There were no findings required to be reported in this section. C. FINDINGS AND QUESTIONED COSTS RELATED TO MAJOR FEDERAL AWARD PROGRAMS There were no findings required to be reported in this section. 129 LAKE FOREST ELEMENTARY CHARTER SCHOOL Part I. Summary of Auditor’s Results Financial Statements 1) Type of auditor’s report Unmodified 2) Internal control over financial reporting and compliance and other matters: a) Material weaknesses identified? b) Significant deficiencies identified? c) Noncompliance material to the financial statements? d) Other Matters identified? No No Yes No Federal Awards Not applicable. Part II. Findings Related to the Financial Statements 2016-001 Possible Violation of Louisiana Code of Ethics Criteria: Louisiana Revised Statutes 42:1101 to 42:1266 Condition: The School hired an engineering firm that handles public bids. The bid process was executed to clear and fill a portion of the School’s new campus. The company that received the contract purchased fill material from a company in which a board member had partial ownership. Once the School became aware of this situation, it reported this possible violation of the code of ethics to the Louisiana Ethics Board as well as Orleans Parish School Board, the School’s local education authority. Also, in the approval of a change order, the board member may have circumvented the School’s established management and administrative procurement practices and code of ethics. Cause: The conflict of interest was unknown at the time of procurement and the board member may have circumvented the management of the School in the approval of a change order. Effect: Possible noncompliance with the Louisiana Code of Ethics. Recommendation: None. Management’s Response: The School has reported the possible violation to the Louisiana Board of Ethics and is awaiting its response. 130 ADVOCATES FOR ARTS-BASED EDUCATION CORPORATION D/B/A LUSHER CHARTER SCHOOL Section I – Summary of Auditor’s Results a) Financial Statements Type of auditors' report issued: . b) Internal control over financial reporting: • Material weaknesses identified? • Significant deficiencies identified not considered to be material weaknesses? Noncompliance material to financial statements noted? Unqualified No None reported No Federal Awards The School did not expend more than $750,000 in federal awards during the year ended June 30, 2016, and therefore, is exempt from the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Section II - Internal Control Over Financial Reporting and Compliance and Other Matters Material to the Basic Financial Statements Internal Control Over Financial Reporting No internal control over financial reporting findings were reported during the audit for the year ended June 30, 2016. Compliance and Other Matters No compliance findings material to the financial statements were reported during the audit for the year ended June 30, 2016. Section III – Federal Award Findings and Questioned Costs Internal Control / Compliance The School did not expend more than $750,000 in federal awards during the year ended June 30, 2016, and therefore, is exempt from the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. 131 ADVOCATES FOR SCIENCE AND MATHEMATICS EDUCATION, INC. (NEW ORLEANS CHARTER SCIENCE AND MATH HIGH SCHOOL) A. SUMMARY OF AUDITORS’ RESULTS 1. The independent auditors’ report expresses an unmodified opinion on the financial statements of Advocates for Science and Mathematics Education, Inc. (“Advocates”) (a nonprofit organization). 2. There were no instances of noncompliance material to the financial statements of the Foundation reported in the Independent Auditors’ 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. 3. No significant deficiencies were noted relating to the audit in the Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Auditing Standards. 4. The Independent Auditor’s Report on Compliance for each Major Program and on Internal Control Over Compliance Required by OMB Circular A-133 expresses an unmodified opinion on all major federal programs. 5. There were no deficiencies relating to the audit of the major federal programs reported in the Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A-133. 6. There were no instances of noncompliance relating to the audit of major federal programs reported in the Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control over Compliance Required by OMB Circular A-133. 7. A management letter was not issued for the year ended June 30, 2016. 8. The program tested as a major program for the year ended June 30, 2016 was: Program Title National School Lunch Program School Breakfast Program CFDA No. 10.555 10.553 9. The threshold for distinguishing between Type A and Type B programs was $750,000. 10. Advocates qualifies as a low-risk auditee. B. Findings and Questioned Costs – Major Federal Award Programs There were no findings related to major federal award programs for the year ended June 30, 2016. C. Findings Related to the Financial Statements There were no findings related to the financial statements for the year ended June 30, 2016. D. Findings Related to Compliance and Other Matters There were no findings related to compliance and other matters for the year ended June 30, 2016. 132 ADVOCATES FOR INNOVATIVE SCHOOLS, INC. (D/B/A ROBERT RUSSA MOTON CHARTER SCHOOL) Section I – Summary of Auditor’s Results Financial Statement Type of auditors' report issued: Internal control over financial reporting: • Material weaknesses identified? • Significant deficiencies identified? • Noncompliance material to financial statements noted? Unmodified No No No Section II – Financial Statement Findings No findings or questioned costs for the year ended June 30, 2016. Section III – Federal Awards Findings No findings or questioned costs for the year ended June 30, 2016. 133 WARREN EASTON SENIOR HIGH SCHOOL FOUNDATION, INC. Section I – Summary of Auditors' Results 1. The auditors’ report expresses an unmodified opinion on the financial statements of Warren Easton Senior High School Foundation, Inc. (a nonprofit organization) (the School). 2. No instances of noncompliance material to the financial statements of the School, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 3. No d eficiencies in internal control over financial reporting considered to be material weaknesses or significant deficiencies were disclosed during the audit. 4. The Independent Auditor’s Report on Compliance for the Major Program and on Internal Control Over compliance Required by the Uniform Guidance expresses an unmodified opinion on the major federal program. 5. No findings required to be reported in accordance with the Uniform Guidance were disclosed during the audit. 6. No deficiencies in internal control over the major program considered to be material weaknesses or significant deficiencies were disclosed during the audit. 7. The program tested as a major program for the year ended June 30, 2016 was: Program Title Title I Grants to Local Educational Agencies (LEAs) CFDA No. 84.010A 8. The threshold for distinguishing between Type A and Type B programs was $750,000. 9. The School qualifies as a low-risk auditee. B. FINDINGS RELATED TO THE FINANCIAL STATEMENTS None Noted. C. FINDINGS AND QUESTIONED COSTS RELATED TO MAJOR FEDERAL AWARD PROGRAM None Noted. D. MANAGEMENT LETTER Not applicable – no letter was issued. 134 INDEPENDENT ACCOUNTANT’S REPORT ON APPLYING AGREED-UPON PROCEDURES To the Orleans Parish School Board New Orleans, Louisiana We have performed the procedures included in the Louisiana Governmental Audit Guide and enumerated below, which were agreed to by the management of the Orleans Parish School Board (School Board) and the Legislative Auditor, State of Louisiana, solely to assist users in evaluating management’s assertions about the performance and statistical data accompanying the annual financial statements of Orleans Parish School Board and to determine whether the specified schedules are free of obvious errors and omissions as provided by the Board of Elementary and Secondary Education. Management of the Orleans Parish School Board is responsible for its financial records and compliance with applicable laws. This agreed-upon procedures engagement was performed in accordance with standards established by the American Institute of Certified Public Accountants and applicable standards of Government Auditing Standards. The sufficiency of these procedures is solely the responsibility of the specified users of this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Our procedures and findings relate to the accompanying schedules of supplemental information and are as follows: General Fund Instructional and Support Expenditures and Certain Local Revenue Sources (Schedule 1) 1. We selected a random sample of 25 transactions and reviewed supporting documentation to determine if the sampled expenditures/revenues are classified correctly and are reported in the proper amounts for each of the following amounts reported on the schedule: • • • • • • • Total General Fund Instructional Expenditures, Total General Fund Equipment Expenditures, Total Local Taxation Revenue, Total Local Earnings on Investment in Real Property, Total State Revenue in Lieu of Taxes, Nonpublic Textbook Revenue, and Nonpublic Transportation Revenue. No differences were noted. 135 Education Levels of Public School Staff (Schedule 2) 2. We reconciled the total number of full-time classroom teachers per the schedule “Experience of Public Principals, Assistant Principals, and Full-time Classroom Teachers” (Schedule 4) to the combined total number of full-time classroom teachers per this schedule and to School Board supporting payroll records as of October 1st. We were unable to reconcile the total number of full-time classroom teachers between State Schedule 2 and State Schedule 4. State Schedule 2 details 249 teachers. State Schedule 4 details 250 teachers. The difference is 1 teacher. Additionally, based on the discrepancies noted in Procedure 6 below (State Schedule 4 testing), the total number of full-time classroom teachers in State Schedule 2 may not be accurate. 3. We reconciled the combined total of principals and assistant principals per the schedule “Experience of Public Principals, Assistant Principals, and Full-time Classroom Teachers” (Schedule 4) to the combined total of principals and assistant principals per this schedule. No differences were noted. 4. We obtained a list of full-time teachers, principals, and assistant principals by classification as of October 1st and as reported on the schedule. We traced a random sample of 25 teachers to the individual’s personnel file and determine if the individual’s education level was properly classified on the schedule. No differences were noted. Number and Type of Public Schools (Schedule 3) 5. We obtained a list of schools by type as reported on the schedule. We compared the list to the schools and grade levels as reported on the Title 1 Grants to Local Educational Agencies (CFDA 84.010) application and/or the National School Lunch Program (CFDA 10.555) application. No differences were noted. Experience of Public Principals, Assistant Principals, and Full-time Classroom Teachers (Schedule 4) 6. We obtained a list of full-time teachers, principals, and assistant principals by classification as of October 1st and as reported on the schedule and traced the same sample used in Procedure 4 to the individual’s personnel file and determined if the individual’s experience was properly classified on the schedule. For 5 out of the 25 teachers, principals, and assistants sampled, discrepancies were noted. We discussed with management who further analyzed the discrepancies. It was determined that the information for the schedule was obtained from the School Board's MUNIS data system. For the 5 discrepancies, the data for each employee was added to the Employee Years of Service program after the Pep Data for the 2015-2016 October 1st reporting period had been generated. All 5 employees were employed by the School Board prior to the Pep Data generation, and therefore, should have been included in the Pep Data report. 136 Public School Staff Data: Average Salaries (Schedule 5) 7. We obtained a list of all classroom teachers including their base salary, extra compensation, and ROTC or rehired retiree status as well as full-time equivalent as reported on the schedule and traced a random sample of 25 teachers to the individual’s personnel file and determined if the individual’s salary, extra compensation, and full-time equivalents were properly included on the schedule. No differences were noted. 8. We recalculated the average salaries and full-time equivalents reported in the schedule. While our recalculation of managements’ calculation of average salaries and full-time equivalents did not result in a difference on State Schedule 5, based on the discrepancies noted in Procedure 2 above, the average salaries and full-time equivalents calculated by management may not be accurate. Class Size Characteristics (Schedule 6) 9. We obtained a list of classes by school, school type, and class size as reported on the schedule and reconciled school type classifications to Schedule 3 data, as obtained in Procedure 5. We then traced a random sample of 10 classes to the October 1st roll books for those classes and determined if the class was properly classified on the schedule. No differences were noted. Louisiana Educational Assessment Program (LEAP) (Schedule 7) 10. We obtained test scores as provided by the testing authority and reconciled scores as reported by the testing authority to scores reported in the schedule by Orleans Parish School Board. No differences were noted. Graduation Exit Examination (GEE) (Schedule 8) 11. The Graduation Exit Examination (GEE) is no longer administered. This schedule is no longer applicable. iLEAP Tests (Schedule 9) 12. We obtained test scores as provided by the testing authority and reconciled scores as reported by the testing authority to scores reported in the schedule by Orleans Parish School Board. No differences were noted. *********** 137 We were not engaged to, and did not perform, an examination, the objective of which would be the expression of an opinion on management's assertions. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the use of management of Orleans Parish School Board, the Louisiana Department of Education, the Louisiana Legislature, and the Legislative Auditor, State of Louisiana, and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document. A Professional Accounting Corporation Metairie, LA December 20, 2016 138 SCHEDULES REQUIRED BY LOUISIANA STATE LAW (R.S. 24:514 - PERFORMANCE AND STATISTICAL DATA) 139 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA General Fund Instructional and Support Expenditures And Certain Local Revenue Sources For the Year Ended June 30, 2016 General Fund Instructional and Equipment Expenditures General Fund Instructional Expenditures Teacher and Student Interaction Activities Classroom Teacher Salaries Other Instructional Staff Activities Employee Benefits Purchased Professional and Technical Services Instructional Materials and Supplies Instructional Equipment Schedule 1 $ 7,878,390 239,759 4,487,817 353,844 592,820 Total Teacher and Student Interaction Activities $ Other Instructional Activities 2,364 Pupil Support Activities Less: Equipment for Pupil Support Activities Net Pupil Support Activities 3,250,828 (32,880) Instructional Staff Services Less: Equipment for Instructional Staff Services Net Instructional Staff Services 2,087,964 (26,954) School Administration Less: Equipment for School Administration Net School Administration 2,750,339 (8,861) 3,217,948 2,061,010 2,741,478 Total General Fund Instructional Expenditures $ Total General Fund Equipment Expenditures $ Certain Local Revenue Sources Local Taxation Revenue Constitutional Ad Valorem Taxes Renewable Ad Valorem Tax Debt Service Ad Valorem Tax Facilities Preservation Ad Valorem Tax Up to 1% of Collections by the Sheriff on Taxes Other than School Taxes Sales and Use Taxes Total Local Taxation Revenue 13,552,630 $ 21,575,430 - 96,712,611 44,386,367 12,363,577 4,848,461 (10,158,083) 127,844,470 $ 275,997,403 Local Earnings on Investment in Real Property $ 7,588 State Revenue Sharing $ 2,690,500 Nonpublic Textbook Revenue $ 498,140 Nonpublic Transportation Revenue $ See independent accountant’s report on applying agreed-upon procedures. - 140 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Education Levels of Public School Staff As of October 1, 2015 Category Less than a Bachelor's Degree Bachelor's Degree Master's Degree Master's Degree + 30 Specialist in Education Ph. D. or Ed. D. Total Schedule 2 Full Time Classroom Teachers Certificated Uncertificated Number Percent Number Percent Principals & Assistant Principals Certificated Uncertificated Number Percent Number Percent 1 122 87 28 0 1 0% 51% 37% 12% 0% 0% 1 7 2 0 0 0 10% 70% 20% 0% 0% 0% 0 0 7 3 0 1 0% 0% 64% 27% 0% 9% 0 0 0 0 0 0 0% 0% 0% 0% 0% 0% 239 100% 10 100% 11 100% 0 0% See independent accountant’s report on applying agreed-upon procedures. 141 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Number and Type of Public Schools For the Year Ended June 30, 2016 Type Elementary Middle/Jr. High Secondary Combination Total See independent accountant’s report on applying agreed-upon procedures. Schedule 3 Number 3 0 0 3 6 142 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Experience of Public Principals, Assistant Principals and Full Time Classroom Teachers As of October 1, 2015 Assistant Principals Schedule 4 0 -1 Yr. 2 -3 Yrs. 4 -10 Yrs. 11-14 Yrs. 15 -19 Yrs. 20 - 24 Yrs. 25+ Yrs. Total 0 0 1 2 1 0 0 4 Principals 0 0 0 1 1 1 4 7 Classroom Teachers 42 9 34 30 32 31 72 250 42 9 35 33 34 32 76 261 Total See independent accountant’s report on applying agreed-upon procedures. 143 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Public School Staff Data: Average Salaries For the Year Ended June 30, 2016 Schedule 5 All Classroom Teachers Classroom Teachers Excluding ROTC and Rehired Retirees Average Classroom Teachers Salary Including Extra Compensation $48,679 $48,654 Average Classroom Teachers Salary Excluding Extra Compensation $48,583 $48,557 241 240 Number of Teacher Full-Time Equivalents (FTEs) Used in Computation of Average Salaries See independent accountant’s report on applying agreed-upon procedures. 144 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Class Size Characteristics As of October 1, 2015 Schedule 6 CLASS SIZE RANGE SCHOOL TYPE ELEMENTARY ELEMENTARY ACTIVITY CLASSES MIDDLE MIDDLE/JR. HIGH ACTIVITY CLASSES HIGH HIGH ACTIVITY CLASSES COMBINATION COMBINATION ACTIVITY CLASSES TOTAL TYPE TOTAL 329 78 0 0 0 0 650 315 1,372 % 23.98% 5.69% 0.00% 0.00% 0.00% 0.00% 47.38% 22.95% 100.00% 1 THRU 20 47 37 0 0 0 0 237 228 549 See independent accountant’s report on applying agreed-upon procedures. % 8.56% 6.74% 0.00% 0.00% 0.00% 0.00% 43.17% 41.53% 100.00% 21 THRU 26 149 30 0 0 0 0 117 22 318 % 46.86% 9.43% 0.00% 0.00% 0.00% 0.00% 36.79% 6.92% 100.00% 27 THRU 33 133 6 0 0 0 0 147 32 318 % 41.82% 1.89% 0.00% 0.00% 0.00% 0.00% 46.23% 10.06% 100.00% 34+ 0 5 0 0 0 0 148 33 186 % 0.00% 2.69% 0.00% 0.00% 0.00% 0.00% 79.57% 17.74% 100.00% 145 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Louisiana Educational Assessment Program (LEAP) For the Year Ended June 30, 2016 District Achievement Level Results Grade 4 Advanced Mastery Basic Approaching Basic Unsatisfactory Total District Achievement Level Results Grade 8 Advanced Mastery Basic Approaching Basic Unsatisfactory Total Schedule 7 English Language Arts 2016 2015 2014 Percent Percent Percent 14% 2% 9% 40% 46% 45% 25% 36% 33% 12% 13% 6% 9% 3% 7% 100% 100% 100% Mathematics 2016 2015 Percent Percent 6% 2% 33% 30% 34% 31% 21% 28% 6% 9% 100% 100% 2014 Percent 21% 32% 34% 6% 7% 100% English Language Arts 2016 2015 2014 Percent Percent Percent 5% 2% 1% 42% 28% 12% 30% 40% 45% 18% 21% 37% 5% 9% 5% 100% 100% 100% 2016 Percent 0% 17% 28% 34% 21% 100% Mathematics 2015 Percent 1% 22% 24% 34% 19% 100% 2014 Percent 1% 3% 47% 31% 18% 100% 2016 Percent 3% 10% 52% 27% 8% 100% Science 2015 Percent 0% 13% 56% 25% 6% 100% 2014 Percent 5% 14% 58% 18% 5% 100% Social Studies 2016 2015 2014 Percent Percent Percent N/A 0% 0% N/A 9% 14% N/A 62% 67% N/A 20% 12% N/A 9% 7% N/A 100% 100% 2016 Percent 0% 7% 45% 31% 17% 100% Science 2015 Percent 0% 8% 43% 33% 16% 100% 2014 Percent 1% 10% 42% 37% 10% 100% 2016 Percent N/A N/A N/A N/A N/A N/A Social Studies 2015 2014 Percent Percent 0% 0% 5% 3% 45% 49% 31% 38% 19% 10% 100% 100% NOTE: Spring 2014, 2015, and 2016 LEAP test data was used to prepare this schedule. Social Studies assessments were not administered during Spring 2016. See independent accountant’s report on applying agreed-upon procedures. 146 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA Graduation Exit Exam (GEE) For the Year Ended June 30, 2016 Schedule 8 The Graduation Exit Exam is no longer administered. This schedule is no longer applicable. See independent accountant’s report on applying agreed-upon procedures. 147 ORLEANS PARISH SCHOOL BOARD NEW ORLEANS, LOUISIANA iLEAP Test Results For the Year Ended June 30, 2016 Schedule 9 i LEAP Tests District Achievement Level Results Grade 3 Advanced Mastery Basic Approaching Basic Unsatisfactory Total English Language Arts 2015 2014 2016 Percent Percent Percent 1% 2% 3% 36% 45% 25% 36% 26% 45% 14% 20% 17% 7% 10% 13% 100% 100% 100% 2016 Percent 6% 37% 35% 17% 5% 100% Mathematics 2015 Percent 4% 25% 33% 24% 14% 100% 2014 Percent 6% 15% 51% 13% 15% 100% 2016 Percent 1% 13% 52% 29% 5% 100% Science 2015 Percent 1% 15% 48% 24% 12% 100% 2014 Percent 1% 11% 51% 24% 13% 100% 2016 Percent N/A N/A N/A N/A N/A N/A Social Studies 2015 2014 Percent Percent 1% 2% 18% 12% 55% 51% 20% 18% 10% 13% 100% 100% District Achievement Level Results Grade 5 Advanced Mastery Basic Approaching Basic Unsatisfactory Total English Language Arts 2014 2015 2016 Percent Percent Percent 2% 1% 11% 48% 39% 31% 31% 28% 36% 18% 25% 14% 7% 8% 1% 100% 100% 100% 2016 Percent 4% 15% 40% 29% 12% 100% Mathematics 2015 Percent 2% 21% 37% 31% 9% 100% 2014 Percent 7% 10% 47% 21% 15% 100% 2016 Percent 2% 13% 52% 23% 10% 100% Science 2015 Percent 2% 12% 54% 22% 10% 100% 2014 Percent 2% 10% 61% 23% 4% 100% 2016 Percent N/A N/A N/A N/A N/A N/A Social Studies 2015 2014 Percent Percent 3% 8% 18% 16% 53% 42% 25% 17% 9% 9% 100% 100% District Achievement Level Results Grade 6 Advanced Mastery Basic Approaching Basic Unsatisfactory Total English Language Arts 2015 2014 2016 Percent Percent Percent 12% 7% 9% 46% 56% 37% 43% 30% 28% 10% 8% 5% 2% 1% 6% 100% 100% 100% 2016 Percent 2% 23% 50% 19% 6% 100% Mathematics 2015 Percent 3% 35% 38% 23% 1% 100% 2014 Percent 9% 25% 53% 7% 6% 100% 2016 Percent 1% 9% 51% 30% 9% 100% Science 2015 Percent 1% 20% 52% 22% 5% 100% 2014 Percent 0% 8% 65% 17% 10% 100% 2016 Percent N/A N/A N/A N/A N/A N/A Social Studies 2015 2014 Percent Percent 6% 8% 17% 19% 48% 49% 26% 15% 3% 9% 100% 100% District Achievement Level Results Grade 7 Advanced Mastery Basic Approaching Basic Unsatisfactory Total English Language Arts 2015 2014 2016 Percent Percent Percent 10% 2% 5% 33% 33% 14% 30% 32% 40% 20% 29% 19% 8% 13% 12% 100% 100% 100% 2016 Percent 1% 15% 35% 38% 11% 100% Mathematics 2015 Percent 0% 12% 42% 34% 12% 100% 2014 Percent 3% 5% 47% 23% 22% 100% 2016 Percent 4% 16% 40% 27% 13% 100% Science 2015 Percent 1% 10% 43% 28% 18% 100% 2014 Percent 3% 14% 40% 26% 17% 100% 2016 Percent N/A N/A N/A N/A N/A N/A Social Studies 2015 2014 Percent Percent 0% 1% 4% 3% 46% 41% 31% 39% 19% 16% 100% 100% NOTE: Spring 2014, 2015, and 2016 LEAP test data was used to prepare this schedule. Social Studies assessments were not administered during Spring 2016. See independent accountant’s report on applying agreed-upon procedures. 148