2017 Audit Presentation: Plum Borough School District December 14, 2017

Required Audit Communications Fiscal Year 2017 Financials Agenda Required Audit Communications Fiscal Year 2017 Financials Upcoming Changes

Auditor’s Responsibility An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We considered the School District’s internal control over financial reporting in order to determine our auditing procedures 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 District’s internal control. We performed tests of the School District’s 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. An audit performed under the Uniform Guidance includes examining, on a test basis, evidence about the School District’s compliance with the requirements that could have a direct and material effect on the major federal programs (IDEA and Title I). We also considered internal control over compliance with these requirements in order to determine our auditing procedures for the purpose of expressing our opinion on compliance 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.

Auditor’s Responsibility (cont.) We did not audit the Required Supplementary Information (RSI) and do not express an opinion or provide any assurance on the RSI. RSI includes the Management’s Discussion and Analysis and the Budgetary Comparison, Pension, and OPEB Schedules. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. Supplementary Information includes the Schedule of Expenditures of Federal Awards (SEFA) and Notes to the SEFA.

Significant Estimates Net Pension Liability $111.701 million OPEBs $9.4 million Uncollectible Real Estate Taxes $1.9 million Collectible Real Estate Taxes $4.4 million

Net Pension Liability PBSD’s Proportionate Share: $111.701 Million PSERS: $49.557 Billion PBSD’s Proportion: 0.2254% PBSD’s Proportionate Share: $111.701 Million PSERS: $43.315 Billion PBSD’s Proportion: 0.2180% PBSD’s Proportionate Share: $94.428 Million

Audit Results All records and information requested by Maher Duessel were freely available for our inspection. We would like to acknowledge the full cooperation extended to us by all levels of the School District’s personnel throughout the course of our work. No material audit adjustments were posted.

Change in Fund Balance – General Fund $76.19 million $69.36 million Includes Revenues and Other Financing Sources Includes Expenditures and Other Financing Uses $6,823,125

Change in Fund Balance – General Fund Adjusted for Bond Issuances Total Change in Fund Balance $6,823,125 Less Effect of June Bond Issuance (2,534,149) Less Cash Restricted for Use Towards Net Pension Liability (5,120,000) Change in Fund Balance After Consideration of Bond Issuances ($831,024)

General Fund – Fund Balance Composition Total Fund Balance $1,965,842 Non-Spendable $482,074 Restricted $4,534,690 General Fund – Fund Balance Composition Unassigned ($3,050,922)

Budget vs Actual - Revenue

Budget vs Actual - Expenditures

Upcoming Changes OPEBs Split-Interest Agreements Certain Asset Retirement Obligations Fiduciary Activities Omnibus Certain Debt Extinguishment Issues Leases