1. Financial Audit Presentation Year Ended June 30, 2017

2. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
OPINION
The District’s responsibility:
Maintain effective internal controls
There are limitations on internal controls.
Regular risk assessment is important, including assessing the risk of fraud.

3. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
OPINION
The District’s responsibility:
Financial Statements
Accuracy, completeness, and propriety of balances, amounts, and disclosures

4. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
GF&H responsibility:
Opinion – reasonable assurance that financial statements are materially correct
Does not address the financial condition of the Organization
Purpose of the audit is not to detect fraud. We cannot take responsibility for finding fraud, if it existed.
Issued unmodified opinion – this is the best opinion you can receive

5. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
General Fund
Total fund balance increased $1.7M to $15.9M
Nonspendable fund balance of $236k for prepaids and inventory

6. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
General Fund
Unassigned fund balance is $15.6M, which is 23.1% of FY 2017 actual expenditures and 21.9% of FY 2018 budgeted expenditures
GFOA recommends a minimum of 16.7% (two months)

7. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Reasons To Maintain An Adequate Fund Balance:
Cash flow for 2nd half of calendar year; property taxes are cyclical
Significant emergencies and unanticipated expenditures
Flexibility for discretionary funding needs
Potential for better interest rates on debt issues
To cover potential shortfalls from the state (a) due to budget cuts or (b) as a result of the change in legislation (i.e. Act 388)
Future capital expenditures or significant repairs & maintenance
Fast growing area with increasing student enrollment – capital expenditures & increased staffing
The State requires one month reserve (8.3%) to avoid being placed on “Fiscal Watch” or “Fiscal Caution” by the State Dept. of Ed. Under the new Fiscal Practices and Budgetary Conditions policy

8. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
General Fund Revenues:
$67.2M for 2017:
$18.9M from property taxes
$47.7M from the state gov’t
$599k for all other revenues
$4.6M (7.3%) increase from 2017
$824k increase in property taxes (increased millage)
$3.9M increase in state gov’t revenues
$1.2M (1.8%) over budget
$898k over budget in state gov’t
$260k over budget in property taxes

9. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
General Fund Expenditures:
$67.6M for 2017:
$40.9M in instruction
$22.7M in support services
$4.0M in other expenditures
$5.9M (9.5%) increase from 2016
$2.3M increase in instruction (salaries & benefits)
$1.4M increase in support services (salaries & benefits)
$2.2M increase in capital outlay
$370K (0.5%) under budget
Mainly due to lower than budgeted salaries and benefits in support services

10. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Debt Service
The Debt Service Fund had a $3.6M fund balance; County must collect enough revenue for District to make debt payments; $1.4M in local option sales tax revenues
Capital Projects
The Capital Projects Fund had a $5.0M fund balance:
$5.0M unspent local option sales tax
Outstanding commitments at year-end or subsequently entered into for $1.6M at Wren High School (CIP), $1.6M at Palmetto High School and $1.3M for purchase of Chromebooks
Special Revenues
$1.7M of carryover at year end
Restricted in how funds can be used
Approximately 33 special programs and 23 EIA programs
Food Service had a fund balance of $2.1M, increase of $216k

11. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
District-Wide (GASB #34)
Assets - $157.2M
$118.8M is capital assets
$31.4M is cash and investments
$7.0M in receivables and other assets
Deferred Outflows of Resources - $13.7M
Deferred pension charges
Liabilities - $174.4M
$72.3M is long-term obligations
Accounts payable and other accrued liabilities of $10.3M
Net pension liability - $91.8M
Deferred Inflows of Resources - $2.3M
Deferred pension credits
District-Wide (GASB #34)
Net Position – ($5.8M)
$47.4M net investment in capital assets
$9.9M restricted
($63.1M) unrestricted
Revenues - $97.6M
Expenses - $90.0M
- $4.6M is non-cash depreciation

12. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Other Items of Note:
Total capital assets were $118.8M at 6/30/17 – increase of $2.4M from 6/30/16:
Current year additions of $7.1M
Equipment and technology $531K
Building and improvements $222k
Construction in Progress $6.3M (Concrete Primary School, Powdersville High School, Wren High School)
Depreciation in the current year of $4.8M
$5.0M of local option sales tax available for capital projects as of June 30, 2017
Outstanding commitments to date total $4.5M

13. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Other Items of Note:
Total debt outstanding as of 6/30/17 were $69.3M – decrease of $5.5M from 6/30/16
Principal payments of $5.5M for 2017
Total debt service payments for 2018 on outstanding debt are expected to be $8.1M ($5.6M for principal and $2.5M for interest)
The District has $4.2M bonded debt subject to the 8% limit of $16.1M and thus has the capacity to issue $11.9M of additional debt without a referendum

14. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Accounting Update:
GASB 77 on Tax Abatements was implemented in FY – property taxes reduced by $3.4M in FY 2017 under tax abatement agreements
The GASB issued GASB 75 on Other Post Employment Benefits (retiree health insurance) that will become effective in FY 2018
The School District will have an OPEB liability for its participation in the State Health Plan
Based on the latest available information, the District’s liability is estimated to be $74.0M at July 1, 2017
Upon implementation, beginning net position will be reduced by $74.0M

15. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Compliance
No findings or material weaknesses were noted
Significant deficiency noted related to proper recording of accrued expenditures / expenses
Single Audit was required for 2017
Title I and JROTC
No issues noted
Management Letter
Required communications to management and those charged with governance – management letter comment regarding school bookkeepers and the lack of segregation of duties

16. 2017 FINANCIAL AUDIT Anderson County School District One ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Summary
Unmodified opinion on the financial statements from GF&H
Strong financial condition as of June 30, 2017