SCHOOL DISTRICT OF BETHLEHEM TOWNSHIP - … · Organizational Chart Roster of Officials ... Notes tothe Financial Statements ... data are compiled to a119w for tlw

SCHOOL DISTRICTOF

BETHLEHEM TOWNSHIP

BOARD OF EDUCATION

COUNTY OF HUNTERDONASBURY, NEW JERSEY

COMPREHENSIVE ANNUAL FINANCIAL REPORTFOR THE FISCAL YEARENDED JUNE 30, 2014

BETHLEHEM TOWNSHIP BOARD OF EDUCATIONCOUNTY OF HUNTERDON, NEW JERSEY

COMPREHENSIVE ANNUAL FINANCIAL REPORTJUNE 30, 2014

TABLE OF CONTENTS

INTRODUCTORY SECTION

Letter of TransmittalOrganizational ChartRoster of OfficialsConsultants and Advisors

FINANCIAL SECTION

Independent Auditor's Report

Required Supplementary Information - Part I

Management's Discussion and Analysis

Basic Financial Statements

A. District-wide Financial Statements

A- 1 Statement of Net PositionA- 2 Statement of Activities

B. Fund Financial Statements

Governmental Funds:

B- 1 Balance SheetB- 2 Statement of Revenues, Expenses, and Change in

Fund BalancesB- 3 Reconciliation of the Statement of Revenues,

Expenditures, and Changes in Fund Balancesof Governmental Funds to the Statement of Activities

Proprietary Funds:

B- 4 Statement of Net PositionB- 5 Statement of Revenues, Expenses, and Changes in

Net PositionB- 6 Statement of Cash Flows

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Fiduciary Funds:

B- 7 Statement of Fiduciary Net PositionB- 8 Statement of Changes in Fiduciary Net Position

Notes to the Financial Statements

Required Supplementary Information - Part II

C. Budgetary Comparison Schedules

C- 1C- la

Budgetary Comparison Schedule - General FundCombining Schedule of Revenues, Expenditures, and

Changes in Fund Balance - Budget and ActualAmerican Recovery and Reinvestment Act - Budget and ActualBudgetary Comparison Schedule - Special Revenue Fund

C-lbC-2

Notes to the Required Supplementary Information

C- 3 Budgetary Comparison Schedule - Note to RSI

Other Supplementary Information

D. School Level Schedules:

0- 10-2

Combining Balance SheetBlended Resource Fund - Schedule of Expenditures

Allocated by Resource Type - ActualBlended Resource Fund - Schedule of Blended ExpendituresSchedule of DEOA Expenditures - Budget and Actual

0-30-4

E. Special Revenue Fund:

E- 1 Combining Schedule of Revenues and ExpendituresSpecial Revenue Fund - Budgetary Basis

E- 2 Demonstrably Effective Program Aid Schedule of Expenditures- Budgetary Basis

E- 3 Early Childhood Program Aid Schedule of Expenditures- Budgetary Basis

E- 4 Distance Learning Network Aid Schedule ofExpenditures - Budgetary Basis

E- 5 Instructional Supplement Aid Schedule of Expenditures- Budgetary Basis

F. Capital Projects Fund:

F- 1 Summary Statement of Project ExpendituresF- 2 Summary Schedule of Revenues, Expenditures, and Change

in Fund Balance - Budgetary BasisF- 2a Summary Schedule of Revenues, Expenditures, and Change

in Fund Balance - Budgetary Basis-ii-

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38 - 58

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61 - 69

N/AN/A70

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G. Proprietary Funds:

Enterprise Fund:

G- 1G-2

Combining Statement of Net PositionCombining Statement of Revenues, Expenses and Changes

in Net PositionsCombining Statement of Cash FlowsG-3

Internal Service Fund:

G-4G-5

Combining Statement of Net AssetsCombining Statement of Revenues, Expenses, and

Changes in Fund Net AssetsCombining Statement of Cash FlowsG-6

H. Fiduciary Funds:

H- 1H-2H-3

Combining Statement of Fiduciary Net PositionCombining Statement of Changes in Fiduciary Net PositionSchedule of Receipts and Disbursements - Student

Activity Agency FundSchedule of Receipts and Disbursements - Payroll Agency FundSchedule of Receipts and Disbursements - Net Payroll Fund

H-4H-5

I. Long-Term Debt:J- 1 Schedule of Serial Bonds1- 2 Schedule of Obligations Under Capital Leases1- 3 Budgetary Comparison Schedule - Debt Fund Service

STATISTICAL SECTION (Unaudited)

Financial TrendsJ- 1 Net PositionlNet Assets by ComponentJ- 2 Changes in Net AssetslNet PositionJ- 3 Fund Balances, Governmental FundsJ- 4 Change in Fund Balances, Governmental FundsJ- 5 General Fund - Other Local Revenue by Source

Revenue CapacityJ- 6 Assessed Value and Actual Value of Taxable PropertyJ- 7 Direct and Overlapping Property Tax RatesJ- 8 Principal Property TaxpayersJ- 9 Property Tax Levies and Collections

Debt CapacityJ-10 Ratios of Outstanding Debt by TypeJ-ll Ratios of Net General Bonded Debt OutstandingJ-12 Direct and Overlapping Governmental Activities DebtJ-13 Legal Debt Margin Information

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96 - 9798

99 - 100101102103104105106107108109110111

PAGE(S)

STATISTICAL SECTION (Unaudited) (Cont'd)

Demographic and Economic InformationJ-14 Demographic and Economic StatisticsJ-15 Principal Employers

Operating InformationJ-16 Full-time Equivalent District Employees by Function/ProgramJ-17 Operating StatisticsJ-18 School Building InformationJ-19 Schedule of Required MaintenanceJ-20 Insurance Schedule

112113114115116117118119120

SINGLE AUDIT SECTION 121

K- 1 Report Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit ofFinancial Statements Performed in Accordance WithGovernment Auditing Standards 122 - 123

K-2 Report on Compliance for Each Major State Program; Reporton Internal Control Over Compliance; and Report onthe Schedule of Expenditures of State Financial AssistanceRequired by New Jersey OMB Circular 04-04 124 - 125

K - 3 Schedule of Expenditures of Federal Awards, Schedule A N/A

K- 4 Schedule of Expenditures of State Financial Assistance,Schedule B 126

K- 5 Notes to the Schedules of Awards and Financial Assistance 127 - 128

K-6 Schedule of Findings and Questioned Costs 129 - 130

K -7 Summary Schedule of Prior Audit Findings 131

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INTRODUCTORY SECTION

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Bethlehem Township Sehool DistrictThomas.B. Conley School Ethe1Hoppock Middle School940 Iron Sridge Road 280 A~bllfylWest Portal RoadAsbury, New Jersey 08802 Asbury, New Jersey 08802Phone: (908) 537-4044 Phone: (9Q8) 419~.6336Fax: (90S) 537.:4309 Fax: (908) 419-1021

Edward Keegan. Ed.D.Chief Sphool Administrator/Principal

Jane Smith. PtincipalEthel HoppockMiddk School

.Edward D. KentBusiness AdlllinistratorlBoard Secretary

S;:Illy KleO) 111Supervisor of Special Services

November 24, 2014

Honorable President andMembers of the Board of EducationBethlehem Township School District940 11'011 Bridge RoadAsbtlry, NJ 08802

Dear Members of'the Board of Education:

The Comprehensive Annual Financial Report (C .A..F,R.}of the ToWl1ship ofBethlehell1 PUblic School District forthe fiscal yeaI' ended June 30, 2014, is hereby submitted. Responsibility for both the accuracy of the data andcompleteness and fainless of the presentation, including all disclosures, rests with the management of the Board ofEducation. To the best of our knowledge and belief, the d&ta presented in the auditor's .repot1:are accurate in allmaterial respects and are reported in a. manner designed to fairly present the financial position and results ofoperations of the various funds and accQ\ll~tgroups of the District. All disclosures necessary to enable the reader togain all.understanding of the District's financial.activities.have.been included.

The C.A.F.R. is presented in four sections: Introductory, finaIlcial. s~tistical. and single au.dit. The introductorysection jllcludes this transmittal letter. the District's organizational chart, and. a list of principal officials. Thefinancial section includes the gl:llleral-put:pose financial stat()ffienlS, management's discussion and analysis, andschedules, as well as the auditor's report thereon. The statistical section includes selected financial anddemographic infonnaticll}, generally presented on a multiyear basis. The District is required t.o undergo an annualsingle audit in conformity with the provisions of the 1996.Single AUQitAct and the.U.S. Off1.ce of Management andBudget Circular A~ 133, Apdits ofSta!e and Local..Govemments, and New Jersey OMB's Circular 04~04, "SingleAudit .Folicy for Recipients of Federal Grants, State Gr~nts, and State Aid." Informati.on related to this single audit,including the auditor's report on the internal control structure and compliance with applicable law!?and regulations,and findings and recommendations, i$ included ill tbe single alJdits¢ctiol1 of this report.

L REPORTING ENTITY AND ITS SERVICES:The Township of Bethlehem Public School District is an independent reporting entity within the criteria adopted byG.A.S.B .. [Governmental Accounting Standards Board) established by Statement No. 14. All funds and accountgroups of the District are included in this repor], The Township of Bethlehem Board of Education and all itsschools constitute the District's reporting/entity.

The Districtprovides a full range of'edueational services appropriate to grade levels K through 8.

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These services incluqe gcnentI.as. well as special education (grades K through 8) programs. The District completedthe 2012-2013 fiscal year witll, an in district em-oUment of 460 $tu(ll':mts,which is 52 (-10.1 %) students less theprevious year's enrollment. The following details the changes in the student enrollment of the District over a tell-year period. These figures do 110t include those students sent eM of district tor special education placements.

Average Daily Enrcllmen]

FiscalYearStudent

EnrollmentPercentChange

2013-20142012,,20132011~201220.10-20112009~20102008-20092007-20082006-20072005-20062004~2005

451460512540555586606613633629

-2.0-10.1-5.2~2;7- 5.3~4.5-1.1-3.2+0.1- 0.1

2. ECONOMIC CONDITION AND OUTLOOK:

As noted above, the District has-had a decliningenrollment; The entollment decHne in out district is Consistellt Withthe ov¢rall decline in Hunterdon County. As a result. we have tried to attract more students through School Choiceas well as implemeutation pf a full day ki,ndergarten program, This y¢a).', w¢ enrolled five School Choice studentsand, unfortunately, the NJDOE has capped our Choice enrollment at four students for the 2015-16 school year. Wehav!;: had to place at least 10 students 011 our Waitingljst.

3. MAJOR INITIATIVES:

Our most important initiative this year and in. the foreseeable future is our 1:1 IP<id progl(lm. This year, gradesthree through eight received !Pads from the District and are using them during the school day. Students in gradessix through eight may also use their Il'ads at home.

4. INTERNAL ACCOUNTING CONTROLS:Management of the District is responsible for e~tablishing and l'uaintaihing an internal control structure designed toellSI.U·cthat the assets .o£the District are protected from loss, theft, or misuse and to ensure that adequatel:\cc(luntingdata are compiled to a119w for tlw· preparatiQn of fmancial statem¢u.ts in conformity with Generally AcceptedAccounting Principles (G.A.A.P.). An internal control structure is design¢<i to provide reasonable, put not absolute,assurance that these objectives lire met. The concept of reas.onable assurance recognizes that: (1) the cost of acontrol should not exceed the benefit$ likely to be derived; and (2) the valuation of c6s(:'<;and benefits requiresestimates and judgments by management.

As a recipient of federal and state Il11ancial.assistance; the District also is responslble forensuring that an adequateinternal control. structure is in place to ensure compliance with applicable laws and regnlatiQllS related to thoseprograms. This Int~rh&l control structure is also subjectto pei'iodic evaluation by the Districtananagement,

As part of the District single audit described earlier, tests are made to determine the adequacy of the intenml controlstructure, including that portion related to federal and state financial assistance programs, as well as to determinethat the District has complied with applicable laws and regulations.

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5. BUDGETARY CONTROLS:In addition to internal accounting controls, the District m",i:ntnins budgetary controls .. The objective of thesebudgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budgetapproved by the. voters of the municipality. Annual appropriated budgets are adopted for the general fUi1{l, thespecial revenue fund, and the debt service fund. Proj¢ct length budgets are. approved for the capital improvementsaccounted for in the capital projects fund. The final budget amount as amended for the fiscal Year is reflected in thefinancial Section. .

An encumbrance a¢90unting system is used to record Qutstanding purchase commitments on a line item basis. Openencumbrances at year-end are t':ither cancelled or aze included as a re-appropriation of fund balances in thesUbsequent year. Those amounts to be 're-appropriated are reported as reservations of fu:n.d balance at Ju:n.e 30,2014.

6. ACCOUNTING SYSTEM AND REPORTS:A District's accounting records must reflect generally accepted principles, as promulgated by the GovernmentalAccounting Standards. Board (G.A.S.B.). The accounjil1g syst~m of the District is organized on the basis cf fundsand account groups. These fimds and account grQUps are explained in "Notes to the Financial Statements,'; Note 1.

Ail effective and efficient system of internal controls is essential to accurate, timely reporting of all relevanttransactions on an accounting system and the r¢Sultant administrative and external reports generated from thatsystem.

7. FINANCIAL INFORMATION AT FISCAL YEAR-END:As demonstrated hy the various statements and schedules included in the financial section of this report, the.Districtcontinu¢S to meet its responsibiUties for sound financialll1l:)nagement. The following schedule presents a summaryof the general fund, special revenue fund, and debt service fund revenues for the fiscal year ended June 30, 2014,ami the amount and percentage of increas.e!(decrease) in relation to the prior year.

Revenue2013-2014Amount

Percentof

Total

Local SourcesState SourcesFederal Sources

7,356,7862,283,875219,169

74.6%23.2%2.2%

Totals

Increase(Decrease)From 2012-13

Percent ofIncrease(Decrease)

(122,331)(65,961)(23,244)

-16.36%-2.81%-9.59%

The following schedule presents a summary ·of the general fund, special revenue fund, and. debt service fundexpenditures for the fiscal year ended June.30, 2013, and the amount-and percentage of increase/ (decrease) inrelation to the prior year.

Expenditures2013-2014Amount

Percentof

Total

Current ExpenseCapital OutlaysSpecial RevenuesDebt Service

8,886,65188,385

219.169396,225

92.7%0.9%2.3%4.1%

Totals

Increase(Decrease)From 20 12~13

Percent OfIncrease(Decrease)

(121,692)(24,584)(31,.844)(2,50l)

-1.4%-21.8%~12.7%-0.6%

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8. DEBT ADMINISTRATION:During the 2013-2014 school year, the District retired $190,000.00 of the principal balance all its 2005 Refun<1ingBonds. These bonds bear interest at.rates ranging from 4.0% t04.375% and mature in annual inslallmcntsthroughJuly 1, 2030. At June 30, 2014,. a principal balance of $4, 845,000.00 remalna outstanding. Manager)j~nt continuesto monitor marke; con<Jitlons to identity any additionalteful1ding opportullities.thatmay arise.

9, CASH MANAGEMENT:The investment policy of the Di&tricLis guided in large part by state statl.lte as detailed in "Notes. to the FinancialStatements," Note T. The District has adopted a cash management plan, which requires it to deposilpllJ:,lic funds inpUblic ..dePQsitories l?rotected frOln loss .under the provisions of {he Governmental Unit. Deposit Protection Act("GUDPA"). GUDPA was initially enacted in 1970 to protect Gove111mcntal unitsJrom a loss of funds .on .depositwith a failed blinking institution in New Jersey. The law requires governmental units to deposit public funds only inpublic dep9sitqdes· located in New Jersey where the fun4s ewe secured. in accordi:lllce. with the .Act, 2009(lluendments to the Act established a sliding collateralization scale for public depositOt1eS acc(,lptillg gov¢flUJ:)ent!:11deposits that is based upon the capitaliZation level ofthe depository.

10. RISK MANAGEMENT:The Board carries various forms of insurance, including but not limited to, general liability and comprehensivecollision, hazard and theft insurance on property and contents, and fidelity bonds. Exhibit J-20 provides a sutntnaryofthe coverlige ll!l10unts and dednctibles.

11. OTHER INFORMATION:State statutes require till annual audit by independent certified public accountants. or registered municipalaccountant'). The-accounting firm ofHoduHk&Morrison,.P.A. was selected by the Board ofEducafion. In additionto meeting the reqllirel11ents set forth in state statutes, the audit also was designed to meet the requirements of theSingle Audit-Act and the related OMB Circular A-133 and New .Jersey OMB's Circular 04~04. the auditor's reporton the general-purpose financial statements and combining and individual fund statements and schedules is includedin the financial section of the report. 'Ihe auditor's reporta related specifically to the single audit ate included in thesingle audit section ofthis report.

12. ACKNOWLEDGEMENTS:We wQuldlike to express our appreciation to the members efthe Township of Bethlehem Board of Education fortaking initiative to pl'Ovide fiscal accountability to, the taxpayers ofthe Disttict and thereby contributing their fullsupporttQ the. development and maintenance of our financial operation. Further, the preparation of this report couldnot have been accomplished without the efficient anQ dc4icatt-'d services of our business office staff members,

CC&IJALf{w4Edward KentActing School Business AdministratorlBoard secretary

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Bethlehem TownshipBoard ofEducation

Auditor!District Architect Board Attorney

Business AdministratOl"/1-jJoard Secretary

Business Office ManagerBookkeeper

Facilities Manager r-

JCustodians

CJlst./Maintcnance StaffBus Driver

Chief School Administra.tor!Principal,. Conley·School

Secretary to Chief School t--

Administrator

IK-5 Teachers

Guidance CounselorSchool NurseTechnology

ISupport StaffSecretaries

Principal,Hoppoek School

I6 - 8.Teachers

Guidallce CounselorSchool NUrse'Techllology

ISupPort StaffSecretaries

SUPervisor,Special Services Curriculum Specialist

Pre-K ....8Special Education TeachersSneclal Education Aides

IChild Study TeamCST Secretary

TOWNSHIP OF BETHLEHEM BOARD OF EDUCATIONHUNTERDON COUNTY, NEW JERSEY

ROSTER OF OFFICIALSJUNE 30,2014

Members of the Board of Education Term Expires

John Logars, PresidentGlenn Graham, Vice-PresidentJeffrey BlomkvistChristopher ConnersJennifer GlaserJennifer SeibertKimberly Solino

2014201620162015201420142014

Other Officials

Dr. Edward Keegan, Chief School AdministratorCarolyn B. Joseph, Interim Board Secretary/School Business AdministratorBrenda Liss, Esq., Board Attorney

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TOWNSHIP OF BETHLEHEM SCHOOL DISTRICTConsultants and Advisors

Attorney

Brenda C. Liss, Esq.Riker Danzig Scherer Highland Perretti, LLC

One Speedwell AvenueHeadquarters Plaza

Morristown, NJ 07962

Audit Firm

Hodulik & Morrison. P.A.1102 Raritan Avenue

P.O. Box 1450Highland Park, NJ 08904

Bond Counsel

Anthony Pannella, Esq.Wi lentz, Goldman & Spitzer90 Woodbridge Center Drive

Woodbridge, NJ 07095

Official Depository

Investors Bank101 JFK Parkway

Short Hills, NJ 07078

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FINANCIAL SECTION

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HODULIK & MORRISON,P.A.CERTIFIED PUBLIC ACCOUNTANTS

REGISTERED MUNICIPAL ACCOUNTANTSPUBLIC SCHOOL ACCOUNTANTS

1102 RARITAN AVENUE,P.O.BOX 1450HIGHLAND PARK, NJ 08904

(732) 393-1000(732) 393-1196 (FAX)

ANDREW G. HODULIK, CPA, RMA, PSAROBERT S.MORRISON, CPA, RMA, PSA

MEMBERS OF:AMERICAN INSTITUTE OF CPA'SNEW JERSEY SOCIEIY OF CPA'S

REGISTERED MUNICIPAL ACCOUNTANTS OFNJ.10ANN BOOS, CPA. PSA

INDEPENDENT AUDITOR'S REPORT

Honorable President and Membersof the Board of Education

Bethlehem Township School DistrictCounty of Hunter don, New Jersey

REPORT ON FINANCIAL STATEMENTS

We have audited the accompanying fmancial statements of the governmental activities, thebusiness-type activities, each major fund and the aggregate remaining fund information of theBoard of Education of the Township of Bethlehem School District, in the County of Hunterdon,State of New Jersey, as of and for the fiscal year ended June 30, 2014, and the related notes to thefinancial statements, which collectively comprise the district's basic financial statements as listedin the table of contents.

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in the United States of America; thisincludes the design, implementation, and maintenance of internal control relevant to thepreparation and fair presentation of financial statements that are free from material misstatement.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express opinions on these financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the United Statesof America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and audit requirements asprescribed by the Division of Finance, Department of Education, State of New Jersey. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures 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, whetherdue to fraud or error. In making these risk assessments, the auditor considers internal controlrelevant to the entity's preparation and fair presentation of the financial statements in order todesign audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the entity's internal control. Accordingly, weexpress no such opinion. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of significant accounting estimates made by management, aswell as evaluating the overall presentation of the fmancial statements.

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We believe that our audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.

OPINIONS

In our opinion, the financial statements referred to above present fairly, in all material respects,the respective financial position of the governmental activities, business-type activities, eachmajor fund, and the aggregate remaining fund information of the Township of Bethlehem SchoolDistrict, in the County of Hunterdon, State of New Jersey, as ofJune 30, 2014 and the respectivechanges in financial position and cash flows, where applicable, for the year then ended III

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 themanagement's discussion and analysis and budgetary comparison information, as listed in thetable of contents, be presented to supplement the basic financial statements. Such information,although not a part of the basic financial statements, is required by the Governmental AccountingStandards Board, who considers it to be an essential part of financial reporting for placing thebasic financial statements in an appropriate operational, economic, or historical context. We haveapplied certain limited procedures to the required supplementary information in accordance withauditing standards generally accepted in the United States of America, which consisted ofinquiries of management about the methods of preparing the information and comparing theinformation for consistency with management's responses to our inquires, the basic financialstatements, 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 limitedprocedures do not provide us with sufficient evidence to express an opinion or provide anyassurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the Township of Bethlehem School District's basic financial statements as awhole. The accompanying other supplementary information, consisting of the combing andindividual fund financial statements, and long-term debt schedules, as listed in the table ofcontents, the schedule of state financial assistance, required by New Jersey OMB Circular 04-04,and the other information, including the introductory section and the statistical section arepresented for purpose of additional analysis and are not a required part of the financial statements.

The combing and individual fund financial statements, long-term debt schedules and the scheduleof state financial assistance are the responsibility of management and were derived from andrelate directly to the underlying accounting and other records used to prepare the basic financialstatements. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and certain additional procedures, including comparing and reconcilingsuch information directly to the underlying accounting and other records used to prepare thefinancial statements or to the financial statements themselves, and other additional procedures inaccordance with auditing standards generally accepted in the United States of America. In ouropinion, the combing and individual fund financial statements, long-term debt schedules and theschedule of state financial assistance are fairly stated in all material respects in relation to thefinancial statements as a whole.

The introductory section and statistical section have not been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, accordingly, we do not express anopinion or provide any assurance on them.

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OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS

In accordance with Government Auditing Standards, we have also issued our report datedNovember 24,2014 on our consideration of the Township of Bethlehem School District's internalcontrol over financial reporting and our tests of its compliance with certain provisions of laws,regulations, contracts and grant agreements and other matters. The purpose of that report is todescribe the scope of our testing of internal control over financial reporting and compliance andthe results of that testing, and not to provide an opinion on the internal control over financialreporting or on compliance. That report is an integral part of our audit performed in accordancewith Government Auditing Standards in considering the Bethlehem Township School District'sinternal control over financial reporting and compliance.

HODULIK & MORRISON, P.A.Certified Public Accountants

~;,~Robert S. MorrisonPublic School AccountantPSA # 871

Highland Park, New JerseyNovember 24,2014

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REQUIRED SUPPLEMENTARYINFORMATION

PART I

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BETHLEHEM TOWNSHIP SCHOOL DISTRICTAsbury, New JerseyHunterdon County

MANAGEMENT DISCUSSION & ANALYSIS (MD&A)June 30, 2014

The Township of Bethlehem School District (the "District") discussion and analysis is designed to providean overview of the District's financial activities for the year ended June 30, 2014, identify changes in theDistrict's financial position, identify any material deviations from the financial plan (the approved budget),and identify individual fund issues or concerns.

The focus of the Management Discussion and Analysis (MD&A) is on current year activities, resultingchanges and currently known facts. The MD&A should be read in conjunction with the Transmittal Letterand the District's Financial Statements.

Financial Highlights

The district's governmental activities net position increased by $356,707 as reflected in Table 2, Changes inNet Position. This increase is primarily attributable to favorable variances (budget v. actual) in currentoperations of $269,398. An additional $91,697 is attributable to the excess of long-term liability reductionsand capital equipment acquisitions over depreciation. These increases were offset by an increase in accruedliabilities of $4,389. The district's business-type activity expenses exceeded related revenues by $11,607.This amount was entirely comprised of the net loss from food service operations. The District entered into a"break-even" contract with its food service management company for the year, and as a result, the reportednet loss is comprised of depreciation and equipment repair expenses, which are excluded from the contractual"break-even" formula. The breakdown of the governmental and business-type activity amounts are reflectedin Schedule A-2 of the District-wide Financial Statements. The District's General Fund reported an increasein Fund Balance of $269,398 for the year as reflected in Schedule B-2 of the District-wide FinancialStatements.

Understanding the Annual Report

New Jersey state law and administrative code require that school districts follow Generally AcceptedAccounting Principles (GAAP.) The format focuses on the district as a whole (government-wide financialstatements) and refocuses the fund financial statements on major funds. Major funds are defined as those inwhich total assets and liabilities or revenues and expenditures/expenses are 10% or more of the total assetsand liabilities or revenues and expenditures/expenses of all funds of that type (governmental, proprietary,etc.) and at least 5% of the assets and liabilities or revenues and expenditures/expenses for all governmentaland enterprise funds combined.

Government-Wide Financial Statements

The government-wide financial statements (see financial statements A-I and A-2) are designed to becorporate-like in that all government and business-type activities are consolidated into columns, which addto a total for the district. The focus of the Statement of Net Position is designed to be similar to a bottomline for the district and its governmental and business type activities. This statement combines andconsolidates governmental fund's current financial resources (short-term spendable resources) with capitalassets and long-term obligations.

The Statement of Activities is focused on both the gross and net costs of various activities (includinggovernmental and business-type), which are provided by the government's general tax and other revenues.This statement is intended to summarize and simplify the user's analysis of the cost of variousgovernmental services and/or subsidy to various business type activities. All changes in net position arereported as soon as the underlying event giving rise to the change occurs, regardless of the timing of therelated cash flows. Over time, increases or decreases in net position may serve as a useful indicator ofwhether the financial position of the district is improving or deteriorating.

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Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have beensegregated for specific activities or objectives. As required by accounting principles generally accepted inthe U.S and New Jersey state law and regulation, the district uses fund accounting to ensure anddemonstrate compliance with finance related legal requirements. All of the funds of the district can bedivided into three categories: governmental funds, proprietary funds and fiduciary funds.

The governmental funds are used to account for essentially the same functions reported as governmentalactivities in the government-wide financial statements. However, unlike the government-wide financialstatements, governmental fund financial statements focus on near-term inflows and outflows of spendableresources and balances of spendable resources available at the end of the fiscal year. This is the manner inwhich the District's financial plan (budget) is typically developed. The flow and availability of currentfinancial resources is a clear and appropriate focus of any analysis of a government. The financialstatements include reconciliations of the differences between the fund balance of the governmental fundsand the net position of the governmental activities in the government-wide financial statements (Exhibit B-1) and a reconciliation of the differences between the net changes in government fund balances and thechange in net position in the government-wide financial statements (Exhibit B-3).

The proprietary funds consist of a major program (food services enterprise fund) Proprietary funds areused to account for activities and programs that are financed primarily through user fees. The activityreported in the proprietary funds utilizes the same basis of accounting as that of the business-type activitiesreported in the government-wide financial statements. The "Total" column on the business-type fundfinancial statements is the same as the business-type column on the government-wide financial statements.

Fiduciary funds are used to account for resources held for the benefit of parties outside of the government.Fiduciary funds are not reported in the government-wide financial statements because the resources ofthose funds are not available to support the programs of the district. The district's fiduciary funds includethe student activities fund, the payroll agency fund, and the employee benefit flexible spending trust fund.

The District as a Whole

Table I reflects the condensed Statement of Net Assets. In this statement the district is divided into twokinds of activities:

Governmental Activities-These activities consist of instruction and those services, which supportinstruction such as maintenance, transportation and administration.

Business-Type Activities- These activities consist of the district's cafeteria operations, childcare program,summer camp program and summer enrichment program. Each of the aforementioned programs and thecafeteria charge fees for the services provided that are intended to cover most or all of the cost of servicesprovided.

The condensed Statement of Net Position reflects assets, deferred outflows of resources, liabilities anddeferred inflows of resources of the district on an accrual basis of accounting. This statement, whichreflects the district's net financial position, is a yardstick of measuring the district's net worth. It meansthat if the district were forced to liquidate on June 30,2014 and sell all its assets at book value, after payingall known bills and liabilities, including long-term bonds and lease obligations, the District would have atotal of $691,964 remaining.

-15 -

Table 1Net Position

Business-TypeGovernmental Activities Activities Total School District

2014 2013 2014 2013 2014 2013Current and OtherAssets 1,657,421 1,413,754 5,740 17,316 1,663,161 1,431,070Capital Assets 4,161,042 4,294,603 36,746 36,714 4,197,788 4,331,317

Total Assets 5,818,463 5,708,357 42,486 54,030 5,860,949 5,762,387

Long-Term DebtOutstanding 5,011,347 5,236,605 5,011,347 5,236,605

Other Liabilities 122,370 143,713 122,370 143,713

Total Liabilities 5,133,717 5,280,318 5,133,717 5,380,318

Net Position:Net Investment inCapital Assets (683,958) (740,397) 36,746 36,714 (647,212) (703,683)

Restricted 1,535,641 1,296,245 1,535,641 1,296,245

Unrestricted {l66,937} {227,809} 5,740 17,316 {161,197} {210,493}Total Net Position 684,746 328,039 42,486 54,030 727,232 382,069

The results of this year's operations of the district's Governmental Activities and Business-type Activitiesare reported in the Statement of Activities (Exhibit A-2). Table 2, below, takes the information from thatfinancial statement, rounds off the numbers, and rearranges them slightly so you can see the District's totalrevenues and expenses for the year.

Table 2Changes in Net Position

Business-TypeGovernmental Activities Activities Total School District

2014 2013 2014 2013 2014 2013Revenues:Charges for Services 80,627 83,941 80,627 83,941Operating Grants and Contributions 1,405,638 1,527,804 20,695 24,647 1,426,333 1,552,451

General Revenues:Property Taxes 7,330,755 7,368,104 7,330,755 7,368,104

TuitionState Aid-Unrestricted 1,097,406 1,073,045 1,097,406 1,073,045

Other General Revenues 26,031 102,413 53 45 26084 102,458

Total Revenues 9,859,830 10,071:366 101,375 108,633 9,961,205 10,179,999

-16 -

2014 2013 2014 2013 2014 2013Program Expenses IncludingIndirect Expenses:

Instruction:Regular 2,233,645 2,692,768 2,233,645 2,692,768Special Education 1,083,447 1,047,824 1,083,447 1,047,824Other Instruction 82,785 88,197 82,785 88,197

Support Services:Tuition 259,797 356,896 259,797 356,896Student & Instruction Related Services 1,292,832 1,032,608 1,292,832 1,032,608School Administrative Services 320,198 216,477 320,198 216,477General and Business Admin. Services 501,287 571,839 501,287 571,839

Plant Operations and Maintenance 846,671 792,657 846,671 792,657Pupil Transportation 438,127 511,592 438,127 511,592Unallocated Benefits 2,017,592 1,971,803 2,017,592 1,971,803

Interest on Long-Term Debt 233,499 210,333 233,499 210,333Unallocated Depreciation & Amortization 193,241 181,305 193,241 181,305Business-Type Activities:

Food Service 112,928 117,527 112,938 117,527

Total Expenses 9,5303,122 9,6741299 112,928 117,527 9,616,050 9,791,826Special Item - Prior Year RevenueAdjustment {65,963} {65,963}

Increase (Decrease) in Net Position 356,707 331,104 {11,554} {8,894} 345,154 322,210

During FY 2014 the net position ofthe District's governmental activities increased by $356,707. Favorablebudget variances and the excess of debt repayment and capital equipment acquisitions over depreciationexpenses were offset by the write-off of state building aid revenues accrued in prior periods and deemeduncollectible during the current fiscal period. The net position of the food service (business-type) activitiesdecreased by $11,554 in the current fiscal period. The food service fund has been operating at a deficit forseveral years. At June 30, 2014, the unrestricted net position of the food service fund was $5,740.

The balance generated in current operations was primarily driven by savings throughout the budget. ExhibitC-l provides a breakdown of the budget line items included in the District's approved 2013-2014 budgetand the variances in actual revenues and expenditures. Revenue realization for the 2013-2014 school yeardeclined for governmental activities when compared to the 2012-2013 school year. As shown in Table 3,the Tax needed to support the District's budget decreased by 0.61% for the 2012-2013 school year. The taxlevy for general operations was held at the prior year levels, and required debt service levies declined by$45,065. Non-tax revenues of the District remain a small percentage of total revenues, however,unrestricted non-tax local revenues increased by $60,512 during the current year. Additionally, the districtrealized $21,836 more then anticipated for Extraordinary Aid.

-17 -

Table 3Governmental Fund Type Revenues and Expenditures

Revenues by Source:

Local Tax LevyOther Local SourcesTotal Local Sources

State SourcesFederal SourcesTotal Revenues

2013-2014 2012-2013 % Change

7,330,755 7,368,104 -0.51%26,031 111,013 -76.55%

7,356,786 7,479,117 -1.64%2,283,875 2,349,836 -2.81%219,169 242,413 -9.59%

9,859,830 10,071,366 -2.10%

Expenditures by Function

Current:Regular InstructionSpecial Education InstructionOther InstructionSupport Services and Undistributed Costs:

TuitionStudent & Instruction Related ServicesSchool Administrative ServicesOther Administrative ServicesPlant Operations and MaintenancePupil TransportationUnallocated Benefits

Debt Service:PrincipalInterest and Other Charges

Capital OutlayTotal Expenditures

2,268,903 2,692,768 -15.74%1,083,448 1,047,824 3.40%

82,785 88,197 -6.14%

259,797 356,895 -27.21%1,292,832 1,032,608 25.20%320,198 216,477 47.91%501,287 571,839 -12.34%840,851 769,772 9.23%438,127 511,592 -14.36%

2,017,592 1,971,384 2.34%

190,000 185,000 2.70%206,225 213,725 -3.51%88,385 112,969 -21.76%

9,590,430 9,771,050 -1.84%

The Cost of Governmental Funds Activities (see Table 3) this year was $9.59 million or a 1.84% decreasefrom the preceding year. The primary driver for this decrease was the reported costs of regular instruction,tuition, including tuition paid from federal funding sources, and general administration, transportation andcapital outlays. Although reported costs for employee benefits increased by $46,211, the actual costsfunded by the District budget increased by $177,000 during the 2013-14 school year. A decrease in theamount of "on-behalf' benefits payments made by the State of New Jersey for TPAF social security,pension, and post-retirement health care costs, which by statute are the state's responsibility. "On-behalf'payments decreased by $130,421 during the current period.

The District's Funds

The district's Balance Sheet for Governmental Funds (statement B-1) reports a combined fund balance of$1.636 million. The general fund portion of this balance includes an increase of $269,398 which resultedfrom current year's activities. This increase is the result of positive operating variances relative tobudgetary anticipations. In the FY 2014-2015 budget $350,035 of fund balance has been included as an

-18 -

offset to local taxes. An additional $308,941 is set-aside for FY 15-16 to stabilize the local tax levy on aGAAP basis.

General Fund Budgetary Highlights

The 2013-2014 revenues of the General fund amounted to $9.244 million or a 2.55% decrease from theprior year. Decreases were reported in every category of revenue, including property taxes, which weredecreased in the Board approved budget.

The 2013-2014 expenditures of the General fund amounted to $8.975 million, an decrease of $143,276(1.6%) from the prior year. Instructional, Tuition, General Administration and Transportation costs werethe largest cost drivers for the decrease. Excluding In-Kind costs, which are not budgeted, the Districtunderspent its available appropriation by $743,630 in 2013-2014.

Capital Asset and Debt Administration

Capital Assets

The District engaged an inventory valuation firm to identify and value its fixed assets as of June 30, 2013and for the current and prior school years. As the new inventory data did not conform to the amountsreported in the prior Comprehensive Annual Financial Statement, a restatement of the June 30, 2013 NetPosition of the District was required. The District's net investment in fixed assets and total net positionincreased by $896,708 as a result of this restatement. At the end of 2013, the district had $4,331,317invested in capital assets as shown on Table 4, Capital Assets Net of Depreciation at June 30, 2013 and2014. During 2013-2014, the District capitalized the costs of equipment and architectural fees totaling$59,680 in its governmental activities. Depreciation expense for 2013-2014 totaled $202,190, whichincluded $193,241 for governmental activities and $8,948 for business-type activities. During the 2013-2014 school year, the $190,000 of capital related debt retired was short of depreciation expenses by $3,421,decreasing the net increase in the District's financial position at year-end.

Capital AssetsTable 4

Capital Assets at Year-End(Net of Depreciation)

Governmental Activities

2014 2013

Land 139,200 139,200Land Improvements 94,829 94,829Buildings & Improvements 7,475,660 7,475,660Machinery & Equipment 688,240 628,560

Subtotal 8,397,929 8,338,249Accumulated Depreciation {4,236,887) {4,043,646)

Totals 4,161,042 4,294,603

Business-Type Activities Total School District

139,20094,829

7,475,660896,543208,303

199,323

071,557)

36,746

199,323

199,323

062,609)

36,714

8,606,232

{4,408,444)

4,197,788

-19 -

139,20094,829

7,475,660827,883

8,537,572

{4,206,255)

4,331,317

Debt

The district's outstanding debt is shown in Table 5, Outstanding Debt at June 30, 2014. The district's onlyoutstanding bond issue, the 2005 Refunding Bonds, carried a Moody's rating of AAA based upon theprocurement of a municipal bond insurance policy issued by Financial Security Assurance Inc. Bondswhich are rated AAA, are judged to be of the best quality. They carry the smallest degree of investmentrisk. The district remains well within the state allowable limit for debt issuance, which is limited to 3% ofthe average equalized value of taxable property within the district.

DebtTable 5

Outstanding Debt at Year-EndGovernmental Activities

2014 2013

Serial Bonds PayableCompensated Absences

4,845,000166,347

5,035,000201,605

5,011,347 5,236,605

Economic Factors and Next Year's Budgets and Rates

The FY 14-15 operating budget was framed as the current national and statewide economic downturnremains stagnated. The Township of Bethlehem Board of Education and district administration framed abudget, which reflected consideration of these factors as well as district educational and financial goals.

We will continue to look for opportunities to save taxpayer money while increasing the financial support toour educational and co-curricular programs. As last year's budget reflects, we were able to do more withless.

CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT

Our financial report is designed to provide our citizens, taxpayers, parents, students, investors and creditorswith a general overview of the school district's finances and to show the school district's accountability forthe money it received. If you have any questions about this report or wish to request additional financialinformation, contact Edward Kent, Acting School Business AdministratorlBoard Secretary, at Township ofBethlehem Board of Education, 940 Iron Bridge Road, Asbury, New Jersey, 08802.

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BASIC FINANCIAL STATEMENTS

- 21-

DISTRICT-WIDE FINANCIAL STATEMENTS

SECTION-A

- 22-

Exhibit A-I

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSTATEMENT OF NET POSITION

JUNE 30, 2014

GOVERNMENTAL BUSINESS-TYPEACTIVITIES ACTIVITIES TOTAL

ASSETSCash and Cash Equivalents $ 1,613,806.12 $ 1,080.65 $ 1,614,886.77Receivables, Net 43,464.94 2,876.64 46,341.58Receivables from Other Funds 150.06 150.06Inventory 1,782.32 1,782.32Capital Assets, Net (Note 3): 4,161,042.15 36,746.30 4,197,788.45

Total Assets 5,818,463.27 42,485.91 5,860,949.18

LIABILITIESAccounts Payable 21,720.00 21,720.00Accrued Interest Payable 100,650.21 100,650.21Noncurrent Liabilities (Note 4):

Due Within One Year 257,065.40 257,065.40Due Beyond One Year 4,754,281.34 4,754,281.34

Total liabilities 5,133,716.95 5,133,716.95

NET POSITIONInvested in capital assets, net of related debt (683,957.85) 36,746.30 (647,211.55)Restricted for:

Other Purposes 1,535,641.25 1,535,641.25Unrestricted (Deficit) (166,937.08) 5739.61 (161,197.47)

Total Net Position $ 684:746.32 $ 42:485.91 $ 727:232.23

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

- 23-

FunctionslPrograms

Governmental Activities:Instruction:RegularSpecial EducationOther Instruction

Support Services:TuitionStudent & Instruction Related ServicesSchool Administrative ServicesGeneral and Business Administrative ServicesPlant Operations and MaintenancePupil TransportationUnallocated Benefits

Interest on Long-Term DebtUnallocated Depreciation and Amortization

Total Governmental Activities

Business-Type Activities:Food Service

Total Business-Type Activities

Total Primary Government

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSTATEMENT OF ACTIVITIES

FOR THE YEAR ENDED JUNE 30, 2014

PROGRAM REVENUES

EXPENSES

CHARGES OPERATINGFOR GRANTS AND

SERVICES CONTRIBUTIONS

$2,233,644.90 8,099.001,083,447.57 354,078.00

82,785.27

259,797.47 103,795.001,292,831. 73 107,274.74320,197.75501,287.34846,670.96 38,403.00438,126.71 88,973.60

2,017,592.33 705,014.28233,498.79193,241.29

9,503,122.11 1,405,637.62

112,928.37 80:626.80 20694.73

112:928.37 80:626.80 20694.73

$9:616,050.48 $80:626.80 $1:426:332.35

General Revenues:Taxes:Property Taxes, Levied for General Purposes,NetTaxes Levied for Debt Service

Federal and State Aid not RestrictedInvestment EarningsMiscellaneous Income

Total General Revenues and Special Items

Change in Net Position

Net Position-Beginning

Net Position-Ending


ExhibitA-2

NET (EXPENSE) REVENUE ANDCHANGE IN NET ASSETS

GOVERNMENTAL BUSINESS-TYPEACTIVITIES ACTIVITIES

($2,225,545.90)(729,369.57)(82,785.27)

(156,002.47)(1,185,556.99)(320,197.75)(501,287.34)(808,267.96)(349,153.11)

(1,312,578.05)(233,498.79)(193:241.29)

(8:097,484.49)

(11:606.84)

(11:606.84)

TOTAL

($2,225,545.90)(729,369.57)(82,785.27)

(156,002.47)(1,185,556.99)(320,197.75)(501,287.34)(808,267.96)(349,153.11)

(1,312,578.05)(233,498.79)(193:241.29)

(8:097,484.49)

(11:606.84)

(11:606.84)

($8,097,484.49) ($11,606.84) ($8,109,091.33)

$6,934,529.00 $6,934,529.00396,226.00 396,226.00

1,097,406.00 1,097,406.0053.14 53.14

26:030.83 26:030.83

8,45991.83 53.14 8:454:244.97

356,707.34 (11,553.70) 345,153.64

328:038.98 54:029.61 382:068.59

$68946.32 $42:475.91 $727:222.23

FUND FINANCIAL STATEMENTS

SECTION -B

- 25-

GOVERNMENTAL FUNDS

-~-

Exhibit B-1Page 1 of2

BETHLEHEM TOWNSHIP SCHOOL DISTRICTBALANCE SHEET

GOVERNMENTAL FUNDSJUNE 30, 2014

SPECIAL DEBT TOTALGENERAL REVENUE SERVICE GOVERNMENTAL

FUND FUND FUND FUNDS

ASSETSCash and Cash Equivalents (Deficit) $ 1,643,509.25 $ (29,706.00) $ 2.87 $ 1,613,806.12Interfund Accounts Receivable 150.06 150.06Receivables from Other Governments 132758.94 292706.00 43464.94

Total Assets 126572418.25 2.87 126572421.12

LIABILITIES AND FUND BALANCESLiabilities:

N Accounts Payable 212720.00 212720.00'1

Total Liabilities 212720.00 212720.00

Fund Balances:Restricted:Reserved Excess Surplus 308,941.22 308,941.22Reserved Excess Surplus-Designated forSubsequent Year Expenditures 350,035.00 350,035.00

Capital Reserve Account 30,001.00 30,001.00Maintenance Reserve Account 376,889.61 376,889.61

Committed:Reserve for Encumbrances 469,774.42 469,774.42

Unassigned:Debt Service Fund 2.87 2.87General Fund 1002057.00 1002057.00

Total Fund Balances 126352698.25 2.87 126352701.12

Total Liabilities and Fund Balances $ 12657A18.25 $ $ 2.87 $ 12657A21.12


BETHLEHEM TOWNSHIP SCHOOL DISTRICTBALANCE SHEET

GOVERNMENTAL FUNDSJUNE 30, 2014

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

Capital assets used in governmental activities are not fmancialresources and therefore are not reported in the funds. The carrying valueof the assets is $8,397,929.2 , and the accumulated depreciationis $4,236,887.06 .

Long-term liabilities, including bonds and judgments payable, are not due andpayable in the current period and therefore are not reported asliabilties in the funds.

N00 Short-term Liabilities, including accrued interest on long-term debt,

are not due payable in the current period and therefore are notreported as liabilities in the funds.

Net position of governmental activities


Exhibit B-1Page 2 of2

$ 1,635,701.12

4,161,042.15

(5,011,346.74)

(100,650.21)

$ ==~6=84=,7=4=6.=32;::

Exhibit B-2BETHLEHEM TOWNSHIP SCHOOL DISTRICT

STATEMENT OF REVENUES, EXPENSES, AND CHANGE IN FUND BALANCESGOVERNMENTAL FUNDS


SPECIAL DEBT TOTALGENERAL REVENUE SERVICE GOVERNMENTAL

FUND FUND FUND FUNDSREVENUES

Local Tax Levy $ 6,934,529.00 $ $ 396,226.00 $ 7,330,755.00Other Local Sources 26,030.83 26,030.83State Sources 2,283,874.88 2,283,874.88Federal Sources 219z168.74 219168.74

Total Revenues 9z244z434.71 219z168.74 396z226.00 9z859z829.45

EXPENDITURESCurrent:

Regular Instruction 2,260,803.92 8,099.00 2,268,902.92Special Education Instruction 1,083,447.57 1,083,447.57Other Instruction 82,785.27 82,785.27

tv Support Services and Undistributed Costs:\0 Tuition 156,002.47 103,795.00 259,797.47

Student & Instruction Related Services 1,185,556.99 107,274.74 1,292,831.73School Administrative Services 320,197.75 320,197.75Other Administrative Services 501,287.34 501,287.34Plant Operations and Maintenance 840,850.96 840,850.96Pupil Transportation 438,126.71 438,126.71Unallocated Benefits 2,017,592.33 2,017,592.33

Debt Service:Principal 190,000.00 190,000.00Interest Charges 206,225.04 206,225.04

Capital Outlay 88z385.01 88385.01

Total Expenditures 8z975z036.32 219z168.74 396z225.04 9z590z430.10

Excess (Deficiency) of Revenuesover Expenditures 2692398.39 0.96 2692399.35

Net Change in Fund Balances 269,398.39 0.96 269,399.35

Fund Balance-Beginning 12366z299.86 1.91 lz3662301.77

Fund Balance-Ending $ 1z6352698.25 $ $ 2.87 $ lz6352701.12


BETHLEHEM TOWNSHIP SCHOOL DISTRICTRECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSTO THE STATEMENT OF ACTIVITIESFOR THE YEAR ENDED JUNE 30. 2014

Total net change in fund balances - governmental funds (from B-2)

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

Capital outlays are reported in governmental funds as expenditures. However, in the statement ofactivities, the cost of those assets is allocated over their estimated useful lives as depreciation expense.This is the amount by which depreciation exceeded capital outlays in the period.

Depreciation expenseCapital Outlays

Repayment of bond and lease obligation (long-term debt)principal is an expenditure in the governmental funds,but the repayment reduces long-term liabilities in the statement of net assets and is not reported in thestatement of activities.

In the statement of activities, the value of earned but unused compensated absences are accrued when it becomes,likely that these costs will be includable in employee termination payments, regardless of when due. In thegovernmental funds, compensated absence costs are reported in the accounting period in which they becomedue and payable. The net decrease in accrued compensated absences is an addition in the reconciliation. (+)

In the statement of activities, interest on long-term debt in the statement of activities is accrued,regardless of when due. In the governmental funds, interest is reported when due. The accruedinterest is a deduction in the reconciliation. (-)

Change in net assets of governmental activities


- 30-

Exhibit B-3

$ 269,399.35

(193,241.29)59,680.01 (133,561.28)

190,000.00

35,258.02

(4,388.75)

$ 356,707.34

PROPRIETARY FUNDS

- 31-

Exhibit B-4

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSTATEMENT OF NET POSITION

PROPPRIETARY FUNDSJUNE 30, 2014

BUSINESS-TYPE TOTALACTIVITIES - ENTERPRISE

ENTERPRISE FUND FUNDFOOD ----~~-----

SERVICE TOTAL

ASSETSCurrent assets:

Cash and Cash EquivalentsAccounts Receivable (Net)Inventory

Total Assets

$ 1,080.65 $ 1,080.652,876.64 2,876.641,782.32 1,782.32

5,739.61 5,739.61

208,303.38 208,303.38(171,557.08) (171,557.08)

36,746.30 36,746.30

42,485.91 42,485.91

Total Current Assets

Noncurrent Assets:Furniture, Machinery & Equipment

Less Accumulated Depreciation

Total Noncurrent Assets

NET POSITIONInvested in Capital Assets Net of

Related DebtUnrestricted (Deficit)

36,746.305,739.61

36,746.305739.61

Total Net Position $ 42,485.91 $ ===4=2:l:::,4=85:::::.9=1=


- 32-

Exhibit B-5

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSTATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION

PROPRIETARY FUNDSFOR THE YEAR ENDED JUNE 30, 2014

BUSINESS-TYPEACTIVITIES -

ENTERPRISE FUNDFOOD

SERVICE

TOTALENTERPRISE

FUNDOperating Revenues:

Charges for Services:Daily Sales - Non-reimbursable Programs

Total Operating Revenues

Operating Income (Loss)

$ 80,626.80 $ 80,626.80

80,626.80 80,626.80

48,449.53 48,449.5334,532.56 34,532.565,299.51 5,299.51550.61 550.61

4,272.29 4,272.29223.09 223.09

1,642.70 1,642.709,000.00 9,000.008948.08 8,948.08

112918.37 112,918.37

{32,291.572 {32,291.572

Operating Expenses:Cost of SalesSalariesEmployee benefitsRepair and Maintenance ServicesAdministrative ExpensesMiscellaneous ExpensesTransportationManagement FeeDepreciation

Total Operating Expenses

Nonoperating Revenues (Expenses):State Sources:State School Lunch Program

Federal Sources:USDA CommoditiesNational School Lunch Program

Interest and Investment Revenue

Income (Loss) Before Transfers

1,095.87 1,095.87

6,114.82 6,114.8213,484.04 13,484.04

53.14 53.14

20747.87 20747.87

(11,543.70) (11,543.70)

(11,543.70) (11,543.70)

54029.61 54,029.61

$ 42485.91 $ 42,485.91

Total Nonoperating Revenues (Expenses)

Change in Net Position

Total Net Position-Beginning

Total Net Position-Ending

The accompanying Notes to Financial Statements are an integral part of this statement.- 33-

Exhibit B-6BETHLEHEM TOWNSHIP SCHOOL DISTRICT

STATEMENT OF CASH FLOWSPROPRIETARY FUNDS

FOR THE YEAR ENDED JUNE 30. 2014

Net Cash Provided by (Used for) Operating Activities


ENTERPRISE FUND TOTALFOOD ENTERPRISE

SERVICE FUND

$ 80,569.05 $ 80,569.05(97,444.34) (97,444.34)

(16,875.29) (16,875.29)

12,134.69 12,134.693064.29 3,064.29

15 198.98 15:198.98

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from CustomersPayments to Suppliers

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESFederal and State SourcesOperating Subsidies and Transfers (to) from Other Funds

Net Cash Provided by (Used for) Non-capital Financing Activities

CASH FLOWS FROM CAPITALAND RELATEDFINANCING ACTIVITIES

Purchases of Capital Assets (8:980.38) (8:980.38)

(8:980.38) (8:980.38)

53.14 53.14

53.14 53.14

(10,603.55) (10,603.55)

11:684.20 11:684.20

1080.65 $ 1:080.65

Net cash provided by (used for) capital and related financing activitie ~;...;;;..;;=.;;;",-

CASH FLOWS FROM INVESTING ACTIVITIESInterest and dividends

Net cash provided by (used for) investing activities

Net Increase (Decrease) in Cash and Cash Equivalents

Balances-Beginning of Year

Balances-End of Year $ ---:==;_

Reconciliation of Operating Income (Loss) to Net Cash Provided(Used] by Operating Activities:Operating Income (Loss) $ (32:291.57) (32:291.57)

Adjustments to Reconcile Operating Income (Loss) to Net CashProvided by (Used for) Operating ActivitiesDepreciation and Net Amortization 8,948.08 8,948.08USDA Commodities 6,879.33 6,879.33(Increase) Decrease in Inventory (411.13) (411.13)

Total Adjustments 15:416.28 15:416.28

Net Cash Provided by (Used for) Operating Activities $ {16z875.29} {16z875.29}


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FIDUCIARY FUNDS

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Exhibit - B- 7

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSTATEMENT OF FIDUCIARY NET POSITION

JUNE 30,2014

AgencyFunds

ExpendableTrust Funds

Employee BenefitTrust Fund TOTALS

ASSETS

Cash and Cash Equivalents $ 132,980.75 $ __ ____;1;.o.;8;.;;;.5;;;..;;3.=89_$ 134,834.64

132,980.75 $ 1,853.89 $ 134,834.64Total Assets $

LIABILITIES

Liabilities:Interfund Accounts PayableAccounts PayablePayroll Deductions and WitholdingsStudent Activity reserves

$ 136.74 $ 13.32 $ 150.06

113,311.9819,532.03

113,311.9819,532.03

Total Liabilities $ ==1=:3:::::2i:::,9:::80::::.7:::5= 13.32 132,994.07-------NET POSITION

Reserved for:Unemployment Compensation Insurance 1 840.57 1,840.57

1,840.57 $==1=,8=4=0.=57=Total Net Position $


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Exhibit - B-8

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSTATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDSFOR THE YEAR ENDED JUNE 30, 2014

ExpendableTrust Funds

Employee BenefitTrust Fund Totals

ADDITIONS:Deductions from Employees' Salaries $ 8692.40 $ 8,692.40

Total Additions 8692.40 8692.40

DEDUCTIONS:Eligible Benefits 12991.51 12991.51

Total Deductions 12,991.51 12,991.51

Change in Net Position (4,299.11) (4,299.11)

Net Position - Beginning 6 139.38 6 139.38

Net Position - Ending $ 1,840.27 $ 1,840.27


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TOWNSHIP OF BETHLEHEM SCHOOL DISTRICTCOUNTY OFBHUNTERDON, NEW JERSEY

NOTES TO FINANCIAL STATEMENTSJUNE 30, 2014

NOTE 10 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Ao Description of Government-Wide Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement ofactivities) of the Board of Education (Board) of the Township of bethlehem School District (District)report information on all of the nonfiduciary activities of the primary government only. All fiduciaryactivities are reported only in the fund financial statements. Governmental activities, which normally aresupported by taxes, intergovernmental revenues, and other nonexchange transactions, are reportedseparately from business-type activities, which rely to a significant extent on fees and charges to externalcustomers for support. The District is not financially accountable for any legally separate componentunits, and no component units have been included in the government-wide financial statements.

Bo Reporting Entity:

The Township of Bethlehem School District is a Type II district located in the County of Hunterdon,State of New Jersey. As a Type II district, the School District functions independently through a Board ofEducation. The board is comprised of seven members elected to three-year terms. The purpose of thedistrict is to educate students in grades K-8. High school students (grades 9-12) are enrolled in the NorthHunterdon- Vorhees Regional High School District. The Township of Bethlehem School District had andaily enrollment of 451 students in grades K through 8 at the close of the 2013-2014 school year.

The primary criterion for including activities within the District's reporting entity, as set forth in Section2100 of the GASB Codification of Governmental Accounting and Financial Reporting Standards, iswhether:

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

Based on the aforementioned criteria, the District has no component units. Furthermore, the District is notincludable in any other reporting entity on the basis of such criteria.

Co Basis of Presentation - Government-Wide Financial Statements

While separate government-ide and fund financial statements are presented, they are interrelated. Thegovernmental activities column incorporates data from governmental funds and internal service funds,while business-type activities incorporate data from the government's enterprise funds. Separate financialstatements are provided for governmental funds, proprietary funds and fiduciary funds, even though thelatter are excluded from the government-wide financial statements. As a general rule, the effect ofinterfund activity has been eliminated from the government-wide financial statements.

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NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

D. Basis of Presentation - Fnnd Financial Statements

The fund financial statements provide information about the District's funds, including its fiduciaryfunds. Separate statements for each category - governmental, proprietary and fiduciary - are presented.The emphasis of fund financial statements is on major governmental and enterprise funds, with eachdisplayed in a separate column. Any remaining governmental and enterprise funds are aggregated andreported as nonmajor funds. Major individual governmental and enterprise funds are reported as separatecolumns in the fund financial statements.

The District reports the following major governmental funds:

General Fund - The General Fund is the general operating fund of the District. It is used to account forall financial resources except those required to be accounted for in another fund. Included are certainexpenditures for vehicles and movable instructional or noninstructional equipment which are classified inthe Capital Outlay sub fund.

As required by the New Jersey State Department of Education, the District includes budgeted CapitalOutlay in this fund. Generally accepted accounting principles as they pertain to governmental entitiesstate that General Fund resources may be used to directly finance capital outlays for long-livedimprovements as long as the resources in such cases are derived exclusively from unrestricted revenues.

Resources for budgeted capital outlay purposes are normally derived from State of New Jersey Aid,district taxes and appropriated fund balance. Expenditures are those that result in the acquisition of oradditions to fixed assets for land, existing buildings, improvements of grounds, construction of buildings,additions to or remodeling of buildings and the purchase of built-in equipment. These resources can betransferred from and to Current Expense by board resolution.

Special Revenue Fund - The Special Revenue Fund is used to account for the proceeds of specificrevenue from State and Federal Government, (other than major capital projects, Debt Service or theEnterprise Funds) and local appropriations that are legally restricted to expenditures for specifiedpurposes.

Capital Projects Fund - The Capital Projects Fund is used to account for all financial resources to beused for the acquisition or construction of major capital facilities (other than those financed byProprietary Funds). The financial resources are derived from temporary notes or serial bonds that arespecifically authorized by the voters as a separate question on the ballot either during the annual electionor at a special election. State Aid in the form of Economic Development Authority Grants under EFCF Aare also financial resources of this fund

Debt Service Fund - The Debt Service Fund is used to account for the accumulation of resources for, andthe payment of principal and interest on bonds issued to finance major property acquisition, constructionand improvement programs.

Permanent Fund - The Permanent Fund is used to report resources that are legally restricted to theextent that only earnings, and not principal, may be used for purposes that support the District's programs.

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D. Basis of Presentation - Fund Financial Statements (Cont'd.)

The District reports the following major enterprise funds:

Food Service Fund - The Food Service Fund is used to account fore the activities of the cafeteria operations of theDistrict.

The District also reports the following fiduciary fund types:

Agency Fund - The Agency Fund is used to account for assets held by the District in a trustee capacityor as an agent for individuals, private organizations, other governments and/or other funds. Agency fundsare custodial in nature and do not involve measurement of results of operations. Agency funds includepayroll and student activities funds.

Employee Benefit Trust (Flexible Spending) - Employee Benefit Trust should be used to reportresources that are required to be held in trust for members and beneficiaries of employee benefit plans.

Private Purpose Scholarship Trust - The Private Purpose Scholarship Trust should be used to report alltrust arrangements under which principal and/or income benefit individuals, private organizations or othergovernments.

During the course of its normal operations, the District will have activity between funds (interfundactivity) for various purposes. Any residual interfund balances at year end are reported as interfundaccounts receivable/payable. While these balances are reported in fund financial statements, certaineliminations are made in the preparation of the government-wide financial statements. Balances betweenfunds included within governmental activities (the governmental and internal service funds) areeliminated so that only the net amount is included as internal balances in the governmental activitiescolumn. Similarly, any interfund balances between business-type (enterprise) funds are eliminated so thatonly the net amount is included as internal balances in the business-type activities columns.

Further, interfund activity may occur during the year involving transfers of resources between funds. Infund financial statements, these amounts are reported at gross amounts as transfers in/out. In thepreparation of the government-wide financial statements, transfers between funds included asgovernmental activities are eliminated so that only net amounts of resources transferred ferom or to thegovernmental activities are reported. A similar treatment is afforded transfers of resources betweenenterprise funds for the preparation of business-type activity financial statements.

E. Measurement Focus and Basis of Accounting

The accounting and financial reporting treatment applied is determined by its measurement focus andbasis of accounting. Measurement focus indicates the type of resources being measured, such as currentfinancial resources or economic resources. The basis of accounting refers to the timing of transactions orevents for recognition in the financial statements.

The government-wide financial statements are reported using the economic resources measurement focusand the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded whena liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized asrevenues in the fiscal period that the taxes are levied by the municipality(s) within which the District isdomiciled. Ad Valorem (Property) Taxes are susceptible to accrual and under New Jersey State Statute amunicipality is required to remit to its school district the entire balance of taxes in the amount voted uponor certified, prior to the end of the school year. The District recognizes the entire approved tax levy as

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E. Measurement Focus and Basis of Accounting (Cont'd.)

revenue in the fiscal period for which they were levied. The District is entitled to receive moneys underan established payment schedule and any unpaid amount is considered to be an "accounts receivable".Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by theprovider have been met. State categorical aid revenues are recognized as District revenue during the fiscalperiod in which they are appropriated.

The governmental funds financial statements are reported using the current financial resourcesmeasurement focus and the modified accrual basis of accounting. Revenue is recognized when it becomesmeasurable and available. "Measurable" means the amount of the transaction can be determined and"available" means collectible within the current period or soon enough thereafter to be used to payliabilities of the current period. For this purpose, the District considers revenues to be available if theyare collected within 60 days of the end of the current fiscal period. Expenditures are generally recordedwhen a liability is incurred, as under accrual basis accounting. Exceptions to this general rule includedebt service, for which interest and principal expenditures in the Debt Service Fund are recognized ontheir due dates, and expenditures relating to compensated absences, claims and judgments, which arerecorded in the period when payment becomes due. General capital asset acquisitions are recorded asexpenditures in the governmental funds and are not capitalized. The issuance of long-term debt for capitalpurposes and capital lease obligations incurred to acquire general capital assets are reported as "otherfinancing sources".

The District records the entire approved tax levy as revenue (accrued) at the start of the fiscal year, sincethe revenue is both measurable and available. Entitlements are recorded as revenue when all eligibilityrequirements, including timing of funding appropriations, are met, subject to the 60-day availabilityrequirement for collection. Interest and tuition revenues are considered susceptible to accrual and havebeen recognized as revenues of the current fiscal period, subject to availability. Expenditure driven grantrevenues are recorded as qualifying expenditures are incurred and all other eligibility requirements havebeen met, subject to availability requirements. All other revenue items are considered measurable andavailable only when cash is received by the District.

The District's proprietary funds, employee benefit trust fund and private purpose scholarship trust fundsare reported using the economic resources measurement focus and the accrual basis of accounting. Theagency fund has no measurement focus but utilizes the accrual basis of accounting for reporting its assetsand liabilities.

F. Budgets/Budgetary Control:

Annual budgets are adopted for the general, special revenue and debt service funds using a regulatorybasis of accounting which differs from generally accepted accounting principles in one material respect;Budgetary revenues for certain nonexchange state aid transactions are recognized for budgetary purposesin the fiscal period prior to the period in which the state recognizes expenditures/expenses. The amountsof the adjustments needed to reconcile the budgetary basis to the GAAP based fund financial statementsis set forth in the explanation of differences schedules which follow.

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F. Budgets/Budgetary Control: (Cont'd.)

Annual appropriated budgets are prepared in the spring of each year for the general, special revenue, anddebt service funds. The budgets are submitted to the county office for approval. Pursuant to changes inthe Local District School Budget Law, statutorily conforming base budgets of Districts with annualschool elections held in November (The District has chosen this option) are no longer required to bepresented to the voters for approval on the third Tuesday in April. Budgets are prepared using themodified accrual basis of accounting, except for the special revenue fund as described later. The legallevel of budgetary control is established at line item accounts within each fund. Line item accounts aredefined as the lowest (most specific) level of detail as established pursuant to the minimum chart ofaccounts referenced in N.J.A.C. 6:20-2A.2(m)1. Transfers of appropriations may be made by SchoolBoard resolution at any time during the fiscal year. New Jersey statutes place limits on the Board's abilityto increase budgeted expenditures through the appropriation of previously undesignated fund balance andrequires the District to obtain additional approvals when budgetary transfers, measured using theadvertised budgetary account totals rather than line-item totals, exceed certain thresholds. The Board ofEducation did not make any supplemental budgetary appropriations during the fiscal year that requiredadditional approvals from oversight agencies.

Formal budgetary integration into the accounting system is employed as a management control deviceduring the year. For governmental funds there are no substantial differences between the budgetary basisof accounting and generally accepted accounting principles with the exception of the legally mandatedrevenue recognition of the last state aid payment for budgetary purposes only and special revenue fund asnoted below. Encumbrance accounting is also employed as an extension of formal budgetary integrationin the governmental fund types. Unencumbered appropriations lapse at fiscal year end.

Appropriations in the general and debt service funds lapse at the end of the fiscal year even if they haverelated encumbrances. Encumbrances are commitments related to unperformed (executory) contracts forgoods and services. Encumbrance accounting is utilized to the extent necessary to assure effectivebudgetary control and accountability and to facilitate effective cash planning and control. While allappropriations and encumbrances lapse at year-end, valid outstanding encumbrances, for which thecontracted performance is expected during the subsequent budget cycle, are legally restricted at year-endand are automatically re-appropriated and become part of the subsequent years' budget pursuant to stateregulations.

The accounting records of the special revenue fund are maintained on the grant accounting budgetarybasis. The grant accounting budgetary basis differs from GAAP in that the grant accounting budgetarybasis recognizes encumbrances as expenditures and also recognizes the related revenues, whereas theGAAP basis does not. Sufficient supplemental records are maintained to allow for the presentation ofGAAP basis financial statements.

The following presents a reconciliation of the general fund revenues and special revenue fund revenuesand expenditures from the budgetary basis of accounting as presented in the Budgetary ComparisonSchedules - General and Special Revenue Funds to the GAAP basis of accounting as presented in theStatement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds.

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F. Budgets/Budgetary Control (Cont'd):

Explanation of differences between Budgetary Inflows and Outflows and GAAP Revenues andExpenditures:

Sources/inflows of resourcesActual amounts (budgetary) "revenues" fromthe budgetary comparison schedules

General Fund Special Revenue Fund

$9,207,821.11 $219,168.74

Difference- budget to GAAP:Grant accounting budgetary basis differs from GAAP in thatencumbrances are recognized as expenditures and revenues (Net) 0.00 0.00

Certain State Aid payments are recognized as revenuefor budgetary purposes, and differs from GAAP which doesnot recognize this revenue until the subsequent year whenthe State recognizes the related expense (GASB 33). (169,884.00) 0.00

State Aid payment recognized for GAAP statementsin the current year, previously recognized forbudgetary purposes. 206,497.60 0.00

Total revenues as reported on the statement ofrevenues, expenditures and changes in fundbalance - governmental funds. $9,244.434.71 $219.168.74

Uses/Outflows of resourcesActual amounts (budgetary basis) "total outflows"From the budgetary comparison schedule

General Fund Special Revenue Fund

$8,975,036.32 $219,168.74

Difference- budget to GAAP:Encumbrances for supplies and equipment ordered but not yetare reported in the year the encumbrance is placed for budgetarypurposes, but in the year the goods are received for financialreporting purposes (Net) 0.00

Total expenditures as reported on the statement ofrevenues, expenditures, and changes in fundbalances - governmental funds. $8,975,036.32 $219,168.74

G. Cash, Cash Equivalents and Investments:

Cash and cash equivalents include petty cash, change funds, cash in banks and all highly liquidinvestments with a maturity of three months or less at the time of purchase and are stated at cost plusaccrued interest. U.S. Treasury and agency obligations and certificates of deposit with maturities of oneyear or less when purchased are stated at cost. All other investments are stated at fair value, which aregenerally based on quoted market prices.

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G. Cash, Cash Equivalents and Investments (Cont'd.):

New Jersey school districts are limited as to the types of investments and types of financial institutionsthey may invest in. New Jersey statute 18A:20-37 provides a list of permissible investments that may bepurchased by New Jersey school districts.

Additionally, the District has adopted a cash management plan that requires it to deposit public funds inpublic depositories protected from loss under the provisions of the Governmental Unit Deposit ProtectionAct ("GUDPA"). GUDPA was enacted in 1970 to protect Governmental Units from a loss of funds ondeposit with a failed banking institution in New Jersey.

N.J.S.A. 17:9-41 et. seq. establishes the requirements for the security of deposits of governmental units.The statute requires that no governmental unit shall deposit public funds in a public depository unlesssuch funds are secured in accordance with the Act. Public depositories include Savings and Loaninstitutions, banks (both state and national banks) and savings banks the deposits of which are federallyinsured. GUDPA was amended, effective July 1,2010, by P.L. 2009, c. 326. The amendments provide agreater level of security protection for covered deposits by increasing collateralization requirements andrevising the enforcement protocol to allow for timely response in the event that a member bank showssigns of stress.

Under the amended law, collateralization of GUDPA deposits up to 75% of New Jersey capital is basedon a sliding scale that requires the minimum of 5% collateral for Well Capitalized institutions to amaximum of 120% collateral for Critically Undercapitalized institutions. All uninsured GUDPA depositsin excess of 75% of New Jersey capital require 100% collateral. If a public depository fails, the collateralit has pledged, plus the collateral of all other public depositories, is available to pay the full amount oftheir deposits to the Governmental Units.

H. Tuition Receivable/Payable

Tuition charges for the fiscal years 2012-2013 and 2013-2014 were based on rates established by thereceiving district. These rates are subject to change when the actual costs have been determined.Adjustments were made to the preliminary rates originally established for the 2014-2015 school yearbased upon the certification of2012-2013 rates.

I. Inventories and Prepaid Expenses:

Inventories and prepaid expenses, which benefit future periods, other than those recorded in the enterprisefund are recorded as expenditures in the year of purchase.

Inventories in the Proprietary Funds are valued at cost, which approximates market, using thefirst-in-first-out (FIFO) method. The cost of such inventories is recorded as expenses when consumedrather than when purchased.

Payments made to vendors for services that will benefit periods beyond June 30, 2014 are recorded asprepaid items in both the government-wide and fund financial statements.

J. Short-Term Interfund Receivables/Payables:

Short-term interfund receivables/payabies represent amounts that are owed, other than charges for goodsor services rendered to/from a particular fund in the District and that are due within one year.

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K. Capital Assets:

Capital assets are capitalized at historical cost, or estimated historical cost for assets where actualhistorical cost is not available. Donated assets are recorded as capital assets at their estimated fair marketvalue at the date of donation. The District maintains a threshold level of $2,000.00 or more of initial,individual cost for capitalizing capital assets. The system for accumulation of fixed assets cost data doesnot provide the means for determining the percentage of assets valued at actual and those valued atestimated costs.

Capital assets are recorded in the District-wide financial statements, but are not reported in the Fundfinancial statements. Capital assets are depreciated using the straight-line method over their estimateduseful lives. Since surplus assets are sold for an immaterial amount when declared as no longer neededfor public school purpose by the District, no salvage value is taken into consideration for depreciationpurposes. Useful lives vary from 20 to 50 years for land improvements and buildings, and 5 to 15 yearsfor equipment.

Capital assets not being depreciated include land and may include construction in progress.

The District does not possess any material amounts of infrastructure capital assets, such as sidewalks andparking lots. Such items are considered to be part of the cost of buildings or other improvable property.

Depreciation of all exhaustive fixed assets used by proprietary funds is charged as an expense againsttheir operations. Accumulated depreciation is reported on proprietary fund statement of net position.Depreciation has been provided over the estimated useful lives using the straight-line method. Theestimated useful lives are as follows:

Food Service Fund:Equipment 15-20 Years

L. Compensated Absences:

Compensated absences are those absences for which employees will be paid, such as vacation, sick leave,and sabbatical leave. A liability for compensated absences that are attributable to services alreadyrendered, and that are not contingent on a specific event that is outside the control of the District and itsemployees, is accrued in the government-wide financial statements as the employees earn the rights to thebenefits. Compensated absences that related to future services, or that are contingent on a specific eventthat is outside the control of the District and its employees, are accounted for in the period in which suchservices are rendered or in which such events take place. The School District reports compensatedabsences in accordance with the provisions ofGASB No. 16, "Accounting for Compensated Absences".

In the governmental and similar trust funds, compensated absences that are expected to be liquidated withexpendable available financial resources are reported as a fund liability and expenditure in the fund thatwill pay for the compensated absence. The noncurrent portion for governmental funds is maintainedseparately and is a reconciling item between the fund and government-wide presentations.

Based upon existing personnel policies and collective bargaining agreements, employees are grantedvarying amounts of annual sick, personal and vacation leave. Sick leave may be accumulated for use insubsequent years and the right to a termination payment begins to vest with the employee after 10 years ofservice. Generally, terminal pay credit for unused sick leave is capped at 50% of the number of unused

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L. Compensated Absences Cont'd.):

days earned, and with a maximum termination payment of 85% of the average annual base pay for the lastthree years of service. Terminal pay is paid in three equal installments in July of the three yearsfollowing separation from service.

Changes in the value of compensated absences earned and unused is more fully detailed in Note 4.

M. Deferred OutflowslInflows of Resources:

In addition to assets, the statement of financial position may report a separate section for deferredoutflows of resources. This separate financial statement element represents a consumption of net positionthat applies to a .future period(s) and will not be recorded as an outflow of resources(expenditure/expense) until that time. The District did not enter into any transactions during the currentschool year that would require the recordation of a deferred outflow of resources, and no deferredoutflows were reported in the prior financial statements.

In addition to liabilities, the statement of financial position may report a separate section for deferredinflows of resources. This separate financial statement element represents a acquisition of net positionthat applies to a future period(s) and will not be recorded as an inflow of resources (revenue) until thattime. The District did not enter into any transactions during the current school year that would require therecordation of a deferred inflow of resources, and no deferred inflows were reported in the prior financialstatements.

N. Unearned Revenue/Advances from Grantors:

Unearned revenue represents cash advances received relating to services (expenditures/expenses) that willbe provided in a subsequent fiscal period. Similarly, for expenditure-driven grants, amounts advanced tothe District in excess of the amounts expended and earned are recorded as advances from grantors.

O. Net Position Flow Assumption (District-Wide and Proprietary Fund Financial Statements)

Periodically, the District may fund outlays for a particular purpose from both restricted resources, such asbond referendum proceeds and/or grant proceeds, and unrestricted resources. To determine the amountsof net position- restricted and unrestricted that should be reported in the government-wide and proprietaryfund financial statements, a flow assumption must be made to establish the order in which resources areconsidered to be applied. In the absence of specific grant compliance requirements to the contrary, theDistrict policy is to utilize all amounts of available restricted net position prior to applying unrestrictednet position to fund acquisition costs.

P. Fund Balance Flow Assumption (Governmental Fund Financial Statements)

Periodically, the District may fund outlays for a particular purpose from both restricted resources andunrestricted resources (the total of the committed, assigned and unassigned fund balance). To determinethe amounts to report as restricted, committed, assigned and unassigned fund balance in the governmentalfund financial statements, a flow assumption must be made to establish the order in which resources areconsidered to be applied. In the absence of specific grant compliance requirements to the contrary, theDistrict policy is to utilize all amounts of available restricted fund balance prior to applying anycomponent of unrestricted fund balance. Further, when the components of unrtestricted fund balance canbe used for the same purpose, committed fund balance is depleted first, followed by assigned fundbalance, with unassigned fund balance applied last.

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Q. Fund Balance Policies:

Fund balance of the governmental funds is reported in various categories based upon the nature of anylimitations requiring the use of resources for specific purposes. The District itself can establish limitationson the use of resources through actions to transfer amounts to legally restricted reserve accounts (capital,maintenance and emergency reserves), or actions to commit or assign fund balance.

The committed fund balance includes amounts that can only be used for the specific purposes determinedby a formal action of the Board of Education. Commitments of fund balance remain in place until thecommitted fund balance is fully depleted or an amendatory action is taken by the Board of Education.

Assignments of fund balance are made by the Board of Education for specific purposes that do not thecriteria to be classified as committed. The Board of education also assigns fund balance when itappropriates unrestricted/unassigned fund balance to bridge a gap between estimated revenue andappropriations in the subsequent year budget. Unlike commitments, assignments are generally temporaryin nature, and additional actions of the Board are generally not required to remove an assignment,whereas an action of the Board is essential to the modification or elimination of an unexpendedcommitted fund balance.

R. District-Wide Financial Statement Classifications

1. Program Revenues - Amounts reported as program revenues include a) charges to customers orapplicants who purchase, use or benefit from goods services or privileges provided by a givenfunction or segment and b) grants and contributions that are restricted to meeting theoperational or capital requirements of a particular function or segment.

2. General Revenues - all taxes, including those designated for specific purposes such as debtservice, are reported as general revenues. All other resources, including internally dedicatedresources, unrestricted entitlements, and investment income are reported as general revenues.

3. Capital Assets - In the statement of net position, capital assets are reported, net of accumulateddepreciation as assets of the governmental activities and business-type activities.

4. Long-term Debt - In the statement of net position, long-term debt is reported as a component oflong-term liabilities of the governmental activities and business-type activities.

5. Net Investment in Fixed Assets - In the statement of Net Position, the net undepreciated valueof capital assets, less the value of outstanding debt issued to purchase acquire or build thosecapital assets, is reported as Net Investment in Fixed assets as a component of net position forthe governmental activities and business-type activities.

S. Proprietary Fund Operating and Nonoperating Revenues and Expenses

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operatingrevenues and expenses generally result from providing services and products in connection with theprimary purpose or function for which the fund was established. The District's Food Service proprietaryfund reports operating revenues from the sales of lunches and a la carte items, and operating expensesinclude the costs of sales (food, supplies and labor), administrative costs and depreciation on capitalassets. Revenues earned through the District's participation in the National School Lunch Program areclassified as nonoperating revenues, notwithstanding the limitations on the pricing of Type A studentlunches that is required for program participation.

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T. Reconciliation of District-Wide and Fund Financial Statements

1. Differences between governmental fund balance sheet and District-wide statement of net position:

Total Governmental Fund Balance (B-1) $1,635,701

Adjustments to District-Wide Net Position:Capital Assets (see Note 3)Long-Term Liabilities (see Note 4)Other Items not recognized in Fund Financial Statements:Accrued Interest on Long-term Debt

4,161,042(5,011,347)

Net Position of Governmental Activities

(100,650)

$684,746

II. Differences between governmental fund statement of revenues, expenditures and changes in fundbalances and District-wide statement of activities:

Total Net Change Governmental Fund Balance (B-2) $269,399

Adjustments to District-Wide Net Position:Depreciation on Capital Assets (see Note 3)Capitalized Equipment AcquisitionsRepayment of Long-Term Bonds (see Note 4)Net Increase in Accrued Liability forCompensated Absences (see Note 4)

Other Adjustments to Fund Financial Statements:Interest on Long-term Debt (Accrual Basis for District-Wide)

(193,241)59,680190,000

NEED

(4,389)

Net Position of Governmental Activities $321.449

U. Estimates:

The preparation of the financial statements in conformity with generally accepted accounting principlesrequires management to make estimates and assumptions that affect the amounts reported in the financialstatements and accompanying notes. Actual results may differ from those estimates.

NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS

The Township of Bethlehem Board of Education had the following depository accounts. All deposits arecarried at cost plus accrued interest. The government does not have a deposit policy.

Depository Account Bank Balance

Insured - FDICInsured - NJGUDPA (N.J.S.A.17:94.1)

$250,000.001,927,938.50

$2.177,938.50Total Deposits

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NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS (Cont'd.)

Custodial Credit Risk - Deposits- Custodial credit risk is the risk that in the event of a bank failure, theboard's deposits may not be returned to it. The government does not have a deposit policy for custodialcredit risk. As of June 30, 2014, $0.00 of the Board's bank balance of$2,177,938.50 was exposed tocustodial risk. (See Note 1-G. relating to statutory mitigation of custodial risk in the event of a bankfailure).

New Jersey Cash Management Fund - All investments in the Fund are governed by the regulations ofthe Investment Council, which prescribe specific standards designed to insure the quality of investmentsand to minimize the risks related to investments. In all the years of the Division of Investment'sexistence, the Division has never suffered a default of principal or interest on any short-term security heldby it due to the bankruptcy of a securities issuer; nevertheless, the possibility always exists, and for thisreason a reserve is being accumulated as additional protection for the "Other-than-State" participants. Inaddition to the Council regulations, the Division sets further standards for specific investments andmonitors the credit of all eligible securities issuers on a regular basis.

As of June 30, 2014, the District had $-0- on deposit with the New Jersey Cash Management Fund.

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NOTES TO FINANCIAL STATEMENTSNOTE 3. CAPITAL ASSETS

BETHLEHEM TOWNSHIP SCHOOL DISTRICTCAPITAL ASSETS NOTE DISCLOSURE

DISCLOSURE OF INFORMATION ABOUT CAPITAL ASSETS

The governmental fund balance sheet includes a reconciliation between fund balance- total governmental funds and netposition-governmental activities as reported in the District-wide statement of net position. One item of that reconciliationexplains that capital assets used in governmental activities are not fmancial resources and therefore are not reported in thefunds. An addition to the fund balance - total governmental funds is made to reflect the carrying value of the District's capitalassets at year-end in the District-wide fmancial statements, which consisted of:

Total capital assets at cost 8,397,929.21Less: accumulated depreciation (4,236,887.06)

Government Activities Capital Assets, Net 4:161:042.15

Capital assets by classifiaction and activity for the year ended June 30, 2014 was as follows:

Beginning EndingBalance Additions Deletions Balance

Governmental Activities:

Capital Assets That Are Not Being Depreciated:Land $ 139:200.00 $ $ $ 139:200.00Total Capital Assets Not Being Depreciated 139:200.00 1392200.00

Building and Building Improvements 7,475,659.97 7,475,659.97Improvements other than Buildings 94,828.86 94,828.86Machinery, Equipment, Furniture & Vehicles 6282560.37 592680.01 6882240.38Totals at Historical Cost 82199 :049.20 592680.01 822582729.21

Less Accumulated Depreciation For:Building and Building Improvements (3,598,243.07) (144,005.52) (3,742,248.59)Improvements other than Buildings (80,346.38) (1,517.88) (81,864.26)Equipment, Furniture, and Vehicles (365z056.32} (47z717.89} (4122774.21}Total Accumulated Depreciation (4:043z645.77} (193z241.29} (4:2362887.06}Total Capital Assets Being Depreciated(Net of Accumulated Depreciation) 4z155A03.43 (133z561.28} 42021z842.15

Government Activities Capital Assets, Net $ 4:2942603.43 $ {133,561.28} $ $ 4:161:042.15

Business-type ActivitiesEquipment 199,323.00 8,980.38 208,303.38

Less Accumulated Depreciation for:Equipment (162:609.00} (82948.08} (17U57.08}

Business-type Activities Capital Assets, Net $ 362714.00 $ 32.30 $ $ 36:746.30

* Depreciation expense was charged to governmental functions as follows:

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NOTES TO FINANCIAL STATEMENTSNOTE 4: LONG-TERM LIABILITIES

BETHLEHEM TOWNSHIP SCHOOL DISTRICTLONG TERM DEBT DISCLOSURE

DISCLOSURE OF INFORMATION ABOUT LONG TERM LIABILITIES

The governmental fund balance sheet includes a reconciliation between fund balance- total governmental funds and netposition-governmental activities as reported in the District-wide statement of net position. One item of that reconciliationexplains that Long-term liabilities, including bonds and judgments payable, are not due and payable in the current periodand therefore are not reported liabilties in the governmental funds. A deduction to the fund balance - total governmentalfunds is made to reflect the carrying value of the District's long-term liabilities at year-end in the governmental activitiesof the District-wide fmancial statements.

Long-term debt liability activity for the year ended June 30, 2014 was as follows:

AmountsBeginning Ending Due WithinBalance Additions Reductions Balance One Year

Governmental Activities:

Bonds Payable:General Obligation Debt $ 520352000.00 $ $ 1902000.00 $ 428452000.00 $ 2002000.00

Total Bonds Payable 520352000.00 1902000.00 42845:000.00 200:000.00

Other Liabilities:Compensated Absences 201z604.76 35z258.02 166z346.74 57z065.34

Total Other Liabilities 201z604.76 35z258.02 166z346.74 57z065.34

Total Liabilities $ 5z236z604.76 $ $ 225z258.02 $ 5z011z346.74 $ 257:065.34

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NOTE 4. GENERAL LONG-TERM DEBT (CONT'D):

A. Bonds Payable -- Bonds are authorized in accordance with State law by the voters of the Districtthrough referendums. All bonds are retired in serial installments within the statutory period of usefulness.Bonds issued by the District are general obligation bonds.

Principal and interest due on bonds outstanding as at June 30, 2014 is as follows:

Year endingJune 30, Principal Interest Total

2015 200,000.00 198,425.00 398,425.002016 210,000.00 190,225.00 400,225.002017 220,000.00 181,625.00 401,625.002018 225,000.00 172,725.00 397,725.002019 235,000.00 163.525.00 398,525.002020 245,000.00 153,925.00 398,925.002021 255,000.00 143,925.00 398,925.002022 265,000.00 133,525.00 398,525.002023 280,000.00 122,625.00 402,625.002024 290,000.00 110,862.50 400,862.502025 300,000.00 98,325.00 398,325.002026 315,000.00 85,256.25 400,256.252027 325,000.00 71,656.25 396,656.252028 345,000.00 57,203.13 402,203.132029 365,000.00 41,671.88 406.671.882030 375,000.00 25,484.38 400,484.382031 395,000.00 8,640.63 403,640.63

$ 4,845,000.00 $1,959,625.00 $ 6,804,625.00

B. Bonds Authorized But Not Issued -- As of June 30, 2014, the District had no authorized but notissued bonds.

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NOTE 5. PENSION PLANS

Description of Plans - All required employees of the District are covered by either the Public Employees'Retirement System, the Teachers' Pension and Annuity Fund or the Defined Contribution RetirementProgram which have been established by state statute and are administered by the New Jersey Division ofPension and Benefits (Division). According to the State of New Jersey Administrative Code, allobligations of the Systems will be assumed by the State of New Jersey should the Systems terminate. TheDivision issues a publicly available financial report that includes the financial statements and requiredsupplementary information for the Public Employees Retirement System and the Teachers' Pension andAnnuity Fund. These reports may be accessed via the Division of Pensions and Benefits website, atwww.state.nj.us/treasury/pensions. or may be obtained by writing to the Division of Pensions andBenefits, PO Box 295, Trenton, New Jersey, 08625.

Teachers' Pension and Annuity Fund (TPAF) - The Teachers' Pension and Annuity Fund wasestablished as of January 1, 1955, under the provisions ofN.J.S.A. 18A:66 to provide retirement benefits,death, disability and medical benefits to certain qualified members. The Teachers' Pension and AnnuityFund is considered a cost-sharing multiple-employer plan with a special funding situation, as undercurrent statute, all employer contributions are made by the State of New Jersey on behalf of the Districtand the system's other related non-contributing employers. Membership is mandatory for substantially allteachers or members of the professional staff certified by the State Board of Examiners, and employees ofthe Department of Education who have titles that are unclassified, professional and certified.

Public Employees' Retirement System (PERS) - The Public Employees' Retirement System (PERS) wasestablished as of January 1, 1955 under the provisions ofN.J.S.A. 43:15A to provide retirement, death,disability and medical benefits to certain qualified members. The Public Employees' Retirement Systemis a cost-sharing multiple-employer plan. Membership is mandatory for substantially all full-timeemployees of the State of New Jersey or any county, municipality, school district, or public agency,provided the employee is not required to be a member of another state-administered retirement system orother state or local jurisdiction.

Defined Contribution Retirement System (DCRP) - The DCRP was established effective July 1,2007 toprovide coverage to certain elected and appointed officials who became excluded from the PERS systempursuant to the provisions of P.L. 2007, c. 92. In addition, certain members of the PERS and TPAF,enrolled after July 1,2007 who earn salary in excess of those systems' maximum compensation limits areeligible for DCRP membership for the compensation not credited to PERS or TPAF participation.

Vesting and Benefit Provisions - The vesting and benefit provisions for PERS are set by N.J.S.A.43:15A and 43.3B, and N.J.S.A. 18A:6C for TPAF. All benefits for PERS and TPAF systems vest aftereight to ten years of service, except for medical benefits that vest after 25 years of service. Retirementbenefits for age and service are available at age 60 and are generally determined to be 1/60 of the finalaverage salary for each year of service credit, as defined. Final average salary equals the average salaryfor the final three years of service prior to retirement (or highest three years' compensation if other thanthe final three years). Members may seek early retirement after achieving 25 years of service credit orthey may elect deferred retirement after achieving eight to ten years of service in which case benefitswould begin the first day of the month after the member attains normal retirement age. The TPAF andPERS provides for specified medical benefits for members who retire after achieving 25 years ofqualified service, as defined, or under the disability provisions of the System.

Members are always fully vested for their own contributions and, after three years of service credit,become vested for 2% of related interest earned on the contributions. In the case of death beforeretirement, members' beneficiaries are entitled to full interest credited to the members' accounts.

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http://www.state.nj.us/treasury/pensions.


NOTE 5. PENSION PLANS (CONT'D):

Vesting in the DCRP occurs after one year of membership. Employer contributions to the DCRP are set at3% of base salary.

Contribution Requirements - The contribution policy is set by N.J.S.A. 43:15A, Chapter 62, P.L. of1994, Chapter 115, P.L. of 1997 and N.J.S.A. 18:66, and requires contributions by active members andcontributing employers. Plan member and employer contributions may be amended by State of NewJersey legislation. Under the provisions of Chapter 78, PL 2011, TPAF and PERS employeecontributions were increased from 5.5% to 6.5% of employees' annual compensation, as defined,effective June 28, 2011. An additional increase which will bring employee contributions to 7.5% is beingphased in over the seven-year period subsequent to the effective date of Chapter 78. Employers arerequired to contribute at an actuarially determined rate in both TPAF and PERS. The actuariallydetermined contribution includes funding for cost-of-living adjustments, noncontributory death benefits,and post-retirement medical premiums. Under current statute the District is a non-contributing employerof the TPAF.

Three- Year Trend Information for PERSAnnual Percentage Net

Year Pension ofAPC PensionFunding Cost (APC) Contributed Obligation

6/30/14 $ 77,027 100 % $ 06/30/13 77,937 100 % 06/30112 89,758 100 % 0

Three-Year Trend Information for TPAF (Paid on-behalf of the District, excluding post-retirementmedical benefits which are reported in Note 6)

Annual PercentagePension of APC

Cost (APC) Contributed

NetYear

FundingPension

Obligation

6/301136/301136/30112

$ 160,933.00261,389.00137,620.00

Unknown %Unknown %Unknown %

$ ooo

The amounts reported above for this year include payments for the costs of non-contributory group lifeinsurance premiums, as follows: For 2011-2012, $13,337; for 2012-13, $13,065; and for the currentperiod, $13,053 of the on-behalf payment represents NCGI premiums. In accordance with N.J.S.A.18A:66-66 the State of New Jersey reimbursed the District $280,212.28 during the year ended June 30,2014 for the employer's share of social security contributions for TPAF members, as calculated on theirbase salaries. This amount has been included in the general-purpose financial statements, and thecombining and individual fund and account group statements and schedules as a revenue and expenditurein accordance with GASB 24.

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NOTE 6. POST -RETIREMENT BENEFITS

The State of New Jersey sponsors and administers the post-employment health benefits program forschool districts. Free coverage is provided to members of the TPAF who retire after accumulating 25years of credited service or on a disability retirement. The State is also responsible for the costsattributable to Chapter 126, P.L. 1992, which provides free health benefits to members ofPERS and theAlternate Benefit Program who retired from a board of education or county college with 25 years ofservice or on a disability retirement if the member's employer does not provide this coverage.

The Division of Pensions issues a publicly available financial report that includes the financial statementsand required supplementary information for the Health Benefits Program Fund - Local Government.This report may be accessed via the Division of Pensions and Benefits website, atwww.state.nj.us/treasury/pensions. or may be obtained by writing to the Division of Pensions andBenefits, PO Box 295, Trenton, New Jersey, 08625.

At June 30, 2013, there were approximately 100,134 retirees receiving State paid post retirement healthbenefits. The cost of these benefits is funded through contributions by the state in accordance with P.L.1994, c.62. Funding of post retirement medical benefits was changed from a pre-funding basis to a pay-as-you-go basis in Fiscal Year 1994. During the fiscal year ended June 30, 2013, the State contributed$1.07 billion to fund these costs.

The State is also responsible for the costs attributable to Chapter 126, P.L. 1992, which provides freehealth benefits to members of PERS and the Alternate Benefit Program who retired form a board ofeducation or county college with 25 years of service. The State paid $173.8 million toward Chapter 126benefits for 17,356 eligible retired members in Fiscal Year 2013.

The State's contributions to the Health Benefits Program Fund on-behalf of the District for TPAF retireehealth benefits, for the last three years, is as follows:

Three-Year Trend Information for TPAF Post-Employment Benefits(Paid on-behalf of theDistrict)

Annual PostRetirement Percentage Net

Year Medical ofAPC PensionFunding Cost (APC) Contributed Obligation

6/30/13 $ 263,869 100 % $ 06/30/13 327,515 100 % $ 06/30/12 276,653 100 % 0

NOTE 7. RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors and omissions; injuries to employees; and natural disasters.

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http://www.state.nj.us/treasury/pensions.


NOTE 7. RISK MANAGEMENT (CONT'D.)

Property and Liability Insurance - The District, along with other school districts, is a member of theNew Jersey School Boards Association Insurance Group (NJSBAIG, or the "Fund"), a governmental jointinsurance fund. NJSBAIG has adopted a formal risk management plan that involves a combination ofDistrict risk retention (through the use of per claim and aggregate per line deductibles), Fund retention ofrisk and the procurement of excess insurance and reinsurance through commercial reinsurers and theSchool Excess Liability Fund. A complete listing of the coverages provided by the Fund can be found inthe statistical section of the Comprehensive Annual Financial Report. Surety bond coverage for theSchool Business Administrator is provided through the Fund. Audited financial information for the Fundrelating to the level of claims reserves, estimated amounts of claims incurred but not reported and netassets were not available for inclusion in this report.

New Jersey Unemployment Compensation Insurance - The District has elected to fund its New JerseyUnemployment Compensation Insurance under the "Contributory Method". Under this plan, the Districtis required to remit the entire employee withholding to the Commissioner of Labor together with anexperience-based assessment on employee wages subject to withholding. During the 2013-14 schoolyear, the District recorded expenditures of $20,575.40 for its assessment from the Department of Labor.

NOTE 8. INTERFUND RECEIVABLES AND PAYABLES

The following interfund balances remained on the balance sheet at June 30, 2014:

Interfund InterfundFund Receivable Payable

General Fund $ 150.06 $Fiduciary Funds 150.06

Total $ 150.06 $ 150.06

NOTE 9: FUND BALANCE APPROPRIATED

General Fund - Of the $1,805,582.25 General Fund balance at June 30, 2014 (Budgetary Basis), Legallyrestricted balances include $30,001.00 of Capital Reserves; $376,889.61 of Maintenance Reserves; and$658,976.22 of excess surplus (Note 10), of which $350,035.00 has been designated for 2014-2015expenditures and $308,941.22 which is legally restricted for use in the 2015-16 budget cycle. Of theunrestricted fund balance, $469,774.42 is committed to the liquidation of open purchase orders from the2013-2014 fiscal year, and $269,941.00 is unassigned. Open purchase orders at June 30, 2014 includeawards for maintenance projects authorized in 2013-14 for completion over the summer of2014.

The total General Fund balance must be reduced by $206,497.60 of state aid that was realized as revenueon the budgetary basis but is not permitted to arrive at the amounts reported as components of fundbalance in the governmental fund financial statements.

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NOTE 10: CALCULATION OF EXCESS SURPLUS

In accordance with NJ.S.A. 18A:7F-7, as amended by P.L. 2004, c.73 (SI701), the designation forRestricted Fund Balance - Excess Surplus is a required calculation pursuant to the New JerseyComprehensive Educational Improvement and Financing Act of 1996 (CEIFA). New Jersey schooldistricts are required to restrict General Fund balance a the fiscal year end of June 30 if they did notappropriate a required minimum amount as budgeted fund balance in their subsequent year's budget.Based upon the statutory calculation, there was excess fund balance of $350,035.00 at June 30, 2014 thatwas appropriated as part of the 2014-15 school budget. There was $308,941.22 of excess fund balance atJune 30, 201 that will be required to be appropriated as part of the 2015-16 school budget.

NOTE 11. CAPITAL RESERVE ACCOUNT

A capital reserve account was established by the School District of Township of Bethlehem Board ofEducation by inclusion of $1.00 during fiscal year 2003 for the accumulation of funds for use as capitaloutlay expenditures in subsequent fiscal years. The capital reserve account is maintained in the generalfund and its activity is included in the general fund annual budget.

Funds placed in the capital reserve account are restricted to capital projects in the district's approvedLong Range Facilities Plan (LRFP) and updated annually in the Quality Assurance Annual Report(QAAR), including the payment of debt service on such projects. Upon submission of the LRFP to thedepartment, a district may deposit funds into the capital reserve at any time upon board resolution throughthe transfer of undesignated, unreserved general fund balance or of excess undesignated, unreservedgeneral fund balance that is anticipated in the budget certified for taxes. Pursuant to N.J.A.C. 6:23A-5.1(d) 7, the balance in the account cannot at any time exceed the local support costs of uncompleted projectsin its approved LRFP. During the 2012-13 School Year, there were no transfers to the capital reserve andno balances were appropriated in either the 2013-2014 or 2014-2015 school budgets. The capital reservebalance at June 30, 2013 and 2014 was $30,001.00.

NOTE 12. OTHER RESERVE ACCOUNTS

Pursuant to enabling legislation and rulemaking, the District established a legally restricted Reserve Fundfor Maintenance and Emergencies during the month of June, 2009. During the 2013-2014 school year, theMaintenance Reserve had the following activity:

Balance - June 30, 2013Withdrawn with Board Approval

Balance - June 30, 2014

$563,889.61(187,000.00)

$376,889.61

NOTE 13. DEFICIT FUND BALANCES

The District did not report a deficit fund balance at June 30, 2013 or 2014 in its General Fund in the fundstatements (modified accrual basis). P.L. 2003 c.97 provides that in the event a state school aid paymentis not made until the following school budget year, districts must record the last state aid payment asrevenue, for budget purposes only, in the current school budget year. The bill provides legal authority forschool districts to recognize this revenue in the current budget year. For intergovernmental transactions,GASB Statement No. 33 requires that recognition (revenue, expenditure, asset, liability) should be insymmetry, ie., if one government recognizes and asset, the other government recognizes a liability. Sincethe District is not recording the last two state aid payments, including Extraordinary Aid, on the GAAPfinancial statements until the year the State records the payable, it is possible that a positive fund balancecould be reported on a mandated budgetary basis while a deficit is reported on a GAAP basis based uponnonrecognition of revenue on the GAAP basis for the final state aid payment.

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NOTE 13. DEFICIT FUND BALANCES (Cont'd.)

Pursuant to NJ.S.A. 18A:22-44.2 any negative unreserved, undesignated general fund balance that isreported as a direct result from a delay in the payment of state aid until the following fiscal year, is notconsidered in violation of New Jersey statute and regulation nor in need of corrective action.

NOTE 14. PENDING LITIGATION AND CONTINGENT LIABILITIES

At June 30, 2014, there was no litigation pending for which an unfavorable outcome with a materialadverse impact on the net position of the District was anticipated.

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REQUIRED SUPPLEMENTARYINFORMATION

PART II

- 59-

BUDGETARY COMPARISON SCHEDULES

SECTION -C

- 60-

State Sources:School Choice AidTransportation AidSpecial Ed. Aid

g: Security Aid, Equalization Aid

Adjustment AidExtraordinary AidOn-behalfTPAF Post-RetirementMedical Contrib. (non-budgeted)

On-behalfTPAF PensionPayments (non-budgeted)

On-behalfTPAF Employer FICAContrib. (non-budgeted)

Exhibit - C-1BETHLEHEM TOWNSHIP SCHOOL DISTRICT Page 1 of9

BUDGETARY COMPARISON SCHEDULEGENERAL FUND


Original Budget Final VarianceBudget Transfers Budget Actual Final to Actual

6,934,529.00 6,934,529.00 6,934,529.007,510.00 7,510.00 8,100.00 590.00

2,331.37 2,331.379,990.00 9,990.00 15,599.46 5,609.46

6,952,029.00 6,952,029.00 6,960,559.83 8,530.83

45,356.00 45,356.00 45,356.0081,797.00 81,797.00 81,797.00

301,829.00 301,829.00 301,829.0037,641.00 37,641.00 37,641.00

984,263.00 984,263.00 984,263.0071,420.00 71,420.00 71,420.00

19,941.00 19,941.00

263,869.00 263,869.00

160,933.00 160,933.00

280,212.28 280,212.28

1,522,306.00 1,522,306.00 2,247,261.28 724,955.28

8,474,335.00 8,474,335.00 9,207,821.11 733,486.11

REVENUES:Local Sources:Local Tax LevyOther Restricted Miscellaneous RevenueRefunds-Prior Yr. Exp.Unrestricted Miscellaneous Revenue

Total - Local Sources

Total - State Sources

Total Revenues

BETHLEHEM TOWNSHIP SCHOOL DISTRICT Exhibit - C-lBUDGETARY COMPARISON SCHEDULE Page 2 of9

GENERAL FUNDFOR THE YEAR ENDED JUNE 30, 2014


EXPENDITURES:Current Expense:Regular Programs - Instruction:Salaries of Teachers:Kindergarten 183,240.00 (22,261.00) 160,979.00 160,977.18 1.82Grades 1- 5 1,127,245.00 (88,226.98) 1,039,018.02 1,038,755.14 262.88Grades 6- 8 916,280.00 (55,700.88) 860,579.12 860,578.65 0.47

Regular Programs - Home Instruction:Salaries of Teachers 1,700.00 198.00 1,898.00 1,897.50 0.50Other Salaries for Instruction 11,710.00 (11,710.00)

Regular Programs- Undistributed Instruction:Purchased Technical Services 24,000.00 24,000.00 17,825.04 6,174.96Other Purchased Services 21,540.00 2,000.00 23,540.00 23,540.00General Supplies 192,578.00 (68,077.30) 124,500.70 110,359.73 14,140.97

0\ Textbooks 11,000.00 34,137.98 45,137.98 45,137.78 0.20N

Other Objects 2,000.00 2,000.00 1,732.90 267.10

Total Regular Programs 2,491,293.00 (209,640.18) 2,281,652.82 2,260,803.92 20,848.90

Special Education:Resource RoomlResource Center:Salaries of Teachers 732,715.00 9,435.00 742,150.00 740,887.44 1,262.56Other Salaries for Instruction 127,815.00 7,430.00 135,245.00 135,236.40 8.60General Supplies 9,900.00 9,900.00 9,583.10 316.90

Total Resource RoomlResource Center 870,430.00 16,865.00 887,295.00 885,706.94 1,588.06




EXPENDITURES (CONT'D):Current Expense (Cont'd):Instruction-Special Education (Cont'd):Preschool, Disabilities - Part-Time:Salaries of Teachers 27,360.00 27,360.00 26,394.90 965.10Other Salaries for Instruction 20,365.00 (1,184.00) 19,181.00 19,164.28 16.72Supplies 1,000.00 1,000.00 964.48 35.52

Total Preschool Disabilities - Part-time 48,725.00 (1,184.002 47,541.00 46,523.66 1,017.34

Total Special Education-Instruction 919,155.00 15,681.00 934,836.00 932,230.60 2,605.40

Basic SkillslRemedial InstructionSalaries of Teachers 161,605.00 (10,736.69) 150,868.31 150,866.50 1.81

0\ Supplies 1,500.00 {1,148.00} 352.00 350.47 1.53CJ.)

Total Basic SkillslRemedial Instruction 163,105.00 (11,884.69} 151,220.31 151,216.97 3.34

Total Special Education 1,082,260.00 3,796.31 1,086,056.31 1,083,447.57 2,608.74

School SponsoredCo-Curricular Acitivites:Salaries 36,140.00 13,826.03 49,966.03 48,654.03 1,312.00Other Purchased Services 10,000.00 (8,000.00) 2,000.00 1,994.92 5.08Supplies 16,800.00 (13,857.00) 2,943.00 2,906.21 36.79Other Objects 850.00 850.00 601.64 248.36

Total Co-Curricular Acitivites: 63,790.00 {8,030.972 55,759.03 54,156.80 1,602.23

School SponsoredAthletic Acitivites:Salaries 25,000.00 (2,028.00) 22,972.00 22,972.00Other Purchased Services 7,500.00 (3,284.00) 4,216.00 4,215.00 1.00Supplies 2,500.00 (1,000.00) 1,500.00 1,138.92 361.08Other Objects 1,000.00 1,000.00 302.55 697.45

Total Athletic Activities 35,000.00 {5,312.00} 29,688.00 28,628.47 1,059.53

Total Instruction 3,672,343.00 {219,186.84} 3,453,156.16 3,427,036.76 26,119.40

BETHLEHEM TOWNSHIP SCHOOL DISTRICT Exhibit -C-lBUDGETARY COMPARISON SCHEDULE Page 4 of9


Original Budget Final VarianceEXPENDITURES (CONT'D.): Budget Transfers Budget Actual Final to ActualCurrent Expense (Cont'd.):Undistributed Expenditures:Instruction:Tuition to Other LEAs Within the State- Speical 162,200.00 25,514.05 187,714.05 87,713.20 100,000.85Tuition to Private Schools for theDisabled- Within State 1502000.00 {242576.05} 1252423.95 682289.27 572134.68

Total Undistrib. Expend. - Instruction: 3122200.00 938.00 3132138.00 1562002.47 1572135.53

Health Services:Salaries 127,870.00 4,682.00 132,552.00 132,046.01 505.99Purchased Profess. and Tech. Servo 4,410.00 1,353.00 5,763.00 5,388.00 375.00Supplies and Materials 2,500.00 346.00 2,846.00 2,835.27 10.73Other Objects 270.00 270.00 100.00 170.00

0\;l:::> Total Health Services: 135,050.00 6,381.00 141,431.00 1402369.28 12061.72

Speech, OT, PT & Related Services:Salaries 102,115.00 (67.00) 102,048.00 102,042.30 5.70Supplies and Materials 12150.00 12150.00 12146.10 3.90

Total Speech, OT, PT & Related Services: 103,265.00 {67.00} 1032198.00 103,188.40 9.60

Other Support Services-Student Extra:Salaries 22,420.00 (220.00) 22,200.00 22,199.40 0.60Purchased ProfessionallEducational Services 57,580.00 (15,827.00) 41,753.00 26,657.00 15,096.00Supplies and Materials 300.00 300.00 300.00

Total Other Support Services- Student Extra: 802300.00 {l62047.00} 642253.00 482856.40 152396.60

Other Support Services-Guidance:Salaries of Other Professional Staff 116,140.00 2,551.00 118,691.00 118,690.20 0.80Purchased ProfessionallEducational Services 1,500.00 1,001.00 2,501.00 2,497.00 4.00Supplies and Materials 3,400.00 109.00 3,509.00 2,977.85 531.15Other Objects 400.00 400.00 218.51 181.49

Total Guidance: 121z440.00 3,661.00 1252101.00 124z383.56 717.44

BETHLEHEM TOWNSHIP SCHOOL DISTRICT Exhibit - C-lBUDGETARYCOMPAruSONSCHEDULE Page 5 of9



EXPENDITURES (CONT'D.):Current Expense (Cont'd.):Undistributed Expenditures (Cont'd.):Other Support Services-Child Study Teams:Salaries of Other Professional Staff 87,550.00 1.00 87,551.00 87,550.08 0.92Salaries of Secret. & Clerical Assts. 46,270.00 (1.00) 46,269.00 46,268.88 0.12Other Salaries 112,450.00 4,215.67 116,665.67 115,969.67 696.00Purchased ProfessionallEducational Services 64,570.00 6,015.10 70,585.10 70,494.55 90.55Other Purchased Prof.lTech. Services 5,915.00 325.00 6,240.00 6,240.00Supplies and Materials 2,490.00 1,249.90 3,739.90 3,486.36 253.54Other Objects 1,000.00 533.00 12533.00 1,489.02 43.98

Total Child Study Teams: 3202245.00 122338.67 332z583.67 3312498.56 lz085.11

0"-Improvement of Instructional Services:

(}l Salaries of Supervisor of Instruction 66,685.00 6,861.00 73,546.00 73,378.90 167.10Salaries of Other Professional Staff 8,400.00 8,400.00 8,400.00Other Purchased Services 2,688.00 2,688.00 2,687.82 0.18Supplies and Materials 89.00 89.00 88.90 0.10

Total Improvement of Instructional Services: 66,685.00 182038.00 842723.00 842555.62 167.38

Educational Media Services/School Library:Salaries 107,935.00 4,892.42 112,827.42 112,823.42 4.00Salaries of Tech Coordinators 49,085.00 49,085.00 49,085.00Purchased Professional and Technical Services 34,800.00 112,435.00 147,235.00 83,483.89 63,751.11Other Purchased Services 11,240.00 1,000.00 12,240.00 12,240.00Supplies and Materials 141,000.00 (57,329.00) 83,671.00 82,780.45 890.55Other Objects 350.00 {350.00}

Total Educational Media Services/School Library: 344,410.00 60z648.42 4052058.42 3402412.76 64z645.66

Instructional Staff Training Services:Other Purchased Services 10,300.00 (500.00) 9,800.00 9,340.33 459.67Supplies and Materials 3,600.00 (2,700.00) 900.00 887.08 12.92Other Objects 2z750.00 {667.00} 22083.00 22065.00 18.00

Total Instructional Staff Training Services: 16,650.00 {3z867.00} 12z783.00 12z292.41 490.59


GENERAL FUNDFOR THE YEAR ENDED JUNE 30,2014


EXPENDITURES (CONT'D.):Current Expense (Cont'd.):Undistributed Expenditures (Cont'd.):Support Services- General Administration:Salaries 122,535.00 (1,994.00) 120,541.00 120,538.56 2.44Legal Services 40,000.00 27,000.00 67,000.00 65,513.27 1,486.73Audit Fees 15,000.00 28,440.00 43,440.00 43,440.00ArchitectlEngineer Services 10,000.00 (10,000.00)Other Purchased Professional Services 17,500.00 17,500.00 16,289.00 1,211.00Communications/Telephone 102,500.00 (46,500.00) 56,000.00 35,292.92 20,707.08BOE Other Purchased Services 5,000.00 (5,000.00)Misc. Purchased Services 41,905.00 (12,573.00) 29,332.00 24,069.68 5,262.32General Supplies 4,000.00 (2,000.00) 2,000.00 1,794.42 205.58BOE In-House TraininglMeeting Supplies 1,500.00 882.25 2,382.25 2,292.25 90.00,Misc. Expenditures 2,300.00 (1,537.00) 763.00 762.89 0.11

0\0\ BOE Membership Dues & Fees 7,000.00 (1,190.00) 5,810.00 5,806.70 3.30

Total Support Servi. - General Administration: 351,740.00 (6,971.75) 344,768.25 315,799.69 28,968.56

Support Services- School Administration:Salaries of Principals/ Asst. Principals 163,050.00 (1,995.00) 161,055.00 161,053.92 1.08Salaries of Secretarial and Clerical Assistants 129,295.00 12,468.00 141,763.00 141,762.56 0.44Purchased Professional & Technical Services 500.00 500.00 64.20 435.80Other Purchased Services 5,600.00 211.02 5,811.02 5,811.02Supplies and Materials 12,500.00 (2,855.02) 9,644.98 9,147.04 497.94Other Objects 1,790.00 606.00 2,396.00 2,359.01 36.99

Total Support Servo- School Administration: 312,735.00 8,435.00 321,170.00 320,197.75 972.25

Central Services:Salaries 178,530.00 (1,484.25) 177,045.75 172,452.58 4,593.17Purchased Professional Services 8,200.00 884.00 9,084.00 9,084.00Misc. Purchased Services 6,900.00 (3,172.00) 3,728.00 (1,345.80) 5,073.80Supplies and Materials 3,000.00 2,000.00 5,000.00 4,267.95 732.05Misc. Expenditures 1:300.00 1,300.00 1:028.92 271.08

Total Central Services: 197:930.00 {1,772.252 196:157.75 185,487.65 10:670.10




EXPENDITURES (CONT'D.):Current Expense (Cont'd.):Undistributed Expenditures (Cont'd):Required Maint. For School Facilities:Purchased Profess. And Tech. Svcs. 51,420.00 374.00 51,794.00 51,793.56 0.44Cleaning, Repair, and Maintenance Services 218,500.00 195,955.97 414,455.97 222,245.03 192,210.94General Supplies 9,000.00 52.00 9,052.00 8,817.60 234.40Other Objects 2,300.00 2,300.00 1,526.00 774.00

Total Required Maint. For School Facilities: 278,920.00 198,681.97 477,601.97 284,382.19 193,219.78

Custodial Services:Salaries 143,849.00 143,849.00 136,231.11 7,617.89Purchased Profess. And Tech. Svcs. 383,830.00 (258,319.00) 125,511.00 54,077.35 71,433.65

0\Cleaning, Repair, and Maintenance Services 50,000.00 (6,689.98) 43,310.02 17,446.50 25,863.52

'-l Insurance 40,530.00 (10,071.00) 30,459.00 30,425.00 34.00General Supplies 8,000.00 12,600.00 20,600.00 18,648.38 1,951.62Energy (Electricity) 193,700.00 (13,000.00) 180,700.00 114,217.33 66,482.67Energy (Oil) 140,200.00 45,000.00 185,200.00 184,079.61 1,120.39Other Objects 1,500.00 1,500.00 1343.49 156.51

Total Custodial Services: 817,760.00 (86,630.98) 731,129.02 556,468.77 174,660.25

Student Transportation Services:Salaries (Between home & School) 23,390.00 562.00 23,952.00 23,952.00Salaries-Other 1,000.00 (539.00) 461.00 190.13 270.87Purchased Profess. And Tech. Svcs. 6,000.00 (4,514.00) 1,486.00 1,486.00Contracted Services - Aid in Lieu of Payment 45,000.00 (10,070.00) 34,930.00 30,651.28 4,278.72Contracted Services (Between Home &School) - Vendors 312,400.00 (3,120.00) 309,280.00 304,044.08 5,235.92

Contracted Services (Other Than BetweenHome & School) - Vendors 25,000.00 (14,000.00) 11,000.00 8,012.50 2,987.50

Contracted Services (Between Home &School) - Joint Agreements 4,000.00 4,070.00 8,070.00 7,600.00 470.00

Contracted Services (Special Ed.)- Vendors 79,400.00 (10,000.00) 69,400.00 63,676.72 5,723.28Misc. Purchased Services 2,625.00 2,625.00 2,625.00

Total Student Transportation Services: 498:815.00 {37:611.002 461:204.00 438:126.71 23z077.29




EXPENDITURES (CONT'D.):Current Expense (Cont'd.):Undistributed Expenditures (Cont'd.):Unallocated Employee Benefits:Social Security Contributions 85,000.00 11,925.00 96,925.00 83,737.77 13,187.23Other Retirement Contribs. - PERS 52,095.00 24,932.00 77,027.00 77,026.85 0.15Other Retirement Benefits - DCRP 305.00 305.00 249.54 55.46Unemployment Compensation 15,000.00 5,815.00 20,815.00 20,575.40 239.60Workmen's Compensation 39,000.00 (2,000.00) 37,000.00 33,534.00 3,466.00Health Benefits 940,500.00 156,059.00 1,096,559.00 1,079,482.49 17,076.51Tuition Reimbursements 27,000.00 27,000.00 17:972.00 9:028.00

Total Unallocated Employee Benefits: 1,158,595.00 197,036.00 1,355,631.00 1,312:578.05 43,052.95

On-behalfTPAF Post-Retirement0\ Medical Contrib. (non-budgeted) 263,869.00 (263,869.00)Cf)

On-behalfTPAF PensionPayments (non-budgeted) 160,933.00 (160,933.00)

On-behalfTPAF Employer FICAContrib. (non-budgeted) 280:212.28 (280,212.28)

Total Undistributed Expenditures 5,116,740.00 353:191.08 5:469,931.08 5:459,614.55 10,316.53

Total Expenditures - Current Expense 8,789,083.00 134,004.24 8,923,087.24 8,886,651.31 36,435.93

CAPITAL OUTLAY:Equipment:Instruction 4,728.00 4,728.00 4,728.00Operations and Maintenance 54,952.01 54:952.01 54:952.01

Total Equipment 59:680.01 59,680.01 59,680.01

Facilities Acquisition andOther Purch. Professional Services 8,000.00 8,000.00 5,820.00 2,180.00Debt Service Assessment-SDA FundingOther Objects 35,287.00 (12,402.00) 22:885.00 22:885.00

Total Facil. Acquis./Const. Svcs.: 35,287.00 {4z402.00} 30,885.00 28,705.00 2z180.00

Total Capital Outlay:



Original Budget Final VarianceBudget Transfers Budget Actual Final to Actual35,287.00 55,278.01 90,565.01 88,385.01 2,180.00

8,824,370.00 189,282.25 9,013,652.25 8,975,036.32 38,615.93

(350,035.00) {189z282.252 {539z317.252 232z784.79 772z102.04

Total Expenditures

Excess (Deficiency) of RevenuesOver (Under) Expenditures

Excess (Deficiency) of Revenues andOther Financing Sources Over (Under)Expenditures and Other Financing Uses

Fund Balances, June 30

{350z035.002

(350,035.00)

lz572z797.46

$ 1,222z762.46

089,282.252

(189,282.25)

{539,317.252

(539,317.25)

lz572,797.46

$ lz033A80.21

232,784.79 772z102.04

$ 089,282.252

232,784.79

lz572z797.46

$ 1z805z582.25

772,102.04Net Change in Fund Balance

0\ Fund Balances, July 1.o

$ 772z102.04

Recapitulation:Restricted:Reserved Excess Surplus-Designated for Subsequent Year ExpendituresReserved Excess SurplusCapital ReserveMaintenance Reserve

Commited:Reserve for Encumbrances

UnrestrictedlUnassigned

Reconciliation to Governmental Funds Statements (GAAP):State Aid Payments not recognized on GAAP basis

$ 350,035.00308,941.2230,001.00

376,889.61

469,774.42269z941.00

1,805,582.25

169z884.00

$ 1,635z698.25Fund Balance per Governmental Funds (GAAP)

Exhibit C-2BETHLEHEM TOWNSIllP SCHOOL DISTRICT

SPECIAL REVENUE FUNDBUDGETARY COMPARISON SCHEDULEFOR THE YEAR ENDED JUNE 30, 2014

ORIGINAL BUDGET FINAL VARIANCEBUDGET TRANSFERS BUDGET ACTUAL FINAL TO ACTUAL

REVENUES:Local Sources

Revenues from Local Sources $ $

Total Local Revenues

Federal SourcesTitle I $ 7,500.00 $ (475.00) $ 7,025.00 $ 7,025.00 $Title II 7,500.00 1,022.00 8,522.00 8,522.00IDEAPartB 100,000.00 3,795.00 103,795.00 103,795.00IDEA Preschool 1,074.00 1,074.00 1,074.00

Rural Education Acheivement Program 98752.74 98:752.74 98752.74

Total Federal Revenues 115:000.00 104:168.74 219:168.74 219:168.74~0 Total Revenues 115:000.00 104)68.74 219:168.74 219)68.74

EXPENDITURES:Instruction

General Supplies 8099.00 8099.00 8099.00

Total Instruction 8099.00 8099.00 8099.00

Support ServicesOther Purchased Services (400-500 series) 8,522.00 8,522.00 8,522.00

Tuition 115,000.00 (11,205.00) 103,795.00 103,795.00

Supplies & Materials 98:752.74 98:752.74 98:752.74

Total Support Services 115:000.00 96069.74 211:069.74 211:069.74

Total Expenditures 115:000.00 104)68.74 219:168.74 219:168.74Excess (Deficiency) of Revenues Over (Under)

Expenditures and Other Financing Sources (Uses) $ $ $ $ $

NOTES TO THE REQUIREDSUPPLEMENTARY INFORMATION

-71-

ExhibitC-3BETHLEHEM TOWNSHIP SCHOOL DISTRICTREQUIRED SUPPLEMENTARY INFORMATION

BUDGETARY COMPARISON SCHEDULENOTETORSI


Note A - Explanation of Differences between Budgetary Inflows and Outflows andGAAP Revenues and Expenditures

SpecialGeneral RevenueFund Fund

Sources/inflows of resourcesActual amounts (budgetary basis) "revenue"from the budgetary comparison schedule (C-l) $ 9,207,821.11 (C-2) $ 219,168.74

Difference - budget to GAAP:Grant accounting budgetary basis differs from GAAP in thatencumbrances are recognized as expenditures, and the relatedrevenue is recognized (Net) 0.00State aid payment recognized for budgetary purposes,not recognized for GAAP statements (Net) 36,613.60 0.00

Total revenues as reported on the statement of revenues, expendituresand change in fund balances - governmental funds (B-2) $ 9:244:434.71 (B-2) $ 219:168.74

Uses/outflows of resourcesActual amounts (budgetary basis) "total outflows" from thebudgetary comparison schedule

Difference - budget to GAAP:Encumbrances for supplies and equipment ordered butnot received are reported in the year the order is placed forbudgetary purposes, but in the year the supplies are receivedfor financial reporting purposes.

(C-l) $ 8,975,036.32 (C-2) $ 219,168.74

0.00

Total expenditures as reported on the statement of revenues,expenditures, and changes in fund balances - governmental funds (B-2) $ 8:975:036.32 (B-2) $ 219:168.74

-72 -

OTHER SUPPLEMENTARY INFORMATION

-73 -

SCHOOL LEVEL SCHEDULES

SECTION-D

-74 -

SPECIAL REVENUE FUND

SECTION -E

-75 -

Exhibit - E-1BETHLEHEM TOWNSHIP SCHOOL DISTRICT

SPECIAL REVENUE FUNDCOMBINING SCHEDULE OF REVENUES AND EXPENDITURES

BUDGETARY BASISFOR THE YEAR ENDED JUNE 30, 2014

LD.E.A. LD.E.A.PARTB PARTB TITLE II RURAL EDUCATION

TITLE I BASIC PRESCHOOL PART A ACHIEVEMENT PROGRAM TOTALS2013-2014 2013-2014 2013-2014 2013-2014 2012-2013 2013-2014 2013-2014

REVENUES

Federal Sources $ 7,025.00 $ 103,795.00 $ 1,074.00 $ 8,522.00 $ 47,271.74 $ 51,481.00 $ 219,168.74

Total Revenues 72025.00 1032795.00 12074.00 82522.00 472271.74 512481.00 2192168.74

I

'-l EXPENDITURES0\

Instruction:General Supplies 72025.00 L074.00 8,099.00

Total Instruction 72025.00 L074.00 82099.00

Support Services:Tuition 103,795.00 103,795.00

Purch. Technical Services 8522.00 32622.68 122144.68

Total Support Services 1032795.00 8522.00 32622.68 1152939.68

Facilities Acquis. & Const. Serv.:Instructional Equipment 432649.06 51A81.00 952130.06

Total Facil. Acquis. & Const. Servo 432649.06 5L481.00 95,130.06

Total Expenditures $ 72025.00 $ 1032795.00 $ 12074.00 $ 82522.00 $ 472271.74 $ 512481.00 $ 2192168.74

CAPITAL PROJECTS FUND

SECTION -F

-77 -

PROPRIETARY FUNDS

SECTION -G

-78 -

ENTERPRISE FUND

-79 -

Exhibit G-l

BETHLEHEM TOWNSHIP SCHOOL DISTRICTCOMBINING STATEMENT OF NET POSITION

PROPPRIETARY FUNDSJUNE 30, 2014

BUSINESS-TYPE TOTALACTIVITIES - ENTERPRISE

ENTERPRISE FUND FUNDFOOD

SERVICE TOTAL

ASSETSCurrent assets:

Cash and Cash Equivalents $ 1,080.65 $ 1,080.65Accounts Receivable (Net) 2,876.64 2,876.64Inventory 1,782.32 1,782.32

Total Current Assets 5,739.61 5739.61

Noncurrent Assets:Furniture, Machinery & Equipment 208,303.38 208,303.38

Less Accumulated Depreciation (171,557.08) (171,557.08)

Total Noncurrent Assets 36,746.30 36,746.30

Total Assets 42,485.91 42,485.91

NET POSITIONInvested in Capital Assets Net of

Related Debt 36,746.30 36,746.30Unrestricted (Deficit) 5,739.61 5,739.61

Total Net Position $ 42485.91 $ 42,485.91

- 80-

Exhibit - G-2

BETHLEHEM TOWNSHIP SCHOOL DISTRICTCOMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION




SERVICE FUNDOperating Revenues:

Charges for Services:Daily Sales - Non-reimbursable Programs $ 801626.80 $ 801626.80

Total Operating Revenues 80626.80 80626.80

Operating Expenses:Cost of Sales 48,449.53 48,449.53Salaries 34,532.56 34,532.56Employee benefits 5,299.51 5,299.51Repair and Maintenance Services 550.61 550.61Administrative Expenses 4,272.29 4,272.29Miscellaneous Expenses 223.09 223.09Transportation 1,642.70Management Fee 9,000.00 9,000.00Depreciation 8948.08 8948.08

Total Operating Expenses 112918.37 111275.67

Operating Income (Loss) p21291.572 {301648.872Nonoperating Revenues (Expenses):

State Sources:State School Lunch Program 1,095.87 1,095.87

Federal Sources:USDA Commodities 6,114.82 6,114.82National School Lunch Program 13,484.04 13,484.04

Interest and Investment Revenue 53.14 53.14

Total Nonoperating Revenues (Expenses) 20747.87 20747.87

Income (Loss) Before Transfers (11,543.70) (9,901.00)


Total Net Position-Beginning 54029.61 54029.61

Total Net Position-Ending $ 42485.91 $ 44128.61

- 81 -

ExhibitG-3BETHLEHEM TOWNSHIP SCHOOL DISTRICTCOMBINING STATEMENT OF CASH FLOWS




SERVICE FUNDCASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers $ 80,569.05 $ 80,569.05Payments to Suppliers (97,444.34) (97,444.34)

Net Cash Provided by (Used for) Operating Activities (16,875.29) (16,875.29)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESFederal and State Sources 12,134.69 12,134.69Operating Subsidies and Transfers (to) from Other Funds 3064.29 3064.29

Net Cash Provided by (Used for) Non-capital Financing Activities 15 198.98 15 198.98

CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIES

Purchases of Capital Assets (8,980.38) (8,980.38)

Net cash provided by (used for) capital and related financing activities (8,980.38) (8,980.38)

CASH FLOWS FROM INVESTING ACTIVITIESInterest and dividends 53.14 53.14

Net cash provided by (used for) investing activities 53.14 53.14

Net Increase (Decrease) in Cash and Cash Equivalents (10,603.55) (l0,603.55)

Balances-Beginning of Year 11684.20 11,684.20

Balances-End of Year $ 1080.65 $ 1,080.65

Reconciliation of Operating Income (Loss) to Net Cash Provided(Used) by Operating Activities:Operating Income (Loss) $ (32,291.57) (32,291.57)

Adjustments to Reconcile Operating Income (Loss) to Net CashProvided by (Used for) Operating ActivitiesDepreciation and Net Amortization 8,948.08 8,948.08USDA Commodities 6,879.33 6,879.33(Increase) Decrease in Inventory (411.13) (411.13)

Total Adjustments 15416.28 15416.28

Net Cash Provided by (Used for) Operating Activities $ !l6z875.29} !l6z875.29}

- 82-

INTERNAL SERVICE FUND

- 83-

FIDUCIARY FUNDS

SECTION -H

- 84-

Exhibit - H-lBETHLEHEM TOWNSHIP SCHOOL DISTRICT

COMBINING STATEMENT OF FIDUCIARY NET POSITIONJUNE 30, 2014

ExpendableTrust Fund

AGENCY EmployeeBenefit

Total FlexibleStudent Payroll Net Agency SpendingActivity Agency Payroll Funds Trust Fund TOTALS

ASSETS

Cash and Cash Equivalents $ 19,532.03 $ 111,939.43 $ 1,509.29 $ 132,980.75 1,853.89 $ 134,834.64Interfund Accounts Receivable 1,396.00 1,396.00 1,396.00

Total Assets $ 19,532.03 $ 113,335.43 $ 1,509.29 $ 134,376.75 1,853.89 $ 136,230.64r::tJ(Jl

LIABILITIES

Liabilities:Interfund Accounts Payable $ $ 23.45 $ 1,509.29 $ 1,532.74 13.32 $ 1,546.06Unidentified DepositsSummer Payment Plan Withholdings 112,940.98 112,940.98 112,940.98Payroll Deductions and Witholdings 371.00 371.00 371.00Student Activity Reserves 19,532.03 19,532.03 19,532.03

Total Liabilities 19,532.03 113,335.43 1,509.29 134,376.75 13.32 134,390.07

NET POSITIONNet Position Restricted for:Qualified Employee Benefits 1,840.57 1,840.57

Total Net Position 1,840.57 1,840.57

Exhibit - H-2

BETHLEHEM TOWNSHIP SCHOOL DISTRICTCOMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDSFOR THE YEAR ENDED JUNE 30, 2013

Expendable TrustFund

EmployeeBenefit Flexible

SpendingTrust Fund Totals

ADDITIONS:Deductions from Employees' Salaries $ 8,692.40 $ 8,692.40

Total Additions 8,692.40 8,692.40

DEDUCTIONS:Eligible Benefits 12,991.51 12,991.51

Total Deductions 12,991.51 12,991.51


Net Position - Beginning 6,139.38 6,139.38

Net Position - Ending $ 1 840.27 $ 1,840.27

- 86-

Exhibit - H-3

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSCHEDULE OF RECEIPTS AND DISBURSEMENTS

STUDENT ACTIVITY AGENCY FUNDFOR THE YEAR ENDED JUNE 30,2014

BALANCE BALANCEJUNE 30, CASH CASH JUNE 30,

2013 RECEIPTS DISBURSEMENTS 2014Student Activity Funds:

Hoppock School Fund $ 13,495.12 $ 37,689.77 $ 41,231.79 $ 9,953.10Conley School Fund 10,114.99 8,264.86 16,436.89 1,942.96Summer Enrichment 7685.97 50.00 7635.97

Total Student Activity Funds $ 23,610.11 $ 53,640.60 $ 57,718.68 $ 19,532.03

- 87-

Exhibit - H-4

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSCHEDULE OF RECEIPTS AND DISBURSEMENTS

PAYROLL AGENCY FUNDFOR THE YEAR ENDED JUNE 30, 2014


2013 RECEIPTS DISBURSEMENTS 2014

ASSETS

Cash and Cash Equivalents $ 35.15 $ 1,139,928.07 $ 1,028,023.79 $ 111,939.43Interfund Accounts Receivable (1,396.00) 1,396.00

Total Assets $ 35.15 $ 1,139,928.07 $ 1,026,627.79 $ 113,335.43

LIABILITIES

Interfund Accounts Payable $ 35.15 $ 146.43 $ 158.13 $ 23.45Summer Payment Plan 112,940.98 112,940.98Payroll Deductionsand Withholdings 1,026,840.66 1,026,469.66 371.00

Total Liabilities $ 35.15 $ la139,928.07 $ 1,026,627.79 $ 113,335.43

- 88-

Exhibit - H-5

TOWNSHIP OF BETHLEHEM SCHOOL DISTRICTSCHEDULE OF RECEIPTS AND DISBURSEMENTS

NET PAYROLL FUNDFOR THE FISCAL YEAR ENDED JUNE 30, 2014


2013 RECEIPTS DISBURSEMENTS 2014

ASSETS

Cash and Cash Equivalents $ 19.12 $ 3,036,408.89 $ 3,034,918.72 $ 1,509.29

Total Assets $ 19.12 $ 3,036,408.89 $ 3,034,918.72 $ 1,509.29

LIABILITIES

Accrued Salaries and Benefits $ $ 3,017,854.08 $ 3,017,854.08 $Interfund Accounts Payable 19.12 18,554.81 17,064.64 1,509.29

Total Liabilities $ 19.12 $ 3:036,408.89 $ 3,034,918.72 $ 1:509.29

- 89-

LONG-TERM DEBT

SECTION -I

- 90-

Exhibit - 1-1BETHLEHEM TOWNSHIP SCHOOL DISTRICT

LONG-TERM DEBTSCHEDULE OF SERIAL BONDS

JUNE 30, 2014

BALANCE BALANCEDATE OF AMOUNT ANNUAL MATURITIES INTEREST JUNE 30, JUNE 30,

ISSUE ISSUE OF ISSUE DATE AMOUNT RATE 2013 REDEEMED 2014

Refunding School Bonds 911/2005 $ 5,550,000 7/1/14 $ 200,000 4.000% $ $ $7/1/15 210,000 4.000%7/1/16 220,000 4.000%7/1/17 225,000 4.000%711118 235,000 4.000%711119 245,000 4.000%7/1/20 255,000 4.000%7/1/21 265,000 4.000%

\07/1/22 280,000 4.000%,_. 7/1/23 290,000 4.250%7/1/24 300,000 4.250%7/1/25 315,000 4.250%711/26 325,000 4.250%711/27 345,000 4.375%711/28 365,000 4.375%711/29 375,000 4.375%7/1/30 395,000 4.375% 5,035,000 190,000 4,845,000

$ $ 5,035,000 $ $ 190,000 $ $ 4,845,000

Exhibit 1-3

BETHLEHEM TOWNSHIP SCHOOL DISTRICTBUDGETARY COMPARISON SCHEDULE

LONG-TERM DEBTFOR THE YEAR ENDED JUNE 30, 2014

VarianceOriginal Budget Final Positive (Negative)Budget Transfers Budget Actual Final to Actual

REVENUES:Local Sources:

Local Tax Levy $ 396,226.00 $ $ 396,226.00 $ 396,226.00 $

Total Local Sources: $ 396,226.00 $ $ 396,226.00 $ 396,226.00 $

Total Revenues $ 396,226.00 $ $ 396,226.00 $ 396,226.00 $

EXPENDITURES:Regular Debt Service:

'-0Redemption of Bond Principal 190,000.00 190,000.00 190,000.00

IV Bond Interest 206,226.00 206,226.00 206,225.04 (0.96)

Total Regular Debt Service 396,226.00 396,226.00 396,225.04 (0.96)

Total expenditures 396,226.00 396,226.00 396,225.04 (0.96)

Excess (Deficiency) of Revenues Over (Under) Expenditures $ $ $ $ 0.96 $ 0.96

Fund Balance - Beginning 1.91 1.91 1.91

Fund Balance - Ending $ 1.91 $ $ 1.91 $ 2.87 $

STATISTICAL SECTION

SECTION -J

- 93-

Financial Trends

- 94-

Exhibit J-lBETHLEHEM TOWNSHIP SCHOOL DISTRICT

Net PositionlNet Assets by Component,Last Ten Fiscal Years

(accrual basis of accounting)(Unaudited)

Fiscal Year Ending June 30,2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Governmental activitiesInvested in capital assets, net of related debt $ (683,958) $ (740,397) $ (1,730,883) $ (1,526,056) $ (1,216,135) $ (886,214) $ (551,293) $ {211,371) $(1,415,957) $(1,023,709)Restricted 1,535,641 1,296,245 985,822 312,080 559,035 614,862 249,969 432,271 1,179,474 2,434,465Unrestricted {166,937l {227,809l {154,712l !19,543l {12,28Il {33,509l !171,013l (I 13,49Il 94929 1331,869)

Total governmental activities net position/net assets $ 684746 $ 328039 $ {899,773l $ {I,233,519) $ (669,38Il $ {304,86I) $ (472,337l $ 107409 $ (I41,554l $ 1,078,887

Business-type activitiesInvested in capital assets, net of related debt $ 36,746 $ 36,714 $ 43,866 $ 35,759 $ 42,911 $ 50,062 $ 15,611 $ 15,840 $ $Unrestricted 5740 17316 19059 37428 36946 51729 94645 130575 168425 125769

Total business-type activities net position/net assets $ 42486 $ 54030 $ 62925 $ 73187 $ 79857 $ 101791 $ 110,256 $ 146415 $ 168425 $ 125769

District-wideInvested in capital assets, net of related debt $ (647,212) $ (703,683) $ (1,687,017) $ (1,490,297) $ (1,173,224) $ (836,152) $ (535,682) $ (195,531) $ (1,415,957) $ (1,023,709)Restricted 1,535,641 1,296,245 985,822 312,080 559,035 614,862 249,969 432,271 1,179,474 2,434,465Unrestricted (161,197l (210,494) (135,653) 17885 24665 18220 (76,368) 17084 263354 (206,100)

Total district net position/net assets $ 727,232 $ 382069 $ (836,848) $ (l,l60,332) $ (589,524) $ (203,070) $ (362,081) $ 253,824 $ 26871 $ 1,204,656

\0en

ExhibitJ-2BETHLEHEM TOWNSHIP SCHOOL DISTRICT

Changes in Net AssetsLast Ten Fiscal Years



ExpensesGovernmental activities

InstructionRegular s 2,233,645 s 2,692,768 $ 3,320,009 $ 3,552,030 s 3,735,609 s 3,338,540 s 3,660,174 s 3,677,265 $ 3,448,861 $ 3,540,442Special Education 1,083,448 1,047,824 1,107,571 1,158,025 1,073,987 924,442 1,017,780 951,445 1,001,329 1,024,372Other Instruction 82,785 88,197 330,733 223,853 54,760 44,989 181,895 155,196 161,661 136,591

Support Services:Tuition 259,797 356,895 122,604 64,429 31,059 116,723 82,935 160,986 165,883 201,649Student & Instruction Related Services 1,292,832 1,032,608 1,104,872 1,275,278 1,332,575 1,002,725 1,228,303 1,258,484 1,151,347 941,667School Administrative Services 320,198 216,477 286,042 345,735 352,798 342,261 361,691 371,286 329,316 352,802General Administration 501,287 571,839 862,483 950,798 974,915 978,232 1,154,270 824,689 459,039 307,952Plant Operations and Maintenance 846,671 792,657 1,225,246 1,418,783 1,257,599 1,099,987 1,251,235 1,062,597 848,974 799,061Pupil Transportation 438,127 511,592 545,653 648,306 628,974 667,013 664,112 896,978 582,371 479,228Unallocated Benefits 2,017,592 1,971,803Other Support Services 204,140 169,064

Interest on long-term debt 233,499 210,333 231,143 224,635 229,728 226,915 365,176 250,837 248,478 300,666Unallocated Depreciation and Amortization 193241 181305 343653 428747 428747 428747 428747 378747 146 738

Total governmental activities expenses 9,503,122 9,6742:.99 9480009 10,290,619 10,100,751 9170574 10,396,318 9609763 8,980,146 8,400,232

Business-type activities:\0 Food service 112928 117527 1412:.44 134525 144 747 135486 141871 161810 162,652 1516270\ Total business-type activities expense 112928 117527 141244 134525 144 747 135486 141871 161810 162,652 151627

Total district expenses s 9,616,050 $ 91791,826 s 91621,253 s 1014251144 s 10,245,498 s 913061060 s 10,538,189 s 91771,573 s 9,142,798 s 81551!859

Page 1of2


Changes in Net AssetsLast Ten Fiscal Years



Program RevenuesGovernmental activities:

Operating grants and contributions 1405638 1527804 2358130 2,281,632 2,085,254 1792 267 2,511,207 779889 948980 922894Total governmental activities program revenues 1405638 1527804 2358130 2,281,632 2,085,254 1792267 2511 207 779889 948980 922894

Business-type activities:Charges for services

Food service 80,627 83,941 101,167 104,100 101,129 103,737 108,918 116,167 106,108 101,266Operating grants and contributions 20695 24647 26581 23337 21536 22790 20903 19371 17981 16714

Total business type activities program revenues 101322 108588 127748 127437 122665 126527 129821 135538 124089 117980Total district program revenues $ 11506,959 $ 1,636,392 $ 2485878 $ 2409069 $ 2,207,919 $ 1918794 $ 2,641,028 $ 915427 $ 1073069 $ 1040874

Net (Expense)/RevenueGovernmental activities $ (8,097,484) $ (8,146,495) $ (7,121,879) $ (8,008,987) $ (8,015,497) $ (7,378,307) $ (7,885, III) $ (8,829,874) $ (8,031,166) $ (7,477,338)Business-type activities {II ,607) (8,939) (13,496) (7,088) i22,082) (8,959) (12,050) (26,272) {38,563) (33,647)Total district-wide net expense $ ~8,109,091) $ (8,155,434) $ (7,135,375l $ (8,016,075) $ (8,037,579) $ (7,387,266) $ (7,897,161) $ (8,856,146) $ (8,069,729) $ (7,510,985)

General Revenues and Other Changes in Net AssetsGovernmental activities:

Property taxes levied for general purposes, net s 6,934,529 s 6,969,379 s 6,969,379 s 7,057,879 s 7,257,186 $ 6,996,333 s 6,833,256 s 6,570,438 s 6,083,428 s 6,114,123-c Taxes levied for debt service 396,226 398,725 443,790 334,079 367,669 321,097 370,019 174,281 401,563 416,788'-1 Federal and State Aid not Restricted 1,097,406 1,073,045 1,659,691 1,233,998 1,641,264

Investment Earnings 6,778 1,866 11,285 16,868 27,686 42,679 43,966 42,526Miscellaneous income 26,031 102,413 35,678 51,025 14,937 211,485 47,739 (6,793) 25,547 20,970Cancellations (65,963) 175,748Transfers 26,665 (77,840) (74,403)Capital Lease Payments 40550

Total governmental activities 8454192 8477599 7455625 7444849 7651077 7545783 7305365 8440296 7,751,212 8337016

Business-type activities:Investment Earnings 53 45 3,234 418 148 494 2,555 4,263 3,380 1,330Transfers (26,665) 77840 74404

Total business-type activities 53 45 3234 418 148 494 (24,110) 4263 81220 75734Total district-wide $ 8454245 $ 8477 644 s 7458859 s 7445267 s 7,651,225 $ 7546277 $ 7,281,255 s 8444 559 s 7832432 s 8,412,750

Change in Net PositioniNet AssetsGovernmental activities s 356,707 $ 331,104 $ 333,746 $ (564,138) $ (364,420) s 167,476 $ (579,746) s (389,578) $ (279,954) $ 859,678Business-type activities (11,554) (8,895) (10,262) (6,670) (21,934) (8,465) (36,160) (22,009) 42657 42087Total district $ 345154 s 322210 s 323484 s (570,808) s (386,354) s 159011 s (615,906) $ (4II,587) $ (237,297) s 901765

Page 2 of2


Fund Balances, Governmental Funds,Last Ten Fiscal Years

(modified accrual basis of accounting)(Unaudited)


General FundReservedlRestricted!Committed $ 1,535,641 $ 1,296,243 $ 996,517 $ 453,320 $ 720,627 s 734,740 $ 218,452 $ 359,481 $ 372,050 $ 397,748Unreserved! Assigned/Unassigned 100057 70057 110,505 166,202 87177 110604 182777 183,919 85,921 103,663

Total general fund $ 1,635,698 $ 1,366,300 $ 1,107,022 $ 619,522 $ 807,804 s 845,344 $ 401,229 $ 543,400 s 457,971 $ 501,411

All Other Governmental FundsReserved $ 38,395 s 39,484 s 1,208,333Unreserved, reported in:

Special revenue fundCapital projects fund 24,925 24,925 24,925 24,925 24,925 24,925 561,913 514,716Debt service fund 3 2 2 (47,8632 2 47866 9471 206,028 196,556

Total all other govermnental funds $ 3 $ 2 $ 24,927 $ F2!9382 $ 24,927 $ 24,925 $ 72,791 $ 72,791 $ 807,425 $ 1,919,605

Total govermnental fund balances $ 1,635,701 $ 1,366,302 s 1,131,949 $ 596,584 $ 832,731 $ 870,269 $ 474,020 $ 616,191 $ 1,265,396 $ 2,421,016\CJ00

ExhibitJ-4BETHLEHEM TOWNSHIP SCHOOL DISTRICTChanges in Fund Balances, Governmental Funds,

Last Ten Fiscal Years(modified accrual basis oj accounting)

(Unaudited)

Fiscal Year Ending June 30,

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

RevenuesTax levy $ 7,330,755 $ 7,368,104 $ 7,413,169 $ 7,391,958 $ 7,624,855 $ 7,317,430 $ 7,203,275 $ 6,744,719 $ 6,484,991 $ 6,530,911Other Local Sources 26,031 111,013Interest earnings 6,778 1,866 11,285 16,868 27,686 42,679 43,967 42,526Miscellaneous 35,678 51,025 14,937 211,485 47,739 (6,793) 25,547 20,97{)State sources 2,283,875 2,349,836 2,147,247 1,995,440 1,757,042 2,195,131 2,344,522 2,294,895 2,012,075 2,424,390Federal sources 219169 242413 210883 286192 328112 173200 166685 144 685 171903 139767

Total revenue 9,859,829 10,071,366 9813 755 9726481 9,736,231 9914114 9789907 9,220,185 8738483 9158564

ExpendituresInstruction:

Regular Instruction 2,268,903 2,692,768 2,533,989 2,732,553 2,919,715 2,798,243 2,759,296 2,765,395 2,615,334 2,555,255Special Education Instruction 1,083,448 1,047,824 848,{)46 9D5,585 841,740 777,071 769,52{) 717,633 761,739 726,021Other Instruction 82,785 88,197 245,913 167,732 35,595 30,494 130,204 118,745 120,741 105,231

Support Services:Tuition 259,797 356,895 122,604 64,429 31,059 116,723 82,935 160,986 165,883 201,649

<o Student & Instruction Related Services 1,292,832 1,032,608 845,979 997,278 1,044,409 842,874 928,692 890,690 868,106 722,357<c School Administrative Services 320,198 216,477 216,704 268,055 274,193 285,386 271,153 625,108 249,188 271,274

Other Administrative Services 501,287 571,839 659,807 742,952 763,512 821,706 888,953 261,259 347,577 237,728Plant Operations and Maintenance 840,851 769,772 936,135 1,107,488 983,638 922,619 944,018 793,121 694,506 660,488Pupil Transportation 438,127 511,592 529,785 632,438 613,106 651,145 648,244 530,078 516,503 463,360Other Support Services 154,540 130,780Unallocated Benefits 2,017,592 1,971,384 1,930,{)77 1,925,087 1,899,139 1,9{)2,641 2,165,709 2,059,387 1,782,058 1,527,203

Capital Outlay 88,385 112,969 13,426 37,087 61,434 1,175,610 177,923Debt Service:

Interest 206,225 213,725 220,925 226,944 232,667 238,963 245,019 250,838 248,478 300,666Principal 190000 185000 175000 155000 135000 130000 125000 120000 115000 105000

Total Expenditures 9 59D430 9771 050 9,278,390 9,962,628 9773773 9,517,865 9958743 9354674 9,815,263 8184935Excess (Deficiency) of revenues

over (under) expenditures 269,399 300,315 535,365 (236,147) (37,542) 396,249 (168,836) (134,489) (1,076,780) 973,629

Page I of2

Other Financing sources (nses)Capital LeasesAccounts Receivable CancelledProceeds from refundingPayment to Escrow AgentContracts Payable CancelledTransfers inTransfers out

Total other financing sources (uses)

Net change in fund balances

Debt service as a percentage ofnoncapital expenditures

I

.......oo

Source: District records

ExhibitJ-4BETHLEHEM TOWNSHIP SCHOOL DISTRICTChanges in Fund Balances, Governmental Funds,

Last Ten Fiscal Years(modified accrual basis of accounting)

(Unaudited)

Fiscal Year Ending June 30,

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

(65,963) (1,118)5,542,502(5,542,502)

176,86626,665 9,781 731,251

{87,622} {805,654l(65,963) 26665 m,841l 101345

269399 234,353 535365 (236,147l $ (37,542) $ 396,249 s (142,171) $ (134,489l $ (1,154,621) $ 1,074,974

4.17% 4.13% 4.27% 3.85% 3.76% 3.88% 3.72% 3.99% 4.21% 5.07%

Page2of2

Exhibit - J-5

BETHLEHEM TOWNSHIP SCHOOL DISTRICTGENERAL FUND OTHER LOCAL REVENUE BY SOURCE

LAST TEN FISCAL YEARS(modified accrual basis of accounting)

(Unaudited)

FISCAL REFUNDYEAR INTEREST ON PRIOR YEAR SALE OF

ENDED JUNE 30, INVESTMENTS EXPENDITURES RENTALS ASSETS MISCELLANEOUS TOTAL

2014 $ 7,853.24 $ 2,331.37 $ 8,100.00 $ $ 7,746.22 $ 26,030.83

2013 5,443.05 13,537.09 9,300.00 74,132.68 102,412.82

2012 6,778.00 23,759.00 9,300.00 2,064.00 41,901.00

...... 2011 1,866.00 39,036.00 7,250.00 4,739.00 52,891.000......

2010 11,285.00 1,648.00 8,700.00 4,589.00 26,222.00

2009 16,868.00 8,036.00 8,700.00 169,681.00 23,885.00 227,170.00

2008 27,686.00 46,739.00 74,425.00

2007 42,676.00 (6,793.00) 35,883.00

2006 34,185.00 2,574.00 7,500.00 15,473.00 59,732.00

2005 7,839.00 5,750.00 7,381.00 20,970.00

Source: District records.

Revenue Capacity

-102 -

BETHLEHEM TOWNSHIP SCHOOL DISTRICTAssessed Value and Actual Value of Taxable Property,

Last Ten Fiscal Years(Unaudited)

ExhibitJ-6

Fiscal IOtalYear Direct Estimated ActualEnded Total Assessed Net Valuation School Tax (County EqualizedJune 30, Vacant Land Residential Farm Reg. Qfarm Commercial Industrial A(!artment Value Public Utilities a Taxable Rate b Value}

2014 6,086,400 449,860,400 40,892,300 1,896,628 21,179,700 6,990,400 526,905,828 913,069 527,818,897 $ 1.3822013 6,211,400 449,801,500 41,633,600 1,902,528 21,179,700 6,990,400 527,719,128 910,190 528,629,318 1.387 564,269,1732012 6,963,800 450,591,300 42,459,700 1,919,628 21,179,700 7,290,400 530,404,528 803,099 531,207,627 1.396 597,631,7252011 6,882,100 450,631,500 41,920,800 1,944,428 20,956,200 8,333,000 530,668,028 701,087 531,369,115 1.391 630,813,5952010 7,747,400 450,512,700 41,265,800 1,881,928 20,956,200 8,333,000 530,697,028 541,904 531,238,932 1.435 659,966,2642009 6,976,100 448,389,600 41,525,600 1,946,328 20,956,200 8,333,000 528,126,828 651,115 528,777,943 1.384 665,474,5832008 7,322,000 447,447,700 42,159,128 21,090,800 8,333,000 526,352,628 711,047 527,063,675 1.367 707,832,2192007 7,833,000 443,400,600 41,644,428 21,090,800 8,333,000 522,301,828 795,308 523,097,136 1.290 667,806,3702006 8,894,100 442,105,800 41,307,458 21,078,800 8,333,000 521,719,158 939,904 522,659,062 1.241 629,736,8452005 9,599,600 437,534,900 41,036,158 21,067,200 8,273,100 517,510,958 1,024,823 518,535,781 1.260 553,962,622

Source: District records Tax list summary & Municipal TaxAssessor

Note:Real property is required to be assessed at some percentage of true value (fair or market value) established by each county board of taxation.Reassessment occurs when the County Board of Taxation requests Treasury to order a reassessment

a Taxable Value of Machinery, Implements and Equipment of Telephone, Telegraph and Messenger System Companies

b Tax rates are per $100

BETHLEHEM TOWNSHIP SCHOOL DISTRICTDirect and Overlapping Property Tax Rates

Last Ten Fiscal Years(rate per $100 of assessed value)

(Unaudited)

Exhibit J-7Page 1 ofl

Bethlehem Townshi2 Board of Education Overla22ing Rates

North

GeneralHunterdon

Regional High Total Direct andObligation Total Direct School Overlapping Tax

Basic Rate a Debt Service b School Tax Rate District Townshil! Coun!l:c Rate

Fiscal Year EndedDecember 31,

2014 1.303 0.079 1.382 0.655 0.377 0.390 2.8042013 1.312 0.075 1.387 0.676 0.372 0.388 2.8232012 1.312 0.084 1.396 0.649 0.081 0.691 2.817

i-I 2011 1.391 1.391 0.679 0.353 0.426 2.8490 2010 1.366 0.069 1.435 0.634 0.348 0.431 2.848;+:..

2009 1.323 0.061 1.384 0.642 0.338 0.449 2.8132008 1.297 0.070 1.367 0.636 0.330 0.447 2.7802007 1.257 0.033 1.290 0.636 0.321 0.453 2.7002006 1.230 0.011 1.241 0.635 0.316 0.458 2.6502005 1.249 0.011 1.260 0.571 0.311 0.438 2.580

Source: District Records and Municipal Tax Collector

Note: NJSA 18A:7F-5d limits the amount that the district can submit for a general fund tax levy. The levy when added to othercomponents of the district's net budget may not exceed the prebudget year net budget by more than the spending growth limitationcalculated as follows: the prebudget year net budget increased by the cost of living or 2.5 percent, whichever is greater, plus anyspending growth adjustments.

a The district's basic tax rate is calculated from the A4F form which is submitted with the budget and the Net valuation taxable.b Rates for debt service are based on each year's requirements.c Municipality - Includes Open Space and Library Tax, County- Includes Open Space Taxes.

Exhibit J-8BETHLEHEM TOWNSHIP SCHOOL DISTRICTPrincipal Property Taxpayers,Current YearUnaudited

2014Taxable % of Total

Assessed Rank District NetValue [OQtional] Assessed Value

Transcontinental Gas $ 9,759,400.00 1 1.85%Columbia Gas 4,917,500.00 2 0.93%Asbury Graphite Mills 2,450,000.00 3 0.46%Valley View LLC 2,000,000.00 4 0.38%Taxpayer #1 1,231,800.00 5 0.23%WRCC, LLC 1,075,000.00 6 0.20%Taxpayer #2 1,013,600.00 7 0.19%Taxpayer #3 942,200.00 8 0.18%United Telephone Co. of N.J. 910,190.00 9 0.17%Taxpayer #4 905,400.00 10 0.17%

Total $ 25,205090 4.77%

Source: District CAFR & Municipal Tax Assessor

-105 -

BETHLEHEM TOWNSHIP SCHOOL DISTRICTTotal Local District School Property Tax Levies and Collections,Last Ten Fiscal YearsUnandited

Exhibit J-9

General Fund Collected within the Fiscal Year of the Le:n:8Fiscal Year Ended Taxes Levied for Percentage of

June 30, the Fiscal Year Amount Le:n:

2014 6,934,529.00 6,934,529.00 100.00%2013 6,969,379.00 6,969,379.00 100.00%2012 6,969,379.00 6,969,379.00 100.00%2011 7,057,879.00 7,057,879.00 100.00%2010 7,257,186.00 7,257,186.00 100.00%2009 6,996,333.00 6,996,333.00 100.00%

I 2008 6,833,256.00 6,833,256.00 100.00%......0 2007 6,570,438.00 6,570,438.00 100.00%0\

2006 6,484,991.00 6,484,991.00 100.00%2005 6,530,911.00 6,530,911.00 100.00%

Source: District records including the Certificate and Report of School Taxes (A4F form)

a - School taxes are collected by the Municipal Tax Collector. Under New Jersey State Statute, a municipalityis required to remit to the school district the entire property tax balance, in the amount voted upon or certifiedprior to the end of the school year.

Debt Capacity

-107 -

Exhibit J-IOBETHLEHEM TOWNSHIP SCHOOL DISTRICT

Ratios of Outstanding Debt by TypeLast Ten Fiscal Years (unaudited)

Business-TypeGovernmental Activities Activities

GeneralBond

Fiscal Year Anticipation Percentage ofEnded Obligation Certificates of Capital Notes PersonalJune 30, Bonds b Participation Leases (BANs) Capital Leases Total District Income a Per Capita a

2014 4,845,000 4,845,000 0.60% $1,233.452013 5,035,000 5,035,000 0.62% $1,290.032012 5,220,000 5,220,000 1.96% $1,314.862011 5,395,000 5,395,000 2.02% $1,356.212010 5,550,000 514,716 6,064,716 2.29% $1,534.59

...... 2009 5,685,000 514,716 6,199,716 2.24% $1,569.950 2008 5,815,000 514,716 6,329,716 2.33% $1,598.0100

2007 5,940,000 16,816.00 514,716 6,471,532 2.53% $1,630.932006 6,060,000 32,869.00 514,716 6,607,585 2.79% $1,674.082005 5,857,000 73,419.00 514,716 6,445,135 2.70% $1,628.382004 5,962,000 111,980.00 6,073,980 2.62% $1,531.13

Note: Details regarding the district's outstanding debt can be found in the notes to the financial statements.

a See Exhibit NJ J-14 for personal income and population data. These ratios are calculated using personal income andpopulation for the prior calendar year, if available.Per Capita calculation for 2013 and 2014 utilizes 2012 population data

Exhibit J-11BETHLEHEM TONWSHIP SCHOOL DISTRICTRatios of Net General Bonded Debt OutstandingLast Ten Fiscal YearsUnaudited

General Bonded Debt Outstanding

Percentage of

Fiscal Year General Net General Actual Taxable

Ended Obligation Bonded Debt Value a ofJune 30, Bonds Deductions Outstanding Property Per Capita b

2014 4,845,000 4,845,000 0.92% 1,233.452013 5,035,000 5,035,000 0.95% 1,281.822012 5,220,000 5,220,000 0.98% 1,314.862011 5,395,000 5,395,000 1.02% 1,356.212010 5,550,000 5,550,000 1.04% 1,534.592009 5,685,000 5,685,000 1.08% 1,569.952008 5,815,000 5,815,000 1.10% 1,598.012007 5,940,000 5,940,000 1.14% 1,630.932006 6,060,000 6,060,000 1.16% 1,674.082005 5,857,000 5,857,000 1.13% 1,628.38

Notes: Details regarding the district's outstanding debt can be found in the notes to the financial statements.a See Exhibit NJ J-6 for property tax data.b Population data can be found in Exhibit NJ J-14.

2014 and 2013 Per Capita calculations utilize 2013 Population data

-109 -

BETHLEHEM TOWNSHIP SCHOOL DISTRICTDirect and Overlapping Governmental Activities DebtAs of June 30, 2014Unaudited

Exhibit J-12

AuthorizedDebt

Outstanding

EstimatedPercentageApplicable

EstimatedShare of

OverlappingDebt

Governmental Unit

Debt repaid with property TaxesTownship of Bethlehem 6,411,139 100% 6,411,139

Other DebtNorth Hunterdon Regional School DistrictHunterdon County

2,815,00069,514,672

6.924%2.650%

194,9191,841,941

Subtotal, overlapping debt

Bethlehem Township School District Direct Debt

8,447,999

4,845,000

Total direct and overlapping debt 13,292,999

Sources: Township Finance Officer, Hunterdon County Finance Office

Note: Overlapping govemments are those that coincide, at least in part, with the geographic boundaries of the District.This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents andbusinesses situated within the District. This process recognizes that, when considering the District's ability to issue and repay long-term debt, theentire debt burden borne by the residents and businesses should be taken into account. However this does not imply thatevery taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping payment.

a For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed property values.Applicable percentages were estimated by determining the portion of another governmental unit's taxable value that is within thedistrict's boundaries and dividing it by each unit's total taxable value.

BETHLEHEM TOWNSHIP SCHOOL DISTRICTLegal Debt Margin Information

Last Ten Fiscal Years(Unaudited)

Legal Debt Margin Calculation for Fiscal Year 2013

201320122011

Average Equalized Valuation of Taxable Property

Debt Limit (3% of average equalization value)Total Net School Debt Applicable to Limit:

Legal Debt Margin

Exhibit J-13

EqualizedValuationBasis

s 552,932,867561,571,824599,056,390

1,713,561,081

$ 571,187,027

17,135,6114,845,00012,290,611

Fiscal Year

Debt Limit-Dec. 31, Prior Year $ 17,135,611 $ 17,896,054 $ 18,859,768 $ 19,571,321 $ 20,209,977 $ 20,327,580 $ 19,721,025 $ 18,395,792 $ 16,815,982 $ 15,301,341

Total Net School DebtApplicable to Limit 4,845,000 5,035,000 5,220,000 5,909,716 6,064,716 6,199,716 6,329,716 6,546,307 6,060,000 5,857,000Legal Debt Margin $ 12,290,611 $ 12,861,054 $ 13,639,768 $ 13,661,605 $ 14,145,261 $ 14,127,864 $ 13,391,309 $ 11,849,485 $ 10,755,982 $ 9,444,341

Net Debt as % of Debt Limit 28.27% 28.13% 27.68% 30.20% 30.01% 30.50% 32.10% 35.59% 36.04% 38.28%

Sources: State Equalized Valuations were obtained from the New Jersey Dept. of Treasury, Division of Taxation

Demographic and Economic Information

-112 -

BETHLEHEM TOWNSHIP SCHOOL DISTRICTDemographic and Economic StatisticsLast Ten Fiscal YearsUnaudited

Exhibit J-14

Per Capita UnemploymentYear Population a Personal Income b Personal Income C Rated

2014 3,928 283,330,568 72,131 6.90%2013 3,903 264,272,130 67,710 4.30%2012 3,970 266,200,410 67,053 4.20%2011 3,978 266,736,834 67,053 4.20%2010 3,952 264,993,456 67,053 4.30%2009 3,949 259,705,985 65,765 4.20%2008 3,961 276,347,087 69,767 2.30%2007 3,968 271,363,584 68,388 1.70%2006 3,947 255,315,642 64,686 2.00%2005 3,958 237,005,040 59,880 1.80%

Source:a Population information provided by the NJ Dept of Labor and Workforce Developmentb Personal income has been estimated based upon the municipal population and per capita personal income presentedC Per capita personal income is presented for Hunterdon County, published by the Regional Economic Information

System,Bureau of Economic Analysis, November 2012dUnemployment data provided by the NJ Dept of Labor and Workforce Development

-113 -

BETHLEHEM TOWNSHIP SCHOOL DISTRICTPrincipal Employers,

Current Year and Ten Years Ago

2014

EmployerRank

[Optional]

Percentage ofTotal MunicipalEmploymentEmployees

Information Unavailable

0.00%

Source: _

2004

Exhibit J-15

EmployeesRank

[Optional]

Districts may obtain principal employer information from various sources such as their local Chamber of Commerce, localEconomic Development Agency, or other creditable source for their municipality.

Percentage ofTotal MunicipalEmployment

0.00%

Operating Information

-115 -

Support Services:Student & Instruction Related Services 5.0 5.0 5.0 5.0 5.0 5.9 6.0 6.0 6.0 6.0General Administrative Services 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 5.0 5.0School Administrative Services 6.0 5.0 3.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0Business Administrative Services 3.0 3.0 1.0 3.0 3.0 3.0 3.0 3.0 2.0 2.0

r-> Plant operations and maintenance 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0r->0\ Pupil transportation 1.0 1.0 1.0 2.0 2.0 2.0 8.0 10.0 10.0 9.0

Other support services 4.5 4.0 4.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0

Total 88.5 88.5 83.0 95.8 96.0 94.8 96.0 98.0 95.0 93.0

Source: District Personnel Records

BETHLEHEM TOWNSHIP SCHOOL DISTRICTOperating Statistics,Last Ten Fiscal Years

Exhibit J-17

PUl!ilffeacher RatioAverage AverageDaily Daily % Change in Student

Fiscal Operating Cost Per Percentage Teaching Enrollment Attendance Average Daily AttendanceYear Enrollment Expenditures a Pupil Change Staffb Elementary (ADE) C (ADA) C Enrollment Percentage

2014 451 9,105,820 20,190 -0.79% 62 7.3:1 450.1 429.0 -1.75% 95.3%2013 455 9,259,356 20,350 17.48% 64 7.2:1 458.1 440.4 -8.07% 96.1%2012 512 8,869,039 17,322 -1.99% 62 8.3:1 498.3 479.2 -7.72% 96.2%2011 540 9,543,597 17,673 4.85% 68 8.0:1 540.0 525.1 -2.70% 97.2%2010 555 9,354,742 16,855 7.96% 68 8.2:1 555.0 540.8 -3.66% 97.4%2009 586 9,148,902 15,612 -1.33% 66 8.9:1 576.1 559.0 -3.03% 97.0%2008 606 9,588,724 15,823 19.90% 61 9.9:1 594.1 573.2 -3.02% 96.5%2007 613 8,089,816 13,197 3.13% 61 10:01 612.6 595.4 -0.18% 97.2%2006 633 8,100,272 12,797 7.93% 60 10.1 :1 613.7 591.5 1.44% 96.4%

..... 2005 629 7,457,567 11,856 11.65% 59 10.7:1 605.0 587.0 -5.44% 97.0%..... 2004 635 6,743,194 10,619 8.10% 57 11.2:1 639.8 600.2 6.55% 93.8%'I

Sources: District records

Note: Enrollment based on annual October district count.

a Operating expenditures equal total expenditures less debt service and capital outlay.b Teaching staff includes only full-time equivalents of certificated staff.c Average daily enrollment and average daily attendance are obtained from the School Register Summary (SRS).

Exhibit J-18BETHLEHEM TOWNSHIP SCHOOL DISTRICT

School Building InformationLast Ten Fiscal Years

District Buildin&: 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005ElementaryConley School

Square Feet 59,584 59,584 59,584 59,584 59,584 59,584 59,584 59,584 59,584 59,584Capacity (students) 393 393 393 393 393 393 393 393 393 393Enrollment 248 272 301 359 360 303 318 330 330 354

Hoppock SchoolSquare Feet 48,921 48,921 48,921 48,921 48,921 48,921 48,921 48,921 48,921 48,921Capacity (students) 352 352 352 352 352 352 352 352 352 352Enrollment 203 188 196 189 202 283 288 281 281 280

f-' Number of Schools at June 30, 2014f-'00 Elementary = 1

Middle School = 1

Source: District Facilities OfficeNote: Year of original construction is shown in parentheses. Increases in square footage and capacity are the result of alterations

and additions. Enrollment is based on the annual October district count.

Exhibit - J-19

BEmLEHEM TOWNSHIP SCHOOL DISTRICTGENERAL FUND

SCHEDULE OF REQUIRED MAINTENANCE FOR SCHOOL FACILITIESLAST TEN FISCAL YEARS

(U1U1udited)

UNDISTRIBUTED EXPENDITURES - REQUIREDMAINTENANCE FOR SCHOOL FACILITIES

School Facilities" 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Conley School $181,376.85 $100,397.01 $109,886.00 $179,599.00 $151,054.00 $113,018.00 $104,471.00 $133,946.00 $101,572.00 $128,353.00Hoppock School $103,005.34 $62,404.42 $89,907.00 $146,944.00 $123,590.00 $92,470.00 $85,476.00 $109,396.00 $73,765.00 $73,773.00Total School Facilities $284,382.19 $162,801.43 $199,793.00 $326,543.00 $274,644.00 $205,488.00 $189,947.00 $243,342.00 $175,337.00 $202,126.00

Other Facilities NONE NONE NONE NONE NONE NONE NONE NONE NONE NONE

Grand Total $284,382.19 $162,801.43 $199,793.00 $326,543.00 $274,644.00 $205,488.00 $189,947.00 $243,342.00 $175,337.00 $202,126.00

·School facilities as defmed under EFCFA.(N.J.A.C. 6A:26-1.2 and N.J.A.C. 6:24-1.3)

t--'Source: District Recordst--'

I.!)

J-20

BETHLEHEM TOWNSHIP SCHOOL DISTRICTrnSURANCESCHEDULE

JUNE 30, 2014UNAUDITED

Coverage DeductibleCOMMERCIAL PACKAGE POLICY - NJSBAIGProperty - Blanket Building and Contents, $16,896,113 $5,000Boiler/Machinery and Stated Equipment/Papers

Comprehensive General Liability:General Aggregate 6,000,000

Comprehensive Automobile Liability 6,000,000

UMBRELLA LIABILITY: NJSBAIGAggregate Limit 5,000,000Occurrence Limit 5,000,000

SCHOOL LEADERS PROFESSIONAL LIABILITY - NJSBAIGDirectors and officers Policy:

Limit Each Period 2,000,000 5,000Limit Each Claim 100,000 5,000

WORKER'S COMPENSATION- NJSBAIGStatutory Benefits IncludedEmployers Liability:

Each Accident 2,000,000 5,000Disease- Each Employee 2,000,000Disease- Each Aggregate Limit 2,000,000

PUBLIC EMPLOYEES' FAITHFUL PERFORMANCE BLANKETPosition Bond- Selective Insurance Company

Blanket Employee LimitTreasurer's BondBoard Secretary Bond

250,000200,000200,000

1,0001,0001,000

Source: School Business Administrator

-120 -

SINGLE AUDIT SECTION

SECTION-K

-121-

HODULIK & MORRISON, P.A.CERTIFIED PUBUC ACCOUNTANTS

REGISTERED MUNICIPAL ACCOUNTANTSPUBUC SCHOOL ACCOUNTANTS

1102 RARITAN AVENUE, P.O. BOX 1450IDGHLAND PARK, NJ 08904

(732) 393-1000(732) 393-1196 (FAX)

K-l

ANDREW G. HODULlK. CPA. RMA. PSAROBERT S. MORRISON. CPA. RMA. PSA

MEMBERS OF:AMERICAN INSTITUTE OF CPA'SNEW JERSEY SOCIETY OFCPA'S

REGISTERED MUNICIPAL ACCOUNTANTS OF NJ.JO ANN BOOS. CPA PSA

REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON

AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


Township of Bethlehem School DistrictCounty of Hunterdon, New Jersey

We have audited, in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and audit requirements asprescribed by the Division of Finance, Department of Education, State of New Jersey, thefinancial statements of the governmental activities, the business-type activities, each major fundand the aggregate remaining fund information of the Township of Bethlehem School District, inthe County of Hunterdon, State of New Jersey, as of and for the year ended June 30, 2014, andthe related notes to the financial statements, which collectively comprise the district's basicfinancial statements, and have issued our report thereon dated November 24, 2014.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Township ofBethlehem School District's internal control over financial reporting (internal control) todetermine the audit procedures that are appropriate in the circumstances for the purpose ofexpressing our opinions on the financial statements, but not for the purpose of expressing anopinion on the effectiveness of the Township of Bethlehem School District's internal control.Accordingly, we do not express an opinion on the effectiveness of the Township of BethlehemSchool District's internal control.

A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control such that there is a reasonablepossibility 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 acombination of deficiencies, in internal control that is less severe than a material weakness, yetimportant enough to merit attention by those charged with governance.

-122 -

Our consideration of the internal control over financial reporting was for the limited purposedescribed in the first paragraph of this section and would not necessarily identify all deficienciesin internal control that might be significant deficiencies or material weaknesses. Given theselimitations, during our audit we did not identify any deficiencies in internal control that weconsider to be material weaknesses. However, material weaknesses may exist that have not beenidentified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Township of Bethlehem SchoolDistrict's financial statements are free of material misstatement, we performed tests of itscompliance with certain provisions of laws, regulations, contracts and grant agreements,noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with thoseprovisions 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 requiredto be reported under Government Auditing Standards and audit requirements as prescribed by theDivision of Finance, Department of Education, State of New Jersey.

We noted other matters involving compliance and internal control over financial reporting that wehave reported to the Board of Education of the Township of Bethlehem School District in aseparate Auditors' Management Report on Administrative Findings dated November 24,2014.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide an opinion on the effectiveness ofthe entity's internal control or on compliance. This report is an integral part of an audit performedin accordance with Government Auditing Standards in considering the entity's internal controland compliance. Accordingly, this communication is not suitable for any other purpose.

JtMd! ~II~ I IIHODULIK &MORRISON, P.A.Certified Public AccountantsPublic School Accountants

Highland Park, New JerseyNovember 24,2014

-123 -

HODULIK & MORRISON,P.A.CERTIFIED PUBLIC ACCOUNTANTS

REGISTERED MUNICIPAL ACCOUNTANTS

PUBLIC SCHOOL ACCOUNTANTS

1102 RARITAN AVENUE, P.O. BOX 1450

IDGHLAND PARK, NJ 08904

(732) 393-1000(732) 393-1196 (FAX)

K-2

ANDREW G. HODULIK. CPA.RMA. PSAROBERT S. MORRISON. CPA. RMA. PSA

MEMBERS OF:AMERICAN INSTITUTE OF CPA'SNEW JERSEY SOCIETY OF CPA'S

REGISTERED MUNICIPAL ACCOUNTANTS OF NJ.JO ANN BOOS. CPA .PSA

REPORT ON COMPLIANCE FOR EACH MAJOR STATE PROGRAM;REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT

ON THE SCHEDULE OF EXPENDITURES OF STATE FINANCIALASSISTANCE REQUIRED BY NEW JERSEY OMB CIRCULAR 04-04


Township of Bethlehem School DistrictCounty of Hunterdon, New Jersey

Report on Compliance for Each Major Program

We have audited the compliance of the Township of Bethlehem School District, in the County ofHunterdon, State of New Jersey, with the types of compliance requirements described in the NewJersey Compliance Manual "State Grant Compliance Supplement" that could have a direct andmaterial effect on each of Township of Bethlehem School District's major state programs for theyear ended June 30, 2014. The Township of Bethlehem School District's major state programsare identified in the summary of auditor's results section of the accompanying schedule offindings and questioned costs.

Management's Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contractsand grants applicable to its state programs.

Auditor's Responsibility

Our responsibility is to express an opinion on compliance for each of the Township of BethlehemSchool District's major state programs based on our audit of the types of compliancerequirements referred to above. We conducted our audit of compliance in accordance withauditing standards generally accepted in the United States of America; the standards applicable tofinancial audits contained in Government Auditing Standards, issued by the Comptroller Generalof the United States; audit requirements as prescribed by the Division of Finance, Department ofEducation, State of New Jersey; and New Jersey OMB Circular 04-04, Single Audit Policy forRecipients of Federal Grants and State Aid. Those standards and New Jersey OMB's Circular04-04, require that we plan and perform the audit to obtain reasonable assurance about whethernoncompliance with the types of compliance requirements referred to above that could have adirect and material effect on a major state program occurred. An audit includes examining, on atest basis, evidence about the Township of Bethlehem School District's compliance with thoserequirements and performing such other procedures as we considered necessary in thecircumstances. -124 -

We believe that our audit provides a reasonable basis for our opinion on compliance for eachmajor state program. However, our audit does not provide a legal determination on the Townshipof Bethlehem School District's compliance.

Opinion on each Major State Program

In our opinion, the Township of Bethlehem School District complied, in all material respects,with the requirements referred to above that could have a direct and material effect on each of itsmajor state programs for the year ended June 30, 2014.

Report on Internal Control Over Compliance

The management of the Township of Bethlehem School District is responsible for establishingand maintaining effective internal control over compliance with the types of compliancerequirements referred to above. In planning and performing our audit of compliance, weconsidered the Township of Bethlehem School District's internal control over compliance withthe types of requirements that could have a direct and material effect on each major state programto determine the auditing procedures that are appropriate in the circumstances for the purpose ofexpressing an opinion on compliance for each major state program and to test and report oninternal control over compliance in accordance with NJOMB Circular 04-04, but not for thepurpose of expressing an opinion on the effectiveness of internal control over compliance.Accordingly, we do not express an opinion on the effectiveness of the Township of BethlehemSchool District's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a controlover compliance does not allow management or employees, in the normal course of performingtheir assigned functions, to prevent or detect and correct, noncompliance with a type ofcompliance requirement of a state program on a timely basis. A material weakness in internalcontrol over compliance is a deficiency, or combination of deficiencies, in internal control overcompliance, such that there is a reasonable possibility that material noncompliance with a type ofcompliance requirement of a state program will not be prevented, or detected and corrected, on atimely basis. A significant deficiency in internal control over compliance is a deficiency, or acombination of deficiencies, in internal control over compliance with a type of compliancerequirement of a state program that is less severe than a material weakness in internal control overcompliance, yet important enough to merit attention by those charged with governance.

Our consideration of the internal control over compliance was for the limited purpose describedin the first paragraph of this section and was not designed to identify all deficiencies in internalcontrol over compliance that might be significant deficiencies or material weaknesses. We did notidentify any deficiencies in internal control over compliance that we consider to be materialweaknesses. However, material weaknesses may exist that have not been identified.

Purpose of this Report

The purpose of this report on internal control over compliance is solely to describe the scope ofour testing of internal control over compliance and the results of that testing based upon therequirements ofNJOMB Circular 04-04. Accordingly, this communication is not suitable for anyother purpose.

~ddd r J!~ ;1/1.. , .HODULIK & MORRISON, P.A.Certified Public AccountantsPublic School Accountants

Highland Park, New JerseyNovember 24,2014 -125 -

BETHLEHEM TOWNSHIP SCHOOL DISTRICT Schedule - BSCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE

FOR THE FISCAL YEAR ENDED JUNE 30 2014

BALANCE BALANCEAT JUNE 30 2013 AT JUNE 30, 2014 MEMO

GAAP GAAP CUMULATIVEGRANT OR STATE AWARD GRANT (ACCOUNTS BUDGETARY CASH BUDGETARY (ACCOUNTS BUDGETARY TOTAL

STATE GRANTORJPROGRAM TITLE PROJECT NO. AMOUNT PERIOD RECEIVABLE) RECEIVABLE RECEIVED EXPENDITURES RECEIVABLEl RECEIVABLE EXPENDITIJRES

State Department of Education:Governmental Funds

Equalization Aid 13-495-034-5120-078 1,074,396 7/1/12-6/30/13 (105,825.00) 105,825.00 (1,074,396.00)Equalization Aid 14-495-034-5120-078 984,263 7/1/13-6/30/14 886,800.00 (984,263.00) (97,463.00) (984,263.00)Special Education Aid 14-495-034-5120-089 301,829 7/1/13-6/30/14 271,840.00 (301,829.00) (29,989.QO) (301,829.00)Special Education Aid 13-495-034-5120-089 308,659 7/1/12-6/30/13 (30,402.00) 30,402.00 (308,659.00)Transportation Aid 13-495-034-5120-014 101,075 7/1/12-6/30/13 (9,955.00) 9,955.00 (101,075.00)Transportation Aid 14-495-034-5120-014 81,797 7/1/13-6/30/14 74,300.00 (81,797.00) (7,497.00) (81,797.00)Security Aid 13-495-034-5120-084 38,176 7/1/12-6/30/13 {3,761.00) 3,761.00 (38,176.00)Security Aid 14-495-034-5120-084 37,641 7/1/13-6/30/14 34,642.00 (37,641.00) (2,999.00) (37,641.00)School Choice Aid 14-495-034-5120-068 45,356 7/1/13-6/30/14 40,858.00 (45,356.00) (4,498.00) (45,356.00)Adjustment Aid 14-495-034-5120-085 71,420 7/1/13-6/30/14 63,923.00 (71,420.00) {7,497.00) (71,420.00)Extraordinary Aid 14-100-034-5120-473 19,941 7/1/13-6/30/14 (19,941.00) (19,941.00) (19,941.00)Extraordinary Aid 13-100-034-5120-473 51,836 7/1/12-6/30/13 (51,836.00) 51,836.00 (51,836.00)Nonpublic School Transportation 13-495-034-5120-014 4,719 7/1/12-6/30/13 (4,718.60) 4,718.60 (4,719.00)T.P.A.F. Social Security Aid 14-495-034-5095-002 280,212 7/1/13-6/30/14 266,453.34 (280,212.28) (13,758.94) (280,212.28)T.P.AF. Social Security Aid 13-495-034-5095-002 278,480 7/1/12-6/30/13 (14,801.52) 14,801.52 (278,480.00)

"""'T.P.AF. Pension Contributions 14-495-034-5095-006 147,880 7/1/13-6/30/14 147,880.00 (147,880.00) (147,880.00)

tv T.P.A.F. Post Retirement Medical 14-495-034-5095-00 I 263,869 7/1/13-6/30/14 263,869.00 (263,869.00) (263,869.00)0\ T.P.AF. Non-Contributory Insurance 14-495-034-5095-007 13,053 7/1/13-6/30/14 13,053.00 (13,053.00) (13,053.00)

Enterprise FundsNational School LunchProg. (State Share) 14-100-010-3350-023 1,023 7/1/13-6/30/14 832.93 (1,022.77) (189.84) (1,022.77)

National School LunchProg. (State Share) 13-100-010-3350-023 1,576 7/1/12-6/30/13 (27.59l 100.68 (73.09l (1,576.00l

Total State Financial Assistance ~19!547.711 (201,779.00l 2~85,851.07 (2,248,357.l4l (13,948.78l (169!884.00l (4,107~01.05l

Less:T.P.A.F. Pension Contributions (147,880.00)T.P.AF. Post Retirement Medical (263,869.00)T.P.AF. Non-Contributory Insurance (13,053.00l

State Expenditures Subject to Single Audit (1,823,555.l4lNote: See Accompanying Notes to Schedules of Financial Assistance.

K-SPage 1 of2

BETHLEHEM TOWNSHIP SCHOOL DISTRICTNOTES TO THE SCHEDULES OF FINANCIAL ASSISTANCE

JUNE 30, 2014

NOTE 1. GENERAL

The accompanying schedules of expenditures of awards and financial assistanceinclude state award activity of the Board of Education of the Bethlehem TownshipSchool District. The Board of Education is defined in Note l(A) to the Board'sgeneral-purpose financial statements (GASB 34 Model- basic financial statements).All state awards received directly from state agencies, as well as state assistancepassed through other government agencies are included on the schedule ofexpenditures of state financial assistance.

NOTE 2. BASIS OF ACCOUNTING

The accompanying schedules of expenditures of financial assistance are presented onthe budgetary basis of accounting. These bases of accounting are described in Note 1to the Board's basic financial statements. The information in this schedule ispresented in accordance with the requirements of OMB Circular A-B3, Audits ofStates, Local Governments and Non-Profit Organizations. Therefore, some amountspresented in this schedule may differ from amounts present in, or used in thepreparation of, the basic financial statements.

NOTE 3. RELATIONSHIP TO GENERAL PURPOSE FINANCIAL STATEMENTS

The basic financial statements present the general fund and special revenue fund on aGAAP basis. Budgetary comparison statements or schedules (RSI) are presented forthe general fund and special revenue fund to demonstrate finance-related legalcompliance in which certain revenue is permitted by law or grant agreement to berecognized in the audit year, whereas for GAAP reporting, revenue is not recognizeduntil the subsequent year or when expenditures have been made.

The general fund is presented in the accompanying schedules on the modified accrualbasis with the exception of the revenue recognition of the last state aid payment forcategorical aid and the payment of extraordinary aid. These payments are required bystate statute to be recorded as revenues on the budgetary basis, but do not meet thecriteria set forth in GASB Statement No. 33 for revenue recognition in financialstatements of the current period. For GAAP purposes, that payment is not recognizeduntil the subsequent budget year due to the state deferral and recording of the laststate aid payment in the subsequent year. The special revenue fund accompanyingschedules agree with amounts reported in the Board's general-purpose financialstatements. The general-purpose financial statements present the special revenuefund on both a GAAP basis and a budgetary basis. The special revenue fund ispresented in the accompanying schedules on the grant accounting budgetary basis,which recognizes encumbrances as expenditures and also recognizes the relatedrevenues, whereas the GAAP basis does not.

See Note 1 for a reconciliation of the budgetary basis to the GAAP basis ofaccounting for the special revenue fund. Award and financial assistance revenues arereported in the Board's general-purpose financial statements on a GAAP basis aspresented on the following page:

-127 -

K-5Page 2 of2

BETHLEHEM TOWNSHIP SCHOOL DISTRICTNOTES TO THE SCHEDULES OF FINANCIAL ASSISTANCE

JUNE 30, 2014

Federal State Total

General Fund $ 00.00 $ 2,283,874.88 $ 2,283,874.88Special Revenue Fund 219,168.74 0.00 219,168.74Food Service Fund 19,598.86 1,095.87 20,694.73

Total Assistance $ 2382767.60 $ 222842970.75 $ 2252327387.35

NOTE 4. RELATIONSHIP TO STATE FINANCIAL REPORTS

Amounts reported in the accompanying schedules agree with the amounts reported inthe related state financial reports.

NOTE 5. OTHER

TPAF Post-Retirement Medical, Pension and Non-Contributory Insurance PremiumContributions represent the amount paid by the state on behalf of the District for theyear ended June 30, 2014. These amounts are published by the State Division ofPensions annually, and the NJDOE has advised that these In-Kind programs are notto be subject to the state single audit mandate, and no audit procedures are required tobe applied to these amounts. TPAF Social Security Contributions represents theamount reimbursed by the state for the employer's share of social securitycontributions for TPAF members for the year ended June 30, 2014.

-128 -

BETHLEHEM TOWNSHIP SCHOOL DISTRICT K-6SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2014

Section 1 - Summary of Auditor's Results

Financial Statements

Type of auditor's report issued: Unmodified

Internal Control over financial reporting:

1)Material weakness(es) identified? Yes----- X No--....;;..;;;..--2) Significant deficiencies identifed that

are not considered to be material weaknesses? Yes----- __ ..;;X-=-- __ No

Noncompliance material to basic financialstatements noted? Yes----- __ ..;;X-=-- __ No

Federal Awards-NOT APPLICABLE, FEDERAL SINGLE AUDIT NOT REQUIRED

Internal Control over major programs:

1)Material weakness( es) identified? Yes-_--- _____ No

2) Significant deficiencies identifed thatare not considered to be material weaknesses? Yes----- No-----

Type of auditor's report issued on compliance formajor programs:

Any audit findings disclosed that are required to be reportedin accordance with section.51 O(a) of Circular A-133? Yes----- _____ No

Identification of major programs:

CFDA Number(s) Name of Federal Program or Cluster

Dollar threshold used to distinguish between Type A and B programs:

Auditee qualified as low-risk auditee? Yes----- __ ..;;X-=-- __ No

-129 -

BETHLEHEM TOWNSHIP SCHOOL DISTRICT K-6SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2014

Section 1 - Summary of Auditor's Results (cont'd)

State Awards

Dollar threshold used to distinguish between Type A and B programs: $300,000.00

Auditee qualified as low-risk auditee? Yes X No

Type of auditor's report issued on compliance formajor programs: Unmodified

Internal Control over major programs:

1)Material weakness(es) identified? Yes X No

2) Significant deficiencies identifed thatare not considered to be material weaknesses? Yes X No

Any audit findings disclosed that are required to be reportedin accordance with NJOMB Circular Letter 04-04? Yes X No

Identification of major programs:

GMIS Number(s) Name of State Program

14-495-034-5120-078STATEAID-PUBLIC CLUSTEREqualization Aid

14-495-034-5120-089 Special Education Categorical Aid14-495-034-5120-084 Security Aid14-495-034-5120-085 Adjustment Aid14-495-034-5120-068 School Choice Aid

14-495-034-5095-002 TPAF Social Security Contributions

Section II - Financial Statement Findings

NONE

Section III - Federal Awards and State Financial Assistance Findings and Ouestioned Costs

NONE

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K-7

BETHLEHEM TOWNSHIP SCHOOL DISTRICTSUMMARY SCHEDULE OF PRIOR YEAR AUDIT FINDINGS

AND QUESTIONED COSTS AS PREPARED BY MANAGEMENTFOR THE FISCAL YEAR ENDED JUNE 30, 2014

Not Applicable- No prior year findings or questioned costs.

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SCHOOL DISTRICT OF BETHLEHEM TOWNSHIP - … · Organizational Chart Roster of Officials ... Notes tothe Financial Statements ... data are compiled to a119w for tlw