BYRON-BERGEN CENTRAL SCHOOL DISTRICT

FINANCIAL STATEMENTS

JUNE 30, 2017

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Table of Contents

June 30, 2017

Independent Auditors’ Report

Management’s Discussion and Analysis

Financial Statements Statement of Net Position Statement of Activities
Balance Sheet – Governmental Funds
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in
Fund Balances to the Statement of Activities
Statement of Revenues, Expenditures, and Changes in Fund Balance Budget (Non-GAAP) and Actual - General Fund
Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position Notes to Financial Statements

Required Supplementary Information (Unaudited)
Schedule of the District’s Proportionate Share of the Net Pension Position – New York State Teachers’ Retirement System
Schedule of District Contributions – New York State Teachers’ Retirement System
Schedule of the District’s Proportionate Share of the Net Pension Position – New York State and Local Employees’ Retirement System
Schedule of District Contributions – New York State and Local Employees’ Retirement System Schedule of Funding Progress – Postemployment Benefit Plan

Supplementary Information
Schedule of Change from Original to Final Budget and Calculation of Unrestricted Fund Balance Limit – General Fund
Schedule of Capital Project Expenditures
Schedule of Expenditures of Federal Awards and related notes

Reports on Federal Award Programs
Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
Independent Auditors' Report on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by the Uniform Guidance
Schedule of Findings and Questioned Costs

INDEPENDENT AUDITORS’ REPORT

The Board of Education
Byron-Bergen Central School District

We have audited the accompanying financial statements of the governmental activities, each major fund, and the remaining fund information of Byron-Bergen Central School District (the District) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the remaining fund information of the District as of June 30, 2017, and the respective changes in financial position and budgetary comparison for the general fund for the year then ended in accordance 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 management’s discussion and analysis and other required supplementary information, as listed in the table of contents, be presented to supplement the financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The accompanying supplementary information as listed in the table of contents, including the schedule of expenditures of federal awards required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the financial statements.

The accompanying supplementary information including the schedule of expenditures of federal awards is the responsibility of management and is derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying supplementary information including the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated September 28, 2017 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

September 28, 2017

2

Byron-Bergen Central School District Management’s Discussion and Analysis June 30, 2017 Unaudited

Introduction

Management’s Discussion and Analysis (MD&A) of Byron-Bergen Central School District (the District) provides an overview of the District’s financial activities and performance for the year ended June 30, 2017. The information contained in the MD&A should be considered in conjunction with the information presented as part of the District’s financial statements that follow. This MD&A, the financial statements and notes thereto are essential to a full understanding of the District’s financial position and results of operations. The District’s financial statements have the following components: (1) government-wide financial statements; (2) governmental fund financial statements; (3) reconciliations between the government-wide and governmental fund financial statements; (4) agency fund statements; (5) notes to the financial statements; and (6) supplementary information.

The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances in a manner similar to a private-sector business. The statement of net position presents information on all of the District’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the net difference reported as net position. The statement of activities presents information showing how the District’s net position changed during each year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in the statement for some items that will result in cash flows in future periods. The government-wide financial statements present information about the District as a whole. All of the activities of the District are considered to be governmental activities.

Governmental fund financial statements focus on near-term inflows and outflows of resources, as well as on balances of resources available at the end of the year. Such information may be useful in evaluating the District’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide statements, it is useful to compare the information presented for governmental activities in the government-wide financial statements. By doing so, the reader may better understand the long-term impact of the District’s near-term financing decisions. The reconciliation portion of the financial statements facilitates the comparison between governmental funds and governmental activities.

Agency funds are used to account for resources held for the benefit of parties outside the District. Agency funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the District’s programs. The notes to the financial statements provide additional information that is essential for a full understanding of the government-wide and governmental fund financial statements.

Supplementary information further explains and supports the financial statements and includes information required by generally accepted accounting principles and the New York State Department of Education.

3

Change Condensed Statement of Net Position	2017	2016	$	%

Current assets Net pension asset Capital assets
Total assets

$	7,763,000 $ -
28,588,000

36,351,000

7,539,000 $ 4,611,000
29,198,000

41,348,000

224,000 (4,611,000)
(610,000)

(4,997,000)

3.0% -100.0%
-2.1%

-12.1%

Deferred outflows of resources

Long-term liabilities Other liabilities
Total liabilities

Deferred inflows of resources

5,287,000

18,505,000 2,300,000 20,805,000

269,000

2,159,000

20,772,000 2,140,000 22,912,000

1,733,000

3,128,000	144.9%

(2,267,000)                 -10.9% 160,000                     7.5% (2,107,000)                   -9.2%

(1,464,000)	-84.5%

Net position

Net investment in capital assets Restricted
Unrestricted

Total net position

16,304,000 4,185,000 75,000
$	20,564,000 $

14,709,000 3,696,000 457,000
18,862,000 $

1,595,000                   10.8% 489,000                   13.2% (382,000)                 -83.6%
1,702,000	9.0%

Net position amounted to $20,564,000 and $18,862,000 as of June 30, 2017 and 2016, respectively. The largest portion of the District’s net position reflects its investment in capital assets consisting of land, buildings and improvements, and furniture and equipment, less outstanding debt used to acquire those assets. The District uses capital assets to provide services to students; consequently, these assets are not available for future spending.

The District’s net position includes resources that are subject to external restrictions on how they may be used. These reserves are set aside for specific purposes governed by statutory law, real property tax law, and commissioner’s regulations and include the retirement contribution reserve, restricted to fund contributions paid by the District to the New York State and Local Employees’ Retirement System (ERS); the capital reserve, which is dedicated for future renovations as approved by the District’s voters; and an employee benefit accrued liability reserve, which must be used to pay future accumulated vacation and sick time. Other restricted resources include debt service, workers’ compensation, unemployment insurance, liability, insurance, and tax certiorari reserves.

Total assets decreased by $4,997,000 ($834,000 decrease in 2016) primarily as a result of the New York State Teachers’ Retirement System (TRS) change in actuarial assumptions resulting in a net pension liability. In 2016, the District’s proportionate share of the net pension position resulted in an asset of $4,611,000 compared to a liability of $473,000 in 2017. This change was largely caused by a decrease in the discount rate from 8.0% to 7.5%. Capital assets decreased $610,000 ($917,000 decrease in 2016) as a result of current year depreciation in excess of capital spending. Current assets increased by $224,000 ($369,000 increase in 2016) primarily due to positive operating results and timing of payments.

Long-term liabilities decreased by $2,267,000 ($1,299,000 decrease in 2016) primarily due to current year principal payments of $2,255,000 on outstanding bonds. The increase in other liabilities of $160,000 (decrease of $543,000 in 2016) is primarily due to an increase in outstanding trade payables due to timing of pyaments at June 30, 2017 offset by a decrease in required contributions to the State pension plans.

4

Changes in deferred outflows and deferred inflows of resources reflect changes in pension activity at the State level which are required to be reflected on the District’s financial statements. Deferred outflows of resources include contributions required to be paid by the District to the State pension systems after the measurement date, and as such are not included in the current net pension position. Deferred outflows of resources and deferred inflows of resources also reflect variances from actuarial assumptions, actual results of investment earnings compared to projected earnings, and changes of assumptions. The District has no control or authority over these transactions.

Condensed Statement of Activities Revenues
Program revenues Charges for services
Operating grants and contributions General revenues
Property and sales taxes State aid
Other

Total revenue Expenses
Instruction Support services
General support Pupil transportation Food service
Interest and other Total expenses

Change in net position

Net position - beginning

Net position - ending

2017

$	 194,000 $ 1,307,000

8,563,000 13,233,000 221,000 23,518,000

16,194,000

3,179,000 1,582,000 467,000 394,000 21,816,000

1,702,000

18,862,000

$	20,564,000 $

2016

712,000 $ 1,257,000

8,530,000 12,572,000 190,000 23,261,000

14,482,000

3,140,000 1,382,000 465,000 454,000 19,923,000

3,338,000

15,524,000

18,862,000 $

Change

$	%

(518,000)              -72.8% 50,000                  4.0%

33,000                  0.4% 661,000                  5.3% 31,000                 16.3% 257,000                  1.1%

1,712,000	11.8%

39,000                  1.2% 200,000                 14.5% 2,000                  0.4% (60,000)              -13.2% 1,893,000                  9.5%

(1,636,000)	-49.0%

3,338,000	21.5%

1,702,000	9.0%

District revenues increased $257,000 in 2017 (4.8% or $1,072,000 increase in 2016). State aid increased $661,000 ($588,000 or 4.9% increase in 2016) as a result of the phase-out of the gap elimination adjustment which increased foundation aid and additional BOCES aid. Charges for services decreased $518,000 ($415,000 or 139.7% increase in 2016) due to the District no longer providing additional transportation services to another school district in 2017 and decreased tuition billings to other school districts.

Total expenses increased $1,893,000 ($671,000 or 3.5% increase in 2016). Payroll increased $360,000 or 3.7% while benefits, which include actuarially-determined pension expense, health insurance, other postemployment benefits, and employee sick and vacation time, increased by $1,009,000. Payroll increased primarily because of raises as stipulated in bargaining unit contracts. Benefits increased primarily due to changes of assumptions for TRS and ERS pension systems resulting in $1,068,000 of additional expense in 2017 compared to 2016.

5

Financial Analysis of the District’s Funds

Total fund balances for the governmental funds increased by $62,000 from $5,416,000 to $5,478,000 as follows:

	Total fund revenue increased $252,000 or 1.1% (increase of $1,074,000 or 4.8% in 2016) and total fund expenditures increased by $1,083,000 or 4.8% (increase of $837,000 or 3.8% in 2016). The overall revenue increase is due to an increase in State aid, offset by a decrease in charges for services as previously mentioned. The overall increase in expenditures is due to the increase in salary expenditures as well as increases in technology purchases and capital expenditures.
	The general fund experienced an increase in fund balance of $126,000 compared to a $798,000 increase in 2016.
	The capital projects deficit fund balance increased by $92,000 in 2017, due to an increase in bus purchases compared to 2016. Revenue is only recognized when bond anticipation notes are redeemed from general fund appropriations. The school lunch fund showed positive operating results in 2017, generating a $27,000 increase in fund balance ($35,000 increase in 2016).

General Fund Budgetary Highlights

The revenue budget for 2017 was $22,268,000, with actual revenues amounting to $22,088,000, which is under budget by $180,000 or 0.8%. This was primarily caused by less State sources received than budgeted.

Actual expenditures and carryover encumbrances were less than the final budget by $1,235,000 or 5.3%. The difference is attributable to many factors and many unknown items at the time the budget is prepared. Due to the property tax cap requirements, the District adjusted accordingly and was able to generate savings in employee benefits, instructional media, and pupil transportation.

Capital Assets

	2017	2016	

Land

Construction in progress

Buildings and improvements

$	139,000 $ 100,000
42,435,000

139,000 -
42,366,000

Machinery and equipment	           3,364,000	3,052,000 

46,038,000	45,557,000

Accumulated depreciation	        (17,450,000)	(16,359,000) 

$	28,588,000 $	29,198,000

The investment in capital assets of $658,000 during the year was offset by current year depreciation of $1,268,000.

Debt

At June 30, 2017, the District had $11,835,000 in bonds outstanding, with $1,425,000 due within one year ($14,090,000 outstanding at June 30, 2016). Outstanding compensated absences payable were $5,152,000, with $882,000 expected to be paid within one year ($5,142,000 outstanding at June 30, 2016).

Additional information on the District’s long-term liabilities can be found in the notes to the financial statements.

6

Current Financial Issues and Concerns

School districts in New York State are impacted by the political pressures imposed on officials in funding of education. Year to year changes in funding levels and State aid formulas complicate the planning process for schools.

The District will continue to mitigate the impact of rising costs of education on the overall budget, including using reserve funds as permitted by law to lessen their budgetary impact. The property tax levy cap further emphasizes the importance of using reserves judiciously and implementing creative cost cutting measures. These issues and concerns require management to plan carefully and prudently to provide the educational resources necessary to meet student needs.

Contacting the District’s Financial Management

This financial report is designed to provide our citizens, taxpayers, and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact Lori Prinz, School Business Administrator, Byron-Bergen Central School District, 6917 W. Bergen Road, Bergen, New York 14416-9747.

7

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Statement of Net Position

June 30, 2017

(With comparative totals as of June 30, 2016)	2017	2016

Assets Cash
Due from other governments State and federal aid receivable Due from fiduciary funds Inventory
Net pension asset Capital assets (Note 5)

$	5,411,262 $ 745,882 584,743 997,366
23,899 -
46,038,560

5,483,606 861,473 510,017 655,703 28,895 4,610,808 45,557,333

Accumulated depreciation Total assets

Deferred Outflows of Resources Defeasance loss
Deferred outflows of resources related to pensions Total deferred outflows of resources

Liabilities Accounts payable Accrued liabilities
Due to retirement systems Unearned revenue
Bond anticipation notes Long-term liabilities
Due within one year: Bonds
Compensated absences Due beyond one year:
Bonds and related premiums Compensated absences
Net pension liability

Other postemployment benefits Total liabilities

Deferred Inflows of Resources
Deferred inflows of resources related to pensions

(17,450,238) 36,351,474

29,070 5,258,029 5,287,099

414,729 156,186 1,016,035 25,495 687,350

1,425,000 882,000

10,639,132 4,270,000 1,118,241 170,436 20,804,604

269,616

(16,359,634) 41,348,201

43,606 2,115,644 2,159,250

155,617 192,529 1,145,432 32,899 614,067

2,255,000 771,000

12,120,794 4,371,000 1,131,975 122,128 22,912,441

1,732,912

Net Position
Net investment in capital assets Restricted
Unrestricted
Total net position

16,303,844 4,185,452 75,057
$	20,564,353 $

14,708,532 3,696,636 456,930 18,862,098

See accompanying notes.	8

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Statement of Activities

For the year ended June 30, 2017

(with summarized comparative totals for June 30, 2016)

Program Revenues	Net (Expense) Revenue Operating

Charges for Functions/Programs	Expenses	Services

Grants and
Contributions	2017	2016

Governmental activities General support Instruction
Pupil transportation Community service Interest expense School food service

$        3,178,627      $ 16,193,427
1,582,397 15,221 379,074 467,094
$	21,815,840	$

- $ 30,268
---
163,996 194,264 $

-987,777 -
--
319,542 1,307,319

$	 (3,178,627) $ (15,175,382)
(1,582,397) (15,221) (379,074)
16,444 (20,314,257)

(3,139,722) (13,272,262) (1,111,498) (9,658) (444,689)
23,300 (17,954,529)

General revenues

Real property and sales taxes Miscellaneous
State aid

Total general revenues

Change in net position

8,562,667 220,656 13,233,189 22,016,512

1,702,255

8,529,891 190,401 12,572,439 21,292,731

3,338,202

Net position - beginning Net position - ending

18,862,098
$	20,564,353 $

15,523,896 18,862,098

See accompanying notes.	9

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Balance Sheet - Governmental Funds

June 30, 2017

(With summarized comparative totals as of June 30, 2016)

Capital General	Projects

Special        School Aid          Lunch

Total Governmental Funds
2017	2016

Assets Cash
Due from other governments State and federal aid receivable Due from other funds, net Inventory
Total assets

$	5,088,982 745,882 331,357 820,566
-$	6,986,787

$ 115,112 --
407,922 -
$ 523,034

$     28,579 -
253,386 --
$ 281,965

$ 178,589 --
43,665 23,899
$ 246,153

$ 5,411,262 745,882 584,743 1,272,153 23,899
$ 8,037,939

$ 5,483,606 861,473 510,017 783,997 28,895
$ 7,667,988

Liabilities and Fund Balances Accounts payable
Accrued liabilities
Due to retirement systems Due to other funds, net Unearned revenue
Bond anticipation notes Total liabilities

$       327,097 137,477 1,016,035
-20,171 -
1,500,780

$	85,100 ----
687,350 772,450

$	1,854 --
274,787 5,324
-281,965

$       678 $      414,729 4,209           141,686
-	1,016,035 -           274,787 -            25,495 -           687,350
4,887	2,560,082

$      155,617 175,329 1,145,432 128,294 32,899 614,067 2,251,638

Fund Balances Nonspendable:
Inventory Restricted:
Debt service Liability
Unemployment insurance Capital
Employee benefit accrued liability Insurance
Retirement contribution Tax certiorari
Workers' compensation Assigned:

-

23,991 5,730 92,654 2,051,401 1,481,987 2,836 301,426 150,336 75,091

-	-	23,899

-	-	--	-	--	-	--	-	--	-	--	-	--	-	--	-	--	-	-

23,899

23,991 5,730 92,654 2,051,401 1,481,987 2,836 301,426 150,336 75,091

28,895

23,972 100,116 94,160 1,645,065 1,304,061 2,836 301,182 150,214 75,030

Designated for subsequent year's expenditures
Other purposes Unassigned
Total fund balances (deficit)
Total liabilities and fund balances $

312,877 130,137 857,541 5,486,007 6,986,787

-                  --                  -
(249,416)                 -(249,416)                 -
$ 523,034 $ 281,965

-217,367 -241,266
$ 246,153

312,877 347,504 608,125 5,477,857
$ 8,037,939

300,000 636,737 754,082 5,416,350
$ 7,667,988

See accompanying notes.	10

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position

June 30, 2017

Total fund balances - governmental funds	$	5,477,857

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and therefore are

not reported as assets in governmental funds.	28,588,322

The District's proportionate share of the net pension liabilities as well as pension-related deferred outflows and deferred inflows of resources are recognized in the government-wide statements and include:
Deferred outflows of resources related to pensions Net pension liability
Deferred inflows of resources related to pensions

5,258,029 (1,118,241)
(269,616)	3,870,172

Defeasance losses associated with bond refundings are recognized as deferred outflows of

resources in the government-wide statements.	29,070

Certain liabilities are not due and payable currently and therefore are not reported as liabilities in the governmental funds. These liabilities are:
Bonds and related premiums Accrued interest Compensated absences
Other postemployment benefits

(12,064,132) (14,500) (5,152,000)
(170,436)	(17,401,068)

Net position - governmental activities	$	20,564,353

See accompanying notes.	11

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds

For the year ended June 30, 2017

(with summarized comparative totals for June 30, 2016)

Capital General	Projects

Special        School Aid           Lunch

Total Governmental Funds
2017	2016

Revenues
Real property taxes Real property tax items Nonproperty taxes Charges for services
Use of money and property
Sale of property and compensation for loss Miscellaneous
State sources Federal sources Sales
Total revenues

$ 6,575,208 $ 1,956,513
30,946 13,498 8,587 8,578 220,175 13,233,189 41,508
-22,088,202

- $	--	--	--	-
70	--	--          10,099 -         111,745 -         824,425 -	-
70	946,269

$	----
16 -
3,787 58,857 260,685 160,209 483,554

$ 6,575,208 1,956,513 30,946 13,498 8,673
8,578 234,061 13,403,791 1,126,618 160,209 23,518,095

$ 6,545,217 1,951,612 33,062 542,408 7,796
5,055 274,709 12,737,493 1,017,581 150,807 23,265,740

Expenditures General support Instruction
Pupil transportation Community service Employee benefits Debt service
Principal Interest
Cost of sales Capital outlay
Total expenditures

Excess revenues (expenditures)

Other financing sources (uses) BANs redeemed from appropriations Operating transfers
Total other financing sources (uses)

Net change in fund balances

2,555,797 11,448,559 1,135,320 15,221 3,816,695

2,466,217 423,900
--
21,861,709

226,493

-(100,000) (100,000)

126,493

--
303,724 --

---
100,000 403,724

(403,654)

211,217 100,000 311,217

(92,437)

-893,697 -
-52,572

----
946,269

-

---

-

94,568 ---
74,561

--
286,974 -456,103

27,451

---

27,451

2,650,365 12,342,256 1,439,044 15,221 3,943,828

2,466,217 423,900 286,974 100,000 23,667,805

(149,710)

211,217 -211,217

61,507

2,535,148 11,472,845 1,135,438 9,658 4,082,686

2,418,400 489,615 288,362 152,865 22,585,017

680,723

228,400 -228,400

909,123

Fund balances (deficit) - beginning Fund balances (deficit) - ending

5,359,514 $ 5,486,007

(156,979)
$ (249,416) $

-      213,815 - $ 241,266

5,416,350 $ 5,477,857

4,507,227 $ 5,416,350

See accompanying notes.	12

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities

For the year ended June 30, 2017

Total net change in fund balances - governmental funds	$	61,507

Amounts reported for governmental activities in the statement of activities are different because:

Capital outlays are reported in governmental funds as expenditures. In the statement of activities, the cost of the assets is allocated over estimated useful lives as depreciation expense.
This is the amount by which depreciation expense exceeds capital outlays.	(609,377)

Pension expense is recognized when paid on the fund statement of revenues, expenditures, and changes in fund balances and actuarially determined on the statement of activities. These differences are:
2017 TRS and ERS contributions 2017 ERS accrued contribution 2016 ERS accrued contribution 2017 TRS net pension expense 2017 ERS net pension expense

1,206,690 106,887
(106,887) (784,221)
(413,862)	8,607

Payments of long-term liabilities are reported as expenditures in the governmental funds and as a

reduction of debt in the statement of net position.	2,255,000

In the statement of activities, certain expenses are measured by the amounts earned during the year. In the governmental funds these expenditures are reported when paid. These differences are:
Amortization of defeasance loss Amortization of bond premiums Interest
Other postemployment benefits Compensated absences

(14,536) 56,662
2,700 (48,308)
(10,000)	(13,482)

Change in net position - governmental activities	$	1,702,255

See accompanying notes.	13

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Statement of Revenues, Expenditures, and Changes in

Fund Balance Budget (Non-GAAP) and Actual - General Fund

For the year ended June 30, 2017

Budgeted Amounts

Actual (Budgetary

Variance with Final Budget

Original	Final	Basis)	Encumbrances	Over/(Under) Revenues
Local sources

Real property taxes Real property tax items Nonproperty taxes Charges for services
Use of money and property
Sale of property and compensation for loss Miscellaneous
State sources Federal sources
Total revenues

$	6,577,337 $ 1,885,000
25,000 44,910 26,000 -151,000
13,533,791 25,000 22,268,038

6,577,337 $ 1,885,000
25,000 44,910 26,000 -151,000
13,533,791 25,000 22,268,038

6,575,208 1,956,513 30,946 13,498 8,587 8,578 220,175 13,233,189 41,508 22,088,202

$	 (2,129) 71,513
5,946 (31,412) (17,413)
8,578 69,175
(300,602) 16,508
(179,836)

Expenditures General support
Board of education Central administration Finance
Staff

Central services Special items
Instruction

Instruction, administration, and improvement Teaching - regular school
Programs for children with handicapping conditions Occupational education
Instructional media Pupil services
Pupil transportation Community service Employee benefits Debt service
Principal Interest
Total expenditures

Excess revenues (expenditures)

31,906 235,715 367,178 42,432 1,759,412 417,675

592,440 5,627,701 2,652,971 948,840 793,245 1,165,588 1,360,947 9,355 4,294,000

2,466,500 445,450 23,211,355

(943,317)

31,907 218,211 363,184 29,945 1,774,392 396,328

554,718 5,722,350 2,547,264 918,942 1,282,055 1,153,773 1,390,975 15,221 3,935,140

2,466,500 425,450 23,226,355

(958,317)

24,163 216,168 340,711 29,945 1,555,079 389,731

534,782 5,597,655 2,380,133 873,674 1,043,349 1,018,966 1,135,320 15,221 3,816,695

2,466,217 423,900 21,861,709

226,493

----
112,995 -

-894 -
4,374 185 11,044 645
--

--
130,137

(130,137)

(7,744) (2,043) (22,473)
-(106,318)
(6,597)

(19,936) (123,801) (167,131) (40,894) (238,521) (123,763) (255,010)
-(118,445)

(283) (1,550) (1,234,509)

1,054,673

Other financing sources (uses) Operating transfers in Operating transfers out Appropriated fund balance, and
carryover encumbrances
Total other financing sources (uses)

306,500 (115,000)

751,817 943,317

306,500 (100,000)

751,817 958,317

-(100,000)

-(100,000)

(306,500) -

(751,817) (1,058,317)

Excess revenues (expenditures)

and other financing sources (uses)	$	- $	- $	126,493 $	(130,137) $	(3,644)

See accompanying notes.	14

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Statement of Fiduciary Net Position

June 30, 2017

Private-Purpose

Trusts Assets
Cash	$	544,232 $

Agency

1,369,900

Liabilities
Extraclassroom activities balances Agency liabilities
Due to governmental funds Total liabilities

- $	81,610 -                 290,924 -                 997,366 - $         1,369,900

Net Position

Restricted for scholarships	$	544,232

* * *

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Statement of Changes in Fiduciary Net Position

For the year ended June 30, 2017

Private-Purpose Trusts
Additions

Gifts and donations                                                                                                 $               2,851 Interest income                                                                                                                         533 3,384

Deductions Scholarship awards
Change in net position

14,204 (10,820)

Net position - beginning Net position - ending

555,052 $	544,232

See accompanying notes.	15

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Notes to Financial Statements

1. Summary of Significant Accounting Policies

Reporting Entity

Byron-Bergen Central School District (the District) is governed by Education and other laws of the State of New York (the State). The District’s Board of Education has responsibility and control over all activities related to public school education within the District. The District’s Superintendent is the chief executive officer and the President of the Board serves as the chief fiscal officer. The Board members are elected by the public and have decision-making authority, the power to designate management, the ability to influence operations, and the primary accountability for fiscal matters.

The District provides education and support services such as administration, transportation, and plant maintenance. The District receives funding from local, state, and federal sources and must comply with requirements of these funding sources. However, the District is not included in any other governmental reporting entity as defined by accounting principles generally accepted in the United States of America, nor does it contain any component units.

The financial statements of the District have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the District's accounting policies are described below.

Joint Venture

The District is one of 22 participating school districts in the Genesee Valley BOCES (BOCES). Formed under §1950 of Education Law, a BOCES is a voluntary cooperative association of school districts in a geographic area that shares planning, services, and programs, and also provides educational and support activities. There is no authority or process by which the District can terminate its status as a component of BOCES.

The component school district boards elect the members of the BOCES governing body. There are no equity interests and no single participant controls the financial or operating policies. BOCES may also contract with other municipalities on a cooperative basis under State General Municipal Law.

A BOCES’ budget is comprised of separate spending plans for administrative, program, and capital costs. Each component school district shares in administrative and capital costs determined by its enrollment. Participating districts are charged a service fee for programs in which students participate, and for other shared contracted administrative services. Participating districts may issue debt on behalf of BOCES; there is no such debt issued by the District.

During the year ended June 30, 2017, the District was billed $3,615,000 for BOCES administrative and program costs and recognized revenue of $137,000 as a refund from prior year expenditures paid to BOCES. Audited financial statements are available from BOCES’ administrative offices.

16

Public Entity Risk Pools

The District participates in the Genesee Area Healthcare Plan and the Genesee County Self-Insurance Workers’ Compensation Plan, which are public entity risk pools. These plans are designed to provide health insurance and workers’ compensation coverage for participating entities. These activities are further presented in Note 10.

Basis of Presentation

Government-wide Statements: The statement of net position and the statement of activities display financial activities of the overall District, except for fiduciary activities. Eliminations have been made to minimize double counting of internal activities. These statements are required to distinguish between governmental and business-type activities of the District. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The District does not maintain any business-type activities.

The statement of activities presents a comparison between direct expenses and program revenues for each function of the District’s governmental activities.

	Direct expenses are those that are specifically associated with a program or are clearly identifiable to a particular function. Indirect expenses relate to the administration and support of the District’s programs, including personnel, overall administration, and finance. Employee benefits are allocated to functional expenses as a percentage of related payroll expense.
	Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational requirements of a particular program. Revenues that are not classified as program revenues, including all taxes and state aid, are presented as general revenues.

Fund Financial Statements: The fund financial statements provide information about the District’s funds, including fiduciary funds. Separate statements for each fund category - governmental and fiduciary - are presented. The emphasis of the fund financial statements is on major governmental funds, each displayed in a separate column.

The District reports the following major funds:

 General fund. This is the District’s primary operating fund. It accounts for all financial resources except those required to be accounted for in another fund.
 Capital projects fund. This fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
 Special aid fund. This fund is used to account for the proceeds of specific revenue sources – other than expendable trusts or major capital projects – such as federal, state, and local grants and awards that are restricted or committed to expenditure for specific purposes. Either governments or other third parties providing the grant funds impose these restrictions.

The District also elected to display the following as a major fund:

 School lunch fund. This fund is a special revenue fund whose specific revenue sources, including free and reduced meal subsidies received from state and federal programs, are assigned to the operation of the District's breakfast and lunch programs.

17

The District has elected not to use a debt service fund as debt activity is currently reflected in the general fund. Amounts accumulated for the payment of future principal and interest payments restricted for such purpose are included in the general fund.

The District reports the following fiduciary funds:

 Private-purpose trust fund. This fund reports trust arrangements under which principal and income benefit various third party scholarship arrangements.
 Agency fund. This fund accounts for assets held by the District as agent for various student groups and clubs, payroll, and employee third party withholdings. The agency fund is custodial in nature and does not involve measurement of results of operations.

The financial statements include certain prior year summarized comparative information in total but not by separate governmental activities and major funds. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the District's financial statements for the year ended June 30, 2016, from which the summarized information was derived.

Basis of Accounting and Measurement Focus

The government-wide and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the District receives value directly without giving equal value in exchange, include property and sales taxes, grants, and donations. Revenue from property taxes is recognized in the fiscal year for which taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The District considers all revenues reported in the governmental funds to be available if they are collected within ninety days after year end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset purchases are reported as expenditures in governmental funds. Proceeds of long-term liabilities and equipment and property purchased under capital leases are reported as other financing sources.

Under the terms of grant agreements, revenues are recognized to the extent of program expenditures. Amounts received in advance of the expenditures are considered unearned and reported as revenue when the expense is incurred.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

18

Property Taxes

The District levies real property taxes no later than September 1. For the year ended June 30, 2017, the tax lien was issued on August 11, 2016 for collection from September 1, 2016 through October 30, 2016. Thereafter, uncollected amounts became the responsibility of Monroe, Orleans, and Genesee Counties. Such amounts were submitted to the District by April 1st of the following year as required by law.

The District is subject to tax abatements granted by the Genesee County Industrial Development Agency (GCIDA), a public benefit corporation created by an act of the New York State Legislature to promote and assist private sector industrial and business development.

Through GCIDA, companies promise to expand or maintain facilities or employment within the communities served by the District, to establish a new business, or to relocate an existing business to the communities. Economic development agreements entered into by GCIDA can include the abatement of county, town, and school district taxes, in addition to other assistance. In the case of the District, these abatements have resulted in reductions of property taxes, which the District administers as a temporary reduction in the assessed value of the property involved. The abatement agreements stipulate a percentage reduction of property taxes, which can be as much as 100%.

For the year ended June 30, 2017, the District’s taxes were abated $143,000 under these agreements. However, because the abated amounts are spread across the District’s entire tax base, there is no impact on the overall property taxes collected.

Budget Process, Amendments, and Encumbrances

District administration prepares a proposed budget for the general fund requiring approval by the Board. A public hearing is held upon completion and filing of the tentative budget. Subsequently, the budget is adopted by the Board. The proposed budget is then presented to voters of the District. The budget for the fiscal year beginning July 1, 2016 was approved by a majority of the voters in a general election held on May 17, 2016.

Annual appropriations are adopted and employed for control of the general fund. These budgets are adopted on a GAAP basis under the modified accrual basis of accounting. Appropriations established by the adoption of the budget constitute a limitation on expenditures (and encumbrances) which may be incurred. Appropriations authorized for the current year may be increased by the planned use of specific restricted, committed, and assigned fund balances and subsequent budget amendments approved by the Board as a result of new revenue sources not included in the original budget.

Major capital expenditures are subject to individual project budgets based on the cost of the project and external financing rather than annual appropriations. For the capital projects fund, these budgets do not lapse at year end and are carried over to the completion of the project.

Encumbrance accounting is used to assure budgetary control over commitments related to unperformed (executory) contracts for goods or services outstanding at the end of each year. Encumbrances are budgetary expenditures in the year committed and again in the subsequent period when the expenditure is paid. All budget appropriations that are unencumbered lapse at the end of the fiscal year. Encumbrances outstanding at year end are presented for GAAP-related purposes as committed or assigned fund balances and do not constitute expenditures or liabilities. At July 1, encumbrances carried forward from the prior year are reestablished as budgeted appropriations.

19

Inventory

Inventory consists of food and similar food service goods related to school lunch operations and is recorded at the lower of first-in, first-out cost or net realizable value. Donated commodities are stated at values which approximate market.

Capital Assets

Capital assets are reported at actual or estimated historical cost based on appraisals. Contributed assets are recorded at fair value at the time received. Depreciation is provided in the government-wide statements over estimated useful lives using the straight-line method. Maintenance and repairs are expensed as incurred; significant improvements are capitalized.

Capitalization thresholds for determining which asset purchases are added to capital accounts and the estimated useful lives of capital assets are:

Capitalization Policy

Estimated Useful Life

Buildings and improvements

Machinery and equipment

$50,000

$1,000

15-50 years

5-25 years

Bond Defeasances

In the government-wide financials statements, gains or losses on bond refundings represent the difference between the price required to repay previously issued debt and the net carrying amount of the retired debt, and are recorded as either a deferred outflow or deferred inflow of resources. In subsequent years, these amounts are amortized on a straight-line basis as a component of interest expense over the shorter of the life of the old or new debt.

Bond Premiums

Premiums received upon the issuance of debt are included as other financing sources in the governmental funds statements when issued. In the government-wide statements, premiums are recognized with the related debt issue and amortized on a straight-line basis as a component of interest expense over the life of the related obligation.

Pensions

The District participates in the New York State Teachers’ Retirement System (TRS) and the New York State and Local Employees’ Retirement System (ERS) (the Systems) as mandated by State law. The Systems recognize benefit payments when due and payable in accordance with benefit terms; investment assets are reported at fair value. On the government-wide statements, the District recognizes its proportionate share of net pension position, deferred outflows and deferred inflows of resources, pension expense (revenue), and information about and changes in the fiduciary net position on the same basis as reported by the respective defined benefit pension plans.

20

Compensated Absences

The liability for compensated absences reported in the government-wide financial statements consists of unpaid accumulated sick and vacation time. The liability has been calculated using the vesting method, in which leave amounts for both employees currently eligible to receive payments and those expected to become eligible to receive such payments are included. Sick pay is accrued on the basis of negotiated contracts with administrative and employee groups which provide for the payment of accumulated sick time at retirement or the option of converting this vested amount to provide for payment of health insurance until exhausted.

The government-wide financial statements reflect the entire liability, while in the governmental funds financial statements, only the amount of matured liabilities is accrued based on expendable available financial resources.

Equity Classifications

Government-Wide Statements

 Net investment in capital assets – consists of capital assets, net of accumulated depreciation, and deferred outflows of resources for defeasance losses, reduced by outstanding balances of any related debt obligations that are attributable to the acquisition, construction, or improvement of those assets.
 Restricted – consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets if their use is constrained to a particular purpose. Restrictions are imposed by external organizations such as federal or state laws or the terms of the District’s bonds.
 Unrestricted – the net amount of assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position and therefore are available for general use by the District.

Governmental Fund Statements

The District considers unrestricted resources to have been spent first when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, unless the use of the restricted amount was appropriated in the current year’s budget. Within unrestricted fund balance, the District considers committed, assigned, then unassigned resources to have been spent when an expenditure is incurred for which amounts in any of those fund balance classifications could be used.

Restricted fund balances generally result from reserves created by the State of New York Legislature and included in General Municipal Law, State Education Law, or Real Property Tax Law as authorized for use by the Board of Education. Certain reserves may require voter approval for their establishment and/or use. Earnings on invested resources are required to be added to the various reserves.

Committed fund balances are authorized by the Board of Education as recommended by the District’s management prior to the end of the fiscal year, although funding of the commitment may be established subsequent to year end. Assigned fund balances include the planned use of existing fund balance to offset the subsequent year’s tax levy. Additionally, the Board of Education has given the District’s management the authority to assign fund balances for specific purposes that are neither restricted nor committed. Nonspendable fund balances represents resources that cannot be spent as they are not expected to be converted to cash and include inventory.

21

Fund balance restrictions consist of the following reserves:
 Debt service – is used to account for proceeds from the sale of property that was financed by obligations still outstanding, interest and earnings on outstanding obligations (including bond premiums), and remaining bond proceeds not needed for their original purpose as required under §165 of Finance Law. This reserve must be used to pay the debt service obligations for which the original money was generated.
 Liability – is used to pay for liability claims incurred. Annual funding of this reserve may not exceed 3% of the budget.
 Unemployment insurance – is used to pay the cost of reimbursement to the State Unemployment Insurance Fund for payments made to claimants as the District has elected to use the benefit reimbursement method.
 Capital – is used to accumulate funds to finance all or a portion of future capital projects for which bonds may be issued. Voter authorization is required for both the establishment of the reserve and payments from the reserve. In September 2014, voters approved the establishment of a reserve not to exceed $1,000,000. In May 2016, voters approved an increase in the reserve to $2,000,000. This reserve has been fully funded, including interest earnings.
 Employee benefit accrued liability – is used to account for the payment of accumulated vacation and sick time due upon termination of an employee’s services. It is established by a majority vote of the Board and is funded by budgetary appropriations and such other reserves and funds that may be legally appropriated.
 Insurance – is used to pay liability, casualty, and other types of losses except losses incurred for which insurance may be purchased. The amount is funded through budgetary appropriations which may not exceed 5% of the budget.
 Retirement contribution – is used to finance retirement contributions payable to ERS.
 Tax certiorari – is used to pay judgments and claims resulting from certiorari proceedings. Funds not used by July 1 of the fourth fiscal year following their deposit must be returned to unassigned fund balance.
 Workers’ compensation – is used to pay for compensation benefits and other expenses authorized by Article 2 of the Workers’ Compensation Law, and for payment of expenses of administering this program.

Interfund Balances

The operations of the District include transactions between funds including resources for cash flow purposes. These interfund receivables and payables are repaid within one year. Permanent transfers of funds provide financing or other services.

In the government-wide statements, the amounts reported on the statement of net position for interfund receivables and payables represent amounts due between different fund types (governmental activities and fiduciary funds). Eliminations have been made for all interfund receivables and payables between the funds, with the exception of those due from or to fiduciary funds.

Interfund receivables and payables are netted on the accompanying governmental funds balance sheet as the right of legal offset exists. It is the District’s practice to settle these amounts at the net balances due between funds.

2. Stewardship and Compliance

The capital projects deficit fund balance of $249,416 will be funded when bond anticipation notes are converted to permanent financing.

22

3. Cash

Cash management is governed by State laws and as established in the District’s written policies. Cash resources must be deposited in FDIC-insured commercial banks or trust companies located within the State. Policies permit the Treasurer to use demand accounts and certificates of deposit. Invested resources are limited to obligations of the United States Treasury and its Agencies, repurchase agreements, and obligations of the State or its localities.

Collateral is required for demand and time deposits and certificates of deposit not covered by Federal Deposit Insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalities and school districts.

Custodial credit risk is the risk that in the event of a bank failure the District’s deposits may not be returned to it. At June 30, 2017, the District’s bank deposits were fully collateralized by FDIC coverage and securities held in trust by the pledging institutions.

4. Interfund Transactions – Fund Financial Statements

Transfers Fund	Receivable	Payable	In	Out

General Capital projects Special aid School lunch Fiduciary

$	1,272,153 $ 407,922
-43,665 -
$	1,723,740 $

451,587 $ -
274,787 -997,366
1,723,740 $

- $ 100,000
---
100,000 $

100,000 ----
100,000

The District’s general fund provides cash flow to the various other funds; these amounts are repaid in the subsequent year when funds are received from the State after final expenditure reports have been submitted and approved or when permanent financing is obtained. The amounts owed from the fiduciary fund to the general fund represent payroll withholdings paid by the general fund with amounts that will be reimbursed from the fiduciary fund. The amounts owed to the school lunch and capital projects funds from the general fund represent federal and state funds initially received in the general fund. The general fund made a permanent transfer to the capital projects fund to pay initial capital projects costs.

23

5. Capital Assets

July 1, 2016

Non-depreciable capital assets:

Retirements/

Increases	Reclassifications June 30, 2017

Land

Construction in progress

Total non-depreciable assets

$	139,383	$ -
139,383

-	$ 100,000
100,000

-     $        139,383 -              100,000
-	239,383

Depreciable capital assets: Buildings and improvements Machinery and equipment
Total depreciable assets

Less accumulated depreciation: Buildings and improvements Machinery and equipment
Total accumulated depreciation

Total depreciable assets, net

42,366,276 3,051,674 45,417,950

14,389,066 1,970,568 16,359,634

29,058,316

68,379 489,898 558,277

964,304 303,350 1,267,654

(709,377)

-(177,050) (177,050)

-(177,050) (177,050)

-

42,434,655 3,364,522 45,799,177

15,353,370 2,096,868 17,450,238

28,348,939

$	29,197,699	$	(609,377) $	-	$ 28,588,322

Depreciation expense has been allocated to the following functions: general support $208,679, instruction $938,318, school lunch $10,991, and pupil transportation $109,666.

At June 30, 2017, net investment in capital assets consists of the following:

Capital assets, net of accumulated depreciation Defeasance loss
Cash in capital projects fund, net of related payables

Bonds anticipation notes payable

$ 28,588,322 29,070 437,934
(687,350)

Bonds and related premiums	 (12,064,132) $ 16,303,844

6. Short-Term Debt

Aggregate bond anticipation notes (BANs) outstanding at June 30, 2017 amounted to $687,350 ($614,067 at June 30, 2016) and carry interest at 1.25% (0.89% at June 30, 2016). In 2017, BANs of $284,500 were issued and $211,217 were redeemed from appropriations. The District intends to continue to reissue the BANs until paid.

24

7. Long-Term Liabilities

July 1,

2016

June 30,

Increases	Decreases	2017

Amounts Due in
One Year

Bonds

Bond premiums

March 2013 refunding July 2012 bond
Compensated absences

$	14,090,000 $

120,354 165,440 5,142,000
$	19,517,794	$

- $

--
10,000

10,000	$

2,255,000 $

40,118 16,544 -
2,311,662	$

11,835,000 $

80,236 148,896 5,152,000
17,216,132	$

1,425,000

--
882,000

2,307,000

Existing Obligations

Description	Maturity	Rate	Balance

Serial bonds - 2012

Refunding bond - 2013

June 2026

June 2019

2.5%-3.0%

2.0%-3.0%

$       11,410,000 425,000
$	11,835,000

Debt Service Requirements

Years ending June 30,	Principal	Interest

2018	$ 2019 2020 2021 2022
2023-2026

$

1,425,000 $ 1,465,000 1,285,000 1,325,000 1,365,000 4,970,000
11,835,000	$

350,800 310,150 268,350 229,800 190,050 338,250
1,687,400

8. Pension Plans

Plan Descriptions

The District participates in the following cost-sharing, multiple employer, public employee retirement systems:

 TRS is administered by the New York State Teachers’ Retirement Board and provides benefits to plan members and beneficiaries as authorized by the Education Law and the Retirement and Social Security Law of the State of New York. TRS issues a publicly available financial report that contains financial statements and required supplementary information. The report may be obtained from the New York State Teachers’ Retirement System at www.nystrs.org.
 ERS provides retirement benefits as well as death and disability benefits. New York State Retirement and Social Security Law governs obligations of employers and employees to contribute and provide benefits to employees. ERS issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained from the New York State and Local Retirement System at www.osc.state.ny.us/retire.

25

Benefits: The Systems provide retirement, disability, and death benefits for eligible members, including automatic cost of living adjustments. In general, retirement benefits are determined based on an employee’s individual circumstances using a pension factor, an age factor, and final average salary. The benefits vary depending on the individual’s employment tier. Pension factors are determined based on tier and an employee’s years of service, among other factors.

Contribution Requirements: No employee contribution is required for those hired prior to July 1976. The Systems require employee contributions of 3% of salary for the first 10 years of service for those employees who joined the Systems from July 1976 through December 2009. Participants hired on or after January 1, 2010 through March 31, 2012 are required to contribute 3.5% (TRS) or 3% (ERS) of compensation throughout their active membership in the Systems. Participants hired on or after April 1, 2012 are required to contribute a percentage ranging from 3% to 6% each year, based on their level of compensation. Pursuant to Article 11 of Education Law, an actuarially determined contribution rate is established annually for TRS by the New York State Teachers’ Retirement Board. This rate was 11.72% for 2017. For ERS, the Comptroller annually certifies the rates used, expressed as a percentage of the wages of participants, to compute the contributions required to be made by the District to the pension accumulation fund. For 2017, these rates ranged from 9.4% - 21.8%.

The amount outstanding and payable to TRS for the year ended June 30, 2017 was $860,175. A liability to ERS of $106,887 is also accrued based on the District’s legally required contribution for employee services rendered from April 1, 2017 through June 30, 2017.

Net Pension Asset (Liability), Pension Expense, and Deferred Outflows and Deferred Inflows of Resources

At June 30, 2017, the District reported net pension liabilities of $473,160 and $645,081 for its proportionate share of the TRS and ERS net pension liabilities, respectively.

The TRS net pension liability was measured as of June 30, 2016, and the total pension liability was determined by an actuarial valuation as of June 30, 2015, with update procedures applied to roll forward the net pension position to June 30, 2016. The District’s proportion of the net pension liability was based on the ratio of its actuarially determined employer contribution to TRS’s total actuarially determined employer contributions for the fiscal year ended on the measurement date. At June 30, 2016, the District’s proportion was 0.044178%, a decrease of 0.000213% from its proportion measured as of June 30, 2015.

The ERS net pension liability was measured as of March 31, 2017, and the total pension liability was determined by an actuarial valuation as of April 1, 2016. The District’s proportion of the net pension liability was based on the ratio of its actuarially determined employer contribution to ERS’s total actuarially determined employer contributions for the fiscal year ended on the measurement date. At the March 31, 2017 measurement date, the District’s proportion was 0.0068653%, a decrease of 0.0001874% from its proportion measured as of March 31, 2016.

26

For the year ended June 30, 2017, the District recognized net pension expense of $1,198,083 on the government-wide statements (TRS expense of $784,221 and ERS expense of $413,862). At June 30, 2017, the District reported deferred outflows and deferred inflows of resources as follows:

	TRS	                      ERS

Deferred

Outflows of

Deferred

Inflows of

Deferred

Outflows of

Deferred

Inflows of

	Resources	Resources	      Resources	Resources

Differences between expected and actual experience Changes of assumptions
Net difference between projected and actual earnings on pension plan investments
Changes in proportion and differences between District contributions and proportionate share of contributions
District contributions subsequent to the measurement

$                    -     $ 2,695,421

1,063,912

21,443

153,709 -

-

11,848

$        16,165     $        97,959 220,383                       -

128,849	-

144,794	6,100

date                                                                                                    860,175                          -             106,887                       -$     4,640,951     $        165,557       $     617,078     $     104,059

District contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Years ending June 30,	TRS	ERS

2018 $ 2019 2020 2021 2022
Thereafter
$

330,843 $ 330,843
1,157,107 900,032 413,728
482,666 3,615,219	$

166,445 166,445 146,311
(73,069) -
-406,132

Actuarial Assumptions

For TRS, the actuarial assumptions used in the June 30, 2015 valuation, with update procedures used to roll forward the total pension liability to June 30, 2016, were based on the results of an actuarial experience study for the period July 1, 2009 to June 30, 2014. These assumptions are:

Inflation – 2.5%
Salary increases – Based on TRS member experience, dependent on service, ranging from 1.90% -4.72%
Projected Cost of Living Adjustments (COLA) – 1.5% compounded annually
Investment rate of return – 7.5% compounded annually, net of investment expense, including inflation Mortality – Based on TRS member experience, with adjustments for mortality improvements based on Society of Actuaries’ Scale MP-2014, applied on a generational basis
Discount rate – 7.5%

27

The long-term expected rate of return on TRS pension plan investments was determined in accordance with Actuarial Standard of Practice No. 27, Selection of Economic Assumptions for Measuring Pension Obligations. Consideration was given to expected future real rates of return (expected returns, net of pension plan investment expense and inflation) for each major asset class as well as historical investment data and plan performance.

For ERS, the actuarial assumptions used in the April 1, 2016 valuation, with update procedures used to roll forward the total pension liability to March 31, 2017, were based on the results of an actuarial experience study for the period April 1, 2010 to March 31, 2015. These assumptions are:

Inflation – 2.5%
Salary increases – 3.8% COLA – 1.3% annually
Investment rate of return – 7.0% compounded annually, net of investment expense, including inflation Mortality – Society of Actuaries’ Scale MP-2014
Discount rate – 7.0%

The long-term expected rate of return on ERS pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected return, net of investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Investment Asset Allocation

Best estimates of arithmetic real rates of return for each major asset class included in the Systems’ target asset allocations as of the applicable valuation dates are summarized as follows:

	TRS	

Long-Term

Expected

ERS

Long-Term

Expected

Target	Real Rate of	Target	Real Rate of

	Asset Class	Allocation	Return	     Allocation	Return

Domestic equities	37%	6.1% International equities	18%	7.3% Private equities                                          7%	9.2% Real estate	10%	5.4% Inflation-indexed bonds                            -
Domestic fixed income securities	17%	1.0% Global fixed income securities                   2%	0.8% Bonds and mortgages                               8%	3.1% Short-term                                                1%	0.1%
Other	           -	

100%

36%                4.6% 14%                6.4% 10%                7.8% 10%                5.8% 4%                1.5%
-                      --                      -
17%	1.3% 1%               (0.3)%
	8%	 4.0%-5.9%

100%

28

Discount Rate

The discount rate projection of cash flows assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Systems’ fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

The following presents the District’s proportionate share of its net pension position calculated using the discount rate of 7.5% (TRS) and 7.0% (ERS) and the impact of using a discount rate that is 1% higher or lower than the current rate.

At Current

1.0% Decrease	Discount Rate	1.0% Increase

District's proportionate share of

the TRS net pension asset (liability)

District's proportionate share of
the ERS net pension asset (liability)

$	(6,173,448) $

$	(2,060,260) $

(473,160) $

(645,081) $

4,307,942

551,451

9. Postemployment Benefits Other than Pensions (OPEB)

The District maintains a single-employer defined benefit healthcare plan (the Plan) providing for continuation of medical insurance for certain District retirees and their spouses. Benefit provisions are based on individual contracts with the District, as negotiated from time to time. The Plan does not issue a publicly available financial report. Eligibility is based on covered employees who retire from the District over age 55 with twelve or more years of service (faculty hired prior to July 1, 2005 are not subject to minimum service requirement) and are eligible to retire under TRS or ERS. The required contribution is on a pay-as-you-go basis, with no current funding of actuarially determined liabilities. For the year ended June 30, 2017, the District contributed $120,118 for plan benefits. The Plan is open to all eligible employees and provides continued insurance through the conversion of sick time or by payment of monthly premiums by retirees through participation in the District’s policies. The District thereby provides an implicit rate subsidy on behalf of eligible employees.

The District’s annual OPEB expense is calculated based on the annual required contribution (ARC) of the District. The ARC represents a level funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize unfunded actuarial liabilities over 30 years. OPEB expense is also calculated based upon the following components:

 Amortization of the unfunded actuarial accrued liability (UAAL) for the current year, which is the actuarially-determined, unfunded present value of all future OPEB costs associated with current employees and retirees at the beginning of the year.
 Normal cost which is the actuarially-determined cost of future OPEB earned in the current year.

29

The following table summarizes the District’s annual OPEB for the year ended June 30, 2017:

Annual required contribution Normal cost
Amortization of unfunded actuarial accrued liability Interest
ARC adjustment

Contributions made
Increase in net OPEB obligation
Net OPEB obligation - beginning of year Net OPEB obligation - end of year

$           91,492 78,841
4,885 (6,792)
168,426 (120,118)
48,308 122,128
$	170,436

The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation were as follows:

Annual

OPEB Cost

Percentage of Annual OPEB Cost
Contributed

Net OPEB

Obligation

2017	$ 168,426	71.3%	$ 2016             166,072	62.6%
2015	163,847	63.3%

170,436 122,128
60,058

As of July 1, 2016, the actuarial accrued liability for benefits was $1,591,675, all of which is unfunded. The annual payroll of employees covered by the Plan was $7,939,389, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 20.0%.

The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the Plan and ARC of the District are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. A schedule of funding progress is presented as required supplementary information and displays trend data on plan assets (if any) and the actuarial accrued liability for benefits.

Projections of benefits for financial reporting purposes are based on the Plan as understood by the District and Plan members and include the types of benefits provided at the time of each valuation and the historical pattern of sharing benefit costs between the District and Plan members. The methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets (if any), consistent with the long-term perspective of the calculations. The following assumptions were made:

Retirement age for active employees – TRS and ERS pension valuation rates, beginning at age 55 with all employees assumed to retire by age 76
Marital status – 50% married, with male spouses assumed to be three years older than female spouses; actual ages used for retirees
Mortality – RP-2014, adjusted to 2006 Total Dataset Mortality Table, projected using scale MP-2016 (previously RP-2000, separate tables for males and females, Scale AA)
Turnover – Based on experience under TRS and ERS, by tier
Actuarial cost method – Entry Age Normal (previously Projected Unit Credit)

30

Healthcare cost trend rate – 7.5% initially (previously 9.0%), with rates reducing to an ultimate rate of 4.5% (previously 5.0%) in 2022
Discount rate – 3% (previously 4%)
Amortization method – 30 years, level dollar, open basis

10. Risk Management

General Liability

The District purchases commercial insurance for various risks of loss due to torts, theft, damage, errors and omissions, and natural disasters. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three years.

Health Insurance

The District participates in the Genesee Area Healthcare Plan (the Plan). The Plan has been established to administer a health insurance program to lower the costs of such coverage to the 24 participating members as of June 30, 2016 (the most recent information available).

The District has transferred all risk to the Plan. Plan members pay monthly premium equivalents based upon a pro-rata share of expenditures. All funds received are pooled and administered as a common fund. Refunds are not made nor additional assessments charged other than the annual premium equivalents. If the Plan’s assets were to be exhausted, members would be equally responsible for the remaining liabilities.

The Plan has published its own financial report for the year ended June 30, 2016, which can be obtained from Genesee Valley BOCES, 80 Munson Street, LeRoy, NY 14482.

Workers’ Compensation

The District participates in the Genesee County Self-Insurance Workers’ Compensation Plan (the Plan) sponsored by Genesee County. The Plan administers a workers’ compensation insurance fund pursuant to Article 5 of the Workers’ Compensation Law to finance the liability and risk related to workers’ compensation claims and to lower the costs of coverage to the participating members. The Plan includes 46 members as of December 31, 2016 (the most recent information available).

The District has transferred partial risk to the Plan. Plan members pay monthly premium equivalents based upon a pro-rata share of expenditures. All funds received are pooled and administered as a common fund. Plan members could be subjected, however, to pro-rata supplemental assessments in the event that the Plan's assets are not adequate to meet claims. To date, these supplemental assessments have not been required.

The Plan has published its own financial report for the year ended December 31, 2016 which can be obtained from Genesee County Self-Insurance Workers’ Compensation Plan, 15 Main Street, Batavia, NY 14020.

11. Commitments and Contingencies

Grants

The District receives financial assistance from federal and state agencies in the form of grants and calculated aid as determined by the State. The expenditure of grant funds generally requires compliance with the terms and conditions specified in the agreements and are subject to audit by the grantor agencies. State aid payments are based upon estimated expenditures and pupil statistics, are complex, and subject to adjustment. Any disallowed claims resulting from such audits could become a liability of the District. Based on prior experience, management expects such amounts to be immaterial.

31

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Required Supplementary Information

Schedule of the District's Proportionate Share of the Net Pension Position New York State Teachers' Retirement System

As of the measurement date of June 30,

District's proportion of the net pension position

2016

0.044178%

2015

0.044391%

2014

0.043960%

2013

0.045931%

District's proportionate share of the net pension asset (liability)	$ (473,160) $ 4,610,808 $	4,896,911 $ 302,339

District's covered payroll	$ 6,817,044 $ 6,805,183 $	6,580,736 $ 6,788,265

District's proportionate share of the net pension position as a percentage of its covered payroll

Plan fiduciary net position as a percentage of the total pension liability

6.94%	67.75%

99.01%	110.46%

74.41%

111.48%

4.45%

100.70%

Data prior to 2013 is unavailable.

The following is a summary of changes of assumptions:

2016	2015

Inflation
Salary increases
Cost of living adjustments Investment rate of return Discount rate
Society of Actuaries' mortality scale

2.5% 1.90%-4.72%
1.5% 7.5% 7.5% MP-2014

3.0% 4.0%-10.9%
1.6% 8.0% 8.0% AA

32

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Required Supplementary Information Schedule of District Contributions
New York State Teachers' Retirement System

June 30,	2017	2016	2015	2014	2013

Contractually required contribution	$	860,175 $	903,940 $ 1,168,923 $ 1,055,215 $	796,575

Contribution in relation to the contractually required contribution
Contribution deficiency (excess)

(860,175)
$	- $

(903,940)
- $

(1,168,923)
- $

(1,055,215)
- $

(796,575) -

District's covered payroll	$ 7,339,377 $ 6,817,044 $ 6,805,183 $ 6,580,736 $ 6,788,265

Contributions as a percentage of covered payroll	11.72%	13.26%	17.18%	16.03%	11.73%

Data prior to 2013 is unavailable.

33

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Required Supplementary Information

Schedule of the District's Proportionate Share of the Net Pension Position New York State and Local Employees' Retirement System

As of the measurement date of March 31,

District's proportion of the net pension position

2017

0.0068653%

2016

0.0070527%

2015

0.0066416%

District's proportionate share of the net pension liability

District's covered payroll

$	645,081 $

$	2,308,649 $

1,131,975 $

2,075,859 $

224,368

1,916,607

District's proportionate share of the net pension position as a percentage of its covered payroll

Plan fiduciary net position as a percentage of the total pension liability

27.94%	54.53%	11.71%

94.70%	90.70%	97.90%

Data prior to 2015 is unavailable.

The following is a summary of changes of assumptions:

2016	2015

Inflation
Salary increases
Cost of living adjustments Investment rate of return Discount rate

2.5%	2.7% 3.8%	4.9% 1.3%	1.4% 7.0%	7.5% 7.0%	7.5%

34

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Required Supplementary Information Schedule of District Contributions
New York State and Local Employees' Retirement System

June 30,	2017	2016	2015	2014	2013

Contractually required contribution	$	346,515 $ 409,084 $	365,998 $	417,270 $	347,923

Contribution in relation to the contractually required contribution
Contribution deficiency (excess)

(346,515)	(409,084)
$	- $	- $

(365,998)
- $

(417,270)
- $

(347,923) -

District's covered payroll	$ 2,308,649 $2,075,859 $ 1,916,607 $	1,974,974 $	2,001,052

Contributions as a percentage of covered payroll	15.01%	19.71%	19.10%	21.13%	17.39%

Data prior to 2013 is unavailable.

35

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Required Supplementary Information Schedule of Funding Progress Postemployment Benefit Plan

June 30, 2017

Actuarial Valuation Date

Actuarial Value of Assets

Actuarial Accrued Liability

Unfunded Actuarial
Accrued	Funded Liability (UAAL)        Ratio

Covered Payroll

UAAL as a Percentage of Covered Payroll

July 1, 2014	$

July 1, 2016	$

- $	1,487,227 $

- $	1,591,675 $

(1,487,227)

(1,591,675)

- $	8,407,789	17.7%

- $	7,939,389	20.0%

36

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Supplementary Information

Schedule of Change from Original to Final Budget and Calculation of Unrestricted Fund Balance Limit - General Fund

For the year ended June 30, 2017

Original expenditure budget	$	22,874,538

Encumbrances carried over from prior year	451,817

Revised expenditure budget	$	23,326,355

* * *

Unrestricted Fund Balance

Assigned

Unassigned

$         443,014 857,541
1,300,555

Encumbrances included in assigned fund balance

Appropriated fund balance used for tax levy

(130,137)

(312,877)

Amount subject to 4% limit pursuant to Real Property Tax Law §1318	$	857,541

§1318 of Real Property Tax Law - unrestricted fund balance limit calculation

2018 expenditure budget (unaudited)

4% of budget

$	22,767,497

910,700

Actual percentage of 2018 expenditure budget	3.8%

37

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Supplementary Information

Schedule of Capital Project Expenditures

June 30, 2017

Original Project Title	Budget

Revised Budget

Expenditures Prior	Current
Years	Year	Total

Unexpended Balance

2016-2017 Capital Outlay Project	$ 2016-2017 Bus Purchases
2017-2018 Bus Purchases
$

100,000 $ 285,500 303,960 689,460 $

100,000 $ 283,045 303,960 687,005 $

- $	100,000 $ -	283,045
-	20,679
- $	403,724 $

100,000 $ 283,045
20,679 403,724 $

--
283,281 283,281

38

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Supplementary Information

Schedule of Expenditures of Federal Awards

For the year ended June 30, 2017

Federal Grantor/Pass-Through Grantor/Program Title

CFDA	Grantor
Number	Number	Expenditures

U.S. Department of Education:
Passed Through New York State Department of Education Special Education Cluster:
Special Education_Grants to States Special Education_Preschool Grants
Total Special Education Cluster

84.027	0032-17-0278	$ 84.173	0033-17-0278

266,128 11,915 278,043

Title I Grants to Local Educational Agencies Supporting Effective Instruction State Grants
Career and Technical Education - Basic Grants to States Total U.S. Department of Education

U.S. Department of Agriculture:

Passed Through New York State Department of Education

Child Nutrition Cluster: School Breakfast Program
National School Lunch Program

Summer Food Service Program for Children Total Child Nutrition Cluster

Passed Through New York State Office of General Services Child Nutrition Discretionary Grants Limited Availability
Total U.S. Department of Agriculture

84.010	0021-17-1005 84.367	0147-17-1005 84.048	8039-17-0003

10.553	N/A 10.555	N/A 10.559	N/A

10.579	N/A

170,986 47,361 328,035 824,425

51,021 165,713 14,126 230,860

29,825

260,685

Total Expenditures of Federal Awards	$	1,085,110

See accompanying notes.	39

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Notes to Schedule of Expenditures of Federal Awards

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal award programs administered by Byron-Bergen Central School District (the District), an entity as defined in Note 1 to the District’s basic financial statements. Federal awards received directly from federal agencies, as well as federal awards passed through from other governmental agencies, are included on the Schedule of Expenditures of Federal Awards.

Basis of Accounting

The District uses the modified accrual basis of accounting for each federal program, consistent with the fund basis financial statements.

The amounts reported as federal expenditures generally were obtained from the appropriate federal financial reports for the applicable programs and periods. The amounts reported in these federal financial reports are prepared from records maintained for each program, which are periodically reconciled with the District’s financial reporting system.

Indirect Costs

The District does not use the 10% de minimis indirect cost rate permitted by the Uniform Guidance.

Non-Monetary Federal Program

The District is the recipient of a federal award program that does not result in cash receipts or disbursements, termed a “non-monetary program.” During the year ended June 30, 2017, the District used $29,825 worth of commodities under the Child Nutrition Discretionary Grants Limited Availability program (CFDA Number 10.579).

40

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER
	
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Board of Education
Byron-Bergen Central School District

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the remaining fund information of Byron-Bergen Central School District (the District) as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated September 28, 2017.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

41

Purpose of this Report

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

September 28, 2017

42

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER REQUIRED BY THE UNIFORM GUIDANCE

EACH MAJOR COMPLIANCE

The Board of Education
Byron-Bergen Central School District

Report on Compliance for Each Major Federal Program

We have audited Byron-Bergen Central School District’s (the District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the District’s major federal programs for the year ended June 30, 2017. The District’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility

Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditors’ Responsibility

Our responsibility is to express an opinion on compliance for each of the District’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the District’s compliance.

Opinion on Each Major Federal Program

In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017.

43

Report on Internal Control over Compliance

Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control over compliance.

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

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

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

September 28, 2017

44

BYRON-BERGEN CENTRAL SCHOOL DISTRICT

Schedule of Findings and Questioned Costs

For the year ended June 30, 2017

Section I.	Summary of Auditors’ Results

Financial Statements

Type of auditors’ report issued:

Internal control over financial reporting: 	Material weakness(es) identified?
	Significant deficiency(ies) identified?

Noncompliance material to financial statements noted?

Unmodified

No

None reported

No

Federal Awards

Internal control over major programs: 	Material weakness(es) identified?
	Significant deficiency(ies) identified?

Type of auditors’ report issued on compliance for major programs:

Any audit findings disclosed that are required to be reported in accordance with section 2 CFR 200.516(a)?

No

None reported

Unmodified

No

Identification of major programs:

Name of Federal Program or Cluster	CFDA #	Amount

Special Education Cluster:

Special Education _Grants to States

Special Education_Preschool Grants

84.027	$ 84.173
$

266,128 11,915
278,043

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

Auditee qualified as low-risk auditee?

$750,000

Yes

Section II.	Financial Statement Findings

No matters were reported.

Section III.	Federal Award Findings and Questioned Costs

No matters were reported.

45