SCHOOL DISTRICT OF THE BOROUGH OF ENGLEWOOD CLIFFS … · Jennifer Brower Sue Anne Mather...

SCHOOL DISTRICT OF THE

BOROUGH OF ENGLEWOOD CLIFFS

COUNTY OF BERGEN, NEW JERSEY

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED

JUNE 30, 2018

School Districtof

Englewood Cliffs

ENGLEWOOD CLIFFS PUBLIC SCHOOLSEnglewood Cliffs, New Jersey

Comprehensive Annual Financial ReportYear Ended June 30, 2018

Comprehensive Annual Financial Report

of the

ENGLEWOOD CLIFFS PUBLIC SCHOOLSEnglewood Cliffs, New Jersey

Year Ended June 30, 2018

Prepared by

Sue Anne MatherBoard Secretary/Business Administrator

OUTLINE OF CAFR

INTRODUCTORY SECTION

Letter of Transmittal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Organizational Chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Roster of Officials.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Consultants and Advisors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

FINANCIAL SECTION

Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Required Supplementary Information - Part IManagement’s Discussion and Analysis.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

BASIC FINANCIAL STATEMENTS

A. District-wide Financial Statements:

A-1 Statement of Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21A-2 Statement of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

B. Fund Financial Statements:

Governmental Funds:B-1 Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23B-2 Statement of Revenues, Expenditures and Changes in Fund Balances. . . . . . . . . . . . . 24B-3 Reconciliation of the Statement of Revenues, Expenditures, and

Changes in Fund Balances of Governmental Funds to theStatement of Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Proprietary Funds:B-4 Statement of Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26B-5 Statement of Revenues, Expenses and Changes in Fund Net Position.. . . . . . . . . . . . . 27B-6 Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Fiduciary Funds:B-7 Statement of Fiduciary Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29B-8 Statement of Changes in Fiduciary Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Notes to the Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

OUTLINE OF CAFR

Required Supplementary Information - Part II

C. Budgetary Comparison Schedules:

C-1 Budgetary Comparison Schedule - General Fund.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67C-1a Not ApplicableC-2 Budgetary Comparison Schedule - Special Revenue Fund.. . . . . . . . . . . . . . . . . . . . . . 72

Notes to the Required Supplementary InformationC-3 Budgetary Comparison Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Required Supplementary Information - Part III

L. Schedules Related to Accounting and Reporting for Pensions (GASB 68)

L-1 Schedule of the District's Proportionate Share of the Net PensionLiability – PERS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

L-2 Schedule of District Contributions – PERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75L-3 Schedule of the District's Proportionate Share of the Net Pension

Liability – TPAF.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76L-4 Notes to Requires Schedules of Supplementary Information - Part III.. . . . . . . . . . . . . 77

Other Supplementary Information

D. School Level Schedules: Not Applicable

E. Special Revenue Fund:

E-1 Combining Schedule of Program Revenues and Expenditures -Budgetary Basis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

E-2 Not ApplicableE-3 Not ApplicableE-4 Not ApplicableE-5 Not Applicable

F. Capital Projects Fund:

F-1 Summary Schedule of Revenues, Expenditures, and Changes inFund Balance - Budgetary Basis.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

F-1a Schedule of Project Revenues, Expenditures, Project Balances and Project Status - Budgetary Basis - Renovations -North Cliff School. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

F-1b Schedule of Project Revenues, Expenditures, Project Balances and Project Status - Budgetary Basis - Renovations -Upper School. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

F-2 Summary Statement of Project Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

OUTLINE OF CAFR

G. Proprietary Funds:

Enterprise Fund:G-1 Combining Statement of Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83G-2 Combining Statement of Revenues, Expenses and Changes in

Fund Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84G-3 Combining Statement of Cash Flows. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Internal Service Fund:Not Applicable

H. Fiduciary Funds:

H-1 Combining Statement of Fiduciary Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86H-2 Combining Statement of Changes in Fiduciary Net Position. . . . . . . . . . . . . . . . . . . . . 87H-3 Student Activity Agency Fund - Schedule of Receipts and Disbursements. . . . . . . . . . 88H-4 Payroll Agency Fund - Schedule of Receipts and Disbursements. . . . . . . . . . . . . . . . . 89

I. Long-Term Debt:

I-1 Statement of Serial Bonds.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90I-2 Budgetary Comparison Schedule - Debt Service Fund.. . . . . . . . . . . . . . . . . . . . . . . . . 91

J. Statistical Section (Unaudited)

Financial Trends

Introduction to the Statistical Section. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

J-1 Net Position by Component. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94J-2 Changes in Net Position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95J-3 Fund Balances - Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98J-4 Changes in Fund Balances - Governmental Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99J-5 General Fund - Other Local Revenue by Source. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Revenue Capacity

J-6 Assessed Value and Estimated Actual Value of Taxable Property.. . . . . . . . . . . . . . . . 102J-7 Direct and Overlapping Property Tax Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103J-8 Principal Property Taxpayers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104J-9 Property Tax Levies and Collections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Debt Capacity

J-10 Ratios of Outstanding Debt by Type.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106J-11 Ratios of General Bonded Debt Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107J-12 Direct and Overlapping Governmental Activities Debt. . . . . . . . . . . . . . . . . . . . . . . . . 108J-13 Legal Debt Margin Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Demographic and Economic Information

J-14 Demographic and Economic Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110J-15 Principal Employers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Operating Information

J-16 Full-time Equivalent District Employees by Function/Program.. . . . . . . . . . . . . . . . . . 112J-17 Operating Statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113J-18 School Building Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114J-19 Schedule of Required Maintenance Expenditures for School Facilities.. . . . . . . . . . . . 115J-20 Insurance Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

K. SINGLE AUDIT SECTION

K-1 Independent Auditor’s Report on Internal Control Over Financial Reporting andon Compliance and Other Matters Based on an Audit of Financial StatementsPerformed in Accordance with Government Auditing Standards. . . . . . . . . . . . . . . 118

K-2 Independent Auditor’s Report on Compliance with Requirements Applicable toEach Major State Program and Internal Control Over Compliance inAccordance with the Uniform Guidance and N.J. OMB Circular Letter 15-08.. . . . 120

K-3 Schedule of Expenditures of Federal Awards - Schedule A. . . . . . . . . . . . . . . . . . . . . . 123K-4 Schedule of Expenditures of State Financial Assistance - Schedule B.. . . . . . . . . . . . . 124K-5 Notes to the Schedules of Expenditures of Federal Awards and

State Financial Assistance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125K-6 Schedule of Findings and Questioned Costs.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127K-7 Schedule of Financial, Federal and State Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128K-8 Summary Schedule of Prior Audit Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

INTRODUCTORY SECTION

ENGLEWOOD CLIFFS PUBLIC SCHOOLS

143 Charlotte Place

Englewood Cliffs, NJ 07632-2681

Telephone (201) 567-7292 FAX: (201) 567-2738

Jennifer Brower Sue Anne Mather

Superintendent of Schools School Business Administrator/

Board Secretary

January 22, 2019

Honorable President and

Members of the Board of Education

Englewood Cliffs School District

County of Bergen, New Jersey

Dear Board Members:

The comprehensive annual financial report of the Englewood Cliffs School District

(District) for the fiscal year ending June 30, 2018 is hereby submitted. Responsibility

for both the accuracy of the data and the completeness and fairness of the

presentations, including all disclosures, rests with the management of the Board of

Education. To the best of our knowledge and belief, the data presented in this report

is accurate in all material respects and is reported in a manner designed to present

fairly the financial position and results of operations of the various funds and account

groups of the District. All disclosures necessary to enable the reader to gain an

understanding of the District’s financial activities have been included.

The comprehensive annual financial report is presented in four sections: introductory,

financial, statistical and single audit. The introductory section includes this transmittal

letter, the district’s organizational chart and a list of principal officials. The financial

section includes the basic financial statements, management’s discussion and analysis

and the independent auditor’s report. The statistical section includes selected financial

and demographic information, generally presented on a multi-year basis. The District

is required to undergo an annual single audit in conformity with the provisions of the

Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative

Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform

Guidance) and the schedule of expenditures of state financial assistance as required

by NJ OMB 15-08

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Information related to this single audit, including the auditor’s report on the internal

control structure and compliance with applicable laws and regulations and findings

recommendations are included in the single audit section of the report.

1) Reporting Entity and Its Services: The Englewood Cliffs School District is an

independent reporting entity with the criteria adopted by GASB as established by GASB

Statement No. 14. All funds and account groups of the District are included in this

report. The Englewood Cliffs Board of Education and all its schools constitute the

District’s reporting entity. The District provides a full range of services appropriate to

grade level Pre-K through 8. These programs include regular and inclusive special

education services for handicapped children. The district completed the 2017-2018

fiscal year with an average daily enrollment of 494 students, which represents 31

students below the previous year’s enrollment. The following details the changes in

the student enrollment of the District over the last five years.

Average Daily Enrollment

Fiscal Year Student Enrollment Percent Change

2017-2018 494 -5.9

2016-2017 525 -3.8

2015-2016 546 1.1

2014-2015 540 3.2

2013-2014 523 5.2

2) Economic Conditions and Outlook: The tax revenue producing areas of

Englewood Cliffs have limited growth. Given the current economic climate, it can be

expected that this will continue to have an impact on the district’s revenues for the

foreseeable future.

3) Major Initiatives: We continue to increase the use of technology in our everyday

curriculum and have begun Reading, Writing and Math Workshop in Grades K-8. We

have professional development in math and language arts and Responsive Classroom.

With all of the initiatives it is now time for us to begin tracking the progress of these

programs and refine our current programs to insure the success of each child in our

district. With all new programs in place, the Englewood Cliffs School district is

positioned to be a leader in educational reform movement.

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4) Internal Accounting Controls: Management of the District is responsible for

establishing and maintaining an internal control structure designed to ensure that the

assets of the District are protected from loss, theft and misuse and to ensure that

adequate accounting data are compiled to allow for the presentation of financial

statements in conformity with generally accepted accounting principles (GAAP). The

internal control structure is designed to provide reasonable, but not absolute,

assurance that these objectives are met. The concept of reasonable assurance

recognizes that (1) the cost of a control should not exceed the benefits likely to be

derived and (2) the valuation of costs and benefits require estimate and judgments by

management.

As a recipient of federal and state financial assistance, the District also is responsible

for ensuring that an adequate internal control structure is in place to ensure

compliance with applicable laws and regulations related to those programs. This

internal control structure is also subject to periodic evaluation by the District

management.

As part of the District’s single audit described earlier, tests are made to determine the

adequacy of the internal control structure, including that portion related to federal and

state financial assistance programs, as well as to determine that the District has

complied with applicable laws and regulations.

5) Budgetary Controls: In addition to internal accounting controls, the District

maintains budgetary controls. The objective of these budgetary controls is to ensure

compliance with legal provisions embodied in the annual appropriated budget. Annual

appropriated budgets are adopted for the general fund and the special revenue fund.

The final budget amount as amended for the fiscal year is reflected in the financial

section.

An encumbrance accounting system is used to record outstanding purchasing

commitments on a line item basis. Open encumbrances at year-end are either

canceled or are included as re-appropriations of fund balance in the subsequent year.

Those amounts to be appropriated are reported as reservations of fund balance at

June 30, 2018.

6) Cash Management: The investment policy of the District is guided in large part by

state statute as detailed in “Notes to the Financial Statements”, Note 2. The district

has adopted a cash management plan which requires it to deposit public funds

depositories protected from loss under the provisions of the Governmental Unit Deposit

Protection Act (“GUDPA”) GUDPA was enacted in 1970 to protect Governmental Units

from loss of funds on deposit with failing banking institutions in New Jersey. The law

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requires governmental units to deposit public funds only in public depositories located

in New Jersey, where the funds are secured in accordance with the Act.

7) Risk Management: The Board carries various forms of insurance, including but

not limited to general liability, hazards and theft insurance on property and contents,

fidelity bonds, and student accident. The Board participates in a self-insurance pool

(43 school districts) for workers’ compensation as a member of the Northeast Bergen

County School Board Insurance Group.

8) Other Information - Independent Audit: State statutes require an annual audit by

independent certified public accountants or registered municipal accountants. The

accounting firm of Ferraioli, Wielkotz, Cerullo & Cuva, P.A. was selected by the Board.

In addition to meeting requirements set forth in state statues, the audit also was

designed to meet the requirements of the Title 2 U.S. Code of Federal Regulations, Part

2, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for

Federal Awards (Uniform Guidance), and the schedule of expenditures of state financial

assistance as required by NJ OMB 15-08. The auditor’s report on the general-purpose

financial statements and combined and individual fund statement and schedules is

included in the financial section of this report. The auditor’s report relates specifically

to the single audits are included in the single audit section of this report.

9) Acknowledgements: We would like to express our appreciation to the members

of the Englewood Cliffs School Board for their concern in providing fiscal accountability

to the citizens and taxpayers of the school district and thereby contributing their full

support to the development and maintenance of our financial operations. The

preparation of this report could not have been accomplished without the efficient and

dedicated services of our financial and accounting staff.

Respectfully submitted,



Superintendent of Schools School Business Administrator/

Board Secretary

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BOROUGH OF ENGLEWOOD CLIFFS SCHOOL DISTRICT

ROSTER OF OFFICIALS

JUNE 30, 2018

TermMembers of the Board of Education Expires

Frank Patti, Jr., President 2019

Marisa R. Pichigian, Vice President 2017

Eugene Chang 2017

Audrey Yon Ho Choi 2017

George Drimones 2018

Edmond Duda 2018

Shanna S. Jafri 2018

Ankur Pandya 2019

Susan Pak 2019

Other Officials

Jennifer Brower, Superintendent of Schools

Siobhan Tauchert, Principal

Sue Anne Mather, Board Secretary/Business Administrator

Charles A. Hangley, Treasurer of School Monies

Stephen R. Fogarty, Esq., Solicitor

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CONSULTANTS AND ADVISORS

AUDIT FIRM

Ferraioli, Wielkotz, Cerullo & Cuva, P.A.Certified Public Accountants

401 Wanaque AvenuePompton Lakes, NJ 07442

ATTORNEY

Fogarty & HaraAttorneys at Law

21-00 Route 208 SouthFair Lawn, NJ 07410

OFFICIAL DEPOSITORY

Connect One Bank180 Sylvan Avenue

Englewood Cliffs, NJ 07632

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FINANCIAL SECTION

Ferraioli, Wielkotz, Cerullo & Cuva, P.A.Charles J. Ferraioli, Jr., MBA, CPA, RMA Certified Public Accountants Newton Office Steven D. Wielkotz, CPA, RMA 401 Wanaque Avenue 100B Main Street James J. Cerullo, CPA, RMA Pompton Lakes, New Jersey 07442 Newton, NJ 07860Paul J. Cuva, CPA, RMA 973-835-7900 973-579-3212Thomas M. Ferry, CPA, RMA Fax 973-835-6631 Fax 973-579-7128

INDEPENDENT AUDITOR'S REPORT

Honorable President andMembers of the Board of EducationBorough of Englewood Cliffs School DistrictCounty of Bergen, New Jersey

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the Board of Educationof the Borough of Englewood Cliffs School District, in the County of Bergen, State of New Jersey, as ofand for the year ended June 30, 2018, and the related notes to the financial statements, whichcollectively 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 inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatements, whether due to fraud orerror.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica, the audit requirements prescribed by the Office of School Finance, Department of Education,State of New Jersey, and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement.

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Honorable President andMembers of the Board of EducationPage 2.

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

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

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities, business-type activities, each major fund,and the aggregate remaining fund information of the Borough of Englewood Cliffs Board of Education,in the County of Bergen, State of New Jersey, as of June 30, 2018, and the respective changes infinancial position and, where applicable, cash flows thereof for the year then ended in accordance withaccounting principles generally accepted in the United States of America.

Emphasis of Matter

Change in Accounting Principle

As discussed in Note 1 to the basic financial statements, in 2018, the Board adopted GovernmentalAccounting Standards Board Statement No. 75, Accounting and Financial Reporting forPostemployment Benefits Other Than Pensions (an Amendment of GASB Statement No. 45). Ouropinions are not modified with respect to this matter.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that theManagement’s Discussion and Analysis, Budgetary Comparison Information, and schedules related toaccounting and reporting for pensions identified in the table of contents be presented to supplement thebasic financial statements. Such information, although not a part of the basic financial statements, isrequired by the Governmental Accounting Standards Board who considers it to be an essential part ofthe financial reporting for placing the basic financial statements in an appropriate operational,

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economic, or historical context. We have applied certain limited procedures to the requiredsupplementary information in accordance with auditing standards generally accepted in the UnitedStates of America, which consisted of inquiries of management about the methods of preparing theinformation and comparing the information for consistency with management’s responses to ourinquiries, the basic financial statements, and other knowledge we obtained during our audit of the basicfinancial statements. We do not express an opinion or provide any assurance on the informationbecause the limited procedures do not provide us with sufficient evidence to express an opinion orprovide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the Borough of Englewood Cliffs Board of Education’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedule ofexpenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200,Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance) and the schedule of expenditures of state financial assistance as required by NJOMB 15-08 and statistical section are presented for purposes of additional analysis and are not arequired part of the basic financial statements.

The combining and individual nonmajor fund financial statements and the schedule of expenditures offederal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, UniformAdministrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (UniformGuidance) and the schedule of expenditures of state financial assistance as required by NJ OMB 15-08are the responsibility of management and were derived from and relates directly to the underlyingaccounting and other records used to prepare the basic financial statements. Such information has beensubjected to the auditing procedures applied in the audit of the basic financial statements and certainadditional procedures, including comparing and reconciling such information directly to the underlyingaccounting and other records used to prepare the basic financial statements or to the basic financialstatements themselves, and other additional procedures in accordance with auditing standards generallyaccepted in the United States of America. In our opinion, the combining and individual nonmajor fundfinancial statements, schedule of expenditures of federal awards, as required by Title 2 U.S. Code ofFederal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards (Uniform Guidance), and the schedule of expenditures of statefinancial assistance as required by NJ OMB 15-08 are fairly stated, in all material respects, in relation tothe basic financial statements as a whole.

The introductory section and statistical data section has not been subject to the auditing proceduresapplied in the audit of the basic financial statements, and accordingly, we do not express an opinion orprovide any assurance on it.

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Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated January 22,2019 on our consideration of the Borough of Englewood Cliffs Board of Education’s internal controlover financial reporting and on our tests of its compliance with certain provisions of laws, regulations,contracts, and grant agreements and other matters. The purpose of that report is to describe the scope ofour testing of internal control over financial reporting and compliance and the results of that testing, andnot 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 consideringthe Borough of Englewood Cliffs Board of Education’s internal control over financial reporting andcompliance.

Steven D. Wielkotz, C.P.A.Licensed Public School AccountantNo. 816

FERRAIOLI, WIELKOTZ, CERULLO & CUVA, P.A.Certified Public AccountantsPompton Lakes, New Jersey

January 22, 2019

Steven D. Wielkotz

Ferraioli, Wielkotz, Cerullo & Cuva,P.A.

-11-

REQUIRED SUPPLEMENTARY

INFORMATION - PART I

BOROUGH OF ENGLEWOOD CLIFFS BOARD OF EDUCATIONENGLEWOOD CLIFFS, NJ

MANAGEMENT’S DISCUSSION AND ANALYSISFOR THE FISCAL YEAR ENDED JUNE 30, 2018

The discussion and analysis of the Borough of Englewood Cliffs Board of Education’s financial performanceprovides an overall review of the School District’s financial activities for the fiscal year ended June 30,2018. The intent of this discussion and analysis is to look at the District’s financial performance as a wholeand should not be interpreted as a replacement for the audit which consists of the financial statements andother supplemental information that presents all the District’s revenues and expenditures by program for theGeneral Fund, Special Revenue Fund, Capital Projects Fund, Enterprise Fund.

FINANCIAL HIGHLIGHTS

• In total, net position increased $197,588. Net position of governmental activities increased $192,073and net position of business-type activity increased by $5,515.

• General revenues accounted for $16,809,480 in revenue or 98 percent of all district revenues. Program specific revenues in the form of charges for services and sales, grants and contributionsaccounted for $364,936 or 2 percent of total revenues of $17,174,416.

• The School District had $16,932,471 in expenses related to governmental activities; only $315,064of these expenses were offset by program specific charges for services, grants or contributions. General revenues (primarily grants, entitlements and property taxes) of $16,617,407 were adequateto provide for these programs.

USING THIS ANNUAL REPORT

This annual report consists of a series of financial statements and notes to those statements. The statementsare organized so the reader can understand the District as a whole (district-wide statements), and thenproceed to provide an increasingly detailed look at specified financial activities.

District-Wide Financial Statements

The statement of net position and statement of activities reports information about the District as a wholeand about its activities in a manner that helps answer the question, “Is the District better or worse off as aresult of the year’s activities?” These statements include all assets and liabilities of the District using theaccrual basis of accounting, similar to the accounting used by private sector corporations. All of the currentyear’s revenues and expenses are taken into consideration regardless of when cash is received or paid.

-12-



(CONTINUED)

USING THIS ANNUAL REPORT, (continued)

Both of the district-wide financial statements distinguish functions of the Borough of Englewood CliffsBoard of Education that are principally supported by taxes and intergovernmental revenues (governmentalactivities) from other functions that are intended to recover all or a significant portion of their costs throughuser fees and charges (business-type activities).

In the Statement of Net Position and the Statement of Activities, the District is divided into two distinct kindsof activities:

C Governmental Activities – All of the school district’s programs and services are reported hereincluding instruction, support services, operation and maintenance of plant facilities, pupiltransportation and extracurricular activities.

C Business-type Activity – This service is provided on a charge for goods and services basis to recoverall the expenses of the goods or services provided. The Special Milk Fund and Enrichment Programare reported as business activities.

The two statements report the District’s net position and changes in them. The change in net position canbe utilized by a reader to assist in determining whether the District’s financial health is improving ordeteriorating. However, the reader should also consider non-financial factors such as property tax base,current New Jersey laws restricting revenue growth, student enrollment growth, facility conditions, requirededucational programs and other factors in determining the District’s overall financial health.

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources that have beensegregated for specific activities or objectives. The Borough of Englewood Cliffs Board of Education, likeother state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the district’s funds can be divided into three categories: GovernmentalFunds, Proprietary Funds and Fiduciary Funds.

Governmental Funds

Governmental funds are used to account for essentially the same functions reported as governmentalactivities in the district-wide financial statements. However, unlike the district-wide financial statements,governmental fund financial statements focus on near-term inflows and outflows of spendable resources,as well as on balances of spendable resources available at the end of the fiscal year. These funds arereported using an accounting method called modified accrual accounting, which measures cash and all otherfinancial assets that can be readily converted to cash.

Because the focus of governmental funds is narrower than that of the district-wide financial statements, itis useful to compare the information presented for governmental funds with similar information presentedfor governmental activities in the district-wide financial statements. By doing so, readers may betterunderstand the long-term impact of the District’s near-term financing decisions. Both the governmental fundbalance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balancesprovide a reconciliation to facilitate this comparison between governmental funds and governmentalactivities (reported in the Statement of Net Position and the Statement of Activities).

-13-



(CONTINUED)

USING THIS ANNUAL REPORT, (continued)

The Borough of Englewood Cliffs Board of Education maintains four individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmentalstatement of revenues, expenditures and changes in fund balances for the general, special revenue, capitalprojects funds, and debt service funds, which are both considered to be major funds.

The Borough of Englewood Cliffs Board of Education adopts annual appropriated budgets for itsgovernmental funds. A budgetary comparison statement has been provided for the general, special revenue,and debt service funds to demonstrate compliance with their budgets.

Proprietary Funds

Proprietary funds use the accrual basis of accounting, the same as on the district-wide statements, thereforethe statements will essentially match the business-type activities portion of the district-wide statements. TheBorough of Englewood Cliffs Board of Education uses proprietary funds to account for its special milk andenrichment programs.

Fiduciary Funds

Fiduciary funds are used to account for resources held for the benefit of parties outside the District. Theseactivities are excluded from the District’s other financial statements because the assets cannot be utilizedby the District to finance its operations.

Notes to the Financial Statements

The notes provide additional information that is essential to a full understanding of the data provided in thedistrict-wide and fund financial statements.

Other Information

In addition to the basic financial statements and accompanying notes, this report also presents certainrequired supplementary information concerning budgetary information for the District’s major funds.

Our auditor has provided assurance in his independent auditor’s report, located immediately preceding thisManagement’s Discussion and Analysis, that the Basic Financial Statements are fairly stated. Varyingdegrees of assurance are being provided by the auditor regarding the Required Supplemental Informationand the Supplemental Information identified above. A user of this report should read the independentauditor’s report carefully to ascertain the level of assurance being provided for each of the other parts in theFinancial Section.

-14-



(CONTINUED)

DISTRICT-WIDE FINANCIAL ANALYSIS

The Statement of Net Position provides the perspective of the District as a whole. Net position may, over time,serve as a useful indicator of a government’s financial position.

The District’s financial position is the product of several financial transactions including the net results of activities,the acquisition and payment of debt, the acquisition and disposal of capital assets and the depreciation of capitalassets.

The School District’s net position was $2,142,668 at June 30, 2018. Restricted net position is reported separatelyto show legal constraints that limit the School District’s ability to use the net position for day-to-day operations. Our analysis below focuses on the net position (Table 1) and change in net position (Table 2) of the School District.

Table 1

Net PositionJune 30,

Governmental Activities Business-Type Activities Total

2018 2017 2018 2017 2018 2017

Assets

Current and Other Assets 3,451,904 3,896,517 32,885 20,877 3,484,789 3,917,394

Capital Assets 4,047,226 3,451,991 4,047,226 3,451,991

Total Assets 7,499,130 7,348,508 32,885 20,877 7,532,015 7,369,385

Deferred Outflows:

Deferred Outflows of Resources

Related to PERS 1,589,048 2,159,865 1,589,048 2,159,865

Total Deferred Outflows 1,589,048 2,159,865 1,589,048 2,159,865

Liabilities

Other Liabilities 376,098 339,151 6,793 300 382,891 339,451

Noncurrent Liabilities 5,701,115 7,119,897 5,701,115 7,119,897

Total Liabilities 6,077,213 7,459,048 6,793 300 6,084,006 7,459,348

Deferred Inflows:

Deferred Inflows of Resources

Related to PERS 894,389 124,822 894,389 124,822

Total Deferred Outflows 894,389 124,822 894,389 124,822

Net Position

Invested in Capital Assets 2,697,226 1,766,991 2,697,226 1,766,991

Restricted 3,058,563 3,506,024 3,058,563 3,506,024

Unrestricted (3,639,213) (3,348,512) 26,092 20,577 (3,613,121) (3,327,935)

Total Net Position 2,116,576 1,924,503 26,092 20,577 2,142,668 1,945,080

-15-



(CONTINUED)

DISTRICT-WIDE FINANCIAL ANALYSIS, (continued)

Table 2

Changes in Net PositionYear Ended June 30,


2018 2017 2018 2017 2018 2017

Revenues

Program Revenues:

Charges for Services and Sales 47,403 49,029 47,403 49,029

Operating Grants and Contributions 315,064 269,287 2,469 2,883 317,533 272,170

General Revenues:

Taxes:

Property taxes, levied for general

purposes 12,963,634 12,421,223 12,963,634 12,421,223

Property taxes, levied for debt services 267,829 265,370 267,829 265,370

Federal and State Aid not Restricted 3,120,148 1,877,119 3,120,148 1,877,119

Tuition Received 230,500 300,427 230,500 300,427

Miscellaneous Income 227,369 98,309 227,369 98,309

Total Revenues and Transfers 17,124,544 15,231,735 49,872 51,912 17,174,416 15,283,647

-16-



(CONTINUED)



2018 2017 2018 2017 2018 2017

Functions/Program Expenses

Instruction:

Regular 4,750,188 4,543,476 4,750,188 4,543,476

Special Education 1,118,449 1,468,399 1,118,449 1,468,399

Other Special Instruction 170,063 182,652 170,063 182,652

Other Instruction 14,891 24,292 14,891 24,292

Support Services:

Tuition 2,021,273 1,973,131 2,021,273 1,973,131

Student & Instruction Related Services 2,211,348 2,225,026 2,211,348 2,225,026

General Administrative Services 471,737 456,753 471,737 456,753

School Administrative Services 230,683 207,811 230,683 207,811

Central Administration 264,369 347,766 264,369 347,766

Administrative Information Technology 172,582 157,717 172,582 157,717

Plant Operations and Maintenance 1,051,907 1,038,254 1,051,907 1,038,254

Pupil Transportation 928,621 906,858 928,621 906,858

Unallocated Benefits 2,998,814 1,205,340 2,998,814 1,205,340

Capital Outlay - nondepreciable 202,379 5,993 202,379 5,993

Food Service 3,815 6,141 3,815 6,141

Enrichment Program: 40,542 26,842 40,542 26,842

Debt Service:

Interest and Other Charges 4,771 66,864 4,771 66,864

Bond Issuance Costs 49,000 0 49,000

Unallocated Depreciation 320,396 302,877 320,396 302,877

Total Expenses 16,932,471 15,162,209 44,357 32,983 16,976,828 15,195,192

Increase or (Decrease) in

Net Position 192,073 69,526 5,515 18,929 197,588 88,455

-17-



(CONTINUED)


Governmental and Business- Activities

As reported in the Statement of Activities the cost of all of our governmental and business-type activitiesthis year was $16,932,471. However, the amount that our taxpayers ultimately financed for these activitiesthrough School District taxes was only $13,231,463 because some of the cost was paid by those whobenefitted from the programs $47,403 by other governments and organizations who subsidized certainprograms with grants and contributions $317,533, unrestricted federal and state aid $3,120,148, tuition$230,500, and by miscellaneous sources of $227,369.

Revenues for the District’s business-type activities (special milk and enrichment programs) were comprisedof charges for services and federal and state subsidy reimbursements. Significant financial results includethe following:

T Special milk, enrichment and Invengineering program revenues exceeded expenses by $5,515.

T Charges for services provided totaled $47,403. This represents amounts paid by consumers for dailymilk purchases, tuition payments and program fees.

T Federal and state reimbursement for milks served was $2,469.

MAJOR GOVERNMENTAL FUNDS BUDGETING AND OPERATING HIGHLIGHTS

The School District’s budgets are prepared according to New Jersey law, and are based on accounting forcertain transactions on a basis of cash receipts, disbursements and encumbrances. The most significantbudgeted funds are the general fund and the special revenue fund.

During the fiscal year ended June 30, 2018, the School District amended the budgets of these majorgovernmental funds several times. Revisions in the budget were made to recognize revenues that were notanticipated and to prevent over-expenditures in specific line item accounts. Several of these revisions bearnotation:

C TPAF, which is the state’s contribution to the pension fund, is neither a revenue item nor anexpenditures item to the district but is required to be reflected in the financial statements.

C The special revenue fund was increased by $54,020 for increases in federal and state grant awards.

General Fund

The general fund actual revenue was $15,499,694. That amount is $1,658,134 above the final amendedbudget of $13,841,560. The variance between the actual revenues and final budget was the result of non-budgeted on-behalf payments of $1,458,172 for TPAF social security reimbursements and on-behalf pensionpayments, $88,207 for additional extraordinary state aid, $35,231 in additional other unrestricted state aid,and $76,524 in excess miscellaneous anticipated revenues.

-18-



(CONTINUED)

MAJOR GOVERNMENTAL FUNDS BUDGETING AND OPERATING HIGHLIGHTS, (continued)

General Fund, (continued)

The actual expenditures of the general fund were $16,000,348 which is $191,822 below the final amendedbudget of $16,192,170. The variance between the actual expenditures and final budget was due to non-budget on-behalf TPAF social security and pension payments of $1,458,172 and $1,649,994 of unexpendedbudgeted funds.

Special Revenue Fund

The special revenue fund actual revenue was $229,723. That amount is above the original budget estimateof $208,041 and below the final amended budget. The $54,020 variance between the original and finalbudget was due to additional federal and state grant monies awarded to the District after the original budgetwas approved. The $32,338 variance between the final amended budget and the June 30, 2018 actual resultswas due to the deferral of Federal grants received in the current fiscal year to be spent in the next fiscal year.

The actual expenditures of the special revenue fund were $229,173, which is above the original budget of$208,041 and below the final amended budget. The $54,020 variance between the original and final budgetwas due to additional expenditures related to the additional grants awarded to the District after the originalbudget was approved. The $32,338 variance between the final amended budget and the June 30, 2018 actualresults was due to the anticipation of fully expending federal grant programs. Expenditures will be incurred in the next fiscal year.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At the end of fiscal year 2018 the School District had $10,218,844 invested in sites, buildings, equipmentand construction in progress. Of this amount, $6,171,618 in depreciation has been taken over the years. Wecurrently have a net book value of $4,047,226. Total additions for the year were $934,288 for buildingimprovements, machinery, equipment and construction in progress. Table 3 shows fiscal year 2018 balancescompared to 2017.

Table 3Capital Assets at June 30,

(Net of Depreciation)

Governmental ActivitiesBusiness-Type

Activities Total2018 2017 2018 2017 2018 2017

Site Improvements 27,859 35,074 27,859 35,074

Buildings and Building Improvements 3,266,821 3,388,583 3,266,821 3,388,583

Machinery and Equipment 48,609 28,334 48,609 28,334

Construction in Progress 703,937 703,937

4,047,226 3,451,991 4,047,226 3,451,991

-19-



(CONTINUED)

Debt Administration

At June 30, 2018, the district had $5,701,115 of outstanding debt. Of this amount, $361,368 is forcompensated absences, $1,350,000 in school bonds payable, and $3,989,747 is for the net pension liability.

Table 4Outstanding Serial Bonds at June 30,

2018 2017

2006 School Bonds 2017 School Refunding Bonds 1,350,000 1,685,000

1,350,000 1,685,000

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS

Due to the current state of the economy in New Jersey and across the country, our economic outlook is notas bright as we would hope. This economic reality will have an impact on our ability to advance ourprogram and educational goals. These factors will be considered in preparing the Borough of EnglewoodCliffs Board of Education’s budget for the 2018-2019 fiscal year.

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of the Borough of Englewood Cliffs Boardof Education’s finances for all those with an interest in the government’s finances. Questions concerningany of the information provided in this report or requests for additional information should be addressed to:

Sue Anne MatherSchool Business Administrator/Board SecretaryBorough of Englewood Cliffs Board of Education143 Charlotte PlaceEnglewood Cliffs, New Jersey 07632

-20-

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

Exhibit A-1

Governmental Business-type

Activities Activities Total

ASSETS

Cash and cash equivalents 1,203,670 32,368 1,236,038

Receivables, net 315,567 517 316,084

Restricted assets:

Various reserve accounts - cash 1,932,667 1,932,667

Capital assets, net:

Construction in progress 703,937 703,937

Other capital assets, net 3,343,289 - 3,343,289

Total Assets 7,499,130 32,885 7,532,015

Deferred Outflow of Resources:

Deferred outflows of resources related to PERS 1,589,048 1,589,048

Total Deferred Outflows 1,589,048 - 1,589,048

LIABILITIES

Accounts payable and accrued liabilities 322,378 6,793 329,171

Payable to state government 13,095 13,095

Unearned revenue 40,625 40,625

Noncurrent liabilities:

Due within one year 330,000 330,000

Due beyond one year 5,371,115 5,371,115

Total liabilities 6,077,213 6,793 6,084,006

Deferred Inflow of Resources:

Deferred inflows of resources related to PERS 894,389 894,389

Total Deferred Inflows 894,389 - 894,389

NET POSITION

Invested in capital assets 2,697,226 2,697,226

Restricted for:

Capital Projects 1,429,462 1,429,462

Debt Service 196,974 196,974

Other Purposes 1,432,127 1,432,127

Unrestricted (Deficit) (3,639,213) 26,092 (3,613,121)

Total net position 2,116,576 26,092 2,142,668

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

ENGLEWOOD CLIFFS BOARD OF EDUCATION

Statement of Net Position

June 30, 2018

-21-

Exh

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Cap

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-22-

FUND FINANCIAL STATEMENTS

Exhibit B-1

Special Debt Total

General Revenue Service Governmental

Fund Fund Fund Funds

ASSETS

Cash and cash equivalents 998,757 7,939 196,974 1,203,670

Receivables, interfund 220 220

Receivables, state 302,003 302,003

Receivables, federal 13,344 13,344

Restricted cash and cash equivalents 1,932,667 1,932,667

Total assets 3,233,647 21,283 196,974 3,451,904

LIABILITIES AND FUND BALANCES

Liabilities:

Accounts payable 143,631 8,188 151,819

Payable to state government 13,095 13,095

Unearned revenue 40,625 40,625

Total liabilities 184,256 21,283 - 205,539

Fund Balances:

Restricted for:

Maintenance reserve 253,205 253,205

Emergency reserve 250,000 250,000

Capital reserve account 1,429,462 1,429,462

Debt service 196,974 196,974

Assigned to:

Other Purposes 928,922 928,922

Unassigned:

General fund 187,802 187,802

Total Fund balances 3,049,391 - 196,974 3,246,365

Total liabilities and fund balances 3,233,647 21,283 196,974

Amounts reported for governmental activities in the statement of

net assets (A-1) are different because:

Capital assets used in governmental activities are not financial

resources and therefore are not reported in the funds. The cost

of the assets is $10,216,844 and the accumulated depreciation

is $6,169,618 4,047,226

Accrued interest on serial bonds payable is not due and payable in the

current period and is not reported as a liability in the funds (8,606)

Accounts payable for subsequent Pension payment is not a payable

in the funds (161,953)

Deferred outflows and inflows of resources are applicable to future periods

and therefore are not reported in the funds.

Deferred outflows of resources related to PERS Pension Liability 1,589,048

Deferred inflows of resources related to PERS Pension Liability (894,389)

Long-term liabilities are not due and payable in the

current period and therefore are not reported as

liabilties in the funds (see Note 3) (5,701,115)

Net assets of governmental activities 2,116,576


Balance Sheet

Governmental Funds

June 30, 2018


-23-

Exhibit B-2

Special Debt Total

General Revenue Service Governmental

Fund Fund Fund Funds

REVENUES

Local sources:

Local tax levy 12,963,634 267,829 13,231,463

Tuition 230,500 230,500

Miscellaneous 223,024 4,345 227,369

Total - Local Sources 13,417,158 - 272,174 13,689,332

State sources 2,079,574 12,159 91,611 2,183,344

Federal sources 211,294 211,294

Total revenues 15,496,732 223,453 363,785 16,083,970

EXPENDITURES

Current:

Regular instruction 3,731,001 133,883 3,864,884

Special education instruction 867,661 867,661

Other special instruction 129,158 129,158

Other instruction 14,891 14,891

Support services and undistributed costs:

Tuition 2,021,273 2,021,273

Student & instruction related services 1,704,234 89,570 1,793,804

School administrative services 179,587 179,587

General administrative services 400,529 400,529

Central Services 211,287 211,287

Administrative information tech. services 152,526 152,526

Plant operations and maintenance 914,308 914,308

Pupil transportation 908,488 908,488

Unallocated benefits 2,170,566 2,170,566

On-behalf contributions 1,458,172 1,458,172

Capital Outlay 1,136,667 - 1,136,667

Debt Service:

Principal 335,000 335,000

Interest and other Charges 20,705 20,705

Total expenditures 16,000,348 223,453 355,705 16,579,506

Excess (Deficiency) of revenues

over expenditures (503,616) - 8,080 (495,536)

Net change in fund balances (503,616) - 8,080 (495,536)

Fund balance—July 1 3,553,007 188,894 3,741,901

Fund balance—June 30 3,049,391 - 196,974 3,246,365


Statement of Revenues, Expenditures, and Changes in Fund Balances

Governmental Funds

Fiscal Year Ended June 30, 2018


-24-

Exhibit B-3

Total net change in fund balances - governmental funds (from B-2) (495,536)

Amounts reported for governmental activities in the statement

of activities (A-2) are different because:

Capital outlays are reported in governmental funds as expenditures. However, in the statement of

activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense.

This is the amount by which capital outlays exceeded depreciation in the period.

Depreciation expense (339,053)

Depreciable Capital outlays - Fund 11

Depreciable Capital outlays - Fund 12 934,288

595,235

Repayment of long-term debt is reported as an expenditure in the governmental funds, but the repayment

reduces long-term liabilities in the statement of net assets and is not reported in the statement

of activities. In the current year, these amounts consist of:

Principal payment on serial bonds 335,000

In the statement of activities, interest on long-term debt is accrued, regardless of when due.

In the governmental funds, interest is reported when due. The accrued interest is a subtraction in

the reconciliation.(-)

General Bond Obligations - Prior Year 24,540

General Bond Obligations (8,606)

15,934

In the statement of activities, certain operating expenses, e.g., compensated absences (vacations) are

measured by the amounts earned during the year. In the governmental funds, however, expenditures

for these items are reported in the amount of financial resources used (paid). When the earned amount

exceeds the paid amount, the difference is reduction in the reconciliation (-); when the paid amount

exceeds the earned amount the difference is an addition to the reconciliation (+).

Increase in compensated absences payable (6,404)

District pension contributions are reported as expenditures in the governmental funds when made.

However, per GASB No. 68 they are reported as deferred outflows of resources in the Statement of

Net Position because the reported net pension liability is measured a year before the District's report

date. Pension expense, which is the change in the net pension liability adjusted for changed in deferred

outflows and inflows of resources related to pensions, is reported in the Statement of Activities.

District Pension Contributions 158,777

Less: Pension Expense (410,933)

(Increase)/Decrease in Pension Expense (252,156)

Per GASB No. 68, Non-employer contributing entities are required to record any increases in revenue

and expense for On-behalf TPAF pension payments paid by the State of New Jersey on the Statement

of Activities that are in excess of those amounts reported in the fund financial statements.

Increase in On-behalf State Aid TPAF Pension 1,412,776

Increase in On-behalf TPAF Pension Expense (1,412,776)

Per GASB No. 75 Non-employer contributing entities are required to record an increases in revenue and

expense for On-behalf TPAF post employment medical payments paid by the State of New Jersey on the

Statement of Activities that are in excess of those amounts reported in the fund financial statements

Increase in On-behalf State Aid TPAF Post Employment Medical Revenue 1,040,574

Increase in On-behalf State Aid TPAF Post Employment Medical Expense (1,040,574)

192,073



Reconciliation of the Statement of Revenues, Expenditures,

and Changes in Fund Balances of Governmental Funds

to the Statement of Activities


-25-

Exhibit B-4

Special Milk Enrichment

Program Program Totals

ASSETS

Current assets:

Cash and cash equivalents 1,507 30,861 32,368

Accounts receivable:

Federal 517 517

Total current assets 2,024 30,861 32,885

Noncurrent assets:

Capital assets:

Equipment 2,000 2,000

Less accumulated depreciation (2,000) (2,000)

Total capital assets (net of accumulated

depreciation) - - -

Total assets 2,024 30,861 32,885

LIABILITIES

Current liabilities:

Accounts Payable 728 6,065 6,793

Total current liabilities 728 6,065 6,793

NET POSITION

Unrestricted 1,296 24,796 26,092

Total net position 1,296 24,796 26,092



Statement of Net Position

Proprietary Funds

June 30, 2018

-26-

Exh

ibit

B-5

Sp

ecia

l M

ilk

En

rich

men

tIn

ven

gin

eeri

ng

Pro

gra

mP

rogra

mP

rogra

mT

ota

ls

Op

erat

ing r

even

ues

:

Ch

arges

for

serv

ices

:

D

aily

sal

es -

rei

mburs

able

pro

gra

ms

2,1

58

2,1

58

T

uit

ion C

har

ges

42,0

95

3,1

50

45,2

45

T

ota

l oper

atin

g r

even

ues

2,1

58

42,0

95

3,1

50

47,4

03

Op

erat

ing e

xpen

ses:

Co

st o

f sa

les

- re

imburs

able

pro

gra

ms

3,8

15

3,8

15

Sal

arie

s an

d w

ages

26,9

44

2,1

75

29,1

19

Su

pp

lies

and m

ater

ials

10,4

48

975

11,4

23

T

ota

l O

per

atin

g E

xpen

ses

3,8

15

37,3

92

3,1

50

44,3

57

Oper

atin

g i

nco

me

(loss

)(1

,65

7)

4,7

03

-

3,0

46

No

no

per

atin

g r

even

ues

(ex

pen

ses)

:

Fed

eral

sourc

es:

S

pec

ial

mil

k p

rogra

m2

,46

9

-

2,4

69

T

ota

l nonoper

atin

g r

even

ues

(ex

pen

ses)

2,4

69

-

-

2,4

69

Inco

me

(loss

) bef

ore

contr

ibu

tio

ns

& t

ran

sfer

s8

12

4,7

03

5,5

15

Chan

ge

in n

et p

osi

tion

81

2

4,7

03

5,5

15

To

tal

net

po

siti

on-b

egin

nin

g4

84

20,0

93

20,5

77

To

tal

net

po

siti

on—

endin

g1

,29

6

24,7

96

-

26,0

92

Th

e a

cco

mp

an

yin

g N

ote

s to

Fin

an

cial

Sta

tem

ents

are

an

in

teg

ral

pa

rt o

f th

is s

tate

men

t.

EN

GL

EW

OO

D C

LIF

FS

BO

AR

D O

F E

DU

CA

TIO

N

Sta

tem

ent

of

Rev

enu

es, E

xp

ense

s, a

nd

Ch

an

ges

in

Fu

nd

Net

Posi

tion

Pro

pri

eta

ry F

un

ds

Fis

cal

Yea

r E

nd

ed J

un

e 3

0, 2

01

8

-27-

Ex

hib

it B

-6

Sp

ecia

l M

ilk

En

rich

men

tIn

ven

gin

eeri

ng

Pro

gra

mP

rog

ram

Pro

gra

mT

ota

ls

CA

SH

FL

OW

S F

RO

M O

PE

RA

TIN

G A

CT

IVIT

IES

Rec

eipts

fro

m c

ust

om

ers

2,1

58

4

2,0

95

3,1

50

4

4,2

53

Pay

men

ts f

or

mil

k p

urc

has

es(3

,38

7)

(3

,38

7)

Pay

men

ts f

or

sala

ries

and w

ager

s(2

6,7

17

)

(2,1

75

)

(2

6,7

17

)

Pay

men

ts f

or

suppli

es(4

,61

0)

(97

5)

(4,6

10

)

Net

cas

h p

rovid

ed b

y (

use

d f

or)

oper

atin

g a

ctiv

itie

s(1

,22

9)

1

0,7

68

-

9,5

39

CA

SH

FL

OW

S F

RO

M N

ON

CA

PIT

AL

FIN

AN

CIN

G A

CT

IVIT

IES

Fed

eral

sourc

es2

,70

4

-

-

2,7

04

Net

cas

h p

rovid

ed b

y (

use

d f

or)

non

-cap

ital

fin

anci

ng a

ctiv

itie

s2

,70

4

-

-

2,7

04

N

et i

ncr

ease

(d

ecre

ase)

in

cas

h a

nd

cas

h e

qu

ival

ents

1,4

75

1

0,7

68

-

12

,24

3

Bal

ance

s—beg

innin

g o

f yea

r3

2

2

0,0

93

-

20

,12

5

Bal

ance

s—en

d o

f yea

r1

,50

7

30

,86

1

-

3

2,3

68

Rec

on

cili

ati

on

of

op

erati

ng i

nco

me

(lo

ss)

to n

et c

ash

pro

vid

ed

(

use

d)

by

op

erati

ng a

ctiv

itie

s:

Oper

atin

g i

nco

me

(loss

)(1

,65

7)

4

,70

3

-

3,0

46

Adju

stm

ents

to r

econci

le o

per

atin

g i

nco

me

(loss

) to

net

cas

h p

rovid

ed b

y-

(use

d f

or)

op

erat

ing a

ctiv

itie

s-

Incr

ease

(d

ecre

ase)

in

acc

ou

nts

pay

able

42

8

6,0

65

6

,49

3

Tota

l ad

just

men

ts4

28

6

,06

5

-

6,4

93

Net

cas

h p

rovid

ed b

y (

use

d f

or)

oper

atin

g a

ctiv

itie

s(1

,22

9)

1

0,7

68

-

9,5

39

Th

e acc

om

pan

yin

g N

ote

s to

Fin

an

cia

l S

tate

men

ts a

re a

n i

nte

gra

l p

art

of

this

sta

tem

ent.

EN

GL

EW

OO

D C

LIF

FS

BO

AR

D O

F E

DU

CA

TIO

N

Sta

tem

ent

of

Ca

sh F

low

s

Pro

pri

eta

ry F

un

ds

Fis

cal

Yea

r E

nd

ed J

un

e 3

0,

20

18

-28-

Exhibit B-7

Agency

Fund

ASSETS

Cash and cash equivalents 277,889

Total assets 277,889

LIABILITIES

Payable to student groups 6,707

Payroll deductions and withholdings 70,483

Net payroll - summer pay 196,378

Flexible spending 4,101

Interfund - General Fund 220

Total liabilities 277,889

an integral part of this statement.


Statement of Fiduciary Net Position

Fiduciary Funds

June 30, 2018

The accompanying Notes to Financial Statements are

-29-

NOTES TO THE FINANCIAL STATEMENTS

Borough of Englewood Cliffs School DistrictNotes to the Basic Financial Statementsfor the fiscal year ended June 30, 2018

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Board of Education of the Borough of Englewood Cliffs School District havebeen prepared in conformity with accounting principles generally accepted in the United States of America(GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is theaccepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the board’s accounting policies are described below.

A. Description of the School District and Reporting Entity:

The Board of Education (“Board”) of the Borough of Englewood Cliffs School District (“District”) is aninstrumentality of the State of New Jersey, established to function as an educational institution. TheBorough of Englewood Cliffs School District is a Type II district located in the County of Bergen, State ofNew Jersey. As a Type II district, the School District functions independently through a Board of Education. The board is comprised of nine members elected to three-year terms. The purpose of the District is toeducate students in grades K-8. A superintendent is appointed by the Board and is responsible for theadministrative control of the District. Under existing statutes, the Board’s duties and powers include, butare not limited to, the development and adoption of a school program; the establishment, organization andoperation of schools; and the acquisition, maintenance and disposition of school property.

The Board also has broad financial responsibilities, including the approval of the annual budget and theestablishment of a system of accounting and budgetary controls.

Governmental Accounting Standards Board publication, Codification of Governmental Accounting andFinancial Reporting Standards, Section 2100, “Defining the Financial Reporting Entity” establishesstandards to determine whether a governmental component unit should be included in the financial reportingentity. The basic criterion for inclusion or exclusion from the financial reporting entity is the exercise ofoversight responsibility over agencies, boards and commissions by the primary government. The exerciseof oversight responsibility includes financial interdependency and a resulting financial benefit or burdenrelationship, selection of governing authority, designation of management, ability to significantly influenceoperations, and accountability for fiscal matters. In addition, certain legally separate, tax-exempt entitiesthat meet specific criteria (i.e. benefit of economic resources, access/entitlement to economic resources, andsignificance) should be included in the financial reporting entity. The combined financial statements includeall funds of the District over which the Board exercises operating control. The operations of the Districtinclude elementary schools and a middle school, located in the Borough of Englewood Cliffs. There wereno additional entities required to be included in the reporting entity under the criteria as described above,in the current fiscal year. Furthermore, the District is not includable in any other reporting entity on the basisof such criteria.

-30-


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)

B. Basis of Presentation:

The Board’s basic financial statements consist of District-wide statements, including a statement of netposition and a statement of activities, and fund financial statements which provide a more detailed level offinancial information.

District-wide Financial Statements:

The statement of net position and the statement of activities display information about the Board as a whole. These statements include the financial activities of the overall District, except for the fiduciary funds. Thestatements distinguish between those activities of the Board that are governmental and those that areconsidered business-type activities.

The statement of net position presents the financial condition of the governmental and business-typeactivities of the Board at year-end. The statement of activities presents a comparison between directexpenses and program revenues for each program or function of the governmental activities and for thebusiness-type activities of the Board. Direct expenses are those that are specifically associated with aservice, program or department and therefore clearly identifiable to a particular function. Program revenuesinclude charges paid by the recipient of the goods or services offered by the program, grants andcontributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues which are not classified as program revenues are presented as general revenues of the Board, withcertain limited exceptions. The comparison of direct expenses with program revenues identifies the extentto which each business segment or governmental function is self-financing or draws from the generalrevenues of the Board.

Fund Financial Statements:

During the fiscal year, the School District segregates transactions related to certain School District functionsor activities in separate funds in order to aid financial management and to demonstrate legal compliance. The fund financial statements provide information about the District’s funds, including its fiduciary funds. Separate statements for each fund category - government, proprietary, and fiduciary - are presented. TheNew Jersey Department of Education (NJDOE) has elected to require New Jersey districts to treat eachgovernmental fund as a major fund in accordance with the option noted in GASB No. 34, paragraph 76. TheNJDOE believes that the presentation of all funds as major is important for public interest and to promoteconsistency among district financial reporting models. The various funds of the Board are grouped into thecategories governmental, proprietary and fiduciary.

-31-



Fund Financial Statements: (continued)

GOVERNMENTAL FUNDS

Governmental funds are those through which most governmental functions of the Board are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for whichthey may or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets and liabilities is reported as fund balance. Thefollowing are the Board’s governmental funds:

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

As required by the New Jersey State Department of Education, the Board includes budgeted CapitalOutlay in this fund. Accounting principles generally accepted in the United States of America as theypertain to governmental entities state that General Fund resources may be used to directly financecapital outlays for long-lived improvements as long as the resources in such cases are derivedexclusively from unrestricted revenues.

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

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

Capital Projects Fund - The Capital Projects Fund is used to account for all financial resources to beused for the acquisition or construction of major capital facilities (other than those financed byProprietary Funds). The financial resources are derived from sale of bonds, lease purchases and otherrevenues.

-32-



Fund Financial Statements: (continued)

GOVERNMENTAL FUNDS, (continued)

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

PROPRIETARY FUNDS

The focus of Proprietary Fund measurement is upon determination of net income, changes in netposition, financial position and cash flows. The accounting principles generally accepted in the UnitedStates of America applicable are those similar to businesses in the private sector. Proprietary funds areclassified as enterprise or internal service; the Board has no internal service funds. The following isa description of the Proprietary Funds of the Board:

Enterprise Funds - The Enterprise Funds are utilized to account for operations that are financed andoperated in a manner similar to private business enterprises -- where the intent of the Board is that thecosts (i.e. expenses including depreciation and indirect costs) of providing goods or services to thestudents on a continuing basis be financed or recovered primarily through user charges; or, where theBoard has decided that periodic determination of revenues earned, expenses incurred, and/or netincome is appropriate for capital maintenance, public policy, management control, accountability orother purposes.

The Board's Enterprise Fund is comprised of the Special Milk, Enrichment and InvengineeringPrograms.

FIDUCIARY FUNDS

Fiduciary Fund - Fiduciary Fund reporting focuses on net position and changes in net position. TheFiduciary Funds are used to account for assets held by the Board on behalf of individuals, privateorganizations, other governments and/or other funds. Fiduciary Funds include UnemploymentCompensation Insurance, Student Activities Fund, Payroll and Payroll Agency Funds.

C. Measurement Focus:

District-wide Financial Statements

The District-wide statements (i.e., the statement of net position and the statement of activities) are preparedusing the economic resources measurements focus and the accrual basis of accounting. All assets andliabilities associated with the operation of the Board are included on the statement of net position, exceptfor fiduciary funds.

-33-



C. Measurement Focus: (continued)

Fund Financial Statements

All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balancesheet. The statement of revenues, expenditures and changes in fund balances reports on the sources (i.e.,revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of currentfinancial resources. This approach differs from the manner in which the governmental activities of theDistrict-wide financial statements are prepared. Governmental fund financial statements therefore includea reconciliation with brief explanations to better identify the relationship between the government-widestatements and the statements for governmental funds.

Like the District-wide statements, all proprietary fund types are accounted for on a flow of economicresources measurement focus. All assets and all liabilities associated with the operation of these funds areincluded on the statement of net position. The statement of changes in fund net position presents increases(i.e., revenues) and decreases (i.e., expenses) in net total position. The statement of cash flows providesinformation about how the Board finances and meets the cash flow needs of its proprietary activities.

D. Basis of Accounting:

Basis of accounting determines when transactions are recorded in the financial records and reported on thefinancial statements. The District-wide financial statements and the financial statements of the proprietaryand fiduciary funds are prepared using the accrual basis of accounting. Governmental funds use themodified accrual basis of accounting. Differences in the accrual and the modified accrual basis ofaccounting arise in the recognition of revenue, the recording of deferred revenue, and in the presentation ofexpenses versus expenditures.

Revenues - Exchange and Non-exchange Transactions

Revenue resulting from exchange transactions, in which each party gives and receives essentially equalvalue, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenueis recorded in the fiscal year in which the resources are measurable and become available. Available meansthat the resources will be collected within the current fiscal year or are expected to be collected soon enoughthereafter to be used to pay liabilities of the current fiscal year.

-34-



D. Basis of Accounting: (continued)

Revenues - Exchange and Non-exchange Transactions, (continued)

Nonexchange transactions, in which the Board receives value without directly giving equal value in return,include property taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxesis recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements anddonations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibilityrequirements include timing requirements, which specify the year when the resources are required to be usedor the year when use is first permitted, matching requirements, in which the Board must provide localresources to be used for a specified purpose, and expenditure requirements, in which the resources areprovided to the Board on a reimbursement basis. On a modified accrual basis, revenue from nonexchangetransactions must also be available before it can be recognized. Under GAAP, in accordance with GASBNo. 33, Accounting and Financial Reporting for Nonexchange Transactions, the last state aid payment is notconsidered revenue to the school district if the state has not recorded the corresponding expenditure, eventhough state law dictates recording the revenue.

Under the modified accrual basis, the following revenue sources are considered to be both measurable andavailable at year-end: ad valorem property taxes, tuition, unrestricted grants and interest.

Expenses/Expenditures

On the accrual basis of accounting, expenses are recognized at the time they are incurred. The fair value ofdonated commodities used during the year is reported in the operating statement as an expense with a likeamount reported as donated commodities revenue.

The measurement of focus of governmental fund accounting is on decreases in net financial resources(expenditures) rather than expenses. Expenditures are generally recognized in the accounting period inwhich the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation andamortization, are not recognized in the governmental funds.

E. Budgets/Budgetary Control:

Annual appropriated budgets are adopted in the spring of the preceding year for the general, and specialrevenue funds. The budgets are submitted to the county superintendents office for approval. Budgets areprepared using the modified accrual basis of accounting, except for the special revenue fund as describedlater. The legal level of budgetary control is established at line item accounts within each fund. Line itemaccounts are defined as the lowest (most specific) level of detail as established pursuant to the minimumchart of accounts referenced in N.J.A.C. 6A:23-2(g)1. Transfers of appropriations may be made by SchoolBoard resolution at any time during the fiscal year. The Board of Education made additional appropriationsof $159,963 to required maintenance – cleaning, repair and maintenance service from prior yearextraordinary aid and $31,906 in additional State aid for instructional supplies.

-35-



E. Budgets/Budgetary Control: (continued)

Formal budgetary integration into the accounting system is employed as a management control device duringthe year. For governmental funds there are no substantial differences between the budgetary basis ofaccounting and accounting principles generally accepted in the United States of America with the exceptionof the legally mandated revenue recognition of the last state aid payment for budgetary purposes only andspecial revenue fund as noted below. Encumbrance accounting is also employed as an extension of formalbudgetary integration in the governmental fund types. Unencumbered appropriations lapse at fiscal year end.

The accounting records of the special revenue fund are maintained on the grant accounting budgetary basis. The grant accounting budgetary basis differs from GAAP in that the grant accounting budgetary basisrecognizes encumbrances as expenditures and also recognizes the related revenues, whereas the GAAP basisdoes not. Sufficient supplemental records are maintained to allow for the presentation of GAAP basisfinancial reports.

F. Encumbrances:

Under encumbrance accounting purchase orders, contracts and other commitments for the expenditure ofresources are recorded to reserve a portion of the applicable appropriation. Open encumbrances ingovernmental funds, other than the special revenue fund, are reported as reservations of fund balances atfiscal year end as they do not constitute expenditures or liabilities but rather commitments related tounperformed contracts for goods and services.

Open encumbrances in the special revenue fund, for which the Board has received advances, are reflectedin the balance sheet as unearned revenues at fiscal year end.

The encumbered appropriation authority carries over into the next fiscal year. An entry will be made at thebeginning of the next fiscal year to increase the appropriation reflected in the certified budget by theoutstanding encumbrance amount as of the current fiscal year end.

G. Cash, Cash Equivalents and Investments:

Cash and cash equivalents include petty cash, change funds, cash in banks and all highly liquid investmentswith a maturity of three months or less at the time of purchase and are stated at cost plus accrued interest. U.S. Treasury and agency obligations and certificates of deposit with maturities of one year or less whenpurchased are stated at cost. All other investments are stated at fair value.

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

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G. Cash, Cash Equivalents and Investments: (continued)

Additionally, the Board has adopted a cash management plan that requires it to deposit public funds in publicdepositories protected from loss under the provisions of the Governmental Unit Deposit Protection Act("GUDPA"). GUDPA was enacted in 1970 to protect Governmental Units from a loss of funds on depositwith a failed banking institution in New Jersey.

N.J.S.A. 17:9-41 et. seq. establishes the requirements for the security of deposits of governmental units. Thestatute requires that no governmental unit shall deposit public funds in a public depository unless such fundsare secured in accordance with the Act. Public depositories include Savings and Loan institutions, banks(both state and national banks) and savings banks the deposits of which are federally insured. All publicdepositories must pledge collateral, having a market value at least equal to five percent of the average dailybalance of collected public funds, to secure the deposits of Governmental Units. If a public depository fails,the collateral it has pledged, plus the collateral of all other public depositories, is available to pay the fullamount of their deposits to the Governmental Units.

H. Tuition Payable:

Tuition charges were established by the receiving district. The charges are subject to adjustment when thefinal costs have been determined.

I. Inventories:

On District-wide financial statements, inventories are presented at cost, which approximates market on afirst-in, first-out basis and are expensed when used.

On fund financial statements inventories are valued at cost, which approximates market, using thefirst-in-first-out (FIFO) method. Inventories of proprietary funds consist of food and goods held for resale,as well as supplies, and are expensed when used.

J. Prepaid Items:

Payments made to vendors for services that will benefit periods beyond June 30, 2018, are recorded asprepaid items using the consumption method. A current asset for the prepaid amount is recorded at the timeof purchase and an expenditure/expense is reported in the year in which services are consumed.

K. Short-Term Interfund Receivables/Payables:

On fund financial statements, receivables and payables resulting from short-term interfund loans areclassified as “interfund receivables/payables.” These amounts are eliminated in the governmental andbusiness-type activities columns of the statement of net position, except for the net residual amounts duebetween governmental and business-type activities, which are presented as internal balances.

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L. Capital Assets:

General capital assets are those assets not specifically related to activities reported in the enterprise fund. These assets generally result from expenditures in the governmental funds. These assets are reported in thegovernmental activities column of the district -wide statement of net position but are not reported in the fundfinancial statements. Capital assets utilized by the enterprise fund are reported both in the business-typeactivity column of the District-wide statement of net position and in the fund.

All capital assets acquired or constructed during the year are recorded at actual cost. Donated fixed assetsare valued at their estimated fair market value on the date received. The capital assets acquired orconstructed prior to June 30, 1993 are valued at cost based on historical records or through estimationprocedures performed by an independent appraisal company. Donated capital assets are valued at theirestimated fair market value on the date received. The Board maintains a capitalization threshold of$2,000.00. The Board does not possess any infrastructure. Improvements are capitalized; the costs ofnormal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s lifeare not.

All reported capital assets except land and construction in progress are depreciated. Improvements aredepreciated over the remaining useful lives of the related capital assets. Depreciation is computed using thestraight-line method over the following useful lives:

Description

GovernmentalActivities

Estimated Lives

Business-TypeActivity

Estimated LivesSites and Improvements 20 years N/A

Buildings and Improvements 7-50 years N/A

Furniture, Equipment and Vehicles 5-20 years 5-20 years

M. Compensated Absences:

Compensated absences are those absences for which employees will be paid, such as vacation, sick leave,and sabbatical leave. A liability for compensated absences that are attributable to services already rendered,and that are not contingent on a specific event that is outside the control of the Board and its employees, isaccrued as the employees earn the rights to the benefits. Compensated absences that relate to future services,or that are contingent on a specific event that is outside the control of the Board and its employees, areaccounted for in the period in which such services are rendered or in which such events take place.

For the District-wide Statements, the current portion is the amount estimated to be used in the followingyear. In accordance with GAAP, for the governmental funds, in the Fund Financial Statements, all of thecompensated absences are considered long-term and therefore, are not a fund liability and represents areconciling item between the fund level and District-wide presentations.

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N. Deferred Revenue:

Deferred revenue arises when assets are recognized before revenue recognition criteria have been satisfied.

Deferred revenue in the special revenue fund represents cash that has been received but not yet earned. SeeNote 1(F) regarding the special revenue fund.

O. Accrued Liabilities and Long-term Obligations:

All payables, accrued liabilities and long-term obligations are reported in the District-wide financialstatements.

In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timelymanner and in full from current financial resources, are reported as obligations of the funds. However,claims and judgements, compensated absences, special termination benefits and contractually requiredpension contributions that will be paid from governmental funds are reported as a liability in the fundfinancial statements only to the extent that they are due for payment in the current year. Bonds, long-termobligations, and capital leases that will be paid from governmental funds are recognized as a liability in thefund financial statements when due.

P. Accounting and Financial Reporting for Pensions:

In fiscal year 2015, the District implemented GASB 68. This Statement amends GASB Statement No. 27.It improves accounting and financial reporting by state and local governments for pensions. It also improvesinformation provided by state and local government employers about financial support for pensions that isprovided by other entities. This Statement results from a comprehensive review of the effectiveness ofexisting standards of accounting and financial reporting for pensions with regard to providing decision usefulinformation, supporting assessments of accountability and interperiod equity, and creating additionaltransparency. This Statement replaces the requirement of Statement No. 27, Accounting for Pension by Stateand Local Governmental Employers, as well as the requirements of Statement No. 50, Pension Disclosures,as they relate to pensions that are provided through pension plans administered as trusts or equivalentarrangements that meet certain criteria. The requirements of Statements 27 and 50 remain applicable forpensions that are not covered by the scope of this Statement.

The District has also implemented GASB Statement 71, Pension Transition for Contributions madeSubsequent to the Measurement Date-an amendment to GASB No. 68. The objective of this Statement isto address an issue regarding application of the transition provisions of Statement No. 68, Accounting andFinancial Reporting for Pensions. The issue relates to amounts associated with contributions, if any, madeby a state or local government employer or nonemployer contributing entity to a defined benefit pension planafter the measurement date of the government's beginning net pension liability.

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P. Accounting and Financial Reporting for Pensions: (continued)

Statement 68 requires a state or local government employer (or nonemployer contributing entity in a specialfunding situation) to recognize a net pension liability measured as of a date (the measurement date) no earlierthan the end of its prior fiscal year. If a state or local government employer or nonemployer contributingentity makes a contribution to a defined benefit pension plan between the measurement date of the reportednet pension liability and the end of the government's reporting period, Statement 68 requires that thegovernment recognize its contribution as a deferred outflow of resources.

In addition, Statement 68 requires recognition of deferred outflows of resources and deferred inflows ofresources for changes in the net pension liability of a state or local government employer or nonemployercontributing entity that arise from other types of events. At transition to Statement 68, if it is not practicalfor an employer or nonemployer contributing entity to determine the amounts of all deferred outflows ofresources and deferred inflows of resources related to pensions, paragraph 137 of Statement 68 required thatbeginning balances for deferred outflows of resources and deferred inflows of resources not be reported.Consequently, if it is not practical to determine the amounts of all deferred outflows of resources anddeferred inflows of resources related to pensions, contributions made after the measurement date of thebeginning net pension liability could not have been reported as deferred outflows of resources at transition.This could have resulted in a significant understatement of an employer or nonemployer contributing entity'sbeginning net position and expense in the initial period of implementation.

This Statement amends paragraph 137 of Statement 68 to require that, at transition, a government recognizea beginning deferred outflow of resources for its pension contributions, if any, made subsequent to themeasurement date of the beginning net pension liability. Statement 68, as amended, continues to require thatbeginning balances for other deferred outflows of resources and deferred inflows of resources related topensions be reported at transition only if it is practical to determine all such amounts.

Q. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of financial position will sometimes report a separate section for deferredoutflows of resources. This separate financial statement element, deferred outflows of resources, representsa consumption of net position that applies to a future period(s) and so will not be recognized as an outflowof resources (expense/expenditure) until then. Currently, the District has only one item that qualifies forreporting in this category, deferred amounts related to pension.

In addition to liabilities, the statement of financial position will sometimes report a separate section fordeferred inflows of resources. This separate financial statement element, deferred inflows of resources,represents an acquisition of net position that applies to a future period(s) and so will not be recognized asan inflow of resources (revenue) until that time. The District has one item that qualifies in this category,deferred amounts related to pension.

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R. Fund Balances:

Fund balance is divided into five classifications based primarily on the extent to which the Board is boundto observe constraints imposed upon the resources in the governmental funds. The classifications are asfollows:

• Nonspendable fund balance includes amounts that are not in a spendable form (inventory,for example) or are required to be maintained intact (the principal of an endowment fund,for example).

• Restricted fund balance includes amounts that can be spent only for the specific purposesstipulated by external resource providers (for example, grant providers), constitutionally,or through enabling legislation (that is, legislation that creates a new revenue source andrestricts its use). Effectively, restrictions may be changed or lifted only with the consent ofresource providers.

• Committed fund balance includes amounts that can be used only for the specific purposesdetermined by a formal action of the Board’s highest level of decision-making authority. Commitments may be changed or lifted only by the government taking the same formalaction that imposed the constraint originally.

• Assigned fund balance comprises amounts intended to be used by the Board for specificpurposes. Intent can be expressed by the governing body or by an official or body to whichthe governing body delegates the authority. In governmental funds other than the generalfund, assigned fund balance represents the amount that is not restricted or committed. Thisindicates that resources in other governmental funds are, at a minimum, intended to be usedfor the purpose of that fund.

• Unassigned fund balance is the residual classification for the general fund and includes allamounts not contained in the other classifications. Unassigned amounts are technicallyavailable for any purpose. If another governmental fund has a fund balance deficit, then itwill be reported as a negative amount in the unassigned classification in that fund. Positiveunassigned amounts will be reported only in the general fund.

S. Net Position:

Net position represent the difference between assets and liabilities. Net position invested in capital assets,net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstandingbalances of any borrowings used for the acquisition, construction or improvement of those assets. Netposition are reported as restricted when there are limitations imposed on their use either through the enablinglegislation adopted by the Board or through external restrictions imposed by creditors, grantors or laws orregulations of other governments.

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S. Net Position: (continued)

The Board applies restricted resources first when an expense is incurred for purposes for which bothrestricted and unrestricted net position are available.

T. Operating Revenues and Expenses:

Operating revenues are those revenues that are generated directly from the primary activity of the proprietaryfunds. For the Board, these revenues are sales for food service. Operating expenses are necessary costsincurred to provide the good or service that is the primary activity of the fund.

U. Extraordinary and Special Items:

Extraordinary items are transactions or events that are both unusual in nature and infrequent in occurrence. Special items are transactions or events that are within the control of the Board and that are either unusualin nature or infrequent in occurrence. Neither type of transaction occurred during the fiscal year.

V. Allocation of Indirect Expenses:

The District reports all direct expenses by function in the Statement of Activities. Direct expenses are thosethat are clearly identifiable with a function. Indirect expenses are allocated to functions but are reportedseparately in the Statement of Activities. Employee benefits, including the employer’s share of socialsecurity, workers compensation, and medical and dental benefits, were allocated based on salaries of thatprogram. TPAF on-behalf contributions and changes in compensated absences have not been allocated andhave been reported as unallocated benefits on the Statement of Activities. Depreciation expense, wherepracticable, is specifically identified by function and is included in the indirect expense column of theStatement of Activities. Depreciation expense that could not be attributed to a specific function isconsidered an indirect expense and is reported separately on the Statement of Activities as unallocateddepreciation. Interest on long-term debt is considered an indirect expense and is reported separately on theStatement of Activities.

W. Use of Estimates:

The preparation of financial statements in accordance with accounting principles generally accepted in theUnited States of America requires management to make estimates and assumptions that effect certainreports, amounts and disclosures. Accordingly, actual results could differ from those estimates.

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X. Recent Accounting Pronouncements:

The Government Accounting Standards Board issued GASB Statement No. 75, Accounting and FinancialReporting for Postemployment Benefits Other Than Pensions. This Statement applies to governmentemployers who provided OPEB plans to their employees and basically parallels GASB Statement 68 andreplaces GASB Statement 45. The Statement is effective for fiscal years beginning after June 15, 2017 andwas implemented by the District for the year ended June 30, 2018.

In March 2016, the Government Accounting Standards Board issued GASB Statement No. 81, IrrevocableSplit-Interest Agreements. The objective of this Statement is to improve accounting and financial reportingfor irrevocable split-interest agreements by providing recognition and measurement guidance for situationsin which a government is a beneficiary of the agreement. The District does not believe this Statement willhave any effect on future financial statements.

In November 2016, the Government Accounting Standards Board issued GASB Statement No. 83, CertainAsset Retirement Obligations. This Statement establishes criteria for determining the timing and pattern ofrecognition of a liability and a corresponding deferred outflows of resources for asset retirement obligations(AROs). The District does not believe this Statement will have any effect on future financial statements.

In January 2017, the Government Accounting Standards Board issued GASB Statement No. 84, FiduciaryActivities. This Statement establishes criteria for identifying fiduciary activities of all state and localgovernments. The focus on the criteria generally is on (1) whether a government is controlling the assetsof the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteriaare included to identify component units and postemployment benefit arrangements that are fiduciaryactivities. The District is currently evaluating the effects, if any, this Statement may have on future financialstatements.

In March 2017, the Government Accounting Standards Board issued GASB Statement No. 85, Omnibus2017, which addresses practice issues that have been identified during the implementation and applicationof certain GASB statements. This Statement addresses a variety of topics including issues relating toblending component units, goodwill, fair value measurement and application, and postemployment benefits. The District implemented this Statement for the year ended June 30, 2018.

In May 2017, the Governmental Accounting Standards Board issued GASB Statement No. 86, Certain DebtExtinguishment Issues, which improves consistency in accounting and financial reporting for in-substancedefeasance of debt by providing guidance for transactions in which cash and other monetary assets acquiredwith only existing resources—resources other than the proceeds of refunding debt—are placed in anirrevocable trust for the sole purpose of extinguishing debt. This Statement also improves accounting and

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X. Recent Accounting Pronouncements: (continued)

financial reporting for prepaid insurance on debt that is extinguished and notes to financial statements fordebt that is defeased in substance. The requirements of this Statement are effective for reporting periodsbeginning after June 15, 2017. The District had no transactions of this type for the year ended June 30, 2018.

In June 2017, the Government Accounting Standards Board issued GASB Statement No. 87, Leases, whichimproves accounting and financial reporting for leases by governments. This Statement requires recognitionof certain lease assets and liabilities for leases that previously were classified as operating leases andrecognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the fundamental principle that leases arefinancings of the right to use an underlying asset. The requirements of this Statement are effective forreporting periods beginning after December 15, 2019. The District is currently reviewing what effect, if any,this Statement may have on future financial statements.

In March 2018, Government Accounting Standards Board issued GASB Statement No. 88, CertainDisclosures Related to Debt, Including Direct Borrowings and Direct Placement. The objective of thisStatement is to improve consistency in the information that is disclosed in notes to government financialstatements related to debt, including direct borrowings and direct placements, and to provide financialstatement users with additional essential information about debt. This Statement is effective for reportingperiods beginning after June 15, 2018. The District believes this may impact the disclosures relating to debtin the notes to the financial statements.

NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS

Cash

Custodial Credit Risk - Deposits

Custodial credit risk is the risk that in the event of a bank failure, the government’s deposits may notbe returned to it. The District’s policy is based on New Jersey Statutes requiring cash be depositedonly in New Jersey based banking institutions that participate in New Jersey Governmental DepositoryProtection Act (GUDPA) or in qualified investments established in New Jersey Statutes 18A:20-37that are treated as cash equivalents. As of June 30, 2018, $-0- of the District’s bank balance of$4,402,263 was exposed to custodial credit

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NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS, (continued)

Investments

Investment Rate Risk

The District does not have a formal investment policy that limits investment maturities as a means ofmanaging its exposure to fair value losses arising from increasing interest rates. However, New JerseyStatutes 18A:20-37 limits the length of time for most investments to 397 days.

Credit Risk

New Jersey Statutes 18A:20-37 limits school district investments to those specified in the Statutes. The type of allowable investments are Bonds of the United States of America, bonds or otherobligations of the school districts or bonds or other obligations of the local unit or units within whichthe school district is located; obligations of federal agencies not exceeding 397 days; governmentmoney market mutual funds; the State of New Jersey Cash Management Plan; local governmentinvestment pools; or repurchase of fully collateralized securities.

Concentration of Credit Risk

The District places no limit on the amount the District may invest in any one issuer.

NOTE 3. RECEIVABLES

Receivables at June 30, 2018, consisted of accounts and intergovernmental. All receivables areconsidered collectible in full. A summary of the principal items of receivables follows:

GovernmentalFund Financial

Statements

Business-Type

Activities

District WideFinancial

Statements

State Aid $302,003 $ $302,003Federal Aid 13,344 517 13,861

Interfund Receivables 220 220

Gross Receivables 315,567 517 316,084

Less: Allowance for Uncollectibles

Total Receivables, Net $315,567 $517 $316,084

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NOTE 4. INTERFUND BALANCES AND ACTIVITY

Balances due to/from other funds at June 30, 2018 consist of the following:

$220 Due to the General Fund from the Payroll AgencyFund to transfer amounts in excess of that neededto satisfy outstanding payroll deduction liabilities.

During the fiscal year ended June 30, 2018, the District transferred $-0- of unexpended bond proceeds relatedto Capital Projects to the Debt Service Fund and transferred $-0- from the Unemployment CompensationInsurance Trust Fund to the General Fund as the account is no longer needed.

NOTE 5. CAPITAL ASSETS

Capital asset activity for the fiscal year ended June 30, 2018 was as follows:

Beginning

Balance Additions Deductions

Ending

Balance

Governmental Activities

Capital Assets that are not being Depreciated:

Land $ $ $ $

Construction in Progress 703,937 703,937

Total Capital Assets not being Depreciated 703,937 703,937

Capital Assets Being Depreciated

Site Improvements 361,199 7,758 368,957

Buildings and Building Improvements 8,406,302 183,661 8,589,963

Machinery and Equipment 553,186 38,932 (38,131) 553,987

Totals at Historical Cost 9,320,687 230,351 (38,131) 9,512,907

Less Accumulated Depreciation:

Site Improvements (326,125) (14,973) (341,098)

Buildings and Improvements (5,017,719) (305,423) (5,323,142)

Equipment (524,852) (18,657) 38,131 (505,378)

Total Accumulated Depreciation (5,868,696) (339,053) 38,131 (6,169,618)

Total Capital Assets, Being Depreciated, Net

of Accumulated Depreciation 3,451,991 (108,702) 3,343,289

Governmental Activities Capital Assets, Net $3,451,991 $595,235 $ $4,047,226

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NOTE 5. CAPITAL ASSETS, (continued)

Balance

6/30/17 Additions Deductions

Balance

6/30/18

Business-Type Activity

Equipment $2,000 $ $ $2,000

Less Accumulated Depreciation for:

Equipment (2,000) (2,000)

Business-Type Activity Capital Assets, Net $ $ $ $

Depreciation expense was charged to governmental functions as follows:

Instruction $4,320

Support Services:

Instruction 10,588

School Administration 3,129

Operations 620

Buildings 18,480

Building Improvements 286,943

Land Improvements 14,973

Total Depreciation Expense $339,053

NOTE 6. LONG-TERM OBLIGATION ACTIVITY

Changes in long-term obligations for the year ended June 30, 2018 were as follows:

BalanceJune 30, 2017 Issued Retired

BalanceJune 30, 2018

AmountDue WithinOne Year

Long-TermPortion

Governmental Activities:Bonds Payable: General Obligation Debt $1,685,000 $ ($335,000) $2,020,000 $330,000 $1,020,000

Total Bonds Payable 1,685,000 (335,000) 1,350,000 330,000 1,020,000

Other Liabilities:

Compensated Absences Payable 354,964 60,791 (54,387) 361,368 361,368

Net Pension Liability PERS 5,079,933 (1,090,186) 3,989,747 3,989,947

Total Other Liabilities $7,119,897 $60,791 ($1,479,573) $5,701,115 $330,000 $5,371,315

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NOTE 6. LONG-TERM OBLIGATION ACTIVITY, (continued)

A. Bonds and Loans Payable:

The Board issued General Obligation Bonds to provide funds for the acquisition and construction of majorcapital facilities and other capital assets.

Bonds are authorized in accordance with State law by the voters of the municipality through referendums. All bonds are retired in serial installments within the statutory period of usefulness. Bonds issued by theBoard are general obligations bonds.

Outstanding bonds payable at June 30, 2018, consisted of the following:

Issue

Amount

Issued Issue Date

Interest

Rate

Date of

Maturity

Principal

Balance

June 30, 2018

School Refunding Bonds $1,685,000 04/19/2017 1.700% 08/15/2021 $1,350,000

Principal and interest due on serial bonds outstanding is as follows:

2019 $350,145 $330,000 $20,145

2020 349,492 335,000 14,492

2021 353,713 345,000 8,713

2022 342,890 340,000 2,890$1,396,240 $1,350,000 $46,240

B. Bonds Authorized But Not Issued:

As of June 30, 2018 the Board had authorized but not issued bonds of $-0-.

C. Refunding Bonds

On April 19, 2017, the District issued $1,685,000 in School Refunding Bonds with an interest rate of 1.70%to refund $1,636,000 of the $3,956,000 school bonds dated October 18, 2006 with an interest rate of 4%. Therefunding bonds will mature on August 15, 2017 through August 15, 2021 and constitute a current refunding. The net proceeds from the issuance of the school refunding bonds were used to purchase U.S. governmentsecurities and those securities were deposited with an escrow agent who paid the debt service requirementsof the refunded bonds on May 24, 2017 at a redemption price equal to 100% of par.

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NOTE 7. OPERATING LEASES

The District has entered into various operating leases for copying equipment and computers which expire in2022. Total operating lease payments made during the year ended June 30, 2018 were $19,744. Futureminimum lease payments are as follows:

Year Amount

June 30, 2019 $34,278June 30, 2020 34,278June 30, 2021 22,488June 30, 2022 18,896June 30, 2023 18,666

$128,606

NOTE 8. PENSION PLANS

Description of Plans - All required employees of the District are covered by either the Public Employees'Retirement System or the Teachers' Pension and Annuity Fund which have been established by state statuteand are administered by the New Jersey Division of Pension and Benefits (Division). According to the Stateof New Jersey Administrative Code, all obligations of both Systems will be assumed by the State of NewJersey should the Systems terminate. The Division issues a publicly available financial report that includesthe financial statements and required supplementary information for the Public Employees Retirement Systemand the Teachers' Pension and Annuity Fund. These reports may be obtained by writing to the Division ofPensions and Benefits, PO Box 295, Trenton, New Jersey, 08625 or reports can be accessed on the internetat: http://www.state.nj.us/treasury/pensions/annrpts_archive.htm.

Teachers' Pension and Annuity Fund (TPAF) - The Teachers' Pension and Annuity Fund was establishedas of January 1, 1955, under the provisions of N.J.S.A. 18A:66 to provide retirement benefits, death,disability and medical benefits to certain qualified members. The Teachers' Pension and Annuity Fund isconsidered a cost-sharing multiple-employer plan with a special funding situation, as under current statute,all employer contributions are made by the State of New Jersey on behalf of the District and the system'sother related non-contributing employers. Membership is mandatory for substantially all teachers or membersof the professional staff certified by the State Board of Examiners, and employees of the Department ofEducation who have titles that are unclassified, professional and certified.

Benefits Provided

The vesting and benefit provisions are set by N.J.S.A. 18A:66. TPAF provides retirement, death anddisability benefits. All benefits vest after ten years of service, except for medical benefits, which vest after25 years of service or under the disability provisions of TPAF. Members are fully vested for their owncontributions and, after three years of service credit, become vested for 2% of related interest earned on thecontributions. In the case of death before retirement, members' beneficiaries are entitled to full interestcredited to the members' accounts.

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


NOTE 8. PENSION PLANS, (continued)

The following represents the membership tiers for TPAF:

Tier Definition 1 Members who were enrolled prior to July 1, 2007 2 Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008 3 Members who were eligible to enroll on or after November 2, 2008 and prior to May 22, 2010 4 Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011 5 Members who were eligible to enroll on or after June 28, 2011

Service retirement benefits of 1/55 of final average salary for each year of service credit is available to Tiersth

1 and 2 members upon reaching age 60 and to Tier 3 members upon reaching age 62. Service retirementbenefits of 1/60 of final average salary for each year of service credit is available to Tier 4 members uponth

reaching age 62 and to Tier 5 members upon reaching age 65. Early retirement benefits are available to Tiers1 and 2 members before reaching age 60, to Tiers 3 and 4 before age 62 with 25 or more years of servicecredit and Tier 5 with 30 or more years of service credit before age 65. Benefits are reduced by a fraction ofa percent for each month that a member retires prior to the age at which a member can receive full earlyretirement benefits in accordance with their respective tier. Tier 1 members can receive an unreduced benefitfrom age 50 to age 60 if they have at least 25 years of service. Deferred retirement is available to memberswho have at least 10 years of service credit and have not reached the service retirement age for the respectivetier.

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

Benefits Provided

The vesting and benefit provisions are set by N.J.S.A. 43:15A. PERS provides retirement, death anddisability benefits. All benefits vest after ten years of service, except for medical benefits, which vest after25 years of service or under the disability provisions of PERS.

The following represents the membership tiers for PERS:

Tier Definition 1 Members who were enrolled prior to July 1, 2007 2 Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008 3 Members who were eligible to enroll on or after November 2, 2008 and prior to May 22, 2010 4 Members who were eligible to enroll on or after May 22, 2010 and prior to June 28, 2011 5 Members who were eligible to enroll on or after June 28, 2011

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Service retirement benefits of 1/55 of final average salary for each year of service credit is available to Tiersth

1 and 2 members upon reaching age 60 and to Tier 3 members upon reaching age 62. Service retirementbenefits of 1/60 of final average salary for each year of service credit is available to Tier 4 members uponth

reaching age 62 and to Tier 5 members upon reaching age 65. Early retirement benefits are available to Tiers1 and 2 members before reaching age 60, to Tiers 3 and 4 before age 62 with 25 or more years of servicecredit and Tier 5 with 30 or more years of service credit before age 65. Benefits are reduced by a fraction ofa percent for each month that a member retires prior to the age at which a member can receive full earlyretirement benefits in accordance with their respective tier. Tier 1 members can receive an unreduced benefitfrom age 50 to age 60 if they have at least 25 years of service. Deferred retirement is available to memberswho have at least 10 years of service credit and have not reached the service retirement age for the respectivetier.

Defined Contribution Retirement Program

Prudential Financial jointly administers the DCRP investments with the NJ Division of Pensions andBenefits. If an employee is ineligible to enroll in the PERS or PFRS, the employee may be eligible to enrollin the DCRP. DCRP provides eligible members with a tax-sheltered, defined contribution retirement benefit,along with life insurance and disability coverage. Vesting is immediate upon enrollment for members of theDCRP.

The State of New Jersey, Department of the Treasury, Division of Pensions and Benefits, issues publiclyavailable financial reports that include the financial statements and required supplementary information ofthe DCRP. The financial reports may be obtained by writing to the State of New Jersey, Department of theTreasury, Division of Pensions and Benefits, PO Box 295, Trenton, New Jersey, 08625-0295.

Employers are required to contribute at an actuarially determined rate. Employee contributions are based onpercentages of 5.50% for DCRP of employees' annual compensation, as defined. The DCRP was establishedJuly 1, 2007, under the provisions of Chapter 92, P.L. 2007 and expanded under the provisions of Chapter89, P.L. 2008. Employee contributions for DCRP are matched by a 3% employer contribution.

Contributions Requirements Fund Based Statements

The Board’s contribution to PERS and DCRP, equal to the required contributions for each year as reportedin the fund based statements, were as follows:

YearEnding PERS DCRP6/30/18 $158,777 $-0- 6/30/17 152,376 -0- 6/30/16 122,164 -0-

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The State of New Jersey contribution to TPAF (paid on-behalf of the District) for normal and post retirementbenefits have been included in the fund-based statements as revenues and expenditures in accordance withGASB 24, paragraphs 7 through 13, as follows:

YearEnding

PensionContributions

Post-RetirementMedical

ContributionsNCGI

Premium

Long-TermDisabilityInsurance

6/30/18 $667,009 $441,261 $16,187 $990

6/30/17 487,098 420,568 17,649 1,351

6/30/16 320,053 400,079 15,943

In addition, the post-retirement medical benefits are included in the district-wide financial statements.

Also, in accordance with N.J.S.A. 18A:66-66 the State of New Jersey reimbursed the Board $332,725 duringthe year ended June 30, 2018 for the employer’s share of social security contributions for TPAF membersas calculated on their base salaries. This amount has been included in the fund-based statements as revenuesand expenditures in accordance with GASB 24, paragraphs 7 through 13.

ACCOUNTING AND FINANCIAL REPORTING FOR PENSION IN THE DISTRICT-WIDESTATEMENTS PER - GASB NO. 68

Public Employees Retirement System (PERS)

At June 30, 2018, the District had a liability of $3,989,747 for its proportionate share of the PERS net pensionliability. The net pension liability was measured as of June 30, 2017, and the total pension liability used tocalculate the net pension liability was determined by an actuarial valuation as of that date. The District'sproportion of the net pension liability was based on a projection of the District's long-term share ofcontributions to the pension plan relative to the projected contributions of all participating governmentalentities, actuarially determined. At June 30, 2017, the District's proportion was .0171392665 percent, whichwas a decrease of .000012743 percent from its proportion measured as of June 30, 2016.

For the year ended June 30, 2018, the District recognized pension expense of $410,933. At June 30, 2018,deferred outflows of resources and deferred inflows of resources related to PERS from the following sources:

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DeferredOutflows ofResources

DeferredInflows ofResources

Difference in actual and expected experience $93,945 $ Changes of assumptions 803,797 800,850Net difference between projected and actual earnings on pension plan investments 27,167Changes in proportion and differences between District contributions and proportionate share of contributions 502,186 93,539District contributions subsequent to the measurement date 161,953

Total $1,589,048 $894,389

The $161,953 reported as deferred outflows of resources related to pensions resulting from school districtcontributions subsequent to the measurement date (i.e. for the school year ending June 30, 2018, the planmeasurement date is June 30, 2017) will be recognized as a reduction of the net pension liability in the yearended June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows ofresources related to pensions (excluding changes in proportion) will be recognized in pension expense asfollows:

Year ended June 30:2018 $93,9232019 141,7312020 85,8822021 (114,223)2022 (83,253)

Changes in Proportion

The previous amounts do not include employer specific deferred outflows of resources and deferred inflowsof resources related to changes in proportion. These amounts should be recognized (amortized) by eachemployer over the average of the expected remaining service lives of all plan members, which is 5.48, 5.57,5.72 and 6.44 years for 2017, 2016, 2015 and 2014 amounts, respectively.

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Additional Information

Local Group Collective balances at June 30, 2017 and June 30, 2016 are as follows:

June 30, 2017 June 30, 2016

Collective deferred outflows of resources $6,424,455,842 $8,685,338,380

Collective deferred inflows of resources 5,700,625,981 870,133,595

Collective net pension liability 23,278,401,588 29,617,131,759

District's Proportion 0.0171392665% 0.0171520092%

Actuarial Assumptions

The total pension liability for the June 30, 2017 measurement date was determined by an actuarial valuationas of July 1, 2016, which rolled forward to June 30, 2017. This actuarial valuation used the followingassumptions, applied to all periods in the measurement.

Inflation 2.25 PercentSalary Increases: Through 2026 1.65-4.15 Percent (based on age) Thereafter 2.65-5.15 Percent (based on age)

Investment Rate of Return 7.00 Percent

The actuarial assumptions used in the June 30, 2016 valuation were based on the results of an actuarialexperience study for the period July 1, 2011 to June 30, 2014. It is likely that future experience will notexactly conform to these assumptions. To the extent that actual experience deviates from these assumptions,the emerging liabilities may be higher or lower than anticipated. The more the experience deviates, the largerthe impact on future financial statements.

Mortality Rates

Pre-retirement mortality rates were based on the RP-2000 Employee Pre-retirement Mortality Table for maleand female active participants. For State employees, mortality tables are set back 4 years for males andfemales. For local employees, mortality tables are set back 2 years for males and 7 years for females. Inaddition, the tables provide for future improvements in mortality from the base year of 2013 using agenerational approach based on the plans actuary’s modified MP-2014 projection scale. Post-retirement

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mortality rates were based on the RP-2000 Combined Healthy Male and Female Mortality Tables (setback1 year for males and females) for service retirements and beneficiaries of former members and a one yearstatic projection based on mortality improvement Scale AA. In addition, the tables for service retirementsand beneficiaries of former members provide for future improvements in mortality from the base year of2013 using a generational approach based on the plan actuary’s modified MP-2014 projection scale. Disability retirement rates used to value disabled retirees were based on the RP-2000 Disabled MortalityTable (set back 3 years for males and set forward 1 year for females).

Long-Term Rate of Return

In accordance with State statute, the long-term expected rate of return on plan investments (7.00% at June 30,2017) is determined by the State Treasurer, after consultation with the Directors of the Division ofInvestments and Division of Pensions and Benefits, the board of trustees and the actuaries. The long-termexpected rate of return was determined using a building block method in which best-estimate ranges ofexpected future real rates of return (expected returns, net of pension plan investment expense and inflation)are developed for each major asset class. These ranges are combined to produce the long-term expected rateof return by weighting the expected future real rates of return by the target asset allocation percentage andby adding expected inflation. Best estimates of arithmetic real rates of return for each major asset classincluded in PERS's target asset allocation as of June 30, 2017 are summarized in the following table:

Asset ClassTarget

Allocation

Long-TermExpected RealRate of Return

Absolute return/risk mitigation 5.00% 5.51%Cash equivalents 5.50% 1.00%U.S. Treasuries 3.00% 1.87%Investment grade credit 10.00% 3.78%Public high yield 2.50% 6.82%Global diversified credit 5.00% 7.10%Credit oriented hedge funds 1.00% 6.60%Debt related private equity 2.00% 10.63%Debt related real estate 1.00% 6.61%Private real asset 2.50% 11.83%Equity related real estate 6.25% 9.23%U.S. equity 30.00% 8.19%Non-U.S. developed markets equity 11.50% 9.00%Emerging markets equity 6.50% 11.64%Buyouts/venture capital 8.25% 13.08%

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Discount Rate

The discount rate used to measure the total pension liability was 5.00% as of June 30, 2017. This singleblended discount rate was based on the long-term expected rate of return on pension plan investments of7.00% and a municipal bond rate of 3.58% as of June 30, 2017 based on the Bond Buyer GO 20-BondMunicipal Bond Index, which includes tax-exempt general obligation municipal bonds with an average ratingof AA/Aa or higher. The projection of cash flows used to determine the discount rate assumed thatcontributions from plan members will be made at the current member contribution rates and that contributionsfrom employers will be made based on the contribution rate in the most recent fiscal year. The Stateemployer contributed 40% of the actuarially determined contributions and the local employers contributed100% of their actuarially determined contributions. Based on those assumptions, the plan's fiduciary netposition was projected to be available to make projected future benefit payments of current plan membersthrough 2040. Therefore, the long-term expected rate of return on plan investments was applied to projectedbenefit payments through 2040 and the municipal bond rate was applied to projected benefit payments afterthat date in determining the total pension liability.

Sensitivity of the Collective Net Pension Liability to Changes in the Discount Rate

The following presents the collective net pension liability of the participating employers as of June 30, 2017,respectively, calculated using the discount rate as disclosed above as well as what the collective net pensionliability would be if it was calculated using a discount rate that is 1 -percentage point lower or 1- percentage-point higher than the current rate:

June 30, 2017 1%

Decrease4.00%

At CurrentDiscount Rate

5.00%

1%Increase6.00%

District's proportionate share of the pension liability $4,949,552 $3,989,747 $3,190,111

Pension Plan Fiduciary Net Position

Detailed information about the pension plan’s fiduciary net position is available in the separately issuedFinancial Report for the State of New Jersey Public Employees Retirement System (PERS). The financial report may be accessed at www.state.nj.us/treasury/pensions.

Teachers Pensions and Annuity Fund (TPAF)

The employer contributions for local participating employers are legally required to be funded by the Statein accordance with N.J.S.A 18:66-33. Therefore, these local participating employers are considered to be ina special funding situation as defined by GASB Statement No. 68 and the State is treated as a nonemployer

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contributing entity. Since the local participating employers do not contribute directly to the plan (except foremployer specific financed amounts), there is no net pension liability or deferred outflows or inflows to reportin the financial statements of the local participating employers. However, the notes to the financial statementsof the local participating employers must disclose the portion of the nonemployer contributing entities' totalproportionate share of the net pension liability that is associated with the local participating employer.

The portion of the TPAF Net Pension Liability that was associated with the District recognized at June 30,2018 was as follows:

Net Pension Liability:District's proportionate share $ -0- State's proportionate share

associated with the District 30,255,842$30,255,842

The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculatethe net pension liability was determined by an actuarial valuation as of June 30, 2016 rolled forward toJune 30, 2017. The net pension liability associated with the District was based on a projection of the District'slong-term share of contributions to the pension plan relative to the projected contributions of all participatingschool districts and the State, actuarially determined. At June 30, 2017, the proportion of the TPAF netpension liability associated with the District was .0448742572%.

For the year ended June 30, 2018, the District recognized on-behalf pension expense and revenue of$2,095,972 for contributions provided by the State in the District-Wide Financial Statements.

Actuarial Assumptions

The total pension liability for the June 30, 2017 measurement date was determined by an actuarial valuationas of July 1, 2016, which was rolled forward to June 30, 2017. This actuarial valuation used the followingactuarial assumptions, applied to all periods in the measurement:

Inflation rate 2.25%Salary Increases: 2012-2021 Varies based on experience Thereafter Varies based on experience

Investment Rate of Return 7.00%

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Mortality Rates

Pre-retirement, post-retirement and disabled mortality rates were based on the experience of TPAF membersreflecting mortality improvement on a generational basis based on a 60-year average of Social Security datafrom 1953 to 2013.

The actuarial assumptions used in the July 1, 2016 valuation were based on the results of an actuarialexperience study for the period July 1, 2012 to June 30, 2015.

Long-Term Expected Rate of Return

In accordance with State statute, the long-term expected rate of return on plan investments (7.00% at June 30,2017) is determined by the State Treasurer, after consultation with the Directors of the Division ofInvestments and Division of Pensions and Benefits, the board of trustees and the actuaries. The long-termexpected rate of return was determined using a building block method in which best-estimate ranges ofexpected future real rates of return (expected returns, net of pension plan investment expense and inflation)are developed for each major asset class. These ranges are combined to produce the long-term expected rateof return by weighting the expected future real rates of return by the target asset allocation percentage andby adding expected inflation. Best estimates of arithmetic real rates of return for each major asset classincluded in TPAF's target asset allocation as of June 30, 2017 are summarized in the following table:

Asset ClassTarget

Allocation

Long-TermExpected RealRate of Return

Absolute return/risk mitigation 5.00% 5.51%Cash equivalents 5.50% 1.00%U.S. Treasuries 3.00% 1.87%Investment grade credit 10.00% 3.78%Public high yield 2.50% 6.82%Global diversified credit 5.00% 7.10%Credit oriented hedge funds 1.00% 6.60%Debt related private equity 2.00% 10.63%Debt related real estate 1.00% 6.61%Private real asset 2.50% 11.83%Equity related real estate 6.25% 9.23%U.S. equity 30.00% 8.19%Non-U.S. developed markets equity 11.50% 9.00%Emerging markets equity 6.50% 11.64%Buyouts/venture capital 8.25% 13.08%

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Discount Rate

The discount rate used to measure the total pension liability was 4.25% and 3.22% as of June 30, 2017 and2016, respectively. This single blended discount rate was based on the long-term expected rate of return onpension plan investments of 7.00%, and a municipal bond rate of 3.58% and 2.85% as of June 30, 2017 and2016, respectively, based on the Bond Buyer Go 20-Bond Municipal Bond Index which includes tax-exemptgeneral obligation municipal bonds with an average rating of AA/Aa or higher. The projection of cash flowsused to determine the discount rate assumed that contributions from plan members will be made at the currentmember contribution rates and that contributions from employers will be made based on the contribution ratein the most recent fiscal year. The State contributed 40% of the actuary determined contributions. Based onthose assumptions, the plan's fiduciary net position was projected to be available to make projected futurebenefit payments of current plan members through 2036. Therefore, the long-term expected rate of return onplan investments was applied to projected benefit payments through 2036, and the municipal bond rate wasapplied to projected benefit payments after that date in determining the total pension liability.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

Because the District's proportionate share of the net pension liability is zero, consideration of potentialchanges in the discount rate is not applicable to the District.

NOTE 9. POST-RETIREMENT BENEFITS

General Information about the OPEB Plan

Plan Description and Benefits Provided

Chapter 384 of Public Laws 1987 and Chapter 6 of Public Laws 1990 required Teachers’ Pension andAnnuity Fund (TPAF) and the Public Employees’ Retirement System (PERS), respectively, to fund post-retirement medical benefits for those State employees who retire after accumulating 25 years of creditedservice or on a disability retirement. P.L. 2007, c.103 amended the law to eliminate the funding of post-retirement medical benefits through the TPAF and PERS. It created separate funds outside of the pensionplans for the funding and payment of post-retirement medical benefits for retired State employees and retirededucational employees. The cost of these benefits is funded through contributions by the State in accordancewith P.L. 1994 Chapter 62. Funding of post-retirement medical premiums changed from a prefunding basisto a pay-as-you-go basis beginning in fiscal year 1994.

The State is also responsible for the cost attributable to P.L. 1992 Chapter 126, which provides employer paidhealth benefits to members of PERS and the Alternate Benefit Program who retired from a board of educationor county college with 25 years of service.

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NOTE 9. POST-RETIREMENT BENEFITS, (continued)

The School Employees Health Benefits Program (SEHBP) Act is found in New Jersey Statutes Annotated,Title 52, Article 17.25 et. seq. Rules governing the operation and administration of the program are foundin Title 17, Chapter 9 of the New Jersey Administrative Code.

No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB No. 75.

Employees covered by benefits terms. At June 30, 2017, the following employees were covered by thebenefit terms:

TPAF participant retirees:

As of June 30, 2017, there were 112,966 retirees receiving post-retirement medicalbenefits, and the State Contributed $1.39 billion on their behalf.

PERS participant retirees:

The State paid $238.9 million toward Chapter 126 benefits for 209,913 eligible retiredmembers in Fiscal Year 2017.

Total OPEB Liability

The State, a nonemployer contributing entity, is the only entity that has a legal obligation to make employercontributions to OPEB for qualified retired PERS and TPAF participants. The LEA's proportionate sharepercentage determined under paragraphs 193 and 203 through 205 of GASB No. 75 is zero percent. Accordingly, the LEA did not recognize any portion of the collective OPEB liability on the Statement of NetPosition. Accordingly, the following OPEB liability note information is reported at the State's level for theState Health Benefit Local Education Retired Employee's Plan and is not specific to the board ofeducation/board of trustees, and could be found at https://www.state.nj.us/treasury/pensions/GASBnoticesOPEB.

The portion of the OPEB Liability that was associated with the District recognized at June 30, 2018 was asfollows:

OPEB Liability:District's proportionate share $ -0- State's proportionate share

associated with the District 23,378,638

$23,378,638

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Actual Assumptions and Other Imputes

The total OPEB liability in the June 30, 2017 actuarial valuation reported by the State in the State's Reportof Total Nonemployer OPEB Liability for the State Health Benefit Local Education Retired Employee's Planwas determined using the following actuarial assumptions and other inputs, applied to all periods includedin the measurement, unless otherwise specified:

Total Nonemployer OPEB Liability

The total nonemployer OPEB liability as of June 30, 2017 was determined by an actuarial valuation as ofJune 30, 2016, which was rolled forward to June 30, 2017. The total nonemployer OPEB liability as ofJune 30, 2016 was determined by an actuarial valuation as of June 30, 2016. The actuarial assumptions varyfor each plan member depending on the pension plan the member is enrolled in. This actuarial valuation usedthe following actuarial assumptions, applied to all periods in the measurement:

Inflation rate 2.50%

TPAF/ABP PERS Salary increases: Through 2026 1.55 - 4.55%

based on yearsof service

2.15 - 4.15%based on age

Thereafter 2.00 - 5.45%based on years

of service

3.15 - 5.15%based on age

Preretirement mortality rates were based on the RP-2014 Headcount-Weighted Health EmployeeMale/Female mortality table with fully generational mortality improvement projections from the central yearusing the MP-2017 scale. Postretirement mortality rates were based on the RP-2014 Headcount-WeightedHealth Annuitant Male/Female mortality table with fully generational improvement projections from thecentral year using the MP-2017 scale. Disability mortality was based on the RP-2014 Headcount-WeightedDisabled Male/Female mortality table with fully generational improvement projections from the central yearusing the MP-2017 scale.

The actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarialexperience studies for the periods July 1, 2012 – June 30, 2015, July 1, 2010 – June 30, 2013, and July 1,2011 – June 30, 2014 for TPAF and PFRS, respectively.

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(a) Health Care Trend Assumptions

For pre-Medicare preferred provider organization (PPO) medical benefits, this amount initially is 5.9%and decreases to a 5.0% long-term trend rate after nine years. For self-insured post-65 PPO medicalbenefits, the trend rate is 4.5%. For health maintenance organization (HMO) medical benefits, the trendrate is initially 5.9% and decreases to a 5.0% long-term trend rate after nine years. For prescription drugbenefits, the initial trend rate is 10.5% decreasing to a 5.0% long-term trend rate after eight years. Forthe Medicare Part B reimbursement, the trend rate is 5.0%. The Medicare Advantage trend rate is 4.5%and will continue in all future years.

(b) Discount Rate

The discount rate for June 30, 2017 and 2016 was 3.58% and 2.85%, respectively. This represents themunicipal bond return rate as chosen by the Division. The source is the Bond Buyer Go 20-BondMunicipal Bond Index, which includes tax-exempt general obligation municipal bonds with an averagerating of AA/Aa or higher.

Sensitivity of Total Nonemployer OPEB Liability to Changes in the Discount Rate

Because the District's proportionate share of the OPEB liability is zero, consideration of potential changesin the discount rate is not applicable to the District.

Sensitivity of the Total Nonemployer OPEB Liability to Changes in the Healthcare Cost Trend Rates:

Because the District's proportionate share of the OPEB liability is zero, consideration of potential changesin the healthcare cost trend rates is not applicable to the District.

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB:

For the year ended June 30, 2018, the board of education/board of trustees recognized on-behalf OPEBexpense of $1,481,835 in the district-wide financial statements as determined by the State as the total OPEBliability for benefits provided through a defined benefit OPEB plan that is not administered through a trustthat meets the criteria in paragraph 4 of GASB No. 75 and in which there is a special funding situation.

In accordance with GASB No. 75, the Borough of Englewood Cliffs School District's proportionate share ofschool retirees OPEB is zero; therefore, there is no recognition of the allocation of proportionate share ofdeferred outflows of resources and deferred inflows of resources.

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NOTE 10. DEFERRED COMPENSATION

The Board offers its employees a choice of the following deferred compensation plans created in accordancewith Internal Revenue Code Section 403(b). The plans, which are administered by the entities listed below,permits participants to defer a portion of their salary until future years. Amounts deferred under the plansare not available to employees until termination, retirement, death or unforeseeable emergency. The planadministrators are as follows:

Equitable Equi-Vest Facility ServicesWashington National Galic Disbursing CompanyValic

NOTE 11. RISK MANAGEMENT

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

Property and Liability Insurance - The District maintains commercial insurance coverage for property,liability, student accident and surety bonds. A complete schedule of insurance coverage can be found in theStatistical Section of this Comprehensive Annual Financial Report.

There has been no significant reduction in insurance coverage from the previous year nor have there been anysettlements in excess of insurance coverages.

New Jersey Unemployment Compensation Insurance - The District has elected to fund its New JerseyUnemployment Compensation Insurance under the “Contributory Method”. Under this plan, the Districtremits contributions directly to the New Jersey Unemployment Trust Fund. The following is a summary ofDistrict contributions, employee contributions, reimbursements to the State for benefits paid and the endingbalance of the District’s expendable trust fund for the current and previous two years:

Fiscal Year

Interest Earnings/District

ContributionsEmployee

ContributionsAmount

ReimbursedEndingBalance

2017-2018 -0- -0-

2016-2017 6 -0-

2015-2016 22 4 21,611

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NOTE 12. CAPITAL RESERVE ACCOUNT

A capital reserve account was established by the Borough of Englewood Cliffs Board of Education byinclusion of $1.00 on October 2, 2000 for the accumulation of funds for use as capital outlay expendituresin subsequent fiscal years. The capital reserve account is maintained in the general fund and its activity isincluded in the general fund annual budget.

Funds placed in the capital reserve account are restricted to capital projects in the district’s approved LongRange Facilities Plan (LRFP). A district may increase the balance in the capital reserve by appropriatingfunds in the annual general fund budget certified for taxes or by transfer by board resolution at year end ofany unanticipated revenue or unexpended line-item appropriation amounts, or both. A district may alsoappropriate additional amounts when the express approval of the voters has been obtained either by a separateproposal at budget time or by a special question at one of the four special elections authorized pursuant toN.J.S.A. 19:60-2. Pursuant to N.J.A.C. 6A:23A-14.1(g), the balance in the account cannot at any time exceedthe local support costs of uncompleted capital projects in its approved LRFP.

The activity of the capital reserve for the July 1, 2017 to June 30, 2018 fiscal year is as follows:

Beginning balance, July 1, 2017 $2,360,908

Increased by: Interest Earnings 7,554 Board Transfer 800,000Withdrawal from Capital Reserve (1,739,000)

Ending balance, June 30, 2018 $1,429,462

NOTE 13. MAINTENANCE RESERVE ACCOUNT

The maintenance reserve account is used to accumulate funds for the required maintenance of a facility inaccordance with the EFCRA (N.J.A.A. 18A:7G-9). EFCFA requires that upon district completion of a schoolfacilities project, the district must submit a plan for the maintenance of that facility. All such plans mustinclude a provision for a maintenance reserve fund.

Section 6 of N.J.S.A. 18A:7F-41(a) and 41(b) provides that a district may supplement a maintenance reserveaccount by board resolution at year end for any unanticipated revenue and/or unexpended line itemappropriations.

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NOTE 13. MAINTENANCE RESERVE ACCOUNT, (continued)

The activity of the Maintenance Reserve Account for July 1, 2017 to June 30, 2018 fiscal year is as follows:

Beginning balance, July 1, 2017 $252,325

Interest Earnings 880

Ending balance, June 30, 2018 $253,205

NOTE 14. EMERGENCY RESERVE ACCOUNT

The emergency reserve is used to accumulate funds in accordance with N.J.S.A. 18A:7F-41c(1) to financeunanticipated general fund expenditures required for a thorough and efficient education. Unanticipatedmeans reasonably unforeseeable and shall not include additional costs caused by poor planning. Themaximum balance permitted at any time in this reserve is the greater of $250,000 or 1% of the general fundbudget not to exceed one million dollars. Deposits may be made to the emergency reserve account by boardresolution at year end of any unanticipated revenue or unexpended line item appropriation or both. Withdrawals from the reserve require the approval of the commissioner unless the withdrawal is necessaryto meet an increase in total health care costs in excess of four percent.

The activity of the Emergency Reserve Account for the July 1, 2017 to June 30, 2018 fiscal year is as follows:

Beginning balance, July 1, 2017 $250,000

Ending balance, June 30, 2018 $250,000

NOTE 15. FUND BALANCE APPROPRIATED

General Fund [Exhibit B-1] - Of the $3,049,391 General Fund fund balance at June 30, 2018, $928,922 isreserved for encumbrances; $-0- is reserved as excess surplus in accordance with N.J.S.A. 18A:7F-7; ($-0-of the total reserve for excess surplus has been appropriated and included as anticipated revenue for the yearended June 30, 2019); $1,429,462 has been reserved in the Capital Reserve Account; $253,205 has beenreserved in the Maintenance Reserve Account; $250,000 has been reserved in the Emergency ReserveAccount; and $187,802 is unreserved and undesignated.

Debt Service Fund: Of the Debt Service Fund balance at June 30, 2018, $196,974 is unreserved andundesignated.

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NOTE 16. CALCULATION OF EXCESS SURPLUS

In accordance with N.J.S.A. 18A:7F-7 as amended, the designation for Reserved Fund Balance - ExcessSurplus is a required calculation pursuant to the New Jersey Comprehensive Educational Improvement andFinancing Act of 1996 (CEIFA). New Jersey school districts are required to reserve General Fund fundbalance at the fiscal year end of June 30 if they did not appropriate a required minimum amount as budgetedfund balance in their subsequent years’ budget. The excess fund balance for the year ended June 30, 2018is $-0- of which $-0- is the result of current year's operations and $-0- is prior year excess surplus.

NOTE 17. CONTINGENT LIABILITIES

Grant Programs - The school district participates in federally assisted grant programs. These programs aresubject to program compliance audits by the grantors or their representatives. The school district ispotentially liable for expenditures which may be disallowed pursuant to the terms of these grant programs. Management is not aware of any material items of noncompliance which would result in the disallowanceof program expenditures.

Litigation - The District is a party defendant in some lawsuits, none of a kind unusual for a school districtof its size and scope of operation. In the opinion of the Board's Attorney the potential claims against theDistrict not covered by insurance policies would not materially affect the financial condition of the District.

NOTE 18. SUBSEQUENT EVENTS

The Board has evaluated subsequent events through January 22, 2019, the date which the financial statementswere available to be issued and no other items were noted for disclosure.

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INFORMATION - PART II

BUDGETARY COMPARISON SCHEDULES

of 5

Exhibit C-1

Budget

Original Transfers/ Final Variance

Budget Adjustments Budget Actual Final to Actual

REVENUES:

General Fund:

Revenues from Local Sources:

Local Tax Levy $ 12,963,634 12,963,634 12,963,634

Tuition 276,750 276,750 230,500 (46,250)

Unrestricted Miscellaneous Revenues 98,000 98,000 214,590 116,590

Interest Earned on Maintenance Reserve 250 250 880 630

Interest Earned on Capital Reserve Funds 2,000 2,000 7,554 5,554

Total - Local Sources 13,340,634 13,340,634 13,417,158 76,524

Revenues from State Sources:

Categorical Special Education Aid 232,059 31,906 263,965 263,965

Categorical Security Aid 8,968 8,968 8,968

Categorical Transportation Aid 42,818 42,818 42,818

PARCC Readiness Aid 5,780 5,780 5,780

Per Pupil Growth 5,780 5,780 5,780

Professional Learning Community Aid 5,840 5,840 5,840

Extraordinary Aid 167,775 167,775 255,982 88,207

Lead Testing for Schools Aid 5,297 5,297

Other Unrestricted State Aid - NonPublic Tarnsportation Aid 29,934 29,934

On-behalf TPAF Post-Retirement Medical (non-budgeted) 441,261 441,261

On-behalf TPAF Pension (non-budgeted) 667,009 667,009

On-behalf TPAF NCGI Premium (non-budgeted) 16,187 16,187

On-behalf TPAF - LTDI 990 990

Reimbursed TPAF Social Security Contributions (non-budgeted) 332,725 332,725

Total - State Sources 469,020 31,906 500,926 2,082,536 1,581,610

TOTAL REVENUES 13,809,654 31,906 13,841,560 15,499,694 1,658,134

EXPENDITURES:

Current Expense:

Regular Programs - Instruction

Preschool-Salaries of Teachers 78,231 78,231 78,231

Kindergarten - Salaries of Teachers 337,194 1,281 338,475 337,845 630

Grades 1-5 - Salaries of Teachers 1,595,500 65,766 1,661,266 1,641,021 20,245

Grades 6-8 - Salaries of Teachers 985,900 3,723 989,623 987,177 2,446

Regular Programs - Undistributed Instruction

Other Salaries for Instruction 1,000 (315) 685 110 575

Purchased Professional-Educational Services 11,049 469 11,518 11,494 24

Purchased Technical Services 43,260 22,773 66,033 64,875 1,158

Other Purchased Services (400-500 series) 165,711 (94,501) 71,210 69,394 1,816

General Supplies 173,471 195,079 368,550 335,570 32,980

Textbooks 180,790 6,208 186,998 184,837 2,161

Other Objects 23,779 (1,188) 22,591 20,447 2,144

TOTAL REGULAR PROGRAMS - INSTRUCTION 3,517,654 277,526 3,795,180 3,731,001 64,179

SPECIAL EDUCATION - INSTRUCTION

Resource Room/Resource Center:

Salaries of Teachers 817,245 (16,865) 800,380 793,180 7,200

General Supplies 825 825 825

Total Resource Room/Resource Center 817,245 (16,040) 801,205 794,005 7,200

Preschool Disabilities- Full-Time:

Salaries of Teachers 147,730 (138,614) 9,116 8,744 372

Other Salaries for Instruction 80,255 (15,256) 64,999 64,714 285

General Supplies 1,000 1,000 198 802

Total Preschool Disabilities - Full-Time 228,985 (153,870) 75,115 73,656 1,459

TOTAL SPECIAL EDUCATION - INSTRUCTION 1,046,230 (169,910) 876,320 867,661 8,659

Basic Skills/Remedial - Instruction

Salaries of Teachers 40,495 25,357 65,852 39,947 25,905

General Supplies 650 224 874 858 16

Total Basic Skills/Remedial - Instruction 41,145 25,581 66,726 40,805 25,921


Budgetary Comparison Schedule

General Fund


-67-

of 5

Exhibit C-1

Budget





General Fund


Bilingual Education - Instruction

Salaries of Teachers 91,844 110 91,954 88,353 3,601

General Supplies 350 (159) 191 191

Total Bilingual Education - Instruction 92,194 (49) 92,145 88,353 3,792

School-Sponsored Cocurricular Activities - Instruction

Salaries 13,504 13,504 13,056 448

Supplies and Materials 3,000 3,000 1,835 1,165

Total School-Sponsored Cocurricular Activities - Instruction 3,000 13,504 16,504 14,891 1,613

TOTAL INSTRUCTION 4,700,223 146,652 4,846,875 4,742,711 104,164

Tuition to Other LEAs Within the State - Regular 1,058,520 (253,905) 804,615 686,706 117,909

Tuition to Other LEAs Within the State - Special 600,849 600,849 488,438 112,411

Tuition to County Voc. School Dist. - Regular 374,166 374,166 368,589 5,577

Tuition to County Voc. School Dist. - Special 95,436 95,436 68,736 26,700

Tuition to CSSD & Regional Day Schools 88,500 88,500 88,500

Tuition to Private Schools for the Handicapped - Within State 321,577 321,577 320,304 1,273

Total Undistributed Expenditures - Instruction: 2,539,048 (253,905) 2,285,143 2,021,273 263,870

Undistributed Expend. - Attend. & Social Work

Purchased Professional and Technical Services 7,537 (7,537)

Total Undistributed Expend. - Attend. & Social Work 7,537 (7,537)

Undist. Expend. - Health Services

Salaries 146,730 146,730 146,730

Purchased Professional and Technical Services 858 10,515 11,373 10,400 973

Other Purchased Services (400-500 series) 1,000 (768) 232 232

Supplies and Materials 9,130 636 9,766 9,217 549

Total Undistributed Expenditures - Health Services 157,718 10,383 168,101 166,579 1,522

Undist. Expend. - Speech, OT, PT & Related Services

Salaries 93,708 1,936 95,644 95,644

Purchased Prof. Services-Educational Services 216,872 (60,893) 155,979 151,749 4,230

Supplies and Materials 4,000 (1,031) 2,969 2,969

Total Undist. Expend. - Speech, OT, PT & Related Serv. 314,580 (59,988) 254,592 250,362 4,230

Undist. Expend. - Other Supp. Serv. Students-Extra. Serv.

Salaries 375,582 30,189 405,771 403,114 2,657

Purchased Prof. Services-Educational Services 10,400 17,569 27,969 27,969

Other Objects 2,000 (1,815) 185 185

Total Undist. Expend. -Other Supp. Serv. Students-Extra. Serv. 387,982 45,943 433,925 431,268 2,657

Undist. Expend. - Guidance

Salaries of Other Professional Staff 90,000 1,875 91,875 91,875

Salaries of Secretarial and Clerical Assistants 20,477 (1) 20,476 20,476

Other Purchased Services (400-500 series) 200 (105) 95 95

Supplies and Materials 3,387 (2,499) 888 888

Other Objects 1,120 (171) 949 949

Total Undist. Expend. - Guidance 115,184 (901) 114,283 114,283

Undist. Expend. - Child Study Teams

Salaries of Other Professional Staff 329,610 11,293 340,903 340,903

Salaries of Secretarial and Clerical Assistants 48,621 48,621 48,621

Purchased Prof. Services-Educational Services 2,250 488 2,738 2,325 413

Other Purchased Prof. and Tech Services 50,500 (9,124) 41,376 41,376

Other Purchased Services (400-500 series) 5,150 (5,150)

Misc. Pur Services (400-500 Series O/than Resid Costs) 2,696 2,696 2,676 20

Supplies and Materials 10,800 (5,720) 5,080 5,080

Other Objects 1,225 (135) 1,090 1,090

Total Undist. Expend. - Child Study Teams 448,156 (5,652) 442,504 442,071 433

Undist. Expend. - Improvement of Instructional Services

Salaries of Supervisors of Instruction 87,465 10,989 98,454 98,454

Salaries of Other Professional Staff 12,600 (864) 11,736 11,736

Purchased Prof. Services-Educational Services 22,400 22,400 22,400

Supplies and Materials 300 (297) 3 3

Other Purch Services (400-500) 95 95 95

Other Objects 980 (11) 969 969

Total Undist. Expend. - Improvement of Inst. Services 101,345 32,312 133,657 133,657

Undistributed Expenditures - Instruction:

-68-

of 5

Exhibit C-1

Budget





General Fund


Undist. Expend. - Educational Media Serv./Sch. Library

Salaries 72,500 72,500 72,310 190

Salaries of Technology Coordinators 75,549 890 76,439 76,439

Purchased Professional and Technical Services 6,555 249 6,804 6,804

Other Purch Services (400-500) 975 (308) 667 110 557

Supplies and Materials 3,900 125 4,025 4,000 25

Other Objects 65 65 65

Total Undist. Expend. - Educational Media Serv./Sch. Library 159,544 956 160,500 159,728 772

Undist. Expend. - Instructional Staff Training Serv.

Purchased Professional - Educational Services 405 3,225 3,630 3,200 430

Other Purchased Services (400-500 series) 1,513 1,573 3,086 3,086

Total Undist. Expend. - Instructional Staff Training Serv. 1,918 4,798 6,716 6,286 430

Undist. Expend. - Supp. Serv. - General Administration

Salaries 247,323 9,124 256,447 246,072 10,375

Legal Services 93,000 38,224 131,224 81,328 49,896

Audit Fees 41,000 41,000 20,000 21,000

Architectural/Engineering Services 15,000 (4,430) 10,570 10,570

Other Purchased Professional Services 1,000 (250) 750 750

Communications/Telephone 21,353 (1,549) 19,804 19,804

BOE Other Purchased Services 18,004 18,004 17,794 210

Misc . Purch Services (400-500 Series) 13,964 (13,964)

General Supplies 2,700 789 3,489 3,350 139

BOE In House Training/Meeting Supplies 400 (22) 378 373 5

Misc. Expenditures 4,565 (2,600) 1,965 1,965

BOE Membership Dues and Fees 9,720 123 9,843 9,843

Total Undist. Expend. - Supp. Serv. - General Administration 450,025 43,449 493,474 400,529 92,945

Undist. Expend. - Support Serv. - School Administration

Salaries of Principals/Assistant Principals 60,000 10,000 70,000 62,573 7,427

Salaries of Secretarial and Clerical Assistants 103,131 4,265 107,396 103,185 4,211

Purchased Prof & Technical Services 1,907 1,907 1,907


Supplies and Materials 7,325 (1,159) 6,166 5,881 285

Other Objects 1,130 660 1,790 1,750 40

Total Undist. Expend. - Support Serv. - School Administration 174,136 17,414 191,550 179,587 11,963

Undist. Expend. - Support Serv. - Central Services

Salaries 183,432 183,432 183,432

Purchased Professional Services 42,623 (18,592) 24,031 11,210 12,821

Purchased Technical Services 3,850 7,075 10,925 10,925

Misc. Pur Services (400-500 Series) 1,177 919 2,096 2,004 92

Supplies and Materials 5,168 (2,555) 2,613 2,211 402

Other Objects 1,520 1,520 1,505 15

Miscellaneous Expenditures 1,465 (1,465)

Total Undist. Expend. - Support Serv. - Central Services 237,715 (13,098) 224,617 211,287 13,330

Undist. Expend. -Admin. Info. Tech

Salaries 70,000 (692) 69,308 69,308

Purchased Professional Services 3,000 (51) 2,949 2,850 99

Purchased Technical Services 53,150 1,880 55,030 55,030


Supplies and Materials 7,400 24,899 32,299 11,716 20,583

Total Undist. Expend. - Admin. Info. Tech 133,550 42,612 176,162 152,526 23,636

Undist. Expend. - Required Maint. for School Facilities (261)

Lead Testing 1,480 1,480 1,480

Cleaning, Repair and Maintenance Services 134,393 (23,745) 110,648 100,029 10,619

General Supplies 14,599 49,723 64,322 62,268 2,054

Other Objects 916 252 1,168 1,168

Total 'Undist. Expend. - Required Maint. for School Facilities 149,908 27,710 177,618 164,945 12,673

Undist. Expend. - Custodial Services (262)

Salaries 371,432 2,530 373,962 364,910 9,052

Cleaning, Repair and Maintenance Services 15,491 15,751 31,242 29,967 1,275

Other Purchased Property Services 9,393 5,081 14,474 12,946 1,528

Insurance 47,500 (2,325) 45,175 45,175

Miscellaneous Purchased Services 2,500 (2,500)

General Supplies 42,992 (8,919) 34,073 33,192 881

Energy (Energy and Electricity) 99,000 (38,486) 60,514 48,223 12,291

Salaries of Non-Instructional Aides 70,650 (4,768) 65,882 65,687 195

Energy (Natural Gas) 62,895 (24,377) 38,518 35,169 3,349

Total Undist. Expend. - Custodial Services (262) 721,853 (58,013) 663,840 635,269 28,571

-69-

of 5

Exhibit C-1

Budget





General Fund


Undist. Expend. - Care & Upkeep of Grounds

Cleaning, Repair and Maintenance Services 28,850 20,970 49,820 30,340 19,480

General Supplies 4,300 (93) 4,207 4,207

Total Undist. Expend. - Care & Upkeep of Grounds 33,150 20,877 54,027 34,547 19,480

Undist. Expend. - Security

Salaries 41,353 1,619 42,972 42,758 214

Cleaning, Repair and Maintenance Services 12,440 18,727 31,167 30,667 500

General Supplies 1,000 5,131 6,131 6,122 9

Total Undist. Expend. - Security 54,793 25,477 80,270 79,547 723

Undist. Expend. - Student Transportation Services (270)

Salaries of Non-Instructional Aides 50,600 5,280 55,880 54,950 930

Sal. For Pupil Trans (Bet Home & Sch)-Reg 14,622 14,622 14,622

Contr Serv. (Bet. Home and Sch) Vendors 30,000 (30,000)

Contr Serv. (Oth than Bet. Home and Sch)-Vendors 14,100 (120) 13,980 10,080 3,900

Contr Serv. (Bet. Home & Sch) Joint Agrmnts 461,270 20,064 481,334 450,582 30,752

Contract Serv. (Sp Ed Stds)-Joint Agrmnts 362,437 362,437 298,254 64,183

Contract Serv.-Aid in Lieu Pymts-NonPub Sch 75,140 5,360 80,500 80,000 500

Total Undist. Expend. - Student Transportation Services 1,008,169 584 1,008,753 908,488 100,265

UNALLOCATED BENEFITS

Social Security Contributions 142,000 7,082 149,082 149,082

Other Retirement Contributions-PERS 158,000 4,609 162,609 162,609

Other Retirement Contributions-Regular 2,500 2,980 5,480 4,925 555

Unused Vacation Payment to Term/Retired Staff 50,000 50,000 29,699 20,301

Unemployment Compensation 25,500 503 26,003 26,003

Workmen's Compensation 85,620 (15,175) 70,445 63,489 6,956

Health Benefits 1,831,695 (70,251) 1,761,444 1,690,484 70,960

Tuition Reimbursement 23,467 23,467 13,382 10,085

Other Employee Benefits 83,160 (50,000) 33,160 30,893 2,267

TOTAL UNALLOCATED BENEFITS 2,351,942 (70,252) 2,281,690 2,170,566 111,124

On-behalf TPAF Post-Retirement Medical (non-budgeted) 441,261 441,261

On-behalf TPAF Pension (non-budgeted) 667,009 667,009

On-behalf TPAF NCGI Premium (non-budgeted) 16,187 16,187

On-behalf TPAF - LTDI 990 990

Reimbursed TPAF Social Security Contributions (non-budgeted) 332,725 332,725

TOTAL ON-BEHALF CONTRIBUTIONS 1,458,172 (1,458,172)

TOTAL PERSONAL SERVICES - EMPLOYEE BENEFITS 2,351,942 (70,252) 2,281,690 3,628,738 (1,347,048)

TOTAL UNDISTRIBUTED EXPENDITURES 9,548,253 (196,831) 9,351,422 10,120,970 (769,548)

TOTAL GENERAL CURRENT EXPENSE 14,248,476 (50,179) 14,198,297 14,863,681 (665,384)

Undist. Expenditures:

Instruction 3,466 3,466 2,773 693

Required Maintenance for School Facilites 101,791 101,791 66,369 35,422

Admin Info Tech 7,200 26,601 33,801 33,801

Total Undist. Expend. 7,200 131,858 139,058 102,943 36,115

Facilities Acquisition and Construction Services

Other Purchased Prof. & Tech. Services 238,188 238,188 206,390 31,798

Construction Services 1,739,000 (127,998) 1,611,002 821,709 789,293

Assessment for Debt Service on SDA Funding 5,625 5,625 5,625

Total Facilities Acquisition and Construction Services 1,744,625 110,190 1,854,815 1,033,724 821,091

TOTAL CAPITAL OUTLAY 1,751,825 242,048 1,993,873 1,136,667 857,206

TOTAL EXPENDITURES 16,000,301 191,869 16,192,170 16,000,348 191,822

-70-

of 5

Exhibit C-1

Budget





General Fund


Excess (Deficiency) of Revenues

Over (Under) Expenditures (2,190,647) (159,963) (2,350,610) (500,654) 1,849,956

Fund Balance, July 1 3,574,703 3,574,703 3,574,703

Fund Balance, June 30 1,384,056 (159,963) 1,224,093 3,074,049 1,849,956

Recapitulation of Excess (Deficiency) of Revenues Over (Under) Expenditures

Adjustment for Prior Year Encumbrances (338,269) (338,269) (338,269)

Increase:

Capital Reserve - Principal 800,000 (800,000)

Capital Reserve - Interest 2,000 2,000 7,554 (5,554)

Maintenance Reserve - Interest 250 250 880 (630)

Withdrawal from Capital Reserve (1,739,000) (1,739,000) (1,739,000)

Budgeted Fund Balance (115,628) (159,963) (275,591) 768,181 2,656,140

(2,190,647) (159,963) (2,350,610) (500,654) 1,849,956

Recapitulation:

Restriced Fund Balance:

Excess Surplus - Designated for Subsequent Years' Expenditures

Capital Reserve 1,429,462

Maintenance Reserve 253,205

Emergency Reserve 250,000

Assigned Fund Balance:

Year-End Encumbrances 928,922

Unassigned Fund Balance: 212,460

3,074,049

Recapitulation to Governmental Fund Statement (GAAP):

Less: Last State Aid Payment not Recognized GAAP Basis 24,658

Total Fund Balance per Governmental Funds (GAAP) 3,049,391

-71-

Exh

ibit

C-2

Budget

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gin

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Budget

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4,7

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54

12,1

59

(1

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95)

Fed

eral

Sourc

es187,4

88

49,3

19

236,8

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217,5

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(19,2

43)

To

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Rev

en

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208,0

41

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262,0

61

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(32,3

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Ex

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-72-

Exhibit C-3

Note A - Explanation of Differences between Budgetary Inflows and Outflows and

GAAP Revenues and Expenditures

Special

General Revenue

Fund Fund

Sources/inflows of resources

Actual amounts (budgetary basis) "revenue"

from the budgetary comparison schedule [C-1],[C-2] 15,499,694 229,723

Difference - budget to GAAP:

Grant accounting budgetary basis differs from GAAP in that

encumbrances are recognized as expenditures, and the related

revenue is recognized. (6,270)

State aid payment recognized for GAAP statements in

the current year, previously recognized for budgetary purposes. 21,696

The last state aid payment is recognized as revenue for budgetary

purposes, and differs from GAAP which does not recognize this

revenue until the subsequent year when the State recognizes the

related expense (GASB 33) (24,658)

Total revenues as reported on the statement of revenues, expenditures

and changes in fund balances - governmental funds. [B-2] 15,496,732 223,453

Uses/outflows of resources

Actual amounts (budgetary basis) "total outflows" from the [C-1],[C-2] 16,000,348 229,723

budgetary comparison schedule

Differences - budget to GAAP

Encumbrances for supplies and equipment ordered but

received are reported in the year the order is placed for

budgetary purposes, but in the year the supplies are received

for financial reporting purposes. (6,270)

Total expenditures as reported on the statement of revenues,

expenditures, and changes in fund balances - governmental funds [B-2] 16,000,348 223,453


Required Supplementary Information


Note to Required Supplementary Information - Part II


-73-


INFORMATION - PART III

Exhibit L-1

Schedules of Required Supplementary Information

Schedule of District's Share of Net Pension Liability - PERS

Last 10 Fiscal Years*

District's

District's District's Proportionate Share Plan Fiduciary

Proportion Proportionate Share of the Net Pension Net Position as

of the Net of the Net District's Covered Liability (Asset) as a Percentage of the

Fiscal Year Pension Liability Pension Liability Payroll - PERS a Percentage of Its' Total Pension

Ending June 30, (Asset) (Asset) Employee's Covered Payroll Liability

2015 0.0152065979% 2,847,091$ 1,080,524$ 263.49% 52.08%

2016 0.0142095476% 3,189,759 1,180,020 270.31% 47.93%

2017 0.0171520092% 5,079,933 1,182,605 429.55% 40.14%

2018 0.0171392665% 3,989,747 1,213,811 328.70% 48.10%

* GASB requires that ten years of information be presented. However, since fiscal year 2015 was the first year of

GASB 68 implementation ten years is not presented. Each year thereafter, an additional year will be included until ten

years of data is presented.


-74-

Exhibit L-2

Contributions in Contributions

Relations to the District's PERS as a Percentage

Contractually Contractually Contribution Covered- of PERS Covered-

Fiscal Year Required Required Deficiency Employee Employee

Ending June 30, Contribution Contributions (Excess) Payroll Payroll

2015 125,361$ 125,361$ -$ 1,080,524$ 11.60%

2016 122,164 122,164 - 1,180,020 10.35%

2017 152,376 152,376 - 1,182,605 12.88%

2018 158,777 158,777 - 1,213,811 13.08%






Schedule of District's Contributions - PERS


-75-

Exhibit L-3


Schedule of District's Share of Net Pension Liability - TPAF


State's

Proportionate District's

District's District's Share of the Net Proportionate Share Plan Fiduciary

Proportion Proportionate Share Pension Liability of the Net Pension Net Position as

of the Net of the Net Associated with District's Covered Liability (Asset) as a Percentage of

Fiscal Year Pension Liability Pension Liability the District Payroll - TPAF a Percentage of Its' the Total Pension

Ending June 30, (Asset) (Asset) (Asset) Employee's Covered Payroll Liability

2015 0.0360689950% -$ 19,277,704$ 4,335,126$ 0.00% 33.64%

2016 0.0380913907% - 24,075,386 4,393,888 0.00% 28.71%

2017 0.0419659794% - 33,013,111 4,507,810 0.00% 22.33%

2018 0.0448742572% - 30,255,842 4,680,802 0.00% 25.41%





-76-

Exhibit L-4

Note to Required Schedules of Supplementary Information - Part III

PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS)

Change in benefit terms

None

Change in assumptions

The calculation of the discount rate used to measure the total

pension liability is dependent upon the long·term expected rate

of return, and the municipal bond index rate. There was a change

in the municipal bond index rate from the prior measurement date

(2.85%) to the current measurement date (3.58%), resulting in a

change in the discount rate from 3.98% to 5.00%. This change in the

discount rate is considered to be a change in actuarial assumptions

under GASBS No. 68.

TEACHERS PENSION AND ANNUITY FUND (TPAF)

Change in benefit terms

None

Change in assumptions

The calculation of the discount rate used to measure the total

pension liability is dependent upon the long·term expected rate

of return, and the municipal bond index rate. There was a change

in the municipal bond index rate from the prior measurement date

(2.85%) to the current measurement date (3.58%), resulting in a

change in the discount rate from 3.22% to 4.25%. This change in the

discount rate is considered to be a change in actuarial assumptions

under GASBS No. 68.



-77-

Supplementary Schedules

SPECIAL REVENUE FUND

Exh

ibit

E-1

Tota

l

Bro

ugh

tT

itle

II,

Tit

le I

II

Forw

ard

Tit

le I

Tit

le I

I,P

art

A,

Imm

igra

nt

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le I

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ota

ls

(Ex.

E-1

b)

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AP

art

AC

arr

yo

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ov

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mig

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01

8

RE

VE

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tate

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es12,1

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12

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9

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eder

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9,7

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EX

PE

ND

ITU

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S:

Inst

ruct

ion

:

O

ther

Purc

has

ed S

ervic

es (

400-5

00 s

erie

s)119,7

37

11

9,7

37

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ener

al S

uppli

es14,9

09

5,4

16

9

1

20

,41

6

Tota

l in

stru

ctio

n134,6

46

-

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-

5,4

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9

1

14

0,1

53

Su

pp

ort

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vic

es:

P

urc

has

ed P

rofe

ssio

nal

Ser

vic

es10,6

82

64,8

00

13,5

00

8

8,9

82

M

isce

llan

eous

Pu

rchas

ed S

ervic

es-

125

4

63

58

8

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l su

pp

ort

ser

vic

es10,6

82

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00

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63

-

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8

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end

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145,3

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00

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Exce

ss (

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icie

ncy

) of

Rev

enu

es O

ver

(U

nd

er)

E

xp

end

itu

res

an

d O

ther

Fin

an

cin

g S

ou

rces

(U

ses)

-

-

-

-

-

-

-

EN

GL

EW

OO

D C

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FS

BO

AR

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CA

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Sp

ecia

l R

even

ue

Fu

nd

Com

bin

ing S

ched

ule

of

Pro

gra

m R

even

ues

an

d E

xp

end

itu

res

- B

ud

get

ary

Ba

sis

Fis

cal

Yea

r E

nd

ed J

un

e 30,

2018

-78-

Exh

ibit

E-1

a

Tit

le I

II,

En

gli

shN

.J. N

on

pu

bli

cN

.J. N

on

pu

bli

c

Lan

gu

age

Acq

. &

Tit

le

IDE

AID

EA

Part

BN

urs

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hn

olo

gy

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tals

En

han

cem

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cP

resc

hoo

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ices

Aid

20

18

RE

VE

NU

ES

S

tate

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es9

,89

4

2

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5

1

2,1

59

F

eder

al S

ourc

es8,1

35

5,2

97

115,3

20

4,4

17

13

3,1

69

T

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even

ues

8,1

35

5,2

97

115,3

20

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9,8

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2

,26

5

1

45

,32

8

EX

PE

ND

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S:

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ruct

ion

:

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has

ed S

ervic

es (

400-5

00 s

erie

s)115,3

20

4,4

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11

9,7

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G

ener

al S

uppli

es7,3

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5,2

97

2,2

65

1

4,9

09

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l in

stru

ctio

n7,3

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5,2

97

115,3

20

4,4

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-

2

,26

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,64

6

Su

pp

ort

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vic

es:

P

urc

has

ed P

rofe

ssio

nal

Ser

vic

es788

9

,89

4

1

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82

M

isce

llan

eous

Purc

has

ed S

ervic

es-

Tota

l su

pp

ort

ser

vic

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-

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-

1

0,6

82

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l E

xp

end

itu

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8,1

35

5,2

97

115,3

20

4,4

17

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2

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5

1

45

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8

Exce

ss (

Def

icie

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) of

Rev

enu

es O

ver

(U

nd

er)

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xp

end

itu

res

an

d O

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Fin

an

cin

g S

ou

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(U

ses)

-

-

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-

-

EN

GL

EW

OO

D C

LIF

FS

BO

AR

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CA

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ecia

l R

even

ue

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nd

Com

bin

ing S

ched

ule

of

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gra

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an

d E

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end

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- B

ud

get

ary

Ba

sis

Fis

cal

Yea

r E

nd

ed J

un

e 30,

2018

-79-

PROPRIETARY FUNDS

Exhibit G-1

Special Milk Enrichment

Program Program Totals

ASSETS

Current assets:

Cash and cash equivalents 1,507 30,861 32,368

Accounts receivable:

Federal 517 517

Total current assets 2,024 30,861 32,885

Noncurrent assets:

Capital assets:

Equipment 2,000 2,000

Less accumulated depreciation (2,000) (2,000)

Total capital assets (net of accumulated

depreciation)

Total assets 2,024 30,861 32,885

LIABILITIES

Current liabilities:

Account payable 728 6,065 6,793

Total current liabilities 728 6,065 6,793

NET POSITION

Unrestricted 1,296 24,796 26,092

Total net position 1,296 24,796 26,092


Combining Statement of Net Position

Enterprise Funds

June 30, 2018

-80-

Ex

hib

it G

-2

Sp

ecia

l M

ilk

En

rich

men

tIn

ven

gin

eeri

ng

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gra

mP

rog

ram

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gra

mT

ota

ls

Op

erat

ing r

even

ues

:

Ch

arges

for

serv

ices

:

D

aily

sal

es -

rei

mb

urs

able

pro

gra

ms

2,1

58

2,1

58

T

uit

ion

Ch

arges

42

,09

5

3,1

50

45

,24

5

T

ota

l op

erat

ing r

even

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2,1

58

42

,09

5

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50

47

,40

3

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xp

ense

s:

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of

sale

s -

reim

bu

rsab

le p

rogra

ms

3,8

15

3,8

15

Sal

arie

s an

d w

ages

26

,94

4

2,1

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29

,11

9

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pp

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an

d m

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10

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8

97

5

11

,42

3

T

ota

l O

per

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xp

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5

37

,39

2

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44

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7

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g i

nco

me

(loss

)(1

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7)

4,7

03

-

3,0

46

Non

op

erat

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even

ues

(ex

pen

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:

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eral

sou

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:

S

pec

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9

-

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2,4

69

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ota

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on

op

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even

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(ex

pen

ses)

2,4

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-

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I

nco

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efore

con

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uti

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81

2

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in n

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-

5,5

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nin

g4

84

20

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7

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osi

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—en

din

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6

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xp

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an

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terp

rise

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-81-

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CA

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IVIT

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eip

ts f

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cu

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2,1

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42

,09

53

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04

7,4

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Pay

men

ts f

or

mil

k p

urc

has

es(3

,38

7)

(3,3

87

)

Pay

men

ts f

or

Sal

arie

s an

d W

ages

(26

,71

7)

(2,1

75

)

(28

,89

2)

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men

ts f

or

sup

pli

es(4

,61

0)

(97

5)

(5,5

85

)

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et c

ash

pro

vid

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y (

use

d f

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39

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non

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fin

anci

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-

-

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et i

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(d

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in

cas

h a

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cas

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1,4

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8

-

12

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ance

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egin

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f yea

r3

2

20

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3

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20

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ance

s—en

d o

f yea

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7

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1

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32

,36

8

Rec

on

cili

ati

on

of

op

era

tin

g i

nco

me

(lo

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to n

et c

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(

use

d)

by

op

era

tin

g a

ctiv

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s:

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per

atin

g i

nco

me

(loss

)(1

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7)

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03

-

3,0

46

A

dju

stm

ents

to r

econ

cile

op

erat

ing i

nco

me

(loss

) to

net

cas

h p

rovid

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y

(u

sed

for)

op

erat

ing a

ctiv

itie

s

In

crea

se (

dec

reas

e) i

n a

ccou

nts

pay

able

42

8

6,0

65

6,4

93

T

ota

l ad

just

men

ts4

28

6,0

65

-

6,4

93

Net

cas

h p

rovid

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y (

use

d f

or)

op

erat

ing a

ctiv

itie

s(1

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9)

10

,76

8

-

9,5

39

EN

GL

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D C

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FS

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AR

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CA

TIO

N

Fis

cal

Yea

r E

nd

ed J

un

e 3

0, 2

01

8

-82-

FIDUCIARY FUND

Exhibit H-1

Agency

Fund

ASSETS

Cash and cash equivalents 277,889

Total assets 277,889

LIABILITIES

Payable to student groups 6,707

Payroll deductions and withholdings 70,483

Net payroll - summer pay 196,378

Flexible spending 4,101

Interfund - General Fund 220

Total liabilities 277,889


Combining Statement of Fiduciary Net Position

Fiduciary Funds

June 30, 2018

-83-

Exhibit H-3

Student Activity Agency Fund

Schedule of Receipts and Disbursements

Balance Cash Cash Balance

July 1, 2016 Receipts Disbursed June 30, 2017

Upper School 16,533 113,966 123,792 6,707

Total All Schools 16,533 113,966 123,792 6,707



-84-

Exhibit H-4

Payroll Agency Fund

Schedule of Receipts and Disbursements

Balance Cash Cash Balance

July 1, 2017 Receipts Disbursed June 30, 2018

Interfund Payable -

General Fund 11,795 220 11,795 220

Net Payroll 6,673 3,889,812 3,889,813 6,672

Flexible Spending Account 7,039 6,511 9,449 4,101

Payroll Deductions

and Withholdings 14,733 3,502,870 3,453,792 63,811

Summer Pay 127,479 196,702 127,803 196,378

167,719 7,596,115 7,492,652 271,182



-85-

LONG-TERM DEBT

Exh

ibit

I-1

Dat

e of

Am

ount

of

Annual

Mat

uri

ties

Inte

rest

Bal

ance

Bal

ance

ISS

UE

Issu

eIs

sue

Dat

eA

mount

Rat

eJu

ly 1

, 2

01

7D

ecre

ased

Jun

e 3

0, 2

01

8

Sch

ool

Ref

un

din

g B

on

ds

4/1

9/2

01

71,6

85,0

00

8/1

5/2

018

330,0

00

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00

%$

1,6

85,0

00

335,0

00

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50,0

00

8/1

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019

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00

1.7

00

%

8/1

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020

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00

1.7

00

%

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00

1.7

00

%

$1,6

85,0

00

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00

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00

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30

, 2

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8

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g T

erm

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t A

ccou

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p

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tem

en

t of

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l B

on

ds

-86-

Ex

hib

it I

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pa

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un

d

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ian

ce

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gin

alB

ud

get

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alP

osi

tive

(Neg

ativ

e)

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dget

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nsf

ers

Bu

dget

Act

ual

Fin

al t

o A

ctu

al

RE

VE

NU

ES

:

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l S

ou

rces

:

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l T

ax L

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26

7,8

29

26

7,8

29

26

7,8

29

-

Sta

te S

ou

rces

:

Deb

t S

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e A

id T

yp

e II

91

,61

1

91

,61

1

91

,61

1

-

Tota

l -

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te S

ou

rces

91

,61

1

-

91

,61

1

91

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1

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tal

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enu

es3

59

,44

0

-

35

9,4

40

35

9,4

40

-

EX

PE

ND

ITU

RE

S:

Reg

ula

r D

ebt

Ser

vic

e:

Inte

rest

59

,44

0

(35

,00

0)

24

,44

0

20

,70

5

(3,7

35

)

Red

emp

tion

of

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pal

30

0,0

00

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0

33

5,0

00

33

5,0

00

-

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l R

egu

lar

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t S

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59

,44

0

-

35

9,4

40

35

5,7

05

(3,7

35

)

To

tal

exp

end

itu

res

35

9,4

40

-

35

9,4

40

35

5,7

05

(3,7

35

)

Ex

cess

(D

efic

ien

cy)

of

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enu

es O

ver

(U

nd

er)

Ex

pen

dit

ure

s-

-

-

3,7

35

3,7

35

Oth

er F

inan

cin

g S

ou

rces

:

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erat

ing T

ran

sfer

s In

:

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se o

ut

of

Con

stru

ctio

n E

scro

w A

ccou

nt

-

-

-

4,3

45

4,3

45

Ex

cess

(D

efic

ien

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of

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enu

es a

nd

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er

Fin

anci

ng S

ou

rces

Over

(U

nd

er)

Ex

pen

dit

ure

s-

-

-

8,0

80

8,0

80

Fu

nd

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ance

, Ju

ly 1

-

-

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18

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94

18

8,8

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Fu

nd

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ance

, Ju

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30

-

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19

6,9

74

19

6,9

74

Rec

ap

itu

lati

on

of

Ex

cess

(D

efic

ien

cy)

of

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enu

es O

ver

(U

nd

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Ex

pen

dit

ure

s

Bu

dget

ed F

un

d B

alan

ce-

-

-

8,0

80

8,0

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GL

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DU

CA

TIO

N

Fis

cal

Yea

r E

nd

ed J

un

e 3

0, 2

01

8

-87-

STATISTICAL SECTION

STATISTICAL SECTION (UNAUDITED)

Introduction to the Statistical Section

Financial Trends

J-1 Net Assets/Position by Component

J-2 Changes in Net Assets/Position

J-3 Fund Balances - Governmental Funds

J-4 Changes in Fund Balances - Governmental Funds

J-5 General Fund Other Local Revenue by Source

Revenue Capacity

J-6 Assessed Value and Estimated Actual Value of Taxable Property

J-7 Direct and Overlapping Property Tax Rates

J-8 Principal Property Taxpayers

J-9 Property Tax Levies and Collections

Debt Capacity

J-10 Ratios of Outstanding Debt by Type

J-11 Ratios of General Bonded Debt Outstanding

J-12 Direct and Overlapping Governmental Activities Debt

J-13 Legal Debt Margin Information

Demographic and Economic Information

J-14 Demographic and Economic Statistics

J-15 Principal Employers

Operating Information

J-16 Full-time Equivalent District Employees by Function/Program

J-17 Operating Statistics

J-18 School Building Information*

J-19 Schedule of Allowable Maintenance Expenditures by School Facility

J-20 Insurance Schedule

Exh

ibit

J-1

20

09

20

10

20

11

20

12

20

13

20

14

2015

2016

2017

2018

Gover

nm

enta

l ac

tivit

ies

Inves

ted i

n c

apit

al a

sset

s, n

et o

f re

late

d d

ebt

95

4,7

12

90

6,8

19

83

0,3

87

79

3,0

40

1,6

15

,88

31

,77

3,5

40

1,8

37,9

57

1,7

94,5

48

1,7

66,9

91

2,6

97,2

26

Res

tric

ted

1,9

22

,39

11

,46

4,1

73

2,1

34

,49

12

,23

9,1

90

2,4

27

,84

52

,46

1,6

42

2,4

18,5

46

2,6

70,0

11

3,5

06,0

24

3,0

58,5

63

Unre

stri

cted

(13

7,4

14

)(1

13

,28

9)

13

4,4

69

51

0,4

58

63

2,6

96

20

3,4

16

(2,5

40

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1,7

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$

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Sourc

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CA

FR

Sch

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A-1

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GA

SB

Sta

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No.

63

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r th

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14

20

15

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Exp

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23

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Go

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1,4

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3,8

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21

4,9

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21

1,5

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23

5,8

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$

24

9,6

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$

25

8,6

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$

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32

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36

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Net

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(10

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5,5

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(12

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(13

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(13

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2,7

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)$

(14

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2,9

22

)$

(16

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7,4

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)$

Bu

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typ

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tivit

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53

8

(38

8)

13

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)

10

(13

6)

84

83

0

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15

To

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(10

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(10

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7,2

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(12

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3,7

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(13

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2,4

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(13

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1,9

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(14

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3,9

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(16

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1,8

92

)$

-90-

Exh

ibit

J-2

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

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3,6

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-

-

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11

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82

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49

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13

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Bu

sin

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$

49

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Net

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ets

to N

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tio

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Exh

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20

09

20

10

20

11

20

12

20

13

20

14

2015

2016

2017

2018

Gen

eral

Fund

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erved

1,2

56

,47

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89

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$

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rese

rved

23

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2

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$

2,2

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$

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2,9

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61

$

1,9

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67

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Ass

igned

36

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0,7

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71

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33

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276,1

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205,7

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273,7

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3

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2

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$

2,7

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18

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$

18

8,8

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$

188,8

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188,8

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196,9

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Sourc

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20

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20

10

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6,5

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63

$

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16

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17

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19

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20

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20

10

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20

15

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19

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5,0

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5,0

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22

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23

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24

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0,0

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14

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10

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2,2

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11

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12

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12

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1,5

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13

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2,2

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2,7

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Exce

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58

1,8

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41

4,2

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(63

1,2

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26

4,3

67

50

9,0

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5,5

36

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Oth

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-

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13

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62

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58

1,8

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41

4,2

30

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54

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(12

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26

4,3

67

$

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9,0

21

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Deb

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of

non

capit

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xpen

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%3

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Dis

tric

t re

cord

s

Note

: C

apit

al P

roje

cts

Fu

nd

is

not

incl

ud

ed a

s th

ese

expen

dit

ure

s var

y s

ubst

anti

ally

fro

m y

ear

to y

ear.

T

he

fin

anci

al d

ata

pre

sen

ted

wou

ld n

ot

be

mea

nin

gfu

l fo

r co

mpar

ativ

e pu

rpose

s if

thes

e w

ere

incl

ud

ed.

Sou

rce:

C

AF

R, S

ched

ule

B-2

-94-

Exh

ibit

J-5

Fis

cal

Yea

r

Endin

g J

une

30,

Tu

itio

n

PT

A

Don

atio

ns

Inte

rest

Ref

unds

Set

tlem

ents

Pri

or

Yea

r

Void

ed

Chec

ks

Bal

ance

of

Unem

plo

ym

ent

Clo

sed t

o

Gen

eral

Fund

Tec

hn

olo

gy

Fee

s

Pro

ceed

s

from

Sal

e of

Tec

hn

olo

gy

Mis

cell

aneo

us

An

nu

al

Tota

ls

2009

31,8

36

3,3

53

35

,18

9

2010

18

5,6

10

20,1

38

7,9

21

2,5

70

21

6,2

39

2011

17

9,9

08

16,8

12

1,2

52

19

7,9

72

2012

75

,75

712,4

77

4,6

57

92

,89

1

2013

24

8,8

61

2,7

65

2,0

78

57

52

54

,27

9

2014

91

,08

31,8

28

3,2

12

96

,12

3

2015

26

8,4

50

1,0

55

984

4,9

83

5,4

16

28

0,8

88

2016

39

7,6

99

3,0

65

62,1

60

13

,95

24

76

,87

6

2017

30

0,4

27

10,5

46

21,6

11

66

,00

33

98

,58

7

2018

23

0,5

00

43

,42

017,5

51

1,3

26

16

,12

51

01

,46

74

3,1

35

45

3,5

24

Sourc

e: D

istr

ict

reco

rds

En

gle

wood

Cli

ffs

Board

of

Ed

uca

tion

Gen

eral

Fu

nd

- O

ther

Loca

l R

even

ue

by

Sou

rce

Last

Ten

Fis

cal

Yea

rs

(modif

ied a

ccru

al

basi

s of

acc

ounti

ng)

-95-

Exh

ibit

J-6

Yea

r E

nd

ed

Dec

emb

er 3

1,

Vac

ant

Lan

dR

esid

enti

alC

om

mer

cial

Ind

ust

rial

Ap

artm

ent

To

tal

Ass

esse

d

Val

ue

Les

s :

Tax

Ex

emp

t

Pro

per

ty

Pu

bli

c U

tili

ties

a

Net

Val

uat

ion

Tax

able

To

tal

Dir

ect

Sch

oo

l T

ax

Rat

e b

Est

imat

ed A

ctu

al

(Co

un

ty E

qu

aliz

ed)

Val

ue

% o

f N

et

Ass

esse

d t

o

Est

imat

ed

Fu

ll C

ash

Val

uat

ion

s

20

08

62

,99

9,0

00

2,3

86

,94

3,4

00

98

6,9

83

,80

0

1,8

86

,50

0

1,7

50

,00

0

3,4

40

,56

2,7

00

91

1,9

02

,00

0

1,7

11

,47

5

2,5

30

,37

2,1

75

0.2

65

3,3

13

,45

0,1

07

76

.37

%

20

09

54

,48

7,1

00

2,3

93

,39

3,2

00

1,0

03

,35

1,1

00

1,8

86

,50

0

1,7

50

,00

0

3,4

54

,86

7,9

00

91

1,9

02

,00

0

1,9

80

,25

6

2,5

44

,94

6,1

56

0.2

74

3,3

71

,50

8,4

39

75

.48

%

20

10

47

,20

2,0

00

2,4

27

,40

8,7

00

94

4,2

71

,60

0

1,8

86

,50

0

1,7

50

,00

0

3,4

22

,51

8,8

00

91

8,2

28

,30

0

1,9

25

,17

9

2,5

06

,21

5,6

79

0.2

92

3,4

65

,12

7,8

57

72

.33

%

20

11

50

,56

2,7

00

2,4

20

,68

9,7

00

95

2,0

29

,80

0

1,8

86

,50

0

1,7

50

,00

0

3,4

26

,91

8,7

00

91

7,4

66

,20

0

1,7

25

,84

2

2,5

11

,17

8,3

42

0.2

93

3,3

69

,66

8,2

46

74

.52

%

20

12

44

,34

7,4

00

2,4

31

,49

9,8

00

93

5,9

26

,30

0

1,6

75

,00

0

1,7

50

,00

0

3,4

15

,19

8,5

00

91

7,5

66

,20

0

1,6

34

,93

8

2,4

99

,26

7,2

38

0.2

97

3,2

10

,14

4,6

92

77

.86

%

20

13

43

,62

5,6

00

2,4

31

,09

8,7

00

92

6,8

89

,70

0

1,6

75

,00

0

1,7

50

,00

0

3,4

05

,03

9,0

00

91

7,5

66

,20

0

1,4

72

,53

7

2,4

88

,94

5,3

37

0.3

03

3,1

48

,45

8,6

74

79

.05

%

20

14

44

,03

6,5

00

2,4

32

,90

9,9

00

88

4,9

30

,30

0

-

1,7

50

,00

0

3,3

63

,62

6,7

00

91

7,5

66

,20

0

1,2

70

,04

4

2,4

47

,33

0,5

44

0.3

13

3,1

08

,99

0,3

36

78

.72

%

20

15

40

,94

4,4

00

2,4

45

,23

0,9

00

87

8,7

92

,50

0

-

1,7

50

,00

0

3,3

66

,71

7,8

00

92

1,0

55

,40

0

1,2

70

,04

4

2,4

46

,93

2,4

44

0.3

33

3,2

21

,16

0,8

24

75

.96

%

20

16

37

,47

0,7

00

2,4

59

,59

6,2

00

87

1,3

71

,20

0

-

1,7

50

,00

0

3,3

70

,18

8,1

00

91

7,5

66

,20

0

1,3

44

,39

0

2,4

53

,96

6,2

90

0.3

76

3,2

54

,75

1,4

71

75

.40

%

20

17

38

,14

4,1

00

2,4

85

,80

9,0

00

83

8,9

10

,30

0

-

1,7

50

,00

0

3,3

64

,61

3,4

00

91

7,5

66

,20

0

1,3

34

,26

2

2,4

48

,38

1,4

62

0.3

93

3,5

88

,86

8,6

22

68

.22

%

Sou

rce:

Mu

nic

ipa

l T

ax A

ssess

or

Note

:

Rea

sses

smen

t o

ccu

rs w

hen

th

e C

ou

nty

Bo

ard

of

Tax

atio

n r

equ

ests

Tre

asu

ry t

o o

rder

a r

eass

essm

ent

aT

axab

le V

alu

e o

f M

ach

iner

y, Im

ple

men

ts a

nd

Eq

uip

men

t o

f T

elep

ho

ne,

Tel

egra

ph

an

d M

esse

nger

Syst

em C

om

pan

ies

bT

ax r

ates

are

per

$1

00

N/A

At

the

tim

e o

f C

AF

R c

om

ple

tio

n, th

is d

ata

was

no

t yet

avai

lab

le

En

gle

wood

Cli

ffs

Boa

rd

of

Ed

uca

tion

Ass

ess

ed

Va

lue a

nd

Actu

al

Va

lue o

f T

axa

ble

Prop

erty

,

La

st T

en

Fis

ca

l Y

ea

rs

Rea

l p

rop

erty

is

req

uir

ed t

o b

e as

sess

ed a

t so

me

per

cen

tage

of

tru

e val

ue

(fai

r o

r m

arket

val

ue)

est

abli

shed

by e

ach

co

un

ty b

oar

d o

f ta

xat

ion

.

-96-

Exhibit J-7

Basic Rate a

General

Obligation

Debt Service b

(From J-

6)

Total

Direct

School

Borough of

Englewood

Cliffs

Bergen

County

Year Ended

Dec. 31,

2008 0.258 0.007 0.265 0.278 0.178 0.721

2009 0.256 0.018 0.274 0.291 0.186 0.751

2010 0.287 0.005 0.292 0.307 0.196 0.795

2011 0.285 0.008 0.293 0.305 0.197 0.795

2012 0.289 0.008 0.297 0.324 0.204 0.825

2013 0.295 0.008 0.303 0.332 0.214 0.849

2014 0.305 0.008 0.313 0.339 0.218 0.870

2015 0.325 0.008 0.333 0.370 0.227 0.930

2016 0.368 0.008 0.376 0.368 0.235 0.979

2017 0.385 0.008 0.393 0.373 0.232 0.998

Source: Municipal Tax Collector

Note:

a The district's basic tax rate is calculated from the A4F form which is submitted

with the budget and the Net valuation taxable.

b Rates for debt service are based on each year's requirements.

NJSA 18A:7F-5d limits the amount that the district can submit for a general fund tax levy . The levy

when added to other components of the district's net budget may not exceed the prebudget year net

budget by more than the spending growth limitation calculated as follows: the prebudget year net

budget increased by the cost of living or 2.5 percent, whichever is greater, plus any spending growth

adjustments.

Englewood Cliffs Board of Education

Direct and Overlapping Property Tax Rates

Last Ten Fiscal Years

(rate per $100 of assessed value)

Englewood Cliffs Board of Education Overlapping Rates

Total Direct

and

Overlapping

Tax Rate

-97-

Exh

ibit

J-8

Tax

able

% o

f T

ota

lT

axab

le%

of

Tota

l

Ass

esse

dR

ank

Dis

tric

t N

et

Ass

esse

dR

ank

Dis

tric

t N

et

Val

ue

[Opti

onal

]A

sses

sed V

alue

Val

ue

[Opti

onal

]A

sses

sed V

alue

Tax

pay

er 1

82,5

00,0

00

$

12.4

5%

11

9,9

81,5

00

$

13.4

7%

Tax

pay

er 2

62,3

27,4

00

21.8

5%

11

5,5

56,2

00

23.3

4%

Tax

pay

er 3

61,8

31,6

50

31.8

4%

10

8,1

87,5

00

33.1

3%

Tax

pay

er 4

55,0

00,0

00

41.6

3%

87,5

25,7

00

42.5

3%

Tax

pay

er 5

47,2

23,3

00

51.4

0%

38,1

66,8

00

51.1

0%

Tax

pay

er 6

35,5

00,0

00

61.0

5%

37,1

94,6

00

61.0

8%

Tax

pay

er 7

34,0

00,0

00

71.0

1%

29,9

57,3

00

70.8

7%

Tax

pay

er 8

32,5

00,0

00

80.9

7%

21,1

81,9

00

80.6

1%

Tax

pay

er 9

22,5

00,0

00

90.6

7%

20,6

18,2

00

90.6

0%

Tax

pay

er 1

017,7

80,6

00

10

0.5

3%

19,9

30,3

00

10

0.5

8%

Tota

l451,1

62,9

50

$

13.4

0%

59

8,3

00,0

00

$

17.3

1%

Tota

l N

et A

sses

sed

Val

ue

3,3

65,9

47,6

62

3,4

56,8

48,1

56

So

urce:

Mu

nic

ipal

Tax

Ass

esso

r

En

gle

wood

Cli

ffs

Board

of

Ed

ucati

on

Prin

cip

al

Prop

erty

Taxp

ay

ers,

Cu

rren

t Y

ear a

nd

Nin

e Y

ears

Ago

2018

2009

-98-

Exhibit J-9

Amount Percentage of Levy

2009 9,130,542 9,130,542 100.00% -

2010 9,463,355 9,463,349 100.00% 6

2011 9,975,855 9,975,847 100.00% 8

2012 10,052,158 10,052,158 100.00% -

2013 10,136,420 10,136,420 100.00% -

2014 10,334,737 10,334,737 100.00% -

2015 10,540,381 10,540,381 100.00% -

2016 11,226,381 11,226,381 100.00% -

2017 12,686,593 12,686,593 100.00% -

2018 13,231,463 13,231,463 100.00%

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

a - School taxes are collected by the Municipal Tax Collector. Under New

Jersey State Statute, a municipality is required to remit to the school district

the entire property tax balance in the amount voted upon or certified prior to

the end of the school year.


Property Tax Levies and Collections,


Fiscal

Year

Ended

June 30,

Taxes Levied for

the Fiscal Year

Collected within the Fiscal Year of the Levy a Collections in

Subsequent

Years

-99-

Ex

hib

it J

-10

Bu

sin

ess-

Typ

e

Act

ivit

ies

Fis

cal

Yea

r

En

ded

Jun

e 3

0,

Gen

eral

Ob

ligat

ion

Bo

nd

s b

Cer

tifi

cate

s o

f

Par

tici

pat

ion

Cap

ital

Lea

ses

Bo

nd

An

tici

pat

ion

No

tes

(BA

Ns)

Cap

ital

Lea

ses

To

tal

Dis

tric

t

Per

cen

tage

of

Per

son

al I

nco

me

aP

er C

apit

a a

20

09

3,5

76

,00

0

-

-

-

-

3,5

76

,00

0

0

.94

%5

4.9

3$

20

10

3,3

71

,00

0

-

-

-

-

3,3

71

,00

0

0

.96

%5

1.0

1$

20

11

3,1

56

,00

0

-

-

-

-

3,1

56

,00

0

0

.85

%4

5.7

1$

20

12

2,9

31

,00

0

-

-

-

-

2,9

31

,00

0

0

.76

%4

0.7

3$

20

13

2,6

96

,00

0

-

-

-

-

2,6

96

,00

0

0

.70

%3

7.7

3$

20

14

2,4

51

,00

0

-

-

-

-

2,4

51

,00

0

0

.62

%3

3.4

4$

20

15

2,1

91

,00

0

-

-

-

-

2,1

91

,00

0

0

.53

%2

8.6

8$

20

16

1,9

21

,00

0

-

-

-

-

1,9

21

,00

0

0

.46

%2

4.8

9$

20

17

1,6

85

,00

0

-

-

-

-

1,6

85

,00

0

N

ot

Avai

lab

leN

ot

Avai

lab

le

20

18

1,3

50

,00

0-

-

-

-

1,3

50

,00

0

N

ot

Avai

lab

leN

ot

Avai

lab

le

Note

: D

etai

ls r

egar

din

g t

he

dis

tric

t's o

uts

tan

din

g d

ebt

can

be

fou

nd

in

th

e n

ote

s to

th

e fi

nan

cial

sta

tem

ents

.

aS

ee

Exh

ibit

NJ

J-1

4 f

or

per

son

al i

nco

me

and

po

pu

lati

on

dat

a.

Th

ese

rati

os

are

calc

ula

ted

usi

ng p

erso

nal

in

com

e an

d

p

op

ula

tio

n f

or

the

pri

or

cale

nd

ar y

ear.

bIn

clu

des

Ear

ly R

etir

emen

t In

cen

tive

Pla

n (

ER

IP)

refu

nd

ing

En

gle

wood

Cli

ffs

Board

of

Ed

uca

tion

Rati

os

of

Ou

tsta

nd

ing

Deb

t b

y T

yp

e

Last

Ten

Fis

cal

Yea

rs

Go

ver

nm

enta

l A

ctiv

itie

s

-100-

Exhibit J-11

Fiscal

Year

Ended

June 30,

General

Obligation Bonds Deductions

Net General

Bonded Debt

Outstanding

Percentage of

Actual

Taxable

Value a of

Property Per Capita b

2009 3,576,000 - 3,576,000 0.14% 65,097

2010 3,371,000 - 3,371,000 0.13% 66,080

2011 3,156,000 - 3,156,000 0.13% 69,044

2012 2,931,000 - 2,931,000 0.12% 71,953

2013 2,696,000 - 2,696,000 0.11% 71,449

2014 2,451,000 - 2,451,000 0.10% 73,293

2015 2,191,000 - 2,191,000 0.09% 76,388

2016 1,921,000 - 1,921,000 0.08% 77,187

2017 1,685,000 - 1,685,000 Not Available Not Available

2018 1,350,000 - 1,350,000 Not Available Not Available

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

a See Exhibit NJ J-6 for property tax data.

b Population data can be found in Exhibit NJ J-14.


Ratios of Net General Bonded Debt Outstanding


General Bonded Debt Outstanding

-101-

Ex

hib

it J

-12

Gover

nm

enta

l U

nit

Est

imat

ed

Per

cen

tage

Ap

pli

cab

le a

Deb

t O

uts

tan

din

g

Est

imat

ed S

har

e o

f

Over

lap

pin

g D

ebt

Dir

ect

Deb

t o

f S

cho

ol

Dis

tric

t as

of

Jun

e 3

0,

20

18

1,3

50

,00

0$

Deb

t re

pai

d w

ith

pro

per

ty t

axes

Bo

rou

gh

of

En

gle

wo

od

Cli

ffs

10

0.0

0%

17

,36

8,0

60

$

Co

un

ty o

f B

ergen

- B

oro

ugh

's S

har

e2

.14

7%

22

,48

3,4

54

Ber

gen

Co

un

ty U

tili

ties

Au

tho

rity

- B

oro

ugh

's S

har

e1

.39

6%

2,2

40

,08

0

Su

bto

tal,

over

lap

pin

g d

ebt

42

,09

1,5

94

Tota

l d

irec

t an

d o

ver

lap

pin

g d

ebt

43

,44

1,5

94

$

Sou

rces

:A

sses

sed

val

ue

dat

a u

sed

to

est

imat

e ap

pli

cab

le p

erce

nta

ges

pro

vid

ed b

y t

he

Ber

gen

Co

un

ty B

oar

d o

f T

axat

ion

.

Deb

t o

uts

tan

din

g d

ata

pro

vid

ed b

y e

ach

go

ver

nm

enta

l u

nit

.

Note

: O

ver

lap

pin

g g

over

nm

ents

are

th

ose

th

at c

oin

cid

e, a

t le

ast

in p

art,

wit

h t

he

geo

gra

ph

ic b

ou

nd

arie

s o

f th

e D

istr

ict.

Th

is s

ched

ule

est

imat

es t

he

po

rtio

n o

f th

e o

uts

tan

din

g d

ebt

of

tho

se o

ver

lap

pin

g g

over

nm

ents

th

at i

s b

orn

e b

y t

he

resi

den

ts a

nd

bu

sin

esse

s o

f E

ngle

wo

od

Cli

ffs.

T

his

pro

cess

rec

ogn

izes

th

at,

wh

en c

on

sid

erin

g t

he

Dis

tric

t's a

bil

ity t

o i

ssu

e an

d r

epay

lo

ng-t

erm

deb

t, t

he

enti

re d

ebt

bu

rden

bo

rne

by t

he

resi

den

ts a

nd

bu

sin

esse

s sh

ou

ld b

e ta

ken

in

to a

cco

un

t.

Ho

wev

er t

his

do

es n

ot

imp

ly t

hat

ever

y t

axp

ayer

is

a re

sid

ent,

an

d t

her

efo

re r

esp

on

sib

le f

or

rep

ayin

g t

he

deb

t, o

f ea

ch o

ver

lap

pin

g p

aym

ent.

aF

or

deb

t re

pai

d w

ith

pro

per

ty t

axes

, th

e p

erce

nta

ge

of

over

lap

pin

g d

ebt

app

lica

ble

is

esti

mat

ed u

sin

g t

axab

le a

sses

sed

pro

per

ty v

alu

es.

Ap

pli

cab

le p

erce

nta

ges

wer

e es

tim

ated

by d

eter

min

ing t

he

po

rtio

n o

f an

oth

er g

over

nm

enta

l u

nit

's t

axab

le v

alu

e th

at i

s w

ith

in t

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rs

-103-

Exhibit J-14

Per Capita Unemployment

Year Population a

Personal Income b

Personal Income c

Rate d

2009 5,855 381,142,935 65,097 7.60%

2010 5,325 351,876,000 66,080 7.60%

2011 5,363 370,282,972 69,044 7.50%

2012 5,381 387,179,093 71,953 7.60%

2013 5,410 386,539,090 71,449 8.00%

2014 5,424 397,541,232 73,293 4.40%

2015 5,428 414,634,064 76,388 3.40%

2016 5,425 418,739,475 77,187 3.60%

2017 5,453 Not Available Not Available 3.10%

2018 Not Available Not Available Not Available Not Available

Source: a Population information provided by the NJ Dept of Labor and Workforce Development

b Personal income has been estimated based upon the municipal population and per capita

personal income presented.c Per Capita Personal Income - Bergen County - provided by NJ Dept of Labor and

Workforce Development.d

Unemployment data provided by the NJ Dept of Labor and Workforce Development


Demographic and Economic Statistics


-104-

Ex

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ob

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Cap

acit

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stu

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ts)

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roll

men

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of

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form

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rs

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men

tary

-108-

Exh

ibit

J-1

9

Sch

ool

Fac

ilit

ies

Pro

ject

. N

o.'s

2018

2017

2016

2015

2014

20

13

20

12

20

11

20

10

20

09

Nort

hcl

iff

Sch

ool

N/A

59,9

64

59,7

38

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3

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2

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02

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42

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49

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Upper

Sch

ool

N/A

104,9

81

79,7

87

61,7

93

48,2

37

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Gra

nd T

ota

l164,9

45

$

139,5

25

$

77,1

17

$

62,2

91

$

63,2

47

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49

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0$

11

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37

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7

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1

25

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69

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e: D

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reco

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edu

le o

f R

equ

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ten

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DIS

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AC

ILIT

IES

11-0

00-2

61-X

XX

-109-

Exhibit J-20

Company Type of Coverage Coverage Deductible

Great American Insurance Company Pollution-Per Incident 1,000,000 1,000

Pollution-Annual Aggregate 1,000,000

Valuable Papers & Records 4,925,000 1,000

Accts Receivable 25,000

Fine Arts 423,196 5,000

Electronic Information Systems 4,925,000 1,000

Musical Instruments 250,000 1,000

Cameras, Audio/Video Equip 250,000 1,000

Misc School Property 100,000 500

Misc Property - Tools Coverage 1,000 500

Contractors Equipment 250,000 1,000

Installation Floater 500,000 1,000

Theft of Money & Securities-Inside Premises 50,000 1,000

Theft of Money & Securities-Outside Premises 50,000 1,000

Computer Fraud 50,000 1,000

Commercial Property

Blanket Building Contents & Special Classes 2,689,452,962 5,000

General Liability

General Aggregate 2,000,000 5,000

Products & Completed Operations 2,000,000 5,000

Personal & Advertising Injury 1,000,000 5,000

Each Occurrence 1,000,000 5,000

Damages to Premises Rented 100,000 5,000

Employee Benefits Liability 1,000,000/per claim 1,000

2,000,000 annual aggregate

Darwin National Assurance School Board Legal Liability 1,000,000/per claim


Great American Insurance Company Sexual Abuse & Molestation 1,000,000/occurrence 1,000


Commercial Auto

Automobile Liability 1,000,000

Medical Payments 5,000

Uninsured Motorist 1,000,000

Underinsured Motorist 1,000,000

Comprehensive 1,000

Collision 1,000

Selective Ins. Co. of America Crime

Public Employee Theft-Per Employee 100,000 5,000

Public Employee Theft-Per Loss 400,000 100,000

Forgery or Alteration 50,000 1,000

Funds Transfer Fraud 50,000 1,000

Computer Fraud 50,000 1,000

Firemans Fund Ins. Co. Commercial Umbrella

Per Occurrence 10,000,000

Aggregate Limit 10,000,000

ACE USA Environmental Pollution Liability

Each Claim 2,000,000 15,000

Aggregate of all Claims 4,000,000

Total Policy Aggregate 20,000,000

Safety National Group Employers Liability-Each Accident 1,000,000

Disease-Each Employee 1,000,000

Disease-Each Policy 1,000,000


Insurance Schedule

June 30, 2018

-110-

Exhibit J-20

Company Type of Coverage Coverage Deductible


Insurance Schedule

June 30, 2018

X.L. America, Inc. Technology & Misc. Professional Services

Media & Privacy and Cyber Security 2,000,000/claim 15,000

Privacy & Cyber Security 1,000,000 15,000

Privacy Regulatory Defense, Awards & Fines 1,000,000 15,000

Business Interruption & Extra Expense 1,000,000 10 Hours

Data Recovery 1,000,000 25,000

Cyber-Extortion 1,000,000 25,000

Data Breach Response & Crisis Management 1,000,000 25,000

Aggregate Policy Limit 6,000,000

Darwin Educators Errors & Omissions 1,000,000 5,000

Employment Practices Liability 1,000,000 20,000

Policy Aggregate 1,000,000 5,000

Gerber Life Insurance Personal Injury

Accidental Death, Dismemberment & Paralysis 100,000

Aggregate Limit of Indemnity & Liability 1,000,000

Source: District Records

-111-

SINGLE AUDIT SECTION


K-1 Page 1 of 2

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS


We have audited, in accordance with auditing standards generally accepted in the United States ofAmerica; audit requirements as prescribed by the Office of School Finance, Department of Education,State of New Jersey; and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States, the financial statements of thegovernmental activities, the business-type activities and each major fund and the aggregate remainingfund information of the Board of Education of the Borough of Englewood Cliffs School District, in theCounty of Bergen, New Jersey, as of and for the year ended June 30, 2018, and the related notes to thefinancial statements, which collectively comprise the District’s basic financial statements, and haveissued our report thereon dated January 22, 2019.

Internal Control Over Financial Reporting

In planning and performing our audit on the financial statements, we considered the Borough ofEnglewood Cliffs Board of Education’s internal control over financial reporting (internal control) todetermine the audit procedures that are appropriate in the circumstances for the purpose of expressingour opinions on the financial statements, but not for the purpose of expressing an opinion on theeffectiveness of the Borough of Englewood Cliffs Board of Education’s internal control. Accordingly,we do not express an opinion on the effectiveness of the Borough of Englewood Cliffs Board ofEducation’s internal control.

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

-112-

Honorable President and K-1Members of the Board of Education Page 2 of 2

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

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Borough of Englewood Cliffs Board ofEducation’s financial statements are free of material misstatement, we performed tests of its compliancewith certain provisions of laws, regulations, contracts and grant agreements, noncompliance with whichcould 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 ofnoncompliance or other matters that are required to be reported under Government Auditing Standardsor the audit requirements as prescribed by the Office of School Finance, Department of Education, Stateof New Jersey.

We noted certain matters that were required to be reported to the Board of Education of the Borough ofEnglewood Cliffs School District in the separate Auditors’ Management Report on AdministrativeFindings - Financial, Compliance and Performance dated January 22, 2019.

Purpose of this Report

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



January 22, 2019


Steven D. Wielkotz

-113-


K-2 Page 1 of 3

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJORPROGRAM AND REPORT ON INTERNAL CONTROL OVER

COMPLIANCE AS REQUIRED BY THE UNIFORM GUIDANCEAND N.J. OMB CIRCULAR 15-08


Report on Compliance for Each Major Federal and State Program

We have audited the Board of Education of the Borough of Englewood Cliffs School District in theCounty of Bergen, New Jersey, compliance with the types of compliance requirements described in theOMB Compliance Supplements and the New Jersey State Aid/Grant Compliance Supplement that couldhave a direct and material effect on each of the Borough of Englewood Cliffs Board of Education’smajor federal and state programs for the year ended June 30, 2018. The Borough of Englewood CliffsBoard of Education’s major federal and state programs are identified in the summary of auditor’s resultssection of the accompanying schedule of findings and questioned costs.

Management’s Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, andgrants applicable to its federal and state programs.

Auditor’s Responsibility

Our responsibility is to express opinions on compliance for each of the Borough of Englewood CliffsBoard of Education’s major federal and state programs based on our audit of the types of compliancerequirements referred to above. We conducted our audit of compliance in accordance with auditingstandards generally accepted in the United States of America; the standards applicable to financialaudits contained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates; and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements,Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and N.J. OMBCircular 15-08. Those standards, the Uniform Guidance and N.J. OMB Circular 15-08 require that we

-114-


plan and perform the audit to obtain reasonable assurance about whether noncompliance with the typesof compliance requirements referred to above that could have a direct and material effect on a majorfederal and state program occurred. An audit includes examining, on a test basis, evidence about theBorough of Englewood Cliffs Board of Education’s compliance with those requirements and performingsuch other procedures as we considered necessary in the circumstances.

We believe that our provides a reasonable basis for our opinion on compliance for each major federaland state program. However, our audit does not provide a legal determination of the Borough ofEnglewood Cliffs Board of Education’s compliance.

Opinion on Each Major Federal and State Program

In our opinion, the Borough of Englewood Cliffs Board of Education complied, in all material respects,with the types of compliance requirements referred to above that could have a direct and material effecton each of its major federal and state programs for the year ended June 30, 2018.

Report on Internal Control Over Compliance

Management of the Borough of Englewood Cliffs Board of Education is responsible for establishing andmaintaining effective internal control over compliance with the types of compliance requirementsreferred to above. In planning and performing our audit of compliance, we considered the Borough ofEnglewood Cliffs Board of Education’s internal control over compliance with the type of requirementsthat could have a direct and material effect on each major federal and state program to determine theauditing procedures that are appropriate in the circumstances for the purpose of expressing an opinionon compliance for each major federal and state program and to test and report on internal control overcompliance in accordance with the Uniform Guidance and N.J. OMB Circular 15-08, but not for thepurpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly,we do not express an opinion on the effectiveness of Borough of Englewood Cliffs Board of Education’sinternal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control overcompliance does not allow management or employees, in the normal course of performing theirassigned functions, to prevent, or detect and correct, noncompliance with a type of compliancerequirement of a federal and state program on a timely basis. A material weakness in internal controlover 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 compliancerequirement of a federal and state program will not be prevented, or detected and corrected, on a timelybasis. A significant deficiency in internal control over compliance is a deficiency, or a combination ofdeficiencies, in internal control over compliance with a type of compliance requirement of a federal andstate program that is less severe than a material weakness in internal control over compliance, yetimportant enough to merit attention by those charged with governance.

-115-


Our consideration of internal control over compliance was for the limited purpose described in the firstparagraph of this section and was not designed to identify all deficiencies in internal control overcompliance that might be material weaknesses or significant deficiencies. We did not identify anydeficiencies in internal control over compliance that we consider to be material weaknesses orsignificant deficiencies.

The purpose of this report on internal control over compliance is solely to describe the scope of ourtesting of internal control over compliance and the results of that testing based on the requirements ofthe Uniform Guidance and N.J. OMB Circular 15-08. Accordingly, this report is not suitable for anyother purpose.



January 22, 2019

Steven D. Wielkotz


-116-

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Borough of Englewood Cliffs School District K-5Notes to the Schedules of Expenditures of Federal Awards and Page 1 of 3 State Financial Assistance June 30, 2018

NOTE 1. GENERAL

The accompanying Schedules of Expenditures of Federal Awards and State Financial Assistance include theactivity of all federal and state award programs of the Board of Education, Borough of Englewood CliffsSchool District. The Board of Education is defined in Note 1 to the Board's basic financial statements. Allfederal and state awards received directly from federal and state agencies, as well as federal and state awardspassed through other government agencies is included on the Schedules of Expenditures of Federal Awardsand State Financial Assistance.

NOTE 2. BASIS OF ACCOUNTING

The accompanying Schedules of Expenditures of Awards and Financial Assistance are presented on thebudgetary basis of accounting with the exception of programs recorded in the food service fund, which arepresented using the accrual basis of accounting. These bases of accounting are described in Notes 1(D) and1(E) to the Board’s basic financial statements. The information in this schedule is presented in accordancewith the requirements of 2 CFR 200-Uniform Administrative Requirements, Cost Principles, and AuditRequirements for Federal Awards. Therefore, some amounts presented in this schedule may differ fromamounts presented in, or used in the preparation of, the basic financial statements.

NOTE 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS

The basic financial statements present the general fund and the special revenue fund on a GAAP basis. Budgetary comparison statements or schedules (RSI) are presented for the general fund and special revenuefund to demonstrate finance-related legal compliance in which certain revenue is permitted by law or grantagreement to be recognized in the audit year, whereas for GAAP reporting, revenue is not recognized untilthe subsequent year or when expenditures have been made.

The general fund is presented in the accompanying schedules on the modified accrual basis with theexception of the revenue recognition of the last state aid payment in the current budget year, which ismandated pursuant to N.J.S.A. 18A:22-44.2. For GAAP purposes, that payment is not recognized until thesubsequent budget year due to the state deferral and recording of the last state aid payment in the subsequentyear. The special revenue fund is presented in the accompanying schedules on the grant accounting budgetarybasis which recognizes encumbrances as expenditures and also recognizes the related revenues, whereas theGAAP basis does not. The special revenue fund also recognizes the last state aid payment in the currentbudget year, consistent with N.J.S.A. 18A:22-44.2.

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Borough of Englewood Cliffs School District K-5Notes to the Schedules of Expenditures of Federal Awards and Page 2 of 3 State Financial AssistanceJune 30, 2018

NOTE 3. RELATIONSHIP TO BASIC FINANCIAL STATEMENTS, (continued)

The net adjustment to reconcile from the budgetary basis to the GAAP basis is $(2,962) for the General Fundand $(6,270) for the Special Revenue Fund. See Notes to Required Supplemental Information for areconciliation of the budgetary basis to the modified accrual basis of accounting for the general and specialrevenue funds. Awards and financial assistance revenues are reported in the Board’s financial statements ona GAAP basis as follows:

Federal State Total

General Fund $ $2,079,574 $2,079,574Special Revenue Fund 211,294 12,159 223,453Debt Service Fund 91,611 91,611Food Service Fund 2,469 2,469Total Awards and Financial $213,763 $2,183,344 $2,397,107

NOTE 4. RELATIONSHIP TO FEDERAL AND STATE FINANCIAL REPORTS

Amounts reported in the accompanying schedules agree with the amounts reported in the related federal andstate financial reports.

NOTE 5. OTHER

Revenues and expenditures reported under the Food Distribution Program represent current year valuereceived and current year distributions, respectively. The amount reported as TPAF Pension Contributionsrepresents the amount paid by the state on behalf of the District for the year ended June 30, 2018. TPAFSocial Security Contributions represents the amount reimbursed by the state for the employer’s share of socialsecurity contributions for TPAF members for the year ended June 30, 2018.

NOTE 6. ON-BEHALF PROGRAMS NOT SUBJECT TO STATE SINGLE AUDIT

On-behalf State Programs for TPAF Pension and Post-Retirement Medical Benefits Contributions are notsubject to a State single audit and, therefore, the amount of $1,125,447 of on-behalf payments is excludedfrom major program determination.

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Borough of Englewood Cliffs School District K-5Notes to the Schedules of Expenditures of Federal Awards and Page 3 of 3 State Financial AssistanceJune 30, 2018

NOTE 8. SCHOOLWIDE PROGRAM FUNDS

Schoolwide programs are not separate federal programs as defined in Uniform Administrative Requirements,Cost Principles, and Audit Requirements for Federal Awards (Uniform Grant Guidance); amounts used inschoolwide programs are included in the total expenditures of the program contributing the funds in theSchedule of Expenditures of Federal Awards. The following funds by program are included in schoolwideprograms in the school district:

Program Total

Title I, Part A: Grants to Local Educational Agencies $64,800Title II, Part A: Improving Teacher Quality State Grants 14,088Title III: English Language Acquisition State Grants 8,135Title III: Immigrant 5,507Title IV: Student Support and Academic Enrichment 5,297

Total $97,827

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K-6 BOROUGH OF ENGLEWOOD CLIFFS SCHOOL DISTRICT

SCHEDULE OF FINDINGS AND QUESTIONED COSTSFOR THE FISCAL YEAR ENDED JUNE 30, 2018

Section I - Summary of Auditor’s Results

Financial Statements

Type of auditor’s report issued: unmodified

Internal control over financial reporting:

1. Material weakness(es) identified? yes X no

2. Significant deficiencies identified that arenot considered to be material weaknesses? yes X none reported

Noncompliance material to basic financial statements noted? yes X no

Federal Awards

Not Applicable

State Awards

Dollar threshold used to distinguish between type A and type B programs: $ 750,000

Auditee qualified as low-risk auditee? X yes no

Type of auditor’s report issued on compliance for major programs: unmodified

Internal Control over major programs:

1. Material weakness(es) identified? yes X no

2. Significant deficiencies identified that are not considered to be material weaknesses? yes X none reported

Any audit findings disclosed that are required to be reported in accordance with NJ OMB Circular Letter 15-08as applicable?? yes X no

Identification of major programs:

State Grant/Project Number(s) Name of State Program

495-034-5094-003 (B) Reimbursed TPAF Social Security contributions

495-034-5120-044 (B) Extraordinary Aid

Note: (B) – Tested as Major Type B Program.

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K-7

BOROUGH OF ENGLEWOOD CLIFFS SCHOOL DISTRICTSCHEDULE OF FINANCIAL, FEDERAL AND STATE FINDINGS

FOR THE FISCAL YEAR ENDED JUNE 30, 2018(continued)

Section II - Financial Statement Findings

None

Section III - State Financial Assistance Findings and Questioned Costs

None

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K-8


SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS

FOR THE FISCAL YEAR ENDED JUNE 30, 2018

Status of Prior Year Findings

There were no prior year findings.

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SCHOOL DISTRICT OF THE BOROUGH OF ENGLEWOOD CLIFFS … · Jennifer Brower Sue Anne Mather...

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