BALL-CHATHAM COMMUNITY UNIT SCHOOL … District/IL Ball-Chatham Cusd 5 2017.pdf · INDEPENDENT...

Prepared by:

Mack & Associates, P.C. Certified Public Accountants

116 E. Washington Street, Suite One

Morris, IL 60450 Telephone: (815) 942-3306

CERTIFIED PUBLIC ACCOUNTANTS

BALL-CHATHAM COMMUNITY UNIT SCHOOL

DISTRICT #5

CHATHAM, ILLINOIS

ANNUAL FINANCIAL REPORT

JUNE 30, 2017

BALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5 Table of Contents

PAGE INDEPENDENT AUDITORS' REPORT ................................................................................................ 1-2 FINANCIAL STATEMENTS Statement of Assets, Liabilities, and Fund Balances Arising from Cash Transactions - All Funds and Account Groups (Statement A) ...................................... 3-4 Statement of Revenues Received, Expenditures Disbursed, Other Financing Sources (Uses) and Changes in Fund Balances – All Funds (Statement B) ......................... 5-6 Statement of Revenues Received – All Funds (Statement C) ..................................................... 7-10 Statement of Expenditures Disbursed – Budget and Actual Educational Fund (Statement D) .......................................................................................... 11-18 Operations and Maintenance Fund (Statement E) ..................................................................19 Debt Service Fund (Statement F) ............................................................................................20 Transportation Fund (Statement G) ........................................................................................21 Municipal Retirement / Social Security Fund (Statement H) ....................................................22 Capital Projects Fund (Statement I) ........................................................................................23 Fire Prevention and Safety Fund (Statement J) ......................................................................24 NOTES TO FINANCIAL STATEMENTS ............................................................................................. 25-59 OTHER INFORMATION Illinois Municipal Retirement Fund: Schedule of Changes in Net Pension Liability and Related Ratios (Schedule A-1) ................60 Schedule of Contributions (Schedule A-2) ..............................................................................61 Teachers’ Retirement System of the State of Illinois: Schedule of District’s Share of the Net Pension Liability (Schedule A-3) ................................62 Schedule of Contributions (Schedule A-4) ..............................................................................62 NOTES TO OTHER INFORMATION .....................................................................................................63 SUPPLEMENTARY INFORMATION Trust & Agency Funds: Statement of Changes in Assets and Liabilities (Schedule B) .............................................. 64-67 Assessed Valuations, Tax Rates, Tax Extensions and Tax Collections (Schedule C) .........................................................................68

BALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5 Table of Contents

PAGE OTHER REPORTS Independent Auditors’ Report on Internal Control Over Financial Reporting and On Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards ........................................................... 69-70 SINGLE AUDIT SECTION:

Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance ................................................................... 71-72 Schedule of Expenditures of Federal Awards ......................................................................... 73-74 Notes to the Schedule of Expenditures of Federal Awards ........................................................75 Schedule of Findings and Questioned Costs .............................................................................76 Summary Schedule of Prior Year Audit Findings .................................................................... 77-78


116 E. Washington Street Suite One Morris, Illinois 60450 Phone: (815) 942-3306 Fax: (815) 942-9430 www.mackcpas.com

TAWNYA R. MACK, CPALAURI POPE, CPA

ERICA BLUMBERG, CPATREVOR DEBELAK, CPA

MATT MELVINCHRIS CHRISTENSENSTEPHANIE HEISNER

1

Independent Auditors’ Report

To the Board of Education Ball-Chatham Community Unit School School District #5 Chatham, Illinois

We have audited the accompanying financial statements of Ball-Chatham Community Unit School District #5, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the District’s financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the financial reporting provisions of the Illinois State Board of Education. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud.

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

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

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

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles As described in Note 1, the financial statements are prepared by Ball-Chatham Community Unit School District #5 on the basis of the financial reporting provisions of the Illinois State Board of Education, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to comply with the requirements of the Illinois State Board of Education. The effects on the financial statements of the variances between the regulatory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

2

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the financial statements referred to in the first paragraph do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of Ball-Chatham Community Unit School District #5, as of June 30, 2017, the changes in its financial position for the year then ended.

Unmodified Opinion on Regulatory Basis of Accounting In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the assets, liabilities, and fund balances arising from cash transactions of each fund of Ball-Chatham Community Unit School District #5 as of June 30, 2017, and their respective cash receipts and disbursements, and budgetary results for the year then ended, on the basis of the financial reporting provisions of the Illinois State Board of Education.

Basis of Accounting We draw attention to Note 1 of the financial statements, which describes the basis of accounting. The financial statements are prepared on the modified cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter.

Other Matters Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Ball-Chatham Community Unit School District #5’s financial statements. The other information, including notes to other information, on pages 60-63, and the supplementary information on pages 64-68 are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The schedules identified above have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Comparative Information

Other auditors previously audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of Ball-Chatham Community Unit School District #5 for the year ended June 30, 2016, which are presented in summary for comparison purposes with the accompanying financial statements. In their report dated October 24, 2016, they expressed a qualified opinion on the financial statements due to omitted disclosures required by GASB Statement No. 45.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 26, 2017, on our consideration of Ball-Chatham Community Unit School District #5’s internal control over 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 of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Ball-Chatham Community Unit School District #5’s internal control over financial reporting and compliance.

Mack & Associates, P.C. Certified Public Accountants Morris, Illinois September 26, 2017

Mack & Associates, P.C.

FINANCIAL STATEMENTS

BALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5

Statement of Assets, Liabilities, and Fund Balances Arising from Cash TransactionsAll Funds and Account GroupsAs of June 30, 2017

MunicipalOperations & Retirement/

Educational Maintenance Debt Service Transportation SocialFund Fund Fund Fund Security Fund

Assets

Cash 7,484,584$ 2,467,743 2,693,266 1,569,791 860,950 Other Current Assets - 1,508 - - -

Total Current Assets 7,484,584 2,469,251 2,693,266 1,569,791 860,950

Capital Assets:Land - - - - - Building - - - - - Other Improvements - - - - - Capitalized Equipment - - - - - Construction in Progress - - - - -

Amount Available in DebtService Fund - - - - -

Amount to be provided forPayment of Bonds - - - - -

Total Assets 7,484,584$ 2,469,251 2,693,266 1,569,791 860,950

Liabilities and Fund Balance

Liabilities:Current Liabilities:

Payroll Deductions & Withholdings 16,428$ - - 128 3,130 Due to Student Organizations - - - - -

Total Current Liabilities: 16,428 - - 128 3,130

Long-Term Liabilities:Long-Term Debt Payable - - - - -

Total Long-Term Liabilities: - - - - -

Total Liabilities 16,428 - - 128 3,130

Fund Equity:Unreserved Fund Balance (deficit) 5,689,890 2,469,251 2,693,266 1,569,663 411,572 Reserved Fund Balance 1,778,266 - - - 446,248 Investment in General Fixed Assets - - - - -

Total Fund Balance 7,468,156 2,469,251 2,693,266 1,569,663 857,820

Total Liabilities and Fund Balance 7,484,584$ 2,469,251 2,693,266 1,569,791 860,950

The Notes to Financial Statements are an integral part of this statement.3

Statement A

TotalFire Account Groups (Memorandum

Capital Working Tort Prevention General General Only)Projects Cash Immunity and Safety Agency Fixed Long-Term Year Ended

Fund Fund Fund Fund Fund Assets Debt June 30, 2017

4,617,586 2,141,886 - 973,337 577,631 - - 23,386,774 - - - - - - 1,508

4,617,586 2,141,886 - 973,337 577,631 - - 23,388,282

- - - - - 4,426,429 - 4,426,429 - - - - - 111,041,262 - 111,041,262 - - - - - 8,341,565 - 8,341,565 - - - - - 14,761,906 - 14,761,906 - - - - - 73,683 - 73,683

- - - - - - 2,693,266 2,693,266

- - - - - - 49,391,734 49,391,734

4,617,586 2,141,886 - 973,337 577,631 138,644,845 52,085,000 214,118,127

- - - - - - - 19,686 - - - - 577,631 - - 577,631

- - - - 577,631 - - 597,317

- - - - - - 52,085,000 52,085,000

- - - - - - 52,085,000 52,085,000

- - - - 577,631 - 52,085,000 52,682,317

4,617,586 2,141,886 - 766,337 - - - 20,359,451 - - - 207,000 - - - 2,431,514 - - - - - 138,644,845 - 138,644,845

4,617,586 2,141,886 - 973,337 - 138,644,845 - 161,435,810

4,617,586 2,141,886 - 973,337 577,631 138,644,845 52,085,000 214,118,127



Statement of Revenues Received, Expenditures Disbursed, Other Financing Sources (Uses),and Changes in Fund Balances - All FundsFor the Year Ended June 30, 2017

OperationsEducational & Maintenance Debt Service Transportation

Fund Fund Fund Fund

Receipts:Local Sources 23,546,309$ 3,985,703 4,952,006 1,520,149 State Sources 7,775,075 - - 602,668 Federal Sources 2,241,603 - - 1,849

Total Direct Receipts 33,562,987 3,985,703 4,952,006 2,124,666

Receipts for "On Behalf" Payments 7,366,806 - - -

Total Receipts 40,929,793 3,985,703 4,952,006 2,124,666

Disbursements:Instruction 21,468,999 - - - Support Services 9,847,468 3,502,462 - 1,846,650 Community Services 12,573 - - - Payments to Other Districts & Governmental Units 397,677 - - - Debt Service 2,586 - 4,976,708 -

Total Direct Disbursements 31,729,303 3,502,462 4,976,708 1,846,650

Disbursements for "On Behalf" Payments 7,366,806 - - -

Total Expenditures Disbursed 39,096,109 3,502,462 4,976,708 1,846,650

Excess of Direct Receipts Over (Under) DirectDisbursements 1,833,684 483,241 (24,702) 278,016

Fund Balance, Beginning of Year 5,634,472 1,986,010 2,717,968 1,291,647

Fund Balance, End of Year 7,468,156$ 2,469,251 2,693,266 1,569,663


Statement B

Municipal Fire TotalRetirement/ Capital Working Tort Prevention (Memorandum Only)

Social Projects Cash Immunity and Safety Year EndedSecurity Fund Fund Fund Fund Fund June 30, 2017

1,569,237 23,321 131,188 - 106,897 35,834,810 - - - - - 8,377,743 - - - - - 2,243,452

1,569,237 23,321 131,188 - 106,897 46,456,005

- - - - - 7,366,806

1,569,237 23,321 131,188 - 106,897 53,822,811

421,591 - - - - 21,890,590 1,032,999 523,279 - - 109,422 16,862,280

- - - - - 12,573 - - - - - 397,677 - - - - - 4,979,294

1,454,590 523,279 - - 109,422 44,142,414

- - - - - 7,366,806

1,454,590 523,279 - - 109,422 51,509,220

114,647 (499,958) 131,188 - (2,525) 2,313,591

743,173 5,117,544 2,010,698 - 975,862 20,477,374

857,820 4,617,586 2,141,886 - 973,337 22,790,965



Statement of Revenues ReceivedAll FundsFor the Year Ended June 30, 2017


Fund Fund Fund FundReceipts:

Local Sources:Property Taxes:

Designated Purposes Taxes 20,168,128$ 3,793,979 4,951,855 1,252,576 Leasing Purposes Taxes 143,259 - - - Special Education Taxes 143,259 - - - FICA and Medicare Taxes - - - -

Corporate Personal Property Replacement Taxes - - - 216,751 Summer School Tuition from Pupils or Parents 6,520 - - - Interest on Investments 47,231 114 151 40 Food Services

Sales to Pupils - Lunch 505,947 - - - Sales to Pupils - Breakfast 32,443 - - - Sales to Pupils - A la Carte 1,046,691 - - - Sales to Adults 37,061 - - -

District Activity IncomeAdmissions - Athletic 73,982 - - - Fees 138,443 - - - Other 94,895 - - -

Textbook IncomeRentals 582,814 - - - Other 8,415 - - -

Other Local IncomeRentals - 94,323 - - Contributions and Donations from Private Sources 13,288 4,815 - - Services Provided to Other Districts - - - 14,833 Refund of Prior Year Expenditures 254,923 90,720 - 300 Payments of Surplus Moneys from TIF Districts 165,910 - - - Drivers' Education Fees 54,055 - - - Other Local Income 29,045 1,752 - 35,649

Total Receipts from Local Sources 23,546,309 3,985,703 4,952,006 1,520,149

State Sources:General State Aid 6,140,076 - - 100,000 Special Education

Private Facility Tuition 351,826 - - - Funding for Children Requiring Sp Ed Services 425,339 - - - Personnel 451,752 - - - Orphanage - Individual 202,862 - - -

State Free Lunch & Breakfast 1,835 - - - Driver Education 49,189 - - - Transportation Aid

Regular - - - 270,175 Special Education - - - 208,493

Early Childhood - Block Grant 152,196 - - 24,000

Total Receipts from State Sources 7,775,075 - - 602,668


Statement C

Municipal FireRetirement/ Capital Working Tort Prevention Total


706,756 - 131,184 - 106,892 31,111,370 - - - - - 143,259 - - - - - 143,259

820,470 - - - - 820,470 41,965 - - - - 258,716

- - - - - 6,520 46 23,321 4 - 5 70,912

- - - - - 505,947 - - - - - 32,443 - - - - - 1,046,691 - - - - - 37,061

- - - - - 73,982 - - - - - 138,443 - - - - - 94,895

- - - - - 582,814 - - - - - 8,415

- - - - - 94,323 - - - - - 18,103 - - - - - 14,833 - - - - - 345,943 - - - - - 165,910 - - - - - 54,055 - - - - - 66,446

1,569,237 23,321 131,188 - 106,897 35,834,810

- - - - - 6,240,076

- - - - - 351,826 - - - - - 425,339 - - - - - 451,752 - - - - - 202,862 - - - - - 1,835 - - - - - 49,189

- - - - - 270,175 - - - - - 208,493 - - - - - 176,196

- - - - - 8,377,743



Statement of Revenues Received - All FundsFor the Year Ended June 30, 2017


Fund Fund Fund FundReceipts (Continued):

Federal Sources:National School Lunch Program 314,613 - - - Special Milk Program 1,711 - - - School Breakfast Program 49,085 - - - Title I - Low Income 381,770 - - - Special Education:

Preschool - Flow-Through 30,956 - - - IDEA - Flow-Through 797,781 - - 1,849 IDEA Room & Board 427,780 - - -

Title II - Teacher Quality 21,843 - - - Medicaid Matching Funds:

Administrative Outreach 73,396 - - - Fee for Service 89,134 - - -

Other Federal Revenues - STEP Grant 53,534 - - -

Total Receipts from Federal Sources 2,241,603 - - 1,849

Total Direct Receipts 33,562,987$ 3,985,703 4,952,006 2,124,666


Statement C(Continued)

Municipal FireRetirement/ Capital Working Tort Prevention Total


- - - - - 314,613 - - - - - 1,711 - - - - - 49,085 - - - - - 381,770

- - - - - 30,956 - - - - - 799,630 - - - - - 427,780 - - - - - 21,843

- - - - - 73,396 - - - - - 89,134 - - - - - 53,534

- - - - - 2,243,452

1,569,237 23,321 131,188 - 106,897 46,456,005


Statement DBALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5EDUCATIONAL FUND

Statement of Expenditures DisbursedBudget and ActualFor the Year Ended June 30, 2017

Actual ActualOriginal Final Year Ended (Over) / Under Year EndedBudget Budget June 30, 2017 Budget June 30, 2016

Expenditures Disbursed:

Instruction:

Regular Programs:Salaries 11,602,474$ 11,419,436 11,371,501 47,935 10,942,217 Employee Benefits 2,544,826 2,562,338 2,706,433 (144,095) 2,727,420 Purchased Services 459,343 475,323 456,342 18,981 460,072 Supplies and Materials 587,308 606,926 535,436 71,490 268,002 Capital Outlay - - - - - Other Objects 8,460 8,460 3,718 4,742 5,084 Non-Capitalized Equipment - - 550 (550) 1,600

Total Regular Programs 15,202,411 15,072,483 15,073,980 (1,497) 14,404,395 .

Tuition Payments to Charter Schools:Purchased Services 5,390 5,390 - 5,390 -

Total Tuition Payments toCharter Schools 5,390 5,390 - 5,390 -

Pre-K Programs:Salaries 151,703 198,556 194,892 3,664 148,056 Employee Benefits 52,191 72,034 70,740 1,294 51,629 Purchased Services - 2,618 2,617 1 - Supplies and Materials 10,309 21,817 21,347 470 5,972

Total Pre-K Programs 214,203 295,025 289,596 5,429 205,657

Special Education Programs:Salaries 2,486,548 2,476,548 2,464,335 12,213 2,437,929 Employee Benefits 556,361 705,804 678,090 27,714 696,830 Purchased Services 27,930 31,230 25,144 6,086 23,144 Supplies and Materials 20,080 30,420 15,638 14,782 27,721 Capital Outlay - - - - 752

Total Special Education Programs 3,090,919 3,244,002 3,183,207 60,795 3,186,376

Special Education Programs Pre-K:Salaries 61,214 76,214 50,254 25,960 64,787 Employee Benefits 15,997 16,002 6,869 9,133 15,304 Supplies and Materials 1,234 1,734 1,097 637 7,517

Total Special EducationPrograms Pre-K 78,445 93,950 58,220 35,730 87,608

Adult/Continuing Education Programs:Salaries 37,815 37,815 37,893 (78) 36,903 Employee Benefits 7,800 7,676 7,389 287 7,381 Purchased Services - - 336 (336) -

Total Adult / ContinuingEducation Programs 45,615 45,491 45,618 (127) 44,284


Statement D(Continued)

BALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5EDUCATIONAL FUND



Expenditures Disbursed (continued):

Instruction (continued):

CTE Programs:Salaries 360,754$ 364,956 363,641 1,315 350,246 Employee Benefits 79,982 89,313 77,377 11,936 76,977 Purchased Services 4,100 4,100 2,006 2,094 1,972 Supplies and Materials 22,690 22,690 17,495 5,195 17,428

Total CTE Programs 467,526 481,059 460,519 20,540 446,623

Interscholastic Programs:Salaries 593,345 563,345 532,498 30,847 487,958 Employee Benefits 44,968 82,663 57,203 25,460 5,614 Purchased Services 95,960 95,110 76,050 19,060 83,966 Supplies and Materials 66,000 66,000 55,088 10,912 61,062 Capital Outlay 12,000 12,000 - 12,000 - Other Objects 23,270 23,270 24,693 (1,423) 26,707 Non-Capitalized Equipment 12,000 12,000 10,964 1,036 -

Total Interscholastic Programs 847,543 854,388 756,496 97,892 665,307

Summer School Programs:Salaries 23,371 35,853 37,363 (1,510) 22,818 Employee Benefits 305 305 622 (317) 315

Total Summer School Programs 23,676 36,158 37,985 (1,827) 23,133

Driver's Education Programs:Salaries 158,680 148,680 151,631 (2,951) 154,058 Employee Benefits 40,482 39,909 38,602 1,307 38,752 Purchased Services 2,000 2,000 3,207 (1,207) 1,455 Supplies and Materials 8,600 8,600 50 8,550 181 Other Objects 30 30 - 30 30

Total Driver's Education Programs 209,792 199,219 193,490 5,729 194,476

Special Education ProgramsK-12 Private Tuition:

Other Objects 1,196,750 1,196,750 1,369,888 (173,138) 1,335,243

Total Special Education ProgramsK-12 Private Tuition 1,196,750 1,196,750 1,369,888 (173,138) 1,335,243

Total Instruction 21,382,270 21,523,915 21,468,999 54,916 20,593,102







Support Services:

Attendance and Social Work Services:

Salaries 219,604$ 204,604 208,955 (4,351) 213,208 Employee Benefits 31,318 32,058 30,911 1,147 32,137 Purchased Services 500 900 297 603 123 Supplies and Materials 1,000 3,000 1,838 1,162 955

Total Attendance and Social Work Services 252,422 240,562 242,001 (1,439) 246,423

Guidance Services:Salaries 564,380 564,380 580,202 (15,822) 547,991 Employee Benefits 135,635 133,602 130,689 2,913 130,484 Purchased Services 9,087 9,087 1,116 7,971 972 Supplies and Materials 5,610 5,610 3,623 1,987 3,607

Total Guidance Services 714,712 712,679 715,630 (2,951) 683,054

Health Services:Salaries 231,439 231,439 224,161 7,278 225,409 Employee Benefits 26,228 27,285 25,926 1,359 24,929 Purchased Services 3,415 3,415 928 2,487 2,632 Supplies and Materials 22,720 22,720 17,943 4,777 14,998 Capital Outlay 5,510 5,323 560 4,763 4,852 Other Objects 240 240 - 240 162 Non-Capitalized Equipment 3,500 3,500 1,476 2,024 -

Total Health Services 293,052 293,922 270,994 22,928 272,982

Psychological Services:Salaries 61,872 127,000 125,887 1,113 60,068 Employee Benefits 15,354 30,401 28,820 1,581 14,294 Purchased Services 600 600 885 (285) 28,478 Supplies and Materials 7,200 8,200 2,043 6,157 2,181

Total Psychological Services 85,026 166,201 157,635 8,566 105,021

Speech Pathology and Audiology Services:Salaries 413,986 393,986 408,850 (14,864) 357,408 Employee Benefits 103,456 101,622 109,100 (7,478) 100,527 Purchased Services 7,800 17,800 16,436 1,364 9,041 Supplies and Materials 3,000 4,000 2,388 1,612 2,803 Capital Outlay 1,900 1,560 1,511 49 -

Total Speech Pathology andAudiology Services 530,142 518,968 538,285 (19,317) 469,779







Support Services (continued):

Other Support Services - Pupils:Salaries 342,109$ 360,109 365,840 (5,731) 343,054 Employee Benefits 24,043 39,054 37,999 1,055 45,631 Purchased Services 2,450 2,450 1,759 691 1,863 Supplies and Materials 2,430 2,430 - 2,430 2,127

Total Other Support Services - Pupils 371,032 404,043 405,598 (1,555) 392,675

Improvement of Instruction Services:Salaries 175,071 155,071 153,942 1,129 174,252 Employee Benefits 37,634 44,205 31,949 12,256 38,361 Purchased Services 93,632 164,744 70,130 94,614 65,035 Supplies and Materials 3,500 6,101 2,520 3,581 7,931 Other Objects 3,654 4,249 289 3,960 731

Total Improvement of Instruction Services 313,491 374,370 258,830 115,540 286,310

Educational Media Services:Salaries 233,929 177,929 170,552 7,377 227,114 Employee Benefits 62,277 64,442 43,921 20,521 59,202 Purchased Services 20,550 20,050 5,242 14,808 17,009 Supplies and Materials 26,225 26,225 36,203 (9,978) 23,985

Total Educational Media Services 342,981 288,646 255,918 32,728 327,310

Assessment and Testing:Purchased Services 5,000 5,000 425 4,575 630 Supplies and Materials 1,800 1,800 1,593 207 1,590

Total Assessment and Testing 6,800 6,800 2,018 4,782 2,220

Board of Education Services:Salaries 87,374 92,378 58,923 33,455 4,622 Employee Benefits 4,300 4,300 20,873 (16,573) 4,403 Purchased Services 818,600 818,600 743,561 75,039 778,033 Supplies and Materials 15,000 15,000 13,155 1,845 16,354 Other Objects 14,000 14,000 12,307 1,693 12,592

Total Board of Education Services 939,274 944,278 848,819 95,459 816,004








Executive Administration Services:Salaries 292,780$ 292,780 303,660 (10,880) 251,408 Employee Benefits 60,398 65,161 74,115 (8,954) 33,521 Purchased Services 9,750 9,750 9,547 203 29,487 Supplies and Materials 5,350 5,350 360 4,990 6,638 Other Objects 2,800 2,800 3,815 (1,015) 2,776

Total Executive AdministrationServices 371,078 375,841 391,497 (15,656) 323,830

Special Area Administration Services:Salaries 317,100 237,100 241,908 (4,808) 356,998 Employee Benefits 38,130 58,234 51,412 6,822 38,370 Purchased Services - 2,100 6,570 (4,470) 6,772 Supplies and Materials - - - - 658 Other Objects - - 520 (520) 670

Total Special Area AdministrationServices 355,230 297,434 300,410 (2,976) 403,468

Office of the Principal Services:Salaries 1,705,791 1,449,433 1,457,179 (7,746) 1,691,036 Employee Benefits 208,880 331,775 304,736 27,039 198,667 Purchased Services 28,300 28,300 10,750 17,550 24,024 Supplies 62,819 62,819 35,452 27,367 45,692 Capital Outlay 600 600 - 600 - Other Objects 10,125 10,125 8,828 1,297 7,968 Non-Capitalized Equipment - - - - 2,395

Total Office of the PrincipalServices 2,016,515 1,883,052 1,816,945 66,107 1,969,782

School Administration Services:Salaries 119,400 119,400 122,424 (3,024) 96,685 Employee Benefits 5,470 13,200 13,323 (123) 5,505 Purchased Services 2,350 8,350 8,049 301 - Supplies and Materials 500 500 1,995 (1,495) 27 Other Objects 275 275 199 76 -

Total School AdministrationServices 127,995 141,725 145,990 (4,265) 102,217








Direction of Business Support Services:Salaries 99,450$ 99,450 105,050 (5,600) 86,742 Employee Benefits 3,800 6,700 4,956 1,744 910 Purchased Services 2,100 3,500 4,215 (715) 1,400 Supplies and Materials 500 500 655 (155) - Capital Outlay 500 500 - 500 - Other Objects 1,000 1,000 710 290 325

Total Direction of Business Support Services 107,350 111,650 115,586 (3,936) 89,377

Fiscal Services:Salaries 128,000 128,000 126,292 1,708 77,158 Employee Benefits 23,490 21,852 21,584 268 14,744 Purchased Services 3,000 3,000 68,238 (65,238) - Supplies and Materials - 1,400 1,352 48 -

Total Fiscal Services 154,490 154,252 217,466 (63,214) 91,902

Operation & Maintenance of Plant Services:Salaries 332,112 216,970 216,049 921 205,668 Employee Benefits 4,809 8,137 2,694 5,443 4,551

Total Operation & Maintenanceof Plant Services 336,921 225,107 218,743 6,364 210,219

Pupil Transportation Services:Supplies and Materials - - - - 24,490

Total Pupil Transportation Services - - - - 24,490

Food Services:Salaries 792,464 732,464 748,681 (16,217) 774,400 Employee Benefits 161,678 156,311 139,018 17,293 152,958 Purchased Services 33,150 33,150 16,555 16,595 82,164 Supplies and Materials 972,245 911,245 1,020,576 (109,331) 1,023,207 Other Objects 750 750 529 221 701 Non-Capitalized Equipment 700 700 - 700 -

Total Food Services 1,960,987 1,834,620 1,925,359 (90,739) 2,033,430

Information Services:Salaries 64,454 64,454 67,004 (2,550) 64,686 Employee Benefits 1,370 1,111 996 115 2,262 Purchased Services 1,950 1,950 1,200 750 175 Other Objects 300 300 90 210 275

Total Information Services 68,074 67,815 69,290 (1,475) 67,398








Staff Services:Salaries 37,258$ 41,272 45,819 (4,547) 105,679 Employee Benefits 22,618 28,625 13,577 15,048 25,688 Purchased Services 4,200 4,200 6,910 (2,710) 4,400 Supplies and Materials 500 500 - 500 -

Total Staff Services 64,576 74,597 66,306 8,291 135,767

Data Processing Services:Salaries 290,092 280,092 277,041 3,051 293,935 Employee Benefits 51,020 51,315 45,876 5,439 53,175 Purchased Services 336,200 269,200 245,516 23,684 233,579 Supplies and Materials 172,000 245,000 232,352 12,648 214,332 Capital Outlay - 50,000 76,356 (26,356) - Other Objects 9,730 9,730 - 9,730 10,267 Non-Capitalized Equipment 420,000 367,000 5,760 361,240 42,730

Total Data Processing Services 1,279,042 1,272,337 882,901 389,436 848,018

Other Support Services:Purchased Services 3,100 3,100 1,050 2,050 1,800 Supplies and Materials 2,300 2,300 197 2,103 -

Total Other Support Services 5,400 5,400 1,247 4,153 1,800

Total Support Services 10,696,590 10,394,299 9,847,468 546,831 9,903,476

Community Services:Salaries 9,555 9,555 9,485 70 7,926 Employee Benefits - 1,029 1,161 (132) - Purchased Services 350 350 250 100 234 Supplies and Materials 6,994 3,694 1,677 2,017 3,530

Total Community Services 16,899 14,628 12,573 2,055 11,690

Payments to Other Governmental Units:Payments to Other Governmental Units - In State:

Regular Programs 1,500 1,500 19,981 (18,481) 22,384 Special Education Programs 36,000 41,000 - 41,000 - CTE Programs - 2,800 2,796 4 3,034 Other Payments - - 13,767 (13,767) 400

Tuition Payments:Special Education Programs 54,000 72,000 66,452 5,548 42,932 CTE Programs 252,000 295,000 294,681 319 271,131

Total Payments to OtherGovernmental Units 343,500 412,300 397,677 14,623 339,881







Interest on Short-Term Debt -$ - 2,586 (2,586) 4,087

Provision for Contingencies 2,000 2,000 - 2,000 -

Total Expenditures Disbursed 32,441,259$ 32,347,142 31,729,303 617,839 30,852,236


Statement EBALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5OPERATIONS AND MAINTENANCE FUND




Support Services:

Operation & Maintenance of Plant Services:

Salaries 1,794,580$ 1,634,580 1,678,899 (44,319) 1,658,519 Employee Benefits 324,160 317,713 290,087 27,626 308,865 Purchased Services 463,667 463,667 407,628 56,039 424,340 Supplies and Materials 1,252,122 1,252,122 1,101,927 150,195 1,231,211 Capital Outlay 15,900 15,900 3,050 12,850 22,436 Other Objects 6,217 6,217 5,929 288 5,477 Non-Capitalized Equipment 16,143 16,143 14,942 1,201 1,277

Total Operation & Maintenanceof Plant Services 3,872,789 3,706,342 3,502,462 203,880 3,652,125




Statement FBALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5DEBT SERVICE FUND




Debt Service:Interest on Long-Term Debt 2,128,860$ 2,128,860 2,098,858 30,002 12,918,533 Principal on Long-Term Debt 2,860,000 2,860,000 2,860,000 - 2,482,215 Other - - 17,850 (17,850) 151,888



Statement GBALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5TRANSPORTATION FUND




Support Services:

Pupil Transportation Services:Salaries 1,410,405 1,340,646 1,322,540 18,106 1,371,412 Employee Benefits 152,003 147,605 146,979 626 147,957 Purchased Services 100,550 100,550 76,233 24,317 106,467 Supplies and Materials 316,500 311,350 300,898 10,452 286,016

Total Pupil Transportation Services 1,979,458 1,900,151 1,846,650 53,501 1,911,852




Statement HBALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5MUNICIPAL RETIREMENT / SOCIAL SECURITY FUND




Instruction:

Employee Benefits:Regular Programs 141,942$ 134,840 192,360 (57,520) 195,005 Pre-K Programs 64,996 64,996 3,153 61,843 3,303 Special Education Programs 102,070 189,922 183,810 6,112 188,174 Special Education Pre-K 662 5,474 4,782 692 3,783 Adult/Continuing Education 6,932 6,932 6,758 174 6,733 CTE Programs 5,270 5,270 5,495 (225) 5,579 Interscholastic Programs 25,116 25,116 22,592 2,524 22,596 Summer School Programs 342 342 536 (194) 337 Driver's Education Programs 2,188 2,188 2,105 83 2,124

Total Instruction 349,518 435,080 421,591 13,489 427,634

Support Services:

Employee Benefits:Attendance and Social Work 3,228 3,228 3,023 205 3,134 Guidance Services 13,655 13,655 13,620 35 13,265 Health Services 48,680 44,533 40,135 4,398 41,222 Psychological Services 1,149 2,492 1,794 698 1,107 Speech Pathology & Audiology 6,003 6,003 5,693 310 5,063 Other Support Services - Pupils 54,751 55,216 54,137 1,079 49,850 Improvement of Instruction 2,582 2,582 2,212 370 2,447 Educational Media Services 23,156 21,433 21,998 (565) 22,567 Board of Education Services 10,615 10,615 1,061 9,554 343 Executive Administration 4,318 4,318 15,165 (10,847) 13,870 Special Area Administration 11,100 9,104 8,968 136 11,019 Office of the Principal Services 93,927 72,026 69,927 2,099 80,400

School Administration Services 21,886 21,400 22,237 (837) 17,259 Direction of Business 18,229 18,229 18,513 (284) 2,804 Fiscal Services 23,462 22,736 22,804 (68) 14,063 Operation and Maintenance of

Plant 400,269 324,380 328,264 (3,884) 342,517 Pupil Transportation Services 268,109 203,508 223,825 (20,317) 220,090 Food Services 129,496 112,893 113,673 (780) 112,685 Information Services 12,339 12,339 12,151 188 12,023 Staff Services 17,506 5,619 4,817 802 16,995 Data Processing Services 50,948 47,552 48,982 (1,430) 48,382 Other Support Services 617 - - - -

Total Support Services 1,216,025 1,013,861 1,032,999 (19,138) 1,031,105

Community Services: - 617 - 617 606

Total Expenditures Disbursed 1,565,543$ 1,449,558 1,454,590 (5,032) 1,459,345


Statement IBALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5CAPITAL PROJECTS FUND




Support:

Facilities Acquisition and Construction:Supplies and Materials -$ - - - 4,051 Capital Outlay 4,584,700 810,000 523,279 286,721 4,944,012

Total Facilities Acquisitionand Construction 4,584,700 810,000 523,279 286,721 4,948,063

Total Expenditures Disbursed 4,584,700$ 810,000 523,279 286,721 4,948,063


Statement JBALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5FIRE PREVENTION AND SAFETY FUND




Support:

Operation & Maintenance of Plant Services:

Supplies and Materials -$ - 3,780 (3,780) - Capital Outlay 1,000,000 130,000 105,642 24,358 178,248

Total Support 1,000,000 130,000 109,422 20,578 178,248

Total Expenditures Disbursed 1,000,000$ 130,000 109,422 20,578 178,248


NOTES TO FINANCIAL STATEMENTS


Notes to Financial Statements For the Year Ended June 30, 2017

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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies of the Ball-Chatham Community Unit School District #5 conform to the modified cash basis of accounting as defined by the Illinois State Board of Education Audit Guide and comply with regulatory provisions prescribed by the Illinois State Board of Education. The following is a summary of the significant policies.

A. Reporting Entity

The District’s reporting entity includes the District’s governing board and all related organizations for which the District exercises oversight responsibility. The District has developed criteria to determine whether outside agencies with activities, which benefit the citizens of the District, including joint agreements, which serve pupils from numerous districts, should be included within its financial reporting entity. The criteria include, but are not limited to, oversight responsibility (including financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations, and accountability for fiscal matters), scope of public service, and special financing relationships. There are no component units as defined above that are included in the districts reporting entity, also the District is not included in any other governmental “reporting entity.”

B. Fund Accounting

The accounts of the District are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. The operations of each fund are summarized by providing a separate set of self-balancing accounts which includes its assets, liabilities, fund equity, revenue, and expenditures. The District maintains individual funds required by the State of Illinois. These funds are grouped as required for reports filed with the Illinois State Board of Education. District resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The District uses eight funds and two account groups as follows: Governmental Funds Governmental Funds are those through which most governmental functions of the District are financed. The acquisition, use and balance of the District’s expendable financial resources and the related liabilities (arising from cash transactions) are accounted for through governmental funds. The Educational Fund and the Operations and Maintenance Fund are the general operating funds of the District. They are used to account for all financial resources except those required to be accounted for in another fund. The Special Education levy and Leasing levy are included in the Educational Fund.



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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – (Continued)

B. Fund Accounting – (Continued)

Governmental Funds – (Continued) The Transportation Fund and the Municipal Retirement/Social Security Fund are used to account for the proceeds of specific revenue sources that are legally restricted to cash disbursements for specific purposes. The Capital Projects Fund and Fire Prevention and Safety Fund are used to account for financial resources to be used for the acquisition or construction of major capital facilities. The Working Cash Fund is used to account for financial resources held by the District to be used for temporary interfund loans to other funds. The Debt Service Fund accounts for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Fiduciary Funds Fiduciary Funds are used to account for assets held by the District in a trustee capacity or as an agent for individuals, private organizations, other governments or other funds. The Agency Funds (Activity Funds) include both Student Activity Funds and Convenience Accounts. They account for assets held by the District as an agent for the students and teachers. These funds are custodial in nature and do not involve the measurement of the results of operations. The amounts due to the activity fund organizations are equal to the assets. Account Groups The accounting and reporting treatment applied to the fixed assets and long-term liabilities associated with a fund are determined by its measurement focus. The two account groups described below are not “funds.” They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations.

General Fixed Assets Account Group – This account group is used to account for all capital assets used in governmental operations. General Long-Term Debt Account Group – This account group is established to account for all long-term liabilities expected to be financed from governmental funds.

The accompanying financial statements include Memorandum Only totals columns, which present total assets, liabilities, fund balances, revenues and expenditures for all of the District’s funds and account groups.



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C. Measurement Focus The financial statements of all governmental funds focus on the measurement of spending or “financial flow” and the determination of changes in financial position, rather than upon net income determination. This means that only current assets and current liabilities are generally included on their statement of assets and liabilities. Their reported fund balance (net current assets) is considered a measure of “available spendable resources.” Governmental fund operating statements present increases (cash receipts and other financial sources) and decreases (cash disbursements and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

D. Basis of Accounting Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. The District maintains its accounting records for all funds and account groups on the modified cash basis of accounting under guidelines prescribed by the Illinois State Board of Education. Revenues are recognized when cash is received. Expenditures are recognized when cash is disbursed. Assets of a fund are only recorded when a right to receive cash exists which arises from previous cash transactions. Liabilities of a fund, similarly, result from previous cash transactions. Modified cash basis financial statements omit recognition of receivables and payables and other accrued and deferred items that do not arise from previous cash transactions. Proceeds from sales of bonds are included as other financing sources in the appropriate fund on the date received. Related bond principal payable in the future is recorded at the same time in the General Long-Term Debt Account Group.

E. Budgets and Budgetary Accounting The budget for all governmental funds is prepared on the modified cash basis of accounting, which is the same basis that is used in financial reporting. This allows for comparability between budget and actual amounts. This is an acceptable method in accordance with Chapter 122, Paragraph 17.1 of the Illinois Revised Statutes. The budget was passed on September 26, 2016 and was amended on June 20, 2017. For each fund, total expenditures disbursed may not legally exceed the budgeted amounts. The budget lapses at the end of the fiscal year.



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E. Budgets and Budgetary Accounting – (Continued) The District follows these procedures in establishing the budgetary data reflected in the financial statements:

1. Prior to July 1, the Superintendent submits to the Board of Education a proposed operating budget for the fiscal year commencing on that date. The operating budget includes proposed expenditures and the means of financing them.

2. The proposed budget is placed on file and a public hearing is held to obtain taxpayer comments.

3. Prior to October 1, the budget is legally adopted by the Board of Education through

passage of a resolution. 4. Formal budgetary integration is employed as a management control device at the

functional/objective level during the year. 5. The Board of Education may make transfers between the various items in any fund

not exceeding in the aggregate 10% of the total of such fund as set forth in the budget.

6. The Board of Education may amend the budget (in other ways) by the same

procedures required of its original adoption.

F. Investments Investments are recorded in accordance with GASB Statement No. 72, Fair Value Measurement and Application. Accordingly, the change in fair value of investments is recognized as an increase or decrease to investment assets and investment income. Gains or losses on the sale of investments are recognized upon realization. The District has adopted a formal written investment policy. The institutions in which investments are made must be approved by the Board of Education. The District’s investments consist of demand deposits and investments in an external investment pool, which are exempt from GASB Statement No. 72 fair value measurements.

G. General Fixed Assets Fixed assets have been acquired for general governmental purposes. At the time of purchase, assets are recorded as expenditures disbursed in the Governmental Funds and capitalized at cost in the General Fixed Assets Account Group. Donated general fixed assets are stated at estimated fair market value as of the date of acquisition. The capitalization threshold for all assets is $1,000. Depreciation accounting is not considered applicable (except to determine the per capita tuition charge). Depreciation was calculated on the straight-line basis for the per capita tuition charge and was $1,891,931, including $3,369 of depreciation on non-capitalized equipment, for the year ended June 30, 2017.



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NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – (Continued) G. General Fixed Assets – (Continued)

The estimated useful lives for fixed assets are as follows:

Property Type

Estimated Useful Life

(Years)Depreciable Land 50Buildings:

Permanent 50Temporary 20

Infrastructure other than Buildings 20Capitalized Equipment 3-10

H. Pensions

For purposes of measuring the net pension liability, information about the fiduciary net position of TRS and IMRF and additions to/deductions from the TRS and IMRF fiduciary net position have been determined on the same basis as they are reported by TRS and IMRF.

I. Reclassifications Certain prior year balances may have been reclassified to conform to the current year presentation.

J. Restricted Resources If both restricted and unrestricted resources are to be used for the same purpose, expenditures will first be made from restricted resources.

K. Use of Estimates The preparation of financial statements in conformity with the modified cash basis of accounting requires the District to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues received and expenditures disbursed during the reported period. Actual results could differ from these estimates. The most significant estimate is depreciation used in calculating the per capita tuition charge.



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NOTE 2: CASH AND INVESTMENTS Cash and investments (excluding fiduciary funds) as of June 30, 2017 consist of the following:

Cash on Hand 539$ Deposits with Financial Institutions 18,674,552 Investments in External Investment Pool 4,134,052

Total Cash and Investments 22,809,143$

Investments Authorized by Illinois Compiled Statutes and the District’s Investment Policy The District is allowed to invest in securities as authorized by 30 ILCS 235/2 and 235/6 and 105 ILCS 5/8-7 of the Illinois Compiled Statutes. The District’s investment policy is consistent with Illinois Compiled Statues. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The District’s investment policy does not specifically address interest rate risk; however, one of the ways that the District manages its exposure to interest rate risk is by limiting its purchases of long term investments. At June 30, 2017, the District’s investments were deposits in financial institutions and investments in external investment pools. The activity fund’s and the expendable trust fund’s investments, are all demand deposits. None of the District’s investments are highly sensitive to interest rate fluctuations. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The District’s investment policy requires a rating at the time of purchase at one of the three highest classifications established by at least two standard rating agencies. The District’s deposits with financial institutions are not subject to credit risk rating. The external investment pool has been rated AAAm. Concentration of Credit Risk The investment policy of the District contains no limitation on the amount that can be invested in any one issuer. Deposits with financial institutions and investments in external investment pools are exempt from the 5% investment in any one issuer disclosure.



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NOTE 2: CASH AND INVESTMENTS – (Continued) Custodial Credit Risk Custodial credit risk for deposits is the risk that in the event of a bank failure, the District’s deposits may not be returned or the District will not be able to recover collateral securities in the possession of an outside party. Illinois Compiled Statutes do not contain requirements that would limit the exposure to custodial credit risk for deposits. However, the District’s investment policy requires that all amounts deposited or invested with financial institutions in excess of any insurance limit to be collateralized. As of June 30, 2017, $22,291,602 of the District’s deposits with financial institutions in excess of federal depository insurance limits were collateralized by securities held by the pledging financial institution. Investment in External Investment Pool Illinois School Liquid Asset Fund Plus The District is a voluntary participant in the Illinois School Liquid Asset Fund Plus (ISDLAF+). ISDLAF+ is an Illinois common law trust organized to permit Illinois School Districts, community colleges, and educational services regions to pool their investment funds. The fund is overseen by a Board of Trustees. ISDLAF+ invests in high-quality, short-term debt instruments guaranteed by the full faith and credit of the United States, certain U.S. government agency obligations, commercial paper, bank obligations and other obligations permitted by Illinois law. The investment is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental or private agency. ISDLAF+ Fund is rated AAAm by Standard and Poors. The value of the District’s investment in the pool is reported at cost, which approximates market. Investors are not required to maintain minimum account balances. Foreign Currency Risk Foreign currency risk is the risk that changes in foreign exchange rates will adversely affect the fair values of an investment or deposit. None of the District’s investments are directly subject to foreign currency risk. The District’s investment policy does not address foreign currency risk.



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NOTE 3: PROPERTY TAXES The District’s property taxes are levied each year on all taxable real property located in the District on or before the last Tuesday in December. Taxes are levied in Sangamon County. The most recent levy was passed by the board on December 19, 2016. Property taxes attach as an enforceable lein on property as of January 1 and are payable in two installments in June and September. The District receives significant distributions of tax receipts approximately one month after these due dates. The Property Tax Extension Limitation Law of the State of Illinois, as amended (PTELL), limits the amount of annual increase in property taxes to be extended for certain Illinois non-home rule units of government, including this District. In general, PTELL restricts the amount of a property tax extension increase to the lesser of 5% or the percentage increase in the Consumer Price Index for Urban Consumers during the preceding calendar year. Tax levies may also be increased due to assessed valuation increases from new construction, referendum approval, and consolidation of local governmental units. The effect of the PTELL is to limit the growth of the amount of property taxes that can be extended for a taxing body. The PTELL was effective for Sangamon County on January 1, 1997. Tax proceeds from the 2016, 2015 and prior levies are reported as receipts from local sources in the June 30, 2017 financial statements. The remainder of the 2016 tax levy will be received in the subsequent year. The District receives the following levies that could result in restricted fund balances in the Educational Fund: Special Education - Cash receipts and the related cash disbursements of this restricted tax levy are accounted for in the Educational Fund. A total of $143,259 was collected and all was spent, resulting in no restricted fund balance. Leasing - Cash receipts and the related cash disbursements of this restricted tax levy are accounted for in the Educational Fund. A total of $143,259 was collected and all was spent, resulting in no restricted fund balance.



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NOTE 4: GENERAL FIXED ASSETS

BalanceJuly 1, 2016 Additions Deletions

BalanceJune 30, 2017

Capital Assets not Being Depreciated:Land 4,426,429$ - - 4,426,429 Construction in Progress 5,172,327 73,683 5,172,327 73,683

Total Capital Assets not being Depreciated 9,598,756 73,683 5,172,327 4,500,112

Depreciable Capital Assets:Buildings and Building Improvements 106,047,183 4,994,079 - 111,041,262 Site Improvements and Infrastructure 8,331,565 10,000 - 8,341,565 Capitalized Equipment 14,326,863 435,043 - 14,761,906

Total Depreciable Capital Assets 128,705,611 5,439,122 - 134,144,733

Total Capital Assets 138,304,367 5,512,805 5,172,327 138,644,845

Accumulated Depreciation:

Buildings and Building Improvements 3,535,645 1,045,399 - 4,581,044 Site Improvements and Infrastructure 486,178 164,264 - 650,442 Capitalized Equipment 3,191,275 682,268 - 3,873,543

Total Accumulated Depreciation 7,213,098 1,891,931 - 9,105,029

Capital Assets, Net 131,091,269$ 3,620,874 5,172,327 129,539,816

As explained in Note 1, depreciation is calculated to determine the District’s per capita tuition charge. Significant capital additions during the year ended June 30, 2017, included completion of the Glenview High School addition ($4,994,079) and completion of the camera security system ($283,890), which were reported as construction in progress at June 30, 2016. At June 30, 2017, construction in progress includes construction of a new security office entrance, which is expected to be completed during the year ended June 30, 2018.



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NOTE 5: LONG-TERM OBLIGATIONS The following is a summary of the District’s general long-term obligations for the year ended June 30, 2017:

Principal Principal AmountOutstanding Outstanding Due in6/30/2016 Increases Decreases 6/30/2017 One Year

General Obligation Bonds:Refunding Bonds (2005) 360,000$ - 360,000 - - Fire Prevention and Safety Bonds (2010A) 3,685,000 - 645,000 3,040,000 - Refunding Bonds (2010B) 1,900,000 - 600,000 1,300,000 625,000 Building Bonds (2012) 9,310,000 - - 9,310,000 - Building Bonds (2013) 8,695,000 - - 8,695,000 - Refunding Bonds(2014A) 1,230,000 - - 1,230,000 - Building Bonds (2014B) 6,610,000 - - 6,610,000 - Refunding Bonds (2014C) 2,705,000 - - 2,705,000 635,000 Working Cash Bonds (2015A) 1,700,000 - 10,000 1,690,000 40,000 Building Bonds (2015B) 9,470,000 - - 9,470,000 - Refunding Bonds (2015C) 140,000 - - 140,000 - Refunding Bonds (2016) 9,140,000 - 1,245,000 7,895,000 1,795,000

Total General Long Term Debt 54,945,000$ - 2,860,000 52,085,000 3,095,000

Refunding Bonds (2005) Original issue $21,955,000 dated July 6, 2005, provides for serial retirement of principal on January 1 and interest payable on January 1 and July 1 of each year as stated interest rates ranging from 3.00% to 5.00%. This issue advance refunded $22,595,000 of outstanding 1999 Refunding/Building Bonds. The net proceeds were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for future debt service payments on 1999 Refunding/Building Bonds. As a result, $22,595,000 of the 1999 Refunding/Building Bonds is considered to be defeased and the liability of those bonds has been removed from the general long-term debt account group. The Series 2014A Refunding Bonds advanced refunded $1,100,000 of these bonds. As a result, $1,100,000 of principal is considered to be defeased. The Series 2015C Refunding Bonds advanced refunded $120,000 of these bonds. As a result, $120,000 of principal is considered to be defeased. The Series 2016 Refunding Bonds currently refunded $9,635,000 of these bonds. As a result, $9,635,000 of principal is considered to be defeased. As of June 30, 2017, the bonds have been paid in full.



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NOTE 5: LONG-TERM OBLIGATIONS – (Continued) Fire Prevention and Safety Bonds (2010A) Original issue $9,500,000 dated June 29, 2010, provides for serial retirement of principal on February 1 and interest payable on February 1 and August 1 of each year at stated interest rates ranging from 2.70% to 5.95%. These bonds qualify as Build America Bonds, which entitles the District to apply for certain tax credits (“Build America Payments”) directly from the Secretary of the U.S. Treasury. The amount of each Build America Payment will be reported as revenues of the District and are pledged to the payment of the Bonds. The Series 2014C Refunding Bonds refunded $2,800,000 of these bonds. As a result, $2,800,000 of principal is considered defeased. At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:

Year Ended June 30, Principal Interest Total

2018 -$ 177,385 177,385 2019 - 177,385 177,385 2020 - 177,385 177,385 2021 - 177,385 177,385 2022 760,000 177,385 937,385 2023 790,000 134,065 924,065 2024 820,000 88,245 908,245 2025 670,000 39,865 709,865

Totals 3,040,000$ 1,149,100 4,189,100

Refunding Bonds (2010B) Original issue $4,080,000 dated June 29, 2010, provides for serial retirement of principal on February 1 and interest payable on February 1 and August 1 of each year at stated interest rates ranging from 3.00% to 3.75%. This issue advance refunded $3,949,339 of outstanding 1999 Refunding/Building Bonds to reduce its debt service payments over the next nine years by $265,925 and to obtain an economic gain (difference between the present values of debt service payments on the old and new debt) of $292,385. The net proceeds of $4,089,610 (including reoffering premium and after payment of underwriting fees, insurance, and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for future debt service payments on the 1999 Refunding / Building Bonds. As a result, $3,949,339 of the 1999 Refunding / Building Bonds is considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group.



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NOTE 5: LONG-TERM OBLIGATIONS – (Continued) Refunding Bonds (2010B) – (Continued) At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 625,000$ 47,187 672,187 2019 675,000 25,313 700,313

Totals 1,300,000$ 72,500 1,372,500

Building Bonds (2012) Original issue $9,310,000 dated December 27, 2012, provides for serial retirement of principal on February 1 and interest payable on February 1 and August 1 of each year at stated interest rates ranging from 2.50% to 4.00%. At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 -$ 322,750 322,750 2019 - 322,750 322,750 2020 - 322,750 322,750 2021 - 322,750 322,750 2022 - 322,750 322,750 2023 2,000,000 322,750 2,322,750 2024 2,000,000 242,750 2,242,750 2025 2,000,000 162,750 2,162,750 2026 1,010,000 82,750 1,092,750 2027 1,000,000 57,500 1,057,500 2028 1,300,000 32,500 1,332,500

Totals 9,310,000$ 2,514,750 11,824,750



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NOTE 5: LONG-TERM OBLIGATIONS – (Continued) Building Bonds (2013) Original issue $8,695,000 dated February 5, 2013, provides for serial retirement of principal on February 1 and interest payable on February 1 and August 1 of each year at stated interest rates ranging from 2.50% to 2.625%. At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 -$ 219,437 219,437 2019 - 219,437 219,437 2020 - 219,437 219,437 2021 - 219,437 219,437 2022 - 219,437 219,437 2023 - 219,437 219,437 2024 - 219,437 219,437 2025 700,000 219,437 919,437 2026 2,845,000 201,938 3,046,938 2027 3,500,000 130,813 3,630,813 2028 1,650,000 43,313 1,693,313

Totals 8,695,000$ 2,131,560 10,826,560

Refunding Bonds (2014A) Original issue $1,230,000 dated April 2, 2014, provides for serial retirement of principal on February 1 and interest payable on February 1 and August 1 of each year at a stated interest rate of 2.75%. This issue advance refunded $1,110,000 of outstanding 2005 Refunding Bonds. The net proceeds of $1,196,104 (including reoffering premium and after payment of underwriting fees, insurance, and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for future debt service payments on the 2005 Refunding Bonds. As a result, $1,100,000 of the 2005 Refunding Bonds is considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group. The partial refunding of both the 2005 Refunding Bonds and 2010A Fire Prevention and Safety Bonds resulted in a net present value savings of $128,764 to the District.



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NOTE 5: LONG-TERM OBLIGATIONS – (Continued) Refunding Bonds (2014A) – (Continued) At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 -$ 33,825 33,825 2019 - 33,825 33,825 2020 1,230,000 33,825 1,263,825

Totals 1,230,000$ 101,475 1,331,475

Building Bonds (2014B) Original issue $6,610,000 dated April 2, 2014, provides for serial retirement of principal on February 1 and interest payable February 1 and August 1 of each year at stated interest rates ranging from 4.00% to 4.50%. At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:

Year Ending June 30, Principal Interest Total

2018 -$ 288,944 288,944 2019 - 288,944 288,944 2020 - 288,944 288,944 2021 - 288,944 288,944 2022 - 288,944 288,944 2023 - 288,944 288,944 2024 - 288,944 288,944 2025 370,000 288,944 658,944 2026 1,775,000 274,144 2,049,144 2027 1,470,000 200,925 1,670,925 2028 2,745,000 134,775 2,879,775 2029 250,000 11,250 261,250

Totals 6,610,000$ 2,932,646 9,542,646



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NOTE 5: LONG-TERM OBLIGATIONS – (Continued) Refunding Bonds (2014C) Original issue $2,705,000 dated April 2, 2014, provides for serial retirement of principal on February 1 and interest payable on February 1 and August 1 of each year at stated interest rates ranging from 3.00% to 4.00%. This issue currently refunded $2,800,000 of outstanding 2010A Fire Prevention and Safety Bonds. The net proceeds of $2,887,293 (including reoffering premium and after payment of underwriting fees, insurance, and other issuance costs) were used to pay principal and interest. As a result, $2,800,000 of the 2010A Fire Prevention and Safety Bonds is considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group. The partial refunding of both the 2005 Refunding Bonds and the 2010A Fire Prevention and Safety Bonds resulted in a net present value savings of $128,764 to the District. At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 635,000$ 101,050 736,050 2019 665,000 75,650 740,650 2020 690,000 49,050 739,050 2021 715,000 21,450 736,450

Totals 2,705,000$ 247,200 2,952,200

Working Cash Bonds (2015A) Original issue $1,700,000 dated March 2, 2015, provides for serial retirement of principal on January 1 and interest payable on January 1 and July 1 of each year at stated interest rates ranging from 0.95% to 4.10%.



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NOTE 5: LONG-TERM OBLIGATIONS – (Continued) Working Cash Bonds (2015A) – (Continued) At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 40,000$ 62,480 102,480 2019 35,000 61,950 96,950 2020 40,000 61,290 101,290 2021 45,000 60,415 105,415 2022 20,000 59,670 79,670 2023 20,000 59,140 79,140 2024 20,000 58,550 78,550 2025 200,000 54,840 254,840 2026 - 51,440 51,440 2027 - 51,440 51,440 2028 630,000 38,840 668,840 2029 640,000 13,120 653,120

Totals 1,690,000$ 633,175 2,323,175

Building Bonds (2015B) Original issue $9,470,000 dated March 2, 2015, provides for serial retirement of principal on January 1 and interest payable on January 1 and July 1 each year at stated interest rates ranging from 4.498% to 5.00%. At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 -$ 453,975 453,975 2019 - 453,975 453,975 2020 1,445,000 417,850 1,862,850 2021 3,050,000 305,475 3,355,475 2022 3,385,000 150,375 3,535,375 2023 1,590,000 35,763 1,625,763

Totals 9,470,000$ 1,817,413 11,287,413



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NOTE 5: LONG-TERM OBLIGATIONS – (Continued) Refunding Bonds (2015C) Original issue $140,000 dated March 2, 2015, provides for serial retirement of principal on January 1 and interest payable on January 1 and July 1 each year at stated interest rate of 1.90%. This issue advanced refunded $120,000 of outstanding 2005 Refunding Bonds. The net proceeds of $125,867 (including reoffering premium and after payment and underwriting fees, insurance, and other issuance costs) were used to purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for future debt service payments on the 2005 Refunding Bonds. As a result, $120,000 of the 2005 Refunding Bonds is considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group. The partial refunding of the 2005 Refunding Bonds resulted in a net present value loss of $6,129 to the District. At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 -$ 2,660 2,660 2019 - 2,660 2,660 2020 140,000 1,330 141,330

Totals 140,000$ 6,650 146,650

Refunding Bonds (2016) Original issue $9,140,000 dated January 5, 2016, provides for serial retirement of principal on January 1 and interest payable on January 1 and July 1 of each year at stated interest rates ranging from 3.00% to 4.00%. This issue currently refunded $9,635,000 of outstanding 2005 Refunding Bonds. The net proceeds of $9,653,735 (including reoffering premium and after payment of underwriting fees, insurance, and other issuance costs) were used to pay principal and interest. As a result, $9,635,000 of the 2005 Refunding Bonds is considered to be defeased and the liability for those bonds has been removed from the general long-term debt account group. The partial refunding of the 2005 Refunding Bonds resulted in a net present value savings of $451,976 to the District.



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NOTE 5: LONG-TERM OBLIGATIONS – (Continued) Refunding Bonds (2016) – (Continued) At June 30, 2017, the annual cash flow requirements of bond principal and interest were as follows:


2018 1,795,000$ 269,250 2,064,250 2019 1,980,000 193,750 2,173,750 2020 - 154,150 154,150 2021 - 154,150 154,150 2022 - 154,150 154,150 2023 - 154,150 154,150 2024 1,905,000 116,050 2,021,050 2025 1,150,000 54,950 1,204,950 2026 - 31,950 31,950 2027 - 31,950 31,950 2028 - 31,950 31,950 2029 1,065,000 15,975 1,080,975

Totals 7,895,000$ 1,362,425 9,257,425

At June 30, 2017, there was $2,693,266 of net current assets available in the Debt Services Fund for the retirement of bonded debt. All long-term debt payments are made from the Debt Services Fund. Short-Term Debt The District has an available $4 million line of credit on which it can draw in anticipation of property tax payments at an interest rate of 1.85%. There were no draws on the line of credit during the year ended June 30, 2017.

NOTE 6: LEGAL DEBT MARGIN

The District’s statutory debt limitation as of June 30, 2017 is calculated as follows:

Assessed Valuation - 2016 Tax Year 749,639,300$

Statutory Debt Limintation (13.8%) 103,450,223$

Less: Applicable DebtBonds Payable 52,085,000

Legal Debt Margin 51,365,223$



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NOTE 7: CONTRACTS, COMMITMENTS, AND CONTINGENCIES Teachers’ Contracts Teachers’ contracts for services rendered during the school year for teachers are paid over twelve-month pay schedules and are recorded in the fiscal year when such checks are drawn. At June 30, 2017, the total amount of unpaid teachers’ contracts for services performed during the fiscal year amounted to $1,778,266 and are reported as reserved fund balance in the Educational Fund. Compensated Absences Employees of the District are entitled to paid vacations depending on job classification, length of service, and other factors. The amount of compensation for future absences at June 30, 2017 was $65,698. Lease Commitments The District is a party to an operating lease with U.S. Bank Equipment for copiers. The lease was approved in May 2013 and terms were revised in October 2013. The lease required 57 monthly payments of $29,865, beginning in October 2013. During the year ended June 30, 2017, the District renegotiated the lease agreement for a 36-month term, beginning on July 1, 2017. Monthly payments under the modified lease are $24,780. Lease payments totaled $358,590 for the year ended June 30, 2017. The required annual payments to maturity are as follows:

Fiscal Year Payment

2018 297,357$ 2019 297,357 2020 297,357

892,071$

During the year ended June 30, 2017, the District entered into a bus lease agreement with Midwest Transit for a 5-year term, beginning on July 1, 2017. Annual payments under the lease range from $9,875 to $17,540 annually. The required annual payments to maturity are as follows:

Fiscal Year Payment

2018 9,875$ 2019 9,875 2020 9,875 2021 13,825 2022 13,825 2023 17,540

74,815$



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NOTE 7: CONTRACTS, COMMITMENTS, AND CONTINGENCIES – (Continued) Grant Audits The District has received funding from state and federal grants in the current and prior years which are subject to audits by the granting agencies. Any disallowed claims resulting from such audits could become a liability of the District. In the opinion of the District, any such disallowed claims will not have a material adverse impact on the overall financial position of the District. Litigation Various claims and lawsuits are pending against the District. In the opinion of District management, the potential loss on all claims and lawsuits will not be significant to the District’s financial statements. Farm Lease Agreement The District entered into an agreement to lease farm land to Dowson Brothers, Inc. for five years, beginning on March 1, 2017. Annual rent is payable in semi-annual installments of $13,980, due on March 15 and December 15, for the first two years of the lease. Rent for any 12-month period thereafter will be renegotiated by the parties. The District collected $13,980 in rent payments under this lease during the year ended June 30, 2017. YMCA Lease Agreement The District is party to a lease agreement to lease facilities to the Springfield YMCA for three years, beginning on July 1, 2016. Rent is payable monthly at a rate of $20 per hour per school site used by the YMCA. The District collected $40,420 in rent payments under this lease during the year ended June 30, 2017.



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NOTE 8: RETIREMENT FUND COMMITMENT

A. Teachers Retirement System of the State of Illinois General Information about the Plan Plan Description The District participates in the Teachers’ Retirement System of the State of Illinois (TRS). TRS is a cost-sharing multiple-employer defined benefit pension plan that was created by the Illinois legislature for the benefit of Illinois public school teachers employed outside the City of Chicago. TRS members include all active non-annuitants who are employed by a TRS-covered employer to provide services for which teacher licensure is required. The Illinois Pension Code outlines the benefit provisions of TRS, and amendments to the plan can be made only by legislative action with the Governor’s approval. The TRS Board of Trustees is responsible for the system’s administration. TRS issues a publicly available financial report that can be obtained at http://trsil.org/forms-and-publications; by writing to TRS at 2815 W. Washington, PO Box 19253, Springfield, IL 62794; or by calling (888) 679-3675, option 2. Benefits Provided TRS provides retirement, disability, and death benefits. Tier I members have TRS or reciprocal system service prior to January 1, 2011. Tier I members qualify for retirement benefits at age 62 with five years of service, at age 60 with 10 years, or age 55 with 20 years. The benefit is determined by the average of the four highest years of creditable earnings within the last 10 years of creditable service and the percentage of average salary to which the member is entitled. Most members retire under a formula that provides 2.2 percent of final average salary up to a maximum of 75 percent with 34 years of service. Disability and death benefits are also provided. Tier II members qualify for retirement benefits at age 67 with 10 years of service, or a discounted annuity can be paid at age 62 with 10 years of service. Creditable earnings for retirement purposes are capped and the final average salary is based on the highest consecutive eight years of creditable service rather than the last four. Disability provisions for Tier II are identical to those of Tier I. Death benefits are payable under a formula that is different from Tier I. Essentially all Tier I retirees receive an annual 3 percent increase in the current retirement benefit beginning January 1 following the attainment of age 61 or on January 1 following the member’s first anniversary in retirement, whichever is later. Tier II annual increases will be the lesser of three percent of the original benefit or one-half percent of the rate of inflation beginning January 1 following attainment of age 67 or on January 1 following the member’s first anniversary in retirement, whichever is later.



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NOTE 8: RETIREMENT FUND COMMITMENT – (Continued)

A. Teachers Retirement System of the State of Illinois (Continued) Contributions The State of Illinois maintains the primary responsibility for funding TRS. The Illinois Pension Code, as amended by Public Act 88-0593 and subsequent acts, provides that for years 2010 through 2045, the minimum contribution to the System for each fiscal year shall be an amount determined to be sufficient to bring the total assets of the System up to 90 percent of the total actuarial liabilities of the System by the end of fiscal year 2045. Contributions from active members and TRS contributing employers are also required by the Illinois Pension Code. The contribution rates are specified in the pension code. The active member contribution rate for the year ended June 30, 2016 was 9.4 percent of creditable earnings. On July 1, 2016, the rate dropped to 9.0 percent of pay due to the expiration of the Early Retirement Option (ERO). The member contribution, which may be paid on behalf of employees by the District, is submitted to TRS by the District. On Behalf Contributions to TRS – The State of Illinois makes employer pension contributions on behalf of the District. For the year ended June 30, 2017, State of Illinois contributions recognized by the District were based on the State’s proportionate share of the collective net pension liability associated with the District, and the District recognized revenue and expenditures of $7,158,767 in pension contributions from the State of Illinois. 2.2 Formula Contributions – Employers contribute 0.58 percent of total creditable earnings for the 2.2 formula change. The contribution rate is specified by statute. Contributions for the year ended June 30, 2017 were $107,761. Federal and Special Trust Fund Contributions – When TRS members are paid from federal and special trust funds administered by the District, there is a statutory requirement for the District to pay an employer pension contribution from those funds. Under a policy adopted by the TRS Board of Trustees that has been in effect since the fiscal year ended June 30, 2006, employer contributions for employees paid from federal and special trust funds will be the same as the state contribution rate to TRS. Public Act 98-0674 now requires the two rates to be the same.

For the year ended June 30, 2017, the employer pension contribution was 38.54 percent of salaries paid from federal and special trust funds. For the year ended June 30, 2017, salaries totaling $237,970 were paid from federal and special trust funds that required employer contributions of $91,714.



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A. Teachers Retirement System of the State of Illinois (Continued) Contributions – (Continued) Employer Retirement Cost Contributions – Under GASB Statement No. 68, contributions that an employer is required to pay because of a TRS member retiring are categorized as specific liability payments. The District is required to make a one-time contribution to TRS for members retiring under the Early Retirement Option (ERO). The payments vary depending on the member’s age and salary. The maximum employer ERO contribution under the program that ended on June 30, 2016 is 146.5 percent and applies when the member is age 55 at retirement. For the year ended June 30, 2017, the District paid $0 to TRS for ERO contributions. The District is also required to make a one-time contribution to TRS for members granted salary increases over 6 percent if those salaries are used to calculate a retiree’s final average salary. A one-time contribution is also required for members granted sick leave days in excess of the normal annual allotment if those days are used as TRS service credit. For the year ended June 30, 2017, the District paid $2,842 to TRS for employer contributions due on salary increases in excess of 6 percent and $3,148 for sick leave days granted in the excess of the normal annual allotment. Pension Liabilities At June 30, 2017, the District has an unreported liability for its proportionate share of the net pension liability (first amount shown below) that reflected a reduction for state pension support provided to the District. The State’s support and total are for disclosure purposes only. The amount disclosed by the District as its proportionate share of the net pension liability, the related State support, and the total portion of the net pension liability that was associated with the District were as follows: District's proportionate share of the net pension liability 3,249,607$ State's proportionate share of the net pension liability associated with the District 106,858,396

Total 110,108,003$

The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2015, and rolled forward to June 30, 2016. The District’s proportion of the net pension liability was based on the District’s share of contributions to TRS for the measurement year ended June 30, 2016, relative to the projected contributions of all participating TRS employers and the State during that period. At June 30, 2016, the District’s proportion was 0.0041167590 percent, which was an increase of 103.09 percent from its proportion measured as of June 30, 2015.



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A. Teachers Retirement System of the State of Illinois (Continued) Actuarial Assumptions The total pension liability in the June 30, 2016 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.5 percentSalary increases Varies by amount of service creditInvestment rate of return 7.00 percent, net of pension plan investment expense, including inflation

Mortality rates were based on the RP-2014 White Collar Table with adjustments as appropriate for TRS experience. The rates are used on a fully-generational basis using projection table MP-2014. For the June 30, 2016 valuation, the investment return assumption was lowered from 7.50 percent to 7.0 percent. Salary increase assumptions were lowered from their 2015 levels. Other assumptions were based on the 2015 experience analysis which increased retirement rates, improved mortality assumptions and made other changes. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected 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 rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class that were used by the actuary are summarized in the following table.

Asset ClassTarget

Allocation

Long-Term Expected Real Rate of Return

U.S. equities large cap 14.4% 6.94%U.S. equities small/mid cap 3.6% 8.09%International equities developed 14.4% 7.46%Emerging market equities 3.6% 10.15%U.S. bonds core 10.7% 2.44%International debt developed 5.3% 1.70%Real Estate 15.0% 5.44%Commodities (real return) 11.0% 4.28%Hedge funds (absolute return) 8.0% 4.16%Private Equity 14.0% 10.63%

Total 100%



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A. Teachers Retirement System of the State of Illinois (Continued) Discount Rate At June 30, 2016, the discount rate used to measure the total pension liability was a blended rate of 6.83 percent, which was a change from the June 30, 2015 rate of 7.47 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions, employer contributions, and state contributions will be made at the current statutorily-required rates. Based on those assumptions, TRS’s fiduciary net position at June 30, 2016 was not projected to be available to make all projected future benefit payments of current active and inactive members and all benefit recipients. Tier I’s liability is partially funded by Tier II members, as the Tier II member contribution is higher than the cost of Tier II benefits. Due to this subsidy, contributions from future members in excess of the service costs are also included in the determination of the discount rate. Despite the subsidy, all projected future payments were not covered, so a slightly lower long-term expected rate of return on TRS investments was applied to all periods of projected benefit payments to determine the total pension liability. At June 30, 2015, the discount rate used to measure the total pension liability was 7.47 percent. The discount rate was the same as the actuarially-assumed rate of return on investments that year because TRS’s fiduciary net position and the subsidy provided by Tier II were sufficient to cover all projected benefit payments. Sensitivity of the District’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the District’s proportionate share of the net pension liability calculated using the discount rate of 6.83 percent, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (5.83 percent) or 1-percentage point higher (7.83 percent) than the current rate.

1% DecreaseCurrent Discount

Rate 1% Increase(5.83%) (6.83%) (7.83%)

District's proportionate share of the net pension liability 3,974,401$ 3,249,607 2,657,642

TRS’s Fiduciary Net Position Detailed information about the TRS’s fiduciary net position as of June 30, 2016 is available in the separately issued TRS Comprehensive Annual Financial Report.



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B. THIS Fund Contributions The District participates in the Teacher Health Insurance Security (THIS) Fund, a cost-sharing, multiple-employer defined benefit post-employment healthcare plan that was established by the Illinois legislature for the benefit of retired Illinois public school teachers employed outside the City of Chicago. The THIS Fund provides medical, prescription, and behavioral health benefits, but does not provide vision, dental, or life insurance benefits to annuitants of the Teachers’ Retirement System (TRS). Annuitants not enrolled in Medicare may participate in the state-administered participating provider option plan or choose from several managed care options. Annuitants who are enrolled in Medicare Parts A and B may be eligible to enroll in a Medicare Advantage plan. The State Employees Group Insurance Act of 1971 (5 ILCS 375) outlines the benefits provisions of the THIS Fund and amendments to the plan can be made only by legislative action with the Governor’s approval. The plan is administered by the Illinois Department of Central Management Services (CMS) with the cooperation of TRS. Section 6.6 of the State Employees Group Insurance Act of 1971 requires all active contributors to TRS who are not employees of the state make a contribution to the THIS Fund. The percentage required of employer required contributions in the future will not exceed 105 percent of the percentage of salary actually required to be paid in the previous fiscal year. • On behalf contributions THIS Fund – The State of Illinois makes employer retiree

health insurance contributions on behalf of the District. State contributions are intended to match contributions to the THIS Fund from active members which were 1.12 percent of pay during the year ended June 30, 2017. State of Illinois contributions were $208,039, and the District recognized revenue and expenditures of this amount during the year.

• Employer contributions to THIS Fund – The District also makes contributions to the THIS Fund. The District THIS Fund contribution was 0.84 percent during the year ended June 30, 2017. For the year ended June 30, 2017, the District paid $156,029 to the THIS Fund, which was 100 percent of the required contribution.

Further information THIS Fund - The publicly available financial report of the THIS Fund may found on the website of the Illinois Auditor General: http://www.auditor.illinois.gov/Audit-Reports/ABC-List.asp. The current reports are listed under “Central Management Services.” Prior reports are available under “Healthcare and Family Services.”



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C. Illinois Municipal Retirement Defined Benefit Pension Plan IMRF Plan Description The District’s defined benefit pension plan for regular employees provides retirement and disability benefits, post-retirement increases, and death benefits to plan members and beneficiaries. The District’s plan is managed by the Illinois Municipal Retirement Fund (IMRF), the administrator of a multi-District public pension fund. A summary of IMRF’s pension benefits is provided in the “Benefits Provided” section of this document. Details of all benefits are available from IMRF. Benefit provisions are established by statute and may only be changed by the General Assembly of the State of Illinois. IMRF issues a publicly available Comprehensive Annual Financial Report that includes financial statements, detailed information about the pension plan’s fiduciary net position, and required supplementary information. The report is available for download at www.imrf.org. Benefits Provided

IMRF has three benefit plans. The vast majority of IMRF members participate in the Regular Plan (RP). The Sheriff’s Law Enforcement Personnel (SLEP) plan is for sheriffs, deputy sheriffs, and selected police chiefs. Counties could adopt the Elected County Official (ECO) plan for officials elected prior to August 8, 2011 (the ECO plan was closed to new participants after that date). All of the District’s participating employees participate in the Regular Plan.

All three IMRF benefit plans have two tiers. Employees hired before January 1, 2011, are eligible for Tier 1 benefits. Tier 1 employees are vested for pension benefits when they have at least eight years of qualifying service credit. Tier 1 employees who retire at age 55 (at reduced benefits) or after age 60 (at full benefits) with eight years of service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit, plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any consecutive 48 months within the last 10 years of service, divided by 48. Under Tier 1, the pension is increased by 3% of the original amount on January 1 every year after retirement.

Employees hired on or after January 1, 2011, are eligible for Tier 2 benefits. For Tier 2 employees, pension benefits vest after ten years of service. Participating employees who retire at age 62 (at reduced benefits) or after age 67 (at full benefits) with ten years of service are entitled to an annual retirement benefit, payable monthly for life, in an amount equal to 1-2/3% of the final rate of earnings for the first 15 years of service credit, plus 2% for each year of service credit after 15 years to a maximum of 75% of their final rate of earnings. Final rate of earnings is the highest total earnings during any 96 consecutive months within the last 10 years of service, divided by 96. Under Tier 2, the pension is increased on January 1 every year after retirement, upon reaching age 67, by the lesser of: 3% of the original pension amount, or 1/2 of the increase in the Consumer Price Index of the or iginal pension

amount.



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C. Illinois Municipal Retirement Defined Benefit Pension Plan (Continued) Employees Covered by Benefit Terms As of December 31, 2016, the following employees were covered by the benefit terms:

Retirees and beneficiaries currently receiving benefits 163Inactive plan members entitled to but not yet receiving benefits 150Active plan members 231

Total 544

Contributions As set by statute, the District’s Regular Plan Members are required to contribute 4.5% of their annual covered salary. The statute requires Districts to contribute the amount necessary, in addition to member contributions, to finance the retirement coverage of its own employees. The District’s annual contribution rate for calendar year 2016 and fiscal year ended June 30, 2017 are summarized below. The District also contributes for disability benefits, death benefits, and supplemental retirement benefits, all of which are pooled at the IMRF level. Contribution rates for disability and death benefits are set by IMRF’s Board of Trustees, while the supplemental retirement benefits rate is set by statute.

Plan member required contribution rate 4.50%District required contribution rate for 2016 10.68%District required contribution rate for 2017 10.39%District actual contributions for 2016 688,574$ District actual contributions for fiscal year 2017 688,688$

Net Pension Liability The District’s net pension liability was measured as of December 31, 2016. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. At December 31, 2016, the District had a net pension liability for the plan, determined as follows:

Total pension liability 28,162,876$ Plan fiduciary net position 24,577,931

Net pension liability 3,584,945$



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C. Illinois Municipal Retirement Defined Benefit Pension Plan (Continued) Actuarial Assumptions The following are the methods and assumptions used to determine total pension liability at December 31, 2016: • The Actuarial Cost Method used was Entry Age Normal. • The Asset Valuation Method used was Market Value of Assets. • The Inflation Rate was assumed to be 2.75%. • Salary Increases were expected to be 3.75% to 14.50%, including inflation. • The Investment Rate of Return was assumed to be 7.50%. • Projected Retirement Age wa s f r o m t h e Experience-based Table of Rates,

specific to the type of eligibility condition, last updated for the 2014 valuation according to an experience study from years 2011 to 2013.

• The IMRF-specific rates for Mortality (for non-disabled retirees) were developed from the RP-2014 Blue Collar Health Annuitant Mortality Table with adjustments to match current IMRF experience.

• For Disabled Retirees, an IMRF-specific mortality table was used with fully generational projection scale MP-2014 (base year 2012). The IMRF-specific rates were developed from the RP-2014 Disabled Retirees Mortality Table, applying the same adjustments that were applied for non-disabled lives.

• For Active Members, an IMRF-specific mortality table was used with fully generational projection scale MP-2014 (base year 2012). The IMRF-specific rates were developed from the RP-2014 Employee Mortality Table with adjustments to match current IMRF experience.

• The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected 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 rate of return by weighting the expected future real rates of return to the target asset allocation percentage and adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table:

Asset Class

Portfolio Target

Percentage

Long-Term Expected

Real Rate of Return

Domestic Equity 38% 7.77%International Equity 17% 3.54%Fixed Income 27% 4.85%Real Estate 8% 8.97%Alternative Investments 9% N/ACash Equivalents 1% N/A

Total 100%



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C. Illinois Municipal Retirement Defined Benefit Pension Plan (Continued) Single Discount Rate A Single Discount Rate of 7.50% was used to measure the total pension liability. The projection of cash flow used to determine this Single Discount Rate assumed that the plan members’ contributions will be made at the current contribution rate, and that District contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. The Single Discount Rate reflects:

1. The long-term expected rate of return on pension plan investments (during the period in which the fiduciary net position is projected to be sufficient to pay benefits), and

2. The tax-exempt municipal bond rate based on an index of 20-year general obligation bonds with an average AA credit rating (which is published by the Federal Reserve) as of the measurement date (to the extent that the contributions for use with the long-term expected rate of return are not met).

For the purpose of the most recent valuation, the expected rate of return on plan investments is 7.50%, the municipal bond rate is 3.78%, and the resulting single discount rate is 7.50%. Changes in the Net Pension Liability A schedule of changes in the net pension liability and related ratios can be found on Schedule A-1 of the Other Information section of this report. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the plan’s net pension liability, calculated using a Single Discount Rate of 7.50%, as well as what the plan’s net pension liability would be if it were calculated using a Single Discount Rate that is 1% lower or 1% higher:

1% Decrease

Current Single Discount Rate Assumption 1% Increase

Total Pension Liability 31,655,417$ 28,162,876 25,278,831 Plan Fiduciary Net Position 24,577,931 24,577,931 24,577,931

Net Pension Liability (Asset) 7,077,486$ 3,584,945 700,900



55


D. Social Security Employees not qualifying for coverage under the Teachers’ Retirement System of the State of Illinois or the Illinois Municipal Retirement Fund are considered “non-participating employees.” These employees and those qualifying for coverage under the Illinois Municipal Retirement Fund are covered under Social Security. The District paid $778,915, the total required employee contribution, during the year ended June 30, 2017.

NOTE 9: RISK MANAGEMENT- CLAIMS AND JUDGMENTS

The District is exposed to various risks of loss including, but not limited to, general liability, property casualty, auto liability, workers’ compensation and public official liability. To limit exposure to these risks the District purchased commercial insurance. There has not been a significant reduction in the District’s insurance coverage during the year ended June 30, 2017. Also, there have been no settlement amounts which have exceeded insurance coverage in the past three years.

NOTE 10: REQUIRED INDIVIDUAL FUND DISCLOSURES Excess of Expenditures over Appropriations At June 30, 2017, expenditures of the Municipal Retirement / Social Security Fund exceeded appropriations by $5,032.

Interfund Receivables and Payables

During the year ended June 30, 2017, the Educational Fund borrowed $2,000,000 from the Working Cash Fund to cover expenditures until property tax distributions were received. This inter-fund loan was repaid in full as of June 30, 2017.

NOTE 11: FUND BALANCE PRESENTATION

According to Government Accounting Standards, fund balances are to be classified into five major classifications: Non-spendable, Restricted, Committed, Assigned, and Unassigned. The Regulatory Model, followed by the District, only reports Reserved and Unreserved Fund Balances. Following are definitions of the differences and a reconciliation of how these balances are reported. The first five columns of the table represent Fund Balance Reporting according to generally accepted accounting principles. The last two columns represent Fund Balance Reporting under the regulatory basis of accounting utilized in preparation of the financial statements.



56

NOTE 11: FUND BALANCE PRESENTATION – (Continued)

FundNon-

spendable Restricted Committed Assigned Unassigned Reserved Unreserved

Educational -$ - 1,778,266 - 5,689,890 1,778,266 5,689,890 Operations & Maintenance - - - - 2,469,251 - 2,469,251 Debt Service - 2,693,266 - - - - 2,693,266 Transportation - - - 1,569,663 - - 1,569,663 IMRF / Social Security - 857,820 - - - 446,248 411,572 Capital Projects - 4,617,586 - - - - 4,617,586 Working Cash - - - - 2,141,886 - 2,141,886 Fire Prevention & Safety - 973,337 - - - 207,000 766,337 Total All Funds -$ 9,142,009 1,778,266 1,569,663 10,301,027 2,431,514 20,359,451

Generally Accepted Accounting Principles Regulatory Basis

A. Non-spendable Fund Balance

The non-spendable fund balance classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example inventories and prepaid amounts. Due to the cash basis nature of the District, all such items are expensed at the time of purchase, so there is nothing to report for this classification.

B. Restricted Fund Balance The restricted fund balance classification refers to amounts that are subject to outside restrictions, not controlled by the entity. Things such as restrictions imposed by creditors, grantors, contributors, or laws and regulations of other governments, or imposed by law through constitutional provisions or enabling legislation. The Debt Service Fund and Special Revenue Funds are by definition restricted for those specified purposes. The District has several revenue sources received within different funds that also fall into these categories: 1. Special Education

Cash receipts and the related cash disbursements of this restricted tax levy are accounted for in the Educational Fund. Expenditures disbursed exceeded revenue received for this purpose, resulting in no restricted fund balance.

2. Leasing Levy Cash disbursed and the related cash receipts of this restricted levy are accounted for in the Educational Fund. Cumulative expenditures disbursed exceeded cumulative revenues received for this purpose, resulting in no restricted balance.



57


B. Restricted Fund Balance (Continued)

3. State Grants Proceeds from state grants and the related expenditures have been included in the Educational, Operations & Maintenance, and Transportation Funds. At June 30, 2017, expenditures disbursed exceeded revenue received from state grants, resulting in no restricted balances.

4. Federal Grants Proceeds from federal grants and the related expenditures have been included in the Educational Fund. At June 30, 2017, expenditures disbursed exceeded revenue received from federal grants, resulting in no restricted balances.

5. Social Security & IMRF Cash disbursed and the related cash receipts of these restricted tax levies are accounted for in the Municipal Retirement / Social Security Fund. At June 30, 2017, cumulative revenues received for this purpose exceeded cumulative expenditures disbursed from the Social Security levy by $446,248, resulting in a restricted fund balance of this amount, which is reported as reserved in the Social Security & IMRF Fund. Cumulative revenues received for municipal retirement purposes exceeded cumulative expenditures disbursed from the IMRF levy by $411,572, resulting in a restricted fund balance of this amount. Prior to June 30, 2011 the District did not track tax amounts reserved for Municipal Retirement and Social Security separately; however, the entire balance of the Municipal Retirement/Social Security Fund ($857,820) is classified as restricted as the fund is a special revenue fund an is by definition restricted.

6. Bond & Interest Levy Cash disbursed and the related cash receipts of this restricted tax levy is accounted for in the Debt Service Fund. At June 30, 2017, cumulative revenues received for this purpose exceeded cumulative expenditures disbursed, resulting in a restricted fund balance of $2,693,266.

7. Capital Projects Cash disbursed and the related cash receipts of certain bond issuances and other restricted revenue sources are accounted for in the Capital Projects Fund. At June 30, 2017, cumulative revenues received for this purpose exceeded cumulative expenditures disbursed, resulting in a restricted fund balance of $4,617,586.



58


B. Restricted Fund Balance (Continued)

8. Fire Prevention and Safety Fund Cash disbursed and the related cash receipts of certain bond issuances and restricted property tax levies are accounted for in the Fire Prevention and Life Safety Fund. At June 30, 2017, cumulative bond proceeds received for this purpose exceeded cumulative expenditures disbursed, resulting in a restricted fund balance of $207,000, which is reported as reserved fund balance. Cumulative receipts from the restricted property tax levy exceeded cumulative expenditures disbursed for this purpose, resulting in a restricted balance of $766,337.

C. Committed Fund Balance The committed fund balance classification refers to amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision making authority (the Board of Education). Those committed amounts cannot be used for any other purpose unless the government removes or changes the specified use by taking the same type of formal action it employed to previously commit those amounts. The Board of Education commits fund balances by making motions or passing resolutions to adopt policy or to approve contracts. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the funds have been specifically committed for use in satisfying those contractual requirements. Employee contracts for services rendered during the school year for employees electing twelve-month pay schedules are recorded as disbursements in the fiscal year when such checks are drawn. At June 30, 2017, the total amount of unpaid contracts for services performed during the fiscal year ended June 30, 2017 amounted to $1,778,266. This amount is shown as reserved in the Educational Fund.

D. Assigned Fund Balance

The assigned fund balance classification refers to amounts that are constrained by the government’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent may be expressed by (a) the Board of Education itself or (b) the finance committee or by the Superintendent when the District Board has delegated the authority to assign amounts to be used for specific purposes. At the direction of the Board of Education, unexpended funds in the Transportation Fund are to be held for the purpose of paying transportation expenditures. Under the assigned fund balance definition, $1,569,663 of the Transportation Fund Balance is assigned fund balance. This is included in the financial statements as unreserved fund balance in the Transportation Fund.



59


E. Unassigned Fund Balance The unassigned fund balance classification is the residual classification for amounts in the General Funds for amounts that have not been restricted, committed, or assigned to specific purposes within the General Funds. Unassigned Fund Balance amounts are shown in the financial statements as Unreserved Fund Balances in the Educational, Operations & Maintenance, and Working Cash funds.

F. Regulatory – Fund Balance Definitions Reserved Fund Balances are those balances that are reserved for a specified purpose, other than the regular purpose of any given fund. Unreserved Fund Balances are all balances that are not reserved for a specific purpose other than the specified purpose of a fund.

G. Expenditures of Fund Balance Unless specifically identified, expenditures act to reduce restricted balances first, then committed balances, next assigned balances, and finally act to reduce unassigned balances. Expenditures for a specifically identified purpose will act to reduce the specific classification not the fund balance identified.

NOTE 12: SUBSEQUENT EVENTS

Management evaluated subsequent events through September 26, 2017, the date which financial statements were available to be issued. No amounts were required to be recorded or disclosed in the financial statements as of June 30, 2017.

OTHER INFORMATION

Schedule A-1

Calendar Year EndingDecember 31, 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007

Total Pension LiabilityService Cost $ 732,188 687,978 776,782 - - - - - - - Interest on the Total Pension Liability 1,972,773 1,852,642 1,717,131 - - - - - - - Benefit Changes - - - - - - - - - - Difference between Expected and

Actual Experience 106,643 179,173 (587,112) - - - - - - - Assumption Changes (64,866) 31,499 1,010,909 - - - - - - - Benefit Payments and Refunds (1,183,474) (1,085,135) (981,875) - - - - - - -

Net Change in Total Pension Liability 1,563,264 1,666,157 1,935,835 - - - - - - - Total Pension Liability - Beginning 26,599,612 24,933,455 22,997,620 - - - - - - -

Total Pension Liability - Ending 28,162,876$ 26,599,612 24,933,455 - - - - - - -

Plan Fiduciary Net PositionContributions - Employer $ 688,574 697,535 734,377 - - - - - - - Contributions - Employee 290,100 285,561 280,233 - - - - - - - Net Pension Plan Investment Income 1,577,541 114,929 1,325,567 - - - - - - - Benefit Payments and Refunds (1,183,474) (1,085,135) (981,875) - - - - - - - Other 200,321 (44,853) (35,716) - - - - - - -

Net Change in Plan Fiduciary Net Position 1,573,062 (31,963) 1,322,586 - - - - - - - Plan Fiduciary Net Position - Beginning 23,004,869 23,036,832 21,714,246 - - - - - - -

Plan Fiduciary Net Position - Ending 24,577,931$ 23,004,869 23,036,832 - - - - - - -

Net Pension Liability (Asset) 3,584,945$ 3,594,743 1,896,623 - - - - - - -

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 87.27% 86.49% 92.39% N/A N/A N/A N/A N/A N/A N/A

Covered Valuation Payroll 6,443,270$ 6,337,920 6,048,158 N/A N/A N/A N/A N/A N/A N/A

Net Pension Liability as a Percentage of the Covered Valuation Payroll 55.64% 56.72% 31.36% N/A N/A N/A N/A N/A N/A N/A


Illinois Municipal Retirement FundSchedule of Changes in Net Pension Liability and Related Ratios

60

Schedule A-2

Calendar Year Ending

Actuarially Determined Contribution

Actual Contribution

Contribution Deficiency (Excess)

Covered Valuation

Payroll

Actual Contribution as a

% of Covered Valuation Payroll

12/31/2016 $ 688,141 688,574 (433) 6,443,270 10.69%12/31/2015 696,537 697,535 (998) 6,337,920 11.01%12/31/2014 731,827 734,377 (2,550) 6,048,158 12.14%

Notes to Schedule:

Valuation Date:

Notes

Methods and Assumptions used to Determine 2016 Contribution Rate:

Actuarial Cost Method Aggregate Entry Age Normal

Amortization Method Level Percentage of Payroll, Closed

Remaining Amortization Period

Asset Valuation Method

Wage Growth 3.50%

Price Inflation

Salary Increases

Investment Rate of Return 7.50%

Retirement Age

Mortality

Other Information:

Notes There were no benefit changes during the year.


2.75% - approximate; No explicit price inflation assumption is used in this valuation.

3.75% to 14.50% including inflation

Experience-based table of rates that are specific to the type of eligibility condition. Lastupdated for the 2014 valuation pursuant to an experience study of the period 2011-2013.

Non-Taxing bodies: 10-year rolling period.Taxing bodies (Regular, SLEP, and ECO groups): 27-year closed period until remainingperiod reaches 15 years (then 15-year rolling period).Early Retirement Incentive Plan liabilities: a period up to 10 year selected by the Employerupon adoption of ERI.

Actuarially determined contribution rates are calculated as of December 31 each year, whichis 12 months prior to the beginning of the fiscal year in which contributions are reported.

SLEP supplemental liabilities attributable to Public Act 94-712 were financed over 22 yearsfor most employers (two employers were financed over 31 years).

5-Year smoothed market; 20% corridor

For non-disabled retirees, an IMRF specific mortality table was used with fully generationalprojection scale MP-2014 (base year 2012). The IMRF specific rates were developed fromthe RP-2014 Blue Collar Health Annuitant Mortality Table with adjustments to match currentIMRF experience. For disabled retirees, an IMRF specific mortality table was used with fullygenerational projection scale MP-2014 (base year 2012). The IMRF specific rates weredeveloped from the RP-2014 Disabled Retirees Mortality Table applying the sameadjustments that were applied for non-disabled lives. For active members, an IMRF specificmortality table was used with fully generational projection scale MP-2014 (base year 2012).The IMRF specific rates were developed from the RP-2014 Employee Mortality Table withadjustments to match current IMRF experience.

Illinois Municipal Retirement FundSchedule of Contributions

61


Other InformationTeachers' Retirement System of the State of Illinois

Schedule A-3Schedule of District's Share of the Net Pension Liability

Fiscal Year2016* 2015* 2014*

District's Proportion of the Net Pension Liability 0.0041% 0.0020% 0.0091%

District's Proportionate Share of the Net Pension Liability $ 3,249,607 1,327,939 5,542,599 State's Proportionate Share of the Net Pension Liability

Associated with the District 106,858,396 7,911,170 241,650,427

Total $ 110,108,003 9,239,109 247,193,026

District's Covered-Employee Payroll 18,035,195$ 18,606,092 18,288,709

District's Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 18.02% 7.14% 30.31%

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 36.40% 41.50% 43.00%

* The amounts presented were determined as of the prior fiscal year.

Schedule A-4Schedule of Contributions

Fiscal Year2017 2016 2015

Statutorily-Required Contribution 199,448$ 190,185 191,451 Contributions in Relation to the Statutorily-Required Contribution 199,448 190,185 191,451

Contribution Deficiency (Excess) $ - - -

District's Covered-Employee Payroll 18,574,900$ 18,035,195 18,606,092

Contributions as a Percentage of Covered-Employee Payroll 1.07% 1.05% 1.03%

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NOTES TO OTHER INFORMATION


Notes to Other Information For the Year Ended June 30, 2017

63

NOTE 1: CHANGES IN ASSUMPTIONS

Teachers’ Retirement System of the State of Illinois For the 2016 measurement year, the assumed investment rate of return was 7.0 percent, including an inflation rate of 2.5 percent and a real return of 4.5 percent. Salary increases were assumed to vary by service credit. For the 2015 measurement year, the assumed rate of return was 7.5 percent, including an inflation rate of 3.0 percent and a real return of 4.5 percent. Salary increases were assumed to vary by service credit. Various other changes in assumptions were adopted based on the experience analysis for the three-year period ending June 30, 2014. For the 2014 measurement year, the assumed investment rate of return was also 7.5 percent, including an inflation rate of 3.0 percent. However, salary increases were assumed to vary by age.

SUPPLEMENTARY INFORMATION

Schedule B

Student Activity Funds

June 30, 2016 Additions Deductions June 30, 2017

Assets

Cash & Investments 512,208$ 798,123 732,700 577,631 Total Assets 512,208$ 798,123 732,700 577,631

Liabilities

Ball Elementary:General Activity 16,899$ 13,439 14,268 16,070 Reimbursement 29 - - 29 Library 1,216 1,886 518 2,584 Pepsi / Coke Vending 2,602 1,287 3,315 574 Social / Flower Fund - 851 678 173 Pizza Fundraiser 24,314 12,305 3,436 33,183 Yearbook 1,623 5,013 638 5,998 Field Trips 1,783 2,757 2,942 1,598 Calculators 1,498 - - 1,498 Holiday Funds 3 - - 3 PBIS 521 1,000 - 1,521

Total Ball Elementary 50,488 38,538 25,795 63,231

Chatham Elementary:General Activity 1,883 22,319 20,036 4,166 Reimbursement 1,027 - - 1,027 Library 2,651 1,961 457 4,155 Pepsi / Coke Vending 866 649 1,324 191 PTO Grants 3,296 9,000 6,443 5,853 Nurse Account 5 - - 5 Donations 29,606 7,558 1,351 35,813 Social / Flower Fund 478 147 154 471 Pizza Fundraiser 716 82,570 82,786 500 Yearbook 754 644 140 1,258 Field Trips 1,049 2,965 3,006 1,008 Staff Social 469 76 - 545 Feva Fund 47 - - 47 PBIS 170 - - 170 Girls on the Run 11 - - 11

Total Chatham Elementary 43,028 127,889 115,697 55,220

Glenwood Elementary:General Activity 51,221 26,770 25,148 52,843 Reimbursement - 2,417 1,667 750 Library 930 378 132 1,176 Pepsi / Coke Vending 569 2,274 1,945 898 PTO Levied Lib 5,823 1,600 - 7,423 Nurse Account 91 - - 91 Donations 157 272 - 429 Yearbook - 345 - 345 Field Trips 1,000 3,811 3,857 954 Staff Social 26 1,065 1,040 51 Girls on the Run 113 - 89 24

Total Glenwood Elementary 59,930 38,932 33,878 64,984

AGENCY FUNDS

Statement of Changes in Assets and LiabilitiesFor the Year Ended June 30, 2017


64

Schedule B(Continued)



AGENCY FUNDS



Glenwood Intermediate School:General Activity 10,769$ 5,213 4,106 11,876 Library 2,790 17,925 17,846 2,869 PTO Grants 20,393 67,803 77,008 11,188 Nurse Account 505 - - 505 Yearbook 1,833 257 720 1,370 Art Club 821 485 329 977 P.E. 2,356 2,319 2,570 2,105 Sunshine Account 821 1,457 999 1,279 Student Council 1,952 10,371 9,634 2,689 Chorus 902 1,692 1,161 1,433 Band 273 70 116 227 Textbook Fines 286 17 - 303 Drama Club 1,514 920 920 1,514 Book Club 1,339 6,541 6,420 1,460

Total Glenwood Intermediate School 46,554 115,070 121,829 39,795

Glenwood Middle School:General Activity 482 2,208 426 2,264 Library 1,538 12,343 12,690 1,191 Pepsi / Coke Vending 1,028 1,008 845 1,191 Donations 1,403 1,861 1,151 2,113 Yearbook 8,351 1,298 120 9,529 Student Council 1,009 939 1,233 715 Chorus 1,078 - 752 326 Band 4,482 12,406 11,403 5,485 Paper & Pencil 186 - - 186 Beta 1,112 1,765 1,766 1,111 Flower Fund 146 - - 146 Tournament 8,900 11,797 11,762 8,935 Science Club 202 - - 202 TSA Club 8,762 2,000 101 10,661 PTO Grant 12,231 1,533 11,344 2,420 S.T.O.P. 655 - - 655 Interest 2,931 186 400 2,717 CD Interest 3,314 - - 3,314 Speech Club 43 - - 43 Textbook Fines 1,673 - - 1,673 Athletic Officials - 6,689 1,740 4,949 6th Grade Team 250 - - 250 Drama Club 3,581 1,960 1,957 3,584 6th South Service 703 - - 703 FCCLA Club 1,456 - - 1,456 Math Department 3,263 - 69 3,194 Student Vending 969 - 110 859 FAB Tech Club - 3,428 3,412 16 PBIS 782 - 184 598 Investment 15,797 - - 15,797 Triathalon 956 4,832 4,656 1,132 Girls on the Run 164 3,606 64 3,706

Total Glenwood Middle School 87,447 69,859 66,185 91,121

65




AGENCY FUNDS



Glenwood High School:Response to Intervention 139$ - - 139 General Activity 13,279 8,571 9,221 12,629 Library 76 228 283 21 Pepsi/Coke Vending 2,952 13,530 14,339 2,143 Yearbook 7,796 19,530 8,377 18,949 FEVA Fund 2,546 498 473 2,571 P.E. 2,456 765 - 3,221 Sunshine Account 525 84 75 534 Student Council 27,227 22,946 29,722 20,451 Chorus 53 - - 53 Band 1,405 3,058 1,810 2,653 Science Club 3,470 - 23 3,447 TSA Club 1,059 5,915 4,965 2,009 Speech Club 75 1,051 992 134 Glenwood Pride 168 - - 168 Graduation Fee 2,531 3,993 6,214 310 Key Club 2,250 8,996 8,892 2,354 NHS 278 230 44 464 FCA 16 - - 16 Good Times Unlimited 380 - - 380 Special Education 4,914 5,049 7,194 2,769 Ping Pong Club 200 - - 200 Musical 11,251 7,295 15,156 3,390 Scholastic Bowl 4,163 900 155 4,908 Candy Fund 1,683 - - 1,683 Cross Culture 930 2,797 2,747 980 Class of 2011 1,451 - - 1,451 Advance Placement 12,185 33,779 32,933 13,031 Book Fines 1,193 491 1,283 401 Production Class 181 - - 181 Newspaper 91 - - 91 Speech Regional 861 1,489 1,545 805 Fall Play 3,627 - 1,786 1,841 Snowball 7,980 202 4,916 3,266 Adult Pepsi 1,955 2,861 3,569 1,247 Parking Fines 1,019 225 - 1,244 Class of 2016 1,291 - 170 1,121 Military Fund 174 - - 174 Class of 2014 2,548 17,795 9,153 11,190 Mock Trial 1,509 - - 1,509 Titan Fuel 575 2,198 1,213 1,560 Computer Science Club - 86 - 86 Math Team 604 150 197 557 Class of 2020 - 8,197 2,878 5,319 Class of 2017 6,076 - 5,594 482 Class of 2019 - 2,025 820 1,205 Athletic Account 3,756 53,776 55,065 2,467 Cheerleaders 2,133 11,910 12,062 1,981 Pom Pons 501 8,925 3,363 6,063

66




AGENCY FUNDS



Glenwood High School (Continued):Girls Swimming 1,747 1,116 137 2,726 Pole Vault Camp 1,209 1,074 655 1,628 Cross Country 471 3,234 2,130 1,575 Boys Soccer 399 4,868 3,552 1,715 Girls Soccer 555 4,825 3,802 1,578 Volleyball Reg 2,870 2,500 2,067 3,303 Wrestling Regional 1,850 2,275 1,130 2,995 Coed Track Invite 2,502 3,013 2,961 2,554 Wrestling Invite 1,377 3,171 3,667 881 Boys Soccer Invite 386 3,780 3,547 619 Boys Basketball Camp 2,913 20,304 20,125 3,092 Girls Basketball Camp 5,995 5,670 5,173 6,492 Football Camp 11,196 38,345 26,786 22,755 Volleyball Camp 5,000 9,093 2,657 11,436 Wrestling Camp 110 1,108 - 1,218 Boys Tennis Camp 242 4,994 1,210 4,026 Girls Basketball Reg 399 - - 399 Boys / Girls Soccer Camp 1,406 9,658 8,699 2,365 Baseball Camp 2,274 2,377 2,856 1,795 Boys Swimming 350 1,273 67 1,556 Girls Track Sectional 290 - - 290 Girls Golf Camp 787 1,197 1,285 699 Tennis Sectional - 70 - 70 Baseball Regional - 2,045 1,598 447 Girls Soccer Invite 1,269 1,336 992 1,613 Softball Regional 1,295 4,455 3,376 2,374 Girls Track Camp 917 3,525 2,744 1,698 Glenwood BKB 60 3,275 2,010 1,325 Boys Tennis Invite 686 420 76 1,030 Softball Camp 675 1,997 202 2,470 Girls Tennis Invite 1,261 420 1,332 349 Hall of Fame 2,951 725 2,769 907 CS8 Winter Classic 13,562 - 1,614 11,948 Capital Area Classic 3,047 4,477 3,039 4,485 Wrestling Freshman Invite 2,348 1,800 808 3,340 Athletic Program 6,951 5,550 6,948 5,553 Boys Basketball Regional 1,993 - - 1,993 Bass Fishing 864 3,067 1,369 2,562 Archery 26 - - 26

Total Glenwood High School 223,765 406,582 368,612 261,735

District Office 490 631 592 529

Transportation Office 506 622 112 1,016

Total Liabilities 512,208$ 798,123 732,700 577,631

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Schedule CBALL-CHATHAM COMMUNITY UNIT SCHOOL DISTRICT #5

Assessed Valuations, Tax Rates, Tax Extensionsand Tax Collections

Tax YearMaximum 2014 2015 2016

Assessed Valuations 693,663,720$ 716,782,065 749,639,300

Tax Rates:Educational 4.0000 2.8726 2.8076 2.7307Special Education 0.8000 0.0148 0.0196 0.0197Operations & Maintenance 0.7500 0.5429 0.5303 0.5118Bond & Interest Unlimited 0.6993 0.6858 0.6736Transportation Unlimited 0.1474 0.1583 0.1838IMRF Unlimited 0.1000 0.0977 0.0963Social Security Unlimited 0.1159 0.1133 0.1119Working Cash 0.0500 0.0001 0.0215 0.0149Lease 0.1000 0.0148 0.0196 0.0197Fire Prevention / Safety 0.1000 0.0001 0.0015 0.0263

Totals 4.5079 4.4552 4.3887

Tax Extensions:Educational 19,926,184$ 20,124,373 20,470,400 Special Education 102,662 140,489 147,679 Operations & Maintenance 3,765,900 3,801,095 3,836,654 Bond & Interest 4,850,791 4,915,693 5,049,571 Transportation 1,022,460 1,134,666 1,377,837 IMRF 693,664 700,296 721,903 Social Security 803,956 812,114 838,846 Working Cash 694 154,108 111,696 Lease 102,662 140,489 147,679 Fire Prevention / Safety 694 10,752 197,155

Totals 31,269,667$ 31,934,075 32,899,420

Tax Collections 31,219,845$ 31,868,611 16,981,865

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OTHER REPORTS






69

Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial

Statements Performed In Accordance with Government Auditing Standards

To the Board of Education Ball-Chatham Community Unit School District #5 Chatham, Illinois

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Ball-Chatham Community Unit School District #5 as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise Ball-Chatham Community Unit School District #5’s basic financial statements, and have issued our report thereon dated September 26, 2017.

Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered Ball-Chatham Community Unit School District #5’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Ball-Chatham Community Unit School District #5’s internal control. Accordingly, we do not express an opinion on the effectiveness of Ball-Chatham Community Unit School District #5’s internal control.

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

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

We noted certain matters that we reported to management of Ball-Chatham Community Unit School District #5, in a separate letter dated September 26, 2017.

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Compliance and Other Matters As part of obtaining reasonable assurance about whether Ball-Chatham Community Unit School District #5’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purposes. Mack & Associates, P.C. Certified Public Accountants Morris, Illinois September 26, 2017


SINGLE AUDIT SECTION

INDEPENDENT AUDITORS' REPORT






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Independent Auditors’ Report on Compliance for Each Major Program and On Internal

Control over Compliance Required by the Uniform Guidance

To the Board of Education Ball-Chatham Community Unit School District #5 Chatham, Illinois Report on Compliance for Each Major Federal Program We have audited Ball-Chatham Community Unit School District #5’s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Ball-Chatham Community Unit School District #5’s major federal programs for the year ended June 30, 2017. Ball-Chatham Community Unit School District #5’s major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with the requirements, laws, regulations, contracts, and grants applicable to its federal programs. Auditors’ Responsibility Our responsibility is to express an opinion on compliance for each of Ball-Chatham Community Unit School District #5’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Ball-Chatham Community Unit School District #5’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Ball-Chatham Community Unit School District #5’s compliance.

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Opinion on Each Major Federal Program In our opinion, Ball-Chatham Community Unit School District #5 complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2017. Report on Internal Control Over Compliance Management of Ball-Chatham Community Unit School District #5 is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Ball-Chatham Community Unit School District #5’s internal control over compliance with the types requirements that could have a direct and material effect on a major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Ball-Chatham Community Unit School District #5’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Mack & Associates, P.C. Certified Public Accountants Morris, Illinois September 26, 2017



Schedule of Expenditures of Federal AwardsFor the Year Ended June 30, 2017

Federal Grantor/Pass-Through Grantor/Program or Cluster TitleCFDA

Number Project #Federal

Expenditures

U.S. Department of Education

Passed Through Illinois State Board of Education

Title I - Low IncomeTitle I - 2016 84.010A 2016-4300 24,898$ Title I - 2017 84.010A 2017-4300 327,303

Total Title I - Low Income 352,201

Title II - Teacher QualityTitle II - 2016 84.367A 2016-4932 747 Title II - 2017 84.367A 2017-4932 37,260

Total Title I - Low Income 38,007

Special Education (IDEA) Cluster (M)IDEA - Special Education Grants

IDEA Flow-Through - 2016 84.027A 2016-4620 9,126 IDEA Flow Through - 2017 84.027A 2017-4620 794,168 IDEA Room & Board - 2016 84.027A 2016-4625 112,574 IDEA Room & Board - 2017 84.027A 2017-4625 246,149

Total IDEA Special Education Grants 1,162,017

Special Education Preschool GrantsIDEA - Preschool Flow-Through - 2017 84.173A 2017-4600 34,006

Total Special Education Preschool Grants 34,006

Total Special Education (IDEA) Cluster 1,196,023

Total Passed Through Illinois State Board of Education 1,586,231

Passed Through Illinois Department of Human Services

STEP - VR Grants 84.126 2017-4999 53,534

Total U.S. Department of Education 1,639,765

U.S. Department of Agriculture

Child Nutrition Cluster

Passed Through Department of Defense

Commodity Credit 10.555 2017-4250 55,762

Passed Through Illinois State Board of Education

National School Lunch Program:Commodity Credit 10.555 2017-4250 50,467 National School Lunch Program - 2016 10.555 2016-4210 47,112 National School Lunch Program - 2017 10.555 2017-4210 267,501

Total National School Lunch Program 365,080

Special Milk ProgramSpecial Milk Program - 2016 10.556 2016-4215 293 Special Milk Program - 2017 10.556 2017-4215 1,418

Total Special Milk Program 1,711

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Schedule of Expenditures of Federal AwardsFor the Year Ended June 30, 2017

Federal Grantor/Pass-Through Grantor/Program or Cluster TitleCFDA

Number Project #Federal

Expenditures

U.S. Department of Agriculture (Continued)

Child Nutrition Cluster (Continued)

Passed Through Illinois State Board of Education (Continued)

National School Breakfast ProgramNational School Breakfast Program - 2016 10.553 2016-4220 8,343 National School Breakfast Program - 2017 10.553 2017-4220 40,742

Total School Breakfast Program 49,085

Total Passed Through Illinois State Board of Education 415,876

Total Child Nutrition Cluster 471,638

Total U.S. Department of Agriculture 471,638

U.S. Department of Health and Human Services

Passed Through Illinois Department of Healthcare & Family Services

Medical Assistance Program 93.778 2017-4991 58,076

Total Passed Through Illinois Department of Healthcare & Family Services 58,076

Total United States Department of Health & Human Services 58,076

Total Expenditures of Federal Awards 2,169,479$

(M) - Tested as a major program

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Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017

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NOTE A: BASIS OF PRESENTATION AND ACCOUNTING

Basis of Presentation

The Schedule of Expenditures of Federal Awards includes the federal grant activity of the Ball-Chatham Community Unit School District #5, and is presented on the modified cash basis of accounting. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit requirements of Federal Awards. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the Basic Financial Statements. Basis of Accounting

Under the modified cash basis of accounting, revenues are recognized and recorded in the accounts when cash is received. In the same manner, expenditures are recognized and recorded upon the disbursement of cash.

NOTE B: INDIRECT FACILITIES & ADMINISTRATION COSTS

Ball-Chatham Community Unit School District #5 did not elect to use the 10% de minimis cost rate.

NOTE C: SUB RECIPIENTS

Ball-Chatham Community Unit School District #5, Illinois did not provide federal awards to sub recipients.

NOTE D: NON-CASH AWARDS

The amount of commodities reported on the schedule ($106,229) is the value of commodities distributed by the Lanter Delivery System during the current year and priced as prescribed by the U.S. Department of Agriculture (CFDA 10.555).

NOTE E: OTHER DISCLOSURES

Amount of federal insurance, loans, and loan guarantees in effect during the year - None.

Federal Grants requiring matching expenditures - Yes.


Schedule of Findings and Questioned Costs For the Year Ended June 30, 2017

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A. SUMMARY OF AUDITORS’ RESULTS

1. The Auditors’ Report expresses an unmodified opinion on the financial statements of Ball-Chatham Community Unit School District #5.

2. No significant deficiencies and no material weaknesses relating to the audit of the financial

statements are reported in the Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.

3. No instances of noncompliance material to the financial statements of Ball-Chatham Community

Unit School District #5 were disclosed during the audit.

4. No significant deficiencies or material weaknesses relating to the audit of the major federal award programs are reported in the Independent Auditors’ Report on Compliance for Each Major Program and On Internal Control over Compliance Required by the Uniform Guidance.

5. The Auditors’ Report on Compliance for the major federal award programs for Ball-Chatham

Community Unit School District #5 expresses an unmodified opinion on all major federal programs.

6. Audit findings relative to the major federal award programs for the Ball-Chatham Community Unit School District #5 are reported in Part C of this schedule.

7. The programs tested as major programs include the Special Education Cluster - CFDA #s 84.027A

and 84.173A.

8. Total federal expenditures for the year ended June 30, 2017 were $2,169,479, and 55.13% of that total was tested as amajor program.

9. The threshold for distinguishing Types A and B programs was $750,000.

10. Ball-Chatham Community Unit School District #5 was not determined to be a low-risk auditee.

B. FINDINGS - FINANCIAL STATEMENTS AUDIT

None. C. FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS AUDIT None.


Summary Schedule of Prior Year Audit Findings For the Year Ended June 30, 2017

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2016-01: Errors and Misclassifications

Condition:

Misclassifications and errors existed in the District’s fiscal year 2016 unadjusted general ledger.

Current Status:

No significant misclassifications or errors existed in the unadjusted general ledger for the year ended June 30, 2017. This finding has been removed.

2016-02: Build America Bond Interest Credit

Condition:

The amount requested on Form 8038-CP for the Build America Bond (BAB) Interest Credit for August 2015 and February 2016 was overstated.

Current Status:

The error was corrected and the District repaid the excess credit received. This finding has been removed.

2016-03: Unauthorized Interfund Loans

Condition:

The Educational Fund overdrew its share of cash from commingled checking and investment accounts, resulting in an unauthorized interfund loan.

Current Status:

The District made an authorized interfund loan between the Educational and Working Cash Funds during the year ended June 30, 2017, so no fund overdrew its share of cash from the commingled checking and investment accounts. This finding has been removed.

2016-04: Expenditures in Excess of Budget

Condition:

Expenditures exceeded budgeted amounts in the Debt Service, Transportation, and Fire Prevention & Safety Funds for the year ended June 30, 2016.

Current Status:

The District filed an amended budget for the year ended June 30, 2017, which resulted in no funds having expenditures in excess of budgeted amounts, other than the Social Security and IMRF Fund, which exceeded expenditures by an insignificant amount. This finding has been removed.


Summary Schedule of Prior Year Audit Findings For the Year Ended June 30, 2017

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2016-05: IDEA Excess Cost Worksheet

Condition:

The Illinois State Board of Education (ISBE) provides school districts an “IDEA Excess Cost Worksheet” for use in computing average per pupil expenditures and determining the minimum the District must expend per pupil with disabilities. The District’s IDEA Excess Cost Worksheet submitted to ISBE for the year ended June 30, 2016 included errors in expenditure totals and attendance totals.

Current Status:

The IDEA Excess Cost Worksheet submitted to ISBE for June 30, 2017 was properly completed. This finding has been removed.

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