SAN DIEGO UNIFIED SCHOOL DISTRICT

Unaudited Actuals Financial ReportFiscal Year 2012/13

Board of Education Presentation September 3, 2013

OverviewPurpose: Brief the Board on the Unaudited Actuals for Fiscal Year 2012/13

Intention: Highlight Notable Changes and Comparative Data

Bottom Line:◦ 2012/13 General Fund Total Beginning Balance was $98.4 Mil◦ General Fund Total Ending Balance is $74.7 Mil◦ General Fund – Unrestricted (GFU) Unaudited Actuals Ending Balance is $57.6 Mil◦ Restricted General Fund Ending Balance is $17.0 Mil◦ $34.0 Mil of Ending Balance is Designated for Specific Purposes ◦ The Original 2013/14 GFU Adopted Budget Beginning Balance was $60.3 Mil

Recommendation: The Board Approve the 2012/13 Unaudited Actuals and Submit to the San Diego County Office of Education by

September 15 as Required by the CA Education Code2

Total General Fund2012/13 Unaudited Actuals

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2012/13 2012/13Line Description Estimated Actuals Unaudited Actuals Difference % Change

-A- -B- -C- -D- -E-1 Beginning Balance 90,532,108$ 90,532,108$ -$ 0.00%2 Restatements 627,493 7,908,851 7,281,358 1160.39%3 Total Beginning Balance 91,159,601 98,440,959 7,281,358 7.99%4 Revenues 1,044,527,198 1,028,753,036 (15,774,162) -1.51%5 Expenditures (1,077,495,757) (1,076,702,341) 793,416 -0.07%6 Other Sources / Uses 24,754,314 24,174,065 (580,249) -2.34%

7 Ending Balance 82,945,356$ 74,665,719$ (8,279,637)$ -9.98%

8 Required Reserves9 Economic Uncertainties 21,719,000$ 21,717,000$ (2,000)$ -0.01%

10 Restricted Grant Carryover *** 36,940,623 17,016,827 (19,923,796) -53.93%11 Unexpended Balances/Set Aside 6,193,349 9,856,866 3,663,517 59.15%12 Stores 1,674,228 1,910,849 236,621 14.13%13 Prepaid Expenses 850,000 502,980 (347,020) -40.83%14 Revolving Cash 57,800 54,000 (3,800) -6.57%

15 Total Required Reserve 67,435,000 51,058,522 (16,376,478) -24.28%

16 Reserve (Shortfall) / Surplus 15,510,356$ 23,607,197$ 8,096,841$ 52.20%

*** $18 Mil Reduction Due to Common Core Revenue Deferred Until Received in 2013/14 Per County Office of Education Guidance

2012/13 ExpendituresGeneral Fund

($’s in Millions)

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$1,085.8 Mil(Excludes Reserves)

Certifi-cated

Salaries,

$515.3,

46.4%

Classified Salaries, $181.5, 16.4%

Employee Benefits, $275.5, 24.8%

Materials & Supplies, $32.4 , 2.9%

Contracted Services, $71.3 , 6.4%

Capital Outlay,

$1.9 , 0.2%Transfers Out & Other Outgo,

$7.9 , 0.7%

General Fund-Unrestricted2012/13 Unaudited Actuals

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2012/13 2012/13Line Description Estimated Actuals Unaudited Actuals Difference % Change

-A- -B- -C- -D- -E-1 Beginning Balance 68,769,450$ 68,769,450$ -$ 0.00%2 Restatements 955,242 8,195,046 7,239,804 100.00%3 Total Beginning Balance 69,724,692 76,964,496 7,239,804 10.38%4 Revenues 753,259,990 761,076,159 7,816,169 1.04%5 Expenditures (645,261,650) (658,082,439) (12,820,789) 1.99%6 Other Sources / Uses (131,718,299) (122,339,498) 9,378,801 -7.12%

7 Ending Balance 46,004,733$ 57,618,718$ 11,613,985$ 25.25%

8 Required Reserves9 Economic Uncertainties 21,719,000$ 21,717,000$ (2,000)$ -0.01%

10 Restricted Grant Carryover - - 11 Unexpended Balances/Set Aside 6,193,349 9,856,866 3,663,517 59.15%12 Stores 1,674,228 1,910,849 236,621 14.13%13 Prepaid Expenses 850,000 472,817 (377,183) -44.37%14 Revolving Cash 57,800 54,000 (3,800) -6.57%

15 Total Required Reserve 30,494,377 34,011,532 3,517,155 11.53%

16 Reserve (Shortfall) / Surplus 15,510,356$ 23,607,186$ 8,096,830$ 52.20%

General Fund-Restricted2012/13 Unaudited Actuals

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2012/13 2012/13Line Description Estimated Actuals Unaudited Actuals Difference % Change

-A- -B- -C- -D- -E-1 Beginning Balance 21,762,658$ 21,762,658$ -$ 0.00%2 Restatements (327,749) (286,195) 41,554 -12.68%3 Total Beginning Balance 21,434,909 21,476,463 41,554 0.19%4 Revenues 291,267,208 267,676,877 (23,590,331) -8.10%5 Expenditures (432,234,107) (418,619,902) 13,614,205 -3.15%6 Other Sources / Uses 156,472,613 146,513,563 (9,959,050) -6.36%

7 Ending Balance 36,940,623$ 17,047,001$ (19,893,622)$ -53.85%

8 Required Reserves9 Economic Uncertainties -$

10 Restricted Grant Carryover - 11 Unexpended Balances/Set Aside - 12 Restricted Grant Carryover - 13 Stores 11 11 14 Prepaid Expenses 30,163 30,163 15 Revolving Cash -

16 Total Required Reserve - 30,174 30,174

17 Reserve (Shortfall) / Surplus 36,940,623$ 17,016,827$ (19,923,796)$ -53.93%

2012/13 General Fund -Unrestricted Significant Revenue Variances

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• ($1.5) Mil Decrease in Revenue Limit Income Due to the Increase in Transfers to Charter Schools in Lieu of Property Taxes

• $7.6 Mil Increase in Federal Impact Aid Received for 2010, 2011, and 2012 Claims for Section 8002 (Land)

• $1.0 Mil Additional State Revenues Received for Lottery and Mandate Block Grant • $0.7 Mil Other Local Revenue from Contributions Received by Schools and Leases &

Rentals

2012/13 2012/13Revenue Estimated Actuals Unaudited Actuals Variance

Revenue Limit Sources $557,633,210 $556,149,069 ($1,484,141)Federal Revenues $10,718,761 $18,334,660 $7,615,899Other State Revenues $161,983,074 $162,984,162 $1,001,088Other Local Revenues $22,924,945 $23,608,268 $683,323Total $7,816,169

2012/13 General Fund- Unrestricted Expenditure and Ending Balance Variances

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2012/13 2012/13Expenditures Estimated Actuals Unaudited Actuals Variance

Certificated Salaries $351,978,393 $357,619,988 $5,641,595Classified Salaries $84,193,520 $84,243,267 $49,747Employee Benefits $162,830,493 $169,456,627 $6,626,134Materials and Supplies $11,129,564 $11,856,605 $727,041Contracted Services $41,479,157 $41,267,666 ($211,491)Indirect Cost ($6,992,726) ($6,899,422) $93,304Contributions $156,472,613 $146,513,563 ($9,959,050)

Required ReservesEconomic Uncertainties $21,719,000 $21,717,000 ($2,000)Set Asides $6,193,349 $9,856,866 $3,663,517Stores $1,674,228 $1,910,838 $236,610

Prepaid Expenses $850,000 $472,817 ($377,183)

Revolving Cash $57,800 $54,000 ($3,800)

Total $6,484,424

• $5.2 Mil Increase in Certificated Salaries Due to the Accrual of the 2012/13 Retroactive Salary Payment Per Agreement with SDEA

• $7.3 Mil Increase in Employee Benefits Due to the Reclassification of the Medical and Dental Liability Account Reconciliation Adjustment to the Beginning Balance Restatement Account

• $10.0 Mil Decrease in Contributions Due to Program Savings in Special Education - Vacancy Savings, Transportation, Contracted Services and Tuition for Non-Public Schools

• $3.7 Mil Increase in Required Reserves for Set Asides Due to Increase in Schools’ Carryover Balances and Other Pending Liabilities

2012/13 Ending BalancesAll Funds*

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*For Individual Fund Detail, Please Review SACS Report

Fund Fund DescriptionBeginning

Balance Revenue ExpensesTransfers In/

(Transfers Out) Ending Balance

01 General Fund 98,440,958$ 1,028,753,035$ (1,076,702,338)$ 24,174,065$ 74,665,720$

11 Adult Education Fund 290,843 732,929 (680,628) - 343,144

12 Child Development Fund 15,406 21,288,833 (22,733,768) 1,444,935 15,406

13 Cafeteria Special Revenue Fund 967,387 59,527,933 (57,879,661) - 2,615,659

14 Deferred Maintenance Fund 180,871 656 (1,290) - 180,237

15 Pupil Transportation Equipment Fund 81,059 60,221 - (81,060) 60,220

20 Special Reserve Fund for Postemployment Benefits 1,328,648 5,660 - 98,701 1,433,010

21 Building Fund 170,795,639 533,564,043 (132,433,211) 7,776,684 579,703,156

25 Capital Facilities Fund 29,227,440 31,506,961 (16,877,998) (10,300,000) 33,556,404

35 County School Facilities Fund 157,848,122 15,002,938 (39,103,129) (7,776,684) 125,971,246

40 Special Reserve Fund for Capital Outlay Projects 8,859,467 24,171,178 (6,994,564) (22,481,642) 3,554,441

51 Bond Interest & Redemption 90,997,671 122,467,995 (55,367,552) - 158,098,114

67 Self Insurance Fund 63,079,166 22,478,190 (26,253,909) 7,145,000 66,448,448

TOTAL 622,112,678$ 1,859,560,574$ (1,435,028,049)$ -$ 1,046,645,205$

Noteworthy: Child Development(Fund 12)

2012/13 Unaudited Actuals Ending Balance $0.02 Mil◦Expenditures Exceeded Revenues by ($1.4) Mil◦Required Contribution from General Fund Unrestricted

Ongoing Enrollment Challenges Revenue from the State is Based on Enrollment

Program has Required a General Fund Contribution ◦2011/12 - $1.3 Mil ◦2010/11- $2.8 Mil (Due to Uncollected Receivable)

Planned Repayment to General Fund Unrestricted

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Noteworthy: Cafeteria(Fund 13)

2012/13 Unaudited Ending Balance: $2.6 Mil◦Includes $0.9M GFU Reimbursement per District’s

Agreement with CDE in Response to CRE Review◦Ongoing Discussion with CDE Regarding Cafeteria Fund

Audit Findings◦Reliance on General Fund-Unrestricted (GFU) for Cash

Flow Needs Fund has Total Assets of $19 Mil with $10 Mil in Receivable from the

Federal Government, $8 Mil in Cash and $1 Mil in Other Assets Owes GFU $15.9 Mil as of 6/30/13 Fund has Reimbursed GFU for Payroll Through January and District

Services Through May

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Noteworthy: County School Facilities(Fund 35)

Also Known as State School Facilities Fund◦2012/13 Ending Balance: $126.0 Mil◦Preserving Ending Balances for Loans to GFU for Cash Flow Needs TRANs Alternate Liquidity

◦2013/14 GFU Projected Cash Flow Requires $30 Mil to Cover State Deferrals

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Noteworthy: Special Reserve Fund For Capital Outlay Projects (Fund 40)

Fund 40 Unaudited Actuals Ending Balance: $3.6 Mil◦Balboa Stadium Ending Balance: $0.2 Mil◦Property Management Fund Ending Balance: $0.6 Mil

Revenues from Property Rentals: $7.5 Mil Transferred Landscapers to Redevelopment Agencies Fund Nurses for American with Disabilities Act Section 504 Compliance Transferred

to GFU Continue to Fund Deputy Superintendent of Business Staff and Other

Property Management Support Staff

◦Facilities Master Plan Fund Ending Balance: $0.1 Mil Barnard Sale Generated $16.5 Mil in Revenue

◦Mesa Middle College Construction Fund Ending Balance: $2.7 Mil $2.0 Mil to be Used in 2013/14 as GFU Budget Solution

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Uncertainties and Emergent Needs

Areas of Concern◦Collective Bargaining◦Early Childhood Development Program Needs◦Staffing of Schools◦Impact of Health and Welfare Affordable Care Act

◦Results of Attrition Model Budget Solution◦Real Estate Sales

Three Year Budget Plan◦Ongoing Assessment of Impact

LCFF and Accountability Regulations Development

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Next Steps

The District’s External Auditors Will Independently Review and Audit These Financial Data to Validate:◦Accuracy◦Compliance with Generally Accepted Accounting Principles (GAAP) Governmental Accounting Standards Board (GASB) CA School Accounting Manual (CSAM) Funding Requirements and Regulations

As Required by the CA Education Code the Audited Financial Report and External Auditor’s Report Will Be Presented to the Board in December 2013

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Recommended Action

Staff Recommends that the Board Approve the 2012/13 Unaudited Actuals and Submit to the San Diego County Office of Education as Required by Law

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Questions?

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