COMPREHENSIVE ANNUAL FINANCIAL REPORT ... - Financial …

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2017

SCHOOL DISTRICT NO.1 IN THE CITY AND COUNTY OF DENVER AND STATE OF COLORADO

PREPARED BY THE OFFICE OF THE CONTROLLER

Denver Public Schools

The District's financial operations support Denver Public Schools' mission of Every Child Succeeds. Denver Public Schools serve more than 92,000 students in more than 235 schools in

the City and County of Denver and is the largest district in the State of Colorado.

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School District No. 1 in the City and County of Denver For the year ended June 30, 2017

COMPREHENSIVE ANNUAL FINANCIAL REPORT

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Stephen Clawson, Controller Samantha Gallagher, Director of Accounting

Mary Cooper, Director of Accounting Juan Martinez, Supervisor of Accounting Jeff Zwolenski, Supervisor of Accounting

Selam Habte, Senior Accountant Dave Lobato, Accountant III Sara O'Byrne, Accountant III Medina Steta, Accountant III

Claudia Delgado, Accountant II John DeMoss, Accountant II Linda DeRose, Accountant II Jerre Fleming, Accountant II

Yewande Jegede, Accountant II Jean De La Grace Matadi, Accountant II

Reid McClanahan, Accountant II Joceline Quiceno, Accountant II Brooke Smart, Financial Services Assistant

Denver Public Schools Office of the Controller 1860 Lincoln Street, 11th floor

Denver, CO 80203 720.423.3440

OFFICE OF THE CONTROLLER

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SCHOOL DISTRICT NO. 1 IN THE CITY AND COUNTY OF DENVER AND THE STATE OF COLORADO

TABLE OF CONTENTS YEAR ENDED JUNE 30, 2017

COMPREHENSIVE ANNUAL FINANCIAL REPORT PAGE

INTRODUCTORY SECTION Letter of Transmittal ........................................................................................................................................... 10 Certificate of Achievement for Excellence in Financial Reporting .................................................................... 16 Certificate of Excellence in Financial Reporting Award .................................................................................... 17 District Officials ................................................................................................................................................. 18 Organizational Chart........................................................................................................................................... 19

FINANCIAL SECTION

INDEPENDENT AUDITOR'S REPORT ...................................................................................................... 23

MANAGEMENT'S DISCUSSION AND ANALYSIS .................................................................................. 27

BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position .............................................................................................................. 40 Statement of Activities................................................................................................................... 41

Governmental Fund Financial Statements Balance Sheet................................................................................................................................. 42 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ... 45 Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................ 46 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .................................... 49

Internal Service Fund Financial Statements Statement of Net Position ............................................................................................................. 50 Statement of Revenues, Expenses, and Changes in Net Position .................................................. 51 Statement of Cash Flows ............................................................................................................... 53

Fiduciary Fund Financial Statements Statement of Fiduciary Net Position .............................................................................................. 54 Statement of Changes in Fiduciary Net Position ........................................................................... 55

Notes to the Financial Statements Note 1 ? Summary of Significant Accounting Policies ................................................................. 58 Note 2 ? Cash and Investments...................................................................................................... 66 Note 3 ? Revenue........................................................................................................................... 72 Note 4 ? Interfund Balances and Transfers.................................................................................... 74 Note 5 ? Capital Assets.................................................................................................................. 76 Note 6 ? Long-term Liabilities ...................................................................................................... 78 Note 7 ? Short-term Debt............................................................................................................... 83

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SCHOOL DISTRICT NO. 1 IN THE CITY AND COUNTY OF DENVER AND THE STATE OF COLORADO

TABLE OF CONTENTS YEAR ENDED JUNE 30, 2017

Note 8 ? Pension Plan .................................................................................................................... 84 Note 9 ? Other Postemployment Benefits (OPEB)........................................................................ 96 Note 10 ? Risk Management.......................................................................................................... 99 Note 11 ? Related Parties............................................................................................................. 100 Note 12 ? Commitments and Contingencies................................................................................ 101 Note 13 ? Certain Constitutional Limitations .............................................................................. 103 Note 14 ? Component Units ........................................................................................................ 104 Note 15 ? Subsequent Events ...................................................................................................... 120

OTHER REQUIRED SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules - General and Major Special Revenue Funds.................................. 124 DPS Division Schedule of Changes in the Collective Net Pension Liability......................................... 128 DPS Division Schedule of Collective Employer Contributions ............................................................. 129 Notes to Other Required Supplementary Information............................................................................ 130

COMBINING FUND STATEMENTS - NONMAJOR FUNDS

Governmental Funds Combining Balance Sheet............................................................................................................ 134 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances.................... 135

Fiduciary Funds Agency Funds Statement of Changes in Assets and Liabilities ........................................................................... 136

OTHER SUPPLEMENTARY INFORMATION Budgetary Comparison Schedules: Bond Redemption Fund ....................................................................................................................... 140 Building Fund ...................................................................................................................................... 141 Capital Reserve Fund........................................................................................................................... 142 Private Purpose Trust Fund ................................................................................................................. 143 Pupil Activity Fund.............................................................................................................................. 144 Permanent Fund ................................................................................................................................... 145 Tuition Special Revenue Fund............................................................................................................. 146 Warehouse Fund .................................................................................................................................. 147

Auditor's Integrity Report ? Colorado Department of Education............................................................. 149

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SCHOOL DISTRICT NO. 1 IN THE CITY AND COUNTY OF DENVER AND THE STATE OF COLORADO

TABLE OF CONTENTS YEAR ENDED JUNE 30, 2017

STATISTICAL SECTION

Table of Contents ................................................................................................................................... 151 Net Position by Component ................................................................................................................... 152 Changes in Net Position ......................................................................................................................... 154 Fund Balances ? Governmental Funds................................................................................................... 156 Changes in Fund Balances - Governmental Funds................................................................................. 158 Summary of Expenditures by Function and Other Financing Uses ? General Fund.............................. 160 Summary of Revenues by Source and Other Financing Sources ? General Fund ................................. 162 Assessed Value and Estimated Actual Value of Taxable Property ........................................................ 164 District Net Assessed Valuation and Mills ............................................................................................ 166 Property Tax Rates per $1,000 of Assessed Valuation ? Direct and All Overlapping Governments .... 167 Principal Property Tax Payers ................................................................................................................ 168 Property Tax Levies and Collections ..................................................................................................... 169 Legal Debt Margin ................................................................................................................................. 170 Ratios of Outstanding Debt .................................................................................................................... 172 Direct and Overlapping Debt ................................................................................................................. 174 Demographic and Economic Statistics ................................................................................................... 175 Principal Employers ............................................................................................................................... 176 Nutrition Services ? Facts and Figures................................................................................................... 178 Full-time Equivalent Employees ............................................................................................................ 180 Capital Asset Information ? by Schools ................................................................................................. 181

COMPLIANCE SECTION

Table of Contents .................................................................................................................................... 183 Independent Auditor's Report on Internal Control Over Financial Reporting and on

Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with the Government Auditing Standards.................................................. 184 Independent Auditor's Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance...................................................................................... 186 Schedule of Expenditures of Federal Awards ......................................................................................... 189 Notes to Schedule of Expenditures of Federal Awards .......................................................................... 192 Schedule of Findings and Questioned Costs ........................................................................................... 193 Status of Prior Audit Findings ................................................................................................................ 199 Management's Summary Schedule of Prior Audit Findings .................................................................. 200 Management's Corrective Action Plan .................................................................................................. 204

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DENVER PUBLIC SCHOOLS

Dis0over a Worl

of Opportu\l\ityTM

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