6919217 Mannford Public Schools Audit 2013 M9u5

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FINANCIAL STATEMENTS AND REPORTS OF
MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
JUNE 30, 2013

RALPH OSBORN
CERTIFIED PUBLIC ACCOUNTANT
500 SOUTH CHESTNUT
P.O. BOX 1015
BRISTOW, OKLAHOMA 74010-1015

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
JUNE 30, 2013
TABLE OF CONTENTS
SCHOOL DISTRICT OFFICIALS
INDEPENDENT AUDITOR’S REPORT
COMBINED FINANCIAL STATEMENTS
Combined Statement of Assets, Liabilities, and Equity Regulatory Basis All - Fund Types and Account Groups
Combined Statement of Revenues Collected, Expenditures
Paid and Changes In Fund Balances - All Governmental
Regulatory Basis - Fund Types
Combined Statement of Revenues, Expenditures, and Changes In
Fund Balances - Budget and Actual - Budgeted Governmental
Regulatory Basis - Fund Types
NOTES TO FINANCIAL STATEMENTS

1
2-3

4
5
6
7-18

OTHER SUPPLEMENTARY INFORMATION:
Combining Financial Statements
Combining Statement of Assets, Liabilities, and Fund
Balances -Regulatory Basis - All Special Revenue Funds
Combining Statement of Revenues Collected, Expenditures
Paid, and Changes in Fund Balances - Regulatory Basis All Special Revenue Funds
Combining Statement of Revenues Collected, Expenditures
Paid, and Changes in Fund Balances - Budget and Actual Regulatory Basis - Special Revenue Funds
Combining Statements of Assets, Liabilities and Fund Equity Regulatory Basis - All Agency Funds
Combining Statement of Changes in Assets and Liabilities Regulatory Basis - Activity Funds

23-24

Supporting Schedules
Schedule of Federal Awards Expended
Schedule of Statutory, Fidelity and Honesty Bonds

25-26
27

INTERNAL CONTROL AND COMPLIANCE REPORTS
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
Report on Compliance with Requirements Applicable to Each
Major Program and Internal Control Over Compliance in
Accordance With OMB Circular A-133

19
20
21
22

28-29
30-31

SCHEDULE OF FINDINGS AND QUESTIONED COST
Schedule of Findings and Questioned Costs
Status of Prior Year Audit Findings

32
33

SCHEDULE OF ACCOUNTANTS’ PROFESSIONAL LIABILITY INSURANCE AFFIDAVIT

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
SCHOOL DISTRICT OFFICIALS
JUNE 30, 2013

BOARD OF EDUCATION
President
Vice-President
Clerk
Member
Member

Roger Moore
Russell Dyer
Wayne Burk
Steve Hensley
David Greenwood

Superintendent of Schools
Dr. Steve Waldvogel
School District Treasurer
Gena Floyd
Encumbrance Clerk
Robin Haskins
Minutes Clerk
Meredyth Fry

INDEPENDENT AUDITOR’S REPORT
The Honorable Board of Education
Mannford School District No. I-3
Mannford, Creek County, Oklahoma
REPORT ON THE FINANCIAL STATEMENTS
I have audited the accompanying basic financial statements - regulatory basis of the governmental activities, each
major fund, and the aggregate remaining fund information of Mannford School District No. I-3, Creek County,
Oklahoma (District), as of and for the year ended June 30, 2013, 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 financial reporting provisions of the Oklahoma State Department 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 fraud or error.
AUDITOR’S RESPONSIBILITY
My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit
in accordance with auditing standards generally accepted in the Untied States of America. Those standards require
that I 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 auditor’s judgement, 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 the 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, I 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.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit
opinions.
BASIS FOR ADVERSE OPINION ON U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
As discussed in Note 1, the financial statements are prepared by the Mannford School District Number I-3, on the
basis of the financial reporting provisions of the Oklahoma State Department 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 Oklahoma State Department of Education. The effects of the financial statements on 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 determined, are presumed to be material.
ADVERSE OPINION ON U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
In my opinion, because of the significance of the matter discussed in the “BASIS FOR ADVERSE OPINION ON
U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES” paragraph, the basic 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 the governmental activities, each major fund, and the
aggregate remaining fund information of Mannford School District No. I-3, Creek County, Oklahoma as of June
30, 2013, the changes in its financial position, or, where applicable, its cash flows for the year then ended.
-2-

OPINION ON REGULATORY BASIS OF ACCOUNTING
As discussed in Note 1E, the financial statements referred to above do not include the general fixed assets account
group, which should be included in order to conform with the accounting and reporting regulations prescribed or
permitted by the Oklahoma State Department of Education. The amount that should be recorded in the general
fixed assets account group is not known.
In my opinion, the basic financial statements referred to in the first paragraph present fairly, in all material
respects, the respective financial position - regulatory basis of the governmental activities, each major fund, and
the aggregate remaining fund information of Mannford School District No. I-3, Creek County, Oklahoma
(District), as of June 30, 2013, and the respective changes in financial position - regulatory basis for the year ended
on the regulatory basis of accounting described in Note 1.
OTHER MATTERS
Other Information
My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the District’s basic financial statements. The combining statements - regulatory basis, are presented for purposes
of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures
of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and
Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required
part of the basic financial statements.
The combining statements - regulatory basis and the schedule of expenditures of federal awards are the
responsibility of management and were derived from and relate directly to the underlying accounting and other
records used to prepare the basic financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements to the basic financial statements themselves, and other additional procedures
in accordance with auditing standards generally accepted in the United States of America. In my opinion, the
combining statements - regulatory basis and the schedule of expenditures of federal awards are fairly stated in
all material respects in relation to the basic financial statements as a whole.
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, I have also issued my report dated February 10, 2014on my
consideration of the District’s internal control over financial reporting and on my 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 my testing of internal control over financial reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering the District’s internal control over financial reporting and compliance.
Sincerely,

Ralph Osborn
Ralph Osborn
Certified Public Accountant
Bristow, Oklahoma
February 10, 2014

- 3 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINED STATEMENT OF ASSETS, LIABILITIES, AND EQUITY
REGULATORY BASIS - ALL FUND TYPES AND ACCOUNT GROUPS
JUNE 30, 2013

Governmental Fund Type
Special
Debt
General
Revenue
Service

ASSETS

$ 310,610
-

60,077
-

Capital
Projects
$

Fiduciary
Account
Fund Types
Groups
Trust
General
And
Long-Term
Agency
Debt

Cash and cash equivalents
Amount available in Debt Service fund
Amount to be provided for retirement
of general long-term debt
Amount to be provided for capitalized
lease agreements

$ 2,378,975
-

Total Assets

$ 2,378,975

$ 310,610

60,077

271,883
-

Total
(Memorandum
(Only)

60,077

$ 3,021,545
60,077

1,659,923

3,314,499

271,883

$5,034,499

$ 8,056,044

271,883

LIABILITIES AND FUND EQUITY
LIABILITIES
Warrants payable
Encumbrances
Due to other groups
Long-term debt:
Bonds payable
Capital leases

319,793
93,229
-

10,315
13,852
-

330,108
107,081
271,883

1,720,000
3,314,499

413,022

24,167

271,883

5,034,499

5,743,571

Unreserved
Designated for debt service
Undesignated

1,965,953

286,443

60,077
-

60,077
2,252,396

Total fund equity

1,965,953

286,443

60,077

2,312,473

$ 2,378,975

$ 310,610

Total Liabilities
FUND EQUITY

Total liabilities and fund equity

60,077

The accompanying notes are an integral part of this statement.
- 4 -

271,883

$5,034,499

$ 8,056,044

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINED STATEMENT OF REVENUES COLLECTED, EXPENDITURES
PAID, AND CHANGES IN FUND BALANCES
REGULATORY BASIS - ALL GOVERNMENTAL FUND TYPES
FOR THE YEAR ENDED JUNE 30, 2013
Debt
Service

$ 1,407,542
232,592
6,919,217
1,180,153
33,306

$ 181,175
33,686
16,130

$ 741,244
-

9,772,810

230,991

5,837,655
3,382,843
568,497
33,324
5,173
16,710

Revenues Collected
Local Sources
Intermediate Sources
State Sources
Federal Sources
Return of Assets

General

Special
Revenue

Total Revenues Collected
Expenditures Paid
Instruction
Support Services
Non-Instruction Services
Capital Outlay
Other Outlays
Other Uses
Repayments
Debt Service:
Principal Retirement
Interest and Fiscal
Agent Charges
Total Expenditures Paid

Adjustments to Prior Year
Lapsed Appropriations
Estopped Warrants

$ 2,329,961
232,592
6,952,903
1,180,153
49,436

741,244

10,745,045

56,135
281,031
15,968
12,484
1,228
-

750,000
-

685,000

40,948

366,846

725,948

750,000

(71,392)

(135,855)

15,296

(750,000)

25,466
8

26,151
8
750,000

685

Other Financing Sources (Uses)
Proceeds from Bond Sales

750,000

Excess (Deficiency) of Revenue
Collected Over (Under)
Expenditures Paid And Other
Financing Sources (Uses)
792d Balance, Beginning

(45,918)
2,011,871

(135,170)
421,613

15,296
44,781

Fund Balance, Ending

Total
(Memorandum
Only)

9,844,202

Excess of Revenues Collected
Over (Under) Expenditures Paid

Capital
Projects

$ 1,965,953

$ 286,443

60,077

The accompanying notes are an integral part of this statement.
- 5 -

5,893,790
3,663,874
584,465
762,484
33,324
5,173
16,710

11,686,996
(941,951)

(165,792)
2,478,265
$ 2,312,473

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
REGULATORY BASIS - BUDGETED GOVERNMENTAL FUND TYPES
FOR THE YEAR ENDED JUNE 30, 2013
Original
Budget
Revenues Collected
Local Sources
Intermediate Sources
State Sources
Federal Sources
Return of Assets
Total Revenues Collected
Expenditures Paid
Instruction
Support Services
Non-Instruction Services
Capital Outlay
Other Outlays
Other Uses
Repayments
Debt Service:
Principal Retirement
Interest and Fiscal
Agent Charges
Total Expenditures Paid
Excess of Revenues Collected
Over(Under) Expenditures
Paid Before Adjustments
To Prior Year
Adjustments to Prior Year
Lapsed Appropriations
Estopped Warrants

$1,276,903
194,490
6,476,719
897,576
8,845,688

10,857,559
-

General Fund
Final
Budget
$

1,276,903
194,490
6,476,719
897,576
8,845,688

10,857,559

(2,011,871)

Actual

10,857,559
-

10,857,559

Special Revenue Funds
Original
Final
Budget
Budget
Actual

Excess (Deficiency) of Revenue
Collected Over (Under)
Expenditures Paid And Other
Financing Sources (Uses)
(2,011,871)
(2,011,871)
Fund Balance, Beginning
2,011,871
2,011,871
Fund Balance, Ending
$
0 $
0 $

1,407,542
232,592
6,919,217
1,180,153
33,306
9,772,810

5,837,655
3,382,843
568,497
33,324
5,173
16,710

168,173
168,173

181,175
33,686
16,130
230,991

Debt Service Fund
Final
Budget
Actual

Original
Budget
$

688,668
688,668

$ 741,244
741,244

4,105
585,681
-

56,135
281,031
15,968
12,484
1,228
-

685,000

589,786

366,846

40,948
725,948

(71,392)

(421,613)

(135,855)

(37,280)

25,466
8

9,844,202

685

(45,918)
(421,613)
(421,613)
(135,170)
2,011,871
421,613
421,613
421,613
1,965,953 $
0 $
0 $ 286,443 $

The accompanying notes are an integral part of this statement.
- 6 -

(37,280)
44,781
7,501 $

15,296

15,296
44,781
60,077

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
1. Summary of Significant Accounting Policies
The basic financial statements of Mannford Public Schools Independent District
No. I-3, Creek County, Oklahoma (the District) have been prepared in conformity
with an other comprehensive basis of accounting as prescribed by the Oklahoma
State Department of Education. The more significant of the District’s policies
are described below.
A. Reporting entity
The District is a corporate body for public purposes created under Title 70 of
Oklahoma Statutes and accordingly is a separate entity for operating and
financial reporting purposes.
The District is part of the public school system of Oklahoma under the general
direction and control of the State Board of Education and is financially
dependent on State of Oklahoma support. The general operating authority for the
public school system is the Oklahoma School Code contained in Title 70, Oklahoma
Statutes.
The governing body of the District is the Board of Education composed of elected
members. The appointed superintendent is the executive officer of the District.
In evaluating how to define the District, for financial reporting purposes,
management has considered all potential component units. The decision to include
a potential component unit in the reporting entity was made by applying the
criteria established by the Governmental Accounting Standards Board (GASB). The
basic, but not the only, criterion for including a potential component unit
within the reporting entity is the governing body’s ability to exercise oversight
responsibility. The most significant manifestation of this ability is financial
interdependency.
Other manifestations of the ability to exercise oversight
responsibility include, but are not limited to, the selection of governing
authority, the designation of management, the ability to significantly influence
operations, and accountability for fiscal matters. A second criterion used in
evaluating potential component units is the scope of public service. Application
of this criterion involves considering whether the activity benefits the District
and/or its citizens, or whether the activity is conducted within the geographic
boundaries of the District and is generally available to its patrons. A third
criterion used to evaluate potential component units for inclusion or exclusion
from the reporting entity is the existence of special financing relationships,
regardless
of
whether
the
District
is
able
to
exercise
oversight
responsibilities. Based upon the application of these criteria, there are no
potential component units included in the District’s reporting entity.

- 7 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
B. Fund Accounting and Description of Funds
The District uses funds and account groups to report on its financial position
and the results of its operations. Fund accounting is designed to demonstrate
legal compliance and to aid financial management by segregating transactions
related to certain district functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts. An
account group, on the other hand, is a financial reporting device designed to
provide accountability for certain assets and liabilities that are not recorded
in the funds because they do not directly affect net expendable available
financial resources.
Funds are classified into three categories: governmental, proprietary and
fiduciary. Each category, in turn, is divided into separate “fund types.”
Governmental Fund Types
Governmental funds are used to account for all or most of governments’s general
activities, including the collection and disbursement of earmarked monies
(special revenue funds), the acquisition or construction of general fixed assets
(capital projects fund), and the servicing of general long-term debt (debt
service fund).
General Fund
The general fund is used to account for all transactions, except those required
to be accounted for in another fund. Major revenue sources include state and
local property taxes and state funding under the Foundation and Salary Incentive
Aid Program. Expenditures include all costs associated with the daily operation
of the schools except the programs funded for building repairs and maintenance,
school construction and debt service on bonds and other long-term debt. The
general fund includes federal and state restricted monies that must be expended
for specific programs.
Special Revenue Fund
The special revenue fund includes the District’s Co-op Fund, Building Fund, and
Gifts Fund. The Building Fund consists of monies derived from property taxes
levied for the purpose of erecting, remodeling, or repairing buildings and for
purchasing furniture and equipment.
The Gifts Fund derives monies from
advertising signs. The Co-op Fund includes money received for certain current
expenditures.
Debt Service Fund
The debt service fund is the District’s sinking fund and is used to account for
the accumulation of financial resources for the payment of general long-term debt
principal, interest and related cost.
The primary revenue source is local
property taxes levied specifically for debt service.

- 8 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Capital Projects Fund
The capital projects fund is the District’s Bond Fund and is used to account for
the proceeds of bond sales to be used exclusively for acquiring school sites,
constructing and equipping new school facilities, renovating existing facilities,
and acquiring transportation equipment.
Proprietary Fund Types
Proprietary funds are used to account for activities similar to those found in
the private sector, where the determination of net income is necessary or useful
to sound financial administration. Goods and services from such activities can
be provided either outside parties (enterprise funds) or to other departments or
agencies primarily within the District (internal service funds). The District
does not have Proprietary Funds at this time.
Fiduciary Fund Types
Fiduciary funds are used to account for assets held on behalf of outside
partners, including other governments, or on behalf of other funds within the
District. When these assets are held under the terms of a trust agreement, trust
funds are used for their accounting and reporting. Agency funds generally are
used to account for assets that the District holds on behalf of others as their
agent and do not involve measurement of results of operations.
Account Groups
Account groups are not funds and consist of a self-balancing set of accounts used
only to establish accounting control over long-term debt and general fixed assets
not accounted for in proprietary funds.
General Long-Term Debt Account Group
This account group was established to account for all long-term debt of the
District, which is offset by the amount available in the debt service fund and
the amount to be provided in future years to complete retirement of the debt
principal. It is also used to account for liabilities for compensated absences
and early retirement incentives, which are to be paid from funds provided in
future years.
General Fixed Asset Account Group
This account group is used to account for property, plant and equipment of the
school district. The District does not have information necessary to include this
group in its combined financial statements.

- 9 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Memorandum Only - Total Column
The total column on the financial statements is captioned “memorandum only” to
indicate that it is presented only to facilitate financial analysis. Data in
this column does not present financial position, results of operations, or cash
flow in conformity with generally accepted accounting principles. Neither is
such data comparable to a consolidation. Interfund eliminations have not been
made in the aggregation of this data.
C. Basis of Accounting and Presentation
The District prepares its financial statements in a presentation format that is
prescribed by the Oklahoma State Department of Education.
This format is
essentially the generally accepted form of presentation used by the state and
local governments prior to the effective date of GASB Statement No. 34, Basic
Financial Statements-Management’s Discussion and Analysis- for State and Local
Governments. This format significantly differs from that required by GASB 34.
The basic financial statements are essentially prepared on a basis of cash
receipts and disbursements modified as required by the regulations of the
Oklahoma State Department of Education (OSDE) as follows:
1. Encumbrances represented by purchase orders, contracts, and other
commitments for the expenditure of monies are recorded as expenditures when
approved.
2. Investments and inventories are recorded as assets when purchased.
3. Capital assets in proprietary funds are recorded when acquired and
depreciated over their useful lives.
4. Warrants payable are recorded as liabilities when issued.
5. Long-term debt is recorded when incurred.
6. Accrued compensated absences are recorded as an expenditure and liability
when the obligation is incurred.
This regulatory basis of accounting differs from accounting principles generally
accepted in the United States of America, which require revenues to be recognized
when they become available and measurable, or when they are earned, and
expenditures or expenses to be recognized when the related liabilities are
incurred for governmental fund types; and, when revenues are earned and
liabilities are incurred for proprietary fund types and trust funds.

- 10 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
D. Budgets and Budgetary Accounting
The District is required by state law to prepare an annual budget. A preliminary
budget must be submitted to the Board of Education by December 31 for the fiscal
year beginning the following July 1. If the preliminary budget requires an
additional levy, the District must hold an election on the second Tuesday in
February to approve the levy. If the preliminary budget does not require an
additional levy, it becomes a legal budget. If an election is held and the taxes
are approved, then the preliminary budget becomes the legal budget. If voters
reject the additional taxes, the District must adopt a budget within the approved
tax rate.
The District may upon approval by the majority of the electors of the District
voting on the question make the ad valorem levy for emergency levy and local
support levy permanent. The District electors have made the levies permanent.
Under current Oklahoma Statutes, a formal budget is required for all funds except
for trust and agency funds. Budgets are presented for all funds that include the
originally approved budgeted appropriations and final budgeted appropriations as
adjusted for supplemental appropriations and approved transfers between budget
categories.
E. Assets, Liabilities, and Fund Equity
Cash and Cash Equivalents
For purposes of the statement of cash flows, the District considers all cash on
hand, demand deposits, and highly liquid investments, with an original maturity
of three months or less when purchased, to be cash and cash equivalents.
Investments
Investments consist of certificates of deposit or direct obligations of the
United States Government and Agencies with maturities greater than three months
when purchased. All investments are recorded at cost, which approximates market
value.
Property Tax Revenues
The District is authorized by state law to levy property taxes, which consists
of ad valorem taxes on real and personal property within the District. The
County Assessor, upon receipt of the certification of tax levies from the county
excise board, extends the tax levies on the tax roll for submission to the County
Treasurer prior to October 1. The County Treasurer must commence tax collection
within fifteen days of receipt of the tax rolls. The first half of taxes are due
prior to January 1. The second half is due prior to April 1.

- 11 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
If the first payment is not made timely, the entire tax becomes due and payable
on January 2. Second half taxes become delinquent on April 1 of the year
following the year of assessment. If not paid by the following October 1, the
property is offered for sale for the amount of taxes due. The owner has two years
to redeem the property by paying the taxes and penalty owed. If at the end of two
years the owner has not done so, the purchaser is issued a deed to the property.
Inventories
The value of consumable inventories at June 30, 2013 is not known but is not
believed to be material to the basic financial statements.
Capital Assets
The General Fixed Assets Account Group is not presented.
be included in it is not known.

The amount which would

Compensated Absences
Vested or accumulated vacation leave that is expected to be liquidated with
expendable available financial resources is reported as an expenditure and a fund
liability of the governmental fund that will pay it. There are no amounts of
vested or accumulated vacation leave that are not expected to be liquidated with
expendable available financial resources.
Employees are allowed varying amounts of sick leave during the year in accordance
with Oklahoma Statutes.
Sick leave used during the year is recorded as an
expense in the governmental fund. Vested accumulated rights to receive sick pay
benefits may be used in subsequent years, transferred to another District, or
added to years of service upon retirement. Based on the District’s experience
it is not probable that District will pay for vested accumulated rights to
receive sick leave. Therefore, a liability for vested accumulated sick leave has
not been recorded.
Long-Term Debt
Long-term debt is recognized as a liability of a governmental fund when due or
when resources have been accumulated in the debt service fund for payment early
in the following year.
For other long-term obligations, only that portion
expected to be financed from expendable available financial resources is reported
as a fund liability of a governmental fund.
The remaining portion of such
obligations is reported in the general long-term debt account group.
Fund Balance
Fund balance represents the cash and investments not encumbered by purchase
order, legal contracts, and outstanding warrants.

- 12 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
State Revenues
Revenues from state sources for current operations are primarily governed by the
state aid formula under the provisions of Article XVIII, Title 70, Oklahoma
Statutes. The State Board of Education administers the allocation of state aid
funds to school districts based on information accumulated from the districts.
After review and verification of reports and supporting documentation, the State
Department of Education may adjust subsequent fiscal period allocations of money
for prior year errors disclosed by review.
Normally, such adjustments are
treated as reductions or additions of revenue of the year when the adjustment is
made.
The District receives revenue from the state to administer certain categorical
education programs.
State Board of Education rules require that revenue
earmarked for these programs be expected only for the program for which the money
is provided. These rules also require that the money not expended as of the
close of the fiscal year be carried forward into the following year to be
expended for the same categorical programs. The State Department of Education
requires the categorical educational program revenues be accounted for in the
general fund.
Interfund Transactions
Quasi-external transactions are accounted for as revenues, expenditures
expenses.
Transactions that constitute reimbursements to a fund
expenditure/expenses initially made from it that are properly applicable
another fund are recorded as expenditures/expenses in the fund that
reimbursed.

or
or
to
is

All other transactions, except quasi-external transactions and reimbursements,
are reported as transfers. Nonrecurring or nonroutine permanent transfers of
equity are reported as residual equity transfers. All other interfund transfers
are reported as operating transfers.
There were no operating transfers or
residual equity transfers during fiscal year 2013.
2. Cash and Investments
The District’s investment policies are governed by state statute. Permissible
investments include direct obligations of the United States Government and
Agencies, certificates of deposit of savings and loan associations, and bank and
trust companies, and savings accounts or savings certificates of saving and loan
associations, and trust companies. Collateral is required for demand deposits and
certificates of deposit for all amounts not covered by federal deposit insurance.

- 13 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
Deposits and Investments
The District’s cash deposits at June 30, 2013, were completely insured or
collateralized by federal deposit insurance, direct obligations of the United
States Government, or securities held by the District or by its agent in the
District’s name.
Custodial Credit Risk
Custodial credit risk is the risk that in the event of failure of counterparty,
the District will not be able to recover the value of its deposits or
investments. Deposits are exposed to custodial credit risk if they are uninsured
and uncollateralized. Investment securities are exposed to custodial credit risk
if they are uninsured, are not registered in the name of the District, and are
held by counterparty or the counterparty’s trust department but not in the name
of the District.
The District’s policy requires that all deposits and
investments in excess of amounts covered by federal deposit insurance be fully
collateralized by the entity holding the deposits or investments. As of June 30,
2013, all of the Districts deposits and investments were either covered by
federal deposit insurance or were fully collateralized.
Deposits
The District had deposits at financial institutions with a carrying amount of
approximately $3,021,545 at June 30, 2013. The bank balance of the deposits at
June 30, 2013 was approximately $3,021,999 .
Credit Risk
Fixed-income securities are subject to credit risk.
not have fixed income securities at June 30, 2013.

However, the District did

Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely
affect the fair value of an investment. The District’s Treasurer and Board of
Education monitor the District’s investment performance on an ongoing basis to
limit the District’s interest rate risk.
As of June 30, 2013, all of the
District’s deposits consisted of demand deposits.
3. General Long-Term Debt
State statutes prohibit the District from becoming indebted in an amount
exceeding the revenue to be received for any fiscal year without approval by the
District’s voters. Bond issues have been approved by the voters and issued by the
District for various capital improvements. These bonds are required to be fully
paid serially within 25 years from the date of issue.

- 14 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
General long-term debt of the District consists of bonds payable and capital
leases. Debt service requirements for bonds are payable solely from fund balance
and future revenues of the debt service fund. Principal and interest on the
capital leases is paid from the General Fund.
The following is a summary of the long-term debt transactions of the District for
the year ended June 30, 2013:
Bonds
Capital Lease
Payable
Obligation
Total
Balance, July 1, 2012
$ 1,655,000
$ 3,677,797
$ 5,332,797
Additions
750,000
750,000
Retirements
(685,000)
(363,298)
(1,048,298)
Balance, June 30, 2013
$ 1,720,000
$ 3,314,499
$ 5,034,499
A brief description of the outstanding general obligation bond issue at June 30,
2013 is set forth below:
Amount
Outstanding
Independent School District No. I-3 Building Bonds,
Series 2012,original issue $550,000, interest rate of
15.0% to 2.25%, due in annual installments of $175,000,
final payment of $175,000 due July 1, 2015.

420,000

Independent School District No. I-3 Building Bonds,
Series 2010,original issue $575,000, interest rate of
15.0% to 2.25%, due in annual installments of $175,000,
final payment of $175,000 due July 1, 2015.

350,000

Independent School District No. I-3 Building Bonds,
Series 2009, original issue $800,000, interest rate
of 2.0% to 2.2%, due in annual installments of
$200,000, final payment of $200,000 due July 14, 2012.

200,000

Independent School District No. I-3 Building Bonds,
Series 2012,original issue $750,000, interest rate of
7.0% to 9.0%, $180,000 due in beginning annual installment,
due in annual installments of $190,000, final payment of
$190,000 due July 1, 2017.
$

- 15 -

750,000
1,720,000

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
The annual debt service requirements for bond principal and interest are:
Year Ending June 30
Principal
Interest
Total
2014
$
$
$
2015
695,000
11,558
706,558
2016
505,000
8,155
513,155
2017
330,000
4,950
334,950
2018
190,000
3,420
193,420
Total
$ 1,720,000
$
28,083
$ 1,748,083
Interest expense on bonds paid during the current year totaled $40,948.
The District has entered into lease purchase agreements as lessee for financing
the acquisition of equipment and a copier. The lease agreements qualify as
capital leases for accounting purposes since title transfers at the end of the
lease term and have been recorded at the present value of the future minimum
lease payments.
The leases contain a clause, which gives the District the
ability to terminate the lease agreement at the end of each fiscal year.
The District has recorded the liability for future lease payments in the general
long-term debt account group for the equipment.
The schedule of the future
minimum lease payments under the capital leases and the present value of the net
minimum lease payments at June 30 is as follows:
Year ending June 30
2014
2015
2016
2017
Total minimum lease payments
Less: Amount representing interest
Present value of future minimum
lease payments

Building
134,209
134,209
134,209
140,170
542,797
50,426
492,371

Equipment
870,000
815,000
725,000
725,000
3,135,000
312,872

Total
$ 1,004,209
949,209
859,209
865,170
3,677,797
363,298

$ 2,822,128

$ 3,314,499

4. Employee Retirement System
The District participants in the state-administered Oklahoma Teachers’ Retirement
System (the “System”), which is a cost-sharing, multiple-employer Public Employee
Retirement System administered by the Board of Trustees of the Oklahoma Teachers’
Retirement System.
The System provides retirement and disability benefits,
annual cost-of-living adjustments and death benefits to plan members and
beneficiaries. Title 70 Section 17 of Oklahoma Statutes establishes benefit
provisions and may be amended only through legislative action.

- 16 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
The System’s financial statements are prepared using the cash basis of
accounting, except for accruals of interest income. Plan member contributions
are recognized in the period in which the contributions are made. Benefits and
refunds are recognized when paid.
The pension benefit obligation is a
standardized disclosure measure of the present value of pension benefits. This
pension valuation method reflects the present value of estimated pension benefits
that will be paid in future years as a result of employee services performed to
date and is adjusted for the effect of projected salary increases. There are no
actuarial valuations performed on individual school districts. The System has an
under funded pension benefit obligation as determined as part of the latest
actuarial valuation.
The District, the State of Oklahoma, and the participating employee make
contributions. The contribution rates for the District and its employees are
established by and may be amended by Oklahoma Statutes. The contribution rates
for the Districts, which are not actuarially determined, and its employees are
established by statute and applied to the employee’s earnings, plus employer-paid
fringe benefits. The required contribution for participating members is 7% of
compensation. Additionally, OTRS receives federal matching contributions for
positions whose funding comes from federal sources or certain grants.
The
District and State are required to contribute 14% of applicable compensation.
Contributions received by the System from the State of Oklahoma are from 3.54%
of its revenue from sales tax, use tax, corporate income tax, and individual
income tax.
The District is required by statute to contribute 9.5% of
compensation.
The District is allowed by the Oklahoma Teacher’s Retirement
System to make the required contributions on behalf of the participating members.
Ten-year historical trend information is presented in the Teacher’s Retirement
System of Oklahoma Annual Report for the year ended June 30, 2013. This
information is useful in assessing the pension plan’s accumulation of sufficient
assets to pay pension benefits as they become due. The annual report may be
obtained by writing to Oklahoma Teacher’s Retirement System, PO Box 53524,
Oklahoma City, OK, 73152 or by calling 405-521-2387.
The Districts total contributions for 2013, 2012, and 2011 were $578,522,
$506,527, and $502,052 respectively.

- 17 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2013
5. Contingencies
Amounts received or receivable from grantor agencies are subject to audit and
adjustments by grantor agencies.
Any disallowed claims, including amounts
already collected, may constitute a liability of the applicable funds.
The
amount, of expenditures which may be disallowed by the grantor cannot be
determined at this time, although the District expects such amounts, if any, to
be immaterial.
The District may from time to time become involved in legal actions. Attorneys
provided by the District or the insurance provider vigorously defend the action.
6. Risk Management
The District is exposed to various risk of loss related to torts, theft of,
damage to, and destruction of assets, errors and omissions, injuries to
employees’s health and life, and natural disasters. The District manages these
various risks of loss through the purchase of commercial insurance. Management
believes such coverage is sufficient to preclude any significant uninsured losses
to the District. Settled claims have not exceeded this insurance coverage in any
of the past three fiscal years.
7. Subsequent Events
The District has considered subsequent events through February 11, 2013, the date
which the financial statements were available for release. The District is not
aware of any items which need to be disclosed during that period.

- 18 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINING STATEMENT OF ASSETS, LIABILITIES, AND CASH FUND BALANCES
REGULATORY BASIS - ALL SPECIAL REVENUE FUNDS
JUNE 30, 2013

Co-op
Fund

Building
Fund

Total

ASSETS
Cash and Cash Equivalents
Total Assets

1,897

308,713

310,610

1,897

308,713

310,610

1,897
-

8,418
13,852

10,315
13,852

LIABILITIES AND FUND EQUITY
Liabilities:
Warrants Payable
Encumbrances
Total Liabilities

1,897

22,270

24,167

Fund Equity:
Unreserved
Undesignated

286,443

Total Fund Equity

286,443

Total Liabilities and Fund Equity

1,897

308,713

310,610

The notes to financial statements are an integral part of this statement.
- 19 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINING STATEMENT OF REVENUES COLLECTED,
EXPENDITURES PAID, AND CHANGES IN FUND BALANCES
REGULATORY BASIS - ALL SPECIAL REVENUE FUNDS
JUNE 30, 2013

Co-op
Fund

Building
Fund

Total

33,686
14,902

$ 181,175
1,228

$ 181,175
33,686
16,130

48,588

182,403

230,991

52,693
-

3,442
281,031
15,968
12,484
1,228

56,135
281,031
15,968
12,484
1,228

Total Expenditures Paid

52,693

314,153

366,846

Excess of Revenues Over (Under)
Expenditures Before
Adjustments to Prior Year

(4,105)

Revenues Collected
Local Sources
State Sources
Return of Assets

Total Revenues
Expenditures Paid
Instruction
Support Services
Non-Instruction
Capital Outlay
Other Outlay

(131,750)

(135,855)

Adjustments to Prior Year
Lapsed Appropriations

685

Total Adjustments to Prior Year

685

Excess of Revenues and Other
Sources Over (Under)
Expenditures and Other
Financing Sources (Uses)
Fund Balance - Beginning of Year
Fund Balance - Ending of Year

(4,105)

(131,065)

(135,170)

4,105

417,508

421,613

$ 286,443

The notes to the financial statements are an integral part of this statement.
- 20 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINING STATEMENT OF REVENUES COLLECTED, EXPENDITURES PAID
AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
REGULATORY BASIS - SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED JUNE 30, 2013
Co-op Fund
Final
Budget

Original
Budget
Revenue Collected:
Local Sources
State Sources
Return of Assets
Total Revenue Collected

Expenditures Paid:
Instruction
Support Services
Non-Instruction
Capital Outlay
Other Outlay
Total Expenditures Paid
Excess of Revenue Over (Under)
Expenditures Before Adjustments
to Prior Year
Adjustments to Prior Year
Lapsed Appropriations
Total Adjustments to Prior Year

Fund Balance - Beginning
$

Original
Budget

Total
Final
Budget

Actual

33,686
14,902
48,588

$168,173
168,173

$181,175
1,228
182,403

$168,173
168,173

$181,175
33,686
16,130
230,991

585,681
585,681

3,442
281,031
15,968
12,484
1,228
314,153

4,105
585,681
589,786

56,135
281,031
15,968
12,484
1,228
366,846

Actual
$

4,105
4,105

52,693
52,693

(4,105)

Excess of Revenue and Other
Sources Over (Under) Expenditures
and Other Financing Sources (Uses)

Fund Balance - Ending

Building Fund
Original
Final
Budget
Budget
Actual

(4,105)

4,105

(417,508) (417,508) (131,750)

- 21 -

685
685

(417,508) (417,508) (131,065)
417,508
$

417,508
$

(421,613) (421,613) (135,855)

685
685

(421,613) (421,613) (135,170)

417,508
$286,443

421,613
$

421,613
$286,443

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINING STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY
REGULATORY FUNDS - ALL AGENCY FUNDS
JUNE 30, 2013

Agency
Fund
Activity
Funds

Total

Cash and Cash Equivalents

$ 271,883

Total Assets

$ 271,883

271,883

ASSETS

LIABILITIES AND FUND EQUITY
Liabilities:
Due to Others
Total Liabilities
Fund Equity:
Unreserved/Undesignated
Total Liabilities and Fund Equity

$ 271,883

The notes to the financial statement are an integral part of this statement.
- 22 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
REGULATORY BASIS - ACTIVITY FUND - HIGH SCHOOL
JUNE 30, 2013

ANNUAL
ART
ATHLETICS
GREENHOUSE
B BANFIELD RESALE
M BANFIELD RESALE
BAND
EARLY CHILDHOOD CENTER
BAND RESALE
CONCESSION
CLASS OF 2013
CLASS OF 2014
CLASS OF 2015
CLASS OF 2016
ELEMENTARY
FCA
FFA
E01 FUNDRAISER
RELIEF FUND
GENERAL FUND
GENERAL FUND REFUND
H.S. CHEERLEADERS
H.S. LIBRARY
H.S. STUDENT COUNCIL
INTEREST
GIRLS BASKETBALL FUNDS
EMPLOYEE RELIEF FUND
MIDDLE SCHOOL
MIDDLE SCHOOL LIBRARY
MIDDLE SCHOOL CHEERLEADING
M.S. STUDENT COUNCIL
NATIONAL HONOR SOCIETY
BOYS BASKETBALL
SADD
SCIENCE CLUB
SPANISH CLUB
SPECIAL OLYMPICS
MOTIVATIONAL READING
CHOIR
SIVIDON RESALE
LEADERSHIP COUNCIL
FRESHMEN EXPERIENCE
ELEMENTARY MEDIA

July 1, 2012
$
3,478
413
31,854
418
1,383
144
385
6,340
0
1,195
6,149
911
620
857
7,405
26
2,108
1,075
806
0
0
5,928
8,242
2,685
34,235
1,372
0
15,502
556
3,409
5,324
1,400
136
941
986
289
74
147
582
10
522
539
2,873

Additions
$ 11,510
1,170
81,792
0
1,595
0
23,062
18,367
539
32,391
515
8,099
179
60
18,192
0
73,175
19,220
43,980
0
8,534
34,887
5,738
6,461
1,002
4,701
3,433
8,781
1,157
4,099
4,703
12,232
1,691
615
776
499
0
0
3,926
0
198
0
11,229

- 23 -

Deletions
$ 12,143
1,153
95,351
0
2,978
0
21,831
18,913
0
32,864
2,205
5,465
345
0
15,776
0
72,996
16,645
43,814
0
1,027
38,361
7,185
6,770
205
2,741
3,433
10,959
1,311
4,374
4,506
12,352
768
1,059
1,206
669
0
0
2,907
0
223
530
9,987

June 30, 2013
$
2,845
430
18,295
418
0
144
1,616
5,794
539
722
4,459
3,545
454
917
9,821
26
2,287
3,650
972
0
7,507
2,454
6,795
2,376
35,032
3,332
0
13,324
402
3,134
5,521
1,280
1,059
497
556
119
74
147
1,601
10
497
9
4,115

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
REGULATORY BASIS - ACTIVITY FUND - CONTINUED
JUNE 30, 2013

ACADEMIC TEAMS
H.S. TEACHERS LOUNGE
9TH GRADE CHEERLEADERS
MHS COMMUNITY SCHOLAR
WRESTLING
SMITH RESALE
COOP LIFE SKILLS
H.S. ACTIVITY ACCOUNT
WRESTLING RESALE
SOFTBALL
CONTEST SPEECH
SPIRIT CLUB
BASEBALL FUNDRAISER
FOOTBALL FUNDRAISER
FUTURE MEDICAL PROOF
ALTERNATIVE EDUCATION
PEPSI
UPPER ELEMENTARY
LANDRUM RESALE
SCOTT RESALE
SCHOLARSHIPS
MATH CLUB
BANFIELD RESALE
BUSINESS & TECHNOLOGY
M.S. ART
GIRLS SOCCER
MANNFORD TRACK
TOTAL HIGH SCHOOL

July 1, 2012
$
258
3,502
63
3,796
4,774
44
5,067
16,105
0
781
86
0
3,198
4,032
0
290
40,154
14,739
0
41
21,496
4,746
19
95
250
3,271
205
$

278,331

Additions
$
0
838
0
0
5,370
0
0
5,604
560
2,319
2,252
1,840
7,671
24,329
0
339
15,618
21,038
0
0
0
11,547
220
0
160
20,197
152

Deletions
$
0
849
0
750
8,044
0
2,290
10,978
560
480
2,292
1,444
7,471
16,551
0
232
26,060
16,651
0
0
500
8,407
220
0
75
17,952
152

June 30, 2013
$
258
3,491
63
3,046
2,100
44
2,777
10,731
0
2,620
46
396
3,398
11,810
0
397
29,712
19,126
0
41
20,996
7,886
19
95
335
5,516
205

$ 568,562

$ 575,010

$ 271,883

- 24 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
SCHEDULE OF FEDERAL AWARDS EXPENDED
FOR THE YEAR ENDED JUNE 30, 2013
Federal Grantor/Pass Through
Grantor/Program Title
U.S. Department of Education
Direct Programs
Impact Aid
Title VII
Total Direct
Passed Through State
Dept. of Educ.
Title 1/Basic
Flow Through PL Part B
Preschool Ages 3-5
Title II, Part A
Head Start Funds to School
Total Passed Through
State Dept. of Educ.

Federal Grantor’s Approved
CFDA#
Number
Amount

84.041
84.060

Balance at
Expenditures* June30,2013

Receipts

27,634
255,643
283,277

70,999
70,999

300,647
111,120
2,154
57,629
3,720

296,645
287,901
7,962
39,286
-

475,270

631,794

14,980
773,527

11,377
714,170

U.S. Dept of Interior Passed
Through Muskogee Creek Nation
Indian Education
15.130

8,767

9,029

U.S. Dept of Health & Human
Services Passed Through
Okla. Health Care Authority
Medical Assistance Program
Flood Control

55
178

Passed Through State Dept. of
Career and Tech. Educ.
Vocational Education
Total U.S. Dept. Of Education

84.010
84.027
84.173
84.367
93.600

Balance at
July1,2012

84.048

93.778
12.112

U.S. Dept Of Agriculture Passed
Through State Dept. of Education
School Breakfast Program
10.553
School Lunch Program
10.555
Passed Through State Dept.
Of Human Services
Commodities
10.550
Total U.S. Dept. Of Agriculture
Total Expenditures of
Federal Awards

- 25 -

92,626*
305,000*

28,588*
426,214

$1,208,741

$ 1,149,413

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
SCHEDULE OF FEDERAL AWARDS EXPENDED
FOR THE YEAR ENDED JUNE 30, 2013
Note 1 - * Represents federal share of expenditures only.
Note 2 - Commodities received in the amount of $28,588 were of a nonmonetary nature and therefore the total
revenue does not agree with the financial statements by this amount.
Note 3 - Statement is prepared on regulatory basis of accounting used by District.
The accompanying notes are an integral part of this statement.

- 26 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
STATEMENT OF STATUTORY, FIDELITY, AND HONESTY BONDS
FOR THE YEAR ENDED JUNE 30, 2013

Bond
Type
Surety/Position

Bonding
Company
Ohio Casualty

Bond
Number
5081371

Amount
$

100,000

Effective
Date
07/01/12 - 06/30/13

The surety covers all positions required to be bonded at $100,000 each.

- 27 -

INDEPENDENT AUDITOR’S 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
Mannford School District No. I-3
Creek County
Mannford, Oklahoma
I 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 accompanying basic financial statements - regulatory basis
of the governmental activities, each major fund, and the aggregate remaining
fund information of Mannford School District No. I-3, Creek County, Oklahoma
(District) as of and for the year ended June 30, 2013, and the related notes to
the financial statements, which collectively comprise the District’s financial
statements, and have issued my report thereon dated February 10, 2014which was
adverse with respect to the presentation of the financial statements in
conformity with accounting principles generally accepted in the United States of
America because the presentation followed the regulatory basis of accounting for
Oklahoma school districts and did not conform to the presentation requirements
of the Governmental Accounting Standards Board. The report did not include the
General Fixed Assets Account Group.
Internal Control Over Financial Reporting
In planning and performing my audit, I considered the District’s internal
control over financial reporting (internal control) to determine the audit
procedures that are appropriate in the circumstances for the purpose of
expressing my opinion on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the District’s internal control
over financial reporting.
Accordingly, I do not express an opinion on the
effectiveness of the District’s internal control over financial reporting.
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 combination of deficiencies, in
internal control such that there is 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.
My 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 deficiencies, significant deficiencies or
material weaknesses. Given these limitations, during my audit I did not identify
any deficiencies in internal control that I consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
- 28 -

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial
statements are free of material misstatement, I 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 my audit, and accordingly,
I do not express such an opinion. The results of my 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 my testing of
internal control 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 purpose.
Sincerely,

Ralph Osborn
Ralph Osborn
Certified Public Accountant
Bristow, Oklahoma
February 10, 2014

- 29 -

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH
MAJOR PROGRAM AND ON INTERNAL CONTROL
OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133

To the Honorable Board of Education
Independent School District No. I-3
Mannford, Creek County, Oklahoma
Report on Compliance for Each Major Federal Program
I have audited Mannford School District No. I-3, Creek County, Oklahoma (the
District) compliance with the types of compliance requirements described in the
OMB Circular A-133 Compliance Supplement that could have a direct and material
effect on each of the District’s major federal programs for the year ended June 30,
2013.
The District’s major federal programs are identified in the summary of
auditor’s results section of the accompanying schedule of findings and questioned
cost.
Management’s Responsibility
Management is responsible for compliance with the requirements of
regulations, contracts, and grants applicable to its federal programs.

laws,

Auditor’s Responsibility
My responsibility is to express an opinion on compliance for each of the District’s
major federal programs based on my audit of the types of compliance requirements
referred to above. I conducted my 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 OMB Circular A-133 Audits of
States, Local Governments, and Non-Profit Organizations. Those standards and OMB
Circular A-133 require that I plan and perform the audit to obtain reasonable
assurance about whether noncompliance with the types of compliance requirements
referred to above that could have a direct and material effect on a major federal
program occurred. An audit includes examining, on a test basis, evidence about the
District’s compliance with those requirements and performing such other procedures
as I considered necessary in the circumstance.
I believe that my audit provides a reasonable basis for my opinion on compliance
for each major federal program.
However, my audit does not provide a legal
determination of the District’s compliance.
Opinion on Each Major Federal Program
In my opinion, Independent School District No. I-3, Creek County, Oklahoma,
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, 2013.

- 30 -

Report on Internal Control Over Compliance
Management of Independent School District No. I-3, Creek County, Oklahoma is
responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above.
In
planning and performing my audit of compliance, I considered the District’s
internal control over compliance with the types of requirements that could have a
direct and material effect on each major federal program to determine the auditing
procedures that are appropriate in the circumstances for the purpose of expressing
an opinion on compliance for each major federal program and to test and report on
internal control over compliance in accordance with OMB Circular A-133, but not for
the purpose of expressing an opinion on the effectiveness of internal control over
compliance.
Accordingly, I do not express an opinion on the effectiveness
Independent School District No. I-3, Creek County, Oklahoma’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 the type of compliance requirement of a federal
program on a timely basis. A material weakness in internal control over compliance
is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility
that material
noncompliance with a type of compliance requirement of a federal program will not
be prevented, or detected and corrected, on a timely basis.
A significant
deficiency in internal control over compliance is a deficiency, or a combination
of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in
internal control over compliance, yet important enough to merit attention by those
charged with governance.
My 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. I did not identify any deficiencies in
internal control over compliance that I 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 OMB Circular A-133.
Accordingly, this report is not suitable for any other purpose.

Ralph Osborn
Ralph Osborn
Certified Public Accountant
Bristow, Oklahoma
February 10, 2014

- 31 -

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2013

Section I - SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of auditor’s report issued:

Qualified on regulatory
basis of accounting

Internal control over financial reporting:
Material weakness(es) identified?
Significant deficiency identified that is
not considered to be material weakness(es)?
Noncompliance material to financial
statements noted?
Federal Awards
Internal control over major programs:
Material Weakness(es) identified?
Significant deficiency identified that is
not considered to be material weakness(es)?
Type of auditor’s report issued on compliance
to major programs:

Yes

None Reported

Yes

None Reported

Unqualified

Any audit findings disclosed that are required
to be reported in accordance with section
510(a) of Circular A-133

Yes

Identification of Major Programs
CFDA Number(s)

Name of Federal Program or Cluster

84.010
84.027

Title I
Flow Through Part B

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

Auditee qualified as low-risk auditee?
Section II - FINANCIAL STATEMENT FINDINGS
There were no items noted.
Section III - FEDERAL AWARD PROGRAM FINDINGS
There were no items noted.

- 32 -

300,000
Yes

MANNFORD SCHOOL DISTRICT NO. I-3
CREEK COUNTY, OKLAHOMA
STATUS OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30, 2013

No items were reported in the prior audit.

- 33 -

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