The accompanying notes to financial statements are an integral part of these statements.

The accompanying notes to financial statements are an integral part of these statements.

The accompanying notes to financial statements are an integral part of these statements.

Total fund balances - governmental funds $ 52,620,313

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and therefore are not reported as
assets in governmental funds:

• Cost of the assets $4245,560,069
• Accumulated depreciation $(116,242,752)
• Totals $129,317,317
• Grant revenue that is unavailable is recorded as a deferred inflow in the governmental funds, but is not deferred on the statement of net position. $954,898
• Deferred outflows of resources related to pensions and OPEB are applicable to future periods, and therefore, are not reported in the governmental funds. $86,602,075
• Deferred inflows of resources related to pensions and OPEB are applicable to future periods, and therefore, are not reported in the governmental funds. $(49,202,177)
• Long term liabilities, including bonds and notes payable, pension and OPEB liabilities and compensated absences are not due and payable in the current period and therefore are not reported in the funds. $(82,212,888)
• Deferred charge on refunding do not relate to current financial resources and are not reported in the governmental funds. $364,569
• Accrued interest on long-term debt is not due and payable in the current period and therefore is not reported in the funds. $(298,114)
• Total net position - governmental activities $ 138,145,993

The accompanying notes to financial statements are an integral part of these statements.

• Total net change in fund balances - governmental funds $ (2,646,389)
• Amounts reported for governmental activities in the statement of activities are different because:
  • Capital outlays $6,647,258
  • Depreciation expense $(7,060,817)
  • Net book value of assets disposed $(16,700)
  • Totaling $(430,259)
• In the statement of activities, grant revenue is recognized when earned. In the governmental funds, however, grant revenue is recognized when measurable and available for use. $857,125
• Debt issued provides current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces longterm liabilities in the statement of net position
  • Debt issued: 
    • Contracts that transfer ownership $(3,714,154)
  • Principal repaid:
    • General obligation debt $16,065,000
    • Contracts that transfer ownership $2,505,143
    • Totaling $14,855,989
• Governmental funds report debt premiums and discounts as other financing sources (uses). However, in the statement of net position, these are deferred and reported as additions to or deductions from long-term debt. These are allocated over the period the debt is outstanding in the statement of activities and are reported as interest
  • Amortization of premium $395,720
  • Deferred charge on refunding $(205,070)
  • Totaling $190,650
• Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.
  • Vested compensated absences $1,301,716
  • Net pension liability $(56,474,863)
  • Total pension liability $88,007
  • Net OPEB liability $976,325
  • Accrued interest on debt $122,240
  • Deferred outflows of resources related to pensions $15,608,877
  • Deferred inflows of resources related to pensions $34,595,382
  • Deferred outflows of resources related to OPEB $29,511
  • Deferred inflows of resources related to OPEB $(74,676)
  • Totaling $(3,827,481)
• Change in net position of governmental activities $ 8,999,635

The accompanying notes to financial statements are an integral part of these statements.

Summary of Significant Accounting Policies

The accounting policies of the School District of Janesville, Wisconsin (“District”) conform to accounting principles generally accepted in the United States of America as applicable to governmental units (“GAAP”). The accepted standard-setting body for establishing governmental accounting and financial reporting principles is the Governmental Accounting Standards Board (“GASB”).

Reporting Entity

This report includes all of the funds of the District. The reporting entity for the District consists of the primary government and its component units. Component units are legally separate organizations for which the primary government is financially accountable or other organizations for which the nature and significance of their relationship with the primary government are such that their exclusion would cause the reporting entity's financial statements to be misleading. The primary government is financially accountable if (1) it appoints a voting majority of the organization's governing body and it is able to impose its will on that organization, (2) it appoints a voting majority of the organization's governing body and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government, (3) the organization is fiscally dependent on and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the
primary government. Certain legally separate, tax exempt organizations should also be reported as a component unit if all of the following criteria are met: (1) the economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the
primary government, its component units or its constituents; (2) the primary government or its component units, is entitled to, or has the ability to access, a majority of the economic resources received or held by the separate organization; and (3) the economic resources received or held by an individual organization that the primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to the primary government.

Component units are reported using one of three methods, discrete presentation, blended, or fiduciary. Generally, component units should be discretely presented in a separate column in the financial statements. A component unit should be reported as part of the primary government using the blending method if it meets any one of the following criteria: (1) the primary government and the component unit have substantively the same governing body and a financial benefit or burden relationship exists, (2) the primary government and the component unit have substantively the same governing body and management of the primary government has operational responsibility for the component unit, (3) the component unit serves or benefits, exclusively or
almost exclusively, the primary government rather than its citizens or (4) the total debt of the component unit will be paid entirely or almost entirely from resources of the primary government. Blended Component Unit

Rock University High School is a charter school organized pursuant to §118.40(2m)(a), Wis. Stat., which authorizes the District to enter into a contract to operate a charter school within the District. Rock University High School’s general fund is reported as a special revenue fund. Its other special revenues fund is accounted for within the District’s other special revenues fund. Separately issued financial statements of the Rock University High School
may be obtained from the District or Rock University High School. 

District-Wide and Fund Financial Statements

District-Wide Financial Statements

The statement of net position and statement of activities display information about the reporting government as a whole. They include all funds of the reporting entity except for fiduciary funds. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange revenues. Likewise, the primary government is reported separately from certain legally separate component units for which
the primary government is financially accountable. 

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. The District does not allocate indirect expenses to functions in the statement of activities. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported as general revenues. Internally dedicated resources are reported as general revenues rather than as program revenues.

Fund Financial Statements

Financial statements of the District are organized into funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts, which constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position/fund balance, revenues, and expenditures/expenses.

Funds are organized as major funds or nonmajor funds within the governmental statements. An emphasis is placed on major funds within the governmental category. A fund is considered major if it is the primary operating fund of the District or meets the following criteria:

• a. Total assets/deferred outflows of resources, liabilities/deferred inflows of resources,revenues or expenditures/expenses of that individual governmental fund are at least 10 percent of the corresponding total for all funds of that category or type, and
• b. In addition, any other governmental fund that the District believes is particularly important to financial statement users may be reported as a major fund. 

Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the district-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements.

The District reports the following major governmental funds:

• General Fund: General Fund accounts for the District's primary operating activities. It is used to account for and report all financial resources except those accounted for and reported in another fund.  
• Special Revenue Fund: Special Education Fund is used to account for and report grants and local revenues used to provide special education services to district students.
• Debt Service Fund: Debt Service Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditure for the payment of general long-term debt principal, interest and related costs.
• Capital Projects Funds Capital Improvement Trust Fund - Capital Improvement Trust Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
• Capital Projects Fund - Capital Project Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. This Fund is utilized for capital projects related to the 2020 capital referendum.

The District reports the following nonmajor governmental funds:

• Special Revenue Funds Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes (other than debt service or capital projects).
• Food Service Fund
• Rock University High School General Fund 
• Community Service Fund
• Rock University High School Gifts Fund
• Gifts Fund

In addition, the District reports the following fund types:

• Employee Benefit Trust Funds Employee Benefit Trust Fund is used to account for and report resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, other postemployment benefit plans or other employee benefit plans.
• Post-Employment Benefits 

Custodial Fund

• Custodial Fund is used to report fiduciary activities not required to be reported in pension and other post-employment benefit trust funds, investment trust funds, or private-purpose trust funds.
• Athletic Conference

Measurement Focus, Basis of Accounting and Financial Statement Presentation 

District-Wide Financial Statements The district-wide statement of net position and statement of activities are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Property taxes are recognized as revenues in the year for which they are levied. Taxes receivable for the following year are recorded as receivables and deferred inflows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider are met. Special assessments are recorded as revenue when earned. Unbilled receivables are recorded as revenues when services are provided.

As a general rule, the effect of interfund activity has been eliminated from the district-wide financial statements.

Fund Financial Statements

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recorded when they are both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on long-term debt, claims, judgments, compensated absences and pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available financial resources.

Property taxes are recorded in the year levied as receivables and revenue.

Intergovernmental aids and grants are recognized as revenues in the period the District is entitled the resources and the amounts are available. Amounts owed to the District which are not available are recorded as receivables and unavailable revenues. Amounts received before eligibility requirements (excluding time requirements) are met are recorded as liabilities. Amounts received in advance of meeting time requirements are recorded as deferred inflows.

Revenues susceptible to accrual include property taxes, miscellaneous taxes, grant revenues, charges for services, and interest. Other general revenues such as student fees, recreation fees, and miscellaneous revenues are recognized when received in cash or when measurable and available under the criteria described above. Charges for special education services are not reduced by anticipated state special education aid entitlement.

Fiduciary Funds

Fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as described previously in this note. 

All Financial Statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the
reporting period. Actual results could differ from those estimates.

Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources, and Net Position or Equity Deposits and Investments

Investment of District funds is restricted by Wisconsin Statutes. Available investments are limited to:

• a. Time deposits in any credit union, bank, savings bank, or trust company.
• b. Bonds or securities of any county, city, drainage district, technical college district, village, town, or school district of the State. Also, bonds issued by a local exposition district, a local professional baseball park district, a local professional football stadium district, a local cultural arts district, the University of Wisconsin Hospitals and Clinics Authority, or the Wisconsin Aerospace Authority.
• c. Bonds or securities issued or guaranteed by the federal government.
• d. The local government investment pool.
• e. Any security maturing in seven years or less and having the highest or second highest rating category of a nationally recognized rating agency.
• f. Securities of an open-end management investment company or investment trust, subject to various conditions and investment options.
• g. Repurchase agreements with public depositories, with certain conditions. 

Investment of most trust funds is regulated by Chapter 881 of the Wisconsin Statutes. This section gives broad authority to use such funds to acquire various kinds of investments including stocks, bonds, and debentures.

The District has adopted an investment policy. That policy follows the state statute for allowable investments.

No policy exists for the following risks:

• Custodial credit risk
• Interest rate risk
• Concentration of credit risk

Investments are stated at fair value, which is the amount at which an investment could be exchanged in a current transaction between willing parties. Fair values are based on methods and inputs as outlined in Note 3. No investments are reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the operating statement as increases or decreases in investment income. Investment income on commingled
investments of differing funds is allocated based on average balances. The difference between the bank statement balance and carrying value is due to outstanding checks and/or deposits in transit.

PMA Financial Network, Inc. is the administrator for the Wisconsin Investment Series Cooperative (WISC). The investment manager for WISC is PMA Financial Network, Inc. The WISC is not registered with the Securities and Exchange Commission but invests its funds in accordance with applicable Wisconsin statutes. The WISC has characteristics of a mutual fund and accordingly, reports the value of its underlying assets at fair value. As June 30,
2023, the District's share of the WISC's assets was substantially equal to the amount reported.

See Note 3 for further information.

Receivables

General accounts receivable have been adjusted for all known uncollectable accounts. No allowance is necessary at year end.

Property taxes are levied by the District Board of Education in October or November based on the assessed values as of the prior January 1.

The aggregate amount of property taxes to be levied for school purposes is determined according to the provisions of Chapter 120 of the Wisconsin Statutes. Property taxes levied by the District are certified to local taxing districts for collection. Property taxes attach as an enforceable item as of January 1.

Property taxes are recognized in the fiscal year levied. The District considers all taxes as due prior to the end of the fiscal year. Full receipt of the entire levy is assured within 60 days of the District's fiscal year end.

Property taxes are collected by the local taxing units until January 31. Real estate tax collections after that date are made by the applicable county, which assumes all responsibility for delinquent real estate taxes.

• Property tax calendar - 2022 tax roll:
  • Lien date and levy date December 2022
  • Tax bills mailed December 2022
  • Payment in full, or January 31, 2023
  • First installment due January 31, 2023
  • Second installment due July 31, 2023

During the course of operations, transactions occur between individual funds that may result in amounts owed between funds. Short-term interfund loans are reported as "due to and from other funds." Long-term interfund loans (noncurrent portion) are reported as "advances from and to other funds." Interfund receivables and payables between funds within governmental activities are eliminated in the statement of net position.

Inventories and Prepaid Expenditures

Governmental fund inventories, if material, are recorded at cost based on the FIFO method using the purchases method of accounting.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid expenditures/expenses in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures when consumed rather than when purchased.

Capital Assets

Government-Wide Financial Statements

Capital assets, which include property, plant, and equipment, are reported in the government-wide financial statements. Capital assets are defined by the District as assets with an initial cost of more than $5,000 and an estimated useful life in excess of one year. All capital assets are valued at historical cost or estimated historical cost if actual amounts are unavailable. Donated capital assets are recorded at their estimated acquisition value at the date of donation.

Depreciation of all exhaustible capital assets is recorded as an allocated expense in the statement of activities, with accumulated depreciation reflected in the statement of net position. Depreciation is provided over the assets' estimated useful lives using the straight-line method. The range of estimated useful lives by type of asset is as follows: 

• Buildings and building
  • improvements 20-100 Years
  • Site improvements 20 Years
  • Furniture and equipment 5 -20 Years

Fund Financial Statements

In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. 

Deferred Outflows of Resources

A deferred outflow of resources represents a consumption of net assets that applies to a future period and will not be recognized as an outflow of resources (expense/expenditure) until that future time.

A deferred charge on refunding arises from the advance refunding of debt. The difference between the cost of the securities placed in trust for future payments of the refunded debt and the net carrying value of that debt is deferred and amortized as a component of interest expense over the shorter of the term of the refunding issue or the original term of the refunded debt. The unamortized amount is reported as a deferred outflow of resources in the
government-wide and proprietary fund financial statements.

Compensated Absences

Under terms of employment, employees are granted vacations in varying amounts. Only benefits considered to be vested are disclosed in these statements. All vested vacation and sick leave pay is accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements, and are payable with expendable resources.

The District's policy does not provide school year employees with paid vacations. However, year-round employees are provided paid vacation days. Employees are paid for their unused vacation days at retirement. Administrators may cash in up to one week's vacation annually. For staff hired prior to July 1, 2015, with a minimum of 10 years of full-time service in the District and at least age 55, all unused sick leave accumulated upon retirement is converted to a dollar amount of $147 per day. The total can be applied to additional months of coverage at the full premium rate at the time of retirement. Sick leave days accrued prior to July 1, 2015, can only be used to purchase additional months of health and prescription drug coverage. These days will not be converted for any other benefit at the time of early retirement. Sick leave days accrued after July 1, 2015, will be converted to a dollar amount of $147 per day and placed into a tax-sheltered annuity at the time of early retirement.

For staff hired after July 1, 2015, with a minimum of 10 years of full-time service in the District and at least age 55, all unused sick leave accumulated upon retirement is converted to a dollar amount of $147 per day to be applied to a 457 deferred compensation plan payable at retirement.

Payments for vacation and sick leave will be made at rates in effect when the benefits are used. Accumulated vacation and sick leave liabilities at June 30, 2023, are determined on the basis of current salary rates and include salary related payments.

Long-Term Obligations

All long-term obligations to be repaid from governmental resources are reported as liabilities in the government-wide statements. The long-term obligations consist primarily of bonds payable, contracts that transfer ownership, net pension obligation, other postemployment benefit obligations, and accrued compensated absences. 

Long-term obligations for governmental funds are not reported as liabilities in the fund financial statements. The face value of debts (plus any premiums) is reported as other financing sources and payments of principal and interest are reported as expenditures. For the district-wide statements, bond premiums and discounts are amortized over the life of the issue using the straight-line method. The balance at year end is shown as an increase or
decrease in the liability section of the statement of net position.

Deferred Inflows of Resources

A deferred inflow of resources represents an acquisition of net assets that applies to a future period and therefore will not be recognized as an inflow of resources (revenue) until that future time.

Equity Classifications

Government-Wide Statements

Equity is classified as net position and displayed in three components:

a. Net Investment in Capital Assets - Consists of capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the
outstanding balances (excluding unspent debt proceeds) of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition,
construction, or improvement of those assets. 

b. Restricted Net Position - Consists of net position with constraints placed on their use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or, 2) law through constitutional provisions or enabling legislation.

c. Unrestricted Net Position - All other net positions that do not meet the definitions of "restricted" or "net investment in capital assets." When both restricted and unrestricted resources are available for use, it is the District's policy to use restricted resources first, then unrestricted resources as they are needed.

Fund Statements

Governmental fund balances are displayed as follows:

• a. Nonspendable - Includes fund balance amounts that cannot be spent either because they are not in spendable form or because legal or contractual requirements require them to be maintained intact. 
• b. Restricted - Consists of fund balances with constraints placed on their use either by 1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments or 2) law through constitutional provisions or enabling legislation.
• c. Committed - Includes fund balance amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision-making authority. Fund balance amounts are committed through a formal action (resolution) of the District Board of Education. This formal action must occur prior to the end of the reporting period, but the amount of the commitment, which will be subject to the constraints, may be determined in the subsequent period. Any changes to the constraints imposed require the same formal action of the District Board of Education that originally created the commitment.
• d. Assigned - Includes spendable fund balance amounts that are intended to be used for specific purposes that do not meet the criteria to be classified as restricted or committed. The District has adopted a financial policy authorizing the Chief Financial Officer to assign amounts for a specific purpose. Assignments may take place after the end of the reporting period. 
• e. Unassigned - Includes residual positive fund balance within the general fund which has not been classified within the other above-mentioned categories. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those purposes.

The District policy on general fund balance follows the following guidelines: (1) to maintain an assigned general fund balance of 17-23 percent of general and special education fund budgeted expenditures for the ensuing fiscal year, excluding claims expenses for self-funded insurance, (2) to maintain a self-funded dental plan claim stabilization reserve of not less than 10 percent of the expected claims cost for the ensuing fiscal year and (3) to limit the use of unassigned fund balance to funding the district's Other Post-Employment Benefits (OPEB) liability, reducing the district's property
tax levy or to one-time expenditures such as the start-up cost of a new program or one-time cost of a capital expenditure. As such, the district's general fund balance has been classified in accordance with this policy. The District will generally use restricted amounts before unrestricted amounts when doing so does not result in loss of general state aid. As of June 30, 2023, the district is compliance with their fund balance policy.
See Note 3 for further information.

Fiduciary fund net position is classified as restricted for other post-employment benefits and athletic conference on the statement of fiduciary net position. 

Pension

For purposes of measuring the net pension liability (asset), deferred outflows of resources, and deferred inflows of resources related to pensions and pension expense, information about the fiduciary net position of the Wisconsin Retirement System (“WRS”) and additions to/deductions from WRS' fiduciary net position have been determined on the same basis as they are reported by WRS. For this purpose, benefit payments (including refunds of
employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Postemployment Benefits Other Than Pensions (OPEB)

For purposes of measuring the net OPEB liability, deferred outflows of resources, and deferred inflows of resources related to OPEB and OPEB expense, information about the fiduciary net position of the District OPEB Plan and additions to/deductions from the District OPEB Plan's fiduciary net position have been determined on the same basis as they are reported by the District OPEB Plan. For this purpose, the District OPEB Plan recognizes
benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost.

Adoption of New Accounting Guidance

As of July 1, 2022, the District implemented GASB Statement No. 96, Subscription Based   Information Technology Arrangements. This Statement establishes new criteria for identifying and classifying certain technology subscriptions and similar arrangements. Upon review of the District’s arrangements, the District determined there were no material subscription based information technology arrangements, as defined by the Statement.

As of July 1, 2022, the District implemented GASB Statement No. 101, Compensated Absences. This Statement updates the recognition and measurement guidance for compensated absences. The clarification provided in this Statement was utilized in preparing the latest Other Post
Employment Benefits (OPEB) valuation. There is no impact to the beginning government-wide net position. See Note 3 for additional
information.

Budgetary Information

A budget has been adopted for the general fund, special education fund, debt service fund, capital improvement trust fund, capital projects fund, food service fund, and community service fund. A budget has not been formally adopted for other special revenues fund. Wisconsin Statute 65.90 requires that an annual budget be adopted for all governmental funds.

Limitations on the District's Revenues

Wisconsin statutes limit the amount of revenues that school districts may derive from general school aids and property taxes. The annual revenue limit adjustment from these sources is determined by the legislature.

The limitation does not apply to revenues needed for the payment of any general obligation debt service (including refinanced debt) authorized by either of the following:

• A resolution of the school board or by a referendum prior to August 12, 1993.
• A referendum on or after August 12, 1993.

Deposits and Investments

Deposits in each local and area bank are insured by the FDIC in the amount of $250,000 for time and savings accounts (including NOW accounts) and $250,000 for demand deposit accounts (interest-bearing and noninterest-bearing). In addition, if deposits are held in an institution outside of the state in which the government is located, insured amounts are further limited to a total of $250,000 for the combined amount of all deposit accounts.

Bank accounts are also insured by the State Deposit Guarantee Fund in the amount of $400,000. However, due to the nature of this fund, recovery of material principal losses may not be significant to individual municipalities. This coverage has not been considered in computing custodial credit risk.

The District categorizes its fair value measurements within the fair value hierarchy established by GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the asset.  Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. 

The valuation methods for recurring fair value measurements are as follows:

Market Approach - uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities

Custodial Credit Risk

Deposits

Custodial credit risk is the risk that in the event of a financial institution failure, the District's deposits may not be returned to the District.

As of June 30, 2023, the following deposit balances were exposed to custodial credit risk:

• Uninsured and uncollateralized $ 42,674,844
• Uninsured and collateral held by the pledging financial institution's trust department or agent not in the District's name6,441,118
• Total $ 49,115,962

Investments

For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. 

The District does not have any investments exposed to custodial credit risk.

Interest Rate Risk

Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investment.

See Note 1 for further information on deposit and investment policies.

Receivables

All receivables on the balance sheet are expected to be collected within one year.

Capital Assets

The Construction-in-progress reduction was a transfer to Buildings and improvements.

Interfund Receivables/Payables and Transfers

All amounts are due within one year.

The principal purpose of these interfund receivables and payables is for operations.

Transfers

Generally, transfers are used to (1) move revenues from the fund that collects them to the fund that the budget requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

The above transfer to the special education fund uses unrestricted revenues collected in one fund to finance various programs accounted for in other funds in accordance with budgetary authorizations and Wisconsin Department of Public Instruction directives.

Long-Term Obligations

In accordance with Wisconsin Statutes, total general obligation indebtedness of the District may not exceed 10 percent of the equalized value of taxable property within the District's jurisdiction. The 2022 equalized valuation of the District, as certified by the Wisconsin Department of Revenue in October 2022, is $6,765,546,218. Total general obligation debt outstanding at year end was $27,235,000.

General Obligation Debt

All general obligation debt payable is backed by the full faith and credit of the District. Notes and bonds in the governmental funds will be retired by future property tax levies accumulated by the debt service fund.

Debt service requirements to maturity are as follows:

Contracts That Transfer Ownership

The District recognizes financing arrangements that do not meet the requirements of a lease according to GASB 87 as contracts that transfer ownership.

Other Debt Information

Estimated payments of compensated absences, pensions, and other postemployment benefits obligation are not included in the debt service requirement schedules. The compensated absences, pensions, and other postemployment benefits obligation attributable to governmental activities will be liquidated primarily by the general fund.

Net Position/Fund Balances

Employees' Retirement System

Plan Description

The WRS is a cost-sharing, multiple-employer, defined-benefit pension plan. WRS benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. Benefit terms may only be modified by the legislature. WRS is administered by the Wisconsin Department of Employee Trust Funds (“ETF”). WRS provides coverage to all eligible State of Wisconsin, local government, and other public employees. All employees, initially employed by a participating WRS employer on or after July 1, 2011, expected to work at least 1,200 hours per year (880 hours for teachers and school district educational support employees), and expected to be employed for at least one year from employee’s date of hire are eligible to participate in the WRS.

ETF issues a standalone Annual Comprehensive Financial Report (ACFR), which can be found at
https://etf.wi.gov/about-etf/reports-and-studies/financial-reports-and-statements.

Additionally, ETF issued a standalone Wisconsin Retirement System Financial Report, which can also be found using the link above.

Vesting

For employees beginning participation on or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a retirement annuity. Participants employed prior to 1990 and on or after April 24, 1998, and prior to July 1, 2011, are immediately vested. Participants who initially became WRS eligible on or after July 1, 2011, must have five years of creditable service to be vested.

Benefits Provided

Employees who retire at or after age 65 (54 for protective occupation employees, 62 for elected officials and executive service retirement participants, if hired on or before December 31, 2016) are entitled to retirement benefit based on a formula factor, their average earnings, and creditable service.

Final average earnings is the average of the participant's three highest annual earnings period. Creditable service includes current service and prior service for which a participant received earnings and made contributions as required. Creditable service also includes creditable military service. The retirement benefit will be calculated as a money purchase benefit based on the employee's contributions plus matching employer's contributions, with
interest, if that benefit is higher than the formula benefit.

Vested participants may retire at age 55 (50 for protective occupations) and receive an actuarially-reduced benefit. Participants terminating covered employment prior to eligibility for an annuity may either receive employee-required contributions plus interest as a separation benefit or leave contributions on deposit and defer application until eligible to receive a retirement benefit.

The WRS also provides death and disability benefits for employees.

Post-Retirement Adjustments

The ETF Board may periodically adjust annuity payments from the retirement system based on annual investment performance in accordance with §40.27, Wis. Stat. An increase (or decrease) in annuity payments may result when investment gains (losses), together with other actuarial experience factors, create a surplus (shortfall) in the reserves, as determined by the system’s consulting actuary. Annuity increases are not based on cost of living or other similar factors. For Core annuities, decreases may be applied only to previously granted increases. By law, Core annuities cannot be reduced to an amount below the original, guaranteed amount (the “floor”) set at retirement. 

Contributions

Required contributions are determined by an annual actuarial valuation in accordance with Chapter 40 of the Wisconsin Statutes. The employee required contribution is one-half of the actuarially determined contribution rate for General category employees, including Teachers, Executives, and Elected Officials. Starting on January 1, 2016, the Executives and Elected Officials category was merged into the General Employee category. Required contributions for protective employees are the same rate as general employees. Employers are required to contribute the remainder of the actuarially determined contribution rate. The employer may not pay the employee required contribution unless provided for by an existing collective
bargaining agreement. 

During the reporting period, the WRS recognized $4,866,926 in contributions from the District.

Pension Liability, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

On June 30, 2023, the District reported a liability of $22,133,379 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2021, rolled forward to December 31, 2022. No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The District’s proportion of the net pension liability was based on the District’s share of contributions to the pension plan relative to the contributions of all participating employers. On December 31, 2022, the District’s proportion was 0.41779195%, which was a decrease of 0.00827133% from its proportion measured as of December 31, 2021.

For the year ended June 30, 2023, the District recognized pension expense of $11,063,083.

On June 30, 2023, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

The amount reported as deferred outflows related to pension resulting from the WRS Employer’s contributions subsequent to the measurement date ($3,295,104) will be recognized as a reduction of the net pension liability (asset) in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and (deferred inflows of resources) related to pension will be recognized in pension expense as follows:

Actuarial Assumptions

The total pension liability in the December 31, 2022, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

• Actuarial Valuation Date: December 31, 2021
• Measurement Date of Net Pension Liability (Asset): December 31, 2022
• Experience Study
  • January 1, 2018 - December 31, 2020
  • Published November 19, 2021
• Actuarial Cost Method: Entry Age Normal
• Asset Valuation Method: Fair Value
• Long-Term Expected Rate of Return: 6.8%
• Discount Rate: 6.8%
• Salary Increases:
  • Wage Inflation 3.0%
  • Seniority/Merit 0.1% - 5.6%
• Mortality: 2020 WRS Experience Mortality Table
• Post-Retirement Adjustments*: 1.7%

* No post-retirement adjustment is guaranteed. Actual adjustments are based on recognized investment return, actuarial experience and other factors. 1.7 percent is the assumed annual adjustment based on the investment return assumption and the post-retirement discount rate.

Actuarial assumptions are based upon an experience study conducted in 2021 that covered a three-year period from January 1, 2018 to December 31, 2020. The Total Pension Liability for December 31, 2022 is based upon a roll-forward of the liability calculated from the December 31, 2021 actuarial valuation.

Long-Term Expected Return on Plan Assets

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 geometric real rates of return for each major asset class are summarized in the following table:

1Asset Allocations are managed within established ranges; target percentages may differ from actual monthly allocations 2New England Pension Consultants Long Term US CPI (Inflation) Forecast: 2.5% 3The investment policy used for the Core Fund involves reducing equity exposure by
leveraging lower volatility assets, such as fixed income securities. This results in an asset allocation beyond 100%. Currently, an asset allocation target of 15% policy leverage is used, subject to an allowable range of up to 20%.

Single Discount Rate

A single discount rate of 6.8% was used to measure the Total Pension Liability for the current and prior year. The discount rate is based on the expected rate of return on pension plan investments of 6.8% and a municipal bond rate of 4.05% (Source: Fixed-income municipal bonds with 20 years to maturity that include only federally tax-exempt municipal bonds as reported in Fidelity Index’s “20-year Municipal GO AA Index” as of December 31, 2022. In describing this index, Fidelity notes that the Municipal Curves are constructed using optionadjusted analytics of a diverse population of over 10,000 tax-exempt securities.). Because of the unique structure of WRS, the 6.8% expected rate of return implies that a dividend of approximately 1.7% will always be paid. For purposes of the single discount rate, it was assumed that the dividend would always be paid. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate.

Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments (including expected dividends) of current plan members. Therefore, the municipal bond rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 

Sensitivity of the District’s Proportionate Share of the Net Pension Liability (Asset) to Changes in the Discount Rate

The following presents the District’s proportionate share of the net pension liability (asset) calculated using the discount rate of 6.80%, as well as what the District’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (5.80 percent) or 1-percentage-point higher (7.80 percent) than the current rate:

Pension Plan Fiduciary Net Position

Detailed information about the pension plan’s fiduciary net position is available in separately issued financial statements available at:
https://etf.wi.gov/about-etf/reports-and-studies/financial-reports-and-statements.

Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to or destruction of assets; errors and omissions; workers compensation; and health care of its employees. All of these risks are covered through the purchase of commercial insurance, with minimal deductibles. Settled claims have not exceeded the commercial coverage in any of the past three years. There were no significant reductions in coverage compared to the prior year.

Commitments and Contingencies

Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. The liability and expenditure for claims and judgments are only reported in governmental funds if it has matured. Claims and judgments are recorded in the government-wide statements and proprietary funds as expenses when the related liabilities are incurred.

From time to time, the District is party to various pending claims and legal proceedings. Although the outcome of such matters cannot be forecasted with certainty, it is the opinion of management and the District’s attorney that the likelihood is remote that any such claims or proceedings will have a material adverse effect on the District's financial position or results of operations. 

The District has received federal and state grants for specific purposes that are subject to review and audit by the grantor agencies. Such audits could lead to requests for reimbursements to the grantor agency for expenditures disallowed under terms of the grants. Management believes such disallowances, if any, would be immaterial.

The District has active construction projects as of June 30, 2023. Work that has been completed on these projects but not yet paid for (including contract retainages) is reflected as accounts payable and expenditures.

The District has the following encumbrances outstanding at year end expected to be honored upon performance by the vendor:

• General Fund $ 3,710,318
• Special Education Fund 1,702
• Other Special Revenues Fund 2,381
• Capital Projects Fund 90,392
• Food Service Fund 276,305

Other Postemployment Benefits

The District provides postemployment health insurance benefits for all eligible employees. Eligibility is based on certain age and service requirements. The benefits are based on contractual agreements with employee groups or employee benefit policies. The District utilizes an employee benefits trust to fund these benefits. The District makes contributions to the trust and the trust pays the benefits to retirees. In some instances, retirees pay a portion of the benefit.

The number of participants currently eligible to receive benefits is 1,988.

General Information About the OPEB Plan

Plan Description

The District's defined benefit OPEB plan, District OPEB Plan, provides OPEB for all regular full-time employees of the District. The District OPEB Plan is a single-employer defined benefit OPEB plan.

Benefits Provided

District OPEB Plan provides medical insurance and life insurance to those employees upon retirement. Retirement may be elected by eligible employees who have attained certain age and service requirements. Generally, staff who qualify for retiree benefits are entitled to a maximum of 36 months of paid health insurance premiums exclusive of sick days conversion or until age 65, whichever occurs first. The District pays the same
contributions as is made on behalf of active employees.

Employees Covered by Benefit Terms

On June 30, 2023, the following employees were covered by the benefit terms: 

• Inactive plan members or beneficiaries
  • currently receiving benefit payments 164
  • Inactive plan members entitled to but not yet
  • receiving benefit payments 869
  • Active plan members 806
  • Total $1,839

Contributions

The funding policy of the plan states that the employer will fund 100 percent of the contributions to the plan as determined by the actuarial valuation, including costs to administer the plan. During the year ended June 30, 2023, the plan recognized $2,650,000 in contributions from the District.

Net OPEB Liability

The District's net OPEB liability was measured as of June 30, 2022, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2022.

Actuarial Assumptions

The total OPEB liability in the June 30, 2022, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

• Inflation 2.50%
• Salary increases 3.00%
• Investment rate of return 3.00%
• Healthcare cost trend rates 7.00% decreasing by 0.10% per year, down to
• 4.50%, and level thereafter

Mortality rates were based on the Wisconsin Retirement System 2020 Mortality Table adjusted for future mortality improvements using the MP-2018 fully generated improvement scale (multiplied 60 percent).

The actuarial assumptions used in the June 30, 2022, valuation were based on the results of an experience study conducted in 2021 based on 2018-20 data.

Discount Rate

The discount rate used to measure the total OPEB liability was 3.00%. The projection of cash flows used to determine the discount rate assumed that District contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position will not be available to make all projected future benefit payments of current plan members. Therefore, a blended rate was used based on the long-term expected rate of return on OPEB plan investments and/or Bond Buyer 20-Bond Go Index was used to determine the total OPEB liability.

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the District, as well as what the District's net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate:

Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates The following presents the net OPEB liability of the District, as well as what the District's net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

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

For the year ended June 30, 2023, the District recognized OPEB expense (revenue) of $1,718,840. On June 30, 2023, the District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Contributions subsequent to the measurement date ($2,650,000) will be recognized as an addition to the net OPEB liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Payable to the OPEB Plan

On June 30, 2023, the District reported a payable of $2,650,000 for the outstanding amount of contributions to District OPEB Plan required for the year ended June 30, 2023.

Effect of New Accounting Standards on Current-Period Financial Statements

The Governmental Accounting Standards Board (GASB) has approved the following:

• Statement No. 100, Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62

When they become effective, application of these standards may restate portions of these financial statements.

See accompanying notes to required supplementary information.

Notes to Schedule:The District is required to present the last ten fiscal years data. However, standards allow the District to present as many years as are available until ten fiscal years are presented

Notes to Schedule:

Most-recent valuation date: June 30, 2022
Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported.

Methods and assumptions used to determine contribution rates:

• Actuarial cost method Entry age normal
• Amortization method Level percentage
• Amortization period 20 years
• Asset valuation method Market value
• Inflation 2.50%
• Healthcare cost trend rates 7.00% decreasing by 0.10% per year down to 4.50% and level thereafter
• Investment rate of return 3.00%
• Retirement age Based on an experience study conducted in 2021 using Wisconsin Retirement System (WRS) experience from 2018-20
• Mortality Wisconsin Retirement System 2020 Experience Tables for Active Employees and Healthy Retirees projected with mortality improvements using the fully generational MP-2021 projection scale from a base year of 2010

The District is required to present the last ten fiscal years data. However, standards allow the District to present as many years as are available until ten fiscal years are presented.

See accompanying notes to required supplementary information.

1. Budgetary Information

   1. Budgetary information is derived from the annual operating budget and is presented using generally accepted accounting principles and the modified accrual basis of accounting. Budgets are adopted for all governmental funds except the other special revenues fund.
   2. Budgets are adopted at the two-digit sub-function level in the general fund and at the first-digitfunction level for all other funds.

2. Wisconsin Retirement System Pension

   • The amounts presented for each fiscal year were determined as of the calendar year-end that occurred within the fiscal year.
   • Changes of benefit terms. There were no changes of benefit terms for any participating employerin WRS.
   • Changes of assumptions.
     • Lowering the long-term expected rate of return from 7.0% to 6.8%
     • Lowering the discount rate from 7.0% to 6.8%
     • Lowering the price inflation rate from 2.5% to 2.4%
     • Lowering the post-retirement adjustments from 1.9% to 1.7%
     • Mortality assumptions were changed to reflect updated trends by transitioning from the Wisconsin 2018 Mortality Table to the 2020 WRS Experience Mortality Table

The District is required to present the last ten fiscal years data. However, the standards allow the District to present as many years as are available until ten fiscal years are presented.

Operating Activity: General administration - wages and benefits $ 63,197

Notes to Schedule: This schedule reports the costs incurred by the District while fulfilling its duties as a charter school authorizer, pursuant to Chapter 118 of Wisconsin Statutes.
 

To the Board of Education of School District of Janesville

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 (Government Auditing Standards), the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of School District of Janesville (the District), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the District's basic financial statements, and have issued our report thereon dated December 15, 2023.

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the District's internal control over financial reporting (internal control) as a basis for designing 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 the District's internal control. Accordingly, we do not express an opinion on the effectiveness of the District'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 or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District'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 financial statements. 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.

Baker Tilly US, LLP, trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2023 Baker Tilly US, LLP

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 purpose. 

Milwaukee, Wisconsin
December 15, 2023

Independent Auditors' Report 

To the Board of Education of
School District of Janesville
Report on Compliance for Each Major Federal and Major State Program

Opinion on Each Major Federal and Major State Program

We have audited School District of Janesville's (the District) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement and the State Single Audit Guidelines (the Guidelines) that could have a direct and material effect on each of the District's major federal and major state programs for the year ended June 30, 2023. The District's major federal and major state programs are identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs.

In our opinion, the District complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal and major state programs for the year ended June 30, 2023. 

Basis for Opinion on Each Major Federal and Major State Program

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); 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); and the Guidelines. Our responsibilities under those standards, the Uniform Guidance, and the Guidelines are further described in the Auditors' Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal and major state program. Our audit does not provide a legal determination of the District's compliance with the compliance requirements referred to above. 

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the District's federal and state programs.

Baker Tilly US, LLP, trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members of which
are separate and independent legal entities. © 2023 Baker Tilly US, LLP

Auditors' Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the District's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, the Uniform Guidance, and the Guidelines will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the District's compliance with the requirements of each major federal and major state program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, the Uniform Guidance, and the Guidelines, we

• 􀀄 exercise professional judgment and maintain professional skepticism throughout the audit.
• 􀀄 identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the District's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. 
• 􀀄 obtain an understanding of the District's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance and the Guidelines, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on 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 or state 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 or state 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 or state 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 Auditors' Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

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 and the Guidelines. Accordingly, this report is not suitable for any other purpose.

See accompanying notes to schedules of expenditures of federal and state awards.

See accompanying notes to schedules of expenditures of federal and state awards.

1. Basis of Presentation

   • The accompanying schedules of expenditures of federal and state awards (“Schedules”) include the federal and state award activity of the School District of Janesville (“District”) under programs of the federal and state government for the year ended June 30, 2023. The information in these schedules is presented in accordance with the 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) and the State Single Audit Guidelines.
   • Because the Schedules presents only a selected portion of the operations of the District, they are not intended to and do not present the financial position or changes in net position of the District. 

2. Summary of Significant Accounting Policies

   • Expenditures presented on the Schedules are reported on the modified accrual basis of accounting. Expenditures are recorded when the liability is incurred. Accrued revenue at year-end consists of federal and state program expenditures scheduled for reimbursement to the District in the succeeding year while unearned revenue represents advances for federal and state programs that exceed recorded District expenditures. Further, the Schedules are prepared following the principles contained in the Uniform Grant  Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

3. Special Education and School Age Parents Program 

   • The aid received during fiscal year 2022-23 was based on a proration of the total net eligible expenditures incurred during fiscal year 2021-22 ($17,127,808). The net eligible expenditures incurred during fiscal year 2022-23 ($18,020,265) will be utilized in determining aid received in
   • fiscal year 2023-24.

4. Oversight Agency

   • The District’s federal oversight agency for audit is the U.S. Department of Education. The District’s state cognizant agency is the Wisconsin Department of Public Instruction. 

5. Pass-Through Agencies

   • The District received federal awards from the following pass-through agencies:
     • WI DPI Wisconsin Department of Public Instruction
     • WI DHS Wisconsin Department of Health Services
     • WI DOA Wisconsin Department of Administration

6. Indirect Cost Rate

   • The District has not elected to use the 10% de minimis indirect cost rate of the Uniform Guidance.

Section I - Summary of Auditors’ Results

Financial Statements

• Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified
• Internal control over financial reporting:
  • Material weakness(es) identified? no
  • Significant deficiency(ies) identified?  none reported
  • Noncompliance material to financial statements noted? no

Federal and State Awards

• Internal control over major programs:
• Material weakness(es) identified? No Federal No State
• Significant deficiencies identified that are not considered to be material weakness(es)? No Federal No State
• Type of auditor’s report issued on compliance for major programs: Unmodified Unmodified Any audit findings disclosed that are required to be reported in accordance with section 2 CFR 200.516(a) of the Uniform Guidance or the State Single Audit Guidelines? No Federal No State
• Auditee qualified as low-risk auditee?  No Federal No State
• Dollar threshold used to distinguish between type A and type B programs:  Federal $750,000 State $250,000

Identification of major federal programs tested

Identification of major state programs:

Section II – Financial Statement Findings Required to be Reported in Accordance With Government Auditing Standards

No findings were reported.

Section III - Federal and State Awards Findings and Questioned Costs

No findings were reported.

Section IV - Other Issues

• Does the auditor’s report or the notes to the financial statements include disclosure with regard to substantial doubt as to the auditee’s ability to continue as a going concern? no  
• Does the audit report show audit issues (i.e., material noncompliance, non-material non-compliance, questioned costs, material weakness, significant deficiency, management letter comment, excess revenue or excess reserve) related to grants/contracts with funding agencies that require audits to be in accordance with the State Single Audit Guidelines:
  • Department of Public Instruction no
  • Department of Workforce Development no
  • Department of Health Services no
• Was a Management Letter or other document conveying audit comments issued as a result of this audit?  yes 

Name and signature of partner
Wendi M. Unger, CPA
Date of report December 15, 2023