Fortuna City Council
August 17, 2026

FORTUNA UNION HIGH SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
8 Statement of Activities
Total revenues exceeded expenditures, which increased the net position by $1,231,259. The following table summarizes the change to the net position for the 2022-2023 fiscal year.

Percentage
2023 2022 Change Change
Revenues
Program Revenues:

Charges for Services $ 24,540 $ 20,184 $ 4,356 22%
Operating Grants and Contributions 6,101,394 5,929,626 171,768 3% General Revenues:

Property Taxes 6,680,658 6,192,876 487,782 8%
Grants and Entitlements - Unrestricted 7,976,281 7,222,048 754,233 10% Other 553,173 521,253 31,920 6%
Total Revenues 21,336,046 19,885,987 1,450,059 7%
Program Expenses
Instruction 8,999,619 8,676,924 322,695 4%
Instruction-Related Services 2,302,126 2,028,095 274,031 14% Pupil Services 2,358,245 1,981,556 376,689 19%
General Administration 1,841,770 1,536,363 305,407 20%
Plant Services 1,837,914 1,448,597 389,317 27%
Ancillary Services 1,033,958 824,745 209,213 25%
Other Outgo 444,288 - 444,288 100%
Interest and Fiscal Charges 1,286,867 333,100 953,767 286% Total Expenses 20,104,787 16,829,380 3,275,407 19%
Change in Net Position $ 1,231,259 $ 3,056,607 $ (1,825,348) -60% Governmental Activities
The total cost of programs and services was $20,104,791. The District expenses predominately related to educating and caring for students is 67.94%. The purely administrative activities of the District accounted for is 9.16% of the total cost.

General Fund Budgetary Highlights
The District's budget is prepared in accordance with California law and is based on the modified accrual basis of accounting. Over the course of the year, the District revised its annual operating budget at various times to reflect the most recent financial information available. The most significant budget adjustments made during the year fall into the following categories: revisions to the adopted budget required after approval of the State budget and revisions to adjust program revenues and expenditures to final awards for state and federal categorical programs.

FORTUNA UNION HIGH SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
9 Capital Asset and Debt Administration
Capital Assets
The Capital Projects Fund is used to account for the costs incurred in acquiring and improving sites, constructing, and remodeling facilities, and procuring equipment necessary for providing educational programs for all students within the District.
2023 2022 Percent
Capital Assets:

Land $ 72,980 $ 72,980 0%
Work-In-Progress 2,960,480 2,578,248 15%
Buildings 18,674,520 18,395,850 2%
Improvement of sites 2,578,248 3,123,455 -17%
Equipment 3,528,266 2,549,571 38%
Subtotals 27,814,494 26,720,104 4%
Less: Accumulated Depreciation (13,698,315) (13,011,231) 5% Capital Assets, net $ 14,116,179 $ 13,708,873 3%
Lease Assets:

Equipment $ 260,785 $ 260,785 0%
Less: Accumulated Amortization (170,939) (112,375) 52%
Lease Assets, net $ 89,846 $ 148,410 -39%
Governmental activities capital assets, net $ 14,206,025 $ 13,857,283 3% District Indebtedness
In compliance with GASB Statement No. 75, Other Post Employee Benefits (OPEB) are included in the District’s long-term liabilities calculation. The Fortuna Union High School District’s long-term obligations also include a General Obligation Bond and Net Pension Liability. The total for longterm obligations is $24,207,469. 2023 2022 Percent
General Obligation Bond $ 9,673,305 $ 9,899,210 -2%
Lease Liability 96,900 156,219 -38%
Compensated Absences Payable 35,162 35,940 -2%
Net OPEB Liability 4,036,199 4,148,215 -3%
Net Pension Liability 10,365,903 6,627,328 56%
Total Long Term Obligation $ 24,207,469 $ 20,866,912 16%

FORTUNA UNION HIGH SCHOOL DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
10 Factors Bearing on the District’s Financial Management At the time the financial statements were prepared and audited, the District was not aware of any circumstance that could significantly affect its financial health in the future.

Contacting the District’s Financial Management
The financial report is designed to provide our citizens, taxpayers, students, investors and creditors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have questions regarding this report or need additional financial information, contact the Superintendent, Fortuna Union High School District, 735 13th Street, Fortuna, CA 95540.

BASIC FINANCIAL STATEMENTS

FORTUNA UNION HIGH SCHOOL DISTRICT

STATEMENT OF NET POSITION
JUNE 30, 2023
The accompanying notes are an integral part of these financial statements. 11 Governmental
Activities
Cash and cash equivalents (Note 2) $ 14,087,350
Receivables 1,130,112
Stores inventory 8,036
Right of use asset - leases, net of amortization (Note 4) 89,846 Capital assets, net of accumulated depreciation (Note 4) 14,116,179 Total Assets 29,431,523
Deferred outflows on pensions (Note 6) 5,280,685
Deferred outflows on OPEB (Note 7) 524,971
Total Deferred Outflows 5,805,656
Accounts payable and other current liabilities 1,248,035 Unearned revenue 641,144
Long-term liabilities:

Due within one year 299,148
Due in more than one year 23,908,321
Total Liabilities 26,096,648
Deferred bond premium revenue 54,745
Deferred inflows on pensions (Note 6) 4,072,959
Deferred inflows on OPEB (Note 7) 931,408
Total Deferred Inflows 5,059,112
Net investment in capital assets 6,255,037
Restricted 7,435,091
Unrestricted (9,608,709)
Total Net Position $ 4,081,419

LIABILITIES

DEFERRED INFLOWS OF RESOURCES

NET POSITION
ASSETS

DEFERRED OUTFLOWS OF RESOURCES

FORTUNA UNION HIGH SCHOOL DISTRICT

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
The accompanying notes are an integral part of these financial statements. 12 Net (Expense)
Revenues and
Changes in
Net Position
Operating Capital
Charges for Grants and Grants and Governmental
Expenses Services Contributions Contributions Activities Governmental Activities
Instruction $ 8,999,619 $ 1,476 $ 3,405,155 $ - $ (5,592,988) Instruction-related services:

Instructional supervision and
administration 151,890 - 28,476 - (123,414)
Instructional library, media and
technology 107,603 - - - (107,603)
School site administration 2,042,633 - 381,729 - (1,660,904) Pupil Services:

Home-to-school transportation 596,000 - - - (596,000)
Food services 564,168 22,397 371,145 - (170,626)
All other pupil services 1,198,077 - 286,457 - (911,620) General administration:

Centralized data processing 367,598 - 3,608 - (363,990) All other general administration 1,474,172 - 469,790 - (1,004,382) Plant services 1,837,914 408 72,356 - (1,765,150)
Ancillary services 1,033,958 4 689,763 (344,191)
Interest on long-term debt 444,288 - - - (444,288)
Other outgo 1,286,867 255 392,915 - (893,697)
Total governmental activities $ 20,104,787 $ 24,540 $ 6,101,394 $ - (13,978,853) General Revenues
Taxes and subventions:

Taxes levied for general purposes 5,963,765
Taxes levied for debt service 602,581
Taxes levied for other specific purposes 114,312
Federal and state aid not restricted to specific purposes 7,976,281 Interest and investment earnings (38,430)
Interagency revenues 274,771
Miscellaneous 316,832
Total General Revenues 15,210,112
Change in Net Position 1,231,259
Net Position, July 1, 2022 2,850,160
Net Position, June 30, 2023 $ 4,081,419
Program Revenues

FORTUNA UNION HIGH SCHOOL DISTRICT

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2023
The accompanying notes are an integral part of these financial statements. 13 Special Reserve
Fund for Capital All
General Building Outlay Projects Non-Major
Fund Fund Fund Funds Totals
Cash and cash equivalents $ 7,063,795 $ 4,389,796 $ 1,909,063 $ 724,696 $ 14,087,350 Accounts receivable 983,275 88,940 22,866 35,031 1,130,112 Stores inventory - - - 8,036 8,036
Total Assets $ 8,047,070 $ 4,478,736 $ 1,931,929 $ 767,763 $ 15,225,498 Liabilities
Accounts payable $ 717,019 $ 401,260 $ - $ - $ 1,118,279 Unearned revenue 641,144 - - - 641,144
Total Liabilities 1,358,163 401,260 - - 1,759,423
Fund balances
Nonspendable 2,270 - - 8,266 10,536
Restricted 2,598,118 4,077,476 - 759,497 7,435,091
Assigned 2,051,829 - 1,931,929 - 3,983,758
Unassigned 2,036,690 - - - 2,036,690
Total Fund Balances 6,688,907 4,077,476 1,931,929 767,763 13,466,075 Total liabilities and fund balances $ 8,047,070 $ 4,478,736 $ 1,931,929 $ 767,763 $ 15,225,498 ASSETS

LIABILITIES AND

FUND BALANCES

FORTUNA UNION HIGH SCHOOL DISTRICT

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
The accompanying notes are an integral part of these financial statements. 14 Total fund balances - governmental funds $13,466,075
Capital assets at historical cost $ 27,814,494
Accumulated depreciation (13,698,315)
Net 14,116,179
Lease assets relating to governmental activities, at historical costs: $ 260,785 Accumulated amortization: (170,939)
Net 89,846
(129,756)
Unamortized portion of bond premiums (54,745)
Net pension liabilities (Note 6) $ 10,365,903
General obligation bonds payable:

Current Interest (Note 5) 9,673,305
Lease liability (Note 5) 96,900
Net OPEB liability (Note 7) 4,036,199
Compensated absences payable (Note 5) 35,162
(24,207,469)
Deferred outflows of resources relating to OPEB 524,971 Deferred inflows of resources relating to OPEB (931,408) Deferred outflows of resources relating to pensions 5,280,685 Deferred inflows of resources relating to pensions (4,072,959) Total net position - governmental activities $ 4,081,419 Deferred outflows and inflows of resources relating to other postemployment benefits (OPEB): In governmental funds, deferred outflows and inflows of resources relating to OPEB are not reported because they are applicable to future periods. In the statement of net position, deferred outflows and inflows of resources relating to Deferred outflows and inflows of resources relating to pensions: In governmental funds, deferred outflows and inflows of resources relating to pensions are not reported because they are applicable to future periods. In the statement of net position, deferred outflows and inflows of resources relating to pension are reported.

Unamortized premiums and discounts: In governmental funds, bond premiums are recognized as revenues in the period they are received while bond discounts are recognized as expenditures in the period they are incurred. In the government-wide statements, premiums and discounts are amortized over the life of the debt.

Long-term liabilities: In governmental funds, only current liabilities are reported. In the statement of net position, all liabilities, including long-term liabilities, are reported. Longterm liabilities relating to governmental activities consist of:

Unmatured interest on long-term debt: In governmental funds, interest on long-term debt is not recognized until the period in which it matures and is paid. In the government-wide statement of activities, it is recognized in the period that it is incurred.

Amounts reported for assets and liabilities for governmental activities in the statement of net position are different from amounts reported in governmental funds because:

Capital assets: In governmental funds, only current assets are reported. In the statement of net position, all assets are reported, including capital assets and accumulated depreciation.

FORTUNA UNION HIGH SCHOOL DISTRICT

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE

GOVERNMENTAL FUNDS
JUNE 30, 2023
The accompanying notes are an integral part of these financial statements. 15 Special Reserve
Fund for Capital All
General Building Outlay Projects Non-Major
Fund Fund Fund Funds Totals

REVENUES
Total Revenue Limit LCFF sources $ 13,559,454 $ - $ - $ - $ 13,559,454 Federal revenue 1,674,752 - - 205,005 1,879,757
Other state revenues 3,428,104 - - 127,942 3,556,046
Other local revenues 1,267,349 (7,664) (32,266) 1,113,370 2,340,789 Total Revenues Total revenues 19,929,659 (7,664) (32,266) 1,446,317 21,336,046

EXPENDITURES
Certificated Salaries Certificated salaries 6,080,684 - - - 6,080,684 Classified Salaries Classified salaries 1,903,312 - 2,280 135,282 2,040,874 Employee Benefits Employee benefits 4,582,853 - 102 127,070 4,710,025 Books and Supplies Books and supplies 940,113 - - 363,400 1,303,513 Services and Other Operating Services and other operating expenditures 2,578,750 429,317 - 295,752 3,303,819
Capital Outlay Capital outlay 151,439 230,787 37,665 - 419,891 Other Outgo Other outgo 1,373,399 - - 2,100 1,375,499
Debt Service Expenditures Debt service expenditures
Principal - - - 225,905 225,905
Interest - - - 315,825 315,825
Total Expenditures Total expenditures 17,610,550 660,104 40,047 1,465,334 19,776,035 Excess (deficiency) of revenues
over expenditures 2,319,109 (667,768) (72,313) (19,017) 1,560,011

OTHER FINANCING SOURCES (USES)
Operating transfers in 181,197 - 735,540 85,547 1,002,284 Operating transfers out (1,002,284) - - - (1,002,284)
Total Other Financing Sources (Uses) Total other financing sources (uses) (821,087) - 735,540 85,547 - Expenditures and Other Uses Net change in fund balances 1,498,022 (667,768) 663,227 66,530 1,560,011 Fund balances, July 1, 2022 5,190,885 4,745,244 1,268,702 701,233 11,906,064 Fund balances, June 30, 2023 $ 6,688,907 $ 4,077,476 $ 1,931,929 $ 767,763 $ 13,466,075

FORTUNA UNION HIGH SCHOOL DISTRICT

RECONCILIATION OF THE GOVERNMENTAL STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES

TO THE STATEMENT OF ACTIVITIES
JUNE 30, 2023
The accompanying notes are an integral part of these financial statements. 16 Total net change in fund balances - governmental funds $ 1,560,011 Expenditures for capital outlay $ 1,094,390
Depreciation expense (687,084)
Amortization expense (58,564) 348,742
285,224
(129,756)
(319,020)
(518,111)
778
3,391
Total change in net position - governmental activities $ 1,231,259 Unmatured interest on long-term debt: In governmental funds, interest on longterm debt is recognized in the period that it becomes due. In the governmentwide statement of activities, it is recognized in the period that it is incurred.

Unmatured interest owing at the end of the period, less matured interest paid during the period but owing from the prior period was:

Amortization of debt issue premium or discount: In governmental funds, if debt is issued at a premium or at a discount, the premium or discount is recognized as an Other Financing Source or an Other Financing Use in the period it is incurred. In the government-wide statements, the premium or discount is Debt service: In governmental funds, repayments of long-term debt are reported as expenditures. In the government-wide statements, repayments of long-term debt are reported as reductions of liabilities. Expenditures for repayment of the principal portion of long-term debt were:

Other postemployment benefits (OPEB): In governmental funds, OPEB expenses are recognized when employer contributions are made. In the statement of activities, OPEB expenses are recognized on the accrual basis.

This year, the difference between OPEB expenses and actual employer Compensated absences in governmental funds are measured by the amounts paid during the period. In the statement of activities, compensated absences are measured by the amounts earned. The difference between compensated absences paid and compensated absences earned was:

Pensions: In government funds, pension costs are recognized when employer contributions are made in the statement of activities, pension costs are recognized on the accrual basis. This year, the difference between accrualbasis pension costs and actual employer contributions was:

Capital outlay: In governmental funds, the costs of capital assets, lease assets and subscription assets are reported as expenditures in the period when the assets are acquired. In the statement of activities, costs of capital assets, lease assets and subscription assets are allocated over their estimated useful lives and their lease terms as depreciation expense and amortization expense respectively. The difference between capital outlay expenditures and depreciation expense and amortization expense for the period is:

Amounts reported for governmental activities in the statement of activities are different from amounts reported in governmental funds because:

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
17 A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. ACCOUNTING POLICIES
The District accounts for its financial transactions in accordance with the policies and procedures of the Department of Education's "California School Accounting Manual''. The accounting policies of the District conform to accounting principles generally accepted in the United States of America (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants (AICPA).

B. REPORTING ENTITY
The District has no oversight responsibility over any other governmental unit and is not included in any other governmental "reporting entity" as defined in Governmental Accounting Standards Board pronouncements, since the Board of Trustees of the District is elected by the public and has decision-making authority, the power to designate management, the ability to significantly influence operations, and the primary accountability for fiscal matters. There are no component units included within the reporting entity.

C. BASIS OF PRESENTATION
Government-wide Financial Statements
The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the District and its component units. The effect of interfund activity, within the governmental activities, has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The government-wide statement of activities presents a comparison between direct expenses and program revenues for each function or program of the District's governmental activities. Direct expenses are those that are specifically associated with a service, program, or department and are therefore clearly identifiable to a particular function. The District does not allocate indirect expenses to functions in the statement of activities.

Program revenues include charges paid by the recipients of goods or services offered by a program, as well as grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues which are not classified as program revenues are presented as general revenues of the District, with certain exceptions. The comparison of direct expenses with program revenues identifies the extent to which each governmental function is selffinancing or draws from the general revenues of the District.

Fund Financial Statements
Fund financial statements report detailed information about the District. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major governmental fund is presented in a separate column, and all non-major funds are displayed in separate columns. Fiduciary funds are reported by fund type.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
18 D. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting.

Fiduciary funds use the accrual basis of accounting.

Government-Wide Financial Statements
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements are met. Expenses are recorded when liabilities are incurred.

Governmental Fund Financial Statements
Governmental fund financial statements (i.e., balance sheet and statement of revenues, expenditures, and changes in fund balances) are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded under the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. “Available” means the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District, “available” means collectible within the current period or within 60 days after year-end.

Non-exchange transactions, in which the District receives value without directly giving equal value in return, include property taxes, grants, and entitlements. Under the accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and entitlements is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are to be used, or the fiscal year when use is first permitted; matching requirements, in which the District must provide local resources to be used for a specified purpose; and expenditure requirements, in which the resources are provided to the District on a reimbursement basis. Under the modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting.

However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
19 E. FUND ACCOUNTING
The accounts of the District are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity or retained earnings, revenues, and expenditures or expenses, as appropriate. District resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The District's accounts are organized into major, non-major, and fiduciary funds as shown on the following page:

Governmental Funds
Major Funds
The General Fund is the chief operating fund for all LEAs. It is used to account for the ordinary operations of an LEA. All transactions except those accounted for in another fund are accounted for in this fund. The General Fund as reported includes Special Reserve Fund for Other than Capital Outlay Projects and Special Reserve Fund for Postemployment Benefits.

The Special Reserve Fund for Other Than Capital Outlay Projects is used primarily to provide for the accumulation of general fund moneys for general operating purposes other than for capital outlay (Education Code Section 42840).

The Special Reserve Fund for Postemployment Benefits is used to account for amounts the LEA has earmarked for the future cost of postemployment benefits but has not contributed irrevocably to a separate trust for the postemployment benefit plan. Amounts accumulated in this fund must be transferred back to the general fund for expenditure (Education Code Section 42842).

The Building Fund is used to account for proceeds from the sale of bonds and may not be used for any purpose other than those for which the bonds were issued.

The Special Reserve Fund for Capital Outlay Projectsis used to account for the accumulation of general fund moneys for capital outlay purposes (Education Code Section 42840).

Non-Major Funds
The Student Activity Fund accounts for student body activities (ASB) to account for the raising and expending of money to promote the general welfare, morale and educational experience of the student body.

The Cafeteria Fund is used to account separately for federal, state, and local resources to operate the food service program.

The Bond Interest and Redemption Fund is used to account for the accumulation of resources for, and the repayment of district bonds, interest, and related costs.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
20 F. FUND ACCOUNTING (CONTINUED)
Fiduciary Funds
Fiduciary funds are used to account for assets held in a trustee or custodial capacity for others that cannot be used to support the LEA’s own programs. The key distinction between trust and custodial funds is that trust funds are subject to a trust agreement that affects the degree of management involvement and the length of time that the resources are held. The District does not have any fiduciary funds at this time.

G. BUDGETS AND BUDGETARY ACCOUNTING
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds. By State law, the District's Governing Board must adopt a final budget no later than July 1. A public hearing must be conducted to receive comments prior to adoption. The District's Governing Board satisfied these requirements.

These budgets are revised by the District's Governing Board and Superintendent during the year to give consideration to unanticipated income and expenditures.

Formal budgetary integration was employed as a management control device during the year for all budgeted funds. The District employs budget control by minor object and by individual appropriation accounts. Expenditures cannot legally exceed appropriations by major object account.

H. ENCUMBRANCES
Encumbrance accounting is used in all budgeted funds to reserve portions of applicable appropriations for which commitments have been made. Encumbrances are recorded for purchase orders, contracts, and other commitments when they are written. Encumbrances are liquidated when the commitments are paid. All encumbrances are liquidated at June 30.

I. DEPOSITS AND INVESTMENTS
The District is authorized to maintain cash in banks and revolving funds that are insured up to $250,000 by the Federal Depository Insurance Corporation (FDIC). All cash held by the financial institutions is fully insured or collateralized.

In accordance with Education Code Section 41001, the District maintains substantially all of its cash in the Humboldt County Treasury. The County pools these funds with those of other districts in the County and invests the cash. These pooled funds are carried at cost which approximates market value. Interest earned is deposited quarterly into participating funds. Any investment losses are proportionately shared by all funds in the pool.

The County is authorized to deposit cash and invest excess funds by California Government Code Section 53648 et seq. The Humboldt County Treasury has no investments in derivatives.

The District does not have a specific policy which relates to interest rate risk.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
21 I. DEPOSITS AND INVESTMENTS (CONTINUED)
The District is authorized under California Government Code to make direct investments in local agency bonds, notes, or warrants within the State; U.S. Treasury instruments; registered State warrants or treasury notes; securities of the U.S. Government, or its agencies; bankers acceptances; commercial paper; certificates of deposit placed with commercial banks and/or savings and loan companies; repurchase or reverse repurchase agreements; medium term corporate notes; shares of beneficial interest issued by diversified management companies; certificates of participation; obligations with first priority security; and collateralized mortgage obligations.

Investments with original maturities greater than one year are stated at fair value. Fair value is estimated based on quoted market prices at year-end. All investments not required to be reported at fair value are stated at cost or amortized cost.

J. INVENTORY
Inventories are recorded using the consumption method, in that inventory acquisitions are initially recorded in inventory (asset) accounts, and are charged as expenditures when used. Reported inventories are equally offset by a fund balance reserve, which indicates that these amounts are not "available for appropriation and expenditure" even though they are a component of net current assets.

The District has the option of reporting an expenditure in governmental funds for prepaid items either when purchased or during the benefiting period. The District has chosen to report the expenditures when incurred.

K. CAPITAL ASSETS
Capital assets purchased or acquired with an original cost of $5,000 or more are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend the asset's lives are not capitalized, but are expensed as incurred. Depreciation on all capital assets is computed using a straight-line basis over the following estimated useful lives as follows:

Assets Years
Infrastructure 30
Buildings 50
Building improvements 20
Vehicles 2-15
Office Equipment 3-15
Computer Equipment 3-15

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
22 L. INTERFUND BALANCES
Interfund activity is reported as either loans, services provided, reimbursements or transfers. Loans are reported as interfund receivables and payables as appropriate and are subject to elimination upon consolidation. Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements are when one fund incurs at cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers.

M. UNEARNED REVENUE
Cash received for federal and state special projects and programs is recognized as revenue to the extent that qualified expenditures have been incurred. Unearned revenue is recorded to the extent that cash received on specific projects and programs exceeds qualified expenditures.

N. COMPENSATED ABSENCES
All vacation pay is accrued when incurred in the government-wide financial statements.

Accumulated sick leave benefits are not recognized as liabilities of the District. The District's policy is to record sick leave as an operating expense in the period taken, since such benefits do not vest, nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits when the employee retires.

O. LONG-TERM OBLIGATIONS
The District reports long-term debt of governmental funds at face value in the government-wide statements. In the governmental fund financial statements, bond premiums, discounts, and issuance costs are recognized in the period incurred.

P. RESTRICTED NET POSITION
Restrictions of the ending net position indicate the portions of net position not appropriate for expenditure or amounts legally segregated for specific future use. These amounts are not available for appropriation and expenditure at the balance sheet date.

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.

Q. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
23 R. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the statement of net position includes a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s), and as such will not be recognized as an outflow of resources (expense/expenditures) until then.

In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and as such, will not be recognized as an inflow of resources (revenue) until that time.

S. PENSIONS
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Fortuna Union High School District’s California Public Employees’ Retirement System (CalPERS) and California State Teachers Retirement System (CalSTRS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS and CalSTRS, respectively. 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.

T. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB)
For purposes of measuring the District’s 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’s OPEB Plan (OPEB Plan) and additions to/deductions from the District’s fiduciary net position have been determined on the same basis as they are reported by the OPEB Plan. For this purpose, the 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.

U. FINANCING LEASES
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset as specified in the contract for a period of time in an exchange or exchange-like transaction.

The long-term liability and corresponding asset for financial leases are recorded in the financial statements to the extent that the District’s lease capitalization threshold is met, $1,000,000.

Amortization of related assets using the straight-line method over the life of the contract. The District implemented a lease capitalization policy in the fiscal year end June 30, 2023, effective retroactively to July 1, 2021. Prior to the implementation of lease capitalization policy, the District had accounted for four financing leases as of June 30, 2022. Subsequent to the implementation of the lease capitalization policy, the District did not have any financing leasesthat met the threshold.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
24 V. FUND BALANCE
In accordance with Governmental Accounting Standards Board (GASB) Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions”, the District is required to report fund balances in the following categories: Nonspendable, Restricted, Committed, Assigned and/or Unassigned.

Nonspendable Fund Balance reflects assets not in spendable form, either because they will never convert to cash (e.g. prepaid expense) or must remain intact pursuant to legal or contractual requirements.

Restricted Fund Balance reflects amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.

Committed Fund Balance reflects amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision-making authority: the Board of Trustees. Commitments may be established, modified, or rescinded only through resolutions approved by the Board of Trustees.

Assigned Fund Balance reflects amounts intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed. Under the District’s adopted policy, only the Board of Trustees is authorized to assign amounts for specific purposes.

Unassigned Fund Balance represents the residual classification for the government's general fund and includes all spendable amounts not contained in the other classifications. This includes:

Reserve for Economic Uncertainties
The District will maintain an economic uncertainty reserve of at least 4% of total General Fund operating expenditures (including other financing). The primary purpose of this reserve is to avoid the need for service level reductions in the event of an economic downturn causing revenues to come in lower than budget. This reserve may be increased from time to time in order to address specific anticipated revenue shortfalls (state actions, etc.) When expenditures are incurred for purposes of which restricted, committed, assigned and unassigned fund balances are available, the District considers restricted funds to have been spent first, followed by committed, assigned and unassigned, respectively.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
25 W. LOCAL CONTROL FUNDING FORMULA/PROPERTY TAXES
The District's local control funding formula is received from a combination of local property taxes, state apportionments, and other local sources.

The County of Humboldt is responsible for assessing, collecting and apportioning property taxes.

Taxes are levied for each fiscal year on taxable real and personal property in the county. Secured property taxes attach as an enforceable lien on property as of March 1. Property taxes become delinquent after December 10 and April 10, respectively.

Secured property taxes are recorded as revenue when apportioned, in the fiscal year of the levy.

The county apportions secured property tax revenue in accordance with the alternative method of distribution prescribed by Section 4705 of the California Revenue and Taxation Code. This alternate method provides for crediting each applicable fund with its total secured taxes upon completion of the secured tax roll, approximately October 1 of each year.

The County Auditor reports the amount of the District's allocated property tax revenue to the California Department of Education. Property taxes are recorded as local control funding formula (LCFF) sources by the District.

The California Department of Education reduces the District's entitlement by the District's local property tax revenue. The balance is paid from the State General Fund, and is known as the state apportionment.

X. SUBSCRIPTION BASED INFORMATION TECHNOLOGY AGREEMENTS (SBITA) A SBITA is defined as a contract that coveys control of the right to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underlying IT assets) as specified in the contract for a period of time in an exchange or exchange-like transaction.

The long-term liability and corresponding asset for SBITAs are recorded in the financial statements to the extent that the District’s capitalization threshold is met, $1,000,000. Amortization of related assets using the straight-line method over the life of the contract. As of June 30, 2023, the District did not have any subscription based information technology agreements that met the threshold.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
26 2. CASH AND INVESTMENTS
Cash and investments as of June 30, 2023 consist of the following:

Governmental
Funds
Cash in County Treasury $ 13,845,146
Cash on hand and in banks 239,704
Cash in revolving fund 2,500
Totals $ 14,087,350
A. Cash on Hand and in Banks
Cash on hand and in banks consists of all cash held by the District and all cash maintained in commercial bank accounts owned by the District. Cash balances held in banks are insured up to $250,000 by the Federal Depository Insurance Corporation.

B. Cash in Revolving Funds
Cash in revolving fund consists of all cash maintained in commercial bank accounts that are used as revolving funds.

C. Interest Rate Risk
California Government Code Section 53601 limits the District’s investments to maturities of five years. The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

D. Credit Risk
Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. All of the District’s investments are held in the county treasury.

E. Cash in County Treasury
County pool investments consist of District cash held by the Humboldt County Treasury that is invested in the county investment pool. The fair value of the District's investment in the pool is reported in the financial statements at amounts that are based upon the District's pro-rata share of the fair value provided by the County Treasurer for the entire portfolio (in relation to the amortized cost of that portfolio). The weighted average maturity of the pool is 649 days. The pool is rated AAA by Standard and Poor’s.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
27 3. INTERFUND TRANSACTIONS
Transactions between funds of the District are recorded as interfund transfers. The unpaid balances at year-end, as a result of such transactions, are shown as due to and due from other funds.

Interfund Receivables/Payables
The were no interfund receivable and payable balances at June 30, 2023.

Interfund Transfers
Interfund transfers consist of operating transfersfrom funds receiving resources to funds through which the resources are to be expended. Interfund transfers for the year ended June 30, 2023 are as follows:
$ 181,197
85,547
bus reserve transfers, motor pool transfer, parking pavement project. 735,540 Total Transfers $ 1,002,284
Transfer from General Fund to cafeteria fund to reimburse for the Transfer from General Fund to Fund 40 to reimburse the facility project transfers, Transfer from General Fund to Special reserve to keep the 10% reserve threshold under special reserve fund for other than capital outlay. cafeteria cash contribution.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
28 4. CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2023, was as follows:

Additions Deductions
Balance and and Balance
July 1, 2022 Transfers Transfers June 30, 2023
Non-depreciable assets:

Land $ 72,980 $ - $ - $ 72,980
Work in progress 2,549,571 453,237 (42,328) 2,960,480
2,622,551 453,237 (42,328) 3,033,460
Depreciable assets:

Site improvements 2,578,248 - - 2,578,248
Building 18,395,850 278,670 - 18,674,520
Equipment 3,123,455 419,890 (15,079) 3,528,266
24,097,553 698,560 (15,079) 24,781,034
Totals, at cost 26,720,104 1,151,797 (57,407) 27,814,494 Accumulated depreciation:

Site improvements (1,402,332) (93,343) - (1,495,675)
Building (9,277,661) (433,509) - (9,711,170)
Equipment (2,331,238) (175,311) 15,079 (2,491,470)
(13,011,231) (702,163) 15,079 (13,698,315)
Depreciable assets, net 11,086,322 (3,603) - 11,082,719 Capital assets, net $ 13,708,873 $ 449,634 $ (42,328) $ 14,116,179 Lease Assets:

Equipment 260,785 - - 260,785
Total lease assets being amortized 260,785 - - 260,785
Accumulated amortization for
Equipment 112,375 58,564 - 170,939
Total accumulated amortization 112,375 58,564 - 170,939 Total lease assets being amortized, net 148,410 (58,564) - 89,846 Governmental activities capital assets, net $ 13,857,283 $ 391,070 $ (42,328) $ 14,206,025 Depreciation and Amortization were allocated to governmental activity function as follows:

Instruction $ 381,058
Instructional Library, Media and Technology 2,400
School Administration 13,864
Pupil Transportation 20,333
Food Services 27,987
Other Pupil Services 327
Ancillary Services 8,258
Other General Administration 5,916
Centralized Data Processing 22,551
Plant Services 262,954
$ 745,648

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
29 5. LONG-TERM LIABILITIES
General Obligation Bonds
The District issued general obligation bonds in 1999 in the amount of $1,500,000 with an average interest rate of 5.6 percent. In 2010/11 the District did an advance refunding of these bonds. The District completed the refunding to reduce its total debt service payments by $100,328.

On November 6, 2012 the qualified electors of the District approved the issuance of general obligation bonds in the maximum amount of $10,000,000 under the procedures specified in Proposition 39. In February 2013 the District authorized the sale of the first series of bonds in the aggregate amount of $3,500,000 (the "2012 Series 2013" bonds). In October 2015 the District authorized the sale of the second series of bonds in the aggregate amount of $3,000,000 (the "2012 Series B" bonds). In November 2016 the District authorized the sale of the third series of bonds in the aggregate amount of $3,425,000 (the "2012 Series C" bonds).

In 2020, refunding bonds were issued in the amount of $3,667,104 to refund the "2012 Series 2013" bonds. The refunding will reduce the District's payments over the term of the refunding bond by $700,488.

The outstanding general obligation bonded debt of the District as of June 30, 2023 is:

Description Issue Date
Maturity
Date
Interest
Rate Original Issue
Balance
June 30, 2022 Additions Deductions
Balance
June 30, 2023
2011 Refunding 2/24/2011 08/01/24 4.50% $ 1,226,500 $ 327,500 $ - $ 104,200 $ 223,300 2012, Series B 10/23/2015 08/01/44 2% - 3.875% 3,000,000 2,650,000 - 40,000 2,610,000 2012, Series C 11/17/2016 08/01/42 3% - 4% 3,425,000 3,425,000 - - 3,425,000 2020 Refunding 5/4/2020 08/01/41 2.66% 3,677,104 3,496,710 - 81,705 3,415,005 $ 11,328,604 $ 9,899,210 $ - $ 225,905 $ 9,673,305
Premium on GO Bonds $ 54,745
$ 9,728,050
The annual requirements to amortize the bonds outstanding as of June 30, 2023, are as follows:

Year Ending
June 30 Principal
Interest to
Maturity Total
2024 $ 237,671 $ 307,975 $ 545,646
2025 264,347 299,479 563,826
2026 231,830 291,837 523,667
2027 250,031 285,257 535,288
2028 275,657 277,956 553,613
2029-2033 1,814,565 1,249,330 3,063,895
2034-2038 2,714,552 914,270 3,628,822
2039-2043 3,349,652 401,303 3,750,955
2044-2045 535,000 23,347 558,347
Total $ 9,673,305 $ 4,050,754 $ 13,724,059

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
30 5. LONG-TERM LIABILITIES (CONTINUED)
Leases Liability
The District has entered into various lease agreements for computer and printer equipment. The leases are not renewable and the District will not acquire the equipment at the end of the lease term. At the time of the initial measurement, there was no interest rate specified in the original lease agreement. The District has used an estimated interest rate for borrowing of 6.0%, which was used to discount the annual lease payments to recognize the intangible right to use of this asset and the lease liability as of the inception of the lease. Per the agreements, monthly lease payments may be adjusted based on usage of the equipment in excess of originally contracted amounts.

The District also entered into a facility lease. The lease is not renewable and the District will not acquire the facility at the end of the lease term. At the time of the initial measurement, there was no interest rate specified in the original lease agreement. The District has used an estimated interest rate for borrowing of 6.0%, which was used to discount the annual lease payments to recognize the intangible right to use of this asset and the lease liability as of the inception of the lease. Per the agreement, monthly lease payments will be adjusted as the lease progresses near term.

The terms of the agreements are as follows:

Original Current
Annual Total Year
Inception Payment Payment Interest Lease Additional Balance Description Date Terms Amount Rate Liablity Outflows 6/30/23 Copiers and printers 3/4/2020 5 years $ 45,360 6.0% $196,481 $ - $ 71,765 Copiers and printers 9/1/2021 5 years 2,856 6.0% 12,362 - 8,211 Copiers and printers 8/1/2021 3 years 864 6.0% 2,389 - 908 Facility use 6/1/2021 3 years 18,000 6.0% 49,533 - 16,016 Total Lease Agreements $ 67,080 $260,765 $ - $ 96,900
Annual requirements to amortize lease obligations and related interest are as follows:

Year
Ending
June 30, Principal Interest Total
2024 $ 61,477 $ 4,101 $ 65,578
2025 32,217 946 33,163
2026 2,736 118 2,854
2027 470 4 474
Total $ 96,900 $ 5,169 $ 102,069

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
31 5. LONG-TERM LIABILITIES (CONTINUED)
Schedule of Changes in Long-Term Liabilities
A schedule of changes in long-term liabilities for the fiscal year ended June 30, 2023, is shown below:

Amounts
Balance Balance Due Within
July 1, 2022 Additions Deductions June 30, 2023 One Year General Obligation Bond $ 9,899,210 $ - $ 225,905 $ 9,673,305 $ 237,671 Lease Liability 156,219 - 59,319 96,900 61,477
Compensated Absences Payable 35,940 - 778 35,162 -
Net OPEB Liability 4,148,215 - 112,016 4,036,199 -
Net Pension Liability 6,627,328 3,738,575 - 10,365,903 - Total long term obligation $ 20,866,912 $ 3,738,575 $ 398,018 $ 24,207,469 $ 299,148 The accrued vacation (compensated absences), pension, and other postemployment benefits will be paid by the fund for which the employee works. Payments on the General Obligation Bonds are made from the Bond Interest and Redemption Fund. Payments on the Lease Liability are made from the General Fund.

6. EMPLOYEE RETIREMENT SYSTEMS
Qualified employees are covered under multiple-employer defined benefit pension plans maintained by agencies of the State of California. Certificated employees are members of the State Teachers' Retirement System (STRS), and classified employees are members of the California Public Employees' Retirement System (CalPERS).

Plan Description
California Public Employees’ Retirement System (CalPERS) The District contributes to the School Employer Pool under the California Public Employees' Retirement System (CalPERS), a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by CalPERS. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries.

Benefit provisions are established by state statutes, as legislatively amended, within the Public Employees' Retirement Law. CalPERS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the CalPERS annual financial report may be obtained from the CalPERS Headquarters, 400 Q Street, Sacramento, California 95811.

State Teachers’ Retirement System (STRS)
The District contributes to the State Teachers' Retirement System (STRS), a cost-sharing, multipleemployer, public employee retirement system defined benefit pension plan administered by STRS. The plan provides retirement and disability benefits and survivor benefits to beneficiaries. Benefit provisions are established by state statutes, as legislatively amended, within the State Teachers'

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
32 6. EMPLOYEE RETIREMENT SYSTEMS (CONTINUED)
Retirement Law. STRS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the STRS annual financial report may be obtained from the STRS Headquarters, 100 Waterfront Place, West Sacramento, California 95605.

The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:

Hire date
Benefit formula 2% @ 55 2% @ 62 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age 55 62 60 62
Monthly benefits, as a % of eligible compensation 2.0% 2.0% 2.0% 2.0% Required employee contribution rates 7% 8% 10.25% 10.205% Required employer contribution rates 25.370% 25.370% 19.10% 19.10% On or after
January 1, 2013
Prior to
January 1, 2013
Prior to
January 1, 2013
On or after
January 1, 2013
CalPERS CalSTRS
Contributions
CalPERS
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

STRS
Required member, employer and state contribution rates are set by the California Legislature and Governor and detailed in Teachers’ Retirement Law. Contribution rates are expressed as a level percentage of payroll using the entry age normal actuarial cost method.

For the year ended June 30, 2023, the contributions reported as deferred outflows of resources related to pensions recognized as part of pension expense for each Plan were as follows:

CalPERS STRS Total
$ 496,289 $ 1,098,002 $ 1,594,291
- 496,047 496,047
$ 496,289 $ 1,594,049 $ 2,090,338
Contributions - employer
Total
On behalf contributions - state

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
33 6. EMPLOYEE RETIREMENT SYSTEMS (CONTINUED)
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the District’s reported net pension liabilities for its proportionate share of the net pension liability of the Plans’ of:

Proportionate Share
of Net Pension Liability
CalPERS $ 4,191,576
STRS 6,174,327
Total Net Pension Liability $ 10,365,903
The District’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as ofJune 30, 2022, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The District’s proportion of the net pension liability was based on a projection of the District’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The District’s proportionate share of the net pension liability for the Plan as of June 30, 2021 and 2022 was as follows:

Fiscal Year CalPERS STRS
2021-22 0.01185% 0.00927%
2022-23 0.01218% 0.00889%
Change - Increase (Decrease) 0.00033% -0.00038%
Measurement
Dates
June 30, 2021
June 30, 2022
For the year ended June 30, 2023, the District recognized pension expense of $518,111. At June 30, 2023, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
34 6. EMPLOYEE RETIREMENT SYSTEMS (CONTINUED)
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of Resources Resources Resources Resources Resources Resources $ 496,289 $ - $ 1,594,049 $ - $ 2,090,338 $ -
10,031 89,443 53,519 194,447 63,550 283,890
237,424 - 2,151,334 - 2,388,758 -
98,496 81,694 40,168 1,004,427 138,664 1,086,121
196,718 60,193 402,657 271,820 599,375 332,013
- 148,969 - 2,221,966 - 2,370,935
Total $ 1,038,958 $ 380,299 $ 4,241,727 $ 3,692,660 $ 5,280,685 $ 4,072,959 Net differences between projected
and actual investment earnings on
pension plan investments
Change in employer's proportion
and differences between the
employer’s contributions and the
employer’s proportionate share of
contributions
Differences between Expected
and Actual Experience
Changes of Assumptions
Difference between proportionate
share of aggregate employer
contributions and actual
contributions for 2021-22
Pension contributions subsequent
to measurement date
CalPERS STRS Total
The amounts reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2024. Other amounts reported as deferred inflows and outflows of resources related to pensions will be recognized as pension expense as follows:

CalPERS STRS
$ 68,577 $ (212,682) $ (144,105)
57,887 (301,635) (243,748)
(60,361) (480,073) (540,434)
96,267 45,027 141,294
- (16,845) (16,845)
- (78,774) (78,774)
$ 162,370 $ (1,044,982) $ (882,612)
2026
Thereafter
Total
2024
2025
2027
2028
Total Deferred
Outflows/
(Inflows) of
Resources
Year Ended
June 30

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
35 6. EMPLOYEE RETIREMENT SYSTEMS (CONTINUED)
Actuarial Assumptions
The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:

CalPERS STRS
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Entry-Age Normal Cost Actuarial Assumptions
Discount Rate 6.90% 7.10%
Inflation 2.30% 2.75%
Payroll Growth Rate 2.80% 3.50%
Projected Salary Increase Varies by Entry Age and Service Varies by Entry Age and Service Investment Rate of Return (1) 6.90% 7.10%
Mortality
(1) Net of pension plan investment expenses, including inflation.

Derived using CalPERS'
Membership Data for all Funds
Derived using STRS'
Membership Data for all Funds
The mortality table used was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing morality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website.

STRS changed the mortality assumptions based on the July 1, 2015 through June 30, 2018, experience study adopted by the board in January 2020. STRS uses a generational mortality assumption, which involves the use of a base mortality table and projection scales to reflect expected annual reductions in mortality rates at each age, resulting in increases in life expectancies each year into the future. The base mortality tables are CalSTRS custom tables derived to best fit the patterns of mortality among our members. The projection scale was set equal to 110% of the ultimate improvement factor from the Mortality Improvement Scale (MP–2019) table issued by the Society of Actuaries.

Discount Rate
CalPERS
The discount rate used to measure the total pension liability for the Plan was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from Plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. These discount rates are equal to the long-term expected rate of return of the respective plan assets and are net of investment expense but not reduced for administrative expenses.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
36 6. EMPLOYEE RETIREMENT SYSTEMS (CONTINUED)
The long-term expected rate of return on pension plan investments was determined using a buildingblock method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The expected real rates of return by asset class are on the following table:

Assumed
Asset Real
Allocation Return (a)(b)
Global Equity - Cap-weighted 30.0% 4.54%
Global Equity Non-Cap-weighted 12.0% 3.84%
Private Equity 13.0% 7.28%
Treasury 5.0% 0.27%
Mortgage-backed Securities 5.0% 0.50%
Investment Grade Corporates 10.0% 1.56%
High Yield 5.0% 2.27%
Emerging Market Debt 5.0% 2.48%
Private Debt 5.0% 3.57%
Real Assets 15.0% 3.21%
Leverage -5.0% -0.59%
100.0%
(a) An expected inflation of 2.30% used for this period. (b) Figures are based on the 2021-22 Asset Liability Management study.

Asset Class
CalPERS
Discount Rate
STRS
The discount rate used to measure the total pension liability was 7.10%, which was unchanged from prior fiscal year. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers are made at statutory contribution rates in accordance with the rate increases actuarially determined. Projected inflows from investment earnings were calculated using the long-term assumed investment rate of return of 7.10% and assume that contributions, benefit payments and administrative expenses occur midyear. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments to current plan members. Therefore, the long-term assumed investment rate of return was applied to all periods of projected benefit payments to determine the total pension liability.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
37 6. EMPLOYEE RETIREMENT SYSTEMS (CONTINUED)
The long-term investment rate of return assumption 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. The best-estimate ranges were developed using capital market assumptions from STRS investment staff and investment consultants as inputs to the process.

The actuarial investment rate of return assumption was adopted by the board in January 2020 in conjunction with the most recent experience study. For each current and future valuation, STRS’ independent consulting actuary (Milliman) reviews the return assumption for reasonableness based on the most current capital market assumptions. Best estimates of expected 20-year geometrically linked real rates of return and the assumed asset allocation for each major asset class as of the June 30, 2022 measurement date, are summarized in the following table:

Long-Term
Assumed Expected
Asset Real Rate of
Allocation Return (a)
Public Equity 42.0% 4.80%
Real Estate 15.0% 3.60%
Private Equity 13.0% 6.30%
Fixed Income 12.0% 1.30%
Risk Mitigating Strategies 10.0% 1.80%
Inflation Sensitive 6.0% 3.30%
Cash/Liquidity 2.0% -0.40%
Total 100%
(a) 20-year average.

Asset Class
STRS

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
38 6. EMPLOYEE RETIREMENT SYSTEMS (CONTINUED)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the District’s proportionate share of the net pension liability for each Plan, calculated using the discount rate for each Plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
Plan's Net Pension Liability/(Asset) $ 6,054,943 $ 4,191,576 $ 2,651,571 Discount Rate - 1% Current Discount Discount Rate + 1%
(6.10%) Rate (7.10%) (8.10%)
Plan's Net Pension Liability/(Asset) $ 10,486,297 $ 6,174,327 $ 2,594,095 CalPERS
STRS
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS and STRS comprehensive annual financial reports available on the CalPERS’ and STRS’ websites.

Payable to the Pension Plan
As of June 30, 2023, the District had no outstanding required contributions to the pension plans.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
39 7. OTHER POSTEMPLOYMENT BENEFITS (OPEB)
General Information about the OPEB Plan
Plan description: The District has established the Fortuna Union High School District Retiree Healthcare Plan (HC Plan), a single-employer plan. The HC Plan has not established or accumulated any assets in a trust. A separate financial report is not prepared for the HC Plan. The following table summarizes the current HC Plan:

Certificated Classified Management
Benefit types provided Medical Only Medical Only Medical Only Duration of Benefits Until Medicare Eligible Until Medicare Eligible Until Medicare Eligible Required Service 15 years* 15 years** 15 years*
Minimum Age 55 55 55
Dependent Coverage Yes No Yes
District Contribution % 4% of District 4% of District 4% of District contribution times years contribution times years contribution times years of service* of service* of service*
District Cap District contribution District contribution District contribution increases limited to 8% increases limited to 8% increases limited to 8% *100% of District contribution with 5 years if hired prior to 7/1/12 **100% of District contribution with 10 years if hired prior to 7/1/12 The Plan has no assets and does not issue financial statements.

Employees covered by benefit terms. As of the June 30, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms under the H C Plan:

Inactive employees or beneficiaries currently receiving benefit payments 3 Inactive employees entitled to but not yet receiving benefit payments - Active employees 105
Total 108
Contributions: The HC Plan and its contribution requirements are established by agreements with the applicable employee bargaining units and may be amended by agreements between the District and the bargaining units. The annual contribution is based on the current insurance premiums due for the participating retirees. For the fiscal year ended June 30, 2023, the District's cash contributions were $105,806, and there was no estimated implied subsidy, resulting in total payments of $105,806. No trust has been created for the purpose of prefunding obligations for past services.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
40 7. OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
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, 2021.

Actuarial assumptions. The total OPEB liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Salary Increases 2.75% per year
Investment rate of return 3.54% per year net of expenses based on the Bond Buyer 20 Bond Index Inflation 2.50% per year
Healthcare cost trend rates 4.00% per year
Mortality
Certificated 2020 CalSTRS Mortality
Classified 2017 CalPERS Mortality for Miscellaneous and Schools Employees The mortality assumptions are based on the 2020 CalSTRS Mortality table for certificated employees and the 2017 CalPERS Active and Retiree Mortality for Miscellaneous Employees for classified employees. The retirement assumptions are based on the 2020 CalSTRS Retirement Rates table created by CalSTRS and the 2017 CalPERS Retirement Rates for School Employees tables created by CalPERS.
(a) (b) (a) - (b)
Balances at June 30, 2021, Measurement Date $ 4,148,215 $ - $ 4,148,215 Changes for the year:

Service cost 357,125 - 357,125
Interest 92,628 - 92,628
Differences between expected
and actual experience 28,907 - 28,907
Contributions - employer - 105,806 (105,806)
Changes of assumptions (484,870) - (484,870)
Benefit payments (105,806) (105,806) -
Net changes (112,016) - (112,016)
Balances at June 30, 2022, Measurement Date $ 4,036,199 $ - $ 4,036,199 Increase (Decrease)
Net OPEB
Liability
Plan Fiduciary
Net Position
Total OPEB
Liability

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
41 7. OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
Sensitivity of the net OPEB liability to changes in the discount rate and 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 a discount rate that is 1-percentage-point lower (2.54 percent) or 1-percentage-point higher (4.54 percent) than the current discount rate:
1% Decrease Discount Rate 1% Increase
(2.54%) (3.54%) (4.54%)
Net OPEB liability (asset) $ 4,396,868 $ 4,036,199 $ 3,777,507 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 (3.0 percent) or 1-percentage-point higher (5.0 percent) than the current healthcare cost trend rates:
1% Decrease Trend Rate 1% Increase
Net OPEB liability (asset) $ 3,502,530 $ 4,036,199 $ 4,645,651 OPEB plan fiduciary net position. The plan has no assets.

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 of $319,020. At June 30, 2023, the District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
$ 108,086 $ 284,142
327,325 647,266
Net difference between projected and actual earnings on OPEB plan investments - -
Deferred contributions 89,560 -
Total $ 524,971 $ 931,408
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between expected and actual experience
Changes of assumptions
The District will recognize contributions made subsequent to the measurement date in the next fiscal year.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
42 7. OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
Below is the schedule of the total deferred outflows and inflows amortized.

Total Deferred Total Deferred
Year Ended Outflows of Inflows of
June 30 Resources Resources
2024 $ 130,387 $ 82,000
2025 40,827 82,000
2026 40,827 82,000
2027 40,827 82,000
2028 40,827 82,000
Thereafter 231,276 521,408
Total $ 524,971 $ 931,408
Payable to the OPEB Plan
At June 30, 2023, the District had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2023.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
43 8. FUND BALANCES
The District reports fund balances in accordance with Governmental Accounting Standards Board Statement No. 54. All fund balance categories are reported in the aggregate on the face of the balance sheet. All components of those fund balances and specific purposes are identified as follows:

Special
Reserve
Fund for All
General Building Capital Outlay Non-Major
Fund Fund Projects Fund Funds Totals
Nonspendable:

Revolving cash $ 2,270 $ - $ - $ 230 $ 2,500
Stores - - - 8,036 8,036
Total Nonspendable 2,270 - - 8,266 10,536
Restricted for:

Educator Effectiveness 182,062 - - - 182,062
Lottery: Instructional Materials 372,998 - - - 372,998
Arts, Music, and Instructional Materials
Discretionary Block Grant 321,915 - - - 321,915
Child Nutrition: Food Service Staff Training Funds 1,467 - - - 1,467 Child Nutrition: Kitchen Infrastructure and
Training Funds - 2022 KIT Funds 78,921 - - - 78,921
A-G Access/Success Grant 120,505 - - - 120,505
A-G Learning Loss Mitigation Grant 49,527 - - - 49,527
Expanded Learning Opportunities (ELO)
Grant: Paraprofessional Staff 26,277 - - - 26,277
Learning Recovery Emergency Block Grant 1,040,639 - - - 1,040,639 Student Activity Funds - - - 232,704 232,704
Child Nutrition: School Programs - - - 35,511 35,511
Other Restricted Local 403,807 4,077,476 - 491,282 4,972,565 Total Restricted 2,598,118 4,077,476 - 759,497 7,435,091 Assigned to:

Reserve for Capital Outlay Fund - - 1,931,929 - 1,931,929 Other Assignments 2,051,829 - - - 2,051,829
Total Assigned 2,051,829 - 1,931,929 - 3,983,758
Unassigned:

Reserve for Economic Uncertainties 2,036,690 - - - 2,036,690 Total Unassigned 2,036,690 - - - 2,036,690
Total Fund Balances $ 6,688,907 $ 4,077,476 $ 1,931,929 $ 767,763 $13,466,075

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
44 9. JOINT VENTURES
The District is exposed to various risks of loss related to torts, theft or destruction of assets, errors and omissions, and natural disasters. The District manages those risks of loss through participation in public entity risk pools. There have been no significant reductions in insurance coverage from the prior year.

For each of the past three years settlements did not exceed insurance coverage.

The District participates in two joint ventures under a Joint Powers’ Agreement (JPA) with the North Coast School Insurance Group. Each member district pays a premium commensurate with the level of coverage requested. The district is covered under workers' compensation, liability, medical, vision, and dental insurance.

The relationship between District and the JPAs are such that the JPAs are not a component unit of the District for financial reporting purposes.

The most recently available audited, condensed financial information for the JPAs is as follows:

NCSIG NCSMIG
June 30, 2022 June 30, 2022
Total assets $ 6,949,055 $ 12,879,195
Total liabilities 1,561,817 3,595,325
Net position 5,387,238 9,283,870
Total revenues 8,449,759 32,208,646
Total expenses 8,050,574 32,233,123
Change in net position 399,185 (24,477)
* Most recent information available
Audited financial statements for the JPAs are prepared annually and can be obtained from management of the individual JPAs.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
45 10. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
The District incurred unanticipated expenditures in excess of appropriations in expenditure classifications for which the budget was not revised.

Excess of expenditures over appropriations for the year ended June 30, 2023 were as follows:

Excess
Expenditures
Certificated salaries $ 8,660
The excess is not in accordance with Education Code 42600. The excess expenditures in certificated salaries were due certificated substitute cost came in higher than projected on the final payroll run of the year.

11. COMMITMENTS AND CONTINGENCIES
The District has received state and federal funds for specific purposes that are subject to review and audit by the grantor agencies. If the review or audit discloses exceptions, the District may incur a liability to grantor agencies.

12. SUBSEQUENT EVENTS
The District’s management evaluated its June 30, 2023 financial statements for subsequent events through February 9, 2024, the date the financial statements were available to be issued. Management is not aware of any subsequent events, other than those discussed above, that would require recognition or disclosure in the financial statements.

REQUIRED SUPPLEMENTARY INFORMATION

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE – BUDGET (NON-GAAP) AND ACTUAL

GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
46 Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)

REVENUES
LCFF sources $ 12,171,192 $ 13,562,095 $ 13,559,454 $ (2,641) Federal revenue 1,580,261 1,605,301 1,674,752 69,451
Other state revenues 1,631,127 3,703,644 3,428,104 (275,540) Other local revenues 1,021,139 1,219,001 1,267,349 48,348 Total revenues 16,403,719 20,090,041 19,929,659 (160,382)

EXPENDITURES
Certificated Salaries Certificated salaries 6,003,465 6,072,024 6,080,684 (8,660) Classified Salaries Classified salaries 1,922,278 1,931,203 1,903,312 27,891 Employee Benefits Employee benefits 4,656,467 4,700,628 4,582,853 117,775 Books and Supplies Books and supplies 733,016 1,198,987 940,113 258,874 Services and other operating expenditures 1,897,378 2,869,937 2,578,750 291,187 Capital Outlay Capital outlay 87,658 174,519 151,439 23,080 Other Outgo Other outgo 1,104,125 1,407,381 1,373,399 33,982 Total expenditures 16,404,387 18,354,679 17,610,550 744,129 Excess (deficiency) of revenues
over expenditures (668) 1,735,362 2,319,109 583,747

OTHER FINANCING SOURCES (USES)
Operating transfers in - 181,197 181,197 -
Operating transfers out (295,018) (914,460) (1,002,284) (87,824) Total other financing sources (uses) (295,018) (733,263) (821,087) (87,824) Net change in fund balances (295,686) 1,002,099 1,498,022 495,923 Fund balances, July 1, 2022 5,190,885 5,190,885 5,190,885 - Fund balances, June 30, 2023 $ 4,895,199 $ 6,192,984 $ 6,688,907 $ 495,923 Budget

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF THE CHANGES IN NET DISTRICTS

NET OPEB LIABILITY AND RELATED RATIOS
JUNE 30, 2023
47 2023* 2022* 2021* 2020* 2019* 2018*
Total OPEB liability
Service cost $ 357,125 $ 485,722 $ 389,532 $ 351,528 $ 358,856 $ 349,252 Interest 92,628 86,936 111,486 121,851 112,906 93,455
Changes of benefit terms - - - - -
Differences between expected and
actual experience 28,907 94,917 (1,925) (402,929) - -
Changes of assumptions (484,870) (175,328) 365,965 61,721 (68,624) - Benefit payments (105,806) (110,543) (180,107) (168,417) (154,225) (148,291) Net change in total OPEB liability (112,016) 381,704 684,951 (36,246) 248,913 294,416 Total OPEB liability - beginning 4,148,215 3,766,511 3,081,560 3,117,806 2,868,893 2,574,477 Total OPEB liability - ending (a) $ 4,036,199 $ 4,148,215 $ 3,766,511 $ 3,081,560 $ 3,117,806 $ 2,868,893 Plan fiduciary net position
Contributions - employer $ 105,806 $ 110,543 $ 180,107 $ 168,417 $ 154,225 $ 148,291 Net investment income - - - - - -
Benefit payments (105,806) (110,543) (180,107) (168,417) (154,225) (148,291) Administrative expense - - - - - -
Net change in plan fiduciary net position - - - - - -
Plan fiduciary net position - beginning - - - - - -
Plan fiduciary net position - ending (b) $ - $ - $ - $ - $ - $ - District's net OPEB liability - ending (a) - (b) $ 4,036,199 $ 4,148,215 $ 3,766,511 $ 3,081,560 $ 3,117,806 $ 2,868,893 Plan fiduciary net position as a percentage of the
total OPEB liability 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Covered-employee payroll $ 7,704,904 $ 7,680,537 $ 7,409,182 $ 6,746,412 $ 6,859,047 $ 6,477,094 District's net OPEB liability as a percentage of
covered-employee payroll 52.4% 54.0% 50.8% 45.7% 45.5% 44.3% * GASB 75 requires presentation of the 10-year history of changes in the Net OPEB Liability. Since this is the sixth year of implementation, only results for fiscal years 2018 through 2023 are shown in this table.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023
48 0.01177% 0.01146% 0.01124% 0.01132% 0.01149% 0.01098% 0.01042% 0.01185% 0.01218% $ 1,336,717 $ 1,688,974 $ 2,220,104 $ 2,702,106 $ 3,062,486 $ 3,198,800 $ 3,197,451 $ 2,409,115 $ 4,191,576 $ 1,201,504 $ 1,260,412 $ 1,150,396 $ 1,290,683 $ 1,302,685 $ 1,392,363 $ 1,885,188 $ 1,535,775 $ 1,685,995 Proportionate Share of the net pension liability (asset) as a percentage of covered payroll 111.25% 134.00% 192.99% 209.35% 235.09% 229.74% 169.61% 156.87% 248.61% Plan fiduciary net position as a percentage of the
total pension liability (asset) 83.38% 79.43% 73.90% 71.87% 70.85% 70.05% 70.00% 80.97% 69.76% $ 141,429 $ 149,321 $ 159,767 $ 200,456 $ 235,291 $ 274,588 $ 390,234 $ 351,846 $ 427,737

0.00817% 0.00825% 0.00865% 0.00841% 0.00842% 0.00876% 0.00896% 0.00927% 0.00889% $ 4,774,150 $ 5,553,104 $ 6,992,754 $ 7,777,353 $ 7,738,775 $ 7,907,470 $ 8,686,066 $ 4,218,213 $ 6,174,327 $ 3,380,664 $ 3,168,360 $ 3,675,143 $ 3,885,696 $ 3,972,862 $ 4,480,380 $ 5,432,960 $ 5,619,876 $ 5,153,314 Proportionate Share of the net pension liability (asset) as a percentage of covered payroll 141.22% 175.27% 190.27% 200.15% 194.79% 176.49% 159.88% 75.06% 119.81% Plan fiduciary net position as a percentage of the
total pension liability (asset) 76.52% 74.02% 70.04% 69.46% 70.99% 72.56% 71.82% 87.21% 81.20% $ 300,203 $ 339,965 $ 462,333 $ 560,706 $ 646,782 $ 766,145 $ 877,423 $ 950,883 $ 984,283 (1) Historical information is required only for measurement periods for which GASB 68 is applicable. This is the measurement date of the actuary report. (2) Covered payroll is the payroll on which contributions to a pension plan are based. (3)
June 30,
2019 (1)
June 30,
2019 (1)
Proportionate share of aggregate employer contributions (3) Covered payroll (2)
June 30,
2014 (1)
June 30,
2017 (1)
June 30,
2017 (1)
June 30,
2016 (1)
June 30,
2015 (1)
June 30,
2018 (1)
June 30,
2018 (1)
June 30,
2016 (1)
Proportion of the net pension liability (asset)
Proportionate share of the net pension liability (asset) June 30,
2014 (1)
Proportionate share of aggregate employer contributions (3) STRS
Proportion of the net pension liability (asset)
Proportionate share of the net pension liability (asset) June 30,
2022 (1)
June 30,
2022 (1)
The Plan's proportionate share of aggregate contributions may not match the actual contributions made by the employer during the measurement period. The Plan's proportionate share of aggregate contributions is based on the Plan's proportion of fiduciary net position as well as any additional side fund (or unfunded liability) contributions made by the employer during the measurement period.

June 30,
2021 (1)
June 30,
2021 (1)
June 30,
2020 (1)
June 30,
2020 (1)
June 30,
2015 (1)
Covered payroll (2)
CalPERS

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF PENSION CONTRIBUTIONS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
49 $ 141,429 $ 149,321 $ 159,767 $ 200,456 $ 235,291 $ 274,588 $ 390,234 $ 351,846 $ 427,737 Contributions in relation to the contractually
required contribution (2) (149,439) (159,767) (200,456) (234,949) (275,032) (296,029) (352,847) (427,737) (496,289) $ (8,010) $ (10,446) $ (40,689) $ (34,493) $ (39,741) $ (21,441) $ 37,387 $ (75,891) $ (68,552) $ 1,201,504 $ 1,260,412 $ 1,150,396 $ 1,290,683 $ 1,302,685 $ 1,392,363 $ 1,885,188 $ 1,535,775 $ 1,685,995

11.771% 11.847% 13.888% 15.531% 18.062% 19.721% 20.700% 22.910% 25.370% $ 300,203 $ 339,965 $ 462,333 $ 560,706 $ 646,782 $ 766,145 $ 877,423 $ 950,883 $ 984,283 Contributions in relation to the contractually
required contribution (2) (346,913) (466,031) (571,531) (658,952) (809,001) (851,522) (821,234) (920,907) (1,098,002) $ (46,710) $ (126,066) $ (109,198) $ (98,246) $ (162,219) $ (85,377) $ 56,189 $ 29,976 $ (113,719) $ 3,380,664 $ 3,168,360 $ 3,675,143 $ 3,885,696 $ 3,972,862 $ 4,480,380 $ 5,432,960 $ 5,619,876 $ 5,153,314

8.880% 10.730% 12.580% 14.430% 16.280% 17.100% 16.150% 16.920% 19.100% (1) Historical information is required only for measurement periods for which GASB 68 is applicable. (2)
(3) Covered payroll is the payroll on which contributions to a pension plan are based.

Fiscal Year
2016-17 (1)
Covered payroll (3)
Contributions as a percentage of covered payroll (3)
Contractually required contribution (2)
Contribution deficiency (excess)
Fiscal Year
2018-19 (1)
Contribution deficiency (excess)
STRS
Fiscal Year
2014-15 (1)
Fiscal Year
2017-18 (1)
Fiscal Year
2016-17 (1)
Fiscal Year
2015-16 (1)
Covered payroll (3)
Contributions as a percentage of covered payroll (3)
Fiscal Year
2017-18 (1)
Contractually required contribution (2)
CalPERS
Fiscal Year
2014-15 (1)
Fiscal Year
2015-16 (1)
Fiscal Year
2022-23 (1)
Fiscal Year
2022-23 (1)
Employers are assumed to make contributions equal to the contractually required contributions. However, some employers may choose to make additional contributions towards their side fund or their unfunded liability. Employer contributions for such plans exceed the contractually required contributions. CalPERS has determined that employer obligations referred to as "side funds" do not conform to the circumstances described in paragraph 120 of GASB 68, therefore are not considered separately financed specific liabilities.

Fiscal Year
2021-22 (1)
Fiscal Year
2021-22 (1)
Fiscal Year
2020-21 (1)
Fiscal Year
2020-21 (1)
Fiscal Year
2019-20 (1)
Fiscal Year
2019-20 (1)
Fiscal Year
2018-19 (1)

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
50 1. PURPOSE OF SCHEDULES
A - Schedule of Revenues, Expenditures and Changes in Fund Balance Budget (Non-GAAP) and Actual – General Fund
The District employs budget control by object codes and by individual appropriation accounts.

Budgets are prepared on the modified accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board. The budgets are revised during the year by the Board of Trustees to provide for revised priorities. Expenditures cannot legally exceed appropriations by major object code. The originally adopted and final revised budgets for the General Fund are presented as Required Supplementary Information. The basis of budgeting is the same as GAAP.

B - Schedule of the Changes in the District’s Net OPEB Liability and Related Ratios Changes in Benefit Terms
There were no change to the benefit terms.

Changes in Assumptions
The discount rate decreased from 2.16% to 3.54%.

Fiscal year 2018 was the first year of implementation, therefore only six years are shown.

Actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year ended June 30, 2023 were from the June 30, 2021 valuation and measured as of June 30, 2022.

Actuarial cost method Entry Age Normal Cost
Amortization method Level percent of pay
Amortization period 13.9 years
Asset valuation method Market value of assets ($0; plan is not yet funded) Inflation 2.50% per year
Healthcare cost trend rates 4.00% per year
Salary increases 2.75% per year
Discount Rates 3.54% as of June 30, 2022 (Measurement Date)

2.16% as of June 30, 2021 (Measurement Date)
Mortality
Certificated 2020 CalSTRS Mortality
Classified 2017 CalPERS Mortality for Miscellaneous and Schools Employees

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
51 1. PURPOSE OF SCHEDULES (CONTINUED)
C - Schedule of Proportionate Share of the Net Pension Liability This schedule presents information on the District's proportionate share of the net pension liability (NPL), the Plans' fiduciary net position and, when applicable, the State's proportionate share of the NPL associated with the District. In the future, as data becomes available, ten years of information will be presented.

Changes in Assumptions
The discount rate changed for CalPERS from 7.15% to 6.90%. The inflation rate for CalPERS changed from 2.50% to 2.30%. The payroll growth rate for CalPERS changed from 2.75% to

2.80%. There were no changes in assumptions for CalSTRS.

Changes in Benefit Terms
There were no changes in benefit terms since the previous valuations for both CalPERS and CalSTRS.

Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.

D - Schedule of Pension Contributions
If an employer's contributions to the plan are actuarially determined or based on statutory or contractual requirements, the employer's actuarially determined contribution to the pension plan (or, if applicable, its statutorily or contractually required contribution), the employer's actual contributions, the difference between the actual and actuarially determined contributions (or statutorily or contractually required), and a ratio of the actual contributions divided by coveredemployee payroll. In the future, as data becomes available, ten years of information will be presented.

Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.

CalPERS STRS
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Entry-Age Normal Cost Actuarial Assumptions
Discount Rate 6.90% 7.10%
Inflation 2.30% 2.75%
Payroll Growth Rate 2.80% 3.50%
Projected Salary Increase Varies by Entry Age and Service Varies by Entry Age and Service Investment Rate of Return (1) 6.90% 7.10%
Mortality
(1) Net of pension plan investment expenses, including inflation.

Derived using CalPERS'
Membership Data for all Funds
Derived using STRS'
Membership Data for all Funds

SUPPLEMENTARY INFORMATION

FORTUNA UNION HIGH SCHOOL DISTRICT

COMBINING BALANCE SHEET

ALL NON-MAJOR FUNDS
JUNE 30, 2023
52 Bond
Interest
Student and
Activity Cafeteria Redemption
Fund Fund Fund Totals
Cash and cash equivalents $ 232,704 $ 710 $ 491,282 $ 724,696 Accounts receivable - 35,031 - 35,031
Stores inventory - 8,036 - 8,036
Total Assets $ 232,704 $ 43,777 $ 491,282 $ 767,763
Liabilities
Accounts payable $ - $ - $ - $ -
Total Liabilities - - - -
Fund balances
Nonspendable - 8,266 - 8,266
Restricted 232,704 35,511 491,282 759,497
Total Fund Balances 232,704 43,777 491,282 767,763
Total liabilities and fund balances $ 232,704 $ 43,777 $ 491,282 $ 767,763 ASSETS

LIABILITIES AND

FUND BALANCES

FORTUNA UNION HIGH SCHOOL DISTRICT

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCE

ALL NON-MAJOR FUNDS
JUNE 30, 2023
53 Bond
Interest
Student and
Activity Cafeteria Redemption
Fund Fund Fund Totals

REVENUES
Federal revenue $ - $ 205,005 $ - $ 205,005
Other state revenues - 127,942 - 127,942
Other local revenues 497,852 24,130 591,388 1,113,370
Total Revenues Total revenues 497,852 357,077 591,388 1,446,317

EXPENDITURES
Classified Salaries Classified salaries - 135,282 - 135,282 Employee Benefits Employee benefits - 127,070 - 127,070 Books and Supplies Books and supplies 152,576 210,824 - 363,400 Services and Other Operating Services and other operating expenditures 293,547 2,205 - 295,752
Other Outgo Other outgo - - 2,100 2,100
Debt Service Expenditures Debt service expenditures
Principal - - 225,905 225,905
Interest - - 315,825 315,825
Total Expenditures Total expenditures 446,123 475,381 543,830 1,465,334 Excess (deficiency) of revenues
over expenditures 51,729 (118,304) 47,558 (19,017)

OTHER FINANCING SOURCES (USES)
Operating transfers in - 85,547 - 85,547
Total Other Financing Sources (Uses) Total other financing sources (uses) - 85,547 - 85,547 Expenditures and Other Uses Net change in fund balances 51,729 (32,757) 47,558 66,530 Fund balances, July 1, 2022 180,975 76,534 443,724 701,233 Fund balances, June 30, 2023 $ 232,704 $ 43,777 $ 491,282 $ 767,763

FORTUNA UNION HIGH SCHOOL DISTRICT

ORGANIZATION
JUNE 30, 2023
54 The Fortuna Union High School District was formed in 1903 and is comprised of one four-year high school, one continuation high school, and one early college high school. There have been no changes in the number of schools or district boundaries in the current fiscal year.

The Board of Trustees for the fiscal year ended June 30, 2023 was composed of the following members, each with four year terms:

GOVERNING BOARD
Term Expires
Name Office November
Seth McGrath President 2026
Jeana McClendon Vice President 2024
Anita Gage Member 2026
Kendra Dwelley Guimaraes Member 2024
Gabe Charlton Member 2024

ADMINISTRATION
Glen Senestraro
Superintendent
Sarah Poust
Chief Business Official

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF AVERAGE DAILY ATTENDANCE
JUNE 30, 2023
55 Second
Period Annual
Report Report
High Schools
Ninth through Twelfth 961.15 955.57
Total 961.15 955.57

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF INSTRUCTIONAL TIME
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
56 Standard 2022-23
Minutes Actual Instructional
Grade Level Requirement Minutes Days Status
Grade 9 64,800 65,165 180* In compliance
Grade 10 64,800 65,165 180* In compliance
Grade 11 64,800 65,165 180* In compliance
Grade 12 64,800 65,165 180* In compliance
* The District received an approved request from the CDE for two emergency days on December 20, 2022 and December 21, 2022 at Fortuna Union High School and East High School. One emergency on day December 20, 2022 for Academy of the Redwoods due to the power outrage caused by the earthquake.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF CHARTER SCHOOLS
FOR FISCAL YEAR ENDED JUNE 30, 2023
57 Charter School Charter Schools Chartered Included in the District Financial ID Number by the District Statements, or Separate Report There are currently no charter schools chartered by the District.

FORTUNA UNION HIGH SCHOOL DISTRICT

RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET REPORT

WITH AUDITED FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
58 Special
Reserve Fund Bond
for Capital Interest and
General Building Outlay Projects Cafeteria Redemption
Fund Fund Fund Fund Fund

FUND BALANCE
Beginning balance, June 30, 2023, Unaudited Actuals $ 6,605,799 $ 4,007,779 $ 1,914,466 $ 43,297 $ 488,227 Increase in:

Cash in County Treasury 86,296 72,370 18,132 498 3,172
Decrease in:

Fair Value Adjustment to Cash in County Treasury (3,188) (2,673) (669) (18) (117) Balance, June 30, 2023, Audited Financial Statements $ 6,688,907 $ 4,077,476 $ 1,931,929 $ 43,777 $ 491,282 There were no adjustments made to any other funds of the District.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
59 Pass-Through
Assistance Entity
Listing Identifying Federal
Number Grantor and Program Title Number Expenditures
U.S. Department of Education
Passed through California Department of Education
Special Education Cluster (IDEA)

84.027 Special Ed: IDEA Basic Local Assistance Entitlement, Part B, Sec 611 13379 $ 211,010

84.173A Special Ed: ARP IDEA Part B, Sec. 611, Local Assistance Entitlement 15638 41,409 Subtotal Special Education Cluster (IDEA) 252,419
Education Stabilization Fund (ESF) Cluster

84.425 Elementary and Secondary School Emergency Relief II (ESSER II) Fund 15547 * 74,395

84.425 Elementary and Secondary School Emergency Relief III (ESSER III) Fund 15559 * 511,932

84.425U Elementary and Secondary School Emergency Relief III (ESSER III) Fund:

Learning Loss 10155 * 1,068

84.425D Expanded Learning Opportunities (ELO) Grant ESSER II State Reserve 15618 * 102,193

84.425C Expanded Learning Opportunities (ELO) Grant GEER II 15619 * 27,928

84.425U Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Emergency Needs 15620 * 73,447

84.425U Expanded Learning Opportunities (ELO) Grant: ESSER III State Reserve, Learning Loss 15621 * 1,884

84.425 American Rescue Plan - Homeless Children and Youth II (ARP HYC II) 15566 * 3,129 Subtotal Education Stabilization Fund (ESF) Cluster 795,976

84.010 ESSA: Title I, Part A, Basic Grants Low-Income and Neglected 14329 313,450

84.01 ESEA: ESSA School Improvement (CSI) Funding for LEAs 14341 110,816

84.365 ESEA (ESSA): Title II, Part A, Supporting Effective Instruction Local Grants 14346 39,189

84.424 ESSA: Title IV, Part A, Student Support and Academic Enrichment Grants 15396 24,583

84.126 Department of Rehabilitation: Workability II, Transitions Partnership Program 10006 83,522

84.048 Strengthening Career and Technical Education for the 21st Century (Perkins V): Secondary, Sec. 131 14894 39,304
Total U.S. Department of Education 1,659,259
U.S. Department of Agriculture
Passed through California Department of Education

10.555 Child Nutrition: School Programs (NSL Sec 11) 13396 205,005

10.665 Forest Reserve Funds 10044 15,493
Total U.S. Department of Agriculture 220,498
Total Federal Programs $ 1,879,757
* Tested as major program.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF FINANCIAL TRENDS AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
60 Adopted
Budget Actuals Actuals Actuals
2023/2024 2022/2023 2021/2022 2020/2021
General Fund
Revenues and Other Financial
Sources $ 18,608,212 $ 20,110,856 $ 18,976,339 $ 17,336,574 Expenditures 18,987,959 17,610,550 16,177,662 15,720,285 Other Uses and Transfers Out 453,451 1,002,284 926,839 328,424 Total Outgo 19,441,410 18,612,834 17,104,501 16,048,709 Change in Fund Balance (833,198) 1,498,022 1,871,838 1,287,865 Ending Fund Balance $ 5,855,709 $ 6,688,907 $ 5,190,885 $ 3,319,047 Available Reserves ** $ 1,947,581 $ 2,036,690 $ 2,104,677 $ 1,687,310 Designated for Economic
Uncertainties $ 1,947,581 $ 2,036,690 $ 2,104,677 $ 1,687,310 Undesignated Fund Balance $ - $ - $ - $ -
Available Reserves as a
Percentage of Total Outgo 10.0% 10.9% 12.3% 10.5%
All Funds
Total Long-Term Debt $ 23,908,321 $ 24,207,469 $ 20,866,912 $ 26,005,729 Actual Daily Attendance at P-2 994 961 967 1,070
The general fund balance has increased by $4,657,725 over the past three years. The fiscal year 2023-24 budget projects a decrease of $833,198. For a District this size, the State of California recommends available reserves of at least 4 percent of total general fund expenditures, transfers out, and other uses (total outgo). The District met this requirement.

The District has incurred an operating surplus in each of the past three fiscal years and anticipates a deficit in 2023-24.

Total long-term liabilities have decreased by $1,798,260 over the past two years due to decreases in the net pension liability, net OPEB liability and payments for the General Obligation Bonds.

Average Daily Attendance (ADA) has decreased by 109 over the past two years and attendance is budgeted to increase in fiscal year 2023-24.

FORTUNA UNION HIGH SCHOOL DISTRICT

NOTES TO SUPPLEMENTARY INFORMATION
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
61 1. Schedule Of Average Daily Attendance
Average daily attendance is a measurement of the number of pupils attending classes of the District. The purpose of attendance accounting from a fiscal standpoint is to provide the basis on which apportionments of state funds are made to school districts. This schedule provides information regarding the attendance of students at various grade levels and in different programs.

2. Schedule of Instructional Time
This schedule presents information on the amount of instructional time offered by the District and whether the District complied with the provisions of Education Code Sections 46201 through 46206.

Districts must maintain their instructional minutes in accordance with the State’s standard requirement as required by Education Code Section 46201(b).

3. Schedule of Charter Schools
This schedule provides information for the California Department of Education to monitor financial reporting by Charter Schools.

4. Reconciliation of Annual Financial and Budget Report with Audited Financial Statements This schedule provides information necessary to reconcile the Annual Financial and Budget Report to the audited financial statements.

5. Schedule of Expenditures of Federal Awards
The accompanying schedule of expenditures of federal awards includes federal grant activity of the District and is presented under the modified accrual basis of accounting. The May 2023 Edition of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards (Uniform Guidance) requires a disclosure of the financial activities of all federally funded programs. This schedule was prepared to comply with the Uniform Guidance and state requirements. Therefore, some amounts presented in this schedule may differ from amounts used in the preparation of the general purpose financial statements. The District has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.

6. Schedule of Financial Trends and Analysis
This schedule discloses the District's financial trends by displaying past years' data along with current year budget information. These financial trend disclosures are used to evaluate the District's ability to continue as a going concern for a reasonable period of time.

OTHER INDEPENDENT AUDITOR’S REPORTS
James Marta & Company LLP
Certified Public Accountants
Accounting, Auditing, Consulting and Tax
701 Howe Avenue Suite E3, Sacramento, California 95825 Phone: (916) 993-9494 Fax: (916) 993-9489 [email protected] www.jpmcpa.com 62
INDEPENDENT AUDITOR’S REPORT ON STATE COMPLIANCE
Board of Trustees
Fortuna Union High School District
Fortuna, California
Report on Compliance
Opinion
We have audited the Fortuna Union High School District (the “District”) compliance with the requirements specified in the 2022-23 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting applicable to the District’s state program requirements identified below for the year ended June 30, 2023.

In our opinion, Fortuna Union High School District complied, in all material respects, with the laws and regulations of the state programs noted in the table below for the year ended June 30, 2023.

Basis for Opinion
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, and the 2022-23 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting. Our responsibilities under those standards are further described in the Auditor’s 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 the 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. 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 state programs.

Auditor’s 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, and the 2022-23 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting will always detect a material noncompliance when it exists. 63 The risk of not detecting a 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 the state programs as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the 2022-23 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting, 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 consider 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 2022-23 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal controls over compliance. Accordingly, we express no such opinion; and
• Select and test transactions and records to determine the District’s compliance with the state laws and regulations applicable to the following items:

Procedures
Performed
Attendance Yes
Teacher Certification and Misassignments Yes
Kindergarten Continuance No, see below
Independent Study Yes
Continuation Education Yes
Instructional Time Yes
Instructional Materials
General Requirements Yes
Ratio of Administrative Employees to Teachers Yes
Classroom Teacher Salaries Yes
Early Retirement Incentive Program No, see below
Gann Limit Calculation Yes
School Accountability Report Card Yes
Juvenile Court Schools No, see below
Middle or Early College High Schools Yes
K-3 Grade Span Adjustment No, see below
Transportation Maintenance of Effort Yes
Apprenticeship: Related and Supplemental Instruction No, see below Comprehensive School Safety Plan Yes
District of Choice No, see below
Home to School Transportation Reimbursement Yes
Independent Study Certification for ADA Loss Mitigation Yes Description
Local Education Agencies Other Than Charter Schools
64 Procedures
Performed
California Clean Energy Jobs Act No, see below
After/Before Schools Education and Safety Program
General requirements No, see below
After School No, see below
Before School No, see below
Proper Expenditure of Education Protection Account Funds Yes Unduplicated Local Control Funding Formula Pupil Counts Yes Local Control and Accountability Plan Yes
Independent Study-Course Based No, see below
Immunizations No, see below
Educator Effectiveness Yes
Expanded Learning Opportunities Grant (ELO-G) Yes
Career Technical Education Incentive Grant Yes
Transitional Kindergarten No, see below
Procedures
Performed
Attendance No, see below
Mode of Instruction No, see below
Nonclassroom-Based Instruction/Independent Study No, see below Determination of Funding for Nonclassroom-Based
Instruction No, see below
Annual Instructional Minutes - Classroom Based No, see below Charter School Facility Grant Program No, see below
School Districts, County Offices of Education and Charter Schools Description
Charter Schools
Description
We did not perform any procedure related to Kindergarten Continuance, K-3 Grade Span Adjustment and Transitional Kindergarten as the District is a high school district.

We did not perform any procedures related to Early Retirement Incentive, Independent Study-Course Based, Juvenile Court Schools, After/Before School Education and Safety Program, Apprenticeship: Related and Supplemental Instruction, and District of Choice because the District did not offer these programs.

We did not perform any procedure related to California Clean Energy Jobs Act as the District had already filed their final expenditure report in a previous fiscal year.

We did not perform any procedures related to Contemporaneous Records of Attendance for Charter Schools, Mode of Instruction for Charter Schools, Nonclassroom-Based Instruction/Independent Study for Charter Schools, Determination of Funding for Nonclassroom-Based Instruction for Charter Schools, and Charter School Facility Grant Program because the District did not have any charter schools.

We did not perform any procedures related to Immunizations as none of the District’s schools appeared on the lists of schools that did not submit immunization assessment reports to the California Department of 65 Public Health or those that reported combined conditional admission and overdue rates greater than 10 percent in kindergarten and in 7th grade.

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 identify 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 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 a material noncompliance with a compliance requirement 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 that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention from those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s 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 orsignificant 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 2022-23 Guide for Annual Audits of K-12 Local Education Agencies and State Compliance Reporting. Accordingly, this report is not suitable for any other purpose.

James Marta & Company LLP
Certified Public Accountants
Sacramento, California
February 9, 2024
James Marta & Company LLP
Certified Public Accountants
Accounting, Auditing, Consulting and Tax
701 Howe Avenue Suite E3, Sacramento, California 95825 Phone: (916) 993-9494 Fax: (916) 993-9489 [email protected] www.jpmcpa.com 66

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
INDEPENDENT AUDITOR’S REPORT
Board of Trustees
Fortuna Union High School District
Fortuna, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Fortuna Union High School District (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 February 9, 2024.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered 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 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.
67 Compliance and Other Matters
As part of obtaining reasonable assurance about whether 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.

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.

James Marta & Company LLP
Certified Public Accountants
Sacramento, California
February 9, 2024
James Marta & Company LLP
Certified Public Accountants
Accounting, Auditing, Consulting and Tax
701 Howe Avenue Suite E3, Sacramento, California 95825 Phone: (916) 993-9494 Fax: (916) 993-9489 [email protected] www.jpmcpa.com 68
REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF

EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE INDEPENDENT AUDITOR’S REPORT
Board of Education
Fortuna Union High School District
Fortuna, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited Fortuna Union High School District’s (the “District”) compliance with the types of compliance requirements identified as subject to audit in the May 2023 Edition of the OMB 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, 2023. The District’s major federal programs are identified in the summary of auditor’s 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 programs for the year ended June 30, 2023.

Basis for Opinion on Each Major Federal 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); and the audit requirements of the May 2023 Edition of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s 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 issufficient and appropriate to provide a basis for our opinion on compliance for each major federal 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 programs.
69 Auditor’s 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, and the Uniform Guidance 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, ifthere 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 program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, 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, 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 program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s 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.
70 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. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of Fortuna Union High School District as of and for the year ended June 30, 2023, and have issued our report thereon dated February 9, 2024, which contained an unmodified opinion on those financial statements. Our audit was performed for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financialstatements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole.

James Marta & Company LLP
Certified Public Accountants
Sacramento, California
February 9, 2024

FINDINGS AND RECOMMENDATIONS

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
71 Section I – Summary of Audit Results
Financial Statements
Type of auditor’s report issued: Unmodified
Internal control over financial reporting:

Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X None reported Noncompliance material to financial statements
noted? Yes X No
Federal Awards
Internal control over major programs:

Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified not
considered to be material weaknesses? Yes X None reported Type of auditor’s report issued on compliance
for major programs: Unmodified
Any audit findings disclosed that are required to
be reported in accordance with the Uniform
Guidance, Section 200.516(a)? Yes X No
Identification of major programs:

Assistance Listing Numbers Name of Federal Program or Cluster

84.425, 84.425U, 84.425C, 84.425D Education Stabilization Fund Cluster Dollar threshold used to distinguish between
Type A and Type B programs: $750,000
Auditee qualified as low-risk auditee? Yes X No
State Awards
Internal control over state programs:

Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified not
considered to be material weaknesses? Yes X None reported Type of auditor’s report issued on compliance
for state programs: Unmodified

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
72 Section II – Financial Statement Findings
No matters were reported.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
73 Section III – Federal Award Findings and Questioned Costs No matters were reported.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
74 Section IV – State Award Findings and Questioned Costs No matters were reported.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
75 2022-01 – LATE FILING OF AUDIT REPORT (30000)
Criteria
Education Code Section 41020(6.) provides that not later than December 15 an audit report for the preceding fiscal year is to be filed with the County Superintendent of Schools, the California Department of Education, and the State Controller's Office.

Condition
Due to the County of Humboldt's inability to provide any of the Humboldt County school districts with reconciled cash balance reports prior to the initial December 15, 2022 deadline, the District requested and obtained approval for extensions to file the audit report. The approved extended due date was March 13, 2023. The District's audit report was filed prior to the extended date.

Recommendation
We recommend that the District and the auditor work closely in the future to plan for a timely filing of the audit.

Status
Implemented.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
76 2022-02 – INDEPENDENT STUDY (40000)
Criteria
California Education Code Section 517 4 7 states that a local educational agency may claim apportionment credit for independent study only to the extent of the time value of pupil work products, as personally judged in each instance by a certificated teacher employed by the local educational agency.

Condition
During testing of independent study, we noted that two students did not have contracts. Upon further review, and examination of attendance reports, it was noted that the students were not enrolled in the program.

However, attendance was counted. The attendance reports noted these students with a dash after they unenrolled, and continued to count them as present. We reviewed all attendance reports in which the student withdrew from the program and was noted with a dash on the attendance report. Total overstated days on the P-2 and Annual reports were 332 and 482, respectively. In addition, we noted an overstatement of 18 days on the P-2 reports due to clerical errors.

Recommendation
We recommend that the District amend the regular ADA reported on the P-2 and Annual Attendance reports to reduce grade 9-12 ADA by 2.33 and 2.68, respectively.

Status
Implemented.

FORTUNA UNION HIGH SCHOOL DISTRICT

SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
77 2022-03 – CONTINUATION EDUCATION (40000)
Criteria
The bell schedule in the attendance software used to compute hourly attendance should agree to the published bell schedule used for classroom instruction.

Condition
During testing of continuation education, we noted that the bell schedule in the attendance software did not agree to the District's published bell schedule. The software bell schedule was understated by 10 minutes for period 4 and understated 5 minutes for period 5 on Wednesday only. The software bell schedule was 0.92 hours less than the published schedule.

Recommendation
We recommend that the District try to determine the total number of hours understated and adjust student records accordingly. We further recommend the District ensure that the bell schedule entered in the attendance software agrees to the published bell schedule.

Status
Implemented.