Documents › Board of Education, 2026-10-15

report 96 pages

Financial statements for the year ended June 30, 2026, with the independent auditor’s unmodified opinion, financial schedules and notes. The report separately explains a correction to prior bond-premium amortization.

Also attached to this agenda item: CAP External Audit Response 10.6.2026 (129 KB) Final 2026 Croton Harmon UFSD Extraclassroom (230 KB) Final 2026 Croton Harmon UFSD Mgmt. Ltr (5,814 KB) Independent Audit Report - PKF O'Connor Davies, LLP

Croton-Harmon Union Free School District, New York Financial Statements and Supplementary Information Year Ended June 30, 2026 Croton-Harmon Union Free School District, New York Table of Contents Page No. Independent Auditors’ Report 1 Management’s Discussion and Analysis 4 Basic Financial Statements District-Wide Financial Statements Statement of Net Position 17 Statement of Activities 18 Fund Financial Statements Balance Sheet - Governmental Funds 19 Reconciliation of Governmental Funds Balance Sheet to the District-Wide Statement of Net Position 21 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 24 Fiduciary Fund Statement of Changes in Fiduciary Net Position 25 Notes to Financial Statements 26 Required Supplementary Information Budgetary Comparison Schedule – General Fund 55 Notes to Budgetary Comparison Schedule 56 Other Postemployment Benefits Schedule of Changes in the School District’s Total OPEB Liability and Related Ratios 58 New York State Teachers’ Retirement System Schedule of the School District’s Proportionate Share of the Net Pension Liability (Asset) 60 Schedule of Contributions 60 New York State and Local Employees’ Retirement System Schedule of the School District’s Proportionate Share of the Net Pension Liability (Asset) 62 Schedule of Contributions 62 Combining and Individual Fund Financial Statements and Schedules Major Governmental Funds General Fund Comparative Balance Sheet 64 Schedule of Revenues and Other Financing Sources Compared to Budget 65 Schedule of Expenditures and Other Financing Uses Compared to Budget 66 Special Aid Fund Comparative Balance Sheet 69 Comparative Statement of Revenues, Expenditures and Changes in Fund Balance 70 Capital Projects Fund Comparative Balance Sheet 71 Comparative Statement of Revenues, Expenditures and Changes in Fund Balance 72 Project-Length Schedule 73 Croton-Harmon Union Free School District, New York Table of Contents (Concluded) Page No. Non-Major Governmental Funds Combining Balance Sheet 75 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 77 School Lunch Fund Comparative Balance Sheet 79 Comparative Statement of Revenues, Expenditures and Changes in Fund Balance 80 Miscellaneous Special Revenue Fund Comparative Balance Sheet 81 Comparative Statement of Revenues, Expenditures and Changes in Fund Balance 82 Debt Service Fund Comparative Balance Sheet 83 Comparative Statement of Revenues, Expenditures and Changes in Fund Balance 84 Supplementary Information Analysis of Change from Adopted Budget to Final Budget 85 Section 1318 of Real Property Tax Law Limit Calculation 85 Schedule of Net Investment in Capital Assets 86 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 87 PKF O’CONNOR DAVIES LLP 500 Mamaroneck Avenue, Harrison, NY 10528 I Tel: 914.381.8900 I Fax: 914.381.8910 I www.pkfod.com PKF O’Connor Davies LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Independent Auditors’ Report The Board of Education of the Croton-Harmon Union Free School District, New York Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Croton-Harmon Union Free School District, New York (“School District”), as of and for the year ended June 30, 2026, and the related notes to the financial statements, which collectively comprise the School District’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund and the aggregate remaining fund information of the School District, as of June 30, 2026, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the School 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 audit opinions. Emphasis of Matter - Implementation of New Accounting Standard As discussed in Note 2D to the financial statements, during the year ended June 30, 2026, the School District implemented Governmental Accounting Standards Board Statement No. 103, “Financial Reporting Model Improvements”. The implementation of this standard resulted in changes to the presentation of certain financial statement information, including management’s discussion and analysis, unusual or infrequent items, and other applicable financial reporting model presentation requirements. Our opinions are not modified with respect to this matter. Correction of an Error As more fully described in Note 2E to the financial statements, the School District identified and corrected an error relating to the amortization of premium on bonds. This correction resulted in the restatement of net position as of July 1, 2025. Our opinions are not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the School District's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. 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 and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, 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 amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgement, there are conditions or events, considered in the aggregate, that raise substantial doubt about the School District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis and the schedules included under Required Supplementary Information in the accompanying table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with 2 management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit for the year ended June 30, 2026 was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The combining and individual fund financial statements and schedules for the year ended June 30, 2026, are presented for purposes of additional analysis and are not a required part of the basic 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 basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended June 30, 2026 and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole for the year ended June 30, 2026. We also previously 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 basic financial statements of the School District as of and for the year ended June 30, 2025 (not presented herein), and have issued our report thereon dated October 9, 2025 which contained unmodified opinions on the respective financial statements of the governmental activities, each major fund and the aggregate remaining fund information. The combining and individual fund financial statements and schedules for the year ended June 30, 2025 are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and related directly to the underlying accounting and other records used to prepare the 2025 financial statements. The information was subjected to the audit procedures applied in the audit of the 2025 basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare those financial statements or to those financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole for the year ended June 30, 2025. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 7, 2026, on our consideration of the School District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District’s internal control over financial reporting and compliance. PKF O’Connor Davies, LLP Harrison, New York October 7, 2026 3 (This page intentionally left blank) Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 The purpose of management’s discussion and analysis (“MD&A”) is to help Croton-Harmon Union Free School District, New York (“School District”) residents and other readers understand what the financial statements and notes in this financial report say about the School District’s financial health and why it changed since last year. It contains information drawn from those other parts of the report, accompanied by explanations informed by management’s knowledge of the School District’s finances. Overview of the Financial Statements The School District’s financial report contains basic financial statements. Those financial statements present the School District’s finances at both an overall and a detailed level. The Statement of Net Position and Statement of Activities (e.g. the district-wide financial statements) cover the School District’s governmental activities only. ● Governmental activities comprise the School District’s most basic functions, such as instruction, pupil transportation, and cost of food sales, and related support. Governmental activities primarily are financed by real property taxes and federal and state grants. The remaining basic financial statements present the School District’s finances in greater detail. As their name implies, the fund financial statements disaggregate financial information by separate funds to report on the specific purposes for which resources are used or for which they are restricted. Fund financial statements can be reported using two groups of funds as follows: ● Governmental fund financial statements report the School District’s governmental activities on a current-financial-resources and modified-accrual basis. Accordingly, they focus on near-term inflows and outflows of spendable resources and on the fund balances available at year end. The governmental fund statements differ from the district-wide statements because they do not report capital assets and certain long-term liabilities. Reconciliations accompanying the governmental fund statements explain the differences between the fund-level information and the governmental activities reported in the district- wide financial statements. ● Fiduciary fund financial statements report resources held for parties outside the School District. The Custodial Fund reports real property taxes collected for other governments; additions and deductions each totaled $985,392. Contents of the Basic Financial Statements The next section of this financial report contains notes to financial statements, which delve deeper into the School District’s finances as reported in the financial statements. The information in the notes is as important to understanding the School District’s finances as the information in the financial statements. The School District uses notes to (1) present information in greater detail than is possible within the financial statements themselves, (2) explain the nature of amounts reported in the financial statements and how those amounts were determined, and (3) report certain information that does not meet the requirements for inclusion in the financial statements (such as certain contingencies). 4 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Types of Information in the Financial Statements The district-wide financial statements use the economic resources measurement focus and accrual basis of accounting. (See table below) Accordingly, these statements generally report the following types of financial statement elements: ● Assets - resources the School District controls, from short-term like cash to long-term like capital assets. ● Liabilities - amounts the School District owes, from short-term such as accounts payable to long-term such as outstanding debt, compensated absences, pension and postemployment benefit liabilities. ● Deferred outflows/inflows of resources - flows that occurred during the year, or in prior years, that will not be reported as expenses and revenues until the future year to which they are related. ● Revenues and expenses - inflows and outflows of economic resources, respectively, related to the current year. The governmental fund financial statements use the current financial resources measurement focus and modified accrual basis of accounting to report on the sources, uses, and balances of current financial resources. (See table below) The governmental funds do not report nonfinancial assets, such as capital assets, or certain other long-term items, such as general obligation bonds, but they do report the flows of current financial resources related to those long-term items; for example, the proceeds from issuing bonds or selling equipment, as well as principal and interest payments on bonds. 5 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Types of Information Reported in the Financial Statements District- Wide Fiduciary Fund Governmental Fund Types of assets and liabilities Only current financial resources, such as cash, taxes receivable, and accounts payable Types of revenues/additions Only revenues that are measurable and available to finance expenditures of that year Types of expenses/deductions/ expenditures Only expenditures for which the related governmental fund liability is incurred in that year Types of deferred outflows of resources and deferred inflows of resources Current financial resources that flow into and out of the governmental funds during the year that relate to a future year All assets and liabilities, both financial and nonfinancial, short- term and long-term All types of revenues/additions that flow into the entity during the year that relate to that year, regardless of when cash is received All types of expenses/deductions that flow out of the entity during the year that relate to that year, regardless of when cash is paid All types of resources that flow into and out of the entity during the year that relate to a future year Financial Statements More detail about the measurement focus and basis of accounting can be found in the summary of significant accounting policies in the notes to financial statements. 6 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Financial Summary Total % Change 2026-2025 ASSETS Current and Other Assets $ 35,482,328 $ 51,795,606 (31.5%) Net Pension Asset-Proportionate Share 6,594,602 3,241,737 103.4% Capital Assets, net 105,440,914 93,950,108 12.2% Total Assets 147,517,844 148,987,451 (1.0%) DEFERRED OUTFLOWS OF RESOURCES 23,617,055 15,155,246 55.8% LIABILITIES Current Liabilities 44,097,377 49,845,838 (11.5%) Long-term Liabilities 82,881,270 74,857,806 10.7% Total Liabilities 126,978,647 124,703,644 1.8% DEFERRED INFLOWS OF RESOURCES 13,424,635 12,100,894 10.9% NET POSITION Net Investment in Capital Assets 60,710,043 58,228,485 4.3% Restricted 28,688,298 20,920,036 37.1% Unrestricted (58,666,724) (51,810,362) 13.2% Total Net Position $ 30,731,617 $ 27,338,159 12.4% Statement of Net Position 2026 2025 June 30, The table above shows that as of June 30, 2026, the School District’s total net position for governmental activities (assets and deferred outflows minus liabilities and deferred inflows) was $30.7 million, an increase of $3.4 million or 12.4% compared with 2025, including a $1.3 million correction to opening net position. Governmental Activities Current assets decreased by $16,313,278 primarily due to a $24,067,778 decrease in cash, partly offset by a $5,817,756 increase in investments. Capital assets increased by $11,490,806, primarily due to ongoing capital project activity, which is discussed further in the Significant Capital Asset and Long-Term Financing Activity section in this MD&A. Current liabilities decreased by $5,748,461 primarily due to decreases of $3,888,775 in accounts payable and $1,792,829 in bond anticipation notes payable. Deferred outflows of resources increased by $8,461,809 primarily due to an $8,264,551 increase in OPEB-related deferred outflows. Deferred inflows of resources increased by $1,323,741 primarily due to a $2,978,995 increase in pension-related deferred inflows, partly offset by a $1,655,254 decrease in OPEB-related deferred inflows. 7 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Long-term liabilities increased by $8,023,464 from the previous year. The increase was primarily attributable to a $13,806,365 increase in the OPEB liability, notwithstanding a $2,027,081 decrease in compensated absences and pension-related changes, including the decrease in the ERS net pension liability in the current year. These decreases were partially offset by a $13,806,365 increase in the OPEB liability. The School District’s long-term financing activity, including the issuance of general obligation bonds and retirement of outstanding debt, is discussed further in the Significant Capital Asset and Long-Term Financing Activity section in this MD&A. A large component of the School District's net position ($60,710,043) reflects its investment in capital assets, less any related debt used to acquire those assets that are still outstanding. The School District uses these capital assets to provide services to the students, and consequently, these assets are not available for future spending. Although the School District's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources since the capital assets themselves cannot be used to liquidate these liabilities. The restricted portion of net position ($28,688,298) reflects amounts restricted for specific purposes, i.e., payments of tax certiorari claims, capital projects, debt service, retirement contributions, etc. There is a negative balance of unrestricted net position of $58,666,724, primarily due to the recognition of the pension and postemployment benefit liabilities. 8 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Total % Change 2026-2025 REVENUES Program Revenue: Charges for Services $ 810,645 $ 878,311 (7.7%) Operating Grants and Contributions 2,636,554 1,611,205 63.6% Capital Grants and Contributions 1,041,380 571,943 82.1% Total Program Revenues 4,488,579 3,061,459 46.6% General Revenue: Property Taxes and Tax Items 45,467,274 44,262,369 2.7% Non-property tax distribution from County 1,090,625 1,025,492 6.4% Use of Money and Property 590,831 1,076,919 (45.1%) State Formula Aid 10,557,236 9,366,861 12.7% Other 442,517 392,398 12.8% Total General Revenues 58,148,483 56,124,039 3.6% Total Revenues 62,637,062 59,185,498 5.8% EXPENSES General support 10,023,740 9,039,985 10.9% Instruction 43,226,440 42,789,848 1.0% Pupil transportation 4,195,525 4,175,269 0.5% Cost of food sales 1,190,854 954,172 24.8% Other 164,828 202,775 (18.7%) Interest 1,775,502 1,311,001 35.4% Total Expenses 60,576,889 58,473,050 3.6% Change in Net Position 2,060,173 712,448 189.2% Net position - Beginning, as restated 28,671,444 26,625,711 7.7% Net position - Ending $ 30,731,617 $ 27,338,159 12.4% Changes in Net Position 2025 2026 June 30, The table above shows that revenues exceeded expenses in the current year, resulting in an increase in net position. The total net position of the School District’s governmental activities was $30.7 million, an increase of $3.4 million or 12.4% from 2025. The following detailed analyses explain the significant changes in the School District’s financial position and results of operations from the prior year and the primary factors that affected those changes. 9 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Detailed Analyses Governmental Activities Revenues: The School District's total program revenues saw an increase of $1,427,120, general revenues increased by $2,024,444 for a total increase of $3,451,564. The primary drivers of these changes were: ● Operating grants and contributions increased by $1,025,349. More than half the increase is due to an increase in participation in the school lunch program. The increased participation is from the NYS free lunch program initiated by NYS starting 2025-26. The remainder of the increase is from carry-over funds from prior years related to the IDEA 611 grant. ● Capital grants and contributions increased by $469,437. Major items that contributed to this increase are our capital BAN premium in the Debt Service Fund, two DASNY grants received from NYS and a PTA grant in conjunction with our capital facilities project. ● Real property taxes and other tax items increased by $1,204,905. The increase is due to the tax levy increase and PILOT received. ● Unrestricted State aid increased by $1,190,375. The majority of the Increase is due to additional building aid realized from the completion of a large part of the capital facilities project. Expenses: The School District’s expenses increased by $2,103,839. Major factors contributing to the increase included: ● General support increased by $983,755. Operations & Maintenance increase represents more than half of the increase due to regular O&M projects that were held until we were closer to finishing our capital construction project. The remainder of the increase is from Administrative costs including salaries and insurance. ● Instruction increased by $436,592. The increase is due to the District hiring four (4) additional teaching staff for 25-26 as part of its implementation of the District vision plan. ● Interest expense increased by $464,501. The majority of the increase is due to paying an additional $543,094 interest on our Capital BAN for 2025-26. Interest related to the District’s bond was reduced by $96,500. 10 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Governmental Activities - Expenses and Program Revenues $- $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 $45,000,000 $50,000,000 Expenses Program Revenues Governmental Funds As noted earlier, the School District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The School District reports three major funds individually in the governmental fund financial statements, the General Fund, Special Aid Fund and Capital Projects Fund. General Fund - The General Fund is the chief operating fund of the School District. At the end of the current fiscal year, unassigned fund balance of the General Fund was $2.5 million, while total fund balance increased to $27.3 million. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total General Fund expenditures. Unassigned fund balance represents 4.6% of total general fund expenditures, while total fund balance represents 49.7% of that same amount. Of the General Fund’s $27.3 million total fund balance, $20.6 million is restricted and $4.2 million is assigned for specific purposes. The remaining $2.5 million is unassigned and available for general purposes, subject to applicable statutory limitations. The fund balance of the School District’s General Fund increased by $1.9 million during the current fiscal year. Significant factors affecting the change in fund balance included the following: ● Real property tax levy increased by $1,160,203 based on the allowable tax cap calculation. 11 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 ● State aid increased by $1,190,011. The majority of the increase is due to additional building aid realized from the completion of a large part of the capital facilities project. ● Charges for services increased by $317,221 due to the addition of four special education students from other districts, resulting in an increase of approximately $300K. Expenses: ● Instructional expenditures increased by $688,213 due to the addition of four instructional staff members hired during 25-26 and increased purchase of instructional supplies, materials, and furniture. ● General support expenditures increased by $668,877. Operations & Maintenance increase represents more than half of the increase due to regular O&M projects that were paused during last year’s capital construction. This work resumed in 2025-26 as we neared completion of our capital construction project. ● Debt service interest expenditures increased by $434,031. The majority of the increase is due to paying an additional $543,094 in interest on our Capital BAN for 2025-26. Interest related to the District’s bond was reduced by $96,500. Special Aid Fund - Revenues and expenditures in the Special Aid Fund increased by $38,977 and $34,444, respectively, from the prior year. This change from the prior year was primarily attributable to a $157,593 increase in Federal aid, partly offset by a $70,735 decrease in State aid. Significant revenues and expenditures during the current year related to a $48,786 increase in Instruction expenditures and a $14,342 decrease in Pupil transportation expenditures. Activity in the fund may fluctuate from year to year based on the timing and availability of grant funding and related expenditures. Capital Projects Fund - Fund balance in the Capital Projects Fund was a deficit of $37.8 million at year-end, representing a decrease of $12,729,008 from the prior year. The change was primarily attributable to capital outlay expenditures of $15,757,639 exceeding revenues of $225,000 and transfers in of $2,803,631. Significant project activity during the year included capital outlay expenditures of $15,757,639, a decrease of $9,161,904 from the prior year. Additional information regarding capital asset and long-term financing activity is included in the Significant Capital Asset and Long-Term Financing Activity section of this MD&A. Another reason for the decrease in fund balance for the current year was the use of short-term debt. In the case of the Capital Projects Fund, bond anticipation notes (“BANS”) were issued to finance expenditures of certain capital projects. When issued, short-term BANS are reported as a liability on the balance sheet, with no effect on fund balance (i.e., proceeds = liability for debt). However, as the proceeds are spent, the related expenditures cause a decrease in fund balance. BANS in the amount of $39.8 million remained outstanding and were reported as a liability in the Capital Projects Fund at year end, while only $1.5 million of the proceeds remained unspent. Note 2C explains that project deficits are reduced as the notes are redeemed or converted to permanent financing. 12 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Significant Capital Asset and Long-Term Financing Activity Capital Assets - The School District’s investment in capital assets for its governmental activities as of June 30, 2026, amounts to $105.4 million (net of accumulated depreciation). This investment in capital assets includes land, land improvements, buildings and improvements, furniture and equipment, vehicles, and construction-in-progress. The total increase in capital assets for the current fiscal year was $11.5 million. Capital Assets Land $ 810,100 $ 810,100 Construction-in-progress 35,258 29,353,860 Land, Buildings and Improvements 140,615,489 96,513,990 Furniture and Equipment 1,762,918 1,792,727 Vehicles 5,361,296 4,794,279 Total 148,585,061 133,264,956 Less: Accumulated Depreciation (43,144,147) (39,314,848) Net Capital Assets $ 105,440,914 $ 93,950,108 2025 2026 June 30, Significant capital asset activity during the current fiscal year included the following: ● The majority of capital project work was completed in 2026, decreasing “construction in progress” and increasing “land, buildings and improvements”. ● Vehicles increased due to the purchase of two electric 66-passenger buses and two smaller gas buses purchased during the 25-26 school year. Additional information on the School District’s capital assets can be found in Note 3B of this report. Long-term financing - At the end of the current fiscal year, the School District had total long- term financing liabilities of $6.5 million, composed of general obligation bonds, unamortized premiums on bonds and energy performance contracts. During the current year, long-term financing liabilities decreased by $3.7 million. 13 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Long-Term Financings General Obligation Bonds $ 3,630,000 $ 5,320,000 Premium on Bonds 268,031 1,789,645 Energy Performance Contracts 2,581,317 3,125,523 Total $ 6,479,348 $ 10,235,168 2025 2026 June 30, The $3.6 million general obligation bonds are bonded debt, backed by the full faith and credit of the School District. During the current year, the School District did not issue general obligation bonds. State statutes limit the amount of general obligation debt a governmental entity may issue to 10% of the full valuation of taxable property within the jurisdiction. The current debt limitation for the School District is $287,103,116, which is significantly more than the School District’s outstanding general obligation debt which is currently approximately 1%. Additional information on the School District’s long-term debt can be found in Note 3E of this report. Currently Known Facts, Decisions or Conditions The School District is aware of the following items that will impact future finances and were considered in developing the following fiscal year’s budget Enrollment: Based on our demographic study updated for 23-24 the projections show a steady decline in enrollment through 2033. 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 K-4 591 565 571 551 555 567 588 583 578 617 5-8 504 485 520 494 494 472 473 463 457 461 9-12 512 506 488 475 484 486 509 509 478 474 Total 1,607 1,556 1,579 1,520 1,533 1,525 1,570 1,555 1,513 1,552 As the chart above from the district’s demographic study reflects, over the past 10 years, the largest decline has been in grades 5–8, with enrollment dropping over 8.5%. High school enrollment has decreased by about 7.4%, while elementary (K–4) has remained the most stable, down only 4.4%. Overall, the district is projected to serve approximately 55 fewer students than in 2017-18, representing a 3.4% decrease. While the decreases have been small on an annual basis, staffing has increased due to increasing mandates and student needs in the areas of social, emotional, and academic support services. 14 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 Student enrollment trends directly impact both district expenses and revenue. Increases in enrollment add to costs, while constrained revenue growth limits the district’s ability to respond to these changes. Conversely, decreases in enrollment reduce state aid, which, combined with the fact that the tax levy is capped at 2% growth, creates a larger budgetary gap to be addressed with limited revenue sources, since state aid and the levy are the district’s primary funding sources. Budget: It is clear that the School District is heavily dependent upon real property taxes as it represents approximately 75% of School District budgeted revenues in 2025-2026 (inclusive of STAR). Beginning in the 2012–2013 school year, New York State capped annual property tax levy growth at the lesser of 2% or the rate of inflation, before allowable adjustments. Since its implementation, the allowable tax levy growth has increasingly lagged behind rising operational expenditures— including salaries, benefits and service contracts—many of which are increasing at or above CPI. As costs continue to rise, the District may need to further increase allocations of fund balances and reserve funds, to balance future budgets. Additionally, non-tax revenue sources such as tuition, county sales tax, and State aid remain limited and outside of the District’s control. Consequently, more and more districts are facing the need to consider exceeding the tax cap to maintain core educational programs, a possibility that underscores the importance of our ongoing long-term financial planning. As a result, developing a fiscally responsible budget that meets student academic needs and adheres to state and federal mandates requires careful, efficient, and transparent management of District operations. Our budget planning is guided by a commitment to maximizing resources that directly impact student achievement while maintaining the long-term fiscal stability of the District. The annual budget process is fundamentally shaped by several critical and interrelated factors: ● Enrollment and Staffing: Budget planning must project and respond to anticipated enrollment changes (e.g., student population growth or decline by grade level) and their direct impact on necessary staffing levels, class sizes, and facility usage. ● Revenue Generation: Because revenue growth drives the budget, periods of lower-than- anticipated revenue increases necessitate tighter control of expenses and the identification of non-essential spending. Key revenue sources, including local property taxes, State aid (e.g., foundation aid), and Federal grants, are thoroughly analyzed for reliability and growth projections. ● Essential Tradeoffs: The constraints of limited resources often require necessary tradeoffs that may impact services, staffing, and capital improvements. These decisions are made strategically to ensure that core instructional programs remain protected. ● Compliance and Mandates: The budget must fully fund all required expenditures for contractual obligations (e.g., employee salaries and benefits), debt service payments, and specific, non-discretionary expenses mandated by law (e.g., special education services). 15 Croton-Harmon Union Free School District, New York Management’s Discussion and Analysis June 30, 2026 For example, though the State has rolled back the EV mandate by five years, there is still infrastructure work to be done in order to meet the mandate. It is unknown at this time if the delay of five years will be sufficient to achieve upgrades needed for the mandate. The District will continue to work with Con Edison to achieve the needed upgrades. Additionally, though each year’s budget process stands on its own, a clear and well-articulated three-to-five-year long-range financial plan is essential to ensure efficacy and sustainability. This strategic outlook involves: ● Fund Balance Management: Maintaining an appropriate, policy-level unassigned fund balance (reserve) to mitigate unexpected fluctuations in revenue or unforeseen emergency expenses, thereby protecting against financial instability. ● Capital Improvement: Identifying and setting aside resources for planned capital projects (e.g., facility repair, technology infrastructure upgrades) to prevent the costly deferral of maintenance. ● Contingency Planning: Proactively developing scenarios and strategies to address potential economic downturns or changes in state funding formulas. The 2026-2027 budget is $62,762,808 and reflects management’s current assumptions regarding State aid, the property-tax levy, enrollment, collective bargaining and staffing costs, and other operating factors. The budget includes the appropriation of $2,716,925 of General Fund Balance and $1,200,000 in Reserves. Additionally, the School District retained Unassigned Fund Balance at the statutory 4 percent limit. Management will monitor actual revenues and expenditures and adjust operations as conditions warrant. Requests for Information This financial report is designed to provide a general overview of the School District’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Croton-Harmon Union Free School District Attn: Denise Harrington-Cohen Assistant Superintendent for Business 10 Gerstein Street, Croton-on-Hudson, NY 10520. 16 Croton-Harmon Union Free School District, New York Statement of Net Position ASSETS Cash and equivalents $ 11,048,620 Investments 21,270,836 Receivables Accounts 17,200 State and Federal aid 2,552,573 Due from other governments 574,841 Prepaid expenses 3,200 Inventories 15,058 Net pension asset - TRS 6,594,602 Capital assets Not being depreciated 845,358 Being depreciated/amortized, net 104,595,556 Total Assets 147,517,844 DEFERRED OUTFLOWS OF RESOURCES Pension related 9,583,919 OPEB related 14,033,136 Total Deferred Outflows of Resources 23,617,055 LIABILITIES Accounts payable 1,014,220 Accrued liabilities 174,762 Bond anticipation notes payable 39,839,766 Employee payroll deductions 1,779 Deposits payable 82,683 Due to other governments 908 Due to retirement systems 2,828,540 Unearned revenues 103,857 Accrued interest payable 50,862 Non-current liabilities Due within one year 4,348,094 Due in more than one year 78,533,176 Total Liabilities 126,978,647 DEFERRED INFLOWS OF RESOURCES Pension related 7,186,890 OPEB related 6,237,745 Deferred Inflows of Resources 13,424,635 NET POSITION Net investment in capital assets 60,710,043 Restricted Capital projects 421,060 Capital improvements 10,747,556 Debt service 1,512,889 Repairs 319,532 Tax certiorari 2,040,047 Workers' compensation benefits 423,143 ERS retirement contribution 2,318,033 TRS retirement contribution 2,456,789 Net pension asset - TRS 6,594,602 Unemployment insurance 283,889 Insurance 1,365,780 Special revenues Extraclassroom 146,570 Other 58,408 Unrestricted (58,666,724) Total Net Position $ 30,731,617 Governmental Activities June 30, 2026 The notes to financial statements are an integral part of this statement. 17 Croton-Harmon Union Free School District, New York Statement of Activities Year Ended June 30, 2026 Functions/Programs Governmental activities General support $ 10,023,740 $ 48,616 $ 236,718 $ - $ (9,738,406) Instruction 43,226,440 559,624 1,282,559 225,000 (41,159,257) Pupil transportation 4,195,525 - 78,740 - (4,116,785) Cost of food sales 1,190,854 202,405 858,553 - (129,896) Other 164,828 - 179,984 - 15,156 Interest 1,775,502 - - 816,380 (959,122) Total Governmental Activities $ 60,576,889 $ 810,645 $ 2,636,554 $ 1,041,380 (56,088,310) General revenues Real property taxes 43,740,411 Other tax items Payments in lieu of taxes 44,702 School tax relief reimbursement 1,682,161 Non-property taxes Non-property tax distribution from County 1,090,625 Unrestricted use of money and property 590,831 Sale of property and compensation for loss 102,858 Unrestricted State aid 10,557,236 Miscellaneous 339,659 Total General Revenues 58,148,483 Change in Net Position 2,060,173 NET POSITION Beginning, as reported 27,338,159 Correction of an error 1,333,285 Beginning, as restated 28,671,444 Ending $ 30,731,617 Program Revenues Net (Expense) Operating Capital Revenue and Charges for Grants and Grants and Changes in Net Position Expenses Services Contributions Contributions The notes to financial statements are an integral part of this statement. 18 Croton-Harmon Union Free School District, New York Balance Sheet Governmental Funds Capital General ASSETS Cash and equivalents $ 7,231,935 $ - $ 1,937,416 Investments 21,270,836 - - Receivables Accounts 17,200 - - State and Federal aid 1,728,799 566,694 114,687 Due from other governments 574,841 - - Due from other funds 497,556 - - Prepaid expenditures 3,200 - - Inventories - - - Total Assets $ 31,324,367 $ 566,694 $ 2,052,103 LIABILITIES AND FUND BALANCES (DEFICIT) Liabilities Accounts payable $ 888,590 $ 42,104 $ 1,165 Accrued liabilities 173,074 - - Bond anticipation notes payable - - 39,839,766 Employee payroll deductions 1,779 - - Due to other funds - 497,556 41,635 Due to other governments - - - Due to retirement systems 2,828,540 - - Deposits payable 82,683 - - Unearned revenues - 27,034 - Total Liabilities 3,974,666 566,694 39,882,566 Fund balances (deficit) Nonspendable 3,200 - - Restricted 20,621,594 - - Assigned 4,214,395 - - Unassigned 2,510,512 - (37,830,463) Total Fund Balances (Deficit) 27,349,701 - (37,830,463) Total Liabilities and Fund Balances (Deficit) $ 31,324,367 $ 566,694 $ 2,052,103 The notes to financial statements are an integral part of this statement. June 30, 2026 Projects Special Aid 19 $ 1,879,269 $ 11,048,620 - 21,270,836 - 17,200 142,393 2,552,573 - 574,841 41,635 539,191 - 3,200 15,058 15,058 $ 2,078,355 $ 36,021,519 $ 82,361 $ 1,014,220 1,688 174,762 - 39,839,766 - 1,779 - 539,191 908 908 - 2,828,540 - 82,683 76,823 103,857 161,780 44,585,706 15,058 18,258 1,717,867 22,339,461 183,650 4,398,045 - (35,319,951) 1,916,575 (8,564,187) $ 2,078,355 $ 36,021,519 Total Governmental Funds Non-Major Governmental 20 (This page intentionally left blank) Croton-Harmon Union Free School District, New York Reconciliation of Governmental Funds Balance Sheet to the District-Wide Statement of Net Position June 30, 2026 Amounts Reported for Governmental Activities in the Statement of Net Position are Different Because Total Fund Balances - Governmental Funds $ (8,564,187) Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. Capital assets - non-depreciable 845,358 Capital assets - depreciable/amortizable 147,739,703 Accumulated depreciation/amortization (43,144,147) 105,440,914 Differences between expected and actual experiences, assumption changes and net differences between projected and actual earnings and contributions subsequent to the measurement date for the postretirement benefits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of resources on the statement of net position. Deferred outflows - pension related 9,583,919 Deferred outflows - OPEB related 14,033,136 Deferred inflows - pension related (7,186,890) Deferred inflows - OPEB related (6,237,745) 10,192,420 Other long-term assets are not available to pay for current-period expenditures and, therefore, are either deferred or not reported in the funds. Net pension asset - TRS 6,594,602 Long-term liabilities that are not due and payable in the current period and, therefore, are not reported in the funds. General obligation bonds payable (3,630,000) Energy performance contract payable (2,581,317) Compensated absences (4,956,774) Net pension liability - ERS (938,887) Total OPEB liability (70,506,261) Accrued interest payable (50,862) (82,664,101) Governmental funds report the effect of premiums, discounts, and refundings and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. Premium on general obligation bonds (268,031) Net Position of Governmental Activities $ 30,731,617 The notes to financial statements are an integral part of this statement. 21 Croton-Harmon Union Free School District, New York Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended June 30, 2026 Capital General Projects REVENUES Real property taxes $ 43,740,411 $ - $ - Other tax items 1,726,863 - - Non-property taxes 1,090,625 - - Charges for services 559,624 - - Use of money and property 1,254,977 - - Sale of property and compensation for loss 102,858 - - State aid 10,698,787 429,497 200,000 Federal aid 26,507 632,711 - Food sales - - - Miscellaneous 339,659 6,260 25,000 Total Revenues 59,540,311 1,068,468 225,000 EXPENDITURES Current General support 7,934,721 - - Instruction 29,441,460 1,028,956 - Pupil transportation 2,748,503 78,740 - Employee benefits 10,692,107 - - Cost of food sales - - - Other - - - Debt service Principal 2,234,206 - - Interest 1,954,805 - - Capital outlay - - 15,757,639 Total Expenditures 55,005,802 1,107,696 15,757,639 Excess (Deficiency) of Revenues Over Expenditures 4,534,509 (39,228) (15,532,639) OTHER FINANCING SOURCES (USES) Transfers in 408,492 39,228 2,803,631 Transfers out (3,072,859) - - Total Other Financing Sources (Uses) (2,664,367) 39,228 2,803,631 Net Change in Fund Balances 1,870,142 - (12,729,008) FUND BALANCES (DEFICIT) Beginning of Year 25,479,559 - (25,101,455) End of Year $ 27,349,701 $ - $ (37,830,463) The notes to financial statements are an integral part of this statement. Special Aid 22 $ - $ 43,740,411 - 1,726,863 - 1,090,625 - 559,624 50,765 1,305,742 - 102,858 604,697 11,932,981 253,856 913,074 202,405 202,405 691,560 1,062,479 1,803,283 62,637,062 - 7,934,721 - 30,470,416 - 2,827,243 - 10,692,107 1,156,888 1,156,888 164,828 164,828 - 2,234,206 - 1,954,805 - 15,757,639 1,321,716 73,192,853 481,567 (10,555,791) 230,000 3,481,351 (408,492) (3,481,351) (178,492) - 303,075 (10,555,791) 1,613,500 1,991,604 $ 1,916,575 $ (8,564,187) Total Funds Governmental Non-Major Governmental 23 Croton-Harmon Union Free School District, New York Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2026 Amounts Reported for Governmental Activities in the Statement of Activities are Different Because Net Change in Fund Balances - Total Governmental Funds $ (10,555,791) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation/amortization expense. Capital outlay expenditures 15,946,814 Depreciation expense (4,456,008) 11,490,806 Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of bond and other debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Also, governmental funds report the effect of premiums, discounts and similar items when debt is first issued, whereas, these amounts are deferred and amortized on the statement of activities. Principal paid on general obligation bonds 1,690,000 Principal paid on energy performance contract 544,206 2,234,206 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences 137,515 Changes in pension liabilities and related deferred outflows and inflows of resources 2,460,694 Changes in OPEB liabilities and related deferred outflows and inflows of resources (3,886,560) Accrued interest (9,026) Amortization of premium 188,329 (1,109,048) Change in Net Position of Governmental Activities $ 2,060,173 The notes to financial statements are an integral part of this statement. 24 Croton-Harmon Union Free School District, New York Statement of Changes in Fiduciary Net Position Fiduciary Fund Year Ended June 30, 2026 ADDITIONS Real property taxes collected for other governments $ 985,392 DEDUCTIONS Payments of real property taxes to other governments 985,392 Net Change in Fiduciary Net Position - NET POSITION Beginning of Year - End of Year $ - Custodial Fund The notes to financial statements are an integral part of this statement. 25 Croton-Harmon Union Free School District, New York Notes to Financial Statements June 30, 2026 Note 1 - Summary of Significant Accounting Policies The Croton-Harmon Union Free School District, New York (“School District”), as presently constituted, operates in accordance with the provisions of the Education Law of the State of New York. The Board of Education is the legislative body responsible for overall operation of the School District and is elected by the voters of the School District. The Superintendent serves as the chief executive officer. The School District's primary function is to provide education for its pupils. Services such as transportation of pupils, administration, finance and plant maintenance support the primary function. The financial statements of the School District have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to local governmental units and the Uniform System of Accounts as prescribed by the State of New York. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The School District's significant accounting policies are described below: A. Financial Reporting Entity The financial reporting entity consists of a) the primary government, which is the School District, b) organizations for which the School District is financially accountable and c) other organizations for which the nature and significance of their relationship with the School District are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete as set forth by GASB. In evaluating how to define the School District, for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit in the School District’s reporting entity was made by applying the criteria set forth by GASB, including legal standing, fiscal dependency and financial accountability. Based upon the application of these criteria, there are no other entities which would be included in the financial statements. The School District participates in the Putnam-Northern Westchester Board of Cooperative Educational Services ("BOCES"), a jointly governed entity. BOCES is a voluntary cooperative association of school districts in a geographic area that share planning, services and programs which provide educational and support services. BOCES' governing board is elected based on the vote of members of the participating district's governing boards. BOCES' budget is comprised of separate budgets for administrative, program and capital costs. BOCES charges the districts for program costs based on participation and for administrative and capital costs. Each component school district's share of administrative and capital costs is determined by the ratio which the component school district's value of taxable properties in effect at the time of adoption bears to the total full value of taxable properties of all component school districts within BOCES as defined by Education Law. Copies of BOCES' financial statements can be requested from Putnam-Northern Westchester BOCES, 200 BOCES Drive, Yorktown Heights, New York 10598. B. District-Wide Financial Statements The district-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all non-fiduciary activities of the primary government as a whole. For the most part, the effect of interfund activity has been removed from these statements, except for interfund services provided and used. 26 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) The Statement of Net Position presents the financial position of the School District at the end of its fiscal year. The Statement of Activities demonstrates the degree to which direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods or services, or privileges provided by a given function or segment, (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment and (3) interest earned on grants that is required to be used to support a particular program. Taxes and other items not identified as program revenues are reported as general revenues. The School District does not allocate indirect expenses to functions in the Statement of Activities. While separate district-wide and fund financial statements are presented, they are interrelated. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter is excluded from the district-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. C. Financial Statements The accounts of the School District are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts, which comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balances, revenues and expenditures. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance related legal and contractual provisions. The School District maintains the minimum number of funds consistent with legal and managerial requirements. The focus of governmental fund financial statements is on major funds as that term is defined in professional pronouncements. Each major fund is to be presented in a separate column, with non-major funds, if any, aggregated and presented in a single column. Fiduciary funds are reported by type. Since the governmental fund statements are presented on a different measurement focus and basis of accounting than the district-wide statements’ governmental activities column, a reconciliation is presented on the pages following, which briefly explains the adjustments necessary to transform the fund based financial statements into the governmental activities column of the district-wide presentation. The School District’s resources are reflected in the fund financial statements in two broad fund categories, in accordance with generally accepted accounting principles as follows: Fund Categories a. Governmental Funds - Governmental Funds are those through which most general government functions are financed. The acquisition, use and balances of expendable financial resources and the related liabilities are accounted for through governmental funds. The following represents the School District’s major governmental funds. General Fund - The General Fund constitutes the primary fund of the School District and is used to account for and report all financial resources not accounted for and reported in another fund. Special Revenue Funds - Special revenue funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The 27 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) major special revenue fund of the School District is the Special Aid Fund. The Special Aid Fund is used to account for special projects or programs supported in whole or in part with Federal, State or local funds. The major revenues of this fund are State and Federal aid. Capital Projects Fund - The Capital Projects Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditures for capital outlays, including the acquisition or construction of major capital facilities and other capital assets. The School District also reports the following non-major governmental funds: Special Revenue Funds: School Lunch Fund - The School Lunch Fund is used to record the operations of the breakfast, lunch and milk programs of the School District. Miscellaneous Special Revenue Fund - The Miscellaneous Special Revenue Fund is used to account for assets held by the School District in accordance with grantor or contributor stipulations. Among the activities included in the Miscellaneous Special Revenue Fund are extraclassroom activity funds. Debt Service Fund - The Debt Service Fund is used to account for and report financial resources that are restricted, committed or assigned to expenditures for principal and interest, and for financial resources that are being accumulated for principal and interest maturing in future years. b. Fiduciary Fund (Not Included in District-Wide Financial Statements) - The Fiduciary Funds are used to account for assets held by the School District on behalf of others. The School District reports real property taxes collected on behalf of other governments in this fund. D. Measurement Focus, Basis of Accounting and Financial Statement Presentation The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources (current assets less current liabilities) or economic resources (all assets and liabilities). The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The district-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as is the Fiduciary Fund. 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 imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they have been earned and they are both measurable and available. Revenues are considered to 28 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Property taxes are considered to be available if collected within sixty days of the fiscal year end. If expenditures are the prime factor for determining eligibility, revenues from Federal and State grants are recognized as revenues when the expenditure is made, and the amounts are expected to be collected within one year of the fiscal year end. A ninety-day availability period is generally used for revenue recognition for most other governmental fund revenues. 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, net pension liabilities and other postemployment benefit liabilities are recognized later based on specific accounting rules applicable to each, generally when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds from the issuance of long-term debt are reported as other financing sources. E. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position or Fund Balances Cash and Equivalents, Investments and Risk Disclosure Cash and Equivalents - Cash and equivalents consist of funds deposited in demand deposit accounts, time deposit accounts and short-term investments with original maturities of less than three months from the date of acquisition. The School District's deposits and investment policies are governed by State statutes. The School District has adopted its own written investment policy, which provides for the deposit of funds in FDIC insured commercial banks or trust companies located within the State. The School District is authorized to use demand deposit accounts, time deposit accounts and certificates of deposit. Collateral is required for demand deposit accounts, time deposit accounts and certificates of deposit of at least 102% of all deposits not covered by Federal deposit insurance. The School District has entered into custodial agreements with the various banks which hold their deposits. These agreements authorize the obligations that may be pledged as collateral. Such obligations include, among other instruments, obligations of the United States and its agencies and obligations of the State and its municipal and school district subdivisions. The School District utilizes a pooled investment concept for all governmental funds to facilitate its investment program. Investment income from this pooling is allocated to the respective funds based upon the sources of funds invested. Investments - Permissible investments include obligations of the U.S. Treasury, U.S. Agencies, repurchase agreements and obligations of New York State or its political subdivisions. The School District follows the provisions of GASB Statement No. 72, “Fair Value Measurement and Application”, which defines fair value and establishes a fair value hierarchy organized into three levels based upon the input assumptions used in pricing assets. Level 1 inputs have the highest reliability and are related to assets with unadjusted quoted prices in active markets. Level 2 inputs relate to assets with other than quoted prices 29 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) in active markets which may include quoted prices for similar assets or liabilities or other inputs which can be corroborated by observable market data. Level 3 inputs are unobservable inputs and are used to the extent that observable inputs do not exist. The School District participates in the New York Cooperative Liquid Assets Securities System (“NYCLASS”), a cooperative investment pool organized under a municipal cooperation agreement pursuant to Articles 3-A and 5-G of General Municipal Law of the State of New York. NYCLASS is administered by a governing board elected by its participants. The governing board has retained PTMA Investment Advisors as its investment adviser. PTMA Investment Advisors is registered with the Securities and Exchange Commission (“SEC”) and is subject to applicable federal securities laws and SEC oversight in its capacity as investment adviser. The SEC registration and oversight apply to the investment adviser and do not constitute SEC registration, approval, or direct regulation of NYCLASS. NYCLASS is authorized to invest in obligations issued or guaranteed by the United States and certain of its agencies, obligations of the State of New York and repurchase agreements, in accordance with its investment policies. These investments are reported at fair value. NYCLASS issues separate audited financial statements for its fiscal year ending June 30th. At June 30, 2026, the School District’s investment in NYCLASS was $21,270,836, which equaled the value of its pool shares. NYCLASS’s investment policy limits the maximum remaining maturity of any individual investment to 397 days and the maximum weighted- average maturity of the portfolio to 60 days. NYCLASS is rated AAAm by S&P Global Ratings. An AAAm principal stability fund rating indicates S&P Global Ratings’ opinion that the pool has an extremely strong capacity to maintain principal stability and limit exposure to principal losses due to credit risk. The rating is not a guarantee of performance or principal and is subject to change. An investment in NYCLASS is not insured or guaranteed by the FDIC or any other governmental agency. Additional information, including NYCLASS’s annual report and audited financial statements, is available at www.newyorkclass.org. Risk Disclosure Interest Rate Risk - Interest rate risk is the risk that the government will incur losses in fair value caused by changing interest rates. The School 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 changing interest rates. Generally, the School District does not invest in any long-term investment obligations. Custodial Credit Risk - Custodial credit risk is the risk that in the event of a bank failure, the School District’s deposits may not be returned to it. GASB Statement No. 40, “Deposit and Investment Risk Disclosures – an amendment of GASB Statement No. 3”, directs that deposits be disclosed as exposed to custodial credit risk if they are not covered by depository insurance and the deposits are either 30 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) uncollateralized, collateralized by securities held by the pledging financial institution or collateralized by securities held by the pledging financial institution’s trust department but not in the School District’s name. The School District’s aggregate bank balances that were not covered by depository insurance were not exposed to custodial credit risk at June 30, 2026. Credit Risk - Credit risk is the risk that an issuer or other counterparty will not fulfill its specific obligation even without the entity’s complete failure. The School District does not have a formal credit risk policy other than restrictions to obligations allowable under General Municipal Law of the State of New York. Concentration of Credit Risk - Concentration of credit risk is the risk of loss attributable to the magnitude of the School District’s investments in a single issuer. The School District’s investment policy requires it to maintain a list of approved financial institutions and dealers and establish appropriate limits on investments with each. The policy also requires institutions with which the School District conducts business to be creditworthy. The Treasurer or Deputy Treasurer is responsible for evaluating their financial position and reviewing the list of proposed depositories, trading partners, and custodians at least monthly. Property Taxes Receivable - Real property taxes attach as an enforceable lien on real property as of July 1st and are levied and payable in September and January. The Town of Cortlandt and Town of Yorktown, New York (“Towns”) are responsible for the billing and collection of the taxes. The Towns guarantee the full payment of the School District warrant and assume responsibility for uncollected taxes. Other Receivables - Other receivables include amounts due from other governments and individuals for services provided by the School District. Receivables are recorded and revenues recognized as earned or as specific program expenditures are incurred. Allowances are recorded when appropriate. Due From/To Other Funds - During the course of its operations, the School District has numerous transactions between funds to finance operations, provide services and construct assets. To the extent that certain transactions between funds had not been paid or received as of June 30, 2026, balances of interfund amounts receivable or payable have been recorded in the fund financial statements. Prepaid Expenses/Expenditures – Certain payments to vendors reflect costs applicable to future accounting periods, and are recorded as prepaid items using the consumption method in both the district-wide and fund financial statements. Prepaid expenses/expenditures consist of miscellaneous costs which have been satisfied prior to the end of the fiscal year, but represent items which have been provided for in the subsequent year’s budget and will benefit such periods. Reported amounts are equally offset by nonspendable fund balance in the fund financial statements, which indicates that these amounts do not constitute “available spendable resources” even though they are a component of current assets. Inventories - Inventories in the School Lunch Fund consist of food and supplies and are recorded at cost on a first-in, first-out basis or, in the case of surplus food, at a stated value, which approximates market. These inventories consist primarily of items held for consumption. The cost is 31 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) recorded as inventory at the time individual inventory items are purchased. The School District uses the consumption method to relieve inventory. In the fund financial statements, reported amounts are equally offset by nonspendable fund balance, which indicates that these amounts do not constitute “available spendable resources” even though they are a component of current assets. Capital Assets - Capital assets are tangible and intangible assets, which include property, plant and equipment, and are reported in the governmental activities column in the district-wide financial statements. Capital assets are defined by the School District as assets with an initial, individual cost of more than $10,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. Acquisition value is the price that would be paid to acquire an asset with equivalent service potential on the date of the donation. Major outlays for capital assets and improvements are capitalized as projects are constructed. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives is not capitalized. Land and construction-in-progress are not depreciated. Property, plant and equipment of the School District are depreciated using the straight-line method over the following estimated useful lives. Life Class in Years Buildings and Improvements 20-50 Machinery and Equipment 5-20 The costs associated with the acquisition or construction of capital assets are shown as capital outlay expenditures on the governmental fund financial statements. Capital assets are not shown on the governmental fund balance sheet. Unearned Revenues - Unearned revenues arise when assets are recognized before revenue recognition criteria have been satisfied. In the district-wide financial statements, unearned revenues consist of revenue received in advance and/or grants received before the eligibility requirements have been met. Unearned revenues in the fund financial statements are those where asset recognition criteria have been met, but for which revenue recognition criteria have not been met. The School District has reported unearned revenues of $27,034 for State and Federal aid received in advance in the Special Aid Fund and $31,554 for student meal monies and $45,269 for federal grant funds received in advance in the School Lunch Fund. Such amounts have been deemed to be measurable but not "available" pursuant to generally accepted accounting principles. Deferred Outflows/Inflows of Resources - In addition to assets, the statement of financial position includes a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net assets that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then. 32 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) In addition to liabilities, the statement of financial position includes a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net assets that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The School District reported deferred outflows of resources and deferred inflows of resources in relation to its pension and other postemployment benefit liabilities in the district-wide financial statements. These amounts are detailed in the discussion of the School District’s pension and other postemployment benefit liabilities in Note 3E. Long-term Liabilities - In the district-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed as incurred. In the fund financial statements, governmental funds recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as Capital Projects Fund expenditures. Compensated Absences - The liability for compensated absences represents the sick time (“leave”/“leave days”) and salary related payments which have been earned for services previously rendered by employees in accordance with the School District’s various collective bargaining agreements, accumulates, is allowed to be carried over to subsequent year(s) and is deemed more likely than not (by management) to be used for time off or otherwise paid/settled in the future. The liability is calculated based on each employee’s rate of pay and the number of unused leave days accumulated as of year-end, management’s assumption that the likelihood of future use (either by use during employment or settlement/payment upon separation from service) is probable, and the salary-related payments that are directly and incrementally associated with payments for the leave. The School District utilizes historical data of past usage patterns to estimate the expected usage and payment of compensated absences. The liability for compensated absences is reflected in the district-wide financial statements as current and long-term liabilities. In the fund financial statements, only the compensated absences liability that has matured through employee resignation or retirement and is expected to be payable from expendable available financial resources is reported. The financial reporting of these amounts are presented in accordance with the provisions of GASB Statement No. 101, “Compensated Absences”. Net Pension Liability (Asset) - The net pension liability (asset) represents the School District’s proportionate share of the net pension liability (asset) of the New York State and Local Employees’ Retirement System and the New York State Teachers’ Retirement System. The financial reporting of these amounts are presented in accordance with the provisions of GASB Statement No. 68, “Accounting and Financial Reporting for Pensions” and GASB Statement No. 71, “Pension Transition for Contributions Made Subsequent to the Measurement Date – An Amendment of GASB Statement No. 68”. Other Postemployment Benefit Liability (“OPEB”) - In addition to providing pension benefits, the School District provides health care benefits for certain retired employees and their survivors. The 33 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) financial reporting of these amounts is presented in accordance with the provisions of GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other than Pensions”. Net Position - Net position represents the difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources. Net position is comprised of three components: net investment in capital assets, restricted, and unrestricted. Net investment in capital assets consists of capital assets, net of accumulated depreciation/amortization and reduced by outstanding balances of bonds and other debt that are attributable to the acquisition, construction, or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt are also included in this component of net position. Restricted net position consists of restricted assets and deferred outflows of resources reduced by liabilities and deferred inflows of resources related to those assets. Assets are reported as restricted when constraints are placed on asset use either through the enabling legislation adopted by the School District or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Restricted net position for the School District includes restricted for capital projects, capital improvements, debt service, repairs, tax certiorari, workers’ compensation benefits, retirement contributions, net pension asset – TRS, unemployment, insurance and miscellaneous special revenues. Unrestricted net position is the net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that do not meet the definition of the two preceding categories. Sometimes the School District will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the district-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the School District’s policy to consider restricted net position to have been depleted before unrestricted net position is applied. Fund Balance - Generally, fund balance represents the difference between current assets and deferred outflows of resources and current liabilities and deferred inflows of resources. In the fund financial statements, governmental funds report fund classifications that comprise a hierarchy based primarily on the extent to which the School District is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Under this standard, the fund balance classifications are as follows: Non-spendable fund balance includes amounts that cannot be spent because they are either not in spendable form (inventories, prepaid amounts, long-term receivables) or they are legally or contractually required to be maintained intact (the corpus of a permanent fund). Restricted fund balance is reported when constraints placed on the use of the resources are imposed by grantors, contributors, laws or regulations of other governments or imposed by law through enabling legislation. Enabling legislation includes a legally enforceable requirement that these resources be used only for the specific purposes as provided in the legislation. This fund balance classification is used to report funds that are 34 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 1 - Summary of Significant Accounting Policies (Continued) restricted for debt service obligations and for other items contained in the General Municipal Law or the Education Law of the State of New York. Committed fund balance is reported for amounts that can only be used for specific purposes pursuant to formal action of the entity’s highest level of decision-making authority. The School Board is the highest level of decision-making authority for the School District that can, by the adoption of a resolution prior to the end of the fiscal year, commit fund balance. Once adopted, these funds may only be used for the purpose specified unless the School Board removes or changes the purpose by taking the same action that was used to establish the commitment. This classification includes certain amounts established and approved by the Board of Education. Assigned fund balance, in the General Fund, represents amounts constrained either by the policies of the Board of Education for amounts assigned for balancing the subsequent year’s budget or delegated to the Assistant Superintendent for Business Operations for amounts assigned for encumbrances. Unlike commitments, assignments generally only exist temporarily, in that additional action does not normally have to be taken for the removal of an assignment. An assignment cannot result in a deficit in the unassigned fund balance in the General Fund. Assigned fund balance in all funds except the General Fund includes all remaining amounts, except for negative balances, that are not classified as nonspendable and are neither restricted nor committed. Unassigned fund balance, in the General Fund, represents amounts not classified as nonspendable, restricted, committed or assigned. The General Fund is the only fund that would report a positive unassigned fund balance. For all governmental funds other than the General Fund, any deficit fund balance is reported as unassigned. In order to calculate the amounts to report as restricted and unrestricted fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. When both restricted and unrestricted amounts of fund balance are available for use for expenditures incurred, it is the School District’s policy to use restricted amounts first and then unrestricted amounts as they are needed. For unrestricted amounts of fund balance, it is the School District’s policy to use fund balance in the following order: committed, assigned, and unassigned. F. Use of Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources and disclosures of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. G. Subsequent Events Evaluation by Management Management has evaluated subsequent events for disclosure and/or recognition in the financial statements through the date that the financial statements were available to be issued, which date is October 7, 2026. 35 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 2 - Stewardship, Compliance and Accountability A. Limitation on Fund Balance The School District is limited to the amount of committed, assigned and unassigned fund balance, with certain exceptions, that can be retained. New York State law limits this amount of fund balance to 4% of the ensuing year's budget. B. Property Tax Limitation Chapter 97 of the Laws of 2011, as amended (“Tax Levy Limitation Law”), modified previous law by imposing a limitation on the amount of tax levy growth from one fiscal year to the next. Such limitation is the lesser of (i) 2% or (ii) the annual percentage increase in the CPI subject to certain exclusions. A budget with a tax levy that does not exceed such limit will require approval by at least 50% of the voters. Approval by at least 60% of the voters will be required for a budget with a tax levy in excess of the limit. In the event the voters reject the budget, the tax levy for the school district’s budget for the ensuing fiscal year may not exceed the amount of the tax levy for the prior fiscal year. School districts will be permitted to carry forward a certain portion of their unused tax levy limitation from a prior year. The Tax Levy Limitation Law permits certain significant exclusions to the tax levy limit for school districts. These include taxes to pay the local share of debt service on bonds or notes issued to finance voter approved capital expenditures and the refinancing or refunding of such bonds or notes, certain pension cost increases, and other items enumerated in the Tax Levy Limitation Law. However, such exclusion does not apply to taxes to pay debt service on tax anticipation notes, revenue anticipation notes, budget notes and deficiency notes; and any obligations issued to finance deficits and certain judgments, including tax certiorari refund payments. C. Capital Projects Fund Project Deficit Deficits in certain capital projects arise because of the application of generally accepted accounting principles. The proceeds of bond anticipation notes issued to finance construction of capital projects are not recognized as an “other financing source”. Liabilities for bond anticipation notes payable are accounted for in the Capital Projects Fund. Bond anticipation notes are recognized as revenue only to the extent that they are redeemed. Deficits in these projects will be reduced and eliminated as the bond anticipation notes are redeemed from interfund transfers from other governmental funds or converted to permanent financing. D. New Accounting Pronouncement The School District has implemented GASB Statement No. 103, “Financial Reporting Model Improvements”, for the fiscal year ended June 30, 2026. This Statement improves key components of the financial reporting model to enhance the effectiveness of information provided for decision- making and assessing a government’s accountability. As a result of implementing this Statement, the School District revised the presentation of certain financial statement information, including updates to the Management’s Discussion and Analysis, budgetary presentations and other reporting elements, to conform with the new requirements. E. Correction of an Error During the year ended June 30, 2026, the School District identified and corrected an error relating to the amortization of the premium on bonds. The previous amortization utilized the straight-line method instead of the effective interest method, which was materially different. 36 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 2 - Stewardship, Compliance and Accountability (Continued) The error has been corrected in accordance with GASB Statement No. 100, Accounting Changes and Error Corrections. The error resulted in understated amortization of bond premiums and overstated interest expense in prior periods. The cumulative effect of correcting the error increased governmental activities beginning net position as of July 1, 2025 from $27,338,159 to $28,671,444. The correction did not affect governmental fund balances. Note 3 - Detailed Notes on All Funds A. Interfund Receivables/Payables The composition of due from/to other funds at June 30, 2026 were as follows: Fund General $ 497,556 $ - Capital Projects - 41,635 Special Aid - 497,556 Non-Major Governmental 41,635 - $ 539,191 $ 539,191 To Due Due From The outstanding balances between funds result mainly from the time lag between the dates that 1) interfund goods and services are provided or reimbursable expenditures occur, 2) transactions are recorded in the accounting system and 3) payments between funds are made. B. Capital Assets Changes in the School District’s capital assets are as follows: Class Capital Assets, not being depreciated: Land $ 810,100 $ - $ - $ 810,100 Construction-in-progress 29,353,860 14,782,897 44,101,499 35,258 Total Capital Assets, not being depreciated $ 30,163,960 $ 14,782,897 $ 44,101,499 $ 845,358 Capital Assets, being depreciated: Land Improvements $ 1,307,095 $ - $ - $ 1,307,095 Buildings and Improvements 95,206,895 44,101,499 - 139,308,394 Furniture and Equipment 1,792,727 111,075 140,884 1,762,918 Vehicles 4,794,279 1,052,842 485,825 5,361,296 Total Capital Assets, being depreciated 103,100,996 45,265,416 626,709 147,739,703 Less Accumulated Depreciation for: Land Improvements 1,188,115 45,745 - 1,233,860 Buildings and Improvements 34,008,890 3,894,072 - 37,902,962 Furniture and Equipment 1,015,995 146,400 140,884 1,021,511 Vehicles 3,101,848 369,791 485,825 2,985,814 Total Accumulated Depreciation 39,314,848 4,456,008 626,709 43,144,147 Total Capital Assets, being depreciated, net $ 63,786,148 $ 40,809,408 $ - $ 104,595,556 Capital Assets, net $ 93,950,108 $ 55,592,305 $ 44,101,499 $ 105,440,914 2026 2025 Additions Deletions Balance Balance July 1, June 30, 37 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) Depreciation expense was charged to School District functions and programs as follows: General support $ 523,638 Instruction 3,534,096 Cost of food sales 33,966 Pupil transportation 364,308 Total Depreciation Expense $ 4,456,008 C. Accrued Liabilities Accrued liabilities at June 30, 2026 were as follows: Payroll and Employee Benefits $ 173,074 $ 1,688 $ 174,762 Total General Fund Non-Major Governmental Funds D. Short-Term Capital Borrowings The schedule below details the changes in short-term capital borrowings. Year of Original Maturity Purpose Issue Date Capital Projects Fund - Bond Anticipation Notes School Buses and Vehicles 2023 4.0 % 10/9/2026 $ 500,417 $ - $ 171,477 $ 328,940 Building Improvements 2024 4.0 6/25/2027 26,632,178 - 1,621,352 25,010,826 Building Improvements 2025 4.0 6/25/2027 14,500,000 - - 14,500,000 $ 41,632,595 $ - $ 1,792,829 $ 39,839,766 Balance Maturities Balance Interest July 1, New and/or June 30, Rate 2025 Issues Payments 2026 Liabilities for bond anticipation notes are generally accounted for in the Capital Projects Fund or Proprietary Funds. Bond anticipation notes issued for judgments or settled claims are recorded in the fund paying the claim. Principal payments on bond anticipation notes must be made annually. State law requires that bond anticipation notes issued for capital purposes or judgments be converted to long-term obligations generally within seven years after the original issue date. However, bond anticipation notes issued for assessable improvement projects may be renewed for periods that are equivalent to the maximum life of the permanent financing, provided that stipulated annual reductions of principal are made. Interest expenditures of $1,664,678 were recorded in the fund financial statements in the General Fund and $1,682,163 of interest expense was recorded in the district-wide financial statements. 38 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) E. Long-Term Liabilities The following table summarizes changes in the School District’s long-term liabilities for the year ended June 30, 2026: General Obligation Bonds Payable $ 5,320,000 $ - $ 1,690,000 $ 3,630,000 $ 1,675,000 Plus - Unamortized Premium on Bonds 456,360 ** - 188,329 268,031 - 5,776,360 - 1,878,329 3,898,031 1,675,000 Energy Performance Contract Payable 3,125,523 - 544,206 2,581,317 227,094 Other Non-current Liabilities: Compensated Absences 5,094,289 - * 137,515 4,956,774 496,000 Net Pension Liability - ERS 2,828,453 - 1,889,566 938,887 - Other Postemployment Benefit Liability 56,699,896 15,756,086 1,949,721 70,506,261 1,950,000 Total Other Non- current Liabilities 64,622,638 15,756,086 3,976,802 76,401,922 2,446,000 Total Long-Term Liabilities $ 73,524,521 $ 15,756,086 $ 6,399,337 $ 82,881,270 $ 4,348,094 as restated One-Year Additions Payments 2026 Balance 2025, Within Maturities Balance New Issues/ and/or June 30, Due July 1, *The change in the compensated absences is presented as a net change. **As restated. Each governmental fund's liability for general obligation bonds, energy performance contract debt, compensated absences, net pension liabilities and other postemployment benefit liability is liquidated by the General Fund. General Obligation Bonds Payable General obligation bonds payable at June 30, 2026 are comprised of the following individual issues: Purpose District-Wide Improvements 2020 $ 15,620,000 June, 2034 2.00 - 5.00 % $ 3,630,000 Amount Outstanding at June 30, 2026 Final Maturity Interest Rate Year of Issue Original Issue Amount Interest expenditures of $237,900 were recorded in the fund financial statements in the General Fund. Interest expense of $42,876 was recorded in the district-wide financial statements. Energy Performance Contract Payable The School District, in a prior fiscal year, entered into a $3,540,000 contractual agreement to install energy savings equipment and/or to upgrade existing facilities to enhance performance. The agreement provides for payments of $163,832 payable semi-annually, including interest at 39 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) 2.84% through May 2026. The contract further provides that the savings in energy costs resulting from this modernization will equal or exceed the payment terms. Interest expenditures of $6,849 were recorded in the fund financial statements in the General Fund. Interest expense of $5,710 was recorded in the district-wide financial statements. The School District satisfied this obligation in the current year. The School District, in a prior fiscal year, entered into a $3,425,000 contractual agreement to install energy savings equipment and/or to upgrade existing facilities to enhance performance. The agreement provides for semiannual payments of $134,385, including interest at 1.645% through October 2036. The contract further provides that the savings in energy costs resulting from this modernization will equal or exceed the payment terms. Interest expenditures of $45,378 were recorded in the fund financial statements in the General Fund. Interest expense of $44,753 was recorded in the district-wide financial statements. The balance due at June 30, 2026 was $2,581,317. Payments to Maturity The annual requirements to amortize all outstanding bonded and energy performance contract debt as of June 30, 2026 including interest payments of $603,414 are as follows: Year Ending June 30, 2027 $ 1,675,000 $ 153,400 $ 227,094 $ 41,675 $ 1,902,094 $ 195,075 2028 335,000 69,650 230,858 37,911 565,858 107,561 2029 335,000 52,900 234,685 34,085 569,685 86,985 2030 335,000 39,500 238,575 30,195 573,575 69,695 2031 355,000 26,100 242,529 26,241 597,529 52,341 2032-2036 595,000 21,100 1,274,291 69,557 1,869,291 90,657 2037 - - 133,285 1,100 133,285 1,100 $ 3,630,000 $ 362,650 $ 2,581,317 $ 240,764 $ 6,211,317 $ 603,414 Total General Obligation Principal Interest Principal Interest Bonds Energy Performance Contract Principal Interest The above general obligation bonds are direct borrowings of the School District for which its full faith and credit are pledged and are payable from taxes levied on all taxable real property within the School District. Legal Debt Margin The School District is subject to legal limitations on the amount of debt that it may issue. The School District’s legal debt margin is 10% of the most recent full valuation of taxable real property. Compensated Absences The various collective bargaining agreements provide for the payment of accumulated vacation or sick leave upon separation from service. The liability for such accumulated leave is reflected in the district-wide statement of net position as current and long-term liabilities. A liability for these amounts is reported in the governmental funds only if the liability has matured through employee resignation or retirement. The liability for compensated absences includes salary related payments, where applicable. 40 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) Pension Plans New York State and Local Retirement System and Teachers’ Retirement System The School District participates in the New York State and Local Employees’ Retirement System (“ERS”). This is a cost-sharing, multiple-employer defined benefit pension plan. ERS provides retirement benefits as well as death and disability benefits. The net position of the ERS is held in the New York State Common Retirement Fund (“Fund”), which was established to hold all assets and record changes in fiduciary net position. The Comptroller of the State of New York serves as the trustee of the Fund and is the administrative head of the ERS. The Comptroller is an elected official determined in a direct statewide election and serves a four-year term. Obligations of employers and employees to contribute and benefits to employees are governed by the New York State Retirement and Social Security Law (“NYSRSSL”). Once a public employer elects to participate in the ERS, the election is irrevocable. The New York State Constitution provides that pension membership is a contractual relationship and plan benefits cannot be diminished or impaired. Benefits can be changed for future members only by enactment of a State statute. The School District also participates in the Public Employees’ Group Life Insurance Plan, which provides death benefits in the form of life insurance. The ERS is included in the State’s financial report as a pension trust fund. That report, including information with regard to benefits provided may be found at www.osc.ny.gov/retirement/resources/financial-reports#financial or obtained by writing to the New York State and Local Retirement System, 110 State Street, Albany, NY 12244. The School District also participates in the New York State Teachers’ Retirement System (“TRS”). This is a cost-sharing, multiple-employer defined benefit pension plan. TRS provides retirement benefits as well as death and disability benefits. The TRS is governed by a ten-member Board of Trustees, which sets policy and oversees operations consistent with its fiduciary obligations under applicable law. Obligations of employers and employees to contribute and benefits to employees are governed by the Education Law of the State of New York. Once a public employer elects to participate in the TRS, the election is irrevocable. The New York State Constitution provides that pension membership is a contractual relationship and plan benefits cannot be diminished or impaired. Benefits can be changed for future members only by enactment of a State statute. The TRS issues a stand-alone financial report which may be found at www.nystrs.org or obtained by writing to the New York State Teachers’ Retirement System, 10 Corporate Woods Drive, Albany, NY 12211-2395. ERS and TRS are noncontributory for employees who joined the systems before July 27, 1976. Employees who joined the systems after July 27, 1976, and before January 1, 2010 contribute 3% of their salary for the first ten years of membership. Employees who joined the systems after January 1, 2010, generally contribute between 3% and 6% of their salary for their entire length of service. Under the authority of the NYSRSSL, the Comptroller annually certifies the actuarially determined rates expressly used in computing the employers’ contributions based on salaries paid during the ERS’s fiscal year ending March 31. Pursuant to Article 11 of the Education Law of the State of New York, actuarially determined employer contributions are established annually for the TRS by its Board of Trustees. The employer contribution rates for the ERS plan year ended March 31, 2026 and TRS plan year ended June 30, 2026 are as follows: 41 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) Tier/Plan Rate ERS 4 A15 19.6 % 5 A15 16.6 6 A15 41J100 12.8 6 A15 41J165 12.9 TRS 1-6 9.59 % At June 30, 2026, the School District reported the following for its proportionate share of the net pension liability (asset) for ERS and TRS: Measurement date Net pension liability (asset) $ 938,887 $ (6,594,602) School District's proportion of the net pension liability 0.0166418 % 0.111375 % Change in proportion since the prior measurement date 0.0001452 % 0.002723 % ERS TRS March 31, 2026 June 30, 2025 The net pension liability (asset) was measured as of March 31, 2026, for ERS and June 30, 2025 for TRS and the total pension liability used to calculate the net pension liability (asset) were determined by actuarial valuations as of those dates. The School District’s proportion of the net pension liability for ERS was based on a computation of the actuarially determined indexed present value of future compensation by employer relative to the total of all participating members. The School District’s proportion of the net pension asset for TRS was based on the School District’s contributions to the pension plan relative to the contributions of all participating members. For the year ended June 30, 2026, the School District recognized its proportionate share of pension expense in the district-wide financial statements of $720,747, ($1,085,887 for ERS and $(365,140) for TRS). Pension expenditures of $985,455 for ERS and $2,195,986 for TRS were charged to the General Fund. At June 30, 2026, the School District reported its proportionate share of deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience $ 537,286 $ - $ 3,457,042 $ - Changes of assumptions 161,165 - 2,610,598 71,101 Net difference between projected and actual earnings on pension plan investments - 1,683,476 - 5,150,368 Changes in proportion and differences between School District contributions and proportionate share of contributions 246,913 117,445 79,819 164,500 School District contributions subsequent to the measurement date 293,146 - 2,197,950 - $ 1,238,510 $ 1,800,921 $ 8,345,409 $ 5,385,969 of Resources of Resources of Resources of Resources Outflows Inflows Outflows Inflows ERS TRS Deferred Deferred Deferred Deferred 42 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) Differences between expected and actual experience $ 3,994,328 $ - Changes of assumptions 2,771,763 71,101 Net difference between projected and actual earnings on pension plan investments - 6,833,844 Changes in proportion and differences between School District contributions and proportionate share of contributions 326,732 281,945 School District contributions subsequent to the measurement date 2,491,096 - $ 9,583,919 $ 7,186,890 of Resources of Resources Total Deferred Deferred Outflows Inflows $293,146 reported as deferred outflows of resources related to ERS resulting from the School District’s accrued contributions subsequent to the measurement date will be recognized as a decrease of the net pension liability in the plan’s year ended March 31, 2027. The $2,197,950 reported as deferred outflows of resources related to TRS will be recognized as an increase of the net pension asset in the plan’s year ended June 30, 2026. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to ERS and TRS will be recognized in pension expense as follows: Year Ended 2026 $ - $ 3,330,376 2027 409,985 (1,405,850) 2028 (573,975) (1,495,895) 2029 (334,469) (334,284) 2030 (357,098) 549,998 Thereafter - 117,145 $ (855,557) $ 761,490 March 31, June 30, ERS TRS The total pension liability for the ERS and TRS measurement dates were determined by using actuarial valuation dates as noted below, with update procedures used to roll forward the total pension liabilities to those measurement dates. Significant actuarial assumptions used in the valuations were as follows: ERS TRS Measurement Date March 31, 2026 June 30, 2025 Actuarial valuation date April 1, 2025 June 30, 2024 Investment rate of return 5.9% * 6.95% * Salary scale 5.2% 2.04%-5.8% Inflation rate 2.9% 2.5% Cost of living adjustments 1.5% 1.4% *Compounded annually, net of pension plan investment expenses, including inflation. 43 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) For ERS, annuitant mortality rates are based on the ERS’s experience with adjustments for mortality improvements based on Society of Actuaries’ Scale MP-2021. For TRS, annuitant mortality rates are based on plan member experience, with adjustments for mortality improvements based on Society of Actuaries’ Scale MP-2021, applied on a generational basis. Active member mortality rates are based on plan member experience. The actuarial assumptions used in the ERS valuation were based on the results of an actuarial experience study for the period April 1, 2020 - March 31, 2025. The actuarial assumptions used in the TRS valuation were based on the results of an actuarial experience study for the period July 1, 2019 to June 30, 2024. For ERS, the long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected return, net of investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. For TRS, the long-term expected rate of return on pension plan investments was determined in accordance with Actuarial Standard of Practice (“ASOP”) No. 27, Selection of Economic Assumptions for Measuring Pension Obligations. ASOP No. 27 provides guidance on the selection of an appropriate assumed investment rate of return. Consideration was given to expected future real rates of return (expected returns, net of pension plan investment expense and inflation) for each major asset class as well as historical investment data and plan performance. The best estimates of arithmetic real rates of return for each major asset class included in the target asset allocation is summarized in the following table: Asset Type Domestic Equity 25 % 3.29 % 33 % 6.70 % International Equity 14 5.85 15 7.40 Private Equity 15 7.00 9 9.80 Real Estate 12 5.20 11 6.50 Domestic Fixed Income Securities - - 16 2.60 Global Fixed Income Securities - - 2 2.40 High Yield Income Securities - - 1 4.70 Global Equities - - 4 7.00 Private Debt - - 2 6.10 Real Estate Debt - - 6 3.80 Opportunistic/Absolute Return Strategy 3 5.13 - - Credit 4 5.10 - - Real Assets 4 5.54 - - Fixed Income 22 1.75 - - Cash 1 0.25 1 0.60 100 % 100 % Allocation of Return Allocation of Return Expected Expected Target Real Rate Target Real Rate ERS TRS March 31, 2026 June 30, 2025 Long-Term Long-Term 44 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) The real rate of return is net of the long-term inflation assumption of 2.5% for ERS and TRS. The discount rate used to calculate the total pension liability was 5.9% for ERS and 6.95% for TRS. The projection of cash flows used to determine the discount rate assumes that contributions from plan members will be made at the current contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based upon those assumptions, the System’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The following presents the School District’s proportionate share of the net pension liability (asset) calculated using the discount rate of 5.9% for ERS and 6.95% for TRS, as well as what the School District’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower (4.9% for ERS and 5.95% for TRS) or 1 percentage point higher (6.9% for ERS and 7.95% for TRS) than the current rate: School District's proportionate share of the ERS net pension liability (asset) $ 6,412,340 $ 938,887 $ (3,637,162) School District's proportionate share of the TRS net pension liability (asset) $ 12,671,612 $ (6,594,602) $ (22,806,119) Decrease Discount Rate Increase (5.95%) (6.95%) (7.95%) (4.9%) (5.9%) (6.9%) 1% Current 1% 1% Current 1% Decrease Discount Rate Increase The components of the collective net pension liability (asset) as of the March 31, 2026, ERS measurement date and the June 30, 2025, TRS measurement date were as follows: Total pension liability $ 253,773,040,000 $ 148,272,068,018 Fiduciary net position 248,131,290,000 154,193,125,241 Employers' net pension liability (asset) $ 5,641,750,000 $ (5,921,057,223) Fiduciary net position as a percentage of total pension liability 97.78% 103.99% ERS TRS Employer contributions to ERS are paid annually and cover the period through the end of ERS’s fiscal year, which is March 31st. Accrued retirement contributions as of June 30, 2026 represent the projected employer contribution for the period April 1, 2026 through June 30, 2026 based on paid ERS wages multiplied by the employers’ contribution rate, by tier. Employee contributions are remitted monthly. 45 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) Employer and employee contributions for the year ended June 30, 2026 are paid to TRS in the following fiscal year through a state aid intercept or, if state aid is insufficient, through a payment by the School District to TRS. Accrued retirement contributions as of June 30, 2026 represent employee and employer contributions for the fiscal year ended June 30, 2026 based on paid TRS wages multiplied by the employers’ contribution rate plus employee contributions for the fiscal year as reported to TRS. Accrued retirement contributions as of June 30, 2026 were $293,146 to ERS and $2,535,394 to TRS (including employee contributions of $337,444). Voluntary Defined Contribution Plan The School District can offer a defined contribution plan to all non-union employees hired on or after July 1, 2013 and earning at the annual full-time salary rate of $75,000 or more. The employee contribution is between 3% and 6% depending on salary and the School District will contribute 8%. Employer contributions vest after 366 days of service. No current employees participated in this program. Other Postemployment Benefit Liability (“OPEB”) In addition to providing pension benefits, the School District provides certain health care benefits for retired employees through a single employer defined benefit OPEB plan. The various collective bargaining agreements stipulate the employees covered and the percentage of contribution. Contributions by the School District may vary according to length of service. The cost of providing postemployment health care benefits is shared between the School District and the retired employee as noted below. Substantially all of the School District’s employees may become eligible for those benefits if they reach normal retirement age while working for the School District. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other than Pensions”, so the net OPEB liability is equal to the total OPEB liability. Separate financial statements are not issued for the plan. At June 30, 2026, the following employees were covered by the benefit terms: Inactive employees currently receiving benefit payments 103 Active employees 362 465 The School District’s total OPEB liability of $70,506,261 was measured as of June 30, 2026, and was determined by an actuarial valuation as of July 1, 2025. 46 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) The total OPEB liability in the July 1, 2025 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Salary increases 3.0%, average, including inflation Discount rate 4.26% Healthcare cost trend rates 7.0% for 2027, decreasing 0.25% per year to an ultimate rate of 4.0% for 2039 and later years Retirees' share of benefit-related costs Retiree contribution rates vary by employee class and date of retirement The discount rate was based on an average of two 20-year bond indices (e.g., S&P Municipal Bond 20 Year High Grade Rate Index and Fidelity GA AA 20 Years) as of June 30, 2026. Mortality rates were based on the Society of Actuaries Pub-2010 Public Retirement Plans Healthy Male and Female Total Dataset Headcount-Weighted Mortality tables based on Employee and Healthy Annuitant Tables for both pre and post retirement projected with mortality improvements using the most current Society of Actuaries Mortality Improvement Scale MP-2021. The School District’s change in the total OPEB liability for the year ended June 30, 2026 is as follows: Total OPEB Liability - Beginning of Year 56,699,896 $ Service cost 2,828,678 Interest 2,373,887 Changes of benefit terms - Differences between expected and actual experience - Changes in assumptions or other inputs 10,553,521 Benefit payments (1,949,721) Total OPEB Liability - End of Year 70,506,261 $ The following presents the total OPEB liability of the School District, as well as what the School District’s total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (3.26%) or 1 percentage point higher (5.26%) than the current discount rate: Total OPEB Liability $ 84,145,258 $ 70,506,261 $ 59,898,516 1% Current 1% Decrease Discount Rate Increase (3.26%) (4.26%) (5.26%) 47 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) The following presents the total OPEB liability of the School District, as well as what the School District’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage point lower (6.0% decreasing to 3.0%) or 1 percentage point higher (8.0% decreasing to 5.0%) than the current healthcare cost trend rates: Total OPEB Liability $ 58,647,974 $ 70,506,261 $ 86,319,826 Current 1% 1% Healthcare Cost to 3.0%) to 4.0%) to 5.0%) Decrease Trend Rates Increase (6.0% decreasing (7.0% decreasing (8.0% decreasing For the year ended June 30, 2026, the School District recognized OPEB expense of $5,836,281 in the district-wide financial statements. At June 30, 2026, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Changes of assumptions or other inputs $ 14,033,136 $ 6,237,745 of Resources of Resources Deferred Deferred Outflows Inflows Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended June 30, 2027 $ 1,209,595 2028 854,323 2029 854,323 2030 854,322 2031 642,288 Thereafter 3,380,540 $ 7,795,391 48 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) F. Revenues and Expenditures Interfund Transfers Interfund transfers are defined as the flow of assets, such as cash or goods and services, without equivalent flows of assets in return. The interfund transfers reflected below have been reported as transfers. Transfers Out General Fund $ - $ 39,228 $ 2,803,631 $ 230,000 $ 3,072,859 Non-Major Governmental Funds 408,492 - - - 408,492 $ 408,492 $ 39,228 $ 2,803,631 $ 230,000 $ 3,481,351 Transfers In Total Non-Major Capital Fund Funds Special Fund General Aid Governmental Fund Projects Transfers are used to 1) move funds from the operating funds to the Capital Projects Fund as bond anticipation note principal payments become due and for voter approved capital projects and 2) move amounts earmarked in the operating funds to fulfill commitments for Special Aid and School Lunch Fund expenditures and 3) move funds from the debt service fund to the General Fund to offset bond anticipation note interest expenditures. G. Net Position The components of net position are detailed below: Net Investment in Capital Assets - the component of net position that reports the difference between capital assets less both the accumulated depreciation and the outstanding balance of debt, excluding unexpended proceeds, that is directly attributable to the acquisition, construction or improvement of those assets. Restricted for Capital Projects - the component of net position that reports the amounts restricted for capital projects, less unexpended bond proceeds and unrestricted interest earnings. Restricted for Capital Improvements - the component of net position that has been established pursuant to Section 6C of the General Municipal Law of the State of New York to set aside funds to be used for future capital projects. Restricted for Debt Service - the component of net position that reports the difference between assets and liabilities of the Debt Service Fund with constraints placed on their use by Local Finance Law. Restricted for Repairs - the component of net position that has been established pursuant to section 6 D of the General Municipal Law of the State of New York to pay the cost of major repairs to the School District assets. 49 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) Restricted for Tax Certiorari - the component of net position that has been established in accordance with the Education Law of the State of New York to provide funding for court ordered tax refunds which are currently in process. Restricted for Workers’ Compensation Benefits - the component of net position that has been established to set aside funds to be used for a specific purpose in accordance with Section 6-j of the General Municipal Law of the State of New York. Restricted for ERS Retirement Contribution - the component of net position that reports the amounts set aside to be used for ERS retirement costs in accordance with Section 6-r of the General Municipal Law of the State of New York. Restricted for TRS Retirement Contribution - the component of net position that reports the amounts set aside to be used for TRS retirement costs in accordance with Section 6-r of the General Municipal Law of the State of New York. Restricted for Net Pension Asset - TRS - the component of net position that reports the amount of the TRS net pension asset in accordance with the provisions of GASB Statement No. 63, “Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position”. Restricted for Unemployment Benefits - the component of net position that has been established to set aside funds to be used for a specific purpose in accordance with the General Municipal Law of the State of New York. Restricted for Insurance - the component of net position that has been established to set aside funds to repair assets funded by insurance recoveries pursuant to Education Law. Restricted for Special Revenues - the component of net position that has been established to set aside funds to be used for extraclassroom activities and other purposes with constraints placed on their use by either external parties and/or statute. Unrestricted - all other amounts that do not meet the definition of "restricted" or "net investment in capital assets". 50 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) H. Fund Balances Nonspendable - Prepaid expenditures $ 3,200 $ - $ - $ 3,200 Inventories - - 15,058 15,058 Total Nonspendable 3,200 - 15,058 18,258 Restricted: Workers' compensation 323,143 - - 323,143 Workers' compensation - for subsequent year's expenditures 100,000 - - 100,000 Unemployment insurance 183,889 - - 183,889 Unemployment insurance - for subsequent year's expenditures 100,000 - - 100,000 Tax certiorari 1,240,047 - - 1,240,047 Tax certiorari - for subsequent year's expenditures 800,000 - - 800,000 ERS retirement contributions 2,118,033 - - 2,118,033 ERS retirement contributions - for subsequent year's expenditures 200,000 - - 200,000 TRS retirement contributions 2,456,789 - - 2,456,789 Employee benefit accrued liability 666,825 - - 666,825 Repairs 319,532 - - 319,532 Insurance losses 1,365,780 - - 1,365,780 Capital projects 10,747,556 - - 10,747,556 Debt service - - 1,512,889 1,512,889 Special revenues - extraclassroom activities - - 146,570 146,570 Special revenues - other - - 58,408 58,408 Total Restricted 20,621,594 - 1,717,867 22,339,461 Assigned: Purchases on order: General government support 1,183,861 - - 1,183,861 Instruction 313,609 - - 313,609 1,497,470 - - 1,497,470 For subsequent year's expenditures - General Fund 2,716,925 - - 2,716,925 School Lunch Fund - - 183,650 183,650 Total Assigned 4,214,395 - 183,650 4,398,045 Unassigned 2,510,512 (37,830,463) - (35,319,951) Total Fund Balances $ 27,349,701 $ (37,830,463) $ 1,916,575 $ (8,564,187) Projects Governmental General Capital Non-Major Fund Fund Funds Total 51 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 3 - Detailed Notes on All Funds (Continued) Certain elements of fund balance are described above. Those additional elements, which are not reflected in the Statement of Net Position but are reported in the governmental funds balance sheet are described below. Prepaid Expenditures have been established to account for health insurance payments made in advance. The amount is classified as nonspendable to indicate that funds are not “available” for appropriation or expenditure even though they are a component of current assets. Inventories in the School Lunch Fund have been classified as nonspendable to indicate that a portion of fund balance is not "available" for expenditure because the asset is in the form of commodities and the School District anticipates utilizing them in the normal course of operations. Employee Benefits have been established to set aside funds to be used for a specific purpose in accordance with Section 6-n of the General Municipal Law of the State of New York. Purchases on order are assigned and represent the School District's intention to honor the contracts in process at year-end. The subsequent year's appropriation will be amended to provide authority to complete the transactions. Assigned for School Lunch Fund represents the component of fund balance that reports the difference between assets and liabilities in the School Lunch Fund, less nonspendable fund balance. Unassigned fund balance in the General Fund represents amounts not classified as nonspendable, restricted, committed or assigned. The unassigned deficit in the capital projects funds represents the deficit in the fund. Note 4 - Summary Disclosure of Significant Contingencies A. Litigation There are currently pending certiorari proceedings, the results of which could require the payment of future tax refunds by the School District if existing assessment rolls are modified based on the outcome of the litigation proceedings. However, the amount of these possible refunds cannot be determined at the present time. Any payments resulting from adverse decisions will be funded in the year the payment is made. In common with other school districts, the School District from time to time receives notices of claim and is party to litigation. In the opinion of the Attorney for the District, apart from matters provided for by applicable insurance coverage, there are no claims or actions pending which, if determined against the School District, would have an adverse material effect on the financial condition of the School District. B. Contingencies The School District participates in various Federal grant programs. These programs are subject to program compliance audits pursuant to the Uniform Guidance. The amount of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the School District anticipates such amounts, if any, to be immaterial. 52 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Continued) June 30, 2026 Note 4 - Summary Disclosure of Significant Contingencies (Continued) The School District is subject to audits of State aid by the New York State Education Department. The amount of aid previously paid to the School District which may be disallowed cannot be determined at this time, although the School District anticipates such amounts, if any, to be immaterial. C. Risk Management The School District and other school districts have formed a reciprocal insurance company, called the New York State Insurance Reciprocal (“NYSIR”) to be owned by these districts. NYSIR operates under an agreement effective July 1, 1989. The purpose of NYSIR is to provide general liability, auto liability, all risk building and contents and auto physical damage coverage. In addition, as part of the reciprocal program, excess insurance, school board legal liability, equipment floaters, boilers and machinery and crime and bond coverages will be purchased from commercial carriers and be available to the subscriber districts. NYSIR retains a management company, which is responsible for the overall supervision and management of the reciprocal. The reciprocal is managed by a Board of Governors and an Attorney-in-fact, which is comprised of employees of the subscriber districts. The subscribers have elected those who sit on the board and each subscriber has a single vote. NYSIR is an "assessable" insurance company, in that, the subscribers are severally liable for any financial shortfall of NYSIR and can be assessed their proportionate share by the State Insurance Department if the funds of NYSIR are less than what is required to satisfy its liabilities. The subscriber districts are required to pay premiums as well as a minimal capital contribution. The School District purchases various insurance coverages from NYSIR to reduce its exposure to loss. The School District maintains a general liability insurance policy with coverage up to $1 million. The School District maintains liability coverage for school board members up to $1 million. The School District also maintains an umbrella policy with coverage up to $15 million. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. The School District has also established a reserve for property loss and liability pursuant to General Municipal Law. At June 30, 2026, the balance in the reserve was $1,365,780, which is to be used for the uninsured portion of any losses. The School District and neighboring school districts in Northern Westchester and Putnam Counties participate in the Westchester-Putnam Schools Cooperative Self-Insurance Plan for Workers' Compensation. This plan operates under an agreement, as amended, dated February 6, 1987. The purposes of the plan are to provide for the efficient and economical evaluation, processing, administration, defense and payment of claims against Plan members for workers' compensation payments. The Board of Trustees of the Plan consists of five Trustees selected by the Plan members. Each Trustee shall have one vote, and no action may be taken except by a majority vote of the total membership of Trustees. Billings to each participant are based upon the costs incurred for workers' compensation. The School District has transferred all related risk to the Plan. 53 Croton-Harmon Union Free School District, New York Notes to Financial Statements (Concluded) June 30, 2026 Note 4 - Summary Disclosure of Significant Contingencies (Continued) The School District and neighboring school districts in Northern Westchester and Putnam Counties participate in the Northern Westchester - Putnam Schools Cooperative Medical Expense Benefit Plan. The plan operates under an agreement dated February 17, 1989. The purposes of the plan are to provide for the efficient and economical evaluation, processing, administration and payment of claims against plan members for medical expenses through self-insurance and to provide for centralized administration, funding and disbursements for such services. The governance of the plan rests in the Board of Trustees which shall consist of five Trustees selected by the plan members. A majority vote of the total number of Trustees shall be required to take any actions. The billings are based upon coverages provided to each participants' employees. The School District has transferred all related risks to the Plan. Note 5 - Recently Issued GASB Pronouncements GASB Statement No. 105, “Subsequent Events”, has been issued to improve the financial reporting requirements for subsequent events, thereby enhancing consistency in their application and better meeting the information needs of financial statement users. The requirements of this Statement are effective for reporting periods beginning after June 15, 2026. This is not an all-inclusive list of recently issued GASB pronouncements but rather a listing of Statements that the School District believes will most impact its financial statements. The School District will evaluate the impact that this and other pronouncements may have on its financial statements and will implement them as applicable and when material. ***** 54 Croton-Harmon Union Free School District, New York Required Supplementary Information Budgetary Comparison Schedule - General Fund Year Ended June 30, 2026 Actual Encumbr- ances REVENUES Real property taxes $ 43,740,411 $ 43,740,411 $ - $ 43,740,411 $ $ - Other tax items 1,726,863 1,726,863 - 1,726,863 - Non-property taxes 975,000 975,000 - 1,090,625 115,625 Charges for services 130,000 130,000 - 559,624 429,624 Use of money and property 342,000 342,000 - 1,254,977 912,977 Sale of property and compensation for loss 14,500 14,500 - 102,858 88,358 State aid 10,231,661 10,239,880 8,219 10,698,787 458,907 Federal aid 20,000 20,000 - 26,507 6,507 Miscellaneous 150,000 153,000 3,000 339,659 186,659 Total Revenues 57,330,435 57,341,654 11,219 59,540,311 2,198,657 EXPENDITURES Current General support Board of education 89,175 88,739 (436) 75,089 - (13,650) Central administration 374,153 393,469 19,316 389,452 3,780 (237) Finance 920,262 950,632 30,370 918,451 - (32,181) Staff 686,089 674,575 (11,514) 535,472 - (139,103) Central services 6,587,137 6,942,417 355,280 5,371,908 1,180,081 (390,428) Special items 836,246 787,680 (48,566) 644,349 - (143,331) Total General Support 9,493,062 9,837,512 344,450 7,934,721 1,183,861 (718,930) Instruction Instruction, administration and improvement 2,253,985 2,205,780 (48,205) 2,072,313 - (133,467) Teaching - Regular school 16,395,645 16,567,706 172,061 15,793,871 204,116 (569,719) Programs for students with - disabilities 6,248,895 6,233,420 (15,475) 5,534,103 6,375 (692,942) Occupational education 371,328 371,328 - 371,328 - - Teaching - Special schools 33,050 33,050 - - - (33,050) Instructional media 2,363,753 2,524,797 161,044 2,363,614 103,118 (58,065) Pupil services 3,714,302 3,715,956 1,654 3,306,231 - (409,725) Total Instruction 31,380,958 31,652,037 271,079 29,441,460 313,609 (1,896,968) Pupil transportation 3,272,266 3,277,724 5,458 2,748,503 - (529,221) Employee benefits 12,205,140 11,932,639 (272,501) 10,692,107 - (1,240,532) Debt service Principal 2,234,207 2,234,207 - 2,234,206 - (1) Interest 1,857,668 1,954,807 97,139 1,954,805 - (2) Total Expenditures 60,443,301 60,888,926 445,625 55,005,802 1,497,470 (4,385,654) Excess (Deficiency) of Revenues Over Expenditures (3,112,866) (3,547,272) (434,406) 4,534,509 (1,497,470) 6,584,311 OTHER FINANCING SOURCES (USES) Transfers in - 408,492 408,492 408,492 - - Transfers out (1,591,477) (3,113,632) (1,522,155) (3,072,859) - 40,773 Total Other Financing Uses (1,591,477) (2,705,140) (1,113,663) (2,664,367) - 40,773 Net Change in Fund Balance (4,704,343) (6,252,412) (1,548,069) 1,870,142 $ (1,497,470) $ 6,625,084 FUND BALANCE Beginning of Year 4,704,343 6,252,412 1,548,069 25,479,559 End of Year $ - $ - $ - $ 27,349,701 See independent auditors' report. Encumbrances Original Budget - Final Budget over (under) Actual and Amounts Budget Budgeted Amounts Variance with over (under) Variance with Final Budget - Original Final Budget 55 Croton-Harmon Union Free School District, New York Required Supplementary Information Notes to Budgetary Comparison Schedule For the Year Ended June 30, 2026 1. Budgetary Basis and Control The District annually adopts a legally authorized budget for the General Fund. The budget is approved by District voters in accordance with New York State Education Law and is prepared on a basis consistent with generally accepted accounting principles. If the proposed budget is not approved by the voters, the Board of Education may adopt a contingency budget or resubmit the original or a revised budget for voter approval. If a resubmitted budget is not approved, the Board is required to adopt a contingency budget in accordance with New York State Education Law. The Board of Education establishes legal budgetary control at the function level. Transfers between functions and other budget amendments requiring modification at the legal level of control require Board approval. Annual budgets are not adopted for the Special Aid, School Lunch, Debt Service or Miscellaneous Special Revenue Funds because their activities are controlled through grant agreements, debt requirements or other legal or contractual restrictions. The Capital Projects Fund is budgeted on a project basis rather than through an annual budget. General Fund appropriations lapse at year-end except for outstanding encumbrances, which are carried forward and included in the subsequent year’s budget. Encumbrance accounting is used in the General Fund to record purchase orders, contracts and other commitments against applicable appropriations. Outstanding encumbrances at year-end do not constitute expenditures or liabilities and are generally reported as assigned fund balance. For purposes of evaluating compliance with the legally adopted budget, outstanding encumbrances are considered together with actual expenditures. 2. General Fund Budgetary Highlights Differences - Original Budget to Final Budget EXPENDITURES General support - Central services $ 355,280 The final budget was adjusted to provide for anticipated year-end facility maintenance projects, including painting, flooring, and lighting, after the District reviewed available revenues and projected expenditures. Employee benefits (272,501) The District had budgeted for four additional employees that did not need coverage during the year. OTHER FINANCING SOURCES (USES) Transfers in 408,492 The District transferred funds from the Debt Service Fund to cover the interest due on the BAN in June 2026. Transfers out (1,522,155) The District transferred funds from the Transportation Reserve for EV Buses, and transferred funds for a diesel school bus, a gas/diesel powered bus and a SUV hybrid vehicle with the proposition approved by voters. Funds were also transferred to the School Lunch Fund to reduce the operating deficit. Variance with Original Budget - over (under) Final Budget 56 Croton-Harmon Union Free School District, New York Required Supplementary Information Notes to Budgetary Comparison Schedule (Concluded) For the Year Ended June 30, 2026 2. General Fund Budgetary Highlights Differences - Final Budget to Actual Amounts and Encumbrances REVENUES Charges for services $ 429,624 The District had increased out of district enrollment, including high cost special education students enrolled in our in-district special education programs. Use of money and property 912,977 Interest rates remained considerably higher than projected during budget development, generating additional revenue to the districts general fund and restricted reserves. State aid 458,907 There was an increase in building aid due to several finalized capital projects and BOCES services in the current year, therefore more aid was received. EXPENDITURES General support - Central services $ (390,428) The district deferred non-essential discretionary spending, particularly for projects such as painting, flooring, and lighting, until anticipated revenues were fully realized and secured and a comprehensive review of actual expenditures was completed. Instruction: Teaching - Regular schools (569,719) The District budgeted for an extra section of Kindergarten that wasn't required due to enrollment. Variance is also due to high salaried teaching staff retirements/resignations, who were replaced by new teaching staff. Programs for students with disabilities (692,942) Variance is primarily driven by the dynamic and individualized nature of student needs. Projections and actual expenditures frequently shift due to changes in individualized education program (IEP) requirements, out-of-district placements, and new student enrollments throughout the school year. Pupil services (409,725) Fluctuations in pupil services — which includes guidance, psychology, social work, attendance, health services co-curricular and Athletics—were driven primarily by personnel salary variances, unfilled/unneeded positions and the absorption of some salaries through Federal funding. Pupil transportation (529,221) Driver salaries are projected based on annual routing needs. Routes were adjusted and streamlined based on updated student demographics. Further, the completion of the district athletic field brought games back on- campus, substantially reducing overtime and overall transportation demands. Employee benefits (1,240,532) Employee benefits are projected conservatively based on anticipated staffing levels and estimated coverage expectations. Favorable variances across benefit lines were primarily driven by staffing and lower-than- expected employer contribution rates. Health Insurance premium came in less than projected, alongside cost savings from staff opting for buyouts or switching to single coverage plans. Encumbrances Variance with Final Budget - over (under) Actual and 57 School District's Total OPEB Liability and Related Ratios Total OPEB Liability: Service cost $ 2,828,678 $ 1,590,776 $ 1,881,366 Interest 2,373,887 2,847,359 2,131,039 Changes of benefit terms - - - Differences between expected and actual experience - - - Changes of assumptions or other inputs * 10,553,521 (6,726,980) 5,330,436 Benefit payments (1,949,721) (1,659,453) (1,596,587) Net Change in Total OPEB Liability 13,806,365 (3,948,298) 7,746,254 Total OPEB Liability – Beginning of Year 56,699,896 60,648,194 52,901,940 Total OPEB Liability – End of Year $ 70,506,261 $ 56,699,896 $ 60,648,194 School District's covered-employee payroll $ 34,609,048 $ 25,025,319 $ 25,025,319 Total OPEB liability as a percentage of covered-employee payroll 203.72% 226.57% 242.35% *Discount Rate 4.26% 4.76% 4.09% See independent auditors' report. Croton-Harmon Union Free School District, New York Required Supplementary Information - Schedule of Changes in the Last Ten Fiscal Years (1)(2) (3) Restated for the implementation of the provisions of GASB Statement No. 75. 2024 2025 2026 (1) Data not available prior to fiscal year 2018 implementation of Governmental Accounting Standards Board Statement No. 75, "Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions ". (2) No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits. 58 $ 1,428,330 $ 1,491,551 $ 1,643,302 $ 1,426,151 $ 570,808 $ 492,015 2,087,720 1,818,833 924,513 1,039,906 1,413,909 1,460,333 - - - - - - - - - - - - (2,146,523) 1,908,386 2,486,898 (4,031,134) 5,243,433 - (1,321,179) (1,220,180) (869,571) (830,621) (1,058,230) (1,050,330) 48,348 3,998,590 4,185,142 (2,395,698) 6,169,920 902,018 52,853,592 48,855,002 44,669,860 47,065,558 40,895,638 39,993,620 (3) $ 52,901,940 $ 52,853,592 $ 48,855,002 $ 44,669,860 $ 47,065,558 $ 40,895,638 $ 21,636,185 $ 21,636,185 $ 21,752,300 $ 21,752,300 $ 21,627,861 $ 21,627,861 244.51% 244.28% 224.60% 205.36% 217.62% 189.09% 4.00% 3.77% 2.09% 2.44% 3.10% 3.10% 2018 2019 2020 2021 2022 2023 59 Croton-Harmon Union Free School District, New York School District's proportion of the net pension liability (asset) 0.111375% 0.108652% 0.106904% 0.106939% School District's proportionate share of the net pension liability (asset) $ (6,594,602) $ (3,241,737) $ 1,222,538 $ 2,052,050 School District's covered payroll $ 21,868,566 $ 20,756,776 $ 19,724,101 $ 18,947,274 School District's proportionate share of the net pension liability (asset) as a percentage of its covered payroll (30.16)% (15.62)% 6.20% 10.83% Plan fiduciary net position as a percentage of the total pension liability 103.99% 102.09% 99.17% 98.57% Discount Rate 6.95% 6.95% 6.95% 6.95% Contractually required contribution $ 2,197,950 $ 2,210,912 $ 2,025,861 $ 2,029,610 Contributions in relation to the contractually required contribution (2,197,950) (2,210,912) (2,025,861) (2,029,610) Contribution excess $ - $ - $ - $ - School District's covered payroll $ 22,919,192 $ 21,868,566 $ 20,756,776 $ 19,724,101 Contributions as a percentage of covered payroll 9.59% 10.11% 9.76% 10.29% See independent auditors' report. 2023 Required Supplementary Information New York State Teachers' Retirement System 2023 (2) 2024(3) 2025 (3) Last Ten Fiscal Years 2026 (3) Schedule of the School District's Proportionate Share of the Net Pension Liability (Asset) (1) (1) The amounts presented for each fiscal year were determined as of the June 30 measurement date of the prior fiscal year. (2) Increase in the School District's proportionate share of the net pension liability mainly attributable to decrease in plan fiduciary net position due to investment losses. (3) Decrease in the School District's proportionate share of the net pension liability mainly attributable to increase in plan fiduciary net position due to investment gains. 2026 Schedule of Contributions 2025 2024 60 0.110139% 0.108842% 0.108671% 0.109483% 0.107448% 0.108427% $ (19,086,079) $ 3,007,601 $ (2,823,282) $ (1,979,741) $ (816,711) $ 1,161,293 $ 18,947,274 $ 18,822,336 $ 18,477,570 $ 18,138,972 $ 17,026,952 $ 16,731,299 (100.73)% 15.98% (15.28)% (10.91)% (4.80)% 6.94% 113.20% 97.76% 102.17% 101.53% 100.66% 99.01% 6.95% 7.10% 7.10% 7.25% 7.25% 7.50% $ 1,781,554 $ 1,740,502 $ 1,876,941 $ 1,748,110 $ 1,995,559 $ 2,218,570 (1,781,554) (1,740,502) (1,876,941) (1,748,110) (1,995,559) (2,218,570) $ - $ - $ - $ - $ - $ - $ 18,947,274 $ 18,822,336 $ 18,822,336 $ 18,138,972 $ 17,026,952 $ 16,731,299 9.40% 9.25% 9.97% 9.64% 11.72% 13.26% 2021 2022 2020 2019 2018 2017 2018 2017 2019 2020 2022 (3) 2021 (2) 61 Croton-Harmon Union Free School District, New York School District's proportion of the net pension liability (asset) 0.0166418% 0.0164966% 0.0180289% 0.0175876% School District's proportionate share of the net pension liability (asset) $ 938,887 $ 2,828,453 $ 2,654,584 $ 3,771,498 School District's covered payroll $ 6,670,731 $ 6,482,258 $ 6,535,901 $ 6,380,804 School District's proportionate share of the net pension liability (asset) as a percentage of its covered payroll 14.07% 43.63% 40.62% 59.11% Plan fiduciary net position as a percentage of the total pension liability 97.78% 93.08% 93.88% 90.78% Discount Rate 5.90% 5.90% 5.90% 5.90% Contractually required contribution $ 1,005,960 $ 939,182 $ 786,550 $ 680,650 Contributions in relation to the contractually required contribution (1,005,960) (939,182) (786,550) (680,650) Contribution excess $ - $ - $ - $ - School District's covered payroll $ 6,574,162 $ 6,380,140 $ 6,219,935 $ 6,474,495 Contributions as a percentage of covered payroll 15.30% 14.72% 12.65% 10.51% See independent auditors' report. (1) The amounts presented for each fiscal year were determined as of the March 31 measurement date within the current fiscal year. (2) Increase in the School District's proportionate share of the net pension liability mainly attributable to decrease in plan fiduciary net position due to investment losses. Required Supplementary Information New York State and Local Employees' Retirement System Last Ten Fiscal Years 2023 (2) 2024 (3) Schedule of the School District's Proportionate Share of the Net Pension Liability (Asset) (1) 2024 2025 2026 (3) 2026 (3) Decrease in the School District's proportionate share of the net pension liability mainly attributable to increase in plan fiduciary net position due to investment gains. Schedule of Contributions 2025 (2) 2023 62 0.0182433% 0.0180489% 0.0187452% 0.0190977% 0.0191017% 0.0197352% $ (1,491,316) $ 17,972 $ 4,963,849 $ 1,353,128 $ 616,497 $ 1,854,364 $ 6,040,908 $ 6,160,977 $ 6,060,981 $ 5,700,424 $ 5,532,627 $ 5,432,392 (24.69)% 0.29% 81.90% 23.74% 11.14% 34.14% 103.65% 99.95% 86.39% 96.27% 98.24% 94.70% 5.90% 5.90% 6.80% 7.00% 7.00% 7.00% $ 939,601 $ 861,145 $ 834,898 $ 791,873 $ 787,973 $ 801,828 (939,601) (861,145) (834,898) (791,873) (787,973) (801,828) $ - $ - $ - $ - $ - $ - $ 6,040,908 $ 6,160,977 $ 6,060,981 $ 5,700,424 $ 5,532,627 $ 5,432,392 15.55% 13.98% 13.77% 13.89% 14.24% 14.76% 2017 2018 (3) 2019 (3) 2020 (3) 2022 (3) 2019 2018 2017 2020 2021 (2) 2021 2022 63 Croton-Harmon Union Free School District, New York General Fund Comparative Balance Sheet June 30, ASSETS Cash and equivalents $ 7,231,935 $ 12,932,261 Investments 21,270,836 15,453,080 Receivables Accounts 17,200 42,971 State and Federal aid 1,728,799 207,222 Due from other governments 574,841 664,166 Due from other funds 497,556 153,123 2,818,396 1,067,482 Prepaid expenditures 3,200 3,107 Total Assets $ 31,324,367 $ 29,455,930 LIABILITIES AND FUND BALANCE Liabilities Accounts payable $ 888,590 $ 820,526 Accrued liabilities 173,074 245,515 Employee payroll deductions 1,779 2,515 Due to other funds - 11,389 Due to retirement systems 2,828,540 2,828,042 Deposits payable 82,683 68,384 Total Liabilities 3,974,666 3,976,371 Fund balance Nonspendable 3,200 3,107 Restricted 20,621,594 19,532,267 Assigned 4,214,395 3,504,343 Unassigned 2,510,512 2,439,842 Total Fund Balance 27,349,701 25,479,559 Total Liabilities and Fund Balance $ 31,324,367 $ 29,455,930 2026 2025 See independent auditors' report. 64 Croton-Harmon Union Free School District, New York General Fund Schedule of Revenues and Other Financing Sources Compared to Budget Year Ended June 30, 2026 Original Final Budget Budget Actual REAL PROPERTY TAXES $ 43,740,411 $ 43,740,411 $ 43,740,411 $ - OTHER TAX ITEMS Payments in lieu of taxes 44,702 44,702 44,702 - School tax relief reimbursement 1,682,161 1,682,161 1,682,161 - 1,726,863 1,726,863 1,726,863 - NON-PROPERTY TAXES Non-property tax distribution from County 975,000 975,000 1,090,625 115,625 CHARGES FOR SERVICES Day school tuition - Individuals 130,000 130,000 559,070 429,070 Other services for other districts and other governments - - 554 554 130,000 130,000 559,624 429,624 USE OF MONEY AND PROPERTY Earnings on investments 300,000 300,000 1,177,361 877,361 Rental of real property 42,000 42,000 77,616 35,616 342,000 342,000 1,254,977 912,977 SALE OF PROPERTY AND COMPENSATION FOR LOSS Insurance recoveries 7,500 7,500 22,202 14,702 Minor sales 7,000 7,000 80,656 73,656 14,500 14,500 102,858 88,358 STATE AID Basic formula 9,448,374 9,448,374 9,815,348 366,974 BOCES 642,609 642,609 733,669 91,060 Textbooks 94,365 94,365 95,239 874 Computer software 36,519 36,519 36,519 - Library 9,794 9,794 9,793 (1) Other - 8,219 8,219 - 10,231,661 10,239,880 10,698,787 458,907 FEDERAL AID Medicaid assistance 20,000 20,000 26,507 6,507 MISCELLANEOUS Refund of prior year's expenditures 145,000 145,000 296,025 151,025 Other 5,000 8,000 43,634 35,634 150,000 153,000 339,659 186,659 TOTAL REVENUES 57,330,435 57,341,654 59,540,311 2,198,657 OTHER FINANCING SOURCES Transfers in Debt Service Fund - 408,492 408,492 - TOTAL REVENUES AND OTHER FINANCING SOURCES $ 57,330,435 $ 57,750,146 $ 59,948,803 $ 2,198,657 See independent auditors' report. over (under) Actual Variance with Final Budget - 65 Croton-Harmon Union Free School District, New York General Fund Schedule of Expenditures and Other Financing Uses Compared to Budget Year Ended June 30, 2026 Original Final Encumbr- Budget Budget Actual ances GENERAL SUPPORT BOARD OF EDUCATION Board of education $ 40,175 $ 40,175 $ 35,143 $ - $ (5,032) District clerk 49,000 48,564 39,946 - (8,618) Total Board of Education 89,175 88,739 75,089 - (13,650) CENTRAL ADMINISTRATION Chief school administrator 374,153 393,469 389,452 3,780 (237) FINANCE Business administration 691,147 721,517 701,926 - (19,591) Auditing 74,780 74,780 65,540 - (9,240) Treasurer 126,400 126,400 124,550 - (1,850) Fiscal agent fees 27,935 27,935 26,435 - (1,500) Total Finance 920,262 950,632 918,451 - (32,181) STAFF Legal 251,425 251,425 139,634 - (111,791) Personnel 168,636 168,721 164,015 - (4,706) Records management officer 6,544 6,544 4,342 - (2,202) Public information and services 259,484 247,885 227,481 - (20,404) Total Staff 686,089 674,575 535,472 - (139,103) CENTRAL SERVICES Operation and maintenance of plant 6,387,985 6,743,265 5,181,475 1,180,081 (381,709) Central printing and mailing 124,975 124,975 118,019 - (6,956) Central data processing 74,177 74,177 72,414 - (1,763) Total Central Services 6,587,137 6,942,417 5,371,908 1,180,081 (390,428) SPECIAL ITEMS Unallocated insurance 372,300 317,842 316,454 - (1,388) School association dues 21,000 21,000 12,126 - (8,874) Judgments and claims - 5,892 5,892 - - Assessments of school property 65,000 65,000 (65,000) - (130,000) Refunds of real property taxes - - - - - Administrative charge - BOCES 329,316 329,316 326,247 - (3,069) BOCES capital expenses 48,630 48,630 48,630 - - Total Special Items 836,246 787,680 644,349 - (143,331) Total General Support 9,493,062 9,837,512 7,934,721 1,183,861 (718,930) INSTRUCTION INSTRUCTION, ADMINISTRATION AND IMPROVEMENT Curriculum development and supervision 626,692 642,796 632,556 - (10,240) Building administration 1,627,293 1,562,984 1,439,757 - (123,227) Total Instruction, Administration and Improvement 2,253,985 2,205,780 2,072,313 - (133,467) (Continued) over (under) Final Budget - Variance with Actual and Encumbrances 66 Croton-Harmon Union Free School District, New York General Fund Schedule of Expenditures and Other Financing Uses Compared to Budget (Continued) Year Ended June 30, 2026 Original Final Encumbr- Budget Budget Actual ances INSTRUCTION (Continued) TEACHING - REGULAR SCHOOL $ 16,395,645 $ 16,567,706 $ 15,793,871 $ 204,116 $ (569,719) PROGRAMS FOR STUDENTS WITH DISABILITIES 6,248,895 6,233,420 5,534,103 6,375 (692,942) OCCUPATIONAL EDUCATION 371,328 371,328 371,328 - - TEACHING - SPECIAL SCHOOLS 33,050 33,050 - - (33,050) INSTRUCTIONAL MEDIA School library and audiovisual 556,883 554,900 516,875 - (38,025) Educational television 13,982 13,983 4,510 - (9,473) Computer assisted instruction 1,792,888 1,955,914 1,842,229 103,118 (10,567) Total Instructional Media 2,363,753 2,524,797 2,363,614 103,118 (58,065) PUPIL SERVICES Attendance- Regular school - 3,500 3,500 - - Guidance - Regular school 1,063,015 1,063,015 1,009,722 - (53,293) Health services - Regular school 400,160 406,797 328,922 - (77,875) Psychological services - Regular school 561,716 560,862 503,952 - (56,910) Social work services - Regular school 119,804 119,804 81,666 - (38,138) Co-curricular activities - Regular school 301,292 293,662 250,519 - (43,143) Interscholastic athletics - Regular school 1,268,315 1,268,316 1,127,950 - (140,366) Total Pupil Services 3,714,302 3,715,956 3,306,231 - (409,725) Total Instruction 31,380,958 31,652,037 29,441,460 313,609 (1,896,968) PUPIL TRANSPORTATION District transportation services 3,168,090 3,183,148 2,691,603 - (491,545) Building 104,176 94,576 56,900 - (37,676) Total Pupil Transportation 3,272,266 3,277,724 2,748,503 - (529,221) EMPLOYEE BENEFITS State retirement 1,149,869 1,149,869 985,455 - (164,414) Teachers' retirement 2,398,374 2,398,374 2,195,986 - (202,388) Social security 2,556,000 2,496,399 2,276,657 - (219,742) Life insurance 15,000 15,000 9,078 - (5,922) Hospital, medical and dental insurance 5,216,640 5,011,640 4,410,335 - (601,305) Workers' compensation 224,522 224,522 206,171 - (18,351) Unemployment benefits 10,000 10,000 9,599 - (401) Disability insurance 5,125 5,125 - - (5,125) Union welfare benefits 289,160 289,160 279,798 - (9,362) Other 340,450 332,550 319,028 - (13,522) Total Employee Benefits 12,205,140 11,932,639 10,692,107 - (1,240,532) DEBT SERVICE Principal Bonds 1,690,000 1,690,000 1,690,000 - - Energy performance contract 544,207 544,207 544,206 - (1) 2,234,207 2,234,207 2,234,206 - (1) (Continued) Actual and Encumbrances over (under) Final Budget - Variance with 67 Croton-Harmon Union Free School District, New York General Fund Schedule of Expenditures and Other Financing Uses Compared to Budget (Continued) Year Ended June 30, 2026 Original Final Encumbr- Budget Budget Actual ances DEBT SERVICE (Continued) Interest Bonds $ 237,900 $ 237,900 $ 237,900 $ - $ - Bond anticipation notes 1,567,540 1,664,679 1,664,678 - (1) Energy performance contract 52,228 52,228 52,227 - (1) 1,857,668 1,954,807 1,954,805 - (2) Total Debt Service 4,091,875 4,189,014 4,189,011 - (3) TOTAL EXPENDITURES 60,443,301 60,888,926 55,005,802 1,497,470 (4,385,654) OTHER FINANCING USES Transfers out Capital Projects Fund 1,481,477 2,803,632 2,803,631 - (1) Special Aid Fund 80,000 80,000 39,228 - (40,772) School Lunch Fund 30,000 230,000 230,000 - - TOTAL OTHER FINANCING USES 1,591,477 3,113,632 3,072,859 - (40,773) TOTAL EXPENDITURES AND OTHER FINANCING USES $ 62,034,778 $ 64,002,558 $ 58,078,661 $ 1,497,470 $ (4,426,427) See independent auditors' report. Encumbrances over (under) Final Budget - Variance with Actual and 68 Croton-Harmon Union Free School District, New York Special Aid Fund Comparative Balance Sheet June 30, ASSETS Receivables State and Federal aid $ 566,694 $ 271,908 LIABILITIES Accounts payable $ 42,104 $ 101,160 Accrued liabilities - 1,051 Due to other governments - 3,018 Due to other funds 497,556 153,123 Unearned revenues 27,034 13,556 Total Liabilities $ 566,694 $ 271,908 2025 2026 See independent auditors' report. 69 Croton-Harmon Union Free School District, New York Special Aid Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Years Ended June 30, REVENUES State aid $ 429,497 $ 500,232 Federal aid 632,711 475,118 Miscellaneous 6,260 54,141 Total Revenues 1,068,468 1,029,491 EXPENDITURES Current Instruction 1,028,956 980,170 Pupil transportation 78,740 93,082 Total Expenditures 1,107,696 1,073,252 Deficiency of Revenues Over Expenditures (39,228) (43,761) OTHER FINANCING SOURCES Transfers in 39,228 43,761 Net Change in Fund Balance - - FUND BALANCE Beginning of Year - - End of Year $ - $ - 2026 2025 See independent auditors' report. 70 Croton-Harmon Union Free School District, New York Capital Projects Fund Comparative Balance Sheet June 30, ASSETS Cash and equivalents $ 1,937,416 $ 20,637,670 State and Federal aid receivable 114,687 14,687 Due from other funds - 11,389 Total Assets $ 2,052,103 $ 20,663,746 LIABILITIES AND FUND DEFICIT Liabilities Accounts payable $ 1,165 $ 3,981,309 Bond anticipation notes payable 39,839,766 41,632,595 Due to other funds 41,635 151,297 Total Liabilities 39,882,566 45,765,201 Fund deficit Unassigned (37,830,463) (25,101,455) Total Liabilities and Fund Deficit $ 2,052,103 $ 20,663,746 2026 2025 See independent auditors' report. 71 (This page intentionally left blank) Croton-Harmon Union Free School District, New York Capital Projects Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Years Ended June 30, REVENUES State aid $ 200,000 $ 7,699 Miscellaneous 25,000 - Total Revenues 225,000 7,699 EXPENDITURES Capital outlay 15,757,639 24,919,543 Deficiency of Revenues Over Expenditures (15,532,639) (24,911,844) OTHER FINANCING SOURCES (USES) Transfers in 2,803,631 3,124,118 Transfers out - (514,758) Total Other Financing Sources 2,803,631 2,609,360 Net Change in Fund Balance (12,729,008) (22,302,484) FUND BALANCE (DEFICIT) Beginning of Year (25,101,455) (2,798,971) End of Year $ (37,830,463) $ (25,101,455) 2026 2025 See independent auditors' report. 72 Croton-Harmon Union Free School District, New York Capital Projects Fund Project-Length Schedule Inception of Project Through June 30, 2026 Expenditures and Transfers to Date Prior Current Unexpended PROJECT Authorization Years Year Total Balance 2022 Building Improvements District-Wide Roofing $ 4,538,604 $ 4,122,040 $ 416,564 $ 4,538,604 $ - District-Wide Security 9,972,189 6,232,337 3,739,852 9,972,189 - District-Wide Improvements 29,967,375 18,999,483 10,591,223 29,590,706 376,669 PVC HVAC 805,780 - - - 805,780 CET Tennis Court Lighting 441,052 - 35,258 35,258 405,794 Total 2022 Building Improvements 45,725,000 29,353,860 14,782,897 44,136,757 1,588,243 21-22 Bus Purchases/Charging Stations 252,461 252,461 - 252,461 - 22-23 Bus Purchases 379,925 379,925 - 379,925 - 22-23 (20) Passenger mini-bus 65,000 - - - 65,000 24-25 Electric Vehicle Bus 461,702 - 245,227 245,227 216,475 24-25 Repairs and Maintenance Lift 111,075 - 111,075 111,075 - 25-26 Electric Bus Purchases 274,500 - 274,500 274,500 - 25-26 Bus Purchases 385,000 - 343,940 343,940 41,060 26-27 Diesel Bus Purchase 198,000 - - - 198,000 26-27 Bus Purchase 115,000 - - - 115,000 26-27 Hybrid SUV 67,000 - - - 67,000 Smart School 346,118 346,118 - 346,118 - Totals $ 48,380,781 $ 30,332,364 $ 15,757,639 $ 46,090,003 $ 2,290,778 See independent auditors' report. 73 Methods of Financing $ 3,489,174 $ - $ - $ 3,489,174 $ (1,049,430) $ 2,637,673 - - 100,000 100,000 (9,872,189) 9,872,189 - 2,500,000 100,000 2,600,000 (26,990,706) 26,990,706 - - - - - - - - 25,000 25,000 (10,258) 10,258 3,489,174 2,500,000 225,000 6,214,174 (37,922,583) 39,510,826 151,476 - - 151,476 (100,985) 100,985 151,970 - - 151,970 (227,955) 227,955 - - - - - - - 245,227 - 245,227 - - - 111,075 - 111,075 - - - 274,500 - 274,500 - - - 385,000 - 385,000 41,060 - - 198,000 - 198,000 198,000 - - 115,000 - 115,000 115,000 - - 67,000 - 67,000 67,000 - - - 346,118 346,118 - - $ 3,792,620 $ 3,895,802 $ 571,118 $ 8,259,540 $ (37,830,463) $ 39,839,766 Other Total Notes Outstanding at June 30, 2026 Fund Balance (Deficit) at June 30, 2026 Bond Anticipation Obligations of Proceeds In Transfers 74 Croton-Harmon Union Free School District, New York Combining Balance Sheet Non-Major Governmental Funds June 30, 2026 (With Comparative Totals for 2025) Debt Service ASSETS Cash and equivalents $ 202,278 $ 205,737 $ 1,471,254 Receivables State and Federal aid 142,393 - - Due from other funds - - 41,635 142,393 - 41,635 Inventories 15,058 - - Total Assets $ 359,729 $ 205,737 $ 1,512,889 LIABILITIES AND FUND BALANCES Liabilities Accounts payable $ 82,361 $ - $ - Accrued liabilities 1,688 - - Due to other governments 149 759 - Unearned revenues 76,823 - - Total Liabilities 161,021 759 - Fund balances Nonspendable 15,058 - - Restricted - 204,978 1,512,889 Assigned 183,650 - - Total Fund Balances 198,708 204,978 1,512,889 Total Liabilities and Fund Balances $ 359,729 $ 205,737 $ 1,512,889 See independent auditors' report. Lunch Revenue Fund School Special Miscellaneous 75 $ 1,879,269 $ 1,546,467 142,393 15,655 41,635 151,297 184,028 166,952 15,058 6,412 $ 2,078,355 $ 1,719,831 $ 82,361 $ - 1,688 2,179 908 887 76,823 103,265 161,780 106,331 15,058 6,412 1,717,867 1,548,862 183,650 58,226 1,916,575 1,613,500 $ 2,078,355 $ 1,719,831 Total Non-Major Governmental Funds 2025 2026 76 Croton-Harmon Union Free School District, New York Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds Year Ended June 30, 2026 (With Comparative Totals for 2025) REVENUES Use of money and property $ - $ 484 $ 50,281 State aid 604,697 - - Federal aid 253,856 - - Food sales 202,405 - - Miscellaneous - 179,500 512,060 Total Revenues 1,060,958 179,984 562,341 EXPENDITURES Current Cost of food sales 1,156,888 - - Other - 164,828 - Total Expenditures 1,156,888 164,828 - Excess (Deficiency) of Revenues Over Expenditures (95,930) 15,156 562,341 OTHER FINANCING SOURCES (USES) Transfers in 230,000 - - Transfers out - - (408,492) Total Other Financing Sources (Uses) 230,000 - (408,492) Net Change in Fund Balances 134,070 15,156 153,849 FUND BALANCES Beginning of Year 64,638 189,822 1,359,040 End of Year $ 198,708 $ 204,978 $ 1,512,889 See independent auditors' report. Miscellaneous Service Lunch Revenue Fund School Special Debt 77 $ 50,765 $ 156,628 604,697 8,341 253,856 215,693 202,405 572,859 691,560 597,014 1,803,283 1,550,535 1,156,888 920,206 164,828 202,775 1,321,716 1,122,981 481,567 427,554 230,000 624,286 (408,492) (125,544) (178,492) 498,742 303,075 926,296 1,613,500 687,204 $ 1,916,575 $ 1,613,500 2025 2026 Total Non-Major Governmental Funds 78 Croton-Harmon Union Free School District, New York School Lunch Fund Comparative Balance Sheet June 30, ASSETS Cash and equivalents $ 202,278 $ 148,138 State and Federal aid receivable 142,393 15,655 Inventories 15,058 6,412 Total Assets $ 359,729 $ 170,205 LIABILITIES AND FUND BALANCE Liabilities Accounts payable $ 82,361 $ - Accrued liabilities 1,688 2,179 Due to other governments 149 123 Unearned revenues 76,823 103,265 Total Liabilities 161,021 105,567 Fund balance Nonspendable 15,058 6,412 Assigned 183,650 58,226 Total Fund Balance 198,708 64,638 Total Liabilities and Fund Balance $ 359,729 $ 170,205 2026 2025 See independent auditors' report. 79 Croton-Harmon Union Free School District, New York School Lunch Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Years Ended June 30, REVENUES State aid $ 604,697 $ 8,341 Federal aid 253,856 215,693 Food sales 202,405 572,859 Miscellaneous - 11 Total Revenues 1,060,958 796,904 EXPENDITURES Current Cost of food sales 1,156,888 920,206 Deficiency of Revenues Over Expenditures (95,930) (123,302) OTHER FINANCING SOURCES Transfers in 230,000 130,000 Net Change in Fund Balance 134,070 6,698 FUND BALANCE Beginning of Year 64,638 57,940 End of Year $ 198,708 $ 64,638 2026 2025 See independent auditors' report. 80 Croton-Harmon Union Free School District, New York Miscellaneous Special Revenue Fund Comparative Balance Sheet June 30, Cash and equivalents $ 205,737 $ 190,586 Liabilities Due to other governments $ 759 $ 764 Fund balance Restricted 204,978 189,822 Total Liabilities and Fund Balance $ 205,737 $ 190,586 ASSETS LIABILITIES AND FUND BALANCE 2026 2025 See independent auditors' report. 81 Croton-Harmon Union Free School District, New York Miscellaneous Special Revenue Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Years Ended June 30, REVENUES Use of money and property $ 484 $ 876 Miscellaneous 179,500 188,511 Total Revenues 179,984 189,387 EXPENDITURES Current Other 164,828 202,775 Excess (Deficiency) of Revenues Over Expenditures 15,156 (13,388) FUND BALANCE Beginning of Year 189,822 203,210 End of Year $ 204,978 $ 189,822 2026 2025 See independent auditors' report. 82 Croton-Harmon Union Free School District, New York Debt Service Fund Comparative Balance Sheet June 30, Cash and equivalents $ 1,471,254 $ 1,207,743 Due from other funds 41,635 151,297 Total Assets $ 1,512,889 $ 1,359,040 Restricted $ 1,512,889 $ 1,359,040 ASSETS FUND BALANCE 2026 2025 See independent auditors' report. 83 Croton-Harmon Union Free School District, New York Debt Service Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balance Years Ended June 30, REVENUES Use of money and property $ 50,281 $ 155,752 Miscellaneous 512,060 408,492 Total Revenues 562,341 564,244 OTHER FINANCING SOURCES (USES) Transfers in - 494,286 Transfers out (408,492) (125,544) Total Other Financing Sources (Uses) (408,492) 368,742 Net Change in Fund Balance 153,849 932,986 FUND BALANCE Beginning of Year 1,359,040 426,054 End of Year $ 1,512,889 $ 1,359,040 See independent auditors' report. 2026 2025 84 Croton-Harmon Union Free School District, New York General Fund Analysis of Change from Adopted Budget to Final Budget Year Ended June 30, 2026 Adopted Budget $ 60,996,050 Additions - Encumbrances 1,038,728 Original Budget 62,034,778 Budget Amendments 1,967,780 Final Budget $ 64,002,558 General Fund Section 1318 of Real Property Tax Law Limit Calculation 2026-27 Expenditure Budget $ 62,762,808 General Fund Fund Balance Subject to Section 1318 of Real Property Tax Law Unrestricted fund balance Assigned fund balance $ 4,214,395 Unassigned fund balance 2,510,512 Total Unrestricted Fund Balance 6,724,907 Less Appropriated for subsequent year's budget 2,716,925 Encumbrances 1,497,470 Total Adjustments 4,214,395 General Fund Fund Balance Subject to Section 1318 of Real Property Tax Law $ 2,510,512 Actual Percentage 4.00% See independent auditors' report. 85 Croton-Harmon Union Free School District, New York Schedule of Net Investment in Capital Assets June 30, 2026 Capital Assets, net $ 105,440,914 Less General obligation bonds payable $ (3,630,000) Energy performance contract payable (2,581,317) Bond anticipation notes payable (39,839,766) Accounts payable (1,165) Unamortized portion of issuance premium on bonds (268,031) (46,320,279) Plus Unexpended bond proceeds 1,589,408 Net Investment in Capital Assets $ 60,710,043 See independent auditors' report. 86 (This page intentionally left blank) PKF O’CONNOR DAVIES, LLP 500 Mamaroneck Avenue, Harrison, NY 10528 I Tel: 914.381.8900 I Fax: 914.381.8910 I www.pkfod.com PKF O’Connor Davies, LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept any responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. 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 Auditors’ Report The Board of Education of the Croton-Harmon Union Free School District, New York We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund and the aggregate remaining fund information of the Croton-Harmon Union Free School District, New York (“School District”) as of and for the year ended June 30, 2026, and the related notes to the financial statements, which collectively comprise the School District’s basic financial statements, and have issued our report thereon dated October 7, 2026. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (“internal control”) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the School 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 School District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the School 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 School District’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 School District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. PKF O’Connor Davies, LLP Harrison, New York October 7, 2026 88