DeKalb County Board of Education, Decatur, Georgia, annual financial report for the fiscal year ended June 30, 2010 (including independent auditor's reports)

DEKALB COUNTY BOARD OF EDUCATION
STONE MOUNTAIN, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED
JUNE 30,2010
(IncludingIndependentAuditor's Reports)

DEKALB COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

B

STATEMENT OF ACTlVlTlES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND

DEKALB COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

COMPONENT UNIT FINANCIAL STATEMENTS

2

COMBINING STATEMENT OF NET ASSETS

CHARTER SCHOOL COMPONENT UNITS

3

COMBINING STATEMENT OF ACTIVITIES

CHARTER SCHOOL COMPONENT UNITS

4 SCHEDULE OF EXPENDITURES OF FEDERALAWARDS

5 SCHEDULE OF STATE REVENUE

6 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

7 ALLOTMENTS AND EXPENDITURES

GENERAL FUND -QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAlTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WlTH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITOR'S REPORT ON COMPLlANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133

SECTION Ill AUDITEE'S RESPONSETO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

DEKALB C O U N N BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1- 156
Atlanta, Georgia 30334-8400
July 27, 2 0 1 1

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Interim Superintendent and Members of the DeKalb County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the DeKalb County Board of Education, as of and for the year ended June 30, 2010, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the DeKalb County Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of DeKalb Academy of Technology and the Environment, DeKalb PATH Academy, Destiny Academy of Excellence and the International Community School Charter Schools, which are discretely presented component units. Those financial statements were audited by other auditors whose report thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included for those financial statements are based on the report of other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditng Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The financial statements of DeKalb Academy of Technology and the Environment, DeKalb PATH Academy, Destiny Academy of Excellence and the International Community School Charter Schools were not audited in accordance with Government Auditng Standards. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinions.

In our opinion, based on our audit and the report of other auditors, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the DeKalb County Board of Education, as of June 30, 2010, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
As described in Note 2 to the financial statements, the School District has reported the financial activity of Charter Schools within the financial statements as discretely presented component units.
In accordance with Government Auditing Standards, we have also issued our report dated July 27, 2011, on our consideration of the DeKalb County Board of Education'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 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessingthe results of our audit.
Management's Discussion and Analysis and the Schedule of Revenues, Expendituresand Changes in Fund Balances - Budget and Actual, as presented on pages i through ix and page 3 1respectively, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We and the other auditors have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However,we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the DeKalb County Board of Education's financial statements as a whole. The accompanying supplementary information consists of Schedules 2 through 7, which includes the Schedule of Federal Awards as required by U. S. Office of Management and Budget Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of
additional analysis and are not a required part of the financial statements. Such information has been subjected to the auditing procedures applied by us and the other auditors in the audit of the financial statements, and in our opinion, based on our audit and the report of other auditors, is fairly stated, in all material respects, in relation to the financial statements as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
~us)ell W. Hinton, CPA, CGFM State Auditor

DEKALB COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010
The discussion and analysis of the DeKalb County Board of Education's financial performance provides an overall review of the Board'sfinancial activities for the fiscal year ended June 30, 2010. The intent of this discussion and analysis is to look at the Board's financial performance as a whole; readers should also review the notes to the basic financial statements and the financial statements to enhance their understandingof the Board's financial performance.
Financial Highlights
Key financial highlights for 2010 are as follows:
o In total, net assets increased $34.3 million to $1.222 billion. This represents a 3.0 percent increase from 2009. This total increase was due to governmental activities since the Board has no business-typeactivities.
General revenues accounted for $565.7 million in revenue or 51.4 percent of all revenues. Program specific revenues in the form of charges for sewices, operating and capital grants and contributions accounted for $534.5 million or 48.6 percent of total revenues of $1.100 billion.
The Board had $1.066 billion in expenses related to governmental activities; $534.5 million of these expenses were offset by program specific charges for services, grants or contributions.
o Among major funds, the general fund has $1.021 billion in revenues and other sources and
$1.004 billion in expenditures. The general fund's "Net Change in Fund Balances" increased by $17.2 million resulting in an increase in the "Total Fund Balances" from $6.1 million to $23.3 million for the fiscal year. The fund balance reflects the full accrual of all contracted salaries and benefits unpaid at June 3 0 in full compliance with GASB 3 4 regulations.
Usingthe Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the DeKalb County Board of Education as a financial whole, or as an entire operating entity.
The Statementof Net Assetsand StatementofActivitiesprovides information about the activities of the whole Board, presenting both an aggregate view of the Board's finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the Board's most significant funds. In the case of the DeKalb County Board of Education, the general fund is by far the most significant fund.
Reportingthe Board as a Whole
Statementof Net Assets and the Statementof Activities
While this document includes a number of funds used by the Board to provide programs and activities, a view of the Board as a whole requires looking at all financial transactions to ask the question, "How did we do financially during 2010?" The Statement of Net Assets and the Statement of Activities answers this question. These statements include all assets and liabilities using the accrual basis o f accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.

DEKALB COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010
These two statements report the Board's net assets and changes in those assets. This change in net assets is important because it tells the reader that, for the Board as a whole, the financial position of the Board has improved or diminished. The causes of this change may be a result of many factors, some financial, some not. Nonfinancial factors include the Board's property tax base, facility conditions, required educational programs and other factors.
In the Statement of Net Assets and the Statement of Activities, the Board has one distinct type of activity:
Governmental Activities -All of the Board's programs and services are reported here including instruction, pupil services, improvement of instructional services, educational media services, general administration, school administration, business administration, maintenance and operation of plant, student transportation services, central support services, other support services, food services and interest on debt.
Reportingthe Board's Most Significant Funds
FundFinancialStatemenis
Fund financial reports provide detailed information about the Board's major funds. The Board uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the Board's most significant funds. The Board's major governmental funds are the general fund, District-wide capital projects fund and the debt service fund.
Governmental Funds: Most of the Board's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using an accounting method called modified accrualaccounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the Board's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements.
Fiduciary Funds: The Board is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The Board is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The Board excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.
The Board as a Whole
The perspective of the statement of net assets is of the Board as a whole. Table 1provides a summary of the Board's net assets for fiscal year 2010 compared to fiscal year 2009.

DEKALB COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30,2010

Table 1 Net Assets (In Thousands)
Assets Current and Other Assets Capital Assets, Net
Total Assets
Liabilities Current and Other Liabilities Long-Term Liabilities
Total Liabilities
Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted
Total Net Assets
Total Liabilities and Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2010

Year 2009"

Total net assets increased $34.3 million.
*Fiscal year 2009 amounts do not reflect the restatement for Charter Schools. See Note 2 in the basic financial statements for more information.

DEKALB COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010

Table 2 shows the changes in net assets for fiscal year 2010 compared to fiscal year 2009.
Table 2 Change in Net Assets
(In Thousands)

Governmental Activities

Fiscal Year

Fiscal Year

Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Caoital Grants and Contributions

Total Program Revenues
General Revenues: Taxes Property Taxes For Ma~ntenanceand Operations Sales Taxes Special Purpose Local Opt~onSales Tax For Cap~taPl rojects Other Sales Tax Investment Earnings Miscellaneous
Special ltems Loss on Disposal of Capital Assets
Total General Revenues and Special ltems
Total Revenues
Program Expenses: Instruction Support Services Pupil S e ~ ~ c e s Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportat~onServices Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Serv~ces Interest on Short-Term and Long-Term Debt
Total Expenses
Increase in Net Assets
*Fiscal year 2009 amounts do not reflect the restatement for Charter Schools. See Note 2 in the basic financial statements for more information.

DEKALB COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010

Governmental Activities
Instruction, Pupil Services and lmprovement of Instructional Services comprises 69.4 percent of governmental program expenses. The Operations of Non-instructional Services amounted to 5.1 percent of the total governmental program expenses. These operations consist primarily of the School Nutrition.
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the net cost of services for fiscal year 2 0 1 0 compared to fiscal year 2009. That is, it identifies the cost of these services supported by tax revenue and unrestricted State entitlements.
Table 3 Governmental Activities
(in Thousands)

Net Cost of Services
Fiscal Year 2010

Net Cost of Services
Fiscal Year 2009'

Instruction Support Services:
Pupil Services lmprovementof InstructionalServices Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-InstructionalServices: Enterprise Operations Community Servics Food Services Intereston Short-Termand Long-Term Debt

Total Expenses

*Fiscal year 2009 amounts do not reflect the restatement for Charter Schools. See Note 2 in the basic financial statements for more information.

DEKALB COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010
Although program revenues make up 48.6 percent of the revenues, the Board is still primarily dependent upon tax revenues for governmental activities. More than 51.0 percent of instruction activities are supported through taxes and other general revenues; for all governmental activities general revenue support is 49.8 percent.
The Board's Funds
The Board's governmental funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues and other financing sources of $1.249 billion and expenditures and other financing uses of $1.344 billion. There was a decrease in fund balance of $112.6 million in the capital project funds due to the increase in construction projects during the year and the funding of bond payments to the debt service fund. The general fund had an increase in fund balance of $17.2 million. The effort by the Board to begin to rebuild the general fund balance, which has been severely depleted in prior years by state funding reductions which began in fiscal year 2003, was subordinated to provide additional resources for instruction and student achievement. This has resulted in a reduction in state earnings of nearly $196.0 million over the past eight fiscal years.
General Fund Budgeting Highlights
The Board's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund.
During the course of fiscal year 2010, the Board amended its General Fund budget as needed. The Board uses site-based budgeting based on FTE student allocations. The budgeting systems are designed to tightly control total sited budgets but provide flexibility for site management.
For the General Fund, final budgeted revenues and other sources of $1.115 billion were under performed by the actual revenues by $94.0 million. This difference was due mainly to less State Funds received due to State budget cuts and removal of budgeted alternative benefit funds from actual revenue amounts. Worse than expected investment earnings were also a factor in the reduced revenue.
Actual expenditures of $1.004 billion were 7.65 percent less than the final budgeted total of $1.087 billion. Less than projected instructional salaries contributed to the budget variance.
General Fund expenditures were exceeded by revenues and other financing sources resulting in an increase in "Net Change in Fund Balances" of $17.2 million for the year. The Board recognizes the need to balance the community support for funding of education of our students while at the same time being conscious of maintaining a viable fund balance in anticipation of future needs. This increase is evidence of their work.
Capital Assets and Debt Administration
Capital Assets
At the end of fiscal year 2010 the Board had $1.195 billion invested in capital assets, all in governmental activities. Table 4 shows fiscal year 2010 balances compared with fiscal year 2009 balances.

DEKALB COUNTY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 30,2010

Table 4 Capital Assets (Net of Depreciation, in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2010

Year 2009"

Land

$

Construction In Progress

Buildingand Improvements

ImprovementsOther Than Buildings

Equipment

41,255 $ 111,282 964,745 28,608 49,516

41,255 54,864 935,033 27,556 49,589

Total

*Fiscal year 2009 amounts do not reflect the restatement for Charter Schools. See Note 2 in the basic financial statements for more information.
The primary increases occurred in buildings and building improvements as well as construction in
progress. Due to the ongoing growth in the county, the Board has numerous construction projects
including new buildings, additions, and renovations.
Debt
At June 30, 2010, the Board had $76.6 million in capital leases. There were $12.5 million in compensated absences. There is $220.0 million in general obligation bonds and $6.6 million in premiums from the fiscal year 2007 bond issue. $97.6 million of the outstanding debt is due within one year. The Board defeased all of its outstanding General Obligation Bonds in prior years. This defeasance was the culmination of the 1997 Special Purpose Local Option Sales Tax Program with sales tax proceeds being used to enable the Board to become essentially debt free.
Table 5 summarizes long-term debt outstanding and compares fiscal year 2010 balances to fiscal year 2009 balances.

DEKALB COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010

Table 5 Debt at June 30 (in Thousands)

Governmental Activities

Fiscal

Fiscal

Year 2010

Year 2009*

Capital Leases

$

Compensated Absences

General Obligation Bonds

Unamortized Bond Premium

76,561 $ 12,482 220,000
6,646

37,081 12,645
300,000
8,861

Total

*Fiscal year 2009 amounts do not reflect the restatement for Charter Schools. See Note 2 in the basic financial statements for more information.
The Board maintains an AA- and Aa3 bond rating from Standard and Poor's and Moody's, respectively.
Current Issues
The DeKalb County School District continues to face serious reductions in the state's "Quality Basic Education" funding formula earnings. In addition to the over $89.3 million in state funding lost in the current year, state austerity reductions have amounted to nearly $267.0 million through fiscal year 2011. Sales tax collections from the 2007 approved Special Purpose Local Option Sales Tax continue to exceed projections although the collections are not as high as they have been.
Continued challenges with state funding are a concern for the DeKalb County School System. DeKalb County School System has been underfunded according to the state's funding formula by more than $266 million since 2003. More than $165.0 million of the reductions have occurred in fiscal years 2009 through 2011. Year-over-year state revenues have decreased from the 2008 fiscal year through the 2 0 1 1 fiscal year. While state revenues did not significantly decline for the 2012 fiscal year the indication provided is that the current level of funding is to be expected for the next several years. The student population remains stable.
Local revenue in DeKalb County School District is decreasing also. Property tax revenues are impacted by the revaluation of property due to foreclosures and weak sales. Overall, total General Fund revenues are decreasing for the third consecutive year. Prior to the 2009 fiscal year, the tax digest in DeKalb has never seen a decrease in value. Now, for the fiscal year 2012, the tax digest is projected to decrease by an additional 14%.
The Board will be challenged to continue to overcome any current or future financial challenges given the state of the local, state, and national economy. DeKalb County School District does continue to strive to increase the working reserve to higher levels in order to sustain the School System and will do so as soon as it is feasible.

DEKALB COUNlY BOARD OF EDUCATION MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDEDJUNE 30,2010
Contacting the Board's Financial Management
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the Board's finances and to show the Board's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mr. Marcus T. Turk, Chief Financial Officer, at the DeKalb County Board of Education, 1701Mountain Industrial Blvd., Stone Mountain, Georgia, 30083. You may also e-mail your questions to marcus~turk@fc.dekalb.kl2.ga.us.

DEKALB COUNTY BOARD OF EDUCATION

DEKALB COUNW BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30,2010

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable. Net
Taxes State Government Federal Government Other Inventories Prepaid Items Other Current Assets Capital Assets, Non-Depreciable Capital Assets, Depreciable(Net of Accumulated Depreciation)
Total Assets

PRIMARY GOVERNMENT GOVERNMENTAL
ACTIVITIES

COMPONENT UNITS CHARTER SCHOOLS

LIABILITIES
Accounts Payable Salaries and Benefits Payable l nterest Payable Contracts Payable Retainages Payable Deposits and Deferred Revenues Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilitiesand Net Assets

The notesto the basic financial statements are an integral part of this statement. -1-

DEKALB COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30,2010

GOVERNMENTAL ACTIVITIES
lnstructlon Support Services
Pupil Services Improvement of Instructional SeNices Educational Media SeNiCeS General Adm~nistration School Administration Business Administration Maintenance and Operation Of Plant Student Transportation Servlces Central Support Services Other Support Services Operationsof Non-Instructional Services Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
COMPONENT UNITS
Charter Schools
General Revenues Taxes Propem Taxes For Maintenance and Operations For Debt Services Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Investment Earnings Miscellaneous
Special Items LOSSon Disposal of Capital Assets (Note 11)
Total General Revenues and Special ltems
Changes In Net Assets
Net Assets - Beginning of Year (Restated)
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

The notes to the basic financial statements are an integral part of this statement. -2-

PROGRAM REVENUES O- PE- RATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES)

REVENUES AND CHANGES

IN NET ASSETS

PRIMARY

COMPONENT

GOVERNMENT

UNITS

GOVERNMENTAL

CHARTER

ACTIVITIES

SCHOOLS

DEKALB COUNP/ BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30.2010

ASSETS
Cash and Cash Equ~valents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories
Total Assets

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salar~esand Benefits Payable Contracts Payable Retainages Payable Deposits and Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Continuation of Federal Programs Debt Service Capital Projects
Unreserved Undesignated Reported in: General Fund
Total Fund Balances

Total Liabilities and Fund Balances

DEBT SERVICE
FUND

TOTAL

The notes to the basic financial statements are an integral part of this statement.
- 4 -

DEKALB COUNTY BOARD OF EDUCATION RECONCILIATION OFTHE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30,2010
Total Fund Balances - Governmental Funds (Exhibit "C") Amounts reported for Governmental Actlv~t~eInsthe Statement of Net Assets are
d~fferenbt ecause: Capital Assets used in Governmental Actlvitles are not flnanclal resources and therefore are not reported In Me funds. These assets consist of: Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation Total Capital Assets Taxes that are not available to pay for current period expenditures are deferred in the funds. Long-Term Liab~l~t~Ienscl,uding Bonds Payable, are not due and payable in the current per~odand therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of: Bonds Payable Accrued Interest Capital Leases Payable Compensated Absences Payable Unamortized Bond Premiums Total Long-Term L~abilit~es
Net Assets of Governmental Activities (Exhibit "A")
The notes to the basic financial statements are an integral part of this statement.
- 5 -

DEKALB COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 3 0 . 2 0 1 0

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings M~scellaneous
Total Revenues
EXPENDITURES
Current instruct~on Support Serv~ces Pup11S e ~ l c e s Improvement of Instructlonal S e ~ l c e s Educational Medla SerVlCeS General Adm~nlstratlon School Adrn~n~stratlon Business Admlnlstratlon Maintenance and OperatlOn of Plant Student Transportatlon Servlces Central Support Servlces Other Support S e ~ l c e s Food Servlces Operation
Capltal Outlay Debt Servlces
Prlnclpal Dues and Fees Interest
Total Expendltures
Excess of Revenues over (under) Expendltures
OTHER FINANCINGSOURCES [USES)
Capltal Leases Transfers In Transfers Out
Total Other F~nanclngSources(Uses)
Net Change In Fund Balances
Fund Balances - Beginning (Restated)
Fund Balances Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

The notes to the baslc financial statements are an Integral part of thls statement. -6-

DEKALB COUNTY BOARD OF EDUCATION RECONCILIATION OFTHE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES. EXPENDITURESAND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 3 0 , 2 0 1 0
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However. in the Statement of Act~vitiest,he cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are: Capital Outlay Depreciation Expense Excess of Capital Outlay over Depreciation Expense
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
The net effect of various miscellaneous transactions involving capital assets (i.e.. sales, trade-ins, donations, and disposals) is to decrease net assets.
Some of the Capital Assets acqulred this year were financed wlth capital leases. In Governmental Funds, a capital lease arrangement is considered a source of financing, but in the Statement of Net Assets, the lease obligation is reported as a Long-Term Liablllty.
Repayment of Long-Term Debt IS reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of: Bond Principal Retirements Capital Lease Payments Amortization to Bond Premiums Total Long-Term Debt Repayments
Some items 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. These activities consist of: Net Decrease in Accrued Interest Net Decrease in Compensated Absences Total Additional Expenditures
Change in Net Assets of Governmental Activities (Exhibit "B")
The notes to the basic financial statements are an integral part of t h ~ statement.
- 7 -

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DEKALB COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30,2010
ASSETS Accounts Receivable, Net
Local
LIABILITIES Cash Overdraft Accounts Payable Funds Held for Others
Total Liabilities

EXHIBIT "G"
AGENCY FUNDS

The notes to the basic financial statements are an integral part of this statement. -9-

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY

REPORTING ENTITY

The DeKalb County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.

Discretely Presented Component Unit

Included within the School District are four Charter Schools. Each Charter School is responsible for the public education of all students attending its school. The Charter Schools were created through a contract between the School District and each Charter School whereby all State funding associated with the students attending the Charter Schools and certain specified local funds are remitted to the Charter Schools to cover their operations.

Because the major portion of the funding for the Charter Schools comes through the School System, the School System is considered financially accountable for the Charter Schools. The financial activities of the Charter Schools have been presented discretely because they provide services to third-parties outside the School System.

A listing of Charter Schools follows:

Academy of Lithonia, lncorporated 3235 Evans Mill Road Lithonia, Georgia 30058

Destiny Academy of Excellence, lncorporated 3595 Linecrest Road Ellenwood, Georgia 30294

DeKalb Academy of Technology and The Environment, Incorporated
1 8 3 3 Stone Mountain Lithonia Road Lithonia, Georgia 30058

International Community School, Incorporated 3260 Covington Highway Decatur, Georgia 30032

DeKalb PATH Academy, lncorporated 3007 Hermance Drive Clarkston, Georgia 3 0 0 2 1

The Gateway to College Academy (Charter School) is responsible for the public education of all students attending its school. The Charter School was created through a contract between the School District, Charter School, the Georgia Perimeter College whereby all State funding associated with the students attending the Charter School and certain specified local funds are turned over to the Charter School to cover the cost of its operations. Gateway to College Academy was included in the financial statements of Georgia Perimeter College.

The Academy of Lithonia's renewal was denied by the DeKalb County Board of Education; therefore the Charter School no longer exists. The balances reflected on the Combining Statement of Activities were not audited by us or other auditors.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the DeKalb County Board of Education.
District-wide Statements: The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements= The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds.
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources of the School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (property and sales) legally restricted for the payment of general long-term principal, interest and paying agent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various funds, governments or individuals.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
The State of Georgia reimburses the School District for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1- June 30) and paid over a twelve month contract period, generally September 1through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School District over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School District recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2010, the School District adopted the Governmental Accounting and Standards Board (GASB) Statement No. 51, Accounting and Reporting for Intangible Assea. The provisions of this Statement generally require retroactive reporting for intangible assets acquired after June 30, 1980, with the exception of those intangible assets that have indefinite useful lives and those that are considered internally generated.

DEKALB COUNW BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

In addition, the School District adopted GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. The provisions of this Statement impacts disclosure regarding derivative instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 3.
RESTATEMENT OF PRIOR YEAR NET ASSETS/FUND BALANCE
For fiscal year 2010, the School District changed the reporting method for Charter Schools from blended component units to discretely presented component units, which require the restatement of the June 30, 2010, net assets in Governmental Activities and fund balance in the governmental funds. The result is a decrease in Net Assets and Fund Balance at July 1,2009, of $1,871,051.00 and $1,107,478.00, respectively. These changes are in accordance with generally accepted accounting principles.
Governmental Activities: Net assets, July 1,2009, as previously reported Component units (Charter Schools) no longer recognized as blended component units
Net assets, July 1,2009, as restated
Discretely Presented Component Units: Net assets, July 1,2009, as previously reported Component units (Charter Schools)
Net assets, July 1,2009, as restated
Governmental Funds: Fund Balance, July 1,2009, as previously reported Component units (CharterSchools) no longer recognized as blended component units
Fund Balance, July 1,2009, as restated
CASH AND CASH EQUIVALENTS
Composition of Deposits Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
INVESTMENTS
Composition of Investments lnvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year and equity investments are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

(1) Obligations issued by the State of Georgia or by other states,

(2) Obligations issued by the United States government,

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances,

(6) The Georgia Fund 1administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchaseagreements, and

(8) Obligations of other political subdivisions of the State of Georgia.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.

RECEIVABLES

Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERN TAXES

The DeKalb County Board of Commissioners fixed the property tax levy for the 2009 tax digest year (calendar year) on June 23, 2009 (levy date). Taxes were due on November 15, 2009 (lien date) and could be paid in two installments on August 31, 2009, and November 15, 2009 (due dates). Taxes collected within the current fiscal year or within 6 0 days after year-end on the 2009 tax digest are reported as revenue in the governmental funds for fiscal year 2010. The DeKalb County Tax Commissioner bills and collects the property taxes for the School District, withholds 1.25% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2010, for maintenance and operations amounted to $463,372,151.66.

The tax millage rate levied for the 2009 tax year (calendar year) for the DeKalb County Board of Education was as follows (a mill equals $ 1 per thousand dollars of assessed value):

School Operations

22.98 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $96,012,033.31 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

INVENTORIES

Consumable Supplies On the basic financial statements, consumable supplies are reported at cost (first-in, first-out). The School District uses the consumption method to account for the consumable supplies inventory whereby an asset is recorded when supplies are purchased and expenses are recorded at the time the supplies are consumed.

Food Inventories On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (first-in, first-out). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposalsare deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year under review, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide

statements are as follows:

Capitalization

Estimated

Policy

Useful Life

Land

All

Land Improvements

$ 100,000.00

Buildings and Improvements

$ 100,000.00

lmprovements Other than Buildings $ 100.000.00

Equipment

Outdoor Equipment

Vehicles

Kitchen Equipment

Computers

Miscellaneous

Buses

Intangible Assets

N/A 2 0 to 4 0 years
5 0 years 5 0 years
15 to 2 0 years 8 years
15 years 5 years
7 to 2 0 years 5 years
15 to 2 0 years

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives, with the exception of intangible assets which are amortized.
Amortization of intangible assets such as water, timber, mineral rights, easements, patents, trademarks, copyrights and internally generated software is computed usingthe straight-line method over the estimated useful lives of the assets, generally 15 to 2 0 years.
COMPENSATED ABSENCES

Members of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual school districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements.
Vacation leave of 1 0 through 20 days is awarded on a fiscal year basis to all full time personnel employed on a twelve month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 3 0 days.

Beginning of Year Liability

Increases

Decreases

End of Year Liability

GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are reported as deferred charges and amortized over the term of the debt.
In the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. 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 debt service expenditures. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the Statement of Net Assets.
NET ASSETS
The School District's net assets in the District-wide Statements are classified as follows:
Invested in capital assets, net of related debt - This represents the School District's total investment
in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Restricted net assets - These represent resources for which the School District is legally or contractually obligated to spend resources for continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes, sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.
Note 3: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS
Official Code of Georgia Annotated (O.C.G.A.) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance.
Acceptable security for deposits consists of any one of or any combination of the following:
(1)Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) lnsurance on accounts provided by the Federal Deposit lnsurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30.2010

EXHIBIT "H"

CATEGORIZATION OF DEPOSITS

Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned t o it. At June 30, 2010, the bank balances were $227,027,401.94. The amounts exposed t o custodial credit risk are classified into three categories as follows:

Category 1Category 2 -
Category 3 -

Uncollateralized, Cash collateralized with securities held by the pledgingfinancial institution, or Cash collateralized with securities held by the pledging financial institution's trust department or agent but not in the School District's name.

The School District's deposits by custodial credit risk category at June 30, 2010, are as follows:

Custodial Credit Risk Category

Bank Balance

Total

CATEGORIZATION OF INVESTMENTS

The School District's investments as of June 30, 2010, are presented below. All investments are presented by investment type and debt securities are presented by maturity.

lnvestment Type

Fair Value

lnvestment Maturity Less than 1Year

Debt Securities Goldman Sachs Financial Square Treasury Obligation Fund FNMA Discount Notes Federal Home Loan Banks Discount Notes

$ 138,564,782.95 $ 138,564,782.95

31,790,592.00

31,790,592.00

6,128,793.00

6,128,793.00

lnvestment Pools Office of Treasury and Fiscal Services Georgia Fund 1

$ 176,484,167.95 $ 176,484,167.95

Total Investments

$ 199,494,662.57

The Georgia Fund 1,formerly referred to as LGIP, administered by the State of Georgia, Office of Treasury and Fiscal Services is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

of Treasury and Fiscal Services for the Georgia Fund 1(Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. information on the Georgia Fund 1is disclosed
in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the
Georgia Department of Audits and Accounts at htt~://www.audits.qa.c~ov/SGD/cafr.html.

The Primary Liquidity Portfolio consists of Georgia Fund 1which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1may not exceed 6 0 days. The weighted average maturity for Georgia Fund 1on June 30,2010, was 4 6 days.

lnterest Rate Risk lnterest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School District does not have a formal policy for managing interest rate risk.

Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managingcustodial credit risk.

At June 30, 2010, $176,484,167.95 of the School District's applicable investments were uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent, but not in the School District's name.

Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The School District does not have a formal policy for managing credit quality risk.

The investments subject to credit quality risk are reflected below:

Rated Debt Investments

Fair Value

AAAm

Quality Ratings A1

Unrated

Debt Securities Goldrnan Sachs Financial Square Treasury Obligation Fund FNMA Discount Notes Federal Home Loan Bank Discount Notes

$ 138,564,782.95 $ 138,564,782.95 31,790,592.00

$ 31,790,592.00

6.128.793.00

$ 6,128.793.00

Totals by Quality Ratings

Concentration of Credit Risk Concentration of credit risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. The School District does not have a formal policy for managing concentration of credit risk. More than 5% of the School District's investments are in Goldman Sachs Financial Square Treasury Obligation Fund and FNMA Discount Notes. These investments are 69% and 16%, respectively, of the School Districts total investments.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Note 4: NON-MONETARYTRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture (USDA)for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories

Note 5: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Governmental Actrv~ties Capital Assets, Not Being Depreciated:
Land Construction Work In Progress

Balances
July 1,2009
(Restated)

Increases

Decreases

$ 41,254,995.61

$

54,864,622.59$ 95,666,415.63$ 39,248,673.50

Balances June 30,2010
41,254,995.61 111,282,364.72

Total Capital Assets, Not Being Depreciated $ 96.119.618.20$ 95,666.415.63$ 39,248,673.50$ 152,537,360.33

Capital Assets, Being Depreciated: Buildings and Improvements Equipment Land Improvements

$ 1,272,496,817.99$ 93,875,736.67 30,255,401.25

56,687,052.87$ 8,065,094.51 2,050,230.22

13,941,30159$ 1,315,242,569.27

6,991,945.32 94,948,885.86

175,652.57

32,129,978.90

Less: Accumulated Depreciation: Build~ngsand Improvements Equipment Land Improvements

338,023,287.49 44,557,801.76
2,699,427.99

18,508,244.50 6,755,519.51
890,537.36

6,033,878.60 5,879,95L97
68,036.08

350,497,653.39 45,433,369.30
3,521,929.27

Total Capital Assets. Being Depreciated, Net $ 1,011,347,438.67$ 40,648,076.23$ 9,127,032.83$ 1,042,868,482.07

Governmental Activity Capital Assets - Net $ 1,107,467,056.8$7 136,314,491.86$ 48,375,706.33$ 1,195,405,842.40

Capital assets being acquired under capital leases as of June 30, 2010, are as follows:
Governmental Funds
Buildings and lmprovements Equipment Less: Accumulated Depreciation

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010
Current year depreciation expense by function is as follows:
Instruction Support Services
Improvement of Instructional Services Educational Media Services Business Administration Maintenance and Operation of Plant Student Transportation Services Food Services

EXHIBIT "H"

Note 6: INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2010, consisted of the following:

Transfer to

Tra nsfers From
District-wide Capital Projects

Debt Service Fund
Transfers are used to move SPLOST revenue collected in Capital Projects to Debt Service to fund the bond principal and interest payments.
Note 7: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.
The School District has obtained commercial insurance for risk of loss associated with torts, assets and acts of God. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.
The School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1,1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse), errors and omissions, crime and automobile risks. Payment of excess insurance for the system varies by line of coverage.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

The School District has established a limited risk management program for workers' compensation claims. The School District accounts for claims within the same fund that the employee's salaries and benefits are paid. An excess coverage insurance policy covers individual claims in excess of $500,000.00 loss per occurrence, up to $10,000,000.00.
Changes in the workers' compensation claims liability during the last two fiscal years are as follows:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenses/expenditures and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

Claims and

Beginning of Year

Changes in

Claims

End of Year

Liability

Estimates

Paid

Liability

The School District has purchased a surety bond to provide additional insurance coverage as follows:

Position Covered

Amount

All Employees

$ 1,000,000.00

Note 8: LONG-TERM DEBT
CAPITAL LEASES
The DeKalb County Board of Education entered into agreements dated September 1,2005, and March 1,2007, with the Georgia School Board Association for the construction and subsequent lease of purchase of land, buildings, and all furnishings and subsequent lease of one new elementary school facility. Under the terms of the agreement, the School District will make annual payments through December 1,2027.
The DeKalb County Board of Education also entered into an agreement dated December 1,2009, with the Bank of America for the purchase of textbooks over the next five years and subsequent lease of textbooks. Under the terms of the agreement, the School District will make annual payments through July 12,2017.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

The DeKalb County Board of Education also entered into various lease agreements for vehicles, solid waste system, copiers, and laptops. These lease agreements qualify as capital leases for accounting purposes, and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.
COMPENSATED ABSENCES
Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the General Fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences.
GENERAL OBLIGATION DEBT OUTSTANDING
General Obligation Bonds currently outstanding are as follows:

Purpose

lnterest Rates

Amount

General Government -Series 2007

The changes in Long-Term Debt during the fiscal year ended June 30,2010, were as follows:

Balance July 1,2009
(Restated)

Governmental Funds

Additions

Deductions

Balance June 30,2010

Due Within One Year

G. 0. Bonds Capital Leases Compensated Absences Bond Premiums Amortized

$ 300,000,000.00

$ 80,000,000.00 $ 220,000,000.00 $ 85,000,000.00

37,014,100.33 $ 42,820,000.00

3,273,562.29

76,560,538.04

3,394,240.72

12,644,615.89

7,601,727.92

7,764,149.27

12,482,194.54

7.000,000.00

8,861,560.98

2,215,390.02

6,646,170.96 2,215,390.20

At June 30, 2010, payments due by fiscal year which includes principal and interest for these items are as follows:

Capital Leases

Principal

Interest

Fiscal Year Ended June 30:

Total Principal and Interest

$ 76,560,538.04 $ 26,743,977.49

DEKALB COUNlY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

Fiscal Year Ended June 30:

General Obligation Debt

Principal

Interest

EXHIBIT "H"
Unamortized Bond Premium

Total Principal and Interest
Note 9: PRIOR YEAR DEFEASEMENT OF DEBT
In fiscal year 2003, the School District defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the School District's basic financial statements. At June 30, 2010, $7,345,000.00 of bonds are outstanding and are considered defeased.
Note 10: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $2,386,961.24 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $1,424,670.15
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $642,714.30
Office of Treasury and Fiscal Sewices Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $319,576.79
Note 11: SPECIAL ITEMS
During the fiscal year 2010, the School System disposed of certain land improvements, building and equipment related to Tucker High School. A net loss of $9,127,032.83 was realized from this disposal as a special item on the Statement of Activities.
Note 12: SIGNIFICANT COMMITMENTS
The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2010, together with funding available:

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

Proiect

Unearned Executed Contracts

ADA Group A2a

$

ADA Group A2b

Allgood Elementary School Roof Replacement

Cedar Grove High School HVAC

Champion Middle School Roof Replacement

Clarkston High School Renovation

Cross Keys High School Renovation

DeKalb High School of Tech South Roof Replacement

Druid Hills High School -Addition and Renovation
Dunwoody High School - Additions and Renovations

Eldridge Miller Elementary School Roof Replacement

Energy Management System Replacement

Emergency Generators

Fairington Elementary School HVAC Ceiling and Lighting

ADA Group B 1

ADA Group B2

Henderson Middle School Bathroom Renovation

Henderson Middle School Chalk Boards

Lakeside High School Natatorium

McLendon Elementary School HVAC and ADA

Midvale Elementary School HVAC, ADA, and Roof

Mountain Industrial Center

Plumbing Fixtures at Oak Grove and McLendon Elementary Schools

Redan High School Roof, HVAC, Career Tech and ADA

Redan High School Track Replacement

Sam Moss Center - HVAC and Roof

Sam Moss Center Flooring

Security System Upgrades

Sequoyah Middle School Roof

Sequoyah Middle School HVAC, Lighting and Roof

Snapfinger ElementarySchool HVAC, Ceiling, and Lighting

Stone Mountain High School Roof and HVAC

Stoneview ElementarySchool Kitchen Renovation

Towers High School Career Tech Add and Bus Loop

Tucker HS Replacement and HVAC

Vanderlyn ElementarySchool Roof, HVAC and ADA

EXHIBIT "H"
Funding Available From State

The amounts described in this note are not reflected in the basic financial statements.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Note 13: SIGNIFICANT CONTINGENT LIABILITIES
The School District (DCSD) is a defendant and counterclaim plaintiff in a lawsuit filed by Heery International, Inc., E. R. Mitchell & Co., and Heery/Mitchell, A Joint Venture in DeKalb County Superior Court on February 20, 2007. Heery/Mitchell alleges that DCSD breached its contract with Heery/Mitchell for construction program management services when DCSD terminated the Agreement and failed to remit payment to Heery/Mitchell for three outstanding pay applications. Heery/Mitchell claims that it has incurred over $ 1 million in lost profits and other consequential damages as a result of DCSD's alleged breach. Heery/Mitchell also seeks to recover litigation expense, including attorney's fees, from DCSD, pursuant to O.C.G.A. 913-6-11. DCSD is contesting the case vigorously.
On March 23, 2007, DCSD filed an Answer and Counterclaims in response to Heery/Mitchellts Complaint. In addition to answering Heery/Mitchellts allegations, DCSD filed counterclaims against Heery/Mitchell for (1) fraud, (2) breach of fiduciary duty, and (3) breach of contract. In addition, DCSD alleges that Heery/Mitchell failed to satisfy a number of their contractual obligations relating to, among other things, record maintenance and retention, project supervision and coordination, and reportingto DCSD.
Although both the results and cost of litigation are uncertain, DCSD strongly believes that Heery/Mitchellfs claims are totally without merit and will ultimately be unsuccessful. On the other hand, DCSD believes, based on the available evidence, that its counterclaims against Heery/Mitchell are strong and that the DCSD will achieve a substantial recovery against Heery/Mitchell.
The School District believes the likelihood of a material adverse outcome is unknown at this time. Accordingly, adjustments, if any that might result from the resolution of this matter have not been reflected in the basic financial statements.
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine School District operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the basic financial statements.
Note 14: RELATED PARTYTRANSACTIONS
The School District employed the services of Vincent Pope and Associates, Inc. for various construction projects. This company is owned and operated by Vincent Pope, the husband of Patricia Pope, who was the Chief Operations Officer (COO) for the DeKalb County Board of Education as of June 30,2010. As of July 1,2010, Mrs. Pope was no longer employed by DeKalb County Board of Education. While some of these services were secured by a bid procedure, all were not. Additionally, the contracts were signed prior to Mrs. Pope becoming the Schools District's COO. Current year expenditures to Vincent Pope and Associates, Inc. totaled $15,221.32.
In addition, Vincent Pope and Associates, Inc. was a subcontractor with the Nix-Fowler Construction Company for one construction contract.
Note 15: SUBSEQUENT EVENTS
In subsequent fiscal year, voters authorized the School District to issue two certificates of participation in the amount of $57,770,000.00 and $5,690,000.00. The proceeds from these certificates of participation will be used to finance the acquisition, construction and equipping of a replacement high school in the School District.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Note 16: POST-EMPLOYMENT BENEFITS

GEORGIA SCHOOL PERSONNEL EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description. The Georgia School Personnel Post-Employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Insurance Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).

Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30,2010:
For certificated teachers, librarians and regional educational service agencies:

July 2 0 0 9 August 2 0 0 9 -October 2 0 0 9 November 2009 -June 2 0 1 0

18.534% of covered payroll for August Coverage
14.492% of covered payroll for September - November Coverage
18.534% of covered payroll for December - July Coverage

For non-certificated school personnel:

July 2 0 0 9 -June 2 0 1 0

$162.72 per member per month plus Department of Education contribution of $22,838,311.00

No additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation.
The School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows:

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

Fiscal Year

Percentage Contributed

Required Contribution

EXHIBIT "H"

Note 17: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description. The TRS is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
On October 25, 1996, the Board created the Supplemental Retirement Benefits Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRC Section 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 1 0 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lump-sum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.
Funding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 1 0 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010, were 5.25% of annual salary. The member contribution rate will increase to 5.53% effective July 1,2010. Employer contributions required for fiscal year 2010 were 9.74% of annual salary as required by the June 30, 2007, actuarial valuation. The employer contribution rate will increase to 10.28% effective July 1,2010.

DEKALB COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2010

EXHIBIT "H"

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

(This page left intentionally blank)

DEKALB COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES BUDGET TO ACTUAL
YEAR ENDED JUNE30.2010

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for S e ~ l c e s Investment Earnlngs Miscellaneous
Total Revenues
EXPENDITURES
Current lnstruct~on Support Serv~ces Pup11Services Improvement of lnstruct~onaSl ervices Educational Media Servlces General Administration School Administration Buslness Administration Maintenance and Operation of Plant Student Transportation Servlces Central Support Servlces Other Support Services Enterprise Operat~ons Food Services Operation
Debt Service
Total Expenditures
Excess of Revenues over (under) Expend~tures
OTHER FINANCING SOURCES (USES1
Other Sources Other Uses
Total Other Financing Sources (Uses)
Net Change In Fund Balances
Fund Balances - Beanning
Fund Balances - End~ng

NONAPPRDPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

$ 985,938,930.00 $ 1,087,234.786.00 $ 1,004,044,489.70

$

45,342,307.00 $

-45,342.307.00 $

$

954,711.00 $

-20.510.867.00 $

34,157,705.00

4.467.577.40

23,460,000.00 17,195.902.79
6,112,907.51

$

35,112,416.00 $

-16,043,289.60 $

23,308,810.30

No& U h e Schedule of Revenues. Exeendltvres and C h a n ~ sin Fun&Ealances Budget and Actual (1) Or~g~nBaul dget amounts do not Include budgeted revenues or expendltures of the varlous pr~nc~paaclcounts
or revenuesor expendltures for health Insurance and retirement contr~but~onpsa ~ don the School District's behalf. The accompanying schedule of revenues, expendltures and changes In fund balances budget and actual is presented on the modified accrual basis of accounting which IS the basis of accounting used in the presentation of the fund financial statements.
See notes to the basic financial statements.

DEKALB COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF NET ASSETS CHARTER SCHOOL COMPONENT UNITS
JUNE 30,2010
ASSETS Cash and Cash Equ~valents Investments Accounts Receivable, Net
Other Prepaid Items Other Current Assets Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
LIABILITIES Accounts Payable Lon&Term Liabilities
Due Within One Year Due in More Than One Year
Total L~abilities NET ASSETS Invested in Capital Assets, Net of Related Debt Unrestricted Total Net Assets
Total Llabillties and Net Assets

Academy of Lithonia

DeKalb Academy of Technology and the Environment

The notes to the basic financial Statementsare an integral part of this statement. -32-

SCHEDULE "2"

DeKalb PATH Academy

Destiny Academy of Excellence

International Community
School

Total

DEKALB COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF ACTIVITIES CHARTER SCHOOL COMPONENT UNITS FOR THE YEAR ENDEDJUNE 30,2010

EXPENSES
REVENUES Program Revenues: Charges for Services Operat~ngGrants and Contributions Total Program Revenues
Net (Expenses) Revenues General Revenues
Investment Earnings Miscellaneous
Total General Revenues Change in Net Assets
Net Assets - Beginningof Yea1
Net Assets - End of Year

Academy of Lithonia

DeKalb Academy of Technology and the Environment

The notes to the basic financial statements are an integral part of this statement. - 34 -

SCHEDULE "3"

DeKalb PATH Academy

Dest~ny Academy of Excellence

International Community
School

Total

DEKALB COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURESOF FEDERALAWARDS
YEAR ENDEDJUNE 30,2010

SCHEDULE "4"

FUNDING AGENCY PROGRAMARANT
Agrlculture, U. S. Department of Child Nutrition Cluster Pass-ThroughFrom Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-ThroughFrom Bright From the Start: Georg~aDepartment of Early Care and Learn~ng Child and Adult Care Food Program
Total U. S. Department of Agrlculture
Corporat~onfor Nat~onaal nd Commun~tySewlce Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs
Educatlon. U. S. Department of Education of Homeless Children and Youth Cluster Pass-Through From Georgia Department of Educat~on ARRA - Education for Homeless Children and Youth Educatlon for Homeless Chlldren and Youth
Total Education of Homeless Chlldren and Youth Cluster
Education Technology State Grants Cluster Pass-Through From Georg~aDepartment of Educat~on Education Technology State Grants
Special Educat~onCluster Pass-ThroughFrom Georgia Department of Education Spec~aEl ducation
ARRA - Grants to States
Grants to States Preschool Grants
Total Soecial Education Cluster
State F~scaSl tablllzation Fund Cluster Pass-Through From Georgia Department of Educat~on
ARRA - Education State Grants
Title I, PartA Cluster PassThrough From Georg~aDepartment of Educat~on ARRA - T~tleI Grants to Local Educational Agencies T~tleI Grants to Local Educational Agencies
Total Title I. Part A Cluster
Other Programs D~rect Fund for the Improvement of Educat~on Trans~t~oton Teachlng Pass-Through From Georga Department of Educat~on
Career and Technical Educat~on- Bas~cGrants to States
Charter Schools English LanguageAcqu~s~tioGnrants lmprovlngTeacher Quallty State Grants Mathematics and Sclence Partnerships Read~ngFlrst State Grants Safe and DrukFree Schools and Communltles State Grants Spec~alEducat~on
State Personnel Development

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

DEKALB COUNlY BOARD OF EDUCATION SCHEDULE OF EXPENDITURESOF FEDERALAWARDS
YEAR ENDED JUNE30,2010

SCHEDULE "4"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Other Programs Pass~ThroughFrom Georgia Institute of Technology College Access Challenge Grant Program Pass-ThroughFrom Georgia State University Teacher Qual~tyPartnersh~pGrants T r a n s ~ t ~ ot on T e a c h ~ n g
Total Other Programs
Total U. S. Department of Educat~on
Health and Human Serv~ces,U. S. Department of Child Care and Development Fund Cluster Pass-ThroughFrom Br~ghFt rom the Start: Georsa Department of Early Care and Learning ARRA - Child Care and Development Block Grant
Other Programs Pass-ThroughFrom Georgia Department of Human Resources Refugee and Entrant Assistance - Discretionary Grants Block Granw for Prevention and Treatment of Substance Abuse
Total Other Programs
Total U. S. Deoanment of Health and Human Setvices
Jusuce. U. S. Department of Dlrect Edward Byrne Memorial Justice Ass~stanceGrant Program
Energy. U. S. Department of D~rect National Aeronautics and Space Admlnlstrat~on Aerospace Education S e ~ l c e sProgram
Defense. U. S. Department of Dlrect Department of the Air Force R.O.T.C. Program Department of the Army R.O.T.C. Program Department of the Navy R.O.T.C. Program
Total U. S. Department of Defense

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

Total Federal Financial Assistance
N/A = Not Available
Notes to theSchedule of Exeend~turesof Federal Awards
(1) Includes the Federallyasslgned value of donated commod~t~efosr the Food Donat~onProgram In the amount of $4,900,929.25.
(2) Expenditures for the funds earned on the School Breakfast Program ($7,816.371.8w8e)re not malnta~nedseparately and are Included In the 2010 National School Lunch Program
Major Programsare Identified by an asterisk (*)in front of the CFDA number.
The School Distrlct d ~ ndot provlde Federal As~~stanctoeany Subrecipient
The accompanyingschedule of expenditures of Federal awards includes the Federal grant activity of the DeKalb County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.
See notes t o the basic flnanclal statements.

DEK4LB COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDEDJUNE 30,2010

SCHEDULE "5"

GRANTS Brtght From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program
Upper ElementaryGrades - Early lnte~ention(4-5) Program
Mlddle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities
category I Category II Category Ill Category IV Category V
Gifted Student - Category Vl
Remedial Education Program Alternative Education Program Englrsh Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and ProfesstonalDevelopment Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportatton Regular Nursing Services Vocat~onaSl upervisors Mid-term Adjustment Hold-Harmless Food Services Vocat~onalEducation Amended Formula Adjustment Amended Formula Adjustment ARRA Accrual Other State Programs
Charter Schools - State Planning Grant
Dual Enrollment Funding Georgia Special Needs Health Insurance High Schools That Work National Teacher Certification Preschool Handicapped Program Residenttal Treatment Centers Grant Rule 1 0 Special Education State Grant Severely Emotionally Disturbed Teachers' Retirement Virtual Schools Grant Vocational Construction Related Equipment - State Bonds

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

DEKALB COUNN BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,2010

SCHEDULE "5"

GRANTS Georaa State Financing and Investment Commission Reimbursement on Construction Projects
Governor's Office for Children and Families Children and Youth Coordlnatlon Councll Empowered Youth Excel
Governor's Office of Highway Safety Students Against Drunk Driving
Office of Treasury and Fiscal Services Public School Employees Ret~rement
OTHER Community Affairs, Georgia Department of Local Assistance Grant

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

See notes to the basic financial statements.

DEKALB COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30.2010

SCHEDULE "6"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT EST1MATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED IN PRIOR YURS (3)

PROJECT STATUS

Property acqulsltlon, construction and

equlppinga mlnlmum of e~gh(t8) new schools

and two (2) new centers, renovatlons,

modlflcatlons, add~t~onasnd eq~lpmenftor

existlng schools: acqulsltlon and ~nstallatlonof

lnformat~onsystems hardware and

infrastructure at all schools and selected other

facil~besp, urchaseof both new school buses

and school buses currently under lease.

$

524,404,330.00 $

538.649.066.80 $

8,297,484.59 $ 496,068,666.32

Ongolng

Property acquisltlon, renovations and expansion, construction and equipping roofing, site improvements of new and existing schools; acquisition of buses, technologymedia center upgrades. HVAC systems, roofing, school improvement projects throughout the distr~ct,technology add~tlons, renovatlonsand upgrades,transportation improvementsand site acquisitions; paying cap~tallzedInterest on General Obl~gation Bonds.

609,460,500.00

609.460.500.00

137.633.780.61

127.335.503.72 Ongoing

(1) The School District's orlglnal cost estimate as specifled In the resolution call~ngforthe lmposltion of the Local Option Sales Tax.
(2) The School District's current estlmate of total cost for the projects. Includesall cost from project lnceptlon to completion.
(3) The voters of DeKalb County approved the imposition of a 1%sales tax to fund the above projects and retlre associateddebt. Amounts expended for these projectsmay ~ncludesales tax proceeds, state, local property taxes and/or other funds over the llfe of the projects.

See notes to the basic flnanclal statements.

DEKALB COUNlY BOARD OF EDUCATION
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES- BY PROGRAM YEAR ENDED JUNE 30.2010

SCHEDULE "7"

DESCRIPTION
D~recltnstruct~onaPl rograms K~ndergartenProgram Kindergarten Program-Early lnte~entlonProgram Prlmary Grades (1-3) Program Pr~maryGrades-Early lntewentlon (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early lntewentlon (4-5) Program Mlddle Grades ( 6 8 ) Program Mlddle School (6-8) Program High School General Educatlon (9-12) Program Vocational Laboratory (9-12) Program Students w ~ t hDlsabrlrtres Category I Category II Category 111 Category IV Category V Gifted Student - Category VI Remedlal Educatlon Program Alternative Educatlon Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and Professional Development
TOTAL QBE FORMULA FUNDS

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION(1)(2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

(1) Compr~sedof State Funds plus Local Flve M ~ lSl hare. (2) Allotments do not Include the Impact of the State amended formula adjustment.

See notes to the baslcflnancial statements.

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-1 56 Atlanta, Georgia 30334-8400
July 27, 2011

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Interim Superintendent and Members of the DeKalb County Board of Education
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAlTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of DeKalb County Board of Education as of and for the year ended June 30, 2010, which collectively comprise DeKalb County Board of Education's basic financial statements and have issued our report thereon dated July 27, 2011. Our report was modified to include a reference to other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States. Other auditors audited the financial statements of the School System's discretely presented component units (Charter Schools), which include: DeKalb Academy of Technology and the Environment; DeKalb PATH Academy; Destiny Academy of Excellence and the International Community School, as described in our report on DeKalb County Board of Education's financial statements. This report does not include the results of other auditors' testing of internal control over financial reporting or compliance and other matters that are reported on separately by those auditors. The financial statements of the DeKalb Academy of Technology and the Environment, DeKalb PATH Academy and the International Community School (Charter Schools) were not audited in accordance with GovernmentAuditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered DeKalb County Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressingan opinion on the effectiveness of the DeKalb County Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the DeKalb County Board of Education's internal control over financial reporting.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
Comeliance and Other Matters
As part of obtaining reasonable assurance about whether DeKalb County Board of Education's financial statements are free of 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 determination of financial statement amounts. 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,
We noted certain matters that we have reported to management of DeKalb County Board of Education in a separate letter dated July 27, 2011.
This report is intended solely for the information and use of the audit committee, management, members of the DeKalb County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~ d s e lWl . Hinton, CPA, CGFM State Auditor

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
July 27, 2 0 1 1

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Interim Superintendent and Members of the DeKalb County Board of Education
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REOUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133
Ladies and Gentlemen:

We have audited DeKalb County Board of Education's compliance with the types of compliance requirements described in the OM5 Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. DeKalb County Board of Education's major Federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major Federal programs is the responsibility of DeKalb County Board of Education's management. Our responsibility is to express an opinion on DeKalb County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audi& of States, focal Governmen&, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the DeKalb County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on DeKalb County Board of Education's compliance with those requirements.
In our opinion, the DeKalb County Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programsfor the year ended June 30,2010.

Internal Control Over Com~liance

Management of DeKalb County Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered DeKalb County Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the DeKalb County Board of Education's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a Federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. as defined above.

This report is intended solely for the information and use of the audit committee, management, members of the DeKalb County Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone

other than these specified parties.

Res~ectfullvsubmitted,

.

Russell W. Hinton, CPA, CGFM State Auditor

SECTION Ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

DEKALB COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONEDCOSTS YEAR ENDED JUNE 30,2010

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6441-09-01

Partially Resolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

ACCOUNTING CONTROLS (OVERALL) Inadequate lnternal Controls over Construction Projects Finding Control Number: FS-6441-09-01

The DeKalb County School District has taken significant measures to provide an organizational structure that supports effective internal controls over financial reporting. The Director of lnternal Audits has been hired and has a reporting structure to the Board of Education and the Superintendent. The purchasing policy has been revised and augmented to include specific guidelines for capital projects procurement and specific guidelines for purchasing ethics. Further, the DeKalb County School District has revised Board policies concerning Employee Code of Ethics, Board member Code of Ethics, and Staff Conflict of Interest. The DeKalb County School District has also adopted a Whistleblower policy and is in the process of reviewing every Board of Education policy.

The DeKalb County School District will continue to monitor and implement new internal controls as the need arises. The measures already implemented will service to mitigate or completely eliminate the factors that caused this finding.

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

No matters were reported.

SECTION IV FINDINGS AND QUESTIONED COSTS

DEKALB COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGSAND QUESTIONEDCOSTS
YEAR ENDED JUNE 30,2010

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements

Type of auditor's report issue: Governmental Activities; Aggregate Discretely Presented Component Units; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information

lnternal control over financial reporting: Material weakness identified? Significant deficiency identified?

Noncompliance material to financial statements noted:

Federal Awards

Internal Control over major programs: Material weakness identified? Significant deficiency identified?

Type of auditor's report issued on compliance for major programs: All major programs

Any audit findings disclosed that are required to be reported in accordance with OMB Circular A-133, Section 510(a)?

Identification of major programs:

CFDA Number(s1

Name of Federal Program or Cluster

Title I, Part A Cluster Special Education Cluster State Fiscal Stabilization Fund Cluster

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

Auditee qualified as low-risk auditee?

I1 FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

No matters were reported.

Ill FEDERALAWARD FINDINGS AND QUESTIONEDCOSTS

No matters were reported.

Unqualified N 0
None Reported
N 0 None Reported
Unqualified