FY2011 COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2011 Atlanta Independent School System Atlanta, Georgia ATLANTA INDEPENDENT SCHOOL SYSTEM COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2011 Office of the Chief Financial Officer Charles A. Burbridge 130 Trinity Avenue, SW Atlanta, Georgia 30303 ATLANTA INDEPENDENT SCHOOL SYSTEM Comprehensive Annual Financial Report Table of Contents Fiscal Year ended June 30, 2011 Page INTRODUCTORY SECTION Letter of Transmittal i GFOA Certificate of Achievement vi ASBO International Certificate of Excellence vii List of Principal Officials viii Appointed Officials xi Organization Chart xii FINANCIAL SECTION Report of Independent Certified Public Accountants 1 Management's Discussion and Analysis 3 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets 15 Statement of Activities 16 Fund Financial Statements: Balance Sheet Governmental Funds 17 Reconciliation of Governmental Funds Balance Sheet to the Government-wide Statement of Net Assets 18 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds 19 Reconciliation of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-wide Statement of Activities 20 Statement of Net Assets Proprietary Fund Food Services 21 ATLANTA INDEPENDENT SCHOOL SYSTEM Comprehensive Annual Financial Report Table of Contents Fiscal Year ended June 30, 2011 Statement of Revenues, Expenses and Changes in Net Assets Proprietary Fund Food Services 22 Statement of Cash Flows Proprietary Fund Food Services 23 Statement of Fiduciary Assets and Liabilities 24 Notes to the Basic Financial Statements 25 Required Supplementary Information: Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual General Fund 51 Schedule of Funding Progress 52 OTHER SUPPLEMENTARY INFORMATION Non-Major Governmental Funds: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet Non-major Governmental Funds 53 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Governmental Funds 54 Combining Schedule of Revenues, Expenditures and Changes in 55 Fund Balance Budget and Actual All Special Revenue Funds Combined Schedule of Revenues, Expenditures and Changes in 56 Fund Balance Budget and Actual Title I Special Revenue Fund Schedule of Revenues, Expenditures and Changes in 57 Fund Balance Budget and Actual Title II Fund ATLANTA INDEPENDENT SCHOOL SYSTEM Comprehensive Annual Financial Report Table of Contents Fiscal Year ended June 30, 2011 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Title IV-B Fund 58 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Lottery Fund 59 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Other Federal Programs Fund 60 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Other Special Projects Fund 61 Schedule of Revenues, Expenditures and Changes in Fund Balance Budget and Actual Capital Projects Fund 62 Combining Statement of Changes in Assets and Liabilities - Agency Fund 63 Quality Basic Education Programs - Program Expenditures 64 General Fund Quality Basic Education Programs - Schedule of Allotments and Expenditures by Program 65 Schedule of Expenditures by Object - Lottery Programs 66 Schedule of Approved Local Option Sales Tax Projects 67 Schedule of State Revenue 68 STATISTICAL SECTION (UNAUDITED) Net Assets by Component 69 Changes in Net Assets 70 Governmental Fund Balances 72 Changes in Governmental Fund Balances 73 ATLANTA INDEPENDENT SCHOOL SYSTEM Comprehensive Annual Financial Report Table of Contents Fiscal Year ended June 30, 2011 General Fund Expenditures by Function 75 General Fund Revenues by Source 76 Assessed and Estimated Actual Value of Taxable Property 77 Property Tax Rates All Overlapping Governments 78 Principal Property Taxpayers 79 Property Tax Levies and Collections 80 Comparison of Property Tax Millage Rates 81 Tax Millage Rates 82 Ratio of Total Debt Outstanding by Type 83 School Buildings, Acreage and Capacity 84 Demographic Statistics 86 Principal Employers 87 General Fund per Pupil Cost 88 School Breakfast Program 89 School Lunch Program 90 Number of Schools 91 Enrollment by Grade Level 92 Employees by Function 93 INTRODUCTORY SECTION December 15, 2011 Dear Citizens: We are pleased to present to the community the Comprehensive Annual Financial Report (CAFR) of Atlanta Public Schools (APS) for the fiscal year ended June 30, 2011. APS continues its transition under new leadership after 12 years of continuous improvement on many fronts. Our priority remains to provide quality instruction in a safe and nurturing learning environment that educates today's children for tomorrow's world. This report was prepared by APS financial management officials and is intended to fulfill the requirement for audit prescribed by Georgia Statutes for local boards of education. The APS management assumes full responsibility for the completeness and reliability of the information contained in this report, based on a comprehensive and reliability of the information contained in this report, based on a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Snapshot of Atlanta Public Schools Like many urban, public K12 school districts, APS faces ongoing challenges. More than threefourths of APS students qualify for the federal free and reduced price meals program, which is based on family incomes at or below the poverty line. Nearly one-third of APS students relocate within and outside of the district during the school year. Recent allegations of cheating on state standardized tests and subsequent investigations have challenged APS to continue its education mission undistracted, even while new leaders take the helm to navigate the district through a perfect storm of events. Despite these issues, APS continues its journey to excellence. APS is currently composed of 96 schools: 55 elementary schools (grades K-5), 16 middle schools (grades 6-8) and 25 high schools (grades 9-12), for a total enrollment of approximately 49,874. APS Highlights and Points of Pride Twenty-one APS students were awarded 2011 Gates Millennium Scholarships this year the second highest number of any school district in the nation. APS students have earned approximately 70 Gates Millennium Scholarships over the past three years, more than any other system in the nation. i APS students improved their performance by 4 percentage points and eliminated the achievement gap between the district and students around the state on the new Georgia Grade 8 Writing Assessment in 2011. Eighty-three percent of APS eighth-grade students scored at "meets" or "exceeds" standards levels. APS students improved their performance on the 2011 Criterion-Referenced Competency Tests, showing gains in 20 of the 30 grade and subject areas tested compared to last year's results. APS students had performance gains exceeding state averages in 15 of the 30 grades and subject areas tested and continued to narrow the achievement gap with state averages. APS students improved their performance on the 2011 Georgia Grade 5 Writing Assessment, with 77 percent scoring at the "meets" or "exceeds" standards levels. This performance represents a 5 percentage point increase over last year's results. APS has developed more than 400 partnerships between schools and community/business organizations which provide students with invaluable resources, such as internships, attendance incentives, mentoring and tutoring opportunities. APS is working with the Georgia Institute of Technology and Ford Motor Company to develop a prototype high-tech, fuel-efficient hydraulic hybrid propulsion system that employs used vegetable and cooking oils as a renewable energy source. APS donated a surplus school bus for the "Green Eco School Bus" project. Major renovations to existing schools were completed this year, including North Atlanta (08/01/2011) and D.M. Therrell (08/07/2011) high schools and Continental Colony Elementary School (07/01/2011). Construction of the new Mays High School is scheduled for completion by the end of the current calendar year. For more information on school buildings, acreage and capacity please see pages 84-85 in the Statistical section. Challenges Ahead The challenges that lie ahead are considerable but manageable, as the District fully transitions into the new decade: The special state investigation into conduct during the 2009 CRCT exam revealed widespread testing improprieties associated with a relatively small number of APS educators. Individuals named in the state report have been removed from classrooms, pending the outcome of the follow-up investigations and processes being conducted by various organizations. Ramifications from testing improprieties continue to unfold, as the state recently announced its decision to adjust schools' adequate yearly progress (AYP) ratings for previous years. As a result, the state has determined that 42 schools have not met AYP for at least two consecutive years, which places the schools in needs-improvement status under the federal No Child Left Behind Act. ii APS has enacted a number of improvements to tighten the testing environment and reduce the potential for cheating or testing improprieties. These enhancements include locked safe rooms for testing material that are accessible only by principals and test coordinators, sealed envelopes with tamper-proof security strips where testing materials are stored, and implementation of the two-person rule for counting and tracking testing materials. The District has embarked on a comprehensive culture change that involves mandatory annual ethics training for all employees and revised performance evaluation reviews that emphasize strict adherence to policies and laws. The main focus is the continued growth of students' academic performance. The District's new leadership is assessing the results of school reform programs implemented over the past decade and determining how to move forward in the ongoing effort to continue the academic progress in a safe, secure and nurturing learning environment. Local Economy The nationwide economic downturn continues to negatively impact the District's primary funding sources. The District's main source of funding is property taxes, which continues to show the effects of a flat economy. Actual property tax revenues fell short of the budget projection and are well below actual revenues in previous years. The second major revenue stream for the District is state funding through the Quality Basic Education Act funding. The Governor continues to make major cuts to this revenue stream, exceeding $20 million for FY11. Based on these factors and others, including increased unfunded mandates and tax revenue challenges, there will be continuing financial challenges in FY12 and beyond. Long-Term Financial Planning APS plans capital improvements as future capital needs arise due to student population changes and facility repair and maintenance needs. Specific capital expenditure plans are formalized in conjunction with special-purpose, local-option sales tax receipts and anticipated annual receipts of capital outlay funds from the Georgia Department of Education. The District regularly monitors anticipated capital outlay needs. Strategic Planning APS leaders are committed to using strategy to drive budgets. Budget recommendations align with the district's strategic objectives. The charge is for every division, department, office and employee to align with the district's goals in support of student achievement. Employees evaluate and execute their work based on its support of schools and students. Financial Information The CAFR is prepared pursuant to OCGA 36-81-7. The Georgia Department of Audits and Accounts has issued an unqualified ("clean") opinion on the financial statements for fiscal iii year ended June 30, 2011. The independent auditor's report is located at the front of the financial section of this report. Using the full accrual basis of accounting, APS has total net assets of $1.37 billion, an increase of $68.55 million from fiscal year 2010. Further discussion is included in Management's Discussion and Analysis (MD&A) which immediately follows the independent auditor's report and provides an overview and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it. Fund Accounting: APS reports its financial activities through the use of fund accounting. This is a system wherein transactions are reported in self-balancing sets of accounts to reflect the results of activities. See Note A of the Notes to the Basic Financial Statements for a summary of significant accounting policies and a description of the fund types. Internal Control Structure: APS financial management officials are responsible for implementing and enforcing a system of internal controls to protect the assets of APS from loss, theft or misuse and to ensure that reliable accounting data are available for the timely preparation of financial statements in accordance with Generally Accepted Accounting Procedures (GAAP). The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of control should not exceed the benefits likely to be derived and that the evaluation of costs and benefits relies upon estimates and judgments by management. Financial Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to APS for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2010. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. APS received the Association of School Business Officials (ASBO) International's Certificate of Excellence in Financial Reporting for the CAFR for fiscal year 2010. This is the second year the District submitted the CAFR to ASBO. This award certifies that the report substantially conforms to the principles and standards of financial reporting as recommended and adopted by the Association of School Business Officials International. Valid for a period of one year, the award is granted only after an intensive review of financial reports by an expert panel of certified public accountants and practicing school business officials. iv vi vii ATLANTA INDEPENDENT SCHOOL SYSTEM List of Principal Officials June 30, 2011 SCHOOL SYSTEM BOARD MEMBERS District 1: Brenda J. Muhammad, Chair Brenda Muhammad is the executive director of the Atlanta Victim Assistance, Inc. (AVA), an organization that advocates for the fundamental rights of victims and witnesses of crime with compassion, dignity and respect. AVA provides comprehensive services which remove barriers, strengthen victims and their families and foster a healthy transition from victim to survivor. Passionate about children and their educational needs, particularly those who are underserved, Brenda currently serves as the School Board Representative for District 1. She has also served the Atlanta School Board in times past as president and vice president. At-Large Seat 8: Reuben R. McDaniel, III, Vice Chair In May 1999, Reuben R. McDaniel, III was named President/CEO of Jackson Securities, LLC an Atlanta based investment banking firm. With over 25 years of investment banking experience in finance management, capital markets and municipal finance, McDaniel relies on his proven financial insights, exceptional talents in building relationships, strong analytical background and consummate corporate management skills. Selected as one of Black Enterprises' "75 Most Powerful Blacks on Wall Street", Mr. McDaniel was responsible for transforming the firm from a regional public finance boutique into a national institutional investment bank. Under his leadership, Jackson Securities has sustained doubledigit revenue growth and diversified revenue streams by establishing a Corporate Finance Group, Wealth Management Group and an Institutional Sales & Trading Group. District 2: Vacant viii District 3: Cecily Harsch-Kinnane Cecily Harsch-Kinnane has been involved in Atlanta Public Schools for nine years. She and her husband, Paul, have three children in APS and she has served as PTA president at Morningside E.S., on the PTA boards at Inman M.S. and Grady H.S., as co-president of the Council of Intown Neighborhoods and Schools and on the principal selection committee at several schools. She has been involved with Habitat for Humanity, served on the City of Atlanta Elected Officials Compensation Commission and on the board of the Atlanta Youth Soccer Association. Ms.Harsch-Kinnane is a former middle and high school math teacher and has recently been the coordinator of an after school-mentoring program. She is a native of Atlanta and received a BA in Mathematics from Brown University and has done graduate work in Math Education and Educational Psychology at Georgia State University. District 4: Nancy M. Meister As a parent and stakeholder, Nancy Meister is passionate about the future of the Atlanta Public Schools and has been personally involved in the district for many years and recognizes the importance of public education. She and her husband have watched their children grow and thrive in the Atlanta Public Schools system. As a residential real estate agent, she understands and appreciates the importance of great neighborhood schools, their impact on attracting new businesses to our city and their contribution to the overall sustainable growth of the metro area. District 5: LaChandra Butler Burks Born and raised in Atlanta, Georgia, LaChandra Butler Burks' passion for children and commitment to education has been evident all of her life. As a product of Atlanta Public Schools, she considers it an honor to now serve as a member of the Atlanta Board of Education because it allows her to fight daily to have quality, public education for the children of a city she dearly loves. It is her strong belief that everyone must be involved in making sure that children are whole and well. On November 8, 2005, the residents of Atlanta elected LaChandra Butler Burks out of six candidates with 58% of the votes as the Atlanta Board of Education District 5 Representative. She is a graduate of L.P. Miles Elementary School and C.L. Harper High School with a Bachelor's Degree from State University of West Georgia, (formerly West Georgia College) and a Masters of Business Administration from Keller Graduate School of Management. LaChandra Butler Burks received most of her political experience from having worked under the leadership of three Atlanta mayors for 13 years. ix District 6: Yolanda K. Johnson Yolanda Johnson is a proud resident of the Adams Park Community of Southwest Atlanta. She is a product of public schools and a practicing attorney who has been actively engaged in the community since she made Atlanta her home more than a decade ago. She began volunteering with the Atlanta Public Schools (APS) when she agreed to serve on a committee redeveloping the curriculum for the Law and Government Magnet at Therrell High School. This experience gave her unique system insight and firsthand knowledge of how even a small group of dedicated people can make differences in the lives of our children: our future. At-Large Seat 7: Courtney D. English Courtney English is a former Atlanta Public Schools middle school teacher and community activist. Born and raised in Atlanta, he is a proud graduate of Morehouse College. English was a founding teacher at the new All-Male BEST Academy at Benjamin Carson where he taught seventh grade Social Studies. Ironically, English's lessons were delivered in the same room where he learned the subject content as a student. English is a member of the 2007 Atlanta Corps of Teach for America and now direct his efforts toward enhancing the quality of education for students. As a teacher, English designed and implemented a unique curriculum to teach "Applied Social Studies", in which students learn the subject through the lens of all academic disciplines. His talents as an educator have been reinforced by his success rate in the classroom. Eighty percent of his students have met learning objectives with at least 80 percent proficiency for two consecutive years on the Criterion Reference Competency Test (CRCT). At-Large Seat 9: Emmett D. Johnson Mr. Johnson has proven that he is a person dedicated to making a positive difference. He is committed to serving the need of our youth. He is knowledgeable about educational issues. As a member of the Atlanta Board of Education, Mr. Johnson: Received the 2009 Richard A Green Award- The Richard A. Green Award the Nation's highest honor for urban education leadership, at the Council of the Great City Schools 2009 fall conference. The Council represents 66 of the largest urban school districts in the nation, educating 7.1 million students. The Green Award is named in honor of the first African-American chancellor of the New York City school system, who had also headed Minneapolis Public Schools. As the recipient of the Richard Green Award, Johnson received a $10,000 college scholarship to present to a high school senior of his choice in the Atlanta Public Schools or from his high school alma mater. x ATLANTA INDEPENDENT SCHOOL SYSTEM APPOINTED OFFICIALS JUNE 30, 2011 SUPERINTENDENT Erroll B. Davis, Jr. SENIOR CABINET Charles A. Burbridge...................................................Chief Financial Officer Sharon Pitts, Interim..........................................................General Counsel Karen L. Walden........................................ Deputy Superintendent for Instruction Larry Hoskins.........................................Deputy Superintendent for Operations Alexis Kirijan......................................Chief Strategy and Development Officer David Williamson..................................................Chief Information Officer Steve Smith........................................................................Chief of Staff xi Organization Chart Superintendent Erroll B. Davis, Jr. Assistant Superintendent of Instructional Operations (Interim) Dr. Eric Rosser Deputy Superintendent Instruction Karen L. Waldon School Reform Teams (SRTs) Associate Superintendent for High Schools (Interim) Abigail Crawford Deputy Superintendent Operations Larry L. Hoskins Deputy Superintendent / Chief of Staff Steve Smith Charles Burbridge General Counsel (Interim) Sharron Pitts xii Atlanta Public Schools is educating today's students for tomorrow's world. We are committed to ensuring that all students graduate from our schools ready for success in college and life. FINANCIAL SECTION Russell W. Hinton STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400 February 27, 2012 Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Atlanta Independent School System INDEPENDENT AUDITOR'S REPORT ON BASIC FINANCIAL STATEMENTS Ladies and Gentlemen: We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Atlanta Independent School System (School System), as of and for the year ended June 30, 2011, which collectively comprise the School System's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Atlanta Independent School System's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the School System's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Atlanta Independent School System, as of June 30, 2011, and the respective changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note A, the Atlanta Independent School System implemented Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, effective July 1, 2010. 2011ARL-11X Management's Discussion and Analysis on pages 3 through 14 and the required supplementary information on pages 51 through 52 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures, 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 Atlanta Independent School System's financial statements as a whole. The Introductory Section, the Supplementary Information and Statistical Section are presented for purposes of additional analysis and are not a required part of the financial statements. The Supplementary Information on pages 53 through 68 has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. The Introductory Section on pages i through xii and the Statistical Section on pages 69 through 93 have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them. 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, RWH:as 2011ARL-11X Russell W. Hinton, CPA, CGFM State Auditor MANAGEMENT'S DISCUSSION AND ANALYSIS ATLANTA INDEPENDENT SCHOOL SYSTEM Management's Discussion and Analysis For the Fiscal Year Ended June 30, 2011 The discussion and analysis of the Atlanta Independent School System's financial performance provides an overview of the fiscal year ended June 30, 2011. The intent of this discussion and analysis is to examine the School System's financial performance as a whole, identify changes in financial position as well as to provide basic financial statements. The basic financial statements and notes to the basic financial statements should be reviewed by the readers to enhance their understanding of the School System's financial performance as a whole or as an entire operating entity. The basic financial statements contain the following components: 1) Government-wide financial statements including the Statement of Net Assets and the Statement of Activities, which provide a broad, long-term overview of the School System's finances. 2) Fund-level financial statements provide a greater level of detail about the School System's major funds and focus on how well the School System has performed in the short-term in the most significant funds. 3) Notes to the Basic Financial Statements. This report also presents the highlights for the fiscal year ended June 30, 2011 and contains other supplementary information. FINANCIAL HIGHLIGHTS Overall, net assets in fiscal year 2011 increased by 5.3% over fiscal year 2010. This is evidence of management's ability to maintain a balanced budget and control expenses, despite austerity reductions due to economic downturns affecting the Districts revenues. The key financial highlights for fiscal year 2011 as represented are: Government-wide Financial Statements: Total net assets for the School System increased from approximately $1,298.92 million in fiscal year 2010 to approximately $1,367.47 million in fiscal year 2011, an increase of approximately $68.55 million or 5.3% due to revenues exceeding expenses by approximately $68 million primarily due to budget cuts. Net assets increased by approximately $68.41 million for Governmental Activities and increased by $145,157 for Business-type Activities. Total revenues decreased from approximately $805.55 million in fiscal year 2010 to approximately $803.28 million in fiscal year 2011, a decrease of approximately $(2.27) million or -0.3%. Revenue for Governmental Activities decreased approximately $(2.92) million while revenue for Business-type activities increased by approximately $0.65 million. Total expenses decreased approximately $(54.61) million or -6.9% from approximately $789.34 million in fiscal year 2010 to approximately $734.73 million in fiscal year 2011. Expenses decreased in Governmental Activities by approximately $(55.19) million and increased by approximately $0.58 million in Business-type Activities. 3 Fund Financial Statements: The School System has prepared its annual financial reports corresponding to the Governmental Accounting Standards Board No. 34 financial reporting model. The following graphic is provided to give the reader an overview of this reporting model. OVERVIEW OF FINANCIAL STATEMENTS Government-wide Financial Statements The Governmentwide financial statements are designed to provide the reader with a broad overview of the School System's finances in a manner similar to those used by private-sector businesses. The Statement of Net Assets and the Statement of Activities provide information about the activities of the whole School System, presenting an aggregate and long-term perspective of the finances. These statements include all assets and liabilities using the accrual basis of accounting. This basis of accounting includes all of the current fiscal year's revenues and expenses regardless of when cash is received or paid. o The Statement of Net Assets presents information on all of the Schools System's assets and liabilities, with the difference between the two reported as net assets. Increases or decreases in 4 net assets may serve as a useful indicator of whether the financial position is improving or deteriorating. o The Statement of Activities presents information showing how net assets changed during the fiscal year. All changes in the net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Thus, revenues and expenses are reported in the statement for some items that will result in cash flows in future fiscal periods (for example, uncollected taxes and earned but unused vacation leave). Included in the Statement of Net Assets and Statement of Activities for the School System are two distinct kinds of activities: Governmental Activities Most of the School System's programs and services are reported here including instruction, pupil services, improvement of instruction, educational media, general administrative, school administrative, business administration, maintenance and operation of facilities, student transportation and central support. Business-type Activities This service is provided on a charge for goods or services basis to recover all of the expenses of the goods or services provided. The Food Services proprietary fund is reported as a business-type activity. Table 1 - Condensed Statement of Net Assets (in millions of dollars) Governmental Activities 2011 2010 Business-type Activities 2011 2010 Total School System percentage 2011 2010 change Current and other assets Net capital assets Total assets $ 383.91 $ 376.38 $ 3.19 $ 1,248.63 1,099.20 0.00 1,632.54 1,475.58 3.19 2.47 $ 387.10 $ 378.85 0.00 1,248.63 1,099.20 2.47 1,635.73 1,478.05 2.2% 13.6% 10.7% Long-term debt outstanding Other liabilities 158.20 88.82 0.00 109.05 89.88 1.01 0.00 158.20 88.82 78.1% 0.43 110.06 90.31 21.9% Total liabilities 267.25 178.70 1.01 0.43 268.26 179.13 49.8% Net assets Invested in capital assets, net of related debt Restricted for debt services Restricted for capital projects Restricted for federal programs Restriced for state and local programs Unrestricted Total net assets $ 1,104.60 1,056.75 1.10 1.87 107.59 110.07 0.01 0.00 4.15 0.00 147.84 128.19 1,365.29 $ 1,296.88 $ 0.00 0.00 0.00 0.00 0.00 2.18 2.18 $ 0.00 1,104.60 1,056.75 0.00 1.10 1.87 0.00 107.59 110.07 0.00 0.01 0.00 0.00 4.15 0.00 2.04 150.02 130.23 2.04 $ 1,367.47 $ 1,298.92 4.5% -41.2% -2.3% 100.0% 100.0% 15.2% 5.3% Total assets increased by roughly $157.68 million or 10.7%. Current and other assets increased by roughly $8.25 million or 2.2%. 5 Capital assets, net of accumulated depreciation for all governmental activities increased by roughly $149.43 million or 13.6%. The increase primarily represents additions to buildings and building improvements. Long-term debt outstanding increased by roughly $69.38 million or 78.1%. The increase was primarily due to the issuance of Certificates of Participation in the amount of $104.4 million offset by reductions of roughly $34.07 million for contingent liabilities. Table 2 - Condensed Changes in Net Assets (in millions of dollars) Revenues Program revenues Charges for services Operating grants and contributions Capital grants and contributions General revenues Property taxes, levied for general purposes Special Purpose Local Option Sales Tax Investment earnings Grants and Contributions not restricted to specific programs Property taxes levied for debt service Other Gain on Sale of Assets Total Revenues Expenses: Instruction Support Services: Pupil services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Nutrition Other support services Interest and fiscal charges Total Expenses Change in Net Assets Beginning Net Assets Ending Net Assets Governmental Activities 2011 2010 Business-type Activities 2011 2010 Total School System Percentage 2011 2010 Change $ 1.49 $ 221.76 25.37 469.31 52.90 0.12 1.31 1.17 5.30 0.61 779.34 1.84 $ 203.78 0.00 498.92 63.43 0.23 1.31 1.27 10.58 0.90 782.26 1.69 $ 22.23 0.00 0.00 0.00 0.02 0.00 0.00 0.00 0.00 23.94 1.84 $ 21.44 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 23.29 3.18 $ 243.99 25.37 3.68 225.22 0.00 469.31 52.90 0.14 498.92 63.43 0.24 1.31 1.31 1.17 1.27 5.30 10.58 0.61 0.90 803.28 805.55 -13.6% 8.3% 0.0% -5.9% -16.6% -41.7% 0.0% -7.9% -49.9% -32.2% -0.3% 377.49 39.02 50.50 9.61 14.51 33.29 17.89 96.33 28.90 36.73 0.02 4.38 2.26 710.93 $ 68.41 $ 1296.88 $ 1365.29 $ 438.04 37.30 40.43 8.39 14.11 28.24 15.33 90.75 39.59 48.57 0.00 3.35 2.02 766.12 16.14 $ 1280.74 1296.88 $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 23.80 0.00 0.00 23.80 0.14 $ 2.04 2.18 $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 23.22 0.00 0.00 23.22 0.07 $ 1.97 2.04 $ 377.49 39.02 50.50 9.61 14.51 33.29 17.89 96.33 28.90 36.73 23.82 4.38 2.26 438.04 37.30 40.43 8.39 14.11 28.24 15.33 90.75 39.59 48.57 23.22 3.35 2.02 734.73 789.34 68.55 $ 1298.92 1367.47 $ 16.21 1282.71 1298.92 -13.8% 4.6% 24.9% 14.5% 2.8% 17.9% 16.7% 6.2% -27.0% -24.4% 2.6% 30.8% 11.9% -6.9% 322.9% 6 Primary Government Sources of Revenues Fiscal Year 2011 SPLOST, 6.6% Other, 0.9% Program revenues, 33.9% Property taxes, 58.6% Total revenues, overall, decreased roughly $(2.27) million or -0.3% from fiscal year 2010 to fiscal year 2011, due to continued decreases in property tax revenues. Program revenues are primarily grant related and account for approximately $272.54 million or 33.9% of total revenues received and include State QBE revenue. General revenues represent the major revenue stream for the School System. They account for 66.1% or roughly $530.74 million of total revenues received in FY 2011. Between fiscal years 2010 and 2011, a decrease of roughly $(29.71) million in property tax revenues and a decrease in SPLOST sales tax revenues of roughly $(10.53) million occurred. 7 Primary Government Expenses Fiscal Year 2011 Central support 5.0% Student transportation 3.9% Maintenance and operation of facilities 13.1% Nutrition 3.2% Other support services 0.6% Interest expense 0.3% Business administration 2.4% School administrative 4.5% General administrative 2.0% Educational media 1.3% Improvement of instruction 7.0% Pupil services 5.3% Instruction 51.4% Total expenses decreased from 2010 to 2011 by -6.9% or roughly $(54.61) million. Management continues to forecast spending levels and manage spending throughout the year. Governmental activities account for 96.8% or roughly $710.93 million of total District spending. Four groups of activities account for 88.6% or roughly $629.04 million of governmental spending: instruction roughly ($377.49 million or 53.1%); pupil and improvement of instructional services roughly ($89.52 million or 12.6%); administration and business services roughly ($65.69 million or 9.2%); and maintenance and operations roughly ($96.33 million or 13.6%). Business-type activities revenues and expenses increased from 2010 to 2011, with revenue increasing by approximately $658,000 or 2.8% and expenses increasing by approximately $578,000 or 2.5%. Revenues increased due to an increase in pupil sales. Expenses increased as a result of unanticipated increase in costs. 8 Table 3 - Net Cost of Governmental Activities (in millions of dollars) Instruction Support Services : Pupil services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Community services Other support services Nutrition Interest and fiscal charges Total Expenses Total Cost of Services Net Cost of Services Percentage 2011 2010 Change 2011 Percentage 2010 Change $ 377.49 $ 438.04 -13.9% $ (240.67) $ (327.07) -26.4% 39.02 37.30 50.50 40.43 9.61 8.39 14.51 14.11 33.29 28.24 17.89 15.33 96.33 90.75 28.90 36.73 0.00 4.38 39.59 48.57 0.00 3.35 0.02 0.00 2.26 2.02 $ 710.93 $ 766.12 4.6% 24.9% 14.6% 2.8% 17.9% 16.7% 6.2% -27.0% -24.4% 0.0% 30.8% 100.0% 11.9% -7.2% $ (20.38) (17.17) (7.62) (9.46) (25.33) (13.81) (75.13) (22.16) (27.47) (0.87) (2.26) (462.32) $ (22.83) (12.78) (6.99) (10.41) (21.40) (12.40) (74.23) (31.31) (38.58) 2.12 (3.35) 0.75 (2.02) (560.50) -10.7% 34.3% 9.0% -9.1% 18.4% 11.4% 1.2% -29.2% -28.8% -100.0% -74.0% -100.0% 11.9% -17.5% The net cost of governmental activities represents the cost of operating the School System to be covered by general revenues, including property taxes. The net cost of services decrease is attributable to a reduction in expenses due to continued budget cuts. Table 4 - Capital Assets (net of accumulated depreciation, in millions of dollars) Land Construction in progress Buildings Building improvements Land Improvements Furniture and fixtures Equipment Vehicles Total Governmental Activities 2011 2010 Percentage change $ 106.45 $ 87.48 21.7% 160.67 128.03 25.5% 851.34 769.91 10.6% 99.99 83.76 19.4% 11.27 10.12 11.4% 0.04 0.05 -20.0% 4.59 2.04 125.0% 14.28 17.80 -19.8% $ 1,248.63 $ 1,099.19 13.6% 9 Fiscal Year 2011 Building improvements 8.0% Land improvements 0.9% Equipment 0.4% Vehicles 1.1% Land 8.5% Buildings 68.2% Construction in progress 12.9% Construction in Progress and Buildings SPLOST III construction programs to renovate or construct academic facilities are in the 48th month of a 60 month program. For more detailed information on the School System's capital assets, see Note G in the notes to the basic financial statements. Table 5 - Outstanding Long-Term Debt (in millions of dollars) Capital leases Intergovernmental agreementCity of Atlanta ERS, Inc (COPS, Series 2006/2007) ERS, Inc (COPS, Series 2011A) ERS, Inc (COPS, Series 2011B) Unamortized premium 2011B Compensated absences Contingent Liabilities - Legal Contingent Liabilities - Sales Tax Refund Contingent Liabilities - SPLOST Refund Workers' compensation Total School System percentage 2011 2010 change $ 9.68 $ 14.00 -30.9% 18.44 8.40 72.46 31.96 3.10 5.60 1.31 0.00 0.00 7.25 19.46 9.00 0.00 0.00 0.00 5.80 2.59 2.53 29.06 6.38 -5.2% -6.7% 100.0% 100.0% 100.0% -3.5% -49.4% -100.0% -100.0% 13.6% $ 158.20 $ 88.82 78.1% 10 Outstanding long-term debt increased in the current fiscal year due to the issuance of Certificates of Participation for the renovation of North Atlanta High School. For more detailed information on the School System's long-term debt, see Notes H and I in the notes to the basic financial statements. Fund Financial Statements Fund financial statements provide detailed information regarding the resources segregated for specific activities or objectives, not Government-wide. Funds are used to track specific sources of revenue and expenditures for particular programs. The School System has three kinds of funds: Governmental funds include most of the School System's basic services and focus on providing cash flow available for spending. These funds include the General Fund, Capital Projects Fund, Education Reform Success Fund and other governmental funds of lesser magnitude. Fund accounting statements use the modified accrual method of accounting, which measures cash and other financial assets that can be readily converted to cash. These statements present a short-term view of the School System's operations and services and do not include the long-term focus presented in the Government-wide financial statements. For an explanation of the differences, see the reconciliations included with the Governmental Fund Statements. Proprietary fund consist of services provided by the School System for a fee and employ the full accrual method of accounting in the same manner as the Government-wide statements. The School System has one proprietary fund, Food Services. This fund provides student meals at a cost based on the student's ability to pay, subsidized by Federal funds and the School System. Fiduciary fund account for assets not owned by the School System but for which the School System is responsible for ensuring that the assets in the funds are used for their designated purposes. These funds are not included in the Government-wide financial statement because they cannot be used to finance the School System operations. The School System has one fiduciary fund - Agency Funds (Local School, Club and Class Funds). The following presents a summary of the General Fund, Capital Projects Fund, Education Reform Success (ERS) and other non-major governmental funds by type of revenue for the fiscal year ended June 30, 2011 as compared to June 30, 2010. Table 6 - Revenues and other financing sources (in millions of dollars) Local taxes Sales taxes income State revenues Federal revenues Investment income Facility rental fees Tuition charges Charges for services Other Proceeds from bonds Premium on bonds Proceeds from sale of capital assets Total Revenues and other financing sources Governmental Funds Increase Percentage 2011 2010 (Decrease) Change $ 445.99 $ 493.83 $ 57.68 95.44 132.03 110.94 84.05 82.46 0.28 0.41 0.78 1.00 0.03 0.09 0.67 0.75 13.90 22.08 104.42 0.00 3.10 0.00 0.70 1.22 (47.84) (37.76) 21.09 1.59 (0.13) (0.22) (0.06) (0.08) (8.18) 104.42 3.10 (0.52) -9.7% -39.6% 19.0% 1.9% -31.7% -22.0% -66.7% -10.7% -37.1% 100.0% 100.0% -42.6% $ 843.63 $ 808.22 $ 35.40 4.4% 11 The following table presents a summary of the General Fund, Capital Projects Fund, ERS and other governmental funds by type of expenditures for the fiscal year ended June 30, 2011 as compared to June 30, 2010. Table 7 - Expenditures (in millions of dollars) Instruction Support services Pupil services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Other support services and nutrition Capital outlays Debt service Total Expenditures Excess (deficiency) of revenues over (under) expenditures - See Table 6 Transfers in Transfers out Fund Balances, Beginning of Fiscal Year 2011 Governmental Funds Increase Percentage 2010 (Decrease) Change $ 373.89 $ 403.80 $ 38.47 49.82 9.45 14.32 32.84 16.84 96.15 26.02 36.24 4.34 170.37 9.20 877.95 36.23 39.45 8.15 13.76 27.51 15.93 90.30 36.26 47.40 3.27 139.77 7.78 869.61 (29.91) 2.24 10.37 1.30 0.56 5.33 0.91 5.85 (10.24) (11.16) 1.07 30.60 1.42 8.34 -7.4% 6.2% 26.3% 16.0% 4.1% 19.4% 5.7% 6.5% -28.2% -23.5% 32.7% 21.9% 18.3% 1.0% (34.32) (61.39) 27.07 10.97 44.66 (10.97) (44.66) 258.45 319.84 (33.69) 33.69 (61.39) FUND BALANCES, End of Fiscal Year $ 224.13 $ 258.45 $ (34.32) Decreases in instruction, student transportation, maintenance and operation and central support are due to budget cuts during the current fiscal year. Analysis of Major Funds The School System has three major funds: the General Fund, Capital Projects Fund and the Education Reform Success Fund. The General Fund is the general operating fund of the School System and is used to account for all financial resources except those funds accounted for in another funds. The Capital Projects Fund is used for the acquisition or construction of major capital facilities and to account for the bond proceeds restricted to renovation and school construction. The Education Reform Success Fund is used for the purpose of providing financing sources for some of the School System's buildings and equipment (Forest Hill Academy and New North Atlanta High School). General Fund As of June 30, 2011, total fund balance in the General Fund was approximately $81.27 million. This balance includes approximately $0.46 million nonspendable, $1.10 million restricted, $17 million committed, $16 million assigned and approximately $46.71 million unassigned fund balance. As a result of operations in fiscal year 2011, the fund balance decreased by approximately $(28.46) 12 million. The decrease in fund balance is attributable to a decrease in property tax collections. For Budget to Actual comparison purposes, the General Fund reported excess expenditures over final budget for the following functions: GENERAL FUND Instruction Salary Non-Salary Pupil Services Non-Salary General Administration Non-Salary Maintenance and Operations Salary Student Transportation Salary Debt Service Principal $18,484,843 Due to an increase in teacher salaries $39,470,477 Due to charter school expenses which are not budgeted $2,410,991 Due to an increase in professional purchased services $1,547,003 Due to an increase in professional purchased services $28,360,413 Due to unfunded pension costs increase which was budgeted in Business Administration $10,970,338 Due to unfunded pension costs increase which was budgeted in Business Administration $5,339,366 Did not budget principal amounts Transfers Out $10,966,449 Did not budget transfers to other funds Capital Projects Fund As of June 30, 2011, total fund balance in the Capital Projects Fund was approximately $85.80 million. This balance includes approximately $56.90 million restricted and approximately $28.90 million assigned. The fund balance decreased by approximately $(51.08) million due primarily to an increase in SPLOST capital expenditures and a decrease in SPLOST revenues. Education Reform Success (ERS) As of June 30, 2011, total fund balance in the ERS fund was approximately $50.69 million all of which is restricted. Other Governmental Funds As of June 30, 2011, total fund balance in Non-major Governmental Funds was approximately $6.37 million. This balance included approximately $4.16 million restricted and approximately $2.21 million assigned. The fund balance decreased by approximately $(5.46) million due to an increase in expenditures, primarily instruction. Current Issues Currently known facts, decisions or conditions that are expected to have a significant effect on the financial position or results of operations are as follows: 13 Atlanta Independent School System received Federal American Recovery Reinvestment Act (ARRA) funds which helped to offset reductions in State QBE funding. The continued support of our schools by the public and by local community organizations and businesses is also an integral part of our ability to educate our students. Continuing revenue from the Special Purpose Local Option Sales Tax should facilitate our ability to replace and improve existing schools and add additional classrooms. Our operating budget will continue to be tight, as we expect decreased funding from the State of Georgia due to current financial conditions. Despite these challenges, we remain committed to using our financial resources efficiently to provide an exceptional educational experience for our students. In February 2008, the Supreme Court of Georgia issued a decision holding that educational ad valorem taxes can only be used for educational purposes. In response, the General Assembly passed Senate Resolution 996, a proposed amendment to the Georgia Constitution permitting Boards of Education to agree to pledge educational ad valorem taxes for redevelopment projects and purposes, and the voters ratified the constitutional amendment by referendum in November 2008. As a result of Senate Resolution 996 and the referendum, House Bill 63 was passed by the General Assembly and became effective April 22, 2010, reenacting the Redevelopment Powers Act. However, in December 2008, a challenge to the use of retroactive educational ad valorem taxes was filed by a taxpayer. In August 2010, the Superior Court issued an order expressly authorizing the City and Atlanta Development Authority (ADA) to transfer to APS for its general purposes all of the Perry Bolton and BeltLine ad valorem tax increment that they had received for tax years up to and including 2009. Pursuant to this order, the City and ADA actually made a transfer of funds to APS. The Plaintiffs in the Clark case have initiated two appeals of orders related to the August 2010 transfer of funds. Plaintiffs have recently amended their complaint to drop some claims. After two appeals, a summary judgment was issued in favor of the School System on November 15, 2011. The revenue has been recognized at the government-wide level. General Fund Budgetary Highlights The School System's budget is prepared by the Finance Division and is a collaborative effort between the School System and the Atlanta community. The basis for preparation utilizes a zerobased approach because it has systematically provided a more accurate account of anticipated spending levels for the year. Details of the General Fund original budget and the amended budget are presented on page 51 in the Financial Section of this report. Requests for Information This financial report is designed to provide a general overview of the School System's finances for all those with an interest in the School System's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the School System's Chief Financial Officer, 130 Trinity Street SW, Atlanta Georgia 30303. 14 BASIC FINANCIAL STATEMENTS Atlanta Independent School System Statement of Net Assets June 30, 2011 ASSETS Current Assets: Cash and cash equivalents Investments Taxes receivable, net Due from other governments Other receivables Internal balances Prepaid items and other assets Total current assets Noncurrent assets: Net pension asset Deferred Charges Non-depreciable capital assets Depreciable capital assets Less: Accumulated depreciation Total noncurrent assets TOTAL ASSETS LIABILITIES Current liabilities: Accounts payable and other current liabilities Accrued interest payable Due to other governments Unearned revenues Current portion of long-term obligations Total current liabilities Noncurrent liabilities: Noncurrent portion of long-term obligations TOTAL LIABILITIES NET ASSETS Invested in capital assets, net of related debt Restricted for: Debt service Capital projects Federal programs State and local programs Unrestricted TOTAL NET ASSETS Governmental Activities Business-type Activities Total $ 173,892,357 $ 136,679,551 22,256,453 33,712,545 118,215 4,175,042 456,736 371,290,899 11,153,856 1,466,547 267,130,359 1,300,996,330 (319,491,754) 1,261,255,338 1,632,546,237 6,404,725 $ - 275,727 3,731 (4,175,042) 681,110 3,190,251 - 3,190,251 180,297,082 136,679,551 22,256,453 33,988,272 121,946 - 1,137,846 374,481,150 11,153,856 1,466,547 267,130,359 1,300,996,330 (319,491,754) 1,261,255,338 1,635,736,488 74,010,096 454,246 34,497,704 89,000 8,697,607 117,748,653 149,506,316 267,254,969 1,104,601,221 1,104,717 107,591,205 14,077 4,145,071 147,834,977 $ 1,365,291,268 $ 922,905 - 83,702 - 1,006,607 - 1,006,607 - 2,183,644 2,183,644 $ 74,933,001 454,246 34,497,704 172,702 8,697,607 118,755,260 149,506,316 268,261,576 1,104,601,221 1,104,717 107,591,205 14,077 4,145,071 150,018,621 1,367,474,912 The accompanying notes are an integral part of the basic financial statements. 15 Atlanta Independent School System Statement of Activities For the Fiscal Year Ended June 30, 2011 Functions/Programs Primary Government Governmental activities: Instruction Support Services: Pupil services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Other support services Nutrition Interest expense Total Governmental activities Business-type activities Food services Total Business-type activities Total School System Program Revenues Net (Expenses) Revenues and Changes in Net Assets Expenses Charges for Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities Business-type Activities $ 377,491,180 $ 39,024,421 50,496,694 9,616,559 14,514,905 33,287,126 17,889,836 96,333,469 28,898,209 36,729,914 4,382,181 15,657 2,258,183 710,938,335 31,492 $ 783,989 670,918 - 1,486,399 111,426,958 $ 18,641,247 33,328,056 2,000,787 5,053,926 7,958,215 4,077,543 20,416,518 6,735,023 9,260,421 2,845,306 14,696 - 221,758,696 25,367,686 $ - 25,367,686 (240,665,044) $ (20,383,174) (17,168,638) (7,615,772) (9,460,979) (25,328,911) (13,812,293) (75,132,962) (22,163,186) (27,469,493) (865,957) (961) (2,258,183) (462,325,554) - $ - - 23,800,532 23,800,532 $ 734,738,867 $ 1,695,061 1,695,061 3,181,460 $ 22,233,560 22,233,560 243,992,256 $ General revenues: Taxes: Property Taxes levied for general purposes Property Taxes. Levied for debt service Special Local Option Sales Tax & Other Taxes Grants and Contributions not restricted to specific programs Unrestricted Investment earnings Other Gain on sale of capital assets Total General revenues Change in net assets Net assets - beginning of fiscal year 25,367,686 $ (462,325,554) $ 128,089 128,089 128,089 $ 469,310,346 1,174,306 52,901,075 1,310,441 124,833 5,298,494 614,466 530,733,961 68,408,407 1,296,882,861 17,068 17,068 145,157 2,038,487 Net assets - end of fiscal year $ 1,365,291,268 $ 2,183,644 $ TOTALS (240,665,044) (20,383,174) (17,168,638) (7,615,772) (9,460,979) (25,328,911) (13,812,293) (75,132,962) (22,163,186) (27,469,493) (865,957) (961) (2,258,183) (462,325,554) 128,089 128,089 (462,197,465) 469,310,346 1,174,306 52,901,075 1,310,441 141,901 5,298,494 614,466 530,751,029 68,553,564 1,298,921,348 1,367,474,912 The accompanying notes are an integral part of the basic financial statements. 16 ASSETS Cash and cash equivalents Investments Taxes Receivables, net Due from other governments Other receivables Due from other funds Interest receivable Prepaid items TOTAL ASSETS LIABILITIES AND FUND BALANCES LIABILITIES Accounts payable and accrued liabilities Retainage payables Contracts payable Due to other funds Due to other governments Deferred revenue TOTAL LIABILITIES FUND BALANCE Nonspendable Restricted Committed Assigned Unassigned Total Fund Balances TOTAL LIABILITIES AND FUND BALANCES Atlanta Independent School System Balance Sheet Governmental Funds June 30, 2011 General Fund Capital Projects Fund Education Reform Success Nonmajor Governmental Funds Total Governmental Funds $ 89,810,473 $ 33,089,905 $ 71,999,418 64,680,133 15,525,898 6,730,555 19,126,967 - 118,215 - - 29,305,618 389 - 456,347 - $ 197,037,707 $ 133,806,211 $ 50,991,979 $ - 150,317 - 51,142,296 $ - $ 14,585,578 5,923,391 - 20,508,969 $ 173,892,357 136,679,551 22,256,453 33,712,545 118,215 35,379,326 389 456,347 402,495,183 $ 60,043,599 $ - - 17,159,617 38,566,936 $ 115,770,152 $ 900,718 $ 3,691,816 9,343,963 34,065,778 - 48,002,275 $ 30,000 $ - 426,133 - 456,133 $ - $ 14,044,667 5,793 89,000 14,139,460 $ 60,974,317 3,691,816 9,343,963 31,204,284 34,497,704 38,655,936 178,368,020 $ 456,347 1,104,717 16,995,134 16,000,000 46,711,357 56,905,042 28,898,894 - 81,267,555 85,803,936 $ 197,037,707 $ 133,806,211 $ 50,686,163 - 50,686,163 51,142,296 $ 4,159,148 2,210,361 - 6,369,509 20,508,969 $ The accompanying notes are an integral part of the basic financial statements. 456,347 112,855,070 16,995,134 47,109,255 46,711,357 224,127,163 402,495,183 17 ATLANTA INDEPENDENT SCHOOL SYSTEM Reconciliation of Governmental Fund Balance Sheet to the Government-wide Statement of Net Assets June 30, 2011 Total Fund balances - total governmental funds $ 224,127,163 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not financial resources and, therefore are not reported in the above funds. Cost of capital assets Less: Accumulated depreciation $ 1,568,126,689 (319,491,754) 1,248,634,935 Property taxes used in governmental activities represents amounts that are not financial resources and thus are deferred in the above funds. Deferred Revenue Property Taxes receivable Allowance for uncollectible receivables 25,022,211 25,882,281 (12,337,556) 38,566,936 Accumulated pension contributions in excess of annual required contributions are reported as assets for governmental activities. 11,153,856 Other long-term assets (Bond Issuance Costs) are not available to pay for current period expenditures and therefore, are deferred on the Statement of Net Assets. 1,466,547 Long-term liabilities, including capital leases, are not due and payable in the current period and therefore are not reported in the above funds. Capital leases Intergovernmental agreement - City of Atlanta Education Reform Success 2006/2007 Education Reform Success 2011A Education Reform Success 2011B Accrued Interest Payable Unamortized premium ERS 2011B Compensated absences Contingent legal liabilities Workers compensation $ (9,682,005) (18,439,000) (8,400,000) (72,460,000) (31,955,000) (454,246) (3,097,709) (5,600,233) (1,311,976) (7,258,000) (158,658,169) NET ASSETS OF GOVERNMENTAL ACTIVITIES $ 1,365,291,268 The accompanying notes are an integral part of the basic financial statements. 18 Atlanta Independent School System Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For The Fiscal Year Ended June 30, 2011 REVENUES Local taxes Sales taxes income State revenues Federal revenues Investment income Facility rental fees Tuition charges Charges for services Other Total revenues EXPENDITURES Current: Instruction Support Services: Pupil services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Other support services Nutrition Capital outlays Debt Service: Principal Interest and fiscal charges Bond issuance cost Total Expenditures Excess (deficiency) of revenues over/(under) expenditures OTHER FINANCING SOURCES(USES) Proceeds from bonds Premium on bonds Proceeds from sale of capital assets Transfers in Transfers out Total Other Financing Sources(Uses) Net change in fund balances Fund Balances, Beginning of Fiscal Year FUND BALANCES, End of Fiscal Year General Fund Capital Projects Fund Education Reform Success Nonmajor Governmental Funds Total Governmental Funds $ 445,986,671 $ - $ - 57,678,243 127,235,844 1,767,686 10,747,543 - 124,833 157,853 783,989 - 31,492 - 670,918 - 6,230,668 438,713 591,811,958 60,042,495 - $ - - - - - - - - - - $ - 3,030,067 73,299,315 - - - - 7,227,628 83,557,010 445,986,671 57,678,243 132,033,597 84,046,858 282,686 783,989 31,492 670,918 13,897,009 735,411,463 342,158,303 24,014,862 18,465,663 9,437,280 11,488,177 31,429,973 16,025,431 92,797,603 24,258,790 31,499,062 1,667,013 - 5,339,366 1,432,488 - 610,014,011 (18,202,053) 12,578 41,689 95,282 3,294,169 49,709 2,616,021 115,014,153 - 121,123,601 (61,081,106) - 55,360,000 595,000 371,449 1,466,547 57,792,996 (57,792,996) 706,016 2,824 (10,966,449) (10,257,609) (28,459,662) 10,000,000 - 10,000,000 (51,081,106) 104,415,000 3,097,709 966,449 (2,824) 108,476,334 50,683,338 109,727,217 136,885,042 $ 81,267,555 $ 85,803,936 $ 2,825 50,686,163 $ The accompanying notes are an integral part of the basic financial statements. 31,718,972 14,460,085 31,354,768 9,590 2,790,652 1,411,364 716,701 54,069 1,708,121 2,122,936 2,656,481 15,657 - - 89,019,396 (5,462,386) - - (5,462,386) 11,831,895 6,369,509 $ 373,889,853 38,474,947 49,820,431 9,446,870 14,320,518 32,841,337 16,837,414 96,145,841 26,016,620 36,238,019 4,323,494 15,657 170,374,153 5,934,366 1,803,937 1,466,547 877,950,004 (142,538,541) 104,415,000 3,097,709 706,016 10,969,273 (10,969,273) 108,218,725 (34,319,816) 258,446,979 224,127,163 19 ATLANTA INDEPENDENT SCHOOL SYSTEM Reconciliation of Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances To the Government-wide Statement of Activities For the Fiscal Year Ended June 30, 2011 Total Net Change in Fund Balances - Governmental Funds Amounts reported for Governmental Activities are different because: $ (34,319,816) Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays of exceed depreciation of in the current period. Capital outlays Depreciation expense 160,894,669 (34,968,029) The net effect of various miscellaneous transactions involving disposal of capital assets which decreased net assets. Historical cost of disposal of capital assets (land, vehicles, buildings, and building improvements) Accumulated depreciation (2,276,489) 2,184,939 125,926,640 (91,550) Revenues reported in the statement of activities that do not provide current financial resources and, therefore, are not reported as revenues in governmental funds. Deferred property tax Deferred sales tax Capital Contributions 24,497,981 (4,777,168) 23,600,000 43,320,813 Pension contributions in excess of Annual Required Contributions are reported as assets for Governmental Activities. Bond issuance costs are reported as an expenditure in Government Funds, but are reported as deferred charges on the Statement of Net Assets and amortized over the term of the debt, using the effective interest method. Accrued interest is reported in the government-wide statement of activities, but does not require the use of current financial resources and therefore is not reported as an expenditure in governmental funds. Some expenses reported in the statement of activities do not require the use of current financial resources and , therefore, are not reported as expenditures in governmental funds. The issuance of longterm debt (e.g., leases, notes) provides current financial resources. Principal payments on capital leases Principal payments on intergovernmental agreement - City of Atlanta Principal payments on Education Reform Success Proceeds from Education Reform Success 2011A Proceeds from Education Reform Success 2011B Proceeds from unamortized premium ERS 2011B Compensated absences Contingent legal liabilitites Contingent liabilities - Sales Tax Refund Contingent liabilities - SPLOST Refund Workers' compensation 4,316,491 1,022,875 595,000 (72,460,000) (31,955,000) (3,097,709) 203,380 1,279,179 2,526,157 29,064,201 (875,961) 1,941,406 1,466,547 (454,246) (69,381,387) CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES The accompanying notes are an integral part of the basic financial statements. $ 68,408,407 20 Atlanta Independent School System Statement of Net Assets Proprietary Fund - Food Services June 30, 2011 ASSETS Current assets: Cash and cash equivalents Due from other governments Other receivables Inventories Total Assets LIABILITIES Liabilities: Current Liabilities: Accounts payable and accrued liabilities Due to other funds Unearned revenue Total Liabilities NET ASSETS Unrestricted Total net assets TOTAL LIABILITIES AND NET ASSETS $ 6,404,725 275,727 3,731 681,110 $ 7,365,293 $ 922,905 4,175,042 83,702 5,181,649 $ 2,183,644 2,183,644 $ 7,365,293 The accompanying notes are an integral part of the basic financial statements. 21 Atlanta Independent School System Statement of Revenues, Expenses and Changes in Net Assets Proprietary Fund - Food Services For the Fiscal Year Ended, June 30, 2011 Operating revenue: Charges for services Operating expenses Personnel costs Professional and contract services Supplies and materials Other operating costs Total Operating Expenses Operating Loss Nonoperating revenues Grants - Child Nutrition Program Investment Income Total Nonoperating revenues: Changes in net assets Net Assets Beginning of Fiscal Year NET ASSETS, END OF FISCAL YEAR $ 1,695,061 3,434,929 17,718,346 1,796,025 851,232 23,800,532 (22,105,471) 22,233,560 17,068 22,250,628 145,157 2,038,487 $ 2,183,644 The accompanying notes are an integral part of the basic financial statements. 22 Atlanta Independent School System Statement of Cash Flows Proprietary Fund - Food Services For the Fiscal Year Ended June 30, 2011 Cash Flow From Operating Activities Cash received from user charges Cash payments to employees for services Cash payments to suppliers for goods and services Net cash used for operating activities Cash Flows From Non-capital Financing Activities Non-operating grants received Net cash provided from for non-capital financing activities Cash Flows From Investing Activities Interest on bank accounts Net cash provided by investing activities Net change in cash and cash equivalents Cash and cash equivalents, beginning of fiscal year Cash and cash equivalents, end of fiscal year $ 1,808,059 (3,683,724) (15,941,761) (17,817,426) 19,610,913 19,610,913 17,068 17,068 1,810,555 4,594,170 $ 6,404,725 Reconciliation of operating (loss) to net cash provided (used) by operating activities: Operating (loss) Adjustments to reconcile operating loss to net cash provided (used) by operating activities: Commmodities used Changes in Assets and Liabilities Decrease in Accounts Receivables Increase in liabilities Net cash used for operating activities Noncash Non-Capital Financing Activities USDA donated food commodity $ (22,105,471) 2,042,623 112,998 2,132,424 $ (17,817,426) $ 2,042,623 The accompanying notes are an integral part of the basic financial statements. 23 Atlanta Independent School System Statement of Fiduciary Assets and Liabilities June 30, 2011 Assets: Cash and cash equivalents Agency Fund Local School, Club and Class Funds $ 573,842 Liabilities: Due to local schools and student groups $ 573,842 The accompanying notes are an integral part of the basic financial statements. 24 ` NOTES TO THE BASIC FINANCIAL STATEMENTS Atlanta Independent School System Notes to the Basic Financial Statements June 30, 2011 A. Summary of Significant Accounting Policies The financial statements of the School System have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applicable to government units. The more significant of the School System's accounting policies are summarized below. 1. Reporting Entity The Atlanta Independent School System (School System) was established by the Georgia State Legislature and is composed of nine publicly elected members serving four-year terms. The School System has the authority to approve its own budget and to provide for the levy of taxes to cover the cost of operations and maintenance and to cover debt service payments. Additionally, the School System has decision-making authority, the power to approve selection of management personnel, the ability to significantly influence operations, and primary accountability for fiscal matters. Accordingly, the School System is a primary government and consists of all the organizations that compose its legal entity. As required by generally accepted accounting principles, these financial statements present the School System and its component units, entities for which the School System is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the School System's operations. Therefore, data from these units are combined with data of the School System. Blended Component Unit Education Reform Success, Inc., (ERS) (a non-profit corporation) was established by the School System for the purpose of providing financing for some of the School System's buildings and equipment. The School System has a voting majority on the Board. ERS has issued certificates of participation (COPS) for the acquisition and construction of facilities and equipment. The COPS are repayable solely from payments made by the School System to ERS under a lease agreement for the related facilities and equipment. Accordingly, the COPS and the related capital assets are reported in the government-wide financial statements. Separate financial statements for ERS are not prepared. 2. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the non-fiduciary activities of the School System and its' component units. The effects of inter-fund activity have been netted in these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. 25 The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to applicants who use, or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the governmental fund financial statements. 3. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. The agency fund does not have a measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the fiscal year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the School System considers revenues to be available if they are collected within 30 days of the end of the fiscal period. The State of Georgia reimburses the School System 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 1 through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School System 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 System recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, sales taxes, intergovernmental revenues and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the School System. The School System reports the following major government funds: 26 General Fund - The General Fund is the School System's primary operating fund. It accounts for all financial transactions of the School System, except those required to be accounted for in another fund. Capital Projects Fund - This fund accounts for resources which are used exclusively for acquiring school sites, constructing and equipping new school facilities, and renovating existing facilities. The major revenue sources are proceeds from debt proceeds, bond sales, property tax revenue, special purpose local option sales tax revenues and amounts received from the State of Georgia. Education Reform Success (ERS) Capital Projects Fund - This fund was established by the School System for the purpose of providing financing for some of the School System's buildings and equipment. ERS has issued certificates of participation (COPS) for the acquisition and construction of facilities and equipment. The School System reports the following major proprietary fund: Food Services Fund - The primary purpose of the Food Services Fund is to account for activities of the School System's school breakfast and lunch programs, which are funded primarily by the United States Department of Agriculture, passed through the Georgia Department of Education. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The School System has elected not to follow subsequent private-sector guidance. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Operating expenses for the enterprises fund includes the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Proprietary funds and fiduciary funds employ the economic resources measurement focus and are accounted for on the accrual basis. The fiduciary fund accounts for assets held by the School System in a trustee capacity or as an agent on behalf of others. The School System reports the following fiduciary fund: Agency Fund - This fund is used to account for local school student club and class accounts. It is custodial in nature and does not involve measurement of results of operations. The fiduciary fund is excluded from the government-wide financial statements. 4. Assets, Liabilities and Net Assets or Equity a. Cash Equivalents The School System considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Georgia Laws, OCGA 45-8-14, authorizes the 27 School System to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. b. Investments Investments made by the School System in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning 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 3683-4 authorizes the School System 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: 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 Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services 7) Repurchase agreements 8) Obligations of other political subdivisions of the State of Georgia c. 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. d. Inventories and Prepaids Inventories are valued at cost using the first-in, first-out method of accounting. The costs of food services fund inventories are recorded as expenditures when consumed (consumption method). Prepaids are payments made to vendors for services that will benefit periods beyond June 30, 2011 and are recorded as prepaid items in the government-wide financial statements. 28 e. 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 Government-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 their estimated market value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not included in the cost of capital assets. The School System does not capitalize book collections or works of art. Capitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements and proprietary funds are as follows: Capitalization Policy Estimated Useful Life Land Land Improvements Buildings Building Improvements Furniture and Fixtures Vehicles Equipment Capital Leases Intangible Assets All $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 N/A 10 to 20 years 20 to 50 years 10 to 30 years 3 to 15 years 5 to 8 years 3 to 15 years 3 to 8 years 5 to 10 years Capital assets donated to proprietary fund type operations are recorded at their estimated fair value at the date of donation. Depreciation is computed using the straight-line method over the estimated useful life of the assets. f. Compensated Absences Vacation benefits are accrued as a liability as the benefits are earned if the employees' rights to receive salary related compensation are attributable to services already rendered and it is probable that the School System will compensate the employees for the benefits through paid time off or some other means. Amounts of vested or accumulated vacation leave that are not expected to be liquidated with expendable available financial resources are reported as longterm obligations in the government-wide financial statements and are not liabilities of the governmental funds. g. Long-term Obligations In the governmental-wide financial statements and proprietary fund types in the fund financial statements, long-term debt, and other long-term obligations are reported as liabilities in the applicable governmental activities or business-type activities statement of net assets. Long-term debt and other long-term liabilities that will be paid from governmental funds are not recognized as a liability in the fund financial statements until due but are reported in the government-wide statements as long-term debt. 29 h. Fund Equity In the fund financial statements, governmental funds report limitations on the purpose for which all or a portion of the resources of the fund balance can be used. The limitations can vary depending upon their source. Financial statements for governmental funds report up to five components of fund balance: Nonspendable Amounts that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact. Restricted Amounts that can be spent only for specific purposes because of state or federal laws, or externally imposed conditions by grantors or creditors. Committed Amounts that can be used only for specific purposes determined by formal action by the Board of Education. The Board of Education is the School District's highest level of decision-making authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Assigned Amounts that are designated by the Superintendent, or designee (Chief Financial Officer), for a particular purpose. Unassigned All amount not included in other spendable classifications. Fund Balances of the Governmental Funds at June 30, 2011 are as follows: FUND BALANCES Nonspendable- The following are nonspendable because they are not in spendable form: General Fund- Prepaid Items $ 456,347 456,347 Restricted - The following fund balances are legally restricted to specified purposes: General Fund - Debt Service Capital Projects Fund- Capital Projects ERS - School construction Non-Major Funds - Continuation of Federal programs Non-Major - Other State and Local programs 1,104,717 56,905,042 50,686,163 14,077 4,145,071 112,855,070 Committed - The following fund balances are committed to specific purposes: General Fund - School Based Activities General Fund - For instruction and support services expenditures 995,134 16,000,000 16,995,134 Assigned - The following fund balances are assigned to specific purposes: General Fund - For fiscal year 2012 budget deficit Capital Projects Fund- Capital Projects Non-Major Funds- Local school programs 16,000,000 28,898,894 2,210,361 47,109,255 Unassigned - The following fund balances are not included in the other categories: General Fund 46,711,357 46,711,357 Total Fund Balances $ 224,127,163 30 When multiple categories of fund balance are available for expenditure, the School System will use restricted amounts first and then unrestricted amounts as they are needed. For unrestricted amounts of fund balance, the School System will use fund balance in the following order: committed, assigned, and then unassigned. i. Net Assets Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net assets are reported as restricted when there are limitations imposed on their use either through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The School System applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. j. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenue and expenses including the disclosure of contingent assets and liabilities. Actual amounts could differ from those estimates. Workers Compensation: The School System recognizes in the government-wide statements the liabilities for estimated losses to be incurred from pending worker compensation claims and for worker compensation claims incurred but not reported (IBNR). IBNR claims are estimates of claims that are incurred through the end of the fiscal year but have not yet been reported. These liabilities are based on actuarial valuations. k. Deferred(Unearned) Revenue The government-wide financial statements use the accrual basis of accounting. Revenue is recognized when earned. Property taxes are recognized as revenue in the fiscal year for which they are levied. Deferred revenues reported in governmental fund financial statements represent unearned revenues or revenues, which are measurable but not available and, in accordance with the modified basis of accounting. B. Budgets and Budgetary Accounting Atlanta Independent School System employs zero-based budgeting for budget preparation. The zerobased budgeting process provides for the identification and prioritization of school system activities and resources starting from zero and accumulating to the targeted funding level. Each activity is linked to the goal, objectives and mission of the System and ranked as to its importance. As the proposed budget moves through each level of the organization, program activities and goals are aggregated further and ranked again. The final budget produced and presented is one, which includes all program activities ranked in order of importance in reaching the System's mission. Our basis of budget presentation is in accordance with GAAP. 31 The School System follows these procedures in establishing the budgetary data reflected in the financial statements: 1. Budget requests are completed in December. 2. Proposed budgets are consolidated and reviewed by the CFO, and submitted to the Superintendent of Schools and Budget Commission for additional review prior to approval by the Atlanta Board of Education. 3. Public hearings on the proposed budget are held in March and April. 4. The annual budget is legally adopted by the Board in May for the General Fund and Special Revenue Funds in June. 5. The administrative level of budgetary control upon adoption is at the program level. The Atlanta Board of Education must approve revisions between salary and non-salary expenditures. Transfer of budgeted amounts between object categories within program functions requires the approval of the budget center manager. 6. Revenues and expenditures of the Capital Projects Fund are budgeted on an annual basis. 7. Education Reform Success (ERS) does not have a legally adopted budget. 8. The Atlanta Board of Education approves the budget for the Special Revenue Funds as a whole, which is the legal level of budgetary control (the level at which expenditures may not legally exceed appropriations). The combined Special Revenue Funds budget to actual schedule does not include the Proprietary Fund which is included when provided to the board for approval. C. Fund Deficit/Excess Expenditures over Appropriations of Individual Funds The following funds reported excess expenditures over final budget: GENERAL FUND Instruction Salary Non-Salary $18,484,843 $39,470,477 Maintenance and Operation Salary $28,360,413 Pupil Services Non-Salary $2,410,991 Student Transportation Salary $10,970,338 General Administration Non-Salary $1,547,003 Debt Service Principal $5,339,366 Transfers $10,966,449 SPECIAL REVENUE FUND - COMBINED Pupil Services Salary $2,161,424 School Administration Salary $267,950 Student Transportation Salary $359,231 CAPITAL PROJECTS FUND Maintenance and Operations Non-Salary $3,255,860 Central Support Non-Salary $2,601,758 32 D: Deposits and Investments Risks Deposits (Governmental Funds) The School System's cash and investment policy limits deposits to demand and money market accounts and time deposits at local banks. The School System's deposit shall be secured by Federal Depositary Insurance Corporation (FDIC) coverage and /or bank pledges. State statutes require banks holding public funds to secure the funds by FDIC insurance, securities pledged at par value, and surety bonds at face value in combined aggregate totaling not less than 110 percent of the public funds held. State statutes define acceptable security for collateralization. Georgia Fund 1, created by OCGA 36-83-8, is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia 1 Fund operates in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on a $1.00 per share value. The fair value of the School System's position in the pool is the same as the value of pool shares ($1 per share value). The regulatory oversight agency for Georgia Fund 1 is the Office of Treasury and Fiscal Services of the State of Georgia. Funds included in this Pool are not required to be collateralized. The fair value of the School System's position in the pool approximates the value of the School System's pool shares. Credit risk, value, and interest risk at June 30, 2011 are as follows: Credit Risk AAAm rated Value $52,128,727 Interest Risk 59 day WAM The School System classifies its investments in Georgia Fund I as cash and cash equivalents. Categorization of Deposits As of June 30, 2011, all of the School System's deposits were covered either by FDIC or collateralized by the financial institution or a combination of both. Categorization of Investments The School System's investments as of June 30, 2011, are presented below. All investments are presented by investment type and debt securities are presented by maturity. 33 Investment Type Debt Securities U.S. Agencies Implicitly Guaranteed: FNMA, FHLM, FHLB Discount Notes Repurchase Agreements Other Investments Certificates of Deposits U.S. Gov't Obligations - U.S. Treasury Bills U.S. Treasury Money Market Mutual Funds (Open End) - cash equivalents Georgia Fund 1 - Cash Equivalents Total Investments Fair Value Investment Maturity Less than One Year 73,679,606 51,000,014 124,679,620 5,000,000 6,999,930 92,973,852 52,128,727 281,782,129 73,679,606 51,000,014 124,679,620 5,000,000 6,999,930 92,973,852 52,128,727 281,782,129 Investment Reconciliation Total Investments General Fund Investments Capital Projects Investments Georgia Fund I - Cash Equivalents Education Reform Success-money market 93,149,694 85,513,231 52,128,727 50,990,477 281,782,129 Reclass to Cash and Cash Equivalents Investments on Balance Sheet as of June 30, 2011 (21,150,276) (20,833,098) (52,128,727) (50,990,477) 71,999,418 64,680,133 - (145,102,578) 136,679,551 Interest Rate Risk Interest rate risk is the risk that changes in interest rates of debt investment will adversely affect the fair value of an investment. The School System's investment management policy limits investment maturities to 3 years as a means of managing its exposure to fair value losses arising from increasing interest rates. Custodial Credit Risk Custodial credit risks for investments, is the risk that in the event of the failure of the counterparty, the School System will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Because of the collateralization requirements, the School System has no custodial credit risk for its investments. 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 System's policy for managing credit quality risk related to community bank certificates of deposits and repurchase agreements states such investments will only be purchased through banks having at least an AA rating. The investment policy states Repurchase Agreements may only be purchased from a financial institution that has short-term ratings of AA or higher by Standard & Poor's (S&P) or Aa2 by Moody's. The U.S. Agencies investments are not required to be rated. 34 The investments subject to credit quality risk are reflected below: Rated Debt Instruments Fair Value Quality Ratings AAA U.S. Treasury Money Market Mutual Funds U.S. Gov't Obligations - U.S. Treasury Bills Georgia Fund 1 - Cash Equivalents Debt Securities U.S. Agencies Implictly Guaranteed FNMA, FHLM, FHLB Discount Notes Certificates of Deposits Repurchase Agreements Total by Quality Rating 92,973,852 6,999,930 52,128,727 92,973,852 6,999,930 52,128,727 73,679,606 5,000,000 51,000,014 281,782,129 73,679,606 N/A 51,000,014 276,782,129 Concentration of Credit Risk Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government's investment in a single issuer. The School System does have a policy concerning the composition of its investment portfolio and is in compliance with its investment policy. The investment policy establishes the following eligible investments individually are not to exceed the following composition in the portfolios of the General Fund, Capital Projects Fund and the Education Reform Success Fund: U.S. Treasury Bills Federal Agencies (No more than 40% per issuer) Repurchase Agreements State of Georgia - Georgia Fund 1 Bank Special Purpose Money Market Funds Commercial Paper Certificates of Deposit 100% 65% 30% 25% 25% 20% 10% Investments in any one issuer that represents 5% or more of the total investments were as follows as of June 30, 2011: Issuer Investment Type % of Total Investments Tri Party Repo Agreement US MONEY MARKET BOFA Government Reserves Capital US MONEY MARKET- Georgia Fund 1 Federal National Mortgage Association Federal Home Loan Mortgage Corporation Federal Home Loan Bank Financial Institutions US Treasury Bill US Bank Money Market Repurchase Agreement Bank special purpose Money Market Funds Bank special purpose Money Market Funds Federal Agency Securities Federal Agency Securities Federal Agency Securities Certificates of Deposits Bank special purpose Money Market Funds Bank special purpose Money Market Funds 18.10% 14.90% 18.50% 2.80% 9.51% 13.84% 1.77% 2.48% 18.10% 35 Foreign Currency Risk Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an investment or deposit. Foreign investments are prohibited by law in Georgia. E. Due from Other Governments Due from other governments consists of grant reimbursements due primarily from the Georgia Department of Education for expenditures made, but not yet reimbursed and amounts due from City of Atlanta for bonds issued and unspent tax collections, collected and held by the City of Atlanta on behalf of the School System. F. Property Taxes and Other Receivables Property taxes are normally levied and billed by July 1, based on property values assessed as of January 1, on all real and personal property located within the City of Atlanta. Property taxes are due by October 15, 2011 at which time they become delinquent and penalties and interest may be assessed and liens may be attached to property. An allowance has been established for estimated amounts that will not be collected. The School System considers revenues to be available if they are collected within 30 days of the end of the current fiscal year. General Fund Property Taxes Receivable 27,863,454 Allowance for Uncollectible (12,337,556) Net Property Receivable 15,525,898 General Fund Other Receivable 568,215 Allowance for Uncollectible (450,000) Net Other Receivable 118,215 Capital Projects Fund SPLOST Tax Receivable 6,730,555 Allowance for Uncollectible - Net SPLOST Tax Receivable 6,730,555 36 G. Capital Assets The following is a summary of changes in the Capital Assets during the fiscal year ended June 30, 2011: Decreases & Beginning Transfers to Ending Balance Increases Service Balance Governmental activities: 0211-0000 Land 87,483,309 F1 19,005,585 A1 (36,891) B1 106,452,003 0251-0000 Construction in Progress 128,030,221 F2 153,744,174 A2 (121,096,039) B2 160,678,356 Total Non-Depreciable Assets 215,513,530 172,749,759 (121,132,930) 267,130,359 0231-0000 Buildings 0231-0001 Building Improvements 0221-0000 Land Improvements 0241-0000 Equipment 0241-0002 Furniture & Fixtures 0241-0001 Vehicles Total Depreciable assets 1,005,852,815 F3 113,927,712 F4 16,927,983 F5 5,120,896 F6 56,030 F7 28,509,543 F8 1,170,394,979 102,274,611 A3 24,541,788 A4 2,159,764 A5 3,864,786 A6 A7 A8 132,840,949 (88,000) B3 (374,805) B4 B5 B6 B7 (1,776,793) B8 (2,239,598) 1,108,039,426 138,094,695 19,087,747 8,985,682 56,030 26,732,750 1,300,996,330 Total at Historical Cost 1,385,908,509 305,590,708 (123,372,528) 1,568,126,689 Less Accumulated Depreciation 0232-0000 Buildings 0232-0001 Building Improvements 0222-0000 Land Improvements 0242-0000 Equipment 0242-0002 Furniture & Fixtures 0242-0001 Vehicles 235,937,907 F10 30,171,876 F11 6,803,699 F12 3,080,104 F13 6,070 F14 10,709,008 F15 20,854,262 A10 8,253,532 A11 1,013,785 A12 1,319,553 A13 5,603 A14 3,521,294 A15 (88,000) B10 (320,146) B11 B12 B13 B14 (1,776,793) B15 256,704,169 38,105,262 7,817,484 4,399,657 11,673 12,453,509 Total Accumulated Depreciation 286,708,664 34,968,029 (2,184,939) 319,491,754 Governmental activities capital assets, net 1,099,199,845 270,622,679 (121,187,589) 1,248,634,935 For the fiscal year ended June 30, 2011, the School System transferred $121,096,039 from construction in progress to depreciable capital assets. Depreciation expense was charged to governmental functions as follows: Instruction $ 29,443,919 Support Services Pupil Services 27,215 Educational Media 41,457 Business Administration 2,103,050 Maintenance and operation of facilities 86,953 Student transportation 3,265,435 Total $ 34,968,029 37 H. Long-term Debt Capital Leases The School System has entered into various equipment lease agreements. 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 inception. In 2008, the School System entered into a lease agreement for the purchase of various capital assets in the amount of $20,000,000. These leases were advanced funded. As of June 30, 2011, all the advance funds have been used to purchase capitalized assets. The capital assets acquired through capital leases are as follows: Buses Asset Governmental Activites $ 11,136,550 Less: Accumulated depreciation Net Capital Assets (4,957,360) $ 6,179,190 The following is a schedule of the future minimum lease payments under capital leases and the total present value: Fiscal Year Ending Total minimum payments 2012 2013 2014 2015 2016 2017-2020 Governmental Activites 2,129,354 2,129,354 1,470,357 1,470,357 1,469,917 2,300,268 10,969,607 Less: Amount representing interest (1,287,602) Present value of minimum payments $ 9,682,005 Intergovernmental Agreement Over the years, the City of Atlanta has issued various annual general obligation bonds and general obligation refunding bonds on behalf of the School System. The debt service for the bonds has been funded through the School System's bonded debt portion of the annual tax levy. The maturity date for the bonds is December 21, 2027. The bonded debt portion of property taxes collected by the City on behalf of the School System is retained by the City and used to pay the annual debt service on the outstanding bonds. The debt service payments are calculated using assumptions and estimates based on information available. As of June 30, 2011, $1,104,717 is available and held by the City. General Obligation Bonds currently outstanding at the City of Atlanta on behalf of the School System are as follows: 38 Purpose Governmental activities Interest Rate 3-5% Amount $18,439,000 In prior fiscal years, the City of Atlanta School System defeased certain bonds by placing funds 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 System's basic financial statements. At June 30, 2011, $58,865,000 of bonds is outstanding and is considered defeased. Education Reform Success, Inc. (COPS) In October 2006, ERS issued certificates of participation (COPS) on behalf of the School System in the amount of $10,115,000. The proceeds from the certificates were used to finance the renovations and improvements to the Instructional Service Center. In June 2011, ERS issued COPS on behalf of the School System in the amount of $104,415,000, (Series 2011A, $72,460,000) and (Series 2011B, $31,955,000). The proceeds from the certificates will be used to finance the construction and or renovation of North Atlanta High School. Interest rates varies (5.457% - 5.657% for Series 2011A and 2% - 5% for Series 2011B) and payments are due on March 1 and September 1 of each year until maturity (maturity dates for series 2011A is March 1, 2027 and March 1, 2017 for Series 2011B). I. Long-Term Obligations Changes in long-term obligations during the fiscal year ended June 30, 2011, were as follows: Governmental activities: Long-term debt Capital leases Intergovernmental agreement- City of Atlanta ERS, Inc (COPS, Series 2006/2007) ERS, Inc (COPS, Series 2011A) ERS, Inc (COPS, Series 2011B) Unamortized premium 2011B Total long-term debt Beginning Balance Additions Deductions Ending Balance Amounts Due within One Year $ 13,998,496 $ - $ (4,316,491) $ 9,682,005 $ 1,778,535 19,461,875 8,995,000 42,455,371 72,460,000 31,955,000 3,097,709 107,512,709 (1,022,875) (595,000) - (5,934,366) 18,439,000 8,400,000 72,460,000 31,955,000 3,097,709 144,033,714 1,040,875 620,000 - 3,439,410 Other long-term liabilities Compensated absences Contingent legal liabilitites Contingent liabilities - sales tax refund Contingent liabilities - SPLOST refund Workers' compensation Total other long-term liabilities 5,803,613 2,591,155 2,526,157 29,064,201 6,382,039 46,367,165 2,287,003 531,972 - 5,001,577 3,767,909 11,588,461 (2,490,383) (1,811,151) (2,526,157) (34,065,778) (2,891,948) (43,785,417) 5,600,233 1,311,976 7,258,000 14,170,209 2,594,285 557,004 - 2,106,908 5,258,197 Total long-term obligations $ 88,822,536 $ 119,101,170 $ (49,719,783) $ 158,203,923 $ 8,697,607 Note: The General Fund has been typically used to liquidate the liability for compensated absences, contingent liabilities and worker's compensation. 39 The Contingent liabilities amount of $34,068,778 for SPLOST refund is now reflected at the governmental fund level as due to other governments. This amount ($34,065,778) represents amounts due to Fulton County Board of Education for excess ELOST III proceeds received by APS from the Georgia Department of Revenue which Fulton County Board of Education was legally entitled to. At June 30, 2011, payments due by fiscal year, which includes principal and interest for these items, are as follows: Fiscal Year Ending 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027 Total Principal and Interest Intergovernmental Agreements Capital Leases City of Atlanta Principal Interest Principal Interest 1,778,535 1,841,220 1,247,378 1,293,514 1,340,902 2,180,456 $9,682,005 350,819 288,134 222,979 176,843 129,015 119,812 $1,287,602 1,040,875 1,086,875 1,143,625 1,264,500 1,325,750 6,708,750 5,528,625 340,000 $18,439,000 875,446 832,790 787,004 736,419 680,609 2,130,391 577,686 7,013 $6,627,358 Fiscal Year Ending 2012 2013 2014 2015 2016 2017-2021 2022-2026 2027 Total Principal and Interest Education Reform Success, Inc. Certificates of Participation 2006/2007 Principal Interest Education Reform Success, Inc. Certificates of Participation 2011A Principal Interest 620,000 346,878 645,000 321,275 670,000 294,640 700,000 266,972 730,000 238,066 4,110,000 713,990 925,000 38,198 - - $8,400,000 $2,220,019 47,460,000 25,000,000 $72,460,000 2,775,631 4,029,142 4,029,142 4,029,142 4,029,142 20,145,710 18,920,071 1,414,250 $59,372,230 Education Reform Success, Inc. Certificates of Participation 2011B Principal Interest 5,920,000 6,040,000 6,340,000 6,660,000 6,995,000 $31,955,000 978,326 1,420,150 1,301,750 999,750 682,750 349,750 $5,732,476 40 J. Inter-fund Receivables and Payables Inter-fund receivables and payables net balances as of June 30, 2011 are as follows: Due from other funds Due to other funds Governments Funds General Fund $ - $ 17,159,617 Capital Projects Fund 29,305,618 - Education Reform Success 150,317 Nonmajor Governmental Funds - 8,121,276 Business- Type Fund Food Service Fund - 4,175,042 $ 29,455,935 $ 29,455,935 During the course of its operations, the School System makes transfers between funds to finance operations, provide services and acquire assets. To the extent that certain transfers among funds had not been received as of fiscal year-end, balances of inter-fund amounts receivable or payable have been recorded. It is management's intent to repay inter-fund balances within the next fiscal year. K. Inter-fund Transfers Transfers within the governmental funds for the fiscal year ended June 30, 2011 are as follows: Governmental funds: General Fund Capital Projects Fund Education Reform Success - Capital Projects Fund Transfers In Transfers Out $ 2,824 (10,966,449) 10,000,000 966,449 (2,824) $ 10,969,273 $ (10,969,273) Transfers are used to move local funds from the General Fund to Capital Projects Funds to fund construction projects. L. Risk Management The School System is exposed to various risks of losses related to torts, theft of, damage to, and destruction of assets; errors and omissions; injuries to employees and natural disasters. The School System is self-insured for workers' compensation claims and unemployment compensation. The School System purchases commercial insurance in amounts deemed prudent by management for all other risks of loss. Settled claims have not yet exceeded purchased commercial insurance coverage in any of the past three years. 41 Unemployment Compensation: The School System is self-insured for unemployment compensation. The State bills the School System quarterly for the outstanding claims and the School System pays the claims at that time. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: Beginning of Fiscal Year Liability Claims and Changes in Estimates Claims Paid End of Fiscal Year Liability Fiscal year 2010 $ -$ 519,930 $ (519,930) $ - Fiscal year 2011 $ -$ 657,496 $ (657,496) $ - Workers' Compensation: The School System is fully self-insured for workers' compensation claims of its employees. The School System accounts for claims within the General Fund with expenditures and liabilities being reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. An accrued liability for the estimated costs of claims and related settlement costs incurred but not paid and/or reported as of fiscal year-end is reported on the governmental activities financial statements. The calculation of the present value of future workers' compensation liabilities is based on a discount rate of 3.5%. Changes in the claims liability during the last two fiscal years are as follows: Balance at Beginning of Fiscal Year Claims and Changes in Estimates Claim Payments Balance at End of Fiscal Year Fiscal year 2010 $ 7,826,556 $ 1,131,414 $ (2,575,931) $ 6,382,039 Fiscal year 2011 $ 6,382,039 $ 3,767,909 $ (2,891,948) $ 7,258,000 M. Nonmonetary Transactions The School System received from the United States Department of Agriculture through the Georgia Department of Education approximately $1,230,789 in donated food commodities for its lunchroom programs. The federally assigned value of these commodities is reflected as revenue and expense in the Food Services Fund financial statements. N. On-behalf Payments for Fringe Benefits The School System has recognized revenues and expenditures in the amount of $797,858 for health insurance and pension costs paid by the Georgia Department of Education to the State Merit System of Personnel Administration for non-certified personnel on the School System's behalf. 42 O. Retirement Plans Teachers Retirement System of Georgia (TRS) Plan Description Substantially all teachers, administrative and clerical personnel employed by local school systems of the State of Georgia are covered by the Teachers Retirement System of Georgia (TRS), which is a cost sharing multiple employer public employee retirement system sponsored by the State of Georgia. Most School Systems' employees participate in TRS. TRS provides service retirement, disability retirement and survivor's benefits for its members. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service. Early retirement benefits are reduced by the lesser of 1/12 of 7% of each month the member is below age 60, or by 7% of each year or fraction thereof by which the member has less than 30 years of service. Normal retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death. Retirement benefits also include death and disability benefits whereby the disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The benefit is based on member's creditable service (minimum of 10 years) and compensation up to the date of death. The TRS Board of Trustees has the authority to establish and amend benefit provisions of the pension plan under Title 47, chapter 3. TRS issues a publicly available financial report that includes financial statements and required supplementary information for the Plan. That report may be obtained by calling 404-352-6500 or by accessing their website at www.trsga.com. Funding Policy Employees of the School System who are covered by TRS are required to pay 5.25% of their gross earnings to TRS. The School System makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees as advised by their independent actuary. The employer contribution rate is 9.74% at June 30, 2011. Total actual and required contributions were as follows (the School System contributed 100% of the annual required contribution): 2011 2010 2009 School System Employees $ 32,515,502 18,178,891 $ 50,694,393 $ 32,863,759 17,724,959 $ 50,588,718 $ 30,872,725 16,655,525 $ 47,528,250 43 City of Atlanta General Employees Pension Plan Plan Description All permanent employees of the School System who are not covered under the TRS are eligible to participate in the City of Atlanta General Employees' Pension Plan (the "Plan"). In addition, certain School System employees employed prior to July 1, 1979, also participate in the Plan. The Plan provides retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. The Plan is an agent multiple-employer pension plan administered by a Board of Trustees, which includes the Mayor of the City of Atlanta or designee, the City's Chief Financial Officer, one member of City Council, one member of the School System, one member elected by eligible employees of the City, one member elected by eligible employees of the School System, one member elected by retired employees of the School System and one member elected by retired employees of the City. The Board of Trustees has the authority to establish and amend the benefit provisions of the Plan. On December 12, 2005, the School System adopted the following changes to the Plan: 1. 10 year vesting; 2. 2.5% benefit multiplier (capped at 80%); and 3. Unreduced retirement at 30 years of service regardless of age. The Plan issues a publicly available financial report that includes financial statements and required supplementary information for the Plan. The report may be obtained by writing or by calling the Plan at: City of Atlanta General Employees Pension Plan 68 Mitchell Street Atlanta, GA Telephone Number: (404) 330-6000 The Plan provides retirement benefits that, initially, are 2% of the employee's highest average monthly base compensation over any 36-month period. A participant may retire at age 65 or, after 15 years of service, at age 60. Cost-of-living increases are awarded annually, up to a 3% maximum increase. Partial vesting percentages based on years of creditable service and provisions for early retirement are included in the Plan. Benefits also may be payable at termination, death, or disability. The School System's membership in the Plan as of July 1, 2010 is as follows: Active employees Inactive members Retirees and beneficiaries Total membership 871 38 2,467 3,376 Method Used to Value Investments Investments are stated at fair value. Fair value of Plan assets at July 1, 2010 was $105,573,290. 44 Funding Policy and Annual Pension Cost The School System's funding policy is to contribute a percentage of covered employee payroll as developed in the actuarial valuation for the Plan. Obligations to contribute to the Plan are established by the Board, subject to minimum financing standards established by the State of Georgia. Active participants are required to contribute 7% of pay (8% if participant has a covered beneficiary or is married). The School System's contribution percentage is the actuarial determined amount necessary to fund Plan benefits after consideration of employee contributions. The actuarial determined contribution amount is the sum of the annual normal cost (determined under the entry age normal actuarial cost method) and the amortization of the unfunded actuarial accrued liability as a level percentage of future payrolls (over 40 years from January 1, 1979). The remaining amortization period is closed 22 years remaining as of July 1, 2010. The Plan's annual pension cost for the current fiscal year, based on actuarial valuations performed as of July 1, 2010 and related information for the Plan is as follows: Contribution rates as a percent of covered payroll: Employee Employer 7.0% or 8.0% 8.00% Annual required contribution Employer contributions made Actuarial valuation date Actuarial cost method Amortization method Actuarial assumptions: Investment rate of return Projected salary increases: Inflation Merit or seniority and productivity Post retirement benefit increases $37,216,555 $39,000,000 7/1/2010 Entry age normal Level % of payroll 8.0% per year 3.0% per year 4.5% per year N/A The asset valuation method used is the actuarial value from the prior year plus net new money plus 20% of the asset appreciation/depreciation for the current year and each of the prior four years. Three-Year Trend Information is as follows: 45 Year 2009 2010 2011 Annual Pension Cost (APC) $39,570,397 $43,560,100 $37,058,594 % of APC Contributed 106% 104% 105% Net Pension (Asset)/Obligation ($7,272,550) ($9,212,450) ($11,153,856) Net Pension Asset - The School System's actuarially required contribution, pension cost and increase in the beginning net pension asset for the fiscal year ended June 30, 2011, were computed as follows: Actuarially required contribution Interest on net pension asset ARC adjustment Annual pension cost $ 37,216,555 (736,996) 579,035 37,058,594 Actual contributions made (39,000,000) Increase in net pension asset 1,941,406 Net pension asset, June 30, 2010 9,212,450 Net pension asset, June 30, 2011 $ 11,153,856 Plan Funded Status The School System's funding status based upon the most recent actuarial valuation is as follows: Actuarial Valuation Date 7/1/2010 Actuarial Value of Assets* (a) $114,615,676 Actuarial Accrued Liability (AAL) Entry Age (b) $669,032,859 Unfunded AAL (UAAL) (b-a) $554,417,183 Funded Ratio (a/b) 17.13% Covered Payroll (c) $26,304,364 UAAL use as a Percentage of Covered Payroll ((b-a)/c) 2107.70% The schedule of funding progress, presented as RSI following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future, and actuarially determined amounts are subject to 46 continual revision as results are compared to past expectations and new estimates are made about the future. Actuarial calculations reflect a long-term perspective. Calculations are based on the substantive plan in effect as of July 1, 2010. P. Post-Employment Benefits Georgia Retiree 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 postemployment 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 Georgia 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). The Georgia Department of Community Health issues a publicly available financial report that includes financial statements and required supplementary information for the School OPEB Fund. That report may be obtained from the Georgia Department of Community Health at 2 Peachtree Street, Atlanta, Georgia 30303. 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 twenty-five percent (25%) of the cost of health insurance coverage. Participating employers are statutorily required to contribute in accordance with the employer contribution rate established by the Board. This contribution rate is established to fund all benefits due under the health insurance plans for both the 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 on-going 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 employer contribution rates for the combined active and retiree plans for the fiscal year ended June 30, 2011, were as follows: Certified Employees July 2010- April 2011 May 2011 June 2011 21.955% of state-based salaries 14.492% of state-based salaries Non-Certificated Employees Non-Certificated Employees July 2010 November 2010 - $162.72 per month December 2010 June 2011 - $218.20 per month 47 The School System's contribution to the health insurance plans for the fiscal year ended June 30, 2011, June 30, 2010, and June 30, 2009 were $43,496,218, $38,330,627, $30,600,143 respectively, and which equaled the required contribution/annual OPEB cost. Q. Commitments and Contingencies Construction Commitments The School System has active construction projects as of June 30, 2011. The projects relate to construction, renovation of school buildings and other projects. At fiscal year-end, the School System's commitments with contractors were $26,896,301. Litigation and Other Contingencies The School System is a defendant in various lawsuits, which arose, in the ordinary course of its activities. The School System believes its liability in these matters is $1,311,976. Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. The School System believes that such disallowances, if any, will be immaterial to its overall financial position. Encumbrances The School System's Board reauthorized $16 million to fund encumbrances that were outstanding as of June 30, 2011. The actual amount was approximately $13.8 million and was used for Instruction and Support services expenditures. R. New Accounting Pronouncements GASB Statement No. 54 was implemented during the current fiscal year. GASB 54 was issued in February 2009 to classify the various components of fund balance and clarify the use of governmental fund types. The various components of fund balance are designed to indicate the extent to which the government is bound to honor constraints on the specific purposes for which amounts in the fund can be spent. S. Pollution Remediation Obligations GASB Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, establishes accounting and financial reporting criteria for liabilities that address current or potential detrimental effects of existing pollution by participating in pollution remediation activities. When one of five obligating events identified by the GASB occurs, the components of the expected pollution remediation outlays must be estimated and a determination made whether the outlays should be accrued as a liability or capitalized when goods and services are acquired, as appropriate. Pollution remediation liabilities must be measured based on the pollution remediation outlays expected to be incurred to settle these liabilities. It must be based on "reasonable and supportable" assumptions of future events that may affect the eventual settlement of the liability, and should be measured and reported at current value. The current value of the liability should be based 48 on applicable federal, state or local laws or regulations that have been approved, regardless of their effective date and the technology expected to be used for the cleanup. Outlays for pollution remediation obligations should be recognized as liabilities if goods and services used for pollution remediation activities are liquidated with expendable available financial resources (modified accrual accounting). However, pollution remediation outlays should be capitalized in the government-wide or proprietary fund statements when goods and services are acquired for certain specific purposes; these amounts are recorded as expenditures at the fund level. As of June 30, 2011, the School System was the responsible party in the remediation of mold removal, asbestos abatement, expired chemical disposal, paint disposal, tire disposal and air quality testing. A site assessment and preliminary evaluation of required remediation indicated that the amount of liability is immaterial as of June 30, 2011 and therefore, not recorded in the governmental activities statement of net assets. The potential liability is deemed immaterial at this time to record to the School System's financial statements. APS paid $619,261 for current financial fiscal year remediation activities. T. Subsequent Event On November 8, 2011, SPLOST IV referendum was approved. It is estimated that SPLOST IV will generate approximately $520 million for APS that will fund numerous Capital Improvement projects and Certificates of Participation debt liquidation. As noted in the Management Discussion and Analysis section, the School System has been involved in a court case related to the Tax Allocation Districts (TAD). The educational ad valorem tax collections specific to the Perry Bolton and Beltline districts have not been recognized as revenues (although the School System had received $25,022,211 prior to June 30, 2011 from the Atlanta Development Authority and the City of Atlanta) in the School System's financial statement at the governmental fund level (in the General Fund) nor in the government-wide level until a summary judgment in favor of APS was issued. After two appeals (which had been outstanding during the last two fiscal years and up to November 14, 2011), a summary judgment was issued in favor of the School System on November 15, 2011. The summary judgment cleared the way for the School System to recognize these balances as revenues at the government-wide level as of June 30, 2011. However, since the appeals surrounding this revenue were still outstanding past thirty (30) days of June 30, 2011 and the summary judgment in favor of the School System occurred 30 days subsequent to June 30, 2011, the School System did not recognize the revenue at the governmental fund level (in the General Fund) as of June 30, 2011 and will recognize the balance of the associated deferred revenue in the General Fund during Fiscal Year 2012. 49 This page intentionally left blank 50 REQUIRED SUPPLEMENTARY INFORMATION Atlanta Independent School System GENERAL FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (GAAP Budgetary Basis) For the Fiscal Year Ended June 30, 2011 REVENUES Local taxes $ State revenues Federal revenues Investment income Facility rental fees Tuition charges Charges for services Other Total revenues EXPENDITURES Current: Instruction 107100SSaBlary 107100NNoSn-Salary Support Services: Pupil services 107200SSaBlary 107200NNoSn-Salary Improvement of instructional services 107201SSaBlary 107201NNoSn-Salary Educational media 107202SSaBlary 107202NNoSn-Salary General administration 107203SSaBlary 107203NNoSn-Salary School administration 107204SSaBlary 107204NNoSn-Salary Business administration 107205SSaBlary 107205NNoSn-Salary Maintenance and operation of facilities 107206SSaBlary 107206NNoSn-Salary Student transportation 107207SSaBlary 107207NNoSn-Salary Central support 107208SSaBlary 107208NNoSn-Salary Other support services 107209SSaBlary 107209NNoSn-Salary Capital Outlays 107400SSaBlary 107400NNoSn-Salary Debt Service: Principal Interest Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets Transfers in Transfers out Net change in fund balances Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR $ Budgeted Amounts Original (1) Final (1) (2) 459,979,326 111,000,000 5,000,000 1,900,000 1,050,000 100,000 50,000 9,946,562 589,025,888 441,529,728 125,543,783 11,509,999 1,900,000 1,050,000 100,000 50,000 11,246,562 592,930,072 274,008,666 204,792,518 69,216,148 29,261,108 20,377,160 8,883,948 23,860,524 11,968,173 11,892,351 9,489,951 6,834,523 2,655,428 11,452,625 6,307,774 5,144,851 33,599,600 25,257,403 8,342,197 14,240,866 9,029,793 5,211,073 63,497,886 20,782,892 42,714,994 12,625,931 8,629,731 3,996,200 71,599,419 9,653,026 61,946,393 1,580,496 80,262 1,500,234 38,011,313 - 38,011,313 5,797,503 - 5,797,503 589,025,888 - - - 109,727,217 109,727,217 284,202,983 266,760,694 17,442,289 30,080,933 25,043,729 5,037,204 22,211,611 15,842,747 6,368,864 9,580,855 8,781,958 798,897 11,555,614 8,618,796 2,936,818 33,415,095 31,897,596 1,517,499 24,526,435 20,875,509 3,650,926 64,900,626 22,422,146 42,478,480 13,622,483 10,348,613 3,273,870 74,328,148 52,110,568 22,217,580 1,908,824 92,224 1,816,600 49,076,351 - 49,076,351 5,797,503 - 5,797,503 625,207,461 (32,277,389) - (32,277,389) 109,727,217 77,449,828 Actual 445,986,671 127,235,844 10,747,543 124,833 783,989 31,492 670,918 6,230,668 591,811,958 342,158,303 285,245,537 56,912,766 24,014,862 16,566,667 7,448,195 18,465,663 12,609,802 5,855,861 9,437,280 8,692,304 744,976 11,488,177 7,004,356 4,483,821 31,429,973 30,765,348 664,625 16,025,431 13,069,609 2,955,822 92,797,603 50,782,559 42,015,044 24,258,790 21,318,951 2,939,839 31,499,062 10,606,657 20,892,405 1,667,013 99,118 1,567,895 - 6,771,854 5,339,366 1,432,488 610,014,011 (18,202,053) 706,016 2,824 (10,966,449) (28,459,662) 109,727,217 81,267,555 (1) Original and Final budget amounts do not include budgeted revenues or expenditures of various principal accounts. (2) Property taxes and state fund revenues related to charter schools are budgeted in the Instruction Function. Variance with Final Budget (Over ) Under (4,456,943) (1,692,061) 762,456 1,775,167 266,011 68,508 (620,918) 5,015,894 1,118,114 (57,955,320) (18,484,843) (39,470,477) 6,066,071 8,477,062 (2,410,991) 3,745,948 3,232,945 513,003 143,575 89,654 53,921 67,437 1,614,440 (1,547,003) 1,985,122 1,132,248 852,874 8,501,004 7,805,900 695,104 (27,896,977) (28,360,413) 463,436 (10,636,307) (10,970,338) 334,031 42,829,086 41,503,911 1,325,175 241,811 (6,894) 248,705 49,076,351 - 49,076,351 (974,351) (5,339,366) 4,365,015 15,193,450 (14,075,336) (706,016) (2,824) 10,966,449 (3,817,727) - (3,817,727) 51 Actuarial Valuation Date 1/1/2005 1/1/2006 7/1/2007 7/1/2008 7/1/2009 7/1/2010 Actuarial Value of Assets* (a) $102,301,954 $116,866,067 $133,058,241 $150,876,105 $112,295,208 $114,615,676 Atlanta Independent School System Required Supplementary Information Schedule of Funding Progress Actuarial Accrued Liability (AAL) Entry Age (b) $580,470,790 $600,055,443 $643,301,615 $655,110,071 $644,788,188 $669,032,859 Unfunded AAL (UAAL) (b-a) $478,168,836 $483,189,376 $510,243,374 $504,233,966 $532,492,980 $554,417,183 Funded Ratio (a/b) 17.62% 19.48% 20.68% 23.03% 17.42% 17.13% Covered Payroll (c) $40,366,756 $26,185,568 $29,105,414 $28,272,933 $29,404,892 $26,304,364 UAAL use as a Percentage of Covered Payroll ((b-a)/c) 1184.56% 1845.25% 1753.09% 1783.45% 1810.90% 2107.70% See Note O to financial statements for actuarial assumptions. 52 OTHER SUPPLEMENTARY INFORMATION NONMAJOR GOVERNMENTAL FUNDS Combining and Individual Fund Statements and Schedules: Combining Balance Sheet Nonmajor Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds Schedules of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Special Revenue Funds: Title I Fund Title II Fund Title VI-B Fund Lottery Fund Other Federal Programs Fund Other Special Projects Fund Schedules of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Capital Projects Fund Combining Statement of Changes in Assets and Liabilities Agency Fund NONMAJOR GOVERNMENTAL FUNDS Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenues that are legally restricted for specific purposes or committed to expenditures for specified purposes other than debt services or capital projects. The School System's Special Revenue Funds have been established primarily on the basis of program purpose and include the following funds and primary funding sources: Title I Fund was established to account for federal grant funds passed through the Georgia Department of Education to provide remedial education in the areas of reading and math and to provide a special education program for children who are physically handicapped. Title II Fund was established to account for federal grant funds passed through the Georgia Department of Education, for the purpose of improving teacher quality and increasing the number of highly qualified teachers, para-professionals, and principals. Title VI-B Fund was established to account for federal grant funds passed through the Georgia Department of Education, for the purpose of providing special education programs for children in pre-kindergarten through the twelfth grade. Lottery Fund was established to account for State of Georgia lottery funds passing through the State of Georgia Department of Education for various programs as established by the State. Other Federal Programs Fund was established to account for other federal funds for which separate presentation is not considered necessary. Other Special Projects Fund was established to account for other state and local funds for which separate presentation in not considered necessary. Atlanta Independent School System Combining Balance Sheet Non-major Governmental Funds June 30, 2011 Assets: Due from other governments Due from other funds Total Assets Title I Title II Special Revenue Funds Title VI-B Lottery Other Federal Programs Other Special Projects Total $ 9,329,325 - $ 9,329,325 969,030 - 969,030 2,864,774 - 2,864,774 74,722 74,722 895,615 - 895,615 526,834 $ 5,848,669 6,375,503 14,585,578 5,923,391 20,508,969 Liabilities: Due to other funds $ Deferred Revenue Due to other governments Total Liabilities $ Fund Balances: Restricted $ Assigned Total Fund Balance TOTAL LIABILITIES AND FUND BALANCES $ 9,329,325 - 9,329,325 - 9,329,325 969,030 - 969,030 2,864,774 - 2,864,774 - - - - - - 969,030 2,864,774 5,793 5,793 68,929 - 68,929 74,722 881,538 - 881,538 14,077 - 14,077 895,615 - $ 89,000 - 89,000 14,044,667 89,000 5,793 14,139,460 4,076,142 $ 2,210,361 6,286,503 4,159,148 2,210,361 6,369,509 6,375,503 $ 20,508,969 53 REVENUES State Federal Other Total Revenues EXPENDITURES Current Instruction Support services Pupil services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Other support services Nutrition Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES(USES) Transfers in Transfers out Total Other Financing Sources(Uses) Net change in Fund Balances Fund Balances, Beginning of Fiscal Year FUND BALANCES, End of Fiscal Year Atlanta Independent School System Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Governmental Funds For the Fiscal Year Ended June 30, 2011 Title I Title II Special Revenue Funds Title VI-B Lottery Other Federal Programs Other Special Projects Total $ - 48,877,694 - $ 48,877,694 5,925,329 - 5,925,329 13,550,371 - 13,550,371 2,599,029 45,169 - 2,644,198 4,351,921 - 4,351,921 431,038 548,831 7,227,628 8,207,497 $ 3,030,067 73,299,315 7,227,628 83,557,010 $ 18,132,442 5,294,305 21,148,469 1,546,813 264,183 393,118 436,123 158,286 1,503,955 - $ 48,877,694 - $ - - - - $ - 2,605,362 1,668,180 1,510,575 141,212 - 5,925,329 5,006,161 6,220,851 1,253,297 16,046 56,195 997,821 - 13,550,371 2,574,076 28,334 2,179 3,249 - 2,607,838 - - 36,360 - - 4,853 - - - - - 4,853 - - 41,213 - - 27,716 - - 68,929 1,050,285 172,166 1,914,011 9,590 117,587 7,686 - 78,018 - 1,036,970 15,657 4,401,970 2,350,646 1,076,249 5,526,237 1,110,206 1,139,495 267,388 54,069 196,159 1,823,438 112,307 - 13,656,194 31,718,972 14,460,085 31,354,768 9,590 2,790,652 1,411,364 716,701 54,069 1,708,121 2,122,936 2,656,481 15,657 89,019,396 (50,049) (5,448,697) - - - (4,853) - (4,853) (5,462,386) 4,853 (4,853) - (50,049) 64,126 (5,453,550) 11,740,053 (5,462,386) 11,831,895 14,077 6,286,503 $ 6,369,509 54 Atlanta Independent School System All Special Revenue Funds Combined Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended June 30, 2011 REVENUES State revenues $ Federal revenues Local revenues Other local revenues Total revenues EXPENDITURES Current: Instruction Salary Non-Salary Support Services: Pupil services Salary Non-Salary Improvement of instructional services Salary Non-Salary Educational media Salary Non-Salary General administration Salary Non-Salary School administration Salary Non-Salary Business administration Salary Non-Salary Maintenance and operation of facilities Salary Non-Salary Student transportation Salary Non-Salary Central support Salary Non-Salary Other support services Salary Non-Salary Nutrition Salary Non-Salary Capital Outlays Salary Non-Salary Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Net change in fund balances Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR $ Budgeted Amounts Original Final 3,290,375 105,837,766 11,871,693 120,999,834 6,485,399 130,011,318 1,347,586 20,256,048 158,100,351 47,914,243 13,865,926 34,048,317 9,182,214 3,456,667 5,725,547 27,667,797 13,185,520 14,482,277 - 5,328,642 1,918,714 3,409,928 18,194,355 10,000 18,184,355 1,115,088 1,076,355 38,733 35,789 8,125 27,664 5,970,545 614,497 5,356,048 1,080,504 501,369 579,135 4,487,855 182,930 4,304,925 - 22,802 - 22,802 120,999,834 - - 11,831,895 11,831,895 60,328,255 23,068,452 37,259,803 14,374,939 5,464,264 8,910,675 59,144,384 22,535,614 36,608,770 9,776 9,026 750 5,417,352 1,455,654 3,961,698 1,751,788 999,922 751,866 1,160,219 614,809 545,410 1,085,270 41,445 1,043,825 6,758,084 594,968 6,163,116 3,314,189 1,081,211 2,232,978 4,697,139 1,496,849 3,200,290 16,800 - 16,800 22,156 - 22,156 158,080,351 20,000 (20,000) - 11,831,895 11,831,895 Actual Variance with Final Budget (Over ) Under 3,030,067 73,299,315 7,227,628 83,557,010 3,455,332 56,712,003 1,347,586 13,028,420 74,543,341 31,718,972 17,910,868 13,808,104 14,460,085 7,625,688 6,834,397 31,354,768 17,898,900 13,455,868 9,590 9,590 - 2,790,652 914,521 1,876,131 1,411,364 1,267,872 143,492 716,701 503,944 212,757 54,069 317 53,752 1,708,121 954,199 753,922 2,122,936 606,482 1,516,454 2,656,481 1,202,149 1,454,332 15,657 - 15,657 - 89,019,396 (5,462,386) 4,853 (4,853) (5,462,386) 11,831,895 6,369,509 28,609,283 5,157,584 23,451,699 (85,146) (2,161,424) 2,076,278 27,789,616 4,636,714 23,152,902 186 (564) 750 2,626,700 541,133 2,085,567 340,424 (267,950) 608,374 443,518 110,865 332,653 1,031,201 41,128 990,073 5,049,963 (359,231) 5,409,194 1,191,253 474,729 716,524 2,040,658 294,700 1,745,958 1,143 - 1,143 22,156 22,156 69,060,955 5,482,386 (4,853) (15,147) 5,462,386 - 5,462,386 55 Atlanta Independent School System SPECIAL REVENUE FUND - TITLE I FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended June 30, 2011 REVENUES Federal revenues $ Total revenues EXPENDITURES Current: Instruction 14710S0aSlaBry 14710N0oNnS-Salary Support Services: Pupil services 14720S0aSlaBry 14720N0oNnS-Salary Improvement of instructional services 14720S1aSlaBry 14720N1oNnS-Salary General administration 14720S3aSlaBry 14720N3oNnS-Salary School administration 14720S4aSlaBry 14720N4oNnS-Salary Business administration 14720S5aSlaBry 14720N5oNnS-Salary Student transportation 14720N7oNnS-Salary Central support 14720S8aSlaBry 14720N8oNnS-Salary Other support services 14720S9aSlaBry 14720N9oNnS-Salary Total Expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR $ Budgeted Amounts Original Final Actual Variance with Final Budget (Over ) Under 79,172,451 79,172,451 84,723,004 84,723,004 48,877,694 48,877,694 35,845,310 35,845,310 30,034,558 3,233,991 26,800,567 4,071,777 1,906,889 2,164,888 16,271,449 9,507,471 6,763,978 4,554,101 1,383,819 3,170,282 18,184,355 - 18,184,355 1,094,766 1,076,355 18,411 4,499,911 4,499,911 119,849 94,172 25,677 341,685 52,265 289,420 79,172,451 - - - - 36,160,282 9,825,405 26,334,877 5,884,975 3,449,488 2,435,487 31,846,065 16,895,240 14,950,825 2,695,120 823,236 1,871,884 397,013 175 396,838 624,015 614,809 9,206 4,675,574 4,675,574 103,360 90,405 12,955 2,336,600 1,238,650 1,097,950 84,723,004 - - - - 18,132,442 7,579,593 10,552,849 5,294,305 3,059,833 2,234,472 21,148,469 14,938,154 6,210,315 1,546,813 638,817 907,996 264,183 128,377 135,806 393,118 393,118 - 436,123 436,123 158,286 130,955 27,331 1,503,955 1,088,319 415,636 48,877,694 - - - - 18,027,840 2,245,812 15,782,028 590,670 389,655 201,015 10,697,596 1,957,086 8,740,510 1,148,307 184,419 963,888 132,830 (128,202) 261,032 230,897 221,691 9,206 4,239,451 4,239,451 (54,926) (40,550) (14,376) 832,645 150,331 682,314 35,845,310 - - - - 56 Atlanta Independent School System SPECIAL REVENUE FUND - TITLE II FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended June 30, 2011 REVENUES Federal revenues $ Total revenues EXPENDITURES Current: Instruction 167100SSalBary 167100NNoSn-Salary Support Services: Pupil services 167200SSalBary Improvement of instructional services 167201SSalBary 167201NNoSn-Salary Central support 167208SSalBary 167208NNoSn-Salary Total Expenditures Excess (deficiency) of revenues over (under) expenditures Budgeted Amounts Original Final Actual Variance with Final Budget (Over ) Under 4,614,044 4,614,044 12,342,870 5,925,329 12,342,870 5,925,329 6,417,541 6,417,541 2,308,842 1,999,947 308,895 - 1,976,803 500,374 1,476,429 328,399 - 328,399 4,614,044 - 5,404,301 4,103,157 1,301,144 2,605,362 2,299,641 305,721 - 1,668,180 - 1,668,180 6,502,731 1,996,979 4,505,752 1,510,575 116,349 1,394,226 435,838 52,923 382,915 141,212 58,777 82,435 12,342,870 5,925,329 - - 2,798,939 1,803,516 995,423 (1,668,180) (1,668,180) 4,992,156 1,880,630 3,111,526 294,626 (5,854) 300,480 6,417,541 - Net change in fund balances Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR - - - - - - - - $ - - - - 57 Atlanta Independent School System SPECIAL REVENUE FUND - TITLE VI-B FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended June 30, 2011 REVENUES State revenues $ Federal revenues Total revenues EXPENDITURES Current: Instruction 15710S0SalBary 15710N0NonS-Salary Support Services: Pupil services 15720S0SalBary 15720N0NonS-Salary Improvement of instructional services 15720S1SalBary 15720N1NonS-Salary General administration 15720S3SalBary 15720N3NonS-Salary Business administration 15720S5SalBary Maintenance and operation of facilities 15720S6SalBary 15720N6NonS-Salary Student transportation 15720S7SalBary 15720N7NonS-Salary Central support 15720N8NonS-Salary Total Expenditures Excess (deficiency) of revenues over (under) expenditures Budgeted Amounts Original Final Actual Variance with Final Budget (Over ) Under 400,000 18,162,327 18,562,327 400,000 18,966,099 19,366,099 13,550,371 13,550,371 400,000 5,415,728 5,815,728 10,460,583 5,594,828 4,865,755 4,612,656 1,205,805 3,406,851 2,354,088 1,619,021 735,067 207,708 185,639 22,069 - 7,680 7,680 - 918,844 614,497 304,347 768 768 18,562,327 - 9,588,755 4,422,300 5,166,455 7,165,099 1,369,928 5,795,171 1,292,977 1,012,232 280,745 108,505 71,615 36,890 - 44,000 40,000 4,000 1,166,763 594,968 571,795 - 19,366,099 - 5,006,161 3,852,568 1,153,593 6,220,851 1,773,094 4,447,757 1,253,297 1,197,428 55,869 16,046 16,046 - 56,195 56,195 - 997,821 954,172 43,649 - 13,550,371 - 4,582,594 569,732 4,012,862 944,248 (403,166) 1,347,414 39,680 (185,196) 224,876 92,459 55,569 36,890 (56,195) (56,195) 44,000 40,000 4,000 168,942 (359,204) 528,146 - 5,815,728 - Net change in fund balances Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR - - $ - - - - - - - - - - 58 Atlanta Independent School System SPECIAL REVENUE FUND -LOTTERY FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended June 30, 2011 REVENUES State revenues $ Federal revenues Other local revenues Total revenues EXPENDITURES Current: Instruction 24710S0aSlBary 24710N0NonS-Salary Support Services: Pupil services 24720S0aSlBary 24720N0NonS-Salary Improvement of instructional services 24720S1aSlBary 24720N1NonS-Salary Other support services 24720N9NonS-Salary Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Net change in fund balances Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR $ Budgeted Amounts Original Final Actual Variance with Final Budget (Over ) Under 2,297,996 - 21,083 2,319,079 2,730,987 29,983 84,998 2,845,968 2,599,029 45,169 - 2,644,198 131,958 (15,186) 84,998 201,770 2,311,614 1,915,035 396,579 7,465 7,275 190 - - 2,319,079 - - - 27,716 27,716 2,752,435 2,145,777 606,658 2,574,076 2,470,835 103,241 66,242 40,171 26,071 28,334 27,866 468 8,791 7,276 1,515 2,179 2,179 - 18,500 18,500 3,249 3,249 2,845,968 2,607,838 - 36,360 27,716 27,716 4,853 41,213 27,716 68,929 178,359 (325,058) 503,417 37,908 12,305 25,603 6,612 5,097 1,515 15,251 15,251 238,130 (36,360) (4,853) (41,213) - (41,213) 59 Atlanta Independent School System SPECIAL REVENUE FUND -OTHER FEDERAL PROGRAMS FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended June 30, 2011 REVENUES State revenues $ Federal revenues Other local revenues Total revenues EXPENDITURES Current: Instruction 11710S0aSlBary 11710N0NonS-Salary Support Services: Pupil services 11720S0aSlBary 11720N0NonS-Salary Improvement of instructional services 11720S1aSlBary 11720N1NonS-Salary Educational media 11720S2aSlBary 11720N2NonS-Salary General administration 11720S3aSlBary 11720N3NonS-Salary School administration 11720N4NonS-Salary Business administration 11720N5NonS-Salary Maintenance and operation of facilities 11720N6NonS-Salary Student transportation 11720N7NonS-Salary Central support 11720S8aSlBary 11720N8NonS-Salary Other support services 11720S9aSlBary 11720N9NonS-Salary Nutrition 117301NNoSn-Salary Total Expenditures Excess (deficiency) of revenues over (under) expenditures Budgeted Amounts Original Final Actual Variance with Final Budget (Over ) Under 2,540,588 13,828 2,554,416 1,016,524 11,862,077 13,209 12,891,810 4,351,921 4,351,921 1,016,524 7,510,156 13,209 8,539,889 560,808 76,734 484,074 146,323 56,573 89,750 1,594,901 680,695 914,206 - 118,567 23,534 95,033 - 5,000 5,000 386 386 128,431 128,431 - - - 2,554,416 - 2,288,499 1,056,083 1,232,416 297,153 118,577 178,576 7,857,172 1,398,504 6,458,668 9,776 9,026 750 926,643 231,181 695,462 31,308 31,308 7,000 7,000 - 232,620 232,620 6,500 6,239 261 1,218,339 127,534 1,090,805 16,800 16,800 12,891,810 - 1,050,285 367,340 682,945 172,166 85,686 86,480 1,914,011 885,320 1,028,691 9,590 9,590 - 117,587 62,845 54,742 7,686 7,686 - - 78,018 78,018 - 1,036,970 1,523 1,035,447 15,657 15,657 4,401,970 (50,049) 1,238,214 688,743 549,471 124,987 32,891 92,096 5,943,161 513,184 5,429,977 186 (564) 750 809,056 168,336 640,720 23,622 23,622 7,000 7,000 - 154,602 154,602 6,500 6,239 261 181,369 126,011 55,358 1,143 1,143 8,489,840 50,049 Net change in fund balances Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR - - (50,049) 50,049 64,126 64,126 64,126 - $ 64,126 64,126 14,077 50,049 60 Atlanta Independent School System SPECIAL REVENUE FUND -OTHER SPECIAL PROJECTS FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended June 30, 2011 REVENUES State revenues $ Federal revenues Local revenues Other local revenues Total revenues EXPENDITURES Current: Instruction 227100SaBlary 227100NoSn-Salary Support Services: Pupil services 227200SaBlary 227200NoSn-Salary Improvement of instructional services 227201SaBlary 227201NoSn-Salary General administration 227203SaBlary 227203NoSn-Salary School administration 227204SaBlary 227204NoSn-Salary Business administration 227205SaBlary 227205NoSn-Salary Maintenance and operation of facilities 227206SaBlary 227206NoSn-Salary Student transportation 227207SaBlary 227207NoSn-Salary Central support 227208SaBlary 227208NoSn-Salary Other support services 227209SaBlary 227209NoSn-Salary Capital Outlays 227400NSBon-Salary Total Expenditures Excess (deficiency) of revenues over (under) expenditures OTHER FINANCING SOURCES (USES) Transfers out Net change in fund balances Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR $ Budgeted Amounts Original Final Actual Variance with Final Budget (Over ) Under 592,379 1,348,356 11,836,782 13,777,517 2,337,888 2,087,285 1,347,586 20,157,841 25,930,600 431,038 548,831 7,227,628 8,207,497 1,906,850 1,538,454 1,347,586 12,930,213 17,723,103 2,237,838 1,045,391 1,192,447 343,993 280,125 63,868 5,470,556 877,959 4,592,597 448,266 325,722 122,544 10,000 10,000 - 15,322 - 15,322 27,723 445 27,278 423,359 - 423,359 631,488 407,197 224,291 4,146,170 130,665 4,015,505 22,802 22,802 13,777,517 - - - 11,740,053 11,740,053 4,133,983 1,515,730 2,618,253 961,470 486,100 475,370 11,636,648 1,225,383 10,411,265 1,687,084 329,622 1,357,462 1,323,467 999,747 323,720 529,204 - 529,204 1,041,270 1,445 1,039,825 683,127 - 683,127 2,768,491 931,644 1,836,847 1,123,700 130,665 993,035 22,156 22,156 25,910,600 20,000 2,350,646 1,340,891 1,009,755 1,076,249 1,011,029 65,220 5,526,237 759,470 4,766,767 1,110,206 196,813 913,393 1,139,495 1,139,495 - 267,388 54,631 212,757 54,069 317 53,752 196,159 27 196,132 1,823,438 416,750 1,406,688 112,307 112,307 - - 13,656,194 (5,448,697) 1,783,337 174,839 1,608,498 (114,779) (524,929) 410,150 6,110,411 465,913 5,644,498 576,878 132,809 444,069 183,972 (139,748) 323,720 261,816 (54,631) 316,447 987,201 1,128 986,073 486,968 (27) 486,995 945,053 514,894 430,159 1,011,393 18,358 993,035 22,156 22,156 12,254,406 5,468,697 (20,000) (4,853) - (5,453,550) 11,740,053 11,740,053 11,740,053 6,286,503 (15,147) 5,453,550 5,453,550 61 Atlanta Independent School System CAPITAL PROJECTS FUND Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Fiscal Year Ended June 30, 2011 Revenue Sales tax revenue $ State revenue Investment income Other local revenue Total Revenue Expenditures Current Instruction Non-Salary Support services General administration Non-Salary Business administration Salary Maintenance and operation of facilities Salary Non-Salary Student transportation Non-Salary Central support Salary Non-Salary Capital outlays Salary Non-Salary Total Expenditures Excess (deficiency) revenues over(under) expenditures OTHER FINANCING SOURCES (USES) Transfers in Net change in fund balance Fund Balance, Beginning of Fiscal Year FUND BALANCE, END OF FISCAL YEAR $ Budgeted Amounts Original Final 88,088,083 88,088,083 144,110,000 - 120,130,709 264,240,709 - - - - - - 88,088,083 235,290 87,852,793 88,088,083 - - - 136,885,042 136,885,042 - - - - - - 264,240,709 310,790 263,929,919 264,240,709 - - - 136,885,042 136,885,042 Actual Variance with Final Budget (Over ) Under 57,678,243 1,767,686 157,853 438,713 60,042,495 86,431,757 (1,767,686) (157,853) 119,691,996 204,198,214 12,578 12,578 41,689 41,689 95,282 95,282 3,294,170 38,309 3,255,860 49,709 49,709 2,616,021 14,263 2,601,758 115,014,153 87,560 114,926,593 121,123,601 (61,081,106) 10,000,000 (51,081,106) 136,885,042 85,803,936 (12,578) (12,578) (41,689) (41,689) (95,282) (95,282) (3,294,169) (38,309) (3,255,860) (49,709) (49,709) (2,616,021) (14,263) (2,601,758) 149,226,556 223,230 149,003,326 143,117,108 61,081,106 (10,000,000) 51,081,106 - 51,081,106 62 Atlanta Independent School System Combining Statement of Changes in Assets and Liabilities Agency Fund For the Fiscal Year Ended June 30, 2011 Assets: Cash and cash equivalents Balance July 1, 2010 Additions Deductions Balance June 30, 2011 $ 901,214 $ 1,639,022 $ 1,966,394 $ 573,842 Liabilities: Due to local schools and student groups $ 901,214 $ 1,639,022 $ 1,966,394 $ 573,842 63 Quality Basic Education Programs Program Expenditures General Fund Quality Basic Education Programs: Schedule of Allotments and Expenditures by Program Schedule of Expenditures by Object Lottery Programs Schedule of Approved Local Option Sales Tax Projects Schedule of State Revenues QUALITY BASIC EDUCATION PROGRAMS - PROGRAM EXPENDITURES The Official Code of Georgia Annotated Section 20-2-172 (a) Expenditure Controls for fiscal years 2007 and 2008 state: For each program identified in Code Section 20-2-161, each local School System shall spend 100 percent of funds designated for direct instructional costs on the direct instructional costs of such program on one or more of the programs identified in Code Section 20-2-161 at the system level, with no requirement that the School System spend any specific portion of such funds at the site where such funds were earned. The following pages are presented for purposes of additional analysis and reflect overall minimum expenditure requirements compared to overall program expenditures made by the School System as described above and also reflect minimum program expenditure requirements compared to actual expenditures made by the School System on a program basis. 64 ATLANTA INDEPENDENT SCHOOL SYSTEM BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM(QBE) SCHEDULE OF ALLOTMENTS AND EXPENDITURES - BY PROGRAM FISCAL YEAR ENDED JUNE 30, 2011 DESCRIPTION Direct Instructional Programs 1011 Kindergarten Program 1061 Kindergarten Program-Early Intervention Program 1021 Primary Grades (1-3) Program 1071 Primary Grades-Early Intervention (1-3) Program 1051 Upper Elementary Grades (4-5) Program 1091 Upper Elem Grades-Early Intervention (4-5) Program 1031 Middle Grades (6-8) Program 1081 Middle School (6-8) Program 1041 High School General Education (9-12) Program 3011 Vocational Laboratory (9-12) Program Students with Disabilities 2021 Category I 2031 Category II 2041 Category III 2051 Category IV 2011 Category V 2111 Gifted Student - Category VI 2211 Remedial Education Program 5071 Alternative Education Program 1351 English Speakers of Other Languages (ESOL) TOTAL DIRECT INSTRUCTIONAL PROGRAMS 1310 Media Center Program 1210 Staff and Professional Development ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) SALARIES ELIGIBLE QBE PROGRAM COSTS OPERATIONS TOTAL $ 22,185,760 $ 19,425,444 $ - $ 19,425,444 3,073,933 1,905,865 - 1,905,865 48,807,907 66,253,198 23,686,080 89,939,278 8,229,778 14,730,566 - 14,730,566 22,018,633 22,073,791 2,838,687 24,912,478 5,942,287 3,148,996 - 3,148,996 947,947 - - - 31,832,384 37,645,478 2,496,690 40,142,168 29,095,563 50,626,359 3,390,960 54,017,319 6,507,737 5,892,101 585,625 6,477,726 1,583,165 2,593,234 15,970,401 4,006,489 390,829 8,393,718 2,448,712 2,540,437 2,819,776 36,351,071 1,541,211 3,691,604 8,786,495 3,562,715 1,322,290 4,014,684 1,880,643 - 598,088 - 64,140 237,368 192,525 156,219 38,231,714 1,541,211 4,289,692 8,850,635 3,800,083 1,514,815 4,170,903 $ 219,388,690 $ 280,971,868 $ 36,127,025 $ 317,098,893 6,437,327 1,148,420 8,827,160 2,492,875 729,112 952,444 9,556,272 3,445,319 TOTAL QBE FORMULA FUNDS 1100 Twenty days additional Instruction 1320 Pupil Transprtaion 1445 On behalf 1450 Indirect costs - Central Admin. 1455 Indirect costs - School Admin. 1457 Indirect costs - Facilities M&O 1500 Nurses $ 226,974,437 $ 292,291,903 803,730 12,486,525 797,858 - 150,519 $ 306,530,535 $ 37,808,581 4,520,289 $ 42,328,870 $ 330,100,484 803,730 17,006,814 797,858 - 150,519 $ 348,859,405 (1) Comprised of State Funds plus Local Five Mill Share. 65 ATLANTA INDEPENDENT SCHOOL SYSTEM Lottery Programs Schedule of Expenditures by Object For the Fiscal Year Ended June 30, 2011 Salaries Employee benefits Employee travel Other purchased services Materials and supplies Pre-Kindergarten Program $ 2,096,382 404,498 326 3,809 102,823 $ 2,607,838 66 ATLANTA INDEPENDENT SCHOOL SYSTEM SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS FISCAL YEAR ENDED JUNE 30, 2011 PROJECT ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS (4)(5) PROJECT STATUS SPLOST II Dekalb County Renovations, modifications, additions and equipment for the following facilities: Crim High School, Coan Middle School, Burgess/Peterson Elementary School, East Lake Elementary School, Lin Elementary School, Toomer Elementary School, and Whitefoord Elementary $ Fulton County New school construction, classroom additions, renovations, infrastructure improvements, security system improvements, technology improvements, land acquisition, site preparation, new staff development and instructional support facilities, new maintenance SPLOST III Fulton County Capital outlay projects including new school construction, classroom additions, renovations, infrastructure improvements, upgrading security system, technology improvements, land acquisition, site preparation, providing staff development and instructional Dekalb County Capital outlay projects consisting of construction, renovations, modifications, additions and equipment for the following facilities: The Howard School, Lin Elementary School and Whitefoord Elementary School and any future updates: Crim High School, Coan 21,355,321 $ 486,538,295 552,357,776 20,511,000 28,351,364 $ 1,498,914 $ 26,852,450 Ongoing 433,838,560 1,759,645 432,078,915 Ongoing 440,299,913 98,387,096 213,405,484 Ongoing 20,906,706 6,645,911 14,260,795 Ongoing $ 1,080,762,392 $ 923,396,543 $ 108,291,566 $ 686,597,644 (1) The School System's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. (2) The School System's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Fulton and Dekalb Counties approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects. (4) The School System's amounts expended in prior years related to the above projects. (5) The SPLOST III Amount Expended in Prior Years (4) balances have been adjusted for reclassification of Springdale and Morningside expenditures from Fulton to Dekalb. 67 ATLANTA INDEPENDENT SCHOOL SYSTEM SCHEDULE OF STATE REVENUE FISCAL YEAR ENDED JUNE 30, 2011 AGENCY/FUNDING GRANTS Bright 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 Elementary Grades - Early Intervention (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities - All Categories Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Nursing Services Austerity Reduction Charter Commission Local Other State Programs Apprentice Charter Schools- Direct Dual Enrollment Extended Day Tch Health Insurance CTAE M.E. Support Math Science Supplement Preschool Handicapped Program Residential Treatment Centers Grant Teacher's Retirement Vocational Supervisors Vocational Ind Cert Virtual School State Grants Adult Literacy Project Georgia State Financing and Investment Commission Reimbursement on Construction Projects GENERAL FUND GOVERNMENTAL FUND TYPES CAPITAL OTHER NONMAJOR PROJECTS GOVERNMENTAL FUND FUNDS TOTAL $ - $ - $ 2,599,029 $ 2,599,029 12,201,603 1,597,930 26,637,172 4,456,186 12,094,436 3,238,892 528,545 17,404,968 15,858,900 3,547,406 13,594,873 4,531,238 1,347,498 1,386,721 1,572,868 3,515,002 1,082,845 618,445 2,739,960 8,243,068 7,868,577 3,180,816 693,120 -21,288,539 -2,329,444 38,959 626,447 23,188 120,689 623,968 3,614 450,832 438,877 328,771 173,890 58,538 23,910 1,075 - - $ 127,235,844 $ - - - - - 1,767,686 1,767,686 $ - - - - 431,038 3,030,067 $ 12,201,603 1,597,930 26,637,172 4,456,186 12,094,436 3,238,892 528,545 17,404,968 15,858,900 3,547,406 13,594,873 4,531,238 1,347,498 1,386,721 1,572,868 3,515,002 1,082,845 618,445 2,739,960 8,243,068 7,868,577 3,180,816 693,120 (21,288,539) (2,329,444) 38,959 626,447 23,188 120,689 623,968 3,614 450,832 438,877 328,771 173,890 58,538 23,910 1,075 431,038 1,767,686 132,033,597 68 Statistical Section (Unaudited) Atlanta Independent School System Introduction to the Statistical Section (Unaudited) This part of Atlanta Independent School Systems comprehensive annual financial report presents detailed information as a context for understanding this fiscal year's financial statements, note disclosures, and supplementary information. This information is unaudited. Contents Schedule Financial Trends 1 - 6 These tables contain trend information that may assist the reader in assessing the School System's current financial performance by placing it in a historical perspective. Operating Information These tables contain service indicators that can inform ones' understanding how the information in the School System's financial statements relates to the services the School System provides and the activities it performs. 7 - 13 Demographic and Economic Information These tables present demographic and economic information intended (1) to assist users in understanding the socioeconomic environment within which the School System operates and (2) to provide information that facilitates comparisons of financial statement information over time. 14 - 22 Data Source: Unless otherwise noted, the information in these tables is derived from the comprehensive annual financial report for the applicable fiscal year. ATLANTA INDEPENDENT SCHOOL SYSTEM NET ASSETS BY COMPONENT LAST TEN FISCAL YEARS Schedule 1 Fiscal Year Ended June 30, Governmental Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Governmental Activities Net Assets 2002 481,975,764 2,482,792 249,505,942 733,964,498 2003 2004 2005 2006 629,768,301 - 182,053,270 811,821,571 733,997,697 - 95,404,253 829,401,950 803,563,172 3,988,606 115,840,477 923,392,255 831,829,656 26,478,370 125,881,509 984,189,535 2007 893,683,701 106,980,587 157,963,991 1,158,628,279 2008 2009 2010 854,305,957 182,517,605 191,270,394 1,228,093,956 959,621,519 152,371,189 168,743,024 1,280,735,732 1,056,744,474 111,943,417 128,194,970 1,296,882,861 2011 1,104,601,221 112,855,070 147,834,977 1,365,291,268 Business-Type Activities Invested in Capital Assets, Net of Related Debt Unrestricted Total Business-Type Activities Net Assets 2,720,262 (12,995,516) (10,275,254) 2,887,616 (18,572,353) (15,684,737) 3,897,068 (22,325,064) (18,427,996) 5,055,963 (25,805,372) (20,749,409) 5,776,388 (26,121,644) (20,345,256) 8,504,052 (9,964,379) (1,460,327) 484,935 484,935 1,972,799 1,972,799 2,038,487 2,038,487 2,183,644 2,183,644 Primary Government Activities Invested in Capital Assets, Net of Related Debt Restricted Unrestricted Total Primary Government Activities Net Assets 484,696,026 2,482,792 236,510,426 723,689,244 Source: Atlanta Independent School System Financial Reports for previous years and fiscal year ended June 30, 2011. 632,655,917 - 163,480,917 796,136,834 737,894,765 - 73,079,189 810,973,954 808,619,135 3,988,606 90,035,105 902,642,846 837,606,044 26,478,370 99,759,865 963,844,279 902,187,753 106,980,587 147,999,612 1,157,167,952 854,305,957 182,517,605 191,755,329 1,228,578,891 959,621,519 152,371,189 170,715,823 1,282,708,531 1,056,744,474 111,943,417 130,233,457 1,298,921,348 1,104,601,221 112,855,070 150,018,621 1,367,474,912 69 Fiscal Year Ended June 30, Expenses Governmental Activities Instruction Pupil Services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Community services Other support services Nutrition Interest and fiscal charges Bond issuance cost Depreciation Total Governmental Activities Expenses Business-Type Activities Food services Total Business-Type Activities Expenses Total Primary Government Activities Expenses Program Revenues Governmental Activities Charges for Services Instruction School administration Maintenance and operation of facilities Other support services Nutrition Operating Grants and Contributions Instruction Pupil services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Community Services Other support services Nutrition Capital Grants and Contributions Instruction Maintenance and operation of facilities Student transportation Total Governmental Activities Program Revenues Business-Type Activities Charges for Services Food Services Operating Grants and Contributions Food Services Total Business-Type Activities Program Revenues Total Primary Government Activities Program Revenues ATLANTA INDEPENDENT SCHOOL SYSTEM CHANGE IN NET ASSETS LAST TEN FISCAL YEARS Schedule 2 2002 2003 2004 2005 2006 369,380,523 22,627,253 28,097,268 12,360,619 10,924,016 30,642,476 8,337,982 61,198,598 17,000,163 25,991,753 3,214,167 681,496 977,215 - 237,108 591,670,637 404,300,173 21,649,868 23,447,177 7,615,931 13,622,969 25,948,073 6,452,828 58,896,420 16,678,855 23,404,234 6,116,012 - 249,094 608,381,634 424,091,453 21,890,649 21,135,004 6,746,870 21,539,082 24,230,800 5,482,136 61,354,665 15,189,582 29,129,882 690,836 204,969 631,685,928 435,352,357 24,009,140 20,011,373 7,087,158 18,908,200 23,247,406 6,685,755 48,321,284 14,678,214 26,204,018 423,301 538,613 625,466,819 393,121,077 29,201,941 31,910,382 11,326,263 22,244,328 36,313,409 12,973,297 60,098,358 21,658,991 26,764,937 837,701 1,855,674 648,306,358 25,739,005 25,739,005 617,409,642 27,325,463 27,325,463 635,707,097 26,552,371 26,552,371 658,238,299 25,772,181 25,772,181 651,239,000 21,711,551 21,711,551 670,017,909 2007 2008 2009 2010 2011 384,275,604 20,424,786 27,779,791 8,112,792 22,613,568 25,103,296 14,960,540 57,871,414 19,865,342 25,086,693 (13,721) 2,267,033 1,031,588 609,378,726 442,325,531 36,915,697 42,180,829 11,637,527 18,659,059 34,558,215 11,483,553 91,600,184 42,709,556 32,899,945 9,330,309 1,788,213 776,088,617 427,131,947 36,130,943 38,598,585 9,220,728 15,698,105 26,425,185 24,150,131 88,484,674 53,662,233 38,798,862 3,707,098 2,295,941 764,304,432 438,036,127 37,303,898 40,427,290 8,394,083 14,110,681 28,239,428 15,327,591 90,747,017 39,593,169 48,566,805 3,350,291 2,022,585 766,118,965 377,491,180 39,024,421 50,496,694 9,616,559 14,514,905 33,287,126 17,889,836 96,333,469 28,898,209 36,729,914 4,382,181 15,657 2,258,183 - 710,938,335 19,204,656 19,204,656 628,583,382 30,519,130 30,519,130 806,607,747 21,752,821 21,752,821 786,057,253 23,222,029 23,222,029 789,340,994 23,800,532 23,800,532 734,738,867 - - 213,249,865 4,209,345 17,993,177 1,723,159 2,084,660 448,209 56,963 806,645 735,268 2,762,298 564,776 - 8,592,231 - 253,226,596 - - 211,745,193 4,428,193 13,528,687 121,737 2,648,088 2,097,074 222,320 1,046,705 108,992 3,597,754 - 2,124,937 - 241,669,680 - - 187,402,434 6,558,788 17,556,463 30,954 3,756,784 381,845 58,967 379,673 754,227 2,524,240 - 2,717,420 - 222,121,795 - - 170,977,158 8,414,003 16,447,379 182,646 4,151,612 238,704 366,225 27,511 1,409,015 1,105,539 1,444,714 - 2,230,799 - 206,995,305 2,097,124 - - 176,215,716 7,400,136 11,712,590 1,491,330 4,516,383 355,600 1,115,379 261,388 1,960,211 104,874 677,385 - 8,927 - 1,640,644 209,611,500 1,004,517 - 1,067,404 - 156,075,020 14,951,701 16,073,230 2,424,655 3,336,077 6,065,020 1,102,416 8,740,838 5,206,251 984,451 65,551 7,365,780 - 1,191,630 225,654,541 114,350 - 3,749,416 168,958,774 18,133,132 16,110,597 3,745,884 3,104,288 3,498,951 9,106,449 9,262,487 5,337,639 660,429 226,806 1,307,102 - 2,207,605 653,047 246,176,956 140,047 - 1,246,236 767,347 108,327,712 20,282,835 20,193,588 2,899,356 5,788,541 5,874,998 3,933,403 17,293,612 8,537,786 7,680,398 2,811,038 12,691 205,789,588 90,084 - 995,042 754,773 110,873,809 14,470,057 27,647,132 1,404,768 3,705,087 6,841,227 2,925,304 15,521,798 8,286,759 9,984,164 2,116,177 - 205,616,181 31,492 - 783,989 670,918 - 111,426,958 18,641,247 33,328,056 2,000,787 5,053,926 7,958,215 4,077,543 20,416,518 6,735,023 9,260,421 2,845,306 14,696 25,367,686 - 248,612,781 1,886,863 20,013,045 21,899,908 275,126,504 2,388,324 19,527,656 21,915,980 263,585,660 1,966,090 20,250,537 22,216,627 244,338,422 3,566,337 18,088,139 21,654,476 228,649,781 2,580,828 18,265,689 20,846,517 230,458,017 2,534,746 19,068,852 21,603,598 247,258,139 2,187,375 20,877,018 23,064,393 269,241,349 2,291,777 20,948,908 23,240,685 229,030,273 1,836,912 21,442,603 23,279,515 228,895,696 1,695,061 22,233,560 23,928,621 272,541,402 70 ATLANTA INDEPENDENT SCHOOL SYSTEM CHANGE IN NET ASSETS LAST TEN FISCAL YEARS Schedule 2 Fiscal Year Ended June 30, Net (Expense)/Revenue Governmental Activities Instruction Pupil Services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central support Community Services Other support services Nutrition Interest and fiscal charges Bond issuance cost Depreciation Total Governmental Activities Net (Expenses)/Revenues Business-Type Activities Food Services Total Business-Type Activities Net (Expenses)/Revenues Total Primary Government Activities Net Expense 2002 2003 2004 (147,538,427) (18,417,908) (10,104,091) (10,637,460) (8,839,356) (30,194,267) (8,337,982) (61,141,635) (16,193,518) (25,256,485) (116,720) (451,869) (977,215) - (237,108) (338,444,041) (190,430,043) (17,221,675) (9,918,490) (7,494,194) (10,974,881) (23,850,999) (6,452,828) (58,674,100) (15,632,150) (23,295,242) (2,518,258) (249,094) (366,711,954) (233,971,599) (15,331,861) (3,578,541) (6,715,916) (17,782,298) (23,848,955) (5,482,136) (61,295,698) (14,809,909) (28,375,655) 2,524,240 (690,836) (204,969) (409,564,133) (3,839,097) (3,839,097) (342,283,138) (5,409,483) (5,409,483) (372,121,437) (4,335,744) (4,335,744) (413,899,877) General Revenues and Other Charges in Net Assets Governmental Activities Taxes Property Taxes levied for general purposes Property Taxes levied for debt Services Special Local Option Sales Tax & Other Taxes Grants and Contributions not restricted to specific programs Investment Earnings Other Gain on sale of capital assets Transfers Extra ordinary items Total Governmental Activities 325,547,139 - 93,920,742 - 16,910,046 6,789,405 443,167,332 353,451,241 - 79,256,916 - 11,616,090 5,935,088 450,259,335 373,487,358 - 85,604,946 - 1,995,307 3,786,290 (1,592,485) 463,281,416 Business-Type Activities Investment Earnings Transfers Other Total Business-Type Activities Total Primary Government Activities 443,167,332 450,259,335 1,592,485 1,592,485 464,873,901 Change in Net Assets Governmental Activities Business-Type Activities Total Primary Government 104,723,291 (3,839,097) 100,884,194 83,547,381 (5,409,483) 78,137,898 53,717,283 (2,743,259) 50,974,024 Source: Notes: Atlanta Independent School System Financial Reports for previous years and fiscal year ended June 30, 2011 Restatement in year 2008 due to prior period adjustments for change in accounting principle and estimates. In fiscal year 2008, change in pension expense allocation. In fiscal year 2007, change in allocation of capital assets. Changes in Instruction support 2007 to 2008 due to proper allocation of salary and benefits in 2008. GASB 34 implemented in 2002. In fiscal year 2010, sales tax decreased due to sales tax refund/repayment. Decrease in Sales Tax revenue in fiscal year 2011 due in part to the economic downturn. 2005 2006 (262,144,400) (15,595,137) (3,563,994) (6,904,512) (14,756,588) (23,008,702) (6,319,530) (48,293,773) (13,269,199) (25,098,479) 1,021,413 (538,613) - (418,471,514) (216,896,434) (21,801,805) (20,197,792) (9,834,933) (17,727,945) (33,860,685) (11,857,918) (59,836,970) (18,058,136) (26,660,063) (106,503) (1,855,674) - (438,694,858) (4,117,705) (4,117,705) (422,589,219) (865,034) (865,034) (439,559,892) 377,215,701 - 91,202,366 - 4,658,043 5,900,535 (1,796,292) 477,180,353 361,839,014 - 117,933,347 9,411,373 7,319,327 6,316,574 2,505,987 (1,036,966) - 504,288,656 1,796,292 1,796,292 478,976,645 59,711 1,036,966 1,096,677 505,385,333 58,708,839 (2,321,413) 56,387,426 65,593,798 231,643 65,825,441 2007 2008 (227,196,067) (5,473,085) (11,706,561) (5,688,137) (19,277,491) (19,038,276) (13,858,124) (48,063,172) (13,467,461) (24,102,242) 79,272 5,098,747 (1,031,588) (383,724,185) (273,252,407) (18,782,565) (26,070,232) (7,891,643) (15,554,771) (31,059,264) (2,377,104) (80,130,092) (36,718,870) (32,239,516) (8,023,207) 226,806 3,749,416 (1,788,213) - (529,911,661) 2,398,942 2,398,942 (381,325,243) (7,454,737) (7,454,737) (537,366,398) 2009 2010 (318,664,187) (15,848,107) (18,404,997) (6,321,372) (9,909,564) (20,550,187) (20,216,730) (69,944,826) (45,124,446) (31,118,464) 2,811,038 (3,707,098) 780,038 (2,295,941) - (558,514,843) (327,072,234) (22,833,841) (12,780,158) (6,989,315) (10,405,594) (21,398,201) (12,402,287) (74,230,177) (31,306,410) (38,582,641) 2,116,177 (3,350,291) 754,773 (2,022,585) - (560,502,784) 1,487,864 1,487,864 (557,026,979) 57,486 57,486 (560,445,298) 2011 (240,665,044) (20,383,174) (17,168,638) (7,615,772) (9,460,979) (25,328,911) (13,812,293) (75,132,962) (22,163,186) (27,469,493) (865,957) (961) (2,258,183) - (462,325,554) 128,089 128,089 (462,197,465) 436,902,846 1,036,250 121,568,835 - 13,315,151 15,129,339 3,129,377 (16,416,074) (1,981,811) 572,683,913 (9,535) 16,416,074 79,445 16,485,984 589,169,897 188,959,728 18,884,926 207,844,654 470,036,120 1,153,847 115,735,907 1,347,241 13,648,335 6,855,522 (9,400,000) 599,376,972 9,400,000 9,400,000 608,776,972 69,465,311 1,945,263 71,410,574 479,629,504 1,262,460 108,957,224 4,328,538 6,419,960 15,296,550 528,432 - 616,422,668 616,422,668 57,907,825 1,487,864 59,395,689 498,921,379 1,271,739 63,438,076 1,306,947 230,484 10,583,834 897,453 - 576,649,912 8,202 - 8,202 576,658,114 16,147,128 65,688 16,212,816 469,310,346 1,174,306 52,901,075 1,310,441 124,833 5,298,494 614,466 - 530,733,961 17,068 - 17,068 530,751,029 68,408,407 145,157 68,553,564 71 ATLANTA INDEPENDENT SCHOOL SYSTEM GOVERNMENTAL FUND BALANCES LAST TEN FISCAL YEARS Schedule 3 Fiscal Year Ended June 30, Pre-GASB 54 General Fund Reserved Unreserved Total General Fund All Other Governmental Funds Reserved Unreserved, reported in: Capital Project Funds Special Revenue Funds Total All Other Governmental Funds Total 2002 2003 2004 2005 2006 2007 2008 2009 2010 16,933,754 38,418,253 55,352,007 11,938,879 62,084,468 74,023,347 11,159,630 37,292,448 48,452,078 7,325,684 68,098,575 75,424,259 13,692,102 73,372,473 87,064,575 21,785,030 91,809,975 113,595,005 20,198,038 131,566,427 151,764,465 72,359,684 85,541,272 157,900,956 33,799,205 75,928,012 109,727,217 156,758,830 80,968,852 70,077 70,078 22,216,154 103,139,827 168,623,662 149,939,551 136,951,993 12,000,000 22,558,744 191,317,574 12,000,000 18,027,458 110,996,310 32,778,625 17,571,631 50,420,333 30,060,165 11,868,263 41,998,506 39,512,697 12,177,524 73,906,375 34,183,429 12,652,472 149,975,728 23,702,646 14,193,822 206,520,130 11,995,289 161,934,840 11,767,769 148,719,762 246,669,581 185,019,657 98,872,411 117,422,765 160,970,950 263,570,733 358,284,595 319,835,796 258,446,979 GASB 54 General Fund Nonspendable Restricted Committed Assigned Unassigned Total General Fund 2011 456,347 1,104,717 16,995,134 16,000,000 46,711,357 81,267,555 All Other Governmental Funds Restricted Assigned Total All Other Governmental Funds 111,750,353 31,109,255 142,859,608 Total 224,127,163 Source: Note: Atlanta Independent School System Financial Report for previous years and fiscal year ended June 30, 2011. GASB Statement number 54 established a hierarchy of fund balance classifications based primarily on the extent to which governments are bound by constraints placed on resources. The effective date for implementation of GASB 54 was for periods beginning after June 15, 2010. Presentation for years 2002-2010 is pre GASB 54. Fiscal Year 2011 is when the standard was implemented. 72 Fiscal Year Ended June 30, Revenues Local Taxes Sales taxes income State revenues Federal revenues Investment income Facility rental fees Tuition charges Charges for services Other Total Revenues Expenditures Current Expenditures Instruction Support Services: Pupil Services Improvement of instructional services Educational media General administration School administration Business administration Maintenance and operation of facilities Student transportation Central Support Other support services Nutrition Other Other Operations of Non-Instructional Services Capital Outlays Debt Service: Principal Interest and fiscal charges Bond issuance cost Advance Refunding Escrow Total Expenditures 2002 313,659,063 93,920,742 190,093,723 44,949,186 16,910,046 472,438 176,055 24,324,599 684,505,852 ATLANTA INDEPENDENT SCHOOL SYSTEM CHANGES IN GOVERNMENTAL FUND BALANCES LAST TEN FISCAL YEARS Schedule 4 2003 346,768,390 79,256,916 177,702,841 57,560,015 11,616,090 436,094 30,800 - 11,875,018 685,246,164 2004 365,523,133 85,604,946 152,497,189 63,594,376 1,995,307 709,320 45,748 9,545,822 679,515,841 2005 370,256,829 91,202,366 137,310,665 65,118,135 4,658,043 876,965 11,707 9,578,369 679,013,079 2006 369,492,043 115,953,787 141,640,201 66,535,863 7,319,327 949,298 243,698 904,128 15,066,259 718,104,604 2007 415,687,665 122,980,958 151,924,389 71,658,231 13,315,151 2,071,921 15,884,882 793,523,197 2008 471,313,094 106,562,802 163,747,188 71,651,548 13,648,335 1,604,301 114,350 3,749,416 13,512,915 845,903,950 2009 2010 507,895,487 103,765,261 129,106,908 70,336,278 6,419,960 1,246,236 140,047 767,348 23,817,861 843,495,386 493,825,791 95,443,229 110,942,787 82,463,268 410,218 995,042 90,084 754,773 22,081,274 807,006,466 2011 445,986,671 57,678,243 132,033,597 84,046,858 282,686 783,989 31,492 670,918 13,897,009 735,411,463 353,337,682 22,590,159 49,379,326 12,351,085 10,683,333 30,642,476 8,337,982 61,193,777 16,088,475 25,991,753 3,214,167 - 681,496 - 78,153,025 10,225,534 977,215 - 37,991,609 721,839,094 387,299,503 21,612,774 32,991,181 7,601,608 13,026,341 35,456,730 6,452,828 62,044,973 14,295,463 26,264,962 8,582,226 - 141,088,759 8,417,826 - 765,135,174 405,869,137 21,853,555 21,181,874 6,738,907 13,504,910 24,230,800 5,482,136 61,539,367 13,022,959 30,515,657 526,684 - 169,069,406 6,066,632 690,836 - 780,292,860 395,383,620 23,972,046 20,071,788 7,080,214 9,832,227 23,525,692 6,795,841 48,442,054 12,815,478 26,393,782 220,262 - 107,635,321 4,386,236 538,613 - 687,093,174 358,003,139 28,296,328 31,811,061 11,128,439 15,066,526 35,579,029 12,959,536 59,941,395 19,331,040 26,567,407 796,364 48,270 78,371,573 2,700,668 403,266 - 681,004,041 405,189,908 23,654,225 31,501,828 9,119,001 15,833,120 28,207,534 15,632,317 60,202,421 17,344,114 28,680,154 2,386,576 56,735,237 3,840,761 - 698,327,196 373,703,960 33,795,599 38,823,821 10,507,784 17,134,640 32,147,765 23,625,597 84,456,521 37,822,559 29,586,277 983,284 49,014 7,974,781 67,911,787 2,387,590 1,788,213 - 762,699,192 394,246,196 403,804,829 35,859,316 38,318,666 9,081,715 15,572,414 26,227,397 17,182,008 89,297,173 51,723,141 38,517,074 3,676,062 12,500 - 151,389,516 36,234,070 39,447,284 8,145,710 13,763,790 27,509,235 15,934,176 90,301,296 36,256,980 47,399,446 3,274,650 139,770,104 6,800,416 2,295,941 - 880,199,535 2,022,585 5,755,506 - 869,619,661 373,889,853 38,474,947 49,820,431 9,446,870 14,320,518 32,841,337 16,837,414 96,145,841 26,016,620 36,238,019 4,323,494 15,657 - 170,374,153 5,934,366 1,803,937 1,466,547 - 877,950,004 73 ATLANTA INDEPENDENT SCHOOL SYSTEM CHANGES IN GOVERNMENTAL FUND BALANCES LAST TEN FISCAL YEARS Schedule 4 Fiscal Year Ended June 30, Excess / (Deficiency) of Revenues over (under) Expenditures Other Financing Sources (Uses) Proceeds from Bonds Premium on bonds Proceeds from Capital Leases Proceeds from sale of capital assets Proceeds from Notes Transfers in Transfers out Total Other Financing Sources/(Uses) Extraordinary Items Net Change in Fund Balances Fund Balance at Beginning of Fiscal Year Prior Period Corrections Change in accounting practice FUND BALANCE AT END OF FISCAL YEAR 2002 (37,333,242) 2003 (79,889,010) 2004 (100,777,019) 2005 (8,080,095) 2006 37,100,563 2007 95,196,001 2008 83,204,756 2009 2010 (36,704,149) (62,613,195) 2011 (142,538,541) 4,112,800 42,589,027 (42,589,027) 4,112,800 - (33,220,442) 279,890,024 246,669,582 2,129,553 - 3,814,304 - 2,482,792 (2,482,792) 5,943,857 - (73,945,153) 258,964,810 185,019,657 13,270,248 - 2,952,010 - 18,158,072 (19,750,557) 14,629,773 - (86,147,246) 185,019,657 98,872,411 11,875,815 - 18,128,500 (19,924,792) 10,079,523 - 1,999,428 115,423,338 117,422,766 3,907,884 - 3,131,798 40,000 19,874,172 (19,874,172) 7,079,682 - 44,180,245 116,292,413 498,296 - 160,970,954 3,921,678 - 2,638,066 3,169,238 10,115,000 27,635,695 (44,051,769) 3,427,908 (1,981,811) 96,642,098 166,928,634 263,570,733 20,000,000 909,104 25,307,215 (34,707,215) 11,509,104 932,980 34,055,410 (34,055,410) 932,980 1,224,378 44,664,147 (44,664,147) 1,224,378 - - - 94,713,862 (35,771,169) (61,388,817) 263,570,733 355,606,965 323,846,887 358,284,596 319,835,796 (4,011,091) 258,446,979 104,415,000 3,097,709 706,016 - 10,974,126 (10,974,126) 108,218,725 - (34,319,816) 258,446,979 224,127,163 FUND BALANCE AT END OF FISCAL YEAR Debt service as a percentage of noncapital expenditures 246,669,582 6.92% 185,019,657 1.11% 98,872,411 0.87% 117,422,766 0.72% 160,970,954 0.46% 263,570,733 0.60% 358,284,596 319,835,796 258,446,979 0.60% 1.26% 1.08% 224,127,163 1.30% Source: Atlanta Independent School System Financial Reports for previous years and fiscal year ended June 30, 2011. Notes: Extraordinary item in 2007 closing of two charter schools. Changes in Instruction support 2007 to 2008 due to proper allocation of salary and benefits in 2008. In fiscal year 2008 change in pension expenditure. Large fluctuations in expenditures due to reclasses within functions in FY2009-2011 . Decrease in Sales tax income between FY10 and FY11 was due in part to the adjustment for overpayement of Splost proceeds. 74 ATLANTA INDEPENDENT SCHOOL SYSTEM GENERAL FUND EXPENDITURES BY FUNCTION LAST TEN FISCAL YEARS Schedule 5 Fiscal Year Instruction 1 Pupil Services School and Admin. Services Business Services 2 Capital Outlay Other 3 Total total current expenditures % of change from prior year total capital outlay total expenditures % of change from % of change from prior year prior year 2002 315,472,276 18,373,267 62,467,052 71,978,407 - 41,681,449 509,972,451 3.15% 0.00% 3.60% 2003 343,085,735 17,131,932 59,678,758 69,558,556 - 27,740,683 517,195,664 4.52% 0.00% 1.42% 2004 359,444,397 15,259,936 52,257,050 68,966,619 - 37,341,209 533,269,211 1.32% 0.00% 3.11% 2005 360,922,790 15,635,773 23,265,642 65,285,140 3,029,090 34,293,523 502,431,958 -6.21% 100.00% -5.78% 2006 328,733,992 20,886,301 42,964,459 85,768,267 - 31,105,339 509,458,358 2.85% 0.00% 1.40% 2007 371,030,700 10,491,218 34,463,418 87,064,138 2,638,066 31,071,989 536,759,529 5.16% 100.00% 5.36% 2008 346,276,544 16,742,092 41,041,883 140,274,918 8,257,558 39,184,963 591,777,958 8.21% 68.05% 10.25% 2009 385,984,855 20,045,172 36,636,052 133,410,584 - 42,590,714 618,667,377 5.83% 0.00% 4.54% 2010 2011 4 397,022,707 4 370,061,246 19,336,072 24,014,862 36,787,333 42,918,150 136,817,366 133,081,824 - 40,770,273 630,733,751 - 39,937,929 610,014,011 2.41% -3.37% 0.00% 0.00% 1.95% -3.29% Source: Atlanta Independent School System Financial Reports for previous years and fiscal year ended June 30, 2011. Notes: 1 Instruction includes Improvement of Instructional Services and Educational Media. 2 Business Services includes Business Administration , Maintenance and Facilites and Student Transportation. 3 Other includes Central Support, Community Services, Other Operations, Principal and Interest. 4 Expenditures for Charter Schools were reclassed to Instruction in fiscal year 2010 and 2011. 75 Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: ATLANTA INDEPENDENT SCHOOL SYSTEM GENERAL FUND REVENUES BY SOURCE LAST TEN FISCAL YEARS Schedule 6 Taxes State Grants Federal Grants 313,659,063 175,553,782 1,069,298 346,768,390 170,033,573 427,849 362,726,900 141,848,193 1,153,791 370,256,829 124,113,881 1,326,039 384,221,179 133,943,879 3,870,753 430,844,808 145,105,716 1,112,951 480,152,929 154,892,058 1,347,241 514,075,346 122,514,004 4,328,538 493,825,791 107,237,545 15,452,007 445,986,671 127,235,844 10,747,543 Atlanta Independent School System Financial Reports for previous years and fiscal year ended June 30, 2011. Other 20,302,508 14,822,888 8,086,373 13,084,964 15,437,607 19,069,158 17,353,301 16,548,410 9,262,323 7,841,900 Total 510,584,651 532,052,700 513,815,257 508,781,713 537,473,418 596,132,633 653,745,529 657,466,298 625,777,666 591,811,958 Local 61% 65% 71% 73% 71% 72% 73% 78% 79% 75% % of total State Federal 34.38% 0.21% 31.96% 0.08% 27.61% 0.22% 24.39% 0.26% 24.92% 0.72% 24.34% 0.19% 23.69% 0.21% 18.63% 0.66% 17.14% 2.47% 21.50% 1.82% Other 3.98% 2.79% 1.57% 2.57% 2.87% 3.20% 2.65% 2.52% 1.48% 1.33% 76 ATLANTA INDEPENDENT SCHOOL SYSTEM ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Schedule 7 Fiscal Year Ended 4 Residential Property Commercial Property Industrial Property Other Property 1 Less Tax-Exempt Property 2 Total Taxable Assessed Value 3 December 31, 2002 8,567,121,679 6,901,913,667 366,881,480 1,662,085,635 188,994,248 17,309,008,213 December 31, 2003 9,578,478,978 7,104,858,403 323,814,720 1,590,030,109 160,151,146 18,437,031,064 December 31, 2004 10,282,698,452 7,433,699,007 308,725,135 1,626,457,946 1,732,722,383 17,918,858,157 December 31, 2005 10,842,205,309 7,255,025,020 618,322,584 1,590,005,363 186,756,118 20,118,802,158 June 30, 2006 11,954,278,920 8,069,483,015 699,409,813 1,621,488,855 1,720,017,791 20,624,642,812 June 30, 2007 13,202,618,136 9,744,120,546 776,908,905 1,595,456,173 1,887,341,520 23,431,762,240 June 30, 2008 13,980,076,949 13,067,992,615 1,031,326,231 1,615,241,347 2,093,949,974 27,600,687,168 June 30, 2009 13,872,372,979 11,249,746,299 890,877,231 1,720,999,874 1,910,282,501 25,823,713,882 June 30, 2010 12,749,326,810 11,746,535,282 806,421,455 1,542,422,321 2,831,876,995 24,012,828,873 June 30, 2011 11,506,413,986 11,148,297,009 758,400,890 1,528,992,043 2,880,803,214 22,061,300,714 Source: Statistical section of the City of Atlanta, Georgia Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2011. Notes: 1 Other Property consist of Historical, Agricultural, Conservation, Utility, Motor Vehicle, Heavy Equipment, Timber, Motor Homes, etc. 2 Tax Exempt Property consist of Basic Homestead, Elderly, Disabled Veteran, Freeport, etc. 3 Assessed values are established by the Fulton & Dekalb Counties Board of Tax Assessors on January 1 of each year at 40% of the market value as required by State Law. 4 The City of Atlanta changed from a December 31 fiscal year to a June 30 fiscal year in 2006. Total Direct Tax Rate 32.64% 32.08% 31.00% 30.09% 32.13% 31.61% 30.49% 30.49% 33.63% 33.63% 77 ATLANTA INDEPENDENT SCHOOL SYSTEM PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS (Per $1,000 Assessed Value) LAST TEN FISCAL YEARS Schedule 8 Fiscal Year Ended 4 City Direct Rates General Levy School Levy Parks Levy City Bond Levy School Bond Levy Total Direct Tax Rate 2 Atlanta/ Dekalb County Special Tax District Downtown Improvement District Special Tax District 1 Overlapping Rates County Levy 3 Fulton County, Georgia County Georgia Bond State Levy Levy December 31, 2002 9.02 21.67 0.50 1.34 0.11 32.64 1.30 2.50 12.53 (3) 0.28 0.25 December 31, 2003 8.71 21.46 0.50 1.30 0.11 32.08 1.14 3.60 12.05 (3) 0.27 0.25 December 31, 2004 8.25 20.87 0.50 1.27 0.11 31.00 1.05 4.20 11.59 (3) 0.07 0.25 December 31, 2005 7.64 20.42 0.50 1.43 0.10 30.09 2.05 5.00 11.58 (3) 0.06 0.25 June 30, 2006 7.53 22.64 0.50 1.41 0.05 32.13 0.99 5.00 11.40 (3) 0.06 0.25 June 30, 2007 7.09 22.64 0.50 1.33 0.05 31.61 0.96 5.00 10.28 (3) 0.06 0.25 June 30, 2008 7.12 21.64 0.50 1.18 0.05 30.49 0.83 5.00 10.28 (3) 0.60 0.25 June 30, 2009 7.12 21.64 0.50 1.18 0.05 30.49 0.83 5.00 10.28 (3) 0.00 0.25 June 30, 2010 10.24 21.64 0.50 1.20 0.05 33.63 1.00 5.00 10.28 (3) 0.00 0.25 June 30, 2011 10.24 21.64 0.50 1.20 0.05 33.63 0.88 5.00 10.28 (3) 0.00 0.25 Source: Statistical section of the City of Atlanta, Georgia Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2011. Total 13.06 12.57 11.91 11.89 11.72 10.58 10.59 10.53 10.53 10.53 Notes: 1 Tax imposed by property owners in the district pursuant to state authorization. 2 Reduced by debt service payment of $3,052,000 by the Atlanta Board of Education using its existing resources. 3 Hospital levy included in County levy. 4 The City of Atlanta changed from a December 31 fiscal year to a June 30 fiscal year in 2006. 78 Tax Payer Development Authority of Fulton 2 Georgia Power Company Bell South Coca-Cola Company AT & T DELTA Airlines BF ATL, LLC Post Apartment Homes Sun Trust Plaza Association IEP PEEACHTREE, LLC Total ATLANTA INDEPENDENT SCHOOL SYSTEM PRINCIPAL PROPERTY TAXPAYERS JUNE 30, 2010 AND NINE YEARS AGO 1 Schedule 9 2010 Type of Business Government Utility Service Communications Service Marketing and Manufacturing Communications Service Commercial Real Estate Commercial Real Estate Residential Real Estate Commercial Real Estate Commercial Real Estate Taxable Assessed Value 1 $ 864,964,916 355,267,690 288,336,703 236,494,269 233,061,383 144,071,482 135,349,360 129,959,779 103,532,500 93,279,610 $ 2,584,317,692 Rank 1 2 3 4 5 6 7 8 9 10 Percentage of Total City Taxable Assessed Value 4.10% 1.68% 1.37% 1.13% 1.10% 0.68% 0.64% 0.62% 0.49% 0.44% 12.25% Tax Payer 2001 Type of Business Taxable Assessed Value Rank Percentage of Total City Taxable Assessed Value Bell South Coca-Cola Company Georgia Power Company Post Apartment Homes CSC Associates AT & T Georgia Pacific Company One Ninety One Peachtree Association Overseas Partners Sumito Life Realty, Inc. Communication Service Marketing and Manufacturing Utility Service Residential Real Estate Commercial Real Estate Communications Service Pulp and Paper Manufacturing Commercial Real Estate Commercial Real Estate Commercial Real Estate $ 281,517,922 1 148,094,220 2 128,918,917 3 107,210,390 4 86,918,820 5 86,760,614 6 84,593,910 7 81,836,440 8 76,491,240 9 68,531,100 10 1.79% 0.94% 0.82% 0.68% 0.55% 0.55% 0.54% 0.52% 0.49% 0.44% Total $ 1,150,873,573 7.32% Sources: Notes: 2010 - Statistical section of the City of Atlanta, Georgia Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2011. 2001 - Statistical section of the City of Atlanta, Georgia Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2007. 1. Information for FY2011 was not available. 2. Development Authority of Fulton does not pay taxes but does temporarily hold property for others who pay taxes. 79 ATLANTA INDEPENDENT SCHOOL SYSTEM PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Schedule 10 Fiscal Year Ended 3 Taxes Levies for the Fiscal Year Collected within the Fiscal Year of the Levy Percentage of Amount 1 Levy Collections in Subsequent Years Total Collections To Date Percentage of Amount Levy December 31, 2002 173,920,120 158,225,729 90.98% 15,105,557 173,331,286 99.66% December 31, 2003 178,909,014 166,815,658 93.24% 11,462,115 2 178,277,773 99.65% December 31, 2004 180,733,587 170,502,285 94.34% 9,752,408 2 180,254,693 99.74% December 31, 2005 178,703,068 160,301,279 89.70% 17,909,963 2 178,211,242 99.72% June 30, 2006 6,750,195 6,750,195 100.00% - 6,750,195 100.00% June 30, 2007 179,606,933 164,976,460 91.85% 11,685,144 2 176,661,604 98.36% June 30, 2008 182,020,745 173,030,142 95.06% 6,494,066 179,527,207 98.63% June 30, 2009 196,377,854 190,475,498 96.02% 7,422,956 197,898,454 99.76% June 30, 2010 264,371,198 257,062,077 97.24% - 257,062,077 97.24% Source: June 30, 2011 240,585,957 234,894,781 97.63% . Statistical section of the City of Atlanta, Georgia Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2011. 344,043 235,238,824 97.78% Notes: 1 Does not include tax revenues retained by Fulton and DeKalb County for administrative expenditures, therefore the collection rate shown is slightly less than actual. 2 Adjusted to collection in subsequent year. 3 The City of Atlanta changed from a December 31 fiscal year to a June 30 fiscal year in 2006. 80 ATLANTA INDEPENDENT SCHOOL SYSTEM COMPARISON OF PROPERTY TAX MILLAGE RATES AS OF JUNE 30, 2011 Schedule 11 Atlanta Public Schools Clayton County Schools Cobb County Schools DeKalb County Schools Douglas County Schools Fulton County Schools Gwinnett County Schools Rockdale County Schools TOTAL RATE 21.69 20.00 18.90 22.90 24.10 17.50 20.55 21.00 MAINTENANCE AND OPERATION 21.64 20.00 18.90 22.90 20.00 17.15 19.25 21.00 DEBT SERVICE 0.05 0.00 0.00 0.00 4.10 0.35 1.30 0.00 Sources: Note: Atlanta Public School Board Docs , school approved budgets, county commisioners, and county online news. All tax rates are per $1000 assessed valuation. 81 Tax Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sources: Maintenance and Operations ATLANTA INDEPENDENT SCHOOL SYSTEM TAX MILLAGE RATES LAST TEN TAX YEARS Schedule 12 Sinking Bond Fund Total Levy 21.67 0.11 21.784 Decrease of 0.276 mills 21.46 0.11 21.569 Decrease of 0.215 mills 20.42 0.10 20.524 Decrease of 1.05 mills 20.42 0.10 20.524 No change from 2004 22.64 0.054 22.694 Increase of 2.17 mills 22.64 0.054 22.694 No change from 2006 21.64 0.054 21.694 Decrease of 1.000 mills 21.64 0.054 21.694 No change from 2008 21.64 0.054 21.694 No change from 2009 21.64 0.054 21.694 No change from 2010 Atlanta Public Schools June 2010 Tax Levy Board Resolutions for tax year 2011 Georgia Department of Revenue for tax years 2002-2010 Comments 82 ATLANTA INDEPENDENT SCHOOL SYSTEM RATIOS OF TOTAL DEBT OUTSTANDING BY TYPE ( UNAUDITED) GOVERNMENTAL ACTIVITIES FOR THE LAST TEN FISCAL YEARS Schedule 13 Fiscal Year Education Reform Intergovernmental Ended June 30, Success ( COPS) Agreement 2002 (1) $ - $ - 2003 (1) - - 2004 (1) - - 2005 (1) - - 2006 - 18,697,134 2007 10,115,000 22,112,675 2008 10,115,000 21,385,800 2009 9,565,000 20,488,750 2010 8,995,000 19,461,875 2011 115,912,709 18,439,000 Capital Leases $ 18,966,937 14,363,415 11,248,793 6,862,557 4,219,951 5,159,414 23,618,868 18,255,388 13,998,496 9,682,005 Total Debt (2) $ 18,966,937 14,363,415 11,248,793 6,862,557 22,917,085 37,387,089 55,119,668 48,309,138 42,455,371 144,033,714 Estimated Actual Value of Taxable Property (3) 17,309,008,213 18,437,031,064 17,918,858,157 20,118,802,158 20,624,642,812 23,431,762,240 27,600,687,168 25,823,713,882 24,012,828,873 22,061,300,714 Ratio of Total Debt to Est. Actual Value 0.11% 0.08% 0.06% 0.03% 0.11% 0.16% 0.20% 0.19% 0.18% 0.65% Personal Income (4) 149,831,000 153,070,000 162,297,000 173,159,000 184,186,000 184,186,000 196,683,000 198,580,000 206,462,000 203,137,000 Ratio of Total Debt to Personal Income 12.66% 9.38% 6.93% 3.96% 12.44% 20.30% 28.02% 24.33% 20.56% 70.90% Source: Atlanta Independent School System Financial Reports for previous years and fiscal year ended June 30, 2011. Notes: 1 The City of Atlanta changed from a December 31 fiscal year to a June 30 fiscal year in 2006. 2 See the schedule of Long Term Debt in the Notes for each year for more information on the debt. 3 See schedule 7 - Assessed and Estimated Actual Value of Taxable Property . 4 See schedule 15 - Demographics Statistics. 83 ATLANTA INDEPENDENT SCHOOL SYSTEM SCHOOL BUILDINGS, ACREAGE AND CAPACITY JUNE 30, 2011 Schedule 14 School Acreage, Square Footage, Planning Capacity, Area per Student, Effective Age Elementary Schools Acres Sq.Ft. Planning Capacity SF per Student Original Construction Renovation Actual Age Effective Age Effective Age (2010 basis) Basis (2010 basis) 1 Adamsville 2 Beecher Hills 3 Benteen 4 Bethune 5 Bolton Academy 6 Boyd 7 Brandon 8 Brandon Primary 9 Burgess-Peterson 10 Capitol View 11 Cascade 12 Centennial Place 13 Connally 14 Cleveland 15 Continental Colony 16 Cook 17 Deerwood Academy 18 Dobbs 19 Dunbar 20 East Lake 21 Fain 22 Fickett 23 Finch 24 Garden Hills 25 Gideons 26 Grove Park 27 Heritage Academy 28 Herndon 29 Hope 30 Humphries 31 Hutchinson 32 Jackson 33 Jackson Primary 34 Jones, M. A. 35 Kimberly 36 Lin, Mary 37 Miles 38 Morningside 39 Parkside 40 Perkerson 41 Peyton Forest 42 Rivers 43 Scott 44 Slater 45 Smith, Sarah 46 Smith Intermediate 47 Springdale Park 4.9 84,961 540 157 1970 2001 40 2001 9 9.5 43,791 378 116 1959 1999 51 1999 11 4.0 68,440 432 158 1957 2000 53 2000 10 4.5 70,151 594 118 1949 1999 61 1999 11 4.0 83,286 648 129 2003 7 2003 7 19.7 72,313 414 175 1971 39 1971 39 10.0 86,138 630 137 1947 1994 63 1994 16 9.8 57,112 450 127 1954 2009 56 2009 1 8.3 85,518 612 140 2004 6 2004 6 4.0 47,831 414 116 1929 2004 81 2004 6 10.0 70,286 450 156 1995 15 1995 15 5.0 63,850 468 136 1998 12 1998 12 3.7 90,440 720 126 1975 2000 35 2000 10 4.8 67,513 486 139 1996 14 1996 14 8.7 81,360 558 146 1963 1994 47 1994 16 2.6 85,856 522 164 2000 10 2000 10 21.0 82,261 648 127 2004 6 2004 6 19.6 86,300 648 133 2003 7 2003 7 5.3 92,496 360 257 1969 2009 41 2009 1 2.7 79,378 414 192 1949 1994 61 1994 16 8.0 65,000 504 129 1987 23 1987 23 12.0 78,341 702 112 1972 1994 38 1994 16 3.8 94,423 684 138 2005 5 2005 5 8.0 80,566 558 144 1938 2003 72 2003 7 4.5 75,323 594 127 1958 2000 52 2000 10 7.0 83,808 522 161 1967 2000 43 2000 10 7.0 80,997 612 132 2002 8 2002 8 6.5 85,046 576 148 2002 8 2002 8 2.4 57,369 504 114 2002 8 2002 8 8.2 65,274 468 139 1940 1998 70 1998 12 8.5 67,953 594 114 1956 1994 54 1994 16 12.5 97,041 612 159 1967 1994 43 1994 16 7.2 48,666 360 135 1959 2008 51 2008 2 7.5 90,848 630 144 2005 5 2005 5 7.2 73,316 594 123 1958 1999 52 1999 11 2.3 56,942 432 132 1930 1994 80 1994 16 15.0 82,014 648 127 2003 7 2003 7 5.2 105,847 648 163 1930 1994 80 1994 16 8.3 78,671 558 141 2001 9 2001 9 9.0 79,517 504 158 1994 16 1994 16 25.0 66,236 450 147 1968 1999 42 1999 11 8.0 81,721 432 189 1950 1999 60 1999 11 8.0 77,536 576 135 1951 2002 59 2002 8 13.0 79,342 576 138 1952 2002 58 2002 8 10.3 66,582 540 123 1952 1994 58 1994 16 6.2 73,394 396 185 2009 1 2009 1 4.5 63,650 450 141 2009 1 2009 1 84 ATLANTA INDEPENDENT SCHOOL SYSTEM SCHOOL BUILDINGS, ACREAGE AND CAPACITY JUNE 30, 2011 Schedule 14 School Acreage, Square Footage, Planning Capacity, Area per Student, Effective Age Elementary Schools Acres Sq.Ft. Planning SF per Original Renovation Actual Age Effective Age Effective Age Capacity Student Construction (2010 basis) Basis (2010 basis) 48 Stanton, D. H. 49 Stanton, F. L. 50 Thomasville Heights 51 Toomer 52 Towns 53 Usher 54 Venetian Hills 55 West Manor 56 White 57 Whitefoord 58 Woodson 6.0 71,480 594 120 1959 2000 51 2000 10 5.2 62,930 306 206 1928 2000 82 2000 10 11.2 89,475 738 121 1971 2001 39 2001 9 10.6 66,593 504 132 1967 1998 43 1998 12 8.9 68,766 522 132 1963 2000 47 2000 10 14.0 90,570 648 140 1969 2003 41 2003 7 9.3 60,313 432 140 1954 1994 56 1994 16 10.8 42,474 288 147 1956 2000 54 2000 10 8.0 63,603 576 110 1964 1999 46 1999 11 2.3 62,712 468 134 1928 1994 82 1994 16 4.1 86,596 486 178 1971 1998 39 1998 12 Elementary School Totals 477.5 4,320,216 30,672 143 1971 39 1999 11 Middle Schools 1 Brown 2 Bunche 3 Coan 4 Harper-Archer 5 Inman 6 Kennedy 7 King M.L. 8 Long 9 Parks 10 Price 11 Sutton 12 Sylvan 13 Turner 14 Young Middle School Totals Acres Sq.Ft. Planning SF per Original Renovation Actual Age Effective Age Effective Age Capacity Student Construction (2010 basis) Basis (2010 basis) 15.6 139,918 1,014 138 1928 2001 82 2001 9 42.3 114,500 884 130 1979 2001 31 2001 9 16.1 166,269 1,066 156 1967 2003 43 2003 7 18.1 206,374 1,144 180 1963 2002 47 2002 8 4.2 134,042 780 172 1923 2005 87 2005 5 5.0 228,028 1,092 209 1970 2004 40 2004 6 6.5 192,300 1,040 185 1973 2003 37 2003 7 15.6 141,210 936 151 1958 2006 52 2006 4 5.8 79,440 546 145 1966 1996 44 1996 14 19.0 152,791 1,014 151 1954 2002 56 2002 8 12.5 144,737 1,040 139 1960 2006 50 2006 4 13.0 114,788 780 147 1949 61 1949 61 9.5 122,279 832 147 1950 1999 60 1999 11 15.0 158,377 1,014 156 1951 2009 59 2009 1 198.2 2,095,053 13,182 158 1957 54 1999 11 High Schools 1 BEST 2 Carver 3 Crim 4 Douglass 5 Forrest Hill 6 Grady 7 Jackson, Maynard 8 King, C.S. 9 Mays 10 North Atlanta 11 South Atlanta 12 Therrell 13 Washington High School Totals Acres Sq.Ft. Planning Capacity SF per Student Original Construction Renovation Actual Age Effective Age Effective Age (2010 basis) Basis (2010 basis) 15.1 233,421 1,400 167 2009 1 2009 1 35.4 261,460 1,586 165 1920 2005 90 2005 5 17.9 190,624 1,014 188 1940 2007 70 2007 3 32.0 291,912 2,028 144 1968 2004 42 2004 6 5.8 68,756 650 106 2008 2 2008 2 19.5 211,888 1,326 160 1924 2005 86 2005 5 25.0 249,872 1,508 166 1985 25 1985 25 27.2 232,321 1,400 166 2009 1 2009 1 70.4 310,369 1,664 187 1981 29 1981 29 17.5 278,470 1,560 179 1951 1994 59 1994 16 50.2 258,840 1,404 184 1973 2008 37 2008 2 35.2 229,326 1,430 160 1960 50 1960 50 21.1 252,182 1,664 152 1924 2005 86 2005 5 372.3 3,069,441 18,634 163 1966 44 1998 12 85 Fiscal Year Ended 1 December 31, 2002 December 31, 2003 December 31, 2004 Decemver 31, 2005 June 30, 2006 June 30, 2007 June 30, 2008 June 30, 2009 June 30, 2010 June 30, 2011 Population 428,100 432,900 434,900 442,100 451,600 451,600 461,956 477,300 480,700 420,003 ATLANTA INDEPENDENT SCHOOL SYSTEM DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS Schedule 15 Personal Income (thousands of dollars) Per Capita Personal Income Median Age 149,831 32,925 32.3 153,070 32,739 34.0 162,297 33,838 33.8 173,159 34,825 34.7 184,186 35,846 34.7 184,186 35,846 34.7 196,683 36,309 32.0 198,580 37,744 35.0 206,462 38,336 35.0 203,137 37,101 34.0 Sources: 1 StaCtisityicaolf sAetcltaionntao, fGtehoerCgiiatyCoofmAptlraenhtean,sGiveeoArgninau2a0l 1F1inCaonmciaplreRheepnosrivt e Annual Financial Report For the Fiscal Year Ended June 30, 2011. Note: 1 The City of Atlanta changed from a December 31 fiscal year to a June 30 fiscal year in 2006. School Enrollment 55,640 53,485 51,358 50,188 49,924 49,707 51,377 48,093 48,696 49,874 Unemployment Rate 7.9% 7.7% 7.4% 5.9% 5.3% 4.5% 5.9% 10.3% 10.0% 10.5% 86 Employer Allied Barton Security Services International Business Machine Corp. The Coco-Cola Company Turner Broadcasting System, Inc. Cable News Network, Inc. Air Service Corp Accenture LLP AT & T Services Inc. Georgia-Pacific Corporation Tenet Health System, Inc. Total Employer ATLANTA INDEPENDENT SCHOOL SYSTEM PRINCIPAL EMPLOYERS JUNE 30, 2011 AND NINE YEARS AGO Schedule 16 Type Of Business 2011 Employees Security Services Technology Services Marketing and Manufacturing Media/Entertainment Media Transportation Consulting Telecommunication Pulp and Paper Manufacturing Healthcare 4,205 3,769 3,608 2,000 1,889 1,665 1,555 1,247 1,170 1,164 22,272 Type Of Business 2002 Employees Percentage of Total City Employment 2.24% 2.01% 1.92% 1.07% 1.01% 0.89% 0.83% 0.67% 0.62% 0.62% 11.88% Percentage of Total City Employment International Business Machine Corp. Georgia-Pacific Corporation Efficiency Plus Consultants The Coco-Cola Company Cable News Network, Inc. Atlanta Journal and Constitution Tenet Health System, Inc. Turner Entertainment Networks Atlanta Marriott Marquis Hotel Turner Broadcasting System, Inc. Total Technology Services Pulp and Paper Manufacturing Consulting Marketing and Manufacturing Media Media Healthcare Entertainment Hospitality Media/Entertainment 3,851 3,245 3,200 3,181 2,055 1,423 1,336 1,019 1,000 943 21,253 1.99% 1.68% 1.65% 1.64% 1.06% 0.73% 0.69% 0.53% 0.52% 0.49% 10.98% Source: Statistical section of the City of Atlanta, Georgia 2011 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2011. 87 ATLANTA INDEPENDENT SCHOOL SYSTEM GENERAL FUND PER PUPIL COST LAST TEN FISCAL YEARS Schedule 17 Fiscal Year Expenditures 1 Active Enrollment 2 Cost Per Pupil Enrolled Average Daily Attendance 3 Cost Per Pupil Attended 2002 509,972 56,586 9,012 54,961 9,279 2003 517,196 54,946 9,413 52,398 9,871 2004 533,269 52,103 10,235 49,565 10,759 2005 502,432 51,377 9,779 49,138 10,225 2006 509,458 50,631 10,062 44,534 11,440 2007 536,734 50,631 10,601 48,720 11,017 2008 591,778 49,991 11,838 44,935 13,170 2009 618,667 49,032 12,618 51,449 12,025 2010 630,734 48,909 12,896 52,368 12,044 2011 610,014 49,796 12,250 52,925 11,526 Sources: 1 Atlanta Independent School System General Fund Expenditures by Function schedule for fiscal year ended June 30, 2011 ; ( amounts expressed in thousands). 2 GA Department of Education, Enrollment by Grade report, based on the October count of each fiscal year. 3 Average daily attendance figures from the APS Attendance/Membership Summary Report as of June 30 of each fiscal year. 88 Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: ATLANTA INDEPENDENT SCHOOL SYSTEM SCHOOL BREAKFAST PROGRAM LAST TEN FISCAL YEARS MEALS SERVED Schedule 18 Total 3,247,865 3,022,747 3,249,614 2,788,851 2,707,493 2,782,559 2,854,746 2,884,599 3,077,775 3,499,392 Free 3,018,458 2,744,137 2,935,318 2,499,934 2,435,219 2,490,514 2,597,420 2,634,544 2,822,180 3,173,080 Reduced 76,582 71,277 72,924 83,064 85,014 105,082 85,533 78,887 77,739 78,260 Nutrition Department of APS Paid 152,825 207,333 241,372 205,853 187,260 186,963 171,793 171,168 177,856 248,052 89 Fiscal Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: ATLANTA INDEPENDENT SCHOOL SYSTEM SCHOOL LUNCH PROGRAM LAST TEN FISCAL YEARS MEALS SERVED Schedule 19 Total 7,073,273 6,834,927 6,597,114 6,040,086 5,980,314 5,938,199 5,894,475 5,919,633 5,835,665 5,840,231 Free 6,043,275 5,720,433 5,420,054 4,929,194 4,924,894 4,886,222 4,943,800 4,961,606 4,968,698 5,032,509 Reduced 282,511 260,505 230,992 283,294 289,292 314,070 272,290 252,189 223,230 168,063 Nutrition Department of APS Paid 747,487 853,989 946,068 827,598 766,128 737,907 678,385 705,838 643,737 639,659 90 ATLANTA INDEPENDENT SCHOOL SYSTEM NUMBER OF SCHOOLS LAST TEN FISCAL YEARS Schedule 20 Fiscal Year Total Elementary Middle High 2002 92 66 16 10 2003 89 63 16 10 2004 89 63 16 10 2005 85 59 16 10 2006 89 59 16 14 2007 94 58 16 20 2008 93 57 17 19 2009 95 57 19 19 2010 96 55 18 23 2011 96 55 16 25 Source: Atlanta Public Schools - General Fund and Special Revenue Budget book- Fast Facts 91 Grade Level PK KK Grade 1 Grade 2 Grade 3 Grade 4 Grade 5 Grade 6 Grade 7 Grade 8 Grade 9 Grade 10 Grade 11 Grade 12 Totals Source: ATLANTA INDEPENDENT SCHOOL SYSTEM ENROLLMENT BY GRADE LEVEL ( UNAUDITED) LAST TEN FISCAL YEARS Schedule 21 2002 2003 For the Fiscal Year Ended June 30, 2004 2005 2006 2007 2008 2009 2010 2011 774 4,786 4,878 5,034 5,430 4,699 4,960 4,384 4,188 4,151 4,480 3,499 2,927 2,396 775 4,618 4,723 4,605 5,011 4,742 4,636 4,307 4,161 4,014 4,456 3,458 3,099 2,341 788 4,481 4,503 4,319 4,383 4,392 4,393 3,898 3,998 3,828 4,131 3,352 2,999 2,638 841 4,562 4,530 4,290 4,351 3,930 4,261 3,979 3,757 3,815 4,253 3,380 2,885 2,543 805 4,762 4,501 4,284 4,264 4,086 3,921 3,807 3,794 3,597 4,332 3,268 2,925 2,424 858 4,758 4,739 4,348 4,286 3,992 3,948 3,526 3,622 3,739 4,073 3,291 2,900 2,551 890 4,476 4,711 4,545 4,330 4,065 3,874 3,509 3,309 3,580 4,204 3,197 2,854 2,447 885 4,351 4,503 4,543 4,337 4,040 3,903 3,314 3,347 3,190 4,309 2,948 2,893 2,469 965 4,501 4,377 4,431 4,431 4,168 3,904 3,451 3,204 3,303 4,420 2,873 2,354 2,527 991 4,598 4,601 4,248 4,481 4,221 4,177 3,623 3,490 3,242 4,412 2,982 2,299 2,431 56,586 54,946 52,103 51,377 50,770 50,631 49,991 49,032 48,909 49,796 GA Department of Education, Enrollment by Grade report, based on the October count of each fiscal year. 92 ATLANTA INDEPENDENT SCHOOL SYSTEM EMPLOYEES BY FUNCTION ( Unaudited) FOR THE LAST TEN FISCAL YEARS Schedule 22 Function Fiscal Year Ended June 30, 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Instruction Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operations Student Transportation Services Central Services Other Supporting Services Nutrition Operations Facilities, Acquisition and Contruction 6,319 392 156 130 66 441 99 839 423 244 44 660 7 6,154 381 166 130 91 483 89 813 414 248 104 631 7 5,887 381 93 128 63 470 87 802 425 198 52 370 6 5,464 386 110 123 64 453 91 733 415 174 55 218 5 5,300 335 97 122 65 443 75 639 412 168 56 175 3 5,212 297 272 127 46 429 159 564 425 132 52 154 0 5,298 341 265 126 47 453 162 540 421 136 79 143 0 5,137 365 303 124 68 449 189 632 424 129 81 136 1 5,170 348 327 121 79 434 188 628 439 128 86 122 1 4,892 350 314 123 84 438 199 630 446 136 93 119 2 Totals 9,820 9,711 8,962 8,291 7,890 7,869 8,011 8,038 8,071 7,826 Source: Information Technology Department of APS 93