=k-'Q3OARDOF' EDUCATION
ANNUAL
REPORT

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HARALSON COUNTY, G E O R G I A

FOR THE F I S C A L Y E A R

ENDED JUNE 30, 2010

INCLUDING INDEPENDENT A U D I T O R ' S R E P O R T S

CITY OF BREMEN BOARD OF EDUCATION HARALSON COUNTY
ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30,2010
504 Laurel Street Bremen, Georgia 30110

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FlNANClAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

B

STATEMENT OF ACTlVlTlES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

H

NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY -TABLE OF CONTENTS -

SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
3 SCHEDULE OF STATE REVENUE 4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 5 ALLOTMENTS AND EXPENDITURES
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) BY PROGRAM

Page

SECTION I1
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MAlTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WlTH GOVERNMENTAUDITING STANDARDS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133

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

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENOFTAUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
August 3 , 2 0 1 1

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Bremen Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through H) of the City of Bremen Board of Education, as of and for the year ended June 30, 2010, which collectively comprise the Board's basic financial statements of the Board's primary government as listed in the table of contents. These financial statements are the responsibility of the City of Bremen Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in GovernmentAuditingStandards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 City of Bremen Board of Education'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.
The financial statements of Bremen Educational Foundation, Inc. (Foundation) have not been audited, and we were not engaged to audit the Foundation's financial statements as part of our audit of the School District's basic financial statements. The Foundation's financial activities are included in the School District's basic financial statements as a discretely presented component unit.

Because the Foundation's financial statements have not been audited, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on the financial statements of the Foundation as of and for the year ended June 30,2010.
In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information for the City of Bremen Board of Education, as of June 30, 2010, and the respective changes in financial position thereof for the year ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated August 3, 2011, on our consideration of the City of Bremen Board of Education's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditng Standards and should be considered in assessingthe results of our audit.
Management's Discussion and Analysis and the Schedule of Revenues, Expendituresand Changes in Fund Balances - Budget and Actual, as presented on pages i through x and page 2 5 respectively, are not a required part of the basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We 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 City of Bremen Board of Education's financial statements. The accompanying supplementary information consists of Schedules 2 through 5, which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organbation$ are presented for purposes of additional analysis and are not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements, and in our opinion, except for the matters discussed in the third paragraph on which we express no opinion, such information, is fairly stated, in all material respects, in relation to the financial statements as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
- Respectfully submitted, I
~ u d s e lWl . Hinton, CPA, CGFM State Auditor

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2010

INTRODUCTION

The School District's financial statements for the fiscal year ended June 30, 2010, includes a series of basic financial statements that report financial information for the School District as a whole, its funds, and its fiduciary responsibilities. The Statement of Net Assets and the Statement of Activities provide financial information about all of the School District's activities and present both a short-term and long-term view of the School District's finances on a global basis. The fund financial statements provide information about all of the School District's funds. Information about these funds, such as the School District's General Fund, is important in its own right, but will also give insight into the School District's overall soundness as reported in the Statement of Net Assets and the Statement of Activities.

FINANCIAL HIGHLIGHTS

Key financial highlights associated with the Primary Governmentfor fiscal year 2010 are as follows:

On the District-widefinancial statements:

District-wide net assets for the Primary Government at June 30, 2010, were $22.0 million. Net assets reflect the difference between all assets of the School District (including capital assets, net of depreciation) and all liabilities, both short-term and longterm. The net assets at June 30, 2010, of $22.0 million represented an increase of $1.0 million in net assets when compared to the prior year net assets.

The School District had almost $18.2 million in expenses relating to governmental activities; only $12.3 million of these expenses were offset by program specific charges for services, grants and contributions. However, general revenues (primarily property and sales taxes) of almost $7.0 million were adequate to provide for these programs.

As stated above, general revenues accounted for almost $7.0 million or about 36% of all revenues totaling just over $19.2 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues.

Program Revenues
63.8%

-- Source of Revenues General Revenue Pro~ertvTaxes -16.@h
-General Revenue Sales Taxes

-
-;enera1 Revenue All Other 11.O%

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 30,2010
On the fund financial statements:
Among major funds, the General Fund had $17.4 million in revenues and $17.1 million in expenditures. The General Fund balance of just over $3.6 million at June 30, 2010, increased by roughly $265,000 from the prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
These financial statements consists of three parts; management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and required supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the District-wide and fund financial statements.
The District-wide financial statements include the 'Statement of Net Assets' and 'Statement of Activities.' These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status.
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The 'Governmental Funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. The 'Fiduciary Funds' statements provide information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. In the case of the City of Bremen School District, the General Fund, Capital Projects Funds, and Debt Service Funds are all considered to be major funds. The School District has no nonmajor funds as defined by GASB Statement 3 4 for the purposes of this report.
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understandingof the financial statements.
District-wide Statements
Since the City of Bremen School District has no operations that have been classified as "Business Activities," the District-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the Districtwide financial statements, a reader might ask the question, are we in a better financial position now than last year? The 'Statement of Net Assets' and the 'Statement of Activities' provides the basis for answering this question. These financial statements include all of the School District's assets and liabilities and use the accrual basis of accounting similar to the accounting used by most privatesector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net assets and any changes in those assets. The change in net assets is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDEDJUNE 30,2010
When analyzing District-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement of Net Assets:
Capitalize current outlays for capital assets Depreciate capital assets Report long-term debt as a liability Calculate revenue and expense using the economic resources measurement focus and the accrual basis of accounting Allocate net assets as follows:
o Net Assets invested in capital assets, net of related debt o Restriktednet assetsare those with constraints placed on the use by external sources
such as creditors, grantors, contributors or laws and regulations. o Unrestrictednetassetsarenet assets that do not meet any of the above restrictions.
Fund Financial Statements
The School District uses many funds or subfunds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detail information about the School District's significant or major funds. As discussed previously, the School District has no nonmajor funds as defined by generally accepted accounting principles.
The School District has two kinds of funds as discussed below:
Governmental Funds - Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are reconciled in the financial statements.
Fiduciarv Funds - The School District is the trustee, or fiduciary, for assets that belong to clubs, organizations and others within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE
Net assets, which is the difference between total assets and total liabilities, is one indicator of the financial condition of the School District. When revenues exceed expenses, the result is an increase in net assets. When expenses exceed revenues, the result is a decrease in net assets. The relationship between revenues and expenses can be thought of as the School District's operating results. The School District's net assets, as measured in the Statement of Net Assets, can be one way to measure the School District's financial health, or financial position. Over time, increases or

- CITY OF BREMEN BOARDOF EDUCATION HARALSON COUNTY
MANAGEMENTS DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 30,2010
decreases in the School District's net assets, as measured in the Statement of Activities are one indicator of whether its financial health is improving or deteriorating. However, the School District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health of the School District.
In the case of the City of Bremen School District, assets exceeded liabilities by $22.0 million at June 30, 2010. To better understand the School District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the net asset category. For example, of the $22.0 million of net assets, just over $1.4 million was restricted for bus replacement, continuation of Federal programs, debt service and ongoing capital projects. Accordingly, these funds were not available to meet the School District's ongoing obligations to citizens and creditors.
In addition, the School District had almost $17.5 million (net of related debt) invested in capital assets (e.g., land, buildings, and equipment). The School District uses these capital assets to provide educational services to students within geographic boundaries served by the School District. Because of the very nature and on-going use of the assets being reported in this component of net assets, it must be recognized that this portion of the net assets is notavailable for future spending.
The remaining balance of unrestriided net assets of $3.1 million may be used to meet the School District's ongoing obligations to citizens and creditors.
Table 1provides a summary of the School District's net assets for this fiscal year as compared to the prior fiscal year.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDEDJUNE 30,2010

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2010

Year 2009*

Assets Current and Other Assets Capital Assets, Net

Total Assets

Liabilities Current and Other Liabilities Long-Term Liabilities

Total Liabilities

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted

Total Net Assets

*Amounts reported do not reflect the effect from the restatement of fiscal year 2009 net assets. See Note 2 in the Notes to the Basic Financial Statements for more information.
Total net assets increased $1.0 million in fiscal year 2010 from the prior year net assets. This change in net assets is detailed in Table 2 as presented below. Table 2 also shows the changes in net assets as compared to the prior fiscal year.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 3 0 , 2 0 1 0

Table 2 Change in Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2010

Year 2009*

Revenues Program Revenues: Chargesfor Services and Sales Operating Grants and Contributions Capital Grants and Contributions Total Program Revenues

General Revenues:

Property Taxes

For Maintenanceand Operations

$ 3,147,483 $ 3,132,176

Sales Taxes

Special Purpose Local Option Sales Tax

For Capital Projects/Debt Services

1,661,093

1,737,105

Other Sales Taxes

27,076

6,923

Grants and Contributionsnot Restricted to Specific Programs

1,216,593

1,486,795

Investment Earnings

48,360

118,853

Miscellaneous

851.996

830.736

Total General Revenues

Total Revenues

Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Short-Term and Long-Term Debt

461,665

632,061

Total Expenses

Increase in Net Assets

*Amounts reported do not reflect the effect from the restatement of fiscal year 2 0 0 9 net assets. See Note 2 in the Notes to the Basic Financial Statements for more information.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDEDJUNE 30,2010

Cost of ProvidingServices
The Statement of Activities shows the cost of program services and the charges for services and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity as compared to the prior fiscal year.
Table 3 Governmental Activities

Total Cost of Services

Fiscal

Fiscal

Year 2010

Year 2009"

Net Cost of Services

Fiscal

Fiscal

Year 2010

Year 2009*

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

Educational Media Services

General Administration

School Administration

Business Administration

Maintenance and Operation of Plant

Student Transportation Services

Central Support Services

Other Support Services

Operations of Non-Instructional Services

Enterprise Operations

Community Services

Food Services

Interest on Short-Term and Long-Term Debt

12,170,957 $
643,564 329,251 336,985 392,032 2088,687 150,494 1,169,866
359,258
793,725 46L665

12319,737 $
620,051 460,755 310,042 361,469 2130,866 115,895
2 134,197
275,171 142,209 856,191 632,061

3,287,364 $
404,621 250,384 87,634 -145,783 500,336 150,222 569,436
134,533
-2,212 461,665

2,497,086
476,134 179,079 85,122 -151,010 558,421 114,224 552,561
147,505 22,633 26,056 632,062

Total Expenses

*Amounts reported do not reflect the effect from the restatement of fiscal year 2009 net assets. See Note 2 in the Notes to the Basic Financial Statements for more information.
Expenses for fiscal year 2010 increased about 3% from prior year expenses while the net cost of services for the School District increased about 10%. At first glance, it appears the School District had to provide more local funding to continue to sustain its educational programs in fiscal year 2010. However, the reader should note that in fiscal year 2009 almost $650,000 of capital grants revenue was reported and allocated against expenses compared to zero amounts received for Capital Outlay in fiscal year 2010. The marked variation in capital outlay funding in fiscal year 2009 vs. fiscal year 2010 blurs the comparability of the net costs of providing services on a year to year basis.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 30,2010
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS
Information about the School District's governmental funds is presented starting on Exhibit "C" of this report. Governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $19.3 million and total expenditures of $19.0 million in fiscal year 2010. Total governmental fund balances of almost $5.1 million at June 30, 2010, increased almost $0.3 million from the prior year.
General Fund Budget Highlights
The School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2010, the School District amended its general fund budget as needed.
The School District budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well.
For the General Fund, the final actual revenues of $17.4 million were greater than the final budgeted amount of $17.1 million by $0.3 million. This small variance indicates the School District did a good job in anticipating its revenuesfor fiscal year 2010 (final actual vs. final budget).
The General Fund's final actual expenditures of over $17.1 million were less than the final budget amount of $17.2 by less than $50,000. This small variance demonstrates the School District effectively managed its budget during fiscal year 2010 and actually increased its General Fund balance at June 30,2010, in spite of operating within a down economy.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
At fiscal year ended June 30, 2010, the School District had almost $27.8 million invested in capital assets, net of accumulated depreciation, all in governmental activities. These assets are made up of a broad range of items including buildings; land; land improvements; and food service, transportation and maintenance equipment.
Table 4 reflects a summary of these balances, net of accumulated depreciation, as compared to the prior fiscal year.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDEDJUNE 30,2010

Table 4 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal

Fiscal

Year 2010

Year 2009*

Land Construction In Progress Land Improvements Building and Improvements Equipment

$

1,699,889 $

117,962

161,906

25,492,200

293,511

1,673,053
134,155 25,956,706
334,583

Total

*Amounts reported do not reflect the effect from the restatement of fiscal year 2009 net assets. See Note 2 in the Notes to the Basic Financial Statements for more information.
Additional information about the School District's Capital Assets can be found in the Notes to the Basic Financial Statements.
Long-Term Debt
At June 30, 2010, the School District had almost $10.8 million in total debt outstanding which consisted totally of bond debt.
Table 5 summarizes the School District's debt as compared to the prior fiscal year.

Table 5 Debt at June 30

Governmental Activities

- -

Fiscal

Fiscal

Year 2010

Year 2009

Bonds Payable Capital Leases
Total
Additional information about the School District's debt can be found in the Notes to the Basic Financial Statements.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCALYEAR ENDED JUNE 30,2010
FACTORS BEARING ON THE SCHOOL DISTRICTS FUTURE
Currently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows:
The School District is financially stable. The School District's operating millage for fiscal year 2010 was 14.95, which produced approximately $212,500 per mill. The School District plans to fund additional capital outlays with the one percent local sales tax revenue and state capital outlay grants.
The School District is financially challenged by the State's continuing reduction of revenue estimates and subsequent reduction of state revenue appropriations to local school districts. State revenues for General Fund operations in fiscal year 2010 were about 8%less than the prior year. Further reductions of State Funding are budgeted for fiscal year 2011. Even with these reductions in resources, the School District has maintained the current millage rate of 14.95 mills for calendar year 2011. In spite of these challenges, the School District will continue to be a good steward of tax dollars while providing a quality educational opportunity.
CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Ms. Celia Edwards, Director of Finance, City of Bremen Board of Education, 504 Laurel Street, Bremen, Georgia 30110. You may also email your questions to Ms. Edwards at celia.edwards@bremencs.com.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY

- CITY OF BREMEN BOARD OF EDUCATION HARALSON COUNTY
STATEMENT OF NET ASSETS JUNE 30.2010

EXHIBIT "A"

Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories
- Deferred Charge Bond IssuanceCosts
Capital Assets Capital Assets, Non-Depreciable
Capital Assets - Depreciable(Net of Accumulated Depreciation)
~ o t Aas~sets

PRIMARY GOVERNMENT GOVERNMENTAL
ACTIVITIES

COMPONENT UNIT BREMEN
EDUCATIONAL FOUNDATION, INC.

LIABILITIES
Accounts Payable Salaries and Benefits Payable Accrued Interest Payable LongTerm Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
- Invested in Capital Assets Net of Related Debt
Restricted for Bus Replacement Continuation of Federal Programs Debt Services Capital Projects
Unrestricted Governmental Activities Brernen Educational Foundation, Inc.
Total Net Assets
Total Liabilities and Net Assets

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
STATEMENT OF ACTIVITIES FOR THE YEAR ENDEDJUNE 30,2010

GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvementof Instructional Services Educational Media Services General Administration School Administration Business Administration MaintenanceAnd Operation of Plant Services Student Transportation Service
- Support Services Central
Other Support Services Operations of Non-InstructionalServices
Enterprise Operations Food Services Interest On Short-TermAnd Long-Term Debt
Total GovernmentalActivities
COMPONENT UNIT
Bremen Educational Foundation, Inc.
General Revenues Taxes
Property Taxes For Maintenance and Operations
Sales Tax Special Purpose Local Option Sales Tax Other Sales Tax
Grants and Contributionsnot Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in NetAssets
- NetAssets Beginningof Year (Restated See Note "2")
NetAssets - End of Year

EXPENSES

PROGRAM
CHARGES FOR SERVICES

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

EXHIBIT "B"

REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

NET (EXPENSES) REVENUES

AND CHANGES IN NET ASSETS

PRIMARY

COMPONENT UNIT

GOVERNMENT

BREMEN

GOVERNMENTAL

EDUCATIONAL

ACTIVITIES

FOUNDATION, INC.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
BALANCE SHEET GOVERNMENTAL FUNDS
JUNE 30,2010

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories
Total Assets

LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Salaries and Benefits Payable Deferred Revenue
Total Liabilities
FUND BALANCES
Resewed for Bus Replacement Continuation of Federal Programs Debt Sewice Capital Projects
Unreserved Designatedfor Student Activities UndesignatedReported in: General Fund
Total Fund Balances
Total Liabilities and Fund Balances

EXHIBIT "C"
TOTAL

The notes to the basicfinancial statements are an integral part of this statement -4-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30,2010
- Total Fund Balances Governmental Funds (Exhibit"C")
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 funds. These assets consist of:
Land Land lmprovements
- Accumulated Depreciation Land lmprovements
Buildings
- Accumulated Depreciation Buildings
Construction in Progress Machinery and Equipment
- Accumulated Depreciation Machinery and Equipment
Total Capital Assets
Bond Issuance Costs (Deferred Charges)are reclassed to Assets and amortized in District-wideStatements, but reported as expenditures duringthe fiscal year bonds are issued in Governmental Fund Statements.
Taxes that are not available to payfor current period ex~endituresare deferred in the funds.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Accrued Interest on Long-Term Liabilities General Obligation Bonds Payable
Total Long-Term Liabilities
Net Assets of GovernmentalActivities (Exhibit'A")

EXHIBIT "D"

The notes to the basicfinancial statements are an integral part of this statement
- 5-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
YEAR ENDEDJUNE 30,2010

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvementof Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation
Capital Outlay Debt Services
Principal Dues and Fees Interest
Total Expenditures
Excess of Revenuesover (under) Expenditures
OTHER FINANCING SOURCES (USES1
Transfers In Transfers Out
Total Other FinancingSources (Uses)
Net Changes in Fund Balances
- Fund Balances Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

EXHIBIT "EM TOTAL

The notes to the basic financial statements are an integral part of this statement.
- 6-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30.2010
Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expendituresin Governmental Funds. However, in the Statement of Activities, the cost of CapitalAssets is allocated over their estimated useful lives as depreciation expense. In the current period. these amounts are:
Capital Outlay
DepreciationExpense- Buildings DepreciationExpense- Equipment
- DepreciationExpense Land Improvements
Excess of Capital Outlay over Depreciation Expense
Certain tax revenues are not deferred in the Statement of Activities based on availability as they are in the GovernmentalFunds.
Property Taxes July 1.2009 June 30,2010
Sales Taxes July 1,2009 June 30.2010
Bond issuancecosts are recorded as expendituresin the GovernmentalFundswhen paid, but are amortized as expense in the Governmental Activities over the life of the Bond Issued.
Unamortized Bond Costs: July 1,2009 June 30,2010
Accrued Interest on LonETerm Liabilities is reported in the Statement of Activities, but does not requirethe use of current financial resourcesand therefore is not reported as an expenditures in the Governmental Funds.
July 1.2009 June 30,2010
Repaymentof LoneTem Debt is reported as an expenditurein Governmental Funds, but the repaymentreduces Long-Term Liabilities in the Statement of NetAssets. In there current year, these amounts consist of:
Redemption of Bond Principal Payment of Capital Lease Debt
Total Long Term Debt Repayments
Change in Net Assets of Governmental Activities (Exhibit"B")

EXHIBIT "F"

The notesto the basic financial statements are an integral part of this statement. -7-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30.2010
ASSETS Cash and Cash Equivalents
LIABILITIES
Funds Held for Others

EXHIBIT "G"
AGENCY FUNDS

The notesto the basic financial statements are an integral part of this statement. -8-

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 1: DESCRIPTION OF SCHOOL DISTRICTAND REPORTING ENTITY
REPORTING ENTITY
The City of Bremen Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
DISCRETELY PRESENTED COMPONENT UNIT
The Bremen Educational Foundation, Inc. is a non-profit organization established in 2 0 0 1 as a permanent endowment created by alumni and supporters of the Bremen City School District to support the tradition of excellence in the system. The purpose of the Foundation is to improve the quality of education in the system and act as fiscal agent for donors who wish to sponsor approved projects for the system, its teachers and students. (See Note "15")
Note 2: SUMMARY OF SIGNIFICANTACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the City of Bremen Board of Education.
Dist/r*ct-wide Statements= The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchangetransactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements= The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources of the School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST), Bond Proceeds and donations to be used for the acquisition, construction or renovation of major capital facilities.
Debt Service Fund accounts for taxes (sales) legally restricted for the payment of general longterm principal, interest and payingagent's fees.
The School District reports the following fiduciary fund type:
Agency funds account for assets held by the School District as an agent for various clubs or individuals.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Propertytaxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

The State of Georgia reimburses the School District for teachers' salaries and operating costs through the Quality Basic Education Formula Earnings program (QBE). Generally teachers are contracted for the school year (July 1- June 30) and paid over a twelve month contract period, generally September 1through August 31. In accordance with the respective rules and regulations of the QBE program, the State of Georgia reimburses the School District over the same twelve month period in which teachers are paid. At June 30, the amount of teachers' salaries incurred but not paid until July and August of the subsequent year are accrued. Since the State of Georgia recognizes its QBE liability for the July and August salaries at June 30, the School District recognizes the same QBE as a receivable and revenue, consistent with symmetrical recognition.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2010, the School District adopted the Governmental Accounting and Standards Board (GASB) Statement No. 5 1, Accounting and Reporting for Intangible Assets. The provisions of this Statement generally require retroactive reporting for intangible assets acquired after June 30, 1980, with the exception of those intangible assets that have indefinite useful lives and those that are considered internally generated.
In addition, the School District adopted GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments. The provisions of this Statement impacts disclosure regarding derivative instruments entered into by the state and local governments. Derivative disclosures, if any, will be identified in Note 3.
RESTATEMENT OF PRIOR YEAR NET ASSETS
For fiscal year 2010, the School District made a prior period adjustment due to an omission, which requires the restatement of the June 30, 2010, net assets in Governmental Activities. The result is an increase in Net Assets at July 1, 2009, of $69,280.67. This change is in accordance with generally accepted accounting principles.

Governmental Activities: Net Assets, July 1,2009, as previously reported

Deferral of bond issuance costs

69,280.67

Net Assets, July 1,2009, as restated

CASH AND CASH EQUIVALENTS
Composition of Deposits Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated Section 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

INVESTMENTS
Composition of lnvestments lnvestments made by the School District in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interestearning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Georgia Fund 1administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchaseagreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration of credit risks, interest rate risks or foreign currency risks.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The City of Bremen fixed the property tax levy for the 2009 tax digest year (calendar year) on September 21,2009 (levy date). Taxes were due on December 1,2009 (lien date). Taxes collected within the current fiscal year or within 6 0 days after year-end on the 2009 tax digest are reported as revenue in the governmental funds for fiscal year 2010. The Bremen City Clerk bills and collects the property taxes for the School District, withholds $3.50 per bill as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2010, for maintenance and operations amounted to $3,178,210.60.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

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

School Operations

14.95 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $1,719,301.30 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized a t least every five years. The most recent authorization for Haralson County expires on August 12, 2012. The most recent authorization for Carroll County expires on February 13,2012.

INVENTORIES

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

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art. During the fiscal year 2010, no events or changes in circumstances affecting a capital asset that may indicate impairment were known to the School District.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization

Estimated

Policy

Useful Life

Land Land lmprovements Buildings and lmprovements Equipment Intangible Assets

All $ 10,000.00 $ 50,000.00 $ 10,000.00 $ 250,000.00

N/A 1 0 to 6 0 years 4 5 to 6 0 years
5 to 3 0 years individually determined

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "HH"

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives, with the exception of intangible assets which are amortized.
Amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, copyrights and internally generated software is computed using the straight-line method over the estimated useful lives of the assets.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. In the District-wide financial statements, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are reported as deferred charges and amortized over the term of the debt.
In the fund financial statements, the School District recognizes bond premiums and discounts, as well as bond issuance costs during the fiscal year bonds are issued. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
NET ASSETS
The School District's net assets in the District-wide Statements are classified as follows:
Invested in capital assets, net of related debt - This represents the School District's total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt.
Restricted net assets-These represent resources for which the School District is legally or contractually obligated to spend resources for bus replacement, continuation of Federal programs, debt service and capital projects in accordance with restrictions imposed by external third parties.
Unrestricted net assets - Unrestricted net assets represent resources derived from property taxes,
sales taxes, grants and contributions not restricted to specific programs, charges for services, and miscellaneous revenues. These resources are used for transactions relating to the educational and general operations of the School District, and may be used at the discretion of the Board to meet current expenses for those purposes.
FUND BALANCES
Reserved Reserves represent those portions of fund balance equity that are legally segregated for a specific future use.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 3: DEPOSITS AND INVESTMENTS

COLLATERALIZATION OF DEPOSITS

Official Code of Georgia Annotated (O.C.G.A.) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 1 1 0 percent of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. Section 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110 percent of the daily pool balance.

Acceptable security for deposits consists of any one of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

(2) lnsurance on accounts provided by the Federal Deposit lnsurance Corporation,

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,

(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National MortgageAssociation.

PRIMARY GOVERNMENT

Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a formal policy for managing custodial credit risk. At June 30,2010, the bank balances were $4,570,407.18. The amounts exposed to custodial credit risk are classified into three categories as follows:

Category 1Category 2 -
Category 3 -

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

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

Custodial Credit Risk Category

Bank Balance

Total
COMPONENT UNIT
Custodial credit risk is the risk that in the event of a bank failure, the Foundation's deposits may not be returned to it. The Foundation does not have a deposit policy for custodial credit risk. At June 30, 2010, the bank balances were $1,227,357.48. The bank balances were entirely covered by Federal depository insurance or collateralized with securities held by the pledging financial institution's trust department or agent in the Foundation's name.
CATEGORIZATION OF INVESTMENTS
The carrying amount of $1,203,844.60 of the School District's investments in Georgia Fund 1, formerly referred to as LGIP, administered by the State of Georgia, Office of Treasury and Fiscal Services is are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury and Fiscal Services for the Georgia Fund 1(Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1is
disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained
from the Georgia Department of Audits and Accounts at htt~://www.audits.aa.aov/SGD/cafr.html.
The Primary Liquidity Portfolio consists of Georgia Fund 1which is not registered with the SEC as an investment company but does operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share. The pool is an AAAm rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1may not exceed 6 0 days. The weighted average maturity for Georgia Fund 1on June 30,2010, was 4 6 days.
Note 4: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 2 - Inventories

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 5: CAPITAL ASSETS

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

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction Work In Progress

Balances July 1, 2009

Increases

Decreases

Balances June 30,2010

$ 1,673,052.50$ 26,836.00 $

0.00 $ 1,699,888.50

Total Capital Assets, Not Being Depreciated $ 1,673,052.50$ 144,798.00$

0.00 $ 1,817,850.50

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

$ 28,906,309.97 707,862.00 $ 211,508.00

$
18,906.00 38,447.00

0.00 $ 28,906,309.97 726,768.00 249,955.00

Less: Accumulated Depreciation: Buildings and lmprovements Equipment Land lmprovements

Total Capital Assets, Being Depreciated, Net $ 26,425,443.97$ -477,827.00$

0.00 $ 25,947,616.97

Governmental Activiw Capital Assets - Net $ 28,098,496.47$ -333,029.00$

0.00 $ 27,765,467.47

Current year depreciation expense by function is as follows:
Instruction Support Services
General Administration School Administration Maintenance and Operation of Plant Student TransportationServices Food Services

Note 6: INTERFUNDTRANSFERS

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

Transfer t o

Transfers From
General Fund

Capital Projects Fund

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Transfers are used to move property tax revenues collected by the General Fund to the Capital Projects Fund to pay certain rental expenses for technology equipment.

Note 7: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, and acts of God. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund from that employee's salary and benefits were paid. The School District accounts for claims with expenses/expenditures and the related liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

Claims and

Beginningof Year

Changes in

Claims

End of Year

Liability

Estimates

Paid

Liability

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1,1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $700,000.00 loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided by Midwest Employers Casualty Company to provide coverage for potential losses sustained by the Fund in excess of $700,000.00 loss per occurrence, up to $1,000,000.00, with an aggregate limit of $2,000,000.00.

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

Position Covered

Amount

Superintendent

$ 50,000.00

Note 8: OPERATING LEASES

The City of Bremen Board of Education has entered into various leases as lessee for mobile classrooms and various copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 2010, for governmental funds amounted to $5,412.00. Future minimum lease payments for these leases are as follows:

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

Year Ending

Governmental Funds

EXHIBIT "H"

Total
Note 9: LONG-TERM DEBT
CAPITAL LEASES
The City of Bremen Board of Education entered into an agreement dated April 1,2008, with the Georgia School Board Association for the construction and subsequent lease of property. Duringthe current fiscal year, the School District made an early principal payment in order to pay off this capital lease in full. The School District has no other capital lease agreements outstanding.
GENERAL OBLIGATION DEBT OUTSTANDING
General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government -Series 2006 General Government-Series 2007

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

Balance July 1,2009

Additions

Governmental Funds

Balance

Deductions

June 30.2010

Due Within One Year

G. 0 . Bonds Capital Leases

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

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

Fiscal Year Ended June 30:

General Obligation Debt

Principal

Interest

Total Principal and lnterest
Note 10: ON-BEHALF PAYMENTS
The School District has recognized revenues and costs in the amount of $31,179.91 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.
Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $27,321.61
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $3,858.30
Note 11:SIGNIFICANT CONTINGENT LIABILITIES
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 District believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 12: SUBSEQUENT EVENTS
In the subsequent fiscal year, voters authorized the School District to issue general obligation bonds in the maximum aggregate principal amount of $2,940,000.00. The proceeds from these bonds will be used to pay the cost of acquiring, constructing, and equipping a new fine arts center, renovations and improvements to the stadium at Bremen High School, renovations to athletic facilities, maintenance and transportation equipment and facilities, real estate acquisition, and real or personal property necessary in connection with such projects within the Bremen School District, together with funding capitalized interest and costs of issuance of the bonds.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

Note 13: POST-EMPLOYMENT BENEFITS
GEORGIA SCHOOL PERSONNEL EMPLOYEES POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description. The Georgia School Personnel Post-Employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Insurance Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (OCGA) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board).
Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. On average, plan members pay approximately 25 percent of the cost of the health insurance coverage.
Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "pay-as-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30,2010:
For certificated teachers, librarians and regional educational service agencies:

July 2009
August 2009 - October 2009
November 2009 -June 2010

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

For non-certificated school personnel:

July 2009 -June 2010

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

No additional contribution was required by the Board for fiscal year 2010 nor contributed to the State OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the State plan for other post-employment benefits and are subject to appropriation.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30.2010

EXHIBIT "H"

The School District's combined active and retiree contributions to the health insurance plans, which

equaled the required contribution, for the current fiscal year and the preceding two fiscal years were

as follows:

Percentage

Required

Fiscal Year

Contributed

Contribution

Note 14: RETIREMENT PLANS
TEACHERS RETlREMENTSYSTEM OF GEORGIA (TRS)
Plan Description. The TRS is a cost-sharing multiple-employer defined benefit plan created in 1943 by an act of the Georgia General Assembly to provide retirement benefits for qualifying employees in educational service. A Board of Trustees comprised of active and retired members and ex-officio State employees is ultimately responsible for the administration of TRS. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
On October 25, 1996, the Board created the Supplemental Retirement Benefits Plan of the Georgia Teachers Retirement System (SRBP-TRS). SRBP-TRS was established as a qualified excess benefit plan in accordance with Section 415 of the Internal Revenue Code (IRC) as a portion of TRS. The purpose of SRBP-TRS is to provide retirement benefits to employees covered by TRS whose benefits are otherwise limited by IRC Section 415. Beginning July 1,1997, all members and retired former members in TRS are eligible to participate in the SRBP-TRS whenever their benefits under TRS exceed the IRCSection 415 imposed limitation on benefits.
TRS provides service retirement, disability retirement, and survivor's benefits. The benefit structure of TRS is defined and may be amended by State statute. A member is eligible for normal service retirement after 3 0 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service.
Normal retirement (pension) benefits paid to members are equal to 2% of the average of the member's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 4 0 years. Early retirement benefits are reduced by the lesser of one-twelfth of 7% for each month the member is below age 6 0 or by 7% for each year or fraction thereof by which the member has less than 3 0 years of service. It is also assumed that certain cost-of-living adjustments, based on the Consumer Price Index, will be made in future years. Retirement benefits are payable monthly for life. A member may elect to receive a partial lumpsum distribution in addition to a reduced monthly retirement benefit. Death, disability and spousal benefits are also available.
Funding Policy. TRS is funded by member and employer contributions as adopted and amended by the Board of Trustees. Members become fully vested after 1 0 years of service. If a member terminates with less than 10 years of service, no vesting of employer contributions occurs, but the member's contributions may be refunded with interest. Member contributions are limited by State law to not less than 5% or more than 6% of a member's earnable compensation. Member contributions as adopted by the Board of Trustees for the fiscal year ended June 30, 2010, were

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2010

EXHIBIT "H"

5.25% of annual salary. The member contribution rate will increase to 5.53% effective July 1,2010. Employer contributions required for fiscal year 2010 were 9.74% of annual salary as required by the June 30, 2007, actuarial valuation. The employer contribution rate will increase to 10.28% effective July 1,2010.

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

Fiscal Year

Percentage Contributed

Required Contribution

Note 15: COMPONENT UNIT
The Bremen Educational Foundation, Inc. (Foundation) is a legally separate tax-exempt component unit of the City of Bremen Board of Education (School District). It was organized on December 17, 2001, as a Georgia Corporation pursuant to the provisions of the Georgia Non-Profit Corporation Code. The Foundation's governing board consists of 8 members consisting of alumni and/or local business persons plus ex-officio member to include the superintendent of the Bremen City School System. New members are elected by the Foundation Board. Although the School District does not control the timing or amount of receipts from the Foundation, the majority of resources or income thereon the Foundation holds and invests are restricted to the improvement of the quality of education of the School District and act as a fiscal agent for donors who wish to sponsor approved projects for the system, its teachers and students. Consequently, the Foundation is considered a component unit of the School District and is discretely presented in the School District's financial statements.
The Foundation utilizes the accrual method of accounting. The Foundation is subject to Statement of Financial Standards (SFAS) 117, "Financial Statement of Not-for-Profit Organizations". As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features. No modifications have been made to the Foundation's financial information in the School District's financial reporting entity for these differences. The Foundation'sfiscal year is July 1,2009, through June 30, 2010.
During the year ended June 30, 2010, the Foundation made contributions in the form of grants and gifts to the School District and related organizations in the amount of $158,337.00. These contributions consisted of gifts of $155,337.00 to the School District for a New Fine Arts Center and $3,000.00 to the Bremen PTSO for playground equipment.
Complete audited financial statements for the Foundation were not available as of the date of this report. Any inquiries or information about the Foundation can be obtained from Bremen Educational Foundation, Inc. The contact is as follows: Ms. Joanie Lowe, Treasurer, 1 2 1 Buchanan Street, Bremen, Georgia 30110, 770-537-1110, e-mail address, joanielowe@bellsouth.net.

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CITY OF BREMEN BOARD OF EDUCATION- HARALSONCOUNN
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL YEAR ENDEDJUNE 30.2010

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvementof InstructionalServices EducationalMedia Services General Administration School Administration Business Administration Maintenanceand Operation of Plant Student TransportationServices Central Support Services Other Support Services Enterprise Operations Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING USES
OperatingTransfers to Other Funds
Net Change in Fund Balances
- Fund Balances Beginning
Adjustments

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

Fund Balances - Ending
Notesto the Schedule of Revenues. Fxoendituresand Chanees in Fund Balances Budgetand Actual (1) Original and Final Budget amounts do not include budgeted revenues or expendituresof the various principal accounts. The accompanying schedule of revenues, expendituresand changes in fund balances budget and actual is presented on the modified accrual basis of accountingwhich is the basis of accounting used in the presentation of the fund financial statements.
See notesto the basic financial statements.

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
SCHEDULE OF EXPENDITURESOF FEDERAL AWARDS YEAR ENDEDJUNE 30,2010

SCHEDULE "P"

FUNDING AGENCY PROGRAM/GRANT
Agriculture. U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total U. S. Departmentof Agriculture
Education, U. S. Department of Education Technology State Grants Cluster Pass-ThroughFrom Georgia Departmentof Education Education Technology State Grants
Special Education Cluster Pass-ThroughFrom Georgia Departmentof Education Special Education ARRA- Grants to States ARRA- Preschool Grants Grants to States Preschool Grants
Total Special Education Cluster
State Fiscal Stabilization Fund Cluster Pass-ThroughFrom Georgia Departmentof Education ARRA- Education State Grants
Title I. Part A Cluster Pass-Through From Georgia Department of Education ARRA- Title IGrants to Local EducationalAgencies Title IGrants to Local EducationalAgencies
Total Title I. PartA Cluster
Other Programs Pass-ThroughFrom Georgia Departmentof Education
Career and Technical Education - Basic Grants to States
English Language Acquisition Grants ImprovingTeacher QualityState Grants
Total Other Programs
Total U. S. Departmentof Education
Health and Human Services, U. S. Department of Child Care and DevelopmentFund Cluster Pass-ThroughFrom Bright From the Start: Georgia Department of Early Care and Learning
- ARRA Child Care and DevelopmentBlock Grant
Total Federal FinancialAssistance
N/A = Not Available

CFDA NUMBER

PASS THROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,2010

SCHEDULE "2"

Notes to the Schedule of E~~enditureosf Federal Awards
(1) Includes the Federally assigned value of donated commodities for the Food Donation Program in the amount of $39,918.29.
(2) Expendituresfor the funds earned on the School Breakfast Program ($52.484.22) were not maintained separately and are included in the 2010 National School Lunch Program.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The School District did not provide Federal Assistanceto any Subrecipient.
The accompanyingschedule of expenditures of Federal awards includes the Federalgrant activity of the City of Bremen Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

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- CITY OF BREMEN BOARD OF EDUCATION HARALSON COUNTY
SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,2010
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Departmentof Quality Basic Education Direct Instructional Cost Kindergarten Program
Kindergarten Program - Early Intervention Program
Primary Grades (1-3) Program
Primary Grades - Early lntervention (1-3) Program
Upper Elementary Grades (4-5) Program
Upper Elementary Grades - Early lntervention (4-5) Program
Middle School (6-8)Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Studentswith Disabilities
- 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 ProfessionalDevelopment Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Sparsity Nursing Services Vocational Supervisors Education EqualizationFundingGrant Food Services Vocational Education Amended Formula Adjustment Other State Programs Dual Enrollment Georgia Special Needs Scholarship Fund Health Insurance NationalTeacher Certification Preschool HandicappedProgram Virtual Schools Grant
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Human Resources, Georgia Departmentof Family Connection
See notes to the basicfinancial statements.

SCHEDULE "3"
GOVERNMENTAL FUND TYPE GENERAL FUND

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDEDJUNE 30.2010

SCHEDULE V"

PROJECT
HARALSON COUNTY II PROJECTS i) Fundinga portion of the costs of the acquisition, construction and equipping and furnishing of new school buildings and facilities, including but not limited to, additional classrooms, a new middle school,
ii) a new fine arts center.
iii) and new physical education/ athletic facilities.
iv) the addition, renovation, repair. and improvement to existing school buildings and facilities, including, but not limited to, all existingschools, existing physical education/athletic facilities and the high school cafeteria,
V) the acquisition and purchase of system-wide technology and safety equipment, including but not limitedto. computer hardware and software and security and safety equipment,
vi) the acquisition and purchase of school vehicles, including, but not limited to, school buses and maintenance vehicles,
vii) the addition, renovation, repair, pavingand improvement to driveways and parkingfacilities.
viii) the acquisition and purchase of any property necessary and desirable therefore, both real and personal and the purchase of land (the "Bremen Projects")),
ix) cap~talizedInterest on the Bremen Bonds through and includingOctober 1,2007
lnterest on Bonds and Bond Administrative Fees
Total Haralson County SPLOST II Projects

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

$ 9,390,000.00 $ 16,843,573.35

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED IN PRIOR YEARS (3)

PROJECT STATUS

$ 12,488,301.40 Ongoing

$ 117.962.00

Ongoing

346,997.02 Ongoing

72,894.60

1.956.937.94 Ongoing

25,158.93

291.743.48 Ongoing

22.134.00 Ongoing Ongoing

590.00

8.788.75 Ongoing

262,809.07 Completed

453,666.64

783,539.52 Ongoing

$ 9,390,000.00 $ 16,843,573.35 $ 682,322.17 $ 16,161,251.18

CARROLL COUNTY SPLOST Ill (TANS AND LEASE PURCHASE) $ i) consistingof acquiring constructing,addingto, renovatingmodifying, repairing, improvingand equippingschools and other buildingsand facilities and acquiringany property necessaryor desirable therefor, both real and personal;
ii) acquiring real estate for the constructionof new schools and facilities;
iii) constructingand equipping new schools and facilities and acquiringany property necessary or desirabletherefor, both real and personal; including but not limitedto the followingwithout prioritizing any of such items: completion and equippingof Bremen Middle School:
iv) constructingand equippinga fourth and fifth grade academy at the Bremen Middle School site:
V) acquiring real estate for the construction of new schools and facilities, includinga new 3 5 school site;

5,530,000.00 $

5,530.000.00
$ 4,300.00 $ 22.246.00

599,262.81 Ongoing Ongoing
470.855.06 Ongoing Ongoing Ongoing

CITY OF BREMEN BOARD OF EDUCATION- HARALSON COUNTY
SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDEDJUNE 30,2010

SCHEDULE4 "

PROJECT
vi) constructingand equippinga performingarts center:
vii) makingsystem-widetechnology improvements; and acquiringmaintenanceand transpoitation vehicles.
Interest on Capital Lease and Administrative Fees
Total Carroll County SPLOST Ill (TANSand Lease Purchase)

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED IN PRIOR YEARS (3)

PROJECT STATUS

Ongoing

$ 18,347.79 $

Ongoing 35.134.75 Completed

$ 5,530,000.00 $ 5,530,000.00 $ 44.893.79 $ 1,105,252.62

(1) The School District'soriginalcost estimateas specified in the resolutioncallingfor the imposition of the Local Option Sales Tax.
(2) The School District'scurrent estimateof total cost for the projects. Includes all cost from project inceptionto complet~on.
(3) The voters of Haralson County, Carroll County, and the City of Bremen approved the impositionof a 1%sales tax to fund the above projectsand retire associated debt. Amounts expended for these projects may ~ncludesales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

See notes to the basic financial statements.

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CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
- GENERAL FUND QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES- BY PROGRAM
YEAR ENDED JUNE 30,2010

SCHEDULE "5"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-EarlyIntervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper ElementaryGrades (4-5) Program Upper ElementaryGrades-Early lnterventron (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory($12) Program Students with Disabilities Category l Category I1 Category Ill Category IV Category V
Gifted Student - Category VI
Remedial Educatron Program Alternative Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and ProfessionalDevelopment

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

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

TOTAL QBE FORMULA FUNDS

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State amended formula adjustment.

See notes to the basic financial statements.

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 856-2174

DEPARTMENOFTAUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
August 3,2011

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Bremen Board of Education
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCEAND OTHER MAllERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of City of Bremen Board of Education as of and for the year ended June30, 2010, which collectively comprise City of Bremen Board of Education's basic financial statements and have issued our report thereon dated August 3, 2011. This report was qualified for a scope limitation, as identified in the auditor's report on the basic financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.
The financial statements of Bremen Educational Foundation, Inc. (Foundation) have not been audited, and we were not engaged to audit the Foundation's financial statements as part of our audit of the School District's basic financial statements. The Foundation's financial activities are included in the School District's basic financial statements as a discretely presented component unit. We do not express an opinion for the discretely presented component unit.
Internal Control Over Financial Reeorting
In planning and performing our audit, we considered City of Bremen Board of Education's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressingour opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Bremen Board of Education's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City of Bremen Board of Education's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or

combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.
Comeliance and Other Matters
As part of obtaining reasonable assurance about whether City of Bremen Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of City of Bremen Board of Education in a separate letter dated August 3,2011.
This report is intended solely for the information and use of management, members of the City of Bremen Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted, .
CPA, CGFM

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

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
August 3,2011

Honorable Nathan Deal, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Bremen Board of Education
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WlTH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WlTH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited City of Bremen Board of Education's compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major Federal programs for the year ended June 30, 2010. City of Bremen Board of Education's major Federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major Federal programs is the responsibility of City of Bremen Board of Education's management. Our responsibility is to express an opinion on City of Bremen Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standads, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Low1 Governments, and Nun-Profit Organiations. Those etandards and 0MB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the City of Bremen Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on City of Bremen Board of Education's compliance with those requirements.
In our opinion, the City of Bremen Board of Education complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major Federal programsfor the year ended June 30, 2010.

Internal Control Over Com~liance
Management of City of Bremen Board of Education is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable t o Federal programs. In planning and performing our audit, we considered City of Bremen Board of Education's internal control over compliance with the requirements that could have a direct and material effect on a major Federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OM6 Circular A-133, but not for the purpose of expressingan opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City of Bremen Board of Education's internal control over compliance.
A deficiency in internal control over complianceexists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a Federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a Federal program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses,as defined above.
This report is intended solely for the information and use of management, members of the City of Bremen Board of Education, others within the entity, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~ u d e lWl . Hinton, CPA, CGFM State Auditor

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

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30,2010
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS No matters were reported. PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.

SECTION IV FINDINGS AND QUESTIONED COSTS

CITY OF BREMEN BOARD OF EDUCATION - HARALSON COUNTY
SCHEDULE OF FINDINGSAND QUESTIONEDCOSTS YEAR ENDED JUNE 30,2010

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements

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

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

Noncompliance material to financial statements noted:

Federal Awards

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

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

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

Identification of major programs:

CFDA Number(s)

Name of Federal Program or Cluster

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

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

Auditee qualified as low-risk auditee?

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

No matters were reported.

Ill FEDERALAWARD FINDINGSAND QUESTIONED COSTS

No matters were reported.

Unqualified Disclaimer
N 0 None Reported
N 0 None Reported
Unqualified