City of Buford Board of Education, a component unit of the City of Buford, Georgia, annual financial report for the fiscal year ended June 30, 2009 (including independent auditor's reports)

CITY OF BUFORD BOARD OF EDUCATION
A COMPONENT UNIT OF THE CITY OF BUFORD, GEORGIA
ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30,2009
(Including Independent Auditor's Reports)

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT 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 FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

B

STATEMENT OF ACTIVITIES

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 BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
- TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

3 SCHEDULE OF STATE REVENUE

27

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

2 8

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

29

SECTION I1
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNilMENTAUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A- 133

SECTION I11 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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
- TABLE OF CONTENTS -
SECTION V MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FINANCIAL

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

DEPARTMENOTF AUDITSAND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
July 21,2010

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the City of Buford 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 fwnd information (Exhibits A through H) of the City of Buford Board of Education, a component unit of the City of Buford, Georgia as of and for the year ended June 30, 2009, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Buford Board of Education's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 Buford 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.

In our opinion, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Buford Board of Education, as of June 30, 2009, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated July 21, 2010, on our consideration of the City of Buford 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 o w testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
Management's Discussion and Analysis and the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through ix and page 25 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 Buford Board of Education's basic financial statements. The accompanying supplementary information which consist 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 Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken 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,
~udselWl . Hinton, CPA, CGFM State Auditor

- CITY OF BUFORD BOARD OF EDUCATION GWINNETT COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2009
The discussion and analysis of the City of Buford School District's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2009. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance.
Financial Highlights
Key financial highlights for fiscal year 2009 are as follows:
J The School District's financial status increased during fiscal year 2009. Net assets increased approximately $2.43 million. This increase was mostly due to an increase in property taxes.
J General revenues and special item accounted for $21.9 million in revenue, or 58.4 percent of all revenues. Program specific revenues in the form of charges for services and sales, grants and contributions accounted for $15.6 million or 41.6 percent of total revenues. Total revenues were $37.5 million.
J The School District had $35.1 million in expenses related to governmental activities; only $15.6 million of these expenses were offset by program specific charges for services, grants or contributions. General revenues of $21.9 million were adequate to provide for these programs.
J Among major fwnds, the general fund had $34.6 million in revenues and other financing sources and $34.6 million in expenditures. The general h d ' s balance remained steady from fiscal year 2008 at $6.1 million.
Using the Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the City of Buford Board of Education as a financial whole, or as an entire operating entity.
The Statement of Net Assets and Statement of Activities provide information about the activities of the School District as a whole, presenting both an aggregate view of the School District's finances and a longer-term view of those finances. The fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the School District's most significant funds. In the case of the City of Buford Board of Education, the general fund is the most significant fund.

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2009
Reporting the School District as a Whole
Statement of Net Assets and Statement of Activities
While these documents contain the large number of funds used by the School District to provide programs and activities, the view of the School District as a whole looks at all financial transactions and asks the question, "How did we do financially during fiscal year 2009?" The Statement of Net Assets and the Statement of Activities answer this question. These statements include all assets and all liabilities using the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net assets and changes in those assets. This change in net assets is important because it tells the reader whether, 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 result of many factors, some financial, some not. Nonfinancial factors include the School District's local allotments base, facility conditions, required educational programs and other factors.
In the Statement of Net Assets and the Statement of Activities, the School District has one distinct type of activity:
Governmental Activities - All of the School District's programs and services are reported
here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, school activity accounts and various others.
Reporting the School District's Most Significant Funds
Fund Financial Statements
Fund financial reports provide detailed information about the School District's major funds. The School District uses two fimds to account for a multitude of financial transactions. However, these fund financial statements focus on the School District's most significant fimds. The School District's major governmental h d s are the General Fund and the District-wide Capital Projects Fund.
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 yearend available for spending in hture periods. These funds are reported using an accounting method called modiJied accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer

- CITY OF BUFORD BOARD OF EDUCATION GWINNETT COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30,2009

financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements.
Fiduciary Funds: The School District is the trustee, or Jiduciary, for assets that belong to others, such as school clubs and organizations within the school activity 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.
The School District as a Whole
The perspective of the Statement of Net Assets is of the School District as a whole. Table 1 provides a summary of the School District's net assets for fiscal year 2009 compared to fiscal year 2008, which was restated for omission of prior year capital assets.

Table I Net Assets
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

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2009

(Restated)

Total net assets increased approximately $2.43 million.

- CITY OF BUFORD BOARD OF EDUCATION GWINNETT COUNTY MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FlSCAL YEAR ENDED JUNE: 30,2009
Chart 1 provides a visual s u m m y of the School District's Statement of Net Assets for fiscal, year 2009.
Chart 1Statement of Net Assets

t Current and Other Assets w Capltal Assets, Net

r Current and Other Uabllltles

r Long-Term Uabllltles

I

Chart 2 shows revenues and special item for fiscal year 2009.
Chart 2 Revenues and Speclal Item
Charges for Sewlces and Sales OperatingGrants and Contributions CapitaIGrants and Contrlbutlorcs Property T0X SPLOST Investment Earnings IInsurance Proceeds Miscellaneous Transfer from City Government

- CITY OF BUFORD BOARD OF EDUCATION GWINNETT COUNTY MANAGEmNT'S DISCUSSION AND ANALYSIS IFOR THE FISCAL YEAR ElWEID JUIQ 30,2009
Chart 3 shows expendituresfor the Schaol District for f l d year 2009.
Chart 3 Expenditures
Instruction
Pupilk w l m r Improvement d lnstructlonal
MeeP
Educational Medla Services IGeneral Adminlstratlon m School Adminlstratlon 8 Business Administration
Maintenance and Operation of Plant Student TransportationSerulces
Other Support:knrlces
. ..
i n t e r p h Operations :omrnunl ty Services - .:ood Services

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2009

Table 2 shows the changes in net assets for fiscal year 2009 compared to the changes in net assets for fiscal year 2008, which was restated for omission of prior year capital assets.
Table 2 Change in Net Assets

Revenues Program Revenues Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2009

(Restated)

$

1,956,975 $

2,353,560

13,648,114

15,160,703

21,052

20,395

Total Program Revenues

$

15,626,141 $

17,534,658

General Revenues: Taxes Property Taxes For Maintenanceand Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Investment Earnings Insurance Proceeds Miscellaneous
Special Item Transfer from City Government

Total General Revenues and Special Items

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

Total Expenses

Increase in Net Assets

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30,2009

Governmental Activities

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services comparing fiscal year 2009 with fiscal year 2008, which was restated for omission of prior year capital assets. That is, it identifies the cost of these services supported by tax revenue and unrestricted State entitlements.

Table 3 Governmental Activities

Total Cost of Services

Fiscal

Fiscal

Year 2008

Year 2009

(Restated)

Net Cost of Services

Fiscal

Fiscal

Year 2008

Year 2009

(Restated)

Instruction

$

Support Services

Pupil Services

Improwment of Instructional Service:

Educational Media Services

General Administration

School Administration

Business Administration

Maintenance and Operation of Plant

Student Transportation SeNices

Central Support Services

Other Support SeMces

Operations of Non-Instructional Services

Enterprise Operations

Community Services

Food Services

Total Expenses

The School District's Funds
The School District's governmental funds are accounted for using the modified accrual basis of accounting. Total governmental funds had revenues of $31.04 million, an allotment from the city in the amount of $5.7 million, and insurance proceeds of $775,000 for a total of $37.51 million in receipts. General Fund expenditures totaled $34.64 million and Capital Projects expenditures totaled $9.86 million. There was a decrease of $6.95 million in the capital projects fund. This is due to completion of the addition to the Buford Academy, and the nearing completion of both the addition to Buford High School and the new Central Office. The general fund's ending balance remained steady from fiscal year 2008 at $6.1 million.

- CITY OF BUFORD BOARD OF EDUCATION GWINNETT COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30,2009

General Fund Budgeting Highlights

The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund.

For the General Fund, the actual revenues and other sources were $34.6 million. The final actual expenditures were $34.6 million. The School District was able to maintain its financial reserves despite the precipitous decline of the economy during the fiscal year 2009 budget.

Capital Assets and Debt Administration

Capital Assets

At the end of fiscal year 2009, the School District had $50.28 million invested in capital assets, all in governmental activities. Table 4 indicates balances at June 30,2009.

Land Construction in Progress Land lmprovements Buildings and lmprovements Equipment
Total

Table 4 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal

Fiscal

Year 2008

Year 2009

(Restated)

- CITY OF BUFORD BOARD OF EDUCATION GWINNETT COUNTY
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30,2009

Debt Table 5 shows the School District's debt for compensated absences.

Table 5 Debt at June 30

Governmental Activities

Fiscal

Fiscal

Year 2009

Year 2008

Compensated Absences Intergovernmental Agreement
Total

Current Issues
The City of Buford School District is buffered from some of the financial hardships other School Districts experience by the financial support of a well run and fiscally responsible city government. However, changes in the student clientele, state and Federal regulations, and legal requirements continue to impact system operations and finance.
With 2009 state mandates, the School District had to locally fund the decrease in funding from grants in order to provide the same level of service to our students. The decrease in operating grants and contributions was $1.5 million.
With the increase in 2009 of local revenues, the School District was able to maintain the ending fund equity to provide for a stable financial future and absorb some of the downturn in the economy.
The School District has employed appropriate personnel and fimded all programs adequately.
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 information, contact Mrs. Angela Adams, Director of Finance, City of Buford School District, 2625 Sawnee Ave., Buford, Georgia 30518. You may also email your questions to angela.adams@bufordcityschools.org.

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
STATEMENT OF NET ASSETS JUNE 30,2009

EXHIBIT " A

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net Taxes State Government
Federal Government Local Government Other Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable Long-Term Liabilities:
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Bus Replacement Debt Service Unrestricted
Total Net Assets
Total Liabilitiesand Net Assets

GOVERNMENTAL ACTIVITIES

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30,2009

GOVERNMENTAL ACTIVITIES
Instruction Suppoe Services
Pupil Services Improvementof InstructionalServices Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Operations of Non-InstructionalServices Enterprise Operations Community Services Food Services
Total GovernmentalActivities
General Revenues: Taxes: Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Investment Earnings Insurance Proceeds Miscellaneous
Special ltem Transfer from City Government
Total General Revenues and Special ltem
Changes in Net Assets
Net Assets - Beginning of Year (Restated)
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

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

EXHIBIT " B

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY BALANCESHEET
GOVERNMENTAL FUNDS JUNE 30.2009

EXHIBIT "C"

ASSETS
Cash and Cash Equivalents Investments Accounts Receivable,Net Taxes State Government
Federal Government Local Other Inventories Prepaid Items
Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Cash Overdraft Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable Deferred Revenue
Total Liabilities
FUND BALANCES
Reserved for: Bus Replacement Debt Service Capital Projects
Unreserved: Designated for Student Activities Undesignated Reported in: General Fund
Total Fund Balances
Total Liabilities and Fund Balances

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

TOTAL

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30.2009
Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
CapitalAssets used in GovernmentalActivities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Taxes that are not available to pay for current period expenditures are deferred in the funds.
Long-Term Liabilities 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:
IntergovernmentalAgreement Compensated Absences
Total Long-Term Liabilities
Net Assets of GovernmentalActivities (Exhibit " A )

EXHIBIT " D

The notes to the basic financial statements are an integral part of this statement. -5-

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30,2009

EXHIBIT "E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current: 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 Other Support Services Enterprise Operations Community Services Food Services Operation
Capital Outlay Debt Service:
Principal
Total Expenditures
Excess of Revenues Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Transfer from City Government Insurance Proceeds
Total Other Financing Sources (Uses)
Net Changes in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

TOTAL

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

CITY OF BUFORD BOARD OF EDUCATION- GWINNETT COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30,2009
Total Net Changes in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenue in the funds.
Repayment of Long-Term Debt is reported as an expenditure in Governmental Funds, but the repayment reduces Long-Term Liabilities in the Statement of Net Assets. In the current year, these amounts consist of:
Intergovernmental Agreement Retirements
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in Governmental Funds. These activities consist of:
Increase in Compensated Absences
Change in Net Assets of Governmental Activities (Exhibit "B")

EXHIBIT " F

The notes to the basic financial statements are an integral part of this statement
-7-

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CITY OF BUFORD BOARD OF EDUCATION - GWlNNElT COUNTY
STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS JUNE 30,2009

EXHIBIT "G"

ASSETS Cash and Cash Equivalents
LIABILITIES Funds Held for Others

AGENCY FUNDS

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

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT " H

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The City of Buford Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board of which four members are elected by the voters and the fifth member is elected as the Chairman of the City Commission and a Superintendent appointed by the Board. The Board is not organized as a separate legal entity and does not have the power to levy taxes or issue bonds. Its budget is subject to approval by the City of Buford, Georgia. Accordingly, the School District is determined to be a component unit of the City of Buford, Georgia, which is the primary government.
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 Buford Board of Education.
District-wide Statements: The Statement of Net Assets and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the School District's Eunds, 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.

- CITY OF BUFORD BOARD OF EDUCATION GWINNETT COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30,2009

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The emphasis of fimd financial statements is on major governmental funds, each displayed in a separate column.
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) to be used for the acquisition, construction or renovation of major capital facilities.
The School District reports the following fiduciary fund type:
Agency fimds account for assets held by the School District as an agent for various funds, govements 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. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on

CITY OF BUFORD BOARD OF EDUCATION - GWINNETT COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2009

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

general long-term debt, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and 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.

RESTATEMENT OF PRIOR YEAR NET ASSETS

For fiscal year 2009, the School District made prior period adjustments due to errors or omissions which require the restatement of the June 30, 2008 net assets. These changes are in accordance with generally accepted accounting principles. June 30, 2008 net assets have been adjusted as follows:

Governmental Activities

Net assets, July 1,2008, as previously reported

$43,413,864.55

Correction of Capital Assets

Net assets, July 1,2008, 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.

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.

CITY OF BUFORD BOARD OF EDUCATION - GWJNNETT COUNTY
NOTES TO THE BASIC FINANCIAL STATEMENTS JUNE 30,2009

EXHIBIT "H"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The City of Buford Board of Commissioners fixed the property tax levy for the 2008 tax digest year (calendar year) on August 4,2008 (levy date). Taxes were due on November 20,2008 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2008 tax digest are reported as revenue in the governmental funds for fiscal year 2009. The City of Buford City Clerk bills and collects the property taxes for the School District 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, 2009, for maintenance and operations amounted to $1 1,296,713.03.

The tax millage rate levied for the 2008 tax year (calendar year) for the City of Buford Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

13.25 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $2,720,282.73 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

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 expenseslexpenditures 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.

PREPAID ITEMS

Payments made to vendors for services that will benefit periods subsequent to June 30,2009, are recorded as prepaid items.

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