FLORIDA DEPARTMENT OF EDUCATION SUPERINTENDENT S ANNUAL FINANCIAL REPORT (ESE 145) DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY

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2 CONTENTS: Return completed form to: Department of Education Office of Funding and Financial Reporting 325 W. Gaines St., Room 824 Tallahassee, FL FLORIDA DEPARTMENT OF EDUCATION SUPERINTENDENT S ANNUAL FINANCIAL REPORT (ESE 145) DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY For the Fiscal Year Ended June 30, 2008 PAGE # Minimum Reporting Exhibit A-1 Management s Discussion and Analysis Exhibit B-1 Statement of Net Assets Exhibit B-2 Statement of Activities Exhibit C-1 Balance Sheet Governmental Funds Exhibit C-2 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets Exhibit C-3 Statement of Revenues, Expenditures and Changes in Fund Balances Exhibit C-4 Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Exhibit C-5 Statement of Net Assets Proprietary Funds Exhibit C-6 Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds Exhibit C-7 Statement of Cash Flows Proprietary Funds Exhibit C-8 Statement of Fiduciary Net Assets Exhibit C-9 Statement of Changes in Fiduciary Net Assets Not Used Exhibit C-10 Combining Statement of Net Assets Major and Nonmajor Component Units Exhibit C-11a-d Combining Statement of Activities Major and Nonmajor Component Units There are No Major Component Units-Pages 14, 15 & 17 Not Used Exhibit D-1 Notes to the Financial Statements Exhibit E-1 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual General Fund Exhibit E-2a-c Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual Major Special Revenue Funds N/A The Superintendent s Annual Financial Report (ESE 145) for the fiscal year ended June 30, 2008, was submitted in accordance with Rule 6A , FAC (Section (12)(b), F.S.). This report was approved by the school board on August 28, District Superintendent s Signature Date ESE 145

3 Exhibit A-1 MANAGEMENT S DISCUSSION AND ANALYSIS The management of the Santa Rosa County District School Board has prepared the following discussion and analysis to a) assist the reader in focusing on significant financial issues, b) provide an overview of the District s financial activities, c) identify changes in the District s financial position, d) identify material deviations from the approved budget, and e) highlight significant issues in individual funds. Because the information contained in the Management s Discussion and Analysis is intended to highlight significant transactions, events, and conditions, it should be considered in conjunction with the District s financial statements and notes to financial statements found on pages 2 through 18. FINANCIAL HIGHLIGHTS Key financial highlights for the fiscal year are as follows: In total, net assets increased $20,226,238, which represents a 9.79 percent increase from the fiscal year. Overall, the District s financial status improved from the fiscal year. General revenues total $204,822,375, or percent of all revenues. Program specific revenues in the form of charges for services, operating grants and contributions, and capital grants and contributions total $32,428,128, or percent. Expenses total $216,488,774; only $32,428,128 of these expenses are offset by program specific charges, with the remainder paid from general revenues. Total revenues exceed total expenses by $20,761,728. General Fund expenditures exceed revenues by $1,428,898. This may be compared to the fiscal year s results in which General Fund expenditures exceed revenues by $653,602. The unreserved fund balance of the General Fund, representing the net current financial resources available for general appropriation by the Board, totals $13,921,559 at June 30, OVERVIEW OF THE FINANCIAL STATEMENTS The basic financial statements consist of three components: Government-wide financial statements. Fund financial statements. Notes to financial statements. Government-Wide Financial Statements The government-wide financial statements provide both short-term and long-term information about the District s overall financial condition in a manner similar to those of a private-sector business. The statements include a statement of net assets and a statement of activities that are designed to provide consolidated financial information about the governmental and business-type activities of the primary government presented on the accrual basis of accounting. The statement of net assets provides information about the government s financial position, its assets and liabilities, using an economic resources measurement focus. The difference between the assets and liabilities, the net assets, is a measure of the financial health of the District. The statement of activities presents information about the change in the District s net assets, the results of operations, during the fiscal year. An increase or decrease in net assets is an indication of whether the District s financial health is improving or deteriorating. The government-wide statements present the District s activities in three categories: 1.1

4 Exhibit A-1 Governmental activities This represents most of the District s services, including its educational programs: basic, vocational, adult, and exceptional education. Support functions such as transportation and administration are also included. Local property taxes and the State s education finance program provide most of the resources that support these activities. Business-type activities The District charges fees to cover the cost of certain services it provides to members of the Gateway Student System Consortium for which the District is the fiscal agent. Component units The District presents three separate legal entities in this report which meet the criteria for inclusion provided by generally accepted accounting principles. The Santa Rosa School Board Leasing Corporation is reported as a blended component unit. The financial information for this component unit is included as an integral part of the financial information presented for the District. The Learning Academy, Inc., and the Santa Rosa Education Foundation, Inc., are reported as discretely presented component units. The financial information for these component units is presented separately from the financial information presented for the District. Fund Financial Statements Fund financial statements are one of the components of the basic financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements and prudent fiscal management. Certain funds are established by law while others are created by legal agreements, such as bond covenants. Fund financial statements provide more detailed information about the District s financial activities, focusing on its most significant or major funds rather than fund types. This is in contrast to the entity-wide perspective contained in the government-wide statements. All of the District s funds may be classified within one of three broad categories as discussed below. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, the governmental funds utilize a spendable financial resources measurement focus rather than the economic resources measurement focus found in the government-wide financial statements. The financial resources measurement focus allows the governmental fund statements to provide information on near-term inflows and outflows of spendable resources, as well as balances of spendable resources available at the end of the fiscal year. The governmental fund statements provide a detailed short-term view that may be used to evaluate the District s near-term financing requirements. This short-term view is useful when compared to the long-term view presented as governmental activities in the government-wide financial statements. To facilitate this comparison, both the governmental funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund balances provide a reconciliation of governmental funds to governmental activities. The governmental funds balance sheet and statement of revenues, expenditures, and changes in fund balances provide detailed information about the District s most significant funds. The District s major funds are the General Fund and the Capital Projects Other Fund. Data from the other governmental funds are combined into a single, aggregated presentation. The District adopts an annual appropriated budget for its governmental funds. A budgetary comparison schedule has been provided for the General Fund to demonstrate compliance with the budget. Proprietary Funds. Proprietary funds may be established to account for activities in which a fee is charged for services. The District charges fees to cover the cost of certain services it provides to members of the Gateway Student System Consortium for which the District is the fiscal agent. 1.2

5 Exhibit A-1 Fiduciary Funds. Fiduciary funds are used to report assets held in a trustee or fiduciary capacity for the benefit of external parties, such as student activity funds. Fiduciary funds are not reflected in the government-wide statements because the resources are not available to support the District s own programs. In its fiduciary capacity, the District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes. The District uses agency funds to account for the financial resources of the District s pretax flexible benefits plan and the school internal funds which are used to account for moneys collected at the schools in connection with school, student athletic, class, and club activities. Notes to Financial Statements The notes provide additional information that is essential for a full understanding of the data provided in the government-wide and fund financial statements. GOVERNMENT-WIDE FINANCIAL ANALYSIS Net assets may serve over time as a useful indicator of a government s financial position. The following is a summary of the District s net assets as of June 30, 2008, compared to net assets as of June 30, 2007: Governmental Net Assets, End of Year Business-Type Activities Activities Current and Other Assets $ 71,639, $ 67,162, $ 351, $ 276, $ 71,990, $ 67,438, Capital Assets 221,252, ,324, ,252, ,324, Total Assets 292,891, ,486, , , ,242, ,762, Long-Term Liabilities 60,832, ,333, , , ,026, ,510, Other Liabilities 6,972, ,617, , , ,974, ,620, Total Total Liabilities 67,805, ,951, , , ,001, ,131, Net Assets: Invested in Capital Assets - Net of Related Debt 181,529, ,439, ,529, ,439, Restricted 43,393, ,069, , , ,549, ,165, Unrestricted 162, ,025, , ,025, Total Net Assets $ 225,085, $ 206,534, $ 155, $ 96, $ 225,241, $ 206,631, The largest portion of the District s net assets (80.65 percent) reflects its investment in capital assets (e.g., land, buildings, furniture and equipment), less any related debt still outstanding. The District uses these capital assets to provide services to students; consequently, these assets are not available for future spending. The restricted portion of the District s net assets (19.28 percent) represents resources that are subject to external restrictions on how they may be used. The unrestricted portion of the District s net assets (0.07 percent) may be used to meet ongoing obligations to students, employees, and creditors. Operating results for the fiscal years ended June 30, 2008, and June 30, 2007, are as follows: 1.3

6 Exhibit A-1 Operating Results for the Year Governmental Business-Type Total Activities Activities Program Revenues: Charges for Services $ 7,840, $ 7,756, $ 567, $ 367, $ 8,407, $ 8,123, Operating Grants and Contributions 10,676, ,009, ,676, ,009, Capital Grants and Contributions 13,343, ,205, ,343, ,205, General Revenues: Property Taxes, Levied for Operational Purposes 51,904, ,010, ,904, ,010, Property Taxes, Levied for Capital Projects 12,643, ,021, ,643, ,021, Local Sales Tax 5,697, ,900, ,697, ,900, Grants and Contributions Not Restricted to Specific Programs 128,479, ,847, ,479, ,847, Unrestricted Investment Earnings 2,777, ,937, , , ,794, ,957, Miscellaneous 3,302, ,925, ,302, ,925, Total Revenues 236,665, ,613, , , ,250, ,000, Functions/Program Expenses: Instruction 118,576, ,458, ,576, ,458, Pupil Personnel Services 9,051, ,043, ,051, ,043, Instructional Media Services 3,031, ,017, ,031, ,017, Instruction and Curriculum Development Services 5,294, ,909, ,294, ,909, Instructional Staff Training Services 1,440, ,752, ,440, ,752, Instruction Related Technology 2,175, ,800, ,175, ,800, Board of Education 437, , , , General Administration 798, , , , School Administration 13,158, ,600, ,158, ,600, Facilities Acquisition and Construction 2,611, ,728, ,611, ,728, Fiscal Services 1,142, ,210, ,142, ,210, Food Services 10,035, ,076, ,035, ,076, Central Services 2,189, ,665, ,189, ,665, Pupil Transportation Services 14,078, ,074, ,078, ,074, Operation of Plant 13,363, ,134, ,363, ,134, Maintenance of Plant 8,650, ,309, ,650, ,309, Administrative Technology Services 1,339, , ,339, , Community Services 1,721, ,696, ,721, ,696, Interest on Long-Term Debt 2,203, ,931, ,203, ,931, Loss on Disposal of Capital Assets Unallocated Depreciation Expense 4,663, ,582, ,663, ,582, Gateway Student System Consortium 525, , , , Total Functions/Program Expenses 215,962, ,294, , , ,488, ,709, Increase (Decrease) in Net Assets Before Special and Extraordinary Items 20,702, ,319, , (28,682.49) 20,761, ,290, Special Item - Surplus Sale Loss & Land Audit Adj (535,489.95) (535,489.95) - Extraordinary Item - Loss Recoveries - Increase (Decrease) in Net Assets $ 20,167, $ 18,319, $ 59, $ (28,682.49) $ 20,226, $ 18,290, Significant changes in revenues and expenses that contribute to the change in net assets were as follows: Program Revenues: Capital grants and contributions increased by $1,138,721, or 9.33 percent, mainly due to an increase in Class Size Reduction Construction funding. General Revenues: Property tax revenues increased by $2,516,145, or 4.06 percent, mainly due to an increase in the taxable value of county properties. General Revenues: Grants and contributions not restricted to specific programs increased by $5,631,808, or 4.58 percent, mainly due to an increase in Class Size Reduction operating funds. 1.4

7 Exhibit A-1 Maintenance of plant expenses decreased by $1,659,092, or percent, due to a decrease in maintenance and repairs related to newer facilities, budget cuts, and satisfying safety requirements. Instructional expenses increased by $6,118,731, or 5.44 percent, due mainly to a 4.35 percent increase in the base pay of instructional staff. Instructional expenses remain at approximately half of total government expenses, representing percent of total governmental expenses in the fiscal year. The increase in net assets of $59,142 for the business-type activities resulted primarily from an increase in charges for services to consortium members. FINANCIAL ANALYSIS OF THE DISTRICT S FUNDS Major Governmental Funds The General Fund is the chief operating fund of the District. At the end of the fiscal year, the unreserved fund balance is $13,921,559, while the total fund balance is $22,868,544. The unreserved fund balance decreased by $5,070,085, while the total fund balance decreased by $706,968, during the fiscal year. The Capital Projects Other Fund has a total fund balance of $23,085,535, of which $6,002,482 is reserved for encumbrances and $17,083,053 is unreserved. The fund balance increased by 7.33 percent during the fiscal year due in part to the continued construction of a new elementary school. The Capital Improvement Fund has a total fund balance of $8,535,481 of which $3,974,756 is reserved for encumbrances and $4,560,725 is unreserved. The fund balance increased by percent during the fiscal year due to continued construction and renovation at various sites. In the governmental funds, revenues by source for the fiscal year were as follows: Revenues By Source Local 36.41% Federal Direct 1.26% Federal Through State 6.75% State 55.58% The largest revenue source is the State of Florida. Revenues from State sources for current operations are primarily received through the Florida Education Finance Program (FEFP) funding formula. The FEFP formula utilizes student enrollment data, and is designed to maintain equity in funding across all Florida school districts, taking into consideration the District s funding ability based on the local property tax base. Other State revenues are primarily for funding specific projects. State revenues 1.5

8 Exhibit A-1 increased by $7,810,588, or 6.21 percent, primarily due to increases in class size reduction operating and construction funding. GENERAL FUND BUDGETARY HIGHLIGHTS The District s budgets are prepared and amendments are made according to Florida law. The most significant budgeted fund is the General Fund. During the course of the fiscal year, the District amended its General Fund budget several times, which resulted in an increase in total budgeted expenditures amounting to $5,589,729, or 2.97 percent. At the same time, final budgeted revenues were greater than the original budgeted amounts by $1,075,460. This resulted in a final budgeted ending fund balance of $10,603,477, or percent less than the ending fund balance included in the original budget. Actual revenues were $1,236,651 less than final budgeted amounts, whereas actual expenditures were $14,686,664 less than final budget amounts. Positive budget variances occurred in all functions. The actual ending fund balance exceeded the estimated fund balance contained in the final amended budget by $12,265,067. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The District s investment in capital assets for its governmental activities as of June 30, 2008, amounts to $221,252,011 (net of accumulated depreciation). This investment in capital assets includes land; land improvements; improvements other than buildings; buildings and fixed equipment; furniture, fixtures, and equipment; motor vehicles; construction in progress; and audio visual materials and computer software. Major capital asset events during the current fiscal year included the completion of several major construction projects and the beginning of several new construction projects. Construction in progress at June 30, 2008, includes: Berryhill Elementary School Classroom Additions/Resource Rooms Central High School Weight Room S.S. Dixon Intermediate School and Sims Middle School Classroom Additions S.S. Dixon Primary School Kitchen Cafeteria Construction Gulf Breeze Elementary School Kitchen, Cafeteria, and Stage Additions Gulf Breeze High School Athletic Field House/Fire Alarm Jay High School Press Box/Main Building Repair Milton High School Classroom Additions/Gang Toilet Renovation Navarre High School Cafeteria Expansion Pace High School Field House W.H. Rhodes Elementary School Classroom Additions/Sprinkler Transportation Fuel Tank Replacement Woodlawn Beach Middle School Classroom Additions 1.6

9 Exhibit A-1 Additional information on the District s capital assets and the District s major remaining construction contract commitments can be found in Notes 4 and 15, respectively, to the financial statements. Debt Administration At June 30, 2008, the District has total long-term debt outstanding of $42,748,572. This amount includes $7,670,000 of bonds payable and $35,078,572 of certificates of participation payable. During the fiscal year, retirement of debt principal totaled $1,815,000. Additional information on the District s long-term debt can be found in Notes 5 through 8 to the financial statements. OTHER MATTERS OF SIGNIFICANCE Florida is experiencing an economic slowdown similar to the rest of the nation. Two-thirds of the School District s operating budget comes from State of Florida funding. The primary source of income for the State is the states sales tax. As economic conditions worsen, the state sales tax continues to decrease. The District experienced budget cuts in October and again in March for a total of over $4.4 million. An already significantly lower level of funding from the State has now gotten worse. The Florida Department of Education has already begun withholding 1% of the School District s funds each quarter with the possibility that those funds will never be released. Many cost-saving measures have already been put into place in the School District. The Board voted for a three tier bus system which has projected savings of over $1 million. Staffing reductions and reassignments have a projected savings of over $1.2 million. Property and casualty insurance premiums will reduce by over a $1 million in the fiscal year. A budget task force committee was established to generate cost-saving ideas. Some suggestions that have been discussed and/or implemented are reducing substitute teacher funding at each school, a $10,000 retirement incentive, utility expense savings by shutting down computers each night, and a partial sick leave payout. As the School District has grown, student system needs have changed from what they once were. Therefore, the School District made the decision to withdraw from the Gateway Student System Consortium. An August 2008 payment was made to the Panhandle Area Educational Consortium for a partial fund balance payout. The remainder of the fund balance will be paid in 2008 once all outstanding expenditures have been paid. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the Santa Rosa County District School Board s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Assistant Superintendent for Finance, Santa Rosa County District School Board, 5086 Canal Street, Milton, Florida Information is also available on the World Wide Web at 1.7

10 Exhibit B-1 Page 2 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY STATEMENT OF NET ASSETS June 30, 2008 Primary Government Account Governmental Business-type Component ASSETS Number Activities Activities Total Units Cash and Cash Equivalents ,404, , ,755, , Investments ,873, ,873, Taxes Receivable, Net , , Accounts Receivable, Net , , Interest Receivable Due from Reinsurer Deposits Receivable Due from Other Agencies ,140, ,140, , Internal Balances 0.00 Inventory , , Prepaid Items , Restricted Assets: Cash with Fiscal Agent Deferred Charges: Issuance Costs 0.00 Noncurrent Assets: Other Post-employment Benefits Obligation (asset) ,022, ,022, Capital Assets: Land ,798, ,798, , Land Improvements - Nondepreciable ,832, ,832, Construction in Progress ,333, ,333, Improvements Other Than Buildings ,968, ,968, , Less Accumulated Depreciation 1329 (9,422,550.95) (9,422,550.95) (112,218.00) Buildings and Fixed Equipment ,657, ,657, , Less Accumulated Depreciation 1339 (70,419,469.71) (70,419,469.71) (641.00) Furniture, Fixtures and Equipment ,106, ,106, , Less Accumulated Depreciation 1349 (9,877,701.18) (9,877,701.18) (28,762.00) Motor Vehicles ,492, ,492, , Less Accumulated Depreciation 1359 (4,315,608.76) (4,315,608.76) (17,054.00) Property Under Capital Leases Less Accumulated Depreciation Audio Visual Materials , , Less Accumulated Depreciation 1388 (20,196.37) (20,196.37) Computer Software ,632, ,632, Less Accumulated Amortization 1389 (4,528,708.11) (4,528,708.11) Total Assets 293,913, , ,264, , LIABILITIES AND NET ASSETS LIABILITIES Salaries and Wages Payable ,816, , ,818, , Payroll Deductions and Withholdings ,282, ,283, Accounts Payable ,250, ,250, Judgments Payable , , Construction Contracts Payable Construction Contracts Retainage Payable , , Due to Fiscal Agent Accrued Interest Payable Deposits Payable , , Due to Other Agencies , , Sales Tax Payable Deferred Revenue Estimated Unpaid Claims , , Estimated Liability for Claims Adjustment Estimated Liability for Arbitrage Rebate Noncurrent Liabilities: Portion Due Within One Year: Section , F.S., Notes Payable Notes Payable Obligations Under Capital Leases , Bonds Payable , , Liability for Compensated Absences ,973, ,973, Certificates of Participation Payable ,239, ,239, Estimated Liability for Long-Term Claims Other Post-employment Benefits Obligation , , Estimated PECO Advance Payable Estimated Liability for Arbitrage Rebate Portion Due After One Year: Notes Payable Obligations Under Capital Leases , Bonds Payable ,040, ,040, Liability for Compensated Absences ,111, , ,304, Certificates of Participation Payable ,838, ,838, Estimated Liability for Long-Term Claims Other Post-employment Benefits Obligation , , Estimated PECO Advance Payable Estimated Liability for Arbitrage Rebate Total Liabilities 68,827, , ,023, , NET ASSETS Invested in Capital Assets, Net of Related Debt ,529, ,529, , Restricted For: Categorical Carryover Programs ,338, ,338, Debt Service ,012, ,012, Capital Projects ,591, ,591, Other Purposes ,450, , ,606, , Unrestricted , , , Total net assets 225,085, , ,241, , Total Liabilities and Net Assets 293,913, , ,264, , The notes to the financial statements are an integral part of this statement. ESE 145

11 Exhibit B-2 Page 3 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2008 Net (Expense) Revenue Program Revenues and Changes in Net Assets Operating Capital Primary Government Account Charges for Grants and Grants and Governmental Business-type Component FUNCTIONS Number Expenses Services Contributions Contributions Activities Activities Total Units Governmental Activities: Instruction ,576, ,772, (116,804,815.12) (116,804,815.12) Pupil Personnel Services ,051, (9,051,270.80) (9,051,270.80) Instructional Media Services ,031, (3,031,209.05) (3,031,209.05) Instruction and Curriculum Development Services ,294, (5,294,546.75) (5,294,546.75) Instructional Staff Training Services ,440, (1,440,952.07) (1,440,952.07) Instruction Related Technology ,175, (2,175,412.40) (2,175,412.40) School Board , (437,346.80) (437,346.80) General Administration , (798,892.77) (798,892.77) School Administration ,158, (13,158,825.30) (13,158,825.30) Facilities Acquisition and Construction ,611, ,529, ,918, ,918, Fiscal Services ,142, (1,142,338.86) (1,142,338.86) Food Services ,035, ,843, ,743, , , Central Services ,189, (2,189,206.73) (2,189,206.73) Pupil Transportation ,078, , ,932, (7,920,463.23) (7,920,463.23) Operation of Plant ,363, (13,363,188.62) (13,363,188.62) Maintenance of Plant ,650, (8,650,721.38) (8,650,721.38) Administrative Technology Services ,339, (1,339,284.28) (1,339,284.28) Community Services ,721, (1,721,606.85) (1,721,606.85) Interest on Long-term Debt ,203, , (1,388,748.33) (1,388,748.33) Unallocated Depreciation/Amortization Expense* 4,663, (4,663,503.84) (4,663,503.84) Total Governmental Activities 215,962, ,840, ,676, ,343, (184,102,340.17) (184,102,340.17) Business-type Activities: Student System Consortium 525, , , , Daycare Operations Other Business-type Activity Total Business-type Activities 525, , , , Total Primary Government 216,488, ,407, ,676, ,343, (184,102,340.17) 41, (184,060,646.62) Component Units: Charter Schools/Foundations 1,165, , , (750,781.08) Total Component Units 1,165, , , (750,781.08) General Revenues: Taxes: Property Taxes, Levied for Operational Purposes 51,904, ,904, Property Taxes, Levied for Debt Service 0.00 Property Taxes, Levied for Capital Projects 12,643, ,643, Local Sales Taxes 5,697, ,697, Grants and Contributions Not Restricted to Specific Programs 128,479, ,479, , Investment Earnings 2,777, , ,794, , Miscellaneous 3,302, ,302, Special Items (535,489.95) (535,489.95) Extraordinary Items Transfers 0.00 Total General Revenues, Special Items, Extraordinary Items, and Transfers 204,269, , ,286, , Change in Net Assets 20,167, , ,226, , Net Assets - July 1, ,918, , ,015, , Net Assets - June 30, ,085, , ,241, , *This amount excludes the depreciation/amortization that is included in the direct expenses of the various functions. The notes to the financial statements are an integral part of this statement. ESE 145

12 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2008 Capital Improvement Other Section (2) Capital Other Total Account General F.S. Projects Governmental Governmental Number Funds Funds ASSETS Cash and Cash Equivalents ,728, ,725, ,989, ,961, ,404, Investments , ,116, ,324, ,873, Taxes Receivable, Net , , Accounts Receivable, Net , , Interest Receivable Due from Reinsurer Deposits Receivable Due From Other Funds: Budgetary Funds , , Internal Funds , , Due from Other Agencies , ,746, ,366, ,140, Inventory , , , Prepaid Items Total Assets 28,277, ,725, ,852, ,892, ,748, LIABILITIES AND FUND BALANCES LIABILITIES Salaries, Benefits and Payroll Taxes Payable ,571, , ,816, Payroll Deductions and Withholdings ,171, , ,282, Accounts Payable ,080, , , ,250, Judgments Payable , , Construction Contracts Payable Construction Contracts Payable-Retained Percentage , , , , Due to Fiscal Agent Sales Tax Payable Accrued Interest Payable Deposits Payable , , , Due to Other Agencies , , Due to Other Funds: Budgetary Funds , , , , , Internal Funds Deferred Revenue: Unearned Revenue Unavailable Revenue Total Liabilities 5,409, , , , ,081, FUND BALANCES Reserved For: Endowments State Required Carryover Programs ,338, ,338, Encumbrances ,085, ,974, ,002, ,388, ,450, Inventory , , , Other Purposes 4,198, ,198, Unreserved: Designated for, reported in: Board Approved Carryover ,921, ,921, [Specify] Undesignated, reported in: General Fund Special Revenue Funds ,587, ,587, Debt Service Funds ,012, ,012, Capital Projects Funds ,560, ,083, , ,591, Permanent Funds Total Fund Balances ,868, ,535, ,085, ,177, ,666, Total Liabilities and Fund Balances 28,277, ,725, ,852, ,892, ,748, The notes to the financial statements are an integral part of this statement. ESE 145 Exhibit C-1 Page 4

13 Exhibit C-2 Page 5 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS For the Fiscal Year Ended June 30, 2008 Total Fund Balances - Governmental Funds 64,666, Amounts reported for governmental activities in the statement of net assets are different because: Capital assets, net of accumulated depreciation, used in governmental activities are not financial resources and, therefore, are not reported as assets in the governmental funds. 221,252, Other long-term assets are not available to pay for current-period expenditures and therefore are deferred in the funds Internal service funds are used by management to charge the costs of certain activities, such as insurance, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the statement of net assets Long-term liabilities are not due and payable in the current period and, therefore, are not reported as liabilities in the governmental funds. (60,832,825.09) Total Net Assets - Governmental Activities 225,085, The notes to the financial statements are an integral part of this statement. ESE 145

14 Exhibit C-3 Page 6 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Fiscal Year Ended June 30, 2008 Capital Improvement Other Section (2) Capital Other Total Account General F.S. Projects Governmental Governmental Number Funds Funds REVENUES Federal Direct , ,362, ,993, Federal Through State and Local , ,283, ,849, State Sources ,809, ,558, ,289, ,657, Local Sources: Property Taxes Levied for Operational Purposes ,687, ,687, Property Taxes Levied for Debt Service Property Taxes Levied for Capital Projects ,643, ,643, Local Sales Taxes ,697, ,697, Other Local Revenue 5,111, , ,059, ,192, ,647, Total Local Sources ,799, ,927, ,756, ,192, ,675, Total Revenues 177,805, ,927, ,314, ,127, ,175, EXPENDITURES Current: Instruction ,092, ,891, ,984, Pupil Personnel Services ,467, ,566, ,033, Instructional Media Services ,904, ,904, Instruction and Curriculum Development Services ,714, ,566, ,281, Instructional Staff Training Services , , ,368, Instruction Related Technology ,906, , ,066, School Board , , General Administration , , , School Administration ,973, , ,174, Facilities Acquisition and Construction ,032, ,128, , ,616, Fiscal Services ,150, ,150, Food Services ,605, ,605, Central Services ,050, , ,093, Pupil Transportation Services ,331, , ,803, Operation of Plant ,349, , ,377, Maintenance of Plant ,701, , ,575, ,083, ,372, Administrative Technology Services ,404, ,404, Community Services ,572, , ,703, Debt Service: (Function 9200) Retirement of Principal ,815, ,815, Interest ,091, ,091, Dues, Fees and Issuance Costs , , Miscellaneous Expenditures Capital Outlay: Facilities Acquisition and Construction , ,411, ,202, ,072, ,714, Other Capital Outlay , , , ,078, ,440, Total Expenditures 179,234, ,809, ,040, ,186, ,271, Excess (Deficiency) of Revenues Over (Under) Expenditures (1,428,897.50) 8,117, ,274, (2,059,330.27) 6,903, OTHER FINANCING SOURCES (USES) Long-Term Bonds Issued Premium on Sale of Bonds Discount on Sale of Bonds (Function 9299) Refunding Bonds Issued Premium on Refunding Bonds Discount on Refunding Bonds (Function 9299) Certificates of Participation Issued Premium on Certificates of Participation Discount on Certificates of Participation (Function 9299) Loans Incurred Proceeds from the Sale of Capital Assets Loss Recoveries , , , , Proceeds of Forward Supply Contract Special Facilities Construction Advances Payments to Refunded Bond Escrow Agent (Function 9299) Transfers In ,158, ,298, ,457, Transfers Out 9700 (375,887.12) (5,081,569.53) (5,457,456.65) Total Other Financing Sources (Uses) 1,802, (5,081,569.53) 302, ,299, , SPECIAL ITEMS EXTRAORDINARY ITEMS Net Change in Fund Balances 373, ,036, ,576, ,240, ,226, Fund Balances, July 1, ,575, ,499, ,509, ,989, ,572, Adjustment to Fund Balances 2891 (1,080,221.49) 0.00 (1,000,311.80) 947, (1,132,976.78) Fund Balances, June 30, ,868, ,535, ,085, ,177, ,666, The notes to the financial statements are an integral part of this statement. ESE 145

15 Exhibit C-4 Page 7 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2008 Net Change in Fund Balances - Governmental Funds 7,226, Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount of capital outlays in excess of depreciation expense in the current period. 11,322, The statement of activities reflects only the gain/loss on the sale of assets, whereas the governmental funds include all proceeds from these sales. Thus, the change in net assets differs from the change in fund balances by the cost of assets sold. (359,288.39) Revenues reported in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (535,489.95) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. This is the amount by which proceeds exceeded repayments in the current period. 2,876, Expenses in the statement of activities that do not require the use of current financial resources are not reported in the governmental funds. (363,700.27) Internal service funds are used by management to charge the cost of certain activities, such as insurance, to individual funds. The net revenue of internal service funds is reported with governmental activities Change in Net Assets of Governmental Activities 20,167, The notes to the financial statements are an integral part of this statement. ESE 145

16 Exhibit C-5 Page 8 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2008 Business-type Activities - Enterprise Funds Other Account Enterprise Number Funds Totals ASSETS Current Assets: Cash and Cash Equivalents , , Investments Accounts Receivable, Net Interest Receivable Due from Reinsurer Deposits Receivable Due from Other Funds-Budgetary Due from Other Agencies Inventory Prepaid Items Total Current Assets 351, , Noncurrent Assets: Restricted Cash and Cash Equivalents Other Post-employment Benefits Obligation (asset) Capital Assets: Land Land Improvements - Nondepreciable Construction in Progress Improvements Other Than Buildings Accumulated Depreciation Buildings and Fixed Equipment Accumulated Depreciation Furniture, Fixtures and Equipment Accumulated Depreciation Motor Vehicles Accumulated Depreciation Property Under Capital Leases Accumulated Depreciation Computer Software Accumulated Amortization Total Noncurrent Assets Total Assets 351, , LIABILITIES Current Liabilities: Salaries, Benefits and Payroll Taxes Payable , , Payroll Deductions and Withholdings Accounts Payable Judgments Payable Sales Tax Payable Accrued Interest Payable Deposits Payable Due to Other Funds-Budgetary Due to Other Agencies Deferred Revenue Estimated Unpaid Claims Estimated Liability for Claims Adjustment Expense Obligations Under Capital Leases Liability for Compensated Absences Estimated Liability for Long-Term Claims Other Post-employment Benefits Obligation Total Current Liabilities 1, , Noncurrent Liabilities: Liabilities Payable from Restricted Assets: Deposits Payable Other Noncurrent Liabilities: Obligations Under Capital Leases Liability for Compensated Absences , , Estimated Liability for Long-Term Claims Other Post-employment Benefits Obligation Total Noncurrent Liabilities 193, , Total Liabilities 195, , NET ASSETS Invested in Capital Assets, Net of Related Debt Restricted for Consortium , , Unrestricted Total Net Assets 155, , Total Liabilities and Net Assets 351, , The notes to the financial statements are an integral part of this statement. ESE 145

17 Exhibit C-6 Page 9 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For the Fiscal Year Ended June 30, 2008 Business-type Activities - Enterprise Funds Other Account Enterprise Number Funds Totals OPERATING REVENUES Charges for Services , , Charges for Sales Premium Revenue Other Operating Revenues Total Operating Revenues 567, , OPERATING EXPENSES Salaries , , Employee Benefits , , Purchased Services , , Energy Services Materials and Supplies Capital Outlay , , Other Expenses , , Depreciation Total Operating Expenses 525, , Operating Income (Loss) 41, , NONOPERATING REVENUES (EXPENSES) Interest Revenue , , Gifts, Grants and Bequests Miscellaneous Local Sources Loss Recoveries Gain on Disposition of Assets Interest Expense Miscellaneous Expense Loss on Disposition of Assets Total Nonoperating Revenues (Expenses) 17, , Income (Loss) Before Operating Transfers 59, , Transfers In Transfers Out SPECIAL ITEMS EXTRAORDINARY ITEMS Change In Net Assets 59, , Net Assets - July 1, , , Adjustment to Net Assets Net Assets - June 30, , , The notes to the financial statements are an integral part of this statement. ESE 145

18 Exhibit C-7 Page 10 DISTRICT SCHOOL BOARD OF SANTA ROSA COUNTY STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Fiscal Year Ended June 30, 2008 Business-type Activities - Enterprise Funds Other Enterprise Funds Totals CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers and users 567, , Receipts from interfund services provided Payments to suppliers (172,732.48) (172,732.48) Payments to employees (341,362.64) (341,362.64) Payments for interfund services used 4, , Other receipts (payments) (970.62) (970.62) Net cash provided (used) by operating activities 57, , CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Subsidies from operating grants Transfers from other funds Transfers to other funds Net cash provided (used) by noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from capital debt Capital contributions Proceeds from disposition of capital assets Acquisition and construction of capital assets Principal paid on capital debt Interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales and maturities of investments Interest and dividends received 17, , Purchase of investments (73,293.27) (73,293.27) Net cash provided (used) by investing activities (55,845.29) (55,845.29) Net increase (decrease) in cash and cash equivalents 1, , Cash and cash equivalents - July 1, , , Cash and cash equivalents - June 30, , , Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) 41, , Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation/Amortization expense Commodities used from USDA program Change in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in interest receivable (Increase) decrease in due from reinsurer (Increase) decrease in deposits receivable (Increase) decrease in due from other funds (Increase) decrease in due from other agencies (Increase) decrease in inventory (Increase) decrease in prepaid items Increase (decrease) in salaries and benefits payable (636.04) (636.04) Increase (decrease) in payroll tax liabilities Increase (decrease) in accounts payable (334.58) (334.58) Increase (decrease) in judgments payable Increase (decrease) in sales tax payable Increase (decrease) in accrued interest payable Increase (decrease) in deposits payable Increase (decrease) in due to other funds Increase (decrease) in due to other agencies Increase (decrease) in deferred revenue Increase (decrease) in estimated unpaid claims 16, , Increase (decrease) in estimated liability for claims adjustment expense Total adjustments 15, , Net cash provided (used) by operating activities 57, , Noncash investing, capital, and financing activities: Borrowing under capital lease Contributions of capital assets Purchase of equipment on account Capital asset trade-ins Net Increase/(Decrease) in the fair value of investments Commodities received through USDA program The notes to the financial statements are an integral part of this statement. ESE 145