1. 2009 Audit Report Highlights

2. Type of Audit Comprehensive Annual Financial Report (CAFR) -Introductory Section -Financial Section -Statistical Section -Single Audit Section

3. Transmittal Letter P. 1 – Management Responsibility P. 2 – Debt Administration P. 3 – Cash Management P. 3-5 – Major Initiatives and Achievements Pages 1 - 6 INTRODUCTORY SECTION

4. Certificates of Achievement 1983 Association of School Business Officials International – only 14 Iowa School Districts received this in 2008 1985 Governmental Finance Officers Association of the United States and Canada – only 9 Iowa School Districts received this in 2008 Pages 7-8

5. Management’s Discussion & Analysis 2009 Financial Highlights –All funds total net asset increased by $344,138 (p. 19) –General Fund Balance increased by $343,709 –Redemption of $5,425,000 of 1998 and 1999 bonds from the Capital Project Fund –School Nutrition Fund Balance decreased by $71,849 due to cost of closing down the Junior High cafeteria and the start up, renovation, and addition to their new cafeteria –Child Care Fund Balance increased by $5,698 –Student Activity Fund decreased by $25,750 including $25,461 from the high school athletics fund balance for the second year in a row Page 15 FINANCIAL SECTION

6. Economic Factors – District Future Local, State and National Economy Possible Decline in Enrollment Page 24

7. Governmental Activities General Fund Student Activity Fund Debt Service Capital Projects – PPEL, Sales Tax Management Fund Page 26-31

8. Governmental Funds General Fund Undesignated Fund Balance 2007 2008 2009 2,422,773 3,359,636 3,629,572 Page 28

9. Governmental Funds (cont) Undesignated Fund Balance Management Fund788,673926,035 1,001,797 Activity Fund353,424321,252 294,542 Physical Plant &593,350631,590 790,061 Equipment Fund (PPEL) 200720082009 Page 28

10. Governmental Funds (cont) Capital Projects Fund Undesignated Fund Balance Page 28 Sales Tax 6,317,073 2,467,166 2,888,503 200720082009

11. Business Type Activities School Nutrition Day Care Internal Services – Self-Funded Health Page 32-36

12. Business-Type Funds Undesignated Fund Balance Daycare 181,688 211,457 218,480 School 508,242 531,121 465,650 Nutrition 2007 2008 2009 Page 32

13. Internal Service Fund Undesignated Fund Balance Self-Funded 2,123,051 1,852,846 1,092,325 Health 2007 2008 2009 Page 32

14. Agency Fund Due to Other Groups 2007 20082009 20,435 12,129 11,716 Page 36

15. Pages 61-98 P. 62-68 Financial Trends P. 69-72Revenue Capacity P. 73-78Debt Capacity P. 79-81Demographic and Economic P. 82-85Operating Information P. 86-98Miscellaneous STATISTICAL SECTION

16. P. 69 Taxable Value Last Ten Years P. 83Free and Reduced Last Ten Years P. 84-85School Building Last Ten Years P. 92Official Enrollment by Grade Last Ten Years P. 96Average Salaries by Education P. 97Settlement Trends Last Ten Years P. 98Solvency Ratio Last Ten Years STATISTICAL SECTION (cont)

17. Federal Awards Total Federal Awards$1,445,979 Pages 99-100 Title IPages 101

18. Schedule of Findings and Questioned Costs

19. Part II Findings Related to Basic Financial Statements A.Inventory Controls in Place - Building stockpiling supplies – same audit comment from 2006 B.Clothing Purchased for Staff - Clothing should be taxable or staff must pay for clothing C.Additional Compensation - Cell phones – documentation will be required - Non-overnight travel will become taxable and the policy will be reviewed Page 106

20. Part III Findings and Questioned Cost for Federal Awards No Matters of Non-Compliance Page 107

21. Part IV Statutory Findings Related to Required Statutory Reporting Page 109 D. Business Transaction 1) Transparency of transactions for purchases 2) Conflict of interest for Bill Hagge