1. Highlights of the 2011 Audit Report Highlights of the 2011 Audit Report

2. Type of Audit Comprehensive Annual Financial Report (CAFR) Financial Report (CAFR) -Introductory Section (page 1-12) -Financial Section (page 13-62) -Statistical Section (page 63-100) -Single Audit Section (page 101-111)

3. Transmittal Letter P. 1 – Management Responsibility P. 1 – Management Responsibility P. 2 – Debt Administration P. 2 – Debt Administration P. 3 – Cash Management P. 3 – Cash Management P. 4-5 – Major Initiatives and Achievements P. 4-5 – Major Initiatives and Achievements Pages 1 - 7 INTRODUCTORY SECTION

4. Certificates of Achievement 1983 Association of School Business Officials International 1985 Governmental Finance Officers Association Page 8-9

5. Management’s Discussion & Analysis 2011 Financial Highlights The district showed an increase in net assets of $1,246,564 during the year ended June 30, 2011. The district showed an increase in net assets of $1,246,564 during the year ended June 30, 2011. The district’s General Fund Balance increased by $805,229, the Undesignated Fund Balance increased by $628,591, and the Restricted/Assigned Fund Balance increased by $176,638. The increase in the Undesignated Fund Balance is due to a combination of (1) an increase in the cash reserve levy to help increase the district’s cash reserves, and (2) limiting expenditures to be comparable to prior year expenditures. The district’s General Fund Balance increased by $805,229, the Undesignated Fund Balance increased by $628,591, and the Restricted/Assigned Fund Balance increased by $176,638. The increase in the Undesignated Fund Balance is due to a combination of (1) an increase in the cash reserve levy to help increase the district’s cash reserves, and (2) limiting expenditures to be comparable to prior year expenditures. The district’s Nutrition Fund Balance increased by $64,392. The district will be using some of the remaining balance for equipment replacement and to upgrade the point-of-sale equipment and software. The district’s Nutrition Fund Balance increased by $64,392. The district will be using some of the remaining balance for equipment replacement and to upgrade the point-of-sale equipment and software. Page 15 FINANCIAL SECTION

6. Economic Factors – District Future Election of a Republican Governor Election of a Republican Governor Election of a Republican House Election of a Republican House Federal Education Jobs Bill ending Federal Education Jobs Bill ending Closing of Printing Facility employing 279 workers Closing of Printing Facility employing 279 workers Reduction of shared funding for HR position Reduction of shared funding for HR position Page 24

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

8. Governmental Funds General Fund Unassigned Fund Balance 2009 2010 2011 2009 2010 2011 3,629,572 2,714,737 3,343,328 3,629,572 2,714,737 3,343,328 Page 26

9. Governmental Funds (cont) Restricted Fund Balance For Management Fund 1,001,797 1,082,629651,594 Activity Fund 294,542 313,465289,212 Physical Plant & 790,061 1,122,783 1,161,422 Equipment Fund Equipment Fund (PPEL) (PPEL) 200920102011 Page 28

10. Governmental Funds (cont) Capital Projects Fund Restricted Fund Balance For Page 28 Sales Tax 2,888,503 2,205,412 4,175,059 2009 2011 2010

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

12. Business-Type Funds Unrestricted Fund Balance Daycare218,480 214,630223,551 School 465,650 318,448402,012 Nutrition 2009 2010 2011 Page 32

13. Internal Service Fund Unrestricted Fund Balance Self-Funded 1,092,325 915,748 1,539,653 Self-Funded 1,092,325 915,748 1,539,653 Health Health 2009 2010 2011 Page 32

14. Agency Fund Due to Other Groups 2009 2010 2011 2009 2010 2011 11,716 11,459 13,570 11,716 11,459 13,570 Page 34

15. Pages 63-100 P. 64-70 Financial Trends P. 71-74Revenue Capacity P. 75-80Debt Capacity P. 81-83Demographic and Economic P. 84-87Operating Information P. 88-100Miscellaneous STATISTICAL SECTION

16. P. 71 Taxable Value Last Ten Years P. 85Free and Reduced Last Ten Years P. 86-87School Building Last Ten Years P. 94Official Enrollment by Grade Last Ten Years P. 97Settlement Trends Last Ten Years P. 98Average Salaries by Education P. 100Solvency Ratio Last Ten Years STATISTICAL SECTION (cont)

17. Federal Awards Total Federal Awards$1,536,317 Total Federal Awards$1,536,317 Pages 102-103

18. Schedule of Findings and Questioned Costs

19. Part II Findings Related to Basic Financial Statements - Internal Control Deficiencies A) Accounting for Student Activity Accounts – transfers made to remedy deficit accounts B) Student Activity Fund Resale Accounts – Accounts receivable were overstated since they were not collected within 60 days. Page 108-109

20. Part III Findings and Questioned Cost for Federal Awards No Matters of Non-Compliance Page 109

21. Part IV Statutory Findings Related to Required Statutory Reporting Page 109 A) Certified Budget Exceeded certified amount in support services. D) Transparency Business has been sold. No longer an issue. G) Certified enrollment overstated by 8.9.