financial statements regulatory basis and reports … · our audit was performed for the purpose of...

FINANCIAL STATEMENTS – REGULATORY BASISAND REPORTS OF INDEPENDENT AUDITOR

HARTSHORNE INDEPENDENT SCHOOL DISTRICT NO. I-1,PITTSBURG COUNTY, OKLAHOMA

JUNE 30, 2012

Audited by

SANDERS, BLEDSOE & HEWETTCERTIFIED PUBLIC ACCOUNTANTS, LLP

BROKEN ARROW, OK

2

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYSCHOOL DISTRICT OFFICIALS

JUNE 30, 2012

BOARD OF EDUCATION

President

Joe Budzinsky

Vice-President

Randy Wilcox

Clerk

Casey McCoy

Members

Todd Barrier

Michael O’Kelley

SUPERINTENDENT OF SCHOOLS

Mark Ichord

MINUTES CLERK

Janice Cowen

SCHOOL DISTRICT TREASURER

Kathryn Jennings

3

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYJUNE 30, 2012

TABLE OF CONTENTS

Page No.

School District Officials 2

Table of Contents 3-4

Independent Auditor’s Report 5-6

Report on Compliance and on Internal Control overFinancial Reporting Based on an Audit of Financial Statements- Regulatory Basis – Performed in Accordance with GovernmentAuditing Standards 7-8

Report on Compliance with Requirements Applicable to eachMajor Program and Internal Control over Compliance inAccordance with OMB Circular A-133 9-10

Disposition of Prior Year’s Reportable Conditions andMaterial Instances of Non-Compliance 11

Schedule of Audit Results, Findings and Questioned Costs 12

Combined Financial Statements – Regulatory Basis

Combined Statement of Assets, Liabilities and Fund Equity– All Fund Types and Account Groups – Regulatory Basis 13

Combined Statement of Revenues Collected, Expenditures andChanges in Cash Fund Balances – All Governmental Fund Types– Regulatory Basis 14

Combined Statement of Revenues Collected, Expenditures andChanges in Cash Fund Balances – Budget and Actual– Budgeted Governmental Fund Types – Regulatory Basis 15-16

Notes to Combined Financial Statements - Regulatory Basis 17-32

Combining Financial Statements – Regulatory Basis

Combining Statement of Assets, Liabilities and Fund Equity– All Special Revenue Funds – Regulatory Basis 33

4

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYJUNE 30, 2012

Page No.

Combining Financial Statements – Regulatory Basis – cont’d

Combining Statement of Revenues Collected, Expenditures andChanges in Cash Fund Balances – All Special Revenue Funds– Regulatory Basis 34

Combined Statement of Revenues Collected, Expenditures andChanges in Cash Fund Balances – Budget and Actual

- Special Revenue Fund Types – Regulatory Basis 35

Combining Statement of Changes in Assets and Liabilities– All Agency Funds – Regulatory Basis 36

Schedule of Expenditures of Federal Awards – Regulatory Basis 37

Schedule of Statutory, Fidelity and Honesty Bonds 38

Schedule of Accountant’s Professional Liability Insurance Affidavit 39

5

INDEPENDENT AUDITOR’S REPORT

The Honorable Board of EducationHartshorne School District No. I-1Hartshorne, Oklahoma

We have audited the accompanying fund type and account group financial statements of HartshorneSchool District No. I-1 (the District), Pittsburg County, Oklahoma, as listed in the table of contents ascombined financial statements, as of and for the year ended June 30, 2012. These financial statementsare the responsibility of the District’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United Statesand the standards applicable to financial audits contained in Government Auditing Standards, issued bythe Comptroller General of the United States. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the combined financial statements – regulatory basisare free of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the combined financial statements – regulatory basis. An audit alsoincludes assessing the accounting principles used and significant estimates made by management, aswell as evaluating the overall combined financial statement – regulatory basis presentation. We believethat our audit provides a reasonable basis for our opinion.

As discussed in Note 1, these financial statements were prepared in conformity with the accounting andfinancial reporting regulations prescribed or permitted by the Oklahoma State Department of Education,which is a comprehensive basis of accounting other than generally accepted accounting principles. Theeffect on the financial statements of the variances between these regulatory accounting practices andaccounting principles generally accepted in the United States, although not reasonably determinable,are presumed to be material.

As also discussed in Note 1, the combined financial statements – regulatory basis referred to above donot include the general fixed assets account group. The amount that should be recorded in the generalfixed assets account group is not known. If the general fixed assets account group had been included,the amount of the adjustments to the combined financial statements – regulatory basis is not known, butpresumed to be material.

In our opinion, because the District’s policy is to prepare its combined financial statements on the basisof accounting discussed in the third paragraph, and because of the omission of the general fixed assetsaccount group as discussed in the fourth paragraph, the combined financial statements referred to in thefirst paragraph do not present fairly, the financial position of the District as of June 30, 2012, or theresults of its operations for the year then ended in conformity with accounting principles generallyaccepted in the United States.

6

However, in our opinion, except for the omission of the general fixed assets account group as discussedin the fourth paragraph, the financial statements referred to above present fairly, in all material respects,the assets, liabilities, and equity arising from regulatory basis transactions of each fund type andaccount group of the District as of June 30, 2012, and the revenues collected, expenditurespaid/expenses, and cash flows of each fund type, where applicable, for the year then ended on theregulatory basis of accounting described in Note 1.

In accordance with Government Auditing Standards, we have also issued our report dated September21, 2012, on our consideration of the District’s internal control over financial reporting and on our testsof its compliance with certain provisions of laws, regulations, contracts, grant agreements and othermatters. The purpose of that report is to describe the scope of our testing of internal control overfinancial reporting and compliance and the results of that testing, and not to provide an opinion on theinternal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards and should be considered in assessingthe results of our audit.

Our audit was conducted for the purpose of forming an opinion on the fund type and account groupfinancial statements within the combined financial statements. The combining fund statements andschedules and other schedules as listed in the table of contents under other supplementary informationare presented for purposes of additional analysis. This other supplementary information has beensubjected to the auditing procedures applied in the audit of the fund type and account group financialstatements within the combined financial statements and, in our opinion, is fairly stated in all materialrespects in relation to the combined financial statements taken as a whole on the regulatory basis ofaccounting described in Note 1.

Our audit was performed for the purpose of forming an opinion on the combined financial statements –regulatory basis of the District taken as a whole. The accompanying schedule of expenditures of federalawards is presented for purposes of additional analysis as required by U.S. Office of Management andBudget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is nota required part of the combined financial statements – regulatory basis. Such information has beensubjected to the auditing procedures applied in the audit of the combined financial statements –regulatory basis and, in our opinion, is fairly stated, in all material respects, in relation to the combinedfinancial statements – regulatory basis taken as a whole.

Sanders, Bledsoe & HewettCertified Public Accountants, LLP

September 21, 2012

7

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING ANDON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF

FINANCIAL STANDARDS PERFORMED IN ACCORDANCE WITHGOVERNMENT AUDITING STANDARDS


We have audited the combined financial statements – regulatory basis of HartshorneSchool District (the District) No. I-1, Hartshorne, Oklahoma, as of and for the year endedJune 30, 2012, which, except for the omission of the general fixed assets account group,have been prepared on a basis prescribed by the Oklahoma State Department ofEducation and have issued our report thereon dated September 21, 2012. We conductedour audit in accordance with auditing standards generally accepted in the United States,and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the District’s internal control overfinancial reporting as a basis for designing our auditing procedures for the purpose ofexpressing our opinion on the financial statements, but not for the purpose of expressingan opinion on the effectiveness of the District’s internal control over financial reporting.Accordingly, we do not express an opinion on the effectiveness of the District’s internalcontrol over financial reporting.

A deficiency in internal control exists when the design or operation of a control does notallow management or employees, in the normal course of performing their assignedfunctions, to prevent, or detect and correct misstatements on a timely basis. A materialweakness is a deficiency, or a combination of deficiencies, in internal control such thatthere is a reasonable possibility that a material misstatement of the entity’s financialstatements will not be prevented, or detected and corrected on a timely basis.

Our consideration of internal control over financial reporting was for the limited purposedescribed in the preceding paragraph and would not necessarily identify all deficienciesin internal control over financial reporting that might be significant deficiencies ormaterial weaknesses. We did not identify any deficiencies in internal control overfinancial reporting that we consider to be material weaknesses, as defined above.

8

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District’s financialstatements are free of material misstatement, we performed tests of its compliance withcertain provisions of laws, regulations, contracts, and grant agreements, noncompliancewith which could have a direct and material effect on the determination of financialstatement amounts. However, providing an opinion on compliance with those provisionswas 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 arerequired to be reported under Government Auditing Standards.

This report is intended solely for the information and use of management and is notintended to be, and should not be, used by anyone other than these specified parties.


September 21, 2012

9

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TOEACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE

IN ACCORDANCE WITH OMB CIRCULAR A-133


ComplianceWe have audited Hartshorne School District (the District) No. I-1, Hartshorne,Oklahoma’s, compliance with the types of compliance requirements described in the U.S.Office of Management and Budget (OMB) Circular A-133 Compliance Supplement thatcould have a direct and material effect on each of the District’s major federal programsfor the year ended June 30, 2012. The District’s major federal programs are identified inthe summary of auditor’s results section of the accompanying schedule of findings andquestioned costs. Compliance with the requirements of laws, regulations, contracts andgrants applicable to each of its major federal programs is the responsibility of theDistrict’s management. Our responsibility is to express an opinion on the District’scompliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generallyaccepted in the United States; the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States;and OMB Circular A-133, Audits of States, Local Governments, and Non-ProfitOrganizations. Those standards and OMB Circular A-133 require that we plan andperform the audit to obtain reasonable assurance about whether noncompliance with thetypes of compliance requirements referred to above that could have a direct and materialeffect on a major federal program occurred. An audit includes examining, on a test basis,evidence about the District’s compliance with those requirements and performing suchother procedures as we consider necessary in the circumstances. We believe that ouraudit provides a reasonable basis for our opinion. Our audit does not provide a legaldetermination on the District’s compliance with those requirements.

In our opinion, the District’s complied, in all material respects, with the compliancerequirements referred to above that could have a direct and material effect on each of itsmajor federal programs for the year ended June 30, 2012.

10

Internal Control Over ComplianceManagement of the District is responsible for establishing and maintaining effectiveinternal control over compliance with requirements of laws, regulations, contracts andgrants applicable to federal programs. In planning and performing our audit, weconsidered the District’s internal control over compliance with the requirements thatcould have a direct and material effect on a major federal program to determine ourauditing procedures for the purpose of expressing our opinion on compliance and to testand report on internal control over compliance in accordance with OMB Circular A-133,but not for the purpose of expressing an opinion on the effectiveness of internal controlover compliance. Accordingly, we do not express an opinion on the effectiveness of theDistrict’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of acontrol over compliance does not allow management or employees, in the normal courseof performing their assigned functions, to prevent, or detect and correct, noncompliancewith a type of compliance requirement of a federal program on a timely basis. A materialweakness in internal control over compliance is a deficiency, or combination ofdeficiencies, in internal control over compliance, such that there is a reasonablepossibility that material noncompliance with a type of compliance requirement of afederal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purposedescribed in the first paragraph of this section and was not designed to identify alldeficiencies in internal control over compliance that might be deficiencies, significantdeficiencies, or material weaknesses. We did not identify any deficiencies in internalcontrol over compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of the school board,management, the Oklahoma State Department of Education and the FederalClearinghouse, and is not intended to be, and should not be, used by anyone other thanthese specified parties.


September 21, 2012

11

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYDISPOSITION OF PRIOR YEAR’S REPORTABLE CONDITIONS AND MATERIAL

INSTANCES OF NON-COMPLIANCEJUNE 30, 2012

There were no prior year reportable conditions.

12

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYSCHEDULE OF AUDIT RESULTS, FINDINGS AND QUESTIONED COSTS

JUNE 30, 2012

Section 1 - Summary of Auditor’s Results:

1. A qualified opinion was issued on the financial statements with respect to theregulatory basis of accounting prescribed.

2. The audit disclosed no significant deficiencies in the internal controls over financialreporting.

3. The audit disclosed no instances of noncompliance which were material to thefinancial statements.

4. The audit disclosed no significant deficiencies in the internal controls over majorprograms.

5. An unqualified opinion report was issued on the compliance of major programs.

6. The audit disclosed no audit findings which are required to be reported under OMBCircular A-133 § 510(a).

7. Programs determined to be major are the IDEA-B Special Education Program(84.027, 84.173) and the Child Nutrition Program (10.553, 10.555), which wereclustered in determination, and Impact Aid Program (84.041), which was notclustered in determination.

8. The dollar threshold used to determine between Type A and Type B programs was$300,000.

9. The auditee was determined not to be a low-risk auditee.

Section 2 – A finding relating to the financial statements required to be reported inaccordance with GAGAS:

NONE

Section 3 – Findings and questioned costs for federal awards:

NONE

FIDUCIARY ACCOUNTFUND TYPES GROUP

GENERAL TOTALSSPECIAL AGENCY LONG-TERM (MEMORANDUM

GENERAL REVENUE FUNDS DEBT ONLY)ASSETS

Cash 2,043,726$ 1,194,854 111,725 3,350,305Amount to be provided for retirement of long-term debt 367,528 367,528

Total Assets 2,043,726$ 1,194,854 111,725 367,528 3,717,833

LIABILITIES AND FUND EQUITY

Liabilities: Warrants payable 735,266$ 49,201 784,467 Funds held for school organizations 111,725 111,725 Long-term debt: Capital Lease 367,528 367,528 Total liabilities 735,266 49,201 111,725 367,528 1,263,720

Fund Equity: Cash fund balances 1,308,460 1,145,653 0 0 2,454,113

Total Liabilities and Fund Equity 2,043,726$ 1,194,854 111,725 367,528 3,717,833

The notes to the combined financial statements are an integral part of this statement

GOVERNMENTAL FUND TYPES

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYCOMBINED STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY -

ALL FUND TYPES AND ACCOUNT GROUPS - REGULATORY BASISJUNE 30, 2012

13

TOTALSSPECIAL (MEMORANDUM

GENERAL REVENUE ONLY)Revenues Collected: Local sources 670,979$ 151,331 822,310 Intermediate sources 181,711 181,711 State sources 4,062,516 22,627 4,085,143 Federal sources 1,259,300 486,999 1,746,299 Interest earnings 8,314 5,461 13,775 Non-revenue receipts 5,999 5,999 Total revenues collected 6,188,819 666,418 6,855,237

Expenditures: Instruction 3,840,520 20,171 3,860,691 Support services 2,191,634 111,159 2,302,793 Operation of non-instructional services 337,167 337,167 Facilities acquisition and construction services 233,657 233,657 Other outlays: Reimbursement 284 1,061 1,345 Correcting entry 97 97 Repayments 15,543 15,543 Total expenditures 6,048,078 703,215 6,751,293

Excess of revenues collected over (under) expenditures before adjustments to prior year encumbrances 140,741 (36,797) 103,944

Adjustments to prior year encumbrances 162 28 190

Excess of revenues collected over (under) expenditures 140,903 (36,769) 104,134

Cash fund balances, beginning of year 1,167,557 1,182,422 2,349,979

Cash fund balances, end of year 1,308,460$ 1,145,653 2,454,113


INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYCOMBINED STATEMENT OF REVENUES COLLECTED, EXPENDITURES AND CHANGES IN

CASH FUND BALANCES - ALL GOVERNMENTAL FUND TYPES - REGULATORY BASISFOR THE YEAR ENDED JUNE 30, 2012

GOVERNMENTAL FUND TYPES

14

VarianceOriginal/Final Favorable

Budget Actual (Unfavorable)Revenues Collected: Local sources 497,972$ 670,979 173,007 Intermediate sources 142,544 181,711 39,167 State sources 3,824,091 4,062,516 238,425 Federal sources 1,140,576 1,259,300 118,724 Interest earnings 8,314 8,314 Non-revenue receipts 5,999 5,999 Total revenues collected 5,605,183 6,188,819 583,636

Expenditures: Instruction 4,513,260 3,840,520 672,740 Support services 2,243,480 2,191,634 51,846 Other outlays- Reimbursement 284 (284) Correcting entry 97 (97) Repayments 16,000 15,543 457 Total expenditures 6,772,740 6,048,078 724,662

Excess of revenues collected over (under) expenditures before adjustments to

prior year encumbrances (1,167,557) 140,741 1,308,298

Adjustments to prior year encumbrances 0 162 162

Excess of revenues collected over (under) expenditures (1,167,557) 140,903 1,308,460

Cash fund balance, beginning of year 1,167,557 1,167,557 0

Cash fund balance, end of year $ 0 1,308,460 1,308,460


INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYCOMBINED STATEMENT OF REVENUES COLLECTED, EXPENDITURES AND

CHANGES IN CASH FUND BALANCES - BUDGETED GOVERNMENTAL FUND TYPES - REGULATORY BASISFOR THE YEAR ENDED JUNE 30, 2012

GENERAL FUND

15

VarianceOriginal Final FavorableBudget Budget Actual (Unfavorable)

Revenues Collected: Local sources 99,105$ 99,105 151,331 52,226 State sources 22,290 22,290 22,627 337 Federal sources 273,164 275,582 486,999 211,417 Interest earnings 5,461 5,461 Total revenues collected 394,559 396,977 666,418 269,441

Expenditures: Instruction 17,753 20,171 20,171 Support services 140,000 140,000 111,159 28,841 Operation of non-instructional services 356,200 356,200 337,167 19,033 Facilities acquisition and construction services 1,061,967 1,061,967 233,657 828,310 Other outlays: Reimbursement 1,061 1,061 1,061 Total expenditures 1,576,981 1,579,399 703,215 876,184

Excess of revenues collected over (under) expenditures before adjustments to prior year encumbrances (1,182,422) (1,182,422) (36,797) 1,145,625

Adjustments to prior year encumbrances 0 0 28 28

Excess of revenues collected over (under) expenditures (1,182,422) (1,182,422) (36,769) 1,145,653

Cash fund balances, beginning of year 1,182,422 1,182,422 1,182,422 0

Cash fund balances, end of year $ 0 0 1,145,653 1,145,653


INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYCOMBINED STATEMENT REVENUES COLLECTED, EXPENDITURES AND

CHANGES IN CASH FUND BALANCES - BUDGETED GOVERNMENTAL FUND TYPES - REGULATORY BASISFOR THE YEAR ENDED JUNE 30, 2012

SPECIAL REVENUE FUNDS

16

17

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYNOTES TO THE COMBINED FINANCIAL STATEMENTS – REGULATORY BASIS

FOR THE YEAR ENDED JUNE 30, 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The combined financial statements – regulatory basis of the Hartshorne PublicSchools Independent District No. I-1 (the “District”) have been prepared inconformity with another comprehensive basis of accounting required by OklahomaStatutes. The more significant of the District’s accounting policies are describedbelow.

A. Reporting Entity

The District is a corporate body for public purposes created under Title 70 of theOklahoma Statutes and accordingly is a separate entity for operating and financialreporting purposes. The District is part of the public school system of Oklahomaunder the general direction and control of the State Board of Education and isfinancially dependent on State of Oklahoma support. The general operating authorityfor the public school system is the Oklahoma School Code contained in Title 70,Oklahoma Statutes.

The governing body of the District is the Board of Education composed of electedmembers. The appointed superintendent is the executive officer of the District.

In evaluating how to define the District, for financial reporting purposes,management has considered all potential component units. The decision to include apotential component unit in the reporting entity was made by applying the criteriaestablished by the Governmental Accounting Standards Board (GASB). The basic –but not the only – criterion for including a potential component unit within thereporting entity is the governing body’s ability to exercise oversight responsibility.The most significant manifestation of this ability is financial interdependency. Othermanifestations of the ability to exercise oversight responsibility include, but are notlimited to, the selection of governing authority, the designation of management, theability to significantly influence operations and accountability for fiscal matters. Asecond criterion used in evaluating potential component units is the scope of publicservice. Application of this criterion involves considering whether the activitybenefits the District and/or its citizens, or whether the activity is conducted within thegeographic boundaries of the District and is generally available to its patrons. A thirdcriterion used to evaluate potential component units for inclusion or exclusion fromthe reporting entity is the existence of special financing relationships, regardless ofwhether the District is able to exercise oversight responsibilities. Based upon theapplication of these criteria, there are no potential component units included in theDistrict’s reporting entity.

18



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – cont’d

B. Fund Accounting

The District uses funds and account groups to report on its financial position and theresults of its operations. Fund accounting is designed to demonstrate legalcompliance and to aid financial management by segregating transactions related tocertain District functions or activities.

A fund is a separate accounting entity with a self-balancing set of accounts. Anaccount group, on the other hand, is a financial reporting device designed to provideaccountability for certain assets and liabilities that are not recorded in the fundsbecause they do not directly affect net expendable available financial resources.

Funds are classified into three categories: Governmental, proprietary and fiduciary.Each category, in turn, is divided into separate “fund types.”

Governmental Fund Types

Governmental funds are used to account for all or most of a government’s generalactivities, including the collection and disbursement of earmarked monies (specialrevenue funds), the acquisition or construction of general fixed assets (capital projectsfunds), and the servicing of general long-term debt (debt service funds).

General Fund – The general fund is used to account for all financial transactionsexcept those required to be accounted for in another fund. Major revenue sourcesinclude state and local property taxes and state funding under the Foundation andIncentive Aid Program. Expenditures include all costs associated with the dailyoperations of the schools except for programs funded for building repairs andmaintenance, school construction and debt service on bonds and other long-term debt.The general fund includes federal and state restricted monies that must be expendedfor specific programs.

Special Revenue Funds – Special revenue funds include the District’s building, co-opand child nutrition funds.

Building Fund – The building fund consists mainly of monies derived fromproperty taxes levied for the purpose of erecting, remodeling, repairing, ormaintaining school buildings and for purchasing furniture, equipment andcomputer software to be used on or for school district property, for payingenergy and utility costs, for purchasing telecommunications services, forpaying fire and casualty insurance premiums for school facilities, forpurchasing security systems, and for paying salaries of security personnel.

19



1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – con’d

B. Fund Accounting - cont’d

Co-op Fund – The co-op fund is established when the boards of education oftwo or more school districts enter into cooperative agreements and maintainjoint programs. The revenues necessary to operate a cooperative program cancome from federal, state, or local sources, including the individualcontributions of participating school districts. The expenditures for this fundwould consist of those necessary to operate and maintain the joint programs.

Child Nutrition Fund - The child nutrition fund consists of monies derivedfrom federal and state financial assistance and food sales. This fund is usedto account for the various nutrition programs provided to students.

Debt Service Fund – The debt service fund is the District’s sinking fund and is usedto account for the accumulation of financial resources for the payment of generallong-term (including judgments) debt principal, interest and related costs. Theprimary revenue sources are local property taxes levied specifically for debt serviceand interest earnings from temporary investments. The District did not maintain thisfund during the 2011-12 fiscal year.

Capital Projects Fund – The capital projects fund is the District’s bond fund and isused to account for the proceeds of bond sales to be used exclusively for acquiringschool sites, constructing and equipping new school facilities, renovating existingfacilities and acquiring transportation equipment. The District did not maintain thisfund during the 2011-12 fiscal year.

Fiduciary Fund Types

Fiduciary funds are used to account for assets held on behalf of outside parties,including other governments, or on behalf of other funds within the District. Theterms “non-expendable” and “expendable” refer to whether or not the District isunder an obligation to maintain the trust principal. Agency funds generally are usedto account for assets that the District holds on behalf of others as their agent and donot involve measurement of results of operation.

Expendable Trust Funds – Expendable trust funds include the gifts and endowmentsfund, medical insurance fund, workers compensation fund and the insurance recoveryfund. The District did not maintain any expendable trust funds during the 2011-12fiscal year.

Gifts and Endowments Fund – The gifts and endowments fund receives itsassets by way of philanthropic foundations, individuals, or private

20




B. Fund Accounting – cont’d

Fiduciary Fund Types – cont’d

organizations for which no repayment or special service to the contributor isexpected. This fund is used to promote the general welfare of the District.

Medical Insurance Fund – The medical insurance fund accounts for revenuesand expenditures for all types of self-funded medical insurance coverage.

Workers Compensation Fund – The workers compensation fund accounts forrevenues and expenditures for workers compensation claims.

Insurance Recovery Fund – The insurance recovery fund accounts for alltypes of insurance recoveries, major reimbursements and reserves forproperty repairs and replacements.

Agency Fund – The agency fund is the school activities fund which is used to accountfor monies collected principally through the fundraising efforts of students andDistrict-sponsored groups. The administration is responsible, under the authority ofthe Board, for collecting, disbursing and accounting for these activity funds.

Account Groups

An account group is not a fund and consists of a self-balancing set of accounts usedonly to establish accounting control over long-term debt and fixed assets.

General Long-Term Debt Account Group – This account group is established toaccount for all the long-term debt of the District, which is offset by the amountavailable in the debt service fund and the amount to be provided in future years tocomplete retirement of the debt principal. It is also used to account for otherliabilities (judgments and lease purchases) which are to be paid from funds providedin future years.

General Fixed Assets Account Group – This account group is used by governments toaccount for the property, plant and equipment of the school district. The District doesnot have the information necessary to include this group in its financial statements.

21




B. Fund Accounting – cont’d

Memorandum Only - Total Column

The total column on the combined financial statements – regulatory basis is captioned“memorandum only” to indicate that it is presented only to facilitate financialanalysis. Data in this column does not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither issuch data comparable to a consolidation. Interfund eliminations have not been madein the aggregation of this data.

C. Basis of Accounting and Presentation

Basis of accounting refers to when revenues and expenditures are recognized in theaccounts and reports in the combined financial statements – regulatory basis. Basisof accounting relates to the timing of the measurements made, regardless of themeasurement focus applied.

The District prepares its financial statements in a presentation format that isprescribed by the Oklahoma Department of Education. This format is essentially thegenerally accepted form of presentation used by state and local governments prior tothe effective date of GASB Statement 34.

All governmental and expendable trust funds are accounted for using the regulatorybasis of accounting. Revenues are recognized when they are received rather thanearned. Under the regulatory basis of accounting, expenditures are generallyrecognized when encumbered/reserved rather than at the time the related fundliability is incurred. These practices differ from generally accepted accountingprinciples. Significant differences are as follows:

The District does not maintain its accounts on the modified accrual basis ofaccounting under which revenues are recorded when susceptible to accrual, i.e., bothmeasurable and available, and expenditures are recorded when the liability isincurred, if measurable.

Revenues and expenditures are reported by the budget year until all encumbranceshave been paid and unexpended appropriations are closed to the current year fundbalance.

The general, building and child nutrition funds record purchases of supplies asexpenditures rather than as assets to be expensed when used.

22




C. Basis of Accounting – cont’d

Encumbrances are reported as liabilities. Under generally accepted accountingprinciples, open encumbrances for which goods or services have not been receivedare reported as reservations of fund balances, since the commitments will be honoredthrough subsequent year’s budget appropriations.

The District has not maintained a record of general fixed assets and, accordingly, astatement of general fixed assets, as required by generally accepted accountingprinciples, is not included in the combined financial statements – regulatory basis.

Vested or accumulated vacation leave that is expected to be liquidated withexpendable available financial resources is not reported as an expenditure and a fundliability of the governmental fund that will pay it. In addition, the non-currentportion of vested accumulated vacation is not recorded in the general long-term debtaccount group.

Capital leases are recorded as expenditures. Under generally accepted accountingprinciples, capital leases are normally capitalized as a fixed asset and recorded in thegeneral long-term debt account group.

D. Budgets and Budgetary Accounting

The District is required by state law to prepare an annual budget. A preliminarybudget must be submitted to the Board of Education by December 31, for the fiscalyear beginning the following July 1. If the preliminary budget requires an additionallevy, the District must hold an election on the first Tuesday in February to approvethe levy. If the preliminary budget does not require an additional levy, it becomes thelegal budget. If an election is held and the taxes are approved, then the preliminarybudget becomes the legal budget. If voters reject the additional taxes, the Districtmust adopt a budget within the approved tax rate.

A budget is legally adopted by the Board of Education for all funds (with theexception of the trust and agency funds) that includes revenues and expenditures.

The 2011-12 Estimate of Needs was amended by supplemental appropriations asfollows:

Fund Total

Co-op $ 2,418

23




D. Budgets and Budgetary Accounting – cont’d

All amendments must be approved by the county excise board.

Encumbrances represent commitments related to unperformed contracts for goods orservices. Encumbrance accounting – under which purchase orders and othercommitments of resources are recorded as expenditures of the applicable fund – isutilized in all governmental funds of the District. Unencumbered appropriationslapse at the end of each fiscal year. While the Debt Service Fund is a governmentalfund, a comparison of budget to actual schedule is presented in the financialstatements, although the board can exercise no control of the revenue sources for thisfund (except interest earnings), and no control over its expenditures.

E. Assets, Liabilities and Fund Equity

Cash – Cash consists of cash on hand, demand deposit accounts, and interest bearingchecking accounts.

Investments – The District is allowed to invest in direct obligations of the UnitedStates government and agencies; certificates of deposit of savings and loanassociations, banks and trust companies; savings accounts or savings certificates ofsavings and loan associations, and trust companies; and warrants, bonds or judgmentsof the District. All investments are recorded at cost, which approximates marketvalue.

Inventories – The value of consumable inventories at June 30, 2012, is not material tothe combined financial statements.

Fixed Assets and Property, Plant and Equipment – The General Fixed Assets AccountGroup is not presented.

Warrants Payable – Warrants are issued to meet the obligations for goods andservices provided to the District. The District recognizes a liability for the amount ofoutstanding warrants that have yet to be redeemed by the District’s treasurer.

Encumbrances – Encumbrances represent commitments related to purchase orders,contracts, other commitments for expenditures or resources, and goods or servicesreceived by the District for which a warrant has not been issued. An expenditure isrecorded and a liability is recognized for outstanding encumbrances at year end inaccordance with the regulatory basis of accounting. While the regulatory basis that isused for the Debt Service Fund approximates full accrual accounting, the accruals

24




E. Assets, Liabilities and Fund Equity – cont’d

recorded are reported to meet regulatory requirements, as opposed to therequirements of generally accepted accounting principles.

Un-matured Obligations – The unmatured obligations represent the total of all annualaccruals for both principal and interest, based on the lengths of the bonds and/orjudgments, less all principal and interest payments through the balance sheet date inaccordance with the regulatory basis of accounting.

Funds Held for School Organizations – Funds held for school organizations representthe funds received or collected from students or other cocurricular and extracurricularactivities conducted in the District, control over which is exercised by the board ofeducation. These funds are credited to the account maintained for the benefit of eachparticular activity within the school activity fund.

Long-Term Debt – Long-term debt is recognized as a liability of a governmental fundwhen due, or when resources have been accumulated in the debt service fund forpayment early in the following year. For other long-term obligations, only thatportion expected to be financed from expendable available financial resources isreported as a fund liability of a governmental fund. The remaining portion of suchobligations is reported in the general long-term debt account group.

Cash Fund Balance – Cash fund balance represents the funds not encumbered bypurchase orders, legal contracts, outstanding warrants and unmatured obligations.

F. Revenue and Expenditures

Local Revenues – Revenue from local sources is the money generated from withinthe boundaries of the District and available to the District for its use. The District isauthorized by state law to levy property taxes which consist of ad valorem taxes onreal and personal property within the District. These property taxes are distributed tothe District’s general, building and sinking funds based on the levies approved foreach fund. The County Assessor, upon receipt of the certification of tax levies fromthe county excise board, extends the tax levies on the tax rolls for submission to thecounty treasurer prior to October 1. The county treasurer must commence taxcollection within fifteen days of receipt of the tax rolls. The first half of taxes is dueprior to January 1. The second half is due prior to April 1.

If the first payment is not made in a timely manner, the entire tax becomes due andpayable on January 2. Second half taxes become delinquent on April 1, of the yearfollowing the year of assessment. If not paid by the following October 1, the

25




F. Revenue and Expenditures – cont’d

property is offered for sale for the amount of taxes due. The owner has two years toredeem the property by paying the taxes and penalty owed. If at the end of two yearsthe owner has not done so, the purchaser is issued a deed to the property.

Other local sources of revenues include tuition, fees, rentals, disposals, commissionsand reimbursements.

Intermediate Revenues - Revenue from intermediate sources is the amount of moneyfrom funds collected by an intermediate administrative unit, or a political subdivisionbetween the District and the state, and distributed to Districts in amounts that differ inproportion to those which are collected within such systems.

State Revenues – Revenues from state sources for current operations are primarilygoverned by the state aid formula under the provisions of Article XVIII, Title 70,Oklahoma Statutes. The State Board of Education administers the allocation of stateaid funds to school districts based on information accumulated from the Districts.

After review and verification of reports and supporting documentation, the StateDepartment of Education may adjust subsequent fiscal period allocations of moneyfor prior year errors disclosed by review. Normally, such adjustments are treated asreductions from or additions to the revenue of the year when the adjustment is made.

The District receives revenue from the state to administer certain categoricaleducational programs. State Board of Education rules require that revenue earmarkedfor these programs be expended only for the program for which the money isprovided and require that the money not expended as of the close of the fiscal year becarried forward into the following year to be expended for the same categoricalprograms. The State Department of Education requires that categorical educationalprogram revenues be accounted for in the general fund.

The aforementioned state revenues are apportioned to the District’s general fund.

Federal Revenues – Federal revenues consist of revenues from the federalgovernment in the form of operating grants or entitlements. An operating grant is acontribution to be used for a specific purpose, activity or facility. A grant may bereceived either directly from the federal government or indirectly as a passthroughfrom another government, such as the state.

An entitlement is the amount of payment to which the District is entitled pursuant toan allocation formula contained in applicable statutes.

26





The majority of the federal revenues received by the District are apportioned to thegeneral fund. The District maintains a separate child nutrition fund and the federalrevenues received for the child nutrition programs are apportioned there.

Interest Earnings – Represent compensation for the use of financial sources over aperiod of time.

Non-Revenue Receipts – Non-revenue receipts represent receipts deposited into afund that are not new revenues to the District, but the return of assets.

Instruction Expenditures – Instruction expenditures include the activities dealingdirectly with the interaction between teachers and students. Teaching may beprovided for students in a school classroom, in another location, such as a home orhospital, and in other learning situations, such as those involving cocurricularactivities. It may also be provided through some other approved medium, such astelevision, radio, telephone and correspondence. Included here are the activities ofteacher assistants of any type (clerks, graders, teaching machines, etc.) which assist inthe instructional process. The activities of tutors, translators and interpreters would berecorded here. Department chairpersons who teach for any portion of time areincluded here. Tuition/transfer fees paid to other LEAs would be included here.

Support Services Expenditures – Support services expenditures provideadministrative, technical (such as guidance and health) and logistical support tofacilitate and enhance instruction. These services exist as adjuncts for fulfilling theobjectives of instruction, community services and enterprise programs, rather than asentities within themselves.

Operation of Non-Instructional Services Expenditures – Activities concerned withproviding non-instructional services to students, staff or the community.

Facilities Acquisition and Construction Services Expenditures – Consists of activitiesinvolved with the acquisition of land and buildings; remodeling buildings; theconstruction of buildings and additions to buildings; initial installation or extension ofservice systems and other built-in equipment; and improvements to sites.

Other Outlays Expenditures – A number of outlays of governmental funds are notproperly classified as expenditures, but still require budgetary or accounting control.These are classified as Other Outlays. These include debt service payments (principaland interest).

27





Other Uses Expenditures – This includes scholarships provided by private gifts andendowments; student aid and staff awards supported by outside revenue sources (i.e.,foundations). Also, expenditures for self-funded employee benefit programsadministered either by the District or a third party administrator.

Repayment Expenditures – Repayment expenditures represent checks/warrants issuedto outside agencies for refund or restricted revenue previously received foroverpayment, non-qualified expenditures and other refunds to be repaid from Districtfunds.

Interfund Transactions – Quasi-external transactions are accounted for as revenues,expenditures or expenses. Transactions that constitute reimbursements to a fund orexpenditures/expenses initially made from it that are properly applicable to anotherfund, are recorded as expenditures/expenses in the fund that is reimbursed.

All other interfund transactions, except quasi-external transactions andreimbursements, are reported as transfers. Nonrecurring or nonroutine permanenttransfers of equity are reported as residual equity transfers. All other interfundtransfers are reported as operating transfers. There were no residual equity transfersand no operating transfers during the 2011-12 fiscal year.

2. CASH AND INVESTMENTS

The District’s investment policies are governed by state statute. Permissibleinvestments include direct obligations of the United States government and agencies;certificates of deposit of savings and loan associations, banks and trust companies;savings accounts or savings certificates of savings and loan associations, banks, andtrust companies; and warrants, bonds or judgments of the District.

Cash – The District’s bank balance of deposits and cash pools at June 30, 2012, was$3,374,300. Custodial credit risk is the risk that in the event of a bank failure, theDistrict’s deposits may not be returned to it. State statutes require collateral foramounts in excess of federally insured amounts. The District’s policy requirescollateral equal to 110% of the deposit amount for all deposits not covered byF.D.I.C. insurance. The bank balance was completely covered by federal depositoryinsurance and by collateral held by the District’s third party agent in the District’sname.

28



2. CASH AND INVESTMENTS – cont’d

Investments – At June 30, 2012, the District had no outstanding investments.

Interest rate risk – Interest rate risk is the risk that changes in interest rates willadversely affect the fair market value of an investment. Due to the required liquidityfor those investments, these funds have no defined maturity dates. The District doesnot have a formal policy that limits investment maturities as a means of managing itsexposure to fair value losses from increasing interest rates.

Credit risk – Investments – Credit risk is the risk that the issuer or other counterpartyto and investment will not fulfill its obligations. Investments held by the District ininvestment pools (sweep accounts) are considered unclassified as to custodial creditrisk because they are not evidenced by securities that exist in physical or book entryform. The District does not have a formal policy limiting its exposure arising fromconcentration of investments.

3. INTERFUND RECEIVABLES AND PAYABLES

There were no interfund receivables or payables at June 30, 2012.

4. GENERAL LONG-TERM DEBT

State statutes prohibit the District from becoming indebted in an amount exceedingthe revenue to be received for any fiscal year without approval by the District’svoters. Bond issues have been approved by the voters and issued by the District forvarious capital improvements. These bonds are required to be fully paid seriallywithin 25 years of the date of issue.

General long-term debt of the District consists of a capital lease. Debt servicerequirements for leases are paid solely from the fund balance and the future revenues.

CapitalLease

Balance July 1, 2011 423,917$Retirement (56,389)

Balance June 30, 2012 367,528$

29



4. GENERAL LONG-TERM DEBT (cont’d)

A brief description of the outstanding long-term debt at June 30, 2012, is set forth below:

AmountCapital Leases: Outstanding

Lease purchase for a new gymnasium buildingand equipment, dated 10-15-07 totaling $600,000,interest rate of 5.19%, due in semi-annualprincipal and interest payments of $38,837.Final payment due 10-15-17 $ 367,528

The annual debt service for retirement of capital lease principal and payment ofinterest as follows:

Year EndingJune 30 Principal Interest Total

2013 59,355$ 18,320 77,6752014 62,476 15,198 77,6742015 65,762 11,913 77,6752016 69,220 8,455 77,6752017 72,860 4,814 77,6742018 37,855 983 38,838

Total $ 367,528 59,683 427,211

Interest paid on general long-term debt during the 2011-12 fiscal year totals $21,285.

5. EMPLOYEE RETIREMENT SYSTEM

Description of Plan

The District participates in the state-administered Oklahoma Teachers’ RetirementSystem, which is a cost sharing, multiple-employer defined benefit public employeeretirement system (PERS), which is administered by the Board of Trustees of theOklahoma Teachers’ Retirement System (the “System”). The System providesretirement and disability benefits, annual cost-of-living adjustments, and death

30



5. EMPLOYEE RETIREMENT SYSTEM – cont’d

benefits to plan members and beneficiaries. Title 70 Section 17 of the OklahomaStatutes establishes benefit provisions and may be amended only through legislativeaction. The Oklahoma Teachers’ Retirement System issues a publicly availablefinancial report that includes financial statements and required supplementaryinformation for the System. That report may be obtained by writing to the OklahomaTeachers’ Retirement System, P.O. Box 53624, Oklahoma City, OK 73152, or bycalling 405-521-2387.

Basis of Accounting

The System’s financial statements are prepared using the cash basis of accounting,except for accruals of interest income. Plan member contributions are recognized inthe period in which the contributions are made. Benefits and refunds are recognizedwhen paid. The pension benefit obligation is a standardized disclosure measure ofthe present value of pension benefits. This pension valuation method reflects thepresent value of estimated pension benefits that will be paid in future years as a resultof employee services performed to date and is adjusted for the effect of projectedsalary increases. There are no actuarial valuations performed on individual schooldistricts. The System has an under-funded pension benefit obligation as determinedas part of the latest actuarial valuation.

Funding Policy

The District, the State of Oklahoma, and the participating employee makecontributions. The contribution rates for the District and its employees areestablished by and may be amended by Oklahoma Statutes. The rates are notactuarially determined. The rates are applied to the employee’s earnings plusemployer-paid fringe benefits. The required contribution for the participatingmembers is 7.0% of compensation. Contributions received by the System from theState of Oklahoma are used to offset required employer contributions by the localschool district. For the 2011-12 fiscal year, the District contributed 9.5% and theState of Oklahoma contributed the remaining amount during this year. The District isallowed by Oklahoma Teachers’ Retirement System to make the requiredcontributions on behalf of the participating members. In addition, if a member’ssalary is paid in part by federal or private funds, the contribution on that portion ofthe salary paid by those funds must be matched by the District.

Ten-year historical trend information is presented in the Teacher’s Retirement Systemof Oklahoma Annual Report for the year ended June 30, 2012. This information isuseful in assessing the pension plan’s accumulation of sufficient assets to pay pensionbenefits as they become due. Please visit www.ok.gov/TRS for all plan information.

31



5. EMPLOYEE RETIREMENT SYSTEM – cont’d

Annual Pension Cost

The District’s total contributions for 2012, 2011 and 2010 were $634,417, $635,414,and $488,384, respectively.

6. RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to anddestruction of assets; errors and omissions; injuries to employees; or acts of God.The District purchases commercial insurance to cover these risks, including generaland auto liability, property damage, and public officials liability. Settled claimsresulting from risks have not exceeded the commercial insurance coverage in any ofthe past three fiscal years.

The District participates in a risk pool for Workers’ Compensation coverage in whichthere is a transfer or pooling of risks among the participants of that pool. Inaccordance with GASB No. 10, the District reports the required contribution to thepool, net of refunds, as insurance expense. The risk pool is the Oklahoma SchoolAssurance Group (CompuSource Oklahoma), an organization formed for the purposeof providing workers’ compensation coverage to participating schools in the Stateof Oklahoma. In that capacity, OSAG is responsible for providing loss controlservices and certain fiscal activities, including obtaining contract arrangements forthe underwriting, excess insurance agreements, claims processing, and legaldefense for any and all claims submitted to it during the plan year. As a member ofOSAG, the District is required to pay fees set by OSAG according to an establishedpayment schedule. A portion of the fees paid by the District goes into a loss fund forthe District. The fee for the loss fund is calculated by projecting losses based on theschool’s losses for the last five years. OSAG provides coverage in excess of the LossFund so the District’s liability for claim loss is limited to the balance of the loss fund.If the District does not use its loss fund in three years, it is returned to the Districtwith no interest.

The District is also a member of the Oklahoma Public Schools UnemploymentCompensation Program. In this program the District is required to contribute 1.6% ofits taxable payroll for unemployment insurance. The funds for each District are keptseparate and Districts can contribute more than 1.6% of their payroll if they elect to.The money contributed by each District earns interest and is fully insured. If theDistrict has claims in excess of the amount in its account, it will be liable for theexcess.

32



7. CONTINGENCIES

Federal Grants

Amounts received or receivable from grant agencies are subject to audit andadjustment by grantor agencies. Any disallowed claims, including amounts alreadycollected, may constitute a liability of the applicable funds. The amounts, if any, ofexpenditures which may be disallowed by the grantor cannot be determined at thistime, although the District expects such amounts, if any, to be immaterial.

Schedule of Expenditure of Federal Awards

The schedule shows the federal awards received and expended by the District duringthe 2011-12 fiscal year. The revised OMB Circular A-133 Audits of States, LocalGovernments and Non-Profit Organizations, established uniform audit requirementsfor nonfederal entities which expended more than $500,000 in federal awards.

Litigation

School officials are not aware of any pending or threatened litigation, claims orassessments or unasserted claims or assessments against the District.

CHILDBUILDING NUTRITION

FUND FUND TOTALASSETS

Cash 1,126,438$ 68,416 1,194,854

LIABILITIES AND FUND EQUITY

Liabilities: Warrants payable 23,016$ 26,185 49,201

Fund Equity: Cash fund balances 1,103,422 42,231 1,145,653

Total Liabilities and Fund Equity 1,126,438$ 68,416 1,194,854

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYCOMBINING STATEMENT OF ASSETS, LIABILITIES AND FUND EQUITY -

ALL SPECIAL REVENUE FUNDS - REGULATORY BASISJUNE 30, 2012

33

CHILDBUILDING CO-OP NUTRITION

FUND FUND FUND TOTALRevenues Collected: Local sources 120,561$ 30,770 151,331 State sources 22,627 22,627 Federal sources 191,622 21,232 274,145 486,999 Interest earnings 5,185 276 5,461 Total revenues collected 317,368 21,232 327,818 666,418

Expenditures: Instruction 20,171 20,171 Support services 111,159 111,159 Operation of non-instructional services 337,167 337,167 Facilities acquisition and construction services 233,657 233,657 Other outlays: Reimbursement 1,061 1,061 Total expenditures 344,816 21,232 337,167 703,215

Excess of revenues collected over (under) expenditures before adjustments to prior year enumbrances (27,448) 0 (9,349) (36,797)

Adjustments to prior year enumbrances 0 0 28 28

Excess of revenues collected over (under) expenditures (27,448) 0 (9,321) (36,769)

Cash fund balances, beginning of year 1,130,870 0 51,552 1,182,422

Cash fund balances, end of year 1,103,422$ 0 42,231 1,145,653

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYCOMBINING STATEMENT OF REVENUES COLLECTED, EXPENDITURES AND CHANGES

IN CASH FUND BALANCES - ALL SPECIAL REVENUE FUNDS - REGULATORY BASISFOR THE YEAR ENDED JUNE 30, 2012

34

ORIGINAL FINAL ORIGINAL FINAL ORIGINAL FINALBUDGET BUDGET ACTUAL BUDGET BUDGET ACTUAL BUDGET BUDGET ACTUAL

Revenues Collected: Local sources 71,097$ 71,097 120,561 $ 28,008$ 28,008 30,770 State sources 22,290 22,290 22,627 Federal sources 191,622 18,814 21,232 21,232 254,350 254,350 274,145 Interest earnings 5,185 276 Total revenues collected 71,097 71,097 317,368 18,814 21,232 21,232 304,648 304,648 327,818

Expenditures: Instruction 17,753 20,171 20,171 Support services 140,000 140,000 111,159 Operation of non-instructional services 356,200 356,200 337,167 Facilities acquisition & construction svcs 1,061,967 1,061,967 233,657 Other outlays: Reimbursement 1,061 1,061 1,061 Total expenditures 1,201,967 1,201,967 344,816 18,814 21,232 21,232 356,200 356,200 337,167

Excess of revenues collected over (under) expenditures before adjustments to prior year encumbrances (1,130,870) (1,130,870) (27,448) 0 0 0 (51,552) (51,552) (9,349)

Adjustment to prior year encumbrances 0 0 0 0 0 0 0 0 28

Excess of revenues collected over (under) expenditures (1,130,870) (1,130,870) (27,448) 0 0 0 (51,552) (51,552) (9,321)

Cash fund balances, beginning of year 1,130,870 1,130,870 1,130,870 0 0 0 51,552 51,552 51,552

Cash fund balances, end of year $ 0 0 1,103,422 $ 0 0 0 $ 0 0 42,231

BUILDING FUND CO-OP FUND CHILD NUTRITION FUND

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYCOMBINING STATEMENT OF REVENUES COLLECTED, EXPENDITURES AND CHANGES

IN CASH FUND BALANCES - BUDGET AND ACTUAL COMPARISON

FOR THE YEAR ENDED JUNE 30, 2012ALL SPECIAL REVENUE FUNDS - REGULATORY BASIS

35

BALANCE NET BALANCE7-01-11 ADDITIONS TRANSFERS DEDUCTIONS 6-30-12

ASSETS

Cash 125,936$ 335,165 0 349,376 111,725

LIABILITIESFunds held for school organizations:

FFA 13,066$ 70,045 67,760 15,351Vocal Music 758 0 49 709Yearbook 3,254 7,356 8,938 1,672Senior Class 224 1,772 2,684 4,644 36Junior Class 2,908 18,320 (2,143) 18,414 671Athletics 11,512 45,618 50,463 6,667Track 127 250 243 134Slow Pitch Softball 2,205 1,798 2,575 1,428Baseball 301 27,968 21,234 7,035Girls basketball 1,407 6,901 4,812 3,496HS student Council 1,851 11,333 11,724 1,460HS Cheerlearders 4,299 20,828 13,953 11,174HS Cheerlearders Uniforms 2,500 600 1,423 1,677Band 797 19,602 18,330 2,069Petty Cash 0 200 200 0Scholarship Fund 4,309 0 223 0 4,532JH/HS Library 324 1,751 1,400 675FCCLA 4 940 594 350Vending Machines 21,338 5,002 11,010 15,330General Fund Refund 0 185 185 0Tech Ed 3,819 1,804 1,507 4,116Elementary media center 2,225 7,092 5,607 3,710Elementary miscellaneous 8,821 4,059 7,575 5,305Junior High cheerleaders 1,989 2,177 3,494 672Junior High cheerleaders uniform 2,315 0 2,233 82JH Student Council 1,108 1,000 1,777 331JH miscellaneous 443 0 0 443Northward Parents Association 19,492 36,753 47,830 8,415Freshman class 1,262 991 (1,262) 843 148FFA Booster Club 4,270 17,271 17,054 4,487Sophomore class 725 0 498 0 1,223Boys Baksetball 1,440 4,924 4,253 2,111Fast pitch softball 2,665 3,417 4,842 1,240Elementary charity 1,049 300 426 923Band Boosters 2,310 1,308 2,112 1,506Football 386 13,350 11,872 1,864Art 433 250 0 683

Total Liabilities 125,936$ 335,165 0 349,376 111,725

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYCOMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES -

ALL AGENCY FUNDS - REGULATORY BASISFOR THE YEAR ENDED JUNE 30, 2012

36

FederalFederal Grantor / Pass Through CFDA Federal Grantor's/ Program or Balance at Revenue Total Balance atGrantor / Program Title Number Pass-through No. Award Amount 7/1/11 Collected Expenditures 6/30/12

U.S. Department of EducationDirect Programs: Title VII Indian Education 84.060 S060A110533 104,270$ 104,270 104,270 * P.L. 874 Impact Aid 84.041 S041B123984 791,622 791,622 791,622 Sub Total 895,892 0 895,892 895,892 0

Passed Through State Department of Education : Title I, Basic 84.010 250,865 250,865 250,865 Title II Part A 84.367 41,608 41,608 41,608 * IDEA-B Flow Through 84.027 191,861 191,861 191,861 * IDEA-B Pre-school 84.173 4,058 4,058 4,058

Title II Part D ARRA 2010-11 - Note 84.318 7,146 7,146 Title VI, Part B 84.358 17,646 15,291 15,291 Sub Total 506,038 7,146 510,829 503,683 0

Passed Through State Department of Careerand Technology Education

Carl Perkins grant 84.048 21,232 0 21,232 21,232 0

Passed Through State Department of Education * Child Nutrition Programs: School breakfast program 10.553 51,601 51,601 National school lunch program 10.555 222,543 222,543 Sub Total 274,144 274,144

Passed Through Department of Human Services * Non-cash assistance - Commodities - Note1 National school lunch program 10.555 19,863 19,863

Other Federal Assistance: Johnson O'Malley 15.130 22,425 22,425 22,425 Medicaid resources 93.774 20,744 20,744 20,744 Flood Control 12.106 1,032 1,032 1,032 Sub Total 44,201 0 44,201 44,201 0

Total Federal Assistance 1,467,363$ 7,146 1,766,161 1,759,015 0

Note - These amounts represent reimbursements for prior year expenditures which were not received until the current fiscal year.Note 1 - Commodities received by the District in the amount of $19,863 were of a non-monetary nature and therefore the total revenue does not agree with the financial statements by this amount.* Major programs

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - REGULATORY BASIS


37

POSITION BOND COVERAGEBONDING COMPANY COVERED NUMBER AMOUNT EFFECTIVE DATES

Western Surety Company Treasurer 18297037 75,000$ July 1, 2011 - July 1, 2012Assistant Treasurer 71119136 75,000 July 1, 2011 - July 1, 2012Minutes Clerk 70755056 5,000 July 1, 2011 - July 1, 2012Custodian of Activity Fund 70755056 5,000 July 1, 2011 - July 1, 2012Encumbrance Clerk 70755056 5,000 July 1, 2011 - July 1, 2012Lunch Fund Custodian 70755056 5,000 July 1, 2011 - July 1, 2012Superintendent 70755056 100,000 July 1, 2011 - July 1, 2012

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYSTATEMENT OF STATUTORY, FIDELITY AND HONESTY BONDS


38

39

INDEPENDENT SCHOOL DISTRICT NO. I-1, PITTSBURG COUNTYSCHEDULE OF ACCOUNTANT’S PROFESSIONAL LIABILITY INSURANCE

AFFIDAVITJULY 1, 2011 TO JUNE 30, 2012

State of Oklahoma )) ss

County of Tulsa )

The undersigned auditing firm of lawful ages, being first duly sworn on oath says thatsaid firm had in full force and effect Accountant’s Professional Liability Insurance inaccordance with the “Oklahoma Public School Audit Law” at the time of audit contractand during the entire audit engagement with Hartshorne Public Schools for the audit year2011-12.

Sanders, Bledsoe & Hewett,Certified Public Accountants, LLPAuditing Firm

By _________________________________Authorized Agent

Subscribed and sworn to before meThis 21st day of September, 2012

____________________________________Notary Public (or Clerk or Judge)

My Commission Expires: 5/19/2016Commission No. 00008621

1 Cover sheets(7).pdf2 - Independent Auditor's Report-2011(3).pdf2a - Report 2c - reportable instances of noncompliance & immaterial instances-2011(3).pdf2b - Report 3b - unqualified - instances of noncompliance-2011(3).pdf3 - Disposition - prior year reportable conditions(16).pdf3a - Schedule of Audit results, findings and questioned costs(14).pdf4 - Combined Statement of Assets, Liab... all fund types(13).pdf

4a - Combined Statement of revenues, expend...govt' fund types(12).pdf

4b - GF Budget to Actual(1).pdf

4c - SRF Budget to Actual(1).pdf

5 - Notes To Combine Financial Statements(11).pdf6 - All special revenue fund - balance sheet(10).pdf

6a - All special revenue funds - income statements(9).pdf

6b - All special revenue funds - budget to actual(10).pdf

6d - Agency fund - balance sheet.pdf

7 - Schedule of Expenditures of Federal Awards(6).pdf

7a - Surety bond coverage schedule(3).pdf

8 - Accountant's Professional Liability Insurance(4).pdf

financial statements regulatory basis and reports … · our audit was performed for the purpose of...

Documents