BCPS Audit Report Period Ending June 30, 2012

By LGC at 10:37 am, Dec 07, 2012
BURKE COUNTY PUBLIC SCHOOLS MORGANTON, NORTH CAROLINA

Financial Statements, Supplemental Schedules, Independent A uditors Report and Single A udit R eports For the Year Ended June 3 0 ,2 0 1 2
Lowdermilk Church & Co., L.

Certified Public Accountants
B U R K E C O U N T Y P U B L IC S C H O O L S F o r tlie Y ear Ended June 30,2012
M embers of the Board of Education Ms. Catherine Thomas, Chair of the Board Dr. Don Hemstreet, Vice Chair of the Board Mr. Buddy Armour, Board Member Mr. Randy Burns, Board Member Dr. R.L. Icard, Board Member Ms. Edna Weller, Board Member Mr. Sam Wilkinson, Board Member
Administrative Personnel Mr. Larry Putnam, Superintendent Ms. Jan Crump, Human Resources Director Mr. Keith Lawson, Chief Finance Director
I
I
BURKE COUNTY PUBLIC SCHOOLS

Table of Contents Page(s) Independent Auditors Report Managements Discussion and Analysis Basic Financial Statements: Exhibit 1 2 Government-wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet - Governmental Funds Reconciliation o f the Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Reconciliation o f the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual - General Fund and Annually Budgeted Major Special Revenue Funds Statement of Net Assets - Proprietary Fund Statement o f Revenues, Expenses, and Changes in Fund Net Assets Proprietary Fund Statement of Cash Flows - Proprietary Fund Notes to the Financial Statements 9 10-11 1-2 3-8
3 3 4 4 5
12 12 13-14 14
6 7 8
15 16 17 18 19-34
Schedule
Combining Individual Fund Statements and Schedules: Schedule o f Revenues, Expenditures and Changes in Fund Balance Budget and Actual - General Fund Schedule o f Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Federal Grant Fund Schedule o f Revenues, Expenditures and Changes in Fund Balance Budget and Actual - Capital Outlay Fund Schedule o f Revenues and Expenditures - Budget and Actual (Non-GAAP) Child Nutrition Fund
35-37 38 39-40 41
BURKE COUNTY PUBLIC SCHOOLS ______Table of Contents (continued)______
Compliance Section:
Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards Independent Auditors Report On Compliance With Requirements That Could Have A Direct And Material Effect On Each Major Federal Program And On Internal Control Over Compliance In Accordance With OMB Circular A -133 And The State Single Audit Implementation Act Report On Compliance With Requirements Applicable to Each Major State Program And Internal Control Over Compliance In Accordance With Applicable Sections O f OMB Circular A -133 And The State Single Audit Implementation Act Schedule of Findings and Responses Corrective Action Plan Summary Schedule of Prior Year Audit Findings Schedule of Expenditures of Federal and State Awards
42-43
44-45
46-47 48-50 51 52 53-56
Lowdermilk Church & Co., L.L.P. Certified Public Accountants __________________________________ ________
121 N. Sterling Street Morganton, North Carolina 28655 Phone: (828)433-1226 Fax: (828)433-1230
Independent Auditors Report
To the Board of Education Burke County, North Carolina We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information o f the Burke County Public Schools, North Carolina, as of and for the year ended June 30,2012, which collectively comprise the Burke County Public Schools5 basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Burke County Public Schools, North Carolinas management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Burke County Public Schools, North Carolina as of June 30, 2012, and the respective changes in financial position, and where applicable, cash flows, thereof and the respective budgetaiy comparison for the General Fund the other Special Revenue Fund, Federal Grant Fund and the State Public School Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated November 5,2012 on our consideration of the Burke County Public Schools, North Carolinas internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose o f that report is to describe the scope of our testing o f internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
Accounting principles generally accepted in the United States of America require that the managements discussion and analysis on pages 3 through 8 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted o f inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Burke County Public Schools, North Carolinas financial statements as a whole. The individual fund financial statements are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of expenditures of federal and State awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A -133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The individual fund financial statements and the schedule of expenditures of federal and State awards are the responsibility o f management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
November 5, 2012
M A N A G E M E N T S D ISC U S S IO N AND A N A LY SIS
Management's Discussion and Analysis
This section of the Burke County Public Schools (the Board) financial report represents our discussion and analysis of the financial performance of the Board for the year ended June 30,2012. This information should be read in conjunction with the audited financial statements included in this report.
Financial Highlights
Continued reductions in state funding and the expiration of $9 million dollars of ARRA funds (Federal Stimulus) have resulted in many reductions over the last four years. These many reductions have served to prepare us for the expiration of the ARRA funds. Funding to the Board of Education by the County Commissioners was $13,921,425, representing an decrease of $732,702 (5%) from the prior year. Enrollment in Burke County Public Schools was 12,809, a 481 student decrease in comparison to the previous year. The continued decline in student enrollment further compounds the issue of decreased funding as many o f the state and federal funding formulas are based on student numbers. Burke County Public Schools have lost 1,583 students over the course of the last seven years. However, this .trend appears to have slowed and we anticipate enrollment to stabilize in the 2012-2013 school year. Given all these factors Burke County Public Schools has managed to stabilize its financial situation and generate surpluses for three consecutive years. However, with the expiration of $9 million in stimulus it is anticipated that no surpluses will be generated in the near future. Surpluses generated in these previous years will veiy carefully and strategically be utilized to address areas of nonrecurring expenses. It is managements hope that these surpluses will sustain Burke County Public Schools until we can experience the effects of a recovering economy.
Overview of the Financial Statements

The audited financial statements o f the Burke County Public Schools consist of four components. They are as follows: Independent Auditors Report Management's Discussion and Analysis (required supplementary information) Basic Financial Statements Required supplemental section that presents budgetary statements for governmental funds and budgetary statements for enterprise funds
The Basic Financial Statements include two types of statements that present different views of the Board's finances. The first is the government-wide statements. The government-wide statements are presented on the full accrual basis of accounting and include the statement o f net assets and the statement o f activities. The Statement o f Net Assets includes all of the Board's assets and liabilities. Assets and liabilities are classified in the order of relative liquidity for assets and due date for liabilities. This statement provides a summary of the Board's investment in assets and obligations to creditors. Liquidity and financial flexibility can be evaluated using the information contained in this statement. The Statement of Activities summarizes the Board's revenues and expenses for the current year. A net (expense) revenue format is used to indicate to what extent each function is self-sufficient.
The second set of statements included in the basic financial statements is the Fund Financial Statements, which are presented for the Board's governmental funds and proprietary fund. These statements present the governmental funds on the modified accrual basis of accounting, measuring the near term inflows and outflows o f financial resources and what is available at year-end to spend in the next fiscal year. The proprietaiy fund is presented on the full accrual basis of accounting. The fund financial statements focus on the Board's most significant funds. Because a different basis of accounting is used in the government-wide statements, reconciliation from the governmental fund financial statements to the government-wide statements is required. The government-wide statements provide information about the Board as an economic unit while the fund financial statements provide information on the financial resources of each of the Board's major funds. Government-wide Statements. The Government-wide statements report information about the unit as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Assets includes all of the Boards assets and liabilities. All of the current year's revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid. The two government-wide statements report the Board's net assets and how they have changed. Net assets - the difference between the Boards assets and liabilities - is one way to measure the unit's financial health or position. Over time, increases or decreases in the Board's net assets are an indicator o f whether its financial position is improving or deteriorating. To assess the Board's overall health, you need to consider additional non-financial factors such as changes in the County's property tax base and the condition of its school buildings and other physical assets.
The unit's activities are divided into two categories in the government-wide statements: Governmental Activities: Most of the Board's basic services are included here, such as regular and special education, transportation, and administration. County funding and state and federal aid finance most o f these activities. Business-type Activities: The Board charges fees to help it cover the costs o f certain services it provides. The School food services is included here.
The government-wide statements are shown as Exhibits 1 and 2 of this report. Fund Financial Statements. The fund financial statements provide more detailed information about the Board's funds, focusing on its most significant or "major" funds - not the unit as a whole. Funds are accounting devices the Board uses to keep track of specific sources o f funding and spending on particular programs: Some funds are required by state law, such as the State Public School Fund. The Board has established other funds to control and manage money for a particular purpose or to show that it is properly using certain revenues, such as in the Federal Grants Fund.
Burke County Public Schools has two types of funds: Governmental funds. Most of the Board's basic services are included in governmental funds, which generally focus on two things - how cash and other assets can readily be converted to cash flow in and out, and the balances left at year-end that are available for spending. As a result of this focus, the governmental funds statements provide a detailed short-term view that helps the reader determine whether there are more or fewer financial resources that can be spent in the coming year to finance the Board's programs. Because this information does not encompass the additional long-term focus of the government-wide statements, additional information at the bottom of the governmental funds statements, in the form of a reconciliation, explains the relationship (or differences) between the government-wide and the fund financial statements. The Board has several governmental funds: the General Fund, the State Public School Fund, the Individual Schools Fund, the Capital Outlay Fund, the Federal Grants Fund. The governmental fund statemerits are shown as Exhibits 3,4, 5 and 6 of this report. Proprietary funds. Services for which the Board charges a fee are generally reported in proprietary funds. The proprietary fund statements are reported on the same full accrual basis of accounting as the government-wide statements. Burke County Public Schools has one proprietary fund - which is an enterprise fund - the Child Nutrition Fund. The proprietary fund statements are shown as Exhibits 7, 8 and 9 of this report. Financial Analysis of the Schools as a Whole Net assets is an indicator o f the fiscal health of the Board. Assets exceeded liabilities by $130,265,132 as of June 30, 2012 and total net assets increased by $704,264 from the prior year. The largest component of net assets is invested in capital assets, net of related debt, of $120,553,295. It comprises 92.54% of the total net assets. Following is a summary o f the Statement of Net Assets: Table 1 Condensed Statement of Net Assets as of June 30, 2012 and 2011
G o v e rn m e n ta l A c tiv itie s B u sin e ss-ty p e A c tiv itie s T o ta l G o v e rn m e n t
2012
C urrent assets C apital assets T otal assels C urrent liabilities L ong-term liabilities T otal liabilities Invested in capital assets, net o f related debt R estricted net assets U nrestricted net assets T otal net assets $ 1 1 9,939,035 3,2 5 2 ,9 7 2 5.631.148 $ 1 2 8 ,8 2 3 ,1 5 5 $ $ 17,133,208 120.303.909 $1 3 7 ,4 3 7 ,1 1 7 $ 1,790,227 6.823.735 8.6 1 3 .9 6 2 $
2011
$ 12,815,779 123.780,274 $136,596,053 $ 1,752,072 6.807.613 8.559.685 $ $
2012
931,928 614,260 $1 .546.188 $
_
2011
$ 966,088 652.385 $1 .618.473 $ $ 901 9 3.072 93.973 $
2012
$ 18,065,136 120.918.168 $138,983,305 $ 1,790,227 6.927.946 8.718.173 $
2011
$ 13,781,867 124,432,659 $138,214,526 $ 1,752,973 6,900,685 8.653,658
104.211 104.211
$123,121,771 4,0 7 8 ,0 0 2 836.595 $ 1 28,036,368
614,260
-
652,385
-
$120,553,295 3,252,972 6.458.865 $ 1 30,265,132
$123,774,156 4,078,002 1.708.710 $129,560,868
827.717 $1 .441,977
872.115 $1 .524.500
Net assets increased during the year, by .54%, largely to the increase in net assets in the governmental activities.
The following table shows the revenues and expenses for the Board for the current fiscal year. Table 2 Condensed Statement o f Revenues, Expenses, and Changes in Net Assets For the Years Ended June 30,2012 and 2011
G overnm ental Activities Revenues: Program revenues: Charges for services Operating grants and contributions Capital grants and contributions General revenues: Other revenues TotaJ revenues Expenses: Governmental activities: Instructional services System-wide support services Ancillary services Non-programmed charges Interest on long-term debt Depreciation Business-type activities: Child nutrition Total expenses Change in net assets Beginning net assets Ending net assets 786,787 128.036.368 $128.823.155 111.154.384 3,666,514 124.369.854 $128.036.368 6.887.802 6.887.802 (82,523) 1.524.500 S 1.441.977 7.354.089 7.354.089 (27,772) 1.552.272 $ 1.524.500 6.887.802 114,887,350 704,264 129.560,868 $130.265.132 7.354.089 118.508.473 3,638,740 125.922.124 $129.560.866 80,599,591 21,346,647 1,746,203 740,578 6,556 3,559,973 86,121,128 18,886,785 1,653,256 773,010 26,529 3,693,676 80,599,591 21,346,647 1,746,203 740,578 6,556 3,559,973 86,121,128 18,886,785 1,653,256 773,010 26,529 3,693,676 $ 703,165 89,195,014 76,242 $ 1,780,099 93,361,601 58,422 $2,109,178 4,695,209 $ 2,313,892 5,032,699 $ 2,812,343 93,890,223 76,242 $ 4,093,991 98,394,300 58,422 2012 Buslncss-tvne Activities
2012 2011
Total Governm ent
2011
2012
2011
18.8H.9I4
108.786.335
19.620.774 114.820.896
892 6.805.279
(20.274) 7.326.317
18.812.806 115.591.614
19.600.500 122.147.213
Total governmental activities generated revenues of $108.8 million while expenses in this category totaled $108.0 million for the year ended June 30,2012. Comparatively, revenues were $114.8 million and expenses totaled $111.1 million for the year ended June 30,2011. The increase in net assets stands at $.7 million at June 30, 2012, compared to an increase of $3.6 million in 2011. Instructional services expenses comprised 75% of total governmental-type expenses while system-wide support services made up 20% of those expenses for 2012. County funding comprised 14.9% of total governmental revenue. In 2011, county funding was 13.2%. Much of the remaining governmental revenue for 2012 consists of restricted State and federal money. Business-type activities generated revenue o f $6.8 million and had expenses of $6.9 million. Net assets decreased in the business-type activities by $82,523.
Financial Analysis of the B oard's Funds Governmental Funds. The focus o f Burke County Public Schools governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing the Board's financing requirements. The Board's governmental funds reported a combined fund balance o f $15,342,982, a $4,279,275 increase over last year. All o f the Board's governmental funds had expenditures and other uses that exceeded revenues and other financing sources, except for the general fund. Proprietary Funds. The Child Nutrition Programs reflected a decrease in net assets over the prior year. Expenditures exceeded revenues by approximately $83,000, resulting in a decrease in net assets. Categorization of Expenditures for Governmental Funds Expenditures presented on modified accrual basis of accounting.
I n s t r u c ti o n a l S e r v ic e s S y s te m W id e S u p p o r t S e r v ic e s N o n P ro g ra m C h a rg es C a p ita l P r o j e c t s D e b t S e r v ic e s 2 0 1 2 A n c i ll a r y S e r v ic e s
General Fund Budgetary Highlights Over the course of the year, the Board revised the budget several times to account for changes in revenue expectations. State revenues received were $846,174 less than originally forecasted. The primary reason for the shortfall was an adjustment due to lower student numbers than anticipated. The state allots certain categories to the local system using positions and months of employment methodology rather than dollars. Our actual expenses paid are less than budgeted due to average salaries in Burke County Public Schools being less than the state average. The state revises these allotments to the local district on a monthly basis. These revisions are made to the Burke County Board o f Educations budget at the fiscal year end.
Capital Assets Capital assets decreased by $3,514,490 (or 3%) fi'om previous year. This was largely due to depreciation. The following is a summary of the capital assets, net of depreciation at year-end.
G o v e rn m e n ta l A ctiv ities 2012 Land C onstruction in progress B uildings E quipm ent and furniture V ehicles Total $ 3,414,165 225,091 115,037,435 2 7 6 ,5 8 9 1,350,629 $ 1 2 0,303,909 $ 2011 3,414,165 2,506,480 115,749,358 439,410 1,670.861 $123,780,274 $614,260 $ 614,260 B u sin e ss-ty p e A c tiv itie s 2012 2011 $ 652,385 $ T o ta l P rim a ry G o v e rn m e n t 2012 3,414,165 225,091 115,037,435 890,849 1.350.629 $120,918,169 $ 2011 3,414,165 2,506,480 115,749,358 1,091,795 1.670,861 $124,432,659
.
$ 652,385
Debt Outstanding
During the year the Boards outstanding debt increased by $6,371. The Board is limited by North Carolina General Statutes with regards to the types o f debt it can issue for what purpose that debt can be used. The County holds virtually all debt issued for school capital construction.
Economic Factors
State revenues alone have decreased by $12.34 million annually. Burke County Public Schools has experienced substantial decreases in revenue due to many factors. A very sluggish national and state economy has resulted in less funding. As a result state and federal grants have also become fewer and far more competitive. With a local unemployment rate of 10.7% which outpaces the state at 9.4% and the national rate of 8.2% we have seen the continued erosion of our tax base. As families migrate elsewhere to seek employment we have experienced declining student enrolled. This adversely impacts funding further compounding our issues. These factors and many others have resulted in a substantial reduction of services to our students.
Requests for Information

This report is intended to provide a summary o f the financial condition of Burke County Public Schools. Questions or requests for additional information should be addressed to: Keith Lawson, Chief Finance Director Burke County Board of Education P. O. Drawer 989 Morganton, NC 28680
B A S IC F IN A N C IA L S T A T E M E N T S

Exhibit 1 Statem ent of Net Assets June 30,2012
G o v e rn m e n ta l A c tiv itie s A ssets C ash and investm ents D ue from other governm ents Inventory C apital assets (N ote ]): L and, im provem ents, and construction in progress O th er capital assets, net o f depreciation T otal assets $ 3 ,639,256 116,664,653 137,437 117 614,260 3,639,256 117,278,913 $ 15,607,678 1,525,530 $ 773,866 125,118 32,944 $ 16,381,544 1,650,648 32,944
_____________________ _
B u sin e ss-ty p e A ctivities T o ta l
1,546,188
138,983,305
L ia b ilitie s A ccounts payable and accrued expenses A ccrued salaries and w ages payable L ong-term liabilities: D u e w ithin one year D u e in m ore than one year T otal liabilities 241,493 6,582,242 104,211 104,211 241,493 6,686,453 8,718,173 $ 339,707 1,450,520 $ $ 339,707 1,450,520
8 ,613,962
N e t A ssets Invested in capital assets, net o f related d e b t R estricted: Stabilization by State Statute Individual schools C apital outlay U nrestricted T otal net assets $ 355,847 1,829,136 1,067,989 5 ,631,148 128,823,155 $ 827,717 1,441,977 $ 355,847 1,829,136 1,067,989 6,458,865 130,265,132 119,939,035 614,260 120,553,295
See accompanying notes to financial statements.

Exhibit 2 Page 1 of 2 Statement of Activities For the Year Ended June 30,2012
P ro g ra m Revenues C harges fo r Services O p eratin g G ra n ts and C o ntribution C apital G ra n ts and C o ntribution G overnm ental Activities BusinessT ype Activities
Expenses F unctions/P rogram s Governmental activities: Instructional services: Regular instructional Special populations Alternative programs School leadership Co-curricular School-based support System-wide support services Support and development Special population support and development Alternative programs and services support Technology support Operational support Finance and human resources Accountability System-wide pupil support servives Policy, leadership and public relations Ancillary services Non-programmed charges Interest on long-term debt Unallocated depreciation expense Total governmental activities Business-type activities: School food service Total business-type activities Total $ 43,632,111, 14,166,734 6,006,611 10,403,553 752,132 5,638,450 465,689 190,688 505,804 1,482,913 15,119,190 2,453,417 50,077 2,370 1,076,499 1,746,203 740,578 6,556 3.559.973 107,999.548 $
Total
402,466 300,699 703.165
45,614,867 13,775,889 5,857,816 8,050,508 5,154,393 360,837 198,597 482,166 460,321 6,478,464 734,882 44,165 185,301 1,627,255 169,553 89.195.014
$ 76,242 76.242
2,385,222 (390,845) (148,795) (2,353,045) (752,132) (484,057) (104,852) 7,909 (23,638) (1,022,592) (8,263,785) (1,718,535) (5,912) (2,370) (891,198) (118,948) (571,025) (6,556) (3.559.973) (18.025,127)
$ -
2,385,222 (390,845) (148,795) (2,353,045) (752,132) (484,057) (104,852) 7,909 (23,638) (1,022,592) (8,263,785) (1,718,535) (5,912) (2,370) (891,198) (118,948) (571,025) (6,556) (3.559,973) ri8.025.127)
6.887.802 6.887.802 $ 114.887.350 $
2.109.178 2.109.178 2.812,343 $
4.695.209 4.695.209 93.890023 $
(83.415) (83.415) (83.415)
(83.415) (83.415s ) (18.108.542) cont
76.242
(18,025,12T)
10

Exhibit 2, cont. Page 2 of 2 Statement of Activities For the Year Ended June 30,2012
P ro g ra m Revenues O peratin g C harges fo r Expenses F u nctions/P rogram s General revenues: Unrestricted county appropriations-operating Unrestricted county appropriations-capital Investment earnings, unrestricted Loss on disposal o f fixed assets Miscellaneous, unrestricted Total general revenues, special items and transfers Change in net assets Net assets-beginning Net assets-ending $ $ 13,921,425 2,239,119 12,373 (12,256) 2,651,251 18,811,912 786,787 128,036,368 128,823,155 $ $ 892 892 (82,523) 1,524,500 1,441,977 $ 13,921,425 2,239,119 13,265 (12,256) 2,651,251 18,812,804 704,264 129,560,868 $ 130,265,132 Services G ran ts and C on trib u tio n C apital G ra n ts and C o ntribution G overnm ental Activities BusinessT ype Activities T otal
11

Exhibit 3 Balance Sheet Governmental Funds June 30,2012
M a jo r F u n d s O th e r S pecial A ssets C ash an d investm ents D ue from o th er governm ents T otal assets L ia b ilitie s a n d F u n d B a la n c e s L iabilities: A cco u n ts pay ab le and accrued expenses A ccrued salaries an d w ages T otal liabilities F u n d balances: N onsp en d ab le: R estricted: S tabilization by State Statute S chool C apital O utlay Indiv id u al schools A ssigned: S u b seq u e n t y e ars expenditures U nassigned T otal fu n d balances T otal liabilities and fund balances S 1,710,046 7,575,549 9,343,301 9,722,165 $ 2,804 ,4 1 4 3,098,796 3,183,221 $ 3,759 1,047,671 $ 1,067,989 1,209,638 $ 1,829,136 1,829,136 $ 141,378 4,5 1 4 ,4 6 0 7,575,549 15,342,981 57,706 * 2 9 4 ,3 8 2 3,759 1,067,989 1,829,136 355,847 1,067,989 1,829,136 $ 113,634 265,230 378,864 $ 45,531 38,894 84,425 $ 1,043,912 1,043,912 $ 141,649 141,649 $ $ 141,378 141,378 $ 30 0 ,8 1 4 1,489,413 1,790,227 $ $ G e n e ra l 9,664,459 57,706 9.722,165 $ R e v en u e F u n d S 2,888,839 294,382 3,183,221 $ $ S ta te P u b lic S chool 3,448 1,044,223 1,047,671 $ $ C a p ita l O u tla y 1,209,638 1,209,638 $ $ In d iv id u a l Schools 1,829,136 1,829,136 $ $ F e d e ral G ra n t 12,158 129,219 141,378 $ $
Total
G o v e rn m e n ta l Funds 15,607,679 1,525,529 17,133,208
A m ounts re p o rte d fo r g o vernm ental activities in the statem ent o f net assets are different b ecause: C apital assets used in governm ental activities are not financial resources and, therefore, are not reported in th e funds. L o ng-term liabilities, in cluding accrued co m pensated absences, are n o t d u e and payable in the current perio d and th erefore are n o t re p o rte d in th e funds. N e t assets o f governm ental activities
120,303,909 ____ (6,8 2 3 ,7 3 5 ) $ 128.823.155
12

Exhibit 4 Page 1 of 2 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2012 __________________________
M ajo r Funds________________________________________ O th e r Special G eneral Revenues: State o f North Carolina Burke County United States Government Other local sources Total revenues E xpenditures: Current: Instructional services Regular instructional Special populations Alternative programs School leadership Co-cunricular School-based support System-wide support services Support and development Special populations support and development Alternative programs and services support and development Technology support Operational support Financial and human resource Accountability System-wide pupil support Policy, leadership and public relations Ancillary services Non-programed charges Debt service: Principal Interest and other charges Total expenditures 10,020,834 6.055,194 67,312,465 240,328 6,556 3,310,533 5,350,901 12,703,833 240,328 6,556 104,753,760 859,012 3,690 406,865 25,867 1,547,618 223,618 251,553 129,547 (1,486) 7,093 38 104,487 1,136,432 1,680,892 740,577 1,032,437 5,912 2,370 267,420 1,141,344 44,165 ~ 2,441,202 50,076 2,370 18,759 6,033,792 264,596 216,424 610,671 207,559 809,315 5,974,917 730,245 1,860,620 78,245 291,013 203,656 550,401 2,065,756 14,683.656 474 154,583 44,014 199,071 53,748 16,242 344,680 101,659 516,329 440,702 (2,166) 2,961 433,930 690,959 37,390 159,701 447,077 1,599,481 12,983 702 662,794 40,724,454 9,645,777 1,044,509 3,106,651 . 3,734,897 465,690 5,350,901 1,728,236 4,021,772 3,307,462 1,566,125 1,257,126 43,518,783 14,112,459 5,954,414 10,470,590 691,661 5,692,207 428,818 14,350,243 $ 13,921,425 2,768,614 2,332,791 6,696,345 67,312,465 55,251 2,495,702 5,227,562 5,227,562 12,703,833 $ 1,594,940 $67,312,465 $ 201,332 2,239,119 12,703,833 $ $ $ 69,108,737 16,160.544 15,472,446 8,044,422 108,786,149 Revcune F und State Public School C apital OutlaY Individual Schools Federal G ra n t T otal G overnm ental Funds
cont.
13

Exhibit 4, cont. Page 2 of 2 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30,2012
M ajo r Funds O th er Special G eneral Excess (deficiency) o f revenues over expenditures O ther Financing Sources (Uses): $ 4,329,409 $ 641,151 $
-
T otal Individual Schools F ederal G ra n t $ G overnm ental F unds
State Public School
C apital O utlay $ (814,831) $
Reveune Fund
(123,339)
4,032,391
Transfers (to) from other funds Installment purchase obligation issued 246,884 246,884 4,873,455 (4,873,455)
Net change in fund balance Fund balances, beginning year Fund balances, end o f year
9,202,864
(4,232,304)
3,759
$
(567,947)
(123,339) 1,952,475 $ 1,829,136 $
4,279,275
140,437 $ 9,343,301 $
7,331,101 3,098,796
1,635,935 $1,067,989
11,063,707 $ 15,342,982
3,759
A m ounts reported for governm ental activities in the statem ent o f activities are different because: N e t change in fond balances - total governm ental funds G overnm ental funds report capital o utlays as expenditures. H ow ever, in the statem ent o f activities, the cost o f those assets is allocated over their estim ated useful lives and reported as d epreciation expense. T h is is the am ount by w hich depreciation exceeded capital o utlay in th e current period. Installm ent purchases provide cu rren t financial resources to governm ental funds, w hile the repaym ent o f the principal o f installm ent purchases consum es the current financial reso u rces o f governm ental funds. N eith er transaction has any effect o n n e t assets. T his am ount is the net effect o f these differences in the treatm ent o f installm ent purchases and related items. (6 ,3 7 1 ) (3,464,110) 4,279,275
D isposal o f capital assets reported on the statem ent o f activities but n ot on th e fund statem ents S om e expenditures reported have already been accrued in the statem ent o f activities. C om pensated absences (9,751) (1 2 ,2 5 6 )
C hanges in n e t assets o f governm ental activities.
786,787
14
(T H IS P A G E L E F T B LA N K IN T E N T IO N A L L Y )
Genera! Fund and Annually Budgeted M ajor Special Revenue Funds Statem ent of Revenues, Expenditures, and Changes in Fund Balances - B udget and Actual _________________ For the Y ear Ended June 30,2012
General Fund Variance with Final Budget Positive (Neeative) $ 13,921,425
* -
Original Revenues: State o f North Carolina Burke County U.S. Government Other local sources Total revenues Expenditures: Current: Instructional services Regular instruction Special populations Alternative programs School leadership Co-curricular School-based support System-wide support services Support and development Special population support and development Alternative programs and services support and development Technology support Operational support Financial and human resources Accountability System-wide pupil support Policy, leadership and public relations Ancillary services Non-programmed charges Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers (to) from other funds Appropriated fund balance Excess of revenues and other sources over (under) expenditures and other uses Fund balances, beginning of year Fund balances, end of year $ 13,921,425 550,000 14,471,425 $
Final $ 13,921,425 495,233 14.416,658
Actual Amounts
428.818 14,350,243
(66.4151 (66,415)
2,768,648 2,538 2,651 1,510,309 569,872 293,280 3,000 855
447,182 (2,166) 2,908 454,503 690,959 30,223 50,268 474 500 18,947 6,309,029 1,055,523 5,962 2,370 910,617 3,690 383.250 10.364,239
440,702 (2,166) 2,961 433,930 690,959 37,390 53,748 474

-
6,480 (53) 20,573 (7,167) (3,480) 500 188 275,237 23,086 50 51,605 (23.615) 343.405
.
244,094 7,218,315 1,124,682 24,700 3,999 369,058 25,620 309.804 14.471.425
18,759 6,033,792 1,032,437 5,912 2,370 859,012 3,690 406,865 10.020,834
4,052,419
-
4,329,409 4,873,455 '
276.990 4,873,455 4,052,419
(4,052.419)
9,202,864 ______140,437 _$__9j343^301_
9.202.864.
See accompanying notes tofinancial statements.
15
Exhibit 5 Page 1 of 2
Original $ 1,581,132 2,097,171 2.086.273 5.764.576 $
O ther Special Revenue Fund_________________ Variance with Final Budget Actual Positive Amounts (Negative) Final 1,617,407 4,749,680 2.302.934 8.670,022 $ 1,594,940 2,768,614 2.332,791 6.696,345 $ (22,467) (1,981,066) 29.857 (1,973.677)
______________________State Public School Fund Variance with Final Budget Positive (Negative) $ (988,163) (988.163)
Original $ 68,205,650 68,205.650
Final $ 68,300,628 * 68.300.628
Actual Amounts $ 67,312,465 67,312,465
1,751,446 491,539 1,744,411 275,948 1,080 776,301 2,702 146 350,544 11,641 203,831 1,489,321
218,041 436,300 1,687,448 12,983 702 666,127 16,242 323,189 282,834 561,992 267,420
159,701 447,077 1,599,481 12,983 702 662,794 16,242 264,596 216,424 610,671 267,420
58,340 (10,777) 87,967
43,119,033 9,377,907 1,174,275 3,673,952 3,668,601 285,813 109,833 88,770 479,491 5,102,360 758,382
40,861,581 9,669,341 1,628,512 3,105,829 3,878,905 344,274 161,145 210,379 982,513 5,891,132 1,141,751 44,165
40,724,454 9,645,777 1,044,509 3,106,651 3,734,897 344,680 154,583 207,559 809,315 5,974,917 1,141,344 44,165
137,127 23,564 584,003 (822) 144,008 (406) 6,563 2,820 173,199 (83,785) 406
3,333 58,593 66,410 (48,679)
46,491 560,536 2.262.533 9.968.470
25,867 2,163,347 1.556,181 8.218.674
25,867 1,547,618 223.618 6,055,194 615,729 1,332.562 2.163.479
241,551 125,682 68.205.650
251,553 129,547 68,300,628
251,553 129,547 (1,486) 67,312,465
1.486 988.163
(4,203,894)
-
451,348 (451.348)
641,151 (4,873.455)
-
189,803 (4,873,455) 451.348
4.203,894
(4,232,304) 7,331,101 $ 3,098,796
X (4 232 304^
X 3,759 3,759
conl.
15

Exhibit 5, cont. Page 2 o f2
G eneral Fund and Annually Budgeted M ajor Special Revenue Funds Statem ent of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual F or the Y ear Ended June 30, 2012_________________________________
Federal Grant Fund
Variance with Final Budget Positive (Negative) $ (4,546.399) (4,546.399)
Original Revenues: U.S. Government Total revenues Expenditures: Current: Instructional services Regular instruction Special populations Alternative programs School leadership School-based support System-wide support services Support and development Special population support and development Alternative programs and services support and development Technology support Operational support Policy, leadership and public Ancillary services Non-programmed charges Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers (to) from other funds Excess of revenues and other sources over (under) expenditures and other uses Fund balances, beginning of year Fund balances, end of year $ 16.893,155 16,893,155
Final $ 17,250.231 17,250.231 $
Actual Amounts 12.703.833 12.703,833
5,059,435 4,272,159 3,688,703 218,222 531,179 134,390 13,429 106,024 342,941 38,449 27 2.488.197 16.893,155
1,912,799 4,410,062 4,023,382 1,599,821 1,433,387 148,347 42,293 107,717 476,677 213,941 91 2,881.715 17.250.231
1,728,236 4,021,772 3,307,462 1,566,125 1,257,126 101,659 44,014 78,245 291,013 203,656 38 104.487 12.703.833
184,563 388,290 715,920 33,696 176,261 46,688 (1,721) 29,472 185,664 10,285 53 2.777.227 4.546.399
.1
* _
See accompanying noies iofinancial statements.
15

Exhibit 6
Statement of Net Assets Proprietary Fund June 30,2012
______________________
Assets Current assets: Cash and investments Accounts receivable Inventory

Total current assets Noncurrent assets: Fixed assets, net of accumulated depreciation Total assets Liabilities Current liabilities: Non-current liabilities: Compensated absences Total liabilities Net assets: Invested in capital assets Unrestricted Total net assets See accompanying notes to financial statements.
773,866 125,118 32,944 931,928
614,260 $ 1.546,188
104,211 104,211
614,260 827,717 $ 1,441,977
16

Exhibit 7 Statement of Revenues, Expenses, and Changes in Fund Net Assets Proprietary Fund ____________ ___________ For the Year Ended June 30,2012 Operating Revenues:
Food sales Miscellaneous Total operating revenues $ 2,007,255 101,923 2,109,178
Operating Expenses:
Food cost: Purchased food Donated commodities Salaries and benefits Materials and supplies Repairs and maintenance Depreciation Contracted services Non-capitalized equipment Travel Advertising Other Total operating expenses Operating loss
2,966,301 463,152 2,934,431 194,744 59,155 100,487 128,318 14,699 25,176 238 _______1.101 6,887,802 (4,778,624)
Nonoperating Revenues:
Federal reimbursements Federal commodities Interest earned on investments State grants - regular Total nonoperating revenues Change in net assets Total net assets, beginning Total net assets, ending See accompanying notes to financial statements. 4,282,955 398,426 892 ______ 13,828 4,696,101 (82,523) 1,524,500 $ 1.441.977
17

Exhibit 8
Statem ent of Cash Flows P roprietary Fund F or the Y ear Ended June 30,2012
Cash Flows F rom O perating Activities: Cash received from customers and others Cash paid for goods and services Cash paid to employees for services Net cash provided (used) by operating activities Cash Flows Provided by N oncapital Financing Activities: Federal and State reimbursements Cash Flows Used by C apital and Related F inancing Activities: Acquisition o f fixed assets Total Cash Flows Provided by Investing Activities: Interest on investments Net increase (decrease) in cash and cash equivalents Cash and cash equivalents: Beginning of year End o f year Reconciling of O perating Loss to Net Cash Provided (Used) by O perating Activities: Operating loss Adjustments to reconcile operating loss to net cash provided (used) by operating activities: Depreciation Donated commodities Change in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in inventories Increase (decrease) in deferred revenue Increase (decrease) in accounts payable and accrued vacation Total adjustments Net cash provided (used) by operating activities Noncash Operating and Noncapital Financing Activities: The Child Nutrition Fund received donated commodities with a value of $398,426 during the fiscal year. The receipt o f the commodities is recognized as a nonopertating revenue. The fund recorded the consumption o f $463,152 worth o f donated commodities during the fiscal year as an operating expense. These transactions are reported on Exhibit 7. See accom panying notes to financial statements.
2,160,718 (2,779,169) (3,530,024) (4,148,475)
4,296,783
(62.364) (62.364)
__________ 892 86,836 687,030 773,866
(4,778,624) 100,489 398,426
52,441 68,555 (901) ________ 11,139 630,149 $ (4,148,475)
18

Notes to the Financial Statements For the Year Ended June 30,2012
I.
Summary of Significant Accounting Policies

The accounting policies o f the Burke County Public Schools conform to generally accepted accounting principles as applicable to governments. The following is a summary o f the more significant accounting policies: A. Reporting Entity Burke County Public Schools (Board) is a Local Education Agency empowered by State law Chapter 115C of the North Carolina General Statutes with the responsibility to oversee and control all activities related to public school education in Burke County, North Carolina. The Board receives State, local and federal government funding and must adhere to the legal requirements of each funding entity.
B.
Basis of Presentation
Government-wide Statements: The statement of net assets and the statement o f activities display information about the Board. These statements include the financial activities of the overall government. Eliminations have been made to minimize the effect of internal activities upon revenues and expenses. These statements distinguish between the governmental and business-type activities o f the Board. Governmental activities generally are financed through intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The statement of activities presents a comparison between direct expenses and program revenues for the business-type activity of the Board and for each function of the Boards governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Programs revenues include (a) fees and charges paid by the recipients of goods or seivices offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the Boards funds. Separated statements for each fund categoiy - governmental and proprietary are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for seivices, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities.
19
The Board reports the following major governmental funds: General Fund - The General Fund is the general operating fund of the Board. The General Fund accounts for all financial resources except those that are required to be accounted for in another fund. This fund is the Local Current Expense Fund, which is mandated by State law [G.S.l 15C-426] also, Fund 8 is separate from Fund 2 in the funds maintained by the Board of Education pursuant to State Law [G.S. 115C-426]. Other Special Revenue Fund - The Other Special Revenue Fund includes revenues from reimbursements, including indirect costs, fees for actual costs, tuition, sales tax revenues distributed using the ad valorem method pursuant to G.S. 105-472(b)(2), sales tax refunds, gifts and grants restricted as to use, trust funds federal grants restricted as to use, federal appropriations made directly to local school administrative units, funds received for prekindergarten programs, and special programs. State Public School Fund - The State Public School Fund includes appropriations from the Department of Public Instruction for the current operating expenditures of the public school system. Federal Grant Fund - The Federal Grant Fund includes appropriations from the U.S. Government for grants allocated to the Board. Individual Schools Fund - The Individual Schools Fund includes revenues and expenditures of the activity funds of the individual schools. The primary revenue sources include funds held on the behalf of various clubs and organizations, receipts from athletic events, and proceeds from various fund raising activities. The primary expenditures are for athletic teams, club programs, activity buses, and instructional needs. Capital Outlay Fund - The Capital Outlay Fund accounts for financial resources to be used for the acquisition and construction of major capital facilities (other than those financed by proprietary funds and trust funds). It is mandated by State law [G.S.l 15C-426]. Capital projects are funded by Burke County appropriations, restricted sales tax moneys, proceeds o f Burke County bonds issued for public school construction, lottery proceeds, as well as certain State assistance. The Board reports the following major enterprise fund: Child Nutrition Fund - The Child Nutrition Fund is used to account for the food service program within the school system and is reported as an enterprise fund.
C.
Measurement Focus and Basis of Accounting

Government-wide and Proprietary Fund Financial Statements. The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Non-exchange transactions, in which the Board gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants and donations. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Governmental Fund Financial Statements. Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The Board considers all revenues reported in the governmental funds to be available if the revenues are collected within 60 days after
20
year-end. These could include federal, State, and county grants, and some charges for services. Expenditures are recorded when the related fund liability is incurred, except for claims and judgments and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Acquisitions under capital leases are reported as other financing sources. Under the terms of grant agreements, the Board funds certain programs by a combination of specific cost-reimbursement grants and general revenues. Thus when program expenses are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the Boards policy to first apply cost-reimbursement grant resources to such programs and then general revenues. All governmental and business-type activities and enterprise funds of the Board follow FASB Statements and Interpretations issued on or before November 30, 1989, Accounting Principles Board Opinions, and Accounting Research Bulletins, unless those pronouncements conflict with GASB pronouncements. D. Budgetary Data The Boards budgets are adopted as required by the North Carolina General Statutes. Annual budgets are adopted for all funds, except for the individual schools special revenue funds, as required by the North Carolina General Statutes. No budget is required by State law for individual school funds. All appropriations lapse at the fiscal year-end. All budgets are prepared using the modified accrual basis of accounting. Expenditures may not legally exceed appropriations at the functional level for all annually budgeted funds. The Board has authorized the Superintendent to move moneys (up to $1,000) from one function to another within a fund. Such transfers must be reported to the governing board at its next regular meeting. Transfers in excess of this amount or transfers between funds require governing board approval. Amendments which alter the county appropriation or transfer money to or from the Capital Project Fund also require the approval of the Burke County Board of Commissioners. All amendments must be approved by the governing board. During the year, several immaterial amendments to the original budget were necessary. The budget ordinance must be adopted by July 1 of the fiscal year or the governing board must adopt an interim budget that covers that time until the annual ordinance can be adopted.
E.
Assets, Liabilities and Fund Equity

1. Deposits and Investments All deposits o f the Board are made in board-designated official depositories and are secured as required by State law (G.S. 115C-444). The Board may designate, as an official depositoiy, any bank or savings association whose principal office is located in North Carolina. Also, the Board may establish time deposit accounts such as NOW and Super NOW accounts, money market accounts, and certificates o f deposit. The Board also has money credited in its name with the State Treasurer and may issue State warrants against these funds. State law (G.S. 115C-443) authorizes the Board to invest in obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States; obligations of the State of North Carolina; bonds and notes of any North Carolina local government or public authority; obligations of certain non-guaranteed federal agencies; certain high quality issues of commercial paper and bankers acceptances; and the North Carolina Capital Management Trust (NCCMT), an SEC-registered (2a-7) money market mutual fund; and the North Carolina State Treasurers Short Term Investment Fund (STIF).
21
The STIF is managed by the staff of the Department o f State Treasurer and operated in accordance with state laws and regulations. It is not registered with the SEC. It consists o f an internal portion and an external portion in which the board participates. Investments are restricted to those enumerated in G.S. 147-69.1. The Boards investments are reported at fair value as determined by quoted market prices. The NCCMT Cash Portfolios securities are valued at fair value, which is the NCCMTs share price. The STIF securities are reported at cost and maintain a constant $1 per share value. Under the authority o f G.S. 147-69.3, no unrealized gains or losses o f the STIF are distributed to external participants of the fund. 2. Cash and Cash Equivalents The Board pools money from several funds to facilitate disbursement and investment and to maximize investment income. Therefore, all cash and investments are essentially demand deposits and are considered cash and cash equivalents. 3. Inventories The inventories of the Board are valued at cost and the Board uses the first-in, first-out (FIFO) flow assumption in determining cost. Proprietary Fund inventories consist of food and supplies and are recorded as expenses when consumed. 4. Capital Assets The Boards capital assets are recorded at original cost. Donated assets are listed at their estimated fair value at the date of donation or forfeiture. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. Certain items acquired before July 1, 1950 are recorded at an estimated original historical cost. The total of these estimates is not considered large enough that any errors would be material when capital assets are considered as a whole. It is the policy of the Board to capitalize all capital assets costing more than $5,000 with an estimated useful life of two or more years. In addition, other items that are purchased and used in large quantities such as student desks are capitalized. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Burke County holds title to certain properties, which are reflected as capital assets in the financial statements o f the Board. The properties have been deeded to the County to permit installment purchase financing of acquisition and construction costs and to permit the County to receive refunds of sales tax paid for construction costs. Agreements between the County and the Board give the schools full use of the facilities, full responsibility for maintenance of the facilities, and provides that the County will convey title of the property back to the Board, once all restrictions of the financing agreements and all sales tax reimbursement requirements have been met.
22
Buildings Furniture and equipment Vehicles and motorized equipment Computer equipment
50 5 6 3
Depreciation for building and equipment that serve multiple purposes cannot be allocated ratably and is therefore reported as unallocated depreciation on the Statement of Activities. 5. Long-Term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities. 6. Compensated Absences The Board follows the States policy for vacation and sick leave. Employees may accumulate up to thirty (30) days earned vacation leave with such leave being fully vested when earned. For the Board, the current portion of the accumulated vacation pay is not considered to be material. The Boards liability for accumulated earned vacation and the salary-related payments as of June 30,2012 is recorded in the government-wide and proprietary fund financial statements on a FIFO basis. The sick leave policy of the Board provides for an unlimited accumulation o f earned sick leave. Sick leave does not vest, but any unused sick leave accumulated at the time of retirement may be used in the determination of length of service for retirement benefit purposes. Since the Board has no obligation for accumulated sick leave until it is actually taken, no accrual for sick leave has been made. 7. Net Assets/Fund Balances Net assets in the government-wide and proprietary fund financial statements are classified as invested in capital assets, net of related debt; restricted; and unrestricted. Restricted net assets represent constraints on resources that are either externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments, or imposed by law through state statute. Fund Balance In the governmental fund financial statements, fund balance is composed of five classifications designed to disclose the hierarchy of constraints placed on how fund balance can be spent. The governmental fund types classify fund balances as follows: Nonspendable Fund Balance - This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact.
23
Inventories - portion of fund balance that is not an available resource because it represents the year-end balance of ending inventories, which are not spendable resources. Assets held for resale - portion of fund balance that is not an available resource because it represents the year end balance of assets held for resale, which are not spendable resources. Restricted Fund Balance - This classification includes amounts that are restricted to specific purposes externally imposed by creditors or imposed by law. Restricted for Stabilization by State Statute - portion of fund balance that is restricted by State Statute [G.S. 115C-425(a)]. Restricted for School Capital Outlay - portion of fund balance that can only be used for School Capital Outlay. [G.S. 159-18 through 22] Restricted for Individual Schools - revenue sources restricted for expenditures for the various clubs and organizations, athletic events, and various fund raising activities for which they were collected. Committed Fund Balance - portion of fund balance that can only be used for specific purpose imposed by majority vote by quorum of Board of Educations governing body (highest level of decision-making authority) and in certain instances approval by the Countys governing body is required. Any changes or removal of specific purpose requires majority action by the governing bodies that approved the original action. Assigned Fund Balance - portion of fund balance that Burke County Public Schools intends to use for specific purposes. Subsequent Years Expenditures - portion of fund balance that is appropriated in the next years budget that is not already classified in restricted o f committed. The governing body approves the appropriation; however the budget ordinance authorizes the manager to modify the appropriations by resource or appropriation within funds up to $100,000. Unassigned Fund Balance - the portion of fund balance that has not been restricted, committed, or assigned to specific purposes or other funds. Burke County Public Schools has a revenue spending policy that provides guidance for programs with multiple revenue sources. The Finance Officer will use resources in the following hierarchy: bond proceeds, federal funds, State funds, local non-board of education funds, board o f education funds. For purposes of fund balance classification expenditures are to be spent from restricted fund balance first, followed in-order by committed fund balance, assigned fund balance and lastly unassigned fund balance. The Finance Officer has the authority to deviate from this policy if it is in the best interest of the Board of Education. 8. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant areas where estimates are made are indirect costs and depreciable asset lives.
24
II.
Stewardship, Compliance, and Accountability
A. Significant Violations of Finance-Related Legal and Contractual Provisions

None reported.
B. Excess of Expenditures over Appropriations

During the fiscal year ended June 30, 2012, the Board reported expenditures that violated State law [G.S. 115C-441] because they exceeded the amounts appropriated in the budget ordinance. In the General Fund, the Board spent in excess of the budget for the following functions (level of budgetary control): Alternative programs - $53 School based support - 7,167 System wide support services - $3,480 Non-programmed charges - $23,617
In the other Special Revenue Fund, The Board spent in excess of the budget for the following functions (level of budgetary control): Special populations - $10,771 Operational support - $48,679
In the State Public School Fund, the Board spent in excess of the budget for the following functions (level of budgetary control): School leadership - $822 Operational support - $83,785
In the Capital Outlay Fund, the Board spent in excess of the budget for the following functions (level of budgetary control): Debt service - $246,884
In the Child Nutrition Fund, the Board spent in excess o f the budget for the following functions (level of budgetary control): Donated commodities - $38,420 Contracted services - $72,768
The excess above was a result of audit entries and entries to accrue payables after June 30, 2012 arid can be corrected with a retroactive budget amendment.
C. Deficit in Fund Balance of Individual Funds

None reported.
25
in.
Detail Notes on All Funds

A. Assets 1. Deposits All of the Boards deposits are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits exceeding the federal depository insurance coverage level are collateralized with securities held by the Boards agents in the units name. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurers agent in the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the Board, these deposits are considered to be held by the agent in the entitys name. The amount of the pledged collateral is based on an approved averaging method for non-interest bearing deposits and the actual current balance for interest-bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy o f their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the Board or with the escrow agent. Because of the inability to measure the exact amount of collateral pledged for the Board under the Pooling Method, the potential exists for under-collateralization, and this risk may increase in periods of high cash flows. However, the State Treasurer o f North Carolina enforces strict standards of financial stability for each depositoiy that collateralizes public deposits under the Pooling Method. The Board has no policy regarding custodial credit risk for deposits. At June 30,2012, the Board had deposits with banks and savings and loans with a carrying amount o f $8,851,897 and with the State Treasurer of $ 15,606. The bank balances with the financial institutions and the State Treasurer were $10,348,361 and $276,513, respectively. O f these balances, $250,000 was covered by federal depository insurance and $10,374,874 was covered by collateral held by authorized escrow agents in the name of the State Treasurer. 2. Investments At June 30,2012, the Board of Education had $7,514,041 invested with the North Carolina Capital Management Trusts Cash Portfolio which carried a credit rating of A AAm by Standard and Poors. The Board has no policy for managing interest rate risk or credit risk. 3. Accounts Receivable Receivables at the government-wide level at June 30, 2012, were as follows: Due From O ther Governments Governmental Activities: General fund Other governmental activities Total Business-type Activities: Child Nutrition $ 57,706 1.467.823
$1.525.529
$ 125.118
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Due from other governments consists of the following: Governmental Activities: General fund Other special revenue fund State public school fund Federal grant fund Total Business-type Activities: Child Nutrition Fund 4. Capital Assets Capital asset activity for the year ended June 30,2012, was as follows: Beginning Balance Governmental Activities: Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated: Buildings Equipment and furniture Vehicles Total capital assets being depreciated Less accumulated depreciation for: Buildings Equipment and furniture Vehicles Total accumulated depreciation Total capital assets being depreciated, net Governmental activity capital assets, net $ 3,414,165 2.506.480 5.920.645 Ending Balance $ 3,414,165 225.091 3.639.256 183,701,831 4,416,066 9.553.552 197.671.449 68,664,396 4,139,477 8.202,923 81.006.796 116.664.653 $120.303.909
57,706 294,382 1,044,223 129,219
Local grant funds Local grant funds Operating funds from DPI Grant funds from U.S. Government
$1.525.529
$ 125.118
Food service funds from the State
Increases
Decreases
$ 225.091 $ 225.091 $2,555,775 52,903 300,525 $2,909,203
$ 2.506.480 $2,506,480 22,462 191,693 246.158 $ 460.314 6,888 195,012 246.158 $ 448.058 $
181,168,519 4,554,856 9.499.185 195.222.560 65,419,161 4,115,446 7.828.324 77.362.931 117.859.629 $123.780.274
3,252,123 219,043 620.757 $4,091,923
Depreciation was charged to governmental functions as follows: Unallocated depreciation Operational support services Total $3,559,973 531.950 $4.091.923
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Beginning Balance Business-type Activities: Child Nutrition Fund: Capital assets being depreciated: Furniture and equipment Total capital assets being depreciated Less accumulated depreciation for: Furniture and equipment Total accumulated depreciation Child Nutrition capital assets, net Construction Commitments
Increases
Decreases
Ending Balance
$3.134.913 3.134.913
$ 62.363 $ 62.363
$_____ = $ -
$3.197.276 3.197.276
2.482.528 2.482.528 $ 652,385
$100.488 $100,488 $100,488 $100.488
$_____ $ $
-
2.583.016 2.583.016 $ 614.260
Burke County Public Schools has active construction projects as of June 30, 2012. The projects consist of repair and/or replacement roofs at Table Rock Middle School and Heritage Middle School. At year end the school systems financial commitment to Benton Roofing for the roofing projects is $166,170.00. B. Liabilities 1. Pension Plan Obligations a. Teachers' and State Employees Retirement System Plan Description. Burke County Public Schools contributes to the statewide Teachers and State Employees Retirement System (TSERS), a cost-sharing multiple-employer defined benefit pension plan administered by the State o f Noith Carolina. TSERS provides retirement benefits to plan members and beneficiaries. Article 1 of G.S. Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Teachers and State Employees Retirement System is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The States CAFR includes financial statements and required supplementary information for TSERS. This report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919) 981-5454. Funding Policy. Plan members are required to contribute six percent of their annual covered salary and the Board is required to contribute at an actuarially determined rate. The current rate is 13.12% of annual covered payroll. The contribution requirements of plan members and Burke County Public Schools are established and may be amended by the North Carolina General Assembly. The Boards contributions to TSERS for the years ended June 30,2012,2011, and 2010 were $8,208,579, $7,102,445, and $6,141,056, respectively, equal to the required contributions for each year.
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b.
Other Post-emplovment Benefits Healthcare Benefits Pi an Description - The postemployment healthcare benefits are provided through a costsharing multiple-employer defined benefit plan administered by the Executive Administrator and the Board of Trustees of the Comprehensive Major Medical Plan (the Plan). The Executive Administrator and the Board o f Trustees o f the Plan establishes premium rates except as may be established by the General Assembly in an appropriation act. The Plans benefit and contribution provisions are established by Chapter 135-7, Article 1, and Chapter 135, Article 3 of the General Statues and may be amended only by the North Carolina General Assembly. By General Statue, the Plan accumulates contributions from employees and any earnings on those contributions in the Retiree Health Benefit Fund. These assets shall be used to provide health benefits to retired and disabled employees and their applicable beneficiaries. These contributions are irrevocable. Also by law, these assets are not subject to the claims of creditors o f the employers making contributions to the Plan. The State of North Carolina issues a publicly available financial report that includes financial statements and required supplementary information for the States Comprehensive Major Medical Plan (also, referred to as the State Health Plan). An electronic version of this report is available by accessing the North Carolina Office of the State Controllers Internet home page http://www.ncosc.net/ and clicking on Financial Reports, or by calling the State Controllers Financial Reporting Section at (919) 981-5454. Funding Policy - The Comprehensive Major Medical Plan is administered by the Executive Administrator and Board of Trustees of the Plan, which establish premium rates except as may be established by the General Assembly in an appropriation act. The healthcare benefits for retired and disabled employees are the same as for active employees, except that the coverage becomes secondary when former employees become eligible for Medicare. For employees first hired on and after October 1, 2006, future coverage as retired employees is subject to the requirement that the future retiree have 20 or more years of retirement service credit in order to receive coverage on a noncontributory basis. Employees first hired on and after October 1,2006 with 10 but less than 20 years of retirement service credit are eligible for coverage on a partially contributory basis. For such future retirees, the State will pay 50% of the State Health Plans total noncontributory premium. For employees hired before October 1, 2006, healthcare benefits are provided to retirees (at no charge to the retirees) who have at least five years of contributing retirement membership prior to disability or retirement. In addition, persons who became suiviving spouses of retirees prior to October 1, 1986, receive the same coverage as retirees at the States expense. Contributions are determined as a percentage of covered monthly payroll. Annually, the monthly contribution rates to the Plan, which are intended to finance benefits and administrative expenses on a pay-as-you-go basis, are determined by the General Assembly in the Appropriations Bill. For the fiscal years ended June 30, 2012,2011, and 2010, the School Board paid all annual required contributions to the Plan for postemployment healthcare benefits of $3,115,613, $3,362,021, and $3,185,223, respectively. These contributions represented 5.0%, 4.90%, and 4.50% of covered payroll, respectively.
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2.
Long-term Disability Benefits Plan Description - Short-term and long-term disability benefits are provided through the Disability Income Plan of North Carolina (DIPNC), a cost-sharing, multiple-employer defined benefit plan. The DIPNC is administered by the Board of Trustees of the Teachers and State Employees Retirement System. Long-term disability benefits are payable as an other postemployment benefit from DIPNC after the conclusion of the short-term disability period or after salary continuation payments cease, whichever is later, for as long as an employee is disabled. Benefit and contribution provisions are established by Chapter 135, Article 6, of the General Statues and may be amended only by the North Carolina General Assembly. The Plan accumulates contributions from employers and any earnings on those contributions in the Disability Income Plan Trust Fund. The plan does not provide for automatic post-retirement benefit increases. The State of North Carolina issues a publicly available financial report that includes financial statements and required supplementary information for the DIPNC. An electronic version of this report is available by accessing the North Carolina Office of the State Controllers Internet home page http://www.ncosc.net/ and clicking on Financial Reports, or by calling the State Controllers Financial Reporting Section at (919) 981-5454. Funding Policy - An employee is eligible to receive long-term disability benefits provided the following requirements are met: (1) the employee has five or more years of contributing membership service in the Teachers and State Employees Retirement System of North Carolina, earned within 96 months prior to the end of the short-term disability period or cessation of salary continuation payments, which ever is later; (2) the employee must make application to receive long-term benefits within 180 days after the conclusion of the short-term disability period or after salary continuation payments cease or after monthly payments for Workers Compensation cease (excluding monthly payments for permanent partial benefits), whichever is later; (3) the employee must be certified by the Medical Board to be mentally or physically disabled for the further performance o f his/her usual occupation; (4) the disability must have been continuous, likely to be permanent, and incurred at the time of active employment; (5) the employee must not be eligible to receive an unreduced retirement benefit from the Retirement System; and (6) the employee must terminate employment as a permanent, full-time employee. An employee is eligible to receive an unreduced retirement benefit from the Retirement System after (1) reaching the age of 65 and completing 5 years of creditable service, or (2) reaching the age o f 60 and completing 25 years o f creditable service, or (3) completing 30 years of creditable service, at any age. The monthly long-term disability benefit is equal to 65% of one-twelfth o f an employees annual base rate of compensation last payable to the participant or beneficiary prior to the beginning of the short-term disability period, plus the like percentage of one twelfth o f the annual longevity payment to which the participant or beneficiary would be eligible. The monthly benefits are subject to a maximum of $3,900 per month reduced by any primary Social Security disability benefits and by monthly payments for Workers Compensation to which the participant or beneficiary may be entitled. The monthly benefit shall be further reduced by the amount of any monthly payments from the Department of Veterans Affairs, any other federal agency or any payments made under the provisions of G.S.127A-108, to which the participant or beneficiary may be entitled on account of the same disability. Providing in any event, the benefits payable shall be no less than $10 a month. When an employee qualifies for an
30
unreduced service retirement allowance from the Retirement System, the benefits payable from DIPNC will cease, and the employee will commence retirement under the TSERS. For members who obtain five years of membership service on or after August 1,2007, the monthly long-term disability benefit is reduced by the primary Social Security retirement benefit to which you might be entitled should you become age 62 during the first 36 months. After 36 months of long-term disability, there will be no further payments from the DIPNC unless the member is approved for and is in receipt of primary Social Security disability benefits. It is payable so long as the member remains disabled and is in receipt of a primary Social Security disability benefit. When an employer qualifies for an unreduced service retirement allowance from the Retirement System, the benefits payable from DIPNC will cease, and the employee will commence retirement under the TSERS. The Boards contributions are established in the Appropriations Bill by the General Assembly. Benefit and contribution provisions are established by Chapter 135, Article 6, of the General Statutes and may be amended only by the North Carolina General Assembly. The contributions cannot be separated between the amounts that relate to other postemployment benefits and employment benefits for active employees. Those individuals who are receiving extended short-term disability benefit payments cannot be separated from the number o f members currently eligible to receive disability benefits as an other postemployment benefit. For the fiscal years ended June 30, 2012, 2011, and 2010, the Board paid all annual required contributions to the DIPNC for disability benefits o f $328,184, $356,786, and $368,070, respectively. These contributions represented .52%, .52% and .52% of covered payroll, respectively. 3. Accounts Payable Accounts payable as June 30,2012, are as follows:
Vendors
Governmental activities: General Other governmental Total governmental activities Business-type activities: Child nutrition $113,634 187.180 $300.814
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4.
Risk Management The Board is exposed to various risks of losses related to torts; theft of, damage to, and destruction o f assets; errors and omissions; injuries to employees; and natural disasters. The Board participates in the North Carolina School Boards Trust (the Trust), a member funded risk management program administered by the North Carolina School Boards Association. Through the Trust, the Board maintains general liability and errors and omissions coverage of $1 million per claim. The Trust has an annual aggregate limit for general liability of $2,550,000 and an annual aggregate limit of $2,550,000 for errors and omissions claims. The Trust is reinsured through commercial companies for losses in excess of $150,000 per claim for errors and omissions and general liability. Statutory workers compensation coverage is purchased through private insurers (or self-insured by the local board). Coverage is provided to the extent employees are paid from Federal or local funds. Workers Compensation coverage is provided by the State of North Carolina through a self-insured fund, to the extent employees are paid from State funds. The Board also participates in the Public School Insurance Fund (the Fund), a voluntary, self-insured risk control and risk financing fund administered by the North Carolina Department of Public Instruction. Coverage is provided on an all risk perils contract. Buildings and contents are insured on a replacement cost basis. The Fund purchases excess reinsurance to protect the assets of the Fund in the event of a catastrophic event. The Fund maintains a self-insured retention o f $10 million. Excess reinsurance is purchased through commercial insurers. A limit of $5 million per occurrence is provided on Flood, Earthquake, Business Interruption and Extra Expense. $10 million per occurrence is provided on Increased Cost of Construction. The Board also participates in the Teachers and State Employees Comprehensive Major Medical Plan, a self-funded risk financing pool of the State administered by Blue Cross and Blue Shield o f North Carolina. Through the plan, permanent full-time employees of the Board are eligible to receive health care benefits up to a $5 million lifetime limit. The Board pays the full cost of coverage for employees enrolled in the Comprehensive Major Medical Plan. The Board pays the full cost of coverage for employees opting for the 70/30 plan. Employees opting for 80/20 coverage are responsible for $21.62 of the cost of coverage. In accordance with G.S. 115C-442, the Boards employees who have custody of the Boards monies at any given time o f the Boards funds are performance bonded through a commercial surety bond. The finance officer is bonded for $100,000. The remaining employees that have access to funds are bonded under a blanket bond for $100,000. The Board carries commercial coverage for all other risk of loss and a separate flood policy for certain assets. There have been no significant reductions in insurance coverage in the prior year, and claims have not exceeded coverage in any of the past three fiscal years.
5.
Contingent Liabilities At June 30, 2012, the Board was a defendant to various lawsuits. In the opinion o f the Boards management and the Boards attorney, the ultimate effect of these legal matters will not have a material adverse effect on the Boards financial position.
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6.
Long-term Obligations a. Installment Purchase The Board is authorized to finance the purchase o f school buses under G.S. 115C-528(a). Session law 2003-284, section 7.25 authorized the State Board o f Education to allot monies for the payments on financing contracts entered into pursuant to G.S. 115C-528. The State has accepted the bid to purchase Thomas Built Buses through a special third party financing arrangement by Mercedes Benz Financial Services USA, LLC at total payments less than the purchase price. The future minimum payments of the installment purchases as of June 30,2012, including $7,529 of interest, are as follows: Governmental Activities Principal Interest $241,493 61,337 62.044 $364,874 $5,390 1,423 716 $7,529
Y ear Ending June 30, 2013 2014 2015
b.
Long-Term Obligation Activity The following is a summary of changes in the Boards long-term obligations for the fiscal year ended June 30,2012: Balance July 1.2011 Balance June 30,2012 $ 364,874 6.458.861 $6.823.735 $ 104.211 C urrent Portion $241,493 ______ : $241.493 $
Increases $246,699 9.751 $256.450 $ 11.139
Decreases $240,328 _______ = $240.328 $
Governmental Activities: Installment purchase Compensated absences Total Business-type Activities: Compensated absences
$ 358,503 6.449.110 $6.807.613 $ 93.072
Compensated absences for governmental activities are typically liquidated by the general and other governmental funds. C. Interfum l Balances and Activity Transfers to/from other funds at June 30,2012, consist of the following: From the other Special Revenue Fund to the General Fund to reflect surplus revenues for prior fiscal years in the originating funding source
$4.873.455
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D.
Fund Balance
The Board of Education has a revenue spending policy that provides policy for programs with multiple revenue sources. The Finance Officer will use resources in the following hierarchy: federal funds, State funds, local non-Board of Education funds, Board of Education funds. For purposes of fund balance classification expenditures are to be spent from restricted fund balance first, followed in-order by committed fund balance, assigned fund balance and lastly unassigned fund balance. The Finance Officer has the authority to deviate from this policy if it is in the best interest of the Board of Education. The following schedule provides management and citizens with information on the portion of General Fund and other Special Revenue Fund balance that is available for appropriation. Total fund balance - General Fund and Other Special Revenue Fund Less: Stabilization by State Statute Appropriated Fund Balance in 2012/2013 budget Remaining Fund Balance $ 12,442,097 352,088 4.514.460 $ 7.575.549
IV.
Summary Disclosure of Significant Contingencies Federal and State Assisted Programs

The Board has received proceeds from several federal and State grants. Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreements. Such audits could result in the refund of grant monies to the grantor agencies. Management believes that any required refunds will be immaterial. No provision has been made in the accompanying financial statements for the refund of grant moneys.
V.
Subsequent Events
Management has evaluated subsequent events through November 5, 2012, the date on which the financial statements were available to be issued. During the period from the end of the year and through this date, no circumstances occurred that require recognition or disclosure in these financial statements.
VI.
Charter Schools
Burke County Public Schools allocates funds to four public charter schools. Approximately 150 Burke County resident students attend these charter schools. Additionally, Burke County Public Schools allocates funds to Avery County Public Schools for approximately 55 Burke County resident students. This long standing arrangement is in place due to the remoteness and dangerous road conditions that exist in the extreme western end of the county. County Appropriation: Fines & Forfeitures: $842.72 $42.14
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INDIVIDUAL FUND SCHEDULES

Schedule 1 Page 1 of 3 General F und Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2012 ____________________
V ariance Positive (Negative)
Budget Revenues: Burke County: Appropriation from general revenue Charter school Total Burke County Other local sources: Tuition and fees, regular Fines and forfeitures Total other local sources Total revenues Expenditures: Instructional services:
Actual
$ 13,801,083 120,342 13,921,425
$ 13,801,083 120,342 13,921,425
$ -
495,233 495,233 14,416,658
28 428,790 428,818 14,350,243
28 (66,443) (66,415) (66,415)
Regular instructional:
Regular Total Special populations: Children with Disabilities Total Alternative programs: Alternative instruction Total 447,182 447,182 440,702 440,702 6,480 6,480
(2,166) (2,166)
(2,166) (2,166)
_
-
2,908 2,908
2,960 2,960
(52) (52) cont.
35

Schedule 1, cont. Page 2 of 3 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30,20X2 __________
V a ria n c e
Budget School leadership Co-curricular School-based support: Student accounting Guidance services/CTE Health services support Instructional technology services Staff development unallocated Total System-wide support services: Support and development: Regular curricular Total Special population support and development Alternative programs and services support and development Technology support Operational support: Communications Printing and copying Public utility and energy Custodial/housekeeping Facilities planning Maintenance services Total Financial and human resource: Financial Human resource Total $ 454,503 690,959 $
Actual 433,930 690,959 $
Positive fNeeative) 20,573 -
2,552 822 14,688 9,175 2,987 30,223
2,552 822 14,688 17,342 1,987 37,390
* (8,167) 1,000 (7,167)
50,268 50,268 474 500 18,947
53,748 53,748 474 18,759
(3,480) (3,480) 500 188
133,999 3,975 3,205,683 503,699 2,828 2,458,844 6,309,029
142,381 3,975 2,987,251 490,391 3,716 2,406,078 6,033,792
(8,382) 218,432 13,308 (888) 52,766 275,236
876,671 178,852 1,055,523
863,599 168,838 1,032,437
13,071 10,014 23,085 cont.
36

Schedule 1, cont. Page 3 of 3 General Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30,2012 ______________
Budget Accountability: Student testing System-wide pupil support: Educational media Total Policy, leadership and public relations: Board o f education Legal services Audit services Leadership services Public relations and marketing services Total Ancillary services: Community services Nutrition services Total Non-programmed charges: Payments to other governmental units Total Total expenditures Net change in fund balance O th er Financing Sources (Uses): Transfer from other funds Fund balance appropriated Excess o f revenues and other sources over (under) expenditures and other uses Fund balance, beginning Fund balance, ending
A ctual
V ariance Positive fNecative)
5,962
5,912
50
2,370 2,370
2,370 2,370
70,804 126,239 198,479 513,265 1,831 910,617
65,717 132,388 148,479 511,097 1,331 859,012
5,087 (6,149) 50,000 2,168 500 51,605
2,868 822 3,690
2,868 822 3,690
383,250 383,250 10,364,239 4,052,419
406,865 406,866 10,020,834 4,329,409
(23,616) (23,617) 343,405 276,990
(4,052,419)
4,873,455 -
4,873,455 4,052,419
9,202,864 140,437 _$_9J343i30^!
$ 9,202,864
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Schedule 2 Federal Grant Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual ____________ For the Year Ended June 30,2012
Budget Revenues: U.S. Government Total revenues Expenditures: Instructional programs Supporting services Nonprogram charges Total expenditures Excess of revenues and other sources over (under) expenditures and other uses Fund balance, beginning Fund balance, ending $ 13,379,450 988,975 2,881,806 17,250,231 $17,250,231 17,250,231
Actual
Variance Positive (Negative)
$ 12,703,833 12,703,833
$(4,546,399) (4,546,399)
11,880,720 718,588 104,525 12,703,833
1,498,730 270,387 2,777,281 4,546,399
$
.
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BURKE COUNTY PUBLIC SCHOOLS Schedule 3 Page 1 of 2

Capital Outlay Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - B udget and Actual F or the Y ear Ended June 30,2012 __________ _______
V a ria n c e P o sitiv e
Budget Revenues: State o f North Carolina: State appropriations - buses Sales and use tax revenue Total State o f North Carolina Burke County: Sales tax Total Burke County Other: Disposition, fixed assets Other Total other Total revenues Expenditures: Regular instructional System wide support Capital outlay: Category II Projects Total capital outlay
A ctual
(Negative)
$ 2,613,455 2,613,455
179,235 22,097 201,332
$ (2,434,220) 22,097 (2,412,123)
2,836,571 2,836,571
2,239,119 2,239,119
(597,452) (597,452)
5,450,026
44,701 10,550 55,251 2.495,702
44,701 10,550 55,251 (2,954,324)
814,739 7,708,508
465,690 2,590,865
349,049 5,117,642
520,497 520,497
7,093 7,093
513,404 513,404
cont.
39
Schedule 3, cont. Page 2 of 2
Capital Outlay Fund Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual For the Year Ended June 30,2012
Budget Debt service: Principal Interest Total debt service Total expenditures Revenues over (under) expenditures O ther Financing Sources (Uses): Installment purchase obligation issued Fund balance appropriated Total other financing sources (uses) Excess o f revenues and other sources over (under) expenditures and other uses Fund balance, beginning Fund balance, ending $
Actual
V ariance Positive (Negative)
$ 9,043,744 (3,593,717)
240,328 6,556 246,884 3,310,533 (814,831)
(240,328) (6,556) (246,884) 5,733,211 2,778,887
3,593,717 3,593,717
246,884 246,884
246,884 (3,593,717) (3,346,833)
(567,947) 1,635,935 1,067,989
(567,947)
40

Schedule 4 Child N utrition Fund Schedule of Revenues and Expenditures Budget and A ctual (Non-GAAP) F or the Year Ended June 30,2012
Budget O perating Revenues: Food sales Miscellaneous Total operating revenues O perating Expenditures: Food costs: Purchase of food Donated commodities Salaries and benefits Materials and supplies Repairs and maintenance Contracted services Capital outlay Indirect cost Travel Advertising Other Total operating expenditures Operating income (loss) N onoperating Revenues: Federal reimbursements Federal commodities State grants - regular Interest earned on investments Fund balance appropriated Total nonoperating revenues Net income (loss) Reconciliation of M odified A ccrual to Full A ccrual Basis: Net income (loss) (modified) Capital outlay Depreciation $ $ 2,216,550 81,000 2.297,550
A ctual $ 2,007,255 101.923 2,109,178
Variance Positive (Negative) $(209,295) 20.923 (188,372)
3,251,500 424,732 3,165,500 237,600 70,000 55,550 100,500 500,000 28,000 400 3,500 7.837.282 (5,539,732)
2,966,301 463,152 2,934,431 194,744 59,155 128,318 77,062

-
25,176 238 1,099 6.849.677 (4.740,499)
285,199 (38,420) 231,069 42,856 10,845 (72,768) 23,438 500,000 2,824 162 2.401 987,605 799,233
4,222,500 424,732 1,400 891,100 5,539,732 $
4,282,955 398,426 13,828 892 4,696,101 (44.398)
60,455 (26,306) 13,828 (508) (891,100) (843,631) $ (44.398)
(44,398) 62,363 (100,487) $ f82.523)
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(T H IS P A G E L E F T B LA N K IN T E N T IO N A L L Y )
C O M P L IA N C E S E C T IO N
I
I
Lowdermilk Church & Co., L.L.P. Certified Public Accountants_________________________________________________________________

Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards
To the Board of Education Burke County Public Schools Morganton, North Carolina We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Burke County Public Schools, North Carolina, as of and for the year ended June 30, 2012, which collectively comprise the Burke County Public Schools, North Carolinas basic financial statements and have issued our report thereon dated November 5, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States o f America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal Control Over Financial Reporting Management of Burke County Public Schools, North Carolina is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Burke County Public Schools, North Carolinas internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Burke County Public Schools, North Carolinas internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness o f the Burke County Public Schools, North Carolinas internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned funotions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination o f deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entitys financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we identified certain deficiencies in internal control over financial reporting, described in the accompanying schedule of findings and responses that we consider to be significant deficiencies in internal control over financial reporting. 2012-1. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
42
Compliance and Other Matters As part of obtaining reasonable assurance about whether Burke County Public Schools, North Carolinas financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination o f financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results o f our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of Burke County Public Schools, North Carolina, in a separate letter dated November 5,2012. Burke County Public Schools, North Carolinas response to the findings identified in our audit is described in the accompanying schedule of findings and responses. We did not audit Burke County Public Schools, North Carolina's response and, accordingly, we express no opinion on it. This report is intended solely for the information and use of management, members of the Board of Education, others within the entity, and federal and State awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
November 5, 2012
43
Lowdermilk Church & Co., L.L.P.

Certified Public Accountants______
Independent Auditors Report On Compliance With Requirements That Could Have A Direct And Material Effect On Each M ajor Federal Program And On Internal Control Over Compliance In Accordance With OMB Circular A-133 And The State Single Audit Implementation Act
To the Board of Education Burke County Public Schools Morganton, North Carolina
Compliance We have audited Burke County Public Schools, North Carolinas compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each o f Burke County Public Schools, North Carolinas major federal programs for the year ended June 30, 2012. Burke County Public Schools, North Carolinas major federal programs are identified in the summary of auditors results section of the accompanying schedule of findings and responses. Compliance with the requirements o f laws, regulations, contracts, and grants applicable to each o f its major federal programs is the responsibility o f Burke County Public Schools, North Carolinas management. Our responsibility is to express an opinion on Burke County Public Schools, North Carolinas compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States o f America; the standards applicable to financial audits contained in Government Auditing Standards. issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States. Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types o f compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Burke County Public Schools, North Carolinas compliance with those requirements and performing such other procedures as we considered necessaiy in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Burke County Public Schools, North Carolinas compliance with those requirements. In our opinion, Burke County Public Schools, North Carolina, complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each o f its major federal programs for the year ended June 30,2012.
44
Internal Control over Compliance Management of Burke County Public Schools, North Carolina, is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered Burke County Public Schools, North Carolinas internal control over compliance with the requirements that could have a direct and material effect on a major federal program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose o f expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Burke County Public Schools, North Carolinas internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement o f a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management^ members of the Board of Education, others within the entity, federal awarding agencies, and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
November 5,2012
45
Lowdermilk Church & Co., L.L.P.

Certified Public Accountants_______
Report On Compliance With Requirements Applicable to Each M ajor State Program And Internal Control Over Compliance In Accordance With Applicable Sections Of OMB Circular A-133 And The State Single Audit Implementation Act
To the Board of Education Burke County Public Schools Morganton, North Carolina
Compliance We have audited Burke County Public Schools, North Carolinas compliance with the types of compliance requirements described in the Audit Manual for Governmental Auditors in Noith Carolina, issued by the Local Governmental Commission, that could have a direct and material effect on each of its major State programs for the year ended June 30,2012. The Burke County Public Schools, North Carolinas major State programs are identified in the summary of auditors results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major State programs is the responsibility of the Burke County Public Schools, North Carolinas management. Our responsibility is to express an opinion on the Burke County Public Schools compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and applicable sections o f OMB Circular A-133, as described in the Audit Manual for Governmental Auditors in North Carolina, and the State Single Audit Implementation Act. Those standards, applicable sections of OMB Circular A-133, and the State Single Audit Implementation Act require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major State program occurred. An audit includes examining, on a test basis, evidence about the Burke County Public Schools, North Carolinas compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the Burke County Public Schools, North Carolinas compliance with those requirements. In our opinion, the Burke County Public Schools, North Carolina complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major State programs for the year ended June 30, 2012.
46
Internal Control Over Compliance Management of the Burke County Public Schools, North Carolina is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts and grants applicable to State programs. In planning and performing our audit, we considered the Burke County Public Schools, North Carolinas internal control over compliance with the requirements that could have a direct and material effect on a major State program to determine the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance with applicable sections of OMB Circular A-133 and the State Single Audit Implementation Act, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Boards internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a State program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a State program will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, others within the organization, members of the Board of Education, and federal and State awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
November 5, 2012
47

Schedule of Findings and Responses For the Year Ended June 30, 2012
Section I. Sum m ary of A uditors Results
Financial Statements Type of auditors report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? Significant deficiency(ies) identified that are not considered to be material weaknesses _yes X__yes X__ no ____ none reported
Noncompliance material to financial statements noted Federal Awards Internal control over major federal programs: Material weakness(es) identified: Significant deficiency(ies) identified that are not considered to be material weaknesses
yes
X__ no
ryes _yes _yes
_X__ no X__ none reported X no
Noncompliance material to federal awards
Type of auditors report issued on compliance for major federal programs: Unqualified. Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular A-133 Identification of major federal programs: CFDA Numbers 10.553, 10.555 84.410 84.184L Dollar threshold used to distinguish between Type A and Type B programs Auditee qualified as low-risk auditee? Names of Federal Program or Cluster Child Nutrition Cluster Education Jobs Program Safe Schools Healthy Students Initiative
_yes
no
$578,025 X yes _____ no
48

Schedule of Findings and Responses ______________________________ For the Year Ended June 30,2012__________________________
State Awards Internal control over major State programs: * Material weakness(es) identified: Significant deficiency(s) identified that are not considered to be material weaknesses ______yes ______yes X X no none reported
Type of auditors report issued on compliance for major State programs: Unqualified. Any audit findings disclosed that are required to be reported in accordance with the State Single Audit Implementation Act Identification of major State programs: Name of State Program State Public School Fund
_____ yes
no
Section II. Finding:
Financial Statement Findings 2012-1
Significant Deficiency Criteria: General Statute 115(c)-441 states that no obligation may be incurred by a local school administrative unit unless the budget resolution includes an appropriation authorizing the obligation and an unencumbered balance remains in the appropriation sufficient to pay in the current fiscal year the sums obligated by the transaction for the current fiscal year. Expenditures were approved for payment in excess of the budget. However, the total expenditures for each fund did not exceed budget, only on a functional basis. Burke County Public Schools was in violation of a statute which could result in over spending the current year budget. This was a result o f entries to accrue payables after June 30,2012 and can be corrected with a retroactive budget amendment.
Condition:
Effect: Cause: Views of responsible officials and planned corrective actions:
Burke County Public Schools agrees with this finding.
49

Schedule of Findings and Responses ________________________________ F or the Y ear Ended Jnne 30,2012
Section HI. None.
Federal Award Findings and Questioned Costs
Section IV. None.
State Award Findings and Questioned Costs
50

Corrective Action Plan ________________________________ F or the Y ear Ended June 30,2012____________
Section II. Financial Statem ent Findings Finding: A. B. C. 2012-1 Name o f contact person: Keith Lawson, Chief Finance Director
Corrective Action: Will correct with a retroactive budget amendment. Proposed Completion Date: Immediately.
Section III. None.
Federal A ward Findings and Questioned Costs
Section IV. None.
State Award Findings and Questioned Costs
51

Summary Schedule of Prior Year Audit Findings ______ For the Year Ended June 30,2012______
Finding: Status:
2011-1 Not corrected, there are still some function levels that exceeded the amended budget, see finding
2012 - 1.
52
BURKE COUNTY PUBLIC SCHOOLS Page 1 of 4

Schedule of Expenditures of Federal and State Awards _________For the Year Ended June 30,2012_______________________________
Grantor/Pass-Througli G rantor/Program Title Federal Grants: Cash Program: U.S. Department o f Agriculture: Food and Nutrition Service Passed-through the N.C. Department of Health and Human Services: Child Nutrition Discretionary Grant Child/Adult Food Grant Passed-thvough the N.C. Department of Public Instruction: Child Nutrition Cluster: Cash Assistance: School Breakfast Program National School Lunch Program Cash Assistance subtotal Non-Cash Assistance (commodities): School Breakfast Program National School Lunch Program Non-Cash Assistance subtotal Total Child Nutrition Cluster Total U.S. Department of Agriculture U.S. Department of Education: Office of Elementary and Secondary Education Safe Schools Healthy Students Intitiative Pass-through the N.C. Department o f Public Instruction: Grants to Local Education Agencies Basic and Concentration, Title I ARRA - Title I Part A
Federal CFDA Number
State/ Pass-through G rantors Number
Expenditures
10.579 10.558
XXXX XXXX
$ 116,857 31,934
10.553 10.555
XXXX XXXX
842,191 3.440.764 4.282.955 79,685 318.741 398.426 4.681.381 4.830.172
10.553 10.555
XXXX XXXX
84.184L
XXXX
1,216,825
84.010 84.389
PRC 050 PRC 141
3,176,405 45,135 cont.
53

Schedule of Expenditures of Federal and State Awards For the Year Ended June 30,2012_________
Grantor/Pass-Through Grantor/Program Title
Federal CFDA Number
State/ Pass-through
G rantors Number Expenditures
Safe and Drug Free Schools and Communities, Title IV, Part A Teacher Quality Enhancement Even Start - Title I of IASA Vocational Education Tech Prep Education ARRA - State Fund Stabilization Fund Education State Grants ARRA - Race to the Top State Energy Block Giant ARRA Office o f English Language Acquisition: Passed-through the NC Department o f Public Instruction: Comprehensive School Reform Office of Special Education and Rehabilitative Services: Passed-through the NC Department o f Public Instruction: Special Education Cluster: Individuals with Disabilities Education Act Title VI PartB Special Education State Improvement Grant Education o f the Handicapped Capital Building and Improvement Preschool Handicapped Special Needs Targeted Assistance Preschool Targeted Assistance School Improvement Grant ARRA ARRA - IDEA, Part B Section 611 ARRA - IDEA, Part B Section 619 Total Special Education Cluster Passed-through the N.C. Department o f Public Instruction: Carl D. Perkins Vocational and Applied Technology Education Act Amendments o f 1990 Basic Grants to States Program Development Education Jobs Program
84.186 84.367 84.276 84.243 84.394 84.395A 84.364
PRC 048, 058 PRC 103 PRC 065 PRC 023 PRC 140 PRC 156 PRC 339
726 496,773 23,432 919 1,406,118 518,705 181,124
84.365
PRC 104, 111
85,430
84.027 84.027 84.027 84.173 84.173 84.027 84.173 84.388 84.391 84.392
PRC 114 PRC 082 PRC 060 PRC 044 PRC 049 PRC 118 PRC 119 PRC 143 PRC 144 PRC 145
410,351 17,186 2,942,162 11,094 93,034 14,754 720 363,701 529,693 44,943 4.427.638
84.048 84.410
PRC 017 PRC 155
171,734 2,122,373 cont.
54

Schedule of Expenditures of Federal and State Awards _________For the Year Ended June 30,2012_______________________________
Grantor/Pass-Through Grantor/Program Title

Office of the Deputy Superintendent: Educational Technology Office of Post Secondary Education: Passed-through Appalachian State University: AMP Gear Up Total U.S. Department of Education U.S. Department of Health and Human Services Health Resources and Services Administration Passed-through the N.C. Department of Health and Human Services: Division on Social Services: Family Support U.S. Department of Labor: Passed-through the Governors Office: Workforce Investment Act WIA Total federal assistance
Federal CFDA Number

84.318X
State/ Pass-through G rantors Number

PRC 107, 108
Expenditures
$ 258,689
84.363 84.334
XXXX XXXX
18,670 76.002 14.226.698
93.556
XXXX
84.270
17.225
XXXX
126.350 19.267.490
State Grants: N.C. Department of Public Instruction: State Public School Fund Driver Training - SPSF Vocational Education State Months of Employment Program Support Funds More at Four Pre-Kindergarten Program
XXXX PRC 012 PRC 013 PRC 014 XXXX
62,541,023 237,324 3,562,652 191,310 1.262.676
Total N.C. Department of Public Instruction
67.794,985 cont.
BURKE COUNTY PUBLIC SCHOOLS Page 4 of 4, cont.

Schedule of Expenditures of Federal and State Awards ________________________________ F or the Y ear Ended June 30,2012______________ _________________
G rantor/Pass-Through G rantor/Program Title N.C. Department o f Health and Human Services: Kids Eat Smart Move More Division of Child Development: Passed-through Burke Partnership for Children: Smart Start - Other Smart Start - Mobile Classroom Family Literacy Total N.C. Department of Health and Human Services Child Care Connections of Burke County Pre K Bonus N.C. Department o f Cultural Resources: NC Arts Council: Arts Council Grant N.C. Department o f Public Instruction: School Buses Appropriation Textbooks - Noncash Total State assistance Total federal and State assistance
Federal CFDA N um ber
State/ Pass-througli G ran to rs N um ber Expenditures
XXXX
3,500
5509 3318 5512
95,619 177,192 __ 6,347 282.658
11-12-308
2.830
XXXX
10,000
XXXX XXXX
179,235 100.000 68.359.708 $87.627.198
Notes to the Schedule of Expenditures o f Federal and State Awards: Basis of Presentation The accompanying schedule o f expenditures of federal and State awards includes the federal and State grant activity of Burke County Public Schools and is presented on the modified accrual basis o f accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits and States. Local Governments, and Non-Profit Organizations and the State Single Audit Implementation Act. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements.
56

BCPS Audit Report Period Ending June 30, 2012

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By LGC at 10:37 am, Dec 07, 2012

BURKE COUNTY PUBLIC SCHOOLS MORGANTON, NORTH CAROLINA

Lowdermilk Church & Co., L.

B U R K E C O U N T Y P U B L IC S C H O O L S F o r tlie Y ear Ended June 30,2012

BURKE COUNTY PUBLIC SCHOOLS

BURKE COUNTY PUBLIC SCHOOLS ______Table of Contents (continued)______

46-47 48-50 51 52 53-56

Independent Auditors Report

M A N A G E M E N T S D ISC U S S IO N AND A N A LY SIS

Management's Discussion and Analysis

Overview of the Financial Statements

$123,121,771 4,0 7 8 ,0 0 2 836.595 $ 1 28,036,368

$120,553,295 3,252,972 6.458.865 $ 1 30,265,132

$123,774,156 4,078,002 1.708.710 $129,560,868

Total Governm ent

Requests for Information

BURKE COUNTY PUBLIC SCHOOLS

See accompanying notes to financial statements.

BURKE COUNTY PUBLIC SCHOOLS

402,466 300,699 703.165

6.887.802 6.887.802 $ 114.887.350 $

2.109.178 2.109.178 2.812,343 $

4.695.209 4.695.209 93.890023 $

(83.415) (83.415) (83.415)

(83.415) (83.415s ) (18.108.542) cont

BURKE COUNTY PUBLIC SCHOOLS

See accompanying notes to financial statements.

BURKE COUNTY PUBLIC SCHOOLS

120,303,909 ____ (6,8 2 3 ,7 3 5 ) $ 128.823.155

See accompanying notes to financial statements.

BURKE COUNTY PUBLIC SCHOOLS

BURKE COUNTY PUBLIC SCHOOLS

T otal Individual Schools F ederal G ra n t $ G overnm ental F unds

State Public School

C apital O utlay $ (814,831) $

(123,339) 1,952,475 $ 1,829,136 $

C hanges in n e t assets o f governm ental activities.

See accompanying notes to financial statements.

BURKE COUNTY PUBLIC SCHOOLS

Final $ 13,921,425 495,233 14.416,658

2,768,648 2,538 2,651 1,510,309 569,872 293,280 3,000 855

440,702 (2,166) 2,961 433,930 690,959 37,390 53,748 474

18,759 6,033,792 1,032,437 5,912 2,370 859,012 3,690 406,865 10.020,834

4,329,409 4,873,455 '

276.990 4,873,455 4,052,419

9,202,864 ______140,437 _$__9j343^301_

See accompanying notes tofinancial statements.

Original $ 1,581,132 2,097,171 2.086.273 5.764.576 $

Original $ 68,205,650 68,205.650

Final $ 68,300,628 * 68.300.628

Actual Amounts $ 67,312,465 67,312,465

58,340 (10,777) 87,967

3,333 58,593 66,410 (48,679)

46,491 560,536 2.262.533 9.968.470

25,867 2,163,347 1.556,181 8.218.674

25,867 1,547,618 223.618 6,055,194 615,729 1,332.562 2.163.479

241,551 125,682 68.205.650

251,553 129,547 68,300,628

251,553 129,547 (1,486) 67,312,465

189,803 (4,873,455) 451.348

(4,232,304) 7,331,101 $ 3,098,796

BURKE COUNTY PUBLIC SCHOOLS

Final $ 17,250.231 17,250.231 $

BURKE COUNTY PUBLIC SCHOOLS Table of Contents (continued)