OSAGE COUNTY, OKLAHOMA JULY 1,2010TO JUNE 30,2011 · 2012. 3. 22. · Anderson School District No....

ANNUAL FINANCIAL REPORT

ANDERSON SCHOOL DISTRICT NO. C-52

OSAGE COUNTY, OKLAHOMA

JULY 1,2010 TO JUNE 30,2011

AUDITED BY

KERRY JOHN PATTEN, C.P.A.

ANDERSON SCHOOL DISTRICT NO. C-52OSAGE COUNTY, OKLAHOMASCHOOL DISTRICT OFFICIALS

JUNE 30, 2011

Board of Education

President

Vice-President

Clerk

Alternate Clerk

Michele Drummond

Wendy David

Matt Schumacher

Myron Wilson

Superintendent of Schools

Brent McKee

School District Treasurer

Joyce Hathcoat, County Treasurer

ANDERSON SCHOOL DISTRICT NO. C-52OSAGE COUNTY, OKLAHOMA

JUNE 30, 2011

TABLE OF CONTENTS

Page

Report of Independent Auditor 1

Combined Financial Statements

Combined Statement of Assets, Liabilities and Fund Balances-All Fund Types and Account Groups - Regulatory Basis 2

Combined Statement of Revenues Collected, Expenditures Paidand Changes in Fund Balances - All Governmental Fund TypesRegulatory Basis 3

Combined Statement of Revenues Collected, Expenditures Paidand Changes in Fund Balances - Budgetand Actual - Regulatory BasisGeneral Fund and Special Revenue Fund 4

Notes to the Financial Statements 5

Combining Financial Statements

Combining Statement of Assets, Liabilities and FundBalances - All Special Revenue Funds - Regulatory Basis 16

Combining Statement of Revenues Collected, Expenditures Paidand Changes in Fund Balances - All Special Revenue FundsRegulatory Basis 17

Combining Statement of Assets, Liabilitiesand FundBalances - Capital Project Funds - Regulatory Basis 18

Combining Statement of Revenues Collected, Expenditures Paidand Changes in Fund Balances - Capital Project Funds - Regulatory Basis 19

Combining Statement of Assets, Liabilities and Fund Balances-Fiduciary Funds - Regulatory Basis 20

Supporting Schedules

Budgetary Comparison Schedule - Regulatory BasisBuilding Fund 21

Budgetary Comparison Schedule - Regulatory BasisChild Nutrition Fund 22

Schedule of Expenditures of Federal Awards 23

School Activity Fund - Receipts, Transfers, Disbursementsand Sub-account Balances 26

Reports Required by Government Auditing Standards

Report on Internal Control over Financial Reporting and on Compliance and OtherMatters Based on an Audit of Financial Statements Performed in AccordanceWith Government Auditing Standards 27

Schedule of Findings and Questioned Costs 28

Summary of Prior Audit Findings 29

Schedule of Comments 30

Schedule of Accountant's Professional Liability Insurance Affidavit 32

KERRY JOHN PATTEN, C.PA

2101 N.Wfflow Ave.Broken Arrow, OK 74012Phone Number (918) 250-SS3SFAX Number (918) 250-9853

Independent Auditor's Report

The Honorable Board of EducationAnderson School District No. C-52Osage County, Oklahoma

I have audited the accompanying fund type and account group financial statements of the AndersonSchool District No. C-52, Osage County, Oklahoma, as listed in the table of contents, as combined financialstatements as of and for the year ended June 30, 2011. These financial statements are the responsibility of theAnderson School District's management. My responsibility is to express an opinion on these financialstatements based on my audit.

Iconducted my audit in accordance with auditing standards generally accepted in the United States of Americaand Government Auditing Standards, issued by the Comptroller General of the United States. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financialstatement presentation. I believethat my audit provides a reasonable basis for my opinion.

As discussed in Note 1 (C), these financial statements were prepared in conformity with the accounting andfinancial reporting regulations prescribed or permitted by the Oklahoma State Department of Education, which isa comprehensive basis of accounting other than accounting principles generally accepted in the United Statesof America.

In my opinion, the financial statements referred to above present fairly, in all material respects, the assets,liabilities, and equity arising from regulatory basis transactions of each fund type and account group ofAnderson School District No. C-52, Osage County, Oklahoma, as of June 30, 2011, and the revenuescollected and expenditures paid/expenses for the year then ended on the regulatory basis of accountingdescribed in Note 1.

In accordancewith Government Auditing Standards, I have also issued my report dated January 6, 2012, on myconsideration of the Anderson School District's internal control over financial reporting and my tests of itscompliance with certain provisions of laws, regulations, contracts and grant agreements and.other matters. Thepurpose of that report is to describe the scope of my testing of internal control over financial reporting andcompliance and the results of that testing, and not to provide an opinion on the internal control over financialreporting or on compliance. That report is an integral part of an audit performed in accordance withGovernment Auditing Standards and should be considered in assessing the results of my audit.

My audit was conducted for the purpose of forming an opinion on the combined financial statements ofAnderson School District No. C-52. The combining financial statements and supporting schedules arepresented for purposes of additional analysis and are not a required part of the combined financial statements.The combining financial statements and supporting schedules and the Schedule of Expenditures of FederalAwards have been subjected to the auditing procedures applied in the audit of the combined financialstatements and, in my opinion, are fairly stated in all material respects in relation to the combined financialstatements taken as a whole on the regulatory basis of accounting described in Note 1.

This report is intended solely for the information and use of the Board of Education of Anderson School DistrictNo. C-52, Osage County, Oklahoma, Oklahoma State Department of Education, and certain federal regulatoryagencies, and is not intended to be and should not be used by anyone other than these specified parties.

Kerry Jojfn Batten, C.P.A.January 6^2012

COMBINED FINANCIAL STATEMENTS


COMBINED STATEMENT OF ASSETS, LIABILITIES AND FUND BALANCESALL FUND TYPES AND ACCOUNT GROUPS - REGULATORY BASIS

JUNE 30, 2011

Governmental Fund Types

General Special Revenue Debt Service

ASSETS

Cash

Investments

Amounts available in debt service fund

Amounts to be provided for retirement

of general long-term debt

Total assets

LIABILITIES

Liabilities:

Outstanding warrants

Encumbrances

Long-term debt:

Bonds payable

Interest payable

Total liabilities

Fund balances:

Designated for capital projects

Designated for debt service

Cash fund balances

Total fund balances

Total liabilities and fund balances

312,343.53

1,134,900.00

$ 1,447,243.53

284,375.09 $

47,588.97

80,950.00

128,538.97 $

30,290.76 $

40,432.53

$ 284,375.09 $ 70,723.29 $

$ - $

1,162,868.44 57,815.68

1,591.48

175,000.00

176,591.48

176,591.48

$ 1,162,868.44 $ 57,815.68 $ 176,591.48

$ 1,447,243.53 $ 128,538.97 $ 176,591.48

The notes to the financial statements are an integral part of this statement.2

Governmental

Fund Types

$

$

Fiduciary FundTypes

$

$

Account Groups

$

$

Total

(MemorandumOnly)

Capital ProjectsTrust and

AgencyGeneral

Long-term Debt June 30, 2011

98.58

4,500.00

58,339.81

176,591.48

1,088,408.52

1,265,000.00

419,962.37

1,395,350.00

176,591.48

1,088,408.52

4,598.58 58,339.81 3,080,312.37

218.98 $

1,265,000.00

30,290.76

40,432.53

1,265,000.00

218.98 $ 1,265,000.00 $ 70,723.29

4,598.58 $

58,120.83

4,598.58 $ 58,120.83 $

$ 4,598.58

176,591.48

1,278,804.95

$ 1,459,995.01

4,598.58 $ 58,339.81 $ 1,265,000.00 $ 3,080,312.37

ANDERSON SCHOOL DISTRICT C-52

COMBINED STATEMENT OF REVENUES COLLECTED, EXPENDITURES PAID AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES - REGULATORY BASIS

FOR THE YEAR ENDED JUNE 30, 2011

Revenues collected:

Local sources

Intermediate sources

State sources

Federal sources

Total revenues collected

Expenditures paid:

Instruction

Support services

Non-instructional services

Capital outlay

Other outlays

Repayments

Debt service:

Principal retirement

Interest

Total expenditures paid

Excess of revenues collected over (under)

expenses paid before adjustments to

prior year encumbrances

Adjustments to prior year encumbrances

Other financing sources (uses):

Bond sale proceeds

Operating transfers in/(out)

Bank charges

Total other financing sources (uses)

Excess (deficiency) of revenue collectedover expenditures paid and other

financing sources (uses)

Fund balances, beginning of year

Fund balances, end of year

Governmental Fund Types

General

$

Special Revenue Debt Service

$ 618,715.86 115,829.10 $ 212,708.87

51,741.85 - -

966,349.05 2,519.32 2.03

150,912.45 113,953.43 392.12

$ 1,787,719.21 $

$ 1,152,739.65 $

472,233.61

21,632.73

715.00

$ 1,647,320.99 $

$ 140,398.22 $

$$

$ $

$ 140,398.22 $

$ 1,022,470.22 $

$ 1,162,868.44 $

232,301.85 $ 213,103.02

281,990.71

5,686.68

287,677.39 $

(55,375.54) $

0.33 $

(55,375.21) $

110,000.00

38,805.00

148,805.00

64,298.02

64,298.02

113,190.89 $ 112,293.46

57,815.68 $ 176,591.48

The notes to the financial statements are an integral part of this statement.3

Total

Governmental (MemorandumFund Types

$

Only)

Capital Projects June 30, 2011

237.90 947,491.73

- 51,741.85

- 968,870.40

-

$

265,258.00

237.90 2,233,361.98

- $ 1,152,739.65

- 754,224.32

- 21,632.73

375,000.00 380,686.68

715.00

110,000.00

38,805.00

$ 375,000.00 $ 2,458,803.38

$ (374,762.10) $ (225,441.40)

$ - $ 0.33

$ - $

$ $ -

$ (374,762.10) $ (225,441.07)

$ 379,360.68 $ 1,627,315.25

$ 4,598.58 $ 1,401,874.18


COMBINED STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

BUDGETED GOVERNMENTAL FUND TYPES - REGULATORY BASIS


General Fund

Revenues collected:

Local sources


State sources

Federal sources


Expenditures paid:

Instruction

Support services


Capital outlay

Other outlays

Repayments



expenses paid before adjustments to prioryear encumbrances



Operating transfers in/out

Bank Charges


Excess (deficiency) of revenue collectedover expenditures paid and other

financing sources (uses)

Cash fund balance beginning of year

Cash fund balance end of year

Original Budget

556,657.47

41,059.57

954,663.92

64,884.00

Final Budget

556,657.47

41,059.57

954,663.92

64,884.00

Actual

618,715.86

51,741.85

966,349.05

150,912.45

$ 1,617,264.96 $ 1,617,264.96 $ 1,787,719.21

$ 2,145,153.84 $ 2,145,153.84 $ 1,152,739.65

472,233.61 472,233.61 472,233.61

21,632.73 21,632.73 21,632.73

715.00 715.00 715.00

$ 2,639,735.18 $ 2,639,735.18 $ 1,647,320.99

$ (1,022,470.22) $ (1,022,470.22) $ 140,398.22

$ (1,022,470.22) $ (1,022,470.22) $ 140,398.22

$ 1,022,470.22 $ 1,022,470.22 $ 1,022,470.22

$ $ $ 1,162,868.44

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

Special Revenue Fund

Original Budget Final Budget Actual

$ 105,286.00 $ 105,286.00 $ 115,829.10

2,071.36 2,071.36 2,519.32

115,373.59 115,373.59 113,953.43

222,730.95 $ 222,730.95 $ 232,301.85

. $ — $ _

154,440.74 154,440.74 142,875.40

181,481.10 181,481.10 139,115.31

- -

5,686.68

335,921.84 $ 335,921.84 $ 287,677.39

$ (113,190.89) $ (113,190.89) $ (55,375.54)

0.33

$ (113,190.89) $ (113,190.89) $ (55,375.21)

$ 113,190.89 $ 113,190.89 $ 113,190.89

$ $ - $ 57,815.68


NOTES TO THE FINANCIAL STATEMENTS - REGULATORY BASISFOR THE YEAR ENDED JUNE 30, 2011

1. Summary of Significant Accounting Policies

The accompanying financial statements of the Anderson School District No. C-52 (the "District") conform tothe regulatory basis of accounting, which isan other comprehensive basis of accounting prescribed bytheOklahoma State Department of Education and conforms to the system of accounting authorized by theState of Oklahoma. Accordingly, the accompanying financial statements are not intended to presentfinancial position and results of operations in conformity with accounting principles generally accepted inthe United States of America. The District's accounting policies are described in the following notes thatare an integral part of the District's financial statements.

A. Reporting Entity

The District is a corporate body for public purposes created under Title 70 of the Oklahoma Statutes and,accordingly, is a separate entity for operating and financial reporting purposes. The District is part of thepublic school system of Oklahoma under the general direction and control of the State Board of Educationand is financially dependent on the State of Oklahoma. The general operating authority for the publicschool system is the Oklahoma School Code contained in Title 70, Oklahoma Statutes.

The governing body of the District is the Board of Education composed of elected members. Theappointed superintendent is the executive officer of the District.

In evaluating how to define the District, for financial reporting purposes, management has considered allpotential component units. The decision to include a potential component unit in the reporting entity wasmade by applying the criteria established by the Governmental Accounting Standards Board (GASB). Thebasic- but not the only- criterion for including a potential component unitwithin the reporting entity is thegoverning body's ability to exercise oversight responsibility. The most significant manifestation of thisability is financial interdependency. Other manifestations of the ability to exercise oversight responsibilityinclude, but are not limited to, the selection of governing authority, the designation of management, theability to significantly influence operations, and accountability for fiscal matters. A second criterion used inevaluating potential component units is the scope of public service. Application of this criterion involvesconsidering whether the activity benefits the District and/or its citizens, or whether the activity is conductedwithin the geographic boundaries of the District and is generally available to its patrons. A third criterionused to evaluate potential component units for inclusion or exclusion from the reporting entity is theexistence of special financing relationships, regardless of whether the District is able to exercise oversightresponsibilities. Based upon the application of these criteria, there are no potential component unitsincluded in the District's reporting entity. These statements present only the activities of the District.

B. Measurement Focus

The District uses funds and account groups to report on its financial position and the results of itsoperations. Fund accounting is designed to demonstrate legal compliance and to aid financialmanagement by segregating transactions related to certain district functions or activities.

A fund is an independent accounting entitywith a self-balancing set of accounts. The account groups arefinancial reporting devices designed to provide accountability for certain assets and liabilities that are notrecorded directly in the funds.

Funds are classified intothree categories: governmental, proprietary and fiduciary. Each category, in turn,is divided into separate "fund types." The District has the following fund types and account groups:

Governmental Funds

Governmental funds are used to account for all or most of a government's general activities, including thecollection and disbursement of earmarked monies (special revenue funds), the acquisition or constructionof general fixed assets (capital project funds), and the servicing of general long-term debt (debt servicefunds). Basis of accounting relates to the timing of the measurements made, regardless of themeasurement focus applied. All governmental type funds are accounted for using the Regulatory(Statutory) basis of accounting. All revenues from all sources, including property taxes, entitlements,grants, and shared revenues are recognized when they are received, rather than earned. Expendituresare generally recognized when encumbered or reserved, rather than at the time the related liability isincurred. Unmatured interest for debt service is recognized when due and certain compensatedabsences and claims and judgments are recognized when the obligations are expected to be liquidated



Summary of Significant Accounting Policies (continued)

with expendable, available financial resources. Fiduciary type funds are accounted for using the cashbasis of accounting. These practices differ from generally accepted accounting principles.

General Fund - The general fund is used to account for all financial transactions except those required tobe accounted for in another fund. Major revenue sources include local property taxes and federal andstate funding. Expenditures include all costs associated with the daily operations of the schools, except forprograms funded for building repairs and maintenance, school construction and debt service on bonds andother long-term debt. The general fund includes federal and state restricted monies that must beexpended for specific programs.

Special Revenue Fund - The special revenue funds are used for proceeds of specificrevenue sources thatare legally restricted to expenditures for specified purposes.

Building Fund - The building fund consists mainly of moniesderived from property taxes levied for thepurpose of erecting, remodeling, repairing or maintaining school buildings and for purchasingfurniture, equipment and computer software to be used on or for technology center property, forpaying energy and utility costs, for purchasing telecommunications services, for paying fire andcasualty insurance premiums for center facilities, for purchasing security systems, and for payingsalaries of security personnel.

Child Nutrition Fund - The child nutrition fund consists of revenues from local collections, state, andfederal sources used to benefit the food service program.

Debt Service Fund - The debt service fund is the District's sinking fund and is used to account for theaccumulation of financial resources for the payment of general long-term debt principal and interest. Theprimary revenue sources are local property taxes levied specifically for debt service and interest earningsfrom temporary investments.

Capital Projects Fund - The capital projects fund is the District's bond fund and is used to account for theproceeds of bond sales to be used exclusively for acquiring school sites, constructing and equipping newschool facilities, renovating existing facilities, and acquiring transportation equipment.

Fiduciary Funds

Fiduciary funds are used to account for assets held on behalf of outside parties, including othergovernments or on behalf of other funds within the District. When these assets are held under the terms ofa trust agreement, trust funds are used for their accounting and reporting. Agency funds generally areused to account for assets that the District holds on behalf of others as their agent and do not involvemeasurement of results of operations.

Agency Fund - The agency fund is the school activities fund, which is used to account for monies,collected principally through fundraising efforts of the students and District-sponsored groups. Theadministration is responsible, under the authority of the Board, for collecting, disbursing, andaccounting for these activity funds.

Account Groups

Account groups are not funds and consist of a self-balancing set of accounts used only to establishaccounting controlover long-term debt and general fixed assets.

General Long-Term Debt Account Group - This account group was established to account for alllong-term debt of the District, which is offset by the amount available in the debt service fund and theamount to be provided in future years to complete retirement of the debt principal. It is also used toaccount for liabilities for compensated absences and early retirement incentives, which areto be paidfrom funds provided in future years.

General Fixed AssetAccount Group - This account group is used to account for property, plant, andequipment of the school district. The District does not have the information necessary to include thisgroup in its combined financial statements.




C Basis of Accounting and Presentation

The District prepares its financial statements in a presentation format that is prescribed by the OklahomaState Department of Education. This format is essentially the generally accepted form of presentationused bystate and localgovernments prior to the effective date of GASB Statement No. 34, BasicFinancialStatements-Management's Discussion and Analysis-for State and Local Governments. This formatsignificantly differs from that required by GASB 34.

The basic financial statements are essentially prepared on a basis of cash receipts and disbursementsmodified as required by the regulations of the Oklahoma State Department of Education (OSDE) asfollows:

• Encumbrances represented by purchase orders, contracts, and other commitments forthe expenditure of monies and are recordedas expenditures when approved.

• Investments are recorded as assets when purchased.• Warrants payable are recorded as liabilities when issued.• Long-term debt is recorded when incurred.• Compensated absences are recorded as an expenditure and liability when the obligation is

paid.• Inventories of supplies are recorded as expenditures rather than assets.• A General Fixed Asset Account Group is not required by the State Department of Education's

regulatory basis of accounting.

This regulatory basis of accounting differs from accounting principles generally accepted in the UnitedStates ofAmerica, which require revenues to be recognized when they become available and measurable,or when they are earned, and expenditures or expenses to be recognized when the related liabilities areincurred for governmental fund types; and, when revenues are earned and liabilities are incurred forproprietary fund types and trust funds.

D. Budgets and Budgetary Accounting

Prior to July 1 each year, the governing board ofthe school district prepares a verified application showingthe needs of the school district and submits the application to the County Excise Board, who makestemporary appropriations for lawful current expenses of the school district. The temporary appropriationsare merged with the annual appropriations when the annual budget for the school district is finallyapproved.

Prior to October1 each year, the school Board of Education must make a financial statement, showing thetrue fiscal condition of the school as of the close of the previous fiscal year ended June 30, along with anitemized statement of estimated needs and probable income from allsources for the fiscal year.

A budget is legally adopted by the Board of Education for the general fund and special revenue fund(s) ofthe school district.

Encumbrances represent commitments to unperformed contracts for goods or services. Encumbranceaccounting - under which purchase orders and other commitments of resources are recorded asexpenditures of the applicable fund - is utilized in all governmental funds of the District. Under OklahomaLaw, unencumbered appropriations lapse at the end of the year.

E. Assets. Liabilities and Fund Eouitv

Memorandum Only - Total Column

Thetotal column on the general purpose financial statements is captioned "memorandum only" to indicatethat it is presented only to facilitate financial analysis. Data in this column does not present financialposition, results of operations or cash flows in conformity with generally accepted accounting principles.Neither is such data comparable to a consolidation. Interfund eliminations have not been made on theaggregation of this data.

Cash - Cash consists ofcash on hand, demand deposit accounts, and interest bearing checking accounts.




Investments - State statutes govern the District's investment policy. Permissible investments includedirect obligations of the United States Government and Agencies; certificates of deposit of savings andloan associations, and bank and trust companies; and savings accounts or savings certificates of savingsand loan associations, and trust companies. Collateral is required for demand deposits and certificatesofdeposit for all amounts not covered by federal deposit insurance. Investments are stated at cost.

Inventories - Inventories consist of minimal amounts of expendable supplies held for consumption. Thevalue of consumable inventories at year-end is not material to the District's financial statements. The costsof inventories are recorded as expenditures when encumbered and purchased, rather than whenconsumed.

Compensated Absences - Vested or accumulated vacation leave that is expected to be liquidated withexpendable, available financial resources is reported as expenditure and a fund liability of thegovernmental fund that will pay it. There are no amounts of vested or accumulated vacation leave that arenot expected to be liquidated with expendable, available financial resources. Vested or accumulatedvacation leave of proprietary funds is recorded as an expense and liability of those funds as the benefitsaccrue to employees.

No liability is recorded for non-vesting accumulating rights to receive such pay benefits. Vestedaccumulated rights to receive sick pay benefits have been reported in the general long-term debt accountgroup since none of the vested sick leave is expected to be liquidated with expendable, available financialresources.

Fixed Assets - The District has not maintained a record of its general fixed assets, and, accordingly, aGeneral Fixed Asset Account Group is not included in the financial statements. General fixed assetspurchased are recorded as expenditures in the various funds at the time of purchase.

Long-Term Debt - Long-term debt is recognized as a liability of a governmental fund when due or whenresources have been accumulated in the debt service fund for payment early in the following year. Forother long-term obligations, only that portion expected to be financed from expendable, available financialresources is reported as a fund liability of a governmental fund. The remaining portion of such obligationsis reported in the general long-term debt account group.

Cash Fund Balance - Cash fund balance represents the funds not encumbered by purchase order, legalcontracts, and outstanding warrants.

F. Revenues. Expenses and Expenditures

Local Revenues - Revenue from local sources is revenue produced within the school district, whichincludes ad valorem taxes. It is available for current educational expenses and for other purposesauthorized by the school board.

The District is authorized by state law to levy property taxes, which consist of ad valorem taxes on real andpersonal property within the District. The county assessor, upon receipt of the certification of tax leviesfrom the County Excise Board, extends the tax levies on the tax roll for submission to the county treasurerprior to October 1. The county treasurer must commence tax collection within fifteen days of receipt of thetax rolls. The first half of the tax is due prior to January 1. The second half is due prior to April 1.

Ifthe first payment is not made timely, the entire tax becomes due and payable on January 2. Second halftaxes become delinquent on April 1 of the year following the year of assessment. If not paid by thefollowing Oct. 1, the property is offered for sale for the amount of taxes due. The owner has two years toredeem the property by paying the taxes and penalty owed. If at the end of two years the owner has notdone so, the purchaser is issued a deed to the property.

Intermediate Revenues - Revenue from intermediate sources is revenue from funds collected by anintermediate administrative unit or political sub-division, such as a county or municipality, and redistributedto the school district.




State Revenues - Revenue from state sources for current operations are primarily governed by the stateaid formula under the provisions of Article XVIII, Title 70, Oklahoma Statutes. The State Board ofEducation administers the allocation of state aid funds to school districts based on informationaccumulated from the districts.

After review and verification of reports and supporting documentation, the State Department of Educationmay adjust subsequent fiscal period allocations of money for prior year errors disclosed by review.Normally, such adjustments are treated as reductions or additions of revenue of the year when theadjustment is made.

The District receives revenue from the state to administer certain categorical educational programs. StateBoard of Education rules require that revenue earmarked for these programs be expended only for theprogram for which the money is provided. These rules also require that the money notexpended, as oftheclose of the fiscal year, be carried forward into the following year to be expended for the same categoricalprograms. The State Department of Education requires that categorical educational program revenues beaccounted for in the general fund.

Federal Revenues- Revenue from Federal sources is money originating from the Federalgovernment andmade available to the school district either as direct grants or under various programs passed-through theState Department of Education.

The Federal government also makes payments to school districts whose revenues are adversely affectedby the presence of Federal activities. Although these payments are made in consideration of lost propertytax revenue, the Oklahoma State Department of Education advocates classifying such amounts asrevenue from Federal sources.

Instruction Expenditures - Instruction expenditures include the activities dealingdirectly with the interactionbetween teachers and students. Teaching may be provided for students in a school classroom, in anotherlocation, such as a home or hospital, and in other learning situations, such as those involving co curricularactivities. It may also be provided through some other approved medium, such as television, radio,telephone and correspondence. Examples of expenditures that might be included here are the activities ofteacher assistant of any type (clerks, graders, teaching machines, etc.), which assist in the instructionalprocess. The activities of tutors, translators, and interpreters would be recorded here. Departmentchairpersons who teach for any portion of time are included here. Tuition/transfer fees paid to other LEAswould be included here.

Support Services Expenditures - Support services expenditures provide administrative, technical (such asguidance and health) and logistical support to facilitate and enhance instruction. These services exist asadjuncts for fulfilling the objective of instruction, community services and enterprise programs, rather thanas entitles within them.

Operation of Non-Instructional Services Expenditures - Activities concerned with providing non-instructional services to students, staff, and the community.

Facilities Acguisition and Construction Services Expenditures - Consist of activities involved with theacquisition of land and buildings; remodeling buildings; the construction of buildings and additions tobuildings; initial installation or extension of servicesystems and other built-in equipment; and improvementto sites.

Other Outlays Expenditures - A number of outlays of governmental funds are not properly classified asexpenditures, but still require budgetary or accounting control. These are classified as Other Outlays.These include debt service payments (principal and interest).

Other Uses Expenditures - This includes scholarships provided by private gifts and endowments; studentaid and staffawards supported by outside revenue sources (i.e., foundations). Also, expenditures for self-funded employee benefit programs administered either by the District or a third party administrator.

Repayment Expenditures - Repayment expenditures represent checks/warrants issued to outsideagencies for refund or restricted revenue previously received for overpayments, non-qualifiedexpenditures, and other refunds to be repaid from Districtfunds.




Interfund Transactions - Quasi-external transactions are accounted for as revenues, expenditures orexpenses. Transactions that constitute reimbursements to a fund or expenditures/expenses initially madefrom itthatare properly applicable to anotherfund, are recorded as expenditures/expenses in the fund thatis reimbursed.

All other interfund transactions, except quasi-external transactions and reimbursements, are reported astransfers. Nonrecurring or nonroutine permanent transfers of equity are reported as residual equitytransfers.

Budgetary Information

Under current Oklahoma Statutes, a formal Estimate of Needs (Budget) is required for all funds exceptfortrust and agency funds. Budgets are presented for all funds that include the originally approved budgetedappropriations for expenditures and final budgeted appropriations as adjusted for supplementalappropriations and approved transfers between budget categories. The annual Estimate of Needs, whenapproved by the Board and subsequently filed with the County Clerk and approved by the County ExciseBoard, becomes the legal budget. Supplemental appropriations, if required, were made during the yearand are reflected on the budget vs. actual presentations shown included in supporting schedules.

2. Deposit Categories of Credit Risk

Collateral is required for demand deposits and certificates ofdepositforall amounts not covered byfederaldeposit insurance. The District's investment policies are governed by state statute. Permissibleinvestments include:

1. Direct obligations of the United States Government to the payment of which the full faith and creditof the government is pledged.

2. Obligationsto the payment of which the full faith and credit of the state is pledged.

3. Certificates of deposits of banks when such certificates of deposits are secured by acceptablecollateral as in the deposit of other public monies.

4. Savings accounts or savings certificates of savings and loan associations to the extent that suchaccounts or certificates are fully insured by the Federal Savings and Loan Insurance Corporation.

5. Repurchase agreements that have underlying collateral consisting of those items specified inparagraphs 1 and 2 of this section including obligations of the United States, its agencies andinstrumentalities, and where collateral has been deposited with a trustee of custodian bank in anirrevocable trust or escrow account established for such purposes.

6. County, municipal or school district direct debt obligations for which an ad valorem tax may belevied or bond and revenue anticipation notes, money judgments against such county, municipalityor school district ordered by a court of record or bonds or bond and revenue anticipation notesissued by a publictrust for which such county, municipality or school district is a beneficiary thereof.All collateral pledged to secure public funds shall be valued at no more than market value.

7. Money market mutual funds regulated by the Securities and Exchange Commission and whichinvestments consist of obligations of the United States, its agencies and instrumentalities, andinvestments in those items listed above.

8. Warrants, bonds or judgments of the school district.

10



Deposit Categories of Credit Risk (continued)

9. Qualified pooled investment programs, the investments of which consist of those items specifiedabove, as well as obligations of the United States agencies and instrumentalities, regardless of thesize of the district's budget. To be qualified, a pooled investment program for school funds must begoverned through an Interlocal cooperative agreement formed pursuant to Title 70 Section 5-117b,and the program must competitively select its investment advisors and other professionals. Anypooled investment program must be approved by the Board of Education.

The District has not adopted a formal investment policy.

Custodial Credit Risk:

Deposits and Investments - The District's demand deposits are required by law to be collateralized by theamount that is not federally insured.

Securities pledged as collateral are held by a third party or Federal Reserve Bank. Joint custodysafekeeping receipts are held in the name of the depositing institution, but are pledged to the District. Thesecurity cannot be released, substituted, or sold without the School Treasurer's approval and release ofthe security.

Certificates of deposit are collateralized at least by the amount not federally insured. As of June 30, 2011,the District had no deposits exposed to custodial credit risk.

The District's investments consist of direct obligations of the U.S. government and agencies' securities.

Interest Rate Risk:

Investments are made based upon prevailing market conditions at the time of the transaction with theintent to hold the instrument until maturity. However, the District has no formal written policy addressinginterest rate risk.

Credit Risk:

The District has no formal written policy addressing credit risk.

At June 30, 2011, the District has no investments that are not guaranteed by the full faith and credit of theUnited States Government.

3. General Long-Term Debt

State statutes prohibit the District from becoming indebted in an amount exceeding the revenue to bereceived for any fiscal year without approval by the District's voters. Bond issues have been approved bythe voters and issued by the District for various capital improvements. These bonds are required to befully paid serially within 25 years from the date of issue.

General long-term debt of the District consists of bonds payable. Debt service requirements for bonds arepayable solely from fund balance and future revenues of the debt service fund.

11



General Long-Term Debt (continued)

The following is a summary of the long-term debt transactions of the District for the year ended June 30,2011:

BondsPayable

Balance, July 1,2010 $ 1,375,000.00

Additions $

Retirements $ 110,000.00

Balance, June 30, 2011 $ 1,265,000.00

A brief description of the outstanding general obligation bond issues at June 30, 2011, is set forth below:

AmountOutstanding

School District No. C-52 Building Bonds,Series 2009 , original issue

$1,000,000.00, average interest rate of 2.98%,first installment of $110,000.00 due on June 1, 2011, andannual installments of $110,000.00 due thereafter,final payment of $120,000.00 due on June 1,2019. $ 890,000.00

School District No. C-52 Building Bonds,Series 2010, original issue

$375,000.00, average interest rate of 2.4 %,first installment of $90,000.00 due on June 1, 2012 , andannual installments of $95,000.00 due thereafterfinal payment of $95,000.00due on June 1, 2015. 375,000.00

Total Bonds Outstanding $ 1,265,000.00

The annual debt service requirements for retirement of bond principal and payment of interest are asfollows:

Year endingJune 30,

$

$

Principal Interest Total

20122013201420152016

2017-2019

Total

200,000.00205.000.00205,000.00205,000.00110,000.00340.000.00

1,265,000.00

$

$

34,295.0027,920.0023,370.0018,655.0013,530.0021.890.00

139,660.00

$

$

234,295.00232,920.00228,370.00223,655.00123,530.00361,890.00

1,404,660.00

Interest expense incurred on general long-term debt during the current year totaled $38,805.00

12



4. Lease Commitments

The District had the following lease commitments for construction, equipment and furnish of a newgymnasium and classroom additions and to construct, equip and remodel of the existing classrooms intooffice space and walkways and copy machines in effect at June 30, 2011.

Year endingJune 30,

$

$

AnnualPayments

2012201320142015

124,065.84104,065.84694,065.84

4,065.84

Total 926,263.36

Payments include interest.

Lease purchase payments are intended to be paid from future sales of Series Bond Issues. The leasepayments are appropriated annually from school district funds. No liability is reflected in the financialstatements for the above lease commitments. Payments include interest.

5. Employee Retirement System

Description of Plan

The District participates in the state-administered Oklahoma Teachers' Retirement System. The System,which is a cost-sharing multiple-employer public employee retirement system, which is a defined benefitpension plan covering all employees of the public school system. The supervising authority for themanagement and operation ofthe System is a 13-member Board ofTrustees, which acts as a fiduciary forinvestment of the funds and the application of plan interpretations. The System provides retirement anddisability benefits, annual cost of living adjustments, death benefits and other benefits to plan membersand beneficiaries. Oklahoma State Statutes establish benefit provisions and may be amended onlythrough legislative action. The Oklahoma Teachers' Retirement System issues a publicly availablefinancial report that includes financial statements and required supplementary information for the System.The report may be obtained by writing to the Oklahoma Teachers' Retirement System, P.O. Box 53624,Oklahoma City, Oklahoma 73152.

Basis of Accounting

The System's financial statements are prepared in conformity with accounting principles generallyaccepted in the United States of America. The financial statements have also been prepared incompliance with the requirements of the Government Accounting Standards Board Statement No. 34. Thefinancial statements are prepared on the accrual basisof accounting, under which expenses are recordedwhen the liability is incurred, revenues are recorded in the accounting period they are earned and becomemeasurable, and investment purchases and sales are recorded as of their trade dates. Member andemployer contributions are recognized when due, pursuant to formal commitments. Benefits and refundsare recognized when due and payable.

13



Employee Retirement System (continued)

The pension benefit obligation is a standardized disclosure measure of the present value of pensionbenefits. This pension valuation method reflects the present value of estimated pension benefits that willbe paid in future years as a result of employee services performed to date and is adjusted for the effect ofprojected salary increases. There are no actuarial valuations performed on individual school districts. Thenonfunded pension benefit obligation of the System, as determined as part of the latest actuarial valuationdated June 30, 2011, is as follows:

Dollars in Millions

Actuarial Accrued LiabilityActuarial Value of Assets

$ 17,561.9,961.

Unfunded Actuarial Accrued Liability $ 7,600.

Funding Policy

A participant with five years of creditable service may retire with a normal retirement allowance at the ageof sixty-two (62) or with reduced benefits as early as age fifty-five (55). The normal retirement allowancepaid monthly for life and then to beneficiaries, if certain options are exercised, equals two percent of theaverage of the highest three earning years of contributory service multiplied by the number of years ofcredited service. Retiring members may count up to 120 days of unused accumulated sick leave towardan additional year of service credit. A participant leaving employment before attaining retirement age, butcompleting ten years of service, may elect to vest his accumulated contributions and defer receipt of aretirement annuity until a later date. When a participant dies in active service and has completed ten yearsof credited service, the beneficiary is entitled to a death benefit of $18,000.00 and the participant'scontributions plus interest. If the beneficiary is a surviving spouse, the surviving spouse may, in lieu of thedeath benefit, elect to receive, subject to the surviving spousal options, the participant's retirement benefitsaccrued at the time of death. The contribution rates for the Districts, which are not actuarially determined,and its employees are established by statute and applied to the employee's earnings, plus employer-paidfringe benefits. The employers' contribution rate is 9.5% Employees contribute 7.0% of coveredcompensation..

Annual Pension Cost

The District's contribution to the System for the year ending June 30, 2011, was $151,367.81. TheDistrict's total payroll for fiscal year 2010-11 amounted to $ 1,054,342.33.

6. Litigation

The District is contingently liable for lawsuits and other claims in the ordinary course of its operations. Thesettlement of such contingencies under the budgetary process would require appropriation of revenues yetto be realized, and would not materially affect the financial position of the District at June 30, 2011.

7. Contingent Liabilities

The District receives significant financial assistance from the United States government in the form ofgrants and other federal assistance. Entitlement to the resources is generally conditioned uponcompliance with terms and conditions of the grant agreements and applicable federal regulations, includingthe expenditure of the resources for eligible purposes. Substantially, all grants are subject to financial andcompliance audits by the grantors. Any disallowances as a result of these audits become a liability of theDistrict. The District estimates that no material liabilities will result from such audits.

14



8. Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to and destruction ofassets; errors and omissions; injuries to employees; or acts of God. The District purchases commercialinsurance to cover these risks, including general and auto liability, property damage, and public officialsliability. Settled claims resulting from these risks have not exceeded the commercial insurance coverage inany of the past three fiscal years.

The School also participates in a risk pool for Workers' Compensation coverage in which there is transferor pooling of risks among the participants of that pool. In accordance with GASB No. 10, the Schoolreports the required contribution to the pool, net of refunds, as insurance expense. The risk pool is theOklahoma School Assurance Group (OSAG), an organization formed for the purpose of providing workers'compensation coverage to participating schools in the State of Oklahoma. In that capacity, OSAG isresponsible for providing loss control services and certain fiscal activities, including obtaining contractarrangements for the underwriting, excess insurance agreements, claims processing, and legal defense forany and all claims submitted to them during the plan year. As a member of OSAG, the District is requiredto pay fees set by OSAG according to an established payment schedule. A portion of the fees paid by theDistrict goes into a loss fund for the District. The fee for the loss fund is calculated by projecting lossesbased on the schools losses for the last five years. OSAG provides coverage in excess of the Loss Fund,so the District's liability for claim loss is limited to the balance of the loss fund. If the District does not usetheir loss fund in three years, it is returned to them with no interest.

9. Surety Bonds

The Osage County treasurer serves as the District treasurer and is bonded by ACCO-SIG, bond numberACCO-SIG2010, for the penal sum of $100,000.00, and is subject to a $50,000.00 deductible. The term ofthe bond runs from July 1, 2010, to June 30, 2011.

The school secretary, school board minute clerk/encumbrance clerk, payroll clerk and activity fundcustodian are bonded by Western Surety Company, bond number 68366791, for the penal sum of$100,000.00 for the term of June 1, 2010, to June 1, 2011.

The food service director & lunch fund custodian are bonded by Western Surety Company, bond number18304600, for the penal sum of $10,000.00 for the term of July 31, 2010, to July 31,2011.

The Superintendent is bonded by Western Surety Company, bond number 70548530, for the penal sum of$100,000.00 for the term of July 1, 2010, to June 1, 2011.

10. Subsequent Event

Subsequent to June 30, 2011, The Anderson School district sold $120,000.00 in general obligation bonds.The bonds will begin maturing on July 1, 2013 with final maturity on July 1, 2016. The School intends touse proceeds from sale of these bonds to make lease purchase payments due as set forth in footnotenumber 4.

15

COMBINING FINANCIAL STATEMENTS


COMBINING STATEMENT OF ASSETS, LIABILITIES AND FUND BALANCESALL SPECIAL REVENUE FUNDS - REGULATORY BASIS

JUNE 30, 2011

ASSETS

Cash

Investments

Total assets

LIABILITIES AND FUND BALANCES

Liabilities:


Encumbrances

Total liabilities

Fund balances


Building FundChild Nutrition

Fund Total

$ 24,889.62 $ 22,699.35 $ 47,588.97

42,550.00 38,400.00 80,950.00

$ 67,439.62 $ 61,099.35 $ 128,538.97

$ 14,439.37 $ 15,851.39 $ 30,290.76

39,575.53 857.00 40,432.53

$ 54,014.90 $ 16,708.39 $ 70,723.29

$ 13,424.72 $ 44,390.96 $ 57,815.68

$ 67,439.62 $ 61,099.35 $ 128,538.97

16


COMBINING STATEMENT OF REVENUES COLLECTED, EXPENDITURESPAID AND CHANGES IN FUND BALANCES

ALL SPECIAL REVENUE FUNDS - REGULATORY BASIS

JUNE 30, 2011

Revenues collected:

Local sources


State sources

Federal sources

Total revenue collected

Expenditures paid:

Instruction

Support services


Capital outlay

Other outlays

Other uses


Excess of revenues collected

over (under) expenses paid

before adjustments to prior

year encumbrances



Bond Sale Proceeds


Bank charges


Excess of revenues and other sources

over (under) expenditures and otheruses



Building FundChild Nutrition

Fund Total

$ 86,907.61 $ 28,921.49 $ 115,829.10

0.83

159.79

2,518.49

113,793.64

2,519.32

113,953.43

$ 87,068.23 $ 145,233.62 $ 232,301.85

$ $ $

142,875.40 139,115.31 281,990.71

5,686.68 5,686.68

$ 148,562.08 $ 139,115.31 $ 287,677.39

$ (61,493.85) $ 6,118.31 $ (55,375.54)

$ 0.33 $

$ - $

0.33

$ (61,493.52) $ 6,118.31 $ (55,375.21)

$ 74,918.24 $ 38,272.65 $ 113,190.89

13,424.72 $ 44,390.96 $ 57,815.68

17


COMBINING STATEMENT OF ASSETS, LIABILITIES AND FUND BALANCES

CAPITAL PROJECT FUNDS - REGULATORY BASIS

JUNE 30, 2011

Bond Fund 31 Bond Fund 32 Total

ASSETS

Cash $ 91.22 $ 7.36 $ 98.58

Investments

$

4,300.00

4,391.22

200.00

$

4,500.00

Total assets $ 207.36 4,598.58


Liabilities:

Outstanding warrants $ - $ - $ -

Encumbrances - - -

Total liabilities $ - $ - $ -

Fund balances:

Designated for capital projects $ 4,391.22 $ 207.36 $ 4,598.58

Undesignated - - -

Total fund balances $ 4,391.22 $ 207.36 $ 4,598.58

Total liabilities and fund balances $ 4,391.22 $ 207.36 $ 4,598.58

18

ANDERSON SCHOOL DISTRICT NO. C-52COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

CAPITAL PROJECT FUNDS - REGULATORY BASISJUNE 30, 2011

Bond Fund 31 Bond Fund 32

30.54 207.36

30.54 207.36

375,000.00

$ 375,000.00 $

Total

237.90

237.90

375,000.00

375,000.00

Revenues collected:

Local sources 3


State sources

Federal sources

Total revenues collected $

Expenditures paid:

Instruction $

Support services


Capital outlays

Other outlays

Other uses

Total expenditures paid $


expenditures $

Adjustments to prior year encumbrances $


Bond sale proceeds $


Bank charges

Total other financing sources (uses) $

Excess revenues and othersources over (under)

expenditures and other uses



30.54 $ (374,792.64) $ (374,762.10)

$

$ -

I

$ 30.54

$ 4,360.68

$ 4,391.22

19

$

$ $

$ (374,792.64) $ (374,762.10)

$ 375,000.00 $ 379,360.68

207.36 4,598.58


COMBINING STATEMENT OF ASSETS, LIABILITIES AND FUND BALANCES

FIDUCIARY FUND - REGULATORY BASIS

JUNE 30, 2011

Cash

Due from other funds

Total assets

ASSETS


Liabilities:


Interest not posted

Total liabilities

Fund balances:

Unreserved/undesignated


20

Agency Fund

Activity Fund

58,339.81

58,339.81

218.98

$ 218.98

$ 58,120.83

$ 58,339.81

SUPPORTING SCHEDULES


BUDGETARY COMPARISON SCHEDULE - REGULATORY BASIS

BUILDING FUND


Original Budget Final Budget Actual

74,918.24 $ 74,918.24 $ 74,918.24 $

$ 79,522.50 $ 79,522.50 $

Variance with

Final BudgetFavorable

(Unfavorable)


Revenues collected:

Local sources


State sources

Federal sources


Expenditures paid:

Instruction

Support services


Capital outlay

Other outlays

Other uses


$ 79,522.50 $ 79,522.50 $

86,907.61 $ 7,385.11

0.83 0.83

159.79 159.79

87,068.23 $ 7,545.73

$



prior year encumbrances $




Bank charges



154,440.74 154,440.74

154,440.74 $ 154,440.74 $

21

142,875.40

5,686.68

148,562.08 $

13,424.39 $

0.33

13,424.72

11,565.34

(5,686.68)

5,878.66

13,424.39


BUDGETARY COMPARISON SCHEDULE - REGULATORY BASIS

CHILD NUTRITION FUND



Revenues collected:

Local sources


State sources

Federal sources


Expenditures paid:

Instruction

Support services


Capital outlay

Other outlays

Other uses


Original Budget

$

Final Budget Actual

$

Variance with

Final BudgetFavorable

(Unfavorable)

38,272.65 38,272.65 $ 38,272.65 -

25,763.50 $ 25,763.50 $ 28,921.49 $ 3,157.99

2,071.36 2,071.36 2,518.49 447.13

115,373.59 115,373.59 113,793.64 (1,579.95)

143,208.45 $ 143,208.45 $ 145,233.62 $ 2,025.17

- $ - $ - $ -

181,481.10 181,481.10 139,115.31 42,365.79

$ 181,481.10 $ 181,481.10 $ 139,115.31 $ 42,365.79



prior year encumbrances $




Bank charges



$ 44,390.96 $

$ 44,390.96

44,390.96

22


SCHEDULE OF FEDERAL AWARDS EXPENDED


Federal

Federal Grantor/Pass-Through Grantor/Program Title CFDA# Grantor's Number

U.S. DeDartment of Education

Direct Programs:

2010-2011 Proarams

Title VII, Indian Education 84.060A S060A100531

Small Rural School Achievement Program 84.358A S358A102646

Sub-Total

Passed-Through State Department

of Education:

2009-2010 Proarams

ARRAIDEA-B Flow Through

ARRA Education Stabilization Fund

Sub-Total

2010-2011 Programs

Title l-Basic

ARRA-Title I

IDEA-B Flow Through

ARRA IDEA-B Flow Through

ARRA Preschool

IDEA-B Preschool

ARRA Education Stabilization Fund

Title II, Part A Training & Recruiting Fund

Title II, Part D, Education Through Technology

Education Jobs Fund

Sub-Total

Theaccompanying notesare an intregal partofthis schedule,(continued) 23

84.391A

84.394

84.010

84.389

84.027

84.391A

84.392

84.173

84.394

84.367

84.318X

84.410

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Balance at Balance atJuly 1, 2010 Receipts Expenditures June 30, 2011

14,697.00 $ 14,697.00 $

29,942.00 29,942.00

44,639.00 $ 44,639.00 $

(18,966.55) 18,966.55

(14,482.00) 14,482.00

(33,448.55) $ 33,448.55 $

$ 63,978.88 $ (63,978.88)

- 8,737.82 (8,737.82)

- 64,149.89 (64,149.89)

3,910.05 3,910.05 -

860.39 860.39 -

2,000.00 2,000.00 -

64,695.00 64,695.00 -

- 10,033.06 (10,033.06)

- 221.65 (221.65)

- 43,993.14 (43,993.14)

71,465.44 $ 262,579.88 $ (191,114.44)


SCHEDULE OF FEDERAL AWARDS EXPENDED


Federal

Federal Grantor/Pass-Through Grantor/Program Title CFDA # Grantor's Number

U. S. Department of Agriculture

Passed-Through State Department

of Education:

Child Nutrition Cluster:

Non-Cash Assistance (Commodities):

National School Lunch Program 10.555 N/A

Non-Cash Assistance Sub-Total

Cash Assistance:

School Breakfast Program 10.553 N/ANational School Lunch Program 10.555 N/A

Sub- Total for Child Nutrition Cluster

Other Federal Assistance

2010-2011 Proarams

Flood Control 12.112 N/ASubmarginal Lands 93.778 N/AIn Lieu 14.850 N/A

Sub-Total

TOTAL FEDERAL ASSISTANCE

Theaccompanying notesare an intregal partof this schedule.

24

Balance at Balance atJuly 1,2010 Receipts Expenditures June 30,2011

$ 7,401.95 $ 7,401.95 $

$ 7,401.95 $ 7,401.95 $

$ 42,044.56

71,749.09

$ 42,044.56

71,749.09

$

$ 113,793.65 $ 113,793.65 $

$ 1,118.50 $ 1,118.50 $ -

- 82.74 82.74 -

- 710.12 710.12 -

$ 1,911.36 $ 1,911.36 $ -

(33,448.55) $ 272,659.95 $ 430,325.84 $ (191,114.44)


NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFOR THE YEAR ENDED JUNE 30, 2011

For all federal programs, the District uses the fund types prescribed by the Oklahoma StateDepartment of Education and conforms to the system of accounting authorized by the State ofOklahoma. General, Building, and Child Nutrition Funds are used to account for resourcesrestricted, or designated for, specific purposes by a grantor. Federal and state financialassistance generally is accounted for in the General, Building, and Child Nutrition Fund.

The accounting and financial reporting treatment applied to a fund is determined by its'measurement focus. The Governmental Fund types are accounted for using a current financialmeasurement focus. All federal grant funds were accounted for in the General, Building, andChild Nutrition Funds, which are Governmental Fund types. With this measurement focus, onlycurrent assets and current liabilities and the fund balance are included on the balance sheet.Operating statements of these funds present increases and decreases in net current assets.

The Regulatory Basis of Accounting is used for the Governmental Fund types and Agencyfunds. This basis of accounting recognizes revenue from all sources when they are received.Federal grant funds are considered to be recognized when encumbered or reserved to theextent of expenditures made under the provisions of the grant.

Positive amounts listed in the either "Balance at July 1, 2010" or "Balance at June 30, 2011"column represent funds received by the school and not yet expended or coded to the program.Negative amounts represent expenditures which have been claimed, but the revenue not yetcollected.

The District received donated foods through the Federal Food Distribution Program (10.550). AtJune 30, 2011, the school maintained an immaterial amount of food commodities inventory. Perthe Regulatory Basis of Accounting, the commodities received and used are not recognized asrevenue or expenditures in the school's Financial Statements.

Reconciliation of the Revenue shown on the Schedule of Expenditures of Federal Awards toStatement of Revenue, Expenditures and Changes in Fund Balance is as follows:

Revenue

Schedule of Expenditures of Federal Awards $ 272,659.95Less Commodities (7,401.95)

Total per Schedule of Expenditures of Federal AwardsReconciled Balance $ 265,258.00

Federal Program Revenues:

General Fund $ 150,912.45

Building Fund 551.91Child Nutrition 113,793.64

Total per Federal Statement of Revenue, Expenditures,

And Changes in Fund Balance $ 265,258.00

25

Activities


SCHOOL ACTIVITY FUND

RECEIPTS, TRANSFERS, DISBURSEMENTS AND SUB-ACCOUNT BALANCES


Balance

7-1-10 Deposited

Net

Transfers/

Adjustments Disbursed

Balance

6-30-11

Other $ 86.69 5; 68.00 $ $ 100.00 $i 54.69

Int/Svc Chg. 376.70 207.75 - 229.38 355.07

Donations 225.57 2,120.25 - 2,137.50 208.32

Pictures 6,303.05 2,450.43 - 1,524.22 7,229.26

Basketball Concession 7,766.96 7,554.54 - 11,010.40 4,311.10

Book Fair 5,457.51 2,835.39 - 2,151.38 6,141.52

Year Books 4,825.74 2,870.00 - 2,400.00 5,295.74

Parent Volunteer Org. 9,515.67 23,252.96 (77.25) 23,057.40 9,633.98

Flower Fund 519.86 538.00 - 864.76 193.10

Fine Arts 53.79 723.50 - 649.92 127.37

K4/Preschool - 325.04 - - 325.04

Kindergarten 110.40 577.10 - 385.42 302.08

1st Grade 274.13 998.92 - 786.99 486.06

2nd Grade 65.28 321.50 - 65.00 321.78

3rd Grade 5.16 - - - 5.16

5th Grade 4.69 700.00 - 554.69 150.00

6th Grade 413.65 1,557.25 - 447.98 1,522.92

Cheerleading 1,210.46 - - 79.80 1,130.66

Archery in Schools - 9,353.79 - 7,615.56 1,738.23

Building Improvement 5,243.77 13,965.63 2,852.63 4,173.12 17,888.91

Student Council 713.83 900.00 - 913.99 699.84

Extended Day 2,852.63

$ 46,025.54 3

- (2,852.63)

(77.25) $

- -

Total Activities > 71,320.05 $ 59,147.51 5! 58,120.83

26

REPORTS REQUIRED BY GOVERNMENT AUDITING STANDARDSii

KERRY JOHN PATTEN, C.PA2101N. Willow Ave.Broken Arrow, OK 74012PhoneNumber (918) 250-8838FAX Number (918) 250-9853

INDEPENDENT AUDITOR'S REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE ANDOTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Board of EducationAnderson School District No. C-52Osage County, Oklahoma

I have audited the combined financial statements - regulatory basis of Anderson School District No. C-52 (the"District"), Anderson, Oklahoma, as of and for the year ended June 30, 2011, which have been prepared on a basisprescribed by the laws of the State of Oklahoma and have issued my report thereon dated Date of release. I conductedmy audit in accordance with auditing standards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of theUnited States.

Internal Control over Financial Reporting

In planning and performing my audit, I considered Anderson School District's internal control over financial reporting as abasis for designing my auditing procedures for the purpose of expressing my opinion on the financial statements, but notfor the purpose of expressing an opinion on the effectiveness of the Anderson School District's internal control overfinancial reporting. Accordingly, I do not express an opinion on the effectiveness of the District's internal control overfinancial reporting.

My consideration of internal control over financial reporting was for the limited purpose described in the precedingparagraph and was not designed to identify all deficiencies in internal control over financial reporting that might besignificant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significantdeficiencies, or material weaknesses have been identified. However, as described in the accompanying Schedule ofFindings and Questioned Costs, I identified certain deficiencies in internal control over financial reporting that I considerto be material weaknesses.

A deficiency in internal control exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatementson a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such thatthere is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, ordetected and corrected on a timely basis. I consider the deficiencies described in the accompanying Schedule ofFindings and Questioned Costs to be a material weakness [2011-1].

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Anderson School District's financial statements are free ofmaterial misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts andgrants, noncompliance with which could have a direct and material effect on the determination of financial statementamounts. However, providing an opinion on compliance with those provisions was* not an objective of my audit, andaccordingly, I do not express such an opinion. The results of my tests disclosed no instance of non compliance or othermatters that are required to be reported under Government AuditingStandards. I noted certain immaterial instances ofnoncompliance that I have reported to management in the Schedule of Comments included on pages 30 and 31 of thisaudit report.

This report is intended solely for the information and use of the audit committee, management and federal awardingagencies and pass-through entities, and is not intended to be and should not be used by anyone other than thesespecified parties.

Kerry Jofyri Patten, C.PAJanuary 6, 2012

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SCHEDULE OF FINDINGS AND QUESTIONED COSTSFOR THE YEAR ENDED JUNE 30, 2011

FINDINGS - FINANCIAL STATEMENTS AUDIT - Material Weakness

[2011-1]

Condition: An adequate internal control structure does not exist because of the small size ofthe entity noris there adequate segregation of duties.

9riter'a: Internal controls should be in places that provide reasonable assurance that any one individualdoes not have control over several of the financial functions of the School District.

Effect: Because ofthe inadequate segregation ofduties there may be an opportunity for an employee toalter record keeping.

Recommendation: We have recommended that the School District strive to implement an adequatesegregation of duties.

Response: We concur with the recommendation; however, we concluded that the cost to correct thiscondition would exceed the benefit.

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SUMMARY OF PRIOR AUDIT FINDINGSJULY 1, 2010 TO JUNE 30, 2011

The summary of prior audit findings is required to report the status of all audit findings reported in the prioraudit's schedule of findings and questioned costs relative to federal awards.

The school district had no prior year audit findings relative to federal award programs.

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SCHEDULE OF COMMENTSJULY 1, 2010 TO JUNE 30, 2011

The following conditions, while not representing material weaknesses in the system of internal accountingcontrol, represent areas noted during my reviewof the school's accounting system in which I feel improvementsin the internal control and/or operational efficiency may be attained. I have also noted, as required, anynoncompliance with State Department of Education Regulations.

I. Condition: During our audit of purchase orders, we found three 2010-11 purchase orders that did notreflect a signature authorizing approval to purchase.

Recommendation: The designated school employee in charge of the purchases should indicate approvalofeach purchase by signing in the appropriate place on each school purchase order, after first determiningthat the encumbrance does not exceed the balance of the appropriation charged.

II. Condition: During our Payroll/Contracttest workwe noted that amounts were paid for "bonuses to schoolemployees." We were unable to find documentation in school board minutes to specificallyauthorizeadditional amounts.

Recommendation: A school district is not authorized to pay any salary, benefit, or other compensation toschool employees without specific contract provisions authorized by the School Board of Education.

III. Condition: During our testing of Activity Fund deposits, it was noted that the deposit date was before thereceipt date. It appears that receipts are being generated at a later date and not when monies are turnedin. Activity Fund receipts do not contain the signature of the person receiving the money, and recordsindicated that receipts are not being deposited on a timely basis.

Recommendation: Pre-numbered receipts should be written in consecutive order for all collections, andreceipted amount should be the same as deposits shown on the monthly bank statements. At the time ofeach deposit, a notation should be made on the last receipt copy that makes up that deposit. Also bankdeposit slips should have the receipt numbers that comprise them written on their face (i.e. 101-124). Thishelps protect the fund custodian in that it allows for identification of any errors that may be made in writingreceipts.

In addition, the State Board of Education regulations prescribe that all revenue should be deposited withthe bank on the day it is collected or at lease weekly if it does not $100.00.

IV. Condition: During our review of Activity Fund we noted 36% of invoices supporting Activity Fundexpenditures did not contain the signature of the person receiving delivery or having knowledge of servicesrendered.

Recommendation: The Public School Board of Education and School Administration should adopt andenforce procedures to ensure that all invoices and delivery tickets are signed by the receiver and attachedto corresponding purchase order. This procedure will indicate merchandise was received in satisfactorycondition and merchandise paid for is an actual expense of the school district.

continued

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SCHEDULE OF COMMENTSJULY 1, 2010 TO JUNE 30, 2011

"V. Condition: Activity Fund sponsors issued receipts; however, not all receipt books issued to sponsorswere returned for auditor review. Additionally, we were unable to accurately trace yearbook receipts, andthere was no indication made on sponsor receipts of when a deposit was made.

Recommendation: The School should implement procedures that would ensure all receipt books aresubmitted for auditor review. A log should be maintained which lists sponsor name and number sequenceof each receipt book issued to a sponsor. The log should also list date receipt book(s) are returned.Sponsors will be advised to write receipts for all monies received and deposit timely with the Activity FundCustodian.

Previous Year's Audit Comments

Excluding conditions marked with an asterisk, there are no other items in the 2009-10 audit report, which havebeen repeated in this report.

I would like to express my appreciation for the courtesies and cooperation extended to us by school districtadministrators and employees during the course of this audit.

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SCHEDULE OF ACCOUNTANT'S PROFESSIONAL LIABILITY INSURANCE AFFIDAVITJULY 1, 2010 TO JUNE 30, 2011 arnuAVH

State of Oklahoma )County of Tulsa )

The undersigned auditing firm of lawful age, being first duly sworn on oath says that said firm had in full fnrr*and effect Accountant's Professional Liability Insurance in accordance with the>Oklah^ SSSa'udt yla^ 2uToei°1f"^"^"* dUring the entire audit ^gagement J^^^

UNDAKELUCKNotsyPubBeinMd(brti»

State dOktahomaf Commtsslon #05010870My Commission expires 11/30/2013

Kerry John Patten. C.PAAUDITING FIRM

ÂUTHjp^-Z?

Subscribed and sworn to before me on this

L? day of CMfmîl^lô

î^(PMil I DSbloVioNOTARY PUBLIC

My commission expires on:

30 day of figjuimk^. ZoiS

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OSAGE COUNTY, OKLAHOMA JULY 1,2010TO JUNE 30,2011 · 2012. 3. 22. · Anderson School District No....

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