RICHLAND SCHOOL DISTRICT TWO COLUMBIA, …December 2, 2013 To the Citizens of Richland School...

COMPREHENSIVE

ANNUAL FINANCIAL REPORT

OF

RICHLAND SCHOOL DISTRICT TWO

COLUMBIA, SOUTH CAROLINA

FOR THE FISCAL YEAR ENDED

JUNE 30, 2013

Prepared by:Office of Finanicial Services

Debra W. Hamm, Ph.D.Superintendent

Harry W. Miley, JR., Ph.D.Chief Financial Officer

Reference Page

Letter of Transmittal from Administration 1-5

Principal Officers 6

Organizational Chart 7

GFOA Certificate of Achievement for Excellence in Financial Reporting 8

ASBO Certificate of Excellence in Financial Reporting 9

INDEPENDENT AUDITORS' REPORT 10-12

Management's Discussion and Analysis 13-23

Basic Financial Statements

Government-Wide Financial Statements

Statement of Net Position Exhibit 1 25

Statement of Activities Exhibit 2 26

Fund Financial Statements

Balance Sheet - Governmental Funds Exhibit 3 27

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Exhibit 4 28

Statement of Revenues, Expenditures, and Changes in Fund Balances -Governmental Funds Exhibit 5 29

Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance to the Statement of Activities Exhibit 6 30

Statement of Net Position - Proprietary Funds Exhibit 7 31

Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds Exhibit 8 32

Statement of Cash Flows - Proprietary Funds Exhibit 9 33

Statement of Fiduciary Assets and Liabilities - Agency Fund Exhibit 10 34

Notes to the Basic Financial Statements 35-54

General Fund

Budgetary Comparison Schedule Schedule A-1 57

Schedule of Revenues, Expenditures, and Changes in Fund Balance -Revised Budget and Actual Schedule A-2 58-64

Special Revenue Funds

Special Projects Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balances Schedule B-1 66-73

Summary Schedule for Designated State Restricted Grants Schedule B-2 74

Education Improvement Act

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance Schedule B-3 75-80

Summary Schedule by Program Schedule B-4 81

Combining and Individual Fund Statements and Schedules

RICHLAND COUNTY SCHOOL DISTRICT TWO

TABLE OF CONTENTS

YEAR ENDED JUNE 30, 2013

INTRODUCTORY SECTION

FINANCIAL SECTION

i.


TABLE OF CONTENTS


Reference Page

Debt Service Fund

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance Schedule C-1 83

Capital Projects Fund

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance Schedule D-1 85-86

Proprietary Funds

Enterprise Fund:Schedule of Revenues, Expense and Changes in Net Position - Food Service Program Schedule E-1 88

Internal Service Fund:Statement of Changes in Net Position and Liabilities Schedule F-1 90

Schedule of Revenues, Expenses and Changes in Net Position Schedule F-2 91-92

Fiduciary Fund - Agency Fund - Pupil Activity

Statement of Changes in Fiduciary Assets and Liabilities Schedule G-1 94

Schedule of Receipts, Disbursements, and Changes in Due to Pupil Activities Schedule G-2 95

Component Unit - Charter High School

Statement of Financial Position Schedule H-1 97

Schedule of Receipts, Disbursements, and Changes in Net Position Schedule H-2 98

Other Supplemental Schedules

Detailed Schedule of Due to State Department of Education/Federal Government Schedule I-1 100

Reference Page

Net Position by Component Table 1 102Expenses, Program Revenues and Net (Expenses) Table 2 103General Revenues and Total Change in Net Position Table 3 104Fund Balances of Governmental Funds Table 4 105Governmental Fund Revenues Table 5 106Governmental Funds, Expenditures and Debt Service Ratio Table 6 107Other Financing Sources and Usese and Net Changes in Fund Balances, Governmental Funds Table 7 108Assessed Value and Estimated Actual Value of Taxable Property Table 8 109Direct and Overlapping Property Tax Rates Table 9 110Principal Property Taxpayers Table 10 111Property Tax Levies and Collections Table 11 112Ratios of General Bonded Debt Outstanding Table 12 113Legal Debt Margin Table 13 114Direct and Overlapping Debt Table 14 115Demographic and Economic Statistics Table 15 116Principal Employers Table 16 117Full-Time Equivalent School District Emplolyees by Type Table 17 118Operating Statistics Table 18 119School Building Information Table 19 120-123Teacher Base Salaries Table 20 124

TABLE OF CONTENTS (CONTINUED)

FINANCIAL SECTION (CONTINUED)

ii.

STATISTICAL SECTION


TABLE OF CONTENTS


Independent Auditors' Report on Internal Control Over Financial Reporting andOn Compliance and Other Matters Based on an Audit of Financial StatementsPerformed in Accordance with Government Auditing Standards 126-127

Independent Auditors' Report on Compliance for each Major Program and on Internal Controlover Compliance Required by OMB Circular A-133 128-129

Schedule of Expenditures of Federal Awards 130

Notes to the Schedule of Expenditures of Federal Awards 131

Schedule of Findings and Questioned Costs 132

Schedule of Prior Year Findings and Questioned Costs 133

SINGLE AUDIT SECTION

iii.

TABLE OF CONTENTS (CONTINUED)

December 2, 2013

To the Citizens of Richland School District Two Columbia, South Carolina

The Comprehensive Annual Financial Report of Richland School District Two for the fiscal year ended June 30, 2013, is submitted. Responsibility for both the accuracy of the data and the completeness of the information, including all disclosures, rests with the school district. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the school district.

This report consists of management’s representations concerning the finances of the District. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of Richland School District Two has established a comprehensive internal control process that is designed both to protect the District’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the District’s financial statements in conformity with generally accepted accounting principles. As the cost of internal controls should not outweigh their benefits, the school district’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatements. Management asserts that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The independent audit of the financial statements of Richland School District Two was a part of a broader, federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements involving the administration of federal awards. These reports are available in the compliance section of this comprehensive annual financial report.

As part of the District’s single audit, tests are made to determine the adequacy of the internal control structure, including the portion related to federal financial assistance programs, as well as to determine that the District has complied with applicable laws and regulations. The results of the Single Audit revealed no instances of material weakness in the internal control structure or significant violations of laws, regulations, contracts, or grants.

Generally accepted accounting principles require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with the MD&A, which can be found immediately following the report of the independent auditors.

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Profile of the School District

The District is a political subdivision of the State of South Carolina. The District is located in the northeastern section of Richland County and is bordered on the west by Richland School District One of Richland County, on the east and on the south by Kershaw County, and on the north by Fairfield County. The City of Columbia, the state capitol of South Carolina, is also the business and financial center of the state. The Columbia Metropolitan Statistical Area (MSA) has an estimated population of 783,000.

The District operates two early childhood development centers, eighteen elementary schools, seven middle schools, five high schools, three elementary magnet schools, two alternative schools and one adult education center.

Richland School District Two is governed by a seven member Board of Trustees elected at large by the voters of the District. Board members are elected to four year terms. As of June 30, 2013, the District served approximately 26,533 students. The District continues to be one of the fastest growing districts in the state as it has been over the past decade.

Component Unit

The District does have a component unit consisting of a hybrid virtual charter high school serving some sixty 11th and 12th grade students predominately from the Richland Two area. The Richland 2 Charter High School is chartered by the District. It has an independent Board overseeing its operations.

A charter school is considered a state supported public school, and as a result, is part of the District for purposes of the State Constitution. The financial statements of the Richland Two Charter High School are presented as a discretely presented component unit because the charter school is financially dependent on the District.

The school is designed to reduce the dropout rate by addressing the needs of students who could not successfully participate in a traditional high school environment. It offers a small school setting with a flexible class schedule tailored to the individual needs of each student and provides career counseling and development of job skills through seminars, job shadowing, and internships. Funding for the charter high school is formula based and consists of local, state and federal per pupil allocations. The charter high school does reimburse the District for expenses incurred in providing support services.

Economic Condition

State and federal payrolls are major sources of employment and income for residents of the County. The state of South Carolina employs about 30,000 persons in the County. The County has experienced considerable expansion of Federal, State and County facilities. The headquarters of Blue Cross / Blue Shield of South Carolina is located in the School District where the company employs approximately 6,900 people. The headquarters of SCANA Corporation, a $5 billion enterprise, the parent company of South Carolina Electric & Gas, is located in the Columbia MSA. There are significant industrial enterprises within the School District including Bose Corporation and FN Manufacturing, Inc.

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Fort Jackson, the United States Army’s largest training installation, is located adjacent to the District and is a major contributor to the economy. Fort Jackson employs approximately 5,200 civilian employees and provides services to 36,000 retired military personnel and their dependents living in the Columbia MSA. The Fort instructs in excess of 50,000 soldiers in basic training and advanced individual training each year.

Richland County estimated per capita income was approximately $36,366 for 2013. As of September 2013, the estimated unemployment rate for Richland County was 8.1% compared to the state unemployment rate of 7.9%.

Long-term Financial Planning

As previously noted, Richland School District Two has been one of the fastest growing school districts in South Carolina over the past decade. To address this growth, the Board annually updates a 10 Year Facility Plan. As part of that plan, in November 2008, voters approved by a 67% yes vote a $306 million referendum which funded four new elementary schools, a new middle school and a new high school along with expansions to several existing facilities.

The growth in student enrollment is projected to be 500 – 1000 per year which will put student enrollment around 30,000 in the 2018-2019 school year.

Budgetary Control

Richland School District Two exercises budgetary controls. The objective of these budgetary controls is to ensure compliance with the provisions set forth in the annual appropriation adopted by the Board of Trustees. The Board of Trustees annually adopts and approves the General Fund budget by June 30th. The District maintains the modified accrual system for all governmental funds, and uses encumbrance accounting to accomplish budgetary controls at the function level. The Superintendent has authority to approve line item transfers within a fund. The legal level of control is at the fund level. Board approval is needed for supplemental appropriations that are additions to the budget. Encumbrances are utilized to assist in budgetary control, and encumbrances lapse at fiscal year end. The Board of Trustees is given a budget status report on a quarterly basis which is reviewed by members of the Board.

Special Revenue fund budgets are controlled in conformance with the specific requirements of that fund, and budgets are not legally adopted. Budgets are not adopted for the Capital Projects Fund or the Debt Service Fund. Debt Service expenditures are set in accordance with bond issue requirements, with revenues needed to pay the debt service requirement levied by the County Auditor.

Economic Assessment

District policies are in place to assess and maintain the economic condition of the District. Among these is Policy DA which states the District’s Fiscal Management Goals including a requirement to maintain a reserve fund of from seven to fifteen percent of the General Fund Operating Budget. Other policies address managing indebtedness and debt service, determining a budget that reflects the education priorities of the District, maintaining a level of per student expenditures needed to provide a quality education, as well as other polices regarding investments, inventories and various other aspects of financial operations designed to assist in assessing and maintaining the economic condition of the District.

3

Cash Management

The District actively manages its investments by soliciting competition when looking to place funds with any financial institution or with the South Carolina Local Government Investment Pool. The District was able to place most of its idle cash into secured money market investments. Remaining funds were invested in the South Carolina Local Government Investment Pool. The District earned $223k in General Fund interest and $301k in Building Fund Interest.

Risk Management

The District was not exposed to any excess risk nor did the District have any unsettled claims for 2012-2013. Surry Insurance, of Dobson, North Carolina provides the District coverage for building, property, casualty and liability lines of insurance. The District self-insures workers’ compensation. KeenanSuggs Insurance of Columbia, South Carolina provides risk management advisory services to the District.

Awards and Acknowledgements for 2012-2013

Thirty-five additional district teachers earned certification from the National Board for Professional TeachingStandards for a total of 654 district teachers. The District has more Nationally Board Certified teachers thanany other district in the state.

Blythewood High School and Kelly Mill Middle School were finalists for the 2012 Palmetto’s Finest Schoolaward.

Seventeen schools received the State Department of Education’s Palmetto Gold and Silver Awards. Bethel-Hanberry Elementary (2 gold awards), Blythewood High, Blythewood Middle (2 gold awards), Bookman RoadElementary, Bridge Creek Elementary, Center for Inquiry, Center for Knowledge, Lake Carolina Elementary (2gold awards), Round Top Elementary, Spring Valley High School received Gold Awards. Forest LakeElementary, Killian Elementary, Lonnie B. Nelson Elementary, Langford Elementary, Polo Road Elementary,Rice Creek Elementary, Ridge View High received Silver Awards.

Round Top Elementary School was named a National School of Character and a State School of Character. The district received competitive grants totaling close to $2.8 million. Richland Two students received more than $78.3 million in scholarship offers. The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence

in Financial Reporting to Richland School District Two for its Comprehensive Annual Financial Report (CAFR)for the fiscal year ended June 30, 2012. This is the 26th consecutive year that the District has received thisprestigious award.

The District also received a Certificate of Excellence in Financial Reporting for the fiscal year ended June 30,2012 from the Association of School Business Officials International (ASBO). This was also the 26thconsecutive year that the District has received this prestigious award.

A Certificate of Achievement and a Certificate of Excellence in Financial Reporting are valid for one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement and Certificate of Excellence in Financial Reporting requirements. We are submitting it to GFOA and ASBO for review and consideration.

4

Acknowledgements

The preparation of the comprehensive annual financial report on a timely basis was made possible by the dedicated efforts of the entire Financial Services office staff. Each member of the department has our sincere appreciation for the contributions made in the preparation of this report.

In closing, without the leadership and support of the Richland School District Two Board of Trustees, preparation of the report would not have been possible.

Respectfully submitted,

Debra W. Hamm, Ph.D. Superintendent

Harry W. Miley, Jr., Ph.D. Chief Financial Officer

5


Principal Officers2012-2013

MEMBERS OF THE BOARD OF TRUSTEES

The Honorable William R. Flemming, Jr., DMD, Chair

The Honorable Susan Brill, Vice Chair

The Honorable Melinda Anderson, R.N., Secretary

The Honorable Monica Elkins-Johnson, Ed.S

The Honorable Calvin "Chip" Jackson

The Honorable James Manning, M.A.T.

The Honorable Barbara Specter

ADMINISTRATIVE STAFF

Debra W. Hamm, Ph.D.Superintendent

Harry W. Miley, JR., Ph.D.Chief Financial Officer

6


2013-2014 ORGANIZATIONAL CHART

Board of Trustees

Office of the Superintendent

Debra Hamm

Interim Superintendent

Cheryl C. Washington Deputy

Superintendent

Vacant Executive Director of

Communications

Georgette Council Assistant to the Superintendent

School Principals

Sue Mellette Chief Academic

Officer

Roosevelt Garrick Chief Human

Resources Officer

Fred McDaniel Chief Planning

Officer

Tom Cranmer Interim Chief

Technology Officer

Harry Miley Chief Financial

Officer

Jeff Potts Director of

Accountability & Evaluation

As of October 7, 2013

Jack Carter Executive Director

of Operations

7

RICHLAND SCHOOL DISTRICT TWO MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)

FOR THE FISCAL YEAR ENDED JUNE 30, 2013 INTRODUCTION

This narrative overview gives an analysis of the financial activities of the School District for the fiscal year ended June 30, 2013. Our purpose is to inform our citizens of the effect of our School District’s operations and to present our financial position. We ask our citizens to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal as well as the basic financial statements and the associated notes to enhance understanding of the School District’s financial performance.

FINANCIAL HIGHLIGHTS

A sweeping piece of legislation impacting the funding of public K-12 education, Act 388, was passed by the South Carolina Legislature in 2007. This legislation removed taxes imposed for school operations for owner-occupied property in South Carolina. It was replaced by a one cent sales tax increase. Act 388 also imposed a cap on the annual increase in millage for school operations.

In this, the sixth year under this legislation, Richland School District Two found that the cap allowed for an adequate level of local funding for FY 2012-2013. The School District was also fortunate to maintain its "Aa1" rating from Moody's; a AA- from Fitch Ratings; and Standard & Poor’s AA- for general obligation debt. All three firms cited the School District’s experienced and capable management, long-term capital facilities planning, and stable financial operations despite previous mid-year cuts in state aid in awarding their rating.

Our School District’s overall financial picture improved in FY 2012-2013 as revenues again exceeded expenditures for the tenth year in a row and we were able to increase our General Fund Balance by $3.6 million. As of June 30, 2013, the School District’s General Fund Balance was over $33.7 million (15.8% of the total School District operating budget), slightly exceeding the range of 7-15% preferred by Board Policy. All of this was achieved even in the face of the operational pressure of opening the School District’s 5th high school.

Other key financial aspects were as follows:

Net Position - The School District's total net position (as reported on the Government-wide

Statement of Net Position) as of June 30, 2013, was $159.8 million.

Revenues, Other Financing Sources and Expenditures – Governmental revenues totaled $303 million, other financing sources/(uses) totaled $106.5 million, and expenditures totaled $369.4 million for all Governmental Funds at the fund level. Revenues were less than expenditures by $66.3 million. This is largely attributable to the capital projects fund expenditures of $41.4 million and debt service fund expenditures of $82.6 million, incurred to construct and renovate a new high school, as well as renovations to our existing schools.

13

General Fund/Fund Balance - Our principal operating fund, the General Fund, had $214 millionin fiscal year 2013 revenues; other financing sources (net) totaled $2.7 million; expenditurestotaled $213.1 million, leaving a surplus for the year of over $3.6 million. This resulted in theGeneral Fund's fund balance increasing from $30.1 million as of June 30, 2012 to $33.7 million,or 15.8% of the operating budget, as of June 30, 2013.

Bond Sales - The School District sold a total of $55,140,000 in general obligation bonds, whichwere issued in April 2013 and represented the final issuances from the $306 million voterapproved referendum in November 2008. Additionally, the School District issued $10,950,000 ingeneral obligation bonds that were non-referendum bonds issued for capital and technologyimprovements and $28,215,000 in bonds related to refunding prior year issues.

Major Capital Additions - The School District’s net capital assets for governmental activitiesincreased by $22.8 million or 3.3%. This is largely attributable to the construction in progress of anew elementary school and renovations at various other schools.

Proprietary Funds – The School District maintains two Proprietary Fund types. The EnterpriseFund, which operates like a business, is the Food Service Fund. The fund ended the year with adecrease in net position of $426k and total net position equaling over $5.2 million. The Board ofTrustees approved for the School District to self-insure for Worker’s Compensation beginning inthe 2008-2009 fiscal year. To fund the self-insurance program the School District transferred $1million in FY 2007-2008 to establish the Internal Service Fund to account for the WorkersCompensation Program beginning July 1, 2008. The fund provides workers compensationbenefits to School District employees and is a governmental activity. The fund ended the yearwith a decrease in net position of $1 million and total net position exceeding $461k.

Cash and Investments (Governmental Activities) - Cash and Investments increased by $4.6million from June 30, 2012 to June 30, 2013 which is largely attributable to the funding of capitalprojects previously referenced.

Debt (Governmental Activities) - The School District retired $56.5 million in principal andborrowed $94.3 million in new bond issues resulting in a net increase of outstanding debt of $42.2million. The Debt Service Fund Balance increased by $2.5 million to a total in excess of $15.8million.

OVERVIEW OF FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the School District's basic financial statements. The School District's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements (General, Special Revenue, Debt Service, Capital Projects, Fiduciary (Pupil Activity), Proprietary (Food Service) and the Internal Service) and 3) notes to the basic financial statements. This report also contains required and other supplementary information in addition to the basic financial statements themselves. A description of these statements and some related definitions follow:

14

Government-wide Financial Statements - The government-wide financial statements are designed to provide readers with a broad overview of the School District's finances, in a manner similar to a private-sector business. These statements outline functions of the School District that are principally supported by property taxes and intergovernmental revenues (governmental activities). The governmental activities of the School District include instruction, support services, community services, and intergovernmental expenditures. The government-wide financial statements include not only the School District itself (known as the primary government), but also a discretely presented component unit. The component unit is a legally separate charter school. Financial information for the charter schools is reported separately from the financial information presented for the primary government itself; this information is not significant or material to the School District as a whole. See note 1A of the Notes to the Basic Financial Statement on page 34.

The government-wide financial statements can be found on pages 24 and 25 of this report.

Statement of Net Position - The statement of net position presents information on all of the School District's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the School District is improving or deteriorating.

Statement of Activities - The statement of activities presents information showing how the School District's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences).

Fund Financial Statements - A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The School District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the School District can be divided into three categories: governmental, proprietary and fiduciary.

Governmental Funds - Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. Unlike the government-wide financial statements, however, governmental fund financial statements focus on near-term inflows of resources, as well as on balances of resources available at the end of the fiscal year. Such information may be useful in evaluating the School District's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the School District's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are on pages 27 and 29.

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The School District maintains its accounting records in conformity with the South Carolina Department of Education’s Financial Accounting Handbook. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General, Special Revenue, Education Improvement Act (EIA), Debt Service and Capital Projects Funds, all of which are considered to be major funds. The basic governmental funds financial statements can be found on pages 26 and 28. Proprietary Funds – The School District uses two types of proprietary funds: enterprise and internal service funds. The School District uses an enterprise fund to account for its food service operations and is presented as business-type activities in the government-wide financial statements. The School District also uses an internal service fund to account for self-funded workers compensation benefits. Internal services benefit governmental activities and are included within that column in the government-wide financial statements. The School District’s internal service fund is also presented in a single column in the proprietary fund financial statements as governmental activities. The basic proprietary fund financial statements can be found on pages 30 through 32 of this report. Fiduciary Funds - Fiduciary (Pupil Activity) funds are used to account for resources held for the benefit of students and are not reflected in the government-wide financial statements because the resources of those funds are not available to support the School District's own programs. The basic fiduciary fund financial statement can be found on page 33 of this report.

Notes to basic financial statements - The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found on pages 34 through 53 of this report.

Supplemental information - In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the School District's budget process. The School District legally adopts an annual budget for the General Fund. A budgetary comparison statement has been provided for the General Fund and other supplementary information schedules required by the State Department of Education, the certificate program of the Government Finance Officers’ Association, or the Certificate of Excellence of the Association of School Business Officials International. The required supplementary information can be found on page 54 of this report.

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GOVERNMENT-WIDE FINANCIAL ANALYSIS-THE GOVERNMENT AS A WHOLE

Net position may serve over time as a useful indicator of a government’s financial situation. In the case of the School District as a whole, total assets exceeded total liabilities by $159.8 million as of June 30, 2013. Overall, the School District’s financial position decreased in total net position by $8.5 million during 2012-2013, as a result of continued funding of the construction of new schools.

By far the largest portion of the School District's assets, $112.2 million (70.2%) reflects its net investment in capital assets (e.g., land, buildings and improvements, vehicles, furniture and equipment and construction in progress). The School District uses these capital assets to provide services to its students; consequently, these assets are not available for future spending. Although the School District's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

The following table presents a summary of the School District's net position at June 30, 2013 compared to June 30, 2012.

2012 2013 2012 2013 2012 2013AssetsCurrent and Other Assets 172,204,463$ 204,063,905$ 1,527,334$ 3,965,070$ 173,731,797$ 208,028,975$

Capital Assets 542,642,494 547,622,119 2,797,051 2,528,910 545,439,545 550,151,029

Total Assets 714,846,957 751,686,024 4,324,385 6,493,980 719,171,342 758,180,004

LiabilitiesOther Liabilities 79,005,982 33,015,095 (1,406,464) 1,108,864 77,599,518 34,123,959

Long-Term Liabilities 473,100,936 564,074,829 19,734 100,672 473,120,670 564,175,501

Total Liabilities 552,106,918 597,089,924 (1,386,730) 1,209,536 550,720,188 598,299,460

Net PositionNet Investment in Capital Assets 38,453,690 109,733,690 2,797,051 2,528,910 41,250,741 112,262,600

Restricted 97,923,741 12,180,380 - - 97,923,741 12,180,380

Unrestricted 26,362,608 32,682,030 2,914,064 2,755,534 29,276,672 35,437,564

Total Net Position 162,740,039$ 154,596,100$ 5,711,115$ 5,284,444$ 168,451,154$ 159,880,544$

Net Position

Governmental Activities Business-Type Activities Totals

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The following table shows the changes in net position for fiscal years ended June 30, 2012 and 2013:

Governmental Activities - The School District's financial position is the product of several financial transactions including the net results of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets, and the depreciation of capital assets.

The School District’s revenue for total governmental activities for FY 2013 exceeded $304 million and was less than expenses by $8 million. In November 2008, voters approved a bond referendum to fund the construction of four new elementary schools, one new middle school, and one new high school, as well as renovations to our existing schools. With the passage of Act 388 by the South Carolina General Assembly, the classification of revenues for governmental activities reflects revenue that was formerly classified as Property Tax Revenue to now be classified as State Aid. Act 388 replaces local property taxes for owner occupied homes with an additional one cent sales tax collected by the State of South Carolina. Act 388 did not, however, affect property taxes collected for debt service purposes. Overall, the School District’s net position for governmental activities decreased by approximately $8.1 million, primarily related to debt issued for continued capital projects.

2012 2013 2012 2013 2012 2013RevenuesProgram Revenues:

Charges for Services 1,488,007$ 454,724$ 3,273,672$ 3,408,127$ 4,761,679$ 3,862,851$

Operating Grants 112,961,004 121,897,536 7,140,736 7,398,346 120,101,740 129,295,882

General Revenue:

Property Taxes 116,024,048 125,673,689 116,024,048 125,673,689

Federal and State Aid 49,724,092 51,422,890 49,724,092 51,422,890

Investment Earnings 394,001 2,650,981 12,854 25,371 406,855 2,676,352

Other 138,048 2,200,928 30,990 63,430 169,038 2,264,358

Total Revenues 280,729,200 304,300,748 10,458,252 10,895,274 291,187,452 315,196,022

Program ExpensesInstruction 155,352,131 166,236,699 155,352,131 166,236,699

Supporting Services 107,127,665 114,697,049 107,127,665 114,697,049

Community Services 1,429,158 1,534,120 1,429,158 1,534,120

Intergovernmental 1,017,972 - 1,017,972

Interest and Fiscal Charges 21,154,095 28,822,086 21,154,095 28,822,086

Pupil Activities 105,400 105,400 -

Loss on Sale of Capital Assets 105,127 105,127 -

Food Service 10,707,175 11,392,466 10,707,175 11,392,466

Total Program Expenses 285,273,576 312,307,926 10,707,175 11,392,466 295,980,751 323,700,392

Increase in Net Position before Transfers (4,544,376) (8,007,178) (248,923) (497,192) (4,793,299) (8,504,370)

Transfers (403,001) (136,761) 403,001 70,521 - (66,240)

Change in Net Position (4,947,377) (8,143,939) 154,078 (426,671) (4,793,299) (8,570,610)

Net Position, Beginning of Year 167,687,416 162,740,039 5,557,037 5,711,115 173,244,453 168,451,154

Net Position, End of Year 162,740,039$ 154,596,100$ 5,711,115$ 5,284,444$ 168,451,154$ 159,880,544$

Changes in Net Position

Governmental Activities Business-Type Activities Totals

18

The following charts show the breakdown of revenues supporting governmental Activities and the net cost of services related to governmental activities for the year ended June 30, 2013:

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

Instruction Support Services Community Services Interest & OtherCharges

Intergovernmental

Governmental Activities-Net Cost of ServicesFor the fiscal year ended June 30, 2013

Revenues Expenses

Restricted Grants and Contributions

40.2%

Property Taxes for General Operating

26.3%

Property Taxes for Debt Service15.0%

Unrestricted Grants and Contributions

16.9%

Investment Earnings0.9%

Charges for Services0.1%

Other0.7%

Revenues Supporting Governmental Activities-By Sourcefor the fiscal year ended June 30, 2013

19

Business-type Activities – Net position for the School District’s business-type activities decreased by $426k. Program revenues increased by $392k, or 3.7%, and program expenses increased by $685k, or 6.4%. The increase in revenue is largely due to an increase in USDA federal reimbursements of approximately $304k, as well as an increase in student population and a shifting free and reduced population. The expenditure increase is as a result of a district-wide initiative to improve cafeteria equipment by the replacement of equipment and small wares.

FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S MAJOR FUNDS

As noted earlier, the School District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The fund financial statements focus on individual parts of the School District and not on the School District as a whole, and report the School District’s operations in more detail than the government-wide statements.

Governmental funds – The focus of the School District's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the School District's financing requirements. In particular, unassigned fund balance may serve as a useful measure of the School District's net resources available for spending at the end of the fiscal year.

As the School District completed the year, its governmental funds reported a combined fund balance of $168 million, an increase of close to $40.2 million, due primarily to the bond proceeds issued to fund capital projects which include construction of a new elementary school and a new high school scheduled which opened in August 2013. Unassigned fund balance totaling $33.6 million, is available for spending at the School District's discretion. There was $15.8 million restricted for debt service and $118.6 million restricted for capital projects. Note 11 of the notes to the basic financial statements provides detail on fund balances for the governmental funds.

The General Fund is the principal operating fund of the School District. The fund balance in the General Fund increased by more than $3.6 million, or by 12% over the prior year, due primarily to an increase in the millage rate and increases in assessed value beyond projected increases. These changes generated an additional $2.4 million in local ad valorem tax dollars over the prior year. State revenue also increased in excess of $8.8 million, which represents a 7.2% increase in State funding. The Debt Service Fund balance showed an increase of $2.5 million from the prior year due to a 5 mill increase. The Capital Projects Funds showed a fund balance increase of $34 million, due primarily to the bond proceeds for debt issued to fund the ongoing construction previously mentioned.

Proprietary Fund – The Proprietary Fund statements provide the same type of information found in the government-wide statements, except the information is provided in more detail. This fund is adjusted for internal service balances in the government-wide statements. The School District maintains two proprietary fund types-enterprise fund, to account for all food service activities, and an internal service fund to account for self-funded workers compensation benefits.

Net position in the Enterprise Fund decreased by $426k, due primarily to investments in small equipment not meeting the defined capitalization policy. Net assets in the Internal Service Fund decreased by over $1 million due primarily to the district utilizing the excess fund balance to fund claims during the fiscal year.

20

BUDGETARY HIGHLIGHTS

The most significant budgeted fund is the General Fund. The FY 2012-2013 general fund budget was built with a base student cost of $2,012. The general fund budget included increases for operational costs for opening a new high school. The budget added 37 additional classroom teachers, as well as funding to continue district support of the National Board Certification program. Some other significant highlights of initiatives funded in the 2012-2013 budget included:

A 2% pay increase for all employees Increased Staff Development Programs, including opportunities for support staff members The addition of 2 Technology Integration Trainers and an IT Technician The addition of 8 Social Workers and 5 Interventionists The addition of 3 Maintenance Technicians

The School District had no adjustments to the total budget for FY 2012-2013.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets - The School District’s investment in capital assets for governmental activities at June 30, 2013 exceeded $547.6 million net of accumulated depreciation. This investment in assets includes land, buildings, improvements other than buildings, construction in progress, and equipment. The total net increase exceeded $4.9 million. The increase in capital assets is due in large part to ongoing construction projects mentioned above. See the relevant disclosures in the notes to the basic financial statements (Note 5) for more detailed information on capital asset activity.

The table below shows the School District’s capital assets, net of accumulated depreciation, as of June 30, 2013 and 2012:

Long-term Debt - At June 30, 2013, the School District had total general obligation debt outstanding of over $509.4 million. This is an increase of $37.8 million over the last fiscal year. The School District had two bond sales during FY 2013 and a partial refunding of two existing issues. The bond sale related to the referendum was in April 2013, representing the final issuance made as a result of a 67% voter approval of the November 2008 bond referendum totaling $306 million. The referendum was approved to fund the construction of three new elementary schools, one new middle school, and one new high school, as well as renovations to several existing schools. One elementary school opened in August 2010, one in August 2012, and the third is scheduled to open in August 2014. The middle school opened in August 2012, and the high school opened in August 2013.

2012 2013 2012 2013 2012 2013

Land 19,259,050$ 20,921,697$ $ $ 19,259,050$ 20,921,697$

Buildings and improvements 570,313,285 635,242,884 570,313,285 635,242,884

Equipment 22,190,774 23,538,411 4,280,946 4,335,694 26,471,720 27,874,105

Construction in progress 70,358,613 25,287,163 70,358,613 25,287,163

Total before accumulated depreciation 682,121,722 704,990,155 4,280,946 4,335,694 686,402,668 709,325,849

Less accumulated depreciation 139,479,228 157,368,036 1,483,895 1,806,784 140,963,123 159,174,820

Net capital assets 542,642,494$ 547,622,119$ 2,797,051$ 2,528,910$ 545,439,545$ 550,151,029$

Governmental Activities TotalBusiness-Type Activities

21

The State of South Carolina’s constitution allows school districts to issue up to 8% of the assessed value in General Obligation Bonds, without voter approval. The School District issued $10,950,000 million in general obligation bonds that will be used for major maintenance on the School District’s existing facilities, along with technology expansion and/or replacement at our schools. The repayment of these bonds will take place over a five year period. These bonds mature in FY 2018.

The School District maintains a "Aa1" rating from Moody's; a AA- rating from Standard & Poor’s, and an AA- from Fitch Ratings for general obligation debt. State statutes currently limit the amount of general obligation debt a school district may issue to 8 percent of its total assessed valuation. As of June 30, 2013, the remaining debt margin available to the School District is approximately $13.9 million. Other long-term obligations include unamortized bond premiums and accrued compensated absences. Additional information on the School District's long-term debt and other long-term liabilities can be found in Note 8 of the notes to the basic financial statements.

ECONOMIC FACTORS AND NEXT YEAR'S BUDGET

The School District, a suburban residential and shopping area located northeast of Columbia, the state capital and most populous city in South Carolina, is one of the fastest growing areas in the state. The Columbia MSA has an estimated population of 783,000. State and federal payrolls are major sources of employment and income and economic stability. Fort Jackson, the United States Army’s largest training installation is located within the school district. Private employers such as the state headquarters for Blue Cross/Blue Shield of South Carolina and The Village at Sandhills, one of the largest shopping complexes in the southeast, contribute to a diverse and stable economy.

Many factors were considered by the School District's administration during the process of developing the FY 2013-2014 budget. The School District's top two budget goals are to provide a quality education for all students through student engagement and to manage its growth of an estimated 500+ students annually. These matters were considered when adopting the budget for FY 2013-2014. The School District received a millage increase of 8.98 mills, which was less than the amount of the legally imposed cap as allowed under Act 388 equal of 12 mills. In addition, the State increased funding by increasing the base student cost to $2,101 which will result in an approximate 7.7% increase in State funding from the Education Finance Act.

Governmental Activities-General Long-Term Debt-2013

General Obligation Bonds

Unamortized Bond Premiums

Long Term Notes Payable

Accrued Compensated Absences

22

CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, investors and creditors with a general overview of the School District's finances and to demonstrate the School District's accountability for the resources it receives. If you have questions about this report or need additional information, contact the Division of Business Services, Richland School District Two, 6831 Brookfield Road, Columbia, South Carolina 29206-2205 (Telephone number 803-738-3293).

23

BASIC FINANCIAL STATEMENTS

24

EXHIBIT 1

RICHLAND COUNTY SCHOOL DISTRICT TWOSTATEMENT OF NET POSITION

JUNE 30, 2013

COMPONENT UNIT

Governmental Business-type CHARTER HIGHActivities Activities Totals SCHOOL

ASSETS

Cash and Investments $ 105,464,975 $ 2,810,773 $ 108,275,748 $Deposits with Richland County Treasurer 89,429,348 89,429,348 Taxes Receivable, Net of Allowances 1,018,161 1,018,161 Accrued Intergovernmental Revenue Receivable 924,169 924,169 Due From:

Federal Agencies 3,340,838 720,576 4,061,414 State Department of Education 2,626,098 2,626,098 Other Governmental Units 224,286 Internal Balances (328,626) 328,626 Other Receivables 422,646 72,904 495,550

Inventories 110,666 32,191 142,857 Unamortized Bond Issuance Costs 1,055,630 1,055,630 Capital assets:

Land 20,921,697 20,921,697 Construction in Progress 25,287,163 25,287,163 Buildings 433,198,495 433,198,495 Building Additions and Improvements 202,044,389 202,044,389 Furniture and Equipment 19,458,388 4,335,694 23,794,082 Vehicles 4,080,023 4,080,023 Less: Accumulated Depreciation (157,368,036) (1,806,784) (159,174,820)

TOTAL ASSETS 751,686,024 6,493,980 758,180,004 224,286

LIABILITIES

Accounts Payable and Accrued Expenses 7,461,195 1,000,609 8,461,804 384 Retainage Payable 831,999 831,999 Due to State Department of Education 41,386 41,386 Accrued Salaries and Related Liabilities 16,390,688 16,390,688 Unearned Revenues 8,289,827 108,255 8,398,082 Non-current Liabilities:

Due within One Year 41,068,285 16,441 41,084,726 Due in more than One Year 523,006,544 84,231 523,090,775

TOTAL LIABILITIES 597,089,924 1,209,536 598,299,460 384

NET POSITION

Net Investment in Capital Assets 109,733,690 2,528,910 112,262,600 Restricted For:

Debt Service 12,163,874 12,163,874 Special Projects 16,506 16,506

Unrestricted 32,682,030 2,755,534 35,437,564 223,902

TOTAL NET POSITION $ 154,596,100 $ 5,284,444 $ 159,880,544 $ 223,902

The notes to the financial statements are an integral part of this statement.See accompanying independent auditors' report.

PRIMARY GOVERNMENT

25

EXHIBIT 2RICHLAND COUNTY SCHOOL DISTRICT TWO

STATEMENT OF ACTIVITIESFOR THE YEAR ENDED JUNE 30, 2013

FUNCTIONS/PROGRAMS Operating Charges for Grants and Governmental Business-Type Component

PRIMARY GOVERNMENT: Expenses Services Contributions Activities Activities Total UnitGovernmental Activities:

Instruction $ 166,236,699 $ 294,035 $ 99,736,037 $ (66,206,627) $ $ (66,206,627) $Supporting Services 114,581,107 160,689 22,161,499 (92,258,919) (92,258,919)Community Services 1,534,120 (1,534,120) (1,534,120) Intergovernmental 1,200,154 (1,200,154) (1,200,154)Interest and Other Charges 28,822,086 (28,822,086) (28,822,086)

Total Governmental Activities 312,374,166 454,724 121,897,536 (190,021,906) (190,021,906) -

Business-Type Activities:Food Services 11,392,466 3,408,127 7,398,346 (585,993) (585,993)

Total Business-Type Activities 11,392,466 3,408,127 7,398,346 (585,993) (585,993) -

TOTAL - PRIMARY GOVERNMENT 323,766,632 3,862,851 129,295,882 (190,021,906) (585,993) (190,607,899) -

Component Units:Charter School 589,113 608,440 19,327

General Revenues:Property Taxes Levied for General Purposes 80,052,909 80,052,909 Property Taxes Levied for Debt Service 45,620,780 45,620,780 Miscellaneous 2,200,928 60,572 2,261,500 Unrestricted Investment Earnings 2,650,981 25,371 2,676,352 Federal and State aid not restricted for specific purpose 51,422,890 51,422,890 Gain (Loss) on Sale of Assets 2,858 2,858

Transfers (70,521) 70,521 -

Total General Revenues and Transfers 181,877,967 159,322 182,037,289 -

CHANGE IN NET POSITION (8,143,939) (426,671) (8,570,610) 19,327

NET POSITION - Beginning of Year 162,740,039 5,711,115 168,451,154 204,575

NET POSITION - End of Year $ 154,596,100 $ 5,284,444 $ 159,880,544 $ 223,902


CHANGE IN NET POSITIONPROGRAM REVENUESNET (EXPENSE) REVENUE AND

26

EXHIBIT 3RICHLAND COUNTY SCHOOL DISTRICT TWOBALANCE SHEET - GOVERNMENTAL FUNDS

JUNE 30, 2013

SPECIAL SPECIAL TOTAL REVENUE - REVENUE - CAPITAL GOVERNMENTAL

GENERAL SPECIAL PROJECTS EIA DEBT SERVICE PROJECTS FUNDSASSETS

Cash and Investments $ 49,475,103 $ 991,999 $ $ 4,026,569 $ 49,518,167 $ 104,011,838 Deposits with Richland County Treasurer 5,026,342 11,318,677 73,084,329 89,429,348 Taxes Receivable, Net of Allowances 724,016 294,145 1,018,161 Due From Federal Agencies 3,340,838 3,340,838 Due From State Department of Education 328,988 454,064 1,843,046 2,626,098 Due From:

Special Revenue - Special Projects 2,797,391 2,797,391 General Fund 4,238,671 251,740 865,059 5,355,470

Other Receivables 27,496 395,150 422,646 Inventories 110,666 110,666

TOTAL ASSETS 58,490,002 5,182,051 6,081,717 15,891,131 123,467,555 209,112,456

LIABILITIES

Accounts Payable 1,992,180 80,683 68,615 3,967,475 6,108,953 Retainage Payable 831,999 831,999 Due To:

Special Revenue - EIA 4,238,671 4,238,671 Enterprise Funds 689,173 689,173 Debt Service 251,740 251,740 Capital Projects 865,059 865,059 General Fund 2,797,391 2,797,391

Due To State 30,640 3,260 7,486 41,386 Accrued Salaries and Related Liabilities 16,390,688 16,390,688 Deferred Revenue 247,586 2,284,211 6,005,616 74,494 8,611,907

TOTAL LIABILITIES 24,705,737 5,165,545 6,081,717 74,494 4,799,474 40,826,967

FUND BALANCES

Fund BalancesNonspendable 110,666 110,666 Restricted 16,506 15,816,637 118,668,081 134,501,224 Unassigned 33,673,599 - 33,673,599

TOTAL FUND BALANCES 33,784,265 16,506 - 15,816,637 118,668,081 168,285,489

TOTAL LIABILITIES AND FUND BALANCES $ 58,490,002 $ 5,182,051 $ 6,081,717 $ 15,891,131 $ 123,467,555 $ 209,112,456


27


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2013

TOTAL FUND BALANCES - GOVERNMENTAL FUNDS 168,285,489$

Amounts reported for the governmental activities in the Statement of Net Positionare different because of the following:

Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. The cost of the assets were $704,990,155 and the accumulated depreciation was $157,368,036. 547,622,119

The internal service fund is used to fund insurance and risk management of the School District.The assets and liabilities of the internal service fund are included with governmental activities. 461,442

Property Taxes Receivable will be collected this year, but are not available soon enough to pay forthe current period's expenditures, and therefore are deferred in the governmental funds.Deferred Property Tax at year end consists of:

General Fund 247,586$ Debt Service Fund 74,494 322,080

Accrued interest on bonds payable in governmental funds is not due and payable in the current period and is therefore, not reported as a liability in the funds. (4,651,426)

Bond issuance costs are amortized over the life of the bonds in the government-wide statements,but are expenditures in the year they are incurred for the governmental funds. The bondissuance costs of $1,401,384 are shown net of accumulated amortization expense of $345,754. 1,055,630

Unearned bond premiums are deferred in the statement of net assets. The net premiums of $60,430,811have been amortized by $14,141,384 with a remaining unamortized net bond discount. (46,289,511)

Rebatable interest receivable on Build America Bonds in governmental funds is not a currentfinancial resource in the current period and is, therefore, not reported as an asset in the funds. 924,169

Long-term liabilities, including bonds payable, are not due or payable in the currentperiod and therefore are not reported as liabilities in the funds. Long-term liabilitiesat year-end consisted of:

General Obligation Bonds Payable 509,435,000$ Long-Term Note Payable 48,446 Accrued Compensated Absences 3,650,446 (513,133,892)

TOTAL NET POSITION - GOVERNMENTAL FUNDS 154,596,100$


28


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS

FOR THE YEAR ENDED JUNE 30, 2013

SPECIAL SPECIAL TOTAL REVENUE - REVENUE - CAPITAL GOVERNMENTAL

GENERAL SPECIAL PROJECTS EIA DEBT SERVICE PROJECTS FUNDSREVENUES

Local Sources $ 82,550,970 $ 1,428,632 $ $ 47,653,300 $ 331,957 $ 131,964,859 State Sources 130,792,786 2,765,232 20,114,400 3,526,357 157,198,775 Federal Sources 588,271 12,671,954 13,260,225 Intergovernmental Sources 103,669 508,625 612,294

TOTAL REVENUES ALL SOURCES 214,035,696 17,374,443 20,114,400 51,179,657 331,957 303,036,153

EXPENDITURES

Current:Instruction 130,717,999 8,306,128 11,916,895 150,941,022 Support Services 80,114,173 8,567,201 2,983,323 12,835,234 104,499,931 Community Services 1,467,853 66,267 1,534,120

Intergovernmental 936,387 212,737 51,030 1,200,154Capital Outlay 74,634 102,067 77,506 28,548,631 28,802,838 Debt Service:

Principal Retirement 56,500,000 56,500,000 Interest and Fiscal Charges 26,128,127 26,128,127

TOTAL EXPENDITURES 213,311,046 17,254,400 14,977,724 82,628,127 41,434,895 369,606,192

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 724,650 120,043 5,136,676 (31,448,470) (41,102,938) (66,570,039)

OTHER FINANCING SOURCES (USES)

Issuance of Debt 33,599,487 73,237,059 106,836,546 Sale of Capital Assets 2,594 2,594 Transfers In 6,080,950 345,300 349,532 2,407,732 9,183,514 Transfers Out (3,187,097) (464,788) (5,136,676) (465,474) (9,254,035)

TOTAL OTHER FINANCING SOURCES (USES) 2,896,447 (119,488) (5,136,676) 33,949,019 75,179,317 106,768,619

NET CHANGE IN FUND BALANCE 3,621,097 555 - 2,500,549 34,076,379 40,198,580

FUND BALANCES, Beginning of Year 30,163,168 15,951 - 13,316,088 84,591,702 128,086,909

FUND BALANCES, End of Year $ 33,784,265 $ 16,506 $ - $ 15,816,637 $ 118,668,081 $ 168,285,489

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

.

29


RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES ANDCHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES


TOTAL NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS $ 40,198,580

Amounts reported for governmental activities in the statement of activities are different because of the following:

Property tax revenues not considered current financial resources are deferred in the governmental funds but are not in the statement of activities. Deferred taxes receivable decreased by $322,080 over the year ended June 30, 2013. 322,080

Rebatable interest receivable on Build America Bonds in governmental funds is not a currentfinancial resource in the current period and is, therefore, not reported as an asset in the funds. 924,158

Capital outlays are reported in governmental funds as expenditures. However, in the statement of activities,the cost of those assets is allocated over their useful lives as depreciation expense. This is the amount by which capitalized outlays of $22,868,433 exceeded depreciation expense and noncapital expenditures of $17,888,808. 4,979,625

Repayment of long-term liabilities, such as Bonds and Notes Payable and Capital Leases is an expenditure in thegovernmental funds, but merely reduces liabilities in the statement of net assets. 56,551,029

Amortization of bond premiums as income over the terms of the associated bonds. The amount recognized as incomefor the year ended June 30, 2013 is $ 830,606. 830,606

Amortization of bond issuance cost as expense over the terms of the associated bonds. The amount recognized as incomefor the year ended June 30, 2013 is $ 6,673. 6,673

The internal service fund is used to fund insurance and risk management of the School District. The net changein net position of the internal service fund is reported with governmental activities. (1,051,481)

Bonds proceeds and loans provide current financial resources to governmental funds; however, issuing debt increaseslong-term liabilities in the statement of net position. In the current period, proceeds were received from general obligationbonds issued. (107,011,546)

Interest on long-term debt in the statement of activities differs from the governmental funds because governmentalfunds recognize interest expense only when it is paid. In the statement of net assets, interest expense is recognized as it accrues. Accrued interest payable decreased for the year ended June 30, 2013 by $ 23,984. (3,348,182)

The cost of compensated employee absences is recognized in the governmental funds only when actually paid in cash. However, in the statement of net assets, the expense is recorded when the employees earn the benefits. The totalliability for compensated absences decreased by $ 38,170 during this fiscal year. (545,491)

TOTAL CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ (8,143,949)


30

EXHIBIT 7

BUSINESS-TYPE ACTIVITIES

GOVERNMENTAL ACTIVITIES

ASSETSENTERPRISE FUND- INTERNAL SERVICE

Current Assets FOOD SERVICES FUNDCash and Investments $ 2,810,773 $ 1,453,137 Accounts Receivable 72,904 Due from General Fund 328,626 360,547 Due from Other Government Units 720,576 Inventory 32,191

Total Current Assets 3,965,070 1,813,684

Noncurrent AssetsMachinery and Equipment 4,335,694 Less: Accumulated Depreciation (1,806,784)

Total Noncurrent Assets 2,528,910 -

TOTAL ASSETS 6,493,980 1,813,684

LIABILITIES

Current LiabilitiesAccounts Payable 1,000,609 103,010 Claims Payable 1,249,232 Deferred Revenue 108,255 Accrued Compensated Absences 100,672

Total Current Liabilities 1,209,536 1,352,242

Long-Term LiabilitiesAccrued Compensated Absences

Total Long-Term Liabilities

TOTAL LIABILITIES 1,209,536 1,352,242

NET POSITION

Invested in Capital Assets 2,797,051 Unrestricted 2,487,393 461,442

TOTAL NET POSITION $ 5,284,444 $ 461,442


RICHLAND COUNTY SCHOOL DISTRICT TWOSTATEMENT OF NET POSITION

PROPRIETARY FUNDSJUNE 30, 2013

31

EXHIBIT 8



ENTERPRISE FUND- INTERNAL SERVICEFOOD SERVICES FUND

OPERATING REVENUESMeal Sales $ 3,370,407 $Other Operating Revenue 37,720

Total Operating Revenues 3,408,127 -

OPERATING EXPENSESFood Costs 784,352 Salaries and Benefits 2,232,461 842,114 Depreciation 371,176 Purchased Services 7,763,794 Supplies 19,542 8,686 Other 221,141 219,027

Total Operating Expenses 11,392,466 1,069,827

Operating Income (Loss) (7,984,339) (1,069,827)

NON-OPERATING REVENUE (EXPENSES)Commodities Received from USDA 628,755 USDA Reimbursements 6,769,591 Interest 25,371 18,346 Gain or (loss) on Sale of Capital Assets 2,858 Other 60,572

Total Non-Operating Revenues 7,487,147 18,346

Income (loss) Before Transfers (497,192) (1,051,481)

TRANSFERS IN (OUT)Transfer from Capital Projects Fund 115,942 Transfer from General Fund 434,064 Transfer (to) General Fund (479,485)

Total Transfers 70,521 -

CHANGE IN NET POSITION (426,671) (1,051,481)

TOTAL NET POSITION - Beginning of Year 5,711,115 1,512,923

TOTAL NET POSITION - End of Year $ 5,284,444 $ 461,442


RICHLAND COUNTY SCHOOL DISTRICT TWOSTATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

PROPRIETARY FUNDSFOR THE YEAR ENDED JUNE 30, 2013

32

EXHIBIT 9



ENTERPRISE FUND- INTERNAL SERVICEFOOD SERVICES FUND

CASH FLOWS FROM OPERATING ACTIVITIESCash Received from Participants $ 4,671,056 $Cash Received from Insurance Proceeds 316,159 Cash Paid to Employees for Services (2,142,978) (842,114) Cash Paid to Suppliers of Goods and Services (7,110,537) (452,889)

Net Cash Provided (Used) by Operating Activities (4,582,459) (978,844)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESTransfers from/(to) Other Funds 70,521 Other Federal/State Reimbursements 6,830,163

Net Cash Provided (Used) by Noncapital Financing Activities 6,900,684 -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESProceeds from Sale of Capital Assets 2,858 Acquisition of Equipment (103,035)

Net Cash Provided(Used) in Capital and Related Financing Activities (100,177) -

CASH FLOWS FROM INVESTING ACTIVITIESInterest on Investments 25,371 18,346

Net Cash Provided by Investing Activities 25,371 18,346

Net Increase (Decrease) in Cash and Cash Equivalents 2,243,419 (960,498)

Cash and Cash Equivalents - July 1, 2012 567,354 2,413,635

Cash and Cash Equivalents - June 30, 2013 $ 2,810,773 $ 1,453,137

RECONCILIATION OF NET OPERATING INCOME (LOSS) TONET CASH PROVIDED (USED) BY OPERATING ACTIVITIES

Net Operating Income (Loss) (7,984,339) (1,069,827) Adjustments to Reconcile Net Operating Income (Loss)

to Net Cash Provided (Used) by Operating ActivitiesCommodities Received from USDA 628,755 Depreciation 371,176

Changes in Assets and Liabilities:Decrease (Increase) in Receivables and Due from Others 1,262,929 316,159 Decrease (Increase) in Inventories 92,747 Increase (Decrease) in Accounts Payable and Due to Others 956,790 (225,176) Increase (Decrease) in Accrued Salaries & Benefits 89,483

Net Cash Provided (Used) by Operating Activities $ (4,582,459) $ (978,844)

NONCASH TRANSACTIONSNon-cash donation - USDA Commodities Received and Used $ 628,755


RICHLAND COUNTY SCHOOL DISTRICT TWOSTATEMENT OF CASH FLOWS

PROPRIETARY FUNDSFOR THE YEAR ENDED JUNE 30, 2013

33


STATEMENT OF FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDJUNE 30, 2013

ASSETS

Cash and Investments $ 4,149,118 Accounts Receivable 22,227

TOTAL ASSETS 4,171,345

LIABILITIES

Accounts Payable 86,366 Payable to Other District Funds 236,419 Due to Pupil Activities 3,848,560

TOTAL LIABILITIES $ 4,171,345


34

RICHLAND COUNTY SCHOOL DISTRICT TWO NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2013

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Richland County School District Two (the School District) is governed by a seven member elected Board of Trustees (the Board). The School District is located in suburban Columbia, SC, in the Northeast section of Richland County. The School District provides a broad range of general and specialized elementary and secondary educational services for students in pre-school through grade twelve, and derives its local revenue from the tax base in these areas. In addition, the School District receives funding from the State of South Carolina and the United States Federal Government and must comply with the related requirements of these funding source entities.

The financial statements of the School District have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.

A. Reporting Entity

The School District’s financial statements include all funds over which the Board is considered to be financially accountable. The School District receives funding from local, state and federal governmental sources and must comply with the requirements of these funding source entities. Richland County School District Two is the lowest level of government which has financial accountability and control over all activities related to public school education in the School District. The School District is not included in any other governmental “reporting entity” as defined in GASB Statement No. 14, since members of the School Board of Trustees are elected by the public and since members have decision making authority, the power to designate management, the ability to significantly influence operations, and have primary accountability for fiscal matters. The School District invests funds and receives property tax revenues through its relationship with Richland County.

The School District follows GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, which provides additional guidance to determine whether certain organizations (such as parent-teacher organizations, foundations and athletic booster clubs) for which the School District is not financially accountable should be reported as component units based on the nature and significance of their relationship with the primary government. The School District has determined that there are no support entities that meet the requirements for inclusion as a discretely presented component unit under GASB No. 39.

Discretely Presented Component Unit: The component unit column in the basic financial statements includes the financial data of the School District’s component unit, the Richland Two Charter High School (“the Charter School”). This unit is reported in a separate column to emphasize that it is legally separate from the School District. The Charter School operates under a charter granted by the School District and is considered, under South Carolina law, to be a public school and part of the School District. It is administered and governed by its annually elected governing body. The South Carolina State Department of Education ("SDE") regulations require that charter schools be discretely presented in the basic financial statements, but blended with the School District balances in the supplementary schedules. If this presentation format were followed, the amounts reported as revenues, expenditures and changes in fund balances for the General Fund and Special Revenue Funds in the supplementary schedules would not agree to the amounts reported as revenues, expenditures and changes in fund balances for the General Fund and Special Revenue Funds in the basic financial statements. The School District has not prepared the supplemental schedules in accordance with the SDE requirements as the School District does not believe that this presentation is consistent with accounting principles generally accepted in the United States of America ("GAAP").

The Charter School is fiscally dependent on the School District and because the nature and significance of the relationship between the Charter School and District, the exclusion of the Charter School would cause the School District’s financial statements to be incomplete. The Charter School financial statements are included in the School District’s basic financial statements.

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B. Measurement Focus, Basis of Accounting and Financial Statement Presentation

The statements of the School District are presented as follows:

Government-Wide Financial Statements - The Statement of Net Position and the Statement of Activities report information about the School District as a whole. Government-wide 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 when a liability is incurred, regardless of the timing of the cash flows. These statements include the financial activities of the School District, except for the fiduciary funds. The effect of inter-fund activity has been eliminated from the statements in the consolidation process, with the exception of the inter-fund services provided and used. Governmental activities, which normally are supported by taxes and intergovernmental revenues, and other non-exchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The government-wide statement of activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the School District and for each function or program of the School District’s governmental activities. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include; 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Revenues, including taxes, which are not classified as program revenues are presented as general revenues of the School District with certain limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self-financing or draws from the general revenues of the School District.

Fund Financial Statements - Fund financial statements report detailed information about the School District. The focus of governmental and enterprise fund financial statements is on major funds rather than reporting funds by type. The governmental fund financial statements are reported using the flow of current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Because the government–wide financial statements and the fund financial statements are prepared using a different measurement focus, the financial section of the statements includes a reconciliation with brief explanations to better identify the relationship between the government-wide and governmental fund statements.

Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government.

Fund financial statements report detailed information about the School District. The financial statements for governmental funds are the balance sheet, which generally includes only current assets and current liabilities, and a statement of revenues, expenditures and changes in fund balance, which reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financial uses) of current financial resources.

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The focus of governmental and enterprise fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. Non-major funds are aggregated and presented in a single column. Fiduciary funds are reported by fund type. All proprietary fund types are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the statement of net position. The statement of changes in fund net position presents increases (i.e., revenues) and decreases (i.e., expenses) in net total assets.

Cash Flow Statement - The statement of cash flows provides information about how the School District finances and meets cash flow needs of its proprietary activities. For purposes of the statement of cash flows, the proprietary fund considers all highly liquid investments with an original maturity of three months or less to be cash equivalents

FUND ACCOUNTING

As outlined above, the accounts of the School District are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The various funds of the School District are grouped into the categories governmental, proprietary and fiduciary.

The School District has the following major funds and fund types:

Governmental Fund Types

Governmental funds focus on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets and liabilities is separated as fund balance. The following are the School District’s major governmental funds:

General Fund - The General Fund is a budgeted fund and serves as the primary operating fund of the School District. The School District uses this fund to account for expenditures principally for administration, instruction, pupil services, operations and maintenance of plant and related fixed charges. It accounts for all revenues and expenditures of the School District except those required to be accounted for in another fund. All general tax revenues and other receipts that are not allocated by law or contractual agreement to other funds are accounted for in the General Fund. General operating expenditures and the capital improvement costs that are not paid through other funds are paid from the General Fund.

Special Revenue Funds - Special Revenue Funds are used to account for specific revenue sources (other than debt service or major capital projects) that require separate accounting because of legal or regulatory provisions or administrative action. The School District has two Special Revenue Funds:

1. The Special Projects Fund, used to account for financial resources provided by federal,state, local projects and grants. Budgets are prepared on a per project basis, generallywith approval of the funding source. These budgets are not a part of the formal budgetprocess approved by the board of trustees.

2. The Education Improvement Act (EIA) Fund, used to account for the revenue from theSouth Carolina Education Improvement Act of 1984, which is legally required by the stateto be accounted for as a specific revenue source. Budgets are prepared on a per projectbasis. These budgets are not part of the formal budget process approved by the board oftrustees.

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Capital Projects Fund – used to account for financial resources to be used for site acquisitions, construction of major capital facilities, equipment and renovation of all major capital facilities.

Debt Service Fund - used to account for annual payments of principal and interest on long-term general obligation debt and related costs.

Proprietary Fund Types

Proprietary funds are accounted for based on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations.

The Enterprise Fund is used to account for operations that are financed and operated in a manner similar to private business enterprises – where the intent of the School District is that periodic determination of revenues earned, expenses incurred, and net income is necessary for management accountability. The Food Service Fund is the School District’s only enterprise fund and is also used to account for the United States Department of Agriculture’s (USDA) approved school breakfast and lunch programs.

The principal operating revenues of the Enterprise Fund – Food Service include charges to students and teachers for breakfast, lunch and special sales. Operating expenses for the fund includes cost of sales, administrative expenses and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

Internal Service Fund is used to account for the financing of goods and services provided by one department or agency to other departments or agencies of the School District. When services are rendered, charges are made to the users and revenue is accumulated in the Internal Services Fund to cover costs of operations. The Worker’s Compensation Fund is the School District’s only Internal Service Fund. This fund accounts for the insurance and risk management services of the School District and services provided are on a cost reimbursement basis. The assets and related liabilities for the Internal Service Fund are included in the governmental activities column on the government-wide Statement of Net position.

Fiduciary Fund Types

Fiduciary funds are used to account for assets held by the government in a trustee capacity or as an agent on behalf of others, and include trust funds and agency funds. The Agency Fund is the only Fiduciary Fund type maintained by the School District. The Fund accounts for the receipt and disbursement of monies to and from student activity organizations, and/or on behalf of outside parties. These funds have no equity and do not include revenues and expenditures for general operation of the School District. The Agency Fund is custodial in nature and does not involve measurement of results of operation.

BASIS OF ACCOUNTING

Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Propriety and fiduciary funds also use the accrual basis of accounting.

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Revenues resulting from exchange transactions, in which each party gives and receives essentially equal value, are recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. Available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the School District, available means expected to be received within sixty days of the fiscal year-end.

The School District follows GASB Statement No. 33, Accounting and Financial Reporting for Non-Exchange Transactions to account for non-exchange revenues. Non-exchange transactions, in which the School District receives value without directly giving equal value in return, include property taxes, grants, entitlements and donations. On an accrual basis, property tax revenues are recognized in the fiscal year for which they are appropriated by the County. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted, matching requirements, in which the School District must provide local resources to be used for a specified purpose, and expenditures requirements, in which the resources are provided to the School District on a reimbursement basis. On a modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized. Under the modified accrual basis, the following revenue sources are considered to be both measurable and available at fiscal year-end; property taxes, interest, tuition, grants, student fees and rentals.

Deferred Revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Delinquent property taxes and property taxes for which there is an enforceable legal claim as of June 30, 2013, but which have not met the revenue recognition criteria, have been recorded as deferred revenue. Grants and entitlements received before revenue recognition requirements are met are also recorded as deferred revenue. On governmental fund financial statements, receivables that will not be collected within the available period have also been reported as deferred revenue.

The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation, are not recognized in governmental funds.

C. Assets, Liabilities and Equity

Cash and Investments – South Carolina statutes authorize investments in certificates of deposits, savings accounts, repurchase agreements, the State Treasurer’s Local Government Investment Pool (invested in government guaranteed securities), general obligations of the State of South Carolina or any of its political units, obligations of the U.S. Government and government agencies unconditionally guaranteed by the U.S. Government. Investments are recorded at fair value.

The Richland County Treasurer invests in authorized instruments on behalf of the School District. The Richland County Treasurer invests School District and other entity funds on a pooled basis with the Treasurer of the State of South Carolina. The State Treasurer invests in certificates of deposit, insured savings accounts, repurchase agreements, obligations of the United States Government and government agencies guaranteed by the United States Government.

The School District considers all highly liquid investments (including restricted assets) with original maturities of three months or less when purchased and investments in the South Carolina Pooled Investment Fund (“Pool”) to be cash equivalents.

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Receivables and Payables - Transactions between funds that represent reimbursement arrangements outstanding at the end of the year are referred to as “due from other funds” or “due to other funds” on the fund financial statements. These amounts are eliminated in the governmental and business-type activities columns of the statement of net position, except for the net residual amounts due between governmental and business-type activities, which are presented as “internal balances”.All trade and property tax receivables are shown net of an allowance for uncollectible amounts.

Inventories - Under the system of accounting for inventory, materials and supplies are carried in an inventory account at cost on the first-in, first-out method of accounting and are subsequently charged to expense when used. Inventories consist of purchased food, supplies, commodities received from the United States Department of Agriculture as of June 30, but not consumed. The value of unused commodities on hand at year-end is recorded at market value as provided by the United States Department of Agriculture.

Prepaid Items - Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements using the consumption method. A current asset for the prepaid amount is recorded at the time of the purchase and an expenditure/expense is reported in the year consumed.

Capital Assets - General capital assets are those assets not specifically related to activities reported in the enterprise fund. These assets generally result from expenditures in the governmental funds. These assets are reported in the governmental activities column of the government-wide statement of net position but are not reported in the fund financial statements. Capital assets utilized by the enterprise fund are reported in both the business-type activities column of the government-wide statement of net position and in the respective fund financial statements.

All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and retirements during the year. Donated capital assets are recorded at their fair market values as of the date received. The district maintains a capitalization threshold of $5,000. Management may elect to include certain homogeneous asset categories with individual assets less than $5,000 as composite groups for financial reporting purposes. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extent the life of the asset’s life are not capitalized. For purposes of reporting state and federal funds, small equipment items that may not be capitalized are still categorized as capital outlays in the supporting schedules. The School District does not maintain any infrastructure. Improvements to existing capital assets are capitalized; however, the cost of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are expensed.

In the enterprise fund, assets acquired or constructed by grants and share revenues externally restricted for capital acquisitions and construction are reported as revenue in the period received in accordance with Governmental Accounting Standards Board Statement No. 33.

All reported capital assets, except land and construction in progress, are depreciated. Construction projects begin being depreciated once they are complete, at which time the complete costs of the project are transferred to the appropriate capital asset category. Improvements are depreciated over the remaining useful lives of the related capital assets. Depreciation is computed using the straight-line method over the following useful lives:

Governmental Business-Type Activities Activities

Description Estimated Lives Estimated Lives

Buildings and Improvements 20-39 years N/A Furniture and Equipment 5 years 12 years Vehicles 5 years N/A

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Compensated Absences – Compensated absences are payments to employees for accumulated vacation and sick leave. Vacation leave is earned by employees up to a maximum of ten days. The School District’s policy at fiscal year-end is to allow twelve-month employees to carry over five days, which are lost if not used by the following December 31. When an employee with over fifteen years of service retires or otherwise terminates the School District pays out all unused accrued annual and sick leave days at the current substitute rate of pay. Employees can accrue up to fifty-seven sick leave days.

All vacation pay is accrued when incurred in the government-wide financial statements. Liabilities for compensated absences are reported as fund liabilities when amounts are due and payable rather than to the extent that they will be paid with current, expendable and available financial resources. In the proprietary funds, compensated absences are recorded as an expense and liability of the fund as the benefits accrue to employees.

Accrued Liabilities and Long-term Obligations - All payables, accrued liabilities and long-term obligations are reported on the governmental fund financial statements regardless of whether they will be liquidated with current resources. However, claims and judgments, the non-current portion of capital leases, contractually required pension contributions and special termination benefits, and compensated absences that will be paid from governmental funds are reported as a liability in the fund financial statements only to the extent that they will be paid with current expendable, available, financial resources. In general, payments made within sixty days after year-end are considered to have been made with current available financial resources. Bonds and other long-term obligations that will be paid from governmental funds are not recognized as a liability in the fund financial statements until due.

For governmental funds, bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as other financing sources net of the applicable premium or discount. Issuance costs, even if withheld from actual net proceeds received, are reported as debt service expenditures.

Fund Balances, Equity and Net Position – The School District reports fund balance in accordance with GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. This Statement defines five classifications of governmental fund balances: non-spendable, restricted, committed, assigned and unassigned. Where applicable, these classifications are presented on the face of the governmental fund balance sheet. The School District’s highest level of decision-making authority is the Board of Trustees.

The School District classifies fund balances as follows: Non-spendable – This includes amounts that inherently cannot be spent either because it is not in spendable form (i.e. prepaid items, inventories, etc.) or because of legal or contractual requirements (i.e. principal amount of resources that are required to remain intact.)

Restricted – This includes amounts that have constraints placed on the use of resources externally imposed by creditors, grantors, or contributors.

Committed – This includes amounts that have constraints for specific purposes by the School District itself, using its highest level of decision-making authority, which as noted above is the Board of Trustees. Constraints must remain in place unless removed in the same manner as imposed and must take place no later than the close of the fiscal year.

Assigned – This includes amounts that the School District intends to use for specific purposes that are neither considered restricted nor committed and these assignments are made before the report issuance date. The intent to assign these balances can be expressed by the Board of Trustees or by an official or body to which the Board of Trustees delegates the authority.

Unassigned – This includes amounts that do not qualify to be accounted for or reported in any of the other fund balance categories. These amounts are available for any purpose and the General Fund should be the only fund that reports a positive unassigned fund balance.

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The School District applies restricted resources when expenditures are incurred for the purposes for which both restricted and unrestricted Net Positions are available. The School District applies assigned, then unassigned fund balance. Committed resources can only be applied if the Board of Trustees takes formal action to release resources for incurring expenditures.

Net Position

Net position represents assets plus deferred outflows of resources less liabilities less deferred inflows of resources. Net investment in capital assets consists of capital assets reduced by accumulated depreciation and the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Outstanding debt, that has not been spent, is included in the same net position component as the unspent proceeds. Net position is reported as restricted when there are limitations imposed on their use either through the enabling legislation or through external restrictions imposed by creditors, grantors or laws or regulations of other governments.

The School District applies restricted resources when an expense is incurred for the purposes for which both restricted and unrestricted net position is available.

Inter-fund Activity – Transfers between governmental and business-type activities on the government-wide statements are reported in the same manner as general revenues. Transfers between governmental funds and enterprise funds and enterprise balances are eliminated.

Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are reported as inter-fund transfers. Inter-fund transfers are reported as other financial sources/uses in governmental funds and other non-operating revenues/expenses in proprietary funds. Repayments from funds responsible for particular expenditures/expense to the funds that initially paid for them are not presented on the financial statements.

Operating Revenue and Expenses – Operating revenues are those revenues that are generated directly from the primary activity of the proprietary funds. For the School District, those revenues consist of sales of breakfasts and lunches to students, teachers and visitors.

Use of Accounting Estimates - The preparation of financial statements in accordance with accounting principles generally accepted in the United State of America requires the School District’s management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Budgetary Accounting

The Board of Trustees adopts a legal annual appropriated budget for the general fund revenues and expenditures on the modified accrual basis of accounting which is consistent with accounting principles generally accepted in the United States of America each fiscal year. The budget is prepared, controlled, and amended at the revenue and expenditure object level. The Superintendent and/or Chief Financial Officer may authorize line item transfers in the general fund budget that are subject to final review by the Board. Revisions to the budget were made throughout the year at the legal level of budgetary control. During the fiscal year, no additional appropriations to the general fund budget were adopted. Unexpended appropriations lapse at fiscal year-end. Expenditures may not legally exceed budgeted appropriations at the fund level unless, in a supplementary action , the Board approves an increase or decrease to the fund or the School District’s “per pupil” state allotment changes whereby management can increase or decrease expenditures to match the change in state appropriations. Supplemental budget appropriations are made by the Board for expenditures exceeding total appropriations within the legal level of control.

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Special Revenue Fund budgets are developed and controlled in conformance with the specific requirements of each grant or funding agency. These budgets are not legally adopted by the School Board. Both General and Special Revenue Fund budgets are used as a management control device during the year.

The following procedures are followed in establishing the budgetary data reflected in the financial statements:

1. The initial step in the budget development process is the adoption of budget priorities by theBoard of Trustees.

2. The Financial Services Office develops revenue projections based on enrollment projections anddata received from the State Department of Education.

3. Input is obtained from District stakeholders and compiled by Administration.4. The Superintendent submits a budget to the Board for approval.5. The Board recommends a budget to County Council around April.6. The County Council has three readings on the budget and a public hearing.7. After approval by County Council, the Board approves a final budget.

The Administration has discretionary authority to make transfers between appropriation accounts. The budget amounts in the financial statements are as amended by Administration. No supplemental appropriations were necessary during the year; however, the Board of Trustees approved to utilize $2,407,732 of General Fund Fund Balance to fund additional capital improvements to several schools during the school year.

Encumbrances

The appropriations of the general fund of the School District lapse at June 30 each year and the outstanding purchase orders, contracts, and other commitments must be renewed. Therefore, there are no restrictions or assignments of the fund balances at year-end for encumbrances.

Issued and Adopted Accounting Pronouncements

In November 2010, the GASB issued Statement 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34. GASB 61 provides additional criteria for classifying entities as component units to better assess the accountability of elected officials by ensuring that the financial reporting entity includes only organizations for which the elected officials are financially accountable or that are determined by the government to be misleading to exclude. This statement is effective for periods beginning after June 15, 2012. The adoption of GASB 61 does not have any impact on the School District’s financial statements as it is implemented for this fiscal year.

In December 2010, the GASB issued Statement 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. GASB 62 incorporates into the GASB's authoritative literature certain accounting and financial reporting guidance that is included in the following pronouncements issued on or before November 30, 1989, which does not conflict with or contradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins of the American Institute of Certified Public Accountants' (AICPA) Committee on Accounting Procedure. This statement is effective for periods beginning after December 15, 2011. The adoption of GASB 62 does not have any impact on the School District’s financial statements as it is implemented for this fiscal year.

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In June 2011, the GASB issued Statement 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. GASB 63 provides guidance for reporting deferred outflows of resources, deferred inflows of resources, and net position in a statement of financial position and related disclosures. The statement of net assets is renamed the statement of net position and includes four components assets, deferred outflows of resources, liabilities and deferred inflows of resources. The provisions of this Statement are effective for financial statements for periods beginning after December 15, 2011. The School District does not have any items that are classified as deferred outflows or deferred inflows of resources. All statements and schedules have been changed to show net position where applicable for this fiscal year.

2. CASH AND INVESTMENTS

At June 30, 2013 the carrying amount of the School District’s deposits and investments was $108,275,748 and the bank balance was $114,966,974.

Custodial Credit Risk for Deposits: Custodial credit risk for deposits is the risk that, in the event of a bank failure, the School District’s deposits might not be recovered. The School District does not have a deposit policy for custodial credit risk but follows the investment policy statues of the State of South Carolina. As of June 30, 2013, none of the School District’s bank balances of $26,671,840, which had a carrying value of $19,920,970 were exposed to custodial credit risk.

As of June 30, 2013, the School District had the following investments:

Investment Type Average Maturities Credit Rating Fair Value

First Citizens Investment Portfolio Various Unrated $ 5,000,000 SC Local Government Investment Pool Various Unrated 79,328,209 US Bank – Morgan Stanley GIC 9/1/2027 Unrated 4,026,569

Total Investments $ 88,354,778

Interest Rate Risk: The School District’s Interest Rate Risk policy states that to address interest rate risk (i.e., fair value losses arising from increasing interest rates), the district will not invest in maturities exceeding 24 months.

Custodial Credit Risk for Investments: In the case of deposits, custodial credit risk is the risk that in the event of a bank failure, the School District’s deposits may not be returned to it. Custodial credit risk for investments is the risk that, in the event of a failure, the government will not be able to recover the value of its investments or collateral securities that are in possession of an outside party. The School District’s investment policy operates in conformance with federal, state and other legal requirements, as outlined in the Code of Laws, State of South Carolina, Section 59-69-215. To address the risk that the School District’s deposits will not be returned, the School District will only use instruments that are collateralized by third parties or insured by the Federal Deposit Insurance Corporation. As of June 30, 2013, all District deposits were collateralized with securities held by the pledging financial institution’s trust department or its agent, and in the School District’s name or insured by the Federal Deposit Insurance Corporation. Management believes there is no significant custodial credit risk associated with these deposits. Information was not available regarding the custodial credit risk of deposits with the Richland County Treasurer of $89,429,348.

South Carolina statutes authorize investments in certificates of deposits, savings accounts, repurchase agreements, the State Treasurer’s Local Government Investment Pool, obligations of the U.S. Government and government agencies unconditionally guaranteed by the U.S. Government. The School District has no policy that would further restrict these investment choices.

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The SC Local Government Investment Pools is not rated. Further information may be obtained from the Investment Pool by writing to the Office of the State Treasurer, Local Government Investment Pool, Post Office Box 11778, Columbia, South Carolina, 29211.

Concentration of Credit Risk for Investments: The School District places no limit on the amount it may invest in any one issuer. Investments issued or explicitly guaranteed by the U.S. Government and investments in mutual funds and external investment pools and other pooled investments are exempt from concentration of credit risk disclosures.

The following table reconciles the carrying amount of deposits and investments to the amounts listed in the financial statements for all fund types:

Basic Financial Statements Notes to Financials

Cash and Investments: Carrying Amount of

Governmental Funds $104,011,838 Deposits: $ 19,920,970

Internal Service Fund 1,453,157

Enterprise Fund 2,810,773 Fair Value of Investments:

88,354,778

$108,275,748 $ 108,275,748

3. PROPERTY TAXES AND OTHER RECEIVABLES

Property taxes are levied, collected and distributed by Richland County (the County) on real and personal properties owned on the preceding December 31 of each fiscal year ended June 30. Liens are attached to the property at the time the taxes are levied, which usually occurs in November of each year. These taxes are due without penalty through January 15. Penalties are added to taxes when paid after January 15 depending on the period of time the tax is delinquent. Property taxes are levied and billed on an assessed value of over $538 million at tax rates of 282.5 mills for the general fund and 85.0 mills for the debt service fund.

Current year real and personal property taxes become delinquent on April 1. The levy date for motor vehicle taxes is the first day of the month in which the motor vehicle license expires. These taxes are due by the last day of the same month. Total tax collections, which include delinquent tax collections and penalties, equaled approximately 94.71% of the current tax levy for the year ended June 30, 2013.

South Carolina Code Section 12-37-251(A) provides a property tax exemption for property classified pursuant to Section 12-43-220(C) (homestead exemption) from property taxes levied for other than bonded indebtedness and payments pursuant to lease purchase agreements for capital construction. The exemption applies against millage imposed for school operations and the amount of fair market value of the homestead that is exempt from such millage must be set by the Department of Revenue and Taxation based on the amount available in the State Property Tax Relief Fund.

Taxes receivable in the government funds, including general fund and debt service fund, are $1,018,161 net of allowances for uncollectible at June 30, 2013.

Governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned.

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JUNE 30, 2013

At June 30, 2013, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows:

Intergovernmental receivables at June 30, 2013, consisted of intergovernmental grants, reimbursements and interest. All intergovernmental receivables are considered collectible in full due to the stable condition of State programs and the current year guarantee of federal funds.

A summary of the principal items of intergovernmental receivables follows:

Governmental Activities: General Fund $ 328,988 Special Revenue – Special Projects 3,794,902 Special Revenue – EIA 1,843,046

Total Governmental Activities $ 5,966,936

4. DUE FROM STATE DEPARTMENT OF EDUCATION AND FEDERAL AGENCIES

The Due from State Department of Education and Federal Agencies represents amounts due for state and federal revenues that had been earned as of June 30, 2013, but had not been received as of June 30, 2013.

Special DebtGeneral Revenue Service

Fund Funds Fund TotalDeferred Property Taxes $ 247,586 $ $ 74,494 $ 322,080Unearned Revenue 8,289,827 8,289,827

Total $ 247,586 $ 8,289,827 $ 74,494 $ 8,611,907

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JUNE 30, 2013

5. CAPITAL ASSETS

A summary of changes in capital assets for the School District is as follows:

Governmental ActivitiesBalance as of July 1, 2012

AdditionsDisposals/ Transfers

Balance as of June 30, 2013

Non-depreciable Assets:

Land $ 19,259,050 $ 1,662,647 $ $ 20,921,697

Construction in Progress 70,358,613 15,021,060 (60,092,510) 25,287,163

Total Non-depreciable 89,617,663 16,683,707 (60,092,510) 46,208,860

Depreciable Assets:

Buildings and Improvements 570,313,285 4,837,089 60,092,510 635,242,884

Furniture & Equipment 22,190,774 1,347,637 23,538,411

Total Depreciable Assets 592,504,059 6,184,726 60,092,510 658,781,295

Total All Assets 682,121,722 22,868,433 - 704,990,155

Less: Accumulated Depreciation

Buildings (122,838,014) (15,682,836) (138,520,850)

Furniture & Equipment (16,641,214) (2,205,972) (18,847,186)

Total Accumulated Depreciation (139,479,228) (17,888,808) - (157,368,036)

Governmental Activities Capital Assets, Net

$ 542,642,494 $ 4,979,625 $ - $ 547,622,119

Business-Type ActvitiesBalance as of July 1, 2012

Additions DisposalsBalance as of June 30, 2013

Equipment $ 4,280,946 $ 141,989 $ (87,241) $ 4,335,694

Less: Accumulated Depreciation (1,483,895) (371,176) 48,287 (1,806,784)

Business-type Activities Capital Assets, Net

$ 2,797,051 $ (229,187) $ (38,954) $ 2,528,910

Depreciation expense was charged to functions/programs of the primary government as follows:

Governmental Activities: Instruction $ 10,733,285

Supporting Services 7,155,523 Total Depreciation Expense – governmental activities 17,888,808

Business-type Activities: Food Service 371,176 Total Depreciation Expense – Business type activities $ 371,176

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JUNE 30, 2013

6. INTER-FUND RECEIVABLES AND PAYABLES

Inter-fund balances at June 30, 2013 consisted of the following individual fund receivables and payables:

Fund Receivables PayablesGeneral Fund: Due from Special Revenue – Special Projects $ 2,797,391 $ Due to Special Revenue - EIA 4,238,671 Due to Enterprise Fund – Food Service 328,626 Due to Enterprise Fund – Internal Service Fund 360,547 Due to Debt Service 251,740 Due to Capital Projects Fund 865,059

Total 2,410,619 6,044,643

Special Revenue – Special Projects Due to General Fund 2,797,391

Special Revenue – EIA Due from General Fund 4,238,671

Debt Service Due from General Fund 251,740

Capital Projects Due from General Fund 865,059

Enterprise Fund – Food Service Due from General Fund 328,626

Enterprise Fund – Internal Service Fund Due from General Fund 360,547

Totals $ 8,455,262 $ 8,455,262

All cash activities, excluding Food Service, are recorded in the General Fund, and as a result, receivables and payables exist at year end that are either due to or due from the General Fund to/from other funds. Other inter-fund balances include Special Revenue payments not received from the State Department of Education until after the fiscal year end, fringe amounts paid by the General Fund for Food Service, indirect cost transfers adjustments made at year end and adjustments made at year end for Taxes receivable for Debt Service, and building project costs.

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JUNE 30, 2013

7. TRANSFERS IN AND OUT

Transfers between the various funds of the School District are as follows:

Fund Transfers In Transfers Out

General Fund: Special Revenue – Special Projects $ 464,789 $ 345,300 Special Revenue – EIA 5,136,676 Enterprise Fund – Food Service 479,485 434,064 Building Fund 2,407,732

Total 6,080,950 3,187,096

Special Revenue – EIA General Fund 5,136,676

Special Revenue – Special Projects General Fund 345,300 464,789

Enterprise Fund – Food Service General Fund 434,064 479,485

Capital Projects Fund

115,942

Debt Service Fund Building Fund 349,532

Capital Projects Fund General Fund 2,407,732 Debt Service Fund 349,532 Enterprise Fund –Food Service 115,942

Total All Funds $ 9,733,520 $ 9,733,520

During the 2012-2013 fiscal year transfers were made from Special Revenue-Special Project Funds to the general fund for indirect cost and transfers from the General Fund into Special Revenue – Special Projects reflect amounts allocated as discretionary funds for student activities and athletic programs. Annual transfers are done from the Special Revenue – EIA fund into the General fund for State revenues provided for teacher salary increases and employer fringe contributions. Amounts were transferred from the Food Service fund for indirect costs paid to the General fund and a transfer was made from the General Fund into the Food Service Fund to allocate state fringe benefits reimbursement funds applicable to the Food Service Program. Transfers between Debt Service funds and Capital Project funds are related to amounts paid for completion of construction program and costs of issuance incurred during the year. The Board also approved a transfer from the General Fund to the Building Fund in order to utilize general fund reserves to offset additional costs of several capital projects.

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JUNE 30, 2013

8. LONG TERM OBLIGATIONS

The following summarizes the changes in long-term debt obligations for the year ended June 30, 2013:

Principal Principal AmountsOutstanding Outstanding Due in

Governmental Activities July 1, 2012 Additions Reductions June 30, 2013 One Year

General Obligation Bonds:December 1, 2002 $ 3,000,000 (3,000,000) $March 1, 2005 5,000,000 (5,000,000) February 1, 2006 39,000,000 (24,000,000) 15,000,000 5,000,000 June 1, 2007 30,000,000 (15,000,000) 15,000,000 4,000,000 February 14, 2008 28,500,000 (2,500,000) 26,000,000 3,000,000 February 18, 2009 70,000,000 (1,000,000) 69,000,000 1,000,000 June 11, 2009 16,320,000 (1,615,000) 14,705,000 1,595,000 May 25, 2010 (A) 16,125,000 (1,075,000) 15,050,000 1,075,000 May 25, 2010 (B) 2,000,000 (2,000,000) - September 8, 2010 83,235,000 83,235,000 7,130,000 September 8, 2010 42,620,000 42,620,000 November 9, 2010 56,570,000 56,570,000 1,000,000 June 8, 2011 9,260,000 (300,000) 8,960,000 3,000,000 October 5, 2011 60,000,000 60,000,000 500,000 May 15, 2012 10,000,000 (1,000,000) 9,000,000 2,000,000 December 5, 2012 28,215,000 (10,000) 28,205,000 April 24, 2013 10,950,000 10,950,000 April 25, 2013 55,140,000 55,140,000 5,000

Total General Obligation Bonds 471,630,000 94,305,000 (56,500,000) 509,435,000 29,305,000

Long-Term Notes Payable 99,475 (51,029) 48,446 48,446 Unamortized Bond Premiums 34,413,572 12,706,546 (830,606) 46,289,512 6,287,006 Accrued Compensated Absences 3,104,954 1,205,879 (660,388) 3,650,445 776,407

Total $ 509,248,001 108,217,425 (58,042,023) 559,423,403 $ 36,416,859

Business-Type Activities:

Accrued Compensated Absences $ 70,528 41,662 (11,518) 100,672 $ 16,441

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JUNE 30, 2013

General Obligations

General obligations primarily consist of obligations related to general obligation bonds as of June 30, 2013. The following table outlines the debt outstanding at June 30, 2013:

Date of Interest Payment Original Outstanding at

Issue Issue Rates Dates Maturity Issue June 30,2013

2006A February 1, 2006 4.0%-5.0% Oct./Apr. 2020 55,000,000$ 15,000,000$ 2007B June 1, 2007 4.00%-5.00% Nov./May 2021 35,000,000 15,000,000

2008A February 14, 2008 3.13%-5.00% Feb./Aug. 2023 30,525,000 26,000,000

2009A February 14, 2008 5.00% Nov./May 2023 70,000,000 69,000,000

2009C June 11, 2009 3.00%-5.00% Sept./Mar. 2021 18,500,000 14,705,000

2010A/QSCB May 25, 2010 .75%-5.20% May/Nov 2027 18,235,000 15,050,000

2010C* September 8, 2010 5.00% May/Nov 2024 83,260,000 83,235,000 2010D/QSCB September 8, 2010 1.00%-5.00% Mar/Sept 2028 42,625,000 42,620,000

2010E/QSCB November 9, 2010 .50%-5.25% May/Nov 2028 60,000,000 56,570,000

2011 (8%) June 8, 2011 2.00% May/Nov 2016 9,260,000 8,960,000

2011B October 5, 2011 3%-5% May/Nov 2031 60,000,000 60,000,000

2012A May 15, 2012 2%-4% May/Nov 2017 10,000,000 9,000,000

2012B (Refunding) December 5, 2012 3%-5% Oct./Apr. 2021 28,215,000 28,205,000

2013A April 24, 2013 4.0%-5.0% Nov./May 2018 10,950,000 10,950,000 2013B April 25, 2013 2.9%-5% Nov./May 2033 55,140,000 55,140,000

586,710,000$ 509,435,000$

General obligations at June 30, 2013 consist of primarily general obligation bonds payable. Of these, the Series 2010A, 2010D and 2010E were issued as Taxable Qualified School Construction Bonds under the provisions of the State of South Carolina Federal Education Tax-Credit Bond Implementation Act of 2009. A refundable tax credit must be applied for each time an interest payment is due for these bonds. These issues provided federal subsidy for future interest payments due each year for the life of the bonds. However, due to sequestration by the United States Government, the School District is projecting a 7-9% reduction to that subsidy for subsequent fiscal years.

The annual requirements to amortize the General Obligation Bonds outstanding at June 30, 2013, including interest payments of $141,829,103 are as follows:

Fiscal Year Ending June 30 Principal Interest Total

2014 $ 29,305,000 $ 22,749,681 $ 52,054,681 2015 33,750,000 21,605,645 55,355,645

2016 36,400,000 20,229,988 56,629,988

2017 41,990,000 18,720,288 60,710,288

2018 40,995,000 16,848,812 57,843,812

2019-2023 183,800,000 57,314,159 241,114,159

2024-2028 110,370,000 23,947,263 134,317,263

2029-2033 32,825,000 3,106,000 35,931,000

Total $ 509,435,000 $ 184,521,836 $ 693,956,836

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JUNE 30, 2013

The School District has satisfied all sinking fund requirements. There is an annual tax millage, currently 85.0 mills, to repay this General Obligation debt. Details on the Bonds Payable are presented as schedules.

Partial Refunding of Debt

In December of 2012, the School District did a partial refunding of the 2006A and 2007B in the amount of $29 million. This refunding resulted in a net economic savings of approximately $1.29 million.

Compensated Absences

The School District estimates that the compensated absences amount to be considered as the current portion due within one year to be $776,407.

9. RETIREMENT BENEFITS

Richland County School District Two contributes to the South Carolina Retirement System. The South Carolina Retirement System is a cost-sharing multi-employer defined pension plan administered by the South Carolina Public Employee Benefit Authority ("PEBA"). The South Carolina Retirement System offers retirement and disability benefits, cost of living adjustments on an ad-hoc basis, life insurance benefits and survivor benefits. The Plan's provisions are established under Title 9 of the SC Code of Laws.

A Comprehensive Annual Financial Report containing financial statements and required supplementary information for the South Carolina Retirement System is issued and publicly available at the website www.retirement.sc.gov<http://www.retirement.sc.gov> or a copy may be obtained by writing the South Carolina Retirement System, PO Box 11960, Columbia, SC 29211-1960.

Both employees and employers are required to contribute to the Plan under authority of Title 9 of the S.C. Code of Laws. Plan members are required to contribute 7.0% of their annual compensation and the School District is required to contribute at an actuarially determined rate. The current rate is 15.15% of the total member’s annual compensation; included is the cost to provide group life insurance benefits for the plan participants at the rate of .15% and the cost to provide retiree health and dental insurance benefits for the plan participants at the rate of 4.55%.

The School District’s contributions to the Plan for the years ending June 30, 2013, 2012, and 2011 were $23,847,100, $20,631,842, and $19,861,878, respectively. The School District’s contributions are at the actuarially required contribution rates.

Post-Employment Benefits

By Federal law (Public Law 99-272, Title X) the School District is required to offer a continuation of health coverage at group rates to employees and their dependents whose coverage would otherwise end. Depending on the circumstances of the employee’s coverage loss, the employee or dependents can extend the health care plan benefits for 18 months to three years. The plan costs are paid by the employee or dependents based on 100% COBRA premium rates. Retired employees are eligible for health insurance coverage under a state plan whereby the retiree continues to be responsible for their portion of insurance premiums. Pursuant to the state plan, the School District pays 4.55% of payroll covered by the S.C. Retirement System to fund retiree health insurance. The School District paid approximately $7.2 million, on covered payroll for the year ended June 30, 2013. The School District has no other financial or administrative responsibility for retiree health care costs.

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JUNE 30, 2013

10. RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The School District participates with other school districts in the South Carolina School Boards Insurance Trust/Workers’ Compensation Trust Fund (SCSBIT/WCTF). The SCBIT/WCTF is a public entity risk pool currently operating as a common risk management and insurance program for 91 member school districts. The School District pays an annual premium for worker’s compensation insurance coverage based upon the total payroll of the School District each plan year. The SCBIT/WCTF is self-sustaining through member premium and deficiencies can be charged back to the member districts should a fund deficit arise.

The School District participates in the South Carolina Boards Insurance Trust Fund for all other risks of loss. The School District’s insurance coverage for all types of risk has not been significantly reduced from coverage in the prior year. The amounts of any District settlement have not exceeded the insurance coverage for the previous three fiscal years.

11. FUND BALANCE CLASSIFICATIONS

The following table summarizes the amounts classified for specific fund balance classifications other than unassigned fund balance, which is only reportable in the General Fund:

Non-spendable Fund Balance: General Fund - Inventories $ 110,666

Restricted Fund Balance: Restricted for Special Revenue 16,506Restricted for Debt Service 15,816,637Restricted for Capital Projects 118,668,081

Unassigned Fund Balance 33,673,599

Total Governmental Fund Balance $ 168,285,489

12. CONTINGENT LIABILITIES

Litigation

Various claims and lawsuits are pending against the School District. Although the outcomes of these lawsuits are not presently determinable, it is the opinion of the School District’s counsel that resolution of these matters will not have a material adverse effect on the financial condition of the School District

Grants

The School District participates in a number of federally assisted grant programs. These programs are subject to program compliance audits by the grantors or their representatives. The amount of program expenditures which may be disallowed by the granting agencies cannot be determined at this time although the School District expects such amounts, if any, to be immaterial.

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JUNE 30, 2013

13. COMMITMENTS The School District had capital projects still in process as of June 30, 2013 related to Elementary #19 and District Stadium #3 in various stages. The School District has entered into contracts for these projects totaling over $28 million, of which over $19.3 million had not been expended as of June 30, 2013. The School District has entered into operating leases, generally for office machines, which are cancelable within one year. Payments under such leases totaled approximately $546k for the year ended June 30, 2013. The School District anticipates annual payments to approximate this amount on an on-going basis. 14. SUBSEQUENT EVENTS As required by the Subsequent Events Topic of the FASB Accounting Standards Codification, the School District has considered subsequent events through the date of the auditors’ report, in preparing the financial statements and notes hereto.

54

REQUIRED SUPPLEMENTARY INFORMATION

55

SCHEDULE A

GENERAL FUND

The general fund, also referred to as the "operating fund," is the basicbudgetary fund of the School District. It is used to record all operatingrevenues and expenditures for the educational and support programs ofthe School District and for limited capital outlays. The appropriations andthe anticipated revenue sources originate in the School District's operatingbudget. Any unassigned fund balance may be appropriated to supportoperating expenditures in subsequent years.

56

Schedule A-1LEXINGTON COUNTY SCHOOL DISTRICT TWO

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES


Original Final Variance toBudget Budget Actual Final Budget

REVENUES:Local Sources $ 79,697,638 $ 79,697,639 $ 82,550,970 $ 2,853,331 Intergovernmental Sources 110,000 110,000 103,669 (6,331) State Sources 127,933,742 127,933,741 130,792,786 2,859,045 Federal Sources 700,000 700,000 588,271 (111,729)

Total Revenues - All Sources 208,441,380 208,441,380 214,035,696 5,594,316

EXPENDITURES:Current:

Instruction 128,178,553 128,228,938 130,756,286 (2,527,348) Support Services 83,554,971 83,650,843 80,150,520 3,500,323 Community Services 1,523,887 1,402,630 1,467,853 (65,223) Other Charges 250,645 225,645 936,387 (710,742)

Total Expenditures 213,508,056 213,508,056 213,311,046 197,010

Excess Revenues Over (Under) Expenditures (5,066,676) (5,066,676) 724,650 5,791,326

OTHER FINANCING SOURCES (USES):

Sale of Fixed Assets - - 2,594 2,594 Transfers In 5,586,676 5,586,676 6,080,950 494,274 Transfers Out (520,000) (520,000) (3,187,097) (2,667,097)

Total Other Financing Sources (Uses) 5,066,676 5,066,676 2,896,447 (2,170,229)

Excess / (Deficiency) of Revenues and Other FinancingSources Over Expenditures and Other Financing (Uses) $ - $ - 3,621,097 $ 3,621,097

Fund Balance, Beginning of Year 30,163,168

Fund Balance, End of Year $ 33,784,265


BUDGET TO ACTUALGENERAL FUND

57

SCHEDULE A-2RICHLAND COUNTY SCHOOL DISTRICT TWO

GENERAL FUNDSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -

REVISED BUDGET AND ACTUALFOR THE YEAR ENDED JUNE 30, 2013

REVISEDBUDGET ACTUAL VARIANCE

REVENUES

1000 Revenues from Local Sources

1200 Revenue from Local Governmental Units Other Than LEAs:1210 Ad Valorem Taxes - Including Delinquents $ 76,971,357 $ 76,232,616 $ (738,741) 1240 Penalties and Interest on Taxes - 859,781 859,781 1280 Revenue in Lieu of Taxes (Independent and Dependent) - 2,712,926 2,712,926

1300 Tuition:1310 Tuition from Patrons for Regular Day School 50,000 55,126 5,126 1320 Tuition from Other LEAs for Regular Day School 50,000 15,648 (34,352) 1350 Tuition from Patrons for Summer School 64,134 84,611 20,477 1360 Tuition from Other LEAs for Summer School - 138,650 138,650

1500 Earnings on Investments:1510 Interest on Investments 300,000 223,959 (76,041)

1900 Other Revenue from Local Sources:1910 Rentals 200,000 160,689 (39,311) 1950 Refund of Prior Years Expenditures - 19,714 19,714 1990 Miscellaneous Local Revenue

1993 Receipt of Insurance Proceeds - 19,671 19,671 1999 Revenue from Other Local Sources 2,062,148 2,027,579 (34,569)

Total Local Sources 79,697,639 82,550,970 2,853,331

2000 Intergovernmental Revenue

2200 Payments from Public Charter School 110,000 103,669 (6,331)

Total Intergovernmental Revenues 110,000 103,669 (6,331)

3000 Revenue from State Sources

3130 Special Programs:3131 Handicapped Transportation - 65,191 65,191 3132 Home Schooling - 1,509 1,509

3160 School Bus Driver Salary 695,241 641,123 (54,118) 3161 EAA Bus Driver Salary and Fringe - 883,295 883,295 3162 Transportation Workers' Compensation - 65,474 65,474 3180 Fringe Benefits Employer Contributions 23,270,686 23,989,710 719,024 3181 Retiree Insurance 4,129,658 4,881,472 751,814 3199 Other Restricted State Revenue - 2,454 2,454

3300 Education Finance Act3310 Full-Time Programs:

3311 Kindergarten 3,624,818 3,880,133 255,315 3312 Primary 10,140,841 10,420,643 279,802 3313 Elementary 15,523,562 14,931,823 (591,739) 3314 High School 6,696,560 5,863,328 (833,232) 3315 Trainable Mentally Handicapped 340,773 269,762 (71,011) 3316 Speech Handicapped (Part-time Program) 3,043,530 2,947,403 (96,127) 3317 Homebound 145,207 229,236 84,029

3320 Part-Time Programs:3321 Emotionally Handicapped 520,811 500,560 (20,251) 3322 Educable Mentally Handicapped 201,450 244,884 43,434 3323 Learning Disabilities 3,623,938 3,938,850 314,912 3324 Hearing Handicapped 254,550 254,714 164 3325 Visually Handicapped 53,380 82,140 28,760 3326 Orthopedically Handicapped 82,505 78,234 (4,271) 3327 Vocational 8,080,431 8,882,882 802,451

3330 Other EFA Programs:3331 Autism 1,164,236 1,353,873 189,637

58





(Continued)

3800 State Revenue in Lieu of Taxes:3810 Reimbursement for Local Residential Property Tax Relief $ 8,759,333 $ 8,759,333 $ - 3820 Homestead Exemption 1,894,248 1,894,248 - 3825 Reimbursement for Property Tax Relief - Tier 3 35,687,983 35,728,752 40,769

3900 Other State Revenue:3999 Revenue from Other State Sources - 1,760 1,760

Total State Sources 127,933,741 130,792,786 2,859,045

4000 Revenue from Federal Sources4100 Federally Impacted Areas

4110 Maintenance and Operations 700,000 588,135 (111,865) 4900 Other Federal Sources

4999 Revenue from Other Federal Sources - 136 136

Total Federal Sources 700,000 588,271 (111,729)

TOTAL REVENUES ALL SOURCES 208,441,380 214,035,696 5,594,316

EXPENDITURES

100 Instruction:110 General Instruction:

111 Kindergarten Programs:100 Salaries 6,412,327 6,204,168 208,159 140 Terminal Leave 10,006 (10,006) 200 Employee Benefits 2,039,334 1,995,732 43,602 400 Supplies and Materials 20,685 18,802 1,883

112 Primary Programs:100 Salaries 22,373,003 21,313,601 1,059,402 140 Terminal Leave 35,838 12,033 23,805 200 Employee Benefits 7,304,346 6,567,364 736,982 300 Purchased Services 193,027 238,448 (45,421) 400 Supplies and Materials 756,078 565,163 190,915 500 Capital Outlay 7,135 4,639 2,496

113 Elementary Programs:100 Salaries 29,209,777 30,696,360 (1,486,583) 140 Terminal Leave 11,314 77,297 (65,983) 200 Employee Benefits 9,529,267 9,519,458 9,809 300 Purchased Services 98,238 129,971 (31,733) 400 Supplies and Materials 756,933 512,122 244,811 500 Capital Outlay - 8,247 (8,247) 600 Other Objects 1,100 1,023 77

114 High School Programs:100 Salaries 21,012,657 24,261,330 (3,248,673) 140 Terminal Leave 15,467 84,542 (69,075) 200 Employee Benefits 7,734,102 7,347,289 386,813 300 Purchased Services 193,132 205,802 (12,670) 400 Supplies and Materials 778,033 807,530 (29,497) 500 Capital Outlay 11,000 11,000 -

115 Vocational Programs:100 Salaries 1,371,186 1,128,384 242,802 200 Employee Benefits 406,243 343,338 62,905 300 Purchased Services 31,153 30,692 461 400 Supplies and Materials 184,819 155,391 29,428 500 Capital Outlay 5,000 14,401 (9,401)

116 Career and Technology Education (Vocational Programs) - Middle School100 Salaries 246,749 164,632 82,117 200 Employee Benefits 84,554 51,637 32,917

59





(Continued)

118 Montessori Programs100 Salaries $ 402,727 $ 624,372 $ (221,645) 200 Employee Benefits 247,314 228,150 19,164 400 Supplies and Materials 82,121 12,344 69,777

120 Exceptional Programs:121 Educable Mentally Handicapped:

100 Salaries 1,403,687 1,451,603 (47,916) 200 Employee Benefits 501,456 482,067 19,389 300 Purchased Services - 7,271 (7,271)

122 Trainable Mentally Handicapped:100 Salaries 1,135,380 1,028,559 106,821 200 Employee Benefits 422,400 356,672 65,728 300 Purchased Services 12,890 249 12,641 400 Supplies and Materials 2,580 - 2,580 500 Capital Outlay 4,830 - 4,830

123 Orthopedically Handicapped:100 Salaries 16,729 17,269 (540) 200 Employee Benefits 11,334 11,083 251 300 Purchased Services 4,120 - 4,120

124 Visually Handicapped:100 Salaries 68,658 67,092 1,566 200 Employee Benefits 23,978 24,107 (129) 300 Purchased Services - 752 (752)

125 Hearing Handicapped:100 Salaries 304,731 266,166 38,565 200 Employee Benefits 92,599 81,835 10,764 300 Purchased Services - 18,086 (18,086) 400 Supplies and Materials 500 372 128

126 Speech Handicapped:100 Salaries 1,537,012 1,546,530 (9,518) 200 Employee Benefits 488,163 491,833 (3,670) 300 Purchased Services - 1,809 (1,809)

127 Learning Disabilities:100 Salaries 4,228,895 4,656,943 (428,048) 140 Terminal Leave - 5,492 (5,492) 200 Employee Benefits 1,366,584 1,470,096 (103,512) 300 Purchased Services - 7,717 (7,717) 400 Supplies and Materials 1,500 2,612 (1,112)

128 Emotionally Handicapped:100 Salaries 975,861 846,403 129,458 200 Employee Benefits 353,568 298,509 55,059 300 Purchased Services 14,520 3,167 11,353

129 Coordinated Early Intervening Services (CEIS):100 Salaries 277,090 194,666 82,424 200 Employee Benefits 82,684 49,223 33,461

130 Pre-School Programs:133 Preschool Handicapped Self-Contained (5-Yr.-Olds):

100 Salaries 270,648 276,474 (5,826) 200 Employee Benefits 105,257 102,141 3,116 300 Purchased Services - 188 (188) 400 Supplies and Materials 1,056 (1,056)

136 Pre-School Handicapped - Itinerant200 Employee Benefits 20 - 20

137 Pre-School Handicapped-Self-Contained (3 &4 year olds):100 Salaries 437,414 472,392 (34,978) 200 Employee Benefits 157,036 161,206 (4,170) 300 Purchased Services - 4,409 (4,409) 400 Supplies and Materials - 1,602 (1,602)

60





(Continued)

139 Early Childhood Programs:100 Salaries $ 99,243 $ 271,863 $ (172,620) 200 Employee Benefits 53,431 82,168 (28,737) 400 Supplies and Materials 21,323 16,230 5,093

140 Special Programs:141 Gifted and Talented - Academic:

100 Salaries 84,197 263,357 (179,160) 200 Employee Benefits 25,354 67,214 (41,860) 400 Supplies and Materials - 4,822 (4,822)

145 Homebound:100 Salaries 322,449 372,393 (49,944) 200 Employee Benefits 80,808 92,764 (11,956) 300 Purchased Services 22,967 45,876 (22,909) 400 Supplies and Materials 1,700 1,099 601

148 Gifted and Talented - Artistic:100 Salaries 104,001 28,988 75,013 200 Employee Benefits 6,691 6,403 288 300 Purchased Services 92,857 54,160 38,697 400 Supplies and Materials 41,289 29,298 11,991

149 Other Special Programs:100 Salaries 1,830 - 1,830

160 Other Exceptional Programs:161 Autism:

100 Salaries 908,954 1,144,903 (235,949) 200 Employee Benefits 336,455 402,225 (65,770) 300 Purchased Services 225 3,422 (3,197) 400 Supplies and Materials - 1,362 (1,362)

170 Summer School Programs:173 High School Summer School:

100 Salaries 52,112 9,780 42,332 200 Employee Benefits 12,022 2,231 9,791

175 Instructional Programs Beyond Regular School Days:100 Salaries - 720 (720) 200 Employee Benefits - 164 (164)

180 Adult/Continuing Educational Programs:181 Adult Basic Education Programs:

100 Salaries 62,277 62,991 (714)200 Employee Benefits 18,267 18,061 206

188 Parenting/Family Literacy:100 Salaries 16,719 9,670 7,049 140 Terminal Leave - 7,014 (7,014) 200 Employee Benefits 6,984 4,189 2,795

Total Instruction 128,228,938 130,756,286 (2,527,348)

200 Supporting Services:210 Pupil Services:

211 Attendance and Social Work Services:100 Salaries 1,324,736 1,314,586 10,150 200 Employee Benefits 443,317 445,576 (2,259) 300 Purchased Services 10,282 29,668 (19,386) 400 Supplies and Materials 3,315 3,398 (83)

212 Guidance Services:100 Salaries 4,510,638 4,515,680 (5,042) 140 Terminal Leave - 15,062 (15,062) 200 Employee Benefits 1,317,511 1,359,169 (41,658) 300 Purchased Services 720 3,045 (2,325) 400 Supplies and Materials 31,889 32,772 (883)

61





(Continued)

213 Health Services:100 Salaries $ 1,045,745 $ 1,004,583 $ 41,162 200 Employee Benefits 359,074 355,259 3,815 300 Purchased Services 7,320 4,852 2,468 400 Supplies and Materials 37,423 27,548 9,875

214 Psychological Services:100 Salaries 1,376,605 1,369,436 7,169 200 Employee Benefits 418,857 419,744 (887) 300 Purchased Services 14,129 22,910 (8,781) 400 Supplies and Materials 10,200 6,151 4,049 500 Capital Outlay 1,030 - 1,030

215 Exceptional Program Services:100 Salaries 101,547 75,408 26,139 200 Employee Benefits 17,093 16,579 514 300 Purchased Services - 14,013 (14,013)

220 Instructional Staff Services:221 Improvement of Instruction-Curriculum Development:

100 Salaries 1,093,026 1,035,689 57,337 140 Terminal Leave - 19,829 (19,829) 200 Employee Benefits 315,557 305,730 9,827 300 Purchased Services 42,958 45,519 (2,561) 400 Supplies and Materials 41,658 38,351 3,307

222 Library and Media Services:100 Salaries 2,311,815 2,312,688 (873) 140 Terminal Leave - 7,070 (7,070) 200 Employee Benefits 750,789 777,900 (27,111) 300 Purchased Services 62,722 62,515 207 400 Supplies and Materials 83,148 84,936 (1,788) 500 Capital Outlay - 2,281 (2,281)

223 Supervision of Special Programs:100 Salaries 1,937,039 1,505,652 431,387 140 Terminal Leave - 6,930 (6,930) 200 Employee Benefits 537,219 453,805 83,414 300 Purchased Services 128,448 129,877 (1,429) 400 Supplies and Materials 12,404 10,413 1,991 500 Capital Outlay 530 - 530 600 Other Objects - 925 (925)

224 Improvement of Instruction-Inservice and Staff Training:100 Salaries 353,836 95,305 258,531 200 Employee Benefits 37,815 28,233 9,582 300 Purchased Services 243,466 305,312 (61,846) 400 Supplies and Materials 37,970 37,122 848

230 General Administration Services:231 Board of Education:

100 Salaries 44,374 37,600 6,774 200 Employee Benefits 10,209 8,573 1,636 300 Purchased Services 92,100 70,577 21,523 318 Audit services 39,000 36,100 2,900 400 Supplies and Materials - 8,030 (8,030) 600 Other Objects 189,000 39,995 149,005

232 Office of the Superintendent:100 Salaries 674,351 842,050 (167,699) 140 Terminal Leave 24,095 - 24,095 200 Employee Benefits 776,445 542,001 234,444 300 Purchased Services 171,035 298,123 (127,088) 400 Supplies and Materials 26,307 22,645 3,662 600 Other Objects 22,568 25,950 (3,382)

62





(Continued)233 School Administration:

100 Salaries $ 15,017,254 $ 14,666,615 $ 350,639 140 Terminal Leave 38,355 49,301 (10,946) 200 Employee Benefits 5,248,861 4,409,527 839,334 300 Purchased Services 422,545 474,554 (52,009) 400 Supplies and Materials 230,708 254,383 (23,675) 500 Capital Outlay 9,900 4,051 5,849 600 Other Objects 40 80 (40)

250 Finance and Operations Services:251 Pupil Transportation-Federally Mandated:

100 Salaries - 6,768 (6,768) 200 Employee Benefits - 518 (518) 300 Purchased Services 1,000 219,957 (218,957)

252 Fiscal Services:100 Salaries 2,539,368 1,140,745 1,398,623 140 Terminal Leave - 27,614 (27,614) 200 Employee Benefits 466,974 330,820 136,154 300 Purchased Services 914,004 53,186 860,818 400 Supplies and Materials 24,679 29,217 (4,538) 500 Capital Outlay 1,000 8,985 (7,985) 600 Other Objects 357,810 375,564 (17,754)

254 Operation and Maintenance of Plant:100 Salaries 3,450,675 3,122,503 328,172 140 Terminal Leave 23,158 14,102 9,056 200 Employee Benefits 1,138,750 978,122 160,628 300 Purchased Services 7,916,228 8,365,094 (448,866) 321 Public utilities (exclude gas, oil, elec. & heating fuels) 1,086,240 1,300,754 (214,514) 400 Supplies and Materials 945,293 1,054,728 (109,435) 470 Energy (include gas, oil, elec. & heating fuels) 7,084,235 6,963,811 120,424 500 Capital Outlay 62,500 12,908 49,592 600 Other Objects - 2,649 (2,649)

255 Student Transportation:100 Salaries 3,687,362 4,257,510 (570,148) 140 Terminal Leave - 471 (471) 200 Employee Benefits 1,160,689 1,283,380 (122,691) 300 Purchased Services 59,036 81,455 (22,419) 400 Supplies and Materials 37,818 36,785 1,033 500 Capital Outlay 65 - 65

256 Food Service:140 Terminal Leave - 12,165 (12,165) 200 Employee Benefits - 768 (768)

258 Security:100 Salaries 1,869,981 1,677,631 192,350 140 Terminal Leave - 14,539 (14,539) 200 Employee Benefits 460,478 444,106 16,372 300 Purchased Services 610,296 834,597 (224,301) 400 Supplies and Materials 55,094 37,679 17,415 500 Capital Outlay 2,500 - 2,500

260 Central Support Services:262 Planning, Research, Development & Evaluation:

100 Salaries 637,488 580,221 57,267 140 Terminal Leave - 867 (867) 200 Employee Benefits 190,509 169,770 20,739 300 Purchased Services 409,008 344,013 64,995 400 Supplies and Materials 26,008 22,987 3,021

263 Information Services:100 Salaries 321,838 287,417 34,421 200 Employee Benefits 101,399 77,906 23,493 300 Purchased Services 37,522 44,253 (6,731) 400 Supplies and Materials 48,079 41,350 6,729

63





(Continued)264 Staff Services:

100 Salaries $ 1,114,814 $ 1,142,517 $ (27,703) 200 Employee Benefits 334,858 321,579 13,279 300 Purchased Services 290,913 131,156 159,757 400 Supplies and Materials 49,204 45,926 3,278 500 Capital Outlay 1,886 780 1,106 600 Other Objects 45 15 30

266 Technology and Data Processing Services:100 Salaries 2,594,984 2,392,735 202,249 140 Terminal Leave 313 11,969 (11,656) 200 Employee Benefits 798,735 698,359 100,376 300 Purchased Services 155,747 461,260 (305,513) 400 Supplies and Materials 475,947 288,444 187,503 500 Capital Outlay - 6,417 (6,417)

270 Support Services - Pupil Activity:271 Pupil Service Activities:

300 Purchased Services - 123,986 (123,986) 400 Supplies and Materials 47,335 175,786 (128,451)

Total Supporting Services 83,650,843 80,150,520 3,500,323

300 Community Service:350 Custody and Care of Children Services

100 Salaries 841,822 752,568 89,254 200 Employee Benefits 184,626 244,807 (60,181) 300 Purchased Services 1,871 7,009 (5,138) 400 Supplies and Materials - 14,789 (14,789) 500 Capital Outlays 2,333 - 2,333

390 Other Community Services100 Salaries 264,475 313,668 (49,193) 140 Terminal Leave - 1,248 (1,248) 200 Employee Benefits 88,241 92,141 (3,900) 300 Purchased Services 6,364 11,996 (5,632) 400 Supplies and Materials 12,898 29,627 (16,729)

Total Community Service 1,402,630 1,467,853 (65,223)

400 Other Charges:410 Intergovernmental Expenditures

412-720 Payments to Other Governmental Units - 328,047 (328,047)416-720 Payments to Public Charter Schools 225,645 608,340 (382,695)

Total Intergovernmental Expenditures 225,645 936,387 (710,742)

TOTAL EXPENDITURES 213,508,056 213,311,046 197,010


5300 Sale of Fixed Assets - 2,594 2,594

Interfund Transfers, From (To) Other Funds:

5230 Transfer from Special Revenue EIA Fund 5,136,676 5,136,676 - 5280 Transfer from Other Funds Indirect Costs 450,000 944,274 494,274

421-710 Transfer to Special Revenue Fund - (345,301) (345,301)424-710 Transfer to School Building Funds - (2,407,732) (2,407,732) 425-710 Transfer to Food Service Fund (520,000) (434,064) 85,936

Total Other Financing Sources (Uses) 5,066,676 2,896,447 (2,170,229)

EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCINGSOURCES OVER EXPENDITURES AND OTHER FINANCING USES - 3,621,097 3,621,097

FUND BALANCE, Beginning of Year 30,163,168 30,163,168 -

FUND BALANCE, End of Year $ 30,163,168 $ 33,784,265 $ 3,621,097

Note: This schedule is presented as prescribed by the South Carolina State Department of Education.

64

SCHEDULE B

SPECIAL REVENUE FUNDS

The Special Revenue funds are used to record revenues derived from theState of South Carolina and the federal government, of which certainfunds are required to finance particular activities and may requirematching revenues from local sources. Separate revenues, expendituresand changes in fund balances are set forth for various reportingrequirements.

During 1984, the state legislature passed the Education Improvement Act(EIA) to upgrade the quality of education in South Carolina. Because ofthe categorical nature of the revenue, the state requires that revenues andexpenditures be accounted for in separate funds. Accordingly, the EIAfunds are reported as Special Revenue funds in the districts financialstatements.

The Special Projects Fund is used to account for all federal, state andlocal projects except for those funded under the Education ImprovementAct.

65

SCHEDULE B-1RICHLAND COUNTY SCHOOL DISTRICT TWO

SPECIAL REVENUE FUNDS - SPECIAL PROJECTS FUNDSSCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES


Preschool Occupational Other OtherTitle I IDEA Handicapped Education Adult Restricted Special

(BA Projects) (CA Projects) (CG Projects) (VA Projects) Education State Revenue(201) (203) (205) (207) (EA Projects) Grants Programs Total

REVENUES

1000 Revenue from Local Sources1700 Pupil Activities

1710 Admissions $ $ $ $ $ $ $ 266,302 $ 266,302 1720 Bookstore Sales 1,534 1,534 1740 Student Fees 18,753 18,753 1790 Other 315,576 315,576

1900 Other Revenue from Local Sources:1920 Contributions and Donations from Private Sources 64,839 64,839 1930 Medicaid 651,640 651,640 1990 Miscellaneous Local Revenue

1999 Revenue from Other Local Sources 109,988 109,988

Total Local Sources - - - - - - 1,428,632 1,428,632

2000 Intergovernmental Revenue2100 Payments from Other Governmental Units 508,625 508,625

Total Intergovernmental Revenue - - - - - - 508,625 508,625

3000 Revenue from State Sources3110 Occupational Education:

3116 EEDA - Miscellaneous 56,928 - 56,9283118 EEDA Career Specialists 831,671 - 831,671

3120 General Education:3123 Formative Assessment Fund 2,899 - 2,8993127 Student Health and Fitness 191,750 - 191,7503128 High Schools That Work 13,818 - 13,818

3190 Miscellaneous Restricted State Grants:3193 Education License Plates 7,756 - 7,756

3600 Education Lottery Act Revenue:3607 6-8 Enhancement 112,728 - 112,7283610 K-5 Enhancement 1,528,923 - 1,528,9233990 Other State Revenue:

3999 Revenue from Other State Sources 18,759 18,759

Total State Sources - - - - - 2,746,473 18,759 2,765,232

4000 Revenue from Federal Sources4200 Occupational Education:

4210 Perkins Aid, Title I 251,352 - 251,352

4300 Elementary and Secondary Education Act of 1965 (ESEA):4310 Title I, Basic State Grant Programs 2,589,409 - 2,589,409 4341 Language Instruction for Limited English Proficient

and Immigrant Students, Title III (Carryover Provision) 194,465 194,465 4343 McKinney-Vento 39,761 39,761 4351 Improving Teacher Quality 195,040 195,040

4400 Adult Education:4410 Basic Adult Education 124,329 - 124,329 4430 State Literacy Resource 12,000 - 12,000

66






(Continued)4500 Programs for Children with Disabilities:

4510 Individuals with Disabilities Education Act (IDEA) (Carry-Over Provision) 4,489,097 104,337 4,593,434 4520 Pre-School Grants (Carry-Over Provision) 229,346 - 229,346

4900 Other Federal Sources:4924 21st Century Community Learning Center (Title IV, 21st Century Schools) 892,685 892,685 4999 Revenue from Other Federal Sources 3,550,133 3,550,133

Total Federal Sources 2,589,409 4,489,097 229,346 251,352 136,329 - 4,976,421 12,671,954

TOTAL REVENUES ALL SOURCES 2,589,409 4,489,097 229,346 251,352 136,329 2,746,473 6,932,437 17,374,443

EXPENDITURES

100 Instruction

110 General Instruction111 Kindergarten Programs:

100 Salaries 2,181 - 2,181 200 Employee Benefits 491 - 491 400 Supplies and Materials 245 - 245

112 Primary Programs:100 Salaries 84,159 680,823 104,359 869,341 200 Employee Benefits 34,359 198,516 29,058 261,933 300 Purchased Services 24,063 67,433 91,496 400 Supplies and Materials 103,834 190,741 191,052 485,627 500 Capital Outlay 5,478 5,478

113 Elementary Programs:100 Salaries 85,786 150,814 70,698 307,298200 Employee Benefits 19,561 51,417 26,291 97,269300 Purchased Services 40,806 40,806400 Supplies and Materials 864 135,313 136,177500 Capital Outlay 68,559 68,559

114 High School Programs:100 Salaries 214,628 214,628200 Employee Benefits 48,015 48,015300 Purchased Services 149,080 149,080400 Supplies and Materials 3,990 415,457 419,447 500 Capital Outlay 12,168 12,168

115 Career & Technology Education Programs:100 Salaries 10,107 10,107 200 Employee Benefits 225 225 300 Purchased Services 88,523 - 88,523 400 Supplies and Materials 72,288 653 72,941 500 Capital Outlays 8,558 - 8,558

118 Montessori Programs:400 Supplies and Materials 23,850 2,327 26,177

120 Exceptional Programs121 Educable Mentally Handicapped:

100 Salaries 261,580 - 261,580 67






200 Employee Benefits 86,125 - 86,125 (Continued)

122 Trainable Mentally Handicapped:100 Salaries 171,105 811 171,916 200 Employee Benefits 65,508 181 65,689

125 Hearing Handicapped:100 Salaries 25 43,804 - 43,829 200 Employee Benefits 6 15,478 - 15,484

126 Speech Handicapped:100 Salaries 268,697 - 268,697 200 Employee Benefits 89,647 - 89,647

127 Learning Disabilities:100 Salaries 429,171 20,170 449,341 200 Employee Benefits 149,955 4,414 154,369 400 Supplies and Materials 1,722 1,722

128 Emotionally Handicapped:100 Salaries 112,176 - 112,176 200 Employee Benefits 37,634 - 37,634

129 Coordinated Early Intervening Services (CEIS)100 Salaries 67,222 - 67,222 200 Employee Benefits 21,955 - 21,955

130 Pre-School Programs131 Preschool Handicapped Speech (5 Yr. Olds)

100 Salaries 19,105 - 19,105 200 Employee Benefits 6,903 - 6,903

133 Preschool Handicapped Self-Contained (5 Yr. Olds)100 Salaries 25,332 46,895 - 72,227 200 Employee Benefits 5,906 18,833 - 24,739

137 Pre-School Handicapped Self-Contained (3 & 4 Yr. Olds):100 Salaries 8,729 109,169 42,696 160,594 200 Employee Benefits 1,993 28,441 9,383 39,817

139 Early Childhood Programs100 Salaries 749,349 - 749,349 200 Employee Benefits 247,303 - 247,303 300 Purchased Services 713 - 713 400 Supplies and Materials 84,831 708 85,539

140 Special Programs141 Gifted and Talented Academic:

300 Purchased Services 940 940

160 Other Exceptional Programs161 Autism:

100 Salaries 183,617 17,108 200,725200 Employee Benefits 62,485 3,859 66,344400 Supplies and Materials 684 684

170 Summer School Programs172 Elementary Summer School

100 Salaries 2,465 2,465 200 Employee Benefits 555 555 68






400 Supplies and Materials 161 161

(Continued)173 High School Summer School

100 Salaries 1,625 1,625200 Employee Benefits 373 373400 Supplies and Materials 1,846 1,846

175 Instructional Programs Beyond Regular School Days 100 Salaries 3,990 499,015 503,005 200 Employee Benefits 899 107,194 108,093 300 Purchased Services 190,732 190,732 400 Supplies and Materials 27,225 27,225

180 Adult/Continuing Education Programs181 Adult Basic Education Programs:

100 Salaries 41,231 - 41,231200 Employee Benefits 8,769 - 8,769 300 Purchased Services 992 - 992400 Supplies and Materials 905 - 905

182 Adult Secondary Education Programs:100 Salaries 42,618 - 42,618200 Employee Benefits 8,076 - 8,076400 Supplies and Materials 669 - 669

183 Adult English Literacy (ESL):100 Salaries 26,998 26,792 53,790 200 Employee Benefits 6,071 4,901 10,972 400 Supplies and Materials 3,702 3,702

188 Parenting/Family Literacy:100 Salaries 291,044 - 291,044 200 Employee Benefits 98,394 - 98,394 300 Purchased Services 13,119 - 13,119 400 Supplies and Materials 27,420 4,336 31,756

190 Instructional Pupil Activity:300 Purchased Services 1,896 1,896400 Supplies and Materials 10 10600 Other Objects 17,730 17,730

Total Instruction 1,866,883 2,108,119 229,346 169,369 136,329 1,305,904 2,584,941 8,400,891

200 Support Services210 Pupil Services

211 Attendance and Social Work Services 100 Salaries 14,270 91,132 105,402 200 Employee Benefits 3,955 26,887 30,842 300 Purchased Services 12,372 3,432 15,804 400 Supplies and Materials 6,213 4,573 10,786

212 Guidance Services:100 Salaries 177,231 177,231 200 Employee Benefits 51,198 51,198 300 Purchased Services 2,626 16,030 18,656 69






400 Supplies and Materials 7,658 250 2,803 10,711

(Continued)213 Health Services:

100 Salaries 56,844 56,844 200 Employee Benefits 18,490 18,490 300 Purchased Services 40,358 40,358 400 Supplies and Materials 300 300

214 Psychological Services:100 Salaries 318,066 - 318,066 200 Employee Benefits 102,345 - 102,345

215 Exceptional Program Services:100 Salaries 482,108 - 482,108 200 Employee Benefits 140,733 - 140,733

217 Career Specialist Services:100 Salaries 612,164 - 612,164 200 Employee Benefits 219,507 - 219,507

220 Instructional Staff Services221 Improvement of Instruction - Curriculum Development:

100 Salaries 51,023 - 51,023 200 Employee Benefits 17,223 - 17,223 400 Supplies and Materials 2,623 2,623

222 Library and Media:300 Purchased Services 1,645 1,645 400 Supplies and Materials 945 59,586 60,531

223 Supervision of Special Programs:100 Salaries 258,572 317,525 714,468 1,290,565200 Employee Benefits 82,702 87,787 232,245 402,734300 Purchased Services 16,621 17,890 480,623 515,134 400 Supplies and Materials 6,131 61,945 68,076600 Other Objects 15,602 15,602

224 Improvement of Instruction-In-service and Staff Training:100 Salaries 188 2,660 2,848 200 Employee Benefits 43 590 633300 Purchased Services 103,637 53,809 508,528 661,995 1,327,969400 Supplies and Materials 11,147 9,134 8,188 28,469500 Capital Outlay 2,136 - 2,136

250 Finance and Operations Services251 Student Transportation (Federal/District Mandated):

100 Salaries 503,364 - 503,364 200 Employee Benefits 167,575 - 167,575 300 Purchased Services 37,698 187,394 225,092

253 Facilities Acquisition and Construction530 Improvements Other Than Buildings 1,327 1,327

254 Operations and Maintenance of Plant:300 Purchased Services 31,500 31,500 400 Supplies and Materials 4,429 4,429 500 Capital Outlay 3,841 3,841

255 Student Transportation (state mandated)300 Purchased Services 415,937 415,937 70






400 Supplies and Materials 124,439 124,439

(Continued)258 Security:

300 Purchased Services 19,170 19,170

260 Central Support Services266 Technology and Data Processing Services

100 Salaries 29,045 29,045 200 Employee Benefits 14,928 14,928 400 Supplies and Materials 8,673 8,673

270 Support Services Pupil Activity271 Pupil Service Activities:

100 Salaries 7,236 7,236 200 Employee Benefits 1,617 1,617 300 Purchased Services 5,657 441,588 447,245 400 Supplies and Materials 170,215 170,215 600 Other Objects 39,779 32,258 128,079 200,116

Total Support Services 588,011 2,162,858 - 81,983 - 1,420,787 4,320,866 8,574,505

300 Community Services

350 Custody and Care of Children 100 Salaries 5,550 - 5,550 200 Employee Benefits 1,250 - 1,250 400 Supplies and Materials -

360 Welfare Services 400 Supplies and Materials 12,505 12,505

370 Non-Public School Services:300 Purchased Services 4,677 4,677

390 Other Community Services 300 Purchased Services 18,737 417 19,154 400 Supplies and Materials 23,131 23,131

Total Community Services 6,800 - - - - 18,737 40,730 66,267

410 Intergovernmental Expenditures

414 Medicaid Payments to SCDE720 Transits 211,985 211,985

416 Payments to Public Charter Schools720 Transits 752 - 752 Total Intergovernmental Expenditures - 752 - - - - 211,985 212,737

TOTAL EXPENDITURES 2,461,694 4,271,729 229,346 251,352 136,329 2,745,428 7,158,522 17,254,400

71






(Continued)OTHER FINANCING SOURCES (USES)

Interfund Transfer, From (To) Other funds5210 Transfer from General Fund (Exclude Indirect Costs) 345,300 345,300 431-791 Special Revenue Fund Indirect Costs (127,715) (217,368) (1,045) (118,660) (464,788)

Total Other Financing Sources (Uses) (127,715) (217,368) - - - (1,045) 226,640 (119,488)

EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCINGSOURCES OVER EXPENDITURES AND OTHER FINANCING USES - - - - - - 555 555

FUND BALANCES, July 1, 2012 - - - - - 15,951 - 15,951

FUND BALANCES, June 30, 2013 $ - $ - $ - $ - $ - $ 15,951 $ 555 $ 16,506


72

SCHEDULE B-1


NOTES TO COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE

SPECIAL PROJECTS FUND


* Other Restricted State Grants * Other Special Revenue Programs

919 Education License Plates 212 Extended School Year Handicapped Service 822 Athletic Coach Fund926 Family Solutions 224 21st Century Grant 824 Good Neighbor - State Farm928 EEDA Career Specialist 264 ESOL, Title III 826 DHEC Recycling Mini Grant933 Formative Assessment 267 Improving Teacher Quality, Title II 827 Sparkleberry Fair937 Student Health and Fitness - PE Teachers 269 Clemson/Agriculture/RV 832 SLC - Orangeburg Cons School District938 High Schools That Work/Making Middle Grades Work 272 Donations 834 PTO Grants960 K-5 Enhancement 275 Magnet School Assistance 836 Verizon Wireless Donation967 6-8 Enhancement 276 Carol White PE Program 840 FMU Center to Prepare Teachers Children of Poverty

281 Gear-Up Research Program 842 State Farm Southern Zone YAB282 Project Care 843 Profoundly Mentally Disabled283 Department of Defense Grant 845 SCADA288 Transportation 846 Lipscomb Family Foundation292 ROTC 847 Target Partners 4 Success294 ARRA Energy Grant 848 BiLo Charities297 Department of Defense Grant #2 853 Food Lion Charities299 Medicaid 855 SC Arts Commission Grants803 SC Arts Commission - PCA 857 GEAR Up!804 Lowe's Charitable & Education 859 State Farm Youth Advisory Board805 Dollar General Grant 860 Drug Free Communities

806 National Park Service 863 Homework Center807 Virtual High School 864 SC ASCD Grant810 Richland County Conservation 867 Office of Juvenile Justice and Delinquency Prevention812 Computer Based Testing Center 868 Walmart Foundation814 Laptop Computer Insurance 869 Athletics Spring Valley High School815 SC Council on the Holocaust 879 Athletics Richland Northeast High School818 McKinney Vento Homeless Assistance Act 884 Athletics Ridge View High School819 Richland Soil & Water Conservation District 892 Athletics Blythewood High School820 American Forest Foundation 894 Athletics Westwood High School

73

SCHEDULE B-2

RICHLAND COUNTY SCHOOL DISTRICT TWOSPECIAL REVENUE FUNDS

SUMMARY SCHEDULE FOR DESIGNATED STATE RESTRICTED GRANTSFOR THE YEAR ENDED JUNE 30, 2013

SUBFUND REVENUE PROGRAMS REVENUES EXPENDITURES

919 3193 Education License Plates $ 7,756 $ 7,756 926 3116 Family Solutions 56,928 56,928 928 3118 EEDA Career Specialists 831,671 831,671 933 3123 Formative Assessment (Carryover Only) 2,899 2,899 937 3127 Student Health and Fitness - PE Teachers 191,750 191,750 938 3128 High Schools that Work/Making Middle Grades Work 13,818 13,818 960 3610 K-5 Enhancement 1,528,923 1,528,923 967 3607 6-8 Enhancement 112,728 112,728

Totals $ 2,746,473 $ 2,746,473


74


SPECIAL REVENUE FUNDS - EDUCATION IMPROVEMENT ACTCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE


REVENUES

3000 Revenue from State Sources3100 Restricted State Funding

3161 EAA Bus Driver Salary and Fringe $ 4,723

3500 Education Improvement Act:3502 ADEPT 48,387 3509 Arts in Education 93,020 3511 Professional Development 298,114 3525 Career and Technology Education Equipment 136,129 3526 Refurbishment of K-8 Science Kits 93,418 3532 National Board Certification Salary Supplement 4,513,101 3533 Teacher of the Year Awards 1,077 3538 Students at Risk of School Failure 4,241,957 3540 Early Childhood Program (4K Programs Serving 4 yr. olds) 498,725 3544 High Achieving Students 830,035 3550 Teacher Salary Increase 2,567,622 3551 Teacher Salary Supplement State Share 1,857,089 3555 School Employer Contributions 1,008,834 3556 Adult Education 218,629 3558 Reading 134,073 3577 Teacher Supplies 483,292 3578 High Schools That Work/Making Middle Grades Work 12,469 3581 Student Health and Fitness - Nurses 566,428 3585 Aid to Districts - Special Education 1,433,191 3592 Work-Based Learning 103,649 3594 EEDA Supplemental Programs 24,426 3597 Aid to Districts 818,844 3598 Cost Savings Allocations 44,072 3599 Other EIA 83,096

Total State Sources 20,114,400

TOTAL REVENUES ALL SOURCES 20,114,400

EXPENDITURES

100 Instruction:

110 General Instruction:111 Kindergarten Programs:

100 Salaries 240,503 200 Employee Benefits 94,358 400 Supplies and Materials 26,294

112 Primary Programs:100 Salaries 1,663,430 200 Employee Benefits 508,531 300 Purchased Services 77,174 400 Supplies and Materials 370,723

75




(Continued)113 Elementary Programs:

100 Salaries 1,620,506 200 Employee Benefits 430,215 300 Purchased Services 19,260 400 Supplies and Materials 257,359

114 High School Programs:100 Salaries 1,526,409 200 Employee Benefits 439,935 300 Purchased Services 28,894 400 Supplies and Materials 250,077

115 Career and Technology Education Programs:100 Salaries 46,510 200 Employee Benefits 10,316 300 Purchased Services 2,884 400 Supplies and Materials 78,831 500 Capital Outlay 71,155

116 Career and Technology Education Programs - Middle School100 Salaries 15,000 200 Employee Benefits 3,348 400 Supplies and Materials 771

118 Montessori Programs400 Supplies and Materials 2,571

120 Exceptional Programs:121 Educable Mentally Handicapped

100 Salaries 88,406 200 Employee Benefits 24,592 300 Purchased Services 69,437 400 Supplies and Materials 54,122

122 Trainable Mentally Handicapped100 Salaries 254,907 200 Employee Benefits 84,310 300 Purchased Services 156 400 Supplies and Materials 26,170

123 Orthopedically Handicapped:100 Salaries 9,310 200 Employee Benefits 712 300 Purchased Services 75 400 Supplies and Materials 35,907

124 Visually Handicapped100 Salaries 7,500 200 Employee Benefits 1,692 300 Purchased Services 1,790 400 Supplies and Materials 5,058

125 Hearing Handicapped100 Salaries 57,080 200 Employee Benefits 11,026 300 Purchased Services 570 400 Supplies and Materials 13,391

76




(Continued)126 Speech Handicapped:


127 Learning Disabilities:100 Salaries 294,795 200 Employee Benefits 73,588 300 Purchased Services 27,690 400 Supplies and Materials 134,643 500 Capital Outlay 6,351

128 Emotionally Handicapped:100 Salaries 63,828 200 Employee Benefits 13,589 300 Purchased Services 10,540 400 Supplies and Materials 6,152

129 Coordinated Early Intervening Services (CEIS)100 Salaries 3,675 200 Employee Benefits 835 400 Supplies and Materials 516

130 Pre-School Programs:133 Pre-School Handicapped Self-Contained (5 Yr. olds):


137 Preschool Handicapped Self-Contained (3 and 4 Year Old)100 Salaries 105,518 200 Employee Benefits 51,776 300 Purchased Services 1,712 400 Supplies and Materials 52,777

139 Early Childhood Programs:100 Salaries 427,449 200 Employee Benefits 135,936 400 Supplies and Materials 7,968

140 Special Programs:141 Gifted and Talented Academic:

100 Salaries 581,968 140 Terminal Leave200 Employee Benefits 191,456 300 Purchased Services 9,877 400 Supplies and Materials 16,911

143 Advanced Placement:100 Salaries 4,815 200 Employee Benefits 1,079 400 Supplies and Materials 6,778

77




(Continued)148 Gifted and Talented Artistic:


160 Other Exceptional Programs 161 Autism

100 Salaries 203,017 200 Employee Benefits 70,627 300 Purchased Services 397 400 Supplies and Materials 32,145

170 Summer School Program:172 Elementary Summer School:


173 High School Summer School 100 Salaries 10,500 200 Employee Benefits 2,339

175 Instructional Programs Beyond Regular School Day:100 Salaries 296,830 200 Employee Benefits 66,398 300 Purchased Services 13,421 400 Supplies and Materials 4,775

180 Adult/Continuing Educational Programs:

181 Adult Basic Education Programs:100 Salaries 25,063 200 Employee Benefits 2,959 400 Supplies and Materials 780

182 Adult Secondary Education Programs:100 Salaries 59,195 200 Employee Benefits 19,104

183 Adult English Literacy (ESL):100 Salaries 1,338 200 Employee Benefits 103 400 Supplies and Materials 1,783

188 Parenting/Family Literacy:100 Salaries 102,661 200 Employee Benefits 34,753400 Supplies and Materials 365

Total Instruction 11,994,401

78




(Continued)

200 Supporting Services:

210 Pupil Services:211 Attendance and Social Work Services

300 Purchased Services 25,283 400 Supplies and Materials 3,630

212 Guidance Services100 Salaries 188,500 200 Employee Benefits 42,507 300 Purchased Services 876 400 Supplies and Materials 12,050

213 Health Services100 Salaries 422,177 200 Employee Benefits 144,251 300 Purchased Services 50,119

214 Psychological Services100 Salaries 119,243 200 Employee Benefits 26,577 300 Purchased Services 27,278 400 Supplies and Materials 44,655

215 Exceptional Program Services100 Salaries 3,243 200 Employee Benefits 5,541 300 Purchased Services 17,098

220 Instructional Staff Services221 Improvement of Instruction - Curriculum Development:

100 Salaries 115,835 200 Employee Benefits 32,368 300 Purchased Services 276 400 Supplies and Materials 222

222 Library and Media Services:100 Salaries 120,001 200 Employee Benefits 27,008 400 Supplies and Materials 5,358

223 Supervision of Special Programs:100 Salaries 438,755 200 Employee Benefits 124,395 300 Purchased Services 53,622 400 Supplies and Materials 22,400

224 Improvement of Instruction - In-service and Staff Training:100 Salaries 18,287 200 Employee Benefits 4,154 300 Purchased Services 627,719 400 Supplies and Materials 58,288

250 Finance and Operations Services:251 Student Transportation (Federal/District Mandated)

100 Salaries 27,294 200 Employee Benefits 9,710 300 Purchased Services 97,999

79




(Continued)253 Facilities Acquisitions and Construction

300 Purchased Services 3,890 254 Operations and Maintenance

400 Supplies and Materials 1,235

270 Support Services - Pupil Activity 271 Pupil Service Activity

300 Purchased Services 25,969 660 Pupil Activity 35,510

Total Support Services 2,983,323

TOTAL EXPENDITURES 14,977,724


420 Interfund Transfers, From (To) Other Funds:420-710 Transfer to General Fund (Exclude Indirect Costs) (5,136,676)

TOTAL OTHER FINANCING SOURCES (USES) (5,136,676)

EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCINGSOURCES OVER EXPENDITURES AND OTHER FINANCING USES -

FUND BALANCES, Beginning of Year -

FUND BALANCES, End of Year $ -


80


SPECIAL REVENUE FUNDS - EDUCATION IMPROVEMENT ACTSUMMARY SCHEDULE BY PROGRAMFOR THE YEAR ENDED JUNE 30, 2013

TRANSFERS DEFERREDPROGRAM REVENUES EXPENDITURES IN/(OUT) REVENUE

3500 Education Improvement Act:3502 ADEPT $ 48,387 $ 48,387 $ $ 20,690 3509 Arts in Education 93,020 93,020 16,959 3511 Professional Development 298,114 298,114 837 3518 Formative Assessment 146,224 3525 Career and Technology Education Equipment 136,129 136,129 128,849 3526 Refurbishment of K-8 Science Kits 93,418 93,418 68,791 3532 National Board Certification Salary Supplement 4,513,101 4,513,101 3533 Teacher of the Year Awards 1,077 1,077 3538 Students at Risk of School Failure 4,241,957 4,241,957 4,088,634 3540 Early Childhood Program (4K Programs Serving 4 yr olds) 498,725 498,725 3544 High Achieving Students 830,035 830,035 3550 Teacher Salary Increase 2,567,622 140,285 (2,427,337) 3551 Teacher Salary Supplement State Share 1,857,089 (1,857,089) 3555 School Employer Contributions 1,008,834 156,584 (852,250) 3556 Adult Education 218,629 218,629 7,310 3558 Reading 134,073 134,073 7,374 3577 Teacher Supplies 483,292 483,292 3578 High Schools That Work/Making Middle Grades Work 12,469 12,469 33,340 3581 Student Health and Fitness - Nurses 566,428 566,428 89,902 3585 Aid to Districts - Special Education 1,433,191 1,433,191 896,808 3592 Work-Based Learning 103,649 103,649 3,348 3594 EEDA Supplemental Programs 24,426 24,426 80,643 3597 Aid to Districts 818,844 818,844 405,865 3598 Cost Savings Allocations 44,072 44,072 3599 Other EIA 83,096 83,096 10,042

Totals $ 20,109,677 $ 14,973,001 $ (5,136,676) $ 6,005,616


81

SCHEDULE C

DEBT SERVICE FUND

The Debt Service Fund is used to record payments of interest andprincipal on long-term general obligation debt from tax proceeds andearnings on temporary investments.

82

SCHEDULE C-1RICHLAND COUNTY SCHOOL DISTRICT TWO

DEBT SERVICE FUNDCOMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE


REVENUES

1000 Revenue from Local Sources1200 Revenue from Local Governmental Units Other than LEA's: 1210 Ad Valorem Taxes - Including Delinquent $ 44,732,313

1280 Revenue in Lieu of Taxes 813,973 1500 Earnings on Investments:

1510 Interest on Investments 2,107,014

Total Local Sources 47,653,300

4000 Revenue from Federal Sources 4900 Other Federal Sources

4999 Revenue from Other Federal Sources 3,526,357

Total Federal Sources 3,526,357

TOTAL REVENUES ALL SOURCES 51,179,657

EXPENDITURES

500 Debt Service:610 Redemption of Principal 56,500,000 620 Interest 25,745,402 690 Other Objects 382,725


Excess of Revenues Over Expenditures (31,448,470)


5110 Premium on Bonds Sold 5,384,487 5130 Proceeds of Refunding Debt 28,215,000

Interfund Transfers, From (To) Other Funds

5250 Transfer from Building Fund 349,532

Total Transfers and Other Financing Sources (Uses) 33,949,019

EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCINGSOURCES OVER EXPENDITURES AND OTHER FINANCING USES 2,500,549

FUND BALANCE, July 1, 2012 13,316,088

FUND BALANCE, June 30, 2013 $ 15,816,637


83

SCHEDULE D

CAPITAL PROJECTS FUND

The Capital Projects fund, also referred to as the "Building Fund," is usedto record the proceeds from the sale of long-term general obligation bondsand other revenues used for facilities acquisitions and construction. Thefund balance is reserved for the completion of specific projects.

84

SCHEDULE D-1

RICHLAND COUNTY SCHOOL DISTRICT TWOCAPITAL PROJECTS FUND

COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCEFOR THE YEAR ENDED JUNE 30, 2013

REVENUES

1000 Revenue from Local Sources1500 Earnings on Investments:

1510 Interest on Investments $ 301,6621900 Other Revenue from Local Services

1993 Receipt of Insurance Proceeds 20,6951999 Revenue from Other Local Sources 9,600

Total Local Sources 331,957

TOTAL REVENUES ALL SOURCES 331,957

EXPENDITURES

200 Support Services

250 Finance and Operations:251 Student Transportation

300 Purchased Services 621 500 Capital Outlay 257,362

253 Facilities Acquisition and Construction:300 Purchased Services 2,942,977 400 Supplies and Materials 135,824 500 Capital Outlay

510 Land 1,725,047 520 Buildings 20,145,842 530 Improvements Other Than Buildings 927,493 540 Expendable Equipment 2,706,382 541 Equipment 421,113 550 Vehicles 232,340 560 Library Books 309,444 580 Mobile Classrooms 482,354 590 Other 646,831

256 Food Service500 Capital Outlay

540 Expendable Equipment 115,421 258 Security

500 Capital Outlay520 Buildings 110,218 540 Expendable Equipment 133,475 550 Vehicles 39,666

260 Central Support Services266 Data Processing Services

300 Purchased Services 2,068,784 400 Supplies and Materials 7,687,028 500 Capital Outlay

545 Technology, Equipment and Software 295,643

Total Support Services 41,383,865

85

(Continued)410 Intergovernmental Expenditures

412-720 Payments to Other Governmental Units 51,030

Total Intergovernmental Expenditures 51,030



5100 Sale of Bonds:5110 Premium on Bonds Sale 7,147,059 5120 Proceeds of General Obligation Bonds 66,090,000

Interfund Transfers, From (To) Other Funds: 5210 Transfer from General Fund 2,407,732 423-710 Transfer to Debt Service Fund (349,532) 425-710 Transfer to Food Service Fund (115,942)

Total Other Financing Sources (Uses) 75,179,317

EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCINGSOURCES OVER EXPENDITURES AND OTHER FINANCING USES 34,076,379

FUND BALANCE, July 1, 2012 84,591,702

FUND BALANCE, June 30, 2013 $ 118,668,081


86

SCHEDULE E

ENTERPRISE FUND

The Enterprise Fund records the financing, operation and maintenance ofthe food service fund operates in a manner similar to a private businessenterprise. The fund's purpose is to provide balanced nutritional meals toSchool District students, some of which are free and reduced meals underthe United States Department of Agriculture school breakfast and lunchprograms.

87

SCHEDULE E-1

REVENUES:1000 Revenues from Local Sources:

1500 Earnings on Investments:1510 Interest on Investments $ 25,371

1600 Food Services:1610 Lunch Sales to Pupils 2,752,674 1620 Breakfast Sales to Pupils 40,636 1630 Special Sales to Pupils 306,205 1640 Lunch Sales to Adults 228,862 1650 Breakfast Sales to Adults 9,898 1660 Special Sales to Adults 32,132

1900 Other Revenue from Local Sources:1990 Miscellaneous Local Revenue: 1999 Revenue from Other Local Sources 37,720


3000 Revenue from State Sources:3140 School Lunch:

3142 Program Aid 742 Total State Sources 742

4000 Revenue from Federal Sources:4800 USDA Reimbursements:

4810 School Lunch Program 5,088,994 4830 School Breakfast Program 1,611,915 4860 Fresh Fruit and Vegetable Grant 68,682

4900 Other Federal Sources:4991 USDA Commodities 628,755 4999 Other Federal Revenue 59,830

Total Federal Sources 7,458,176

Total Revenue - All Sources 10,892,416

EXPENSES:

110 General Instruction:114 High School Programs:

300 Purchased Services 600

250 Finance and Operation Services:256 Food Services:

100 Salaries 1,539,476 140 Terminal Leave 17,359

200 Employee Benefits 675,626 300 Purchased Services 7,763,194 400 Supplies and Materials 803,894 500 Capital Outlay 504,291 600 Other Objects 88,026

Total Expenses 11,392,466

OTHER FINANCING SOURCES(USES):

5300 Sale of Fixed Assets 2,858


5210 Transfer from General Fund 434,064 5250 Transfer from School Building Fund 115,942

432-791 Transfer Food Service Fund Indirect Costs (479,485)

Total Other Financing (Uses) 73,379

Change in Net Position (426,671)

Total Net Position - Beginning of Year 5,711,115

Total Net Position - End of Year $ 5,284,444


RICHLAND SCHOOL DISTRICT TWOSCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

ENTERPRISE FUND - FOOD SERVICE PROGRAMFOR THE YEAR ENDED JUNE 30, 2013

88

SCHEDULE F

INTERNAL SERVICE FUND

The Internal Service Fund is used to account for the financing of goodsand services provided by one department to other departments of theSchool District, on a cost-reimbursement basis.

89

SCHEDULE F-1

RICHLAND COUNTY SCHOOL DISTRICT TWOSTATEMENT OF CHANGES IN NET POSITION AND LIABILITIES

INTERNAL SERVICE FUNDFOR THE YEAR ENDED JUNE 30, 2013

ASSETS

Cash and Cash Equivalent $ 1,453,137 Receivable from Other Funds 360,547

TOTAL ASSETS 1,813,684

LIABILITIES AND NET POSITION

Accounts Payable 103,010 Claims Payable 1,249,232

TOTAL LIABILITIES 1,352,242

NET POSITION - UNRESTRICTED 461,442

TOTAL LIABILITIES AND NET POSITION $ 1,813,684

The accompanying notes are an integral part of these basic financial statements.


90

SCHEDULE F-2RICHLAND COUNTY SCHOOL DISTRICT TWOSCHEDULE OF REVENUES, EXPENSES AND

CHANGES IN NET POSITION - INTERNAL SERVICE FUNDFOR THE YEAR ENDED JUNE 30, 2013

REVENUES

1000 Receipts from Local Sources1500 Earnings on Investments

1510 Interest on Investments $ 18,346

Total Local Sources 18,346


EXPENSES

111 Kindergarten Programs 200 Employee Benefits 11,003

112 Primary Programs 200 Employee Benefits 75,613

113 Elementary Programs 200 Employee Benefits 101,504

114 High School Programs 200 Employee Benefits 92,444

115 Career and Technology Education Programs200 Employee Benefits 186

121 Educable Mentally Handicapped200 Employee Benefits 222

122 Trainable Mentally Handicapped200 Employee Benefits 62,862

126 Speech Handicapped200 Employee Benefits 8,374

127 Learning Disabilities200 Employee Benefits 3,413

129 Coordinated Early Intervening Services (CEIS)200 Employee Benefits 610

133 Preschool Handicapped Self-Contained (5 Year Olds)200 Employee Benefits 814

139 Early Childhood Programs200 Employee Benefits 7,032

161 Autism200 Employee Benefits 4,760

188 Parenting/Family Literacy200 Employee Benefits 167

211 Attendance and Social Work Services200 Employee Benefits 16,212

212 Guidance200 Employee Benefits 660

213 Health Services200 Employee Benefits 1,254

214 Psychological Services200 Employee Benefits 66,285

217 Career Specialist Services200 Employee Benefits 21,999

222 Library and Media200 Employee Benefits 3,790

223 Supervision of Special Programs200 Employee Benefits 2,048

233 School Administration200 Employee Benefits 28,237 400 Supplies and Materials 4,796

251 Student Transportation (Federal/District Mandated)200 Employee Benefits 8,753

254 Operations and Maintenance of Plant200 Employee Benefits 173,665 400 Supplies and Materials 2,068 600 Other Objects 219,027

255 Student Transportation400 Supplies and Materials 1,822

256 Food Service200 Employee Benefits 94,826

91

(Continued)258 Security

200 Employee Benefits 10,837 266 Technology and Data Processing Services

200 Employee Benefits 689 350 Custody and Care of Children Services

200 Employee Benefits 43,855

TOTAL EXPENSES 1,069,827

EXCESS RECEIPTS OVER DISBURSEMENTS (1,051,481)

Net Position, Beginning of Year 1,512,923

Net Position, End of Year 461,442$ Note: This schedule is presented as prescribed by the South Carolina State Department of Education.

92

SCHEDULE G

FIDUCIARY FUND TYPE

The Agency Fund is used to record the receipts and disbursements ofmonies from various pupil activity organizations. These organizationsexist at the explicit approval of the Board of Trustees. The approval maybe revoked by the Board of Trustees. The fund accounting reflects theSchool District's agency relationship with the Pupil Activity organizations.Since the Agency Fund is custodial, no fund balances exist.

93

SCHEDULE G-1

RICHLAND COUNTY SCHOOL DISTRICT TWOSTATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES

AGENCY FUND - PUPIL ACTIVITIESFOR THE YEAR ENDED JUNE 30, 2013

Balance BalanceJuly 1, 2012 Additions Deletions June 30, 2013

ASSETS

Cash and Cash Equivalents $ 230,618 $ 3,918,500 $ $ 4,149,118 Accounts Receivable 23,084 857 22,227 Receivable from Other Funds 3,807,621 3,807,621 -

TOTAL ASSETS 4,061,323 3,918,500 3,808,478 4,171,345

LIABILITIES

Accounts Payable 112,508 26,142 86,366 Payable to Other Funds 236,419 236,419 Due to Pupil Activities 3,948,495 99,935 3,848,560

TOTAL LIABILITIES $ 4,061,003 $ 236,419 $ 126,077 $ 4,171,345


94

SCHEDULE G-2RICHLAND COUNTY SCHOOL DISTRICT TWO

SCHEDULE OF RECEIPTS, DISBURSEMENTS AND CHANGES IN DUE TO PUPIL ACTIVITIESAGENCY FUND - PUPIL ACTIVITIES


RECEIPTS

1000 Receipts from Local Sources1700 Pupil Activities

1710 Admissions $ 19,749 1720 Bookstore Sales 6,959 1730 Pupil Organization Membership Dues and Fees 12,999 1740 Student Fees 2,482,439 1790 Other 4,571,334

1900 Other Revenue from Local Sources1999 Revenue from Other Local Sources 517,849


TOTAL RECEIPTS ALL SOURCES 7,611,329

DISBURSEMENTS

112 Primary Programs 100 Salaries 4,670 200 Employee Benefits 1,054

114 High School Programs 2,905 400 Supplies and Materials 4,670

190 Instructional Pupil Activity100 Salaries 681,215 200 Employee Benefits 144,206 660 Pupil Activity 2,632,369

257 Internal Services400 Supplies and Materials 16,402 660 Pupil Activity 1,156

270 Support Services Pupil Activity271 Pupil Services Activities

100 Salaries 641,329 200 Employee Benefits 129,881 300 Purchased Services 23,150 660 Pupil Activity 3,610,439

TOTAL DISBURSEMENTS 7,893,446

Excess of Receipts Over Disbursements (282,117)



5210 Transfer from General Fund 182,182

Total Other Financing Sources (Uses) 182,182

EXCESS (DEFICIENCY) OF RECEIPTS AND OTHER FINANCINGSOURCES OVER DISBURSEMENTS (99,935)

DUE TO PUPIL ACTIVITIES, Beginning of Year 3,948,495

DUE TO PUPIL ACTIVITIES, End of Year 3,848,560$ Note: This schedule is presented as prescribed by the South Carolina State Department of Education.

95

SCHEDULE H

COMPONENT UNIT

CHARTER SCHOOL

The Charter School operates under a Charter granted by the District andis considered, under South Carolina Law, to be a public school and acomponent unit of the School District.

96

SCHEDULE H-1

RICHLAND COUNTY SCHOOL DISTRICT TWOCOMPONENT UNIT - RICHLAND TWO CHARTER HIGH SCHOOL

STATEMENT OF FINANCIAL POSITIONJUNE 30, 2013

ASSETS

Due from District $ 224,286

TOTAL ASSETS 224,286

LIABILITIES AND NET POSITION

Accounts Payable 384

TOTAL LIABILITIES 384

NET POSITION - UNRESTRICTED 223,902

TOTAL LIABILITIES AND NET POSITION $ 224,286

The accompanying notes are an integral part of these basic financial statements.


97

SCHEDULE H-2RICHLAND COUNTY SCHOOL DISTRICT TWO

COMPONENT UNIT - RICHLAND TWO CHARTER HIGH SCHOOLSCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION


REVENUES

1000 Revenue from Local Sources1920 Contributions and Donations Private Sources $ 100

Total Local Sources 100

2000 Intergovernmental Units2100 Payments from Other Governmental Units 608,340

Total Intergovernmental Units 608,340


EXPENDITURES

100 INSTRUCTION115 Career and Technology Education Programs

100 Salaries 98,850 200 Employee Benefits 30,579 300 Purchased Services 45,704 400 Supplies and Materials 559

127 Learning Disabilities400 Supplies and Materials 1,355

145 Homebound200 Employee Benefits 74

182 Adult Secondary Education Programs200 Employee Benefits 53

Total Instruction 177,174

200 SUPPORT SERVICES212 Guidance Services

100 Salaries 60,609 200 Employee Benefits 17,470

223 Supervision of Special Programs300 Purchased Services 8,270 400 Supplies and Materials 744

224 Improvement of Instruction - Inservice and Staff Training100 Salaries 250 200 Employee Benefits 57

233 School Administration100 Salaries 158,591 200 Employee Benefits 44,008 300 Purchased Services 16,045 400 Supplies and Materials 289 600 Other Objects 275

254 Operations and Maintenance of Plant300 Purchased Services 1,000

271 Pupil Service Activities600 Other Objects 662

Total Support Services 308,270

410 Intergovernmental Expenditures412-720 Payments to Other Governmental Units 103,669

TOTAL EXPENDITURES 589,113

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 19,327

Net Position, Beginning of Year 204,575

Net Position, End of Year 223,902$ Note: This schedule is presented as prescribed by the South Carolina State Department of Education.

98

SCHEDULE I

OTHER SUPPLEMENTAL SCHEDULE

The following schedule is required by the South Carolina Department ofEducation.

99

SCHEDULE I-1RICHLAND COUNTY SCHOOL DISTRICT TWO

DETAILED SCHEDULE OF DUE TO STATE DEPARTMENT OF EDUCATION/FEDERAL GOVERNMENTFOR THE YEAR ENDED JUNE 30, 2013

AMOUNT DUE TOSTATE DEPARTMENT

PROJECT/ REVENUE & OF EDUCATION STATUS OF GRANT SUBFUND OR FEDERAL AMOUNT DUE

PROGRAM NUMBER CODES DESCRIPTION GOVERNMENT TO GRANTORS

State Bus Revenue (General Fund) N/A 100/1999 Over payment from SCDE 30,640$ Check IssuedNational Board Certification Salary Supplement N/A 332/3532 Return Funds in Excess of Expenditures 7,486 In ProcessFormative Assessment N/A 933/3118 Return Funds in Excess of Expenditures 3,260 In Process

41,386$


100

STATISTICAL SECTION

(UNAUDITED)

The Statistical Section of the District's comprehensive annual financialreport presents detailed information as a context for understanding theinformation in the financial statements, note disclosures, and requiredsupplementary information says about the School District's overallfinancial health.

Financial TrendsThese schedules contain trend information to help the reader understandhow the School District's financial performance and well-being havechanged over time.

Revenue Capacity

These schedules contain information to help the reader assess the SchoolDistrict's most significant local revenue source, the property tax.

Debt CapacityThese schedules present information to help the reader assess theaffordability of the School District's current levels of outstanding debt andthe School District's ability to issue additional debt in the future.

Demographic and Economic InformationThese schedules offer demographic and economic indicators to help thereader understand the environment in which the School District's financialactivities take place.

Operating InformationThese schedules contain service and infrastructure data to help thereader understand how the information in the School District's financialreport related to the services the District provides and the activities itperforms.

Sources: Unless otherwise noted, the information in these schedules is derivedfrom the comprehensive annual financial reports for the relevant year.

101

Table 1


NET ASSETS BY COMPONENT

JUNE 2004 THROUGH 2013

(ACCRUAL BASIS)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Governmental Activities

Net Investment in Capital Assets 55,111,304$ 19,621,388$ 92,263,257$ 93,546,711$ 111,046,564$ 37,991,914$ 85,100,593$ 64,763,449$ 83,927,677$ 109,733,690$ Restricted 32,063,217 76,076,793 13,621,594 22,853,727 21,325,583 103,689,062 62,874,145 77,413,217 52,449,754 12,180,380 Unrestricted 5,402,750 6,904,811 7,735,134 12,782,538 17,244,197 16,940,493 19,293,652 23,910,614 26,362,608 32,682,030

Total Governmental Activities Net Position 92,577,271 102,602,992 113,619,985 129,182,976 149,616,344 158,621,469 167,268,390 166,087,280 162,740,039 154,596,100

Business-Type ActivitiesNet Investment in Capital Assets 723,847 637,503 1,082,764 1,454,685 1,753,115 1,652,295 1,821,507 2,714,164 2,797,051 2,528,910 Unrestricted 1,936,711 2,781,497 2,912,972 3,083,711 2,382,544 2,515,366 2,511,364 2,842,873 2,914,064 2,755,534

Total Business-Type Activities Net Position 2,660,558 3,419,000 3,995,736 4,538,396 4,135,659 4,167,661 4,332,871 5,557,037 5,711,115 5,284,444

Primary GovernmentNet Investment in Capital Assets 55,835,151 20,258,891 93,346,021 95,001,396 112,799,679 39,644,209 86,922,100 67,477,613 86,724,728 112,262,600 Restricted 32,063,217 76,076,793 13,621,594 22,853,727 21,325,583 103,689,062 62,874,145 77,413,217 52,449,754 12,180,380 Unrestricted 7,339,461 9,686,308 10,648,106 15,866,249 19,626,741 19,455,859 21,805,016 26,753,487 29,276,672 35,437,564

Total Primary Government 95,237,829$ 106,021,992$ 117,615,721$ 133,721,372$ 153,752,003$ 162,789,130$ 171,601,261$ 171,644,317$ 168,451,154$ 159,880,544$

102

Table 2


EXPENSES, PROGRAM REVENUES AND NET (EXPENSE)

FOR FISCAL YEARS ENDED JUNE 30, 2004 THROUGH 2013

(ACCRUAL BASIS)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013ExpensesGovernmental Activities:

Instruction 65,973,424$ 94,004,330$ 103,709,734$ 113,488,516$ 126,178,944$ 140,833,019$ 150,801,164$ 145,856,218$ 155,352,131$ 166,236,699$ Support Services 74,737,141 55,823,665 65,431,974 66,724,371 69,636,338 91,928,903 98,710,389 101,600,103 107,127,665 114,581,107Community Services 863,445 2,018,225 2,179,236 1,429,989 2,126,595 1,764,053 1,743,046 1,656,079 1,429,158 1,534,120 Intergovernmental 288,383 374,054 511,206 21,154,095 1,200,154Interest and Other Charges on Long-Term Debt 6,810,767 5,467,392 8,172,137 10,669,120 11,559,211 10,507,369 15,533,783 25,826,729 105,400 28,822,086 Pupil Activities 80,600 80,200 190,400 105,127 Depreciation - Unallocated 4,832,426 6,564,933 7,232,868 8,438,870

Total Governmental Activities Expenses 148,673,160 162,520,092 186,569,220 199,544,864 217,939,958 245,113,944 266,868,582 275,129,529 285,273,576 312,374,166

Business-Type Activities:Food Services 5,619,647 5,915,421 6,447,474 6,839,382 8,252,332 8,602,751 9,072,930 10,073,526 10,707,175 11,392,466

Total Business-Type Activities Expenses 5,619,647 5,915,421 6,447,474 6,839,382 8,252,332 8,602,751 9,072,930 10,073,526 10,707,175 11,392,466

Total Primary Government Expenses 154,292,807 168,435,513 193,016,694 206,384,246 226,192,290 253,716,695 275,941,512 285,203,055 295,980,751 323,766,632

Program RevenuesGovernmental Activities:

Charges for ServicesInstruction 177,613 174,154 223,326 285,623 245,448 521,476 416,024 1,173,357 854,105 294,035 Support Services - 96 - - - 708,942 684,816 414,042 633,902 160,689

Operating Grants and Contributions 73,106,590 80,460,705 92,830,783 99,222,803 108,499,158 108,445,584 114,860,648 110,113,364 112,961,004 121,897,536 Capital Grants and Contributions 1,089,646 304,295 350,926 458,460 - 477,640

Total Governmental Activates Program Revenues 73,284,203 81,724,601 93,358,404 99,859,352 108,744,606 110,134,462 115,961,488 112,178,403 114,449,011 122,352,260

Business-Type ActivitiesCharges for Services

Food Services 2,775,137 2,882,771 2,922,041 3,046,272 3,024,943 3,288,330 3,270,710 3,437,746 3,273,672 3,408,127 Operating Grants and Contributions 3,202,629 3,665,324 3,918,372 4,172,793 4,635,302 5,278,475 5,883,408 6,607,778 7,140,736 7,398,346

Total Business-Type Activates Program Revenues 5,977,766 6,548,095 6,840,413 7,219,065 7,660,245 8,566,805 9,154,118 10,045,524 10,414,408 10,806,473

Total Primary Government Program Revenues 79,261,969 88,272,696 100,198,817 107,078,417 116,404,851 118,701,267 125,115,606 122,223,927 124,863,419 133,158,733

Component Units: Charter School 78,459 566,060 673,967 608,440

Net (Expense) RevenueGovernmental Activities (75,388,957) (80,795,491) (93,210,816) (99,685,512) (109,195,352) (134,979,482) (150,907,094) (162,951,126) (170,824,565) (190,021,906)Business-Type Activities 358,119 632,674 392,939 379,683 (592,087) (35,946) 81,188 (28,002) (292,767) (585,993)

Total Primary Government Net (Expense)/Revenue $(75,030,838) $(80,162,817) $ (92,817,877) $ (99,305,829) $(109,787,439) $ (135,015,428) $(150,825,906) $(162,979,128) $(171,117,332) $(190,607,899)

103

Table 3


GENERAL REVENUES AND TOTAL CHANGE IN NET POSITION

FOR FISCAL YEARS ENDED JUNE 30, 2004 THROUGH 2013

(ACCRUAL BASIS)

2004 2005 2006 2007 2008 2009 2010 2010 2012 2013Net (Expense) Revenue:Governmental Activities (75,388,957)$ (80,795,491)$ (93,210,816)$ (99,685,512)$ (109,195,352)$ (134,979,482)$ (150,907,094)$ (162,951,126)$ (170,824,565)$ (190,021,906)$ Business-Type Activities 358,119 632,674 392,939 379,683 (592,087) (35,946) 81,188 (28,002) (292,767) (585,993)

Total Primary GovernmentNet (Expense) Revenue (75,030,838) (80,162,817) (92,817,877) (99,305,829) (109,787,439) (135,015,428) (150,825,906) (162,979,128) (171,117,332) (190,607,899)

General Revenues and OtherChanges in Net Position

Governmental Activities:Taxes

Property Taxes Levied for General Purposes 52,667,102 55,915,993 62,413,213 71,253,115 56,922,311 62,217,193 69,808,614 70,625,051 73,749,462 80,052,909 Property Taxes Levied for Debt Services 22,826,138 23,484,103 26,573,134 28,766,661 30,693,012 32,356,196 46,508,954 44,457,617 42,274,586 45,620,780 Unrestricted Grants and Contributions 9,364,238 9,572,247 9,565,948 9,817,979 39,027,792 47,975,134 42,205,859 46,990,976 49,724,092 51,422,890 Investment Earnings 744,787 1,813,580 5,234,202 4,849,510 3,083,727 1,238,208 917,688 598,909 394,001 2,650,981 Intergovernmental 529,381 Miscellaneous 138,688 35,289 478,088 8,596 7,512 241,482 164,443 269,406 123,298 2,200,928 Insurance Proceeds 14,750 Transfers (85,671) (36,776) 23,261 (105,634) (43,606) (51,533) (1,171,943) (403,001) (70,521)

Total Governmental Activities 85,655,282 90,821,212 104,227,809 115,248,503 129,628,720 143,984,607 159,554,025 161,770,016 165,877,188 181,877,967

Business-Type ActivitiesUnrestricted Grants and Contributions 8,557 - Investment Earnings 17,782 60,782 132,423 168,919 138,830 24,342 12,432 16,386 12,854 25,371 Miscellaneous 64,986 14,598 17,319 25,486 20,057 55,282 14,025 60,572 Gain on Sale of Capital Assets 16,965 2,858 Transfers 85,671 36,776 (23,261) 25,034 43,606 51,533 1,171,943 403,001 70,521

Total Business-Type Activities 103,453 125,768 183,797 162,977 189,350 67,948 84,022 1,252,168 446,845 159,322

Total Primary Government 85,758,735 90,946,980 104,411,606 115,411,480 129,818,070 144,052,555 159,638,047 163,022,184 166,324,033 182,037,289

Change in Net PositionGovernmental Activities 10,266,325 10,025,721 11,016,993 15,562,991 20,433,368 9,005,125 8,646,921 (1,181,110) (4,947,377) (8,143,939) Business-Type Activities 461,572 758,442 576,736 542,660 (402,737) 32,002 165,210 1,224,166 154,078 (426,671)

Total Primary Government 10,727,897$ 10,784,163$ 11,593,729$ 16,105,651$ 20,030,631$ 9,037,127$ 8,812,131$ 43,056$ (4,793,299)$ (8,570,610)$

104

Table 4


FUND BALANCES OF GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS

(MODIFIED ACCRUAL BASIS)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013General Fund

Unreserved 9,310,014$ 10,882,091$ 12,564,566$ 14,962,096$ 18,577,808$ 20,390,382$ 22,694,466$ -$ -$ -$

Total General Fund 9,310,014 10,882,091 12,564,566 14,962,096 18,577,808 20,390,382 22,694,466 - - -

General Fund*Nonspendable N/A N/A N/A N/A N/A N/A N/A - - 110,666 Restricted N/A N/A N/A N/A N/A N/A N/A - -Committed N/A N/A N/A N/A N/A N/A N/A 13,791,031 13,933,189 Assigned N/A N/A N/A N/A N/A N/A N/A 577,994 547,814 Unassigned N/A N/A N/A N/A N/A N/A N/A 12,639,592 15,682,165 33,673,599

Total General Fund* - - - - - - - 27,008,617 30,163,168 33,784,265

All Other Governmental FundsReserved for Debt Service 3,727,070 6,670,676 8,833,380 10,993,734 7,744,035 11,334,776 17,834,367 - - -Reserved for Capital Projects 28,336,147 69,406,117 76,418,872 37,458,292 31,008,272 92,354,286 45,039,778 - -

Total All Other Governmental Funds 32,063,217 76,076,793 85,252,252 48,452,026 38,752,307 103,689,062 62,874,145 - - -

All Other Governmental Funds*Restricted N/A N/A N/A N/A N/A N/A N/A 77,413,217 97,923,741 134,501,224 Committed N/A N/A N/A N/A N/A N/A N/AAssigned N/A N/A N/A N/A N/A N/A N/AUnassigned N/A N/A N/A N/A N/A N/A N/A

Total All Other Governmental Funds* -$ -$ -$ -$ -$ -$ -$ 77,413,217$ 97,923,741$ 134,501,224$

Notes: * The fund balances for the General Fund and all other Governmental Funds from FY2011 and later are reported based on the new requirements under GASB 54. The fund balances prior to 2011 are not reported under GASB 54.

105

Table 5


GOVERNMENTAL FUNDS REVENUES



2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Sources

Federal SourcesFederal Grants 7,622,137$ 8,833,946$ 10,531,319$ 10,407,124$ 9,594,090$ 9,688,938$ 20,985,755$ 21,114,771$ 13,429,040$ 13,260,225$

Total Federal Sources 7,622,137 8,833,946 10,531,319 10,407,124 9,594,090 9,688,938 20,985,755 21,114,771 13,429,040 13,260,225

State Sources:State Education Finance Program 53,772,141 57,918,931 71,851,005 78,077,770 115,629,221 123,427,895 113,629,087 113,166,514 121,936,223 130,792,786 Public Education Capital Outlay 456,857 1,089,646 304,295 350,926 93,139 458,460 255,000 56,479 State Grants and Other 18,512,089 20,844,029 17,016,646 17,807,294 18,392,653 19,807,515 18,408,271 17,502,295 21,011,189 26,405,989

Total State Sources 72,741,087 79,852,606 89,171,946 96,235,990 134,115,013 143,693,870 132,292,358 130,725,288 142,947,412 157,198,775

Local Sources:Ad Valorem Taxes 75,466,204 79,400,096 88,986,347 100,019,776 87,615,323 94,573,389 116,317,568 117,133,807 113,073,887 120,964,929 Interest and Other Income 744,787 1,813,172 4,865,264 4,849,510 3,080,626 1,229,138 1,047,709 598,909 2,476,287 2,632,635 Other Revenues 2,312,253 2,645,993 4,068,113 3,572,194 4,073,532 4,623,452 4,479,468 5,588,737 8,773,171 8,979,589

Total Local Sources 78,523,244 83,859,261 97,919,724 108,441,480 94,769,481 100,425,979 121,844,745 123,321,453 124,323,345 132,577,153

Total Revenues 158,886,468$ 172,545,813$ 197,622,989$ 215,084,594$ 238,478,584$ 253,808,787$ 275,122,858$ 275,161,512$ 280,699,797$ 303,036,153$

106

Table 6


GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO



2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Expenditures

Current:Instruction 86,934,204$ 94,525,681$ 103,487,248$ 113,544,345$ 126,037,491$ 136,958,681$ 141,643,004$ 151,761,285$ 141,282,551$ 150,941,022$ Support Services 44,032,979 48,736,788 57,225,910 63,560,757 71,968,906 83,722,825 88,123,072 76,788,344 96,530,360 104,499,931 Community Services 1,140,677 1,281,123 1,480,650 1,501,926 1,696,303 1,729,204 1,684,666 1,640,010 1,387,105 1,534,120

Capital Additions 71,587,906 54,814,869 106,701,020 114,830,272 161,396,202 73,163,814 64,224,397 126,076,957 104,761,220 28,802,838 Debt Service:

Principal Retirement 17,950,000 16,525,000 16,620,000 16,090,000 22,400,000 15,915,000 24,480,000 29,605,000 27,754,243 56,500,000 Interest and Fiscal Charges 3,719,917 5,652,228 8,518,146 11,219,221 12,111,876 13,381,245 15,683,546 28,110,298 23,079,215 26,128,127

Intergovernmental 21,669,917 22,116,868 470,232 529,381 486,831 972,168 425,297 1,011,140 829,891 1,200,154

Total Expenditures 199,405,824$ 224,029,774$ 253,512,229$ 294,358,881$ 290,657,556$ 274,334,699$ 340,560,596$ 376,643,867$ 333,309,753$ 369,606,192$

Debt Service as a Percentage ofNon-Capital Expenditures 16.95% 13.11% 17.12% 15.21% 26.70% 14.56% 14.53% 23.03% 22.24% 24.25%

108

Table 7


OTHER FINANCING SOURCES AND USES ANDNET CHANGE IN FUND BALANCES, GOVERNMENTAL FUNDS



2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Excess of Revenues Over

(Under) Expenditures (54,273,870)$ (29,778,022)$ (55,889,240)$ (79,274,287)$ (52,178,972)$ (20,181,094)$ (65,010,588)$ (101,482,355)$ (52,609,956)$ (66,570,039)$

Other Financing Sources (Uses)General Long-Term Debt Issued 12,070,000 70,845,000 63,900,000 43,500,000 46,125,000 78,500,000 27,795,000 111,885,000 70,000,000 106,836,546 Premium on Bonds Sold 136,463 4,570,885 2,883,950 1,348,330 1,075,599 10,673,776 336,488 17,203,709 6,665,916 Capital LeasesSale of Capital Assets 2,225 17,380 2,594 Proceeds from Long-Term Notes 149,212 Proceeds of Refunding Debt 83,260,000 Payments to Refunded Debt Escrow Agents (89,300,000) Proceeds of Refunded Debt (Net) 125,826 (619,147) Transfers in 6,828,525 7,931,761 4,655,749 3,597,116 3,882,704 3,276,672 3,995,775 3,142,632 4,305,720 9,183,514 Transfers out (6,944,596) (7,983,971) (4,692,525) (3,573,855) (4,988,338) (4,900,878) (5,627,508) (6,004,975) (6,314,121) (9,254,035)

Total Other Financing Sources 12,218,443 75,363,675 66,747,174 44,871,591 46,094,965 86,930,423 26,499,755 120,335,578 74,674,895 106,768,619

Net Change in Fund Balances (42,055,427) 45,585,653 10,857,934 (34,402,696) (6,084,007) 66,749,329 (38,510,833) 18,853,223 22,064,939 40,198,580

108

Table 8


ASSESSED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY


Fiscal Assessed Value Actual Value TotalYear Real Personal Real Personal Direct

Ended Property Property Total Property Property Total Tax Rate

2004 212,023,450 113,600,996 325,624,446 4,630,968,976 1,399,457,802 6,030,426,778 260.42005 224,885,740 117,010,080 341,895,820 4,911,904,249 1,449,890,591 6,361,794,840 268.02006 276,241,440 111,100,683 387,342,123 6,033,604,011 1,331,738,670 7,365,342,681 259.02007 304,461,320 116,808,272 421,269,592 6,583,406,000 1,440,390,364 8,023,796,364 273.52008 326,116,970 130,611,873 456,728,843 7,067,735,823 1,702,996,964 8,770,732,787 288.92009 350,978,960 128,439,222 479,418,182 7,584,610,153 1,646,479,883 9,231,090,036 301.32010 394,760,080 126,619,972 521,380,052 8,567,754,735 1,609,850,471 10,177,605,206 342.32011 400,814,700 117,675,076 518,489,776 8,739,478,082 1,454,335,889 10,193,813,971 343.32012 406,302,990 118,186,867 524,489,857 8,882,531,052 1,480,507,521 10,363,038,573 349.42013 409,508,640 128,883,188 538,391,828 8,967,744,550 1,644,392,695 10,612,137,245 367.5

Source: County Assessor's Office and County Auditor's Office

109

Table 9


DIRECT AND OVERLAPPING PROPERTY TAX RATES


(rate per $1,000 of assessed value)

Overlapping Rates ªDistrict Direct Rates Recreation

Richland District of East Richland Richland-Fiscal General Capital School Richland Richland Public Service LexingtonYear Purposes Purposes Total District 2 County County District Riverbanks Park

2004 192.1 68.3 260.4 260.4 76.3 9.7 2.0 2.002005 199.7 68.3 268.0 268.0 80.0 11.2 3.2 2.102006 190.7 68.3 259.0 259.0 78.0 12.0 6.0 2.102007 205.2 68.3 273.5 273.5 76.4 12.3 8.0 2.102008 220.6 68.3 288.9 288.9 77.9 12.4 8.0 2.102009 233.0 68.3 301.3 301.3 81.1 13.6 8.0 2.102010 250.3 92 342.3 342.3 78.7 13.2 4.0 2.002011 258.3 85 343.3 343.3 79.7 13.4 4.0 2.002012 269.4 80 349.4 349.4 81.6 13.7 4.0 2.002013 282.5 85 367.5 367.5 84.2 14.1 4.0 2.00

Source: County Auditor's Office

Note: ª Includes levies for operating and debt service costs.

110

Table 10


PRINCIPAL PROPERTY TAXPAYERS

CURRENT YEAR AND NINE YEARS AGO

2013 2004Taxable Percentage of Taxable Percentage of

Assessed Total Taxable Assessed Total TaxableTaxpayer Rank Value Value Rank Value Value

South Carolina Electric & Gas 1 15,276,320$ 2.84% 1 10,875,920$ 3.20%Blue Cross - Blue Shield 2 8,370,160 1.55% 2 6,133,810 1.80%Bellsouth Telecom, Inc. 3 2,291,530 0.43% 4 3,476,550 1.02%Bose Corporation 4 3,578,631 0.66% 5 4,682,220 1.38%F N Manufacturing, Inc. 5 2,490,750 0.46%Century Realty, LLC 6 2,184,880 0.41%Koyo Corporation of USA 7 3,149,208 0.58% 8 2,941,040 0.86%Fairfield Electric Co-op Inc 8 1,885,270 0.35%IBM Credit, LLC 9 1,769,920 0.33%Amcor Rigid Plastics USA Inc. 10 1,964,142 0.36%MYND/Policy Management Systems 3 3,976,190 1.17%Siemens Diesel Systems Tech** 6 8,256,330 2.43%CBL/Columbia Place, LLC 7 2,666,300 0.78%Shakespeare Company, LLC 9 1,690,090 0.50%RBMG Inc 10 1,497,840 0.43%

Total 42,960,811$ 7.97% 46,196,290$ 13.57%

Source: County Treasurer's Office** Fee agreement reduced taxes owed

111

Table 11


PROPERTY TAX LEVIES AND COLLECTIONS


Collected Within theFiscal Year of the Levy Total Collections to Date

Taxes Levied CollectionsFiscal for the Percentage in Subsequent Percentage Year Fiscal Year Amount of Levy Year Amount of Levy

2004 64,566,111 58,712,117 90.93% 1,022,573 59,734,690 92.52%2005 68,276,595 64,323,284 94.21% 940,804 65,264,088 95.59%2006 74,032,322 68,541,298 92.58% 1,290,645 69,831,943 94.33%2007 86,444,520 79,205,581 91.63% 1,800,188 81,005,769 93.71%2008 100,754,383 96,475,444 95.75% 1,738,194 98,213,638 97.48%2009 106,546,036 101,791,213 95.54% 2,408,558 104,199,771 97.80%2010 115,207,588 109,155,231 94.75% 4,717,189 113,872,420 98.84%2011 117,100,628 110,202,275 94.11% 4,390,053 114,592,328 97.86%2012 119,840,092 113,972,278 95.10% 3,046,489 117,018,767 97.65%2013 126,061,667 119,395,021 94.71% - 119,395,021 94.71%

Source : County Treasurer

112

Table 12


RATIOS OF GENERAL BONDED DEBT OUTSTANDING


Percentage ofGeneral Total Actual Taxable

Fiscal Obligation Capital Primary Value of of PersonalYear Bonds Leases Government Property Income Per Capita

2004 131,805,000 3,800,000 135,605,000 42% 7% 4042005 186,125,000 2,880,000 189,005,000 55% 6% 5512006 233,405,000 1,930,000 235,335,000 61% 5% 6812007 260,815,000 950,000 261,765,000 62% 5% 7442008 284,540,000 390,000 284,930,000 62% 5% 7912009 345,875,000 - 345,875,000 72% 4% 9442010 351,190,000 - 351,190,000 67% N/A 9442011 427,430,000 - 427,430,000 82% 3% 1,1122012 471,630,000 - 471,630,000 90% 3% 1,2122013 509,435,000 - 509,435,000 95% 3% 1,284

Source: District Records

Notes: See Table 8 for property value dataSee Table 14 for Personal Income and Per Capita Income DataDetails regarding the District's outstanding debt can be found in the notes to the financial statements

General Bonded Debt Outstanding

113

Table 13


LEGAL DEBT MARGIN


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Debt Limit 26,433,803$ 27,466,000$ 31,234,531$ 33,701,567$ 36,538,307$ 38,353,462$ 41,710,404$ 41,479,182$ 41,959,189$ 43,071,346$

Total Net Debt Applicable to Limit 9,370,000 14,915,000 13,515,000 16,515,000 19,500,000 22,000,000 19,560,000 17,320,000 21,260,000 28,910,000

Legal Debt Margin 17,063,803$ 12,551,000$ 17,719,531$ 17,186,567$ 17,038,307$ 16,353,462$ 22,150,404$ 24,159,182$ 20,699,189$ 14,161,346$

Total Net Debt Applicable to Limitas a Percentage of Debt Limit 35.45% 54.30% 43.27% 49.00% 53.37% 57.36% 46.89% 41.76% 50.67% 67.12%

Total Assessed Value 538,391,828$

Debt Limit (8% of Total Assessed Value) 43,071,346

Amount of Debt Applicable to Debt Limit:Total Bonded Debt 509,435,000 Less: Debt Issued Through Referendum (480,525,000)

Total Net Debt Applicable to Debt Limit 28,910,000

Legal Debt Margin 14,161,346$

Notes:The Constitution of the State of South Carolina allows for school districts to issueup to 8% of the assessed value of all properties in the School District.

Legal Debt Margin Calculation:

114

Table 14


DIRECT AND OVERLAPPING DEBT

JUNE 30, 2013

Percentage Debt Applicable District Share

Outstanding to District of Debt

Governmental Units

City of Columbia 33,515,000$ 7.79% 2,610,819$ Richland County 55,155,000 35.31% 19,475,231

Special Districts and Other:Recreation District 46,030,000 48.18% 22,177,254 Richland/Lexington Riverbanks Park District 7,305,000 35.31% 2,579,396 East Richland County Public Sewer District 8,996,572 76.33% 6,867,083 Richland/Lexington Airport District 10,000,000 35.31% 3,531,000

Total Overlapping Debt 161,001,572 57,240,782

Direct Richland School District Two 509,435,000 100.00% 509,435,000

Total Direct and Overlapping Debt 670,436,572$ 566,675,782$

Source: Richland County Treasurer's Office

115

Table 15


DEMOGRAPHIC AND ECONOMIC STATISTICS

LAST TEN CALENDAR YEARS

CountyCalendar Per Capita County Personal Unemployment

Year Population (a) Income (b) Income (b) Rate (c)

2004 335,370 30,312 10,165,727 6.00%2005 343,136 32,186 11,116,938 6.00%2006 345,398 34,413 12,103,166 5.80%2007 351,707 35,204 12,678,983 5.20%2008 360,159 36,006 13,193,568 6.10%2009 366,432 36,302 13,493,400 9.50%2010 372,023 35,266 13,119,763 9.70%2011 384,504 36,302 13,958,264 9.20%2012 389,116 36,006 14,010,510 9.80%2013 396,898 36,366 14,433,628 8.10%

(a) Bureau of Economic and Business Research (US Census Bureau)(b) South Carolina Division of Research and Statistics(c) State Agency for Workforce Innovation, Office of Workforce Information Services, Labor Market Statistics

116

Table 16


PRINCIPAL EMPLOYERS

CURRENT YEAR AND SIX YEARS AGO

2013 2006 *Percentage Percentage

of Total County of Total CountyEmployer Employees Rank Employment Employees Rank Employment

Palmetto Health Alliance, Inc. 9,000-10,000 1 2.71% 9,000-10,000 1 5.21%Blue Cross-Blue Shield of SC 6,000-7,000 2 1.85% 6,000-7,000 2 3.86%University of South Carolina 4,000-5,000 3 1.28% 4,000-5,000 3 2.52%Richland School District One 4,000-5,000 4 1.28% 4,000-5,000 4 2.42%Department of Defense 3,000-4,000 5 1.00% 3,000-4,000 5 2.15%Richland School District Two 3,000-4,000 6 1.00% 2,000-3,000 7 1.58%AT&T (Bellsouth) 2,000-3,000 7 0.71% 2,000-3,000 6 1.60%SCANA 2,000-3,000 8 0.71%Humana/Tricare 2,000-3,000 9 0.71% 1,000-2,000 10 1.01%City of Columbia 2,000-3,000 10 0.71%Providence Hospitals 2,000-3,000 8 1.18%Westinghouse Electric 1,000-2,000 9 1.18%South Carolina Electric and Gas 2,000-3,000

Total 37,000-47,000 17,000-24,000

Source: Central South Carolina Alliance, SC Employment Security Commission, Central Midlands Council of Governments

Information on Principal Employers was only available in the form of range of employees.

* Information was not available for years prior to 2006.

117

Table 17


FULL-TIME EQUIVALENT SCHOOL DISTRICT EMPLOYEES BY TYPE


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Supervisory

Instructional Administrators 6 6 5 5 7 9 11 18 20 20 Noninstructional Administrators 27 33 38 49 60 60 63 66 57 58 Consultants/Supervisors of Instruction 8 10 10 18 20 20 17 21 20 23 Principals 23 23 26 27 28 28 31 30 33 36 Assistant Principals 41 46 47 52 61 67 69 70 75 80

Total Supervisory 105 118 126 151 176 184 191 205 205 217

InstructionElementary Classroom Teachers (Includes Middle School) 854 922 982 1,036 1,098 1,140 1,135 1,105 1,133 1,159 Secondary Classroom Teachers 364 397 416 480 535 553 545 488 497 507 ESE Teacher 157 167 165 183 192 195 190 167 172 176 Other Teachers (Adult) 62 55 57 58 60 54 54 49 49 50 Other Professionals (Instructional) 1 3 11 19 23 53 53 53 53 53 Aides 402 414 446 446 451 463 463 452 453 453

Total Instruction 1,840 1,958 2,077 2,222 2,359 2,458 2,440 2,314 2,357 2,398

Student ServicesGuidance Counselors 47 53 55 58 60 60 58 57 70 70 Visiting Teachers/Social Workers 1 2 5 6 9 10 14 13 19 19 Psychologists 22 22 22 24 26 26 26 29 29 28 Librarians 22 26 28 29 29 30 29 29 33 34 Other Professionals (Noninstructional) 6 7 8 10 12 15 15 14 15 15 Technicians 2 2 - - - - - - - -

Total Student Services 100 112 118 127 136 141 142 142 166 166

Support and AdministrationClerical/Secretarial 133 148 156 159 185 188 190 193 196 199 Service Workers 160 200 205 221 223 225 223 252 261 289 Skilled Crafts 85 73 86 92 97 97 97 110 99 102 Unskilled Laborers 60 59 56 62 64 64 59 48 53 53

Total Support and Administration 438 480 503 534 569 574 569 603 609 643

Total 2,483 2,668 2,824 3,034 3,240 3,357 3,342 3,264 3,337 3,424

Source: District RecordsNote: Full-time instructional employees of the District are employed for all 180 scheduled school days, at seven hours per day or 1,260 per year. Total work hours byinstructional employees are divided by 1,260 to obtain full-time employment. Full-time equivalent employment for all other positions is determined based on 1,820 hours peryear (52 weeks times five days times seven hours).

118

Table 18


OPERATING STATISTICS


Percentageof Students

Modified Accrual Basis of Accounting Accrual Basis of Accounting ReceivingFiscal Free orYear Operating Cost Per Percentage Cost Per Percentage Teaching Reduced-Price

Ended Enrollment Expenditures Pupil Change Expenses Pupil Change Staff Meals

2004 18,905 133,855,844 7,080 5.48% 138,291,304 7,315 5.22% 1,437 36%2005 19,829 144,954,521 7,310 3.25% 149,389,981 7,534 3.00% 1,541 38%2006 20,913 162,664,040 7,778 6.40% 169,229,973 8,092 7.40% 1,620 38%2007 22,025 179,136,409 8,133 4.56% 186,369,277 8,462 4.57% 1,757 40%2008 23,200 200,189,531 8,629 6.10% 217,939,958 8,993 8.90% 1,885 39%2009 23,901 216,955,256 9,077 5.20% 245,113,944 10,255 9.20% 1,942 43%2010 24,245 224,323,404 9,252 1.93% 266,868,582 11,007 8.02% 1,924 43%2011 24,965 222,477,459 8,912 -3.68% 275,129,529 11,021 0.12% 1,809 45%2012 25,988 240,029,909 9,236 3.64% 285,273,576 10,977 -0.39% 1,851 48%2013 26,533 256,975,073 9,685 4.86% 312,307,926 11,771 7.23% 1,892 47%

Source: All information from School District records.

Note: Operating expenditures are total expenditures less debt service and capital outlays

* Information not available.

119

Table 19RICHLAND SCHOOL DISTRICT TWO

SCHOOL BUILDING INFORMATION


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Anna Boyd CDC/SchoolSquare Feet 13,500 13,500 13,500 13,500 13,500 13,500 13,500 13,500 13,500 13,500 Capacity (Students) 200 200 200 200 200 200 200 200 200 200 Enrollment 193 193 199 60 43 46 35 38 24 38

Bethel-Hanberry Elementary SchoolSquare Feet 128,369 128,369 128,369 128,369 128,369 128,369 128,369 128,369 128,369 128,369 Capacity (Students) 698 698 698 634 634 634 634 634 634 634 Enrollment 638 631 706 666 697 733 735 633 628 648

Bookman Road Elementary SchoolSquare Feet 75,000 75,000 75,000 75,000 75,000 75,000 75,000 81,670 81,670 81,670 Capacity (Students) 660 660 660 660 660 660 660 740 740 740 Enrollment 654 655 687 685 703 617 562 571 565 565

Blythewood AcademySquare Feet 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 Capacity (Students) 150 150 150 150 150 150 150 150 150 150 Enrollment 120 120 120 80 80 82 82 85 71 92

Bridge Creek Elementary SchoolSquare Feet N/A N/A N/A N/A N/A 95,105 95,105 95,105 95,105 95,105 Capacity (Students) N/A N/A N/A N/A N/A 705 705 705 705 705 Enrollment N/A N/A N/A N/A N/A 443 491 602 591 597

Catawba Trail ElementarySquare Feet N/A N/A N/A N/A N/A N/A N/A N/A 110,771 110,771 Capacity (Students) N/A N/A N/A N/A N/A N/A N/A N/A 747 747 Enrollment N/A N/A N/A N/A N/A N/A N/A N/A 416 481

Conder Elementary SchoolSquare Feet 75,960 75,960 75,960 80,047 80,047 80,047 80,047 80,047 80,047 80,047 Capacity (Students) 712 712 712 648 648 648 648 648 648 648 Enrollment 679 608 623 627 674 698 669 699 709 766

Forest Lake Elementary SchoolSquare Feet 76,245 76,245 76,245 76,245 76,245 76,245 76,246 76,245 76,245 76,245 Capacity (Students) 687 687 687 623 623 623 623 623 623 623 Enrollment 606 535 580 564 594 582 552 600 600 649

Joseph Keels Elementary SchoolSquare Feet 75,639 75,639 75,639 78,558 78,558 78,558 78,558 78,558 78,558 78,558 Capacity (Students) 752 752 752 688 688 688 688 688 688 688 Enrollment 654 629 659 592 619 628 598 648 637 692

120




2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Killian Elementary SchoolSquare Feet 75,000 75,000 75,000 75,000 75,000 75,000 75,000 81,429 81,429 81,429 Capacity (Students) 660 660 660 660 660 660 660 740 740 740 Enrollment 501 591 576 536 576 531 537 697 710 737

Lake Carolina Elementary SchoolSquare Feet 91,635 91,635 91,635 91,635 91,635 91,635 91,635 91,635 91,635 91,635 Capacity (Students) 705 705 705 637 637 637 637 637 637 637 Enrollment 662 804 913 947 1,049 871 943 788 792 828

Langford ElementarySquare Feet N/A N/A N/A N/A N/A N/A N/A 110,771 110,771 110,771 Capacity (Students) N/A N/A N/A N/A N/A N/A N/A 747 747 747 Enrollment N/A N/A N/A N/A N/A N/A N/A 439 504 534

Lonnie B. Nelson Elementary SchoolSquare Feet 93,261 93,261 93,261 100,495 100,495 100,495 100,495 100,495 100,495 100,495 Capacity (Students) 672 672 672 664 664 664 664 608 608 608 Enrollment 613 604 602 523 586 573 538 523 573 590

North Springs Elementary SchoolSquare Feet 79,000 79,000 79,000 101,448 101,448 101,448 101,448 101,448 101,448 101,448 Capacity (Students) 618 618 618 834 834 834 834 834 834 834 Enrollment 693 764 807 785 761 710 720 749 717 719

Polo Road Elementary SchoolSquare Feet N/A N/A N/A 94,830 94,830 94,830 94,830 94,830 94,830 94,830 Capacity (Students) N/A N/A N/A 705 705 705 705 705 705 705 Enrollment N/A N/A N/A 521 622 697 722 771 587 619

Pontiac Elementary SchoolSquare Feet 89,296 89,296 89,296 89,296 89,296 89,296 89,296 89,296 89,296 89,296 Capacity (Students) 860 860 860 796 796 796 796 796 796 796 Enrollment 698 663 700 635 665 729 883 940 705 689

Rice Creek Elementary SchoolSquare Feet 90,016 90,016 90,016 90,016 90,016 90,016 90,016 90,016 90,016 90,016 Capacity (Students) 860 860 860 796 796 796 796 796 796 796 Enrollment 804 940 1,000 811 863 777 808 782 771 777

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Round Top Elementary SchoolSquare Feet 91,635 91,635 91,635 91,635 91,635 91,635 91,635 97,360 97,360 97,360 Capacity (Students) 705 705 705 637 637 637 637 637 637 637 Enrollment 436 549 594 585 700 753 776 657 630 625

Sandlapper Elementary SchoolSquare Feet N/A N/A N/A 94,500 94,500 94,500 94,500 94,500 94,500 94,830 Capacity (Students) N/A N/A N/A 705 705 705 705 705 705 705 Enrollment N/A N/A N/A 497 797 767 749 746 709 712

Windsor Elementary SchoolSquare Feet 87,356 87,356 87,356 87,356 95,563 95,563 95,563 95,563 95,563 98,973 Capacity (Students) 886 886 886 800 800 800 800 800 800 800 Enrollment 851 876 849 591 613 619 647 648 636 660

Blythewood Middle SchoolSquare Feet 121,000 121,000 121,000 127,300 127,300 127,300 127,300 127,300 127,300 127,300 Capacity (Students) 856 856 856 936 936 936 1,000 1,000 1,000 1,000 Enrollment 979 1,010 825 992 958 1,025 1,068 1,091 590 646

Dent Middle SchoolSquare Feet 161,500 161,500 161,500 198,853 198,853 198,853 198,853 198,853 198,853 198,853 Capacity (Students) 1,157 1,157 1,157 1,250 1,250 1,250 1,250 1,250 1,250 1,250 Enrollment 1,068 1,162 1,231 1,201 1,276 1,259 1,248 1,282 1,282 1,317

Kelly Mill Middle SchoolSquare Feet N/A 150,646 150,646 150,646 150,646 150,646 150,646 170,546 170,546 170,546 Capacity (Students) N/A 1,050 1,050 1,000 1,000 1,000 1,000 1,120 1,120 1,120 Enrollment N/A 733 918 1,016 958 998 1,003 1,339 921 925 CFA Enrollment N/A N/A N/A 60 76 86 89 127 93 93

LongLeaf Middle SchoolSquare Feet N/A N/A N/A N/A 150,646 150,646 150,646 150,646 150,646 150,646 Capacity (Students) N/A N/A N/A N/A 1,000 1,000 1,000 1,000 1,000 1,000 Enrollment N/A N/A N/A N/A 544 538 565 588 645 683

Muller Road MiddleSquare Feet N/A N/A N/A N/A N/A N/A N/A N/A 176,532 176,532 Capacity (Students) N/A N/A N/A N/A N/A N/A N/A N/A 1,050 1,050 Enrollment N/A N/A N/A N/A N/A N/A N/A N/A 666 698

Summit Parkway Middle SchoolSquare Feet 124,700 124,700 124,700 149,132 149,132 149,132 149,132 149,132 149,132 149,132 Capacity (Students) 986 986 986 1,250 1,250 1,250 1,250 1,250 1,250 1,250 Enrollment 1,352 1,003 1,037 1,169 835 803 818 889 878 860 CFI Enrollment 124 131 129 131 131 194 217 240 263 261 122




2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

E. L. Wright Middle SchoolSquare Feet 101,133 193,142 193,142 195,472 195,472 195,472 195,472 195,472 211,982 211,982 Capacity (Students) 1,225 1,225 1,225 1,225 1,225 1,225 1,225 1,225 1,489 1,489 Enrollment 1,268 1,223 1,190 1,213 1,068 1,067 1,025 996 1,035 1,079 CFK Enrollment 130 130 119 128 193 220 240 264 264 258

Blythewood High SchoolSquare Feet N/A N/A 229,000 299,000 299,000 299,000 299,000 299,000 299,000 299,000 Capacity (Students) N/A N/A 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700 Enrollment N/A N/A 1,218 1,564 1,879 1,976 2,052 2,073 2,146 1,588

Richland Northeast High SchoolSquare Feet 261,349 302,413 302,413 302,413 302,413 302,413 302,413 302,413 302,413 302,413 Capacity (Students) 1,746 1,743 1,743 1,751 1,751 1,751 1,750 1,750 1,750 1,750 Enrollment 1,617 1,513 1,567 1,574 1,510 1,540 1,485 1,498 1,449 1,374

Ridge View High SchoolSquare Feet 235,000 235,000 235,000 238,755 238,755 238,755 238,755 238,755 238,755 238,755 Capacity (Students) 1,703 1,703 1,703 1,703 1,703 1,703 1,700 1,700 1,700 1,700 Enrollment 2,269 2,205 1,623 1,665 1,786 1,954 2,002 1,995 2,047 1,591

Spring Valley High SchoolSquare Feet 303,987 303,987 303,987 303,987 396,607 396,607 396,607 458,812 458,812 458,812 Capacity (Students) 1,710 1,710 1,710 1,710 2,000 2,000 2,000 2,000 2,000 2,000 Enrollment 1,849 1,910 1,903 1,879 1,917 1,877 1,985 2,051 2,134 1,973

Westwood High SchoolSquare Feet N/A N/A N/A N/A N/A N/A N/A N/A N/A 328,874 Capacity (Students) N/A N/A N/A N/A N/A N/A N/A N/A N/A 1,700 Enrollment N/A N/A N/A N/A N/A N/A N/A N/A N/A 1,169

TotalSquare Feet 2,490,581 2,774,300 3,003,300 3,373,488 3,624,961 3,720,066 3,720,067 3,931,766 4,235,579 4,568,193Capacity (Students) 19,208 20,255 21,955 23,362 24,652 25,357 25,417 26,388 28,449 30,149 Enrollment 19,458 20,182 21,375 22,297 23,773 24,393 24,844 26,049 25,988 26,533

Source: District Records

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Table 20


TEACHER BASE SALARIES


StatewideMinimum Maximum Average

Fiscal Year Salary (1) Salary (1) Salary (2)

2004 28,491 61,979 41,162 2005 29,081 63,262 42,198 2006 29,546 64,274 42,959 2007 30,317 65,952 44,336 2008 31,320 68,135 45,804 2009 32,851 71,466 47,421 2010 33,180 72,180 47,508 2011 33,813 73,264 48,458 2012 33,843 73,624 49,116 2013 35,210 76,598 48,375

Source: (1) District records (2) South Carolina Department of Education

124

SINGLE AUDIT SECTION

125

RICHLAND SCHOOL DISTRICT TWOSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

FOR THE FISCAL YEAR ENDED JUNE 30, 2013

LEASubfund CFDA Grantor's Total

Fund Code Fed. Grantor/Pass-Through Grantor/Program Title Number Number Expenditures

U. S. Department of Education

Direct Programs:

100 Impact Aid 84.041 S041B-2010-4618 $ 588,135 275 Federal Magnet Grant/The International Baccalaureate Continuum 84.165A U165A100066 1,408,765 282 Project CARE 84.215E Q215E100063 358,835 276 Carol White PE Grant/Healthy Lifestyles=Stronger Communities 84.215F Q215F100046 66,112 857 Gear Up 84.334A P334A080109-10 675,240

3,097,087

Passed Through S. C. Department of Education:

243 Adult Education 84.002 13EA076 136,329 201 Title I 84.010 13BA076-01 2,589,409

203 Individuals with Disabilities Education Act 84.027 13CA076-01 4,489,097 212 Individuals with Disabilities Education Act - Extended School Year 84.027 N/A 104,337

Total 84.027 4,593,434

207 Occupational Education 84.048 13VA076 251,352 205 Individuals with Disabilities Education Act - Preschool 84.173 13CG076-01 229,346 818 McKinney Vento Homeless 84.196 13FH076 39,761 832 Small Learning Communities 84.215 S215L080665 508,625 224 21st Century Learning Grant 84.287 13CL076 892,685 264 Title III - Language Instruction for Limited English Proficient and Immigrant Students 84.365 13ET076 194,465 267 Title II Improving Teacher Quality 84.367 13BP076 195,040 100 Reimbursement for Subs 93.938 N/A 136

9,630,582

Total U. S. Department of Education 12,727,669

U. S. Department of AgriculturePassed Through S. C. Department of Education

Non-Cash Assistance (Commodities):600 School Breakfast Program 10.553 N/A 1,611,915

600 Commodities/Food Distribution 10.555 N/A 628,755 600 School Lunch Program 10.555 N/A 5,088,994

Total 10.555 5,717,749

600 Afterschool Snack & Dinner Program 10.559 N/A 59,830 600 Fresh Fruits and Vegetables 10.582 11FV076 68,682

Total U. S. Department of Agriculture 7,458,176

OTHER FEDERAL ASSISTANCE

U. S. Department of Defense Direct Programs292 Air Force, Army and Navy ROTC 12.000 N/A 249,644

297 Department of Defense 12.556 HE1254 289,786 283 Department of Defense 12.556 HE1254 463,514

Total 12.556 753,300

Total Department of Defense 1,002,944

Other Federal Awards806 National Park Service N/A N/A 5,175 294 ARRA Energy Grant 81.041 N/A 15,503

Total Other Federal Awards 20,678

TOTAL FEDERAL AWARDS $ 21,209,467

Footnotes:The accounting policies of the School District conform to accounting principles generally accepted in the United States of America applicable to governments.The Governmental Accounting Standards Board is the accepted standard-setting body for establishing governmental accounting and financial reportingprinciples. A summary of the more significant policies can be found in the notes to the financial statements of the School District's basic financial statementsfor the year ended June 30, 2013. All expenditures reported on the above Schedule of Expenditures of Federal Awards are reported on the modifiedaccrual basis of accounting as applicable to governmental funds, except for the expenditures of programs under CFDA Numbers 10.553, 10.555, 10.559 and 10.582 which are reported under the full accrual basis of accounting as applicable to enterprise funds.

130

RICHLAND COUNTY SCHOOL DISTRICT TWONOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

JUNE 30, 2013

Basis of Presentation

The accompanying schedule of expenditures of federal awards includesthe federal grant activity of Richland County School District Two and ispresented on the modified accrual basis of accounting, the same basis ofaccounting used to prepare the governmental financial statements asoutlined in the Notes to the Financial Statements.

The information in this schedule is presented inaccordance with therequirements of the Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.Therefore, some amounts presented in this schedule may differ formamounts presented in, or used in the preparation of the basic financialstatements or reported in the federal financial reports.

131

RICHLAND SCHOOL DISTRICT TWOCOLUMBIA, SOUTH CAROLINA

SCHEDULE OF FINDINGS AND QUESTIONED COSTSFOR THE YEAR ENDED JUNE 30, 2013

SECTION I - SUMMARY OF AUDITORS' RESULTS

1 The independent auditors' report on the financial statements expressed an unmodified opinion.

2 There were no significant deficiencies in internal control over financial reporting disclosed in the audit of the financial statements.

3 The audit did not disclose any material noncompliance matters in relation to the financial statements.

4 There were no significant deficiencies in internal control over compliance applicable to major programs.

5 The report on compliance for major programs expressed an unmodified opinion.

6 The audit disclosed no audit findings.

7 The major programs of the School District included in the audit were:

A. Child Nutrition Cluster - 10.553/10.555/10.559/10.582B. Special Education Cluster - 84.027/84.173C. ARRA Energy Grant - 81.041

8 The dollar threshold for Type A programs for the School District was $622,844.

9 The School District did not qualify as a low-risk auditee.

SECTION II - FINANCIAL STATEMENT FINDINGS

No matters were reported.

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

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RICHLAND SCHOOL DISTRICT TWOCOLUMBIA, SOUTH CAROLINA

SCHEDULE OF PRIOR FINDINGS AND QUESTIONED COSTSFOR THE YEAR ENDED JUNE 30, 2013

Finding 2012-1 - Accrued Payroll Related Liabilities - Material Weakness

Condition/Effect:During the audit, it was noted that the calculation and accrual of payroll related liabilities at June 30, 2011and at June 30, 2012 was incorrect. A material prior period adjustment was required to correct the error.Payroll related liabilities were overstated at June 30, 2011 by $1,600,136. The District restated beginningnet assets by the amount of $1,600,136 for the government-wide statements and restated beginning fundbalance by the amount of $1,600,136 for the General Fund. As well, payroll liabilities were understated asof June 30, 2012 and an adjustment of $801,520 was required to correctly represent the liability as ofJune 30, 2012.

Recommendation:The prior auditors recommended that the District implement controls to ensure the proper recording of payrollrelated liabilities.

Current Status:The recommendation was adopted in December 2012. No similar findings were noted in the audit for thefiscal year ended June 30, 2013.

133

RICHLAND SCHOOL DISTRICT TWO COLUMBIA, …December 2, 2013 To the Citizens of Richland School...

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