WESTERN MARICOPA EDUCATION CENTER DISTRICT NO....

WESTERN MARICOPA EDUCATION

CENTER DISTRICT NO. 402

Comprehensive Annual Financial Report

Fiscal Year Ended June 30, 2012

5487 North 99th Avenue ▪ Glendale, Arizona 85305

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402

GLENDALE, ARIZONA

COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012

Issued by: Business and Finance Department


TABLE OF CONTENTS

INTRODUCTORY SECTION Page Letter of Transmittal i ASBO Certificate of Excellence vi GFOA Certificate of Achievement vii Organization Chart viii List of Principal Officials ix FINANCIAL SECTION INDEPENDENT AUDITORS’ REPORT 1 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)

(Required Supplementary Information) 5 BASIC FINANCIAL STATEMENTS

Government-Wide Financial Statements:

Statement of Net Assets 18 Statement of Activities 19

Fund Financial Statements: Balance Sheet - Governmental Funds 22 Reconciliation of the Balance Sheet -

Governmental Funds to the Statement of Net Assets 25 Statement of Revenues, Expenditures and Changes in Fund Balances -

Governmental Funds 26 Reconciliation of the Statement of Revenues, Expenditures and

Changes in Fund Balances - Governmental Funds to the Statement of Activities 28


TABLE OF CONTENTS (Cont’d)

FINANCIAL SECTION (Cont’d) Page BASIC FINANCIAL STATEMENTS (Concl’d)

Statement of Net Assets – Proprietary Funds 29 Statement of Revenues, Expenses and Changes in Fund Net Assets –

Proprietary Funds 30

Statement of Cash Flows – Proprietary Funds 31

Notes to Financial Statements 32

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL (Required Supplementary Information)

General Fund 50 Note to Required Supplementary Information 51

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Governmental Funds:

Combining Balance Sheet - All Non-Major Governmental Funds -

By Fund Type 56 Combining Statement of Revenues, Expenditures and Changes in

Fund Balances - All Non-Major Governmental Funds - By Fund Type 57

Special Revenue Funds: Combining Balance Sheet 60 Combining Statement of Revenues, Expenditures and Changes in

Fund Balances 64

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 68


TABLE OF CONTENTS (Cont’d)

FINANCIAL SECTION (Concl’d) Page COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND

SCHEDULES (Concl’d) Capital Projects Funds:

Combining Schedule of Revenues, Expenditures and Changes in

Fund Balance – Budget and Actual 80

STATISTICAL SECTION

Financial Trends:

Net Assets by Component 85 Expenses, Program Revenues, and Net (Expense)/Revenue 86 General Revenues and Total Changes in Net Assets 88 Fund Balances – Governmental Funds 90 Governmental Funds Revenues 92 Governmental Funds Expenditures and Debt Service Ratio 94 Other Financing Sources and Uses and Net Changes in Fund Balances – Governmental Funds 96

Revenue Capacity:

Assessed Value and Estimated Actual Value of Taxable Property 97 Direct and Overlapping Property Tax Rates 98 Principal Property Taxpayers 99 Property Tax Levies and Collections 100

Debt Capacity:

Outstanding Debt by Type 101


TABLE OF CONTENTS (Concl’d)

STATISTICAL SECTION (Concl’d) Page Direct and Overlapping Governmental Activities Debt 102

Demographic and Economic Information:

County-Wide Demographic and Economic Statistics 103 Principal Employers 104

Operating Information: Full-Time Equivalent District Employees by Type 105 Operating Statistics 107

Capital Assets Information 108

(This page intentionally left blank)

INTRODUCTORY SECTION

p 623.738.1022 Western Maricopa Education Center 5487 N. 99th Avenue www.west-mec.org Glendale, AZ 85305

i

December 17, 2012 Citizens and Governing Board Western Maricopa Education Center District No. 402 5487 North 99th Avenue Glendale, Arizona 85305 State law mandates that school districts required to undergo an annual audit publish a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America and audited in accordance with auditing standards generally accepted in the United States by a certified public accounting firm licensed in the State of Arizona. Pursuant to that requirement, we hereby issue the comprehensive annual financial report of the Western Maricopa Education Center District No. 402 (District) for the fiscal year ended June 30, 2012.

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 the District has established a comprehensive internal control framework 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 accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefits, the District’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free of material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The District’s financial statements have been audited by Heinfeld, Meech & Co., P.C., a certified public accounting firm. The goal of the independent audit was to provide reasonable assurance that the financial statements of the District for the fiscal year ended June 30, 2012, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the District’s financial statements for the fiscal year ended June 30, 2012, are fairly presented in conformity with accounting principles generally accepted in the United States of America. The independent auditors’ report is presented as the first component of the financial section of this report.

ii

Accounting principles generally accepted in the United States of America 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 the MD&A and should be read in conjunction with it. The District’s MD&A can be found immediately following the report of the independent auditors. PROFILE OF THE DISTRICT The District is one of 58 public school districts located in Maricopa County, Arizona and one of two Joint Technical Education Districts. It provides a program of career and technical education from Grade 10 through Grade 12, with a current estimated enrollment of 4,636 students. The District’s Governing Board is organized under Section 15-321 of the Arizona Revised Statutes (A.R.S.). Management of the District is independent of other state or local governments. The County Treasurer collects taxes for the District, but exercises no control over its expenditures/expenses. The membership of the Governing Board consists of seven members elected by the public. Under existing statutes, the Governing Board’s duties and powers include, but are not limited to, the acquisition, maintenance and disposition of school property; the development and adoption of a school program; and the establishment, organization and operation of schools. The Board also has broad financial responsibilities, including the approval of the annual budget, and the establishment of a system of accounting and budgetary controls. The financial reporting entity consists of a primary government and its component units. A component unit is a legally separate entity that must be included in the reporting entity in conformity with generally accepted accounting principles. The District is a primary government because it is a special-purpose government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. Furthermore, there are no component units combined with the District for financial statement presentation purposes, and the District is not included in any other governmental reporting entity. Consequently, the District’s financial statements include only the funds of those organizational entities for which its elected governing board is financially accountable. The District’s major operation is education. The annual expenditure budget serves as the foundation for the District’s financial planning and control. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual expenditure budget approved by the District’s Governing Board.

iii

The expenditure budget is prepared by fund for all Governmental Funds, and includes function and object code detail for the General Fund and some Special Revenue and Capital Projects Funds. The legal level of budgetary control (that is, the level at which expenditures cannot exceed the appropriated amount) is established at the individual fund level for all funds. Funds that are not required to legally adopt a budget may have overexpenditures of budgeted funds. The budget for these funds is simply an estimate and does not prevent the District from exceeding the budget as long as the necessary revenue is earned. The District is not required to prepare an annual budget of revenue, therefore a deficit budgeted fund balance may be presented. However, this does not affect the District’s ability to expend monies. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the District operates. Local Economy. The economic condition of the West-MEC school district is solid, with expanded career and technical education programs and certifications available to students. This has helped West-MEC not only to sustain but to slowly grow through the current economic downturn. West-MEC has worked with business and industry to help build programs. With projected new programs and continued efforts to provide students with skills and tools to enter the workforce, our projected enrollment is expected to grow at approximately 350 students per year over the next five years. Fiscal year 2012 student enrollment was 16,958, calculated by formula to 4,636 average daily membership (ADM).West-MEC is a Joint Technical Education District (JTED) which the sole purpose is career and technical education. Most students remain at their home high school for career and technical education programs which are supported by West-MEC. West-MEC built its first student building in August 2011. This is home to our aviation program, with more opportunities to come. West-MEC currently has five buildings with the oldest built in 1998 and the newest completed in July 2012. The City of Phoenix is the capital and largest city of Arizona and is the county seat as well. The city encompasses an area of over 500 square miles. Phoenix is the fifth most populous city in the United States and according to the 2010 census, the population of the city was 1,445,632. The Phoenix metropolitan area is the population and economic activity center of the entire state. Phoenix is one of the leaders in the economics of the Southwestern area of the United States. The City of Phoenix maintains a Moody’s general obligation bond rating of Aa1. It enjoys a highly diversified economic base consisting of manufacturing, agriculture, tourism, construction, education, distribution centers, finance and retailing. The Phoenix metropolitan area and the rest of Maricopa County have become one of the largest regional markets in the United States. The number of manufacturing and wholesale businesses located in the metropolitan area is approaching 3,000. This growth has been stimulated by a combination of warm climate, a substantial well educated labor pool, a wide range of support industries, and a governmental climate that is supportive of economic growth and investment.

iv

A few of the major firms represented in the Phoenix metropolitan area include Honeywell International, Inc., Banner Health Systems, Wal-Mart Stores, Inc., Wells Fargo Company and Bashas’. In addition, the metropolitan area provides excellent educational and training opportunities through seven community colleges, four private colleges and graduate schools, and one state university. Maricopa County is currently the nation’s fourth largest county in terms of population size and the 14th in land area. The County’s 2011 population was estimated at 3,843,370 and is expected to grow over the next 15 years. Maricopa County has a very wide range of economic sectors supporting its substantial growth. Maricopa County has, for some time, enjoyed an unemployment rate that was somewhat lower than the national average. West-MEC is located in Maricopa County, Arizona and encompasses an area of approximately 4,254 square miles. West-MEC services the cities of Phoenix, Peoria, Glendale, Surprise, Buckeye, Avondale, Wickenburg, Youngtown, Tonopah, El Mirage, Goodyear, Litchfield Park and Tolleson. Service is the largest employment sector in the County, partly fueled by the $2+ billion per year tourist industry. The County has excellent accommodations, diverse cultural and recreational activities, and a favorable climate attracting millions to the area annually. Wholesale and retail trade is the second largest employment category, employing over a quarter million people. Manufacturing consisting primarily of high technology companies is the third largest employer. Other factors aiding economic growth include major expansions of the international airport serving the area, a favorable business climate and the presence of a well-developed and expanding transportation infrastructure. Long-term Financial Planning. During the 2011-12 school year, the District has a Cosmetology Program that accommodates 342 students. The program is open to all of our 12 member districts that are within our boundaries. The facility is located at 7565 West Peoria Avenue, Peoria, Arizona. The District, in partnership with Gateway Community College Skills Center, works together to make this program a success. The cosmetology program is licensed by the Arizona State Board of Cosmetology and is listed as the most cost effective program of its kind in the entire State of Arizona. Students have the option of choosing a time that fits their schedule, choosing from a day session, an afternoon session or an evening session. The District purchased, in Spring of 2009, two buildings located at 99th Avenue just south of Bethany Home Road. These buildings serve as a training site for teachers, student training programs, and district offices, which encompass 42,000 sq. ft. The District occupied this facility in November 2010. In November 2009, West-MEC purchased 17 acres of land in Buckeye, Arizona. This land is located at Airport Road and Van Buren. This is located approximately ½ mile south of I-10 on Airport Road and Verrado Drive. This land is slated for future development of student training programs serving the western portion of West-MEC.

v

West-MEC has received, through the generosity of the John F. Long family trust, a donation of six acres located at the Glendale Airport. This property is located on the northeast corner of Glendale Avenue and Glen Harbor Boulevard. This land had a building built during the 2010-11 school year to accommodate an Aviation Airframe and Power Plant training program. This program will be able to host 150 students upon full enrollment. Additional buildings may be built on the property which will accommodate up to three or four additional student programs. During the current fiscal year, Senate Bill (1617) was passed by the Arizona Legislature amending A.R.S. § 15-393 (D) (11). This amendment requires that joint technical education districts only include pupils in grades ten through 12 in the calculation of average daily membership. With the passage of Senate Bill (1617), Western Maricopa Education Center District no longer receives state funding for ninth grade students. This heavily impacted the budget in fiscal year 2012 and will continue to in future years. AWARDS AND ACKNOWLEDGMENTS Awards. The Association of School Business Officials (ASBO) awarded a Certificate of Excellence in Financial Reporting to the District for its comprehensive annual financial report for the fiscal year ended June 30, 2011. This was the seventh consecutive year that the District has received this prestigious award. In addition, the Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the District for its comprehensive annual financial report for the fiscal year ended June 30, 2011. In order to be awarded these certificates, the District published an easily readable and efficiently organized comprehensive annual financial report. This report satisfied both accounting principles generally accepted in the United States of America and applicable legal requirements. These certificates are valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the programs’ requirements and we are submitting it to ASBO and GFOA to determine its eligibility for the fiscal year 2011-12 certificates. Acknowledgments. The preparation of the comprehensive annual financial report on a timely basis was made possible by the dedicated service of the entire staff of the business and finance department. 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 Governing Board of the District, preparation of this report would not have been possible. Respectfully submitted,

Gregory J. Donovan Barbara Thompson Superintendent Business Director

vi

This Certificate of Excellence in Financial Reporting is presented to


For its Comprehensive Annual Financial Report (CAFR) For the Fiscal Year Ended June 30, 2011

Upon recommendation of the Association’s Panel of Review which has judged that the Report substantially conforms to principles and standards of ASBO’s Certificate of Excellence Program

President Executive Director

ix


LIST OF PRINCIPAL OFFICIALS

GOVERNING BOARD

Frank Straka Chairman

Ray Malnar

Vice Chairman

Dwight Amery Member

James Kaltenbach Member

Joe Holcombe Member

John Atkins

Member

Roger Freeman Member

ADMINISTRATIVE STAFF

Gregory J. Donovan Superintendent

Dee Markham

Executive Assistant

Cliff Migal Assistant to Superintendent

Barbara Thompson Business Director

FINANCIAL SECTION

INDEPENDENT AUDITORS’ REPORT Governing Board Western Maricopa Education Center District No. 402 We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Western Maricopa Education Center District No. 402 (District), as of and for the year ended June 30, 2012, which collectively comprise the District’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the District’s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the District, as of June 30, 2012, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated December 17, 2012, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

TUCSON • PHOENIX • FLAGSTAFF • ALBUQUERQUE www.heinfeldmeech.com

3033 N. Central Ave., Suite 300Phoenix, Arizona 85012

Tel (602) 277-9449Fax (602) 277-9297

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 5 through 14 and budgetary comparison information on pages 50 and 51 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s financial statements as a whole. The accompanying supplementary information such as the introductory section, combining and individual fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. HEINFELD, MEECH & CO., P.C. CPAs and Business Consultants December 17, 2012

MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) (Required Supplementary Information)

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402 MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A)

YEAR ENDED JUNE 30, 2012

Page 5

As management of the Western Maricopa Education Center District No. 402 (District), we offer readers of the District’s financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30, 2012. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. FINANCIAL HIGHLIGHTS

The District’s total net assets of governmental activities increased $6.3 million, which

represents a 13 percent increase from the prior fiscal year as a result of a reduction in instructional expense due to a decrease in student memberships and a decrease in support services, students and staff expenses due to one time expenses in the prior year associated with opening the aviation program. Finally, property tax revenue decreased due to a drop in assessed property values.

General revenues accounted for $20.4 million in revenue, or 90 percent of all current

fiscal year revenues. Program specific revenues in the form of charges for services and grants and contributions accounted for $2.3 million or 10 percent of total current fiscal year revenues.

The District had approximately $16.4 million in expenses related to governmental

activities, a decrease of 30 percent from the prior fiscal year due to a decrease in student membership.

Among major funds, the General Fund had $19.4 million in current fiscal year revenues,

which primarily consisted of state aid and property taxes, and $14.0 million in expenditures. The General Fund’s fund balance decrease from $30.5 million at the prior fiscal year end to $14.8 million at the end of the current fiscal year was primarily due to a $21.0 million transfer to the Unrestricted Capital Outlay Fund.

Net assets for the Internal Service Fund increased $22,262 from the prior fiscal year.

Operating revenues of $127,864 exceeded operating expenses of $105,810. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the District’s basic financial statements. The District’s basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.



Page 6

OVERVIEW OF FINANCIAL STATEMENTS (Cont’d) Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to a private-sector business. The accrual basis of accounting is used for the government-wide financial statements. The statement of net assets presents information on all of the District’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The statement of activities presents information showing how the District’s net assets changed during the most recent fiscal year. All changes in net assets 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). The government-wide financial statements outline functions of the District that are principally supported by property taxes and intergovernmental revenues. The governmental activities of the District include instruction, support services, operation and maintenance of plant services, and interest on long-term debt. 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 District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the District can be divided into two categories: governmental funds and proprietary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements use the modified accrual basis of accounting and focus on near-term inflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the District’s near-term financing requirements.



Page 7

OVERVIEW OF FINANCIAL STATEMENTS (Concl’d) 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 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. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the General Fund and the Unrestricted Capital Outlay Fund, both of which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and schedules. Proprietary funds. The District maintains one type of proprietary fund. The internal service fund is an accounting device used to accumulate and allocate costs internally among the District’s various functions. The District uses its internal service fund to account for its Lobbying Fund which accounts for financial activities related to agreements with other governments where the District is the fiscal agent. Because these activities predominately benefit governmental functions, they have been included within governmental activities in the government-wide financial statements.

Notes to the 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 financial statements can be found immediately following the basic financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the District’s budget process. The District adopts an annual expenditure budget for all governmental funds. A schedule of revenues, expenditures and changes in fund balances – budget and actual has been provided for the General Fund as required supplementary information.



Page 8

GOVERNMENT-WIDE FINANCIAL ANALYSIS Net assets may serve over time as a useful indicator of a government’s financial position. In the case of the District, assets exceeded liabilities by $53.3 million at the current fiscal year end. A portion of the District’s net assets reflects its investment in capital assets (e.g., land, leasehold improvements, buildings and improvements, vehicles, furniture and equipment and construction in progress). The District uses these capital assets to provide services to its students; consequently, these assets are not available for future spending. Although the 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. In addition, a portion of the District’s net assets, are restricted by statute for special purposes and capital outlay investment. The following table presents a summary of the District’s net assets for the fiscal years ended June 30, 2012 and June 30, 2011.

As of

June 30, 2012 As of

June 30, 2011 Current and other assets $ 31,623,529 $ 27,587,187 Capital assets, net 27,772,965 25,603,205

Total assets, net 59,396,494 53,190,392 Current and other liabilities 1,068,720 511,602 Long-term liabilities 5,032,257 5,655,757

Total liabilities 6,100,977 6,167,359 Net assets:

Invested in capital assets, net of related debt 22,995,060 20,150,300 Restricted 15,508,661 281,165 Unrestricted 14,791,796 26,591,568

Total net assets $ 53,295,517 $ 47,023,033



Page 9

GOVERNMENT-WIDE FINANCIAL ANALYSIS (Cont’d) At the end of the current fiscal year the District reported positive balances in all three categories of net assets. The same situation held true for the prior fiscal year. The District’s financial position is the product of several financial transactions including the net results of activities, the acquisition and disposal of capital assets, and the depreciation of capital assets. The following are significant current year transactions that had an impact on the Statement of Net Assets.

The addition of $3.1 million in capital assets through the purchase of vehicles, furniture and equipment and construction of new facilities.

A receivable for $3.8 million due from governmental entities for a state equalization payment that was not released until after year end.

Changes in net assets. The District’s total revenues for the current fiscal year were $22.7 million. The total cost of all programs and services was $16.4 million. The following table presents a summary of the changes in net assets for the fiscal years ended June 30, 2012 and June 30, 2011.

Fiscal Year EndedJune 30, 2012

Fiscal Year EndedJune 30, 2011

Revenues: Program revenues: Charges for services $ 919,898 $ 552,828 Operating grants and contributions 1,365,994 53,857

General revenues: Property taxes 6,686,258 8,703,638 Investment income 162,782 311,403 Unrestricted county aid 1,561,593 2,258,711 Unrestricted state aid 12,020,713 17,918,989 Unrestricted federal aid 299,048 Total revenues 22,717,238 30,098,474

Expenses: Instruction 12,804,981 17,528,425 Support services – students and staff 1,099,995 2,475,245 Support services – administration 1,966,283 2,502,796 Operation and maintenance of plant services 323,495 906,735 Interest on long-term debt 250,000

Total expenses 16,444,754 23,413,201 Change in net assets 6,272,484 6,685,273

Net assets, beginning 47,023,033 40,337,760 Net assets, ending $ 53,295,517 $ 47,023,033



Page 10

GOVERNMENT-WIDE FINANCIAL ANALYSIS (Cont’d)

The following are significant current year transactions that have had an impact on the change in net assets.

Decrease of $5.9 million in unrestricted state aid due to a legislative mandated reduction in funding.

Decrease of $4.7 million in instructional expenses due to a legislative mandated reduction in funding.

Decrease of $2.0 million in property tax revenue due to a decrease in assessed values.

Decrease of $1.4 million in support services, students and staff expenses primarily due to one time expenses associated with opening the aviation program in the prior year.

The following table presents the cost of the District’s major functional activities. The table also shows each function’s net cost (total cost less charges for services generated by the activities provided for specific programs). The net cost shows the financial burden that was placed on the State and District’s taxpayers by each of these functions.

$0

$5

$10

$15

$20

Mil

lion

s

Expenses

FY2011-12

FY2010-11



Page 11

GOVERNMENT-WIDE FINANCIAL ANALYSIS (Concl’d)

The cost of all governmental activities this year was $16.4 million.

Federal and State governments and charges for services subsidized certain programs with

grants and contributions and other local revenues of $2.3 million.

Net cost of governmental activities of $14.2 million was financed by general revenues, which are made up of primarily property taxes of $6.7 million and state aid of $12.0 million.

FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the 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 District’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of the District’s net resources available for spending at the end of the fiscal year. The financial performance of the District as a whole is reflected in its governmental funds. As the District completed the year, its governmental funds reported a combined fund balance of $30.3 million, an increase of $3.9 million due primarily to a decrease in instructional expenditures due to legislative mandated reduction in funding.

Year Ended June 30, 2012 Year Ended June 30, 2011 Total

Expenses Net (Expense)/

Revenue Total

Expenses Net (Expense)/

Revenue Instruction $ 12,804,981 $ (10,542,613) $ 17,528,425 $ (16,921,990)Support services – students and staff 1,099,995 (1,099,995) 2,475,245 (2,475,245)Support services – administration 1,966,283 (1,966,283) 2,502,796 (2,502,796)Operation and maintenance of plant services 323,495 (299,971) 906,735 (906,485)Interest on long-term debt 250,000 (250,000)

Total $ 16,444,754 $ (14,158,862) $ 23,413,201 $ (22,806,516)



Page 12

FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS (Concl’d) The General Fund is the principal operating fund of the District. The decrease in fund balance of $15.7 million to $14.8 million as of fiscal year end was primarily a result of a $21.0 million transfer to the Unrestricted Capital Outlay Fund. General Fund revenues decreased $6.6 million as a result of a reduction in state aid revenue due to a decrease in student membership. General Fund expenditures decreased $9.2 million as a result of a reduction in instructional expenditures due to a legislative mandated reduction in funding. Unrestricted Capital Outlay Fund revenue decreased $1.5 million as a result of a decrease in state aid revenue. Unrestricted Capital Outlay Fund expenditures decreased $11.0 million as a result of less construction activity in the current fiscal year. Proprietary funds. Unrestricted net assets of the Internal Service Fund at the end of the fiscal year amounted to $45,761. The increase of $22,262 from the prior fiscal year was insignificant. BUDGETARY HIGHLIGHTS Over the course of the year, the District revised the General Fund annual expenditure budget due to a reallocation of budgeted expenditures from the General Fund to the Unrestricted Capital Outlay Fund. The difference between the original budget and the final amended budget was a $3.4 million decrease, or 19 percent. Significant variances for the final amended budget and actual revenues resulted from the District not being required by the State of Arizona to prepare a revenue budget. A schedule showing the original and final budget amounts compared to the District’s actual financial activity for the General Fund is provided in this report as required supplementary information. The significant variance is summarized as follows:

The favorable variance of $1.3 million in instruction was a result of unspent budget balance carryforward from the prior fiscal year, and less than expected salary expenditures.

CAPITAL ASSETS AND DEBT ADMINISTRATION At year end, the District had invested $29.2 million in capital assets, including land, leasehold improvements, buildings and improvements, vehicles, furniture, and equipment. This amount represents a net increase prior to depreciation of $3.1 million from the prior fiscal year, primarily due to the construction of a warehouse at the aviation facility. Total depreciation expense for the current fiscal year was $887,748.



Page 13

CAPITAL ASSETS AND DEBT ADMINISTRATION (Concl’d) The following schedule presents a summary of capital asset balances for the fiscal years ended June 30, 2012 and June 30, 2011.

As of June 30, 2012

As of June 30, 2011

Capital assets – non depreciable $ 9,220,815 $ 6,876,345 Capital assets – depreciable, net 18,552,150 18,726,860

Total $ 27,772,965 $ 25,603,205 The estimated cost to complete current construction projects is $866,862. Additional information on the District’s capital assets can be found in Note 6.

Debt Administration. At year end, the District had $4.8 million in long-term debt outstanding, $250,000 due within one year. This represents a net decrease of $675,000 due to the principal retirement of the District’s lease.

Additional information on the District’s long-term debt can be found in Notes 7 and 8. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES Many factors were considered by the District’s administration during the process of developing the fiscal year 2012-13 budget. Among them:

Fiscal year 2011-12 budget balance carry forward (estimated $637,063) Employee salaries. District student population (estimated 16,958)

Also considered in the development of the budget is the local economy and inflation of the surrounding area.

Budgeted expenditures in the General Fund increased 22 percent to $18.3 million in fiscal year 2012-13. This was a result of an increase in enrollment and an increase in instructional and support services staffing. State aid and property taxes are expected to be the primary funding sources. The aviation program was added to the 2012-13 budget.



Page 14

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, and investors and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the resources it receives. If you have questions about this report or need additional information, contact the Business and Finance Department, Western Maricopa Education Center District No. 402, 5487 North 99th Avenue, Glendale, Arizona 85305.

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS

ASSETSCurrent assets:

Cash and investmentsProperty taxes receivableDue from governmental entities

Total current assets

Noncurrent assets:LandLeasehold improvementsBuildings and improvementsVehicles, furniture and equipmentConstruction in progressAccumulated depreciation

Total noncurrent assetsTotal assets

LIABILITIESCurrent liabilities:

Accounts payableConstruction contracts payableCompensated absences payableUnearned revenuesObligations under capital leases

Total current liabilities

Noncurrent liabilities:Non-current portion of long-term obligations

Total noncurrent liabilitiesTotal liabilities

NET ASSETSInvested in capital assets, net of related debtRestricted for:

Federal and state projectsOther local initiativesCapital outlay

UnrestrictedTotal net assets

Governmental Activities

$ 27,525,540234,935

3,863,05431,623,529

6,876,345780,549

18,021,6031,171,4352,344,470

(1,421,437)27,772,96559,396,494

425,875642,83448,685

11250,000

1,367,405

4,733,5724,733,5726,100,977

22,995,060

299,05044,153

15,165,45814,791,796

$ 53,295,517

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402STATEMENT OF NET ASSETS

JUNE 30, 2012

The notes to the basic financial statements are an integral part of this statement.Page 18

Program Revenues

Net (Expense) Revenue and

Changes in Net Assets

Functions/ProgramsGovernmental activities:

InstructionSupport services - students and staffSupport services - administrationOperation and maintenance of plant services

Interest on long-term debtTotal governmental activities

Expenses

$ 12,804,9811,099,9951,966,283

323,495250,000

$ 16,444,754

Charges for Services

$ 919,898

$ 919,898

Operating Grants and

Contributions

$ 1,342,470

23,524

$ 1,365,994

Governmental Activities

$ (10,542,613)

(1,099,995)(1,966,283)

(299,971)(250,000)

(14,158,862)

General revenues:Taxes:

Property taxes, levied for general purposesInvestment incomeUnrestricted county aidUnrestricted state aid

Total general revenues

Changes in net assets

Net assets, beginning of year

Net assets, end of year

6,686,258162,782

1,561,59312,020,71320,431,346

6,272,484

47,023,033

$ 53,295,517

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402STATEMENT OF ACTIVITIESYEAR ENDED JUNE 30, 2012

Page 19The notes to the basic financial statements are an integral part of this statement.

FUND FINANCIAL STATEMENTS

ASSETSCash and investmentsProperty taxes receivableDue from governmental entitiesDue from other funds

Total assets

LIABILITIES AND FUND BALANCESLiabilities:

Accounts payableConstruction contracts payableDue to other fundsDeferred revenues

Total liabilities

Fund balances:RestrictedUnassigned

Total fund balances

Total liabilities and fund balances

General

$ 11,905,759234,935

3,190,25810,517

$ 15,341,469

$ 341,082

184,673525,755

14,815,71414,815,714

$ 15,341,469

Unrestricted Capital Outlay

$ 15,250,458

624,471

$ 15,874,929

$ 66,637642,834

709,471

15,165,458

15,165,458

$ 15,874,929

Non-Major Governmental

Funds

$ 323,562

48,325

$ 371,887

$ 18,156

10,51712,31440,987

330,900

330,900

$ 371,887

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402 BALANCE SHEET - GOVERNMENTAL FUNDS

JUNE 30, 2012

Page 22

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

Total Governmental

Funds

$ 27,479,779234,935

3,863,05410,517

$ 31,588,285

$ 425,875642,83410,517

196,9871,276,213

15,496,35814,815,71430,312,072

$ 31,588,285

Page 23

Total governmental fund balances $ 30,312,072

Amounts reported for governmental activities in the Statement of Net Assets are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.

Governmental capital assets $ 29,194,402Less accumulated depreciation (1,421,437) 27,772,965

Some revenues will not be available to pay for current-period expenditures and, therefore, are deferred in the funds.

Property taxes 184,673 Intergovernmental 12,303 196,976

The Internal Service Fund is used by management to charge jointly funded operations. The assets and liabilities of the Internal Service Fund are included in the Statement of Net Assets. 45,761

Long-term liabilities are not due and payable in the current period and, therefore, is not reported in the funds

Compensated absences payable (254,352) Obligations under capital leases (4,777,905) (5,032,257)

Net assets of governmental activities $ 53,295,517

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET ASSETSJUNE 30, 2012

Page 25 The notes to the basic financial statements are an integral part of this statement.

Revenues:Other localProperty taxesState aid and grantsFederal aid, grants and reimbursements

Total revenues

Expenditures:Current -


Capital outlayDebt service -

Principal retirementInterest and fiscal charges

Total expenditures

Excess (deficiency) of revenues over expenditures

Other financing sources (uses):Transfers inTransfers out

Total other financing sources (uses):

Changes in fund balances

Fund balances (deficits), beginning of year

Increase (decrease) in reserve for prepaid items

Fund balances (deficits), end of year

General

$ 2,427,8056,853,602

10,120,393

19,401,800

10,926,6281,031,2431,706,899

304,3055,988

13,975,063

5,426,737

(20,985,458)(20,985,458)

(15,558,721)

30,486,632

(112,197)

$ 14,815,714


$ 208,762

1,980,998

2,189,760

2,870,544

675,000250,000

3,795,544

(1,605,784)

20,985,458

20,985,458

19,379,674

(4,214,216)

$ 15,165,458


Funds

$ 38,530

278,1491,212,3241,529,003

1,355,52610,517

11,221

1,377,264

151,739

151,739

179,161

$ 330,900

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -

GOVERNMENTAL FUNDSYEAR ENDED JUNE 30, 2012


Total Governmental

Funds

$ 2,675,0976,853,602

12,379,5401,212,324

23,120,563

12,282,1541,041,7601,706,899

315,5262,876,532

675,000250,000

19,147,871

3,972,692

20,985,458

(20,985,458)

3,972,692

26,451,577

(112,197)

$ 30,312,072

Page 27

Net changes in fund balances - total governmental funds $ 3,860,495

Amounts reported for governmental activities in the Statement of Activitiesare different because:

Governmental funds report the portion of capital outlay for capitalized assets as expenditures. However, in the Statement of Activities, the cost of those assets are allocated over their estimated useful lives as depreciation expense.

Expenditures for capitalized assets 3,057,508$ Less current year depreciation (887,748) 2,169,760

Some revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.

Property taxes (167,344)Intergovernmental (236,189) (403,533)

Capital lease principal retirement are expenditures in the governmental funds, but the repayment reduces long-term liabilities in the Statementof Net Assets. 675,000

Compensated absences reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. (51,500)

The Internal Service Fund is used by management to chargejointly funded operations. The changes in net assets of the Internal Service Fund is reported with governmental activitiesin the Statement of Activities. 22,262

Change in net assets in governmental activities $ 6,272,484

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS

YEAR ENDED JUNE 30, 2012TO THE STATEMENT OF ACTIVITIES


ASSETSCurrent assets:

Cash and investmentsTotal current assets

Total assets

NET ASSETSUnrestricted

Total net assets

Governmental Activities:

Internal Service Funds

$ 45,76145,76145,761

45,761$ 45,761

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402STATEMENT OF NET ASSETS

PROPRIETARY FUNDSJUNE 30, 2012


Operating revenues:Contributions

Total operating revenues

Operating expenses:Cost of services

Total operating expenses

Operating income (loss)

Nonoperating revenues (expenses):Investment income

Total nonoperating revenues (expenses)

Changes in net assets

Total net assets, beginning of year

Total net assets, end of year


Internal Service Funds

$ 127,864127,864

105,810105,810

22,054

208208

22,262

23,499

$ 45,761

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS -

PROPRIETARY FUNDSFOR THE YEAR ENDED JUNE 30, 2012



Internal ServiceFunds

Cash flows from operating activities:Cash received from contributions $ 127,864 Cash payments to suppliers for goods and services (105,810)

Net cash provided by operating activities 22,054

Cash flows from investing activities:Investment Income 208

Net cash provided by investing activities 208

Increase in cash and cash equivalents 22,262

Cash and cash equivalents, beginning of year 23,499

Cash and cash equivalents, end of year $ 45,761

STATEMENT OF CASH FLOWS - PROPRIETARY FUNDSWESTERN MARICOPA EDUCATION CENTER DISTRICT N0. 402



WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402 NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2012

Page 32

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Western Maricopa Education Center District No. 402 (District) have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the District’s accounting policies are described below. A. Reporting Entity The Governing Board is organized under Section 15-321 of the Arizona Revised Statutes (A.R.S.). Management of the District is independent of other state or local governments. The County Treasurer collects taxes for the District, but exercises no control over its expenditures/expenses. The membership of the Governing Board consists of seven members elected by the public. Under existing statutes, the Governing Board’s duties and powers include, but are not limited to, the acquisition, maintenance and disposition of school property; the development and adoption of a school program; and the establishment, organization and operation of schools. The Board also has broad financial responsibilities, including the approval of the annual budget, and the establishment of a system of accounting and budgetary controls. The financial reporting entity consists of a primary government and its component units. A component unit is a legally separate entity that must be included in the reporting entity in conformity with generally accepted accounting principles. The District is a primary government because it is a special-purpose government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. Furthermore, there are no component units combined with the District for financial statement presentation purposes, and the District is not included in any other governmental reporting entity. Consequently, the District’s financial statements include only the funds of those organizational entities for which its elected governing board is financially accountable. The District’s major operations include education and construction and maintenance of District facilities.


JUNE 30, 2012

Page 33

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) B. Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) present financial information about the District as a whole. The reported information includes all of the nonfiduciary activities of the District. For the most part, the effect of internal activity has been removed from these statements. These statements are to distinguish between the governmental and business-type activities of the District. Governmental activities normally are supported by taxes and intergovernmental revenues, and are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The District does not have any business-type activities. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment. Taxes, unrestricted State and County aid, and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental and proprietary funds. Major individual governmental funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Government-Wide Financial Statements - The 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 related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. As a general rule, the effect of internal activity has been eliminated from the government-wide financial statements; however, the effects of interfund services provided and used between functions are reported as expenses and program revenues at amounts approximating their external exchange value.


JUNE 30, 2012

Page 34

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Fund Financial Statements - Governmental fund financial statements are reported using the 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 District 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. Compensated absences are recorded only when payment is due. Property taxes, State and County aid, and investment income associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. Miscellaneous revenues are not susceptible to accrual because generally they are not measurable until received in cash. Grants and similar awards are recognized as revenue as soon as all eligibility requirements imposed by the grantor or provider have been met. Deferred revenues arise when resources are received by the District before it has legal claim to them, as when grant monies are received prior to meeting all eligibility requirements imposed by the provider. Delinquent property taxes and other receivables that will not be collected within the available period have been reported as deferred revenue on the governmental fund financial statements. The focus of governmental 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. The Internal Service Fund is presented in a single column on the face of the proprietary fund statements. The District reports the following major governmental funds:

General Fund – The General Fund is the District’s primary operating fund. It accounts for all resources used to finance District maintenance and operation except those required to be accounted for in other funds. The General Fund includes the District’s Maintenance and Operation Fund as well as the School Plant, Auxiliary Operations, Insurance Proceeds and Soft Capital Allocation Funds.

Unrestricted Capital Outlay Fund - The Unrestricted Capital Outlay Fund accounts for transactions relating to the acquisition of capital items.


JUNE 30, 2012

Page 35

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Additionally, the District reports the following fund type: Proprietary Fund – The Proprietary Fund is an Internal Service Fund that accounts for activities related to agreements with other governments where the District is the fiscal agent. The Proprietary Fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting and are presented in a single column. Proprietary funds distinguish operating revenues and expenses from nonoperating 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 principal operating revenues of the District’s internal service fund is contributions for shared lobbying services. Operating expenses for the internal service fund include the cost of professional lobbying services. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. D. Cash and Investments For purposes of the Statement of Cash Flows, the District considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents at year end were cash and investments held by the County Treasurer. A.R.S. require the District to deposit certain cash with the County Treasurer. That cash is pooled for investment purposes. Interest earned from investments purchased with pooled monies is allocated to each of the District’s funds based on their average balances. All investments are stated at fair value. E. Investment Income Investment income is composed of interest, dividends, and net changes in the fair value of applicable investments. Investment income is included in other local revenue in the fund financial statements. F. Receivables and Payables Activity between funds that is representative of lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.”


JUNE 30, 2012

Page 36

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d) All receivables, including property taxes receivable, are shown net of an allowance for uncollectibles. G. Property Tax Calendar Property tax levies are obtained by applying tax rates against either the primary assessed valuation or the secondary assessed valuation. Primary and secondary valuation categories are composed of the exact same properties. However, the primary category limits the increase in property values to 10% from the previous year, while there is no limit to the increase in property values for secondary valuation. Override and debt service tax rates are applied to the secondary assessed valuation and all other tax rates are applied to the primary assessed valuation. The County levies real property taxes on or before the third Monday in August, which become due and payable in two equal installments. The first installment is due on the first day of October and becomes delinquent after the first business day of November. The second installment is due on the first day of March of the next year and becomes delinquent after the first business day of May. The billings are considered past due after these dates, at which time the applicable property is subject to penalties and interest.

The County also levies various personal property taxes during the year, which are due the second Monday of the month following receipt of the tax notice, and become delinquent 30 days thereafter. Pursuant to A.R.S., a lien against assessed real and personal property attaches on the first day of January preceding assessment and levy; however according to case law, an enforceable legal claim to the asset does not arise. H. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. Prepaid items are recorded as expenses when consumed in the government-wide financial statements and when purchased in the funds. I. Capital Assets Capital assets, which include land, leasehold improvements, buildings and improvements; vehicles, furniture and equipment; and construction in progress, are reported in the government-wide financial statements.


JUNE 30, 2012

Page 37

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Concl’d) Capital assets are defined by the District as assets with an initial, individual cost in excess of $5,000 and an estimated useful life of more than one year. Such assets are recorded at historical cost, or estimated historical cost if actual historical cost is not available. Donated capital assets are recorded at the estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the life of the asset are not capitalized. Capital assets are depreciated using the straight-line method over the following estimated useful lives:

Leasehold improvements 5-10 years Buildings and improvements 40-50 years Vehicles, furniture and equipment 3 - 15 years

J. Compensated Absences The District’s employee vacation, sick leave and personal leave policies generally provide for granting vacation and sick leave with pay. Full-time employees earn sick leave at the rate of one day per month. In the event of termination, an employee is reimbursed for accrued sick leave and unused vacation at the employee’s current daily rate. All twelve-month employees earn vacation based on years of service or the employee’s contract. The current and long-term liabilities, including related benefits, for accumulated vacation and sick leave are reported on the government-wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee leave, resignations and retirements. Generally, resources from the General Fund are used to pay for compensated absences.

K. Interfund Activity Flows of cash from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers between governmental funds are eliminated in the Statement of Activities. Interfund transfers in the fund financial statements are reported as other financing sources/uses in governmental funds. L. Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.


JUNE 30, 2012

Page 38

NOTE 2 – FUND BALANCE CLASSIFICATIONS Fund balances of the governmental funds are reported separately within classifications based on a hierarchy of the constraints placed on the use of those resources. The classifications are based on the relative strength of the constraints that control how the specific amounts can be spent. The classifications are nonspendable, restricted, and unrestricted, which includes committed, assigned, and unassigned fund balance classifications. Nonspendable. The nonspendable fund balance classification includes amounts that cannot be spent because they are not in spendable form, or legally or contractually required to be maintained intact.

Restricted. Fund balance is reported as restricted when constraints placed on the use of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or is imposed by law through constitutional provisions or enabling legislation. Committed. The committed fund balance classification includes amounts that can be used only for the specific purposes imposed by formal action of the Governing Board. Those committed amounts cannot be used for any other purpose unless the Governing Board removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. The District does not have a formal policy or procedures for the utilization of committed fund balance, accordingly, no committed fund balance amounts are reported.

Assigned. Amounts in the assigned fund balance classification are intended to be used by the District for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds other than the General Fund, assigned fund balance represents the remaining amount that is not restricted or committed. In the General Fund, assigned amounts represent intended uses established by the Governing Board or a management official delegated that authority by the formal Governing Board action. The District does not have a formal policy for the utilization of assigned fund balance, accordingly, no assigned fund balance amounts are reported. Unassigned. Unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not contained in the other classifications. In other governmental funds, the unassigned classification is used only to report a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed, or assigned. The District applies restricted resources first when expenditures are incurred for purposes for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are available. Similarly, within unrestricted fund balance, committed amounts are reduced first followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used.


JUNE 30, 2012

Page 39

NOTE 2 – FUND BALANCE CLASSIFICATIONS (Concl’d)

The table below provides detail of the major components of the District’s fund balance classifications at year end.

General Fund


Fund


Funds Fund Balances:

Restricted: Capital projects $ $ 15,165,458 $ Voter approved initiatives 286,747 Other purposes 44,153

Unassigned 14,815,714 Total fund balances $ 14,815,714 $ 15,165,458 $ 330,900

NOTE 3 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

Excess Expenditures Over Budget – At year end, the District had expenditures in funds that exceeded the budgets, however this does not constitute a violation of any legal provisions.

NOTE 4 – CASH AND INVESTMENTS

A.R.S. authorize the District to invest public monies in the State Treasurer’s local government investment pools, the County Treasurer’s investment pool, obligations of the U.S. Government and its agencies, obligations of the State and certain local government subdivisions, interest-bearing savings accounts and certificates of deposit, collateralized repurchase agreements, certain obligations of U.S. corporations, and certain other securities. The statutes do not include any requirements for credit risk, custodial credit risk, concentration of credit risk, interest rate risk, or foreign currency risk for the District’s investments. Custodial Credit Risk – Deposits. Custodial credit risk is the risk that in the event of bank failure the District’s deposits may not be returned to the District. The District does not have a deposit policy for custodial credit risk.


JUNE 30, 2012

Page 40

NOTE 4 – CASH AND INVESTMENTS (Concl’d) The State Treasurer’s pools are external investment pools, the Local Government Investment Pool (Pool 5) and Local Government Investment Pool-Government (Pool 7), with no regulatory oversight. The pools are not required to register (and are not registered) with the Securities and Exchange Commission. The activity and performance of the pools are reviewed monthly by the State Board of Investment. The fair value of each participant’s position in the State Treasurer investment pools approximates the value of the participant’s shares in the pool and the participants’ shares are not identified with specific investments. No regulatory oversight is provided for the County Treasurer’s investment pool and that pool’s structure does not provide for shares. At year end, the District’s investments consisted of the following.

Average Maturities Fair Value County Treasurer’s investment pool 375 days $ 27,525,540Total $ 27,525,540

Interest Rate Risk. The District does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Credit Risk. The District has no investment policy that would further limit its investment choices. As of year end, the District’s investment in the County Treasurer’s investment pool did not receive a credit quality rating from a national rating agency. Custodial Credit Risk - Investments. The District’s investment in the County Treasurer’s investment pool represents a proportionate interest in the pool’s portfolio; however, the District’s portion is not identified with specific investments and is not subject to custodial credit risk.


JUNE 30, 2012

Page 41

NOTE 5 – RECEIVABLES Receivable balances, net of allowance for uncollectibles, have been disaggregated by type and presented separately in the financial statements with the exception of due from governmental entities. Due from governmental entities, net of allowance for uncollectibles, as of year end for the District’s individual major funds and non-major governmental funds in the aggregate, were as follows.

General

Fund


Fund


Funds Due from other governmental entities:

Due from Federal government $ $ $ 28,869Due from State government 3,190,258 624,471 19,456

Net due from governmental entities $ 3,190,258 $ 624,471 $ 48,325 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. At the end of the current fiscal year, the various components of deferred revenue reported in the governmental funds were as follows. Unavailable Unearned Delinquent property taxes receivable (General Fund) $ 184,673 $ Grant drawdowns prior to meeting all eligibility

requirements (Non-Major Governmental Funds) 11 Measurable but unavailable revenues (Non-Major

Governmental Funds) 12,303Total deferred revenue for governmental funds $ 196,976 $ 11


JUNE 30, 2012

Page 42

NOTE 6 – CAPITAL ASSETS A summary of capital asset activity for the current fiscal year follows.

Governmental Activities BeginningBalance Increase Decrease

EndingBalance

Capital assets, not being depreciated: Land $ 6,876,345 $ $ $ 6,876,345 Construction in progress 2,344,470 2,344,470

Total capital assets, not being depreciated 6,876,345 2,344,470 9,220,815

Capital assets, being depreciated: Leasehold improvements 780,549 780,549 Buildings and improvements 17,919,616 101,987 18,021,603 Vehicles, furniture and equipment 560,384 611,051 1,171,435

Total capital assets being depreciated 19,260,549 713,038 19,973,587 Less accumulated depreciation for:

Leasehold improvements (358,005) (159,443) (517,448)Buildings and improvements (102,075) (556,529) (658,604)Vehicles, furniture and equipment (73,609) (171,776) (245,385)

Total accumulated depreciation (533,689) (887,748) (1,421,437)

Total capital assets, being depreciated, net 18,726,860 (174,710) 18,552,150 Governmental activities capital assets, net $ 25,603,205 $ 2,169,760 $ $ 27,772,965

Depreciation expense was charged to governmental functions as follows.

Instruction $ 633,883Support services – students and staff 27,920 Support services – administration 221,645 Operation and maintenance of plant services 4,300 Total depreciation expense – governmental activities $ 887,748

Construction Commitments – At year end, the District had contractual commitments related to various capital projects for the new construction of a warehouse at Aviation and renovations to the Cosmetology building. At year end the District had spent $2.3 million on the projects and had estimated remaining contractual commitments of $866,862. These projects are being funded with Unrestricted Capital Outlay Fund revenues.


JUNE 30, 2012

Page 43

NOTE 7 – OBLIGATIONS UNDER LEASES Capital Leases – The District has acquired land and buildings under the provisions of a long-term lease agreement classified as a capital lease. The lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of its future minimum lease payments as of the inception date. Revenues from the Unrestricted Capital Outlay Fund are used to pay the capital lease obligation. The assets acquired through capital leases that meet the District’s capitalization threshold are as follows.

Governmental

Activities Asset:

Land $ 514,553 Buildings and improvements 4,938,352 Less: Accumulated depreciation 98,709

Total $ 5,354,196 The future minimum lease obligations and the net present value of these minimum lease payments at year end were as follows.

Year Ending June 30: Governmental

Activities 2013 $ 500,0002014 500,0002015 750,0002016 4,027,905

Total minimum lease payments 5,777,905 Less: amount representing interest 1,000,000 Present value of minimum lease payments $ 4,777,905 Due within one year $ 250,000


JUNE 30, 2012

Page 44

NOTE 7 – OBLIGATIONS UNDER LEASES (Concl’d) Operating Leases – The District leases a building for its cosmetology classes under the provisions of a long-term lease agreement classified as an operating lease for accounting purposes. Rental expenditures under the terms of the operating lease for the District's cosmetology classes totaled $118,484 for the year ended June 30, 2012. The cosmetology operating lease has a remaining noncancelable lease term of one year and provides for a renewal option. Additionally, the District entered into an operating lease agreement with Freightliner for the medium/heavy diesel program totaling $64,638. The diesel program operating lease has a remaining noncancelable lease term of three years and provides for a renewal option. The future minimum rental payments required under the operating leases at year end, were as follows.

Year Ending June 30:

2013 $ 107,9342014 68,040 2015 68,040

Total minimum payments required $ 244,014 NOTE 8 – CHANGES IN LONG-TERM LIABILITIES

Long-term liability activity for the current fiscal year follows.

Beginning Balance Additions Reductions

Ending Balance

Due Within One Year

Governmental activities: Obligations under capital leases $ 5,452,905 $ $ 675,000 $ 4,777,905 $ 250,000 Compensated absences payable 202,852 141,079 89,579 254,352 48,685 Governmental activity long-term

liabilities $ 5,655,757 $ 141,079 $ 764,579 $ 5,032,257 $ 298,685


JUNE 30, 2012

Page 45

NOTE 9 – INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS

At year end, interfund balances were as follows. Due to/from other funds:

Due from

Due to General

FundNon-Major Governmental Funds $ 10,517Total $ 10,517

At year end, the Other State Projects Fund had a negative cash balance in the Treasurer’s pooled cash accounts. Negative cash on deposit with the County Treasurer was reduced by interfund borrowing with the General Fund. The interfund balance is expected to be paid within one year. Interfund transfers:

Transfers in

Transfers out


FundGeneral Fund $ 20,985,458Total $ 20,985,458

Transfers between funds were used to transfer excess cash to the Unrestricted Capital Outlay Fund.

NOTE 10 – RISK MANAGEMENT

The 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 District was unable to obtain general property and liability insurance at a cost it considered to be economically justifiable. Therefore, the District joined the Arizona School Risk Retention Trust, Inc. (ASRRT). ASRRT is a public entity risk pool currently operating as a common risk management and insurance program for school districts and community colleges in the State. The District pays an annual premium to ASRRT for its general insurance coverage. The agreement provides that ASRRT will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of specified amounts.


JUNE 30, 2012

Page 46

NOTE 10 – RISK MANAGEMENT (Concl’d) The District’s employees have health and accident insurance coverage with the Arizona School Board Association Insurance Trust (ASBAIT). ASBAIT is a public entity risk pool currently operating as a common risk management and insurance program for school districts in the State. The District pays a monthly premium to ASBAIT for employees’ health and accident insurance coverage. The agreement provides that ASBAIT will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of specified amounts. The District joined the Arizona School Alliance for Workers’ Compensation, Inc. (Alliance) together with other school districts in the state for risks of loss related to workers’ compensation claims. The Alliance is a public entity risk pool currently operating as a common risk management and insurance program for school districts in the State. The District pays quarterly premiums to the Alliance for its employee workers’ compensation coverage. The agreement provides that the Alliance will be self-sustaining through members’ premiums and will reinsure through commercial companies for claims in excess of specified amounts for each insured event.

NOTE 11 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS

The District contributes to the Arizona State Retirement System (ASRS). The ASRS administers a cost-sharing, multiple-employer defined benefit pension plan; a cost-sharing, multiple-employer defined health insurance premium plan; and a cost-sharing, multiple-employer defined benefit long-term disability plan that covers employees of the State of Arizona and employees of participating political subdivisions and school districts. The ASRS is governed by the Arizona State Retirement System Board according to the provisions of A.R.S. Title 38, Chapter 5, Article 2. Plan Description – Benefits are established by state statute and the plan generally provides retirement, long-term disability, and health insurance premium benefits, including death and survivor benefits. The retirement benefits are generally paid at a percentage, based on years of service, of the retirees’ average compensation. Long-term disability benefits vary by circumstance, but generally pay a percentage of the employee’s monthly compensation. Health insurance premium benefits are paid as a fixed dollar amount per month towards the retiree’s healthcare insurance premiums, in amounts based on whether the benefit is for the retiree or for the retiree and his or her dependents. The ASRS issues a comprehensive annual financial report that includes financial statements and required supplementary information. The most recent report may be obtained by writing the ASRS, 3300 North Central Avenue, P.O. Box 33910, Phoenix, Arizona 85067-3910 or by calling (602) 240-2000 or (800) 621-3778. The report is also available on the ASRS’ website at www.azasrs.gov.


JUNE 30, 2012

Page 47

NOTE 11 – PENSIONS AND OTHER POSTEMPLOYMENT BENEFITS (Concl’d)

Funding Policy – The Arizona State Legislature establishes and may amend active plan members’ and the District’s contribution rates. For the current fiscal year, active ASRS members were required by statute to contribute at the actuarially determined rate of 10.74 percent (10.50 percent for retirement and 0.24 percent for long-term disability) of the members’ annual covered payroll and the District was required by statute to contribute at the actuarially determined rate of 10.74 percent (9.87 percent for retirement, 0.63 percent for health insurance premium, and 0.24 percent for long-term disability) of the members’ annual covered payroll.

The District’s contributions for the current and two preceding years, all of which were equal to the required contributions, were as follows:

Retirement Fund Health Benefit

Supplement Fund Long-Term

Disability Fund Years ended June 30,

2012 $ 159,843 $ 10,203 $ 3,8872011 107,883 7,064 2,9932010 63,799 5,049 3,060

NOTE 12 – JOINTLY FUNDED OPERATIONS The District is the fiscal agent for an agreement among other State of Arizona joint technical education districts primarily to fund the services of a lobbyist, as well as costs for joint meetings and ventures among the Joint Technical Education Districts.

NOTE 13 – SUBSEQUENT EVENTS

In November of 2012, the District’s taxpayers authorized $75.0 million in general obligation school improvement bonds. Also, in the same month, Tolleson Union High School District joined the District, while Fowler Elementary School District exited. Additionally, the District signed a contract with McCarthy Builders to construct a building, which will be used for student programs. The estimated cost of construction is $7.2 million funded with Unrestricted Capital Outlay Fund revenue. Finally in the subsequent fiscal year, the District has a conflict of interest between a Governing Board member and one of the District’s vendors. The Governing Board member is the Executive Director of Business Development and Client Services for McCarthy Builders. During the subsequent fiscal year, the District has a contract in place with McCarthy Builders to construct a new building at an estimated cost of $7.2 million and complete the warehouse at the aviation facility at an estimated cost of $607,057.

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(Required Supplementary Information)

Revenues:Other localProperty taxesState aid and grants

Total revenues



Total expenditures


Other financing sources (uses):Transfers out



Fund balances, beginning of year

Increase (decrease) in reserve for prepaid items

Fund balances, end of year

Budgeted Amounts

Original

$ 1,550,7576,853,6029,444,887

17,849,246

13,549,7191,725,9492,511,780

730,66218,518,110

(668,864)

(11,449,618)(11,449,618)

(12,118,482)

20,273,382

$ 8,154,900

Final

$ 1,550,7576,853,6029,443,887

17,848,246

11,833,8221,071,6971,784,200

384,77615,074,495

2,773,751

(11,449,618)(11,449,618)

(8,675,867)

20,273,382

$ 11,597,515

Non-GAAP Actual

$ 1,784,1176,853,6029,545,577

18,183,296

10,577,221987,650

1,675,883303,505

13,544,259

4,639,037

(11,449,618)(11,449,618)

(6,810,581)

20,431,638

(112,197)

$ 13,508,860

Variance with Final Budget

Positive (Negative)

$ 233,360

101,690335,050

1,256,60184,047

108,31781,271

1,530,236

1,865,286

1,865,286

158,256

(112,197)

$ 1,911,345

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402SCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUALGENERAL


Page 50See accompanying notes to this schedule.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402 NOTE TO REQUIRED SUPPLEMENTARY INFORMATION

JUNE 30, 2012

Page 51

NOTE 1 - BUDGETARY BASIS OF ACCOUNTING The adopted budget of the District is prepared on a basis consistent with accounting principles generally accepted in the United States of America with the following exception: a portion of the General Fund activity is budgeted for separately as special revenue and capital projects funds. Consequently, the following adjustment was necessary to present actual expenditures, fund balance at July 1, 2011 and fund balance at June 30, 2012 on a budgetary basis in order to provide a meaningful comparison.

Total

Expenditures Fund Balance,

June 30, 2012 Fund Balance,July 1, 2011

Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds $ 13,975,063 $ 14,815,714 $ 30,486,632

Fiscal year 2011-12 activity budgeted as special revenue funds (325,439) (590,796) (342,451)

Fiscal year 2011-12 activity budgeted as capital projects funds (105,365) (716,058) (9,712,543)

Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund $ 13,544,259 $ 13,508,860

$ 20,431,638

COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS

AND SCHEDULES

GOVERNMENTAL FUNDS

ASSETSCash and investmentsDue from governmental entities

Total assets


Accounts payableDue to other fundsDeferred revenues

Total liabilities

Fund balances:Restricted

Total fund balances


Special Revenue

$ 323,56248,325

$ 371,887

$ 18,15610,51712,31440,987

330,900330,900

$ 371,887

Total Non-Major

Governmental Fund

$ 323,56248,325

$ 371,887

$ 18,15610,51712,31440,987

330,900330,900

$ 371,887

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402COMBINING BALANCE SHEET - ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPE

JUNE 30, 2012

Page 56

Revenues:Other localState aid and grantsFederal aid, grants and reimbursements

Total revenues


InstructionSupport services - students and staffOperation and maintenance of plant services

Total expenditures


Fund balances, beginning of year


Special Revenue

$ 38,530278,149

1,212,3241,529,003

1,355,52610,51711,221

1,377,264

151,739

179,161

$ 330,900

Total Non-Major

Governmental Funds

$ 38,530278,149

1,212,3241,529,003

1,355,52610,51711,221

1,377,264

151,739

179,161

$ 330,900

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -

ALL NON-MAJOR GOVERNMENTAL FUNDS - BY FUND TYPEYEAR ENDED JUNE 30, 2012

Page 57

SPECIAL REVENUE FUNDS Classroom Site - to account for the financial activity for the portion of state sales tax collections and permanent state school fund earnings as approved by the voters in 2000. Instructional Improvement - to account for the activity of monies received from gaming revenue. E-Rate - to account for financial assistance received for broadband internet and telecommunication costs. Other Federal Projects - to account for financial assistance received for other supplemental federal projects. State Vocational Education - to account for financial assistance received for the preparation of individuals for employment. Other State Projects - to account for financial assistance received for other State projects. School Plant - to account for proceeds from the sale or lease of school property. Civic Center - to account for monies received from the rental of school facilities for civic activities. Community School - to account for activity related to academic and skill development for all citizens. Auxiliary Operations - to account for activity arising from bookstore, athletic and miscellaneous District related operations. Extracurricular Activities Fees Tax Credit - to account for activity related to monies collected in support of extracurricular activities to be taken as a tax credit by the tax payer in accordance with A.R.S. §43-1089.01. Gifts and Donations - to account for activity related to gifts, donations, bequests and private grants made to the District. Insurance Proceeds - to account for the monies received from insurance claims. Textbooks - to account for monies received from students to replace or repair lost or damaged textbooks.


Total assets



Total liabilities


Total fund balances


Classroom Site

$ 242,694

$ 242,694

$

242,694242,694

$ 242,694

Instructional Improvement

$ 35,1148,939

$ 44,053

$

44,05344,053

$ 44,053

E-Rate

$ 12,303

$ 12,303

$

12,30312,303

$ 12,303

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS

JUNE 30, 2012

Page 60

Other Federal Projects

$ 1,59016,566

$ 18,156

$ 18,156

18,156

$ 18,156

State Vocational Education

$ 11

$ 11

$

1111

$ 11

Other State Projects

$ 10,517

$ 10,517

$ 10,517

10,517

$ 10,517

Civic Center

$ 8,712

$ 8,712

$

8,7128,712

$ 8,712

Extracurricular Activities Fees

Tax Credit

$ 1,822

$ 1,822

$

1,8221,822

$ 1,822

Gifts and Donations

$ 32,343

$ 32,343

$

32,34332,343

$ 32,343

Page 61(Continued)


Total assets



Total liabilities


Total fund balances


Textbooks

$ 1,276

$ 1,276

$

1,2761,276

$ 1,276

Totals

$ 323,56248,325

$ 371,887

$ 18,15610,51712,31440,987

330,900330,900

$ 371,887

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402COMBINING BALANCE SHEET - NON-MAJOR SPECIAL REVENUE FUNDS

JUNE 30, 2012

Page 62


Total revenues



Total expenditures




Classroom Site

$ 1,139147,277

148,416

41,583

41,583

106,833

135,861

$ 242,694


$ 17420,537

20,711

20,711

23,342

$ 44,053

E-Rate

$

11,22111,221

11,22111,221

$


NON-MAJOR SPECIAL REVENUE FUNDSYEAR ENDED JUNE 30, 2012

Page 64


$

1,201,1031,201,103

1,201,103

1,201,103

$


$ 99,818

99,818

99,818

99,818

$


$ 10,517

10,517

10,517

10,517

$

Civic Center

$ 1,553

1,553

1,553

7,159

$ 8,712

Community School

$ 2,576

2,576

2,576

(2,576)

$

Extracurricular Activities Fees

Tax Credit

$ 1,822

1,822

1,822

$ 1,822

Page 65(Continued)


Total revenues



Total expenditures




Gifts and Donations

$ 31,257

31,257

13,022

13,022

18,235

14,108

$ 32,343

Textbooks

$ 9

9

9

1,267

$ 1,276

Totals

$ 38,530278,149

1,212,3241,529,003

1,355,52610,51711,221

1,377,264

151,739

179,161

$ 330,900


NON-MAJOR SPECIAL REVENUE FUNDSYEAR ENDED JUNE 30, 2012

Page 66

Total revenues



InstructionSupport services - students and staffSupport services - administrationOperation and maintenance of plant servicesOperation of non-instructional services

Total expenditures




Classroom Site

Budget

$ 77,895

77,895

197,89547,948

245,843

(167,948)

205,975

$ 38,027

Actual

$ 1,139147,277

148,416

41,583

41,583

106,833

135,861

$ 242,694

Variance - Positive

(Negative)

$ 1,13969,382

70,521

156,31247,948

204,260

274,781

(70,114)

$ 204,667

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -

BUDGET AND ACTUALALL SPECIAL REVENUE FUNDS


Page 68


Budget

$ 17,860

17,860

17,969

17,969

(109)

17,080

$ 16,971

Actual

$ 17420,537

20,711

20,711

23,342

$ 44,053

Variance - Positive

(Negative)

$ 1742,677

2,851

17,969

17,969

20,820

6,262

$ 27,082

E-Rate

Budget

$

$

Actual

$

11,22111,221

11,221

11,221

$

Variance - Positive

(Negative)

$

11,22111,221

(11,221)

(11,221)

$

Page 69(Continued)

Total revenues




Total expenditures





Budget

$

1,182,9471,182,947

1,182,947

1,182,947

$

Actual

$

1,201,1031,201,103

1,201,103

1,201,103

$

Variance - Positive

(Negative)

$

18,15618,156

(18,156)

(18,156)

$




Page 70


Budget

$ 98,000

98,000

98,000

98,000

$

Actual

$ 99,818

99,818

99,818

99,818

$

Variance - Positive

(Negative)

$ 1,818

1,818

(1,818)

(1,818)

$


Budget

$

$

Actual

$ 10,517

10,517

10,517

10,517

$

Variance - Positive

(Negative)

$ 10,517

10,517

(10,517)

(10,517)

$

Page 71(Continued)

Total revenues




Total expenditures



Fund balances (deficits), end of year

School Plant

Budget

$ 2

2

2

252

$ 254

Non-GAAP Actual

$ 2

2

2

252

$ 254

Variance - Positive

(Negative)

$

$




Page 72

Civic Center

Budget

$ 1,553

1,553

5,0005,000

(3,447)

7,159

$ 3,712

Actual

$ 1,553

1,553

1,553

7,159

$ 8,712

Variance - Positive

(Negative)

$

5,0005,000

5,000

$ 5,000

Community School

Budget

$

8,000

8,000

(8,000)

3,916

$ (4,084)

Actual

$ 2,576

2,576

2,576

(2,576)

$

Variance - Positive

(Negative)

$ 2,576

2,576

8,000

8,000

10,576

(6,492)

$ 4,084

Page 73(Continued)

Total revenues




Total expenditures




Auxiliary Operations

Budget

$ 610,402

610,402

425,331

425,331

185,071

305,272

$ 490,343

Non-GAAP Actual

$ 573,780

573,780

303,48520,923

231800

325,439

248,341

341,894

$ 590,235

Variance - Positive

(Negative)

$ (36,622)

(36,622)

121,846(20,923)

(231)(800)

99,892

63,270

36,622

$ 99,892




Page 74

Extracurricular Activities Fees Tax Credit

Budget

$ 1,822

1,822

1,822

$ 1,822

Actual

$ 1,822

1,822

1,822

$ 1,822

Variance - Positive

(Negative)

$

$

Gifts and Donations

Budget

$ 31,257

31,257

10,000

10,000

21,257

14,108

$ 35,365

Actual

$ 31,257

31,257

13,022

13,022

18,235

14,108

$ 32,343

Variance - Positive

(Negative)

$

(3,022)

(3,022)

(3,022)

$ (3,022)

Page 75(Continued)

Total revenues




Total expenditures




Insurance Proceeds

Budget

$ 2

2

2

305

$ 307

Non-GAAP Actual

$ 2

2

2

305

$ 307

Variance - Positive

(Negative)

$

$




Page 76

Textbooks

Budget

$ 9

9

9

1,267

$ 1,276

Actual

$ 9

9

9

1,267

$ 1,276

Variance - Positive

(Negative)

$

$

Totals

Budget

$ 645,047193,755

1,182,9472,021,749

1,940,14247,948

5,0001,993,090

28,659

555,334

$ 583,993

Non-GAAP Actual

$ 612,314278,149

1,212,3242,102,787

1,659,01131,440

23112,021

1,702,703

400,084

521,612

$ 921,696

Variance - Positive

(Negative)

$ (32,733)84,39429,37781,038

281,13116,508

(231)(12,021)

5,000290,387

371,425

(33,722)

$ 337,703

Page 77

CAPITAL PROJECTS FUNDS Unrestricted Capital Outlay – to account for transactions relating to the acquisition of capital items Soft Capital Allocation - to account for transactions relating to the acquisition of short-term capital items required to meet academic adequacy standards.

Total revenues

Revenues:Other localState aid and grants


InstructionSupport services - students and staffSupport services - administration

Capital outlayDebt service -

Principal retirementInterest and fiscal charges

Total expenditures


Other financing sources (uses):Transfers inTransfers out






Budget

$ 258,6601,980,9982,239,658

15,394,023

675,000250,000

16,319,023

(14,079,365)

20,985,458

20,985,458

6,906,093

(4,214,216)

$ 2,691,877

Actual

$ 208,7621,980,9982,189,760

2,870,544

675,000250,000

3,795,544

(1,605,784)

20,985,458

20,985,458

19,379,674

(4,214,216)

$ 15,165,458

Variance - Positive

(Negative)

$ (49,898)

(49,898)

12,523,479

12,523,479

12,473,581

12,473,581

$ 12,473,581


BUDGET AND ACTUALALL CAPITAL PROJECTS FUNDS


Page 80

Soft Capital Allocation

Budget

$ 58,511574,816633,327

300,000150,00080,00017,940

547,940

85,387

(9,535,840)(9,535,840)

(9,450,453)

9,712,543

$ 262,090

Non-GAAP Actual

$ 69,904574,816644,720

45,92222,67030,7855,988

105,365

539,355

(9,535,840)(9,535,840)

(8,996,485)

9,712,543

$ 716,058

Variance - Positive

(Negative)

$ 11,393

11,393

254,078127,33049,21511,952

442,575

453,968

453,968

$ 453,968

Totals

Budget

$ 317,1712,555,8142,872,985

300,000150,00080,000

15,411,963

675,000250,000

16,866,963

(13,993,978)

20,985,458(9,535,840)11,449,618

(2,544,360)

5,498,327

$ 2,953,967

Non-GAAP Actual

$ 278,6662,555,8142,834,480

45,92222,67030,785

2,876,532

675,000250,000

3,900,909

(1,066,429)

20,985,458(9,535,840)11,449,618

10,383,189

5,498,327

$ 15,881,516

Variance - Positive

(Negative)

$ (38,505)

(38,505)

254,078127,33049,215

12,535,431

12,966,054

12,927,549

12,927,549

$ 12,927,549

Page 81

STATISTICAL SECTION

The statistical section presents financial statement trends as well as detailed financial and operational information not available elsewhere in the report. The statistical section is intended to enhance the reader’s understanding of the information presented in the financial statements, notes to the financial statements, and other supplementary information presented in this report. The statistical section is comprised of the five categories of statistical information presented below.

Financial Trends

These schedules contain information on financial trends to help the reader understand how the District’s financial position and financial activities have changed over time.

Revenue Capacity

These schedules contain information to help the reader assess the factors affecting the District’s ability to generate revenue.

Debt Capacity

These schedules present information to help the reader evaluate the District’s current levels of outstanding debt as well as assess the District’s ability to make debt payments and/or issue additional debt in the future.

Demographic and Economic Information These schedules present various demographic and economic indicators to help the reader understand the environment in which the District’s financial activities take place and to help make comparisons with other school districts.

Operating Information

These schedules contain information about the District’s operations and various resources to help the reader draw conclusions as to how the District’s financial information relates to the services provided by the District.

Due to cost considerations for the accumulation of data, the District has elected to present less than ten years of data, or data from less than nine years prior, for certain statistical schedules. This information will be accumulated and reported each year until the complete ten years of data is presented.

2012 2011 2010 2009 2008Net Assets:

Invested in capital assets, net of related debt 22,995,060$ 20,150,300$ 11,031,189$ 5,222,008$ 643,514$ Restricted 15,508,661 281,165 12,041,808 17,111,597 14,034,184 Unrestricted 14,791,796 26,591,568 17,264,763 6,678,325 4,126,313

Total net assets 53,295,517$ 47,023,033$ 40,337,760$ 29,011,930$ 18,804,011$

2007 2006 2005Net Assets:

Invested in capital assets, net of related debt 37,446$ 42,052$ 23,815$ Restricted 13,063,120 2,978,166 69,563 Unrestricted (1,963,442) 3,712,050 1,281,071

Total net assets 11,137,124$ 6,732,268$ 1,374,449$

Note: The District's first year of financial statement preparation was fiscal year 2004-05, therefore only eight years are shown. The source of this information is the District's financial records.Source:

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402NET ASSETS BY COMPONENTLAST EIGHT FISCAL YEARS

Fiscal Year Ended June 30

(Accrual basis of accounting)

Page 85

2012 2011 2010 2009 2008

Instruction 12,804,981$ 17,528,425$ 15,524,170$ 16,027,920$ 14,214,116$ Support services - students and staff 1,099,995 2,475,245 1,211,052 417,738 367,818 Support services - administration 1,966,283 2,502,796 1,155,539 1,023,608 787,713 Operation and maintenance of plant services 323,495 906,735 443,793 337,500 95,237 Interest on long-term debt 250,000

Total expenses 16,444,754 23,413,201 18,334,554 17,806,766 15,464,884

Program RevenuesCharges for services:

Instruction 919,898 552,578 366,331 177,812 74,548Operation of non-instructional services 225,556Other activities 250 216 153,171

Operating grants and contributions 1,365,994 53,857 2,384 2,565 Capital grants and contributions 60,000

Total program revenues 2,285,892 606,685 428,715 406,149 227,719

Net (Expense)/Revenue (14,158,862)$ (22,806,516)$ (17,905,839)$ (17,400,617)$ (15,237,165)$

The source of this information is the District's financial records.The provisions of the Governmental Accounting Standards Board (GASB) Statement No. 34 were adopted in fiscal year 2001 therefore

only six years are shown.

(Continued)

Note:

LAST EIGHT FISCAL YEARS(Accrual basis of accounting)


Expenses

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402EXPENSES, PROGRAM REVENUES, AND NET (EXPENSE)/REVENUE

Source:

Page 86

2007 2006 2005Expenses

Instruction 13,024,964$ 10,149,179$ 1,432,870$ Support services - students and staff 147,498 170,066 127,513 Support services - administration 797,220 955,660 460,916 Operation and maintenance of plant services 71,792 38,774 43,574 Interest on long-term debt

Total expenses 14,041,474 11,313,679 2,064,873

Program RevenuesCharges for services:

Instruction 132,192 45,774 50,710Operation of non-instructional servicesOther activities 41,553 59,571

Operating grants and contributionsCapital grants and contributions

Total program revenues 173,745 105,345 50,710

Net (Expense)/Revenue (13,867,729)$ (11,208,334)$ (2,014,163)$

(Concluded)

Note:

(Accrual basis of accounting)LAST EIGHT FISCAL YEARS


Source: The source of this information is the District's financial records.The District's first year of financial statement preparation was fiscal year 2004-05, therefore only eight years are shown.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402EXPENSES, PROGRAM REVENUES, AND NET (EXPENSE)/REVENUE

Page 87

2012 2011 2010 2009 2008

Net (Expense)/Revenue (14,158,862)$ (22,806,516)$ (17,905,839)$ (17,400,617)$ (15,237,165)$

General Revenues: Taxes:

Property taxes, levied for general purposes 6,686,258 8,703,638 10,364,731 10,610,848 9,053,027 Investment income 162,782 311,403 307,859 619,091 775,834Unrestricted county aid 1,561,593 2,258,711 1,736,297Unrestricted state aid 12,020,713 17,918,989 14,196,508 16,378,597 13,075,191Unrestricted federal aid 299,048 2,626,274

Total general revenues 20,431,346 29,491,789 29,231,669 27,608,536 22,904,052

Changes in Net Assets 6,272,484$ 6,685,273$ 11,325,830$ 10,207,919$ 7,666,887$

Source: The source of this information is the District's financial records.

Note: The provisions of the Governmental Accounting Standards Board (GASB) Statement No. 34 were adopted in fiscal year 2001 therefore only six years are shown.

(Continued)


WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402GENERAL REVENUES AND TOTAL CHANGES IN NET ASSETS

LAST EIGHT FISCAL YEARS(Accrual basis of accounting)

Page 88

2007 2006 2005

Net (Expense)/Revenue (13,867,729)$ (11,208,334)$ (2,014,163)$

General Revenues: Taxes:

Property taxes, levied for general purposes 6,449,276 4,423,607 2,188,617 Investment income 455,567 185,137 22,036Unrestricted county aid 12,165 1,010,507 147,039Unrestricted state aid 11,355,577 11,406,458 4,191

Total general revenues 18,272,585 17,025,709 2,361,883

Changes in Net Assets 4,404,856$ 5,817,375$ 347,720$

1)2)

(Concluded)

GENERAL REVENUES AND TOTAL CHANGES IN NET ASSETSLAST EIGHT FISCAL YEARS


(Accrual basis of accounting)

The Arizona State Legislature suspended county equalization payments to school districts for fiscal years 2006-07 through 2008-09.

The source of this information is the District's financial records.Source: Notes: The District's first year of financial statement preparation was fiscal year 2004-05, therefore only eight years are shown.


Page 89

2012 2011 2010 2009 2008General Fund:

Nonspendable 112,197$ Unassigned 14,815,714$ 30,374,435Reserved 132,654$ 160,438$ Unreserved 16,651,402$ 4,010,415 3,715,678

Total General Fund 14,815,714$ 30,486,632$ 16,651,402$ 4,143,069$ 3,876,116$

All Other Governmental Funds:Restricted 15,496,358$ 181,737$ Unassigned (4,216,792)Unreserved, reported in:

Special revenue funds 404,162$ 407,982$ 170,714$ Capital projects funds 12,041,808 16,405,456 14,034,184

Total all other governmental funds 15,496,358$ (4,035,055)$ 12,445,970$ 16,813,438$ 14,204,898$

(Continued)

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402FUND BALANCES - GOVERNMENTAL FUNDS


LAST EIGHT FISCAL YEARS(Modified accrual basis of accounting)

Page 90

2007 2006 2005General Fund:

Unreserved (2,016,281)$ 3,666,738$ 839,247$ Total General Fund (2,016,281)$ 3,666,738$ 839,247$

All Other Governmental Funds:Reserved 27,300$ Unreserved, reported in:

Special revenue funds 32,873$ 35,183 3,198$ Capital projects funds 13,063,120 2,950,866 69,563

Total all other governmental funds 13,095,993$ 3,013,349$ 72,761$

Source:Notes: 1) The provisions of the Governmental Accounting Standards Board (GASB) Statement No. 54 were adopted in fiscal year 2011.

The standard replaces the previous reserved and unreserved fund balance categories with the following five fund balance classifications: nonspendable, restricted, committed, assigned, and unassigned fund balance.

2) The District's first year of financial statement preparation was fiscal year 2004-05, therefore only eight years are shown.

(Concluded)

The source of this information is the District's financial records.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402FUND BALANCES - GOVERNMENTAL FUNDS



Page 91

2012 2011 2010 2009 2008Federal sources:

Federal grants 11,221$ State Fiscal Stabilization (ARRA) 299,048$ 2,626,274$ Education Jobs 1,201,103 Total federal sources 1,212,324 299,048 2,626,274

State sources:State equalization assistance 12,101,391 17,585,953 16,797,267 13,704,187$ 13,075,191$ State grants 110,335 40,801 Other revenues 167,814 110,664 47,531 Total state sources 12,379,540 17,737,418 16,844,798 13,704,187 13,075,191

Local sources:Property taxes 6,853,602 8,709,294 10,345,348 10,485,332 8,968,042 County aid 1,561,593 2,258,711 1,736,297 Investment income 162,574 311,107 307,859 626,288 775,834 Other revenues 950,930 565,884 368,715 398,952 227,719 Total local sources 9,528,699 11,844,996 12,758,219 11,510,572 9,971,595 Total revenues 23,120,563$ 29,881,462$ 32,229,291$ 25,214,759$ 23,046,786$

(Continued)

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402GOVERNMENTAL FUNDS REVENUES

LAST EIGHT FISCAL YEARS


(Modified accrual basis of accounting)

Page 92

2007 2006 2005State sources:

State equalization assistance 11,355,577$ 11,406,458$ 4,191$ Total state sources 11,355,577 11,406,458 4,191

Local sources:Property taxes 6,404,148 4,361,538 2,168,025 County aid 12,165 1,010,507 147,039 Investment income 455,568 185,137 22,036 Other revenues 173,744 105,345 50,710 Total local sources 7,045,625 5,662,527 2,387,810 Total revenues 18,401,202$ 17,068,985$ 2,392,001$

1) The Arizona State Legislature suspended county equalization payments to school districts for fiscal years 2006-07 through 2008-09. 2) The District's first year of financial statement preparation was fiscal year 2004-05, therefore only eight years are shown.

(Concluded)

Notes:Source: The source of this information is the District's financial records.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402GOVERNMENTAL FUNDS REVENUES



Page 93

2012 2011 2010 2009 2008


Instruction 12,282,154$ 16,991,148$ 15,352,762$ 14,795,588$ 14,199,415$ Support services - students and staff 1,041,760 1,938,577 1,178,390 411,425 295,107 Support services - administration 1,706,899 1,494,867 1,224,358 979,380 702,622 Operation and maintenance of plant services 315,526 905,654 208,981 177,606 255,675

Capital outlay 2,876,532 16,762,113 5,969,438 5,921,135 753,103 Debt service -

Principal retirement 675,000 Interest and fiscal charges 250,000 Judgments against the district 26,348

Total expenditures 19,147,871$ 38,092,359$ 23,933,929$ 22,311,482$ 16,205,922$

Expenditures for capitalized assets 3,057,508$ 14,926,621$ 5,939,540$ 4,701,878$ 610,555$

Debt service as a percentage ofnoncapital expenditures 6%

Notes:

(Continued)

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO



Page 94

2007 2006 2005


Instruction 13,004,519$ 10,147,830$ 1,432,870$ Support services - students and staff 133,843 124,727 97,483 Support services - administration 700,635 918,704 425,482 Operation and maintenance of plant services 71,792 38,774 43,574

Capital outlay 63,488 98,171 36,714 Total expenditures 13,974,277$ 11,328,206$ 2,036,123$

Expenditures for capitalized assets 21,304$

Source: Note: The District's first year of financial statement preparation was fiscal year 2004-05, therefore only eight years are shown.

(Concluded)

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402GOVERNMENTAL FUNDS EXPENDITURES




Page 95

2012 2011 2010 2009 2008

Excess (deficiency) of revenues over expenditures 3,972,692$ (8,210,897)$ 8,295,362$ 2,903,277$ 6,840,864$

Other financing sources (uses):Capital lease agreements 5,452,905 Transfers in 20,985,458 4,700,000 Transfers out (20,985,458) (4,700,000)

Total other financing sources (uses) - 5,452,905 - - -

Changes in fund balances 3,972,692$ (2,757,992)$ 8,295,362$ 2,903,277$ 6,840,864$

2007 2006 2005

Excess (deficiency) of revenues over expenditures 4,426,925$ 5,740,779$ 355,878$

Changes in fund balances 4,426,925$ 5,740,779$ 355,878$

Source:Note: The District's first year of financial statement preparation was fiscal year 2004-05, therefore only eight years are shown.


WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402OTHER FINANCING SOURCES AND USES AND NET CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS



(Modified accrual basis of accounting)

Page 96

FiscalYear Less: Total Taxable Total Estimated

Ended Residential Commercial Personal Tax Exempt Assessed Direct Actual June 30 Property Property Property Real Property Valuation Rate Value

2012 7,188,423,409$ 7,377,944,992$ 1,954,905,707$ 2,867,946,882$ 13,653,327,226$ 0.05 122,863,333,856$ 11.11 %2011 8,870,087,878 10,640,660,769 1,711,096,187 3,503,049,143 17,718,795,691 0.05 154,432,353,296 11.472010 11,371,519,530 11,449,633,338 1,173,056,845 3,447,693,163 20,546,516,550 0.05 179,834,250,360 11.432009 20,557,736,111 0.05 180,953,657,568 11.36 2008 17,114,649,736 0.05 147,746,989,084 11.58 2007 9,567,848,707 0.05 78,319,621,370 12.22 2006 8,746,112,108 0.05 37,230,613,658 23.49 2005 3,328,974,690 0.05 29,270,460,111 11.37 2004 2,813,663,805 0.05 25,313,993,692 11.12

Source:Note: 1) Total taxable assessed valuation is displayed by major component beginning with fiscal year ended June 30, 2010.

2) The District's first year of operation was fiscal year 2003-04, therefore only nine years are shown.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY

LAST NINE FISCAL YEARS

Ratio of

The source of this information is the State and County Abstract of the Assessment Roll, Arizona Department of Revenue.

Net Assessed to EstimatedActual Value

Real Property

Page 97

Fiscal Year Ended June 30 2012 2011 2010 2009 2008 2007 2006 2005 2004

State of Arizona 0.43 0.36 0.33 0.00 0.00 0.00 0.00 0.00 0.00Maricopa County 1.24 1.05 0.99 1.03 1.10 1.18 1.20 1.21 1.21Maricopa County CCD 1.21 0.97 0.88 0.94 0.98 1.06 1.03 1.04 1.04Maricopa County Library District 0.05 0.04 0.04 0.04 0.04 0.05 0.05 0.05 0.05Maricopa County Fire District 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01Maricopa County Flood Control District 0.18 0.15 0.14 0.14 0.15 0.20 0.21 0.21 0.21Central AZ Water Conservation District 0.10 0.10 0.10 0.10 0.10 0.12 0.12 0.12 0.12City of Avondale 1.33 1.11 1.11 1.11 1.11 1.17 1.17 1.17 1.16Town of Buckeye 1.61 1.19 0.89 0.90 1.14 1.34 1.55 1.55 1.55Town of Cave Creek 0.65 0.65 0.65 0.65 0.65 0.65 0.65 0.64 0.74City of El Mirage 2.87 2.29 1.57 1.20 1.28 1.47 1.53 1.62 1.35City of Phoenix 1.82 1.72 1.82 1.82 1.82 1.82 1.82 1.82 1.82City of Glendale 1.60 1.60 1.60 1.60 1.62 1.72 1.72 1.72 1.72City of Goodyear 1.60 1.42 1.60 1.60 1.60 1.59 1.60 1.97 2.04City of Peoria 1.44 1.44 1.44 1.44 1.49 1.48 1.59 1.59 1.59City of Surprise 0.67 0.67 0.57 0.61 0.76 0.91 0.91 0.91 0.91City of Tolleson 2.90 2.44 2.51 2.30 2.67 2.97 2.43 2.41 2.67Town of Wickenburg 0.01 0.01 0.01 0.48 0.53 0.58 0.61 0.61 0.65Agua Fria Union High School District No. 216 2.68 2.45 2.69 2.41 2.63 3.59 3.60 4.75 3.80Arlington Elementary School District No. 47 1.06 0.94 0.90 0.80 1.09 1.07 1.18 3.53 2.18Avondale Elementary School District No. 44 4.80 2.94 3.31 3.35 3.80 4.27 4.26 4.46 4.24Buckeye Elementary School District No. 33 5.07 5.02 5.47 5.60 6.43 7.63 5.14 3.53 5.40Buckeye Union High School District No. 201 3.08 2.80 2.60 2.86 3.10 3.29 3.54 3.53 3.14Cartwright Elementary School District No. 83 8.68 6.51 4.75 4.85 4.90 5.62 6.77 6.24 7.37Deer Valley Unified School District No. 97 7.61 5.34 4.49 4.92 5.31 6.03 6.59 6.97 7.12Dysart Unified School District No. 89 5.99 5.26 5.00 5.58 6.07 6.95 7.16 6.39 5.90Fowler Elementary School District No. 45 3.79 2.82 2.94 2.84 5.77 4.53 6.14 6.11 5.76Glendale Elementary School District No. 40 3.51 4.77 3.99 4.31 5.38 6.51 6.62 6.70 6.50Glendale Union High School District No. 205 3.53 2.68 2.60 2.73 3.03 3.33 3.46 3.37 3.35Liberty Elementary School District No. 25 3.20 3.31 2.66 2.70 3.62 4.01 3.96 4.08 4.02Litchfield Elementary School District No. 79 3.26 2.91 2.69 2.53 2.72 3.27 3.60 4.11 4.27Palo Verde Elementary School District No. 49 3.79 2.43 2.43 2.86 3.85 3.41 3.33 3.04 3.00Paradise Valley Unified School District No. 69 5.70 4.90 4.62 4.73 5.28 6.45 6.24 6.53 7.07Pendergast Elementary School District No. 92 6.61 5.80 5.20 4.92 5.32 5.76 6.04 6.37 6.37Peoria Unified School District No. 11 5.39 5.33 5.45 5.66 6.54 7.60 7.93 8.36 8.60Phoenix Union High School District No. 210 3.76 3.25 2.95 3.06 3.42 3.79 3.87 3.94 4.11Saddle Mountain Unified School District No. 90 1.38 2.10 1.83 2.49 2.60 2.59 2.81 2.66 0.77Tolleson Union High School District No. 214 4.07 2.72 3.91 2.61 2.86 4.26 3.79 4.29 4.29Washington Elementary School District No. 6 4.61 3.38 3.08 3.69 3.84 4.12 4.08 4.92 4.81Wickenburg Unified School District No. 9 4.45 3.56 4.55 4.70 6.35 5.75 5.71 7.91 6.39Buckeye Valley Fire District 3.10 2.55 2.55 2.48 6.43 1.99 1.99 1.51 1.42Daisy Mountain Fire District 2.98 2.42 1.91 1.76 1.98 2.24 2.19 2.19 2.18Harquahala Valley Fire District 1.91 1.44 1.29 1.64 1.91 2.54 2.55 2.37 2.34Sun City Fire District 3.15 2.75 2.39 2.17 2.19 2.78 2.68 2.61 2.34Sun City West Fire District 2.43 2.26 1.97 1.76 1.67 2.41 2.41 2.34 2.25Tonopah Valley Fire District 3.09 1.66 1.06 1.05 2.68 2.75 2.75 2.69 2.64Wickenburg Fire District 1.21 0.79 0.68 0.68 0.46 0.46 0.29 0.31 0.32

Primary 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Secondary 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05Total 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

Note: The District's first year of operation was fiscal year 2003-04, therefore only nine years are shown.

Source:

Ove

rlap

pin

g R

ates

The source of this information is the Property Tax Rates and Assessed Values, Arizona Tax Research Foundation.

Dis

tric

t D

irec

t R

ates

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402DIRECT AND OVERLAPPING PROPERTY TAX RATES


Page 98

Secondary Assessed

Valuation

Secondary Assessed

Valuation

Arizona Public Service 584,362,405$ 4.3 % 472,008,871$ 14.2 %Southern California Edison Company 118,783,947 0.9 167,207,990 5.0 El Paso Electric Co. 101,034,621 0.7 135,553,614 4.1 Qwest Corporation 88,746,627 0.7 41,223,165 1.2 Public Service Company Of New Mexico 58,709,307 0.4 77,550,078 2.3 Mesquite Power LLC 58,709,307 0.4Wal-Mart Stores Inc 50,517,311 0.4 33,306,089 1.0 Southwest Gas Corporation 46,421,313 0.3 21,296,123 0.6 Southrn California Public Power Auth. 45,055,980 0.3 61,857,858 1.9 JW Marriott Desert Ridge Resort & Spa 36,863,984 0.3Target Corporation 30,037,320 0.2 25,375,680 0.8 Safeway Inc. 27,306,654 0.2Host Kierland LLC 25,941,322 0.2City Of Los Angeles Dept Of Wtr & Pwr 25,941,322 0.2 33,885,396 1.0 Scottsdale Princess Partnership 24,575,989 0.2Summit Property Tax Consulting LLC 24,575,989 0.2Wells Fargo Trust Tax Department 23,210,656 0.2Deutsche National Trust Company 23,210,656 0.2New Harquahala Generating Co., LLC 23,210,656 0.2First American Trust 21,845,324 0.2VHS of South Phoenix Inc 20,479,991 0.2 6,907,847 0.2 Cox Arizona Telecom LLC 20,479,991 0.2 14,316,654 0.4 Sun MP LLC 15,591,895 0.5 Honeywell International Inc 7,026,483 0.2

Total 1,480,020,672$ 11.1 % 1,113,107,743$ 33.4 %

Source:*Information prior to 2005 is not available.The source of this information is the Maricopa County Assessor's records.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402PRINCIPAL PROPERTY TAXPAYERS

CURRENT FISCAL YEAR AND FISCAL YEAR SEVEN YEARS PRIOR

Percentage of District's Net

Assessed Valuation

Percentage of District's Net

Assessed Valuation

2005*

Taxpayer

2012

Page 99

FiscalYear Taxes Levied Collections in

Ended for the Subsequent June 30 Fiscal Year Amount Fiscal Years Amount

2012 6,816,149$ 6,607,892$ 96.94 % $ 6,607,892$ 96.94 %2011 8,706,992 8,364,241 96.06 321,308 8,685,549 99.752010 10,441,050 10,052,716 96.28 363,874 10,416,590 99.772009 10,609,108 10,197,386 96.12 399,755 10,597,141 99.892008 9,032,347 8,722,097 96.57 306,363 9,028,460 99.962007 6,419,032 6,207,618 96.71 208,485 6,416,103 99.952006 4,363,949 4,236,437 97.08 125,740 4,362,177 99.962005 2,552,658 2,503,810 98.09 48,198 2,552,008 99.972004 1,407,232 1,363,233 96.87 43,209 1,406,442 99.94

Source:Notes: 1)

2)

3) The District's first year of operation was fiscal year 2003-04, therefore only nine years are shown.

Fiscal Year of the LevyCollected within the

of the Current Fiscal Year

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402PROPERTY TAX LEVIES AND COLLECTIONS


Collected to the End

Unsecured personal property taxes are not included in this schedule because the dates of the monthly rollsvary each year. On the average, 90% of unsecured property taxes are collected within 90 days after thedue date.

Amounts collected are on a cash basis.The source of this information is the Maricopa County Treasurer's records.

of LevyPercentage

of LevyPercentage

Page 100

Fiscal Less:Year General Amounts Percentage of Percentage of Percentage of

Ended Obligation Restricted for Estimated Per Capital Estimated Per Personal June 30 Bonds Principal Total Actual Value Capita Leases Total Actual Value Capita Income

2012 $ $ $ % $ 4,777,905$ $ 4,777,905 0.0039 % $ 3 0.000033 %2011 5,452,905 5,452,905 0.0035 4 0.000038 2010200920082007200620052004

Source:Note: The District's first year of operation was fiscal year 2003-04, therefore only nine years are shown.


General Obligation Bonds

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402OUTSTANDING DEBT BY TYPE


Total Outstanding Debt

Page 101

Estimated EstimatedPercentage Amount

Debt Applicable to Applicable toOutstanding School District School District

Maricopa County CCD 671,250,000$ 14.23 % 95,518,875$ City of Avondale 34,385,000 100.00 34,385,000 Town of Buckeye 161,371,479 100.00 161,371,479 Town of Cave Creek 2,100,000 100.00 2,100,000 City of El Mirage 13,645,000 100.00 13,645,000 City of Phoenix 1,112,742,000 40.79 453,887,462 City of Glendale 185,495,000 100.00 185,495,000 City of Goodyear 122,480,000 100.00 122,480,000 City of Peoria 170,960,000 100.00 170,960,000 City of Tolleson 29,545,000 100.00 29,545,000 Agua Fria Union High School District No. 216 64,207,605 100.00 64,207,605 Arlington Elementary School District No. 47 1,030,000 100.00 1,030,000 Avondale Elementary School District No. 44 30,740,000 100.00 30,740,000 Buckeye Elementary School District No. 33 15,729,654 100.00 15,729,654 Buckeye Union High School District No. 201 52,290,391 100.00 52,290,391 Cartwright Elementary School District No. 83 16,820,000 100.00 16,820,000 Deer Valley Unified School District No. 97 178,542,323 100.00 178,542,323 Dysart Elementary School District No. 89 181,134,160 100.00 181,134,160 Fowler Elementary School District No. 45 16,735,000 100.00 16,735,000 Glendale Elementary School District No. 40 9,141,211 100.00 9,141,211 Glendale Union High School District No. 205 77,250,569 100.00 77,250,569 Liberty Elementary School District No. 25 9,588,060 100.00 9,588,060 Paradise Valley Unified School District No. 69 302,465,000 100.00 302,465,000 Pendergast Elementary School District No. 92 18,535,633 100.00 18,535,633 Peoria Unified School District No. 11 202,610,000 100.00 202,610,000 Phoenix Union High School District No. 210 244,430,000 100.00 244,430,000 Saddle Mountain Elementary School District No. 90 17,048,809 100.00 17,048,809 Tolleson Union High School District No. 214 76,310,000 100.00 76,310,000 Washington Elementary School District No. 6 88,185,000 100.00 88,185,000 Wickenburg Unified School District No. 9 15,652,461 100.00 15,652,461 Subtotal, Overlapping Debt 2,887,833,692

Direct:Western Maricopa Education Center District No. 402 4,777,905

Total Direct and Overlapping Debt 2,892,611,597$

Source:

Notes: 1)

2) Outstanding debt as of June 30, 2011 is presented for some of the overlapping governments as this is the most recent available information.

The source of this information is the District's records and the State and County Abstract of the Assessment Roll,Arizona Department of Revenue and the applicable governmental unit.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT

JUNE 30, 2012

Governmental Unit

Estimated percentage of debt outstanding applicable to the District is calculated based on the District's secondary assessed valuation as a percentage of the secondary assessed valuation of the overlapping jurisdiction.

Page 102

Personal EstimatedIncome Per Capita District

Year Population (thousands) Income Population

2011 3,843,370 142,864,275$ 37,352$ 8.4 % 1,469,471 2010 3,817,117 142,091,618 35,319 1,468,780 2009 4,023,331 147,122,078 37,168 8.7 1,502,608 2008 3,987,942 139,665,253 36,135 4.8 1,635,726 2007 3,907,492 123,423,154 35,046 3.2 1,664,785 2006 3,792,675 120,716,738 33,178 3.5 1,556,667 2005 3,635,528 111,103,576 31,757 4.1 1,356,667 2004 3,524,175 102,277,852 30,160 4.4 1,301,125 2003 3,396,875 96,998,974 29,020 4.9 1,239,630

Sources:

Note:

Unemployment

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402COUNTY-WIDE DEMOGRAPHIC AND ECONOMIC STATISTICS

LAST NINE CALENDAR YEARS

Rate

The source of the "Personal Income" and "Per Capita" information is the Bureau of Economic Analysis.

The District's first year of operation was fiscal year 2003-04, therefore only nine years are shown.

9.1

The source of the "Population" and "Unemployment Rate" information from 2003 through 2010 is the University of Arizona, Eller College of Management, Economic and Business Research Center. For the year 2011 the source of the information is the Arizona Office of Employment and Population Statistics.

Page 103

Percentage Percentageof Total of Total

Employees Employment Employees Employment

State of Arizona 49,800 2.94 % 49,850 2.93 %Wal-Mart Stores Inc. 30,635 1.81 15,895 0.93 Banner Health Systems 25,825 1.53 15,520 0.91 City of Phoenix 15,100 0.89 13,155 0.77 Wells Fargo Company 13,310 0.79 8,800 0.52 Maricopa County 12,790 0.76 15,525 0.91 Apollo Group Inc. 11,000 0.65 Arizona State University 11,185 0.66 9,110 0.53 Bank of America 13,300 0.79 Honeywell 15,000 0.88 Intel Corp. 10,300 0.61 10,000 0.59 JP Morgan Chase & Co 10,600 0.63 Mesa Public Schools 8,380 0.50 U.S. Postal Service 8,020 0.47 11,405 0.67 US Airways 9,090 0.54 The Kroger Co. 13,500 0.79 Motorola 10,600 0.62 America West Holdings Corp. 9,300 0.55 Target Corp. 8,070 0.47 Luke Air Force Base 8,000 0.47 American Express Co. 7,225 0.42 Safeway Inc. 9,100 0.53 Qwest Communications Inc. 7,700 0.45 Banc One Corp. 7,600 0.45

Total 229,335 13.57 % 245,355 14.39 %

Total employment 1,692,300 1,704,221

Source: The source of this information is The Business Journal Book of Lists.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402PRINCIPAL EMPLOYERS

CURRENT FISCAL YEAR AND FISCAL YEAR NINE YEARS PRIOR

Employer

2012 2003

Page 104

2012 2011 2010 2009 2008

SupervisoryConsultants/supervisors of instruction 2 1 3 3 3

Total supervisory 2 1 3 3 3 Instruction

Teachers 7 5 2 1 1 Total instruction 7 5 2 1 1

Support and AdministrationService workers 25 23 16 10 6

Total support and administration 25 23 16 10 6

Total 34 29 21 14 10

(Continued)

Full-time Equivalent Employees as of June 30


WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402FULL-TIME EQUIVALENT DISTRICT EMPLOYEES BY TYPE

Page 105

2007 2006 2005 2004

SupervisoryConsultants/supervisors of instruction - - - -

Total supervisory - - - - Instruction

Teachers 1 1 1 - Total instruction 1 1 1

Support and AdministrationService workers 8 7 6 4

Total support and administration 8 7 6 4

Total 9 8 7 4

Source: Note:

(Concluded)

The District's first year of operation was fiscal year 2003-04, therefore only nine years are shown.The source of this information is District personnel records.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402FULL-TIME EQUIVALENT DISTRICT EMPLOYEES BY TYPE


Page 106

FiscalYear Average Cost Cost

Ended Daily Operating per Percentage per PercentageJune 30 Membership Expenditures Pupil Change Expenses Pupil Change

2012 4,636 15,346,339$ 3,310$ 3.14 % 16,444,754$ 3,547$ 0.69 %2011 6,646 21,330,246 3,209 13.75 23,413,201 3,523 22.34 2010 6,367 17,964,491 2,822 (4.38) 18,334,554 2,880 (10.31) 2009 5,546 16,363,999 2,951 (4.05) 17,806,766 3,211 4.33 2008 5,025 15,452,819 3,075 1.71 15,464,884 3,078 0.84 2007 4,601 13,910,789 3,023 (1.09) 14,041,474 3,052 (0.89) 2006 3,674 11,230,035 3,057 186.95 11,313,679 3,079 179.92 2005 1,877 1,999,409 1,065 N/A 2,064,873 1,100 N/A

1)2)3) The District's first year of financial statement preparation was fiscal year 2004-05, therefore only eight years are shown.

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402OPERATING STATISTICS


N/A indicates that the information is not available. Operating expenditures are total expenditures less debt service and capital outlay.

The source of this information is the District's financial records.Source:Notes:

Page 107

2012 2011 2010 2009 2008 2007 2006 2005 2004

SchoolsBuildings 5 5 1 1 1 1 1 1 1Square feet 154,371 154,371 4,700 4,700 4,700 4,700 4,700 4,700 4,700

The District's first year of operation was fiscal year 2003-04, therefore only nine years are shown. Note:The source of this information is the District's facilities records.Source:

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO. 402CAPITAL ASSETS INFORMATION



Page 108

WESTERN MARICOPA EDUCATION CENTER DISTRICT NO....

Documents

Transcript of WESTERN MARICOPA EDUCATION CENTER DISTRICT NO....