DISTRICT SCHOOL BOARD OF
ST. LUCIE COUNTY, FLORIDA
Financial Statements
For the Year Ended
June 30, 2010
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Table of Contents
Table of Contents
i
Financial Section
Report of Independent Certified Public Accountants
1
Management’s Discussion and Analysis
3
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets
10
Statement of Activities
11
Fund Financial Statements:
Balance Sheet – Governmental Funds
12
Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Assets
13
Statement of Revenues, Expenditures and Changes in Fund Balances –
Governmental Funds
14
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
15
Statement of Fiduciary Assets and Liabilities – Fiduciary Funds
16
Notes to the Financial Statements
17
Other Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balances –
Budget and Actual – General Fund
44
Schedule of Revenues, Expenditures and Changes in Fund Balances –
Budget and Actual – Major Special Revenue Fund
45
Schedule of Funding Progress – Postemployment Benefits Plan
46
Note to Schedule of Funding Progress – Postemployment Benefits Plan
47
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Compliance and Single Audit
Report of Independent Certified Public Accountants on Internal
Control over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards
48
Report of Independent Certified Public Accountants on Compliance
With Requirements That Could Have a Direct and Material Effect
on Each Major Program and Internal Control over Compliance
in Accordance with OMB Circular A-133
50
Schedule of Expenditures of Federal Awards
52
Schedule of Findings and Questioned Costs
53
Summary of Prior Year Audit Findings
54
Other Information
Independent Auditors' Management Letter
55
FINANCIAL SECTION
Report of Independent Auditors
The Honorable Members of the School Board
District School Board of St. Lucie County
Ft. Pierce, Florida
We have audited the accompanying financial statements of the governmental activities, the discretely
presented component units, each major fund, and the aggregate remaining fund information of the
District School Board of St. Lucie County, Florida (the “District”), as of and for the year ended June
30, 2010, 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 School Board of St. Lucie
County’s management. Our responsibility is to express opinions on these financial statements based
on our audit. We did not audit the financial statements of the school internal funds, reported as
agency funds in the accompanying financial statements. Additionally, we did not audit the financial
statements of the discretely presented component units. Those financial statements were audited by
other auditors whose reports have been provided to us, and our opinions, insofar as they relate to the
amounts included for the agency fund and the discretely presented component unit, are based solely
on the reports of the other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and 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 and the reports of other auditors provide a
reasonable basis for our opinions.
In our opinion, based on our audit and the report of other auditors, the financial statements referred to
above present fairly, in all material respects, the respective financial position of the governmental
activities, the discretely presented component units, each major fund, and the aggregate remaining
fund information of the District School Board of St. Lucie County, Florida, as of June 30, 2010, and the
respective changes in financial position, 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 March 30,
2011 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 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.
The Management’s Discussion and Analysis on pages 3 through 9 and the Budgetary Comparison
Schedule on page 44 are not a required part of the basic financial statements but are supplementary
information required by accounting principles generally accepted in the United States of America. We
have applied certain limited procedures, which consisted principally of inquiries of management
regarding the methods of measurement and presentation of the required supplementary information.
However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the District’s basic financial statements. The accompanying Schedule of
Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S.
Office of Management and Budget Circular A-133, Audits of States, Local Governments, and NonProfit Organizations, and is not a required part of the basic financial statements. Such information
has been subjected to the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements
taken as a whole.
Orlando, Florida
March 30, 2011
2
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2010
MANAGEMENT’S DISCUSSION AND ANALYSIS
The Management of the District School Board of St. Lucie County (the “District”) have prepared the
following discussion and analysis to (a) assist the reader in focusing on significant financial issues, (b)
provide an overview and analysis of the District’s financial activities, (c) identify changes in the
District’s financial position, (d) identify material deviations from the approved budget, and (e) highlight
significant issues in individual funds.
Because the information contained in the Management’s Discussion and Analysis (MD&A) is intended
to highlight significant transactions, events and conditions, it should be considered in conjunction with
the District’s financial statements and Notes to Financial Statements, included herein.
FINANCIAL HIGHLIGHTS
Key Financial highlights for the 2009-10 fiscal year included:




In total, net assets increased $321,742, which represents a .05% increase from the 2008-09
fiscal year.
General revenues total $361,385,484, or 94.68% of all revenues. Program specific revenues
in the form of charges for services, operating grants and contributions, and capital grants and
contributions total $20,272,119, or 5.60%.
Expenses totaled $381,335,861. Only $20,272,119, of these expenses were offset by
program–specific charges, with the remainder paid from general revenues. Total revenues
exceeded total expenses by $321,742.
The unreserved, undesignated fund balance of the General Fund, representing the net current
financial resources available for general appropriation by the Board, totaled $17,762,057, at
June 30, 2010, or 6.68% of total General Fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
The basic financial statements consist of three components:
1. Government-wide financial statements
2. Fund financial statements
3. Notes to the financial statements
Government-wide Financial Statements
The government-wide financial statements provide both short-term and long-term information about
the District’s overall financial condition in a manner similar to those of a private-sector business. The
statements include a statement of net assets and a statement of activities that are designed to provide
consolidated financial information about the governmental and business-type activities of the primary
government presented on the accrual basis of accounting. The statement of net assets provides
information about the government’s financial position, its assets and liabilities, using an economic
resources measurement focus. The difference between the assets and liabilities, the net assets, is a
measure of the financial health of the District. The statement of activities presents information about
the change in the District’s net assets, the results of operations, during the fiscal year. An increase or
decrease in net assets is an indication of whether the District’s financial health is improving or
deteriorating.
3
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2010
OVERVIEW OF THE FINANCIAL STATEMENTS (Cont’d)
The government-wide statements present the District’s activities in three categories:

Governmental activities – This represents most of the District’s services including its educational
programs: basic, vocational, adult, and exceptional education. Support functions such as
transportation and administration are also included. Local property taxes and the state’s
education finance program provide most of the resources that support these activities.

Component units – The District presents the St. Lucie County Educational Foundation, Inc.,
Renaissance Charter School at St. Lucie, Inc., and NAU Charter School as discretely presented
component units. Although legally separate organizations, these component units are included in
this report because they meet the criteria for inclusion provided by generally accepted accounting
principles. Financial information for these component units is reported separately from the
financial information presented for the primary government.

The St. Lucie School Board Leasing Corporation (Corporation), although also a legally separate
entity, was formed to facilitate financing for the acquisition of facilities and equipment for the
District. Due to the substantive economic relationship between the District and the Corporation,
the Corporation has been included as an integral part of the primary government.
Fund Financial Statements
Fund financial statements are one of the components of the basic 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 and prudent fiscal management.
Certain funds are established by law while others are created by legal agreements, such as bond
covenants. Fund financial statements provide more detailed information about the District’s financial
activities, focusing on its most significant or “major” funds rather than fund types. This is in contrast
to the entity-wide perspective contained in the government-wide statements. All of the District’s funds
may be classified within one of the following broad categories:

Governmental Funds – Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, the governmental funds utilize a spendable financial resources measurement focus
rather than the economic resources measurement focus found in the government-wide financial
statements.
This financial resources measurement focus allows the governmental fund
statements to provide information on near-term inflows and outflows of spendable resources as
well as balances of spendable resources available at the end of the fiscal year.
The governmental fund statements provide a detailed short-term view that may be used to
evaluate the District’s near-term financing requirements. This short-term view is useful when
compared to the long-term view presented as governmental activities in the government-wide
financial statements. To facilitate this comparison, both the governmental funds balance sheet
and the governmental fund statement of revenues, expenditures, and changes in fund balances
provide a reconciliation of governmental funds to governmental activities.
4
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2010
OVERVIEW OF THE FINANCIAL STATEMENTS (Cont’d)
The governmental funds balance sheet and statement of revenues, expenditures, and changes in
fund balances provide detailed information about the District’s most significant funds. The
District’s major funds are the General Fund, Special Revenue – ARRA Economic Stimulus Fund,
Capital Projects – Local Capital Improvement Fund, and Capital Projects – Other Fund. Data from
the other governmental funds are combined into a single, aggregated presentation.
The District adopts an annual appropriated budget for its governmental funds. A budgetary
comparison schedule has been provided for the General and Special Revenue – ARRA Economic
Stimulus Funds, to demonstrate compliance with the budget.

Fiduciary Funds – Fiduciary funds are used to report the student activity, or “internal” funds, which
are held in a trustee or fiduciary capacity for the benefit of student class and club activities.
Fiduciary funds are not reflected in the government-wide statements because the resources are
not available to support the District’s own programs. In its fiduciary capacity, the District is
responsible for ensuring that the assets reported in these funds are used only for their intended
purposes.
The District uses agency funds to account for school internal funds which are used to account for
moneys collected at the schools in connection with school, student athletic, class, and club
activities.
Notes to Financial Statements
The notes provide additional information that is essential for a full understanding of the data provided
in the government-wide and fund financial statements.
5
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2010
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net Assets
The following tables present summary information on net assets and the changes in net assets for the
2009-10 fiscal year:
Condensed Statement of Net Assets:
Net Assets, End of Year
2010
Current and Other Assets
Capital Assets
$
113,005,882
863,327,559
2009
$
106,655,905
869,694,017
Total Assets
976,333,441
976,349,922
Long-Term Liabilities
Other Liabilities
358,866,744
23,842,306
356,762,207
26,285,066
Total Liabilities
382,709,050
383,047,273
537,017,062
50,420,348
6,186,981
528,314,929
62,693,918
2,293,802
Net Assets:
Invested in Capital Assets - Net of Related Debt
Restricted
Unrestricted
Total Net Assets
$
593,624,391
$
593,302,649
The largest portion of the District’s net assets (80.96%) reflects its investment in capital assets (e.g.,
land, buildings, furniture and equipment), less any related debt still outstanding. The District uses
these capital assets to provide services to students; consequently, these assets are not available for
future spending.
The restricted portion of the District’s net assets (8.49%) represents resources that are subject to
external restrictions on how they may be used. The unrestricted net assets (1.04%) may be used to
meet the District’s ongoing obligations to students, employees, and creditors.
The key elements of the changes in the District’s net assets for the fiscal years ended June 30, 2010,
and June 30, 2009, are as follows:
6
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2010
GOVERNMENT-WIDE FINANCIAL ANALYSIS (Cont’d)
Operating Results for the Year
Governmental Activities
06/30/2010
06/30/2009
Program Revenues:
Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions
General Revenues:
Property Taxes, Levied for Operational Purposes
Property Taxes, Levied for Debt Service
Property Taxes, Levied for Capital Projects
Local Sales Taxes
Grants and Contributions Not Restricted to Specific Programs
Unrestricted Investment Earnings
Miscellaneous
$
Total Revenues
Expenses:
Instruction
Pupil Personnel Services
Instructional Media Services
Instruction and Curriculum Development Services
Instructional Staff Training Services
Instruction Related Technology
Board of Education
General Administration
School Administration
Facilities Acquisition and Construction
Fiscal Services
Food Services
Central Services
Pupil Transportation Services
Operation of Plant
Maintenance of Plant
Administrative Technology Services
Community Services
Interest on Long-Term Debt
Unallocated Depreciation/Amortization Expense
Total Functions/Program Expenses
Increase (Decrease) in Net Assets
Net Assets, Beginning
Adjustment to Beginning Net Assets
Net Assets, Ending
4,857,122
14,469,510
945,487
$
115,949,498
26,933,059
12,254,068
182,467,063
236,958
23,544,838
131,764,303
38,915,635
12,888,564
146,141,839
520,981
18,421,327
381,657,603
396,943,778
185,159,354
16,648,321
4,600,061
7,859,274
5,900,855
315,680
942,242
3,121,607
18,654,071
2,695,502
1,495,710
17,946,688
4,140,037
24,880,588
28,152,183
6,963,395
3,369,971
624,110
15,106,649
32,759,565
195,183,506
17,458,161
5,081,113
7,214,976
7,517,442
320,133
701,127
2,731,185
18,849,246
10,292,086
1,631,411
18,087,838
4,110,818
26,532,729
33,624,018
9,313,585
2,840,838
502,825
17,209,673
30,020,652
381,335,861
409,223,362
321,742
$
5,336,377
22,894,474
20,060,278
593,302,649
593,624,391
(12,279,584)
$
567,166,027
38,416,206
593,302,649
7
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2010
GOVERNMENT-WIDE FINANCIAL ANALYSIS (Cont’d)
Significant revenue sources included property and sales taxes, representing 40.64% of total
revenues, and state revenues, representing 36.62% of total revenues. Revenues from state sources
for current operation are primarily received through the Florida Education Finance Program (FEFP)
funding formula. The FEFP formula utilizes student enrollment data, and is designed to maintain
equity in funding across all Florida school district, taking into consideration the District’s funding ability
based on the local property tax base. Other state revenues are primarily for acquisition, construction,
and maintenance of education facilities.
Instructional expenses continued to be the major component of District outlays, representing 48.56%
of total expenses. Total expenses decreased $27,887,501, or 6.81% from the 2008-09 fiscal year,
primarily due to staffing cuts, restructuring of transportation services, and energy conservation
measures aimed at cutting costs.
FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS
Major Governmental Funds
The General Fund is the chief operating fund of the District. At the end of the current fiscal year,
unreserved, undesignated fund balance is $17,762,057, while the total fund balance is $23,387,947.
The unreserved, undesignated fund balance increased by $6,817,862, while the total fund balance
increased by $7,492,124 during the fiscal year. Key factors of this were a decrease in total
expenditures as a result of a cut in staffing, energy conservation measures, and restructuring of
transportation services.
The Capital Projects Fund – Capital Improvements Fund has a total fund balance of $19,094,274, all
of which is restricted for the acquisition, construction, and maintenance of capital assets. Fund
balance decreased by $3,980,719, over the prior year primarily due to decreased property values.
Capital Projects Fund – Other Capital Projects Fund has a total fund balance of $34,492,524. The
fund balance increased by $8,751,500 during the year, due to a decrease in capital projects
expenditures and less building activity.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the course of the 2009-10 fiscal year, the District amended its General Fund budget several
times, which resulted in a increase of total budgeted revenues amounting to $5,628,913, or 2.13%. At
the same time, final appropriations are less than the original budgeted amounts by $3,471,879.
Budget amendments were generally due to three factors: supplemental appropriations and
amendments approved after the beginning of the fiscal year to reflect new grants, increases in
existing grants, and new revenues sources; changes in revenue estimates for the State of Florida
Education Finance Program (FEFP), and approval of transfers between expenditure functions. The
District maintained its ongoing practice of conservative budgeting and monitoring of expenditures in
order to increase fund balance for emergencies. Expenditures did not exceed budgeted amounts.
8
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Year Ended June 30, 2010
CAPITAL ASSETS AND LONG-TERM DEBT
Capital Assets
The District’s investment in capital assets for its governmental activities as of June 30, 2010, amounts
to $863,327,559 (net of accumulated depreciation). This investment in capital assets includes land;
land improvements; improvements other than buildings; buildings and fixed equipment; furniture,
fixtures, and equipment; motor vehicles; property under capital lease; construction in progress; and
audio visual materials and computer software.
Long-Term Debt
At June 30, 2010, the District had total long-term debt outstanding of $342,801,020. Composition of
long-term debt is described in the notes to the financial statements. During the year, the District
issued State School Bonds, Series 2009-A to refund its outstanding State School Bonds, Series 1999A. The District also issued Certificates of Participation, Series 2010B-QSCB, a Qualified School
Construction Bond.
OTHER MATTERS OF SIGNIFICANCE
On November 10, 2009, the Board held a public hearing and voted unanimously to terminate the
charter of The Toussaint L’Ouverture International School, Inc., d/b/a Charter School of Fort Pierce.
The students’ last day was November 24, 2009 and the school is now closed.
As previously noted, 36.62% of the District’s revenues came from the State of Florida, and
approximately 40.64% came from property and sales taxes. The State’s primary source of revenue is
sales taxes, which are dependent on consumer spending by residents and tourists. As a result,
changes in tourism, employment, and the arrival of new residents into Florida and into St. Lucie
County can significantly impact our expected revenues in any given fiscal year.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the St. Lucie County District School
Board’s finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to the Chief Financial Officer, 4204 Okeechobee
Road, Ft. Pierce, Florida 34947.
9
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Statement of Net Assets
For the Year Ended June 30, 2010
Primary
Government
Governmental
Activities
Assets
Cash and cash equivalents
Investments
Accounts receivable, net
Deposits receivable
Due from other agencies
Inventory
Prepaid items
Deferred charges:
Issuance costs
Capital assets:
Land
Land Improvements - Nondepreciable
Construction in Progress
Improvements Other Than Buildings
Less Accumulated Depreciation
Buildings and Fixed Equipment
Less Accumulated Depreciation
Furniture, Fixtures and Equipment
Less Accumulated Depreciation
Motor Vehicles
Less Accumulated Depreciation
Audio Visual Materials and Computer Software
Less Accumulated Depreciation
Total assets
Liabilities
Salaries, benefits and payroll taxes payable
Accounts payable
Construction contracts retainage payable
Due to fiscal agent
Accrued interest
Due to other agencies
Unearned revenue
Noncurrent liabilities:
Portion due within one year:
Notes payable
Bonds payable
Obligations under capital leases
Liability for compensated absences
Certificates of participation payable
Portion due after one year:
Notes payable
Bonds payable
Liability for compensated absences
Certificates of participation payable
Other postemployment benefits obligation
Total liabilities
Net assets
Invested in capital assets, net of related debt
Restricted for:
Categorical carryover programs
Food service
Debt service
Capital projects
Other purposes
Unrestricted
Total net assets
The notes to the basic financial statements
are an integral part of this statement.
$
6,702,068
77,809,234
1,841,425
21,099,271
1,399,354
-
Component
Unit
$
4,154,530
952,306
159,785
104,372
5,667
195,984
-
40,020,578
1,065,033
11,105,867
13,808,506
(4,839,320)
927,958,960
(163,890,258)
44,640,202
(24,701,888)
31,813,302
(16,848,895)
13,513,100
(10,317,628)
976,333,441
76,842
(3,597)
1,755
(230)
1,045,916
(166,269)
171,248
(32,599)
2,511,180
10,591,499
4,149,837
537,295
1,841,361
90,280
6,632,034
598,622
428,990
19,907
59,368
5,667,537
2,162,529
6,922,759
4,273
-
120,970,509
6,855,183
209,240,215
7,048,012
382,709,050
271,794
1,382,954
537,017,062
1,044,061
2,320,676
1,158,991
300,320
46,640,361
6,186,981
$ 593,624,391
30,088
54,077
1,128,226
$
10
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Statement of Activities
For the Year Ended June 30, 2010
Program Revenues
Functions/Programs
Primary government:
Governmental activities:
Instruction
Pupil personnel services
Instructional media services
Instruction and curriculum develop. services
Instructional staff training services
Instruction related technology
Board
General administration
School administration
Facilities acquisition and construction
Fiscal services
Food services
Central services
Pupil transportation services
Operation of plant
Maintenance of plant
Administrative technology services
Community services
Interest on long-term debt
Unallocated depreciation/amortization
Total governmental activities
Charges for
Services
Expenses
$
185,159,353
16,648,321
4,600,062
7,859,273
5,900,853
315,680
942,241
3,121,608
18,654,071
2,695,503
1,495,711
17,946,688
4,140,038
24,880,588
28,152,181
6,963,395
3,369,971
624,110
15,106,649
32,759,565
381,335,861
$
Operating
Grants and
Contributions
4,857,122
4,857,122
$
Capital
Grants and
Contributions
488,648
13,980,862
14,469,510
$
-
Net (Expense) Revenue and
Changes in Net Assets
Primary
Government
Governmental
Component
Activities
Unit
945,487
945,487
$ (185,159,353)
(16,648,321)
(4,600,062)
(7,859,273)
(5,900,853)
(315,680)
(942,241)
(3,121,608)
(18,654,071)
(2,206,855)
(1,495,711)
891,296
(4,140,038)
(24,880,588)
(28,152,181)
(6,963,395)
(3,369,971)
(624,110)
(14,161,162)
(32,759,565)
(361,063,742)
(361,063,742)
Total primary government
$
381,335,861
$
4,857,122
$
14,469,510
$
945,487
Component unit:
Charter schools/foundation
Total component unit
$
$
11,531,306
11,531,306
$
$
282,524
282,524
$
$
449,593
449,593
$
$
210,900
210,900
Change in net assets
The notes to the basic financial statements
are an integral part of this statement.
-
(10,588,289)
(10,588,289)
General revenues:
Property taxes, levied for operational purposes
Property taxes, levied for capital projects
Local sales taxes
Grants and contributions not restricted to specific programs
Investment earnings
Miscellaneous
Total general revenues and transfers
Net assets - beginning - restated
Net assets - ending
$
$
115,949,498
26,933,059
12,254,068
182,467,063
236,958
23,544,838
361,385,484
11,171,139
2,192
532,074
11,705,405
321,742
1,117,116
593,302,649
593,624,391
$
11,110
1,128,226
11
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Balance Sheet
Governmental Funds
For the Year Ended June 30, 2010
General
Fund
Capital Projects Funds
Local Capital
Improvement
Other Capital
Tax
Projects
Other
Governmental
Funds
Total
Governmental
Funds
165,126
3,361
2,899,753
3,068,240
$
31,235,322
4,010,717
149,048
11,982,696
47,377,783
$
440,232
6,538,171
33,488
4,591
4,536,626
494,936
12,048,044
$
163,775
101,861
2,802,604
3,068,240
$
246,074
45,240
9,290,783
3,303,161
12,885,258
$
462,075
3,277
1,231,844
125,225
35,109
303,401
11,452
2,172,383
$
ARRA
Funds
Assets
Cash and cash equivalents
Investments
Taxes receivable, net
Accounts receivable, net
Due from other funds
Due from internal funds
Due from other agencies
Inventory
Total assets
Liabilities and fund balances
Liabilities:
Salaries, benefits and payroll taxes payable
Payroll deductions and withholdings
Accounts payable
Construction contracts retainage payable
Due to other agencies
Due to other funds
Due to internal funds
Deferred revenue
Total liabilities
$
$
$
Fund balances:
Reserved for:
Categorical carryover programs
Encumbrances
Inventory
Debt service
Other purposes
Undesignated, reported in:
General fund
Special revenue
Debt service
Capital projects
Total fund balances
Total liabilities and fund balances
The notes to the basic financial statements
are an integral part of this statement.
$
5,279,229
25,187,404
1,663,646
3,102,644
1,624,085
904,419
37,761,427
$
7,146,162
2,816,211
1,029,386
55,169
4,372
4,758
3,317,421
14,373,480
$
$
$
817,481
14,848,337
6,235,603
56,112
21,957,533
$
1,540,673
366,830
955,756
2,863,259
$
$
$
6,702,068
77,809,234
1,697,134
13,356,916
149,048
21,099,272
1,399,355
$ 122,213,027
7,772,012
2,819,488
4,149,838
537,295
90,278
13,356,916
4,758
6,632,034
35,362,619
2,236,438
699,207
904,419
1,785,826
-
6,440,843
-
3,845,584
-
4,535,619
827,726
-
2,236,438
15,521,253
904,419
827,726
1,785,826
17,762,057
23,387,947
-
12,653,431
19,094,274
30,646,941
34,492,524
975,200
1,313,956
2,223,161
9,875,662
17,762,057
975,200
1,313,956
45,523,533
86,850,407
12,048,044
$ 122,213,027
37,761,427
$
3,068,240
$
21,957,533
$
47,377,783
$
12
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Assets
For the Year Ended June 30, 2010
Amounts reported for governmental activities in the statement of net assets are different because:
Ending fund balance - governmental funds
$
86,850,407
Capital assets, net of accumulated depreciation, used in governmental activities are not
financial resources, and therefore, are not reported as assets in the governmental funds.
863,327,559
Debt issuance costs are not expensed in the government-wide statements, but are reported as
deferred charges and amortized over the life of the debt.
4,154,530
Long-term liabilities are not due and payable in the current period and therefore are not
reported as liabilities in the governmental funds. Long-term liabilities at year-end consist of:
Bonds payable
(126,638,046)
Liability for compensated absences
(9,017,712)
Certificates of participation payable
(216,162,974)
Other postemployment benefits obligation
(7,048,012)
(358,866,744)
Interest on long-term debt is accrued as a liability in the government-wide statements, but is
not recognized in the governmental funds.
Net assets of governmental activities
The notes to the basic financial statements
are an integral part of this statement.
(1,841,361)
$ 593,624,391
13
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2010
General
Fund
Revenues
Federal direct
Federal through state
State sources
Local sources
Total revenues
Expenditures
Current:
Instruction
Pupil personnel services
Instructional media services
Instruction and curriculum develop. services
Instructional staff training services
Instructional related technology
Board
General administration
School administration
Facilities acquisition and construction
Fiscal services
Food services
Central services
Pupil transportation services
Operation of plant
Maintenance of plant
Administrative technology services
Community services
Capital outlay:
Facilities acquisition and construction
Other capital outlay
Debt service:
Principal
Interest
Dues, fees and issuance costs
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses)
Refunding bonds issued
Premium on refunding bonds
Certificates of participation issued
Proceeds from the sale of capital assets
Payments to refunded bond escrow agent
Loss recoveries
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balance - beginning
Fund balance - ending
The notes to the basic financial statements
are an integral part of this statement.
$
309,334
1,667,084
135,938,002
131,402,966
269,317,386
Capital Projects Funds
Local Capital
Improvement
Other Capital
Tax
Projects
ARRA
Funds
$
19,983,489
19,983,489
$
26,965,505
26,965,505
$
1,452,358
12,909,517
14,361,875
Other
Governmental
Funds
Total
Governmental
Funds
$
$
29,914
36,097,393
2,404,487
5,414,898
43,946,692
339,248
57,747,966
139,794,847
176,692,886
374,574,947
166,751,547
9,885,539
1,660,812
2,605,304
741,453
314,875
939,885
2,433,203
18,259,189
588,644
1,491,901
4,026,858
17,790,438
27,852,409
6,904,836
3,154,182
353,930
7,161,978
6,081,281
2,846,238
1,288,178
946,890
173,418
347,397
7,100
371,612
222,061
40,995
207,267
-
1,296,903
-
457,486
-
10,775,975
639,110
81,596
3,946,069
4,197,519
507,035
352,468
17,901,449
95,055
901,531
6,039
268,590
184,689,500
16,605,930
4,588,646
7,839,551
5,885,862
314,875
939,885
3,113,656
18,606,586
2,695,501
1,491,901
17,901,449
4,129,013
19,063,581
28,080,509
6,945,831
3,361,449
622,520
49,179
149,280
289,074
18,360,195
1,394,058
5,852,699
1,415,827
3,017,001
1,651,980
27,279,074
4,900,219
265,953,464
19,983,489
21,051,156
7,726,012
10,952,423
14,969,626
133,644
70,397,110
10,952,423
14,969,626
133,644
385,111,231
3,363,922
-
5,914,349
6,635,863
(26,450,418)
(10,536,284)
17,813
977,733
3,132,656
4,128,202
-
6,104,920
(15,999,988)
(9,895,068)
12,110,443
(9,994,805)
2,115,637
450,000
44,557
121,557
(490,471)
22,862,137
22,987,780
450,000
44,557
12,232,000
17,813
(490,471)
7,082,653
25,994,793
(25,994,793)
19,336,552
7,492,124
-
(3,980,719)
8,751,500
(3,462,638)
8,800,268
15,895,823
-
23,074,993
25,741,024
13,338,300
78,050,139
9,875,662
$ 86,850,407
$ 23,387,947
$
-
$
19,094,274
$
34,492,524
$
14
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Government Funds to the
Statement of Activities
Year Ended June 30, 2010
Net change in fund balances - total governmental funds
$
8,800,268
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities,
the cost of those assets is allocated over their estimated useful lives as depreciation expense. This
is the amount of depreciation expense in excess of capital outlays in the current period.
Capital Outlay - Capitalized
29,799,708
Less: Depreciation Expense
(38,527,940)
(8,728,232)
The statement of activities reflects only the gain/loss on the sale of assets, whereas the
governmental funds include all proceeds from these sales. Thus, the change in net assets differs
from the change in fund balances by the cost of assets sold.
(535,971)
The beginning capital assets balance was adjusted in the current period to
correct prior year balances as a result of a software conversion.
2,897,746
Repayment of debt principal is an expenditure in the governmental funds, but the repayment
reduces long-term liabilities in the statement of net assets. This is the amount of the repayment of
debt principal in the current period.
Certificates of Participation
5,565,000
Bonds
5,725,000
Notes
142,421
11,432,421
Bond proceeds provide current financial resources to governmental funds, but issuing debt
increases long-term liabilities in the statement of net assets. These are the amounts attributable to
debt issuances in the current period.
Certificates of Participation
(12,232,000)
Bonds
(450,000)
(12,682,000)
Debt issuance costs are reported in the year the debt is issued as an expenditure in the
governmental funds; these costs are reported in the government-wide statements as an asset and
are amortized over the life of the associated debt.
Deferred Charges, June 30, 2010
4,154,530
Deferred Charges, June 30, 2009
(4,265,422)
(110,892)
Premiums and discounts are reported in the governmental funds in the year debt is issued, but are
deferred and amortized over the life of the debt in the government-wide statements.
Premium Amortization, Net of Proceeds
126,838
Discount Amortization
(156,770)
(29,932)
Interest on long-term debt is recognized as an expenditure in the governmental funds when due,
but is recognized as an expense when interest accrues in the statement of activities. This is the
amount of accrued interest at year-end, less that amount accrued in the prior year.
Accrued Interest, June 30, 2010
(1,841,361)
Accrued Interest, June 30, 2009
1,944,722
103,361
In the statement of activities, the cost of compensated absences is measured by the amounts
earned during the year, while in the governmental funds expenditures are recognized based on the
amounts actually paid for compensated absences. This is the net amount of compensated
absences earned in excess of the amount paid in the current period.
365,716
Other postemployment benefits are recorded in the statement of activities under the full accrual
basis of accounting, but are not recorded in the governmental funds until paid. This is the net
increase in other postemployment benefits liability for the current fiscal year.
Change in net assets of governmental activities
The notes to the basic financial statements
are an integral part of this statement.
(1,190,743)
$
321,742
15
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Statement of Fiduciary Net Assets
Fiduciary Fund
For the Year Ended June 30, 2010
Agency Fund
Internal
Accounts
Assets
Cash and cash equivalents
Accounts receivable, net
Inventory
Total assets
$
1,965,381
13,047
19,104
$
1,997,532
$
20,926
2,105
1,974,501
$
1,997,532
Liabilities
Accounts payable
Due to other funds
Internal accounts payable
Total liabilities
The notes to the basic financial statements
are an integral part of this statement.
16
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity
The District School Board has direct responsibility for operation, control, and
supervision of District schools and is considered a primary government for financial
reporting. The St. Lucie County School District is considered part of the Florida system
of public education. The governing body of the school district is the St. Lucie County
District School Board, which is composed of five elected members. The appointed
Superintendent of Schools is the executive officer of the School Board. Geographic
boundaries of the District correspond with those of St. Lucie County.
Criteria for determining if other entities are potential component units which should be
reported within the District's basic financial statements are identified and described in
the Governmental Accounting Standards Board's (GASB) Codification of Governmental
Accounting and Financial Reporting Standards, Sections 2100 and 2600. The
application of these criteria provides for identification of any entities for which the
District School Board is financially accountable and other organizations for which the
nature and significance of their relationship with the School Board are such that
exclusion would cause the District's basic financial statements to be misleading or
incomplete.
Based on the application of these criteria, the following component units are included
within the District School Board's reporting entity:
–
Blended Component Unit. The St. Lucie County School Board Leasing
Corporation, Inc., was formed to facilitate financing for the acquisition of
facilities and equipment as further discussed in Note 5. Due to the substantive
economic relationship between the St. Lucie County District School Board and
the Leasing Corporation, the financial activities of the Leasing Corporation are
included in the accompanying basic financial statements. Separate financial
statements for the Leasing Corporation are not published.
–
Discretely Presented Component Units. The component units column in the
basic financial statements include the financial data of the District's other
component units.
The St. Lucie County Education Foundation, Inc., (Foundation) is a separate not-forprofit corporation organized and operated as a direct-support organization to receive,
hold, invest, and administer property and to make expenditures to and for the benefit of
the District. Because of the nature and significance of its relationship with the District,
the Foundation is considered a component unit.
Renaissance Charter School of St. Lucie, and NAU Charter School, are both not-forprofit corporations organized pursuant to Chapter 617, Florida Statutes, the Florida Not
For Profit Cooperation Act, and Section 1002.33, Florida Statutes. The charter schools
operate under charters approved by its sponsor, the St. Lucie County District School
Board. The charter schools are considered to be component units of the District since
they are fiscally dependent on the District to levy taxes for its support.
17
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
The financial data reported on the accompanying statements was derived from the
Foundation’s and charter school’s unaudited financial statements for the fiscal year
ended June 30, 2010. The audit reports are filed in the District’s administrative offices.

Change in Reporting Entity
The Toussaint L’Ouverture International School, Inc., d/b/a Charter School of Fort
Pierce ceased operations in fiscal year 2010. The Charter School of Fort Pierce was
included in fiscal year 2009 financial statements with negative net assets of $13,555.
Beginning net assets were adjusted to reflect the removal of the charter school as a
result of the cease of operations. The NAU Charter School began operations in fiscal
year 2009 prior to opening for students which resulted in a deficit in net assets at June
30, 2009 of $250,000. Since the NAU Charter School was not in operation with
students at June 30, 2009 it was not included in fiscal year 2009 financial statements of
the District. The NAU Charter School was deemed a component unit in the current year
and the beginning net assets of the component units as a whole have been adjusted by
the net deficit of $250,000. Total adjustment to beginning net assets was as follows:
Net Assets – beginning, as previously reported
$ 247,555
Adjustments for effect of change in reporting entity:
Charter School of Fort Pierce
NAU Charter School
Net Assets – beginning, adjusted

$ 13,555
(250,000)
(236,445)
$ 11,110
Basis of Presentation
Government-wide Financial Statements - Government-wide financial statements,
including the statement of net assets and the statement of activities, present
information about the School District as a whole. These statements include the
nonfiduciary financial activity of the primary government and its component units.
Government-wide financial statements are prepared using the economic resources
measurement focus. The statement of activities presents a comparison between direct
expenses and program revenues for each function or program of the District’s
governmental activities. Direct expenses are those that are specifically associated with
a service, program, or department and are thereby clearly identifiable to a particular
function.
Program revenues include charges paid by the recipient of the goods or services
offered by the program, and grants and contributions that are restricted to meeting the
operational or capital requirements of a particular program. Revenues that are not
classified as program revenues are presented as general revenues. The comparison
of direct expenses with program revenues identifies the extent to which each
governmental function is self-financing or draws from the general revenues of the
District.
The effects of interfund activity have been eliminated from the government-wide
financial statements.
18
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
Fund Financial Statements - Fund financial statements report detailed information
about the District in the governmental, proprietary, and fiduciary funds. The focus of
governmental fund financial statements is on major funds rather than reporting funds
by type. Each major fund is reported in a separate column. Nonmajor funds are
aggregated and reported in a single column. Because the focus of governmental fund
financial statements differs from the focus of government-wide financial statements, a
reconciliation is presented with each of the governmental fund financial statements.
The District reports the following major governmental funds:
General Fund – to account for all financial resources not required to be
accounted for in another fund, and for certain revenues from the State that are
legally restricted to be expended for specific current operating purposes.
- Special Revenue – ARRA Economic Stimulus Funds – to account for certain
Federal grant program resources related to the American Recovery and
Reinvestment Act (ARRA).
- Capital Projects – Local Capital Improvement Fund – to account for the
financial resources generated by the local capital improvement tax levy to be
used for educational capital outlay needs, including new construction,
renovation and remodeling projects, and debt service payments on capital
leases for relocatable school buildings.
- Capital Projects – Other – to account for other financial resources generated by
Certificates of Participation, Sales Tax Revenue Bonds, and other debt;
Classrooms First funds to be used for educational capital outlay needs,
including new construction, and remodeling and renovation projects; and repair
and remediation of damage caused by hurricanes Frances, Jeanne, and Wilma,
and Tropical Storm Fay, along with associated insurance loss recoveries.
Additionally, the District reports the following fiduciary fund type:
-
-

Agency Funds – to account for resources of the school internal funds which are
used to administer moneys collected at several schools in connection with
school, student athletic, class, and club activities.
Basis of Accounting
Basis of accounting refers to when revenues and expenditures, or expenses, are
recognized in the accounts and reported in the financial statements. Basis of
accounting relates to the timing of the measurements made, regardless of the
measurement focus applied.
The government-wide financial statements are prepared using the accrual basis of
accounting, as are the proprietary fund and fiduciary funds financial statements.
Revenues are recognized when earned and expenses are recognized when a liability
is incurred, regardless of the timing of the related cash flows. Property taxes are
recognized in the year for which they are levied. Revenues from grants, entitlements,
and donations are recognized in the fiscal year in which all eligibility requirements
imposed by the provider have been satisfied.
19
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
Governmental fund financial statements are prepared using the modified accrual basis
of accounting. Revenues, except for certain grant revenues, are recognized when they
become 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. The District considers revenues to be available if they are
collected within 60 days of the end of the current fiscal year, with exception of
insurance loss recoveries, which the District considers to be available if collection is
expected. When grant terms provide that the expenditure of resources is the prime
factor for determining eligibility for Federal, State, and other grant resources, revenue
is recognized at the time the expenditure is made. Under the modified accrual basis of
accounting, expenditures are generally recognized when the related fund liability is
incurred, except for principal and interest on long-term debt, claims and judgments,
postemployment healthcare benefits, and compensated absences, which are
recognized when due. Allocations of cost, such as depreciation, are not recognized in
governmental funds.
When both restricted and unrestricted resources are available for use, it is the District’s
policy to use restricted resources first, then unrestricted resources as they are needed.
The St. Lucie Education Foundation, Inc., is accounted for under the not-for-profit basis
of accounting and uses the accrual basis of accounting whereby revenues are
recognized when earned and expenses are recognized when incurred.
The Renaissance Charter School and NAU Charter School are accounted for as
governmental organizations and follow the same accounting model as the District’s
governmental activities.

Deposits and Investments
The District’s cash and cash equivalents are considered to be cash on hand, demand
deposits, and short-term, highly liquid investments with original maturities of three
months or less. The amounts reported as cash and cash equivalents consist of cash
on hand, cash in demand deposits, cash in money market accounts, and cash placed
with the Florida PRIME investment pool.
Cash deposits are held by banks qualified as public depositories under Florida law. All
deposits are insured by Federal depository insurance, up to specified limits, or
collateralized with securities held in Florida's multiple financial institution collateral pool
as required by Chapter 280, Florida Statutes.
Investments consist of amounts placed in SBA Debt Service accounts for investment of
debt service moneys, amounts placed with the SBA for participation in the LGIP
investment pool created by Sections 218.405 and 218.417, Florida Statutes, and those
made locally.
These investment pools operate under investment guidelines
established by Section 215.47, Florida Statutes.
The District’s investments in the LGIP, which the SBA indicates is a Securities and
Exchange Commission Rule 2a7-like external investment pool, as of June 30, 2010,
are similar to money market funds in which shares are owned in the fund rather than
the underlying investments. These investments are reported at fair value, which is
amortized cost.
20
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
Investments made locally consist of amounts placed in money market funds, and
amounts placed in United States Government Agency securities, and are reported at
fair value. Types and amounts of investments held at fiscal year-end are described in
a subsequent note on investments.

Inventories
Inventories consist of expendable supplies held for consumption in the course of
District operations. Inventories are stated at cost on the weighted moving average
basis, except that United States Department of Agriculture surplus commodities are
stated at their fair value as determined at the time of donation to the District's food
service program by the Florida Department of Agriculture and Consumer Services,
Bureau of Food Distribution. The costs of inventories are recorded as expenditures
when used rather than purchased.

Capital Assets
Expenditures for capital assets acquired or constructed for general District purposes
are reported in the governmental fund that financed the acquisition or construction.
The capital assets so acquired are reported at cost in the government-wide statement
of net assets but are not reported in the governmental fund financial statements.
Capital assets are defined by the District as those costing more than $1,000. Such
assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated assets are recorded at fair value at the date of donation.
Capital assets are depreciated using the straight-line method over the following
estimated useful lives:
Description
Improvements Other than Buildings
Buildings and Fixed Equipment
Estimated Lives
8 – 40 years
10 – 50 years
Furniture, Fixtures and Equipment
3 – 15 years
Motor Vehicles
5 – 10 years
Audio Visual Materials and Computer Software
3 – 5 years
Current year information relative to changes in capital assets is described in a
subsequent note.

Long-Term Liabilities
Long-term obligations that will be financed from resources to be received in the future
by governmental funds are reported as liabilities in the government-wide statement of
net assets. Bond and Certificates of Participation premiums and discounts, as well as
issuance costs, are deferred and amortized over the life of the bonds using the
effective interest method. Bonds and Certificates of Participation payable are reported
net of the applicable bond premium or discount. Debt issuance costs are reported as
deferred charges and amortized over the term of the related debt.
21
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
In the governmental fund financial statements, bonds and other long-term obligations
are not recognized as liabilities until due. Governmental fund types recognize bond
premiums and discounts, as well as bond issuance costs, during the current period.
The face amount of debt issued is reported as other financing sources, while discounts
on debt issuances are reported as other financing uses. Issuance costs, whether or
not withheld from the actual debt proceeds received, are reported as debt service
expenditures.
In the government-wide financial statements, compensated absences (i.e., paid
absences for employee vacation leave and sick leave) are accrued as liabilities to the
extent that it is probable that the benefits will result in termination payments. A liability
for these amounts is reported in the governmental fund financial statements only for
the current portion of compensated absences expected to be paid using expendable
available resources.
Changes in long-term liabilities for the current year are reported in a subsequent note.

State Revenue Sources
Revenues from State sources for current operations are primarily from the Florida
Education Finance Program administered by the Florida Department of Education
(Department) under the provisions of Section 1011.62, Florida Statutes. In accordance
with this law, the District determines and reports the number of full-time equivalent
(FTE) students and related data to the Department. The Department performs certain
edit checks on the reported number of FTE and related data, and calculates the
allocation of funds to the District. The District is permitted to amend its original
reporting for a period of nine months following the date of the original reporting. Such
amendments may impact funding allocations for subsequent years. The Department
may also adjust subsequent fiscal period allocations based upon an audit of the
District's compliance in determining and reporting FTE and related data. Normally,
such adjustments are treated as reductions or additions of revenue in the year when
the adjustments are made.
The State provides financial assistance to administer certain categorical educational
programs. State Board of Education rules require that revenue earmarked for certain
programs be expended only for the program for which the money is provided, and
require that the money not expended as of the close of the fiscal year be carried
forward into the following year to be expended for the same categorical educational
programs. The Department generally requires that categorical educational program
revenues be accounted for in the General Fund. A portion of the fund balance of the
General Fund is reserved in the governmental fund financial statements for the
unencumbered balance of categorical educational program resources.
The State allocates gross receipts taxes, generally known as Public Education Capital
Outlay money, to the District on an annual basis. The District also received an
allocation under the Classrooms for Kids Program. The District is authorized to expend
these funds only upon applying for and receiving an encumbrance authorization from
the Department. Accordingly, the District recognizes the allocation of Public Education
Capital Outlay (and Classrooms for Kids Program) funds as deferred revenue until
such time as an encumbrance authorization is received.
22
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
A schedule of revenue from State sources for the current year is presented in a
subsequent note.

District Property Taxes
The School Board is authorized by State law to levy property taxes for district school
operations, capital improvements, and debt service.
Property taxes consist of ad valorem taxes on real and personal property within the
District. Property values are determined by the St. Lucie County Property Appraiser,
and property taxes are collected by the St. Lucie County Tax Collector.
The School Board adopted the 2009 tax levy on September 8, 2009. Tax bills are
mailed in October and taxes are payable between November 1 of the year assessed
and March 31 of the following year at discounts of up to 4 percent for early payment.
Taxes become a lien on the property on January 1, and are delinquent on April 1, of
the year following the year of assessment. State law provides for enforcement of
collection of personal property taxes by seizure of the property to satisfy unpaid taxes,
and for enforcement of collection of real property taxes by the sale of interest bearing
tax certificates to satisfy unpaid taxes. The procedures result in the collection of
essentially all taxes prior to June 30 of the year following the year of assessment.
Property tax revenues are recognized in the government-wide financial statements
when the Board adopts the tax levy. Property tax revenues are recognized in the
governmental fund financial statements when taxes are received by the District, except
that revenue is accrued for taxes collected by the St. Lucie County Tax Collector at
fiscal year-end but not yet remitted to the District.
Millages and taxes levied for the current year are presented in a subsequent note.

Capital Outlay Surtax
In October 2005, the voters of St. Lucie County approved a one-half cent school capital
outlay surtax on sales in the County for 10 years, effective January 1, 2006, to pay
construction costs of certain school facilities and related costs in accordance with
Section 212.055(6), Florida Statutes.

Educational Impact Fees
St. Lucie County imposes an educational impact fee based on an ordinance adopted
by the County Commission. The educational impact fee is collected by the County for
most new residential construction. The fees are collected by the County and each
municipality within the County based on an interlocal agreement. The fees shall be
used solely for the purpose of providing capital improvements to the public educational
system necessitated by new residential development, and shall not be used for any
expenditure that would be classified as a maintenance or repair expense. The
authorized uses include, but are not limited to, land acquisition, facility design and
construction costs, furniture and equipment, and payment of principal, interest, and
related costs of indebtedness necessitated by new residential development. Because
the educational impact fee is similar to a capital-type special assessment, it is reported
as a program revenue in the government-wide financial statements.
23
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010

Federal Revenue Sources
The District receives Federal awards for the enhancement of various educational
programs. Federal awards are generally received based on applications submitted to,
and approved by, various granting agencies. For Federal awards in which a claim to
these grant proceeds is based on incurring eligible expenditures, revenue is
recognized to the extent that eligible expenditures have been incurred.
2.
BUDGETARY COMPLIANCE AND ACCOUNTABILITY

Budgetary Information
The Board follows procedures established by State statutes and State Board of
Education rules in establishing budget balances for governmental funds, as described
below:
-
-
-
Budgets are prepared, public hearings are held, and original budgets are
adopted annually for all governmental fund types in accordance with
procedures and time intervals prescribed by law and State Board of Education
rules.
Appropriations are controlled at the object level (e.g., salaries, purchased
services, and capital outlay) within each activity (e.g., instruction, pupil
personnel services, and school administration) and may be amended by
resolution at any School Board meeting prior to the due date for the annual
financial report.
Budgets are prepared using the same modified accrual basis as is used to
account for governmental funds.
Budgetary information is integrated into the accounting system and, to facilitate
budget control, budget balances are encumbered when purchase orders are
issued. Appropriations lapse at fiscal year end and encumbrances outstanding
are honored from the subsequent year's appropriations.
24
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
3.
INVESTMENTS
As of June 30, 2010, the District has the following investments and maturities:
Investment
State Board of Administration:
Local Government Surplus Funds Trust
Fund Investment Pool (LGIP) (1)
Debt Service Accounts
Fidelity Institutional United States Treasury Money Market
U.S. Bank Money Market Funds
First American Funds Money Market
Bank of America Master Repurchase Contract (2)
Obligations of United States Government
Agencies and Instrumentalities
Maturities
45.9 Day Average
6 Months
55 Day Average
50 Day Average
49 Day Average
April 2020
Fair Value
$
July 2010
$
13,472,566
1,589,616
11,674,685
25,081,247
4,482,545
908,575
20,595,000
77,804,234
Notes:
(1) Pursuant to trust agreements in connection with financing arrangements for the District's
Certificates of Participation, Series 2004, 2005, 2007, and 2010, the trustee holds all or part of
these investments in trust accounts as follows: LGIP $1,444,605, US Bank Money Markets
$11,679,684, and First American Funds Money Market $19,701.
(2) Pursuant to trust agreements in connection with financing arrangements for the District's
of Participation, Series 2004-QZAB.
Interest Rate Risk
- The District’s investment policy encourages investment maturities that match
known cash flow needs and anticipated cash flow requirements as a means of
managing its exposure to fair value losses from increasing interest rates.
Investment of current operating funds shall have maturities no longer than two
years.
Investment of bond reserves, construction funds, and other
nonoperating funds shall have a term appropriate to the need for funds and in
accordance with debt covenants, but in no event shall exceed five years.
- The LGIP had a weighted average days to maturity (WAM) of 45.9 days at June
30, 2010. A portfolio’s WAM reflects the average maturity in days based on final
maturity or reset date, in the case of floating rate instruments. WAM measures
the sensitivity of the portfolio to interest rate changes.
Credit Risk
-
The District’s investment policy limits investments to SBA LGIP, or any
intergovernmental investment pool authorized pursuant to the Florida Interlocal
Cooperating Act, as provided in Section 163.01, Florida Statutes; United States
Government securities, obligations of United States Government Agencies and
Instrumentalities, interest-bearing time deposits in qualified public depositories,
as defined in Section 280.02, Florida Statutes; SEC registered money market
fund with the highest rating from at least one nationally recognized statistical
rating organization and an average weighted maturity of 90 days or less; and
certain repurchase agreements, commercial paper, bankers’ acceptances, and
state or local government taxable or tax-exempt debt, subject to various
limitations.
25
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
The District’s investments in the State Board of Administration Debt Service
Accounts are to provide for debt service payments on bond debt issued by the
State Board of Education for the benefit of the District. The District relies on
policies developed by the SBA for managing credit risk for this account.
- As of June 30, 2010, the District’s investment in the LGIP investment pool is
rated AAAm by Standard & Poor’s. The District’s investments in Obligations of
United States Agencies are unrated. The First American Funds Money Market
Funds and Fidelity Institutional United States Treasury Money Market Funds
are rated AAAm by Standard and Poor’s. The U. S. Bank Money Market fund is
considered a cash equivalent and is rated A-1 by Standard and Poor’s.
Custodial Credit Risk
-
Section 218.415(18), Florida Statutes, requires the District to earmark all
investments and 1) if registered with the issuer or its agents, the investment
must be immediately placed for safekeeping in a location that protects the
governing body’s interest in the security; 2) if in book entry form, the investment
must be held for the credit of the governing body by a depository chartered by
the Federal Government, the State, or any other state or territory of the United
States which has a branch or principal place of business in this State, or by a
national association organized and existing under the laws of the United States
which is authorized to accept and execute trusts and which is doing business in
this State, and must be kept by the depository in an account separate and apart
from the assets of the financial institution; or 3) if physically issued to the holder
but not registered with the issuer or its agents, must be immediately placed for
safekeeping in a secured vault. The District investment policy addresses
custodial credit risk in that all securities, with the exception of overnight
repurchase agreements, are held with a third party custodian; and all securities
purchased by, and all collateral obtained by the District should be properly
designated as an asset of the District.
Concentration of Credit Risk
-
-
The District’s investment policy limits the amounts that may be invested in any
one issuer to from 25 percent to 100 percent of available funds, depending on
investment type. For United States Government sponsored agencies no limit is
placed on the amount of investments in this investment type; however, a
maximum of 50 percent of the available investment funds may be invested in
one issuer.
26
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
4.
CHANGE IN CAPITAL ASSETS
Changes in capital assets are presented in the table below.
Balance
Adjustments
Additions
Deletions
Balance
07/01/09
06/30/10
GOVERNMENTAL ACTIVITIES
Capital Assets Not Being Depreciated:
Land
$
Land Improvements
40,020,578
$
-
$
-
$
-
$
40,020,578
975,806
-
89,227
-
1,065,033
Construction in Progress
159,341,365
-
7,927,068
156,162,566
11,105,867
Total Assets Not Depreciated
200,337,749
-
8,016,295
156,162,566
52,191,478
13,459,759
-
348,747
-
13,808,506
-
174,334,835
-
927,958,960
2,754,583
3,012,948
44,640,202
89,090
451,603
31,813,302
Capital Assets Being Depreciated:
-
Improvements Other Than Building
Buildings and Fixed Equipment
753,624,125
Furniture, Fixtures and Equipment (1)
47,911,077
Motor Vehicles (1)
32,149,401
(3,012,510)
26,414
Audio Visual Materials and
Computer Software (1)
Total Capital Assets Depreciated
13,529,520
(14,211)
418,723
420,932
13,513,100
860,673,882
(3,000,307)
177,945,978
3,885,483
1,031,734,070
-
775,856
-
4,839,320
-
Less Accumulated Depreciation for:
-
Improvements Other Than Building
4,063,464
Buildings and Fixed Equipment
27,886,692
-
163,890,258
Furniture, Fixtures and Equipment (1)
136,003,566
27,737,890
(5,826,506)
5,363,139
2,572,635
24,701,888
Motor Vehicles (1)
14,438,560
(71,547)
2,844,779
362,897
16,848,895
Property Under Capital Lease
-
Audio Visual Materials and
-
Computer Software (1)
9,074,134
Total Accumulated Depreciation
Total Accumulated Depreciation
Capital Assets, Net
-
191,317,614
(5,898,053)
669,356,268
$
869,694,017
$
1,657,474
413,980
10,317,628
38,527,940
3,349,512
220,597,989
2,897,746
139,418,038
2,897,746
$ 147,434,333
535,971
$
156,698,537
811,136,081
$
863,327,559
Notes:
(1) The District implemented a new software program in 2009 to track capital assets. During the conversion process, the District
adjusted its accounts records to reflect the subsidiary detail. These were additional revenues identified during the current year
upon completion of the conversion.
Depreciation expense was charged to functions as follows:
Function
GOVERNMENTAL ACTIVITIES
Pupil Transportation Services
Unallocated
Total Depreciation Expense - Governmental Activities
Amount
$
$
5,768,375
32,759,565
38,527,940
27
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
5.
CERTIFICATES OF PARTICIPATION
The District entered into a financing arrangement on August 21, 2001, which arrangement
was characterized as a lease-purchase agreement, with the St. Lucie School Board Leasing
Corporation (Corporation) whereby the District secured financing of various educational
facilities in the total amount of $70,400,000 to partially refund its Certificates of Participation,
Series 1995, and Series 2000, and secure financing of various educational facilities. The
financing was accomplished through the issuance of Certificates of Participation, Series 2001
A, B, and C, to be repaid from the proceeds of rents by the District.
As a condition of the financing arrangement, the District has given a ground lease on District
property to the Corporation, with a rental fee of $10 per year. The initial term of the lease is
32 years commencing on July 15, 2001. The properties covered by the ground lease are,
together with the improvements constructed thereon from the financing proceeds, leased
back to the District. If the District fails to renew the lease and to provide for the rent payments
through to term, the District may be required to surrender the sites included under the Ground
Lease Agreement for the benefit of the securers of the Certificates for a period of time
specified by the arrangement which may be up to 32 years from the date of inception of the
arrangement. The District properties included in the ground lease under this arrangement
include renovation and improvement of the Administration Building, Fairlawn Elementary
School, Frances K. Sweet Elementary School, Dan McCarty Middle School, and Ft. Pierce
Magnet School of the Arts.
The District entered into a financing arrangement on April 4, 2003, which arrangement was
characterized as a lease-purchase agreement, with the Corporation whereby the District
secured financing of $34,805,000 to refund the remaining portion of its Certificates of
Participation, Series 1993, which were partially refunded by the issuance of Certificates of
Participation, Series 2001 A, B, and C (described above). The financing was accomplished
through the issuance of Certificates of Participation, Series 2003A, to be repaid from the
proceeds of rents by the District.
As a condition of the financing arrangement, the District has given a ground lease on District
property to the Corporation, with a rental fee of $10 per year. The initial term of the lease is
30 years commencing on July 1, 2003. The properties covered by the ground lease are,
together with the improvements constructed thereon from the financing proceeds, leased
back to the District. If the District fails to renew the lease and to provide for the rent payments
through to term, the District may be required to surrender the sites included under the Ground
Lease Agreement for the benefit of the securers of the Certificates for a period of time
specified by the arrangement which may be up to 30 years from the date of inception of the
arrangement. The District properties included in the ground lease under this arrangement
include Southport Middle School, Forest Grove Middle School, Manatee Elementary School,
Rivers Edge Elementary School, Savanna Ridge Elementary School, Southern Oaks Middle
School, Lincoln Park Academy Addition, Dan McCarty Middle School Addition, St. Lucie
Elementary School Addition, and the Maintenance/Transportation Complex.
28
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
The District entered into financing arrangements on April 30, 2004, which were characterized
as lease-purchase agreements, with the Corporation whereby the District secured financing in
the amounts of $75,580,000 and $1,277,000, respectively, for various educational facilities
and technology-related equipment. The financing was accomplished through the issuance of
Certificates of Participation, Series 2004A, and Series 2004-QZAB, to be repaid from the
proceeds of rents by the District. The Series 2004-QZAB is a Qualified Zone Academy Bond
issue not subject to interest.
As a condition of these financing arrangements, the District has given a ground lease on
District property to the Corporation, with a rental fee of $10 per year. The initial term of the
Series 2004A Certificates is 26 years commencing on April 15, 2004. The properties covered
by the ground lease are, together with the improvements constructed thereon from the
financing proceeds, leased back to the District. If the District fails to renew the lease and to
provide for the rent payments through to term, the District may be required to surrender the
sites included under the Ground Lease Agreement for the benefit of the securers of the
Certificates for a period of time specified by the arrangement which may be up to 30 years
from the date of inception of the arrangement. The District properties included in the ground
lease under the Series 2004A Certificates include Oak Hammock K-8 School and Treasure
Coast High School; the ground lease under the 2004-QZAB Certificates includes technologyrelated equipment at 19 District schools.
The District entered into a financing arrangement on September 21, 2005, which was
characterized as a lease-purchase agreement, with the Corporation whereby the District
secured financing of various educational facilities in the total amount of $38,600,000. The
financing as accomplished through the issuance of Certificates of Participation, Series 2005,
to be repaid from the proceeds of rents by the District.
As a condition of the financing arrangement, the District has given a ground lease on District
property to the Corporation, with a rental fee of $10 per year. The initial term of the lease is
23 years commencing on September 1, 2005. The properties covered by the ground lease
are, together with the improvements constructed thereon from the financing proceeds, leased
back to the District. If the District fails to renew the lease and to provide for the rent payments
through to term, the District may be required to surrender the sites included under the Ground
Lease Agreement for the benefit of the securers of the Certificates for a period of time
specified by the arrangement which may be up to 30 years from the date of inception of the
arrangement. The District properties included in the ground lease under this arrangement
include WestGate K-8 School and improvements to Treasure Coast High School.
The District entered into a financing arrangement on January 1, 2007, which was
characterized as lease-purchase agreement, with the Corporation, whereby the District
secured financing in the amounts of $21,865,000 for the planning and construction of the
Treasure Coast University Charter School (called Palm Pointe Educational Research School
at Tradition). The financing was accomplished through the issuance of Certificates of
Participation, Series 2007, to be repaid from the proceeds of rents by the District.
29
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
As a condition of this financing arrangement, the District has given a ground lease on District
property to the Corporation, with a rental fee of $10 per year. The initial term of the lease is
25 years commencing on January 31, 2007. The properties covered by the ground lease are,
together with the improvements constructed thereon from the financing proceeds, leased
back to the District. If the District fails to renew the lease and to provide for the rent payments
through to term, the District may be required to surrender the sites included under the Ground
Lease Agreement for the benefit of the securers of the Certificates for a period of time
specified by the arrangement which may be up to 30 years from the date of inception of the
arrangement. The District property included in the ground lease under this arrangement is
the Treasure Coast University Charter School.
In connection with this financing arrangement, the District entered into an Education Facilities
Lease Purchase Agreement with the FAU-Treasure Coast University Schools, Inc. (TCUS), a
Florida not-for-profit corporation authorized and created by Florida Atlantic University, for the
purpose of facilitating the acquisition, construction, and operation of TCUS, as sublessee.
The term of the sublease commenced on January 31, 2007, and extends through June 30,
2021. In accordance with the sublease, the District constructed the Treasure Coast
University Charter School. During the term of the sublease, TCUS will remit Charter School
Capital Funds to the Trustee directly for deposit to the TCUS Revenue Fund.
The District entered into a financing arrangement on June 28, 2010, which was characterized
as lease-purchase agreement, with the Corporation, whereby the District secured financing in
the amounts of $12,232,000, for various educational facilities.
The financing was
accomplished through the issuance of Certificates of Participation, Series 2010A-QSCB, to be
repaid from the proceeds of rents by the District. The Series 2004-QSCB is a Qualified
School Construction Bond that receives an Issuer Subsidy from the Federal government that
is intended to effectively reduce the interest costs associated with the issue.
As a condition of these financing arrangements, the District has given a ground lease on
District property to the Corporation, with a rental fee of $10 per year. The initial term of the
lease is 17 years commencing on June 29, 2010. The properties covered by the ground
lease are, together with the improvements constructed thereon from the financing proceeds,
leased back to the District. If the District fails to renew the lease and to provide for the rent
payments through to term, the District may be required to surrender the sites included under
the Ground Lease Agreement for the benefit of the securers of the Certificates for a period of
time specified by the arrangement which may be up to 17 years from the date of inception of
the arrangement. The District properties included in the ground lease under the Series
2010A-QSCB include additions and renovations to Lincoln Park Academy.
30
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
The lease payments are payable by the District semiannually, on July 1 and January 1.
Series
Series 2001 A/B/C
Series 2003A
Series 2004 - QZAP
Series 2004A
Series 2005
Series 2007
Series 2010 - QSCB
Total Bonds Payable
Balance
Rates
53,385,000
20,580,000
1,277,000
75,405,000
33,695,000
21,865,000
12,232,000
$ 218,439,000
4.125 - 5.500
2.80 - 5.12
0
3.00 - 5.00
3.00-5.00
3.50 - 5.00
3.700-4.994
$
Maturity
2023
2018
2020
2030
2030
2032
2027
The following is a schedule of future minimum lease payments under lease along with the
present value of minimum lease payments as of June 30, 2010.
Fiscal Year Ending June 30
2011
2012
2013
2014
2015
2016-2020
2021-2025
2026-2030
2031-2033
Total Minimum Lease Payments
6.
Total
17,392,027
17,455,524
17,447,138
17,444,682
17,439,724
88,527,138
87,215,261
82,836,252
4,462,437
$ 350,220,183
$
Principal
7,079,529
7,309,529
7,559,529
7,834,529
8,159,529
47,944,647
58,027,647
70,349,061
4,175,000
$ 218,439,000
$
Interest
10,312,498
10,135,995
9,887,609
9,610,153
9,280,195
40,582,491
29,187,614
12,487,191
287,437
$ 131,771,183
$
BONDS PAYABLE
Bonds payable at June 30, 2010, are as follows:
Bond Type
State School Bonds:
Series 2002B
Series 2003A
Series 2004A
Series 2005B
Series 2009A, Refunding
Sales Tax Revenue Bonds:
Series 2001
Series 2006
Total Bonds Payable
Amount
Outstanding
$
Interest
Rates
(Percent)
Annual
Maturity
To
850,000
605,000
2,945,000
480,000
405,000
4.000 - 5.375
3.00 - 4.25
4.0-5.0
5.0
3.00-5.00
2014
2023
2017
2018
2019
2,825,000
115,775,000
$ 123,885,000
4.4-5.0
3.700-4.994
2031
2027
31
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
The various bonds were issued to finance capital outlay projects of the District. The following
is a description of the bonded debt issues:

State School Bonds
These bonds are issued by the State Board of Education on behalf of the District. The
bonds mature serially, and are secured by a pledge of the District’s portion of the Stateassessed motor vehicle license tax. The State’s full faith and credit is also pledged as
security for these bonds. Principal and interest payments, investment of Debt Service
Fund resources, and compliance with reserve requirements are administered by the State
Board of Education and the State Board of Administration.

Sales Tax Revenue Bonds Series 2001 (Pari-Mutuel Revenues Replacement
Program)
These bonds are authorized by Chapters 67-1996 and 76-480, Laws of Florida, Section
212.20, Florida Statutes, Chapters 230, 235, 236, and 550, and a resolution adopted by
the St. Lucie County District School Board on June 12, 2001. These bonds are secured
by pari-mutuel replacement revenues distributed annually to St. Lucie County from the
State pursuant to Section 212.20 (6)(d)7.a., Florida Statutes, as a replacement for
moneys distributed under Section 550.135, Florida Statutes, prior to July 1, 2000.

Sales Tax Revenue Bonds, Series 2006
These bonds are authorized by Chapters 212, 1001, 1011, and 1013 Florida Statutes;
and a resolution adopted by the Board on May 23, 2006. These bonds are secured by a
pledge of the proceeds received by the District from the levy and collection of the one-half
cent discretionary sales surtax revenues originally approved by referendum of the voters
of St. Lucie County on March 12, 1996, and extended by the voters on October 18, 2005,
through December 31, 2026. The sales tax collections began on July 1, 2006, and will be
in place for twenty years, through December 2026. The sales tax was projected to
generate at least $320,035,349, or 248.59 percent of the principal over the twenty years.
Current projections indicate the total revenues will be approximately $257,294,638.
Remaining principal balance for the Sales Tax Revenue Bond Series 2006 is
$115,775,000. Total sales tax revenue earned through June 30, 2010 is $54,354,893
with $12,304,471 received during the 2009-10 fiscal year. For the 2009-10 fiscal year,
principal and interest paid were $4,490,000 and $5,504,540, respectively, for a total of
$9,994,540.
32
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
Annual requirements to amortize all bonded debt outstanding as of June 30, 2010, are as
follows:
Fiscal Year Ending June 30
State School Boards:
2011
2012
2013
2014
2015
2016-2020
2021-2023
Total State School Boards
Sales Tax Revenue Bonds:
2011
2012
2013
2014
2015
2016-2020
2021-2025
2026-2030
2031
Total District Revenue Bonds
Total
7.
Total
$
975,109
974,796
990,246
990,277
767,262
1,449,912
211,925
6,359,527
10,207,610
10,228,987
10,206,235
10,186,532
10,200,495
50,888,677
50,610,587
20,835,412
220,500
173,585,035
$ 179,944,562
Principal
$
720,000
755,000
805,000
845,000
665,000
1,300,000
195,000
5,285,000
4,775,000
5,000,000
5,185,000
5,410,000
5,675,000
32,150,000
40,490,000
19,705,000
210,000
118,600,000
$ 123,885,000
Interest
$
255,109
219,796
185,246
145,277
102,262
149,912
16,925
1,074,527
5,432,610
5,228,987
5,021,235
4,776,532
4,525,495
18,738,677
10,120,587
1,130,412
10,500
54,985,035
$ 56,059,562
DEFEASED DEBT
On August 15, 2009, the State Board of Education issued State Board of Education Capital
Outlay Bonds, Series 2009-A, a portion of which advance-refunded the Board’s portion of the
State School Bonds, Series 1999-A.
The Series 2009-A Bonds advance-refunded the
$480,000 principal amount of the District’s State School Bonds, Series 1999-A that mature on
or after July 1, 2010. The net proceeds of $490,471 (after payment of $5.444 in underwriting
fees, insurance, and other issuance costs) were placed in an irrevocable trust to provide for a
portion of future debt service payments on the Series 1999-A bonds. As a result, $480,000 of
the 1999-A series bonds are considered to be in-substance defeased and the liability for
these bonds has been removed from the government-wide financial statements. The
issuance of the refunding bonds reduced the Board’s total debt service payments over the
next 9 years by approximately $30,000.
33
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
8.
CHANGES IN LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities:
Balance
Description
07/01/09
Additions
Deductions
$ 211,772,000
$ 12,232,000
Balance
Due in
06/30/10
One Year
GOVERNMENTAL ACTIVITIES
Certificates of Participation Payable
Less: Unamortized Net Discount
(2,432,796)
$
5,565,000
-
(156,770)
$ 218,439,000
$
(2,276,026)
(156,770)
Net Certificates of Participation Payable
209,339,204
12,232,000
5,408,230
216,162,974
6,922,759
Bonds Payable
129,160,000
450,000
5,725,000
123,885,000
5,495,000
Less: Unamortized Net Premium
Notes Payable
Other Postemployment Benefits Payable
Compensated Absences Payable
Total Governmental Activities
2,879,884
44,557
171,395
2,753,046
172,537
132,039,884
494,557
5,896,395
126,638,046
5,667,537
142,422
-
142,422
-
-
5,857,269
1,190,743
-
7,048,012
-
9,383,428
1,796,812
$ 356,762,207
$ 15,714,112
$
2,162,528
9,017,712
2,162,529
13,609,575
$ 358,866,744
$ 14,752,825
For the governmental activities, compensated absences and other postemployment benefits
are generally liquidated with resources of the General Fund.
9.
7,079,529
INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The following is a summary of interfund receivables and payables reported in the fund
financial statements:
Interfund
Funds
Major:
General
Special Revenue
ARRA Economic Stimulus
Capital Projects:
Capital Improvement
Other
Nonmajor Governmental
Fiduciary
Total
Receivables
$
$
3,102,644
Payables
$
4,372
3,361
2,802,604
6,235,603
4,010,717
955,756
9,290,783
4,591
13,356,916
$
303,401
13,356,916
34
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
The following is a summary of interfund transfers reported in the fund financial statements:
Funds
Major:
General
Capital Projects:
Capital Improvement
Other
Nonmajor Governmental
Interfund
Transfers In
Transfers Out
$
3,132,656
22,862,137
$ 25,994,793
$
-
15,999,988
9,994,805
$ 25,994,793
10. RESERVE FOR ENCUMBRANCES
Appropriations in governmental funds are encumbered upon issuance of purchase orders for
goods and services. Even though appropriations lapse at the end of the fiscal year, unfilled
purchase orders of the current year are carried forward and the next year’s appropriations are
likewise encumbered.
The Florida Department of Education requires that fund balances be reserved at fiscal yearend to report an amount likely to be expended from the 2010-11 fiscal year budget as a result
of purchase orders outstanding at June 30, 2010.
Because revenues of grants accounted for in the Special Revenue – ARRA Economic
Stimulus Fund are not recognized until expenditures are incurred, these grant funds generally
do not accumulate fund balances. Accordingly, no reserve for encumbrances is reported for
grant funds. However, purchase orders outstanding for grants accounted for in the Special
Revenue – ARRA Economic Stimulus Fund totaled $143,232 at June 30, 2010.
35
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
11. SCHEDULE OF STATE REVENUE SOURCES
The following is a schedule of the District’s State revenue for the 2009-10 fiscal year:
Source
Florida Education Finance Program
Categorical Educational Programs:
Class Size Reduction
School Recognition
Voluntary Pre-K
Excellent Teachers Lead Program
Class Size Reduction Construction
Gross Receipts Tax (Public Education Capital Outlay)
Discretionary Lottery Funds
Motor Vehicle License Tax (Capital Outlay and Debt Service)
Mobile home License Tax
Food Service Supplement
Miscellaneous
Total
$
Amount
92,807,928
$
40,675,521
1,188,272
703,221
13,102
1,452,358
466,014
105,615
1,434,136
235,004
291,007
422,669
139,794,847
Accounting policies relating to certain State revenue sources are described in Note 1.
12. PROPERTY TAXES
The following is a summary of millages and taxes levied on the 2009 tax roll for the 2009-10
fiscal year:
GENERAL FUND
Nonvoted School Tax:
Required Local Effort
Required Local Effort Prior Period Adjustment
Discretionary Operating
Critical Operating Needs
CAPITAL PROJECTS FUNDS
Nonvoted Tax:
Local Capital Improvements
Total
Millages
Taxes Levied
5.442
0.036
0.748
0.250
$
96,543,190
638,654
13,269,815
4,435,098
1.500
7.976
26,610,584
$ 141,497,341
36
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
13. FLORIDA RETIREMENT SYSTEM
All regular employees of the District are covered by the State-administered Florida Retirement
System (FRS). Provisions relating to FRS are established by Chapters 121 and 122, Florida
Statutes; Chapter 112 Part IV, Florida Statutes; Chapter 238, Florida Statutes; and Florida
Retirement System Rules, Chapter 60S, Florida Administrative Code, wherein eligibility,
contributions, and benefits are defined and described in detail. Essentially all regular
employees of participating employers are eligible and must enroll as members of FRS. FRS
is a single retirement system administered by the Department of Management Services,
Division of Retirement, and consists of two cost-sharing, multiple-employer retirement plans
and other nonintegrated programs. These include a defined benefit pension plan (Plan), a
Deferred Retirement Option Program (DROP), and a defined contribution plan, referred to as
the Public Employee Optional Retirement Program (PEORP).
Employees in the Plan vest at six years of service. All vested members are eligible for normal
retirement benefits at age 62 or at any age after 30 years of service, which may include up to
4 years of credit for military service except for members classified as special risk who are
eligible for normal retirement benefits at age 55 or at any age after 25 years of service. The
Plan also includes an early retirement provision; however, there is a benefit reduction for
each year a member retires before his or her normal retirement date. The Plan provides
retirement, disability, and death benefits, and annual cost-of-living adjustments.
DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible
for normal retirement under the Plan to defer receipt of monthly benefit payments while
continuing employment with an FRS employer. An employee may participate in DROP for a
period not to exceed 60 months after electing to participate, except that certain instructional
personnel may participate for up to 96 months. During the period of DROP participation,
deferred monthly benefits are held in the FRS Trust Fund and accrue interest.
As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to
participate in the PEORP in lieu of the Plan. District employees participating in DROP are not
eligible to participate in PEORP. Employer contributions are defined by law; however, the
ultimate benefit depends in part on the performance of investment funds. PEORP is funded
by employer contributions that are based on salary and membership class (Regular, Elected
County Officers, etc.). Contributions are directed to individual member accounts, and the
individual members allocate contributions and account balances among various approved
investment choices. Employees in PEORP vest after one year of service. There were 416
District participants during the 2009-10 fiscal year. Required contributions made to PEORP
totaled $1,513,717.
37
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
FRS Retirement Contribution Rates
The Florida Legislature establishes, and may amend, contribution rates for each membership
class of FRS. During the 2009-10 fiscal year, contribution rates were as follows:
Class or Plan
Florida Retirement System, Regular
Florida Retirement System, Elected County Officers
Florida Retirement System, Senior Management Service
Florida Retirement System, Special Risk
Teacher's Retirement System, Plan E
Deferred Retirement Option Program - Applicable to
Members from All of the Above Classes or Plan
Florida Retirement System, Reemployed Retiree
Notes: (A)
(B)
Percent of Gross Salary
Employee
Employer (A)
0.00
9.85
0.00
16.53
0.00
13.12
0.00
20.92
6.25
11.35
0.00
(B)
10.91
(B)
Employer rates include 1.11 percent for the postemployment health insurance subsidy.
Also, employer rates, other than for DROP participants, include 0.05 percent for
administrative costs of PEORP.
Contribution rates are dependent upon retirement class or plan in which reemployed.
The District’s liability for participation is limited to the payment of the required contribution at
the rates and frequencies established by law on future payrolls of the District. The District’s
contributions, including employee contributions, for the fiscal years ended June 30, 2008,
June 30, 2009, and June 30, 2010, totaled $19,970,556, $16,487,966, and $18,327,799,
respectively, which were equal to the required contributions for each fiscal year.
The financial statements and other supplementary information of FRS are included in the
comprehensive annual financial report of the State of Florida, which may be obtained from the
Florida Department of Financial Services. Also, an annual report on FRS, which includes its
financial statements, required supplementary information, actuarial report, and other relevant
information, is available from the Florida Department of Management Services, Division of
Retirement.
14. OTHER POSTEMPLOYMENT BENEFITS
Plan Description. The Other Postemployment Benefits Plan is a single-employer defined
benefit plan administered by the District. Pursuant to the provisions of Section 112.0801,
Florida Statutes, former employees who retire from the District are eligible to participate in the
District’s self-insured health and hospitalization plan for medical, prescription drug, dental,
and vision coverages. The District subsidizes the premium rates paid by retirees by allowing
them to participate in the plan at reduced or blended group (implicitly subsidized) premium
rates for both active and retired employees. These rates provide an implicit subsidy for
retirees because, on an actuarial basis, their current and future claims are expected to result
in higher costs to the plan on average than those of active employees. The District does not
offer any explicit subsidies for retiree coverage. Retirees are assumed to enroll in the Federal
Medicare program for their primary coverage as soon as they are eligible. Eligible retirees
have the option to purchase a Group Medicare Advantage or Supplement Plan at a reduced
rate. The Other Postemployment Benefits Plan does not issue a stand-alone report, and is
not included in the report of a Public Employee Retirement System or another entity.
38
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
Funding Policy. Contribution requirements of the District and plan members are established
and may be amended through recommendations of the Insurance Committee and action from
the Board. The District has not advance-funded or established a funding methodology for the
annual Other Post Employment Benefit (OPEB) costs or the net OPEB obligation, and the
Plan is financed on a pay-as-you-go basis. For the 2009-10 fiscal year, 439 retirees received
postemployment health care benefits. The District provided required contributions of
$943,221 toward the annual OPEB cost, comprised of benefit payments made on behalf of
retirees for claims expenses (net of reinsurance), administrative expenses, and reinsurance
premiums, and net of retiree contributions totaling $1,250,367.
Annual OPEB Cost and Net OPEB Obligation. The District’s annual OPEB cost (expense)
is calculated based on the annual required contribution (ARC), an amount actuarially
determined in accordance with parameters of Governmental Accounting Standards Board
Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment
Benefits Other Than Pensions. The ARC represents a level of funding that if paid on an
ongoing basis, is projected to cover normal cost each year and amortize any unfunded
actuarial liabilities over a period not to exceed 30 years. The following table shows the
District's annual OPEB cost for the year, the amount actually contributed to the plan, and
changes in the District's net OPEB obligation for Postemployment Health Care Benefits:
Description
Normal Cost (service cost for one year)
Amortization of Unfunded Actuarial
Accrued Liability
Interest on Normal Cost and Amortization
Annual Required Contribution
Interest on Net OPEB Obligation
Adjustment to Annual Required Contribution
Annual OPEB Cost (Expense)
Contribution Toward the OPEB Cost
Increase in Net OPEB Obligation
Net OPEB Obligation, Beginning of Year
NET OPEB Obligation, End of Year
$
$
Amount
1,293,508
782,523
25,617
2,101,648
234,291
(201,975)
2,133,964
(943,221)
1,190,743
5,857,269
7,048,012
The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation as of June 30, 2010, were as follows:
Fiscal
Year
Beginning Balance, 7/1/07
2007-08
2008-09
2009-10
Annual
OPEB Cost
$
5,901,780
2,071,643
2,133,964
Percentage of
Annual
OPEB Cost
Contributed
21.05%
42.19%
44.20%
Net OPEB
Obligation
$
4,650,691
5,857,269
7,048,012
39
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
Funded Status and Funding Progress. As of January 1, 2009, the most recent valuation
date, the actuarial accrued liability for benefits was $21,396,657 and the actuarial value of
assets was $0, resulting in an unfunded actuarial accrued liability of $21,396,657 and a
funded ratio of 0 percent. The covered payroll (annual payroll of active participating
employees) was $185,938,733 for the 2009-10 fiscal year, and the ratio of the unfunded
actuarial accrued liability to the covered payroll was 11.5 percent.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Examples
include assumptions about future employment and termination, mortality, and the healthcare
cost trends. Amounts determined regarding the funded status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are
compared with past expectations and new estimates are made about the future. The required
schedule of funding progress immediately following the notes to financial statements presents
multiyear trend information about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accured liability for benefits.
Actuarial Methods and Assumptions. Projections of benefits for financial reporting
purposes are based on the substantive plan provisions, as understood by the employer and
participating members, and include the types of benefits provided at the time of each
valuation and the historical pattern of sharing of benefit costs between the employer and
participating members. The actuarial methods and assumptions used include techniques that
are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the
actuarial value of assets, consistent with the long-term perspective of the calculations.
The District’s initial OPEB actuarial valuation as of January 1, 2009, used the entry age
normal cost actuarial method to estimate the unfunded actuarial liability as of June 30, 2010,
and the frozen entry age normal cost actuarial method to estimate the District’s 2009-10 fiscal
year annual required contribution. Because the OPEB liability is currently unfunded, the
actuarial assumptions included a 4 percent rate of return on invested assets, which is the
District’s long-term expectation of investment returns under its investment policy. The
actuarial assumptions also included a payroll growth rate of 4 percent per year, and an annual
healthcare cost trend rate of 9 percent initially for the 2010 calendar year, reduced by 0.5
percent per year, to an ultimate rate of 5 percent after nine years. The unfunded actuarial
accrued liability is being amortized as a level percentage of projected payrolls on a closed
basis. The remaining amortization period at June 30, 2010, was 27 years.
40
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
15. CONSTRUCTION CONTRACT COMMITMENTS
The following is a summary of major construction contract commitments remaining at fiscal
year-end:
Project
Port St. Lucie High Chiller & Piping Improvements
Contractor
St. Lucie West Centennial High Chiller Improvements
Contractor
Bayshore Elementary HVAC Renovations Contractor
Village Green Elementary HVAC Renovations
Contractor
Lincoln Park Academy Renovations Architect
Architect
Contractor
Traditions Lab School
Contractor
Total
Contract
Amount
$
$
3,793,728
Completed
to Date
$
3,731,414
Balance
Committed
$
62,314
2,237,431
3,310,976
2,154,096
1,392,667
83,335
1,918,309
3,805,535
798,556
3,006,979
817,250
4,077,000
448,789
964,795
368,461
3,112,205
11,902,819
29,944,739
$
11,813,877
21,304,194
$
88,942
8,640,545
16. JOINT VENTURES
By a resolution adopted on October 24, 1989, the Board entered into a joint venture with the
St. Lucie County Board of County Commissioners (County) to build a library adjacent to the
middle school located on Morningside Boulevard in St. Lucie County, leased by the county to
the School Board. The Board of County Commissioners will operate and maintain the facility.
The lease is for a 40-year period and provides that the school has priority use, over the
general public, of the library for educational purposes and for extracurricular activities as part
of the normal school programs of the Board.
By interlocal agreement adopted on November 23, 1999, the Board entered into a joint
venture with the County to build the South County Regional Stadium. The County will operate
and maintain the facility. The Board funded a portion of the construction costs by reimbursing
the County for its portion of the payment on the County’s Improvement Revenue Notes,
Series 2000A. The interlocal agreement provides that the Board has priority use, over the
general public, of the stadium for high school football and soccer events.
By an interlocal agreement adopted on January 12, 1999, the Board entered into a joint
venture with the County to purchase, construct, and maintain an 800 Megahertz radio system.
The Board agreed to fund a portion of the radio system’s cost by reimbursing the County for
15.95 percent of payments for the County’s Public Improvement Revenue Bonds, Series
2000A, that were issued to finance the project.
41
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
17. RISK MANAGEMENT PROGRAMS
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 is a member of the South Central Educational Risk Management Program (SCERMP),
a consortium under which eight district school boards have established a combined limited
self-insurance program for property protection, general liability, automobile liability, workers'
compensation, money and securities, employee fidelity and faithful performance, boiler and
machinery, and other coverage deemed necessary by the members of SCERMP. Section
1001.42(12)(k), Florida Statutes, provides the authority for the District to enter into such a risk
management program.
SCERMP is self-sustaining through member assessments
(premiums), and purchases coverage through commercial companies for claims in excess of
specified amounts. The Board of Directors for SCERMP is comprised of superintendents of
all participating districts. Employers’ Mutual, Inc, serves as the third-party administrator and
fiscal agent for SCERMP.
The property casualty group under SCERMP is a public entity risk pool which was organized
to develop, implement, and administer a multidistrict cooperated property and casualty risk
management program for the member school boards in which risk of loss is transferred to the
group. The School Board makes an annual contribution to the group for its property casualty
group coverage. The interlocal agreement and bylaws of the property casualty group provide
that the group will be self-sustaining through member contributions. However, member
school boards are subject to supplemental contributions in the event of a deficiency except to
the extent that the deficiency results from a specific claim against a member school board in
excess of the coverage available, then such deficiency is solely the responsibility of that
member school board. In addition, it is the property casualty group’s policy to carry excess
coverage through commercial insurance carriers for workers’ compensation and property loss
claims in excess of $1,000,000 and $100,000 (except wind/hail/flood), respectively. The
named wind or named flood deductible is 5 percent of replacement cost value with a minimum
of $150,000 per occurrence. Other wind or flood deductible is $100,000 plus $100,000 time
element for any once occurrence with flood zone V excluded. Special hazard flood areas are
$500,000 per building and $500,000 contents.
The District’s group health and dental plans were self-insured through December 31, 2008.
WEB-TPA was the third-party administrator for the plans. The District estimated that at June
30, 2010, insurance claims incurred but not paid were $54,236. As of January 1, 2009, the
District entered into a contract with Blue Cross/Blue Shield of Florida to provide health and
dental insurance to District employees. As a result, the District’s health and dental claims are
fully insured rather than self-insured, the ultimate liability for claims incurred after that date
and the associated risks are transferred to the insurance provider.
Settled claims resulting from the risks described above have not exceeded commercial
insurance coverage in any of the past three fiscal years.
42
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Financial Statements
For the Year Ended June 30, 2010
The following schedule represents the changes in claims liability for the past two fiscal years
for the District's self-insurance program:
2008-2009
2009-10
Fiscal Year
Liability
$ 4,187,040
150,000
Claims and
Canges in
Estimates
$ 23,296,582
-
Payments
$ (27,333,622)
(95,764)
$
Fiscal
Year-End
150,000
54,236
18. SUBSEQUENT EVENTS
On September 14, 2010, the Board approved the issuance of Tax Anticipation Notes, Series
2010, in the amount of $20,000,000. This issuance was to provide cash for short-term
operational needs, and was repaid by January 31, 2011.
On September 14, 2010, the Board approved the issuance of Certificates of Participation,
Series 2010C-QSCB, in the amount of $12,913,080. The Certificates are a Qualified School
Construction Bond subject to an Issuer Subsidy that is intended to reduce the net interest cost
of the certificates. The Certificates were used to finance improvements and renovations to
Lincoln Park Academy.
43
REQUIRED SUPPLEMENTARY INFORMATION
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
General Fund
For the Year Ended June 30, 2010
General Fund
Actual
Amounts
Budgeted Amounts
Original
Final
Revenues
Federal direct
Federal through state
State sources
Local sources
Total revenues
Expenditures
Current:
Instruction
Pupil personnel services
Instructional media services
Instruction and curriculum development services
Instructional staff training services
Instruction related technology
Board
General administration
School administration
Facilities acquisition and construction
Fiscal services
Food services
Central services
Pupil transportation services
Operation of plant
Maintenance of plant
Administrative technology services
Community services
Capital outlay:
Facilities acquisition and construction
Other capital outlay
Total expenditures
$
251,077
992,000
146,441,164
116,004,233
263,688,474
$
309,334
1,667,084
135,938,003
131,402,965
269,317,386
$
309,334
1,667,084
135,938,003
131,402,965
269,317,386
Variance with
Final Budget Positive
(Negative)
$
-
177,928,339
9,882,263
1,359,624
556,957
629,698
352,041
916,353
1,736,551
17,447,502
505,304
1,488,476
4,063,042
15,567,601
28,535,782
7,466,326
568,108
421,378
166,751,547
9,885,539
1,660,812
2,605,304
741,453
314,875
939,885
2,433,203
18,259,189
588,644
1,491,901
4,026,858
17,790,438
27,852,409
6,904,836
3,154,182
353,930
166,751,547
9,885,539
1,660,812
2,605,304
741,453
314,875
939,885
2,433,203
18,259,189
588,644
1,491,901
0
4,026,858
17,790,438
27,852,409
6,904,836
3,154,182
353,930
-
269,425,345
49,179
149,280
265,953,464
49,179
149,280
265,953,464
-
(5,736,871)
3,363,922
3,363,922
-
Other financing sources (uses)
Proceeds from the sale of capital assets
Loss recoveries
Transfers in
Total other financing sources (uses)
4,327,749
4,327,749
17,813
977,733
3,132,656
4,128,202
17,813
977,733
3,132,656
4,128,202
-
Net change in fund balance
(1,409,122)
7,492,124
7,492,124
-
15,895,823
15,895,823
15,895,823
-
$ 14,486,701
$ 23,387,947
$ 23,387,947
Deficiency of revenues under expenditures
Fund balance - beginning
Fund balance - ending
The notes to the basic financial statements
are an integral part of this statement.
$
-
44
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual
Major Special Revenue Fund
For the Year Ended June 30, 2010
Major Special Revenue
ARRA Economic Stimulus Funds
Revenues
Federal direct
Federal through state
State sources
Local sources
Total revenues
$
Expenditures
Current:
Instruction
Pupil personnel services
Instructional media services
Instruction and curriculum development services
Instructional staff training services
Instruction related technology
Board
General administration
School administration
Facilities acquisition and construction
Fiscal services
Food services
Central services
Pupil transportation services
Operation of plant
Maintenance of plant
Administrative technology services
Community services
Capital outlay:
Facilities acquisition and construction
Other capital outlay
Total expenditures
Variance with
Final Budget Positive
(Negative)
Budgeted Amounts
Original
Final
Actual
Amounts
28,726,656
28,726,656
19,983,489
19,983,489
19,983,489
19,983,489
11,984,957
6,237,980
2,846,238
3,291,733
2,001,388
469,454
365,948
76,784
62,034
356,184
222,558
41,086
770,312
-
7,161,978
6,081,281
2,846,238
1,288,178
946,890
173,418
347,397
7,100
371,612
222,061
40,995
207,267
-
7,161,978
6,081,281
2,846,238
1,288,178
946,890
173,418
347,397
7,100
371,612
222,061
40,995
207,267
-
-
28,726,656
289,074
19,983,489
289,074
19,983,489
-
$
$
-
Deficiency of revenues under expenditures
-
-
-
-
Other financing sources (uses)
Proceeds from the sale of capital assets
Loss recoveries
Transfers in
Total other financing sources (uses)
-
-
-
-
Net change in fund balance
-
-
-
-
-
-
-
-
Fund balance - beginning
Fund balance - ending
The notes to the basic financial statements
are an integral part of this statement.
$
-
$
-
$
-
$
-
45
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Required Supplementary Information - Schedule of
Funding Progress - Postemployment Benefits Plan
Year Ended June 30, 2010
Actuarial
Valuation
Date
July 1, 2007
January 1, 2009
Actuarial Value
of Assets
$
-
Actuarial
Accrued
Liability (AAL) Projected
Unit Credit
$ 37,471,029
21,396,657
Unfunded
AAL (UAAL)
$
37,471,029
21,396,973
Funded Ratio
0%
0%
Covered Payroll
$
171,627,548
185,938,733
UAAL as a
Percentage of
Covered Payroll
21.8%
11.5%
46
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Notes to Required Supplementary Information
For the Year Ended June 30, 2010
1.
SCHEDULE OF FUNDING PROGRESS - POSTEMPLOYMENT HEALTHCARE BENEFITS
The January 1, 2009, unfunded actuarial accrued liability of $21,396,657 was significantly
lower than the July 1, 2007, liability of $37,471,029 as a result of benefit changes and other
changes in liabilities and costs as discussed below:

The number of enrolled retirees decreased from 630 in the July 1, 2007, valuation
to 407 in the January 1, 2009 valuation. By contract, the number of active
employees increased to 4.786 in the current valuation from 4.244 in the prior
valuation.

In the previous valuation, it was assumed that 100 percent of retirees participated
in the health plans. Actual retiree participation, however, has historically been
much lower, so the current valuation assumed participation of only 25 percent.

The assumed annual healthcare cost trend for medical and prescription costs was
revised. In the previous valuation, the initial healthcare cost trend was assumed to
increase at 11 percent in the first year, decreasing by 0.5 percent each year to an
ultimate rate of 5 percent after twelve years. In the current valuation, the trend is
assumed to be an increase of 19 percent in the first year, decreasing by a 10
percent the second year, and then 0.5 percent each year thereafter to an ultimate
rate of 5 percent after nine years.

The July 1, 2007, valuation used the unit credit actuarial cost method and the level
dollar amortization, whereas the January 1, 2009, valuation used the entry age
actuarial cost method and the level percent of projected payroll amortization.
47
COMPLIANCE AND SINGLE AUDIT
Independent Auditors’ Report on Internal Control over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards
The Honorable Members of the School Board
District School Board of St. Lucie County, Florida
Ft. Pierce, Florida
We have audited the financial statements of the governmental activities, the discretely presented
component units, each major fund, and the aggregate remaining fund information of the District
School Board of St. Lucie County, Florida (the “District”) as of and for the year ended June 30, 2010,
which collectively comprise the District’s basic financial statements and have issued our report
thereon dated March 30, 2011. We did not audit the financial statements of the school internal funds
or the discretely presented component unit; those financial statements were audited by other auditors.
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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the District’s internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
the District’s internal control over financial reporting. Accordingly, we do not express an opinion on
the effectiveness of the District's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or
combination of significant deficiencies, in internal control, such that there is a reasonable possibility
that a material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to indentify all deficiencies in internal control
over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We
did not identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above.
48
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.
We noted certain matters that we have reported to management of the District in a separate letter
dated March 30, 2011.
This report is intended solely for the information and use of the District School Board, applicable
management, applicable federal and state agencies, and pass-through entities and is not intended to
be and should not be used by anyone other than these specified parties.
Orlando, Florida
March 30 2011
49
Independent Auditors’ Report on Compliance with
Requirements That Could Have a Direct and Material
Effect on Each Major Program and Internal Control
over Compliance in Accordance with OMB Circular A-133
The Honorable Members of the School Board
District School Board of St. Lucie County, Florida
Ft. Pierce, Florida
Compliance
We have audited the compliance of the District School Board of St. Lucie County (the “District”) with
the types of compliance requirements described in the U.S. Office of Management and Budget (OMB)
Circular A-133 Compliance Supplement that could have a direct and material effect on each of its
major federal programs for the year ended June 30, 2010. The District’s major federal programs are
identified in the summary of auditors’ results section of the accompanying schedule of findings and
questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants
applicable to each of its major federal programs is the responsibility of the District’s management.
Our responsibility is to express an opinion on the District’s compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in
the United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB
Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the types of compliance requirements referred to above that could have
a direct and material effect on a major federal program occurred. An audit includes examining, on a
test basis, evidence about the District’s compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the
District’s compliance with those requirements.
In our opinion, the District complied, in all material respects, with the requirements referred to above
that are applicable to each of its major federal programs for the year ended June 30, 2010.
Internal Control over Compliance
The management of the District is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable to
federal programs. In planning and performing our audit, we considered the District’s internal control
over compliance with requirements that could have a direct and material effect on a major federal
program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance and to test and report on internal control and compliance in accordance with OMB A-133,
but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of the District School
Board of St. Lucie County’s internal control over compliance.
50
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such
that there is reasonable possibility that material noncompliance with a type of compliance requirement
of a federal program will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above.
This report is intended solely for the information and use of the District School Board, applicable
management, applicable federal and state agencies, and pass-through entities and is not intended to
be and should not be used by anyone other than these specified parties.
Orlando, Florida
March 30, 2011
51
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Schedule of Expenditures and Federal Awards
For the Year Ended June 30, 2010
Federal Grantor/Pass-Through Grantor/Program Title
United States Department of Agriculture:
Indirect:
Florida Department of Agriculture and Consumer Services
Food Donation
Florida Department of Education:
Nutrition Cluster:
School Breakfast Program
National School Lunch Program
Summer Food Service Programs for Children
Catalog of
Federal
Domestic
Assistance #
Pass Through
Grantor #
10.550 (2)
None
10.553
10.555
10.559
Amount of
Expenditures
(1)
$
321
300
738,144
$
2,828,525
10,069,207
56,005
Total Child Nutrition Cluster
12,953,737
Child and Adult Care Food Program
10.558
302
United States Department of Education:
Indirect:
Special Education Cluster:
Florida Department of Education:
Special Education - Grants to States
Special Education - Preschool Grants
ARRA - Special Education Grants to States, Recovery Act
ARRA - Special Education Preshcool Grants, Recovery Act
84.027
84.173
84.391A
84.392A
262,263
266,267
Total Special Education Cluster
Title I, Part A Cluster:
Florida Department of Education:
Title I Grants to Local Educational Agencies
ARRA - Title I Grants to Local Educational Agencies
84.010
84.389
-
194,388
Total United States Department of Agriculture
212
212
13,886,269
-
8,580,290
314,423
3,700,438
30,769
56,971
12,625,920
56,971
9,254,535
2,470,039
Total Title I, Part A Cluster
11,724,574
Educational Technology State Grants Cluster
Florida Department of Education:
Education Technology State Grants
ARRA - Education Technology State Grants
84.318
84.386
121
76,531
153,108
Total Educational Technology State Grants Cluster
229,639
State Fiscal Stabilization Fund Cluster
Florida Department of Education:
ARRA - State Fiscal Stabilization Fund - Education State Grants
ARRA - State Fiscal Stabilization Fund - Government Services
84.394
84.397
12,471,904
1,151,254
Total State Fiscal Stabilization Fund Cluster
13,623,158
Education of Homeless Children and Youth Cluster
Florida Department of Education:
Education for Homeless Children and Youth
ARRA - Education for Homeless Children and Youth
84.196
84.387
21,351
5,978
Total Education of Homeless Children and Youth Cluster
27,329
Florida Department of Education:
Migrant Education - State Grant Program
Career and Technical Education Basic Grants to States
Safe and Drug-Free Schools and Communities - State Grants
Charter Schools
Twenty-First Century Community Learning Centers
Reading First State Grants
English Language Acquisition Grants
Improving Teacher Quality State Grants
School Improvement Grants
84.011
84.048
84.186
84.282
84.287
84.357
84.365A
84.367A
84.377A
217
151
103
298
243,244
72,650
459,696
125,001
537,509
898,236
15,198
516,726
1,441,562
61,929
Total United States Department of Education
537,509
42,359,127
Corporation for National and Community Service:
Direct:
Retired and Senior Volunteer Program
94.002
N/A
594,480
29,914
Total Corporation for National and Community Service
29,914
United States Department of Defense:
Direct:
Army Junior Reserve Officers Training Corps
None
N/A
-
309,334
Total United States Department of Defense
309,334
$
Total Expenditures of Federal Awards
Note:
Amount
Provided
to
Subrecipients
56,584,644
$
594,480
(1) Basis of Presentation. The Schedule of Expenditures of Federal Awards represents amounts expended from Federal Programs during the 2009-10
fiscal year as determined based on the modified accrual basis of accounting. The amounts reported on the schedule have been reconciled to and are
in material agreement with amounts recorded in the District's accounting records from which the general purpose financial statements have been
reported.
(2) Noncash Assistance. Food Donation - Represents food donated during the 2009-10 fiscal year. Donated food is valued at fair value as determined at
the time of donation by the Florida Department of Agriculture and Consumer Services, Bureau of Food Distribution.
52
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Schedule of Findings and Questioned Costs
Year Ended June 30, 2010
Part I - Summary of Audit Results
1. The auditors’ report on the financial statements expresses unqualified opinions.
2. No significant deficiencies relating to the audit of the financial statements are reported in the
Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards.
3. No instances of noncompliance material to the financial statements of the District were disclosed
during the audit.
4. No significant deficiencies relating to the audit of the major federal awards programs are reported
in the Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct
and Material Effect on Each Major Program and Internal Control over Compliance in Accordance
with OMB Circular A-133.
5. The auditors’ report on compliance for the major federal award programs for the District expresses
an unqualified opinion.
6. The programs tested as major programs were:
Name of Program
Title I, Part A Cluster
Education Technology State
State Fiscal Stabilization Fund
Special Education Cluster
CFDA #
84.010/84.389
84.318/84.386
84.394/84.397
84.027/84.173/84.391, 84.392
The threshold for distinguishing Type A programs was $1,697,539.
The District was not determined to be a low risk auditee.
Part II – Financial Statement Findings Section
This section identifies the significant deficiencies, material weaknesses, and instances of
noncompliance related to the financial statements that are required to be reported in accordance with
Government Auditing Standards.
None reported.
Part III – Federal Award Finding and Questioned Costs Section
None reported.
53
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Summary Schedule of Prior Audit Findings
Year Ended June 30, 2010
Audit Report No.
and Financial
Statement Finding No.
Program/Area
Brief Description
Status
Comments
June 30, 2009
09-01
Financial
Reporting
The District should enhance procedures to
consider the effects of changes in accounting
principles on the account balances and
transactions reported on the financial statements.
The District should take appropriate action to
ensure that adequate controls are maintained
over school internal fund collections.
Complete
The District provides written guidance to schools in the form of
an internal accounts procedures manual and the Financial and
Program Cost Accounting and Reporting manual published by
the FDOE.
June 30, 2009
09-02
Purchasing Card
Program
The District should enhance controls over the
purchasing card program to ensure that
purchasing card agreements, signed by
cardholders and the administrator,
are
maintained
to
establish
the
respective
responsibilities; establish dollar limits for
purchasing cards according to an employee's job
duties; and periodically review the purpose and
usage of purchasing cards
Complete
The District has obtained purchasing card agreements for all
users and will continue to have each purchasing card user sign
an agreement for their use and all purchasing cards are
approved by administrator. The District also implemented a
formal set of Purchasing Card procedures manual to codify
their procedures for all users.
June 30, 2009
09-03
Fingerprinting
and Background
Screening
The District should improve its efforts to ensure
that contractual personnel who have direct
access to students receive the required
background screenings.
Complete
The District has strengthen their procedures to ensure that
individuals submit to fingerprinting and background screening
as required. In addition, they have strengthened their
recordkeeping procedures to ensure that documents are on file
to show proper and timely fingerprinting.
June 30, 2009
09-04
Information
Technology Program Change
Controls
The District should continue to implement the
data governance issue processing system to
provide written authorization and approval of
program changes. The District should also
ensure that users are involved in the testing of
program changes and approve program changes
in writing before the changes are moved to
production.
Complete
In October, 2010 the District purchased a more flexible ITIL
based ticket system (Numera Footprints) along with the
optional change control module. Project time-lines are
currently being developed for deployment of this product along
with the change control module we purchased for it. The
District is finalizing the Numera deployment time-line which will
define the new automated change control system in place.
June 30, 2009
09-05
Information
Technology Access Privileges
The District should periodically review the
ongoing appropriateness of access privileges
and timely remove or adjust any inappropriate or
unnecessary access detected to ensure that
access privileges are compatible with employee
job responsibilities.
Complete
The District began quarterly review process along with the
formal access request form in June 2010
June 30, 2009
09-06
Information
Technology Removal of
Access Privileges
The District should promptly remove the access
privileges of former employees to minimize the
risk that access privileges could be used to
compromise District data or IT resources.
Complete
The District implemented a SIF interface that automatically
removes security for staff when they have been terminated in
the Human Resources system.
June 30, 2009
09-07
Information
Technology New Business
System Approval of
Access Privileges
District management should promptly review and
approve in writing the profiles and associated
access
Complete
The District developed a spreadsheet document that outlines
each security profile.
June 30, 2009
09-08
Information
Technology User
Authentication
The District should improve security controls
related to user authentication to ensure
continued
confidentiality,
integrity,
and
availability of District data and IT resources.
Complete
The District contracted with outside agencies to provide a
formal IT Risk Assessment that will be done by June 30, 2011.
Title I
The District should continue its effort to ensure
that all teachers hired to teach core academic
subjects in the Title I funded schools are highly
qualified.
Complete
The District's grant application noted that the District had some
teachers that did to meet the highly Qualified requirement, so
the grantor agency is aware of this issue before approving its
grant. The District has a plan in place to hire Highly Qualified
teachers or otherwise ensure that teachers hired become
highly qualified within 90 days of employment. The District has
improved procedures and their system can now identify
teachers that have not met the highly qualified requirement at
all Title I schools. The system tracks and monitors all teachers
that do not meet highly qualified requirements and will be
flagged as "deficiency in certification" and if requirement is not
met within 90 days the teachers will either be terminated or
transferred to another school.
June 30, 2009
Federal Award Finding
09-01
54
OTHER INFORMATION
Independent Auditors' Management Letter
The Honorable Members of the School Board
District School Board of St. Lucie County, Florida
Ft. Pierce, Florida
We have audited the financial statements of the governmental activities, the discretely presented
component units, each major fund, and the aggregate remaining fund information of the District
School Board of St. Lucie County, Florida (the “District”) as of and for the year ended June 30, 2010,
which collectively comprise the District’s basic financial statements and have issued our report
thereon dated March 30, 2011. 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 did not audit the financial statements of the school internal funds or the discretely presented
component units; those financial statements were audited by other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits
of States, Local Governments, and Non-Profit Organizations. We have issued our Independent
Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government Auditing
Standards, Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct
and Material Effect on Each Major Federal Program and Internal Control over Compliance in
Accordance with OMB Circular A-133, and Schedule of Findings and Questioned Costs. Disclosures
in those reports and schedule, which are dated March 30, 2011, should be considered in conjunction
with this management letter.
Additionally, our audit was conducted in accordance with Chapter 10.800, Rules of the Auditor
General, which governs the conduct of district school board audits performed in the State of Florida.
This letter includes the following information, which is not included in the aforementioned auditors’
reports or schedule.
Section 10.804(1)(f)1., Rules of the Auditor General, requires that we determine whether or not
corrective actions have been taken to address findings and recommendations made in the preceding
annual financial audit report. Corrective actions have been taken to address significant findings and
recommendations made in the prior year annual financial audit report.
Section 10.804(1)(f)2., Rules of the Auditor General, requires a statement be included as to whether
or not the district school board has met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and identification of the specific conditions met. In connection with our audit of the
financial statements of the District, the results of our tests did not indicate that the District met any of
the conditions of a financial emergency contained in Section 218.503(1), Florida Statutes. However,
our audit does not provide a legal determination on the District’s compliance with this requirement.
55
Section 10.804(1)(f)3., Rules of the Auditor General, requires our audit to include a review of the
provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In
connection with our audit of the financial statements of the District, the results of our tests did not
indicate that the District was in noncompliance with Section 218.415 regarding the investment of
public funds. However, our audit was not directed toward obtaining knowledge regarding the District’s
compliance with this requirement.
Section 10.804(1)(f)4., Rules of the Auditor General, requires that we address in the management
letter any recommendation to improve financial management. In connection with our audit, we did not
have any such recommendations.
Section 10.804(1)(f)5., Rules of the Auditor General, requires that we address violations of provisions
of contracts or grant agreements, or abuse, that have occurred or are likely to have occurred, that
have an effect on the financial statements that is less than material but more than inconsequential. In
connection with our audit, we did not have any such findings.
Section 10.804(1)(f)6., Rules of the Auditor General, provides that the auditor may, based on
professional judgment, report the following matters that have an inconsequential effect on the financial
statements, considering both quantitative and qualitative factors: (1) violations of provisions of
contracts or grant agreements, fraud, illegal acts, or abuse, and (2) deficiencies in internal control that
are not significant deficiencies. In connection with our audit, we noted certain items involving internal
control over financial reporting that are include in Appendix A. We did not audit the District’s
responses to these matters, which are also provided in Appendix A, and, accordingly, we express no
opinion on them.
Pursuant to Section 10.804(1)(f)7.a. and 10.805(6), Rules of the Auditor General, we applied financial
condition assessment procedures. It is management’s responsibility to monitor the entity’s financial
condition, and our financial condition assessment was based in part on representations made by
management and the review of financial information provided by them.
Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its
distribution is not limited. Auditing standard generally accepted in the United States of America require
us to indicate that this letter is intended solely for the information and use of the District School Board,
applicable management, applicable federal and state agencies, and the Florida Auditor General, and
is not intended to be and should not be used by anyone other than these specified parties.
Orlando, Florida
March 30 2011
56
DISTRICT SCHOOL BOARD OF ST. LUCIE COUNTY, FLORIDA
Appendix A - Management Letter Comments
Year Ended June 30, 2010
Capital Assets
Observation 2010-01: Three schools completed in 2009 were not reclassified from Construction in
Progress (CIP) and depreciated until 2010. This delay in reclassification was due to student use not
occurring in 2009 ad therefore the Facilities Department didn't consider them complete until 2010. In
2010 the schools were transferred from CIP to capital assets but were not depreciated facilities are
normally in service in the first year. Since the schools were available for service and had students
attending the entire first year, depreciation should have been recognized. An entry was made to
recognize an additional $3.05 million in depreciation for 2010. The adjustment appears to be a result
of a miscommunication between the facilities department and finance as to when construction was
complete.
Recommendation: We recommend the District improve its communication process between the
facilities and accounting departments, in order to ensure completed projects are transferred to capital
assets at the appropriate time and depreciated accordingly. At a minimum, periodic reviews of items
included in the construction in progress account should be performed to ensure all completed or
abandoned projects are transferred out.
Management Response: The Finance department will begin reviewing the Construction in Process
account at least quarterly to identify any projects where the facility has been placed in service.
Finance will then work with Facilities staff to close out the project and capitalize the asset within the
next closing period.
57