STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012

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1 STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 (With Auditors Report Thereon)

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3 INTRODUCTORY SECTION

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5 INTRODUCTORY SECTION Table of Contents Official Roster STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS Statement Page i iv FINANCIAL SECTION Independent Auditors Report 1 Basic Financial Statements Government-wide Financial Statements: Statement of Net Assets A-1 3 Statement of Activities A-2 5 Fund Financial Statements: Balance Sheet Governmental Funds B-1 6 Reconciliation of the Balance Sheet to the Statement of Net Assets 8 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds B-2 9 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 11 Statement of Revenues, Expenditures, and Changes in Fund Balance Budget (Non-GAAP Budgetary Basis) and Actual: General Fund C-1 12 Teacherage Fund C-2 13 Transportation Fund C-3 14 Instructional Materials Fund C-4 15 Title I Special Revenue Fund C-5 16 Title I 1003g Grant Federal Stimulus Special Revenue Fund C-6 17 Statement of Fiduciary Net Assets D-1 18 Notes to the Financial Statements 19 Statement Page SUPPLEMENTARY INFORMATION Combining and Individual Fund Statements and Schedules: Combining Balance Sheet Non-major Governmental Funds A-1 43 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Governmental Funds A-2 44 Non-major Special Revenue Fund Descriptions 45 Combining Balance Sheet Non-major Special Revenue Funds B-1 49 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Special Revenue Funds B-2 61 Statement of Revenues, Expenditures, and Changes in Fund Balance Budget (Non-GAAP Budgetary Basis) and Actual: Food Service Special Revenue Fund B-3 73 Athletics Special Revenue Fund B-4 74 Non-Instructional Materials Special Revenue Fund B-5 75 Entitlement IDEA-B Special Revenue Fund B-6 76 Discretionary IDEA-B Special Revenue Fund B-7 77 Preschool IDEA-B Special Revenue Fund B-8 78 IDEA-B Risk Pool Special Revenue Fund B-9 79 English Language Acquisition Special Revenue Fund B Teacher/Principal Training & Recruiting Special Revenue Fund B Safe & Drug Free Schools & Community Special Revenue Fund B Title I School Improvement Special Revenue Fund B Reading First Special Revenue Fund B Carl D Perkins Secondary - Current Special Revenue Fund B i

6 STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS (Continued) Statement Page Statement of Revenues, Expenditures, and Changes in Fund Balance Budget (Non-GAAP Budgetary Basis) and Actual: Carl D Perkins Secondary PY Obligation Special Revenue Fund B Carl D Perkins Secondary Redistribution Special Revenue Fund B High Schools That Work (HSTW) Special Revenue Fund B Carl D Perkins HSTW Redistribution Special Revenue Fund B Title I Stimulus Special Revenue Fund B Entitlement IDEA-B Federal Stimulus Special Revenue Fund B Preschool IDEA-B Federal Special Revenue Fund B Title I School Improvement Federal Stimulus Special Rev. Fund B Public Health Services Health Education Special Rev. Fund B Johnson O Malley Special Revenue B Impact Aid Special Education Special Revenue Fund B Impact Aid Indian Education Special Revenue Fund B GRADS Program Special Revenue Fund B National Endowment for the Arts Special Revenue Fund B Title XIX Medicaid 0/2 Years Special Revenue Fund B Indian Ed Formula Grant Special Revenue Fund B Navajo Nations Special Revenue Fund B Education Jobs Fund Federal Stimulus Special Revenue Fund B Enlace UNM Special Revenue Fund B Parents Reaching Out Special Revenue Fund B Conoco Phillips Educational Grants Special Revenue Fund B Dual Credit Special Revenue Fund B Library GO Bonds Special Revenue Fund B Technology for Education PED Special Revenue Fund B Incentives for School Improvement Act Special Revenue Fund B Pre-K Initiative Special Revenue Fund B Indian Education Act Special Revenue Fund B Breakfast for Elementary Students Special Revenue Fund B Kindergarten Three Plus Special Revenue Fund B Pre-Kindergarten Special State Special Revenue Fund B GO Bond Pre-K Classrooms Special Revenue Fund B School Wellness HED Special Revenue Fund B Pre-School CYFD Special Revenue Fund B New Mexico Arts Division Special Revenue Fund B Coordinated Approach to Child Health Special Revenue Fund B Gear Up Special Revenue Fund B Regional Quality Control Special Revenue Fund B GRADS Childcare Special Revenue Fund B GRADS Instruction Special Revenue Fund B Private Direct Grants Special Revenue Fund B McCune Charitable Foundation Special Revenue Fund B School Based Health Clinics Special Revenue Fund B iii

7 STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS (Continued) Statement Page Non-major Capital Project Fund Descriptions 128 Combining Balance Sheet Non-major Capital Project Funds C Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-major Capital Project Funds C Statement of Revenues, Expenditures, and Changes in Fund Balance Budget (Non-GAAP Budgetary Basis) and Actual: Bond Building Capital Projects Fund C Special Capital Outlay - State Capital Projects Fund C Special Capital Outlay - Federal Capital Projects Fund C Capital Improvements SB-9 Capital Projects Fund C Statement of Revenues, Expenditures, and Changes in Fund Balance Budget (Non-GAAP Budgetary Basis) and Actual: Debt Service Fund D SUPPORTING SCHEDULES Schedule of Changes in Assets and Liabilities Agency Funds I 136 Schedule of Collateral Pledged by Depository for Public Funds II 137 Schedule of Cash and Temporary Investment Accounts III 138 Cash Reconciliation IV 139 COMPLIANCE SECTION Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 143 FEDERAL FINANCIAL ASSISTANCE Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A Schedule of Expenditures of Federal Awards V 147 Schedule of Findings and Questioned Costs VI 149 iii

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9 STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 OFFICIAL ROSTER JUNE 30, 2012 Matthew Tso Lupita White Chad Wood, M.D. Hoskie Bernally Randy Manning BOARD OF EDUCATION Board President Board Vice President Board Secretary Board Member Board Member DISTRICT STAFF Don Levinski Pandora Mike Andrea Tasan, Ph. D. Phil Kasper Olivia Kien Abena McNeely Edward Marquez Superintendent Director, Curriculum, Instruction & Staff Development Director, Finance Director, Human Resources Director, Academic Support Director, Student Success Director, Operations iv

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11 FINANCIAL SECTION

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13 INDEPENDENT AUDITORS REPORT Hector Balderas New Mexico State Auditor The Office of Management and Budget To the Board of Education Central Consolidated School District No. 22 Shiprock, New Mexico We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information, and the budgetary comparisons for the general fund and major special revenue funds of the Central Consolidated School District No. 22 (the District), as of and for the year ended June 30, 2012, which collectively comprise the District s basic financial statements as listed in the table of contents. We have also audited the financial statements of each of the District s non-major governmental, fiduciary, and budgetary comparisons for the major capital project funds, the debt service fund, and all non-major funds presented as supplementary information in the accompanying combining and individual fund financial statements as of and for the year ended June 30, 2012, as listed in the table of contents. These financial statements are the responsibility of the District s management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the District, and the respective changes in financial position, where applicable, thereof, and the respective budgetary comparisons for the general funds and major special revenue funds for the year then ended June 30, 2012, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each nonmajor governmental and fiduciary fund of the District as of June 30, 2012, and the respective changes in financial position, where applicable, thereof and the respective budgetary comparisons for the major capital project funds, the major debt service fund, and all non-major funds 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 February 8, 2013 on our consideration of the District s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 1

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15 The District has omitted the Management s Discussion and Analysis that the Governmental Accounting Standards Board requires to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Government Accounting Standards Board who considers it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Our audit was conducted for the purpose of forming opinions on the basic financial statements, the combining and individual fund financial statements, and budgetary comparisons. 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 Governmental and Non-Profit Organizations, and is not a required part of the financial statements. The additional schedules listed as Supporting Schedules in the table of contents are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Albuquerque, New Mexico February 8,

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17 BASIC FINANCIAL STATEMENTS

18 STATE OF NEW MEXICO Exhibit A-1 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 (Page 1 of 2) STATEMENT OF NET ASSETS JUNE 30, 2012 ASSETS Primary Government Governmental Activities Current assets: Cash and cash equivalents $ 22,205,158 Property taxes receivable 42,047 Intergovernmental receivables 7,452,465 Other receivables - Inventory 124,933 Prepaid items 8,695 Total current assets 29,833,298 Noncurrent assets: Bond issuance costs (net amortization of $56,980) 78,821 Capital assets (net of accumulated depreciation): Land 359,000 Land Improvements 15,391,716 Buildings and building improvements 239,397,414 Library collections 3,283,410 Equipment and vehicles 12,145,458 Construction in progress 9,772,195 Less: accumulated depreciation (94,660,686) Total noncurrent assets 185,767,328 Total assets $ 215,600,626 The accompanying notes are an integral part of these financial statements 3

19 STATE OF NEW MEXICO Statement A-1 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 (Page 2 of 2) STATEMENT OF NET ASSETS JUNE 30, 2012 LIABILITIES AND NET ASSETS Primary Government Governmental Activities Current liabilities: Accounts payable $ 344,902 Accrued payroll liabilities 105,320 Deferred revenue 577,103 Accrued interest 587,148 Current portion of compensated absences 71,501 Current portion of deferred gain on bond refunding 84,762 Current portion of bonds payable 4,274,711 Total current liabilities 6,045,447 Noncurrent liabilities: Bonds payable 36,381,566 Deferred gain on bond refunding 112,313 Accrued compensated absences 286,003 Total noncurrent liabilities 36,779,882 Total liabilities 42,825,329 Net assets: Invested in capital assets, net of related debt 144,913,976 Restricted for: Debt service 5,569,323 Capital projects 7,081,676 Special revenue 6,065,145 Unrestricted 9,145,177 Total net assets 172,775,297 Total liabilities and net assets $ 215,600,626 The accompanying notes are an integral part of these financial statements 4

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21 5 The accompanying notes are an integral part of these financial statements. Primary Government Governmental activities: Education: STATE OF NEW MEXICO Exhibit A-2 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012 Net (Expense) Revenue Program Revenues and Changes in Net Assets Operating Capital Charges for Grants and Grants and Governmental Expenses Service Contributions Contributions Activities Instruction $ 44,011,889 $ 527,277 $ 38,674,948 $ - $ (4,809,664) Support services: Students 7,045, ,887 - (6,722,316) Instruction 1,822,068-1,697 - (1,820,371) General Administration 1,560, (1,560,633) School Administration 4,789, (4,789,395) Central Services 1,981, (1,981,789) Operation & Maintenance of Plan 10,759, ,134-76,033 (9,969,926) Student Transportation 2,932,320-2,111,236 - (821,084) Other Support Services 513, (513,839) Food Services Operation 3,749, ,772 3,016,178 - (602,577) Community Services 1,090, (1,090,028) Interest on long-term debt 1,678, (1,678,523) Total governmental activities 81,934,307 1,371,183 44,126,946 76,033 (36,360,145) General Revenues: Property taxes: Levied for general purposes $ 371,926 Levied for debt service 5,268,971 Levied for capital projects 1,491,240 State Equalization Guarantee 29,470,184 Unrestricted investment earnings 84,373 Miscellaneous 1,352,777 Gain / Loss on Disposal of Assets 39,542 Total general revenues 38,079,013 Change in net assets 1,718,868 Net assets - beginning 171,398,466 Restatement (342,037) Net assets - beginning - restated 171,056,429 Net assets - ending $ 172,775,297

22 STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2012 Operational Funds Instructional General Teacherage Transportation Materials ASSETS Current Assets: Cash and temporary investments $ 6,576,953 $ 629,453 $ - $ 93,318 Accounts receivable Taxes Due from other governments 375, Interfund receivables 1,000, Inventory Prepaid items Total assets 7,952, ,453-93,318 LIABILITIES AND FUND BALANCES Current Liabilities: Accounts payable 74, Accrued payroll liabilities 51,300 1,192 1,748 - Interfund payables Deferred revenue - property tax Deferred revenue - other Total liabilities 125,497 1,192 1,870 - Fund Balance: Nonspendable Restricted Committed Assigned 12,609, ,159-44,964 Unassigned (4,782,582) 248,102 (1,870) 48,354 Total fund balance 7,827, ,261 (1,870) 93,318 Total liabilities and fund balance $ 7,952,599 $ 629,453 $ - $ 93,318 The accompanying notes are an integral part of these financial statements 6

23 Exhibit B-1 (Page 1 of 2) Special Revenue Funds Title I 1003g Bond Building Debt Grant - Federal Capital Improve- Service Other Total Title I Stimulus ment Fund Fund Governmental Primary Funds Government $ - $ - $ 801,005 $ 5,527,276 $ 8,577,153 $ 22,205, ,047-42, , , ,401,159 7,452, ,783, ,783, , , ,695 8, , ,775 3,584,305 5,569,323 14,111,940 33,616,598 25, , , ,902 23,862 6, , , , , ,249,837 3,783,300 74, , , , , ,363-2,901,995 4,810, , ,933 10,952-3,468,942 5,569,323 8,417,973 17,467, ,278,900 16,313, (611,861) (5,099,857) 10,952-3,468,942 5,569,323 11,209,945 28,805,973 $ 797,885 $ 877,775 $ 3,584,305 $ 5,569,323 $ 14,111,940 $ 33,616,598 The accompanying notes are an integral part of these financial statements 7

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25 STATE OF NEW MEXICO Exhibit B-1 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 (Page 2 of 2) GOVERNMENTAL FUNDS RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET ASSETS JUNE 30, 2012 Amounts reported for governmental activities in the statement of net assets are different because: Governmental Funds Fund balances - total governmental funds $ 28,805,973 Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 185,688,507 Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the funds: Delinquent property taxes not collected within sixty days after year end are not considered "available" revenues and are considered to be deferred revenue in the fund financial statements, but are considered revenue in the Statement of Activities - Bond issuance costs, including original issue discounts and premiums are not financial resources and, therefore, are not reported in the funds Bond issuance costs net of accumulated amortization 78,821 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds: Accrued interest (587,148) Accrued compensated absences (357,504) Deferred gain on bond refunding (197,075) General obligation bonds (40,656,277) Net Assets-Total Governmental Activities $ 172,775,297 The accompanying notes are an integral part of these financial statements 8

26 STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2012 Operational Funds Instructional General Teacherage Transportation Materials Revenues: Property taxes $ 408,815 $ - $ - $ - Other Taxes 5, State grants 29,470,184-2,131, ,998 Federal grants 19,864, Charges for services 23, , Miscellaneous 981, ,371 Interest 84, Total revenues 50,837, ,134 2,131, ,369 Expenditures: Current: Instruction 27,022, ,643 Support Services Students 3,945, Instruction 794, General Administration 997, School Administration 3,490, Central Services 1,746, Operation & Maintenance of Plant 8,888, , Student Transportation 170,637-2,137,213 - Other Support Services 513, Food Services Operations 1, Community Service 613, Capital outlay 448, , Debt service: Principal Total expenditures 48,632, ,996 2,137, ,643 Excess (deficiency) of revenues over (under) expenditures 2,204, ,138 (5,358) 28,726 Other financing sources (uses): Operating transfers Proceeds from bond issues Premium or discount on bond issuance Total other financing sources (uses) Net change in fund balances 2,204, ,138 (5,358) 28,726 Fund balances - beginning of year 5,622, ,123 3,488 64,592 Restatement Fund balances - beginning of year - Resta 5,622, ,123 3,488 64,592 Fund balances - end of year $ 7,827,102 $ 628,261 $ (1,870) $ 93,318 The accompanying notes are an integral part of these financial statements 9

27 Exhibit B-2 (Page 1 of 2) Special Revenue Funds Title I 1003g Bond Building Debt Grant - Federal Capital Improve- Service Other Total Title I Stimulus ment Fund Fund Governmental Primary Funds Government $ - $ - $ - $ 5,792,252 $ 1,643,512 $ 7,844, ,060 20,498 95, ,243,624 34,124,661 2,894,661 1,705, ,083,956 39,548, ,032 1,371, ,064 1,296, ,373 2,894,661 1,705,158-5,862,312 19,940,686 84,365,497 1,408, , ,675,110 39,195, , , ,981,377 7,045,203-4, ,213 1,637,897 67,779 40,643-57, ,085 1,507, , , ,866 4,788, ,827 1,885,933 4,643 4, ,002 9,557,973 23,023 12, ,113 2,588, ,839-2, ,732,760 3,736, , , ,849 1,077, ,495,922-2,166,290 7,222, ,665,602-4,665, ,563,037-1,563,037 2,894,661 1,705,158 4,495,922 6,286,419 20,153,492 86,986, (4,495,922) (424,107) (212,806) (2,621,398) - - (4,495,922) (424,107) (212,806) (2,621,398) 10,952-7,964,864 5,993,430 11,764,788 31,769, (342,037) (342,037) 10,952-7,964,864 5,993,430 11,422,751 31,427,371 $ 10,952 $ - $ 3,468,942 $ 5,569,323 $ 11,209,945 $ 28,805,973 The accompanying notes are an integral part of these financial statements 10

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29 STATE OF NEW MEXICO Exhibit B-2 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 (Page 2 of 2) RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2012 Amounts reported for governmental activities in the statement of activities are different because: Governmental Funds Net change in fund balances - total governmental funds $ (2,621,398) Capital outlays to purchase or build capital assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net assets and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which depreciation exceeds capital outlays for the period: Depreciation expense (6,277,215) Capital outlays 6,492,861 Gain on disposition of assets 2,105 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds: Change in deferred revenue related to property taxes receivable (714,427) The issuance of long-term debt (e.g., bonds, notes, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities: Amortization of bond issuance costs 130,740 Decrease in accrued interest payable (115,486) Decrease in accrued compensated absences 156,086 Bond proceeds - Principal payments on bonds 4,665,602 Change in Net Assets-Total Governmental Activities $ 1,718,868 The accompanying notes are an integral part of these financial statements 11

30 STATE OF NEW MEXICO Exhibit C-1 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON - GAAP BUDGETARY BASIS) AND ACTUAL FOR THE YEAR ENDING JUNE 30, 2012 Budgeted Amounts Original Final Actual Variance Revenues: Property taxes and other taxes $ 379,148 $ 379,148 $ 414,827 $ 35,679 State grants 27,957,243 27,957,243 29,470,184 1,512,941 Federal grants 21,738,417 21,738,417 19,864,727 (1,873,690) Charges for services 239, ,500 23,017 (216,483) Miscellaneous 539, , ,436 65,936 Interest 75,000 75,000 84,373 9,373 Total revenues 50,928,808 50,928,808 50,462,564 (466,244) Expenditures: Current: Instruction 28,884,887 28,884,887 27,002,827 1,882,060 Support Services: Students 4,653,053 4,653,053 3,945, ,050 Instruction 594, , ,479 (195,690) General Administration 1,113,147 1,113, , ,935 School Administration 4,024,068 4,024,068 3,490, ,961 Central Services 1,928,302 1,928,302 1,745, ,172 Operation & Maintenance of Plant 10,296,971 10,296,971 9,012,955 1,284,016 Student Transportation 518, , , ,244 Other Support Services 550, , ,839 36,282 Food Services Operations 10,000 10,000 1,323 8,677 Community Services 699, , ,661 85,928 Capital outlay 3,094,513 3,094, ,055 2,646,458 Debt service: Principal Total expenditures 56,368,134 56,368,134 48,731,041 7,637,093 Excess (deficiency) of revenues over expenditures (5,439,326) (5,439,326) 1,731,523 7,170,849 Other financing sources: Designated cash 5,439,326 5,439,326 - (5,439,326) Operating transfers Proceeds from bond issues Total other financing sources 5,439,326 5,439,326 - (5,439,326) Excess (deficiency ) of revenues and other financing sources over expenditures - - 1,731,523 1,731,523 Fund balances - beginning of year - - 5,845,430 5,845,430 Fund balances - end of year $ - $ - $ 7,576,953 $ 7,576,953 Reconciliation to GAAP Basis: Excess of revenues and other financing sources over expenditures $ 1,731,523 Adjustments to revenues 374,758 Adjustments to expenditures 98,650 Net change in fund balance (GAAP basis) $ 2,204,931 The accompanying notes are an integral part of these financial statements 12

31 STATE OF NEW MEXICO Exhibit C-2 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO TEACHERAGE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON - GAAP BUDGETARY BASIS) AND ACTUAL FOR THE YEAR ENDING JUNE 30, 2012 Budgeted Amounts Original Final Actual Variance Revenues: Property taxes $ - $ - $ - $ - State grants Federal grants Charges for services 600, , , ,134 Interest (500) Total revenues 600, , , ,634 Expenditures: Current: Instruction Support Services: Students Instruction General Administration School Administration Central Services Operation & Maintenance of Plant 607, , , ,711 Student Transportation Other Support Services Food Services Operations Community Services Capital outlay 119, , ,688 6,781 Debt service: Principal Total expenditures 727, , , ,492 Excess (deficiency) of revenues over expenditures (126,827) (126,827) 275, ,126 Other financing sources: Designated cash 126, ,827 - (126,827) Operating transfers Proceeds from bond issues Total other financing sources 126, ,827 - (126,827) Excess of revenues and other financing sources over expenditures , ,299 Fund balances - beginning of year , ,154 Fund balances - end of year $ - $ - $ 629,453 $ 629,453 Reconciliation to GAAP Basis: Excess of revenues and other financing sources over expenditures $ 275,299 Adjustments to revenues - Adjustments to expenditures 7,839 Net change in fund balance (GAAP basis) $ 283,138 The accompanying notes are an integral part of these financial statements 13

32 STATE OF NEW MEXICO Exhibit C-3 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO TRANSPORTATION FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON - GAAP BUDGETARY BASIS) AND ACTUAL FOR THE YEAR ENDING JUNE 30, 2012 Budgeted Amounts Original Final Actual Variance Revenues: Property taxes $ - $ - $ - $ - State grants 2,101,402 2,136,252 2,131,855 (4,397) Federal grants Miscellaneous Total revenues 2,101,402 2,136,252 2,131,855 (4,397) Expenditures: Current: Instruction Support Services: Students Instruction General Administration School Administration Central Services Operation & Maintenance of Plant Student Transportation 2,101,402 2,145,046 2,140,649 4,397 Other Support Services Food Services Operations Community Services Capital outlay Debt service: Principal Total expenditures 2,101,402 2,145,046 2,140,649 4,397 Excess (deficiency) of revenues over expenditures - (8,794) (8,794) - Other financing sources: Designated cash - 8,794 - (8,794) Operating transfers Proceeds from bond issues Total other financing sources - 8,794 - (8,794) Excess (deficiency) of revenues and other financing sources over expenditures - - (8,794) (8,794) Fund balances - beginning of year - - 8,794 8,794 Fund balances - end of year $ - $ - $ - $ - Reconciliation to GAAP Basis: Deficiency of revenues and other financing sources over expenditures $ (8,794) Adjustments to revenues - Adjustments to expenditures 3,436 Net change in fund balance (GAAP basis) $ (5,358) The accompanying notes are an integral part of these financial statements 14

33 STATE OF NEW MEXICO Exhibit C-4 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO INSTRUCTIONAL MATERIALS FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON - GAAP BUDGETARY BASIS) AND ACTUAL FOR THE YEAR ENDING JUNE 30, 2012 Budgeted Amounts Original Final Actual Variance Revenues: Property taxes $ - $ - $ - $ - State grants 224, , ,998 50,729 Federal grants Miscellaneous - - 1,371 1,371 Total revenues 224, , ,369 52,100 Expenditures: Current: Instruction 269, , ,643 21,062 Support Services: Students Instruction General Administration School Administration Central Services Operation & Maintenance of Plant Student Transportation Other Support Services Food Services Operations Community Services Capital outlay Debt service: Principal Total expenditures 269, , ,643 21,062 Excess (deficiency) of revenues over expenditures (44,436) (44,436) 28,726 73,162 Other financing sources: Designated cash 44,436 44,436 - (44,436) Operating transfers Proceeds from bond issues Total other financing sources 44,436 44,436 - (44,436) Excess (deficiency) of revenues and other financing sources over expenditures ,726 28,726 Fund balances - beginning of year ,592 64,592 Fund balances - end of year $ - $ - $ 93,318 $ 93,318 Reconciliation to GAAP Basis: Excess of revenues and other financing sources over expenditures $ 28,726 Adjustments to revenues - Adjustments to expenditures - Net change in fund balance (GAAP basis) $ 28,726 The accompanying notes are an integral part of these financial statements 15

34 STATE OF NEW MEXICO Exhibit C-5 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO TITLE I SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON - GAAP BUDGETARY BASIS) AND ACTUAL FOR THE YEAR ENDING JUNE 30, 2012 Budgeted Amounts Original Final Actual Variance Revenues: Property taxes $ - $ - $ - $ - State grants Federal grants 3,071,225 4,082,762 2,240,438 (1,842,324) Miscellaneous Total revenues 3,071,225 4,082,762 2,240,438 (1,842,324) Expenditures: Current: Instruction 1,112,754 2,229,876 1,394, ,450 Support Services: Students 1,107,480 1,097, , ,611 Instruction General Administration 84, ,811 67,779 45,032 School Administration 374, , ,927 (54,666) Central Services Operation & Maintenance of Plant 4,559 4,559 4,643 (84) Student Transportation 153,561 18,561 22,179 (3,618) Other Support Services Food Services Operations Community Services 234, , ,812 10,402 Capital outlay Debt service: Principal Total expenditures 3,071,225 4,082,762 2,879,635 1,203,127 Excess (deficiency) of revenues over expenditures - - (639,197) (639,197) Other financing sources: Designated cash Operating transfers Proceeds from bond issues Total other financing sources Excess (deficiency) of revenues and other financing sources over expenditures - - (639,197) (639,197) Fund balances - beginning of year - - (23,477) (23,477) Fund balances - end of year $ - $ - $ (662,674) $ (662,674) Reconciliation to GAAP Basis: Deficiency of revenues and other financing sources over expenditures $ (639,197) Adjustments to revenues 654,223 Adjustments to expenditures (15,026) Net changes in fund balance (GAAP basis) $ - The accompanying notes are an integral part of these financial statements 16

35 STATE OF NEW MEXICO Exhibit C-6 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO TITLE I 1003g GRANT - FEDERAL STIMULUS SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (NON - GAAP BUDGETARY BASIS) AND ACTUAL FOR THE YEAR ENDING JUNE 30, 2012 Budgeted Amounts Original Final Actual Variance Revenues: Property taxes $ - $ - $ - $ - State grants Federal grants 120,000 1,813,861 1,136,478 (677,383) Miscellaneous Total revenues 120,000 1,813,861 1,136,478 (677,383) Expenditures: Current: Instruction 120, , ,312 26,504 Support Services: Students - 515, , ,523 Instruction - - 4,756 (4,756) General Administration - 6,326 40,643 (34,317) School Administration - 184, ,360 (12,235) Central Services Operation & Maintenance of Plant - - 4,699 (4,699) Student Transportation ,706 (12,706) Other Support Services Food Services Operations - - 2,317 (2,317) Community Services - 223, ,945 7,172 Capital outlay Debt service: Principal Total expenditures 120,000 1,813,861 1,727,692 86,169 Excess (deficiency) of revenues over expenditures - - (591,214) (591,214) Other financing sources: Designated cash Operating transfers Proceeds from bond issues Total other financing sources Excess of revenues and other financing sources over expenditures - - (591,214) (591,214) Fund balances - beginning of year - - (279,575) (279,575) Fund balances - end of year $ - $ - $ (870,789) $ (870,789) Reconciliation to GAAP Basis: Excess of revenues and other financing sources over expenditures $ (591,214) Adjustments to revenues 568,680 Adjustments to expenditures 22,534 Net change in fund balance (GAAP basis) $ - The accompanying notes are an integral part of these financial statements 17

36 STATE OF NEW MEXICO Exhibit D-1 CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 AGENCY FUNDS STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES - AGENCY FUNDS JUNE 30, 2012 ASSETS Current Assets Cash $ 737,048 Total assets $ 737,048 LIABILITIES Current Liabilities Deposits held in trust for others $ 737,048 Total liabilities $ 737,048 The accompanying notes are an integral part of these financial statements. 18

37 NOTE 1. Summary of Significant Accounting Policies STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2012 The Central Consolidated School District No. 22 (the District) was created under the provision of Chapter 22 Article 5, Paragraph 4, New Mexico Statutes 1978 to provide public education for the children within the District. The School Board (the Board) is authorized to establish policies and regulations for its own government consistent with the laws of the State of New Mexico and the regulations of the State Board of Education and the Legislative Finance Committee. The School Board is comprised of five members who are elected for terms of four years. The summary of significant accounting policies of the District is presented to assist in the understanding of the District s financial statements. The financial statements and notes are the representation of the District s management, who is responsible for their integrity and objectivity. The financial statements of the District have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units. The Governmental Accounting Standard Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The financial statements have incorporated all applicable GASB pronouncements as well as Financial Accounting Standards Board (FASB) statements and interpretations, Accounting Principles, Board Opinions and Accounting Research Bulletins of the Committee on accounting procedures issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. The Government-Wide financial statements have incorporated all applicable GASB pronouncements as well as Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles, Board Opinions and Accounting Research Bulletins of the Committee on Accounting Procedures issued after November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units. The more significant of the District s accounting policies are described below. A. Financial Reporting Entity In evaluating how to define the District, for financial reporting purposes, management has considered all potential component units. The decision to include any potential component units in the financial reporting entity was made by applying the criteria set forth in GASB Statement No. 14, The Financial Reporting Entity and GASB Statement No. 39, Determining Whether Certain Organization Are Component Units. Blended component units, although legally separate entities, are in substance, part of the government s operations. Each discretely presented component unit is reported in a separate column in the government-wide financial statements to emphasize that it is legally separate from the government. The basic but not the only criterion for including a potential component unit within the reporting entity is the governing body s ability to exercise oversight responsibility. The most significant manifestation of this ability is financial interdependency. Other manifestations of the ability to exercise oversight responsibility include, but are not limited to, the selection of governing authority, the designation of management, the ability to significantly influence operations, and accountability for fiscal matters. A second criterion used in evaluating potential component units is the scope of public service. Application of this criterion involves considering whether the activity benefits the government and/or its citizens. A third criterion used to evaluate the potential component units for inclusion of exclusion from the reporting entity is the existence of special financing relationships, regardless of whether the government is able to exercise oversight responsibilities. Finally, the nature and significance of a potential component unit to the primary government could warrant its inclusion within the reporting entity. Based upon the application of these criteria, there was no component units during the year ended June 30, B. Government-wide and fund financial statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities and changes in net assets) report information on all of the non-fiduciary activities of the primary government. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The District does not have business-type activities as of June 30,

38 STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1. Summary of Significant Accounting Policies (Continued) B. Government-wide and fund financial statements (continued) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. 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. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise fund are reported as separate columns in the fund financial statements. C. Measurement focus, basis of accounting, and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and the fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets and liabilities resulting from non-exchange transactions are recognized in accordance with the requirements of GASB Statement No. 33, Accounting and Financial Reporting for Non-Exchange Transactions. Property taxes are recognized as revenues in the year for which the taxes are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Sales and use taxes are classified as derived tax revenues and are recognized as revenue when the underlying exchange takes place and the revenues are measurable and available. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met and the susceptible to accrual criteria have been met. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the government. 20

39 STATE OF NEW MEXICO CENTRAL CONSOLIDATED SCHOOL DISTRICT NO. 22 NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 2012 NOTE 1. Summary of Significant Accounting Policies (Continued) C. Measurement focus, basis of accounting, and financial statement presentation (continued) The agency funds are custodial in nature (assets equal liabilities) and do not present results of operations or have a measurement focus. Agency funds are accounted for using the accrual basis of accounting. These funds are used to account for assets that the District holds for others in an agency capacity. Governmental funds are used to account for the District s general government activities, including the collection and disbursement of specific or legally restricted monies, the acquisition or construction of general fixed assets, and the servicing of general long-term debt. Governmental funds include: The General Fund is the primary operating fund of the District, and accounts for all financial resources, except those required to be accounted for in other funds. Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. Debt Service Funds account for the services of general long-term debt not being financed by proprietary or nonexpendable trust funds. Capital Projects Funds account for the acquisition of fixed assets or construction of major capital projects not being financed by proprietary or nonexpendable trust funds. Under the requirements of GASB Statement No. 34, Basic Financial Statements and Management s Discussion and Analysis for State and Local Governments, the District is required to present certain of its governmental funds as major funds based upon certain criteria. The major funds presented in the fund financial statements include the following (in addition to the General Fund), which may include funds that were not required to be presented as major but were at the discretion of management: The Teacherage Operational Fund is considered by the State of New Mexico s Public Education Department (PED) to be a sub-fund of the General Fund. The Transportation Operational Fund is used to account for the State Equalization received from the State Department of Education which is used to pay for the costs associated with transporting school age children. The Instructional Materials Operational Fund is used to account for the monies received from the State Department of Education for the purposes of purchasing instructional materials (books, manuals, periodicals, etc.) used in the education of students. The Title I Special Revenue Fund is used to account for expenditures that are used to provide supplemental educational opportunity for academically disadvantaged children in the area of residing. Campuses are identified for program participation by the percentage of students on free or reduced price lunches. Any school with a free and reduced price lunch percentage that is equal to or greater than the total district percentage becomes eligible for program participation. Any student whose test scores fall below District established criteria and who is attending a Title I campus is eligible to receive Title I services. Poverty is the criteria that identify a campus; educational need determines the students to be served. Federal revenues accounted for in this fund are allocated to the District through the New Mexico Department of Education. Authority for creation of this fund is Part A. of Chapter I of Title I of Elementary and Secondary Education Act (ESEA) of 1965, as amended, Public Law