SMITH COUNTY SCHOOL DISTRICT Audited Financial Statements For the Year Ended June 30,2007

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1 , * *- SMITH COUNTY SCHOOL DISTRICT Audited Financial Statements For the Year Ended June 30,2007 A Report from the Education Audit Section

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3 The Of3icr of the State Audrlor does no/ drscrrmrnate on /he basrs of race relrgron na~ronal orrgrn, sex, age or drsabrlrly

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5 SMITH COUNTY SCHOOL DISTRICT TABLE OF CONTENTS F[NANCIALAUDlTREPORT... I Independent Auditor's Report on the Basic Financial Statements and Supplemental Information... 3 MANAGEMENT'S DISCUSSION AND ANALYSIS... 5 FINANCIAL STATEMENTS... I7 Statement of Net Assets... I9 Statement of Activities Balance Sheet - Governmental Funds Reconciliation of Governmental Funds Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities Statement of Fiduciary Assets and Liabilities Notes to Financial Statements REQUIRED SUPPLEMENTARY INFORMA'TION Budgetary Comparison Schedule. General Fund Budgetay Comparison Schedule. EEF Buildings and Buses Fund Budgetary Comparison Schedule. Sixteenth Section Interest Fund Notes to the Required Supplementary Information SUPPLEMENTALINFORMATION Schedule of Expenditures of Federal Awards Schedule of Instructional. Administrative and Other Expenditures. Governmental Funds REPORTS ON INTERNAL CONTROLS AND COMPLIANCE lndependent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Audiring Slandards lndependent Auditor's Report on Compliance with Requirements Applicable to Each Major Federal Program and Internal Control over Compliance in Accordance with OMB Circular A INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH STATE LAWS AND REGULATIONS Independent Auditor's Report on Compliance with State Laws and Regulations SCHEDULE OF FINDINGS AND QUESTIONED COSTS AUDITEE'SCORRECTIVEACTIONPLAN... 73

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7 SMITH COUNTY SCHOOL DISTRICT FINANCIAL AUDlT REPORT

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9 STATE OF MISSISSIPPI OFFICE OF THE STATE AUDITOR STACEY E. PlCKERlNG STATE AUDITOR INDEPENDENT AUDITOR'S REPORT ON THE BASIC FINANCIAL STATEMENTS AND SUPP1,EMENTAL INFORMATION Superintendent and School Board Smith County School District We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Smith County School District as of and for the year ended June 30, 2007, which collectively comprise the Smith County School District's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Smith County School District's management. Our responsibility is to express opinions on these tinancial 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 Governmen1 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 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 Smith County School District, as of June 30,2007, 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 February 17,2009, on our consideration of the Smith County School District's internal control over financial reporting and 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 Standard and should be considered in assessing the results of our audit. The Management's Discussion and Analysis on pages 7 through 15 and the Budgetary Comparison Schedule and corresponding notes on pages 45 through 48 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. 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. POS7'OI.RC.Y :'OX456. JACKSON MISSISSIPPI 302rU. (6rll) FAX(6nI)

10 Our audit was conducted for the purpose of forming opinions on the tinancial statements that collectively comprise the Smith County School District's basic financial statements. l'he accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Oftice of Management and Budget Circular A-133, Audits of States, Local Governments, andnon-profit Organizations, and is not a required part of the basic tinancial slalements. In addition, the Schedule of Instructional, Administrative and Other Expenditures - Governmental Funds is presented for purposes of additional analysis 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. STACEY PICKERING State Audilor WILLIAM R. DOSS, CPA Director, Financial and Compliance Audit Division February 17,2009

11 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS

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13 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 The discussion and analysis of the Smith County School District's financial performance provides an overall narrative review of the School District's financial activities for the year ended June 30,2007. The intent of this discussion and analysis is to look at the School District's performance as a whole; readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance. Information contained in this section is qualified by the more detailed information contained elsewhere in this district's financial statements, notes to financial statements and any accompanying materials. To the extent this discussion contains any forward-looking statements of the District's plans, objectives, expectations and prospects, the actual results could differ materially from those discussed herein. FINANCIAL HIGHLIGHTS Total net assets, including the effect of prior period adjustments of ($1,229,183), increased $1,55 1,352, which represents a 6% increase from fiscal year This increase in net assets is primarily due to the following: 1) capital outlays during the fiscal year were not reported as expenses in the Statement of Activities but were capitalized on the Statement of Net Assets, 2) an increase in Mississippi Adequate Education Program (MAEP) funds received during the fiscal year, and 3) conservative budgeting and spending during the fiscal year. General revenues accounted for $18,487,166 in revenue, or 72% of all revenues. Program specific revenues in the form of charges for services and grants and contributions accounted for $7.0 14,662, or 28% of total revenues. rn rn The District had $22,72 1,293 in expenses; only $7,014,662 of these expenses were offset by program specific charges for services, grants and contributions. General revenues totaling $18,487,166 were adequate to provide for these programs. Among major funds, the General Fund had $18,387,234 in revenues and $1 7,266,464 in expenditures. After net other financing uses of $273,539, the net change in fund balance for the General Fund was an increase of $847,23 1 from the previous fiscal year. This increase is due primarily to an increase in MAEP funds received during the fiscal year, proceeds of loans from the issuance of a three mill note, and conservative budgeting and spending during the fiscal year. Capital assets, net of accumulated depreciation, including the effects of prior period adjustments of ($1,2 1 1,192), increased by $93 1,559 due primarily to completed construction during the fiscal year, the purchase of land, the purchase of twelve new school buses and various other items of mobile equipment and furniture and equipment. Long-term debt increased by $176,589. OVERVIEW OF FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the District's basic financial statements. The District's basic fi nancial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide financial statements. The government-wide financial statements are designed Lo provide readers with a broad overview of the District's finances, in a manner similar to a private-sector business. These statements are prepared using the accrual basis of accounting and include all assets and liabilities.

14 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 The statement of net assets presents information on all the District's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The statement of activities presents information showing how the District's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving risc to the change occurs, regardless of the timing of rclatcd cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal years. The government-wide financial statements outline functions of the District that are principally supported by property taxes and intergovernmental revenues (governmental activities). The governmental activities of the District include instruction, support services, non-instructional, sixteenth section and interest on long-term liabilities. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of thc funds of the District can be divided into two categories: governmental funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on current spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the District's current financing requirements. Governmental funds are reported using modified accrual accounting. This method of accounting measures cash and other assets that can be easily converted to cash. The governmental funds statements provide a detailed short-term view of the school district's operations. Because the focus of governmental funds is narrower than that of thc government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District's current financing decisions. Both the governmental fund's balance sheet and the governmental fund's statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between govcrnrnental funds and governrncntal activities. The District maintains individual governmental funds in accordance with the Financial Accounting Manua1,for Mississippi Public School Districts. Information is presented separately in the governmental fund balance sheet and in the governmental fund's statement of revenues, expenditures, and changes in fund balances for all major funds. All other non-major funds are combined together and presented in these reports as other governmental funds. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the District. Fiduciary funds are not reflected in the government-wide financial statements because resources of those funds are not available to support the District's own programs. The accrual basis of accounting is used for fiduciary funds. The school district is responsible for ensuring that the assets reported in these funds are used for their intended purpose. Notes to the financial statements. The notes provide additional information that is essential to have a full understanding of the data provided in the government-wide and fund financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the District's budget process.

15 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 The District adopts an annual operating budget for all governmental funds. A budgetary comparison statement has been provided for the General Fund and each additional major special rcvenue fund. Additionally, a schedule of expenditures of federal awards is required by OMB Circular A-133 and a schedule of instructional, administrative and other expenditures for governmental funds is also included in this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS Net assets. Net assets may serve over time as a useful indicator of a government's financial position. In the case of the District, assets exceeded liabilities by $26,956,795 as of June 30, The district's net assets are comprised of I) net assets invested in capital assets, net of related debt, 2) restricted net assets and 3) unrestricted net assets. The amount of $12,533,841 of the District's net assets (46%) reflects its investment in capital assets (e.g., land, buildings, building improvements, improvements other than buildings, mobile equipment, furniture and equipment and leased property under capital leases), less any related debt used to acquire those assets that is still outstanding. The District uses these capital assets to provide services to its students; consequently these assets are not available for future spending. The amount of $10,13 1,801 of the District's net assets (38%) reflects its restricted net assets. A portion of the restricted net assets is expendable for school based activities, debt service, forestry improvements and unemployment benefits. The remaining portion of the restricted net assets is nonexpendable for 16'~ section investment purposes. The amount of $4,291,153 of the District's net assets (16%) reflects its unrestricted net assets. The District's financial position is a product of several financial transactions including the net result of activities, the acquisition and payment of debt, the acquisition and disposal of capital assets and the depreciation of capital assets. The following table presents a summary of the District's net assets for the fiscal year ended June 30, 2007 and comparative data for the fiscal year ended June 30,2006. Current assets Other assets Capital assets, net Total assets Current liabilities Long-term debt outstanding Total liabilities Net assets: Invested in capital assets. net of related debt Restricted Unrestricted Total Net Assets Table 1 Condensed Statement of Net Assets Total Percentage - Net Assets Change June 30,2007 June 30,

16 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 The following are significant current year transactions that have had an impact on the Statement of Net Assets: Capital assets increased from the previous fiscal year due primarily to completed construction during the fiscal year, the purchase of land, the purchase of twelve new school buses and various other items of mobile equipment and furniture and equipment. Net assets invested in capital assets, net of related debt, also increased from the previous fiscal year due primarily to completed construction during the fiscal year, the purchase of land, and the purchase of various items of mobile equipment and furniture and equipment. Restricted net assets increased from the previous fiscal year due primarily to an increase in amounts restricted for school based activities. In the previous fiscal year, sixteenth section interest funds were reported as unrestricted net assets. However, the sixteenth section interest funds are reported as restricted net assets, expendable for school based activities in the current fiscal year. Unrestricted net assets decreased from the previous fiscal year. In the previous fiscal year, sixteenth section interest funds were reported as unrestricted net assets. However, the sixteenth section interest funds are reported as restricted net assets, expendable for school based activities in the current fiscal year.

17 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 Changes in net assets. The District's total revenues for the fiscal year ended June 30, 2007 were $25,50 1,828. The total cost of all programs and services was $22,721,293. The following table presents a summary of the changes in net assets for the fiscal year ended June 30,2007 and comparative data for the fiscal year ended June 30,2006. Table 2 Changes in Net Assets Change in Net Assets June 30,2007 June 30,2006 Revenues: Program revenues: Charges for services $ 2, ,353 Operating grants and contributions ,253,O 18 General revenues: Property taxes 2,846,010 2,856,593 Grants and contributions not restricted 14,588,449 13,818,624 Other Total revenues Total Percentage Change Expenses: Instruction Support services Non-instructional Sixteenth section Interest on long-term liabilities Total expenses lncrease (Decrease) in net assets 2,780,535 1, % Net Assets, July 1 Prior Period Adjustments Net Assets, Restated, July 1 Net Assets, June 30 S 26,956,795 25,405, % The following are significant current year transactions that have had an impact on the Statement of Activities: Charges for services (program revenue) increased from the previous fiscal year due primarily to an increase in food service daily collections and an increase in various activity fund revenues. Unrestricted state grants and contributions (general revenue) increased from the previous fiscal year due primarily to an increase in Mississippi Adequate Education Program (MAEP) funds. w Other general revenues increased from the previous fiscal year due primarily to an increase in unrestricted investment earnings.

18 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 Other general revenues in the current and prior fiscal year consist of insurance loss recoveries related to tornado damages at the Mize Attendance Center in fiscal year 2005 and damages caused by Hurricane Katrina in fiscal year Insurance loss recoveries were greater in the current fiscal year. These insurance loss recoveries were reported as extraordinary items in the prior year. They are included in the charges for services as program revenues in the table above for comparative purposes. Governmental activitics. The following table presents, for the fiscal year ended June 30,2007 and comparative data for the fiscal year ended June 30, 2006, the cost of five major District functional activities: instruction, support services, non-instructional, sixteenth section and interest on long-term debt. The table also shows each function's net cost (total cost less charges for services generated by the activities and intergovernmental aid provided for specific programs). The net cost shows the financial burden that was placed on the State and District's taxpayers by each of these functions. Table 3 Net Cost of Governmental Activities Total Percentage Total Expenses Change Instruction $ 13,282,220 12,991, % Support services 7,804,955 7,712, % Nan-instructional 1,381,522 1,291, % Sixteenth section 44,986 50,550 (I I.O)% Interest on long-term liabilities 207, ,825 (lo.l)% Total Expenses $ % Total Percentage - Net (Expense) Revenue Change Instruction % (9,257,872) (10,141,210) (8.7)'?? Support services (6,493,171) (6.8 17,044) (4.8)% Non-instructional 289,320 67, % Sixteenth section (37,298) (50,550) (26.2)% Interest on long-term liabilities (207,610) (230,825) (10.1)?'0 Total Net (Expense) Revenue $ ( ) (17, (8.5)% The net cost of governmental activities for fiscal year 2007 in the amount of $15,706,63 1 was financed by general revenue, which is made up of primarily property taxes of $2,846,010 and state revenue of $14,078,191. Investment earnings accounted for $699,35 1 of funding.

19 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 FINANCIAL ANALYSIS OF THE DISTRICT'S FUNDS As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the District's governmental funds is to provide information on current inflows, outflows and balances of spendable resources. Such information is useful in assessing the District's financing requirements. In particular, unreserved fund balance may serve as a useful measure of the District's net resources available for spending at the end of the fiscal year. The financial performance of the District as a whole is reflected in its governmental funds. As the District completed fiscal year June 30, 2007, its governmental funds reported a combined fund balance of $14,382,592. The net change in fund balance for the fiscal year was an increase of $839,901, which includes the prior period adjustments of ($1 7,991) and the increase in reserve for inventory of $2,112, due primarily to an increase in MAEP funds, proceeds of loans, and conservative budgeting and spending during the fiscal year. The amount of $8,330,153, or 58%, of the fund balance is reported by fund type in the unreserved, undesignated section of the Governmental Funds Balance Sheet. The portion of the fund balance reported in the General Fund is available for spending at the District's discretion. 'The portion of the fund balance reported in the Special Revenue Funds will be used for school based activities. The portion of the fund balance reported in the Capital Project Funds is a result of insurance loss recoveries and will be used for future repairs, renovation or construction contracts. The remaining fund balance of $6,052,439, or 42%, is reserved or designated to indicate that it is not available for spending because it has already been committed. This portion of the fund balance is reserved for advances, inventory, unemployment benefits, forestry improvements, debt service purposes and permanent fund purposes. The General Fund is the principal operating fund of the District. The net change in fund balance for the General Fund for the fiscal year was an increase of $847,23 1 due primarily to an increase in MAEP funds, proceeds of loans, and conservative budgeting and spending during the fiscal year. The net change in fund balance for the EEF Buildings and Buses Fund for the fiscal year was a decrease of $66,360 due to the repayment of a portion of long-term debt. The net change in fund balance for the Sixteenth Section Interest Fund for the fiscal year was an increase of $48 1,286 due to the transfer of earnings on investments from the Sixteenth Section Principal Fund and sixteenth section revenue generated primarily from the sale of timber, sixteenth section leases and earnings on investments. The net change in fund balance for the Mize Building Project Fund for the fiscal year was a decrease of $575,762 due to facilities acquisition and construction expenditures and other costs associated with the construction of the new Attendance Center at Mize. The net change in fund balance for the Sixteenth Section Principal Fund for the fiscal year was an increase of $194,974 due to the excess of sixteenth section sources generated during the fiscal year over the transfer of earnings on investments to the Sixteenth Section Interest Fund. The net change in fund balance for the Other Governmental Funds for the fiscal year was a decrease of $41,468 which includes the prior period adjustments of ($1 7,991) and the increase in reserve for inventory of $2. I 12. BUDGETARY HIGHLIGHTS Over the course of the year, the District revised the annual operating budget. Significant budget revisions during the fiscal year are as follows: Budgeted amounts for revenue from local sources in the General Fund were increased to reflect the increase in various activity fund revenues. Amounts originally budgeted were understated.

20 SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 Budgeted amounts for revenue from state sources in the General Fund were increased to reflect the increase in Mississippi Adequate Education Program funds received during the fiscal year. The original budgeted amounts underestimated For potential cuts by the Mississippi legislature. This was done upon suggestion of the Mississippi Department of Education. rn Budgeted amounts for revenue from federal sources in the General Fund were increased to reflect an increase in E-rate funds received during the fiscal year. Amounts originally budgeted were understated The budget for the General Fund was revised to reflect proceeds of loans received from the issuance of a three mill note payable. rn rn rn Budgeted amounts for transfers in and transfers out of the General Fund were decreased to reflect actual transfers made during the fiscal year. Budgeted amounts for revenue from sixteenth section sources in the Sixteenth Section Interest Fund were increased to reflect actual revenue generated during the fiscal year primarily from the sale of timber, sixteenth section leases and earnings on investments. The budget for the Sixteenth Section Interest Fund was revised to decrease support services expenditures to zero. The original budget incorrectly included support services expenditures in this fund. Budgeted amounts for transfers into the Sixteenth Section Interest Fund were increased to reflect the actual transfer of earnings on investments from the Sixteenth Section Principal Fund. The original budgeted amount was understated. rn Budgeted amounts for transfers out of the Sixteenth Section Interest Fund were decreased to reflect actual transfers made to other governmental funds. The original budgeted amount was overstated. A schedule showing the original and final budget amounts compared to the District's actual financial activity for the General Fund and other major special revenue funds is provided in this report as required supplementary information. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets. As of June 30,2007, the District's total capital assets, before depreciation, were $23,404,484, including land, buildings, building improvements, improvements other than buildings, mobile equipment, furniture and equipment and leased property under capital leases. This amount represents a gross increase of $1,450,260, including the effect of adjustments of ($1,205,134), from the previous year due primarily to completed construction during the fiscal year, the purchase of land, the purchase of twelve new school buses and various other items of mobile equipment and furniture and equipment. Total depreciation expense for the year was $723,5 10. Total accumulated depreciation as of June 30,2007 was $6,823,471, including the effect of adjustment of $6,058, resulting in total net capital assets of $16,581,013.

21 Land Construction in progress Buildings Building improvements Improvements other than buildings Mobile equipment Furniture and equipment Leased property under capital leases Total SMITH COUNTY SCHOOL DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JUNE 30,2007 Table 4 Capital Assets at June 30 Net of Depreciation Total Percentage Capital Assets, Net of Depreciation Change Debt Administration. At June 30, 2007, the District had $4,191,539 in general obligation bonds and other long-term debt outstanding, of which $364,421 is due within one year. Table 5 Outstanding Long-Term Debt at June 30 General obligation bonds payable Three mill notes payable Obligations under capital leases Compensated absences payable Total Percentage Outstanding Debt Change $ 3,l ,350,000 (7.0) % 910, , % 22,172 26,987 (17.8)% 144, , % Total CURRENT ISSUES The Smith County School District is financially stable. The District is proud of its community support of the public schools. The District has committed itself to financial excellence for many years. In addition, the District's system of financial planning, budgeting and internal financial controls are well regarded. The District plans to continue its sound fiscal management to meet the challenges of the future. CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT If you have questions about this report, contact the Superintendent's Office of the Smith County School District, P. 0. Box 308, Raleigh, MS

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23 SMITH COUNTY SCHOOL DISTRICT FINANCIAL STATEMENTS

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25 SMITH COUNTY SCHOOL DISTRICT Statement of Net Assets June 30,2007 Assets Cash and cash equivalents Cash with fiscal agents Investments Due from other governments Inventories Long-term deferred chargcs Restricted assets Capital assets, non-depreciable: Land Capital assets, net of accumulated depreciation: Buildings Building improvements Improvements other than buildings Mobile equipment Furniture and equipment Leased property under capital leases Exhibit A Governmental Activities Total Assets Liabilities Accounts payable and accrued liabilities Unearned revenue lntercst payable on long-term liabilities Long-term liabilities, due within one year Capital related liabilities Non-capital related liabilities Long-term liabilities, due beyond one year Capital related liabilities Non-capital related liabilities Total Liabilities Net Assets Invested in capital assets, net of related debt Restricted net assets: Expendable: School-based activities Debt service Forestry improvements Unemployment benefits Non-expendable: Sixteenth section Unrestricted Total Net Assets The notes to the financial statements are an integral part of this statement.

26 SMITH COUNTY SCHOOL DISI'RICT Slatrrncnt of Activities For the Ycar Ended June 30,2007 Net (Expense) Revenue and Program Revenues Changes in Net Asscts Operating Capital Charges for Grants and Grants and GovernmenVal FunclionsiPrograms Expenscs Services Contributions Contributions Activities Governmcnlal Activities: lnslruction $ 13, ,947,404 2,076,944 (9, ') Suppon services 7,804, , ,689 (6, ) Non-instructional 1, , , ,320 Sixteenth section ,688 (37,298) Interest on long-term liabilities ( ) Tolal Governmental Aclivities $ ,998, (I 5, I) General Taxes: General purpose levies 2, Debt purpose levies 207,684 Unrestricted grants and conlributinns: Statc 14,078,191 Federal 510,258 Unrestricted investlner~t earnings Sixteenth section sources 249,608 Other 103,748 Total General Revenues 18,487,166 Change in Net Assets 2,780,535 Net Assets - Beginning 25,405,443 Prior Period Adjustments (1,229,183) Net Assets - Beginning - Restated 24,176,260 Nel Assets -Ending $ The notes to the financ~al statements are an integral pan of this stalernenl

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