BURLINGAME SCHOOL DISTRICT COUNTY OF SAN MATEO BURLINGAME, CALIFORNIA

Transcription

1 COUNTY OF SAN MATEO BURLINGAME, CALIFORNIA SINGLE AUDIT REPORT YEAR ENDED JUNE 30,2011 Vargas and Company

2 June 30, 2011 Table of Contents FINANCIAL SECTION Independent Auditors' Report Management's Discussion and Analysis (Required Supplementary Information) Basic Financial Statements Government-wide Financial Statements Statement of Net Assets Statement of Activities Fund Financial Statements Governmental Funds Balance Sheet Reconciliation of Governmental Funds Balance Sheet to the Government-wide Statement of Net Assets ~ Governmental Activities Statement of Revenues, Expenditures, and Changes in Fund Balances Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-wide Statement of Activities - Governmental Activities Fiduciary Funds Statement of Fiduciary Net Assets Statement of Changes in Fiduciary Net Assets Notes to the Basic Financial Statements Required Supplementary Information (other than MD&A) Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund Schedule of Funding Progress Combining Fund Statements Nonmajor Governmental Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (By Object) Nonmajor Special Revenue Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (By Object) Nonmajor Capital Projects Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (By Object) Page(s)

3 June 30, 2011 Table of Contents SUPPLEMENTARY INFORMATION SECTION Organization Schedule of Average Daily Attendance Schedule of Instructional Time Schedule of Charter Schools Schedule of Financial Trends and Analysis Schedule of Expenditures of Federal Awards Reconciliation of Annual Financial and Budget Report (SACS) with Audited Basic Financial Statements OTHER INDEPENDENT AUDITORS' REPORT SECTION 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 Program and on Internal Control Over Compliance in Accordance With OMB Circular A-J 33 Independent Auditors' Report on State Compliance FINDINGS AND RECOMMENDATIONS SECTION Schedule of Audit Findings and Questioned Costs Summary Schedule of Prior Audit Findings

4 Vargas and Company certified oubfic >'!ccountants INDEPENDENT AUDITORS' REPORT To the Board of Trustees of Burlingame School District Burlingame, California We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Burlingame School District (the "District"), as of and for the year ended June 30, 2011, which collectively comprise the District's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of Burlingame School 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 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 opmlons. 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 Burlingame School District, as of June 30, 2011, 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 November 8, 2011, on our consideration of Burlingame School 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 fmancial 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. 601 North First Street / San Jose, California / (408) / Fax (408)

5 Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, schedule of revenues, expenditures, and changes in fund balances - budget and actual - general fund, and schedule of funding progress be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic fmancial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opmlons on the financial statements that collectively comprise Burlingame School District's financial statements as a whole. The combining fund statements and supplementary information are presented for purposes of additional analysis and are not a required part of the 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-I33, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the fmancial statements. The combining fund financial statements and schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the fmancial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements taken as a whole. ~~" tl<j O. J (!"'7'd''Y-- V arga and Company () San ose, California November 8, 20 II 2

6 Management's Discussion and Analysis (MD&A) - Required Supplementary Information

7 Management's Discussion and Analysis Year Ended June 30, 2011 An overview of the Burlingame School District's (the "District") financial activities for the fiscal year ended June 30, 2011 is provided in this discussion and analysis of the District's financial performance. This Management Discussion and Analysis (MD&A) should be read in conjunction with the District's financial statements (including notes and supplementary information). USING TIDS ANNUAL REPORT This annual report consists of a series of financial statements. The Statements of Net Assets and the Statement of Activities provide information about the activities of the District as a whole and present a longer-term of the District's finances. Fund financial statements, for governmental activities, tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report he District's operations in more detail than the government-wide statements by providing information about the District's most significant funds. The remaining statements provide financial information about activities for which the District acts solely as trustee or agent for the benefit of those outside of the District. Reporting the District as a Whole One of the most important questions asked about the District's finances is, "Is the District as a whole better off or worse as a result of the year's activities?" The Statement of Net Assets and the Statement of Activities report information about the District as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. FINANCIAL IDGHLIGHTS The District's financial status has declined for fiscal year There was a 61.5% or $1,097,447 decrease in total net assets. The decrease is mostly attributable reduced state revenue and principal payment on long-term debt. Expenses of$26,978,386 were more than revenues of$25,880,939. Enrollment increased by 5.4%. The liabilities of the District exceeded assets at the close of the fiscal year by $2,883,055 (net assets). Of this amount, $3,000,673 (unrestricted net assets) may be used to meet ongoing obligations to citizens and creditors, $16,291,865 is legally restricted, and a negative $22,175,593 is invested in capital assets, net of related debt. 3

8 Management's Discussion and Analysis Year Ended June 30,2011 As of June 30, 2011 the District's governmental funds reported combined ending fund balances of $20,008,562, a decrease of $7,268,532 in comparison with the prior year. Approximately 18% of the combined fund balances or $3,693,979 is unassigned, and 81 % or $16,291,865 is legally restricted. At the end of the fiscal year, unassigned fund balance for the general fund was $3,714,197 or 18.4% of total general fund expenditures. The District's total long-term debt increased by $10,566,715 in comparison with the prior year. This increase resulted primarily from the issuance of 2007 General Obligation Bond series C-1 of $2,887,486 and series C-2 of$9,910,000. OVERVIEW OF THE FINANCIAL STATEMENTS The full annual financial report is a product of three separate parts: the basic financial statements, supplementary information, and this section, Management Discussion and Analysis. The three sections together provide a comprehensive overview of the District. The basic financials are comprised of two kinds of statements that present financial information from different perspectives, government-wide and funds. Government-wide financial statements, which comprise the first two statements, the statement of net assets and the statement of activities, provide both short term and long-term information about the District's overall financial position. Individual parts of the District, which are reported as fund financial statements, focus on reporting the District's operations in more detail. These fund financial statements comprise the remaining statements. o o o Basic services funding (i.e., regular and special education) is described in the governmental funds statements. These statements include short-term financing and balance remaining for future spending. Normally, short and long-term financial information about the activities of the District that operate like businesses (such as food service or self-insurance funds) are provided in the proprietary funds statements. The District has no proprietary funds. Financial relationships, for which the District acts solely as an agent or trustee, for the benefit of others to whom the resources belong, are presented in the fiduciary fund statements. Notes to the financials, which are included in the financial statements, provide more detailed data and explain some of the information in the statements. The required supplementary information section provides further explanations and provides additional support for the financial statements. A comparison of the District's general fund's budget for the year is included. The combining fund statements are presented to show the individual fund data for each nonmajor governmental. 4

9 Management's Discussion and Analysis Year Ended June 30,2011 Management's Basic Required ~ I-- Discussion and Financial Statements Supplementary J I I I Government-wide Fund Notes to the Basic Financial Statements Financial Statements Financial Statements Government-wide Financial Statements The District as a whole is reported in the government-wide statements and uses accounting methods similar to those used by companies in the private sector. All of the District's assets and liabilities are included in the Statement of Net Assets. The Statement of Activities reports all of the current year's revenues and expenses regardless of when cash is received or paid. The District's financial health or position (net assets) can be measured by the difference between the District's assets and liabilities. Increases or decreases in the net assets of the District over time are indicators of whether its fmancial position is improving or deteriorating, respectively. Additional non-financial factors such as condition of school buildings and other facilities, and changes in the property tax base of the District, need to be considered in assessing the overall health of the District. The Statement of Net Assets and the Statement of Activities are normally divided into two kinds of activities: Governmental activities: The basic services provided by the District, such as regular and special education, administration, and transportation are included here. Property taxes and state formula aid finance most of these activities. Business-type activities: Business-type activities would charge fees to help cover the costs of certain services it provides. There are no business-type activities for the District. Fund Financial Statements More detailed information about the District's most significant funds ~ not the District as a whole ~ is provided in the fund fmancial statements. Funds are accounting devices the District uses to keep track of specific sources of funding and spending on particular programs: 5

10 Management's Discussion and Analysis Year Ended June 30, 2011 Some funds are required by bond covenants and by state law. Other funds are established by the District to control and manage money for particular purposes (such as repaying its long-term debts). Other funds may also show proper usage of certain revenues (such as federal grants). There are three kinds of funds: governmental, proprietary and fiduciary funds. The District maintains two kinds of funds, the governmental and fiduciary funds: Governmental funds: Most of the District's basic services are included in governmental funds, which generally focus on: 1. How cash and other financial assets can readily be converted to cash flow (in and out). 2. The balances left at year-end that are available for spending. A detailed short-term view is provided by the governmental fund statements. These help determine whether there are more or fewer financial resources that can be spent in the near future for financing the District's programs. Because this information does not encompass the additional long-term focus of the government-wide statements, additional information is provided at the bottom of the governmental fund statements that explain the differences (or relationships) between them. The District maintains several individual governmental funds organized according to their type (general, special revenue, capital projects, and debt service). Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the general, bond interest and redemption, and building funds, which are considered to be the major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. The District adopts an annual appropriated budget. The budget is a compilation of operating budgets from individual functional units within the general, special revenue, debt service, and capital projects fund. Budgets are adopted for all funds. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with the budget. Proprietary funds: The District has no proprietary funds. 6

11 Management's Discussion and Analysis Year Ended June 30, 2011 Fiduciary funds: For assets that belong to others, such as the retiree benefits fund, the District acts as the trustee, or fiduciary. The District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. A separate statement of fiduciary net assets and a statement of changes in fiduciary net assets reports the District's fiduciary activities. These activities are excluded from the government-wide financial statements, as the assets cannot be used by the District to finance its operations. GOVERNMENT -WIDE FINANCIAL ANALYSIS Net Assets Table l:net Assets Current and other assets Cash Investments Receivables Prepaid expenses Subtotal of current and other assets Capital assets, net Total assets Governmental Activities $17,768,045 4,351,107 1,024,254 23,143,406 38,764,864 61,908,270 $31,303, ,324 1,071, ,967 33,392,010 21,846,958 55,238,968 Percentage Change (43.2) (l00.0) (30.7) Accounts payable and other current liabilities Long-term debt outstanding Total liabilities 3,142,013 61,649,312 64,791,325 5,941,979 51,082,597 57,024,576 (47.1) Net assets Invested in capital assets, net of related debt Restricted Unrestricted ( 22,175,593) 16,291,865 3,000,673 ( 28,659,744) 1,722,656 25,151, (88.1 ) Total net assets ($ 2,883,055) ($ 1,185,(08) (61.5) The District's net assets decreased by $1,097,447 or 61.5% from the year before. Many factors contributed to the decline in financial position. Decrease in cash was due to the usage of bond funds for projects. Increase in receivable was due to deferred state principal apportionments. Increase in capital assets was due to the purchase of Hoover school and completion of bond fund projects. Increase in long-term debt was due to the issuance of Series C bonds. 7

12 Management's Discussion and Analysis Year Ended June 30, 2011 Changes in Net Asset The District's total revenues were $25,880,939. A slight increase of 4.4% from the prior year (see table 2). This change is manly due the increased federal & state aid. The total cost of all programs and services is $26,978,386. The District's expenses are predominantly related to educating and caring for students of $18,015,823 or 66.8% (see Table 4). The purely administrative activities of the District accounted for 6.6%, and plant services is 10.9% of the total costs, Table 2: Changes in Net Assets Governmental Activities Percentage Change Revenues Program revenues Operating grants and contributions $ 3,493,256 $ 3,646,291 ( 4.2) General revenues Taxes 14,671,095 19,239,532 (23.7) Federal & state aid 7,200,720 1,129, Interest and investment earnings 175, ,529 (3.7) Miscellaneous 340, ,902 ( 43.7) Total revenues 25,880,939 24,801, Expenses Instructi 0 n -re lated 18,015,823 17,816, General administration 1,771,749 1,788,006 (0.9) Plant services 2,949,406 3,429,633 ( 14.0) Other 4,241,408 3,498, Total expenses 26,978,386 26,532, Change in net assets ($ ) ($ 1.730,569) 36.6 Governmental Activities Revenues for the District's governmental activities are $25,880,939, while total expenses are $26,978,386. Total net assets decreased by $1,097,447. The recent changes of the District's finances can be credited to: Taxes decreased $4,568,437 or 23.7% due to assessed valuations of the County. Federal and state aid increased $6,070,999 or 537.4% due to State backfill of cuts due to decreased taxes. Plant services decreased $468,461 or 14.0% due to completion of bond projects in prior year. Other expenses increased $743,001 or 21.2% due to depreciation expense on completed construction projects. 8

13 Management's Discussion and Analysis Year Ended June 30, 2011 Table 3: Summary of Revenues for Governmental Functions FYE2011 Percent Increase (Decrease) Percent Increase Amount of Total from FYE 2010 (Decrease} Revenues Program revenues Operating grants and contributions $ 3,493, ($ 153,035) ( 4.2) General revenues Taxes 14,671, ( 4,568,437) ( 23.7) Federal & state aid 7,200, ,070, Interest and investment earnings 175, ( 6,783) ( 3.7) Miscellaneous 340,122 -Ll ( 263,780) ( 43.7) Total revenues $25,880, $1,078, Table 4: Summary of Expenses FYE 2011 Percent Increase (Decrease) Percent Increase Amount of Total from FYE 2010 (Decrease} Expenses Instruction-related $18,015, $ 199, General administration 1,771, ( 16,257) ( 0.9) Plant services 2,949, ( 480,227) (14.0) Other 4,241,408 ~ 743, Total expenses $26,218,386 lilllq $ 445, Table 5: Governmental Activities Percentage Percentage Total Cost of Services Change Net Cost of Services Change Instruction $14,674,397 $14,325, ($13,346,012) ($12,005,991) ( 11.2) Instruction-related 2,136,574 1,992, ( 1,973,135) ( 1,722,389) ( 14.6) Pupil services 1,204,852 1,498,546 (19.6) ( 596,192) ( 518,889) ( 14.9) General administration 1,771,749 1,788,006 (0.9) ( 1,719,746) ( 1,728,402) 0.5 Plant services 2,949,406 3,429,633 (14.0) ( 2,947,395) ( 3,422,973) 13.9 Other outgo 598,2 I 5 686,122 (12.8) 740,543 ( 675,324) Interest on long-term debt 2,383,835 1,564, ( 2,383,835) ( 1,564,937) ( 52.3) Depreciation 1,259,358 1,247, ( 1,259,358) ( 1,247,348) ( 1.0) Total $26,218,386 $26,532, ($23,485.13Q) ($22,886,253) ( 2.6) 9

14 Management's Discussion and Analysis Year Ended June 30,2011.FINANCIAL ANALYSIS OF THE DISTRICT'S FUNDS General Governmental Functions The District's governmental funds reported a combined fund balance of $20,008,562, which is less than last year's total of $27,277,094. Below is an analysis of the District's fund balances and the total change in fund balance from the prior year. Table 6: District's Fund Balances Major funds: General Bond Interest & Redemption Building Nonmajor funds: Special Revenue: Cafeteria Deferred Maintenance Burlingame Community for Education Capital Project: Capital Facilities County School Facilities Special Reserve Fund Balance $ 3,936,987 3,281,635 12,633,242 53, ,004 $ 3,597,411 3,861,376 18,415, ,060 10, ,760 59, Increase (Decrease )% 9.4 ( 15.0) ( 31.4) (100.0) (100.0) (82.0) (100.0) (100.0) Total $20,008,562 $21,21V224 ( 26.6) The change in fund balance in the General fund is primarily due to bond program expenditures, long-term debt payoff, and decreased State revenues. The change in fund balance in the Bond Interest & Redemption fund is primarily due to principal and interest payments. The change in fund balance in the Building fund is primarily due the usage for bond projects and the purchase of Hoover School and expenditures for school constructions. The change in fund balance in the Deferred Maintenance fund is primarily due prior year adjustment to move expenditures from building fund. The change in fund balance in Capital Facilities fund is primarily due to the usage for capital projects. The change in fund balance in Burlingame Community for Education fund is primarily due to decrease expenditures causing a larger ending balance. Two of the District's funds had more revenue than expenditures during the fiscal year (General Fund and Burlingame Community for Education Fund). 10

15 Management's Discussion and Analysis Year Ended June 30,2011 GENERAL FUND BUDGETARY IDGHLIGHTS The District amended its revenue estimates to reflect: increases in revenue limit state apportionment of $4,952,405, federal revenues of $514,397, other state revenues of $649,762, and other local revenue of $212,130; decrease in revenue limit local sources of $3,984,680. Carryovers from prior years were reflected and expended in FY The expenditure estimates were amended to reflect increases in salaries and benefit of $312,349, books and supplies of $397, 196, and services and other operating expenditures of $129,0 15. Settlement with the unions was reflected in the actual expenditures of a I % one time off schedule bonus, all employees received increased caps on health benefits are additional upgrades to the compensations. During the year, actual revenues were less than budgetary estimates by $120,902. Majority of this negative variance amount represents $111,901 in revenue limit local sources due to State reductions, and $407,252 in federal revenue due to Federal program reductions. The net effect of under-realization of revenues and under-utilization of expenditures resulted in a positive variance of$742,41 I (excluding other financing sources and uses). Capital Assets CAPITAL ASSET AND DEBT ADMINISTRATION The District's capital assets amounts to $38,764,864 (net of accumulated depreciation). This investment includes mainly land, buildings, improvements, equipment, and work in progress. The District's cost of capital assets increased $18,177,264 from the prior year. This increase is due mainly to the purchase of Hoover school and other constructions. Major capital asset events during the current fiscal year included the following: Hoover school purchase. Construction of new classroom buildings: 6 classrooms at Lincoln and 8 classrooms at McKinley. Classroom modernization projects at both Roosevelt and Washington. Installation of synthetic turf fields at both Franklin and BIS. For government-wide financial statement presentation, all depreciable capital assets were depreciated from acquisition date to the end of the current fiscal year. Fund financial statements record capital asset purchases as expenditures. Capital assets for the governmental activities are presented below to illustrate changes from the prior year: 11

16 Management's Discussion and Analysis Year Ended June 30, 2011 Table 7: Capital Assets Land Buildings Improvements Equipment Work in progress Total cost Long-Term Debt Governmental Activities $ 3,634,087 $ 827,578 27,531,442 25,467,542 2,254,501 2,254, , ,549 23,357,813 10,062,724 $51,248,158 $32,010,824 Percent Change The District has increased its long-term debt mainly due to the issuance of General Obligation Bonds, Series B. Table 8: Outstanding Long-term Debt School loan General obligation bonds (including premium & accreted interest) Compensated absences Net OPEB obligation Total District Total $ $ 545,179 60,940,457 49,961,523 77,811 80, , ,060 $61,642,312 $51,082,527 Percent Change (100.0) 22.0 (3.7) FACTORS BEARING ON THE DISTRICT'S FUTURE The State's economic prospect is a major factor affecting the District's future. The financial well being of the District is tied in large measure to the State funding formula. In October 2009, the District was classified as basic aid. The property taxes exceeded the revenue limit funding by approximately $450,000. Once again, the State is saddled with a large, multi-billion dollar deficit without a plan to address it. Depending on State actions, budgeting for could be a potential challenge to meet both revenue and expenditure goals. 12

17 Management's Discussion and Analysis Year Ended June 30, 2011 The District continued to receive support from the community through the parcel tax, Burlingame Community for Education (BCE) and the various parent organizations, such as PTA and Dads Club. Their generosity for the children of Burlingame has been instrumental in the District's ability to reach its financial and academic goals. API results from Spring 2011 testing revealed all Burlingame schools above the State goal of 800. The State's economic condition indicates a likely decline in the District's revenue limit funding, along with related budget reductions. The unpredictability of State budget woes and the response by the legislature will require management to plan carefully and prudently to provide the resources to meet student needs over the next several years. The District has an excellent track record in meeting this challenge in what has proven to be a cycle of lean and prosperous years for education finances. The year will undoubtedly be impacted by the State and Federal economies. The District anticipates other losses and reductions from revenues as the current economic climate continues to decline, be the District a revenue limit or basic aid district. The economic forecast for California's education does not look better until the year. The and school years will prove to be a challenge to accomplish the educational goals based on the volatility of funding. CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, parents, investors, and creditors with a general overview of the District's finances and to show the District's accountability for the money it receives. If you have questions regarding this report or need additional financial information, contact Dianne Talarico, Superintendent, or Dr. Robert Clark, Assistant Superintendent/Chief Business Official, Burlingame Elementary School District, 1825 Trousdale Dr., Burlingame, CA

18 Basic Financial Statements - Government-wide Financial Statements

19 Statement of Net Assets June 30,2011 Assets Cash in county treasury Cash on hand and in bank Cash in revolving fund Accounts receivable Due from grantor government Prepaid expenses Land Improvements Buildings Equipment Work in progress Less accumulated depreciation $ Governmental Activities 17,763,045 2,500 2,500 95,052 4,256,055 1,024,254 3,634,087 2,254,501 27,531, ,315 23,357,813 ( ,:294) Total Assets $ 61,908,270 Liabilities Accounts payable Accrued interest payable Due to grantor government Deferred revenue Long-tenn debt Due within one year General obligation bonds payable Compensated absences Total due within one year Due beyond one year General obligation bonds payable Net OPEB obligation Total due beyond one year $ 1,495,2 I 5 1,011, , ,021 1,404,2 I I 77,81 I 1,482,022 59,536, ,044 60,167,290 Total Liabilities $ 64,791,325 Net Assets Invested in capital assets, net of related debt Restricted Legally restricted Unrestricted $ (22,175,593) 16,291,865 3,000,673 Total Net Assets $ (2,883,055) The notes to the basic financial statements are an integral part of this statement. 14

20 Statement of Activities Year Ended June 30, 2011 Net (Expenses) Revenues and Program Changes in Revenues Net Assets Operating Grants and Governmental Functions/Programs Expenses Contributions Activities Governmental Activities Instruction $ 14,674,397 $ 1,328,385 $ (I J,346,0 12) Instruction-related services Pupil services 2,136,574 1,204, , ,660 ( ) (596,192) General administration Plant services 1,771,749 2,949,406 52,003 2,0 II (1,719,746) (2.947,395) Other outgo Interest on long-term debt 598,215 2,383,835 1,338, ,543 (2,383,835) Depreciation - unallocated 1,259,358 (1,259,358) Total Governmental Activities $ 26,978,386 $ 3,493,256 (23,485,130) General Revenues Taxes and subventions Taxes levied for general purposes Taxes levied for debt service Taxes levied for other specific purposes Federal and state aid not restricted for specific purposes Interest and investment earnings Miscellaneous 9,852,491 3,435,890 1,382,714 7,200, , ,122 Total General Revenues 22,387,683 Change in Net Assets (1.097,447) Net Assets, Beginning (],785,(08) Net Assets, Ending $ (2,883'(J55) The notes to the basic financial statements are an integral part of this statement. 15

21 Basic Financial Statements - Fund Financial Statements

22 Balance Sheet Governmental Funds June 30,2011 Bond Interest and Nonmajor General Redemption Building Governmental Fund Fund Fund Funds Total Assets Cash in county treasury $ 505,022 $ 3,272,978 $ 13,710,711 $ 274,334 $ 17,763,045 Cash on hand and in bank 2,500 2,500 Cash in revolving fund 2,500 2,500 Accounts receivable 12,343 8,657 38,526 35,526 95,052 Due from grantor government 4,248,107 7,948 4,256,055 Due from other funds 184,132 30, ,531 Prepaid expenses 20,218 20,218 Total Assets $ 4,952,104 $ 3,281,635 $ 13,749,237 $ 370,925 $ 22,353,901 Liabilities and Fund Balances Liabilities Accounts payable $ 349,125 $ $ 1,104,044 $ 42,046 $ 1,495,215 Due to grantor government 211, ,572 Due to other funds 30,399 11, , ,531 Deferred revenue 424, ,021 Total Liabilities 1,015,117 1,115, ,227 2,345,339 Fund Balances Nonspendable Revolving fund 2,500 2,500 Prepaid expenses 20,218 20,218 Restricted Legally Restricted Balance 220,290 3,281,635 12,633, ,698 16,291,865 Unassigned 3,714,197 (20.218) 3,693,979 Total Fund Balances 3,936,987 3,281,635 12,633, ,698 20,008,562 Total Liabilities and Fund Balances $ 4,952,104 $ 3,281,635 $ 13,749,237 $ 370,925 $ 22,353,901 The notes to the basic financial statements are an integral part of this statement. 16

23 Reconciliation of the Governmental Funds Balance Sheet to the Government-wide Statement of Net Assets - Governmental Activities June 30, 2011 Total fund balances - governmental funds $ 20,008,562 Capital assets used in governmental activities are not financial resources and, therefore, are not reported as assets in governmental funds. Cost Accumulated depreciation $ 57,248,158 ( ,294) 38,764,864 In governmental funds, debt issue costs are recognized as expenditures in the period they are incurred. In the government-wide statements, debt issue costs are amortized over the life of the debt. Unamortized debt issue costs are included in the prepaid expenses on the statement of net assets. Cost Accumulated amortization 1,114,302 (110,266) 1,004,036 To recognize accrued interest at year end. (1,011,205) Long-term liabilities are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities, at year-end consist of: General obligation bonds payable Compensated absences Net OPEB obligation 60,940,457 77, ,044 (61.649,312) Total net assets - governmental activities $ (2,883,055) The notes to the basic financial statements are an integral part of this statement 17

24 Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended June 30, 2011 Bond Interest and Nonmajor General Redemption Building Governmental Fund Fund Fund Funds Revenues Revenue limit sources State apportionments $ 5,030,978 $ $ $ Local sources 8,540,198 Revenue limit transfers 1,351,953 Total revenue limit 14,923,129 Federal 1,052, ,403 Other state 2,452,578 16,084 11,271 Other local 2,273,396 3,441, ,758 1,415,618 Total $ 5,030,978 8,540,198 1,351,953 14,923,129 1,199,132 2,479,933 7,278,745 Total Revenues 20,701,832 3,458, ,758 1,573,292 25,880,939 Expenditures Instruction 14,063, ,826 Instruction-related services 1,911, ,255 Pupil services 436, ,273 General administration 1,691,932 5,037 Plant services 1,569,607 19,548,329 2,500 Other outgo 558,090 Debt service: Principal 2,205, ,179 Interest 2,037,407 24,608 14,633,647 2,125,378 1,204,852 1,696,969 21,120, ,090 2,750,179 2,062,015 Total Expenditures 20,231,152 4,242,407 19,548,329 2,129,678 46,151,566 Excess (Deficiency) of Revenues Over (Under) Expenditures 470,680 ( ) ( 19,' ) ( ) (20, ) Other Financing Sources (Uses) Operating transfers in 63, ,104 Operating transfers out (131.1 (4) (63,858) Proceeds from long-term debt 204,609 12,797, ,962 ( 194,9(2) 13,002,095 Total Other Financing Sources (Uses) ( 131,104) 204,609 12,861,344 67,246 13,002,095 Net change in Fund Balance 339,576 ( ) ( ) ( ) ) Fund Balances, Beginning 3,597,411 3,861,376 18,415,630 1,402,677 27,277,094 Prior Year Adjustments 756, ,839) Fund Balances, Ending $ 3,936,987 $ 3,281,635 $ 12,633,242 $ 156,698 $ 20,008,562 The notes to the basic financial statements are an integral part of this statement. 18

25 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-wide Statement of Activities - Governmental Activities Year Ended June 30, 2011 Total net change in fund balances - governmental funds $ ) Capital outlays are reported in governmental funds 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 by which additions to capital outlay exceeds depreciation expense in the period: Capital outlay Depreciation expense $ 18,177,264 (U59.J5R) 16,917,906 The governmental funds report the effect of debt issue cost when the debt is first issued, whereas, these amounts are deferred and amortized in the statement of activities. The net effect of this difference is as follows: Amortization of bond issue costs (40.125) The governmental funds report debt proceeds as an other financing source, while repayment of debt principal is reported as an expenditure. Proceeds from long-term debt Amortization of bond premium (discount) Payment of school loan Payment of bonds payable (J 3.002J1(5) 14, ,179 2,205,000 ( ) In the statement of activities, compensated absences are measured by the amounts earned during the year. In governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially the amounts paid). This year vacation earned exceeded the amounts used by: 3,024 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds: Change in net OPEB obligation: (J 35.(84) Interest in long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. The difference between accrued interest at year end and prior year's is: ( ) Total change in net assets - governmental activities $ ( ) The notes to tlte basic financial statements are an integral part of this statement. 19

26 Statement of Fiduciary Net Assets Fiduciary Funds June 30, 2011 Expendable Trust Bob Osberg Henderson College Trust Scholarship Agency Funds Funds Funds Assets Cash in county treasury $ $ 20,81 I $ Cash on hand and in bank 10,247 44,029 Accounts receivable 67 Total assets $ 10,247 $ 20,878 $ 44,029 Total $ 20,81 I 54, $ 75,154 Liabilities Due to student group $ $ $ 44,029 Total Liabilities $ $ $ 44,029 $ 44,029 $ 44,029 Net assets Held in trust for trust beneficiaries $ 10,247 $ 20,878 $ Total Net Assets $ 10,247 $ 20,878 $ $ 31,125 $ 31,125 The notes to the basic financial statements are an integral part of this statement. 20

27 Statement of Changes in Fiduciary Net Assets Fiduciary Funds - Expendabble Trust Year Ended June 30, 2011 Bob Osberg Henderson College Trust Scholarship Funds Funds Additions Interest income $ 24 $ 254 Total $ 278 Deductions Financial assistance to students 2,500 2,500 Change in Net Assets 24 (2,246) (2.222) Net Assets, Beginning 10,223 23,124 33,347 Net Assets, Ending $ 10,247 $ 20,878 $ 31,125 The notes to the basic financial statement are an integral part of this statement. 21

28 Basic Financial Statements - Notes to the Basic Financial Statements

29 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES A. Accounting Policies The Burlingame School District (the "District") accounts for its financial transactions in accordance with the policies and procedures of the Department of Education's California School Accounting Manual. The accounting policies of the District conform to the accounting principles generally accepted in the United States of America (GAAP) as applied to local governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial principles. The District also applies Financial Accounting Standards board (F ASB) Statements and interpretations issued on or before November 30, 1989, to its governmental activities provided they do not conflict with or contradict GASB pronouncements. B. Reporting Entity The District includes all funds that are controlled by or dependent on the District's governing board for financial reporting purposes. The District has considered all potential component units in determining hoe to define the reporting entity, using criteria set forth in generally accepted accounting principles. The District determined that there are no potential component units that meet the criteria for inclusion within the reporting entity. C. Basis of Presentation Government-wide Financial Statements: The government-wide financial statements (i.e., the statement of net assets and the statement of changes in net assets) report information on all of the activities of the District. The government-wide statements are prepared using the economic resources measurement focus. This is the same approach used in the preparation of proprietary fund and fiduciary fund financial statements but differs from the manner in which governmental fund fmancial statements are prepared. Governmental fund financial statements, therefore, includes a reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for the governmental funds. 22

30 Notes to the Basic Financial Statements Year Ended June 30,2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued The government-wide 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 therefore clearly identifiable to a particular function. The District does not allocate indirect expenses to functions in the statement of activities. Program revenues include charges paid by the recipients of goods or services offered by a program, as well as grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues which are not classified as program revenues are presented as general revenues of the District, with certain exceptions. 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. Fund Financial Statements: Fund financial statements report detailed information about the District. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major governmental fund is presented in a separate column, and all nonmajor funds are aggregated into one column. Fiduciary funds are reported by fund type. The accounting and financial treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances for these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. All proprietary fund types are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the proprietary fund's statement of fund net assets. The statement of revenues, expenses, and changes in fund net assets for proprietary funds presents increases (i.e., revenues) and decreases (i.e., expenditures) in net total assets. The statement of cash flows provides information about how the district finances and meets the cash flow needs of its proprietary activities. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The District has no proprietary funds. Fiduciary funds are reported using the economic resources measurement focus. 23

31 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued D. Basis of Accounting Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use modified accrual basis of accounting. Proprietary and fiduciary funds use the accrual basis of accounting. Revenues - exchange and non-exchange transactions: Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded under the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. "Available" means the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the District, "available" means collectible within the current period or within 60 days after the yearend. Non-exchange transactions, in which the District receives value without directly giving equal value in return, include property taxes, grants, and entitlements. Under the accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and entitlements is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when resources are to be used or the fiscal year when use is first permitted; matching requirements, in which the District must provide local resources to be used for a specific purpose; and expenditures requirements, in which the resources are provided to the District on a reimbursement basis. Under the modified accrual basis, revenue from non-exchange transactions must also be available before it can be recognized. Deferred revenue: Deferred revenue arises when assets are received before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements are met are recorded as deferred revenue. On governmental fund financial statements, receivables associated with non-exchange transactions that will not be collected within the availability period have also been recorded as deferred revenue. 24

32 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued Expenses/expenditures: On the accrual basis of accounting, expenses are recognized at the time a liability is incurred. On the modified accrual basis of accounting, expenditures are generally recognized in the accounting period in which related fund liability is incurred, as under the accrual basis of accounting. However, under the modified accrual basis of accounting, debt service requirements, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Allocations of cost, such as depreciation and amortization, are not recognized in the 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. E. Fund Accounting The accounts of the District are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity or retained earnings, revenues, and expenditures or expenses, as appropriate. District resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The District's accounts are organized into major, nonmajor, and fiduciary funds as follows: Major Governmental Funds: The General Fund is the general operating fund of the District. It is used to account for all financial resources except for those required to be accounted for in another fund. The Bond Interest and Redemption Fund is used to account for District taxes received and expended to pay for bond interest and redeem bond principal and related costs on the district's bond obligations. The Building Fund is used to account for the proceeds of funds generated by the sale of the bond obligations. Expenditures are made from this fund for the purpose of financing school facility alterations, additions or improvements. 25

33 Notes to the Basic Financial Statements Year Ended June 30,2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued Nonmajor Governmental Funds: Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. The District maintains the following nonmajor special revenue funds: The Cafeteria Fund is used to account for revenues received and expenditures made to operate the District's cafeteria program. The Deferred Maintenance Fund is used for the purpose of major repair or replacement of district property. The Burlingame Community for Education Fund is used to account for contributions from the Burlingame Foundation to be used for specific program expenditures. Capital Projects Funds are used to account for the acquisition and construction of all major governmental general fixed assets. The District maintains the following nonmajor capital projects funds: The Capital Facilities Fund is used to account for resources received from developer impact fees assessed under provisions of the California Environmental Quality Act (CEQA). The County School Facilities Fund is used to receive state apportionments provided for construction and reconstruction of school facilities. The Special Reserve Fund for Capital Outlay Projects is used to account for the proceeds from sale of property and for major maintenance expenditures and capital outlay. Fiduciary Funds: Expendable Trust Funds are used to account for assets held by the District as Trustee. The District maintains the following expendable trust funds: The Henderson Trust is used to accumulate money donated to the District to provide bus passes for needy students of the District. The Bob Osberg College Scholarship Fund is used to provide college assistance to 8 th grade Burlingame Intermediate School students. 26

34 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued Agency Funds are used to account for assets of others for which the District acts as an agent. The District maintains student body funds, which are used to account for the raising and expending of money to promote the general welfare, morale, and educational experience of the student body. The District maintains six agency funds, one for each Student Body account. The amounts reported for student body funds represent the combined totals of all schools within the District. F. Budgets and Budgetary Accounting Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds. By state law, the District's governing body must adopt a final budget no later than July 1. A public hearing must be conducted to receive comments prior to adoption. The District's governing board satisfied these requirements. These budgets are revised by the District's governing board and District superintendent during the year to give consideration to unanticipated income and expenditures. The original and final revised budgets are presented for the General Fund and Major Special Revenue Fund as required supplementary information in the financial statements. The District employs budget control by minor object and by individual appropriation accounts. Expenditures cannot legally exceed appropriations by major object account. G. Accounting Estimates The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. H. Encumbrances Encumbrance accounting is used in all budgeted funds to reserve portions of applicable appropriations for which commitments have been made. Encumbrances are recorded for purchase orders, contracts, and other commitments when they are written. Encumbrances are liquidated when the commitments are paid. All encumbrances are liquidated as of June 30. I. Subsequent Events Management had evaluated the subsequent events through November 8, 20 II. 27

35 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued J. Assets, Liabilities, and Equity I. Deposits and Investments Cash balances held in banks are insured to $250,000 by the Federal Depository Insurance Corporation. In accordance with Education Code Section 41001, the District maintains substantially all of its cash and investments in the San Mateo County Treasury. The county pools these funds with those of other districts in the county and invests the cash. These pooled funds are carried at cost, which approximates market value. Interest earned is deposited quarterly into participating funds. Any investment losses are proportionately shared by all funds in the pool. The county is authorized to deposit cash and invest excess funds by California Government Code Section et seq. The funds maintained by the county are either secured by federal depository insurance or are collateralized. Information regarding the amount of dollars invested in derivatives with San Mateo County Treasury was not available. 2. Prepaid Expenditures The District has the option of reporting an expenditure in governmental funds for prepaid items either when purchased or during the benefiting period. The District has chosen to report the expenditure in the period it benefits. 28

36 Notes to the Basic Financial Statements Year Ended June 30,2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued 3. Capital Assets Capital assets are those purchased or acquired with an original cost of$5,000 or more and are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend the asset's lives are not capitalized, but are expensed as incurred. Depreciation on all capital assets is computed using a straight-line basis over the following estimated useful lives: Asset Class Land Site improvements School buildings Portable classrooms HVAC systems Roofing Interior construction Carpet replacement Electrical!Plumbing Sprinkler/fITe system Outdoor equipment Machinery & tools Kitchen equipment Custodial equipment Science & engineering Furniture & accessories Business machines Copiers Communication equipment Computer hardware Computer software Computer software Audio visual equipment Athletic equipment Musical instruments Library books Licensed vehicles Contractors equipment Grounds equipment Examples Paving, flagpoles, retaining walls, sidewalks, fencing, outdoor lighting Heating, ventilation and air conditions systems Fire suppression systems Playground, radio towers, fuel tanks, pumps Shop & maintenance equipment tools Appliances Floor scrubbers, vacuums, other Lab equipment, scientific apparatus Classroom & other furniture Fax, duplicating & printing equipment Mobile phones, portable radios, non-computerized PCs, printers, network hardware Instructional, other short-teno Administrative or long-teno Projectors, cameras (still & digital) Gymnastics, football, weight machines, wrestling mats Pianos, sting, brass, percussion Collections Buses, other on-road vehicles Major off-road vehicles, front-end loaders, large tractors, mobile air compressor Mowers, tractor, attachments Estimated Useful Life in Years N/A to to to

37 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued 4. Deferred Revenue Cash received for federal and state special projects and programs is recognized as revenue to the extent that qualified expenditures have been incurred. Deferred revenue is recorded to the extent cash received on specific projects and programs exceed qualified expenditures. 5. Compensated Absences All vacation pay plus related payroll taxes is accrued when incurred in the governmentwide financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Accumulated sick leave benefits are not recognized as liabilities of the District. The District's policy is to record sick leave as an operating expense in the period taken since such benefits do not vest nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits when the employee retires. 6. Long-Term Debt In the government-wide financial statements, long-term debt and other long-term obligation are reported as liabilities in the Statement of Net Assets. Bond issuance costs are reported as prepaid expenditures and amortized over the term of the related debt. In the fund financial statements, governmental fund recognized bond issuance costs during the current period. The face amount of the debt issued is reported as other financing sources/uses. 7. Net Assets In the government-wide fmancial statements, net assets are classifies in the following categories: Invested in Capital Assets, Net of Related Debt - This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets. Restricted Net Assets - This amount is restricted by external creditors, grantors, contributors, laws or regulations of other governments. Unrestricted Net Assets - This amount is all net assets that do not meet the definition of "invested in capital assets, net related debt" or "restricted net assets." 30

38 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES - Continued 8. Fund Balance Governmental funds report fund balances in classifications based primarily on the extent to which the District is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balance for governmental funds can consist of the following: Nonspendable Fund Balance - includes amounts that are (a) not in spendable fonn~such as inventory, prepaid amounts or long-tenn notes receivable, or (b) legally or contractually required to be maintained intact~such as a trust that must be retained in perpetuity. The "not in spendable fonn" criterion includes items that are expected to be converted to cash. Restricted Fund Balance ~ constraints placed on the use of resources are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. Restriction may effectively be changed or lifted only with the consent of resource providers. Committed Fund Balance ~ amounts that can be used only be used for the specific purposes detennined by a fonnal action of the District's highest level of decision-making authority, the Board. Commitments may be changed or lifted by the District taking the same fonnal action that imposed the constraint originally. Assigned Fund Balance ~ comprises amounts intended to be used by the District for specific purposes that are neither restricted nor committed. Intent is expressed by (a) the District's Board or (b) Superintendent or designee whom the District's Board has delegated the authority to assign, modify, rescind amounts to be used for specific purposes. With the exception of the General Fund, this is the residual fund balance classification for all governmental funds with positive balances. Unassigned Fund Balance ~ the residual classification for the General Fund. It is also used to report negative fund balance in other governmental funds. In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is generally depleted in the order of restricted, committed, assigned, and unassigned. 31

39 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued 9. Revenue LimitlProperty Tax The District's revenue limit is received from a combination of local property taxes, state apportionments, and other local sources. The county is responsible for assessing, collecting, and apportioning property taxes. Taxes are levied for each fiscal year on taxable real and personal property in the county. The levy is based on the assessed values as of the preceding March 1, which is also the lien date. Property taxes on the secured roll are due on November 1 and February I, and taxes become delinquent after December 10 and April 10, respectively. Property taxes on the unsecured roll are due on the lien date (March I), and become delinquent if unpaid by August 31. Secured property taxes are recorded as revenue when apportioned, in the fiscal year of the levy. The county apportions secured property tax revenue in accordance with the alternate method of distribution prescribed Section 4705 of the California Revenue and Taxation Code. This alternate method provides for crediting each applicable fund with its total secured taxes upon completion of the secured tax roll - approximately October 1 of each year. The County Auditor reports the amount of the District's allocated property tax revenue to the California Department of Education. Property taxes are recorded as local revenue limit sources by the District. The California Department of Education reduces the District's entitlement by the District's local property tax revenue. The balance is paid from the state General Fund, and is known as the State Apportionment. The District's base revenue limit is the amount general purpose tax revenue, per average daily attendance (ADA), that the District is entitled to by law. This amount is multiplied by the second period ADA to derive the District's total entitlement. 32

40 Notes to the Basic Financial Statements Year Ended June 30,2011 NOTE 2. CASH AND INVESTMENTS The District had the following cash at June 30, 2011: Governmental activities Cash in county treasury Cash on hand and in bank Cash in revolving fund Fiduciary funds Cash in county treasury Cash on hand and in bank Total Cash Canying Amount Fair Value $17,763,045 $17,766,988 2,500 2,500 2,500 2,500 20,811 54,276 20,816 54,276 $17, $17,847,080 A. Cash on Hand, in Banks, and in Revolving Fund As of June 30, 20 II, the District's cash on hand and in banks is $2,500 and in revolving fund is $2,500. These accounts are held within various financial institutions. B. Cash in County Treasury In accordance with Education Code Section 41001, the District maintains substantially all of its cash in the San Mateo County Treasury as part of the common investment pool ($914,681,623 as of June 30,2011). The fair market value of this pool as of that date, as provided by the pool sponsor, was $914,884,682. The District is considered to be an involuntary participant in the external investment pool. Interest is deposited into participating funds. The County is restricted by Government Code Section 53635, pursuant to Section 53601, to invest in time deposits, u.s. government securities, state registered warrants, notes or bonds, State Treasurer's investment pool, bankers' acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements. 33

41 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 3. RECEIVABLES Accounts receivable and due from grantor government as of June 30, 2011, consists of the following: Governmental Funds Fiduciary Fund Bond Interest Nonmajor Bob Osberg and Govern- College General Redemption Building mental Scholar-ship Fund Fund Fund Funds Total Fund Federal sources: Categorical aid program $369,918 $ - $ $6,332 $ 376,250 $ -, State sources: Revenue limit 796, ,495 Categorical aid program 2,563, ,563,943 Lottery 132, ,889 Other 229, ,092 Local sources: Local government 146, ,789 Interest 9,443 8,657 38, , Miscellaneous 12, ,835 48,178 - ~ Total Receivable $1,260,450 $~ $~ $~ $ $61 NOTE 4. INTERFUND TRANSACTIONS Interfund transactions are reported as either loans, services provided, reimbursements, or transfers. Loans are reported as interfund receivables and payables, as appropriate, and are subject to elimination upon consolidation. Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers among governmental or proprietary funds are netted as part of the reconciliation to the government-wide financial statements. 34

42 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 4. INTERFUND TRANSACTIONS - continued A. Interfund ReceivableslPayables (Due FromJDue To) As of June 30, 20 II, interfund receivables and payables were as follows: Major Governmental funds: General fund Building fund Nonmajor Governmental fund: Special Revenue funds: Cafeteria fund Burlingame community for education fund Interfund Receivable $ 184,132 30,399 Interfund Payabk $ 30,399 11,951 19, ,162 Total $214,531 $214,531 B. Interfund Transfers Interfund transfers consist of operating transfers from funds receiving revenue to funds through which the resources are to be expended. Interfund transfers for fiscal year 20 I 0-20 II were as follows: Fund Transfers In Transfers Out Major Governmental funds: General fund $ $131,104 Building fund 63,858 Nonmajor Governmental Funds: Special Revenue Fund: Cafeteria fund 131, 104 Deferred maintenance fund 3,505 Capital Project Fund: Special reserve fund 282 County school facilities fund 60,071 Total $194,962 $194,962 35

43 Notes to the Basic Financial Statements Year Ended June 30,2011 NOTE 5. CAPITAL ASSETS AND DEPRECIATION Capital asset activity for the year ended June 30, 2011, is shown below: Balance Additions/ July 1,2010 Adjustments Capital assets, not being depreciated: Land $ 827,578 $ 2,806,509 Work in progress 10,062,724 13,295,089 Total capital assets, not being depreciated 10,890,302 16,101,598 Capital assets, being depreciated: Buildings 25,467,542 2,063,900 Improvements of sites 2,254,501 Equipment 458,549 11,766 Total capital assets, being depreciated 28,180,592 2,075,666 Less accumulated depreciation for: Buildings 15,493,199 1,156,552 Improvements of sites 1,363,581 77,777 Equipment 367,156 25,029 Total accumulated depreciation 17,223,936 1,259,358 Total capital assets, being depreciated, net 10,956, ,308 Governmental activities capital assets, net $21,846,258 $ Q6 Balance Deletions June 30, 2011 $ - $ 3,634, ,357,813 ~ - 26,991,900 27,531,442 2,254, ,315 ~ ,256,258 16,649,751 1,441, , ,483, ,772,964 $-=--... $38,164,864 In October 2010, District purchased Hoover School to meet the growing enrollment in the Burlingame School District. The total price for the school is $4,850,000. Hoover is expected to be opened as a school in either the fall of or

44 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 6. GENERAL OBLIGATION BONDS PAYABLE The outstanding general obligation bonded debt of the Burlingame School District at June 30,2011 is: Interest Rate % Maturity Date Amount of Outstanding Outstanding Original July I, June 30, Issue A 2007 B 2007 C-l 2007 C Premium 4.5 Premium Premium Accreted interest $12,335,000 $ 8,215,000 $ 7,565,000 6,885,000 5,865,000 5,610,000 18,300,000 17,575,000 16,275, , , ,751 17,200,000 17,200,000 17,200, , , ,077 2,887,486 2,887, , ,755 10,572,514 36,388 9,910,000 9,910,000 Totals $12,636,712 $42,261,523 $6Q,24Q,457 During November of 2000 the District issued General Obligation Refunding Bonds in the amount of $12,335,000. The Bonds were sold for the purpose of advance refunding the District's 1993 General Obligation Bonds and financing specific capital project. The Bonds represent a general obligation of the District. The Board of Supervisors of the County has power and is obligated to annually levy ad valorem taxes for the payment of the Bonds and the interest thereon upon all property within the District subject to taxation by the District without limitation of rate or amount (except certain personal property which is taxable at limited interest rates). The annual requirements to amortize the bonds outstanding as of June 30, 2011, are as follows: Year Ended June 30 Principal Interest Total 2012 $ 685,000 $ 379,181 $ 1,064, , ,906 1,076, , ,875 1,091, , ,956 1,103, , ,756 1,127, ,595, ,619 3,946,619 Totals $1,565,QQQ $1,846,223 $2,411,223 37

45 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 6. GENERAL OBLIGATION BONDS PAYABLE - Continued In March 2004, the District issued General Obligation Refunding Bonds in the amount of $6,885,000. The Bonds were issued by the for the purpose of refunding the District's General Obligation Bonds, 1997 Election, dated May 1, 1997, in the principal amount of $6,000,000, of which $5,955,000 was outstanding and to pay for costs of issuance of the Bonds. The proceeds of the prior bonds were used for authorized school purposes. The annual requirements to amortize bonds outstanding as of June 30, 2011, are as follows: Year Ended June 30 Principal Interest Total 2012 $ 280,000 $ 219,845 $ 499, , , , , , , , , , , , , ,045, ,020 3,597, ,000 19, ,505 Totals $5,610,000 $1,534,360 $1,144,360 November 6, 2007, the district was authorized the issuance and sale of $48,300,000 principal amount of general obligation bonds of the District. The bonds are issued to finance the costs of renovating, acquiring, constructing, repairing and equipping of the District facilities and to pay the cost of issuance associate with the Bonds. The Bonds are general obligation of the District payable solely from the proceeds of ad valorem taxes. In April 2008, the District issued 2007 General Obligation Bonds, Series A in the amount of $18,300,000. Interest payments on the Bonds will be made semiannually on February 1 and August 1 of each year, commencing February 1, The annual requirements to amortize bonds outstanding as of June 30, 2011, are as follows: Year Ended June 3 Principal Interest $ 65,000 2,730,000 8,160,000 5,320,000 $ 809, , , , ,012 4,043,697 3,809,463 2,548, ,500 $ 809, , , , ,012 4,108,697 6,539,463 10,708,069 5,594,500 Totals $16,275,000 $14,720,191 $30, Bond Premium as ofjune 30, ,751 Book Balance $16,699,751 38

46 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 6. GENERAL OBLIGATION BONDS PAYABLE - Continued In May 20 I 0, the District issued 2007 General Obligation Bonds, Series B in the amount of $17,200,000. Interest payments on the Bonds will be made semiannually on February 1 and August 1 of each year, commencing February 1,2011. The annual requirements to amortize bonds outstanding as of June 30,2011, are as follows: Year Ended June 30 Principal Interest $ 375, ,000 2,220,000 3,030,000 2,795,000 8,625,000 $ 847, , , , ,175 3,597,925 2,999,275 2,377,563 1,124,662 $ 1,222, , , , ,175 5,817,925 6,029,275 5,172,563 9,749,662 Totals 17,200,000 $14,008,828 $31,208,828 Bond Premium as of June 30, ,077 Book Balance $17,834,077 In April 2011, the District issued 2007 General Obligation Bonds, Series C-l (Tax Exempt) in the amount of $2,887,286. The bonds are issued as capital appreciation bonds, payable only at maturity on August 1 of the years indicated in the table below, and interest is compounded semiannually on February I and August I of each year, commencing August I, The annual requirements to amortize bonds outstanding as of June 30,2011, are as follows: Year Ended June 30 Principal Accreted Interest Total $ 108,169 $ 106,831 $ 215, ,394,473 2,855,527 4,250, ,384,844 7,610,156 8,995,000 Totals 2,887,486 10,572,514 $13.460,000 Unaccreted Interest (l 0,536, 126) Accreted Interest as of June 30, 20 II 36,388 $ 36,388 Bond Premium as of June 30, 20 II 400,508 Book Balance $3,324,382 39

47 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 6. GENERAL OBLIGATION BONDS PAYABLE -Continued In April 2011, the District issued 2007 General Obligation Bonds, Series C-2 in the amount of $9,910,000. The Series C-2 Bonds are being designated as "Qualified School Construction Bond" for the purpose of the American Recovery and Reinvestment Act of With Interest payments on these Bonds will be made semiannually on February 1 and August 1 of each year, commencing February 1, The annual requirements to amortize bonds outstanding as ofjune 30, 2011, are as follows: Year Ended June 30 Principal Interest $ 5,975,000 3,935,000 $ 363, , , , ,643 2,443, ,397 $ 363, , , , ,643 8,418,457 4,557,397 Totals 9,910,000 $5, $15,718,155 Bond Premium as of June 30, ,755 Book Balance $10,307,755 NOTE 7. SCHOOL LOAN During fiscal year ended June 30, 1997, the District issued $1,000,000 of Certificates of Participation. The issue was part of the 1996 Series A issued through the Kern County Superintendent of Schools. In November 2003, the District entered into a Sublease/Option Agreement with the Public Property Financing Corporation to refinance the $773,129 of remaining principal balance. The District paid off the remaining balance in May

48 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 8. LONG-TERM DEBT - SCHEDULE OF CHANGES A schedule of changes in long-tenn debt for the year ended June 30, 20 11, is shown below: Balance Balance Due within Due beyond July 1,2010 Additions Deductions June 30, 2011 one year one year General obligation bonds payable $48,855,000 $ 12,797,486 $2,205,000 $59,447,486 $1,340,000 $58,107,486 Accreted interest payable 36,388 36,388 36,388 Bond premium payable 1,106, ,508 50,448 1,456,583 64,211 1,392,372 Compensated absences 80,835 3,024 77,81 I 77,811 School Loan 545, ,179 Net OPEB obligation 495, , , ,044 Totals $51,Q82,521 $13,310,366 $2,803,651 $61 642,312 $ $60, Accrued vacation will be paid by the General Fund. Payments on the general obligation bonds are made by the Bond Interest and Redemption Fund with local revenues. Payments on the school loan are made by the Capital Facilities Fund from local revenues. NOTE 9. JOINT VENTURES (Joint Powers Agreements) The Burlingame School District participates in one joint venture under a Joint Powers Agreements (JPAs) with the San Mateo County Schools Insurance Group. The relationship between the Burlingame School District and the JPA is such that the JPA is not a component unit of the Burlingame School District for financial reporting purposes. The San Mateo County Schools Insurance Group (SMCSIG) arranges for and provides property, workers compensation, medical, and liability insurance for its member school districts. The SMCSIG is governed by a board consisting of a representative from each member district. The board controls the operations of the SMCSIG, including selection of management and approval of operating budgets, independent of any influence by the member districts beyond their representation on the board. Each member district pays a premium commensurate with the level of coverage requested and shares surpluses and deficits proportionate to their participation in the SMCSIG. The condensed audited financial infonnation on the SMCSIG as of June 30, 201 I IS as follows: Total Assets Total Liabilities Fund Balance Total Revenue Total Expenditure Net decrease in fund balance $ 12,966, I 79 6,403,177 6,563,002 31,945,163 31,959,454 (14,291) 41

49 Notes to the Basic Financial Statements Year Ended June 30,2011 NOTE 10. COMMITMENTS AND CONTINGENCIES A. State and Federal Allowances, Awards, and Grants The District has received state and federal funds for specific purposes that are subject to review and audit by the grantor agencies. If the review or audit discloses exceptions, the District may incur a liability to grantor agencies. B. Litigation Some claims and litigation involving the District are currently outstanding. Management of the District believes, base upon consultation with legal counsel, that the ultimate resolution of these matters will not have a material adverse effect on the district's financial position or results of operations. NOTE 11. EMPLOYEE RETIREMENT SYSTEMS Qualified employees are covered under multiple-employer defined benefit pension plans maintained by agencies of the State of California. Classified employees are members of the California Public Employees' Retirement System (CaIPERS), and certificated employees are members of the State Teachers' Retirement System (STRS). CalPERS Plan Description: The District contributes to the School Employer Pool under the California Public Employees' Retirement System (CalPERS), a cost-sharing multipleemployer public employee retirement system defined benefit pension plan administered by CaIPERS. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by the state statutes, as legislatively amended, within the Public Employees' Retirement Law. CalPERS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office at 400 P Street, Sacramento, CA Funding Policy: Active plan members are required to contribute 7% of their salary (7% of monthly salary over $ if the member participates in Social Security), and the District is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the CalPERS Board of Administration. The required employer contribution rate for fiscal year20 I 0-20 II was 9.428% of annual payroll. The contribution requirements of the plan members are established by state statute. The District's contributions to CalPERS for the fiscal years ending June 30, 2011, 2010, and 2009 were $282,547, $247,966, and $240,973, respectively, and equal to 100% of the required contributions for each year. 42

50 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 11. EMPLOYEE RETIREMENT SYSTEMS - continued STRS Plan Description: The District contributes to the State Teachers' Retirement System (STRS), a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by STRS. The plan provides retirement, disability, and survivor benefits to beneficiaries. Benefit provisions are established state statutes, as legislatively amended, within the State Teachers' Retirement Law. STRS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the STRS annual financial report may be obtained from STRS, 7667 Folsom Boulevard, Sacramento, CA Funding Policy: Active plan members are required to contribute 8% of their salary and the District is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the STRS Teachers' Retirement Board. The required employer contribution rate for fiscal year was 8.25% of annual payroll. The contribution requirements of the plan members are established by state statute. The District's contributions to STRS for the fiscal year ending June 30, 2011, 2010, and 2009, were $891,854, $859,060, and $827,338, respectively, and equal to 100% of the required contributions for each year. Social Security As established by Federal law, all public sector employees who are not members of their employer's existing retirement system (STRS or PERS) must be covered by social security or an alternative plan. The District uses Social Security and California Public Employees' Retirement System or the State Teachers' Retirement System's alternative. This plan is the Cash Balance Benefit Program, into which the District contributes 4% of the employee's salary. On Behalf Payment The State of California makes contributions to STRS and PERS on behalf of the District. These payments consist of State General Fund contributions to STRS and contributions to PERS for the year ended June 30, Under accounting principles generally accepted in the United States of America, these amounts are to be reported as revenues and expenditures; however, guidance received from the California Department of Education advises local education agencies not to record these amounts in the Annual Financial and Budget Report. These amounts also have not been recorded in these financial statements. 43

51 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 12. NET OPEB OBLIGATION In addition to the pension benefits described above, the District has entered into agreements with former employees to provide health and welfare benefits for all employees who retire from the District on or after attaining the age of 55 with at least 15 years of service. On June 30, 2011, 20 retirees met these eligibility requirements. Classified retirees, who retire after July 1, 1977, receive benefits for six years or until they reach the age of 65, whichever comes first. Certificated retirees who retired before 1989 receive benefits until they reach age 65. Certificated employees who retired after 1989 receive benefits until they reach the age of 70. However, a contract signed January 10, 1994 now limits the maximum age for certificated employees to 65. The District paid $100,746 for 19 eligible retirees for the fiscal year ended June 30, The District has not contributed irrevocably to a separate trust for the retiree benefit plan and funds the benefits on a "pay-as-you-go" basis. As of June 30, 2011, the long-term liability reflected on the Statement of Net Asset is $631,044 which is based on the actuarial study. The actuarial valuation of the postretirement welfare benefits is available directly from the District. Based on the latest actuarial valuation as of July 1,2010 (valuation date), the District's post employment benefits other than pension program is as follows: Actuarial method Entry age normal Interest rate assumption 5% Projected salary increase assumption 3% Health inflation assumption 4% Actuarially required contributions year beginning July 1, 201O Normal cost $ 100,746 Unfunded actuarial accrued liability amortization $ 135,984 Actuarial accrued liability as of July 1, 201O $2,066,331 Percentage Increase Fiscal Annual Contributions of Annual in Net Beginning Ending year Required during the OPEB Cost OPEB NetOPEB Net OPEB ending contribution year contributed Obligation Obligation Obligation 6/30/2009 $235,349 $86,347 37% $149,002 $205,877 $354, /2010 $239,120 $98,939 41% $140,181 $354,879 $495,060 6/30/2011 $236,730 $100,746 42% $135,984 $495,060 $631,044 44

52 Notes to the Basic Financial Statements Year Ended June 30, 2011 NOTE 13. EARYLY RETIREMENT INCENTIVE PROGRAM The District has not adopted an early retirement incentive program, pursuant to Education Code Section and 44929, whereby the service credit to eligible employees is increase by two years. NOTE 14. SIGNIFICANT CONTRIBUTIONS The District receives annual revenues from a voter approved parcel tax which expires in The parcel tax revenue for was $1,382,714. A nonprofit public benefit corporation provides financial support to the District. The support is to supplement the resources available to the District. Foundation payments to the District during were $825,000. NOTE 15. PRIOR YEAR ADJUSTMENTS Adjustment of $756,839 moved fund balance from Deferred Maintenance Fund to Building Fund. This adjustment is to reverse the expenditures transfer made by the District. 45

53 Required Supplementary Information (other than MD&A)

54 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual General Fund Year Ended June 30,2011 Revenues Budgeted Amounts Variance with Final Budget Positive - Original Final Actual (Negative) Revenue limit sources State apportionments $ 30,303 $ 4,982,708 $ 5,030,978 $ 48,270 Local sources 12,636,779 8,652,099 8,540,198 (11 1,90]) Revenue limit transfers 1,188,594 ],188,011 1,351, ,942 Total revenue limit 13,855,676 14,822,818 14,923, ,311 Federal 945,584 1,459,981 1,052,729 (407,252) Other state 1,765,937 2,415,699 2,452,578 36,879 Other local 1,912,106 2,124,236 2,273, ,160 Total Revenues 18,479,303 20,822,734 20,701,832 ( 120.9(2) Expenditures Certificated salaries 10,178,030 ]0,419,115 10,359,437 59,678 Classified salaries 2,704,655 2,713,003 2,659,621 53,382 Employee benefits 3,462,169 3,525,085 3,146, ,427 Books and supplies 581, , , ,455 Services and other operating expenditures 2,587,693 2,716,708 2,971,804 ( 255,()96) Capita] outlay 6,000 2,500 12,177 (9,677) Other outgo 632, , , ,144 Total Expenditures 20,152,741 21,094,465 20,231, ,313 Excess (Deficiency) of Revenues Over (Under) Expenditures ( ) (271,731 ) 470, ,411 Other Financing Sources (Uses) Operating transfers out ( ) (131,104) Total Other Financing Sources (Uses) ( ) ( 131,104) Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses ( 1.673,438) (271,731) 339, ,307 Fund Balances, Beginning 3,597,411 3,597,411 3,597,411 Fund Balances, Ending $ 1,923,973 $ 3,325,680 $ 3,936,987 $ 611,307 46

55 Schedule of Funding Progress Year Ended June 30, 2011 (a) (b) (a)-(b) (b)/(a) (c) [(a)-(b)]/(c) Unfunded Actuarial Actuarial Actuarial Actuarial Accrued Value of Accrued Annual UAALas a Valuation Liability Assets Liability Funded Covered %of Date (AAL) (AVA) (UAAL) Ratios Payroll Payroll Other Postemployment Benefits: 7/1/10 $2,066,331 $ -. $2,066,331 0% $13,019,058 16% 47

56 Combining Fund Statements

57 Combining Balance Sheet Nonmajor Governmental Funds June 30, 2011 Special Capital Revenue Projects Assets Cash in county treasury $ 205,847 $ 68,487 Cash on hand and in bank 2,500 Accounts receivable 1,009 34,517 Due from grantor government 7,948 Due from other funds 30,399 Prepaid expenses 20,218 Total $ 274,334 2,500 35,526 7,948 30,399 20,218 Total Assets $ 267,921 $ 103,004 $ 370,925 Liabilities and Fund Balances Liabilities Accounts payable $ 42,046 $ Due to other funds 172,181 $ 42, ,181 Total Liabilities 214, ,227 Fund Balances N onspendab Ie Prepaid expenses 20,218 Restricted Legally Restricted Balance 53, ,004 Unassigned (20218) 20, ,698 (20218) Total Fund Balances 53, , ,698 Total Liabilities and Fund Balances $ 267,921 $ 103,004 $ 370,925 48

58 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds (By Object) Year Ended June 30, 2011 Special Capital Revenue Projects Total Revenues Federal $ 146,403 $ $ 146,403 Other state 11,271 11,271 Other local 1,310, ,578 1,415,618 Total Revenues 1,467, ,578 1,573,292 Expenditures Certificated salaries 581, ,572 Classified salaries 94,328 94,328 Employee benefits 154, ,971 Books and supplies (3A8l) (3,481) Services and other operating expenditures 724,964 5, ,001 Capital outlay 2,500 2,500 Debt service 569, ,787 Total Expenditures 1,554, ,824 2,129,678 Excess (Deficiency) of Revenues Over (Under) Expenditures (87.1 4O) (469246) (556,386) Other Financing Sources (Uses) Operating transfers in 13 1, ,104 Operating transfers out (3.505) (60.353) (63,858) Total Other Financing Sources (Uses) 127,599 ( ) 67,246 Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses 40,459 ( ) (489,140) Fund Balances, Beginning 770, ,603 1,402,677 Prior Year Adjustments ( ) (756,839) Fund Balances, Ending $ 53,694 $ 103,004 $ 156,698 49

59 Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2011 Burlingame Community Deferred Cafeteria for Education Maintenance Fund Fund Fund Assets Cash in county treasury $ $ 205,847 $ Cash on hand and in bank 2,500 Accounts receivable 1,009 Due from grantor government 7,948 Due from other funds 30,399 Prepaid expenses 20,218 Total $ 205,847 2,500 1,009 7,948 30,399 20,218 Total Assets $ 61,065 $ 206,856 $ $ 267,921 Liabilities and Fund Balances Liabilities Accounts payable $ 42,046 $ $ Due to other funds 19, ,162 $ 42, ,181 Total Liabilities 61, , ,227 Fund Balances Nonspendable Prepaid expenses 20,218 Restricted Legally Restricted Balance 53,694 Unassigned (20.218) 20,218 53,694 (20.218) Total Fund Balances 53,694 53,694 Total Liabilities and Fund Balances $ 61,065 $ 206,856 $ $ 267,921 50

60 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds (By Object) Year Ended June 30, 2011 Burlingame Community Deferred Cafeteria for Education Maintenance Funds Fund Fund Total Revenues Federal $ 146,403 $ $ $ 146,403 Other state 11,271 11,271 Other local 479, ,527 1,284 1,310,040 Total Revenues 636, ,527 1,284 1,467,714 Expenditures Certificated salaries 581, ,572 Classified salaries 44,073 50,255 94,328 Employee benefits 14, , ,971 Books and supplies (13,809) 10,328 (3.481 ) Services and other operating expenditures 723,428 1, ,964 Capital outlay 2,500 2,500 Total Expenditures 768, ,581 1,554,854 Excess (Deficiency) of Revenues Over (Under) Expenditures (131,370) 42,946 1,284 (87,140) Other Financing Sources (Uses) Operating transfers in 131, ,104 Operating transfers out (3,505) (3,505) Total Other Financing Sources (Uses) 131,104 (3.505) 127,599 Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses (266) 42,946 (2,221 ) 40,459 Fund Balances, Beginning , , ,074 Prior Year Adjustments (756,839) (756,839) Fund Balances, Adjusted Beginning ,748 2,221 13,235 Fund Balances, Ending $ $ 53,694 $ $ 53,694 51

61 Combining Balance Sheet Nonmajor Capital Projects Funds June 30,2011 County Capital School Special Facilities Facilities Reserve Fund Fund Fund Assets Cash in county treasury $ 68,487 $ $ Accounts receivable 34,517 Total $ 68,487 34,517 Total Assets $ 103,004 $ $ $ 103,004 Liabilities and Fund Balances Total Liabilities $ $ $ $ Fund Balances Restricted Legally Restricted Balance 103, ,004 Total Fund Balances 103, ,004 Total Liabilities and Fund Balances $ 103,004 $ $ $ 103,004 52

62 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Capital Projects Funds (By Object) Year Ended June 30, 2011 County Capital School Special Facilities Facilities Reserve Fund Fund Fund Total Revenues Other local $ 105,068 $ 507 $ 3 $ 105,578 Total Revenues 105, ,578 Expenditures Services and other operating expenditures 5,037 5,037 Debt service 569, ,787 Total Expenditures 574, ,824 Excess (Deficiency) of Revenues Over (Under) Expenditures (469,756) (469,246) Other Financing Sources (Uses) Operating transfers out (60,071) (282) (60,353) Total Other Financing Sources (Uses) (60,071 ) (282) (60.353) Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Uses (469,756) (59,564) (279) (529,599) Fund Balances, Beginning 572,760 59, ,603 Fund Balances, Ending $ 103,004 $ $ $ 103,004 53

63 Supplementary Information Section