Comprehensive Annual Financial Report Ending June 2011

Fayette County Board of Education
Management's Discussion and Analysis
June 30, 2011
The Statement of Activities presents information showing how the School System's net assets
changed during the current fiscal year. All of the current year's revenues and expenses are accounted
for in the Statement of Activities, regardless of when cash is received or paid. Therefore, some
revenues and expenses are reported here that will only result in cash flows in future years, such as
uncollected property taxes and earned but unused vacation leave. Additionally, this statement shows
how much of the School System's activities are funded by program revenue (charges for services,
State funding, grants and contributions) and how much of the School System's functions rely on
general revenues (primarily taxes) for funding.
Fund Finamial StatementJ
Traditional users of governmental financial statements will fmd the fund fmancial statements
presentation more familiar. A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The Fayette County
School System, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All funds of the School System can
be divided into three categories: governmental funds, proprietary funds and fiduciary funds.
Governmental funds - Governmental funds are used to account for essentially the same functions
reported as governmental activities in the system-wide financial statements. However, this set of
financial statements focuses on events that produce near-term inflows and outflows of spendable
resources as well as on the balances of spendable resources available at the end of the fiscal year.
Because the focus of governmental funds is narrower than that of the system-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the system-wide financial statements. By doing
so, readers may better understand the long-term impact of the government's near-term fmancing
decisions. Both the governmental fund balance sheet and the governmental fund statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities.
The Fayette County School System maintains twenty-four individual governmental funds.
Information is presented separately in the governmental fund balance sheet and in the governmental
fund statement of revenues, expenditures and changes in fund balances for the General Fund, the
Debt Service Fund, and the Capital Projects SPLOST Fund, each of which are considered to be a
major fund. Data from the other twenty-one governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these non-major governmental funds is
provided in the form of combining statements on pages 73-87 of this report.
The Fayette County School System adopts an annual appropriated budget for its General Fund. A
budgetary comparison statement has been provided for the General Fund to demonstrate its
compliance with this budget. One should note that the budget is not prepared on the same basis as
accounting principles generally accepted in the United States of America ("USGAAP"). A
reconciliation of general fund revenues and expenditures on a USGAAP basis and on the budgetary
basis is provided in Note B to the fmancial statements.
Proprietary funds -The financial statements of the School System include one internal service fund:
the Workers' Compensation Fund. Internal service funds are a type of proprietary fund used to
accumulate and allocate costs internally among various functions within the School System.
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