Comprehensive Annual Financial Report Ending June 2011

Fayette County Board of Education
RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES WITH THE
SYSTEM-WIDE STATEMENT OF ACTIVITIES
Total net change in fund balances- governmental funds
For the year ended June 30, 2011
Capital oudays 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 depreciation ($9 ,918,519) exceeds capital ouday ($2,804,632) and the net
value of assets disposed ($15,227).
Repayment of bond principal is an expenditure in the governmental funds, but repayment reduces
long-term liabilities in the statement of net assets.
Repayment of capital lease principal is an expenditure in rl1e governmental funds, but the repayment
reduces long-term liabilities in the statement of net assets.
Payments made to bond escrow agent to currendy refund previously issued debt is an expenditure
in the governmental funds, but the payment reduces long-term liabilities in the statement of net assets.
The issuance of long-term debt provides current financial resources to governmental funds but has no
effect on net assets.
Some capital assets acquired during the year were financed through a capital lease. The amount financed
is reported in the governmental funds as other fmancing sources. Capital leases are not revenues in the
statement of activities, but rather increase long-term liabilities in the statement of net assets.
Governmental funds report the effect of debt issuance costs, premiums, discounts and similar items
when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities.
Amortization expense is netted against interest expense.
Because some property taxes will not be collected for several months after the School System's fiscal year
ends, they are not considered "available" revenues and are deferred in the governmental funds. Deferred
tax revenues decreased by this amount this year.
In the statement of activities, certain operating expenses- compensated absences (sick pay and vacations)
are measured by the amounts earned during the year. In the governmental funds, however, expenditures
for these items are measured by the amount of financial resources used (essentially, the amounts actually
paid). This year, vacation and sick leave earned exceeded the amounts used by this amount.
Interest on 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 accrnes, regardless of when it is due. The additional interest
reported in the statement of activities is the net result of accrned interest on bonds and capital leases
which increased by this amount.
Internal service funds are used to charge the costs of workers' compensation claims to the individual
funds. Net income of the internal service fund are reported in the governmental activities.
Change in net assets of governmental activities
The accompanying notes are an integral part of dus statement.
39
$
$
14,530,062
(7,129,114)
8,942,432
2,120,072
(3,311 ,428)
250,700
(1,657,558)
(76,219)
(765,363)
71
12,903,655