Comprehensive Annual Financial Report Ending June 2011

Fayette County Board of Education
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of Fayette County Board of Education (the "School System") have been prepared
in conformity with accounting principles generally accepted in the United States of America ("USGAAP")
as applicable to government units. The more significant of the School System's accounting policies are
summarized below.
1. Reporting Entity
The School System was established under the laws of the State of Georgia and operates under the guidance
of a five member school board (the "Board") elected by the voters of Fayette County and a Superintendent
appointed by the Board. The School System is organized as a separate legal entity and has the power to
levy taxes, issue bonds with voter approval, and conduct all other business pursuant to the operation of the
School System. Its budget is not subject to approval by any other entity. Accordingly, the School System
is a primary government and consists of all the organizations that compose its legal entity. There are no
component units included in the School System's reporting entity as defined by Governmental Accounting
Standards Board ("GASB") Statement No. 14.
2. System-wide and Fund Financial Statements
The system-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities)
report information on all of the nonfiduciary activities of the School System. For the most part, the effect
of interfund activity has been removed from these statements. Governmental adivitie.r, which normally are
supported by taxes and intergovernmental revenues, are reported separately from bu.rinesJ-type activitieJ,
which rely to a significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants
and contributions that are restricted to meeting the operational or capital requirements of a particular
function or segment. Taxes and other items not properly included among program revenues are reported
instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds,
even though the latter are excluded from the system-wide fmancial statements. Major individual
governmental funds are reported as separate columns in the fund financial statements.
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