Comprehensive Annual Financial Report Ending June 2011

Fayette County Board of Education
NOTES TO FINANCIAL STATEMENTS- CONTINUED
June 30, 2011
NOTE B- STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY- continued
Additionally, the School System budgets purchases of buses and capital lease payments for buses under
transportation services. In reporting actual expenditures budget basis, these items have be reclassified
from capital outlay and debt service, respectively, to student transportation services.
NOTE C- DEPOSTS AND INVESTMENTS
Credit Risk. O.C.G.A. 36-83-4 authorizes the School System to invest its funds. In selecting among
options for investment or among institutional bids for deposits, the highest rate of return shall be the
objective, given equivalent conditions of safety and liquidity. The School System may invest its funds in
obligations of the State of Georgia or other states, obligations issued by the United States government,
obligations fully insured or guaranteed by the United States government or a United States government
agency, obligations of any corporation of the United States government, prime banker's acceptances, the
Georgia Fund 1 administered and regulated by the Georgia Office of Treasury and Fiscal Services,
repurchase agreements, and obligations of political subdivisions of the State of Georgia. The School
System does not have a policy for credit risk beyond the types of investments authorized by Georgia State
law.
At June 30, 2011, the School System had the following investments:
Investment Type
Georgia Fund 1
Money market mutual funds
Certificates of deposit
Maturities
59 day weighted average
N/A
11.0 montl1 weighted average
Rating
AAAm
N/A
N/A
Fair Value
$ 58,576,771
9,283
59,797
$ 58,645,851
Georgia Fund 1, created by O.C.G.A. 36-83-8, is a stable net asset value investment pool which follows
Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in
a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a 2a-
7 like pool. The pool is not registered with the Securities Exchange Commission as an irwestment
company. The Office of Treasury and Fiscal Services is the regulatory oversight agency for Georgia Fund
1. The pool's primary objectives are safety of capital, investment income, liquidity and diversification
while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability.
The pool distributes earnings (net of management fees) on a monthly basis and determines participant's
shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments
are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees
to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds
from local governments; operating and trust funds of Georgia's state agencies; colleges and universities;
and current operating funds of the State of Georgia's General Fund. Investments in Georgia Fund 1 are
directed toward short-term instl:uments such as U.S. Treasury obligations, securities issued or guaranteed
as to principal and interest by the U.S. government or any of its agencies or instrumentalities, banker's
acceptances and repurchase agreements.
55