S C H O O L B O A R D O F B R E V A R D C O U N T YV I E R A , F L

COMPREHENSIVE ANNUAL

FINANCIAL REPORT

for the � scal year ended June 30, 2012

www.brevardschools.org

Our mission is to serve every student with excellence as the standard.

Fiscal Year Ended June 30, 2012

Prepared by:

Office of Accounting Services

The School Board of Brevard County, Florida

Comprehensive Annual

Financial Report

For the

Viera, Florida

INTRODUCTORY SECTION Page Letter of Transmittal ………..................................................................................................................................... i List of Principal Officials - Elected .......................................................................................................................... xi List of Principal Officials - Appointed ..................................................................................................................... xii Organizational Chart ................................................................................................................................................. xiii Certificate of Achievement for Excellence in Financial Reporting (GFOA)............................................................ xiv Certificate of Excellence in Financial Reporting (ASBO) ....................................................................................... xv

FINANCIAL SECTION Report of Independent Auditors................................................................................................................................ 1 Management's Discussion and Analysis ................................................................................................................... 3

Basic Financial Statements Government-wide Financial Statements: Statement of Net Assets .................................................................................................................................... 17 Statement of Activities ...................................................................................................................................... 19 Fund Financial Statements: Balance Sheet - Governmental Funds ............................................................................................................... 20 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets .............................. 23 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ......................... 24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...................................................................................... 29 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund ... 30 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - ARRA Fund ..... 34 Statement of Net Assets - Proprietary Funds .................................................................................................... 36 Statement of Revenues, Expenses and Changes in Fund Net Assets - Proprietary Funds ................................. 37 Statement of Cash Flows - Proprietary Funds ................................................................................................... 38 Statement of Fiduciary Assets and Liabilites - Agency Funds .......................................................................... 39 Notes to the Basic Financial Statements ............................................................................................................... 41

Other Required Supplementary Information

Single-Employer Postemployment Benefits Plan ................................................................................................. 80

Other Supplementary Information

Combining and Individual Fund Statements and Schedules: Combining Balance Sheet - Nonmajor Governmental Funds ............................................................................... 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ............................................................................................ 86

Table of Contents

The School Board of Brevard County, FloridaComprehensive Annual Financial Report

for the fiscal year ended June 30, 2012

Other Supplementary Information (continued) Page

Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Major Funds: Debt Service Fund - Other ........................................................................................................................ 90 Section 1011.14/1011.15 Notes Capital Projects Fund ............................................................................ 91 Local Capital Improvement Capital Projects Fund ................................................................................... 92 Other Capital Projects Fund ..................................................................................................................... 93 Nonmajor Funds: Food Services Special Revenue Fund ....................................................................................................... 95 Contracted Programs Special Revenue Fund ............................................................................................ 96 SBE / COBI Bonds Debt Service Fund .................................................................................................... 99 SBE / COBI Bonds Capital Projects Fund ............................................................................................... 100 Capital Outlay and Debt Service Capital Projects Fund ........................................................................... 101 Public Education Capital Outlay Capital Projects Fund ........................................................................... 102 Combining Statement of Changes in Assets and Liabilities - School Internal Funds ........................................... 105 Combining Statement of Net Assets - Internal Service Funds .............................................................................. 109 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - Internal Service Funds ........... 110 Combining Statement of Cash Flows - Internal Service Funds ............................................................................. 111 Combining Statement of Net Assets - Nonmajor Component Units ..................................................................... 114 Combining Statement of Activities - Nonmajor Component Units ....................................................................... 116

STATISTICAL SECTION

Financial Trend Information Net Assets by Component ......................................................................................................................................... 121 Changes in Net Assets .............................................................................................................................................. 122 Governmental Activites Tax Revenues by Source .................................................................................................... 125 Fund Balances of Governmental Funds .................................................................................................................... 126 Changes in Fund Balances of Governmental Funds ................................................................................................. 127 Summary of Revenues, Expenditures (by Major Object) and Changes in Fund Balances General Fund ........................................................................................................................................................ 130 American Recovery and Reinvestment Act Economic Stimulus Fund ................................................................. 133 Special Revenue Fund - Contracted Programs ..................................................................................................... 134 Special Revenue Fund - Food Service .................................................................................................................. 136 Debt Service Funds ............................................................................................................................................... 138 Capital Project Funds ........................................................................................................................................... 140 Revenue Capacity Information Assessed and Estimated Actual Value of Taxable Property ..................................................................................... 143 Property Tax Rates Direct and Overlapping Governments ....................................................................................... 144 Principal Property Taxpayers ................................................................................................................................... 146 Property Tax Levies and Collections ........................................................................................................................ 147 Debt Capacity Information Ratios of Outstanding Debt by Type ........................................................................................................................ 148 Ratios of Certificates of Participation Debt Outstanding........................................................................................... 149 Computation of Direct and Overlapping Bonded Debt ............................................................................................ 150 Anticipated Capital Outlay Millage Levy Required to Cover Certificate of Participation Payments ....................... 151 Calculation of Legal Debt Margin ............................................................................................................................ 152

STATISTICAL SECTION (continued) Page

Demographic and Economic Information Demographic Statistics and Economic Statistics ...................................................................................................... 154 Principal Employers - Melbourne-Titusville-Palm Bay ............................................................................................ 155 Operating Information Capital Asset Information ......................................................................................................................................... 156 Student Membership Enrollment Data by School ..................................................................................................... 157 Number of Personnel ................................................................................................................................................ 160 Teacher Base Salaries ............................................................................................................................................... 161 Food Services Operating Data .................................................................................................................................. 162

SINGLE AUDIT SECTION

Schedule of Expenditures of Federal Awards 163 Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards ………………………………………………………………………………… 165 Report of Independent Certified Public Accountants 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-133…………………………………………………………………………………………….. 167 Schedule of Findings and Questioned Costs ………................................................................................................. 169 Management Letter and State Reporting Requirements ………................................................................................ 174

TRANSMITTAL LETTER

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The accompanying report includes all funds of the District, the Brevard County School Board Leasing Corporation, the Brevard Schools Foundation, and the District’s charter schools, which comprise the reporting entity. The Brevard County School Board Leasing Corporation was formed by the School Board to be the lessor in connection with financing the acquisition and/or construction of certain educational facilities. The Brevard County School Board Leasing Corporation is identified as a component unit, requiring blended presentation of the financial statements. The purpose of the Brevard Schools Foundation is exclusively educational and charitable for the constituents of Brevard County. Charter schools are public schools under the sponsorship of the School Board. The Brevard Schools Foundation and the District’s charter schools are included as discretely presented component units. PROFILE OF THE SCHOOL BOARD The Brevard School District and its governing board were created pursuant to Section 4, Article IX of the Constitution of the State of Florida. The District is an independent taxing and reporting entity managed, controlled, and operated by District school officials in accordance with Chapter 1001, Florida Statutes. The Board consists of five elected officials responsible for the adoption of policies, which govern the operation of the District’s public schools. The School Board appoints the Superintendent of Schools as the chief executive officer who is responsible for administration and management. The Superintendent is also specifically delegated the responsibility of maintaining a uniform system of records and accounts in the District by Section 1010.01, Florida Statutes. During the 2011-12 fiscal year, the District operated ninety-three schools, including fifty-eight elementary schools, twelve middle schools, four junior/senior high schools, and twelve high schools. The District also sponsors seven charter schools. During fiscal year 2011-12, the District served 71,043 unweighted full time equivalent students. The School Board of Brevard County is considered to be the tenth largest of sixty-seven Districts in the state of Florida and the forty-sixth largest district in the nation. The School Board is the single largest employer in Brevard, with over 9,000 employees. GENERAL DESCRIPTION AND LOCATION The geographic boundaries of the District are consistent with the geographic boundaries of Brevard County, encompassing approximately 1,300 square miles along the Atlantic Ocean and is located near the center of Florida’s east coast. The County is approximately seventy-two miles long, north to south, and is bordered on the north by Volusia County and on the south by Indian River County. Brevard County extends about twenty miles inland from the Atlantic Ocean, with the St. Johns River forming its western boundary. ECONOMIC CONDITIONS AND OUTLOOK Brevard County has experienced good population growth, increasing by fourteen percent since the 2000 census. Growth has decreased somewhat since its peak in 2004, and has remained relatively flat in recent years, with some modest growth in some sectors of the population. The County’s current population is estimated to be 543,000, with anticipated growth to 585,000 by the year 2015 and 625,000 by the year 2020. The median age is approximately 45.5 years. The county has a diversified economic base that includes high technology and aerospace industries, tourism services and agriculture. The County is also anchored by internationally known companies such as Harris Corporation, Northrop Grumman, Boeing and others. The county continues to seek opportunities to attract both small and large businesses that can provide diversification to the county’s economic base.

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Brevard County is the home of the Kennedy Space Center and the space shuttle program. The county and surrounding areas have recently experienced significant job losses as a result of the retirement of the space shuttle program; however, local and state leaders continue to lobby for the continuation of federal funding to support commercial space flight. Currently, there is still much uncertainty as to the logistics and funding of managing commercial space flight and the changing role of NASA in space exploration. The local area economy continues to be affected by the national economic downturn that began to affect Brevard County during the latter part of calendar year 2006. While unemployment remains fairly high at 9.4 percent for the county, it has decreased somewhat from the 11 percent highs experienced in 2009. Unemployment for the state of Florida as of June 30, 2012 was at 8.6 percent, while the national average was reported at 8.2 percent for the same period. The expectations are for continued improvement during the latter part of calendar year 2012 and into 2013. MAJOR INITIATIVES Student Performance – The District has been an “A” rated school district for eight consecutive years. Brevard’s schools continue to achieve excellent results on the Florida Comprehensive Assessment Test (FCAT) and showed strong positive results on the new Algebra 1 end-of-course exam. For school year 2011-12, Brevard’s traditional elementary and middle schools received forty-eight A grades, seventeen B grades, three C grades and one D grade. Ninety-five percent of Brevard’s middle and elementary schools achieved an A or B grade. Four of Brevard’s seven charter schools earned a grade of A, one earned a C, and one earned a D, while one was ungraded. Grades for high schools and combination schools will be released in late fall of 2012. Data Reporting Tools – Brevard has developed several online systems to make the reporting, analysis, and utilization of data more transparent and accessible to stakeholders. Brevard’s Data Dashboard is an online tool that provides quick and easy access to state, district, and school reports for multiple years in areas such as FCAT, school grades, the Scholastic Aptitude Test, Advanced Placement, and Dual Enrollment. A comprehensive learning management system which will include data and data analysis tolls is currently under development. Common Core State Standards – During the 2011-12 school year, teacher teams in grade K-2 from each public and charter school in the county took part in “unpacking” the new Common Core State Standards for English Language Arts and Mathematics. This involved teachers taking a close look at what exactly the standard meant in terms of instruction and its effective implementation at each grade level. District-created documents, The Spirals of Common Core State Standards in English Language Arts and Getting to the Core of the Common Core in K-2 Mathematics, clarified the content of the standards as well as implications for instruction. SOAR 2012 – Summer Opportunities for Advancement and Remediation (SOAR) research suggests that academic regression often occurs for struggling students following the lengthy summer vacation. Brevard School District provided additional instruction time in an effort to create a positive impact on the academic achievement of struggling students. Efforts were focused on engaging, relevant, and meaningful standards-based learning experiences.

Elementary SOAR offered elementary students two summer programs. Reading camps designed for third grade students scoring Level 1 on FCAT Reading provided academic support to students not considered proficient readers based on the state assessment. Approximately 284 third grade students participated in reading camp. Jump Start afforded summer learning institutes at elementary schools to give current

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primary-aged students a “jump” on the upcoming year’s curriculum. Jump Start occurred during the two weeks prior to preplanning, allowing these students to enter school better prepared for success in the upcoming school year. Approximately 1,390 students participated in Jump Start during July 2012.

Middle Grades SOAR offered students in grades six through eight the opportunity for promotion by taking courses from the Florida Virtual School at supervised labs throughout the district. This partnership between Brevard Public Schools and Florida Virtual Schools is in its third year of implementation. This year, nine schools hosted SOAR programs and served 269 students.

High School SOAR for grades nine through twelve included opportunities in High School Credit Make-up/Remediation, Career and Technical Programs, and Driver Education. The Credit Recovery/Remediation Program included 27 courses with 2,633 course enrollments. This competency-based program focused on students who would not be eligible for promotion. The CTE program included internships in Hospitality and Tourism and Finance. There were 71 course enrollments. Driver Education was a fee based program including two nine day sessions of six student hours per day. The number of students participating in this program was two hundred fifty-one.

Extended School Year (ESY) SOAR: Students with disabilities who demonstrate a need for summer support based on an Individual Educational Plan (IEP) Team's recommendation are eligible for ESY. Students were supported both instructionally and behaviorally through implementation of the students’ IEP goals. Approximately 259 students attended ESY during the June 2012 session. College and Career Readiness – The implementation of the College and Career Readiness initiative is a district-wide focus on increased rigor, relevance and relationships for all secondary students. Career academies and collegiate high school programs include Advanced International Certificate of Education (AICE), Pre-Advanced International Certificate of Education (Pre-AICE), Lower Secondary Programs and Middle Years Programs (MYP), and International Baccalaureate (IB) Programs. An important component of the College and Career Readiness initiative is the development of the senior year plan, a course of study tailored to the unique needs and talents of each twelfth grade student. Toward that end, every eleventh grade student took the full ACT Plus Writing college entrance exam in the spring of 2012. The results have provided a measure of student achievement in English, Math, Reading, Science Reasoning, and Writing and are being used by counselors, students, and parents to plan their senior year high school courses, to gain perspective on college eligibility, and to identify strengths and weaknesses for remediation or acceleration. Career and Technical Education (CTE) – Career and Technical Education (CTE) programs are a vital component of the District’s initiative for all students to be College & Career Ready. The graduation requirements mandate that all graduates either complete three credits in accelerated programs or three credits in a sequential CTE program leading to a credential endorsed by industry. Highlights of this program include national certification by the American Culinary Federation (ACF), the National Automotive Technicians Education Foundation (NATEF), and the American Drafting and Design Association (ADDA). Career academies have been a vital component to ensure all students are College & Career Ready. Twenty-five career academies have been implemented district-wide. Florida’s Ready to Work (RTW) program provides a unique opportunity to assist in meeting Brevard’s goal for every student to graduate from high school prepared for success in the workplace. To earn the certificate, students must pass three proctored assessments with a minimum score of three on each assessment. Florida legislation has identified the RTW program as one of four diploma designations available to eligible seniors. Brevard leads the state, for the third consecutive year, with 7,571 credentials awarded to date.

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K-12 Comprehensive Reading Program – Literacy coaches maximize reading achievement by providing teacher support as schools implement research-proven strategies and practices in daily instruction. Several district-wide initiatives include improving student access to more complex texts in preparing for the rigor of the FCAT 2.0, developing questions that promote critical thinking and building a working knowledge of the Common Core State Standards. The school improvement plan and the Reading Leadership Team provide school-based focus for literacy coach services and literacy initiatives. Brevard Public Schools’ comprehensive reading plan outlines instructional models for K-6 classrooms, as well as intensive reading courses for students at the secondary level. Schools utilize the Florida Assessment for Instruction in Reading (FAIR) as the universal screening tool. FAIR provides multiple data points that can be used to target and focus instruction. This data, along with our assessment-curriculum decision trees, provide guidance for teachers. The need for academic support is identified, interventions are planned, and growth is monitored through program assessments or other appropriate progress monitoring measures. K-12 Social Studies – During fiscal year 2011-12, Curriculum and Instruction focused on adopting instructional materials for the social sciences in grades K-12. Emphasis was placed on developing a clear and understandable vision for improving pedagogy, content knowledge and technological skills for teachers. Adoption of new social science instruction materials and the development of corresponding curriculum to align to the Next Generation Sunshine State Standards (NGSSS) was a critical element. Implementation guides, assessments, and other resources were developed to support the implementation of the newly adopted programs. The PAINT academy (Planning and Implementing New Technology) focused on providing core instruction on implementing iPad use with students; on-line courses focused on primary sources and content knowledge and teaching twenty first century skills. K-12 Science – A primary focus during fiscal year 2011-12 was the implementation of newly adopted instructional materials, with emphasis on inquiry and alignment to the Next Generation Sunshine State Standards (NGSSS). Instructional emphasis was placed on inquiry learning, formative assessment, uncovering misconceptions, technology integration, Thinking Maps and other research-based instructional practices for addressing the NGSSS. Discovery Education Science Techbook was adopted for Brevard’s grade six science and is our first digital “textbook” program. A continuing objective is to create a science “lab” for every elementary school. Providing quality, highly engaging community-based learning experiences for students (e.g. Lagoon Quest, Space Week, and BLAST) also remained a priority. Many student opportunities for hands-on science learning beyond the classroom are provided, including science research classes, science fairs, science clubs, and robotics teams. K-12 Comprehensive Writing Program – During the 2011-12 school year, Brevard continued to review writing results and to refine approaches for improving student writing as measured by FCAT results. Writing workshops were ongoing for Brevard County teachers and instructional strategies were modeled at all schools. K-10 students participated in district-wide assessments that emulated the actual FCAT writing state assessment. Prompts were carefully crafted so that they were developmentally appropriate, with grade level specific directions, allowable interpretations, and rubrics provided. Teachers used the data from each of these formative assessments to drive future instruction. Students in grades seven and nine completed two essays while grades eight and ten completed one essay assessment.

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The 2011-12 FCAT mean essay for fourth grade was 3.3, which equates to the state average. Brevard had 80 percent of its students scoring 3.0 or above. Eighth grade scores were the same as the state average at 3.3 and tenth grade scores averaged 3.5 which exceeded the state average of 3.4. K-12 Mathematics – Brevard’s mathematics focus in grades three through twelve was to enhance teacher understanding of the NGSSS as well as to create highly effective instructional strategies. In grades K-2, the focus was on preparing teachers to make the transition to the Common Core State Standards for Mathematics (CCSSM). Brevard students continue to perform at the highest levels in the state for mathematics. The average mean scale score in all FCAT-assessed grade levels (grades three through eight) remained above the state average. The percentage of students scoring Level 3 or above was higher than the state average on each FCAT-assessed grade level. Seventy-two percent of Brevard’s sixth grade students scored Level 3 or above compared to fifty-three percent of students in the state. The average mean scale score in the Algebra and Geometry EOC assessments remained above the state average. The percentage of students scoring Level 3 or above was higher than the state average on both EOC assessments. Head Start – In May 2012, Brevard Public Schools was awarded the Head Start grant by the U.S. Department of Health and Human Services. This $4.6 million dollar grant provides for the early education of 624 preschool children living in Brevard County. Head Start programs provide comprehensive services to enrolled children and their families, which include health, nutrition, social, and other services determined by family needs assessments in addition to education and cognitive development services. Head Start services are designed to be responsive to each child’s and family's ethnic, cultural, and linguistic heritage. Brevard Public Schools began offering the Head Start program for eligible children at selected schools in August 2012. Head Start classes are held at 19 elementary school sites, one high school and two standalone centers. These sites are chosen by utilizing the free and reduced price lunch program data and the Head Start community assessment. Head Start classes follow the student 180-day calendar of the Brevard County School system. The program opening and closing times are the same as each elementary school where the program is housed. “Being There Experiences” – Brevard Public Schools offers parent leaders throughout our county a unique opportunity to join together and participate in regular meetings covering a wide variety of educational issues. Parents gather information, ask questions, share thoughts and/or concerns, and provide feedback to district personnel. These experiences are shared with other parents at SAC Meetings, PTO meetings, and newsletters. A parenting conference is provided annually for all BPS parents. This conference is titled Parenting in Today’s World. It was a Saturday morning filled with knowledgeable and passionate speakers on the topic of parenting. This conference was provided for parents of preschool through high school students. Brevard Public Schools also provides a parent involvement website for all parents. This website provides valuable educational information and gives parents an opportunity to communicate directly with the parent involvement resource teacher. Music Demonstration Schools – Brevard is home to some of the finest music programs available, as proven by the selection of nineteen schools (out of a total of twenty-one in the state) as Music Demonstration Schools. Brevard students have been invited to participate in major national music festivals. Our ongoing efforts for improvement include the integration of the standards of excellence required to be a Music Demonstration School.

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Excellence in Physical Education Award (EPEA) – Brevard is the first district in Florida to recognize excellence in physical education programs. The criteria for the portfolio combine the best elements of the national award for excellence in physical education (STARS). The submitted portfolios are first reviewed and scored by a team from the University of West Florida, made up of professors who are specialists in physical education. The portfolio review team is tasked with evaluating and recommending physical education programs that demonstrate balanced diversity, high-performance standards and instructional quality. A site visit team composed of out-of-county experts in the field of physical education conducts a review of each school’s portfolio, a visual evaluation of the program in action, and a walkthrough of the site. Special attention is given to age-appropriate equipment for each physical education class, and interviews are conducted with the administration, parents and physical education teachers. The site visit team provides a recommendation to the Superintendent for the schools qualifying to receive this prestigious award. The District now has twelve schools that have achieved the Excellence in Physical Education Award with Apollo Elementary winning a renewal for 2012-2015. Two of our schools have received national recognition for their excellent programs by achieving the STARS award from the National Association for Sport and Physical Education (NASPE). A movement is now underway in Florida to use the EPEA as a model for a state award of excellence in physical education. Visual Arts Demonstration Schools (formerly Excellence in Visual Arts Award) – The Brevard Cultural Alliance, in partnership with Brevard Public Schools, initiated the Excellence in Visual Arts Award (EVA) to recognize outstanding visual arts programs in Brevard County in calendar year 2005. The purpose of this award was to identify and foster visual arts programs which are comprehensive in scope and are outstanding in quality. Brevard has recognized twenty-one programs of excellence with EVA. 2011 was the last year for the District’s Excellence in Visual Arts Award (EVA). It served as the catalyst for the development of the Florida Department of Education’s Visual Arts Demonstration Schools (VADS) model, which is now in place. Three Brevard schools have submitted portfolio applications to VADS and are awaiting site visits and final reviews during the fall of 2012. Florida Power-Library Schools (FPLS) – The FPLS program is sponsored by the Florida Department of Education and the Florida Association of Supervisors of Media, and recognizes schools that have outstanding library programs. This is the fourth year for the Florida Power-Library School program and once again, Brevard schools have risen to the challenge by earning more than half of the state’s designations for this program. The Florida Power-Library School designation emphasizes collaboration among faculty members and school librarians. Award-winning schools show evidence of information literacy instruction, development of students as critical thinkers and readers, school librarians who are leaders in technology integration, and a school climate that views the school library as the active center for learning in all subject areas. These Brevard school libraries are high performing entities that continue to exhibit their commitment to our students and we are very proud of their accomplishments. Achievement Through Technology and Innovation Award – This award endorses efforts designed to improve teaching and learning with technology, consistent with standards established by the International Society for Technology in Education (ISTE). To be considered, schools must illustrate a systemic commitment to successful technology integration. Submitted portfolios are evaluated by technology leaders from Florida’s K-20 community. Twenty-nine reviewers representing eighteen different districts, a university, and the Department of Education were involved in the most recent evaluation and scoring process. Following an eight-month portfolio development period, six of Brevard’s schools were recognized during the 2011-12 school year. The honorees join twenty other Brevard schools that have earned this distinction since the program’s inception in 2008. Graduation Rate and Dropout Rate – For 2010-11, Brevard had a National Governors’ Association graduation rate of 92.5 percent, which is among the highest graduation rates in the State. At 0.7 percent,

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Brevard’s dropout rate is the sixth lowest in the State. This data supports our mission to Serve Every Student with Excellence as the Standard. Graduation and dropout rates for the 2011-12 school year are not currently available. Adult and Community Education – The Office of Adult and Community Education provides educational services to adult students in four major centers, numerous outreach centers throughout the county, and before-and after-school-age child care in fifty-seven elementary schools. In addition to budgeted funding sources, Adult and Community Education managed several federal grants including a local Geographical Allocation, English Literacy and Civics local activities grant, and four 21st Century Community Learning Center projects. Adult and Community Education programs continue to provide dropout prevention services while working closely with high schools, after-school opportunities for 4,000 children, assisting persons with basic literacy, serving as the GED testing center for all of Brevard County, and giving adults new to our culture supportive environments in which to improve English language skills. During the 2011-12 school year, we served 4,742 students in adult education programs such as Adult Basic Education (ABE), General Education Development (GED), Adult High School, and English for Speakers of Other Languages (ESOL). The District awarded 144 students with Adult High School Diplomas; 1,088 co-enrolled students received high school credit; 705 GED’s were awarded; 191 ESOL literacy completion points were earned; and 618 ABE literacy completion points were awarded. The District also served 48 ABE students and 79 GED students through online classes. FINANCIAL INFORMATION Budgetary Controls – The District maintains budgetary controls over all District funds. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the School Board. Activities of the General Fund, Special Revenue Funds, Debt Service Funds, Capital Projects Funds, Internal Service Funds, and the Enterprise Fund are included in the annual appropriated budget. Project-length financial plans are adopted for Capital Projects Funds. Budgetary control is established at the level of individual accounts or groups of accounts within each school or department. Budgetary information is integrated into the District’s accounting system and, to facilitate budget control, budget balances are encumbered when purchase orders are issued. Appropriations lapse at year-end and encumbrances are re-appropriated as part of the subsequent year’s budget. In order to provide budgetary control for personnel costs, the District utilizes a centralized position control system. The Board adopts an annual staffing plan for teaching positions based on student population. Support and administrative positions are also allocated based on criteria established by the Board. As demonstrated by the statements and schedules included in the financial section of this report, the District continues to meet its responsibility for sound fiscal practices. Internal Controls – Management of the District is responsible for establishing and maintaining an internal control system designed to ensure that the assets of the District are protected from loss, theft, or misuse and to ensure that adequate accounting data for the preparation of financial statements is in conformity with generally accepted accounting principles. The internal control system is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable

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assurance recognizes that the cost of controls should not exceed the benefits likely to be derived, and the valuation of costs and benefits requires estimates and judgments by management. Management believes that the internal controls of the District adequately meet these objectives. OTHER INFORMATION Audit Committee – The School Board has created an eight member Audit Committee, including five voting voluntary community members, each appointed by a respective Board member. The Audit Committee assists the District’s management team in maintaining a high level of accountability and fiscal responsibility to the School Board and its citizenry. School Board policy 6700 provides the Audit Committee with oversight responsibility for the internal audit function and also the authority to act in an advisory capacity to assist District management and the Board in implementing change through the audit process. School Board policy 6705 provides a charter which directs Audit Committee members through the audit process as needed. The Audit Committee meets at least one time per quarter to review internal audit reports and to provide input related to operational improvement with a risk based approach. The Board Chairman, Superintendent, members of the senior staff, and finance division personnel also participate in the quarterly review process. The Audit Committee Chairman presents a public report to the Board regarding progress and findings at least once per year. The Audit Committee is also responsible for the review of the annual external audit. INDEPENDENT AUDIT Section 218.39, Florida Statutes, requires an annual audit by independent certified public accountants. Ernst & Young LLP conducted the audit for the fiscal year ended June 30, 2012. In addition to meeting the requirements set forth in State Statutes, the audit was also designed to meet the requirements of the Federal Single Audit Act of 1996 and related OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. The auditor’s report on the basic financial statements is included in the Financial Section of this report. REPORTING ACHIEVEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded the Certificate of Achievement for Excellence in Financial Reporting to the School Board of Brevard County for its comprehensive annual financial report for the fiscal year ended June 30, 2011. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The School Board of Brevard County also received the Association of School Business Officials International (ASBO) Certificate of Excellence in Financial Reporting for the Comprehensive Annual Financial Report for the fiscal year ended June 30, 2011. This award is also valid for one year, and certifies that the report substantially conforms to the principles and standards of financial reporting as recommended and adopted by the Association of School Business Officials International. We believe that our current comprehensive annual financial report continues to meet the requirements of the Certificate of Achievement Program and the Certificate of Excellence Program, and it will be

THE SCHOOL BOARD OF BREVARD COUNTY, FLORIDA

LIST OF PRINCIPAL OFFICIALS - ELECTED

Dr. Michael Krupp Member from District 1 Member since November 2010 Current term expires November 2014

Dr. Barbara Murray, Chairman Member from District 2 Member since November 2006 Current term expires November 2014

Ms. Amy Kneessy, Vice-Chairman Member from District 3 Member since November 2004 Current term expires November 2012

Ms. Karen Henderson Member from District 4 Member since November 2008 Current term expires November 2012

Mr. Andy Ziegler Member from District 5 Member since November 2008 Current term expires November 2014

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THE SCHOOL BOARD OF BREVARD COUNTY, FLORIDA

LIST OF PRINCIPAL OFFICIALS - APPOINTED

Dr. Brian T. Binggeli Superintendent

Debra Pace Associate Superintendent Human Resources Services

Cynthia Van Meter Associate Superintendent Instructional Services

Judy R. Preston Associate Superintendent Financial Services

Dane Theodore Assistant Superintendent Facilities Services Dr. Beth Thedy Assistant Superintendent Student Services

Gino Butto Assistant Superintendent Educational Technology Services

Dr. Ronald R. Bobay Area Superintendent

Sandra S. Demmon Area Superintendent

Dr. Mark Mullins Area Superintendent

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