ROGERS SCHOOL DISTRICT NO....

ROGERS SCHOOL DISTRICT NO. 30

REGULATORY BASIS FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION

YEAR ENDED JUNE 30, 2012

with

REPORT OF INDEPENDENT

CERTIFIED PUBLIC ACCOUNTANTS

CONTENTS

PAGE Report of independent certified public accountants 1 - 2 Regulatory basis financial statements: Balance sheet - regulatory basis 3 Statement of revenues, expenditures and changes in fund balances -

governmental funds - regulatory basis 4 Statement of revenues, expenditures and changes in fund balances -

budget to actual - general and special revenue funds - regulatory basis 5

Notes to financial statements 6 - 14 Other reports and supplementary information: Schedule of capital assets 15 Report on internal control over financial reporting and on

compliance and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards 16 - 17

Independent auditors’ report 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 18 - 19

Schedule of expenditures of federal awards 20 - 21 Schedule of state assistance 22 Schedule of findings and questions costs 23 - 25 Independent auditors’ report on compliance with Arkansas state

requirements 26 Schedule of statutes required by Arkansas Department of Education

to be addressed in independent auditors’ report on compliance for the year ended June 30, 2012 27

Supplemental data sheet as required by Arkansas Department of Human Services Audit Guidelines Section IX-C 28

3

Special Other FiduciaryGeneral revenue governmental fund

funds funds funds types

ASSETS

Cash and cash equivalents 7,187,903$ 125,077$ 12,416,779$ 59,248$ Cash held with fiscal agent - - 572,632 - Investments 8,000,000 - 8,000,000 - Due from other governments 213,490 1,308,220 - -

Total assets 15,401,393$ 1,433,297$ 20,989,411$ 59,248$

Liabilities:

Accounts payable 348,116$ -$ 454,948$ -$ Accrued expenses 1,217,535 - - - Due to student groups - - - 59,248

Total liabilities 1,565,651 - 454,948 59,248

Fund Balances:Restricted:

Federal programs - 1,433,297 - - Capital projects - - 11,179,101 - State programs 1,670,247 - - -

Assigned:Capital projects - - 9,355,362 -

Unassigned 12,165,495 - - -

Total fund balances 13,835,742 1,433,297 20,534,463 -

Total liabilities and fund balances 15,401,393$ 1,433,297$ 20,989,411$ 59,248$

LIABILITIES AND FUND BALANCES


BALANCE SHEET - REGULATORY BASIS

JUNE 30, 2012

Major

Governmental Funds

See accompanying notes.

4

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -

Special OtherGeneral revenue governmental

funds funds funds

REVENUES

Property taxes 63,418,083$ -$ 4,201,226$ Interest 46,090 154 2,119 State revenues 51,797,935 52,631 - Federal revenues - 17,992,789 - Food services - 1,864,459 - Student activities 64,324 - - Other 150,855 - 385,121

115,477,287 19,910,033 4,588,466

EXPENDITURESCurrent:

Instruction and instructional-related services 67,540,336 5,587,220 - Support services 29,759,657 6,142,220 1,938,020 Non-instructional services - 7,532,096 -

Debt service:Principal retirement - - 5,170,000 Interest and fiscal charges - - 5,633,091 Paying agent’s fees - - 6,737

Capital outlay 319,033 693,294 6,368,194

97,619,026 19,954,830 19,116,042 Excess (deficiency) of revenue over

expenditures 17,858,261 (44,797) (14,527,576)

OTHER FINANCING SOURCES (USES)Transfers, net (14,232,385) - 14,232,385 Proceeds from refunding bond issued - - 28,000,000 Payment to refunding bond escrow agent - - (27,781,553) Net refunding bond issuance costs - - (218,447) Payments to other LEAs (185,023) (16,799) -

Total other financing sources (uses) (14,417,408) (16,799) 14,232,385

Net change in fund balances 3,440,853 (61,596) (295,191)

Fund balance - beginning, as previouslyreported 10,562,901 1,624,462 20,829,654

Prior period adjustment (Note 7) (168,012) (129,569) -

Fund balance - beginning, restated 10,394,889 1,494,893 20,829,654

Fund balance - ending 13,835,742$ 1,433,297$ 20,534,463$

Major


GOVERNMENTAL FUNDS - REGULATORY BASIS



Budget Actual Variance

REVENUESProperty taxes 59,995,206$ 63,418,083$ 3,422,877$ Interest - 46,090 46,090 State revenues 52,398,636 51,797,935 (600,701) Federal revenues - - - Food services - - - Student activities - 64,324 64,324 Other - 150,855 150,855

112,393,842 115,477,287 3,083,445

EXPENDITURESCurrent:

Instruction and instructional-related services 67,594,661 67,540,336 54,325 Support services 32,220,555 29,759,657 2,460,898 Non-instructional services - - -

Capital outlay 580,000 319,033 260,967 100,395,216 97,619,026 2,776,190

Excess (deficiency) of revenues over expenditures 11,998,626 17,858,261 5,859,635

OTHER FINANCING SOURCES (USES)Transfers (11,443,239) (14,232,385) (2,789,146) Payments to other LEA's (200,000) (185,023) 14,977

Total other financing sources (uses) (11,643,239) (14,417,408) (2,774,169)

Net change in fund balances 355,387$ 3,440,853$ 3,085,466$

REGULATORY BASIS



STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET TO ACTUAL - GENERAL AND SPECIAL REVENUE FUNDS -

General Funds


5

Budget Actual Variance

-$ -$ -$ 500 154 (346)

40,000 52,631 12,631 17,607,174 17,992,789 385,615 1,860,000 1,864,459 4,459

- - - - - -

19,507,674 19,910,033 402,359

6,224,252 5,587,220 637,032 6,679,997 6,142,220 537,777 7,659,113 7,532,096 127,017

33,265 693,294 (660,029)

20,596,627 19,954,830 641,797

(1,088,953) (44,797) 1,044,156

- - - (16,449) (16,799) (350)

(16,449) (16,799) (350)

(1,105,402)$ (61,596)$ 1,043,806$

Special Revenue Funds

6 ROGERS SCHOOL DISTRICT NO. 30

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2012

Note 1: Summary of significant accounting policies Reporting entity The Board of Education, a seven (7) member group, is the level of government, which has responsibilities over all activities related to public elementary and secondary school education within the jurisdiction of the Rogers School District No. 30 (“District”). There are no component units. Fund accounting Major governmental funds (per the regulatory basis of accounting) are defined as General and Special Revenue. General Fund - The General Fund is the general operating fund and is used to account for all financial resources, except those required to be reported in another fund. Special Revenue Fund - The Special Revenue Fund is used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. The Special Revenue Fund includes federal revenues and related expenditures, restricted for specific educational programs or projects, including the District’s food services operations. The Special Revenue Fund also includes required matching for those federal programs, program income required to be used for further the objectives of those programs, and transfers from the general fund to supplement such programs. Other governmental funds, presented in the aggregate, consist of the following: Capital Projects Fund - The Capital Projects Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays including the acquisition or construction of capital facilities and other capital assets. Debt Service Fund - The Debt Service Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest. Fiduciary Fund types include the following: Agency Funds – Agency Funds are used to report resources held by the reporting government in a purely custodial capacity (assets equal liabilities). Measurement focus and basis of accounting The financial statements are prepared in accordance with a regulatory basis of accounting (RBA), which is an Other Comprehensive Basis of Accounting (OCBOA). This basis of accounting is prescribed by Ark. Code Ann. 10-4-413 (c), as provided in Act 2201 of 2005, and requires that financial statements be presented on a fund basis with, as a minimum, the general fund and special revenue fund presented separately and all other funds included in the audit presented in the aggregate. The law also stipulates that the financial statements consist of a balance sheet; a statement of revenues, expenditures, and changes in fund balances; a comparison of the final adopted budget to the actual expenditures for the general fund and special revenue funds of the entity; notes to financial statements; and a supplemental schedule of capital assets, including land, buildings, and equipment. The law further stipulates that the State Board of Education shall promulgate the rules necessary to administer the regulatory basis of presentation.



JUNE 30, 2012

Note 1: Summary of significant accounting policies (continued) Measurement focus and basis of accounting (continued) The RBA is not in accordance with generally accepted accounting principles (GAAP). GAAP requires that basic financial statements present government-wide financial statements. Additionally, GAAP requires the following major concepts: Management’s Discussion and Analysis, accrual basis of accounting for government-wide financial statements, including depreciation expense, modified accrual basis of accounting for fund financial statements, separate financial statements for fiduciary fund types, separate identification of special and extraordinary items, inclusion of capital assets and debt in the financial statements, specific procedures for the identification of major governmental funds and applicable note disclosures. The RBA does not require government-wide financial statements or the previously identified concepts. The accompanying financial statements are presented on a fund basis. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts, which are segregated for purposes of recording specific activities or attaining certain objectives. Revenues are reported by major sources and expenditures are reported by major function. Other transactions, which are not reported as revenues or expenditures, are reported as other financing sources and uses. Transactions related to the recording of installment contracts and capital leases are reported as other financing sources. Changes in private-purpose trust funds will be reflected in the notes to the financial statements. Revenue recognition policies Revenues are recognized when they become susceptible to accrual in accordance with the RBA, except for property taxes (see below). Capital assets Information on capital assets and related depreciation is reported in the accompanying Schedule of Capital Assets. Capital assets are capitalized at historical cost or estimated historical cost, if actual data is not available. Capital assets purchased are recorded as expenditures in the applicable fund at the time of purchase. Donated capital assets are reported at fair value when received. The District maintains a threshold level of $1,000 for capitalizing equipment. Library holdings are not capitalized. No salvage value is taken into consideration for depreciation purposes. All capital assets, other than land and construction in progress, are depreciated using the straight-line method over the following useful lives: Asset Class Estimated Useful Life in Years Improvements/infrastructure 20 Buildings 50 Equipment 5 - 20 Property taxes Property taxes are levied in November based on property assessment made between January 1 and May 31 and are an enforceable lien on January 1 for real property and June 1 for personal property. The tax records are opened on the first business day of March of the year following the levy date and are considered delinquent after October 15 of the same calendar year. Property taxes that are due at the end of the fiscal year and collected within 60 days are accrued.



JUNE 30, 2012

Note 1: Summary of significant accounting policies (continued) Property taxes (continued) Prior to the year ending June 30, 2012, property taxes were accrued or deferred, as applicable, in accordance with guidelines issued by the Arkansas Department of Education (ADE), which were effective beginning with the fiscal year ended June 30, 2006. Arkansas Code § 6-20-401 defined revenue receipts of a school district and included forty percent (40%) of the proceeds of local taxes which are not pledged to secure bonded indebtedness or forty percent (40%) of the revenue from the uniform rate of tax whichever is greater collected in the succeeding calendar year, commonly known as 40% pullback, within that definition. The ADE determined that school districts must utilize the 40% pullback amount, as calculated by the ADE and reflected on the respective county’s abstract of assessments, in recording property tax revenue as follows:

If the amount of 40% pullback collected by June 30th was less than the calculated 40% pullback amount, the difference was accrued;

If the amount of 40% pullback collected by June 30th was more than the calculated 40% pullback amount, the excess was recorded as deferred taxes.

In March, 2011, the General Assembly of the State of Arkansas passed Act 871 to amend Arkansas Code § 6-20-401 to clarify the definition of "revenue receipts of a school district". Act 871 is effective for years ending June 30, 2012 and thereafter. The Act eliminates the District’s requirement to defer property tax collections that exceed the 40% pullback (as defined above). Accordingly, the District recognized approximately $3 million in revenue on July 1, 2011 that was deferred at June 30, 2011 related to the 40% pullback requirements, but did not defer any property tax collections during the year ending June 30, 2012 under the new law. Amendment No. 74 to the Arkansas Constitution established a uniform minimum property tax millage rate of 25 mills for maintenance and operation of public schools. Ark. Code Ann. 26-80-101 provides the uniform rate of tax (URT) shall be assessed and collected in the same manner as other school property taxes, but the net revenues from the URT shall be remitted to the State Treasurer and distributed by the State to the county treasurer of each county for distribution to the school districts in that county. For reporting purposes, URT revenues are considered property taxes.

Fund balance classifications The Governmental Accounting Standards Board (GASB) released Statement 54 - "Fund Balance Reporting and Governmental Fund Type Definitions" (GASB 54) on March 11, 2009 which was effective for the District's fiscal year ending June 30, 2011. This Statement is intended to improve the usefulness of the amounts reported in fund balance by providing more structured classifications. Under GASB 54, fund balance is reported under the following five classifications:

1. Nonspendable Fund Balance - includes amounts that are not in a spendable form or are required to be maintained intact. The District does not have any nonspendable fund balance at year end.



JUNE 30, 2012

Note 1: Summary of significant accounting policies (continued)

Fund balance classifications (continued) 2. Restricted Fund Balance - includes amounts that can be spent only for the specific purposes

stipulated by external resource providers, constitutionally, or through enabling legislation. The Restricted for State Programs and Restricted for Federal Programs balances reflect amounts restricted for specific state and federal programs as mandated by respective state and federal grant or funding agreements. The Restricted for Capital Projects balance reflects amounts that are restricted for construction or other capital outlay projects.

3. Committed Fund Balance - includes amounts that can be used only for the specific purposes determined by a formal action of the District's highest level of decision-making authority (the Board of Education) and does not lapse at year end. The District does not have any committed fund balance at year end.

4. Assigned Fund Balance - includes amounts intended for a specific purpose by the Board of

Education or by a District official that has been delegated authority to assign amounts. The Assigned for Capital Projects balance reflects amounts that are assigned for construction or other capital outlay projects.

5. Unassigned Fund Balance - includes any remaining fund balance that has not been reported in

any other classification. This classification can also include negative amounts in other governmental funds, if expenditures incurred for specific purposes exceeded the amounts restricted, committed, or assigned to those purposes.

For the purposes of fund balance classification, the District’s policy is to have expenditures spent from restricted fund balance first, followed in order by committed fund balance (if any), assigned fund balance (if any) and lastly unassigned fund balance. Budget and budgetary accounting The District is required by state law to prepare an annual budget. The annual budget is prepared on a fiscal year basis. The District does not prepare and submit amended budgets during the fiscal year. The State Department of Education’s regulations allow for the cash basis or the modified accrual basis. However, the majority of the school districts employ the cash basis method. The District budgets intra-fund transfers. Significant variances may result in the comparison of transfers at the Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General and Special Revenue Funds - Regulatory Basis because only interfund transfers are reported at the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds - Regulatory Basis. Budgetary perspective differences are not considered to be significant, because the structure of the information utilized in preparing the budget and the applicable fund financial statements is essentially the same.



JUNE 30, 2012

Note 2: Cash deposits with financial institutions Cash deposits are carried at cost (carrying value). A comparison of the bank balance and carrying value is as follows: Carrying Bank amount balance Insured (FDIC) $ 16,250,000 $ 17,748,519 Collateralized - held by pledging bank or pledging bank trust department in the District’s name 19,539,007 24,278,933 Total deposits $ 35,789,007 $ 42,027,452 The total deposits reflected above includes certificates of deposits (“CDARS”) of $16,000,000 reported as investments. Note 3: Cash held with fiscal agent Cash held with fiscal agent includes funds held in escrow with banks totaling $572,632 at June 30, 2012. The balance includes sinking fund deposits that are required to be used for future principal payments on some of the District’s long-term debt. Note 4: Commitments Construction commitments At June 30, 2012, the District was contractually obligated for three construction contracts related to construction and renovation projects within the District, with remaining contract balances of approximately $12 million. These projects are estimated to be completed in 2013. Long-term debt issued and outstanding The District is presently paying on the following long-term debt: Amount Debt Maturities Date of Date of final Rate of authorized outstanding to issue maturity interest and issued June 30, 2012 June 30, 2012 12/1/2007 2/1/2033 4.00 - 5.63% 20,360,000 18,440,000 1,920,000 5/1/2009 2/1/2033 3.50 - 4.75% 76,835,000 71,600,000 5,235,000 11/1/2010 2/1/2016 2.00 - 3.00% 5,395,000 4,540,000 855,000 11/1/2010 8/1/2015 0.70 - 1.90% 3,150,000 2,220,000 930,000 12/21/2010 12/1/2029 5.50% 10,880,000 10,880,000 - 6/1/2011 2/1/2033 2.00 - 4.38% 18,215,000 17,965,000 250,000 5/1/2012 2/1/2033 3.00 - 4.00% 28,000,000 28,000,000 - Totals $ 162,835,000 $ 153,645,000 $ 9,190,000



JUNE 30, 2012

Note 4: Commitments (continued) Long-term debt issued and outstanding (continued) Changes in long-term debt as follows: Balance Balance Description July 1, 2011 Issued Retired ** June 30, 2012 Bonds payable $ 158,025,000 $ 28,000,000 $ 32,380,000 153,645,000 **Includes $27,210,000 early retirement of debt - See Note 5. Long-term debt issued and outstanding Total long-term debt principal and interest payments are as follows: Year ended Debt June 30 Principal Interest sinking fund Total 2013 $ 4,950,000 $ 5,240,253 $ 572,632 $ 10,762,885 2014 6,130,000 5,332,459 572,632 12,035,091 2015 6,480,000 5,146,359 572,632 12,198,991 2016 6,695,000 4,947,454 572,632 12,215,086 2017 5,110,000 4,758,299 572,632 10,440,931 2018 - 2022 28,350,000 21,064,553 2,863,160 52,277,713 2023 - 2027 33,920,000 15,531,453 2,863,155 52,314,608 2028 - 2032 52,510,000 7,864,876 (8,589,475) 51,785,401 2033 9,500,000 430,456 - 9,930,456 $ 153,645,000 $ 70,316,162 $ - $ 223,961,162 Operating leases The District leases copiers under noncancelable operating leases with terms up to 4 years which will be charged to expense over the lease term as it becomes payable. Lease expense totaled approximately $196,000 for the year ending June 30, 2012. At June 30, 2012, the minimum rental commitments under these noncancelable operating leases are as follows:

2013 $ 56,706 2014 55,176 2015 54,156 2016 49,056 $ 215,094



JUNE 30, 2012

Note 5: Debt refunding On May 1, 2012, the District issued $28,000,000 in refunding bonds with interest rates of 3.0% to 4.0%. Bond proceeds of $27,781,553 were deposited with an escrow agent to advance refund $27,210,000 of outstanding bonds dated May 1, 2007 with interest rates of 4.00% to 4.38% and to pay interest and fees. The bonds were called on August 1, 2012. The new bond issues have final maturity dates of February 1, 2033. Note 6: Interfund Transfers The following details the transfers between governmental funds for operating purposes: General Debt Capital fund service fund projects fund Total Transfers in $ 150,166,244 $ 10,809,829 $ 3,752,556 $ 164,728,629 Transfers out (164,398,629) - (330,000) (164,728,629) Totals $ (14,232,385) $ 10,809,829 $ 3,422,556 $ - Note 7: Prior period adjustment - restatement of fund balances During 2012, the District changed its overall basis of accounting from the basis prescribed by accounting principles generally accepted in the United States to the regulatory basis of accounting described in Note 1. The District believes that the new method simplifies its reporting requirements. Under the regulatory basis of accounting, inventory is expensed when acquired. The District had an inventory balance of $297,581 split between the General Fund ($168,012) and Special Revenue Funds ($129,569) at June 30, 2011; therefore, opening fund balance was overstated under the regulatory basis of accounting at July 1, 2011. Fund balance has been restated to reflect this change. Note 8: Retirement plans Arkansas Teacher Retirement System Plan description: The District contributes to the Arkansas Teacher Retirement System (ATRS), a cost-sharing multiple-employer defined benefit pension plan that covers all Arkansas public school employees, except certain nonteachers hired prior to July 1, 1989. ATRS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit and contribution provisions are established by State law and can be amended only by the Arkansas General Assembly. The Arkansas Teacher Retirement System issues a publicly available financial report that includes financial statements and required supplementary information for ATRS. That report may be obtained by writing to Arkansas Teacher Retirement System, 1400 West Third Street, Little Rock, Arkansas 72201 or by calling 1-800-666-2877. Funding policy: ATRS has contributory and non-contributory plans. Contributory members are required by law to contribute 6% of their salary. Each participating employer is required by law to contribute at a rate established by the Arkansas General Assembly. The current employer rate is 14%.



JUNE 30, 2012

Note 8: Retirement plans (continued) Arkansas Teacher Retirement System (continued) The District’s contributions to ATRS for nonfederally funded employees for the years ended June 30, 2012, 2011 and 2010 were $10,540,799, $9,153,552 and $9,240,117, respectively. The District’s contributions to ATRS for federally funded employees for the years ended June 30, 2012, 2011 and 2010 were $755,356, $818,731 and $747,618, respectively, equal to the required contributions for each year. Arkansas Public Employees Retirement System Plan description: The District contributes to the Arkansas Public Employees Retirement System (APERS), a cost-sharing multiple-employer defined benefit pension plan that covers certain nonteaching Arkansas public school employees hired before July 1, 1989. APERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit and contribution provisions are established by State law and can be amended only by the Arkansas General Assembly. APERS issues a publicly available financial report that includes financial statements and required supplementary information for APERS. That report may be obtained by writing to Arkansas Public Employees Retirement System, One Union National Plaza, 124 W. Capitol, Little Rock, Arkansas 72201 or by calling 1-800-682-7377. Funding policy: APERS has contributory and non-contributory plans. Contributory members are required by law to contribute 5% of their salary. Each participating employer is required by law to contribute at a rate established by the Arkansas General Assembly. The current statutory employer rate is 4% of annual covered payroll. The District’s contribution to APERS for the years ended June 30, 2012, 2011 and 2010 were $5,587, $8,940, and $7,729, respectively, equal to the required contributions for each year. Note 9: Risk management The District is exposed to various risks of loss from torts; theft of, damage to, and destruction of assets; errors and omissions, and natural disasters for which the District carries commercial insurance. Settled claims have not exceeded this commercial coverage in any of the three preceding years. The District is a member of the Arkansas School Board Association Self-Insurance Program, a public-entity risk pool currently operating a common risk management and insurance program for its members. The fund was created by members to formulate, develop and administer a program of self-funding for its membership, obtain lower Workmen’s Compensation coverage and develop a comprehensive loss control program. The District pays an annual premium to the fund for its Workmen’s Compensation Coverage. The Pool’s governing agreement specifies that the Pool will be self-sustaining through the member premiums and will reissue through commercial carriers for claims in excess of specified stop loss amounts.



JUNE 30, 2012

Note 10: Litigation and contingencies The District is subject to claims and lawsuits that arise primarily in the ordinary course of business. Neither the ultimate outcome nor an estimated range of potential loss can be determined. Management and legal counsel are of the opinion that the likelihood of a financially material outcome is small and, thus, no provision has been made in the financial statements for any potential liabilities. The District participates in federally assisted grant programs. This District is potentially liable for expenditures which may be disallowed pursuant to the terms of these grant programs. Management is not aware of any material items of non-compliance which would result in the disallowance of program expenditures. Note 11: On-behalf payments During the year ending June 30, 2012, health insurance premiums of $1,156,242 were paid by the Arkansas Department of Education to the Arkansas Employee Benefits Division on behalf of District Employees. Note 12: Subsequent event The District issued $19,430,000 in refunding bonds on October 1, 2012 with interest rates ranging from 2.00% to 3.25% and a final maturity of February 1, 2033. The bond proceeds were used to refund $18,440,000 plus interest and fees of outstanding bonds dated December 1, 2007 with interest rates ranging from 4.00% to 5.63%. The 2007 issue was called on November 1, 2012.

OTHER REPORTS AND SUPPLEMENTARY INFORMATION

15

Nondepreciable capital assets:Land 8,105,052$ Construction in progress 5,313,114

Total nondepreciable capital assets 13,418,166

Depreciable capital assets:Buildings 162,386,393 Site improvements 6,006,911 Bus/vehicles 4,156,092 Equipment/computers 5,842,530

Total depreciable capital assets 178,391,926

Less accumulated depreciation for:Buildings 34,406,405 Site improvements 1,026,124 Bus/vehicles 2,387,425 Equipment/computers 2,393,332

Total accumulated depreciation 40,213,286

Total depreciable capital assets, net 138,178,640

Capital assets, net 151,596,806$


SCHEDULE OF CAPITAL ASSETS

FOR THE YEAR ENDED JUNE 30, 2012

(Unaudited)

20

FederalCFDA Federal

number expenditures

SPECIAL EDUCATION CLUSTERU.S. Department of EducationPassed through Arkansas Department of Education:

Title VI - Part B - Special Education Grants to States 84.027 2,936,051$ Title VI - Part B - Special Education Grants to States - ARRA 84.391 299,120

Total Special Education Cluster 3,235,171

TITLE I, PART A CLUSTERU.S. Department of EducationPassed through Arkansas Department of Education:

Title I, Part A - Grants to Local Education Agencies 84.010 3,604,090 Title I, Part A - Grants to Local Education Agencies - ARRA 84.389 110,223

Total Title I - Part A Cluster 3,714,313

CHILD NUTRITION CLUSTERU.S. Department of AgriculturePassed through Arkansas Department of Education:

School Breakfast Program - Cash Assistance 10.553 1,130,042 National School Lunch Program - Cash Assistance 10.555 3,977,779

Total Arkansas Department of Education 5,107,821

Passed through Arkansas Department of Human Services:National School Lunch Program - Non-Cash Assistance 10.555 439,605

Total Child Nutrition Cluster 5,547,426

OTHER PROGRAMS:

U.S. Department of EducationPassed through Arkansas Department of Education:

Career and Technical Education - Basic Grants to States 84.048 229,096 Title I, Migrant 84.011 53,361 Title IV, Part B 84.287 462,238 Title III, English Language Acquisition 84.365 552,193 Title II, Part A - Improving Teacher Quality 84.367 502,164 State Fiscal Stabilization Funds - ARRA 84.394 702,440 Education Jobs Funds - ARRA 84.410 2,713,495

Total U.S. Department of Education 5,214,987

Total Expenditures of Federal Awards 17,711,897$



SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Federal grant/pass-throughgrantor/program title

21

1.

2.

3.

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (CONTINUED)


This schedule includes the federal awards activity of the District and is presented on theregulatory basis of accounting. The information in this schedule is presented in accordance withthe requirements of OMB Circular A-133, Audit of States, Local Governments, and Non-ProfitOrganizations. Therefore, some amounts presented in this schedule may differ from amountspresented in, or used in the preparation of the basic financial statements.

Nonmonetary assistance is reported at the approximate value as provided by the ArkansasDepartment of Human Services.

Medicaid reimbursements are defined as contracts for services and not federal awards, therefore,such reimbursements totaling $286,781 are not covered by the reporting requirements of OMBCircular A-133.

22

Arkansas Department of EducationState Foundation Funding 41,197,226$ Student Growth Funding 1,152,399 General Facilities Funding 69,129 Bonded Debt Assistance 4,034 Professional Development Funding 588,856 LEP Allocation 1,450,150 Food Service State Matching 52,631 Special Education - Catastrophic Occurrences 623,771 Alternative Learning 744,193 National School Lunch Student Funding 4,154,766 Gifted and Talented - Advanced Placement 41,750 Literacy Staff Development 22,813 Arkansas Better Chance Program 1,360,800 HIPPY Program 147,000 National Board of Professional Teaching Standards 4,017 Children w/ Disabilities - Supervision, Extended Year, Foster Care 59,480 Special Extended School Year Services 23,680 Pathwise Mentoring Grant 64,483 Children With Disabilities 10,575

Total Arkansas Department of Education 51,771,753

Arkansas Department of Career EducationSecondary Workforce Centers 78,813

Total State Assistance 51,850,566$


SCHEDULE OF STATE ASSISTANCE



SCHEDULE OF FINDINGS AND QUESTIONED COSTS


A. SUMMARY OF AUDITORS’ RESULTS

1. Our report expresses an adverse opinion based on generally accepted accounting principles and an unqualified opinion based on regulatory basis of accounting on the basic financial statements of Rogers School District No. 30.

2. The independent auditors’ report on internal control over financial reporting described:

Significant deficiency(ies) identified? Yes No Material weakness(es) identified? Yes No

3. Noncompliance considered material to the financial statements was disclosed by the audit? Yes No

4. The independent auditors’ report on internal control over compliance with requirements applicable to major federal awards programs described:

Significant deficiency(ies) identified? Yes No Material weakness(es) identified? Yes No

5. The opinion expressed in the independent auditors’ report on compliance with requirements applicable to major federal awards was:

Unqualified Qualified Adverse Disclaimed

6. The audit disclosed findings required to be reported by OMB Circular A-133? Yes No

7. The Auditee’s major programs were:

Cluster/Program CFDA Number Title I, Part A - Cluster 84.010 and 84.389 State Fiscal Stabilization Funds - ARRA 84.394 Education Jobs Fund - ARRA 84.410 Title III, English Language Acquisition 84.365 8. The threshold used to distinguish between Type A & Type B programs as those terms are

defined in OMB Circular A-133 was $531,357.




A. SUMMARY OF AUDITORS’ RESULTS (CONTINUED)

9. The Auditee qualified as a low-risk auditee as that term is defined in OMB Circular A-133?

Yes No B. FINDINGS - FINANCIAL STATEMENTS AUDIT None C. FINDINGS AND QUESTIONED COSTS - FEDERAL AWARDS AUDIT

US. Department of Education Passed through Arkansas Department of Education Title III, English Language Acquisition - CFDA #84.365 2012-1 Allowable Costs/Cost Principles Criteria: Office of Management and Budget (OMB) Circular A-87 requires periodic time certifications for employees who work solely on a single federal program. Condition: Periodic time certifications were not prepared for all employees who worked solely with the program reflected above. Context: Review of sample employees and related documents substantiating time worked by employees. Effect: Semi-annual certifications were not completed, enhancing the likelihood that an employee is paid from a federal program that is inconsistent with the work they are performing. Cause: Requirement was not enforced or consistently monitored for this program during the current fiscal year. Recommendation: The District should monitor the completion of the periodic time certifications for all applicable employees. View of responsible officials: The grant manager has been informed of the requirement to conduct semiannual certifications and has been provided guidance to assist in this process.

D. PRIOR YEAR FINDINGS AND QUESTIONED COSTS Significant Deficiency: 2011-1 Government Accounting Standards Board (“GASB”) Statement No. 34

Reconciliations Criteria: GASB Statement No. 34 reconciliations should be prepared with adequate knowledge and understanding of the GASB Statement No. 34 reporting model.




D. PRIOR YEAR FINDINGS AND QUESTIONED COSTS (continued) 2011-1 Government Accounting Standards Board (“GASB”) Statement No. 34

Reconciliations (continued)

Condition: The District maintains its books and records on a fund accounting basis in order to aid the District’s management and to demonstrate legal compliance. No adjustments were made to the District’s fund financial statements. The District also reports it financial statements on a government-wide basis as required by GASB Statement No. 34, “Basic Financial Statements - Management’s Discussion and Analysis - for State and Local Governments.” In preparing the reconciliation items to report the District’s financial statements from the fund basis to the government-wide basis, several adjustments were necessary. These reconciliation adjustments are often complex and require a thorough understanding of the GASB Statement No. 34 reporting model. Effect: In preparing the reconciliation items to report the District’s financial statements from the fund basis to the government-wide basis, several adjustments were necessary. Previous Recommendation: Management should consider utilizing a third party to assist in the preparation of the reconciliations for all required GASB Statement No. 34 adjustments in order to prepare the District’s government-wide financial statements. Current Status: Beginning in the current year, the District has elected to use the regulatory basis of accounting for financial reporting purposes instead of the GASB Statement No. 34 model. No such reconciliations are required under the reporting model used in the current year.


SCHEDULE OF STATUTES REQUIRED BY ARKANSAS DEPARTMENT OF EDUCATION TO BE ADDRESSED IN INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE

YEAR ENDED JUNE 30, 2012 DESCRIPTION STATUTES Management Letter for Audit 14-75-101 – 14-75-104 Ethical Guidelines and Prohibitions for

Board Members, Administrators, and Employees

6-13-628; 6-24-101 et seq.

School Elections 6-13-622; 6-13-631; 6-13-634; 6-14-106; 6-14-109; 6-14-118

Management of Schools Board of Directors District Treasurer Warrants

6-13-604; 6-13-606; 6-13-608; 6-13-611 – 6-13-613; 6-13-617 – 6-13-620; 6-24-101 et seq. 6-13-701 6-17-918; 6-17-919; 6-20-403

Revolving Loan Fund 6-19-114; 6-20-801 et seq. School District Finance

Petty Cash Changes in Pullback (declining

accrual percentages) Bidding & Purchasing

Commodities

6-20-402 6-20-409 6-20-401 6-21-301 – 6-21-305

District Bonded & Non-bonded Debt, School Bonds

6-20-1201 – 6-20-1208; 6-20-1210

Teachers and Employees Personnel Policies Employment and Assignment Teacher's License Requirement Contracts Certification Requirements Fair Dismissal Act Sick Leave Policies Salary Laws - Classified

6-17-201 et seq., 6-17-2301 6-17-301 et seq. 6-17-401 et seq. 6-17-801 et seq. 6-17-309; 6-17-401 6-17-1501 et seq.; 6-17-1701 et seq. 6-17-1201 et seq.; 6-17-1301 et seq. 6-17-2201 et seq.; 6-17-2301 et seq.

Teacher Salaries, the Minimum Foundation Program Aid Act

6-17-803; 6-17-907; 6-17-908; 6-17-911 – 6-17-913; 6-17-918; 6-17-919

Deposit of Funds 19-8-104; 19-8-106

Collateralization & Investment of Funds 6-20-222; 19-1-504

Use of Contractors, Improvement Contracts

22-9-201 – 22-9-205

Nonrecurring Salary Payments 8-20-412

Trust Funds (Education Excellence) 6-5-307

Use of DM&O Millage 26-80-110

On Behalf Payments The amount of funds paid by the Arkansas Department of Education to the Employee Benefits Division, on-behalf of District’s employees


SUPPLEMENTAL DATA SHEET


The following information is being provided to satisfy the requirements of Arkansas Department of Human Services Audit Guidelines, Section IX. C - Special Requirements: 1. Entity's Full Name: Rogers School District No. 30 2. Entity's Address: 500 W. Walnut Rogers, AR 72756 3. Entity's FEIN: 71-6021134 4. Entity's Telephone Number: (479) 636-3910 5. Name of Director: Dr. Janie Darr, Superintendent 6. Name of Contact Person: Kathy Hanlon, Treasurer

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