The School District of Osceola County_ FL by yaofenjin

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									The School District of
 Osceola County, FL

Continuing Disclosure Document


  For The Fiscal Year Ended
        June 30, 2009




        Superintendent
     Dr. Michael A. Grego




   An Equal Opportunity Agency
                                                           Table of Contents

GENERAL INFORMATION ....................................................................... 1 
  The School Board and District .............................................................................................. 1 
  General Statistical Data ........................................................................................................... 1 
  Employee Relations .................................................................................................................. 2 
  State and District Retirement Programs ............................................................................. 2 
  Other Post Employment Benefit Programs ....................................................................... 3 
  Summary of General Fund Operations ............................................................................... 4 
  Summary of Capital Projects Funds..................................................................................... 5 
  Indebtedness ............................................................................................................................... 6 
  Assessed Valuation.................................................................................................................... 7 
  Historical Millages .................................................................................................................... 8 
  Property Tax Levies .................................................................................................................. 9 
RISK FACTORS ....................................................................................... 10 
  Additional Indebtedness and Obligations ....................................................................... 10 
  Four Corners Charter School................................................................................................ 10 
  Bellalago Academy .................................................................................................................. 11 
  Local Option Millage Revenues .......................................................................................... 11 
  State Revenues.......................................................................................................................... 12 
DISTRICT REVENUES............................................................................ 13 
  Local Revenue Sources .......................................................................................................... 13 
  State Revenue Sources ........................................................................................................... 15 
  Special Revenue Sources ....................................................................................................... 17 
  Constitutional Amendments Relating to Class Size Reduction and Pre-K Education
  ....................................................................................................................................................... 17 
  Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem
  Taxes ........................................................................................................................................... 19 
LITIGATION .......................................................................................... 22 
SIGNIFICANT EVENTS .......................................................................... 23 
  Insurer Rating Changes ......................................................................................................... 23 
ADDITIONAL INFORMATION 2000 CERTIFICATES OF PARTICIPATION 24 
  Four Corners Charter School, Inc. 2009 Audited Financial Statements .................. 24 
  Four Corners Charter School, Inc. Statistical Data ....................................................... 24 
ADDITIONAL INFORMATION 2001 SALES TAX BONDS ........................... 25 
  One Cent Sales Surtax ............................................................................................................ 25 
  Direct and Overlapping Debt and Debt Ratios .............................................................. 26 
ADDITIONAL INFORMATION 2005 CERTIFICATES OF PARTICIPATION 27 
  Summary of Operations for Four Corners Charter School, Inc. ................................ 27 

                                                                   APPENDICES

A -         THE SCHOOL DISTRICT OF OSCEOLA COUNTY, FL 2009 AUDITED COMPREHENSIVE
            ANNUAL FINANCIAL REPORT
B -         FOUR CORNERS CHARTER SCHOOL, INC. 2009 AUDITED FINANCIAL STATEMENT
                                  GENERAL INFORMATION
The School Board and District

The School Board is a public body corporate and politic existing under the laws of the State and is
the governing body of the District. The School Board consists of five members elected District-wide
for overlapping four-year terms. The District is organized under Section 4, Article IX, of the
Constitution of Florida and Chapter 1001, Part II, Florida Statutes, as amended. The District covers
the same geographic area as Osceola County, Florida (the “County”). Management of the District is
independent of the County government and the other local governments within the County. The
County Tax Collector collects ad valorem taxes for the District, but exercises no control over the
disposition of the District’s tax receipts.

General Statistical Data

The following table presents a summary of certain general statistical data regarding the school board.

                             Summary of Statistical Data
                                Five-Year History
                          Number        Number of                     Average
             School         of         Classroom         FTE       Expenditure per
              Year        Schools      Instructors*   Enrollment    FTE Student

             2008/09         50              3,280       51,118             8,301
             2007/08         50              3,147       51,934             8,515
             2006/07         50              2,962       51,060             7,786
             2005/06         50              2,790       49,178             7,101
             2004/05         47              2,614       46,791             6,791

            * Does not include teachers of charter.

            Source: School Board of Osceola County.


                            [Remainder of Page Intentionally Left Blank]




                                              Page 1 of 27
Employee Relations

The School Board presently employs 6,212 persons, of which approximately 3,213 instructional
personnel are represented by the Osceola Classroom Teachers’ Association. In addition,
approximately 1,169 other personnel are represented by Teamsters Local Union No. 385. The
School Board has existing labor contracts with the Osceola Classroom Teachers Association and
Teamsters Local Union No. 385 which expire August 15, 2012, and June 30, 2010, respectively. The
School Board believes that it has a satisfactory relationship with its employees.

State and District Retirement Programs

All regular employees of the District are covered by the Florida Retirement System (the “FRS”), a
State-administered cost-sharing, multiple-employer, defined benefit retirement plan (the "Plan").
Essentially all regular employees of participating employers are eligible and must enroll as members
of the FRS. Benefits vest at six years of service. The Plan also includes an early retirement provision,
but imposes a penalty for each year a member retires before the normal retirement age. The Plan
provides retirement, disability and death benefits and annual cost-of-living adjustments.

A Deferred Retirement Option Program (the "DROP") permits employees eligible for normal
retirement under the Plan to defer receipt of monthly benefit payments while continuing
employment with a FRS employer. An employee may participate in the DROP for a period not to
exceed 60 months after electing to participate, except that certain instructional personnel may
participate for up to 96 months. During the period of DROP participation, deferred monthly
benefits are held in the FRS Trust Fund and accrue interest.

The District's liability for participation in the Plan is limited to the payment of the required
contribution at the rates and frequencies established by law on future payrolls of the District. The
District's contributions to the Plan (including employee contributions) for the Fiscal Years ended
June 30, 2007, June 30, 2008, and June 30, 2009, totaled $19,443,791, $25,536,695, and $24,095,983,
respectively, which were equal to the required contributions for each fiscal year.

Effective July 1, 2002, the Public Employee Optional Retirement Program (the "PEORP") was
implemented as a defined contribution plan alternative available to all FRS members in lieu of the
Plan. Employer contributions are defined by law, but the ultimate benefit depends in part on the
performance of investment funds. The PEORP is funded by employer contributions that are based
on salary and membership class (Regular Class, Special Risk Class, etc.). Contributions are directed
to individual member accounts, and the individual members allocate contributions and account
balances among various approved investment choices. The required District's contribution made to
the program for the Fiscal Year ended June 30, 2009, totaled $2,930,251.

The District has established an early retirement program as authorized by Section 1012.685, Florida
Statutes, which it offers on a year-to-year basis (the "Early Retirement Plan"). Under the Early
Retirement Plan, the District purchased annuities for employees with at least 25 years of creditable
service but less than 30 years, as of June 30, 2009, who have reached the age of 55 but are less than
age 62 at the effective date of retirement and have applied for retirement under the FRS. The
District may also consider employees age 50 through 54 if the District determines that it is
economically feasible to do so. The annuities provide for the early retirees to receive additional
income after retirement, not to exceed the difference between their FRS early retirement benefits,


                                             Page 2 of 27
which are reduced by 5 percent for each year prior to age 62, and the benefits that would have been
received had they been eligible for full FRS benefits on the date of retirement. In the event an
employee has earned experience in a public school system in another state, the District may choose
to purchase out-of-state experience (up to five years) as is necessary to provide regular retirement
benefits. This experience may not be purchased in addition to an annuity. Four employees retired
and accepted early retirement benefits during the 2008-09 fiscal year. Annuities were purchased for
these individuals at a total cost of $113,377. Additional information regarding the retirement
programs is included in Notes 18 and 19 to the District’s Comprehensive Annual Financial Report
attached as Appendix A hereto.

The Board did cover the full amount by which pensions were reduced by the State Division of
Retirement and did not guarantee that an early retirement program would be offered in future years.

Other Post Employment Benefit Programs

In addition to its contributions under the State's retirement plan and the District's Plan described
above, the District provides other post-employment benefits ("OPEB") for certain of its retired
employees in the form of an implicit rate subsidy, by providing access to health insurance plans
requiring the use of the single "blended" or "common" rate for both active and retired employees.
The offering of this health insurance coverage is required by Section 112.0801, Florida Statutes.

As with all governmental entities providing similar plans, the District was required to comply with
the Governmental Accounting Standard's Board Statement No. 45 - Accounting and Financial
Reporting by Employers for Post-employment Benefit Plans other than Pension Plans ("GASB 45")
no later than its fiscal year ended June 30, 2008. The District implemented GASB 45 prospectively
on July 1, 2007. The District has historically accounted for its OPEB contributions on a pay as you
go basis. GASB 45 applies accounting methodology similar to that used for pension liabilities to
OPEB and attempts to more fully reveal the costs of employment by requiring governmental units
to include future OPEB costs in their financial statements. While GASB 45 requires recognition and
disclosure of the unfunded OPEB liability, there is no requirement that the liability of such plan be
funded.

In order to comply with GASB 45, the District retained Aon Consulting (the "Actuary"), to
actuarially review the District's OPEB liability and provide the District with a written valuation. The
valuation indicated that the Annual Required Contribution (the “ARC”) under GASB Statements 43
and 45 is $5,857,594 for the fiscal year ended June 30, 2009. The District has elected not to fund the
ARC at this time.

While the District does not know at this time what its ultimate OPEB liabilities will be in connection
with GASB 45 compliance in the future or how much of the related ARCs it will need to budget in
future years, it expects its OPEB liability to be significant, but manageable, within its normal
budgeting process. Additional information regarding the District's OPEB liabilities is included in
Note 14 to the annual financial report for the Fiscal Year ended June 30, 2009, attached as Appendix
A hereto.




                                            Page 3 of 27
Summary of General Fund Operations

                                         School District of Osceola County, Florida
                                           Summary of General Fund Operations
                                                                                   Audited                                                       Budget
                                             FY 2006                  FY 2007                  FY 2008                 FY 2009                  FY 2010
Revenues
 Federal                                $         6,088,727      $          525,812       $          538,065      $          548,711      $            502,355
 State Sources                                 209,981,954              231,999,178              224,301,617             197,705,620               200,555,371
 Local Sources                                 103,607,660              131,971,816              156,628,268             161,547,573               145,901,806
Total Revenues                          $      319,678,341       $      364,496,806       $      381,467,950      $      359,801,904       $       346,959,532
Expenditures
 Current - Education:
   Instruction                          $      182,684,066       $      214,991,033       $      237,466,400      $      225,527,599       $       239,224,361
   Pupil Personnel                              16,800,765               19,288,874               21,936,591              21,427,892                17,474,734
   Instructional Media                            4,671,555               5,017,945                5,295,391               5,260,439                 1,541,102
   Instruction & Curriculum
    Development                                 11,751,749               16,007,676               15,631,437              12,824,419                 7,793,927
   Instructional Staff Training                   4,201,524               2,459,025                5,967,557               4,520,008                 4,542,535
   Instruction Related Technology                 3,173,567               3,731,397                4,018,462               4,439,861                 3,470,876
   Board of Education                             1,414,978               1,823,258                2,150,486               1,596,656                 2,274,713
   General Administration                         1,636,352               1,581,152                1,776,522               1,641,402                 1,178,457
   School Administration                        16,698,835               19,189,405               21,535,297              20,961,935                24,798,211
   Facilities Acquisition
    and Construction                              4,515,348               5,663,966                6,609,899               4,180,202                 4,032,167
   Fiscal Services                                1,534,493               1,870,512                2,028,443               1,840,274                 2,041,968
   Food Services                                     74,943                   28,109                   14,317                  41,674                    36,859
   Central Services                               5,527,845               6,105,802                6,516,909               6,429,027                 6,291,233
   Pupil Transportation                         15,345,114               16,458,872               17,513,338              17,288,422                18,833,022
   Operation of Plant                           24,775,885               27,703,621               30,797,452              30,462,940                28,134,199
   Maintenance of Plant                           7,417,386               7,809,981                8,511,861               8,366,075                 8,667,509
   Administrative Tech Services                   3,038,578               2,860,025                3,439,294               3,431,664                 3,798,999
   Community Services                              220,292                  234,367                  280,161                 254,165                   222,330
 Fixed Capital Outlay:
   Facilities Acquisition
     and Construction                              178,548                    64,832                   76,320                  77,272
  Other Capital Outlay                            2,813,608               2,826,577                2,360,139                 900,393
 Debt Service                                     1,015,971                 746,352                  648,255                 627,200                   454,029
 Total Expenditures                     $      309,491,401       $      356,462,781       $      394,574,531      $      372,099,519       $       374,811,230
Excess (Deficiency) of
 Revenues over Expenditures              $      10,186,940        $       8,034,025        $     (13,106,581)      $     (12,297,615)      $       (27,851,698)

Other Financing Sources (Uses)           $        7,837,099       $      10,715,653        $      12,769,251       $      17,009,789      $      12,983,000.00
Excess (Deficiency) of Revenues
 and Other Sources Over
 Expenditures and Other Uses             $      18,024,039        $      18,749,678       $         (337,330)      $       4,712,174       $       (14,868,698)
Beginning Fund Balance                   $      18,344,119        $      36,368,158        $      55,117,836       $      54,780,506       $        59,492,680
Ending Fund Balance                      $      36,368,158        $      55,117,836        $      54,780,506       $      59,492,680       $        44,623,982
                              Source:   Audited financial statements for the Fiscal Year ended June 30, 2006, 2008, and 2009 prepared by Cherry, Bekaert &
                                        Holland; Audited financial statements for the Fiscal Year ended June 30, 2007 prepared by the State of Florida Auditor
                                        General’s Office; The School District of Osceola County, Florida, Annual Budget for the Fiscal Year ended June 30,
                                        2010.




                                                                      Page 4 of 27
        Summary of Capital Projects Funds

                                   School District of Osceola County, Florida
                            Summary of Revenues and Expenses - Capital Projects Funds

                                                                                Audited                                               Budget
                                            FY 2006               FY 2007                 FY 2008             FY 2009                FY 2010
Revenues
  Federal                              $              -      $              -        $              -
  State Sources                                15,753,496            10,628,866             94,109,692           14,295,318                1,141,938
  Local Sources                                77,661,511            90,761,948             80,220,362           57,849,649               42,352,638
  Total Revenues                        $      93,415,007    $      101,390,814      $     174,330,054    $      72,144,967    $          43,494,576


Expenditures
 Current - Education:
  Facilities Acquisition
     and Construction                  $       12,065,433    $       10,871,447      $      13,098,603           11,015,242             195,746,004
 Fixed Capital Outlay:
   Facilities Acquisition
     and Construction                          62,012,569            73,359,475             51,439,120           97,398,991
 Other Capital Outlay                          10,030,704             2,204,524             11,114,551            8,099,273
 Debt Service                                      15,351             1,098,445              2,751,009               46,838
 Total Expenditures                     $      84,124,058     $      87,533,891      $      78,403,283    $    116,560,344      $       195,746,004


Excess (Deficiency) of
 Revenues over Expenditures             $       9,290,949     $      13,856,923      $      95,926,771    $     (44,415,377)   $        (152,251,428)


Other Financing Sources (Uses)         $      (21,773,203)   $       36,984,000      $     (26,684,420)   $     (33,475,491)   $         (29,580,233)


Excess (Deficiency) of Revenues
 and Other Sources Over
 Expenditures and Other Uses            $     (12,482,254)    $      50,840,923      $      69,242,351    $     (77,890,868)   $        (181,831,661)


Beginning Fund Balance                 $      162,145,912    $      149,663,658      $     200,504,581    $    269,746,932     $        191,856,064
Adjustment to Fund Balance
Ending Fund Balance                    $      149,663,658    $      200,504,581      $     269,746,932    $    191,856,064     $          10,024,403


                             Source:   Audited financial statements for the Fiscal Year ended June 30, 2006, 2008, and 2009 prepared by Cherry,
                                       Bekaert & Holland; Audited financial statements for the Fiscal Year ended June 30, 2007 prepared by the State
                                       of Florida Auditor General’s Office; The School District of Osceola County, Florida, Annual Budget for the
                                       Fiscal Year ended June 30, 2009.




                                                                     Page 5 of 27
Indebtedness

                                  School District of Osceola County, Florida
                                    Summary of General Long-Term Debt
                                              As of June 30, 2009
                              General Description                                          Outstanding Balance
                                        (1)
       Self-Supporting State Bonds
           Series 1999A                                                                                  925,000.00
           Series 2000A                                                                                   25,000.00
           Series 2001A                                                                                1,020,000.00
           Series 2002A                                                                                  665,000.00
           Series 2003A                                                                                1,590,000.00
           Series 2004A                                                                                1,305,000.00
           Series 2005A                                                                                1,470,000.00
           Series 2005AR                                                                               4,340,000.00
           Series 2005BR                                                                               1,595,000.00
           Series 2006A                                                                                1,665,000.00
           Plus unamortized bond premium                                                                 193,963.64
           Less unamortized bond discount                                                                (13,772.10)
       District Revenue Bonds:
           Series 2001 Sales Tax Revenue Bonds (2)                                                     3,290,000.00
           Series 2007A Sales Tax Revenue Bonds (2)                                                   44,230,000.00
           Series 2007B Sales Tax Revenue Bonds (2)                                                   32,020,000.00
           Plus unamortized bond premium                                                               3,621,055.76
           Less deferred amount on refunding                                                           (1,969,560.64)
       Certificates of Participation
           Series 1999A                                                                               34,415,000.00
           Series 2000A and 2000B (3)                                                                    965,000.00
           Series 2002A                                                                                1,295,000.00
           Series 2004A, 2004B, and 2004C                                                             70,890,000.00
           Series 2005A (3)                                                                           11,730,000.00
           Series 2007                                                                                62,390,000.00
           Plus unamortized bond premium                                                               1,180,563.00
           Less deferred amount on refunding                                                           (5,637,284.00)
       Notes Payable                                                                                  23,836,843.00
       Education Facilities Benefit District Agreement Payable (4)                                     9,139,035.00
       Installment - Purchase Payable                                                                  2,554,486.00
       Liability for Compensated Absences                                                             14,774,116.00
       Estimated Liability for Arbitrage Rebate                                                                  -
           Total                                                                            $        323,504,445.66




     (1)      Bonds are issued by the State Board of Education on behalf of the District, and are secured by a pledge
              of the District’s portion of the State assessed motor vehicle license tax. The State’s full faith and credit is
              also pledged as security for such bonds.
     (2)      Payable from certain sales tax revenues of the District.
     (3)      Not related to the Master Lease. See “RISK FACTORS – Additional Indebtedness and Obligations”
              herein.
     (4)      See “RISK FACTORS – Additional Indebtedness and Obligations” herein.

     Source: The School District of Osceola County, Florida.



                                                       Page 6 of 27
Assessed Valuation

The following table shows the total assessed value and total taxable value for operating millage in
each of the past ten years.

                                    Assessed Value of Taxable Property
                                    Osceola County, Florida (Unaudited)



       Tax                           Real Property         Personal Property              Total
       Year       Fiscal Year        Taxable Value          Taxable Value(1)          Taxable Value

       1998          1999               6,065,185,546             850,891,201            6,916,076,747
       1999          2000               6,638,571,770             901,954,802            7,540,526,572
       2000          2001               7,470,361,984             951,171,027            8,421,533,011
       2001          2002               8,664,276,021           1,047,438,350            9,711,714,371
       2002          2003               9,814,249,330           1,181,210,644           10,995,459,974
       2003          2004              10,761,639,276           1,283,721,639           12,045,360,915
       2004          2005              12,259,604,996           1,332,604,507           13,592,209,503
       2005          2006              14,717,777,890           1,423,918,502           16,141,696,392
       2006          2007              20,226,913,679           1,575,555,790           21,802,469,469
       2007          2008              24,673,342,157           1,656,646,223           26,329,988,380


    Source: Osceola County, Florida Comprehensive Annual Financial Report for the Fiscal Year Ended
    September 30, 2008 Osceola County Property Appraiser.

     (1)      Includes centrally assessed property consisting of the County’s share of railroad and telegraph systems
              which are assessed by the State of Florida.


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                                                  Page 7 of 27
     Historical Millages


The following table contains historical millage levels for the School District for the fiscal years
ended June 30, 2005-2009 and budget millage for the fiscal year ending June 30, 2010.

                                       School District of Osceola County, Florida
                                                 School District Levies

                                                                     FISCAL YEAR
                                                                        Actual                         Budgeted
TAX LEVY                                        2005       2006         2007       2008      2009        2010


GENERAL FUND


District School Tax
  State - Required Local Effort                   5.540      5.369         5.022     5.052     5.059       5.165
  Local - Discretionary                           0.510      0.510         0.510     0.510     0.498       0.748
          Supplemental Discretionary              0.179      0.250         0.250     0.210     0.206       0.250
  Total General Fund                              6.229      6.129         5.782     5.772     5.763       6.163


DEBT SERVICE - INTEREST & SINKING


  Series 1992                                     0.285      0.238         0.000     0.000     0.000       0.000
 Total Debt Service Fund                          0.285      0.238         0.000     0.000     0.000       0.000


CAPITAL PROJECTS FUND


  Capital Outlay Millage                          2.000      2.000         2.000     2.000     1.750       1.500
  Total Capital Projects Fund                     2.000      2.000         2.000     2.000     1.750       1.500


TOTAL DEBT SERVICE FUNDS AND
CAPITAL PROJECTS FUNDS                            2.285      2.238         2.000     2.000     1.750       1.500




TOTAL DISTRICT MILLAGE LEVY                       8.514      8.367         7.782     7.772     7.513       7.663




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                                                          Page 8 of 27
Property Tax Levies

                           Property Tax Levies and Collections
                            Last Ten Fiscal Years (Unaudited)
                                     Collected in the Fiscal Year
                                             of the Levy                              Total Collections to Date
                                                                    Collections in                      Percent
 Fiscal   Tax     Taxes Levied for                      Percent      Subsequent          Total             of
 Year     Year     the Fiscal Year      Amount         Collected        Years        Tax Collections     Levy

 1999     1998         46,092,693        44,716,145     97.01%             73,934        44,790,079    97.17%
 2000     1999         49,957,002        48,151,358     96.39%            157,268        48,308,626    96.70%
 2001     2000         57,385,808        54,953,721     95.76%            127,836        55,081,557    95.98%
 2002     2001         65,617,770        62,757,132     95.64%            370,330        63,127,462    96.20%
 2003     2002         74,664,828        70,749,980     94.76%          1,616,473        72,366,453    96.92%
 2004     2003         85,181,261        81,930,483     96.18%            413,973        82,344,456    96.67%
 2005     2004         96,365,005        92,511,489     96.00%            429,269        92,940,758    96.45%
 2006     2005        118,206,452       114,029,423     96.47%            425,355       114,454,778    96.83%
 2007     2006        159,045,128       153,237,992     96.35%             67,078       153,305,070    96.39%
 2008     2007        162,326,265       155,767,295     95.96%             12,850       155,780,145    95.97%

Source: Osceola County, Florida Comprehensive Annual Financial Report for the Fiscal Year Ended
September 30, 2008



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                                                  Page 9 of 27
                                        RISK FACTORS

Additional Indebtedness and Obligations

The School Board may issue additional indebtedness other than in connection with the Master Lease
secured by or payable from revenues which would otherwise be available to make Lease Payments
without the consent of the Certificate Holders. The incurrence of such additional indebtedness by
the School Board may adversely affect the School Board’s ability to make Basic Lease Payments
under the Leases.

Four Corners Charter School

As of January 15, 2000, the District entered into lease-purchase financing arrangement (the “Charter
School Lease-Purchase Arrangement”) with the Florida School Boards Association, Inc. and Four
Corners Charter School, Inc. (the “Company”) pursuant to which certain public educational facilities
would be acquired, constructed and equipped (the “Charter School”). The Company was organized
as a Florida not-for-profit corporation with a five member board of directors three of which are
from the School Board and two of which are from the School District of Lake County, Florida. The
location of the Charter School was determined so that students from Osceola, Orange, Lake and
Polk Counties could attend the Charter School. The Company was granted a 10-year charter (the
“Operating Charter”) to operate the Charter School, which Operating Charter is subject to certain
renewals at the option of the School Board. The Operating Charter expires in June 2010. On
January 19, 2010, the School Board approved to renew the Four Corners Charter School Contract
for three school years. The renewed Operating Charter shall expire at the conclusion of the 2012-
2013 school year. The Company may request an extension of the renewed Operating Charter for an
additional two school years during the 2012-2013 school year.

Pursuant to the Charter School Lease-Purchase Arrangement, the Charter School is leased by the
District to the Company, as a sub-lessee. In order to finance the acquisition, construction and
equipping of the Charter School, Certificates of Participation, Series 2000A, Series 2000B, and Series
2000C were issued in February 2000 in the aggregate principal amount of $17,080,000. The Series
2000C Charter School Certificates are no longer outstanding and a portion of the Series 2000A and
Series 2000B Charter School Certificates were refinanced with a portion of the proceeds of the
Certificates of Participation, Series 2005. The Series 2000B Charter School Certificates are no longer
outstanding. The Series 2000A and Series 2005 Charter School Certificates are currently outstanding
in the aggregate principal amounts of $965,000 and $11,730,000, respectively, and are collectively
referred to as the Charter School Certificates.

The Company is required by the terms of the Charter School Lease-Purchase Arrangement to make
lease payments to the District (the “Charter School Rent Payments”) in amounts sufficient to pay
debt service on the Charter School Certificates. The Charter School Certificates have a final maturity
of August 1, 2024, and the average annual debt service thereon is approximately $975,000. The
Company may not charge tuition or fees (other than those types of fees that are normally charged by
other public schools). The Company derives its funding principally from the District, in accordance
with a statutory formula based on the number of weighted full-time equivalent students attending
the Charter School. The District and the other participating school districts receive special
appropriations from the State for funding of the Company and the Charter School. For Fiscal Year


                                           Page 10 of 27
2008-09 the District distributed approximately $6.7 million to the Company. The District has
budgeted approximately $6.6 million to be distributed to the Company in Fiscal Year 2009-10. To
date, the State special appropriations have been sufficient to satisfy the lease-purchase payments
relating to the Charter School Certificates.

Pursuant to the Charter School Lease-Purchase Arrangement, the lease payments from the School
Board to the Association (which are to be applied to payment of debt service on the Charter School
Certificates) are payable solely from (1) the Charter School Rent Payments so long as the sub-lease
to the Company is in effect and (2) upon the expiration or termination of such sub-lease, legally
available revenues of the District appropriated by the School Board for such purpose from current
or other funds authorized by law. The current term of the sublease expires on June 30, 2010. The
Company and the District will renew the sublease prior to its expiration. The School Board is not
legally required to appropriate monies to make lease payments with respect to the Charter School
Lease-Purchase Arrangement; provided, however, upon the expiration or termination of the sub-
lease to the Company, if the School Board appropriates sufficient funds to make Lease Payments
under the Master Lease it is required to appropriate sufficient funds to make lease payments with
respect to the Charter School Lease-Purchase Arrangement. To date, the Charter School Rent
Payments have been sufficient.

Bellalago Academy

The School Board has entered into a funding agreement dated as of December 16, 2003, as
amended (the “Funding Agreement”) with the Bellalago Educational Facilities Benefit District (the
Bellalago Benefit District”) and Avatar Properties Inc. to provide for the funding of a charter school
(the “Bellalago Academy”) to be constructed in a new residential community within the District
known as Bellalago. Pursuant to the terms of the Funding Agreement, the debt service on
indebtedness issued to finance the acquisition, construction and equipping of the Bellalago Academy
shall be paid from the proceeds of certain impact fees levied by Osceola County, proceeds of special
assessments levied by the Bellalago Benefit District, certain monies appropriated by the State (the
“State Charter School Funds”) and other monies provided by the School Board. According to
current projections, the School Board expects its required contribution not to exceed $15,000 per
year for Fiscal Year 2009-10 and the last year of the Funding Agreement (Fiscal Year 2034-2035). It
currently expects its required contributions to range from approximately $218,000 to $791,000 per
year over the remaining years, averaging approximately $609,000 each year during such period of
time. However, the School Board could be responsible for significantly higher annual contributions
if the other funding sources are substantially less than current projections. There is no assurance that
the State will continue to provide State Charter School Funds in the future or at current levels. The
School Board expects to satisfy its obligations under the Funding Agreement from the herein
described Local Option Millage. Operating costs with respect to the Bellalago Academy will be
funded in the same manner as other charter schools within the District, principally through monies
provided by the State. The School Board’s auditors have indicated that the School Board’s
obligations with respect to the Funding Agreement should be characterized as a debt. The School
Board estimates the principal amount of the debt to be $9,139,035 as of June 30, 2009.

Local Option Millage Revenues

The amounts derived by the District from the levy of the Local Option Millage can be affected by a
variety of factors which are not within the School Board’s control, including, without limitation,


                                            Page 11 of 27
fluctuations in the assessed valuation of the property within the District and the amount of general
business activity, growth and new construction which occurs within the District. There can,
therefore, be no assurances that such revenues will not decrease in the event that such growth and
new construction, for whatever reason, decreases or ceases altogether within the District. See
“DISTRICT REVENUES – Local Revenue Sources.” The amounts derived from the levy of the
Local Option Millage may also be affected by changes in applicable law. See “Recent Legislative
Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes” for information
regarding legislation that reduced the Local Option Millage.

State Revenues

A large portion of the District's funding is derived from State sources. See "DISTRICT
REVENUES - State Revenue Sources." A significantly large percentage of such State revenues are
generated from the levy of the State sales tax. The amounts budgeted for distribution from the State
to the District are subject to change in the event that projected revenues are not realized. The State
has recently experienced and is currently experiencing a significant shortfall in sales tax revenues,
which has resulted in significant budget cuts. The State Legislature ended the 2008 regular session
focused on reducing the State budget by an estimated $5.7 billion in response to such shortfall. This
is in addition to budget cuts previously made in a special session held in Fall, 2007. The impact to
the District for Fiscal Year 2007-08 was an approximately $19.0 million reduction in State revenues.
The State Legislature concluded a special session on January 16, 2009 focused on reducing the State
budget by an additional estimated $2.3 billion. The impact to the District was an approximately
$23.1 million reduction in State revenues for the 2008-09 Fiscal Year.

                           [Remainder of Page Intentionally Left Blank]




                                           Page 12 of 27
                                   DISTRICT REVENUES
The School Board derives its revenues from certain State and local sources. The major categories of
these revenue sources are briefly described under the following subheadings.

Local Revenue Sources

Local revenue for the support of school districts in the State is derived almost entirely from real and
tangible personal property taxes. School districts in the State are permitted to levy ad valorem
property taxes separately for (i) operational purposes, (ii) the payment of debt service, and (iii)
capital outlays and maintenance of school facilities. The amount of each such levy is subject to
various constitutional and statutory limitations. In addition, the District earns interest on cash
invested and collects other miscellaneous revenues.

The School Board intends to make Lease Payments on the Leases from monies derived from a levy
of a non-voted, real and tangible personal property tax millage, known as the "Local Option Millage
Levy," for capital outlay and maintenance purposes. In its 2008 session, the Florida Legislature
reduced the maximum amount of the levy from the 2.0 mills then in effect to 1.75 mills and in its
2009 session, the Florida Legislature further reduced the maximum levy from 1.75 mills to 1.50 mills
(see "Recent Legislative Initiatives and Constitutional Amendments Affecting Ad Valorem Taxation
– Reduction in Local Option Millage Levy; Further Reduction in Local Option Millage Levy" herein for
information on such reduction and exceptions thereto). This levy may be used for new construction
and remodeling; site acquisition and site improvement; auxiliary or ancillary facilities; maintenance,
renovation and repair of existing school plants; school bus purchases; the purchase, lease-purchase
or lease of new and replacement equipment; and amounts payable pursuant to lease purchase
agreements for educational facilities and sites. Florida law restricts the use of the Local Option
Millage Levy for payments on lease purchase agreements for educational facilities and sites to three-
fourths (75%) of the millage levied; provided, however, that for fiscal year 2009-10, such limitation
is not applicable for lease-purchase agreements entered into prior to June 30, 2009. Since revenues
from the levy of the Local Option Millage Levy may be used for, but are not pledged to, the
payment of Basic Lease Payments under the Transaction Leases, the failure of the District to levy all
or a portion of the Local Option Millage Levy might have an adverse effect on available revenues
from which the School Board may appropriate funds to make Basic Lease Payments. In the event
that revenues generated from the Local Option Millage Levy are insufficient to make payments
under a lease-purchase agreement entered into prior to June 30, 2008, an amount equal to the
revenue generated from 0.50 mills of the operating levy may be used to make such Lease Payments.
Additionally, pursuant to recently enacted legislation, if the revenue from 1.50 mills is insufficient to
make payments under a lease-purchase agreement entered into prior to June 30, 2009 or to meet
other critical capital needs, a school board may elect to levy up to 0.25 for capital purposes in lieu of
a like amount of discretionary operating millage. Such legislation further authorizes district school
boards, by a super majority vote, to levy an additional 0.25 mills for critical capital outlay needs or
for critical operating needs. In order for a school district to continue this levy it must be approved
by the voters of such school district in the next general election. See "Recent Legislative Initiatives
and Constitutional Amendments Affecting Ad Valorem Taxation – Reduction in Local Option Millage
Levy, Further Reduction in Local Option Millage Levy" herein.




                                             Page 13 of 27
For operational purpose, the Florida Legislature annually places requirements on each school district
to levy a millage rate that is defined by law to be the “district required local effort” for those school
districts desiring to participate in the allocation of State funds available to school districts. In 2008–
09 the District’s required local effort was 5.059 mills. For Fiscal Year 2009-10, the District's required
local effort is 5.165 mills. School boards are also authorized to levy an additional "discretionary
millage" for operations, not to exceed an amount established annually by the Legislature. In 2008-09,
the discretionary millage for all school districts, including the District, was .704. For Fiscal Year
2009-10 the discretionary millage is .748 mills. In prior recent years, school districts in the State have
been authorized to levy a supplemental discretionary millage in an amount not to exceed .25 mills.
Such additional millage was intended to raise $100 per full-time equivalent student. The Board levied
a supplemental discretionary millage of .206 mills for Fiscal Year 2008-09. Due to a change in
applicable law, the District is not permitted to levy any supplemental discretionary millage for Fiscal
Year 2009-10. However, the District has included a like amount (0.25 mills) as part of the basic
discretionary millage for Fiscal Year 2009-10. An additional 0.25 mills is also budgeted to be levied
for critical operating needs as authorized by certain recently enacted legislation (see "Recent
Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes - Further
Reduction in Local Option Millage" herein). Monies generated from the levy of the required local effort
millage are not available to make Lease Payments on the Transaction Leases.

Historical operating millage rates (tax per $1,000 of assessed value) are as follows:

                                              2004-2005       2005-2006        2006-2007       2007-2008        2008-2009       2009-2010


      Required Local Effort                        5.540            5.369            5.022           5.052            5.059           5.165
      Discretionary                                0.689            0.760            0.760           0.720            0.704           0.748
                                        (1)
      Critical Operating Needs Levy                 N/A             N/A              N/A              N/A             N/A             0.250
      Total Operating Millage                      6.229            6.129            5.782           5.772            5.763           6.163


      (1) Authorized pursuant to recent legislative amendments to Section 1011.81, Florida Statutes. See "AD VALOREM TAXATION -
      Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem Taxes - Further Reduction in Local Option Millage
      Levy " herein.


Budgeted revenues from ad valorem taxes are based on applying millage levies to ninety-five percent
(95%) of the non-exempt assessed valuation of real and personal property. Historically, the local
taxes have been received at less than one hundred percent (100%) of assessed valuation due to the
discounts for early payment. The County usually collects approximately ninety-six percent (96%) of
the levied taxes.

Ad valorem tax receipts for operating purposes increased from $145.25 to $150.14 million for the
2007-08 and 2008-09 Fiscal Years, respectively. The District has budgeted approximately $133.38
million of ad valorem tax receipts for operating purposes for the Fiscal Year 2009-10.

Commencing in calendar year 2000, the District began receiving a portion of a one-cent
infrastructure sales surtax (the “Sales Surtax”) that is levied by the County on all taxable sales of
tangible personal property sold at retail within the County. Pursuant to an interlocal agreement with
the County, the District received 10% of the Sales Surtax receipts during calendar years 2000
through and including 2005 and 25% of the Sales Surtax receipts during the calendar years 2006
through and including 2025 (the amounts to be received by the District, the “Sales Tax Revenues”).


                                                             Page 14 of 27
The District issued $42,325,000 of its Sales Tax Revenue Bonds, Series 2001 (the “Series 2001 Sales
Tax Bonds”) in May 2001, and pledged proceeds of the Sales Surtax as security therefore. The
District issued its Sales Tax Revenue Bonds, Series 2007A and Sales Tax Revenue Refunding Bonds,
Series 2007B in the aggregate principal amount of $79,835,000 (collectively, the “2007 Sales Tax
Bonds”) on April 12, 2007. A portion of the proceeds of the Sales Tax Revenue Refunding Bonds,
Series 2007B were used to refund a portion of the 2001 Sales Tax Bonds. The 2001 Sales Tax Bonds
and the 2007 Sales Tax Bonds are currently outstanding in the aggregate principal amount of
$3,290,000 and $76,250,000, respectively. Sales surtax proceeds for the District for Fiscal Year 2008-
09 were $9.1 million and are budgeted to be approximately $8.6 million for Fiscal Year 2009-10.

The District also receives educational facilities impact fees which are collected for all new residential
construction in the County. The District received $23,380,093 in Fiscal Year 2007-08, $9,380,988 in
Fiscal Year 2008-09, and estimates receiving approximately $5,000,000 in Fiscal Year 2009-10.
Effective October 1, 2008, Osceola County increased its educational system impact fees to $10,207
per single family residential unit, $6,715 per multi-family residential unit and $4,897 per mobile
home.

State Revenue Sources

Capital Outlay. State revenues represented $14.3 million or approximately 19.21% of the District’s
total capital outlay revenues for Fiscal Year 2008-09. Budgeted State capital outlay revenues available
to the District are expected to be $3.9 million or approximately 6.7% of the District’s budgeted total
capital outlay revenues in the adopted budget for Fiscal Year 2009-10. Many of the capital outlay
revenues budgeted to be received in Fiscal Year 2009-10 are not necessarily recurring items.

The primary source of State educational funding contributions to the District’s capital outlay
requirements historically has been the Florida Public Education Capital Outlay Program (“PECO”).
The method of allocation of funds to the district school boards is provided by State law based upon
a statutory formula, components of which are the number of students in various districts and the
proposed uses of the funds by the various districts. The Commissioner of Education administers the
PECO program and allocates or reallocates funds as authorized by law. Under PECO, the District
received $10,719,836 for Fiscal Year 2008-09, representing both new construction allocations and
renovation allocations. The District is budgeted to receive approximately $527,713 for Fiscal Year
2009-10.

The District also receives motor vehicle license revenues, also known as capital outlay and debt
service (“CO&DS”) funds. CO&DS funds can be used to make lease purchase payments, but only if
the lease-purchase facility appears on the project priority list approved by the State Board of
Education. None of the Facilities currently subject to the Master Lease are on the project priority
list.

On November 24, 1997, the Governor of the State of Florida signed into law a bill creating the
"Public School Capital Outlay Program Act" (the "Act"). Among the several programs established
by the Act is the "Classrooms First Program," which provides for the issuance by the State of
revenue bonds, the proceeds of which are distributed to the various school districts based upon a
formula similar to the formula used in allocating PECO funds. The proceeds of such revenue bonds
must be applied by a school district for new construction, remodeling, renovation or major repairs,
with a priority onconstruction of new, permanent classroom facilities. If a school district certifies


                                             Page 15 of 27
that it has no unmet need for permanent classroom facilities or if its unmet needs are less than its
proposed allocation of the revenue bond proceeds, it may choose to receive an annual distribution
of State lottery revenues in lieu of all or a portion of its allocation of State bond proceeds. Such
annual distribution must be used to construct, renovate, remodel, repair or maintain educational
facilities. Such funds, whether in the form of State revenue bond proceeds or annual distributions,
may not be used to make lease purchase payments. In addition, in order to receive any of such State
funds, a school district must fully utilize State bonding capacity relating to its CO&DS funds
allocation. In Fiscal Year 2008-09, the District received approximately $451,339 in State bond
proceeds with respect to such CO&DS funds. The District is budgeted to receive $614,225 in
CO&DS funds in Fiscal Year 2009-10. The District did not receive any moneys under the
Classrooms First Program. The District does not expect to receive any moneys under the
Classrooms First Program in Fiscal Year 2009-10. In order to continue participation in the
Classrooms First Program, the District may be required to utilize additional State bonds payable
from CO&DS funds in the future. No plans have been made regarding such issuance at this time.

The District did not receive any Classrooms for Kids monies in Fiscal Year 2008-09 and does not
expect to receive these monies for the 2009-10 Fiscal Year.

Under the Act the District may be entitled to receive other State revenues pursuant to other
programs if the District achieves certain standards relating to its capital outlay efforts. Some of such
revenues may be used to make lease purchase payments. It is not possible at this time to determine
or estimate the amount of such State revenues, if any, that the District may receive in the future.

Operating Revenue The three primary sources of educational funding from the State are (i) basic
Florida Educational Finance Program (“FEFP”) receipts, (ii) FEFP categorical program receipts,
and (iii) certain other specified revenue sources.

The major portion of State support is distributed under the provisions of the FEFP, which was
enacted by the Florida Legislature in 1973. Basic FEFP funds are provided on a weighted full-time
equivalent student (“FTE”) basis using a formula that takes into account varying program cost
factors and district cost differentials. The program cost factors which are used to determine the level
of each school district’s FEFP funding are determined by the Florida Legislature. The amount of
FEFP funds disbursed by the State is adjusted four times during each year to reflect changes in FTE
and in variables comprising the weighing formula. In addition, the level of State funding is adjusted
during each year to compensate for increases or decreases in ad valorem tax revenue resulting from
adjustments to the valuation of non-exempt property in the County. General Fund receipts from
FEFP were $142.6 million for the 2007-08 Fiscal Year and $118.2 million for the 2008-09 Fiscal
Year. The district has budgeted approximately $133.2 million of FEFP General Fund receipts for
the 2009-10 Fiscal Year.

FEFP categorical program receipts are lump sum appropriations from the State intended to
supplement local school district revenues to enhance the delivery of educational and support
services by each district. Among the larger categorical programs are the programs for class size
reduction, school bus transportation and instructional materials. Allocations for these categorical
appropriations are based on funding formula and discretionary State Department of Education
grants. The majority of the funds available require actual appropriation by the Board for the
purposes for which they were provided. Total State categorical aid (excluding Class Size Reduction
funds) was $23.2 million in the 2007-08 Fiscal Year and $20.9 million for the 2008-09 Fiscal Year.


                                            Page 16 of 27
Total State categorical aid is budgeted at $17.2 million for the 2009-10 Fiscal Year.

The District also receives State educational funding from a variety of miscellaneous State programs.
These sources include Racing Commission funds, State mobile home license tax revenues, and the
Florida State Lottery.

Special Revenue Sources

The District also receives certain local, State and federal monies, substantially all of which are
restricted for specific programs. Programs funded with these special revenue sources in the past
include school food service operations and programs financed through the Educational
Handicapped Act, the Education Consolidation and Improvement Act and other federally financed
programs.

Constitutional Amendments Relating to Class Size Reduction and Pre-K Education

In the November 5, 2002, general election, the voters of the State of Florida approved two
amendments to the State Constitution that may affect the District’s operations. Amendment 9 to the
State Constitution requires that the State Legislature provide funding for sufficient classrooms so
that class sizes can be reduced to certain constitutional class size maximums by the beginning of the
2010 school year. Amendment 9 and Section 1003.03, Florida Statutes, which implements
Amendment 9, collectively, are referred to herein as the “Class Size Legislation.”

The Class Size Legislation establishes constitutional class size maximums limiting students per class
to no more than 18 for pre-kindergarten through 3rd grade, 22 for grades 4 through 8 and 25 for
grades 9 through 12. These maximums were originally scheduled to be implemented by the
beginning of the 2010 school year. School districts that exceeded these class size maximums were
required to reduce the average number of students per class in each of these grade groupings by at
least two students each year, beginning with the 2003-2004 fiscal year. For fiscal years 2003-04
through 2005-06, compliance for each of the grade groupings was calculated to be the average at the
district level. For fiscal years 2006-07 through 2008-09, compliance was scheduled to be determined
at the average on a school-by-school basis. For fiscal year 2009-10 and thereafter, compliance was
scheduled to be determined on an individual classroom level.

The Class Size Legislation further creates an “Operating Categorical Fund for Class Size Reduction,”
the “Classroom for Kids Program,” the “District Effort Recognition Grant Program” and the
“Class Size Reduction Lottery Revenue Bond Program” to provide funding programs for capital
outlays and operating expenditures necessary in relation to these mandated class size reductions.

The Class Size Legislation requires each school board to consider implementing various policies and
methods to meet these constitutional class sizes, including encouraging dual enrollment courses,
encouraging the Florida Virtual School, maximizing instructional staff, reducing construction costs,
using joint-use facilities, implementing alternative class scheduling, redrawing attendance zones,
implementing evening and multiple sessions and implementing year-round and non-traditional
calendars. Failure to reduce class sizes by at least two students each year until the constitutional
maximum is met may result in transfer of class size reduction operating funds to fixed capital outlay
appropriations, required implementation of year-round schools, double sessions, extended school
year or rezoning, implementation of a state-mandated constitutional compliance plan or withholding


                                            Page 17 of 27
of various State funds.

The District is presently in compliance with current constitutional class size maximums. During its
2009 session, the State Legislature adopted, and the Governor signed into law, legislation to delay
implementation of the mandated class size reductions for one year. Such legislation provides that
compliance with the Class Size Legislation will be determined on a school-by-school basis through
and including fiscal year 2009-10, and that final compliance on an individual classroom basis will be
delayed until fiscal year 2010-11. The District anticipates it will be in compliance with the Class Size
Legislation on an individual classroom basis by fiscal year 2010-11. In the event a school district is
not in compliance with such requirements, the legislation provides that the State shall reduce
categorical funds due to such school district for operational purposes. While the Class Size
Legislation suggests that the State Legislature, and not local school districts, is generally responsible
for the cost of compliance, it is uncertain what effect implementation might have upon the District.
There can be no assurance that these funds will be sufficient to meet the capital and facility needs of
the District required by the Class Size Legislation. Further, there can be no assurance that the
District will have funds sufficient to meet the capital and facility needs of the District required by
the Class Size Legislation or that compliance therewith will not adversely affect other capital needs
and operating costs of the District.

In the November 5, 2002, general election, the voters of the State of Florida also approved
Amendment 8 to the State Constitution which provides that every 4-year old child in the State shall
be offered a free, high quality pre-kindergarten learning opportunity by the State no later than the
2005 school year. In furtherance thereof, Section 411.012, Florida Statutes, created a voluntary
universal pre-kindergarten education program for four-year olds within the Agency for Workforce
Innovation and directed the State Board of Education to conduct a study and make
recommendations for this education program regarding curriculum and standards, quality of
instruction, delivery system, assessment and evaluation, funding and best practices.

During the 2004-A special session, the Florida Legislature passed House Bill I-A, codified in Part V
of Chapter 1002, Florida Statutes, which creates a statewide Voluntary Pre-kindergarten Education
Program. House Bill 1-A, as codified in Part V, Chapter 1002, Florida Statutes, is referred to herein
as the “Pre-K Legislation.” Among other things, the Pre-K Legislation provides eligibility and
enrollment requirements, authorizes parents to enroll their children in a school-year pre-
kindergarten (“Pre-K”) program delivered by a private Pre-K provider, a summer program delivered
by a public school or private Pre-K provider or, if offered in a school district that meets class-size
reduction requirements, a school year Pre-K program delivered by a public school. The Pre-K
Legislation also requires school districts to deliver summer Pre-K programs and permits school
districts to deliver school-year Pre-K programs. Additionally, the Pre-K Legislation appropriates
State funds to finance the Pre-K programs and provides the method for calculating the funds
allocated to each Pre-K program provider.

The Pre-K Legislation provides State funding for the Pre-K programs. The District currently has
approximately 825 students in its Pre-K Program. To date, there has not been any adverse impact to
the District’s financial situation as a result of the institution of the Pre-K Program as the State
funding levels have been sufficient. However, it is uncertain at this time what effect any substantial
increase in the number of Pre-K students or any decrease in the level of State funding may have
upon the District or the School Board in the future.



                                             Page 18 of 27
Recent Legislative Initiatives and Constitutional Amendments Concerning Ad Valorem
Taxes

Constitutional amendments related to ad valorem exemptions. On January 29, 2008, in a special election held
in conjunction with Florida's presidential primary, the requisite number of voters approved
amendments to the State Constitution exempting certain portions of a property's assessed value
from taxation. The following is a brief summary of certain important provisions contained in the
approved amendments:

    1. Provides for an additional exemption for the assessed value of homestead property between
       $50,000 and $75,000, thus doubling the existing homestead exemption for property with an
       assessed value equal to or greater than $75,000. This exemption does not apply to school
       district taxes.
    2. Permits owners of homestead property to transfer up to $500,000 of their "Save Our
       Homes" benefit to a new homestead property purchased within two years of the sale of their
       previous homestead property to which such benefit applied if the just value of the new
       homestead is greater than or equal to the just value of the prior homestead. If the just value
       of the new homestead is less than the just value of the prior homestead, then the assessed
       value of new homestead property shall equal the just value of the new homestead divided by
       the just value of the prior homestead multiplied by the assessed value of the prior
       homestead. The Save Our Homes amendment generally limits annual increases in ad
       valorem tax assessments for those properties with homestead exemptions to the lesser of
       three percent (3%) or the annual rate of inflation. This exemption applies to all taxes,
       including school district taxes.
    3. Exempts from ad valorem taxation $25,000 of the assessed value of property subject to
       tangible personal property tax. This exemption applies to all taxes, including school district
       taxes.
    4. Limits increases in the assessed value of non-homestead property to 10% per year, subject to
       certain adjustments. The cap on increases would be in effect for a 10 year period, subject to
       extension by an affirmative vote of electors. This limitation does not apply to school district
       taxes.

The amendments were effective for the 2008 tax year (2008-09 Fiscal Year for local governments).
While certain members of the Florida Legislature publicly indicated that they would seek to replace
the ad valorem revenues lost by school districts with other revenue sources, the Florida Legislature
approved significant budget cuts for education during its 2008 regular session and approved further
budget cuts for Fiscal Year 2008-09 during its 2009A special session. See "RISK FACTORS – State
Revenues." At this time, it is impossible to estimate with any certainty the level of impact that the
constitutional amendments will have on the District, but the impact could be substantial.

A lawsuit challenging the constitutionality of at least part of the amendments was filed prior to the
referendum approval by the voters. In Bruner v. Hartsfield, filed in the Circuit Court in and for
Leon County, Florida in November 2007, new Florida homestead owners (having paid ad valorem
taxes for the past four years) filed a class action lawsuit challenging the constitutionality of the Save
Our Homes assessment cap and the portability provision. The lawsuit charges that Save Our Homes
constitutes an unlawful residency requirement for tax benefits on substantially similar property, in
violation of the State Constitution's Equal Protection provisions and the Privileges and Immunities


                                             Page 19 of 27
Clause of the Fourteenth Amendment to the United States Constitution. The lawsuit argues that the
portability provision simply extends the unconstitutionality of the tax shelters granted to long-term
homeowners by Save Our Homes. The lawsuit requests a declaration of the unconstitutionality of
both provisions and injunctive action preventing continued application of those provisions. On
October 29, 2008, the Circuit Court dismissed the plaintiffs’ complaint with prejudice. The plaintiffs
appealed the decision to the First District Court of Appeals, and on November 17, 2009, the First
District Court of Appeals affirmed the Circuit Court's final order of dismissal. At the present time, it
is impossible to predict if the plaintiffs will appeal the case to the Florida Supreme Court.

On October 18, 2007, the same Circuit Court, in Lanning v. Pilcher, a case filed by out-of-state
residents challenging the constitutionality of the Save Our Homes assessment cap, rejected the
plaintiffs’ arguments that the Save Our Homes assessment cap violates either the Commerce Clause
or the Privileges and Immunities Clause of the U.S. Constitution or the Equal Protection Clause of
either the U.S. or Florida Constitutions and dismissed the plaintiffs’ allegations with prejudice. The
Laming Court noted that its decision was limited to the plaintiffs' complaints regarding the Save Our
Homes assessment cap. The plaintiffs appealed the case to the First District Court of Appeals. On
August 26, 2009, the First District Court of Appeals affirmed the lower Court decision. The
plaintiffs have appealed the case to the Florida Supreme Court.

A lawsuit brought by out-of-state residents (DeLuccio v. Havill) challenging the constitutionality of
the Save Our Homes assessment cap and the portability provision was filed with the same Circuit
Court as the Lanning case on May 2, 2008 naming the School Boards of Lake, Manatee, Miami-
Dade and Lee, among other defendants. The allegations and relief requested by the plaintiffs in each
of these cases are very similar, except that the portability provision was not challenged in Lanning v.
Pilcher since the case was filed prior to the approval of the amendments implementing portability.
On November 4, 2008, the Circuit Court in DeLuccio dismissed the plaintiffs' complaint with
prejudice. The plaintiffs have appealed the decision to the First District Court of Appeals, which, as
noted above, rejected similar arguments in Lanning v. Pilcher with similarly situated plaintiffs.
However, since the portability provision was not challenged in Lanning, there is no assurance that
the First District Court of Appeals will reach a similar conclusion. At the present time, the impact
on the District's finances if the plaintiffs are successful on appeal cannot be ascertained.

During recent years, various other legislative proposals and constitutional amendments relating to
ad. valorem taxation have been introduced in the State. Many of these proposals sought to provide
for new or increased exemptions to ad valorem taxation, limit the amount of revenues that local
governments could generate from ad valorem taxation or otherwise restrict the ability of local
governments in the State to levy ad valorem taxes at recent, historical levels. Additionally, there have
been certain proposals seeking to reduce the "required local effort" millage for school districts and
to replace such millage with other revenue source(s) or to require that certain percentages of school
district funding be spent on particular activities. There can be no assurance that similar or additional
legislative or other proposals will not be introduced or enacted in the future that would, or might
apply to, or have a material adverse effect upon, the District or its finances.

Reduction in Local Option Millage Levy. In its 2008 session, the Florida Legislature, among other things,
amended Section 1011.71(2), Florida Statutes, to reduce the maximum millage rate that school
districts may levy for capital outlay and maintenance purposes (referred to as the “Local Option
Millage Levy”) from 2.0 mills to 1.75 mills commencing with Fiscal Year 2008-09. In conjunction
with such reduction, the Florida Legislature increased the amount of the required local effort millage


                                             Page 20 of 27
for school districts in the State which resulted in a shift of the millage (and associated tax revenues)
from capital outlay and maintenance purposes to operational purposes. This legislation became
effective on July 1, 2008. As further discussed in "DISTRICT REVENUES - Local Revenue
Sources" below, the Local Option Millage Levy constitutes the primary source of funds to make
Lease Payments with respect to the Series 2009A Certificates and the Prior Certificates, as well as
any other Certificates issued in connection with the Master Lease. However, the legislation provides
that if the revenues generated from the reduced Local Option Millage Levy are insufficient to make
payments under a lease-purchase agreement entered into prior to June 30, 2008, an amount up to
the revenue generated from 0.50 mills of the operating levy may be utilized to make such lease
payments.

Accordingly, while such reduction may not adversely affect the District's ability to make Lease
Payments under the Prior Leases or the Transaction Leases, it may adversely impact the District's
ability to finance additional educational facilities under the Master Lease Program in the future.

Further Reduction in Local Option Millage Levy. The 2009 session of the Florida Legislature ended on
Friday, May 8, 2009. During this session, the Florida Legislature approved legislation that amended
Section 1011.71, Florida Statutes, relating to the Local Option Millage Levy and the permitted use
thereof for Lease Payments. The legislation provides for the following: (i) a reduction of the
maximum Local Option Millage Levy from 1.75 mills to 1.50 mills; (ii) a waiver of the three-fourths
limit on use of proceeds from the Local Option Millage Levy for lease-purchase agreements entered
into before June 30, 2009 for the 2009-2010 fiscal year; (iii) if the revenue from 1.50 mills is
insufficient to make the payments due under a lease-purchase agreement entered into prior to June
30, 2009 or to meet other critical fixed capital outlay needs, authorization for school districts to levy
up to 0.25 additional mills for capital improvement needs in lieu of an equivalent amount of the
discretionary mills for operations as provided in the State General Appropriation Act; and (iv)
authorization for school boards, by a super majority vote, to levy an optional 0.25 mills for critical
capital outlay needs or for critical operating needs. If used for operations, districts in which 0.25
mills generate less than the State average are to be provided the difference in State funds allocated
through the FEFP. In order to continue the levy described in clause (iv) above, it must be approved
by the voters of the district in the next general election. The legislation was signed into law by the
Governor on May 27, 2009 and became effective on July 1, 2009. In conjunction with the reduction
of the Local Option Millage Levy described in clause (i) hereof, the State's Commissioner of
Education has increased the amount of the basic discretionary millage for each school district in the
State, which results in a shift of the millage (and associated tax revenues) from capital outlay and
maintenance purposes to operational purposes. The reduction of the maximum permitted Local
Option Millage Levy will therefore directly reduce the amount of funds available to make Lease
Payments with respect to certificates of participation issued in connection with the Master Lease
unless action is taken pursuant to clauses (iii) or (iv) to levy an additional 0.25 mills for capital
purposes. The District is levying an additional 0.25 mills for critical operating needs Fiscal Year
2009-10 pursuant to the authorization described in clause (iv) above.




                                             Page 21 of 27
                                         LITIGATION
The School Board is involved in certain litigation and disputes incidental to its operations. Upon the
basis of information presently available, Counsel to the School Board believes there are substantial
defenses to such litigation and disputes and that any ultimate liability in excess of applicable
insurance coverage resulting therefrom will not materially adversely affect the financial position or
results of operations of the School Board or the District.

                           [Remainder of Page Intentionally Left Blank]




                                           Page 22 of 27
                                                     SIGNIFICANT EVENTS

Insurer Rating Changes

The Insurer Financial Strength (the “IFS”) Ratings assigned by the Nationally Recognized Municipal
Securities Information Repositories (the “NRMSIRs”) is a current opinion of the financial security
characteristics of an insurance organization with respect to its ability to pay under its insurance
policies and contracts in accordance with its terms. This opinion is not specific to any particular
policy or contract, nor does it address the suitability of a particular policy or contract for a specific
purpose or purchaser.

The School District of Osceola County, FL, purchased Financial Guaranty Insurance Policies (the
“Policy”) for each of its issues. The following table outlines each outstanding issue and the
organization that holds the Policy.

                                ISSUE                                               BOND INSURANCE COMPANY
                                                       Sales Tax Revenue Bonds
2001 Sales Tax Revenue Bonds                                                    Financial Guaranty Insurance Company (FGIC)
2007 Sales Tax Revenue Bonds                                                    Assured Guaranty Municipal
                                               Certificates of Participation (COPs)
1999 COPs                                                                       Ambac Financial Group Inc.
2000 COPs                                                                       National Public Finance Guarantee Corporation
2002 COPs                                                                       Ambac Financial Group Inc.
2004 COPs                                                                       Financial Guaranty Insurance Company (FGIC)
2005 COPs                                                                       National Public Finance Guarantee Corporation
2007 COPs                                                                       Ambac Financial Group Inc.
2009 COPs                                                                       Assured Guaranty Corp.

The credit rating agencies have reassessed the financial strength of these organizations and have
adjusted the ratings as of March 3, 2010. Following is a summary of such adjustments.

                                                                                                       Insured Ratings
                                                                                       Fitch              Moody's               Standard & Poor's
Sales Tax Revenue Bonds
2001 Sales Tax Revenue Bonds    Financial Guaranty Insurance Corp (FGIC)             Not Rated           Not Rated                 Not Rated
2007 Sales Tax Revenue Bonds    Assured Guaranty Municipal                           Not Rated      Aa3 /Negative Outlook     AAA /Negative Outlook
Certificates of Participation
1999 COPs                       Ambac Financial Group Inc.                           Not Rated     Caa2 /Outlook Developing   CC /Outlook Developing
2000 COPs                       National Public Finance Guarantee Corporation        Not Rated     Baa1 /Outlook Developing   A /Outlook Developing
2002 COPs                       Ambac Financial Group Inc.                           Not Rated     Caa2 /Outlook Developing       CC /Developing
2004 COPs                       Financial Guaranty Insurance Corp (FGIC)             Not Rated            Not Rated                 Not Rated
2005 COPs                       National Public Finance Guarantee Corporation        Not Rated     Baa1 /Outlook Developing   A /Outlook Developing
2007 COPs                       Ambac Financial Group Inc.                           Not Rated     Caa2 /Outlook Developing   CC /Outlook Developing



                                                                     Page 23 of 27
                ADDITIONAL INFORMATION 2000 CERTIFICATES OF
                              PARTICIPATION
Four Corners Charter School, Inc. 2009 Audited Financial Statements

See APPENDIX B.

Four Corners Charter School, Inc. Statistical Data


                                                  Four Corners Charter School
                                                  Summary of Statistical Data

                                                                     Number of Classroom                   Average Expenditure per F.T.E.
  School Year                              Number Of Schools            Instructors      F.T.E. Enrollment            Student


    2007-08                                         1                         75               981.44                  6,193.44




                                                  Total                 Expenditures (Program Costs) and                Net
                                                 Revenues                      Management Fees                     Income/(Loss)


Pre-K Program                                             4,179.86                                      0.00                       4,179.86


Before/After Program                                    114,124.00                               100,375.00                       13,749.00


Summer School Program*                                        0.00                                      0.00                           0.00
                                                        118,303.86                               100,375.00                       17,928.86


Four Corners Elementary and Four Corners Middle merged to become Four Corners Charter School
 beginning with its 2006-07 School Year.
*No summer school program offered for 2008-09.




                                       [Remainder of Page Intentionally Left Blank]

                                                               .




                                                             Page 24 of 27
           ADDITIONAL INFORMATION 2001 SALES TAX BONDS

One Cent Sales Surtax

The table below sets forth the total amount of the One Cent Sales Surtax distributed during the last
five fiscal years of the School Board.

                                         Historical One Cent Sales
                                           Surtax Distributions

                                                Sales Tax Revenues      Sales Tax Revenues
                        Fiscal Year             Distributions to All   Distributions to Issuer
                       Ending June 30               Agencies (1,3)              (2,3,4)



                            2005                          35,571,433                3,613,331
                            2006                          40,049,789                8,156,870
                            2007                          40,382,885               10,108,486
                            2008                          40,134,984               10,193,939
                            2009                          37,804,938                9,143,244

                    Source: State of Florida, Department of Revenue



              (1)     Represents the aggregate amount distributed to the Issuer, the County and the
                      Cities of Kissimmee and St. Cloud.
              (2)     In each of the calendar years 2001 through 2005, the Issuer received 10% of the
                      One Cent Sales Surtax. In each of the calendar years 2006 through 2025, the
                      Issuer shall receive 25% of the One Cent Sales Surtax.
              (3)     Amounts are net of administrative charges of the State of Florida.
              (4)     Amounts reported by the District vary slightly from State due to estimates in
                      accruing June receipts.


                               [Remainder of Page Intentionally Left Blank]




                                                 Page 25 of 27
 Direct and Overlapping Debt and Debt Ratios

                           Direct and Overlapping Debt Governmental Activities Debt
                                              As of June 30, 2009
                                                                                     General                  Non-Self                    Self
                                                                                 Obligation Debt           Supporting Debt           Supporting Debt
DIRECT DEBT
  State Bonds, 1999A                                                                                                                           925,000
  State Bonds, 2000A                                                                                                                            25,000
  State Bonds, 2001A                                                                                                                         1,020,000
  State Bonds, 2002A                                                                                                                           665,000
  State Bonds, 2003A                                                                                                                         1,590,000
  State Bonds, 2004A                                                                                                                         1,305,000
  State Bonds, 2005A                                                                                                                         1,470,000
  State Bonds, 2005AR                                                                                                                        4,340,000
  State Bonds, 2005BR                                                                                                                        1,595,000
  State Bonds, 2006A                                                                                                                         1,665,000
  Sales Tax Revenue Bonds, 2001                                                                                                              3,290,000
  Sales Tax Revenue Bonds, 2007A                                                                                                            44,230,000
  Sales Tax Revenue Bonds, 2007B                                                                                                            32,020,000
  Certificates of Participation, 1999A                                                                           34,415,000
  Certificates of Participation, 2000A and B                                                                        965,000
  Certificates of Participation, 2002A                                                                            1,295,000
  Certificates of Participation, 2004A, B, and C                                                                 70,890,000
  Certificates of Participation, 2005A                                                                           11,730,000
  Certificates of Participation, 2007A and B                                                                     62,390,000
  Other(1)                                                                                                       72,574,129
Total Direct Debt                                                            $                -        $        254,259,129      $          94,140,000
                    (2)
OVERLAPPING
 Sales Tax Revenue Refunding Bonds, Series 1993                                                                                  $             485,000
 Sales Tax Revenue Bonds, 1999                                                                                                              44,770,000
 Infrastructure Sales Surtax Rev Bond 2002                                                                                                  42,285,000
 Infrastructure Sales Surtax Rev Bond 2007                                                                                                  75,000,000
 Gas Tax Refunding Revenue Bonds, 1998                                                                                                       2,165,000
 Gas Tax Refunding Revenue Bonds, 2003                                                                                                       9,845,000
 Capital Improvement Revenue Bonds, 1998                                                                                                       480,000
 Limited General Obligation Bonds, Series 2006                                                                                              14,740,000
 Tourist Development Tax Revenue Bond 2002                                                                                                  68,750,000
 West 192 Redevelopment Area Municiple Service:
    Special Assessment Bonds, Series 1996                                                                                                    1,005,000
     Special Assessment Bonds (Phase IIA), Series 1998                                                                                       3,160,000
     Special Assessment Bonds (Phase IIB), Series 1999                                                                                         250,000
     Special Assessment Bonds (Phase IIC), Series 2003                                                                                       3,580,000
  Other(3)                                                                                                       37,656,302
Total Overlapping Debt                                                       $                     -   $         37,656,302      $         266,515,000
Total Direct and Overlapping Debt                                            $                -        $        291,915,431      $         360,655,000

(1) Consists of notes payable, installment-purchases, educational facilities benefit district agreement, compensated absences, arbitrage rebate, other
post-employment benefits, and estimated insurance claims payable.
(2) Overlapping debt consists of the debt of Osceola County. Figures as of September 30, 2008.
(3) Consists of a capital lease, a concurrency management agreement, a commercial paper loan, reimbursement due to The Wilder Companies for
certain road improvements, other post employment benefits, and compensated absences.
Source: School District of Osceola County, Florida and Comprehensive Annual Financial Report of Osceola County, Florida for the fiscal year ended
September 30, 2008




                                                                     Page 26 of 27
                         ADDITIONAL INFORMATION 2005 CERTIFICATES OF
                                       PARTICIPATION
     Summary of Operations for Four Corners Charter School, Inc.

             The following table summarizes the results of operations for Four Corners Charter Schools,
  Inc. for the three most recent years.

                                              Four Corners Charter School, Inc.

                                                                                                Audited
                                                               FY 2007                         FY 2008                          FY 2009
Revenues:
Program Revenues:
  Operating Grants and Contributions                   $                  61,726                                        $                  555,426
  Capital Grants and Contributions                                       668,734                          713,256
General Revenues:
  Osceola County School Board                                          5,611,754                       5,774,138                       5,761,716
  Interest Earnings                                                      173,701                          104,024                           25,559
     Total Revenues                                     $              6,515,915        $              6,591,418        $              6,342,701


Expenditures:
  Instruction                                          $               4,323,674       $               4,429,810        $              4,409,025
  Board                                                                   22,575                            8,292                            9,161
  School Administration (1)                                              797,807                          763,552                          627,116
  Plant Operation (2)                                                  1,135,004                       1,127,838                       1,127,021
  Plant Maintenance                                                       34,492                           44,581                              -
    Total Expenditures                                  $              6,313,552        $              6,374,073        $              6,172,323




Increase in net assets                                 $                 202,363       $                  217,345       $                  170,378
Net assets - Beginning of Fiscal Year                                  2,495,057                       2,697,420                       2,914,765
Net assets - End of Fiscal Year                         $              2,697,420        $              2,914,765        $              3,085,143


(1) School Administration expense represents the management fee paid pursuant to the herein described Management Contract. Such fees are
subordinate to required payments by the Corporation under the Sublease.
(2) All of such Plant Operational expenses represent amounts paid by the Corporation pursuant to the Sublease.

Source: Audited Financial Statements of Four Corners Charter School, Inc. prepared by Berman Hopkins Wright & Laham, CPAs.




                                                                  Page 27 of 27
                                APPENDIX A

The School District of Osceola County, FL 2009 Audited Comprehensive Annual Financial
Report
School Board Members 
John McKay, Chairman 
David Stone, Vice Chairman 
Julius Melendez 
Cindy Lou Hartig 
Jay Wheeler 




     COMPREHENSIVE ANNUAL FINANCIAL REPORT 
                For the Fiscal Year Ended June 30, 2009 


                THE SCHOOL DISTRICT OF OSCEOLA COUNTY, FLORIDA 



Michael A. Grego, Ed.D. 
Superintendent 
 
William C. Collins 
Chief Business & Finance Officer 
 
Sarah E. Graber 
Director of Finance 



                                    Student Achievement ‐ Our Number One Priority 

                                           AN EQUAL OPPORTUNITY EMPLOYER 
         The School District of Osceola County, Florida
                   817 Bill Beck Boulevard
                  Kissimmee, Florida 34744
                 http://www.osceola.k12.fl.us/




COMPREHENSIVE ANNUAL FINANCIAL REPORT
              For the Fiscal Year Ended June 30, 2009




                          Prepared By:
                   Business & Fiscal Services




    Education Which Inspires All to Their Highest Potential
           THE SCHOOL DISTRICT OF OSCEOLA COUNTY, FLORIDA
                             Comprehensive Annual Financial Report
                                   For the Fiscal Year Ended June 30, 2009


                                        INTRODUCTORY SECTION


Letter of Transmittal                                                                     i
List of District Officials                                                                vii
Organizational Chart                                                                      viii
GFOA Certificate of Achievement for Excellence in Financial Reporting                     ix

                                           FINANCIAL SECTION

Report of Independent Auditors                                                            1
Management’s Discussion and Analysis                                                      3
Basic Financial Statements:
  Government-Wide Financial Statements:
    Statement of Net Assets                                                               16
    Statement of Activities                                                               17
  Fund Financial Statements
    Balance Sheet – Governmental Funds                                                    18
    Reconciliation of the Governmental Funds Balance Sheet to the
         Statement of Net Assets                                                          19
    Statement of Revenues, Expenditures, and Changes in Fund Balances –
         Governmental Funds                                                               20
    Reconciliation of the Statement of Revenues, Expenditures, and Changes in
         Fund Balances of Governmental Funds to the Statement of Activities               21
    Statements of Revenues, Expenditures, and Changes in Fund Balances—Budget & Actual:
         General Fund                                                                     22
         Special Revenue Fund—Other Federal Programs                                      25
         Special Revenue Fund—ARRA Economic Stimulus Funds                                27
    Statement of Net Assets—Proprietary Funds                                             28
    Statement of Revenues, Expenses, and Changes in Fund Net Assets—Proprietary Funds     29
    Statement of Cash Flows – Proprietary Funds                                           30
    Statement of Assets and Liabilities – Fiduciary Funds                                 31
Notes to the Basic Financial Statements                                                   33
Required Supplementary Information:
    Schedule of Funding Progress—Other Postemployment Benefits Plan                       66
         THE SCHOOL DISTRICT OF OSCEOLA COUNTY, FLORIDA
                      Comprehensive Annual Financial Report
                               For the Fiscal Year Ended June 30, 2009



              COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES


Combining Balance Sheet—Nonmajor Governmental Funds                                      67
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance—
   Nonmajor Governmental Funds                                                           68
Combining Balance Sheet—Nonmajor Governmental Funds - Special Revenue Funds              69
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances—
   Nonmajor Governmental Funds—Special Revenue Funds                                     70
Combining Balance Sheet—Nonmajor Governmental Funds—Debt Service Funds                   71
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance—
   Nonmajor Governmental Funds—Debt Service Funds                                        72
Combining Balance Sheet—Nonmajor Governmental Funds—Capital Projects Funds               73
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance—
   Nonmajor Governmental Funds—Capital Projects Funds                                    74
Schedules of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual:
   Special Revenue Fund - Food Services                                                  75
   Special Revenue Fund - Miscellaneous                                                  76
   Debt Service Funds - SBE/COBI Bonds                                                   77
   Debt Service Funds - Other Debt Service                                               78
   Capital Project Funds—Capital Outlay Bond Issues (COBI)                               79
   Capital Project Funds—Public Education Capital Outlay (PECO)                          80
   Capital Project Funds—Capital Outlay & Debt Service (CO & DS)                         81
   Capital Project Funds - Capital Improvement Section 1011.71(2) F.S.                   82
   Capital Project Funds - Other Capital Projects                                        83
Combining Statement of Net Assets – Internal Service Funds                               84
Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets –
   Internal Service Funds – Nonmajor Proprietary                                         85
Combining Statement of Cash Flows – Internal Service Funds                               86
Combining Statement of Changes in Assets and Liabilities—
   School Internal Funds Agency Fund                                                     87
Combining Statement of Changes in Assets and Liabilities—
   Bellalago Charter Academy Agency Fund                                                 88
          THE SCHOOL DISTRICT OF OSCEOLA COUNTY, FLORIDA
                        Comprehensive Annual Financial Report
                                 For the Fiscal Year Ended June 30, 2009


                COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

Combining Statement of Changes in Assets and Liabilities—
    Bellalago Educational Facilities Benefit District Agency Fund               89
Combining Statement of Changes in Assets and Liabilities—Agency Funds           90
Combining Statement of Net Assets – Component Units                             91
Combining Statement of Activities – Component Units                             92



                                          STATISTICAL SECTION

Introduction to the Statistical Section                                         93
Schedule 1 – Net Assets by Component                                            94
Schedule 2 – Changes in Net Assets                                              96
Schedule 3 – General Revenues and Total Changes in Net Assets                   98
Schedule 4 – Fund Balances, Governmental Funds                                  100
Schedule 5 – Governmental Funds Revenues                                        102
Schedule 6 – Governmental Funds Expenditures and Debt Service Ratio             104
Schedule 7 – Other Financing Sources and Uses and Net Change in Fund Balances   106
Schedule 8 – Assessed Value and Estimated Actual Value of Taxable Property      108
Schedule 9 – Direct and Overlapping Property Tax Rates                          110
Schedule 10 – Principal Osceola County Property Tax Payers                      111
Schedule 11 – Property Tax Levies and Collections                               113
Schedule 12 – Outstanding Debt by Type                                          114
Schedule 13 – Direct and Overlapping Governmental Activities Debt               117
Schedule 14 – Legal Debt Margin Information                                     118
Schedule 15 – Pledged-Revenue Coverage                                          120
Schedule 16 – Demographic and Economic Statistics                               121
Schedule 17 – Osceola County Principal Employers                                122
Schedule 18 – Full-Time-Equivalent District Employees by Type                   123
Schedule 19 – Operating Statistics                                              124
Schedule 20 – Teacher Salaries                                                  126
Schedule 21 – School Building Information                                       127
          THE SCHOOL DISTRICT OF OSCEOLA COUNTY, FLORIDA
                      Comprehensive Annual Financial Report
                               For the Fiscal Year Ended June 30, 2009




                                             SINGLE AUDIT



Independent Auditors’ Report on Internal Control Over Financial Reporting
   and on Compliance and Other Matters Based on an Audit of Financial Statements
   Performed in Accordance with Governmental Auditing Standards                         131
Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major
   Program and Internal Control over Compliance in Accordance with OMB Circular A-133   133
Schedule of Expenditures of Federal Awards                                              135
Schedule of Findings and Questioned Costs                                               136
Summary Schedule of Prior Year Audit Findings                                           137
Independent Auditors’ Management Letter                                                 138
INTRODUCTORY SECTION
                              THE SCHOOL DISTRICT OF OSCEOLA COUNTY, FLORIDA
                                               817 Bill Beck Boulevard  Kissimmee Florida 34744-4492
                                           Phone: 407-870-4600  Fax: 407-870-4010  www.osceola.k12.fl.us

SCHOOL BOARD MEMBERS                                                                                                    Superintendent of Schools
District 1 – Jay Wheeler                                                                                                     Michael A. Grego, Ed.D.
             407-390-0505
District 2 – Julius Melendez
             407-922-5113
District 3 – Cindy Lou Hartig
             407-832-3999
District 4 – David Stone, Vice Chair
             407-933-2700
District 5 – John McKay, Chair
              407-957-4056

                                                                 December 17, 2009



            District School Board of Osceola County
            817 Bill Beck Boulevard.
            Kissimmee, FL 34744

            Dear Chairman and School Board Members:

            State law requires that all local governments publish, after the close of each fiscal year, a complete set of
            financial statements presented in conformity with accounting principles generally accepted in the United States
            of America (GAAP), and audited in accordance with auditing standards generally accepted in the United States
            of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue
            the comprehensive annual financial report (CAFR) of the District School Board of Osceola County, Florida
            (District) for the fiscal year ended June 30, 2009.

            This report consists of management’s representations concerning the finances of the District. Consequently,
            management assumes full responsibility for the completeness and reliability of all of the information presented
            in this report. To provide a reasonable basis for making these representations, management of the District has
            established a comprehensive internal control framework that is designed both to protect the District’s assets
            from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the District’s
            financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their
            benefits, the District’s comprehensive framework of internal controls has been designed to provide reasonable,
            rather than absolute, assurance that the financial statements will be free from material misstatement. As
            management, we assert that, to the best of our knowledge and belief, this financial report is complete and
            reliable in all material respects.

            The firm of Cherry, Bekaert & Holland, L.L.P. has audited the District’s financial statements. The goal of the
            independent audit is to provide reasonable assurance that the financial statements of the District for the fiscal
            year ended June 30, 2009, are free of material misstatement. The independent audit involved examining, on a
            test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the
            accounting principles used and significant estimates made by management; and evaluating the overall financial
            statement presentation. The independent auditors concluded that there was a reasonable basis for rendering an
            unqualified opinion that the District’s basic financial statements for the fiscal year ended June 30, 2009, are
            fairly presented in conformity with GAAP.



                                                     Student Achievement – Our Number One Priority
                                       Districtwide Accreditation by the Southern Association of Colleges and Schools
                                                                 An Equal Opportunity Agency




                                                                            i
The independent auditors’ report is presented as the first component of the financial section of this report.

The independent audit of the financial statements of the District was part of a broader, federally mandated
“Single Audit” designed to meet the special needs of federal grantor agencies. The District is required to
undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1996 and the
United States Office of Management and Budget (“OMB”) Circular A-133, Audits of States, Local
Governments and Non-Profit Organizations. The standards governing Single Audit engagements require the
independent auditor to report not only on the fair presentation of the financial statements, but also on the
audited government’s internal controls and compliance with legal requirements, with special emphasis on
internal controls and legal requirements involving the administration of federal awards. Information related to
this single audit, including the schedule of expenditures of federal awards, findings and questioned costs,
summary of prior audit findings, and the independent auditors’ reports on the system of internal control and
on compliance with applicable requirements, are included in the single audit section.

This report includes all funds of the District, The Foundation for Osceola Education, Inc., (the
“Foundation”), Bellalago Educational Facilities Benefit District (“Bellalago EFBD”) Flora Ridge Educational
Facilities Benefit District (“Flora Ridge EFBD”) and two Charter Schools, which comprise the reporting
entity. The Foundation is a separate not-for-profit corporation organized and operated as a direct-support
organization. The Foundation’s purpose is exclusively educational and charitable for the constituents of
Osceola County. Bellalago Educational Facilities Benefit District is a dependent special district created
pursuant to Florida law to finance and construct the facilities housing Bellalago Charter School. Flora Ridge
Educational Facilities Benefit District is a dependent special district created pursuant to Florida law to finance
and construct the facilities housing Flora Ridge Elementary School. Charter schools are public schools
operating under performance contracts with the School Board. The Foundation, the Benefit Districts, and the
applicable Charter Schools are included as discretely presented component units.

GAAP require that management provide a narrative introduction, overview, and analysis to accompany the
basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of
transmittal is designed to complement MD&A and should be read in conjunction with it. The District’s
MD&A can be found immediately following the independent auditors’ report.

PROFILE OF THE GOVERNMENT

The 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, operated,
administered, and supervised 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 District public schools. The appointed Superintendent of Schools (Superintendent) is the
executive officer of the Board and is responsible for the administration and management of the schools within
the applicable parameters of Florida Statutes, State Board of Education Rules, and School Board policies. 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, as prescribed by the State Board of Education.




                                     Student Achievement – Our Number One Priority
                       Districtwide Accreditation by the Southern Association of Colleges and Schools
                                                 An Equal Opportunity Agency




                                                            ii
The geographic boundaries of the District are those of Osceola County. During fiscal year 2008-09, the
District operated 54 K-12 schools, including 25 elementary schools, 7 middle schools, 8 high schools, 7
specialized schools, and 7 charter schools. The District receives the majority of its operating funds through a
State funding formula that is intended to equalize funding received from the State and local property tax
between districts within the State. Charter schools operating through a contract with the District are provided
with their proportionate share of these funds, based upon the number of full-time equivalent students enrolled
at the charter school. In fiscal year 2008-09, the District provided general, special, vocational, and other
educational programs to 51,118 un-weighted full-time equivalent students. The projected enrollment, for fiscal
year 2009-10, is 50,657 un-weighted full-time equivalent students. The average age of the schools within the
District is approximately 20 years. The District plans to open 3 new schools in fiscal year 2009-10.

The Board follows procedures established by Florida Statutes and the State Board of Education rules in
establishing and adopting annual budgets for each of the governmental fund types. Budgets are prepared using
the same modified accrual basis as is used to account for governmental funds. Appropriations are controlled at
the object level (e.g. salaries, benefits, and purchased services) within each function activity (e.g. instruction,
pupil personnel services, and school administration) and may be amended by resolution at any Board meeting
prior to the due date for the annual financial report.

ECONOMIC CONDITION AND OUTLOOK

The County is part of the Orlando Metropolitan Statistical Area (MSA) along with Orange, Seminole and Lake
Counties. According to the 2009 Economic Development Commission of Mid-Florida, Inc. (the Commission),
Metro Orlando currently has a population of 2 million people and is projected to be 2.4 million in 2014. The
Commission promotes Osceola County as being a world class tourism destination.

The population of Osceola County has increased 60.1 percent from 1990 to 2000 compared to the state of
Florida which increased 23.5 percent. As of the census of 2000, there were 172,493 people and 60,977
households residing in the county. The population is estimated to be 265,603 and households 93,644 in 2009.
Based on the 2000 census, the racial makeup of the county was 77.5 percent White, 7.5 percent Black and 15
percent from other races, with 29.4 percent of this population as Hispanic or Latino.

Of Osceola County’s population, 26.8% are under the age of 18 and 11.3% are 65 and older. The average
household size is 2.79. The median age in the county is 34.8 years. The median income for a household was
$38,545. The per capita income for the county was $17,022. Of the 25 and older population, 33.9% are high
school graduates.

The District recognizes that the continued enhancement of the local economy is of mutual benefit to both the
District and the County and that an excellent system of public education is a significant factor in attracting new
business and industry to the County. The District remains Osceola County’s largest employer, employing 6,749
full and part-time employees, including 3,056 classroom teachers.




                                     Student Achievement – Our Number One Priority
                       Districtwide Accreditation by the Southern Association of Colleges and Schools
                                                 An Equal Opportunity Agency




                                                            iii
Major Initiatives

Class Size Reduction Amendment

In November 2002, the voters of Florida amended the State Constitution to limit class size. By the beginning
of fiscal year 2010-11, the amendment established the maximum number of students in core- curricula courses
assigned to a teacher in each of the following three grade groupings: (1) Pre kindergarten through Grade 3, 18
students; (2) Grades 4 through 8, 22 students; and (3) Grades 9 through 12, 25 students.

The Florida Legislature enacted Senate Bill-30A implementing the reduction of the average number of
students in each classroom by at least two students per year, beginning in fiscal year 2003-04 until the
maximum number of students per classroom does not exceed the fiscal year 2010-11 maximum. If a district’s
class size does not meet the constitutional maximum, then the district must reduce the average number of
students in each of the three grade groupings by two students until the constitutional maximums are reached.
The following is how the constitutional maximums will be calculated:

• For fiscal years 2003-04, 2004-05, and 2005-06, class size will be calculated at the district level.

• For fiscal years 2006-07 and 2007-08, class size will be calculated at the school level.

• For fiscal years 2008-09 and 2009-10, class size will be calculated at the classroom level.

For fiscal year 2008-09, the District increased the average district-wide class size in pre kindergarten through
Grade 3 by .19 students to 16.72 students; increased the average for Grades 4 through 8 by .54 students to
18.86 students; and decreased the class size by .47 students in Grades 9 through 12 to 22.11 students. It is
anticipated that the District will continue to meet the constitutional maximums for the three grade groupings
at school-level during fiscal year 2009-10.

The reduction in the number of students that can be assigned to each core classroom has a substantial impact
on the number of students that can be housed in existing schools. The student capacity of District schools
was reduced by approximately 5,000 due to the class size reduction amendment.

Capital Outlay Program

During the current fiscal year, the District completed several construction projects totaling $76,592,774. These
projects included 2 new elementary schools, one K-8 school and renovations to other schools. These schools
opened for the 2009-10 school year.

Accomplishments

One of the ways to judge a school district is to compare the results of its students on national and statewide
testing and the accomplishments of its staff. The District believes that its students and staff have performed
well based on various tests and accomplishments as noted below.




                                      Student Achievement – Our Number One Priority
                        Districtwide Accreditation by the Southern Association of Colleges and Schools
                                                  An Equal Opportunity Agency




                                                             iv
School districts throughout Florida are held accountable and receive school grades based on the results of the
Florida Comprehensive Assessment Test (FCAT). The fiscal year 2008-09 marks the tenth year of this
accountability program and the Osceola School District continued its tradition of achievement. This year 26
schools received a grade of ‘A’, 11 received a grade of ‘B’, 5 received a grade of ‘C’, 3 schools received a grade
of ‘D’ and 1 school received an ‘F’. The district received an overall grade of ‘B’.

Nearly 38 percent of Osceola School District teachers have earned master’s degrees or higher.

The Osceola School District has 128 teachers that have successfully completed the rigorous and time-intensive
program of the National Board of Professional Teaching Standards. To achieve the highly esteemed National
Certification, teachers are required to provide a portfolio of information regarding teaching styles, examples of
work performed by students, and successfully pass an examination. Teachers who gain this certification are
provided incentives including salary and mentoring bonuses.

Financial Information

Internal Controls. Management of the District is responsible for establishing and maintaining internal
controls designed to ensure that the assets of the District are protected from loss, theft or misuse and to
ensure that adequate accounting data are compiled to allow for the preparation of financial statements in
conformity with generally accepted accounting principles. Internal controls are designed to provide reasonable,
but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that:
(1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and
benefits requires estimates and judgments by management.

Budgetary Controls. The District maintains budgetary controls, the objective of which is to ensure
compliance with legal provisions embodied in the annual appropriated budget approved by the School Board.
Activities of all governmental fund types are included in the annual appropriated budget. Project-length
financial plans are adopted for the Capital Projects Funds. The level of budgetary control (that is, the level at
which expenditures cannot exceed the appropriated amount) is established at the object level.

Budgetary information is integrated into the accounting system, and, to facilitate budgetary control, budget
balances are encumbered when purchase orders are issued.

Appropriations lapse at year-end, and encumbrances outstanding are honored from the subsequent year’s
appropriations.

In order to provide budgetary control for salaries, the District utilizes a centralized position control system.
On an annual basis, the Board adopts a District staffing plan that establishes teacher positions based generally
on student populations served. Additionally, support and administrative positions are created based on
established criteria.




                                     Student Achievement – Our Number One Priority
                       Districtwide Accreditation by the Southern Association of Colleges and Schools
                                                 An Equal Opportunity Agency




                                                            v
Cash Management and Investments. The intention of the cash management system is to limit the amount
of funds placed in accounts where low or no interest is paid. Idle cash is invested in various instruments with
various maturity dates, depending on the anticipated future cash requirements. The overall strategy of holding
deposits and making investments is to expose the District to a minimum amount of credit and market risks.

Risk Management. The District is self-insured for employees' health insurance, general and automobile
liability, with outside contractors providing various administrative services. All funds make payment to the
District's applicable Internal Service Fund based upon personnel staffing levels, number of vehicles, or square
feet. Resources have been accumulated in order to meet potential losses.

ACKNOWLEDGEMENTS

The preparation of this Report on a timely basis was made possible by the dedicated service of the entire staff
of the Finance department and the audit staff of Cherry, Bekaert & Holland, L.L.P. Each member of the
department and the audit staff has our sincere appreciation for the contributions made in the preparation of
this report.

In closing, we would like to thank the rnembers of the School Board for their leadership and support in
planning and conducting d1e financial operations of the District.

Respectfully submitted,




William C. Collins, c.P.A.                                      .Dr. MichaelA. Grego, EdD.
Chief Business & Finance 0 fficer                               Superintendent




                                     Student Achievement - Our Number One Priority
                       Districtwide Accreditation by the Southern Association of Colleges and Schools
                                                 An Equal Opportunity Agency




                                                           vi
               OSCEOLA SCHOOL DISTRICT OFFICIALS
                          JUNE 30, 2009


                      SCHOOL BOARD MEMBERS

                         John McKay, Chairman
                               District 5

                       David Stone, Vice Chairman
                                District 4

                              Cindy Hartig
                                District 3

                             Julius Melendez
                                 District 2

                              Jay Wheeler
                                District 1

                         SUPERINTENDENT
                        Michael A. Grego, Ed.D.

      DEPUTY SUPERINTENDENT for ELEMENTARY ADMINISTRATION
                        Beverly Carbaugh

       DEPUTY SUPERINTENDENT for SECONDARY ADMINISTRATION
                           Debra Pace

                    ASSISTANT SUPERINTENDENTS

               ELEMENTARY CURRICULUM & INSTRUCTION
                           Melba Luciano

               SECONDARY CURRICULUM & INSTRUCTION
                            Scott Fritz

                 ADMINISTRATION/STUDENT SERVICES
                            Chuck Butler

                                CHIEFS

BUSINESS & FINANCE OFFICER                      FACILITIES OFFICER
      William C. Collins                            Robert Nanni

HUMAN RESOURCES OFFICER               INFORMATION & TECHNOLOGY OFFICER
      Stuart Singer                                John Beall




                                    vii
                                           THE SCHOOL DISTRICT OF OSCEOLA COUNTY, FLORIDA
                                             817 Bill Beck Boulevard, Kissimmee, FL 34744-4492



                                                                       District 1                SCHOOL BOARD                    District 3
                                    INTERNAL AUDITOR                   Jay Wheeler                 District 5                 Cindy Hartig           SCHOOL BOARD ATTORNEY
                                      Kenneth Johnson                                           John McKay, Chair                                        Suzanne D'Agresta
                                                                       District 2                                                District 4
                                                                       Julius Melendez                              David Stone, Vice Chair




                                                                                          SUPERINTENDENT OF SCHOOLS
                                                                                              Michael A. Grego, Ed.D.




                                                                                                                      Administrative Assistant
                                                                                                                            Cathy Hunt
                                                                                                                           Secretary 3
                                                                                                                         Crisinda Stewart
                                                                                                                           Clerk Typist
                                                                                                                        Heather Fernbacher




                                           DEPUTY SUPERINTENDENT                                                                        DEPUTY SUPERINTENDENT
             PRINCIPALS                   Elementary / K-8 Administration                COMMUNITY RELATIONS and OASIS                    Secondary Administration                PRINCIPALS
       Elementary and K-8 Schools            Beverly Carbaugh, Ed.D.                              DIRECTOR                                       Debra Pace                  Middle and High Schools




viii
                                       Secretary to Deputy Superintendent                        Dana Schafer                       Secretary to Deputy Superintendent
                                                   Sally Facente                                                                                   Vacant




                                          ASSISTANT SUPERINTENDENT                                                                     ASSISTANT SUPERINTENDENT
                                       Elementary Curriculum and Instruction                                                         Secondary Curriculum and Instruction
                                                  Melba Luciano                                                                                  Scott Fritz




                                                      CHIEF                                                                            ASSISTANT SUPERINTENDENT
                                           Business and Finance Officer                                                                 Administration/Student Services
                                                William C. Collins                                                                               Chuck Butler




                                                    CHIEF                                                                                             CHIEF
                                             Human Resources Officer                                                                             Facilities Officer
                                                 Stuart Singer                                                                                    Robert Nanni




                                                                                                                                                    CHIEF
                                                                                                                                      Information and Technology Officer
                                                                                                                                               John Beall, Ed.D.




                                        Revised March 17, 2009
          Certificate of
           Achievement
          for Excellence
           in Financial
            Reporting
                      Presented to


       The School District
of Osceola County, Florida
           For its Comprehensive Annual
                    Financial Report
              for the Fiscal Year Ended
                     June 30, 2008
  A Certificate of Achievement for Excellence in Financial
 Reporting is presented by the Government Finance Officers
       Association of the United States and Canada to
     government units and public employee retirement
       systems whose comprehensive annual financial
             reports (CAFRs) achieve the highest
             standards in government accounting
                    and financial reporting.




                                  President




                            Executive Director




                             ix
This page left intentionally blank.




                 x
FINANCIAL SECTION
                                    Report of Independent Auditors


The Honorable Members of the School Board
District School Board of Osceola County
Kissimmee, Florida

We have audited the accompanying financial statements of the governmental activities, the aggregate
discretely presented component units, each major fund, and the aggregate remaining fund information
of the District School Board of Osceola County, Florida (the “District”), as of and for the year ended
June 30, 2009, which collectively comprise the District’s basic financial statements as listed in the
table of contents. These financial statements are the responsibility of the District School Board of
Osceola County’s management. Our responsibility is to express opinions on these financial
statements based on our audit. We did not audit the financial statements of the aggregate discretely
presented component units listed in Note 1 to the financial statements. Those financial statements
were audited by other auditors whose reports have been provided to us, and our opinions, insofar as
they relate to the amounts included for the aggregate discretely presented component units, are
based solely on the reports of the other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and the significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit and the reports of other auditors provide a
reasonable basis for our opinions.

In our opinion, based on our audit and the reports of other auditors, the financial statements referred
to above present fairly, in all material respects, the respective financial position of the governmental
activities, the aggregate discretely presented component units, each major fund, and the aggregate
remaining fund information of the District School Board of Osceola County, Florida, as of June 30,
2009, and the respective changes in financial position and cash flows, where applicable, thereof and
the respective budgetary comparisons for the general fund and special revenue funds for the year
then ended in conformity with accounting principles generally accepted in the United States of
America.




                                                   1
In accordance with Government Auditing Standards, we have also issued our report dated December
14, 2009 on our consideration of the District’s internal control over financial reporting and on our tests
of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
internal control over financial reporting or compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards and should be considered in assessing
the results of our audit.

The Management’s Discussion and Analysis on pages 3 through 14 and schedule of funding progress
for the other post employment benefits on page 66 are not a required part of the basic financial
statements but is supplementary information required by accounting principles generally accepted in
the United States of America. We have applied certain limited procedures, which consisted principally
of inquiries of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the District’s basic financial statements. The introductory section, the combining
and individual fund financial statements and schedules, and the statistical section are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
Additionally, the accompanying Schedule of Expenditures of Federal Awards is presented for
purposes of additional analysis as required by the U.S. Office of Management and Budget Circular A-
133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of
the basic financial statements. The combining and individual fund financial statements and
schedules, including the schedule of expenditures of federal awards, have been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly
stated, in all material respects, in relation to the basic financial statements taken as a whole. The
introductory section and the statistical section have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.




Orlando, Florida
December 17, 2009




                                                    2
                             MANAGEMENT’S DISCUSSION AND ANALYSIS



As management of the Osceola County District School Board, Florida (the "District"), we offer readers of the
District’s financial statements this narrative overview and analysis of the financial activities of the District for the
fiscal year ended June 30, 2009. The information presented here should be considered in conjunction with our
financial statements found on pages 16 to 31 and 67 to 92 of this report.

Because the information contained in the Management’s Discussion and Analysis (MD&A) is intended to
highlight significant transactions, events, and conditions, it should be considered in conjunction with the District’s
financial statements.

                                          FINANCIAL HIGHLIGHTS

Key financial highlights for the 2008-09 fiscal year are as follows:

     Total assets of the District exceed total liabilities at the close of the most recent fiscal year by
      $617,219,939.
     The District’s total net assets increased by $15,512,154, or 2.58 percent from the 2007-08 year.
     At June 30, 2009, the District’s governmental funds report combined fund balances of $255,802,381, a
      decrease of $72,872,031, in comparison with the prior year.
     At June 30, 2009, unreserved fund balance for the General Fund is $44,255,581, or 11.89 percent of total
      General Fund expenditures. The unreserved fund balance is available for spending at the District’s
      discretion.
     The District’s total bonded debt (Bonds Payable and Certificates of Participation, excluding premiums
      and discounts) decreased by $10,610,000, or 3.71 percent during the current fiscal year.
     The District’s net capital assets increased by $74,615,222, or 11.99 percent from the 2007-08 fiscal year.




                            OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements.
The District’s basic financial statements are comprised of three components:

     Government-wide financial statements.
     Fund financial statements.
     Notes to financial statements.




                                                         3
The illustration below shows how the various parts of the financial section are arranged and relate to one another.




                ORGANIZATION OF THE FINANCIAL SECTION




   Report of Independent
                                 Management's Discussion              Basic Financial
      Certified Public
                                      and Analysis                     Statements
       Accountants




                                 Government-Wide Financial                                         Notes to the Financial
                                                                 Fund Financial Statements
                                        Statements                                                     Statements


                                       Summary                                                             Detail




Government-Wide Financial Statements
The government-wide financial statements provide both short-term and long-term information about the
District’s overall financial condition in a manner similar to those of a private-sector business. The statements
include a statement of net assets and a statement of activities that are designed to provide consolidated financial
information about the governmental activities of the primary government presented on the accrual basis of
accounting. The statement of net assets provides information about the government’s financial position, its assets
and liabilities, using an economic resources measurement focus. The difference between the assets and liabilities,
the net assets, is a measure of the financial health of the District. The statement of activities presents information
about the change in the District’s net assets, the results of operations, during the fiscal year. An increase or
decrease in net assets is an indication of whether the District’s financial health is improving or deteriorating.

The government-wide statements present the District’s activities in two categories:

     Governmental activities – This represents most of the District’s services, including its educational
      programs: basic, vocational, adult, and exceptional education. Support functions such as transportation
      and administration are also included. Local property taxes and the State’s education finance program
      provide most of the resources that support these activities.




                                                         4
     Component units – The District presents five separate legal entities in this report, including The
      Foundation for Osceola Education, Inc.; the New Dimensions High School, Inc.; the Four Corners
      Charter School, Inc.; the Bellalago Educational Facilities Benefit District; and the Flora Ridge
      Educational Facilities Benefit District. Although legally separate organizations, the component units are
      included in this report because they meet the criteria for inclusion provided by generally accepted
      accounting principles. Financial information for these component units is reported separately from the
      financial information presented for the primary government.
The government-wide financial statements can be found on pages 16 – 17 of this report.
Fund Financial Statements
Fund financial statements are one of the components of the basic financial statements. A fund is a grouping of
related accounts that is used to maintain control over resources that have been segregated for specific activities or
objectives. The District uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements and prudent fiscal management. Certain funds are established by law while others are created by
legal agreements, such as bond covenants. Fund financial statements provide more detailed information about
the District’s financial activities, focusing on its most significant or “major” funds rather than fund types. This is
in contrast to the entity-wide perspective contained in the government-wide statements. All of the District’s
funds may be classified within one of three broad categories as discussed below.

Governmental Funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental funds financial statements focus on near-term inflows and outflows of
expendable resources, as well as on balances of expendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance
sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.

The District maintains 12 individual governmental funds.             Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes
in fund balances for the major funds. The District’s major funds are the: (1) General Fund, (2) Federal Programs
– Other Fund, (3) Federal Programs – ARRA Economic Stimulus Funds, (4) Capital Projects – Capital
Improvement Fund, and (5) Capital Projects – Other Fund. Data from the other governmental funds are
combined into a single, aggregated presentation.

The District adopts an annual appropriated budget for its General Fund, Federal Programs – Other Fund, and
Federal Programs – ARRA Economic Stimulus Funds. Budgetary comparison statements have been provided on
pages 22-27 of this report to demonstrate compliance with the budget.



                                                        5
The basic governmental fund financial statements can be found on pages 18 – 21 of this report.

Proprietary Funds. Proprietary funds may be established to account for activities in which a fee is charged for
services. One type of proprietary fund is maintained.

The internal service funds are used to report activities that provide goods and services to support the District’s
other programs and functions through user charges. The District uses the internal service funds to account for
the Health and Life Insurance Trust Fund and General and Automobile Liability Fund. Since these services
predominantly benefit governmental rather than business-type functions, the internal service funds have been
included within governmental activities in the government-wide financial statements.

Proprietary fund statements provide the same type of information as the government-wide financial statements,
only in more detail. Conversely, the internal service funds are combined into a single, aggregated column in the
proprietary fund financial statements.

The basic proprietary fund financial statements can be found on pages 28 – 30 of this report.

Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the
government. The District only has agency funds that are classified as fiduciary funds. Fiduciary funds are not
reflected in the government-wide financial statements, because the resources of those funds are not available to
support the District’s own programs. In its fiduciary capacity, the District is responsible for ensuring that the
assets reported in these funds are used only for their intended purposes.

The District uses agency funds to account for: (1) resources held for student activities and groups; (2) the
activities of Bellalago Charter Academy; and (3) the activities of Bellalago Educational Facilities Benefit District.

The Statement of Fiduciary Assets and Liabilities can be found on page 31.

Notes to the Financial Statements.
The notes provide additional information that is essential for a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the basic financial statements can be found on
pages 33 - 63 of this report.

Other Supplemental Information.
The combining statements referred to earlier in connection with non-major governmental funds are presented
immediately following the notes to financial statements. Combining and individual fund statements and other
schedules can be found on pages 67 – 92 of this report.




                                                         6
                               GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. In the
case of the District, assets exceed liabilities by $617,219,939 at June 30, 2009. At the end of the current fiscal
year, the District is able to report positive balances in all categories of net assets, for the government as a whole.

The following is a summary of the District’s net assets as of June 30, 2009, compared to net assets as of June 30,
2008:

                                                  Net Assets, End of Year

                                                                      Governmental
                                                                        Activities
                                                             6/30/2009             6/30/2008

                    Current and Other Assets             $       290,686,776   $    359,716,767
                    Capital Assets                               697,075,390        622,460,169
                     Total Assets                                987,762,166        982,176,936

                    Current Liabilities                           29,516,100         28,214,260
                    Long-term Liabilities                        341,026,127        352,254,891
                      Total Liabilities                          370,542,227        380,469,151

                    Net Assets:
                    Invested in Capital Assets,
                      Net of Related Debt                        438,988,320        354,211,777
                    Restricted                                   155,942,301        220,147,769
                    Unrestricted                                  22,289,318         27,348,239
                      Total Net Assets                   $       617,219,939   $    601,707,785


By far, the largest portion of the District’s net assets, $438,988,320 or 71.12 percent, reflects its investment in
capital assets (e.g., land, buildings, machinery, and equipment), less any related debt used to acquire those assets
that is still outstanding. The District uses these capital assets to educate the students of Osceola County, Florida;
consequently, these assets are not available for future spending. Although the District’s investment in capital
assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the District’s net assets, $155,942,301 (25.27 percent), represents resources that are
subject to external restrictions on how they may be used. There was a decrease of $64,205,468 in restricted net
assets reported in connection with the District's governmental activities. The decrease is the result of previously
accumulated funds used to pay for capital projects during the current year. The remaining net assets, $22,289,318
(3.61 percent), are unrestricted net assets. Unrestricted net assets may be used to meet the government's ongoing
obligations to citizens and creditors. Unrestricted net assets decreased by $5,058,921, from the 2007-08 fiscal
year.




                                                             7
The key elements of the changes in the District’s net assets for the fiscal years ended June 30, 2009, and June 30,
2008, are as follows:

                                        Operating Results for the Year
                                                                             Governmental
                                                                              Activities
                                                                    06-30-09             06-30-08

     Revenues:
     Program Revenues:
       Charges for Services                                     $        11,525,811   $      11,046,611
       Operating Grants and Contributions                                25,304,330          24,531,347
       Capital Grants and Contributions                                  22,362,064         122,609,838
     General Revenues:
       Property Taxes                                                197,690,319            195,577,670
       Local Sales Taxes                                               9,143,244             10,292,844
     Grants and Contributions not Restricted
       to Specific Programs                                          223,928,922            248,186,167
     Investment Earnings                                               3,253,100              9,128,755
     Miscellaneous                                                     9,305,721             10,991,313
     Total Revenues                                                  502,513,511            632,364,545

     Functions/Program Expenses:
      Instruction                                                    243,009,744            261,976,401
      Pupil Personnel Services                                        23,755,838             24,153,125
      Instructional Media Services                                     5,292,967              6,059,524
      Instruction and Curriculum Development                          20,144,676             23,464,063
      Instructional Staff Training Services                            6,556,067              9,507,952
      Instruction Related Technology                                   4,534,355              4,373,774
      Board of Education                                               1,594,329              2,179,387
      General Administration                                           2,988,478              2,589,737
      School Administration                                           20,969,528             22,649,997
      Facilities Acquisition and Construction                         15,224,107             19,814,471
      Fiscal Services                                                  1,872,802              2,062,828
      Food Services                                                   22,822,423             25,147,719
      Central Services                                                 6,693,873              7,135,483
      Pupil Transportation Services                                   21,163,277             21,620,725
      Operation of Plant                                              29,917,708             31,115,952
      Maintenance of Plant                                             8,415,184              8,896,778
      Administrative Technology Services                               3,435,841              3,604,125
      Community Services                                               3,670,126              3,798,924
      Interest on Long-Term Debt                                      16,107,532             15,859,473
      Unallocated Depreciation Expense                                28,832,502             27,626,338
     Total Expenses                                                  487,001,357            523,636,776

     Increase in Net Assets                                              15,512,154          108,727,769

     Net Assets, Beginning                                           601,707,785             492,980,016

     Net Assets, Ending                                         $    617,219,939      $      601,707,785
                                                                                                             .

The total government-wide net assets increased by $15,512,154 during the current fiscal year. The increase
represents the degree to which increases in ongoing revenues have outpaced increases in ongoing expenses.


                                                      8
                          Expenses and Program Revenues - Governmental Activities

                                                         Expenses   Revenues



                                                                                           Millions
                                          0     50            100        150   200   250      300

                            Instruction
              Pupil Personnel Services
          Instructional Media Services
           Instruction and Curriculum …
  Instructional Staff Training Services
       Instruction Related Technology
                   Board of Education
               General Administration
                School Administration
Facilities Acquisition and Construction
                        Fiscal Services
                         Food Services
                      Central Services
         Pupil Transportation Services
                    Operation of Plant
                 Maintenance of Plant
  Administrative Technology Services
                  Community Services
          Interest on Long-term Debt
             Unallocated Depreciation




                                                     9
                                 Revenues by Source - Govermental Activities

                                                                   Grants and
                                                               Contributions Not
                                                              Restricted to Specific
                                                                    Programs
                                                                       45%
                                        Sales Taxes
                                            2%




                Property Taxes
                                                                                   Investment Earnings
                     39%
                                                                                           1%


                                                                                             Miscellaneous
                          Capital Grants and                                                      2%
                            Contributions
                                  4%                                                   Charges for Services
                                                                                               2%
                                                              Operating Grants and
                                                                 Contributions
                                                                      5%




Governmental Activities.
Governmental activities increased the District’s net assets by $15,512,154, accounting for all of the total growth in
the net assets of the District. Key elements of the increase are as follows:

     Restricted Net Assets decreased by $64,205,468 and Unrestricted Net Assets decreased by $5,058,921.
     Investments in Capital Assets, Net of Related Debt, increased by $84,776,543.
     A planned reduction of expenses due to the decrease in revenues and the number of students.

State revenues decreased by $106,397,352 or 33.20 percent due to a decline in State funds received for the
construction of new educational facilities to assist in complying with class size requirements.

The largest revenue sources are the State of Florida and local sources. Combined, these two revenue sources
account for 90.35 percent of total revenues. Revenues from State sources for current operations are primarily
received through the Florida Education Finance Program (FEFP) funding formula. The FEFP formula utilizes
student enrollment data, and is designed to maintain equity in funding across all Florida school districts, taking
into consideration the District’s funding ability based on the local property tax base. Revenues from local sources
consist primarily of ad valorem taxes and impact fees.

Instructional expenses represent 49.90 percent of total governmental expenses in the 2008-09 fiscal year.
Instructional expenses decreased by $18,966,657 or 7.24 percent, from the previous year due mainly to a planned
reduction of expenses due to the decreases in revenues and student enrollment.




                                                         10
                              FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS

As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related
legal requirements.

The focus of the governmental funds is to provide information on near-term inflows, outflows, and balances of
expendable resources. Such information is useful in assessing the District's financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a government's net resources available for spending at
the end of the fiscal year.

As of the end of the current fiscal year, the District's governmental funds report combined ending fund balances
of $255,802,381, a decrease of $72,872,031, in comparison with the 2007-08 fiscal year. Combined unreserved
fund balances of $211,263,878 represents 82.59 percent of the ending fund balances and are available to meet the
District's short-term spending needs within the corresponding fund types. Remaining fund balances are reserved
to indicate that they are not available for new spending, because they have already been committed: 1) to liquidate
contracts and purchase orders outstanding at year-end of $26,484,057; 2) to pay debt service of $1,842,448; 3) to
fund state categorical programs of $9,502,936; 4) to earmark state required carryover for capital projects of
$4,106,007; and 5) to fund other grants of $2,603,055.

Major Governmental Funds
The General Fund is the chief operating fund of the District. At the end of the current fiscal year, the unreserved
fund balance of the General Fund was $44,255,581, while total fund balance reached $59,492,679. As a measure
of the General Fund's liquidity, it may be useful to compare both unreserved fund balance and total fund balance
to total expenditures. Unreserved fund balance represents 11.89 percent of total General Fund expenditures,
while total fund balance represents 15.99 percent of that same amount.

During the current fiscal year, the fund balance of the General Fund increased by $4,712,174. This was the result
of an expenditure reduction plan due to the reduction of State revenues.

The fund balance for the Capital Projects - Other Fund decreased by $71,396,939 to $140,268,775. The decrease
in this fund is mainly due to the timing differences between collecting funds for and expending these funds on
construction projects.

The fund balance for the Capital Projects – Capital Improvement Section 1011.71(2) Fund decreased by
$6,469,539 to $28,273,446, mainly due to the timing differences between collecting funds for and expending these
funds on construction projects.

There was no change to the fund balance for the Other Federal Programs Fund or ARRA Economic Stimulus
Fund during the year since revenue cannot be recognized prior to incurring expenditures.

The fund balance for non-major funds – reported as Other Governmental Funds – increased by $282,273 to
$27,767,481. This increase is due to the cumulative ongoing revenues outpacing cumulative ongoing expenses.



                                                         11
Proprietary Funds

The District’s proprietary funds provide the same type of information found in the government-wide financial
statements. The District’s proprietary fund includes two internal service funds that are used to account for its
self-insurance programs. Net assets increased by $3,094,941 due to premiums paid into the funds exceeding
claims and other expenses.

                              GENERAL FUND BUDGETARY HIGHLIGHTS

During the current fiscal year, the District received approximately $22,600,000 of State formula revenues less than
the initially projected amount. This decrease was primarily due to a reduction of State revenues and a decline in
student enrollment. The projected student decrease for the year was 45; the actual student decrease for the year
was 830.

The final budget exceeded the final expenditures by $15,594,899. The primary reason for this variance is a
planned reduction in spending due to the reduction of State revenues.

                             CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets
The District’s investment in capital assets for the governmental activities as of June 30, 2009, amounts to
$697,075,390 (net of accumulated depreciation). This investment in capital assets includes land; construction in
progress; improvements other than buildings; buildings and fixed equipment; furniture, fixtures and equipment;
motor vehicles; investments in the educational facilities benefit district; and audio visual materials and computer
software. The total increase in the District’s investment in capital assets (net of accumulated depreciation) for the
current fiscal year was $74,615,221, or a 11.99 percent increase from the 2007-08 fiscal year.

Major capital asset events during the current fiscal year included the following:

     The final stages of construction of one multi-level school and two elementary schools.
     The final stages of construction of classroom wings at two elementary schools.
     The design phase for classroom wings at two elementary schools.
     The final stages of roofing at two elementary schools and one high school.
     Construction in progress for a theater at one high school.
     Acquisition of land for a new elementary school.
     The design phase for major renovations at two high schools.
     The start-up of construction at one elementary school.
     The final stages of HVAC replacement and renovations at one elementary school.
     Begin renovation of former alternative education facility for an adult learning center.




                                                       12
    Following is a summary of the District’s capital assets as of June 30, 2009, compared to June 30, 2008.
                                             Schedule of Capital Assets
                                         (net of accumulated depreciation)

                                                                      Governmental Activities
                                                                June 30, 2009       June 30, 2008

           Land                                             $       47,761,700     $         42,889,488
           Construction in Progress                                 86,279,693               32,018,196
           Improvements Other Than Buildings                        15,746,608               14,826,812
           Buildings and Fixed Equipment                           503,116,459              486,727,477
           Furniture, Fixtures, and Equipment                       16,463,195               19,775,638
           Motor Vehicles                                           19,976,460               18,211,136
           Investment In EFBD                                        6,723,278                7,072,032
           Audio Visual Materials and
            Computer Software                                        1,007,997                  939,390
             Total                                          $      697,075,390     $        622,460,169


Additional information on the District’s capital assets can be found in Note 5 to the financial statements.

Long-Term Debt
At the end of the current fiscal year, the District’s long-term debt principal, excluding premiums and discounts,
totals $311,355,364. Of this amount, $275,825,000 is outstanding bonded debt, $26,391,329 is outstanding notes
payable, and $9,139,035 is other long-term debt. Bonded debt constituted the largest portion of long-term debt at
the end of the fiscal year and was comprised of $14,600,000 of bonds issued on behalf of and by the State Board
of Education (SBE) and backed by the full faith and credit of the State of Florida; $79,540,000 outstanding in
District Revenue Bonds; and $181,685,000 in certificates of participation.




                                                       13
Following is a summary of the District’s long-term debt as of June 30, 2009, compared to June 30, 2008.

                                    Schedule of Outstanding Long-Term Debt
                                       (excluding premiums and discounts)

                                                                  Governmental Activities
                                                            June 30, 2009        June 30, 2008
              State School (SBE) Bonds                  $         14,600,000     $         15,615,000
              District Revenue Bonds                              79,540,000               82,910,000
              Certificates of Participation                      181,685,000              187,910,000
              Notes Payable                                       26,391,329               26,173,571
              Other Long-Term Debt                                 9,139,035               12,817,753

              Total Outstanding Long-Term Debt          $        311,355,364     $        325,426,324




The District’s total debt decreased by $14,071,437 or 4.32 percent, during the current fiscal year.

Additional information on the District’s long term debt can be found in Notes 6 - 12 to the financial statements.

                                  OTHER MATTERS OF SIGNIFICANCE

As of May 2008, the Florida Legislature’s Office of Economic and Demographic Statistics reports the
unemployment rate for Osceola County, Florida, at 11.6 percent. This is an increase from the rate of 4.3 percent
a year ago and is slightly higher than the State’s average unemployment rate of 11.0 percent. Inflationary trends in
the region compare favorably to national indices.

During the current fiscal year, unreserved fund balance in the General Fund decreased from $52,509,629 to
$44,255,581. This is due to increases in amounts reserved for state categorical and other grant programs which
were previously recorded as designations of fund balance.

                                      REQUESTS FOR INFORMATION

This report is designed to provide citizens, taxpayers, customers, investors, and creditors with a general overview
of the District’s finances and to demonstrate compliance and accountability for its resources.           Questions
concerning any of the information provided in this report or requests for additional financial information should
be addressed to the Director of Finance, Osceola County School District, 817 Bill Beck Boulevard, Kissimmee,
Florida 34744.




                                                       14
BASIC FINANCIAL STATEMENTS




            15
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF NET ASSETS
June 30, 2009
                                                                               Governmental                Component
ASSETS                                                                           Activities                  Units
Cash and Cash Equivalents                                               $              73,095,125      $       12,388,399
Investments                                                                          172,573,225                1,972,172
Accounts Receivable                                                                       473,847               1,880,738
Prepaid Items                                                                                                       9,839
Interest Receivable                                                                                                31,641
Deposits Receivable                                                                                                 8,771
Due from Other Agencies                                                                   38,613,146            1,146,970
Inventories                                                                                2,121,636
Deferred Charges                                                                           2,854,271             1,786,898
Restricted Assets:
       Cash with Fiscal Agent                                                               955,526              2,596,304
Capital Assets:
       Land                                                                               47,761,700             1,513,220
       Construction in Progress                                                           86,279,693
       Improvements Other Than Buildings, Net                                             15,746,608               290,641
       Buildings and Fixed Equipment, Net                                                503,116,459            35,074,495
       Furniture, Fixtures and Equipment, Net                                             16,463,195             1,498,261
       Motor Vehicles, Net                                                                19,976,459                 6,497
       Investment in Educational Facilities Benefit District, Net                          6,723,278
       Audio Visual Materials and Computer Software, Net                                   1,007,998               242,678
            Total Assets                                                $                987,762,166   $        60,447,524
LIABILITIES
Salaries and Benefits Payable                                           $                  1,035,980   $
Payroll Deductions and Withholdings                                                          891,699               149,347
Accounts Payable                                                                           3,687,281             1,441,438
Construction Contracts Payable                                                             5,909,926
Construction Contracts Payable-Retainage                                                   4,019,676
Accrued Interest Payable                                                                   2,032,399             1,155,144
Due to Other Agencies                                                                      3,825,911             1,377,748
Sales Tax Payable                                                                              2,880
Unearned Revenue                                                                           3,362,382               27,660
Estimated Insurance Claims Payable                                                         4,747,966
Long-Term Liabilities:
 Portion Due Within One Year:
      Obligations Under Capital Leases                                                                              4,286
      Bonds Payable                                                                        4,679,306              885,000
      Notes Payable                                                                        2,462,434              194,343
      Installment Purchases Payable                                                        1,100,412
      Certificates of Participation Payable                                                6,214,126
      Compensated Absences Payable                                                         1,844,747
 Portion Due After One Year:
      Bonds Payable                                                                       91,292,380            49,390,255
      Notes Payable                                                                       21,374,408               436,090
      Installment Purchases Payable                                                        1,454,074
      Certificates of Participation Payable                                              171,014,153
      Compensated Absences Payable                                                        12,929,369
      Other Post-employment Benefits Payable                                              17,521,683
      Educational Facilities Benefit District Agreement Payable                            9,139,035
             Total Liabilities                                                           370,542,227            55,061,311
NET ASSETS
Invested in Capital Assets, Net of Related Debt                                          438,988,320            (1,413,187)
Restricted For:
      State Categorical Programs                                                          10,173,611
      Debt Service                                                                         2,664,319
      Capital Projects                                                                   141,212,808                50,539
      Other Purposes                                                                       1,891,563             1,471,761
Unrestricted                                                                              22,289,318             5,277,100
             Total Net Assets                                                            617,219,939             5,386,213
Total Liabilities and Net Assets                                        $                987,762,166   $        60,447,524
The accompanying notes to financial statements are an integral part of this statement.

                                                                  16
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     STATEMENT OF ACTIVITIES
     For the Fiscal Year Ended June 30, 2009
                                                                                                                                                                          Net (Expense) Revenue
                                                                                                              Program Revenues                                          and Changes in Net Assets
                                                                                                                    Operating                Capital            Primary Government
                                                                                            Charges for             Grants and              Grants and             Governmental           Component
     FUNCTIONS                                                      Expenses                 Services              Contributions           Contributions             Activities              Units
     Governmental Activities:
      Instruction                                           $         243,009,744     $          1,577,484     $                       $                    $         (241,432,260)   $
      Pupil Personnel Services                                         23,755,838                                                                                      (23,755,838)
      Instructional Media Services                                      5,292,967                                                                                       (5,292,967)
      Instruction and Curriculum Development Services                  20,144,676                                                                                      (20,144,676)
      Instructional Staff Training Services                             6,556,067                                                                                       (6,556,067)
      Instruction Related Technology                                    4,534,355                                                                                       (4,534,355)
      Board of Education                                                1,594,329                                                                                       (1,594,329)
      General Administration                                            2,988,478                                                                                       (2,988,478)
      School Administration                                            20,969,528                                                                                      (20,969,528)
      Facilities Acquisition and Construction                          15,224,107                                                              11,622,121               (3,601,986)
      Fiscal Services                                                   1,872,802                                                                                       (1,872,802)
      Food Services                                                    22,822,423                6,905,070               15,988,714                                         71,361
      Central Services                                                  6,693,873                                                                                       (6,693,873)
      Pupil Transportation Services                                    21,163,277                  470,324                 9,315,616                                   (11,377,337)
      Operation of Plant                                               29,917,708                                                                                      (29,917,708)
      Maintenance of Plant                                              8,415,184                                                              10,719,386                2,304,202




17
      Administrative Technology Services                                3,435,841                                                                                       (3,435,841)
      Community Services                                                3,670,126                2,572,933                                                              (1,097,193)
      Loss on Disposal of Capital Assets                                  963,035                                                                                         (963,035)
      Interest on Long-term Debt                                       15,144,497                                                                  20,557              (15,123,940)
      Unallocated Depreciation Expense                                 28,832,502                                                                                      (28,832,502)
     Total Primary Government                               $         487,001,357      $        11,525,811      $        25,304,330    $       22,362,064             (427,809,152)
     Component Units:
       Educational Foundation                               $          20,128,390      $            74,100      $          3,695,331   $                                                   (16,358,959)
       Educational Facilities Benefit Districts                         4,652,572                                                               1,767,801                                   (2,884,771)
      Charter Schools                                                   8,322,803                   32,482                                        831,465                                   (7,458,856)
     Total Component Units                                  $          33,103,765      $           106,582      $          3,695,331   $        2,599,266                                  (26,702,586)

                                                                General Revenues:
                                                                Taxes:
                                                                  Property Taxes, Levied for Operational Purposes                                                     151,594,547
                                                                  Property Taxes, Levied for Capital Projects                                                          46,095,772
                                                                  Local Sales Taxes                                                                                     9,143,244
                                                                Grants and Contributions Not Restricted to Specific Programs                                          223,928,922           25,573,264
                                                                Unrestricted Investment Earnings                                                                        3,253,100              370,859
                                                                Miscellaneous                                                                                           9,305,721            2,266,790
                                                                Special Item                                                                                                               (18,091,123)
                                                                  Total General Revenues and Special Item                                                             443,321,306           10,119,790
                                                                   Change in Net Assets                                                                                15,512,154          (16,582,796)
                                                                Net Assets - July 1, 2008                                                                             601,707,785           21,969,009
                                                                Net Assets - June 30, 2009                                                                  $         617,219,939     $      5,386,213

     The accompanying notes to financial statements are an integral part of this statement.
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     BALANCE SHEET
     GOVERNMENTAL FUNDS
     June 30, 2009

                                                                                                  Federal Programs -        ARRA Economic           Capital Projects -       Capital Projects -           Other                  Total
                                                                             General                    Other                  Stimulus           Capital Improvement             Other                Governmental           Governmental
                                                                              Fund                      Fund                    Funds                      Fund                    Fund                   Funds                  Funds
     ASSETS
     Cash and Cash Equivalents                                     $             13,281,840   $             2,964,607   $                     $              5,492,085   $           33,539,385    $          6,965,617   $        62,243,534
     Investments                                                                 46,051,459                                                                 24,565,458              101,577,240                 379,067           172,573,224
     Accounts Receivable                                                            282,185                      427                                             8,655                    3,578                  12,480               307,325
     Due from Other Funds                                                         4,075,755                                                                                             948,363                 133,270             5,157,388
     Due from Other Agencies                                                        396,747                  686,985                204,507                     32,933               14,680,974              22,611,000            38,613,146
     Inventories                                                                  1,802,099                                                                                                                     319,537             2,121,636
        Total Assets                                               $             65,890,085   $             3,652,019   $           204,507   $             30,099,131   $          150,749,540    $         30,420,971   $       281,016,253
     LIABILITIES AND FUND BALANCES
     Liabilities:
     Salaries and Benefits Payable                                 $                636,344   $              350,368    $                     $                          $                         $             49,268   $          1,035,980
     Payroll Withholdings and Deductions                                            801,291                   81,717                                                                                              8,690                891,698
     Accounts Payable                                                             1,499,386                  493,190                 27,453                    248,738                   476,901                292,325              3,037,993
     Construction Contracts Payable                                                                                                                          1,090,996                 3,700,861              1,118,069              5,909,926
     Construction Contracts Payable-Retainage                                                                                                                  485,951                 3,533,726                                     4,019,677
     Due to Other Funds                                                             149,237                  547,573                177,054                                            2,469,277              1,007,131              4,350,272
     Due to Other Agencies                                                        3,238,809                  208,290                                                                     300,000                 78,812              3,825,911
     Sales Tax Payable                                                                2,441                                                                                                                         439                  2,880
     Deferred Revenue                                                                69,898                 1,970,881                                                                                            98,756              2,139,535




18
       Total Liabilities                                                          6,397,406                 3,652,019               204,507                  1,825,685                10,480,765              2,653,490             25,213,872
     Fund Balances:
         Reserved for State Categorical Programs                                  9,502,936                                                                                            4,106,007                                    13,608,943
         Reserved for Encumbrances                                                3,131,107                                                                  4,166,606                 8,588,165             10,598,179             26,484,057
         Reserved for Other Purposes                                              2,603,055                                                                                                                   1,842,448              4,445,503
        Unreserved, Reported in:
        General Fund                                                             44,255,581                                                                                                                                         44,255,581
        Special Revenue Funds                                                                                                                                                                                 2,604,232              2,604,232
        Capital Projects Funds                                                                                                                              24,106,840              127,574,603              12,722,622            164,404,065
         Total Fund Balances                                                     59,492,679                                                                 28,273,446              140,268,775              27,767,481            255,802,381
     TOTAL LIABILITIES AND FUND BALANCES                           $             65,890,085   $             3,652,019   $           204,507   $             30,099,131   $          150,749,540    $         30,420,971   $        281,016,253

     The accompanying notes to financial statements are an integral part of this statement.
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
June 30, 2009

Total Fund Balances - Governmental Funds                                                                               $   255,802,381

Amounts reported for governmental activities in the statement of net assets are different because:

Capital assets, net of accumulated depreciation, used in governmental activities are not
      financial resources and, therefore, are not reported as assets in the governmental funds.                            697,075,390

Debt issuance costs are not expensed in the government-wide statements, but are reported
      as deferred charges and amortitized over the life of the debt.                                                          2,854,271

Internal service funds are used by management to charge the costs of certain activities,
      such as insurance, to individual funds. The assets and liabilities of the internal service funds
      are included in governmental activities in the statement of net assets.                                                 5,769,268

Interest on long-term debt is accrued as a liability in the government-wide statements, but is not
      recognized in the governmental funds until due.                                                                        (2,032,399)

Unearned revenue associated with non cash impact fee credits are accrued in the government-wide
     statements but are not recognized in the governmental funds.                                                            (1,222,845)

Long-term liabilities are not due and payable in the current period and, therefore, are not
     reported as liabilities in the governmental funds. Long-term liabilities at year-end consist of :

                 Bonds Payable                                                                            95,971,686
                 Notes Payable                                                                            23,836,842
                 Installment-Purchases Payable                                                             2,554,486
                 Certificates of Participation Payable                                                   177,228,279
                 Educational Facility Benefit District Agreement Payable                                   9,139,035
                 Compensated Absences Payable                                                             14,774,116
                 Other Post-employment Benefits Obligations                                               17,521,683       (341,026,127)

Total Net Assets - Governmental Activities                                                                             $   617,219,939


The accompanying notes to financial statements are an integral part of this statement.




                                                                    19
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
     GOVERNMENTAL FUNDS
     For the Fiscal Year Ended June 30, 2009

                                                                                                  Federal Programs -       ARRA Economic         Capital Projects -        Capital Projects -          Other                   Total
                                                                          General                       Other                 Stimulus          Capital Improvement             Other               Governmental            Governmental
                                                                           Fund                         Fund                   Funds                    Fund                     Fund                  Funds                   Funds
     REVENUES
     Intergovernmental:
        Federal Direct                                           $             330,585        $           3,213,991    $                    $                          $                        $                       $         3,544,576
        Federal Through State                                                  218,126                   28,432,632               604,507                                                                15,661,865              44,917,130
        State                                                              197,705,620                                                                                             3,104,542             13,218,629             214,028,791
     Local                                                                 161,547,573                                                                   46,347,867               11,473,406             20,487,112             239,855,958
        Total Revenues                                                     359,801,904                   31,646,623               604,507                46,347,867               14,577,948             49,367,606             502,346,455
     EXPENDITURES
     Current-Education:
       Instruction                                                         225,527,599                   16,322,622               569,124                                                                          80           242,419,425
       Pupil Personnel Services                                             21,427,892                    2,320,109                27,513                                                                                        23,775,514
       Instructional Media Services                                          5,260,439                       47,670                                                                                                               5,308,109
       Instruction and Curriculum Development Services                      12,824,419                    7,102,503                                                                                        234,897               20,161,819
       Instructional Staff Training Services                                 4,520,008                    2,069,853                                                                                                               6,589,861
       Instruction Related Technology                                        4,439,861                       74,579                                                                                                               4,514,440
       Board of Education                                                    1,596,656                                                                                                                                            1,596,656
       General Administration                                                1,641,402                     1,340,585                                                                                          9,617               2,991,604
       School Administration                                                20,961,935                        55,354                                                                                                             21,017,289
       Facilities Acquisition and Construction                               4,180,202                                                                    4,294,228                 3,947,265             2,773,749              15,195,444
       Fiscal Services                                                       1,840,274                                                                                                                                            1,840,274




20
       Food Services                                                            41,674                          366                                                                                      22,753,197              22,795,237
       Central Services                                                      6,429,027                      227,075                                                                                                               6,656,102
       Pupil Transportation Services                                        17,288,422                      573,550                                                                                                              17,861,972
       Operation of Plant                                                   30,462,940                        2,430                                                                                           1,271              30,466,641
       Maintenance of Plant                                                  8,366,075                                                                                                                          669               8,366,744
       Administrative Technology Services                                    3,431,664                                                                                                                                            3,431,664
       Community Services                                                      254,165                      393,733                                                                                       3,032,975               3,680,873
     Fixed Capital Outlay:
       Facilities Acquisition and Construction                                   77,272                     325,358                                      10,932,246               78,138,482              8,328,263              97,801,621
       Other Capital Outlay                                                     900,393                     790,836                 7,870                 5,039,989                2,918,707                145,560               9,803,355
     Debt Service:
       Principal                                                               544,150                                                                                                                   13,642,567              14,186,717
       Interest and Fiscal Charges                                              83,050                                                                                                45,885             14,690,545              14,819,480
        Total Expenditures                                                 372,099,519                   31,646,623               604,507                20,266,463               85,050,339             65,613,390             575,280,841
     Excess (Deficiency) of Revenues Over Expenditures                     (12,297,615)                                                                  26,081,404              (70,472,391)           (16,245,784)            (72,934,386)
     OTHER FINANCING SOURCES (USES)
     Transfers In                                                            17,180,011                                                                                             1,916,287            18,575,652              37,671,950
     Insurance Loss Recoveries                                                   62,355                                                                                                                                              62,355
     Transfers Out                                                             (232,577)                                                                (32,550,943)              (2,840,835)            (2,047,595)            (37,671,950)
        Total Other Financing Sources (Uses)                                 17,009,789                                                                 (32,550,943)                (924,548)            16,528,057                  62,355
      Net Change in Fund Balances                                             4,712,174                                                                  (6,469,539)             (71,396,939)               282,273             (72,872,031)
     Fund Balances, July 1, 2008                                             54,780,505                                                                  34,742,985              211,665,714             27,485,208             328,674,412
     Fund Balances, June 30, 2009                                $           59,492,679       $                        $                    $            28,273,446    $         140,268,775    $        27,767,481     $       255,802,381

     The accompanying notes to financial statements are an integral part of this statement.
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Fiscal Year Ended June 30, 2009

Net Change in Fund Balances - Total Governmental Funds                                                                          $   (72,872,031)

Amounts reported for governmental activities in the statement of activities are different because:

Capital outlays are reported in the 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 of capital outlays in excess of depreciation
       expense in the current period.
          Capital outlays net of amounts not capitalized                                                     $   107,604,976
          Depreciation expense                                                                                   (32,109,556)       75,495,420

Capital assets donated to the District increase net assets in the government-wide statements,
       but are not financial resources and, therefore, are not reported in the governmental funds.
       This is the value of capital assets donated during the current year.                                                          1,530,437

The cost of capital assets disposed of during the current year is expensed in the statement of activities.
      In the governmental funds, the cost of these assets was recognized as an expenditure in the year
      purchased. Thus, the change in net assets differs from the change in fund balances by the
      undepreciated cost of the disposed assets.                                                                                     (2,410,634)

Repayment of long-term debt is an expenditure in the governmental funds, but the repayment reduces
     long-term liabilities in the statement of net assets. This is the net effect of the transactions.                              14,070,963

Premiums and discounts on bonds issued, along with debt issuance costs, are reported in the
      governmental funds, in the year debt is issued, but are deferred and amortized over the life of the
      debt in the statement of activities.                                                                                            (131,568)

Deferred charges associated with long-term debt issued in a prior period are reported in the
      statement of activities, but are not a current financial resource and, therefore, are not reported
      in the governmental funds. This is the net increase in deferred charges during the current period.                              (180,814)

Interest on long-term debt is recognized as an expenditure in the governmental funds when due,
       but is recognized as interest accrues in the statement of activities.                                                           103,120

In the statement of activities, the cost of compensated absences is measured by the amounts
       earned during the year, while in the governmental funds expenditures are recognized based on
       the amounts actually paid for compensated absences. This is the net amount of compensated
       absences paid in excess of the amount paid in the current period.                                                             1,338,405

In the statement of activities, the cost of other post-employment benefits is measured by the
       increase in the net OPEB obligation during the year, while in the governmental funds,
       expenditures are recognized based on the amounts actually paid for the OPEB costs. This is the
       amount of the increase in the OPEB obligation in excess of the amount paid in the current period.                             (4,526,085)

Internal service funds are used by management to charge the cost of certain activities,
       such as insurance, to individual funds. The net revenue of internal service
       funds is reported with governmental activities.                                                                               3,094,941

Change in Net Assets - Governmental Activities                                                                                  $   15,512,154


The accompanying notes to financial statements are an integral part of this statement.




                                                                               21
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
For the Fiscal Year Ended June 30, 2009
                                                                                                                           Variance with
                                                                   Budgeted Amounts                      Actual            Final Budget -
                                                        Original                      Final             Amounts            Over (Under)
REVENUES
Intergovernmental:
   Federal Direct                                   $        300,000        $             330,585   $        330,585   $
   Federal Through State                                                                  218,126            218,126
   State                                                 220,504,989                  197,890,705        197,705,620               (185,085)
Local                                                    154,073,153                  160,507,070        161,547,573              1,040,503
   Total Revenues                                        374,878,142                  358,946,486        359,801,904                855,418
EXPENDITURES
Current - Education:
  Instruction
      Salaries                                           135,804,438                  136,550,295        134,007,682              2,542,613
      Employee Benefits                                   46,267,067                   46,155,022         44,344,279              1,810,743
      Purchased Services                                  34,832,266                   35,880,209         35,700,462                179,747
      Energy Services                                                                       7,213              4,644                  2,569
      Materials and Supplies                              35,465,964                   13,684,059          6,387,973              7,296,086
      Capital Outlay                                         715,604                    2,321,121          2,098,575                222,546
      Other Expenses                                       2,409,871                    2,995,908          2,983,984                 11,924
  Pupil Personnel Services
      Salaries                                            15,859,714                   15,839,572         15,830,326                  9,246
      Employee Benefits                                    4,871,115                    5,297,341          5,295,322                  2,019
      Purchased Services                                     102,125                       73,706             72,206                  1,500
      Materials and Supplies                                 169,351                      121,760            121,391                    369
      Capital Outlay                                          35,150                       50,824             45,304                  5,520
      Other Expenses                                           7,475                       63,343             63,343
  Instructional Media Services
      Salaries                                             3,210,047                    3,266,500          3,266,500
      Employee Benefits                                    1,036,986                    1,160,248          1,160,248
      Purchased Services                                     136,665                      298,789            296,727                  2,062
      Materials and Supplies                                 152,481                       72,084             71,914                    170
      Capital Outlay                                         249,609                      450,108            440,677                  9,431
      Other Expenses                                          36,940                       24,373             24,373
  Instruction and Curriculum Development Services
      Salaries                                            11,273,127                    9,604,895          9,591,753                 13,142
      Employee Benefits                                    4,519,678                    2,962,005          2,958,199                  3,806
      Purchased Services                                     188,892                      106,621             98,053                  8,568
      Energy Services                                                                         504                504
      Materials and Supplies                                 283,235                      117,997            117,180                    817
      Capital Outlay                                          41,898                       36,030             36,030
      Other Expenses                                          33,110                       22,700             22,700
  Instructional Staff Training Services
      Salaries                                             1,808,783                    3,056,644          3,034,327                 22,317
      Employee Benefits                                      512,445                      733,910            731,968                  1,942
      Purchased Services                                     238,631                      523,730            482,882                 40,848
      Materials and Supplies                                 683,387                      230,719            104,302                126,417
      Capital Outlay                                          14,068                       35,902             33,781                  2,121
      Other Expenses                                          54,610                      191,206            132,748                 58,458
  Instruction Related Technology
      Salaries                                             2,719,710                    3,344,863          3,344,863
      Employee Benefits                                      821,823                    1,089,632          1,089,632
      Purchased Services                                       2,600                        3,217              3,217
      Energy Services                                                                          95                 95
      Materials and Supplies                                        500                       514                514
      Capital Outlay                                                                        1,540              1,540
  Board of Education
      Salaries                                               302,604                      297,197            297,197
      Employee Benefits                                      549,631                      112,797            112,797
      Purchased Services                                   1,783,787                    1,286,534          1,133,216                153,318
      Materials and Supplies                                  25,048                        8,672              8,615                     57
      Capital Outlay                                           1,400                        3,989              3,890                     99
      Other Expenses                                          10,000                       40,941             40,941




                                                                     22
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
For the Fiscal Year Ended June 30, 2009
                                                                                                         Variance with
                                                      Budgeted Amounts                     Actual        Final Budget -
                                           Original                      Final            Amounts        Over (Under)
 General Administration
     Salaries                                   210,161                    1,116,881         1,116,881
     Employee Benefits                           74,721                      357,956           357,956
     Purchased Services                         220,983                      108,100            84,684             23,416
     Energy Services                              1,000                          258               258
     Materials and Supplies                     210,359                       40,765            29,340             11,425
     Capital Outlay                              34,513                       29,323            29,267                 56
     Other Expenses                              30,115                       23,016            23,016
 School Administration
     Salaries                                16,038,839                   15,802,742        15,670,690            132,052
     Employee Benefits                        4,421,327                    4,884,231         4,884,231
     Purchased Services                         328,589                      252,985           252,573                412
     Materials and Supplies                   1,458,727                    1,964,520            67,327          1,897,193
     Capital Outlay                              16,285                       48,817            43,338              5,479
     Other Expenses                               8,300                       43,823            43,776                 47
 Facilities Acquisition and Construction
     Salaries                                 1,319,798                      633,736           633,736
     Employee Benefits                          430,816                      175,768           175,768
     Purchased Services                       4,056,221                    3,349,245         3,335,263             13,982
     Energy Services                             22,000                       11,243            11,243
     Materials and Supplies                      39,629                       13,450            11,307              2,143
     Capital Outlay                             120,940                      108,268            12,235             96,033
     Other Expenses                               6,250                          650               650
 Fiscal Services
     Salaries                                 1,708,463                    1,349,373         1,349,373
     Employee Benefits                          458,391                      446,670           446,670
     Purchased Services                          35,718                       12,194            12,140                    54
     Materials and Supplies                     106,410                       25,396            25,396
     Capital Outlay                               9,500                        4,262             4,262
     Other Expenses                               8,175                        2,433             2,433
 Food Services
     Salaries                                    76,194                          33,055        33,055
     Employee Benefits                           39,254                           8,475         8,475
     Materials and Supplies                                                         144           144
     Capital Outlay
 Central Services
     Salaries                                 4,268,034                    4,018,717         4,003,437             15,280
     Employee Benefits                        1,232,442                    1,312,327         1,309,302              3,025
     Purchased Services                       6,571,607                      742,518           639,416            103,102
     Energy Services                             31,246                       17,717            17,717
     Materials and Supplies                     684,336                      368,875           278,698             90,177
     Capital Outlay                              58,695                       74,263            74,263
     Other Expenses                             138,167                      106,194           106,194
 Pupil Transportation Services
     Salaries                                 9,751,574                    9,448,610         9,448,610
     Employee Benefits                        4,282,805                    4,900,990         4,900,990
     Purchased Services                         636,159                      559,172           520,260             38,912
     Energy Services                          3,159,213                    1,828,520         1,828,520
     Materials and Supplies                     781,539                      345,385           188,102            157,283
     Capital Outlay                              11,501                       70,500            70,500
     Other Expenses                              60,000                      331,440           331,440
 Operation of Plant
     Salaries                                 7,259,003                    6,872,142         6,841,727             30,415
     Employee Benefits                        2,915,792                    2,985,509         2,985,509
     Purchased Services                       2,813,637                    7,190,356         7,146,053             44,303
     Energy Services                         13,571,037                   12,059,792        12,011,552             48,240
     Materials and Supplies                   1,114,294                      687,789           681,517              6,272
     Capital Outlay                              33,053                       55,957            50,537              5,420
     Other Expenses                              75,651                      776,069           746,045             30,024




                                                        23
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
GENERAL FUND
For the Fiscal Year Ended June 30, 2009
                                                                                                                                            Variance with
                                                                                  Budgeted Amounts                       Actual             Final Budget -
                                                                       Original                      Final              Amounts             Over (Under)
  Maintenance of Plant
      Salaries                                                             5,182,968                   4,407,707           4,407,707
      Employee Benefits                                                    1,533,197                   1,845,309           1,845,294                      15
      Purchased Services                                                     677,523                     514,678             501,772                  12,906
      Energy Services                                                        126,000                     209,214             209,214
      Materials and Supplies                                               1,547,226                   1,410,965           1,366,833                  44,132
      Capital Outlay                                                          72,420                      34,215              34,215
      Other Expenses                                                             850                       1,040               1,040
  Administrative Technology Services
      Salaries                                                             2,062,251                   2,089,697           2,089,697
      Employee Benefits                                                      559,727                     634,355             634,355
      Purchased Services                                                     639,223                     608,430             606,854                   1,576
      Materials and Supplies                                                 110,510                      38,272              22,609                  15,663
      Capital Outlay                                                          18,899                      72,721              59,323                  13,398
      Other Expenses                                                          32,213                      18,826              18,826
  Community Services
      Salaries                                                              152,492                      157,787            157,734                          53
      Employee Benefits                                                      57,893                       63,623             63,576                          47
      Purchased Services                                                                                  28,770             28,770
      Materials and Supplies                                                  15,003                      30,582              3,113                   27,469
      Capital Outlay                                                                                         190                190
      Other Expenses                                                           2,000                         782                782
Fixed Capital Outlay:
  Facilities Acquisition and Construction                                    157,655                     188,953             77,272                  111,681
  Other Capital Outlay                                                     2,090,893                     985,146            900,393                   84,753
Debt Service:
  Principal                                                                 584,661                      544,150             544,150
  Interest and Fiscal Charges                                                16,298                       83,056              83,050                       6
   Total Expenditures                                                   413,813,200                  387,694,418         372,099,519              15,594,899
Excess (Deficiency) of Revenues Over Expenditures                       (38,935,058)                 (28,747,932)        (12,297,615)             16,450,317
OTHER FINANCING SOURCES (USES)
Transfers In                                                             17,335,844                   17,180,011          17,180,011
Insurance Loss Recoveries                                                                                 19,881              62,355                  42,474
Transfers Out                                                               (100,000)                   (232,577)           (232,577)
   Total Other Financing Sources                                          17,235,844                  16,967,315          17,009,789                  42,474
 Net Change in Fund Balances                                             (21,699,214)                (11,780,617)          4,712,174              16,492,791
Fund Balances, July 1, 2008                                               54,780,505                  54,780,505          54,780,505
Fund Balances, June 30, 2009                                  $           33,081,291       $          42,999,888    $     59,492,679    $         16,492,791

The accompanying notes to financial statements are an integral part of this statement.




                                                                                    24
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
SPECIAL REVENUE FUND - OTHER FEDERAL PROGRAMS
For the Fiscal Year Ended June 30, 2009
                                                                                                                      Variance with
                                                               Budgeted Amounts                    Actual             Final Budget -
                                                        Original                Final             Amounts             Over (Under)
REVENUES
Intergovernmental:
   Federal Direct                                   $                   $        6,980,120    $      3,213,991    $          (3,766,129)
   Federal Through State                                 32,628,720             36,892,476          28,432,632               (8,459,844)
   Total Revenues                                        32,628,720             43,872,596          31,646,623              (12,225,973)
EXPENDITURES
Current - Education:
  Instruction
      Salaries                                            7,329,910              8,645,265           7,926,094                 719,171
      Employee Benefits                                   2,846,526              3,387,444           3,200,474                 186,970
      Purchased Services                                    467,133              2,989,556           2,582,970                 406,586
      Materials and Supplies                              4,350,085              2,025,467           1,113,252                 912,215
      Capital Outlay                                        334,161              1,694,270           1,228,802                 465,468
      Other Expenses                                         55,082                362,565             271,030                  91,535
  Pupil Personnel Services
      Salaries                                            1,333,592              1,787,526           1,363,814                 423,712
      Employee Benefits                                     441,686                610,710             440,201                 170,509
      Purchased Services                                    403,899                688,203             355,257                 332,946
      Materials and Supplies                                157,264                161,763             109,145                  52,618
      Capital Outlay                                          1,935                 44,667              39,377                   5,290
      Other Expenses                                                                12,315              12,315
  Instructional Media Services
      Salaries                                                 62,048               63,486             17,362                    46,124
      Employee Benefits                                        11,809               12,608              3,074                     9,534
      Capital Outlay                                           12,794               24,854             24,774                        80
      Other Expenses                                                                 2,460              2,460
  Instruction and Curriculum Development Services
      Salaries                                            5,202,710              5,411,021           4,806,894                  604,127
      Employee Benefits                                   1,499,121              1,582,343           1,425,483                  156,860
      Purchased Services                                    396,048              1,100,661             754,352                  346,309
      Materials and Supplies                              1,966,196              2,532,130              82,401                2,449,729
      Capital Outlay                                          8,525                 35,535              31,621                    3,914
      Other Expenses                                          1,853                  4,839               1,752                    3,087
  Instructional Staff Training Services
      Salaries                                                415,350              879,955            659,270                  220,685
      Employee Benefits                                        63,274              175,480            119,531                   55,949
      Purchased Services                                      273,470            1,045,210            642,855                  402,355
      Materials and Supplies                                  601,007            1,259,485            505,337                  754,148
      Capital Outlay                                            6,076               10,890              9,437                    1,453
      Other Expenses                                           29,477              154,623            133,423                   21,200
  Instruction Related Technology
      Salaries                                                149,475               83,253             58,093                    25,160
      Employee Benefits                                        44,690               23,572             16,302                     7,270
      Purchased Services                                          377                  627                184                       443
  General Administration
      Salaries                                              329,251                291,460            196,412                   95,048
      Employee Benefits                                      84,488                159,298             56,465                  102,833
      Purchased Services                                    117,322                276,710            159,619                  117,091
      Materials and Supplies                                    922                 13,464              8,225                    5,239
      Capital Outlay                                          1,741                 12,611              6,631                    5,980
      Other Expenses                                      1,509,624              1,464,156            913,233                  550,923
  School Administration
      Salaries                                                                      43,228             43,228
      Employee Benefits                                                              7,538              7,538
      Purchased Services                                         168                 4,588              4,588
  Facilities Acquisition and Construction
      Capital Outlay                                          296,279              296,279                                     296,279
  Food Services
      Salaries                                                   311                    311                 311
      Employee Benefits                                           54                     55                  55
  Central Services
      Salaries                                                149,201              155,576            146,806                     8,770
      Employee Benefits                                        41,965               44,484             42,436                     2,048
      Purchased Services                                       41,692               83,745             33,035                    50,710
      Materials and Supplies                                   31,044               34,258              3,214                    31,044


                                                         25
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
SPECIAL REVENUE FUND - OTHER FEDERAL PROGRAMS
For the Fiscal Year Ended June 30, 2009
                                                                                                                                                  Variance with
                                                                                            Budgeted Amounts                   Actual             Final Budget -
                                                                                     Original                Final            Amounts             Over (Under)
     Other Expenses                                                                                           1,100,508               1,584               1,098,924
 Pupil Transportation Services
     Salaries                                                                                  33,981            39,028             39,028
     Employee Benefits                                                                          8,666            18,399              9,733                   8,666
     Purchased Services                                                                       287,950           591,430            517,828                  73,602
     Energy Services                                                                                                500                                        500
     Materials and Supplies
     Capital Outlay                                                                                               6,961              6,961
     Other Expenses                                                                            11,753
 Operation of Plant
     Purchased Services                                                                         2,807            10,407              2,430                   7,977
 Maintenance of Plant
     Salaries                                                                                   1,428             1,428                                      1,428
 Administrative Technology Services
     Salaries                                                                                     630               630                                        630
     Employee Benefits                                                                            120               120                                        120
     Purchased Services                                                                        48,288            70,192                                     70,192
 Community Services
     Salaries                                                                                   1,086             4,623                163                   4,460
     Employee Benefits                                                                            127               385                 28                     357
     Materials and Supplies                                                                       660               660                                        660
     Capital Outlay                                                                             9,560             9,560                                      9,560
     Other Expenses                                                                                             393,542            393,542
  Fixed Capital Outlay
    Facilities Acquisition and Construction                                                   403,379           723,763            325,358                 398,405
    Other Capital Outlay                                                                      657,860         1,199,853            790,836                 409,017
  Debt Service
    Principal                                                                                90,790                  66                                         66
  Total Expenditures                                                                     32,628,720          43,872,599         31,646,623              12,225,976
Excess (Deficiency) of Revenues Over (Under) Expenditures
 Net Change in Fund Balances
Fund Balances, July 1, 2008
Fund Balances, June 30, 2009                                                 $                          $                 $                   $

The accompanying notes to financial statements are an integral part of this statement.




                                                                                         26
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
SPECIAL REVENUE FUND - ARRA ECONOMIC STIMULUS FUNDS
For the Fiscal Year Ended June 30, 2009
                                                                                                                                                Variance with
                                                                                            Budgeted Amounts                   Actual           Final Budget -
                                                                                     Original                Final            Amounts           Over (Under)
REVENUES
Intergovernmental:
   Federal Through State                                                     $                       $        6,152,798   $       604,507   $          (5,548,291)
   Total Revenues                                                                                             6,152,798           604,507              (5,548,291)
EXPENDITURES
Current - Education:
  Instruction
      Salaries                                                                                                  164,555                                   164,555
      Employee Benefits                                                                                          33,328                                    33,328
      Purchased Services                                                                                        111,940                                   111,940
      Materials and Supplies                                                                                  4,424,495           539,904               3,884,591
      Capital Outlay                                                                                            238,385            29,220                 209,165
      Other Expenses                                                                                            310,000                                   310,000
  Pupil Personnel Services
      Salaries                                                                                                      495                                       495
      Employee Benefits                                                                                              87                                        87
      Purchased Services                                                                                          7,500                                     7,500
      Materials and Supplies                                                                                     32,500            27,513                   4,987
  Instructional Staff Training Services
      Purchased Services                                                                                        355,200                                  355,200
  General Administration
      Other Expenses                                                                                            239,957                                  239,957
   Fixed Capital Outlay
     Other Capital Outlay                                                                                       234,356             7,870                 226,486
   Total Expenditures                                                                                         6,152,798           604,507               5,548,291
Excess (Deficiency) of Revenues Over (Under) Expenditures
 Net Change in Fund Balances
Fund Balances, July 1, 2008
Fund Balances, June 30, 2009                                                 $                       $                    $                 $

The accompanying notes to financial statements are an integral part of this statement.




                                                                                         27
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
June 30, 2009
                                                                   Governmental
                                                                    Activities -
                                                                  Internal Service
                                                                       Funds
ASSETS
Current Assets:
Cash and Cash Equivalents                                   $            11,807,117
Accounts Receivable                                                          14,140
   Total Assets                                             $            11,821,257

LIABILITIES
Current Liabilities:
Accounts Payable                                            $                633,323
Due to Other Funds                                                           670,700
Estimated Insurance Claims Payable                                         4,747,966
   Total Liabilities                                                       6,051,989

NET ASSETS
Unrestricted                                                              5,769,268
   Total Liabilities and Net Assets                         $            11,821,257

The accompanying notes to financial statements are an integral part of this statement.




                                                 28
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
For the Fiscal Year Ended June 30, 2009
                                           Governmental
                                            Activities -
                                          Internal Service
                                               Funds
OPERATING REVENUES
Premium Revenues                        $         47,095,160
Other Operating Revenues                                   20
  Total Operating Revenues                        47,095,180

OPERATING EXPENSES
Purchased Services                                                            4,982,076
Materials and Supplies                                                            2,558
Insurance Claims                                                             39,037,469
  Total Operating Expenses                                                   44,022,103
Operating Income                                                              3,073,077

NONOPERATING REVENUES
Interest                                                                         21,864
Change In Net Assets                                                          3,094,941
Total Net Assets - July 1, 2008                                               2,674,327
Total Net Assets - June 30, 2009                               $              5,769,268

The accompanying notes to financial statements are an integral part of this statement.




                                                 29
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Fiscal Year Ended June 30, 2009
                                                                                          Governmental
                                                                                           Activities -
                                                                                         Internal Service
                                                                                              Funds
CASH FLOWS FROM OPERATING ACTIVITIES
 Cash Received from Board Funds and Participants                                     $           44,035,458
 Cash Payments to Vendors for Goods and Services                                                (43,825,958)
 Net Cash Provided by Operating Activities                                                          209,500

CASH FLOWS FROM INVESTING ACTIVITIES
 Interest Income                                                                                     21,864
 Net Cash Provided by Investing Activities                                                           21,864
Net Increase in Cash and Cash Equivalents                                                           231,364
Cash and Cash Equivalents, Beginning                                                             11,575,753
Cash and Cash Equivalents, Ending                                                    $           11,807,117

Reconciliation of Operating Loss to Net Cash Provided by Operating Activities:
Operating Income                                                            $                     3,073,077
Adjustments to Reconcile Operating Loss to Net Cash
 Provided by Operating Activities:
 Changes in Assets and Liabilities:
   Increase in Accounts Receivable                                                                   (2,909)
   Decrease in Due to Other Funds                                                                (3,059,722)
   Decrease in Accounts Payable                                                                    (452,275)
   Increase in Estimated Insurance Claims Payable                                                   651,329
    Total Adjustments                                                                            (2,863,577)
Net Cash Provided by Operating Activities                                   $                       209,500

The accompanying notes to financial statements are an integral part of this statement.




                                                   30
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF ASSETS AND LIABILITIES
FIDUCIARY FUNDS
June 30, 2009


                                                                     Agency
                                                                     Funds
ASSETS
Cash and Cash Equivalents                                  $              4,498,729
Accounts Receivable                                                           8,639
Due from School Board                                                        15,967
   Total Assets                                            $              4,523,335

LIABILITIES
Salaries and Benefits Payable                              $                  8,777
Payroll Deductions and Withholdings                                           2,062
Accounts Payable                                                          1,778,975
Due to School Board                                                         152,383
Internal Accounts Payable                                                 2,581,138
  Total Liabilities                                        $              4,523,335

The accompanying notes to financial statements are an integral part of this statement.




                                                 31
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                32
3



                                       OSCEOLA COUNTY
                                   DISTRICT SCHOOL BOARD
                                NOTES TO FINANCIAL STATEMENTS
                                           June 30, 2009


    1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Reporting Entity
              The District School Board has direct responsibility for operation, control, and supervision of District
              schools and is considered a primary government for financial reporting. The Osceola County School
              District is considered part of the Florida system of public education. The governing body of the
              school district is the Osceola County District School Board, which is composed of five elected
              members. The appointed Superintendent of Schools is the executive officer of the School Board.
              Geographic boundaries of the District correspond with those of Osceola County.
              Criteria for determining if other entities are potential component units which should be reported
              within the District's basic financial statements are identified and described in the Governmental
              Accounting Standards Board's (GASB) Codification of Governmental Accounting and Financial Reporting
              Standards, Sections 2100 and 2600. The application of these criteria provides for identification of any
              entities for which the District School Board is financially accountable and other organizations for
              which the nature and significance of their relationship with the School Board are such that exclusion
              would cause the District's basic financial statements to be misleading or incomplete. Based on the
              application of these criteria, the following component units are included within the District School
              Board's reporting entity:
              •   Blended Component Unit. The District’s employee group health and life insurance program,
                  described in Note 21, is administered through the Osceola County District School Board Group
                  Health and Life Insurance Trust. Assets necessary to fund the program are transferred to the
                  Trust; however, under the terms of the Trust agreement, the District retains control of the assets.
                  Therefore, the financial activities of the Trust are reported in the District’s financial statements.

              •   Discretely Presented Component Units. The component units’ columns in the basic financial
                  statements, Exhibits A and B, include the financial data of the District's other component units
                  as follows:
                  The Foundation for Osceola Education, Inc., is a separate not-for-profit corporation organized
                  and operated as a direct-support organization under Section 1001.453, Florida Statutes, to
                  provide charitable and educational aid to the School Board, to promote education, and to
                  encourage research, learning, and dissemination of information. An annual audit of the
                  organization’s financial statements is conducted by an independent certified public accountant
                  and is filed in the District’s administrative office.
                  The Bellalago Educational Facilities Benefit District (Bellalago Benefit District) is a separate
                  district organized pursuant to Chapter 125, Florida Statutes, and Section 1013.355, Florida
                  Statutes, to provide for the timely construction and maintenance of school facilities. The
                  Bellalago Benefit District is an alternate mechanism that allows for the sharing of educational
                  facilities costs that are necessary to accommodate new growth and development. Thus, the
                  nature and significance of their relationship with the District are such that exclusion would cause
                  the reporting entity’s financial statements to be misleading or incomplete. An audit of the
                  Bellalago Benefit District’s annual financial statements is conducted by an independent certified
                  public accountant and is filed in the District’s administrative office.




                                                        33
                            OSCEOLA COUNTY
                        DISTRICT SCHOOL BOARD
                     NOTES TO FINANCIAL STATEMENTS
                                June 30, 2009


       The Flora Ridge Education Facilities Benefit District (Flora Ridge Benefit District), was also
       organized pursuant to Chapter 125, Florida Statues, to provide for timely construction and
       maintenance of school facilities. The Flora Ridge Benefit District is an alternate mechanism that
       allows for the sharing of educational facilities costs that are necessary to accommodate new
       growth and development. An audit of the Flora Ridge Benefit District’s annual financial
       statements is conducted by an independent certified public accountant and is filed in the
       District’s administrative office. The Benefit Districts have imposed a specific financial burden
       on the Osceola County School District and are considered fiscally dependant in accordance with
       the criteria described in Governmental Accounting Standards Board Statement No. 14, The
       Financial Reporting Entity. A member of the Osceola County School District has been appointed
       to the board of each Benefit District.
       The New Dimensions High School, Inc., and the Four Corners Charter School, Inc., are separate
       not-for-profit corporations organized pursuant to Chapter 617, Florida Statutes, the Florida Not
       for Profit Corporation Act; and Section 1002.33, Florida Statutes, to enhance the education of
       those Osceola County students attending these schools. The charter schools operate under a
       charter approved by their sponsor, the Osceola County District School Board. Audits of the
       charter schools’ financial statements are conducted by independent certified public accountants
       and are filed in the District’s administrative office.
 Basis of Presentation
   Government-wide Financial Statements - Government-wide financial statements, including the
   statement of net assets and the statement of activities, present information about the School District
   as a whole. These statements include the non-fiduciary financial activity of the primary government
   and its component units.
   Government-wide financial statements are prepared using the economic resources measurement
   focus. The statement of activities presents a comparison between direct expenses and program
   revenues for each function or program of the District’s governmental activities. Direct expenses are
   those that are specifically associated with a service, program, or department and are thereby clearly
   identifiable to a particular function. Depreciation expense associated with the District’s
   transportation department is allocated to the transportation function, while remaining depreciation
   expenses are not readily associated with a particular function and are reported as unallocated.
   Program revenues include charges paid by the recipient of the goods or services offered by the
   program, and grants and contributions that are restricted to meeting the operational or capital
   requirements of a particular program. Revenues that are not classified as program revenues are
   presented as general revenues. The comparison of direct expenses with program revenues identifies
   the extent to which each governmental function is self-financing or draws from the general revenues
   of the District.
   The effects of inter-fund activity have been eliminated from the government-wide financial
   statements. Interfund services provided and used are not eliminated in the process of consolidation.
   Fund Financial Statements - Fund financial statements report detailed information about the District
   in the governmental, proprietary, and fiduciary funds. The focus of governmental fund financial
   statements is on major funds rather than reporting funds by type. Each major fund is reported in a
   separate column. Nonmajor funds are aggregated and reported in a single column. Because the
   focus of governmental fund financial statements differs from the focus of government-wide financial
   statements, a reconciliation is presented with each of the governmental fund financial statements.



                                            34
                             OSCEOLA COUNTY
                         DISTRICT SCHOOL BOARD
                      NOTES TO FINANCIAL STATEMENTS
                                 June 30, 2009


   The District reports the following major governmental funds:
   •   General Fund – to account for all financial resources not required to be accounted for in another
       fund, and for certain revenues from the State that are legally restricted to be expended for
       specific current operating purposes.

   •   Federal Programs – Other Funds – to account for funds from the State or Federal Government
       which are restricted for Federal programs.

   •   Federal Programs – ARRA Economic Stimulus Funds - to account for funds awarded under the
       American Recovery and Reinvestment Act (ARRA).

   •   Capital Projects – Capital Improvement Funds – to account for funds from the State which are
       restricted for capital improvement.

   •   Capital Projects – Other Fund – to account for other miscellaneous funds from various sources
       which are restricted for capital outlay purposes.
   Additionally, the District reports the following proprietary and fiduciary fund types:
   •   Internal Service Funds – to account for the District's individual self-insurance programs.

   •   Agency Funds – to account for resources of the school internal funds which are used to
       administer moneys collected at the several schools in connection with school, student athletic,
       class, and club activities, and to account for the various resources of the Educational Facilities
       Benefit Districts accounted for by the District.
 Basis of Accounting
   Basis of accounting refers to when revenues and expenditures, or expenses, are recognized in the
   accounts and reported in the financial statements. Basis of accounting relates to the timing of the
   measurements made, regardless of the measurement focus applied.
   The government-wide financial statements are prepared using the accrual basis of accounting, as are
   the proprietary funds and fiduciary funds financial statements. Revenues are recognized when earned
   and expenses are recognized when a liability is incurred, regardless of the timing of the related cash
   flows. Property taxes are recognized in the year for which they are levied. Revenues from grants,
   entitlements, and donations are recognized in the fiscal year in which all eligibility requirements
   imposed by the provider have been satisfied.
   Governmental fund financial statements are prepared using the modified accrual basis of accounting.
   Revenues, except for certain grant revenues, are recognized when they become measurable and
   available. Revenues are considered to be available when they are collectible within the current period
   or soon enough thereafter to pay liabilities of the current period. The District considers revenues to
   be available if they are collected within 60 days of the end of the current fiscal year. When grant
   terms provide that the expenditure of resources is the prime factor for determining eligibility for
   Federal, State, and other grant resources, revenue is recognized at the time the expenditure is made.
   Under the modified accrual basis of accounting, expenditures are generally recognized when the
   related fund liability is incurred, except for principal and interest on long-term debt, claims and
   judgments, and compensated absences, which are recognized when due. Allocations of cost, such as
   depreciation, are not recognized in governmental funds.



                                             35
                             OSCEOLA COUNTY
                         DISTRICT SCHOOL BOARD
                      NOTES TO FINANCIAL STATEMENTS
                                 June 30, 2009


   The Proprietary Funds are accounted for as proprietary activities under standards issued by the
   Financial Accounting Standards Board through November 1989 and applicable standards issued by
   the Governmental Accounting Standards Board. Proprietary funds distinguish operating revenues
   and expenses from nonoperating items. Operating revenues and expenses generally result from
   providing services and producing and delivering goods in connection with the proprietary funds’
   principal ongoing operations. The principal operating revenues of the District’s internal service
   funds are charges for employee health insurance premiums and general and automobile liability
   insurance premiums. Operating expenses include insurance claims and excess coverage premiums.
   All revenues and expenses not meeting this definition are reported as non-operating revenues and
   expenses.
   When both restricted and unrestricted resources are available for use, it is the District’s policy to use
   restricted resources first, then unrestricted resources as they are needed.
   The charter schools, the Foundation for Osceola Education, Inc., and the Benefit Districts, are
   accounted for as governmental organizations and follow the same accounting model as the District’s
   governmental activities.
 Deposits and Investments
   Cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term
   investments with original maturities of three months or less from the date of acquisition.
   Cash deposits are held by banks qualified as public depositories under Florida law. All deposits are
   insured by Federal depository insurance, and except for funds held in connection with an escrow
   account, are collateralized with securities held in Florida's multiple financial institution collateral pool
   as required by Chapter 280, Florida Statutes.
   Investments consist of amounts placed in State Board of Administration Debt Service accounts for
   investment of debt service moneys, amounts placed with the State Board of Administration for
   participation in the Local Government Surplus Funds Trust Fund investment pool created by
   Section 218.405, Florida Statutes, and those made locally. This investment pool operates under
   investment guidelines established by Section 215.47, Florida Statutes. The District’s investments in
   the Local Government Surplus Funds Trust Fund, a Securities and Exchange Commission Rule
   2a7-like external investment pool, are reported at fair value, which is amortized cost.
   Investments made locally consist of money market funds and are reported at fair value. Types and
   amounts of investments held at fiscal year-end are described in a subsequent note on investments.
 Inventories
   Inventories consist of expendable supplies held for consumption in the course of District operations.
   Inventories held at the maintenance department, central warehouse and for the District’s food
   service program are stated at cost valued on a weighted-average basis, except that United States
   Department of Agriculture surplus commodities are stated at their fair value as determined at the
   time of donation to the District's food service program by the Florida Department of Agriculture
   and Consumer Services, Bureau of Food Distribution. Transportation inventories are stated at cost
   based on last invoice, which approximates the first-in, first-out basis. The costs of inventories are
   recorded as expenditures when used rather than purchased.




                                              36
                             OSCEOLA COUNTY
                         DISTRICT SCHOOL BOARD
                      NOTES TO FINANCIAL STATEMENTS
                                 June 30, 2009


 Capital Assets
   Expenditures for capital assets acquired or constructed for general District purposes are reported in
   the governmental fund that financed the acquisition or construction. The capital assets so acquired
   are reported at cost in the government-wide statement of net assets but are not reported in the
   governmental fund financial statements. Capital assets are defined by the District as those costing
   more than $1,000 for tangible personal property and $25,000 for real property. Such assets are
   recorded at historical cost or estimated historical cost if purchased or constructed. Donated assets
   are recorded at fair value at the date of donation.
   Capital assets are depreciated using the straight-line method over the following estimated useful lives:

            Description                                                               Estimated Lives

            Improvements Other than Buildings                                              8 - 40 years

            Buildings, Fixed Equipment, and Educational Facilities Benefit District       10 - 50 years

            Furniture, Fixtures, and Equipment                                             3 - 15 years

            Motor Vehicles                                                                 5 - 10 years

            Audio Visual Materials and Computer Software                                    3 - 5 years


   Current-year information relative to changes in capital assets is described in a subsequent note.
 Long-Term Liabilities
   Long-term obligations that will be financed from resources to be received in the future by
   governmental funds are reported as liabilities in the government-wide statement of net assets. Bond
   premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the
   bonds using the effective interest method. Bonds payable are reported net of the applicable bond
   premium or discount.
   In the governmental fund financial statements, bonds and other long-term obligations are not
   recognized as liabilities until due. Governmental fund types recognize bond premiums and
   discounts, as well as bond issuance costs, during the current period. The face amount of debt issued
   is reported as other financing sources, while discounts on debt issuances are reported as other
   financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
   reported as debt service expenditures.
   In the government-wide financial statements, compensated absences (i.e., paid absences for employee
   vacation leave and sick leave) are accrued as liabilities to the extent that it is probable that the
   benefits will result in termination payments. A liability is reported in the governmental fund financial
   statements only for the current portion of compensated absences expected to be paid using
   expendable available resources.
   Changes in long-term liabilities for the current year are reported in a subsequent note.




                                                  37
                             OSCEOLA COUNTY
                         DISTRICT SCHOOL BOARD
                      NOTES TO FINANCIAL STATEMENTS
                                 June 30, 2009


 State Revenue Sources
   Revenues from State sources for current operations are primarily from the Florida Education
   Finance Program administered by the Florida Department of Education (Department) under the
   provisions of Section 1011.62, Florida Statutes. In accordance with this law, the District determines
   and reports the number of full-time equivalent (FTE) students and related data to the Department.
   The Department performs certain edit checks on the reported number of FTE and related data, and
   calculates the allocation of funds to the District. The District is permitted to amend its original
   reporting for a period of nine months following the date of the original reporting. Such amendments
   may impact funding allocations for subsequent years. The Department may also adjust subsequent
   fiscal period allocations based upon an audit of the District's compliance in determining and
   reporting FTE and related data. Normally, such adjustments are treated as reductions or additions of
   revenue in the year when the adjustments are made.
   The State provides financial assistance to administer certain categorical educational programs. State
   Board of Education rules require that revenue earmarked for certain programs be expended only for
   the program for which the money is provided, and require that the money not expended as of the
   close of the fiscal year be carried forward into the following year to be expended for the same
   categorical educational programs. The Department generally requires that categorical educational
   program revenues be accounted for in the General Fund. A portion of the fund balance of the
   General Fund is reserved in the governmental fund financial statements for the unencumbered
   balance of categorical educational program resources.
   The State allocates gross receipts taxes, generally known as Public Education Capital Outlay money,
   to the District on an annual basis. The District also received an allocation under the Classrooms for
   Kids and Class Size Reduction Construction Programs. The District is authorized to expend these
   funds only upon applying for and receiving an encumbrance authorization from the Department.
   Accordingly, the District recognizes the allocation of Public Education Capital Outlay, Classrooms
   for Kids, and Class Size Reduction Construction Program funds as deferred revenue until such time
   as an encumbrance authorization is received.
   A schedule of revenue from State sources for the current year is presented in a subsequent note.
 District Property Taxes
   The School Board is authorized by State law to levy property taxes for district school operations,
   capital improvements, and debt service.
   Property taxes consist of ad valorem taxes on real and personal property within the District.
   Property values are determined by the Osceola County Property Appraiser, and property taxes are
   collected by the Osceola County Tax Collector.
   The School Board adopted the 2008 tax levy on September 9, 2008. Taxes become an enforceable
   lien on property as of January 1; tax bills are mailed in October and taxes are payable between
   November 1 of the year assessed and March 31 of the following year at discounts of up to 4 percent
   for early payment.
   Taxes become delinquent on April 1 of the year following the year of assessment. State law provides
   for enforcement of collection of personal property taxes by seizure of the property to satisfy unpaid
   taxes, and for enforcement of collection of real property taxes by the sale of interest-bearing tax
   certificates to satisfy unpaid taxes. The procedures result in the collection of essentially all taxes prior
   to June 30 of the year following the year of assessment.



                                              38
                                      OSCEOLA COUNTY
                                  DISTRICT SCHOOL BOARD
                               NOTES TO FINANCIAL STATEMENTS
                                          June 30, 2009


            Property tax revenues are recognized in the government-wide financial statements when the Board
            adopts the tax levy. Property tax revenues are recognized in the governmental fund financial
            statements when taxes are received by the District, except that revenue is accrued for taxes collected
            by the Osceola County Tax Collector at fiscal year-end but not yet remitted to the District.
            Millages and taxes levied for the current year are presented in a subsequent note.
         Educational Impact Fees
            Osceola County imposes an educational impact fee based on an ordinance adopted by the County
            Commission in 1992. This ordinance has been amended from time to time, most recently in
            December 2003, when Ordinance No. 03-42 established the revised rates to be collected. The
            educational impact fee is collected for all new residential construction within the County. The fees
            are collected by the County and each municipality within the County based on an interlocal
            agreement. The fees can only be used for capital expenditures directly affected by new residential
            growth. Educational impact fee revenues are recognized similar to that for property taxes, but are
            reported as program revenue in the government-wide financial statements.
         Federal Revenue Sources
            The District receives Federal awards for the enhancement of various educational programs. Federal
            awards are generally received based on applications submitted to, and approved by, various granting
            agencies. For Federal awards in which a claim to these grant proceeds is based on incurring eligible
            expenditures, revenue is recognized to the extent that eligible expenditures have been incurred.


2.   BUDGETARY COMPLIANCE AND ACCOUNTABILITY

     The Board follows procedures established by State statutes and State Board of Education rules in
     establishing budget balances for governmental funds, as described below:

         Budgets are prepared, public hearings are held, and original budgets are adopted annually for all
          governmental fund types in accordance with procedures and time intervals prescribed by law and
          State Board of Education rules.
         Appropriations are controlled at the object level (e.g., salaries, purchased services, and capital outlay)
          within each activity (e.g., instruction, pupil personnel services, and school administration) and may be
          amended by resolution at any School Board meeting prior to the due date for the annual financial
          report.
         Budgets are prepared using the same modified accrual basis as is used to account for governmental
          funds.
         Budgetary information is integrated into the accounting system and, to facilitate budget control,
          budget balances are encumbered when purchase orders are issued. Appropriations lapse at fiscal
          year-end and encumbrances outstanding are honored from the subsequent year's appropriations.




                                                      39
                                      OSCEOLA COUNTY
                                  DISTRICT SCHOOL BOARD
                               NOTES TO FINANCIAL STATEMENTS
                                          June 30, 2009


3.   INVESTMENTS

     As of June 30, 2009, the District has the following investments and maturities:


                               Investment                                Maturities          Fair Value

          State Board of Administration Local Government
           Surplus Funds Trust Fund Investment Pool                   46 Day Average     $     150,073,653
           Surplus Funds Trust Fund Investment Pool-Fund B           6.87 Year Average           1,186,605
          State Board of Administration
           Debt Service Accounts                                         6 Months                  362,580
          Certificate of Deposit                                        12 Months               20,000,000
          First American Money Market Fund                            90 Day Average               950,387

          Total Investments, Primary Government                                          $     172,573,225



     Interest Rate Risk

         Section 218.415(17), Florida Statutes, limits investment maturities to provide sufficient liquidity to
          pay obligations as they come due. The District’s investment policy limits investments to a maximum
          of five years and the investment of current operating funds to no longer than two years.
         The District’s investment policy authorizes investing in certificates of deposit, time deposits,
          securities of the United States Government, and other forms of authorized investments described in
          the Florida Statutes.
     Credit Risk

         Section 218.415(17), Florida Statutes, provides the authority to invest in the State Board of
          Administration Local Government Surplus Funds Trust Fund Investment Pool and limits
          investments in money market funds to Securities and Exchange Commission (SEC) registered money
          market funds with the highest credit quality rating from a nationally recognized rating agency, and
          investments in interest-bearing time deposits to qualified public depositories, as defined in Section
          280.02, Florida Statutes. The District’s investment policy allows for investments in money market
          funds that are rated “AAAf”, “AAm” or “AAm-G” or better by Standard & Poor’s, or the equivalent
          by another rating agency.
         The District’s investments in the State Board of Administration Debt Service Accounts are to
          provide for debt service payments on bond debt issued by the State Board of Education for the
          benefit of the District. The District relies on policies developed by the State Board of
          Administration for managing credit risk for this account.




                                                      40
                                      OSCEOLA COUNTY
                                  DISTRICT SCHOOL BOARD
                               NOTES TO FINANCIAL STATEMENTS
                                          June 30, 2009


         As of June 30, 2009, the District’s investment in the First American Funds Money Market Fund is
          rated “AAAm” by Standard and Poor’s.
         As of June 30, 2009, the District’s investment in the Local Government Surplus Funds Trust Fund
          investment pool is rated “AAAm” by Standard and Poor’s. Fund B is not rated by a nationally
          recognized rating agency.
     Concentration of Credit Risk

         The District’s investment policy limits the amounts the District may invest in any one issuer. This
          policy is in effect for funds related to the issuance of debt where there are other existing policies or
          indentures in effect for such funds. Over 88% of the District’s total investments are held in the
          State Board of Administration Local Government Surplus Funds Trust Fund Investment Pool.

4.   RECEIVABLES

     The majority of receivables are due from other agencies. These receivables and the remaining accounts
     receivable are considered to be fully collectible. As such, no allowance for uncollectible accounts receivable
     is accrued.




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                                                      41
                                           OSCEOLA COUNTY
                                       DISTRICT SCHOOL BOARD
                                    NOTES TO FINANCIAL STATEMENTS
                                               June 30, 2009


5.   CHANGES IN CAPITAL ASSETS

     Changes in capital assets are presented in the table below.

                                                       Balance                                              Balance
                                                      6/30/2008         Additions       Deletions          6/30/2009
     GOVERNMENTAL ACTIVITIES
     Capital Assets Not Being Depreciated:
      Land & Improvements                             $ 42,889,487    $    4,872,213   $            -     $ 47,761,700
      Construction in Progress                          32,018,195        92,957,742       38,696,244        86,279,693
        Total Capital Assets Not Being Depreciated      74,907,682        97,829,955       38,696,244       134,041,393
     Capital Assets Being Depreciated:
      Improvements Other Than Buildings                  26,642,014        2,485,590           28,332        29,099,272
      Buildings and Fixed Equipment                     640,720,451       36,210,653                -       676,931,104
      Furniture, Fixtures, and Equipment                 57,540,269        5,826,237       11,828,340        51,538,166
      Investment in Educational Facilities Benefit
         District                                         8,255,001                -                -        8,255,001
      Motor Vehicles                                     33,584,596        4,939,579        1,566,147       36,958,028
      Audio-Visual Materials                                 66,083           10,089           19,223           56,949
      Computer Software                                   6,308,749          529,552          368,736        6,469,565
        Total Capital Assets Being Depreciated          773,117,163       50,001,700       13,810,778       809,308,085
     Less Accumulated Depreciation for:
      Improvements Other Than Buildings                  11,815,202        1,537,462                -        13,352,664
      Buildings and Fixed Equipment                     153,992,975       19,821,670                -       173,814,645
      Furniture, Fixtures, and Equipment                 37,764,631        6,789,191        9,478,851        35,074,971
      Investment in Educational Facilities Benefit
         District                                         1,182,968         348,755               -           1,531,723
      Motor Vehicles                                     15,373,459       3,160,450       1,552,341          16,981,568
      Audio-Visual Materials                                 57,870           2,354          18,586              41,638
      Computer Software                                   5,377,571         449,674         350,366           5,476,879
        Total Accumulated Depreciation                  225,564,676      32,109,556      11,400,144         246,274,088
        Total Capital Assets Being Depreciated, Net     547,552,487      17,892,144       2,410,634         563,033,997
     Governmental Activities Capital Assets, Net      $ 622,460,169   $ 115,722,099    $ 41,106,878       $ 697,075,390


     Depreciation expense was charged to functions as follows:

       Function                                                                              Amount
       GOVERNMENTAL ACTIVITIES
       Pupil Transportation Services                                                   $             3,277,054
       Unallocated                                                                                  28,832,502

       Total Depreciation Expense - Governmental Activities                            $            32,109,556




                                                         42
                                        OSCEOLA COUNTY
                                    DISTRICT SCHOOL BOARD
                                 NOTES TO FINANCIAL STATEMENTS
                                            June 30, 2009


6.   INSTALLMENT-PURCHASES PAYABLE

     The classes and amounts of property being acquired under installment-purchase agreements are as follows:

                                                                                   Asset Balance

                       School Buses                                            $        4,630,681
                       Copy Machines                                                      397,828
                       Instructional Software                                             112,754
                       Maintenance Trucks                                                 168,916
                       Capitalized Property Under Installment-Purchases                 5,310,179
                       Districtwide Energy Contract                                     2,371,566
                       Total                                                   $        7,681,745



     Future minimum installment-purchase payments and the present value of the minimum installment-purchase
     payments as of June 30 are as follows:

                                              Installment-Purchases Payable
              Fiscal Year Ending June 30                   Total            Principal                  Interest

                         2010                        $        1,196,940   $    1,100,412           $       96,528
                         2011                                   839,822          784,372                   55,450
                         2012                                   352,975          326,056                   26,919
                         2013                                   261,975          250,366                   11,609
                         2014                                    94,677           93,280                    1,397
                         Total                       $        2,746,389   $    2,554,486           $      191,903



     The stated and imputed interest rates range from 3.96 to 4.841 percent.




                                                         43
                                       OSCEOLA COUNTY
                                   DISTRICT SCHOOL BOARD
                                NOTES TO FINANCIAL STATEMENTS
                                           June 30, 2009


7.   NOTES PAYABLE

     Notes payable are comprised of the following:

                                                                                                   Balance at
     School District of Indian River County, Florida                                               6/30/2009


     Pursuant to Section 1013.68(6), Florida Statutes, the Board entered into an inter-
     local agreement in which the Board received $9,308,048 in Classrooms First funds
     allocated to Indian River County District School Board by the State of Florida. In
     return, the Board agreed to pay Indian River County District School Board the
     Classrooms First funds it would have otherwise received from the State. The
     effective interest rate on the loan is 5.776 percent. Proceeds were used as capital
     funding for new school construction. The Board's intent is to repay the loan and
     related interest in 15 annual installments of $897,039 through August 1, 2016.            $     5,620,077

     School District of Collier County, Florida


     Pursuant to Section 1013.68(6), Florida Statutes, the Board entered into an inter-
     local agreement in which the Board received $29,176,952 in Classrooms First funds
     allocated to Collier County District School Board by the State of Florida. In return,
     the Board agreed to pay Collier County District School Board the Classrooms First
     Funds it would have otherwise received from the State. The effective interest rate
     on the loan is 5.26 percent. Proceeds were used as capital funding for new school
     construction. The Board's intent is to repay the loan and related interest in 105
     installments of $401,693, seven per year, through May 31, 2017.                             18,216,766
     Total Notes Payable                                                                       $ 23,836,843

     Amounts payable for the planned extended repayment of the Section 1013.68, Florida Statutes, interlocal
     agreements are as follows:

                 Fiscal Year
                Ending June 30               Total              Principal           Interest
                      2010              $      3,708,892    $     2,462,434     $     1,246,458
                      2011                     3,708,892          2,594,913           1,113,979
                      2012                     3,708,892          2,734,531             974,361
                      2013                     3,708,892          2,881,673             827,219
                      2014                     3,708,892          3,036,746             672,146
                    2015-2017                 11,126,676         10,126,546           1,000,130
                      Total             $     29,671,136    $    23,836,843     $     5,834,293




                                                       44
                                         OSCEOLA COUNTY
                                     DISTRICT SCHOOL BOARD
                                  NOTES TO FINANCIAL STATEMENTS
                                             June 30, 2009


8.   EDUCATIONAL FACILITIES BENEFIT DISTRICT AGREEMENT PAYABLE

     Pursuant to Section 1013.355, Florida Statutes, the District entered into an interlocal agreement with
     Osceola County, Florida, dated September 15, 2003, authorizing the creation of the Bellalago Educational
     Facilities Benefit District (Benefit District).   The purpose of the Benefit District is to finance the
     construction of school facilities using a combination of sources, including impact fees, non-ad valorem
     assessments from homeowners, charter capital, and payments from the District. The District also entered
     into a charter contract on April 6, 2004, with the Foundation for Osceola Education, Inc. (Foundation),
     creating Bellalago Charter School. The Foundation entered into an interlocal agreement with the Benefit
     District under which it agreed to pay to the Benefit District any charter capital received in exchange for use
     of the school facilities. On December 16, 2003, the District entered into an interlocal funding agreement
     with the Benefit District and Avatar Properties, Inc., to formalize the obligations of the parties. Under the
     terms of this agreement, the District is obligated to pay the portion of debt service on bonds issued by the
     Benefit District not otherwise funded by impact fees, non-ad valorem assessments, and charter capital.
     Phase I of the construction was funded through bonds issued by the Benefit District at a rate of 6.05
     percent. Phase II of the construction was funded by issuing a second series of bonds by the Benefit District
     at a rate of 5.83 percent.

     Estimated amounts payable for the Benefit District agreement are as follows:

                           Fiscal Year
                         Ending June 30            Total            Principal           Interest
                      2010                   $         15,476   $       (380,955)   $       396,431
                      2011                            217,768           (195,209)           412,977
                      2012                            790,529            369,084            421,445
                      2013                            777,960            372,526            405,434
                      2014                            763,427            374,153            389,274
                      2015-2019                     3,660,664         1,963,481           1,697,183
                      2020-2024                     3,349,466         2,089,611           1,259,855
                      2025-2029                     3,004,107         2,207,564             796,543
                      2030-2034                     2,631,828         2,324,404             307,424
                      2035                             15,000             14,376                624
                      Total                  $     15,226,225   $     9,139,035     $    6,087,190


     The amounts that may be required from the District in the future are dependent on the amount of charter
     capital received which is dependent on enrollment at the school and the level of funding appropriated
     annually by the Legislature.




                                                       45
                                              OSCEOLA COUNTY
                                          DISTRICT SCHOOL BOARD
                                       NOTES TO FINANCIAL STATEMENTS
                                                  June 30, 2009


9.   CERTIFICATES OF PARTICIPATION

     Certificates of Participation at June 30, 2009, are as follows:

     Series                                              Amount                 Interest      Lease Term       Original
                                                        Outstanding               Rate         Maturity        Amount

     1999 COPS (Partially Refunded)                 $         34,415,000         4.2 - 5.0      2024       $     47,365,000
     2000 COPS (Partially Refunded)                              965,000      5.100 - 5.375     2011             17,080,000
     2002 COPS (Partially Refunded)                            1,295,000         4.0 - 4.5      2012             59,730,000
     2004 COPS, Series A                                      56,445,000         2.5 - 5.0      2028             63,245,000
     2004 COPS, Series B and C, Refunding                     14,445,000         2.5 - 5.0      2019             18,850,000
     2005 COPS Refunding                                      11,730,000         2.8 - 4.5      2025             12,095,000
     2007 COPS, Series A and B Refunding                      62,390,000         3.6 - 4.5      2027             62,755,000

     Total                                                   181,685,000
     Plus Unamortized Premium                                  1,180,563
     Less: Deferred Amount on Refunding Debt                  (5,637,284)

     Total Certificates of Participation            $        177,228,279



     The District entered into a master financing arrangement on April 1, 1992, which arrangement was
     characterized as a lease-purchase agreement, with the Florida School Board Association, Inc., whereby the
     District secured financing of various educational facilities. The financings were accomplished through the
     issuance of Certificates of Participation to be repaid from the proceeds of rents paid by the District.

     As a condition of the financing arrangement, the District has given ground leases on District properties to
     the Florida School Board Association, Inc., with a rental fee of $1 per year. The properties covered by the
     ground leases are, together with the improvements constructed thereon from the financing proceeds, leased
     back to the District. If the District fails to renew the leases and to provide for the rent payments through to
     term, the District may be required to surrender the sites included under the various Ground Lease
     Agreements for the benefit of the securers of the Certificates for a period of time specified by the
     arrangement as follows:

                                  Certificates                              Lease Term

                         Series 1999                Earlier of date paid in full or June 30, 2024
                         Series 2000                Earlier of date paid in full or June 30, 2024
                         Series 2002                Earlier of date paid in full or May 31, 2032
                         Series 2004A               Earlier of date paid in full or June 30, 2028
                         Series 2004 B and C        Earlier of date paid in full or June 30, 2019
                         Series 2005                Earlier of date paid in full or June 30, 2034
                         Series 2007                Earlier of date paid in full or June 30, 2027




                                                        46
                                       OSCEOLA COUNTY
                                   DISTRICT SCHOOL BOARD
                                NOTES TO FINANCIAL STATEMENTS
                                           June 30, 2009


The District properties included in the ground leases under this arrangement include the following:

                 Certificates                                Description of Properties

   Series 1999                          Horizon Middle School, Osceola High School Labs, Poinciana
                                        High School (correct defects/deficiencies to original
                                        construction), and Kissimmee Elementary School
   Series 2000 and 2005, Refunding      Four Corners Charter School

   Series 2002 and 2007, Refunding      Celebration High School and the Osceola County School for the
                                        Arts
   Series 2004A, B, and C, Refunding    Poinciana High School (correct defects/deficiencies to original
                                        construction), Kissimmee Elementary School, Liberty High
                                        School, and Chestnut Elementary School

The lease payments are payable by the District, semiannually, on June 1 and December 1 for Series 1999,
2002, 2004, and 2007, and February 1 and August 1 for Series 2000 and 2005. The following is a schedule by
years of future minimum lease payments under the lease agreements together with the present value of
minimum lease payments as of June 30:

      Fiscal Year Ending June 30                     Total                Principal               Interest

2010                                        $         14,578,895     $       6,465,000      $       8,113,895
2011                                                  14,580,698             6,725,000              7,855,698
2012                                                  14,581,165             6,990,000              7,591,165
2013                                                  14,573,018             7,260,000              7,313,018
2014                                                  14,576,766             7,555,000              7,021,766
2015-2019                                             72,874,784            43,110,000             29,764,784
2020-2024                                             72,850,050            54,185,000             18,665,050
2025-2028                                             55,023,525            49,395,000              5,628,525

Total Minimum Lease Payments                $        273,638,901     $     181,685,000      $      91,953,901

Plus: Unamortized Premium                                                     1,180,563
Less: Deferred Amount on Refunding Debt                                      (5,637,284)

Total Certificates of Participation                                  $     177,228,279




                                                47
                                          OSCEOLA COUNTY
                                      DISTRICT SCHOOL BOARD
                                   NOTES TO FINANCIAL STATEMENTS
                                              June 30, 2009


10.   BONDS PAYABLE

      Bonds payable at June 30, 2009, are as follows:

                                                                           Interest        Annual
                                                         Amount             Rates          Maturity       Original
                       Bond Type                        Outstanding       (Percent)          To           Amount
      State School Bonds:
       Series 1999A                                 $         925,000     4.125 - 4.75      2019            1,400,000
       Series 2000A                                            25,000       5.0 - 6.0       2010              110,000
       Series 2001A                                         1,020,000      4.25 - 5.0       2021            1,775,000
       Series 2002A                                           665,000    3.875 - 5.000      2022              935,000
       Series 2003A                                         1,590,000     3.00 - 4.25       2023            1,985,000
       Series 2004A                                         1,305,000     3.35 - 4.625      2024            1,595,000
       Series 2005A                                         1,470,000       4.0 - 5.0       2025            1,685,000
       Series 2005A, Refunding                              4,340,000          5.0          2017            5,160,000
       Series 2005B, Refunfing                              1,595,000          5.0          2020            1,715,000
       Series 2006A                                         1,665,000     4.0 - 4.625       2026            1,810,000
      District Revenue Bonds:
       Sales Tax Revenue Series 2001                        3,290,000      4.4 - 4.5        2011            7,730,000
       Sales Tax Revenue Series 2007A                      44,230,000      3.5 - 5.0        2025           47,580,000
       Sales Tax Revenue Series 2007B                      32,020,000      3.5 - 5.0        2024           32,255,000
      Total Bonds                                   $      94,140,000
        Plus: unamortized bond premium                      4,086,653
        Less: deferred amount on refunding                 (2,254,966)
       Total Bonds Payable                          $      95,971,687


      The various bonds were issued to finance capital outlay projects of the District. The following is a
      description of the bonded debt issues:

           State School Bonds
               These bonds are issued by the State Board of Education on behalf of the District. The bonds mature
               serially, and are secured by a pledge of the District's portion of the State-assessed motor vehicle
               license tax. The State's full faith and credit is also pledged as security for these bonds. Principal and
               interest payments, investment of Debt Service Fund resources, and compliance with reserve
               requirements are administered by the State Board of Education and the State Board of
               Administration.
           District Revenue Bonds
               The School Board issued Sales Tax Revenue Bonds, Series 2001, in the amount of $42,325,000 on
               May 1, 2001. These bonds are authorized by Chapter 1001, Florida Statutes, and Chapter 212, Part I,
               Florida Statutes. A resolution providing for the issuance of the bonds was adopted by the School
               Board on April 24, 2001. Proceeds of the discretionary local government infrastructure sales tax
               surtax received by the District pursuant to an interlocal agreement between Osceola County, the
               cities of Kissimmee and St. Cloud, and the District are pledged for the payment of bonds. Proceeds
               of the bonds were used to finance construction of new school facilities and renovations of existing
               school facilities.s

                                                          48
                                     OSCEOLA COUNTY
                                 DISTRICT SCHOOL BOARD
                              NOTES TO FINANCIAL STATEMENTS
                                         June 30, 2009


       The School Board issued Sales Tax Revenue Bonds, Series 2007A and 2007B on April 12, 2007,
       totaling $47,580,000 and $32,255,000, respectively. These bonds are authorized by Chapter 1001,
       Florida Statutes and Chapter 212, Part I, Florida Statutes. A resolution providing for the issuance of
       the bonds was adopted by the School Board on March 20, 2007. Proceeds of the discretionary local
       government infrastructure sales tax surtax received by the District pursuant to an interlocal
       agreement between Osceola County, the cities of Kissimmee and St. Cloud, and the District are
       pledged for the payment of bonds. Proceeds of the 2007A bonds were used to finance the
       acquisition, construction, reconstruction, renovation, and equipping of certain capital improvements
       and educational facilities within the School District. Proceeds of the 2007B bonds were used to
       advance-refund a portion of the School District’s outstanding Sales Tax Revenue Bonds, Series 2001.
Annual requirements to amortize all bonded debt outstanding as of June 30, 2009, are as follows:

        Fiscal Year Ending June 30               Total                Principal            Interest

        State School Bonds:
        2010                              $           1,722,710   $        1,050,000   $        672,710
        2011                                          1,724,804            1,100,000            624,804
        2012                                          1,719,464            1,145,000            574,464
        2013                                          1,716,561            1,195,000            521,561
        2014                                          1,715,796            1,250,000            465,796
        2015-2019                                     7,014,814            5,595,000          1,419,814
        2020-2024                                     3,264,253            2,815,000            449,253
        2025-2026                                       478,206              450,000             28,206
        Total State School Bonds                     19,356,608           14,600,000          4,756,608

        District Revenue Bonds:
        2010                                          7,234,783           3,510,000           3,724,783
        2011                                          7,232,443           3,645,000           3,587,443
        2012                                          7,231,103           3,790,000           3,441,103
        2013                                          7,229,878           3,950,000           3,279,878
        2014                                          7,234,678           4,125,000           3,109,678
        2015-2019                                    36,161,238          23,750,000          12,411,238
        2020-2024                                    36,157,225          29,880,000           6,277,225
        2025-2026                                     7,234,500           6,890,000             344,500
        Total District Revenue Bonds             115,715,848             79,540,000          36,175,848
        Total                             $      135,072,456      $      94,140,000    $     40,932,456




                                                49
                                                 OSCEOLA COUNTY
                                             DISTRICT SCHOOL BOARD
                                          NOTES TO FINANCIAL STATEMENTS
                                                     June 30, 2009


    11.     DEFEASED DEBT

            In prior years, portions of the Certificates of Participation, Series 2002, Sales Tax Revenue Bonds, Series
            2001, and State School Bonds, Series 1998A and 2000A, were refunded and considered defeased in
            substance by placing a portion of the proceeds of the refunding issues in an irrevocable trust to provide for
            all future debt service payments. Accordingly, the trust account assets and the liability for the in-substance
            defeased Certificates of Participation, Sales Tax Revenue Bonds, and State School Bonds are not included in
            the District's financial statements. On June 30, 2009, the following are considered defeased in substance:

                                          Series                                   Amount Defeased in Substance

                      Certificates of Participation, Series 2002                             $57,620,000

                      Sales Tax Revenue Bonds, Series 2001                                   $34,595,000

                      State School Bonds, Series 1998A                                        $1,425,000

                      State School Bonds, Series 2000A                                         $345,000



    12.     CHANGES IN LONG-TERM LIABILITIES

            The following is a summary of changes in long-term liabilities:

Description                                        Balance             Additions            Deductions           Balance             Due in
                                                   7-1-08                                                        6-30-09            One Year

GOVERNMENTAL ACTIVITIES

Installment-Purchases Payable              $          3,794,475    $               -    $        1,239,989          2,554,486          1,100,412
Notes Payable                                        26,173,571                    -             2,336,728         23,836,843          2,462,434
Bonds Payable                                       100,475,993                    -             4,504,306         95,971,687          4,679,306
Certificates of Participation Payable               183,202,405                    -             5,974,126        177,228,279          6,214,126
Educational Facilities Benefit District
   Agreement Payable                                   9,023,280              365,572              249,817          9,139,035                -
Other Postemployment Benefits                         12,995,598            4,526,085                  -           17,521,683                -
Arbitrage Rebate Payable                                 477,049                  -                477,049                -                  -
Compensated Absences Payable                          16,112,521            4,535,323            5,873,728         14,774,116          1,844,747

Total Governmental Activities              $        352,254,892    $        9,426,980   $       20,655,743   $    341,026,129   $     16,301,025




              For the governmental activities, compensated absences are generally liquidated with resources of the General
              Fund.




                                                                       50
                                          OSCEOLA COUNTY
                                      DISTRICT SCHOOL BOARD
                                   NOTES TO FINANCIAL STATEMENTS
                                              June 30, 2009


13.   RESERVE FOR ENCUMBRANCES

      Appropriations in governmental funds are encumbered upon issuance of purchase orders for goods and
      services. Even though appropriations lapse at the end of the fiscal year, unfilled purchase orders of the
      current year are carried forward and the next year's appropriations are likewise encumbered.

      The Florida Department of Education requires that fund balances be reserved at fiscal year-end to report an
      amount likely to be expended from the 2009-10 fiscal year budget as a result of purchase orders outstanding
      at June 30, 2009.

14.   POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS

      For the fiscal year ending June 30, 2008, the District implemented Governmental Accounting Standards
      Board Statement No. 45, Accounting and Reporting for Postemployment Benefits Other than Pensions, for certain
      postemployment health care and life insurance benefit provided by the District. The requirement of this
      Statement was implemented prospectively, with the actuarially determined liability of $93,388,311 at the July
      1, 2007, date of transition being amortized over 30 years. Accordingly, for financial reporting purposes, no
      liability is reported for the postemployment health care and life insurance benefits liability at the date of
      transition.

      The District is required to perform an actuarial valuation of its postemployment benefits other than pensions
      at least biennially. For the June 30, 2009, valuation, the following key assumptions have been modified to
      reflect current experience: (1) Trend was reset; (2) Future participation in medical was changed for future
      Medicare eligible retirees; (3) Life insurance participation was changed; (4) The cost method was changed
      from Projected Unit Credit to Entry Age; (5) The amortization method was changed from an open method
      to a closed method; and (6) The past base was restarted. The District’s actuarially determined liability was
      reduced to $51,307,965 as of June 30, 2009, due to these modifications.

      Actuarial methods and assumptions. Following are the newly applied actuarial methods and assumptions for
      the most recent valuation:

      (1) Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
          probability of events far into the future, and that actuarially determined amounts are subject to continual
          revision as actual results are compared to past expectations and new estimates are made about the future.




                                                       51
                                  OSCEOLA COUNTY
                              DISTRICT SCHOOL BOARD
                           NOTES TO FINANCIAL STATEMENTS
                                      June 30, 2009


(2) Calculations are based on the benefits provided under the terms of the substantive plan in effect at the
    time of each valuation and on the pattern of sharing of costs between the employer and plan members
    to that point. The projection of benefits for financial reporting purposes does not explicitly incorporate
    the potential effects of legal or contractual funding limitations on the pattern of cost sharing between
    the employer and plan members in the future.

(3) Actuarial calculations reflect a long-term perspective. Consistent with that perspective, actuarial methods
    and assumptions used include techniques that are designed to reduce short-term volatility in actuarial
    accrued liabilities and the actuarial value of assets.

(4) The actuarial methods and significant assumption are

        a) Entry age actuarial cost method

        b) Actuarial value of assets are fair value

        c) Discount rate is 4.0%

        d) Salary scale is 4.5%

        e) Healthcare cost trend rate is 10.5% for fiscal year ended 6/30/09 grading to 5.5% for fiscal year
             ending 6/30/14.

        f)   Past service liability is amortized over a closed 30-year period as a level percentage of projected
             payroll assumed to grow 3.0% per year.

Plan Description. Pursuant to the provision of Section 112.0801, Florida Statutes, former employees who
retire from the District, and eligible dependants, may continue to participate in the District’s health and
hospitalization plan for medical and prescriptions and life insurance coverage. The District subsidizes the
premium rates paid by the retirees by allowing them to participate in the plan at the blended group (implicitly
subsidized) premium rates for both active and retired employees. These rates provide an implicit subsidy for
retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to
the plan on average than those of active employees.

Funding Policy. The District has not advanced-funded or established a funding methodology for the annual
Other Postemployment Benefit (OPEB) costs or the net OPEB obligation. For the 2008-09 fiscal year, the
obligations were based on July 1, 2009, census, which included 171 retirees receiving post employment life
insurance that had an implicit subsidy and 206 retirees and 70 spouses receiving post employment health care
benefits that had an implicit subsidy. The District provided required contributions of $1,354,740 toward
annual OPEB costs, comprised of benefit payments made on behalf of retirees for claims expenses, and

                                                    52
                                 OSCEOLA COUNTY
                             DISTRICT SCHOOL BOARD
                          NOTES TO FINANCIAL STATEMENTS
                                     June 30, 2009


retention costs, and net of retiree contributions totaling $1,413,309. Required contributions are based on
projected pay-as-you-go financing.

Annual OPEB Cost and Net OPEB Obligations. The following table shows the District’s annual OPEB cost
for the year, the amount actually contributed to the plan, and changes in the District’s net OPEB obligation:

                 Description                                                     2009
                 Normal Cost (service cost for one year)                    $    3,860,577
                 Amortization of Unfunded Actuarial
                  Accrued Liability                                              1,771,725
                 Interest on Normal Cost and Amortization                          225,292

                 Annual Required Contribution                                    5,857,594
                 Interest on Net OPEB Obligation                                   519,824
                 Adjustment to Annual Required Contribution                       (496,593)

                 Annual OPEB Cost (Expense)                                      5,880,825

                 Contribution Toward the OPEB Cost                              (1,354,740)

                 Increase in Net OPEB Obligation                                 4,526,085
                 Net OPEB Obligation, Beginning of Year                         12,995,598

                 Net OPEB Obligation, End of Year                           $ 17,521,683


The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for the year ended June 30, 2009, and the preceding year were as follows:

                                                            Percentage of
                                                            Annual OPEB
         Fiscal Year      Annual OPEB                           Cost            Net OPEB
           Ended             Cost           Contribution     Contributed        Obligation
        June 30, 2008       14,267,785        1,272,187        8.92%             12,995,598
        June 30, 2009        5,880,825        1,354,740        23.04%            17,521,683




                                                 53
                                    OSCEOLA COUNTY
                                DISTRICT SCHOOL BOARD
                             NOTES TO FINANCIAL STATEMENTS
                                        June 30, 2009


   Funded Status and Funding Progress. The funded status of the plan as of June 30, 2009, was as follows:

                          Actuarial
                          Accrued                                                          UAAL as a
 Actuarial   Actuarial Liability (AAL)                      Funded                        Percentage of
 Valuation    Value of Projected Unit     Unfunded AAL      Ration        Covered        Covered Payroll
   Date      Assets (a)  Credit (b)       (UAAL) (b - a)     (a / b)     Payroll (c)       ((b - a) / c)
6/30/2009            0    51,307,965         51,307,965        0.00%     251,098,472               20.43%




   Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions
   about the probability of occurrence of events far into the future. Examples include assumptions about future
   employment and termination, mortality, and the healthcare cost trends. Amounts determined regarding the
   funded status of the plan and the annual required contributions of the employer are subject to continual
   revision as actual results are compared with past expectations and new estimates are made about the future.




                                                   54
                                         OSCEOLA COUNTY
                                     DISTRICT SCHOOL BOARD
                                  NOTES TO FINANCIAL STATEMENTS
                                             June 30, 2009


15.   INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS

      The following is a summary of interfund receivables and payables reported in the fund financial statements:

                         Funds                                              Interfund
                                                                 Receivables          Payables
                         Major:
                           General                          $        4,075,755   $        149,237
                           Capital Projects:
                            Other                                      948,363           2,469,277
                           Federal Programs:
                            Other                                          -               547,573
                            ARRA Economic Stimulus                         -               177,054
                         Nonmajor Governmental                         133,270           1,007,131
                         Internal Service                                  -               670,700
                         Agency                                         15,967             152,383
                         Total                              $        5,173,355   $       5,173,355


      The interfund amounts represent temporary loans to cover expenditures incurred prior to reimbursement
      from outside sources. Agency fund payables represent fees collected on behalf of the School District which
      were not remitted until after year end. These amounts are expected to be repaid within one year.

      The following is a summary of interfund transfers reported in the fund financial statements:

                          Funds                                            Interfund
                                                                Transfers In       Transfers Out
                          Major:
                           General                          $      17,180,011    $       232,577
                           Capital Projects:
                             Capital Improvements                         -           32,550,943
                             Other                                  1,916,287          2,840,835
                          Nonmajor Governmental                    18,575,652          2,047,595
                          Total                             $      37,671,950    $    37,671,950



      The major transfers out of the Capital Projects and Nonmajor Governmental funds were to provide debt
      service principal and interest payments and to assist in funding maintenance operations of the District. The
      remaining transfers between funds were operational in nature.




                                                       55
                                        OSCEOLA COUNTY
                                    DISTRICT SCHOOL BOARD
                                 NOTES TO FINANCIAL STATEMENTS
                                            June 30, 2009


16.   SCHEDULE OF STATE REVENUE SOURCES

      The following is a schedule of the District’s State revenue for the 2008-09 fiscal year:

         Source                                                                               Amount
         Florida Education Finance Program                                              $        118,202,391
         Categorical Educational Programs:
            Class Size Reduction                                                                  53,563,377
            Transportation                                                                         9,315,616
            Instructional Materials                                                                4,993,228
            School Recognition                                                                     1,945,103
            Voluntary Prekindergarten Program                                                      1,932,137
            Florida Teacher Lead Program                                                             743,851
            Excellent Teaching Program                                                               663,589
         Gross Receipts Tax (Public Education Capital Outlay)                                     10,719,386
         Workforce Development Program                                                             4,566,436
         Charter School Capital Outlay                                                             2,746,740
         Motor Vehicle License Tax (Capital Outlay and Debt Service)                               2,202,617
         Discretionary Lottery Funds                                                               1,276,948
         Food Service Supplement                                                                     326,849
         Pari-Mutuel Tax                                                                             223,250
         Miscellaneous                                                                               607,273
         Total                                                                          $        214,028,791


      Accounting policies relating to certain State revenue sources are described in Note 1.

17.   PROPERTY TAXES

      The following is a summary of millages and taxes levied on the 2008 tax roll for the 2008-09 fiscal year:

                                                                   Millages       Taxes Levied

                        GENERAL FUND

                        Nonvoted School Tax:
                         Required Local Effort                      5.059     $       136,765,292
                         Basic Discretionary Local Effort           0.498              13,462,960
                         Supplemental Discretionary Local Effort    0.206               5,569,016

                        CAPITAL PROJECTS FUNDS
                        Nonvoted Tax:
                         Local Capital Improvements                 1.750              47,309,599

                        Total                                       7.513     $       203,106,867




                                                             56
                                       OSCEOLA COUNTY
                                   DISTRICT SCHOOL BOARD
                                NOTES TO FINANCIAL STATEMENTS
                                           June 30, 2009


18.   STATE RETIREMENT PROGRAM

      Defined Benefit Plan. All regular employees of the District are covered by the Florida Retirement System
      (FRS). FRS is primarily a State-administered, cost-sharing, multiple-employer, defined benefit retirement
      plan (Plan). Plan provisions are established by Chapters 121 and 122, Florida Statutes; Chapter 112, Part IV,
      Florida Statutes; Chapter 238, Florida Statutes; and Florida Retirement System Rules, Chapter 60S, Florida
      Administrative Code, wherein eligibility, contributions, and benefits are defined and described in detail.
      Essentially all regular employees of participating employers are eligible and must enroll as members of FRS.

      Benefits in the Plan vest at six years of service. All members are eligible for normal retirement benefits at
      age 62 or at any age after 30 years of service, which may include up to 4 years of credit for military service.
      The Plan also includes an early retirement provision, but imposes a penalty for each year a member retires
      before his or her normal retirement date. The Plan provides retirement, disability, and death benefits and
      annual cost-of-living adjustments.

      A Deferred Retirement Option Program (DROP) subject to provisions of Section 121.091, Florida Statutes,
      permits employees eligible for normal retirement under the Plan to defer receipt of monthly benefit
      payments while continuing employment with an FRS employer. An employee may participate in DROP for
      a period not to exceed 60 months after electing to participate, except that certain instructional personnel may
      participate for up to 96 months. During the period of DROP participation, deferred monthly benefits are
      held in the FRS Trust Fund and accrue interest.

      Funding Policy. The contribution rates for members are established, and may be amended, by the State of
      Florida. During the 2008-09 fiscal year, contribution rates were as follows:

                                                                                  Percent of Gross Salary
             Class or Plan                                                       Employee       Employer
                                                                                                    (A)

             Florida Retirement System, Regular                                      0.00           9.85
             Florida Retirement System, Elected County Officers                      0.00           16.53
             Teachers' Retirement System, Plan E                                     6.25           11.35
             Deferred Retirement Option Program - Applicable to
              Members from All of the Above Classes or Plans                         0.00           10.91
             Florida Retirement System, Reemployed Retiree                           (B)             (B)

             Notes:     (A)   Employer rates include 1.11 percent for the postemployment health insurance
                              supplement. Also, employer rates, other than for DROP participants, include 0.05
                              percent for administrative costs of the Public Employee Optional Retirement
                              Program.
                        (B)   Contribution rates are dependent upon the retirement class or plan in which
                              reemployed.


                                                        57
                                    OSCEOLA COUNTY
                                DISTRICT SCHOOL BOARD
                             NOTES TO FINANCIAL STATEMENTS
                                        June 30, 2009



The District's liability for participation is limited to the payment of the required contribution at the rates and
frequencies established by law on future payrolls of the District. The District's contributions, including
employee contributions, for the fiscal years ending June 30, 2007, June 30, 2008, and June 30, 2009, totaled
$19,443,791, $25,536,695, and $24,095,983, respectively, which were equal to the required contributions for
each fiscal year.

Defined Contribution Plan.    Effective July 1, 2002, the Public Employee Optional Retirement Program
(PEORP) was implemented as a defined contribution plan alternative available to all FRS members in lieu of
the defined benefit plan. Employer contributions are defined by law, but the ultimate benefit depends in
part on the performance of investment funds. PEORP is funded by employer contributions that are based
on salary and membership class (Regular Class, Elected County Officers Class, etc.). Contributions are
directed to individual member accounts, and the individual members allocate contributions and account
balances among various approved investment choices. There were 764 District participants in PEORP
during the 2008-09 fiscal year. Required employer contributions made to the program for the fiscal year
ending June 30, 2009, totaled $2,930,251.

Pension Reporting. The financial statements and other supplementary information of the FRS are included
in the comprehensive annual financial report of the State of Florida, which may be obtained from the Florida
Department of Financial Services. Also, an annual report on FRS, which includes its financial statements,
required supplementary information, actuarial report, and other relevant information, may be obtained from
the Florida Department of Management Services, Division of Retirement.




                                                   58
                                       OSCEOLA COUNTY
                                   DISTRICT SCHOOL BOARD
                                NOTES TO FINANCIAL STATEMENTS
                                           June 30, 2009


19.   EARLY RETIREMENT PROGRAM

      The Board has established an early retirement program as authorized by Section 1012.685, Florida Statutes,
      which it offers on a year-to-year basis. Under this program, the Board purchased annuities for employees
      with at least 25 years of creditable service but less than 30 years, as of June 30, 2009, who have reached the
      age of 55 but are less than age 62 at the effective date of retirement and have applied for retirement under
      the Florida Retirement System (described in the previous note). The Board may also consider employees
      ages 50 through 54 if the Board determines that it is economically feasible to do so. The annuities provide
      for the early retirees to receive additional income after retirement, not to exceed the difference between their
      Florida Retirement System early retirement benefits, which are reduced by 5 percent for each year prior to
      age 62, and the benefits that would have been received had they been eligible for full Florida Retirement
      System benefits on the date of retirement. In the event an employee has earned experience in a public
      school system in another state, the Board may choose to purchase such out-of-state experience (up to five
      years) as is necessary to provide regular retirement benefits. This experience may not be purchased in
      addition to an annuity. Four employees retired and accepted early retirement benefits during the 2008-09
      fiscal year. Annuities were purchased for these individuals at a total cost of $113,377.

      The Board did cover the full amount by which pensions were reduced by the State Division of Retirement
      and did not guarantee that an early retirement program would be offered in future years.




                              The rest of this page intentionally left blank.




                                                        59
                                      OSCEOLA COUNTY
                                  DISTRICT SCHOOL BOARD
                               NOTES TO FINANCIAL STATEMENTS
                                          June 30, 2009


20.   CONSTRUCTION CONTRACT COMMITMENTS

      The following is a summary of major construction contract commitments remaining at fiscal year-end:

                                                          CONTRACT         TOTAL           BALANCE
                     PROJECT                               AMOUNT        COMPLETED        COMMITTED
       #3008141 MIDDLE SCHOOL CC
       CONTR-TURNER CONSTRUCTION CO                    $    17,060,165 $     17,060,165 $           -
       ARCH - SCHENKEL & SCHULTZ INC                          1,192,200        1,101,323          90,877
       #3008191 ELEM M AND CONVERSION
       CONTR-W G MILLS INC                                  12,402,389       11,662,897          739,492
       ARCH - SCHENKEL & SCHULTZ INC                           576,480          504,146           72,334
       #3008181 ELEM L
       CONTR-W G MILLS INC                                  10,994,579       10,792,230          202,349
       ARCH - SCHENKEL & SCHULTZ INC                           503,430          486,805           16,625
       #3002031 SCHS COMPREHENSIVE RENOVATION
       CONTR-JAMES A CUMMINGS INC             5,230,565                         157,906        5,072,659
       ARCH - BRPH ARCHITECT/ENGINEERS IN     3,076,345                       1,676,419        1,399,926
       #3002031 OHS COMPREHENSIVE RENOVATION
       CONTR-CLANCY & THEYS                  2,204,586                          226,877        1,977,709
       ARCH - C T HSU & ASSOCIATES PA        3,025,000                        1,551,865        1,473,135
       #3002401 PHS BLACK BOX THEATER
       CONTR - GATES BUILDERS INC                            4,147,689        3,565,200          582,489
       ARCH-SCHENKEL & SCHULTZ                                 225,000          207,707           17,293
       #320---1 MILL CREEK ELEM VARIOUS PROJECTS
       CONTR-MCCREE DESIGN BUILDERS INC          3,429,595                    2,994,806          434,789
       ARCH-MCCREE ARCHITECTS & ENGINEER           247,720                      214,931           32,789
       #3003501 - 0701 MILL CREEK ELEMENTARY ADDITION
       CONTR - MCCREE DESIGN BUILDERS            3,348,436                    2,804,234          544,202
       ARCH - MCCREE DESIGN BUILDERS               264,275                      251,384           12,891
       #3003501 - 0811 PLEASANT HILL ELEMENTARY ADDITION
       CONTR - MCCREE DESIGN BUILDERS            2,729,204                    2,407,005          322,199
       ARCH - MCCREE DESIGN BUILDERS               208,500                      202,709            5,791
       #3202131 DISCOVERY & NARCOOSSEE INTERMED PAINTING
       CONTR-SEMCO CONSTRUCTION INC            973,171                          400,637          572,534
       ARCH - ECS-FLORIDA, LLC                  16,800                                0           16,800
       #3202301 LAKEVIEW ELEMENTARY HVAC
       CONTR-SKANSKA USA BUILDING INC                          805,623                0          805,623
       ARCH - SABISTON ENGINEERING GROUP                        33,225           24,925            8,300
       #3002281 OCSA ROOF REPLACEMENT
       CONTR-GENERAL WORKS LLC                                 652,253          652,253                0
       ARCH - DBY BUILDING SCIENCES, LLC                        30,580           29,251            1,329
       #3008211 ELEMENTARY N
       CONTR-W G MILLS INC                                      56,018           36,034           19,984
       ARCH - SCHENKEL & SCHULTZ INC                           537,980          354,000          183,980
       #3201041 POINCIANA, HICKORY TREE, NEPTUNE DOOR PROJECT
       CONTR-RUBY BUILDERS INC                   315,476    115,855                              199,621
                                                       $    74,287,283   $   59,481,565   $   14,805,718




                                                     60
                                        OSCEOLA COUNTY
                                    DISTRICT SCHOOL BOARD
                                 NOTES TO FINANCIAL STATEMENTS
                                            June 30, 2009


21.   RISK MANAGEMENT PROGRAMS

      The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
      errors and omissions; injuries to employees; and natural disasters. The Osceola County District School
      Board is a member of the Florida School Boards Insurance Trust (Trust) which was established by the
      Florida School Boards Association, Inc., to provide combined self-insurance and risk management services
      to participating members.     The Trust is a public entity risk pool and provides a combined self-insurance
      program for property protection, workers' compensation, money and securities, employee fidelity and
      faithful performance, boiler and machinery, and other coverage deemed necessary by the members of the
      Trust. Section 1001.42(10)(k), Florida Statutes, provides the authority for the District to enter into such a
      risk management program. The Trust is self-sustaining through member assessments (premiums), and
      purchases coverage through commercial companies for claims in excess of specified amounts. The Board of
      Directors for the Trust is composed of one board member from each participating district and a
      superintendent and a district-level business official selected from one of the participating districts. Settled
      claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three
      fiscal years.

      The Board has established the Osceola County School Board Group Health and Life Insurance Trust to
      provide for a health, hospitalization, and life insurance program. These programs are accounted for in the
      District’s Internal Service funds. The program is on a self-insured basis up to specified limits. The District
      did not elect to purchase the aggregate stop-loss coverage due to the rising premium cost and the high
      attachment point. The District elected to continue coverage for a specific stop-loss for any one claim of
      $550,000. The Board has contracted with a professional administrator to administer the self-insurance
      program, including the processing, investigating, and payment of claims. Settled claims resulting from these
      risks have not exceeded commercial insurance coverage in any of the past three fiscal years. A liability in the
      amount of $3,531,000 was actuarially determined to cover estimated incurred, but not reported, insurance
      claims payable for the group health program at June 30, 2009.

      Effective July 1, 2003, the District’s general liability and auto liability programs were established on a
      self-insured basis. These programs are administered by the Trust and are accounted for in the District’s
      internal service funds. The District intends to accumulate a casualty loss fund of $5,000,000 by funding
      approximately $500,000 per year to the internal service fund established for these programs. The program
      administrator held prefunded cash deposits of $955,526 at June 30, 2009, which the District reports as cash
      with fiscal agent in the internal service funds. A liability of $1,216,966 was established based on reserves for
      outstanding claims at June 30, 2009, as reported by the program administrator.


                                                         61
                                        OSCEOLA COUNTY
                                    DISTRICT SCHOOL BOARD
                                 NOTES TO FINANCIAL STATEMENTS
                                            June 30, 2009


      The following schedule represents the changes in claims liability for the past two fiscal years for the District's
      self-insurance programs:

                                                           Current-Year
                                     Beginning-of-          Claims and                 Claims              Balance at
               Fiscal Year
                                      Fiscal-Year           Changes in                Payments               Fiscal
                                       Liability            Estimates                                      Year-End

           2007-08               $         2,811,660   $         42,581,161   $         (41,296,184)   $       4,096,637
           2008-09               $         4,096,637   $         39,037,469   $         (38,386,140)   $       4,747,966

22.   INTERNAL SERVICE FUNDS

      The following is a summary of financial information as reported in the Internal Service Funds for the
      2008-09 fiscal year:

                                                                                        Group                  Auto and
                                                                                        Health                 General
                                                                 Total                 Insurance               Liability
       Total Assets                                    $      11,821,257          $        7,534,487       $      4,286,770
      Liabilities and Net Assets:
        Accounts Payable                               $           633,323        $          633,323       $            -
        Due to Other Funds                                         670,700                   670,700                    -
        Estimated Insurance Claims Payable                       4,747,966                 3,531,000              1,216,966
        Net Assets:
          Unrestricted Net Assets                                5,769,268                 2,699,464              3,069,804
      Total Liabilities and Net Assets                 $      11,821,257          $        7,534,487       $      4,286,770
      Revenues:
       Premium Revenues                                $      47,095,160          $      46,154,274        $        940,886
       Other                                                      21,884                        132                  21,752

      Total Revenues                                          47,117,044                 46,154,406                 962,638
      Total Expenses                                         (44,022,103)               (43,646,537)               (375,566)

      Change in Net Assets                             $         3,094,941        $        2,507,869       $        587,072




                                                            62
                                                   OSCEOLA COUNTY
                                               DISTRICT SCHOOL BOARD
                                            NOTES TO FINANCIAL STATEMENTS
                                                       June 30, 2009


23.     BOND RATINGS

        The credit ratings of the District’s bond insurers have changed during the past year. Following is a summary
        of the bond insurer for each of the District’s issues and its rating as of June 30, 2009.


                                                                                                               Insured Ratings
                                                                                       Fitch                      Moody's                 Standard & Poor's
Sales Tax Revenue Bonds
2001 Sales Tax Revenue Bonds    Financial Guaranty Insurance Corp (FGIC)         Ratings Withdrawn           Ratings Withdrawn           Ratings Withdrawn
2007 Sales Tax Revenue Bonds    Financial Security Assurance Inc. (FSA)         AA+ /Negative Watch    Aa3 /Under Review for Downgrade AAA /Negative Outlook
Certificates of Participation
1999 COPs                       Ambac Financial Group Inc.                       Ratings Withdrawn         Ba3 / Outlook Developing      BBB /Negative Watch
2000 COPs                       National Public Finance Guarantee Corporation    Ratings Withdrawn      Baa1 /Under Review for Upgrade   A /Outlook Developing
2002 COPs                       Ambac Financial Group Inc.                       Ratings Withdrawn         Ba3 / Outlook Developing      BBB /Negative Watch
2004 COPs                       Financial Guaranty Insurance Corp (FGIC)         Ratings Withdrawn            Ratings Withdrawn            Ratings Withdrawn
2005 COPs                       National Public Finance Guarantee Corporation    Ratings Withdrawn      Baa1 /Under Review for Upgrade   A /Outlook Developing
2007 COPs                       Ambac Financial Group Inc.                       Ratings Withdrawn        Baa1 / Watchlist Developing    BBB /Negative Watch

Since June 30, 2009, the District’s bond insurer ratings have changed. Following are the ratings as of December 4,
2009:

                                                    Fitch                                             Moody's                         Standard & Poor's
Ambac Financial Group                             Not Rated                                    Caa2/Outlook Developing                 CC/Developing
Financial Guaranty Insurance Corp-FGIC            Not Rated                                          Not Rated                            Not Rated
Financial Security Assurance Inc.-FSA         AA/Negative Outlook                               Aa3/Negative Outlook                AAA/Negative Outlook
National Public Finance Guarantee Corporation     Not Rated                                    Baa1/Outlook Developing              A/Outlook Developing



24.     LITIGATION

        The District is involved in several threatened and pending legal actions, which could result in material loss to
        the District. In the opinion of the District’s legal counsel and management, it is not probable that a material
        loss will occur.




                                                                           63
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                64
   REQUIRED
SUPPLEMENTARY
 INFORMATION




      65
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
OTHER POST EMPLOYMENT BENEFITS
SCHEDULE OF FUNDING PROGRESS
June 30, 2009




                                           Actuarial Accrued                                                                      UAAL as a
                                            Liability (AAL)                                                                      Percentage of
   Actuarial         Actuarial Value        Projected Unit         Unfunded AAL       Funded Ration                             Covered Payroll
Valuation Date        of Assets (a)            Credit (b)          (UAAL) (b - a)        (a / b)          Covered Payroll (c)     ((b - a) / c)

06/30/2008       $                0    $         93,388,311    $         93,388,311           0.00%   $         258,362,035             36.15%
06/30/2009                        0              51,307,965              51,307,965           0.00%             251,098,472             20.43%




                                                                    66
  COMBINING AND INDIVIDUAL
FUND STATEMENTS AND SCHEDULES
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     COMBINING BALANCE SHEET
     NONMAJOR GOVERNMENTAL FUNDS
     June 30, 2009
                                                                                                                            Total
                                                                                                                          Nonmajor
                                                       Special Revenue       Debt Service         Capital Projects       Governmental
                                                           Funds               Funds                  Funds                 Funds
     ASSETS
     Cash and Cash Equivalents                     $         2,126,584   $        1,009,367   $          3,829,666   $        6,965,617
     Investments                                                                    379,067                                     379,067
     Accounts Receivable                                        11,531                  486                    463               12,480
     Due From Other Funds:
       Budgetary Funds                                         133,270                                                          133,270
     Due from Other Agencies                                   532,898            1,404,891            20,673,211            22,611,000
     Inventory                                                 319,537                                                          319,537
        Total Assets                               $         3,123,820   $        2,793,811   $        24,503,340    $       30,420,971
     LIABILITIES AND FUND BALANCES
     LIABILITIES
     Salaries and Benefits                         $            49,268   $                    $                      $           49,268
     Payroll Deductions and Withholdings Payable                 8,690                                                            8,690




67
     Accounts Payable                                          217,898                3,000                 71,427              292,325
     Construction Contracts Payable                                                                      1,118,069            1,118,069
     Sales Tax Payable                                             439                                                              439
     Due to Other Agencies                                      78,812                                                           78,812
     Due to Other Funds:
       Budgetary Funds                                          58,768             948,363                                    1,007,131
     Deferred Revenue                                           98,756                                                           98,756
       Total Liabilities                                       512,631             951,363               1,189,496            2,653,490
     FUND BALANCES
      Reserved for:
        Encumbrances                                             6,957                                 10,591,222            10,598,179
        Debt Service                                                              1,842,448                                   1,842,448
      Unreserved, Reported in:
        Special Revenue Funds                                2,604,232                                                        2,604,232
        Capital Projects Funds                                                                         12,722,622            12,722,622
         Total Fund Balances                                 2,611,189            1,842,448            23,313,844            27,767,481
          Total Liabilities and Fund Balances      $         3,123,820   $        2,793,811   $        24,503,340    $       30,420,971
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
     CHANGES IN FUND BALANCE
     NONMAJOR GOVERNMENTAL FUNDS
     For the Fiscal Year Ended June 30, 2009

                                                                                                                                                 Total
                                                                                                                                               Nonmajor
                                                                     Special Revenue          Debt Service           Capital Projects         Governmental
                                                                         Funds                  Funds                    Funds                   Funds
     REVENUES
     Intergovernmental:
        Federal Through State                                    $          15,661,865    $                      $                        $        15,661,865
        State                                                                  328,685              1,699,168               11,190,776             13,218,629
     Local                                                                  10,175,441             10,283,295                   28,376             20,487,112
        Total Revenues                                                      26,165,991             11,982,463               11,219,152             49,367,606
     EXPENDITURES
     Current - Education:
       Instruction                                                                 80                                                                      80
       Instruction and Curriculum Development Services                        234,897                                                                 234,897
       General Administration                                                   9,617                                                                   9,617
       Facilities Acquisition and Construction                                                                               2,773,749              2,773,749
       Food Services                                                        22,753,197                                                             22,753,197
       Operation of Plant                                                        1,271                                                                  1,271




68
       Maintenance of Plant                                                        669                                                                    669
       Community Services                                                    3,032,975                                                              3,032,975
     Fixed Capital Outlay:
       Facilities Acquisition and Construction                                                                               8,328,263              8,328,263
       Other Capital Outlay                                                      4,983                                         140,577                145,560
     Debt Service:
       Principal                                                                                   13,642,567                                      13,642,567
       Interest and Fiscal Charges                                                                 14,689,592                      953             14,690,545
        Total Expenditures                                                  26,037,689             28,332,159               11,243,542             65,613,390
     Excess (Deficiency) of Revenues Over (Under) Expenditures                 128,302            (16,349,696)                 (24,390)           (16,245,784)
     OTHER FINANCING SOURCES (USES)
     Transfers In                                                              357,873             18,217,779                                      18,575,652
     Transfers Out                                                            (125,797)            (1,921,798)                                     (2,047,595)
        Total Other Financing Sources (Uses)                                   232,076             16,295,981                                      16,528,057
      Net Change in Fund Balances                                              360,378                (53,715)                 (24,390)               282,273
     Fund Balances, July 1, 2008                                             2,250,811              1,896,163               23,338,234             27,485,208
     Fund Balances, June 30, 2009                                $           2,611,189    $         1,842,448    $          23,313,844    $        27,767,481
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     COMBINING BALANCE SHEET
     NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
     June 30, 2009
                                                                             Special Revenue Funds
                                                                                                         Total Nonmajor
                                                        Food                    Miscellaneous            Special Revenue
                                                       Service                 Special Revenue                Funds
     ASSETS
     Cash and Cash Equivalents                     $       1,376,554     $                750,030    $            2,126,584
     Accounts Receivable                                      11,404                          127                    11,531
     Due From Other Funds:
       Budgetary Funds                                            693                     132,577                   133,270
       Internal Funds
     Due from Other Agencies                                 532,898                                                532,898
     Inventory                                               319,537                                                319,537
        Total Assets                               $       2,241,086     $                882,734    $            3,123,820
     LIABILITIES AND FUND BALANCES
     LIABILITIES
     Salaries and Benefits                         $          22,356     $                 26,912    $               49,268
     Payroll Deductions and Withholdings Payable               4,236                        4,454                     8,690




69
     Accounts Payable                                        191,688                       26,210                   217,898
     Sales Tax Payable                                           439                                                    439
     Due to Other Agencies                                    64,447                       14,365                    78,812
     Due to Other Funds:
       Budgetary Funds                                                                     58,768                    58,768
     Deferred Revenue                                         66,356                       32,400                    98,756
       Total Liabilities                                     349,522                      163,109                   512,631
     FUND BALANCES
      Reserved for:
        Encumbrances                                             1,052                      5,905                     6,957
      Unreserved, Reported in:
        Special Revenue Funds                              1,890,512                      713,720                 2,604,232
         Total Fund Balances                               1,891,564                      719,625                 2,611,189
          Total Liabilities and Fund Balances      $       2,241,086     $                882,734    $            3,123,820
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
     NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS
     For the Fiscal Year Ended June 30, 2009
                                                                    Special Revenue Funds
                                                                                                                  Total Nonmajor
                                                                      Food                Miscellaneous           Special Revenue
                                                                     Service             Special Revenue               Funds
     REVENUES
     Intergovernmental:
        Federal Through State                                    $      15,661,865   $                        $           15,661,865
        State                                                              328,685                                           328,685
     Local                                                               6,925,951               3,249,490                10,175,441
        Total Revenues                                                  22,916,501               3,249,490                26,165,991
     EXPENDITURES
     Current - Education:
       Instruction                                                                                      80                        80
       Instruction and Curriculum Development Services                                             234,897                   234,897
       General Administration                                                                        9,617                     9,617
       Food Services                                                    22,753,197                                        22,753,197
       Operation of Plant                                                                            1,271                     1,271
       Maintenance of Plant                                                                            669                       669
       Community Services                                                                        3,032,975                 3,032,975




70
     Fixed Capital Outlay:
       Other Capital Outlay                                                  4,983                                             4,983
        Total Expenditures                                              22,758,180               3,279,509                26,037,689
     Excess (Deficiency) of Revenues Over (Under) Expenditures             158,321                 (30,019)                  128,302
     OTHER FINANCING SOURCES (USES)
     Transfers In                                                                                  357,873                   357,873
     Transfers Out                                                                                (125,797)                 (125,797)
        Total Other Financing Sources (Uses)                                   -                   232,076                   232,076
      Net Change in Fund Balances                                          158,321                 202,057                   360,378
     Fund Balances, July 1, 2008                                         1,733,243                 517,568                 2,250,811
     Fund Balances, June 30, 2009                                $       1,891,564   $             719,625    $            2,611,189
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     COMBINING BALANCE SHEET
     NONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE FUNDS
     June 30, 2009
                                                                       Debt Service Funds
                                                                                                 Total Nonmajor
                                                   SBE/COBI               Other Debt              Debt Service
                                                     Bonds                 Service                    Funds
     ASSETS
     Cash and Cash Equivalents                 $                   $             1,009,367   $           1,009,367
     Investments                                         362,579                    16,488                 379,067
     Accounts Receivable                                                               486                     486
     Due from Other Agencies                                                     1,404,891               1,404,891
        Total Assets                           $         362,579   $             2,431,232   $           2,793,811
     LIABILITIES AND FUND BALANCES
     LIABILITIES
     Accounts Payable                          $                   $                 3,000   $              3,000
     Due to Other Funds:




71
       Budgetary Funds                                                            948,363                 948,363
       Total Liabilities                                                          951,363                 951,363
     FUND BALANCES
      Reserved for:
        Debt Service                                     362,579                 1,479,869               1,842,448
         Total Fund Balances                             362,579                 1,479,869               1,842,448
         Total Liabilities and Fund Balances   $         362,579   $             2,431,232   $           2,793,811
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
     NONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE FUNDS
     For the Fiscal Year Ended June 30, 2009
                                                                    Debt Service Funds
                                                                                                                        Total Nonmajor
                                                                     SBE/COBI Bonds          Other Debt Service        Debt Service Funds
     REVENUES
     Intergovernmental:
       State                                                     $          1,699,168    $                         $            1,699,168
     Local                                                                                           10,283,295                10,283,295
        Total Revenues                                                      1,699,168                10,283,295                11,982,463
     EXPENDITURES
     Current - Education:
     Debt Service:
       Principal                                                            1,015,000                12,627,567                13,642,567
       Interest and Fiscal Charges                                            720,414                13,969,178                14,689,592
        Total Expenditures                                                  1,735,414                26,596,745                28,332,159
     Excess (Deficiency) of Revenues Over (Under) Expenditures                (36,246)              (16,313,450)              (16,349,696)




72
     OTHER FINANCING SOURCES (USES)
     Transfers In                                                                                    18,217,779                18,217,779
     Transfers Out                                                                                   (1,921,798)               (1,921,798)
        Total Other Financing Sources (Uses)                                                         16,295,981                16,295,981
      Net Change in Fund Balances                                             (36,246)                  (17,469)                  (53,715)
     Fund Balances, July 1, 2008                                             398,825                  1,497,338                 1,896,163
     Fund Balances, June 30, 2009                                $           362,579     $            1,479,869    $            1,842,448
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     COMBINING BALANCE SHEET
     NONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS FUNDS
     June 30, 2009
                                                                                    Capital Projects Funds
                                                                                                                           Total Nonmajor
                                                   Capital Outlay        Public Education         Capital Outlay and           Capital
                                                    Bond Issues           Capital Outlay          Debt Service Funds           Project
                                                      (COBI)                 (PECO)                  (CO & DS)                  Funds
     ASSETS
     Cash and Cash Equivalents                 $         2,319,909   $            592,391     $              917,366   $         3,829,666
     Accounts Receivable                                       361                      6                         96                   463
     Due from Other Agencies                                                   20,673,211                                       20,673,211
        Total Assets                           $         2,320,270   $         21,265,608     $              917,462   $        24,503,340
     LIABILITIES AND FUND BALANCES
     LIABILITIES
     Accounts Payable                          $             4,555   $             62,949     $                3,923   $            71,427
     Construction Contracts Payable                                             1,118,069                                        1,118,069
      Total Liabilities                                      4,555              1,181,018                      3,923             1,189,496
     FUND BALANCES
     Reserved for:
        Encumbrances                                        24,084             10,424,110                    143,028            10,591,222




73
     Unreserved, Reported in:
        Capital Projects Funds                           2,291,631              9,660,480                    770,511            12,722,622
        Total Fund Balances                              2,315,715             20,084,590                    913,539            23,313,844
         Total Liabilities and Fund Balances   $         2,320,270   $         21,265,608     $              917,462   $        24,503,340
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
     NONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS FUNDS
     For the Fiscal Year Ended June 30, 2009
                                                                          Capital Projects Funds
                                                                                                                                             Total Nonmajor
                                                                     Capital Outlay         Public Education        Capital Outlay and           Capital
                                                                      Bond Issues            Capital Outlay         Debt Service Funds           Project
                                                                        (COBI)                  (PECO)                 (CO & DS)                  Funds
     REVENUES
     Intergovernmental:
       State                                                     $                      $          10,719,386   $             471,390    $         11,190,776
     Local                                                                    20,135                    2,685                   5,556                  28,376
        Total Revenues                                                        20,135               10,722,071                 476,946              11,219,152
     EXPENDITURES
     Current - Education:
       Facilities Acquisition and Construction                               444,217                2,007,346                 322,186               2,773,749
     Fixed Capital Outlay:
       Facilities Acquisition and Construction                                24,938                8,303,325                                       8,328,263
       Other Capital Outlay                                                                           140,577                                         140,577
     Debt Service:
       Dues, Fees and Issuance Costs                                                                                              953                     953




74
        Total Expenditures                                                   469,155              10,451,248                  323,139              11,243,542
     Excess (Deficiency) of Revenues Over (Under) Expenditures              (449,020)                270,823                  153,807                 (24,390)
      Net Change in Fund Balances                                           (449,020)                270,823                  153,807                 (24,390)
     Fund Balances, July 1, 2008                                           2,764,735              19,813,767                  759,732              23,338,234
     Fund Balances, June 30, 2009                                $         2,315,715    $         20,084,590    $             913,539    $         23,313,844
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
SPECIAL REVENUE FUND - FOOD SERVICES
For the Fiscal Year Ended June 30, 2009
                                                                                                                             Variance with
                                                                       Budgeted Amounts                    Actual            Final Budget -
                                                                Original                Final             Amounts            Over (Under)
REVENUES
Intergovernmental:
   Federal Through State                                    $    17,312,186     $        15,502,075   $     15,661,865   $             159,790
   State                                                            315,500                 315,500            328,685                  13,185
Local                                                             7,508,200               7,715,932          6,925,951                (789,981)
  Total Revenues                                                 25,135,886              23,533,507         22,916,501                (617,006)
EXPENDITURES
Current - Education:
  Food Services
      Salaries                                                    7,662,606               7,051,119          7,002,262                 48,857
      Employee Benefits                                           4,961,770               4,428,311          4,314,259                114,052
      Purchased Services                                            470,699                 289,731            244,092                 45,639
      Energy Services                                               185,091                 164,245            115,058                 49,187
      Materials and Supplies                                     12,026,054              11,043,023         10,548,230                494,793
      Capital Outlay                                                 85,738                  25,793             25,131                    662
      Other Expenses                                                574,875                 512,661            504,165                  8,496
   Fixed Capital Outlay
     Facilities Acquisition and Construction                         25,050                      50                                        50
     Other Capital Outlay                                            50,508                   5,508              4,983                    525
   Total Expenditures                                            26,042,391              23,520,441         22,758,180                762,261
Excess (Deficiency) of Revenues Over (Under) Expenditures          (906,505)                 13,066            158,321                145,255
 Net Change in Fund Balances                                       (906,505)                 13,066            158,321                145,255
Fund Balances, July 1, 2008                                       1,733,243               1,733,243          1,733,243
Fund Balances, June 30, 2009                                $       826,738     $         1,746,309   $      1,891,564   $            145,255




                                                                 75
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
SPECIAL REVENUE FUND - MISCELLANEOUS
For the Fiscal Year Ended June 30, 2009
                                                                                                                               Variance with
                                                                       Budgeted Amounts                      Actual            Final Budget -
                                                                Original                Final               Amounts            Over (Under)
REVENUES
Local                                                       $      2,921,915    $         3,257,863     $     3,249,490    $              (8,373)
  Total Revenues                                                   2,921,915              3,257,863           3,249,490                   (8,373)
EXPENDITURES
Current - Education:
 Instruction
      Employee Benefits                                                                            2                   2
      Purchased Services                                                  250
      Materials and Supplies                                              275
      Other Expenses                                                    1,000                     78                  78
 Instruction and Curriculum Development
      Salaries                                                        137,915              140,501             140,501
      Employee Benefits                                                34,705               36,811              36,811
      Purchased Services                                                                    50,524              50,524
      Materials and Supplies                                          390,612              593,171               4,978                  588,193
      Capital Outlay                                                                         1,638               1,638
      Other Expenses                                                                           445                 445
 General Administration
      Other Expenses                                                                            9,617             9,617
 Operation of Plant
      Purchased Services                                                                        1,235             1,235
      Capital Outlay                                                                               36                36
 Maintenance of Plant
      Materials and Supplies                                                                     669               669
 Community Services
      Salaries                                                     1,826,401              1,711,024           1,711,024
      Employee Benefits                                              739,638                763,562             763,562
      Purchased Services                                              98,070                133,171             128,211                    4,960
      Energy Services                                                 15,000                 14,552              14,552
      Materials and Supplies                                          61,067                173,835             140,231                   33,604
      Capital Outlay                                                  14,300                  5,097               5,097
      Other Expenses                                                 164,687                270,298             270,298
  Fixed Capital Outlay
    Other Capital Outlay                                               7,000
   Total Expenditures                                              3,490,920              3,906,266           3,279,509                 626,757
Excess (Deficiency) of Revenues Over (Under) Expenditures           (569,005)              (648,403)            (30,019)                618,384
OTHER FINANCING SOURCES (USES)
Transfers In                                                          100,000               357,873             357,873
Transfers Out                                                                              (125,797)           (125,797)
   Total Other Financing Sources (Uses)                             100,000                 232,076             232,076
 Net Change in Fund Balances                                       (469,005)               (416,327)            202,057                 618,384
Fund Balances, July 1, 2008                                         517,568                 517,568             517,568
Fund Balances, June 30, 2009                                $        48,563     $           101,241     $       719,625    $            618,384




                                                                 76
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
DEBT SERVICE FUNDS - SBE/COBI BONDS
For the Fiscal Year Ended June 30, 2009
                                                                                                                            Variance with
                                                                      Budgeted Amounts                    Actual            Final Budget -
                                                                Original               Final             Amounts            Over (Under)
REVENUES
Intergovernmental:
   State                                                    $     1,671,634    $        1,699,168    $     1,699,168    $
   Total Revenues                                                 1,671,634             1,699,168          1,699,168
EXPENDITURES
Current - Education:
   Debt Service
     Principal                                                    1,015,000             1,015,000          1,015,000
     Interest and Fiscal Charges                                    719,104               719,104            719,104
     Dues, Fees and Issuance Costs                                                          1,310              1,310
   Total Expenditures                                             1,734,104             1,735,414          1,735,414
Excess (Deficiency) of Revenues Over (Under) Expenditures           (62,470)              (36,246)           (36,246)
 Net Change in Fund Balances                                        (62,470)              (36,246)           (36,246)
Fund Balances, July 1, 2008                                         398,825               398,825            398,825
Fund Balances, June 30, 2009                                $       336,355    $          362,579    $       362,579    $




                                                                 77
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
DEBT SERVICE FUNDS - OTHER DEBT SERVICE
For the Fiscal Year Ended June 30, 2009
                                                                                                                             Variance with
                                                                      Budgeted Amounts                    Actual             Final Budget -
                                                                Original               Final             Amounts             Over (Under)
REVENUES
Local                                                       $    11,832,011    $       10,282,664    $    10,283,295     $                631
  Total Revenues                                                 11,832,011            10,282,664         10,283,295                      631
EXPENDITURES
Current - Education:
  Debt Service
    Principal                                                    12,512,288            12,627,567          12,627,567
    Interest and Fiscal Charges                                  14,045,688            13,930,409          13,906,612                   23,797
    Dues, Fees and Issuance Costs                                    85,801                63,115              62,566                      549
   Total Expenditures                                            26,643,777            26,621,091          26,596,745                   24,346
Excess (Deficiency) of Revenues Over (Under) Expenditures       (14,811,766)          (16,338,427)        (16,313,450)                  24,977
OTHER FINANCING SOURCES (USES)
Transfers In                                                     18,279,762            18,241,575         18,217,779                   (23,796)
Transfers Out                                                    (3,487,577)           (1,921,798)        (1,921,798)
   Total Other Financing Sources (Uses)                          14,792,185            16,319,777         16,295,981                   (23,796)
 Net Change in Fund Balances                                        (19,581)              (18,650)           (17,469)                    1,181
Fund Balances, July 1, 2008                                       1,497,338             1,497,338          1,497,338
Fund Balances, June 30, 2009                                $     1,477,757    $        1,478,688    $     1,479,869     $               1,181




                                                                  78
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECT FUNDS - CAPITAL OUTLAY BOND ISSUES (COBI)
For the Fiscal Year Ended June 30, 2009
                                                                                                                             Variance with
                                                                      Budgeted Amounts                     Actual            Final Budget -
                                                                Original               Final              Amounts            Over (Under)
REVENUES
Local                                                       $                  $           20,135     $       20,135     $
  Total Revenues                                                                           20,135             20,135
EXPENDITURES
Current - Education:
    Facilities Acquisition and Construction                       2,395,069             2,522,973            444,217                 2,078,756
Fixed Capital Outlay:
      Facilities Acquisition and Construction                       366,057                250,638             24,938                  225,700
   Total Expenditures                                             2,761,126              2,773,611            469,155                2,304,456
Excess (Deficiency) of Revenues Over (Under) Expenditures        (2,761,126)            (2,753,476)          (449,020)               2,304,456
 Net Change in Fund Balances                                     (2,761,126)            (2,753,476)          (449,020)               2,304,456
Fund Balances, July 1, 2008                                       2,764,735              2,764,735          2,764,735
Fund Balances, June 30, 2009                                $         3,609    $            11,259    $     2,315,715    $           2,304,456




                                                                  79
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECT FUNDS - PUBLIC EDUCATION CAPITAL OUTLAY (PECO)
For the Fiscal Year Ended June 30, 2009
                                                                                                                            Variance with
                                                                       Budgeted Amounts                    Actual           Final Budget -
                                                                Original                Final             Amounts           Over (Under)
REVENUES
Intergovernmental:
   State                                                    $    10,719,386     $       10,719,386    $    10,719,386   $
Local                                                                                        2,685              2,685
   Total Revenues                                                10,719,386             10,722,071         10,722,071
EXPENDITURES
Current - Education:
     Facilities Acquisition and Construction                      3,892,620              3,576,037          2,007,346               1,568,691
Fixed Capital Outlay:
      Facilities Acquisition and Construction                    26,569,863             26,818,276          8,303,325              18,514,951
      Other Capital Outlay                                           53,574                140,807            140,577                     230
   Total Expenditures                                            30,516,056             30,535,120         10,451,248              20,083,872
Excess (Deficiency) of Revenues Over (Under) Expenditures       (19,796,670)           (19,813,050)           270,823              20,083,872
 Net Change in Fund Balances                                    (19,796,670)           (19,813,050)           270,823              20,083,872
Fund Balances, July 1, 2008                                      19,813,767             19,813,767         19,813,767
Fund Balances, June 30, 2009                                $        17,097     $              717    $    20,084,590   $          20,083,872




                                                                  80
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECT FUNDS - CAPITAL OUTLAY & DEBT SERVICE (CO&DS)
For the Fiscal Year Ended June 30, 2009
                                                                                                                          Variance with
                                                                      Budgeted Amounts                    Actual          Final Budget -
                                                                Original               Final             Amounts          Over (Under)
REVENUES
Intergovernmental:
   State                                                    $       463,520    $          471,390    $      471,390   $
Local                                                                                       5,556             5,556
  Total Revenues                                                    463,520               476,946           476,946
EXPENDITURES
Current - Education:
     Facilities Acquisition and Construction                        797,810               797,810           322,186                475,624
Fixed Capital Outlay:
      Facilities Acquisition and Construction                       250,000               250,000                                  250,000
   Debt Service
      Dues, Fees and Issuance Costs                                                           953               953
   Total Expenditures                                             1,047,810             1,048,763           323,139                725,624
Excess (Deficiency) of Revenues Over (Under) Expenditures          (584,290)             (571,817)          153,807                725,624
 Net Change in Fund Balances                                       (584,290)             (571,817)          153,807                725,624
Fund Balances, July 1, 2008                                         759,732               759,732           759,732
Fund Balances, June 30, 2009                                $       175,442    $          187,915    $      913,539   $            725,624




                                                                   81
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECT FUNDS - CAPITAL IMPROVEMENT SECTION 1011.71(2) F.S.
For the Fiscal Year Ended June 30, 2009
                                                                                                                             Variance with
                                                                      Budgeted Amounts                    Actual             Final Budget -
                                                                Original               Final             Amounts             Over (Under)
REVENUES
Local                                                       $    47,279,531    $       46,618,332    $    46,347,867     $            (270,465)
  Total Revenues                                                 47,279,531            46,618,332         46,347,867                  (270,465)
EXPENDITURES
Current - Education:
    Facilities Acquisition and Construction                      12,360,122            10,567,562          4,294,228                 6,273,334
Fixed Capital Outlay:
      Facilities Acquisition and Construction                    21,968,796            22,587,941         10,932,246                11,655,695
      Other Capital Outlay                                        5,963,051             5,850,761          5,039,989                   810,772
   Total Expenditures                                            40,291,968            39,006,263         20,266,463                18,739,800
Excess (Deficiency) of Revenues Over (Under) Expenditures         6,987,563             7,612,068         26,081,404                19,010,265
OTHER FINANCING (USES)
Transfers In
Transfers Out                                                   (32,088,011)          (32,550,943)        (32,550,943)
 Net Change in Fund Balances                                    (25,100,448)          (24,938,875)         (6,469,539)              19,010,265
Fund Balances, July 1, 2008                                      34,742,985            34,742,985          34,742,985
Fund Balances, June 30, 2009                                $     9,642,537    $        9,804,110    $     28,273,446    $          19,010,265




                                                                  82
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECT FUNDS - OTHER CAPITAL PROJECTS
For the Fiscal Year Ended June 30, 2009
                                                                                                                             Variance with
                                                                      Budgeted Amounts                    Actual             Final Budget -
                                                                Original               Final             Amounts             Over (Under)
REVENUES
Intergovernmental:
   State                                                    $     3,433,500     $       3,104,542    $     3,104,542     $
Local                                                            21,509,085            11,553,273         11,473,406                   (79,867)
  Total Revenues                                                 24,942,585            14,657,815         14,577,948                   (79,867)
EXPENDITURES
Current - Education:
  Facilities Acquisition and Construction                        18,918,515            15,241,807          3,947,265               11,294,542
Fixed Capital Outlay:
      Facilities Acquisition and Construction                   143,882,300           134,148,482         78,138,482               56,010,000
      Other Capital Outlay                                        5,144,460             4,750,473          2,918,707                1,831,766
Debt Service:
  Dues, Fees and Issuance Costs                                                            45,885              45,885
   Total Expenditures                                            167,945,275          154,186,647          85,050,339              69,136,308
Excess (Deficiency) of Revenues Over (Under) Expenditures       (143,002,690)        (139,528,832)        (70,472,391)             69,056,441
OTHER FINANCING SOURCES (USES)
Transfers In                                                       3,487,577            1,916,287          1,916,287
Transfers Out                                                     (3,527,595)          (2,840,835)        (2,840,835)
   Total Other Financing Sources (Uses)                              (40,018)            (924,548)          (924,548)
 Net Change in Fund Balances                                    (143,042,708)        (140,453,380)       (71,396,939)              69,056,441
Fund Balances, July 1, 2008                                      211,665,714          211,665,714        211,665,714
Fund Balances, June 30, 2009                                $     68,623,006    $      71,212,334    $   140,268,775     $         69,056,441




                                                                  83
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS - NONMAJOR PROPRIETARY
June 30, 2009
                                            Self Insurance            Self Insurance        Total Internal
                                                 Trust                   AL/GL              Service Funds
ASSETS
Current Assets:
Cash and Cash Equivalents                $         7,520,767      $         4,286,350   $         11,807,117
Accounts Receivable                                   13,720                      420                 14,140
   Total Assets                          $         7,534,487      $         4,286,770   $         11,821,257

LIABILITIES
Current Liabilities:
Accounts Payable                             $          633,323   $                     $             633,323
Due to Other Funds                                      670,700                                       670,700
Estimated Unpaid Claims                               3,531,000             1,216,966               4,747,966
   Total Liabilities                                  4,835,023             1,216,966               6,051,989
NET ASSETS
Unrestricted                                          2,699,464             3,069,804              5,769,268
    Total Liabilities and Net Assets         $        7,534,487   $         4,286,770   $         11,821,257




                                                 84
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS - NONMAJOR PROPRIETARY
For the Fiscal Year Ended June 30, 2009
                                              Self Insurance     Self Insurance         Total Internal
                                                   Trust            AL/GL               Service Funds
OPERATING REVENUES
Premium Revenues                           $        46,154,274 $          940,886   $         47,095,160
Other Operating Revenues                                    20                                        20
  Total Operating Revenues                          46,154,294            940,886             47,095,180
OPERATING EXPENSES
Purchased Services                                   4,982,076                                 4,982,076
Materials and Supplies                                   2,558                                     2,558
Insurance Claims                                    38,661,903            375,566             39,037,469
  Total Operating Expenses                          43,646,537            375,566             44,022,103
Operating Income                                     2,507,757            565,320              3,073,077
NONOPERATING REVENUES
Interest Revenue                                           112             21,752                 21,864
  Total Nonoperating Revenues                              112             21,752                 21,864
Change In Net Assets                                 2,507,869            587,072              3,094,941
Net Assets - July 1, 2008                              191,595          2,482,732              2,674,327
Net Assets - June 30, 2009                 $         2,699,464 $        3,069,804   $          5,769,268




                                                85
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS - NONMAJOR PROPRIETARY
For the Fiscal Year Ended June 30, 2009
                                                                                   Self Insurance          Self Insurance          Total Internal
                                                                                        Trust                 AL/GL                Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
  Cash Received from Board Funds and Participants                          $            43,094,572     $           940,886     $          44,035,458
  Cash Payments to Vendors for Goods and Services                                      (43,617,302)               (208,656)              (43,825,958)
 Net Cash Provided by Operating Activities                                                (522,730)                732,230                   209,500
CASH FLOWS FROM INVESTING ACTIVITIES
  Interest Income                                                                              112                  21,752                    21,864
  Net Cash Provided by Investing Activities                                                    112                  21,752                    21,864
Net Increase in Cash and Cash Equivalents                                                 (522,618)                753,982                   231,364
Cash and Cash Equivalents - Beginning                                                    8,043,384               3,532,369                11,575,753
Cash and Cash Equivalents - Ending                                         $             7,520,766     $         4,286,351     $          11,807,117

Reconciliation of Operating Income to Net Cash Provided by Operating Activities:
Operating Income                                                          $              2,507,757     $           565,320     $           3,073,077
Adjustments to Reconcile Operating Loss to Net Cash
 Provided by Operating Activities:
 Changes in Assets and Liabilities:
    Increase in Accounts Receivable                                                          (2,489)                   (420)                  (2,909)
    Decrease in Due to Other Funds                                                       (3,059,722)                                      (3,059,722)
    Decrease in Accounts Payable                                                           (452,275)                                        (452,275)
    Increase in Estimated Insurance Claims Payable                                          483,999                167,330                   651,329
    Total Adjustments                                                                    (3,030,487)               166,910                (2,863,577)
Net Cash Provided by Operating Activities                                 $                (522,730)   $           732,230     $             209,500




                                                                     86
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
SCHOOL INTERNAL FUNDS AGENCY FUND
For the Fiscal Year Ended June 30, 2009

                                      Agency Fund                                                       Agency Fund
                                        Balances                                                          Balances
                                      July 1, 2008              Additions           Deductions          June 30, 2009
ASSETS
Cash and Cash Equivalents         $        2,909,839        $       8,018,242   $       8,205,268   $          2,722,813
Accounts Receivable                           11,614                    8,294              11,614                  8,294
Due from School Board                                                  15,967                                     15,967
 Total Assets                     $        2,921,453        $       8,042,503   $       8,216,882   $          2,747,074

LIABILITIES
Accounts Payable                  $           86,013        $          13,553   $          86,013   $             13,553
Due to School Board                                                   152,383                                    152,383
Internal Accounts Payable                  2,835,440                7,876,567           8,130,869              2,581,138
 Total Liabilities                $        2,921,453        $       8,042,503   $       8,216,882   $          2,747,074




                                                       87
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
BELLALAGO CHARTER ACADEMY AGENCY FUND
For the Fiscal Year Ended June 30, 2009

                                          Agency Fund                                                       Agency Fund
                                            Balances                                                          Balances
                                          July 1, 2008              Additions           Deductions          June 30, 2009
ASSETS
Cash and Cash Equivalents             $        1,576,932        $      10,108,518   $       9,938,066   $          1,747,384
Accounts Receivable                                                           341                                        341
 Total Assets                         $        1,576,932        $      10,108,859   $       9,938,066   $          1,747,725

LIABILITIES
Salaries and Benefits Payable         $           13,214        $       4,542,570   $       4,547,007   $              8,777
Payroll Deductions and Withholdings               13,897                2,061,048           2,072,883                  2,062
Accounts Payable                               1,549,821                1,517,671           1,330,606              1,736,886
 Total Liabilities                    $        1,576,932        $       8,121,289   $       7,950,496   $          1,747,725




                                                           88
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
BELLALAGO EDUCATIONAL FACILITIES BENEFIT DISTRICT AGENCY FUND
For the Fiscal Year Ended June 30, 2009

                                      Agency Fund                                                      Agency Fund
                                        Balances                                                         Balances
                                      July 1, 2008              Additions             Deductions       June 30, 2009
ASSETS
Cash and Cash Equivalents         $           28,320        $               212   $                $             28,532
Accounts Receivable                                                           4                                       4
 Total Assets                     $           28,320        $               216   $                $             28,536

LIABILITIES
Accounts Payable                  $           28,320        $               216   $                $             28,536
 Total Liabilities                $           28,320        $               216   $                $             28,536




                                                       89
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
For the Fiscal Year Ended June 30, 2009

                                          Agency Fund                                                       Agency Fund
                                            Balances                                                          Balances
                                          July 1, 2008              Additions           Deductions          June 30, 2009
ASSETS
Cash and Cash Equivalents             $        4,515,091        $      18,126,972   $      18,143,334   $          4,498,729
Accounts Receivable                               11,614                    8,639              11,614                  8,639
Due from School Board                                                      15,967                                     15,967
 Total Assets                         $        4,526,705        $      18,151,578   $      18,154,948   $          4,523,335

LIABILITIES
Salaries and Benefits Payable         $           13,214        $       4,542,570   $       4,547,007   $              8,777
Payroll Deductions and Withholdings               13,897                2,061,048           2,072,883                  2,062
Accounts Payable                               1,664,154                1,531,440           1,416,619              1,778,975
Due to School Board                                                       152,383                                    152,383
Internal Accounts Payable                      2,835,440                7,876,567           8,130,869              2,581,138
 Total Liabilities                    $        4,526,705        $      16,164,008   $      16,167,378   $          4,523,335




                                                           90
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
STATEMENT OF NET ASSETS
COMBINING STATEMENT OF COMPONENT UNITS
June 30, 2009



                                                                Bellalago           Flora Ridge                                                         New
                                                               Educational          Educational          The Foundation         Four Corners        Dimensions             Total
                                                                Facilities           Facilities            for Osceola         Charter School,     Charter School,       Component
ASSETS                                                        Benefit District     Benefit District      Education, Inc.            Inc.                Inc.               Units
Cash and Cash Equivalents                                   $       3,096,275    $         885,964     $        4,250,140    $       3,262,941   $         893,079   $     12,388,399
Investments                                                         1,972,172                                                                                               1,972,172
Accounts Receivable                                                   267,260                 26,253           1,545,488                17,263              24,474          1,880,738
Prepaid Items                                                                                                      9,839                                                        9,839
Interest Receivable                                                    30,298                  1,343                                                                           31,641
Deposits Receivable                                                                                                                                          8,771              8,771
Due from Other Agencies                                              1,146,970                                                                                              1,146,970
Deferred Charges                                                       534,210             401,648               851,040                                                    1,786,898
Restricted Assets:
      Cash with Fiscal Agent                                                                                   2,596,304                                                     2,596,304
Capital Assets:
        Land                                                         1,000,000                                   238,220                                   275,000           1,513,220
        Improvements Other Than Buildings, Net                         255,000                                                          15,510              20,131             290,641
        Buildings and Fixed Equipment, Net                          20,686,027                                11,950,023                69,155           2,369,290          35,074,495
        Furniture, Fixtures and Equipment, Net                       1,057,346                                   377,288                28,202              35,425           1,498,261
        Motor Vehicles, Net                                                                                                                                  6,497               6,497
        Audio Visual Materials and Computer Software, Net                                                        195,460                    22              47,196             242,678
             Total Assets                                   $       30,045,558   $        1,315,208    $      22,013,802     $       3,393,093   $       3,679,863   $      60,447,524

LIABILITIES
Payroll Deductions and Withholdings                         $                    $                     $                     $                   $         149,347   $         149,347
Accounts Payable                                                       12,283               16,261             1,095,265               307,950               9,679           1,441,438
Accrued Interest Payable                                              656,063              164,742               330,527                                     3,812           1,155,144
Due to Other Agencies                                                                       20,000             1,357,748                                                     1,377,748
Deferred Revenue                                                       27,660                                                                                                   27,660
Long-Term Liabilities:
 Portion Due Within One Year:
      Obligations Under Capital Leases                                                                                                                       4,286              4,286
      Bonds Payable                                                   470,000                 10,000             405,000                                                      885,000
      Notes Payable                                                                                                                                        194,343            194,343
 Portion Due After One Year:
      Bonds Payable                                                 26,149,344            7,414,669           15,826,242                                                    49,390,255
      Notes Payable                                                                                                                                        436,090             436,090
             Total Liabilities                                      27,315,350            7,625,672           19,014,782               307,950             797,557          55,061,311
NET ASSETS
Invested in Capital Assets, Net of Related Debt                                                                (3,470,251)             112,889           1,944,175          (1,413,187)
Restricted For:
      Capital Projects                                                                                                                                      50,539              50,539
      Other Purposes                                                                                           1,471,761                                                     1,471,761
Unrestricted                                                         2,730,208           (6,310,464)           4,997,510             2,972,254             887,592           5,277,100
             Total Net Assets                                        2,730,208           (6,310,464)           2,999,020             3,085,143           2,882,306           5,386,213
Total Liabilities and Net Assets                            $       30,045,558   $        1,315,208    $      22,013,802     $       3,393,093   $       3,679,863   $      60,447,524




                                                                                         91
     DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
     STATEMENT OF ACTIVITIES
     COMBINING STATEMENT OF COMPONENT UNITS
     For the Fiscal Year Ended June 30, 2009

                                                           Bellalago               Flora Ridge
                                                          Educational              Educational            The Foundation          Four Corners          New Dimensions
                                                        Facilities Benefit       Facilities Benefit         for Osceola          Charter School,        Charter School,         Total Component
                                                             District                 District            Education, Inc.             Inc.                   Inc.                     Units
     Component Unit Activities:
          Instruction                               $                        $                        $        10,576,918    $         4,409,025    $         1,383,368     $         16,369,311
          Instruction and Curriculum Development                                                                                                                    275                      275
          Instructional Staff Training Services                                                                                                                   1,700                    1,700
          Board                                                    27,347                   29,531                                         9,161                    605                   66,644
          General Administration                                                                                                         627,116                100,894                  728,010
          School Administration                                                                                 2,977,419                                       327,973                3,305,392
          Facilities Acquisition and Construction                845,543                    15,147                657,747              1,127,021                 98,818                2,744,276
          Fiscal Services                                         20,000                    20,000                                                                                        40,000
          Pupil Transportation Services                                                                                                                          59,282                   59,282
          Operation of Plant                                                                                    3,028,481                                        60,193                3,088,674
          Maintenance of Plant                                                                                                                                   45,754                   45,754
          Community Services                                                             1,576,576              2,089,768                                                              3,666,344




92
          Interest on Long Term Debt                            1,723,048                  395,380                798,057                                        71,618                2,988,103
               Total Expenses                                   2,615,938                2,036,634             20,128,390              6,172,323              2,150,480               33,103,765
      Program Revenues
          Charges for Services                                                                                     74,100                                        32,482                  106,582
          Operating Grants and Contributions                                                                    3,695,331                                                              3,695,331
          Capital Grants and Contributions                                               1,767,801                                       555,426                 276,039               2,599,266
               Net (Expenses) Revenue                          (2,615,938)                (268,833)           (16,358,959)            (5,616,897)             (1,841,959)            (26,702,586)
      General Revenues
          Grants and Contributions
            not restricted to specific programs                 1,546,670                 422,118              15,797,286              5,761,716              2,045,474               25,573,264
          Investment Earnings                                     192,768                  24,726                 120,483                 25,559                  7,323                  370,859
          Miscellaneous                                                                 1,576,576                 690,214                                                              2,266,790
          Special Items                                                               (18,091,123)                                                                                   (18,091,123)
               Total General Revenues                           1,739,438             (16,067,703)             16,607,983              5,787,275              2,052,797               10,119,790
     Change in Net Assets                                        (876,500)            (16,336,536)                249,024                170,378                210,838              (16,582,796)
     Net Assets - beginning                                     3,606,708              10,026,072               2,749,996              2,914,765              2,671,468               21,969,009
     Net Assets - ending                            $           2,730,208    $         (6,310,464)    $         2,999,020    $         3,085,143    $         2,882,306     $          5,386,213
STATISTICAL SECTION
Introduction to the Statistical Section
This part of the District's comprehensive annual financial report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures, and
required supplementary information says about the District's overall financial health.


Financial Trends
                      These schedules contain trend information to help the reader understand how
                      the District's financial performance and well-being have changed over time.

                      Schedule 1        Net Assets by Component
                      Schedule 2        Changes in Net Assets
                      Schedule 3        General Revenues and Total Changes in Net Assets
                      Schedule 4        Fund Balances, Governmental Funds
                      Schedule 5        Governmental Funds Revenues
                      Schedule 6        Governmental Funds Expenditures and Debt Service Ratio
                      Schedule 7        Other Financing Sources and Uses and Net Change in Fund Balances

Revenue Capacity
               These schedules contain information to help the reader assess the District's
               most significant local revenue source, the property tax.

                      Schedule 8        Assessed Value and Estimated Actual Value of Taxable Property
                      Schedule 9        Direct and Overlapping Property Tax Rates
                      Schedule 10       Principal Osceola County Property Tax Payers
                      Schedule 11       Property Tax Levies and Collections

Debt Capacity
                      These schedules present information to help the reader assess the
                      affordability of the District's current levels of outstanding debt and the
                      District's ability to issue additional debt in the future.

                      Schedule 12       Outstanding Debt by Type
                      Schedule 13       Direct and Overlapping Governmental Activities Debt
                      Schedule 14       Legal Debt Margin Information
                      Schedule 15       Pledged-Revenue Coverage


Demographic and Economic Information
              These schedules offer demographic and economic indicators to help the
              reader understand the environment within which the District's financial
              activities take place.

                      Schedule 16       Demographic and Economic Statistics
                      Schedule 17       Osceola County Principal Employers

Operating Information
                These schedules contain service and infrastructure data to help the reader
                understand how the information in the District's financial report relates to the
                services the District provides and the activities it performs.

                      Schedule 18       Full-time-Equivalent District Employees by Type
                      Schedule 19       Operating Statistics
                      Schedule 20       Teacher Salaries
                      Schedule 21       School Building Information

Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year. The District implemented GASB
Statement 34 with the fiscal year beginning July 1, 2001; therefore, schedules presenting
government-wide information include information beginning with June 30, 2002.
                                                              93
Schedule 1
District School Board of Osceola County
Net Assets by Component - Primary Government
Last Eight Fiscal Years (A)
(accrual basis of accounting)
Unaudited



                                                                                  For the Fiscal Year ending June 30
                                                           2002                      2003                      2004
Governmental Activities
  Invested in capital assets, net of related debt   $      170,306,903      $         192,547,413      $       196,477,250
  Restricted                                                34,248,107                 39,066,898               69,958,909
  Unrestricted                                               5,618,611                 11,781,741               15,426,993

Total governmental activities net assets            $      210,173,621      $         243,396,052      $       281,863,152




Note: (A) The district began to report accrual information when it implemented GASB Statement 34 in 2002.



Source:
  District records




                                                                  94
    2005              2006              2007              2008              2009

$   222,190,069   $   266,793,746   $   306,948,191   $   354,211,777   $   438,988,320
    109,140,237       119,218,431       144,452,132       220,147,769       155,942,301
     22,008,531        31,290,686        41,579,693        27,348,239        22,289,318

$   353,338,837   $   417,302,863   $   492,980,016   $   601,707,785   $   617,219,939




                                        95
Schedule 2
District School Board of Osceola County
Changes in Net Assets - Primary Government
Last Eight Fiscal Years (A)
(accrual basis of accounting)
Unaudited

                                                                                   For the Fiscal Year ending June 30
                                                             2002                       2003                   2004               2005
Primary Government:
Expenses
 Governmental activities:
  Instruction                                        $     117,374,025         $      129,183,723     $     151,791,603     $   175,571,358
  Pupil personnel services                                  13,230,530                 13,719,751            15,103,776          16,119,414
  Instructional media services                               3,897,297                  3,690,905             4,388,317           4,163,815
  Instruction and curriculum development services           12,926,856                 12,482,618            14,294,346          15,828,787
  Instructional staff training services                      2,127,850                  2,218,777             2,921,221           5,109,676
  Instruction related technology
  Board of education                                         1,335,600                  1,372,148             1,645,425           1,285,843
  General administration                                     1,829,476                  1,559,762             2,665,768           2,256,900
  School administration                                     11,476,453                 12,456,098            13,526,338          14,785,560
  Facilities acquisition and construction                   18,157,268                  9,051,649            12,051,652          14,678,682
  Fiscal services                                            1,284,357                  1,275,696             1,348,845           1,268,262
  Food services                                             10,628,225                 11,853,765            13,268,560          15,822,309
  Central services                                           9,193,049                  7,005,304             7,726,064           7,698,586
  Pupil transportation services                              9,349,212                 11,006,137            12,746,417          15,176,499
  Operation of plant                                        14,202,118                 17,498,573            17,478,299          26,500,887
  Maintenance of plant                                       6,274,892                  4,461,889             5,169,937           5,136,806
  Administrative technology services
  Community services                                         1,460,520                  1,782,642             1,841,101           1,982,934
  Interest on long-term debt                                 9,310,186                 13,182,368            12,928,476          14,312,804
  Loss on disposal of capital assets                            27,562                     72,112               151,948             346,800
  Unallocated depreciation/amortization                     13,382,525                 16,448,337            17,884,480          21,895,591

Total expenses - Primary Government                  $     257,468,001         $      270,322,254     $     308,932,573     $   359,941,513

Program Revenues
Governmental Activities
Charges for Services
  Instruction                                                2,082,903                  2,704,575              2,842,166           3,130,251
  Food services                                              4,554,524                  4,969,088              5,246,692           5,524,431
  Central services                                           2,867,462
  Pupil transportation services                                167,049                    154,846               144,614            2,124,247
  Community services
Operating Grants and Contributions
  Food services                                              6,811,768                  7,736,281              9,415,803         10,988,391
  Pupil transportation services                              6,725,842                  7,597,898              8,157,374          8,095,754
Capital Grants and Contributions
  Facilities acquisition and construction                   12,616,860                 16,698,060            30,314,568          74,103,881
  Maintenance of plant
  Interest on long-term debt                                 4,943,241                  1,223,763              1,373,681           1,487,504

Total Program Revenues - Primary Government         $       40,769,649     $           41,084,511     $      57,494,898     $   105,454,459

Net (Expense)/Revenue - Primary Government          $     (216,698,352)    $         (229,237,743)    $     (251,437,675)   $   (254,487,054)




Note: (A) The district began to report accrual information when it implemented GASB Statement 34 in 2002.



Source:
  District records
                                                                          96
      2006                2007                2008                    2009




$   198,468,516     $   232,617,922     $   261,976,401     $        243,009,744
     18,442,786          20,886,005          24,153,125               23,755,838
      4,835,861           5,161,195           6,059,524                5,292,967
     16,961,003          22,429,022          23,464,063               20,144,676
      6,011,555           4,569,743           9,507,952                6,556,067
      3,512,400           3,946,935           4,373,774                4,534,355
      1,419,189           1,823,925           2,179,387                1,594,329
      2,575,054           2,228,563           2,589,737                2,988,478
     17,214,383          19,747,072          22,649,997               20,969,528
     16,612,944          16,584,696          19,814,471               15,224,107
      1,601,831           1,887,436           2,062,828                1,872,802
     18,965,217          20,795,040          25,147,719               22,822,423
      5,941,266           6,536,936           7,135,483                6,693,873
     17,657,424          19,413,234          21,620,725               21,163,277
     24,722,169          27,205,818          31,115,952               29,917,708
      7,570,851           7,968,053           8,896,778                8,415,184
      3,188,644           2,949,505           3,604,125                3,435,841
      2,262,183           3,487,806           3,798,924                3,670,126
     14,760,893          12,752,067          15,859,473               15,144,497
        308,966                                                          963,035
     22,312,499          24,223,111          27,626,338               28,832,502

$   405,345,634     $   457,214,084     $   523,636,776     $        487,001,357




       1,123,318           1,421,447           1,426,889               1,577,484
       6,437,902           7,100,817           6,861,017               6,905,070

         141,429             172,377             190,009                 470,324
       2,028,638           2,236,882           2,568,696               2,572,933

     12,144,814          13,391,527          14,897,448               15,988,714
     10,364,641           9,701,290           9,633,899                9,315,616

     48,575,015          48,636,658         120,851,798               11,622,121
                          2,059,611                                   10,719,386
       1,581,675          1,767,682            1,758,040                  20,557

$    82,397,432     $    86,488,291     $   158,187,796     $         59,192,205

$   (322,948,202)   $   (370,725,793)   $   (365,448,980)   $    (427,809,152)




                                                                97
Schedule 3
District School Board of Osceola County
General Revenues and Total Changes in Net Assets
Last Eight Fiscal Years (A)
(accrual basis of accounting)
Unaudited

                                                                                              For the Fiscal Year ending June 30
                                                                        2002                      2003                     2004               2005

Net (Expense)/Revenue - Primary Government                      $      (216,698,352)     $       (229,237,743)    $      (251,437,675)   $   (254,487,054)

General Revenues and Changes in Net Assets
 Taxes:
  Property taxes, levied for operational purposes                        60,474,039                68,971,530             75,677,603          81,989,285
  Property taxes, levied for debt service                                 3,810,309                 3,700,228              3,729,032           3,753,855
  Property taxes, levied for capital projects                            18,707,937                21,329,126             23,360,298          26,321,324
  Local sales taxes                                                       2,760,320                 2,704,202              3,031,802           3,704,309
 Grants and contributions not restricted to specific programs           131,760,786               157,529,074            176,317,825         200,943,463
 Investment earnings                                                      2,991,659                 1,675,033              1,405,504           4,344,278
 Miscellaneous                                                            5,210,967                 6,550,981              6,382,712           4,906,224

Total General Revenues - Primary Government                     $       225,716,017      $        262,460,174     $      289,904,776     $   325,962,738

Changes in Net Assets - Primary Government                      $         9,017,665      $         33,222,431     $       38,467,101     $    71,475,684


Note: (A) The district began to report accrual information when it implemented GASB Statement 34 in 2002.



Source:
  District records




                                                                                 98
    2006                 2007                2008                     2009

$   (322,948,202)   $   (370,725,793)   $   (365,448,980)   $        (427,809,152)




     95,898,951         121,689,421         145,250,546              151,594,547
      3,728,353               7,326                                        1,671
     31,289,374          42,088,335          50,327,124               46,094,101
      7,948,681           9,998,541          10,292,844                9,143,244
    225,092,552         248,564,737         248,186,167              223,928,922
      8,893,900          12,932,806           9,128,755                3,253,100
     13,956,269          11,121,780          10,991,313                9,305,721

$   386,808,080     $   446,402,946     $   474,176,749     $        443,321,306

$    63,859,878     $    75,677,153     $   108,727,769     $         15,512,154




                                                                99
Schedule 4
District School Board of Osceola County
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Unaudited
                                                               For the Fiscal Year Ending June 30
                                              2000                   2001                 2002            2003

General Fund
 Reserved                                 $    2,342,231   $        2,164,960     $       1,691,963   $    2,176,084
 Unreserved                                   10,937,734           13,976,235            14,822,596       18,989,026

Total General Fund                        $   13,279,965   $       16,141,195     $      16,514,559   $   21,165,110


All Other Governmental Funds
 Reserved                                 $   20,196,482   $       28,083,768     $      36,230,343   $   38,671,458
 Unreserved, reported in:
    Special Revenue Funds                      2,305,859            2,623,372             3,341,690        4,031,399
    Debt Service Funds                         1,693,330            2,044,836
    Capital Projects Funds                    30,367,625           38,047,002            30,962,590       32,204,521


Total All Other Governmental Funds        $   54,563,296   $       70,798,978     $      70,534,623   $   74,907,378


Total Governmental Funds                  $   67,843,261   $       86,940,173     $      87,049,182   $   96,072,488




Source:
  District records




                                                           100
     2004              2005              2006                    2007              2008              2009


$     3,422,216   $     3,618,175   $     2,453,921         $     2,468,816   $     2,270,876   $    15,237,098
     17,877,768        14,725,944        33,914,236              52,649,019        52,509,629        44,255,581

$    21,299,984   $    18,344,119   $    36,368,157         $    55,117,835   $    54,780,505   $    59,492,679




$    25,453,942   $    61,106,271   $    74,955,676         $    40,229,851   $    91,963,365   $    29,301,405

      5,238,715         5,261,266         5,087,682               4,646,100         2,127,479         2,604,232

     48,826,552       110,706,784        84,968,747             163,800,199       179,803,063       164,404,065


$    79,519,209   $   177,074,321   $   165,012,105         $   208,676,150   $   273,893,907   $   196,309,702


$   100,819,193   $   195,418,440   $   201,380,262         $   263,793,985   $   328,674,412   $   255,802,381




                                                      101
Schedule 5
District School Board of Osceola County
Governmental Funds Revenues
Last Ten Fiscal Years
(modified accrual basis of accounting)
Unaudited
                                                      For the Fiscal Year Ending June 30
                                          2000               2001               2002             2003

Revenues
  Federal direct                    $       232,894   $       421,367   $       394,614    $       502,588
  Federal through state and local        12,858,164        17,488,567        19,428,970         25,126,714
  State sources                         143,714,846       130,306,551       132,422,549        154,886,649
  Local sources                          85,909,578        98,070,757       111,316,789        120,567,914

      Total revenues                $   242,715,482   $   246,287,242   $   263,562,922    $   301,083,865




Source:
  District records




                                                           102
      2004              2005              2006                2007              2008              2009


$       524,778   $       538,586   $       507,224   $       1,053,161   $     1,850,561   $     3,544,576
     28,130,728        33,514,246        41,607,113          38,267,515        43,185,868        44,917,130
    178,249,029       211,747,093       227,589,538         244,655,637       320,426,143       214,028,791
    139,787,849       174,534,294       203,133,467         244,404,884       258,384,589       239,855,958

$   346,692,384   $   420,334,219   $   472,837,342   $     528,381,197   $   623,847,161   $   502,346,455




                                                      103
Schedule 6
District School Board of Osceola County
Governmental Funds Expenditures and Debt Service Ratio
Last Ten Fiscal Years
(modified accrual basis of accounting)
Unaudited
                                                                                  For the Fiscal Year Ending June 30
                                                         2000                         2001                     2002             2003

Expenditures
  Instruction                                       $     91,557,807          $      106,243,124     $        117,079,631   $   130,420,875
  Pupil personnel services                                10,413,185                  11,961,662               13,112,326        13,936,383
  Instructional media services                             3,043,367                   3,341,836                3,842,829         3,744,022
  Instruction and curriculum development services          9,408,184                  11,527,749               12,771,611        12,658,370
  Instructional staff training services                    1,506,512                   2,085,825                2,146,962         2,218,607
  Instruction related technology
  Board of Education                                       1,140,373                   1,344,231                1,333,677         1,378,541
  General administration                                   1,288,411                   3,437,187                1,786,685         1,568,707
  School administration                                    9,888,930                  10,616,101               11,256,991        12,578,340
  Facilities acquisition and construction                 15,079,171                  20,772,335               18,146,087         9,047,754
  Fiscal services                                            937,582                   1,126,374                1,266,688         1,279,620
  Food services                                            8,356,361                   9,331,625               10,632,834        11,885,242
  Central services                                         5,377,626                   6,228,655                6,292,786         7,035,623
  Pupil transportation services                            6,690,182                   7,950,655                8,429,705         9,926,767
  Operation of plant                                      12,238,131                  13,346,190               14,160,088        17,615,832
  Maintenance of plant                                     3,562,173                   4,087,950                6,240,084         4,476,170
  Administrative technology services
  Community services                                       1,248,204                   1,215,656                1,450,218         1,806,161
 Capital outlay
  Facilities acquisition and construction                 70,595,550                  32,572,912               66,719,184        65,330,740
  Other capital outlay                                     3,979,253                   6,132,858                4,396,413         4,644,487
 Debt service
  Principal                                                6,035,721                  10,479,727               16,089,358        10,667,185
  Interest and fees                                        6,747,774                   7,614,412               10,102,410        12,644,549

 Total expenditures                                 $    269,094,497          $      271,417,064     $        327,256,567   $   334,863,975




Debt Service as a Percentage
 of Noncapital Expenditures                                     7.03%                      8.43%                  11.39%               9.65%




Source:
  District records




                                                                        104
    2004               2005               2006                 2007               2008               2009


$   154,305,607    $   177,377,831    $   195,786,614    $     228,926,351    $   252,436,907    $   242,419,425
     15,381,152         16,435,466         18,082,451           20,467,855         23,004,870         23,775,514
      4,457,309          4,241,207          4,772,082            5,083,212          5,860,992          5,308,109
     14,471,465         16,094,907         16,700,234           21,798,585         22,507,401         20,161,819
      2,927,494          5,078,031          5,958,714            4,624,539          9,150,787          6,589,861
                                            3,380,672            3,884,887          4,151,534          4,514,440
      1,648,558          1,290,353          1,414,978            1,823,258          2,150,486          1,596,656
      2,613,238          2,270,644          2,526,892            2,186,576          2,605,401          2,991,604
     13,762,428         14,874,908         16,704,133           19,189,405         21,535,497         21,017,289
     12,054,265         14,723,275         16,580,781           16,535,413         19,708,502         15,195,444
      1,380,748          1,251,447          1,534,493            1,870,512          2,028,443          1,840,274
     13,366,460         15,930,723         18,828,603           20,563,324         24,583,165         22,795,237
      7,807,327          7,758,248          5,863,915            6,470,672          6,773,727          6,656,102
     11,541,466         13,948,013         15,598,236           17,014,402         18,468,240         17,861,972
     18,245,493         27,017,226         24,784,882           27,710,926         30,798,725         30,466,641
      5,205,591          5,216,672          7,419,369            7,809,981          8,512,770          8,366,744
                                            3,038,578            2,860,025          3,439,879          3,431,664
      1,860,842          2,004,318          2,236,213            3,397,490          3,666,415          3,680,873

     33,461,068         40,545,616         62,304,787           73,466,105         51,547,603         97,801,621
     10,123,806          9,862,578         13,907,537            6,092,674         14,507,098          9,803,355

     10,030,498         13,444,462         17,176,291           19,293,444         16,271,911         14,186,717
     12,749,442         13,309,796         14,204,319           14,379,361         15,473,269         14,819,480

$   347,394,257    $   402,675,721    $   468,804,774    $     525,448,997    $   559,183,622    $   575,280,841




           8.11%              8.22%              8.69%                8.17%              6.88%              6.61%




                                                         105
Schedule 7
District School Board of Osceola County
Other Financing Sources and Uses and Net Change in Fund Balances
Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Unaudited

                                                 For the Fiscal Year Ending June 30
                                    2000                2001              2002               2003

Excess of revenues over
 (under) expenditures         $   (26,379,015)   $   (25,129,822)   $   (63,693,645)   $   (33,780,110)


Other Financing Sources           36,714,256         56,370,559         97,057,827         62,436,302

Other Financing Uses               8,014,477         12,140,009         33,255,171         19,632,886



Net change in fund balances   $    2,320,764     $   19,100,728     $      109,011     $    9,023,306




Source:
  District records




                                                             106
      2004               2005             2006                 2007          2008             2009


$     (701,873)   $    17,658,498   $    4,032,568   $     2,932,200   $   64,663,539   $   (72,934,386)


    20,896,262        131,626,971       66,941,168       154,306,121       35,948,759       37,734,305

    15,447,684         54,686,222       64,898,617        94,824,598       35,731,871       37,671,950



$    4,746,705    $    94,599,247   $    6,075,119   $    62,413,723   $   64,880,427   $   (72,872,031)




                                                         107
Schedule 8
District School Board of Osceola County
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Unaudited



                                     Real Property                                        Personal Property
   Fiscal                                              Estimated                                              Estimated
   Year               Assessed Value                   Actual Value            Assessed Value                 Actual Value

    1999                     6,065,185,546                6,201,621,213                846,870,659                865,920,919
    2000                     6,638,571,770                6,767,147,574                897,938,893                915,330,166
    2001                     7,470,361,984                7,545,820,186                947,490,882                957,061,497
    2002                     8,664,276,021                8,823,091,671              1,044,166,546              1,063,306,055
    2003                     9,814,249,330               10,309,085,431              1,177,810,970              1,237,196,397
    2004                    10,761,639,276               11,198,375,938              1,278,295,594              1,330,172,314
    2005                    12,259,604,996               12,986,869,699              1,326,423,191              1,405,109,313
    2006                    14,717,777,890               15,283,258,453              1,420,128,367              1,474,691,970
    2007                    20,226,913,679               22,154,341,379              1,570,992,956              1,720,693,271
    2008                    24,673,342,157               25,228,366,214              1,652,151,178              1,689,316,133




Note: Centrally assessed property consists of railroad and telegraph systems
      which are assessed by the State of Florida.


(1) Per $1,000 of assessed value



Source:
  Osceola County Comprehensive Annual Financial Report, FYE 9/30/08




                                                                      108
      Centrally Assessed Property                               Total                      Total
                             Estimated                                  Estimated         Direct
Assessed Value               Actual Value      Assessed Value           Actual Value      Rate (1)

          4,020,542                4,110,984         6,916,076,747        7,071,653,116       9.773
          4,015,909                4,093,689         7,540,526,572        7,686,571,429       9.270
          3,680,145                3,717,318         8,421,533,011        8,506,599,001       9.231
          3,271,804                3,331,776         9,711,714,371        9,889,729,502       8.871
          3,399,674                3,571,086        10,995,459,974       11,549,852,914       8.812
          5,426,045                5,646,249        12,045,360,915       12,534,194,501       8.798
          6,181,316                6,548,004        13,592,209,503       14,398,527,016       8.514
          3,790,135                3,935,758        16,141,696,392       16,761,886,181       8.367
          4,562,834                4,997,628        21,802,469,469       23,880,032,278       7.782
          4,495,045                4,596,161        26,329,988,380       26,922,278,508       7.772




                                                    109
Schedule 9
District School Board of Osceola County
Direct and Overlapping Property Tax Rates
Last Ten Levy Years
(rate per $1,000 of assessed value)
Unaudited

                                                                                                                                                 Overlapping
                                                                  District Direct Rates                                                             Rates
                         Required                                                                              Voted
     Levy                 Local            Capital             Basic                 Supplemental               Debt        Total                  Osceola
     Year                 Effort           Outlay           Discretionary            Discretionary             Service      Direct                 County

      1999                       6.473          2.000                 0.510                     0.230              0.560          9.773                 6.495
      2000                       6.078          2.000                 0.510                     0.216              0.466          9.270                 6.495
      2001                       6.000          2.000                 0.510                     0.207              0.514          9.231                 6.495
      2002                       5.758          2.000                 0.510                     0.196              0.407          8.871                 6.495
      2003                       5.761          2.000                 0.510                     0.195              0.346          8.812                 6.495
      2004                       5.784          2.000                 0.510                     0.185              0.319          8.798                 6.495
      2005                       5.540          2.000                 0.510                     0.179              0.285          8.514                 6.495
      2006                       5.369          2.000                 0.510                     0.250              0.238          8.367                 6.745
      2007                       5.022          2.000                 0.510                     0.250               -             7.782                 6.745
      2008                       5.052          2.000                 0.510                     0.210               -             7.772                 5.736




Source:
  District records
  Osceola County Comprehensive Annual Financial Report, FYE 9/30/08




                                                        County and School District Millages

                11.0
                10.0
                  9.0
                  8.0
                  7.0
                  6.0
                  5.0
                  4.0
                              1999       2000        2001      2002           2003       2004           2005       2006    2007           2008

                                                               Osceola School District            Osceola County




                                                                              110
Schedule 10
District School Board of Osceola County
Principal Osceola County Property Tax Payers
September 30, 2008 and Nine Years Earlier
Unaudited
                                                           September 30, 2008                              September 30, 1999
                                                                            Percentage of                                   Percentage of
                                                  Taxable                   Total Taxable         Taxable                   Total Taxable
                                                  Assessed                    Assessed            Assessed                    Assessed
                Taxpayer                           Value         Rank           Value              Value         Rank           Value

Central Florida Investments               $          761,697,159      1               2.89%   $      246,626,000   2                  3.27%
The Walt Disney Company                              600,682,113      2               2.28%          501,873,000   1                  6.66%
G.P. Limited Partnership                             302,165,335      3               1.15%
Fairfield Communities                                272,744,661      4               1.04%           40,190,000   9                  0.53%
Tempus Palms International                           269,241,064      5               1.02%
Progress Energy                                      227,030,248      6               0.86%          116,883,000   3                  1.55%
Lando Resorts Corporation                            221,960,564      7               0.84%                                           0.00%
Reliant Energy Osceola, LLC                          155,327,625      8               0.59%
Ginn-LA Orlando Ltd LLP                              134,610,898      9               0.51%
Silver Lake Resort, Ltd.                             128,436,931      10              0.49%
Sprint Communications Co LP                                                                           82,402,000   4                  1.09%
Star Island Development Corporation                                                                   63,479,000   5                  0.84%
Osceola Regional Hospital                                                                             45,589,000   6                  0.60%
First Continental Corporation                                                                         42,106,000   7                  0.56%
Orlando Hyatt                                                                                         40,279,000   8                  0.53%
Orlando Resort Development Group                                                                      38,560,000   10                 0.51%

Total taxable assessed value                       3,073,896,598                     11.67%        1,217,987,000                     16.15%
  ten largest taxpayers

Total taxable assessed value                      23,256,091,782                     88.33%        6,322,540,000                     83.85%
  all other taxpayers

Total taxable assessed value              $       26,329,988,380                    100.00%   $    7,540,527,000                    100.00%
  all taxpayers



Source:
  Osceola County Comprehensive Annual Financial Report, FYE 9/30/08




                                                                           111
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               112
Schedule 11
District School Board of Osceola County
Property Tax Levies and Collections
Last Ten Fiscal Years
Unaudited


                                                     Collected with the
                       Taxes Levied                Fiscal Year of the Levy                    Collections in      Total Collections to Date
  Fiscal                  for the                                  Percentage                  Subsequent                          Percentage
  Year                  Fiscal Year               Amount             of Levy                      Years          Amount              of Levy

   2000                    69,900,681              67,329,316               96.32%                     327,429    67,656,745            96.79%
   2001                    77,739,171              74,630,517               96.00%                     225,960    74,856,477            96.29%
   2002                    86,152,618              82,766,326               96.07%                     738,913    83,505,239            96.93%
   2003                    96,980,298              93,261,967               96.17%                     427,760    93,689,727            96.61%
   2004                   106,301,541             102,339,173               96.27%                     355,857   102,695,029            96.61%
   2005                   116,134,509             111,708,607               96.19%                     811,581   112,520,188            96.89%
   2006                   135,485,708             130,105,098               96.03%                      91,059   130,196,157            96.10%
   2007                   171,119,959             160,954,578               94.06%                      26,733   160,981,311            94.08%
   2008                   206,374,025             195,550,937               94.76%                   1,962,978   197,513,915            95.71%
   2009                   203,106,867             195,727,342               96.37%                               195,727,342            96.37%


  Note:              Property Taxes become due and payable on November 1st of each year. A four percent
                     (4%) discount is allowed if taxes are paid in November, with the discounts declining by
                     one percent (1%) each month thereafter. Accordingly, taxes collected will never be
                     100% of the tax levy. Taxes become delinquent on April 1st of each year and tax
                     certificates for the full amount of any unpaid taxes and assessments must be sold no
                     later than June 1st of each year.


Source:
  District records




                                                                          113
Schedule 12
District School Board of Osceola County
Outstanding Debt by Type
Last Ten Fiscal Years
Unaudited


                                Capital
                              Leases and                                                                Certificates
      Fiscal                  Installment                                                                    Of
      Year                     Purchases                Notes                     Bonds                Participation

       2000                        2,287,205             10,944,000                33,900,000              92,815,000
       2001                        1,655,956              9,547,769                74,695,000              87,970,000
       2002                        4,944,598              3,823,000                69,342,534             143,641,031
       2003                        6,375,658             36,185,393                68,880,015             140,606,742
       2004                        8,675,839             34,387,126                67,008,622             137,417,453
       2005                       11,308,878             32,492,160                66,274,574             199,595,993
       2006                        5,962,320             30,495,288                63,716,002             194,270,400
       2007                        7,763,937             28,391,020               104,795,299             188,836,531
       2008                        3,794,475             26,173,571               100,475,993             183,202,405
       2009                        2,554,486             23,836,843                95,971,687             177,228,279



(1) See schedule 16 for Personal Income data.
(2) See schedule 19 for Enrollment data.
N/A = not available


Source:
 District records


                                                   Debt per Student


    7,000

    6,000

    5,000

    4,000

    3,000

    2,000

    1,000
               2000       2001       2002       2003   2004         2005   2006      2007       2008     2009




                                                              114
  EFBD                        Percentage          Outstanding
Agreement                     of Personal           Debt Per
 Payable        Total         Income (1)           Student (2)

                139,946,205                2.31            4,442
                173,868,725                2.01            5,086
                221,751,163                1.64            5,940
                252,047,808                1.54            6,288
    3,941,380   251,430,420                1.66            5,760
    7,764,964   317,436,569                1.45            6,770
    8,805,939   303,249,949                1.71            6,162
    8,912,464   338,699,251                1.69            6,633
    9,023,280   322,669,724                1.89            6,213
    9,139,035   308,730,330      N/A                       6,040




                                     115
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               116
Schedule 13
District School Board of Osceola County
Direct and Overlapping Governmental Activities Debt
As of June 30, 2009
Unaudited

                                                                                            Estimated
                                                                                             Share of
                                                                       Estimated            Direct and
                                                      Debt             Percentage          Overlapping
Governmental Unit                                  Outstanding         Applicable             Debt

Osceola County
  Limited General Obligation Bonds           $            14,740,000         100.00%   $        14,740,000
  Revenue Bonds                                          243,780,000         100.00%           243,780,000
  Special Assessment Bonds                                 7,995,000         100.00%             7,995,000


Subtotal, overlapping debt                                                                     266,515,000


District direct debt                                                                           308,730,330


Total direct and overlapping debt                                                      $       575,245,330




Source:
  District records
  Osceola County Comprehensive Annual Financial Report, FYE 9/30/08




                                                       117
Schedule 14
District School Board of Osceola County
Legal Debt Margin Information
Last Ten Fiscal Years
Unaudited



                                                                                         Fiscal Year
                                                        1999                      2000                    2001                  2002



Assessed value                                  $    6,916,076,747     $    7,540,526,572       $      8,421,533,011   $      9,711,714,371

Debt limit (10% of assessed value)                     691,607,675               754,052,657            842,153,301            971,171,437

Debt applicable to limit:
  Bonds payable                                         36,505,000                33,900,000             74,695,000             69,342,534
  Total net debt applicable to limit                    36,505,000                33,900,000             74,695,000             69,342,534


Legal debt margin                               $      655,102,675     $         720,152,657    $       767,458,301    $       901,828,903


Total net debt applicable to the limit
 as a percentage of debt limit                          5.28%                    4.50%                   8.87%                  7.14%



Note: This schedule was previously presented as a requirement of Rule 6A-1.037(2) State Board of Education,
 Florida Administration Code, which established a legal debt limit of 10 percent of the assessed valuation of the District.
 Rule 6A-1.037 was repealed in March 2006, however, management believes this information may still be of value to users.


Source:
  District records
  Osceola County Comprehensive Annual Financial Report, FYE 9/30/08




                                                                           118
       2003                 2004                 2005                   2006                 2007                 2008



$   10,995,459,974   $   12,045,360,915   $   13,592,209,503   $     16,141,696,392   $   21,802,469,469    $   26,329,988,380

     1,099,545,997        1,204,536,092        1,359,220,950          1,614,169,639        2,180,246,947         2,632,998,838


       68,880,015           67,008,622           66,274,574             63,716,002          104,795,299           100,475,993
       68,880,015           67,008,622           66,274,574             63,716,002          104,795,299           100,475,993


$    1,030,665,982   $    1,137,527,470   $    1,292,946,376   $      1,550,453,637   $    2,075,451,648    $    2,532,522,845




      6.26%                5.56%                4.88%                  3.95%                        4.81%                3.82%




                                                               119
Schedule 15
District School Board of Osceola County
Pledged-Revenue Coverage
Last Ten Fiscal Years
Unaudited




                                          State Board of Education Bonds
                   Motor Vehicle
  Fiscal             License                              Debt Service
  Year                 Tax                    Principal                  Interest       Coverage

   2000                    1,324,660                520,000                   777,535      98.0%
   2001                    1,381,049                540,000                   791,558      96.4%
   2002                    1,531,419                510,000                   623,490      74.0%
   2003                    1,657,627                570,000                   657,971      74.1%
   2004                    1,793,356                595,000                   643,741      69.1%
   2005                    1,921,521                685,000                   668,601      70.4%
   2006                    2,044,076                800,000                   767,103      76.7%
   2007                    2,118,063                925,000                   773,432      80.2%
   2008                    2,158,213                965,000                   762,304      80.0%
   2009                    2,202,617              1,015,000                   719,104      78.7%




Source:          District records




                                                   120
Schedule 16
District School Board of Osceola County
Demographic and Economic Statistics
Last Ten Calendar Years
Unaudited


                                                 Personal                   Per Capita
                                                Income (1)                  Personal (1)                Median              School              Unemployment
   Year              Population (1)            (in thousands)                 Income                    Age (1)          Enrollment (2)            Rate (1)

   1999                       167,021                   2,930,561                      18,308                  36.7                 30,236                2.8%
   2000                       174,198                   3,233,548                      19,360                  34.6                 31,503                3.3%
   2001                       183,443                   3,502,985                      20,115                  35.0                 34,186                4.4%
   2002                       194,281                   3,646,332                      19,898                  35.6                 37,334                5.8%
   2003                       206,095                   3,871,702                      19,986                  34.5                 40,086                5.2%
   2004                       220,217                   4,175,478                      20,325                  34.4                 43,652                4.5%
   2005                       231,482                   4,611,683                      21,025                  34.3                 46,891                3.8%
   2006                       244,045                   5,195,652                      22,514                  34.5                 49,214                3.1%
   2007                       266,123                   5,708,018                      23,359                  34.9                 51,060                4.3%
   2008                       273,709                   6,087,831                      23,797                  34.4                 51,934                6.4%




Sources:
               (1) State of Florida Office of Economic and Demographic Research
               (2) Osceola School District




                                                 Comparison of Population to School Enrollment

           300,000

           250,000

           200,000

           150,000

           100,000

            50,000

                -
                          1999          2000     2001           2002      2003          2004            2005          2006       2007        2008

                                                                          Population       Enrollment




                                                                           121
Schedule 17
District School Board of Osceola County
Osceola County Principal Employers
September 30, 2008 and Nine Years Earlier
Unaudited




                                                     September 30, 2008             September 30, 1999
Employer                                           Employees      Rank            Employees      Rank

Walt Disney World (including Orange County)               55,000              1        50,000            1
Osceola School District                                    6,983              2         3,514            2
Wal-Mart Stores, Inc.                                      2,800              3
Osceola County Government                                  2,557              4         1,774            3
Orange Lake Country Club and Affiliates                    2,000              5           700            5
Gaylord Palms Resort & Convention Center                   1,952              6
Lowe's Distribution Center                                 1,137              7
McLane/Suneast, Inc.                                       1,035              8
Florida Hospital Celebration                                 839              9
Osceola Regional Medical Center                              800             10
Publix Supermarkets                                                                      960             4
Tupperware Corporation                                                                   620             6
City of Kissimmee                                                                        575             7
Mercury Marine                                                                           340             9


 Total principal employers                                75,103                       58,483




Note: Walt Disney World is a primary employer, but the number of employees
      located in Osceola County is not available.
      School district employees are shown as of June 30, 2008 and 1999.


Source:
  Osceola County Comprehensive Annual Financial Report, FYE 9/30/08
  Florida Department of Education




                                                    122
Schedule 18
District School Board of Osceola County
Full-time-Equivalent District Employees by Type
Last Ten Fiscal Years
Unaudited


                                                                                 Full-time-Equivalent Employees as of June 30
                                                   2000        2001     2002     2003         2004        2005          2006      2007     2008     2009

Supervisory
 Officials, Administrators and Managers                   24       35       35          32        37           35           42        43       44       44
 Consultants/Supervisors of Instruction                    2        3        3           4         5            4            5         7        8        8
 Principals                                               29       31       32          35        45           46           46        45       48       52
 Assistant Principals                                     39       39       43          47        52           56           64        66       70       63
  Total supervisory                                       94      108      113         118       139          141          157       161      170      167

Instruction
 Deans/Curriculum Coordinators                          1           1        1         1           5             5            2        4        7        2
 Classroom Teachers, Elementary (PK, K-5)             660         663      708       719         940         1,052        1,157    1,242    1,297    1,290
 Classroom Teachers, Secondary (6-12)                 676         684      735       777         951         1,063        1,138    1,210    1,336    1,279
 Exceptional Education Teachers                       239         245      255       294         335           377          399      424      421      407
 Other Teachers                                        65          69       73        85          86            95           76       86       93       80
 Other Professional Staff, Instructional              171         184      186       197         229           273          321      334      387      356
  Total instruction                                 1,812       1,846    1,958     2,073       2,546         2,865        3,093    3,300    3,541    3,414

Student Services
 Guidance Counselors                                   68          69       72        76          90            96           95       93       97       90
 Social Workers                                         8           8        6         7           8            10           11       13       14       14
 School Psychologists                                  19          20       25        28          29            31           31       34       34       37
 Librarians/Audio-Visual Workers                       29          28       30        31          35            35           39       39       46       45
 Other Professional Staff, Non-Instructional          120         133      148       162         175           189          190      196      210      224
 Aides                                                610         596      624       670         706           735          805      779      775      696
 Technicians                                           30          34       43        46          51            55           78       96      107      102
  Total student services                              884         888      948     1,020       1,094         1,151        1,249    1,250    1,283    1,208

Support and Administration
 Clerical/Secretarial                                 364         360      386       391         440           467          508      539      561      564
 Service Workers                                      563         610      673       708         951           906        1,162    1,275    1,331    1,301
 Skilled Crafts Workers                                42          45       44        48          53            55           63       65       71       72
 Unskilled Laborers                                    22          24       24        25          23            22           18       23       26       23
  Total support and administration                    991       1,039    1,127     1,172       1,467         1,450        1,751    1,902    1,989    1,960



Total                                               3,781       3,881    4,146     4,383       5,246         5,607        6,250    6,613    6,983    6,749




Source: Florida Department of Education,
          Education Information and Accountability Services




                                                                                 123
Schedule 19
District School Board of Osceola County
Operating Statistics
Last Ten Fiscal Years
Unaudited



  Fiscal                                       Student         Cost per         Number of
  Year                   Expenditures         Enrollment       Student           Schools

   2000                       269,094,497       31,503                8,542        30
   2001                       271,417,064       34,186                7,939        32
   2002                       327,256,567       37,334                8,766        34
   2003                       334,863,975       40,086                8,354        34
   2004                       347,394,257       43,652                7,958        35
   2005                       402,675,721       46,891                8,587        39
   2006                       468,804,774       49,214                9,526        39
   2007                       525,448,997       51,060               10,291        43
   2008                       559,183,622       51,934               10,767        43
   2009                       575,280,841       51,118               11,254        47




Source: District records



                                            Cost per Student



                12,000
                11,000
                10,000
                 9,000
                 8,000
                 7,000
                 6,000
                 5,000
                            2000 2001 2002 2003 2004 2005 2006 2007 2008 2009




                                                   124
Number of                         Percentage of Students Receiving
Classroom   Pupil/Teacher              Free or Reduced Meals
Teachers        Ratio                 Free             Reduced

  1,640         19.2                  33.8%             11.2%
  1,661         20.6                  34.3%             11.6%
  1,771         21.1                  37.6%             11.9%
  1,875         21.4                  39.5%             12.0%
  2,312         18.9                  41.6%             12.7%
  2,587         18.1                  43.3%             11.8%
  2,770         17.8                  43.6%             12.1%
  2,962         17.2                  43.5%             13.7%
  3,147         16.5                  44.5%             14.2%
  3,056         16.7                  49.0%             13.7%




                            125
Schedule 20
District School Board of Osceola County
Teacher Salaries
Last Ten Fiscal Years
Unaudited


                                                                            Osceola                    Statewide
  Fiscal              Minimum                  Maximum                       Average                    Average
  Year                Salary (1)               Salary (1)                   Salary (2)                 Salary (2)

   2000       $              25,400      $              47,850      $              31,897       $             36,720
   2001                      27,400                     49,400                     33,421                     38,230
   2002                      28,400                     51,550                     34,939                     39,275
   2003                      30,000                     52,575                     36,567                     40,267
   2004                      30,600                     53,575                     36,702                     40,587
   2005                      31,600                     55,350                     38,292                     41,581
   2006                      33,400                     58,850                     40,418                     42,705
   2007                      36,000                     61,275                     42,851                     45,307
   2008                      37,500                     65,685                     44,519                     46,930
   2009                      37,500                     65,685                     44,639                     46,950


Source:
                  (1) District records
                  (2) Florida Department of Education
                      Education Information and Accountability Services



                                             Teacher Average Salary


     49,000
     46,000
     43,000
     40,000
     37,000
     34,000
     31,000
     28,000
     25,000
                   2000      2001     2002      2003         2004   2005      2006       2007       2008   2009

                                      Osceola Average Salary              Statewide Average Salary


                                                       126
Schedule 21
District School Board of Osceola County
School Building Information
Last Ten Fiscal Years
Unaudited
                                                                            Fiscal Year
                               2000       2001      2002      2003       2004        2005     2006      2007      2008      2009
Elementary Schools
Boggy Creek (1982)
  Square Feet                   82,782     82,782    82,782    82,782     94,769     94,769    94,769    88,243    88,243    88,245
  Student Capacity                 864        864       853       632      1,147        883       883       635       635       635
  Enrollment                                                      915        881        779       858       825       740       711
Central Avenue (1934)
  Square Feet                   85,534    101,862   101,862   101,862    101,862    101,862   101,862   101,862   111,962   111,962
  Student Capacity                 740        924       924       725        902        726       726       726       729       729
  Enrollment                                                      748        858        832       850       850       716       661
Chestnut (2005)
  Square Feet                                                                       118,948   118,998   118,998   119,122   119,122
  Student Capacity                                                                    1,164     1,110     1,110     1,110     1,110
  Enrollment                                                                                    1,037     1,117     1,084       982
Cypress (1991)
  Square Feet                  108,547    108,547   108,547   108,547    108,547    108,547   108,547   108,547   107,508   107,508
  Student Capacity               1,071      1,071     1,067       790      1,067        826       826       826       808       808
  Enrollment                                                      917        939        939       982       930       815       789
Deerwood (1990)
  Square Feet                  108,490    110,437   110,437   110,437    122,340    122,340   122,340   110,437   114,619   114,619
  Student Capacity                 989        989       989       734      1,299      1,034     1,034       770       788       788
  Enrollment                                                    1,084      1,334      1,507     1,049     1,074     1,079       976
Flora Ridge (2007)
  Square Feet                                                                                           118,237   118,237   118,237
  Student Capacity                                                                                        1,149     1,106     1,106
  Enrollment                                                                                                          750       950
Harmony (2007)
  Square Feet                                                                                            99,870    99,711    99,711
  Student Capacity                                                                                        1,006     1,006       966
  Enrollment                                                                                                                     747
Hickory Tree (1983)
  Square Feet                  102,670    102,670   102,670   102,670    102,865    102,865   102,665   102,865   113,311   113,311
  Student Capacity                 953        953       953       698        953        703       703       703       780       773
  Enrollment                                                      786        727        738       744       909       899       563
Highlands (1959)
  Square Feet                   81,990     81,990    80,975    80,975     80,975     80,975    80,975    80,975    87,093    87,092
  Student Capacity                 778        778       800       634        800        644       644       644       644       644
  Enrollment                                                      743        831        876       853       779       794       767
Kissimmee (2000)
  Square Feet                   90,169    116,591   107,913   107,913    107,913    107,913   107,913   107,913   112,552   108,687
  Student Capacity                 980        980     1,000       760      1,000        762       762       762       852       762
  Enrollment                                                    1,109      1,158      1,259     1,157     1,063       744       726
Koa (2009)
  Square Feet                                                                                                               101,078
  Student Capacity                                                                                                              982
  Enrollment
Lakeview (1985)
  Square Feet                  107,181    107,181   107,181   107,181    107,174    107,174   107,174   107,174   108,600   108,600
  Student Capacity               1,006      1,006     1,015       756      1,025        778       778       778       785       760
  Enrollment                                                      721        760        790       928     1,016       725       717
Michigan Avenue (1971)
  Square Feet                   88,176     88,176    88,176    88,176     88,536     88,536    88,536    88,536    93,864    93,864
  Student Capacity                 975        975       975       721        975        724       724       724       727       702
  Enrollment                                                      735        806        849       997       992       950       688
Mill Creek (1986)
  Square Feet                  105,945    105,945   105,980   105,980    105,980    105,980   105,980   105,980   125,287   149,626
  Student Capacity                 952        952       952       721        987        726       726       726       858     1,154
  Enrollment                                                      951        930        892       952       952     1,045       997
Narcoossee (2009)
  Square Feet                                                                                                               103,351
  Student Capacity                                                                                                              978
  Enrollment                                                                                                                  1,127
Neptune (2007)
  Square Feet                                                                                           116,311   118,854   118,081
  Student Capacity                                                                                        1,164     1,128     1,110
  Enrollment                                                                                                          707       660
Partin Settlement (2002)
  Square Feet                                       106,614   106,614    120,694    120,694   120,694   120,694   132,458   132,458
  Student Capacity                                      697       579        964        767       767       767       774       749
  Enrollment                                                      655        836        961       957     1,024       963       971


                                                                        127
Schedule 21
District School Board of Osceola County
School Building Information
Last Ten Fiscal Years
Unaudited
                                                                            Fiscal Year
                               2000       2001      2002      2003       2004        2005     2006      2007      2008      2009
Pleasant Hill (1986)
  Square Feet                  106,553    106,553   106,553   106,553    106,553    106,553   106,553   106,553   117,197   140,278
  Student Capacity               1,038      1,038     1,038       764      1,038        775       775       775       782     1,117
  Enrollment                                                      976      1,080        924       970       991       991     1,039
Poinciana (2001)
  Square Feet                             116,893   102,385   102,385    129,098    129,098   129,098   117,111   130,987   130,987
  Student Capacity                            970       970       742      1,238        978       978       746       746       746
  Enrollment                                                      711      1,224      1,517     1,153     1,112     1,017       916
Reedy Creek (1980)
  Square Feet                   87,578     87,578    88,255    88,255    103,372    103,372   103,372    87,978    88,747    88,747
  Student Capacity                 994        994       997       748      1,302      1,002     1,002       730       730       730
  Enrollment                                                    1,165      1,266      1,331       901       989     1,138     1,150
Ross E Jeffries (1917)
  Square Feet                   61,367     61,746    61,743    61,743     61,743     61,479    57,525    57,525    57,430    57,430
  Student Capacity                 407        407       407       375        407        362       362       406       406       406
  Enrollment                                                      690        734        771       362
Saint Cloud (2005)
  Square Feet                                                                       119,473   118,948   118,948   124,718   124,792
  Student Capacity                                                                    1,164     1,110     1,110     1,110     1,110
  Enrollment                                                                                      797       984       989       832
Sunrise (2005)
  Square Feet                                                                       118,948   118,948   118,948   127,063   127,063
  Student Capacity                                                                    1,164     1,110     1,110     1,110     1,110
  Enrollment                                                                                      737       990       896       895
Thacker Avenue (1963)
  Square Feet                   85,914     85,876    85,534    85,534     85,872     85,872    85,972    85,872   105,974   125,439
  Student Capacity                 787        787       795       665        791        669       669       669       647       923
  Enrollment                                                      662        640        632       718       695       642       589
Ventura (1987)
  Square Feet                  105,420    105,420   105,420   105,420    105,420    105,420   123,472   129,251   134,766   135,995
  Student Capacity                 980        980       980       725        980        728     1,128     1,128     1,128     1,128
  Enrollment                                                    1,022      1,001      1,114     1,106     1,128     1,120     1,004

Middle Schools
Denn John (1973)
  Square Feet                  110,100    118,443   119,606   119,606    119,606    119,606   119,606   126,939   126,939   126,939
  Student Capacity               1,198      1,198     1,407     1,243      1,475      1,329     1,329     1,329     1,284     1,284
  Enrollment                                                    1,263      1,345      1,347     1,236     1,157     1,083     1,132
Discovery (2000)
  Square Feet                  158,404    184,885   184,885   184,885    184,885    184,885   184,885   184,885   268,073   268,073
  Student Capacity               1,346      1,707     1,707     1,502      1,728      1,521     1,521     1,521     1,427     1,427
  Enrollment                                                    1,647      1,445      1,504     1,593     1,619     1,596     1,471
Horizon (1993)
  Square Feet                  150,142    150,142   150,142   150,142    148,542    148,542   148,540   148,540   168,903   168,903
  Student Capacity               1,281      1,281     1,260     1,150      1,305      1,393     1,383     1,383     1,356     1,356
  Enrollment                                                    1,169      1,219      1,353     1,423     1,609     1,553     1,472
Kissimmee (1995)
  Square Feet                  148,108    148,108   148,108   148,108    148,108    147,270   147,314   146,670   191,862   191,862
  Student Capacity               1,339      1,339     1,339     1,214      1,339      1,340     1,340     1,340     1,251     1,251
  Enrollment                                                    1,280      1,224      1,206     1,112     1,030     1,106     1,151
Neptune (1987)
  Square Feet                  128,435    136,778   138,957   161,561    161,561    161,561   161,561   138,977   159,949   160,649
  Student Capacity               1,140      1,140     1,338     1,566      1,774      1,515     1,515     1,136     1,138     1,160
  Enrollment                                                    1,566      1,632      1,676     1,432     1,509     1,473     1,449
Parkway (1986)
  Square Feet                  138,900    138,914   138,914   138,914    138,914    138,914   138,914   138,914   150,394   149,922
  Student Capacity               1,250      1,257     1,197     1,045      1,227      1,064     1,064     1,099     1,041     1,041
  Enrollment                                                    1,220      1,172      1,114     1,029     1,023       886       889
Saint Cloud (1974)
  Square Feet                   90,116     98,271    97,728    97,728     97,728    127,779   127,779   127,779   127,779   132,629
  Student Capacity               1,114      1,072     1,166       933      1,181      1,642     1,642     1,642     1,620     1,620
  Enrollment                                                      900        848        884     1,200     1,311     1,216     1,200




                                                                        128
Schedule 21
District School Board of Osceola County
School Building Information
Last Ten Fiscal Years
Unaudited
                                                                            Fiscal Year
                               2000       2001      2002      2003       2004        2005     2006      2007      2008      2009
High Schools
Celebration (2001)
  Square Feet                             306,633   309,600   309,600    309,600    309,600   309,600   309,600   304,843   304,843
  Student Capacity                          2,093     2,072     1,932      2,054      2,010     2,010     2,010     1,921     1,921
  Enrollment                                                    1,443      1,443      1,731     1,738     1,847     1,704     1,654
Gateway (1981)
  Square Feet                  231,900    241,794   248,879   248,879    248,879    248,879   247,178   247,178   243,101   242,986
  Student Capacity               2,053      2,053     2,110     1,915      2,110      1,924     1,924     1,924     1,865     1,835
  Enrollment                                                    2,598      2,621      2,580     2,354     2,269     2,333     2,377
Harmony (2004)
  Square Feet                                                            299,499    299,499   299,499   299,499   345,864   345,864
  Student Capacity                                                         2,030      2,003     2,003     2,003     1,963     1,963
  Enrollment                                                                          1,306     1,481     1,696     1,891     1,859
Liberty (2007)
  Square Feet                                                                                           252,059   252,854   295,383
  Student Capacity                                                                                        2,434     2,405     2,354
  Enrollment                                                                                                        2,020     1,974
Osceola (1962)
  Square Feet                  193,625    215,751   215,905   215,905    215,905    215,905   218,036   218,036   253,764   253,256
  Student Capacity               1,886      1,877     1,865     1,739      1,865      1,758     1,758     1,758     1,717     1,692
  Enrollment                                                    2,343      2,418      2,443     2,374     2,433     2,359     2,147
PATHS (1990)
  Square Feet                   58,048     98,964   111,230   112,042    112,042    112,044   112,044   112,044   110,981   120,377
  Student Capacity                 207        207       725       672        725        705       705       705       705       705
  Enrollment                                                      383        516        599       685       660       696       691
Poinciana (1991)
  Square Feet                  232,263    232,263   239,857   357,334    357,334    357,334   357,334   357,334   357,334   357,334
  Student Capacity               1,946      1,916     1,937     1,876      1,876      1,876     1,876     1,876     1,876     1,876
  Enrollment                                                    2,633      2,094      2,454     2,568     2,785     2,785     1,366
Saint Cloud (1962)
  Square Feet                  192,962    201,705   201,491   201,491    201,491    201,491   201,491   208,908   208,908   208,948
  Student Capacity               1,911      1,911     1,878     1,758      1,878      1,807     1,807     1,807     1,717     1,699
  Enrollment                                                    2,382      2,528      1,644     1,595     1,674     1,741     1,753

Other Schools
Celebration (1995)
  Square Feet                  213,345    213,345   229,577   230,621    232,324    232,324   232,324   232,324   228,988   228,988
  Student Capacity               1,391      1,391     1,640     1,450      1,590      1,603     1,603     1,603     1,749     1,749
  Enrollment                                                    1,339      1,270      1,270     1,176     1,248     1,338     1,284
Narcoossee (2000)
  Square Feet                  158,068    151,662   198,724   198,724    198,724    198,724   198,724   198,724   209,803   209,803
  Student Capacity               1,287      1,647     1,754     1,449      1,743      1,484     1,484     1,484     1,484     1,484
  Enrollment                                                    1,046      1,105      1,232     1,362     1,579     1,738       663
New Beginnings -Old (1990)
  Square Feet                   15,313     20,233    20,233    50,019     50,019     50,019    50,019    20,233    35,510    36,247
  Student Capacity                 302        227       192       353        360        400       400       183       183       208
  Enrollment                                                      239        325        333       466       426       362
New Beginnings-New (2009)
  Square Feet                                                                                                                71,298
  Student Capacity                                                                                                              894
  Enrollment                                                                                                                    334
School for the Arts (2002)
  Square Feet                                        92,488   126,437    126,437    129,962   133,487   101,329   144,659   140,786
  Student Capacity                                      526       526        526        766       876       119       218       193
  Enrollment                                                      503        503        599       659       750       678       498
Westside (2009)
  Square Feet                                                                                                               171,882
  Student Capacity                                                                                                            1,415
  Enrollment
Zenith (2005)
  Square Feet                                                                        82,161    82,161    82,161    89,541    89,541
  Student Capacity                                                                    1,028     1,028     1,028     1,007     1,007
  Enrollment                                                                                      530       380       416       311




Source:
 District records

                                                                        129
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               130
SINGLE AUDIT SECTION
                          Independent Auditors’ 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


The Honorable Members of the School Board
District School Board of Osceola County, Florida
Kissimmee, Florida

We have audited the financial statements of the governmental activities, the aggregate discretely
presented component units, each major fund, and the aggregate remaining fund information of the
District School Board of Osceola County, Florida (the “District”) as of and for the year ended June 30,
2009, which collectively comprise the District’s basic financial statements, and have issued our report
thereon dated December 17, 2009. We did not audit the financial statements of the aggregate
discretely presented component units; those financial statements were audited by other auditors. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the District’s internal control over financial
reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
the District’s internal control over financial reporting. Accordingly, we do not express an opinion on
the effectiveness of the District's internal control over financial reporting.

 A control deficiency exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the District's ability to initiate, authorize, record, process, or
report financial data reliably in accordance with generally accepted accounting principles such that
there is more than a remote likelihood that a misstatement of the District's financial statements that is
more than inconsequential will not be prevented or detected by the District's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the financial statements will not be
prevented or detected by the District's internal control.




                                                      131
Our consideration of the internal control over financial reporting was for the limited purpose described
in the first paragraph of this section and would not necessarily identify all deficiencies in the internal
control that might be significant deficiencies and, accordingly, would not necessarily disclose all
significant deficiencies that are also considered to be material weaknesses. We did not identify any
deficiencies in internal control over financial reporting that we consider to be material weaknesses, as
defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly, we do not
express such an opinion. The results of our tests disclosed no instances of noncompliance or other
matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of the District School Board, the Audit
Committee, management, applicable federal and state agencies, and pass-through entities and is not
intended to be and should not be used by anyone other than these specified parties.




Orlando, Florida
December 17, 2009




                                                   132
                              Independent Auditors’ Report on Compliance
                              with Requirements Applicable to Each Major
                             Program and Internal Control over Compliance
                                 in Accordance with OMB Circular A-133


The Honorable Members of the School Board
District School Board of Osceola County, Florida
Kissimmee, Florida

Compliance
We have audited the compliance of the District School Board of Osceola County (the “District”) with
the types of compliance requirements described in the U.S. Office of Management and Budget (OMB)
Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for
the year ended June 30, 2009. The District’s major federal programs are identified in the summary of
auditors’ results section of the accompanying schedule of findings and questioned costs. Compliance
with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal
programs is the responsibility of the District’s management. Our responsibility is to express an
opinion on the District’s compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in
the United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB
Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the types of compliance requirements referred to above that could have
a direct and material effect on a major federal program occurred. An audit includes examining, on a
test basis, evidence about the District’s compliance with those requirements and performing such
other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the
District’s compliance with those requirements.

In our opinion, the District complied, in all material respects, with the requirements referred to above
that are applicable to each of its major federal programs for the year ended June 30, 2009.

Internal Control over Compliance
The management of the District is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable to
federal programs. In planning and performing our audit, we considered the District’s internal control
over compliance with requirements that could have a direct and material effect on a major federal
program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control
over compliance. Accordingly, we do not express an opinion on the effectiveness of the District’s
internal control over compliance.




                                                   133
A control deficiency in an entity’s internal control over compliance exists when the design or operation
of a control does not allow management or employees, in the normal course of performing their
assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a
federal program on a timely basis. A significant deficiency is a control deficiency, or combination of
control deficiencies, that adversely affects the entity’s ability to administer a federal program such that
there is more than a remote likelihood that noncompliance with a type of compliance requirement of a
federal program that is more than inconsequential will not be prevented or detected by the entity’s
internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that material noncompliance with a type of compliance requirement
of a federal program will not be prevented or detected by the entity’s internal control.

Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and would not necessarily identify all deficiencies in internal control that
might be significant deficiencies or material weaknesses. We did not identify any deficiencies in
internal control over compliance that we consider to be material weaknesses, as defined above.

This report is intended solely for the information and use of the District School Board, the Audit
Committee, management, applicable federal and state agencies, and pass-through entities and is not
intended to be and should not be used by anyone other than these specified parties.




Orlando, Florida
December 17, 2009




                                                    134
DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2009


Federal Grantor/Pass-Through Grantor/Program Title                                        Catalog of                    Pass -                       Amount of
                                                                                           Federal                     Through                      Expenditures
                                                                                          Domestic                     Grantor                          (1)
                                                                                          Assistance                   Number
                                                                                           Number

United States Department of Agriculture:
  Indirect:
      Florida Department of Agriculture and Consumer Services:
         Child Nutrition Cluster:
             Non-Cash Assistance (Commodities):
                 National School Lunch Program                                            10.555 (2)                     300                  $            731,089
                 Summer Food Service Program for Children                                 10.559 (2)                     323                                11,013
                     Non-Cash Assistance Subtotal                                                                                                          742,102

         Florida Department of Education:
                Cash Assistance:
                    School Breakfast Program                                                10.553                       321                             2,531,790
                    National School Lunch Program                                           10.555                       300                            11,830,372
                    Summer Food Service Program for Children                                10.559                       323                               677,622
                        Cash Assistance Subtotal                                                                                                        15,039,784
                Total Child Nutrition Cluster                                                                                                           15,781,886

   Total United States Department of Agriculture                                                                                                        15,781,886

United States Department of Education:
  Direct:
      Federal Pell Grant Program                                                            84.063                       N/A                               393,542
      Safe and Drug-Free Schools and Communities - National Programs                        84.184                       N/A                             1,714,002
      Teaching American History                                                             84.215                       N/A                               307,226
      Carol M. White Physical Education Program                                             84.215                       N/A                                89,315
      Fund for the Improvement of Education                                                 84.215                       N/A                               370,229
      Elementary and Secondary School Counseling Program                                    84.215                       N/A                               355,850

               Total Direct                                                                                                                              3,230,164

   Indirect:
      Special Education Cluster:
          Florida Department of Education:
             Special Education - Grants to States                                           84.027                     262, 263                          9,508,905
             Special Education - Preschool Grants                                           84.173                       267                               199,732
             Special Education - Grants to States, Recovery Act                             84.391                                                         590,563
             Special Education - Preschool Grants, Recovery Act                             84.392                                                          13,944

            Total Special Education Cluster                                                                                                             10,313,144

         Florida Department of Education:
            Adult Education - State Grant Program                                           84.002                191, 193, 212, 222,                      255,695
                                                                                                                     223,226,228
            Title I Grants to Local Educational Agencies                                    84.010                     226, 228                         10,517,261
            Migrant Education - State Grant Program                                         84.011                       217                                57,864
            Vocational Education - Basic Grants to States                                   84.048                       151                               515,178
            Safe and Drug-Free Schools and Communities - State Grants                       84.186                       103                               286,998
            Education for Homeless Children and Youth                                       84.196                       127                                48,579
            Twenty-First Century Community Learning Centers                                 84.287                       244                             2,373,179
            State Grants for Innovative Programs                                            84.298                       113                                 6,907
            Education Technology State Grants                                               84.318                     121, 122                             83,950
            English Language Acquisition Grants                                             84.365                       102                             1,631,629
            Mathematics and Science Partnerships                                            84.366                       235                               501,895
            Improving Teacher Quality State Grants                                          84.367                       224                             1,745,036
            School Improvement Grants                                                       84.377                       126                               301,092
            Learn and Serve America                                                         94.004                       234                                 7,230
         Valencia Community College:
            Tech-Prep Education                                                             84.243                       None                               74,847

         Total Indirect                                                                                                                                 28,720,484

   Total United States Department of Education                                                                                                          31,950,648

United States Department of Health and Human Services:
  Indirect:
      Early Learning Coalitition of Osceola County:
         Child Care and Development Block Grant                                             93.575                       None                              190,925
      Centers for Disease Control and Prevention:
         Chronic Disease Prevention and Control                                             93.945                       None                               91,418

   Total United States Department of Health and Human Services                                                                                             282,343

United States Department of Homeland Security:
  Indirect:
      Florida Division of Emergency Management:
         Hazard Mitigation Grant Program                                                    97.039                       None                               72,561
      Florida Department of Law Enforcement:
         Homeland Security Grant Program                                                    97.067                       532                               253,856

   Total United States Department of Homeland Security                                                                                                     326,417

United States Department of Defense:
  Direct:
      Air Force Junior Reserve Officers Training Corps                                      None                         N/A                               112,657
      Army Junior Reserve Officers Training Corps                                           None                         N/A                               124,557
      Marine Junior Reserve Officers Training Corps                                         None                         N/A                                42,340
      Navy Junior Reserve Officers Training Corps                                           None                         N/A                                51,031

   Total United States Department of Defense                                                                                                               330,585

Total Expenditures of Federal Awards                                                                                                          $         48,671,879

Notes:         (1) Basis of Presentation. The Schedule of Expenditures of Federal Awards represents amounts expended from Federal programs during the 2008-09 fiscal
                   year as determined based on the modified accrual basis of accounting. The amounts reported on the Schedule have been reconcilied to and are in
                   material agreement with amounts recorded in the District's accounting records from which the basic financial statements have been reported.

               (2) Noncash Assistance - Food Commodities. Represents the amount of donated food used during the 2008-09 fiscal year. Commodities are valued at fair
                   value as determined at the time of donation.



                                                                             135
                        DISTRICT SCHOOL BOARD OF OSCEOLA COUNTY, FLORIDA
                             Schedule of Findings and Questioned Costs
                                     Year Ended June 30, 2009


Part I - Summary of Audit Results

1. The auditors report on the financial statements expresses an unqualified opinion.

2. No significant deficiencies relating to the audit of the financial statements are reported in the
   Independent Auditors’ 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.

3. No instances of noncompliance material to the financial statements of the District were disclosed
   during the audit.

4. No significant deficiencies relating to the audit of the major federal awards programs are reported
   in the Independent Auditors’ Report on Compliance with Requirements Applicable to Each Major
   Program and Internal Control over Compliance in Accordance with OMB Circular A-133.

5. The auditors’ report on compliance for the major federal award programs for the District expresses
   an unqualified opinion.

6. The programs tested as major programs were:

    Name of Program                                                                CFDA #
    Safe and Drug Free Schools and Communities – National Programs                 84.184
    21st Century Community Learning Centers                                        84.287
    English Language Acquisition Grants                                            84.365
    Improving Teacher Quality State Grants                                         84.367
    Special Education Cluster                                                      84.027,
                                                                                   84.173,
                                                                                   84.391 &
                                                                                   84.392

7. The threshold for distinguishing Types A and B programs was $1,460,156.

8. The District was determined to be a low risk auditee.


Part II – Financial Statement Findings Section

This section identifies the significant deficiencies, material weaknesses, and instances of
noncompliance related to the financial statements that are required to be reported in accordance with
Government Auditing Standards.

None reported.

Part III – Federal Award Finding and Questioned Costs Section

None reported.




                                                  136
District School Board of Osceola County
Summary Schedule of Prior Audit Findings - Federal Awards
For the Fiscal Year Ended June 30, 2009



Listed below is the District's summary of the status of prior audit findings on Federal Programs:



  Audit Report No.                 Program / Area                      Brief Description            Status   Comments
    and Federal
 Awards Finding No.

         None




                                                                     137
                                Independent Auditors' Management Letter


The Honorable Members of the School Board
District School Board of Osceola County, Florida
Kissimmee, Florida

We have audited the financial statements of the governmental activities, the aggregate discretely
presented component units, each major fund, and the aggregate remaining fund information of the
District School Board of Osceola County, Florida (the “District”) as of and for the year ended June 30,
2009, which collectively comprise the District’s basic financial statements and have issued our report
thereon dated December 17, 2009. These financial statements are the responsibility of the District’s
management. Our responsibility is to express opinions on these financial statements based on our
audit. We did not audit the financial statements of the aggregate discretely presented component
units; those financial statements were audited by other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the United
States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits
of States, Local Governments, and Non-Profit Organizations. We have issued our Independent
Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed, Independent Auditors’ Report on Compliance
with Requirements Applicable to Each Major Program and Internal Control over Compliance, and
Schedule of Findings and Questioned Costs. Disclosures in those reports and schedule, which are
dated December 17, 2009, should be considered in conjunction with this management letter.

Additionally, our audit was conducted in accordance with Chapter 10.800, Rules of the Auditor
General, which governs the conduct of district school board audits conducted in the State of Florida.
This letter includes the following information, which is not included in the auditors’ reports or schedule.

Section 10.804(1)(f)1., Rules of the Auditor General, requires that we address in the management
letter, if not already addressed in the auditors' report on internal controls over financial reporting and
on compliance and other matters, whether or not corrective actions have been taken to address
significant findings and recommendations made in the preceding annual financial audit report. There
were no significant findings or recommendations made in the prior year annual financial audit report.

Section 10.804(1)(f)2., Rules of the Auditor General, requires a statement be included as to whether
or not the district school board has met one or more of the conditions described in Section 218.503(1),
Florida Statutes, and identification of the specific conditions met. In connection with our audit of the
financial statements of the District, the results of our tests did not indicate that the District met any of
the conditions in Section 218.503(1), Florida Statutes. However, our audit does not provide a legal
determination on the District's compliance with this requirement.




                                                    138
Section 10.804(1)(f)3., Rules of the Auditor General, requires our audit to include a review of the
provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In
connection with our audit of the financial statements of the District, the results of our tests did not
indicate that the District was in noncompliance with Section 218.415 regarding the investment of
public funds. However, our audit was not directed toward obtaining knowledge regarding the District’s
compliance with this requirement.

Section 10.804(1)(f)4., Rules of the Auditor General, require that we address in the management
letter any recommendations to improve financial management. In connection with our audit, we did
not have any such recommendations.

Section 10.804(1)(f)5., Rules of the Auditor General, requires that we address violations of provisions
of contracts or grant agreements, or abuse, that have an effect on the financial statements that is less
than material but more than inconsequential. In connection with our audit, we did not have any such
findings.

Section 10.804(1)(f)6., Rules of the Auditor General, provides that the auditor may, based on
professional judgment, report the following matters that have an inconsequential effect on the financial
statements considering both quantitative and qualitative factors; (a) violations of provisions of
contracts or grant agreements, fraud, illegal acts, or abuse, and (b) control deficiencies that are not
significant deficiencies. In connection with our audit, we did not have any such findings.

Pursuant to Sections 10.804(1)(f)7.a. and 10.805(6), Rules of the Auditor General, we applied
financial condition assessment procedures. It is management’s responsibility to monitor the District’s
financial condition, and our financial condition assessment was based in part on representations by
management and review of financial information provided by same.

We wish to thank the District’s finance and accounting personnel and others involved in the conduct of
the audit for their courtesy and cooperation.

Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its
distribution is not limited. Auditing standards generally accepted in the United States of America
require us to indicate that this letter is intended solely for the information of the District School Board,
applicable management, and applicable federal and state agencies, and is not intended to be and
should not be used by anyone other than these specified parties.




Orlando, Florida
December 17, 2009




                                                    139
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               140
                                  APPENDIX B

Four Corners Charter School, Inc. 2009 Audited Financial Statements
   FOUR CORNERS
CHARTER SCHOOL, INC.

Basic Financial Statements and
  Supplemental Information

     For the year ended
       June 30, 2009
                                  TABLE OF CONTENTS


                                                                            Page

INDEPENDENT AUDITORS' REPORT                                                 1

MANAGEMENT’S DISCUSSION AND ANALYSIS                                         3

BASIC FINANCIAL STATEMENTS

     Government-Wide Financial Statements:

            Statement of Net Assets                                          8

            Statement of Activities                                          9

     Governmental Fund Financial Statements:

            Balance Sheet - Governmental Funds                              10

            Reconciliation of the Balance Sheet - Governmental
               Funds to the Statement of Net Assets                         11

            Statement of Revenues, Expenditures and Changes in
                Fund Balances - Governmental Funds                          12

            Reconciliation of the Statement of Revenues, Expenditures and
               Changes in Fund Balances to the Statement of Activities -
               Governmental Funds                                           13

     Notes to Financial Statements                                          14

REQUIRED SUPPLEMENTAL INFORMATION

     Schedule of Revenues, Expenditures and Changes in Fund
        Balances - Budget and Actual - General Fund                         24

     Schedule of Revenues, Expenditures and Changes in Fund
        Balances - Budget and Actual - Capital Outlay Fund                  25

     Notes to Required Supplemental Information                             26

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                                          27

MANAGEMENT LETTER                                                           29

COMMENTS AND RECOMMENDATIONS                                                31
                                             INDEPENDENT AUDITORS' REPORT


                           To the Board of Directors
                           Four Corners Charter School, Inc.
                           Kissimmee, Florida

                           We have audited the accompanying financial statements of the governmental
                           activities and each major fund of Four Corners Charter School, Inc., (the
                           “Corporation”), a component unit of the School District of Osceola County, Florida, as
                           of and for the year ended June 30, 2009, which collectively comprise Four Corners
                           Charter School, Inc.’s basic financial statements as listed in the table of contents.
                           These financial statements are the responsibility of Four Corners Charter School,
                           Inc.’s management. Our responsibility is to express opinions on these financial
 8035 Spyglass Hill Road
                           statements based on our audit.
    Melbourne, FL 32940
           321.757.2020
                           We conducted our audit in accordance with auditing standards generally accepted in
      FAX 321.242.4844     the United States of America and the standards applicable to financial audits
                           contained in Government Auditing Standards, issued by the Comptroller General of
                           the United States. Those standards require that we plan and perform the audit to
     480 N. Orlando Ave.   obtain reasonable assurance about whether the financial statements are free of
               Suite 218   material misstatement. An audit includes examining, on a test basis, evidence
   Winter Park, FL 32789   supporting the amounts and disclosures in the financial statements. An audit also
           407.644.5811    includes assessing the accounting principles used and the significant estimates
      FAX 407.644.6022     made by management, as well as evaluating the overall financial statement
                           presentation. We believe that our audit provides a reasonable basis for our opinions.

     301 Clematis Street   In our opinion, the financial statements referred to above present fairly, in all material
             Suite 3000    respects, the respective financial position of the governmental activities and each
W. Palm Beach, FL 33401    major fund of Four Corners Charter School, Inc. as of June 30, 2009, and the
          561-837-6627     respective changes in financial position for the year then ended in conformity with
      FAX 561-837-6632     accounting principles generally accepted in the United States of America.

                           In accordance with Government Auditing Standards, we have also issued our report
                           dated November 20, 2009 on our consideration of Four Corners Charter School,
   www.bermanhopkins.com
                           Inc.’s internal control over financial reporting and on our tests of its compliance with
                           certain provisions of laws, regulations, contracts, and grant agreements and other
                           matters. The purpose of that report is to describe the scope of our testing of internal
                           control over financial reporting and compliance and the results of that testing, and not
                           to provide an opinion on the internal control over financial reporting or on compliance.
                           That report is an integral part of an audit performed in accordance with Government
                           Auditing Standards and should be considered in assessing the results of our audit.




                                                                   1
The management’s discussion and analysis and the budgetary comparison information, as
listed in the table of contents, are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United
States of America. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the
required supplemental information. However, we did not audit the information and express no
opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise Four Corners Charter School, Inc.’s basic financial statements. The
accompanying supplementary information, as listed in the table of contents, is presented for
purposes of additional analysis and is not a required part of the basic financial statements. The
supplementary information has not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we express no opinion on it.

November 20, 2009
Melbourne, Florida                               Berman Hopkins Wright & LaHam
                                                      CPAs and Associates, LLP




                                                2
                           Management’s Discussion and Analysis

As management of Four Corners Charter School, Inc. (the “Corporation”) a component unit of
the School District of Osceola County, Florida, we offer readers of the Corporation’s financial
statements this narrative overview and analysis of the financial activities of the Corporation for
the fiscal year ended June 30, 2009 to (a) assist the reader in focusing on significant financial
issues, (b) provide an overview and analysis of the Corporation’s financial activities, (c) identify
changes in the Corporation’s financial position, and (d) highlight significant issues in individual
funds.

Because the information contained in the Management’s Discussion and Analysis (MD&A) is
intended to highlight significant transactions, events or conditions, it should be considered in
conjunction with the basic financial statements found on pages 8 - 22.

Financial Highlights

     The assets of the Corporation exceeded its liabilities at the close of the most recent fiscal
     year by $3,085,143.
     The Corporation’s total net assets increased by $170,378.
     As of the close of the current fiscal year, the Corporation’s governmental funds reported
     combined ending fund balances of $2,972,254.
     At the end of the current fiscal year, undesignated fund balance for the general fund was
     $882,326.

Overview of the Financial Statements

This discussion and analysis is intended to serve as an introduction to the Corporation’s basic
financial statements. The Corporation’s basic financial statements are comprised of three
components: 1) government-wide financial statements, 2) fund financial statements, and 3)
notes to the financial statements. This report also contains other supplementary information in
addition to the basic financial statements.

Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the Corporation’s finances, in a manner
similar to private-sector business.

The statement of net assets presents information on all of the Corporation’s assets and
liabilities, with the difference between the two reported as net assets. Over time, increases or
decreases in net assets may serve as a useful indicator of whether the financial position of the
Corporation is improving or deteriorating.

The statement of activities presents information showing how the Corporation’s net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as
the underlying event giving rise to the change occurs, regardless of the timing of related cash
flows. Thus, revenues and expenses are reported in this statement for some items that will only
result in cash flows in future fiscal periods (e.g., uncollected funding and earned but unused
vacation leave).




                                                 3
Both of the government-wide financial statements distinguish functions of the Corporation that
are principally supported by school board, state, and federal funding (governmental activities).
Basic instruction, general administration, and facilities are examples of the Corporation’s
governmental activities.

The government-wide financial statements include only the Corporation itself, which is a
component unit of the School District of Osceola County, Florida. The School District of Osceola
County, Florida includes the operations of the Corporation in their operations.

The government-wide financial statements can be found on pages 8 - 9 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The
Corporation, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the operations of the
Corporation are presented in governmental funds only.

Government funds. Government funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However,
unlike the government-wide financial statements, governmental fund financial statements focus
on near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a
government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government’s near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.

The Corporation maintains three individual government funds, of which two are considered to be
major funds. Information is presented separately in the governmental fund balance sheet and in
the governmental fund statement of revenues, expenditures, and changes in fund balances for
the general fund and capital outlay fund.

The basic governmental fund financial statements can be found on pages 10 - 13 of this report.

Notes to the financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found on pages 14 - 22 of this report.

Government-wide Financial Analysis

As noted earlier, net assets may serve over time as a useful indicator of a government’s financial
position. In the case of the Corporation, assets exceeded liabilities by $3,085,143 at the close of
the most recent fiscal year.




                                                4
A portion of the Corporation’s net assets reflects its investment of $112,889 in capital assets
(e.g., improvements other than buildings; furniture, fixtures, and equipment; computer software;
information technology equipment; and audio visual equipment); less any related debt used to
acquire those assets that is still outstanding. The Corporation uses these capital assets to
provide services to students; consequently, these assets are not available for future spending.
Portions of the Corporation’s net assets are broken down as follows: $112,889 represents
amounts invested in capital assets (net of accumulated depreciation) and $2,972,254, which
represents the amount that is the unrestricted portion of revenues. This amount consists
primarily of cash.

The following schedules reflect a comparative analysis of the government-wide activity for the
years ending June 30, 2009 and 2008:

                               Four Corners Charter School, Inc.
                                   Statem ent of Net Assets

                                                      Governmental Activities

                                               2009             2008           Variance
         ASSETS
         Current and other as sets        $ 3,280,204      $ 2,994,214     $     285,990
         Capital assets                       112,889          173,267           (60,378)
           Total as sets                  $ 3,393,093      $ 3,167,481     $     225,612
         LIABILITES
         Current and other liabilities    $    307,950     $    252,716    $      55,234
           Total liabilities              $    307,950     $    252,716    $      55,234
         NET ASSETS
         Invested in capital assets       $     112,889    $     173,267   $     (60,378)
         Unrestricted                         2,972,254        2,741,498         230,756
           Total net assets               $ 3,085,143      $ 2,914,765     $     170,378




                                                5
                                Four Corners Charter School, Inc.
                                     Statement of Activities

                                                        Governmental Activities
                                                   2009         2008          Variance
Revenues:
Program revenues:
 Operating grants and
 contributions                              $         555,426   $       713,256            $ (157,830)
General revenues:
 Osceola County School Board                     5,761,716           5,774,138                (12,422)
 Interest income                                    25,559             104,024                (78,465)
   Total revenues                                6,342,701           6,591,418               (248,717)
Expenses:
 Basic instruction                               4,409,025           4,429,810                (20,785)
 Board of directors                                  9,161               8,292                    869
 General administration                            627,116             763,552               (136,436)
 Facilities                                      1,127,021           1,127,838                   (817)
 Maintenance of plant                                    -              44,581                (44,581)
   Total expenses                                6,172,323           6,374,073               (201,750)
Increase in net assets                             170,378             217,345                (46,967)
Net assets - July 1,                             2,914,765           2,697,420                217,345
Net assets - June 30,                       $ 3,085,143         $ 2,914,765                $ 170,378


                 Revenues by Source - Governmental Activities
                                             Interest income
                                                   2%

                                                                    Operating grants and
                                                                       contributions
                                                                            11%




        Osceola County School
                Board
                 87%




                                                  6
Financial Analysis of the Government’s Funds

As noted earlier, the Corporation uses fund accounting to ensure and demonstrate compliance
with finance-related legal requirements.

Governmental funds. The focus of the Corporation’s governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the Corporation’s financing requirements. In particular,
unreserved fund balance may serve as a useful measure of a government’s net resources
available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the Corporation’s governmental funds reported combined
ending fund balances of $2,972,254, of which $882,326 constitutes the unreserved undesignated
portion and the remaining fund balance of $2,089,928 is designated to indicate management’s
intended use of resources for specific purposes.

Budgets

The Corporation prepared a budget for the year ended June 30, 2009. Accordingly, financial
statements comparing actual vs. budgeted revenues and expenditures are presented and can be
found on page 24 - 25.

Capital Asset and Debt Administration

Capital assets. The Corporation’s investment in capital assets for its governmental activities as
of June 30, 2009, amounts to $112,889 (net of accumulated depreciation). This investment in
capital assets includes improvements other than buildings, furniture, fixtures, and equipment,
computer software, information technology equipment, and audio visual equipment.

Economic Factors

Funding from the school board according to the number of students enrolled primarily support
the Corporation. Enrollment for the 2008/2009 school year was 981 students.

Request for Information

This financial report is designed to provide a general overview of the Corporation’s finances for
all those with an interest in the Corporation’s finances. Questions concerning any of the
information provided in this report for requests for additional financial information should be
addressed to Sarah E. Graber, Director of Finance at the School District of Osceola County,
Florida, 817 Bill Beck Boulevard, Kissimmee, Florida, 34744-4495.




                                               7
                          Four Corners Charter School, Inc.

                             STATEMENT OF NET ASSETS

                                     June 30, 2009


                                                                           Governmental
                                                                             Activities
CURRENT ASSETS
 Cash                                                                      $    3,262,941
 Due from other agencies                                                           17,263
     Total current assets                                                       3,280,204
CAPITAL ASSETS
 Capital assets, net of accumulated depreciation
  Improvements other than buildings                                                   15,510
  Furniture, fixtures and equipment                                                   69,155
  Computer software                                                                       22
  Information technology and audio visual equipment                                   28,202
     Total capital assets                                                            112,889
       Total assets                                                             3,393,093
CURRENT LIABILITIES
 Due to management company                                                           307,950
     Total current liabilities                                                       307,950
NET ASSETS
 Investment in capital assets                                                     112,889
 Unrestricted                                                                   2,972,254
     Total net assets                                                      $    3,085,143




          The accompanying notes are an integral part of this financial statement.

                                             8
                                          Four Corners Charter School, Inc.

                                             STATEMENT OF ACTIVITIES

                                          For the year ended June 30, 2009




                                                                                                                Net (Expense)
                                                                                                                Revenue and
                                                                                                                 Changes in
                                                                            Program Revenues                     Net Assets
                                                             Charges            Operating       Capital
                                                               for              Grants and    Grants and        Governmental
Functions/Programs                      Expenses             Services          Contributions Contributions        Activities
Governmental activities:
   Basic instruction                  $ 4,409,025        $              -      $          -    $            -   $ (4,409,025)
   Board of directors                       9,161                       -                 -                 -         (9,161)
   General administration                 627,116                       -                 -                 -       (627,116)
   Facilities                           1,127,021                       -          555,426                  -       (571,595)
    Total governmental activities     $ 6,172,323        $              -      $   555,426     $            -       (5,616,897)

                                                                              General revenues:
                                                                               State passed through local
                                                                                 school district                    5,761,716
                                                                               Interest income                         25,559
                                                                                    Total revenues                  5,787,275
                                                                              Change in net assets                    170,378
                                                                              Net assets at July 1, 2008            2,914,765
                                                                              Net assets at June 30, 2009       $   3,085,143




                            The accompanying notes are an integral part of this financial statement.

                                                               9
                                Four Corners Charter School, Inc.

                         BALANCE SHEET - GOVERNMENTAL FUNDS

                                           June 30, 2009
                                                                                               Total
                                                                         Capital           Governmental
                                                   General Fund        Outlay Fund            Funds
                    ASSETS
Cash                                               $ 3,262,941        $             -      $ 3,262,941
Due from other agencies                                 17,263                      -           17,263
     Total assets                                  $ 3,280,204        $             -      $ 3,280,204


   LIABILITIES AND FUND BALANCES
LIABILITIES
  Due to management company                        $     307,950      $             -      $    307,950
     Total liabilities                                   307,950                    -           307,950
FUND BALANCES
 Unreserved:
  Designated for facilities and
   maintenance                                         1,000,791                    -          1,000,791
  Designated for facility use fee                      1,089,137                    -          1,089,137
  Undesignated                                           882,326                    -            882,326
     Total fund balances                               2,972,254                    -          2,972,254
Total liabilities and fund balances                $ 3,280,204        $             -      $ 3,280,204




                The accompanying notes are an integral part of this financial statement.

                                                  10
                                    Four Corners Charter School, Inc.

                        RECONCILIATION OF THE BALANCE SHEET -
                  GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS

                                                June 30, 2009


Fund balances - total governmental funds                                                         $ 2,972,254
The net assets reported for governmental activities
 in the statement of net assets are different because:

 Capital assets used in governmental activities are
  not financial resources and therefore are not reported
  in the governmental funds. Those assets consist of:
    Improvements other than buildings, net of $18,658 accumulated
      depreciation                                                               $     15,510
     Furniture, fixtures and equipment, net of $880,919
      accumulated depreciation                                                         69,155
     Computer software, net of $77,210 accumulated depreciation                             22
     Information technology and audio visual equipment, net of $164,312
     accumulated depreciation                                                          28,202
        Total capital assets                                                                        112,889
Total net assets of governmental activities                                                      $ 3,085,143




                     The accompanying notes are an integral part of this financial statement.

                                                      11
                                   Four Corners Charter School, Inc.

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

                                   For the year ended June 30, 2009


                                                                                                  Total
                                                          General         Capital Outlay      Governmental
                                                           Fund              Fund                Funds
Revenues
 State passed through local school district          $    5,761,716      $       555,426      $   6,317,142
 Interest income                                             25,559                    -             25,559
         Total revenues                                   5,787,275              555,426          6,342,701
Expenditures
 Current:
   Basic instruction                                      4,330,053                      -        4,330,053
   Board of directors                                         9,161                      -            9,161
   General administration                                   627,116                      -          627,116
   Facilities                                             1,123,605                      -        1,123,605
 Fixed capital outlay                                        22,010                      -           22,010
       Total expenditures                                 6,111,945                      -        6,111,945
 Excess (deficiency) of revenues over
  (under) expenditures                                     (324,670)             555,426           230,756
Other financing sources and (uses)
 Transfers in                                               555,426                    -           555,426
 Transfers out                                                    -             (555,426)         (555,426)
         Total other financing sources (uses)               555,426             (555,426)                 -
Net change in fund balance                                  230,756                      -         230,756
Fund balances at July 1, 2008                             2,741,498                      -        2,741,498
Fund balances at June 30, 2009                       $    2,972,254      $               -    $   2,972,254




                  The accompanying notes are an integral part of this financial statements.

                                                     12
                                  Four Corners Charter School, Inc.

        RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND
           CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES -
                             GOVERNMENTAL FUNDS

                                  For the year ended June 30, 2009



Net change in fund balances - total government funds                                         $   230,756
The change in net assets reported for governmental
 activities in the statement of activities is different because:
 Governmental funds report capital outlays as expenditures.
  However, in the statement of activities, the cost of those
  assets are allocated over their estimated useful lives and
  reported as depreciation expense.
      Total fixed capital outlay                                       $       22,010
      Depreciation                                                            (82,388)           (60,378)
Change in net assets of governmental activities                                              $   170,378




                  The accompanying notes are an integral part of this financial statement.

                                                    13
                              Four Corners Charter School, Inc.

                           NOTES TO FINANCIAL STATEMENTS

                                         June 30, 2009


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     1. Reporting entity

     Four Corners Charter School, Inc. (the “Corporation”), which is a component unit of the
     School District of Osceola County, Florida is a not-for-profit corporation organized pursuant
     to Chapter 617, Florida Statutes, the Florida Not-For-Profit Corporation Act, and Section
     1002.33, Florida Statutes. The governing body of the Corporation is the not-for-profit
     corporation Board of Directors, which is comprised of six members.

     The Corporation was formed to operate Four Corners Charter School (the “School”) in
     Osceola County, Florida. The general operating authority of the School is contained in
     Section 1002.33, Florida Statutes. The School operates under charter of the sponsoring
     school district, the District School Board of Osceola County, Florida (the “District”). The
     current charter is effective until June 30, 2010. At the end of the term of the charter, the
     District may choose not to renew the charter under grounds specified in the charter. In this
     case, the District is required to notify the Corporation in writing at least 90 days prior to the
     charter’s expiration. During the term of the charter, the District may also terminate the
     charter if good cause is shown. In the event of termination of the charter, any property
     purchased by the Corporation with public funds and any unencumbered public funds revert
     back to the District. The Corporation is considered a component unit of the District.

     2. Government-wide and fund financial statements

     The government-wide financial statements consist of a statement of net assets and a
     statement of activities. These statements report information on all of the nonfiduciary
     activities of the Corporation. As part of the consolidation process, all interfund activities are
     eliminated from these statements. Both statements report only governmental activities as
     the Corporation does not engage in any business-type activities.

     Net assets, the difference between assets and liabilities, as presented in the statement of
     net assets, are subdivided into two categories: amounts invested in capital assets and
     unrestricted net assets. Net assets are reported as restricted when constraints are
     imposed on the use of the amounts either externally by creditors, grantors, contributors, or
     laws or regulations of other governments, or enabling legislation.

     The statement of activities presents a comparison between the direct and indirect expenses
     of a given function and its program revenues, and displays the extent to which each
     function contributes to the change in net assets for the fiscal year. Direct expenses are
     those that are clearly identifiable to a specific function. Indirect expenses are costs the
     Corporation has allocated to various functions. Program revenues consist of charges for
     services, operating grants and contributions, and capital grants and contributions. Charges
     for services refer to amounts received from those who purchase, use or directly benefit
     from goods, services or privileges provided by a given function or segment. Grants and
     contributions consist of revenues that are restricted to meeting the operational or capital
     requirements of a particular function. Revenues not classified as program revenues are
     reported as general revenues.



                                                14
                             Four Corners Charter School, Inc.

                           NOTES TO FINANCIAL STATEMENTS

                                         June 30, 2009


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     2. Government-wide and fund financial statements (continued)

     Separate fund financial statements report detailed information about the Corporation’s
     governmental funds. The focus of the governmental fund financial statements is on major
     funds. Therefore, major funds are reported in separate columns on the fund financial
     statements. Two of the Corporation’s funds were deemed major funds. Reconciliations are
     provided that convert the results of governmental fund accounting to the government-wide
     presentation.

     3. Measurement focus, basis of accounting, and financial statement presentation

     The government-wide financial statements are reported using the economic resources
     measurement focus and the accrual basis of accounting. Revenues are recognized in the
     period earned and expenses are recognized when a liability is incurred.

     All governmental fund financial statements are reported using a current financial resources
     measurement focus on a modified accrual basis of accounting. Under the modified accrual
     basis of accounting, revenues, except for certain grant revenues, are recognized in the
     accounting period in which they become both measurable and available to finance
     expenditures of the current period. Available means collectible within the current period or
     soon enough thereafter to be used to pay liabilities of the current period, considered to be
     sixty days. When grant terms provide that the expenditure of resources is the prime factor
     for determining eligibility for federal, state, and other grant resources, revenue is recognized
     at the time the expenditure is made.

     Under the modified accrual basis of accounting, expenditures are generally recorded when
     the related fund liability is incurred. However, principal and interest on general long-term
     debt is recorded as expenditures only when payment is due.

     The Corporation’s financial statements have been prepared in accordance with accounting
     principles generally accepted in the United States of America as prescribed by the
     Governmental Accounting Standards Board. Accordingly, the financial statements are
     organized on the basis of funds. A fund is an accounting entity having a self-balancing set
     of accounts for recording assets, liabilities, fund equity, revenues, expenditures, and other
     financing sources and uses.

     Resources are allocated to and accounted for in individual funds based on the purpose for
     which they are to be spent and the means by which spending activities are controlled. The
     Corporation reports the following major governmental funds:

            General Fund - the general operating fund of the Corporation. It is used to account
            for all financial resources not required to be accounted for in another fund.

            Capital Outlay Fund - in accordance with the guidelines established by the District,
            this fund accounts for all resources for the leasing and acquisition of capital facilities
            by the Corporation to the extent funded by capital outlay funds.

                                               15
                              Four Corners Charter School, Inc.

                            NOTES TO FINANCIAL STATEMENTS

                                         June 30, 2009


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     3. Measurement focus, basis of accounting, and financial statement presentation
        (continued)

     When both restricted and unrestricted resources are available for use, it is the
     Corporation’s policy to use restricted resources first, then unrestricted resources as they
     are needed.

     The Corporation has contracted operations of the School to a commercial management
     company. The management company accounts for certain school level assets, liabilities,
     revenues and expenses that are not a part of the Corporation. These items, including the
     functional classification of expenses, are not reported in the Corporation’s financial
     statements.

     4. Cash

     The Corporation’s cash consists of a checking account. Deposits are held and maintained
     by the District. All deposits are insured by federal depository insurance and, are
     collateralized with securities held in Florida’s multiple financial institution collateral pool as
     required by Chapter 280, Florida Statutes.

     5. Receivables

     Receivables consist of amounts due from other agencies. The Corporation’s management
     determined that 100% of receivables are fully collectible. Therefore, no allowance for
     doubtful accounts has been provided.

     6. Interfund receivables, payables and transfers

     Interfund receivables and payables represent activity between the funds that are
     representative of lending/borrowing arrangements outstanding at the end of the fiscal
     year are referred to as either due to/from other funds. The capital fund transferred
     $555,426 to the general fund for payment of rent expense related to the facilities sub-
     lease (see Note E-2).

     7. Capital assets

     Capital assets are reported in the applicable governmental columns on the government-
     wide financial statements. Capital assets are defined by the Corporation as assets with an
     initial individual cost of more than $750 and an estimated useful life of greater than one
     year. Such assets are recorded at historical cost. Donated capital assets are recorded at
     their estimated fair market values at the date of donation.




                                                16
                            Four Corners Charter School, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                                      June 30, 2009


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     7. Capital assets (continued)

     The cost of normal maintenance and repairs that do not add to the value of the asset or
     materially extend the asset’s lives are not capitalized.

     Capital assets of the Corporation are depreciated using the straight-line method over the
     following estimated useful lives:

                                                             Estimated Useful
                                  Asset Class                     Lives
                    Improvements other than buildings             7 - 15
                    Furniture, fixtures and equipment             5 - 10
                    Computer software                                3
                    Information technology equipment               3-7
                    Audio visual equipment                         3-7

     8. Revenue sources

     Revenues for current operations are received primarily from the State of Florida passed
     through the District pursuant to the funding provisions included in the Corporation’s
     charter agreement with the District. In accordance with the funding provisions of the
     charter and Section 1002.33(17), Florida Statutes, the District reports the number of FTE
     students and related data to the Florida Department of Education (FDOE) for funding
     through the Florida Education Finance Program. Funding for the Schools are adjusted
     during the year to reflect revised calculations by the FDOE under the Florida Education
     Finance Program and actual weighted FTE students reported by the Schools during
     designated FTE student survey periods.

     The Corporation received federal awards for the enhancement of various educational
     programs. The assistance is generally based on applications submitted to and approved
     by various granting agencies. These federal awards may have requirements whereby
     the issuance of grant funds is withheld until qualifying expenditures are incurred.
     Revenues for these awards are recognized only to the extent that eligible expenditures
     have been incurred.

     The Corporation is also eligible for charter school capital outlay funding. The amounts
     received under this program are based on actual and projected student enrollment
     during the year. Funds received under this program may only be used for lawful capital
     outlay expenditures.




                                            17
                             Four Corners Charter School, Inc.

                            NOTES TO FINANCIAL STATEMENTS

                                           June 30, 2009


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     9. Expenses
     A commercial management company operates the School pursuant to a long-term contract
     with the Corporation. The management company is responsible for payment of virtually all
     operating expenses. Actual expenses paid by the management company may differ
     significantly from amounts paid and expensed by the Corporation. For this reason,
     functional detail of the School’s expenditures are not available and have not been
     presented in the financial statements.

     10. Classification of fund balances

     In the fund financial statements, designations segregate portions of fund balance that are
     earmarked for specific purposes. The various designations are established by the Board.

     Unreserved fund balances in the fund financial statements are designated by the Board as
     follows:

                   General Fund
                   Designated for facilities and maintenance          $   1,000,791
                   Designated for facility use fee                        1,089,137
                   Undesignated fund balance                                882,326
                                                                      $   2,972,254

     11. Use of estimates

     The process of preparing financial statements in conformity with accounting principles
     generally accepted in the United States of America requires the use of estimates and
     assumptions regarding certain types of assets, liabilities, revenues and expenses. Such
     estimates primarily relate to unsettled transactions and events as of the date of the financial
     statements. Accordingly, upon settlement, actual results may differ from estimated
     amounts.

NOTE B - CASH

     Custodial credit risk - The bank balance of the School’s deposits were $4,399,750 at
     June 30, 2009. The deposits are insured by the FDIC up to $250,000 per entity. Monies
     invested in amounts greater than the insurance coverage are secured by the qualified
     public depositories pledging securities with the State Treasurer in such amounts required
     by the Florida Security for Public Deposits Act. In the event of a default or insolvency of a
     qualified public depositor, the State Treasurer will implement procedures for payment of
     losses according to the validated claims of the School pursuant to Section 280.08, Florida
     Statutes.




                                                18
                             Four Corners Charter School, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                                          June 30, 2009


NOTE C - CAPITAL ASSETS

     Capital assets activity for the year ended June 30, 2009 was as follows:

                                                Balance at                               Balance at
                                                 July 1,                                  June 30,
                                                  2008          Additions    Deletions      2009
      Capital assets depreciated
       Improvements other than buildings        $      34,168   $      -     $       -   $  34,168
       Furniture, fixtures and equipment              950,074          -             -     950,074
       Computer software                               77,232          -             -      77,232
       Information technology equipment               168,949     22,010             -     190,959
       Audio visual equipment                           1,555          -             -       1,555
         Total assets depreciated                   1,231,978   $ 22,010     $       -   1,253,988
      Less accumulated depreciation
       Improvements other than buildings               15,242      3,416             -      18,658
       Furniture, fixtures and equipment              854,464     26,455             -     880,919
       Computer software                               76,084      1,126             -      77,210
       Information technology equipment               111,470     51,287             -     162,757
       Audio visual equipment                           1,451        104             -       1,555
         Total accumulated depreciation             1,058,711   $ 82,388     $       -   1,141,099
      Total governmental activities
       capital assets, net                      $ 173,267                                $ 112,889

     Depreciation expense for the year ended June 30, 2009 was charged to functions of the
     Corporation as follows:

                      Basic instruction                    $        78,972
                      Facilities                                     3,416
                                                           $        82,388




                                               19
                            Four Corners Charter School, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                                        June 30, 2009


NOTE D - CONCENTRATIONS

     Revenue sources

     As stated in Note A-8, the Corporation receives revenues for current operations primarily
     from the State of Florida passed through the District. The following is a schedule of
     revenue sources and amounts:

                                     Source                           Amount
                 Osceola County District School Board
                  Base funding                                    $    3,777,621
                  Safe schools                                            19,711
                  ESE guaranteed allocation                               63,709
                  Supplemental academic instruction                      234,224
                  Reading program                                         40,151
                  Class size reduction funds                           1,024,009
                  Discretionary millage                                  333,475
                  Discretionary tax equalization allocation               77,316
                  Discretionary lottery                                   23,505
                  Instructional materials allocation                      90,933
                  Declining enrollment                                    31,212
                  Equal percent adjustment                                 1,163
                  Merit award program                                     51,169
                  Proration to available funds                            (6,482)
                     Subtotal                                          5,761,716
                   Capital outlay distribution                           555,426
                      Total from the Osceola County District
                       School Board                                    6,317,142
                 Other revenues
                  Interest income                                         25,559
                                                                  $    6,342,701
NOTE E - COMMITMENTS AND CONTINGENCIES

     1. Management service contract

     The Corporation entered into a management agreement, commencing on July 1, 2006,
     with a management company. The agreement is for a term of five years that
     commenced with the 2006-2007 school year. The contract terminates the earlier of
     June 30, 2011, or if the District terminates or does not renew the charter.




                                                 20
                               Four Corners Charter School, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                                        June 30, 2009


NOTE E - COMMITMENTS AND CONTINGENCIES (continued)

     1. Management service contract (continued)

     The management company will manage and operate the School during the term of the
     agreement. The management company is guaranteed a fee of $370,000 plus a
     contingent incentive fee. The incentive fee is calculated as the difference between the
     guaranteed fee and 12% of FEFP operational revenues. Current year management fees
     charged to operations totaled $627,116.

     2. Facilities sub-lease

     The real property, buildings, and other assets, which comprise the School’s facilities, are
     owned by the District. Construction of the buildings was financed by the issuance of
     $8,315,000 principal amount of Certificates of Participation, Series 2000A and
     $6,385,000 principal amount of Certificates of Participation, Series 2000B (the
     “Certificates”), which are obligations of the District.

     On April 19, 2005, the District issued $12,095,000 principal amount of Certificates of
     Participation, Series 2005. The proceeds were used to refund a portion of the
     outstanding Series 2000 Certificates maturing on and after August 1, 2011 (the
     “Refunded Certificates”) and, therefore, refinanced a portion of the cost of the
     acquisition, construction and equipping of the Series 2000 Facilities and reduced the
     corresponding basic lease payments due under the lease.

     The School is entitled to use the facilities under a sub-lease agreement with the District
     that requires annual payments in amounts equal to the annual debt service payments on
     the Certificates. Such annual payments range from $648,896 to $1,118,156 for the
     School. At the end of the term of the charter including renewals, if any, possession of
     the facilities will revert to the District which will be liable for all future payments.

     Current year facilities expense charged to operations totaled $1,123,605. This amount
     is included in the “Facilities” functional expense category on the accompanying
     statement of activities and statement of revenues, expenditures and changes in fund
     balances. A portion of the facility use fee in the amount of $555,426 was reimbursed
     through capital outlay funds.




                                              21
                            Four Corners Charter School, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                                       June 30, 2009


NOTE E - COMMITMENTS AND CONTINGENCIES (continued)

     2. Facilities sub-lease (continued)

     Aggregate remaining rental commitments under this sub-lease agreement are
     summarized as follows at June 30:

                               2010                    $   1,117,238
                               2011                        1,117,056
                               2012                        1,109,831
                               2013                        1,111,269
                               2014                        1,115,956
                               2015-2019                   5,565,344
                               2020-2024                   5,565,819
                                                       $ 16,702,513

     3. Legal issues

     In the normal course of conducting its operations, the Corporation occasionally becomes
     involved in various legal actions and proceedings. In the opinion of management, the
     ultimate resolution of such legal matters will not have a significant adverse effect on the
     accompanying financial statements.

NOTE F - RISK MANAGEMENT

     The Corporation and School are exposed to various risks of loss related to torts; theft of,
     damage to, and destruction of assets; errors and omissions; and natural disasters for
     which the School carries commercial insurance. Under the plan for property insurance,
     the liability is $5,000 per occurrence. There have been no significant reductions in
     insurance coverage during fiscal year 2009. Settled claims resulting from the risks
     described above have not exceeded the insurance coverage during the previous three
     years.




                                             22
REQUIRED SUPPLEMENTARY INFORMATION




             23
                                        Four Corners Charter School, Inc.

           SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
                           BUDGET AND ACTUAL - GENERAL FUND

                                        For the year ended June 30, 2009




                                                         Budgeted Amounts
                                                                                                        Variance
                                                                                                        with Final
                                                      Original           Final         Actual            Budget
Revenues
 State passed through local school district       $ 5,570,137        $ 5,805,395     $ 5,761,716    $      (43,679)
 Other revenues                                        78,000             38,000          25,559           (12,441)
          Total revenues                              5,648,137         5,843,395      5,787,275           (56,120)
Expenditures
 Current:
   Basic instruction                                  4,090,370         4,275,674      4,352,063           (76,389)
   Board of directors                                    28,000            38,000          9,161            28,839
   General administration                               796,600           828,486        627,116           201,370
   Facilities                                           533,168         1,133,168      1,123,605             9,563
   Maintenance of plant                                  50,000                 -              -                 -
        Total expenditures                            5,498,137         6,275,328      6,111,945           163,383
Excess of revenues over expenditure                     150,000          (431,933)      (324,670)          107,263
Other financing sources and uses
 Transfers in                                                    -        581,933        555,426            26,507
        Total other financing sources                            -        581,933        555,426            26,507
Net change in fund balance                              150,000           150,000        230,756           107,263
Fund balances at July 1, 2008                         2,741,498         2,741,498      2,741,498                     -
Fund balances at June 30, 2009                    $ 2,891,498        $ 2,891,498     $ 2,972,254    $      107,263




                                   See note to required supplemental information.

                                                        24
                                      Four Corners Charter School, Inc.

          SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
                       BUDGET AND ACTUAL - CAPITAL OUTLAY FUND

                                      For the year ended June 30, 2009



                                                      Budgeted Amounts

                                                                                                       Variance with
                                                    Original           Final              Actual       Final Budget
Revenues
 State passed through local school district     $     600,000      $   581,933        $    555,426     $    (26,507)
Expenditures
   Facilities                                         600,000                -                   -                -
Excess of revenues over expenditures                        -          581,933             555,426          (26,507)
Other financing sources and uses
 Transfers out                                                 -       (581,933)          (555,426)         (26,507)
         Total other financing uses                            -       (581,933)          (555,426)         (26,507)
Net change in fund balance                                     -              -                  -                -
Fund balances at July 1, 2008                                  -              -                  -                -
Fund balances at June 30, 2009                  $              -   $              -   $            -   $          -




                                 See note to required supplemental information.

                                                       25
                           Four Corners Charter School, Inc.

                NOTE TO REQUIRED SUPPLEMENTAL INFORMATION

                                      June 30, 2009

NOTE A - BUDGETARY BASIS OF ACCOUNTING

     Budgetary basis of accounting

     Annual budgets are adopted at the fund level and may be amended by the Board of
     Directors (the “Board”). The budgets presented for fiscal year ended June 30, 2009, have
     been amended according to Board procedures. Budgets are adopted on the modified
     accrual basis of accounting. The legal level of budgetary control is the fund level.




                                            26
                                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


                           Board of Directors
                           Four Corners Charter School, Inc.
                           Kissimmee, Florida

                           We have audited the financial statements of the governmental activities and each
                           major fund of Four Corners Charter School, Inc., (the “Corporation”), a component
                           unit of the School District of Osceola County, as of and for the year ended June 30,
                           2009, which collectively comprise the Four Corners Charter School, Inc.’s basic
                           financial statements and have issued our report thereon dated November 20, 2009.
 8035 Spyglass Hill Road
                           We conducted our audit in accordance with auditing standards generally accepted in
    Melbourne, FL 32940
                           the United States of America and the standards applicable to financial audits
           321.757.2020
                           contained in Government Auditing Standards, issued by the Comptroller General of
      FAX 321.242.4844
                           the United States.

                           Internal Control Over Financial Reporting
     480 N. Orlando Ave.
               Suite 218
                           In planning and performing our audit, we considered Four Corners Charter School,
   Winter Park, FL 32789
                           Inc.‘s internal control over financial reporting as a basis for designing our auditing
           407.644.5811
      FAX 407.644.6022
                           procedures for the purpose of expressing our opinions on the financial statements,
                           but not for the purpose of expressing an opinion on the effectiveness of Four Corners
                           Charter School, Inc.’s internal control over financial reporting. Accordingly, we do not
     301 Clematis Street   express an opinion on the effectiveness of Four Corners Charter School, Inc.’s
             Suite 3000    internal control over financial reporting.
W. Palm Beach, FL 33401
          561-837-6627     A control deficiency exists when the design or operation of a control does not allow
      FAX 561-837-6632     management or employees, in the normal course of performing their assigned
                           functions, to prevent or detect misstatements on a timely basis. A significant
                           deficiency is a control deficiency, or combination of control deficiencies, that
                           adversely affects the School’s ability to initiate, authorize, record, process or report
   www.bermanhopkins.com   financial data reliably in accordance with generally accepted accounting principles
                           such that there is more than a remote likelihood that a misstatement of Four Corners
                           Charter School, Inc.’s financial statements that is more than inconsequential will not
                           be prevented or detected by Four Corners Charter School, Inc.’s internal control.

                           A material weakness is a significant deficiency, or combination of significant
                           deficiencies, that results in more than a remote likelihood that a material
                           misstatement of the financial statements will not be prevented or detected by Four
                           Corners Charter School, Inc.’s internal control.




                                                                 27
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies in
the internal control that might be significant deficiencies and, accordingly, would not necessarily
disclose all significant deficiencies that are also considered to be material weaknesses. We did not
identify any deficiencies in internal control over financial reporting that we consider to be material
weaknesses, as defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Four Corners Charter School, Inc.’s
financial statements are free from material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no
instances of noncompliance or other matters that are required to be reported under Government
Auditing Standards.

This report is intended solely for the information and use of the Corporation’s management, the
School District of Osceola County, Florida, the State of Florida Office of the Auditor General and
other regulatory agencies of federal and state governments and is not intended to be and should
not be used by anyone other than these specified parties.

November 20, 2009                                      Berman Hopkins Wright & LaHam
Melbourne, Florida
                                                           CPAs and Associates, LLP




                                                  28
                                                          MANAGEMENT LETTER


                           Honorable Board of Directors
                           Four Corners Charter School, Inc.
                           Kissimmee, Florida

                           We have audited the financial statements of the governmental activities and each major
                           fund of Four Corners Charter School, Inc. (the “Corporation”), a component unit of the
                           School District of Osceola County, Florida as of and for the fiscal year ended June 30,
                           2009, and have issued our report thereon dated November 20, 2009.

                           We conducted our audit in accordance with auditing standards generally accepted in
                           the United States of America; the standards applicable to financial audits contained in
 8035 Spyglass Hill Road
                           Government Auditing Standards, issued by the Comptroller General of the United
    Melbourne, FL 32940
                           States. We have issued our Independent Auditor’s Report on Internal Control over
           321.757.2020
                           Financial Reporting and Compliance and Other Matters. Disclosures in that report,
      FAX 321.242.4844     which is dated November 20, 2009, should be considered in conjunction with this
                           management letter.

     480 N. Orlando Ave.   Additionally, our audit was conducted in accordance with Chapter 10.850, Rules of the
               Suite 218   Auditor General, which governs the conduct of the charter school and similar entity
   Winter Park, FL 32789   audits performed in the State of Florida. This letter includes the following information,
           407.644.5811    which is not included in the aforementioned auditor’s reports or schedule:
      FAX 407.644.6022
                               •   Section 10.854(1)(e)1., Rules of the Auditor General, requires that we
                                   determine whether or not corrective actions have been taken to address
     301 Clematis Street           findings and recommendations made in the preceding annual financial audit
             Suite 3000            report. There were no significant findings and recommendations made in the
W. Palm Beach, FL 33401            preceding annual financial audit report.
          561-837-6627
      FAX 561-837-6632         •   Section 10.854(1)(e)3., Rules of the Auditor General, requires that we
                                   address in the management letter any recommendations to improve financial
                                   management. In connection with our audit, we did not have any such
                                   recommendations.
   www.bermanhopkins.com

                               •   Section 10.854(1)(e)4., Rules of the Auditor General, requires that we
                                   address violations of laws, regulations, contracts or grant agreements, or
                                   abuse that have occurred, or are likely to have occurred, that have an effect
                                   on the financial statements that is less than material but more than
                                   inconsequential. In connection with our audit, we did not have any such
                                   finding.




                                                                  29
   •   Section 10.854(1)(e)5., Rules of the Auditor General, provides that the auditor may,
       based on professional judgment, report the following matters that are inconsequential to
       the determination of financial statement amounts, considering both quantitative and
       qualitative factors: (1) violations of laws, regulations, contracts or grant agreements, or
       abuse that have occurred, or are likely to have occurred, and (2) control deficiencies that
       are not significant deficiencies, including, but not limited to; (a) improper or inadequate
       accounting procedures (e.g., the omission of required disclosures from the annual
       financial statements); (b) failures to properly record financial transactions; and (c)
       inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that
       come to the attention of, the auditor. In connection with our audit, we did not have any
       such findings.

   •   Section 10.854(1)(e)6., Rules of the Auditor General, requires the name or official title of
       the school. The official title of the school is Four Corners Charter School, Inc., which is a
       not-for-profit corporation organized pursuant to Chapter 617, Florida Statutes, the
       Florida Not-For-Profit Act, and Section 1002.33, Florida Statutes.

   •   Section 10.854(1)(e)2., Rules of the Auditor General, requires a statement be included
       as to whether or not the school has met one or more of the conditions described in
       Section 218.503(1), Florida Statutes, and identification of the specific condition(s) met. In
       connection with our audit, we determined that Four Corners Charter School, Inc. did not
       meet any of the conditions described in Section 218.503(1), Florida Statutes.

   •   Pursuant to Sections 10.854(1)(e)7.a. and 10.855(10)., Rules of the Auditor General, we
       applied financial condition assessment procedures. It is management’s responsibility to
       monitor the Four Corners Charter School, Inc.’s financial condition, and our financial
       condition assessment was based in part on representations made by management and
       the review of financial information provided by same.

Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its
distribution is not limited. Auditing standards generally accepted in the United States of America
require us to indicate that this letter is intended solely for the information and use of the
Corporation’s management, the Florida Auditor General, other regulatory agencies of federal and
state governments, and the School District of Osceola County, Florida, and is not intended to be
and should not be used by anyone other than these specified parties.

November 20, 2009                                    Berman Hopkins Wright & LaHam
Melbourne, Florida
                                                         CPAs and Associates, LLP




                                                30
                           Comments and Recommendations

For the year ended June 30, 2009, there are no comments and recommendations.




                                           31

								
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