United Independent School District

Comprehensive Annual Financial Report

For The Year Ended August 31, 2012

Roberto J. Santos Superintendent of Schools

201 Lindenwood Drive Laredo, Texas 78045 (956) 473-6201

http://www.uisd.net/

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas

COMPREHENSIVE ANNUAL FINANCIAL REPORT

Year Ended August 31, 2012

Prepared by: The Division of Finance

UNITED INDEPENDENT SCHOOL DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED AUGUST 31, 2012

TABLE OF CONTENTS

INTRODUCTION SECTION Letter of Transmittal ...... 1 GFOA Certificate of Achievement ...... 11 Principal UISD Official’s ...... 12 Organizational Chart ...... 13 Certificate of Board ...... 14

FINANCIAL SECTION Independent Auditors’ Report ...... 17 Management’s Discussion and Analysis ...... 21 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets ...... 33 Statement of Activities ...... 34 Fund Financial Statements: Balance Sheet – Government Funds ...... 36 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets ...... 37 Statement of Revenues, Expenditures and Changes in Fund Balances – Government Funds...... 38 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ...... 39 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund ...... 40 Statement of Net Assets - Proprietary Funds ...... 41 Statement of Revenues, Expenditures, and Changes in Fund Net Assets - Proprietary Funds...... 42 Statement of Cash Flows - Proprietary Funds ...... 43 Statement of Fiduciary Net Assets - Fiduciary Funds ...... 45 Notes to the Financial Statements...... 49 Combining and Individual Fund Statements and Schedules: Combining Balance Sheet – Non-major Governmental Funds ...... 84 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Non-major Governmental Funds ...... 90 Statement of Changes in Assets and Liabilities - Agency Fund ...... 96 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual: Enterprise Fund ...... 97 Debt Service Fund ...... 98 Texas Education Agency – Required Schedules: Schedule of Delinquent Taxes Receivable ...... 100 Schedule of Expenditures for Computations of Indirect Costs for 2013-2014 General and Special Revenue Funds ...... 102 Fund Balance and Cash Flow Worksheet – General Fund ...... 103 UNITED INDEPENDENT SCHOOL DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED AUGUST 31, 2012

TABLE OF CONTENTS

FINANCIAL SECTION continued… Capital Assets Used in the Operation of Governmental Funds: Investment in Governmental Funds Capital Assets by Source ...... 107 Schedule by Function and Activity ...... 108 Schedule of Changes in General Fixed Assets ...... 115

STATISTICAL SECTION Financial Trends Information: Net Assets by Component ...... 128 Changes in Net Assets ...... 130 General Revenues and Total Changes in Net Assets ...... 132 Fund Balances for Governmental Funds ...... 134 Governmental Funds Revenues ...... 136 Changes in Fund Balances of Governmental Funds ...... 138 Local Revenues by Source, Governmental Funds ...... 140 Revenue Capacity Information: Assessed Value and Actual Value of Taxable Property ...... 142 Property Tax Rates - Direct and Overlapping Governments ...... 144 Principal Property Taxpayers ...... 146 Property Tax Levies and Collections ...... 147 Debt Capacity Information: Ratios of Net Bonded Debt to Taxable Assessed ...... 148 Legal Debt Margin Information...... 150 Direct and Overlapping Governmental Activities Debt ...... 152 Demographic and Economic Information: Demographic and Economic Statistics ...... 153 Principal Employers ...... 154 Operating Information: Full-time Equivalent District Employees by Type ...... 155 Operating Statistics ...... 156 Teacher Base Salaries ...... 157 Measures of Capacity ...... 158

FEDERAL AWARDS SECTION Independent Auditors' Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...... 161 Independent Auditors' Report on Compliance with Requirements Applicable To each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 ...... 163 Schedule of Findings and Questioned Costs ...... 165 Summary Schedule of Prior Audit Findings ...... 167 Schedule of Expenditures of Federal Awards ...... 168 Notes on Accounting Policies for Federal Awards ...... 170 CAFR for the Year Ending August 31, 2012

United Independent School District Division of Finance 201 Lindenwood Drive, Laredo, Texas 78045 (956) 473-6222, Fax (956) 473-6399 [email protected]

December 15, 2012

Board of Trustees United Independent School District 201 Lindenwood Drive Laredo, Texas 78045

Dear Board Members:

We are pleased to present the United Independent School District (the District) Comprehensive Annual Financial Report (CAFR) for the year ending August 31, 2012. The report was prepared by the Division of Finance-Accounting Department. Responsibility for the accuracy and fairness of the financial information and disclosures contained in the report rests solely with this division. The District’s annual audited financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information are presented in conformity with requirements established by the Texas Education Agency in their Financial Accountability Systems Resource Guide. The District’s independent auditors were Pattillo, Brown & Hill, L.L.P. and their opinion letter is hereby made a part of this report. The report as submitted to the Texas Education Agency has been modified to conform to the reporting format required by the Government Finance Officers Association. In addition, the Management’s Discussion and Analysis section is an integral part of the CAFR and can be found on page 21.

Texas law requires that each public school district in the state undergo an annual audit conducted by an independent audit firm. This audit must be done in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. The audit must also comply with the requirements of the U.S. Office of Management and Budget Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations,” and other grantors regulations. The goal of the independent audit was to provide reasonable assurance that the financial statements of United Independent School District for fiscal year ended August 31, 2011, are free of material misstatement and are presented in conformity with generally accepted accounting principles (GAAP). The independent auditor’s report can be found on page 17.

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Profile of the Government

The District is a political subdivision and is an independent reporting entity as defined by the Governmental Accounting Standards Board Statement No. 14 (GASB 14). The District is located in Webb County, Texas and serves a population of approximately 251,096 persons and provides services to a large portion of the City of Laredo. The District was established in 1961 and “united” three small school districts that were in existence at the time. These were Cactus School District, which was located 28 miles north of Laredo on the Callaghan Ranch, Johnson School District, which was located in South Laredo on state highway 83, and Nye School District, located on the northern edge of the City of Laredo.

The District currently comprises north and southeast Laredo, as well as, 75 percent of Webb County covering 2,448 square miles and is considered one of the fastest growing public school districts in the state of Texas. During the last several years, the District’s enrollment has risen from 39,447 students in 2007-2008 to 42,282 students in 2011-2012. Current projections show the District’s student enrollment will continue to grow by approximately 623 students per year for the next four years.

The District is made up of 27 Elementary Schools (Pre-Kinder to 5th Grade), 9 Middle Schools (Grades 6, 7 and 8th), 4 High Schools, including one ninth grade campus, (Grades 9, 10, 11 and 12th), 3 Magnet Schools (Grades 9-12th), 1 Alternative Education Center, and 4 Odessyware recovery and prevention programs. The student population of the District in 2011-2012 was primarily Hispanic American (96.4%), The remaining population consisted of White Americans (2.5%), African American (0.3%), Native America (0.1%) and Asian/Pacific Islanders (0.7%).

The policy-making functions of the District lie with a seven-member Board of Trustees (the Board), each of which is elected from a single-member district for three-year staggered terms. The Board receives funding from local, state and federal source entities. However, the Board is not included in any other reporting entity as defined by GASB 14. This report contains all funds pertaining to the District. Serving without compensation, Board members establish the policies by which schools operate. In carrying out the task of setting policy, the board identifies needs and establishes priorities for the school system, allocates financial and human resources among the priority areas and evaluates school performance.

On an annual basis, the District presents the Board of Trustees with the proposed budgets for the General Operating Fund, the Debt Service Fund, and the Food Service Fund for approval as required by the Texas Education Code and as described in the Texas Education Agency’s Financial Accountability Systems Resource Guide. The proposed budget is presented to the Board summarized at the function level for each of the funds above. The Board is required to hold a public hearing on the proposed budget and to adopt a final budget no later than August 31, the close of the District’s fiscal year. After adoption of the budget, the appropriation amounts are entered into the District’s

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accounting and encumbrance system and monitoring of the expenditures and encumbrances in relation to the approved budget begins. Budget managers have the authority to approve budget transfers anytime during the year. A budget transfer is the movement of appropriations between budget line items within the same function. Any request to move appropriations between budget line items to different functions is considered a budget amendment. Any budget amendment requested by budget managers requires Board approval. Expenditure requests will not be processed unless appropriations are available in the line item.

The District feels that the budgetary controls currently in place are adequate to ensure that expenditures remain within the approved budget and that the District complies with regulations established by the Texas Education Code and the Financial Accountability Systems Resource Guide.

The District evaluates the existing system of internal controls annually through self- evaluation, internal auditing and the annual independent financial and compliance audit. Internal controls are designed to provide reasonable, but not absolute, assurance regarding: 1) the safeguarding of assets against loss from authorized use or disposition; and 2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that: 1) the cost of controls should not exceed benefits expected to be derived; and 2) the evaluation of costs and benefits requires estimates and judgments by management.

Academics play a significant role in the lives of our students. Our campuses offer a wide variety of courses in all academic areas, including gifted and talented and advanced placement courses at our high schools. The District continues to support existing programs such as career/technology and expanding programs such as the Science, Business, and Engineering Magnet Schools. The focal point of this year’s budget is on instruction with budgeted expenditures for students and teachers making up over 67% of the General Fund budget. The District budgeted $227,233,843 for the 2011-2012 school year on instructional and instructional related service funds. This represents 77% of the District’s operating budget for the 2011-2012 fiscal year.

With the difficulty in accessing the city’s few libraries, some campuses have become hubs for learning and reading through Library Nights, Family Reading Nights, Picnic Up a Good Book and Read, and Bibliotherapy. Technology Linking the Community program fosters technological literacy in parents and to the community through classes offered at several campuses.

In addition, the District funds the several college readiness programs which helps provide training for students from grades 6 – 12 on college preparatory materials and issues. Some of the critical factors it offers are introducing the idea of college at a very early age, and encourages parental involvement through its FUNdamentals of College Admissions Program that helps families make decisions about college.

In the spring of 2012, the State of Texas Assessments of Academic Readiness (STAAR) replaced the Texas Assessment of Knowledge and Skills (TAKS). The STAAR program

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at grades 3-8 will assess the same subjects and grades that are currently assessed on TAKS. At the high school, however, grade-specific assessments will be replaced with 12 end-of-course (EOC) assessments: Algebra I, geometry, Algebra II, biology, chemistry, physics, English I, English II, English III, World Geography, World History, and U.S. History.

On the STAAR EOC assessments, there are three levels that describe student performance:

Level III: Advanced Academic Performance level II - Satisfactory Academic Performance Level I - Unsatisfactory Academic Performance.

Due to the continued growth the District is experiencing, the number of teachers with less than five years teaching experience makes up more than 35.7% of the total teachers in the District. The District sustains a teacher mentor program, called “Pathfinders of the 21st Century”, which provides role models of effective instructional strategies for those teachers new to the profession. The District believes the Pathfinder program has had a positive impact on the TAKS test.

Factors Affecting Financial Condition

Federal Government

On Feb. 13, 2009, Congress passed the American Recovery and Reinvestment Act (ARRA) of 2009 which was signed it into law four days later. A direct response to the economic crisis, the Recovery Act has three immediate goals, (1) Create new jobs as well as save existing ones, (2) Spur economic activity and invest in long-term economic growth, and (3) Foster unprecedented levels of accountability and transparency in government spending. These funds total over $20,695,336 for United ISD. To date, United ISD has spent all ARRA funds.

State Government

Approximately 70% of the state revenue earned by the District is attributed to the student growth and special populations of students it serves. The “foundation” funding level is driven by the average daily attendance (ADA) of students and the full-time equivalents (FTE) of special populations such as bilingual, special education and economically disadvantaged students. It is imperative the District takes measures to encourage student attendance and identify those students with special needs.

The State of Texas held its 82nd legislative session in the spring of 2011. The passage of Senate Bill 1 had an impact on state funding for public education by decreasing the amount allocated to schools by approximately 6% for the 2012 year and 8% decrease for the 2013 year. For UISD, the state revenue based on current law means that we received $16 million less in state funding for 2012 and an expected $9 million less in 2013 for a total reduction of $25 million.

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Local Economy

Employment and the Labor Force

Laredo is considered the “Gateway to Mexico” and is a strategically positioned land port that connects Mexico’s principle highway and railroad with U.S. rail lines and U.S. Interstate 35, which services Texas seaports and northern U.S. states. International trade, transportation, retail trade, oil and gas, and tourism continue to play a major role in the Laredo/Webb County area economy. Laredo’s economy reaches the over 6,000,000 people from Monterrey, Mexico and the surrounding areas. Laredo is one of the fastest growing city east of the Rocky Mountains and the most competitive NAFTA crossing into Mexico.

Webb County continues to show growth in population and industry, with the majority of the growth situated within the boundaries of the District. The top ten employers in the area consist of one medical service facilities, two grocery/retail store, one fast food restaurant and six government institutions including the City of Laredo, the County of Webb, Laredo ISD, United ISD, Texas A&M International University, and the Laredo Sector Border Patrol. Together, these employers provide jobs for over 22,690 people. The population in the Laredo/Webb County area was estimated to have reached 236,091 persons for the year 2010 according to the Laredo Development Foundation.

The area felt the effect of the peso devaluation in 1995 and 1996 with the unemployment rate rising into the double-digit range. However, the economy in Mexico has stabilized and the unemployment rate in the Laredo area is the lowest on the U.S. – Mexican border currently at 6.4%. This is a slight increase over the average of the past 5 years of 5.0%. The industries in the area showing the most gains were transportation, public utilities, communications, and the government sector. The “maquiladora” companies in the area continue to cause the manufacturing process to shift into Mexico, with the United States side benefiting from increased freight forwarding, transportation, and warehousing services.

International Trade

Webb County, Texas is located on the border where U.S. Highway 35 meets the Mexico border across from Nuevo Laredo, Tamaulipas, Mexico. International bridges I and II are located between Laredo and Nuevo Laredo and international bridge III is located between Laredo and the city of Colombia, Mexico. International bridge IV is in the northwest portion of Laredo and is used primarily for freight transportation purposes. The opening of this fourth bridge has helped alleviate the traffic congestion that was being experienced at the other three bridges. The Laredo City Council, as well as the County of Webb, have instructed their administrations to move forward with the application process, in conjunction with Mexico, for a fifth international bridge for non-commercial use.

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With its proximity to Mexico, the area’s largest factor on the local economy continues to be the trade between the United States and Mexico. Laredo is the number one inland port along the US-Mexico border crossing over $114.0 billion in imports and export according to the Laredo Development Foundation. The North American Free Trade Agreement (NAFTA) continues to provide Laredo with tremendous growth in freight forwarding, freight transportation and freight storage industries. Imports and exports between the United States and Mexico passing through the Laredo area have risen steadily over the last five years. Over 700 of Fortune 1,000 companies do international business via Laredo. The international bridges crossed over 2,441,307 trucks and 510,389 loaded rail cars along with 457.1 million pounds of air freight in 2011. This “traffic” has spurred increases in other industries such as retail sales, construction and government.

Oil and Gas Industry

The oil and gas industry continues to be a factor in the Webb County/District economy. In prior years, with the District being considered a rural school district, mineral values made up a substantial portion of the total property values for the District. The Eagle Ford Shale hydrocarbon production is a major oil and gas undertaking located in the North Western part of the District. This production has significant importance due to its capability of producing both gas and more oil than other traditional shale plays. The shale play trends across Texas from the Mexican border up into East Texas, roughly 50 miles wide and 400 miles long with an average thickness of 250 feet according to the Texas Railroad Commission

With the majority of the growth in the Laredo area occurring in our District, the mineral portion of values is approximately 13.95% of the total assessed valuation of the District and is expected to increase over the next ten years due to the Eagle Ford Shale production.

Retail Industry

The retail industry continues to have a major effect on the economy of the Webb County/District area. In 2010, the retail industry continued to provide more jobs than any other industry located in the area, accounting for approximately 28,700 jobs. Laredo’s Wal-Mart has the highest sales per square foot in the nation. In addition, the total assessed valuation for real commercial property made up almost 22.9% of the District’s entire assessed property valuation, second only to residential single family units. The retail industry is projected to stay strong if population projections remain as they are.

Banking Industry

The banking industry in the Webb County/District area remains strong with eleven financial institutions operating in the county/district. Bank of America and First National Bank opened to the public in 2010. The banking industry has combined total assets of over $1,421 trillion.

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Long-term Facilities Planning

The District is growing at a rate of about 600 students per year. As such, classrooms must be provided to accommodate this growth. A long-range facility master plan developed by administration includes a projected district-wide enrollment increase of approximately 2,000 students over the next three years. The District is projected to be at 44,775 students for school year 2015-2016.

Faced with the challenge of providing a quality education for increasing numbers of students, the Board of Trustees invited community members to explore options for dealing with this growth. A 100 member Blue Ribbon Committee, composed of parents, District patrons and community members, was appointed by the Board. After conducting demographic studies, needs assessments, and considering the District’s growth, the Blue Ribbon Committee presented its recommendations on how to handle the District’s growth. In May of 2007, the constituents of United ISD did not pass a bond election of approximately $400 million.

The Board of Trustees along with the community will determine when it is most appropriate to call for a new bond election. The majority of the funds will be for new construction and additions/renovations to existing schools and other facilities. The remaining portion of funds will be used for instructional technology which includes network wiring/infrastructure and additional equipment designed to aid students and teachers in the learning process.

However, the District did issue $17.4 million in Qualified School Construction Bonds in 2009 through the American Recovery and Reinvestment Tax Act of 2009. UISD will use these funds to replace and upgrade fire detection and alarm systems, HVAC replacements, electrical and lighting systems upgrades, roof replacements, ADA compliance renovations and repair the District’s original athletic complex.

Debt Service

Debt Service is a major area of cost due to the District’s building program which is primarily financed by the sale of general obligation bonds. The Texas Education Code (TEC) authorizes the District to issue negotiable coupon bonds to construct, acquire, or equip school buildings, to purchase necessary sites, or to acquire or refinance property financed under a contract entered into under the Public Property Finance Act. The District is further authorized to levy and assess annual ad valorem taxes sufficient to pay the principal and interest on the bonds as they become due. The District’s primary objective in debt management is to keep the level of indebtedness within available resources and within legal debt limitations.

All bond elections are held in accordance with statutory requirements and bonds are issued and taxes are levied in compliance with Sections 45.001, 45.003(b)(1), and 45.003(e) of the Texas Education Code.

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The District refunded $35,180,000 of outstanding bonds by issuing new bonds of $34,000,000. The District will benefit from this refunding with a net present value savings of $2,411,370, 6.85%, with a True Interest Cost (TIC) of 2.85%.

As of August 31, 2011, the District had $284,644,889 of School Building Unlimited Tax Bonds, Capital Appreciation Bonds and Public Property Finance Contractual Obligations, with maturities extending into the year 2035. The District’s Debt Service fund balance is $4,943,715 as of August 31, 2011.

Fiduciary Operations

The District maintains the fiduciary responsibility of monitoring the individual campus’ student activity funds. The District ensures that proper control over cash is maintained and that all procedures are in accordance with TEA’s Financial Accountability Systems Resource Guide. As of August 31, 2012, total assets for student activity funds were $1,301,578.

Financial Management Awards

Texas Comptroller Leadership Circle Award

The Texas Comptroller of Public Accounts launched the Texas Comptroller Leadership Circle program in December 2009 to recognize local governments across Texas that were striving to meet a high standard for financial transparency online. The Leadership Circle is awarded to those local governments that are opening their books to the public, providing clear, consistent pictures of spending and sharing information in a user-friendly format that lets taxpayers easily drill down for more information.

Leadership Circle designees receive a certificate reflecting their Circle Award level: Gold, Silver or Bronze. Gold” highlights those entities that are setting the bar with their transparency efforts; “Gold” highlights those entities that are setting the bar with their transparency efforts. “Silver” encourages those who are making progress, and “Bronze” inspires those who are just beginning their transparency efforts.

UISD applied for and received a “Bronze” award for the first time in 2011-2012. Financial transparency will continue to be the District’s ongoing goal.

Texas Education Agency SchoolFIRST Award

For the tenth consecutive time, the United Independent School District has earned the Texas Education Agency’s (TEA) highest fiscal rating of “Superior Achievement” under the First Integrity Rating System of Texas or FIRST program for the 2010-2011 school year. Implemented in 2001, FIRST is a yearly Texas public school financial accountability program in which Texas school districts submit a financial report based on several required indicators.

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The FIRST program was created by TEA in response to the Texas Legislature’s request to address several public school system accountability issues. The program ensures that school districts be held accountable for the quality of their financial management practices through various given ratings.

The system is designed to encourage Texas public schools to manage their financial resources in a more fiscally appropriate manner and to allow the maximum allocation possible for direct instructional purposes. The system also discloses the quality of local management and decision-making processes that impact the allocation of financial resources in Texas public schools.

Certificates of Achievement and Excellence

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to United Independent School District for its comprehensive annual financial report for the fiscal year ended August 31, 2011. This was the thirteenth consecutive year that the government has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.

In addition, the District received the GFOA’s Distinguished Budget Presentation Award for its annual budget document for fiscal year 2011-2012. This is the tenth consecutive year the award has been received. In order to qualify for the Distinguished Budget Presentation Award, the government’s budget document was judged to be proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device.

Acknowledgments

Preparation of the Comprehensive Annual Financial Report takes dedication and commitment by staff members district-wide. The Division of Finance would like to thank the following personnel for the time and effort given to the preparation of this report:

Executive Administration Mr. Roberto J. Santos, Superintendent of Schools Ms. Gloria S. Rendon, Asst. Supt. Administration Mr. Eduardo Zuñiga, CPA, Associate Superintendent for Student Support Services Dr. Guadalupe C. Gorordo, Associate Superintendent for Instruction

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Mr. David Garcia, Assistant Superintendent for Human Resources Mr. Enrique Rangel, Assistant Superintendent for Facilities/Construction/StudentServices Ms. Laida P. Benavides, CPA, Assistant Superintendent for Business and Finance

Division of Finance Mr. Samuel D. Flores, Director of Accounting Mr. Robert Chapa, Director of Risk Management Ms. Consuelo Gonzalez, Director of Fixed Assets Ms. Norma Farabough, Tax Assessor/Collector Ms. Rosa I. Cabello, Accounting Manager Ms. Belinda E. Salazar, Budget Manager Mr. Mark Ceballos, Payroll Manager Ms. Elsa Pena, Senior Accountant Ms. Irene G. Ruiz, Staff Accountant Mr. Mario Gonzalez, Staff Accountant Mr. Joe Martinez, Staff Accountant Ms. Valerie Pena, Staff Accountant Ms. Janie Leal, Executive Secretary

We would especially like to thank the District’s Board of Trustees for their time, dedication and support to the District and its personnel and our independent auditors, Pattillo, Brown & Hill, L.L.P. for their assistance in the preparation of this report.

______Samuel D. Flores Laida P. Benavides, CPA Director of Accounting Asst. Superintendent for Business/Finance

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PRINCIPAL DISTRICT OFFICIALS

Board of Trustees

Judd Gilpin, President Juan Roberto Ramirez, Vice-President Ricardo Rodriguez, Secretary Ricardo Molina Sr., Parliamentarian Pat Campos, Member Javier Montemayor, Member Ramiro Veliz, III, Member

Administrators

Roberto J. Santos, Superintendent Gloria Rendon, Assistant Superintendent for Administration Eduardo Zuñiga, CPA, Associate Superintendent Student Support Services Guadalupe Gorordo, Associate Superintendent of Curriculum and Instruction Laida P. Benavides, CPA, Assistant Superintendent for Business & Finance Enrique Rangel, Assistant Superintendent of Facilities, Construction & Student Services David Garcia, Assistant Superintendent for Human Resources

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School Internal Attorney Board of Auditor Trustees

Associate Superintendent Associate Superintendent Superintendent Student Curriculum Support Services & Instruction Assistant Assistant Superintendent Superintendent Executive For Administration For Human Executive Director Assistant Assistant Resources Director Superintendent Superintendent Special Campus Intervention Business/Finance Facilities/ Director Admissions Education Construction/ Director Attendance/ Employee Student Services Dropout Rec. Coordinators Director Relations Director-Budget/ English Language Accounting Itinerant/Compliance Learners Director-Maint. Coord-Attn/Drop Rec. Director /Contracted Svcs. Director & Operations Compensation Coordinator Risk Management Coord-Adult Literacy/ Director-Instr. Campus Intervention Director-Construction Drop Rec. Improvement & Director Coord. Human State Assessments Grants Admin. Director-Energy Resources Residential Facilities Tchrs. Management Director of Licensed Specialist Tax Assessor/ Public Relations Coord. School Psychology Collector Director-Disc. Certification Executive Director Management/Stu Rel. Secondary Education Coord. Employee Coordinators Special Executive Director Office of Relations Education Itinerant Director Health Services Communication Professional Staff Director Career & Tech/UIL Federal/ Program State Programs Coordinator Director Comm. Specialist/ Instructional Director of Adv. Academics Instructional TV Publications Coordinators Coordinator Career & Tech. Coordinator Migrant Program Comm. Specialist/ Coordinator Creative Services General Education Coordinator State Comp. Ed. PEP Program Homebound Teachers Coordinator - ELA Coord. After School Prog. Coordinator - Reading Executive Director Executive Director Elementary Education Coordinator - Social Studies Support Services Coordinator Language Arts Executive Director Coordinator - Mathematics Transportation Director-Fixed Assets Coordinator Coordinator - Science Social Studies Director-Purchasing Executive Director Coordinador - Instruction Coordinator Instructional Tech/Online Curriculum Director-Food Services Mathematics Accountability Technology Program Director-Athletics Executive Director Coordinator Coordinator Information Technology Science Chief of U.I.S.D. Police Director Guidance and Counseling Director Coordinator Coordinator Bilingual/ESL/ Reading Technology Services Director Professional Dual Language/Foreign Language Staff Development Coordinador Gifted & Talented/Advanced Early Childhood Director Fine Arts Academics Coordinator Literacy Coordinator Dyslexia/504 Technology Program Coordinator Fine Arts Coordinator 13 Coordinator Instructional PEIMS United Independent School District

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Independent Auditor’s Report

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PAT TIL L 0, B ROW N & H ILL, L. L. P. CERTIFIED PUBLIC ACCOUNTANTS . BUSINESS CONSULTANTS

INDEPENDENT AUDITORS' REPORT

Board of Trustees United Independent School District Laredo, Texas

We have audited the accompanying financial statements of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of United Independent School District (the "District") as of and for the year ended August 31,2012, 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's management. Our responsibility is to express opinions on these financial statements based on our audit.

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. 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 fmancial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of United Independent School District as of August 31, 2012, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated November 12, 2012, on our consideration of the District's internal control over financial reporting and 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.

Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and budgetary comparison information as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. 17 United Independent School District

We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquires of management about the methods of preparing the information and comparing the inforn1ation for consistency with management's responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's financial statements as a whole. The introductory section, combining and individual non major fund financial statements, Texas Education Agency ("TEA") required schedules, and the statistical section, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-l33, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements. The combining and individual non major fund financial statements, TEA required schedules, the schedule of capital assets used in the operation of governmental funds, and the schedule of expenditures are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statement themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the aUditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

18 CAFR for the Year Ending August 31, 2012

Management’s Discussion and Analysis

19 United Independent School District

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20 CAFR for the Year Ending August 31, 2012

MANAGEMENT’S DISCUSSION AND ANALYSIS UNAUDITED

In this section of the Comprehensive Annual Financial Report, we, the managers of United Independent School District, discuss and analyze the District’s financial performance for the fiscal year ended August 31, 2012. Please read it in conjunction with the independent auditors report on page 17, and the District’s Basic Financial Statements which begin on page 33.

FINANCIAL HIGHLIGHTS

 The District’s net assets increased by $3.4 million as a result of this year’s operations. Net assets of our business-type activities decreased by $233,491, by 6.1%, and net assets of our governmental activities increased by $3.5 million, or 2.2%. The most significant items that affected this change in net assets were decreased expenses of $2.5 million and an increase of $2.5 million in non-restricted grants and contributions. Other items affecting net assets were a decrease in due from other governments of $11.9 million, an increase in capital assets (net) of $4.7 million, and a decrease in noncurrent liabilities of $12.5 million.

 Revenues for governmental activities only increased by $1.2 million. The majority of this comes from an increase in Medicaid reimbursements of $1.8 million from the prior year. The District’s business-type activities combined revenues decreased by $794,380, by 3.4%, while expenses increased by $299,163, slightly over 1.3% from last year.

 The General Fund reported a fund balance this year of $90,742,402, a decrease of $11,920,430 from last year. This decrease is accounted for by a transfer from the General Fund to the Debt Service Fund of $2.7 million and a one-time stipend payment (in lieu of a pay raise) to the staff of approximately $10 million which was approved by the District’s Board of Trustees. More information is detailed in the accompanying notes to the financial statements.

 In addition, the District refunded $46,480,000 of outstanding bonds by issuing new bonds of $45,890,000. The District will benefit from this refunding with a net present value savings of $3,280,027, 7.05%, with a True Interest Cost (TIC) of 3.5%.

OVERVIEW OF THE FINANCIAL STATEMENTS

This annual report consists of three parts – management’s discussion and analysis (this section), the basic financial statements, and required supplementary information. The District’s annual report consists of the management’s discussion and analysis and the basic financial statements only. The District did not report any data under the required supplementary information. The basic financial statements include two kinds of statements that present different views of the District:

 The first two statements are government wide financial statements that provide both long-term and short-term information about the District’s overall financial status. They provide information about the activities of the District as a whole and reflect the flow of total economic resources in a manner similar to the financial reports of a business enterprise.

 The remaining statements are fund financial statements that focus on individual parts of the government, reporting the District’s operations in more detail than the government-wide statements.

21 United Independent School District

o The governmental funds statements tell how general government services were financed in the short-term as well as what remains for future spending. o Proprietary fund statements offer short- and long-term financial information about the activities the government operates like businesses, such as the food service enterprise fund. o Fiduciary fund statements provide information about the financial relationships in which the District acts solely as a trustee or agent for the benefit of others, to whom the resources in question belong.

The financial statements also include notes starting on page 53 that provide narrative explanations or additional data needed for full disclosure in the government-wide statements or the fund financial statements.

The combining statements for non-major funds contain even more information about the District’s individual funds. These are not required by TEA. The sections labeled TEA Required Schedules and Federal Awards Section contain data used by monitoring or regulatory agencies for assurance that the District is using funds supplied in compliance with the terms of grants.

Reporting the District as a Whole

The Statement of Net Assets and the Statement of Activities

The analysis of the District’s overall condition and operation begins on page 33. The government-wide statements report information about the activities of the District as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Assets includes all of the District’s assets and liabilities at the end of the year while the Statement of Activities includes all the revenues and expenses generated by the District’s operations during the year regardless of when cash is received or paid.

The District’s revenues are divided into those provided by outside parties who share the costs of some programs such as tuition received from students from outside the District and grants provided by the U.S. Department of Education to assist children with disabilities or from disadvantaged backgrounds (program revenues), and revenues provided by the taxpayers or by TEA in equalization funding processes (general revenues). All the District’s assets are reported whether they serve the current year or future years. Liabilities are considered regardless of whether they must be paid in the current or future years.

The two government-wide statements report the District’s net assets and how they have changed. Net assets – the difference between the District’s assets and liabilities – are one way to measure the District’s financial health or financial position. Over time, increase or decrease in the District’s net assets is an indicator of whether its financial health is improving or deteriorating, respectively. To fully assess the overall health of the District, however, you should consider non-financial factors as well, such as changes in the District’s average daily attendance or its property tax base and the condition of the District’s facilities.

22 CAFR for the Year Ending August 31, 2012

In the Statement of Net Assets and the Statement of Activities, we divide the District into two kinds of activities:

 Government Activities – Most of the District’s basic services are reported here, including the instruction, counseling, co-curricular activities, transportation, maintenance, and general administration. Property taxes and state and federal grants finance most of these activities.  Business – type activities – The District charges a fee to “customers” to help it cover all or most of the costs of services it provides in the Child Nutrition Program.

Reporting the District’s Most Significant Funds

Fund Financial Statements

The Fund Financial Statements begin on page 36 and provide detailed information about the District’s most significant funds – not the District as a whole. Laws and contracts require the District to establish some funds, such as grants received under the No Child Left Behind Act, from the U.S. Department of Education and such as bond covenants. The District’s administration establishes many other funds to help it control and manage money for particular purposes (like campus activities). The District’s three kinds of funds – governmental, proprietary, and fiduciary – use different accounting approaches.

 Governmental funds – Most of the district’s basic services are reported in the governmental funds. These use modified accrual accounting (a method that measures the receipt and disbursement of cash and all other financial assets that can be readily converted to cash) and report balances that are available for future spending. The governmental fund statements provide a detailed short-term view of the District’s general operations and the basic services it provides. We describe the differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds in reconciliation schedules C2 and C4 located on pages 37 and 39 respectively following each of the fund financial statements.  Proprietary funds – The District reports the activities for which it charges users in proprietary funds using the same accounting methods employed in the Statement of Net Assets and the Statement of Activities. In fact, the District’s enterprise fund (one category of proprietary funds) is the business-type activities reported in the government-wide statements with more detail and additional information, such as cash flows.  Fiduciary funds – The District is the trustee, or fiduciary, for certain funds. It is also responsible for other assets that – because of a trust arrangement – can be used only for their intended purposes. All of the District’s fiduciary activities are reported in a separate Statement of Fiduciary Net Assets on page 45. We exclude these activities from the District’s government- wide financial statements because the District cannot use these assets to finance its operations.

FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE

Our analysis focuses on the net assets (Table A-1) and changes in net assets (Table A-2) of the District’s governmental and business-type activities. The most significant items that affected a change in net assets were decreased expenses of $2.5 million and an increase of $2.5 million in non-restricted grants and contributions. Other items affecting net assets were a decrease in due from other governments of $11.9 million, an increase in capital assets (net) of $4.7 million, and a decrease in noncurrent liabilities of $12.5 million. The Net Assets from our business-type activities decreased by $233,491 for the year. This decrease is mainly due to a slight increase in participation in District’s school lunch and breakfast programs.

23 United Independent School District

Table A-1

Changes in United Independent School District's Net Assets (In millions of dollars)

Total Governmental Business-type Total Percentage Activities Activities Change

2012 2011 2012 2011 2012 2011 2012-2011 Current Assets: Cash and Cash Equivalents$ 106.6 105.7$ $ 2.6 $ 3.0 109.3$ 108.7$ 0.5% Current Investments 5.0 7.0 - - 5.0 7.0 -28.6% Property Taxes Receivable 6.2 7.9 - - 6.2 7.9 -21.6% Allowance for Uncollectible Taxes (2.2) (2.1) - - (2.2) (2.1) 7.0% Due from Other Governments 5.9 17.8 0.5 0.8 6.4 18.6 -65.7% Accrued Interest 0.0 0.0 - - 0.0 0.0 100.0% Internal Balances (0.486) 0.001 0.485 (0.001) (0.0) - 0.0% Due from Fiduciary Funds - 0.010 - - - 0.0 0.0% Other Receivables, net 0.5 0.4 0.042 0.034 0.5 0.4 25.4% Inventories - Supp. and materials 0.3 0.3 0.5 0.5 0.8 0.8 6.2% Prepaid Expenses 2.2 0.5 - - 2.2 0.5 312.0% Total Current Assets: $ 123.9 137.5$ $ 4.2 $ 4.3 128.1$ $ 141.8 -9.7% Noncurrent Assets: Capital Assets $ 558.5 536.8$ $ 4.3 $ 4.2 562.8$ 541.0$ 4.0% Less Accum. depreciation (215.5) (198.5) (4.0) (3.9) (219.5) (202.4) 8.5% Total Noncurrent Assets $ 343.0 338.3$ $ 0.3 $ 0.3 343.3$ 338.6$ 1.4% Restricted Assets $ 0.1 0.1$ -$ -$ 0.1$ $ 0.1 100.0% Total Assets $ 466.9 475.8$ $ 4.4 $ 4.7 471.4$ $ 480.4 -1.9%

Current Liabilities: - A/P and accrued liabilities $ 5.6 3.8$ 0.4$ 0.4$ 6.0$ $ 4.2 42.4% Short-term Debt Payable - - 0.05 0.04 0.0 0.0 20.0% P/R Deductions & W/holding 0.2 0.5 0.2 0.5 -54.2% Accrued Wages Payable 8.7 12.3 0.3 0.3 9.0 12.5 -28.5% Due to other Government 9.1 6.7 9.1 6.7 36.1% Due to student groups 0.09 0.03 - 0.0 -100.0% Accrued Expense 0.14 0.10 0.1 0.1 33.7% Unearned Revenues 0.4 0.4 0.03 0.12 0.4 0.5 -21.8% Payable from Restricted Assets 0.2 0.1 0.2 0.1 77.8% Total Current Liabilities 24.4 23.9 0.8 0.9 25.2 24.7 1.7%

Non-Current Liabilities: Due Within One Year 20.1 20.5 20.1 20.5 -1.8% Due in More Than One Year 256.5 269.0 0.1 0.1 256.6 269.1 -4.6% Total Liabilities $ 301.0 313.3$ $ 0.9 $ 0.9 301.9$ $ 314.2 -3.9%

Net assets: Invested in capital assets, Net Debt $ 67.1 53.1$ $ 0.3 $ 0.4 $ 67.4 $ 53.5 26.1% Restricted for: Restricted Federal & State Programs - 0.4 - 0.4 -100.0% Restricted for Debt Service Fund 15.2 15.9 15.2 15.9 -4.0% Restricted for Capital Projects 8.3 13.0 8.3 13.0 -36.3% Restricted for Other Purposes 1.1 0.8 1.1 0.8 100.0% Unrestricted Net Assets 74.2 79.2 3.3 3.4 77.5 82.6 -6.2% Total Net Assets $ 165.9 162.4$ $ 3.6 $ 3.8 169.6$ 166.2$ 2.0%

24 CAFR for the Year Ending August 31, 2012

In 2012, the District’s total revenues decreased by $29.7 million. A significant portion, 48.0% of the District’s revenue comes from State Aid Formula funding, 26.5% comes from property taxes, while another 22.6% is received from operating grants (Figure A-1). The total cost of all programs and services also decreased from $390.0 to $387.7 million; Over 81.3% of these costs are for instructional and student services (Table A-2). Even though revenue decreased, the District still had an increase in Net Assets of $3.2 million.

Sources of Revenues for Fiscal Year 2012 Figure A - 1

Operating Other Grants 2.9% 22.6%

State Aid Property 48.0% Ta x e s 26.5%

The District took actions to maintain costs for the 2011-2012 Fiscal Year by maintaining the same cost saving measures used in the prior fiscal year to control expenses by limiting budgets and not issuing staff pay raises. The District did issue a one-time stipend to staff at a cost of $10,794,530. In addition, the District implemented a purchasing deadline to address savings in order to redirect expenditures where necessary.

Table A-2 outlines the District’s changes in revenues and expenses.

25 United Independent School District

Table A-2

Changes in United Independent School District's Revenues and Expenses (In millions of dollars)

Total Governmental Business-type Total Percentage Activities Activities Change

2012 2011 2012 2011 2012 2011 2012-2011 Program Revenues Charges for service$ 1.7 1.7$ 2.9$ 3.1$ 4.6$ $ 4.8 -3.7% Operating Grants and Contributions 41.0 71.8 19.3 19.9 60.3 91.7 -34.2% General Revenues Property Taxes 121.5 111.9 - - 121.5 111.9 8.5% State Aid - formula 191.5 201.8 - - 191.5 201.8 -5.1% Grants and Contributions not Restricted 5.8 3.3 - - 5.8 3.3 74.5% Investment Earnings 0.3 0.3 0.001 0.003 0.3 0.3 15.9% Other 6.9 6.9 - - 6.9 6.9 -0.5% Total Revenues $ 368.7 $ 397.6 $ 22.2 23.0$ $ 390.9 $ 420.6 -7.1%

Instruction $ 207.8 $ 211.0 $ - -$ $ 207.8 $ 211.0 -1.5% Instructional Resources and Media 5.9 7.2 - - 5.9 7.2 -18.5% Curriculum Dev./Instructional Staff Dev. 3.5 1.5 - - 3.5 1.5 128.1% Instructional Leadership 5.9 8.1 - - 5.9 8.1 -26.9% School Leadership 24.2 23.8 - - 24.2 23.8 1.4% Guidance/Counseling/Evaluation Srvs 13.3 13.4 - - 13.3 13.4 -1.0% Social Work Services 2.2 2.0 - - 2.2 2.0 7.3% Health Services 3.9 3.9 - - 3.9 3.9 1.1% Student transportation 14.8 15.5 - - 14.8 15.5 -4.5% Food Services 1.3 1.1 22.4 22.1 23.7 23.2 2.2% Co/Extracurricular Activities 9.7 10.0 - - 9.7 10.0 -3.3% General Administration 9.9 9.9 - - 9.9 9.9 -0.3% Plant Maintenance & Oper. 34.4 35.3 - - 34.4 35.3 -2.4% Security & Monitoring Svcs. 6.5 6.5 - - 6.5 6.5 0.4% Data Processing Services 2.5 2.8 - - 2.5 2.8 -11.6% Community Services 0.6 0.6 - - 0.6 0.6 -7.1% Debt Services 17.3 13.6 - - 17.3 13.6 26.9% Juvenile Justice Alt. Education Prg. 0.1 0.1 - - 0.1 0.1 198.0% Webb County Apopraisal District 1.5 1.5 - - 1.5 1.5 100.0% Total Expenses $ 365.3 $ 367.8 $ 22.4 22.1$ $ 387.7 $ 390.0 -0.6%

Change in Net Assets $ 3.4 29.8$ $ (0.23) $ 0.86 3.2$ $ 30.65 N/A

Net Assets -- Beginning $ 162.5 $ 132.6 $ 3.9 2.9$ $ 166.3 $ 135.5 22.7% Net Assets -- Ending $ 165.9 $ 162.4 $ 3.6 3.8$ $ 169.5 $ 166.2 2.0%

26 CAFR for the Year Ending August 31, 2012

Table A-3 presents the cost of each of the District’s largest functions, as well as, each function’s net cost (total cost less fees generated by the activities and intergovernmental aid). The net cost reflects funding by state revenues as well as local tax dollars.

Table A-3

Net Cost of Selected District Functions (In millions of dollars)

Total Cost of Net Cost of % Change % Change Services Services

2012 2011 2012-2011 2012 2011 2012-2011 Instruction & Instruction Related $ 217.2 $ 219.8 -1.2%$ 185.1 $ 168.0 10.2% Instructional and School Leadership 30.1 31.9 -5.7% 27.4 26.1 5.1% Plant Maintenance & Operations 34.4 35.3 -2.4% 33.7 33.4 0.7% Debt Service - Interest & Fiscal Charges 17.3 13.6 26.9% 17.3 11.9 44.6%

FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS

As the District completed the year, its governmental funds (as presented in the balance sheet on page 36) reported a combined fund balance of $96.1 million, which is less than last year’s total of $108.7 million. The main contributing factor for this decrease was a one-time stipend payment to staff totaling $10.1 million.

Revenues from governmental fund types totaled $370.2 million a decrease of $26.6 million over last year’s revenue. The majority of this decrease comes from major decreases in Federal funding from the American Recovery and Reinvestment Act of $16.7 million and the Education Jobs Fund of $7,149,483 and losses in State funding for Pre-k students of $1.9 million and the Technology Grant of $1.4 million receiving. The District’s business-type activities combined revenues decreased to $22.2 million by 3%, while expenses increased to $22.4 million, slightly over 1% from last year.

General Fund Budgetary Highlights

Over the course of the year, the Board of Trustees revised the District’s budget several times.

These budget amendments fall into three categories:

 The first category includes amendments and supplemental appropriations that were approved shortly after the beginning of the year and reflect the actual beginning balances (versus the amounts we estimated in August 2011). These amendments are not a part of the original budget adopted by the Board of Trustees before the beginning of the 11-12 Fiscal Year. These amendments included $13.6 million in outstanding encumbrances at the end of August 31, 2011.

 The second category includes changes that the Board made during the fiscal year, one of which addressed the need to amend the District’s budget by $2.7 million for an equity transfer to the Debt Service Fund to cover bond payments. The Board also amended the budget for $8.1 million from Committed Fund Balance to construct a warehouse, transportation compound, and high school science labs. Another amendment allocated $11.4 million of Restricted Fund Balance to

27 United Independent School District

repair athletic facilities district wide and complete the construction of the remaining high school science labs. In addition, an amendment was made at the end of the year to add $13.4 million to state program budgeted revenues and appropriated payroll expenditures to recognize the state’s contribution to the Teacher Retirement System of Texas (TRS) on-behalf of the District’s employees.

 The third category involved amendments moving funds from programs that did not need all the resources originally appropriated to them to programs with resource needs.

Even with these adjustments, the General Fund actual expenditures were $33.4 million below the final budget amount. The most significant positive variances resulted from savings of approximately $7.3 million in budgeting for staff for full time employment for positions that were vacant for some portion of the year, land purchases for $1.9 million in outstanding encumbrances and issuing purchase orders late in the year for the construction projects discussed above which resulted $11.7 million of outstanding encumbrances not expended by August 31, 2012.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

At the end of 2012, the District had $343.3 million invested in a broad range of capital assets (net of depreciation), including land, equipment, buildings, and vehicles (Table A-4).

Table A-4

United Independent School District's Capital Assets (In millions of dollars)

Total Go v ern men t a l Business-type Total Percentage Activities Activities Change

2012 2011 2012 2011 2012 2011 2012-2011 Land$ 39.5 35.6$ -$ -$ $ 39.5 $ 35.6 10.8% Buildings 465.7 442.8 0.1 0.1 465.8 442.9 5.2% Vehicles 26.8 25.8 0.9 0.9 27.7 26.6 4.1% Furniture & Equipment 20.5 19.3 3.4 3.3 23.8 22.6 5.3% Other - C.I.P. 6.0 13.3 - - 6.0 13.3 -54.9% Totals $ 558.5 $ 536.8 $ 4.3 $ 4.3 562.8$ 541.1$ 4.0%

Total accumulated depreciation$ (215.5) (198.5)$ $ (4.0) $ (3.9) (219.5)$ (202.4)$ 8.5% Net capital assets $ 343.0 $ 338.3 $ 0.3 $ 0.4 343.3$ 338.7$ 1.4%

On November 22, 2003, the District’s constituents voted for a $142,000,000 bond issue. To date, all available bonds have been issued and spent.

The District issued $17,440.000 in Qualified School Construction Bond (QSCB’s) in 2010 through the American Recovery and Reinvestment Act of 2009 for the renovation of various school facilities. Only $2.1 million of the Construction in Progress from table A-4 is due to the unspent QSCB’s funding. More detailed information about the District’s capital assets is presented in Note F to the Financial Statements on page 63.

28 CAFR for the Year Ending August 31, 2012

Long Term Debt

At the end of the year, the District had $278.9 million in bonds and notes outstanding as shown in Table A-5. The District’s current ratings for general obligation bonds are “AA-” by Fitch and “Aa2” with Moody’s, as well as, an “A+” with Standard & Poor’s. More detailed information about the District’s debt is presented in the Note G to the Financial Statements page 65.

Table A-5

United Independent School District's Long Term Debt (In millions of dollars)

Total Governmental Business-type Total Percentage Activities Activities Change

2012 2011 2012 2011 2012 2011 2012-2011

Bonds Payable$ 246.5 $ 255.9 $ - -$ $ 246.5 $ 255.9 -3.7% Notes and Leases Payable 32.3 29.3 0.03 0.05 32.4 29.3 10.3%

Total bonds, notes and leases payable$ 278.8 $ 285.2 $ 0.03 $ 0.05 $ 278.9 $ 285.2 -2.2%

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES

The District’s appointed officials considered many factors when setting the Fiscal Year 2013 Budget and tax rates. One major factor is the District’s student population growth. The District’s 2012-2013 enrolment is expected to be 42,641, an increase of 2.4% from the previous year. The City of Laredo continues to experience moderate growth as it has had over the past couple of years.

The 79th Legislature for the State of Texas passed HB1 which required all school districts to adopt an M&O tax rate at 66.67% of its 2005-2006 tax rate for the 2007-2008 fiscal year. As a result, United Independent School District’s M&O tax rate decreased from $1.379 to $0.92. However, HB1 gave authority to the Board of Trustees to increase this rate an additional $0.04 over a two year period with an additional $0.06 increase not to exceed the calculated rollback rate for 2007-2008, which allows UISD to have an M&O tax rate of $1.04. The Board elected to adopt the same tax rate of $1.19 for fiscal year 2012-2013, with a maintenance and operations tax rate to $1.04 and debt service tax rate of $0.15.

In addition, HB1 guaranteed school districts would not lose revenue as a result of this tax rate reduction. In fact, United Independent School District was able to adopt a balanced budget for the General Fund for 2013.

In order to keep the tax rate at the minimum necessary to meet debt service requirements for 2012-2013, the Board of Trustees is contemplating to transfer $3.0 million from the General Fund fund balance to Debt Service fund balance. The District is confident that this decision will not affect the level of required fund balance in either the General Fund or Debt Service Fund.

29 United Independent School District

The District adopted a 2013 operating budget with a 2.5% reduction from 2012; approximately $7.4 million. The District’s major project for 2013 is finishing the renovation projects with the remaining QSCB’s funds, and completing the construction of the high school science labs, while continuing to meet the needs of additional student growth of over 994 new students.

These indicators were taken into account when adopting the General Fund budget for 2012-2013. Amounts available for appropriation in the General Fund budget are $293.5 million. State revenues will increase as the student population increases. The District will use its revenues to finance programs we currently offer. Furthermore, the District will continue to pursue an instructional facilities needs assessment plan that will address the need for new instructional facilities throughout the District.

If these estimates are realized, the District’s budgetary fund balance of the general fund is not expected to change by the close of 2012-2013.

CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have questions about this report, or need additional financial information, contact the District’s Finance Division, at United Independent School District, 201 Lindenwood, Laredo, Texas 78045 or visit us at www.uisd.net.

30 CAFR for the Year Ending August 31, 2012

Basic Financial Statements

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32 CAFR for the Year Ending August 31, 2012

EXHIBIT A-1 UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF NET ASSETS AUGUST 31, 2012

1 2 3 Primary Government Data Business Control Governmental Type Codes Activities Activities Total

ASSETS 1110 Cash and Cash Equivalents $ 106,607,725 $ 2,647,168 $ 109,254,893 1120 Current Investments 5,000,022 - 5,000,022 1220 Property Taxes Receivable (Delinquent) 6,188,881 - 6,188,881 1230 Allowance for Uncollectible Taxes (2,246,476) - (2,246,476) 1240 Due from Other Governments 5,923,470 460,842 6,384,312 1250 Accrued Interest 75 - 75 1260 Internal Balances (485,552) 485,552 - 1290 Other Receivables, net 455,901 42,338 498,239 1300 Inventories 307,928 518,206 826,134 1410 Prepaid Expenses 2,225,083 - 2,225,083 Capital Assets: 1510 Land 39,497,879 - 39,497,879 1520 Buildings, Net 281,261,671 18,743 281,280,414 1530 Furniture and Equipment, Net 16,221,243 309,794 16,531,037 1580 Construction in Progress 5,986,712 - 5,986,712 1800 Restricted Assets 50,150 - 50,150 1000 Total Assets 466,994,712 4,482,643 471,477,355

LIABILITIES 2110 Accounts Payable 5,569,607 434,382 6,003,989 2120 Short Term Debt Payable - 48,902 48,902 2150 Payroll Deductions & Withholdings 218,610 - 218,610 2160 Accrued Wages Payable 8,684,388 281,362 8,965,750 2180 Due to Other Governments 9,078,644 - 9,078,644 2190 Due to Student Groups 85,880 - 85,880 2200 Accrued Expenses 135,074 - 135,074 2300 Unearned Revenues 387,059 29,601 416,660 2400 Payable from Restricted Assets 211,599 - 211,599 Noncurrent Liabilities 2501 Due Within One Year 20,184,548 - 20,184,548 2502 Due in More Than One Year 256,513,107 67,865 256,580,972 2000 Total Liabilities 301,068,515 862,112 301,930,627

NET ASSETS 3200 Invested in Capital Assets, Net of Related Debt 67,139,155 296,936 67,436,091 Restricted for: 3850 Restricted for Debt Service 15,234,081 - 15,234,081 3860 Restricted for Capital Projects 8,301,587 - 8,301,587 3890 Restricted for Other Purposes 1,082,188 - 1,082,188 3900 Unrestricted Net Assets 74,169,186 3,323,595 77,492,780 3000 Total Net Assets $ 165,926,197 $ 3,620,531 $ 169,546,728

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

33 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF ACTIVITIES FOR THE YEAR ENDED AUGUST 31, 2012

Program Revenues

Data 1 3 4 Operating Control Charges for Grants and Codes Expenses Services Contributions Primary Government: GOVERNMENTAL ACTIVITIES: 11 Instruction $ 207,813,530 $ - $ 28,586,792 12 Instructional Resources and Media Services 5,897,778 - 277,717 13 Curriculum and Staff Development 3,498,443 - 3,212,988 21 Instructional Leadership 5,919,283 - 1,540,586 23 School Leadership 24,181,092 - 1,139,888 31 Guidance, Counseling and Evaluation Services 13,297,348 - 2,395,193 32 Social Work Services 2,165,119 - 95,787 33 Health Services 3,911,794 - 176,462 34 Student (Pupil) Transportation 14,774,076 - 516,701 35 Food Services 1,270,044 - 1,175,881 36 Extracurricular Activities 9,694,125 1,706,003 86,541 41 General Administration 9,893,904 - 343,285 51 Facilities Maintenance and Operations 34,439,394 - 747,001 52 Security and Monitoring Services 6,507,415 - 286,485 53 Data Processing Services 2,494,197 - 85,359 61 Community Services 587,563 - 372,902 72 Debt Service - Interest on Long Term Debt 16,773,453 - - 73 Debt Service - Bond Issuance Cost and Fees 511,360 - - 95 Juvenile Justice Alternative Ed. Prg. 149,209 - - 99 Webb County Appraisal District 1,531,524 - - [TG] Total Governmental Activities: 365,310,650 1,706,003 41,039,568 BUSINESS-TYPE ACTIVITIES: 35 Enterprise Fund - National School Breakfast&Lunch 22,440,393 2,899,295 19,306,359 [TB] Total Business-Type Activities: 22,440,393 2,899,295 19,306,359

[TP] TOTAL PRIMARY GOVERNMENT: $ 387,751,042 $ 4,605,298 $ 60,345,927 Data Control General Revenues: Codes Taxes: MT Property Taxes, Levied for General Purposes DT Property Taxes, Levied for Debt Service SF State Aid - Formula Grants GC Grants and Contributions not Restricted IE Investment Earnings MI Miscellaneous Local and Intermediate Revenue TR Total General Revenues

CN Change in Net Assets NB Net Assets--Beginning

NE Net Assets--Ending

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

34 CAFR for the Year Ending August 31, 2012

EXHIBIT B-1

Net (Expense) Revenue and Changes in Net Assets 6 7 8 Primary Government Governmental Business-type Activities Activities Total

$ (179,226,738) $ - $ (179,226,738) (5,620,061) - (5,620,061) (285,455) - (285,455) (4,378,697) - (4,378,697) (23,041,204) - (23,041,204) (10,902,155) - (10,902,155) (2,069,332) - (2,069,332) (3,735,332) - (3,735,332) (14,257,375) - (14,257,375) (94,163) - (94,163) (7,901,581) - (7,901,581) (9,550,619) - (9,550,619) (33,692,393) - (33,692,393) (6,220,930) - (6,220,930) (2,408,838) - (2,408,838) (214,661) - (214,661) (16,773,453) - (16,773,453) (511,360) - (511,360) (149,209) - (149,209) (1,531,524) - (1,531,524) (322,565,079) - (322,565,079)

- (234,739) (234,739) - (234,739) (234,739)

(322,565,079) (234,739) (322,799,818)

105,712,632 - 105,712,632 15,742,191 - 15,742,191 191,545,321 - 191,545,321 5,763,733 - 5,763,733 295,174 1,248 296,422 6,976,703 - 6,976,703 326,035,754 1,248 326,037,002

3,470,675 (233,491) 3,237,184 162,455,522 3,854,022 166,309,544

$ 165,926,197 $ 3,620,531 $ 169,546,728

35 United Independent School District

EXHIBIT C-1 UNITED INDEPENDENT SCHOOL DISTRICT BALANCE SHEET GOVERNMENTAL FUNDS AUGUST 31, 2012

Data 10 50 Total Control General Debt Service Other Governmental Codes Fund Fund Funds Funds

ASSETS 1110 Cash and Cash Equivalents $ 100,462,654 $ 5,075,904 $ 1,069,167 $ 106,607,725 1120 Investments - Current 5,000,022 - - 5,000,022 1220 Property Taxes - Delinquent 5,349,342 839,539 - 6,188,881 1230 Allowance for Uncollectible Taxes (Credit) (1,919,737) (326,739) - (2,246,476) 1240 Receivables from Other Governments 3,097,969 - 2,825,501 5,923,470 1250 Accrued Interest - - 75 75 1260 Due from Other Funds 1,958,394 41,899 - 2,000,293 1290 Other Receivables 440,401 - 15,500 455,901 1300 Inventories 307,928 - - 307,928 1410 Deferred Expenditures 2,225,083 - - 2,225,083 1800 Restricted Assets - - 50,150 50,150 1000 Total Assets $ 116,922,056 $ 5,630,603 $ 3,960,393 $ 126,513,052 LIABILITIES AND FUND BALANCES Liabilities: 2110 Accounts Payable $ 5,568,336 $ - $ 1,270 $ 5,569,607 2150 Payroll Deductions and Withholdings Payable 218,610 - - 218,610 2160 Accrued Wages Payable 8,304,103 - 380,285 8,684,388 2170 Due to Other Funds 41,899 - 2,443,946 2,485,845 2180 Due to Other Governments 8,281,176 797,468 - 9,078,644 2190 Due to Student Groups - - 85,880 85,880 2200 Accrued Expenditures 135,074 - - 135,074 2300 Deferred Revenues 3,418,857 467,258 91,824 3,977,938 2400 Payable from Restricted Assets 211,599 - - 211,599 2000 Total Liabilities 26,179,654 1,264,726 3,003,205 30,447,585 Fund Balances: Nonspendable Fund Balance: 3410 Inventories 307,928 - - 307,928 3430 Prepaid Items 2,225,083 - - 2,225,083 Restricted Fund Balance: 3480 Retirement of Long-Term Debt 10,868,204 4,365,877 - 15,234,081 Committed Fund Balance: 3510 Construction 5,780,000 - - 5,780,000 Assigned Fund Balance: 3580 Self-Insurance 125,000 - - 125,000 3590 Other Assigned Fund Balance 2,521,588 - 957,188 3,478,776 3600 Unassigned Fund Balance 68,914,599 - - 68,914,599 3000 Total Fund Balances 90,742,402 4,365,877 957,188 96,065,467

4000 Total Liabilities and Fund Balances $ 116,922,056 $ 5,630,603 $ 3,960,393 $ 126,513,052

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

36 CAFR for the Year Ending August 31, 2012

EXHIBIT C-2 UNITED INDEPENDENT SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS AUGUST 31, 2012

Total Fund Balances - Governmental Funds $ 96,065,467

1 Capital assets used in governmental activities are not financial resources and therefore 48,836,462 are not reported in governmental funds. At the beginning of the year, the cost of these assets was $536,798,077 and the accumulated depreciation was $198,493,194. In addition, long-term liabilities, including bonds payable, Public Property Finance Contractual Obligations (PPFCO's), and leases totaled $288,290,995 and other long- term liabilities of $1,177,426 are not due and payable in the current period, and, therefore, are not reported as liabilities in the funds. The net effect of including the beginning balances for capital assets (net of depreciation) and long-term debt in the governmental activities is to increase (decrease) net assets.

2 Current year capital outlays of $22,464,690 ($18,082,220 from facilities acquisition and 34,457,044 construction, with the remaining $4,382,470 coming from the various other functions) and long-term debt principal payments of $19,919,545, amotization of premiums in the amount of $894,014, refunded bonds of $46,480,000 and reductions of $3,436,450 of other liabilities are expenditures in the fund financial statements, but they should be shown as increases in capital assets and reductions in long-term debt in the government-wide financial statements. The retirement of capital assets of $778,411, the accounting loss on the refunding og $2,727,432 and the issuance of Refunding Bonds in the amount of $45,890,000, the premium on the refunding bonds of $4,111,142, the accretion on Capital Appreciation Bonds $2,069,402, a new lease of $32,941 and the accumulation of other benefits of $3,128,324 in the financial statements should be as decreases in capital assets and increases in long-term debt in the government-wide financial statements. The net effect of including the 2012 capital outlays and debt principal payments is to increase (decrease) net assets.

3 The 2012 depreciation expense of $17,747,990 net of adjustments/disposals of $724,334 (17,023,656) increases accumulated depreciation. The net effect of the current year's depreciation is to (decrease) net assets.

4 Various other reclassifications and eliminations are necessary to convert from the 3,590,880 modified accrual basis of accounting to accrual basis of accounting. These include recognizing deferred revenue as revenue, eliminating interfund transactions, reclassifying tehproceeds of bond sales as an increase in bonds payable, and recognizing the liabilities associated with maturing long-term debt and interest. The net effect of these reclassifications and recognitions is to increase (decrease) net assets.

19 Net Assets of Governmental Activities $ 165,926,197

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

37 United Independent School District UNITED INDEPENDENT SCHOOL DISTRICT EXHIBIT C-3 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FOR THE YEAR ENDED AUGUST 31, 2012 Data 10 50 Total Control General Debt Service Other Governmental Codes Fund Fund Funds Funds

REVENUES: 5700 Total Local and Intermediate Sources $ 111,899,084 $ 16,250,014 $ 3,656,223 $ 131,805,321 5800 State Program Revenues 197,837,603 6,420,136 4,287,385 208,545,124 5900 Federal Program Revenues 5,444,171 - 24,359,327 29,803,498 5020 Total Revenues 315,180,858 22,670,150 32,302,935 370,153,943 EXPENDITURES: Current: 0011 Instruction 176,898,182 - 20,769,952 197,668,134 0012 Instructional Resources and Media Services 5,386,799 - 48,494 5,435,293 0013 Curriculum and Instructional Staff Development 413,065 - 3,101,022 3,514,087 0021 Instructional Leadership 4,594,903 - 1,283,598 5,878,501 0023 School Leadership 19,970,589 - 3,839,656 23,810,245 0031 Guidance, Counseling and Evaluation Services 11,515,490 - 1,776,226 13,291,716 0032 Social Work Services 2,164,835 - - 2,164,835 0033 Health Services 3,909,815 - - 3,909,815 0034 Student (Pupil) Transportation 14,843,913 - - 14,843,913 0035 Food Services - - 751,984 751,984 0036 Extracurricular Activities 8,445,784 - 9,020 8,454,804 0041 General Administration 9,487,211 - 14,302 9,501,513 0051 Facilities Maintenance and Operations 34,548,674 - 5,300 34,553,975 0052 Security and Monitoring Services 6,455,347 - 32,520 6,487,867 0053 Data Processing Services 2,379,062 - 368 2,379,430 0061 Community Services 210,918 - 376,601 587,518 Debt Service: 0071 Principal on Long Term Debt 2,583,207 16,865,000 261,155 19,709,362 0072 Interest on Long Term Debt 828,623 9,104,290 124,564 10,057,477 0073 Bond Issuance Cost and Fees 1,918 509,442 - 511,360 Capital Outlay: 0081 Facilities Acquisition and Construction 18,082,220 - - 18,082,220 Intergovernmental: 0095 Payments to Juvenile Justice Alternative Ed. Prg. 149,209 - - 149,209 0099 Other Intergovernmental Charges 1,531,524 - - 1,531,524 6030 Total Expenditures 324,401,288 26,478,732 32,394,762 383,274,781 1100 Excess (Deficiency) of Revenues Over (Under) (9,220,430) (3,808,582) (91,827) (13,120,838) Expenditures OTHER FINANCING SOURCES (USES): 7901 Refunding Bonds Issued - 45,890,000 - 45,890,000 7915 Transfers In - 2,700,000 - 2,700,000 7916 Premium or Discount on Issuance of Bonds - 4,111,142 - 4,111,142 8911 Transfers Out (Use) (2,700,000) - - (2,700,000) 8949 Other (Uses) - (49,470,398) - (49,470,398) 7080 Total Other Financing Sources (Uses) (2,700,000) 3,230,744 - 530,744 1200 Net Change in Fund Balances (11,920,430) (577,838) (91,827) (12,590,094) 0100 Fund Balance - September 1 (Beginning) 102,662,832 4,943,715 1,049,015 108,655,562

3000 Fund Balance - August 31 (Ending) $ 90,742,402 $ 4,365,877 $ 957,188 $ 96,065,467

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

38 CAFR for the Year Ending August 31, 2012

EXHIBIT C-4 UNITED INDEPENDENT SCHOOL DISTRICT RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED AUGUST 31, 2012

Total Net Change in Fund Balances - Governmental Funds $ (12,590,094)

Current year capital outlays of $22,464,690 ($18,082,220 from facilities acquisition and 34,457,044 construction, with the remaining $4,382,470 coming from the various other functions) and long-term debt principal payments of $19,919,545, amortizations of premiums in the amount of $894,014, refunded bonds of $46,480,000 and the reductions of $3,436,450 of other liabilities are expenditures in the fund financial statements, but they should be shown as increases in capital assets and reductions in long-term debt in the government- wide financial statements. The retirement of capital assets of $778,411, and the issuance of Refunding Bonds in the amount of $45,890,000, the premium on the refunding bonds of $4,111,142, the accretion on Capital Appreciation Bonds $2,069,402, a new lease of $32,941 and the accumulation of other benefits of $3,128,327 in the financial statements should be as decreases in capital assets and increases in long-term debt in the government-wide financial statements. The net effect of including the 2012 capital outlays and debt principal payments is to increase (decrease) net assets.

Depreciation is not recognized as an expense in governmental funds since it does not (17,023,656) require the use of current financial resources. The net effect of the current year's depreciation is to (decrease) net assets.

Various other reclassifications and eliminations are necessary to convert from the (1,372,619) modified accrual basis of accounting to accrual basis of accounting. These include recognizing deferred revenue as revenue, adjusting current year revenue to show the revenue earned from the current year's tax levy, eliminating interfund transactions, reclassifying the proceeds of bond sales, and recognizing the liabilities associated with maturing long-term debt and interest. The net effect of these reclassifications and recognitions is to increase (decrease) net assets.

Change in Net Assets of Governmental Activities $ 3,470,675

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

39 United Independent School District

EXHIBIT C-5 UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - GENERAL FUND FOR THE YEAR ENDED AUGUST 31, 2012

Data Actual Amounts Variance With (GAAP BASIS) Final Budget Control Budgeted Amounts Positive or Codes Original Final (Negative)

REVENUES: 5700 Total Local and Intermediate Sources $ 107,858,566 $ 107,858,566 $ 111,899,084 $ 4,040,518 5800 State Program Revenues 186,075,090 199,429,519 197,837,603 (1,591,916) 5900 Federal Program Revenues 970,000 970,000 5,444,171 4,474,171

5020 Total Revenues 294,903,656 308,258,085 315,180,858 6,922,773 EXPENDITURES: Current: 0011 Instruction 168,403,600 181,967,160 176,898,182 5,068,978 0012 Instructional Resources and Media Services 5,232,579 5,553,328 5,386,799 166,529 0013 Curriculum and Instructional Staff Development 672,236 491,587 413,065 78,522 0021 Instructional Leadership 4,208,199 4,803,078 4,594,903 208,175 0023 School Leadership 19,123,156 20,231,177 19,970,589 260,588 0031 Guidance, Counseling and Evaluation Services 10,498,423 11,584,111 11,515,490 68,621 0032 Social Work Services 1,989,481 2,195,025 2,164,835 30,190 0033 Health Services 3,784,275 4,201,264 3,909,815 291,449 0034 Student (Pupil) Transportation 13,321,894 15,697,800 14,843,913 853,887 0036 Extracurricular Activities 8,926,591 9,154,327 8,445,784 708,543 0041 General Administration 9,576,492 10,297,070 9,487,211 809,859 0051 Facilities Maintenance and Operations 34,491,924 37,726,663 34,548,674 3,177,989 0052 Security and Monitoring Services 6,488,847 6,684,527 6,455,347 229,180 0053 Data Processing Services 2,360,126 2,525,275 2,379,062 146,213 0061 Community Services 191,960 255,943 210,918 45,025 Debt Service: 0071 Principal on Long Term Debt 2,597,250 2,789,912 2,583,207 206,704 0072 Interest on Long Term Debt 828,623 836,352 828,623 7,729 0073 Bond Issuance Cost and Fees 8,000 5,610 1,918 3,692 Capital Outlay: 0081 Facilities Acquisition and Construction 500,000 39,106,434 18,082,220 21,024,214 Intergovernmental: 0095 Payments to Juvenile Justice Alternative Ed. Prg. 150,000 175,000 149,209 25,791 0099 Other Intergovernmental Charges 1,550,000 1,550,000 1,531,524 18,477

6030 Total Expenditures 294,903,656 357,831,643 324,401,288 33,430,354 1100 Excess (Deficiency) of Revenues Over (Under) - (49,573,558) (9,220,430) 40,353,128 Expenditures OTHER FINANCING SOURCES (USES): 8911 Transfers Out (Use) - (2,700,000) (2,700,000) -

7080 Total Other Financing Sources (Uses) - (2,700,000) (2,700,000) -

1200 Net Change in Fund Balances - (52,273,558) (11,920,430) 40,353,128 0100 Fund Balance - September 1 (Beginning) 102,662,832 102,662,832 102,662,832 -

3000 Fund Balance - August 31 (Ending) $ 102,662,832 $ 50,389,274 $ 90,742,402 $ 40,353,128

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

40 CAFR for the Year Ending August 31, 2012

EXHIBIT D-1 UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF NET ASSETS PROPRIETARY FUNDS AUGUST 31,2012

Business-Type Activities 70 Food Service Fund ASSETS Current Assets: Cash and Cash Equivalents $ 2,647,168 Due from Other Governments 460,842 Due from Other Funds 493,065 Other Receivables 42,338 Inventories 518,206 Total Current Assets 4,161,619 Noncurrent Assets: Capital Assets: Buildings and Improvements 69,800 Depreciation on Buildings (51,057) Furniture and Equipment 4,272,535 Depreciation on Furniture and Equipment (3,962,741) Total Noncurrent Assets 328,537

Total Assets 4,490,156 LIABILITIES Current Liabilities: Accounts Payable 434,382 Short Term Debt Payable 48,902 Accrued Wages Payable 281,362 Due to Other Funds 7,513 Unearned Revenues 29,601 Total Current Liabilities 801,760 Noncurrent Liabilities: Loans Payable - Due in More than One Year 15,900 Other Long-Term Debt - Due in More than One Year 51,965 Total Noncurrent Liabilities 67,865

Total Liabilities 869,625 NET ASSETS Investments in Capital Assets, Net of Debt 296,936 Unrestricted Net Assets 3,323,595 Total Net Assets $ 3,620,531

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

41 United Independent School District

EXHIBIT D-2 UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED AUGUST 31, 2012

Business-Type Activities 70 Food Service Fund OPERATING REVENUES: Local and Intermediate Sources $ 2,330,169 State Program Revenues 569,126 Total Operating Revenues 2,899,295 OPERATING EXPENSES: Payroll Costs 11,102,231 Professional and Contracted Services 418,346 Supplies and Materials 10,749,144 Other Operating Costs 34,743 Depreciation Expense 135,929 Total Operating Expenses 22,440,393

Operating Income (Loss) (19,541,098)

NONOPERATING REVENUES (EXPENSES): National School Breakfast Program 5,739,814 National School Lunch Program 12,138,254 Donated Commodities (USDA) 1,428,291 Earnings from Temporary Deposits & Investments 1,248 Total Nonoperating Revenues (Expenses) 19,307,607

Change in Net Assets (233,491) Total Net Assets - September 1 (Beginning) 3,854,022

Total Net Assets - August 31 (Ending) $ 3,620,531

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

42 CAFR for the Year Ending August 31, 2012

EXHIBIT D-3 (Cont'd) UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED AUGUST 31, 2012

Business-Type Activities 70 Food Service Fund

Cash Flows from Operating Activities: Cash Received from User Charges $ 2,147,774 Cash Received from State 475,314 Cash Payments to Employees for Services (11,110,592) Cash Payments for Contracted Services (418,346) Cash Payments for Suppliers (9,310,907) Cash Payments for Other Operating Expenses (34,743) Net Cash Used for Operating Activities (18,251,500) Cash Flows from Non-Capital Financing Activities: Increase(decrease) in Short-term Loans 8,007 Federal Grants 17,878,068 Net Cash Provided by Non-Capital Financing Activities 17,886,075 Cash Flows from Capital & Related Financing Activities: Acquisition of Capital Assets (104,440) Long Term Loan & Other Debt 67,865 Net Cash Provided by (Used for) Capital & Related Financing Activities (36,575) Cash Flows from Investing Activities: Interest and Dividends on Investments 1,248

Net Decrease in Cash and Cash Equivalents (400,752) Cash and Cash Equivalents at Beginning of Year 3,047,920

Cash and Cash Equivalents at End of Year $ 2,647,168

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

43 United Independent School District

EXHIBIT D-3 UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED AUGUST 31, 2012

Business-Type Activities 70 Food Service Fund Reconciliation of Operating Income (Loss) to Net Cash Used for Operating Activities: $ (19,541,098) Operating Income (Loss):

Adjustments to Reconcile Operating Income to Net Cash Used for Operating Activities: Depreciation 135,929 Commodity Expense - USDA Various Food Products 1,428,291 Effect of Increases and Decreases in Current Assets and Liabilities: Decrease (increase) in Receivables (7,891) Decrease (increase) in Inventories (6,522) Decrease (increase) in Due From Other (174,504) Increase (decrease) in Accounts Payable 16,468 Increase (decrease) in Accrued Wages Payable 7,101 Increase (decrease) in Due to Other Funds (15,462) Increase (decrease) in Unearned Revenue (93,812) Net Cash Used for Operating Activities $ (18,251,500) Noncash Investing, Capital and Financing Activities: Commodity Expense - USDA Various Food Products 1,428,291

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

44 CAFR for the Year Ending August 31, 2012

EXHIBIT E-1 UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS AUGUST 31,2012

Agency Fund

ASSETS Cash and Cash Equivalents $ 1,301,578

Total Assets $ 1,301,578

LIABILITIES Due to Student Groups $ 1,301,578

Total Liabilities $ 1,301,578

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

45 United Independent School District

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46 CAFR for the Year Ending August 31, 2012

Notes to Financial Statements

47 United Independent School District

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48 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

A. REPORTING ENTITY

The Board of School Trustees (Board), a seven member group, has governance responsibilities over all activities related to public elementary and secondary education within the jurisdiction of the United Independent School District (District), Laredo, Texas. Because members of the Board of Trustees are elected by the public; have the authority to make decisions, appoint administrators and managers, and significantly influence operations; and have the primary accountability for fiscal matters; the District is not included in any other governmental "reporting entity" as defined by Governmental Accounting Standards Board (GASB), Statement No. 14, “The Financial Reporting Entity” and Statement Number 39, “Determining Whether Certain Organizations Are Component Units.” There are no component units included within the reporting entity.

Since the District receives funding from local, state, and federal government sources, it must comply with the requirements of the entities providing those funds.

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

United Independent School District (District) is a public educational agency operating under applicable laws and regulations of the State of Texas. It is governed by a seven member Board of Trustees (Board) elected by registered voters of the District. The District prepares its basic financial statements in conformity with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board and other authoritative sources identified in Statement on Auditing Standards No. 69 of the American Institute of Certified Public Accountants; and it complies with the requirements of the appropriate version of Texas Education Agency’s Financial Accountability System Resource Guide (Resource Guide) and the requirements of contracts and grants of agencies from which it receives funds.

1. Government-Wide and Fund Financial Statements

The Statement of Net Assets and the Statement of Activities are government-wide financial statements. They report information on all of the United Independent School District nonfiduciary activities. The Interfund services provided and used are not eliminated in the process of consolidation. Governmental activities include programs supported primarily by taxes, State foundation funds, grants and other intergovernmental revenues. Business-type activities include operations that rely to a significant extent on fees and charges for support.

49 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the District’s Governmental Activities. The “charges for services” column includes payments made by parties that purchase, use, or directly benefit from goods or services provided by a given function or segment of the District. Examples include tuition paid by students not residing in the District, school lunch charges, etc. The “grants and contributions” column includes amounts paid by organizations outside the District to help meet the operational or capital requirements of a given function. Examples include grants under the Elementary and Secondary Education Act. If revenue is not program revenue, it is general revenue which is used to support all of the District’s functions. Taxes are always general revenues. Direct expenses are those that are specifically associated with a program or function. Indirect costs expenditures are determined by applying approved indirect cost rates to actual applicable expenditures of federally funded grant programs.

Interfund activities between governmental funds appear as due to/due froms on the Governmental Fund Balance Sheet and Proprietary Fund Statement of Net Assets and as other resources and other uses on the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balance. All interfund transactions between governmental funds are eliminated on the government-wide statements. Interfund activities between governmental funds and fiduciary funds remain as due to/due froms on the government-wide Statement of Activities.

The fund financial statements provide reports on the financial condition and results of operations for three funds categories-governmental, proprietary, and fiduciary. Since the resources in the fiduciary funds cannot be used for District Operations, they are not included in the government- wide statements. The District considers some governmental and enterprise funds major and reports their financial condition and results of operations in a separate column.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing food service operations. All other revenues and expenses are non-operating.

2. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements use the economic resources measurement focus and the accrual basis of accounting, as do the proprietary fund. The fiduciary funds have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

50 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Governmental fund financial statements use the current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets, current liabilities and fund balances are included on the balance sheet. Operating statements of these funds present net increases and decreases in current assets (i.e., revenues and other financing sources and expenditures and other financing uses).

The modified accrual basis of accounting recognizes revenues in the accounting period in which they become both measurable and available, and it recognizes expenditures in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest and principal on long-term debt, which is recognized when due. The expenditures related to certain compensated absences and claims and judgments are recognized when amounts are due and payable. The District considers all revenues available if they are collectible within 60 days after year end. The compensated absences are reported in governmental funds only if they matured.

Revenues from local sources consist primarily of property taxes. Property tax revenues and revenues received from the State are recognized under the susceptible to accrual concept. Miscellaneous revenues are recorded as revenue when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned, since they are both measurable and available.

Grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant. Accordingly, when such funds are received, they are recorded as deferred revenues until related and authorized expenditures have been made. If balances have not been expended by the end of the project period, grantors sometimes require the District to refund all or part of the unused amount.

The Proprietary Fund Types are accounted for on a flow of economic resources measurement focus and utilize the accrual basis of accounting. The Fiduciary Funds utilize the accrual basis of accounting.

This basis of accounting recognizes revenues in the accounting period in which they are earned and become measurable and expenses in the accounting period in which they are incurred and become measurable. The District applies all GASB pronouncements as well as the Financial Accounting Standards Board pronouncements issued on or before November 30, 1989, unless these pronouncements conflict or contradict GASB pronouncements. With this measurement focus, all assets and all liabilities associated with the operation of these funds are included on the fund Statement of Net Assets. The fund equity is segregated into invested in capital assets net of related debt, restricted net assets, and unrestricted net assets.

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UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

3. Fund Accounting

a. Major Governmental Funds

 General Fund

The General Fund is the District's operating fund and is used to account for all financial transactions except those required to be accounted for in another fund. This is a budgeted fund and any fund balances are considered as resources available for current operations. General Fund primary revenue sources include local property taxes and state funding. The District's General Fund includes state distributed federal funds and direct federal funds not required to be included in the Special Revenue Funds.

 Debt Service Fund

The Debt Service Fund accounts for the accumulation of resources for, and the payment of bonded debt principal and interest. The primary revenue source is local property taxes levied specifically for debt service. The fund balance of this fund represents amounts that will be used for retirement of bonds and payment of interest in the future. The Debt Service Fund is a budgeted fund.

b. Major Proprietary Funds

 Enterprise Fund

The Enterprise Fund is used to account for the District’s Food Service operations. The Food Services fund is a budgeted fund and is the District’s only Enterprise Fund. An Enterprise Fund is used since the District’s intent is for the Food Service Fund to be self-sustaining. Students are charged for meals to supplement the National School Lunch Program reimbursements.

52 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

c. Non-Major Governmental Funds

 Special Revenue Funds

The Special Revenue Funds are used to account for the majority of federal and state funded grants. These grants are awarded to the District with the purpose of accomplishing specific educational tasks. Funds are used primarily for a math and reading improvement program for the educationally deprived, a special education program involving learning disabilities and the physically handicapped, a vocational education program, and a drug education program. Budgets for these funds are adopted on a project basis rather than on an annual basis.

 Capital Projects Funds

The Capital Projects Fund was established to account for the proceeds from the sales of bonds including earnings on investments of the fund. Proceeds are used for acquiring school sites, constructing and equipping new school facilities, and renovating existing facilities. Budgets for these funds are adopted on a project basis rather than on an annual basis.

 Permanent Funds

The Permanent Funds should be used “to report resources that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government’s programs, that is, for the benefit of the government or its citizenry.” The District received a charitable donation in the amount of $50,000 that is to be invested in a certificate of deposit with the interest proceeds used each year to fund two annual scholarships starting in 2010.

d. Fiduciary Funds

 Agency Fund

The Agency Fund is used to account for assets held by the District as an agent for individuals, private organizations, other governmental units, and/or other funds. These include Clearing Funds and Student Activity Funds. Student Activity Funds are monies collected principally through fund-raising efforts of the individual schools or school-sponsored groups (student activity funds).

4. Other Accounting Policies

For purposes of the statement of cash flows for proprietary and similar fund-types, the District considers highly liquid investments to be cash equivalents if they have a maturity of three months or less when purchased.

53 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

5. Budgets

The following procedures are utilized in establishing the budgetary data reflected in the basic financial statements:

 Prior to August 20 of the preceding fiscal year, the District prepares a budget for the next succeeding fiscal year beginning September 1. The operating budget includes proposed expenditures and the means of financing them.

 A meeting of the Board is then called for the purpose of adopting the proposed budget after ten days’ public notice of the meeting has been given.

 Prior to September 1, the budget is legally enacted through passage of a resolution by the Board.

The legal level of budgetary control is at the major functional expenditure level by fund type. Each budget is controlled by the budget coordinator. Annual budgets are adopted for the General Fund, Food Service Fund, and Debt Service on a basis consistent with generally accepted accounting principles. Budgets for the Special Revenue funds as well as the Capital Projects funds are adopted on a project basis rather than on an annual basis. Appropriations in these funds remain open as carryover to succeeding years until related expenditures are made or until they are modified or cancelled. All budget appropriations lapse at year end.

Once a budget is approved, it may be amended by management without Board approval within a major functional expenditure category and can be amended at the function and fund level only by approval of a majority of the members of the Board. Amendments at the function and fund level are presented to the Board at its regular meetings. Such amendments are made before the fact, are reflected in the official minutes of the Board and are made before the fiscal year end as required by law. The budget amounts included in this report reflect various amendments made by management or adopted by the Board throughout the year through the final amended budget. The original budget was adopted by the Board on August 17, 2011. The General and Debt Service Fund Budgets are prepared on the modified accrual basis and the Food Service Fund budget is prepared on the accrual basis of accounting.

54 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

6. Inventories

Inventories of supplies on the balance sheet are stated at cost, determined on the weighted average method. Inventories are maintained on a perpetual inventory system and adjusted at year end to physical count balances, if necessary. Inventory in governmental funds consist of expendable goods held for consumption. Reported inventories in these funds are equally offset by a fund balance reserve. Expenditures are recorded when individual inventory items are requisitioned or consumed. Inventory reported in the Enterprise fund consists of food service fund supplies. Inventory is stated at cost, determined on the weighted average method, except for food commodities which are recorded at market values supplied by the Texas Department of Human Services. Commodities inventory at year end is offset by unearned revenue, since revenue is recognized as inventory is used.

7. Fund Balance

Reserved fund balance indicates that portion of fund balance which has been legally segregated for specific purposes. The unreserved fund balance represents that portion of the fund balance that is available for budgeting in future periods.

8. Accumulated Unpaid Compensatory Leave

Accumulated compensatory leave and sick leave that is expected to be liquidated with expendable available resources is reported as an expenditure and a liability in the Governmental Funds only if they have matured.

9. Accounting System

In accordance with Texas Education Code, Chapter 44, subchapter A, the District has adopted and installed an accounting system which meets at least the minimum requirements prescribed by the State Board of Education and approved by the State Auditor. Data Control codes refer to the account code structure prescribed by the TEA in the Resource Guide.

10. Foundation School Program Revenue

The State of Texas provides funding to Districts through the Foundation School Program based on instructional days, average daily attendance by fiscal year, and other factors. The academic year for the District typically begins several weeks before the beginning of the fiscal year (September 1). During this period expenditures are incurred that relate directly to revenues received in the subsequent fiscal year. In the current year, the District accrued Foundation School revenues to match August days of instruction expenditures.

11. Eliminations

Eliminating entries have not been made in the basic financial statements for transactions between or within fund types.

55 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

12. Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the District’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses/expenditures during the reported period. Actual results could differ from those estimates.

13. Cash and Cash Equivalents

For the statement of cash flows, cash and cash equivalents consists of cash in banks, investment pool deposits, and securities with maturities of less than three months from the date of purchase.

14. Depreciation

Capital assets, which include land, buildings, furniture and equipment, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

The capital assets of the District are depreciated using the straight line method over the following estimated useful lives:

Capital Assets Years

Buildings 30 Computer Equipment 5-7 Land Improvements 11-60 Office Equipment 7-10 Outdoor Equipment/Portables 9-15 Vehicles 5-10

56 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

C. DEPOSITS AND INVESTMENTS

Legal and Contractual Provisions Governing Deposits and Investments

The Public Funds Investment Act (the “PFIA”), Government code Chapter 2256 contains specific provisions in the areas of investment practices, management reports and establishment of appropriate policies. Among other things, it requires the District to adopt, implement, and publicize an investment policy. That policy must be written, primarily emphasize safety of principal and liquidity, and address investment diversification, yield, maturity and the quality and capability of investment management. That policy must include: (1) a list of authorized investments, (2) the maximum allowable stated maturity of any individual investment, (3) for pooled fund groups, the maximum dollar-weighted average sated final maturity, (4) methods to monitor market price of investments, (5) a requirement that all transactions, with limited exceptions, settle on a delivery versus payment basis. Investment policies may provide bid solicitation preferences for certificates of deposit. As an integral part of its investment policy, the District shall also adopt a separate investment strategy for each of the funds or fund groups under its control.

Statutes authorize the District to invest in (1) obligations of the U.S. Treasury or its agencies, and instrumentalities, and the State of Texas or its agencies and instrumentalities; (2) insured or collateralized certificates of deposit, (3) certain municipal securities, (4) certain commercial paper securities, (5) repurchase agreements, (6) certain bankers acceptances, (7) money market mutual funds and certain mutual bond funds, (8) investment pools, (9) and collateralized guaranteed investment contracts.

The PFIA also requires the District to have independent auditors perform test procedures related to investment practices as provided by the PFIA. The District is in substantial compliance with the requirements of the PFIA and with local policies.

Policies Governing Deposits and Investments

In compliance with the PFIA, the District has adopted an investment policy. That policy addresses the following risks:

Disclosures Related to Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The PFIA, the District’s investment policy, and Government Code Chapter 2257 (the “Public Funds Collateral Act”) contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments.

57 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

C. DEPOSITS AND INVESTMENTS (Continued)

The District’s policy requires:

1. Insurance or collateralization of all bank deposits 2. Third party safekeeping of all collateral securities 3. Monthly monitoring of collateral security market values 4. Minimum collateral security market values of 110% of non insured deposits 5. District authorization prior to any collateral security release or substitution and 6. Delivery versus payment for settlement of all investment security transactions

Custodial Credit Risk – Deposits: The District’s bank account and certificate of deposit funds are required to be deposited and invested under the terms of a depository contract. The depository bank places for safekeeping with the District’s agent bank approved pledged securities in an amount sufficient to protect District funds on a day-to-day basis during the period of the contract. The pledge of approved securities is waived only to the extent of the depository bank’s dollar amount of Federal Deposit Insurance Corporation (“FDIC”) insurance.

Custodial Credit Risk – Investments: All District investment security transactions are settled using the delivery versus payment method between the counterparty and the District’s safekeeping agent. The District’s safekeeping agent holds all investment securities until maturity or liquidation by the District.

Bank Deposits

At August 31, 2012, the District’s bank deposits (cash and interest-bearing accounts) were $36,461,281. The carrying amount of the District’s deposits and investments is as follows:

Cash in Bank or On Hand-Cash Equivalents$ 37,258,746 Investment Pools 71,996,147 Total Cash and Cash Equivalents 109,254,893

Certificate of Deposit 50,150 Money Market Mutual Funds 5,000,022 Total Cash and Current Investments$ 114,305,065

A Certificate of Deposit for $50,150 is recorded in the Statement of Net Assets as Restricted Assets.

58 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

C. DEPOSITS AND INVESTMENTS (Continued)

In addition, the following is disclosed regarding coverage of combined balances on the date of highest deposit:

a. Depository: Wells Fargo Bank

b. The market value of securities pledged as of the date of the highest combined balance on deposit was $66,380,779.

c. The largest combined balances of cash, savings, and time deposit accounts amount to $42,269,735 and occurred on January 10, 2012.

d. Total amount of FDIC coverage at the time of the largest combined balance was $250,000.

Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The District manages its exposure to interest rate risk through its investment policy and incorporated investment strategies by maintaining sufficient balances in highly liquid investments (e.g. investment pools), purchasing investments timed to or shorter than specific cash flow requirements and limiting the stated final maturity of all investments.

Information about the sensitivity of the fair values of the District’s investments to market interest rate fluctuations is provided by the following table that shows the specific investments and their maturity:

Weighted Fair Average Investment Type Value Maturity (Days)

Certificate of Deposit (Compass Bank)$ 50,150 100 Money Market Mutual Funds 5,000,022 1 Lone Star Investment Pool (non 2a-7 like pool) 32,804,996 1 MBIA - CLASS Investment Pool (2a-7 like pool) 7,016,939 1 Texas Term (2a-7 like pool) 22,919,052 1 TexSTAR (2a-7 like pool) 9,255,160 1 Total Fair Value$ 77,046,319 Portfolio Weighted Average Maturity 1

59 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

C. DEPOSITS AND INVESTMENTS (Continued)

Disclosure Relating to Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the District’s investment policy and the PFIA and the actual rating as of year end for each investment.

Minimum Description Legal Rating Amount Rating %

Certificate of Deposit (Compass Bank) N/A$ 50,150 N/A 0.07% Money Market Mutual Funds AAAm 5,000,022 AAAm 6.49% Lone Star Investment Pool (non 2a-7 like pool) AAAm 32,804,996 AAA 42.58% MBIA - CLASS Investment Pool (2a-7 like pool) AAAm 7,016,939 AAAm 9.11% Texas Term (2a-7 like pool) AAAm 22,919,052 AAAf 29.75% TexSTAR AAAm 9,255,160 AAAm 12.01% $ 77,046,319 100.00%

Concentration Risk

The investment policy of the District contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the PFIA. There are investments that represent 5% or more of total District investments.

The investment pools utilized by the District restrict concentration risk by adopting investment policies requiring diversification as to maturity and issuer. The investment policy requires diversification of investment security maturities based on the cash flow requirements of the District.

Foreign Currency Risk

The District has no exposure to foreign currency risk.

Money Market Mutual Funds

The District invests excess funds in money market mutual funds with Federated, Wells Fargo – Fidelity Institutional Money Market. Both Funds are registered with the Security Exchange Commission and have been approved by the National Association of Insurance Commissioner (NAIC). Both Funds are rated AAAm by Standard & Poor’s and seek to preserve the value of an investment at $1 per share, while holding a weighted average maturity of 90 days or less.

60 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

C. DEPOSITS AND INVESTMENTS (Continued)

Public Funds Investment Pools

Public funds investment pools in Texas (“Pools”) are established under the authority of the Inter- local Cooperation Act, Chapter 79 of the Texas Government Code and are subject to the provisions of the PFIA. In addition to other provisions of the PFIA designed to promote liquidity and safety of principal, the PFIA requires Pools to: (1) have an advisory board composed of participants in the pool and other persons who do not have a business relationship with the pool and are qualified to advise the pool; (2) maintain a continuous rating of no lower than AAA or AAA-m or an equivalent rating by at least one nationally recognized rating service; and (3) if functioning as a money market mutual fund, maintain the market value of its underlying investment portfolio within one half of one percent of the value of its shares.

The District’s investments in Pools are reported at an amount determined by the fair value per share of the pool’s underlying portfolio, unless the pool is 2a7-like, in which case the fair value is reported at share value. A 2a7-like pool is one which is not registered with the Securities and Exchange Commission (“SEC”) as an investment company, but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940.

D. PROPERTY TAXES

Property taxes are levied by October 1, on the basis of assessed value as of January 1, in conformity with Subtitle E, Texas Property Tax Code. Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1 of the year following the year in which imposed. On January 1 of each year, a tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed. Property tax revenues are considered available when they become due or past due and receivable within the current period.

The District’s assessed valuation of taxable property totaled $11,910,924,086 as of January 1, 2011 and represented 100% of appraised value. The total taxable value on such properties after lawful exemptions was $10,236,354,587. The tax rate for the 2011 roll was $1.19486 for $100 assessed valuation; it was designated as $1.040000 for the general fund and $0.15486 for the debt service fund. As taxes are collected they are recognized as realized revenue. Remaining taxes receivables are recorded as unearned revenue. Delinquent taxes are prorated between maintenance and debt service based on rates adopted for the year of levy. Allowances for uncollectible tax receivables within the general and debt service funds are based on historical experience in collecting property taxes. Uncollectible personal property taxes are periodically reviewed and written off, but the District is prohibited from writing off real property taxes without specific statutory authority from the Texas Legislature.

61 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

E. INTERFUND RECEIVABLES AND PAYABLES

The District has numerous transactions between funds which involve receipts and disbursements by one fund for amounts for another fund. Those transactions which require one fund to reimburse another are classified in the balance sheets of the various funds as “due to/from other funds,” as appropriate. Transactions that would be treated as revenues, expenditures, or expenses if they involved organizations external to the District, are accounted for as revenues, expenditures or expenses in the funds involved.

The Interfund balances between funds result mainly from federal and state grants that operate on a reimbursement basis. Interfund balances occur when one fund pays or receives resources for another fund. The Interfund between the General Fund and the Non Major Funds and Enterprise Fund are specifically due to Accounts Payable invoices that were dated and merchandise/supplies received before August 31, 2012.

The Inter-fund Balance between Enterprise Fund and Non Major Fund is due to the Summer Feeding Program accounts payable invoices that were dated and merchandise/supplies received before August 31, 2012.

Inter-fund balances at August 31, 2012, consisted of the following individual fund receivables and payables:

Due From Due To Other Other Funds Funds General Fund Non Major Fund$ 1,950,880 $ 41,899 Enterprise Fund 7,513 - Total General Fund 1,958,394 41,899

Non Major Fund General Fund 41,899 1,950,880 Enterprise Fund - 493,065 Total Non Major Fund 41,899 2,443,946 Enterprise Fund General Fund Non Major Fund 493,065 7,513 Total Enterprise Fund 493,065 7,513

$ 2,493,358 $ 2,493,358

62 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

F. CAPITAL ASSET ACTIVITY

Beginning Adjustments/ Ending Governmental Activities Balance Additions Retirements Balance

Capital assets, not being depreciated: Land $ 35,625,932 $ 3,917,377 $ 45,430 $ 39,497,879 Construction in Progress 13,268,609 15,578,808 22,860,705 5,986,712 Total capital assets, not being depreciated 48,894,541 19,496,185 22,906,135 45,484,591

Capital assets, being depreciated: Buildings 442,831,205 22,860,704 - 465,691,909 Furniture & Equipment 19,312,606 1,192,680 43,791 20,461,495 Vehicles 25,759,724 1,775,825 689,190 26,846,359 Total capital assets being depreciated 487,903,535 25,829,209 732,981 512,999,763

Less Accumulated Depreciation for: Buildings 170,032,324 14,397,914 - 184,430,238 Furniture & Equipment 12,492,162 1,853,154 35,144 14,310,173 Vehicles 15,968,708 1,496,921 689,190 16,776,439 Total Accumulated Depreciation 198,493,195 17,747,990 724,334 215,516,850

Total capital assets, being depreciated, net 289,410,341 8,081,219 8,647 297,482,913

Governmental Activities Capital Assets, Net $ 338,304,882 $ 27,577,404 $ 22,914,782 $ 342,967,505

Capital assets, being depreciated: Buildings $ 69,800 $ - $ - $ 69,800 Furniture & Equipment 3,327,688 54,040 - 3,381,728 Vehicles 890,607 - - 890,607 Total capital assets being depreciated 4,288,094 54,040 - 4,342,134

Less Accumulated Depreciation for: Buildings 43,302 7,756 - 51,057 Furniture & Equipment 3,004,458 91,631 - 3,096,089 Vehicles 830,110 36,342 - 866,452 Total Accumulated Depreciation 3,877,869 135,729 - 4,013,598

Total capital assets, being depreciated, net 410,225 (81,689) - 328,537

Business-Type Activities Capital Assets, Net $ 410,225 $ (81,689) $ - $ 328,537

63 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

F. CAPITAL ASSET ACTIVITY (Continued)

Depreciation expense was charged to functions/programs of the primary government as follows:

Adjustments/ Depreciation Additions Retirements Expe nse Depreciation Expense was charged to Governmental Functions as Follows: Instruction$ 10,466,872 $ 427,176 $ 10,039,696 Instruction Resources & M edia Services 460,552 18,796 441,756 Instructional Leadership 36,631 1,495 35,136 School Leadership 351,383 14,341 337,042 Guidance, Counseling and Evaluation Svcs 4,386 179 4,207 Health Services 167 7 160 Student (Pupil) Transportation 1,170,492 47,770 1,122,722 Food Services 501,927 20,485 481,442 Cocurricular/Extracurricular Activities 1,216,997 49,668 1,167,329 General Administration 482,467 19,691 462,777 Plant M aintenance and Operations 1,505,437 61,440 1,443,997 Security and M onitoring Services 156,880 6,403 150,477 Data Processing Services 139,318 5,686 133,633 Facilities Acquisition & Construction 1,254,480 51,198 1,203,282 Total Depreciation Expense for Governmental Functions$ 17,747,990 $ 724,334 $ 17,023,656

Depreciation Expense was charged to Business-Type Activities as follows: Business-Type Activities$ 135,729 $ - $ 135,729

Total Depreciation Expense for Business-Type Activities$ 135,729 $ - $ 135,729

Depreciation Expense is the total accumulated depreciation less any adjustments/retirements.

64 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

G. LONG-TERM DEBT

1. Bonded Debt Payable

The bonds are supported by a pledge of the District's full faith and credit. The bond indentures require a levy and collection of taxes without limitation as to rate or amount on all property subject to taxation by the District sufficient in amount to pay the principal and interest on such bonds as they become due. The indentures also require that a debt service fund be created and administered by the District solely for the purpose of paying principal and interest when due. Date Interest Amount of Rate Original Outstanding Outstanding Maturity Issue Payable Issue 09/01/11 Increases Decreases 8/31/2012 Date Governmental Activities School Building Unlimited Tax Bonds 07/01/99 5.00-6.75%$ 25,850,000 $ 3,305,000 $ - $ 1,050,000 $ 2,255,000 2025 09/01/00 5.12-7.50% 37,500,000 1,310,000 - 1,310,000 - 2026 07/01/01 4.70-6.00% 19,880,000 2,075,000 - 660,000 1,415,000 2027 03/25/04 1.51-4.09% 50,064,951 23,680,000 - 5,835,000 17,845,000 2017 04/15/04 2.00-4.75% 74,999,926 49,980,000 - 48,205,000 1,775,000 2034 03/08/05 2.50-5.00% 45,394,989 37,945,000 - 2,670,000 35,275,000 2025 07/15/05 3.32-4.85% 66,869,580 62,889,667 616,370 2,095,000 61,411,037 2035 11/21/06 4.00% 7,934,996 8,437,956 37,911 65,000 8,410,867 2026 05/22/08 2.85% 4,295,000 1,785,000 - 880,000 905,000 2013 08/25/11 3.00-5.00% 34,000,000 34,000,000 - - 34,000,000 2027 05/15/12 45,890,000 - 45,890,000 575,000 45,315,000 2034 Premium Capital Appreciation Bonds 05/15/98 5.175-5.30% 11,567,783 26,546,084 1,415,121 - 27,961,205 2023 Public Property Finance Contractual Obligations 04/01/02 3.40-5.00% 2,560,000 200,000 - 200,000 - 2012 11/01/02 3.25-3.70% 2,770,000 320,000 - 320,000 - 2012 08/15/04 3.00-3.70% 3,861,000 1,307,300 - 419,100 888,200 2014 06/21/05 3.00-4.00% 4,705,000 2,400,000 - 565,000 1,835,000 2015 11/21/08 5.49% 7,350,000 7,030,000 - 230,000 6,800,000 2024 01/13/10 1.64% 17,440,000 17,440,000 - - 17,440,000 2025

Total Governmental Activities $ 280,651,007 $ 47,959,402 $ 65,079,100 $ 263,531,308 Business-Type Activities Public Property Finance Contractual Obligations 08/15/04 3.00-3.70%$ 159,000 $ 47,700 $ - $ 15,900 $ 31,800 2014

Total Business-Type Activities 47,700 - 15,900 31,800

TOTAL BONDED DEBT PAYABLE $ 280,698,707 $ 47,959,402 $ 65,095,000 $ 263,563,108

65 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

G. LONG-TERM DEBT (Continued)

Annual debt service requirements to maturity for general obligation bonds are as follows for Governmental Activities and Business-Type Activities:

Governmental Activities FISCAL YEAR TOTAL ENDED AUGUST 31, PRINCIPAL INTEREST REQUIREMENTS

2013 $ 18,699,100 $ 9,585,114 $ 28,284,214 2014 18,779,100 8,830,356 27,609,456 2015 17,260,000 8,315,461 25,575,461 2016 15,415,001 7,854,051 23,269,052 2017-2021 69,627,240 33,235,076 102,862,316 2022-2026 61,085,867 21,055,820 82,141,687 2027-2031 34,790,000 10,653,369 45,443,369 2031-2035 27,875,000 3,044,350 30,919,350

Total Governmental Activities $ 263,531,308 $ 102,573,598 $ 366,104,905

Business-Type Activities FISCAL YEAR TOTAL ENDED AUGUST 31, PRINCIPAL INTEREST REQUIREMENTS

2013 $ 15,900 $ - $ 15,900 2014 15,900 - 15,900

Total Business-Type Activities 31,800 - 31,800

Total $ 263,563,108 $ 102,573,598 $ 366,136,705

Capital Appreciation Bonds

The total accretion of discount on capital appreciation bonds as August 31, 2012 was $18,954,129. Accretion for this Fiscal Year was $2,069,402 less payments of $505,858 for a net increase of $1,563,543 leaving a balance of $20,517,673 as of August 31, 2012.

66 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

G. LONG-TERM DEBT (Continued)

Refunding Bonds

On April 17, 2012, the District issued $45,890,000 of Unlimited Tax Refunding Bonds, Series 2012, to be used to refund certain of the District’s currently outstanding bonds. The interest rates on the Tax Refunding Bonds range from 2.00% to 5.00% and the final maturity is on August 15, 2024. Debt service payments are scheduled semiannually beginning August 15, 2012. The net present value is $3,280,027. The percentage savings of refunded bonds was 6.85%. The refunding transaction resulted in an economic loss of $2,990,398.

Defeased Bonds Outstanding

The District defeased outstanding general obligation bonds through the Refunding General Obligation Series by placing the proceeds of the new bonds in irrevocable trust to provide for the future debt service payment on the old bonds. Accordingly, the trust account assets and defeased bonds are not included in the District’s financial statements. At August 31, 2012, $75,470,000 of the bonds defeased is outstanding.

2. Long-term Debt The following is a summary of changes in long-term debt: Beginning Ending Due Within Due in More Balance Additions Reductions Balance One Year Than One Year Gove rn me ntal Acti vi ti e s: Bonds Payable: General Obligation Bonds $ 251,953,707 $ 47,959,401 $ 63,345,000 $ 236,568,108 $ 16,550,000 $ 220,018,108 Premium on Issuance of Debt 3,993,883 6,838,574 894,014 9,938,442 364,406 9,574,037 Public Property Finance Contractual Obligations 28,697,300 - 1,734,100 26,963,200 1,725,000 25,238,200

Total Bonds Payable 284,644,889 54,797,975 65,973,114 273,469,750 18,639,406 254,830,344

Accrued Sick Leave 493,857 401,554 334,746 560,664 168,199 392,465 Compensatory Leave 97,283 2,653,756 2,643,427 107,611 107,611 - Arbitrage Rebates ------Workers Compensation Claims Payable 125,000 20,054 20,053 125,000 37,500 87,500 Vacation Benefits Payable 461,286 52,963 438,222 76,027 76,027 - Leases Payable 3,646,105 32,941 1,320,445 2,358,602 1,155,804 1,202,798

Other Long Term Liabilities 4,823,531 3,161,267 4,756,894 3,227,904 1,545,142 1,682,763 Total Governmental Activities Long Term Liabilities $ 289,468,421 $ 57,959,242 $ 70,730,008 $ 276,697,655 $ 20,184,547 $ 256,513,107

Business-Type Activities Bonds Payable Public Property Finance Contractual Obligations $ 47,700 $ - $ 15,900 $ 31,800 $ 15,900 $ 15,900

Total Bonds Payable 47,700 - 15,900 31,800 15,900 15,900 Other Liabilities Accrued Sick Leave 23,009 56,039 6,482 72,565 21,770 50,796 Compensatory Leave 3,275 29,064 30,669 1,671 501 1,169 Vacation Benefits Payable 17,110 9,876 16,254 10,731 10,731 -

Other Liabilities 43,394 94,980 53,406 84,967 33,002 51,965 Total Business-Type Activities Long Term Liabilities $91,094 $ 94,980 $ 69,306 $ 116,767 $ 48,902 $ 67,865

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UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

G. LONG-TERM DEBT (Continued)

The General Operating Fund, Special Revenue Funds, and Enterprise Funds are used to liquidate the liability for compensated absences, accrued sick leave and workers compensation. Governmental Activities liquidates an estimated average of 70%, and Business Type Activities an estimated average of 70%.

Accrued Sick Leave

The District revised the sick leave policy under DEC (Local) Compensation and Benefits Leaves and Absences on March 6, 2012. The changes in policy effect current employees and/or individuals who were employed with the District during the 2011-2012 school year. Employees who retire from the Texas Teacher Retirement System (TRS) or the designated beneficiary of an otherwise eligible employee who passes away while employed by the District shall be eligible for reimbursement of state/local leave under the following conditions:

1. The reimbursement shall be a one-time only benefit for an eligible employee. 2. The reimbursement rate shall be established based on the District approved base pay plan; stipends and extra duty pay shall not be included. 3. The employee has at least ten consecutive years of service with the District.

Compensatory Leave

The District compensates overtime for non-exempt employees. Employees can accumulate up to 240 hours of compensatory time under the Fair Labor Standards Act (FLSA). The District’s local policy does not allow employees to accumulate compensatory time beyond 60 hours per year.

Arbitrage Rebate

The Tax Reform Act of 1986 enacted section 148(f) of the Internal Revenue Code, relating to arbitrage rebate requirements, which generally provides that in order for interest on any issue of obligation to be excluded from gross income (i.e., tax-exempt) the issuer must rebate to the United States the sum of (1) the excess of the amount earned on all "non-purpose investments" acquired with "gross proceeds" of the issue over the amount which would have been earned if such investments had been invested at a yield equal to the yield on the issue, and (2) the earnings on such excess earnings. As of August 31, 2012, the District had no arbitrage rebate liability.

Vacation Benefits Payable

After a full year of service to the District, all full-time hourly/auxiliary employees in positions normally requiring 12 months (at least 240 days) of service shall earn ten vacation days each year.

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UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

G. LONG-TERM DEBT (Continued)

Workers Compensation Claims Payable

As of September 1, 1995, the District ended its workers compensation self-insurance plan. The claims liability reported in the Governmental Fund of $125,000 reported at August 31, 2012 represents the estimated liability outstanding for claims incurred on or before September 1, 1995. The liability is based on the requirements of Governmental Accounting Standards Board Statement No. 10, which requires that a liability be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can reasonably be estimated. After September 1, 1995, the District’s workers compensation plan is handled by commercial insurance. The District retains no risk. For the past three years, there has been no settlement of claims that exceeds our insurance coverage.

The District is 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 District carries commercial insurance.

H. CONTINGENCIES AND COMMITMENTS

Legal Proceedings

The District is a defendant in several lawsuits for claims filed against it. In the best judgment of the District's management in consultation with legal counsel, the accompanying financial statements will not be affected materially by the outcome of any of these proceedings and therefore no loss contingency has been recorded.

Capital Leases

The District has entered into lease agreements for financing the acquisition of computers, computer related equipment and mail processing equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments. The District entered into an agreement for the lease of computers and computer related equipment from HP Financial Services on July 9, 2009. The District has also entered into an agreement for the lease of mail processing equipment with Mail Finance, Inc. on December 15, 2011. Both lease agreements are three year leases.

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UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

H. CONTINGENCIES AND COMMITMENTS (Continued)

The future minimum lease obligations and the net present value of these minimum lease payments as of August 31, 2012 are as follows:

Year Ending August 31, Total Requirements

2013 $ 1,240,316 2014 1,240,316 2015 5,490

Total Minimum Rentals 2,486,123

Less: Amount representing Interest 127,521

Presenet Value Minimum Lease Payments $ 2,358,602

I. DEFERRED/UNEARNED REVENUES

As of August 31, 2012, deferred and unearned revenue was made up of the following in the Fund Financial Statements:

General Fund Property Taxes $ 3,123,622 Advanced Taxes 295,235 Total General Fund 3,418,857

Special Revenue Fund Grant Revenues 91,824

Debt Service Property Taxes 467,258

Enterprise Fund USDA Commodities 29,601

Total $ 4,007,539

70 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

J. DEFINED BENEFIT PENSION PLAN

Plan Description

The District contributes to the Teacher Retirement System of Texas (TRS), a public employee, cost-sharing multiple employer defined benefit pension plan. TRS administers retirement system and disability annuities, and death and survivor benefits to employees and beneficiaries of employees of the public school systems of Texas. It operates primarily under the provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas Government Code, Title 8, Subtitle C. TRS also administers proportional retirement benefits and service credit transfer under Texas Government Code, Title 8, Chapter 803 and 805, respectively. TRS issues a publicly available financial report that includes financial statements and required supplementary information for the defined benefit pension plan. That report may be obtained by writing to the TRS Communications Department, 1000 Red River Street, Austin, Texas 78701, by calling the TRS Communications Department at 1-800-223-8778, or by downloading the report from the TRS internet website, www.trs.state.tx.us, under the TRS Publications heading.

Funding Policy

Since Fiscal Year 1998, State Law requires a state contribution rate of not less than 6.0% of gross earnings and .50% to a retirement health insurance plan. The District provides the contributions for salaries paid from federal and state grants and for salaries made above the statutory minimum. The employee's contribution rate is 6.4% of gross earnings and .65% to the retirement health insurance plan. Contribution requirements are not actuarially determined but are legally established each biennium pursuant to the following state funding policy: (1) The state constitution requires the legislature to establish a member contribution rate of not less than 6.0% of the member’s annual compensation and a state contribution rate of less than 6.0% and not more than 10.0% of the aggregate annual compensation of all members of the system during that fiscal year; (2) A state statute prohibits benefit improvements or contribution reductions if, as a result of a particular action, the time required to amortize TRS’s unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by such action. State, District, and employee contribution information for the last three (3) years were as follows:

On Behalf - State On Behalf - State District Annual Percentage of Retirement Medicare Required ARC Employee Fiscal Year Contribution Part D Contributions (ARC) Contributed Contributions 2010$ 14,926,873 $ 650,452 $ 1,881,517 100%$ 15,416,863 2011$ 14,799,598 $ 662,811 $ 1,717,238 100%$ 15,343,616 2012$ 12,594,626 $ 545,089 $ 2,239,617 100%$ 14,819,687

The On behalf State Contributions were recognized as revenues and expenses by the District. The District contributes to the Texas Public School Retired Employee Group Insurance Program (Medicare Part D), a cost-sharing multiple-employer defined benefit postemployment health care

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UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

plan administered by TRS.

K. HEALTH CARE COVERAGE

During the year ended August 31, 2012, employees of the United Independent School District were covered by a health insurance plan (the plan). The District is not exposed to losses. The District paid premiums of $325 per month per employee to the plan, and employees at their option, authorized payroll withholdings to pay premiums for dependents. All premiums were paid to a licensed insurer. The plan was authorized by Section 21.922, Texas Education Code and was documented by contractual agreement. The contract between the District and the licensed insurer is renewable annually and terms of coverage and premium costs are included in the contractual provisions. Insurance settlements have not exceeded coverage in the last three years.

L. OTHER FINANCING SOURCES AND (USES)

Transfers of funds occur within the governmental funds of the District for accounting purposes.

The District’s Other Financing Sources, (Uses) and Transfers Out comprised of the following:

General Debt Service Fund Fund

Issuance of Refunding Bonds $ - $ 45,890,000

Transfer In from Other Funds - 2,700,000

Premium on Issuance of Bonds - 4,111,142

Transfer Out to Other Funds (2,700,000) -

Payment to Refunded Bonds Escrow Agent - (49,470,398)

$ (2,700,000) $ 3,230,744

A transfer from General Operating Fund into Debt Service Fund was used to pay for bond indebtedness for the Fiscal Year 2012.

On April 17, 2012, the District issued $45,890,000 of Unlimited Tax Refunding Bonds, Series 2012, to be used to refund certain of the District’s currently outstanding bonds. The refunding transaction resulted in an economic loss of $2,990,398.

72 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

M. GENERAL FUND FEDERAL SOURCE REVENUES

Total Grant CFDA or Program Source Number Entitlement

Indirect Costs: ESEA Title I, Part A - Basic 84.010A $ 220,235 ESEA Title I, School Improvement Program (JBA) 84.010A 559 ESEA Title I, School Improvement Program (LBJ) 84.010A 2,077 ESEA Title I, School Improvement Program (GMS) 84.010A 945 ESEA Title I, Part C - Education of Migratory 84.011A 7,775 IDEA Part B, Formula 84.027A 127,492 IDEA Part B, Preschool 84.027A 533 Title III, LEP Immigrant 84.365A 35,949 ESEA Title I, Part A - Teacher & Principal Training 84.367A 20,582 Title II, Part D Technology-ARRA/Stimulus 84.386A 82 Title I, Part A - ARRA/Stimulus 84.389A 2,052 IDEA Part B Formula-ARRA/Stimulus 84.391A 3,452 IDEA Part B Preschool-ARRA/Stimulus 84.392A 88 Total Indirect Costs 421,821 Medicaid Reimbursements 4,694,760 Medicaid Administration Claim (MAC) Reimbursements 93.778 103,291 ROTC Reimbursements 12.113 224,299

Total $ 5,444,171

Indirect cost revenues was determined by applying approved indirect cost rates to actual applicable expenditures of federally funded grant programs. For Fiscal Year 2011/2012, the District operated with a 1.872% indirect cost rate.

N. MAINTENANCE OF EFFORT

United I.S.D. paid health care premiums as follows:

A) Total Annual Premiums for Health Care 2011-2012$ 20,691,145

B) Subtract any non-medical expenditures: Life Insurance (119,303)

C) 2011-2012 Maintenance of Effort $ 20,571,842

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UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

O. DUE TO AND FROM OTHER GOVERNMENTS AND AGENCIES

Amounts Due To and From Other Governments and Agencies are as follows:

Due To Due From General Fund Texas Department of Human Services $ - $ 3,050,681 Texas Education Agency 8,281,176 - Federal Agencies - 47,287 Total General Fund 8,281,176 3,097,969

Special Revenue Fund Texas Education Agency: ESEA Title I, Part A Improving Basic Program - 1,031,202 ESEA Title I Part C, Migrant - 125,316 IDEA B Formula - 1,008,894 Carl D. Perkins Basic Grant - Career & Tech - 258,001 ESEA Title II Part A, Teacher/Principal Training/Rec. - 140,455 Title III, Part A, LEP - 139,697 Project Gear UP State Partnership - 104,641 Non Education Comm. Based Fund - 2,296 Student Success Initiative Grant - 15,000 Total Special Revenue Funds - 2,825,501

Debt Service Fund 797,468 -

Enterprise Fund Texas Education Agency: National School Breakfast/Lunch Program - 460,842

Total Due To/From Other Governments and Agencies $ 9,078,644 $ 6,384,312

P. EDUCATIONAL SERVICE CONTRACT

The District has an educational service contract with the Regional Day School Program for the Deaf (RDSPD) which provides for the efficient delivery of legally required special education and related services to eligible students who are deaf or hard of hearing within the boundaries of ESC, Region One. The District has contracted with Laredo Independent School District (LISD) to provide services through the RDSPD. The following is a summary of payments made to LISD:

Invoice No. Amount 1$ 91,035 2 92,309 3 92,309

Total Paid$ 275,652

74 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

Q. COMPLIANCE VIOLATION

The District is not aware of any compliance violations.

R. UNEMPLOYMENT COMPENSATION POOL

During the year ended August 31, 2012, United ISD provided unemployment compensation coverage to its employees through participation in the TASB Risk Management Fund (The Fund). The Fund was created and is operated under the provisions of the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code. The Fund’s Unemployment Compensation Program is authorized by Section 22.005 of the Texas Education Code and Chapter 172 of the Texas Local Government Code. All members participating in the Fund execute Interlocal Agreements that define the responsibilities of the parties.

The Fund meets its quarterly obligation to the Texas Workforce Commission. Expenses are accrued monthly until the quarterly payment has been made. Expenses can be reasonably estimated; therefore, there is no need for specific or aggregate stop loss coverage for the Unemployment Compensation pool.

The Fund engages the services of an independent auditor to conduct a financial audit after the close of each plan year on August 31. The audit is accepted by the Fund’s Board of Trustees in February of the following year. The Fund’s audited financial statements as of August 31, 2011, are available at the TASB offices and have been filed with the Texas Department of Insurance in Austin.

S. FUND BALANCE

The District recognizes the importance of maintaining its financial integrity; therefore, it has developed a policy under Annual Operating Budget CE (Local) to support its mission and its goals and objectives. The fund balance of the General Fund shall mean the gross difference between General Fund Assets and Liabilities reflected on the Balance Sheet. The five classifications of fund balance of the governmental types are Non-spendable, Restricted, Committed, Assigned, and Unassigned.

Nonspendable fund balance shall mean the portion of the gross fund balance that is not expendable (such as inventories) or is legally earmarked for a specific use (such as the self- funded reserves program).

Restricted fund balance shall include amounts constrained to a specific purpose by the provider, such as a grantor.

Committed fund balance shall mean that portion of the fund balance that is constrained to a specific purpose by the Board. The Board’s commitment may be modified or rescinded by a majority vote in a scheduled meeting. Board commitments cannot exceed the amount of fund balance that is greater than the sum of non-spendable and restricted fund balances since that practice would commit funds that the District does not have. Board commitments must occur before the end of the reporting period with amounts to be determined subsequently.

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UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

S. FUND BALANCE (Continued)

Assigned fund balance shall mean that portion of the fund balance that is spendable or available for appropriation but has been tentatively earmarked for some specific purpose by the Board, the Superintendent, or Superintendent’s designee. The Board delegates by formal action in a scheduled meeting specific persons or groups to assign certain fund balances. The Board may modify or rescind its delegation of authority by the same action. The authority to make assignments shall be in effect until modified or rescinded by the Board by majority vote in a scheduled meeting.

Unassigned fund balance shall include amounts available for any legal purpose. This portion of the total fund balance in the general fund is available to finance operating expenditures.

The order of spending and availability shall be to reduce funds from the listed areas in the following order: restricted, committed, assigned, and unassigned.

The District has Committed $5,780,000 of its Fund Balance for the construction of a Facility and Transportation Compound and road to the compound.

The District has Assigned of $125,000 of its Fund Balance for Self Insurance Plan (Workers Compensation) and $2,521,588 for future Land Purchases.

The District manages several Special Revenue Funds of which the following have a fund balance at August 31, 2012:

 Instructional Allotment-to account on a project basis for funds awarded to school districts to purchase instructional materials, technological equipment, and technology-related services. The fund balance of $319,461.

 Campus Activity Fund – to account on a project basis for transactions related to a principal’s activity fund and the monies generated are not subject to recall by the school district’s board of trustees into the General Fund. The fund balance of $578,001 is fully controlled by the various campuses.

 Migrant Program Grant – to account on a project basis to design, operate and support programs that help migrant students overcome the challenges of a high level of mobility, cultural and language barriers, social isolation, and other difficulties associated with a migratory lifestyle, in order to succeed in school and to successfully transition to post-secondary education or employment. The fund balance of $2,760 will be used to cover expenses for migrant students and scholarships.

 Teacher Awards - to account on a project basis for a charitable donation from Worth Ave. Group. The purpose of this award is to enable schools the opportunity to strengthen technology through technology grants or donated electronic devices. The fund balance is $4,872 will be used to purchase additional I Pads, I Pods or other technology equipment.

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UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas For The Year Ended August 31, 2012

S. FUND BALANCE (Continued)

 Permanent Trust Fund – to account on a project basis for a charitable donation in the amount of $50,000 that is to be invested in a certificate of deposit with the interest proceeds used each year to fund two annual scholarships starting in 2010. The fund balance is $52,094 of which $2,094 will be used for scholarships.

The District’s other Special Revenue Funds can be located on page 84.

T. OUTSTANDING ENCUMBRANCES

As of August 31, 2012, the District had outstanding encumbrances of $13,467,220. The following is a listing of the outstanding encumbrances by function for Governmental Activities:

Major General Operating Fund:

By Function Amount 11 Instructional $ 769,531 21 Instructional Leadership 2,125 23 School Leadership 2,145 33 Health Services 10,180 34 Student Transportation 32,876 36 Co/Extra Curricular 26,162 41 General Administration 47,859 51 Facilities Maintenance & Operations 625,166 52 Security & Monitoring Services 58,648 53 Data Processing Services 18,230 61 Community Service 2,680 81 Facilities Acquistion & Construction 11,871,619 $ 13,467,220

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Non Major Funds

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SPECIAL REVENUE FUNDS

Special Revenue Funds are used to account for resources restricted to, or designated for, specific purposes by a grantor. Federal financial assistance often is accounted for in a Special Revenue Fund. In most Special Revenue Funds, unused balances are recorded as deferred revenue and carried forward to the succeeding fiscal year, provided the amounts carried forward are returned to the grantor at the close of specified project periods. The District budgets for Special Revenue Funds and uses project accounting for them in order to maintain integrity for the various sources of funds. Included in the District’s Special Revenue Funds are:

211 ESEA, Title I, Part A, Improving Basic Programs – to account on a project basis for funds allocated for programs to local educational agencies which enable schools to provide opportunities for children served to acquire the knowledge and skills contained in the challenging State content standards and the State performance standards developed for all children.

212 ESEA, Title I, Part C, Education of Migratory Children – to account on a project basis for funds allocated for programs benefiting children of migrant agriculture or agriculture-related workers and children of migrant fishermen.

224 IDEA Part B, Formula – to account on a project basis for funds granted to operate educational programs for handicapped children with disabilities. This fund classification includes building and improvement (sliver) subgrants.

225 IDEA Part B, Preschool – to account on a project basis for funds granted for preschool children with disabilities.

242 Summer Feeding Program, Department of Human Services (DHS) – to account on a project basis for funds received from the Department of Human Services that are awarded for meals provided to the community based on the average number of daily participants. This fund should be used regardless of whether a school district’s National School Breakfast and Lunch Program is accounted for in the General Fund, a Special Revenue Fund or an Enterprise Fund.

244 Vocational Ed. Basic Grant (Carl D. Perkins Basic Grant for CATE) – to account on a project basis for funds to provide career and technology education to develop new and/or improve career and technology education programs for paid and unpaid unemployment, with full participation of individuals who are members of special populations, at a limited number of campuses (sites) or with respect to a limited number of program areas.

255 ESEA, Title II, Part A, Teacher/Principal Training and Recruiting– to account on a project basis for funds to be used to provide assistance to LEA’s to (1) increase student academic achievement through improving teacher and principal quality and increasing the number of highly qualified teachers in classrooms and highly qualified principals and assistant principals in schools, and (2) hold local education agencies and schools accountable for improving student academic achievement.

81 United Independent School District

263 Title III, Part A, LEP- to account on a project basis for funds granted to improve the education of limited English proficient children, by assisting the children to learn English and meet challenging State academic content and student academic achievement standards.

266 ARRA Title XIV, State Fiscal Stabilization Fund - This fund classification is to be used to account, on a project basis, for funds granted to improve basic programs authorized by the ESEA of 1965, as amended by the NCLB Act of 2001, IDEA, the Adult and Family Literacy Act, the Carl D. Perkins Act of 2006, or for the modernization, renovation, and repairs that are consistent with a recognized green building rating system. This grant is funded by the American Recovery and Reinvestment Act (ARRA) of 2009, Title XIV.

274 GEAR UP - This fund classification is used to account, on a project basis, for funds granted to school districts received through ESC. These funds enable students to take advantage of the state’s new scholarship program for economically disadvantaged students.

279 Title II, Part D ARRA – Enhancing Education through Technology - This fund classification is used to account, on a project basis, for funds granted for the implementation and support of a comprehensive system that effectively uses technology in elementary and secondary schools to improve student academic achievement

283 IDEA, Part B Formula ARRA – to account, on a project basis, for funds granted to operate educational programs for children with disabilities.

284 IDEA, Part B Preschool ARRA – to account, on a project basis, for funds granted for preschool children with disabilities.

285 ARRA Title I, Part A, Improving Basic Programs - This fund classification is to be used to account, on a project basis, for funds allocated to local educational agencies to enable schools to provide opportunities for children served to acquire the knowledge and skills contained in the challenging State content standards and to meet the challenging State performance standards developed for all children. This grant is funded by the American Recovery and Reinvestment Act (ARRA) of 2009, Title VIII. *This fund code is also used for ARRA Title I, Part D, Subpart 2.

287 Education Jobs Fund - to account on a project basis for funds granted for school level employee compensation and benefits and other expenses, such as support services, necessary to retain existing school level employees, recall or rehire former school level employees, or hire new school level employees.

287 Secure Our Schools COPS Grant - to account on a project basis for funds granted for campuses to assist with the purchase and development of school safety resources based upon a comprehensive approach to preventing school violence and individualized to the needs of the schools. This funding will allow recipients the opportunity to establish and enhance a variety of school safety equipment and/or programs to encourage the continuation and enhancement of school safety efforts meant to prevent school violence within their communities.

288 ARRA, Equipment Assistance Grant - to account on a project basis for funds granted to improve the infrastructure in the NSLP. The award may be used to purchase new equipment, renovate existing equipment or replace existing equipment.

82 CAFR for the Year Ending August 31, 2012

289 Other Federal Special Revenue Funds (Child Care Development Fund)- to account for funds granted by the Texas Workforce Commission to provide for the expansion and improvement of the Pregnancy, Education, and Parenting Program.

392 Non-Educational Community Based Program – to account on a project basis for the provision of non- educational community-based support services to students with disabilities who would remain or have to be placed in residential facilities for educational reasons without the provision of these services. The support services may include transportation, respite for the parents, case management, social work, in-home family support and other items.

394 Pregnancy, Education, and Parenting Program – to account on a project basis for funds granted to provide pregnant and parenting students the services needed to keep them in school until completion.

397 Advanced Placement Incentive Program – to account on a project basis for funds awarded to school districts under the Texas Advanced Placement Award Incentive Program.

404 Student Success Initiative (Accelerated Reading/Math Instruction Program) – to account on a project basis for funds granted to provide intensive, targeted early intervention programs for students at every campus who have been identified as at-risk with reading/math difficulties, including dyslexia.

410 Instructional Allotment - This fund classification is to be used to account, on a project basis, for funds awarded to school districts to purchase instructional materials, technological equipment, and technology-related services.

411 State Technology Allotment - to account on a project basis for funds awarded to school districts to purchase technological software or equipment that contributes to student learning, or to pay for training for educational personnel involved in the use of these materials.

461 Campus Activity Fund – to account for transactions related to a principal’s activity fund and the monies generated are not subject to recall by the school district’s board of trustees into the General Fund.

483 Community Partnership Activity – to account for funds donated from the community to assist students of the school district in continuing their education.

484 Migrant Program Grant – to account for on a project basis to design, operate and support programs that help migrant students overcome the challenges of a high level of mobility, cultural and language barriers, social isolation, and other difficulties associated with a migratory lifestyle, in order to succeed in school and to successfully transition to postsecondary education or employment.

499 Teacher Awards - to account on a project basis for a charitable donation from Worth Ave. Group. The purpose of this award is to enable schools the opportunity to strengthen technology through technology grants or donated electronic devices.

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UNITED INDEPENDENT SCHOOL DISTRICT COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS AUGUST 31, 2012 211 212 224 225 Data ESEA I, A ESEA Title I IDEA - Part B IDEA - Part B Control Improving Part C Formula Preschool Codes Basic Program Migrant

ASSETS 1110 Cash and Cash Equivalents $ - $ - $ - $ - 1240 Receivables from Other Governments 1,031,202 125,316 514,606 - 1250 Accrued Interest - - - - 1290 Other Receivables - - - - 1800 Restricted Assets - - - -

1000 Total Assets $ 1,031,202 $ 125,316 $ 514,606 $ -

LIABILITIES AND FUND BALANCES Liabilities: 2110 Accounts Payable $ 27 $ - $ - $ - 2160 Accrued Wages Payable 205,975 - 104,645 - 2170 Due to Other Funds 825,201 125,316 409,961 - 2190 Due to Student Groups - - - - 2300 Deferred Revenues - - - -

2000 Total Liabilities 1,031,202 125,316 514,606 - Fund Balances: Assigned Fund Balance: 3590 Other Assigned Fund Balance - - - -

3000 Total Fund Balances - - - -

4000 Total Liabilities and Fund Balances $ 1,031,202 $ 125,316 $ 514,606 $ -

84 CAFR for the Year Ending August 31, 2012

EXHIBIT H-1 (Cont'd)

242 244 255 263 266 274 279 283 Summer Career and ESEA II,A Title III, A Title XIV GEAR UP Title II, D IDEA, Pt. B Feeding Technical - Training and English Lang. ARRA State ARRA - Ed. ARRA Program Basic Grant Recruiting Acquisition Stabilization Technology Formula

$ - $ - $ - $ - $ - $ - $ - $ - 494,288 258,001 140,455 139,697 - 104,641 ------

$ 494,288 $ 258,001 $ 140,455 $ 139,697 $ - $ 104,641 $ - $ -

$ 1,222 $ - $ - $ - $ - $ 21 $ - $ - - - 38,511 31,155 - - - - 493,065 258,001 101,944 108,543 - 104,619 ------

494,288 258,001 140,455 139,697 - 104,641 - -

------

------

$ 494,288 $ 258,001 $ 140,455 $ 139,697 $ - $ 104,641 $ - $ -

85 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS AUGUST 31, 2012 284 285 287 288 Data IDEA, Pt. B ESEA I,A Eucation Jobs Equipment Control ARRA Improving Fund Assistance Codes Preschool Basic Program Grant

ASSETS 1110 Cash and Cash Equivalents $ - $ - $ - $ - 1240 Receivables from Other Governments - - - - 1250 Accrued Interest - - - - 1290 Other Receivables - - - - 1800 Restricted Assets - - - -

1000 Total Assets $ - $ - $ - $ -

LIABILITIES AND FUND BALANCES Liabilities: 2110 Accounts Payable $ - $ - $ - $ - 2160 Accrued Wages Payable - - - - 2170 Due to Other Funds - - - - 2190 Due to Student Groups - - - - 2300 Deferred Revenues - - - -

2000 Total Liabilities - - - - Fund Balances: Assigned Fund Balance: 3590 Other Assigned Fund Balance - - - -

3000 Total Fund Balances - - - -

4000 Total Liabilities and Fund Balances $ - $ - $ - $ -

86 CAFR for the Year Ending August 31, 2012

EXHIBIT H-1 (Cont'd)

289 392 394 397 404 410 411 461 Other Federal Non-Ed. Life Advanced Student State Technology Campus Special Community Skills Placement Success Textbook Allotment Activity Revenue Funds Based Support Program Incentives Initiative Fund Funds

$ - $ - $ 55,484 $ 36,340 $ - $ 319,461 $ - $ 578,001 - 2,296 - - 15,000 ------

$ - $ 2,296 $ 55,484 $ 36,340 $ 15,000 $ 319,461 $ - $ 578,001

$ - $ - $ - $ - $ - $ - $ - $ ------2,296 - - 15,000 ------55,484 36,340 - - - -

- 2,296 55,484 36,340 15,000 - - -

- - - - - 319,461 - 578,001

- - - - - 319,461 - 578,001

$ - $ 2,296 $ 55,484 $ 36,340 $ 15,000 $ 319,461 $ - $ 578,001

87 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS AUGUST 31, 2012 483 484 499 Total Data Community Migrant Other Local Nonmajor Control Partnerships Program Special Special Codes Activity Grant Revenue Funds Revenue Funds

ASSETS 1110 Cash and Cash Equivalents $ 46,728 $ 26,412 $ 4,872 $ 1,067,298 1240 Receivables from Other Governments - - - 2,825,501 1250 Accrued Interest - - - - 1290 Other Receivables - 15,500 - 15,500 1800 Restricted Assets - - - -

1000 Total Assets $ 46,728 $ 41,912 $ 4,872 $ 3,908,299

LIABILITIES AND FUND BALANCES Liabilities: 2110 Accounts Payable $ - $ - $ - $ 1,270 2160 Accrued Wages Payable - - - 380,285 2170 Due to Other Funds - - - 2,443,946 2190 Due to Student Groups 46,728 39,152 - 85,880 2300 Deferred Revenues - - - 91,824

2000 Total Liabilities 46,728 39,152 - 3,003,205 Fund Balances: Assigned Fund Balance: 3590 Other Assigned Fund Balance - 2,760 4,872 905,094

3000 Total Fund Balances - 2,760 4,872 905,094

4000 Total Liabilities and Fund Balances $ 46,728 $ 41,912 $ 4,872 $ 3,908,299

88 CAFR for the Year Ending August 31, 2012

EXHIBIT H-1

472 Total Permanent Nonmajor Trust Governmental Fund Funds

$ 1,869 $ 1,069,167 - 2,825,501 75 75 - 15,500 50,150 50,150

$ 52,094 $ 3,960,393

$ - $ 1,270 - 380,285 - 2,443,946 - 85,880 - 91,824

- 3,003,205

52,094 957,188

52,094 957,188

$ 52,094 $ 3,960,393

89 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED AUGUST 31, 2012

211 212 224 225 Data ESEA I, A ESEA Title I IDEA - Part B IDEA - Part B Control Improving Part C Formula Preschool Codes Basic Program Migrant REVENUES: 5700 Total Local and Intermediate Sources $ - $ - $ - $ - 5800 State Program Revenues - - - - 5900 Federal Program Revenues 11,687,120 527,493 6,805,381 28,497 5020 Total Revenues 11,687,120 527,493 6,805,381 28,497 EXPENDITURES: Current: 0011 Instruction 8,054,792 240,640 4,697,701 28,497 0012 Instructional Resources and Media Services 48,494 - - - 0013 Curriculum and Instructional Staff Development 2,882,969 122 9,832 - 0021 Instructional Leadership 358,675 88,018 381,080 - 0023 School Leadership - - 206,726 - 0031 Guidance, Counseling and Evaluation Services 85,800 113,567 1,491,495 - 0035 Food Services - - - - 0036 Extracurricular Activities - - 9,020 - 0041 General Administration - - - - 0051 Facilities Maintenance and Operations 275 2,197 - - 0052 Security and Monitoring Services - - - - 0053 Data Processing Services 368 - - - 0061 Community Services 255,747 82,949 9,527 - Debt Service: 0071 Principal on Long Term Debt - - - - 0072 Interest on Long Term Debt - - - - 6030 Total Expenditures 11,687,120 527,493 6,805,381 28,497

1200 Net Change in Fund Balance - - - - 0100 Fund Balance - September 1 (Beginning) - - - -

3000 Fund Balance - August 31 (Ending) $ - $ - $ - $ -

90 CAFR for the Year Ending August 31, 2012

EXHIBIT H-2 (Cont'd)

242 244 255 263 266 274 279 283 Summer Career and ESEA II,A Title III, A Title XIV GEAR UP Title II, D IDEA, Pt. B Feeding Technical - Training and English Lang. ARRA State ARRA - Ed. ARRA Program Basic Grant Recruiting Acquisition Stabilization Technology Formula

$ 3,500 $ - $ - $ - $ - $ - $ - $ ------494,288 812,701 1,039,648 1,886,769 7,353 176,641 4,661 217,227 497,788 812,701 1,039,648 1,886,769 7,353 176,641 4,661 217,227

- 800,158 1,023,660 1,410,532 - 45,600 - 185,458 ------12,000 1,686 10,955 7,353 45,326 4,661 31,769 - 543 - 455,282 ------85,364 - - 497,788 ------14,302 ------10,000 - 351 - -

------497,788 812,701 1,039,648 1,886,769 7,353 176,641 4,661 217,227

------

$ - $ - $ - $ - $ - $ - $ - $ -

91 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED AUGUST 31, 2012

284 285 287 288 Data IDEA, Pt. B ESEA I,A Eucation Jobs Equipment Control ARRA Improving Fund Assistance Codes Preschool Basic Program Grant REVENUES: 5700 Total Local and Intermediate Sources $ - $ - $ - $ - 5800 State Program Revenues - - - - 5900 Federal Program Revenues 5,019 117,320 201,234 254,196 5020 Total Revenues 5,019 117,320 201,234 254,196 EXPENDITURES: Current: 0011 Instruction 5,019 59,040 165,886 - 0012 Instructional Resources and Media Services - - - - 0013 Curriculum and Instructional Staff Development - 58,280 - - 0021 Instructional Leadership - - - - 0023 School Leadership - - - - 0031 Guidance, Counseling and Evaluation Services - - - - 0035 Food Services - - - 254,196 0036 Extracurricular Activities - - - - 0041 General Administration - - - - 0051 Facilities Maintenance and Operations - - 2,828 - 0052 Security and Monitoring Services - - 32,520 - 0053 Data Processing Services - - - - 0061 Community Services - - - - Debt Service: 0071 Principal on Long Term Debt - - - - 0072 Interest on Long Term Debt - - - - 6030 Total Expenditures 5,019 117,320 201,234 254,196

1200 Net Change in Fund Balance - - - - 0100 Fund Balance - September 1 (Beginning) - - - -

3000 Fund Balance - August 31 (Ending) $ - $ - $ - $ -

92 CAFR for the Year Ending August 31, 2012

EXHIBIT H-2 (Cont'd)

289 392 394 397 404 410 411 461 Other Federal Non-Ed. Life Advanced Student State Technology Campus Special Community Skills Placement Success Textbook Allotment Activity Revenue Funds Based Support Program Incentives Initiative Fund Funds

$ - $ - $ 19,864 $ - $ - $ - $ - $ 3,602,709 - 3,009 - 33,557 87,993 4,162,826 - - 93,778 ------93,778 3,009 19,864 33,557 87,993 4,162,826 - 3,602,709

57,709 3,009 1,837 33,557 87,993 3,843,365 ------36,069 ------3,632,930 ------18,027 - - - - -

------261,155 ------124,564 - 93,778 3,009 19,864 33,557 87,993 3,843,365 385,719 3,632,930

- - - - - 319,461 (385,719) (30,221) ------385,719 608,222

$ - $ - $ - $ - $ - $ 319,461 $ - $ 578,001

93 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED AUGUST 31, 2012

483 484 499 Total Data Community Migrant Other Local Nonmajor Control Partnerships Program Special Special Codes Activity Grant Revenue Funds Revenue Funds REVENUES: 5700 Total Local and Intermediate Sources $ - $ 5,030 $ 25,000 $ 3,656,103 5800 State Program Revenues - - - 4,287,385 5900 Federal Program Revenues - - - 24,359,327 5020 Total Revenues - 5,030 25,000 32,302,815 EXPENDITURES: Current: 0011 Instruction - 5,370 20,128 20,769,952 0012 Instructional Resources and Media Services - - - 48,494 0013 Curriculum and Instructional Staff Development - - - 3,101,022 0021 Instructional Leadership - - - 1,283,598 0023 School Leadership - - - 3,839,656 0031 Guidance, Counseling and Evaluation Services - - - 1,776,226 0035 Food Services - - - 751,984 0036 Extracurricular Activities - - - 9,020 0041 General Administration - - - 14,302 0051 Facilities Maintenance and Operations - - - 5,300 0052 Security and Monitoring Services - - - 32,520 0053 Data Processing Services - - - 368 0061 Community Services - - - 376,601 Debt Service: 0071 Principal on Long Term Debt - - - 261,155 0072 Interest on Long Term Debt - - - 124,564 6030 Total Expenditures - 5,370 20,128 32,394,762

1200 Net Change in Fund Balance - (340) 4,872 (91,947) 0100 Fund Balance - September 1 (Beginning) - 3,100 - 997,041

3000 Fund Balance - August 31 (Ending) $ - $ 2,760 $ 4,872 $ 905,094

94 CAFR for the Year Ending August 31, 2012

EXHIBIT H-2

472 Total Permanent Nonmajor Trust Governmental Fund Funds

$ 120 $ 3,656,223 - 4,287,385 - 24,359,327 120 32,302,935

- 20,769,952 - 48,494 - 3,101,022 - 1,283,598 - 3,839,656 - 1,776,226 - 751,984 - 9,020 - 14,302 - 5,300 - 32,520 - 368 - 376,601

- 261,155 - 124,564 - 32,394,762

120 (91,827) 51,974 1,049,015

$ 52,094 $ 957,188

95 United Independent School District UNITED INDEPENDENT SCHOOL DISTRICT STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

Balance Net Balance August 31, Additions Deductions Increase August 31, 2011 (Decrease) 2012 Student Funds by Campus ASSETS Cash and Cash Equivalents United High School $ 201,675 $ 945,256 $ 899,915 $ 45,340 $ 247,016 United High School 9th Gr. Campus 20,721 136,136 143,758 (7,622) 13,098 United South High School 110,152 598,710 594,766 3,944 114,096 J.B. Alexander High School 217,452 687,711 677,041 10,670 228,121 S.T.E.P. ACADEMY - 25 25 - - L.B.J. High School 84,563 468,873 452,763 16,110 100,674 United Middle School 40,132 159,345 163,237 (3,892) 36,240 United South Middle School 27,117 88,155 96,131 (7,977) 19,140 Salvador Garcia Middle School 10,730 64,064 64,534 (470) 10,260 Washington Middle School 33,211 110,373 116,013 (5,640) 27,571 Clark Middle School 34,277 160,923 155,069 5,855 40,131 Los Obispos Middle School 23,452 81,043 75,010 6,033 29,485 Trautmann Middle School 70,227 176,451 204,330 (27,879) 42,349 Trautmann Middle 6th Grade Campus 15,354 55,076 55,544 (468) 14,886 Gonzalez Middle School 43,456 113,799 109,366 4,433 47,889 Lamar Bruni Vergara Middle School 20,573 67,862 66,159 1,703 22,277 Nye Elementary School 27,367 76,802 100,220 (23,418) 3,949 Clark Elementary School 8,292 133 8,421 (8,288) 4 Salinas Elementary School 16,498 94,671 95,164 (494) 16,004 Newman Elementary School 7,356 62 7,418 (7,356) - Trautmann Elementary School 12,513 86,493 89,830 (3,338) 9,176 Perez Elementary School 8,256 42,388 31,915 10,473 18,729 Finley Elementary School 19,460 34,382 42,657 (8,275) 11,185 United DD Hachar Elementary School 1,658 - 1,658 (1,658) - Gutierrez Elementary School 25,096 31,917 49,111 (17,194) 7,903 Ruiz Elementary School 21,013 104,320 102,209 2,111 23,124 Matias De Llano Elementary School 25,404 72,904 78,768 (5,864) 19,540 Kazen Elementary School 840 15,606 12,673 2,933 3,774 Juarez-Lincoln Elementary School 7,367 16,001 20,360 (4,359) 3,009 Prada Elementary School 9,345 30,129 31,773 (1,644) 7,701 Borchers Elementary School 27,385 74,762 82,936 (8,174) 19,210 Kennedy-Zapata Elementary School 5,493 19,355 22,927 (3,572) 1,921 Col. Santos Benavides Elementary School 64,023 150,646 181,418 (30,773) 33,250 Roosevelt Elementary School 11,897 35,483 4 0,331 (4,848) 7,048 Sen. Judith Zaffirini Elementary School 40,202 63,905 92,735 (28,830) 11,371 Dr. Henry Cuellar Elementary School 14,716 9,305 17,075 (7,770) 6,946 Muller Elementary School 21,627 17,671 29,631 (11,960) 9,667 Arndt Elementary School 20,915 35,862 45,586 (9,724) 11,192 Bonnie Garcia Elementary 23,569 67,553 75,495 (7,942) 15,627 Centeno Elementary 29,536 212 29,748 (29,536) - Malakoff Elementary 17,470 1,860 19,322 (17,462) 7 Fasken Elementary 36,087 83,580 99,187 (15,608) 20,480 Killam Elementary 17,541 40,678 47,706 (7,028) 10,513 Special Student Activities 37,855 401,457 402,296 (839) 37,016 Total Cash and Cash Equivalents 1,511,872 5,521,936 5,732,230 (210,294) 1,301,578 Other Receivables 168 168 (168) - TOTAL ASSETS $ 1,512,040 $ 5,521,936 $ 5,732,398 $ (210,462) $ 1,301,578

LIABILITIES Due to General Fund $ 10,000 $ 10,000 $ (10,000) $ - Due to Student Groups 1,464,186 5,120,479 5,320,103 (199,624) 1,264,562 Due to Special Activities 37,855 401,457 402,296 (839) 37,016 TOTAL LIABILITIES $ 1,512,040 $ 5,521,936 $ 5,732,399 $ (210,463) $ 1,301,578

The accompanying notes are an integral part of this statement.

96 CAFR for the Year Ending August 31, 2012

EXHIBIT J-4 UNITED INDEPENDENT SCHOOL DISTRICT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - CHILD NUTRITION PROGRAM FOR THE YEAR ENDED AUGUST 31, 2012

Data Actual Amounts Variance With (GAAP BASIS) Final Budget Control Budgeted Amounts Positive or Codes Original Final (Negative)

REVENUES: 5700 Total Local and Intermediate Sources $ 2,668,000 $ 2,671,000 $ 2,330,169 $ (340,831) 5800 State Program Revenues 135,000 607,607 569,126 (38,481)

5020 Total Revenues 2,803,000 3,278,607 2,899,295 (379,312) EXPENDITURES: 0035 Food Services 23,001,823 24,333,314 22,170,111 2,163,203 0051 Plant Maintenance and Operations 324,883 327,886 270,281 57,605

6030 Total Expenditures 23,326,706 24,661,200 22,440,392 2,220,808 1100 Excess (Deficiency) of Revenues Over (Under) (20,523,706) (21,382,593) (19,541,097) 1,841,496 Expenditures OTHER FINANCING SOURCES (USES): 7952 National School Breakfast Program 6,200,000 6,200,000 5,739,813 (460,187) 7953 National School Lunch Program 12,820,706 12,820,706 12,138,254 (682,452) 7954 Donated Commodities (USDA) 1,500,000 1,500,000 1,428,291 (71,709) 7955 Investment Income 3,000 3,000 1,248 (1,752)

7080 Total Other Financing Sources (Uses) 20,523,706 20,523,706 19,307,606 (1,216,100)

1200 Change in Net Assets - (858,887) (233,491) 625,396 0100 Total Net Assets - September 1 (Beginning) 3,854,022 3,854,022 3,854,022 -

3000 Total Net Assets - August 31 (Ending) $ 3,854,022 $ 2,995,135 $ 3,620,531 $ 625,396

97 United Independent School District

EXHIBIT J-5 UNITED INDEPENDENT SCHOOL DISTRICT SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL - DEBT SERVICE FUND FOR THE YEAR ENDED AUGUST 31, 2012

Data Actual Amounts Variance With (GAAP BASIS) Final Budget Control Budgeted Amounts Positive or Codes Original Final (Negative)

REVENUES: 5700 Total Local and Intermediate Sources $ 15,821,709 $ 15,821,709 $ 16,250,014 $ 428,305 5800 State Program Revenues 7,217,006 7,217,006 6,420,136 (796,870)

5020 Total Revenues 23,038,715 23,038,715 22,670,150 (368,565) EXPENDITURES: Debt Service: 0071 Principal on Long Term Debt 16,290,000 16,865,000 16,865,000 - 0072 Interest on Long Term Debt 9,680,614 9,104,291 9,104,290 1 0073 Bond Issuance Cost and Fees 5,000 525,163 509,442 15,721

6030 Total Expenditures 25,975,614 26,494,454 26,478,732 15,722 1100 Excess (Deficiency) of Revenues Over (Under) (2,936,899) (3,455,739) (3,808,582) (352,843) Expenditures OTHER FINANCING SOURCES (USES): 7901 Refunding Bonds Issued - 45,890,000 45,890,000 - 7915 Transfers In - 2,700,000 2,700,000 - 7916 Premium or Discount on Issuance of Bonds - 4,111,142 4,111,142 - 8949 Other (Uses) - (49,470,398) (49,470,398) -

7080 Total Other Financing Sources (Uses) - 3,230,744 3,230,744 -

1200 Net Change in Fund Balances (2,936,899) (224,995) (577,838) (352,843) 0100 Fund Balance - September 1 (Beginning) 4,943,715 4,943,715 4,943,715 -

3000 Fund Balance - August 31 (Ending) $ 2,006,816 $ 4,718,720 $ 4,365,877 $ (352,843)

98 CAFR for the Year Ending August 31, 2012

Texas Education Agency:

Required Schedules

99 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT SCHEDULE OF DELINQUENT TAXES RECEIVABLE FISCAL YEAR ENDED AUGUST 31, 2011

(1) (2) (3) Assessed/Appraised Last 10 Years Ended Tax Rates Value for School August 31 Maintenance Debt Service Tax Purposes

2003 and prior years $ 1.327570 $ 0.149301 $ 15,409,204,662

2004 1.329933 0.146938 4,892,183,079

2005 1.379945 0.146926 5,227,345,817

2006 1.379945 0.226926 6,264,666,797

2007 1.263597 0.210758 7,682,484,544

2008 1.030009 0.154860 8,090,923,934

2009 1.040000 0.154860 9,051,070,951

2010 1.040000 0.154860 9,292,978,346

2011 1.040000 0.154860 9,407,610,071

2012 (School year under audit) 1.040000 0.154860 10,236,354,587

1000 TOTALS

Column 10+20+31+32+40 equals column 50

Column 3 - Assessed/Appraised Value for School Tax Purpose: Net appraised value deductions of all exemptions and reductiona allowed

Column 20 - Current Year's Levy: Calculated by multiplying tax rate(s) times applicable Assessed/Appraised Value(S)

Column 31 and 32 - Maintenance Collections and Debt Service Collections: Total collections net of column 40, not including penalties and interest

Column 40 - Entire Year's Adjustments: Adjustments include corrections for errors in taxes assessed and taxes lost to freeze

Column 50 - Ending Balances 8/31/2012: Total agrees with Exhibit A-1, Statement of Net Assets, Code 1220 - Property Taxes Receivable (Delinquent)

100 CAFR for the Year Ending August 31, 2012

EXHIBIT J-1

(10) (20) (31) (32) (40) (50) Beginning Current Entire Ending Balance Year's Maintenance Debt Service Year's Balance 9/1/2011 Total Levy Collections Collections Adjustments 8/31/2012

$ 630,813 $ - $ 21,171 $ 3,841 $ (66,841) $ 538,961

159,615 - 14,334 1,473 (34,597) 109,211

185,521 - 22,660 2,299 (22,172) 138,390

282,267 - 49,718 7,673 954 225,831

352,807 - 73,247 11,594 (39,330) 228,636

360,888 - 105,226 15,169 (15,742) 224,751

812,575 - 310,454 45,470 (55,164) 401,487

1,606,823 - 500,127 77,773 (415,375) 613,549

3,496,565 - 1,469,810 218,486 (777,801) 1,030,467

- 122,310,106 104,340,269 15,536,647 244,408 2,677,599

$ 7,887,875 $ 122,310,106 $ 106,907,017 $ 15,920,424 $ (1,181,659) $ 6,188,881

101 United Independent School District

EXHIBIT J-2 UNITED INDEPENDENT SCHOOL DISTRICT SCHEDULE OF EXPENDITURES FOR COMPUTATIONS OF INDIRECT COST FOR 2013-2014 GENERAL AND SPECIAL REVENUE FUNDS AUGUST 31, 2012 FUNCTION 41 AND RELATED FUNCTION 53 - GENERAL ADMINISTRATION, 99 - APPRAISAL DISTRICT COST 1 2 3 4 5 6 7 (702) (703) (701) (750) (720) (other) Account Account School Tax Supt's Indirect Direct Number Name Board Collections Office Cost Cost Miscellaneous Total

611X-6146 PAYROLL COSTS $ 4,171 $ 398,854 $ 487,706 $ 5,746,056 $ 1,408,124 $ - $ 8,044,910 6149 Leave for Separating ------Employees in Fn 41 & 53 6149 Leave - Separating Employees ------not in 41 & 53 6211 Legal Services 715,024 - - - - - 715,024 6212 Audit Services - - - 35,000 - - 35,000 6213 Tax Appraisal/Collection - - 1,531,524 - - - - 1,531,524 Appraisal in Fn 99 6214 Lobbying ------621X Other Professional Services - - - 59,987 - - 59,987 6220 Tuition and Transfer Payments ------6230 Education Service Centers - - - - 6,300 - 6,300 6240 Contr. Maint. and Repair - - - - 216,543 - 216,543 6250 Utilities ------6260 Rentals - 1,113 6,573 41,470 111,424 - 160,580 6290 Miscellaneous Contr. 10,633 19,010 - 352,847 7,375 - 389,864 6320 Textbooks and Reading - 252 - 2,893 - - 3,145 6330 Testing Materials ------63XX Other Supplies Materials 11,420 4,715 18,231 99,634 153,572 - 287,572 6410 Travel, Subsistence, Stipends 17,880 1,531 5,149 44,261 19,233 - 88,055 6420 Ins. and Bonding Costs ------6430 Election Costs ------6490 Miscellaneous Operating 12,408 3,155 47,204 304,728 333 - 367,829 6500 Debt Service ------6600 Capital Outlay - - - - - 205,440 205,440

6000 TOTAL $ 771,536 $ 1,960,154 $ 564,864 $ 6,686,876 $ 1,922,902 $ 205,440 $ 12,111,772

Total expenditures/expenses for General and Special Revenue Funds: and Enterprise (9) $ 379,236,443 LESS: Deductions of Unallowable Costs FISCAL YEAR Total Capital Outlay (6600) (10) $ 23,280,611 Total Debt & Lease(6500) (11) 2,977,059 Plant Maintenance (Function 51, 6100-6400) (12) 33,059,251 Food (Function 35, 6341 and 6499) (13) 8,477,578 Stipends (6413) (14) 9,020 Column 4 (above) - Total Indirect Cost 6,686,876 SubTotal: 74,490,395 Net Allowed Direct Cost $ 304,746,048 CUMULATIVE Total Cost of Buildings before Depreciation (1520) (15) $ 465,689,834 Historical Cost of Building over 50 years old (16) $ 396,568 Amount of Federal Money in Building Cost (Net of #16) (17) $ - Total Cost of Furniture & Equipment before Depreciation (1530 & 1540) (18) $ 47,307,854 Historical Cost of Furniture & Equipment over 16 years old (19) $ 536,876 Amount of Federal Money in Furniture & Equipment (Net of #19) (20) $ 7,217,127 (8) NOTE A: $1,078,736 in Function 53 expenditures are included in this report on administrative costs. $1,531,524 in Function 99 expenditures for appraisal district costs are included in this report on administrative costs.

102 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT EXHIBIT J-3 FUND BALANCE AND CASH FLOW CALCULATION WORKSHEET GENERAL FUND AS OF AUGUST 31, 2012 UNAUDITED

1 Total General Fund Balance as of 8/31/12 (Exhibit C-1 object 3000 for the $ 90,742,402 General Fund Only)

2 Total Non-Spendable Fund Balance (from Exhibit C-1 - for the General $ 2,533,011 Fund Only)

3 Total Restricted Fund Balance (from Exhibit C-1 - for the General Fund 10,868,204 Only)

4 Total Committed Fund Balance (from Exhibit C-1 - for the General Fund 5,780,000 Only)

5 Total Assigned Fund Balance (from Exhibit C-1 - for the General Fund 2,646,588 Only)

6 Estimated amount needed to cover fall cash flow deficits in the General - Fund (Net of borrowed funds and funds representing deferred revenues.) 7 Estimate of two month's average cash disbursements during the fiscal year. 79,259,316

8 Estimate of delayed payments from state sources (58xx). -

9 Estimate of underpayment from state sources equal to variance between - Legislative Payment Estimate (LPE) and District Planning Estimate (DPE) or District's calculated earned state aid amount.

10 Estimate of delayed payments from federal sources (59xx) -

11 Estimate of expenditures to be reimbursed to General Fund from Capital - Projects Fund (uses of General Fund cash after bond referendum and prior to issuance of bonds)

12 Optimum Fund Balance and Cash Flow (Lines 2+3+4+5+6+7+8+9+10+11) 101,087,119

Excess (Deficit) Unassigned Fund Balance (Line 1 minus Line 12) $ (10,344,717) 13

103 United Independent School District

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104 CAFR for the Year Ending August 31, 2012

Capital Assets Used in the Operation of Governmental Funds

105 United Independent School District

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106 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS (2) INVESTMENT IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY SOURCE AUGUST 31, 2012

2012 2011 Governmental Funds Capital Assets: Land $ 39,497,879 $ 35,625,932 Buildings (3) 465,691,909 442,831,205 Machinery and equipment 47,307,854 45,072,330 Construction in progress 5,986,712 13,268,609 Total governmental funds capital assets $ 558,484,355 $ 536,798,076

Investments in governmental funds capital assets by source: General Fund (1) $ 91,083,414 $ 78,018,326 Special Revenue Fund 17,525,595 16,767,565 Capital Projects Fund 449,875,345 440,220,410 Donations - 1,791,775 Total governmental funds capital assets $ 558,484,355 $ 536,798,076

Notes: (1) Detailed data is not available for prior years. (2) This schedule presents only the capital assets related to governmental funds. Accordingly, the capital assets reported in the enterprise fund (food services) are excluded from the above amounts. (3) Buildings include improvements other than buildings.

107 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

IMPROVEMENTS OTHER THAN MACHINERY & CONSTR. FUNCTION AND ACTIVITY LAND BUILDINGS BUILDINGS EQUIPMENT IN PROGRESS TOTAL

INS TRUCTION-11 United High School $ 981,988 $ 7,855,000 $ 36,709 $ 1,136,561 $ - $ 10,010,258 New United High School 3,790,111 40,021,388 - 365,417 - 44,176,916 United High 9th Grade - 2,013,001 - 109,621 - 2,122,622 United South High School 150,000 18,406,130 34,583 396,694 - 18,987,407 John B Alexander High School 1,068,929 14,354,327 6,234 302,138 - 15,731,627 Alternative Education Program - - - 6,091 - 6,091 JBA Magnet School - 1,718,116 - 19,238 - 1,737,354 United South Magnet School - - - 14,323 - 14,323 United Magnet School - - - 66,510 - 66,510 LBJ High School 1,844,981 16,275,977 772,132 638,811 - 19,531,901 United Middle School 250,000 5,166,477 9,507 274,674 - 5,700,658 United South Middle School 463,584 4,248,992 - 140,538 - 4,853,114 Salvador Garcia Middle School 527,849 4,470,604 - 59,548 - 5,058,001 Washington Middle School 894,343 4,435,861 - 318,013 - 5,648,218 Clark Middle School 150,000 6,441,893 - 201,751 - 6,793,644 Los Obispos Middle School 574,490 4,345,118 - 60,057 - 4,979,665 Trautmann Middle School 1,000,000 4,907,093 - 142,664 - 6,049,757 Antonio Gonzalez Middle School 7,778 - 6,348 151,558 - 165,685 Lamar Bruni Vergara Middle School 1,033,581 9,497,415 334,513 - 10,865,510 Nye Elementary School 175,000 10,778,870 - 44,662 - 10,998,532 Clark Elementary School 150,000 1,879,208 - 23,866 - 2,053,073 Salinas Elementary School 150,000 2,430,409 - 91,063 - 2,671,471 Newman Elementary School 100,000 2,721,047 680 26,259 - 2,847,986 Trautmann Elementary School 400,000 4,167,822 3,336 156,300 - 4,727,458 Perez Elementary School 150,000 3,865,746 16,428 23,866 - 4,056,039 Finley Elementary School 220,000 3,302,692 208,003 - 3,730,695 D D Hachar Elementary School 220,000 3,676,920 43,724 16,555 - 3,957,199 Amparo Gutierrez Elementary School 550,000 2,773,149 39,617 20,341 - 3,383,107 Alicia Ruiz Elementary School 150,000 2,939,952 - 25,906 - 3,115,858 Matias De Llano Jr Elementary School 200,000 1,771,097 - 192,338 - 2,163,435 Kazen Elementary School 320,000 1,624,236 - 16,824 - 1,961,060 Juarez Lincoln Elmentary School 52,862 2,269,827 71,239 17,757 - 2,411,684 Prada Elementary School 142,300 4,218,480 - 29,431 - 4,390,212 Borchers Elementary School 575,867 5,952,772 14,800 257,415 - 6,800,854 Kennedy-Zapata Elementary School 231,480 3,191,944 11,750 35,190 - 3,470,365 Col Santos Benavides School 250,000 10,066,858 - 59,617 - 10,376,475 Roosevelet Elementary School 150,000 5,076,541 15,750 6,619 - 5,248,910 Zaffirini Elementary School 372,202 4,949,943 - 317,187 - 5,639,332 Cuellar Elementary School 444,875 4,687,594 924 15,776 - 5,149,168 Muller Elementary School 404,419 4,669,876 1,274 37,117 - 5,112,686 Arndt Elementary School 447,950 4,965,171 - 38,141 - 5,451,261 R Centeno Elementary School 617,095 7,144,412 - 5,565 - 7,767,072 Bonnie Lopez Garcia Elementary School 506,822 7,113,304 - 226,320 - 7,846,446 Malakoff Elementary School 137,863 7,185,281 - 76,699 - 7,399,844 Fasken Elementary School Elementary 853,277 6,975,040 - 858,464 - 8,686,782 Hachar Property Elementary 192,458 - - - - 192,458 Killam Property 56,704 7,269,956 38,430 34,917 - 7,400,008 Dillworth Property - 4,000 - - - 4,000 Director Of Special Population - - - 13,540 - 13,540 Special Education - - - 2,223,025 - 2,223,025 Career & Technology - - - 18,485 - 18,485 Asst Supt Instruction - - - 101,398 - 101,398

108 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

IMPROVEMENTS OTHER THAN MACHINERY & CONSTR. FUNCTION AND ACTIVITY LAND BUILDINGS BUILDINGS EQUIPMENT IN PROGRESS TOTAL

Federal Programs$ - $ - $ - $ 47,617 $ - $ 47,617 Technology Department - - - 433,031 - 433,031 Music Department - - 22,291 21,900 - 44,191 District Wide Administration 4,145,044 98,678 23,755 1,128,888 - 5,396,365 SUB-TOTAL $ 25,103,855 $ 271,928,219 $ 1,169,511 $ 11,588,801 $ - $ 309,790,386

INSTRUCTIONAL RESOURCES & MEDIA-12 United High School $ - $ 882,275 $ - $ 55,082 $ - $ 937,357 United South High School - 495,065 - 63,687 - 558,752 John B Alexander High School - 541,878 - 25,982 - 567,860 LBJ High School - 647,332 - 54,013 - 701,345 United Middle School - 256,086 - 31,881 - 287,967 United South Middle School - 189,529 - 15,073 - 204,602 Salvador Garcia Middle School - 589,159 - - - 589,159 Washington Middle School - 605,824 - 20,581 - 626,405 Clark Middle School - 748,944 - 12,942 - 761,886 Los Obispos Middle School - 592,553 - 7,558 - 600,111 Trautmann Middle School - 574,890 - 27,528 - 602,418 Antonio Gonzalez Middle School - 761,436 - 54,296 - 815,732 Lamar Bruni Vergada Middle School - - - 7,777 - 7,777 Nye Elementary School - 296,217 - - - 296,217 Clark Elementary School - 68,735 - - - 68,735 Salinas Elementary School - 111,680 - 21,696 - 133,376 Newman Elementary School - 159,041 - - - 159,041 Trautmann Elementary School - 73,422 - 14,506 - 87,927 Perez Elementary School - 255,543 - - - 255,543 Finley Elementary School - 221,256 - - - 221,256 D D Hachar Elementary School - 276,494 - - - 276,494 Amparo Gutierrez Elementary School - 246,746 - - - 246,746 Alicia Ruiz Elementary School - 258,487 - - - 258,487 Matias De Llano Jr Elementary School - 268,101 - - - 268,101 Kazen Elementary School - 228,467 - - - 228,467 Juarez-Lincoln Elementary School - 274,145 - - - 274,145 Prada Elementary School - 255,222 - - - 255,222 Charles Borchers Elementary School 602,812 - 44,160 - 646,972 Kennedy-Zapata Elementary School - 332,050 - - - 332,050 Col Santos Benavides Elem School - 175,651 - 8,718 - 184,369 Roosevelt Elementary School - 309,166 - - - 309,166 Zaffirini Elementary School - 373,811 - 17,555 - 391,366 Cuellar Elementary School - 352,958 - 9,972 - 362,930 Muller Elementary School - 352,826 - 19,573 - 372,399 Arndt Elementary School - 374,977 - 22,383 - 397,360 Bonnie Garcia Elementary School - - - 63,638 - 63,638 R. Centeno Elementary School - - - 10,047 - 10,047 Malakoff Elementary School - - - 34,803 - 34,803 Fasken Elementary School - - - 34,357 - 34,357 Killam Elementary School - - - 18,159 - 18,159 Instructional Television - 769,158 - 8,802 - 777,960 SUB-TOTAL $ - $ 13,521,937 $ - $ 704,768 $ - $ 14,226,706

STAFF DEVELOPMENT-13 Cherish Center $ - $ - $ - $ 19,865 $ - $ 19,865 SUB-TOTAL $ - $ - $ - $ 19,865 $ - $ 19,865

109 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

IMPROVEMENTS OTHER THAN MACHINERY & CONSTR. FUNCTION AND ACTIVITY LAND BUILDINGS BUILDINGS EQUIPMENT IN PROGRESS TOTAL

INSTRUCTIONAL LEADERSHIP-21 Pep Program $ - $ - $ - $ 120,438 $ - $ 120,438 School Support Orange Team - 197,990 - 5,000 - 202,990 Instructional Accountability - - - 64,486 - 64,486 Fine Arts Department - - - 17,276 - 17,276 Technology Department - - - 52,282 - 52,282 Asst Supt Instruction - - - 39,504 - 39,504 State Compensatory Program - - - 18,000 - 18,000 SUB-TOTAL $ - $ 197,990 $ - $ 316,986 $ - $ 514,976

SCHOOL ADMINISTRATION-23 United High School $ - $ 542,938 $ - $ - $ - $ 542,938 United South High School - 660,087 - - - 660,087 John B Alexander High School - 650,254 - - - 650,254 Alternative Education Program - - - 9,962 - 9,962 JBA Magnet School - 149,401 - 47,656 - 197,057 LBJ High School - 863,110 - - - 863,110 United Middle School - 448,151 - - - 448,151 United South Middle School - 236,912 - 10,000 - 246,912 Salvador Garcia Middle School - 412,411 - - - 412,411 Washington Middle School - 424,077 - - - 424,077 Clark Middle School - 299,577 - - - 299,577 Los Obispos Middle School - 414,787 - - - 414,787 Trautmann Middle School - 402,423 - - - 402,423 Antonio Gonzalez Middle School - 380,718 - - - 380,718 Nye Elementary School - 13,133 - - - 13,133 Clark Elementary School - 154,653 - - - 154,653 Salinas Elementary School - 47,863 - - - 47,863 Newman Elementary School - 95,425 - - - 95,425 Trautmann Elementary School - 97,896 - - - 97,896 Perez Elementary School - 127,772 - - - 127,772 Finley Elementary School - 147,504 - - - 147,504 D D Hachar Elementary School - 230,412 - - - 230,412 A. Gutierrez Elementary School - 317,245 - - - 317,245 Alicia Ruiz Elementary School - 295,414 - - - 295,414 De Llano Jr Elementary School - 268,101 - - - 268,101 Kazen Elementary School - 228,467 - - - 228,467 Juarez-Lincoln Elemntary School - 274,145 - - - 274,145 Prada Elementary School - 218,762 - - - 218,762 Charles Borchers Elementary School - 452,109 - - - 452,109 Kennedy-Zapata Elementary School - 332,050 - - - 332,050 Col Santos Elementary School - 245,911 - - - 245,911 Roosevelt Elementary School - 309,166 - - - 309,166 Zaffirini Elementary School - 436,113 - - - 436,113 Cuellar Elementary School - 411,784 - - - 411,784 Muller Elementary School - 411,631 - - - 411,631 Arndt Elementary School - 437,474 - - - 437,474 SUB-TOTAL $ - $ 11,437,875 $ - $ 67,618 $ - $ 11,505,493

HEALTH SERVICES-33 Health Services $ - $ - $ - $ 6,000 $ - $ 6,000 SUB-TOTAL $ - $ - $ - $ 6,000 $ - $ 6,000

110 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

IMPROVEMENTS OTHER THAN MACHINERY & CONSTR. FUNCTION AND ACTIVITY LAND BUILDINGS BUILDINGS EQUIPMENT IN PROGRESS TOTAL

STUDENT TRANSPORTATION-34 Transportation Dept $ - $ 2,227,812 $ 156,948 $ 20,652,819 $ - $ 23,037,580 Energy/Environmental Management - - - 26,885 - 26,885 Special Education Department - - - 1,073,059 - 1,073,059 PEP Program - - - 59,461 - 59,461 SUB-TOTAL $ - $ 2,227,812 $ 156,948 $ 21,812,224 $ - $ 24,196,984

FOOD S ERVICES -35 John B Alexander High School $ - $ - $ - $ 5,825 $ - $ 5,825 Trautmann Middle School - - - 9,047 - 9,047.40 Salinas Elementary School - - - 6,667 - 6,666.51 Kennedy-Zapata Elementary School - 341,275 - - - 341,275.00 Col Santos Elementary School - 281,041 - - - 281,041.00 Roosevelt Elementary School - 340,194 - - - 340,194 Zaffirini Elementary School - 436,113 - - - 436,113 Cuellar Elementary School - 411,784 - - - 411,784 Muller Elemetnary School - 411,631 - - - 411,631 Arndt Elementary School - 437,474 - - - 437,474 Food Service - - - 5,777 - 5,777 SUB-TOTAL $ - $ 2,659,511 $ - $ 27,316 $ - $ 2,686,827

COCURRICULAR/EXTRACURRICULUM-36 United High School $ - $ 1,553,261 $ 196,447 $ 28,894 $ - $ 1,778,603 United South High School - 1,581,797 364,617 - - 1,946,414 John B Alexander High School - 1,618,299 - 12,072 - 1,630,371 LBJ High School - 2,157,774 9,931 - - 2,167,705 United Middle School - 53,640 394,511 6,700 - 454,851 United South Middle School - 331,676 - - - 331,676 Salvador Garcia Middle School - 353,495 13,006 - - 366,501 Washington Middle School - 363,495 - - - 363,495 Clark Middle School - 311,568 - - - 311,568 Los Obispos Middle School - 355,532 - - - 355,532 Trautmann Middle School - 344,934 - - - 344,934 Antonio Gonzalez Middle School - 456,862 - 22,588 - 479,450 After School Program - - - 97,836 - 97,836 Fine Arts Department 1,006,576 12,856,366 76,243 66,059 - 14,005,244 Athletics Department 1,007,030 11,341,915 706,688 109,130 - 13,164,763 SUB-TOTAL $ 2,013,606 $ 33,680,614 $ 1,761,443 $ 343,279 $ - $ 37,798,942

GENERAL ADMINISTRATION-41 Director Of Technology $ - $ - $ - $ 2,606,282 $ - $ 2,606,282 State & Federal Prgorams - - 110,797 13,909 - 124,706 District Wide Administration - 98,001 91,462 453,376 - 642,839 Accounting Department - - 9,470 16,699 - 26,169 Management Records Department - - - 143,315 - 143,315 Human Services Department - 5,990 29,774 423,217 - 458,981 Tax Office Department - - - 150,499 - 150,499 Purchasing Department - - - 16,595 - 16,595 Director Of Communication - - - 120,606 - 120,606 Planning Department - - - 19,821 - 19,821 Printing Department - - - 60,253 - 60,253 Police Department - - - 6,000 - 6,000 Food Service 15,818 - - 169,102 - 184,920 Support Services - - - 164,280 - 164,280

111 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

IMPROVEMENTS OTHER THAN MACHINERY & CONSTR. FUNCTION AND ACTIVITY LAND BUILDINGS BUILDINGS EQUIPMENT IN PROGRESS TOTAL

Fixed Assets Department$ - $ - $ - $ 34,086 $ - $ 34,086 Risk Management - - - 35,694 - 35,694 SUB-TOTAL $ 15,818 $ 103,991 $ 241,502 $ 4,433,735 $ - $ 4,795,046

PLANT MAINTENACE & OPERATION-51 LBJ High School $ - $ 4,000 $ 2,142,167 $ 153,213 $ - $ 2,299,380 New United High School - 14,035,969 1,575,403 105,636 - 15,717,008 United High 9th Grade Campus - - 625,624 - - 625,624 United South High School - 44,051 613,592 18,909 - 676,551 John B Alexander High School - - 1,815,703 58,090 - 1,873,793 Alterntative Education - - 14,317 9,107 - 23,424 United Middle School - - 255,604 6,699 - 262,303 United South Middle School - - 183,621 - - 183,621 Salvador Garcia Middle School - - 104,175 17,390 - 121,565 Washington Middle School - - 62,713 56,803 - 119,516 Clark Middle School - - 12,513 - - 12,513 Los Obispos Middle School - - 28,283 - 10,688 38,970 Trautman Middle School - - 223,485 37,956 - 261,441 Trautman Middle 6th Grade Campus - - 12,989 - - 12,989 Antonio Gonzalez Middle School - 685,292 114,183 - - 799,475 Lamar Bruni Vergara Middle School - 138,929 89,917 17,830 - 246,675 Nye Elementary School - 3,605 224,061 9,500 - 237,166 Clark Elementary School - - 58,714 52,780 - 111,495 Salinas Elementary School - - 108,743 52,500 - 161,243 Newman Elementary School - - 74,110 - - 74,110 Trautman Elementary School - - 39,005 - - 39,005 Perez Elementary School - - 192,188 61,080 - 253,269 Finley Elementary School - - 73,859 58,330 - 132,189 D D Hachar Elementary School - - 35,500 17,025 - 52,525 Amparo Gutierrez Elementary School - 29,204 152,642 8,686 - 190,532 Alicia Ruiz Elementary School - - 46,313 31,880 - 78,193 Matias De Llano Elementary School - - 99,464 - - 99,464 Kazen Elementary School - - 265,468 17,575 - 283,043 Juarez-Lincoln Elementary School - - 212,336 5,025 - 217,361 Prada Elementary School - - 45,231 5,550 - 50,781 Borchers Elementary - - 24,950 - - 24,950 Kennedy-Zapata Elementary School - - 83,682 5,025 - 88,707 Col. Santos Benavides Elemementary - 21,628 27,181 - - 48,808 Rooselvelt Elementary School - - 93,502 - - 93,502 Zaffirini Elementary School - - 66,116 - - 66,116 Muller Elementary School - - 20,915 5,025 - 25,940 Arndt Elementary School - - 54,652 44,000 - 98,652 Garcia Elementary School - - 59,792 180,642 - 240,434 Rodolfo Centeno Elementary School - - 9,400 25,308 - 34,707 Malakoff Elementary School - - 47,146 25,308 - 72,454 Fasken Elementary School - 4,000 59,917 - - 63,917 Killam Elementary School - - 16,098 - - 16,098 Director Of Technology - - 87,864 266,788 - 354,652 Career & Technology/UIL - 15,645 - - - 15,645 Even Start Program - - - 6,150 - 6,150 Fine Arts Department 793 9,403 36,824 - 47,020 Athletics Department - - 680,056 102,496 - 782,552 Accounting Department - - 4,423 - - 4,423

112 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

IMPROVEMENTS OTHER THAN MACHINERY & CONSTR. FUNCTION AND ACTIVITY LAND BUILDINGS BUILDINGS EQUIPMENT IN PROGRESS TOTAL

Instructional Accountability$ - $ - $ 78,415 $ - $ - $ 78,415 Discipline Management - - - 539 - 539 District Wide Administrators - 978,351 1,150,317 181,295 - 2,309,963 Human Resources Department - - 10,978 - - 10,978 Health Services - - 7,315 - - 7,315 Food Service Department - 3,448 14,397 - - 17,845 Central Receiving Department - 9,679 17,694 450,125 - 477,498 Transportation Department - - 189,418 - - 189,418 Police Department - - 67,440 (19,000) - 48,440 Energy/Environment Management - - 24,480 112,201 - 136,681 Construction Management - - - 8,114 - 8,114 Facilities Department - - 195,673 3,735,111 - 3,930,784 Janitorial Department - - - 5,900 - 5,900 SUB-TOTAL $ - $ 15,974,593 $ 12,603,144 $ 5,973,414 $ 10,688 $ 34,561,838

SECURITY AND MONITORING AT SCHOOLS-52 United High School $ - $ - $ 63,508 $ 109,167 $ - $ 172,675 United South High School - - 65,469 - - 65,469 John B Alexander High School - - 64,869 - - 64,869 Alternative Education Program - - 48,268 - - 48,268 LBJ High School - - 67,069 - - 67,069 Cherish Center - - - 12,300 - 12,300 Districtwide Administrators - - 72,920 - - 72,920 Police Department - - 16,849 981,764 - 998,613 SUB-TOTAL $ - $ - $ 398,952 $ 1,103,231 $ - $ 1,502,183

DATA PROCESSING SERVICES-53 Director Of Technology $ - $ 120,242 $ - $ 322,122 $ - $ 442,364 United South High School - - - 108,627 - 108,627 United South Middle School - - - 53,544 - 53,544 Salvador Garcia Middle School - - - 53,544 - 53,544 Washington Middle School - - - 53,544 - 53,544 Los Obispos Middle School - - - 52,908 - 52,908 Gonzalez Middle School - - - 66,327 - 66,327 Lamar Bruni Vergara Middle School - - - 66,327 - 66,327 Clark Elementary School - - - 38,524 - 38,524 Salinas Elementary School - - - 38,524 - 38,524 Perez Elementary School - - - 38,524 - 38,524 Kennedy-Zapata Elementary School - - - 38,524 - 38,524 Roosevelt Elementary School - - - 38,524 - 38,524 Sen. Zaffirini Elementary School - - - 23,169 - 23,169 Muller Elementary School - - - 5,557 - 5,557 District Wide Administrators - - - 31,809 - 31,809 SUB-TOTAL $ - $ 120,242 $ - $ 1,030,094 $ - $ 1,150,336

FACILITIES & ACQUIS ITIONS -81 United High School $ 40,113 $ 1,635,946 $ 2,294,733 $ 57,864 $ - $ 4,028,656 United 9th Campus - - 64,059 - - 64,059 United South High School - 9,500 2,152,583 63,950 1,677,854 3,903,887 John B Alexander High School - 3,700 1,991,193 13,800 2,159,808 4,168,501 Alternative Education Progr - - 33,780 428,365 - 462,145 LBJ High School - - 1,004,440 27,021 1,771,925 2,803,386 United Middle School - (270) 2,356,465 111,179 - 2,467,374

113 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

IMP ROVEMENTS OTHER THAN MACHINERY & CONSTR. FUNCTION AND ACTIVITY LAND BUILDINGS BUILDINGS EQUIPMENT IN PROGRESS TOTAL

United South Middle School$ - $ 5,000 $ 543,472 $ - $ - $ 548,472 Salvador Garcia Middle School - - 318,480 5,990 - 324,470 Washington Middle School - 55,954 57,549 - - 113,503 Clark Middle School - - 130,434 7,623 - 138,057 Los Obispos Middle School - - 239,915 - - 239,915 Trautmann Middle School - - 62,385 - - 62,385 Antonio Gonzalez Middle School - - 3,550 2,848 - 6,398 Nye Elementary School - - 374,222 14,100 - 388,322 Clark Elementary School - - 113,463 23,280 - 136,743 Salinas Elementary School - - 161,719 - - 161,719 Newman Elementary School - 397,928 369,378 30,800 - 798,106 Trautmann Elementary School - 611,531 913,199 51,778 - 1,576,508 Perez Elementary School - 5,834 183,275 22,786 - 211,895 Finley Elementary School - - 132,854 - - 132,854 D D Hachar Elementary School - - 535,664 - - 535,664 Amparo Gutierrez Elementary - - 173,135 - - 173,135 Alicia Ruiz Elementary School - - 409,718 - - 409,718 Matias De Llano Jr Elementary School - - 335,400 114,585 - 449,985 Kazen Elementary School - - 280,036 8,686 - 288,722 Juarez Elementary School - - 1,475,603 - - 1,475,603 Prada Elementary School - - 193,924 - - 193,924 Borchers Elementary School - 527,461 12,631 225,200 - 765,292 Kennedy-Zapata Elementary School - - 296,150 14,100 - 310,250 Col Santos Benavides School - - 1,380,568 - - 1,380,568 Roosevelt Elementary School - - 211,026 - - 211,026 Zaffirrini Elementary School - - 22,000 - - 22,000 Muller Elementary School - 28,110 99,183 - - 127,293 Arndt Elementary School - - 18,312 44,600 - 62,912 Bonnie Garcia Elementary School - - 101,968 - - 101,968 Rodolfo Centeno Elementary School - - - 12,000 - 12,000 Fasken Elementary School - - 2,708 - - 2,708 Assistant Super for Inst & Curr - - 542,310 - - 542,310 Pep Program - - - 61,836 - 61,836 Silver Team Education - 35,514 21,700 - - 57,214 Instructional Television - 234,214 - - - 234,214 Cherish Center - 3,838,556 - - - 3,838,556 Director Of Technology - - - 207,280 - 207,280 Fine Arts Department - - 2,352 - - 2,352 Athletics Department - 609,536 1,742,902 32,257 158,556 2,543,250 Human Resources Department - 187,683 - - - 187,683 District Wide Administration 9,955,682 40,289,344 21,983,321 (1,844,254) - 70,384,093 Printing Department - 112,000 - - - 112,000 Shipping/Receiving Department - 9,679 - - - 9,679 Facilities Department 400,000 - - - - 400,000 Transportation Department - - 208,715 21,063 207,881 437,659 Superintendent 1,968,805 - - - - 1,968,805 Police Department - - 29,884 23,183 - 53,067 Internal Audit - - - 23,182 - 23,182 SPI Default - - - 37,045 - 37,045 Risk Management - - - 38,376 - 38,376 SUB-TOTAL $ 12,364,600 $ 48,597,219 $ 43,580,354 $ (119,477) $ 5,976,024 $ 110,398,721

GRAND TOTAL $ 39,497,879 $ 400,450,003 $ 59,911,854 $ 47,307,854 $ 5,986,712 $ 553,154,302

114 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

INS TRUCTION Assets in Service (1) United High School$ 9,419,725 $ - $ - $ 9,419,725 New United High School 44,759,132 130,770 5,934 44,883,968 United 9th Grade Campus 2,013,001 109,621 - 2,122,622 United South High School 18,973,917 26,897 - 19,000,814 John B Alexander High School 15,706,792 18,534 - 15,725,326 Alternative Education Program 6,091 - - 6,091 Magnet School For Health/Science 1,737,354 - - 1,737,354 Magnet School For Business 14,323 - - 14,323 Magnet School For Engineering 66,510 - - 66,510 Lyndon B Johnson High School 19,470,581 61,320 - 19,531,901 United Middle School 5,640,177 60,481 - 5,700,658 United South Middle School 4,792,534 54,624 - 4,847,158 Salvador Garcia Middle School 5,058,002 - - 5,058,002 Washington Middle School 5,539,344 108,874 - 5,648,218 Clark Middle School 6,767,184 26,460 - 6,793,644 Los Obispos Middle School 4,979,665 - - 4,979,665 Trautmann Middle School 6,022,352 27,405 - 6,049,757 Gonzalez Middle School 5,455,672 40,064 - 5,495,736 Lamar Bruni Vergara Middle School 10,857,286 24,570 - 10,881,856 Nye Elementary 11,005,150 - - 11,005,150 Clark Elementary 2,053,073 - - 2,053,073 Salinas Elementary 2,671,471 - - 2,671,471 Newman Elementary 2,847,986 - - 2,847,986 Trautmann Elementary 4,721,338 - - 4,721,338 Perez Elementary 4,056,040 - - 4,056,040 Finley Elementary 3,730,695 - - 3,730,695 United D D Hachar Elementary 3,937,327 - - 3,937,327 Gutierrez Elementary 3,383,107 - - 3,383,107 Ruiz Elementary 3,115,858 - - 3,115,858 Matias De Llano Jr Elementary 2,163,435 - - 2,163,435 Kazen Elementary 1,961,060 - - 1,961,060 Juarez-Lincoln Elementary 2,346,745 64,939 - 2,411,684 Prada Elementary 4,390,212 - - 4,390,212 Borchers Elementary 6,800,854 - - 6,800,854 Kennedy-Zapata Elementary 3,470,365 - - 3,470,365 Colonel Santos Benavides 10,376,475 - - 10,376,475 F D Roosevelt Elementary 5,248,910 - - 5,248,910 Judith Zaffirini Elementary 5,639,332 - - 5,639,332 Henry Cuellar Elementary 5,149,168 - - 5,149,168 Muller Elementary 5,112,686 - - 5,112,686

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

115 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

John W Arndt Elementary $ 5,451,261 $ - $ - $ 5,451,261 Bonnie Garcia Elementary 7,846,446 - - 7,846,446 Centeno Elementary 5,565 - - 5,565 Malakoff Elementary 7,399,844 - - 7,399,844 Fasken Elementary 8,661,782 - - 8,661,782 Killam Elementary School 7,423,338 - - 7,423,338 Career & Technology 7,985 10,500 - 18,485 Director Of Technology 423,067 - 21,238 401,829 Special Education 2,173,885 49,140 - 2,223,025 Guidance/Testing 13,540 - - 13,540 Federal Programs 7,161 40,456 - 47,617 Asst Supt Instruction 101,398 - - 101,398 Music Department 44,191 - - 44,191 District Wide Administrators 4,957,546 69,931 - 5,027,477 SPI Default 196,458 - - 196,458 Centeno Elementary 6,380,808 - - 6,380,808 SUB-TOTAL $ 312,555,204 $ 924,586 $ 27,172 $ 313,452,618

INSTRUCTIONAL RESOURCE & MEDIA United High School $ 937,357 $ - $ - $ 937,357 United South High School 558,752 - - 558,752 John B Alexander High School 567,860 - - 567,860 LBJ High School 716,639 - 8,444 708,195 United Middle School 287,967 - - 287,967 United South Middle School 204,602 - - 204,602 Salvador Garcia Middle School 589,159 - - 589,159 Washington Middle School 626,405 - - 626,405 Clark Middle School 761,886 - - 761,886 Los Obispos Middle School 592,553 7,558 - 600,111 Trautmann Middle School 602,418 - - 602,418 Antonio Gonzalez Middle School 815,732 - - 815,732 Lamar Bruni Vergada Middle School 7,777 - - 7,777 Nye Elementary School 296,217 - - 296,217 Clark Elementary School 68,735 - - 68,735 Salinas Elementary School 133,376 - - 133,376 Newman Elementary School 159,041 - - 159,041 Trautmann Elementary School 87,928 - - 87,928 Perez Elementary School 255,543 - - 255,543 Finley Elementary School 221,256 - - 221,256 D D Hachar Elementary School 276,494 - - 276,494 A. Gutierrez Elementary School 246,746 - - 246,746 Alicia Ruiz Elementary School 258,487 - - 258,487

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

116 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

De Llano Jr Elementary School $ 268,101 $ - $ - $ 268,101 Kazen Elementary School 228,467 - - 228,467 Juarez-Lincoln Elem. School 274,145 - - 274,145 Prada Elementary School 255,222 - - 255,222 Charles Borchers Elementary School 646,972 - - 646,972 Kennedy-Zapata Elem. School 332,050 - - 332,050 Benavides Elementary School 184,369 - - 184,369 Roosevelt Elementary School 309,166 - - 309,166 Zaffirini Elementary School 391,366 - - 391,366 Cuellar Elementary School 362,930 - - 362,930 Muller Elementary School 372,399 - - 372,399 Arndt Elementary School 397,360 - - 397,360 Garcia Elementary School 63,638 - - 63,638 Centeno Elementary School 22,200 - - 22,200 Malakoff Elementary School 22,650 - - 22,650 Fasken Elementary School 34,357 - - 34,357 Killam Elementary School 18,159 - - 18,159 Instructional Television 793,981 8,802 - 802,783 SUB-TOTAL $ 14,250,462 $ 16,360 $ 8,444 $ 14,258,378

STAFF DEVELOPMENT Cherish Center $ - $ 19,865 $ - $ 19,865 SUB-TOTAL $ - $ 19,865 $ - $ 19,865

INSTRUCTIONAL LEADERSHIP Curriculum Department $ 12,146 $ - $ - $ 12,146 Information Technology 52,282 - - 52,282 Pep Program 120,438 - - 120,438 Fine Arts 17,276 - - 17,276 School Support Orange Team 202,990 - - 202,990 Federal Programs 47,711 - 18,000 29,711 State Compensatory Program 36,000 - - 36,000 Instructional Television 5,295 - - 5,295 Instructional Accountability 52,340 - - 52,340 Asst Supt Instruction 39,504 - - 39,504 SUB-TOTAL $ 585,982 $ - $ 18,000 $ 567,982

SCHOOL ADMINISTRATION United High School $ 542,938 $ - $ - $ 542,938 United South High School 660,087 - - 660,087 John B Alexander High School 650,254 - - 650,254 Alternative Education Program 9,962 - - 9,962 JBA Magnet School 197,057 - - 197,057

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

117 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

LBJ High School $ 863,110 $ - $ - $ 863,110 United Middle School 448,151 - - 448,151 United South Middle School 236,912 10,000 - 246,912 Salvador Garcia Middle School 412,411 - - 412,411 Washington Middle School 424,077 - - 424,077 Clark Middle School 299,577 - - 299,577 Los Obispos Middle School 414,787 - - 414,787 Trautmann Middle School 402,423 - - 402,423 Antonio Gonzalez Middle School 380,718 - - 380,718 Nye Elementary School 13,133 - - 13,133 Clark Elementary School 154,653 - - 154,653 Salinas Elementary School 47,863 - - 47,863 Newman Elementary School 95,425 - - 95,425 Trautmann Elementary School 97,896 - - 97,896 Perez Elementary School 127,772 - - 127,772 Finley Elementary School 147,504 - - 147,504 D D Hachar Elementary School 230,412 - - 230,412 Amparo Gutierrez Elementary School 317,245 - - 317,245 Alicia Ruiz Elementary School 295,414 - - 295,414 Matias De Llano Elementary School 268,101 - - 268,101 Kazen Elementary School 228,467 - - 228,467 Juarez-Lincoln Elementary School 274,145 - - 274,145 Prada Elementary School 218,762 - - 218,762 Charles Borchers Elementary School 452,109 - - 452,109 Kennedy-Zapata Elementary School 332,050 - - 332,050 Col Santos Benavides School 245,911 - - 245,911 Roosevelt Elementary School 309,166 - - 309,166 Zaffirini Elementary School 436,113 - - 436,113 Cuellar Elementary School 411,784 - - 411,784 Muller Elementary School 411,631 - - 411,631 Arndt Elementary School 437,474 - - 437,474 SUB-TOTAL $ 11,495,494 $ 10,000 $ - $ 11,505,494

HEALTH SERVICES Health Services $ 6,000 $ - $ - $ 6,000 SUB-TOTAL $ 6,000 $ - $ - $ 6,000

STUDENT TRANSPORTATION Transportation Department $ 22,128,395 $ 1,415,346 $ 520,378 $ 23,023,363 Special Education 953,822 - - 953,822 Pep Program 55,379 - - 55,379 SUB-TOTAL $ 23,137,596 $ 1,415,346 $ 520,378 $ 24,032,564

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

118 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

FOOD SERVICES John B Alexander High School $ 5,825 $ - $ - $ 5,825 Kennedy-Zapata Elementary School 341,275 - - 341,275 Col Santos Elementary School 281,041 - - 281,041 Roosevelt Elementary School 340,194 - - 340,194 Zaffirini Elementary School 436,113 - - 436,113 Cuellar Elementary School 411,784 - - 411,784 Muller Elemetnary School 411,631 - - 411,631 Arndt Elementary School 437,474 - - 437,474 SUB-TOTAL $ 2,665,337 $ - $ - $ 2,665,337

COCURRICULAR/EXTRACURRICULAR United High School $ 1,786,951 $ - $ - $ 1,786,951 United South High School 1,946,414 - - 1,946,414 John B Alexander High School 1,623,671 6,700 - 1,630,371 LBJ High School 2,167,705 - - 2,167,705 United Middle School 454,851 - - 454,851 United South Middle School 331,676 - - 331,676 Salvador Garcia Middle School 366,501 - - 366,501 Washington Middle School 363,495 - - 363,495 Clark Middle School 311,568 - - 311,568 Los Obispos Middle School 355,532 - - 355,532 Trautmann Middle School 344,934 - - 344,934 Antonio Gonzalez Middle School 479,450 - - 479,450 After School Program 103,396 - - 103,396 Music Department 13,980,477 - - 13,980,477 Athletics Department 13,197,183 - - 13,197,183 SUB-TOTAL $ 37,813,804 $ 6,700 $ - $ 37,820,504

GENERAL ADMINISTRATION Federal Programs $ 110,797 $ - $ - $ 110,797 Technology 2,551,051 47,573 - 2,598,624 Accounting 18,205 7,964 - 26,169 Planning Department 19,821 - - 19,821 District Wide Administrators 300,023 - - 300,023 Records Management 46,682 7,291 - 53,973 Human Resources 430,799 28,181 - 458,980 Tax Office 248,016 - 8,174 239,842 Purchasing 16,595 - - 16,595 Communication 98,616 21,990 - 120,606 Printing Department 65,321 - - 65,321 Food Service 184,920 - - 184,920 Fixed Assets Department 34,086 - - 34,086 Support Services 139,691 19,520 - 159,211 Risk Management 36,497 15,441 - 51,938 SUB-TOTAL $ 4,301,120 $ 147,961 $ 8,174 $ 4,440,907

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

119 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

PLANT MAINTENANCE & OPERATIONS United High School $ 15,529,742 $ 102,691 $ - $ 15,632,433 United 9th Grade Campus 623,983 5,468 - 629,451 United South High School 456,296 264,395 - 720,691 John B Alexandher High School 2,048,957 87,252 - 2,136,209 Alternative Education School 23,424 - - 23,424 LBJ High School 1,981,462 34,898 - 2,016,360 United Middle School 437,502 64,875 - 502,377 United South Middle School 184,695 - - 184,695 Salvador Garcia Middle School 92,935 28,630 - 121,565 Clark Middle School 12,513 - - 12,513 Washington Middle School 111,385 8,131 - 119,516 Los Obispos Middle School 28,283 - - 28,283 Trautmann Middle School 194,539 66,902 - 261,441 Trautmann 6th Grade Campus 12,989 - - 12,989 Gonzalez Middle School 744,440 - - 744,440 Lamar Bruni Vergara Middle School 301,711 - - 301,711 Nye Elementary School 172,241 74,600 - 246,841 Clark Elementary School 111,494 - - 111,494 Salinas Elementary School 161,243 - - 161,243 Newman Elementary School 74,109 - - 74,109 Trautmann Elementary School 17,234 27,891 - 45,125 Perez Elementary School 250,695 - - 250,695 Finley Elementary School 132,189 - - 132,189 D D Hachar Elementary School 40,525 - - 40,525 Amparo Gutierrez Elementary School 156,720 4,609 - 161,329 Alicia Ruiz Elementary School 78,193 - - 78,193 Matias De Llano Jr Elementary School 108,864 - - 108,864 Kazen Elementary School 295,529 2,751 - 298,280 Juarez-Lincoln Elementary School 217,360 - - 217,360 Prada Elementary School 50,781 - - 50,781 Borchers Elementary School 24,950 - - 24,950 Kennedy-Zapata Elementary School 88,707 - - 88,707 Col Santos Benavides Elementary School 45,952 - - 45,952 Roosevelt Elementary School 93,502 - - 93,502 Zaffirini Elementary School 66,116 - - 66,116 Muller Elementary School 25,940 - - 25,940 Ardnt Elementary School 98,652 - - 98,652 Bonnie Garcia Elementary 249,833 - - 249,833 Rodolfo Centeno Elementary 44,108 - - 44,108 Malakoff Elementary School 148,588 - - 148,588 Fasken Elementary School 140,666 9,964 - 150,630 Killam Elementary School 20,098 - - 20,098 Instructional Accountability 78,415 - - 78,415

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

120 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

Discipline Management $ 539 $ - $ - $ 539 Even Start Program 6,150 - - 6,150 Cherish Center 21,705 - - 21,705 Career & Techonology 15,645 - - 15,645 Director Of Technology 382,717 19,272 - 401,989 Food Service Dept 14,397 - - 14,397 Central Receiving Department 337,914 125,254 20,250 442,918 Fine Arts Department 17,945 - - 17,945 Athletics Department 516,725 136,584 - 653,309 District Wide Administrators 1,975,200 459,383 - 2,434,583 Human Services Department 10,978 - - 10,978 Police Department 119,880 - 19,000 100,880 Transportation Dept 189,419 - - 189,419 Energy/Environment Management 51,175 8,802 - 59,977 Construction Management 8,114 - - 8,114 Facilities Department 3,088,562 135,533 26,000 3,198,095 Janitorial Department 47,520 - - 47,520 SUB-TOTAL $ 32,582,145 $ 1,667,884 $ 65,250 $ 34,184,779

SECURITY AND MONITORING SERVICES United High School $ 172,675 $ - $ - $ 172,675 United South High School 65,469 - - 65,469 John B Alexander High School 64,869 - - 64,869 LBJ High School 67,069 - - 67,069 Alternative Edcuation Program 48,267 - - 48,267 District Wide Administrators 72,920 - - 72,920 Cherish Center 12,300 - - 12,300 Police Department 1,001,379 169,661 67,562 1,103,478 SUB-TOTAL $ 1,504,948 $ 169,661 $ 67,562 $ 1,607,047

DATA PROCESSING SERVICES Director Of Technology $ 405,939 $ 34,925 $ - $ 440,864 United South High School 108,628 - - 108,628 United South Middle School 53,544 - - 53,544 Salvador Garcia Middle School 53,544 - - 53,544 Washington Middle School 53,544 - - 53,544 Los Obispos Middle School 52,908 - - 52,908 Gonzalez Middle School 66,327 - - 66,327 Lamar Bruni Middle School 66,327 - - 66,327 Clark Elementary School 38,524 - - 38,524 Salinas Elementary School 38,524 - - 38,524 Perez Elementary School 38,524 - - 38,524

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

121 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

Kennedy-Zapata Elementary School $ 38,524 $ - $ - $ 38,524 Roosevelt Elementary School 38,524 - - 38,524 Sen Zaffirini Elementary School 23,168 - - 23,168 Muller Elementary School 5,557 - - 5,557 District Wide Administrators 31,448 - - 31,448 SUB-TOTAL $ 1,113,554 $ 34,925 $ - $ 1,148,479

FACILITIES ACQUISITION & CONSTRUCTION United High School $ 2,490,962 $ 20,369 $ - $ 2,511,331 United 9th Grade Campus 66,125 - - 66,125 United South High School 1,482,448 780,403 - 2,262,851 John B Alexander High School 2,117,487 - - 2,117,487 Alternative Education Program 462,145 - - 462,145 LBJ High School 1,977,123 781,318 - 2,758,441 United Middle School 380,778 2,158,721 - 2,539,499 United South Middle School 516,432 31,436 - 547,868 Salvador Garcia Middle School 336,802 674 - 337,476 Washington Middle School 57,234 315 - 57,549 Clark Middle School 205,653 - - 205,653 Los Obispos Middle School 337,100 315 - 337,415 Trautmann Middle School - 62,385 - 62,385 Antonio Gonzalez Middle School 688,140 3,550 - 691,690 Nye Elementary School 393,755 4,152 - 397,907 Clark Elementary School 97,134 91,775 - 188,909 Salinas Elementary School 285,625 27,985 - 313,610 Newman Elementary School 458,204 117,365 - 575,569 Trautmann Elementary School 1,038,785 119,838 - 1,158,623 Perez Elementary School 176,076 43,304 - 219,380 Finley Elementary School 125,696 12,206 - 137,902 D D Hachar Elementary School 508,588 31,183 - 539,771 A.Gutierrez Elementary School 172,801 334 - 173,135 Alicia Ruiz Elementary School 300,417 109,301 - 409,718 Matias De Llano Elementary School 347,344 - - 347,344 Kazen Elementary School 288,721 80,840 - 369,561 Juarez-Lincoln Elementary School 293,953 1,180,802 - 1,474,755 Prada Elementary School 201,785 - - 201,785 Charles R Borchers Elementary School 1,305,384 - - 1,305,384 Kennedy-Zapata Elementary School 318,025 - - 318,025 Col Santos Benavides Elementary School 1,401,215 17,781 - 1,418,996 Roosevelt Elementary School 28,381 195,276 - 223,657 Zaffirini Elementary School 63,296 - - 63,296 Cuellar Elementary School 924 - - 924 Muller Elementary School 99,183 - - 99,183 Arndt Elementary School 62,913 - - 62,913

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

122 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES IN GENERAL CAPITAL ASSETS FOR THE FISCAL YEAR ENDED AUGUST 31, 2012

BALANCE AT BALANCE AT LOCATION AND ACTIVITY 08/31/11 ADDITIONS DELETIONS 08/31/12

Bonnie Garcia Elementary School $ 116,616 $ - $ - $ 116,616 Centeno Elementary School 12,000 - - 12,000 Malakoff Elementary School 23,980 - - 23,980 Fasken Elementary School - 2,441 - 2,441 Killam Elementary School 5,302 - - 5,302 Instructional Television 222,270 11,944 - 234,214 Pep Program 61,836 - - 61,836 Director Of Technology 424,016 - 18,000 406,016 Health Services 7,315 - - 7,315 Fine Arts Dept. 2,352 - - 2,352 Athletics Department 821,155 1,777,477 - 2,598,632 District Wide Administration 55,054,141 3,838,463 (13,223,179) 72,115,782 Human Resources Department 208,608 - - 208,608 Printing Department 112,000 - - 112,000 Transportation Department 1,325,165 20,430 - 1,345,595 Police Department 36,484 - - 36,484 Internal Audit 23,183 - - 23,183 Risk Management 23,182 - - 23,182 SPI Default 36,930 - - 36,930 Associate Super for Inst & Curr - 542,310 - 542,310 Cherish Center 3,816,851 - - 3,816,851 Facilities Department 97,800 - - 97,800 SUB-TOTAL $ 81,517,820 $ 12,064,689 $ (13,205,179) $ 106,787,688

CONSTRUCTION IN PROGRESS $ 13,268,610 $ 5,986,712 $ 13,268,610 $ 5,986,712

GRAND TOTAL $ 536,798,076 $ 22,464,690 $ 778,411 $ 558,484,354

Note: (1) Detailed data for prior years is unavailable for furniture and equipment.

123 United Independent School District

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124 CAFR for the Year Ending August 31, 2012

Statistical Section

125 United Independent School District

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126 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT STATISTICAL SECTION AUGUST 31, 2012

This part of the United Independent School District’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, and note disclosures says about the District’s overall financial health.

Contents Page

Financial Trends 128 These schedules contain trend information to help the reader understand how the District’s financial performance and well-being have changed over time.

Revenue Capacity 140 These schedules contain information to help the reader assess the District’s most significant local revenue sources.

Debt Capacity 148 These schedules present information to help the reader asses the affordability of the District’s current levels of outstanding debt and the District’s ability to issue additional debt in the future.

Demographic and Economic Information 153 These schedules offer demographic and economic indicators to help the reader understand the environment within which the District’s financial activities take place.

Operating Information 155 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.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. Beginning in fiscal year 2002, the District implemented GASB Statement 34 which includes schedules presenting government-wide information.

127 United Independent School District

SCHEDULE 1 UNITED INDEPENDENT SCHOOL DISTRICT NET ASSETS BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting)

Fiscal Year 2003 2004 2005 2006

Governmental Activities Invested in capital assets, net of related costs$ 9,047,368 $ 8,647,114 $ 7,272,164 $ 13,557,516 Restricted 9,775,087 13,937,875 12,405,933 10,866,271 Unrestricted 24,833,467 27,102,491 29,016,661 37,335,166

Total Governmental activities net assets 43,655,922 49,687,480 48,694,758 61,758,953

Business-type activities Invested in capital assets, net of related debt 600,272 1,958,688 288,547 585,749 Restricted - - - - Unrestricted 1,358,416 366,659 3,156,961 2,838,779

Total business-type activities net assets 1,958,688 2,325,347 3,445,508 3,424,528

Primary government Invested in capital assets, net of related debt 9,647,640 10,605,802 7,560,711 14,143,265 Restricted 9,775,087 13,937,875 12,405,933 10,866,271 Unrestricted 26,191,883 27,469,150 32,173,622 40,173,945

Total primary government net assets$ 45,614,610 $ 52,012,827 $ 52,140,266 $ 65,183,481

Source: United ISD Division of Business and Finance

128 CAFR for the Year Ending August 31, 2012

2007 2008 2009 2010 2011 2012

$ 19,278,711 $ 34,610,802 $ 44,995,965 $ 48,563,870 $ 53,135,091 $ 62,209,193 62,145,261 37,718,951 35,223,463 44,669,644 30,073,798 29,547,818 5,108,199 38,565,875 47,184,087 39,426,848 79,246,633 74,169,186

86,532,171 110,895,628 127,403,515 132,660,362 162,455,522 165,926,197

609,220 515,936 540,643 423,340 362,526 296,936 ------2,253,812 1,775,621 1,597,839 2,570,530 3,491,497 3,323,595

2,863,032 2,291,557 2,138,482 2,993,871 3,854,022 3,620,531

19,887,931 35,126,738 45,536,608 48,987,211 53,497,617 62,506,129 62,145,261 37,718,951 35,223,463 44,669,644 30,073,798 29,547,818 7,362,011 40,341,496 48,781,926 41,997,378 82,738,130 77,492,781

$ 89,395,203 $ 113,187,185 $ 129,541,997 $ 135,654,233 $ 166,309,544 $ 169,546,728

129 United Independent School District

SCHEDULE 2 UNITED INDEPENDENT SCHOOL DISTRICT CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (accrual basis of accounting) Fiscal Year Expenses 2003 2004 2005 Governmental Activities: 11 Instruction $ 123,160,948 $ 129,132,416 $ 147,801,038

12 Instructional Resources & Media Services 3,089,255 3,198,111 3,907,691 13 Curriculum & Instructional Staff Dev. 919,696 1,421,358 1,171,298 21 Instructional Leadership 4,085,646 3,417,415 3,762,930 23 School Leadership 13,422,248 14,743,488 15,335,768 31 Guidance, Counseling, & Eval. of Ser. 6,772,810 7,550,075 9,105,516 32 Social Work Services 535,943 627,437 819,298

33 Health Services 1,945,666 2,017,008 2,289,854

34 Student (Pupil) Transportation 6,266,821 7,018,878 9,239,058 35 Food Services 1,700,381 1,058,784 1,258,117 36 Cocurricuar/Extracurriuclar Activities 4,184,226 5,692,640 5,796,166 41 General Administration 7,873,577 8,516,321 8,947,100 51 Plant Maintenance & Operations 20,359,032 21,236,818 23,629,784 52 Security and Monitoring Services 2,319,032 2,923,656 3,465,452

53 Data Processing Services 1,880,317 3,395,417 2,782,634 61 Community Services 236,451 240,022 292,298 72 Debt Servcie - Interest on Long Term Debt 10,400,948 9,372,317 18,011,545 73 Debt Servcie - Bond Iss. Cost & Fees 41,718 61,546 67,640 95 Juvenile Justice Alt. Education Program 110,861 179,242 161,365 99 Other Intergovernmental Charges - - -

Total governmental activities expenses 209,305,576 221,802,949 257,844,552

Business-type activities: 35 Enter. Fund - Nat'l School Breakfast & Lunch 12,208,751 11,960,118 13,981,944 Total business-type activities expenses 12,208,751 11,960,118 13,981,944

Total primary government expenses $ 221,514,327 $ 233,763,067 $ 271,826,496 Program Revenues Governmental Activities: Charges for services: Instruction$ 5,256 $ 11,423 $ 10,827

Instructional Leadership - - -

School Leadership 798,658 - - Food Services 4,266 - - Cocurricuar/Extracurriuclar Activities 830,815 952,156 1,025,022 Plant Maintenance & Operations 9,972 20,296 25,219 Facilities Acquisition and Construction 104,772 - - Operating grants and contributions 32,018,365 32,818,297 37,824,238

Total governmental activities program revenues 33,772,104 33,802,172 38,885,306 Business-type activities: Charges for services: Enter. Fund - National School Breakfast & Lunch 2,059,544 2,116,801 2,293,896 Operating grants and contributions 9,914,562 10,209,976 12,747,278 Total business-type activities revenues 11,974,106 12,326,777 15,041,174

Total primary government revenues $ 45,746,210 $ 46,128,949 $ 53,926,480

Net (expense)/revenue Governmental activities $ (175,533,472) $ (188,000,777) $ (218,959,246) Business-type activities (234,645) 366,659 1,059,230 Total primary government net expenses $ (175,768,117) $ (187,634,118) $ (217,900,016)

Source: United ISD Division of Business and Finance

130 CAFR for the Year Ending August 31, 2012

2006 2007 2008 2009 2010 2011 2012

$ 156,230,574 $ 164,818,404 $ 186,463,334 $ 198,228,414 $ 219,261,873 $ 211,042,761 $ 207,813,530 4,154,361 4,581,209 5,041,817 6,518,811 5,908,288 7,224,018 5,897,778 1,799,287 1,895,692 1,496,836 1,680,531 1,916,130 1,530,017 3,498,443 5,807,373 6,466,252 7,048,701 7,747,936 7,702,645 8,066,447 5,919,283 15,955,177 17,593,383 19,069,112 20,136,883 20,779,259 23,836,381 24,181,092 10,085,248 11,014,722 12,244,544 12,875,394 13,415,106 13,434,198 13,297,348 1,312,078 1,503,979 1,656,268 1,857,542 1,905,268 2,018,124 2,165,119 2,639,928 2,916,545 3,219,740 3,535,339 3,935,196 3,870,111 3,911,794 8,964,689 10,000,179 12,854,838 14,216,161 14,285,001 15,465,438 14,774,076 1,439,140 1,212,335 1,373,363 1,126,275 1,376,096 1,052,070 1,270,044 6,924,798 8,048,297 9,012,854 9,753,962 9,546,023 10,021,031 9,694,125 9,863,723 10,977,950 10,136,554 10,788,539 10,443,307 9,917,718 9,893,904 24,868,633 29,741,462 32,429,720 35,397,103 36,116,469 35,292,525 34,439,394 3,865,773 5,377,009 6,407,414 6,532,984 6,479,502 6,479,893 6,507,415 3,118,557 3,320,504 3,848,203 3,805,495 2,616,363 2,822,259 2,494,197 489,497 821,110 756,417 693,390 632,578 632,155 587,563 15,289,047 17,714,436 13,738,310 13,954,641 18,040,532 13,174,257 16,773,453 9,120 66,195 14,938 53,723 86,970 440,118 511,360 129,859 - 335,000 340,000 150,000 50,000 149,209 - - 1,336,878 1,367,196 1,445,218 1,462,974 1,531,524 272,946,862 298,069,663 328,484,841 350,610,319 376,041,824 367,832,495 365,310,650

16,156,554 18,199,632 19,784,330 20,113,821 21,084,421 22,141,230 22,440,393 16,156,554 18,199,632 19,784,330 20,113,821 21,084,421 22,141,230 22,440,393

$ 289,103,416 $ 316,269,295 $ 348,269,171 $ 370,724,140 $ 397,126,245 $ 389,973,725 $ 387,751,042

$ - -$ $ 1,128 $ 1,420 $ 15 $ 50 -$ ------7,413 7,115 6,862 951,911 7,795 3,608 1,706,003 1,000,971 1,234,669 1,366,313 502,887 1,606,887 1,654,913 - 29,024 41,821 ------42,128,629 40,338,369 46,213,005 48,458,746 64,443,915 71,801,468 41,039,568 43,166,037 41,621,974 47,587,308 49,914,964 66,058,612 73,460,039 42,745,571

2,634,628 2,705,534 2,959,425 2,915,169 3,080,211 3,123,567 2,899,295 13,398,022 14,825,909 16,201,061 17,028,120 18,854,547 19,875,091 19,306,359 16,032,650 17,531,443 19,160,486 19,943,289 21,934,758 22,998,658 22,205,654

$ 59,198,687 $ 59,153,417 $ 66,747,794 $ 69,858,253 $ 87,993,370 $ 96,458,697 64,951,225$

$ (229,780,825) $ (256,447,689) $ (280,897,533) $ (300,695,355) $ (309,983,212) $ (294,372,456) $ (322,565,079) ( 123,904) (668,189) (623,844) (170,532) 850,337 857,429 (234,739) $ (229,904,729) $ (257,115,878) $ (281,521,377) $ (300,865,887) $ (309,132,875) $ (293,515,027) $ (322,799,818)

131 United Independent School District

SCHEDULE 3 UNITED INDEPENDENT SCHOOL DISTRICT GENERAL REVENUES AND TOTAL CHANGE IN NET ASSETS LAST TEN FISCAL YEARS (accrual basis of accounting)

Fiscal Year 2003 2004 2005 2006

Net (Expense)/Revenue Governmental activities $ (175,533,472) $ (188,000,777) $ (218,959,246) $ (229,780,825) Business-type activities (234,645) 366,659 1,059,230 (123,904) Total Primary Government net expense $ (175,768,117) $ (187,634,118) $ (217,900,016) $ (229,904,729)

General Revenues and Other Changes in Net Assets Governmental activities: Taxes: Property taxes levied for general purposes$ 59,908,148 $ 65,119,961 $ 76,364,781 $ 85,819,152 Property taxes levied for debt service 6,657,953 7,207,080 8,070,555 14,169,460 Unrestricted state aid - formula grants 102,849,078 118,969,220 127,591,735 129,262,019 Unrestricted grants and contributions 10,728,052 912,954 804,201 2,398,018 Investment Earnings 1,223,818 1,212,623 3,038,842 6,735,082 Miscellaneous local & intermediate revenue 216,719 341,808 2,096,409 4,461,286 Transfers In (Out) 3,270,700 295,688 - - Special Item - - - - Total governmental activities 184,854,468 194,059,334 217,966,523 242,845,017 Business-type activities: Investment Earnings - - 60,934 102,924 Transfers In (Out) (3,270,700) - - - Total business-type activities (3,270,700) - 60,934 102,924

Total primary government $ 181,583,768 $ 194,059,334 $ 218,027,457 $ 242,947,941

Changes in Net Assets Governmental activities $ 9,320,996 $ 6,058,557 $ (992,723) $ 13,064,192 Business-type activities (3,505,345) 366,659 1,120,164 (20,980) Total primary government $ 5,815,651 $ 6,425,216 $ 127,441 $ 13,043,212

Source: United ISD Division of Business and Finance

132 CAFR for the Year Ending August 31, 2012

2007 2008 2009 2010 2011 2012

$ (256,447,689) $ (280,897,533) $ (300,695,355) $ (309,983,212) $ (294,372,456) $ (322,565,079) (668,189) (623,844) (170,532) 850,337 857,429 (234,739) $ (257,115,878) $ (281,521,377) $ (300,865,887) $ (309,132,875) $ (293,515,027) $ (322,799,818)

$ 96,020,857 $ 82,834,685 $ 94,063,168 $ 95,684,363 $ 97,390,939 $ 105,712,632 16,016,178 12,454,204 14,147,952 14,248,414 14,501,237 15,742,191 154,090,389 197,350,265 199,460,770 194,010,773 201,783,637 191,545,321 3,695,823 695,642 2,890,363 2,260,041 3,300,945 5,763,733 7,480,003 5,580,829 2,797,119 493,125 253,034 295,174 1,980,407 6,345,363 3,843,870 8,543,343 6,937,825 6,976,703 ------8,214,979 - - - - - 287,498,636 305,260,988 317,203,242 315,240,059 324,167,617 326,035,754

106,693 52,368 17,457 5,052 2,722 1,248 ------106,693 52,368 17,457 5,052 2,722 1,248

$ 287,605,329 $ 305,313,356 $ 317,220,699 $ 315,245,111 $ 324,170,339 $ 326,037,002

$ 31,050,947 $ 24,363,456 $ 16,507,887 $ 5,256,847 $ 29,795,161 $ 3,470,675 (561,496) (571,476) (153,075) 855,389 860,151 (233,491) $ 30,489,451 $ 23,791,980 $ 16,354,812 $ 6,112,236 $ 30,655,312 $ 3,237,184

133 United Independent School District

SCHEDULE 4 UNITED INDEPENDENT SCHOOL DISTRICT FUND BALANCES FOR GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting)

Fiscal Year 2003 2004 2005 2006

General Fund Nonspendable $ - $ - $ - $ - Restricted - - - - Committed - - - - Assigned - - - - Unassigned - - - - Reserved 2,115,685 4,799,762 7,278,059 5,268,244 Unreserved 19,128,280 24,171,826 27,388,651 35,257,691

Total general fund $ 21,243,965 $ 28,971,588 $ 34,666,710 $ 40,525,935

All other governmental funds Nonspendable $ - $ - $ - $ - Restricted - - - - Debt Service - - - - Committed - - - - Assigned - - - - Special Revenue - - - - Unassigned - - - - Reserved 8,516,085 21,752,306 35,962,914 70,487,433 Unreserved, reported in: Special revenue funds 313,834 837,609 905,646 1,332,291 Capital projects funds 945,168 42,361,284 60,316,597 517,089 Permanent Funds - - - -

Total all other governmental funds$ 9,775,087 $ 64,951,199 $ 97,185,157 $ 72,336,813

Notes: (1) Fiscal year 2011, the District implemented GASB 54 which changed the fund balance classifications to Nonspendable, Restricted, Committed, Assigned and Unassigned.

Source: United ISD Division of Business and Finance

134 CAFR for the Year Ending August 31, 2012

2007 2008 2009 2010 2011 (1) 2012

$ - $ - $ - $ - $ 807,843 $ 2,533,011 - - - - 15,856,068 10,868,204 - - - - 8,100,000 5,780,000 - - - - 125,000 2,646,588 - - - - 77,773,921 68,914,599 11,619,289 14,262,118 17,463,242 30,295,665 - - 46,348,398 57,377,873 65,153,943 66,318,407 - -

$ 57,967,687 $ 71,639,991 $ 82,617,185 $ 96,614,072 $ 102,662,832 $ 90,742,402

$ - $ - $ - $ - $ - $ ------4,943,715 4,365,877 ------1,049,015 957,188 ------49,401,928 22,867,979 7,918,620 5,640,921 - -

1,933,533 1,298,383 596,278 614,629 - - 2,534,115 4,134,415 788,877 293,048 - - - - 50,803 51,672 - -

$ 53,869,576 $ 28,300,777 $ 9,354,578 $ 6,600,270 $ 5,992,730 $ 5,323,065

135 United Independent School District

SCHEDULE 5 UNITED INDEPENDENT SCHOOL DISTRICT GOVERNMENTAL FUNDS REVENUES, (1) LAST TEN FISCAL YEARS (modified accrual basis of accounting)

Fiscal Year SOURCE 2003 2004 2005 2006 REVENUE FROM LOCAL, INTERMEDIATE AND OUT-OF-STATE SOURCE: Local Real & Property Taxes $ 65,563,516 $ 73,933,352 $ 85,498,462 $ 104,705,900 Local Revenue 2,936,995 2,035,618 4,071,808 6,176,767 Co-Curricular, Enterprising Services or Activities 835,081 952,156 1,025,022 1,000,971 Other Revenue from Local Sources 608,346 741,423 785,712 771,079 Revenue from Intermediate Sources 124,502 49,668 19,056 - Total Revenue from Local, Intermediate and Out of State Sources 70,068,440 77,712,217 91,400,060 112,654,718 REVENUE FROM STATE SOURCES: Per Capita and Foundation 105,465,988 110,254,821 119,622,300 120,598,042 Teacher Retirement System On-Behalf Payments 6,677,796 6,786,685 7,120,508 9,545,617 Other State Programs 16,758,738 14,767,138 14,707,463 15,781,556 Other Governmental Agencies - - - - Total Revenue from State Sources 128,902,522 131,808,644 141,450,271 145,925,215 REVENUE FROM FEDERAL SOURCES: Federally Distributed 2,743,252 2,657,763 2,044,539 4,127,684 Elementary and Secondary Education Act 6,060,810 9,233,383 13,727,268 14,224,247 Individuals with Disabilities Education Act 3,789,508 6,372,476 5,445,102 5,086,614 Vocational Education - Non Foundation 229,007 481,400 503,220 464,388 Other State Distributed Federal Programs 2,506,076 1,345,238 2,190,528 3,226,417 Total Revenue from Federal Sources 15,328,653 20,090,260 23,910,657 27,129,351

TOTAL $ 214,299,615 $ 229,611,121 $ 256,760,988 $ 285,709,284

Source: United ISD Division of Business and Finance

136 CAFR for the Year Ending August 31, 2012

2007 2008 2009 2010 2011 2012

$ 117,324,638 $ 97,226,229 $ 108,390,743 $ 111,686,016 $ 113,419,922 $ 125,116,693 7,647,948 11,080,119 3,798,177 1,285,878 4,730,682 7,144,109 794,523 174,600 249,712 322,710 772,789 381,203 130,964 865,945 2,174,576 2,361,591 1,001,735 1,494,733 43,863 6,862 - - -

125,941,936 109,353,755 114,613,208 115,656,195 119,925,129 134,136,738

148,426,362 187,892,393 190,141,039 188,807,774 196,062,804 185,125,286 10,526,151 13,973,327 14,266,614 15,073,368 14,954,781 13,139,715 13,151,059 17,185,326 17,246,841 10,619,687 9,670,069 10,849,248 ------172,103,572 219,051,046 221,654,494 214,500,829 220,687,654 209,114,250

5,678,376 4,560,468 6,018,491 22,946,242 28,418,061 19,566,004 12,100,745 12,483,281 13,326,967 13,252,179 16,436,899 16,428,292 5,637,314 5,567,915 5,563,501 5,923,186 7,040,139 6,833,880 469,700 503,108 556,152 599,761 499,665 812,702 1,038,277 1,201, 917 3,690,275 3,492,532 3,803,632 5,468,979 24,924,411 24,316,689 29,155,386 46,213,900 56,198,396 49,109,857

$ 322,969,920 $ 352,721,490 $ 365,423,088 $ 376,370,924 $ 396,811,179 $ 392,360,845

137 United Independent School District

SCHEDULE 6 UNITED INDEPENDENT SCHOOL DISTRICT CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) Fiscal Year 2003 2004 2005 2006 Revenues Local and Intermediate Sources$ 70,068,440 $ 77,712,217 $ 91,400,060 $ 112,654,718 State Program Revenues 128,902,522 131,808,644 141,450,271 145,925,215 Federal Program Revenues 15,328,653 20,090,260 23,910,657 27,129,351 Total Revenues 214,299,615 229,611,121 256,760,988 285,709,284

Expenditures Instruction 117,170,707 123,576,000 140,909,333 148,952,053 Instructional Resources and Media Services 2,783,047 2,795,874 3,397,713 3,681,830 Curriculum and Instructional Staff Development 919,684 1,421,344 1,171,211 1,809,501 Instructional Leadership 3,518,576 3,416,221 3,743,233 5,852,143 School Leadership 13,449,406 14,416,144 14,859,036 15,507,455 Guidance, Counseling and Evaluation Services 6,773,313 7,549,962 9,110,815 10,080,340 Social Work Services 535,985 627,437 818,439 1,312,067 Health Services 1,945,796 2,016,940 2,289,395 2,639,914 Student (Pupil) Transportation 8,930,188 6,412,522 9,162,360 9,032,644 Food Services 932,249 559,572 624,778 920,571 Co curricular/Extracurricular Activities 3,973,029 5,301,229 5,313,901 5,746,774 General Administration 7,821,226 8,450,323 8,798,410 9,220,650 Plant Maintenance and Operations 20,372,275 21,079,296 23,894,869 25,427,716 Security and Monitoring Services 2,327,041 2,963,384 3,367,308 3,811,804 Data Processing Services 1,910,406 3,443,425 2,799,262 3,089,468 Community Services 236,364 239,969 291,888 489,487 Debt Service Principal 8,480,560 9,359,551 10,870,602 12,991,919 Interest 10,400,948 9,371,957 13,805,220 13,467,706 Bond Issuance Cost and Fees 41,718 61,546 67,640 9,120 Capital Outlay 3,538,886 22,781,064 35,551,098 30,525,384 Juvenile Justice Alternative Education Program 110,861 179,242 161,365 129,859 Other Intergovernmental Charges - - - - Total Expenditures 216,172,265 246,023,002 291,007,876 304,698,405

Excess of Revenues over (under) Expenditures (1,872,650) (16,411,881) (34,246,888) (18,989,121)

Other Financing Sources Proceeds from Capital Leases - - - - Refunding Bonds Issued - - 45,394,989 - Capital-related Debt Issued (Regular Bonds) - 74,999,926 66,869,580 - Non-Current Loans 2,789,122 4,020,000 4,705,000 - Transfers In 450,000 100,000 2,640,000 100,000 Premium or Discount on Issuance of Bonds - 266,474 3,982,950 - Other Resources - 22,273 - - Transfers Out (Use) (450,000) (100,000) (2,640,000) (100,000) Payment to Bond Refunding Escrow Agent (Use) - - (48,617,551) - Other (Uses) (12,500) - (159,000) - Total Other Financing Sources (Uses) 2,776,622 79,308,673 72,175,968 - Special Items - 6,942 - -

Net Change in Fund Balance $ 903,972 $ 62,903,734 $ 37,929,080 $ (18,989,121) Debt Service as a % of noncapital expenditures 8.9% 8.4% 9.7% 9.7%

Source: United ISD Division of Business and Finance

138 CAFR for the Year Ending August 31, 2012

2007 2008 2009 2010 2011 2012

$ 125,941,936 $ 109,353,755 $ 114,613,208 $ 115,656,194 $ 119,925,129 $ 131,805,321 172,103,572 219,051,046 221,654,494 214,500,829 220,687,654 208,545,124 24,924,411 24,316,689 29,155,386 46,213,900 56,198,396 29,803,498 322,969,919 352,721,490 365,423,088 376,370,923 396,811,179 370,153,943

158,629,476 177,987,977 189,310,311 208,996,060 201,340,969 197,668,134 4,107,625 4,585,406 6,089,378 5,527,233 7,108,524 5,435,293 1,895,697 1,496,840 1,708,719 1,916,025 1,531,043 3,514,087 6,500,092 7,041,016 7,720,401 7,748,570 8,065,085 5,878,501 17,218,423 18,687,415 19,768,658 20,397,796 23,465,277 23,810,245 11,026,728 12,239,683 12,870,610 13,407,047 13,431,311 13,291,716 1,504,195 1,656,303 1,857,507 1,904,948 2,018,202 2,164,835 2,916,702 3,219,802 3,535,272 3,935,076 3,874,130 3,909,815 11,735,726 13,950,938 14,889,458 13,063,490 14,672,833 14,843,913 689,014 855,615 825,563 835,813 516,208 751,984 6,828,637 7,830,243 8,546,936 8,319,054 8,731,691 8,454,804 10,712,382 9,561,912 10,257,701 10,012,412 9,408,153 9,501,513 30,258,734 32,664,527 35,169,398 37,404,942 34,728,560 34,553,975 5,467,541 6,392,764 6,605,368 6,535,366 6,327,823 6,487,867 3,292,207 3,949,277 4,144,167 3,021,417 2,715,166 2,379,430 821,168 756,444 693,337 632,488 632,213 587,518

14,299,062 16,130,031 18,312,531 18,779,807 19,074,614 19,709,362 12,833,610 14,610,492 12,047,568 11,787,501 11,361,938 10,057,477 66,195 14,938 53,723 86,970 440,119 511,360 31,433,874 29,217,824 25,259,116 11,312,047 20,832,731 18,082,220 - 335,000 340,000 150,000 50,000 149,209 - 1,336,878 1,367,196 1,445,218 1,462,974 1,531,524 332,237,086 364,521,325 381,372,918 387,219,280 391,789,564 383,274,781

(9,267,167) (11,799,835) (15,949,830) (10,848,357) 5,021,615 (13,120,838)

- - 630,824 4,650,938 - - 7,934,996 4,295,000 - - 34,000,000 45,890,000 ------7,350,000 17,440,000 - - 5,100,000 2,600,000 2,600,000 4,004,291 4,250,000 2,700,000 552,385 - - - 4,339,921 4,111,142 ------(5,100,000) (2,600,000) (2,600,000) (4,004,291) (4,262,882) (2,700,000) (8,460,678) (4,391,660) - - (37,907,432) (49,470,398) ------26,703 (96,660) 7,980,824 22,090,938 419,607 530,744

8,214,979 - - - - - $ (1,025,485) $ (11,896,495) $ (7,969,006) $ 11,242,581 $ 5,441,222 $ (12,590,094)

9.0% 9.2% 8.7% 8.2% 8.3% 8.3%

139 United Independent School District

SCHEDULE 7 UNITED INDEPENDENT SCHOOL DISTRICT GENERAL GOVERNMENTAL LOCAL REVENUES BY SOURCE LAST TEN FISCAL YEARS (modified accrual basis of accounting)

Fiscal Year 2003 2004 2005 2006 Local Revenue Webb CED$ (3,311) $ - $ - $ - School Age Child Care 702,793 791,177 856,187 827,445 Property Taxes 65,571,770 73,944,650 85,508,944 101,239,313 Sale of Weighted Average 603,089 405,938 662,299 2,359,954 Tuition and Fees - - - - County Available 132,649 155,949 - 270,573 Facilities Rent 9,972 20,296 25,219 29,025 Gifts and Bequests 1,100 5,000 - - Insurance Recovery - - - - Other Local Revenues 229,446 145,368 280,488 271,805 Athletic Activity 128,022 160,979 168,836 173,526 Summer Feeding Program 4,266 4,258 5,283 7,413 Preg., Educ. and Parenting Program 36,752 51,381 38,929 46,491 Communities in Schools 1,829 1,000 - - Campus Activity Funds 532,773 440,231 505,569 499,624 Coca Cola Fund 687,000 260,000 281,000 169,000 Parents as School Partners - - - - H2O Grant 19,730 - 1,119 - Lamar Bruni Vergara Trust 72,760 60,582 9,308 11,216 Enlace Grant 9,210 3,117 7,396 - Texas Music Project - - 4,644 356 TAMIU-Colonias Program - - 5,999 - Interest-Investment 1,328,590 1,262,291 3,038,842 6,748,975 Teacher Minigrant Program - - - - Total Local Revenue $ 70,068,440 $ 77,712,217 $ 91,400,060 $ 112,654,718

Source: United ISD Division of Business and Finance

140 CAFR for the Year Ending August 31, 2012

2007 2008 2009 2010 2011 2012

$ - $ - $ - $ - $ - $ - 1,020,045 1,170,574 1,180,477 1,207,537 1,214,809 1,250,618 116,272,191 97,226,229 108,390,743 111,686,016 113,419,922 125,116,693 - 1,329,343 - - - - - 1,128 1,420 15 50 - - 1,247,458 701,683 547,598 361,641 553,680 41,821 21,139 17,080 76,640 86,792 58,115 9,359 171,065 50,000 - 30,399 32,040 - 1,558,583 - - 220 - 120,681 865,945 154,348 385,621 4,201,342 2,821,893 214,624 174,600 249,712 322,710 353,312 381,203 7,115 6,862 7,531 7,795 3,609 3,501 36,748 - 34,138 5,188 - 19,864 ------579,899 - 798,083 755,451 - 3,602,709 150,000 - 150,000 150,000 ------7,336 ------79,375 17,000 ------7,480,003 5,580,828 2,797,118 493,126 253,033 296,422 2,113 - 1,500 1,500 - - $ 125,941,936 $ 109,353,754 $ 114,613,208 $ 115,656,195 $ 119,925,129 $ 134,136,738

141 United Independent School District

SCHEDULE 8 UNITED INDEPENDENT SCHOOL DISTRICT ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS

Fiscal Ye arReal Property Le s s : Ended Residential Commercial Personal Tax Exempt August 31 Property Property Property Real Property 2003$ 2,582,630,505 $ 3,118,808,063 $ 629,209,780 $ 1,454,840,643 2004 2,823,660,230 3,404,929,949 666,958,410 1,579,258,043 2005 3,290,911,503 4,057,880,715 671,269,010 1,700,958,006 2006 3,818,386,731 4,797,159,309 1,047,539,360 1,918,738,513 2007 4,329,303,998 4,777,147,891 1,144,268,656 2,075,467,294 2008 4,806,963,976 5,406,598,046 1,335,152,668 2,319,179,666 2009 4,938,237,218 5,577,215,940 1,362,375,747 2,482,383,928 2010 5,036,527,720 5,721,112,556 1,335,627,322 2,587,019,556 2011 5,011,370,512 6,466,883,775 1,521,662,447 2,672,060,820 2012 4,892,411,379 7,683,575,715 1,845,210,671 2,720,138,083

Source: United ISD Tax Department

142 CAFR for the Year Ending August 31, 2012

Total Total Estimated Assessed Taxable Direct Actual Value as a Assessed Tax Taxable Percentage of Value Rate Value Actual Value $ 4,875,807,705 1.477$ $ 6,663,840,366 73.17% 5,316,290,546 1.527 7,258,472,199 73.24% 6,319,103,222 1.607 8,442,169,714 74.85% 7,744,346,887 1.474 10,171,668,842 76.14% 8,175,253,251 1.185 10,790,232,153 75.77% 9,229,535,024 1.185 12,156,541,779 75.92% 9,395,444,977 1.195 12,502,977,795 75.15% 9,506,248,042 1.195 12,729,755,366 74.68% 10,327,855,914 1.195 13,684,122,878 75.47% 11,701,059,682 1.195 15,180,208,174 77.08%

143 United Independent School District

SCHEDULE 9 UNITED INDEPENDENT SCHOOL DISTRICT PROPERTY TAX RATES DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS

Fiscal Year 2003 2004 2005 2006 Direct Tax Rate Maintenance and Operations$ 1.330 1.380$ 1.380$ 1.264$ Interest and Sinking 0.147 0.147 0.227 0.211 Total Direct Tax Rate 1.477 1.527 1.607 1.475

Overlapping Tax Rates City of Laredo 1.911 0.637 0.637 0.637 Webb County & R&B 0.458 0.438 0.438 0.421 Laredo Community College 0.236 0.236 0.233 0.231 City of Rio Bravo 0.500 0.500 0.499 0.500 City of El Cenizo 0.500 0.500 0.500 0.500 Webb County Drainage District 0.109 0.106 0.106 0.092 Total Overlapping Tax Rates 3.714 2.417 2.413 2.381

Total Direct and Overlapping Tax Rates 5.191$ 3.944$ 4.020$ 3.856$

Source: Webb County Appraisal District

144 CAFR for the Year Ending August 31, 2012

2007 2008 2009 2010 2011 2012

$ 1.030 1.030$ 1.040$ $ 1.040 $ 1.040 $ 1.040 0.155 0.155 0.155 0.155 0.155 0.155 1.185 1.185 1.195 1.195 1.195 1.195

0.634 0.637 0.637 0.637 0.637 0.637 0.420 0.420 0.420 0.420 0.420 0.420 0.222 0.221 0.227 0.238 0.259 0.258 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.500 0.079 0.066 0.064 0.064 0.064 0.064 2.355 2.344 2.348 2.359 2.380 2.379

$ 3.540 3.529$ 3.543$ $ 3.554 $ 3.575 $ 3.574

145 United Independent School District

SCHEDULE 10 UNITED INDEPENDENT SCHOOL DISTRICT PRINCIPAL PROPERTY TAXPAYERS AUGUST 31, 2012

2012 2003 Percentage of Percentage of Taxable Total Taxable Taxable Total Taxable Assessed Assessed Assessed Assessed Taxpayer Value Rank Value Value Rank Value

Rosetta Resources Inc $ 437,958,660 1 3.74 % $ % Lewis Petro Properties Inc 400,659,290 2 3.42 42,542,579 4 0.80 SM Energy Company 346,961,870 3 2.97 Anadarko E&P Company LP 217,829,500 4 1.86 Chesapeake Operating Inc 183,692,490 5 1.57 Gates Mineral Company LTD 148,283,480 6 1.27 AEP Electric Tranmission 133,945,290 7 1.14 54,771,430 3 1.12 Laredo WLE LP 89,916,070 8 0.77 ConocoPhillips Company 75,136,060 9 0.64 58,574,160 2 1.20 Halliburton Energy Services 68,455,550 10 0.59 Calpine Natural Gas 60,268,370 1 1.24 Columbus Energy 38,832,960 5 1.12 Chevron USA Inc 36,192,605 6 0.74 Laredo Regional Medical Center 32,421,130 7 0.87 Enterprise Laredo Associates 32,283,250 8 0.66 Killam Ind Dev Partnership 28,867,130 9 0.59 BB County Correctional Center 22,140,870 10 0.45

$ 2,102,838,260 17.97 % $ 406,894,484 8.79 %

Source: United ISD Tax Department

146 CAFR for the Year Ending August 31, 2012

SCHEDULE 11 UNITED INDEPENDENT SCHOOL DISTRICT PROPERTY LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS

Total Tax Collected within the Collections Fiscal Year Levy for Fiscal Year of the Levy Subsequent Total Collections to Date Ended Fiscal Year Amount % of Levy Years Amount % of Levy

2003$ 72,251,331 69,769,598$ 96.57 %$ 2,426,654 $ 72,196,252 96.57 % 2004 83,821,422 81,533,815 97.27 1,773,165 83,306,980 97.27 2005 100,476,271 97,731,992 97.27 2,527,712 100,259,704 97.27 2006 113,267,095 110,228,611 97.32 3,791,561 114,020,172 97.32 2007 95,866,850 92,907,052 96.91 3,225,314 96,132,367 96.91 2008 108,147,626 103,754,243 95.94 3,016,771 106,771,014 95.94 2009 111,038,081 106,384,678 95.81 3,545,312 109,929,990 95.81 2010 112,407,769 108,335,724 96.38 3,216,618 111,552,342 96.38 2011 122,310,106 119,888,033 98.02 4,203,316 124,091,349 98.02 2012 (1) (1) (1) (1) (1) (1)

Note: (1) Data Not Available. Source: United ISD Tax Department

147 United Independent School District

SCHEDULE 12 UNITED INDEPENDENT SCHOOL DISTRICT RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS

Ratio Net Gross Bonded (2) Amounts Net Bonded Bonded Debt Fiscal Year Estimated Debt Available for Debt to Estimated Ended Actual Taxable Assessment Outstanding at Retirement of Outstanding at Actual Taxable August 31: Value Ratio Year End Bonds Year End Value

2003$ 6,663,840,366 100% 192,046,079 8,516,085 183,529,994 2.75% 2004 7,258,472,199 100% 261,050,016 9,277,651 251,772,365 3.47% 2005 8,442,169,714 100% 320,803,359 7,438,326 313,365,033 3.71% 2006 10,171,668,842 100% 312,636,614 8,342,541 304,294,073 2.99% 2007 10,790,232,153 100% 305,286,163 10,313,711 294,972,452 2.73% 2008 12,156,541,779 100% 292,881,412 7,052,754 285,828,658 2.35% 2009 12,502,977,795 100% 287,347,500 4,883,637 282,463,863 2.26% 2010 12,729,755,366 100% 266,801,128 4,573,846 262,227,282 2.06% 2011 13,684,122,878 100% 251,953,707 4,943,715 247,009,992 1.81% 2012 15,180,208,174 100% 236,568,108 4,365,877 232,202,231 1.53%

Notes: Population and income data consists of metropolitan statistics for Webb County, where U.I.S.D. is located. (1) Demographic information used for these items is the latest available information (2011).

Source: Texas Workforce Commission Website

148 CAFR for the Year Ending August 31, 2012

Debt as a Estimated PPFCO Percentage Net Bonded Actual Taxable Outstanding Per Capita of Personal Debt Per Value at Year End Population Income Personal Income Income Capita Per Capita

12,025,000 212,675 17,839 3,793,956,000 4.84% 863 31,333 13,985,000 218,806 18,471 4,041,613,000 6.23% 1,151 33,173 16,180,000 224,874 19,810 4,454,781,000 7.03% 1,394 37,542 13,780,000 229,189 20,718 4,748,324,000 6.41% 1,328 44,381 11,705,000 231,470 21,935 5,077,310,000 5.81% 1,274 46,616 9,545,000 236,941 23,498 5,567,524,000 5.13% 1,206 51,306 14,910,000 236,901 23,634 5,598,974,000 5.04% 1,192 52,777 30,435,000 250,304 22,469 5,624,141,000 4.66% 1,048 50,857 28,745,000 263,985 21,518 5,680,382,000 4.35% 936 51,837 26,995,000 270,381 21,429 5,793,990,000 4.01% 859 56,144

149 United Independent School District

SCHEDULE 13 UNITED INDEPENDENT SCHOOL DISTRICT LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS

Fiscal Year 2003 2004 2005 2006

Debt Limit $ 487,580,771 $ 529,468,377 $ 631,910,322 $ 927,495,893

Total net debt applicable to limit 195,554,994 265,598,365 329,401,933 304,294,073

Legal debt margin $ 292,025,777 $ 263,870,012 $ 302,508,389 $ 623,201,820

Total net debt applicable to the limit as a percentage of debt limit 40.11% 50.16% 52.13% 32.81%

Source: United ISD Division of Business and Finance

150 CAFR for the Year Ending August 31, 2012

2007 2008 2009 2010 2011 2012

$ 1,025,072,055 $ 1,154,871,469 $ 1,187,782,891 $ 1,209,326,760 $ 1,299,991,673 $ 1,437,312,050

294,972,452 294,972,452 282,389,588 262,227,282 247,009,922 232,202,231

$ 730,099,603 $ 859,899,017 $ 905,393,303 $ 947,099,478 $ 1,052,981,751 $ 1,205,109,819

28.78% 25.54% 23.77% 21.68% 19.00% 16.16%

Legal Debt Margin Calculation for Fiscal Year 2012 Assessed Value Add back: exempt real property $ 11,701,059,682 Total assessed value 2,672,060,820 14,373,120,502

Debt limit (10% of total assessed value) 1,437,312,050 Debt applicable to limit: General obligation bonds 236,568,108 Less: Amount set aside for repayment of general obligation debt (4,365,877) Total net debt applicable to limit 232,202,231

Legal debt margin $ 1,205,109,819

151 United Independent School District

SCHEDULE 14 UNITED INDEPENDENT SCHOOL DISTRICT DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF AUGUST 31, 2012

Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable (1) Debt

City of Laredo $ 190,763,723 92 % $ 175,502,625 County of Webb 64,385,000 76 48,932,600 Laredo Community College 100,381,943 92 92,351,388 City of Rio Bravo - 100 - City of El Cenizo - 100 -

Subtotal, overlapping debt 316,786,613

United Independent School District Debt 263,531,308

Total direct and overlapping debt $ 580,317,921

Note: (1) The percentage of overlapping debt applicable is estimated using taxable assessed property values.

Source: United ISD Division of Business and Finance

152 CAFR for the Year Ending August 31, 2012

SCHEDULE 15 UNITED INDEPENDENT SCHOOL DISTRICT DEMOGRAPHIC AND ECONOMIC INFORMATION (1) LAST TEN FISCAL YEARS AUGUST 31, 2012

Per Percentage Capita Average Economically Fiscal Personal Personal Unemployment Daily Disadvantaged Year Population (3) Income (3) Income Rate (2) Attendance Students

2003 212,675 $ 3,793,956 $ 17,839 7.3% 28,488 72.9%

2004 218,806 4,041,613 18,471 6.6% 29,922 73.4%

2005 224,874 4,454,781 19,810 5.0% 31,464 73.2%

2006 229,189 4,748,324 20,718 5.2% 33,167 74.1%

2007 231,470 5,077,310 21,935 4.2% 34,845 72.4%

2008 236,941 5,567,524 23,498 5.6% 37,712 71.4%

2009 236,901 5,598,974 23,634 5.2% 37,136 72.8%

2010 250,304 5,624,141 22,469 8.9% 37,811 75.2%

2011 263,985 5,680,382 21,518 8.1% 38,839 75.8%

2012 270,381 5,793,990 21,429 7.2% 39,092 74.4%

Notes: (1) Data consists of metropolitan statistics for Webb County, where U.I.S.D. is located (2) Data was updated in 2011 by the Texas Workforce Commission. (3) Data was revised in 2011.

Source: Texas Workforce Commission – www.twc.state.tx.us

153 United Independent School District

SCHEDULE 16 UNITED INDEPENDENT SCHOOL DISTRICT PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO

2012 2003 Percentage of Percentage of Total County Total County Employer Employees Rank Employement Employees Rank Employement United Independent School District 6,179 1 22.1% 4,478 1 6.4% Laredo Independent School District 4,500 2 16.1% 3,587 2 5.1% City of Laredo 2,371 3 8.5% 2,084 3 3.0% Laredo Sector Border Patrol 2,000 4 7.2% 1,147 7 1.6% H.E.B. Grocery Company 1,552 5 5.6% 1,327 5 1.9% Webb County 1,500 6 5.4% 1,270 6 1.8% Laredo Medical Center 1,500 7 5.4% 1,661 4 2.4% Texas A&M International University 1,215 8 4.3% 880 10 1.3% McDonald's Restaurant 1,200 9 4.3% 1,114 8 1.6% Wal-Mart 937 10 3.4% 934 9 1.3% Laredo Community College 902 11 3.2% 635 13 0.9% Convergys 860 12 3.1% - - 0.0% Doctors Hospital of Laredo 767 13 2.7% 700 11 1.0% International Bank of Commerce 667 14 2.4% 552 16 0.8% Stripes (28 units) 482 15 1.7% - - 0.0% Laredo Energy Arena 293 16 1.0% - - 0.0% Falcon International Bank 280 17 1.0% - - 0.0% BBVA Compass Bank (formerly LNB) 276 18 1.0% 558 15 0.8% Border Region MHMR 245 19 0.9% 236 19 0.3% Target Greatland 221 20 0.8% 300 17 0.4%

Notes: (1) Data compiled by the Laredo Development Foundation on March, 2011

Source: Laredo Development Foundation and United ISD Human Resources Department.

154 CAFR for the Year Ending August 31, 2012

SCHEDULE 17 UNITED INDEPENDENT SCHOOL DISTRICT FULL-TIME EQUIVALENT DISTRICT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS

Full-time Equivalent Employees as of August 31 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Teachers Pre-K & Kindergarten 233 226 236 243 237 260 257 261 239 200 Elementary 789 814 872 911 970 999 1,026 1,034 1,060 1,151 Secondary 729 693 758 806 826 912 980 1,004 1,045 1,047 Special Education 188 217 199 215 227 227 237 238 212 106 All Level 4321441100 Total Teachers 1,943 1,953 2,067 2,176 2,264 2,402 2,501 2,538 2,556 2,504

Support Staff Supervisors 0 0 7 24 30 49 47 38 33 33 Counselors 68 69 78 83 87 94 93 91 98 94 Educational Diagnosticians 22 24 29 33 32 25 26 25 25 25 Librarians 34 32 34 38 39 40 41 42 42 41 School Nurse 36373943454546505050 Therapists 9212422303033342923 LSSP/Psychologist0001012434 Other Support Staff 167 136 142 174 172 168 179 152 141 128 Total Support Staff 336 319 353 418 435 452 467 435 421 398

Administrators Admin/Instr Officers 10 17 11 10 8 15 16 66 65 65 Principals 36 36 40 39 40 40 41 41 41 40 Assistant Principals 68 70 75 80 80 90 92 96 97 96 Superintendent 1111111111 Asst Superintendents2222166556 Total Administrators 117 126 129 132 130 152 156 209 209 208

Educational Aides 560 577 535 538 625 757 718 752 747 705

Auxiliary Staff 1,469 1,639 1,833 1,897 1,981 1,873 2,139 2,149 2,185 2,187

TOTAL PERSONNEL 4,425 4,614 4,917 5,161 5,435 5,636 5,980 6,083 6,117 6,001

Source: Texas Education Agency – Academic Excellence Indicator System Report & Standard Reports

155 United Independent School District

SCHEDULE 18 UNITED INDEPENDENT SCHOOL DISTRICT EXPENDITURES, ENROLLMENT AND PER PUPIL COST LAST TEN FISCAL YEARS

Percentage of Students Receiving Cost # of Pupil- Free or Fiscal Operating Per Percentage Teaching Teacher Reduced-Price Year Enrollment Expenditures Pupil Change Staff Ratio Meals

2003 30,725 199,174,211 6,482 100.00% 1,943 15.8 72.71% 2004 32,262 214,265,950 6,641 2.39% 1,953 16.5 73.29% 2005 33,895 237,715,396 7,013 5.30% 2,067 16.4 73.10% 2006 35,638 256,292,843 7,192 2.48% 2,176 16.4 74.08% 2007 37,671 283,652,241 7,530 4.49% 2,264 16.6 72.25% 2008 38,887 314,228,195 8,081 6.82% 2,402 16.2 71.30% 2009 39,935 334,667,163 8,380 3.58% 2,501 16.0 72.84% 2010 40,733 353,276,778 8,673 3.37% 2,538 16.0 72.84% 2011 41,708 350,923,728 8,414 -3.08% 2,556 16.3 75.75% 2012 42,096 352,148,926 8,365 -0.58% 2,504 16.8 74.42%

Source: Texas Education Agency – Academic Excellence Indicator System Report & Standard Reports

156 CAFR for the Year Ending August 31, 2012

SCHEDULE 19 UNITED INDEPENDENT SCHOOL DISTRICT TEACHER BASE SALARIES LAST TEN FISCAL YEARS

0 Years 32+ Years District County Statewide Fiscal Experience Experience Average Average Average Ye ar Salary (1) Salary (1) Salary (2) Salary (2) Salary (2)

2003$ 32,500 50,475$ 37,235$ 38,631$ 39,974$ 2004 34,000 51,825 38,806 40,119 40,478 2005 36,000 54,075 40,871 41,800 41,011 2006 36,500 54,584 41,531 42,371 41,744 2007 39,500 57,204 44,209 45,164 44,897 2008 41,000 60,044 45,778 46,505 46,178 2009 42,000 61,044 47,291 47,938 47,158 2010 43,000 61,961 48,514 49,063 48,263 2011 42,500 61,461 49,097 49,378 48,639 2012 42,500 60,853 48,817 47,442 48,375

Sources: (1) United ISD Human Resources Department (2) Texas Education Agency – Standard Reports

157 United Independent School District

SCHEDULE 20 UNITED INDEPENDENT SCHOOL DISTRICT MEASURES OF CAPACITY AUGUST 31, 2012

Total Max. Cap. Practical Max. Cap. Practical Average Square Based on Capacity Total Based on Capacity Architect's Practical School Feet Sq. Feet Sq. Feet Classrooms Classrooms Classrooms Capacity Capacity High Schools United High School 232,686 8,726 5,817 155 6,200 3,875 8,585 4,846 United South High School 311,147 11,668 7,779 127 5,080 3,175 11,480 5,477 J.B. Alexander High School 302,713 11,352 7,568 123 4,920 3,075 11,169 5,321 S.T.E.P. Academy 17,472 655 437 20 800 500 645 468 L.B.J. High School 283,030 10,614 7,076 115 4,600 2,875 10,443 4,975 Total High Schools: 1,147,048 43,014 28,676 540 21,600 13,500 42,321 21,088

Middle S chools United Middle School 121,777 4,567 3,044 60 2,400 1,440 4,493 2,242 United South Middle School 103,684 3,888 2,592 67 2,680 1,608 3,826 2,100 Salvador Garcia Middle 92,100 3,454 2,303 45 1,800 1,080 3,398 1,691 Washington Middle 108,036 4,051 2,701 65 2,600 1,560 3,986 2,130 Clark Middle School 104,008 3,900 2,600 53 2,120 1,272 3,837 1,936 Los Obispos Middle 96,708 3,627 2,418 51 2,040 1,224 3,568 1,821 Trautmann Middle School 96,708 3,627 2,418 51 2,040 1,224 3,568 1,821 Trautmann 6Th Grade 66,300 2,486 1,658 39 1,560 936 2,446 1,297 Gonzalez Middle School 101,260 3,797 2,532 48 1,920 1,152 3,736 1,842 Lamar-Bruni Vergara Middle 97,117 3,642 2,428 42 1,680 1,008 3,583 1,718 Total Middle Schools: 987,698 37,039 24,692 521 20,840 12,504 36,442 18,598

Elementary Schools Nye Elementary 104,376 3,914 2,609 45 1,800 990 3,851 1,800 Clark Elementary 74,418 2,791 1,860 45 1,800 990 2,746 1,425 Salinas Elementary 77,308 2,899 1,933 68 2,720 1,496 2,852 1,714 Newman Elementary 64,350 2,413 1,609 46 1,840 1,012 2,374 1,310 Trautmann Elementary 74,499 2,794 1,862 52 2,080 1,144 2,749 1,503 Perez Elementary 83,581 3,134 2,090 61 2,440 1,342 3,084 1,716 Finley Elementary 70,828 2,656 1,771 44 1,760 968 2,613 1,369 United D.D. Hachar Elementary 74,499 2,794 1,862 43 1,720 946 2,749 1,404 Gutierrez Elementary 77,996 2,925 1,950 44 1,760 968 2,878 1,459 Ruiz Elementary 82,001 3,075 2,050 54 2,160 1,188 3,026 1,619 Matias De Llano, Jr. Elementary 74,416 2,791 1,860 50 2,000 1,100 2,746 1,480 Kazen Elementary 75,161 2,819 1,879 44 1,760 968 2,773 1,424 Juarez-Lincoln Elementary 72,856 2,732 1,821 40 1,600 880 2,688 1,351 Prada Elementary 89,355 3,351 2,234 49 1,960 1,078 3,297 1,656 Borchers Elementary 92,880 3,483 2,322 44 1,760 968 3,427 1,645 Kennedy-Zapata Elementary 77,562 2,909 1,939 46 1,840 1,012 2,862 1,476 Col. Santos Benavides Elementary 94,416 3,541 2,360 46 1,840 1,012 3,484 1,686 Roosevelt Elementary 88,268 3,310 2,207 51 2,040 1,122 3,257 1,664 Zaffirini Elementary 104,881 3,933 2,622 64 2,560 1,408 3,870 2,015 Cuellar Elementary 98,161 3,681 2,454 56 2,240 1,232 3,622 1,843 Muller Elementary 90,481 3,393 2,262 46 1,840 1,012 3,338 1,637 Arndt Elementary 103,345 3,875 2,584 62 2,480 1,364 3,813 1,974 Bonnie Garcia Elementary 105,168 3,944 2,629 60 2,400 1,320 3,880 1,975 Rodolfo C. Centeno Elementary 92,880 3,483 2,322 44 1,760 968 3,427 1,645 Malakoff Elementary 94,416 3,541 2,360 46 1,840 1,012 3,484 1,686 Fasken Elementary 97,488 3,656 2,437 50 2,000 1,100 3,597 1,769 Killam Elementary Total Elementary Schools: 2,235,590 83,835 55,890 1,300 52,000 28,600 82,484 42,245

Total Campus: 4,370,336 163,888 109,258 2,361 94,440 54,604 161,248 81,931

Source: United ISD Environmental Management Department

158 CAFR for the Year Ending August 31, 2012

Federal Awards

159 United Independent School District

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160 CAFR for the Year Ending August 31, 2012

PAT TIL L 0, B ROW N & H ILL, L. L. P. CERTIFIED PUBLIC ACCOUNTANTS . BUSINESS CONSULTANTS

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 Trustees United Independent School District Laredo, Texas

We have audited the financial statements of the governmental activities, the business type activities, each major fund, and the aggregate remaining fund information of United Independent School District (the "District") as of and for the year ended August 31, 2012, which collectively comprise the District's basic financial statements and have issued our report thereon dated November 12,2012. 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

Management of the District is responsible for establishing and maintaining effective 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 opinions 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 United Independent School District's internal control over financial reporting.

A deficiency in internal control 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 and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.

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

161 United Independent School District

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 law, 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.

We noted certain matters that we reported to the District's management III a separate letter dated November 12,2012.

This report is intended solely for the information and use of the Board of Trustees, management, the Texas Education Agency, federal awarding agencies and pass-through entities, and is not intended to be and should not be used by anyone other than these specified parties.

November 12,2012

162 CAFR for the Year Ending August 31, 2012

PATTILLO, BROWN & HILL, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS . BUSINESS CONSULTANTS

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH REQUIREMENT THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

Board of Trustees United Independent School District Laredo, Texas

Compliance

We have audited the compliance of United Independent School District (the "District") with the types of compliance requirements described in the Us. Office ofManagement and Budget ("OMB ') Circular A­ 133 Compliance Supplement that are applicable to each of the District's major federal programs for the year ended August 31, 2012. The District's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with requirement of laws, regulations, contracts, and grants applicable to each of its major federal programs in 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 identified in the accompanying schedule of findings and questioned costs 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 deJermination of the District's compliance with those requirements.

In our opinion, the District complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs identified in the accompanying schedule of findings and questioned costs for the year ended August 31, 2012.

Internal Control Over Compliance

Management of the District is responsible for establishing and maintaining effective internal control over compliance with the requirement 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 the auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, 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 the163 effectiveness of the District's internal control over compliance. United Independent School District

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies, or material weaknesses in internal control over compliance. 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 Board of Trustees, management, the Texas Education Agency, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

November 12,2012

164 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

For the Year Ended August 31, 2012

SECTION I – SUMMARY OF AUDITORS’ RESULTS

Financial Statements Type of auditors’ report issued: Unqualified Internal control over financial reporting:  Material weakness(es) identified? _____Yes X No  Significant deficiency(ies) identified not considered to be material weaknesses? Yes X None Reported

Noncompliance material to financial statements noted? _____Yes X No

Federal Awards Internal control over major programs:  Material weakness(es) identified? _____Yes X No  Significant deficiency(ies) identified not considered to be material weaknesses? Yes X None Reported Type of auditors’ report issued on compliance for major programs Unqualified Any audit findings disclosed that are required to be reported accordance with Circular A-133, Section. 510(a)? Yes X No

Identification of Major Programs CFDA Number(s) Name of Federal Program or Cluster

10.553,10.555, Child Nutrition Cluster 10.565 & 10.582

Education Jobs 84.410A

Dollar threshold used to distinguish between Type A and Type $1,316,699 B programs:

Auditee qualified as low-risk auditee? X Yes No

165 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

For the Year Ended August 31, 2012

SECTION II –FINANCIAL STATEMENT FINDINGS

Program Findings/Noncompliance

None reported.

SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

None reported.

166 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS

For the Year Ended August 31, 2012

None reported.

167 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT EXHIBIT K-1 Cont'd SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED AUGUST 31, 2012

FEDERAL GANTOR/ Federal Pass-Through PASS-THROUGH GRANTOR/ CFDA Entity Indentifying Federal PROGRAM OR CLUSTER TITLE Number Number Expenditures

U.S. DEPARTMENT OF DEFENSE Direct Programs ROTC 12.113 2012 $ 224,299 Total Direct Programs $ 224,299 TOTAL DEPARTMENT OF DEFENSE $ 224,299 U.S. DEPARTMENT OF EDUCATION Passed Through Region I Education Svce Center Gear Up Project - LBJHS 84.334A P334A110180-11 $ 3,661 Gear Up Project - SGMS 84.334A P334A110180-11 50,599 Gear Up Project - LOMS 84.334A P334A110180-11 69,214 Gear Up Project - LBVMS 84.334A P334A110180-11 53,167 Total Passed Through Region I Education Service Center $ 176,641 Passed Through State Department of Education ESEA Title I Part A - Improving Basic Programs 84.010A 12610101240903$ 11,303,009 ESEA Title I Part A - Improving Basic Programs 84.010A 13610101240903 36,230 ESEA Title I Part A - School Improvement Program 84.010A 12610104240903000 29,864 ESEA Title I Part A - SIP - Effective Activity Fund 84.010A 12610110240903000 146,370 ESEA Title I Part A - School Improvement Program 84.010A 11610104240903009 470 ESEA Title I Part A - School Improvement Program 84.010A 12610104240903000 111,468 ESEA Title I Part A - School Improvement Program 84.010A 12610104240903000 59,709 Total CFDA Number 84.010A$ 11,687,120 ESEA Title I, Part C-Migratory Children 84.011A 12615001240903 $ 527,493 IDEA - Part B, Formula 84.027 126600012409036000$ 6,805,381 Vocational Education - Basic Grant 84.048A 12420006240903$ 554,701 Vocational Education - Basic Grant 84.048A 13420006240903 258,000 Total CFDA Number 84.048A$ 812,701 IDEA - Part B, Preschool 84.173A 126610012409036000$ 28,497 Title III, Part A-LEP / Immigrant 84.365A 12671001240903$ 1,886,769 ESEA Title II, Part A, Teacher & Principal Training 84.367A 12694501240903 $ 1,039,648 Summer School LEP 84.369A 2012 $ 57,709 SLDS - Classroom Link to ISDS 84.372A 10635002240903 $ 36,069 Title II, Part D, Technology ARRA/Stimulus 84.386A 10553001240903 $ 4,661 ESEA Title I Part A - ARRA/Stimulus 84.389A 10551001240903 $ 117,320 IDEA-B Formula ARRA/Stimulus 84.391A 10554001240903 $ 217,227 IDEA-B Preschool ARRA/Stimulus 84.392A 10555001240903 $ 5,019 ARRA Title XIV State Fiscal Stabilization Funds Grant 84.394A 11557001240903 $ 7,353 ARRA Education Jobs Fund 84.410A 11550101240903 $ 165,886 Total Passed Through State Department of Education $ 23,398,853

TOTAL DEPARTMENT OF EDUCATION $ 23,575,494

U.S. DEPARTMENT OF JUSTICE Passed Through Dept. of Justice COPS Secure Our Schools Grant TX294ZZ 2009CKWX0761 $ 2,828 COPS Secure Our Schools Grant TX294ZZ 2009CKWX0761 32,520 Total Passed Through Dept. of Justice $ 35,348 TOTAL DEPARTMENT OF JUSTICE $ 35,348

168 CAFR for the Year Ending August 31, 2012

UNITED INDEPENDENT SCHOOL DISTRICT EXHIBIT K-1 Cont'd SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED AUGUST 31, 2012

FEDERAL GANTOR/ Federal Pass-Through PASS-THROUGH GRANTOR/ CFDA Entity Indentifying Federal PROGRAM OR CLUSTER TITLE Number Number Expenditures

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Direct Programs Summer Feeding Program* 10.559 N/A $ 494,288 Total Direct Programs $ 494,288 TOTAL DEPARTMENT OF HUMAN SERVICES $ 494,288

U.S. DEPARTMENT OF AGRICULTURE Passed Through State Dept. of Education: National Breakfast Program - Cash Assistance * 10.553 N/A $ 5,739,813 National School Lunch Program - Cash Assistance * 10.555 N/A 12,138,254 Fresh Fruits and Vegetables Program - Cash Assistance * 10.582 N/A 254,196 USDA Donated Commodities - Non-Cash Assistance 10.655 N/A 1,428,291 Total Passed Through State Department of Education $ 19,560,554 TOTAL DEPARTMENT OF AGRICULTURE $ 19,560,554 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 43,889,983

* Clustered Programs as required by Compliance Supplement March, 2011.

169 United Independent School District

UNITED INDEPENDENT SCHOOL DISTRICT Laredo, Texas

NOTES ON ACCOUNTING POLICIES FOR FEDERAL AWARDS For the Year Ended August 31, 2012

1. The District utilizes the fund types specified in the Texas Education Agency Resource Guide.

Special Revenue Funds – are used to account for resources restricted to, or designated for, specific purpose by a grantor. Federal and state financial assistance generally is accounted for in a special revenue fund. Generally, unused balances are returned to the grantor at the close of specified project periods.

Enterprise Funds – The Nutrition Cluster is accounted for in the Enterprise Fund. The District’s management intends for the food service operation to be self-sustaining. No operating transfers are made from the General Fund.

2. The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. The Special Revenue Funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increase (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and accordingly, when such funds are received, they are recorded as deferred revenues until earned.

The Enterprise Fund is maintained on the accrual basis of accounting. Revenues are recognized when earned, and expenses are recognized when incurred.

3. The period of availability for federal grants for the purpose of liquidation of outstanding obligations made on or before the ending date of the federal project period extended 30 days beyond the federal project period ending date, in accordance with provisions in Section H. Period of Availability of Federal Funds, Part 3, OMB Circular A-133 Compliance Supplement.

4. Expenditures for the Nutrition Cluster Program and the Summer Federal Program are not specifically attributable to the federal revenues sources and are shown on this schedule in an amount equal to revenue for balancing purposes only.

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