Angolano & Company Union School... · Waterbury Duxbury Union School District Table of Contents (continued) For The Year Ended June 30, 2010 Page Number Schedule 5 Combining Statement

January 13, 2011 Waterbury -Duxbury Union School District Att: Michelle Baker, Bus. Mgr. 1673 Main Street, Ste. A Waitsfield, VT 05673 Dear Michelle: I have electronically forwarded the final financial statements for Waterbury -Duxbury Union School District as of and for the year ended June 30, 2010. In addition I will be mailing you 15 bound copies. If you are thinking of putting our audit report into your Town Report, auditing standards provides you with three options: - You may include the entire audit report from page one through the last page; - You may include pages 1 through Schedule 1; - You can put a statement in that you were audited and that the audit is available at ___________ and omit our audit report completely. If you have any questions or need assistance, please do not hesitate to call us. Sincerely, Angolano & Company Enclosures

Angolano & Company

Waterbury -Duxbury Union School District Financial Statements

For The Year Ended June 30, 2010

Waterbury Duxbury Union School District Table of Contents

For The Year Ended June 30, 2010 Page Number -- Independent Auditors’ Report 3-4 -- Management Discussion and Analysis 5 EXHIBIT I Statement of Net Assets – Government -Wide 6 EXHIBIT II Statement of Activit ies – Government -Wide 7 EXHIBIT III Combined Balance Sheet – All Fund Types – 8 Fund Base -- Reconciliation of the Balance Sheet to the Statement 9 of Net Assets – Governmental Funds EXHIBIT IV Combined Statement of Revenues, Expenditures and 10 Changes in Fund Balances – All Governmental Fund Types – Fund Base -- Reconciliation of the Statement of Revenues, Expenditures 11 and Changes in Fund Balances of Governmental Funds to the Statement of Activities EXHIBIT V Statement of Revenues, Expenses and Changes in Retained 12 Earnings – Proprietary Fund Type – Enterprise Fund – Food Program EXHIBIT VI Statement of Cash Flows – Proprietary Fund Type – 13 Enterprise Fund – Food Program -- Notes to the Financial Statements 14-33 Schedule 1 Statement of Revenues, Expenditures and Changes in 34-56 Fund Balances – Budget and Actual – General Fund Schedule 2 Combining Balance Sheet – Special Revenue Funds 57-59 Schedule 3 Combining Statement of Revenues, Expenditures and 60-62 Changes in Fund Balances – Special Revenue Funds Schedule 4 Combining Balance Sheet – Capital Project Funds 63

Waterbury Duxbury Union School District Table of Contents (continued)

For The Year Ended June 30, 2010 Page Number Schedule 5 Combining Statement of Revenues, Expenditures and 64 Changes in Fund Balances – Capital Project Funds Schedule 6 Statement of Changes in Assets and Liabilities – Fiduciary 65 Fund Type – Agency Funds -- Report on Compliance and on Internal Control Over 66-67 Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

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Independent Auditors’ Report To The School Board Waterbury Duxbury Union School District We have audited the accompanying financial statements of the governmental activities, the business -type activities, and the aggregate remaining fund information of Waterbury Duxbury Union School District , Vermont, as of and for the year ended June 30, 2010, which collectively comprise the Union School District ’s basic financial statements as listed in the table of contents. We have also audited the financial statements of each of the Union School District ’s nonmajor governmental and fiduciary funds presented as supplementary information in the accompanying combining and individual fund financial statements as of and for the year ended June 30, 2010, as listed in the table of contents. These financial statements are the responsibili ty of Waterbury Duxbury Union School District ’s management. Our responsibility is to express an opinion 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. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 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, and the aggregate remaining fund information of Waterbury Duxbury Union School District , Vermont, as of June 30, 2010, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America . In addition, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each nonmajor governmental and fiduciary fund of Waterbury Duxbury Union School District , as of June 30, 2010, and the respective changes in financial position and cash

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flows, where applicable, 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 December 23, 2010 on our consideration of Waterbury Duxbury Union School District ’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordan ce with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. The Management’s Discussion and Analysis and budgetary comparison information on pages 5 and 34 through 56 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of managem ent regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise Waterbury Duxbury Union School District ’s basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Angolano & Company Shelburne, Vermont Firm Registration Number 92-0000141 December 23, 2010

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Angolano & Company

Waterbury-Duxbury Union School District EXHIBIT IStatement of Net Assets

Government-WideJune 30, 2010

Governmental Business-TypeActivities Activities Total

ASSETS: Cash and Cash Equivalents 683,629$ 683,629$ Accounts Receivable - State 13,242 13,242 Accounts Receivable - Supervisory Union 87,908 87,908 Accounts Receivable - Other 28,670 1,436$ 30,106 Due From Other Funds 3,002 3,002 Prepaid Expenses 78,665 78,665 Inventory 2,609 2,609 Capital Assets, net (Note 4) 13,077,696 8,075 13,085,771

Total Assets 13,969,810 15,122 13,984,932

LIABILITIES: Cash Overdraft 134,290 134,290 Accounts Payable - Supervisory Union 4,187 4,187 Accounts Payable - Other 254,183 4,318 258,501 Accrued Expenses 48,839 952 49,791 Accrued Interest Payable 24,691 24,691 Due To Other Funds 12,951 12,951 Capital Leases Payable 41,394 41,394 Long-Term Liabilities (Note 8): Due Within One Year 504,000 504,000 Due in More Than One Year 5,971,000 - 5,971,000

Total Liabilities 6,995,535 5,270 7,000,805

NET ASSETS: Investment in Capital Assets, net of related debt 6,561,302 8,075 6,569,377 Restricted for Capital Projects 321,443 321,443 Restricted for Other Purposes 110,852 110,852 Unrestricted (19,322) 1,777 (17,545)

Total Net Assets 6,974,275$ 9,852$ 6,984,127$

The accompanying notes are an integral part of these financial statements- 6 -

Waterbury-Duxbury Union School District EXHIBIT IIStatement of Activities

Government-WideFor The Year Ended June 30, 2010

Net (Expense) RevenueProgram Revenues and Changes in Net Assets

Charges for Operating Governmental Business-TypeExpenses Services Grants Activities Activities Total

Instructional: Direct Services 5,968,255$ 642,612$ (5,325,643)$ (5,325,643)$ Support Services: Student Services 622,675 (622,675) (622,675) Instructional Services 368,131 (368,131) (368,131) General Administrative Services 234,151 (234,151) (234,151) Area Administrative Services 567,718 (2,628) (570,346) (570,346) Fiscal Services 136,214 (136,214) (136,214) Building Operations and Maintenance 760,721 (155,004) (915,725) (915,725) Transportation 353,090 105,652 (247,438) (247,438) Other Support Services 500 500 - - Operation of Noninstructional Services: Food Services 293,508 269,218$ (24,290)$ (24,290) Construction Services 195,004 - 195,004 - - -

Total 9,499,967$ 269,218$ 786,136$ (8,420,323) (24,290) (8,444,613)

General Revenues: State Revenues not Restricted to Specific Programs 8,515,479 8,515,479 Federal Revenues not Restricted to Specific Programs 19,998 19,998 Private Revenues not Restricted to Specific Programs 67,286 67,286 Investment Earnings 108,878 108,878 Rentals 2,733 2,733 Refunds and Reimbursements 144,508 144,508 Miscellaneous 24,882 24,882 Transfers (20,000) 20,000 -

Total General Revenues 8,863,764 20,000 8,883,764

Excess (Deficiency) of Revenues Over Expenses 443,441 (4,290) 439,151 Net Assets - Beginning 6,530,834 14,142 6,544,976

Net Assets - Ending 6,974,275$ 9,852$ 6,984,127$


Waterbury-Duxbury Union School District EXHIBIT IIICombined Balance Sheet

All Fund Types - Fund BaseJune 30, 2010

Proprietary FiduciaryGovernmental Fund Types Fund Type Fund Type

Special Capital TotalsGeneral Revenue Project Enterprise Agency (Memorandum

Fund Fund Funds Fund Funds Only)

ASSETS:Current Assets: Cash 436,961$ 246,668$ 52,075$ 735,704$ Accounts Receivable - State 5,742 7,500$ 13,242 Accounts Receivable - Supervisory Union 53,980 33,928 87,908 Accounts Receivable - Other 1,372 27,298 1,436$ 30,106 Due From Other Funds 31,444 149,811 3,002 9,949 194,206 Prepaid Expenses 78,665 78,665 Inventory - - - 2,609 - 2,609

Total Current Assets 576,720 100,170 396,479 7,047 62,024 1,142,440

Other Assets: Fixed Assets - net - - - 8,075 - 8,075

Total Other Assets - - - 8,075 - 8,075

TOTAL ASSETS 576,720$ 100,170$ 396,479$ 15,122$ 62,024$ 1,150,515$

LIABILITIES AND FUND EQUITIES:Liabilities: Cash Overdraft 134,290$ 134,290$ Accounts Payable - Supervisory Union 4,187 4,187 Accounts Payable - Other 237,358 16,825$ 4,318$ 60$ 258,561 Accrued Expenses 48,839 952 49,791 Due to Other Funds 59,363 54,099 80,744$ 194,206 Amount Held for Agency Funds - - - - 61,964 61,964

Total Liabilities 484,037 70,924 80,744 5,270 62,024 702,999

Fund Equity: Fund Balances: Unreserved 12,834 (1,757) (5,708) 5,369 Reserved 79,849 31,003 321,443 432,295 Retained Earnings - - - 9,852 - 9,852

Total Fund Equities 92,683 29,246 315,735 9,852 - 447,516

TOTAL LIABILITIES AND FUND EQUITIES 576,720$ 100,170$ 396,479$ 15,122$ 62,024$ 1,150,515$


Waterbury Duxbury Union School District Reconciliation of the Balance Sheet to the Statement of Net Assets

Governmental Funds June 30, 2010

Fund Balances – total governmental funds $ 437,664 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds: Governmental capital assets 15,814,244 Less accumulated depreciation (2,736,548) Bonds payable and contractual obligations have not been included in the governmental fund financial statements. Bonds Payable (6,475,000) Capital Lease Obligations (41,394) Interest is accrued on outstanding debt in the government -wide financial statements, whereas in the governmental fund financial statements as interest expenditure is reported when due. (24,691) Net Assets of Governmental Activit ies $ 6,974,275

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Waterbury-Duxbury Union School District EXHIBIT IVCombined Statement of Revenues, Expenditures and

Changes in Fund BalancesAll Governmental Fund Types - Fund Base


Governmental Fund TypesSpecial Debt Totals

General Revenue Capital Service (MemorandumFund Fund Projects Fund Only)

REVENUES: Investment Income 39,706$ 69,172$ 108,878$ Lawsuit Settlement 144,508 144,508 Rental Income 2,733 2,733 Miscellaneous 24,882 24,882 Private/Local 65,462 69,691$ 135,153 State 8,361,852 4,431 259,279 8,625,562 Federal 506,636 124,176 - - 630,812

TOTAL REVENUES 9,001,271 198,298 472,959 -$ 9,672,528

EXPENDITURES: Direct Services 5,408,087 158,040 5,566,127 Support Services: Students 613,695 613,695 Instructional Staff 341,189 341,189 General Administration 234,151 234,151 Area Administration 561,366 561,366 Fiscal Services 136,214 136,214 Operation & Maintenance of Building 681,183 40,000 721,183 Transportation 353,090 353,090 Food Services 500 500 Construction Services 195,004 195,004 Debt Service: Interest Charges 319,569 319,569 Principal Retirement - - - 495,000 495,000

TOTAL EXPENDITURES 8,328,975 198,540 195,004 814,569 9,537,088

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 672,296 (242) 277,955 (814,569) 135,440

OTHER FINANCING SOURCES (USES): Transfers In 75,000 814,569 889,569 Transfers Out (909,569) - - - (909,569)

EXCESS OF REVENUES AND OTHERSOURCES OVER (UNDER)EXPENDITURES AND OTHER USES (237,273) (242) 352,955 - 115,440

FUND BALANCE, JULY 1, 2009 329,956 29,488 (37,220) - 322,224

FUND BALANCE, JUNE 30, 2010 92,683$ 29,246$ 315,735$ -$ 437,664$


Waterbury Duxbury Union School District Reconciliation of the Statement of Revenues, Expenditures , and Changes in Fund Balances of

Governmental Funds to the Statement of Activities For The Year Ended June 30, 2010

Net Changes in fund Balances – total governmental funds $ 115,440 Amount reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is depreciated over their estimated useful lives: Expenditures for capital assets 0 Less current year depreciation (199,457) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of Net Assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. Repayment of notes 9,000 Repayment of bonds 495,000 Repayment of capital lease obligation 21,500 Expense reported in the Statement of Activities does not require the use of current financial resources and is therefore not reported as expenditures in governmental funds: Accrued Interest Change 1,958 Change in Net Assets of Governmental Funds $ 443,441

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Waterbury-Duxbury Union School District EXHIBIT VStatement of Revenues, Expenditures and

Changes in Retained EarningsProprietary Fund Type - Enterprise Fund

Food ProgramFor The Year Ended June 30, 2010

Operating Revenues: Sales 170,350$ Other 501

Total Operating Revenues 170,851$

Operating Expenses: Salaries and Benefits 150,886 Equipment Repair 1,694 Supplies and Food 111,495 Utilities 3,314 Commodities 19,311 Equipment 740 Depreciation 6,068

Total Operating Expenses 293,508

Operating Income (Loss) (122,657)

Non-Operating Revenue: Insurance Reimbursement State Sources: State Match 2,925 Child Nutrition Breakfast 452 Child Nutrition Other 542 Federal Sources: Restricted Grants: School Breakfast Program 12,024 School Lunch Program 63,113 Commodities 19,311

Total Non-Operating Revenue 98,367

Income (Loss) Before Transfers (24,290) Operating Transfers In (Out) 20,000

Net Income (Loss) (4,290)

Retained Earnings, July 1, 2009 14,142

Retained Earnings, June 30, 2010 9,852$


Waterbury-Duxbury Union School District EXHIBIT VIStatement of Cash Flows

Proprietary Fund Type - Enterprise FundFood Program


Cash Flows From Operating Activities: Received From Customers 170,108$ Payments To Employees and Fringe Benefits (149,934) Payments To Vendors and Supplies (133,024)

Net Cash Used By Operating Activities (112,850)$

Cash Flows From Noncapital Financing Activities: State Aid Received 103,438 Support From General Fund 9,412

Net Cash Used By Noncapital Financing Activities 112,850

Cash Flows From Capital and Related Financing Activities: None -

Cash Flows From Investing Activities: None -

Net Increase (Decrease) in Cash -

Cash, July 1, 2009 -

Cash, June 30, 2010 -$

Reconciliation of Operating Income (Loss) to Net Cash Used By Operating Activities:

Cash Provided From Operating Activities: Operating Income (Loss) (122,657)$ Adjustments to Reconcile Net Income to Cash Provided (Used) By Operating Activities: Depreciation 6,068$ (Increase) Decrease in Accounts Receivable - Other (743) Increase (Decrease) in Accounts Payable - Other 3,530 Increase (Decrease) in Accrued Expenses 952

Total Adjustments 9,807

Net Cash Provided (Used) By Operating Activities (112,850)$


Waterbury -Duxbury Union School District Notes to Financial Statements

For The Year Ended June 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Waterbury -Duxbury Union School District ("Union School District ") is organized as a public educational district under the applicable laws and regulations of the State of Vermont. It is governed by a Board of School Directors elected by registered voters of the District to provide public education to the member districts . Except where noted, the accounting policies conform to generally accepted accounting principles, as applicable to governmental units. The Union School District prepares its basic financial statements in conformity with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board (GASB) and other authoritative sources identified in the Statement on Auditing Standards No. 69 of the American Institute of Certified Public Accountants; and it complies with the requirements of the appropriated version of the Vermont Department of Education’s Handbook for Financial Account ing of Vermont School Systems (The Handbook). Reporting Entity: The schoolboard is elected by the public and it has the authority to make decisions, appoint administrators and managers, and significantly influence operations. It also has the primary accountability for fiscal matters. Therefore, Union School District is a financial reporting entity as defined by the Governmental Accounting Standards Board (“GASB”) in its Statement No. 14. There are no component units included within the reporting entity. 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 Waterbury -Duxbury Union School District ’s non-fiduciary activities with most of the Interfund activities removed. Governmental Activities include programs supported primarily by Taxes (collected by the Town on behalf of the State), State funds, grants and other intergovernmental revenues. The statement of activities demonstrates how other people or entities that participate in programs the Union School District operates have shared in the payment of the direct costs. 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 Union School District . The “grants and contributions” column includes amounts paid by organizations outside the Union School District to help meet the operational or capital requirements of a given function. If a revenue is not a program revenue, it is a general revenue used to support all of the Union School District ’s functions. Taxes are always general revenues. Interfund activities between governmental funds and proprietary funds appear as due to/due from on the governmental fund balance sheet and proprietary fund statement of net assets and as other

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Waterbury -Duxbury Union School Distric t Notes to Financial Statements (continued)

For The Year Ended June 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) resources and other uses on the governmental fund statement of revenues, expenditures and changes in fund balance and on the proprietary fund statement of revenues, expenses and changes in fund net assets. All Interfund transactions between governmental funds and internal service funds are eliminated on the government -wide statements. Interfund activities between governmental funds and fiduciary funds remain as due to/due from on the government -wide statement of activities. The fund financial statements provide reports on the financial condition and results of operations for three fund categories – governmental, proprietary, and fiduciary. Since the resources in the fiduciary funds cannot be used for Union School District operations, they are not included in the government -wide statements. The Union School District considers some governmental funds major and reports their financial condition and results of operations in a separate column. The major funds are: Governmental Fund Types:

- General Fund – The general fund is the Union School District ’s primary operating fund. It accounts for all financial resources except those required to be accounted for in another fund.

- Special Revenue Funds – The Union School District accounts for resources restricted to, or designated for, specific purposes by the Union School District or a grantor in a special revenue fund. Most federal and some State financial assistance is accounted for in a Special Revenue Fund and sometimes unused balances must be returned to the grantor at the close of specified project periods.

- Capital Project Fund – The proceeds from long-term debt financing and revenues and expenditures related to authorized construction and other capital asset acquisitions are accounted for in a capital projects fund.

- Debt Service Fund – The Union School District accounts for resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds in a debt service fund.

Proprietary Fund Types:

Propriet ary Fund – The Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating revenues result from providing goods and services in connection with a proprietary fund’s principal ongoing operations; they usually come from exchange or exchange -like transactions. All other revenues are nonoperating. Operating expenses can be tied specifi cally to the production of the goods and services, such as materials and labor and direct overhead. Other expenses are nonoperating.

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Waterbury -Duxbury Union School District Notes to Financial Statements (continued)

For The Year Ended June 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fiduciary Funds (Agency Funds):

Agency Funds – The Agency Funds are used to account for assets held by the Union School District as an agent for individuals, private organizations, other funds and/or governmental units.

- Agency funds are custodial in nature and do not involve measurements of results of operations.

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 and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental funds 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 (revenues and other financing sources) and decreases (expenditures and other financing uses). The modified accrual basis of accounting recognizes revenues in the accounting period in which they become available and measurable 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 the obligations are expected to be liquidated with expendable available financial resources. The Union School District considers all revenues available if they are collectible within 60 days after year end 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

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For The Year Ended June 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) by the end of the project period, grantors sometimes require the Union School District to refund all or part of the unused amount. The Proprietary Fund Types and Fiduciary Funds are accounted for on a flow of economic resources measurement focus and 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 Union School District applies all GASB pronouncements as will 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. Other Account ing Policies: Cash and Cash Equivalents: For purposes of the statement of cash flows for proprietary and similar fund-types, the Union School District considers highly liquid investments to be cash equivalents if they have a maturity of six months or less when purchased . Interfund Receivables and Payables: Activities between funds that are representative of lending or borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to/from other funds”. All other outstanding balances between funds are also reported as “due to/from other funds”. Accounts Receivable: The accounts receivable balances at year end are from governmental entities, except in the proprietary funds which may have some receivables from individuals, and no allowance for doubtful accounts is considered necessary. Inventory: Inventories consist of expendable items held for consumption. They are valued at cost on a first-in, first-out basis. In the governmental funds, the cost of inventories is recorded as an expenditure when individual items are purchased. Reported inventories are equally offset by a fund balance reserve to indicate that they do not constitute “available spendable resources” even though they are a component of net current assets.

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For The Year Ended June 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Prepaid Items: Certain payments to vendors reflect costs applicable to future periods. In the fund based financial statements , the cost of prepaid items is recorded as an expenditure when the payments are made. In the government -wide financial statements and the proprietary funds, these items are recorded as prepaid items. Capital Assets: Capital assets, which include land, buildings, furniture , and equipment , are reported in the applicable governmental activities column in the governmental wide financial statements. Capital assets are defined by the Union School District as assets with an initial, individual cost of $5,000 or more 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. Land Improvements, buildings, furniture and equipments of the Union School District are depreciated using the straight line method over the estimated useful lives with a full year of depreciation taken in the year acquired and none taken in the year of disposal. Long-term Debt: In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net assets. The face amount of debt issued is reported as other financing sources. Budgets: The Union School District is required by state law to adopt a budget for the General Fund. The budget is presented on the modified accrual basis of accountin g which is consistent with generally accepted accounting principles (“GAAP”). The operating budget is prepared by the School District’s administration with direction from the School Board and assistance from the Superintendent and Business Manager of the Washington West Supervisory Union and approved by the Waterbury -Duxbury Union School District School Board at a properly warned meeting for presentation to the voters. The operating budget includes proposed expenditures by line item and the means of financing them. The budget is approved by Union School District Voters at a properly warned annual meeting. The voters vote on the total expense amount and not on the individual line items presented in these financial statements. Encumbrances: Encumbrance accounting, under which purchase orders, contracts and other commitments for the

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For The Year Ended June 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General Fund, Special Revenue Funds, and Capital Projects Fund. Encumbra nces are not liabilities and, therefore, should not be recorded as expenditures until receipt of material or service. For budgetary purposes, appropriations lapse at fiscal year-end. The Union School District has elected to treat its encumbrances as liabilities for budgetary control purposes. Net Assets and Fund Balance: Government -Wide Financial Statements: When the Union School District incurs an expense for which it may use either restricted or unrestricted net assets, it uses restricted net assets first unless unrestricted net assets will have to be returned because they were not used. Net assets on the Statement of Net Assets include the following: Investment in Capital Assets, net of Related Debt – The component of net assets reports the difference between capital assets less both the accumulated depreciation and the outstanding balance of debt, excluding unspent proceeds, that is directly attributable to the acquisition, construction or improvement of these capital assets. Restricted for Other Purposes – The component of net assets that reports the amount of revenue from a federal, state, or other program in excess of expenditures. These funds are restricted for use of the related federal, state or other program. Restricted for Capital Projects – The component of net assets that reports the amount of revenue from bond proceeds, grants, and special assessments in excess of expenditures. These funds are restricted for the construction or acquisition of capital assets. Unrestricted – The difference between the assets and liabilities that is not reported in net Assets Invested in Capital Assets, net of Related Debt, Net Assets Restricted for Other Purposes, or Net Assets Restricted for Capital Projects. Fund Based Financial Statements: In the fund financial statements, governmental funds report fund balances as either a reserved fund balance or an unreserved fund balance. Reserved Fund Balance – That portion of fund balance which is not available for appropriation or which has been legally segregated for a specific purpose.

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For The Year Ended June 30, 2010 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Unreserved Fund Balance – Composed of designated and undesignated portions. The undesignated portion of the unreserved fund balance represents that portion of fund balance that is available for budgeting in future periods. Function and Object Codes: Function and object codes refer to the account code structure prescribed by the Vermont Department of Education. The Vermont Department of Education requires Union School District to use these codes in order to insure accuracy in building and maintaining a statewide database for policy development and funding plans. Memorandum Only Columns: The total columns are captioned "memorandum only" because they do not represent consolidated financial information and are presented only to make financial analysis easier. Data in these columns do not present financial position, results of operations, or cash flows in accordance with GAAP. Interfund eliminations have not been made in the aggregation of this data. NOTE 2 - CASH AND REPURCHASE AGREEMENTS Cash deposits with financial institutions at June 30th amounted to $735,704. As major revenues are received during the year bank deposits may temporarily exceed insured limits . The cash deposits held at financial institutions and cash on hand can be categorized according to four levels of risk. These four levels of risk are as follows:

Category 1 Deposits which are insured or collateralized with securities held by the Union School District or by its agent in the Union School District ’s name. (repurchase agreements)

Category 2 Deposits which are collateralized with securities held by the pledging financial institution’s trust department or agent in the Bank’s name.

Category 3 Private commercial insurance protection or letter of credit for funds in excess of FDIC limits.

Category 4 Deposits which are not collateralized or insured. (includes cash on hand) The Union School District uses collateralization agreements to protect deposits not otherwise insured by the FDIC and/or SIPC.

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Waterbury -Duxbury Union School District Notes to Financi al Statements (continued)

For The Year Ended June 30, 2010 NOTE 2 - CASH AND REPURCHASE AGREEMENTS (CONTINUED) Balances held in each area are as follows: Carrying Bank Amount Balance - Insured (FDIC) and/or (SIPC) $302,074 $ 301,114 - Category 1 0 0 - Category 2 433,630 710,365 - Category 3 0 0 - Category 4 0 0 Total deposits $735,704 $1,011,479 The difference between the book balance and bank balance is due to reconciling items such as deposits in transi t and outstanding checks. Due to higher cash flows at certain times during the year, the amount of uninsured and not collateralized cash could have been much higher than at year end. Collateralization agreements of $710,365 are securities held by the bank's trust department or agent in the bank’s name. Securities consist of municipal bonds, U.S. Government obligations and U.S. Government Agency Bonds. NOTE 3 - INTERFUND RECEIVABLES In compliance with GASB 1300.109 Union School District does not maintain separate bank accounts for each fund, unless it is required by law, or grant agreement. The composition of amounts due to and from other funds as of June 30, 2010, is as follows: Fund Financial Statements: Receivable Fund Payable Fund Amount Special Revenue Fund: Title III ELL Grant General Fund $ 36 Water Damage General Fund 21,973 Tobacco Grant General Fund 111 ELF – IBM Grant General Fund 1,000 Mobil Grant General Fund 466 Energy Equipment General Fund 7,500 Art/Music Enhancement General Fund 200 Banners General Fund 97

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For The Year Ended June 30, 2010 NOTE 3 - INTERFUND RECEIVABLES Fund Financial Statements: Receivable Fund Payable Fund Amount Special Revenue Fund (continued): LEGO Robotics General Fund $ 61 Capital Project Fund: Construction Project General Fund 149,811 Agency Fund: Waterbury School District General Fund 4,225 Duxbury School District General Fund 5,724 Enterprise Fund: Food Program General Fund 3,002 Special Revenue Fund: General Fund AYP Grant 17,211 General Fund Student Assistance 9,361 General Fund Title IV Drug Free 3,817 General Fund Refugee Grant 25 General Fund Safe Routes to School 1,412 General Fund Title I – ARRA 19,206 General Fund School Wide Program 3,067 Capital Project Fund: General Fund Maintenance Reserve 75,036 General Fund Building Renovation 5,708 Total $329,049 Government -Wide Financial Statements: Receivable Fund Payable Fund Amount Business Type Governmental Type $ 3,002 General Purpose Trust Government al Type 9,949 Total $ 12,951 NOTE 4 – CAPITAL ASSETS Capital activity for the Union School District for the year ended June 30, 2010, was as follows:

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For The Year Ended June 30, 2010 NOTE 4 – CAPITAL ASSETS (CONTINUED) . Primary Government . Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets not being depr. Construction in Progress $ 8,097,360 $ 0 $ 0 $ 8,097,360 Total capital assets not being depreciated 8,097,360 0 0 8,097,360 Other Capital Assets: Land Improvements 445,416 0 0 445,416 Buildings 6,673,380 0 0 6,673,380 Building Improvements 300,516 0 0 300,516 Furniture and Equipment 297,572 0 0 297,572 Total other capital assets at historical costs 7,716,884 0 0 7,716,884 Less accumulated depreciation: Land Improvements 295,934 22,270 0 318,204 Buildings 1,810,840 131,420 0 1,942,260 Building Improvements 300,516 0 0 300,516 Furniture and Equipment 129,801 45,767 0 175,568 Total accum. depr. 2,537,091 199,457 0 2,536,548 Other Capital Assets, Net 5,179,793 (199,457 ) 0 4,980,336 Governmental activities Capital Assets, Net $13,277,153 $(199,457) $ 0 $13,077,696 Business -type activities: Furniture and Equipment $ 124,100 $ 0 $ 0 $ 124,100 Less accum. Depr. 109,957 6,068 0 116,025 Business -type activities Capital Assets, Net $ 14,143 $ (6,068) $ 0 $ 8,075 Depreciation expense was charged to functions as follows: Governmental activities: Direct Services $153,659 Support Services: Students 2,628 Instructional Staff 7,885

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For The Year Ended June 30, 2010 NOTE 4 – CAPITAL ASSETS (CONTINUED) General Administration $ 0 Area Administration 2,628 Fiscal Services 0 Operation and Maintenance of Plant 32,657 Transportation 0 Other Support Services 0 Total governmental activities depreciation expense $199,457 NOTE 5 - ACCRUED VACATION & LEAVE TIME Accrued vacation and leave time represent vested time earned by employees but not used. If the employee were to leave, this accrued time must be paid. Therefore, it is a liability to the Union School District at June 30, 2010. Teachers do not receive paid vacations, and are paid only for the number of days they are required to work each year. Administrative and maintenance personnel are granted vacation leave in varying amounts . No liability is shown in the fund based financial statement. The School District has no liability for unused vacation pay since all vacation is used or lost if not taken by the end of the year. Vacation pay is charged to operations when taken by the employee of the Union School District . NOTE 6 - SICK LEAVE It is the Union School District 's policy to permit employees to accumulate earned but unused sick pay benefits. Such leave benefits do not vest under the Union School District ’s policy, accordingly benefits must be used during employment. Since the employees’ accumulating rights to receive compensation for future absences are contingent upon the absences being caused by future illnesses and such amounts cannot be reasonably estimated, a liability for unused sick leave is not recorded in the financial statements. Teachers: Effective July 1, 2007, all returning teachers shall receive the maximum entitlement of ninety (90) paid sick days for the 2007-2008 school year; thereafter, such teachers shall be entitled to twenty (20) paid sick leave days per year, accumulating to a maximum entitlement of ninety (90) days at any given time. Support Staff: All comprehensive leave days are paid unless otherwise stated and shall be prorated for a

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For The Year Ended June 30, 2010 NOTE 6 - SICK LEAVE (CONTINUED) fraction of the fiscal or school year as appropriate in the first year of employment. Each employee is credited with a certain number of comprehensive leave days at the beginning of each fiscal or school year. Support staff can be credited with up to a maximum of 90 comprehensive leave days at the beginning of the fiscal year. Leave days do not accumulate from year to year but are automatically renewed each year at the level corresponding to the number of years of service for each employee up to the maximum days allowed. There are no sick leave buybacks or sick day buyouts. NOTE 7 - RETIREMENT INCENTIVES From time to time the Board may desire to offer an early retirement incentive to teachers. The decision to offer such an incentive is at the Board’s discretion. No such incentive was offered for the 2009-2010 school year. NOTE 8 - LONG-TERM DEBT The Union School District issues general obligation bonds and notes to finance the acquisition and construction of major capital facilities, renovations, and equipment purchases. General obligation bonds are direct obligations and pledge the full faith and credit of the issuing entity. These bonds are generally issued as 5 to 20-year serial bonds with equal amounts of principal maturing each year. The following is a summary of general obligation bonds & notes: Balance Balance July 1, 2009 Borrowings Retirements June 30, 2010 Vermont Municipal Bond Bank, bond payable, interest at 5.672% interest paid semi-annually, principle of $205,000 due on December 1st of each year until 2009, then $200,000 due on December 1st of each year until 2016, originally borrowed $4,060,000 on July 11, 1998 for construction of building $1,600,000 $ 0 $200,000 $1,400,000

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For The Year Ended June 30, 2010 NOTE 8 - LONG-TERM DEBT (CONTINUED) Balance Balance July 1, 2009 Borrowings Retirements June 30, 2010 Vermont Municipal Bond Bank, bond payable, interest at 4.01% interest paid semi-annually, principle of $15,000 due on December 1st of each year until 2014, then $10,000 due on December 1st of each year until 2015, originally borrowed $150,000 on July 15, 2005 for roof improvements $ 85,000 $ 0 $ 15,000 $ 70,000 Vermont Municipal Bond Bank, bond payable, interest at 4.508% interest paid semi-annually, principle of $280,000 due on December 1st of each year until 2021, then $275,000 due on December 1st of each year until 2027, originally borrowed $5,565,000 on July 26, 2007 for building renovations. 5,285,000 0 280,000 5,005,000 Chittenden Bank, current expense note payable, interest at 2.50%, interest paid at maturity, principle of $9,000 due on May 6, 2010. 9,000 0 9,000 0 Total Long-Term Debt $6,979,000 $ 0 $504,000 $6,475,000 The annual debt service requirement to maturity for general obligation bonds and notes including interest are as follows: Principal Interest Total During the year ended June 30, 2011 $ 504,000 $ 296,290 $ 800,290 2012 495,000 272,711 767,711 2013 495,000 248,832 743,832 2014 495,000 224,669 719,669 2015 490,000 200,351 690,351 Thereafter 3,960,000 1,098,938 5,058,938 Totals $6,475,000 $2,341,791 $8,816,791

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For The Year Ended June 30, 2010 NOTE 9 - CAPITAL LEASES On July 1, 2009 the Waterbury -Duxbury Union School District entered into a non-cancellable lease agreement with Apple for the lease of iMac computers. This lease agreement qualifies as a capital lease, for accounting purposes and thus, has been recorded at the present value of the future minimum lease payments at the inception of the lease in the general long-term debt account group. The total amount due is $64,700.43, to be paid in yearly installments of $21,566.81 over 3 years with a buyout at the end of $1. The future minimum lease obligations and the net present value of these minimum lease payments are as follows: During the year ended June 30, 2011 $21,567 2012 21,566 Thereafter 0 Total minimum lease payments 43,133 Less amount representing interest 1,739 Present value of minimum lease payments $41,394 Interest rate on the capitalized lease is approximately 2.8 percent. NOTE 10 - RESERVED FUND BALANCES (Fund Financial Statements) Reserved fund balances represent amounts that must be used for specific purposes within that fund and cannot be spent otherwise without prior approval of funding source. Reservations at year end are for the following: General Fund: Fiscal Year 10-11 Budget $ 79,849 Special Revenue Funds: Title III ELL Grant $ 36 Water Damage 21,973 Tobacco Grant 7,170 ELF IBM Grant 1,000 Mobil Grant 466 Art/Music Enrichment 200 Banners 97 LEGO Robotics 61 Total $ 31,003

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For The Year Ended June 30, 2010 NOTE 10 - RESERVED FUND BALANCES (Fund Financial Statements) (CONTINUED) Capital Projects Fund: Construction Project $149,811 Maintenance Reserve 171,632 Total $321,443 NOTE 11 – NET ASSETS RESTRICTED (Government -Wide Financial Statements) Restricted net asset balances represent amounts that must be used for specific purposes and cannot be spent otherwise without prior approval of the funding source. Restrictions at year end are for the following: Net Assets Restricted For Capital Projects: Construction Project $149,811 Maintenance Reserve 171,632 Total $321,443 Net Assets Restricted For Other Purposes: Fiscal Year 10-11 Budget $79,849 Title III ELL Grant 36 Water Damage 21,973 Tobacco Grant 7,170 ELF IBM Grant 1,000 Mobil Grant 466 Art/Music Enrichment 200 Banners 97 LEGO Robotics 61 Total $110,852 NOTE 12 – TRANSFERS IN THE FUND BASED FINANCIAL STATEMENTS The Union School District occasional ly transfers funds to cover expenditur es made in one fund for which the revenues are in another fund. The following transfers were made during the year. Funds of $75,000 were transferred from the General Fund to the Capital Project Fund – Maintenance Reserve to assist with operating expenses . Funds of $20,000 were transferred from the General Fund to the Enterprise Fund – Food Program for the purpose of subsidizing operations.

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For The Year Ended June 30, 2010 NOTE 13 - PENSIONS VERMONT TEACHERS ’ RETIREMENT SYSTEM All of the teachers employed by Union School District participate in the Vermont Teachers' Retirement System ("TRS"), a statewide multiple -employer public employee retirement system covering all teachers in local school districts within the State of Vermont. The Vermont State statutes provide the authority under which benefit provisions and the State's obligation to contribute are established. Required contributions to the system are made by the State of Vermont based upon a valuation report prepared by the System's actuary. TRS is a cost sharing public employee retirement system with one exception: all risks and costs are not shared by the Union School District but are the liability of the State of Vermont. TRS is funded through state and employee contributions and the Union School District has no legal obligation for paying benefits. The Vermont State Teachers Retirement System estimates the contributions on behalf of the Union School District 's employees included in the teacher's retirement plan as required by Government Accounting Standards Board (GASB) Statement 24 to be 7.41% or approximately $287,796 . Vesting occurs upon reaching five years of creditable service. Normal retirement requires the employee to be either 62 years of age or have 30 years of service. A member may receive a reduced benefit at age 55 with 10 or more years of service. A member that has 10 or more years of service and leaves teaching before age 55 is entitled to a vested retirement benefit payable at age 62 or a reduced amount at age 55. Contributions by the employees are 3.54% of gross earnings and are withheld pre income tax by the Union School District . Such withholdings totaled $135,217 during the year and were paid by the Union School District to the State of Vermont. The Union School District has no other liability under the plan. The Union School District 's total payroll for all employees during the year was $5,041,979 , with $3,819,712 of such amount related to employees covered by the retirement plan. Additional information and ten-year historical trend information can be obtained from the separately issued Vermont State Teachers' Retirement System Comprehensive Annual Financial Report. VERMONT MUNICIPAL EMPLOYEES' RETIREMENT SYSTEM Employees other than Teachers are eligible to participate in the Vermont Municipal Employees' Retirement System ("VMERS") providing they work a minimum of 30 hours per week for the

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For The Year Ended June 30, 2010 NOTE 13 – PENSIONS (CONTINUED) VERMONT MUNICIPAL EMPLOYEES' RETIREMENT SYSTEM (CONTINUED) school year employee or a minimum of 24 hours per week for a calendar year employee. There are three levels of contributions and benefits in the System called Group A, Group B, Group C and Group D. The Union School District participates in Group B. Normal retirement for Group A members is age 65 and the completion of 5 years of creditable service, or age 55 and completion of 35 years of creditable service . Normal retirement for Group B members is age 62 and the completion of 5 years of creditable service , or age 55 and completion of 30 years of creditable service . Normal retiremen t for Group C and D members is age 55 and the completion of 5 years of creditable service. A member may receive reduced benefits at age 55 if they have 5 years of service and have made contributions for at least 2.5 years. The System is an actuarial reserve, joint-contributory program. Both the members and the Union School District make contributions to the fund according to the following schedule: Group A Group B Group C Group D Employees' Contributions (% of gross wages) 2.5% 4.5% 9.0% 11.0% School District 's contributions (% of gross wages) 4.0% 5.0% 6.0% 9.0% There is a municipal defined contribution plan option with a 5% withholding and a 5% match. Employee contributions are withheld pre income tax by the Union School District and are remitted to the State of Vermont. Such withholdings totaled $40,373 during the year. The Union School District contributed $44,859 during the year. The Union School District's total payroll for all employees during the year was $5,041,979, with $897,172 of such amount related to employees covered by the Vermont Municipal Employees' Retirement System. NOTE 14 - RISK MANAGEMENT The Union School District is exposed to various risks of loss related to limited torts; theft of, damage to, and destruct ion of assets; errors and omissions; injuries to employees; and natural disasters for which the Union School District carries commercial insurance . There have been no significant reductions in coverage from the prior year. Management believes such coverage is sufficient to preclude any significant uninsured losses to the Union School District . In addition, Waterbury -Duxbury Union School District is a member of Vermont School Boards Association (Association). The Association has set up two insurance Trust; Vermont School

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For The Year Ended June 30, 2010 NOTE 14 - RISK MANAGEMENT (CONTINUED) Board Insurance Trust, Inc. (VSBIT) for Workers Compensation , Multi-Line Intermunicipal School Program, and Unemployment Compensation Program , and the Vermont Education Health Initiative (VEHI) for Medical Benefits. VSBIT and VEHI are nonprofit corporations formed to provide insurance and risk management programs for Vermont school districts and is owned by the participating districts. The Trusts are not licensed insurance carriers and members are not protected by the Vermont Insurance Guaranty Association. To provide insurance coverage, VEHI has established a self-funded fully insured program in conjunction with Blue Cross and Blue Shield (BCBS). A portion of member contributions is used to purchase reinsurance and to fund a reserve required by the reinsurance. Contributions in excess of claims requirements, reserve fund requirements, reinsurance and administrative costs are returned to participants. The pooling agreement does not permit the pool to make additional assessments to its members. To provide unemployment coverage, VSBIT has established a separate trust of funds from member contributions to pay administrative costs, unemployment claims, and to provide excess reinsurance protection. Contributions are based on payroll expense and the previous two year unemployment compensation experience. In the event that total contributions assessed to and made by all members result in an actual or projected financial deficit and VSBIT is unable to meet its required obligations, the Program will be terminated with each members assessed their proportionate share of the deficit. To provide worker's compensation coverage, VSBIT has established a separate trust of funds from member contributions to pay administrative costs and workers compensation coverage. Contributions are based upon formulas applied to payroll expense. At the end of the coverage period, the members will be assessed or refunded any difference between estimated contributions and actual expenses. Multi-Line Intermunicipal School Program provides coverage for Property; Inland Marine and Boiler & Machinery; Crime; Commercial General Liability; Automobile/Garagekeepers; and Educators legal Liability. Annual contributions are based upon appropriate rates applicable to each Member; such rates are set based on recommendations of a qualified actuary, plus a proportionate share of all operational and administrative cost including excess reinsurance premiums incurred by the trust. In the event that total contributions assessed to and made by all members result in an actual or projected financial deficit and VSBIT is unable to meet its required obligations, the Program will be terminated with each members assessed their proportionate share of the deficit.

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For The Year Ended June 30, 2010 NOTE 14 - RISK MANAGEMENT (CONTINUED) The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of asset and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 15 - OPERATING LEASES On July 18, 2008 Waterbury -Duxbury Union School District entered into a lease agreement with Kelly Office Systems for the lease of 4 Xerox copiers. The total amount due is $49,800, to be paid in monthly installments of $1,037.50 over 4 years. The following is a schedule of future minimum lease payments under this lease. During the year ended June 30, 2011 $12,450 2012 12,450 2013 1,038 Thereafter 0 Total $25,938 Total lease payments made this year were $12,450 NOTE 16 - SUBSEQUENT EVENTS On July 1, 2010, the Union School District borrowed $750,000 in a Tax Anticipation Note from People’s United Bank at 1.95%. The interest and principal are due at maturity on June 30, 2011. NOTE 17 - COMMITMENTS On July 15, 2008 the Union School District entered into an agreement with Washington West Supervisory Union for contracted bus transportation services provided by First Student through June 30, 2011. The minimum annual cost to the Union School District for the year ending June 30, 2010 will be $297,822. The Union School District participates in various state and federal grant programs, which are governed by various rules and regulations of the grantor agencies. Costs charged to the

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For The Year Ended June 30, 2010 NOTE 17 – COMMITMENTS (CONTINUED) respective grant programs are subject to audit and adjustment by the grantor agencies; therefore, to the extent that the Union School District has not complied with the rules and regulations governing the grants, refunds of any money recovered may be required and the collectibility of any related receivable at June 30, 2010, may be impaired. In the opinion of the Union School District , there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants; therefore, no provision has been recorded in the accompanying combined financial statements for such contingencies. NOTE 18 - RELATED PARTY The Union School District has an ongoing financial responsibility to Washington West Supervisory Union as defined in GASB 14, paragraph 71. Through Washington West Supervisory Union's assessment process, the Union School District 's assessment can be increase d to cover a share of any prior year deficits and decreased to share in any prior year surpluses. Separate financial statements on Washington West Supervisory Union are available from Washington West Supervisory Union. Waterbury -Duxbury Union School District provides services to the following school and school districts: Duxbury School District Waterbury School District Each District has an ongoing financial responsibility to the Union School District as defined in GASB 14 paragraph 71. NOTE 19 - CONTINGENCY Annually, before November 1st, the Commissioner of the Vermont Department of Education notifies each school of its net cost per elementary and/or secondary pupil for the previous school year. If the School District received tuition students from other Vermont School Districts it must determine whether it overcharged the sending District. If it did, it must provide the overcharged District with a credit against current tuition or refund the overcharged amount. The Union School District received State construction aid in the past for various projects. In the event that the school building was to be sold, this construction aid would have to be repaid out of the proceeds. In the event that the School District sells the building, the State has a claim against the proceeds up to the amount of the aid provided.

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Waterbury-Duxbury Union School District Schedule 1Statement of Revenues, Expenditures and Changes

in Fund Balance - Budget and ActualGeneral Fund


VarianceFavorable

Object Budget Actual (Unfavorable)

REVENUES: Investment Income 100,000$ 39,706$ (60,294)$ Building Use - 2,733 2,733 Miscellaneous - 24,882 24,882 Private/Local: Medicaid 20,000 48,547 28,547 EPSDT 20,000 16,915 (3,085) State: Education Spending Grant 7,735,380 7,471,739 (263,641) Transportation Aid 109,223 105,652 (3,571) Mainstream Block Grant 210,023 210,023 - Intensive Reimbursement 552,129 511,481 (40,648) Early Essential Education 63,431 62,957 (474) Federal: ARRA Education Spending Grant - 263,641 263,641 Title I 110,000 147,341 37,341 IDEIA-B 128,262 94,764 (33,498) IDEIA-B Preschool 4,086 890 (3,196)

TOTAL REVENUES 9,052,534 9,001,271 (51,263)

EXPENDITURES:Elementary School: ARRA Education Spending Grant 1000: Salaries 101 - 124,093 (124,093) Energy Oil 624 - 48,713 (48,713)

Subtotal - 172,806 (172,806)

Regular Instruction 1100: Salaries 110 1,024,340 932,032 92,308 Mentoring Salaries 110 1,500 750 750 Report Card Committee Salaries 110 - 8,062 (8,062) Tutors/Summer Salaries 112 7,000 7,328 (328) Aides Salaries 115 5,791 6,884 (1,093) Temporary Salaries 120 20,300 18,415 1,885 Personal Day Reimbursement 125 2,069 2,316 (247) Health Insurance 210 193,454 203,225 (9,771) Section 125 Plan 211 2,409 331 2,078 Insurance Compensation 212 2,100 1,400 700





VarianceFavorable


Social Security 220 81,254$ 82,095$ (841)$ Life Insurance 230 5,111 4,875 236 Retirement 240 290 346 (56) Workers Compensation 250 5,566 6,527 (961) Unemployment Compensation 260 1,303 459 844 Professional Development 270 28,739 27,791 948 Dental Insurance 280 10,065 10,149 (84) Professional Services 330 500 270 230 Testing Services 332 1,250 405 845 Copier 410 9,759 9,007 752 Repairs and Maintenance 430 300 - 300 Travel 580 525 509 16 Supplies 610 30,800 26,736 4,064 Books and Periodicals 640 19,000 17,893 1,107 Equipment 730 900 7,022 (6,122) Dues and Fees 810 1,500 550 950

Subtotal 1,455,825 1,375,377 80,448

Regular Education - Early Education 1100: Salaries 110 27,542 42,612 (15,070) Aide Salaries 115 - 7,909 (7,909) Personal Day Reimbursement 125 65 108 (43) Health Insurance 210 1,455 - 1,455 Insurance Compensation 212 - 1,190 (1,190) Social Security 220 2,112 3,813 (1,701) Life Insurance 230 356 349 7 Workers Compensation 250 142 163 (21) Unemployment Compensation 260 157 12 145 Professional Development 270 915 - 915 Dental Insurance 280 117 2 115 Professional Services 330 120,000 118,548 1,452 Purchased Services 333 70 - 70 Supplies 610 440 435 5 Books and Periodicals 640 200 - 200

Subtotal 153,571 175,141 (21,570)

Art 1102: Salaries 110 49,357 49,357 - Personal Day Reimbursement 125 84 28 56 Insurance Compensation 212 560 560 -





VarianceFavorable


Social Security 220 3,782$ 3,821$ (39)$ Life Insurance 230 247 242 5 Workers Compensation 250 255 281 (26) Unemployment Compensation 260 60 20 40 Professional Development 270 1,190 2,427 (1,237) Supplies 610 2,585 2,822 (237) Books and Periodicals 640 175 - 175

Subtotal 58,295 59,558 (1,263)

ESL 1106: Salaries 110 42,148 42,148 - Personal Day Reimbursement 125 105 140 (35) Health Insurance 210 5,521 5,549 (28) Social Security 220 3,232 3,171 61 Life Insurance 230 224 219 5 Workers Compensation 250 219 234 (15) Unemployment Compensation 260 60 17 43 Professional Development 270 1,487 - 1,487 Dental Insurance 280 - 413 (413) Contract Services 330 - 302 (302) Supplies 610 700 - 700 Books and Periodicals 640 500 - 500

Subtotal 54,196 52,193 2,003

Physical Education 1108: Salaries 110 70,832 65,870 4,962 Personal Day Reimbursement 125 158 66 92 Health Insurance 210 19,974 14,621 5,353 Insurance Compensation 212 - 175 (175) Social Security 220 5,431 4,890 541 Life Insurance 230 407 323 84 Workers Compensation 250 366 285 81 Unemployment Compensation 260 120 20 100 Professional Development 270 2,231 - 2,231 Dental Insurance 280 616 413 203 Supplies 610 1,000 973 27 Books and Periodicals 640 75 42 33

Subtotal 101,210 87,678 13,532

Music 1112: Salaries 110 51,419 41,135 10,284





VarianceFavorable


Personal Day Reimbursement 125 105$ -$ 105$ Health Insurance 210 5,521 4,439 1,082 Social Security 220 3,942 3,096 846 Life Insurance 230 253 199 54 Workers Compensation 250 266 294 (28) Unemployment Compensation 260 60 21 39 Professional Development 270 1,487 - 1,487 Dental Insurance 280 411 331 80 Contract Services 330 700 1,000 (300) Supplies 610 1,000 2,107 (1,107) Books and Periodicals 640 500 489 11 Equipment 730 2,000 338 1,662

Subtotal 67,664 53,449 14,215

Special Education 1200: Salaries 110 137,921 136,815 1,106 Tutor 112 24,000 28,236 (4,236) Aide 115 125,533 152,414 (26,881) Temporary 120 23,575 19,984 3,591 Personal Day Reimbursement 125 1,403 845 558 Health Insurance 210 78,931 92,396 (13,465) Insurance 212 2,450 2,590 (140) Social Security 220 24,192 25,264 (1,072) Life Insurance 230 1,678 1,199 479 Retirement 240 6,310 7,653 (1,343) Workers Compensation 250 1,582 2,035 (453) Unemployment Compensation 260 950 144 806 Professional Development 270 4,804 16,471 (11,667) Dental Insurance 280 1,949 1,799 150 Counseling Services 330 - 3,858 (3,858) Testing Services 332 8,280 33,970 (25,690) Related Services 333 - 8,637 (8,637) Postage 531 - 97 (97) Tuition 561 26,000 - 26,000 Transition Services 564 400 - 400 Travel 580 500 427 73 Supplies 610 3,300 3,797 (497) Books and Periodicals 640 2,300 1,019 1,281 Software 650 900 - 900 Equipment 730 1,500 5,344 (3,844)





VarianceFavorable


Computer Equipment 731 1,157$ 290$ 867$

Subtotal 479,615 545,284 (65,669)

Essential Early Education 1200: Salaries 110 14,067 25,422 (11,355) Tutor 112 270 4,388 (4,118) Aide 115 16,382 30,265 (13,883) Personal Day Reimbursement 125 152 - 152 Health Insurance 210 12,844 23,070 (10,226) Insurance 212 60 - 60 Social Security 220 2,366 4,365 (1,999) Life Insurance 230 437 255 182 Retirement 240 819 1,353 (534) Workers Compensation 250 162 85 77 Unemployment Compensation 260 209 6 203 Professional Development 270 540 - 540 Dental Insurance 280 233 371 (138) Purchased Services 330 - 1,125 (1,125) Testing Services 332 4,841 8,377 (3,536) Related Services 333 - 1,320 (1,320) Travel 580 250 - 250 Supplies 610 550 374 176 Equipment 730 1,500 2,057 (557)

Subtotal 55,682 102,833 (47,151)

IDEIA-B Special Education 1230: Aide Salaries 115 33,503 28,524 4,979 Personal Day Reimbursement 125 - 35 (35) Health Insurance 210 11,227 - 11,227 Insurance Compensation 212 700 1,400 (700) Social Security 220 2,513 1,810 703 Life Insurance 230 135 133 2 Retirement 240 1,642 1,427 215 Dental Insurance 280 - 4 (4) Contract Services 330 23,720 11,835 11,885

Subtotal 73,440 45,168 28,272

IDEIA-B Preschool 1230: Evaluations 300 5,759 890 4,869

Subtotal 5,759 890 4,869





VarianceFavorable


Compensatory Education 1250: Salaries 110 82,075$ 82,746$ (671)$ Aide Salaries 115 9,908 11,602 (1,694) Personal Day Reimbursement 125 315 120 195 Health Insurance 210 15,461 21,773 (6,312) Insurance 212 350 - 350 Social Security 220 7,142 6,898 244 Life Insurance 230 607 438 169 Retirement 240 495 580 (85) Workers Compensation 250 744 974 (230) Unemployment Compensation 260 270 67 203 Professional Development 270 3,768 1,725 2,043 Dental Insurance 280 1,175 1,182 (7) Travel 580 200 - 200 Supplies 610 1,100 216 884 Books and Periodicals 640 750 797 (47)

Subtotal 124,360 129,118 (4,758)

School Wide Program 1270: Salaries 110 97,867 95,677 2,190 Aide Salaries 115 - 315 (315) Insurance Compensation 212 1,260 1,261 (1) Social Security 220 7,486 6,562 924 Life Insurance 230 524 511 13 Dental Insurance 280 150 165 (15)

Subtotal 107,287 104,491 2,796

Early Education - Compensatory Education 1250: Salaries 110 21,437 7 21,430 Aide Salaries 115 - 80 (80) Personal Day Reimbursement 125 53 - 53 Health Insurance 210 1,455 - 1,455 Social Security 220 1,644 7 1,637 Life Insurance 230 247 - 247 Retirement 240 - 4 (4) Workers Compensation 250 111 - 111 Unemployment Compensation 260 97 2 95 Professional Development 270 744 - 744 Dental Insurance 280 117 - 117

Subtotal 25,905 100 25,805





VarianceFavorable


Home School Coordinator/Family Support 2113: Aides Salaries 115 24,872$ 24,691$ 181$ Personal Day Reimbursement 125 105 - 105 Health Insurance 210 5,711 5,740 (29) Social Security 220 1,911 1,841 70 Life Insurance 230 130 94 36 Retirement 240 1,244 1,235 9 Workers Compensation 250 136 147 (11) Unemployment Compensation 260 60 10 50 Professional Development 270 100 - 100 Home School Coordinator 320 26,000 19,650 6,350

Subtotal 60,269 53,408 6,861

Guidance 2120: Salaries 110 46,193 44,268 1,925 Personal Day Reimbursement 125 105 75 30 Health Insurance 210 14,548 11,697 2,851 Social Security 220 3,542 2,946 596 Life Insurance 230 237 202 35 Workers Compensation 250 239 306 (67) Unemployment Compensation 260 60 22 38 Professional Development 270 1,487 675 812 Dental Insurance 280 1,165 - 1,165 Travel 580 100 - 100 Supplies 610 150 157 (7) Books and Periodicals 640 125 209 (84)

Subtotal 67,951 60,557 7,394

Health Services 2130: Salaries 110 55,561 71,398 (15,837) Personal Day Reimbursement 125 105 159 (54) Health Insurance 210 10,852 10,907 (55) Insurance Compensation 212 - 175 (175) Social Security 220 4,258 5,282 (1,024) Life Insurance 230 269 351 (82) Workers Compensation 250 288 328 (40) Unemployment Compensation 260 60 23 37 Professional Development 270 1,487 2,794 (1,307) Dental Insurance 280 774 778 (4) Contract Services 330 500 474 26





VarianceFavorable


Repairs and Maintenance 430 200$ 185$ 15$ Travel 580 100 - 100 Supplies 610 880 927 (47) Books and Periodicals 640 50 - 50

Subtotal 75,384 93,781 (18,397)

Speech Language Pathologist 2150: Salaries 110 138,756 138,756 - Summer Services Salaries 112 - 1,608 (1,608) Personal Day Reimbursement 125 273 142 131 Health Insurance 210 31,912 32,072 (160) Social Security 220 10,636 9,909 727 Life Insurance 230 715 696 19 Workers Compensation 250 717 819 (102) Unemployment Compensation 260 180 58 122 Professional Development 270 3,866 225 3,641 Dental Insurance 280 2,403 2,416 (13) Contract Services 330 - 4,663 (4,663) Supplies 610 2,200 2,037 163

Subtotal 191,658 193,401 (1,743)

EEE Speech Language Pathologist 2150: Contract Services 330 - 1,306 (1,306)

Subtotal - 1,306 (1,306)

EEE Occupational/Physical Therapy 2160: Contract Services 330 - 5,806 (5,806)

Subtotal - 5,806 (5,806)

Media Center 2220: Salaries 110 55,727 55,727 - Aide Salaries 115 6,352 8,081 (1,729) Personal Day Reimbursement 125 912 51 861 Health Insurance 210 21,284 14,621 6,663 Insurance Compensation 212 - 420 (420) Social Security 220 6,624 4,747 1,877 Life Insurance 230 323 296 27 Retirement 240 318 8 310 Workers Compensation 250 323 367 (44) Unemployment Compensation 260 107 26 81 Professional Development 270 1,547 937 610





VarianceFavorable


Dental Insurance 280 1,165$ 1,171$ (6)$ Travel 580 100 - 100 Supplies 610 1,500 1,883 (383) Audio Visual Materials 611 3,500 3,301 199 Books and Periodicals 640 11,000 10,877 123 Equipment 730 700 516 184 Dues and Fees 810 250 130 120

Subtotal 111,732 103,159 8,573

Technology 2229: Salaries 110 23,603 26,107 (2,504) Assistant Salaries 115 8,761 8,664 97 Personal Day Reimbursement 125 105 35 70 Health Insurance 210 7,274 7,310 (36) Insurance Compensation 212 350 350 - Social Security 220 2,474 2,582 (108) Life Insurance 230 231 163 68 Retirement 240 438 435 3 Workers Compensation 250 170 191 (21) Unemployment Compensation 260 121 14 107 Professional Development 270 794 - 794 Dental Insurance 280 583 586 (3) Repairs and Maintenance 430 1,000 813 187 Telecommunications 530 200 33 167 Supplies 610 200 (20) 220 Software 650 4,750 5,268 (518) Equipment 730 15,700 17,409 (1,709)

Subtotal 66,754 69,940 (3,186)

Board of Education 2310: Secretary Salaries 115 300 - 300 Social Security 220 - 167 (167) Professional Services 310 2,029 1,750 279 Legal Services 360 6,500 7,356 (856) Audit Services 370 2,750 2,750 - Insurance 523 500 3,397 (2,897) Postage 531 500 - 500 Advertising 540 2,780 746 2,034 Travel 580 50 - 50 Miscellaneous 590 2,000 2,519 (519)





VarianceFavorable


Supplies 610 50$ -$ 50$ VSBA Dues 810 1,000 1,150 (150)

Subtotal 18,459 19,835 (1,376)

Supervisory Union 2321: Assessment 331 93,891 93,890 1

Subtotal 93,891 93,890 1

Administration 2400: Salaries 110 143,296 143,296 - Support Staff Salaries 111 56,127 56,345 (218) Temporary Salaries 120 - 3,435 (3,435) Personal Day Reimbursement 125 420 179 241 Health Insurance 210 25,775 26,276 (501) Insurance 212 1,400 1,400 - Social Security 220 15,395 15,180 215 Life Insurance 230 926 1,001 (75) Retirement 240 2,806 943 1,863 VMERS Retirement 245 - 1,937 (1,937) Workers Compensation 250 1,049 1,178 (129) Unemployment Compensation 260 240 83 157 Professional Development 270 3,650 4,540 (890) Professional Development - Action/Strat 271 1,000 - 1,000 Dental Insurance 280 2,975 2,285 690 Repairs and Maintenance 430 200 - 200 Postage 531 3,200 2,230 970 Travel 580 300 511 (211) Supplies 610 3,800 4,210 (410) Software 650 500 - 500 Equipment 730 1,280 1,276 4 Miscellaneous 810 1,500 3,595 (2,095)

Subtotal 265,839 269,900 (4,061)

Short-Term Debt 2520: Current Interest 830 23,500 8,483 15,017

Subtotal 23,500 8,483 15,017

Fiscal Services 2521: Business Manager Assessments 331 19,514 19,514 -

Subtotal 19,514 19,514 -





VarianceFavorable


Bookkeeper 2525: Accounting Services Assessment 331 40,110$ 40,110$ -$

Subtotal 40,110 40,110 -

Buildings/Grounds Maintenance 2600: Salaries 110 113,853 113,284 569 Summer Services Salaries 116 - 7,250 (7,250) Temporary Salaries 120 3,250 7,805 (4,555) Personal Day Reimbursement 125 384 96 288 Overtime 130 1,000 - 1,000 Health Insurance 210 31,988 33,859 (1,871) Insurance Compensation 212 458 455 3 Social Security 220 9,099 9,542 (443) Life Insurance 230 577 516 61 Retirement 240 5,693 4,900 793 Workers Compensation 250 7,489 710 6,779 Unemployment Compensation 260 240 49 191 Professional Development 270 365 - 365 Dental Insurance 280 329 342 (13) Sewer and Water 411 13,000 16,778 (3,778) Trash Removal 421 4,500 3,430 1,070 Snow Removal 422 6,000 4,600 1,400 Repairs and Maintenance 430 4,800 22,418 (17,618) Maintenance 450 29,112 32,394 (3,282) Property Insurance 521 13,000 11,946 1,054 Telephone 530 4,300 3,140 1,160 Supplies 610 18,100 17,020 1,080 Maintenance Supplies 611 2,500 2,404 96 Electricity 622 38,000 37,069 931 Gas 623 600 197 403 Oil 624 90,000 - 90,000 Equipment 730 3,000 2,867 133

Subtotal 401,637 333,071 68,566

Special Education Transportation 2700: Contract Services 519 16,600 4,920 11,680

Subtotal 16,600 4,920 11,680





VarianceFavorable


Pupil Transportation 2710: Contract Services 519 168,952$ 159,074$ 9,878$

Subtotal 168,952 159,074 9,878

Field Trips 2720: Contract Services 519 5,000 5,567 (567)

Subtotal 5,000 5,567 (567)

Total Elementary School 4,390,059 4,439,808 (49,749)

Middle School: ARRA Education Spending Grant 1000: Salaries 101 - 42,123 (42,123) Energy Oil 624 - 48,713 (48,713)

Subtotal - 90,836 (90,836)

Regular Instruction 1100: Salaries 110 724,418 662,625 61,793 Mentoring Salaries 110 3,000 6,292 (3,292) Power School Advisor Salaries 110 5,600 5,000 600 Temporary Salaries 120 30,000 52,335 (22,335) Personal Day Reimbursement 125 1,575 1,192 383 Health Insurance 210 143,800 155,436 (11,636) Section 125 Plan 211 2,112 439 1,673 Insurance Compensation 212 2,100 1,827 273 Social Security 220 57,833 58,797 (964) Life Insurance 230 3,760 3,414 346 Retirement 240 - 333 (333) Workers Compensation 250 3,746 4,487 (741) Unemployment Compensation 260 900 315 585 Professional Development 270 22,305 21,225 1,080 Dental Insurance 280 8,405 9,041 (636) Testing Services 332 1,250 1,715 (465) Copier 410 9,759 9,124 635 Repairs and Maintenance 430 200 - 200 Travel 580 736 169 567 Supplies 610 19,949 19,430 519 Books and Periodicals 640 24,937 29,469 (4,532)





VarianceFavorable


Equipment 730 5,052$ 2,020$ 3,032$

Subtotal 1,071,437 1,044,685 26,752

ESL 1101: Salaries 110 26,281 26,821 (540) Personal Day Reimbursement 125 53 - 53 Health Insurance 210 2,760 8,773 (6,013) Social Security 220 1,612 1,415 197 Life Insurance 230 157 143 14 Workers Compensation 250 109 124 (15) Unemployment Compensation 260 60 9 51 Professional Development 270 744 250 494 Dental Insurance 280 205 466 (261) Travel 580 200 - 200 Supplies 610 550 420 130 Books and Periodicals 640 300 135 165

Subtotal 33,031 38,556 (5,525)

Art 1102: Salaries 110 52,577 43,946 8,631 Personal Day Reimbursement 125 105 135 (30) Health Insurance 210 5,521 14,005 (8,484) Social Security 220 4,030 3,102 928 Life Insurance 230 260 142 118 Workers Compensation 250 272 309 (37) Unemployment Compensation 260 60 22 38 Professional Development 270 1,487 1,207 280 Dental Insurance 280 411 1,003 (592) Supplies 610 3,158 3,311 (153) Books and Periodicals 640 295 - 295 Equipment 730 500 420 80

Subtotal 68,676 67,602 1,074

Foreign Language 1106: Salaries 110 44,651 44,659 (8) Personal Day Reimbursement 125 105 - 105 Health Insurance 210 5,521 5,740 (219) Social Security 220 3,424 3,352 72 Life Insurance 230 234 227 7 Workers Compensation 250 230 263 (33) Unemployment Compensation 260 60 19 41





VarianceFavorable


Professional Development 270 1,487$ -$ 1,487$ Dental Insurance 280 411 405 6 Supplies 610 1,988 827 1,161 Books and Periodicals 640 190 - 190

Subtotal 58,301 55,492 2,809

Physical Education 1108: Salaries 110 69,253 69,253 - Personal Day Reimbursement 125 158 384 (226) Health Insurance 210 15,052 19,479 (4,427) Social Security 220 5,310 4,979 331 Life Insurance 230 404 348 56 Workers Compensation 250 357 407 (50) Unemployment Compensation 260 120 29 91 Professional Development 270 2,231 1,439 792 Dental Insurance 280 308 581 (273) Contracted Services 330 1,200 1,060 140 Travel 580 100 - 100 Supplies 610 564 567 (3) Equipment 730 3,969 2,691 1,278

Subtotal 99,026 101,217 (2,191)

Family/Consumer Education 1109: Salaries 110 18,496 18,496 - Personal Day Reimbursement 125 53 104 (51) Insurance Compensation 212 350 350 - Social Security 220 1,419 1,450 (31) Life Insurance 230 148 143 5 Workers Compensation 250 94 109 (15) Unemployment Compensation 260 60 8 52 Professional Development 270 744 184 560 Repairs and Maintenance 430 300 - 300 Supplies 610 2,300 2,325 (25) Books and Periodicals 640 194 - 194 Equipment 730 600 46 554

Subtotal 24,758 23,215 1,543

Technology 1110: Salaries 110 61,696 61,696 - Personal Day Reimbursement 125 105 175 (70) Health Insurance 210 10,852 10,907 (55)





VarianceFavorable


Social Security 220 4,728$ 4,606$ 122$ Life Insurance 230 288 281 7 Workers Compensation 250 320 363 (43) Unemployment Compensation 260 60 26 34 Professional Development 270 1,487 1,049 438 Dental Insurance 280 1,165 813 352 Repairs and Maintenance 430 200 200 - Supplies 610 4,071 3,805 266 Books and Periodicals 640 635 329 306 Software 650 160 - 160

Subtotal 85,767 84,250 1,517

Music 1112: Salaries 110 94,008 104,292 (10,284) Personal Day Reimbursement 125 189 89 100 Health Insurance 210 22,491 20,980 1,511 Insurance Compensation 212 - 168 (168) Social Security 220 7,206 7,434 (228) Life Insurance 230 481 519 (38) Workers Compensation 250 485 553 (68) Unemployment Compensation 260 120 39 81 Professional Development 270 2,677 - 2,677 Dental Insurance 280 1,706 1,640 66 Repairs and Maintenance 430 500 547 (47) Supplies 610 5,632 2,059 3,573 Instrumental Music 611 2,134 1,525 609 Books and Periodicals 640 550 200 350 Software 650 350 120 230 Equipment 730 300 415 (115) Instruments 732 500 616 (116)

Subtotal 139,329 141,196 (1,867)

Special Education 1200: Salaries 110 161,872 140,783 21,089 Tutor 112 19,140 4,649 14,491 Aide 115 178,899 189,767 (10,868) Temporary 120 7,995 19,685 (11,690) Personal Day Reimbursement 125 1,680 1,083 597 Health Insurance 210 74,688 56,308 18,380 Insurance 212 3,500 4,431 (931)





VarianceFavorable


Social Security 220 28,273$ 30,917$ (2,644)$ Life Insurance 230 1,913 1,355 558 Retirement 240 8,945 8,898 47 Workers Compensation 250 1,970 2,330 (360) Unemployment Compensation 260 1,005 166 839 Professional Development 270 5,761 4,026 1,735 Dental Insurance 280 3,202 1,657 1,545 Counseling Services 330 23,100 16,069 7,031 Testing Services 332 18,000 32,202 (14,202) Related Services 333 3,640 19,660 (16,020) Consulting 334 - 2,740 (2,740) Behavior Specialist Services 335 400 - 400 Washington County Mental Health 337 - 19,886 (19,886) Postage 531 700 - 700 Tuition - State 561 66,000 61,660 4,340 Travel 580 200 147 53 Supplies 610 2,464 1,441 1,023 Books and Periodicals 640 400 614 (214) Software 650 2,050 - 2,050 Equipment 730 2,150 2,447 (297)

Subtotal 617,947 622,921 (4,974)

IDEIA-B Special Education 1230: Aide Salaries 115 28,287 26,323 1,964 Health Insurance 210 7,652 - 7,652 Insurance Compensation 212 700 - 700 Social Security 220 2,164 1,833 331 Life Insurance 230 81 115 (34) Retirement 240 1,414 1,320 94 Dental Insurance 280 - 6 (6) Contracted Services 330 11,360 - 11,360

Subtotal 51,658 29,597 22,061

Compensatory Education 1250: Salaries 110 53,957 46,913 7,044 Aide Salaries 115 15,715 15,114 601 Personal Day Reimbursement 125 210 151 59 Health Insurance 210 21,670 18,735 2,935 Social Security 220 5,346 4,311 1,035 Life Insurance 230 532 287 245





VarianceFavorable


Retirement 240 786$ 762$ 24$ Workers Compensation 250 365 392 (27) Unemployment Compensation 260 253 29 224 Professional Development 270 1,587 - 1,587 Dental Insurance 280 970 554 416 Supplies 610 534 - 534 Books and Periodicals 640 582 - 582

Subtotal 102,507 87,248 15,259

School Wide Program 1270: Salaries 110 - 9,852 (9,852) Aide Salaries 115 17,259 16,597 662 Homework Club Salaries 117 3,755 873 2,882 Health Insurance 210 9,655 13,154 (3,499) Insurance Compensation 212 - 139 (139) Social Security 220 1,607 1,156 451 Life Insurance 230 69 134 (65) Retirement 240 1,137 863 274 Dental Insurance 280 - 82 (82)

Subtotal 33,482 42,850 (9,368)

Co-Curricular 1400: Salaries 110 25,361 20,540 4,821 Aide Salaries 115 - 2,233 (2,233) Social Security 220 1,940 1,773 167 Retirement 240 - 94 (94) Workers Compensation 250 107 149 (42) Unemployment Compensation 260 81 11 70 Club Activities 275 800 - 800 Purchased Services 320 14,910 6,739 8,171 Transportation 519 7,800 3,337 4,463 Supplies 610 1,276 968 308 Graduation 670 700 700 - Equipment 730 3,788 3,613 175 Activities 932 - 4,250 (4,250)

Subtotal 56,763 44,407 12,356

Planning Learning Center 1400: Aide Salaries 115 20,362 21,005 (643) Personal Day Reimbursement 125 - 210 (210) Health Insurance 210 6,998 5,740 1,258





VarianceFavorable


Insurance Compensation 212 651$ -$ 651$ Social Security 220 1,558 1,574 (16) Life Insurance 230 184 79 105 Retirement 240 932 1,061 (129) Workers Compensation 250 225 243 (18) Unemployment Compensation 260 148 17 131 Professional Development 270 197 - 197

Subtotal 31,255 29,929 1,326

Home School 2113: Coordinator 320 26,000 18,616 7,384

Subtotal 26,000 18,616 7,384

Guidance 2120: Salaries 110 43,424 43,424 - Personal Day Reimbursement 125 105 104 1 Health Insurance 210 10,852 10,907 (55) Social Security 220 3,330 3,172 158 Life Insurance 230 228 223 5 Workers Compensation 250 60 432 (372) Unemployment Compensation 260 225 31 194 Professional Development 270 1,487 - 1,487 Dental Insurance 280 411 413 (2) Contract Services 330 - 1,143 (1,143) Travel 580 100 - 100 Supplies 610 417 211 206 Books and Periodicals 640 97 - 97

Subtotal 60,736 60,060 676

Health Services 2130: Salaries 110 62,517 63,194 (677) Personal Day Reimbursement 125 131 - 131 Health Insurance 210 13,157 10,654 2,503 Social Security 220 4,793 4,500 293 Life Insurance 230 472 326 146 Workers Compensation 250 322 368 (46) Unemployment Compensation 260 180 26 154 Professional Development 270 1,859 1,787 72 Dental Insurance 280 411 504 (93) Contract Services 330 1,200 478 722 Repairs and Maintenance 430 200 - 200





VarianceFavorable


Travel 580 100$ -$ 100$ Supplies 610 836 905 (69) Books and Periodicals 640 825 631 194 Equipment 730 400 392 8

Subtotal 87,403 83,765 3,638

Speech Language Pathologist 2150: Salaries 110 45,978 38,443 7,535 Summer Services 112 1,200 - 1,200 Personal Day Reimbursement 125 105 105 - Health Insurance 210 5,521 - 5,521 Insurance Compensation 212 - 602 (602) Social Security 220 3,525 2,995 530 Life Insurance 230 237 161 76 Workers Compensation 250 238 270 (32) Unemployment Compensation 260 60 19 41 Professional Development 270 1,487 75 1,412 Dental Insurance 280 411 (5) 416 Supplies 610 825 199 626 Books and Periodicals 640 500 131 369

Subtotal 60,087 42,995 17,092

Media Center 2220: Salaries 110 42,148 42,148 - Personal Day Reimbursement 125 105 - 105 Health Insurance 210 14,548 14,621 (73) Social Security 220 5,418 3,056 2,362 Life Insurance 230 224 219 5 Workers Compensation 250 218 248 (30) Unemployment Compensation 260 60 18 42 Professional Development 270 1,487 1,909 (422) Dental Insurance 280 774 754 20 Contract Services 330 725 627 98 Repairs and Maintenance 430 150 150 - Travel 580 100 71 29 Supplies 610 994 994 - Audio Visual Materials 611 4,220 4,214 6 Books and Periodicals 640 8,842 8,644 198 Software 650 2,840 2,860 (20)





VarianceFavorable


Equipment 730 610$ 610$ -$

Subtotal 83,463 81,143 2,320

Technology 2229: Salaries 110 28,571 26,106 2,465 Assistant Salaries 115 8,761 8,664 97 Personal Day Reimbursement 125 105 35 70 Health Insurance 210 7,274 7,310 (36) Insurance Compensation 212 350 350 - Social Security 220 2,856 2,607 249 Life Insurance 230 231 163 68 Retirement 240 438 435 3 Workers Compensation 250 170 219 (49) Unemployment Compensation 260 120 16 104 Professional Development 270 794 1,049 (255) Dental Insurance 280 583 586 (3) Repairs and Maintenance 430 1,000 927 73 Telecommunications 530 200 114 86 Travel 580 225 - 225 Supplies 610 582 474 108 Software 650 5,500 5,669 (169) Equipment 730 32,400 32,223 177

Subtotal 90,160 86,947 3,213

Board of Education 2310: Secretary Salaries 115 300 - 300 Social Security 220 - 151 (151) Reimbursments 310 1,931 1,750 181 Legal Services 360 6,500 15,423 (8,923) Audit Services 370 2,750 2,750 - Insurance 523 500 3,013 (2,513) Postage 531 500 - 500 Advertising 540 2,780 1,524 1,256 Travel 580 50 - 50 Elections 590 2,000 1,725 275 Supplies 610 50 - 50 VSBA Dues 810 1,000 200 800

Subtotal 18,361 26,536 (8,175)





VarianceFavorable


Supervisory Union 2321: Assessment 331 93,891$ 93,890$ 1$

Subtotal 93,891 93,890 1

Administration 2400: Salaries 110 154,029 156,162 (2,133) Support Staff 111 54,532 55,100 (568) Temporary Salaries 120 500 1,395 (895) Personal Day Reimbursement 125 420 828 (408) Health Insurance 210 36,627 36,648 (21) Insurance 212 700 700 - Social Security 220 16,025 15,602 423 Life Insurance 230 948 1,038 (90) Retirement 240 5,285 5,365 (80) Workers Compensation 250 1,097 1,227 (130) Unemployment Compensation 260 246 87 159 Professional Development 270 3,650 2,227 1,423 Professional Development - Action/Strat 271 1,000 - 1,000 Dental Insurance 280 1,829 2,330 (501) Repairs and Maintenance 430 200 200 - Postage 531 3,600 3,723 (123) Travel 580 550 1,343 (793) Supplies 610 3,927 2,708 1,219 Equipment 730 2,100 1,447 653 Miscellaneous 810 2,656 3,336 (680)

Subtotal 289,921 291,466 (1,545)

Short-Term Debt 2520: Current Interest 830 23,500 8,483 15,017

Subtotal 23,500 8,483 15,017

Fiscal Services 2521: Business Manager 331 19,514 19,514 -

Subtotal 19,514 19,514 -

Bookkeeper 2525: Accounting Services Assessment 331 40,110 40,110 -

Subtotal 40,110 40,110 -

Buildings/Grounds Maintenance 2600: Aide Salaries 115 118,802 117,837 965 Summer Services 116 - 3,980 (3,980)





VarianceFavorable


Temporary Salaries 120 1,000$ 1,600$ (600)$ Personal Day Reimbursement 125 420 1,286 (866) Overtime 130 1,000 (47) 1,047 Health Insurance 210 22,649 26,490 (3,841) Insurance 212 700 - 700 Social Security 220 9,274 9,293 (19) Life Insurance 230 597 477 120 Retirement 240 5,940 6,294 (354) Workers Compensation 250 7,822 710 7,112 Unemployment Compensation 260 240 50 190 Professional Development 270 400 91 309 Dental Insurance 280 987 1,330 (343) Water and Sewer 411 22,000 20,607 1,393 Trash Removal 421 5,183 5,332 (149) Snow Removal 422 7,000 7,240 (240) Repairs and Maintenance 430 7,500 13,736 (6,236) Maintenance 450 29,112 27,052 2,060 Property Insurance 521 13,564 11,305 2,259 Telephone 530 5,326 3,530 1,796 Supplies 610 17,050 19,243 (2,193) Maintenance Supplies 611 5,560 6,252 (692) Electricity 622 70,000 62,550 7,450 Oil 624 90,000 - 90,000 Equipment 730 3,800 1,874 1,926

Subtotal 445,926 348,112 97,814

Special Education Transportation 2700: Contract Services 519 2,048 13,995 (11,947)

Subtotal 2,048 13,995 (11,947)

Student Transportation 2710: Contract Services 519 155,956 149,534 6,422

Subtotal 155,956 149,534 6,422

IDEIA-B Student Transportation 2720: Contract Services 519 20,000 20,000 -

Subtotal 20,000 20,000 -

Total Middle School 3,991,013 3,889,167 101,846





VarianceFavorable


TOTAL EXPENDITURES 8,381,072$ 8,328,975$ 52,097$

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 671,462 672,296 834

OTHER FINANCING SOURCES (USES): Transfer To Capital Project Fund (75,000) (75,000) - Transfer To Debt Service Fund (814,569) (814,569) - Transfer To Enterprise Fund (32,000) (20,000) 12,000

EXCESS OF REVENUES AND OTHERSOURCES OVER (UNDER)EXPENDITURES AND OTHER USES (250,107) (237,273) 12,834

FUND BALANCE, JULY 1, 2009 250,107 329,956 79,849

FUND BALANCE, JUNE 30, 2010 -$ 92,683$ 92,683$


Waterbury-Duxbury Union School District Schedule 2Combining Balance Sheet (page 1 of 3)Special Revenue Funds Special Revenue Funds

June 30, 2010 June 30, 2010

ThatcherStudent Brook

Tobacco Assistance Title IV Refugee Water AYPGrant Program Drug Free Grant Damage Grant Subtotals

ASSETS:Current Assets: Accounts Receivable - State -$ Accounts Receivable - Supervisory Union 7,208$ 3,817$ 11,025 Accounts Receivable - Other 9,041$ 18,257$ 27,298 Due From Other Funds 111 - - - 21,973$ - 22,084

Total Current Assets 7,319 9,041 3,817 -$ 21,973 18,257 60,407

TOTAL ASSETS 7,319$ 9,041$ 3,817$ -$ 21,973$ 18,257$ 60,407$

LIABILITIES AND FUND BALANCES:Liabilities: Accounts Payable - Other 149$ 1,046$ 1,195$ Due To Other Funds - 9,361$ 3,817$ 25$ - 17,211 30,414

Total Liabilities 149 9,361 3,817 25 -$ 18,257 31,609

Fund Balances: Unreserved (320) (25) (345) Reserved 7,170 - - - 21,973 - 29,143

Total Fund Balances 7,170 (320) - (25) 21,973 - 28,798

TOTAL LIABILITIES & FUND BALANCES 7,319$ 9,041$ 3,817$ -$ 21,973$ 18,257$ 60,407$

The accompanying notes are an integral part of these financial statements The accompanying notes are an integral part of these financial statements- 57 - - 58 -

Waterbury-Duxbury Union School District Schedule 2 Waterbury-Duxbury Union School DistrictCombining Balance Sheet (page 2 of 3) Combining Balance SheetSpecial Revenue Funds Special Revenue Funds

June 30, 2010 June 30, 2010

SafeRoutes to ARRA

School Title III ELF-IBM Mobil Grant Title I Subtotals

ASSETS:Current Assets: Accounts Receivable - State -$ Accounts Receivable - Supervisory Union 19,836$ 19,836 Accounts Receivable - Other - Due From Other Funds - 36$ 1,000$ 466$ - 1,502

Total Current Assets -$ 36 1,000 466 19,836 21,338

TOTAL ASSETS -$ 36$ 1,000$ 466$ 19,836$ 21,338$

LIABILITIES AND FUND BALANCES:Liabilities: Accounts Payable - Other 630$ 630$ Due To Other Funds 1,412$ - - - 19,206 20,618

Total Liabilities 1,412 -$ -$ -$ 19,836 21,248

Fund Balances: Unreserved (1,412) (1,412) Reserved - 36 1,000 466 - 1,502

Total Fund Balances (1,412) 36 1,000 466 - 90

TOTAL LIABILITIES & FUND BALANCES -$ 36$ 1,000$ 466$ 19,836$ 21,338$


Waterbury-Duxbury Union School District Schedule 2Combining Balance Sheet (page 3 of 3)Special Revenue Funds

June 30, 2010

Energy Art/Music LegoSchool Wide Equipment Enrichment Banners Robotics Subtotals Totals

ASSETS:Current Assets: Accounts Receivable - State 7,500$ 7,500$ 7,500$ Accounts Receivable - Supervisory Union 3,067$ 3,067 33,928 Accounts Receivable - Other - 27,298 Due From Other Funds - 7,500 200$ 97$ 61$ 7,858 31,444

Total Current Assets 3,067 15,000 200 97 61 18,425 100,170

TOTAL ASSETS 3,067$ 15,000$ 200$ 97$ 61$ 18,425$ 100,170$

LIABILITIES AND FUND BALANCES:Liabilities: Accounts Payable - Other 15,000$ 15,000$ 16,825$ Due To Other Funds 3,067$ - - - - 3,067 54,099

Total Liabilities 3,067 15,000 -$ -$ -$ 18,067 70,924

Fund Balances: Unreserved - (1,757) Reserved - - 200 97 61 358 31,003

Total Fund Balances - - 200 97 61 358 29,246

TOTAL LIABILITIES & FUND BALANCES 3,067$ 15,000$ 200$ 97$ 61$ 18,425$ 100,170$


Waterbury-Duxbury Union School District Schedule 3Combining Statement of Revenues, Expenditures (page 1 of 3)

and Changes in Fund Balances and Changes in Fund BalancesSpecial Revenue Funds Special Revenue Funds

For The Year Ended June 30, 2010 For The Year Ended June 30, 2010

Thatcher

Student Brook SafeTobacco Assistance Title IV Refugee Water AYP Routes to

Grant Programs Drug Free Grant Damage Grant School Subtotals

REVENUES: Private/Local 8,906$ 57,319$ 66,225$

State 3,181$ 3,181 Federal - 9,041$ 5,100$ - - - - 14,141

TOTAL REVENUES 8,906 9,041 5,100 -$ -$ 57,319 3,181 83,547

EXPENDITURES:

Direct Services 9,240 9,361 5,100 57,319 4,593 85,613 Operation and Maintenance of Building - Food Services - - - - - - - -

TOTAL EXPENDITURES 9,240 9,361 5,100 - - 57,319 4,593 85,613

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (334) (320) - - - - (1,412) (2,066)

FUND BALANCES, JULY 1, 2009 7,504 - - (25) 21,973 - - 29,452

FUND BALANCES, JUNE 30, 2010 7,170$ (320)$ -$ (25)$ 21,973$ -$ (1,412)$ 27,386$



and Changes in Fund Balances and Changes in Fund BalancesSpecial Revenue Funds Special Revenue Funds

For The Year Ended June 30, 2010 For The Year Ended June 30, 2010

Summer ARRA Energy

Services Title III ELF-IBM Mobil Grant Title I School Wide Equipment Subtotals

REVENUES: Private/Local 1,000$ 466$ 1,466$

State - Federal - - - - 19,836$ 50,199$ 40,000$ 110,035

TOTAL REVENUES - -$ 1,000 466 19,836 50,199 40,000 111,501

EXPENDITURES:

Direct Services 19,836 50,199 70,035 Operation and Maintenance of Building 40,000 40,000 Food Services - - - - - - - -

TOTAL EXPENDITURES - - - - 19,836 50,199 40,000 110,035

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES - - 1,000 466 - - - 1,466

FUND BALANCES, JULY 1, 2009 - 36 - - - - - 36

FUND BALANCES, JUNE 30, 2010 -$ 36$ 1,000$ 466$ -$ -$ -$ 1,502$



and Changes in Fund BalancesSpecial Revenue Funds


Art/Music Girls on Farm to Lego

Enrichment Banners the Run School Robotics Subtotals Totals

REVENUES: Private/Local 200$ 800$ 1,000$ 2,000$ 69,691$

State 750$ 500$ 1,250 4,431 Federal - - - - - - 124,176

TOTAL REVENUES 200 800 750 500 1,000 3,250 198,298

EXPENDITURES:

Direct Services 703 750 939 2,392 158,040 Operation and Maintenance of Building - 40,000 Food Services - - - 500 - 500 500

TOTAL EXPENDITURES - 703 750 500 939 2,892 198,540

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 200 97 - - 61 358 (242)

FUND BALANCES, JULY 1, 2009 - - - - - - 29,488

FUND BALANCES, JUNE 30, 2010 200$ 97$ -$ -$ 61$ 358$ 29,246$


Waterbury-Duxbury Union School District Schedule 4Combining Balance Sheet

Capital Project FundsJune 30, 2010

Crossett ThatcherBrook BrookCapital Capital BuildingProjects Reserve Renovations Totals

ASSETS:Current Assets: Cash 246,668$ 246,668$ Due From Other Funds 149,811$ - - 149,811

Total Current Assets 149,811 246,668 -$ 396,479

TOTAL ASSETS 149,811$ 246,668$ -$ 396,479$

LIABILITIES AND FUND BALANCES:Liabilities: Due To Other Funds - 75,036$ 5,708$ 80,744$

Total Liabilities -$ 75,036 5,708 80,744

Fund Balances: Unreserved (5,708) (5,708) Reserved 149,811 171,632 - 321,443

Total Fund Balances 149,811 171,632 (5,708) 315,735

TOTAL LIABILITIES & FUND BALANCES 149,811$ 246,668$ -$ 396,479$


Waterbury-Duxbury Union School District Schedule 5Combining Statement of Revenues, Expenditures

and Changes in Fund BalancesCapital Project Funds


Crossett ThatcherBrook BrookCapital Capital BuildingProjects Reserve Renovations Totals

REVENUES: Investment Income 311$ 68,861$ 69,172$ Lawsuit Settlement 144,508$ 144,508 State - - 259,279 259,279

TOTAL REVENUES 144,508 311 328,140 472,959

EXPENDITURES: Construction Services 10,607 - 184,397 195,004

TOTAL EXPENDITURES 10,607 - 184,397 195,004

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 133,901 311 143,743 277,955

OTHER FINANCING SOURCES (USES): Transfers In - 75,000 - 75,000

EXCESS OF REVENUES AND OTHERSOURCES OVER (UNDER)EXPENDITURES AND OTHER USES 133,901 75,311 143,743 352,955

FUND BALANCES, JULY 1, 2009 15,910 96,321 (149,451) (37,220)

FUND BALANCES, JUNE 30, 2010 149,811$ 171,632$ (5,708)$ 315,735$


Waterbury-Duxbury Union School District Schedule 6Statement of Changes in Assets and Liabilities

Fiduciary Fund Types - Agency FundsFor The Year Ended June 30, 2010

Balance BalanceJuly 1, 2009 Receipts Disbursements June 30, 2010

Assets: Cash - Crossett Brook 38,116$ 94,987$ 98,229$ 34,874$ Cash - Thatcher Brook 18,507 46,790 48,096 17,201 Accounts Receivable - Waterbury (60) - - (60) Due From Other Funds - Waterbury 4,225 - - 4,225 Due From Other Funds - Duxbury 4,758 29,628 28,662 5,724

Total Assets 65,546$ 171,405$ 174,987$ 61,964$

Liabilities: Amount Held for Agency Funds 65,546$ 171,405$ 174,987$ 61,964$

Total Liabilities 65,546$ 171,405$ 174,987$ 61,964$


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

To the School Board Waterbury Duxbury Union School District We have audited the financial statements of the governmental activities, the business -type activities, and the aggregate remaining fund information of Waterbury Duxbury Union School District , Vermont as of and for the year ended June 30, 2010, which collectively comprise the entity’s basic financial statements and have issued our report thereon dated December 23, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered Waterbury Duxbury Union School District’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Waterbury Duxbury Union School District ’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Waterbury Duxbury Union 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 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.

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Compliance and Other Matters As part of obtaining reasonable assurance about whether Waterbury Duxbury Union School District ’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards . We noted certain matters that we reported to management of Waterbury Duxbury Union School District in a separate letter dated December 23, 2010. This report is intended solely for the information and use of the School Board, management, others within the entity, and state and 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. Angolano & Company Shelburne, Vermont Firm Registration Number 92-0000141 December 23, 2010

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Angolano & Company

To the School Board Waterbury Duxbury Union School District In planning and performing our audit of the financial statements of Waterbury Duxbury Union School District as of and for the year ended June 30, 2010, in accordance with auditing standards generally accepted in the United States of America, we considered Waterbury Duxbury Union School District’s internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Waterbury Duxbury Union School District’s internal control. Accordingly, we do not express an opinion on the effectiveness of Waterbury Duxbury Union School District’s internal control. 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 deficien cy, 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 preceding paragraph and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies, or material weaknesses . We did not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above. In addition, during our audit we became aware of several matters that are opportunities for strengthening internal controls and operating efficiency. Our comments and suggestions regarding those matters are summarized below. We previously reported on the Waterbury Duxbury Union School District’s internal control in our report dated December 23, 2010. This letter does not affect our report dated December 23, 2010 in the financial statements of Waterbury Duxbury Union School District. Inconsequential Deficiencies: Banking:

- When testing bank reconciliations we came across old outstanding checks. For checks over 6 months old, the following procedures should be followed and documented: a) Search back into the records to identify who the check was written to.

b) Contact the payee to see why the check was not cashed. If the payee feels they are not owed the money, void the check. If they are due the money, void the old check and issue a new one.

c) If the payee cannot be located, complete the “abandoned” property forms for the State Treasurer, void the old check, and send the payment to the State Treasurer.

We will review the status of these comments during our next audit engagement. We have already discussed many of these comments and suggestions with various personnel within Waterbury Duxbury Union School District, and we will be pleased to discuss them in further detail at your convenienc e, to perform any additional study of these matters, or to assist you in implementing the recommendations. This communication is intended solely for the information and use of the School Board, management, others within the entity, and state and 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. Angolano & Company Shelburne, Vermont Firm Registration Number 92-0000141 December 23, 2010

Angolano & Company

Documents

Angolano & Company Union School... · Waterbury Duxbury Union School District Table of Contents (continued) For The Year Ended June 30, 2010 Page Number Schedule 5 Combining Statement