GREENVILLE COUNTY RECREATION DISTRICT - Greenville Rec

GREENVILLE COUNTY RECREATION DISTRICT

TAYLORS, SOUTH CAROLINA

FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2011

GREENVILLE COUNTY RECREATION DISTRICTTAYLORS, SOUTH CAROLINA

TABLE OF CONTENTS

YEAR ENDED DECEMBER 31, 2011

Page Number

Table of Contents i

Listing of Principal Officials ii

Independent Auditor's Report 1

Management's Discussion and Analysis 3

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Assets 12

Statement of Activities 13

Fund Financial Statements:

Balance Sheet - Governmental Funds 14

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets 15

Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 16

Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changesin Fund Balances to the Statement of Activities 17

Statement of Net Assets - Proprietary Fund 18

Statement of Revenues, Expenses, and Changes in Net Assets - Proprietary Fund 19

Notes to the Basic Financial Statements 20

Required Supplementary Information:

Budgetary Comparison Schedule - General Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budgets and Actual 40

Notes to the Budgetary Comparison Schedule 41

Report on Internal Control Over Financial Reporting and on Compliance and Other MattersBased on an Audit of Basic Financial Statements Performed in Accordance with GovernmentAuditing Standards 43

Schedule of Findings and Responses 45

INTRODUCTORY SECTION

FINANCIAL SECTION

COMPLIANCE SECTION

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GREENVILLE COUNTY RECREATION DISTRICT

Taylors, South Carolina

A Special Purpose District

created by the

South Carolina Legislature

June 24, 1968

COMMISSIONERS

Scott Wigginton, Chairman

Joel Vanderwood, Vice Chairman

John Arrowood, Secretary

Steve Johnson

David LeBlanc

John Liston

Jack Puckett

ii

211 E. Butler Road Suite C-6 4986 Calvin Street 107 Hillcrest Avenue Mauldin, SC 29662 North Charleston, SC 29418 Simpsonville, SC 29681 864.232.5204 Fax: 864-232-5532 864.232.5204 864-962-1040 Fax: 864-962-1044

INDEPENDENT AUDITORS’ REPORT Board of Commissioners Greenville County Recreation District Taylors, South Carolina We have audited the accompanying financial statements of the governmental activities, the business-type activities, and each major fund of the Greenville County Recreation District, South Carolina (the “District”), as of and for the year ended December 31, 2011, which collectively comprise the District’s basic financial statements as listed in the table of contents. These basic financial statements are the responsibility of the District’s management. Our responsibility is to express opinions on these basic financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, and each major fund of the Greenville County Recreation District, as of December 31, 2011, and the respective changes in financial position 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 on May 18, 2012 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the budgetary comparison schedule – General Fund, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements as a whole. The introductory section, as listed in the table of contents, is presented for purposes of additional information and is not a required part of the basic financial statements. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Greene, Finney & Horton, LLP Mauldin, South Carolina May 18, 2012

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GREENVILLE COUNTY RECREATION DISTRICT TAYLORS, SOUTH CAROLINA MANAGEMENT’S DISCUSSION AND ANALYSIS YEAR ENDED DECEMBER 31, 2011

The management of the Greenville County Recreation District (“District”) offers readers of the District’s financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended December 31, 2011. The intent of this discussion and analysis is to look at the District’s financial performance as a whole. Readers are encouraged to not only consider the information presented here, but also the information provided in the basic financial statements, the notes to the basic financial statements, and the required supplementary information to enhance their understanding of the District’s overall financial performance. FINANCIAL HIGHLIGHTS

On a government-wide basis, the assets of the District exceeded its liabilities at December 31, 2011 by $57,593,459 (net assets). Of this amount, $5,620,585 (unrestricted net assets) may be used to meet the District’s ongoing obligations to citizens and creditors.

On a government-wide basis, the District’s total revenues of $20,957,493 exceeded total expenses of $16,331,521 resulting in an increase to net assets of $4,625,972 during the year ended December 31, 2011.

At the end of the current year, the unassigned fund balance for the General Fund was $2,378,777, or approximately 18% of total General Fund expenditures and transfers out for the year ended December 31, 2011.

The District’s total capital assets increased $5,789,055 during the current year, as capital asset additions of $10,079,974 exceeded depreciation expense of $4,246,954 and net disposals of $43,965.

The District’s total long-term obligations decreased by $744,788 (7%) during the current year. This decrease was primarily due to normally scheduled debt service payments. During the current year, the District refunded $7,852,444 in debt in order to take advantage of lower interest rates.

OVERVIEW OF FINANCIAL STATEMENTS This annual report consists of three parts – Introductory Section, Financial Section (which includes management’s discussion and analysis, the basic financial statements, and required supplementary information), and the Compliance Section. This discussion and analysis is intended to serve as an introduction to the District’s basic financial statements. The District’s basic financial statements comprise three components; 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the basic financial statements. The basic financial statements present two different views of the District through the use of government-wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplementary information that will enhance the reader’s understanding of the financial condition of the District. Government-Wide Financial Statements. The basic financial statements include two statements that present different views of the District. These are designed to provide readers with a broad overview of the District’s finances in a manner similar to a private-sector business. The Statement of Net Assets presents information on all of the District’s assets and liabilities, with the differences between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The Statement of Activities presents information showing how the District’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

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OVERVIEW OF FINANCIAL STATEMENTS (CONTINUED) Basic Financial Statements (Continued) The government-wide basic financial statements are divided into two categories: 1) governmental activities; and 2) business-type activities. The governmental activities include administrative, recreation, parks, and the Pavilion. The business-type activities reflect the transfer of the District’s Discovery Island Family Aquatic Center (“Discovery Island”) operations to governmental activities on January 1, 2011. The government-wide basic financial statements can be found as listed in the table of contents. Fund Financial Statements. The fund financial statements provide a more detailed look at the District’s most significant activities. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like all other governmental entities in South Carolina, uses fund accounting to ensure and reflect compliance with finance-related legal requirements. During the year, the District had funds in the following categories: governmental funds and proprietary funds. Governmental Funds – Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. The District’s basic services are accounted for in governmental funds. These funds focus on how assets can readily be converted into cash flow (in and out), and what monies are left at year-end that will be available for spending in the next year. Governmental funds are reported using an accounting method called modified accrual accounting which provides a short-term spending focus. As a result, the governmental fund financial statements give the reader a detailed short-term view that helps him or her determine if there are more or less financial resources available to finance the District’s services. The relationship between governmental activities (reported in the government-wide financial statements) and governmental funds is described in a reconciliation that is a part of the fund financial statements. The District maintains three individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and in the governmental funds Statement of Revenue, Expenditures and Changes in Fund Balances for the General Fund, Debt Service Fund, and Capital Projects Fund – as they are considered major funds. The basic governmental fund financial statements can be found as listed in the table of contents. Proprietary Funds – The District maintained one type of proprietary fund – an enterprise fund. Enterprise funds are used to account for operations that (a) are financed and operated in a manner similar to private business enterprises — where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. The District used an enterprise fund to account for its Discovery Island operations. On January 1, 2011, the District closed this fund, transferred its net assets to governmental activities, and began accounting for the operations of Discovery Island in the same manner as it does its other waterparks and aquatic centers. The proprietary fund basic financial statements can be found as listed in the table of contents. Notes to the Financial Statements – The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the basic financial statements can be found as listed in the table of contents. Other Information – In addition to the basic financial statements and accompanying notes, this report includes certain required supplementary information. A budgetary comparison schedule has been provided for the General Fund to demonstrate compliance with its budget. Required supplementary information can be found as listed in the table of contents.

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OVERVIEW OF FINANCIAL STATEMENTS (CONTINUED) Basic Financial Statements (Continued)

Major Features of the District’s Government-Wide and Fund Financial Statements

Fund Financial Statements

Government-Wide Financial Statements

Governmental Funds

Proprietary Funds

Scope Entire District government

The activities of the District that are not proprietary

Activities the District operates similar to private businesses, in the District’s case, activities related to the Discovery Island operations (before Jan. 1, 2011)

Required Financial Statements

Statement of Net Assets Statement of Activities

Balance Sheet Statement of Revenues

Expenditures, and Change in Fund Balance

Statement of Net Assets Statement of Revenues,

Expenses and Change in Net Assets Statement of Cash Flows

Accounting Basis and Measurement Focus

Accrual accounting and economic resources focus

Modified accrual accounting and current financial resources focus

Accrual accounting and economic resources focus

Type of Asset/Liability Information

All assets and liabilities, both financial and capital, and short-term and long-term

Only assets expected to be used and liabilities that come due during the year or soon, thereafter; no capital assets or long-term obligations included

All assets and liabilities, both financial and capital and short-term and long-term

Type of Inflow/Outflow Information

All revenues and expenses during year, regardless of when cash is received or paid

Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter

All revenues and expenses during year, regardless of when cash is received or paid

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GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net assets may serve over time as a useful indicator of a District’s financial position. The following table provides a summary of the District’s net assets for 2011 compared to 2010:

2011 2010 ^ 2011 2010 ^ 2011 2010 ^Assets:

Current and Other Assets $ 9,651,125 11,151,569 - - 9,651,125 $ 11,151,569 Capital Assets, Net 59,461,138 50,259,373 - 3,412,710 59,461,138 53,672,083

Total Assets $ 69,112,263 61,410,942 - 3,412,710 69,112,263 $ 64,823,652

Liabilities:Long-Term Obligations $ 10,638,619 9,950,544 - 13,119 10,638,619 $ 9,963,663 Other Liabilities 880,185 1,876,432 - 16,070 880,185 1,892,502

Total Liabilities 11,518,804 11,826,976 - 29,189 11,518,804 11,856,165

Net Assets: Invested in Capital Assets,

Net of Related Debt 49,529,326 39,582,772 - 3,412,710 49,529,326 42,995,482 Restricted 2,443,548 4,076,774 - - 2,443,548 4,076,774 Unrestricted 5,620,585 5,924,420 - (29,189) 5,620,585 5,895,231

Total Net Assets $ 57,593,459 49,583,966 - 3,383,521 57,593,459 $ 52,967,487

TotalGovernmental Activities Business-Type Activities

^ Certain amounts have been reclassified to agree to the current year presentation. Certain amounts have also been restated - see Note IV.E for more details.

The District’s total assets increased $4,288,611 from the prior year balance. The increase was primarily due to an increase in capital assets, as the District continued to build parks with hospitality tax funds, partially offset by a decrease in current and other assets, due to reductions in cash balances. Total liabilities as of December 31, 2011 decreased by $337,361 from the prior year, primarily due to debt service payments of $1,051,642, partially offset by a $359,405 increase in accounts payable and accrued expenses and a new lease purchase obligation of $193,500 which was entered into during the current year. The District’s net assets increased by $4,625,972 during the current fiscal year due to current year revenues exceeding current year expenses. Please see the discussion following the next table regarding this increase. The District’s assets exceeded liabilities by $57,593,459 as of December 31, 2011. Approximately 86% of total net assets ($49,529,326) reflect the District’s investment in capital assets (i.e., land, buildings, recreational sites, equipment, vehicles, etc.) less any related outstanding debt used to acquire those assets. The District uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the District’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt generally must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Approximately 4% of net assets ($2,443,548) represent resources that are subject to external restrictions on how they may be used. These net assets are restricted primarily for capital projects and debt service which are restricted by the revenue source. The remaining portion of the District’s net assets (10% or $5,620,585) is unrestricted and may be used to meet the District’s ongoing obligations to citizens and creditors.

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GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED) The following table shows the changes in the District’s net assets for the years ended December 31, 2011 and 2010:

2011 2010 ^ 2011 2010 ^ 2011 2010 ^

Revenues:

Program Revenues:

Charges for Services $ 4,436,212 3,462,535 - 666,210 4,436,212 $ 4,128,745

Operating Grants and Contributions 1,640,292 2,631,326 - - 1,640,292 2,631,326

Capital Grants and Contributions 6,857,740 8,186,100 - 16,840 6,857,740 8,202,940

General Revenues:

Taxes 7,840,884 7,668,034 - - 7,840,884 7,668,034

Other 182,365 270,696 - 9,015 182,365 279,711

Total Revenues 20,957,493 22,218,691 - 692,065 20,957,493 22,910,756

Expenses:

Administrative 1,240,121 1,541,426 - - 1,240,121 1,541,426

Recreation 2,787,210 2,605,374 - - 2,787,210 2,605,374

Parks 9,912,511 8,842,728 - 611,950 9,912,511 9,454,678

The Pavilion 1,752,359 1,407,257 - - 1,752,359 1,407,257

Greenways - 242,670 - - - 242,670

Interest on Long-Term Obligations 639,320 483,308 - - 639,320 483,308

Total Expenses 16,331,521 15,122,763 - 611,950 16,331,521 15,734,713

Change in Net Assets Before Transfers 4,625,972 7,095,928 - 80,115 4,625,972 7,176,043

Transfers 3,383,521 239,064 (3,383,521) (239,064) - -

Change in Net Assets 8,009,493 7,334,992 (3,383,521) (158,949) 4,625,972 7,176,043

Net Assets - Beginning of Year 49,583,966 42,248,974 3,383,521 3,542,470 52,967,487 45,791,444

Net Assets - End of Year $ 57,593,459 49,583,966 - 3,383,521 57,593,459 $ 52,967,487

TotalsGovernmental Activities Business-Type Activities

^ Certain amounts have been reclassified to agree to the current year presentation. Certain amounts have also been restated - see Note IV.E for more details.

Governmental Activities: Governmental activities had a net increase in net assets of $8,009,493 compared to the prior year restated balance. Compared to the prior year, total governmental activities revenue decreased by $1,261,198 or 6%. Key changes in revenue compared to the prior year were primarily due to the following:

Program revenues decreased $1,345,717 from the prior year primarily due to the slowing of capital grants and contributions from hospitality tax project reimbursements which began in 2008 and are concluding. This decrease was partially offset by an increase in revenue from charges for services.

General revenues increased $84,519 from the restated prior year balance due primarily to an increase in amounts collected for property taxes.

Expenses related to total governmental activities increased by $1,208,758, or 8%, from the prior year. Key changes in expenses compared to the prior year were primarily due to the following:

Increases in activities and facilities from the expansion of programs and parks. The transfer of the business type activities into the governmental fund.

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GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED) Business-Type Activities: Net assets related to business-type activities (i.e., Discovery Island) decreased by $3,383,521, or 100%. This decrease was due to the District transferring all assets and liabilities to governmental activities. FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the District's governmental funds reported an ending fund balance of $4,882,591, a decrease of $2,208,881, or 31%, from the prior year fund balance. This change is primarily attributable to capital outlay for park facilities. Approximately 49% or $2,378,777 of the total fund balance of the governmental funds constitutes unassigned fund balance, which is available for spending at the District's discretion. This represents approximately 18% of total General Fund expenditures and transfers out. The District has nonspendable fund balance of $93,415 (primarily prepaid insurance). The District has restricted fund balances of $1,145,057 for required debt service payments, $1,167,543 for ongoing capital projects and $97,766 for grant programming requirements. Highlights for the General Fund were as follows:

Property tax revenue increased $113,154 from the prior year, with the millage rate remaining at 4.5 for operations and maintenance of the District.

Total General Fund revenues increased by $817,933 from the prior year primarily due to increased fee revenue from the District’s parks and facilities, including the Pavilion, and additional sponsorships.

Total General Fund expenditures increased by $667,808 from the prior year. The increase was primarily due to higher expenditures of $832,118 related to park operations due to new parks coming online.

Proprietary Fund. The District’s proprietary fund was used to account for the operations of Discovery Island. On January 1, 2011, the net assets of the fund were transferred to governmental activities, and the District began accounting for the operations of Discovery Island in the same manner as it does its other waterparks and aquatic centers. General Fund Budgetary Highlights: There were no revisions to the original budget adopted for 2011. The actual net decrease in fund balance of $668,490 differed by $725,940 from the budgeted increase in fund balance of $57,450. This shortfall is primarily due to transfer out of the General Fund exceeding the budgeted amount by $681,703 primarily to cover cash flows in the Capital Projects Fund due to the timing of reimbursements. Expenditures also exceeded budget at the parks and the Pavilion due to increased costs to operate expanded facilities and increases in fuel and electricity costs. The shortfall was funded out of existing fund balance.

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CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The District’s net investment in capital assets as of December 31, 2011 amounted to $59,461,138. This investment in capital assets includes land, construction in progress, buildings, recreational sites and improvements, office furniture and equipment, transportation equipment, and maintenance and recreational equipment. The District’s capital assets (net of depreciation) as of December 31, 2011 and 2010 were as follows:

2011 2010 2011 2010 2011 2010

Land $ 11,690,410 11,091,654 - - 11,690,410 $ 11,091,654 Construction in Progress 3,759,324 6,170,878 - - 3,759,324 6,170,878 Buildings, Recreational Sites, and

Improvements 39,515,680 29,004,551 - 3,412,710 39,515,680 32,417,261 Office Furniture and Equipment 148,834 100,097 - - 148,834 100,097 Transportation Equipment 490,375 1,411,291 - - 490,375 1,411,291 Maintenance and Recreational

Equipment 3,856,515 2,480,902 - - 3,856,515 2,480,902

Total $ 59,461,138 50,259,373 - 3,412,710 59,461,138 $ 53,672,083

TotalGovernmental Activities Business-Type Activities

The total increase in the District’s investment in capital assets for 2011 was $5,789,055 or 11%. Major capital asset events during 2011 included the following:

Capital asset additions of $10,079,974 consisted primarily of: o The completion of Westside Aquatic Center and Cedar Falls Park o Ongoing construction at Conestee Park o Purchase/donations of land for recreational projects - $598,756 o Purchase of various transportation and maintenance and recreational equipment - $937,999

Depreciation expense of $4,246,954 Additional information on the District’s capital assets can be found in Notes I and III of the notes to the basic financial statements. Debt As of December 31, 2011, the District had total outstanding debt of $9,931,812. Of this total, $1,636,941 was general obligation debt backed by the full faith and credit of the District. The District’s total bond debt and lease purchase obligations as of December 31, 2011 and 2010 were as follows:

2011 2010

General Obligation Bonds $ 1,363,941 $ 1,532,147 Revenue Bonds 5,805,000 6,235,000 Lease Purchase Obligations 2,762,871 2,909,453

Total $ 9,931,812 $ 10,676,600

Governmental Activities

The total decrease in the District’s bond debt and lease purchases during 2011 was $744,788 or 7%.

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CAPITAL ASSET AND DEBT ADMINISTRATION (CONTINUED) Debt (Continued) Major events during 2011 included the following:

Issuance of a Series 2011 Revenue Refunding Bond for $5,330,000 that currently refunded the Series 2009 R-1

Revenue Bond. Issuance of two refunding lease purchase obligations for $2,635,798 that currently refunded seven lease purchase

obligations. The District entered into a new lease purchase obligation of $193,500 for the purchase of vehicles. Scheduled principal payments on bond debt and lease purchase obligations of $1,051,642.

The State of South Carolina limits the amount of general obligation debt that a unit of government can issue to 8% of the total assessed value of taxable property located within that government’s boundaries. The District had $1,363,941 of bonded debt subject to the 8% limit and as of December 31, 2011, the District was well below the legal debt limit. In addition, any issuances of general obligation debt must also be approved by Greenville County Council. Additional information regarding the District’s long-term obligations can be found in Note III in the notes to the basic financial statements. ECONOMIC FACTORS AND CURRENT EVENTS The Greenville County Recreation District is the largest provider of public leisure opportunities in the greater Greenville, South Carolina area with fifty-five diverse facilities that range in scope from the new Westside Aquatic Center with an Olympic-size pool, to the beautiful Campbell’s Covered Bridge, the last remaining covered bridge in South Carolina. The District provides fields and facilities for various sports from the traditional- baseball, football and soccer to the not so traditional- curling, roller derby and pickle ball. The District provides fun, healthy programs and events for the whole family. Significant events in 2011 included the opening of Westside Aquatic Center, Campbell’s Covered Bridge, and Cedar Falls Park. The wildly popular Greenville Hospital System Swamp Rabbit Trail grew by 5.2 miles and two new dog parks debuted. Over 10,000 people attended 18 events special events including The Hop at Herdklotz, Leprechaun O’Gala at the Pavilion, and Flashlight Easter Egg Hunt at Gateway Park . The District has substantially completed the initial capital plan funded by the county Hospitality Tax. The many new and revitalized facilities built with that tax have fueled the local economy by increasing sports tourism in Greenville County. The District’s focus is on sustainability and a large part of that strategy is to continue to partner with local agencies, both public and private, to leverage its resources and success. The District’s growth and success is due to the support of its citizens, patrons, civic partners, and elected officials. CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide a general overview of the Greenville County Recreation District’s finances and to show the District’s accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the District’s Deputy Director and Chief Financial Officer, 4806 Old Spartanburg Road, Taylors, South Carolina 29687. General information about the District can be obtained from our website at www.greenvillerec.com.

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Basic Financial Statements

11


STATEMENT OF NET ASSETS

DECEMBER 31, 2011

Governmental Business-Type Activities Activities Totals

ASSETS

Cash and Cash Equivalents 1,308,468$ - 1,308,468$ Cash and Investments Held by County Treasurer 143,900 - 143,900 Restricted Cash and Cash Equivalents 2,039,532 - 2,039,532 Due from County Treasurer 1,499,582 - 1,499,582 Receivables, Net:

Property Taxes 3,940,745 - 3,940,745 Grants 290,117 - 290,117 Intergovernmental 329,062 - 329,062 Other 6,304 - 6,304

Prepaids 89,906 - 89,906 Inventory 3,509 - 3,509 Capital Assets:

Non-Depreciable 15,449,734 - 15,449,734 Depreciable, Net 44,011,404 - 44,011,404

TOTAL ASSETS 69,112,263 - 69,112,263

LIABILITIES

Accounts Payable 432,944 - 432,944 Retainage Payable 118,296 - 118,296 Accrued Expenses 276,549 - 276,549 Accrued Interest Payable 52,396 - 52,396 Long-Term Obligations:

Due Within One Year 1,519,940 - 1,519,940 Due in More Than One Year 9,118,679 - 9,118,679

TOTAL LIABILITIES 11,518,804 - 11,518,804

NET ASSETS

Invested in Capital Assets, Net of Related Debt 49,529,326 - 49,529,326 Restricted For:

Capital Projects 1,167,576 - 1,167,576 Debt Service 1,178,206 - 1,178,206 Programming 97,766 - 97,766

Unrestricted 5,620,585 - 5,620,585

TOTAL NET ASSETS 57,593,459$ - 57,593,459$

PRIMARY GOVERNMENT

The notes to the basic financial statements are an integral part of this statement.See accompanying independent auditors' report.

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STATEMENT OF ACTIVITIES


FUNCTIONS/PROGRAMS Operating Capital Charges for Grants and Grants and Governmental Business-Type

PRIMARY GOVERNMENT: Expenses Services Contributions Contributions Activities Activities TotalGovernmental Activities:

Adminstrative 1,240,121$ 53,368 350,000 - (836,753) - (836,753)$ Recreation 2,787,210 1,124,826 142,226 - (1,520,158) - (1,520,158) Parks 9,912,511 1,709,995 1,147,391 6,725,782 (329,343) - (329,343) The Pavilion 1,752,359 1,548,023 675 131,958 (71,703) - (71,703) Interest and Other Charges 639,320 - - - (639,320) - (639,320)

Total Governmental Activities 16,331,521 4,436,212 1,640,292 6,857,740 (3,397,277) - (3,397,277)

Business-Type Activities:Discovery Island - - - - - - -

Total Business-Type Activities - - - - - - -

TOTAL - PRIMARY GOVERNMENT 16,331,521$ 4,436,212 1,640,292 6,857,740 (3,397,277) - (3,397,277)$

General Revenues:Taxes:

Property Taxes, General 6,444,990$ - 6,444,990$ Property Taxes, Debt Service 161,110 - 161,110 Hospitality Taxes 1,184,784 - 1,184,784 Accommodations Taxes 50,000 - 50,000

Miscellaneous Revenue 177,773 - 177,773 Investment Earnings 4,592 - 4,592

Transfers 3,383,521 (3,383,521) -

Total General Revenues and Transfers 11,406,770 (3,383,521) 8,023,249

CHANGE IN NET ASSETS 8,009,493 (3,383,521) 4,625,972

NET ASSETS, Beginning of Year 46,042,234 3,383,521 49,425,755 PRIOR PERIOD ADJUSTMENT (See Note IV.E.) 3,541,732 - 3,541,732

NET ASSETS, Beginning of Year, Restated 49,583,966 3,383,521 52,967,487

NET ASSETS, End of Year 57,593,459$ - 57,593,459$

PROGRAM REVENUESNET (EXPENSE) REVENUE AND

CHANGE IN NET ASSETSPrimary Government


13


BALANCE SHEET - GOVERNMENTAL FUNDS

DECEMBER 31, 2011

DEBT CAPITAL TOTALGENERAL SERVICE PROJECTS GOVERNMENTAL

FUND FUND FUND FUNDSASSETS

Cash and Cash Equivalents 1,308,468$ - - 1,308,468$ Cash and Investments Held by County Treasurer - 143,900 - 143,900 Restricted Cash and Cash Equivalents - 1,001,157 1,038,375 2,039,532 Due from County Treasurer 1,499,582 - - 1,499,582 Receivables, Net:

Property Taxes 3,855,200 85,545 - 3,940,745 Grants 97,766 - 192,351 290,117 Intergovernmental - - 329,062 329,062 Other 6,304 - - 6,304

Prepaids 89,906 - - 89,906 Inventory 3,509 - - 3,509

TOTAL ASSETS 6,860,735$ 1,230,602 1,559,788 9,651,125$

LIABILITIES

Accounts Payable 159,028$ - 273,916 432,944$ Retainage Payable - - 118,296 118,296 Accrued Liabilities 276,549 - - 276,549 Deferred and Unearned Revenue 3,855,200 85,545 - 3,940,745

TOTAL LIABILITIES 4,290,777 85,545 392,212 4,768,534

FUND BALANCES

Nonspendable - Prepaids and Inventory 93,415 - - 93,415 Restricted for:

Debt Service - 1,145,057 - 1,145,057 Capital Projects - - 1,167,576 1,167,576 Programming 97,766 - - 97,766

Unassigned 2,378,777 - - 2,378,777

TOTAL FUND BALANCES 2,569,958 1,145,057 1,167,576 4,882,591

TOTAL LIABILITIES AND FUND BALANCES 6,860,735$ 1,230,602 1,559,788 9,651,125$


14


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET ASSETS

DECEMBER 31, 2011

TOTAL FUND BALANCES - GOVERNMENTAL FUNDS 4,882,591$

Amounts reported for the governmental activities in the Statement of Net Assets are differentbecause of the following:

Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. The cost of the assets was $82,263,416and the accumulated depreciation was $22,802,278. 59,461,138

Property taxes receivable will be collected in the future and are considered unavailable to payfor the current period's expenditures and therefore have been deferred in the governmental funds. 3,940,745

Accrued interest on long-term obligations in governmental accounting is not due and payablein the current period and therefore is not reported as a liability in the governmental funds. (52,396)

Long-term liabilities, including bonds and notes payable, are not due or payable in thecurrent period and therefore are not reported as liabilities in the governmental funds. Long-term liabilities consisted of the following:

Long-Term Obligations (9,931,812) Compensated Absences (706,807) (10,638,619)

TOTAL NET ASSETS - GOVERNMENTAL ACTIVITIES 57,593,459$


15


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


DEBT CAPITAL TOTALGENERAL SERVICE PROJECTS GOVERNMENTAL

FUND FUND FUND FUNDSREVENUES

Property Taxes 6,054,475$ 152,612 - 6,207,087$ Hospitality Taxes 1,184,784 - - 1,184,784 Accommodations Taxes - 50,000 - 50,000 Charges for Services:

Administrative 50,368 - - 50,368 Recreation 1,017,055 - - 1,017,055 Parks 1,845,191 - - 1,845,191 The Pavilion 1,410,107 - - 1,410,107

Hospitality Tax Project Reimbursements - - 6,647,740 6,647,740 Grants 633,284 - 1,007,008 1,640,292 Sponsorships 12,453 - - 12,453 Events 101,038 - - 101,038 Interest Earnings 1,624 2,128 840 4,592 Miscellaneous 173,273 - 4,500 177,773

TOTAL REVENUES ALL SOURCES 12,483,652 204,740 7,660,088 20,348,480

EXPENDITURES

Current:Administrative 1,362,609 - - 1,362,609 Recreation 2,612,464 - - 2,612,464 Parks 5,824,755 - - 5,824,755 The Pavilion 1,443,849 - - 1,443,849

Capital Outlay - - 9,981,971 9,981,971 Debt Service:

Principal - 1,051,643 - 1,051,643 Interest - 531,374 - 531,374 Bond Issuance Costs - 55,550 - 55,550

TOTAL EXPENDITURES 11,243,677 1,638,567 9,981,971 22,864,215

EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 1,239,975 (1,433,827) (2,321,883) (2,515,735)

OTHER FINANCING SOURCES (USES)

Issuance of Lease Purchase Obligations - 2,829,298 - 2,829,298 Issuance of General Obligation Bonds - 5,330,000 - 5,330,000 Payment to Refund Bonds and Lease Purchase Obligations - (7,852,444) - (7,852,444) Transfers In - 1,160,656 1,277,058 2,437,714 Transfers Out (1,908,465) - (529,249) (2,437,714)

TOTAL OTHER FINANCING SOURCES (USES) (1,908,465) 1,467,510 747,809 306,854

CHANGES IN FUND BALANCES (668,490) 33,683 (1,574,074) (2,208,881)

FUND BALANCES, Beginning of Year 3,238,448 1,111,374 2,741,650 7,091,472

FUND BALANCES, End of Year 2,569,958$ 1,145,057 1,167,576 4,882,591$


16


RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, ANDCHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES


TOTAL CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS (2,208,881)$

Amounts reported for the governmental activities in the Statement of Activities are differentbecause of the following:

Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds. They are considered revenues in the Statement 399,013 of Activities.

Repayment of bond and lease purchase principal is recognized in the governmental funds, but therepayment reduces long-term obligations in the Statement of Net Assets. This amount is comprisedof principal payments and the refunding payments made in the current year. 8,904,087

Bond and lease purchase proceeds provide current financial resources to governmental funds, but issuingdebt or entering into notes payable increases long-term obligations in the Statement of Net Assets. (8,159,298)

Interest on long-term obligations in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the governmental funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. (52,396)

Some expenses reported in the Statement of Activities do not require the use of current financial

resources and therefore are not reported as expenditures in the governmental funds. (74,797)

In the Statement of Activities the loss on the disposal of capital assets is reported, whereas in thegovernmental funds, proceeds from the disposal of capital assets increase financial resources.Thus, the change in net assets differs from the change in fund balance by the net book value of theassets disposed. (43,965)

Governmental funds report outlays as expenditures. However, in the Statement of Activities, the cost ofthose assets that are considered capital asset additions is allocated over their estimated useful lives asdepreciation expense. This is the amount by which capital asset additions ($13,492,684), which includesdonated capital assets ($210,000) and transfers in of capital assets from the Enterprise Fund($3,412,710), exceeded depreciation expense ($4,246,954) in the current period. 9,245,730

TOTAL CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 8,009,493$


17


STATEMENT OF NET ASSETS - PROPRIETARY FUND

DECEMBER 31, 2011

ENTERPRISE FUND

ASSETS -$

TOTAL ASSETS -$

LIABILITIES -$

TOTAL LIABILITIES -

NET ASSETS -

TOTAL NET ASSETS -$


18


STATEMENT OF REVENUES, EXPENSES, AND CHANGE IN NET ASSETS - PROPRIETARY FUND


ENTERPRISE FUND

TRANSFERS

Transfer of Net Assets to Governmental Activities (3,383,521)$

CHANGE IN NET ASSETS (3,383,521)

NET ASSETS, Beginning of Year 3,383,521

NET ASSETS, End of Year -$


19

GREENVILLE COUNTY RECREATION DISTRICT TAYLORS, SOUTH CAROLINA NOTES TO THE BASIC FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2011

I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. The Reporting Entity

Greenville County Recreation District (“District”) was created by state law on June 24, 1968, as an independent special purpose district to fulfill the recreational needs of the public of Greenville County. The District is governed by a Board of Commissioners appointed by the Governor upon recommendation of the Greenville County Council. The basic financial statements of the District have been prepared in conformity with accounting principles generally accepted in the United States of America, (“GAAP”), as applied to governmental units. The Governmental Accounting Standards Board (“GASB”) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the District’s accounting policies are described below. As required by GAAP, the basic financial statements present the District’s financial information with its component unit (if any). The primary criterion for determining inclusion or exclusion of a legally separate entity (component unit) is financial accountability, which is presumed to exist if the District both appoints a voting majority of the entity’s governing body, and either 1) the District is able to impose its will on the entity or, 2) there is a potential for the entity to provide specific financial benefits to, or impose specific financial burdens on the District. If either or both of the foregoing conditions are not met, the entity could still be considered a component unit if it is fiscally dependent on the District. In order to be considered fiscally independent, an entity must have the authority to do all of the following: (a) determine its budget without the District having the authority to approve or modify that budget; (b) levy taxes or set rates or charges without approval by the District; and (c) issue bonded debt without approval by the District. Finally, an entity could be a component unit even if it met all the conditions described above if excluding it would cause the District’s basic financial statements to be misleading or incomplete. Based on the criteria above, the District does not have any component units.

B. Measurement Focus, Basis of Accounting, and Basis of Presentation

The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the non-fiduciary activities of the District (the “Primary Government”). The effect of interfund activity has been removed from these financial statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. The comparison of direct expenses with program revenues identifies the extent to which each business segment or governmental function is self-financing or draws from the general revenues of the District.

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I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. Measurement Focus, Basis of Accounting, and Basis of Presentation (Continued) The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as would Proprietary Fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met. The government-wide statements are prepared using a different measurement focus from the manner in which governmental fund financial statements are prepared (see further detail below). Governmental fund financial statements therefore, include reconciliations with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds. Governmental funds financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. Property taxes, intergovernmental revenues, fees, and interest associated with the current fiscal period are all considered to be measurable and susceptible to accrual and so have been recognized as revenues of the current fiscal period. For this purpose, the government generally considers revenues to be available if they are collected as of December 31, with the exception of certain reimbursement expenditure grants for which a twelve month availability period is generally used. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures and lease purchase expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payments are due and payable. Capital asset acquisitions are reported as capital outlay expenditures in governmental funds. Proceeds of long-term debt and acquisitions under lease purchases are reported as other financing sources. Fund financial statements report detailed information about the District. The focus of governmental funds and Enterprise Fund financial statements is on major funds rather than reporting funds by type. Each major fund is presented in a separate column. The District does not have any nonmajor funds. When both restricted and unrestricted resources are available for use, it is the District’s practice to use restricted resources first, then unrestricted resources as they are needed. The accounts of the government are organized and operated on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements. The following major funds and fund types are used by the District. Governmental fund types are those through which most governmental functions of the District are financed. The District's expendable financial resources and related assets and liabilities (except for those accounted for in the Proprietary Fund) are accounted for through governmental funds. Governmental funds are accounted for using the current financial resources measurement focus and the modified accrual basis of accounting.

21



B. Measurement Focus, Basis of Accounting, and Basis of Presentation (Continued) The District’s governmental funds are as follows:

The General Fund, a major fund and a budgeted fund, is the general operating fund of the District and accounts for all revenues and expenditures of the District except those required to be accounted for in another fund. All general tax revenues and other receipts that (a) are not allocated by law or contractual agreement to other funds or (b) that have not been restricted, committed, or assigned to other funds are accounted for in the General Fund. General operating expenditures and the capital improvement costs that are not paid through other funds are paid from the General Fund. The Debt Service Fund, a major fund and an unbudgeted fund, is used to account for and report the accumulation of financial resources that are restricted for the payment of all long-term debt principal, interest, and related costs. The Capital Projects Fund, a major fund and an unbudgeted fund, is used to account for and report financial resources that are restricted, committed, or assigned for expenditures of capital outlay related to site acquisitions, construction, equipment, and renovation of all major capital facilities.

Proprietary fund types are accounted for based on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. The District applies all applicable GASB pronouncements, as well as the requirements of Financial Accounting Standards Board Statements and Interpretations, Accounting Principles Board Opinions, and Accounting Research Bulletins, issued on or before November 30, 1989, unless they conflict with or contradict GASB pronouncements. The District has elected not to apply the standards issued after November 30, 1989 for the Proprietary Fund, as allowed by GAAP. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of proprietary funds are primarily charges for services and fees. Operating expenses for proprietary funds include the expense for providing goods and services, administrative expenses, maintenance, and depreciation of capital assets. All revenues and expenses not meeting these general definitions are reported as non-operating revenues and expenses. The District had one proprietary fund:

The Enterprise Fund, a major fund and an unbudgeted fund, was used to account for those operations that are financed and operated in a manner similar to private business enterprises, or where the District has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for management accountability. The Enterprise Fund was used to account for the operations of the District’s Discovery Island Family Aquatic Center. As of January 1, 2011, all assets and liabilities of the Enterprise Fund were transferred to governmental activities. Beginning January 1, 2011 the operations of the Discovery Island Family Aquatic Center was accounted for in the same manner as the District’s other waterparks and aquatic centers.

22



C. Assets, Liabilities, and Equity 1. Cash, Cash Equivalents, and Investments

The District considers all highly liquid investments (including restricted assets) with original maturities of three months or less when purchased and money market mutual funds to be cash equivalents. Securities with an initial maturity of more than three months (from when initially purchased) and other non-money market mutual funds are reported as investments.

The District’s operating cash and investment policy is designed to operate within existing statutes (which are identical for all funds, fund types and component units within the State of South Carolina) that authorize the District to invest in the following:

(a) Obligations of the United States and its agencies, the principal and interest of which is fully guaranteed

by the United States;

(b) Obligations issued by the Federal Financing Bank, Federal Farm Credit Bank, the Bank of Cooperatives, the Federal Intermediate Credit Bank, the Federal Land Banks, the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Housing Administration, and the Farmers Home Administration, if, at the time of investment, the obligor has a long-term, unenhanced, unsecured debt rating in one of the top two ratings categories, without regard to a refinement or gradation of rating category by numerical modifier or otherwise, issued by at least two nationally recognized credit rating organizations;

(c) (i) General obligations of the State of South Carolina or any of its political units; or (ii) revenue

obligations of the State of South Carolina or its political units, if at the time of investment, the obligor has a long-term, unenhanced, unsecured debt rating in one of the top two ratings categories, without regard to a refinement or gradation of rating category by numerical modifier or otherwise, issued by at least two nationally recognized credit rating organizations;

(d) Savings and Loan Associations to the extent that the same are insured by an agency of the federal

government; (e) Certificates of deposit where the certificates are collaterally secured by securities of the type described in

(a) and (b) above held by a third party as escrow agent or custodian, of a market value not less than the amount of the certificates of deposit so secured, including interest; provided, however, such collateral shall not be required to the extent the same are insured by an agency of the federal government;

(f) Repurchase agreements when collateralized by securities as set forth in this section; and (g) No load open-end or closed-end management type investment companies or investment trusts registered

under the Investment Company Act of 1940, as amended, where the investment is made by a bank or trust company or savings and loan association or other financial institution when acting as trustee or agent for a bond or other debt issue of that local government unit, political subdivision, or county treasurer if the particular portfolio of the investment company or investment trust in which the investment is made (i) is limited to obligations described in items (a), (b), (c), and (f) of this subsection, and (ii) has among its objectives the attempt to maintain a constant net asset value of one dollar a share and to that end, value its assets by the amortized cost method.

23


I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Assets, Liabilities, and Equity (Continued)

1. Cash, Cash Equivalents, and Investments (Continued)

The District’s cash and investment objectives are preservation of capital, liquidity and yield. The District reports its cash and investments at fair value which is normally determined by quoted market prices. The District currently or in the past year has primarily used the following investments:

Cash and Investments held by the County Treasurer which represent property taxes collected by the

District’s fiscal agent that have not been remitted to the District. The County Treasurer invests these funds in investments authorized by state statute as outlined above. All interest and other earnings gained are added back to the funds and are paid out by the County Treasurer as requested.

Money market mutual fund that invest in U.S. government securities (generally treasury notes, treasury

bonds, treasury bills, and related securities which are debt obligations of the U.S. government). These debt obligations are backed by the “full faith and credit” of the U. S. government, and thus by its ability to raise tax revenues and print currency, and are considered the safest of all investments.

2. Inventories and Prepaid Items

Inventories of concession items that are held for resale are valued at the lower of cost (determined on a first-in, first-out basis) or market. The costs of inventories and prepaid items are accounted for using the consumption method (expensed when consumed).

3. Capital Assets

All of the District’s capital assets are general capital assets as the District no longer has a proprietary fund as of December 31, 2011. The capital assets are reported in the governmental activities column of the government-wide Statement of Net Assets, but are not reported in the fund financial statements. All capital assets are capitalized at cost and updated for additions and retirements during the year. Donated capital assets are recorded at their fair market values as of the date received. The District maintains a capitalization threshold of $5,000 for equipment and vehicles. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are not capitalized. Interest is not capitalized during the construction of capital assets. All reported capital assets except land and construction in progress are depreciated. Construction projects begin being depreciated once they are complete, at which time the complete costs of the project are transferred to the appropriate capital asset category. Improvements are depreciated over the remaining useful lives of the related capital assets. Depreciation expense is computed using the straight-line method over the following useful lives:

Description Estimated Lives

Buildings 40

Recreation Sites and Improvements 15 - 40

Office Furniture and Equipment 5 - 7

Transportation Equipment 5 - 7

Maintenance and Recreational Equipment 5 - 7

24


I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Assets, Liabilities, and Equity (Continued)

4. Compensated Absences

The District allows full-time employees to accumulate up to 832 hours of paid leave as of the close of the calendar year. Paid leave accrues at a rate of 8 to 20 or more hours per month dependent on length of service. Accrued paid leave exceeding 832 hours is forfeited. Upon resignation in good standing, accrued paid leave will be paid at 50% of the employee’s base rate of pay. The entire compensated absence liability and expense is reported on the government-wide financial statements. The governmental funds will also recognize a liability (if material) for compensated absences as a result of employee resignations or retirements prior to fiscal year end.

5. Accrued Liabilities and Long-Term Obligations

All payables, accrued liabilities, and long-term obligations are reported in the government-wide financial statements. Bond premiums, discounts and issuance costs are deferred and amortized over the life of the bonds using the straight-line method (as it approximates the effective interest method) if material. Debt is reported net of applicable bond premiums and discounts. In the governmental funds financial statements, bond premiums, discounts and bond issuance costs are recognized immediately. The face amount of debt, lease purchases, or capital leases issued is reported as other financing sources. Premiums received on issuances are reported as other financing sources while discounts are reported as other financing uses. Issuance costs are reported as debt service expenditures.

In general, payables and accrued liabilities that will be paid from governmental funds are reported on the governmental funds financial statements regardless of whether they will be liquidated with current financial resources. However, claims and judgments, debt, lease purchases, capital leases, compensated absences, and other related long-term liabilities that will eventually be paid from governmental funds are not reported as a liability in the fund financial statements until due and payable.

6. Fund Balance

The District implemented GASB #54 “Fund Balance Reporting and Governmental Fund Type Definitions” (“GASB #54) in the current year. The objective of GASB #54 was to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions. GASB #54 establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in the governmental funds. The District classifies governmental fund balances as follows:

Nonspendable – includes amounts that inherently cannot be spent either because it is not in spendable form (i.e. prepaids, inventories, etc.) or because of legal or contractual requirements (i.e. principal on an endowment, etc.). Restricted – includes amounts that are constrained by specific purposes which are externally imposed by (a) other governments through laws and regulations, (b) grantors or contributions through agreements, (c) creditors through debt covenants or other contracts, or (d) imposed by law through constitutional provisions or enabling legislation.

25



C. Assets, Liabilities, and Equity (Continued)

5. Fund Balance (Continued)

Committed – includes amounts that are constrained for specific purposes that are internally imposed by the government through formal action made by the highest level of decision making authority before the end of the reporting period. For purposes of the District, the Board of Commissioners (“Board”) must commit fund balance by formal resolution before the end of the reporting period for fund balance to qualify in this category. Those committed amounts cannot be used for any other purpose unless the Board removes or changes the specified use by taking the same type of action it employed to previously commit those amounts. Assigned – includes amounts that are intended to be used for specific purposes that are neither considered restricted or committed and that such assignments are made by the highest level of decision making authority, or by parties delegated this authority, before the report issuance date. For purposes of the District, the Board assigns fund balance by an approved motion by the Board before report issuance for fund balance to qualify in this category. Unassigned – includes amounts that do not qualify to be accounted for and reported in any of the other fund balance categories. This classification represents the amount of fund balance that has not been restricted, committed, or assigned to specific purposes within the General Fund. The General Fund should be the only fund that reports a positive unassigned fund balance amount.

The District generally uses restricted amounts to be spent first when both restricted and unrestricted (committed, assigned, and unassigned) fund balance is available unless there are legal documents, contracts, or agreements that prohibit doing such. Additionally, the District generally would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund balance when expenditures are made. The District’s fund balance policy for the General Fund is to maintain an unassigned fund balance in the General Fund of between ten to fifteen percent of General Fund operating expenditures.

7. Net Assets

Net assets represent the difference between assets and liabilities in the statement of net assets. Net assets are classified as invested in capital assets net of related debt; restricted; and unrestricted. Net assets invested in capital assets, net of related debt, consist of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Outstanding debt which has not been spent is included in the same net assets component as the unspent proceeds. Net assets are reported as restricted when there are limitations imposed on their use either through enabling legislation or through external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other governments.

8. Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. Those estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. In addition, they affect the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates and assumptions.

26



C. Assets, Liabilities, and Equity (Continued)

9. Comparative Data

Comparative data (i.e. presentation of prior year totals by fund type) has not been presented in each of the statements since their inclusion would make the statements unduly complex and difficult to read.

II. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

A. Budgetary Information

The District has elected to present its budgetary comparison information for the General Fund as a separate schedule and not as a basic financial statement. The General Fund was the only fund for which the District had a legally adopted budget. See the Notes to the Required Supplementary Information (following the notes to the basic financial statement) for details regarding the District’s budgetary information and process.

III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES

A. Deposits and Investments

Deposits Custodial Credit Risk for Deposits: Custodial credit risk for deposits is the risk that, in the event of a bank failure, the District’s deposits might not be recovered. The District does not have a formal deposit policy for custodial credit risk but follows the investment policy statutes of the State of South Carolina. As of December 31, 2011, none of the District’s bank balances of $2,464,386 (with a carrying value of $2,346,843) were exposed to custodial credit risk.

Investments As of December 31, 2011, the District had the following investments and maturities:

Credit Fair Weighted AverageInvestment Type Rating ^ Value Maturity

Cash and Investments Held by County Treasurer NR 143,900$ 1 - 3 Years

Money Market Mutual Fund,Investing in U.S. Government Securities AAAm, Aaa 1,001,157 < 1 Year

Total 1,145,057$

If available, credit ratings are for Standard & Poor’s and Moody’s Investors Service.

Interest Rate Risk: The District does not have a formal policy limiting investment maturities that would help manage its exposure to fair value losses from increasing interest rates but they do follow the investment policy statutes of the State of South Carolina. Custodial Credit Risk for Investments: Custodial credit risk for investments is the risk that, in the event of a bank failure, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The District does not have an investment policy for custodial credit risk but follows the investment policy statutes of the State of South Carolina.

27


III. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES (CONTINUED)

A. Deposits and Investments (Continued) Investments (Continued) Credit Risk for Investments: Credit risk for investments is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The District does not have an investment policy for credit risk but follows the investment policy statutes of the State of South Carolina. Concentration of Credit Risk for Investments: The District places no limit on the amount the District may invest in any one issuer. Investments issued by or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools and other pooled investments are exempt from concentration of credit risk disclosures. Certain cash, cash equivalents, and investments of the District are legally restricted for specified purposes. The major types of restrictions at December 31, 2011 were (a) those imposed by the revenue source (i.e. hospitality taxes, etc.), (b) debt service reserve funds, and (c) unspent debt proceeds.

B. Receivables and Deferred/Unearned Revenue Property Taxes

Greenville County, South Carolina (the “County”) is responsible for levying and collecting sufficient property taxes to meet its funding obligation for the District. This obligation is established each year by the Greenville County Council and does not necessarily represent actual taxes levied or collected. The property taxes are considered both measurable and available for purposes of recognizing revenue and a receivable from the County at the time they are collected by the County. Property taxes are levied and billed by the County on real and business personal properties on October 1 based on an assessed value of approximately $1.3 billion at rates of 4.6 mills and 0.1 mills, for the General Fund and Debt Service Fund, respectively. These taxes are due without penalty through January 15. Penalties are added to taxes depending on the date paid as follows:

January 16 through February 1 - 3% of tax

February 2 through March 15 - 10% of tax

After March 15 - 15% of tax plus collection costs

Current year real and business personal taxes become delinquent on March 16. Unpaid property taxes become a lien against the property as of June 1 of the calendar year following the levy date. The levy date for motor vehicles is the first day of the month in which the motor vehicle license expires. These taxes are due by the last day of the same month.

The District recorded a receivable for uncollected property taxes at December 31, 2011 of $3,940,745. The District recorded a deferred revenue liability on the governmental fund basic financial statements equal to the property taxes receivable since the District only recognizes revenues for collections received by December 31. The District also had a $1,499,582 receivable from the County Treasurer related to property taxes collected by the County during the month of December 2011 which were not remitted to the District until January 2012.

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B. Receivables and Deferred/Unearned Revenue (Continued) Other Receivables The District has receivables (a) for grant projects where expenditures have been incurred by the District but have not been reimbursed by the grantor by the end of the year, (b) intergovernmental revenues due from the County for hospitality tax project reimbursements, and (c) other miscellaneous receivables. Greenville County Council approved a funding plan that has invested over $50 million in new and renovated recreational facilities with a hospitality tax on prepared food and beverages in the unincorporated areas of the County. The tax is estimated to generate over $6 million annually. The funds have been used to build recreation amenities to attract tourists to Greenville County. Initial plans included new water parks; new and renovated athletic facilities to host regional tournaments; conversion of an old rail line, the Swamp Rabbit, into an eleven-mile greenway; and operation of Conestee Nature Park. The District received $6,647,740 of these funds during 2011. At December 31, 2011, $329,062 was due from the County and is reported in the accompanying financial statements as “Intergovernmental Receivable.”

C. Interfund Transfers

Interfund transfers for the year ended December 31, 2011, consisted of the following:

Fund Transfers In Transfers Out

Major Governmental Fund:General Fund -$ 1,908,041$ Debt Service Fund 1,160,656 - Capital Projects Fund 1,277,057 529,672

Major Enterprise Fund:

Enterprise Fund - 3,383,521

Totals 2,437,713$ 5,821,234$

Funds are transferred from the General Fund to the Debt Service Fund and Capital Projects Fund to provide resources for debt service payments and capital expenditures, respectively. Funds are transferred from the Capital Projects Fund to the Debt Service Fund to provide resources for debt service payments. Funds were transferred from the Enterprise Fund to the Governmental Activities to move the net assets (primarily capital assets and compensated absences) as a result of the District closing the Enterprise Fund effective January 1, 2011. Effective January 1, 2011, the District began accounting for the operations of its Discovery Island Family Aquatic Center in the General Fund as it does with its other water parks and aquatic centers. The Board approves the amount transferred annually during the budget process.

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D. Capital Assets Capital asset activity for the District’s governmental activities for the year ended December 31, 2011, was as follows:

Beginning Ending Balance Increases Decreases Transfers Balance

Governmental Activities:

Capital Assets, Non-Depreciable:Land 11,091,654$ 598,756 - - 11,690,410$ Construction In Progress 6,170,878 2,852,271 - (5,263,825) 3,759,324

Total Capital Assets, Non-Depreciable 17,262,532 3,451,027 - (5,263,825) 15,449,734

Capital Assets, Depreciable:Buildings, Recreational Sites, and Improvements 43,087,584 5,660,276 50,728 8,816,150 57,513,282 Office Furniture and Equipment 505,180 96,793 5,626 24,557 620,904 Transportation Equipment 1,488,697 194,180 - - 1,682,877 Maintenance and Recreational Equipment 5,798,103 677,698 - 520,818 6,996,619

Total Capital Assets, Depreciable 50,879,564 6,628,947 56,354 9,361,525 66,813,682

Less: Accumulated Depreciation for:Buildings, Recreational Sites, and Improvements 14,083,033 3,260,899 6,763 660,433 17,997,602 Office Furniture and Equipment 405,083 48,056 5,626 24,557 472,070 Transportation Equipment 974,668 217,834 - - 1,192,502 Maintenance and Recreational Equipment 2,419,939 720,165 - - 3,140,104

Total Accumulated Depreciation 17,882,723 4,246,954 12,389 684,990 22,802,278

Total Capital Assets, Depreciable, Net 32,996,841 2,381,993 43,965 8,676,535 44,011,404

Governmental Activities Capital Assets, Net 50,259,373$ 5,833,020 43,965 3,412,710 59,461,138$

Capital asset additions and depreciation expense for governmental activities were charged to functions/programs as follows:

Capital Asset DepreciationFunctions/Programs Additions Expense

Administrative 210,329$ 64,309$ Parks 9,792,610 3,882,197 The Pavilion 77,035 300,448

Total - Governmental Activities 10,079,974$ 4,246,954$

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D. Capital Assets (Continued)

Capital asset activity for the District’s business-type activities for the year ended December 31, 2011, was as follows:

Beginning Ending Balance Increases Decreases Transfers Balance

Business-Type Activities

Capital Assets, Depreciable:Buildings, Recreational Sites, and Improvements 4,073,143$ - - (4,073,143) -$ Office Furniture and Equipment 24,557 - - (24,557) -

Total Capital Assets, Depreciable 4,097,700 - - (4,097,700) -

Less: Accumulated Depreciation for:Buildings, Recreational Sites, and Improvements 660,433 - - (660,433) - Office Furniture and Equipment 24,557 - - (24,557) -

Total Accumulated Depreciation 684,990 - - (684,990) -

Total Capital Assets, Depreciable, Net 3,412,710 - - (3,412,710) -

Business-Type Activities Capital Assets, Net 3,412,710$ - - (3,412,710) -$

On January 1, 2011, the District transferred the Discovery Island Family Aquatic Center in the business-type activities to the governmental activities along with the accumulated depreciation associated with those assets.

Construction Commitments

The District has numerous ongoing projects as of December 31, 2011, primarily for building improvements/renovations and other construction projects at Conestee Park. Total construction commitments were approximately $134,000 at December 31, 2011.

E. Long-Term Obligations

The District issues bonds to provide funds for the acquisition and construction of major capital facilities. General obligation bonds (“GOB”) are direct obligations and pledge the full faith and credit of the District and are subject to the 8% debt limit requirement if not issued under a bond referendum. Revenue bonds are obligations of the District that are secured by revenue from a specific source. Lease purchase obligations are obligations of the District that are generally collateralized by the property underlying the obligation and are payable from the general revenues of the District. The full faith, credit, and taxing powers of the District are not pledged for the payment of revenue bonds and lease purchase obligations nor the interest thereon.

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E. Long-Term Obligations (Continued) Details on the District’s outstanding debt issues and lease purchase obligations as of December 31, 2011 are as follows:

General Obligation Bonds

Balance at December 31, 2011

$1,800,000 general obligation bonds issued in August 2003 (“GOB – Series 2003”), due in annual principal installments of $30,000 to $182,000 beginning on April 1, 2004 through April 1, 2017, plus interest at 4.06% due semi-annually. The proceeds from this issue were used to make various improvements to the parks throughout the District.

$854,000

$649,188 general obligation bonds issued in October 2005 (“GOB – Series 2005”), due in quarterly principal installments of $3,452 to $12,360 beginning on February 15, 2006 through August 15, 2025, plus interest at 4.52% due quarterly. The debt was entered into to build Corey Burns Park.

$509,941

Revenue Bonds

$915,000 refunding revenue bonds issued in August 2009 (“RB – Series 2009 (R-2)”), due in annual principal installments of $215,000 to $245,000 beginning April 1, 2009 through April 1, 2013, plus interest at 3.01%, due semi-annually. The proceeds from this issue were used to refund the Series 2003 Revenue Bond.

$475,000

$5,330,000 refunding revenue bonds issued in October 2011 (“RB – Series 2011”), due in annual principal installments of $315,000 to $520,000, plus interest at 3.02%, due semi-annually. The proceeds from this issue were used to refund the Series 2009 (R-1) Revenue Bond, which were used to build Pleasant Ridge Camp and Retreat Center and the Staunton Bridge Road Community Center.

$5,330,000

Lease Purchase Obligations

$1,148,555 lease purchase agreement entered into in October 2011 (“2011 Equipment Lease”). The proceeds from this refunding lease were used to refund the 2008 Vehicles, 2008 Athletic Field, 2009 Vehicle/Mowers, and the 2010 Bus Leases. The lease purchase agreement consists of four different payment schedules containing the following payment terms:

Annual payments of $101,109 beginning March 4, 2012 through March 4, 2013 including interest at 2.10%.

Annual payments of $63,199 beginning April 14, 2012 through April 14, 2019 including interest at 2.42%.

Annual payments of $66,934 beginning April 14, 2012 through April 14, 2014 including interest at 2.18%.


$1,148,555

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E. Long-Term Obligations (Continued)

Lease Purchase Obligations (Continued) Balance at

December 31, 2011

$1,487,282 lease purchase agreement entered into in October 2011 (“2011 Real Estate Lease”). The proceeds from this refunding lease were used to refund the 2004 Administration Building, 2008 Park Renovation, and the 2008 Park Land Leases. The lease purchase agreement consists of three different payment schedules containing the following payment terms:

Annual payments of $67,291 beginning November 12, 2011 through November 12, 2019 including interest at 2.46%.


Annual payments of $25,315 beginning May 23, 2012 through May 23, 2018 including interest at 2.37%.

$1,420,815

$193,500 lease purchase agreement was entered into in March 2011 (“2011 Vehicles Lease”), with 5 annual payments of $41,806 beginning March 11, 2012 and ending March 11, 2016 which include interest at 2.63%. The proceeds from this lease purchase were used to purchase nine vehicles for the District.

$193,500

General Obligation Bond Debt Limitations The State of South Carolina limits the amount of general obligation debt that a unit of government can issue to 8% of the total assessed value of taxable property located within that government’s boundaries. The District had $1,363,941 of bonded debt subject to the 8% limit and as of December 31, 2011, the District was well below the legal debt limit. In addition, any issuances of general obligations bonds must also be approved by Greenville County Council.

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E. Long-Term Obligations (Continued)

Presented below is a summary of changes in long-term obligations for the District’s governmental activities for the year ended December 31, 2011:

Long-Term ObligationsBeginning Balance Additions Reductions

Refunding Transactions

Ending Balance

Due Within One Year

Governmental Activities:Bond Debt:

Revenue Bonds:RB – Series 2009 (R-1) 5,535,000$ - (290,000) (5,245,000) - -$ RB – Series 2009 (R-2) 700,000 - (225,000) - 475,000 230,000 RB – Series 2011 - - - 5,330,000 5,330,000 315,000

Total Revenue Bonds 6,235,000 - (515,000) 85,000 5,805,000 545,000

General Obligation Bonds:GOB – Series 2003 996,000 - (142,000) - 854,000 149,000 GOB – Series 2005 536,147 - (26,206) - 509,941 27,411

Total GO Bonds 1,532,147 - (168,206) - 1,363,941 176,411

Total Bond Debt 7,767,147 - (683,206) 85,000 7,168,941 721,411

Lease Purchases:2008 Vehicles Lease 293,640 - (95,077) (198,563) - - 2008 Athletic Field Lease 503,463 - (48,240) (455,223) - - 2009 Vehicle/Mowers Lease 255,404 - (60,939) (194,465) - - 2010 Bus Lease 322,670 - (27,365) (295,305) - - 2004 Admin Building Lease 535,384 - - (535,384) - - 2008 Park Renovation Lease 815,672 - (50,211) (765,461) - - 2008 Park Land Lease 183,220 - (20,177) (163,043) - - 2011 Equipment Lease - - - 1,148,555 1,148,555 255,419 2011 Real Estate Lease - - (66,427) 1,487,243 1,420,816 145,921 2011 Vehicles Lease - 193,500 - - 193,500 36,717

Total Lease Purchases 2,909,453 193,500 (368,436) 28,354 2,762,871 438,057

Compensated Absences ^ 658,784 341,037 (293,014) - 706,807 360,472

Total Governmental Activities 11,335,384$ 534,537 (1,344,656) 113,354 10,638,619 1,519,940$

^ Prior year amount has been reclassified to include compensated absences from business-type activities of $26,774.

Resources from the General Fund and Debt Service Fund have been used to liquidate all of the governmental activities long-term obligations.

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E. Long-Term Obligations (Continued) Presented below is a summary of debt service requirements to maturity by year for the District’s governmental activities as of December 31, 2011:

Year Ending December 31, Principal Interest Principal Interest Principal Interest Total

Governmental Activities:

2012 176,411$ 54,237 545,000 158,671 438,057 40,155 1,412,531$

2013 184,671 46,785 575,000 150,157 418,485 59,729 1,434,827

2014 193,989 38,971 345,000 136,278 327,415 49,689 1,091,342

2015 204,368 30,751 360,000 125,632 268,641 41,499 1,030,891

2016 214,810 22,103 375,000 114,534 275,548 34,623 1,036,618

2017-2021 218,110 62,499 2,115,000 389,655 889,004 79,394 3,753,662

2022-2026 171,582 15,918 1,490,000 68,856 145,721 6,413 1,898,490

Totals 1,363,941$ 271,264 5,805,000 1,143,783 2,762,871 311,502 11,658,361$

General Obligation Bonds Lease Purchase ObligationsRevenue Bonds

2011 Debt Refunding In October 2011, the District issued $5,330,000 in Refunding Revenue Bonds and used these proceeds to (a) current refund the District’s Series 2009 (R-1) Revenue Bonds and (b) to pay the cost of issuance of the new debt. The current refundings resulted in immaterial deferred losses and thus no deferred losses were recorded. Issuance costs were not significant and thus have not been capitalized related to this issuance. As a result of this transaction, $5,245,000 of the District’s total debt was refunded during 2011. The current refunding decreased future debt service payments by approximately $418,000. The decrease in future debt service payments is largely due to the decrease in the interest rate on the new debt. In October 2011, the District issued $2,635,798 in refunding lease purchase obligations to primarily (a) current refund the District’s existing lease purchase obligations, and (b) to pay the cost of issuance of the new lease purchases. The current refundings resulted in immaterial deferred losses and thus no deferred losses were recorded. Issuance costs were not significant and thus have not been capitalized related to these issues. As a result of this transaction, seven lease purchase obligations of the District’s governmental activities of $2,607,444 were refunded during 2011. This current refunding decreased total future debt service payments by approximately $155,000. The decrease in future debt service payments is largely due to the decrease in the interest rate on the new debt.

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IV. OTHER INFORMATION

A. Retirement Plan Full time District employees participate in the South Carolina Retirement System (“SCRS”), a cost-sharing multiple-employer defined benefit pension plan. The SCRS offers retirement and disability benefits, cost of living adjustments on an ad-hoc basis, life insurance benefits, and survivor benefits. The Plans’ provisions are established under Title 9 of the South Carolina Code of Laws. Only the South Carolina State Budget and Control Board has authority to establish and amend the funding policy. A comprehensive annual financial report containing financial statements and required supplementary information for the SCRS is issued and publicly available by writing the South Carolina Retirement System, Post Office Box 11960, Columbia, South Carolina 29211-1960. Both employees and the District are required to contribute to the Plans at rates established under authority of Title 9 of the South Carolina Code of Laws. The District’s contributions are actuarially determined, but are communicated to and paid by the District as a percentage of the employees’ annual earnings.

2009 2010 2011

Employer Rate

Retirement 9.24% 9.24% 9.24%

Group Life Insurance Benefit 0.15% 0.15% 0.15%

Accidental Death Benefit N/A N/A N/A

9.39% 9.39% 9.39%

Employee Rate 6.50% 6.50% 6.50%

SCRS Rates

The required contributions and percentages of amounts contributed for the past three years were as follows:

Year Ending December 31, Required % Contributed % of Covered Payroll

2011 394,773$ 100% 9.39%2010 383,119 100% 9.39%2009 365,998$ 100% 9.39%

SCRS Contributions

B. Risk Management

The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees’ and natural disasters. For the past several years, the District has effectively managed this risk by obtaining coverage from the South Carolina Insurance Reserve Fund (“IRF”), a public entity risk pool currently operating as a common risk management and insurance fund, and through various employee education and prevention programs. The District pays annual premiums to the IRF and the South Carolina State Accident Fund for its general insurance and workers’ compensation coverage, respectively. All risk management activities are accounted for in the General Fund. Expenditures and claims are recognized when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. In determining claims, events that might create claims, but for which none have been reported, are considered. There have been no settlements that exceeded the District’s insurance coverage during the past three years. There were no significant reductions in insurance coverage from the prior year.

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IV. OTHER INFORMATION (CONTINUED) C. Health Insurance

The District maintains a fully insured health insurance program for District employees. The District pays a premium each month to the insurer and the insurance provider pays all covered claims.

D. Related Party Transaction

The Greater Greenville Parks Foundation (“Foundation”) receives donations on behalf of public parks and recreation providers in Greenville County and distributes received donations to the public service providers. The District provides in-kind support to the Foundation including staff support and office space. During 2011 the Foundation donated the Boundless Playground and other goods to the District along with cash donations. The values of the goods donated were approximately $186,000 and cash donations were approximately $25,000.

E. Restatement

The District discovered that it had understated its property tax receivable balance in the prior year for its governmental activities by $3,541,732. Property taxes due to the District at year end were omitted from the Statement of Net Assets instead of being properly recognized in the governmental activities financial statements. The District recorded a prior period adjustment in its December 31, 2011 government-wide financial statements for $3,541,732 to reflect the property tax receivable at December 31, 2010.

F. Subsequent Events

The District issued purchase orders and change orders after year end totaling approximately $1,485,000 for projects at Pleasant Ridge Camp and Retreat Center, Staunton Bridge Community Center, and Conestee Park. In 2012, the Conestee Foundation completed construction of the lower section of the Swamp Rabbit Trail, and a portion of the trail was donated to the District. The Conestee Foundation spent $783,000 to develop the donated portion of the trail, which was constructed on property owned by Renewable Water Resources (“ReWa”). The District has a long-term agreement with ReWa to maintain and manage this portion of the trail.

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Required Supplementary Information

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REQUIRED SUPPLEMENTARY INFORMATION - BUDGETARY COMPARISON SCHEDULE - GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGETS AND ACTUAL


VARIANCEWITH REVISED

ORIGINAL FINAL ACTUAL BUDGETREVENUES

Property Taxes 6,200,000$ 6,200,000 6,054,475 (145,525)$ Hospitality Taxes 800,000 800,000 1,184,784 384,784 Fees, Charges, and Rentals:

Administrative 56,837 56,837 50,368 (6,469) Recreation 995,279 995,279 1,017,055 21,776 Parks 1,911,915 1,911,915 1,845,191 (66,724) The Pavilion 1,318,503 1,318,503 1,410,107 91,604

Grants 730,914 730,914 633,284 (97,630) Sponsorships 20,724 20,724 12,453 (8,271) Events 64,375 64,375 101,038 36,663 Interest Earnings 15,000 15,000 1,624 (13,376) Miscellaneous 178,017 178,017 173,273 (4,744)

TOTAL REVENUE ALL SOURCES 12,291,564 12,291,564 12,483,652 192,088

EXPENDITURES

Current:Administrative 1,405,902 1,405,902 1,362,609 43,293 Recreation 2,746,605 2,746,605 2,612,464 134,141 Parks 5,446,085 5,446,085 5,824,755 (378,670) The Pavilion 1,339,760 1,339,760 1,443,849 (104,089)

Capital Outlay 69,000 69,000 - 69,000

TOTAL EXPENDITURES 11,007,352 11,007,352 11,243,677 (236,325)

EXCESS OF REVENUES OVER EXPENDITURES 1,284,212 1,284,212 1,239,975 (44,237)

OTHER FINANCING USES

Transfers Out (1,226,762) (1,226,762) (1,908,465) (681,703)

TOTAL OTHER FINANCING USES (1,226,762) (1,226,762) (1,908,465) (681,703)

NET CHANGE IN FUND BALANCE 57,450 57,450 (668,490) (725,940)

FUND BALANCE, Beginning of Year 3,238,448 3,238,448 3,238,448 -

FUND BALANCE, End of Year 3,295,898$ 3,295,898 2,569,958 (725,940)$

BUDGETED AMOUNTS

Note: The budget is presented on the modified accrual basis of accounting, which is consistent with accounting principles generally accepted in the United Statesof America.

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GREENVILLE COUNTY RECREATION DISTRICT TAYLORS, SOUTH CAROLINA NOTES TO THE BUDGETARY COMPARISON SCHEDULE YEAR ENDED DECEMBER 31, 2011

A. BASIS OF ACCOUNTING The budgetary comparison schedule has been presented on the modified accrual basis of accounting, which is consistent with accounting principles generally accepted in the United States of America. B. BUDGETARY INFORMATION

Prior to January 1st each year, the Board of Commissioners adopts an annual budget ordinance for the General Fund. The presented budgetary information is as originally adopted and as amended, if applicable, by the Board of Commissioners. The Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budgets and Actual – contains the original budget and the final budget. There were no amendments made to the District’s budget by the Board of Commissioners for the year ended December 31, 2011. The District does not adopt a budget for the Debt Service Fund or the Capital Projects Fund.

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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Board of Commissioners Greenville County Recreation District Taylors, South Carolina We have audited the financial statements of the governmental activities, the business-type activities, and each major fund of the Greenville County Recreation District (the “District”), as of and for the year ended December 31, 2011, which collectively comprise the District’s basic financial statements and have issued our report thereon dated May 18, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the District’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the basic financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control over financial reporting. 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 over financial reporting that might be deficiencies, significant deficiencies or material weaknesses and therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified However, as described in the accompanying schedule of findings and responses, we identified a certain deficiency in internal control over financial reporting that we consider to be a material weaknesses and another deficiency that we consider to be a significant deficiency. 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. We consider the deficiency described in the accompanying schedule of findings and responses as item 2011-1 to be a material weakness. A significant deficiency is a deficiency or a combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged by governance. We consider the deficiency described in the accompanying schedule of findings and responses as item 2011-2 to be a significant deficiency. Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s basic 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 basic 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. The District’s responses to our findings identified in our audit are described in the accompanying schedule of findings and responses. We did not audit the District’s responses and, accordingly, we express no opinion on them.

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This report is intended solely for the information and use of management, the Board of Commissioners, others within the District, and other government entities with oversight responsibility and is not intended to be and should not be used by anyone other than these specified parties.

Greene, Finney & Horton, LLP Mauldin, South Carolina May 18, 2012

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GREENVILLE COUNTY RECREATION DISTRICT TAYLORS, SOUTH CAROLINA SCHEDULE OF FINDINGS AND RESPONSES YEAR ENDED DECEMBER 31, 2011 2011-1: RECORDING OF PROPERTY TAXES RECEIVABLE AT YEAR-END Condition: The Greenville County Recreation District (the “District”) did not record a receivable for property

taxes as of December 31, 2010 to reflect the amount of property taxes it was owed at year-end.

Because the District does not recognize property tax revenue in the governmental funds until it has been collected (i.e., the property tax receivable is offset by a deferred and unearned revenue liability in the governmental funds), there was no impact on the fund balances of the governmental fund balances, including the General Fund. In the government-wide Statement of Net Assets, receivable balances are generally not deferred and the deferred and unearned revenue liability is generally not recognized. Because the District did not record a property tax receivable at December 31, 2010, the net assets of the governmental activities were understated by $3,541,732 at December 31, 2010.

Effect: A prior period adjustment was necessary to adjust the beginning net asset balance in the 2011

government-wide financial statements for $3,541,732 to reflect the property taxes receivable that should have been recorded at December 31, 2010.

Recommendation: The District should record a receivable for outstanding property taxes at year-end (and a related

deferred and unearned revenue liability in the governmental funds). Response: The District agrees with the auditors’ recommendation and in the future will record a receivable

for outstanding property taxes at year-end. 2011-2: RECORDING OF ACCOUNTS PAYABLE AT YEAR-END Condition: The District recorded its year-end accounts payable based on the date that the invoices were

received instead of when the services were received. After discussing the need to record accounts payable based on when the services were rendered and payment owed, the District revised its accounts payable balance by recording an additional amount reflecting services that had been rendered prior to year-end.

Effect: The District recorded a post-closing entry of $392,212, comprised of $273,916 in accounts

payable and $118,296 in retainage payable. Recommendation: We recommend that the District record accounts payable at year-end based on when the services

have been rendered and amounts have by earned by the vendor. Response: The District agrees with the auditors’ recommendation and in the future will record accounts

payable at year-end based on when the services have been rendered and the amounts earned by the vendor.

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Documents

GREENVILLE COUNTY RECREATION DISTRICT - Greenville Rec