An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the School District of Clayton, as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District of Clayton’s basic financial statements. The annual financial information and operating data and supplemental budgetary schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplemental budgetary schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental budgetary schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The annual financial information and operating data 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.

In our opinion, the supplemental budgetary schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The annual financial information and operating data 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 9. 2020, on our consideration of the School District of Clayton’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 solely to describe the scope of our testing of internal controls over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District of Clayton’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District of Clayton’s internal control over financial reporting and compliance. St. Louis, Missouri December 9, 2020

St. Louis, Missouri December 9, 2020 SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2020 The Management’s Discussion and Analysis (MD&A) of the School District of Clayton’s (District) financial performance provides a narrative overview of the District’s financial activities for the fiscal year ended June 30, 2020. The MD&A should not be taken as a replacement for the financial statements and other supplemental information but should be read in conjunction with them to enhance the reader’s understanding of the District’s financial performance. Financial Highlights Key financial highlights for the fiscal year ended June 30, 2020 are as follows:  The total assets and deferred outflows of the District exceeded its liabilities and deferred inflows at the end of the 2020 fiscal year by $24.1 million (net position).  Net position increased approximately $8.8 million or 57.5% from the prior year.  General revenues totaled $70.2 million or 86.8% of all revenues. Program revenues in the form of charges for services and operating grants and contributions accounted for $10.7 million or 13.2% of all revenues.  Total expenses for the year were $72.0 million of which $61.3 million were funded by general revenues.  The General Fund had $22.6 million in revenues and $18.0 million in expenditures. The General Fund’s balance increased $4.6 million before transfers.  The Special Revenue Fund had $39.1 million in revenues and $32.7 million in expenditures. The Special Revenue Fund’s balance increased $6.5 million before transfers.  The Debt Service Fund had $9.3 million in revenues and $8.3 million in expenditures. The District refunded bonds during the year which resulted in $31.1 million in proceeds and $32.5 million in payments. The Debt Service Fund’s balance increased $1.4 million.  The Capital Projects Fund had $2.8 million in revenues and $9.1 million in expenditures. The Capital Projects Fund’s balance decreased $6.4 million before transfers primarily due to spending the proceeds of the prior year's capital lease. - 7 -

The Debt Service Fund’s balance increased $1.4 million.  The Capital Projects Fund had $2.8 million in revenues and $9.1 million in expenditures. The Capital Projects Fund’s balance decreased $6.4 million before transfers primarily due to spending the proceeds of the prior year's capital lease. - 7 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2020 Using this Annual Report The District’s annual report consists of a series of financial statements that show information about the District as a whole, including its significant funds. The Statement of Net Position and the Statement of Activities (pages 21 and 22) provide information about the activities of the District as a whole and present a longer-term view of the District’s finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. Fund statements may also provide insight into the District’s overall financial health. Fund financial statements report the District’s operations in more detail than the government-wide financial statements by providing information about the District’s most significant funds. The notes to the basic financial statements provide further explanation of some of the information in the statements and provide additional disclosures and more detailed data. This will allow statement readers to have a more complete description and understanding of the District’s financial activities and position. The District prepares its annual budget on the cash basis of accounting, meaning that revenues are recognized when the District receives the money and the expenditures are recognized when checks are issued. To meet Governmental Accounting Standards Board (GASB) Statement No. 34, the District’s annual report uses both the modified accrual and accrual methods of accounting. Because of this difference, budget schedules will differ from the basic financial statements. The District’s auditor has provided assurance in the Independent Auditors' Report, located immediately preceding this MD&A, that the basic financial statements are presented fairly. Varying degrees of assurance are provided by the auditor regarding supplemental information. A user of this report should read the Independent Auditors' Report carefully to ascertain the level of assurance being provided for each of the other parts in the financial section. - 8 -

Varying degrees of assurance are provided by the auditor regarding supplemental information. A user of this report should read the Independent Auditors' Report carefully to ascertain the level of assurance being provided for each of the other parts in the financial section. - 8 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2020 Reporting the District as a Whole Statement of Net Position and the Statement of Activities The analysis of the District as a whole begins on page 21. This analysis provides answers to whether the District is financially stronger or weaker as a result of the year’s activities. The Statement of Net Position and the Statement of Activities, which appear first in the District’s financial statements, report information on the District as a whole and its activities in a way that helps answer this question. These statements include all assets and liabilities, using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year’s revenues and expenses regardless of when cash is received or paid. These two statements report the District’s net position – the difference between assets and deferred outflows compared to liabilities and deferred inflows, as reported in the Statement of Net Position. It is one way to measure the District’s financial health, or financial position. Over time, increases or decreases in the District’s net position – as reported in the Statement of Activities – is one indicator of whether its financial health is improving or deteriorating. The relationship between revenues and expenses indicates the District’s operating results. However, the District’s mission is to provide services to students, not to generate profits as commercial entities strive to do each year. Non-financial factors, such as the quality of the education provided, safety of the schools, facility conditions, the District’s property tax base and current state laws restricting revenue growth must also be considered to assess the overall health of the District. The Statement of Net Position and the Statement of Activities report the following activity for the District’s programs and services: Governmental Activities – Most of the District’s services, which includes instruction, support and plant services, are reported here. Property taxes, voluntary student transfer aid, state foundation and categorical grants, and state and federal grants finance most of these activities. Business-type Activities – The District’s business-type activities include services provided to constituents of the District where all or most of the costs involved are recovered through services charged to the users of such services or from transfers from other funds. - 9 -