SCHOOL DISTRICT OF CLAYTON TABLE OF CONTENTS Required Supplementary Information - Unaudited Schedule of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual - Cash Basis General Fund Special Revenue Fund Notes to Required Supplementary Information Net Pension Liability Schedule of Changes in Total OPEB Liability and Related Ratios Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Cash Basis Debt Service Fund Capital Projects Fund Annual Financial Information and Operating Data - Unaudited Page 63 64 65 67 69 71 72 74 Kerber, Eck & Braeckel LLP Board of Education School District of Clayton Independent Auditors' Report CPAs and Management Consu ltants One South Memorial Drive, Ste. 900 St. Louis, MO 63102 ph. 314.231 .6232 fax 314.880.9307 www.kebcpa.com We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the School District of Clayton, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the District's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we express no such opinion. 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.

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, 2019, 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 other 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 12, 2019, 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 oflaws, 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 12, 2019

St. Louis, Missouri December 12, 2019 SCHOOL DISTRICT OF CLAYTON · MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2019 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, 2019. 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, 2019 are as follows: • The total assets and deferred outflows of the District exceeded its liabilities and deferred inflows at the end of the 2019 fiscal year by $15.3 million (net position). • Net position decreased approximately $1.6 million or 9.2% from the prior year. • General revenues totaled $52.5 minion or 82.1 % of all revenues. Program revenues in the form of charges for services and operating grants and contributions accounted for $11.4 million or 17. 9% of all revenues. • Total expenses for the year were $65.5 million of which $52.5 million were funded by general revenues. • The General Fund had $18.0 million in revenues and $18.7 million in expenditures. The General Fund's balance decreased $455 thousand after transfers. • The Special Revenue Fund had $29.2 million in revenues and $32.2 million in expenditures. The Special Revenue Fund's balance decreased $3.0 million after transfers. • The Debt Service Fund had $8.6 million in revenues, $28.1 million in expenditures of which $19.3 million was paid from escrow due to a prior year refunding. The Debt Service Fund's balance decreased $19 .5 million primarily due to the bond payment from escrowed cash. • The Capital Projects Fund had $1.8 million in revenues, $5.1 million in proceeds from a capital lease and $1.5 million in expenditures. The Capital Projects Fund's balance increased $5.3 million after transfers primarily due to proceeds received from the capital lease. - 7 -

The Debt Service Fund's balance decreased $19 .5 million primarily due to the bond payment from escrowed cash. • The Capital Projects Fund had $1.8 million in revenues, $5.1 million in proceeds from a capital lease and $1.5 million in expenditures. The Capital Projects Fund's balance increased $5.3 million after transfers primarily due to proceeds received from the capital lease. - 7 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2019 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. 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. - 8 -