(11) The substance of any anticipated change in rules or anticipated adoption of new rules:

From the Annual Report per NCGS § 93B-2(b)

Financial Statements for the
Years Ended June 30, 2010 and 2009 and
Independent Auditor's Report

Shelton L. Hawley, C.P.A., P.A.
Certified Public Accounting Firm

MANAGEMENT'S DISCUSSION AND ANALYSIS

This section of the Board's financial report represents Management's analysis of the Board's financial performance during the years ending June 30, 2010 and 2009. Please read it in conjunction with the financial statements which follow this section.

Financial Highlights

During 2010, the Board's net assets decreased by $35,877, or 3.5%, due primarily to decrease in examination fees revenue. During 2009, the Board's net assets increased by $17,767, or 1.8%, due primarily to annually recurring revenues in excess of expenses.

During 2010, the operating revenues of the Board decreased by $62,022, or 7.1%, due primarily to a decrease in examination fees revenue. During 2009, the operating revenues of the Board increased by $54,374 or 6.7%, due primarily to an increase in license fees revenue.

During 2010, the non-operating revenues of the Board decreased by $7,120, or 32.9%, due to decrease in interest earnings rates. During 2009, the non-operating revenues of the Board decreased by $3,437, or 13.7%, due to decrease in interest earnings rates.

During 2010, the operating expenses of the Board decreased by $155,498, or 1.8%, due primarily to a decrease in examination expenses and legal fees. During 2009, the operating expenses of the Board increased by $159,849 or 22.4%, due primarily to an increase in legal fees, travel expenses and salaries (including employee benefits) expense.

STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS YEARS ENDED JUNE 30, 2010 AND 2009 From the Independent Auditor's Report, Shelton L. Hawley, CPA, PA, pages 5-6
	2010 Proprietary Enterprise Fund	2009 Proprietary Enterprise Fund
OPERATING REVENUES:
License and renewal fees (including late fees)	$  698,900	$  681,575
Examination fees	42,120	123,830
Hospital inspection fees	39,075	41,325
Reinstatement fees	1,325	825
Temporary permits	3,390	3,540
Service verifications	2,850	3,125
Corporate registration and application fees	8,700	8,250
Miscellaneous income      Total operating revenues	9,625 $  805,985	5,537 $  868,007
OPERATING EXPENSES:
Salaries - staff (including accumulated leave)	$  176,455	$  149,837
Salaries - inspections (including accumulated leave)	33,812	32,290
Salaries - investigations (including accumulated leave)	57,667	53,581
Payroll taxes	20,497	18,116
Retirement contributions (Note 6)	11,077	11,142
Employee insurance	27,533	19,534
Board members and meeting expenses (including hearing expenses)	22,233	22,762
Travel - staff	7,147	2,142
Travel - investigations	31,283	35,940
Travel - hospital inspections	17,646	18,626
Telephone	10,041	7,500
Building operating expenses	16,866	13,583
Depreciation	35,599	29,131
Examination expenses	4,600	61,320
Impairment fund expenses	67,500	67,500
Office equipment rental and maintenance expenses (Note 5)	13,279	13,814
Office and computer supplies	11,052	10,959
Online processing fees	17,293
Printing	2,635	5,077
Postage and shipping	6,741	11,419
Insurance and bonding	11,587	11,331
Dues and subscriptions	500	500
Legal, audit and other professional fees	250,857	271,826
Miscellaneous expenses            Total operating expenses	2,474 $  856,374	2,842 $  871,872
Operating income	$  ( 50,389)	$   (3,865)
NON-OPERATING REVENUES (EXPENSES)
Gain (loss) on disposition of capital assets	$	$
Interest income      Total non-operating revenues	14,512 $   14,512	21,632    $  21,632
Change in net assets	$   (35,877)	$  17,767
Net assets - beginning of year	1,017,844	1,000,007
Net assets - end of year	$ 981,967	$  1,017,844
Note 2 - Deposits and Investments (Continued) Investments At June 30, 2010 and 2009, the Board had the following investments and maturities.   June 30, 2010 June 30, 2009 Investment Type Fair Value 6 - 12 Months Fair Value 6 - 12 Months   Certificate of Deposit $100,000 $100,000 $100,000 $100,000 Certificate of Deposit $100,000 $100,000 $100,000 $100,000 Certificate of Deposit $100,000 $100,000 $100,000 $100,000   Total $300,000 $300,000 $300,000 $300,000   Note 5- Operating Leases The Board leased office equipment under an operating lease. The total rent expense charged to operations under the lease agreement was $1,047 for 2010 and $2,075 in 2009. There were no rental commitments under noncancellable operating leases at June 30, 2010. Note 6- Pension Plan and Postemployment Benefits other Than Pensions Simplified Employee Pension Plan On April 14, 1997, the Board entered into a Simplified Employee Pension plan agreement on behalf of employees of the Board. The Board's payroll for employees covered by the plan for the year ended June 30, 2010 was $221,540; the Board's total payroll was $267,934. The Board's covered payroll for the year ended June 30, 2009 was $222,840; total payroll was $236,808. The Board's covered payroll for the year ended June 30, 2008 was $200,180; total payroll was $208,771. The Board's pension contribution amounted to $11,077 for 2010, $11,142 for 2009 and $10,009 for 2008. The Board assumes no liability for retiree benefits provided by this program other than its required contributions. The Board has no postemployment benefits other than this defined contribution retirement plan.

 

Overview of the Financial Statements

This financial report consists of two sections: Management's Discussion and Analysis and the Financial Statements. The Board has no other supplementary information required by GASB 34. The Financial Statements also include notes to the financial statements that provide detail of the information included in the financial statements.

Basic Financial Statements

The financial statements of the Board report information about the Board using accounting methods similar to those used by private sector companies. These statements offer short and long-term financial information about the activities of the Board.

The Statements of Net Assets present the current and long-term portions of assets and liabilities separately.

The Statements of Revenues, Expenses, and Changes in Net Assets present information on how the Board's assets changed as a result of its operations.

The Statements of Cash Flows present information on how the Board's cash changed as a results of its financial activities.

Condensed Financial information

The following presents condensed financial information on the operations of the Board:

	Current Year as of and for the year ended June 30, 2010	Current Year as of and for the year ended June 30, 2009
Current assets	$    710,792	$    728,432
Capital assets	705,038	692,629
Total assets	$ 1,415,830	$ 1,421,061
Current liabilities	$    393,431	$    362,517
Long-term liabilities	40,432	40,700
Total liabilities	$    433,863	$    403,217
Invested in capital assets	$    705,038	$    692,629
Unrestricted	276,929	325,215
Total net assets	$    981,967	$ 1,017,844
Operating revenues	$    805,985	$    868,007
Operating expenses	(856,374)	(871,872)
Operating income	(   50,389)	(3,865)
Non-operating revenues	14,512	21,632
Change in net assets	$     35,877	$     17,767

Events Affecting Future Operations

The Board has indicated it has no significant events affecting future operations which are reportable pursuant to GASB 34.

Contacting the Board's Management

This financial report is designed to provide a general overview of the Board's finances and to demonstrate the Board's accountability for the money it receives. If you have any questions about this report or need additional information, contact: North Carolina Veterinary Medical Board, PO Box 37549, Raleigh, NC 27627.