Annual financial report, 2023 June 30, Towns County Board of Education, Hiawassee, Georgia, including independent auditor's report.

ANNUAL FINANCIAL REPORT FISCAL YEAR 2023
Towns County Board of Education
Hiawassee, Georgia
Including Independent Auditor's Report
Greg S. Griffin | State Auditor

Towns County Board of Education

Table of Contents

Section I Financial
Independent Auditor's Report

Required Supplementary Information

Management's Discussion and Analysis

i

Exhibits

Basic Financial Statements

Government-Wide Financial Statements

A

Statement of Net Position

1

B

Statement of Activities

2

Fund Financial Statements

C

Balance Sheet

Governmental Funds

3

D

Reconciliation of the Governmental Funds Balance Sheet

to the Statement of Net Position

4

E

Statement of Revenues, Expenditures and Changes in Fund Balances

Governmental Funds

5

F

Reconciliation of the Governmental Funds Statement of

Revenues, Expenditures and Changes in Fund Balances

to the Statement of Activities

6

G Notes to the Basic Financial Statements

8

Schedules

Required Supplementary Information

1 Schedule of Proportionate Share of the Net Pension Liability

Teachers Retirement System of Georgia

33

2 Schedule of Contributions Teachers Retirement System of Georgia

34

3 Schedule of Proportionate Share of the Net Pension Liability

Public School Employees Retirement System of Georgia

35

4 Schedule of Proportionate Share of the Net OPEB Liability

School OPEB Fund

36

5 Schedule of Contributions School OPEB Fund

37

6 Notes to the Required Supplementary Information

38

7 Schedule of Revenues, Expenditures and Changes in Fund

Balances - Budget and Actual General Fund

39

Supplementary Information

8 Schedule of Expenditures of Federal Awards

40

9 Schedule of State Revenue

42

10 Schedule of Approved Local Option Sales Tax Projects

44

Section II
Compliance and Internal Control Reports
Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
Independent Auditor's Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance Required by the Uniform Guidance

Section III Auditee's Response to Prior Year Findings and Questioned Costs Summary Schedule of Prior Audit Findings

Section IV Findings and Questioned Costs Schedule of Findings and Questioned Costs

Section I Financial

Greg S. Griffin State Auditor
INDEPENDENT AUDITOR'S REPORT
The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Dr. Darren Berrong, Superintendent and Members of the Towns County Board of Education
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the Towns County Board of Education (School District) as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the School District as of June 30, 2023, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.
We are required to be independent of the School District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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.
270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the School District's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 School District's internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the School District's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
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 listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 GAAS, 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 appropriate evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information, as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.
The supplementary information is the responsibility of management and was derived from and relates 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 GAAS. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated January 11, 2024 on our consideration of the School District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely 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 effectiveness of the School District'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's internal control over financial reporting and compliance.
A copy of this report has been filed as a permanent record and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,
Greg S. Griffin State Auditor
January 11, 2024

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TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023
INTRODUCTION
The Towns County Board of Education's (School District) financial statements for the fiscal year ended June 30, 2023 includes a series of basic financial statements that report financial information for the School District as a whole and its funds. The Statement of Net Position and the Statement of Activities provide financial information about all of the School District's activities and present both a short-term and long-term view of the School District's finances on a global basis. The fund financial statements provide information about all of the School District's funds. Information about these funds, such as the School District's general fund, is important in its own right, but will also give insight into the School District's overall soundness as reported in the Statement of Net Position and the Statement of Activities.
FINANCIAL HIGHLIGHTS
Key financial highlights for fiscal year 2023 are as follows:
On the government-wide financial statements:
The School District's net position at June 30, 2023 was almost $8.0 million. Net position reflects the difference between all assets and deferred outflows of resources of the School District (including capital assets, net of depreciation/amortization) and all liabilities, both short-term and long-term, and deferred inflows of resources. The net position at June 30, 2023 of $8.0 million represented a very modest increase of almost $103,000 when compared to the prior year.
The School District had almost $19.7 million in expenses relating to governmental activities; almost $7.9 million of the $19.7 million in expenses were offset by program specific charges for services, grants and contributions. The general revenues (primarily property and sales taxes) and special item of over $11.9 million were adequate to provide for these programs.
As stated above, general revenues and special item accounted for over $11.9 million or about 60.3% of all revenues totaling $19.8 million. Program specific revenues in the form of charges for services, grants, and contributions accounted for the balance of these revenues. (Percentages in table below have been rounded to one decimal place).

Source of Revenues

General Revenue Property Taxes 40.5%
General Revenue Sales Taxes 16.8%

Program Revenues 39.6%

General Revenue All Other 3.1%

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TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023
On the fund financial statements:
Among major funds, the general fund had $19.7 million in revenues and over $18.4 million in expenditures. The general fund balance of $9.7 million at June 30, 2023 increased roughly $1.3 million from the prior year.
OVERVIEW OF THE FINANCIAL STATEMENTS
These financial statements consist of three parts: management's discussion and analysis (this section), the basic financial statements including notes to the financial statements and supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the government-wide and fund financial statements.
The government-wide financial statements include the `Statement of Net Position' and `Statement of Activities'. These statements provide information about the activities of the School District presenting both short-term and long-term information about the School District's overall financial status.
The fund financial statements focus on individual parts of the School District, reporting the School District's operation in more detail. The `governmental funds' statements disclose how basic services are financed in the short-term as well as what remains for future spending. In the case of the Towns County School District, the general fund and capital projects fund are considered to be major funds. The School District has no funds reported as nonmajor funds as defined by generally accepted accounting principles.
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements.
Government-Wide Statements
Since Towns County School District has no operations that have been classified as "business activities", the government-wide financial statements are basically a consolidation of all of the School District's operating funds into one column called governmental activities. In reviewing the government-wide financial statements, a reader might ask the question, are we in a better financial position now than last year? The `Statement of Net Position' and the `Statement of Activities' provide the basis for answering this question. These financial statements include all of the School District's assets, deferred outflows, liabilities and deferred inflows. These accounts use the accrual basis of accounting 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 School District's net position and any changes in net position. The change in net position is important because it tells the reader that, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the results of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs, student-teacher ratios, and other factors.
ii

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023
When analyzing government-wide financial statements, it is important to remember these statements are prepared using an economic resources measurement focus (accrual accounting) and involve the following steps to format the Statement of Net Position:
Capitalize current outlays for capital assets Depreciate/amortized capital assets and intangible right-to-use assets Report long-term debt, including pension and post-employment obligations, as a liability Calculate revenue and expense using the economic resources measurement focus and the accrual
basis of accounting Allocate net position as follows:
o Net Investment in Capital Assets o Restricted net position for amounts with constraints placed on the use by external sources
such as creditors, grantors, contributors or laws and regulations. o Unrestricted for no specific use.
Fund Financial Statements
The School District uses many funds or sub-funds to account for a multitude of financial transactions during the fiscal year. The fund financial statements presented in this report provide detailed information about the School District's significant or major funds. As discussed previously, the School District has no nonmajor funds as defined by generally accepted accounting principles.
The School District has one kind of fund as discussed below:
Governmental Funds The School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using the modified accrual method of accounting which measures cash and all other financial assets that can be readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The differences between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled in the financial statements.
FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE
Net position, which is the difference between total assets, deferred outflows of resources, total liabilities and deferred inflows of resources, is one indicator of the financial condition of the School District. When revenues exceed expenses, the result is an increase in net position. When expenses exceed revenues, the result is a decrease in net position. The relationship between revenues and expenses can be thought of as the School District's operating results. The School District's net position, as measured in the Statement of Net Position is one way to measure the School District's financial health, or financial position. Over time, increases or decreases in the School District's net position as measured in the Statement of Activities are one indicator of whether its financial health is improving or deteriorating.
iii

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023

However, the School District's goal and mission is to provide success for each child's education, not to generate profits as private corporations do. For this reason, many other nonfinancial factors should be considered in assessing the overall health of the School District.

In the case of the Towns County School District, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by almost $8.0 million at June 30, 2023. To better understand the School District's actual financial position and ability to deliver services in future periods, it is necessary to review the various components of the net position category. For example, of the $8.0 million of net position, over $1.0 million was restricted for continuation of various state and federal programs, and ongoing capital projects. Accordingly, these funds were not available to meet the School District's ongoing obligations to citizens and creditors.

In addition, the School District had almost $20.5 million (net of related debt) invested in capital assets and intangible right-to-use assets (e.g., land, buildings, and equipment). The School District uses these capital assets to provide educational services to students within geographic boundaries served by the School District. Because of the very nature and on-going use of the assets being reported in this component of net position, it must be recognized that this portion of the net position is not available for future spending.

Because of the restrictions on net position as discussed above, the School District had an unrestricted (deficit) of about $13.5 million at June 30, 2023. The reader should remember this deficit includes pension related charges recorded because of GASB Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date on Amendment to GASB 68; and also includes charges recorded because of GASB Statement No. 75, Accounting and Financial Reporting for Post-employment Benefits Other than Pensions. The School District believes it is also meaningful to view the School District's net position in the following manner:

Net Position associated with pension obligations

$

(10,174,022)

Net position associated with postemployment benefits other than

(13,168,217)

Net position exclusive of pension obligations and postemployment benefits

31,325,658

Net position, June 30, 2023

$

7,983,419

The above analysis reflects, despite pension obligations and postemployment benefits, the School District's net position is a positive $8.0 million and management believes the School District's financial position is sound.

iv

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023

Table 1 provides a summary of the School District's net position for this fiscal year as compared to the prior fiscal year.

Table 1 Net Position

Assets Current and Other Assets Capital Assets, Net

Governmental Activities

Fiscal Year

Fiscal Year

2023

2022

$

12,817,999 $

11,943,032

20,550,081

20,872,956

Total Assets

33,368,080

32,815,988

Deferred Outflows of Resources Related to Defined Benefit Pension Plan Related to OPEB Plan

8,944,496 2,723,429

3,813,413 2,778,516

Total Deferred Outflows of Resources

11,667,925

6,591,929

Total Assets and Deferred Outflows of Resources

45,036,005

39,407,917

Liabilities Current and Other Liabilities Long-Term Liabilities Net Pension Liability Net OPEB Liability

1,822,723 219,699
18,746,696 9,690,065

1,715,742 157,034
5,151,205 10,472,219

Total Liabilities

30,479,183

17,496,200

Deferred Inflows of Resources Related to Defined Benefit Pension Plan Related to OPEB Plan

371,822 6,201,581

7,823,939 6,206,960

Total Deferred Inflows of Resources

6,573,403

14,030,899

Total Liabilities and Deferred Inflows of Resources

37,052,586

31,527,099

Net Position

Net Investment in Capital Assets Restricted Unrestricted (Deficit)

20,456,324 1,011,363
(13,484,268)

20,828,169 1,736,285
(14,683,636)

Total Net Position

$

7,983,419 $

7,880,818

v

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023
In connection with the unrestricted deficit at June 30, 2023 as shown above, management presents the following additional information:

Total unrestricted net position (deficit)
Unrestricted deficit in net position resulting from recognition of net pension obligations

$

(13,484,268)

10,174,022

Unrestricted deficit in net position resulting from recognition of postemployment benefits other than pension obligations

13,168,217

Unrestricted net position, exclusive of the net pension obligation and postemployment benefits effect

$

9,857,971

The above analysis shows that the recognition of liabilities for pension obligations and post-employment benefits on the financial statements as required by generally accepted accounting principles has had a severe effect on the School District's unrestricted net position. However, despite these obligations, management believes the School District's financial position is sound.

vi

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023

Table 2 below provides a summary of the School District's change in net position as compared to the prior year.

Table 2 Change in Net Position

Revenues Program Revenues: Charges for Services Operating Grants and Contributions Capital Grants and Contributions Total Program Revenues
General Revenues: Property Taxes Sales Taxes Investment Earnings Miscellaneous
Special Item Loss on Disposal of Capital Assets
Total General Revenues and Special Item Total Revenues and Special Item
Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Other Support Services Operations of Non-Instructional Services Enterprise Operations Community Services Food Services Interest on Long-Term Debt Total Expenses

Governmental Activities

Fiscal Year

Fiscal Year

2023

2022

$

299,561 $

150,219

7,474,968

7,901,739

77,220

-

7,851,749

8,051,958

7,994,948 3,329,546
215,794 420,616
(29,087) 11,931,817 19,783,566

7,619,917 3,162,951
9,903 455,571
(321,163) 10,927,179 18,979,137

11,847,139
1,732,086 256,250 372,535 442,328 982,077 249,107
1,757,291 790,480 1,197 93,132
147,378 21,738
986,576 1,651
19,680,965

10,213,453
1,240,420 213,936 245,039 353,224 799,143 191,990
1,624,798 822,702 86,714
119,505 12,923
771,935 1,823
16,697,605

Increase in Net Position

$

102,601 $

2,281,532

vii

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023

Cost of Providing Services

The Statement of Activities shows the cost of program services, charges for services, and grants offsetting these services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity as compared to the prior fiscal year.

Table 3 Cost of Services

Total Cost of Services

Fiscal Year 2023

Fiscal Year 2022

Net Cost of Services

Fiscal Year 2023

Fiscal Year 2022

Instruction

$ 11,847,139 $

Support Services

Pupil Services

1,732,086

Improvement of Instructional Services

256,250

Educational Media Services

372,535

General Administration

442,328

School Administration

982,077

Business Administration

249,107

Maintenance and Operation of Plant

1,757,291

Student Transportation Services

790,480

Central Support Services

1,197

Other Support Services

93,132

Operations of Non-Instructional Services

Enterprise Operations

147,378

Community Services

21,738

Food Services

986,576

Interest on Long-Term Debt

1,651

Total Expenses

$ 19,680,965 $

10,213,453 $
1,240,420 213,936 245,039 353,224 799,143 191,990
1,624,798 822,702 86,714
119,505 12,923
771,935 1,823
16,697,605 $

7,534,221 $
1,435,165 94,148
210,385 40,554
461,188 69,823
1,097,749 425,336 92,955
70,423 21,738 273,880
1,651
11,829,216 $

5,677,656
979,909 94,841 80,341
(103,954) 285,138
18,164 1,044,701
555,081 -
86,496
62,273 12,923 (149,746)
1,823
8,645,646

The overall School District expenses increased by almost $3.0 million from the prior year while the net costs of providing those services increased by about $3.2 million. Both the increase in expenses and net costs of providing services from the prior year is primarily attributable to a net increase in pension and OPEB benefits expense in fiscal year 2023 of $2.2 million. The pension and OPEB benefits expense for both fiscal years was calculated by professional actuaries.

viii

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023
The chart below shows a functional summary of the expenses made by the School District during fiscal year 2023. The percentages are rounded to one decimal place.

Governmental Activities - Cost of Services
Instructional 60.2%

Support Services
33.9%

Interest on Debt 0.0%

All Others Food Service0.s9%
5.0%

FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS
Information about the School District's governmental funds is presented starting on Exhibit "C" of this report. Governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $19.7 million and total expenditures of almost $19.1 million in fiscal year 2023. Total governmental fund balances of almost $10.5 million at June 30, 2023, increased roughly $720,000 from the prior year.
General Fund Budget Highlights
The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the general fund. During the course of fiscal year 2023, the School District amended its general fund budget as needed.
The School District's budget is adopted at the aggregate level and maintained at the program, function, object, and site levels to facilitate budgetary control. The budgeting systems are designed to control the total budget, but provide flexibility to meet the ongoing programmatic needs. The budgeting systems are also designed to control total site budgets but provide flexibility for site management as well.
For the general fund, the final actual revenues of $19.7 million exceeded the final budgeted revenues by about $863,000. While revenues for property taxes and sales taxes both exceeded the budgeted amount by about $1.2 million and $0.8 million, respectively, actual federal revenues were $1.4 million under the budgeted amount. The primary reason federal revenues were less than budget is the fact the School District included several ESSER grants in the final budget that will be expended in fiscal year 2024 within its fiscal year 2023 budget.

ix

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023

The general fund's final actual expenditures of $18.4 million were less than the final budget by just over $2.1 million. The functions experiencing significant expenditures less than the final budget were instruction by $1.2 million, general administration by $234,000 and maintenance and operation by about $353,000.

CAPITAL ASSETS, INTANGIBLE RIGHT-TO-USE ASSETS AND LONG-TERM LIABILITIES

Capital Assets and Intangible Right-to-Use Assets

At fiscal year ended June 30, 2023, the School District had over $20.5 million invested in capital assets, net of accumulated depreciation and amortization, all in governmental activities. These assets are made up of a broad range of items including buildings and improvements, land, land improvements, instructional food service, transportation and maintenance equipment, and intangible right-to-use equipment. Table 4 reflects a summary of these balances, net of accumulated depreciation and amortization, as compared to the prior fiscal year.

Table 4 Capital Assets at June 30 (Net of Depreciation/Amortization)

Governmental Activities

Fiscal Year

Fiscal Year

2023

2022

Land Construction in Progress Buildings and Improvements Equipment Land Improvements Intangible Right-to-Use Equipment

$

951,265 $

951,265

-

128,335

16,112,892

16,328,236

1,215,515

1,084,016

2,185,484

2,328,191

84,925

52,913

Total

$ 20,550,081 $ 20,872,956

Additional information about the School District's capital assets can be found in the Notes to the Basic Financial Statements.

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TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023

Long-Term Liabilities

At June 30, 2023, the School District had about $220,000 in long-term liabilities outstanding which consisted of about $126,000 in compensated absences and about $94,000 in leases. The School District had no bond debt at June 30, 2023

Table 5 Change in Long-Term Liabilities

Governmental Activities

Fiscal Year

Fiscal Year

2023

2022

Compensated Absences Leases
Total Long-Term Liabilities

$

125,942 $

112,247

93,757

44,787

$

219,699 $

157,034

Additional information about the School District's liabilities can be found in the Notes to the Basic Financial Statements.
FACTORS BEARING ON THE SCHOOL DISTRICT'S FUTURE
Currently known circumstances that are expected to have a significant effect on financial position or results of operations in future years are as follows:
The School District is financially stable as evidenced by virtually no change in net position from the prior year. The School District's revenues from property taxes, on the fund level, increased about $400,000 from the prior year even though the millage rate was reduced from 6.863 mills to 6.55 mills for fiscal year 2023. The School District's student enrollment has remained fairly stable, however the School District does plan to construct a new agricultural facility in the near future estimated to cost about $2.4 million and will be partially funded with state funds of about $1.7 million.
The local economy continued to show only modest improvement during fiscal year 2023. The School District's revenues from its local option sales tax for education increased only about $166,000 from the prior year, while the School District's revenues from federal funds decreased about $240,000 or about 8% from the prior year. The decrease in federal funds was mainly due to a reduced amount of COVID-19 assistance provided by the federal government. The general fund had an unassigned fund balance of almost $9.1 million at June 30, 2023, which is an increase of about $1.3 million from the prior year.
The School District anticipates significant financial challenges going forward due to expected continued higher health insurance and benefit costs for employees. In spite of these challenges, the School District will continue to be a good steward of tax dollars while providing a quality educational opportunity.

xi

TOWNS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, investors and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Mrs. Myra Underwood, Finance Director for Towns County Board of Education, 67 Lakewood Circle, Suite C, Hiawassee, Georgia 30546. You may also email your questions to Mrs. Underwood at myra@townscountyschools.org.
xii

Towns County Board of Education

TOWNS COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2023
ASSETS Cash and Cash Equivalents Accounts Receivable, Net
Taxes State Government Federal Government Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation/Amortization)
Total Assets
DEFERRED OUTFLOWS OF RESOURCES Related to Defined Benefit Pension Plan Related to OPEB Plan
Total Deferred Outflows of Resources
LIABILITIES Accounts Payable Salaries and Benefits Payable Net Pension Liability Net OPEB Liability Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
DEFERRED INFLOWS OF RESOURCES Related to Defined Benefit Pension Plan Related to OPEB Plan
Total Deferred Inflows of Resources
NET POSITION Net Investment in Capital Assets Restricted for
Continuation of State and Federal Programs Capital Projects Unrestricted (Deficit)
Total Net Position

EXHIBIT "A"

GOVERNMENTAL ACTIVITIES

$

10,651,108.03

1,263,332.62 481,689.77 347,531.77 14,919.77 59,416.67 951,265.00
19,598,816.00 33,368,079.63

8,944,496.00 2,723,429.00 11,667,925.00

41,514.21 1,781,209.02 18,746,696.00 9,690,065.00
24,337.92 195,360.98 30,479,183.13

371,822.00 6,201,581.00 6,573,403.00

20,456,324.16

285,303.76 726,059.05 (13,484,268.47)

$

7,983,418.50

The notes to the basic financial statements are an integral part of this statement.

- 1 -

TOWNS COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023

EXHIBIT "B"

EXPENSES

CHARGES FOR SERVICES

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET POSITION

GOVERNMENTAL ACTIVITIES

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

Educational Media Services

General Administration

School Administration

Business Administration

Maintenance and Operation of Plant

Student Transportation Services

Central Support Services

Other Support Services

Operations of Non-Instructional Services

Enterprise Operations

Community Services

Food Services

Interest on Long-Term Debt

11,847,138.67 $
1,732,085.84 256,249.62 372,534.93 442,327.91 982,076.84 249,106.55
1,757,290.68 790,480.03 1,197.54 93,132.52
147,378.50 21,737.92
986,576.08 1,651.45

66,213.17 $
-
76,954.95 -
156,392.36 -

4,246,704.58 $
296,921.07 162,101.53 162,150.00 401,774.10 520,889.21 179,283.80 659,542.13 287,923.52
1,197.54 177.53
556,303.45 -

- $
77,220.00 -
-

(7,534,220.92)
(1,435,164.77) (94,148.09)
(210,384.93) (40,553.81)
(461,187.63) (69,822.75)
(1,097,748.55) (425,336.51) (92,954.99)
(70,423.55) (21,737.92) (273,880.27)
(1,651.45)

Total Governmental Activities

$

19,680,965.08 $

299,560.48 $

7,474,968.46 $

77,220.00

(11,829,216.14)

General Revenues Taxes Property Taxes For Maintenance and Operations Sales Taxes Special Purpose Local Option Sales Tax Local Option Sales Tax Other Sales Tax Investment Earnings Miscellaneous
Special Item Loss on Disposal of Capital Assets Total General Revenues and Special Item

7,994,948.29
5.68 3,242,254.85
87,285.15 215,794.46 420,615.69
(29,087.00) 11,931,817.12

Change in Net Position

102,600.98

Net Position - Beginning of Year

7,880,817.52

Net Position - End of Year

$

7,983,418.50

The notes to the basic financial statements are an integral part of this statement.

- 2 -

TOWNS COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2023

EXHIBIT "C"

ASSETS Cash and Cash Equivalents Accounts Receivable, Net
Taxes State Government Federal Government Inventories Prepaid Items
Total Assets
LIABILITIES Accounts Payable Salaries and Benefits Payable
Total Liabilities
DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Property Taxes
FUND BALANCES Nonspendable Restricted Committed Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances

GENERAL FUND

CAPITAL PROJECTS
FUND

TOTAL

$

9,925,048.98 $

1,263,332.62 481,689.77 347,531.77 14,919.77 59,416.67

$

12,091,939.58 $

726,059.05 $
-
726,059.05 $

10,651,108.03
1,263,332.62 481,689.77 347,531.77 14,919.77 59,416.67
12,817,998.63

$

41,514.21 $

1,781,209.02

1,822,723.23

- $ -

41,514.21 1,781,209.02 1,822,723.23

536,462.40

-

536,462.40

74,336.44 270,383.99 314,771.94 9,073,261.58 9,732,753.95

726,059.05
726,059.05

74,336.44 996,443.04 314,771.94 9,073,261.58 10,458,813.00

$

12,091,939.58 $

726,059.05 $

12,817,998.63

The notes to the basic financial statements are an integral part of this statement.

- 3 -

TOWNS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION JUNE 30, 2023

EXHIBIT "D"

Total fund balances - governmental funds (Exhibit "C")
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Land Buildings and improvements Equipment Land improvements Right-to-use assets Accumulated depreciation/amortization
Some liabilities are not due and payable in the current period and, therefore, are not reported in the funds. Net pension liability Net OPEB liability
Deferred outflows and inflows of resources related to pensions/OPEB are applicable to future periods and, therefore, are not reported in the funds. Related to pensions Related to OPEB
Taxes that are not available to pay for current period expenditures are deferred in the funds.
Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds. Lease liability payable Compensated absences payable
Net position of governmental activities (Exhibit "A")

$

10,458,813.00

$

951,265.00

22,452,536.00

2,929,348.00

3,947,497.00

105,852.00

(9,836,417.00)

20,550,081.00

$

(18,746,696.00)

(9,690,065.00)

(28,436,761.00)

$

8,572,674.00

(3,478,152.00)

5,094,522.00 536,462.40

$

(93,756.84)

(125,942.06)

(219,698.90)

$

7,983,418.50

The notes to the basic financial statements are an integral part of this statement.

- 4 -

TOWNS COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2023

EXHIBIT "E"

REVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues
EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services Operation Capital Outlay Debt Services Principal Interest Total Expenditures
Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES) Lease Liability Proceeds
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

CAPITAL PROJECTS
FUND

TOTAL

$

7,947,059.85 $

3,329,540.00

4,719,399.73

2,771,931.73

299,560.48

198,185.45

420,615.69

19,686,292.93

- $ 5.68 17,609.01 17,614.69

7,947,059.85 3,329,545.68 4,719,399.73 2,771,931.73
299,560.48 215,794.46 420,615.69 19,703,907.62

10,960,712.11
1,708,027.84 246,122.62 295,400.60 424,120.85 940,938.15 238,346.55
1,627,618.84 841,128.49 1,197.54 93,132.52 147,378.50 21,737.92 826,382.75 42,174.10
26,101.80 1,651.45
18,442,172.63
1,244,120.30

75,071.82

1,319,192.12

8,413,561.83

$

9,732,753.95 $

-
97,673.33 0.06 205,249.74 140,346.24 173,439.78 -
616,709.15
(599,094.46)

10,960,712.11
1,708,027.84 246,122.62 393,073.93 424,120.91 940,938.15 238,346.55
1,832,868.58 981,474.73 1,197.54 93,132.52 147,378.50 21,737.92 999,822.53 42,174.10
26,101.80 1,651.45
19,058,881.78
645,025.84

(599,094.46) 1,325,153.51
726,059.05 $

75,071.82 720,097.66 9,738,715.34 10,458,813.00

The notes to the basic financial statements are an integral part of this statement.

- 5 -

TOWNS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2023

EXHIBIT "F"

Net change in fund balances total governmental funds (Exhibit "E")
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. Capital outlay Depreciation expense - buildings Depreciation expense - equipment Depreciation expense - land improvements Amortization expense - right-to-use equipment
In the Statement of Activities, only the loss on the sale or disposal of the capital assets equipment is reported, whereas in the governmental funds, the entire proceeds from the sale increase financial resources. Thus, the change in net position differs from the change in fund balances by the carrying value of the capital assets sold or disposed of.
Proceeds received from leases are reported as liabilities in the Statement of Activities whereas in the governmental funds these proceeds are reported as other financing sources. Right-to-use equipment
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Unavailable property taxes June 30, 2022 June 30, 2023
District pension/OPEB contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension/OPEB liability is measured a year before the District's report date. Pension/OPEB expense, which is the change in the net pension/OPEB liability adjusted for changes in deferred outflows and inflows of resources related to pensions/OPEB, is reported in the Statement of Activities. Pension expense OPEB expense
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Compensated absences June 30, 2022 June 30, 2023
Repayment of long-term debt is reported as expenditures in the governmental funds but repayment reduces long-term liabilities in the Statement of Net Position Lease liability payments
Change in net position of governmental activities (Exhibit "B")

$

720,097.66

$

444,852.00

(420,937.00)

(124,306.00)

(167,707.00)

(25,690.00)

(293,788.00)

(29,087.00) (75,071.82)

$

(488,573.96)

536,462.40

47,888.44

$

(1,012,291.00)

732,446.00

(279,845.00)

$

112,246.96

(125,942.06)

(13,695.10)

26,101.80

$

102,600.98

The notes to the basic financial statements are an integral part of this statement.

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TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

NOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
Reporting Entity
The Towns County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below.
Basis of Presentation
The School District's basic financial statements are collectively comprised of the government-wide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness.
Government-Wide Statements:
The Statement of Net Position and the Statement of Activities display information about the financial activities of the overall School District. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Net Position presents the School District's assets, deferred outflows of resources, deferred inflows of resources and liabilities, with the difference reported as net position. Net position is reported in three categories as follows:
1. Net investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets.
2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation.
3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net position often has constraints on resources imposed by management which can be removed or modified.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
- 8 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements
The fund financial statements provide information about the School District's funds. Eliminations have been made to minimize the double counting of internal activities. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
The general fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.
The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST) that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets.
Basis of Accounting
The basis of accounting determines when transactions are reported on the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers certain revenues reported in the governmental funds to be available if they are collected within 60 days after year-end. The School District considers all intergovernmental revenues to be available if they are collected within 120 days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for leases and compensated absences, which are

- 9 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted resources available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
New Accounting Pronouncements
In fiscal year 2023, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements. This statement defines subscription-based information technology arrangements and provides uniform guidance for accounting and financial reporting for transactions that meet that definition. Under this statement, a government is required to recognize a subscription liability and an intangible right-to-use asset for contracts that meet the definition of a subscription-based information technology arrangement. The adoption of this statement did not have an impact on the School District's financial statements.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool (Georgia Fund 1) and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated (O.C.G.A.) 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
Receivables
Receivables consist of amounts due from property and sales taxes, grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
Inventories
Food Inventories
On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (calculated on the first-in, first-out basis). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

- 10 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Prepaid Items

Payments made to vendors for services that will benefit future accounting periods are recorded as prepaid items, in both the government-wide and governmental fund financial statements.

Capital Assets

On the government-wide financial statements, capital assets are recorded at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at the acquisition value on the date donated. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. The School District does not capitalize book collections or works of art.

Capital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities column in the government-wide financial statements.

Depreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives.

Capitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land

Land Improvements

$

Buildings

$

Building Improvements

$

Equipment

$

Intangible Assets

$

All 20,000.00 100,000.00
5,000.00 10,000.00 100,000.00

N/A 10 to 60 years 10 to 60 years 10 to 60 years
8 to 25 years Individually determined

During the fiscal year, management increased their capital asset policy for equipment from $5,000.00 to $10,000.00. Management also changed the estimated useful life for equipment from 8 to 50 years to 8 to 25 years. The changes in the capitalization threshold and estimated useful lives do not have a material or significant impact on the financial statements.

Intangible Right-To-Use Assets

Leases, as a lessee, are included as intangible right-to-use assets and lease obligations on the Statement of Net Position. An intangible right-to-use asset represents the School District's right to use an underlying asset for the lease term. Lease obligations represent the School District's liability to make lease payments arising from the lease agreement. Intangible right-to-use assets and lease obligations are recognized based on the present value of lease payments over the lease term, where the initial term exceeds 12 months. Residual value guarantees and the value of an option to extend or terminate a lease are reflected to the extent it is reasonably certain to be paid or exercised. Variable payments based on future performance or usage are not included in the measurement of the lease liability. Intangible rightto-use assets are amortized using a straight-line basis over the shorter of the lease term or useful life of the underlying asset.
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TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Capitalization thresholds of intangible right-to-use assets reported in the government-wide statements are as follows:
Capitalization Policy

Land

Land Improvements

$

Buildings

$

Building Improvements $

Equipment

$

Software

$

All 20,000.00
100,000.00 5,000.00
10,000.00 100,000.00

Leases as Lessee
The School District is a lessee for non-cancellable leases of various copiers and printers owned by 3rd parties.
At the commencement of a lease, the School District initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The right-to-use lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on the straight-line basis over the shorter of the useful life of the asset or the lease term.
Key estimates and judgments related to leases include how the School District determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments:
The lease term includes the non-cancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments the School District will make over the lease term.
The School District monitors changes in circumstances that would require a remeasurement of its lease and will re-measure the lease asset and lease liability if certain changes occur that are expected to significantly affect the amount of the lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported with current and long-term debt on the Statement of Net Position.

Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time.

- 12 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Compensated Absences
Members of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts.
Sick leave may vest with the employee in certain situations. Incentive pay is defined as any sick leave earned that is not eligible to be used in calculating an employee's retirement benefits. Employees are eligible to be paid incentive pay up to a maximum of 60 days. These payments are made at a rate of $50.00 per day for certified employees and $6.25 per hour for classified employees.
Incentive pay benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscal year-end.
Long-Term Liabilities
In the School District's government-wide financial statements, outstanding debt is reported as liabilities.
In the governmental fund financial statements, the School District recognizes the proceeds of debt as other financing sources of the current period.
Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Post-Employment Benefits Other than Pensions (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Georgia School Employees Post-Employment Benefit Fund (School OPEB Fund) and additions to/deductions from School OPEB Fund fiduciary net position have been determined on the same basis as they are reported by School OPEB Fund. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Fund Balances
Fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
The School District's fund balances are classified as follows:
Nonspendable consists of resources that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.

- 13 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Restricted consists of resources that can be used only for specific purposes pursuant constraints either (1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation.

Committed consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decisionmaking authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.

Assigned consists of resources constrained by the School District's intent to be used for specific purposes but are neither restricted nor committed. The intent should be expressed by (1) the Board or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.

Unassigned consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

Property Taxes

The Towns County Board of Commissioners adopted the property tax levy for the 2022 tax digest year (calendar year) on October 20, 2022 (levy date) based on property values as of January 1, 2022. Taxes were due on January 10, 2023 (lien date).Taxes collected within the current fiscal year or within 60 days after year-end on the 2022 tax digest are reported as revenue in the governmental funds for fiscal year 2023. The Towns County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2023, for maintenance and operations amounted to $7,947,059.85.

The tax millage rate levied for the 2022 tax digest year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

6.55 mills

Additionally, Title Ad Valorem Tax revenues, at the fund reporting level, which are included in property taxes shown above, amounted to $968,335.91 during fiscal year ended June 30, 2023.
Sales Taxes
Local Option Sales Tax revenue, at the fund reporting level, during the fiscal year amounted to $3,329,540.00 and was recorded in the general fund. Local Option Sales Tax is to be used for the maintenance and operation of the School District.

- 14 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Education Special Purpose Local Option Sales Tax (ESPLOST), at the fund level reporting level, during the year amounted to $5.68 and is to be used for capital outlay for educational purposes. The sales tax referendum under which this tax was collected expired September 30, 2020.
NOTE 3: BUDGETARY DATA
The budget is a complete financial plan for the School District's fiscal year and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general fund. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts and the Governor's Office of Highway Safety Grant, is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the general fund was prepared in accordance with accounting principles generally accepted in the United States of America.
The budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines, and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of O.C.G.A.20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Superintendent is authorized by the Board to approve adjustments as long as they do not exceed the aggregate level of expenditures for any fund. Any position or expenditure not previously approved in the annual budget that exceeds the aggregate level shall require Board approval. In such case, the expenditure shall be reported to the Board at its regularly scheduled meeting. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without the approval by the Board.
See the General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review.
NOTE 4: DEPOSITS
Collateralization of Deposits
O.C.G.A. 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110% of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110% of the daily pool balance.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, - 15 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by or securities guaranteed by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
Categorization of Deposits
Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2023, the School District had deposits with a carrying amount of $10,651,108.03, and a bank balance of $11,139,664.81. The bank balances insured by Federal depository insurance were $500,000.00.
At June 30, 2023, $10,639,664.81 of the School District's bank balances were exposed to custodial credit risk. This balance was in the State's Secure Deposit Program (SDP).
The School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased in the amount of up to 125% if economic or financial conditions warrant. The program lists the types of eligible criteria. The OST approves authorized custodians.
In accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized.

- 16 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

NOTE 5: CAPITAL ASSETS AND INTANGIBLE RIGHT-TO-USE ASSETS

The following is a summary of changes in the capital assets and intangible right-to-use assets for governmental activities during the fiscal year:

Governmental Activities Capital Assets,
Not Being Depreciated: Land Construction in Progress

Balances July 1, 2022

Increases

Decreases

Transfers

Balances June 30, 2023

$ 951,265.00 $

- $

128,335.00

46,205.00

- $

- $ 951,265.00

-

(174,540.00)

-

Total Capital Assets Not Being Depreciated

1,079,600.00

46,205.00

-

(174,540.00)

951,265.00

Capital Assets, Being Depreciated/Amortized Buildings and Improvements Equipment Land Improvements Intangible Right-to-Use Assets - Equipment
Less Accumulated Depreciation/Amortization: Buildings and Improvements Equipment Land Improvements Intangible Right-to-Use Assets - Equipment

22,246,943.00 2,689,954.00 3,922,497.00 100,064.00

31,053.00 267,522.00
25,000.00 75,072.00

28,128.00
69,284.00

174,540.00 -

22,452,536.00 2,929,348.00 3,947,497.00 105,852.00

5,918,707.00 1,605,938.00 1,594,306.00
47,151.00

420,937.00 124,306.00 167,707.00
25,690.00

16,411.00
51,914.00

-

6,339,644.00

-

1,713,833.00

-

1,762,013.00

-

20,927.00

Total Capital Assets, Being Depreciated/Amortized, Net

19,793,356.00 (339,993.00)

29,087.00 174,540.00 19,598,816.00

Governmental Activities Capital Assets - Net

$ 20,872,956.00 $ (293,788.00) $ 29,087.00 $

- $ 20,550,081.00

Current year depreciation and amortization expense by function is as follows:

Depreciation

Amortization

Total

Instruction

$

Support Services

Educational Media Services

School Administration

Maintenance and Operation of Plant

Student Transportation Services

Food Services

$

601,169.00 $
1,147.00 2,887.00 18,364.00 75,751.00 13,632.00
712,950.00 $

25,690.00 $
-
25,690.00 $

626,859.00
1,147.00 2,887.00 18,364.00 75,751.00 13,632.00
738,640.00

- 17 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

NOTE 6: LONG-TERM LIABILITIES

The changes in long-term liabilities during the fiscal year for governmental activities were as follows:

Balance July 1, 2022

Governmental Activities

Balance

Additions

Deductions June 30, 2023

Due Within One Year

Leases Compensated Absences (1)

$ 44,786.82 $ 75,071.82 $ 26,101.80 $ 93,756.84 $ 24,337.92

112,246.96

92,077.62

78,382.52

125,942.06

-

$ 157,033.78 $ 167,149.44 $ 104,484.32 $ 219,698.90 $ 24,337.92

(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements.
Leases
The School District has acquired various copiers and printers under the provisions of various contracts that convey control of the right to use another entity's asset for a period of time in an exchange or exchange-like transaction. These contracts are classified as leases for accounting purposes.
The following is a summary of the carrying values of intangible right-to-use assets under lease at June 30, 2023:
Governmental Activities

Equipment Less: Accumulated Amortizaion

$

105,852.00

20,927.00

$

84,925.00

During the current fiscal year, the School District entered into a lease agreement as lessee for the rightto-use copiers and printers at a cost of $75,071.82. This transaction qualifies as a lease for accounting purposes, and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of inception.
Leases currently outstanding are as follows:

Purpose

Interest Rates

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

Lease MMSA29914270 Lease MLA32761360

5.00% 7.50%

2/1/2022 6/1/2023

1/1/2026 $ 5/1/2027

30,780.42 $ 75,071.82

20,488.90 73,267.94

$

105,852.24 $

93,756.84

- 18 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

The following is a schedule of total lease payments:

Fiscal Year Ended June 30:

Principal

Interest

2024 2025 2026 2027

$

24,337.92 $

26,025.64

24,274.98

19,118.30

5,779.56 4,091.84 2,312.95
724.38

Total Principal and Interest $

93,756.84 $

12,908.73

Compensated Absences
Compensated absences represent obligations of the School District relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences.
NOTE 7: RISK MANAGEMENT
Insurance
The School District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors or omissions; job related illness or injuries to employees; and natural disasters.
Georgia School Boards Association Risk Management Fund
The School District participates in the Georgia School Boards Association Risk Management Fund (the Fund), a public entity risk pool organized on August 1, 1994, to develop and administer a plan to reduce risk of loss on account of general liability, motor vehicle liability, errors and omissions liability, cyber risk and property damage, including safety engineering and other loss prevention and control techniques, and to administer the Fund including the processing and defense of claims brought against members of the Fund. The School District pays an annual contribution to the Fund for coverage. Reinsurance is provided to the Fund through agreements by the Fund with insurance companies according to their specialty for property (including coverage for flood and earthquake), machinery breakdown, general liability, errors and omissions, crime, cyber risk and automobile risks. Reinsurance limits and retentions vary by line of coverage.
Workers' Compensation
Georgia School Boards Association Workers' Compensation Fund
The School District participates in the Georgia School Boards Association Workers' Compensation Fund (the Fund), a public entity risk pool organized on July 1, 1992, to develop, implement, and administer a program to reduce the risk of loss from employee accidents. The School District pays an annual contribution to the Fund for coverage. The Fund provides statutory limits of coverage for Workers' Compensation coverage and a $2,000,000 limit per occurrence for Employers' Liability coverage. Excess insurance coverage is provided through an agreement between the Fund and the Safety National Casualty Corporation to limit the Fund's exposure to large losses.
- 19 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Unemployment Compensation

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures with the related liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. The School District has not experienced any unemployment claims in the last two fiscal years.

Surety Bond

The School District purchased a surety bond to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent

$

50,000.00

NOTE 8: FUND BALANCE CLASSIFICATION DETAILS

The School District's financial statements include the following amounts presented in the aggregate at June 30, 2023:

Nonspendable

Inventories

$

Prepaid Assets

Restricted

Continuation of State Programs $

Continuation of Federal Programs

Capital Projects

Committed

School Activity Accounts

Unassigned

14,919.77 59,416.67 $
2,252.87 268,131.12 726,059.05

74,336.44
996,443.04 314,771.94 9,073,261.58

Fund Balance, June 30, 2023

$

10,458,813.00

When multiple categories of fund balance are available for an expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds.
NOTE 9: SIGNIFICANT CONTINGENT LIABILITIES

Federal Grants
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any costs which are disallowed under grant terms. Any disallowances resulting from the grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position.

- 20 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

NOTE 10: OTHER POST-EMPLOYMENT BENEFITS (OPEB)
Georgia School Personnel Post-Employment Health Benefit Fund
Plan Description: Certified teachers and non-certified public school employees of the School District as defined in 20-2-875 of the Official Code of Georgia Annotated (O.C.G.A.) are provided OPEB through the School OPEB Fund - a cost-sharing multiple-employer defined benefit post-employment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (Board). Title 20 of the O.C.G.A. assigns the authority to establish and amend the benefit terms of the group health plan to the Board.
Benefits Provided: The School OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for public school teachers, including librarians, other certified employees of public schools, regional educational service agencies and non-certified public school employees. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from Employees' Retirement System (ERS), Georgia Judicial Retirement System (JRS), Legislative Retirement System (LRS), Teachers Retirement System (TRS) or Public School Employees Retirement System (PSERS). If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered Standard and Premium Medicare Advantage plan options. Non-Medicare eligible retiree plan options include Health Reimbursement Arrangement (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The School OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the School OPEB Fund is permitted.
Contributions: As established by the Board, the School OPEB Fund is substantially funded on a payas-you-go basis; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the School OPEB Fund from the School District were $362,645.00 for the year ended June 30, 2023. Active employees are not required to contribute to the School OPEB Fund.
OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
At June 30, 2023, the School District reported a liability of $9,690,065.00 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2022. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2021. An expected total OPEB liability as of June 30, 2022 was determined using standard roll-forward techniques. The School District's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2022. At June 30, 2022, the School District's proportion was 0.097848%, which was an increase of 0.001159% from its proportion measured as of June 30, 2021.

- 21 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

For the year ended June 30, 2023, the School District recognized OPEB expense of ($369,801.00). At June 30, 2023, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

OPEB Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual

experience

$

386,785.00 $ 3,808,489.00

Changes of assumptions

1,475,817.00

1,959,829.00

Net difference between projected and actual

earnings on OPEB plan investments

59,107.00

-

Changes in proportion and differences between School District contributions and proportionate share of contributions

439,075.00

433,263.00

School District contributions subsequent to

the measurement date

362,645.00

-

Total

$ 2,723,429.00 $ 6,201,581.00

School District contributions subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ended June 30:

OPEB

2024 2025 2026 2027 2028 2029

$ (1,001,120.00)

$ (860,715.00)

$ (740,154.00)

$ (826,147.00)

$ (374,991.00)

$

(37,670.00)

- 22 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Actuarial Assumptions: The total OPEB liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2022:

OPEB:

Inflation

2.50%

Salary increases

3.00% 8.75%, including inflation

Long-term expected rate of return

7.00%, compounded annually, net of investment expense, and including inflation

Healthcare cost trend rate Pre-Medicare Eligible Medicare Eligible
Ultimate trend rate Pre-Medicare Eligible Medicare Eligible
Year of Ultimate trend rate

6.50% 5.00%
4.50% 4.50%

Pre-Medicare Eligible

2029

Medicare Eligible

2023

The Plan currently uses mortality tables that vary by age, gender, and health status (i.e. disabled or not disabled) as follows:

For TRS members: Post-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Post-retirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% was used for death prior to retirement. Future improvement in mortality rates was assumed using the MP-2019 Projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate.

- 23 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

For PSERS members: Pre-retirement mortality rates were based on the Pub-2010 General Employee Mortality Table, with no adjustment, with the MP-2019 Projection scale applied generationally. Post-retirement mortality rates for service retirements were based on the Pub-2010 General Healthy Annuitant Mortality Table (ages set forward one year and adjusted 101% for males and 103% for females) with the MP-2019 Projection scale applied generationally. Postretirement mortality rates for disability retirements were based on the Pub-2010 General Disabled Mortality Table (ages set back three years for males and adjusted 103% for males and 106% for females) with the MP-2019 Projection scaled applied generationally. Postretirement mortality rates for beneficiaries were based on the Pub-2010 General Contingent Survivor Mortality Table (ages set forward two years and adjusted 104% for males and 99% for females) with the MP-2019 Projection scale applied generationally.

The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2018, with the exception of the assumed annual rate of inflation which was changed from 2.75% to 2.50%, effective with the June 30, 2018 valuation.

The remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2021 valuation were based on a review of recent plan experience done concurrently with the June 30, 2021 valuation.

Projection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation.

The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class

Target Allocation

Long-Term Expected Real Rate of Return*

Fixed income Equities

30.00% 70.00%

2.00% 9.40%

Total

100.00%

* Net of inflation

- 24 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Discount Rate: In order to measure the total OPEB liability for the School OPEB, a single equivalent interest rate of 3.57% was used as the discount rate, as compared with last year's rate of 2.20%. The plan's fiduciary net position was projected to not be able to make all future benefit payments of current plan members. Therefore, the municipal bond rate as used for the long-term rate of return was applied to all periods of projected benefit payments to determine total OPEB liability. This is comprised mainly of the yield or index rate for 20 year tax-exempt general obligation bonds with an average rating of AA or higher (3.54% per the Municipal Bond Index Rate). The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employers will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Projected future benefit payments for all current plan members were projected through 2128.
Sensitivity of the School District's Proportionate Share of the Net OPEB Liability to Changes in the Discount Rate: The following presents the School District's proportionate share of the net OPEB liability calculated using the discount rate of 3.57%, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.57%) or 1-percentage-point higher (4.57%) than the current discount rate:

1% Decrease (2.57%)

Current Discount Rate (3.57%)

1% Increase (4.57%)

School District's proportionate share of

the Net OPEB liability

$

10,960,628.00 $

9,690,065.00 $

8,613,208.00

Sensitivity of the School District's Proportionate Share of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates: The following presents the School District's proportionate share of the net OPEB liability, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:

1% Decrease

Current Healthcare Cost Trend Rate

1% Increase

School District's proportionate share of

the Net OPEB liability

$

8,349,150.00 $

9,690,065.00 $

11,338,045.00

OPEB Plan Fiduciary Net Position: Detailed information about the OPEB plan's fiduciary net position is available in the Annual Comprehensive Financial Report, which is publicly available at https://sao.georgia.gov/statewide-reporting/acfr.

NOTE 11: RETIREMENT PLANS
The School District participates in various retirement plans administered by the State of Georgia, as further explained below.

Teachers Retirement System of Georgia (TRS)
Plan Description: All teachers of the School District as defined in O.C.G.A. 47-3-60 and certain other support personnel as defined by O.C.G.A. 47-3-63 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title47 of the O.C.G.A. assigns the

- 25 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

authority to establish and amend the benefit provisions to the State Legislature. The Teachers Retirement System of Georgia issues a publicly available separate financial report that can be obtained at www.trsga.com/publications.
Benefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6.00% of their annual pay during fiscal year 2023. The School District's contractually required contribution rate for the year ended June 30, 2023 was 19.98% of annual School District payroll, of which 19.65% of payroll was required from the School District and 0.33% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $1,657,555.00 and $31,386.64 from the School District and the State, respectively.
Public School Employees Retirement System (PSERS)
Plan Description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/financials.
Benefits Provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service.
Upon retirement, the member will receive a monthly benefit of $15.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.
Contributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined

- 26 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $36,118.00.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

At June 30, 2023, the School District reported a liability of $18,746,696.00 for its proportionate share of the net pension liability for TRS.

The TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows:

School District's proportionate share of the net pension liability

$ 18,746,696.00

State of Georgia's proportionate share of the net pension liability associated with the School District

347,125.00

Total

$ 19,093,821.00

The net pension liability for TRS was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2021. An expected total pension liability as of June 30, 2022 was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS during the fiscal year ended June 30, 2022.
At June 30, 2022, the School District's TRS proportion was 0.057732%, which was a decrease of 0.000511% from its proportion measured as of June 30, 2021.
At June 30, 2023, the School District did not have a PSERS liability for a proportionate share of the net pension liability because of a Special Funding Situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net PSERS pension liability associated with the School District is $283,401.00.
The PSERS net pension liability was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2021. An expected total pension liability as of June 30, 2022 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2022.
For the year ended June 30, 2023, the School District recognized pension expense of $2,726,989.00 for TRS and $71,219.00 for PSERS and revenue of $57,143.00 for TRS and $71,219.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel.
- 27 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

At June 30, 2023, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

TRS Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual

experience

$ 778,180.00 $

97,581.00

Changes of assumptions

2,821,976.00

-

Net difference between projected and

actual earnings on pension plan

investments

3,683,192.00

-

Changes in proportion and differences between School District contributions and proportionate share of contributions

3,593.00

274,241.00

School District contributions subsequent to

the measurement date

1,657,555.00

-

Total

$ 8,944,496.00 $ 371,822.00

The School District contributions subsequent to the measurement date for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30:

TRS

2024 2025 2026 2027

$ 1,842,374.00 $ 1,379,911.00 $ 1,022,335.00 $ 2,670,499.00

- 28 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Actuarial Assumptions: The total pension liability as of June 30, 2022 was determined by an actuarial valuation as of June 30, 2021, using the following actuarial assumptions, applied to all periods included in the measurement:

Teachers Retirement System:

Inflation

2.50%

Salary increases

3.00% 8.75%, average, including inflation

Investment rate of return

6.90%, net of pension plan investment expense, including inflation

Post-retirement benefit increases 1.50% semi-annually
Post-retirement mortality rates for service retirements and beneficiaries were based on the Pub-2010 Teachers Headcount Weighted Below Median Healthy Retiree mortality table (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. Post-retirement mortality rates for disability retirements were based on the Pub-2010 Teachers Mortality Table for Disabled Retirees (ages set forward one year and adjusted 106%) with the MP-2019 Projection scale applied generationally. The rates of improvement were reduced by 20% for all years prior to the ultimate rate. The Pub-2010 Teachers Headcount Weighted Below Median Employee mortality table with ages set forward one year and adjusted 106% as used for death prior to retirement. Future improvement immortality rates was assumed using the MP-2019 Projection scale generationally. These rates of improvement were reduced by 20% for all years prior to the ultimate rate.
The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2013 June 30, 2018, with the exception of the investment rate of return and payroll growth assumption.

Public School Employees Retirement System:

Inflation Salary increases Investment rate of return
Post-retirement benefit increases

2.50% N/A 7.00%,net of pension plan investment expense, including inflation 1.50% semi-annually

- 29 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

Mortality rates are as follows:
The Pub-2010 General Employee Table, with no adjustments, projected generationally with the MP-2019 scale is used for both males and females while in active service.
The Pub-2010 Family of Tables projected generationally with the MP-2019 Scale and with further adjustments are used for post-retirement mortality assumptions as follows:

Participant Type Service Retirees

Membership Table
General Healthy BelowMedian Annuitant

Set Forward (+)/ Setback (-) Adjustment to Rates

Male: +2; Female: +2

Male: 101%; Female: 103%

Disability Retirees

General Disabled

Male: -3; Female: 0

Male: 103%; Female: 106%

Beneficiaries

General Below-Median Contingent Survivors

Male: +2; Female: +2

Male: 104%; Female: 99%

The actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study for the period July 1, 2014 June 30, 2019.

The long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class

TRS/PSERS Target
Allocation

Long-Term Expected Real Rate of Return*

Fixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative

30.00% 46.30%
1.20% 12.30%
5.20% 5.00%

0.20% 9.40% 13.40% 9.40% 11.40% 10.50%

Total

100.00%

* Rates shown are net of inflation
Discount Rate: The discount rate used to measure the total TRS pension liability was 6.90%. The discount rate used to measure the total PSERS pension liability was 7.00%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plans' fiduciary net position were projected to be

- 30 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023

EXHIBIT "G"

available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the School District's Proportionate Share of the Net Pension Liability to Changes in the Discount Rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 6.90%, as well as what the School District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.90%) or 1-percentage-point higher (7.90%) than the current rate:

Teachers Retirement System:

1% Decrease (5.90%)

Current Discount Rate (6.90%)

1% Increase (7.90%)

School District's proportionate share of the

net pension liability

$

28,282,556.00 $

18,746,696.00 $ 10,959,405.00

Pension Plan Fiduciary Net Position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and PSERS financial report which is publicly available at www.trsga.com/publications and www.ers.ga.gov/financials.

NOTE 12: SPECIAL ITEM
During fiscal year 2023, the School District sold or otherwise disposed of certain capital assets. These items were removed from the capital assets records at their net carrying values and resulted in a net loss of $29,087.00. This amount is reflected as a net loss on disposal of capital assets and is reported as a special item on Exhibit B of this report.

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TOWNS COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA

SCHEDULE "1"

For the Year Ended
June 30

School District's proportion
of the Net Pension Liability (NPL)

School District's proportionate share
of the NPL

State of Georgia's proportionate share
of the NPL associated with the
School District

Total

School District's covered payroll

School District's proportionate share of the NPL as a percentage of its covered payroll

Plan fiduciary net position as a percentage
of the total pension liability

2023 2022 2021 2020 2019 2018 2017 2016 2015

0.057732% $ 18,746,696.00 $ 0.058243% $ 5,151,205.00 $ 0.059588% $ 14,434,546.00 $ 0.060230% $ 12,951,079.00 $ 0.060334% $ 11,199,283.00 $ 0.059298% $ 11,020,716.00 $ 0.059138% $ 12,200,829.00 $ 0.061321% $ 9,335,513.00 $ 0.064451% $ 8,142,534.00 $

347,125.00 $ 19,093,821.00 $ 7,951,530.89 96,226.00 $ 5,247,431.00 $ 7,719,448.95
265,010.00 $ 14,699,556.00 $ 7,823,587.60 238,680.00 $ 13,189,759.00 $ 7,486,814.56 142,000.00 $ 11,341,283.00 $ 7,277,264.22 161,506.00 $ 11,182,222.00 $ 6,915,146.60 207,343.00 $ 12,408,172.00 $ 6,600,638.78 151,936.00 $ 9,487,449.00 $ 6,603,774.14 123,431.00 $ 8,265,965.00 $ 6,674,890.70

235.76% 66.73%
184.50% 172.99% 153.89% 159.37% 184.84% 141.37% 121.99%

72.85% 92.03% 77.01% 78.56% 80.27% 79.33% 76.06% 81.44% 84.03%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 33 -

TOWNS COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA

SCHEDULE "2"

For the Year Ended June 30

Contractually required contribution

Contributions in relation to the contractually required
contribution

Contribution deficiency (excess)

School District's covered payroll

Contribution as a percentage of covered
payroll

2023

$

2022

$

2021

$

2020

$

2019

$

2018

$

2017

$

2016

$

2015

$

1,657,555.00 $ 1,547,124.00 $ 1,444,342.00 $ 1,624,090.00 $ 1,536,231.00 $ 1,206,536.00 $
971,856.00 $ 925,672.00 $ 854,546.01 $

1,657,555.00 $ 1,547,124.00 $ 1,444,342.00 $ 1,624,090.00 $ 1,536,231.00 $ 1,206,536.00 $
971,856.00 $ 925,672.00 $ 854,546.01 $

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

8,435,302.52 7,951,530.89 7,719,448.95 7,823,587.60 7,486,814.56 7,277,264.22 6,915,146.60 6,600,638.78 6,603,774.14

19.65% 19.46% 18.71% 20.76% 20.52% 16.58% 14.05% 14.02% 12.94%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 34 -

TOWNS COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA

SCHEDULE "3"

For the Year Ended
June 30

School District's proportion of the Net Pension Liability (NPL)

School District's proportionate share
of the NPL

State of Georgia's proportionate share
of the NPL associated with the
School District

Total

School District's covered payroll

School District's proportionate share of the NPL as a percentage of its covered payroll

Plan fiduciary net position as a
percentage of the total pension
liability

2023 2022 2021 2020 2019 2018 2017 2016 2015

0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

283,401.00 $ 28,128.00 $
198,138.00 $ 190,880.00 $ 171,802.00 $ 159,287.00 $ 200,056.00 $ 131,772.00 $ 110,827.00 $

283,401.00 $ 28,128.00 $
198,138.00 $ 190,880.00 $ 171,802.00 $ 159,287.00 $ 200,056.00 $ 131,772.00 $ 110,827.00 $

490,680.80 439,645.75 493,172.88 480,380.96 481,151.68 480,506.73 438,416.25 369,299.00 331,400.00

N/A

81.21%

N/A

98.00%

N/A

84.45%

N/A

85.02%

N/A

85.26%

N/A

85.69%

N/A

81.00%

N/A

87.00%

N/A

88.29%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 35 -

TOWNS COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY
SCHOOL OPEB FUND

SCHEDULE "4"

For the Year Ended
June 30

School District's proportion of the Net OPEB Liability (NOL)

School District's proportionate share
of the NOL

State of Georgia's proportionate
share of the NOL associated with the School District

Total

School District's covered-employee
payroll

School District's proportionate share of the NOL as a percentage of its coveredemployee payroll

Plan fiduciary net position
as a percentage of the total OPEB
liability

2023 2022 2021 2020 2019 2018

0.097848% $ 9,690,065.00 $ 0.096689% $ 10,472,219.00 $ 0.098155% $ 14,416,684.00 $ 0.101776% $ 12,490,099.00 $ 0.100676% $ 12,795,611.00 $ 0.094939% $ 13,338,891.00 $

-

$ 9,690,065.00 $ 7,827,078.36

-

$ 10,472,219.00 $ 7,642,280.06

-

$ 14,416,684.00 $ 7,765,958.08

-

$ 12,490,099.00 $ 7,563,365.36

-

$ 12,795,611.00 $ 7,392,102.60

-

$ 13,338,891.00 $ 6,909,485.92

123.80% 137.03% 185.64% 165.14% 173.10% 193.05%

6.17% 6.14% 3.99% 4.63% 2.93% 1.61%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 36 -

TOWNS COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND

SCHEDULE "5"

For the Year Ended June 30

Contractually required contribution

Contributions in relation to the contractually required
contribution

Contribution deficiency (excess)

School District's covered-employee
payroll

Contribution as a percentage of
covered-employee payroll

2023

$

2022

$

2021

$

2020

$

2019

$

2018

$

2017

$

362,645.00 $ 353,792.00 $ 359,667.00 $ 331,938.00 $ 548,135.00 $ 521,790.00 $ 495,023.00 $

362,645.00 $ 353,792.00 $ 359,667.00 $ 331,938.00 $ 548,135.00 $ 521,790.00 $ 495,023.00 $

-

$

8,219,828.62

-

$

7,827,078.36

-

$

7,642,280.06

-

$

7,765,958.08

-

$

7,563,365.36

-

$

7,392,102.60

-

$

6,909,485.92

4.41% 4.52% 4.71% 4.27% 7.25% 7.06% 7.16%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 37 -

TOWNS COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2023

SCHEDULE "6"

Teachers Retirement System Change of benefit terms: There have been no changes in benefit terms.
Changes of assumptions: On November 18, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males).
On May 15, 2019, the Board adopted recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%.
In 2019 and later, the expectation of retired life mortality was changed to the Pub-2010 Teacher Headcount Weighted Below Median Healthy Retiree mortality table from the RP-2000 Mortality Tables. In 2019, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience.
On May 11, 2022, the Board adopted recommended changes to the long-term assumed rate of return and payroll growth assumption utilized by the System. The long-term assumed rate of return was changed from 7.25% to 6.90%, and the payroll growth assumption was changed from 3.00% to 2.50%.
Public School Employees Retirement System Changes of benefit terms: There have been no changes in benefit terms.
Changes of assumptions: On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement and withdrawal. The expectation of retired life mortality was changed to the RP-2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females).
A new funding policy was initially adopted by the Board on March 15, 2018, and most recently amended on December 17, 2020. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation and further reduced from 7.40% to 7.30% for the June 30, 2018 actuarial valuation.
On December 17, 2020, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System based on the experience study prepared for the five-year period ending June 30, 2019. Primary among the changes were the updates to rates or mortality, retirement, disability, and withdrawal. This also included a change to the long-term assumed investment rate of return to 7.00%. These assumption changes are reflected in the calculation of the June 30, 2021 Total Pension Liability.
School OPEB Fund Changes of benefit terms: There have been no changes in benefit terms.
Changes in assumptions: June 30, 2020 valuation: Decremental assumptions were changed to reflect the Employees' Retirement System's experience study. Approximately 0.10% of employees are members of the Employees' Retirement System.
June 30, 2019 valuation: Decremental assumptions were changed to reflect the Teachers Retirement System's experience study.
June 30, 2018 valuation: The inflation assumption was lowered from 2.75% to 2.50%.
June 30, 2017 valuation: The participation assumption, tobacco use assumption and morbidity factors were revised.
June 30, 2015 valuation: Decremental and underlying inflation assumptions were changed to reflect the Retirement Systems' experience studies.
June 30, 2012 valuation: A data audit was performed and data collection procedures and assumptions were changed.
The discount rate was updated from 3.07% as of June 30, 2016 to 3.58% as of June 30, 2017, to 3.87% as of June 30, 2018, back to 3.58% as of June 30, 2019, and to 2.22% as of June 30, 2020.

- 38 -

TOWNS COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2023

SCHEDULE "7"

REVENUES Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous Total Revenues
EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Community Services Food Services Operation Capital Outlay Debt Service Principal Interest Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES) Other Sources Other Uses Proceeds from Lease Liability Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Adjustments
Fund Balances - Ending

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

VARIANCE OVER/UNDER

$

6,700,000.00 $

6,700,000.00 $

7,947,059.85 $

2,500,000.00

2,500,000.00

3,329,540.00

4,757,500.00

5,178,180.00

4,719,399.73

4,117,007.00

4,214,780.91

2,771,931.73

100,000.00

100,000.00

299,560.48

5,000.00

5,000.00

198,185.45

125,000.00

125,000.00

420,615.69

18,304,507.00

18,822,960.91

19,686,292.93

1,247,059.85 829,540.00 (458,780.27)
(1,442,849.18) 199,560.48 193,185.45 295,615.69 863,332.02

11,789,989.00
1,715,925.00 256,115.00 309,585.00 845,358.00
1,086,791.00 254,379.00
1,941,211.00 843,098.00 15,000.00 979,367.00 -
20,036,818.00 (1,732,311.00)

12,111,481.00
1,878,368.00 320,862.00 314,664.00 658,264.00
1,094,161.00 254,226.00
1,980,421.00 918,165.00 3,500.00 15,000.00 -
1,015,536.17 22,000.00
20,586,648.17 (1,763,687.26)

10,960,712.11
1,708,027.84 246,122.62 295,400.60 424,120.85 940,938.15 238,346.55
1,627,618.84 841,128.49 1,197.54 93,132.52 147,378.50 21,737.92 826,382.75 42,174.10
26,101.80 1,651.45
18,442,172.63 1,244,120.30

161,411.00 (161,411.00)
-

163,120.00 (163,120.00)
-

(1,732,311.00)

(1,763,687.26)

8,413,561.83

8,413,561.83

14,403.32

6,277.27

$

6,695,654.15 $

6,656,151.84 $

75,071.82 75,071.82
1,319,192.12
8,413,561.83
-
9,732,753.95 $

1,150,768.89
170,340.16 74,739.38 19,263.40
234,143.15 153,222.85
15,879.45 352,802.16
77,036.51 2,302.46
(78,132.52) (147,378.50)
(21,737.92) 189,153.42 (20,174.10)
(26,101.80) (1,651.45)
2,144,475.54 3,007,807.56
(163,120.00) 163,120.00
75,071.82 75,071.82
3,082,879.38
-
(6,277.27)
3,076,602.11

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual

(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of certain funds reported as a part of the general fund. The actual revenues and expenditures of those funds for fiscal year 2023 are as follows:

Revenues

Expenditures

School Activity Funds Governor's Office of Highway Safety

$

367,750.41 $

316,036.60

500.00

500.00

$

368,250.41 $

316,536.60

The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 39 -

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2023

SCHEDULE "8"

FUNDING AGENCY PROGRAM/GRANT Agriculture, U. S. Department of
Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program COVID-19 - National School Lunch Program Total Child Nutrition Cluster
Forest Service Schools and Roads Cluster Pass-Through From Office of the State Treasurer Schools and Roads - Grants to States
Other Programs Pass-Through From Georgia Department of Education Food Services State Administrative Expenses for Child Nutrition Total U. S. Department of Agriculture
Education, U. S. Department of Education Stabilization Fund Pass-Through From Georgia Department of Education COVID-19 - Elementary and Secondary School Emergency Relief Fund COVID-19 - Elementary and Secondary School Emergency Relief Fund COVID-19 - American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 - American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Homeless Children and Youth Total Education Stabilization Fund
Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States COVID-19 - American Rescue Plan - Grants to States Preschool Grants COVID-19 - American Rescue Plan - Preschool Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Rural and Low-Income School Program Supporting Effective Instruction State Grants Supporting Effective Instruction State Grants Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies Total Other Programs Total U. S. Department of Education

ASSISTANCE LISTING NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555 10.555

235GA324N1199 $ 235GA324N1199 225GA324N1099

120,903.30 603,570.47
38,323.17 762,796.94

10.665

468 Forest

28,346.81

10.560

225GA904N2533

1,067.24 792,210.99

84.425D 84.425D
84.425U
84.425W

S425D200012 S425D210012
S425U210012
S425W210011

1,273.86 479,860.00
944,000.63
16,483.19 1,441,617.68

84.027A 84.027A 84.027X 84.173A 84.173X

H027A210073 H027A220073 H027X210073 H173A220081 H173X210081

84.048A 84.358B 84.367A 84.367A 84.010A 84.010A

V048A220010 S358F220010 S367A210001 S367A220001 S010A210010-21A S010A220010

73,339.41 201,699.26
6,627.00 6,172.00 1,656.47 289,494.14
26,897.90 3,550.00 607.00
34,791.66 19,795.00 299,393.59 385,035.15 2,116,146.97

- 40 -

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2023

SCHEDULE "8"

FUNDING AGENCY PROGRAM/GRANT
Health and Human Services, U. S. Department of Head Start Cluster Pass-Through From Ninth District Opportunity, Inc. Head Start
Transportation, U. S. Department of Highway Safety Cluster Pass-Through From Department of Public Safety State and Community Highway Safety
Total Expenditures of Federal Awards

ASSISTANCE LISTING NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

93.600

04CH0104150200

147,761.31

20.600

SADD402TSP029 $

500.00 3,056,619.27

Notes to the Schedule of Expenditures of Federal Awards
Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Towns County Board of Education (the "Board") under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net position of the Board.
Note 2. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Note 3. Indirect Cost Rate
The Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Note 4. Transfers Between Programs Funds totaling $23,120.00 were transferred from the Student Support and Academic Enrichment program (ALN 84.424) and expended in the Title 1 Grants to Local Education Agencies (ALN 84.010) during Fiscal Year 2023.

See notes to the basic financial statements.

- 41 -

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2023
AGENCY/FUNDING GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-Term Adjustment Hold-Harmless One Time QBE Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Sparsity Vocational Supervisors Other State Programs Career, Technical and Agricultural Education Program Food Services Hygiene Products Preschool Disability Services Pupil Transportation - State Bonds Teachers Retirement Office of the State Treasurer Public School Employees Retirement CONTRACT Human Resources, Georgia Department of Family Connections

SCHEDULE "9"

GOVERNMENTAL FUND TYPE GENERAL FUND

$

93,007.09

232,331.00 21,461.00
497,428.00 47,383.00
201,382.00 27,959.00
413,150.00 370,743.00 179,678.00 736,077.00
33,245.00 2,422.00
34,621.00 18,933.00 71,206.00 22,535.00 11,850.00
495.00
227,899.00 229,232.00 134,101.00
78,302.00 331,380.00

210,631.00 45,946.00
117,807.00 7,167.00
60,514.00 27,036.00
726.00 35,528.00 77,220.00 31,386.64
36,118.00

52,500.00

$

4,719,399.73

See notes to the basic financial statements.

- 42 -

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TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2023

SCHEDULE "10"

PROJECT SPLOST 2016 (1) Remodeling, renovating, modifying, furnishing, and equipping school buildings, classrooms, instructional and support space, kitchens, auditoriums, and other facilities (including physical education/athletic facilities) at existing School District facilities;
(2) Acquiring furnishings, equipment and fixtures for new and existing facilities district-wide including, but not limited to, technology equipment, safety and security equipment, signage, band instruments, and other furnishings;
(3) Acquiring and installing energy savings equipment and technology;
(4) Acquiring and/or improving land for School District facilities;
(5) Acquiring books, digital resources, and other media for School District;
(6) Purchasing school buses or other vehicles; and
(7) Payment of expenses incident to accomplishing the foregoing.
Total

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

ESTIMATED COMPLETION
DATE

$

4,000,000.00 $

11,418,563.00

6/30/2024

1,000,000.00

2,000,000.00

2,000,000.00

1,000,000.00

-

10,000.00

900,000.00

900,000.00

500,000.00

500,000.00

100,000.00

90,000.00

$

8,500,000.00 $

15,918,563.00

6/30/2024 6/30/2024 6/30/2024 6/30/2024 6/30/2024 6/30/2024

- 44 -

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2023

SCHEDULE "10"

PROJECT SPLOST 2016 (1) Remodeling, renovating, modifying, furnishing, and equipping school buildings, classrooms, instructional and support space, kitchens, auditoriums, and other facilities (including physical education/athletic facilities) at existing School District facilities;
(2) Acquiring furnishings, equipment and fixtures for new and existing facilities district-wide including, but not limited to, technology equipment, safety and security equipment, signage, band instruments, and other furnishings;
(3) Acquiring and installing energy savings equipment and technology;
(4) Acquiring and/or improving land for School District facilities;
(5) Acquiring books, digital resources, and other media for School District;
(6) Purchasing school buses or other vehicles; and
(7) Payment of expenses incident to accomplishing the foregoing.
Total

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED IN PRIOR YEARS (3)

TOTAL COMPLETION
COST

EXCESS PROCEEDS NOT
EXPENDED

$ 173,786.50 $ 10,316,521.26 $

- $

-

275,985.35

1,656,025.05

-

-

8,150.00

-

-

-

8,405.00

-

-

-

-

416,206.45

-

-

150,382.24

-

-

-

0.06

-

-

-

$ 616,709.15 $ 12,388,752.76 $

- $

-

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax. (2) The School District's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Towns County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt.
Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

See notes to the basic financial statements.

- 45 -

Section II Compliance and Internal Control Reports

Greg S. Griffin State Auditor
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Dr. Darren Berrong, Superintendent and Members of the Towns County Board of Education
We have audited the financial statements of the governmental activities and each major fund of the Towns County Board of Education (School District) as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated January 11, 2024. We conducted our audit in accordance with the auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances 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 School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the School District's financial statements will not be prevented, or detected and corrected, on a timely basis. 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 with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the School District's financial statements are free from 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 financial statements. 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.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,
Greg S. Griffin State Auditor
January 11, 2024

Greg S. Griffin State Auditor
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE
The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Dr. Darren Berrong, Superintendent and Members of the Towns County Board of Education
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the Towns County Board of Education's (School District) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the School District's major federal programs for the year ended June 30, 2023. The School District's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs.
In our opinion, the School District complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.
Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the School District and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the School District's compliance with the compliance requirements referred to above.
270 Washington Street, SW, Suite 4-101 Atlanta, Georgia 30334 | Phone (404) 656-2180

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the School District's federal programs.
Auditor's Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the School District's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the School District's compliance with the requirements of each major federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the School District's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the School District's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.
Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance

requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Respectfully submitted,
Greg S. Griffin State Auditor
January 11, 2024

Section III Auditee's Response to Prior Year Findings and Questioned Costs

TOWNS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2023
PRIOR YEAR FINANCIAL STATEMENT FINDINGS No matters were reported.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.

Section IV Findings and Questioned Costs

TOWNS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2023

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements

Type of auditor's report issued: Governmental Activities and Each Major Fund

Internal control over financial reporting: Material weakness(es) identified?
Significant deficiency(ies) identified?

Noncompliance material to financial statements noted:

Federal Awards

Internal control over major programs: Material weakness(es) identified?
Significant deficiency(ies) identified?

Type of auditor's report issued on compliance for major programs:

All major programs

Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)?

Identification of major programs:

Assistance Listing Number Assistance Listing Program or Cluster Title

84.425

Education Stabilization Fund

Dollar threshold used to distinguish between Type A and Type B programs:

Auditee qualified as low-risk auditee?

II FINANCIAL STATEMENT FINDINGS No matters were reported. Ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.

Unmodified No
None Reported No
No None Reported
Unmodified No
$750,000.00 Yes