Audit report, Bacon County Board of Education, Alma, Georgia, year ended June 30, 1999

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AUDIT REPORT

BACON COUNTY BOARD OF EDUCATION

ALMA, GEORGIA

YEAR ENDED JUNE 30, 1999

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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

BACON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDmJRES OF FEDERAL AWARDS

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

2

B

COMBINED STATEMENT OF REVENUES, EXPENDmJRES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

3

C

COMBINED STATEMENT OF REVENUES, EXPENDmJRES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

. GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

I'

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

16

F

COMBINING STATEMENTOF REVENUES, EXPENDmJRES

AND CHANGES IN FUND BALANCES

17

SCHEDULES

1 SCHEDULE OF EXPENDmJRES OF FEDERAL AWARDS

18

2 SCHEDULE OF STATE REVENUE

20

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

21

4 SCHEDULE OF EXPENDmJRES

LOTTERY PROGRAMS

22

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALTIY BASIC EDUCATION PROGRAMS

5

OVERALL

23

6

BY PROGRAM

24

BACON COUNTY BOARD OF EDUCATION . - TABLE OF CONTENTS -
SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GO\TERNMENT AUDITING STANI>ARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 10,2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Bacon County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE
FINANCIAL STATEMENTS AND SupPLEMENTARY INFORMATION-
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general pwpose financial statements of the Bacon County Board of Education, as of and for the year ended June 30, 1999; as listed in the table of contents. These general pwpose financial statements are the responsibility ofthe Bacon County Board ofEducation's management. Our responsibility is to express an opinion on these general pwpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Goyemmeut Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general pwpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general pwpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

99ARL-13

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1999, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were improperly recorded in the year ended June 30, 1999. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general purpose financial statements ofthese variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general purpose financial statements ofthe matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Bacon County Board ofEducation as ofJune 30, 1999, and the results ofits operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Goyemment Auditing Standards, we have also issued our report dated February 10, 2000, on our consideration ofthe BaconCounty Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants.
Our audit was performed for the purpose offorming an opinion on the general purpose financial statements of the Bacon County Board of Education taken as a whole. The accompanying combining statements (Exhibits E and F)and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required byD. S. Office of Management and Budget Circular A-133, Audits a/States, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional analysis and are not a required part ofthe general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
t1J.~
Russell W. Hinton State Auditor
RWH:gp 99ARL-13

BACON COUNTY BOARD OF EDUCATION

BACON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30,1999

ASSETS
Cash and Cash Equivalents
Investments
Accounts .Receivable
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS (Memorandum Only) JUNE 30,1999 JUNE 30, 1998

$ 25,964,86 $ 308,951.60 $ 3,719,40 $ 338,635.86 $ 387,219.80

940,171.05

652,310.56

1,592,481.61

660,723.63

147,101.45 108,303.38 139,429.29

394,834.12

224,641.11

16,419.25 5,036.90

16,419.25 5,036.90

13,658.26 5,064.50
41,700.41

Total Assets

$ 1.113,237.36 $ 438.711.13 $ 795,459.25 $ 2,347.407.74 $ 1.333,007.71

Total Uabilities and Fund Equity

$ 1,113.237.36 $ 438,711,13 $ 795,459.25 $ 2,347,407.74 $ 1,333,007.71

The notes to the general purpose financial statements are an integral part of this statement -2-

BACON COUNJY BOARD OF EDUCATION

COMBINED STAIEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

,

ALL GOVERNMENTAL FUND IYPES

YEAR ENDED JUNE 30. 1999

EXHIBIT "8-

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1999 JUNE 30, 1998

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 8,094,780.94 $ 271,933.12

$

1,367,500.16

1,736,868,65

$ 853,797.16

148,400,78

226,548,43

12,118,64

8,366,714.06 $ 1,367,500,16 2,590,665,81
387,067.85

7,726,839.34 1,464,630.72 1,530,316.54
360,444.44

Total Revenues EXPENDITURES

$ 9,980,050.37 $ 1,865,981,71 $ 865,915.80 $ 12,711,947.88 $ 11,082,231.04

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 Food services Operation Community services Operations
. capital Outlay Debt service Principal Interest
I'
Total ExpendUunas
Excess of Revenues over (under) expenditures

$ 6,268,264.69 $ 928,516.15

$ 7,196,780.84 $ 7,097,064.63

441,881.65 240,160.40 276,873.93 181,732.52 691,333.16 106,464.60 866,806.54 604,161.16
31,957.20 5,714.03 1,753.00

14,483,73 76,584.25
28,669.03 7,128.10 3,315.36 1,712.09 10,753.49
5,865.66 m,963.78
$ 70,456.55

456,365.38 316,744.65 276,873.93 210,401.55 698,461.26 109,n9.96 868,518.63 614,914.65
37,822.86 783,6n.81
1,753.00 70,456.55

437,064.68 291,538.55 262,143.78 300,100.08 656,769.09 102,941.66 787,270.76 589,104.44
752.50 44,1n.28 692,025.90
8,448.38

4,561.12 329,35

37,139.29 2.256.71

41,700.41 2,586.06

59,652.49 6,516.34

$ 9,721 ,993.35 $ 1.894.387.64 $ 70,456.55 $ 11 ,686,837.54 $ 11 ,335,570.56

$ 258,057.02 $ -28,405.93 $ 795,459.25 $ 1,025,110,34 $ -253,339.52

OTHER FINANCING SOURCES CUSES)

Operating Transfers In Operating Transfers Out

$

10.75

-10.75

Total Other Financing Sources (Uses)

$

0.00

Excess'of Revenues and Other Financing Sources over (under) Expenditunas and Other Financing Uses $ 258,057.02 $ -28,405.93 $ 795,459.25 $ 1,025,110.34 $ -253,339.52

FUND BALANCE JULY 1

826,443,33

266,On.16

0.00

1,092,520.49

1,349,121,46

Food Inventory - Net Change in Period Donated Commodities Purchased Food

2,760.99 -27,60

2,760.99 -27.60

-2,294.61 -966.84

FUND BALANCE JUNE 30

$ 1,084,500,35 $ 240,404,62 $ 795,459.25 $ 2,120,364.22 $ 1,092,520,49

The notes to the general purpose financial statements ana an Integral part of this statement. -3-

BACON COUNTY BOARD OF EDUCATION

EXHIBITC"

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL .. (NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

YEAR ENDED JUNE 30, 1999

FUND BALANCE JUNE 30,1999

$ 422,036.33$ 1,084,500.35

$ 291,884.31 $ 240,404.62

The notes to the general purpose financial statements are an integral part of this statement. -5-.

BACON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Bacon County Board ofEducation (Board) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board 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 Board is a primary government and consists"ofall the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds to report on its financial position and the results ofits 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.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform. to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial statem~ts. To conform. to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governrilental units, unless otherwise disclosed in these notes. Funds presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund Used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.

-7-

BACON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1999

Notel: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All'governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (Le., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.

Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds.

Governmental funds are accounted for using the modified accrual basis ofaccounting under which:

Revenues are.recognized when susceptible to accrual (i.e., when they become both measurable and available).
"Measurable" means the amount ofthe transaction can be determined and "available" means collectible within
the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues cons~~ered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.

I!

..

Expenditures are generally reCognized when the related fund liability is incurred.

A departure from the above definitions is the accounting treatment afforded'the :final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State . grants to fund the State's share ofthese contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months.. As of June 30, 1999, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion of the compensation paid in July and August 1999 was received and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed priorto June 30, 1998, were recorded in the year ended June 30, 1999. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.

-8-

BACON COUNTY BOARD QF EDUCATION

EXHIBIT "D"

NOIES TO THE GENERAL PURPOSE FINANCIAL STAIEMENTS

JUNE 30. 1999

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
BUDGET
The Bacon County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for allgovernmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's . approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a
newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a :final school budget. This:final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSmON OF DEPOSITS Cash and cash equivalents consist ofdeposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSmON OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
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BACON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARy OF SIGNlEICANT ACCOUNTING POLICIES

(4) Obligations ofany corporation ofthe United States government,

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations ofother political subdivisions ofthe State of Georgia.

RECEIVABLES

Receivables consist ofgrant 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 general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible. receivables.

PROPERTY TAXES

The Bacon County Board ofCommissioners fixed the property tax levy for the 1998 tax year (calendar year)
on November 30, 199~, (levy date). Taxes were due on March 12, 1999. The lien date for property taxes was Janwny 1; 1998. Taxes co~ected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. 'The Bacon County Tax Commissioner bills and collects the property taxes
for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the
balance oftaxes collected to the Board.

The tax millage rate levied for the 1998 tax year (calendar year) for the Bacon County Board ofEducation was as follows (a mill equals $1 per thousand dollars ofassessed value):

School Operations

12.5 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $853,797.16 and was recorded in the Capital Projects Fund. The State will terminate collection ofthis tax once an additional $4,646,202.84 has been collected or on June 30, 2003, whichever occurs first.

-10-

BACON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOIES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as .' expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

INTERFUND TRANSACTIONS

The Board has the following types ofinterfund transactions:

Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as. expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general pmposefinancial statements are captioned ''Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.

Note 2: DEPOSITS AND INVESTMENTS

COLLAIERALIZATION OF DEPOSITS

Official Code ofGeorgia Annotated (OCGA) Section 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 ofmoney which has not been secured by

surety bond, by guarantee ofinsurance, or by collateral. The aggregate of the face value of such surety bond

and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being

secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 (b) provides an officer

holding public funds may, in his discretion, waive the requirement for security in the case of operating funds

placed in demand deposit checking accounts.

.

Acceptable security for deposits consists of anyone ofor 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,

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BACON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 2: DEPOSITS AND INVESTMENTS

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or of the State of Georgia,

(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe counties or municipalities of the State of Georgia,

(5) Bonds ofany public authority created by the laws ofthe State ofGeorgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,

(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates ofindebtedness, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interestor debt obligations issued 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 At June 30, 1999, th~, bank balances were $1,011,852.27.. The amounts of the total bank balances are classified into three categories ofcredit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held bythe pledging financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1999, as follows:

Risk Category

Bank Balance

1

$ 106,649.81

2

884,039.74

3

21.162.72

Total

$ 1.011,852.27

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BACON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1999

Note 2: DEPOSITS AND lNYESTMENTS

CATEGORIZATION OF INVESTMENTS At June 30, 1999, the carrying value ofthe Board's total investments was $1,592,481.61 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide. for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state

government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which

follows Standard and Poor's criteria for AAAm. rated money market funds. However, Georgia Fund 1

operates in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to

be a 2a-7like pool. The pool is not registered with the SEC as an investment company. The pool's primary

objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal

($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings

(net of management fees) on a monthly basis and determines participant's shares sold and redeemed based

on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which

approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe

shares. Participation in the pool is voluntary and deposits consist offunds from local governments; operating

and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds ofthe State

of Georgia's General Fund.

.

,.
Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any ofits agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity ofGeorgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration ofapproximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1999 was 27 days. The average investment duration for Fund 6 on June 30, 1999 was 1.03 years.

Note 3: NON-MONETARY TRANSACTIONS

The Board receives food commodities from the United States Department ofAgriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

The Board is exposed to various risks ofloss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

-13 -

BACON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSEEINANCIAL STATEMENTS

JUNE 30. 1999

Note 4: RISK MANAGEMENT

The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years.

The Board is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage ofthat fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasoDably estimated. The Board has not incurred any liabilities for unemployment compensation during the past three fiscal years.

The Board has purchased surety bonds to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent Board Chairman Board Vice-Chairman Other Employe~s

$ 50,000.00 $ . 20,000.00 $ 20,000.00 $ 5,000.00

Note 5: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$193,4S2.70 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$IS3,889.66

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$I,632.04

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $37,931.00

-14-

BACON COUNTY BOARD OF EDUCATION

EXIllBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

.. Note 6: CONTINGENT LIABILITIES

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 expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 7: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

IRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (IRS), which is a cost-sharing multiple employer defined benefit pension plan. IRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

IRS CONTRlBUTIONS REQUIRED AND MADE

.

I

Employees ofthe Board who are covered by IRS are reql,lired by State statute to contribute 5% oftheir gross

earnings to IRS. The Board makes monthly employer contributions to IRS at rates adopted by the IRS

Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required

employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding

two fiscal years are ~ follovvs:

Fiscal Year

Percentage Contributed

.. Required Contribution

1999 1998 1997

100% 100% 100%

$ 812,785.81 $ 768,299.00 $ 716,006.57

-15 -

BACON COUNTY BOARP OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 1999

EXHIBIT-E-

Total Assets

$ 293,725.67 $ 39,796.12 $ 107,227.n $ 440,749.56 $ 470,439.55

Total Liabilities and Fund Equity

$ 293,725.67 $ 39,796.12 $ 107,227.n $ 440,749.56 $ 470,439.55

See notes to the general purpose financial statements.

-16-

BACON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL RE\lENUE FUND YEAR ENDED JUNE 30. 1999

EXHIBIT-P

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operatkinof Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations
Debt Service . Principal Payments Interest Payments
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURC" ES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30,1999 JUNE 30, 1998

$ 57,926,00 $ 214,007.12

$ 271,933.12 $ 286,386.24

453,558,42

$ 913,941.74

1,367,500,16

1,464,630.72

226,548,43

226,548,43

217,998,36

$ 738,032,85 $ 214,007.12 $ 913,941,74 $ 1,865,981,71 $ 1,969,015,32

$ 172,137.16 $ 756,378,99 $ 928,516,15 $ 984,001.69

$ m,963.78

1,931.12
341.70 75.00 126,14

14,483.73 74,653,13
28,669.03 6,786.40 3,315.36 1,637.09 10,753.49 5,739.52

14,483.73 76,584.25
28,669.03 7,128.10 3,315,36 1,712.09 10,753.49 5,865,66
m,963.78

15,772.15 61,371.27
7,707.22 59,161.81
6,835.87 2,971,38
724.41 14,741.49 11,967.05 684,835.56
6,790.88

37,139.29 2,256,71

37,139.29 2,256,71

45,083.98 5,232,19

$ m,963.78 $ 214,007.12 $ 902,416.74 $ 1,894,387.64 $ 1,907,196.95

$ -39,930.93 $

0.00 $ 11,525.00 $ -28,405.93 $ 61,818.37

$ -39,930.93 $ 266,077.16
2,760,99 -27.60

10,75

0.00 $ 11,525.00 $

0.00

0.00

-28,405.93 $ 266,077.16

61,829,12 207,509.49

2,760.99 -27,60

-2,294.61 -966,84

FUND BALANCE JUNE 30

$ 228,879,62 $ _ _.::.0,;::;00::,. $ 11,525,00 $ 240,404,62 $ 266.077,16

See notes to the general purpose financial statements.

-17 -

BACON COUNTY BOARD QF EDUCATION
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 1999

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1999 Grant National School Lunch Program 1999 Grant

* 10.553 * 10.555

NlA $ NlA

98,012.30 302,943.43 $

(2) 728,558.43 .(3)

Total Child Nutrition Cluster

$

400,955.73 $

728,558.43

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program (1)

10.550

NlA

Pass-Through From Office of School Readiness

Food and Nutrition Program

Child and Adult Care Food Program

1999 Contract

10.558

NlA

49,405.35 3,197.34

49,405.35 (2)

Total U. S. Department of Agriculture

$

453,558.42 $

m,963.78

Education; U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through 1999 Grant Preschool 1999 Grant

84.027 84.173

NlA $ NlA

136,974.36 $ 19,801.71

136,974.36 19,801.71

Total Special Education Cluster

$

156,n6.07 $

156,n6.07

Other Programs

Pass-Through From Berrien County Board of Education

d/b/a Southern Pine Migrant Education Agency

Elementary and Secondary Education Act

Title I

Migrant Education

1999 Grant

84.011

N/A

Pass-Through From Georgia Department of Education

Elementary and Secondary Education Act

TiUel

Grants to Local Educational Agencies

1999 Grant

84.010

NlA

nUel!

Eisenhower Professional Development

1999 Grant

84.281

N/A

TiUeVI

Innovative Education Program Strategies

1999 Grant

84.298

NlA

18,585.51

18,585.51

479,789.18 20,096.73 15,055.00

479,789.18 20,096.73 15,055.00

-18 -

BACON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1999

SCHEDULE -1-

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Deparbnent of Other Programs Pass-Through From Georgia Deparbnent of Education Goals 2000 State and Local Education Systemic Improvement Grants 1999 Grant
Vocational Education - Basic Grants to States
High School Program Basic Grant 1999 Grant
Tech-Prep Education 1999 Grant
Pass-Through From Okefenokee Regional Educational Service Agency . Safe and Drug-Free Schools 1999 Grant
Total U. S. Deparbnent of Education
Health and Human Services, U. S. Deparbnent of Pass-Through From Concerted Services, Incorporated Head Start Program 1999 Grant

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.276

NlA $

40,199.51 $

28,674.51

84.048

NlA

84.243

NlA

22,240.00 30,000.00

22,240.00 30,000.00

84.186

NlA $

5,659.69 788.401.69 $

5,659.69 776,876.69

93.600

NlA $

125,540.05 $

125,540.05

Total Federal t;:~nancial Assistance

$ 1,367,500.16 $

NlA =Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are Included In the 1999 National School Lunch Program.
(3) Expenditures for this program Include State, and/or Other Funds. Expenditures are not maintained by fund source.
r) Major Programs are identified by an asterisk in front of the CFDA number.

The Board did not provide Federal Assistance to any Subrecipient.

The accompanying schedule of expenditures of Federal Awards includes the Federal Grant Activity of the Bacon County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements.

1,680,380.52

See notes to the general purpose financial statements.

-19-

BACON COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE .YEAR ENDED JUNE 30, 1999

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Migrant Education Counselors Grades 4 and 5 Technology Specialist Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program At-Risk Summer School Program Health Insurance Mentoring Program Mentor Teacher Program Preschool Handicapped Program Remedial Summer School Program Student Records Teachers'Retirement Lottery Programs Assistive Technology Computers in the Classroom
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 4,376,436.00 911,769,00 228,910,00 185,973,00 . 52,501,00
1,216,833,00
269,169,00 88,551,00 164,231,00 210,427,00 89,216,00 1,534.00 16,860,00 28,842,00
-689,205,00 622,327,00
$ n,657.00
2,000.00 8,464,03 153,889,66 3,046.54 2,916.00 26,795.00 4,583.92 1,491.75 1,632.04

$ 4,376,436,00 911,769,00 228,910.00 185,973.00 52,501.00
1,216,833,00

57,926.00

269,169,00 88,551,00
164,231.00 210,427.00
89,216,00 1,534.00
16,860,00 28,842,00 -689,205.00 622,327,00
57,926~00
77,657,00

2,000,00 8,464,03 153,889,66 3,046.54 2,916.00 26,795.00 4,583.92 1,491.75 1,632.04

5,581.43 39,396.00

5,581.43 39,396,00

169,029.69

169,029.69

37,931.00

37,931.00

$ 8,094,780.94 $
See notes to the general purpose financial statements. -20-

271,933.12 $ 8,366,714.06

BACON COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 3D. 1999

SCHEDULE -3-

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

See notes to the general purpose financial statements.

~21-

BACON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30. 1999

SCHEDULEW

EXPENDITURES
Current Instruction Support Services Improvement of Instructional Services School Administration Maintenance and Operation of Planf Other Support Services Debt Service Principal Payments Interest Payments

ASSISTIVE TECHNOLOGY

COMPUTERS IN THE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

TOTAL

$

5,581.43

$

$

37,139.29

2,256.71

166,555.73 $
1,931.12 341.70 75.00 126.14

172,137.16
1,931.12 341.70 75.00 126.14
37,139.29 2,256.71

Total Expenditures

$

5,581.43 $

39,396.00 $

169,029.69 $ 214,007.12

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Asslstive Technology ComputerS "in the Classroom Pre-Kindergarten Program

$ 154,094.05
5,581.43 39,396.00 14,935.64

$ 214,007.12

See notes to the general purpose financial statements.

-22-

BACON COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1999

SCHEDULE -5-

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Total Media Allotment
Expenditures per Audit
Amount of Underexpenditure for Total Allotment
,'

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

5.703,088.00 $ _ _----:1~89=.1.::::.;27;..:1,;.;:.0;.;;..0

$

5,536,932.30

272,454.72 $ _ _--=2:.;;;.3=.13,.;;.;68;;..=5,;.;:.3;.;;..8

$

5.809,387.02

-73,903.57 $ _ _..;:;.5J,,;.,7.;;.;35~,4.;.;:8:.;;;.3;..;;.4~5

$

0.00 $ =='=============0.:=00=

See notes to the general purpose financial statements. - 23 -

BACON COUNTY BOARD OF EDUCATION
ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAl FUND QUALITY BASIC EDUCATION PROGRAMS
YEAR ENDED JUNE 30. 1999

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*> Identifies Fourteen Weighted Programs.
See notes to the general purpose financial statements.

$

16,555.00

35,946.00

$

16,555.00 $

35,946.00

$

52,501.00 100 $

52,501.00 $

0.00 0.00
..0..0.0.

- 24

SCHEDULE "6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

423.104.40 $

405.733.64 $

17.848.67 $

423.582.31

1,031,055.30

1.005,021.62

30.979.68

1.036,001.30

$ 1,454.159.70 $

1,410,755.26 $

48.828.35 $ 1,459,583.61 $

0.00

452,440.80

499,435.46

14.687.15

514.122.61

0.00

879,936.30

992.638.59

24.356.96

1,016.995.55

0.00

532,120.50

687.325.05

40,548.24

727.873.29

0.00

183,352.50

316,188.67

3.723.18

319.911.85

0.00

436,782.60

358.305.64

79,975.62

438,281.26

0.00

$ 3.938,792.40 $ 4,264,648.67 $

212,119.50 $ 4,476,768.17

$

789.810.30

$

11.140.15 $ 338.186.68 401.821.08
31.749.31 1.165.14

392.91 $
6.428.71 8,582.67 3,823.79

11,533.06 344,615.39 410.403.75
35.573.10 1.165.14

$

789.810.30 $

784,062.36 $

19,228.08 $

803,290.44

0.00

30,781.80

41,218.56

641.54

41.860.10

0.00

$

820,592.10 $

825,280.92 $

19,869.62 $

845,150.54

$

206,019.00 $

225.895.48$

1.696.26 $

227.591.74

0.00

$ 4,965,403.50 $ 5.315.825.07 $

233,685.38 $ 5,549,510.45

$

132,956.10 $

221.107.23

$

221.107.23

0.00

38,244.00

$

"38,769.34

38,769.34

0.00

$

171,200.10 $

221,107.23 $

38.769.34 $

259.876.57

$ 5,136.603.60 $

5.536.932.30 $

272,454.72 $ 5,809,387.02 $

0.00

$

16,555.00

35,946.00

$==5=2=:.50=:1=:.00=

$

40,113.39 $

40,113.39

12,544.00

12,544.00

$

52,657.39 $

52.657.39 $-===.....========='0:;.00=

25

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 10, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members of the Bacon County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GO\TERNMENI AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofBacon County Board ofEducation as of and for the year ended June 30, 1999, and have issued our report thereon dated February 10,2000. This report was qualified for various departures from generally.accepted accounting principles, as identified in the auditor's report on the general pUlpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General'ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether Bacon County Board of Education's financial
statements are :free ofmaterial misstatement, we performed tests ofits compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial RtaJorting
In planning and performing our audit, we considered Bacon County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation
99YB-40

that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention . relating to significant deficiencies in the design or operation ofthe internal control over financial reporting
that, in ourjudgement, could adversely affect Bacon County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. . The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6031-99-01.

A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above is also considered to be a material weakness.

This report is intended solely for the information and use of management, members of the Bacon County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Respectfully submitted,
'2.Jz tJ.:td:.:::t;.
Russell W. Hinton State Auditor .

RWH:gp

99YB-40

i,

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
February 10,2000

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Bacon County Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONIROL OVER COMPLIANCE IN ACCORDANCE W1TH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance..
We have audited the compliance of Bacon County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OME) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1999. Bacon County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each ofits major Federal programs is the responsibility ofBacon County Board ofEducation's management. Our responsibility is to express an opinion on Bacon County Board ofEducation's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Goyemment Auditin~ Standards, issued by the Comptroller General ofthe United States; and OMBCircular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Bacon County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Bacon County Board of Education's compliance with those requirements.

99SA-10

In our opinion, the Bacon CountyBoard ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 1999.
Internal Control Oyer Compliance
The management of Bacon County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Bacon County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness isa condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management, members of the Bacon County Board ofEd:ucation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 99SA-10 .

Russell W. Hinton State Auditor

SECTIONm AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS
,,

BACON COUNTY BOARD OF EDUCATION
AUPITEE'SRESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGSANP QUESTIONED COSTS YEAR ENDED JUNE 30. 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QlJESTIONEP COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6031-97-01 FS-6031-97-02 FS-6031-98-0l FS-6031-98-02

Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES .

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Contrpl Number: FS-6031-98-02

Due to current staffing limitations and budgetary considerations prohibiting the hiring ofadditional administrative staff, the Board has decided not to pursue the recording ofgeneral fixed assets on the financial statements at this time.

SECTIONN FINDINGS AND QUESTIONED COSTS
"

BACON COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999

I SUMMARy OF AUDITOR'S RESULTS

1. upe ofRe.port Issued on the Financial Statements
The auditor's opinion on the Bacon County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Bacon County Board ofEducation disclosed a financial statement reportable condition related to the following control category.

General Fixed Assets

The reportable condition described above is considered to be a material weakness.

. 3. Noncompliance Material to the Financial Statements The audit ofthe Bacon County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Promms
The ~udit report for the Bacon County Board ofEducation did not disclose any reportable conditions
in internal control over major programs.

5. In>e ofRe,port Issued on Compliance for Maior Promms

.. The auditor's opinion on the Bacon County Board of Education's report on compliance with

requirements applicable to major programs was unqualified.

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6. Audit Findings Reqyiredto be Re.ported by Section .510(3) ofQMB Circular A-133
The Bacon County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.

7. Major Prosrams
Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program

8. T)!pe "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee The Bacon County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.

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BACON COUNTY BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 3Q. 1999

IT FINANCIAL STATEMENT FINI>lNGS AND QUESTIONED COSTS

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6031-99-01

The Bacon County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group

within the formal accounting records as required by generally accepted accounting principles. This condition

results in the general pmpose financial statements ofthe Board being incomplete and not in accordance with

generally accepted accounting principles. Appropriate action shouldbe taken by the Board to establish

accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group.

These subsidimy records should include an inventory of land, buildings and equipment owned by the Board

and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost,

location and description. Detailed records should be maintained ofall additions and deletions to the General

Fixed Assets Account Group.

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ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

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