Bacon County Board of Education, Alma, Georgia, report on audit of the financial statments for the fiscal year ended June 30, 2002

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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

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITIJRES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITIJRES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITIJRES

AND CHANGES IN FUND BALANCES

23

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

2 SCHEDULE OF STATE REVENUE

26

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

ALLOTMENTS AND EXPENDITIJRES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

BACON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION II 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 GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-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. HtNTON
STATE AUDITOR (404)656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washmgton Street, S. w., Suite 214
Atlanta, Georgia 30334-8400
September 26. 2002

Honorable Sonny Perdue. Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Bacon County Board of Education
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-purpose financial statements ofthe Bacon County Board of Education, as of and for the year ended June 30. 2002. as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe Bacon County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards. issued by the Comptroller General ofthe 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-purpose financial statements. the Board of Education'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:

2002ARL-13

The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
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 of Education did not recognize as expenditures, in the year ended June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, from the Georgia Department of Education for the State's share of these 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, 2001, were improperly recorded in the year ended June 30, 2002. 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 of these 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 of the 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 of June 30, 2002, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated September 26, 2002, on our consideration ofthe Bacon County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements ofthe Bacon County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office ofManagement and Budget Circular A-I33, Audits ofStates, Local Governments, and Non-Profit Organizations. are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the
2002ARL-13

audit of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
w~.ik.
Ru sell W. Hinton State Auditor
RWH:gp 2002ARL-13

BACON COUNTY BOARD OF EDUCAnON

------------------------------ --
BACON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 2002

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$

26,373.88 $

393,079.06

864,381.15

155,729.59

88,379.98

15,467,97 7,358.92

Total Assets

$ 1,046,484.62 $ ====504==:!:,2=8=5.:=93=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retamages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Inventories Food Donated CommoditIes Purchased Food For SPLOST Projects For State Capital Outlay Projects Unreserved Designated for Self-Insurance Undeslgnated
Total Fund EqUity

$

40,763.02 $

37,863,78

164,95882

58.45

$

40,763.02 $

202,881.05

$

15,46797

7,358.92

$

49,621.43

956,10017

$ 1,005,721.60 $

278,577 99 301,404.88

Total Liabilities and Fund EqUity

$ 1,046,484 62 $ ====504~,2=85=,:c93=

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

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30, 2001

$

50,965.63 $

470,418.57 $

382,222.98

2,327,209.60

3,191,590.75

2,913,253.18

166,856.83

410,966.40

600,427.66

15,467.97 7,358.92

10,342.57 5,379.16

$ 2,545,032.06 $ 4,095,802.61 $ 3,911,625.55

$

78,626.80 $

61,390.67

164,958.82

147,994.02

58.45

15,959.58

19,650.00

$

274,539.28

274,539.28

$

274,539.28 $

518,183.35 $

244,994.27

$

1,009.26

1,076.01

$

15,467.97

7,358.92

$ 2,270,492.78

2,270,492.78

10,342.57 5,379.16
2,371,288.68 70,632.40

0.00

49,621.43 1,234,678 16

49,621 <43 1,157,281.77

$ 2,270,492.78 $ 3,577,619.26 $ 3,666,631.28

$ 2,545,032.06 $ 4,095,802.61 $ 3,911,625.55 - 3-

BACON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2002

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support services Pupil Services Improvement of Instructional Services Educational Media Services Gen'eral Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change 10 Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

GENERAL FUND

SPECIAL REVENUE
FUND

$ 8,866,031.57 $
2,019,896.70 127.539.30
$ 11 ,013,467.57 $

312,713.13 1,584,741.93
260.32763
2,157,78269

$ 7,443,169.49 $ 1,182,966.50

340,78409 200,806.98 309,04810 164,809.03 756,42347 100,993.47 961,937.24 604,505.02
76,296 78 6,888.44 3,646.67

6,88050 87,542.55
2,105.25 34,05819
7,63759 2,03010
171 70 27,002.96 22,763.60 753,471.42

$ 10,969,30878 $

$

44,158.79 $

961.562.81

2,126,63036 31,152.33
263,147.39

5,12540 1,979.76

$ 1,005,721 .60 $ =====3=0=1,,==,4=04=.=88=

The notes to the general-purpose finanCial statements are an Integral part of this statement - 4-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 3D, 2002

JUNE 3D, 2001

$ 1,749,788.40 $ 10,928,533.10 $ 8,888,281.60

1,584,741.93

1.400,242.75

986,799.39

3,006,696.09

2,846,870.69

60.404.33

448,271.26

487,149.20

$ 2,796,992.12 $ 15,968,242.38 $ 13,622,544.24

$ 8,626,135.99 $ 8,190,753.85

$ 2,968.420.42

347,664.59 288,349.53 311,153.35 198,867.22 764,061.06 103,023.57 962,108.94 631,507.98
99,060.38 760,359.86
3,646.67 2,968,420.42

331,872.38 213,302.94 301.492.64 204,909.19 748,468.10 123,513.34 867,987.23 607,167.20
39,440.76 719,530.83
2,441.40 275,239.66

$ 2,968.420.42 $ 16,064,359.56 $ 12,626,119.52

$ -171,428.30 $

-96,117.18 $

996,424.72

2,441,921.08

3,666,631.28

2,671,946.91

5,125.40 1,979.76

-3,268.48 1,528.13

$ 2,270.492.78 $ 3,577,619.26 $ 3,666,631.28

- 5-

BACON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - lNON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 2002

EXHIBIT C"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instrucbonal SeMceS Educational Media Services General Administration School Admlmstration BUSiness Admimstratlon Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations
Total Expenditures
Excess of Revenues over (under) expenditures
FUND BALANCE JULY 1. 2001
Adjustments Food Inventory - Net Change In Penod
Donated Commodities Purchased Food

GENERAL FUND

BUDGET

ACTUAL

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 8,622,021.00 $ 8.866,031.57 $ 286,611.00 $ 312,713.13

1,774,986.00

1,584,741.93

1,953.172.00

2,019,896.70

60,17000

127,539.30

260,91200

260,327.63

$ 10,635,363.00 $ 11.013,467.57 $ 2,322,509.00 $ 2,157,782.69

$ 7,500,37500 $ 7,443,16949 $ 1,405,217 00 $ 1,182,966.50

276,467.00 209,661.00 310,039.00 198,107.00 757,466.00 121,433.00 939,343.00 637,057.00
84,84100 6,094.00

340,784.09 200,80698 309,048.10 164,80903 756,42347 100,99347 961,937.24 604,505.02
76,29678 6,88844 3,64667

19,89600 70,18900 16,83600 43,94800
7,20500
22,23300 10,35000 726,63600

6,880.50 87,542.55
2,10525 34,058.19
7,637.59 2,030.10
171.70 27,00296 22,76360 753,47142

$ 11 ,040,883 00 $ 10,969,30878 $ 2,322,51000 $ 2,126,63036

$ -405,520.00 $

44,15879 $

-100 $ 31,15233

791,334 00

961,56281

252,23200

263,147.39

3,56800

5,694 00

5,12540 1,97976

FUND BALANCE JUNE 30 2002

$ 389,38200 $ 1,005,721.60 $ 257,92500 $ 301,404.88

The notes to the general-purpose finanCial statements are an Integral part of thiS statement - 7-

BACON COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Bacon County Board ofEducation (School District) 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 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.
FUND ACCOUNTING
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.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. 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 of these accounts are reflected in these financial statements. To confonn 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 of the School District, in compliance with generally accepted accounting principles applicable to governmental 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 of the School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District 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 of specific 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 of Education and from the Federal government to accomplish specific educational objectives.

-8-

BACON COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: 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 ofthese funds present increases (i.e., 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 gove111lliental funds.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expendifures 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 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2002, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30,2002. Also, the State's portion of the compensation paid in July and
-9-

BACON COUNTY BOARD OF EDUCATION

EXHffiIT liD"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. 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.
BUDGET
The Bacon County Board ofEducation's budget is a complete financial plan for the School District'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 all governmental funds is prepared by fund, function and object. The legal level of budget 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 School District'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 of general 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(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.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District 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 School District to invest its funds and in selecting among

- 10-

BACON COUNfY BOARD OF EDUCATION

EXHffiIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
RECEIVABLES
Receivables consist of 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 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 2001 tax digest year (calendar year) on November 12, 2001 (levy date). Taxes were due on January 22,2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Bacon 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 during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $2,010,590.94.
The tax millage rate levied for the 2001 tax year (calendar year) for the Bacon County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):
- 11 -

----------------- ------

BACON COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 $986,799.39 and was recorded in the Capital Projects Fund. The State will tenninate collection of this tax once an additional $1,730,011.00 has been collected or on June 30, 2003, whichever occurs first.

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 ofpurchase. 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 School District has the following type of interfund 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-purpose financIal 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 confonnity with generally accepted accounting principles. Neither are such data comparable to a consolidation. lnterfund eliminations have not been made in the aggregation of this data.

- 12 -

BACON COUNTY BOARD OF EDUCAnON

EXHmIT "D"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia 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
11 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone 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,
(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 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, 2002, the bank balances were $1,289,282.36. The amounts ofthe total bank balances are classified into three categories of credit risk:

- 13 -

--------------- -

BACON COUNTY BOARD OF EDUCAnON

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS

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

The School District's deposits are classified by risk category at June 30, 2002, as follows:

Risk Category

Bank Balance

1

$ 116,023.82

2

1,006,426.90

3

166,831.64

Total

$ 1.289.282.36

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value of the School District's total investments was $3,191,590.75 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 ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of Treasury 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. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, 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 values 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

- 14 -

BACON COUNTY BOARD OF EDUCATiON

EXHffiIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS
is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the 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 of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.
Note 3: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (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 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; acts of God and unemployment compensation.
The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.
The School District has elected to self-insure for all losses related to acts of God. The School District has not experienced any losses related to this risk in the past three years.
The School District is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the School District. The School District accounts for claims within the General Fund with expenditure and 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 incurred any liabilities for unemployment compensation during the past two fiscal years.
The School District has purchased surety bonds to provide additional insurance coverage as follows:

- 15 -

BACON COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4: RISK MANAGEMENT

Position Covered

Amount

Superintendent Board Chainnan Board Vice-Chainnan VariOllS Other Employees

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

Note 5: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $180,052.86 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$157,991.86

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $22,061.00

Note 6: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002, together with funding available:

Project
o1/00S-603-002

Unearned Executed Contracts

Funding Available From State

$ 2,524.644.25 $ 207.152.60

The amounts described in this note are not reflected in the general-purpose financial statements.

Note 7: 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 School District believes that such disallowances, if any, will be immaterial to its overall financial position.

- 16-

BACON COUNfY BOARD OF EDUCATION

EXHmIT "0"

NOTES TO 1HE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS 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.

TRS CONTRlBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 722,378.69 $ 828,279.43 $ 819,153.72

- 17 -

BACON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2002

ASSETS
Cash and Cash EquIvalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable
Total liabilities
FUND EQUITY
Fund Balances Reserved For Conbnuatlon of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undeslgnated Total Fund EqUity
Total LiabIlities and Fund EqUity

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

326.738.04 $

31,066.33

272.47

15,467.97 7,358.92

$

349,837 40 $ ===~3~1.,;;.0~6~6.:;;;;33~

$

5,72980 $

6,59789

42,702.72

24,46844

$

48,43252 $

31,06633

$

15,467.97

7,35892

278,577 99 $

$

301,40488 $

000 000

$

349,837 40 $ ===~31~,;;;;06;;;;6;;,;;.3;;;;3~

See notes to the general-purpose finanCial statements - 18 -

EXHIBIT "E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

35,274.69 $

0.00 $

393,079.06 $

315,099.81

88,107.51

88,379.98

127,319.20

15,467.97 7,358.92

10.342.57 5,379.16

$

123,382.20 $

000 $

504,285 93 $ ==4=5=8;,,;,,1:::40=7=4=

$

25,536.09

97,78766

58.45

$

123,382.20

$

37,86378 $

31,26747

164,958.82

147,994.02

58.45

15,731.86

$

202.881.05 $

194,993.35

$

000 $

$

000 $

$

123,382.20 $

$

1,076.01

$
000 0.00 $

15,46797 7,358.92
278,577 99
301,40488 $

10,34257 5,379 16
246,349.65
263,147.39

000 $

504,285 93 $ ==4=5;:;8=1,,,;,40=7=4=

- 19-

BACON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002

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 Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change In Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

59,648.00 $

248,065.13

465,724.13

260,327.63

$

785,699.76 $

248,065.13

$

245,247.84

2,817.29

$

753,471.42

$

753,471.42 $

248,065.13

$

32,228.34 $

0.00

262,071.38

0.00

5,125.40 1,979.76

$

301.404.88 $ ==-===-0;:.=00=

See notes to the general-purpose finanCial statements. - 20-

EXHIBIT-F"

FEDERAL
PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$' $ 1,119,017.80
$ 1,119,017.80 $

5,000.00 $ 5,000.00 $

312,713.13 $ 1,584,741.93
260,327.63
2,157,782.69 $

272,048.67 1,400,242.75
243,750.05
1,916,041.47

$

932,718.66 $

6,880.50 84,725.26
2,105.25 34,058.19
7,637.59 2,030.10
171.70 27,002.96 22,763.60

$ 1,120,093.81 $

$

-1,076.01 $

1,076.01

5,000.00 $
5,000.00 $ 0.00 $ 0.00

1,182,966.50 $
6,880.50 87,542.55
2,105.25 34,05819
7,637.59 2,030.10
171.70 27,002.96 22,763.60 753,471.42
2,126,630.36 $
31,152.33 $
263,147.39

1,035,143.64
12,273.52 59,947.70
25,447.47 5,629.79 2,853.58
570.71 16,679.65
714,569.60
1,873,115.66
42,92581
221,961.93

5,125.40 1,979.76

3,26848 1,52813

$

0.00 $

0.00 $

301,404 88 $ ===::;2=:6:=31:,1=47=3=9=

- 21 -

BACON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAfITAbPRCWECTSFUND JUNE 30. 2002

EXHIBIT"G"

ASSETS Cash and Cash EqUivalents Investments Accounts Receivable

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAl PURPOSE LOCAL OPTION SALES TAX

TOTALS JUNE 30, 2002 JUNE 30, 2001

$

274,539.28

$ 274,539.28 $ 255,255.00

$ 2,327,209.60

2,327,209.60

2,158,326.73

166,856.83

166;856.83

303,244 35

Total Assets

$

274,539.28 $ 2,494,06643 $ 2,768,60571 $ 2,716,82608

LlABlLmES AND FUND EQUITY

LlABlLmES

Cash Overdraft

Contracts Payable

RetalOages Payable

$

Total lIabilItIes

$

FUND EqUITY

Fund Balances

Reserved

For SPLOST Projects

For State Capital Outlay Projects

Unreserved

Undeslgnated

~

Total Fund Equity

$

$ 274,53928 274,539.28 $

223,573.65 $ 223,573.65 $

223,57365 $ 274,53928 498,112.93 $

255,255.00 19,650.00
274,90500

$ 2,270,492.78 $ 2,270,492.78 $ 2,371,28868 70,63240

0.00

000

000

000

000 $ 2,270,492 78 $ 2,270,492 78 $ 2,441,92108

Totaillablhties and Fund Equity

$

274,539.28 $ 2,494,06643 $ 2,768,60571 $ 2,716,826 08

See notes to the general-purpose finanCial statements

- 22-

BACON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2002

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

REVENUES

State Funds Taxes Other Funds

$ 1,749,78840

$ 1,749,788,40 $ 114,585.00

$ 986,799.39

986,799.39

985,846 79

4,04868

56,355.65

60,404 33

103,14530

Total Revenues

$ 1,753,83708 $ 1,043,155.04 $ 2,796,992.12 $ 1,203,5n.09

EXPENDITURES

capital Outlay Land and Land Improvements BuildIng and BUildIng Improvements

$ $ 2,968,42042

0.00

$

$ 2,966,420 42

11,23966 264,00000

Total expenditures

$ 2,968,420 42 $

000 $ 2,968,420 42 $ 275,239.66

Excess of Revenues over (under) expendItures

$ -1,214,583.34 $ 1,043,15504 $ -171,42830 $ 926,33743

OTHER FINANCING SOURCES (USES)

Operating Transfers In OperatIng Transfers Out

$ 1,143,950.94

$ 1,143,95094 $ 230,17000

$ -1,143,95094 -1,143,95094

-230,17000

Total Other FInanCing Sources (Uses)

$ 1,143,950.94 $ -1,143,95094 $

000 $

000

Excess of Revenues and Other FinanCing Sources over (under) expendItures and Other FinanCing Uses $

-70,63240 $ -100,79590 $ -171,42830 $ 928,33743

FUND BALANCE JULY 1

70,63240

2,371,28868

2,441,92108

1,513,583 65

FUND BALANCE JUNE 30

$~~~-==O=OO_ $ 2,270,49278 $ 2,270,49278 $ 2.441,92108

See notes to the general-purpose finanCIal statements

- 23-

BACON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
yEAR ENDER JUNE 30, 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture. U. S Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program
Total ChUd Nutntlon Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U. S Department of Agncutture
Education. U S. Department of SpeCial Education Cluster Pass-Through From Georgia Department of Education IndiViduals WIth Disabilities Education Act Part B - Speaal Educallon Capacity Building Improvement Grant Flow Through Preschool
Total SpeCial Education Cluster
Other Programs Pass-Through From Coastal PlainS RESA d/b/a Southern Pine Migrant Education Agenry Elementary and Secondary Education Act Title I Migrant Education Pass-Through From Georgia Department of Educallon Elementary and Secondary Education Act TItle I Grants to Local Educational AgenCies Title II Eisenhower ProfeSSional Development Title VI Class SIZe Reduction Innovative Educallon Program Strategies Vocational Education - BaSIC Grants to States High School Program Basic Grant Pass-Through From Okefenokee Regional Educational Service Agency Safe and Drug-Free Schools
Total U S Department of Education
Health and Human ServiceS. U S Department of Pass-Through From Concerted serviceS, Incorporated Head Start Program

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553 10.555

NJA

$ 93.505.41

NJA

325,364.50 $

$ 418,869.91 $

(2) 706,617.20 (3)
706,617.20

10.550

NJA

46,854 22

$ 465,72413 $

46,854.22 753,47142

84.027 84 027 84173

NlA

$

6,51800 $

NlA

235,66713

NlA

20,96013

$ 263,165.26 $

6.51800 235,66713
20.98013
263.16526

84.011

NlA

21.45336

21,45336

84 010 84 281 84 340 84 298
84 048
84186

NlA

509,04050

509,04050

NlA

24.00000

25,07601

NlA

88,820.00

88,82000

NlA

17.764.92

17,764 92

N/A

34,51900

34,51900

NlA

2,13559

$ 960,89863 $

2,13559 961,97464

93600

N/A

$ 124,961 91 $

124,961 91

- 24-

BACON COUNTY BOARD OF EDUCAnON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE 1

FUNDING AGENCY PROGRAM/GRANT
Labor, U. S Department of Grant-tn-Ald Pass-Through From Southeast Georgia Regional Development Center In School Youth

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

17.259

NlA

$ 33,15726 $

33.15726

Total Federal Financial Assistance

$ 1,584,74193 $-===-1,=87=3.,.,5;,;;6=5=2=3

NlA c Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food D1stribuIJon Program represents the Federally asslQned value of nonmonetary assIStance for donated commodities received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are Included In the 2002 National School Lunch Program
(3) expenditures on thiS program/project were not maintained on a program/project baSIS

Major Programs are IdenlJfied by an astensk (*) In front of the CFDA number

The Board did not provide Federal AsSistance to any SubreCIpient

The accompanying schedule of expenditures of Federal awards ,"dudes the Federal grant activity of the Bacon County Board of EducalJon and Is presented on the modified accrual baSIS of accounllng which IS the basis of accounllng used In the presentation of the general-purpose finanCIal statements

See notes to the general-purpose finanCIal statements

- 25-

BACON COUNJY BOARP OF EPUCATION
SCHEDULE OF STATE REVENUE
YEAR ENpED JUNE 30 2002

SCHEDULE "2"

AGENC)'ffUNDING

GOVERNMENTAL FUND TYPES

SPEC~L

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Community Affairs, Georgia Department of Local Assistance GlBnt

$ 5,000 00

$

5,000 00

Education. Georgia Department of
Quality BasIc EdueatJon Direct InstrudJonal Cost
Kindergarten ProglBm Kindergarten ProglBm Early Intervention Program Primary GlBdes (1-3) ProglBm Primary GlBdes Early lnterventJon (1-3) Program Upper Elementary GlBdes (4-5) ProglBm Upper Elementery GlBdes-Early Intervention (4-5) ProglBm Middle SchoOl (8-8) Program High SchoOl General Education (9-12) ProglBm Vocabonal Laboratory (9-12) ProglBm Students wrth Dlsabilibes
CategOly I Category II category III CategoryN Gifted Student - category VI Remedial Educabon ProglBm A1temabve Educabon ProglBm English Speakers of Other Languages (ESOL) Media Center ProglBm Staff and ProfeSSional Development Indirect Cost Twenty Days Addlbonallnstructlon Categoncal Grants Pupil TlBnsportabon Regular Bus Replacement Sparsity Nursing services PnllClpal Supplements VocabOnal SuperYIsors MlglBnt Educabon Mid-term Adjustment HoIdHarmless Educabon EquallZ8bOn Funcllng GlBnt Food serviceS VocabOnalEducabon Other State Programs Health InsulBnce Mentor Teachers Post Secondary Opbons Preschool Handicapped Program SpeCial Educabon Low InCidence Grant StatewK!e Local Educabon Improvement (4-8) After School Program StatewKle Local Educabon Improvement (K-3) Reading Program Lottery Programs Asslsbve Technology Computers In the Classroom

S 450,84200
68.234 00 1,084,371 00
211,42900 433,996.00 204,83200 990,517 00 736,367.00 358,35000
122,17800 184,25800 441,22700 193,90300 137,11200
56,45200 76,69600 32,094 00 171,10300 32,73000 1,244,083 00 51,96200
338,77500 99,68000 20,00000 52,59600 7,63500 13,926.00 8,74900 10,94800
635,57100
114,54759
157,99186 61200
1,584 00 23.55000
5,57500
17,72968
24,83549

59,84800
5,95700 45,42500

450,842.00 68.234.00
1,084,371.00 211,42900 433.996 00 204,83200 990,517 00 736,36700 358,350.00
122.17800 184,25800 441,22700 193,90300 137,11200
56.45200 76,696 00 32,09400 171,10300 32,73000 1,244,083 00 51,96200
338,77500 99,680.00 20,00000 52,596 00 7,63500 13,92600 8,74900 10,94800
635,571 00 59,84800
114,54759
157,99186 612.00
1,584 00 23,55000
5,57500
17,72968
24,83549
5,95700 45,42500

Human Resources, Georgia Department of Family Connection

46,92895

46,92895

Georgia State Financing and Investment CommiSSion Reimbursement on Construction Projects

$ 1,749,78840

1,749,78840

26

BACON COUNTY BOARD OF EDUCATION SCHEPULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCYIFUNQING
GRANTS Office of School Readiness Pre-KlIldergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPEC~

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 196,68313 $ 22,06100

$

196,66313

22,06100

$ 8,866,031 57 $ 312?1313 $ 1,749?88 40 $ 10,926,53310

See notes to the general-purpose finanCial statements

-27

BACON COUNTY BOARD OF EpUCATION SCHEDULE OF ApPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2002

SCHEDULE "3"

PROJECT
AcqUisition, construction, fumlshlng and equlpplng the following Capital
Outlay Projects: a new elementary
school, parking aress and grounds, Induding the purchase of any necessary real and personal property; and (to the extent that funds are available) construction, furnishing and equipping of additional classrooms, Instructional and support space, as well as remode~ng and renovating existing dassrooms, instructional and support space, and to provide furnishings, equipment and fixtures, indudlng technology eqUipment and retrofitting to accommodate such eqUipment, at eXIsting fadlltles

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 8,186,00000 $ 8,186,000.00 $ 2.968,420.42 $ 635.86965 Ongoing

(1) The SChool District's onglnal cost estimate as specified In the resolution calling for the Imposition of the Local Option Sales Tax.
(2) The School Distnct'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 ImposilJon of a 1% sales tax to fund the above proJed. Amounts expended for these projects may Indude 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.

- 29

BACON COUNTY BOARD OF EDUCATION GENERAL FUND - gUALlTY BASIC EDUCATION PROGRAM (gBEl
ALLOTMENTS AND EXPENDITURES - BY pROGRAM YEAR ENDED JUNE 30, 2002

SCHEDULE "4"

DESCRIPTION
Dlred Instructional Programs KIndergarten Program KIndergarten Program-Early Intervention Program Prlmary Grades (1-3) Program Prlmary 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 Vocabonal Laboratory (9-12) Program Students with DIsabilities Category I Category \I Category III Category IV Category V Gifted Student - Category VI Remedial Educabon Program Altemabve Education Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media Center Program Staff and ProfeSSional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

499.250.00 $ 531.627.14 $

7.577 53 $

539.204.67

75.561.00

74.587.59

703.02

75.290.61

1,178.656.00 1.129.183.79

29,312.40

1.158.496.19

234.130.00

330,047.29

2.025.90

332,07319

480.596.00

528,929.73

23.012.90

551.942.63

226.825.00 1.096.872.00
815.433.00 396.82700 1.042,664.00
151.834.00 62,51300 84,93100 35,54000

163.648.13 1.231,456.66 1.006,526.22
394.701.92
102.93628 237.11300 540.64569
38.723.91 9,353.69
142,201 42 42.547.81 109.98650 44,78069

1,022.80 23.21574 56.97549 52.544.56
2.951.38 5.028.39 8,24095 4,72297
41000 3,690.45
21890 426.09

164,670.93 1.254.672.40 1.063.501 71
447.246 48
105.887.66 242.141.39 548,88664
43.44688 9.763.69
145,891.87 42.76671 110,41259 44.78069

$

6.381.632 00 $ 6,658,997 46 $ 222,07947 $ 6,881,07693

189,47600 36.244 00

256,01833 22,977 34

33.55067 13,55355

289.569.00 36.53089

TOTAL aBE FORMULA FUNDS

$

6,607.35200 $ 6.937,99313 $ 269,18369 $ 7.207,17682

(1) Compnsed of State Funds plus Local Five Mill Share



See notes to the general-purpose finanCIal statements

- 30-

BACON COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM CgBEl
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

Bacon County Middle School Bacon County High School Bacon County Primary School Bacon County MiddleJHigh School Bacon County Elementary School Central Office (Alternative Education Program) Other Auxiliary Facility
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,494,969.00 $

1,402,455.00

1,734,630.00

1,670,934.63

1,666,319.00

1,899,102.12

309,037.35

1,400,783.00

1,489,115.29

84,931.00

19.95

110,412.59

$

6,381,632.00 $ ====6,8=81,,=:!:,=07=6=.9~3

See notes to the general-purpose financial statements. - 31 -

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

RliSSELL W. HtNTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washmgton Street. S.w.. Suite 214 Atlanta. Georgia 30334-8400
September 26, 2002

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
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 GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofBacon County Board ofEducation as ofand for the year ended June 30, 2002, and have issued our report thereon dated September 26, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Bacon County Board of Education'S financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. 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 ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Bacon County Board of Education'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
2002YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation 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 ourjudgment, could adversely affect Bacon County Board of Education'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-6031-02-01.
A material weakness is a condition in which the design or operation of one or more of the 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 of performing their assigned functions. Our consideration of the 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, we consider item FS-6031-02-01 to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe 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,
~W~
Russ II W. Hinton State Auditor
RWH:gp 2002YB-41

RtJSSELL W. HINTON
STATE AUOIT~
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S w.. Suite 214
Atlanta, Georgia 30334-R400
September 26, 2002

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Bacon County Board of Education

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

Ladies and Gentlemen:

Compliance

We have audited the compliance ofBacon County Board of Education with the types ofcompliance

u.s. requirements described in the

Office of Management and Budget (OMB) Circular A-J33

Compliance Supplement that are applicable to each of its major Federal programs for the year ended

June 30, 2002. Bacon County Board of Education's major Federal programs are identified in the

Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned

Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to

each of its major Federal programs is the responsibility of Bacon County Board of Education's

management. Our responsibility is to express an opinion on Bacon County Board of Education's

compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit OrgamzatlOns. 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 ofcompliance 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.

2002SA-IO

In our opinion, the Bacon County Board of Education 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, 2002.
Internal Control Over Compliance
The management of Bacon County Board of Education is responsible for establishing and maintaining effec~ve 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-l33.
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 is- a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements oflaws, 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 ofthe management, members ofthe 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,

RWH:gp 2002SA-IO

Rus ell W. Hinton Stat Auditor

SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

BACON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6031-00-0 I FS-6031-0 1-0 I

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

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

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


SECTION IV FINDINGS AND QUESTIONED COSTS

BACON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report 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 of Education 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 Programs The audit report for the Bacon County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Bacon County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by SectIOn .51O(a) of OMB Circular A-133 The Bacon County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-l33.
7. Major Programs 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
84.0 I Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies
8. Type "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 did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
- 1-

BACON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
n FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6031-02-0 I The Bacon County Board of Education 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-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District 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. Management's Response: We concur with this finding. Appropriate action will be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group when required. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-2-