BAKER 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 EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES. EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES. EXPENDITURES 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

20

F

COMBINING STATEMENT OF REVENUES. EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES. EXPENDITURES

AND CHANGES IN FUND BALANCES

26

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

31

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

32

5

BY SITE

33

BAKER COUNTY BOARD OF EDUCAnON
, , ' _, I
- TABLE OF CONTENTS -
SECTIOND 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 WITII GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITII REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITII OMB CIRCULARA-133
SECTIONm AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTIQNIV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta. Georgia 30334-8400
February 6, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducation
and Superintendent and Members ofthe Baker 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 Baker County Board of Education, as of and for the year ended June 30, 2001, as listed in the table of contents. These general-pwpose financial statements are the responsibility ofthe Baker County Board ofEducation's management. Our responsibility is to expressan opinion on these general-pwpose 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 contairiedin Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtajn reasonable assurance about whetherthe 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:

2 0 0 1ARL-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 ~t 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, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries ~d related benefits w~e not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. 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 Board of Education did not record revenues and expenditures associated with
Federal donated commodities in its general-purpose financial statements. To conform to generally accepted accounting principles, these amounts should be recorded in the general-purpose financial statements.
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 Baker County Board ofEducation as of June 30, 2001, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States ofAmerica. .
In accordance with Government Auditing Standards, we have also issued our report dated February 6,2002, on our consideration of the Baker County Board of Education's internal control over fmancial reporting and our tests ofits 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.
2001ARL-13

Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements ofthe Baker County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules I through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S.Office ofManagement and Budget Circular A-133, 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 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.~
Ru ell W. Hinton State Auditor
RWH:gp 2001ARL-13

BAKER COUNTY BOARD OF EDUCATION

EXHIBIT "A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL.
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2001

JUNE 30, 2000

$

266,759.93

$

667,716.59 $

943,756.61

563,467.56

1,150,174.99

34,046.32

766,130.35

406,667.62

"$

302,606.25

5,637.61 2,066.63
302,606.25

6,066.76 496.26
205,581.61

722,193.75 112,358.94

722,193.75 112,358.94

994,416.19 173,935.42

$

302,606.25 $

1,137,358.94 $ 3,362,619.66 $ 3,661,120.06

"$

136,585.65 $

78,876.82

396,929.19

371,220.46

52,428.04

37,406.30

7,782.93

546.00

165,n1.46

124,370.25

199,205.74

10,396.63

$

112,358.94

112,358.94

173,935.42

1,025,000.00

1,025,000.00

1,200,000.00

$

1,137,358.94 $ 2,098,061.95 $ 1,996,753.66

$

302,806.25

0.00

$

302,806.25

$

302,606.25 $

205,581.81

521.96

5,837.61 2,066.63 542,027.71

6,066.76 498.26
866,004.91 182,156.70 "175,995.52

411,797.53

425,520.26

$ 1,264,557.73 $ 1,664,366.18

$

302,606.25 $

1,137,358.94 $ 3,362,619.66 $ 3,881,120.06

-3-

BAKER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Taxes 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 Food Services Operation
Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Capital Leases Operating Transfers In Operating Transfers Out
Totai Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 2,203,863.36 $ 120,735.96

61,586,56 1,022,352,19

1,631,735,83

59,025.46

26,118.35

$ 3,956,211.21 $ 1,169,206.50

$ 2,642,318.85 $ 461,006.31

5,998.72 83,045,71 88,902,12 249,095.10 110,239.72 74,024,16 255,979.88 367,363.50
962.87

17,581.01 288.49
689,818.14 23,440.00

61,576.48 8,021.34

$ .3,947,528.45 $ 1,192,133.95

$

8,682.76 $ -22,927.45

$ $ -14,746,00
$ -14,746.00 $

14,746.00 14,746.00

$ -6,063.24 $ 412,010.02

-8,181,45 20,617.22

-249.15 1,590.37

FUND BALANCE JUNE 30

$ 405,946.78 $ _ _1_3iloi,77_6;;;;,.9_9~

The notes to the general-purpose financial statements are an integral part of this statement -4-

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$ 1,587,601.00

.$

$ 214,573.63

70,679.58

1,267.86

3,912,200.32 $ 1,083,938.75 1,846,309.46
157,091.25

2,035,708.08 944,423.70
1,954,000.81 163,139.77

$ 1,658,280.58 $ 215,841.49 $ 6,999,539.78 $ 5,097,272.36

$ 3,103,325.16 $ 2,705,918.47

$ 2,256,520.80

5,998.72 100,626.72 88,902.12 249,383.59 110,239.72 74,024.16 255,979.88 367,363.50 690,781.01 2,279,960.80

6,411.48 120,173.08 81,534.62 256,228.75 98,847.96 67,147.99 204,030.87 415,707.94 610,527.16 220,199.48

$ 175,000.00 49,506.25

236,576.48 57,527.59

60,595.96 63,570.98
70.74

$ 2,256,520.80 $ 224,506.25 $ 7,620,689.45 $ 4,910,965.48

$ -598,240.22 $ -8,664.76 $ -621,149.67 $ 186,306.88

$ 105,889.20 $ $ -105,889:20
$ -105,889.20 $ 105;889.20 $

$ 120,635.20 -120,635.20
0.00 $

98,149.80 32,033.17 -32,033.17
98,149.80

$ -704,129.42 $ 97,224.44 $ -621,149.67 $ 284,456.68

1,246,157.13 205,581.81

1,884,366.18

1,598,344.29

-249.15 1,590.37

1,731.02 -165.81

$ 542,027.71 $ 302,806.25 $ 1,264,557.73 $ 1,884,366.18

-5-

BAKER COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT 'C'

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 1,874,961,00 $ 2.203,863,36

52.026.00

61,586.56

1.436,796.00 1,631.735.83

15.000.00

59.025.46

Total Revenues

$ 3.378.783,00 $ 3.956.211.21

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
, Food Services Operation Capital Outlay Debt Service

$ 2.226.366.00 $ 2,642,318.85

82.379.00 85.475.00 217.806.00 106.067.00 93.445,00 195,842,00 365,556.00
1,060.00

5.998.72 83.045,71 88.902.12 249,095.10 110,239.72 74,024.16 255.979.88 367,363.50
962.87

69,597,82

Total Expenditures

$ 3.373,996.00 $ 3.947,528.45

Excess of Revenues over (under) Expenditures

$

4,787.00 $

8,682.76

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ -14.746.00

, Total Other Financing Sources (Uses)

$ -14,746,00

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JU~Y 1. 2000
Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

$

4~787.00 $

-6,063.24

512.913.97

412,010.02

1,264.35

FUND BALANCE JUNE 30.2001

$ 518,965,32 $ 405.946.78

SPECIAL REVENUE FUND' ~. ACTUAL

(BUDGET

BUDGET

BASIS)

$ 150.091.00 $ 120.735.96 495.559.00 1,022.352.19

74.786,00

26,118.35

$ 720.436,00 $ 1,169.206,50

$ 445,564.00 $ 461.006.31

18.970.00

17.581.01 288,49

2,091.00
228.811,00 '25.000.00

689.818,14 23.440.00

$ 720,436.00 $ 1.192,133,95

$'

0,00 $ -22.927.45

$ 14.746.00 $, 14.746,00

$

0,00 $

23.745,71

47,473.92

-8,181,45 20.617.22
-249,15 1,590,37

$ 71,219,63 $ 13,n6,99

The notes to the general-purpose financial statements are an integral part of this statement -7-

.BAKER COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30.2001

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The Baker 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 and an account group 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. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.

General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. A Gener3.l 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 go.vemmental 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 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 of the School District, in compliance with generally accepted accounting principles

applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account

group presentedin this report are as follows:.

.

GOVERNMENTAL FUND TYPES - are used to account for all or most of a 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.

-8-

1,._ .," . :

BAKER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 200 I

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
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 governmental funds. Other l.iabilities, which are not expected to be fin.anced from
available spendable resources, are reported in the General Long-Term Debt Account Group.
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 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 and therefore 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.
-9-

BAKER COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30,2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES
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 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. 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, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30,2001. Also, the State's portion ofthe compensation paid in July and August 2001 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 Jime 30, 2000, were recorded in the year ended June 30, 2001. 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 Baker 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 ofbudget
a control was established by the Board at the aggregate level. The budget for governmental fundswas
prepared on 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 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(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 financ"ial
.;, 10-

BAKER COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30.. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES'

institutions.

Georgia

L.aws

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. In selecting among options for investment or among institutional bids for deposits, the highest rate ofretuin 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 ofany corporation ofthe United States government,

(5) Prime banker's acceptances,

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

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

RECEIVABLES

Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimb1,U'Sed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition crit~ria 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.

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BAKER COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30,2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PROPERTY TAXES

The Baker County Board of Conimissioners fixed the property tax levy for the 2000 tax year (calendar year) on September 12,2000 (levy date). Taxes were due on January 17, 2001 (lien date).
.Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001, The Baker County Tax Commissioner bills and collects the property . taxes for the School District, withholds 1.25% oftaxes collected as a f~e for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30~ 2001 for maintenance and operations amounted to $1,611,975.13,

The tax millage rate levied for the 2000 tax year (calendar year) for the Baker County Board of . . Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

. ~mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $214,573,63 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax on~e an additional $812,099,29 h~ 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), The School District uses the purchases method to account for inventories ofpurchased foods whereby expenditures are recorded at the time of purchase. Both the donated food commodities inventory and the purchased foods inventory .reported on the balance sheet are equally offset by reservations offund balance which indicates that they do not constitute "available spendable resources" even though they are a component of net current assets. The Federally assigned value of donated commodity items received and consumed has not been reflected as revenues and expenditures in the general-purpose financial statements, To conform to generally accepted accounting principles, these amounts should be recorded in the general-purpose financial statements.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are . recognized in the financial statements during the year bonds are issued. General obligation bonds

- 12-

BAKER COUNTY BOARD OF EDUCATION

EXHIDIT "0"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNlFICANT ACCOUNTING POLICIES

are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount

of these bonds is recorded in the General Long-Tenn Debt Account Group.

.

INTERFUND TRANSACTIONS

The School District has the following types of interfund transactions:

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

Operating transfers are recorded for all interfund transactions other than reimbursements.

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the generai-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 ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

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 gu~teeofinsurance, or by collateral. The aggregate ofthe 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. Ifa depository elects the pooled method (OC~A 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,

- 13-

BAKER COUNTY BOARD OF EDUCATION

EXHIDIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS

(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the$tate 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, arid the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS

At June 30, 2001, the bank balances were $1,128,344.43. The amounts ofthe total bank balances are

classified into three categories of credit risk:

.

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 pl~ging 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, 2001, as follows:

Risk Category

Bank Balance

1 2
3
. Total

$ 100,000.00 0.00
1,028,344.43
$ 1.128.344.43

- 14-

f'

BAKER COUNTY BOARD. OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 2001

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS

At June 30, 2001, the carrying value of the School District's total investments was $563,487.56

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 ofthe State ofGeorgia, 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 govertunent 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 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. Gove~ent .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, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.

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. 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 ofassets; errors or omissions; job related illness or injuries to employees; natural disaster

and unemployment compensation.

.

- 15 -

BAKER COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 4: RISK MANAGEMENT

The School District has obtained commercial insurance for risk of loss associated with torts and assets. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance cpverage in any ofthe past three years.

The School District has elected to self-insure for all losses related to natural disaster. In addition, the

School District has elected to self-insure for errors or omissions, which in~ludes, among other risks,

risks for sexual harassment and discrimination. The School District has not experienced any losses

related to these risks in the past three years.

.

The School District is self-insured with regard to unemployment compensation claims. 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 ofthat loss can be reasonably estimated.

Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

$

0.00 $

1.162.00 $

1.162.00 $

0.00

$

0.00 $

0.00 $

0.00 $

0.00

The School District participates in the Georgia Education Workers' Compensation Trust, a public

entity risk pool organized on December 1, 1991, to develop, implement and administer a program of

workers' compensation self-insurance for its member organizations. The School District pays an

annual premium to the Trust for its general insurance coverage. Additional insurance coverage is

provided thrOugh an agreement by the Trust with the United States Fidelity and Guaranty Company

to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per

occurrence, up to $2,000,000.00.

.

T

he

School

District

h. as

purchased .

surety

bonds

to

provide

additional

insurance

coverage

as

follows:

Position Covered

Amount

Superintendent Principal Summer Feeding Director

$ 25,000.00 $ 10,000.00 . $ 25,000.00 .

- 16-

BAKER COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES

The Baker County Board of Education has entered into various lease agreements as lessee for the

purchase of buses. These lease agreements qualify as capital leases for accounting purposes and,

therefore, have been recorded at the presentyalue of the future minimum lease payments as of the

date oftheir inception.

.

GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose General Government - Series 1998

Interest Rates 4.45% - 4.46%

Amount $ 1,025,000.00

The changes in General Long-Term Debt .during the fiscal year ended June 30, 2001, were as follows:

Balance July 1, 2000
Deductions Debt Retired
Balance June 30,2001

Capital Leases

General Obligation
Bonds

Total

$ 173,935.42 $ 1,200,000,00 $ 1,373,935.42

61,576.48

175,000.00

236,576.48

$ 112.358.94 $ 1.025,000.00 $ 1.137.358.94

At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 2005

$ 50,379.98 $ 319,382.50 $ 369,762.48"

40,592.38

365,587.50

406,179.88

22,430.88

414,011.25

436,442,13

7.476.96

7.476.96

Total Principal and Interest $ 120,880.20 $ 1.098,981.25 $ 1.219,861.45

Deduct: Imputed Interest

8.521.26

Net Present Value of FutUre Minimum Lease Payments $ 112.358,94

- 17-

BAKER COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $69,836.01 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia DepartIitent of :Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $56,869.87

Paid to the Teachers Retirement System of Georgia FQr Teachers Retirement System (TRS) Employer's Cost In the amount of $2,241.14 .

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$10,725.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

. 98/97S-604-054

$ 1.229.322.13 $ 5.000.00

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

Note 8: .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.

- 18-

f,;

, BAKER COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 9: 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 CONTRIBUTIONS 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 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 245,524.55 $ 223,983,18 $ 233,099,74

- 19-

BAKER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND
JUNE 30, 2001

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Total Assets

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 35,701.15 $ 36,415.53

~48,423.66 .

5,837.61 2,088,63

$ 192,051.05 $==3:=6:==,4.1..5....5..3. :.,

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant BalanCes Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total ~und Equity
Total Liabilities and Fund Equity

$ 170,042.62 $ 8,231.44
$ 178,274.06 $

11,765.00 19.078.64 5.571.89
36.415.53

$

5,837.61

2.088.63

5,850.75 $

0.00

$ 13,n6.99 $

0.00

$ 192,051.05 $==3=6"",,4;,,:1.5..5...3...

See notes to the general-purpose financial statements, 20 -

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS
JUNE 30, 2001 JUNE 30, 2000

$

72,116,68 $. 23,188.46

$ 32,816.57

181,240.23

310,127.97

5,837.61 2,088.63

6,086.76 498.26

$ 32,816.57 $ 261,283.15 $ 339;901.45

$

198.70 $

198.70 $ 102.067.28

8,249.91

190.057.53

179,810.65

24,367.96

51,678.04

37,406.30

5.571;89

$ 32,816.57 $ 247.506.16 $ 319,284.23

$

5,837.61 $

6,086.76

2,088.63

498.26

$

0.00

5,850.75

14,032.20

$

0.00 $

13,776.99 $

20,617.22

$ 32,816.57 $ 261,283.15 $ 339,901.45

- 21 -

.

BAKER COUNTY BOARD OF EDUCATION

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

SPECIAL REVENUE FUND

YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction . Support Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Food Services Operation
Capital Outlay Debt Service
Principal Interest
Total Expenditures
Excess of Revenues over (underfExpenditures
OTHER FINANCING SOURCES
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
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY . PROGRAMS

$ 13,410,00 $ 107,325,96 660,209,87 7,798.35
$. 681,418.22 $ 107,325.96

$ 107.325.96

$ 689,818.14

$ 689,818,14 $ 107,325.96

$ -8,399.92 $

0.00 .

218,47

$ -8,181.45 $

0.00

20.617.22

0.00

-249.15 1,590.37

$ 13,n6.99 $===0:=,=00=

See notes to the general-purpose financial statements. - 22 ~

EXHIBIT"F"

. FEDERAL PROGRAMS

TOTALS YEAR ENDED . JUNE 30, 2001 JUNE 30, 2000

$ 120,735.96 $

$ 362,142.32

1,022,352.19

18,320.00

26,118.35

221,499.02 904,494.83
35,265.89

$ 380,462.32 $ 1,169,206.50 $ 1,161,259.74

$ 353,680.35 $ 461,006.31 $ 533,257.18

17,581.01 288.49
23,440.00

17,581.01 288.49
689,818.14 23,440.00

19,939.49 13,718.84
1,690.90 609,547.68

7,740.14 277.96

$ 394,989.85 $ 1,192,133.95 $ 1,186,172.19

$ -14,527.53 $ -22,927,45 $ -24,912.45

14,527.53

14,746.00

32,033.17

$

0.00 $

-8,181.45 $

7,120.72

0.00

20,617.22

11,931.29

-249.15 1,590.37

1,731.02 -165.81

$

0.00 $

13,776.99 $ o:=II,....;;2;;:0,!ij,6.1...7...=22=

- 23-

BAKER COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$ 563,487.56 _ _ _ _ _ $ _ _...:.48~0:.a..,1:.:::9..:.:4.=.;50~

$ 563,487.56 $==~48~0~,1;,;;;9,;,;4,~50~

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable .Retainages Payable
Total Uabilities
FUND EqUITY
Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity
Total liabilities and Fund Equity

$

21,459.85 $

$

21,459.85 $

,115,125.80 91.50
165,771.46 199.205,74
480,194.50

$ 542,027.71

0.00 $ $ 542,027.71 $

0.00 0,00

$ 563,487.56 $ ==~48~0~.1~94~.~50~

See notes to the general-purpose financial statements. - 24-

EXHIBIT"G"

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

. TOTALS JUNE 3D, 2001 JUNE 3D. 2000

$

0.00 $

0.00 $ 455,858.50

563,487.56

1,150,174.99

480,194.50

39,939.10

$

0.00 $ 1,043,682.06 $ 1,645,972.59

$ 13~,585.65 $ 262,170.08

91.50

2,878.50

165,771.46

124,370.25

199.205.74

10,396.63

$ 501,654.35 $ 399,815.46

$ 542,027.71 '$ 888,004.91 182,156.70 175,995.52

$

0.00

0.00

0.00 .

$

0.00 $ 542,027.71 $ 1.246,157.13

$

0.00 $ 1,043.682.06 $ 1.645.972.59

- 25-

. BAKER COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2001

REVENUES State Funds Taxes Other Funds Total Revenues
EXPENDITURES Capital Outlay Land and Land Improvements Building and Building Improvements Total Expenditures
Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses) . Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses
FUND BALANCE JUL'V 1
FUND BALANCE JUNE 30

. BOND PROCEEDS'

GEORGIA STATE FINANCING AND . INVESTMENT COMMISSION

$ 1,587,601.00

$

69,087.11

1,592,47

$

69,087.11 $ 1,589,193.47

$

0.00 $ 2,256,520.80

$

0.00 $ 2,256,520.80

$

69,087.11 $

-667,327.33

$ $ -415,064.31
$ -415.064.31 $

491,331.81 491 ,331.81

$ -345,977.20 $ . -175,995.52

888,004.91

175.995.52

$

542,027.71 ' $=====O.=OO~

See notes to the general-purpose financial statements.
-26 -

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$.

0.00 $ 1,587,601.00

$

12,317.93

70,679.58

72,679.44

$

0.00 $ 1,658,280.58 $

84,997.37

$

72,500.00

$

0.00 $ 2,256,520.80

147,699.48

$

0.00 $

2,256,52~.80 $

220,199.48

$

0.00 $ -598,240.22 $ -135,202.11

$ $ -182,156.70
$ -182,156.70 $

491,331.81 -597,221.01
-105,889.20

$ -182,156.70 $ -704,129.42 $ -135,202.11

182,156.70

1,246,157.13

1,381,359.24

$

0.00 $

542,027.71 $ 1,246,157.13

-27 -

BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
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 National School Lunch Program Pass-Through From Office of School Readiness Food ,and Nutrition Program Summer Food Service Program for Children

10.553 10.555
10.559

NlA $ 41,241.74

NlA

127,559.12 $

NlA

491,409.01

(2) 198,190.66 (3)
491,627.48

Total Child Nutrition Cluster

$ 660,209.87 $

689.818.14

Other Programs

Pass-Through From Georgia Department of Education

Food and Nutrition Program

Food Distribution Program

10.550

NlA

(1)

(1 )

Total U. S. Department of Agriculture

$ 660,209.87 $

689.818.14 .

Education, U. S. Department of Spedal Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education At:J. Part B - Special Education Flow Through Preschool Part C - Special Education Spedal Education Capacity Building Improvement

84.027 84.173
84.173

NlA $ 60.762.00 $

NlA

12,000.00

NlA

1,739.00

60,762.00 12,000.00
. 1,739.00

Total Special Education Cluster

$ 74,501.00 $

74.501.00

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education At:J. Title I Accountability Grant Grants to Local Educational Agendas Title I! Eisenhower Professional Development Title VI Innovative Education Program Strategies Class Size Reduction Pass-Through From Georgia Department of Human Resources Safe and Drug-Free Schools and Communities Pass-Through From Southwest Georgia Regional Educational Service Agency Safe and Drug-Free Schools and Communities
Total U. S. Department of Education

84.348 84.010 84.281 84.298 84.340
84.186
84.186

NlA

24,660.00

24,660.00

NlA

181.054.00

'181,054.00

NlA

15,500.40

15.500.40

NlA

5,238.00

5.238.00

NlA

24,683.00

24,683.00

NlA

15,000.00

16;679.37 (3)

NlA

25,672.00

$ 366.308.40 $

25,672.00 367,987.77

.-28- .

BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Health and Human Services. U, S. Department of Pass-Through From Georgia Department of Human Resources Abstinence Education Block Grant Child Care Services Child Care Development Program
Total U. S. Department of Health and Human Services

CfDA NUMBER

PASS THROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

93.235 93.575

NlA $ 20.914.56 $

NlA

36,505.92

$ 57,420.48 $

22.259.11 (3) 69.353.45 (3)
91,612.56

Total Federal Financial Assistance

$ 1,083,938,75 $

NlA =Not Available

Notes to the Schedule of Expenditures of federal Awards

(1) . Commodities valued in the amount of $6,470.08 were received during the current fiscal year and were not recorded In the School District's financial statements. .
(2) Expenditures for the School Breakfast Program were not maintained separately and are induded In the 2001 National School Lunch Program.
(3) Expenditures for this program indude State, and/or Other funds. Expenditures are not maintained by fund source, -

Major Programs are Identified by an asterisk (0) In front of the CFDA number.

The School District did not provide Federal AssIstance to any SUbredPJent.

The accompanying schedule of expenditures of Federal awards Indudes the federal grant activity of the Baker 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~

1,149,418.47

See notes to the general-purpose finandal statements.

29

BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grant
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program Students with Disabilities Category II Category III Category IV Gifted Student - Category VI Remedial Education Program Altemative Education Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Education Equalization Funding Grant Food Services Other State Programs At-Risk Summer School Program. Health Insurance Preschool HandiCapped Program Statewide Local Education Improvement Teachers' Retirement Lottery Programs Computers In the Classroom
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of After School Programs Georgia's Reading Challenge
Human Resources, Georgia Department of Abstinence Education Grant

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 15,000,00 $ 15,000,00

$ 94,467,00 16,862.00
365,028.00 .43,491.00 152,981,00 193,584.00
110,490.00 134,989.00
15,346.00 7,552.00 21,264.00 6,911.00 19,078.00 37.513.00 8,751.00 336,413.00

185,517,00 57,590.00 88.300.00 26.754.00
1.637.00 19,136.00
$
936.48 56,869.87 . 1,788.96
6,100.00 2,241.14

13,410.00 7,205.00

94,467.00 16,862.00 365,028.00 43,491.00 152,981.00 193,584.00
110,490.00 134,989.00
15,346.00 7,552.00 21.264.00 6.911.00 19,078.00 . 37,513.00 8,751.00
336,4~3.00
185,517.00 57,590.00 88,300.00 26,754.00
1.637.00 19,136.00 13,410.00
936.48 56,869.87
1,788.96 6,100.00 2,241.14
7,205.00

1,572,601.00 1,572.601.00.

100,120.96

100,120.96

10,725.00

1'0,725.00

54,616.16 119,078.00
7.853.75

54,616.16 119.078.00
7,853,75

$ 2,203,863.36 $ 120,735.96 $ 1,587,601,00 $ 3,912,200.32

See notes to the general-purpose financial statements,

30 -

:,"
BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2001

SCHEDULE -3"

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's QJrrent estimate of total cost for each project. Includes all cost from project inception to completion.
(3) The voters of Baker County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for this project 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.

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BAKER COUNTY BOARD OF EDUCATION GENERAL FUND aUALITY BASIC EDUCATION PROGRAM (aBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program Students with Disabilities category III Category IV Gifted Student category VI Remedial Education Program Altemative 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

$

120,555.00 $ 218,637.09 $

3,448.58 $ 222,085.67

21,519.00

465,835.00

328,454.80

17,072.70

345,527.50

55,501.00

110,346.78

110,346.78

195,228.00

228,612.97 .

16,995.64

245,608.61

247,044.00

263,355.17

14,390.29

277,745.46

332,855.00

323,283.07

7,998.09

331,281.16

24,514.66

28.58

24,543.24

9,638.00

27,136.00

96,678.32

96,678.32

8,819.00

11,097.84

11,097.84 .

24,347.00

19,037.06

18.68

19,055.74

$

1,508,477.00 $ 1,624,017,76 $ 59,952.56 $ 1,683,970.32

47,872.00 11,167.00

76,662.04

10,441.94 14,127.31

87,103.98 14,127.31

TOTAL aBE FORMULA FUNDS

$

1,567,516.00 $ 1,700,679.80 $ 84,521.81 $ 1,785.201.61

(1) Comprised of State Funds plus Local Five Mill Share.

See notes to the general-purpose financial statements.

32

BAKER COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

Baker County Elementary School central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,499,658.00 $ 1,683,970.32

8,819,00

$

1,508,477.00 $ ===::.1~,6;;;83~,;;;;97~0~.3~2

See notes to the general-purpose financial statements.
- 33-

SECTIONll
, COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
: STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS . 254 Washington Street, S. w.. Suite 214
Atlanta. Georgia 30334-8400
February 6~ 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Baker 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 ofBaker County Board ofEducation as ofand for the year ended June 30, 2001, and have issued our report thereon dated February 6,2002. 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 Statesof America 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 Baker 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 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 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 Baker 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 statemen, ts and not to provide assuranc-e on the internal
200 1YB-40

control over financial reporting. However, we noted certain matters involving the internal control over fmancial reporting and its operation that we consider to be reportable conditions. 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 Baker County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6041-01-01 and FS-6041-01-02.
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, ofthe reportable conditions described above, we consider.item FS-6041-0102 to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Baker 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.4:Lk .....
R ell W. Hinton State Auditor
RWH:gp 200 I YB-40

RUSSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
. . 254 Washington Street, S.w., Suite 214
Atlanta, Georgia 30334-8400
February 6,2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Baker County Board of Education
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33
Ladies and Gentlemen:
Compliance
We have audited the compliance ofBaker County Board ofEducation with the types ofcompliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Baker County Board of Education's major Federal programs are identified in the Summary ofAuditor's Results Section ofthe accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility ofBaker County Board of Education's management. Our responsibility is to express an opinion on Baker County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller G~eral ofthe United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations; Those standards and OMB Circular A-I33 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 Baker 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 Baker County Board ofEducation's compliance with those requirements.
:200ISA-IO

In our opinion, the Baker 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, 2001.
Internal Control Over Compliance
The management of Baker 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 Baker 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 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 ofperforming 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 Baker County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be ~d should not be used by anyone other than these specified parties.

RWH:gp 2001SA-1O

Rus ell W. Hinton State Auditor

SEcrIONm AUDITEE'SRESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

BAKER COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-604l-99-01 FS-604l-99-02 FS-604l-00-01 FS-604l-00-02 FS-604l-00-03

Further Action Not Warranted Further Action.Not Warranted Unresolved - No Corrective Action Implemented Previously Reported Corrective Action Implemented Unresolved - No Corrective Action Implemented

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUNALENTS Inadequate Separation of Duties . Finding Control Number: FS-604l-00-0l

Due to lack offunds, the School Districtcannot provide adequate separation ofemployee duties in the performance of ac~ountingfunctions and related procequres.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6041-00-03

The School District at this time does not have adequate funds to provide for and maintain a General Fixed Assets Account Group.

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6041-99-01 . FA-6041-00-01

Further Action Not Warranted PreviouSly Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

I
BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS.
YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDITOR'S RESULTS

I. Type ofReport Issued on the Financial Statements The auditor's opinion on the Baker 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 Baker County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash EqUivalents

General Fixed Assets

Of the reportable conditions described above, General Fixed Assets is considered to be a

material weakness.

.

3. Noncompliance Material to the Financial Statements The audit ofthe Baker 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 Baker 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 Baker County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133

The Baker County Board ofEducation's audit did not disclose audit findings required to be

reported by section..5IO(a) ofOMB Circular A-I33.

.

7. MajorPrograms Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program IO.5S5 Food and Nutrition Program - Food Services - National School Lunch Program 10.559 Food and Nutrition Program - Summer Food Service Program for Children

8. Tvpe "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee The Baker County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.

-I -

BAKER COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS Inadequate Separation ofDuties Reportable Condition Repeated From Prior Year Finding Control Number: FS-6041-01-01
An examination ofthe internal accounting control procedures revealed that the School District did not maintain adequate separation ofemployee duties in the performance ofthe following accounting functions and procedures relative to Cash and Cash Equivalents:
The bank reconciliation functions for all accounts were not separated from the check preparation or general ledger functions. In addition, custody ofthe signature module was not separated from the check preparation or voucher preparation function.
Separation ofduties involving key accounting functions is the basis for achieving an adequate system ofinternal control. These deficiencies were a result ofmanagement's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine ifemployees duties can be reassigned to achieve a higher degree of internal control with existing staff.
GENERAL FIXED ASSETS Failure to Maintain GeneralFixed Assets Account Group . Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6041-01-02
The Baker 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 ari 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. Detiiled records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.
-2-