l'J1/-1 A goo "R I 26 13 I 8 1~Cj8-q4 AUDIT REPORT BALDWIN COUNTY BOARD OF EDUCATION MILLEDGEVILLE, GEORGIA YEAR ENDED JUNE 30, 1999 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 BALDWIN 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 AND INDIVIDUAL FUND STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 20 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 21 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 22 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 24 DEBT SERVICE FUND I COMBINING BALANCE SHEET 26 J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 27 K FIDUCIARY FUND TYPES STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND 28 BALDWIN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 29 2 SCHEDULE OF STATE REVENUE 31 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 32 4 SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS 33 ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 5 OVERALL 35 6 BY PROGRAM 36 SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITII GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITII REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITII OMB CIRCULAR A-133 SECTIONID 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 Washington Street. S.w., Suite 214 Atlanta, Georgia 30334-8400 February 22,2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Baldwin 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 of the Baldwin County Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Baldwin County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1999, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: 99ARL-13 * The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to confonn to generally accepted accounting principles. * School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general purpose financial statements. The aggregate effects on the general purpose financial statements ofthese variances or omissions have not been detennined, but are believed to be material. In our opinion, except for the effects of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and 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 Baldwin County Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated February 22,2000, on our consideration of the Baldwin County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was perfonned for the purpose of forming an opinion on the general purpose financial statements of the Baldwin County Board of Education taken as a whole. The accompanying combining and individual fund statements (Exhibits E through K) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part ofthe general purpose financial statements. Such infonnation has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such infonnation is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. A copy of this report has been filed as a pennanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully submitted, 1i;!2~o~~ State Auditor RWH:jb 99ARL-13 BALDWIN COUNTY BOARD OF EDUCATION BALDWIN COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1999 EXHIBIT "A" DEBT SERVICE FUND FIDUCIARY FUND TYPE AGENCY FUND $ 18,936.47 $ 3,442.98 2,576.94 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 1999 JUNE 30, 1998 $ 11,500,907.87 $ 8,383,517.15 5,474,329.41 9,933,411.85 5,138,141.34 5,286,563.99 9,542.43 $ 21,513.41 13,983,486.59 66,754.66 36,075.79 21,513.41 13,983,486.59 51,422.84 34,957.81 16,200.54 14,243,799.46 $ 21,513.41 $ 3,442.98 $ 14,005,000.00 $ 36,221,209.07 $ 37,959.416.07 $ 946,280.24 $ 976,403.85 3,490,008.03 3,330,127.23 28,110.75 272,367.43 441,313.53 130,592.63 $ 3,442.98 3,442.98 2,554.81 $ 14,005,000.00 14,005,000.00 14,260,000.00 $ 3,442.98 $ 14,005,000.00 $ 18,886,044.78 $ 19,000,156.70 $ 21,513.41 $ 21,513.41 $ 21,513.41 $ $ 74,498.88 $ 141,172.88 29,390.02 24,986.94 9,278.30 21,513.41 16,200.54 7,380,095.73 3,408,229.55 33,513.15 54,785.62 66,754.66 36,075.79 4,217,514.47 51,422.84 34,957.81 8,949,175.81 2,437,142.00 5,466,529.88 3,841,185.38 $ 17,335,164.29 $ 18,959,259.37 3,442.98 $ 14,005,000.00 $ 36,221,209.07 $ 37,959,416.07 -3- BALDWIN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30.1999 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 Central Support Services Other Support 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) Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds Par Value Premium on Bonds Sold 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 JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 25,248,843,04 $ 7,872,325.33 546,173.15 $ 33,667,341.52 $ 851,035.70 4,651,286.63 625,138.50 6,127,460.83 $ 22,827,705.95 $ 1,388,165.79 810,857.98 705,277.73 587,440.68 2,117,557.93 358,546,66 3,034,530,05 1,636,809.18 160,881.01 36,518.85 12,351.46 2,636,524.87 291,633.74 342,485.65 154,539.38 12,760.23 81,973.78 192,375.63 59,096.85 2,303,496.59 $ 33,676,643.27 $ $ -9,301.75 $ 6,074,886.72 52,574.11 $ $ -10,017.01 $ -10,017,01 $ $ -19,318.76 $ 3,319,438.45 10,017.01 10,017.01 62,591.12 316,316.89 15,331.82 1,117.98 FUND BALANCE JUNE 30 $ The notes to the general purpose financial statements are an integral part of this statement. -4- 3,300,119.69 $ 395,357.81 EXHIBIT "B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30,1999 JUNE 30, 1998 $ 615,395.42 3,741,083.08 $ 2,109,041.57 $ 6,465,520.07 $ $ 933,331.68 522.76 933,854.44 $ 26,715,274.16 $ 4,651,286.63 12,546,740.09 3,280,875.98 47,194,176.86 $ 26,119,275.17 4,365,266.04 11,506,708.06 1,809,521.70 43,800,770.97 $ 8,154,650.18 $ $ 8,154,650.18 $ $ -1 ,689,130.11 $ $ 255,000.00 670,147.50 3,394.07 928,541.57 $ 5,312.87 $ 25,464,230.82 $ 1,679,799.53 1,153,343.63 705,277.73 741,980.06 2,130,318.16 358,546.66 3,116,503.83 1,829,184.81 160,881.01 95,615.70 2,315,848.05 8,154,650.18 255,000.00 670,147.50 3,394.07 48,834,721.74 $ -1 ,640,544.88 $ 23,340,439.97 1,460,199.20 943,607.78 738,764.20 593,807.88 2,082,385.71 590,309.44 3,106,229.78 1,526,327.31 159,401.04 93,484.72 2,165,143.82 4,206,874.05 245,000.00 732,012.50 1,000.00 41,984,987.40 1,815,783.57 $ -1,689,130.11 $ 15,307,303.49 $ 50,920.00 $ 10,017.01 -10,017.01 12,500,000.00 1,941.10 14,209.57 -14,209.57 $ 0.00 $ 12,552,861.10 5,312.87 $ 16,200.54 -1,640,544.88 $ 18,959,259.37 14,368,644.67 4,584,527.94 15,331.82 1,117.98 6,546.17 -459.41 $ 13,618,173.38 $ 21:513.41 $ 17,335,164.29 $ 18,959,259.37 -5- BALDWIN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 1999 EXHIBIT "COO GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 24,294,478.05 $ 25,248,843.04 7,392,461.08 208,925.00 7,872,325.33 546,173.15 Total Revenues $ 31,895,864.13 $ 33,667,341.52 EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation $ 22,817,832.74 $ 22,827,705.95 1,386,845.68 871,400.12 692,711.17 608,539.81 2,195,147.04 433,414.30 2,992,926.62 1,774,633.00 164,909.91 39,945.00 12,014.25 1,388,165.79 810,857.98 705,277.73 587,440.68 2,117,557.93 358,546.66 3,034,530.05 1,636,809.18 160,881.01 36,518.85 12,351.46 Total Expenditures $ 33,990,319.64 $ 33,676,643.27 Excess of Revenues over (under) Expenditures $ -2,094,455.51 $ -9,301.75 OTHER FINANCING SOURCES (USES) Other Sources Other Uses $ -4,486.00 $ -10,017.01 Total Other Financing Sources (Uses) $ -4,486.00 $ -10,017.01 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -2,098,941.51 $ -19,318.76 FUND BALANCE JULY 1 3,865,783.82 3,319,438.45 Adjustments Food Inventory - Net Change in Period Donated Commodities Purchased Food -45,613.75 FUND BALANCE JUNE 30 $ 1,721,228.56 $ 3,300,119.69 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 823,805.59 $ 851,035.70 4,748,199.00 4,651,286.63 591,583.00 625,138.50 $ 6,163,587.59 $ 6,127,460.83 $ 2,805,239.94 $ 2,636,524.87 303,354.01 351,299.11 291,633.74 342,485.65 179,559.44 10,875.67 154,539.38 12,760.23 82,544.00 128,820.00 81,973.78 192,375.63 62,762.55 2,218,152.87 59,096.85 2,303,496.59 $ 6,142,607.59 $ 6,074,886.72 $ 20,980.00 $ 52,574.11 $ 10,017.01 $ 10,017.01 $ 20,980.00 $ 329,103.33 -121,306.18 62,591.12 316,316.89 15,331.82 1,117.98 $ 228,777.15 $ 395,357.81 The notes to the general purpose financial statements are an integral part of this statement. -7- BALDWIN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Baldwin County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The Board uses funds and an account group 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. 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 General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese accounts are reflected in these financial 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 ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds 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- BALDWIN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 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. 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. FIDUCIARY FUND TYPES - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include: AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., 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 liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Agency funds are purely custodial in nature and do not involve measurement of results of operations. 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 ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income. Expenditures are generally recognized when the related fund liability is incurred. - 9- BALDWIN COUNTY BOARD OF EDUCATION EXHIBIT liD" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August of1998 and ending in early June 1999. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share of these contracts are disbursed to the Board in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements. Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities. BUDGET The Baldwin County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all goveminental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this 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 of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH; rAND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating - 10- BALDWIN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (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 Baldwin County Board ofCommissioners fixed the property tax levy for the 1998 tax year (calendar year) on September 15, 1998 (levy date). Taxes were due on November 15,1998. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The Baldwin County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board. - 11 - BALDWIN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The tax millage rate levied for the 1998 tax year (calendar year) for the Baldwin County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value): School Operations 16.65 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 $4,669,624.65 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection of this tax once an additional $21,214,230.90 has been collected or on June 30, 2002, 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 of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. COMPENSATED ABSENCES Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general purpose financial statements. Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation of these financial statements. GENERAL OBLIGATION BONDS The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund - 12 - BALDWIN COUNTY BOARD OF EDUCATION EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount ofthese bonds is recorded in the General Long-Tenn Debt Account Group. INTERFUND TRANSACTIONS The Board has the following types 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. Operating transfers are recorded for all interfund transactions other than reimbursements. 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. 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 of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone 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, - 13- BALDWIN COUNTY BOARD OF EDUCATION EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 2: DEPOSITS AND INVESTMENTS (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities ofthe 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. CATEGORIZAnON OF DEPOSITS At June 30, 1999, the bank balances were $14,599,058.35. The amounts of the 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 Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. Category 3 - Uncollateralized deposits, (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name,) The Board's deposits are classified by risk category at June 30, 1999, as follows: Risk Category Bank Balance 1 $ 225,189,62 2 14,038,039.94 3 335,828.79 Total $14,599,058.35 - 14- BALDWIN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 2: DEPOSITS AND INVESTMENTS CATEGORIZATION OF INVESTMENTS At June 30, 1999, the carrying value of the Board's total investments was $5,474,329.41 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy 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 of the Primary Liquidity Portfolio is as follows: The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. 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 determines participant's shares sold and redeemed based on $ I .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 of the shares. Participation in the pool is voluntary and deposits consist offunds 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. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1999 was 27 days. The average investment duration for Fund 6 on June 30, 1999 was 1.03 years. Note 3: NON-MONETARY TRANSACTIONS The Board receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commoditiesare recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The Board 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; natural disaster and unemployment compensation. - 15 - BALDWIN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 4: RISK MANAGEMENT The Board has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years. The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years. The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for 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. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 1998 1999 Beginning of Year Liability Claims and Changes in Estimates $ 0.00 $ 11.329.00 $ $ 0.00 $ 11.336.00 $ Claims Paid End ofYear Liability 11.329.00 $ 0.00 11,336,00 $ 0,00 The Board has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Superintendent All Employees Note 5:' OPERATING LEASES Amount $ 10,000.00 $ 100,000.00 Baldwin County Board of Education has entered into various leases as lessee for rental of copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30, 1999, amounted to $56,027.12. Future minimum lease payments for these leases are as follows: Year Ending 2000 2001 2002 2003 Total Amount $ 53,902.96 39,057.04 28,157.04 3.371.92 $ 124.488.96 - 16- BALDWIN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 6: GENERAL LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 1997 . General Government - Refunding - Series 1992 4.50% - 4.75% 4.50% - 6.20% $12,500,000.00 1.505.000.00 $14,005,000.00 The changes in General Long-Tenn Debt during the fiscal year ended June 30, 1999, were as follows: General Obligation Bonds Balance July 1, 1998 $14,260,000.00 Deductions Debt Retired 255,000.00 Balance June 30, 1999 $14,005,000.00 At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows: Fiscal Year Ended June 30 General Obligation Bonds 2000 2001 2002 2003 2004 2005 $ 601,440.00 5,072,220.00 5,063,755.00 4,550,905.00 316,405.00 58.410.00 Total Principal and Interest $15,663,135.00 - 17 - BALDWIN COUNTY BOARD OF EDUCATION EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1999 Note 7: ON-BEHALF PAYMENTS The Board has recognized revenues ~d expenditures in the amount of$485,903.54 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of$362,281.90 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$12,658.64 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$110,963.00 Note 8: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1999. Project Unearned Executed Contracts 605-003 Oak Hill Middle School $ 17,618.66 10,945,185.98 $10.962.804.64 The amounts described in this note are not reflected in the general purpose financial statements. Note 9: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position. - 18- BALDWIN COUNTY BOARD OF EDUCATION EXHmIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 10: ACCUMULATED EMPLOYEES' LEAVE All twelve month employees of the Baldwin County Board of Education earn annual leave based on their number of years of continuous and creditable service. Annual leave may be accumulated up to thirty days. Unused leave, up to the maximum accumulation, is paid to employees at their current rate of pay, upon retirement or termination of employment. See Note 1 - Compensated Absences Note 11: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (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 CONTRffiUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 1999 1998 1997 100% 100% 100% $ 2,662,176.89 $ 2,417,041.24 $ 2,213,120.36 - 19- Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food Total Assets BALDWIN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 3D. 1999 EXHIBIT "E" SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS FEDERAL PROGRAMS TOTALS JUNE 30, 1999 JUNE 30,1998 $ 358,546.10 $ 93,155.59 $ 451,701.69 $ 383,341.16 12,668.26 $ 550,541.94 563,210.20 631,850.11 66,754.66 36,075.79 66,754.66 36,075.79 51,422.84 34,957.81 $ 474,044.81 $ 93,155.59 $ 550,541.94 $ 1,117,742.34 $ 1,101,571.92 See notes to the general purpose financial statements. - 20- BALDWIN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1999 EXHIBIT"F" SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30.1998 REVENUES State Funds Federal Funds Other Funds $ 153,458,00 $ 1,573.292,96 625.138.50 569,666.70 $ 127,911,00 $ 3,077.993,67 851.035.70 $ 4,651.286,63 625,138.50 772.832.42 4.354.740.55 588.935,26 Total Revenues $ 2,351,889.46 $ 569.666.70 $ 3.205,904.67 $ 6.127,460.83 $ 5.716.508,23 EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay $ $ 2.302.979.72 516,497,59 $ 2.120,027,28 $ 2.636.524,87 $ 2,494.900,16 1.207.46 47.073,99 484,58 291.633,74 341.278.19 154.539.38 12.760,23 81,973,78 145,301,64 58.612,27 516,87 291.633,74 342,485,65 154.539,38 12,760,23 81.973,78 192.375,63 59.096,85 2.303,496,59 278.390,82 305.614,73 36.141.45 152.118,53 6.352,28 34,180,61 79.776,89 52.316,03 2.163.214,82 22.006,00 Total Expenditures $ 2.302.979,72 $ 565.263.62 $ 3,206,643,38 $ 6.074.886.72 $ 5,625.012,32 Excess of Revenues over (under) Expenditures $ 48,909.74 $ 4,403,08 $ -738,71 $ 52,574,11 $ 91.495,91 OTHER FINANCING SOURCES Operating Transfers In 10.017,01 10.017,01 14.209,57 Excess of Revenues and Other Financing Sources over (under) Expenditures $ 48.909,74 $ 4,403,08 $ 9.278,30 $ 62.591,12 $ 105.705.48 FUND BALANCE JULY 1 291.329,95 24.986,94 0,00 316.316,89 204.524.65 Food Inventory - Net Change in Period Donated Commodities Purchased Food 15.331,82 1,117,98 15.331,82 1.117,98 6.546,17 -459.41 FUND BALANCE JUNE 30 $ 356,689,49 $ 29.390,02 $ 9.278,30 $ 395,357,81 $ 316.316,89 See notes to the general purpose financial statements, -21- BALDWIN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1999 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Total Assets REGULAR BOND PROCEEDS $ 2,020,563.18 $ 5,457,521.48 $ 2,020,563.18 $ 5,457,521.48 Total Liabilities and Fund Equity $ 2,020,563.18 $ 5,457,521.48 See notes to the general purpose financial statements. -22 - EXHIBIT "G" GEORGIA STATE FINANCING AND INVESTMENT COMMISSION SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30,1999 JUNE 30, 1998 $ 6,565,327.40 $ 8,585,890.58 $ 4,562,576.48 $ 16,807.93 5,474,329.41 9,933,411.85 146,728.00 814,768.33 961,496.33 1,293,296.16 $ 163,535.93 $ 7,380,095.73 $ 15,021,716.32 $ 15,789,284.49 $ 156,911.05 6,624.88 $ 163,535.93 $ 962,229.41 $ 441,313.53 $ 1,403,542.94 $ 79,020.94 272,367.43 130,592.63 481,981.00 $ 7,380,095.73 $ 7,380,095.73 $ 3,408,229.55 4,217,514.47 8,949,175.81 2,437,142.00 $ 0.00 0.00 2.020.563.18 512,756.13 $ 0.00 $ 7,380,095.73 $ 13,618,173.38 $ 15,307,303.49 $ 163,535.93 $ 7,380,095.73 $ 15,021,716.32 $ 15,789,284.49 - 23- BALDWIN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30,1999 FUND BALANCE JUNE 30 $ 2,020,563.18 $ 4,217,514.47 See notes to the general purpose financial statements. - 24- EXHIBIT"H" GEORGIA STATE FINANCING AND INVESTMENT COMMISSION SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 1999 JUNE 30, 1998 $ 615,395.42 $ 615,395.42 $ 2,192,740.58 $ 3,741,083.08 3,741,083.08 3,349,394.16 230,783.10 2,109,041.57 722,111.11 $ 615,395.42 $ 3,971,866.18 $ 6,465,520.07 $ 6,264,245.85 $ 213,939.56 $ $ 1,935,146.43 512,293.12 0.00 $ 16,556.00 7,623,746.06 514,348.12 17,977.50 4,060,488.77 106,401.78 $ 2,447,439.55 $ 0.00 $ 8,154,650.18 $ 4,398,807.61 $ -1,832,044.13 $ 3,971,866.18 $ -1,689,130.11 $ 1,865,438.24 $ -605,097.87 $ -605,097.87 $ 12,500,000.00 1,941.10 $ 605,097.87 3,595,953.03 -605,097.87 -3,595,953.03 $ 0.00 $ 12,501,941.10 $ -2,437,142.00 $ 3,971,866.18 $ -1,689,130.11 $ 14,367,379.34 2,437,142.00 3,408,229.55 15,307,303.49 939,924.15 $ 0.00 $ 7,380,095.73 $ 13,618,173.38 $ 15,307,303.49 - 25- BALDWIN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30.1999 EXHIBIT "I" ASSETS Cash and Cash Equivalents Accounts Receivable PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30,1999 JUNE 30, 1998 $ 18,936.47 $ 0.00 $ 18,936.47 $ 15,784.89 2,576.94 2,576.94 415.65 Total Assets $ 21,513.41 $ 0.00 $ 21.513.41 $ ===1=6=,2=:00==:.=54= FUND EQUITY Fund Balances Reserved For Debt Service Unreserved Undesignated $ 21,513.41 0.00 $ $ ---.,;0;;.:..0:;.::0:.... 21,513.41 $ 0.00 16,200.54 0.00 Total Fund Equity $ 21,513.41 $ 0.00 $ 21,513.41 $ ===1=6=,2=:00:=:.54== See notes to the general purpose financial statements. - 26- BALDWIN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND YEAR ENDED JUNE 30, 1999 EXHIBIT"J" FUND BALANCE JUNE 30 $ 21,513.41 $ 0,00 $ 21,513,41 $ =====16=,2=0=0=,54= See notes to the general purpose financial statements, - 27- BALDWIN COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPES - AGENCY FUND YEAR ENDED JUNE 30,1999 EXHIBIT "K" BALANCE JULY 1,1998 ADDITIONS DEDUCTIONS BALANCE JUNE 3D, 1999 SPECIAL ACTIVITIES ACCOUNT ASSETS Cash and Cash Equivalents $ 2,554.81 $ 5,840.50 $ 4,952.33 $ 3,442.98 LIABILITIES Funds Held for Others $ 2,554.81 $ 5,840.50 $ 4,952.33 $ ======3=,44,;;;;2=.9:=8 See notes to the general purpose financial statements. - 28- BALDWIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1999 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 1999 Grant National School Lunch Program 1999 Grant Total Child Nutrition Cluster 10,553 10.555 NlA $ 327,131,63 (2) N/A 1,116,669,39 $ 2,173,487,78 (3) $ 1,443,801,02 $ 2,173,487,78 Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) 10,550 NlA 129,491.94 129,491,94 Total U, S, Department of Agriculture $ 1,573,292.96 $ 2,302,979,72 Education, U, S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through 1999 Grant Preschool 1999 Grant Capacity Building and Improvement 1999 Grant Total Special Education Cluster 84,027 84,173 84,173 NlA $ NlA NlA $ 595,583,00 $ 42,844,29 18,883,45 657,310.74 $ 595,583.00 42,844,29 18,883.45 657,310,74 Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1999 Grant 84.010 NlA Title II Eisenhower Professional Development 1999 Grant 84.281 NlA TItle VI Innovative Education Program Strategies 1999 Grant 84,298 NlA Goals 2000 State and Local Education Systemic Improvement Grants 1999 Grant 84.276 NlA Technology Literacy Challenge Fund Grants 1999 Grant 84.318 NlA Safe and Drug-Free Schools 1999 Grant 84.186 NlA Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant 84,048 NlA Tech-Prep Education 1999 Grant 84.243 NlA 1,149,777.42 34,749,79 41,611.00 10,410,00 18,343,00 124,142.42 1,149,777.42 34,749,79 41,611,00 136,695,91 (3) 17,774.09 124,142,42 61,259.00 5,000,00 71,276,01 (3) 5.000,00 Total U. S. Department of Education -29- $ 2,102.603.37 $ 2.238.337.38 BALDWIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30.1999 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Health and Human Services. U. S. Department of Direct Head Start 1999 Grant CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 93.600 $ 975.390.30 $ _---'96=8.::.;3o:.::6;.:;.o~0 Total Federal Financial Assistance $ 4.651.286.63 $ NlA =Not Available Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food Distribution Program represent the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year. (2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1999 National School Lunch Program. (3) Expenditures for this program include State. and/or Other Funds. Expenditures are not maintained by fund source. Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Baldwin 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. 5.509.623.10 See notes to the general purpose financial statements. - 30- BALDWIN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1999 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation RegUlar Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Specialist Local Fair Share Deferred Summer Salaries (Prior Year) Deferred Summer Salaries (Current Year) Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Altemative Program Apprenticeship Program At-Risk Summer School Program Health Insurance Pay for Performance Program Preschool Handicapped Program Remedial Summer School Program Special Education Support Cost Student Records Teachers' Retirement Year 2000 Project Funding Lottery Programs Assistive Technology 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 Georgia's Reading Challenge Reading First Program OTHER Georgia Council for the Arts Georgia Challenge Grant Child and Youth Coordinating Council Student Transition and Recovery Prevention! Intervention Program GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 12,646,925.00 4,821,663.00 488,650.00 576,804.00 176,625.00 3,687,518.00 744,018.00 226,039,00 415,391.00 435,072.64 129,950,00 235,920,00 49,736.00 86,527.00 -2,633,829.00 -2,968,750.00 3,220,688.00 1,759,352.00 $ 12,057.85 98,897.52 35,000.00 18,134.52 362,281.90 76,000.00 91,261.00 15,791,03 56,000.00 4,722.75 12,658.64 1,279.00 153,458,00 12,425.40 123.936.00 $ 12,646,925.00 4,821,663.00 488,650.00 576,804.00 176,625.00 3,687,518.00 744,018.00 226,039.00 415,391.00 435,072.64 129,950.00 235,920.00 49,736.00 86,527,00 -2,633,829.00 -2,968,750.00 3,220,688.00 1,759,352.00 153,458.00 12,057.85 98,897.52 35,000.00 18,134.52 362,281.90 76,000.00 91,261.00 15,791.03 56,000,00 4,722.75 12,658.64 1,279.00 12,425.40 123,936.00 .110.963,00 $ 615,395.42 433,305.30 615,395.42 433,305.30 110,963.00 180,600.00 127,911.00 180,600.00 127,911.00 29,896.19 29,896.19 45,000.00 45,000.00 See notes to the general purpose financial statements. $ 25,248,843.04 $ 851,035.70 $ 615,395.42 $ 26,715.274,16 - 31 - BALDWIN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30.1999 SCHEDULE "3" PROJECT Payment of Principal and Interest on 1992 General Obligation Refunding Bonds Coming Due January 1, 1998 and Thereafter Capital Outlay Projects ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) (4) AMOUNT EXPENDED IN PRIOR YEARS $ 2,390,663.00 $ 28,730,000.00 2,390,663.00 $ 28,810,789.77 352,297.50 $ 357.425.00 8,154.650.18 4.165.330.37 $ 31.120.663.00 $ 31.201.452.77 $ 8.506,947.68 $ 4,522.755.37 (1) The Board's original cost estimate as specified in tile resolution calling for the imposition of the Local Option Sales Tax. (2) The Board's current estimate of total cost for the projects. Includes all cost from project inception to completion. (3) The voters of Baldwin County approved the imposition of a 1% sales tax to fund the above projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds. state, local property taxes and/or other funds over the life of the projects. (4) In addition to the expenditures shown above. the Board has incurred interest expense to provide advance funding for the above projects as follows: Prior Years $ 620,587.50 Current Year Total 572.850.00 $ = ......1;.;".1_9.oil3.,;,;43=7=.5~0 See notes to the general purpose financial statements. -32 - BALDWIN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30, 1999 SCHEDULE "4" EXPENDITURES ASSISTIVE TECHNOLOGY COMPUTERS IN THE CLASSROOM PREKINDERGARTEN PROGRAM Current Instruction $ Support Services Improvement of Instructional Services Student Transportation Services Other Support Services 7,811.80 $ 123,936.00 $ 384,749.79 $ 1,207.46 47,073.99 484.58 TOTAL 516,497.59 1,207.46 47,073.99 484.58 Total Expenditures $ 7,811.80 $. 123,936.00 $ 433,515.82 $ =~5~65;;,;,2;;,;6;;;;;3~.6~2 RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Assistive Technology Computers in the Classroom Pre-Kindergarten Program $ 393,653.59 7,811.80 123,936.00 39,862.23 $ 565,263.62 See notes to the general purpose financial statements. - 33- BALDWIN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1999 SCHEDULE "5" Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis Salaries (1) (2) Operations Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures per Audit FOURTEEN WEIGHTED AND MEDIA CENTER PROGRAMS 100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS $ 18,769,962.00 $ 5.: . .9;. :;9. <.,;.,7. .;.1.: . .3.. : ,.00: . . $ 19,744,188.48 987,022.60 $ _ _--=-86::...4:..t,;,9:..:5;..:;6.:.=.2:=..0 $ 20,731,211.08 -127,090.14 $ _--=2;.;;;.0l.;;.,6.::...04.;.z..,1~2;.;;;.0.;.;;;.94..;.. Amount of Underexpenditure for Total Allotment $ 0.00 $=====0=.0==0 Note: (1) Salary accruals (July and August 1999 Deferred Salaries) reported as expenditures in the General Purpose Financial Statements are not included on this analysis in order to comply with program guidelines. (2) Salary accruals (July and August 1998 Deferred Salaries) reported as expenditures in the prior year General Purpose Financial Statements are included on this analysis as required by program guidelines. See notes to the general purpose financial statements. - 35 - BALDWIN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1999 SCHEDULE "6" EDUCATION TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES (1 )(2) OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 1,395,148.50 $ 1,600,132.52 $ 15,403.52 $ 1,615,536.04 3,270,512.70 4,545,237.03 125,808.41 4,671,045.44 $ 4,665,661.20 $ 6,145,369.55 $ 141.211.93 $ 6,286,581.48 $ 0.00 1,335,770.10 1,722,721.74 36,096.88 1,758,818.62 0.00 2,243,250.90 2,456,630.86 48.656.52 2,505,287.38 0.00 1,753,478.10 2,052,075.64 132,910.47 2,184.986.11 0.00 708,704.10 836,657.39 57,113.72 893,771.11 0.00 675,368.10 797,219.62 101,936.55 899,156.17 0.00 $ 11,382,232.50 $ 14,010,674.80 $ 517,926.07 $ 14,528,600.87 $ 3,920,700.90 $ 457,814.92 $ 1,070,159.09 2,221,164.09 174,073.35 4,840.68 $ 2,150.27 153,659.14 70,971.60 462,655.60 1,072,309.36 2.374,823.23 245,044.95 $ 3,920,700.90 $ 3,923,211.45 $ 231,621.69 $ 4,154,833.14 0.00 654,715.80 812,326.18 85.260.89 897,587.07 0.00 $ 4,575,416.70 $ 4,735,537.63 $ 316,882.58 $ 5,052,420.21 $ 439,785.00 $ 416,148.31 $ 30,147.55 $ 446,295.86 0.00 $ 16,397,434.20 $ 19,162,360.74 $ 864,956.20 $ 20,027,316.94 $ 410,841.00 $ 581,827.74 $ 581,827.74 0.00 120,314.00 $ 122,066.40 122,066.40 0.00 $ 531,155.00 $ 581,827.74 $ 122,066.40 $ 703,894.14 $ 16.928,589.20 $ 19,744,188.48 $ 987,022.60 $ 20,731,211.08 $ 0.00 $ 55,597.00 121,028.00 $ _....;1.7..6.,.62.5.0..0.. $ 154,401.65 $ 154,401.65 29,310.99 29,310.99 $ 183,712.64 $ 183.712.64 $ 0.0.0. - 37 - SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S.W., Suite 214 Atlanta, Georgia 30334-8400 February 22,2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Baldwin County Board of Education 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 ofBaldwin County Board of Education as of and for the year ended June 30, 1999, and have issued our report thereon dated February 22,2000. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1999, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. Compliance As part of obtaining reasonable assurance about whether Baldwin County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, 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 of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. 99YB-40 Internal Control Over Financial Reporting In planning and performing our audit, we considered Baldwin County Board of Education's internal control over financial reporting in order to detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial 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 of the internal control over financial reporting that, in our judgement, could adversely affect Baldwin County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6051-99-01 and FS-6051-99-02. 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 nonnal course ofperfonning 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, all of the reportable conditions described above, are also considered to be material weaknesses. This rePort is intended solely for the infonnation and use of management, members of the Baldwin County Board of Education, 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, ~uJ.~ Russell W. Hinton State Auditor RWH:jb 99YB-40 RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400 February 22,2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Baldwin County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I 33 Ladies and Gentlemen: Compliance We have audited the compliance of Baldwin County Board of Education with the types of compliance u.s. requirements described in the Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1999. Baldwin County Board of Education's major Federal programs are identified in 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 Baldwin County Board of Education's management. Our responsibility is to express an opinion on Baldwin County Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Baldwin 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 Baldwin County Board ofEducation's compliance with those requirements. 99SA-35 In our opinion, the Baldwin County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1999. Internal Control Over Compliance The management of Baldwin 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 Baldwin County Board of Education'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-13 3. We noted certain matters involving the internal control over compliance 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 of the internal control over compliance that, in our judgement, could adversely affect Baldwin County Board of Education's ability to administer a major Federal program in accordance with applicable requirements of laws, regulations, contracts and grants. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as item FA-605199-01. 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 ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable conditions described above are also considered to be a material weakness. This report is intended solely for the information and use of management, members of the Baldwin 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:jb 99SA-35 R ssell W. Hinton State Auditor SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS BALDWIN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 6051-93-03 6051-96-01 FS-6051-97-01 FS-6051-97-02 FS-6051-98-0 1 FS-6051-98-02 FS-6051-98-03 Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective ActionlResponses Further Action Not Warranted Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses CORRECTIVE ACTIONIRESPONSES EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $30,394.40 Finding Control Number: FS-6051-97-01 The QBE underexpenditure of$30,394.40 will be resolved by the Georgia Department ofEducation through an increase in Baldwin County Board of Education's Local Fair Share portion of QBE allotments for FY 2000. CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Control Procedures Finding Control Number: FS-6051-98-01 The School Nutrition Department plans to add a second person to the clerical office staff; therefore, duties within the department will be segregated in order to strengthen the internal control over the School Food Service's accounting functions. EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $3,118.75 Finding Control Number: FS-6051-98-02 The QBE underexpenditure finding of$3,118.75 will be resolved by the Georgia Department of Education through an increase in Baldwin County Board of Education's Local Fair Share portion of QBE allotments for FY 2001. - 1- BALDWIN COUNTy BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6051-98-03 We concur with this finding. 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 nor maintain a General Fixed Assets Account Group. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FA-6051-98-01 Further Action Not Warranted -2- SECTIONN FINDINGS AND QUESTIONED COSTS BALDWIN COUNTy BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999 I SUMMARY OF AUDITOR'S RESULTS 1. Type ofRe.port Issued on the Financial Statements The auditor's opinion on the Baldwin County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the Baldwin County Board of Education disclosed financial statement reportable conditions related to the following control categories. Cash and Cash Equivalents Inventories General Ledger General Fixed Assets All of the reportable conditions described above are considered to be material weaknesses. 3. Noncompliance Material to the Financial Statements The audit ofthe Baldwin County Board ofEducation disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Re.portable Conditions in Internal Control Over Mwor Programs The audit report for the Baldwin County Board of Education disclosed reportable conditions in internal control over major programs for the following compliance requirements. Program Income Special Tests and Provisions Eligibility All of the reportable conditions described above are considered to be material weaknesses. 5. Type of Re.port Issued on Compliance for Milior Programs The auditor's opinion on the Baldwin County Board of Education's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Re.ported by Section ,5IOeW ofOMB Circular A-I33 The Baldwin County Board of Education's audit disclosed an audit finding required to be reported by section .5IO(a) ofOMB Circular A-133. This audit finding is included in section IV of this report. 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 84.027 Individuals with Disabilities Education Act - Part B - Special Education - Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education - Preschool 84.173 Individuals with Disabilities Education Act - Part B - Special Education - Capacity and Building Improvement - 1- BALDWIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999 I SUMMARY OF AUDITOR'S RESULTS 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Baldwin County Board ofEducation did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-B3. IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUNALENTS INVENTORIES GENERAL LEDGER Inadequate Control Procedures Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-6051-99-01 A review of the Board's internal control policies and procedures noted deficiencies in providing for adequate internal control over the following functions and related procedures for the School Food Services program: The bank reconciliation function was not separated from the general ledger posting and check preparation functions. In addition, the bank reconciliations were not reviewed by an individual independent of cash operations. Blank checks are accessible, without supervision, by the person responsible for the check signing and the general ledger posting functions. At each school, the School Food Manager receives goods, signs the receiving reports and performs the physic. al inventory counts with no assistance from any other employee. ( Journal entries were not consistently supported by adequate documentation and/or descriptions. In addition, journal entries were not reviewed and approved by someone independent of journal entry preparation and posting. These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions over the School Food Service program. The Board should review the accounting procedures in place, design procedures which would enhance segregation of duties relative to the above control categories and implement those procedures to strengthen the internal control over the School Food Service's accounting functions. -2- BALDWIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999 IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-6051-99-02 The Baldwin County Board of Education failed to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required bygenerally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board 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 Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS ELIGIBILITY PROGRAM INCOME SPECIAL TESTS AND PROVISIONS Inadequate Segregation of Duties Reportable Condition - Material Weakness U.S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-6051-99-01 A review of the Baldwiri County Board ofEducation's internal control policies and procedures over the Child Nutrition Cluster Programs noted deficiencies in providing for adequate segregation of duties over the following functions and related procedures: The cashier is responsible for detennining student eligibility for participation in the program based on her review of applications. The cashier also inputs students' eligibility status into the point-of-sale system. There is no other supervisory review and/or approval of either of these duties. The cashier is also responsible for collecting cash from students, entering the cash into the point-of-sale system, counting the cash and reconciling it to the computer system, preparing the deposit and taking the deposit to the bank. There is no other supervisory review and/or approval of these duties. -3- BALDWIN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1999 ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS ELIGIBILITY PROGRAM INCOME SPECIAL TESTS AND PROVISIONS Inadequate Segregation ofDuties Reportable Condition - Material Weakness U.S. Department of Agriculture Through Georgia Department of Education Finding Control Number: FA-6051-99-01 The cashier also performs the verification procedures confirming eligibility in the program, without any other supervisory review and/or approval. The weaknesses identified in the Child Nutrition Cluster Programs were a result of management's failure to perform a risk assessment of the critical areas of the program and to implement appropriate controls. The Board should review the procedures in place, design policies and procedures which would enhance segregation of duties relative to the above control categories, and implement these policies and procedures to ensure adequate internal control over the Child Nutrition Cluster Programs. Also, the Board should develop and implement a monitoring process to ensure that the controls are being followed. -4-