Audit report, Banks County Board of Education, Homer, Georgia, year ended June 30, 1998, June 30, 1998

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AUDIT REPORT

BANKS COUNTY BOARD OF EDUCATION

HOMER, GEORGIA

YEAR ENDED JUNE 30, 1998

l

/

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

BANKS 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

EXlllBITS

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

6

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL 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

23

I

FIDUCIARY FUND TYPES

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

24

SCHEDULES

1 . SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

2 SCHEDULE OF STATE REVENUE

27

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

28

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

29

BANKS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

31

6

BY PROGRAM

32

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

CLAUDE L. VICKERS
STATE AUDI10R
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Banks County Board ofEducation
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Banks County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Banks County Board ofEducation'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.
Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000 Issues,
requires disclosure of certain matters regarding the year 2000 issue. Banks County Board of Education has included such disclosures in the significant commitments section ofthe Notes to the Financial Statements. Because ofthe unprecedented nature ofthe year 2000 issue, its effects and the success ofrelated remediation efforts will not be fully determinable until year 2000 and thereafter. Accordingly, insufficient audit evidence exists to support Banks County Board of Education's disclosures with respect to the year 2000 issue made in the Notes to the Financial Statements. Further, we do not provide assurance that Banks County Board of

98ARL-13A

Education is or will be year 2000 ready, that Banks County Board of Education's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Banks County Board ofEducation does business will be year 2000 ready.

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:
* 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 conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general purpOse
financial statements. To conform to generally accepted accounting principles, these accounts should be included In the general purpose financial statements:
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries
and the corresponding employer's cost of related ~nefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.

The aggregate effects on the general purpose financial statements ofthese variances or omissions have not been determined, but are believed to be material.

In our opinion, except for the effects of such adjustments, if any, as might have been determined to be

.necessary had we been able to examine sufficient evidence regarding year 2000 disclosures 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 of the Banks County Board of Education as of

June 30, 1998, and the results ofits 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 March 26, 1999, .on our consideration ofthe Banks County Board ofEducation's internal control over fmancial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.

Our audit was performed for the purpose of forming an opinion on the general pUrpose financial statements ofthe Banks County Board ofEducation taken as a whole. The accompanying combining and individual fund statements (Exhibits E through 1) and the financial schedules (Schedules 1 through 6), which includes the Schedule ofExpenditures ofFederal Awards as required by U. S. Office ofManagement and Budget Circular

98ARL-13A

A-133, Audits o/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 information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effects of such adjustments, if any, as might have been determined to be necessary had we been able to examine sufficient evidence regarding year 2000 disclosures as discussed in the third paragraph and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:jb 98ARL-13A

BANKS COUNTY BOARD OF EDUCATION

BANKS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 1998

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 1998

JUNE 30, 1997

$

159,540.42 $

6,500.38

$

504,360.81 $ 2,865,769.84

666,392.09

4,851,057.62

4,991,978.27

274,694.95

1,775,339.97

234,349.44

16,756.22 1,735.00

$

1,100,627.46

1,100,627.46

11,858.76 1,714.93
37,761.75

$ 1,100,627.46 $

6,189,372.54 75,870.88

6,189,372.54 75,870.88

7,462,238.25 48,253.62

6,500.38 $

7,365,870.88 $ 14,515,120.50 $ 15,653,924.86

$

491,716.94 $

172,688.59

78,400.36

72,216.84

5,364.28

656,575.63

155,844.00

439,197.60

37,160.40

$

6,500.38

6,500.38

6,404.87

$

75,870.88

75,870.88

48,253.62

7,290,000.00

7,290,000.00

7,500,000.00

$

6,500.38 $

7,365,870.88 $ 9,038,261.79 $ 7,997,932.60

$ 1,100,627.46
0.00 $ $ 1.100,627.46 $ $ 1,100,627.46 $

$ $ 1,100,627.46

37,761.75

16;756.22 1,735.00
3,078,232.98

11,858.76 1,714.93
5,857,044.09 592,740.00

4,661.95

0.00

1,274,845.10

1,154,872.73

0.00

$ 5,476,858.71 $ 7,655,992.26

6,500.38 $

7,365,870.88 $ 14,515,120.50 $ 15,653,924.86

-3-

BANKS COUNTY BOARD OF EDUCATION COMBINED STATEMENl OF: REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
c ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1998

FUND BALANCE JUNE 30

$

The notes to the general purpose financial statements are an integral part of t~is statement. -4-

937,896.06 $

3.6.0.'.:.;10;:;2;;;,2.1.

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

$ 1,903,003.00

$ 8,235,995.n $ 5,751,908.22

951,989.23

878,957.57

$ 1,757,563.63

4,842,548.86

2,933,698.81

317,268.62

9,On.10

741,542.18

411,207.87

$ 2,220,271.62 $ 1,766,640.73 $ 14,n2,076.04 $ 9,975,n2.47

$ 5,891,822.73 $
$ 5,891,822.73 $ $ -3,671 ,551.11 $

$
210,000.00 493,775.02 703,n5.02 $ 1,062,865.71 $

6,401,222.94 $
417,167.87 235,107.39 286,169.58 242,457.55 518,393.47
53,426.71 723,123.50 636,970.05 . 11,083.80
53,875.87 744,627.34 49,885.65 5,902,422.73
260,319.69 497,809.93
17,034,064.07 $
-2,261 ,988.03 $

5,617,789.51
325,404.35 233,841.20 263,473.55 184,609.83 451,145.28
98,560.63 679,572.34 633,097.49
10,428.40 20,480.89 663,576.81 46,706.60 1,164,444.58
49,182.59 8,8n.66
10,451,191.71
-475,419.24

$

300,000.00

$

300,000.00

$

37,307.44

$

n,936.95

349,444.74

-349,444.74

7,500,000.00
39,560.32 -39,560.32

$

n,936.95 $ 7,537,307.44

$ -3,371,551.11 $ 6,449,784.09

1,062,865.71 $ 37,761.75

-2,184,051.08 $ 7,655,992.26

7,061,888.20 587,842.01

4,897.46 20.07

6,662.53 . -400.48

$ 3,078,232.98 $ 1.100,627.46 $ 5,476,858.71 $ 7,655,992.26 -5-

BANKS 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, 1998

EXHIBIT "C"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 5,733,061.00 $ 6,231,181.77

228.28

3,241,291.00

3,084,985.23

19,000,00

167,457,68

Total Revenues

$ 8,993,352.00 $ 9,483,852.96

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 Community services Operations
Capital Outlay Debt Service

$ 5,928,n3.00 $ 5,924,228.62

410,190.00 211,817,00 284,271,00 203,167,00 508,509,00
85,921,00 736,198,00
695,674.00 11,100.00 13,697.00

403,889.88 208,263.39 286,169.58 225,465.92 518,393,47
53,426,71
723,123.50 636,970.05
11,083.80 25,029.47

300,000.00

49,885,65 10,600.00 54,354.60

Total Expenditures

$ 9,389,317.00 $ 9,130,884.64

Excess of Revenues over (under) Expenditures

$ -395,965,00 $ 352,968.32

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$

n,936.95

$

-11,500,00

-349,444.74

Total Other Financing Sources (Uses)

$

-11,500.00 $ -271,507.79

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $

-407,465.00 $

81,460.53

FUND BALANCE JULY 1,1997

n6,554,74

856,435.53

Food Inventory - Net Change in Period Donated Commodities Purchased Food

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$

79,664.00 $ 101,811.00

827,607.00

951,760.95

244,500.00

247,738.78

$ 1,151,n1.00 $ 1,301,310,73

$ 421,930.00 $ 476,994.32

6,000,00

13,2n,99 26,844.00

18,527.00

16,991.63

885,070.00

28,846.40 744,627.34

$ 1,331,527.00 $ 1,307,581,68

$ -179,756.00 $

-6,270,95

$

49,444.74

$

49,444.74

$ -179,756.00 $ 314,1n.92

43,173.79 312,010.89

4,897.46 20.07

FUND BALANCE JUNE 30,1998

$ 369,089,74 $ 937,896,06

$ 134,421,92 $ 360,102,21

The notes to the general purpose financial statements are an integral part ofthis statement. -6-

BANKS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

: NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The Banks County Board ofEducation (Board) was established under the laws ofthe State of Georgia and

operates under the guidance of a school board elected by the voters and a Superintendent appointed by the

Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds.

Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and

consists ofall the organizations that compose its legal entity.

co

FUND ACCOUNTING

The Board 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 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 stat~ments 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 ofa Board's educational activities. Governmental Fund Types include:

.GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific.revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.

-7-

BANKS COUNTY BOARD OF EDUCATION

EXlllBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

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 ofmajor 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 FUNDS - the funds 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 and material 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 of these funds present increases (Le., revenues and other financing sources) and

decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is

considered a measure of available spendable resources.

.

Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. 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 (Le., when they become botQ. 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.

-8-

BANKS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A departure from the above definitions is the accounting treatment afforded the final two payments on General F~d 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 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department ofEdu~ation to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, .but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. 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.

Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and

liabilities.

.

RESTATEMENT OF PRIOR YEAR FUND BALANCE
In fiscal year 1998, the Board implemented GASB Statement 31, "Accounting and Financial Reporting for Certain Investments and for Extemallnvestment Pools". The statement requires certain investments to be reported at fair value rather than at cost. The beginning fund balance ofthe Capital Projects Fund has been decreased by $4,805.52 for this change in accounting principle.

BUDGET
The Banks 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 governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the 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 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

-9-

BANKS COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSmON OF DEPOSITS Cash and cash equivalents consist 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 nonparticipa~g 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 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 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 o government agency,
. (4) Obligations of any corporation ofthe 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.

- 10-

BANKS COUNTY BOARD OF EDUCATION

EXIDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 fmancial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Banks County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on November 10, 1997 (levy date). Taxes were due on January 20, 1998. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Banks County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the Banks County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

10.40 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and or debt service. Special Purpose Local Option Sales Tax collected by the State and remitted to the Board during the fiscal year amounted to $1,757,563.63 mid was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $8,841,411.37 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 offund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

- 11 -

BANKS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term 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 conformity with generally accepted accounting principles. Neither aresuch data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code ofGeorgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee ofinsurance, 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 of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone ofor any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
- 12-

BANKS COUNTY BOARD OF EDUCATION

EXillBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS AND INVESTMENTS

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

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

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

(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe 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 Unit~d States government both as to principal and interest -and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $905,000.97. 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 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, 1998, as follows:

Risk Category

Bank Balance

1

$ 100,000.00

2

805,000.97

3

0.00

Total

$ 905.000.97

- 13-

BANKS COUNTY BOARD OF EDUCATION

EXlllBIT "D"

: NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS AND INVESTMENTS

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

Category 1 - Insured or registered, or securities held by the Board or the Board's agent in the Board's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the Board's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the Board's name.

At June 30, 1998, the carrying value of the Board's total investments was $4,726,165.77. The investments are classified as to risk categories as folloW's:

Type of Investment
U. S. Government
Investments not Subject to Categorization:
Mutual Funds

Risk Categories

2

3

Carrying Amount

Fair Value

$,======!Q~.Q~Q $ 4.273 225 99 $,======!Q~.Q~Q $ 4,273,225.99 $ 4,273,225.99

452,939.78

452,939.78

Total Investments

$ 4726.16577 $ 4726 16577

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The 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.

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

The Board has elected to self-insure for a11losses related to natural disaster. The Board has not experienced any losses related to these risks in the past three years.

- 14-

BANKS COUNTY BOARD OF EDUCATION

EXIllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 4: RISK MANAGEMENT

The Board is self-insured with regard to unemployment compensation claims. The Board 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. The Board has not incurred any liabilities for unemployment compensation during the past two fiscal years.

The Board 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 Board 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.

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

Position Covered

Amount

Superintendent Each Principal Financial Officer

$ 25,000.00 $ 5,000.00 $ 5,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Banks County Board ofEducation has entered into various lease agreements as lessee for buses and office equipment. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value ofthe future minimum lease payments as of the date of their inception.

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

Purpose

Interest Rates

Amount

General Government - Series 1996

4.30% - 7.00% $ 7.290.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

- 15 -

BANKS COUNTY BOARD OF EDUCATION

EXHIBIT"D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1997

$ 48,253.62 $ 7,500,000.00 $ 7,548,253.62

Additions

77,936.95

77,936.95

Deductions Payments

50.319.69

210,000.00

260,319.69

Balance June 30, 1998

$ 75.870.88 $ 7.290.000.00 $ 7.365.870.88

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as

~~:

.

Fiscal Year Ended June 30
1999 2000 2001 2002 2003 2004 - 2008 2009 - 2013 2014 - 2018
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Capital Leases

General Obligation
Bonds

Total Debt

$ 15,363.52 $ 615,320.00 $ 630,683.52

22,468.52

608,870.00

631,338.52

20,428.62

606,720.00

. 627,148.62

19,584.00

599,820.00

619,404.00

19,584.00

603,210.00

622,794.00

7,495.00 3,020,360.00 3,027,855.00

3,083,487.50 3,083,487.50

2.508,967.50 2,508,967.50

$ 104,923.66 $11.646.755,00 $11.751.678,66

29,052.78

$ 75.870.88

Note 6: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of $151 ,506.78 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

- 16-

BANKS COUNTY BOARD OF EDUCATION

EXIDBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 6: ON-BEHALF PAYMENTS

Georgia Department of Education Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$108,335.20

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$10,699.58

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 $32,472.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis of significant outstanding constniction or renovation contracts executed by the Board as ofJune 30, 1998, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

98/97S-606-055/New High School Football Field Lights

:$ 5,465,100.12 $ 1,933,157.00

93.392.00

0.00

$ 5.558.492.12 $ 1.933.157.00

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

At June 30, 1998, the Board had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year. 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system and school nutrition meal accountability system. The following stages have been identified as necessary to implement a year 2000 compliant systems.

Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.

Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.

- 17 -

BANKS COUNTY BOARD OF EDUCATION

EXIllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 7: SIGNIFICANT COMMITMENTS
Remediation Stage - When changes are made to systems and equipment.
ValidationITesting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (Georgia Department of Education). As of June 30, 1998, the State had not contracted for the remediation ofeither the Wang VS operating system otthe GENESIS accounting software. In the subsequent period, the Georgia Department ofEducation has remediated the Wang VS operating system and the updated system was installed at all GENESIS sites as ofDecember 9, 1998. The Georgia Department ofEducation has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards of education currently utilizing the GENESIS accounting software.
At June 30, 1998, the Board ofEducation was using the MicroCheck System at each school cafeteria for cash collection purposes. This system was not year 2000 compliant. In the subsequent fiscal year, the Board replaced the MicroCheck System with Pro Lunch, a system which is year 2000 compliant.
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 Board believes that such disallowances, if any, will be immaterial to its overall financial position.
The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.
Note 9: 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 defmed benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its

- 18 -

BANKS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 9: RETIREMENT PLANS

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 Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by th~ TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100% 100%

$ 637,622.96 $ 577,741.29 $ 525,439.07

- 19-

BANKS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1998

EXHIBIT wE"

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30,1998 JUNE 30,1997

$

46.503.50

$

46.503,50 $ 225.157.31

291.195,32

291,195.32

116,283.83

59.178,36 $

68.00 $

125.874.34

185,120.70

114,668,83

16,756,22 1.735.00

16.756.22 1,735.00

11.858,76 1.714.93

$ 415,368,40 $

68,00 $

125,874,34 $

541.310.74 $

469.683,66

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable

$

$

15.269.59

39.996.60

Total Uabilities

$

55.266,19 $

FUND EQUITY

Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated

$

16.756.22

1.735.00

341.610,99 $

Total Fund Equity

$ 360.102.21 $

total Uabilities and Fund Equity

$ 415.368,40 $

68,00 $ 68.00 $

14.544.91 $ 74.870.67 36.458.76
125.874.34 $

14,612.91 $ 90,140.26 76,455.36
181.208.53 $

57.631.56 22.460,09 72,216.84
5,364.28
157,672.n

0.00 $ 0.00 $.

$
0.00 0.00 $

16.756.22 $ 1.735.00
341.610.99
360,102:21$

11.858.76 1.714.93
298,437,20
312.010.89

68,00 $ 125.874.34 $ 541.310.74 $ 469,683,66

See notes to the general purpose financial statements,

-20-

See notes to the general purpose financial statements.

-21 -

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

BANKS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 1998

EXHIBIT"G"

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT
COMMISSION

TOTALS

JUNE 30, 1998

JUNE 30.1997

$

193,852,18 $

20.374,03 $

214,226.21 $ 1.755,988.84

2,884,380.80

2,884,380,80

4,875.694.44

1,075,399,20

1,075,399.20

23,347.80

$ 3,078,232.98 $ 1p95,n3,23 $ 4.174.006.21 $ 6,655,031.08

. See notes to the general purpose financial statements.

-22 -

See notes to the general purpose financial statements.

-23 -

BANKS COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 3D, 1998

EXHIBIT "I"

LIABILITIES Funds Held for Others

$

6,404,87 $

34.845,28 $

34.749,n $====~6.=50=0=.3=8

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

BANKS COUNTY BOARD OF EDUCATION

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

YEAR ENDED JUNE 30, 1998

.

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agriculture, U. S. Department of

Pass-Through from Office of Treasury and Fiscal Services

National Forest Reserve Funds

10,665

Pass-Through from Georgia Department of Education

Food and Nutrition Program

Food Services

School Breakfast Program

1998 Grant

* 10,553

National School Lunch Program

1998 Grant

* 10,555

Food Distribution Program (1)

10.550

N/A $
N/A N/A N/A

228,28
133,819.29 308,758,27 $ 43A46.05

(4)
(2) 701,181,29 (3) 43A46.05

Total U, S, Department of Agriculture

$

486,251.89 $

744,627.34

Education, U. S. Department of Pass-Through from Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1998 Grant Title II Eisenhower ProfessiOnal Development 1998 Grant Title VI Innovative Education Program Strategies 1998 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant Tech-Prep Education 1998 Grant

84.010

N/A $

84.281

N/A

84.298

N/A

235,463.94 $ 17,500.00 9,284.00

235,463.94
17,500~00
9,284,00

84,027

N/A

84.173

N/A

96,815.98 14,919.00

96,815,98 14,919.00

84.048

N/A

84,243

N/A

52,129.57 39,624.85

52,129.57 78,624,85 (3)

Total U. S. Department of Education

$

465,737.34 $

504,737.34

Total Federal Financial Assistance N/A=Not Available

$

951,989.23 $

1,249,364.68

-25-

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 3D. 1998

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Funds eamed on this program do not require reporting of expenditures.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The Board did not provide Federal Assistance to any Subrecipienl
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Banks County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

-26-

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 1998

SCHEDULE "2"

See notes to the general purpose financial statements.

-27 -

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 1998

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED IN PRIOR
YEARS

For the retirement of $10,598,975.00 of general obligation debt consisting of the principal and interest on the School District's series 1996 general obligation school bonds for the years 1997 through 2007 and the payment to redeem said bonds maturing in the years 2009 through 2017

$ 10,598,975.00 $ 10.598.975.00 $

703.775.02 $

0..0.=0

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Board's current estimate of total cost for the project. Includes all cost from project inception to completion.
(3) The voters of Banks 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.

- 28 - .

EXPENDITURES
Current Instruction

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "4"

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

TOTAL

$

5,217.00 $

53,000.00 $===58=,2=:1=7:=.0=0

See notes to the general purpose financial statements. - 29-

BANKS COUNTY BOARD OF EDUCATION

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

YEAR ENDED JUNE 30.1998

.

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$ 5,073,054.00 $ _ _..:2:.:.7::::.r.O,=82::::8.:.:::.8~0

$ 4,847,848.58 388,161.68 $ _ _..:3:.::::.53::::.r.,77~5.:.:::.5..:...1
$ 5,236,010.26

-111,186.11 $ 5,124,824.15

$

0.00 $=====0.=00=

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

BANKS COUNTY BOARD OF EDUCATION ANAlYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*)
Grades 1 - 3 (*) Sub-Total - K-3
Grades 4 - 5 r) Gmties6-8r) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*)
Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS
Regular Programs Category I r) Category II (*) Category III (*) Category IV (*)
Sub-Total - Regular Category VI (Gifted) (*)
Total Special Education Programs REMEDIAL EDUCATION PROGRAM (*)
Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS
Salaries Operations
Total Media Center Programs

AlLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAl ~

ORIGiNAl

MID-TERM

$

505,905.00

$

455,314,50

1,129,695.00

1,016,725.50 $

$ 1,635,600.00 90 $ 1,472,040.00 $

494,047.00 90

444,642.30

834,457.00 90

751,011.30

527,665.00 90

474,898.50

218,250.00 90

196,425.00

286,158,00 90

257,542.20

$ 3,996,177.00

$ 3,596,559.30 $

52,984,70 52,984.70 28,000.00 55,153.00 -36,137.70
22,165.00 122,165.00

$

598,865.00

$

538,978.50 $

58,000.00

$

598,865.00 90 $

538,978.50 $

31,000.00 90

27,900.00

$

629,865.00

$

566,878.50 $

$

95,597.00 90 $

86,037.30 $

$ 4,721,639.00

$ 4,249,475.10 $

58,000.00 6,000.00 64,000.00
0,00 186,165.00

$

134,139,00 90 $

120,725.10 $

0.00

31,111.00 90

27,999.90

$

165,250.00

$

148,725.00 $

0.00

Total Fourteen Weighted and Media Center Programs

$ 4,886,889.00

$ 4,398,200,10 $

186,165.00

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

$

14,875,00

36,377.00

$

14,875.00 $

36,377.00

$

51,252.00 100 $

51,252.00 $

0.00 0.00
....0.0.0.

- 32 -

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

455,314.50 $

467,544.97 $

18,192.12 $

485,737.09

1,069,710.20

1,042,889.20

68,786.n

1,111,675.97 .

$ 1,525,024.70 $ 1,510,434.17 $

86,978.89 $ 1,597,413.06 $

0.00

472,642.30

445,011.24

30,367.79

475.379.03

0.00

806,164.30

862,055.68

52,758.01

914,813.69

0.00

438,760.80

520,734.21

29,052.32

549,786.53

0.00

196,425.00

194,892.68

10,374.79

205,267.47

0.00

279,707.20

307,445.98

31,562.19

339,008.17

0.00

$ 3,718,724.30 $ 3,840,573.96 $

241,093.99 $ 4,081,667.95

$

596,978.50

$

5,On.94 $ 194,675.44 307,624.89 25,363.02

415.47 $ 3,176.65 106,336.70
376.64

5,493.41 197,852.09 413,961.59 25,739.66

$

596,978.50 $

532,741.29 $

110,305.46 $

643,046.75

0.00

33,900.00

50,650.25

1,566.06

52,216.31

0.00

$

630,878.50 $

583,391.54 $

111,871.52 $

695,263.06

$

86,037.30 $

181,833.14 $

810.00 $

182,643.14

0.00

$ 4,435,640.10 $ 4,605,798.64 $

353,775.51 $ 4,959,574.15

$

120,725.10 $

242,049.94

$

242,049.94

0.00

27,999.90

$

34,386.17

34,386.17

0.00

$

148,725.00 $

242,049.94 $

34,386.17 $

276,436.11

$ 4,584,365.10 $ 4,847,848.58 $

388,161.68 $ 5,236,010.26 $

0.00

$

14,875.00

36,3n.00

$ -==_=5=1,2;;;,;5;;;;2;,;;'0.=,,0

$

38,n2.69 $

38,772.69

16,213.61

16,213.61

$

54,986.30 $

54,986.30 $

....,;0.0.0.

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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

CLAUDE L. VICKERS
STAlE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Banks 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 of Banks County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated March 26, 1999. 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 were unable to examine sufficient. audit evidence regarding year 2000 disclosures as required by
Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000 Issues.
This bulletin requires disclosure of certain matters regarding the year 2000 issue in order for financial statements to be prel?ared in conformity with generally accepted accounting principles.
Compliance
As part of obtaining reasonable assurance about whether Banks 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 offinancial 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.
98YB-40

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Banks CountyBoard ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgement, could adversely affect Banks County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6061-98-0I.
A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be
material in relation to the fmancial statements being audited may occur and not be detected within atimely
period by employees in the normal course ofperforming their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would.not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above, is considered to be a material weakness.
This report is intended for the information ofmanagement, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.

CLV:jb 98YB-40

Claude L. Vickers State Auditor

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W., Suite 214 Atlanta, Georgia 30334-8400
March 26, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Banks County Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE INACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the co~pliance of Banks County Board of Education with the types of compliance
requirements described in the u.s. Office ofManagement and Budget (OME) Circular A-I33 Compliance
Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 1998. Banks County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each ofits major Federal programs is the responsibility of Banks County Board of Education's management. Our responsibility is to express an opinion on Banks 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 ofthe 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 Banks 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 Banks County Board of Education's compliance with those requirements.

98SA-I0

In our opinion, the Banks County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 1998.
Internal Control Over Compliance
The management of Banks County- Board of Education is responsible for establishing and maintaining effective internal control ov~rcompliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Banks County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the nonnal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
lIDs report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. lIDs restriction is not intended to limit the distribution ofthis report which . is a matter of public record.

CLV:jb 98SA-I0

Claude L. Vickers State Auditor

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

BANKS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIORYEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6061-93-02 FS-6061-97-01

.Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6061-97-01

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

SECTION IV FINDINGS AND QUESTIONED COSTS

BANKS COUNTY BOARD OF EDUCATION

SCHEDULE OF FINDINGS AND OUESTIONED COSTS

YEAR ENDED JUNE 30. 1998

.

I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Banks 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 Banks Ceunty Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe Banks 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 Banks County Board ofEducation 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 Banks County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510Ca) ofOMB CircularA-133 The Banks County Board of Education's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133.
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
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Banks County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.

- 1-

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
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-6061-98-01
-
The Board did not maintain a system-wide General Fixed Assets Account Group within the fonnal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements ofthe 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 of a General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, 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. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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