Banks County Board of Education, Homer, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002, June 30, 2002

,
,

.

'J'} ,I

, ., ....,. .~ ...

.,

.. .. \, '

"
'.' -,'

,

, ....,' .
..,

,,' '.



. . . . . . .J

, ,I.

, .~,.

h

:

,\

"",

.. '

"

",

,

,'"

'

I,

.." 'I

"

\

1.1 .'

'.
,;

,,
",1
"
-i
"r ' , ..
., " ~.
" .. '
",' .
" ~.....,:.: ..
",

,,
, ,1,'. .',
J ~~ ~~ "
' ~',

J .'

" :'.

. ,....
,

" ,.-
" ,I

,

. .:,1. .. "~I

_'.

. ... - ,;

I \" ~'
,'-



" , to' _ ,

-c,.. .'

_;; ,.' ,J
,"
-.

"

:,. I

_

t ~'

I

1 '\
,,

,,
.

~" ,

,'.

,',

'.'.-, \
;' .

,I
'!
j '.

...","

"

,

;, ....

,,'
... i
",

J, . "

" .. :'

.~

,I

"

... ' ~.'
", ". " "'~ ~

.:::, ~

- . '. , I' "
"'.. , ..;.. ~

,-

' ~~--:

~ \ .... .. ',.'

-/

. , ',." "

'"t.. :

'.' of

~ ....' '

l

-.\' ",, ' -,

I~

"

. .. , ~ ~ ", )

J"

. , t;; , "

-

'. ,

J.!.C
.-,'"

.. ,L,'

." '. I'"

"

:_r ,. . "
. '.1. t ......

"
~,

.\
.-, ,. .

\' ',"'r:

"'," "

"\

. ,; ','"
'. .. " ,~ I
' " . I ,I

'.
,

,/,

[

., ~ ;

"'

. ~

,

, '.

,

(

, , . ,I.~ '.~

. . '
, " ,'.,.' .: '
..~ ....,
...

...'r'
;,

,t., ','

.' . ~ ,

;', ,

" -' .~

"

, "
'.-,

..'

.,

t .'.
,

".

",,'.,.,

- ....~.......,

,

i

",

r'

.... J

...... I'

"
- ..... '
"

"
"'
,{

,J

'j

"
.. - , " 'v'V~' ,\ "
""
,
"
f ,

,,' , "
,', :', , ,

"
,'
"'

. ' .. '

. ' , "I"" ,
"

...... ,.,.

,

"'

,"

"',;

,

"

,,

"
.

,,\-

" ';(

,,~ ....

'.

.' ' ; ,

.,~~ 1 ~ ~', ~~ r ,.... ' .... :

,-

",

'.. '~
(,

....

'..

,.

,,' , "'.,

'
::,'

,.

'

I'

>: ",';, ~ .~... ; ,~. "

~

.....,:.,

1"

. ' ~ ,. ~ { '.

","", ',""" ".'REPORT'OJN'AuDIT, ',',

.
,"

'.'

. .,. ~ :'

,..,'.

"
'."
,'

,.. ~ .'

-/' ...

-; ','

" 'r I'.: 1"~~"::.',;OFtHE:FiNANCiAL"STATEMENTS: <:' -', , '

"

I

~,.

,

'

'.

~,

.,.

'":

I ot /

.'"

_J

: ....

"

'"

,'.

,,",

,,', ' ,

-fOR THE, FISCAL YEA'R ENDED JUNE '30, 20'OZ.:, ~ ,'''-

, "'..

'-: h'

~,

.~J \.,~I ~~"":,, _. ~ ,\ '" I~, ~,.

, .. ~,. " ,',
. , "

'

,i; -'. ~

"~r
:. . . . . . '. I "I,
~

,"

't

" ,I.,""

,'

. ,"L;.. " ,

,"

-..

\ ....,

',' ,,
,:,,'

," ",

: ~~:I.: .- , "

.. ,.> ". ',', ',:, of
,,''',

.. . ., " ~ ,"

','

... 'L

,.,I "'I~'
,-

, ) , ,~,
I,'
"
,',

... >.':.:,''

.-
- :,- ..

\ ~ .,

..... "

.. /. . ", .-,..R_sutast.s~'elAlu''W'dlt.onHr,i'n:t'Q: 'n,,'"'::,"',- ... "
.. , . . .' '
,,. ...... .' '

;r' .. '-, ',' < ". ,~t. '.
'"
'
"
",
.:.. -.'.:..

,:". , .. . .. I,.

. . "

",.

,.' .. .' '," . ... , I i- "

1-,": .. ," '

d' \ ~\ ~

- '~ ~."'I \

"' .: :~ ~ ,"~

" ,.'

,,'
';..
~I-r

.... ' . ..;....
~;.. " ~',,~,)' I

'.'. \ ,

".

"

',-I

:'

,I .

.,.... I ~ ,: _

" ':,.' "'-:"

" ....

...~~"l

,\ '

--',.

"

'.,. ,

, 'r

, ,,J ,
.,

..

",

" , ' .. I

'

"lo" 1

'I

. .t,;.. " \ ,~

,<,

.f '

... "

,"" , ~:'~v',~

'

.~ t,

, , .... '.,

.~ ,'.

".
, .,-.
,"
..

.;
....., ':..
~r ~ ..

,

,

"',
"

,

)

.,' ,- j'

,'.

"

I '~,:" ' , "

,.'
'-.

l'
"

... ""\ ..

~ ':' '; . \ . I.'

...
~ ~ .'

':-1 '. '.
I
"

' .......
-' .... '.,
"

" " 1-'" 'I
,"

r :.

..... ~,

'

'. J

-, ,', 'I'

, ~,

~' .... ",
.: ',r.
','

,i,
- .. ,

-r", ",I

.;- .... '

,/'

~ ,j

4

':"-"' .. "r

,"

. ,. ,

,'.

,"

'

('

" ' ....

"

'1

.. ., ~

,'-' ". J
'
: :"
. r.
t.... :
""
.~ ."
,'.( '. \

~'
'..... ~
'\' ' \ "';.

;, "'l" "
>' , "' ..
,"

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

EXHffiITS

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

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

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

I

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

28

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

29

2 SCHEDULE OF STATE REVENUE

31

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX. PROJECTS

33

BANKS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

34

5

BY SITE

35

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33

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

SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(4Q<l) 656 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wa!>hmglon Slreel. S W. SUlle 214 Allanla, Georgia 30334-8400
February 19, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Banks County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMAnON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements ofthe Banks County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility ofthe Banks County Board ofEducation's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America 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 fmancial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
OpInIOn.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2002ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended
June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were improperly recorded in the year ended June 30, 2002. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Banks County Board ofEducation as of June 30, 2002, and the results of its operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated February 19, 2003, on our consideration of the Banks County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements ofthe Banks County Board ofEducation taken as a whole. The accompanying combining and individual fund statements (Exhibits E through I) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office ofManagement and Budget Circular A-133, Audits ofStates. Local Governments, and NonProfit Organizations, are presented for purposes of additional analysis and are not a required part of
2002ARL-13

the 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 ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,

RWH:as 2002ARL-13

Rus 11 W. Hinton State Auditor

BANKS COUNTY BOARD OF EDUCAnON

BANKS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2002

Cash and Cash Equivalents
Investments
Accounts Receivable
Inventones Food Donated CommodllJes Purchased Food
Amount Available In Debt selVlce Fund
Amount to be ProVIded in Future Years For Payment of, Bond Debt Capital Lease Agreements
Total Assets

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 2.414,01979 $

143,77850 $

90,45295

11.790.994 16

284,063.21

181,461 94

2,49649 3,527,68

$ 2.698.083.00 $

331,264.61 $ 11.881:44711

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue Funds Held for Others Capital Lease Agreements General Obligation Bonds Payable
Total Uabllllles
FUND EQUITY
Fund Balances Reserved For Debt selVlce For Inventones Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay Projects Unreserved Designated for self-Insurance Undeslgnated
Total Fund Equity

$

69,874,13 $

39.835,59

44832

121.28232

1.672,82

77530

2,58969

$

71,99527 $

164,48290

$

$

56.627.66

2,569,46007

$ 2.626.087.73 $

2,49649 3.52768
$

11.790,994 16 90,452.95

160.757.54

000

166,781 71 $ 11,881,44711

Total UabllitJes and Fund EqUity

$ 2,698.083 00 $

331,264 61 $ 11.881,44711

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

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30. 2001

$ 2,853,611.12 $

34,70388

$ 5,536,566 24 $ 3,348,78353

5,056,568 63

16,847,562,79

3,801,290 37

881,084.80

1,346,609.95

1,044,357 88

$

8,791,264 55

2,49649 3,527.68
8,791.264 55

10,171.35 3,232.47
6,316,357.98

9,413,73545 93,42087

9.413,735.45 93A20.87

233,64202 135,341 59

$ 8,791,264 55 $

34,70388 $

18.298,42087 $ 42,035,184 02 $ 14,893,17719

$

109,709 72 $

151,579.89

121,73064

103,99887

2,44812

23,168.07

2,58969

$

34,70388

34,703.88

17,91275

$

93,420.87

93,42087

135,341.59

18,205,000 00

18,205,000 00

6,550,000.00

$

34,703.88 $

18,298,420 87 $ 18.569,60292 $ 6,982,001 17

$ 8.791,264 55

000 $

0.00

$ 8,791,264 55 $

000

$ 8,791,264.55 $ 6,316,35798

2,49649 3,527.68 11,790.99416 90,452.95
56,627.66 2,730,21761
$ 23,465,581.10 $

10,171.35 3,23247
89,169.94
20,104.94 1,472,13934
7,91U7602

$ 8,791,264 55 $

34,70388 $

18,298,420 87 $ 42,035,184 02 $ 14,893,177 19

-3-

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

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current InstruclJon Support SeMceS Pupil SeMces Improvement of InstruclJonal SeMceS Educational Media SeMceS General Administration School Administration BuslllesS Administration Maintenance and Operation of Plant Student Transportation 5eMceS central Support 5eMceS Other Support SeMces Food 5eMceS Operation Community SeMceS Operations
CapItal Outlay DebtSeMce
Pnnapal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
PremIums on Bonds Sold Acaued Interest on Bonds Sold Proceeds from General Obligation Bonds
Par Value Operating Transfers In Operating Transfers Out
Total Other Flnancmg 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

$ 9,417,34686 $ 30390
5,007,02691 317,516.25
$ 14,742,19392 $

134,406 00 1,370,879 36
337,75127
1,843,03663

$ 9,137.86038 $
338,23322 241.81718 370,986,06 277.19575 772.209.78 132,69816 1,062.187 37 835,85343
19.341.00 139,036 59
4107 94.52457

574,86500
6.09267 76,50749
94204 77.305.16
37,277.50
40.396.94 992,04785

41.92072 7.282,01
$ 13,471,18729 $
$ 1,271.006 63 $

1,805,434 65 37,601 98

$

-14.00762

$

-14,00762

$ 1.256,999 01 $ 1,369,088 72

37,60198 136,559.38

-7.67486 29521

FUND BALANCE JUNE 30
The notes to the general-purpose finandal statements are an Integral part of this statement -4-

$ 2,626,087 73 $

166,781 71

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ 9,551.752 86 $ 9,081.17705

1,371,18326

1,171.45965

$ 2,639,579 02

7.646,60593

7.174,45264

$

31.13381

297,57892

983,980 25

887,27855

$

31.13381 $ 2,937.15794 $ 19,553,52230 $ 18,314,36789

$ 9,712,725.38 $ 8,929,637.64

$

121,171.89

14.007.62

344,325.89 318.324.67 371,92810 354,50091 772,209.78 253,870.05 1.062,187.37 873,130.93
19.341.00 179.43353 992.08892 94,524.57
14.007.62

334,79104 293,208.82 346.747.22 262.47364 760,053.57 151,542.70 1,078.354 31 861,00035
14,173.25 183.96711 928.095.52 88,893.96 246.315.14

$

270,00000

329,82000

311,92072 337.10201

299,366.81 356,24854

$

135.17951 $

599,82000 $ 16.011,621 45 $ 15,134,86962

$ -104,04570 $ 2,337.337.94 $ 3,541,90085 $ 3.179,498 27

$

77.31525

$

11,925.000.00 14,007.62
120,00000

$ 11,896,322.87 $

$ 17.56863

77,31525 17,568.63

120.000.00

11,925,000 00 134,007.62 $ -134,00762

137,56863 $ 12,019,88388 $

16,261 06 16,261 06
000

$ 11.792,277.17 $ 89,16994

2.474,906 57 $ 15,561,784.73 $

6.316,357.98

7,911,176.02

3,179,49827 4.732,01818

-7.67486 295.21

-6,802.72 6,46229

$ 11,881.44711 $ 8,791,264 55 $ 23.465,581.10 $ 7.911,17602

- 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, 2002

EXHIBIT"C"

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support ServiceS Pupil Services Improvement of InstrucIJonal Services Educabonal Media Services General AdmlnlstralJon School AdmlnJslralJon Busmess AdminJstralJon Maintenance and OperalJon of Plant Student Transportabon Services central Support services Other Support ServiceS Food ServiceS OperalJon Community ServiceS OperalJons
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING USES
Other Uses
Excess of Revenues over (under) Expenditures and Other FinanCIng Uses
FUND BALANCE JULY 1. 2001
Adjustments Food Inventory - Net Change in Penod
Donated CommodllJes Purchased Food

GENERAL FUND

BUDGET

ACTUAL

$ 9,150,564.00 $ 9,417,34686

30390

4,430,000 00

5,007,026 91

63,00000

317,51625

$ 13,643,564.00 $ 14,742,19392

$ 9,636,939.00 $ 9,137,860.38

382,20300 274,667.00 367,60600 295,92300 829,80300 160,918.00 1,185,689 00 932,672 00
19,341.00 39,496 00
20,000.00

338,23322 241,817.18 370,98606 277,19575 772,209.78 132,698.16 1,062,187.37 835,85343
19,341.00 139,036 59
4107 94,524.57
49,20273

$ 14,145,257.00 $ 13,471,187.29

$ -501,69300 $ 1,271,006 63

-14,00000

-14,00762

$ -515,69300 $ 1,256,999.01

1,151,617.83

1,369,088,72

-3,07997

FUND BALANCE JUNE 30, 2002

$

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 121,16400 $ 134,406 00

1,374,88300

1,370,879 36

333.28800

337,751 27

$ 1,829,335 00 $ 1,843,036 63

$ 670,52000 $
7,00000 59,38900
67,164,00

574,865.00
6,09267 76,50749
94204 71.30516

33,02400
3,500.00 1,036,400.00

37,277 50
40,396 94 992,047.85

$ 1,876,997 00 $ 1,805,434 65

$ -47,66200 $

37,601.98

$ -47,66200 $

37.601.98

148,33537

136,55938

12,53279

-7,67486 29521

$ 113,206 16 $ 166,781 71

The notes to the general-purpose finanCIal statements are an Integral part of this statement. -7-

BANKS COUNTY BOARD OF EDUCATION

EXHIDrr "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Banks County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results 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 of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

- 8-

,.'

BANKS COUNTY BOARD OF EDUCAnON

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the fund 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. This fund includes:
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 and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (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 ofresults ofoperations.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of
- 9-

BANKS COUNTY BOARD OF EDUCAnON

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2002, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30,2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
BUDGET
The Banks County Board ofEducation's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure 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.

- 10-

BANKS COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting 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(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds and 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,
- 11 -

BANKS COUNTY BOARD OF EDUCAnON

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(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 Banks County Board of Commissioners fixed the property tax levy for the 200 I tax digest year (calendar year) on October 25, 2001 (levy date). Taxes were due on January 22,2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 200 I tax digest are reported as revenue in fiscal year 2002. The Banks County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $4,980,464.08.

The tax millage rate levied for the 2001 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

12.30 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $2,639,579.02 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

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

- 12 -

BANKS COUNTY BOARD OF EDUcATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District 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 ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate of the market value of the

- 13-

BANKS COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS
securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $11,227,340.49. 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 School District or by the School District's agent in the School District's name,
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)
- 14-

BANKS COUNTY BOARD OF EDUCATION

EXHIDIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, i002

Note 2: DEPOSITS AND INVESTMENTS

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

Risk Category

Bank Balance

1

$ 7,872,575.17

2

3,354,765.32

3

0.00

Total

$11,227340.49

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

At June 30, 2002, the carrying value of the School District's total investments was $11,928,562.79 which is materially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment

RIsk Categones

2

3

CarryJng Amount

FaIr Value

Repurchase Agreements $11 757000 00 $

000 $===0g,;0~0 $11,757,000.00 $11,757,000.00

Not Subject to CategonzatlOn ReqUirements Mutual Funds

171.562.79

171.56279

Total Investments

$1192856279 $1192856279

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

- 15 -

BANKS COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note 4: RISK MANAGEMENT

The School District has obtained commercial insurance for risk of loss associated with vehicles.

In addition, the School District participates in the Georgia School Boards Association Risk and Insurance Management System, a public entity risk pool organized on July 1, 1994, to develop and administer a plan to reduce risk ofloss on account ofgeneral liability, or property damage, including safety engineering and other loss prevention and control techniques, and to administer one or more groups of self-insurance funds, including the processing and defense of claims brought against members of the system. The School District pays an annual premium to the system for its general insurance coverage. Additional coverage is provided through agreements by the system with other companies according to their specialty for property, boiler and machinery (including coverage for flood and earthquake), general liability (including coverage for sexual harassment, molestation and abuse) and automobile risks. Payment ofexcess insurance for the system varies by line ofcoverage. The School District has neither significantly reduced coverage for this risk nor incurred losses (settlements) which exceeded the School District's insurance coverage in any ofthe past three years.

The School District has elected to self-insure for all other losses related to acts of God. The School District has not experienced any losses related to this risk in the past three years.

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. The School District has not incurred any liabilities for unemployment compensation during the past two fiscal years.

The School District participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $350,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered
Superintendent All Employees

Amount
$ 100,000.00 $ 100,000.00

- 16-

BANKS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Banks County Board of Education has entered into various lease agreements as lessee for football stadium lights 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 General Government - Series 2002

4.30% - 7.000% 2.00% - 4.125%

$ 6,280,000.00 11,925,000.00

$18,205,000.00

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 2002, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1,2001

$ 135,341.59 $ 6,550,000.00 $ 6,685,341.59

Additions G.O. Bonds

11,925,000.00 11,925,000.00

Deductions Payments Debt Retired

41,920.72

270,000.00

41,920.72 270,000.00

Balance June 30, 2002

$ 93:420.87 $18,205,000,00 $18,298.420.87

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

- 17 -

BANKS COUNTY BOARD OF EDUCAnON

EXHIBIT liD"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2003 2004 2005 2006 2007 2008 - 2012 2013 - 2017

$ 44,134.01 $ 808,177.29 $ 852,311.30 42,249.45 2,967,042.50 3,009,291.95 15,057.00 3,218,467.50 3,233,524.50 3,315,040.00 3,315,040.00 3,344,797.50 3,344,797.50 5,775,067.50 5,775,067.50 3,130,937.50 3,130,937.50

Total Principal and Interest $ 101,440.46 $22,559,529.79 $22,660,970.25

Deduct: Imputed Interest

8,019.59

Net Present Value of Future Minimum Lease Payments $ 93.420.87

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $175,672.24 for health insurance and retirement contributions paid on the School District's behalfby the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of $141,870.24

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 $33,802.00

Note 7: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.

- 18 -

BANKS COUNTY BOARD' OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System 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 CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2002 2001 2000

100% 100% 100%

$ 764,270.47 $ 855,481.57 $ 786,966.02

- 19-

BANKS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2002

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

219,112.47 $

1,489.28

1,893.49

2,496.49 3,52768

$

227,030.13 $ =======1=,4:=8=9.:=28==

LIABILITIES AND FUND EqUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EqUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total liabilities and Fund Equity

$

12,505.32 $

47,743.10

1,489.28

$

60,24842 $

1,489.28

$

2,49649

3,527.68

160,75754 $

$

166,781 71 $

0.00 0.00

$

227,03013 $=======1=,4:=8=9.:=28==

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

EXHIBIT"E"

FEDERAL
PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

220,601.75 $

232,055.48

$

179,568.45

181,461.94

47,25847

2,496.49 3,527.68

10,171.35 3,23247

$

179,568.45 $

408,087.86 $=====2=9=2=,7.1.7,;,,;.=77=

$

76,823.25 $

76,823.25

25,840.99

39,835.59 $

30,719.54

73,539.22

121,282.32

103,443.03

775.30

775.30

21,995.82

2,589.69

2,589.69

$

179,56845 $

241,306.15 $

156,158.39

$

2,496.49 $

10,171.35

3,527.68

3,232.47

$

----'0"-0=0'-

160,757.54

123,15556

$

000 $

166,781.71 $ _ _1.:.:3:.::;6.L:,5~59::..:.:;.;38~

$

179,56845 $

408,087.86 $ ==-=====2=9=2=..,7,,;,17,;,,;.=77=

- 21 -

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

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

68,960.00 $

622,938.56

337,751.27

$ 1,029,649.83 $

65,446.00 65,446.00

$

65,446.00

$

992,047.85

$

992,047.85 $

$

37,601.98 $

136,559.38

-7,674.86 295.21

65,446.00 0.00 0.00

$

166,781.71 $===-===0.=00;:"

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

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

134,406.00 $

118,309.07

$

747,940.80

1,370,879.36

1,171 ,444.26

337,751.27

345,634.68

$

747,940.80 $ 1,843,036 63 $ 1,635,388.01

$

509,419.00 $

574,865.00 $

491,942.11

6,092.67 76,507.49
942.04 77,305.16 37,277.50 40,396.94

6,092.67 76,507.49
942.04 77,305.16 37,277.50 40,396.94 992,047.85

6,676.16 39,371.03 3,962.32 11,304.59 26,740.71 53,954.63 925,446.83

$

747,940.80 $ 1,805,434.65 $ 1,559,398.38

$

0.00 $

37,601.98 $

75,989.63

0.00

136,559.38

60,910.18

-7,674.86 295.21

-6,802.72 6,462.29

$

0.00 $

166,781.71 $-==1=3:=6/:iii,5=59=.m38=

- 23-

BANKS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2002

ASSETS Cash and Cash EquIvalents Investments Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Undesignated Total Fund EqUity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

$

0.00

$ 11,790,994.16

$====~O~OO;;;.. $ 11,790,99416

$ 11,790,994.16

$

----.:0::..:..0::::.,:0:....

0.00

$

0:::::.::.;00::_ $ 11,790,99416

$===-==0;;:';',;;;;00;;", $ 11,790,994.16

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

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS

JUNE 3D, 2002

JUNE 3D, 2001

$

90,452.95 $

90,452.95 $

89,169.94

11,790,994.16

50,000.00

$

90,452.95 $ 11,881,447.11 $==1=3.9...1.:,1=:69=.940==,

$

50,000.00

$ 11,790,994.16

$

90,452.95

90,452.95 $

89,169.94

000

000

0.00

$

90,452.95 $ 11,881,447.11 $ _ _~8~9.L..:.,1.:::;69=-94~

$

90,452.95 $ 11,881,44711 $ ==1=3;,;;,9;.;,,1=:69=.94====.

- 25-

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

REVENUES
State Funds Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration
Capital Outlay Building and Building Improvements
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Premiums on Bonds Sold Proceeds from General Obligation Bonds
Par Value Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Fanancing Sources over (under) Expenditures and Other Fanancing Uses
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

0.00 $

29,850.80

$

000 $

29,850.80

$

121,171.89

$

14,007.62

$

14,007.62 $

121,171.89

$

-14,007.62 $

-91,321.09

$

77,315.25

11,925,000.00

$

14,007.62

-120,000.00

$

14,00762 $ 11 ,882,315.25

$

000 $ 11,790,994.16

0.00

0.00

$===-==O~OO~ $ 11,790,99416

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

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT
COMMISSION

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

200,000.00

$

1,283.01 $ _ _....;;3;...;.1'-',1~3.3.=;;;..81'-

6,72042

$

1,283.01 $

31.133 81 $ _---=2:.::0:.::6.1.:7.,.=.20::....:.:42=-

$

0.00 $

121,171.89

14,007.62 $ _---=2::...;4:.::6J.:,3~15::.:...:..14.:...

$

---.;0:.:.;.0:;.:0'- $

135,179.51 $ _--:2::..;4:.=6J.:,3~15::.:...:..14.:...

$

1,283.01 $

-104,045.70 $ _ _....;;-3:.=9J.:,5~94".".".;..:72=-

$

77,315.25

11,925,000.00 14,007.62 $
-120,000.00

$ 11,896,322.87 $

16,261.06 16,261.06

$

1,283.01 $ 11,792,277.17 $

-23,33366

89,169.94

89,169.94

112,503.60

$

90,452.95 $ 11,881.447.11 $===8..9.=,1=69=..9..4=

- 27

BANKS COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30, 2002

EXHIBIT "I"

PUBLIC LIBRARY FUND ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others

BALANCE JUNE 30, 2001

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2002

$

17,91275 $ 86,342,73 $

69,55160 $

34,70388

$

17,91275 $ 86,342.73 $

69,55160 $==34=-=,7=0=3=88=

See notes to the general-purpose finanCIal statements

- 28-

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agnculture. U S Department of Child NutntJon Cluster Pass-Through From Georgia Department of Educabon Food and NutntJon Program Food SelVlceS School Breakfast Program National School Lunch Program
Total Child Nutnlton Cluster
Other Programs Pass-Through From GeorgIa Department of Educabon Food and Nutntlon Program Food Dlstnbulton Program (1) Pass-Through From Office of Treasury and FIScal Services Naltonal Forest Reserve Funds
Total U. S Department of Agriculture
Educalton, U S. Department of Speaal Educabon Cluster Pass-Through From Georgia Department of Educalton IndIVIduals WIth Dlsabllrltes Educalton Act Part B - Speaal Educalton Flow Through Preschool Capaaty Building Improvement
Total Spedal Educalton Cluster
Other Programs Pass-Through From Georgia Department of Educalton Bementary and Secondary Educalton Ad Title I Grants to Local Educaltonal Agenaes TrUe II Eisenhower ProfeSSIonal Development TrUe III Technology literacy Challenge Fund Grants TItle VI Innovative Educalton Program Strategies Class SIze Reduclton Vocabonal Educalton - Basic Grants to States High School Program BasIc Grant Pass-Through From Unron County Board of Educalton Elementary and Secondary Educabon Ad TItle III Technology LJteracy Challenge Fund Grants
Total U S Department of Educabon

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10553 10.555

NlA

$ 153.107.95

NlA

428.812.03 $

$ 581.919.98 $

(2) 951,029 27 (3)
951.02927

10550 10.665

N/A

41,018.58

NlA

30390

$ 623,242.46 $

41.0.18.58 (4) 992,047.85

84027 84.173 84173

NlA

$ 193.298 51 $

NlA

16,80300

NlA

5,67000

$ 215,n1.51 $

193,298.51 16.80300 5,67000
215,n1.51

84010

NlA

84.281

NlA

84.318

NlA

84.298

NlA

84.340

NlA

84.048

NlA

361,94041 14,910.31 1.500.00 12,861.00 54.93517
58,90915

361.94041 14,91031 1,50000 12,861.00 54,93517
58.90915

84 318

NlA

27,113.25

$ 747,94080 $

27,11325 747,94080

Total Federal Flnanaal Assistance
NlA = Not Available

- 29-

$ 1,371.18326 $

1,739.988.65

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 3D. 2002

SCHEDULE "1'

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food DlslnbutJon Program represents the Federally assigned value of nonmonetary assistance for donated commoditIes receIved and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not mamtalned separately and are Induded m the 2002 Natlonal School Lunch Program
(3) Expenditures for this program mdude State, and/or Other Funds Expenditures are not mamtamed by fund source
(4) Funds earned on thiS program do not require reportmg of expenditures
Major Programs are Identified by an astensk (0) m front of the CFDA number
The School District did not proVIde Federal Assistance to any SubreClplent
The accompanying schedule of expenditures of Federal awards Indudes the Federal grant actiVIty of the Banks County Board of Educabon and is presented on the modified aeaual baSIS of accounting which IS the baSIS of accountmg used In the presentabon of the general-purpose finanCIal statements.

See notes to the general-purpose financial statements.

- 30-

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCYlfUNDING
GRANTS EducatIOn, Georgia Department of Quality BaSIC Educallon Direct Instructional Cost Krndergarten Program Krndergarten Program - Early InterventIOn Program Pnmary Grades (1-3) Program Pnmary Grades - Early InterventIOn (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early IntervenlIOn (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students wrth Dlsabilrtl8s Category I Category II Category III Category IV Category V Gifted Student - Category VI RemedIal Educallon Program A1temallve EducatIOn Program English Speakers of Other Languages (ESOL) Medl8 Center Program Staff and Professional Development 20 Days Addrtlonal Instruction Indirect Cost Categoncal Grants Pupil TransportalIOn Regular Bus Replacement Sparsity NUl'Slng SeMCes PnnClpal Supplements Vocallonal SUpervISOrs Education Equahzallon Funding Grant Food ServiceS VocaIIonalEducallOn Other State Programs Health Insurance Mentor Teachers Outdoor Classroom Post Secondary Option Spnng Preschool Handicapped Program Statewide K-3 Reading Program StatElW1de 4-8 After School Program Lottery Programs Asslstlve Technology Computers In the Classroom
Office of Treasury and Fiscal SeMCes PubliC School Employees Rellrement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 586,60300 54,04000
1,321,06300 98,01200
626,161.00 73,62500
1,136,458 00 841,26500 356,54300
34.06900 260,04300 574,09000
65,62000 35.12800 81,292.00 43.44200 84,794 00 44,57500 198,07200 38,417 00 58,88745 1,412,18500

$ 586,60300 54,04000
1,321,06300 98,01200
626,16100 73,62500
1,136,458 00 841,26500 356,54300
34,06900 260,04300 574,090 00
65,62000 35,12800 81,29200 43,44200 84,794 00 44,57500 198,07200 38,41700 58,88745 1,412,18500

425,93200 114,83600
35,88900 63.81400
9,98200 15.836 00 126,35200
$ 319,14297

68.96000

141,87024 3,82500 75000 4,05900
44,47000 25,72500 26,677 20

6.696 00 58,75000

425,93200 114,83600
35,88900 63,81400
9,98200 15,836 00 126,35200 68,96000 319.14297
141,87024 3,82500 75000 4,05900
44,47000 25,72500 26,677 20
6,696 00 58,75000

33,80200

33,80200

$

9,417 34686
1

$ 134,406 00

$ 9 551,75286
1

See notes to the general-purpose finanCIal statements

- 31 -

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2002

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

For the retirement of $10,598,975 00 of general obligation debt consistmg of the pnnClpal and mterest on the School Dlstnct's senes 1996 general obligation school bonds for the years 1997 through 2007 and the payment to redeem said bonds maturing 10 the years 2009 through 2017

$ 10,598,975.00 $ 10,598,975.00 $

599,820.00 $ 2,534,68502

Ongoing

For the acquislbon, construction, equipping and fumlshrng of a new middle school and other school bulldrngs and faCIlities; the acquIsition, construction, eqUlpprng and fumishing of a high school athlebc complex; adding to, renovatmg, Improvmg and equipping exisbng school buildings and facilities; acqurnng new school equipment; and acquiring any property necessary or deSirable therefor, both real and personal

16,000,00000

16,000,000.00

Ongorng

$ 26,598,97500 $ 26,598,97500 $ 599,82000 $ 2,534,68502

(1) The School Dlstnct's onglnal cost esbmate as speCIfied 10 the resolubon calling for the ImpOSition of the Local Option Sales Tax.
(2) The School Dlstnct's current estimate of total cost for the projects Indudes all cost from project rncepbon to completion.
(3) The voters of Banks County approved the Imposition of a 1% sales tax to fund the above projects
Amounts expended for the projects may rnclude sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

See notes to the general-purpose finanCIal statements.

- 33-

BANKS COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM CgBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2002

SCHEDULE "4"

DESCRIPTION
Direct InstruclJonal Programs Kindergarten Program Kindergarten Program-Early Intervention Program Pnmary Grades (1-3) Program Pnmary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Category IV Gifted Student - Category VI Remedial Education Program Alternative Educalton Program English Speakers of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

719,10700 $ 609,732.01 $

16,15827 $

625,89028

66.24700

99,254 47

1,551.80

100.806 27

1.619.46800 1,565,790.13

47,09556

1.612,88569

120,152.00

96.951.93

450

96,95643

765,412.00

806,589.35

40,369.30

846.95865

92.444.00 1,393,16500 1,031,292.00
437,08000 1,187,81400
99.655.00 53,255.00 103,947.00 54,644 00

82,50068 1,360,665 68 1,156,06064
363.606.35
18,51920 441,37258 606,01275
59,31230 106.98983
82.792.34 95,227.00 75,57541

1.527.30 78,25227 85,88959 40.892.92
929.03 5.53648 221,944.09 10.32544
868.87
87.69 2,570.92

84,02798 1,438,917 95 1.241,95023
404,49927
19,44823 446,90906 827.95684
69,637.74 107.858 70
82.792.34 95,314.69 78,146.33

$

7,743,682.00 S 7,626,952.65 $ 554,004.03 $ 8,180,95668

242,81200 47,094 00

317,642.27 25.54345

45.766.67 23.867.31

363.40894 49,41076

TOTALQBEFORMULAFUNDS

$

8,033,58800 $ 7,970,13837 $ 623,63801 $ 8,593,77638

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

See notes to the general-purpose financial statements

- 34-

BANKS COUNTY BOARD OF EDUCATION GENERAL FUND - aUALlTY BASIC EDUCATION PROGRAM (aBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

Banks County Upper Elementary School Banks County Primary School Banks County High School Banks County Middle School Banks County Elementary School Central Office (Altemative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

$

1,163,152.00 $

1,226,213 83

1,504,752.00

1,523,556.02

1,837,606.00

2,089,263.46

1,777,569.00

1,937,00740

1,356,656 00

1,404,915.97

103,947.00

$

7,743,68200 $====8=,1.8.0.=,9=5=:6=.6==8

See notes to the general-purpose financial statements. - 35-

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTO~
STATE AUDITOR
(4()4) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washmgton Street, S. W. SUite 214 Atlanta, GeorgIa 30334-8400
February 19, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the 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 ofBanks County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated February 19, 2003. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Banks County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Banks County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2002YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Banks County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6061-02-0 1.
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 sta~ements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6061-02-01 to be a material weakness.
This report is intended solely for the information and use ofthe management, members ofthe Banks 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,
~~~
Ru ell W. Hinton State Auditor
RWH:as 2002YB-41

RUSSELL W. HIl"TOl'.
STATE AUDITOR 1404) 656 2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W SUlle 214 Atlanta, Georgia 30334-g400
February 19, 2003

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

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

Ladies and Gentlemen:

Compliance

We have audited the compliance ofBanks County Board ofEducation with the types ofcompliance

u.s. requirements described in the

Office of Management and Budget (OMB) Circular A-I33

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

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

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

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

each of its major Federal programs is the responsibility of 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 auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, 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 ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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.

2002SA-IO

In our opinion, the Banks 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, 2002.
Internal Control Over Compliance
The management of Banks 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 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 of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use ofthe management, members ofthe Banks 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,
~nW.~ State Auditor
RWH:as 2002SA-IO

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

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

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6061-00-0 I FS-6061-00-02 FS-6061-01-0 I FS-6061-0 1-02

Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6061-01-02

We concur with this recommendation. Due to the requirements of GASB 34 we have received fixed asset software from the state. We engaged Maximus to do the inventory and appraisal. This inventory has been completed. We have the final reports and we are ready to load it into the Fas Gov fixed asset system. Also, we have purchased additional software that will enable us to load directly into the Fas Gov system. As assets are added or deleted, the file will be updated immediately. The fixed asset system will be fully implemented in fiscal year 2003.

SECTION IV FINDINGS AND QUESTIONED COSTS

BANKS COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Banks County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Banks County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe 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 of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Banks County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .5IO(a) ofOMB Circular A-B3 The Banks County Board ofEducation's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-l33.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Banks County Board of Education qualified as a low risk auditee as defined by Section .530 of OMB Circular A-l33.
- 1-

BANKS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2002
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED CQSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6061-02-01 The Banks County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED CQSTS No matters were reported.
-2-