Gk A~o0r-- --' .RI EZk, 'B.?-1 STATE OF GEORGIA I~-Ztro DEPARTMENT OF AUDITS AND ACCOUNTS 00 00000 0 0 1776 I BARROW COUNTY BOARD OF EDUCATION WINDER, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2000 Russell W. Hinton State Auditor BARROW COUNTY BOARD OF EDUCATION -TABLEOFCONTENTS- 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 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS D STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND E STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND I COMBINING BALANCE SHEET J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND K COMBINING BALANCE SHEET L COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES Page 2 4 7 8 9 11 26 28 30 32 34 35 BARROW COUNTY BOARD OF EDUCATION -TABLEOFCONTENTS- Page SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION EXHIDITS COMBINING STATEMENTS FIDUCIARY FUND TYPES M COMBINING BALANCE SHEET 36 N COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS 37 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 39 2 SCHEDULE OF STATE REVENUE 41 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 42 ANALYSIS OF EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 4 OVERALL 43 5 BY PROGRAM 44 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 BARROW COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION III 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 RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 June 7, 2001 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Barrow County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general purpose financial statements of the Barrow County Board of Education, as of and for the year ended June 30, 2000, as listed in the table of contents. These general purpose financial statements are the responsibility of the Barrow County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 2000, nor could we satisfy ourselves as to the accuracy ofthe amounts stated as inventories through alternative procedures. 2000ARL-13A As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared~singcertain 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, 2000, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, 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, 1999, were improperly recorded in the year ended June 30, 2000. 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 of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general purpose financial statements ofthe 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 Barrow County Board of Education as of June 30, 2000, and the results of its operations and the cash flows ofits nonexpendable trust fund 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 June 7, 200 1, on our consideration ofthe Barrow County Board ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions oflaws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. 2000ARL-13A Our audit was perfonned for the purpose of fonning an opinion on the general purpose financial statements of the Barrow County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through N) and the financial schedules (Schedules I through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-I33, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such infonnation has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in our opinion, except for the effect ofadjustments, if any, on the Special Revenue Fund, as might have been detennined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe food service inventories as discussed in the third paragraph, and except for the effects ofthe matters referred to in the fourth paragraph, such infonnation 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 pennanent 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. RWH:gp 2000ARL-I3A Respectfully submitted, ..... ~. Ru ell W. Hinton State Auditor .. BARROW COUNTY BOARD OF EDUCATION BARROW COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2000 ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food Amount Available in Debt Service Fund Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 4,076,793.08 $ 673,659.54 $ 1,858,707.66 100,000.00 34,309.06 943,294.37 637,649.12 56,449.83 17,353.60 Total Assets $ _",:;:5,020,087.45 $ 1,485,112.09 $ 1,893,016.72 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Loan Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Funds Held for Others Capital Lease Agreements General Obligation Bonds Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity $ 109.971.46 $ 104.228.97 $ 98.336.00 368.020.40 139.674.51 51.26 25.857.11 1.050.00 1.303.664.62 $ 249.697.23 $ 498,106.48 $ 1,403.050.62 $ 25.890.84 $ 309.991.28 56,449.83 17.353.60 $ 4,744,499.38 $ 4,770.390.22 $ 603,210.90 987.005.61 $ 489.966.10 0.00 489.966.10 Total Liabilities and Fund Equity $ _ _5,020,087.45 $ 1,485,112.09 $ 1,893,016.72 The notes to the general purpose financial statements are an integral part of this statement. -2- EXHIBIT "A" DEBT SERVICE FUND .- FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 2000 JUNE 30, 1999 $ 2,536,895.57 $ 21,279.08 $ 9,167,334.93 $ 4,688,466.40 3,562,104.27 53,695.67 3,750,109.00 14,979,975.90 1,020,463.63 2,601,407.12 1,835,510.60 $ 7,119,463.47 56,449.83 17,353.60 7,119,463.47 60,919.81 22,716.77 5,950.970.60 20,260,536.53 614,062.24 20,260,536.53 614,062.24 24,899,029.40 306,804.35 $ 7,119,463.47 $_~=7.4..,974.75 $_~2;,;.7,994,062.24 $ 43,586,716.72 $ 52,744,393.83 $ 312,536.43 $ 160,730.40 368,020.40 315,485.12 139,674.51 195,656.50 25,908.37 67,186.09 1,050.00 572,081.53 $ 10,468.04 1,303,664.62 10,468.04 532,469.39 8,764.55 $ 614,062.24 614,062.24 306.804.35 27,380,000.00 27,380,000.00 30,850,000.00 $ 10,468.04 $ 27,994,062.24 $ 30,155,384.61 $ 33,009,177.93 $ 7,119,463.47 $ 14,914.68 0.00 49,592.03 $ 7,119,463.47 $ _ _~64:!..c,5~0~6'c!..71~ $ 21,942.35 $ 7,119,463.47 5,950,970.60 14,914.68 14,914.68 335,882.12 52,682.01 56,449.83 17,353.60 489,966.10 60,919.81 22,716.77 9,427.962.47 585,927.68 5,397,302.31 3,597,179.53 $ 13,431,332.11 $ 19.735,215.90 $ 7,119,463.47 $ 74,974.75 $ . 27,994,062.24 $ 43,586,716.72 $ 52,744,393.83 -3- BARROW COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2000 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations Capital Outlay Debt Service Principal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Capital Leases Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Adjustments Food Inventory - Net Change in Period Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 31,977,120.88 $ 14,768,844.62 721 ,609.07 $ 47,467,574.57 $ 1,031,550.95 3,063,586.62 1,320,527.03 5,415,664.60 $ 30,146,599.44 $ 1,596,438.12 1,469,176.77 1,062,362.45 484,757.63 3,739,902.71 522,351.22 2,714,521.38 3,040,601.91 258,317.18 5,042.06 19,178.10 372,588.91 372,835.44 107,566.93 5,797.97 2,015,903.95 193,598.93 147,116.66 26,620.73 155,500.81 7,552.18 23,631.00 222.00 223,433.69 2,543,314.75 608.70 4,160.98 $ 45,918,038.22 $ 5,341,664.38 $ 1,549,536.35 $ _ _....:.7..::.4.r..:::,O~00~.2=2=- $ 414,824.82 $ -358,527.23 358,527.23 $ 56,297.59 $ _--.,;3=5=8=,5=27:...:;.2::;:3=- $ 1,605,833.94 $ 3,156,896.82 7,659.46 432,527.45 551,456.15 12,855.16 -4,469.98 -5,363.17 FUND BALANCE JUNE 30 $ 4,770,390.22 $ ==...,.,,;9.8..7./,;;,Om05=.6,.1... The notes to the general purpose financial statements are an integral part of this statement. -4- EXHIBIT "B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS _ _ _(Memorandum Only.L.) _ YEAR ENDED JUNE 30, 2000 JUNE 30, 1999 $ 1,194,139.60 $ 34,202,811.43 $ 29,699,015.32 3,063,586.62 3,267,859.98 $ 6,256,989.64 21,025,834.26 19,935,406.51 126,959.96 218,183.40 2,387,279.46 3,615,579.78 $ 1,321,099.56 $ 6,475,173.04 $ 60,679,511.77 $ 56,517,861.59 $ 11,116,938.78 $ $ 11,116,938.78 $ $ -9,795,839.22 $ $ 32,162,503.39 $ 30,780,606.52 1,790,037.05 1,616,293.43 1,088,983.18 640,258.44 3,747,454.89 522,351.22 2,738,152.38 3,040,823.91 258,317.18 228,475.75 2,562,492.85 373,197.61 11,493,935.20 1,249,290.47 1,496,818.93 968,247.05 870,019.04 3,079,780.18 846,448.00 2,835,513.29 2,002,431.16 268,353.21 217,977.73 2,468,738.12 326,620.40 9,673,683.92 3,470,000.00 1,561,530.00 3,235.00 3,577,566.93 1,567,327.97 3,235.00 3,190,076.82 1,706,037.17 6,967.99 5,034,765.00 $ 67,411,406.38 $ 61,987,610.00 1,440,408.04 $ -6,731,894.61 $ -5,469,748.41 $ $ 271,915.17 _ _ _ _ _ _ $ _--..::-2~7:....!1....::9,~1:=.;5.:...!..17!.... $ 271,915.17 $ -271,915.17 $ 414,824.82 630,442.40 $ -630,442.40 414,824.82 $ 12,423.71 -12,423.71 0.00 $ -9,523,924.05 $ 10,013,890.15 1,168,492.87 $ -6,317,069.79 $ -5,469,748.41 5,950,970.60 19,673,213.72 25,143,797.95 20,514.62 -4,469.98 -5,363.17 -6,627.84 5,792.02 7,119,463.47 $ 13,366,825.40 $ 19,673,213.72 -5- BARROW COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NONGAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2000 EXHIBIT C REVENUES GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES $ 29,050,690.00 $ 31,977,120.88 14,285,390.00 599,800.00 14,768,844.62 721,609.07 $ 43,935,880.00 $ 47,467,574.57 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 Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) $ 29,975,833.00 $ 30,146,599.44 1,371,145.00 1,633,390.00 1,126,471.00 537,370.00 3,812,571.00 545,909.00 3,170,702.00 2,546,761.00 275,619.00 2,000.00 347,633.00 365,000.00 1,596,438.12 1,469,176.77 1,062,362.45 484,757.63 3,739,902.71 522,351.22 2,714,521.38 3,040,601.91 258,317.18 5,042.06 19,178.10 372,588.91 372,835.44 113,364.90 $ 45,710,404.00 $ 45,918,038.22 $ -1,774,524.00 $ 1,549,536.35 Other Sources Other Uses $ 414,824.82 -358,527.23 Total Other Financing Sources (Uses) $ _---:5""'6"",2""9.:..;7..:::;59::.. Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -1,774,524.00 $ 1,605,833.94 FUND BALANCE JULY 1, 1999 Adjustments Food Inventory Net Change in Period Donated Commodities Purchased Food 3,232,961.00 3,156,896.82 7,659.46 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASISl_ $ 371,784.00 $ 1,031,550.95 3,642,903.00 3,063,586.62 1,852,272.00 1,320,527.03 $ 5,866,959.00 $ 5,415,664.60 $ 2,337,030.00 $ 2,015,903.95 1,700.00 286,716.00 63,840.00 244,663.00 193,598.93 147,116.66 26,620.73 155,500.81 7,552.18 22,000.00 23,631.00 222.00 2,000.00 2,909,010.00 223,433.69 2,543,314.75 608.70 4,160.98 $ 5,866,959.00 $ 5,341,664.38 $ 0.00 $ _......:...74'-",0""'0:.::,0.:.::;22=-. $ 358,527.23 $ 358,527.23 $ 0.00 $ 432,527.45 0.00 551,456.15 12,855.16 -4,469.98 -5,363.17 FUND BALANCE JUNE 30, 2000 $ 1,458,437.00 $ 4,770,390.22 $ 0.0..0... $ 987,005.61 The notes to the general purpose financial statements are an integral part of this statement. 7- BARROW COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2000 EXHIBIT "0" " OPERATING REVENUES Donations OPERATING EXPENSES Current Support Services Business Administration Community Services Operations Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES Interest Earned Net Income FUND BALANCE JULY 1 BARROW COUNTY, GEORGIA BOARD OF EDUCATION SCHOLARSHIP FUND, INCORPORATED TOTALS (Memorandum Only.L)_ _ YEAR ENDED JUNE 30, 2000 JUNE 30,1999 $ 1,010.00 $ 1,01 0.00 $ _ _~8~7,~84::..::.5~8::.... $ 55.51 $ 55.51 $ 26.00 1,175.00 1,175.00 3,175.00 $ 1,230.51 $ 1,230.51 $ _ _~3J.::,2.::..01.:.:..0~0::.... $ -220.51 $ -220.51 $ 5,583.58 2,725.04 2,725.04 3,488.45 $ 2,504.53 $ 2,504.53 $ 9,072.03 62,002.18 62,002.18 52,930.15 FUND BALANCE JUNE 30 $=-==..;;6.4.,506.71 $ 64,506.71 $ =....;;:6;,;;;,2~,0~02:=.1.;,;;8;", The notes to the general purpose financial statements are an integral part of this statement. -8- BARROW COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2000 EXHIBIT "E" Cash Flows from Operating Activities: Donations Cash Paid for Dues and Fees Cash Paid for Scholarships Net Cash Provided (Used) by Operating Activities Cash Flows from Investing Activities: Purchase of Investment Securities Proceeds from Sale and Maturity of Investments Interest Received on Investments Net Cash Provided (Used) by Investment Activities Net Increase (Decrease) in Cash Cash and Cash Equivalents - July 1 BARROW COUNTY, GEORGIA BOARD OF EDUCATION SCHOLARSHIP FUND, INCORPORATED TOTALS _ _ _(Memorandum Only.L-)_ _ YEAR ENDED JUNE 30, 2000 JUNE 30,1999 $ 1,010.00 $ 1,010.00 $ 8,784.58 -55.51 -55.51 -26.00 -1,175.00 -1,175.00 -3,175.00 $ -220.51 $ -220.51 $ _ _...::5;c5,:.,::8.:::.:3.:.::,58::... $ -53,695.67 $ -53,695.67 $ -51,029.58 51,029.58 2,725.04 51,029.58 2,725.04 45,130.77 3,488.45 $ 58.95 $ 58.95 $ _ _--=2J..:,4~10::.:..3::.:6~ $ -161.56 $ -161.56 $ 3,173.22 10,972.60 10,972.60 7,799.38 Cash and Cash Equivalents - June 30 $ 10,811.04 $ 10,811.04 $ ======1..0.0,;:,9=72;;;,.6,;;,;0= The notes to the general purpose financial statements are an integral part of this statement. - 9- BARROW COUNTY BOARD OF EDUCATION EXHIDIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 < Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Barrow County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. 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 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 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. - 11 - BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities . DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. 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: NONEXPENDABLETRUSTFUND Barrow County, Georgia Board of Education Scholarship Fund, Incorporated - the fund used to account for an endowment ofwhich the corpus is to be invested and preserved intact with the resultant income to be used to administer, secure and manage funds and assets to provide educational scholarships for students in Barrow County and for other general purposes. 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 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. - 12- BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations. Governmental funds are accounted for using the modified accrual basis ofaccounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. 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. 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 2000, a substantial number of personnel of the Board were employed for a one hundred and ninety day period beginning in late August 1999 and ending in early June 2000. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1999 and ending in August 2000. State grants to fund the State's share of these contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As ofJune 30, 2000, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2000, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and recorded as revenue in the fiscal year subsequent to June 30, 2000. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were recorded in the year ended June 30, 2000. 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. The accrual basis ofaccounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities. - 13- BARROW COUNTY BOARD OF EDUCAnON EXHffiIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BUDGET The Barrow 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 ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase 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 of return 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, - 14- BARROW COUNTY BOARD OF EDUCAnON EXHffiIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 . ' Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Barrow County Board of Commissioners fixed the property tax levy for the 1999 tax year (calendar year) on October 29, 1999 (levy date). Taxes were due on December 29, 1999. The lien date for property taxes was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2000. The Barrow County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board. Tax millage rates levied for the 1999 tax year (calendar year) for the Barrow County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): School Operations School Bonds 19.25 mills 1.10 mills 20.35 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $5,384,611.57 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $6,806,956.43 has been collected or on June 30, 2002, whichever occurs first. - 15 - BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. COMPENSATED ABSENCES Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general purpose financial statements. Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements. GENERAL OBLIGATION BONDS The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The Board has the following types of interfund transactions: Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Operating transfers are recorded for all interfund transactions other than reimbursements. - 16- BARROW COUNTY BOARD OF EDUCATION EXHffiIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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, results ofoperations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis 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 of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate 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 ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone of or any combination ofthe 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 - 17 - BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 2: DEPOSITS AND INVESTMENTS (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, 2000, the bank balances were $16,043,871.81. 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 - Uncollatera1ized 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, 2000, as follows: Risk Category Bank Balance 1 $ 642,126.95 2 15,401,744.86 3 0.00 Total $16,043.871.81 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. - 18 - BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 2: DEPOSITS AND INVESTMENTS At June 30, 2000, the carrying value of the Board's total investments was $34,309.05. The investments are classified as to risk categories as follows: Type of Investment U. S. Government $ Local Government Investment Pools Total Investments Risk Categories I 2 34.00 $ 0.00 $ Carrying 3 Amount 0.00 $ 34.00 $ Fair Value 34.00 34,275.05 34,275.05 $ 34,3Q9.05 $ 34,309.05 The carrying amounts shown above includes amounts maintained in an investment pool by the State of Georgia, Office of Treasury and Fiscal Services in which the Board owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments, A description ofthe Primary Liquidity Portfolio is as follows: The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the Securities and Exchange Commission as an investment companybut does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7like pool. The pool's primary objectives are safety ofcapital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds ofGeorgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund. Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2000, was 23 days. The average investment duration for Fund 6 on June 30, 2000, was .80 year. - 19- BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 3: NON-MONETARY TRANSACTIONS The Board receives food commodities from the United States Department ofAgriculture (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 ofloss 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 ofloss associated with torts, assets, errors or omissions, job related illness or injuries to employees and natural disaster. 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 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 of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 1999 2000 Beginning of Year Liability~_ Claims and Changes in Estimates Claims Paid End of Year Liability_ $ 0.00 $ 1,150.00 $ 1,150.00 $_ _---::0=.0=0 $ 0.00 $ 1,920.48 $ 1,920.48 $ -"'0=.0'-"'-0 The Board has purchased a surety bond to provide additional insurance coverage as follows: Position Covered Amount Superintendent $ 100,000.00 Note 5: GENERAL LONG-TERM DEBT CAPITAL LEASES The Barrow County Board of Education has entered into various lease agreements as lessee for school bus purchases. 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 ofthe date of their inception. - 20- BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 5: GENERAL LONG-TERM DEBT GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: _ _ _~P-=urp;.:::;o.::<.:se,,-- _ Interest Rates General Government - Series 1997 General Government - Series 1995A General Government - Refunding - Series 1995B General Government - Refunding - Series 1993 4.00% - 5.00% 4.00% - 5.40% 3.90% - 5.40% 3.15% - 4.75% Amount $ 8,580,000.00 9,825,000.00 5,650,000.00 3,325,000.00 $27.380.000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 2000, were as follows: Capital Leases General Obligation Bonds Total Balance July 1, 1999 $ 0.00 $30,850,000.00 $30,850,000.00 Retroactive Restatement of Prior Year Balances 306,804.35 0.00 306,804.35 Balance July 1, 1999 Restated $ 306,804.35 $30,850,000.00 $31,156,804.35 Additions Capital Leases 414,824.82 414,824.82 Deductions Debt Retired Payments Balance June 30, 2000 107,566.93 3,470,000.00 3,470,000.00 107,566.93 $ 614.0q2!24 $27.380,000.00 $27.994.062.24 At June 30, 2000, payments due by fiscal year which includes principal and interest for these items are as follows: - 21 - BARROW COUNTY BOARD OF EDUCAnON EXHffiIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 .... Note 5: GENERAL LONG-TERM DEBT Fiscal Year Ended June 30 Capital Leases General Obligation Bonds Total Debt 2001 2002 2003 2004 2005 2006 - 2010 2011 - 2015 $ 184,037.04 $ 5,210,822.50 $ 5,394,859.54 169,280.77 5,424,315.00 5,593,595.77 169,280.77 4,106,010.00 4,275,290.77 173,132.57 1,834,540.00 2,007,672.57 70,672.14 1,857,315.00 1,927,987.14 9,399,340.00 9,399,340.00 9,599,080.00 9,599,080.00 Total Principal and Interest $ 766,403.29 $37,431,422.50 $38.197.825.79 Deduct: Imputed Interest 152,341.05 Net Present Value of Future Minimum Lease Payments $ 614.06~.24 Note 6: LOANS PAYABLE At June 30,2000, short-tenn debt (temporary loans) amount to $139,674.51 with interest accruing at 5.75 percent. Article IX, Section V, Paragraph V ofthe Constitution ofthe State of Georgia limits the aggregate amount oftemporary loans to 75 percent ofthe total gross income from taxes collected in the preceding year and requires all temporary loans to be repaid no later than December 31 ofthe calendar year in which the loan was made. Note 7: ON-BEHALF PAYMENTS The Board has recognized revenues and expenditures in the amount of $714,041.67 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies. Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $562,252.69 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$14,756.98 - 22- BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 7: ON-BEHALF PAYMENTS 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 0[$137,032.00 Note 8: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 2000, together with funding available: Project Unearned Executed Contracts Funding Available From State Southwest Barrow Elementary School New Barrow County High School . GSFIC 99/98S-607-001 $ 409,997.74 2,733,088.36 $ 1,142,379.40 $ 3.}4).Q86.10 $ 1.142,,379.40 The amounts described in this note are not reflected in the general purpose financial statements. Note 9: CONTINGENT LIABILITIES ARBITRAGE REBATE TAX The Federal Tax Reform Act of 1986 requires issuers of tax-exempt debt to make payments to the United States Treasury ofInvestment Income received at yields that exceed the issuer's tax-exempt borrowing rates. The U. S. Treasury requires payment every five years. The estimated liability of $265,587.93 at June 30,2000, is based on tax exempt debt subject to the Tax Reform Act. The estimated liability will be updated annually for any tax-exempt issuances or changes in yields through June 30, 2002, at which time payment ofthe final calculated liability for the five-year period is required to be remitted. 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. Note 10: SUBSEQUENT EVENTS On March 20, 2001, the voters ofBarrow County voted in favor of a Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition ofthe tax approved by the voters, as stated on the Official Ballot of Barrow County, is as follows: - 23- BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 10: SUBSEQUENT EVENTS "Shall a special one percent sales and use tax be imposed in Barrow County for a period of time not to exceed 20 calendar quarters, commencing upon the expiration of the existing special one percent sales and use tax, and for the raising ofnot more than $43,000,000 for the purposes of providing funds to payor to be applied toward the cost of (i) the acquisition, construction and equipping of two or more new elementary schools, including necessary furnishings and equipment; additions, renovations and improvements at existing schools; system-wide technology improvements; and the acquisition ofland for additional schools, the maximum cost of such projects not to exceed $34,000,000; and (ii) the payment of principal and interest on the School District's Series 1993, 1995A and 1995 B Bonds, coming due August 1, 2002 through and including February 1, 2007, the maximum amount of debt to be retired not to exceed $9,000,000? If imposition of the tax is approved by the voters, such vote shall also constitute approval of the issuance of general obligation debt of Barrow County School District in the principal amount of $20,000,000 for the above purposes, including capitalized interest. through February 1, 2002." In the subsequent fiscal year, the Board issued general obligation bonds in the amount of $10,000,000.00 dated May 9,2001. The proceeds from these bonds will be used for new school construction, renovations and technology purchases. Note 11: ACCUMULATED EMPLOYEES' LEAVE In fiscal year 2000, the Board initiated a Personnel Vacations policy which grants employees that retire, resign or are terminated, payment ofup to fifteen days for all earned unused vacation leave at a sum equal to the number of vacation days times the employee's daily rate of pay at the date of departure. See Note 1 - Compensated Absences Note 12: 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 ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. - 24- BARROW COUNTY BOARD OF EDUCAnON EXHIDIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 12: RETIREMENT PLANS TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% of. their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year 2000 1999 1998 Percentage Contributed 100% 100% 100% Required Contribution $ 3,238,565.33 $ 3,236,053.35 $ 2,852,261.75 - 25- ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories Food Donated Commodities Purchased Food BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2000 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 665.224.54 $ 183,802.20 100,000.00 16,840.10 39,203.03 56,449.83 17,353.60 Total Assets $ 855,868.07 $ =====2=2=3=,0,;;,0.5...2;;;,;3= LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity Total Liabilities and Fund Equity See notes to the general purpose financial statements. - 26- $ 37,688.41 $ 141,165.33 20.651.14 68,428.78 $ 178,853.74 $ _ _..::8;.:.9z.0::.;:,..,:79:.:,.9::.:2:.... $ 133.925.31 $ 56,449.83 17.353.60 603,210.90 0.00 $ 677!014.33 $ _ _1~3;.:.3z.:9:;.:,;25:.:,.3:::,.1:-,. $ 855,868.07 $ =====2=2=3=!0_05=.2~3= EXHIBIT "G" FEDERAL PROGRAMS TOTALS JUNE 30, 2000 JUNE 30, 1999 $ 849,026.74 $ 525,964.13 100,000.00 100,000.00 $ 581,605.99 637,649.12 283,182.20 56,449.83 17,353.60 60,919.81 22,716.77 $ 581,605.99 $ 1,660,479.29 $ ====9=9;,;;;2!Oo,7,;;;;82;;;.9;;,,;1... $ 175,367.20 $ 175,367.20 $ 16,034.72 45,889.42 104,228.97 62,896.63 158,426.29 368,020.40 302,343.12 25,857.11 25,857.11 60,052.29 $ 405,540.02 $ 673,473.68 $ _ _44.:.:..:.1L:3:::::';26::.:,.7:...:6~ $ $ 176,065.97 $ 309,991.28 21,942.35 52,682.01 56,449.83 17,353.60 60,919.81 22,716.77 0.00 603,210.90 393,195.21 $ 176,065.97 $ 987,005.61 $ _----'5;.;;5..;..1,-,-4.;;.;56:;.;.1.;.;;5;.. $ 581,605.99 $ 1,660,479.29 $ ====9=9;,;;;2'!Oo7,;;;;82;;;.9;;,,;1... - 27- BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ~NDED JUNE 30, 2000 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations Capital Outlay Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Operating Transfers In Excess of Revenues and Other Financing Sources over (under) Expenditures FUND BALANCE JULY 1 Adjustments Food Inventory - Net Change in Period Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS $ 203,918.00 $ 1,224,676.89 1,320,527.03 827,632.95 $ 2.749, 121 .92 $ _----:8::,::2:.:..7J.::6:;,:::32::.:,.9:::.:5~ $ $ 2,542,031.05 642,593.70 61,997.94 2,180.23 22,075.04 22,000.00 222.00 249.61 1,283.70 $ 2,542,031.05 $ _----:7~5=21.::,6.::.:02~.2=2:... $ 207,090.87 $ 75,030.73 $ 207,090.87 $ 476,831.79 2,924.82 -4,469.98 -5.363.17 6,367.47 81,398.20 52,527.11 FUND BALANCE JUNE 30 See notes to the general purpose financial statements. - 28- $ 677,014.33 $ .........-.1,;,;;3.3.!.OO.9=25=.3..1= EXHIBIT "H" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30,1999 $ 1,031,550.95 $ 894,093.67 $ 1,838,909.73 3,063,586.62 3,267,859.98 1,320,527.03 1,101,630.26 $ 1,838,909.73 $ 5,415,664.60 $ 5,263,583.91 $ 1,373,310.25 $ 2,015,903.95 $ 1,970,008.89 131,600.99 144,936.43 26,620.73 133,425.77 7,552.18 1,631.00 223,184.08 608.70 4,160.98 193,598.93 147,116.66 26,620.73 155,500.81 7,552.18 23,631.00 222.00 223,433.69 2,543,314.75 608.70 4,160.98 203,179.56 126,136.57 17,690.36 87,059.80 13,442.09 41,774.30 5,165.67 217,977.73 2,467,666.02 749.33 $ 2,047,031.11 $ 5,341,664.38 $ 5,150,850.32 $ -208,121.38 $ 74,000.22 $ 112,733.59 352,159.76 358,527.23 12,423.71 $ 144,038.38 $ 432,527.45 $ 125,157.30 22,097.25 551,456.15 427,134.67 9,930.34 12,855.16 -4,469.98 -5,363.17 -6,627.84 5,792.02 $ 176,065.97 $ 987,005.61 $ =-......;5~5;,,;,1~,4,;;;;56=.=15= -29 - BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2000 ASSETS Cash and Cash Equivalents Investments BOND PROCEEDS GEORGIA STATE FINANCING AND INVESTMENT COMMISSION $ 840,335.34 $ 1,018,372.32 34,309.06 Total Assets $ 874,644.40 $ ====",1,,;:,,01=8~,3;,;.72;;;;;,.,;;;,;32= LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Contracts Payable Retainages Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity $ 98,336.00 $ 1,050.00 286,342.30 1,017,322.32 $ 384,678.30 $ _-..:.J1,~01~8:.&.::,3~7::.:2..::::32=- $ 489,966.10 0.00 $ $ 489,966.10 $ ---..:O~.O~O~ ....l:0~.0~0:.... Total Liabilities and Fund Equity $ 874,644.40 $ =......:.11,~01~8~,3;.:.72:o.;.~32~ See notes to the general purpose financial statements. - 30 EXHIBIT "I" LOTTERY PROJECT TOTALS JUNE 30, 2000 JUNE 30,1999 $ 0.00 $ 1,858,707.66 $ 770,815.82 34,309.06 11 ,079,946.32 $ 0.00 $ 1,893,016.72 $ ===1=,:!1,=85;;.;;0:.\0,7=6=:2;",;,.1.4..... $ $ 98,336.00 1,050.00 1,303,664.62 732,321.07 572,081.53 532.469.39 $ 1.403,050.62 $ _ _--:..11,.:::.;83::..:6:.L:,8::.:..7..:.1.~9=-9 $ 489,966.10 $ 9.427,962.47 585,927.68 $ ----=o~.o::..:o:.... 0.00 0.00 $ 0.00 $ 489,966. 10 $ _ _..:.10::.L'0=-1:.;:3""8,~9.::.:0..:.15:0.,. $ 0.00 $ 1,893,016.72 $ ===11=,8.5..0. .7,=6;;o;2..1..4=. - 31 - BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2000 REVENUES State Funds Other Funds Total Revenues EXPENDITURES Current Support Services Business Administration Capital Outlay Land and Land Improvement Building and Building Improvements Equipment Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 BOND PROCEEDS GEORGIA STATE FINANCING AND INVESTMENT COMMISSION $ $ _ _1.:.,:2:.:::6..9::;,.::.5;::.:9.~96~ 592,770.60 $ 126,959.96 $ _ _-=5;.::.9::J2,~77.:...;O~.6;::.:0,,- $ 2,061,156.35 $ 129,596.95 8,151,474.57 774,710.91 $ 2,190,753.30 $ _-=8,=:92:.::6~1.,=.85~.4...:.:8,,- $ -2,063,793.34 $ -8,333,414.88 $ 271,915.17 $ -7,146,118.20 7,747,487.20 $ -6,874,203.03 $ _--..:..l7,..:...74.;..:.7..L.:,4.=,87.:..:..2::,:0"- $ -8,937,996.37 $ 9,427,962.47 -585,927.68 585,927.68 FUND BALANCE JUNE 30 $ 489,966.10 $ ====0;,;,.0;;;,;0;;", See notes to the general purpose financial statements. - 32- EXHIBIT "J" LOTIERY PROJECT TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30,1999 $ 601,369.00 $ 1,194,139.60 $ 236,212.30 126,959.96 1,500,219.62 $ 601,369.00 $ 1,321,099.56 $ 1,736,431.92 $ 1,835.49 337,599.00 $ 0.00 $ 10,212,630.92 8,226,564.96 904,307.86 40,645.20 $ ---:0::.:.;.0::.,:0'- $ 11 ,116,938.78 $ 8,606,644.65 $ 601,369.00 $ -9,795,839.22 $ -6,870,212.73 $ $ _---:-6:.::0...:..1'1.=.3.:.;69::.:.;.0::.,:0,- 8,019,402.37 $ -7,747,487.20 4,532,370.15 -4,532,370.15 $ -601,369.00 $271,915.17 $ 0.00 $ 0.00 $ -9,523,924.05 $ -6,870,212.73 0.00 10,013,890.15 16,884,102.88 $ 0.00 $ 489,966.10 $ 10,013,890.15 - 33- ASSETS Cash and Cash Equivalents Investments Accounts Receivable BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2000 EXHIBIT "K" PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2000 JUNE 30,1999 $ 315,155.55 $ 2,221,740.02 $ 2.536,895.57 $ 2,883,852.65 3,562,104.27 3,562,104.27 2,249,000.00 53,896.24 966,567.39 1,020,463.63 818,117.95 Total Assets $ 369,051.79 $ 6,750,411.68 $ 7,119,463.47 $ 5,950,970.60 FUND EQUITY Fund Balances Reserved For Debt Service Unreserved Undesignated $ 369,051.79 $ 6,750,411.68 $ 0.00 _ _ _ _o:::..:.~oo~ 7,119,463.47 $ 0.00 5,950,970.60 0.00 Total Fund Equity $ 369,051.79 $ 6,750,411.68 $ 7,119,463.47 $ 5,950,970.60 See notes to the general purpose financial statements. - 34- BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND YEAR ENDED JUNE 30, 2000 EXHIBIT "L" PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30,1999 REVENUES Taxes Other Funds $ 872,378.07 $ 5,384,611.57 $ 6,256,989.64 $ 5,695,270.43 41,346.52 176,836.88 218,183.40 162,968.15 Total Revenues $ 913,724.59 $ 5,561,448.45 $ 6,475,173.04 $ 5,858,238.58 EXPENDITURES Debt Service Principal Interest Paying Agent Fees $ 735,000.00 $ 1,024,415.00 3,235.00 2,735,000.00 $ 537,115.00 3,470,000.00 $ 1,561,530.00 3,235.00 3,140,000.00 1,700,132.00 6,967.99 Total Expenditures $ 1,762,650.00 $ 3,272,115.00 $ 5,034,765.00 $ 4,847,099.99 Excess of Revenues over (under) Expenditures $ -848,925.41 $ 2,289,333.45 $ 1,440,408.04 $ 1,011,138.59 OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out $ 641 ,452.50 $ -271,915.17 $ -271,915.17 -641,452.50 Total Other Financing Sources (Uses) $ -271,915.17 $ -271,915.17 $ 0.00 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -848,925.41 $ 2,017,418.28 $ 1,168,492.87 $ 1,011,138.59 FUND BALANCE JULY 1 1,217,977.20 4,732,993.40 5,950,970.60 4,939,832.01 FUND BALANCE JUNE 30 $ 369,051.79 $ 6,750,411.68 $ 7,119,463.47 $ 5,950,970.60 See notes to the general purpose financial statements. - 35- .. ~ ASSETS Cash and Cash Equivalents Investments BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 2000 EXHIBIT "M" NON EXPENDABLE TRUST FUND BARROW COUNTY, GEORGIA BOARD OF EDUCATION SCHOLARSHIP FUND, INCORPORATED AGENCY FUNDS TOTALS JUNE 30, 2000 JUNE 30,1999 $ 10,811.04 $ 10,468.04 $ 21,279.08 $ 19,737.15 53,695.67 53,695.67 51 ,029.58 Total Assets $ 64,506.71 $ 10,468.04 $ 74,974.75 $ ~===7=0.10.,7=6=6.=73== LIABILITIES AND FUND EQUITY LIABILITIES Funds Held for Others FUND EQUITY Fund Balances Reserved For Endowment Corpus $ Unreserved Undesignated Total Fund Equity $ $ 10,468.04 $ 10,468.04 $ _--:8:::".,7:.,::6:..:.4.:.:::;55::.... 14,914.68 49,592.03 ..::6~4..:::,5.:::;06::.:..7:,..1:.,. $ 14,914.68 $ 14,914.68 49,592.03 47,087.50 $ 64,506.71 $ _--=6o::2J.::!0c=.02:.;....:.;18~ Total Liabilities and Fund Equity $ 64,506.71 $ 10,468.04 $ 74,974.75 $ 7..0..,7.6.6.;;;,.;.7..3_ See notes to the general purpose financial statements. - 36- BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 3D, 2000 EXHIBIT "N" BOARD MEMBER'S SPECIAL ACCOUNT ASSETS Cash and Cash Equivalents BALANCE JULY 1, 1999 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 2000 $ 5,560.97 $ 16,407.63 $ 16,490.51 $ ===.......,;;;,5~,4,;.;78~.0;:.;;9;.., LIABILITIES Funds Held for Others $ 5.560.97 $ 16,407.63 $ 16,490.51 $ ==,;;;,5~,4,;.;78~.0;:.;;9;., MURRAY KENNEDY MEMORIAL FUND ASSETS Cash and Cash Equivalents $ 3,076.01 $ 15.90 $ 0.00 $ _ _.;;;30~,,;;;,91,;,;,.9;;,,1;,.. LIABILITIES Funds Held for Others $ 3,076.01 $ 15.90 $ 0.00 $ _ _,:;;,3:,0;;:;,;;,91,;,;;.9~1;,.. SUNSHINE FUND ASSETS Cash and Cash Equivalents $ 127.57 $ 0.00 $ 0.00 $ 1:.:;20:.;7.~57~ LIABILITIES Funds Held for Others $ 127.57 $ 0.00 $ 0.00 $ _ _....:.1~27:.;;.5:;:.:7_ HARRIETT NOWELL SCHOLARSHIP FUND ASSETS Cash and Cash Equivalents $ 0.00 $ 331.71 $ 0.00 $ _ _...;;3~31,:.;,.7;.1:- LIABILITIES Funds Held for Others $ 0.00 $ 331.71 $ 0.00 $ _ _.,;3~3;.:.1.;,;,.7.:...1 LIBRARY ENRICHMENT FUND ASSETS Cash and Cash Equivalents $ 0.00 $ 810.00 $ 0.00 $ _ _...:8~1,:;:;0.~00;:.. LIABILITIES Funds Held for Others $ 0.00 $ 810.00 $ - 37- 0.00 $ _ _...:8;:.:1~0.,:;:,:00~ BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2000 EXHIBIT "N" STUDENT SERVICE CENTER ASSETS Cash and Cash Equivalents BALANCE JULY 1, 1999 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 2000 $ 0.00 $ 877.16 $ 248.40 $ ======6=28==..7;.;6= LIABILITIES Funds Held for Others $ 0.00 $ 877.16 $ 248.40 $ ==~6;,;;;,28;;,;'7,;.;6;;.., TOTALS - AGENCY FUNDS ASSETS Cash and Cash Equivalents $ 8,764.55 $ 18.442.40 $ 16,738.91 $ ===1;,;;0,;.;.4=68;;,;.0~4;." LIABILITIES Funds Held for Others $ 8,764.55 $ 18,442.40 $ 16,738.91 $ =...,;1-.0,;,;.4.,68_.0_4= See notes to the general purpose financial statements. - 38- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2000 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program 10.553 10.555 N/A $ 232,469.29 (2) N/A 830,910.72 $ 2,380,734.17 (3) Total Child Nutrition Cluster $ 1,063,380.01 $ 2,380,734.17 Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) 10.550 N/A Pass-Through From U. S. Department of Defense Food and Nutrition Program Food Distribution Program (1) 10.550 N/A 137,638.88 23,658.00 137,638.88 23,658.00 Total U. S. Department of Agriculture $ 1,224,676.89 $ 2,542,031.05 Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool Special Projects 84.027 84.173 84.027 N/A $ 365,353.02 $ N/A 110,300.00 N/A 26,482.11 363,286.11 347,592.91 (3) 12,219.24 Total Special Education Cluster $ 502,135.13 $ 723,098.26 Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 84.010 N/A Title II Eisenhower Professional Development 84.281 NlA Title III Technology Literacy Challenge Fund Grants 84.318 N/A Title VI Innovative Education Program Strategies 84.298 N/A Class Size Reductions 84.340 N/A Safe and Drug-Free Schools 84.186 N/A Vocational Education - Basic Grants to States High School Program Basic Grant 84.048 N/A 882,744.52 48,173.08 124,641.00 43,200.00 140,699.00 32,453.00 64,864.00 750,121.28 49,545.56 129,068.05 47,065.55 (3) 140,699.00 31,413.21 176,020.20 (3) Total U. S. Department of Education $ 1,838,909.73 $ 2,047,031.11 Total Federal Financial Assistance N/A = Not Available - 39- $ 3,063,586.62 $ 4,589,062.16 BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2000 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 2000 National School Lunch Program. (3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Barrow County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general purpose financial statements. I See notes to the general purpose financial statements. -40 - BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2000 SCHEDULE "2" AGENCY/FUNDING GRANTS Education. Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Limited English Speaking Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentoring Program Mentor Teacher Program National Teacher Certification Pay for Performance Program Preschool Handicapped Program Remedial Summer School Program Teachers'Retirement Lottery Programs Assistive Technology Computers in the Classroom Exceptional Growth-Capital Outlay Georgia State Financing and Investment Commission Reimbursement on Construction Projects Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement CONTRACT Education, Georgia Department of Georgia's Reading Challenge GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 17,415.836.00 4.153.362.00 475.363.00 761.908.00 213.030.00 4.532.708.00 $ 17,415.836.00 4.153.362.00 475,363.00 761,908.00 213.030.00 4,532,708.00 848.799.00 242.508.00 10,978.00 617,566.00 890.028.00 134.344.00 995.892.00 76.280.00 86,527.00 -3,535,972.00 2,194,740.00 $ 652,364.00 203,918.00 848,799.00 242.508.00 10,978.00 617,566.00 890,028.00 134,344.00 995,892.00 76,280.00 86,527.00 -3,535,972.00 2,194,740.00 203,918.00 652,364.00 35,000.00 18,981.98 750.00 562,252.69 4,948.74 2,410.66 14,418.00 3,069.00 200,000.00 99,964.20 5,603.63 14,756.98 35,000.00 18,981.98 750.00 562,252.69 4,948.74 2,410.66 14,418.00 3,069.00. 200,000.00 99,964.20 5,603.63 14,756.98 31,074.84 176,784.00 $ 601,369.00 31,074.84 176,784.00 601,369.00 137,032.00 619,774.11 592,770.60 592,770.60 619.774.11 137,032.00 111,672.00 111,672.00 $ 31.977,120.88 $ 1,031,550.95 $ 1,194,139.60 $ 34,202,811.43 See notes to the general purpose financial statements. - 41 - BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30, 2000 SCHEDULE "3" PROJECT Provide funds to payor to be applied toward the cost of the repayment of a portion of the principal and interest on the School District's Series 1973, Series 1990, Series 1993, Series 1995A and Series 1995B Bonds coming due February 1, 1998, through and including August 1, 2002, the maximum amount of debt to be retired not to exceed $3,250,000.00 Provide funds to payor to be applied toward the cost of the acquisition, construction and equipping of a new high school and necessary furnishings and construction and equipping of a new elementary school, land for future school sites and renovations and modifications of all existing schools, including the acquisition of all necessary property, the maximum cost of such projects not to exceed $17,750,000.00 ORIGINAL ESTIMATED COST (1) CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) AMOUNT EXPENDED IN PRIOR YEARS $ 3,250,000.00 $ 3,250,000.00 17,750,000.00 17,750,000.00 $ 8,558,217.76 $ 7,233,688.33 $ 21,000,000.00 $ 21,000,000.00 $ 8,558,217.76 $ 7,233,688.33 (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 projects. Includes all cost from project inception to completion. (3) The voters of Barrow County approved the imposition of a 1% sales tax to fund the above projects. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life ofthe projects. See notes to the general purpose financial statements. - 42- BARROW COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 2000 SCHEDULE "4" Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis Salaries Operations Less: Expenditures for Media Center Programs in Excess of Total Media Allotmeht Expenditures per Audit FOURTEEN WEIGHTED AND MEDIA CENTER PROGRAMS 100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS $ 23,623,873.00 $ _ _---:....:73::...;4:..z....,4:.=3~':9,,:::O=.,O $ 26,322,125.17 1,106, 071 .20 $ _ _-=..:86::...;1..l.0:':,:2c.:..:4.:.::6.:..7 $ 27,428,196.37 -260,223.82 $ _--:2::.;7...l.'1.;.:6:..:..7.l9.::'.:.,7:.;2.:.::,5=..5 Amount of Underexpenditure for Total Allotment $ 0.00 $ =======0,=00= See notes to the general purpose financial statements. - 43 - BARROW COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS BY PROGRAM GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000 " GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs SPECIAL EDUCAliON PROGRAMS Regular Programs Category I (*) Category II (*) Category III (*) Category IV (*) Category V (*) Sub-Total - Regular Category VI (Gifted) (*) Total Special Education Programs REMEDIAL EDUCATION PROGRAM Cl Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs ALLOTMENTS FROM GEORGIA DEPARTMENT OF REQUIRED ORIGINAL % ORIGINAL MID-TERM $ 2,210,422.00 $ 1,989,379.80 $ -100,771.00 5,577,736.00 5,019,962.40 6,121.00 $ 7,788,158.00 90 $ 7,009,342.20 $ -94,650.00 2,277,177.00 90 2,049,459.30 111,773.00 3,706,474.00 90 3,335,826.60 87,218.00 1,575,340.00 90 1,417,806.00 208,653.00 918,997.00 90 827,097.30 13,028.00 1,149,690.00 90 1,034,721.00 72,833.00 $ 17,415,836.00 $ 15,674,252.40 $ _---:3~9.:::.8,~85~5:.:.::.0~0 $ 3,794,290.00 $ 3,414,861.00 $ 309,566.00 $ 3,794,290.00 90 $ 3,414,861.00 $ 309,566.00 359,072.00 90 323,164.80 17,998.00 $ 4,153,362.00 $ 3,738,025.80 $_---:3:::2,:.,7,~564=.0~0 $ 475,363.00 90 $ 427,826.70 $ _ _-=6::;:8,=:52:.::9.:;:.0:::..0 $ 22,044,561.00 $ 19,840,104.90 $_---:7..::94::.l,.::;94:,::8.:;:.0:::..0 $ 612,368.00 90 $ 149,540.00 100 $ _ _.:.;76:.;1:.:;,90=8.;.;;.0~0 $ 551,131.20 $ 149,540.00 15,442.00 7,014.00 700,671.20 $ _ _.:::2:::2,~456=.0~0 Total Fourteen Weighted and Media Center Programs $ 22,806,469.00 $ 20,540,776.10 $ ===o:8~1,:.;7,4;;04~.0~0 STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development $ 69,108.00 143,922.00 $ 69,108.00 $ 143,922.00 3,366.00 0.00 Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. See notes to the general purpose financial statements. $ 213,030.00 100 $ 213,030.00 $===3..,.3=6.6;,;;.0,;;.0 - 44 - SCHEDULE "5" EDUCATION TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 1.888,608.80 $ 2.202.070.71 $ 47.280.06 $ 2,249.350.77 5.026,083.40 5.307.719.86 209.980.83 5.517.700.69 $ 6.914.692.20 $ 7.509.790.57 $ 257.260.89 $ 7,767.051.46 $ 0.00 2,161.232.30 2.995.599.88 101.612.04 3,097,211.92 0.00 3,423,044.60 4.665,449.36 118,651.91 4.784.101.27 0.00 1,626,459.00 2.327.570.14 143,433.48 2,471,003.62 0.00 840,125.30 1,178.121.34 1.178.121.34 0.00 1.107.554.00 1,058,036.27 230,735.32 1,288,771.59 0.00 $ 16.073.107.40 $ 19,734,567.56 $ 851.693.64 $ 20.586.261.20 $ 3.724,427,00 $ 2,173.302.44 $ 940,478.14 1.440,848.45 268,171.88 4,051.22 1,104.49 $ 4,084.56 59.19 2,174.406.93 944,562.70 1,440,907.64 268,171.88 4,051.22 $ 3,724,427.00 $ 4,826,852.13 $ 5,248.24 $ 4,832,100.37 0.00 341,162.80 429,437.30 3,409.13 432,846.43 0.00 $ 4,065,589.80 $ 5.256,289.43 $ 8.657.37 $ 5,264.946.80 $ 496,355.70 $ 531,726,89 $ 673.66 $ _--:5:::3:::;2.::,40:;::0:.:,:.5::::,5 0,00 $ 20,635,052.90 $ 25.522,583.88 $ 861.024.67 $ 26.383.608.55 $ 566,573.20 $ 799,541,29 . $ 799,541.29 0,00 156,554.00 $ _......:2::::4:::,,5.:::::04:::::6~.5~3 245.046.53 0.00 $ 723,127.20 $ 799,541.29 $ 245.046.53 $ 1.044,587,82 $ 21.358.180.10 $ 26,322.125.17 $ 1.106.071.20 $ 27.428.196.37 $ ==============...;;,0';,;;,00= $ 72,474.00 143,922.00 $ 78,107,11 $ 78,107.11 112,398.05 112,398.05 $ ===2;,,;1,;;06,=3.96..0.=0 $ 190.505.16 $ 190,505.16 $ ===......==-.....;;2~5.~89;::;0~,84~ - 45 - SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS RUSSELL W. HINTON STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 June 7, 2001 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Barrow 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 Barrow County Board of Education as of and for the year ended June 30, 2000, and have issued our report thereon dated June 7, 2001. 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 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. We did not observe the taking ofeither the Federal donated commodities inventory or the purchased foods inventory at June 30, 2000, nor could we satisfy ourselves as to the accuracy ofthe amounts stated as inventories through alternative procedures. Compliance As part of obtaining reasonable assurance about whether Barrow 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. 2000YB-40A Internal Control Over Financial Reporting In planning and perfonning our audit, we considered Barrow County Board ofEducation's internal control over financial reporting in order to detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Barrow County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6071-00-01, FS-6071-00-06 and FS-6071-00-08. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the nonnal course of perfonning 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, ofthe reportable conditions described above, we consider items FS-6071-0001 and FS-6071-00-08 to be material weaknesses. This report is intended solely for the infonnation and use ofmanagement, members ofthe Barrow County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:gp 2000YB-40A Ru ell W. Hinton State Auditor RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S.w.. Suite 214 Atlanta. Georgia 30334-8400 June 7, 2001 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board ofEducation and Superintendent and Members of the Barrow 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 ofBarrow County Board ofEducation with the types ofcompliance requirements described in the Us. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2000. Barrow County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility ofBarrow County Board ofEducation's management. Our responsibility is to express an opinion on Barrow County Board of Education's compliance based on our audit. We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A- 133, 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 Barrow 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 Barrow County Board of Education's compliance with those requirements. 2000SA-55A As described in items FA-6071-00-01, FA-6071-00-02 and FA-6071-00-03 in the accompanying Schedule ofFinding~and Questioned Costs, Barrow County Board ofEducation did not comply with requirements regarding Equipment and Real Property Management, Reporting and Special Tests and Provisions that are applicable to the following programs: 84.027 Individuals with Disabilities Education Act - Part B - Special Education - Flow Through; 84.173 Individuals with Disabilities Education Act - Part B - Special Education - Preschool; 84.027 Individuals with Disabilities Education Act - Part B - Special Education - Special Projects; and 84.01 0 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies. Compliance with such requirements is necessary, in our opinion, for Barrow County Board of Education to comply with requirements applicable to those programs. In our opinion, except for the noncompliance described in the preceding paragraph, the Barrow 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, 2000. Internal Control Over Compliance The management of Barrow 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 Barrow 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-B3. We noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Barrow County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FA-6071-00-01, FA-6071-00-02 and FA-6071-00-03. 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 of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider items FA-6071-00-02 and FA-6071-00-03 to be material weaknesses. 2000SA-55A This report is intended solely for the infonnation and use of management, members of the Barrow County Board ofEdu.cation, 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. RWH:gp 2000SA-55A Respectfully submitted, ~. R ssell W. Hinton State Auditor SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS BARROW COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 ., PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6071-98-01 FS-6071-99-01 FS-6071-99-02 FS-6071-99-03 FS-6071-99-04 FS-6071-99-05 FS-6071-99-06 Further Action Not Warranted Unresolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses CORRECTIVE ACTIONIRESPONSES GENERAL LEDGER Unrecorded Outstanding Loan Finding Control Number: FS-6071-99-01 This loan was made on August 28, 1998 for the purchase of the Highland Drive (Administrative Annex) property. This loan was structured as a normal five-year note without provision for State ofGeorgia temporary loan provisions. At this point, this note would have to be restructured or paid offto change existing provisions. Given the terms and favorable interest rate ofthis loan, the Barrow County School District will continue to carry this loan until paid offon February 1, 2003. Last payment was made on 02/16/2001. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6201-99-06 Due to current staffing limitations and budgetary limitations, the Barrow County School District does not intend to pursue the recording of general fixed assets on the financial statements at this time. SECTION IV . FINDINGS AND QUESTIONED COSTS BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Barrow 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 Barrow County Board of Education disclosed financial statement reportable conditions related to the following control categories. Cash and Cash Equivalents Revenues/Receivables/Receipts General Fixed Assets Expenditures/Liabilities/Disbursements General Ledger All of the reportable conditions described above include items that are considered to be material weaknesses. 3. Noncompliance Material to the Financial Statements The audit of the Barrow County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Barrow County Board ofEducation disclosed reportable conditions in internal control over major programs for the following compliance requirements. Reporting Special Tests and Provisions Equipment and Real Property Management Of the reportable conditions described above, Reporting and Special Tests and Provisions are considered to be material weaknesses. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Barrow County Board ofEducation's report on compliance with requirements applicable to major programs was qualified. 6. Audit Findings Required to be Reported by Section .51 OW of OMB Circular A-B3 The Barrow County Board of Education's audit disclosed audit findings required to be reported by section .510(a) ofOMB Circular A-B3. These audit findings are included in section IV of this report. - 1- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 I SUMMARY OF AUDITOR'S RESULTS 7. Major Programs Federal awards audited as major programs are as follows: 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.027 Individuals with Disabilities Education Act - Part B - Special EducationFlow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool 84.027 Individuals with Disabilities Education Act - Part B - Special EducationSpecial Projects 8. IYPe "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Barrow County Board ofEducation was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education. n FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUIVALENTS REVENUESIRECENABLESIRECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-6071-00-01 Accounting procedures of the Barrow County Board of Education were insufficient to provide adequate internal controls over Cash and Cash Equivalents, RevenueslReceivableslReceipts, ExpendituresILiabilitiesIDisbursements and General Ledger control categories as noted below: Cash and Cash Equivalents Bank statements for the operating, construction, bond and child nutrition accounts were not reconciled to the general ledger for any month of the fiscal year. One hundred and eleven audit adjustments totaling $-1,468,986.49 (net) were made in an attempt to reconcile the accounting records with the bank statements. - 2- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-6071-00-01 Cash and Cash Equivalents (continued) Procedures performed by the auditors to reconcile the bank statements to the general ledger at June 30, 2000, noted the following deficiencies: (1) Numerous errors were made in recording deposits to the general ledger; some bank deposits were not recorded at all. (2) The Board had not determined which payroll checks cleared the bank, therefore, they were unable to produce an accurate outstanding check list of payroll activity for the operating account. (3) The outstanding check list for the operating account was inaccurate and included checks which were not outstanding. (4) The following bank accounts had unreconciled variances between the corrected book balances for cash and the bank statement balances as follows: Operating Account Construction Accounts Child Nutrition Account Bond Accounts $ 3,208.24 -30,042.56 -11,139.51 852.87 No adjustments were made to the fmancial statements for these unreconciled variances. Revenues/Receivables/Receipts (1) The Board failed to record Ad Valorem Tax in the amount of $430,252.91 in the General Fund and $26,261.30 in the Debt Service Fund. -3- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 n FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUNALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-6071-00-01 Revenues/Receivables/Receipts (continued) (2) The Board failed to record Intangible tax in the amount of$129,161.52 in the General Fund and $9,792.48 in the Debt Service Fund. (3) Real Estate Transfer Tax in the amount of $108,827.94 was not recorded by the Board. (4) The Board recorded duplicate deposits in the amount of$2,431 ,665.43 in the General Fund. (5) The Board failed to record interest earned on demand deposits as indicated on the bank statements in the amount of$15,532.33. (6) The Board failed to record revenue from the Georgia State Financing and Investment Commission in the amount of $592,770.60. (7) The Board failed to record interest in the amount of$128,828.90 earned on deposits in Local Government Investment Pool. (8) The Board failed to record bond investment interest earned in the amount of $149,696.06. (9) The Board failed to record other revenue in the amount of$63,416.90. (10) The Board failed to record interest earned on certificates ofdeposit in the amount of $201,521.13. (11) The Board failed to record Special Purpose Local Option Sales Tax revenue in the amount of $4,803,892.78. (12) The Board failed to record State revenue in the amount of $8,000.00. Adjustments were made to the financial statements for the above revenues. -4- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 .. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUNALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-607l-00-0l ExpenditureslLiabilitieslDisbursements (1) The Board failed to record expenditures of $20,449.41 for architect expense and $1,261.54 for construction expense. (2) The Board failed to record $135.07 in bank fees as reflected on the bank statements. (3) The Board failed to record payments on Bond Debt in the amount of $5,031 ,590.00. Adjustments were made to the financial statements for the above expenditures. General Ledger (1) Numerous posting errors in balance sheet, revenue and expenditure accounts were identified and corrected during the course of our work. (2) Journal entries were made without proper supporting documentation or explanation and without adequate supervisory review. (3) The Nonexpendable and Agency Funds bank accounts were not included in the general ledger. (4) The Boards general ledger beginning balances at July 1, 1999 did not agree with the ending balances at June 30, 1999. Adjustments were made to the General Fund in the amount of$7,659.46, the School Food Services Fund in the amount of$2,924.82 and the Federal Programs Fund in the amount of $9,930.34 to reconcile these variances. (5) The Board failed to record investments in the amount of $3,596,413.32. An audit adjustment was made to record these investments on the Board's financial statements. -5- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUIVALENTS REVENUESIRECEIVABLESIRECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Finding Control Number: FS-6071-00-01 These deficiencies occurred because ofmanagement's failure to establish procedures to analyze and reconcile balances on the general ledger with supporting records and management's failure to ensure journal entries made to the general ledger contained adequate documentation and proper explanations~ Deficiencies in the accounting procedures were discussed with the Superintendent. In addition, the accounting personnel of the Board were given instructions in proper accounting procedures which include the necessity ofpromptly reconciling bank statements, recording adjustments and deposits to the accounting records, determining the status of issued checks and performing an administrative review ofall bank reconciliations. The Board should establish appropriate procedures to ensure that cash is recorded, balanced and reviewed on a monthly basis and that detailed records supporting the general ledger are complete, accurate and reliable. In addition, procedures should be established to ensure journal entries are properly documented and adequately reviewed prior to recording to the general ledger. CASH AND CASH EQUIVALENTS Uncollateralized Deposit Nonmaterial Noncompliance Finding Control Number: FS-6071-00-02 As of June 30, 2000, the Barrow County Board of Education failed to have its bank balances fully collateralized as provided for by the Official Code of Georgia Annotated Section 45-8-12 which states, in part, as follows: "The collecting officer or officer holding public funds may not have on deposit at anyone time in any depository for a time longer than ten days a sum ofmoney belonging to the public body when such depository has not given bond to the public body as set forth in this code section. The aggregate ofthe face value ofsuch 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 of the amount of deposit insurance." - 6- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CASH AND CASH EQUNALENTS Uncollateralized Deposit Nonmaterial Noncompliance Finding Control Number: FS-607l-00-02 This noncompliance occurred because of management's failure to adequately monitor the collateralization of balances at the individual banks. The Board should implement adequate procedures to monitor the collateralization ofbank balances to ensure compliance at all times with State laws governing deposits and investments. , Management's Response: We concur with this finding. District personnel will contact the financial institutions involved and attempt to have them provide appropriate collateral for all Board deposits in the future. EXPENDITURES/LIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $25,890.84 Finding Control Number: FS-607l-00-03 The Barrow County Board of Education reported to the Georgia Department of Education on DE Form 0420 underexpenditures of Quality Basic Education (QBE) funds in the amount of$25,890.84 for the operations ofthe StaffDevelopment Programs. This underexpenditure occurred because the Board expended less than the required minimum expenditure for this QBE program. These funds should be returned to the Office of Treasury and Fiscal Services. Management's Response: We concur with this finding. Stipends earned in one fiscal period were paid in another fiscal period and accounting for these stipends was not correct. This finding will be resolved through a future increase in the local fair share portion of QBE allotments. GENERAL LEDGER DE Form 0420 Not Supported by Accounting Records Nonmaterial Noncompliance Finding Control Number: FS-607l-00-04 A comparison of the Barrow County Board of Education's DE Fonn 0420 report ("General Fund QBE Program Expenditure Summary and Detail Reports") to the accounting records revealed that the expenditures reported on the DE Form 0420 were not supported by the accounting records. -7- - - - - - - - ----- - BARROW COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 , -, n FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER DE Form 0420 Not Supported by Accounting Records Nonmaterial Noncompliance Finding Control Number: FS-6071-00-04 Section n, Chapter 24, of the Financial Management for Georgia Local Units of Administration as published by the Georgia Department ofEducation requires that program expenditure controls in the accounting records agree with the DE Form 0420 report. This condition occurred because management failed to reconcile amounts reported on DE Form 0420 with the accounting records. Procedures should be established by the Board to ensure that expenditures reported on DE Form 0420 are reconciled to the accounting records prior to submission to the Georgia Department ofEducation. The Georgia Department ofEducation should review this matter and determine if a reclaim of Quality Basic Education funds is required. Management's Response: We concur with this fmding. The financial accounting system used by the school district for fiscal year 1999-2000 did not accurately account for nor process district financial transactions. This condition made reconciliations and comparisons impossible. During fiscal year 2000-2001, this financial system was replaced. GENERAL LEDGER Unrecorded Outstanding Loan Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-00-05 On December 31, 1999, the General Fund had an unrecorded loan outstanding in the amount of $193,674.51. This loan was not repaid at December 31, 1999 as required by Article IX, Section V, Paragraph V of the Constitution of the State of Georgia which provides, in part, as follows: "The governing authority ofany county, municipality or other political subdivision ofthis state may incur debt by obtaining temporary loans in each year to pay expenses. .. Such loans shall be payable on or before December 31 of the calendar year in which such loan is made...". Audit procedures were used to prepare an audit adjustment to the financial statements to record the outstanding loan payable of $139,674.51 at June 30, 2000. The Board's failure to record the loan occurred because the Board did not establish accounting procedures to ensure compliance for maintenance of liabilities within the General Fund as required by Chapter 35 of the Financial Management for Georgia Local Units ofAdministration. Repayment ofthe loan should be made in conformity with the above quoted constitutional provision. - 8- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER Unrecorded Outstanding Loan Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-00-05 Management's Response: We concur with this finding. This loan was made on August 28, 1998 for the purchase of the Highland Drive (Administrative Annex) property (peoples Bank Loan #100104827). This loan was structured as a normal five-year note without provision for State of Georgia temporary loan provisions. At this point, this note would have to be restructured or paid off to change existing provisions. Given the terms and favorable interest rate of this loan, the Barrow County School District will continue to carry this loan until paid off on February 1, 2003. GENERAL LEDGER Failure to Refund Unearned Lottery Funds Reportable Condition Amount: $133,925.31 Finding Control Number: FS-6071-00-06 An examination of the Board's compliance with regulations for the Lottery Program, PreKindergarten Program and Computers in the Classroom Program revealed that the Board failed to return unearned Lottery funds. An unearned balance totalling $133,925.31 remained at June 30, 2000 per the Board's accounting records. This deficiency occurred because personnel failed to accurately record expenditures on the completion report. Appropriate procedures should be implemented to ensure that completion reports are submitted with accurate data. The Board should submit corrected completion reports with documentation supporting expenditures and return any unearned Pre-Kindergarten Program funds to the Office ofSchool Readiness and any unearned Computers in the Classroom Funds to the Georgia Department of Education. Management's Response: We do not concur with this finding. As noted previously, the financial accounting system used by the school district for fiscal year 1999-2000 did not accurately account for nor process district financial transactions. However, this financial system did accurately reflect revenues and expenditures. Expenditure reports were used for the preparation ofthe Lottery Program, PreKindergarten, completion report. These expenditure reports, along with other supporting reports, validate the expenditure ofthese funds (total of$605,916.92 expended during fiscal year 1999-2000 which exceeds funds drawn down). - 9- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 ~. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER Failure to Refund Unearned Lottery Funds Reportable Condition Amount: $133,925.31 Finding Control Number: FS-607l ~00-06 It is our understanding that State Department ofAudits personnel used General Ledger reports during audit fieldwork and that may provide the explanation for these differences. The auditors were provided with copies ofthese completion reports and our supporting documentation. Although it is probably included in the audit workpapers, a copy of this documentation will be mailed to your office via U. S. Mail for your review. GENERAL LEDGER Detail of Salary and Travel Not Reconciled to the General Ledger Nonmaterial Noncompliance Finding Control Number: FS-6071-00-07 The detail of salaries and travel by individual submitted to the Department of Audits by the Board was not reconciled to the General Ledger as presented for audit. After performing extensive audit procedures, an unidentified variance of $(-)153,814.34 for salaries and $(-)877.57 for travel remained between the detail and the general ledger. These amounts are reflected in the Schedule of Salaries and Travel, which is issued under separate cover. This condition occurred because management did not ensure that amounts submittedto the Georgia Department of Audits were reconciled to the Board's general ledger. Administrative procedures should be implemented to ensure that the detailed listing of salaries and travel is reconciled to the Board's general ledger prior to submission to the Department of Audits. Management's Response: We concur with this finding. The financial accounting system used by the school district for fiscal year 1999-2000 did not accurately account for nor process district financial transactions. This condition made reconciliations and comparisons impossible. During fiscal year 2000-2001, this financial system was replaced. - 10- BARROW COUNTY BOARD OF EDUCA;f10N SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 2000 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-6071-00-08 The Barrow 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 of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory 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. Management's Response: We concur with this finding. Due to current staffmg limitations and budgetary limitations, the Barrow County School District does not intend to pursue the recording ofgeneral fixed assets on the financial statements at this time. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Reportable Condition Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-6071-00-01 The equipment and real property management records maintained by the Board for the Special Education Cluster (CFDA 84.027 and 84.173) were incomplete and failed to meet property management standards set forth in chapter 41 ofthe Financial Management for Georgia Local Units of Administration (FMGLUA), issued by the Georgia Department of Education. The equipment records as presented for audit failed to include the condition ofequipment and ultimate disposition, including the date and manner ofdisposal. The annual physical inventory count was not reconciled to the property records maintained at the Central Office to ensure the accuracy ofequipment records. - 11 - BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Reportable Condition Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-6071-00-01 These conditions occurred because management failed to maintain complete equipment and real property management records and failed to ensure that physical inventory counts were properly performed and reconciled to property management records. An inventory system should be implemented that provides for complete inventory records and identification of all equipment as outlined in FMGLUA. An annual physical count should be performed and reconciled to the equipment records to ensure the accuracy of inventory records. Management's Response: We concur with this finding. An inventory system will be implemented during fiscal year 2001-2002 for this equipment. In addition, procedures will be developed for annual physical counts of this equipment. REPORTING Erroneous Project Completion Reports Reportable Condition - Material Weakness Material Noncompliance U. S. Department of Education Through Georgia Department of Education Amount: $176,065.97 Finding Control Number: FA-6071-00-02 The project completion reports and accounting records for various Federal programs erroneously included expenditures that were reported on the prior year's completion reports and accounting records, did not include journal entries made by the Board and did not include current year salary and/or benefits accruals. These conditions occurred because the Board failed to correctly account for prior year accruals, current yearjournal entries and salary/benefit accruals as set forth in Chapter 41 of the Financial Management for Georgia Local Units of Administration (FMGLUA). These accounting deficiencies resulted in unexpended grant balances in the following programs: - 12- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS REPORTING Erroneous Project Completion Reports Reportable Condition - Material Weakness Material Noncompliance U. S. Department of Education Through Georgia Department of Education Amount: $176,065.97 Finding Control Number: FA-6071-00-02 Elementary and Secondary Education Act Title I - Grants to Local Educational Agencies (CFDA 84.010) Title II - Eisenhower Professional Development (CFDA 84.281) Title ill - Technology Literacy Challenge Fund Grants (CFDA 84.318) Safe and Drug-Free Schools (CFDA 84.186) Amount $135,829.00 2,116.22 14,026.60 1,039.79 Special Education Cluster Individuals with Disabilities Education Act Part B - Special Education Flow Through (CFDA 84.027) Preschool (CFDA 84.173) Special Projects (CFDA 84.027) 2,066.91 6,724.58 14,262.87 $176IQ~~!97 Procedures should be implemented to ensure that completion reports are accurate and are reconciled to the accounting records. The Board should submit corrected completion reports with supporting documentation for expenditures to the Georgia Department ofEducation for the above grants. The Georgia Department ofEducation should review these reports and determine ifa reclaim offunds is appropriate. Management's Response: We do not concur with this finding. As noted previously, the financial accounting system used by the school district for fiscal year 1999-2000 did not accurately account for nor process district financial transactions. However, this financial system did accurately reflect revenues and expenditures. Expenditure reports were used for the preparation ofthese completion reports. These expenditure reports, along with other supporting reports, validate the expenditure of these funds. - 13 - BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS REPORTING Erroneous Proj ect Completion Reports Reportable Condition - Material Weakness Material Noncompliance U. S. Department of Education Through Georgia Department of Education Amount: $176,065.97 Finding Control Number: FA-6071-00-02 It is our understanding that State Department ofAudits personnel used General Ledger reports during audit fieldwork and that may provide the explanation for these differences. The auditors were provided with copies ofthese completion reports and our supporting documentation. Although it is probably included in the audit workpapers, a copy of this documentation will be mailed to your office via U. S. Mail for your review. In addition, some specific comments regarding some of these programs include: Special Education Cluster. It appears that the voiding ofsome expenditure checks and the re-issuance in another period may have adversely affected General Ledger totals for these programs. Title I. It appears that salary accruals on the General Ledger were not accurately reflected and caused this difference. Title n. It appears that some program expenditures were missed. Title Ill. It appears that Program 1822 expenditures were not included. Staffdevelopment expenditures for the Technology Literacy Challenge Grant were recorded in Program 1822, not Program 1820. Safe and Drug-Free Schools. It appears that the voiding of some expenditure checks and the re-issuance in another period may have adversely affected General Ledger totals for this program. SPECIAL TESTS AND PROVISIONS Failure to Maintain Documentation for Schoolwide Project Reportable Condition - Material Weakness U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-6071-00-03 The approved application for the Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies (CFDA 84.010) Program indicated that the Bethlehem and Holsenbeck Elementary Schools were approved for "Schoolwide" projects. However, the Board failed to document the "Schoolwide Program School Plan" for each school and did not follow Federal - 14- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 -, ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS SPECIAL TESTS AND PROVISIONS Failure to Maintain Documentation for Schoolwide Project Reportable Condition - Material Weakness U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-6071-00-03 regulations as set forth in the Policy Guidance for Title I, Part A - Improving Basic Programs Qperated by Local Educational Agencies when completing the Title I application, which resulted in the two aforementioned schools failing to meet the 50% eligibility requirement for the "Schoolwide Plan" . This condition was a result of the Board's failure to maintain appropriate documentation for the "Schoolwide Plan". The Board should establish procedures to ensure that proper documentation is maintained in accordance with Title I regulations for schools which participate in the "Schoolwide" project. The Georgia Department ofEducation should review this matter to determine ifa reclaim of funds is appropriate. Management's Response: We do concur with this finding. The school district will review procedures in this area to ensure that proper documentation is maintained in accordance with Title I Regulations. - 15 -