Barrow County Board of Education, Winder, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001, June 30, 2001

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BARROW COUNTY BQARDOF EDUCATION

- TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES "

4

C

COMBINED STATEMENT OF REVENUES, E~ENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

8

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

9

F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

10

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

26

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

28

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

30

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

32

DEBT SERVICE FUND

K

COMBINING BALANCE SHEET

34

I

L

COMBINING STAifEMENT OF REVENUES, EXPENDITURES

I

'

AND CHANGES IN FUND BALANCES

35

I

BARROW COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

EXHIBITS

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

40

2 SCHEDULE OF STATE REVENUE

42

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

45

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

46

5

BY SITE

47

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

BARROW COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTIONm 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) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w.. Suite 214 Atlanta. Georgia 30334-8400
June 3t 2002

Honorable Roy E. Barnest 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 Educationt as of and for the year ended June 30t 2001 t 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 paragrapht 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, 2001, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.

2001ARL-13

As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board ofEducation recognized as expenditures, in the year ended June 30, 2001, a
portion of salaries and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 2000. Also funds received from the Georgia Department of Education for the State's share of these salaries .and related benefits were recorded as revenue in the year under review. 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.
* As discussed in the Note 1 to the financial statements, the School District was not able
to identify $988,969.70 in adjustments posted to fund balance accounts for General and Special Revenue Funds. These variances are attributed to problems arising from financial accounting system software conversion by the School District during fiscal year 2001.
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 ofthe food service inventories as discussed in the third paragraph, and except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Barrow County Board of Education as of June 30, 2001, and the results of its operations and the cash flows of its 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 3, 2002, on our consideration ofthe Barrow County Board ofEducation's internal control over fmancial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and
2001ARL-13

grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Barrow County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through N) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effect ofadjustments, ifany, on the Special Revenue Fund, as might have been determined 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 information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully SUbmi~~

RWH:as 2 0 0 1ARL-13

Rus 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, 2001

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 Compensated Absences

GENERAL fUND

GOVERNMENTAL fUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

fUND

fUND

$ 7,393,137.66 $

759,497,14 $ 10,850,875.25

110.77

6,075,275.15

985,936.39

980,287.90

47,551.01 26,055.22

Total Assets

$ 13,468,412.81 $ 1,819.039.76 $ 11 ,831 ,273.92

LIABILITIES ANP fUNP EQUITY
LIABILITIES
Accounts Payable Salaries Payable Short-Term Debt Expired Grant Balances Payable Contracts Payable Retainages Payable funds Held for Others Capital Lease Agreements Compensated Absences General Obligation Bonds Payable
Total Liabilities
fUND EQUITY
fund Balances Reserved for Bus Replacement funds for Debt Service for Endowment Corpus for Expired Grant BalanceslQuestioned Costs for Inventories food Donated Commodities Purchased Food for Purpose of Bond Issue for SPLOST Projects Unreserved Undesignated
Total fund Equity

$ 2,494,060.63 $ 4,791,441.45 105,939.36 5,911.53

219,162.15 $ 342,308.52
50,284.20

47,942.06 1,215,430.56

$ 7,397,352.97 $

611,754.87 $ 1,263,372.62

$

148,049.15

$

257,601.13

47,551.01 26,055.22
$

9,722,483.84 845,417.46

5,923,010.69

876,077.53

0.00

$ 6,071 ,059.84 $ 1,207,284.89 $ 10,567,901.30

Total Liabilities and Fund EqUity

$ 13,468,412.81 $ 1,819,039.76 $ 11 ,831 ,273.92

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

$ 6,183,199.36 $

22,725.85

37.74

58,375.52

74,191.49

11.48

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2001

JUNE 30, 2000

$ 25,209,435.26 $ 9,167,334.93

58,524.03

3,750,109.00

8,115,702.41

2,601,407.12

$ 6,257,428.59

47,551.01 28,055.22
6,257,428.59

56,449.83 17,353.60
7,119,463.47

27,302,571.41 466,732.78 139,482.33

27,302,571.41 466,732.78 139.482.33

20,260,536.53 614,062.24 82,044.81

$ 6,257,428.59 $

81,112.85 $ 34,166,215.11 $ 67,623,483.04 $ 43,668,761.53

$

311.17

$ 2,761,476.01 $

312,536.43

5,133,749.97

368,020.40

105,939.36

139,674.51

56,195.73

25,908.37

1,050.00

1,215,430.56

1,303,664.62

11,844.32

11,844.32

10,468.04

$

466732.78

466,732.78

614,062.24

139,482.33

139,482.33

82,044.81

33,560,000.00

33,560,000.00

27,380,000.00

$

12,155.49 $ 34,166,215.11 $ 43,450,851.06 $ 30,237,429.42

$ 6,257,428.59 $

14,914.68

0.00 $ 6,257,428.59 $

54.042.68 68,957.36

$

148,049.15

6,257,428.59 $ 7,119,463.47

14,914.68

14,914.68

257,601.13

335,882.12

47,551.01 26,055.22 9,722,483.84 845,417.46

56,449.83 17,353.60 489,966.10

6,853,130.90

5,397,302.31

$ 24,172,631.98 $ 13,431 ,332.11

$ 6,257,428.59 $

81,112.85 $ 34,166,215.11 $ 67,623,483.04 $ 43,668,761.53

- 3-

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

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Enterprise Operations Community Services Operations
Capital Outlay Debt Service
Principal Interast Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from General Obligation Bonds Par Value
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
FUNp BALANCE JULY 1
Software Conversion Variances Food Inventory Net Change in Period
Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 39,152,827.35 $
16,992,430.17 1,107,168.15
$ 57,252,425.67 $

962,233.88 3,024,896.73
1,381,361.07
5,368,491,68

$ 40,380,425.76 $
1,282,389.34 2,687,772.77
530,208.21 3,997,188.74
761,959.51 3,474,838.38 2,444,312.93
633,822.46
271.78
359,279.91 .
147,329.46 36,707.58

1,871,095.91 188,625.32 63,588.82 114,758.83
31,368.00
1,723.52 229,298.22 2,851,067.60
1,102.30

$ 56,736,506.83 $

$

515,918.84 $

5,352,628.52 15,863.16

$

$

3,204.02

$

-3,204.02 $

3,204.02 3,204.02

$

512,714.82 $

4,770,390.22

787,954.80

19,067.18 987,005.61
201,014.90
8,898.82 -8,701.62

FUNP BALANCE JUNE 30 The notes to the general-purpose financial statements' are an integral part of this statement.
-4-

$ 6,071 ,059.84 $ 1,207,284.89

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

885,284.10

$ 41,000,345.33 $ 34,202,811.43

3,024,896.73

3,063,586.62

3,258,009.04 $ 3,332,542.37

23,582,981.58

21,025,834.26

130,390.03

298,617.11

2,917,536.36

2,387,279.46

$ 4,273,683.17 $ 3,631,159.48 $ 70,525,760.00 $ 60,679,511.77

$ 42,251,521.67 $ 32,162,503.39

$

403,022.17

1,471,014.66 2,751,361.59
644,967.04 3,997,188.74 1,164,981.68 3,506,206.38 2,444,312.93
635,545.98 229,298.22 2,851,339.38

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

3,075,097.66

1,102.30 3,434,377.57

373,197.61 11,493,935.20

$ 3,820,000.00 1,390,822.50

3,967,329.46 1,427,530.08

3,577,566.93 1,567,327.97
3,235.00

$ 3,478,119.83 $ 5,210,822.50 $ 70,778,077.68 $ 67,411,406.38

$

795,563.34 $ -1,579,663.02 $

-252,317.68 $ -6,731,894.61

$ 9,734,590.64 $
-452,218.78 $ 9,282,371.86 $

265,409.36 $ 452,218.78

10,000,000.00 $
455,422.80 -455,422.80

717,628.14 $ 10,000,000.00 $

414,824.82 630,442.40 -630,442.40
414,824.82

$ 10,077,935.20 $ 489,966.10

-862,034.88 $ 9,747,682.32 $ -6,317,069.79

7,119,463.47

13,366,825.40

19,673,213.72

988,969.70

20,514.62

8,898.82 -8,701.62

-4,469.98 -5,363.17

$ 10,567,901.30 $ 6,257.428.59 $ 24,103,674.62 $ 13,366,825.40

-5-

BARROW COUNTY BOARP OF EDUCATION COMBINEP STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2001

EXHIBIT "C;"

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, 2001

EXHIBIT"D"

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
FUND BALANCE JUNE 30

BARROW COUNTY, GEORGIA 'BOARD OF EDUCATlqN
SCHOLARSHIP FUND,
INCORPORATED

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

$

2,050,00 $

2,050.00 $

1,010.00

$ $ $
$
.. $

6.51 $ 1,060.00
1,066.51 $
983,49 $

6.51 $ 1,060.00
1;066.51 $
983.49 $

55.51 1,175.00
1,230.51
-220.51

3,467.16 4,450.65 $ 64,506.71

3,467.16 4,450.65 $ 64,506.71

2,725.04 2,504.53 62,002.18

68,957,36 $

68,957,36 $

64,506.71

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 3il 2001

EXHIBIT"E"

BARROW COUNTY, GEORGIA BOARD OF EDUCATION
SCHOLARSHIP FUND,
INCORPORATED

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

Cash Flows from Operating Activities: Donations Cash Paid for Dues and Fees Cash Paid for Scholarships

$

2,050.00 $

2,050.00 $

1,010.00

-6.51

-6.51

-55.51

-1,060.00

-1,060.00

-1,175.00

Net Cash Provided (Used) by Operating

Activities

$

983.49 $

983.49 $

-220.51

Cash Flows from Investing Activities:

Purchase of Investment Securities

$

Proceeds from Sale and MatUrity of Investments

Interest ReceiVed on Investments

-57,118.83 $ 53,695.67
3,467.16

-57,118.83 $ 53,695.67
3,467.16

-53,695.67 51,029.58
2,725.04

Net Cash Provided (Used) by Investment

Activities

$

44.00 $

44.00 $

58.95

Net Increase (Decrease) in Cash

$

1,027.49 $

1,027.49 $

-161.56

Cash and Cash Equivalents - JUly 1

10,811.04

10,811.04

10,972.60 .

Cash and Cash Equivalents - June 30

$

11,838.53 $

11 ,838.53 $ ===1=0=,=,8=1=1.=04=

The notes to the general-purpose financial statements are an integral part of this statement. - 9-

BARROW COUNTY BOARD OF EDUCATION

EXHmIT "Fit

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REPORTING ENTITY

The Barrow County Board ofEducation (School District) was established under the laws ofthe State
of Georgia and operates' under the guidance of a school board elected by the voters and a
a Superintendent appointed by the Board. The School District is organized as separate legal entity
and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other
entity. Accordingly, the School Distric. t. is a p.rimary government and consists of all the organizations that compose its legal entity.

FUND ACCOUNTING - .

The School District uses funds and an account group to report on its financial position and the results

ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial

management by segregating transactions related to certain governmental functions or activities. A

fund is a separate accounting entity with a self-balancing set of accounts. An account group is a

financial reporting device designed to provide ac~ountabilityfor certain assets and liabilities that are

not recorded in the funds because they do not directly affect expendable available financial

resources.

".

General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.

Although "school activity accounts" are maintained at the individual schools, neither the assets, .liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.

The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:

GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include:

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

- 10:-

.. ,

:.1

BARROW COUNTY BOARD'OF EDUCATION
NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 3(j, 2061" ','" .

EXHmIT "F"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, generallong-tenil 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:
NONEXPENDABLE TRUST FUND 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, accrued compensated absences 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.
- 11 -

BARROW COUNTY BOARD OF EDUCATION

EXHmIT "F"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note I: 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 ofthese 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. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

Expenditures are generally recognized when the related fund liability is incurred.

For fiscal year 2001, the School District changed financial accounting systemson March 1,2001. As part of the conversion process, the School District recorded unidentified adjustments to fund balance totalling $988,969.70.

For fiscal year 2001, the School District changed its method of accounting for the final two

payments on one hundred and ninety day contracts and for the related revenue due from the State to

fund these contracts. Adjustments have been made in the fiscal year 2001 financial statements to

record expenditures for salaries and fringe benefits earned by employees thfough June 30, 2001,

(even though paid in July and August 2001) and the related revenue due from the State to fund these

contracts. This change is in accordance with generally accepted accounting principles. No

adjustment was made for the similar salaries and benefits earned in fiscal year 2000 but recorded in

fiscal year 2001 as this information Was not readily available.

I..

.

The net effect ofthe above accounting treatment resulted in the accompanying financialstatemerits reflecting fourteen months of expenditures for a majority of General Fund salaries and fringe benefits and the related revenue due from the State to fund these contracts. 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.

.; 12-

BARROW COUNfY BOARD OF EDUCATION

EXHIDIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30: 200i'"

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

.

BUDGET

The Barrow County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget b)lthe Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as . necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-1 67(c); to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year.:.end.

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia

- 13-

BARROW COUNTY BOARD OF EDUCATION

EXHffiIT "F"

NOTES TO mE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Annotated Section 36-83..4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:

(1) Obligations issued by the State of Georgia or by other states,

(2) Obligations issued by the United States government,

. (3) Obligations fully insured or guaranteed by the United States government or a United

States government agency,

,
/

(4) Obligations of any corporation of the' United States government,

(5) Prime banker's acceptances,

.

,

. (6) The Local Government Investment Pool administered by the State of Georgia, Office of

Treasury and Fiscal Services,

(7). Repurchase agreements, and

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

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 allowarice for uncollectible receivables.

.,

PROPERTY TAXES

The Barrow County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on October 20, 2000 (levy date). Taxes were due on December 20, 2000 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue.in fiscal year 2001. The Barrow County Tax Commissioner bills'and collects the property taxes for the SchoolDistrict, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $16,254,532.89 and for school bonds amounted to $986,848.87.

" t ':;: .

-

~z.

~:~~' l' .,. ,'~ .

4.",' :~

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

BARROW COUNTY BOARD OF EDUCATION

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30,2001

EXHffiIT "F"

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Tax millage rates levied for the 2000 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

19.50 mills -.lJQ, mills

20.60 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 $5,568,968.80 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection ofthis tax once an additional $1,237,987.63 has been collected or on June 30, 2002, whichever occurs first.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time 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 ofthe School District 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.

- 15 -

BARROW COUNTY BOARD OF EDUCAnON

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. 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 of these bonds is recorded in the General Long-Tenn Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfundtransactions:
Reimbursements of expenditures/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.
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 confonnity 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 th~ comparative data to corifonn to the current year classifications. .
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Ann~tated (OCGA) Section 45:-8-12 provides that there shall not be on deposit at any time in any depositqry for a time longer than ten days a sum ofmoney which has not been securedby 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.

- 16-



iJj'. >l .. .~ of '.'.!~1' ';'. -,.\,~:'.~ 10 ,

BARROW COUNTY BOARD OF EDUCATION

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE30;.2001.. :~.

EXHIDIT "F"

Note 2: DEPOSITS AND INVESTMENTS
Acceptable security for deposits consists of anyone of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
. (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $25,785,576.06. The amounts ofthe total bank balances are classified into three categories of credit risk:
Category I - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

- 17 -

. BARROW COUNTY BOARD OF EDUCATION

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS

The School District's deposits are classified by risk category' at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 2,821,129.95

2

22,964,446.11

3

0.00

Total

$25.785576.06

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

Category 1:- Insured or registered, or securities held by the School District or the School . District's agent in the School Di~trict's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name.
Category 3 - Uninsured or unregistered, with securities-held by the counterparty, or by its trust department or agent but not iIi the School District's name.

At June 30, 2001, the carrying value ofthe School District's total investments was $148.51 which is mat~rially the same as fair value. The investments are classified as to risk categories as follows:

Type of Investment

U. S. Government

$

, Local Government
Investment Pools

.' . Risk Categories 2

37.74 $

000 $

Carrying

3

Amount

000 $ . '37.74 $

Fair Value
37.74

110.77

110.77

Total Investments

$

14851 $

148,51

The carrying amo~ts shown above inc!udes amounts maintain~d in an investment pool by the State of Georgia, Office ofTreasury and Fiscal Services in which the School District own~ no identifiable securities. The investment policy ofthe State of Georgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investment~. A description ofthe Primary Liquidity Portfolio is
as follows:

- 18 -

: : .....

BARROW COUNTY BOARD OF EDUCATION

EXHmIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30.2001

Note 2: DEPOSITS AND INVESTMENTS
The Primary Liquidity Portfolio consists ofGeorgia 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 company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value 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 manmty for Georgia Fund 1 on June 30, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.
Note 3: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories
Note 4: RISK MANAGEMENT
The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.
The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The School District has neither significantly reduced coverage for these risks.nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

- 19-

BARROW COUNTY BOARD OF EDUCATION

EXHffiIT "F"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

, JUNE 30, 2001

Note 4: RISK MANAGEMENT

The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any lossesrelated to this risk in the past three years.

The School District is self-insured with regard to unemployment compensation claims. The School

District accounts for claims within the General Fund with expenditure and liability being reported

when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated.

,

.

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2000 2001

-'

$

0.00 $ 1,920.48 $ 1,920.48 $

0.00

$

0.00 $ 9,880.39 $ 9,880.39 $

0.00

The School District has pu~chased a surety bond to provide additiona~ 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 of the date oftheir inception.

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

Pumose

Interest Rates

Generai Government ~ Series 2001

4.00%

General Government - Series 1997

4.00% - 5.00%

General Government - Series 1995A

4.00% -: 5.40%

General Government - Refunding - Series 1995B 3.90% - 5.40%

General Government - Refunding - Series 1993 3.15% - 4.75%

Amount
$10,000,000.00 5,545,000.00 9,750,000.00 5,500,000.00 2,765,000.00
$33,560,000.00

- 20-

BARROW COUNTY BOARD OF EDUCATION

EXHIDIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30, 2001.

Note 5: GENERAL LONG-TERM DEBT

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

Balance July I, 2000
Retroactive Restatement of Prior Year Balances
Balance July I, 2000 Restated
Additions Annual Leave Earned and Utilized (Net) G.O. Bonds
Deductions Pebt Retired
Balance June 30, 2001

Capital Leases

Compensated_ Absences

General Obligation
Bonds

Total

$ 614,062.24 $

0.00 $ 27,380,000.00 $ 27,994,062.24

0.00

82,044.81

0.00

82,044.81

$ 614,062.24 $ 82,044.81 $ 27,380,000.00 $ 28,076,107.05

57,437.52

57,437.52

10,000,000.00 10,000,000.00

147.329.46

3,820,000.00 3,967.329.46

$ 46673278 $ 13948233 $ 33 560000.00 $ 34166215 11

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

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 2005 2006 2007 - 2011 2012 - 2016

$ 169,280,77 $ 5,805,959.44 $ 5,975,240.21 169,280,77 6,423,760,00 6,593,040,77 173,132.57 4,121,190,00 4,294,322,57 70,672.14 . 4,112,865,00 4,183,537.14 4,126,155.00 4,126,155,00 11,697,785.00 11,697,785,00 7,681,280,00 7,681,280,00

Total Principal and Interest $ 582,366,25 $43,968,994.44 $44,551.360,69

Deduct: Imputed Interest

'115,633.47

Net Present Value of Future Minimum Lease Payments $ 466,732,78

- 21 -

BARROW COUNTY BOARD OF EDUCAnON

EXHIBIT "F"

NOTES TO lHEGENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 6: SHORT-TERM DEBT

The School Di~trict obtains temporary loans in advance of property tax collections, depositingthe proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount ofshort-teim debt to 75 percent ofthe total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

Temporary Loans

Beginning Balance,

Additions

Payments

Ending Balance

$ 139,674.51 $==dO~,O~O $ 33,735.15 $ 105,939.36

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $754,417,52 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department,of Education Paid to the Georgia Department of Community Health For Health ,Insurance of Non-Certified Personnel In the amount of$599,570.92

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$15,417,60

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost . ,In the amount of $139,429,00

Note 8: SIGNIFICANT COMMITMENTS

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

- 22,-

BARROW COUNTY BOARD OF EDUCATION

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE.FINANCIAL STATEMENTS
JUNE 30. 2001 ..

Note 8: SIGNIFICANT COMMITMENTS

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 1.995,953.96 $ 257,095.30

$ 2.405,951.70 $ 257,095.30

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

Note 9: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall fi.n' ancial position.
The Barrow County School District is a third-party defendant in a lawsuit filed against the contractor by the sub-contractor for the construction of two school buildings. The lawyers representing the School District believe that the verdict in the case could amount to $1.5 million to $3 million dollars. The School District currently holds $1.2 million dollars as retainage payable as of June 30, 2001.

Note 10: SUBSEOUENT EVENTS

On February 1,2002, the Winder-Barrow Industrial Building Authority issued $2,500,000.00 in bonds on behalf of the Barrow County School District as follows:

"The Winder-Barrow Industrial Building Authority has been created pursuant to Constitution and laws of the State of Georgia, particularly an Amendment to Article V, Section IX of the Constitution of the State of Georgia, as amended by that certain amendment to the Amendment (Georgia Laws 1964, Extraordinary Sessions, Page 376, et seq.) and an act ofthe General Assembly of the State of Georgia (Georgia Laws 1987, page 3525, et seq., as amended) (collectively, the "Act")"

- 23-

BARROW COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO mE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30,2001

Note 10: SUBSEQUENT EVENTS

"In furtherance of the purposes of the Act, the Authority purposes to provide funds for the acquisition construction and equipping ofa certain office facility and related real and personal property in the Barrow County (the "Project"), for the use of the Barrow CoUnty School District, a political subdivision ofthe State ofGeorgia (the "School District"), pursuant to the Contract (the "Contract") between the Authority and the School District and the Authority proposes to finance the cost of the Project by the issuance ofitsWinder..:Barrow Industrial B.uilding Authority Revenue Bonds (Barrow School Project), Series 2002 (the "Bonds"), in the aggregate principal Amount of $2,500,000 pursuant to this resolution; and"

"The School District in the Contract has agreed to pay to the Authority on January 15 and July 15 ofeach year, commencing July 15,2002, a sum sufficient to pay the principal of, premium, if any, and interest on the Bonds as the same becomes due and payable"

In the subsequent fiscal year, the School District received the proceeds from the $2,500,000 bonds issued by the Winder-Barrow Industrial Building Authority, for the purpose of purchasing an old retail shopping building and renovating the site as a new School District administration building.

Note 11: ACCUMULATED EMPLOYEES' LEAVE
a The School District has 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 ofdeparture. 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 districts

are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple

employer defined benefit pension plaIt 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

fromthe Georgia Department of Audits and Accounts.

.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 24-

,":
BARROW COUNTY BOARD OF EDUCATION NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30.2001":'

EXHmIT "F"

Note 12: RETIREMENT PLANS
Fiscal Year,
2001 2000 1999

, Percentage Contributed
100% 100% 100%

Required Contribution
$ 3,607,448.31 $ 3,238,565.33 $ 3,236,053.35

- 25 -

__ __ __ __ _ _ ~-------------------_~_----------------~-------_~~~~ ~_~~_-_~_~~_~_-_~---------
BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND . JUNE 30, 2001

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved 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.-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 1,156,166.04 $

121,887,30

6,382,25

73,299.20

47,551.01 26,055.22

$ 1,236,154.52 $ ==1..9.=5:1:::,1.8..6.=:.=50=

$

125,749,57 $

160,721.19

19,617.43 76,898,52 17,135.39

$

286.470.76 $

113,651.34

$

$

47,551.01

26,055.22

876,077.53

$

949,683.76 $

81,535,16
0.00 81,535.16

$ 1,236,154.52 $ ==1..9.=5:1:::,1.8..6.=:,=50=

EXHIBIT"G"

FEDERAL
PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$ 1,278,053.34 $

849,026.74

100,000.00

$

906,254.94

985,936.39

637,649.12

47,551.01 26,055.22

56,449.83 17,353.60

$

906,254.94 $ 2,337,595:96 $ 1,660,479.29

$

518,556.20 $

518,556.20 $

175,367.20

73,795.15

219,162.15

104,228.97

104,688.81

342,308.52

368,020.40

33,148.81

50,284.20

25,857.11

$

730,188.97 $ 1,130,311.07 $

673,473.68

$

176,065.97 $

257,601.13 $

309,991.28

47,551.01 26,055.22

56,449.83 17,353.60

0.00

876,077.53

603,210.90

$

176,065.97 $" 1,207,284.89 $

987,005.61

$

906,254.94 $ 2,337,595.96 $ 1,660,479.29

- 27-

BARROW COUNTY BOARD OF EDUCATION

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

,

SPECIAL REVENUE FUND

YEAR ENDED JUNE 30, 2001

FUND BALANCE JUNE 30 See notes to the general-purpose financial statements,
- 28-

$

949,683.76 $ ===8..1..,5=35;;;,;,=16==

EXHIBIT"H"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

962,233.88 $ 1,031,550.95

$ 1,700,579.47

3,024,896.73

3,063,586.62

1,381,361.07

1,320,527.03

$ 1,700,579.47 $ 5,368,491.68 $ 5,415,664.60

$ 1,180,044.45 $ 1,871,095.91 $ 2.015,903.95

121,708.29 60,631.73
114,758.83
1,723.52 220,610.35
1,102.30

188,625.32 63,588.82
114,758.83
31,368.00
1,723.52 229,298.22 2,851,067.60
1,102.30

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

$ 1,700,579.47 $ 5,352,628.52 $ 5,341,664.38

$

0.00 $

15,863.16 $

74,000.22

3,204.02

358,527.23

$

0.00 $

19,067.18 $

432,527.45

176,065.97

987,005.61

551,456.15

201,014.90

12,855.16

8,898.82 -8,701.62

-4,469.98 -5,363.17

$

176,065.97 $ 1,207,284.89 $ ====9=8=7,=0=05=.6==:1=

- 29-

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

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
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 SPLOST Projects Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$ 9,923,485.54 $ 1,054,088.26

110.77 .

8,171.89

$ 9,931,768.20 $ 1,054,088.26

$

47,942.06

161,342.30 $ 1,054,088.26

$

209,284,36 $. 1,054,088.26

$ .9,722,483.84

0.00 $

0.00

$ 9,722,483.84 $

0.00

$ ~9:931,768.20 $ 1,054,088.26

See notes to the general-purpose financial statements. - 30-

EXHIBIT "I"

SPECIAL PURPOSE LOCAL OPTION SALES TAX
$

$

972,116.01

LOTIERY PROJECT

TOTALS

JUNE 30, 2001

JUNE 30, 2000

0.00 $ 10,977,573.80 $ 1,858,707.66

110.77

34,309.06

980,287.90

$

972,116.01 $=====0..0..0. == $ 11,957,972.47 $ 1,893,016,72

$

126,698.55

$

126,698.55

$

126,698.55

47,942.06 $

98,336.00

1,050.00

1,215,430.56

1,303,664.62

$ 1,390,071.17 $ 1,403,050.62

$

845,417.46

0.00 $

$

845,417.46 $

$ 9,722,483.84 $ 845,417.46

489,966.10

O; :;..:.=.;OO~

0.00

0.00

O=..=.;OO~ $ 10,567,901.30 $ _ _4.;.;;;8=9=,9.=.;66=...;.;10~

$

972,116.01 $====0:=,=00== $ 11,957,972.47 $ 1,893,016.72

31

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

REVENUES
State Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Support Services Business Administration
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from General Obligation Bonds Par Value
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
FUND BALANCE JUNE 30

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

523.952.10

$

112.970.13

4.41

$

112,970.13 $

523,956.51

$

403.022.17

$ 209.262.22
2.758.64

181.338.12 2.673.389.68
8.349.00 -

$

615.043.03 $ 2.863.076.80

$ -502.072.90 $ -2.339,120.29

$ 9.734.590.64 $ 2.339.120.29

$ 9,734.590.64 $ 2.339.120.29

$ 9.232.517.74 $

0.00

489,966.10

0.00

$ 9,722,483.84 $====0=.0=0=

See notes to the general-purpose financial statements. - 32-

EXHIBIT"J"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ $ 3,258,009.04
17,415.49
$ 3,275,424.53 $

361,332.00 $ 361,332.00 $

885,284.10 $ 3,258,009.04
130,390.03
4,273,683.17 $

1,194,139.60 126,959.96
1,321,099.56

$

0.00 $

$

0.00 $

$ 3,275,424.53 $

0.00 $
0.00 $ 361,332.00 $

403,022.17

181,338.12 2,882,651.90 $
11.107.64

10,212,630.92 904,307.86

3,478,119.83 $ 11,116,938.78

795,563.34 $ -9,795,839.22

$ -2,430,007.07 $ $ -2,430,007.07 $

$ -361,332.00

9,734,590.64 2,339,120.29 $ -2,791,339.07

8,019,402.37 -7,747,487.20

-361,332.00 $ 9,282,371.86 $

271,915.17

$

845,417.46 $

0.00

0.00 $ 10,077,935.20 $ -9,523,924.05

0.00

489,966.10

10,013,890.15

$

845,417.46 $====O=.~OO;., $ 10,567,901.30 $==4=8=:9,9=66="=10;.,

- 33-

BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2001

EXHIBIT"K"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
FUND EQUITY Fund Balances
Reserved For Debt Service
Unreserved Undesignated
Total Fund Equity

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

_JUNE 30, 2001

JUNE 30, 2000

$ 6,183,199.36 $ 6,183,199,36 $ 2,536,895.57

37.74

37.74

3,562,104.27

$ 67,395,68

6,795.81

74,191.49

1,020,463.63

$ 67,395.68 $ 6,190,032.91 $ 6,257,428.59 $ 7,119,463.47

$ 67,395,68 $

...,.......,

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

6,190,032.91 $ 0.00

6,257,428.59 $ 0.00

7,119,463.47 _0.00

$ 67,395.68 $ - 6,190,032.91 $ 6,257,428.59 $ 7,119,463_47

See notes to the general-purpose financial statements.

- 34-

. ' .. ~; . ' f 1"' I

BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 3d, 2001

EXHIBIT"L"

FUND BALANCE JUNE 30

$

67,395.68 $ 6,190,032,91 $ 6,257,428,59 $ 7,119,463.47

See notes to the general-purpose financial statements.

- 35

,-----------------------~-----~--~-

BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE 'SHEET FIDUCIARY FUND TYPES JUNE 30. 2001

EXHIBIT "Moo

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

NONEXPENDABLE TRUST FUND
BARROW COUNTY, GEORGIA BOARD OF EDUCATION
SCHOLARSHIP FUND,
INCORPORATED

AGENCY FUNDS

TOTALS JUNE 30, 2001 JUNE 30, 2000

$

11,838.53 $

10,887.32 $

22,725.85 $

21,279.08

57,118.83

1,256.69

58,375.52

53,695.67

11.48

11.48

$

68,957.36 $

12,155.49 $

81,112.85 $

74,974.75 .

Total Liabilities and Fund Equity $

68,957.36 $

12,155.49 $

81,112.85 $ =~7,;;4~,9~74;;:.7~5b

See notes to the general-purpose financial statements.

- 36-

BARROW COUNTY BdARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE- AGENCY FUNDS YEAR ENDED JUNE 30, 2001

EXHIBIT"N"

Total Assets

$

5,478.09 $ 16,720.08 $

17,248.48 $===4,94,.;;9=.6=9=

LIABILITIES Accounts Payable Funds Held for Others

$

0.00 $

311.17 $

0.00 $

311.17

5,478.09

16,408.91

17,248.48

4,638.52

Total Liabilities

$

5.478.09 $ 16,720.08 $

17,248.48 $===41:,94::::9=.6=9=

MURRAY KENNEDY MEMORIAL FUND
ASSETS Cash and Cash Equivalents

$

3,091.91 $

11.82 $

3,103.73$ ====,0=.0=0=

LIABILITIES Funds Held for Others

$

3,091.91 $

11.82 $

3,103.73 $======0:=.0=0

SUNSHINE FUND
ASSETS Cash and Cash Equivalents

$

127.57 $

0.00 $

58.37 $=====6:=9:=.20=

LIABILITIES Funds Held for Others

$

127.57 $

0.00 $

58.37 $====69=.2;:;;0,=

- 37-

BARROW COUNTY BOARD OF EDUCATION . COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE AGENCY FUNDS YEAR ENDED JUNE 30. 2001

EXHIBIT"N"

Total Assets
LIABILITIES Funds Held for Others
LIBRARY ENRICHMENT FUND ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
STUDENT SERVicE CENTER ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
TEACHER OF THE YEAR ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others

$

331.71 $ 1,261.67 $

$

331.71 $ 1,261.67 $

0.00 $ -====,.;,1==,5.9.3.=.3~8;..
,
0.00 $ -=====1==,5.9.3.=.3~8;..

$

810.00 $ 1,505.00 $

0.00 $==2:=";;;.31=5=.0==0

$

810.00 $ 1,505.00 $

0.00 . $===2==,3=15=.0~0==

$

628.76 $

642.55 $

520.66 $ ===7;,,;;5=0.=65...

$

628.76 $

642.55 $

520.66 $ ====7,;;;,50;:.6...5...

$

0.00 $

198.32 $

198.32 $=====0..0...0....

$

0.00$

198.32 $

198.32 $====0=.0;;;;0;..

38 -.

- . ,- ~ ~. j



".,"
BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE AGENCY FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT"N"

BCAEOP ASSETS
Cash and Cash Equivalents
LIABILITIES Funds Held for Others
TOTALS - AGENCY FUNDS ASSETS
Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
LIABILITIES Accounts Payable Funds Held for Others
Total Liabilities

BALANCE
JULY 1, 2000

ADDITIONS

DEDUCTIONS

BALANCE
JUNE 3D, 2001

$

0.00 $ 2,875.34 $

397.77 $

2,477.57

$

._0.;;;,;00;.. $ 2,875.34 $

397.77 $ ===2=,4=7=7..5..7....

$

10,468.04 $ 21,946.61 $ 21,527.33 $

10,887.32

0.00

1,256.69

0.00

1,256.69

0.00

11.48

0.00

11.48

$

10,468.04 $ 23,214.78 $ 21,527.33 $===1=2=,1=55....4=9=

$

0.00 $

311.17 $

0.00 $

311.17

10,468.04

22.903.61

21,527.33

11,844.32

$

10,468.04 $ 23,214.78 $ 21,527.33 $===1=2=,1=55....4=9=

See notes to the general-purpose financial stateml;lnts.

- 39

BARROW COUNjy BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
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

CFDA NUMBER
10.553 10.555

Total Child Nutrition Cluster

Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) Fresh Produce Program (1)

10.550 10.550

Total U. S: Department of Agriculture

Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building Improvement Grant Flow Through Preschool

. 84.027 . 84.027
84.173

Total Special Education Cluster

Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Title II Eisenhower Professional Development Title III Technology Uteracy Challenge Fund Grants Title VI Innovative Education Program Strategies Class Size Reduction Safe and Drug-Free Schools and Communities Vocational Education - Basic Grants to States High School Program Basic Grant

84.010 84.281 84.318 84.298 84.340 84.186
84.048

Total U. S. Department of Education

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

N/A $ 237,080,08

(2)

NlA

937,439.88 $ 2,701,017.70 (3)

$ 1,174,519.96 $ 2,701,017.70

NlA

124,797.30

124,797.30

NlA

25,000.00

25,000.00

$ 1,324,317.26 $ 2,850,815.00

N/A $

7,992.00 $

NlA

669,396.28

N/A

15,791.44

$ 693,179.72 $

7,992.00 669,396.28
15,791.44
693,179.72

N/A

699,932.15

699,932.15

N/A

22,188.56

22,188.56

N/A

75,910.00

75,910.00

NlA

52,243.75

52,243.75

NlA

88,589.14

88,589.14

N/A

28,944.79

28,944.79

NlA

39,591.36

39,591.36

$ 1,700,579.47 $ 1,700,579.47

Total Federal Financial Assistance .
= N/A Not Available

$ 3,024,896.73 $ 4,551,394.47

- 40 - .

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

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution and Fresh Produce Programs 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 induded In the 2001 National School Lunch Program.
(3) Expenditures for this program indude State. and/or Other Funds. Expenditures are not maintained by fund source.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The School Distrid did not provide Federal Assistance to any SUbrecipient.
The accompanying schedule of expenditures of Federal awards i"dudes the Federal grant activity of the Barrow County Board of Education and is presented on the modified acaual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements.

See notes to the general-purpose financial statements.

- 41 -

BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF SIDE REVENUE YEAR ENDED JUNE 30 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Governor's Emergency Funds (1)

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$

20,000.00

$

20,000.00

Education, Georgia Department of

Quality Basic Education

Direct Instructional Cost

Kindergarten Program

Kindergarten Program - Early Intervention Program

Primary Grades (1-3) Program

Primary Grades - Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category III

Category IV

Category V

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of other Languages (ESOL)

Special Education Itinerant

Special Education Supplemental Speech

Media Center Program

Staff and Professional Development

Indirect Cost

Categorical Grants

Pupil Transportation

Regular

Bus Replacament

Nursing Servicas

Principal Supplements

Vocational Supervisors

Deferred Summer Salaries - Current Year

Education Equalization Funding Grant

Food Services

.

Vocational Education

other State Programs

Apprenticeship Program

At-Risk Summer School Program

Environmental Science Program

Health Insuranca

Mentoring Program

Mentor Teachers

National Teacher Certification

Pay for Perfonnance

Preschool Handicapped Program

Remedial Summer School

Student Achievement

Teachers' Retirement

Lottery Programs

Computers in the Classroom

Exceptional Growth-Capital Outlay

Technology Installation

. 1,847,741.00 518,380.00
5,204,762.00 579,136.00
2,550,771.00 4,338,168.00 2,721,682.00 1,361,583.00
128,083.00 757,972.00 2,347,363.00 399,840.00 231,069.00 274,355.00 343,830.00 299,932.00 191,916.00
1,087.00 7,180.00 759,288.00 216,208.00 4,585,842.00

924,206.00 252,130.00 179,361.00
36,801.00 57,266.00 4,756,136.31 2,035,323.00
$ 29,335.44

216,594.00

35,000.00 1,291.80 750.00
599,570.92 3,185.37
21,842.00 12,042.00 104,000.00 126,392.00 4,147.91 6,100.00 15,417.60

170,630.27 $
19,292.98

361,332.00

1,847,741.00 518,380.00
5,204,762.00 579,136.00
2,550,771.00 4,338,168.00 2,721,682.00 1,361,583.00
128,083.00 757,972.00 2,347,363.00 399,840.00 231,069.00 274,355.00 343,830.00 299,932.00 191,916.00
1,087.00 7,180.00 759,288.00 216,208.00 4,5.85,842.00
924,206.00 252,130.00 179,361.00
36,801.00 57,266.00 4,756,136.31 2,035,323.00 216,594.00 29,335.44
35,000.00 1,291.80 750.00
599,570.92 3,185.37
21,842.00 12,042.00 104,000.00 126,392.00 4,147.91 6,100.00 15,417.60
170,630.27 361,332.00
19,292.98

Human Resources, Georgia Department of Second Step Program

3,178.00
j-'"
-42.-

3,178.00

BARROW COUNTY BOARD OF EDUCATION SCHEDULE Of STATE REVENUE YEAR ENDED JUNE 30 2001

SCHEDULE "2"

AGENCYlfUNPlNG
GRANTS Georgia State financing and Investment Commission Reimbursement on Construction Projects
Office of School Readiness Pre-Kindergarten Program .
Office of Traasury and fiscal Services Public School Employees Retirement
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PRO~ECTS

fUND .

fUND

fUND

TOTAL

$ 523,952.10 $

523,952.10

$ 555,716.63

555,716.63

$ 139,429.00

139,429.00

79,022.00 44.712.00

79,022.00 44,712.00

$' 39,152,827.35 $ 962,233.88 $ 885,284.10 $ 41,000,345.33

(1) ,The purpose of the funds are to assist in the development of athletic fields for the Winder-Barrow High School.

See notes to the general-purpose financial statements.

43 -

BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2001

SCHEDULE "3"

$ 21.000.000,00 $ 21,000,000,00 $ 3,302,815.10 $ 15.791,906.09

(1) The School District's original cost estimate as specified In the resolution calling for the imposition of the Local Option Sales Tax.

(2) The School District's 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 of the projects.

(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows:

Prior Year

$ 1,695,556,88

Current Year

400,365,00

Total

$ 2,095,921.88

. See notes to the general-purpose financial statements.

- 45-

BARROW COUNTY BOARD OF EDUCATION GENERAL FUND - qUALITY BASIC EDUCATION PROGRAM (aBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ~NDED JUN~ 30, 2001

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF . EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Middle Grades (6-8) Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category " Category III

Category IV

Category V

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

2.109.621,00 $ 591,852,00
5,942,435.00 661.218.00
2.912.292.00
~
4,953,017.00 3,107.426.00 1.554.560,00 4,421,457.00
313,239,00 392,561.00 342.442.00 219,118.00

2.290,586,41 $ 1,117.090,97 6,607.872.97 1.286,730,33 3,680,296.17 4,653.357.02
516,725.88 4,494,437.07 1,809.238.09
978.873.27 2.896,242,17 1,559.254.43
341.198,33 150,472.57 456,119.31 366.779,81 191.112.98 165,516.49

28,654,92 $' 15,271.25 182.202.80 '23,868.47 - 102;287,93 12.321.34 95,642.51. 503.949.67 342,529.98
3,116.64 22,613.31 47,229,94
4;648.46 7,102.21
3.495,98 4,889.23
597.58

2,319.241.33 . 1.132.362.22 6,790,075.77 1.310,598.80 3,782.584,10 4.665,678.36
612.368.39 4,998.386,74 2,151,768.07
981.989.91 2.918,855,48
1,606,~84,37
345,846.79 157,574,78 456.119.31 370,275.79 196,002.21 166.114.07

I
27.521,238.00 '$ 33,561',904.27 $ 1,400,422.22 $ 34,962,326.49

Media center Program Staff and Professional Development

866,901.00 246,851.00

1,140.809.97 65,763,95

301,770,88 198,215.31

1 ,442,580.~5 263.979.26

TOTAL aBE FORMULA FUNDS

$

28,634,990,00 $ 34,768.478,19 $ 1.900,408.41 $ 36.668,886.60

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

See notes to the general-purpose financial statements.

- 46-

.. , ---~.~" ~.:-,.
. BARROW COUNTY BoARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

Apalachee High School Kennedy Elementary School Bramlett Elementary School Westside Middle School Russell Middle School Yargo Elementary School Auburn Elemental)' School Bethlehem Elementary School Winder-Barrow Middle School County Line Elementary School Winder-Barrow High School Holsenbeck Elementary School Statham Elementary School Student Services Center Central Office (Alternative Education Program) Other Auxiliary Facility Administrative Office Annex
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,250,994.00 $ 3,096,467.25

2,209,571.00

2,882,119.61

2,386,131.00

2,826,372.94

2,038,337.00

2,416,715.21

2,123,118.00

2,506,621.43

1,728,495.00

2,133,245.18

1,762,942.00

2,356,559.56

1,448,897.00

1,861,299.25

2,037,371.00

2,648,652.14

1,346,957.00

1,846,848.25

3,778,207.00

5,296,010.14

2,172,053.00

2,760,591.55

1,895,723.00

2,256,003.34

2,704.60

342,442.00

22,021.68

50,094.36

$ 27,521,238.00 $ 34,962,326.49

See notes to the general-purpose financial statements. - 47-

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

RtJSSE"LL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w.. Suite 214 Atlanta, Georgia 30334-8400
June 3, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Education
and Superintendent and Members of the Barrow County Board ofEducation

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Ladies and Gentlemen:

We have audited the financial statements of Barrow County Board of Education as of and for the

year ended June 30, 2001, and have issued our report thereon dated June 3,2002. This report was

quaiified 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, 2001, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.

Compliance

As part of obtaining reasonable assurance about whether 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 of our 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.

200 1YB-40

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 fmancial 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-607l-01-01, FS-607l-0l-02, FS-607l-01-04 and FS-607l-01-05.
A material weakness is a condition in which the design or operation ofone 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 of the internal control over financial reporting would not necessarily . disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider items FS-607l-0101 and FS-607l-0l-04 to be material weaknesses.
This report is intended solely for the infonnation and use of the management, members of the 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,
lll.~
RWH:as 200 1YB-40

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 3, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board of Education
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 U.S. Office .of Management and Budget (OMB) Circular A-I33 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Barrow County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section ofthe accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Barrow County Board of Education'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 of the United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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.
2001SA-30

In our opinion, the Barrow County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 2001.
Internal Control Over Compliance
The management of 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-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over 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. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6071-01-0l.
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 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, we believe that the reportable condition described above is not considered to be a material weakness.
This report is intended solely for the information and use of the management, members of the 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,
W.~
Ru ell W. Hinton Sta e Auditor
RWH:as 2001SA-30

SECTIONm 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, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6071-99-01 FS-6071-99-06 FS-6071-00-01 FS-6071-00-02 FS-6071-00-03 FS-6071-00-04 FS-6071-00-05 FS-6071-00-06 FS-6071-00-07 FS-6071-00-08

Further Action Not Warranted Further Action Not Warranted Partially Resolved - See Corrective ActionlResponses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Unresolved - See Corrective Action//Responses

CORRECTIVE ACTIONIRESPONSES

CASH & CASH EQUIVALENTS Inadequate Accounting Procedures Finding Control Number: FS-6071-00-01

The financial accounting software system in place for fiscal year 2000 prevented the

perfonnance of any consistent accounting procedures or controls. Random data base

corruptions and rampant postings to balance sheet accounts prevented the preparation of

any bank account reconciliations. Some data entry batches of accounting data were

processed in error by this software system and other batches were processed partially or

processed twice.

.

On March 1,2001, a new financial accounting software system was implemented in the Barrow County School District. All accounting entries are now being entered in this accounting system and these entries are being balanced to supporting records. In addition, bank account reconciliations are being prepared on a current basis.

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

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Unrecorded Outstanding Loan Finding Control Number: FS-6071-00-05

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-yea, r

note

without

p.rovision

for

State ,

o

f

Georgia

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 of this loan, the Barrow

County School District will continue to carry this loan until paid offon February 1,2003.

However, as part of the conversion to a new financial accounting software system, this

.loan was recorded on the general ledger.

GENERAL LEDGER Failure to Refund Unearned Lottery Funds Amount: $81,535.16 .Finding Control Number: FS-6071-00-06

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, Pre-Kindergarten, completion report. These expenditures 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.) Therefore, the School District does not agree with this deficiency.

It is our understanding that State Department of Audits personnel used General Ledger reports during audit fieldwork and that may provide the explanation for these differences. The auditors were provided with copies of thes~ completion reports and our supporting documentation. Copies ofthis documentation will be made available to State Department of Education Financial Review personnel to facilitate their review of this deficiency.

- 2-

" "'.,1":'-"', .. " ,Jyy;,.. '
BARROW COUNTY BOARD OF EDUCA'fION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Detail of Salary and Travel not Reconciled to. the General Ledger Finding Control Number: FS-6071-00-07

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 reconciliation and comparisons impossible. Implementation ofa new financial accounting software system during fiscal year 2000-2001 will provide the accurate processing of accounting data and will also provide the ability to reconcile state reports to supporting general ledger balances.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6071-00-08

Due to current staffing limitations and budgetary limitations, the Barrow County Schoql District does not intend to pursue the recording of general fixed assets until the required implementation of GASB 34 provisions. A fixed asset accounting system has been purchased and a valuation consultant has already been engaged to facilitate this implementation during fiscal.year 2001-2002.

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6071-00-01 FA-6071-00-02 FA-6071-00-03

Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses ~reviously Reported Corrective Action Implemented

CORRECTIVE ACTIONIRESPONSES

REPORTING Erroneous Project Completion Reports Amount: $176,065.97 Finding Control Number: FA-6071-00-02

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 not accurately reflect revenues and expenditures. Expenditure reports

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BARROW COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULEOF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
REPORTING Erroneous Project Completion Reports Amount: $176,065.97 Finding Control Number: FA-6071-00-02
,were used for the preparation of these completion reports. These expenditures reports, along,with other supporting reports, validate the expenditure of these funds. In addition, some specific comments regarding some ofthese 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 IT - It appears that some programs 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. It is our understanding that State Department of Audits personnel used general ledger reports during audit fieldwork and that may provide the explanation for these differences. The auditors were provided with copies of these completion reports and our supporting documentation. Copies ofthis documentation will be made available to state Department of Education Financial Review personnel to facilitate their review ofthis deficiency.
-4-

SECTION IV FINDINGS AND QUESTIONED COSTS

BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Barrow County Board ofEdilcation'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 of the 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 General Ledger

Inventories General Fixed Assets

Of the reportable conditions described above, Cash and Cash Equivalents, General Ledger and General Fixed Assets 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 a reportable condition in internal control over major programs for the following compliance requirement.

Cash Management

The reportable condition described above is not considered to be a material weakness.

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 unqualified.

6. Audit Findings Required to be Reported by Section .5 1O(a) ofOMB Circular A-133 The Barrow County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) ofOMB Circular A-133. This audit finding is included in section IV ofthis report.

- 1-

~~-~- ---~-- - - - - - - -~
BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001

I SUMMARY OF AUDITOR'S RESULTS

7. Major Programs
Eederal. awards audited as major programs are as follows:
10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational
. Agencies 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-
Capacity Building Improvement Grant

8. Type "A" Program DollarThreshold . The dollar threshold for type "A" programs was $300,000.00'.

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

llFINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6071-01-01

Accounting procedures ofthe Barrow County School District were insufficient to provide adequate internal controls over Cash and Cash Equivalents and General Ledger control categories as noted below: .

Cash and Cash Equivalents.

The operating account reconciliation resulted in an unreconciled variance of $12,802.13

between the book balance for cash and the bank statement. No adjustment was made to the

financial statements for the unreconciled variance.

.

- 2-

BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6071-01-01
General Ledger
The School District made adjustments to the General Fund and the Special Revenue Fund School Food Services Fund totaling $988,969.70 forunreconciled variances associated with the conversion from old to the new financial accounting software operating system. The School District could not provide an explanation as to transactions comprising this amount.
These deficiencies occurred because ofproblems associated with a change in financial accounting software systems. Since the introduction of the new operating system, the Barrow County School District has made significant improvements in the correction of the deficiencies. The above mentioned adjustments to the General Fund and School Food Services Fund should correct most deficiencies.
Management's Response:
As stated by the audit, the problems encountered with the FY 2001 general ledger were largely due to the inadequacies and malfunctions within the financial accounting software. Since converting to the MUNIS financial accounting software during FY 2001, we have moved forward to being able to produce financials and data that correctly reflect the financial status of our school system. We are working on specific programs with MUNIS representatives to provide correct and timely data submissions to the Audit department and Georgia Department of Education.
GENERAL LEDGER Unrecorded Outstanding Loan Reportable Condition Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-01-02
On December 31, 2000, the General Fund had an unrecorded loan outstanding in the amount of $150,986.40. This loan was not repaid at December 31, 2000 as required by Article IX, Section V, Paragraph V of the Constitution of the State of Georgia which provides, in part, as follows:
-3-

BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 2001 >
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Unrecorded Outstanding Loan Reportable Condition Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-01-02
"The governing authority of any county, municipality or other political subdivision of this state may incur debt by obtaining temporary loans in each year to pay expense.... 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 statement to record the balance outstanding on a loan payable of$1 05,939.36 atJune 30, 2001. The School District's failure to record the loan occurred because the School District did not establish accounting procedures to ensure compliance for maintenance ofliabilities within the General Fund as required by Chapter 35 of the Financial Management for Georgia Local Units of Administration. Repayment of the loan should be made in conformity with the above quoted constitutional provision.
Management's Response:
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 ofGeorgia 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 ofthis loan, the Barrow County School District will continue to carry this loan until paid offo,n February 1, 2003. However, as part ofthe conversion to a new financial accounting software system, this loan was recorded on the general ledger..
GENERAL LEDGER Detail of Salary and Travel Not Reconciled to the General Ledger. Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-0 1-03
The detail of salaries and travel by individual submitted to the Department ofAudits by the School District was not reconciled to the generalledger as presented for audit. After performing extensive audit procedures" an unidentified variance of $10,400.91 for salaries and $40,611.51 for travel remai~ed between the detail and the general ledger. These amounts are reflected in the Schedule of Salaries and Travel, which is issued under separate cover.
- 4-

.'.. ~.

','

~.. :\,",......

'(.\.;i

BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

n FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL LEDGER Detail of Salary and Travel Not Reconciled to the General Ledger Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-01-03
This condition occurred because management did not ensure that amounts submitted to the Georgia Department of Audits were reconciled to the School District's general ledger. Administrative procedures should be implemented to ensure that the detailed listing of salaries and travel is reconciled to the School District's general ledger prior to submission to the Department of Audits.
Management's .Response:
As stated by the audit, the problems encountered with the FY 2001 general ledger were largely due to the inadequacies and malfunctions within the financial accounting software. Since converting to the MUNIS financial accounting software during FY 2001, we have moved forward to being able to produce financials and data that correctly reflect the fin~~ial status of our school system. We are working on specific programs with MUNIS representatives to provide correct and timely data submissions to the Audit department and Georgia Department of Education.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6071-01-04
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 ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.

-5-

BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001

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-6071-01-04

Management's Response:

Due to previous current staffing limitations and budgetary limitations, the Barrow County School

District had never pursued the recording of general fixed assets. However, the Barrow County

School District does intend to comply with the GASB 34 provisions. A fixed asset accounting

system has been purchased as part of the MUNIS financial accounting system. In addition, district

property values and depreciation schedules have been developed by a valuation consultant. Fixed

assets will be set up in the MUNIS financial accounting system during Fiscal Year 2002-2003 as

required by GASB 34 provisions.

.

INVENTORIES Inadequat~ Inventory Records Reportable Condition. Nonmaterial Noncompliance Finding Control Number: FS-6071-01-05

Property management records maintained by the School District {or' the Lottery Funds were incomplete and failed to meet property management standards set forth in chapter 41, of the Financial Management for Georgia Local Units of Administration (FMGLUA). The equipment records were not presented for the audit. An annual physical inve~tory count was not performed. These conditions occurred because management failed to maintain property management records and 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 Chapter 41, of the FMGLUA. An annual physical count should be performed and reconciled to the equipment records to ensure the accuracy of inventory records..

Management's Response:

All property that exceeds the $5,000 fixed asset threshold will be maintained through the fixed asset system. An asset tracking database has been purchased for computer equipment less than $5,000, however the district does not have the manpower to install it and maintain it. A single point ofentry for computer equipment would have to be established so they can be entered into the database as they arrive. Until we establish such a system, inventory counts on items under $5,000 will not be accurate.

- 6-

I

";-. ~

BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 2001

ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS
CASH MANAGEMENT Excessive Cash Balances Reportable Condition U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-6071-01-01
A review ofcash management procedures for the Elementary and Secondary Education Act - Title I (CFDA 84.010) disclosed that cash draws were made in advance ofimmediate cash needs, resulting in the accumulation ofexcessive cash balances. During fiscal year 2001, the program had an average cash balance of$84,291.26 and had excessive ending monthly cash balances in eight months. The excessive cash balances are a result ofmanagement's failure to accurately forecast the cash needs of this program. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department ofEducation and disbursements ofsuch funds by the School District.
Management's Response:
As already stated, the financial data used to draw down grant amounts was not accurate during FY 200I. The subsequent month's estimated expenditures was only as good as the data provided by the software. By accruing salary and benefits at year-end and the financial accounting system now providing the necessary management reports, we will be better able to manage our need for grant funds on an ongoing basis.

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