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'., n ,,-, BARROW COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS EXHIBITS GENERAL-PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 7 D 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 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND G COMBINING BALANCE SHEET 24 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 26 CAPITAL PROJECTS FUND I COMBINING BALANCE SHEET 28 J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 30 DEBT SERVICE FUND K COMBINING BALANCE SHEET 32 L COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 33 BARROW COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL IN FORMATION EXHIBITS COMBINING STATEMENTS FIDUCIARY FUND TYPES M COMBINING BALANCE SHEET 34 N COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS 35 SCHEDULES I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 38 2 SCHEDULE OF STATE REVENUE 40 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 43 ALLOTMENTS AND EXPENDITURES GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE) 4 BY PROGRAM 44 5 BY SITE 45 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I33 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS BARROW COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washmgton Street, S.W. SUIte 214 Atlanta. Georgia 30334-8400 July 25, 2003 Honorable Sonny Perdue, 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 INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements of the Barrow County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Barrow County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 2002, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures. 2002ARL-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 aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects of such adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects on the general-purpose financial statements 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, 2002, 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 July 25, 2003, on our consideration ofthe Barrow County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an jmegral part of an audit performed in accordance with Government Auditing Standards and shoula. 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 I through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-I33, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such 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 2002ARL-13 as discussed in the third paragraph, and except for the effects of the 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 of Georgia Annotated Section 506-24. Respectfully submitted, ~ c~W?.H.i.,nOtoILn u.9.~ State Auditor RWH:gp 2002ARL-13 BARROW COUNTY BOARD OF EDUCAnON _------- BARROW COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 302002 ASSETS . - ~~. Cash and Cash EqUivalents Investments Accounts Receivable Inventones 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 Total Assets GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND S 8,913.92782 $ 9,272,74573 11349 6,551,497 79 $ 2,383,14031 330,77132 42,00884 28,636 26 $ 15,465,42561 $ 2,453,78541 $ 9,603,630 54 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Short-Term Debt ExPired Grant Balance Payable Retalnages Payable Deferred Revenue Funds Held for Others Capital Lease Agreements Compensated Absences General Obllgabon Bonds Payable TotalllabllrtJes FUND EQUITY Fund Balances Reserved For Bus Replacement Funds For Debt Service For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventones Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undeslgnated Total Fund EqUity $ $ 1,916.64826 5,120.72662 53,83210 1,304 01 569,46918 100,22848 $ 483,59258 21,26740 67673 1,252,56566 $ 7,092,51099 $ 1,153,96697 $ 1,273,833 06 $ 257,601 13 42,00884 28,63626 $ 7,074,66998 133,017 50 1,122,11000 $ 8,372,91462 971,572 21 000 $ 8,372,91462 $ 1,299,81844 $ 8,329,79748 Total Liabilities and Fund EqUity $ 15,465,42561 S 2,453,78541 $ 9,603.630 54 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 $ 6,651,68639 $ 15,67345 3781 60,76316 1,162,408 95 81273 ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30, 2002 JUNE 30, 2001 $ 24,854,033 39 $ 25,209,43526 60,91446 58,52403 10,428,631 10 8,115,70241 $ 7,814,13315 42,00884 28,63626 7,814,13315 47,551 01 26,05522 6,257,42859 21,540,866 85 2,962,506 85 232,35757 21,540,866 85 2,962,506 85 232,35757 27,302,571 41 466,73278 139,48233 $ 7,814,13315 $ 77,24934 $ 32,549,864 42 $ 67,964,08847 $ 67,623,48304 $ 569,46918 $ 7200 2,038,216 14 $ 2,761,47601 5,604,31920 5,133,74997 53,83210 105,93936 56,19573 1,252,56566 1,215,430 56 1,98074 12,69857 12,69857 11,844 32 $ 2,962,50685 2,962,506 85 466,73278 232,35757 232,35757 139,48233 29,355,000 00 29,355,000 00 33,560,000 00 $ 12,77057 $ 32,549,864 42 $ 42,082,946 01 $ 43,450,851 06 $ 7,814,13315 $ 14,91468 000 $ 7,814,133 15 $ 49,564 09 64,47877 $ 148,04915 $ 7,814,13315 6,257,42859 14,91468 14,91468 257,601 13 257,601 13 42,00884 28,63626 7,074,66998 133,01750 1,122,11000 47,55101 26,05522 9,722,48384 845,41746 9,394,050 92 6,853,130 90 $ 25,881,142 46 $ 24,172,631 98 $ 7,814,13315 $ 77,24934 $ 32,549,864 42 $ 67,964,08847 $ 67,623,48304 - 3- ----------------- ------------------ - BARROW COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - , ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2002 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Community Services Operations Capital Outlay Debt Service Pnnclpal Interest Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (U.5. ES) 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 FUND BALANCE JULY 1 Software Conversion Vanances Food Inventory - Net Change in Penod Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 40,391,166.97 $ 18,992,034 70 733,97203 $ 60,117,17370 $ 1,166,66673 4,689,706 16 1,407,55607 7,263,92896 $ 39,512,65682 $ 2,862,589 45 1,766,694 21 1,365,092 37 824,85432 4,423,012 00 858,461.88 3,863,353 22 2,468,879 07 307,54530 1,56914 356,63688 1,588,082.75 127,08943 42,191.34 $ 60,368,70818 $ $ -251,534 48 $ 1,913,025 66 1,562,56222 118,60350 80900 111,86791 44,25960 79,491 85 49,84749 242,70714 3,119,06691 1.58950 7,243,83078 20,09818 $ 2,622,86350 $ -69,47424 $ 2,553,389 26 $ 69,47424 69,47424 $ 2,301,854 78 $ 89,57242 6,071,05984 1,207,28489 5,54217 -2,581 04 FUND BALANCE JUNE 30 $ 8,372,91462 $ The notes to the general-purpose fmanclal statements are an Integral part of this statement - 4 1,299,818 44 EXHIBIT"B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 $ 326,96293 $ 41,884,796 63 $ 41,000,345.33 4,689,70616 3,024,896 73 488,09802 $ 6,414,79888 25,894,931.60 23,582,981 58 379,14296 40,66512 2,561,336 18 2,917,53636 $ 1,194,20391 $ 6,455,464 00 $ 75,030,77057 $ 70,525,76000 $ 2,632,30773 $ $ 2,632,307 73 $ $ -1,438,10382 $ $ 41,425,682.48 $ 42,251,521 67 4,425,151 67 1,885,297 71 1,365,901 37 936,72223 4,423,012.00 858,46188 3,907,61282 2,548,370 92 357,39279 242,70714 3,120,636 05 358,226.38 4,220,390 48 1,471,014 66 2,751,36159 644,96704 3,997,18874 1,164,981 68 3,506,206.38 2,444,31293 635,54598 229,29822 2,851,339 38 1,10230 3,434,377 57 4,205,000 00 1,493,759.44 4,332,089 43 1,535,950 78 3,967,32946 1,427,53008 5,698,75944 $ 75,943,60613 $ 70,778,077 68 756,70456 $ -912,83556 $ -252,31768 $ $ -800,00000 $ -800,00000 $ $ 800,00000 800,000.00 $ $ 2,622,863 50 869,47424 -869,47424 10,000,000 00 455,42280 -455,42280 2,622,863 50 $ 10,000,00000 $ -2,238,103 82 $ 10,567,901 30 1,556,704 56 $ 1,710,02794 $ 9,747,68232 6,257,42859 24,103,67462 13,366,82540 988,96970 5,54217 -2,58104 8,898.82 -8,701.62 $ 8,329,797 48 $ 7,814,13315 $ 25,816,66369 $ 24,103,67462 -5- BARROW COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES ," " BURGET AND ACTUAL - INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30, 2002 EXHIBIT "C" GENERAL FUND BUDGET ACTUAL REVENUES State Funds Federal Funds Taxes Other Funds $ 39,754,04500 $ 40,391,16697 17,499,91500 3,312,10000 18,992,034 70 733,972 03 Total Revenues $ 60,566,06000 $ 60,117,17370 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 Communrty Services Operations Capital Outlay Debt Service $ 43,591,51700 $ 39,512,65682 1,107,26900 1,666,53200 1,382.53600 741,78300 4,241,79400 759,99800 3,903,31800 2,969.00600 328,89500 2,862,589 45 1,766.694 21 1,365,09237 824,854 32 4,423,01200 858,46188 3,863,353 22 2,468,879 07 307,54530 1,34600 430,60000 2,565,13200 1,56914 356,63688 1,588,08275 169,28077 Total Expenditures $ 63,689,72600 $ 60,368,70818 Excess of Revenues over (under) Expenditures $ -3,123,66600 $ -251,534 48 OTHER FINANCING SOURCES IUSES) Other Sources Other Uses $ 2,622,863 50 -69,47424 Total Other FinanCing Sources (Uses) $ 2,553,389 26 Excess of Revenues and Other FinanCing Sources over (under) Expenditures and Other FinanCing Uses $ -3,123,66600 $ 2,301,854 78 FUND BALANCE JULY 1 2001 000 6,071,05984 Food Inventory - Net Change In Penod Donated Commodities Purchased Food FUND BALANCE JUNE 30 2002 $ -3,123,66600 $ 8,372,91462 SPECIAL REVENUE FUND BUDGET ACTUAL $ 1,297,80900 $ 1,166,666 73 5,105,02000 4,689,706 16 1,528,400 00 1,407,55607 $ 7,931,22900 $ 7,263,92896 $ 3,717,28700 $ 1,913,02566 291.44200 110,08700 82700 110.66200 1,562.56222 118,60350 80900 111.86791 25,00000 57,62400 50,34500 305,44100 3,024,76000 1,61400 44,25960 79,49185 49,84749 242.70714 3,119,066 91 1,58950 $ 7,695.08900 $ 7,243,830 78 $ 236,14000 $ 20,09818 $ 69,47424 $ 69,47424 $ 236,14000 $ 89,57242 000 1,207,284 89 5,54217 -2,581 04 $ 236,14000 $ 1,299,81844 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. 2002 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 BO~BD OF EDUCATION SCHOLARSHIP FUND, INCORPORATED TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 $ 200.00 $ 20000 $ 2,050.00 $ 50.00 $ 50.00 $ 6.51 6,983.00 6,983.00 1,060.00 $ 7,03300 $ 7,033.00 $ 1,066.51 $ -6,833.00 .$ -6,833.00 $ 983.49 2,354.41 2,354.41 3,467.16 $ -4,478.59 $ -4,478.59 $ 4,450.65 68,957.36 68,95736 64,506.71 $ 64,478.77 $ 64,478.77 $ =====6:=8:l::,9=5.7..=36== The notes to the general-purpose financial statements are an integral part of this statement. -8- BARROW COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30. 2002 EXHIBIT "E" Cash Flows from Operating Activities Donations Cash Paid for Dues and Fees Cash Pard for ScholarshIps Net Cash Provided (Used) by Operating ActIVIties Cash Flows from Investing ActiVities Purchase of Investment Secuntles Proceeds from Sale and Matunty of Investments Interest Received on Investments Net Cash PrOVided (Used) by Investment ActiVIties Net Increase (Decrease) In Cash Cash and Cash Equivalents - July 1 BARROW COUNTY, GEORGIA BOARD OF EDUCATION SCHOLARSHIP FUND, INCORPORATED TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 $ 20000 $ 20000 $ 2,05000 -5000 -5000 -651 -6,98300 -6,98300 -1,06000 $ -6,83300 $ -6,83300 $ 98349 $ -59,452.21 $ -59,45221 $ -57,11883 57,11883 57,11883 53,69567 2,354 41 2,354 41 3,46716 $ 2103 $ 2103 $ 4400 $ -6,811 97 $ -6,81197 $ 1,02749 11,838.53 11,83853 10,811 04 Cash and Cash EqUivalents - June 30 $ 5,02656 $ 5,026 56 $=~1~1~,8~38;;,;5~3~ The notes to the general-purpose financial statements are an Integral part of thiS statement -9- BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 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 Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The School District uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements. The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of the School District's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. - 10- BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, generallong-tenn 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 detennined 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-Tenn Debt Account Group. - 11 - BARROW COUNTY BOARD OF 'EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30. 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets. Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations. Governmental funds are accounted for using the modified accrual basis ofaccounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Expenditures are generally recognized when the related fund liability is incurred. A substantial number of personnel of the School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Employment contracts for these employment periods typically specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts are disbursed to the School District in the same twelve month period. In accordance with generally accepted accounting principles, salary and fringe benefit expenditures and the related revenue from the State to fund these contracts are recorded in the fiscal period covered by these financial statements. 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 - 12 - . ~I \ , BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 200i Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 2D-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations. INVESTMENTS COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds and in selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (I) 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, - 13 - BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Barrow County Board of Commissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on October 28, 2001 (levy date). Taxes were due on December 28,2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 200 I tax digest are reported as revenue in fiscal year 2002. The Barrow County Tax Commissioner bills and collects the property taxes for the School District, 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, 2002 for maintenance and operations amounted to $18,036,138.41 and for school bonds amounted to $1,077,174.99. Tax millage rates levied for the 2001 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 --.l.J.Q mills 20.60 mills SALES TAXES Special Purpose Local Option Sales Tax revenue during the year amounted to $5,779,309.53 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years. - 14 - BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVENTORIES FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets. COMPENSATED ABSENCES Compensated absences represent obligations of the 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. GENERAL OBLIGATION BONDS The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. In addition, general obligation bonds have been issued to refund existing general obligation bonds. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The School District has the following types of interfund transactions: Reimbursements ofexpenditures/expenses initially made from a fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed. Operating transfers are recorded for all interfund transactions other than reimbursements. 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 - 15 - - - - - - -=--"--'-= = = = - - - - - - BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES present financial position, results ofoperations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Note 2: DEPOSITS AND INVESTMENTS COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws 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. - 16- BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 2: DEPOSITS AND INVESTMENTS CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $26,402,095.50. The amounts of the total bank balances are classified into three categories of credit risk: Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.) The School District's deposits are classified by risk category at June 30, 2002, as follows: Risk Category Bank Balance 1 $ 5,656,342.14 2 15,741,900.16 3 5,003,853.20 Total $26.402,095.50 CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below: Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name. Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name. Category 3 - Uninsured or unregistered, with securities held by the counterparty, or by its trust department or agent but not in the School District's name. At June 30, 2002, the carrying value ofthe School District's total investments was $151.30 which is materially 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 Total Investments Risk Categories 2 3781 $ 000 $ Carrying Fair 3 Amount Value 000 $ 37.81 $ 37.81 113.49 11349 $ 15130 $ ISl31l - 17 - ---- - -------- - - - -----------~===~- BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FfNANCIAL STATEMENTS JUNE 30, 2002 Note 2: DEPOSITS AND INVESTMENTS The carrying amounts shown above includes amounts maintained in an investment pool by the State ofGeorgia, Office of Treasury and Fiscal Services in which the School District owns no identifiable securities. The investment policy ofthe State ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio and Extended Term Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows: The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. 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 of the 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 maturity for Georgia Fund 1 on June 30, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years. Note 3: NON-MONETARY TRANSACTIONS The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories Note 4: RISK MANAGEMENT The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation. - 18 - '+. BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 4: RISK MANAGEMENT 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. The School District has elected to self-insure for all losses related to acts of God. The School District has not experienced any losses related to this risk in the past three years. The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount ofthat loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 2001 2002 Beginning of Year - Liability Claims and Changes in Estimates Claims Paid End of Year Liability $ 0.00 $ 9,880.39 $ 9,880.39 $ 0.00 $ 0.00 $ 6,545.96 $ 6,545.96 $ 0.00 The School District has purchased a surety bond to provide additional insurance coverage as follows: Position Covered Amount Superintendent $ 100,000.00 Note 5: GENERAL LONG-TERM DEBT CAPITAL LEASES The Barrow County Board of Education has entered into various lease agreements as lessee for school bus purchases, copiers and buildings. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception. GENERAL OBLIGAnON DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: - 19- BARROW COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 5: GENERAL LONG-TERM DEBT Purpose Interest Rates General 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 2,180,000.00 9,660,000.00 5,340,000.00 2,175,000.00 $29.355,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as . follows: Balance July 1,2001 Additions Capital Leases Annual Leave Earned and Utilized (Net) Deductions Debt Retired Balance June 30, 2002 CapItal Leases Compensated Absences General Obligation Bonds Total $ 466,732.78 $ 139,482.33 $33,560.000.00 $34,166,215.11 2,622,863.50 92,875.24 2,622,863.50 92,875.24 127.089.43 4.205,000.00 4.332,089.43 $ 296250685 $ 23235757 $29355,00000 $32 549 864 42 At June 30, 2002, 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 2003 2004 2005 2006 2007 2008 - 2012 2013 - 2015 $ 514,294.1 0 530,556.07 423,743.14 318,008.50 315,905.00 1,570,745.00 $ 6,423,760.00 4,121,190.00 4,112,865.00 4,126,155.00 4,132,955,00 9,480,870.00 5,765,240,00 $ 6,938,054.10 4,651,746.07 4,536,608.14 4,444,163.50 4,448,860.00 11,051,615.00 5,765,240.00 Total Principal and Interest $ 3,673,251.81 $38.163.035.00 $41.836,286.81 Deduct: Imputed Interest 710,744.96 Net Present Value of Future Minimum Lease Payments $ 2,962,506.85 - 20- BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 6: SHORT-TERM DEBT The School District obtains temporary loans in advance of property tax collections, depositing the proceeds in its General Fund. This,short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia limits the aggregate amount of short-term debt to 75 percent of the 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 $ 105,939.36 $====O~'.OO~ $ 52,107.26 $ 53.832.10 Note 7: ON-BEHALF PAYMENTS The School District has recognized revenues and expenditures in the amount of $689,842.05 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 $581 ,990.41 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $21 ,032.64 Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of$86,819.00 Note 8: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2002, together with funding available: - 21 - BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 Note 8: SIGNIFICANT COMMITMENTS Project Unearned Executed Contracts Funding, Available From State Southwest Barrow Elementary School Renovations of Auburn, Holsenbeck and Stathem Elementary School Additions to Bramlett, Kennedy and Yargo Elementary Schools New Barrow County High School GSFIC 99/98S-607-001 Winder Barrow County High School Additions GSFIC 03/02S-607-001 $ 409,997.74 405,401.00 4,201,278.87 1,538,340.36 $ 257,095.30 3,343,779.16 952,423.07 $ 9,898.797.13 $ 1.209.518.37 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 financial 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 $2 million dollars. The School District currently holds $1.2 million dollars as retainage payable as of June 30, 2002. Note 10: SUBSEQUENT EVENTS In the subsequent fiscal year, the School District issued general obligation bonds in the amount of $8,165,000.00 dated April 30, 2003. The proceeds from these bonds will be used for new school construction, renovations and technology purchases. Note 11 : ACCUMULATED EMPLOYEES' LEAVE The School District has a personnel vacations policy which grants employees that retire, resign or are terminated, payment of up to fifteen days for all earned unused vacation leave at a sum equal to the number of vacation days times the employee's daily rate of pay at the date of departure. See Note 1 - Compensated Absences - 22- BARROW COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS JUNE 30, 2002 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 of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2002 2001 2000 100% 100% 100% $ 3,413,671.58 $ 3,607,448.31 $ 3,238,565.33 - 23 - BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2002 ASSETS Cash and Cash Equivalents Accounts Receivable Inventorres Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 1,153,105.78 $ 31,018.20 7,657.80 143,871.94 42,008.84 28,636.26 Total Assets $ 1,231,408.68 $ ==1=:7=4l,;;:,8=90=:',;,,14= LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Deferred Revenue 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 Undeslgnated Total Fund Equity Total Liabilities and Fund Equity See notes to the general-purpose financial statements - 24- $ 22,594.88 $ 166,596.49 17,160.24 76,194 74 $ 189,191.37 $ 93,354.98 $ $ 42,00884 28,636.26 971,572.21 $ 1,042,217.31 $ 81,53516 000 81,53516 $ 1,231,408.68 $ ==1=7=4,=::8.9.0..,==.1=4= EXHIBIT"G" FEDERAL, , PROGRAMS TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 1,184,123,98 $ 1,278,053 34 $ 2,231,610.57 2,383,140.31 985,936.39 42,00884 28,636.26 47,55101 26,055.22 $ 2,231,61057 $ 3,637,909.39 $ 2.337,595.96 $ 1,753,593.16 $ 1,753,59316 $ 60,47336 100,22848 240,80135 483,59258 67673 67673 518,556.20 219,16215 342,308.52 50,28420 $ 2,055,544.60 $ 2,338,090.95 $ 1,130,311.07 $ 176,065.97 $ 257,601.13 $ 257,601.13 42,008.84 28,63626 47,551 01 26,05522 0.00 971,572 21 876,077 53 $ 176,06597 $ 1,299,818.44 $ 1,207,28489 $ 2,231,610.57 $ 3,637,90939 $ 2,337,595.96 - 25- BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Admimstration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Commumty Services Operations Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Operating Transfers In Excess of Revenues and Other Financing Sources over (under) Expenditures FUND BALANCE JULY 1 Software Conversion Variances Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 See notes to the general-purpose financial statements. - 26- SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 215,782.00 $ 1,586,041.26 1,406,816.07 $ 3,208,639.33 $ 950,884.73 950,88473 $ 813,468.26 85,259.00 17,695.53 520.14 44,259.60 $ 3,119,066.91 1,572.14 $ 3,119,06691 $ $ 89,572.42 $ 962,77467 -11,889.94 $ 89,572.42 $ 949,683.76 11,889.94 0.00 81,53516 5,54217 -2,581.04 $ 1,042,217.31 $ ===8=1=,5=35=:.=16= EXHIBIT"H" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30. 2002 JUNE 3D, 2001 $ $ 3.103,664.90 _ _ _..;.7..;.40=..;;.;00;;;.. $ 3.104.404.90 $ 1,166,666.73 $ 4.689,706.16 1,407,556.07 7.263,928.96 $ 962,23388 3,024.896.73 1.381,361.07 5,368.491.68 $ 1,099,55740 $ 1.913,025.66 $ 1.871,095.91 1,477,303.22 100.907.97 809.00 111,347.77 79,491.85 49,84749 241,135.00 1,58950 1,562.562.22 118,60350 809.00 111,867.91 44.259.60 79,49185 49,847.49 242.70714 3.119,066 91 1,589.50 188.625.32 63,58882 114.758.83 31,368.00 1,723.52 229.298.22 2,851.067.60 1,10230 $ 3.161,989.20 $ 7.243,83078 $ 5.352,628.52 $ -57.584.30 $ 20,09818 $ 15.863.16 57,584.30 69,474.24 3,204.02 $ 000 $ 89,572.42 $ 19,067.18 176.065.97 1,207,284.89 987.00561 201.014.90 5.542.17 -2.581.04 8,898.82 -8,701.62 $ 176.065.97 $ 1,299,818.44 $ 1.207.28489 - 27- -- ----_._---- BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2002 ASSETS Cash and Cash Equivalents Investments Accounts Receivable BOND PROCEEDS GEORGIA STATE FINANCING AND INVESTMENT COMMISSION $ 7,232,090.40 $ 770,278.73 11349 3,808.39 326,962,93 Total Assets $ 7,236.012.28 $ ===-1,=09=:7::1::,2=4,;,;,1.=66= LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Retainages Payable Total liabilities FUND EQUITY Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undeslgnated Total Fund Equity Total liabilities and Fund Equity $ 21,267.40 $ 161,34230 1,075,974.26 $ 161,34230 $ 1,097,241.66 $ 7,074,66998 0,00 $ 000 $ 7,074,66998 $ 000 $ 7,236,01228 $===-1,=09=:7::1::,2=4,,;.,1=66= See notes to the general-purpose financial statements, - 28- EXHIBIT "I" SPECIAL PURPOSE LOCAL OPTION SALES TAX LOTIERY PROJECT TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 148,266.60 $ 1,122,11000 $ 9,272,74573 $ 10,977,57380 113.49 110.77 330,771.32 980,287.90 $ 148,266.60 $ 1,122,11000 $ 9,603,63054 $ 11,957,972.47 $ _ _.....:1..::;.5=,2...:..49::......:...:01:.... $ _ _.....:1..::;.5=,2...:..49::......:...:1O=- $ 126,698.55 $ 21,267.40 47,942.06 1,252,565.66 1,215,43056 $ 1,273,833.06 $ 1,390,071.17 $ 7,074,669.98 $ 9,722,483.84 $ 133,017.50 133,01750 845,417.46 $ 1,122,110.00 1,122,11000 000 0.00 0.00 000 $ 133,01750 $ 1,122,11000 $ 8,329,797.48 $ 10,567,901.30 $ 148,26660 $ 1,122,11000 $ 9,603,63054 $ 11,957,97247 - 29- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - . _------------~~.=~- BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2002 REVENUES State Funds 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 $ $ 368,639.36 $ 368,639.36 $ 326,962.93 1.92 326,964.85 $ $ 411,190.22 1,822.00 915,28578 604.534.28 21,227.80 $ 413,012.22 $ 1,541,04786 $ -44,372.86 $ -1,214,083.01 $ $ -2,603,441.00 $ -2,603,441 00 $ 1,214,083.01 1,214,083.01 $ -2,647,813.86 $ 0.00 9,722,483.84 0.00 $ 7,074,669.98 $=====,0...0=0= See notes to the general-purpose financial statements - 30- EXHIBIT"J" SPECIAL PURPOSE LOCAL OPTION SALES TAX LOTTERY PROJECT TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001 $ $ 488,098.02 10,50168 $ 498,599.70 $ 0.00 $ O;::....::..OO~ $ 326,962.93 $ 488,098.02 379,142.96 1,194,203.91 $ 885,284.10 3,258,009.04 130,390.03 4,273,683.17 $ 19,525.00 $ 658.722.65 $ 678,24765 $ $ -179,64795 $ $ 0.00 $ 934,810.78 1,674.447.15 23.049.80 0.00 $ 2,632,307.73 $ 0.00 $ -1,438,10382 $ 403,022.17 181,338.12 2,882,651.90 11,107.64 3,478,119.83 795,56334 $ 9,734.590.64 $ 1,122,110.00 $ 2,336,193.01 2.339,120.29 $ -532,752.01 -3,136,193.01 -2,791,339.07 $ -532,75201 $ 1,122,110.00 $ -800,000.00 $ 9.282,371.86 $ -712,399.96 $ 1,122,110.00 $ -2,238,10382 $ 10,077,93520 845,417 46 000 10,567,901.30 489,96610 $ 133,017.50 $ 1,122,110.00 $ 8,329.79748 $ 10,567,901.30 - 31 - ----------------~~~~==--- BARROW COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2002 EXHIBIT"K" ASSETS Cash and Cash EqUIvalents Investments Accounts Receivable PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 144,89950 $ 6,506,78689 $ 6,651,68639 $ 6,183,19936 3781 3781 3774 50,55855 1,111,850 40 1,162,40895 74,191-49 Total Assets $ 195,45805 $ 7,618,675_10 $ 7,814,13315 $ 6,257,42859 FUND EQUITY Fund Balances Reserved For Debt Service Unreserved Undeslgnated $ 195,45805 $ 7,618,67510 $ 7,814,13315 $ 6,257,428.59 000 _ _ _ _0.=...::.00::_ 000 000 Total Fund EqUity $ 195,458 05 $ 7,618,67510 $ 7,814,13315 $ 6,257,42859 See notes to the general-purpose financial statements - 32- . - - BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES DEBT SERVICE FUND YEAR ENDED JUNE 30, 2002 EXHIBIT "L" REVENUES Taxes Other Funds Total Revenues EXPENDITURES Debt Service PnnClpal Interest Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES Proceeds from General Obhgabon Bonds Par Value Operabng Transfers In Total Other FinanCing Sources Excess of Revenues and Other FinanCing Sources over (under) Expenditures FUND BALANCE JULY 1 FUND BALANCE JUNE 30 PROPERTY TAXES FOR BOND DEBT SPECIAL PURPOSE LOCAL OPTION SALES TAX TOTALS YEAR ENDED JUNE 30. 2002 JUNE 30. 2001 $ 1.123,587 37 $ 5.291.211 51 $ 6,414.79888 $ 3.332,542 37 40,66512 40.66512 298,617 11 $ 1,123,587.37 $ 5.331,87663 $ 6,455,464 00 $ 3,631.15948 $ 840.00000 $ 3,365.000 00 $ 4,205.000 00 $ 3.820,000 00 955,52500 538.234 44 1,493.759.44 1,390.822 50 $ 1,795.52500 $ 3.903,234 44 $ 5.698,75944 $ 5.210.82250 $ -671,93763 $ 1.428.642 19 $ 756.704 56 $ -1.579,663 02 $ 800,00000 $ 800.00000 $ 265.40936 $ 800,00000 452.21878 $ 800.00000 $ 717.62814 $ 128.06237 $ 1.428,642 19 $ 1.556.704 56 $ -862.034 88 67.39568 6,190.03291 6,257,42859 7.119,46347 $ 195,45805 $ 7.618,67510 $ 7,814.13315 $ 6.257.42859 See notes to the general-purpose finanCial statements - 33- BARROW COUNTY BOARp OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES -- JUNE 30 2002 EXHIBIT"M" Cash and Cash EqUivalents Investments Accounts Receivable NONEXPENDABLE TRUST FUND BARROW COUNTY, GEORGIA BOARD OF EDUCATION SCHOLARSHIP FUND. INCORPORATED AGENCY FUNDS TOTALS JUNE 30, 2002 JUNE 30, 2001 $ 5.02656 $ 10,64689 $ 15.67345 $ 22.72585 59.45221 1,31095 60,76316 58,37552 81273 81273 1148 Total Assets $ 64,47877 $ 12,77057 $ 77,249 34 $ -======8=1,-=1,;,;12=8=5", LIABILITIES AND FUND EaUITY LIABILITIES Accounts Payable Funds Held for Others Total liabilities FUND EaUITY Fund Balances Reserved For Endowment Corpus $ Unreserved Undeslgnated Total Fund EqUity $ $ 72 00 $ 7200 $ 31117 12,69857 12,69857 11.844 32 $ 12,77057 $ 12,77057 $ 12,15549 14,91468 49,564 09 64,47877 $ 14,91468 $ 14,91468 49,564 09 54,04268 $ 64,47877 $ 68,95736 Total Liabilities and Fund EqUity $ 64,47877 $ 12,77057 $ 77,249 34 $ =====8,;,;,1,=11=2=85= See notes to the general-purpose financial statements - 34- BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2002 EXHIBIT"N" BOARD MEMBER'S SPECIAL ACCOUNT ASSETS Cash and Cash Equivalents Accounts Receivable Total Assets LIABILITIES Accounts Payable Funds Held for Others Total liabilities MURRAY KENNEDY MEMORIAL FUND ASSETS Cash and Cash EqUivalents LIABILITIES Funds Held for Others SUNSHINE FUND ASSETS Cash and Cash EqUivalents LIABILITIES Funds Held for Others BALANCE JULY 1, 2001 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 2002 $ 4,938.21 $ 5,96523 $ 11 48 4,87663 $ 462 6,02681 686 $ 4,94969 $ 5,96523 $ 4,881 25 $==~6,~03~3~6;;,;,7= $ 311 17 $ 4,63852 $ 5,96523 239.17 $ 4,64208 7200 5,96167 $ 4,949.69 $ 5,96523 $ 4,881 25 $==~6,,;;;,0~33~6;;,;,7= $ 000 $ 687 $ 000 $ ===~6~87~ $ 000 $ 687 $ 000 $ ===,;;;,6,;;;,87~ $ 6920 $ 000 $ 000 $==~6~9~20~ $ 6920 $ 000 $ 000 $ ===,;;;69;;;,,;:;20~ - 35- BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY F-UND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2002 EXHIBIT"N" HARRIETI NOWELL SCHOLARSHIP FUND ASSETS Cash and Cash Equivalents Investments BALANCE JULY 1, 2001 ADDITIONS DEDUCTIONS BALe-NCE JUNE 3D, 2002 $ 33669 $ 1,25669 640 $ 5426 000 $ 343,09 1,31095 Total Assets $ 1,593,38 $ 6066 $ 00 $ ===-1,=654====04== LIABILITIES Funds Held for Others $ 1,593,38 $ 6066 $ 0.00 $ ===-1,=654====04== LIBRARY ENRICHMENT FUND ASSETS Cash and Cash EqUivalents $ 2,31500 $ 000 $ 000 $ ===-2,=3=15,=0=0,= LIABILITIES Funds Held for Others $ 2,31500 $ 000 $ 0,00 $ ===-2,=3=15,=0=0,= STUDENT SERVICE CENTER ASSETS Cash and Cash EqUivalents $ 75065 $ 37255 $ 564 28 $ ====55;;,;8;,;9;;;2;", LIABILITIES Funds Held for Others $ 75065 $ 37255 $ 564 28 $===5=5=8=92= - 36- BARROW COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2002 EXHIBIT"N" TEACHER OF THE YEAR ASSETS Cash and Cash EqUivalents Accounts Receivable Total Assets BALANCE JULY 1, 2001 ADDITIONS DEDUCTIONS BALANCE JUNE 30, 2002 $ 0.00 $ 11,40000 $ 12,205.87 $ -80587 000 805.87 80587 $ ==~O,;;,;00;" $ 12,205 87 $ 12,205 87 $===:::O;,;O~O:", LIABILITIES Funds Held for Others $==~O~OO;;" $ 12,20587 $ 12,205 87 $===~O,:;:,;OO~ BCAEOP ASSETS Cash and Cash EqUIvalents $ 2,477 57 $ 29000 $ 634 70 $==;;o2,:;,;13~2;,,;8~7= LIABILITIES Funds Held for Others $ 2,477 57 $ 29000 $ 634 70 $ ==;;o2,:;,;13~2;,;;.8~7= TOTALS - AGENCY FUNDS ASSETS Cash and Cash EqUivalents Investments Accounts Receivable Total Assets $ 10,887.32 $ 18,041 05 $ 1,25669 54.26 1148 80587 18,28148 $ 462 10,64689 1,31095 81273 $ 12,15549 $ 18,901 18 $ 18,28610 $=~1~2!,;"7,;.70~57;.,, LIABILITIES Accounts Payable Funds Held for Others TotalLJablhtles $ 311 17 $ 11,84432 $ 18,90118 23917 $ 18,04693 7200 12,69857 $ 12,155 49 $ 18,901 18 $ 18,28610 $=~1~2!,;"7,;.70~57;.,, See notes to the general-purpose financial statements - 37- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2002 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Agnculture. U S Department of Child Nutnbon Cluster Pass-Through From Georgia Department of Education Food and Nutntlon Program Food Services School Breakfast Program National School Lunch Program Total Child Nutrition Cluster Other Programs Pass-Through From Georgia Department of Educallon Food and Nutntlon Program Food Dlstnbubon Program (1) Total U S Department of Agncullure Education, U S Department of Special Education Cluster Pass-Through From Georgia Department of Education IndiViduals WIth Disabilities Education Act Part B Special Education Flow Through Preschool CapaCIty Building Improvement Total Special Educallon Cluster Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Tille I Grants to Local Educational Agencies Title II Eisenhower ProfeSSional Development 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 Total U S Department of Education CFDA NUMBER PASSTHROUGH ENTITY 10 NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 10,553 10.555 N/A $ 295,804 36 (2) N/A 1,104,431 64 $ 2,933,261 65 (3) $ 1,400,236 00 $ 2,933.261 65 10550 NlA 185,80528 185,80526 $ 1.586.041 26 $ 3.119,066.91 84.027 84173 84.027 NlA $ 1,156,849 63 $ 1,156,849 63 N/A 76,18833 76.18833 (3) NlA 37,18313 37,18313 $ 1,270,221 09 $ 1,270.221 09 84 010 84 281 84.298 84 340 84186 84 048 NlA 1.411,636.24 1.411.63624 NlA 35,34532 35,34532 N/A 42,86722 42,867 22 (3) NlA 254,10744 254,10744 N/A 34.13859 34,13859 NlA 55,349.00 113,673 30 (3) $ 3.103,664 90 $ 3,161,989.20 Total Federal FinanCIal ASSistance N/A = Not Available $ 4.689.70616 $===6,=28=1=,0=5=6.=1=1 - 38- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 2002 SCHEDULE "1 n Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food DIstributIon Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dunng the current fiscal year. (2) Expenditures for the School Breakfast Program were not maintained separately and are Included In the 2002 Nallonal School Lunch Program (3) Expenditures for this program Include State. and/or Other Funds ExpendItures are not maintained by fund source Major Programs are Idenllfied by an astensk (0) In front of the CFDA number The School Dlstnct did not provide Federal ASSIstance to any Subreciplent The accompanYing schedule of expenditures of Federal awards Includes the Federal grant activity of the Barrow County Board of Education and IS presented on the modified accrual basis of accounllng which IS the baSIS of accounting used In the presentation of the general-purpose financial statements See notes to the general-purpose finanCIal statements - 39- ------------------- --------- ---- ---- ----------- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality BasIc Educalion Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervenlion Program Pnmary Grades (1-3) Program Pnmary Grades - Early Intervenlion (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades Early Intervention (45) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students WIth Dlsabllilies Category I Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) 20 Days Additional Instruction Media Center Program Staff and Professional Development Indirect Cost Categoncal Grants Pupil Transportation RegUlar Bus Replacement Sparsity Nursing Services PrinCipal Supplements Vocational SUperviSOrs Deferred Summer Salanes Current Year Deferred Summer Salanes - Pnor Year Education Equalization Funding Grant Food Services Vocational Education Other State Programs Apprenticeship Program EnVironmental SCIence Program Health Insurance Mentor Teachers National Teacher Certification Pay for Performance Preschool Handicapped Program ReSidential and Reintegration Student Achievement Teachers' Retirement Lottery Programs Computers In the Classroom Technology Installation Georgia Department of Human Resources Second Step Program Georgia State FinanCing and Investment CommiSSion Reimbursement on Construction Projects Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 2,373,639 00 361,52800 5,779,23900 718,10200 2,836,56800 386,50300 4,649,88600 3,131,55100 1,382,89400 4,575,39600 338,877 00 177,97900 333,92300 315,52300 249,141 00 840,92500 161,64200 5,024,477 00 1,044,46900 259,417 00 12,00000 184,41900 38,25600 57,72800 4,851,57600 -4,756,13631 3,292,624 00 $ 374,02542 215,78200 35,00000 2,784 99 581,99041 24,02100 18,50400 192,00000 116,43800 82,69600 45,55200 21,03264 252,25715 18,66548 1,44063 $ 2,373,639 00 361,52800 5,779,23900 718,10200 2,836,568 00 386,50300 4,649,886 00 3,131,551 00 1,382,894 00 4,575,39600 338,877 00 177,97900 333,92300 315,52300 249,14100 840,92500 161,64200 5,024,477 00 1,044,469 00 259,417 00 12,00000 184,41900 38,25600 57,72800 4,851,57600 -4,756,136 3~ 3,292,624 00 215,78200 374,02542 35,00000 2,784 99 581,99041 24,021 00 18,50400 192,00000 116,43800 82,69600 45,55200 21,03264 252,25715 18,66548 1,44063 86,81900 $ 326,96293 679,96210 326,96293 679,96210 86,81900 - 40- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2002 SCHEDULE "2" AGENCY/FUNDING CONTRACTS Education, Georgia Department of 4-8 Statewide After School Program K-3 Statewide Reading Program GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL s 75,36160 111,35559 s 75,361 60 111,35559 S 40,391,16697 S 1,166,66673 S 326,96293 S 41,884,79663 See notes to the general-purpose finanCial statements - 41 - BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30, 2002 SCHEDULE "3" PROJECT ProVide funds to payor to be applied toward the cost of the repayment of a portion of the pnnClpal and Interest on the School Dlstnct's Senes 1973, Senes 1990, Senes 1993, Senes 1995A and Senes 1995B Bonds coming due February 1, 1998, through and including August 1,2002, the maximum amount of debt to be rellred not to exceed $3,250,000 00 ProVide funds to payor to be applied toward the cost of the acqUIsition, construction and equipping of a new high school and necessary furnishings and construction and eqUipping of a new elementary school, land for future school SIles and renovallons and modlficallons of all eXlsbng schools, Including the acqulsilion of all necessary property, the maximum cost of such projects not to exceed $17,750,000 00 Provide funds for the acqUlSIlJOn, construction and eqUipping of two or more new elementary schools, including necessary furnishings and eqUipment, additions, renovallons and Improvements at eXlsbng schools, system-WIde technology Improvements and the acqUIsition of land for addlbonal schools, the maximum cost of such projects not to exceed $34,000,000 00 ProVide for the payment of pnnClpal and Interest on the School Dlstnct's Senes 1993, 1995A and 1995B Bonds, coming due August 1, 2002 through and Including February 1, 2007, the maximum amount of debt to be rellred not to exceed $9,000,000 00 ESTIMATED ORIGINAL COST (1) CURRENT ESTIMATED COST (2) AMOUNT EXPENDED IN CURRENT YEAR (3)(4) AMOUNT EXPENDED IN PRIOR YEARS (3) (4) PROJECT STATUS $ 3,250,000 00 $ 3,250,00000 $ 1,795,52500 $ 452,21878 Ongoing 17,750,00000 19,175,254 42 532,75201 18,642,50241 Ongoing 34,000,000 00 34,000,000 00 1,717,04170 9,000,000 00 9,000,00000 Ongoing Ongoing $ 64,000,000 00 $ 65,425,254 42 $ 4,045,31871 $ 19,094,721 19 (1) The School Dlstnct's onglnal cost esllmate as speCIfied In the resolullon calling for the Imposillon 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 and rellre associated debt Amounts expended for these projects may Include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects (4) In addition to the expenditures shown above, the School Dlstnct has Incurred Interest to prOVide advance funding for the above projects as follows PnorYears $ 2,095,921 88 Current Year Total 538,23444 $ 2,634,156 32 See notes to the general-purpose finanCial statements -43 - BARROW COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBEl ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2002 SCHEDULE "4" DESCRIPTION Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervenllon Program Pnmary Grades (1-3) Program Pnmary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades-Early Intervenllon (4-5) Program Middle Grades (6-8) Program Middle School (6-8) Program High School General Education (9-12) Program Vocallonal 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 Media Center Program Staff and ProfeSSional Development ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) - ELIGIBLE QBE PROGRAM COSTS SALARIES OPERATIONS TOTAL $ 2.661,13600 $ 2,942,209 25 $ 52,64555 $ 2,994.854 80 405.317 00 783,77987 8.485.27 792,26514 6,479.225 00 6,373,433.26 283.13700 6,656,570 26 805,07900 1,555.446 98 9,24642 1,564,69340 3.173,12300 3,794,47853 146,66691 3,941,14544 440,32800 5.213,084 00 3.510.847.00 1,550,392 00 5,129,57400 379.92300 199,53600 374,36800 353,74100 764,10890 20959 4,360.276 52 4,435,00566 1.203,288 66 15.63603 943,73696 4.342,61814 116.06062 99,62535 432.02100 246.97053 233,681.63 299,69991 1,19891 248,72338 383,84206 390,23905 120,81044 13,52610 51,927.63 11.088.88 17.48093 9,20777 2,74304 5.38009 1,14708 765.307.81 20959 4,608.99990 4.818.84772 1,593,527 71 136.44647 957,26306 4.394,545 77 127.149,50 117.10628 441.22877 249,71357 239.06172 300.84699 $ 30,675,673 00 $ 32,942.287 39 $ 1.757,49651 $ 34.699,78390 942,77600 181,22100 1,046.868 83 83.38076 298,70850 160.934 34 1,345,577 33 244,31510 TOTALQBE FORMULA FUNDS $ 31,799.67000 $ 34,072,53698 $ 2,217.139.35 $ 36.289,67633 (1) Compnsed of State Funds plus Local Five Mill Share See notes to the general-purpose finanCial statements - 44- -, BARROW COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE) ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002 SCHEDULE "5" Apalachee High School Kennedy Elementary School Bramlett Elementary School Westside Middle School Russell Middle School Yargo Elementary School Auburn Elementary School Bethlehem Elementary School Winder-Barrow Middle School County Line Elementary School Winder-Barrow High School Holsenbeck Elementary School Statham Elementary School Central Office (Altemative Education Program) 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 $ 3,033,945.00 $ 3,661,12514 2,572,307.00 3,062,581.15 2,585,177.00 2,918,267.77 2,201,507.00 2,209,832.60 2,303,146.00 2,156,966.25 2,031,257.00 2,466,693.74 1,776,672 00 2,272,348.80 1,575,511.00 1,954,14512 2,120,991.00 2,178,583.75 1,537,044.00 1,801,414.00 3,853,138.00 4,558,620.38 2,441,625.00 3,007,648.82 2,268,985 00 2,451,335.06 374,36800 221.32 $ 30,675,673 00 $ 34,699,78390 See notes to the general-purpose financial statements. - 45- I ~ I SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS RUSSELL W. HINTON STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washmgton Street, S.W. Suite 214 Atlanta, Georgia 30334-8400 July 25, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Barrow County Board of Education REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Ladies and Gentlemen: We have audited the financial statements of Barrow County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated July 25,2003. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We did not observe the taking ofeither the Federal donated commodities inventory or the purchased foods inventory at June 30, 2002, 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 perfonned tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. 2002YB-40 Internal Control Over Financial Reporting In planning and perfonning our audit, we considered Barrow County Board of Education's internal control over financial reporting in order to detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Barrow County Board of Education's ability to record, process, summarize and report financial data consistent with assertions of manageme!1t in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6071-02-01 and FS-6071-02-03. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the nonnal course of perfonning their assigned functions. Our consideration 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 item FS-6071-0203 to be a material weakness. This report is intended solely for the infonnation and use of the management, members of the Barrow County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~~ Ru sell W. Hinton St e Auditor RWH:gp 2002YB-40 RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.W. SUIte 214 Atlanta, Georgia 30334-8400 July 25, 2003 Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Barrow County Board of Education REPORT ON COMPLIANCE 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 of Barrow County Board of Education with the types ofcompliance u.s. requirements described in the Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2002. Barrow County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of 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 of compliance in accordance with auditing standards generally accepted in the United States of America; 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-I33 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. 2002SA-40 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 of its major Federal programs for the year ended June 30, 2002. 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 of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-I33. 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-607I-02-0I. 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 a material weakness. This report is intended solely for the information and use of the management, members of the Barrow County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, RWH:gp 2002SA-40 SECTION III AUDlTEE'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, 2002 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6071-00-0 1 FS-6071-00-05 FS-6071-00-06 FS-6071-00-07 FS-6071-00-08 FS-6071-0 1-0 1 FS-6071-01-02 FS-6071-0 1-03 FS-6071-0 1-04 FS-6071-01-05 Previously Reported Corrective Action Implemented Further Action Not Warranted Unresolved - See Corrective Action/Responses Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - No Corrective Action Implemented Previously Reported Corrective Action Implemented CORRECTIVE ACTIONIRESPONSES 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 report, along with other supporting reports, validate the expenditure of these funds (total of$605,916.92 expended during Fiscal Year 1999-2000 which exceeds fund drawn down.) Therefore, the School District does not agree with this deficiency. It is our understanding that Georgia Department of Audits and Accounts personnel used General Ledger reports during audit fieldwork and that may provide the explanation for these differences. The auditors were provided with copies ofthese completion reports and our supporting documentation. Copies of this documentation will be made available to Georgia Department ofEducation Financial Review personnel to facilitate their review of this deficiency. GENERAL LEDGER Unrecorded Outstanding Loan Finding Control Number: FS-6071-01-02 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 - 1- BARROW COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES GENERAL LEDGER Unrecorded Outstanding Loan Finding Control Nwnber: FS-6071-01-02 structured as a normal five-year note without provision for State ofGeorgia temporary loan provisions. After this purchase, this note would have to be restructured or paid off to change existing provisions. Given the terms and favorable interest rate of this loan, this loan will be carried until paid out. The final payment for this loan will be made on January 31, 2003 in the amount of $57,723.91. This loan will then be closed. GENERAL LEDGER Detail of Salary and Travel not Reconciled to the General Ledger Finding Control Nwnber: FS-6071-01-03 While the salary detail was successfully reconciled to the General Ledger, the employee travel could not be completely reconciled. Some group expenditures and use of credit cards to pay multiple travel invoices presented difficulties in this area. Changes have been made in travel procedures that should address these difficulties. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6071-01-04 A fixed asset accounting system has been purchased by the School District and a valuation consultant has already performed a review of all School District assets. Fixed assets valued at more than $5,000.00 are being set up in the financial accounting system so that beginning balances for all fixed asset accounts can be entered as of June 30, 2002 as required by GASB 34 provisions. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FA-6071-00-02 FA-6071-01-01 Unresolved - See Corrective ActionJResponses Previously Reported Corrective Action Implemented -2- ....... :' BARROW COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES REPORTING Erroneous Project Completion Reports ($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 accurately reflect revenues and expenditures. Expenditure reports 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 of these programs include: Special Education Cluster - It appears that the voiding of some 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 II - It appears that some programs expenditures were missed. Title III - It appears that Program 1822 expenditures were not included. Staff development 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 Georgia Department of Audits and Accounts personnel used General Ledger reports during audit fieldwork and that may provide the explanation for these differences. The auditors were provided with copies ofthese completion reports and our supporting documentation. Documentation was made available to Georgia Department of Education Financial Review personnel for their review ofthis deficiency and this office accepted this documentation. -3- SECTION IV FINDINGS AND QUESTIONED COSTS BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Barrow County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit 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. General Ledger General Fixed Assets Of the reportable conditions described above, General Fixed Assets is considered to be a material weakness. 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. Equipment and Real Property 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 of Education's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-I33 The Barrow County Board of Education's audit disclosed an audit finding required to be reported by section .51 O(a) ofOMB Circular A-I33. This audit finding is included in section IV of this report. -I - - - - ------ - - - - - - - BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 I SUMMARY OF AUDITOR'S RESULTS 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.027 Individuals with Disabilities Education Act - Part B - Special EducationFlow 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 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Barrow County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133. II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER Unrecorded Outstanding Loan Reportable Condition Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-02-01 On December 31, 2001, the General Fund had an unrecorded loan outstanding in the amount of $105,939.36. This loan was not repaid at December 31,2001, as required by Article IX, Section V, Paragraph V of the Constitution of the State of Georgia which provides, in part, as follows: "The governing authority ofany county, municipality or other political subdivision ofthis state may incur debt by obtaining temporary loans in each year to pay 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 outstanding loan payable of$53,832.1 0 at June 30, 2002. The School District's failure to record the loan occurred because the School District did not establish accounting procedures to ensure compliance for maintenance of liabilities within the General Fund as required by Chapter 35 ofthe Financial Management for Georgia Local Units ofAdministration. Repayment ofthe loan should be made in conformity with the above quoted constitutional provision. -2- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER Unrecorded Outstanding Loan Reportable Condition Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-02-01 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. After this purchase, this note would have to be restructured or paid off to change existing provisions so given the terms and favorable interest rate of this loan this loan was carried until paid out. The final payment for this loan was made on January 31, 2003 in the amount of$57,723.91 and this loan is now closed. GENERAL LEDGER Detail of Travel Not Reconciled to the General Ledger Nonmaterial Noncompliance Repeated From Prior Year Finding Control Number: FS-6071-02-02 The detail of travel by individual submitted to the Georgia Department of Audits and Accounts by the School District, as required by the Official Code of Georgia 50-6-27, was not reconciled to the General Ledger as presented for audit. After performing extensive audit procedures, an unidentified variance of$25,658.02 for travel remained between the detail and the general ledger. These amounts are reflected in the Schedule of Salaries and Travel, which is issued under separate cover. This condition occurred because management did not ensure that amounts submitted to the Georgia Department of Audits and Accounts were reconciled to the School District's general ledger. Administrative procedures should be implemented to ensure that the detailed listing of travel is reconciled to the School District's general ledger prior to submission to the Georgia Department of Audits and Accounts as required. Management's Response: While the salary detail was successfully reconciled to the General Ledger, the employee travel could not be completely reconciled. Some group expenditures and use ofcredit cards to pay multiple travel invoices presented difficulties in this area. Changes have been made in travel procedures that should address these difficulties. -3- ---------------------------- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 II 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-607l-02-03 The Barrow County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the fonnal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements ofthe 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. Management's Response: A fixed asset accounting system has been purchased by the School District and a valuation consultant has already perfonned a review ofall School District assets. Fixed assets valued at more than $5,000 have been set up in the financial accounting system so that beginning balances for all fixed asset accounts can be entered as of June 30, 2003 as required by GASB 34 provisions. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Reportable Condition Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-607l-02-0l The equipment and real property management records maintained by the School District for the Special Education Cluster (CFDA 84.027 and 84.173) were incomplete and failed to meet property management standards set forth in chapter 41 ofthe Financial Management for Georgia Local Units of Administration (FMGLUA), issued by the Georgia Department of Education. The equipment records as presented for audit failed to include acquisition cost, date acquired, location, funding source or a specific identifier. The annual physical inventory count was not properly conducted to ensure the accuracy of equipment records. -4- BARROW COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Reportable Condition Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-6071-02-01 These conditions occurred because management failed to maintain complete equipment and real property management records and failed to ensure that physical inventory counts were properly performed and reconciled to property management records. An inventory system should be implemented that provides for complete inventory records and identification of all equipment as outlined in FMGLUA. An annual physical count should be performed and reconciled to the equipment records to ensure the accuracy of inventory records. Management's Response: All property that exceeds the $5,000 fixed asset threshold will be maintained through the fixed asset system (see Finding Control Number FS-6071-02-03 above). The School District will also utilize this fixed asset accounting system to manage equipment with a unit cost of$l ,000 or more up to $5,000. The same data will be accumulated for this equipment as for fixed assets, however depreciation will not be calculated. Annual physical inventories will be conducted on these equipment items after the records have been established. -5-