Gf\ A~bO ,fit E:'Lb 64- 111b--q7 AUDIT REPORT BEN HILL COUNTY BOARD OF EDUCAnON FITZGERALD, GEORGIA YEAR ENDED JUNE 30, 1997 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 BEN HILL COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE 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 AND EXPENDABLE TRUST FUND 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 BALANCE 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 22 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 24 I FIDUCIARY FUND TYPES COMBINING BALANCE SHEET 26 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 27 2 SCHEDULE OF STATE REVENUE 30 3 SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS 31 BEN HILL COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 4 OVERALL 33 5 BY PROGRAM 34 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 June 8, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members ofthe Ben Hill County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements of the Ben Hill County Board of Education, as of and for the year ended June 30, 1997, as listed in the table of contents. These general. purpose financial statements are the responsibility of the Ben Hill County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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. As described in the notes to the general-purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: * The general-purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles. 97ARL-13 * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board did not recognize as expenditures, in the year ended June 30, 1997, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1997. Also funds received, subsequent to June 30, 1997, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were improperly recorded in the year ended June 30, 1997. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Ben Hill County Board of Education as of June 30, 1997, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated June 8, 1998, on our consideration of the Ben Hill County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Ben Hill County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through I) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits o/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 of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general-purpose financial statements taken as a whole. 97ARL-13 A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:jb 97ARL-13 BEN HILL COUNTY BOARD OF EDUCATION BEN HILL COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1997 ASSETS Cash and Cash Equivalents Accounts Receivable Notes Receivable Inventories Food Donated Commodities Purchased Food Amount Available in Debt Service Fund Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 1,229,606.74 $ 521,975,02 $ 304,582,96 73,961,88 174,873,89 289,723.00 3,500.00 8,277.45 3,122,72 Total Assets $ 1,307,068,62 $ 708,249,08 $ ==,;;;5:;;94;;;;;,3;;,;0=5=,9==6 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Expired Grant Balances Payable Retainages Payable Capital Lease Agreements General Obligation Bonds Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Continuation of State Programs For Debt Service For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For State Capital Outlay Projects Unreserved Designated for Self-Insurance Undesignated Total Fund Equity $ 297,096,77 $ 84,491.06 157,864,70 12,571,53 $ 70,350.00 $ 297,096.77 $ 254,927,29 $ 70,350.00 $ 58,409.12 4,787,85 $ 10,664.68 999,307.17 $ 1,009,971 ,85 $ 8,277.45 3,122.72 $ 378,724.65 453,321.79 $ 523,955,96 0.00 523,955,96 Total Liabilities and Fund Equity $ 1,307,068,62 $ 708,249.08 $ The notes to the general purpose financial statements are an integral part of this statement. - 2- 594,305,96 EXHIBIT "A" DEBT SERVICE FUND FIDUCIARY FUND TYPES TRUST FUNDS ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30,1997 JUNE 30,1996 $ 367.415.34 $ 9,951.22 $ 2.433,531.28 $ 2,019,596.43 5,629.46 544,188.23 469,963.04 3,500.00 3,500.00 8,277.45 3,122.72 7,633.45 1,579.35 $ 373,044.80 373,044.80 238,896.89 2,816,955.20 48,371.93 2,816,955.20 48,371.93 3,166,103.11 $ 373,044.80 $ =====9..,.9=5=1=.2~2 $ 3,238,371.93 $ 6,230,991.61 $ 5,907,272.27 $ 52.32 $ 381,640.15 $ 87,120.98 157,864.70 155.414.64 12,571.53 93,936.55 70,350.00 26,295.00 $ 48,371.93 48,371.93 3,190,000.00 3,190,000.00 3.405,000.00 $ 52.32 $ 3,238,371.93 $ 3,860,798.31 $ 3,767,767.17 $ 373,044.80 $ 0.00 $ 373,044.80 $ $ 373,044.80 $ 2,000.00 7,898.90 9,898.90 $ 58.409.12 $ 24,554.50 4,787.85 373,044.80 238,896.89 2,000.00 2,000.00 3,205.10 8,277.45 3,122.72 523,955.96 7,633.45 1,579.35 527,275.81 10,664.68 1,385,930.72 30,967.31 1,303,392.69 $ 2,370,193.30 $ 2,139,505.10 9,951.22 $ 3,238,371.93 $ 6,230,991.61 $ 5,907,272.27 -3- BEN HILL COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND YEAR ENDED JUNE 30,1997 EXHIBIT"B" TYPES DEBT SERVICE FUND TOTAL FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 1997 JUNE 30, 1996 $ 13,905,229.18 2,038,815.04 $ 491,775.21 4,115,950.93 17,826.56 725,332.05 $ $ 509,601.77 $ 20,785,327.20 $ $ 5,486.71 5,486.71 $ 13,905,229.18 $ 2,038,815.04 4,115,950.93 730,818.76 20,790,813.91 $ 13,793,907.23 1,963,861.08 3,872,047.59 684,210.32 20,314,026.22 $ 12,678,081.63 702,497.83 $ 450,334.88 347,430.69 734,435.26 1,135,505.47 90,410.77 949,867.78 751,830.53 184,908.29 1,183,331.66 75,295.44 942,743.23 $ 215,000.00 159,630.75 823.11 233,348.07 159,630.75 823.11 $ 375,453.86 $ 20,620,475.39 $ $ 134,147.91 $ 164,851.81 $ $ 8,622.94 8,622.94 $ -3,136.23 $ 12,678,081.63 $ 711,120.77 450,334.88 347,430.69 734,435.26 1,135,505.47 90,410.77 949,867.78 751,830.53 184,908.29 1,183,331.66 75,295.44 942,743.23 233,348.07 159,630.75 823.11 20,629,098.33 $ 161,715.58 $ 12,232,235.87 638,578.58 409,847.30 408,454.28 684,745.51 1,080,414.85 73,061.61 1,105,826.69 690,215.24 14,153.48 169,047.64 1,222,089.24 70,951.12 1,420,007.90 205,000.00 166,395.00 821.60 20,591,845.91 -277,819.69 $ 66,720.00 13,359.35 -13,359.35 $ 66,720.00 $ 134,147.91 $ 231,571.81 $ 238,896.89 2,126,535.22 644.00 1,543.37 0.00 $ 66,720.00 13,359.35 $ 36,911.70 -13,359.35 -36,911.70 $ 66,720.00 $ 0.00 -3,136.23 $ 9,934.15 228,435.58 $ 2,136,469.37 -277,819.69 2,419,208.97 644.00 1,543.37 0.00 -5,139.05 219.14 $ 373,044.80 $ 2,360,294.40 $ 6,797.92 $ 2,367,092.32 $ 2,136,469.37 - 5- THIS PAGE LEFT BLANK BEN HILL COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30,1997 EXHIBIT"C" GENERAL FUND ACTUAL {BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 11,966,472.00 $ 12,389,598.47 77,089.00 28,286.56 3,400,000.00 3,624,175.72 85,304.00 357,455,63 Total Revenues $ 15,528,865.00 $ 16,399,516.38 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 $ 11,622,947.00 $ 11,397,126.68 635,335.00 462,633.00 312,606.00 470,516.00 1,060,318,00 96,920.00 1,107,355.00 696,086.00 39,983.00 50,825.00 656,000.32 389,052.74 347,430.69 652,553,66 1,130,759.22 90,410.77 931,162.57 716,190,20 113,538.48 73,296,00 8,487,16 76,556.85 18,348,07 Total Expenditures $ 16,628,820.00 $ 16,527,617.41 Excess of Revenues over (under) Expenditures $ -1,099,955.00 $ -128,101.03 OTHER FINANCING SOURCES (USES) Other Sources Other Uses $ $ -300,000.00 80,079.35 Total Other Financing Sources (Uses) $ -300,000.00 $ 80,079.35 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -1,399,955.00 $ -48,021,68 FUND BALANCE JULY 1, 1996 1,625,765.68 1,041,007.50 Adjustments Residual Equity Transfer 637.62 16,986.03 FUND BALANCE JUNE 30,1997 $ 226,448.30 $ 1,009,971.85 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 529,548.00 $ 635,778.15 1,672,680.00 2,010,528.48 320,815.00 350,049.86 $ 2,523,043.00 $ 2,996,356.49 $ 1,181,440.00 $ 1,280,954.95 38,135.00 12,519.00 46,497.51 61,282,14 65,038.00 81,881.60 4,746.25 2,489.00 18,300.00 18,705,21 35,640.33 71,400.00 1,198,927.00 71,369.81 1,183,331,66 66,808.28 $ 2,588,248.00 $ 2,851,217.74 $ -65,205,00 $ 145,138.75 $ -13,359,35 $ -13,359.35 $ -65,205,00 $ 131,779.40 317,766.74 310,142.22 -9,220.90 $ 243,340.84 $ ===,4=41=-,9=2:=1=.6=2 The notes to the general purpose financial statements are an integral part of this statement. - 7- BEN HILL COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 3D. 1997 EXHIBIT"D" OPERATING REVENUES None Recorded OPERATING EXPENSES None Recorded Operating Income NONOPERATING REVENUES Interest Earned Net Income FUND BALANCE JULY 1 CUMBEE-MCCALL FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 3D, 1997 JUNE 3D, 1996 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 65.25 65.25 153.95 $ 65.25 $ 65.25 $ 153.95 3,035.73 3,035.73 2,881.78 FUND BALANCE JUNE 30 $ ====3=,1=0=0=.9=8 $ ===3=,1=0=,=0.=98=$===3=,0=3=,=5.==73= The notes to the general purpose financial statements are an integral part of this statement. - 8- BEN HILL COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 1997 EXHIBIT"E" Cash Flows from Operating Activities: Net Cash Provided (Used) by Operating Activities Cash Flows from Investing Activities: Interest Received on Investments Net Increase in Cash Cash and Cash Equivalents - July 1 Cash and Cash Equivalents - June 30 CUMBEE-MCCALL FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30,1997 JUNE 30,1996 $ 0.00 $ 0.00 $ 0.00 72.84 72.84 146.36 $ 72,84 $ 72.84 $ 146.36 3,028,14 3,028,14 2,881.78 $ 3,100.98 $ 3,100,98 $===3=,0=2;,;;,8~.1=4 The notes to the general purpose financial statements are an integral part of this statement. - 9- BEN HILL COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Ben Hill County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements. The general purpose fmancial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all fmancial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. - 10- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "Fit NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction 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 Cumbee-McCall Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used for the purpose of providing for the care and support of underprivileged children. EXPENDABLE TRUST FUND Fitzgerald High School Preparatory Trust Fund - the fund used to account for income distributed by the Trustee and used to provide for expenditures pursuant to recommendations of an advisory committee. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation bonds outstanding and material capital lease obligations. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is detennined by its measurement focus. All governmental and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (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 fmanced from available spendable resources, are reported in the General Long-Tenn Debt Account Group. 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. - 11 - BEN IDLL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end. Expenditures are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1997, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1996 and ending in early June 1997. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1997, compensation under these employment . contracts had been earned, but two of the twelve monthly payments, due for July and August 1997, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1997. Also, the State's portion of the compensation paid in July and August 1997 was received and recorded as revenue in the fiscal year subsequent to June 30, 1997. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were recorded in the year ended June 30, 1997. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. The accrual basis of accounting, 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. BUDGET The Ben Hill County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. - 12 - BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, 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. The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report: Special Revenue Fund FUND BALANCE JULY I, 1996 $ 319,355.02 Adjustments Inventories - July 1, 1996 Food Donated Commodities Purchased Foods -7,633.45 -1,579.35 Fund Balance July 1, 1996 (Budget Basis) $ 310,142.22 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 131,779.40 FUND BALANCE JUNE 30, 1997 (Budget Basis) $ 441.921.62 CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State. - 13- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Ben Hill County Board of Commissioners fixed the property tax levy for the 1996 tax year (calendar year) on September 26, 1996 (levy date). Taxes were due on December 20, 1996. The lien date for property taxes was January 1, 1996. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1997 since their collection meets the criteria of GASB codification section P70.l03. The Ben Hill County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board. Tax millage rates levied for the 1996 tax year (calendar year) for the Ben Hill County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): School Operations School Bonds 18.00 mills 2.25 mills 20.25 mills 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. GENERAL OBLIGATION BONDS The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial - 14- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The Board has the following types of interfund transactions: Reimbursements of expenditures/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. Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity. Operating transfers are recorded for all interfund transactions other than residual equity transfers and reimbursements. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that . they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations 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. Certain reclassifications have been made to the comparative data to conform to the current year classifications. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities shall be equal to not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone 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, - 15 - BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 2: DEPOSITS (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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 1997, the bank balances were $3,904,414.90. 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 Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging fmancial institution, or by its trust department or agent but not in the Board's name.) The Board's deposits are classified by risk category at June 30, 1997, as follows: Risk Category Bank Balance 1 $ 317,415.34 2 3,586,999.56 3 0.00 Total $ 3,904.414.90 - 16- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 3: NON-MONETARY TRANSACTIONS The Board 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 Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster; unemployment compensation and dental coverage. The Board has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, job related illness or injuries to employees and natural disaster. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years. The Board is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the Board. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 1996 1997 Beginning of Year Liability Claims and Changes in Estimates $ 0.00 $ 10,734.84 $ $ 772.00 $ 11.677.00 $ Claims Paid End ofYear Liability 9,962.84 $ 9,909.00 $ 772.00 2,540.00 The Board has established a limited risk-management program for dental coverage of its employees and their dependents. Estimated claims are budgeted by management based on known claims and prior experience. The employees contribute a premium to the fund and the Board funds any deficits. Changes in the dental claims liability during the last two fiscal years are as follows: - 17 - BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 4: RISK MANAGEMENT Beginning of Year Liability Claims and Changes in Estimates Claims Paid End ofYear Liability 1996 1997 $ 0.00 $ 121,616.82 $ 121,616.82 $ 0.00 $ 0.00 $ 140,292.05 $ 140,292.05 $ 0.00 The Board has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Superintendent Military Property Custodian Each Principal Each Lunchroom and Assistant Manager Each Secretary and Bookkeeper All Other Employees Amount $ 100,000.00 $ 25,000.00 $ 10,000.00 $ 5,000.00 $ 5,000.00 $ 1,000.00 Note 5: GENERAL LONG-TERM DEBT CAPITAL LEASES The Ben Hill County Board of Education has entered into a lease agreement as lessee for computer equipment. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of its inception. GENERAL OBLIGAnON BONDS OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 1993 2.65% - 5.35% $ 3,190,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows: Balance July 1, 1996 Additions Deductions Payments Balance June 30, 1997 Capital Leases General Obligation Bonds Total $ 0.00 $ 3,405,000.00 $ 3,405,000.00 66,720.00 66,720.00 18,348.07 215,000.00 233,348.07 $ 48,371.93 $ 3.190,000.00 $ 3,238.371.93 - 18 - BEN HILL COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 5: GENERAL LONG-TERM DEBT At June 30, 1997, 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 1998 1999 2000 2001 2002 2003 - 2007 2008 - 2012 $ 18,348.08 $ 371,997.50 18,348.07 378,637.50 18,348.07 379,120.00 378,707.50 382,360.00 1,942,697.50 395,062.50 $ 390,345.58 396,985.57 397,468.07 378,707.50 382,360.00 1,942,697.50 395,062.50 Total Principal and Interest $ 55,044.22 $ 4,228,582.50 $4,283,626.72 Deduct: Imputed Interest 6,672.29 Net Present Value of Future Minimum Lease Payments $ 48,371.93 Note 6: ON-BEHALF PAYMENTS The Board has recognized revenues and expenditures in the amount of$291,212.22 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of $246,442.95 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $15,846.27 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 $28,923.00 - 19- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT ,"F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 7: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1997, together with funding available: Project Unearned Executed Contracts Funding Available From State 93/92S-609-005B $ 710.433.13 $ 297,988.62 The amounts described in this note are not reflected in the general purpose financial statements. Note 8: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position. Note 9: RELATED PARTY TRANSACTIONS During the fiscal year 1997, the Ben Hill County Board of Education employed the services of L. E. Harper Construction Company. L. E. Harper Construction Company is owned and operated by L. E. Harper, the son of Louis E. Harper, former Superintendent of Ben Hill County Board of Education and currently employed by the Board as a part-time consultant. During the year, the following contracts between the Ben Hill County Board of Education and L. E. Harper Construction Company (low bidder) were executed: A contract for $539,500.00 was signed on February 13, 1996, for the Ben Hill County Elementary School, Phase II. Current year expenditures were $85,167.00. A second contract for $1,407,000.00 was signed on March 18, 1997, for Fitzgerald High School renovations, modifications and additions. Current year expenditures were $756,550.00. Note 10: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its - 20- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 10: RETIREMENT PLANS members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81 % and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 1997 1996 1995 100% 100% 100% $ 1,304,473.40 $ 1,232,722.33 $ 1,11 0,896.70 Note 11: OTHER FINANCIAL NOTE The Ben Hill County Board of Education established a Minority Teacher Recruitment Program policy to provide, annually, two assistantships for minority students, and if otherwise suitable, one candidate that is not of a minority race. The assistantships are for students in teacher training programs at a cost to the school system of up to $3,000.00 per year (1,000.00 per student). The Board's contributions is in the form ofloans which earn a minimum interest rate of 9% per annum beginning immediately upon completion of the individual's study or upon termination of his/her training and education. For each year of practicing in the Ben Hill County School System, the applicant shall receive credit for the amount of the scholarship received during any year in school. An analysis of the status of this program is as follows: Balance July 1, 1996 $ 3,500.00 Deductions: Cancellation - Teaching Service 0.00 Balance June 30, 1997 $ 3,500.00 - 21 - BEN HILL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPEC~LREVENUEFUND JUNE 30,1997 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS FEDERAL PROGRAMS $ 427,373.10 $ 90,363.85 14,249.05 $ 159,692.84 8,277.45 3,122.72 Total Assets $ 453,022.32 $ 90,363.85 $ ==1=59=,6=9=2=.8=4 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Continuation of State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity $ 661.46 $ 15,171.04 $ 44,345.18 24,637.76 47,726.46 40,105.44 70,032.80 5,913.23 5,951.70 $ 62,897.50 $ 90,363.85 $ 101,283.72 $ 8,277.45 3,122.72 378,724.65 $ $ 390,124.82 $ $ 58,409.12 0.00 0.00 $ 0.00 58,409.12 Total Liabilities and Fund Equity $ 453,022.32 $ 90,363.85 $ ==1=59=,6==9=2=.8=4 See notes to the general purpose financial statements. - 22- EXHIBIT"G" OTHER PROGRAMS TOTALS JUNE 30, 1997 JUNE 30, 1996 $ 4,899.53 $ 522,636.48 $ 380,322.40 932.00 174,873.89 355,695.75 8,277.45 3,122.72 7,633.45 1,579.35 $ ==".;5;1,;,8;;,;;3;,,;,1;,;;;;.5,;.3 $ 708,910.54 $ 745,230.95 $ 661.46 $ 201,682.33 $ 337.08 84,491.06 43,780.80 157,864.70 151,964.64 706.60 12,571.53 28,448.16 $ 1,043.68 $ 255,588.75 $ 425,875.93 $ 58,409.12 $ 24,554.50 $ 4,787.85 4,787.85 8,277.45 3,122.72 7,633.45 1,579.35 0.00 378,724.65 285,587.72 $ 4,787.85 $ 453,321.79 $ 319,355.02 $ ==".;5;1,;,8;;,;;3;,,;,1.;,;;;;5,;.3 $ 708,910.54 $ 745,230.95 - 23- BEN HILL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES SPEC~LREVENUEFUND YEAR ENDED JUNE 30. 1997 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS FEDERAL PROGRAMS $ 83,242.00 $ 866,154.53 327,072.06 $ 1,276,468.59 $ 486,219.75 $ 486,219.75 $ 1,144,373.95 22,977.80 1,167,351.75 $ $ 1,183,331.66 $ 1,183,331.66 $ $ 93,136.93 $ 367,114.44 $ 46,497.51 8,461.51 24,890.00 18,705.21 19,745.99 894.38 486,309.04 $ -89.29 $ 872,667.64 42,721.95 46,734.60 4,746.25 15,894.34 70,475.43 66,808.28 1,120,048.49 47,303.26 $ $ $ 93,136.93 $ 294,800.52 644.00 1,543.37 89.29 $ 89.29 $ -13,448.64 -13,448.64 0.00 $ 0.00 33,854.62 24,554.50 $ 390,124.82 $ ===~O';';;OO~ $ ===58;;.,4=0=9=.1.2.. See notes to the general purpose financial statements. - 24- EXHIBIT"H" OTHER PROGRAMS TOTALS YEAR ENDED JUNE 30,1997 JUNE 30,1996 $ 66,316.40 $ 635,778.15 $ 669,867.27 2,010,528.48 1,935,876.40 350,049.86 315,587.47 $ 66,316.40 $ 2,996,356.49 $ 2,921,331.14 $ 41,172.87 $ 1,280,954.95 $ 1,395,327.47 10,098.68 10,257.00 46,497.51 61,282.14 81,881.60 4,746.25 18,705.21 35,640.33 71,369.81 1,183,331.66 66,808.28 38,885.96 27,659.67 83,285.33 751.18 47,943.09 29,837.33 59,775.00 1,222,089.24 65,597.61 $ 61,528.55 $ 2,851,217.74 $ 2,971,151.88 $ 4,787.85 $ 145,138.75 $ -49,820.74 $ 89.29 $ -13,448.64 $ -13,359.35 $ 17,722.67 17,722.67 $ 4,787.85 $ 131,779.40 $ -32,098.07 0.00 319,355.02 356,373.00 644.00 1,543.37 -5,139.05 219.14 $ 4,787.85 $ 453,321.79 $ 319,355.02 - 25- BEN HILL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 1997 EXHIBIT "I" ASSETS Cash and Cash Equivalents Accounts Receivable NONEXPENDABLE TRUST FUND CUMBEE-MCCALL FUND EXPENDABLE TRUST FUND FITZGERALD HIGH SCHOOL COLLEGE PREPARATORY FUND TOTALS JUNE 30,1997 JUNE 30,1996 $ 3,100,98 $ 6,850.24 $ 9,951.22 $ 12,962.29 7,59 Total Assets $ 3,100,98 $ ======6=,8=:5=0,.2..4= $ 9,951.22 $ =====12=,9:.=6=9=:,8==8 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable FUND EQUITY Fund Balances Reserved For Endowment Corpus $ Unreserved Undesignated Total Fund Equity $ $ 2,000.00 1,100.98 $ 3,100,98 $ 52.32 $ $ 6,797,92 6,797,92 $ 52,32 2,000.00 $ 7,898.90 9,898.90 $ 2,000.00 10,969,88 12,969.88 Total Liabilities and Fund Equity $====3,==1=00=:,=98:,,$ 6,850.24 $ 9,951,22 $ =====12==,9=6=9=::,8==8 See notes to the general purpose financial statements, - 26- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 1997 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Agriculture, U. S. Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1997 Grant National School Lunch Program 1997 Grant Food Distribution Program (1) Total U. S. Department of Agriculture Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs 1997 Grant Education, U. S. Department of Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1997 Grant Title II Eisenhower Professional Development 1996 Grant 1997 Grant Title VI Innovative Education Program Strategies 1997 Grant Goals 2000 State and Local Education Systemic Improvement Grant 1997 Grant Safe and Drug-Free Schools 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1997 Grant Preschool 1997 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1997 Grant CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 10.553 10.555 10,550 N/A $ 191,450.44 N/A 621,172.00 $ N/A 53,532.09 $ 866,154.53 $ (2) 1,129,799.57 (3) 53,532.09 1,183,331.66 94.004 N/A $ 8,000.00 $ 7,953.06 * 84.010 84.281 84.281 84.298 N/A $ 695,173.02 $ 695,173.02 N/A 10,138.88 N/A 18,944.00 10,138.88 10,143.27 N/A 20,775.00 20,775.00 84.276 N/A 84.186 N/A 31,111.35 61,786.75 21,654.13 61,786.75 84.027 N/A 84.173 N/A 100,776.00 37,500.00 100,776.00 37,500.00 84.048 N/A 38,960.57 38,960.57 - 27- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1997 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Education, U, S. Department of Pass-Through From Georgia Department of Education Vocational Education - Basic Grants to States Tech-Prep Education 1997 Grant Pass-Through From Georgia Department of Human Resources High Risk Youth Grant 1997 Grant Total U. S. Department of Education Health and Human Services, U. S. Department of Pass-Through From Georgia Department of Human Resources Child Care and Development Block Grant 1996 Contract No. 427-93-61423 1997 Contract No. 427-93-71634 Undistributed by Project Total U. S. Department of Health and Human Services Justice, U. S. Department of Pass-Through From Office of the Governor Juvenile Justice and Delinquency Prevention Allocation to States Project Opportunity 1996 Contract No. 96J-06-9404-0022 1997 Contract No. 96J-06-9404-0013 Undistributed by Project Total U. S. Department of Justice OTHER FINANCIAL ASSISTANCE Defense, U. S. Department of Direct Department of the Army R.OTC. Program 1997 Grant CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84,243 N/A $ 50,000.00 $ 50,887.36 (3) 84.186 N/A 11,000.00 $ 1,076,165.57 $ 11,000.00 1,058,794.98 93.575 93.575 93.575 N/A $ 12,294.20 N/A 27,457.05 N/A $ $ 39,751.25 $ (4) (4) 47,179.32 47,179.32 16.540 16.540 16.540 N/A $ 2,741.95 N/A 17,715.18 N/A $ $ 20,457.13 $ (4) (4) 20,460.60 20,460.60 $ 28,286.56 (4) Total Federal Financial Assistance $ 2,038,815.04 $ 2,317,719.62 N/A = Not Available - 28- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30.1997 SCHEDULE "1" Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year. (2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1997 National School Lunch Program. (3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. (4) Expenditures on this program were not maintained by fund source. Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any SUbrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Ben Hill County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the financial statements for the governmental funds. See notes to the general purpose financial statements. - 29- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1997 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Specialist Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Advanced Placement Exams Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentoring Program Next Generation Schools Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Program Instructional Technology Georgia State Financing and Investment Commission Reimbursement on Construction Projects Office of Planning and Budget Georgia Challenge Program Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement CONTRACT Education, Georgia Department of Next Generation Schools GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 7,124,930.00 841,592,00 332,934.00 296,325.00 91,048.00 2,027,875.00 272,615.00 83,412.00 270,405.00 417,419.00 78,810.00 20,846.00 27,157.00 -933,728.00 1,014,832.00 $ 2,634.00 203.01 88,493.77 24,308.59 500.00 246,442.95 4,500.00 6,274.88 15,846,27 83,242.00 5,000,00 9.293.40 39.891.00 70,800.00 $ 7,124,930.00 841,592.00 332,934,00 296,325.00 91,048.00 2,027,875.00 272,615.00 83,412.00 270,405.00 417,419.00 78,810.00 20,846.00 27,157.00 -933,728.00 1,014,832.00 83,242,00 2,634.00 203.01 88,493.77 24,308.59 500.00 246,442.95 5,000.00 4,500.00 9,293.40 39,891.00 6,274.88 15,846,27 70,800.00 28,923.00 $ 12,132.00 415,419,75 879,852.56 879,852.56 12,132.00 415,419.75 28,923.00 5,000.00 5,000.00 $ 12,389,598.47 $ 635,778.15 $ 879,852.56 $ 13,905,229.18 See notes to the general purpose financial statements. - 30- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1997 SCHEDULE "3" EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services INSTRUCTIONAL PRE-KINDERGARTEN TECHNOLOGY PROGRAM $ 70,889.29 $ 296,225.15 $ 46,497.51 8,461.51 24,890.00 18,705.21 19,745.99 894.38 TOTAL 367,114.44 46,497.51 8,461.51 24,890.00 18,705.21 19,745.99 894.38 Total Expenditures $ 70,889.29 $ 415,419.75 $ ======4=86=,3=0=9=.0=4 RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Instructional Technology Pre-Kindergarten Program $ 348,789.60 70,889.29 66,630.15 $ 486,309.04 See notes to the general purpose financial statements. - 31 - THIS PAGE LEFT BLANK BEN HILL COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1997 SCHEDULE "4" Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis Salaries Operations Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures per Audit Amount of Underexpenditure for Total Allotment FOURTEEN WEIGHTED AND MEDIA CENTER PROGRAMS 100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS $ 8.595,781.00 $ _ _-=2:..::.62=.1.,=..:29;.;,.7.:,.=.0=..0 $ 9,588,570.67 662.818.25 $ _ _...:6;.;.07;..:.,.;.;55,-,-7.:..;.4..;..3 $ 10.251,388.92 -45,027.39 $ 10,206,361.53 $ 0.00 $====~O=.O==O See notes to the general purpose financial statements. - 33 - BEN HILL COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS BY PROGRAM GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1997 GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (0) Grades 1 - 3 (0) Sub-Total K-3 Grades 4 - 5 (0) Grades 6 - B (0) Grades 9 - 12 (0) High School Laboratories (0) Vocational Education Laboratories (0) Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS Regular Programs Category II (0) Category III (0) Category IV (*) Category V (0) Sub-Total - Regular Category VI (Gifted) (0) Total Special Education Programs REMEDIAL EDUCATION PROGRAM (0) Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs Total Fourteen Weighted and Media Center Programs STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development Total Staff Development Programs (0) Identifies Fourteen Weighted Programs, ALLOTMENTS FROM DEPARTMENT OF EDUCATION REQUIRED ORIGINAL ~ ORIGINAL MID-TERM $ 694,544.00 $ 625,OB9.60 $ 1,96B,622,00 1,771,759.BO $ 2,663,166.00 90 $ 2,396,B49.40 $ B9B,19B.00 90 BOB,37B.20 1,59B,B06.00 90 1,43B,925,40 845,257.00 90 760,731.30 612,546.00 90 551,291.40 506,957.00 90 456,261.30 $ 7,124,930.00 $ 6,412,437.00 $ 0.00 0.00 0.00 $ 727,364.00 $ 654,627,60 $ 0.00 $ 727,364,00 90 $ 654,627.60 $ 114,22B.00 90 102,B05.20 $ B41,592.00 $ 757,432,BO $ $ 332,934.00 90 $ 299,640.60 $ $ B,299,456.00 $ 7,469,510.40 $ $ 23B,694.00 90 $ 214,824.60 $ 57,631.00 90 51,B67.90 $ 296,325.00 $ 266,692.50 $ $ B,595,7Bl.00 $ 7,736,202.90 $ 0.00 0.00 0,00 0.00 0,00 0.00 0,00 $ 25,359.00 65,6B9.00 $ 25,359.00 $ 65,6B9,00 $ 91,04B.00 100 $ 91,04B,00 $ 0.00 0.00 See notes to the general purpose financial statements, - 34 SCHEDULE "5" TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 625,089.60 $ 719,232.45 $ 23,583.78 $ 742,816.23 1,771,759.80 1,717,384.04 51,903.71 1,769,287.75 $ 2,396,849.40 $ 2,436,616.49 $ 75,487.49 $ 2,512,103.98 $ 0.00 808,378.20 844,035.07 105,739.02 949,774.09 0.00 1,438,925.40 1,866,343.15 147,418.45 2,013,761.60 0.00 760,731.30 864,057.14 101,685.25 965,742.39 0.00 551,291.40 985,230.60 52,543.71 1,037,774.31 0.00 456,261.30 597,873.68 72,684.94 670,558.62 0.00 $ 6,412,437.00 $ 7,594,156.13 $ 555,558.86 $ 8,149,714.99 $ 654,627.60 $ 373,934.45 $ 609,246.69 86,634.23 19,304.32 $ 17,361.63 9,721.95 330.00 393,238.77 626,608.32 96,356.18 330.00 $ 654,627.60 $ 1,069,815.37 $ 46,717.90 $ 1,116,533.27 0.00 102,805.20 115,194.11 3.322.91 118,517.02 0.00 $ 757,432.80 $ 1.185,009.48 $ 50,040.81 $ 1,235,050.29 $ 299,640.60 $ 523,313.49 $ 1,957.76 $ 525,271.25 0.00 $ 7,469.510.40 $ 9.302,479.10 $ 607,557.43 $ 9,910,036.53 $ 214,824.60 $ 286,091.57 $ $ 286,091.57 0.00 51,867.90 55,260.82 55,260.82 0.00 $ 266,692.50 $ 286,091.57 $ 55.260.82 $ 341,352.39 $ 7,736,202.90 $ 9,588,570.67 $ 662,818.25 $ 10,251,388.92 $ 0.00 $ 25,359.00 65,689.00 $ ==9;,;1:;;,04=8=.00= $ 51,847.65 $ 51,847.65 41,208.83 41,208.83 $ 93,056.48 $ 93,056.48 $======0=,00= - 35 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 June 8, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Ben Hill 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 fmancial statements of Ben Hill County Board of Education as of and for the year ended June 30, 1997, and have issued our report thereon dated June 8, 1998. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the generalpurpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Ben Hill County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Ben Hill County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its 97YB-40 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 of the internal control over financial reporting that, in our judgement, could adversely affect Ben Hill County Board of Education's ability to record, process, summarize and report fmancial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6091-97-01 and FS-6091-97-03. 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 normal course of performing their assigned functions. Our consideration of the internal control over fmancial 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, all of the reportable conditions noted above are considered to be material weaknesses. This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, CLV:jb 97YB-40 Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 June 8,1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Ben Hill County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 Ladies and Gentlemen: Compliance We have audited the compliance of Ben Hill County Board of Education with the types of compliance requirements described in the Us. Office ofManagement and Budget (OMB) Circular A-I33 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1997. Ben Hill County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Ben Hill County Board of Education's management. Our responsibility is to express an opinion on Ben Hill County Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-l33, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perforn1 the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Ben Hill 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 Ben Hill County Board of Education's compliance with those requirements. 97SA-65 As described in item FA-6091-97-01 in the accompanying Schedule of Findings and Questioned Costs, Ben Hill County Board of Education did not comply with requirements regarding Equipment and Real Property Management that are applicable to its Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies Program. In our opinion, except for the noncompliance described in the preceding paragraph, the Ben Hill 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, 1997. Internal Control Over Compliance The management of Ben Hill 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 Ben Hill 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-133. We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgement, could adversely affect the Ben Hill County Board of Education's ability to administer a major Federal program in accordance with applicable requirements of laws, regulations, contracts and grants. A reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6091-97-01. 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 applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. 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, the reportable condition noted above is considered to be a material weakness. 97SA-65 This report is intended for the infonnation of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:jb 97SA-65 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS BEN HILL COUNTY BOARD OF EDUCAnON AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 6091-93-01 6091-93-02 6091-94-02 6091-95-01 6091-95-02 6091-96-01 Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented CORRECTIVE ACTIONIRESPONSES ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number 6091-93-01 Due to current budgetary constraints, the Board is unable to hire the additional staffrequired to clear this finding. The Board feels it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions. With staff limitations, this finding cannot be totally resolved. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 6091-93-02 Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff the Board has decided not to pursue the recording of general fixed assets on the financial statements. SECTION IV FINDINGS AND QUESTIONED COSTS BEN HILL COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30,1997 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Ben Hill County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Ben Hill County Board of Education disclosed fmancial statement reportable conditions related to the following control categories. Cash and Cash Equivalents General Fixed Assets All of the reportable conditions described above are considered to be material weaknesses. 3. Noncompliance Material to the Financial Statements The audit ofthe Ben Hill 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 Ben Hill County Board of Education 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 considered to be a material weakness. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Ben Hill County Board of Education's report on compliance with requirements applicable to major programs was qualified. 6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-l33 The Ben Hill County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) of OMB Circular A-l33. This audit finding is included in Section III of this schedule. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Service - School Breakfast Program 10.555 Food and Nutrition Program - Food Service - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. - 1- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 I SUMMARY OF AUDITOR'S RESULTS 9. Low Risk Auditee The Ben Hill 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 CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6091-97-01 The Board did not provide for adequate separation of employee duties in the performance of the following accounting functions and procedures related to cash and cash equivalents. Cash receipts function was not separated from record keeping function; the check signing function was not separated from either check writing function or the record keeping function and the bank reconciliation not reviewed by an administrator independent of cash operations. These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff. Management's Response: The audit report for the year ended June 30, 1997, stated that the Board of Education did not provide for adequate separation of employee duties in the performance ofthe following accounting functions. A cash log has been established with the mail clerk opening the mail and recording all revenue in the cash log, then giving the revenue along with a copy of the check or receipt for the cash to the Revenue Clerk who in turn makes a deposit ticket and the Financial Officer takes the deposit to the bank. At the end of each month the mail clerk balances cash log with the Revenue Clerk. The payroll clerk will sign all accounts payable checks and the Accounts Payable Clerk will sign all payroll checks. Run them through the check signer. Financial Officer will review the checks before distributing. Superintendent's Secretary or Revenue Clerk will put checks into envelopes and mail. Bank reconciliation is to be reviewed each month by the Financial Officer. -2- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 1997 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS EMPLOYEE COMPENSATION Salary Overpayment Nonmaterial Noncompliance Amount: $1,040.00 Finding Control Number: FS-6091-97-02 A sample of 28 employees was selected to test the accuracy of employee compensation. The results of the sample revealed an instance where an employee was overpaid in the amount of$1,040.00. This overpayment was the result of an error made by the Board in calculating time worked by the employee. The Board should seek reimbursement of this overpayment for deposit into the Board's General Fund. Management's Response: A sample of 28 employees was selected to test the accuracy of employee compensation. The results of the sample revealed an instance where an employee was overpaid in the amount of $1,040.00. The Board is seeking reimbursement for this overpayment. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness . Repeated From Prior Year Finding Control Number FS-6091-97-03 The Ben Hill County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. Management's Response: The audit report for the year ended June 30, 1997, noted that the management of the Board of Education has chose not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. We concur with this recommendation. Due to current staffing limitations and budgetary consideration prohibiting the hiring of additional staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. -3- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records U. S. Department of Education Pass-Through From Georgia Department of Education Reportable Condition - Material Weakness Material Noncompliance Finding Control Number: FA-6091-97-01 Property management records maintained by the Board for the Elementary and Secondary Education Act Title I - Grants to Local Educational Agencies (CFDA 84.010) were incomplete and failed to meet property standards as set forth in Chapter 41 of the Financial Management for Georgia Local Units of Administration (FMGLUA). The accounting records maintained by the Board and presented for examination did not contain accurate equipment location and disposition, when applicable. This condition resulted from Management's failure to keep accurate records of equipment location when moving to a new school and their disregard for the provisions of FMGLUA. Perpetual inventory records should include information identifying the physical location of equipment as well as historical information regarding additions and deletions made to the equipment inventory during each fiscal year, when applicable. Periodic physical inventory counts should be made and reconciled to the property records to ensure the accuracy of the Board's inventory records. Management's Response: The accounting records maintained by the Board and presented for examination did not contain accurate equipment location and disposition, when applicable. The Board will conduct a beginning and ending inventory each school year. This will include properly marked inventory for each Grant. -4- Gf\ A~bO ,fit E:'Lb 64- 111b--q7 AUDIT REPORT BEN HILL COUNTY BOARD OF EDUCAnON FITZGERALD, GEORGIA YEAR ENDED JUNE 30, 1997 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 BEN HILL COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE 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 AND EXPENDABLE TRUST FUND 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 BALANCE 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 22 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 24 I FIDUCIARY FUND TYPES COMBINING BALANCE SHEET 26 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 27 2 SCHEDULE OF STATE REVENUE 30 3 SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS 31 BEN HILL COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 4 OVERALL 33 5 BY PROGRAM 34 SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 June 8, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members ofthe Ben Hill County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general-purpose financial statements of the Ben Hill County Board of Education, as of and for the year ended June 30, 1997, as listed in the table of contents. These general. purpose financial statements are the responsibility of the Ben Hill County Board of Education's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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. As described in the notes to the general-purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: * The general-purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles. 97ARL-13 * School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements. * The Board did not recognize as expenditures, in the year ended June 30, 1997, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1997. Also funds received, subsequent to June 30, 1997, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were improperly recorded in the year ended June 30, 1997. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general-purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general-purpose financial statements of the matters referred to in the preceding paragraph, the general-purpose financial statements referred to above present fairly, in all material respects, the financial position of the Ben Hill County Board of Education as of June 30, 1997, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated June 8, 1998, on our consideration of the Ben Hill County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Ben Hill County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through I) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits o/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 of the general-purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general-purpose financial statements taken as a whole. 97ARL-13 A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:jb 97ARL-13 BEN HILL COUNTY BOARD OF EDUCATION BEN HILL COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30,1997 ASSETS Cash and Cash Equivalents Accounts Receivable Notes Receivable Inventories Food Donated Commodities Purchased Food Amount Available in Debt Service Fund Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 1,229,606.74 $ 521,975,02 $ 304,582,96 73,961,88 174,873,89 289,723.00 3,500.00 8,277.45 3,122,72 Total Assets $ 1,307,068,62 $ 708,249,08 $ ==,;;;5:;;94;;;;;,3;;,;0=5=,9==6 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Expired Grant Balances Payable Retainages Payable Capital Lease Agreements General Obligation Bonds Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Continuation of State Programs For Debt Service For Endowment Corpus For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For State Capital Outlay Projects Unreserved Designated for Self-Insurance Undesignated Total Fund Equity $ 297,096,77 $ 84,491.06 157,864,70 12,571,53 $ 70,350.00 $ 297,096.77 $ 254,927,29 $ 70,350.00 $ 58,409.12 4,787,85 $ 10,664.68 999,307.17 $ 1,009,971 ,85 $ 8,277.45 3,122.72 $ 378,724.65 453,321.79 $ 523,955,96 0.00 523,955,96 Total Liabilities and Fund Equity $ 1,307,068,62 $ 708,249.08 $ The notes to the general purpose financial statements are an integral part of this statement. - 2- 594,305,96 EXHIBIT "A" DEBT SERVICE FUND FIDUCIARY FUND TYPES TRUST FUNDS ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30,1997 JUNE 30,1996 $ 367.415.34 $ 9,951.22 $ 2.433,531.28 $ 2,019,596.43 5,629.46 544,188.23 469,963.04 3,500.00 3,500.00 8,277.45 3,122.72 7,633.45 1,579.35 $ 373,044.80 373,044.80 238,896.89 2,816,955.20 48,371.93 2,816,955.20 48,371.93 3,166,103.11 $ 373,044.80 $ =====9..,.9=5=1=.2~2 $ 3,238,371.93 $ 6,230,991.61 $ 5,907,272.27 $ 52.32 $ 381,640.15 $ 87,120.98 157,864.70 155.414.64 12,571.53 93,936.55 70,350.00 26,295.00 $ 48,371.93 48,371.93 3,190,000.00 3,190,000.00 3.405,000.00 $ 52.32 $ 3,238,371.93 $ 3,860,798.31 $ 3,767,767.17 $ 373,044.80 $ 0.00 $ 373,044.80 $ $ 373,044.80 $ 2,000.00 7,898.90 9,898.90 $ 58.409.12 $ 24,554.50 4,787.85 373,044.80 238,896.89 2,000.00 2,000.00 3,205.10 8,277.45 3,122.72 523,955.96 7,633.45 1,579.35 527,275.81 10,664.68 1,385,930.72 30,967.31 1,303,392.69 $ 2,370,193.30 $ 2,139,505.10 9,951.22 $ 3,238,371.93 $ 6,230,991.61 $ 5,907,272.27 -3- BEN HILL COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES AND EXPENDABLE TRUST FUND YEAR ENDED JUNE 30,1997 EXHIBIT"B" TYPES DEBT SERVICE FUND TOTAL FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30, 1997 JUNE 30, 1996 $ 13,905,229.18 2,038,815.04 $ 491,775.21 4,115,950.93 17,826.56 725,332.05 $ $ 509,601.77 $ 20,785,327.20 $ $ 5,486.71 5,486.71 $ 13,905,229.18 $ 2,038,815.04 4,115,950.93 730,818.76 20,790,813.91 $ 13,793,907.23 1,963,861.08 3,872,047.59 684,210.32 20,314,026.22 $ 12,678,081.63 702,497.83 $ 450,334.88 347,430.69 734,435.26 1,135,505.47 90,410.77 949,867.78 751,830.53 184,908.29 1,183,331.66 75,295.44 942,743.23 $ 215,000.00 159,630.75 823.11 233,348.07 159,630.75 823.11 $ 375,453.86 $ 20,620,475.39 $ $ 134,147.91 $ 164,851.81 $ $ 8,622.94 8,622.94 $ -3,136.23 $ 12,678,081.63 $ 711,120.77 450,334.88 347,430.69 734,435.26 1,135,505.47 90,410.77 949,867.78 751,830.53 184,908.29 1,183,331.66 75,295.44 942,743.23 233,348.07 159,630.75 823.11 20,629,098.33 $ 161,715.58 $ 12,232,235.87 638,578.58 409,847.30 408,454.28 684,745.51 1,080,414.85 73,061.61 1,105,826.69 690,215.24 14,153.48 169,047.64 1,222,089.24 70,951.12 1,420,007.90 205,000.00 166,395.00 821.60 20,591,845.91 -277,819.69 $ 66,720.00 13,359.35 -13,359.35 $ 66,720.00 $ 134,147.91 $ 231,571.81 $ 238,896.89 2,126,535.22 644.00 1,543.37 0.00 $ 66,720.00 13,359.35 $ 36,911.70 -13,359.35 -36,911.70 $ 66,720.00 $ 0.00 -3,136.23 $ 9,934.15 228,435.58 $ 2,136,469.37 -277,819.69 2,419,208.97 644.00 1,543.37 0.00 -5,139.05 219.14 $ 373,044.80 $ 2,360,294.40 $ 6,797.92 $ 2,367,092.32 $ 2,136,469.37 - 5- THIS PAGE LEFT BLANK BEN HILL COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30,1997 EXHIBIT"C" GENERAL FUND ACTUAL {BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 11,966,472.00 $ 12,389,598.47 77,089.00 28,286.56 3,400,000.00 3,624,175.72 85,304.00 357,455,63 Total Revenues $ 15,528,865.00 $ 16,399,516.38 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 $ 11,622,947.00 $ 11,397,126.68 635,335.00 462,633.00 312,606.00 470,516.00 1,060,318,00 96,920.00 1,107,355.00 696,086.00 39,983.00 50,825.00 656,000.32 389,052.74 347,430.69 652,553,66 1,130,759.22 90,410.77 931,162.57 716,190,20 113,538.48 73,296,00 8,487,16 76,556.85 18,348,07 Total Expenditures $ 16,628,820.00 $ 16,527,617.41 Excess of Revenues over (under) Expenditures $ -1,099,955.00 $ -128,101.03 OTHER FINANCING SOURCES (USES) Other Sources Other Uses $ $ -300,000.00 80,079.35 Total Other Financing Sources (Uses) $ -300,000.00 $ 80,079.35 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -1,399,955.00 $ -48,021,68 FUND BALANCE JULY 1, 1996 1,625,765.68 1,041,007.50 Adjustments Residual Equity Transfer 637.62 16,986.03 FUND BALANCE JUNE 30,1997 $ 226,448.30 $ 1,009,971.85 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 529,548.00 $ 635,778.15 1,672,680.00 2,010,528.48 320,815.00 350,049.86 $ 2,523,043.00 $ 2,996,356.49 $ 1,181,440.00 $ 1,280,954.95 38,135.00 12,519.00 46,497.51 61,282,14 65,038.00 81,881.60 4,746.25 2,489.00 18,300.00 18,705,21 35,640.33 71,400.00 1,198,927.00 71,369.81 1,183,331,66 66,808.28 $ 2,588,248.00 $ 2,851,217.74 $ -65,205,00 $ 145,138.75 $ -13,359,35 $ -13,359.35 $ -65,205,00 $ 131,779.40 317,766.74 310,142.22 -9,220.90 $ 243,340.84 $ ===,4=41=-,9=2:=1=.6=2 The notes to the general purpose financial statements are an integral part of this statement. - 7- BEN HILL COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCE FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 3D. 1997 EXHIBIT"D" OPERATING REVENUES None Recorded OPERATING EXPENSES None Recorded Operating Income NONOPERATING REVENUES Interest Earned Net Income FUND BALANCE JULY 1 CUMBEE-MCCALL FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 3D, 1997 JUNE 3D, 1996 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 65.25 65.25 153.95 $ 65.25 $ 65.25 $ 153.95 3,035.73 3,035.73 2,881.78 FUND BALANCE JUNE 30 $ ====3=,1=0=0=.9=8 $ ===3=,1=0=,=0.=98=$===3=,0=3=,=5.==73= The notes to the general purpose financial statements are an integral part of this statement. - 8- BEN HILL COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 1997 EXHIBIT"E" Cash Flows from Operating Activities: Net Cash Provided (Used) by Operating Activities Cash Flows from Investing Activities: Interest Received on Investments Net Increase in Cash Cash and Cash Equivalents - July 1 Cash and Cash Equivalents - June 30 CUMBEE-MCCALL FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30,1997 JUNE 30,1996 $ 0.00 $ 0.00 $ 0.00 72.84 72.84 146.36 $ 72,84 $ 72.84 $ 146.36 3,028,14 3,028,14 2,881.78 $ 3,100.98 $ 3,100,98 $===3=,0=2;,;;,8~.1=4 The notes to the general purpose financial statements are an integral part of this statement. - 9- BEN HILL COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Ben Hill County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements. The general purpose fmancial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all fmancial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. - 10- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "Fit NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction 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 Cumbee-McCall Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used for the purpose of providing for the care and support of underprivileged children. EXPENDABLE TRUST FUND Fitzgerald High School Preparatory Trust Fund - the fund used to account for income distributed by the Trustee and used to provide for expenditures pursuant to recommendations of an advisory committee. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation bonds outstanding and material capital lease obligations. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is detennined by its measurement focus. All governmental and expendable trust funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (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 fmanced from available spendable resources, are reported in the General Long-Tenn Debt Account Group. 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. - 11 - BEN IDLL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Governmental and expendable trust funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end. Expenditures are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1997, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1996 and ending in early June 1997. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1996 and ending in August 1997. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1997, compensation under these employment . contracts had been earned, but two of the twelve monthly payments, due for July and August 1997, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1997. Also, the State's portion of the compensation paid in July and August 1997 was received and recorded as revenue in the fiscal year subsequent to June 30, 1997. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1996, were recorded in the year ended June 30, 1997. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. The accrual basis of accounting, 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. BUDGET The Ben Hill County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. - 12 - BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, 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. The Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report: Special Revenue Fund FUND BALANCE JULY I, 1996 $ 319,355.02 Adjustments Inventories - July 1, 1996 Food Donated Commodities Purchased Foods -7,633.45 -1,579.35 Fund Balance July 1, 1996 (Budget Basis) $ 310,142.22 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 131,779.40 FUND BALANCE JUNE 30, 1997 (Budget Basis) $ 441.921.62 CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State. - 13- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. PROPERTY TAXES The Ben Hill County Board of Commissioners fixed the property tax levy for the 1996 tax year (calendar year) on September 26, 1996 (levy date). Taxes were due on December 20, 1996. The lien date for property taxes was January 1, 1996. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1997 since their collection meets the criteria of GASB codification section P70.l03. The Ben Hill County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board. Tax millage rates levied for the 1996 tax year (calendar year) for the Ben Hill County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value): School Operations School Bonds 18.00 mills 2.25 mills 20.25 mills 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. GENERAL OBLIGATION BONDS The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial - 14- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group. INTERFUND TRANSACTIONS The Board has the following types of interfund transactions: Reimbursements of expenditures/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. Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity. Operating transfers are recorded for all interfund transactions other than residual equity transfers and reimbursements. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that . they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations 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. Certain reclassifications have been made to the comparative data to conform to the current year classifications. Note 2: DEPOSITS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities shall be equal to not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone 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, - 15 - BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 2: DEPOSITS (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 and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association. CATEGORIZATION OF DEPOSITS At June 30, 1997, the bank balances were $3,904,414.90. 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 Board or by the Board's agent in the Board's name. Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name. Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging fmancial institution, or by its trust department or agent but not in the Board's name.) The Board's deposits are classified by risk category at June 30, 1997, as follows: Risk Category Bank Balance 1 $ 317,415.34 2 3,586,999.56 3 0.00 Total $ 3,904.414.90 - 16- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 3: NON-MONETARY TRANSACTIONS The Board 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 Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster; unemployment compensation and dental coverage. The Board has obtained commercial insurance for risk of loss associated with torts, assets, errors or omissions, job related illness or injuries to employees and natural disaster. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years. The Board is self-insured with regard to unemployment compensation claims. In connection with this program, a self-insurance reserve has been established within the General Fund by the Board. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 1996 1997 Beginning of Year Liability Claims and Changes in Estimates $ 0.00 $ 10,734.84 $ $ 772.00 $ 11.677.00 $ Claims Paid End ofYear Liability 9,962.84 $ 9,909.00 $ 772.00 2,540.00 The Board has established a limited risk-management program for dental coverage of its employees and their dependents. Estimated claims are budgeted by management based on known claims and prior experience. The employees contribute a premium to the fund and the Board funds any deficits. Changes in the dental claims liability during the last two fiscal years are as follows: - 17 - BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 4: RISK MANAGEMENT Beginning of Year Liability Claims and Changes in Estimates Claims Paid End ofYear Liability 1996 1997 $ 0.00 $ 121,616.82 $ 121,616.82 $ 0.00 $ 0.00 $ 140,292.05 $ 140,292.05 $ 0.00 The Board has purchased surety bonds to provide additional insurance coverage as follows: Position Covered Superintendent Military Property Custodian Each Principal Each Lunchroom and Assistant Manager Each Secretary and Bookkeeper All Other Employees Amount $ 100,000.00 $ 25,000.00 $ 10,000.00 $ 5,000.00 $ 5,000.00 $ 1,000.00 Note 5: GENERAL LONG-TERM DEBT CAPITAL LEASES The Ben Hill County Board of Education has entered into a lease agreement as lessee for computer equipment. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of its inception. GENERAL OBLIGAnON BONDS OUTSTANDING General Obligation Bonds currently outstanding are as follows: Purpose Interest Rates Amount General Government - Series 1993 2.65% - 5.35% $ 3,190,000.00 The changes in General Long-Term Debt during the fiscal year ended June 30, 1997, were as follows: Balance July 1, 1996 Additions Deductions Payments Balance June 30, 1997 Capital Leases General Obligation Bonds Total $ 0.00 $ 3,405,000.00 $ 3,405,000.00 66,720.00 66,720.00 18,348.07 215,000.00 233,348.07 $ 48,371.93 $ 3.190,000.00 $ 3,238.371.93 - 18 - BEN HILL COUNTY BOARD OF EDUCAnON EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 5: GENERAL LONG-TERM DEBT At June 30, 1997, 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 1998 1999 2000 2001 2002 2003 - 2007 2008 - 2012 $ 18,348.08 $ 371,997.50 18,348.07 378,637.50 18,348.07 379,120.00 378,707.50 382,360.00 1,942,697.50 395,062.50 $ 390,345.58 396,985.57 397,468.07 378,707.50 382,360.00 1,942,697.50 395,062.50 Total Principal and Interest $ 55,044.22 $ 4,228,582.50 $4,283,626.72 Deduct: Imputed Interest 6,672.29 Net Present Value of Future Minimum Lease Payments $ 48,371.93 Note 6: ON-BEHALF PAYMENTS The Board has recognized revenues and expenditures in the amount of$291,212.22 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies. Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of $246,442.95 Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $15,846.27 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 $28,923.00 - 19- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT ,"F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 7: SIGNIFICANT COMMITMENTS The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1997, together with funding available: Project Unearned Executed Contracts Funding Available From State 93/92S-609-005B $ 710.433.13 $ 297,988.62 The amounts described in this note are not reflected in the general purpose financial statements. Note 8: CONTINGENT LIABILITIES Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position. Note 9: RELATED PARTY TRANSACTIONS During the fiscal year 1997, the Ben Hill County Board of Education employed the services of L. E. Harper Construction Company. L. E. Harper Construction Company is owned and operated by L. E. Harper, the son of Louis E. Harper, former Superintendent of Ben Hill County Board of Education and currently employed by the Board as a part-time consultant. During the year, the following contracts between the Ben Hill County Board of Education and L. E. Harper Construction Company (low bidder) were executed: A contract for $539,500.00 was signed on February 13, 1996, for the Ben Hill County Elementary School, Phase II. Current year expenditures were $85,167.00. A second contract for $1,407,000.00 was signed on March 18, 1997, for Fitzgerald High School renovations, modifications and additions. Current year expenditures were $756,550.00. Note 10: RETIREMENT PLANS TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS) TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its - 20- BEN HILL COUNTY BOARD OF EDUCATION EXHIBIT "F" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 1997 Note 10: RETIREMENT PLANS members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81 % and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 1997 1996 1995 100% 100% 100% $ 1,304,473.40 $ 1,232,722.33 $ 1,11 0,896.70 Note 11: OTHER FINANCIAL NOTE The Ben Hill County Board of Education established a Minority Teacher Recruitment Program policy to provide, annually, two assistantships for minority students, and if otherwise suitable, one candidate that is not of a minority race. The assistantships are for students in teacher training programs at a cost to the school system of up to $3,000.00 per year (1,000.00 per student). The Board's contributions is in the form ofloans which earn a minimum interest rate of 9% per annum beginning immediately upon completion of the individual's study or upon termination of his/her training and education. For each year of practicing in the Ben Hill County School System, the applicant shall receive credit for the amount of the scholarship received during any year in school. An analysis of the status of this program is as follows: Balance July 1, 1996 $ 3,500.00 Deductions: Cancellation - Teaching Service 0.00 Balance June 30, 1997 $ 3,500.00 - 21 - BEN HILL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPEC~LREVENUEFUND JUNE 30,1997 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTIERY PROGRAMS FEDERAL PROGRAMS $ 427,373.10 $ 90,363.85 14,249.05 $ 159,692.84 8,277.45 3,122.72 Total Assets $ 453,022.32 $ 90,363.85 $ ==1=59=,6=9=2=.8=4 LIABILITIES AND FUND EQUITY LIABILITIES Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Continuation of State Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated Total Fund Equity $ 661.46 $ 15,171.04 $ 44,345.18 24,637.76 47,726.46 40,105.44 70,032.80 5,913.23 5,951.70 $ 62,897.50 $ 90,363.85 $ 101,283.72 $ 8,277.45 3,122.72 378,724.65 $ $ 390,124.82 $ $ 58,409.12 0.00 0.00 $ 0.00 58,409.12 Total Liabilities and Fund Equity $ 453,022.32 $ 90,363.85 $ ==1=59=,6==9=2=.8=4 See notes to the general purpose financial statements. - 22- EXHIBIT"G" OTHER PROGRAMS TOTALS JUNE 30, 1997 JUNE 30, 1996 $ 4,899.53 $ 522,636.48 $ 380,322.40 932.00 174,873.89 355,695.75 8,277.45 3,122.72 7,633.45 1,579.35 $ ==".;5;1,;,8;;,;;3;,,;,1;,;;;;.5,;.3 $ 708,910.54 $ 745,230.95 $ 661.46 $ 201,682.33 $ 337.08 84,491.06 43,780.80 157,864.70 151,964.64 706.60 12,571.53 28,448.16 $ 1,043.68 $ 255,588.75 $ 425,875.93 $ 58,409.12 $ 24,554.50 $ 4,787.85 4,787.85 8,277.45 3,122.72 7,633.45 1,579.35 0.00 378,724.65 285,587.72 $ 4,787.85 $ 453,321.79 $ 319,355.02 $ ==".;5;1,;,8;;,;;3;,,;,1,;,;;;;5,;.3 $ 708,910.54 $ 745,230.95 - 23- BEN HILL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES SPEC~LREVENUEFUND YEAR ENDED JUNE 30. 1997 REVENUES State Funds Federal Funds Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food FUND BALANCE JUNE 30 SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS FEDERAL PROGRAMS $ 83,242.00 $ 866,154.53 327,072.06 $ 1,276,468.59 $ 486,219.75 $ 486,219.75 $ 1,144,373.95 22,977.80 1,167,351.75 $ $ 1,183,331.66 $ 1,183,331.66 $ $ 93,136.93 $ 367,114.44 $ 46,497.51 8,461.51 24,890.00 18,705.21 19,745.99 894.38 486,309.04 $ -89.29 $ 872,667.64 42,721.95 46,734.60 4,746.25 15,894.34 70,475.43 66,808.28 1,120,048.49 47,303.26 $ $ $ 93,136.93 $ 294,800.52 644.00 1,543.37 89.29 $ 89.29 $ -13,448.64 -13,448.64 0.00 $ 0.00 33,854.62 24,554.50 $ 390,124.82 $ ===~O';';;OO~ $ ===58;;.,4=0=9=.1.2.. See notes to the general purpose financial statements. - 24- EXHIBIT"H" OTHER PROGRAMS TOTALS YEAR ENDED JUNE 30,1997 JUNE 30,1996 $ 66,316.40 $ 635,778.15 $ 669,867.27 2,010,528.48 1,935,876.40 350,049.86 315,587.47 $ 66,316.40 $ 2,996,356.49 $ 2,921,331.14 $ 41,172.87 $ 1,280,954.95 $ 1,395,327.47 10,098.68 10,257.00 46,497.51 61,282.14 81,881.60 4,746.25 18,705.21 35,640.33 71,369.81 1,183,331.66 66,808.28 38,885.96 27,659.67 83,285.33 751.18 47,943.09 29,837.33 59,775.00 1,222,089.24 65,597.61 $ 61,528.55 $ 2,851,217.74 $ 2,971,151.88 $ 4,787.85 $ 145,138.75 $ -49,820.74 $ 89.29 $ -13,448.64 $ -13,359.35 $ 17,722.67 17,722.67 $ 4,787.85 $ 131,779.40 $ -32,098.07 0.00 319,355.02 356,373.00 644.00 1,543.37 -5,139.05 219.14 $ 4,787.85 $ 453,321.79 $ 319,355.02 - 25- BEN HILL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 1997 EXHIBIT "I" ASSETS Cash and Cash Equivalents Accounts Receivable NONEXPENDABLE TRUST FUND CUMBEE-MCCALL FUND EXPENDABLE TRUST FUND FITZGERALD HIGH SCHOOL COLLEGE PREPARATORY FUND TOTALS JUNE 30,1997 JUNE 30,1996 $ 3,100,98 $ 6,850.24 $ 9,951.22 $ 12,962.29 7,59 Total Assets $ 3,100,98 $ ======6=,8=:5=0,.2..4= $ 9,951.22 $ =====12=,9:.=6=9=:,8==8 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable FUND EQUITY Fund Balances Reserved For Endowment Corpus $ Unreserved Undesignated Total Fund Equity $ $ 2,000.00 1,100.98 $ 3,100,98 $ 52.32 $ $ 6,797,92 6,797,92 $ 52,32 2,000.00 $ 7,898.90 9,898.90 $ 2,000.00 10,969,88 12,969.88 Total Liabilities and Fund Equity $====3,==1=00=:,=98:,,$ 6,850.24 $ 9,951,22 $ =====12==,9=6=9=::,8==8 See notes to the general purpose financial statements, - 26- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30, 1997 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Agriculture, U. S. Department of Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1997 Grant National School Lunch Program 1997 Grant Food Distribution Program (1) Total U. S. Department of Agriculture Corporation for National and Community Service Pass-Through From Georgia Department of Education Learn and Serve America School and Community Based Programs 1997 Grant Education, U. S. Department of Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1997 Grant Title II Eisenhower Professional Development 1996 Grant 1997 Grant Title VI Innovative Education Program Strategies 1997 Grant Goals 2000 State and Local Education Systemic Improvement Grant 1997 Grant Safe and Drug-Free Schools 1997 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1997 Grant Preschool 1997 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1997 Grant CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 10.553 10.555 10,550 N/A $ 191,450.44 N/A 621,172.00 $ N/A 53,532.09 $ 866,154.53 $ (2) 1,129,799.57 (3) 53,532.09 1,183,331.66 94.004 N/A $ 8,000.00 $ 7,953.06 * 84.010 84.281 84.281 84.298 N/A $ 695,173.02 $ 695,173.02 N/A 10,138.88 N/A 18,944.00 10,138.88 10,143.27 N/A 20,775.00 20,775.00 84.276 N/A 84.186 N/A 31,111.35 61,786.75 21,654.13 61,786.75 84.027 N/A 84.173 N/A 100,776.00 37,500.00 100,776.00 37,500.00 84.048 N/A 38,960.57 38,960.57 - 27- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30,1997 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT Education, U, S. Department of Pass-Through From Georgia Department of Education Vocational Education - Basic Grants to States Tech-Prep Education 1997 Grant Pass-Through From Georgia Department of Human Resources High Risk Youth Grant 1997 Grant Total U. S. Department of Education Health and Human Services, U. S. Department of Pass-Through From Georgia Department of Human Resources Child Care and Development Block Grant 1996 Contract No. 427-93-61423 1997 Contract No. 427-93-71634 Undistributed by Project Total U. S. Department of Health and Human Services Justice, U. S. Department of Pass-Through From Office of the Governor Juvenile Justice and Delinquency Prevention Allocation to States Project Opportunity 1996 Contract No. 96J-06-9404-0022 1997 Contract No. 96J-06-9404-0013 Undistributed by Project Total U. S. Department of Justice OTHER FINANCIAL ASSISTANCE Defense, U. S. Department of Direct Department of the Army R.OTC. Program 1997 Grant CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 84,243 N/A $ 50,000.00 $ 50,887.36 (3) 84.186 N/A 11,000.00 $ 1,076,165.57 $ 11,000.00 1,058,794.98 93.575 93.575 93.575 N/A $ 12,294.20 N/A 27,457.05 N/A $ $ 39,751.25 $ (4) (4) 47,179.32 47,179.32 16.540 16.540 16.540 N/A $ 2,741.95 N/A 17,715.18 N/A $ $ 20,457.13 $ (4) (4) 20,460.60 20,460.60 $ 28,286.56 (4) Total Federal Financial Assistance $ 2,038,815.04 $ 2,317,719.62 N/A = Not Available - 28- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED JUNE 30.1997 SCHEDULE "1" Notes to the Schedule of Expenditures of Federal Awards (1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year. (2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1997 National School Lunch Program. (3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source. (4) Expenditures on this program were not maintained by fund source. Major Programs are identified by an asterisk (*) in front of the CFDA number. The Board did not provide Federal Assistance to any SUbrecipient. The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Ben Hill County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the financial statements for the governmental funds. See notes to the general purpose financial statements. - 29- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30,1997 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Specialist Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Advanced Placement Exams Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentoring Program Next Generation Schools Preschool Handicapped Program Remedial Summer School Program Teachers' Retirement Lottery Program Instructional Technology Georgia State Financing and Investment Commission Reimbursement on Construction Projects Office of Planning and Budget Georgia Challenge Program Office of School Readiness Pre-Kindergarten Program Office of Treasury and Fiscal Services Public School Employees Retirement CONTRACT Education, Georgia Department of Next Generation Schools GOVERNMENTAL FUND TYPES SPECIAL CAPITAL GENERAL REVENUE PROJECTS FUND FUND FUND TOTAL $ 7,124,930.00 841,592,00 332,934.00 296,325.00 91,048.00 2,027,875.00 272,615.00 83,412.00 270,405.00 417,419.00 78,810.00 20,846.00 27,157.00 -933,728.00 1,014,832.00 $ 2,634.00 203.01 88,493.77 24,308.59 500.00 246,442.95 4,500.00 6,274.88 15,846,27 83,242.00 5,000,00 9.293.40 39.891.00 70,800.00 $ 7,124,930.00 841,592.00 332,934,00 296,325.00 91,048.00 2,027,875.00 272,615.00 83,412.00 270,405.00 417,419.00 78,810.00 20,846.00 27,157.00 -933,728.00 1,014,832.00 83,242,00 2,634.00 203.01 88,493.77 24,308.59 500.00 246,442.95 5,000.00 4,500.00 9,293.40 39,891.00 6,274.88 15,846,27 70,800.00 28,923.00 $ 12,132.00 415,419,75 879,852.56 879,852.56 12,132.00 415,419.75 28,923.00 5,000.00 5,000.00 $ 12,389,598.47 $ 635,778.15 $ 879,852.56 $ 13,905,229.18 See notes to the general purpose financial statements. - 30- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1997 SCHEDULE "3" EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services INSTRUCTIONAL PRE-KINDERGARTEN TECHNOLOGY PROGRAM $ 70,889.29 $ 296,225.15 $ 46,497.51 8,461.51 24,890.00 18,705.21 19,745.99 894.38 TOTAL 367,114.44 46,497.51 8,461.51 24,890.00 18,705.21 19,745.99 894.38 Total Expenditures $ 70,889.29 $ 415,419.75 $ ======4=86=,3=0=9=.0=4 RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Instructional Technology Pre-Kindergarten Program $ 348,789.60 70,889.29 66,630.15 $ 486,309.04 See notes to the general purpose financial statements. - 31 - THIS PAGE LEFT BLANK BEN HILL COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1997 SCHEDULE "4" Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis Salaries Operations Less: Expenditures for Media Center Programs in Excess of Total Media Allotment Expenditures per Audit Amount of Underexpenditure for Total Allotment FOURTEEN WEIGHTED AND MEDIA CENTER PROGRAMS 100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS $ 8.595,781.00 $ _ _-=2:..::.62=.1.,=..:29;.;,.7.:,.=.0=..0 $ 9,588,570.67 662.818.25 $ _ _...:6;.;.07;..:.,.;.;55,-,-7.:..;.4..;..3 $ 10.251,388.92 -45,027.39 $ 10,206,361.53 $ 0.00 $====~O=.O==O See notes to the general purpose financial statements. - 33 - BEN HILL COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS BY PROGRAM GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1997 GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (0) Grades 1 - 3 (0) Sub-Total K-3 Grades 4 - 5 (0) Grades 6 - B (0) Grades 9 - 12 (0) High School Laboratories (0) Vocational Education Laboratories (0) Total General and Career Education Programs SPECIAL EDUCATION PROGRAMS Regular Programs Category II (0) Category III (0) Category IV (*) Category V (0) Sub-Total - Regular Category VI (Gifted) (0) Total Special Education Programs REMEDIAL EDUCATION PROGRAM (0) Total Fourteen Weighted Programs MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs Total Fourteen Weighted and Media Center Programs STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development Total Staff Development Programs (0) Identifies Fourteen Weighted Programs, ALLOTMENTS FROM DEPARTMENT OF EDUCATION REQUIRED ORIGINAL ~ ORIGINAL MID-TERM $ 694,544.00 $ 625,OB9.60 $ 1,96B,622,00 1,771,759.BO $ 2,663,166.00 90 $ 2,396,B49.40 $ B9B,19B.00 90 BOB,37B.20 1,59B,B06.00 90 1,43B,925,40 845,257.00 90 760,731.30 612,546.00 90 551,291.40 506,957.00 90 456,261.30 $ 7,124,930.00 $ 6,412,437.00 $ 0.00 0.00 0.00 $ 727,364.00 $ 654,627,60 $ 0.00 $ 727,364,00 90 $ 654,627.60 $ 114,22B.00 90 102,B05.20 $ B41,592.00 $ 757,432,BO $ $ 332,934.00 90 $ 299,640.60 $ $ B,299,456.00 $ 7,469,510.40 $ $ 23B,694.00 90 $ 214,824.60 $ 57,631.00 90 51,B67.90 $ 296,325.00 $ 266,692.50 $ $ B,595,7Bl.00 $ 7,736,202.90 $ 0.00 0.00 0,00 0.00 0,00 0.00 0,00 $ 25,359.00 65,6B9.00 $ 25,359.00 $ 65,6B9,00 $ 91,04B.00 100 $ 91,04B,00 $ 0.00 0.00 See notes to the general purpose financial statements, - 34 SCHEDULE "5" TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 625,089.60 $ 719,232.45 $ 23,583.78 $ 742,816.23 1,771,759.80 1,717,384.04 51,903.71 1,769,287.75 $ 2,396,849.40 $ 2,436,616.49 $ 75,487.49 $ 2,512,103.98 $ 0.00 808,378.20 844,035.07 105,739.02 949,774.09 0.00 1,438,925.40 1,866,343.15 147,418.45 2,013,761.60 0.00 760,731.30 864,057.14 101,685.25 965,742.39 0.00 551,291.40 985,230.60 52,543.71 1,037,774.31 0.00 456,261.30 597,873.68 72,684.94 670,558.62 0.00 $ 6,412,437.00 $ 7,594,156.13 $ 555,558.86 $ 8,149,714.99 $ 654,627.60 $ 373,934.45 $ 609,246.69 86,634.23 19,304.32 $ 17,361.63 9,721.95 330.00 393,238.77 626,608.32 96,356.18 330.00 $ 654,627.60 $ 1,069,815.37 $ 46,717.90 $ 1,116,533.27 0.00 102,805.20 115,194.11 3.322.91 118,517.02 0.00 $ 757,432.80 $ 1.185,009.48 $ 50,040.81 $ 1,235,050.29 $ 299,640.60 $ 523,313.49 $ 1,957.76 $ 525,271.25 0.00 $ 7,469.510.40 $ 9.302,479.10 $ 607,557.43 $ 9,910,036.53 $ 214,824.60 $ 286,091.57 $ $ 286,091.57 0.00 51,867.90 55,260.82 55,260.82 0.00 $ 266,692.50 $ 286,091.57 $ 55.260.82 $ 341,352.39 $ 7,736,202.90 $ 9,588,570.67 $ 662,818.25 $ 10,251,388.92 $ 0.00 $ 25,359.00 65,689.00 $ ==9;,;1:;;,04=8=.00= $ 51,847.65 $ 51,847.65 41,208.83 41,208.83 $ 93,056.48 $ 93,056.48 $======0=,00= - 35 - SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS CLAUDE L. VICKERS STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 June 8, 1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Ben Hill 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 fmancial statements of Ben Hill County Board of Education as of and for the year ended June 30, 1997, and have issued our report thereon dated June 8, 1998. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the generalpurpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Compliance As part of obtaining reasonable assurance about whether Ben Hill County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered Ben Hill County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its 97YB-40 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 of the internal control over financial reporting that, in our judgement, could adversely affect Ben Hill County Board of Education's ability to record, process, summarize and report fmancial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6091-97-01 and FS-6091-97-03. 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 normal course of performing their assigned functions. Our consideration of the internal control over fmancial 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, all of the reportable conditions noted above are considered to be material weaknesses. This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, CLV:jb 97YB-40 Claude L. Vickers State Auditor CLAUDE L. VICKERS STATE AUDITOR (404) 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400 June 8,1998 Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Ben Hill County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 Ladies and Gentlemen: Compliance We have audited the compliance of Ben Hill County Board of Education with the types of compliance requirements described in the Us. Office 0/Management and Budget (OMB) Circular A-I33 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1997. Ben Hill County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Ben Hill County Board of Education's management. Our responsibility is to express an opinion on Ben Hill County Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-l33, Audits o/States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perforn1 the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Ben Hill 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 Ben Hill County Board of Education's compliance with those requirements. 97SA-65 As described in item FA-6091-97-01 in the accompanying Schedule of Findings and Questioned Costs, Ben Hill County Board of Education did not comply with requirements regarding Equipment and Real Property Management that are applicable to its Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies Program. In our opinion, except for the noncompliance described in the preceding paragraph, the Ben Hill 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, 1997. Internal Control Over Compliance The management of Ben Hill 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 Ben Hill 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-133. We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgement, could adversely affect the Ben Hill County Board of Education's ability to administer a major Federal program in accordance with applicable requirements of laws, regulations, contracts and grants. A reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6091-97-01. 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 applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. 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, the reportable condition noted above is considered to be a material weakness. 97SA-65 This report is intended for the infonnation of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution of this report which is a matter of public record. Respectfully submitted, ~ Claude L. Vickers State Auditor CLV:jb 97SA-65 SECTION III AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS BEN HILL COUNTY BOARD OF EDUCAnON AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS 6091-93-01 6091-93-02 6091-94-02 6091-95-01 6091-95-02 6091-96-01 Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented Previously Reported Corrective Action Implemented CORRECTIVE ACTIONIRESPONSES ACCOUNTING CONTROLS (OVERALL) Inadequate Separation of Duties Finding Control Number 6091-93-01 Due to current budgetary constraints, the Board is unable to hire the additional staffrequired to clear this finding. The Board feels it has provided for the most appropriate assignment of duties with the number of personnel available to perform the accounting functions. With staff limitations, this finding cannot be totally resolved. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number 6091-93-02 Due to current staffing limitations and budgetary considerations prohibiting the hiring of additional administrative staff the Board has decided not to pursue the recording of general fixed assets on the financial statements. SECTION IV FINDINGS AND QUESTIONED COSTS BEN HILL COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30,1997 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Ben Hill County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Ben Hill County Board of Education disclosed fmancial statement reportable conditions related to the following control categories. Cash and Cash Equivalents General Fixed Assets All of the reportable conditions described above are considered to be material weaknesses. 3. Noncompliance Material to the Financial Statements The audit ofthe Ben Hill 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 Ben Hill County Board of Education 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 considered to be a material weakness. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Ben Hill County Board of Education's report on compliance with requirements applicable to major programs was qualified. 6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-l33 The Ben Hill County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) of OMB Circular A-l33. This audit finding is included in Section III of this schedule. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Service - School Breakfast Program 10.555 Food and Nutrition Program - Food Service - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. - 1- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 I SUMMARY OF AUDITOR'S RESULTS 9. Low Risk Auditee The Ben Hill 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 CASH AND CASH EQUIVALENTS Inadequate Separation of Duties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6091-97-01 The Board did not provide for adequate separation of employee duties in the performance of the following accounting functions and procedures related to cash and cash equivalents. Cash receipts function was not separated from record keeping function; the check signing function was not separated from either check writing function or the record keeping function and the bank reconciliation not reviewed by an administrator independent of cash operations. These conditions were a result of management's decision to limit the number of administrative staff made responsible for accounting functions. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with existing staff. Management's Response: The audit report for the year ended June 30, 1997, stated that the Board of Education did not provide for adequate separation of employee duties in the performance ofthe following accounting functions. A cash log has been established with the mail clerk opening the mail and recording all revenue in the cash log, then giving the revenue along with a copy of the check or receipt for the cash to the Revenue Clerk who in turn makes a deposit ticket and the Financial Officer takes the deposit to the bank. At the end of each month the mail clerk balances cash log with the Revenue Clerk. The payroll clerk will sign all accounts payable checks and the Accounts Payable Clerk will sign all payroll checks. Run them through the check signer. Financial Officer will review the checks before distributing. Superintendent's Secretary or Revenue Clerk will put checks into envelopes and mail. Bank reconciliation is to be reviewed each month by the Financial Officer. -2- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 1997 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS EMPLOYEE COMPENSATION Salary Overpayment Nonmaterial Noncompliance Amount: $1,040.00 Finding Control Number: FS-6091-97-02 A sample of 28 employees was selected to test the accuracy of employee compensation. The results of the sample revealed an instance where an employee was overpaid in the amount of$1,040.00. This overpayment was the result of an error made by the Board in calculating time worked by the employee. The Board should seek reimbursement of this overpayment for deposit into the Board's General Fund. Management's Response: A sample of 28 employees was selected to test the accuracy of employee compensation. The results of the sample revealed an instance where an employee was overpaid in the amount of $1,040.00. The Board is seeking reimbursement for this overpayment. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness . Repeated From Prior Year Finding Control Number FS-6091-97-03 The Ben Hill County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. Management's Response: The audit report for the year ended June 30, 1997, noted that the management of the Board of Education has chose not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. We concur with this recommendation. Due to current staffing limitations and budgetary consideration prohibiting the hiring of additional staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. -3- BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1997 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records U. S. Department of Education Pass-Through From Georgia Department of Education Reportable Condition - Material Weakness Material Noncompliance Finding Control Number: FA-6091-97-01 Property management records maintained by the Board for the Elementary and Secondary Education Act Title I - Grants to Local Educational Agencies (CFDA 84.010) were incomplete and failed to meet property standards as set forth in Chapter 41 of the Financial Management for Georgia Local Units of Administration (FMGLUA). The accounting records maintained by the Board and presented for examination did not contain accurate equipment location and disposition, when applicable. This condition resulted from Management's failure to keep accurate records of equipment location when moving to a new school and their disregard for the provisions of FMGLUA. Perpetual inventory records should include information identifying the physical location of equipment as well as historical information regarding additions and deletions made to the equipment inventory during each fiscal year, when applicable. Periodic physical inventory counts should be made and reconciled to the property records to ensure the accuracy of the Board's inventory records. Management's Response: The accounting records maintained by the Board and presented for examination did not contain accurate equipment location and disposition, when applicable. The Board will conduct a beginning and ending inventory each school year. This will include properly marked inventory for each Grant. -4-