Audit report, Ben Hill County Board of Education, Fitzgerald, Georgia, year ended June 30, 1998

AUDIT REPORT BEN HILL COUNTY BOARD OF EDUCATION
FITZGERALD, GEORGIA YEAR ENDED JUNE 30, 1998

BEN HILL COUNTY BOARD OF EDUCATION
- TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

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

6

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCE

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

7

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

9

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

10

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

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 REQUIRED SUPPLEMENTARY INFORMATION

27

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

3 SCHEDULE OF STATE REVENUE

30

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

31

BEN HILL COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALTIY BASIC EDUCATION PROGRAMS

5

OVERALL

33

6

BY PROGRAM

34

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

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

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

SECTION I
FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 30, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Ben Hill County Board ofEducation
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, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Ben Hill County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in GoYernment Auditin~ Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies whi~h, 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 confonn to generally accepted accounting principles.

98ARL-13B

* School activity accounts maintained at the individual schools are not included in the general pwpose
financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general pwpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation 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, 1997, were improperly recorded in the year ended June 30, 1998. To confonn 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 pwpose financial statements of these variances or omissions have not been detennined, but are believed to be material.
In our opinion, except for the effects on the general pwpose financial statements of the matters referred to in the preceding paragraph, the general pwpose financial statements referred to above present fairly, in all material respects, the financial position ofthe Ben Hill County Board of Education as of June 30, 1998, 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 Auditin~ Standards, we have also issued our report dated July 30, 1999, on our consideration ofthe Ben Hill County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
The year 2000 supplementary infonnation on Schedule "1" is not a required part of the basic financial statements but is supplementary infonnation required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally ofinquiries ofmanagement regarding the methods ofmeasurement and presentation ofthe supplementary infonnation. However we did not audit the infonnation and do not express an opinion on it. In addition, we do not provide assurance that Ben Hill County Board ofEducation is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Ben Hill County Board of Education does business are or will become year 2000 compliant.
Our audit was perfonned for the pwpose of fonning an opinion on the general pwpose 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 2 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for pwposes of additional analysis and are not a required part of the general pwpose financial statements. Such infonnation has been subjected to the auditing procedures applied in the audit of the general pwpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such infonnation is fairly presented in all material respects in relation to the general pwpose financial statements taken as a whole.
98ARL-13B

A copy of this report has been filed as a pennanent 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.
RWH:jb 98ARL-13B

BEN HILL CQUNIY BOARD OF EDUCATION

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST FUNDS

ACCOUNT GROUP GENERAL
LONGTERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 1998

JUNE 30,1997

$

21,003.80 $

3,757.28

$

562,482.93 $ 2,433,531.28

500,000.00

3,262.68

2,773,080.09

8,836.45

329,584.72

544,188.23

3.500.00

3,500.00

$

529,840.25

15,820.62 3,780.76
529,840.25

8,277.45 3,122.72
373,044.80

2,440,159.75 33,288.96

2,440,159.75 33,288.96

2,816,955.20 48,371.93

$

529,840.25 $

7,019.96 $

3,003,288.96 $ 6,691,538.08 $ 6,230,991.61

$

469,041.56

146,439.38 $

381,640.15

187,653.59

157,864.70

10,041.71

12,571.53

8,946.19

39,220.30

70,350.00

$

33,288.96

33,288.96

48,371.93

2.970,000.00

2,970,000.00

3,190,000.00

$

3,003,288.96 $ 3.864,631.69 $ 3,860,798.31

$

529,840.25

$

0.00

$

529.840.25 $

$

529,840.25 $

2,000.00
5,019.96 7,019.96

$

97,501.00

1,073.19 $

58,409.12

4,787.85

4,787.85

529,840.25

373,044.80

2,000.00

2,000.00

15,820.62 . 3,780.76

8,277.45 3,122.72 523,955.96

857.36 2,171,245.36

10,664.68 1,385,930.72

$ 2,826,906.39 $ 2,370,193.30

7,019.96 $

3,003.288.96 $ 6,691 ,538.08 $ 6,230,991.61

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 30,1998

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services central Support Services Other Support Services Food Services Operation Community Services Operations
.Capital Outlay Debt Service
Principal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

GENERAL FUND

GOVERNMENTAL FUND

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 13,041,579,24 $
3,742,832.01 375,462.49
$ 17,159,873.74 $

630,500,78 $ 1,961,100.57
336,967,92
2,928,569,27 $

297,988.62 297,988,62

$ 10,957,643,12 $
539,879.84 567,633,01 336,780.46 393,783,56 1,278,907.19 178,080,45 1,016,762,08 551,065,28 63,163,56 208,260,99
669,05
45,401.18
15,082,97 3,265,11

1,334,493.05
95,987,07 68,383,05
81,932,39 27,934,97
18,429,87 33,608,71
51,967,61 1,260,366,06
28,869,78 $

$ 16,156,3n,85 $ $ 1,003,495,89 $

3,001,972,56 $ -73,403,29 $

933,485,85
933,485,85 -635,497,23

$

$

-166,162,74

$

-166,162,74 $

$

~37,333,15 $

1,009,971,85

54,621.47 $
54,621 ..47 $
-18,781,82 $ 453,321,79
7,543,17 658.04

111,541,27 111,541,27 -523,955.96 523,955.96

FUND BALANCE JUNE 30

$ 1,847,305.00 $

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

-4-

442,741.18 $

~O~.OO~

EXHIBIT-B-

TYPES DEBT
SERVICE FUND

TOTAl

FIDUCIARY FUND TYPE EXPENDABLE TRUST FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30,1998

JUNE 30,1997

$ 13,970,068.64

1,961,100.57

$

508,221.58

4,251,053.59

21,487.29

733.917.70 $

$

529,708.87 $ 20,916,140.50 $

$
3.577.54 3,577.54 $

13,970,068.64 $ 1,961,100.57 4,251,053.59
737,495.24
20,919,718.04 $

13,905,229.18 2,038,815.04 4,115,950.93
730,818.76
20,790,813.91

$ 12,292,136.17 $

635,866.91 636,016.06 336,780.46 475,715.95 1,306,842.16 178,080.45 1,035,191.95 584,673.99 63,163.56 260,228.60 1,261,035.11
28,869.78 978,887.03

$

220,000.00

151,997.50

915.92

235,082.97 155,262.61
915.92

$

372,913.42 $ 20,464,749.68 $

$

156,795.45 $

451,390.82 $

6,618.18 $
6,618.18 $ -3,040.64 $

12,298,754.35 $
635,866.91 636,016.06 336,780.46 475,715.95 1,306,842.16 178,080.45 1,035,191.95 584,673.99
63,163.56 260,228.60 1,261,035.11
28,869.78 978,887.03
235,082.97 155,262.61
915.92
20,471,367.86 $
448,350.18 $

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

$

166,162.74

-166,162.74

$

0.00

$

156,795.45 $

451,390.82 $

373,044.80

2,360,294.40

7,543.17 658.04

$

$

166,162.74

-166,162.74

$

0.00 $

66,720.00 13,359.35 -13,359.35
66,720.00

-3,040.64 $ 6,797.92

448,350.18 $ 2,367,092.32

228,435.58 2,136,469.37

7,543.17 658.04

644.00 1,543.37

$

529,840.25 $ 2,819,886.43 $

3?57.28 $ 2,823,643.71 $ 2,367,092.32 -5-

BEN HILL COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUNp BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1998

EXHIBITC

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 12,600,709.00 $ 13,041,579.24

33,000.00

3,512,504.00

3,742,832.01

95,526.00

375,462.49

Total Revenues

$ 16,241,739.00 $ 17,159,873.74

EXPENPITURES

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 ouUay Debt Service

$ 11,687,759.00 $ 10,957,643.12

695,749.00 419,722.00 311,385.00 391,141.00 1,102,444.00 169,215.00 1,146,390.00 622,009.00
76,998.00 129,994.00

539,879.84 567,633.01 336,780.46 393,783.56 1,278,907.19 178,080.45 1,016,762.08 551,065.28 63,163.56 208.260.99
669.05

45,401.18 18,348.08

Total Expendhures

$ 16,752,806.00 $ 16,156.377.85

Excess of Revenues over (under) Expendhures

$ -511,067.00 $ 1,003,495.89

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ -SOO,Ooo.OO $ -166,162.74

Total Other Financing Sources (Uses)

$ -SOO,OOO.OO $ -166,162.74

Excess of Revenues and Other Financing Sources over (under) Expendhures and Other Financing Uses $ -1,011,067.00 $

837,333.15

FUNP BALANCE JULY 1. 1997

1,514,458.66

1,009.971.85

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 617,522.00 $ 630,500.78

1,900.738.00

1,961,100.57

405,600.00

336,967.92

$ 2,923,860.00 $ 2,928,569.27

$ 1,161,781.55 $ 1,334,493.05

170,460.45 56,366.00

95,987.07 68,383.05

102,123.00 771.00

81,932.39 27,934.97

19,493.00 33,363.00

18,429.87 33,608.71

31,400.00 1,228,447.00
32,696.00

51,967.61 1,260,366.06
28,869.78

$ 2,836,901.00 $ 3,001,972.56

$

86,959.00 $

-73,403.29

$

54,621.47

$

54,621.47

$

86,959.00 $

-18,781.82

442,612.37

453,321.79

-5,010.99

7,543.17 658.04

FUND BALANCE JUNE 30, 1998

$ 503,391.66 $ 1,847,305.00

$ 524,560.38 $ 442,741.18

The notas to the general purpose financial statements are an integral part of this statement.
-6-

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "0"

STATEMENT OF REVENUES. EXPENSES AND CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENABLE TRUST FUND

YEAR ENDED JUNE 30. 1998

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 30, 1998 JUNE 30, 1997

$

0.00 $

0.00 $

0.00

$

0.00 $

0.00 $

0.00

$

0.00 $

0.00 $

0.00

161.70

161.70

65.25

$

161.70 $

161.70 $

65.25

3,100.98

3,100.98

3,035.73

FUND BALANCE JUNE 30

$

3,262.68 $

3,262.68 $ ========3=,1.0,==0=.9==8

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

BEN HILL COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENABLE TRUST FUND YEAR ENDED JUNE 30. 1998

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 (Decrease) in Cash
Cash and Cash Equivalents - July 1

CUMBEEMCCALL
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30,1998 JUNE 30,1997

$

0.00 $

0.00 $

0.00

$

161.70 $

161.70 $

72.84

$

161.70 $

.161.70 $

72.84

$

3,100.98 $

3,100.98 $

3,028.14

Cash and Cash Equivalents - June 30

$

3,262.68 $

3,262.68 $ ==-=====3=,1=0..0..=.9.8...

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

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1; SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES
REPORTING ENTITY
The Ben Hill County Board ofEducation (Board) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide 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 ofpurchase. 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 pwpose financial statements.
The general pwpose financial statements account for all State, Federal, Taxes and Other funds under control ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
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 pwposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
- 10-

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

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, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPES - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:
NONEXPENDABLE TRUST FUND Cumbee-McCall Fund - the fund used to account for an endowment ofwhich the corpus is to be invested and preserved intact with the resultant income to be used for the purpose of providing for the care and support ofunderprivileged 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 debt outstanding and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined 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 ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available SPendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
All nonexpendable trust funds are accounted for on a flow of economicresources 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 HUL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

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 detennined 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.
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 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. 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, 1998, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Boardsubsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. 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 ofEducation's budget is a complete ~cial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prep~es a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a
- 12 -

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSmON OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any cOIporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.
-13 -

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ruNE 30. 1998

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 1997 tax year (calendar year) on September 25, 1997 (levy date). Taxes were due on December 20, 1997. The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. 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 1997 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
~mills

~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 reserv~tionsof 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 statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the

- 14-

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note I: SUMMARy OF SIGNIFICANT ACCOUNTING POLICIES
full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Tenn 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.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in confonnity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
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 ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit 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,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates ofindebtedness or other direct obligations of the United States or of the State of Georgia,
- 15 -

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 2: DEPOSITS

(4) Bonds, bills, notes, certificates of indebtedness or other obligations ofthe counties or municipalities of the State of Georgia,

(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,

(6) Industrial revenue bonds and bonds ofdevelopment authorities created by the laws of the State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest 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, 1998, the bank balances were $4,487,353.37. 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 mstitution'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 financial institution, or by its trust department or agent but not in the Board's name.)

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk Cate&<y

Bank Balance

1

$ 300,000.00

2

3,977,914.61

3

209.438,76

Total

$ 4.487.353.37

- 16-

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The Board is exposed to various risks 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 and job related illness or injuries to employees. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any ofthe past three years.

The Board has elected to self-insure for all losses related to natural disaster. In addition, the Board has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Board has not experienced any losses related to these risks in 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 ofthat loss can be reasonably estimated.

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

1997 1998

Beginning ofYear liabilitY

Claims and Changes in Estimates

$

772,00 $

11.677,00 $

$

2,540,00 $

5,376,00 $

Claims Paid

End ofYear liability

9,909,00 $ 2,988,00 $

2,540,00 4,928,00

The Board has established a limited risk-management program for dental coverage ofits 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 dental claims liability during the last two fiscal years are as follows:

1997 1998

Beginning of Year liability

Claims and Changes in Estimates

$

0,00 $ 140,292.05 $

$

0,00 $ 124,973,24 $

Claims Paid

End ofYear liability

140.292,05 $

0,00

124,973.24 $

0,00

- 17 -

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

ruNE 30, 1998

Note 4: RISK MANAGEMENT

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

Position Covered

Amount

Superintendent Financial Director Military Property Custodian Vocational Director Each Principal Each Lunchroom Manager and Assistant Manager Each Secretary and Bookkeeper All Other Employees

$ 100,000.00 $ 50,000.00 $ 25,000.00 $ 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 OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows:

Purpose

Interest Rates

Amount

General Government - Series 1993

2.65% - 5.35% $ 2,970,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1998, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1997

$ 48,371.93. $ 3,190,000.00 $ 3,238,371.93

Deductions Payments

15,082.97

220,000.00

235,082.97

Balance June 30, 1998

$ 33,28.96 $ 2,970,000.00 $ 3,003,2.96

- 18-

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 5: GENERAL LQNG-TERM DEBT

At June 30, 1998, 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

1999 2000 2001 2002 2003 2004 - 2008
Total Principal and Interest

$ 18,348.07 $ 378,637.50 $ 396,985.57

18,348.07

379,120.00

397,468.07

378,707.50

378,707.50

382,360.00

382,360.00

384,490.00

384,490.00

1.952.820.00 1.952,820.00

$ 36,696.14 $ 3,856.135.00 $ 3,892.31.14

Deduct: Imputed Interest

3.407,18

Net Present Value ofFuture Minimum Lease Payments

$ 33.288,96

Note 6: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$287,287.02 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $229,801.94

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $20,651.08

Office ofTreasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $36,834.00

- 19-

BEN HllL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 7: CONTINGENT LIABILITIES

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

The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition of these proceedings is not presently determinable, but is not believed to be material to the general purpose financial statements.

Note 8: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

IRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (IRS), which is a cost-sharing multiple employer defined benefit pension plan. IRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

IRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by IRS are required by State statute to contribute 5% oftheir gross earnings to IRS. The Board makes monthly employer contributions to IRS at rates adopted by the IRS Board ofTrustees 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

1998 1997 1996

100% 100% 100%

$ 1,354,190.93 $ 1,304,473.40 $ 1,232,722.33

Note 9: OTHER FINANCIAL NOTE

The Ben Hill County Board ofEducation established a Minority Teacher Recruitment Program 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 ofup to $3,000.00 per year ($1,000.00 per student). The Board's contributions is in the form ofloans which

- 20-

BEN HILL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 9: OTHER FINANCIAL NOIE

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, 1997

$ 3,500,00

Deductions:

Cancellation - Teaching Service

0,00

Balance June 30, 1998

$ 3.500,00

- 21 -

BEN HILL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1998

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ '472,936,16 $

61,521,99

8,243.44

15,820,62 3,780,76

Total Assets

$

500,780,98 $ _ _,;,61,;,,:,,5;;;;2;.;,1,;,;;,9~9

Total Liabilities and Fund Equity
See notes to the general purpose financial statements, -22 -

$

500,780.98 $ _ _=61;":;,5;,;;2;,,,;,1,;,;;,9~9

EXHIBIT"G"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS
JUNE 30, 1998 JUNE 30, 1997

$

4,787.85 $ 539,246.00 $ 522,636.48

$ 178,215.41

186,458.85

174,873.89

15,820.62 3,780.76

8,277.45 3,122.72

$ 178,215.41 $

4,787.85 $ 745,306.23 $ 708,910.54

$

49,690.64

30,101.35

92,100.34

5,249.89

$ 177,142.22

$

49,690.64 $

661.46

55,179.11

84,491.06

187,653.59

157,864.70

10,041.71

12,571.53

$ 302,565.05 $ 255,588.75

$

1,073.19

$

1,073.19 $

58,409.12

$

4,787.85

4,787.85

4,787.85

15,820.62 3,780.76

8,277.45 3,122.72

0.00

0.00

417,278.76

378,724.65

$

1,073.19 $

4,787.85 $ 442,741.18 $ 453,;321.79

$ 178,215.41 $

4,787.85 $ 745,306.23 $ 708,910.54 -23 -

BEN HILL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND
YEAR ENDED JUNE 30,1998

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

91,870,00 $

885,658,75

321,391,42

$ 1,298,920.17 $

538,630.78 538,630.78

$ $ 1,260,366.06

422,165.26
48,800.55 1,868.34
25,803.09 522.36
17,984,05 22,613.61

$ 1,260,366.06 $

$

38,554.11 $

539,757.26 -1,126.48

$

$

$

38,554.11 $

390,124.82

7,543.17 658.04

1,126,48 1,126.48
0.00 0.00

FUND BALANCE JUNE 30
See notes to the general purpose financial statements.
-24 -

$ 436,880,14 $

....0...0...0..

EXHIBIT"H"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30,1998 JUNE 30,1997

$ $ 1,075,441.82
15,576.50
$ 1,091,018.32 $

0.00 $

630,500.78 $ 1,961,100.57
336,967.92

---.;;.0;.;;..0.;;.0 $. 2,928,569.27 $

635,778.15 2,010,528.48
350,049.86
2,996,356.49

$ 912,327.79 $
47,186.52 66,514.71 56,129.30 27,412.61
445.82 10,995.10 51,967.61
28,869.78
$ 1,201,849.24 $
$ -110,830.92 $

0.00 $
0.00 $ 0.00 $

1,334,493.05 $
95,987.07 68,383.05 81,932.39 27,934.97 18,429.87 33,608.71 51,967.61 1,260,366.06 28,869.78
3,001,972.56 $
-73,403.29 $

1,280,954.95
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
2,851,217.74
145,138.75

$

85,795.56

-32,300.57

$

53,494.99

$

-57,335.93 $

58,409.12

$

86,922.04 $

89.29

-32,300.57

-13,448.64

$

54,621.47 $

-13,359.35

0.00 $ 4,787.85

-18,781.82 $ 453,321.79

131,779.40 319,355.02

7,543.17 658.04

644.00 1,543.37

$

1,073.19 $

4,787.85 $ 442,741.18 $ 453,321.79

-25 -

BEN HILL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30, 1998

EXHIBIT-I-

ASSETS Cash and Cash Equivalents Investments

NONEXPENDABLE TRUST FUND CUMBEEMCCALL FUND

EXPENDABLE TRUST FUND FITZGERALD HIGHSCHOOL
COLLEGE PREPARATORY
FUND

TOTALS

JUNE 30,1998

JUNE 30,1997

$

3.757.28 $

3,757,28 $

9.951.22

$

3.262.68

3.262.68

Total Assets

$

3.262.68 $

3,757.28 $

7,019.96 $ _ _....9~.9~5~1,;::.22;:;.

LIABILITIES AND FUND EQUITY

LIABILITIES

Accounts Payable

FUNPEQUITY

Fund Balances

Reserved

For Endowment Corpus

$

Unreserved

Undesignated

Total Fund Equity

$

$

52.32

2.000.00 1,262.68 $ 3,262.68 $

$ 3.757.28 3,757.28 $

2.000.00 $ 5.019.96' 7,019.96 $

2.000.00 7,898.90 9,898.90

Total Liabilities and Fund Equity

$

3,262,68 $

3,757.28 $

7,019.96 $ _ _....9~,9~5~1,;::.22;:;.

See notes to the general purpose financial statements.

-26-

BEN HILL COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REQUIRED SupPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

At June 30, 1998, the Ben Hill County Board ofEducation had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 Issue.
Assessment Stage - The actual process of identifying all of its systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validationrresting Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As ofJune 30, 1998, the financial accounting system was detennined to be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) are owned by the State (Georgia Department ofEducation). These systems have been detennined to be critical to the Board's ability to successfully conduct operations. As ofJune 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating system was installed at all GENESIS sites as ofDecember 9, 1998. The Georgia Department of Education has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards of education currently utilizing the GENESIS accounting software.

See notes to the general purpose financial statements. - 27-

BEN HILL COUNTY BOARD OF EPUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARPS
YEAR ENDED JUNE 30, 1998

SCHEDULE "2"

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 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1)
Total U. S. Department of Agriculture
Corporation for National and Community service Pass-Through From Georgia Department of Education Leam and Serve America School and Community Based Programs 1997 Grant 1998 Grant
Total Corporation for National and Community Service
Education,U.S.Departmentof Pass-Through From Georgia Department of Education Elementary and Secondary Education Ad. TlUel
Grants to Local Educational Agencies
1998 Grant T1Uell
Eisenhower Professional Development 1997 Grant 1998 Grant
Title VI Innovative Educational Program Strategies 1998 Grant
Goals 2000 State and Local Education Systemic Improvement Grants 1997 Grant 1998 Grant
Individuals with DisabillUes Education Ad. Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant
Safe and Drug-Free Schools 1998 Grant
Vocational Education - Basic Grants to States
High School Program Basic Grant 1998 Grant
Tech-Prep Education 1998 Grant
Total U. S. Department of Education
Health and Human services, U. S, Department Pass-Through From Georgia Department of Human Resources Child Care and Development Block Grant 1997 Contract No. 472-93-71634 High Risk Youth Grant 1998 Contract No. 427-93-81102100
Total U. S. Department of Health and Human Services

CFDA NUMBER
* 10.553 * 10.555
10.550
94,004 94,004
* 84.010 84.281 84.281 84.298 84.276 84.276
84.027 84.173 84.186
84.048 84.243
93.575 93.959

PASSTHROUGH
ENTITY ID
NUMBER
NlA $ NlA NlA
$
NlA NlA $
$
NlA $ NlA NlA NlA NlA NlA
NlA NlA NlA
NlA NlA
$
NlA $ NlA
$

-28-

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

167,410.85
641,On.73 $ 77,170.17
885,658.75 $

(2)
1,183,195.89 (3) 77,170.17
1,260,366.06

$ 9,851.11
9,851,11 $

46.94 8,m.92
8,824.86

721,695.39 $ 20,927.00 22,266,71 16,130.62

721,743.42 (3)
8,800.73 20,927.00
22,266,71
9,457.22 18,501.04 (3)

125,883.01 42,779.00 18,173.00

125,887.71 (3) 42,782.73 (3) 34,418.43 (3)

34,420.86 4,965.64 1,007,241.23 $

34,420.86 4,965.64 1,044,171.49

5,542.95 $ 12,000.00 17,542.95 $

28,923.11 (3) 12,000.00 40,923.11

BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 1998

SCHEDULE *2"

FUNDING AGENCY PROGRAM/GRANT
Justice. U. S. Department of Pass-Through From OfIice of the Govemor Juvenile Justice and Delinquency Prevention
Allocation to States
Project Opportunity 1997 Contract No. 96J-Q6-9604-0013
OTHER FEDERAL ASSISTANCE
Defense, U. S. Department of Direct Department of the Army R.O.T.C. Program 1998 Grant

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

16.540

NlA $

10,127.64 $ _ _....;.1.=.l0,..;.;:12;.;.7.:.;:;.64~

$

30.678.89 $

97.802.14 (3)

Total Federal Financial Assistance
= NJA Not Available

$ 1.961,100.57 $

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 Induded In the 1998 National School Lunch Program.
(3) Expenditures for this program indude State, and/or Other Funds. Expenditures are not maintained by fund source.

Major Programs are identified by an asterisk (*) In front of the CFDA number.

The Board did not provide Federal Assistance to any Subredpient.

The accompanying scheduie of expenditures of Federal awards Indudes the Federal grant activity of the Ben Hill County Board of Education and is presented on the modified aeaual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements.

2,462,215.30

see notes to the general purpose finandal statements.

-29-

BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30.1998

SCHEDULE -3-

AGENCYIFUNDING
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 Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs A1temative Program Apprenticeship Program At-Risk Summer School Program Health Insurance Mentoring Program Preschool Handicapped Program Teachers'Retirement Lottery Programs A1temative School Program Instructional Technology Assistive Technology Classroom Technology
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
OffIce of School Readiness Pre-Kindergarten Program
OffIce of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 7,479,825.00 973,437.00 396,335.00 310,374.00 92,295.00
2,064,264.00
281,947.00 88,477.00
287,104.00 458,284.45
84,443.00 41,068.00 30,424.00 28,842.00 -1,008,008.00 945,187.00
$ 2,000.00
49,700.00 82,675.82 16,804.95 229,801.94
6,000.00 42,813.00 20,651.08

91,870.00
2,066.00 5,509.43 96,225.00

$ 7,479,825.00 973,437.00 396,335.00 310,374.00 92,295.00
2,064,264.00
281,947.00 88,4n.00
287,104.00 458,284.45
84,443.00 41,068.00 30,424.00 28,842.00 -1,008,008.00 945,187.00 91,870.00 2,000.00
49,700.00 82,675.82 16,804.95 229,801.94
6,000.00 42,813.00 20,651.08
2,066.00
5,509.43 96,225.00

36,834.00

$

297,988.62

434,830.35

297,988.62 434,830.35
36,834.00

$ 13,041,579.24 $

630,500.78 $

297,988.62 $ 13,970,068.64

See notes to the general purpose financial statements.

-30-

BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS
YEAR ENDED JUNE 30, 1998

SCHEDULE '4'

EXpENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

TOTAL

$

2,066.00 $

5,509.43 $

97,322,45 $

317,267.38 $ 422,165.26

48,800.55 1,868.34
25,803.09 522.36
17,984.05 22,613.61

48,800.55 1,868.34
25,803.09 522.36
17,984.05 22,613.61

Total Expenditures

$

2,066,00 $

5,509.43 $

97,322.45 $

434,859.38 $ 539,757.26

RECAP: Salaries and Benefits Pre-Kindergarten Program CHherExpenditures Alternative School Program Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program

$ 396,508.44
2,066.00
5,509.43 97,322.45 38,350.94

$ 539,757.26

see notes to the general purpose financial statements.

31

BEN HILL COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1998

SCHEDULE "5"

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

$

9,201,039,00 $ _ _-,2=5;.;;8=,9;.;:;.3..:..;7,,,,-00,,-

$

9,500,709.35

444,482.57 $ _ _--=.;38:;.;;9;,:,::,8;=2~':7.:;,03=.,.

$

9,945,191.92 .

-20,747,79 $ _ _.:.9.1.=:,9.:.24.:.1.,4.:..4:.;.4.:.:,1.;.3

$

0.00 $ ====_==-===0=,0=0

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. 1998

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

694,704.60 $ 1,016.967.19 $

14.813.73 $ 1.031.780.92

1,871.505.00

1.515.934.98

47.072.61

1.563.007.59

$ 2,566.209.60 $ 2.532,902.17 $

61.886.34 $ 2.594,788.51 $

0.00

815,9n.80

855,327.17

25,856.95

881.184.12

0.00

1,537.455.60

1,814.521.n

97,780.58

1.912.302.35

0.00

781.394.40

846,766.31

63.042.96

909.809.27

0.00

607,426.30

1,092.704.53

22.749.80

1,115.454.33

0.00

464.446.80

505.074.43

49.703.60

554,n8.03

0.00

$ 6,n2.910.50 $ 7.647,296.38 $

321,020.23 $ 7,968,316.61

$

740,223.00

$

382.807.06 $ 5n,917.27 n.407.76

26.680.45 $ 21,323.38 19,715.47

409,487.51 599.240.65 97.123.23

$

740,223.00 $ 1,038.132.09 $

67,719.30 $ 1,105,851.39

0.00

135.870.30

135.726.80

1,087.50

136,814.30

0.00

$

876,093.30 $ 1.173.858.89 $

68.806.80 $ 1.242,665.69

$

356,701.50 $

403,087.83 $

0.00 $

403,087.83

0.00

$ 8.005.705.30 $ 9.224,243.10 $

389,827.03 $ 9,614,070.13

$

228,040.20 $

276,466.25

S

276.466.25

0.00

51.296.40

$

54.655.54

54.655.54

0.00

$

279.336.60 S

276.466.25 $

54.655.54 S

331,121.79

$ 8,285,041.90 S 9.500.709.35 $

444,482.57 $ 9.945.191.92 $

0.00

$

26.792.00

65,503.00

$ _.....9iO2Oii.12ii.i.,95iiij..00.

$

57.523.48 $

57,523.48

35,754.46

35.754.46

$

93.2n.94 $

93,2n.94 $

..;00..0..

- 35

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 30, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Ben Hill County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofBen Hill County Board ofEducation as ofand for the year ended June 30, 1998, and have issued our report thereon dated July 30, 1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditini 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 ofmaterial misstatement, we perfonned tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the detennination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditini Standards.
Internal Control Over Financial &mortini
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
98YB-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 financial 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-6091-98-01, FS-6091-98-03 and FS-6091-98-05.
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 financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, all ofthe reportable conditions noted above, are also considered to be material weaknesses.
This report is intended solely for the information and use of management, members of the Ben Hill County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
r~w.4~
Russell W. Hinton State Auditor
RWH:jb 98YB-40

RUSSELL W. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
July 30, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Ben Hill County Board of Education
REPORT ON COMPLIANCE WITH REQIDREMENTS APPLICABLE TO EACH MNOR PROGRAM AND INTERNAL CONTROL QYERCOMPLIANCE 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 U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. 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 oflaws, regulations, contracts and grants applicable to each ofits major Federal programs is the responsibility ofBen Hill County Board ofEducation'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 Auditjnl: Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types 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.

98SA-65

As described in item FA-6091-98-01 in the accompanying Schedule of Findings and Questioned Costs, Ben Hill County Board ofEducation did not comply with requirements regarding Equipment and Real Property Management that are applicable to its Elementary and Secondary Act - Title I - Grants to Local Educational Agencies Program. Compliance with such requirements is necessary, in our opinion, for Ben Hill County Board of Education to comply with requirements applicable to that 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, 1998.
Internal Control Oyer 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 ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation 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-6091-98-01.
A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition noted above is also considered to be material weakness.
98SA-65

This report is intended solely for the infonnation and use of management, members of the Ben Hill County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~~.~ Russell W. Hinton State Auditor
RWH:jb 98SA-65

SECTIONID AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

BEN HILL COUNTY BOARD OF EDUCATION
AUDITEE'S RESPONSE
SUMMARy SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6091-93-01 6091-93-02 FS-6091-97-01 FS-6091-97-02 FS-6091-97-03

Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective Action Responses Unresolved - See Corrective Action Responses Unresolved - See Corrective Action Responses

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUNALENTS Inadequate Separation ofDuties Finding Control Number: FS-6091-97-01

During fiscal year 1999, 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 each to the Revenue Clerk, who in tum makes a deposit ticket. The Financial Officer takes the deposit to the bank. At the end of each month the Mail Clerk balances the 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. The Financial Officer will review the checks before distributing. Superintendent's Secretary or Revenue Clerk will put check in envelope and mail. Bank Reconciliation is to be reviewed each month by the Financial Officer.

EMPLOYEE COMPENSATION Salary Overpayment Finding Control Number: FS-6091-97-02

The Board has sought reimbursement from the employee for the overpayment. Even though a letter of request, phone call and personal conference was used, the Board has been unsuccessful in recovering this overpayment.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6091-97-03

Due to current staffing limitations and budgetary consideration prohibiting the hiring of additional staff, the Board has decided not to pursue the recording or-General Fixed Assets on the financial statements.

- 1-

BEN HILL COUNTY BOARD OF EDUCATION
AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6091-97-01

Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Finding Control Number: FA-6097-97-01

A fall inventory and spring inventory were completed. A cross-reference inventory was also done by the Technology Coordinator. While some issues have been resolved, we need to address teachers moving computer hardware without the knowledge ofPrincipal/Iitle I Coordinator. A continuous effort will be made to insure that administration and instructional staffunderstand the necessity for more internal control of where inventory is housed and how it is moved. A fall inventory and another spring inventory will be done to further resolve this issue. All but one computer ofthe random sample was found, while several computers were not in the room indicated. Effort will continually be made to resolve this issue.

-2-

SECTION IV FINDINGS AND QUESTIONED COSTS

BEN HILL COUNTy BOARD OF EDUCATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Re.port Issued on the Financial Statements The auditor's opinion on the Ben Hill County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

2. Re.portable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Ben Hill County Board of Education disclosed financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents General Ledger

ExpenditureslLiabilities/Disbursements 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 ofEducation disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Re.portable Conditions in Internal Control Over Major Pro~ams
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 requirements.

Equipment and Real Property Management

The reportable condition described above is considered to be a material weakness.

5. Iype ofRe.port Issued on Compliance for Mmor Promms 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 Findin~s ReQuired to be ~ortedby Section .510(a) ofOMB Circular A-133 The Ben Hill County Board of Education's audit disclosed audit findings required to be reported by section .51O(a) ofOMB Circular A-133. These audit findings are included in section N of this report.

7. MmorPro~s 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 30.1998
I SUMMARy OF AUDITOR'S RESULTS
9. Low Risk Auditee
The Ben Hill County Board ofEducation 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 EQUNALENTS EXPENDITURESILIABILITIESIDISBURSEMENTS Inadequate Separation ofDuties Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6091-98-01
The Board did not provide for adequate separation of employee duties in the performance ofthe following accounting functions and procedures related to cash and cash equivalents and expenditures/liabilities/ disbursements.
Processing payments and review ofprocessed payments was not separated from recording payments on the accounting records.
Check signing was not separated from the processing ofpayments.
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.
CASH AND CASH EQUNALENTS Failure to Ensure Proper Collateralization ofDeposits Nonmaterial Noncompliance Finding Control Number: FS-6091-98-02
The Ben Hill County Board ofEducation failed to have its bank balances fully collateralized as provided for by the Official Code of Georgia Annotated Section 45-8-12 which states, in part, as follows:
"The collecting officer or officer holding public funds may not have on deposit at anyone time in any depository for a time longer than ten days a sum of money belonging to the public body when such depository has not given bond to the public body as set forth in this code section. The aggregate of the face value ofsuch surety bond and the market value of securities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance."
. -2-

BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS Failure to Ensure Proper Collateralization ofDeposits Nonmaterial Noncompliance Finding Control Number: FS-6091-98-02
This noncompliance occurred because of management's failure to adequately monitor the collateralization of balances at an individual bank. The Board should implement adequate procedures to monitor the collateralization ofbank balances to ensure compliance at all times with State Laws governing deposits and investments.
GENERAL LEDGER Inadequate Documentation of Journal Entries Reportable Condition - Material Weakness Finding Control Number: FS-6091-98-03
An examination of forty ofthe Board's journal entries was performed to test the validity and accuracy of the journal entries. The examination revealed that eight of the journal entries tested did not provide adequate supporting documentation. In addition, sixteen journal entries tested were not reviewed and approved by an administrative official. Procedures should be implemented to ensure that all journal entries are supported by adequate documentation and approved.
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Maintain Proper Lottery Equipment Inventory Nonmaterial Noncompliance Finding Control Number: FS-6091-98-04
The Ben Hill County Board of Education failed to maintain an accurate inventory of lottery equipment by location. Of the 14 items purchased during the year and selected for testing, 4 items could not be located. 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.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6091~98-05
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
-3-

BEN HILL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QlJESTIONED COSTS
YEAR ENDED JUNE 30. 1998
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6091-98-05
accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement costs, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Reportable Condition - Material Weakness Material Noncompliance U. S. Department ofEducation Through Georgia Department ofEducation Repeated From Prior Year Finding Control Number: FA-6091-98-01
Property management records maintained by the Board for the Elementary and Secondary Education Act Title I - Grants to Local Education Agencies (CFDA 84.010) were incomplete and failed to meet property standards as set forth Chapter 41 of the Financial ManaGement for Geot:cia Local Units of Administration (fMGLUA). The inventory records maintained by the Board and presented for examination did not contain accurate location data and disposition information, when applicable.
This condition resulted from Management's failure to ensure equipment records were maintained as required by Chapter 41 ofFMGLUA. Perpetual inventory records should include information iden~fying the physical location of equipment aswell 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 ofthe Board's inventory records.
-4-