Berrien County Board of Education, Nashville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002 [June 30, 2002]

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STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS

I
BERRIEN COUNTY BOARD OF EDUCATION
NASHVILLE, GEORGIA
REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2002
RECEIVED
JUL 1 0 2003 DOCUMENTS
UGA LIBRARIES
Russell W. Hinton State Auditor

BERRIEN COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS- OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES -BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

33

ALLOTMENTS AND EXPENDITURES

GENERAL FUND- QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

34

5

BY SITE

35

BERRIEN COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS -
SECTION IT COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
April 15,2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Berrien County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general-purpose financial statements of the Berrien County Board of Education, as of and for the year ended June 30, 2002, as listed in the table of contents. These general-purpose financial statements are the responsibility of the Berrien 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 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform 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 opm10n.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

2002ARL-13

* The general-purpose financial statements ofthe Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board of Education did not recognize as expenditures, in the year ended
June 30, 2002, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2002. Also funds received, subsequent to June 30, 2002, 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, 2001, were improperly recorded in the year ended June 30, 2002. 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 Berrien County Board of Education as ofJune 30, 2002, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated April15, 2003, on our consideration ofthe Berrien County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Berrien County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing
2002ARL-13

procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a permanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,

RWH:as 2002ARL-13

State Auditor

BERRIEN COUNTY BOARD OF EDUCATION

BERRIEN COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 2002

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Bond Debt

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$ 1,567,770.79 $

449,401.77 $

93,053.62

1 ,289,365.76

132,188.89

238,885.49

205,938.03

24,987.20 12,047.06

Total Assets

$ 1,699,959.68 $

725,321.52 $ ==1:;,5=8=8=3=57==41=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Deferred Revenue General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

8,312.78 $

93,645.47 $

6,823.00

212,227.14

2,533.53

29,920.72

16,682.58

$

17 669.31 $

352,475.91 $

4,020.12 4 020.12

$

56,150.00

$
1,626,140.37 $ 1,682,290.37 $

24,987.20 12,047.06
$
335,811.35 372,845.61 $

1,048,174.12 492,939.66 43,223.51
0.00
1,584,337.29

Total Liabilities and Fund Equity

$ 1,699,959.68 $

725,321.52 $ ==1;,5=8=8~,3=57=.4=1=

The notes to the general-purpose financial statements are an integral part of this statement. -2-

EXHIBIT"A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30, 2001

$

0.00

$ 2,110,226.18 $ 2,049,384.96

1,289,365.76

1,488,218.80

577,012.41

608,966.45

24,987.20 12,047.06

- - - - - - $ _ _...:.7.1.-:,5:..:.7-"'0'"'-00=..:0:..:..0::..:0:....

7,570,000.00

25,066.42 11,343.71

$

0.00 $

7,570,000.00 $ 11,583,638.61 $ 12,812,980.34

$

105,978.37 $

262,752.84

219,050.14

221,596.70

32,454.25

48,715.69

65,740.90

16,682.58

152,563.02

$

7,570,000.00

7,570,000.00

8,630,000.00

$

7,570,000.00 $ 7,944,165.34 $ 9,381,369.15

$

0.00

$

0.00

$

56,150.00 $

6,567.00

24,987.20 12,047.06 1,048,174.12 492,939.66 43,223.51

25,066.42 11,343.71 1,146,310.32 612,959.09 64,255.48

1,961,951.72

1,565,109.17

$ 3,639,473.27 $ 3,431,611.19

$

0.00 $

7,570,000.00 $ 11,583,638.61 $ 12,812,980.34

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BERRIEN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30. 2002

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation Enterprise Operations
Capital Outlay Debt Service
Principal Interest Paying Agent 'Fees
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

GENERAL FUND

SPECIAL REVENUE
FUND

$ 13,578,373.28 $
2,647,076.64 317 780.46
$ 16,543,230.38 $

549,711.90 3,339,355.15
355,572.27
4,244,639.32

$ 11 '1 01 ,640.25 $
449,215.90 442,322.39 362,748.68 379,343.20 969,587.44 128,048.99 1,325,578. 74 805,571.54 115,719.82
28,331.28
2,066.02

1,641 '168.91
371,789.05 57,576.45 1,872.95
118,124.13 2,833.15
9,624.73 8,927.92
692,486.84 1,320,827.73
6,038.04

$ 16,110,174.25 $

$

433 056.13 $

4,231,269.90 13 369.42

$

6,258.41

$

-6 258.41

$

6,258.41 $

-6 258.41

$

439,314.54 $

1,242,975.83

7,111.01 365,110.47

-79.22 703.35

FUND BALANCE JUNE 30

$

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

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1,682,290.37 $ =====3=7=2=,8=45=.6==1~

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

12,841.88

$ 14,140,927.06 $ 14,365,554.93

3,339,355.15

4,151,293.57

$ 1,295,361.48

3,942,438.12

3,842,911.68

34,395.65

707 748.38

712,099.54

$

47 237.53 $ 1,295,361.48 $ 22,130,468.71 $ 23,071,859.72

$ 12,742,809.16 $ 12,465,937.33

$

151,771.61

821,004.95 499,898.84 364,621.63 497,467.33 972,420.59 128,048.99 1,335,203.47 814,499.46 115,719.82 720,818.12 1,320,827.73
8,104.06 151,771.61

852,221.84 648,408.46 334,463.02 559,961.54 1,047,788.16 106,506.18 1,118,271.13 895,892.86 123,897.16 678,362.62 1,187,221.38
10,012.10 4,344,974.53

$ 1,060,000.00 367,630.00 2,385.00

1 ,060,000.00 367,630.00 2 385.00

1 ,022,877.32 408,339.23 795.00

$

151 771.61 $ 1,430,015.00 $ 21,923,230.76 $ 25,805,929.86

$

-104 534.08 $

-134,653.52 $

207,237.95 $ -2,734,070.14

$

$

-134,653.52

$

-134,653.52 $

134,653.52 $ 134,653.52 $

140,911.93 $ -140 911.93
0.00 $

179,473.42 -179 473.42
0.00

$

-239,187.60 $

1 ,823,524.89

0.00 $ 0.00

207,237.95 $ -2,734,070.14

3,431,611.19

6,171,717.03

-79.22 703.35

-6,641.99 606.29

$ 1,584,337.29 $

0.00 $ 3,639,473.27 $ 3431611.19

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BERRIEN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS\ GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2002

EXHIBIT"C"

GENERAL FUND

BUDGET

ACTUAL

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 13,036,176.00 $ 13,578,373.28

2,667,047.26 94 049.00

2,647,076.64 317 780.46

Total Revenues

$ 15,797,272.26 $ 16,543,230.38

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 Enterprise Operations
Capital Outlay

$ 11,104,584.30 $ 11,101,640.25

394,136.77 468,163.65 369,647.97 367,904.01 1,017,616.87 128,381.92 1,395,207.91 797,544.62 132,358.55
13,000.00

449,215.90 442,322.39 362,748.68 379,343.20 969,587.44 128,048.99 1,325,578.74 805,571.54 115,719.82
28,331.28

2,500.00 200,000.00

2,066.02

Total Expenditures

$ 16 391 046.57 $ 16 110174.25

Excess of Revenues over (under) Expenditures

$ -593 774.31 $ 433 056.13

OTHER FINANCING SQURCES {USES}

Other Sources Other Uses

$

6,258.41

Total Other Financing Sources (Uses)

$

6 258.41

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $

-593,774.31 $

439,314.54

FUND BALANCE JULY 1, 2001

1,198,989.46

1,242,975.83

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

-1,743.99

FUND BALANCE JUNE 30 2002

$ 603471.16 $ 1,682,290.37

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 563,864.40 $ 549,711.90

2,506,543.00

3,339,355.15

327,000.00

355,572.27

$ 3,397,407.40 $ 4,244,639.32

$ 1,598,963.04 $ 1,641,168.91

414,585.36 40,671.00
49,693.00

371,789.05 57,576.45 1,872.95
118,124.13 2,833.15

4,000.00 7,975.00

9,624.73 8,927.92

5,400.00 1,269,895.83

692,486.84 1,320,827. 73
6,038.04

$ 3,391,183.23 $ 4,231,269.90

$

6 224.17 $

13 369.42

$

-6 258.41

$

-6 258.41

$

6,224.17 $

7,111.01

359,192.34

365,110.47

-657.38

-79.22 703.35

$ 364 759.13 $ 372 845.61

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

BERRIEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Berrien County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES -are used to account for all or most ofthe School District's educational activities. Governmental Fund Types include:
GENERAL FUND- the fund used to account for all financial resources ofthe School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

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BERRIEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND -the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND -the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental 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 of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

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BERRIEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 2002, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2001 and ending in early June 2002. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2001 and ending in August 2002. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2002, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2002, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2002. Also, the State's portion ofthe compensation paid in July and August 2002 was received and recorded as revenue in the fiscal year subsequent to June 30, 2002. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2001, were recorded in the year ended June 30, 2002. 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.
BUDGET
The Berrien County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

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BERRIEN COUNTY BOARD OF EDUCATION

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the School District to invest its funds and in selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.

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BERRIEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

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 Berrien County Board of Commissioners fixed the property tax levy for the 2001 tax digest year (calendar year) on October 11, 2001 (levy date). Taxes were due on January 20, 2002 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2001 tax digest are reported as revenue in fiscal year 2002. The Berrien County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2002 for maintenance and operations amounted to $2,635,213.31.

The tax millage rate levied for the 2001 tax year (calendar year) for the Berrien County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

11.00 mills

SALES TAXES

Special Purpose Local Option Sales Tax revenue during the year amounted to $1,295,361.48 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.

- 11 -

BERRIEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures 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 or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of any one of or any combination of the following:

- 12-

BERRIEN COUNTY BOARD OF EDUCATION

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 2002, the bank balances were $4,192,381.85. The amounts ofthe total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)
The School District's deposits are classified by risk category at June 30, 2002, as follows:

- 13-

BERRIEN COUNTY BOARD OF EDUCATION

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2: DEPOSITS AND INVESTMENTS

Risk Category

Bank Balance

1

$ 413,148.28

2

2,775,490.47

3

1,003,743.10

Total

$ 4.192.381.85

CATEGORIZATION OF INVESTMENTS At June 30, 2002, the carrying value ofthe School District's total investments was $1,289,365.76 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (Primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and values participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value ofthe shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U.S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2002, was 0.12 years. The average investment duration for Fund 6 on June 30, 2002, was 0.75 years.

- 14-

BERRIEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30,2002

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; acts of God and unemployment compensation.

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

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

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for 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:

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

2001 2002

$

1 942.49 $

2,352.00 $

4 294.49 $

0.00

$

0.00 $

0.00 $

0.00 $

0.00

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

Position Covered

Amount

Superintendent All Employees (Per Loss)

$ 20,000.00 $ 5,000.00

- 15-

BERRIEN COUNTY BOARD OF EDUCATION

EXHffiiT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5: OPERATING LEASES

Berrien County Board of Education has entered into various leases as lessee for copiers. These leases are considered for accounting purposes to be operating leases. Lease expenditures for the year ended June 30,2002, amounted to $93,466.26. Future minimum lease payments for these leases are as follows:

Year Ending

Amount

2003 2004 2005

$ 89,976.00 83,415.00 937.00

Total

$ 174.328.00

Note 6: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1998

4.0%-4.4% $ 7.570.000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2002, were as follows:

General Obligation
Bonds

Balance July 1, 2001

$ 8,630,000.00

Deductions Debt Retired

1,060,000.00

Balance June 30,2002

$ 7.570.000.00

At June 30, 2002, payments due by fiscal year which includes principal and interest for these items are as follows:

- 16-

BERRIEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 6: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

General Obligation
Bonds

2003 2004 2005 2006 2007 2008-2012

$ 1,434,170.00 1,443,105.00 1,454,175.00 1,467,112.50 1,476,642.50 1,487, 700.00

Total Principal and Interest

$ 8.762.905.00

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $261,772.04 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of $224,090.49

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $5,658.55

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$32,023.00

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 School District believes that such disallowances, if any, will be immaterial to its overall financial position.

- 17-

BERRIEN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 8: CONTINGENT LIABILITIES
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.
Note 9: SUBSEQUENT EVENTS
On September 19, 2001, the voters of Berrien County voted in favor of a Special Purpose Local Option Sales Tax referendum for educational purposes. The imposition of the tax approved, as stated in part on the Official Ballot of Berrien County, is as follows:
"Shall a one percent sales and use tax for educational purposes ofthe Berrien County School District (the "School District") be reimposed within Berrien County for a maximum period of time of20 calendar quarters, for the purposes ofproviding funds to pay (1) the cost ofretiring a portion ofthe School District's General Obligation Bonds, Series 1998, by paying or making provision for the payment ofthe principal ofand interest on such bonds coming due on August 1, 2003 through February 1, 2008, in the maximum amount of $7,400,000 and (2) the cost of adding to, renovating, repairing, improving, and equipping existing school buildings and other buildings and facilities useful or desirable in connection therewith, and acquiring necessary property therefor, both real and personal, for the School District, all at a maximum cost of $800,000?"
Note 10: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 18-

BERRIEN COUNTY BOARD OF EDUCATION

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 10: RETIREMENT PLANS
Fiscal Year
2002 2001 2000

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,068,060.75 $ 1,261,418.36 $ 1,180,179.40

- 19-

BERRIEN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2002

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

399,220.11 $

44,223B2

24,618.25

24,987.20 12,047.06

Total Assets

$

460,872.62 $ ==,.;4:.;,4!,;:,2=23;;,:;.8;;;;;2=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity

$

32,318.21 $

7,444.13

55,708.80

32,592.58

4,187.11

$

88,027.01 $

44,223.82

$

24,987.20

12,047.06

335,811.35 $

0.00

$

372,845.61 $

0.00

Total Liabilities and Fund Equity

$

460,872.62 $ ===4=4==,2~2;;;:3,;;;;82;:,

See notes to the general-purpose financial statements. -20-

EXHIBIT"E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

JUNE 30, 2002

JUNE 30, 2001

$

25,127.84

$

468,571.77 $

564,604.51

195,097.24 $

19,170.00

238,885.49

250,416.66

24,987.20 12,047.06

25,066.42 11 343.71

$

220,225.08 $

19170.00 $

744,491.52 $ ==8=5=1=,4=31=.3=0=

$

$

53,883.13

123,925.76

25,733.61

16,682.58

$

220,225.08 $

19,170.00 $ 19 170.00 $

19,170.00 $ 93,645.47 212,227.14 29,920.72 16,682.58
371 645.91 $

24,934.00 68,758.28 202,164.63 37,900.90 152,563.02
486,320.83

$

24,987.20 $

25,066.42

12,047.06

11,343.71

$

0.00 $ _ _ _ _0.;;;.;..;;;..00~

335,811.35

328,700.34

$

0.00 $

0.00 $

372,845.61 $ _ ____.:3~6;.::::.5L-:.1.:.:01::..:..4.:...:.7_

$

220,225.08 $

19,170.00 $

744,491.52 $ =====8=5=1,6;,4=3=1-=30==

- 21 -

BERRIEN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30. 2002

REVENUES
State Funds Federal Funds other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Enterprise 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

$

91,080.00 $

885,334.79

355,572.27

$ 1,331,987.06 $

370,131.90 370,131.90

$

342,852.49

$

2,688.95

25,085.56 583.26

1,316,149.06 6,038.04

$ 1,324,876.05 $

$

7,111.01 $

1,610.59
370,131.90 0.00

$

7,111.D1 $

365,110.47

-79.22 703.35

0.00 0.00

FUND BALANCE JUNE 30

$

372,845.61 $ =====0~.0;.;0;..

See notes to the general-purpose financial statements.

-22-

EXHIBIT"F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$ $ 2,439,020.36
$ 2,439,020.36 $

88,500.00 $ 15,000.00
103,500.00 $

549,711.90 $ 3,339,355.15
355,572.27
4,244,639.32 $

520,177.74 3,685,302.07
337,505.54
4,542,985.35

$ 1,298,316.42
240,514.54 $ 56,993.19 1,872.95 118,124.13 2,833.15
9,624.73 7,317.33 692,486.84 4,678.67

$ 2.432,761.95 $

$

6 258.41 $

$ 103,500.00
103,500.00 $ 0.00 $

1,641,168.91 $
371,789.05 57,576.45 1,872.95 118,124.13 2,833.15
9,624.73 8,927.92 692,486.84 1,320,827.73 6 038.04
4,231,269.90 $
13,369.42 $

1 ,633,046.83
500,861.04 245,421.86
688.98 219,469.13
7,146.97 1,329.07 22,501.82 6,514.99 663,939.74 1,187,221.38 9,430.95
4,497,572.76
45,412.59

$

-6,258.41

$

-6,258.41

$

0.00 $

0.00

$

6,258.41

$

-6,258.41

-6,101.27

$

-6,258.41 $

157.14

0.00 $ 0.00

7,111.01 $ 365,110.47

45,569.73 325,576.44

-79.22 703.35

-6,641.99 606.29

$

0.00 $

0.00 $

372,845.61 $ ===36=5=:.,1,;.1;,;;0=.4=7=

-23-

BERRIEN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 2002

ASSETS Cash and Cash Equivalents Investments Accounts Receivable

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

329,763.41 $

0.00

719,101.95

Total Assets

$ 1,048,865.36 $ ====0==00==

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Expired Grant Balance Payable Contracts Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

691.24

$

691.24

$ 1,048,174.12
0.00 $ $ 1,048,174.12 $

0.00 0.00

Total Liabilities and Fund Equity

$ 1,048,865.36 $ =====0=.0=0=

See notes to the general-purpose financial statements. -24-

EXHIBIT"G"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

$

$

570,263.81

205,938.03

LOTTERY PROJECT

TOTALS

JUNE 30, 2002

JUNE 30, 2001

46,552.39 $

376,315.80 $

405,078.92

1,289,365.76

1 ,488,218.80

205,938.03

227,731.05

$

776,201.84 $

46,552.39 $ 1,871,619.59 $ 2,121,028.77

$

283,262.18

$

$

283,262.18 $

$ 3,328.88
3,328.88 $

283,262.18 $ 4,020.12
287,282.30 $

224,835.37 3,037.86 3,889.75
65 740.90
297,503.88

$

492,939.66

$

0.00

$

492,939.66 $

$ 43,223.51
0.00 43,223.51 $

1,048,174.12 $ 492,939.66 43,223.51
0.00
1,584,337.29 $

1 z 146,310.32 612,959.09 64,255.48
0.00
1,823,524.89

$

776,201.84 $

46,552.39 $ 1,871,619.59 $ 2,121,028.77

-25-

BERRIEN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 2002

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Capital Outlay Land and Land Improvements Building and Building Improvements Equipment
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

$

12,841.88

$

19 761.56

$

19761.56 $

12 841.88

$

40.463.60

77,279.60 $

154.56

$

117 897.76 $

$

-98,136.20 $

15,209.70
15,209.70 -2,367.82

$

$

$

-98,136.20 $

111461310.32

2,367.82 2,367.82
0.00 0.00

FUND BALANCE JUNE 30

$ 11048,174.12 $===~0~.0~0~

See notes to the general-purpose financial statements. -26-

EXHIBIT"H"

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30, 2002

JUNE 30, 2001

$

$

14 634.09

0.00 $

12,841.88 $ 34,395.65

862,681.25 462,500.00 174 450.64

$

14 634.09 $ _ _ ____::0:..:.0=0c..,. $

47,237.53 $ 1,499,631.89

$

40,463.60 $

114,737.52

$

18,664.15

111,153.45

3,459,847.33

$

0.00

154.56

626,110.25

$

0.00 $

18,664.15 $

151 771.61 $ 4,200,695.10

$

14 634.09 $

-18,664.15 $

-104,534.08 $ -2,701,063.21

$

-134,653.52 $

$

-134,653.52 $

$ -2,367.82
-2,367.82 $

2,367.82 $ -137,021.34
-134,653.52 $

130,000.00 -49,316.28
80,683.72

$

-120,019.43 $

612,959.09

-21,031.97 $ 64,255.48

-239,187.60 $ -2,620,379.49

1,823,524.89

4,443,904.38

$

492,939.66 $

43,223.51 $ 1,584,337.29 $ 1,823,524.89

-27-

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U.S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program Pass-Through From Office of School Readiness Summer Food Service Program for Children
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1}
Total U. S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building and Improvement Grant Flow Through Preschool
Total Special Education Cluster
Other Programs Direct Elementary and Secondary Education Act Title X 21st-Century Community Learning Centers Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Migrant Education Title II Eisenhower Professional Development Title Ill Technology Literacy Challenge Fund Grants Title VI Innovative Education Program Strategies Class Size Reduction Goals 2000 State and Local Education Systemic Improvement Grants Safe and Drug-Free Schools and Communities Stewart B. McKinney Homeless Assistance Act Education for Homeless Children and Youth

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.553 10.555
10.559

N/A

$ 214,757.77

(2)

N/A

578,022.67 $

1,247,118.96 (3)

N/A

17,486.21

2,688.95

$ 810,266.65 $

1,249,807.91

10.550

N/A

75,068.14

75,068.14

$ 885,334.79 $

1,324,876.05

84.027 84.027 84.173

N/A

$

7,942.52 $

N/A

265,053.04

N/A

51,365.93

$ 324,361.49 $

7,942.52 265,053.04
51,365.93
324,361.49

84.287

84.010

N/A

84.011

N/A

84.281

N/A

84.318

N/A

84.298

N/A

84.340

N/A

84.276

N/A

84.186

N/A

84.196

N/A

143,624.06
740,982.19 814,028.88
4,076.33 121,267.50
21,611.00 108,512.00
11,960.36 33,232.00 10,026.00

142,795.73
740,982.19 814,028.88 (4)
4,076.33 121,267.50
21,611.00 108,512.00
11,960.36 33,232.00 10,026.00

-28-

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U. S. Department of Other Programs Pass-Through From Georgia Department of Education Vocational Education - Basic Grants to States High School Program Basic Grant
Total U. S. Department of Education
Health and Human Services, U. S. Department of Pass-Through From Georgia Department of Human Resources Block Grants for Prevention and Treatment of Substance Abuse Grant-in-Aid
Justice, U. S. Department of Pass-Through From Georgia Children and Youth Coordinating Council Juvenile Accountability Incentive Block Grant
Labor, U. S. Department of Pass-Through From South Georgia Regional Educational Service Agency Workplace Investment Act Youth Program

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.048

N/A

$ 43,266.32 $

43,266.32

$ 2,376,948.13 $

2,376,119.80

93.959

NIA

$ 15,000.00 $

15,000.00

16.523

N/A

$ 35,516.23 $

35,516.23

17.259

N/A

$ 26,556.00 $

21,125.92

Total Federal Financial Assistance

$ 3,339,355.15 $ ==3,:.;.7.;,;:72;;1,,6;;;;3;;;;8=.0==0

N/A = Not Available

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 2002 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Includes Federal Assistance of $689,628.73 provided to subrecipients.

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

The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Berrien County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements.

See notes to the general-purpose financial statements.

-29-

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

AGENCY/FUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS Communities in School of Georgia Communities in School Program

$

58,050.31

$

58,050.31

Community Health, Georgia Department of School Health Matching Grant Initiative

15,549.95

15,549.95

Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades- Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades (4-5) Early Intervention Middle School (6-8) Program High School Grades (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program Media Center Program Staff and Professional Development 20 Days Additional Instruction Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Other State Programs After-School Program (4-8) Health Insurance K-3 Statewide Reading Program Post Secondary Options Preschool Handicapped Program Teachers' Retirement Lottery Programs Assistive Technology Computers in the Classroom

497,177.00 249,258.00 1,337,759.00 637,142.00 848,041.00 282,612.00 1,846,721 .00 1,188,258.00 567,110.00
6,169.00 391,561.00 481,520.00
62,411.00 29,629.00 213,362.00 229,571.00 129,906.00 280,383.00 52,419.00 87,292.00 1,745,891.00

539,127.00 149,637.00
20,000.00 74,229.00 12,245.00 22,574.00 80,715.00 945,300.00
$ 114,323.44

91,080.00

32,179.80 224,090.49
35,566.70 1,287.00
51,625.04 5,658.55

7,527.00 76,275.00

497,177.00 249,258.00 1 ,337,759.00 637,142.00 848,041.00 282,612.00 1,846,721.00 1 '188,258.00 567,110.00
6,169.00 391,561.00 481,520.00
62,411.00 29,629.00 213,362.00 229,571.00 129,906.00 280,383.00 52,419.00 87,292.00 1,745,891.00
539,127.00 149,637.00
20,000.00 74,229.00 12,245.00 22,574.00 80,715.00 945,300.00 91,080.00 114,323.44
32,179.80 224,090.49
35,566.70 1,287.00
51,625.04 5,658.55
7,527.00 76,275.00

Georgia State Financing and Investment Commission Reimbursement on Construction Projects

$ 12,841.88

12,841.88

Human Resources, Georgia Department of Family Connection

-30-

88,500.00

88,500.00

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2002

SCHEDULE "2"

AGENCYIFUNDING
GRANTS 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

$ 286,329.90 $ _ __:3::::2:!..:,0~23::.,:.=.;00:;_

$

286,329.90

32,023.00

$ 13,578,373.28 $ 549,711.90 $ 12,841.88 $ 14,140,927.06

See notes to the general-purpose financial statements.

-31 -

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2002

SCHEDULE "3"

PROJECT
Acquire, constructing, and equipping one new high school facility; adding to, renovating, repairing, improving and equipping existing school buildings and other buildings and facilities useful or desirable in connection therewith; acquiring any necessary property therefore, both real and personal; and to pay expenses incidental to accomplish the foregoing

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

$ 11,345,000.00 $ 13,714,210.48 $ 487,912.76 $ 13,226,297.72

PROJECT STATUS
Ongoing

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The School District's current estimate of total cost for the project. Includes all cost from project inception to completion.
(3) The voters of Berrien County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general-purpose financial statements.

-33-

BERRIEN COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30. 2002

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category Ill

Category IV

CategoryV

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

549,463.00 $ 275,472.00 1,478,447.00 704,148.00 937,227.00

741,157.55 $ 124,641.26 1,676,991.81 446,085.76 980,897.74

312,333.00 2,040,934.00 1,313,223.00
626,751.00 1 ,073,436.00
235,799.00 253,714.00 143,568.00

138,934.18 1 ,979,609.71 1 ,440,255.96
560,069.81
0.66 427,510.71 530,820.48
61,459.54 14,081.16 218,267.77 306,877.39 200,841.10

20,366.31 $ 841.93
50,498.83 9,570.58
33,085.86

761,523.86 125,483.19 1,727,490.64 455,656.34 1 ,013,983.60

2,409.72 64,588.70 67,336.86 72,307.81

141,343.90 2,044,198.41 1,507,592.82
632,377.62

4,298.28 4,503.39 6,771.35 2,750.00 1,793.00 4,443.67 3,737.66 2,831.74

4,298.94 432,014.10 537,591.83
64,209.54 15,874.16 222,711.44 310,615.05 203,672.84

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

9,944,515.00 $ 9,848,502.59 $ 352,135.69 $ 10,200,638.28

Media Center Program Staff and Professional Development

309,869.00 57,933.00

292,065.44 11,516.46

55,530.57 46,416.54

347,596.01 57,933.00

TOTAL QBE FORMULA FUNDS

$

10,312,317.00 $ 10,152,084.49 $ 454,082.80 $ 10,606,167.29

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

See notes to the general-purpose financial statements.

-34-

BERRIEN COUNTY BOARD OF EDUCATION GENERAL FUND- QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2002

SCHEDULE "5"

Berrien High School Berrien Middle School Berrien Elementary School Berrien Primary School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,628,932.00 $

2,901 ,256.32

2,287,696.00

2,396,353.32

2,277,344.00

2,239,679.70

2,606,975.00

2,663,348.94

143,568.00

$

9,944,515.00 $ 10,200,638.28

See notes to the general-purpose financial statements. -35-

SECTION II 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
April 15,2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Berrien County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Berrien County Board of Education as of and for the year ended June 30, 2002, and have issued our report thereon dated April 15, 2003. 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 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Berrien County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Berrien 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
2002YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Berrien County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-61 01-02-01.
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 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, we consider item FS-6101-02-01 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Berrien 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,
tl)~

RWH:as 2002YB-41

State Auditor

w. RliSSELL HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400
April 15, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Berrien County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofBerrien County Board ofEducation with the types ofcompliance requirements described in the U.S Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 2002. Berrien County Board of Education's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule ofFindings 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 Berrien County Board of Education's management. Our responsibility is to express an opinion on Berrien County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Berrien 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 Berrien County Board of Education's compliance with those requirements.
2002SA-30

In our opinion, the Berrien County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2002.
Internal Control Over Compliance
The management of Berrien 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 Berrien County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Berrien County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6101-02-01.
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 of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness.
This report is intended solely for the information and use of the management, members of the Berrien County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~.~

RWH:as 2002SA-30

State Auditor

SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS

BERRIEN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-61 01-00-01 FS-61 01-01-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses

CORRECTIVE ACTION/RESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Finding Control Number: FS-6101-01-01

General Fixed Assets Account Group will be included in the fiscal year 2003 financial records.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6101-01-01

Partially Resolved

CORRECTIVE ACTION/RESPONSES

CASH MANAGEMENT Excessive Cash Balances Reportable condition Finding Control Number: FA-6101-01-01

Procedures have been put in place to monitor cash needs.

SECTION IV FINDINGS AND QUESTIONED COSTS

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Berrien 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 Berrien County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit of the Berrien 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 Berrien County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Berrien County Board ofEducation's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Reguired to be Reported by Section .510(a) ofOMB Circular A-133 The Berrien County Board of Education's audit disclosed an audit finding required to be reported by section .51 O(a) ofOMB Circular A-133. This audit finding is included in section IV of this report.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program- Food Services- School Breakfast Program 10.555 Food and Nutrition Program- Food Services- National School Lunch Program 10.559 Food and Nutrition Program- Food Services- Summer Food Service Program for Children 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-

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
I SUMMARY OF AUDITOR'S RESULTS
9. Low Risk Auditee The Berrien County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6101-02-01
The Berrien County School District 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 School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings, and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group.
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CASH MANAGEMENT Excessive Cash Balances Reportable Condition U.S. Department of Education Pass-Through From Georgia Department of Education Repeated From Prior Year Finding Control Number: FA-6101-02-01
A review of cash management procedures for the Title I - Migrant Education Program (CFDA 84.011) disclosed that cash draws were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. During fiscal year 2002, these programs had an average monthly cash balance that was in excess of 4% of the program's total cash receipts. This condition occurred due to the School District's failure to follow procedures to accurately forecast cash needs. Procedures should be implemented to minimize the time elapsing between the transfer offunds from the Georgia Department of Education and disbursement of such funds by the School District.
- 2-