Berrien County Board of Education, Nashville, Georgia, annual financial report for the fiscal year ended June 30, 2016 (including independent auditor's reports)

BERRIEN COUNTY BOARD OF EDUCATION
NASHVILLE, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2016
(Including Independent Auditor's Reports)


BERRIEN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S REPORT

EXHIBITS

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET POSITION

B

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

H

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS

I NOTES TO THE BASIC FINANCIAL STATEMENTS

Page
1 2 4 6 8 10 11 12 14

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

35

TEACHERS RETIREMENT SYSTEM OF GEORGIA

2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA

36

3 SCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA

37

4 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

38

5 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

39

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BERRIEN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I
FINANCIAL
SCHEDULES
SUPPLEMENTARY INFORMATION
6 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS 7 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES NONMAJOR GOVERNMENTAL FUNDS 8 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 9 SCHEDULE OF STATE REVENUE 10 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

Page
40 41 42 43 45

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH *29(510(17$8',7,1*67$1'$5'6
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

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

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

SECTION V MANAGEMENT'S CORRECTIVE ACTION SCHEDULE OF MANAGEMENT'S CORRECTIVE ACTION

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SECTION I FINANCIAL

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BERRIEN COUNTY BOARD OF EDUCATION

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BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2016
ASSETS
Cash and Cash Equivalents Receivables, Net
Taxes State Government Federal Government Other Inventories Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Related to Defined Benefit Pension Plan
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Contracts Payable Retainages Payable Net Pension Liability Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Related to Defined Benefit Pension Plan
NET POSITION
Net Investment in Capital Assets Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit)
Total Net Position

EXHIBIT "A"

GOVERNMENTAL ACTIVITIES

$

11,140,626.98

605,016.64 2,095,365.56
900,009.71 149,171.89
40,041.77 707,496.00 34,386,178.38

50,023,906.93

2,109,036.61

562,910.29 3,084,509.00
435,841.74 118,755.05 1,154,561.57 148,574.00 21,025,419.00
1,629,386.54 6,997,104.43
35,157,061.62

2,806,800.00

32,853,806.57
267,778.34 36,685.64
1,035,457.26 (20,024,645.89)

$

14,169,081.92

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

- 1 -

BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2016

GOVERNMENTAL ACTIVITIES
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 Operations of Non-Instructional Services Enterprise Operations Food Services Interest on Short-Term and Long-Term Debt
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Position
Net Position - Beginning of Year
Net Position - End of Year

EXPENSES

CHARGES FOR SERVICES

$ 22,662,927.45 $
1,401,223.54 735,775.54 413,514.79 887,904.77
1,678,387.68 169,526.07
2,337,621.49 2,226,562.31
171,298.22 92,011.07
538.55 2,442,818.74
282,264.62
$ 35,502,374.84 $

25,539.67
19,700.00 -
40,499.09
-
85,738.76

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

- 2 -

EXHIBIT "B"

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET POSITION

$ 15,262,833.16 $
158,525.53 514,514.16 381,066.89 608,430.57 840,295.45
2,789.92 904,361.69 599,102.90
8,147.06 41,678.23
1,669,248.60
-
$ 20,990,994.16 $

336,167.02 $
11,929.23 -
6,111.49 46.83 -
77,220.00 -
36,127.81
-
467,602.38

(7,038,387.60)
(1,230,768.78) (221,261.38) (32,447.90) (273,362.71) (838,045.40) (166,736.15)
(1,413,559.80) (1,550,239.41)
(163,151.16) (50,332.84)
(538.55) (696,943.24) (282,264.62)
(13,958,039.54)

4,892,826.26 6,088.58
1,344,432.93 26,835.38
2,058,239.00 31,456.14
877,614.25
9,237,492.54
(4,720,547.00)
18,889,628.92

$

14,169,081.92

- 3 -

BERRIEN COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2016

ASSETS
Cash and Cash Equivalents Accounts Receivables, Net
Taxes State Government Federal Government Other Inventories
Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable Retainages Payable
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes
FUND BALANCES
Nonspendable Restricted Assigned Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of Resources, and Fund Balances

GENERAL FUND

CAPITAL PROJECTS
FUND

$ 7,853,338.54 $
492,250.15 2,074,983.00
883,124.11 146,260.64
40,041.77

3,125,085.95
112,766.49 -

$ 11,489,998.21 $

3,237,852.44

$

549,023.84 $

3,025,137.76

435,841.74

-

-

4,010,003.34

1,154,561.57 148,574.00
1,303,135.57

185,986.69

-

40,041.77 197,652.04
82,785.37 6,973,529.00
7,294,008.18

1,190,407.28
744,309.59 -
1,934,716.87

$ 11,489,998.21 $

3,237,852.44

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

- 4 -

EXHIBIT "C"

DEBT SERVICE
FUND

NONMAJOR GOVERNMENTAL
FUND

TOTAL

$

- $

162,202.49 $

11,140,626.98

-

-

605,016.64

-

20,382.56

2,095,365.56

-

16,885.60

900,009.71

-

2,911.25

149,171.89

-

-

40,041.77

$

- $

202,381.90 $

14,930,232.55

$

- $

13,886.45 $

562,910.29

-

59,371.24

3,084,509.00

-

-

435,841.74

-

-

1,154,561.57

-

-

148,574.00

-

73,257.69

5,386,396.60

-

-

185,986.69

-

-

40,041.77

-

30,084.53

1,418,143.85

-

99,039.68

926,134.64

-

-

6,973,529.00

-

129,124.21

9,357,849.26

$

- $

202,381.90 $

14,930,232.55

- 5 -

BERRIEN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION JUNE 30, 2016

EXHIBIT "D"

Total fund balances - governmental funds (Exhibit "C")
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds.
Land Buildings and improvements Equipment Land improvements Infrastructure Intangible assets Accumulated depreciation
Some liabilities are not due and payable in the current period and, therefore, are not reported in the funds.
Net pension liability
Deferred outflows and inflows of resources related to pensions are applicable to future periods and, therefore, are not reported in the funds.
Taxes that are not available to pay for current period expenditures are deferred in the funds.
Long-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds.
General obligation bonds payable Capital leases payable Accrued interest
Net position of governmental activities (Exhibit "A")

$

9,357,849.26

$

707,496.00

40,428,623.51

7,289,722.30

1,984,148.89

159,600.00

248,648.00

(15,724,564.32)

35,093,674.38

(21,025,419.00) (697,763.39) 185,986.69

$

(3,270,000.00)

(5,356,490.97)

(118,755.05)

(8,745,246.02)

$

14,169,081.92

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

- 6 -

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BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Enterprise Operations Food Services Operation
Capital Outlay Debt Services
Principal Interest
Total Expenditures
Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Insurance Proceeds Transfers In Transfers Out Capital Lease Proceeds
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

CAPITAL PROJECTS
FUND

$

4,759,488.18 $

26,835.38

18,033,175.86

4,675,916.15

85,738.76

27,663.36

682,042.99

28,290,860.68

1,344,432.93
3,792.78 -
1,348,225.71

18,387,413.47
727,032.80 763,958.54 431,122.79 690,415.50 1,290,421.39 177,065.07 1,814,759.02 1,681,581.16 179,195.22
78,779.63 538.55
1,882,498.18 -
28,700.59 1,388.28
28,134,870.19
155,990.49

-
6,791,755.57
-
6,791,755.57
(5,443,529.86)

79,997.41 -
(110,175.99) -
(30,178.58)
125,811.91
7,168,196.27

(1,747,550.00) 5,327,104.43
3,579,554.43
(1,863,975.43)
3,798,692.30

$

7,294,008.18 $

1,934,716.87

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

- 8 -

EXHIBIT "E"

DEBT SERVICE
FUND

NONMAJOR GOVERNMENTAL
FUND

TOTAL

$

- $

113,335.01 $

4,872,823.19

-

-

1,371,268.31

-

371,987.00

18,405,162.86

-

81,744.78

4,757,660.93

-

-

85,738.76

-

-

31,456.14

-

115,573.85

797,616.84

-

682,640.64

30,321,727.03

-
-
1,530,000.00 217,550.00
1,747,550.00
(1,747,550.00)

373,687.44
250,808.32 460.00 -
6,025.00 133,906.98
26,432.49
5,040.65 -
6,373.13 -
-
802,734.01
(120,093.37)

18,761,100.91
977,841.12 764,418.54 431,122.79 696,440.50 1,424,328.37 177,065.07 1,841,191.51 1,686,621.81 179,195.22
85,152.76 538.55
1,882,498.18 6,791,755.57
1,558,700.59 218,938.28
37,476,909.77
(7,155,182.74)

1,747,550.00
-
1,747,550.00
-
-

110,175.99
-
110,175.99
(9,917.38)
139,041.59

79,997.41 1,857,725.99 (1,857,725.99) 5,327,104.43
5,407,101.84
(1,748,080.90)
11,105,930.16

$

- $

129,124.21 $

9,357,849.26

- 9 -

BERRIEN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2016
Net change in fund balances total governmental funds (Exhibit "E")
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense.
Capital outlay Depreciation expense
Capital assets purchased with Universal Service Fund (e-rate) proceeds are not reported in governmental funds. However, in the Statement of Activities, the e-rate proceeds are shown as capital grants and contributions.
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
Some of the capital assets acquired this year were financed with capital leases. In governmental funds, a capital lease arrangement is considered a source of financing, but in the Statement of Net Position, the lease obligation is reported as a Long-Term Liability.
Repayment of long-term debt is reported as an expenditure in government funds, but the repayment reduces long-term liabilities in the Statement of Net Position. In the current year, these amounts consist of:
Bond principal retirements Capital lease payments
Total long-term debt repayments
District pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension liability is measured a year before the District's report date. Pension expense, which is the change in the net pension liability adjusted for changes in deferred outflows and inflows of resources related to pensions, is reported in the Statement of Activities.
Pension expense
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.
Accrued interest on issuance of bonds
Change in net position of governmental activities (Exhibit "B")

EXHIBIT "F" $ (1,748,080.90)

$

538,058.70

(1,048,423.08)

(510,364.38)

390,382.38 26,091.65

(5,327,104.43)

$ 1,530,000.00 28,700.59

1,558,700.59

953,154.43 (63,326.34) $ (4,720,547.00)

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

- 10 -

ASSETS Cash and Cash Equivalents Receivables, Net
Other
Total Assets LIABILITIES Cash Overdraft Funds Held for Others
Total Liabilities NET POSITION Held in Trust for Private Purposes

BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS JUNE 30, 2016

EXHIBIT "G"

PRIVATE PURPOSE TRUSTS

AGENCY FUNDS

$

- $

119.71

85,709.73 -

$

119.71 $

85,709.73

$

119.71 $

-

85,709.73

119.71 $

85,709.73

$

-

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

- 11 -

BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2016
ADDITIONS Other Additions
DEDUCTIONS Other Deductions Change in Net Position
Net Position - Beginning
Net Position - Ending

EXHIBIT "H"

PRIVATE PURPOSE TRUSTS

$

-

-

$

-

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

- 12 -

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

NOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Berrien County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a 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.
Blended Component Unit
The Berrien County Collaborative, Inc. (Collaborative) (a non-profit corporation) is dedicated to coordinating human services and delivering them to youth in Berrien County, Georgia and to their families through the supportive environment of the public schools or alternative education sites. The Collaborative endeavors to enable said youth and their families to have access to a broad range of needed social and education services by establishing a coordinated delivery system of county resources within an educational setting. The objective of the Collaborative is to reduce the number of school dropouts in the Berrien County School District. The financial statements of the Collaborative have been blended with the School District's nonmajor governmental fund.
The Berrien Academy Charter School (Charter School) is responsible for the public education of all students attending its school. The Charter School was created through a contract between the School District and the Charter School whereby all State funding associated with the students attending the Charter School and certain specified local funds are turned over to the Charter School to cover the cost of its operations. The financial statements of the Charter School have been blended with the School District's nonmajor governmental fund.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below.
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the government-wide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness.
GOVERNMENT-WIDE STATEMENTS:
The Statement of Net Position and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.

- 14 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

The Statement of Net Position presents the School District's non-fiduciary assets and liabilities, with the difference reported as net position. Net position is reported in three categories as follows:
1. Net Investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of investment in capital assets.
2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation.
3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net positon often has constraints on resources imposed by management which can be removed or modified.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
FUND FINANCIAL STATEMENTS
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities. Separate financial statements are presented for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds.
The School District reports the following major governmental funds:
x The general fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.
x The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST) that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets.
x The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest.
The School District reports the following fiduciary fund types:
x Private purpose trust funds are used to report all trust arrangements, other than those properly reported elsewhere, in which principal and income benefit individuals, private organizations or other governments.
x Agency funds are used to report resources held by the School District in a purely custodial capacity (assets equal liabilities) and do not involve measurement of results of operations.
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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The government-wide and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds 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.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. The School District considers all intergovernmental revenues to be available if they are collected within 60 days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2016, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurement and Application. This statement addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This statement provides guidance for determining a fair value measurement for financial reporting purposes. This statement also provides guidance for applying fair value to certain investments and disclosures related to all fair value measurements. The School District did not have any items that required a reassessment of value for reporting purposes as a result of adoption of this statement.
In fiscal year 2016, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets that are not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements No. 67 and 68. This statement establishes requirements for defined benefit pensions that are not within the scope of Statement No. 68, Accounting and Financial Reporting for Pensions, as well as for the assets accumulated for purposes of providing those pensions. In addition, it establishes

- 16 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

requirements for defined contribution pensions that are not within the scope of Statement No. 68. It also amends certain provisions of Statement No. 67, Financial Reporting for Pension Plans, and Statement No. 68 for pension plans and pensions that are within their respective scopes. The adoption of this statement does not have a significant impact on the School District's financial statements.
In fiscal year 2016, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 79, Certain External Investment Pools and Pool Participants. This statement addresses accounting and financial reporting for certain external investment pools and pool participants. If an external investment pool meets the criteria in this statement and measures all of its investments at amortized cost, the pool's participants also should measure their investments in that external investment pool at amortized cost for financial reporting purposes. The School District participates in an external investment pool, the State of Georgia local government investment pool (Georgia Fund 1), which does not meet the criteria of this statement. Therefore, the investment in this pool is measured at fair value as provided in paragraph 11 of GASB Statement No. 31, as amended.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool (Georgia Fund 1) and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated (O.C.G.A.) 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
INVENTORIES
Food Inventories
On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (calculated on the first-in first-out basis). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.
CAPITAL ASSETS
On the government-wide financial statements, capital assets are recorded at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at acquisition value on the date donated. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. The School District does not capitalize book collections or works of art.
Capital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities column in the government-wide financial statements.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

Depreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives.
Capitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land

Any Amount

Land Improvements

$

10,000.00

Buildings and Improvements $

10,000.00

Equipment

$

10,000.00

Intangible Assets

$

10,000.00

Infrastructure

$

250,000.00

N/A 20 to 80 years 10 to 80 years
5 to 50 years 15 to 50 years 15 to 50 years

DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the statement of financial position will report a separate section for deferred outflows of resources. This separate financial statement element, represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then.

In addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time.

LONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS
In the School District's government-wide financial statements, outstanding debt is reported as liabilities. Bond premiums and discounts and the difference between the reacquisition price and the net carrying value of refunded debt are deferred and amortized over the life of the bonds using the straight-line method. To conform to generally accepted accounting principles, bond premiums and discounts should be amortized using the effective interest method. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued.

In the governmental fund financial statements, the School District recognizes the proceeds of debt and premiums as other financing sources of the current period. Bond issuance costs are reported as debt service expenditures.

PENSIONS
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

FUND BALANCES
Fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

The School District's fund balances are classified as follows:

Nonspendable consists of resources that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.

Restricted consists of resources that can be used only for specific purposes pursuant constraints either (1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation.

Committed consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decisionmaking authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.

Assigned consists of resources constrained by the School District's intent to be used for specific purposes, but are neither restricted nor committed. The intent should be expressed by (1) the Board or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.

Unassigned consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance.

USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

PROPERTY TAXES
The Berrien County Board of Commissioners adopted the property tax levy for the 2015 tax digest year (calendar year) on September 10, 2015 (levy date) based on property values as of January 1, 2015. Taxes were due on December 20, 2015 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2015 tax digest are reported as revenue in the governmental funds for fiscal year 2016. The Berrien County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2016, for maintenance and operations amounted to $4,485,312.61.

The tax millage rate levied for the 2015 tax year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

14.00 mills

Additionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $381,422.00 during fiscal year ended June 30, 2016.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

SALES TAXES
Education Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $1,344,432.93 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.
NOTE 3: BUDGETARY DATA
The budget is a complete financial plan for the School District's fiscal year, and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general, debt service, capital projects and nonmajor funds. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate fund level. The budget for the general fund was prepared in accordance with accounting principles generally accepted in the United States of America.
The budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines, and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of O.C.G.A. 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.
See the General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review.
NOTE 4: DEPOSITS AND CASH EQUIVALENTS
COLLATERALIZATION OF DEPOSITS
O.C.G.A. 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110% of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110% of the daily pool balance.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

(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 or securities guaranteed 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
Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2016, the School District had deposits with a carrying amount of $10,098,865.63, and a bank balance of $10,570,450.19. The bank balances insured by Federal depository insurance were $661,528.81 and the bank balances collateralized with securities held by the pledging financial institution or by the pledging financial institution's trust department or agent in the School District's name were $9,908,921.38.
Reconciliation of cash and cash equivalents balances to carrying value of deposits:

Statement of Net Position Cash and cash equivalents
Statement of Fiduciary Net Position Cash and cash equivalents

$ 11,140,626.98 85,590.02

Total cash and cash equivalents

11,226,217.00

Less: Cash on hand

100.00

Investment pools reported as cash and cash equivalents Georgia Fund 1

1,127,251.37

Total carrying value of deposits - June 30, 2016

$ 10,098,865.63

CATEGORIZATION OF CASH EQUIVALENTS
The School District reported cash equivalents of $1,127,251.37 in Georgia Fund 1, a local government investment pool, which is included in the cash balances above. Georgia Fund 1 is not registered with the SEC as an investment company and does not operate in a manner consistent with the SEC's Rule 2a-7 of the Investment Company Act of 1940. The investment is valued at the pool's share price, $1.00 per share, which approximates fair value. The pool is an AAAf rated investment pool by Standard and Poor's. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2016, was 42 days.
Georgia Fund 1, administered by the State of Georgia, Office of the State Treasurer, is not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment policy of the State of Georgia, Office of the State Treasurer for the Georgia Fund 1, does

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

not provide for investment in derivatives or similar investments. Additional information on the Georgia Fund 1 is disclosed in the State of Georgia Comprehensive Annual Financial Report. This audit can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html.
NOTE 5: CAPITAL ASSETS
The following is a summary of changes in the capital assets for governmental activities during the fiscal year:

Balances July 1, 2015

Increases

Decreases

Balances June 30, 2016

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress

$

707,496.00 $

- $

- $

707,496.00

154,305.31

206,520.00

360,825.31

-

Total Capital Assets Not Being Depreciated

861,801.31

206,520.00

360,825.31

707,496.00

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements Infrastructure Intangible Assets
Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements Infrastructure Intangible Assets

40,428,623.51 6,268,422.91 1,984,148.89 159,600.00 248,648.00
7,853,314.85 4,933,385.57 1,856,933.91
48,368.42 45,585.49

1,082,746.39
-
680,556.25 318,107.65
36,645.58 4,825.33 8,288.27

61,447.00
-
61,447.00
-

40,428,623.51 7,289,722.30 1,984,148.89 159,600.00 248,648.00
8,533,871.10 5,190,046.22 1,893,579.49
53,193.75 53,873.76

Total Capital Assets, Being Depreciated, Net

34,351,855.07

34,323.31

-

34,386,178.38

Governmental Activity Capital Assets - Net

$ 35,213,656.38 $

240,843.31 $

360,825.31 $ 35,093,674.38

Current year depreciation expense by function is as follows:

Instruction Support Services
Pupil Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Food Services

$

31,468.69

16,121.81

123.53

73,160.58

118,506.86

$ 713,738.28
239,381.47 95,303.33

$ 1,048,423.08

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

NOTE 6: INTERFUND TRANSFERS INTERFUND TRANSFERS
Interfund transfers for the year ended June 30, 2016, consisted of the following:

Transfers to

Transfers From

Capital

General Fund

Projects Fund

Debt Service Fund Nonmajor Governmental Funds

$

- $ 1,747,550.00

110,175.99

-

Total

$

110,175.99 $ 1,747,550.00

Transfers are used to move property tax revenues collected by the general fund to the nonmajor governmental fund to cover current year excess expenditures at the Berrien Academy Charter School and to move Educational Special Purpose Local Option Sales Tax (ESPLOST) collected by capital projects fund to the debt service fund to repay general obligation bond debt.
NOTE 7: LONG-TERM LIABILITIES
The changes in long-term liabilities during the fiscal year for governmental activities, were as follows:

Balance July 1, 2015

Additions

Governmental Activities

Balance

Deductions

June 30, 2016

Due Within One Year

General Obligation Bonds Capital Leases Energy Efficiency Leases

$ 4,800,000.00 $

- $ 1,530,000.00 $ 3,270,000.00 $ 1,600,000.00

58,087.13

-

28,700.59

29,386.54

29,386.54

-

5,327,104.43

-

5,327,104.43

-

$ 4,858,087.13 $ 5,327,104.43 $ 1,558,700.59 $ 8,626,490.97 $ 1,629,386.54

GENERAL OBLIGATION DEBT OUTSTANDING
The School District's bonded debt consists of general obligation bonds that are generally noncallable with interest payable semiannually. Bond proceeds primarily pay for acquiring or constructing capital facilities. The School District repays general obligation bonds from voter-approved property taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District.
General obligation bonds currently outstanding are as follows:

Description

Interest Rates

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

General Government - Series 2006 3.5% - 5.0%

6/1/2006

4/1/2018 $ 13,500,000.00 $ 3,270,000.00

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

The following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable:

Fiscal Year Ended June 30:

General Obligation Debt

Principal

Interest

2017 2018

$

1,600,000.00 $

1,670,000.00

144,350.00 80,350.00

Total Principal and Interest

$

3,270,000.00 $

224,700.00

CAPITAL LEASES
The Berrien County Board of Education entered into a lease agreement for a bus. This lease agreement qualifies as a capital lease for accounting purposes, and therefore, has been recorded at the present value of the future minimum payments as of the date of the inception.
The following asset was acquired through a capital lease and is reflected in the capital asset note at fiscal year-end:
Governmental Activities

Equipment

$

Less: Accumulated Depreciation

88,176.00 13,226.40

$

74,949.60

Capital lease currently outstanding are as follows:

Purpose

Interest Rate

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

Bus Lease

2.39%

9/26/2014

9/26/2016 $

88,176.00 $

29,386.54

At June 30, 2016, payments due by fiscal year which includes principal and interest for this item is as follows:

Fiscal Year Ended June 30:

Capital Lease

Principal

Interest

2017

$

29,386.54 $

702.33

OBLIGATIONS UNDER ENERGY EFFICIENCY LEASES
An energy efficiency lease agreement dated July 31, 2015 was executed by and between the School District, the lessee, and Ameris Bank, the lessor. The agreement authorized the borrowing of $5,327,104.43 for the purchase of energy efficiency equipment, machinery, supplies, building modifications and other energy saving items. Payments of the lease shall be made from the School District's capital projects fund.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

The following was acquired through the energy efficiency capital lease:

Non-Capital Expenditures Capital Assets Purchased

Governmental Activities
$ 5,120,584.43 206,520.00

Total Lease

$ 5,327,104.43

The following was acquired through the energy efficiency capital lease and is reflected in the capital asset note at fiscal year-end:

Equipment

$

Less: Accumulated Depreciation

Governmental Activities 206,520.00 10,326.00

$ 196,194.00

Debt currently outstanding is as follows:

Purpose ABM Building Solutions

Interest Rate 2.82%

Issue Date 7/31/2016

Maturity Date

Amount Issued

Amount Outstanding

7/31/2031 $

5,327,104.43 $ 5,327,104.43

The following is a schedule of total energy efficiency lease payments:

Fiscal Year Ended June 30:

Principal

Interest

2017 2018 2019 2020 2021 2022 - 2026 2027 - 2031 2032

$

- $

290,219.43

298,403.61

306,818.59

315,470.88

1,715,923.40

1,971,904.57

428,363.95

93,422.95 150,224.34 142,040.16 133,625.18 124,972.89 486,295.45 230,314.28
12,079.86

Total Principal and Interest

$ 5,327,104.43 $ 1,372,975.11

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

NOTE 8: RISK MANAGEMENT
INSURANCE
Commercial Insurance
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; and natural disasters. Except as described below, the School District carries commercial insurance for these risks. Settled claims resulting from these insured risks have not exceed commercial insurance coverage in any of the past three fiscal years.
The School District has elected to self-insure for losses related to natural disasters. The School District has not experienced any losses related to this risk in the past three years.

WORKERS' COMPENSATION
Georgia Education Workers' Compensation Trust
The School District participates in the Georgia Education Workers' Compensation Trust (the Trust), a public entity risk pool organized on December 1, 1991, to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The School District pays an annual premium to the Trust for its general workers' compensation insurance coverage. Specific excess of loss insurance coverage is provided through an agreement by the Trust with the Safety National Casualty Company to provide coverage for potential losses sustained by the Trust in excess of $1.0 million loss per occurrence, up to the statutory limit. Employers' Liability insurance coverage is also provided with limits of $2.0 million. The Trust covers the first $1.0 million of each Employers Liability claim with Safety National providing additional Employers Liability limits up to a $2.0 million per occurrence maximum. Safety National Casualty Company also provides $2.0 million in aggregate coverage to the Trust, attaching at 110% of the loss fund and based on the Fund's annual normal premium.

UNEMPLOYMENT COMPENSATION
The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures 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 of Year Liability

2015 $

-

$

3,206.63

$

3,206.63

$

-

2016 $

-

$

-

$

-

$

-

SURETY BOND
The School District purchased a surety bond to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent

$

20,000.00

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

NOTE 9: FUND BALANCE CLASSIFICATION DETAILS
The School District's financial statements include the following amounts presented in the aggregate at June 30, 2016:

Nonspendable Inventories
Restricted General fund - continuation of federal programs Capital projects fund - capital projects Capital projects fund - debt service Nonmajor fund - continuation of federal programs
Assigned General fund - school activity accounts Capital project fund - local capital outlay projects Nonmajor fund - school activity accounts
Unassigned

$ 40,041.77

$ 197,652.04 1,118,232.28 72,175.00 30,084.53

1,418,143.85

$

82,785.37

744,309.59

99,039.68

926,134.64 6,973,529.00

Fund balance, June 30, 2016

$ 9,357,849.26

When multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds.
It is the goal of the School District to achieve and maintain a committed, assigned, and unassigned fund balance in the general fund at fiscal year-end of not less than 5% of expenditures, not to exceed 15% of the total budget of the subsequent fiscal year, in compliance with Official Code of Georgia Annotated Section 20-2-167(a)5. If the unassigned fund balance at fiscal year-end falls below the goal, the School District shall develop a restoration plan to achieve and maintain the minimum fund balance.
NOTE 10: BROADBAND SPECTRUM LEASE
The School District entered into a lease agreement in April 2011 with MSB Spectrum Holdings Inc. for the lease of excess spectrum capacity on Education Broadband Service licenses currently held by School District. The Federal Communications Commission granted these licenses to the School District. The lease agreement requires annual lease payments of $26,400.00 for the first ten years, $29,040.00 for years eleven through twenty, and $31,680.00 for years twenty-one and beyond. If the lease is terminated before its anniversary date, payments will be pro-rated. General revenue of $26,400.00 was recognized during fiscal year 2016 on the Statement of Activities.
NOTE 11: SIGNIFICANT CONTINGENT LIABILITIES
FEDERAL GRANTS
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 costs which are disallowed under grant terms. Any disallowances resulting from the grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position.

- 27 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

NOTE 12: POST-EMPLOYMENT BENEFITS

GEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND

Plan Description. The Georgia School Personnel Post-Employment Health Benefit Fund (School OPEB Fund) is a cost-sharing multiple-employer defined benefit post-employment healthcare plan that covers eligible former employees of public school systems, libraries and regional educational service agencies. The School OPEB Fund provides health insurance benefits to eligible former employees and their qualified beneficiaries through the State Employees Health Benefit Plan administered by the Department of Community Health. The Official Code of Georgia Annotated (O.C.G.A.) assigns the authority to establish and amend the benefit provisions of the group health plans, including benefits for retirees, to the Board of Community Health (Board). Additional information about the School OPEB Fund is disclosed in the State of Georgia Comprehensive Annual Financial Report. This report can be obtained from the Georgia Department of Audits and Accounts at www.audits.ga.gov/SGD/CAFR.html.

Funding Policy. The contribution requirements of plan members and participating employers are established by the Board in accordance with the current Appropriations Act and may be amended by the Board. Contributions of plan members or beneficiaries receiving benefits vary based on plan election, dependent coverage, and Medicare eligibility and election. For members with fewer than five years of service as of January 1, 2012, contributions also vary based on years of service. On average, members with five years or more of service as of January 1, 2012 pay approximately 25% of the cost of the health insurance coverage. In accordance with the Board resolution dated December 8, 2011, for members with fewer than five years of service as of January 1, 2012, the State provides a premium subsidy in retirement that ranges from 0% for fewer than 10 years of service to 75% (but no greater than the subsidy percentage offered to active employees) for 30 or more years of service. The subsidy for eligible dependents ranges from 0% to 55% (but no greater than the subsidy percentage offered to dependents of active employees minus 20%). No subsidy is available to Medicare eligible members not enrolled in a Medicare Advantage Option. The Board of Community Health sets all member premiums by resolution and in accordance with the law and applicable revenue and expense projections. Any subsidy policy adopted by the Board may be changed at any time by Board resolution and does not constitute a contract or promise of any amount of subsidy.

Participating employers are statutorily required to contribute in accordance with the employer contribution rates established by the Board. The contribution rates are established to fund all benefits due under the health insurance plans for both active and retired employees based on projected "payas-you-go" financing requirements. Contributions are not based on the actuarially calculated annual required contribution (ARC) which represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.

The combined active and retiree contribution rates established by the Board for employers participating in the School OPEB Fund were as follows for the fiscal year ended June 30, 2016:

For certificated teachers, librarians and regional educational service agencies and certain other eligible participants:

July 1, 2015 June 30, 2016

$945.00 per member per month

For non-certificated school personnel:

July 1, 2015 December 31, 2015 $596.20 per member per month

January 1, 2016 June 30, 2016 $746.20 per member per month

- 28 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

No additional contribution was required by the Board for fiscal year 2016 nor contributed to the School OPEB Fund to prefund retiree benefits. Such additional contribution amounts are determined annually by the Board in accordance with the School plan for other post-employment benefits and are subject to appropriation.
The School District's combined active and retiree contributions to the health insurance plans, which equaled the required contribution, for the current fiscal year and the preceding two fiscal years were as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2016 2015 2014

100%

$

3,351,404.60

100%

$

3,189,290.39

100%

$

3,144,559.34

NOTE 13: RETIREMENT PLANS
The School District participates in various retirement plans administered by the State of Georgia, as further explained below.
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description: All teachers of the School District as defined in O.C.G.A 47360 and certain other support personnel as defined by 47363 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a costsharing multipleemployer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers Retirement System of Georgia issues a publicly available separate financial audit report that can be obtained at www.trsga.com/publications.
Benefits Provided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.
Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6% of their annual pay during fiscal year 2016. The School District's contractually required contribution rate for the year ended June 30, 2016 was 14.27% of annual School District payroll, of which 14.21% of payroll was required from the School District and 0.06% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $2,109,036.61 and $8,966.63 from the School District and the State, respectively.

- 29 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS)
Plan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/formspubs/formspubs.

Benefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose to receive reduced benefits after age 60 and upon completion of ten years of service.

Upon retirement, the member will receive a monthly benefit of $14.75, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.

Contributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $46,663.00.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

At June 30, 2016, the School District reported a liability of $21,025,419.00 for its proportionate share of the net pension liability for TRS.

The TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows:

School District's proportionate share of the net pension liability

$ 21,025,419.00

State of Georgia's proportionate share of the net pension liability associated with the School District

141,583.00

Total

$ 21,167,002.00

- 30 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

The net pension liability for TRS was measured as of June 30, 2015. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2014. An expected total pension liability as of June 30, 2015 was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS during the fiscal year ended June 30, 2015.
At June 30, 2015, the School District's TRS proportion was 0.138107%, which was a decrease of 0.004575% from its proportion measured as of June 30, 2014.
At June 30, 2016, the School District did not have a PSERS liability for a proportionate share of the net pension liability because of a special funding situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net pension liability associated with the School District is $221,931.00.
The PSERS net pension liability was measured as of June 30, 2015. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2014. An expected total pension liability as of June 30, 2015 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2015.
For the year ended June 30, 2016, the School District recognized pension expense of $1,161,907.00 for TRS and $13,235.00 for PSERS and revenue of $6,024.00 for TRS and $13,235.00 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel.
At June 30, 2016, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

TRS Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience

$

-

$ 184,929.00

Net difference between projected and actual earnings on pension plan investments

-

1,773,516.00

Changes in proportion and differences between School District contributions and proportionate share of contributions

-

848,355.00

School District contributions subsequent to the measurement date

2,109,036.61

-

Total

$ 2,109,036.61 $ 2,806,800.00

- 31 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

The School District contributions subsequent to the measurement date of $2,109,036.61 for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30:

TRS

2017 2018 2019 2020 2021

$ (1,081,826.00)

$ (1,081,826.00)

$ (1,081,828.00)

$ 477,465.00

$

(38,785.00)

Actuarial assumptions: The total pension liability as of June 30, 2015 was determined by an actuarial valuation as of June 30, 2014, using the following actuarial assumptions, applied to all periods included in the measurement:

Teachers Retirement System:
Inflation Salary increases Investment rate of return

3.00%
3.75% 7.00%, average, including inflation
7.50%, net of pension plan investment expense, including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females set back two years for males and set back three years for females.

The actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2004 June 30, 2009.

Public School Employees Retirement System:

Inflation

3.00%

Salary increases

N/A

Investment rate of return

7.50%, net of pension plan investment expense, including inflation

Mortality rates were based on the RP-2000 Combined Mortality Table set forward one year for males for the period after service retirement, for dependent beneficiaries, and for deaths in active service, and the RP-2000 Disabled Mortality Table set back two years for males and set forward one year for females for the period after disability retirement.
The actuarial assumptions used in the June 30, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2004 June 30, 2009.

- 32 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2016

EXHIBIT "I"

The long-term expected rate of return on TRS and PSERS pension plan investments was determined

using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of

return (expected returns, net of pension plan investment expense and inflation) are developed for

each major asset class. These ranges are combined to produce the long-term expected rate of return

by weighting the expected future real rates of return by the target asset allocation percentage and by

adding expected inflation. The target asset allocation and best estimates of arithmetic real rates of

return for each major asset class are summarized in the following table:

Long-term

Target

expected real

Asset class

allocation

rate of return*

Fixed income Domestic large stocks Domestic mid stocks Domestic small stocks International developed market stocks International emerging market stocks

30.00% 39.70%
3.70% 1.60% 18.90% 6.10%

3.00% 6.50% 10.00% 13.00% 6.50% 11.00%

Total

100.00%

* Rates shown are net of the 3.00% assumed rate of inflation

Discount rate: The discount rate used to measure the total TRS and PSERS pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Sensitivity of the School District's proportionate share of the net pension liability to changes in the discount rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 7.50%, as well as what the School District's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1percentagepoint lower (6.50%) or 1-percentage-point higher (8.50%) than the current rate:

Teachers Retirement System:

1% Decrease (6.50%)

Current Discount Rate (7.50%)

1% Increase (8.50%)

School District's proportionate share of the net pension liability

$ 36,130,593.00 $

21,025,419.00 $ 8,575,162.00

Pension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and PSERS financial report which is publically available at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html.

NOTE 14: RELATED PARTY TRANSACTIONS
The Berrien County Board of Education entered into a $330,000.00 contract for the demolition of the old high school. The contract was entered into with a member of the community who is a relative of an employee of the Berrien County Board of Education. This project began in fiscal year 2015 and was completed during fiscal year 2016.

- 33 -

(This page left intentionally blank)

BERRIEN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

SCHEDULE "1"

Year Ended
2016 2015

School District's proportion of the
net pension liability

School District's proportionate share of the net pension liability

0.138107% $ 0.142682% $

21,025,419.00 18,025,989.00

State of Georgia's proportionate share of the
net pension liability associated with the School
District

$

141,583.00 $

$

126,337.00 $

Total

School District's covered-employee
payroll

School District's proportionate share of the net pension liability as a percentage of its covered
employee payroll

Plan fiduciary net position as a
percentage of the total pension liability

21,167,002.00 $ 14,678,797.25 18,152,326.00 $ 14,658,454.23

143.24% 122.97%

81.44% 84.03%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 35 -

BERRIEN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOLS EMPLOYEES RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

SCHEDULE "2"

Year Ended
2016 2015

School District's proportion of the
net pension liability

School District's proportionate share of the
net pension liability

State of Georgia's proportionate share of the net pension liability
associated with the School District

0.00% $ 0.00% $

-

$

-

$

221,931.00 $ 191,701.00 $

Total
221,931.00 191,701.00

School District's covered-employee
payroll

$

565,558.84

$

564,085.19

School District's proportionate share of the net pension
liability as a percentage of its covered employee
payroll

Plan fiduciary net position as a
percentage of the total pension liability

N/A

87.00%

N/A

88.29%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 36 -

BERRIEN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

SCHEDULE "3"

Year Ended
2016 2015

Contractually required contribution

$

2,109,036.61

$

1,916,928.70

Contributions in relation to the contractually required
contribution

$

2,109,036.61

$

1,916,928.70

Contribution deficiency (excess)

$

-

$

-

School District's covered-employee
payroll
$ 14,840,954.07 $ 14,678,797.25

Contribution as a percentage of covered-
employee payroll
14.21% 13.06%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 37 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2016

SCHEDULE "4"

Teachers Retirement System
Changes of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP 2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience.
Method and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule RIFRQWULEXWLRQVDUHFDOFXODWHGDVRI-XQHWKUHH\HDUVSULRUWRWKHHQGRIWKHILVFDO\HDULQZKLFKFRQWULEXWLRQVDUHUHSRUWHG7KHIROORZLQJDFWXDULDO methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2016 reported in that schedule:

Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases Investment rate of return

June 30, 2013 Entry age Level percentage of payroll, closed 30 years Five-year smoothed market 3.00% 3.75 7.00%, including inflation 7.50%, net of pension plan investment
expense, including inflation

Public School Employees Retirement System
Changes of assumptions: The last experience investigation was prepared for the five-year period ending June 30, 2009, and based on the results of the investigation various assumptions and methods were revised and adopted by the board on December 16,2010. The next experience investigation will be prepared for the period July 1, 2009 through June 30, 2014.
Method and assumptions used in calculations of actuarially determined contributions: The actuarially determined contribution rates in the schedule RIFRQWULEXWLRQVDUHFDOFXODWHGDVRI-XQHWKUHH\HDUVSULRUWRWKHHQGRIWKHILVFDO\HDULQZKLFKFRQWULEXWLRQVDUHUHSRUWHG7KHIROORZLQJDFWXDULDO methods and assumptions were used to determine the contractually required contributions for year ended June 30, 2016 reported in that schedule:

Valuation date Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation rate Salary increases Investment rate of return
Cost-of living adjustments

June 30, 2013 Entry age Level dollar, closed 25 years Five-year smoothed market 3.00% N/A 7.50%, net of pension plan investment
expense, including inflation 1.50% semi-annually

- 38 -

BERRIEN COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2016

SCHEDULE "5"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Enterprise Operations Food Services Operation Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Insurance Proceeds Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Adjustments
Fund Balances - Ending

NONAPPROPRIATED BUDGETS

ORIGINAL(1)

FINAL(1)

ACTUAL AMOUNTS

VARIANCE OVER/UNDER

$

4,662,500.00 $

4,662,500.00 $

4,759,488.18 $

96,988.18

18,031,606.02

18,031,606.02

26,835.38

(18,004,770.64)

-

-

18,033,175.86

18,033,175.86

3,367,717.28

3,382,717.28

4,675,916.15

1,293,198.87

312,200.00

312,200.00

85,738.76

(226,461.24)

29,000.00

29,000.00

27,663.36

(1,336.64)

780,503.22

780,503.22

682,042.99

(98,460.23)

27,183,526.52

27,198,526.52

28,290,860.68

1,092,334.16

17,616,647.83
764,381.23 776,578.02 412,992.71 682,368.84 1,414,208.52 186,253.36 1,889,875.98 1,622,309.17 187,013.86
60,153.00 -
1,570,744.00 -
27,183,526.52
-

18,357,568.93
828,462.19 982,967.14 412,992.71 681,819.84 1,414,208.52 186,253.36 1,889,875.98 1,734,303.17 188,013.86
91,480.00 -
1,570,744.00 -
28,338,689.70
(1,140,163.18)

18,387,413.47
727,032.80 763,958.54 431,122.79 690,415.50 1,290,421.39 177,065.07 1,814,759.02 1,681,581.16 179,195.22
78,779.63 538.55
1,882,498.18 30,088.87
28,134,870.19
155,990.49

(29,844.54)
101,429.39 219,008.60 (18,130.08)
(8,595.66) 123,787.13
9,188.29 75,116.96 52,722.01
8,818.64 12,700.37
(538.55) (311,754.18)
(30,088.87)
203,819.51
1,296,153.67

583,024.84 (583,024.84)
-
-
-
-

583,024.84 (583,024.84)
-
(1,140,163.18)
7,011,859.66
(14,524.59)

79,997.41 -
(110,175.99)
(30,178.58)
125,811.91
7,168,196.27
-

79,997.41 (583,024.84) 472,848.85
(30,178.58)
1,265,975.09
156,336.61
14,524.59

$

- $

5,857,171.89 $

7,294,008.18 $

1,436,836.29

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $317,805.63 and $286,333.55 respectively.

The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 39 -

ASSETS Cash and Cash Equivalents Accounts Receivable, Net
State Government Federal Government Other
Total Assets LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable Salaries and Benefits Payable Total Liabilities FUND BALANCES Restricted Assigned Total Fund Balances
Total Liabilities and Fund Balances

BERRIEN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016

SCHEDULE "6"

BERRIEN COUNTY COLLABORATIVE,
INC.

BERRIEN ACADEMY CHARTER SCHOOL

TOTAL

$

54,980.50 $

107,221.99 $

162,202.49

20,382.56 16,885.60
2,911.25

-

20,382.56

-

16,885.60

-

2,911.25

$

95,159.91 $

107,221.99 $

202,381.90

$

3,839.18 $

10,047.27 $

13,886.45

-

59,371.24

59,371.24

3,839.18

69,418.51

73,257.69

30,084.53 61,236.20
91,320.73

37,803.48
37,803.48

30,084.53 99,039.68
129,124.21

$

95,159.91 $

107,221.99 $

202,381.90

See notes to the basic financial statements.

- 40 -

BERRIEN CIUNTY BOARD F EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016

SCHEDULE "7"

REVENUES
Property Taxes State Funds Federal Funds Miscellaneous
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
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Transfer In
Net Change in Fund Balances
Fund Balances - Beginning

BERRIEN COUNTY COLLABORATIVE,
INC.

BERRIEN ACADEMY CHARTER SCHOOL

TOTAL

$

- $

113,335.01 $

113,335.01

69,228.00

302,759.00

371,987.00

81,744.78

-

81,744.78

115,573.85

-

115,573.85

266,546.63

416,094.01

682,640.64

-
250,808.32 460.00
6,025.00 -
22,544.66 -
6,373.13
286,211.11
(19,664.48)

373,687.44
133,906.98 3,887.83 5,040.65 -
516,522.90
(100,428.89)

373,687.44
250,808.32 460.00
6,025.00 133,906.98
26,432.49 5,040.65 6,373.13
802,734.01
(120,093.37)

(19,664.48) 110,985.21

110,175.99 9,747.10
28,056.38

110,175.99 (9,917.38)
139,041.59

Fund Balances - Ending

$

91,320.73 $

37,803.48 $

129,124.21

See notes to the basic financial statements.

- 41 -

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2016

SCHEDULE "8"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total U.S. Department of Agriculture
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Improving Teacher Quality State Grants Migrant Education - State Grant Program Rural Education Title I Grants to Local Educational Agencies Twenty-First Century Community Learning Centers
Total Other Programs
Total U. S. Department of Education
Health and Human Services, U. S. Department of Pass-Thru from Berrien County Department of Children and Family Services Promoting Safe and Stable Families
Justice, U. S. Department of Pass-Through Funds From Alapaha Judicial Circuit Court Court Appointed Special Advocates

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555

16165GA324N1099 $ 16165GA324N1099

373,434.50 1,425,967.87
1,799,402.37

84.027 84.173

H027A150073 H173A150081

84.048 84.367 84.011 84.358 84.010 84.287

V048A150010 S367A150001 S011A150011 S358B150010 S010A150010 S287C150010

93.556 16.756

571,281.15 26,504.58
597,785.73
48,177.00 153,623.92
79,404.16 66,973.62 1,082,028.24 1,020,461.64
2,450,668.58 3,048,454.31
39,761.61
41,983.17

Total Expenditures of Federal Awards

$

4,929,601.46

Notes to the Schedule of Expenditures of Federal Awards
Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Berrien County Board of Education (the "Board") under programs of the federal government for the year ended June 30, 2016. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net assets of the Board.
Note 2. Summary of Significant Accounting Policies
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments , or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards , wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.

See notes to the basic financial statements.

- 42 -

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2016

SCHEDULE "9"

AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
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 - Early Intervention (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Categorical Grants Pupil Transportation Regular State Bonds Nursing Services Vocational Supervisors Education Equalization Funding Grant Other State Programs Food Services Math and Science Supplements Preschool Handicapped Program Teachers Retirement Vocational Education
Governor's Office of Student Achievement Connections for Classrooms Grant
Office of the State Treasurer Public School Employees Retirement
CONTRACTS Communities in Schools of Georgia Communities in Schools Program
Human Resources, Georgia Department of Family Connection
See notes to the basic financial statements.

GOVERNMENTAL FUND TYPES

NONMAJOR

GENERAL

GOVERNMENTAL

FUND

FUNDS

TOTAL

$

422,296.56 $

- $

422,296.56

704,546.00 353,568.00 2,365,766.00 424,558.00 1,101,062.00 195,616.00 1,989,652.00 1,399,697.00 494,233.00 2,269,983.00 541,316.00 390,415.00 135,824.00
84,333.00 342,171.00 103,172.00
58,393.00 813.00
485,981.00 668,574.00 782,015.00 413,305.00 (828,942.00)
503,921.00 77,220.00 58,787.00 13,584.00
2,058,239.00
45,470.00 33,509.05 84,279.00
8,966.63 156,323.00
47,866.62
46,663.00

151,566.00 25,679.00 18,798.00 4,920.00 2,575.00 982.00 270.00
3,535.00 75,688.00 18,746.00
-
-
-
-
-

704,546.00 353,568.00 2,365,766.00 424,558.00 1,101,062.00 195,616.00 1,989,652.00 1,551,263.00 519,912.00 2,269,983.00 541,316.00 409,213.00 135,824.00
84,333.00 347,091.00 105,747.00
59,375.00 1,083.00
489,516.00 744,262.00 800,761.00 413,305.00 (828,942.00)
503,921.00 77,220.00 58,787.00 13,584.00
2,058,239.00
45,470.00 33,509.05 84,279.00
8,966.63 156,323.00
47,866.62
46,663.00

-

23,137.45

23,137.45

-

46,090.55

46,090.55

$ 18,033,175.86 $

371,987.00 $ 18,405,162.86

- 43 -

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BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2016

SCHEDULE "10"

PROJECT
To reimpose the School District to raise not more than $10,000,000.00 to (1) provide the School District a maximum amount of $8,772,225.00 to retire a previously incurred general obligation debt of the School District created by the issuance and sale of the School District's General Obligation Bonds, Series 2006, and (2) provide the School District a maximum amount of $800,000.00 to acquire, construct, equip and furnish a canning plant, fine arts, physical education, and athletic buildings and facilities; instructional and administrative technology improvements for all existing schools; purchasing, repairing and upgrading school buses, School System motor vehicles, and School System equipment; purchasing text books, library books, band and musical instruments, and other instructional materials; safety, security, and maintenance equipment; and adding to, renovating, repairing, improving, demolishing, and equipping existing school buildings and other buildings and facilities necessary for efficient and effective school operations; and acquiring any necessary property therefore, both real and personal; together with paying the expenses incident to the planning and accomplishing the foregoing.

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED IN PRIOR YEARS (3)

TOTAL COMPLETION
COST

EXCESS PROCEEDS NOT
EXPENDED

ESTIMATED COMPLETION
DATE

$ 10,000,000.00 $ 10,000,000.00 $ 1,916,422.57 $ 3,754,445.62 $

- $

-

6/30/2018

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

See notes to the basic financial statements.

- 45 -

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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

(This page left intentionally blank)



































































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$! "
3;"" "

(This page left intentionally blank)

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

(This page left intentionally blank)

!"#$%!&#' &(')*'+#(, ! -,!)#.'(&, /



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(This page left intentionally blank)

SECTION IV FINDINGS AND QUESTIONED COSTS

(This page left intentionally blank)





















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?

SECTION V MANAGEMENT'S CORRECTIVE ACTION

(This page left intentionally blank)

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