Berrien County Board of Education, Nashville, Georgia, annual financial report for the fiscal year ended June 30, 2019 (including independent auditor's reports)

BERRIEN COUNTY BOARD OF EDUCATION
NASHVILLE, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019
(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

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA
2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA
3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY SCHOOL OPEB FUND
4 SCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA 5 SCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND 6 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 7 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND

Page
1 2
4 5 6 7 8 9
33 34 35 36 37 38 39

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BERRIEN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I
FINANCIAL
SCHEDULES
REQUIRED SUPPLEMENTARY INFORMATION
8 COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS 9 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES NONMAJOR GOVERNMENTAL FUNDS
SUPPLEMENTARY INFORMATION
10 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 11 SCHEDULE OF STATE REVENUE 12 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 GOVERNMENT AUDITING STANDARDS INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL 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 FOR CURRENT YEAR FINDINGS SCHEDULE OF MANAGEMENT'S CORRECTIVE ACTION

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SECTION I FINANCIAL

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Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
INDEPENDENT AUDITOR'S REPORT

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Berrien County Board of Education
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Berrien County Board of Education (School District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the of the governmental activities, each major fund, and the aggregate remaining fund information of the School District as of June 30, 2019, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Management has omitted the Management's Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information, as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U. S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.
The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional

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procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 13, 2020 on our consideration of the School District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control over financial reporting and compliance.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,

October 13, 2020

Greg S. Griffin State Auditor

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BERRIEN COUNTY BOARD OF EDUCATION

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BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2019
ASSETS
Cash and Cash Equivalents Accounts Receivable, 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 Related to OPEB Plan
Total Deferred Outflows of Resources
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Interest Payable Contracts Payable Net Pension Liability Net OPEB 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 Related to OPEB Plan
Total Deferred Inflows of Resources
NET POSITION
Net Investment in Capital Assets Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit)
Total Net Position (Deficit)
The notes to the basic financial statements are an integral part of this statement.

EXHIBIT "A"
GOVERNMENTAL ACTIVITIES
$ 9,904,648.11 896,823.17
2,725,084.77 856,678.72 47,932.31 22,643.13
5,574,041.92 33,225,128.13 53,252,980.26
5,193,181.67 1,393,416.00 6,586,597.67
487,890.27 3,363,932.08
232,145.17 154,540.07
2,415.00 23,996,209.00 24,804,237.00
1,076,583.52 6,754,107.80 60,872,059.91
1,874,126.00 4,989,532.00 6,863,658.00
35,556,755.05 97,617.73
304,726.96 1,236,456.84 (45,091,696.56)
$ (7,896,139.98)
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BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES JUNE 30, 2019

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 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

$ 20,093,952.82 $
948,732.58 855,725.82 413,185.57 690,483.59 1,549,448.01 207,301.65 1,748,676.99 2,020,807.51 188,780.96 120,055.24
1,845,755.18 226,459.27
$ 30,909,365.19 $

34,450.42
7,200.00 -
43,741.72 -
85,392.14

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

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EXHIBIT "B"

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET POSITION

$ 18,006,188.15 $
255,876.01 377,300.08 415,414.00 676,422.96 799,354.27
903,802.89 670,944.26
11,388.19 20,598.62
1,832,392.93 -
$ 23,969,682.36 $

368,434.21 $ (1,684,880.04)

11,185.13 -
14,820.79 59.88 -
34,722.44 231,660.00
-

(681,671.44) (478,425.74)
2,228.43 760.16
(750,033.86) (207,301.65) (802,951.66) (1,118,203.25) (177,392.77)
(99,456.62)

39,737.77 -

70,117.24 (226,459.27)

700,620.22

(6,153,670.47)

5,348,967.21 9,609.14
1,405,489.15 20,497.56
3,114,397.00 63,890.94
568,700.32 10,531,551.32
4,377,880.85 (12,274,020.83)
$ (7,896,139.98)

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BERRIEN COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2019

EXHIBIT "C"

ASSETS
Cash and Cash Equivalents Accounts Receivable, Net
Taxes State Government Federal Government Other Inventories

GENERAL FUND

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

NONMAJOR GOVERNMENTAL
FUND

TOTAL

$

8,280,050.34 $ 1,520,893.41 $

780,395.85 2,535,411.40
837,936.00 30,442.57 22,643.13

116,427.32 60,818.14 -

- $
-

103,704.36 $
128,855.23
18,742.72 17,489.74
-

9,904,648.11
896,823.17 2,725,084.77
856,678.72 47,932.31 22,643.13

Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Payroll Withholdings Payable Contracts Payable
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes
FUND BALANCES
Nonspendable Restricted Assigned Unassigned
Total Fund Balances

$ 12,486,879.29 $ 1,698,138.87 $

$

368,304.12 $

3,289,119.76

232,145.17

-

3,889,569.05

- $ 2,415.00
2,415.00

239,051.17

-

22,643.13 70,587.38 81,209.04 8,183,819.52
8,358,259.07

1,695,723.87
-
1,695,723.87

- $

268,792.05 $ 14,453,810.21

- $ -
-

119,586.15 $ 74,812.32 -
194,398.47

487,890.27 3,363,932.08
232,145.17 2,415.00
4,086,382.52

-

-

239,051.17

-

-

22,643.13

-

4,387.22

1,770,698.47

-

70,006.36

151,215.40

-

-

8,183,819.52

-

74,393.58

10,128,376.52

Total Liabilities, Deferred Inflows of Resources,

and Fund Balances

$

12,486,879.29 $

1,698,138.87 $

- $

268,792.05 $ 14,453,810.21

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

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BERRIEN COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION JUNE 30, 2019

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 Construction in progress 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 Net OPEB liability
Deferred outflows and inflows of resources related to pensions/OPEB are applicable to future periods and, therefore, are not reported in the funds.
Related to pensions Related to OPEB
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.
Bonds payable Accrued interest payable Energy efficiency leases payable

$ 10,128,376.52

$

707,496.00

4,866,545.92

41,443,281.90

8,479,210.30

1,984,148.89

159,600.00

248,648.00

(19,089,760.96)

38,799,170.05

$ (23,996,209.00) (24,804,237.00)

(48,800,446.00)

$

3,319,055.67

(3,596,116.00)

(277,060.33) 239,051.17

$

(3,240,000.00)

(154,540.07)

(4,590,691.32)

(7,985,231.39)

Net position of governmental activities (Exhibit "A")

$

(7,896,139.98)

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

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BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019

EXHIBIT "E"

GENERAL FUND

REVENUES

Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous

$ 5,227,877.04 $ 20,497.56
21,542,781.90 4,999,876.55 85,392.14 31,005.14 450,724.59

Total Revenues

32,358,154.92

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Services
Principal Interest

19,664,361.83
717,622.60 881,269.18 433,999.88 689,915.49 1,471,598.78 215,590.81 1,696,886.92 2,264,877.09 196,071.92 117,224.90 1,779,347.17
-
-

Total Expenditures

30,128,766.57

Excess of Revenues over (under) Expenditures

2,229,388.35

OTHER FINANCING SOURCES (USES)

Transfers In Transfers Out

(586,057.16)

Total Other Financing Sources (Uses)

(586,057.16)

Net Change in Fund Balances

1,643,331.19

Fund Balances - Beginning

6,714,927.88

CAPITAL PROJECTS
FUND
- $ 1,405,489.15
605,405.44 -
32,885.80 -
2,043,780.39
-
2,752,231.47
-
2,752,231.47
(708,451.08)
(741,921.45)
(741,921.45)
(1,450,372.53)
3,146,096.40

DEBT SERVICE
FUND

NONMAJOR GOVERNMENTAL
FUND

- $ -

174,540.96 $ -
684,128.62 80,520.75 -
117,975.73

-

1,057,166.06

-
-
1,023,207.96 242,231.07
1,265,439.03
(1,265,439.03)

720,538.32
244,455.21 10,937.49 -
162,621.26 -
21,434.14 5,207.04 1,957.30 2,830.34 -
-
1,169,981.10
(112,815.04)

1,265,439.03 -
1,265,439.03
-
-

62,539.58 -
62,539.58
(50,275.46)
124,669.04

TOTAL
5,402,418.00 1,425,986.71 22,832,315.96 5,080,397.30
85,392.14 63,890.94 568,700.32
35,459,101.37
20,384,900.15
962,077.81 892,206.67 433,999.88 689,915.49 1,634,220.04 215,590.81 1,718,321.06 2,270,084.13 198,029.22 120,055.24 1,779,347.17 2,752,231.47
1,023,207.96 242,231.07
35,316,418.17
142,683.20
1,327,978.61 (1,327,978.61)
-
142,683.20
9,985,693.32

Fund Balances - Ending

$ 8,358,259.07 $ 1,695,723.87 $

- $

74,393.58 $ 10,128,376.52

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

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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, 2019

EXHIBIT "F"

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
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
GSFIC reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and the difference between the carrying value of refunded debt and the acquisition cost of refunded debt when debt is first issued. These amounts are deferred and amortized in the Statement of Activities.
Bond principal retirements Capital lease payments
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/OPEB liability is measured a year before the District's report date. Pension/OPEB expense, which is the change in the net pension/OPEB liability adjusted for changes in deferred outflows and inflows of resources related to pensions/OPEB, is reported in the Statement of Activities.
Pension expense OPEB 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

$

142,683.20

$ 3,403,557.79 (1,226,825.42)

2,176,732.37 (43,841.65)
(136,445.22)

$

760,000.00

263,207.97

1,023,207.97

$ 1,269,689.38 (69,917.00)

1,199,772.38

15,771.80

Change in net position of governmental activities (Exhibit "B")

$ 4,377,880.85

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

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

BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS JUNE 30, 2019

EXHIBIT "G"

PRIVATE PURPOSE TRUSTS

AGENCY FUNDS

$

- $ 183,697.51

119.71

-

$

119.71 $ 183,697.51

$

119.71 $

-

-

183,697.51

$

119.71 $ 183,697.51

$

-

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

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BERRIEN COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2019
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.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

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 of 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 resources within an educational setting. The object 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.
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 net investment in capital assets.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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 position 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:
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.
The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets.
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:
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.
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.
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
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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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 longterm 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 2019, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 83, Certain Asset Retirement Obligations. This statement addresses accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset retirement activities related to its tangible capital assets should recognize a liability based on the guidance in this statement. The adoption of this statement did not have an impact on the School District's financial statement.
In fiscal year 2019, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. The primary objective of this statement is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. The School District included additional information in the Long-Term Liabilities notes disclosure.
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.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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 the 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.

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 Land Improvements Buildings and Improvements Equipment Intangible Assets Infrastructure

Any Amount

$

10,000.00

$

10,000.00

$

10,000.00

$

10,000.00

$

250,000.00

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

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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 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.
POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Georgia School Employees Postemployment Benefit Fund (School OPEB Fund) and additions to/deductions from School OPEB Fund fiduciary net position have been determined on the same basis as they are reported by School OPEB Fund. For this purpose, benefit payments 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.
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.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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 2018 tax digest year (calendar year) on September 15, 2018 (levy date) based on property values as of January 01, 2018. Taxes were due on December 20, 2018 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2018 tax digest are reported as revenue in the governmental funds for fiscal year 2019. 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, 2019, for maintenance and operations amounted to $4,902,917.94.
The tax millage rate levied for the 2018 tax year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

15.00 mills

Additionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $489,890.92 during fiscal year ended June 30, 2019.
SALES TAXES
Education Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $1,405,489.15 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.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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,
(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, 2019, the School District had deposits with a carrying amount of $8,841,765.43, and a bank balance of $8,983,307.60. The bank balances insured by Federal depository insurance were $668,148.74 and the bank balances collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name were $8,315,158.86.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

Reconciliation of cash and cash equivalents balances to carrying value of deposits:

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

$ 9,904,648.11 183,697.51

Total cash and cash equivalents

10,088,345.62

Less: Investment pools reported as cash and cash equivalents
Georgia Fund 1

1,246,580.19

Total carrying value of deposits - June 30, 2019

$ 8,841,765.43

CATEGORIZATION OF CASH EQUIVALENTS
The School District reported cash equivalents of $1,246,580.19 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, 2019, was 39 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 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.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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, 2018

Increases

Decreases

Balances June 30, 2019

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

$

707,496.00 $

- $

2,893,053.63

1,973,492.29

- $

707,496.00

-

4,866,545.92

Total Capital Assets Not Being Depreciated

3,600,549.63

1,973,492.29

-

5,574,041.92

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

40,707,638.46 7,934,793.24 1,984,148.89 159,600.00 248,648.00
9,889,240.96 6,084,501.86 1,905,903.01
62,844.41 70,450.30

735,643.44 694,422.06
-

150,005.00
-

41,443,281.90 8,479,210.30 1,984,148.89 159,600.00 248,648.00

680,959.36 527,188.21
5,564.25 4,825.33 8,288.27

150,005.00
-

10,570,200.32 6,461,685.07 1,911,467.26 67,669.74 78,738.57

Total Capital Assets, Being Depreciated, Net

33,021,888.05

203,240.08

-

33,225,128.13

Governmental Activities Capital Assets - Net $ 36,622,437.68 $ 2,176,732.37 $

- $ 38,799,170.05

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

$ 762,520.10

$ 23,076.19 30,576.96 123.53 76,461.63
252,083.55

382,321.86 81,983.46

$ 1,226,825.42

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

NOTE 6: INTERFUND TRANSFERS

INTERFUND TRANSFERS Interfund transfers for the year ended June 30, 2019, consisted of the following:

Transfers to

Transfers From

General Fund

Capital Projects Fund

Debt Service Fund

$

Nonmajor Govermental Funds

523,517.58 $ 62,539.58

741,921.45 -

Total

$ 586,057.16 $ 741,921.45

Transfers are used to move property tax revenues collected by the general fund to the nonmajor governmental fund to cover current year expenditures at the Berrien Academy Charter School and to move Education Special Purpose Local Option Sales Tax (ESPLOST) collected by capital projects fund to the debt service fund to repay general obligation bond debt. In addition, transfers were used to move unassigned revenue from the general fund to the debt service fund to pay off debt on an energy efficient capital lease.

NOTE 7: LONG-TERM LIABILITIES The changes in long-term liabilities during the fiscal year for governmental activities were as follows:

Balance July 1, 2018

Additions

Governmental Activities

Balance

Deductions

June 30, 2019

Due Within One Year

General Obligation (G.O.) Bonds Energy Efficiency Leases

$ 4,000,000.00 $ 4,853,899.29

- $ -

760,000.00 $ 3,240,000.00 $

263,207.97

4,590,691.32

780,000.00 296,583.52

$ 8,853,899.29 $

- $ 1,023,207.97 $ 7,830,691.32 $ 1,076,583.52

The School District's outstanding general obligation bonds of $3,240,000.00 related to governmental activities contain a provision that in an event of default, the interest rate charged on outstanding amounts increases to 4.94%. The rate of 4.94% shall only apply during a period of default and upon payment of any past due amounts, the standard rate of 1.94% shall be reinstated.
The School District had no unused line of credit or outstanding notes from direct borrowings and direct placements related to governmental activities as of June 30, 2019. In the event the entity is unable to make the principal and interest payments using proceeds of the Education Special Purpose Local Option Sales Tax (ESPLOST), the debt will be satisfied from a direct annual ad valorem tax levied upon all taxable property within the School District. Additional security is provided by the State of Georgia Intercept Program which allows for state appropriations entitled to the School District to be transferred to the Debt Service Account Custodian for the payment of debt.
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.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

General obligation bonds currently outstanding are as follows:

Description

Interest Rate

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

General Government - Series 2017

1.94%

3/23/2017

4/1/2023 $ 4,000,000.00 $ 3,240,000.00

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

2020 2021 2022 2023

$

780,000.00 $

800,000.00

820,000.00

840,000.00

62,856.00 47,724.00 32,204.00 16,296.00

Total Principal and Interest

$ 3,240,000.00 $

159,080.00

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 $6,703,163.95 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.
The following was acquired through the energy efficiency capital lease and is reflected in the capital asset notes at the fiscal year-end:

Governmental Activities

Equipment

$

Less: Accumulated Depreciation

206,520.00 72,282.00

$ 278,802.00

Debt currently outstanding is as follows:

Purpose ABM Building Solutions

Interest Rate 2.82%

Issue Date 7/31/2016

Maturity Date 7/31/2031

Amount Issued

Amount Outstanding

$

6,703,163.95 $ 4,590,691.32

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

The following is a schedule of total finance purchase payments:

Fiscal Year Ended June 30:

Principal

Interest

2020 2021 2022 2023 2024 2025 - 2029 2030 - 2034

$

296,583.52 $

304,726.96

313,775.99

322,747.36

331,975.25

1,807,407.68

1,213,474.56

131,255.51 123,112.07 114,063.04 105,091.67
95,863.78 331,787.47
69,722.48

Total Principal and Interest

$

4,590,691.32 $

970,896.02

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.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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

2018 $ 2019 $

Beginning of Year Liability -

Claims and

Changes in

Estimates

$

-

$

$

889.14 $

Claims Paid 889.14

End of Year

Liability

$

-

$

-

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

Position Covered

Amount

Superintendent

$

20,000.00

NOTE 9: FUND BALANCE CLASSIFICATION DETAILS

The School District's financial statements include the following amounts presented in the aggregate at June 30, 2019:

Nonspendable Inventories
Restricted Capital projects fund - Capital projects Capital projects fund - Debt service Nonmajor fund - Continuation of federal programs General fund - Continuation of federal programs
Assigned General fund - School activity accounts Nonmajor fund - School activity accounts
Unassigned

$

22,643.13

$ 1,236,456.84 459,267.03 4,387.22 70,587.38

1,770,698.47

$

81,209.04

70,006.36

151,215.40

8,183,819.52

Fund Balance, June 30, 2019

$ 10,128,376.52

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 O.C.G.A. 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
Effective April 2011, the School District entered into a 10-year lease agreement with MSB Spectrum Holdings, Inc for the lease of excess spectrum capacity on Education Broadband Service licenses currently held by School District. These licenses were granted to the School District by the Federal Communications Commission. The lease agreement requires annual lease payments over the term of the lease, of which $26,400.00 was recognized during fiscal year 2019 as a general revenue on the Statement of Activities.

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BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

NOTE 11: SIGNIFICANT COMMITMENTS

COMMITMENTS UNDER CONSTRUCTION CONTRACTS

The following is an analysis of significant outstanding construction or renovation contracts executed by the School District as of June 30, 2019:

Project

Unearned Executed Contracts (1)

Payments through June 30, 2019 (2)

Football Stadium

$

8,374.66 $ 4,652,196.23

(1) The amounts described are not reflected in the basic financial statements.
(2) Payments include contracts payable at year end.
NOTE 12: 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.
NOTE 13: OTHER POST-EMPLOYMENT BENEFITS (OPEB)
GEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description: Certified teachers and non-certified public school employees of the School District as defined in 20-2-875 of the Official Code of Georgia Annotated (O.C.G.A.) are provided OPEB through the School OPEB Fund - a cost-sharing multiple-employer defined benefit postemployment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (Board). Title 20 of the O.C.G.A. assigns the authority to establish and amend the benefit terms of the group health plan to the Board.
Benefits Provided: The School OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for public school teachers, including librarians, other certified employees of public schools, regional educational service agencies and non-certified public school employees. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from Employees' Retirement System (ERS), Georgia Judicial Retirement System (JRS), Legislative Retirement System (LRS), Teachers Retirement System (TRS) or Public School Employees Retirement System (PSERS). If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered Standard and Premium Medicare Advantage plan options. Non-Medicare eligible retiree plan options include Health Reimbursement Arrangement (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The School OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the School OPEB Fund is permitted.
Contributions: As established by the Board, the School OPEB Fund is substantially funded on a payas-you-go basis; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the School OPEB Fund from the School District were $1,014,022.00 for the year ended June 30, 2019. Active employees are not required to contribute to the School OPEB Fund.

- 24 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB

At June 30, 2019, the School District reported a liability of $24,804,237.00 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2018. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2017. An expected total OPEB liability as of June 30, 2018 was determined using standard roll-forward techniques. The School District's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2018. At June 30, 2018, the School District's proportion was 0.195160%, which was an decrease of 0.001745% from its proportion measured as of June 30, 2017.

For the year ended June 30, 2019, the School District recognized OPEB expense of $1,083,939.00. At June 30, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

OPEB Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual

experience

$

- $ 564,199.00

Changes of assumptions

-

4,201,957.00

Net difference between projected and actual

earnings on OPEB plan investments

33,560.00

-

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

345,834.00

223,376.00

School District contributions subsequent to

the measurement date

1,014,022.00

-

Total

$ 1,393,416.00 $ 4,989,532.00

School District contributions subsequent to the measurement date of $1,014,022.00 are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ended June 30:

OPEB

2020 2021 2022 2023 2024 2025

$ (883,403.00) $ (883,403.00) $ (883,403.00) $ (885,408.00) $ (760,436.00) $ (314,085.00)

- 25 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

Actuarial assumptions: The total OPEB liability as of June 30, 2018 was determined by an actuarial valuation as of June 30, 2017 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2018:

OPEB:

Inflation

2.75%

Salary increases

3.25% - 9.00%, including inflation

Long-term expected rate of return
Healthcare cost trend rate

7.30%, compounded annually, net of investment expense, and including inflation

Pre-Medicare Eligible Medicare Eligible Ultimate trend rate

7.50% 5.50%

Pre-Medicare Eligible Medicare Eligible Year of Ultimate trend rate

4.75% 4.75%

Pre-Medicare Eligible Medicare Eligible

2028 2022

Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB as follows:

For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with projection
scale BB (set forward 1 year for males) is used for death after service retirement and beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) is used for death after disability retirement.
For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with
projection scale BB (set forward 3 years for males and 2 years for females) is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward 5 years for both males and females) is used for the period after disability retirement.

The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2014.
The remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2017 valuation were based on a review of recent plan experience done concurrently with the June 30, 2017 valuation.

Projection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation.

- 26 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of investment expense and the assumed rate of 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. During fiscal year 2018, the School OPEB fund updated their investment strategy to a more long-term approach. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset class

Target allocation

Long-Term Expected Real Rate of Return*

Fixed income Domestic Stocks -- Large Cap Domestic Stocks -- Mid Cap Domestic Stocks -- Small Cap Int'l Stocks - Developed Mkt Int'l Stocks - Emerging Mkt Alternatives

30.00% 37.20%
3.40% 1.40% 17.80% 5.20% 5.00%

(0.50)% 9.00%
12.00% 13.50%
8.00% 12.00% 10.50%

Total

100.00%

*Net of Inflation

Discount Rate: The discount rate has changed since the prior measurement date from 3.58% to 3.87%. In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 3.87% was used as the discount rate. This is comprised mainly of the yield or index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA or higher (3.87% per the Bond Buyers Index). The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employer will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Projected future benefit payments for all current plan members were projected through 2118. Based on these assumptions, the OPEB plan's fiduciary net position was projected to be available to make OPEB payments for inactive employees through year 2018. Therefore, the calculated discount rate of 3.87% was applied to all periods of projected benefit payments to determine the total OPEB liability.

Sensitivity of the School District's proportionate share of the net OPEB liability to changes in the discount rate: The following presents the School District's proportionate share of the net OPEB liability calculated using the discount rate of 3.87%, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point
lower (2.87%) or 1 percentage-point higher (4.87%) than the current discount rate:

1% Decrease (2.87%)

Current Discount Rate (3.87%)

1% Increase (4.87%)

School District's proportionate share of the Net OPEB Liability

$ 28,963,571.00 $

24,804,237.00 $ 21,450,169.00

- 27 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

Sensitivity of the School District's proportionate share of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the School District's proportionate share of the net OPEB liability, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1percentage-point higher than the current healthcare cost trend rates:

1% Decrease

Current Healthcare Cost Trend Rate

1% Increase

School District's proportionate share of the Net OPEB Liability

$ 20,853,122.00 $

24,804,237.00 $ 29,853,617.00

OPEB plan fiduciary net position: Detailed information about the OPEB plan's fiduciary net position is available in the Comprehensive Annual Financial Report (CAFR) which is publicly available at https://sao.georgia.gov/comprehensive-annual-financial-reports.

NOTE 14: 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 47-3-60 and certain other support personnel as defined by 47-3-63 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer 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 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 6.00% of their annual pay during fiscal year 2019. The School District's contractually required contribution rate for the year ended June 30, 2019 was 20.90% of annual School District payroll, of which 20.82% of payroll was required from the School District and 0.08% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $3,242,504.67 and $12,601.46 from the School District and the State, respectively.

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

- 28 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

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 $15.00, 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 $47,399.00.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

At June 30, 2019, the School District reported a liability of $23,996,209.00 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

$ 23,996,209.00

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

110,445.00

Total

$ 24,106,654.00

The net pension liability for TRS was measured as of June 30, 2018. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2017. An expected total pension liability as of June 30, 2018 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, 2018.
At June 30, 2018, the School District's TRS proportion was 0.129275%, which was a decrease of 0.004116% from its proportion measured as of June 30, 2017.

- 29 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

At June 30, 2019, 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 $284,831.00.
The PSERS net pension liability was measured as of June 30, 2018. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2017. An expected total pension liability as of June 30, 2018 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, 2018.
For the year ended June 30, 2019, the School District recognized pension expense of $1,972,284.00 for TRS and $65,949.00 for PSERS and revenue of $2,483.00 for TRS and $65,949.00 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, 2019, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

TRS

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

Differences between expected and actual experience

$ 1,588,583.00 $ 49,457.00

Changes of assumptions

362,094.00

-

Net difference between projected and actual earnings on pension plan investments

-

656,103.00

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

-

1,168,566.00

School District contributions subsequent to the measurement date

3,242,504.67

-

Total

$ 5,193,181.67 $ 1,874,126.00

- 30 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

The School District contributions subsequent to the measurement date of $3,242,504.67 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, 2020. 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

2020 2021 2022 2023 2024

$ 773,887.00 $ 299,967.00 $ (848,111.00) $ (157,600.00) $ 8,408.00

Actuarial assum ptions: The total pension liability as of June 30, 2018 was determined by an actuarial valuation as of June 30, 2017, using the following actuarial assumptions, applied to all periods included in the measurement:

Teachers Retirement System:
Inflation Salary increases Investment rate of return

2.75%
3.25% 9.00%, average, including inflation
7.50%, net of pension plan investment expense, including inflation

Post-retirement mortality rates were based on the RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males) for service requirements and dependent beneficiaries. The RP-2000 Disabled Mortality table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB (set forward two years for males and four years for females) was used for the death after disability retirement. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.

The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014.

Public School Employees Retirement System:

Inflation

2.75%

Salary increases

N/A

Investment rate of return

7.30%, net of pension plan investment expense, including inflation

Post-retirement mortality rates were based on the RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females) for the period after service retirements and for dependent beneficiaries. The RP-2000 Disabled Mortality projected to 2025 with projection scale BB (set forward 5 years for both males and females) was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-11% less than the actual number of deaths that occurred during the study period for healthy retirees and 9-11% less than expected under the selected table for disabled retirees. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.

- 31 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

The actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014.
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:

Asset class

TRS Target allocation

PSERS Target allocation

Long-term expected real rate of return*

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

30.00% 39.80%
3.70% 1.50% 19.40% 5.60%
-

30.00% 37.20%
3.40% 1.40% 17.80% 5.20% 5.00%

(0.50)% 9.00% 12.00% 13.50% 8.00% 12.00% 10.50%

Total

100.00%

100.00%

* Rates shown are net of the 2.75% assumed rate of inflation

Discount Rate: The discount rate used to measure the total TRS pension liability was 7.50%. The discount rate used to measure the PSERS pension liability was 7.30%. 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 1-percentage-point 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

$ 40,056,544.00 $ 23,996,209.00 $ 10,761,676.00

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 publicly available
at www.trsga.com/publications and http://www.ers.ga.gov/formspubs/formspubs.html.

- 32 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2019

EXHIBIT "I"

NOTE 15: SUBSEQUENT EVENTS
On February 5, 2020, the voters of Berrien County approved the following SPLOST question:
Shall the special 1 percent sales and use tax for education currently in effect in Berrien County be continued for a period of time not to exceed 20 calendar quarters and for the raising of not more than $8,000,000 for the purposes of acquiring, constructing, repairing, improving, renovating, adding to, extending, upgrading, demolishing, furnishing, and equipping school buildings and support facilities in the Berrien County School District useful or desirable in connection therewith, including acquiring any necessary property therefore, both real and personal, specifically including the following: (1) adding to, renovating, repairing, improving, furnishing,' and equipping existing school buildings and other buildings and facilities, including painting, paving, landscaping, installation of carpeting, flooring, and energy efficiency upgrades, equipping and furnishing cafeterias, and additional classrooms, including any necessary demolition; (2) adding to, constructing, renovating, furnishing, and equipping athletic facilities, including tennis courts, track facilities, and including any necessary demolition; (3) acquiring safety and security equipment; (4) acquiring instructional and administrative technology, equipment, and materials; (5) acquiring vocational, physical education, and fine arts equipment, including band instruments and uniforms; (6) acquiring buses, a cargo van, vehicles, and transportation and maintenance equipment; (7) acquiring energy savings equipment, including making installment and/or lease purchase payments; and (8) paying expenses incident to accomplishing the foregoing? If continuation of the tax is approved by the voters, such vote shall also constitute approval of the issuance of general obligation debt of the Berrien County School District in the principal amount of up to $6,000,000, repayable from the proceeds of the aforesaid sales and use tax, for the purpose of funding such portions of the above projects as may be acquired, constructed and equipped with the proceeds of general obligation debt.
None of these bonds were issued as of the date of this report.
In December 2019, a strain of coronavirus (COVID-19) began to spread worldwide, resulting in a severe impact to the United States economy in March 2020. The spread of COVID-19 has had a negative impact on virtually all businesses and individuals which comprise the tax base of all levels of government. The extent of this impact is uncertain but is expected to have negative results on financial operations, however the impact cannot be reasonably estimated at this time.

- 33 -

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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
2019 2018 2017 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

0.129275% $ 0.133391% $ 0.134715% $ 0.138107% $ 0.142682% $

23,996,209.00 $ 24,791,128.00 $ 27,793,207.00 $ 21,025,419.00 $ 18,025,989.00 $

110,445.00 $ 123,964.00 $ 115,534.00 $ 141,583.00 $ 126,337.00 $

Total

School District's covered payroll

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

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

24,106,654.00 $ 24,915,092.00 $ 27,908,741.00 $ 21,167,002.00 $ 18,152,326.00 $

15,471,486.02 15,396,280.01 14,840,954.07 14,678,797.25 14,658,454.23

155.10% 161.02% 187.27% 143.24% 122.97%

80.27% 79.33% 76.06% 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 SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

SCHEDULE "2"

Year Ended
2019 2018 2017 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% $ 0.00% $ 0.00% $ 0.00% $

-

$

-

$

-

$

-

$

-

$

284,831.00 $ 265,478.00 $ 329,822.00 $ 221,931.00 $ 191,701.00 $

Total

School District's covered payroll

284,831.00 $ 265,478.00 $ 329,822.00 $ 221,931.00 $ 191,701.00 $

604,308.42 572,426.40 542,515.95 565,558.84 564,085.19

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

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

N/A

85.26%

N/A

85.69%

N/A

81.00%

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 PROPORTIONATE SHARE OF THE NET OPEB LIABILITY
SCHOOL OPEB FUND FOR THE YEAR ENDED JUNE 30

SCHEDULE "3"

Year Ended
2019 2018

School District's proportion of the net OPEB liability

School District's proportionate share of the
net OPEB liability

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

Total

0.195160% $ 0.196905% $

24,804,237.00 $ 27,665,073.00 $

-

$ 24,804,237.00

-

$ 27,665,073.00

School District's coveredemployee payroll

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

$

14,660,480.08

$

14,499,379.47

169.19% 190.80%

Plan fiduciary net position as a
percentage of the total OPEB liability
2.93% 1.61%

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

SCHEDULE "4"

Year Ended
2019 2018 2017 2016 2015

Contractually required contribution

Contributions in relation to the contractually required contribution

Contribution deficiency (excess)

$

3,242,504.67 $

3,242,504.67 $

-

$

2,588,843.29 $

2,588,843.29 $

-

$

2,186,082.21 $

2,186,082.21 $

-

$

2,109,036.61 $

2,109,036.61 $

-

$

1,916,928.70 $

1,916,928.70 $

-

School District's covered payroll

$

15,573,698.33

$

15,471,486.02

$

15,396,280.01

$

14,840,954.07

$

14,678,797.25

Contribution as a percentage of covered
payroll
20.82% 16.73% 14.20% 14.21% 13.06%

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

- 38 -

BERRIEN COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND
FOR THE YEAR ENDED JUNE 30

SCHEDULE "5"

Year Ended
2019 2018 2017

Contractually required contribution

Contributions in relation to the contractually required contribution

Contribution deficiency (excess)

$

1,014,022.00 $

1,014,022.00 $

-

$

1,011,494.00 $

1,011,494.00 $

-

$

1,026,677.00 $

1,026,677.00 $

-

School District's coveredemployee payroll

$

14,410,060.78

$

14,660,480.08

$

14,499,379.47

Contribution as a percentage of covered-
employee payroll
7.04% 6.90% 7.08%

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

- 39 -

BERRIEN COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2019

SCHEDULE "6"

Teachers Retirement System

Changes of assumptions: On November 18, 2015, th-e Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The

expectation of retired life mortality was changed to RP 2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the

Society of Actuaries' projection scale BB (set forward one year for males).

-

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.

Public School Employees Retirement System
Changes of assumptions: On March 15, 2018, the Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for June 30, 2017 actuarial valuation. In addition, based on the Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date.
On-December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement and withdrawal. The expectation of retired life mortality was changed to the RP 2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (-set forward 3 years for males and 2 years for females).
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 H[SHULHQFH

School OPEB Fund
Changes of benefit terms: There have been no changes in benefit terms.
Changes of assumptions: June 30, 2017 valuation: the June 30, 2017 actuarial valuation was revised, for various factors, including the methodology used to determine how employees and retirees were assigned to each of the OPEB Funds and anticipated participation percentages. Current and former employees of State organizations (including technical colleges, community service boards and public health departments) are now assigned to the State OPEB fund based on their last employer payroll location: irrespective of retirement affiliation.
The discount rate was updated from 3.58% as of June 30, 2017 to 3.87% as of June 30, 2018.

- 40 -

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2019

SCHEDULE "7"

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 Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCIAL SOURCES (USES)
Operating Transfers From Other Funds Operating Transfers to Other Funds
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Adjustments

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

VARIANCE OVER/UNDER

$ 4,991,500.00 $ 4,991,500.00 $ 5,227,877.04 $

-

-

20,497.56

21,614,347.60

21,614,347.60

21,542,781.90

3,920,172.00

5,586,542.00

4,999,876.55

44,700.00

44,700.00

85,392.14

26,500.00

26,500.00

31,005.14

295,710.12

295,710.12

450,724.59

30,892,929.72

32,559,299.72

32,358,154.92

236,377.04 20,497.56 (71,565.70)
(586,665.45) 40,692.14 4,505.14
155,014.47
(201,144.80)

19,106,250.05
845,773.71 887,055.86 449,645.01 670,442.04 1,504,004.16 220,769.15 1,971,229.29 2,042,815.99 200,240.16
88,000.00 1,771,130.00
29,757,355.42
1,135,574.30

19,354,126.15
925,613.67 757,469.87 449,645.01 696,711.04 1,504,004.16 220,769.15 1,971,229.29 2,057,115.99 200,565.16
88,000.00 1,771,082.00
29,996,331.49
2,562,968.23

19,664,361.83
717,622.60 881,269.18 433,999.88 689,915.49 1,471,598.78 215,590.81 1,696,886.92 2,264,877.09 196,071.92 117,224.90 1,779,347.17
30,128,766.57
2,229,388.35

(310,235.68)
207,991.07 (123,799.31)
15,645.13 6,795.55
32,405.38 5,178.34
274,342.37 (207,761.10)
4,493.24 (29,224.90)
(8,265.17)
(132,435.08)
(333,579.88)

(1,135,674.30) (1,135,674.30)
(100.00) 6,746,952.89
-

8,940,972.94 (10,076,647.24)
(1,135,674.30) 1,427,293.93 6,746,952.89
(9,178.89)

(586,057.16) (586,057.16) 1,643,331.19 6,714,927.88
-

(8,940,972.94) 9,490,590.08
549,617.14 216,037.26 (32,025.01)
9,178.89

Fund Balances - Ending

$ 6,746,852.89 $ 8,165,067.93 $ 8,358,259.07 $

193,191.14

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not incude budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $353,032.36 and $348,088.62 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.

- 41 -

ASSETS
Cash and Cash Equivalents Accounts Receivable, Net
State Government Federal Government Other

BERRIEN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019
BERRIEN COUNTY COLLABORATIVE,
INC.

BERRIEN ACADEMY CHARTER SCHOOL

SCHEDULE "8" TOTAL

$

- $

108,644.68 $

108,644.68

128,855.23 18,742.72 17,489.74

-

128,855.23

-

18,742.72

-

17,489.74

Total Assets
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable Cash Overdraft Salaries and Benefits Payable
Total Liabilities
FUND BALANCES
Restricted Assigned
Total Fund Balances

$

165,087.69 $

108,644.68 $

273,732.37

$

112,468.82 $

4,940.32

-

117,409.14

7,117.33 $ -
74,812.32
81,929.65

119,586.15 4,940.32
74,812.32
199,338.79

4,387.22 43,291.33
47,678.55

26,715.03
26,715.03

4,387.22 70,006.36
74,393.58

Total Liabilities and Fund Balances

$

165,087.69 $

108,644.68 $

273,732.37

See notes to the basic financial statements.

- 42 -

BERRIEN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019

SCHEDULE "9"

REVENUES
Property Taxes State Funds Federal Funds Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services School Administration Maintenance and Operation of Plant Student Transportation Services Support Services - Central 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

$

- $

174,540.96 $

308,715.62

375,413.00

80,520.75

-

117,975.73

-

174,540.96 684,128.62
80,520.75 117,975.73

507,212.10

549,953.96

1,057,166.06

276,048.13
244,455.21 10,937.49 3,359.00 17,900.09 1,957.30 2,830.34
557,487.56
(50,275.46)

444,490.19
159,262.26 3,534.05 5,207.04 -
612,493.54
(62,539.58)

720,538.32
244,455.21 10,937.49
162,621.26 21,434.14 5,207.04 1,957.30 2,830.34
1,169,981.10
(112,815.04)

(50,275.46)
97,954.01

62,539.58 -
26,715.03

62,539.58 (50,275.46) 124,669.04

Fund Balances - Ending

$

47,678.55 $

26,715.03 $

74,393.58

See notes to the basic financial statements.

- 43 -

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2019

SCHEDULE "10"

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 Child Nutrition Cluster
Education, U. S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States Preschool Grants Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Migrant Education - State Grant Program Migrant Education - State Grant Program Rural Education Rural Education Student Support and Academic Enrichment Program Student Support and Academic Enrichment Program Supporting Effective Instruction State Grants Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies Twenty-First Century Community Learning Centers Twenty-First Century Community Learning Centers
Total Other Programs
Total U. S. Department of Education
Health and Human Services, U. S. Department of Child Care and Development Fund Cluster Pass-Through From Berrien County Department of Children and Family Services Promoting Safe and Stable Families
Labor, U. S. Department of Pass-Through from Alapaha Judicial Circuit Court Court Appointed Special Advocates

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555

195GA324N1099 $ 195GA324N1099

380,147.35 1,280,243.53
1,660,390.88

84.027 84.027 84.173 84.173

H027A170073 H027A180073 H173A170081 H173A180081

84.048 84.011 84.011 84.358 84.358 84.424A 84.424A 84.367 84.010 84.010 84.287 84.287

V048A180010 S011A170011 S011A180011 S365B170010 S365B180010 S424A170011 S424A180011 S367A180001 S010A170010 S010A180010 S287C170010 S287C180010

123,890.00 465,050.51
8,253.00 24,010.11
621,203.62
53,478.00 1,000.00
25,381.45 11,775.00 53,252.59
5,561.00 96,022.69 129,064.04 105,887.00 1,293,105.42 162,606.00 796,562.08
2,733,695.27
3,354,898.89

93.556 16.756

48,966.79 31,553.96

Total Expenditures of Federal Awards

$

5,095,810.52

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, 2019. 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 position 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 the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Note 3. Indirect Cost Rate 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.

- 44 -

BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUES
FOR THE YEAR ENDED JUNE 30, 2019

SCHEDULE "11"

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 School (6-8) Program Early Intervention 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 Midterm Hold Harmless Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement - State Bonds State Health Benefit Plan Employer Holiday Nursing Services Other State Programs Education Equalization Funding Grant Food Services Vocation Education Math and Science Supplements Preschool Disability Services School Safety Grant Teachers Retirement Vocational Supervisors
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Governor's Office of Student Achievement Innovation Fund
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

GENERAL FUND

GOVERNMENTAL FUND TYPES

CAPITAL

NONMAJOR

PROJECTS

GOVERNMENTAL

FUND

FUNDS

TOTAL

$

581,244.01 $

- $

- $

581,244.01

771,754.00 480,498.00 2,092,886.00 1,079,610.00 1,136,689.00 405,645.00 2,514,054.00 1,555,522.00 688,056.00 2,400,418.00 481,708.00 323,338.00 160,036.00
87,874.00 379,059.00 118,236.00
61,631.00 1,120.00
16,084.00
525,830.00 729,550.00 808,117.00
520,920.00 231,660.00 (178,605.00)
63,962.00
3,114,397.00 50,020.00
159,421.00 31,279.43 68,145.00 8,324.00 12,601.46 14,299.00
-
-
47,399.00
-
-

-
-
-
-
605,405.44
-
-
-
-

179,607.00 21,381.00 42,216.00 5,935.00 3,163.00 1,036.00 280.00 -
3,527.00 101,141.00
17,127.00
-
-

771,754.00 480,498.00 2,092,886.00 1,079,610.00 1,136,689.00 405,645.00 2,514,054.00 1,735,129.00 709,437.00 2,400,418.00 481,708.00 365,554.00 160,036.00
87,874.00 384,994.00 121,399.00
62,667.00 1,400.00
16,084.00
529,357.00 830,691.00 825,244.00
520,920.00 231,660.00 (178,605.00)
63,962.00
3,114,397.00 50,020.00
159,421.00 31,279.43 68,145.00 8,324.00 12,601.46 14,299.00

223,613.98
-

605,405.44 223,613.98
47,399.00

25,000.00 60,101.64

25,000.00 60,101.64

$ 21,542,781.90 $

605,405.44 $

684,128.62 $ 22,832,315.96

See notes to the basic financial statements.

- 45 -

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BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
FOR THE YEAR ENDED JUNE 30, 2019

SCHEDULE "12"

PROJECT

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

To reimpose the School District to raise not more

than $8,000,000.00 to (1) adding to, renovating,

repairing, improving, furnishing, and equipping

existing school buildings and other buildings and

facilities, including painting, paving, landscaping,

installation of carpeting, flooring, and energy

efficiency upgrades, equipping and furnishing

cafeterias, and an addition to the middle school

cafeteria, including any necessary demolition;

$ 1,000,000.00 $ 1,022,146.39 $

233,535.22 $

788,611.17 $

- $

-

(2) acquiring safety and security equipment;

-

-

-

-

-

-

(3) adding to, constructing, renovating, furnishing,

and equipping athletic facilities, including installing

field improvements, renovating the field house and

the football stadium, including the locker rooms,

and including any necessary demolition, and acquiring

locker room and weightlifting equipment and mats;

6,720,000.00

6,720,000.00

2,517,696.25

2,390,945.41

-

-

(4) acquiring instructional and administrative

technology, equipment, and materials;

50,000.00

50,000.00

-

-

-

-

(5) acquiring vocational, physical education, and

fine arts equipment, including band instruments

and uniforms;

50,000.00

50,000.00

-

-

-

-

(6) acquiring buses, a cargo van, vehicles, and

transportation and maintenance equipment; and

99,000.00

99,000.00

-

-

-

-

(7) paying expenses incident to accomplishing

the foregoing

81,000.00

81,000.00

1,000.00

-

-

-

ESTIMATED COMPLETION
DATE
6/30/2023 6/30/2023
6/30/2023 6/30/2023 6/30/2023 6/30/2023 6/30/2023

$ 8,000,000.00 $ 8,022,146.39 $ 2,752,231.47 $ 3,179,556.58 $

- $

-

(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 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. (4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows:

Prior Years $

79,324.44

Current Year

77,600.00

Total $

156,924.44

See notes to the basic financial statements.

- 47 -

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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

(This page left intentionally blank)

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400

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 GOVERNMENT AUDITING STANDARDS

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Berrien County Board of Education
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Berrien County Board of Education (School District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated October 13, 2020.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. We did identify a certain deficiency in internal control, described in the accompanying Schedule of Findings and Questioned Costs as item FS 2019-001, that we consider to be a material weakness.

(This page left intentionally blank)

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the School District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
School District's Response to Findings
The School District's response to the finding identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,

October 13, 2020

Greg S. Griffin State Auditor

(This page left intentionally blank)

Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Berrien County Board of Education
Report on Compliance for Each Major Federal Program
We have audited the Berrien County Board of Education (School District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2019. The School District's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the School District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit 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). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the School District's compliance.

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Opinion on Each Major Federal Program
In our opinion, the School District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2019.
Other Matters
The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying Schedule of Findings and Questioned Costs as items FA 2019-001 and FA 2019-002. Our opinion on each major federal program is not modified with respect to these matters.
The School District's response to the noncompliance findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
Report on Internal Control over Compliance
Management of the School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying Schedule of Findings and Questioned Costs as items FA 2019-001 and FA 2019-002, that we consider to be significant deficiencies.

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The School District's response to the internal control over compliance findings identified in our audit is described in the accompanying Schedule of Findings and Questioned Costs. The School District's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Respectfully submitted,

October 13, 2020

Greg S. Griffin State Auditor

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

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BERRIEN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2019

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FS 2014-001 Control Category: Internal Control Impact: Compliance Impact:
Finding Status:

Inadequate Controls over Financial Reporting Financial Reporting Material Weakness None
Unresolved

FS 2015-001 Control Category: Internal Control Impact: Compliance Impact:
Finding Status:

Inadequate Controls over Financial Reporting Financial Reporting Material Weakness None
Unresolved

FS 2016-001 Control Category: Internal Control Impact: Compliance Impact:
Finding Status:
FS 2017-001 Control Category: Internal Control Impact: Compliance Impact:
Finding Status:

Inadequate Controls over Financial Reporting Financial Reporting Material Weakness None
Unresolved
Inadequate Controls over Financial Reporting Financial Reporting Material Weakness None
Unresolved

FS 2018-001 Control Category: Internal Control Impact: Compliance Impact:
Finding Status:

Inadequate Controls over Financial Reporting Financial Reporting Material Weakness None
Unresolved

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BERRIEN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2019

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FA 2018-001

Improve Controls over Expenditures

Compliance Requirement:
Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Numbers:
Questioned Costs:

Activities Allowed or Unallowed Allowable Costs/Cost Principles Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 18185GA324N1099 18185GA324N1100 None identified

Finding Status:

Unresolved

Entity's response:

FA 2018-002
Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Numbers:
Questioned Costs:
Finding Status:
Entity's response:

Improve Controls over Equipment
Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 18185GA324N1099 18185GA324N1100 None identified
Unresolved

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SECTION IV FINDINGS AND QUESTIONED COSTS

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BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2019

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements
Type of auditor's report issued: Governmental Activities; General Fund; Capital Projects Fund; Debt Service Fund; Aggregate Remaining Fund Information

Unmodified

Internal control over financial reporting: Material weakness identified? Significant deficiency identified?

Yes None Reported

Noncompliance material to financial statements noted:

No

Federal Awards

Internal Control over major programs:

Material weakness identified?

No

Significant deficiencies identified?

Yes

Type of auditor's report issued on compliance for major programs: All major programs

Unmodified

Any audit findings disclosed that are required to be reported in

accordance with 2 CFR 200.516(a)?

Yes

Identification of major programs: CFDA Numbers

Name of Federal Program or Cluster

10.553, 10.555 84.287

Child Nutrition Cluster Twenty-First Century Community Learning Centers

Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low-risk auditee?

$750,000.00 No

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BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2019

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FS 2019-001 Control Category: Internal Control Impact: Compliance Impact: Repeat of Prior Year Finding:

Internal Controls over Financial Reporting Financial Reporting Material Weakness None FS 2018-001, FS 2017-001, FS 2016-001, FS 2015-001, FS 2014-001

Description: The School District did not have adequate internal controls in place over the financial statement reporting process.

Criteria: Management is responsible for having adequate controls over the preparation of financial statements in accordance with generally accepted accounting principles (GAAP). The School District's internal controls over GAAP financial reporting should include adequately trained personnel with the knowledge, skills and experience to prepare GAAP based financial statements and include all disclosures as required by the Governmental Accounting Standards Board (GASB).

GASB Statement No. 34, Basic Financial Statements Management's Discussion and Analysis for State and Local Governments (statement), requires governments to present government-wide and fund financial statements as well as a summary reconciliation of the (a) total governmental funds balances to the net position of governmental activities in the Statement of Net Position, and (b) total change in governmental fund balances to the change in the net position of governmental activities in the Statement of Activities. In addition, the statement requires information about the government's major and nonmajor funds in the aggregate to be provided in the fund financial statements.

Chapter II 2, Annual Financial Reporting of the Financial Management for Georgia Local Units of Administration provides that School Districts must prepare their financial statements in accordance with generally accepted accounting principles.

Condition: The following errors and omissions were noted in the School District's financial statements, note disclosures and supplementary information presented for audit:

Capital assets, non-depreciable was understated and expenditures were overstated by $1,919,865.11 due to the School District not properly recording expenditures related to an ongoing construction-in-progress project. This was a material misstatement to the governmentwide financial statements. Corrections were proposed by the auditor and accepted by the School District for these misstatements.
Nonmajor governmental fund state revenue and accounts receivable state revenue was overstated by $63,371.64 due to the entity incorrectly making an entry to the nonmajor opinion unit. This entry was material to the nonmajor governmental funds. In addition, operating grants and contracts and accounts receivable state revenue were overstated by $63,371.64 on the government-wide financial statements. Corrections were proposed by the auditor and accepted by the School District for these misstatements.
Nonmajor government fund state and federal revenues were understated and miscellaneous revenue was overstated by $105,520.75. In addition, operating grants and contracts were understated and miscellaneous revenue was overstated by $105,520.75 on the governmentwide financial statements. Corrections were proposed by the auditor and accepted by the School District for these misstatements.
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BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2019

Net position restricted capital projects was overstated, and net position restricted debt service was understated by $459,267.03 on the capital project fund financial statements. Corrections were proposed by the auditor and accepted by the School District for these misstatements.
Net investment in capital assets was understated and net position unrestricted was overstated by $10,307,551.39 on the government-wide financial statements. Corrections were proposed by the auditor and accepted by the School District for these misstatements.
The State Board of Education requires all school districts to submit a complete set of financial statements, ready for audit, by December 31. The School District's submission met this date, but included incomplete financial statements, disclosures, and supplementary information.
Numerous other audit adjustments and reclassifications were proposed and accepted by the client to properly present the School District's financial statements, note disclosures and supplemental information.

Cause: This was an oversight by entity personnel, and this should be resolved in the next audit period, fiscal year 2020.

Effect or Potential Effect: Material and significant misstatements were included in the financial statements presented for audit. Numerous adjustments were necessary in order for the School District's financial statements to be in conformity with generally accepted accounting principles.

Recommendation: The School District should strengthen their internal controls and preparation and review procedures over financial reporting to ensure that the financial statements, including disclosures, presented for audit are complete and accurate. These procedures should be performed by a properly trained individual(s) possessing a thorough understanding of GAAP, the applicable GASB pronouncements and knowledge of the School District's activities and operations. The School District should also consider implementing the use of a review checklist to assist in the review process over the financial statements.

Views of Responsible Officials: We concur with this finding.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FA 2019-001 Compliance Requirement:
Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Numbers:
Questioned Costs: Repeat of Prior Year Finding:

Improve Controls over Expenditures Activities Allowed and Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Significant Deficiency Nonmaterial Noncompliance U.S. Department of Education Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 195GA324N1099 195GA324N1099 None Identified FA 2018-001

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BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2019
III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
Description: A review of expenditures charged to the Child Nutrition Cluster (CFDA 10.553 and 10.555) revealed that the School District's internal control procedures were not operating appropriately to ensure that expenditures were appropriately reviewed, approved and documented.
Criteria: 2 CFR 200.403 prescribes the factors affecting allowability of costs and states in part that "costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles... (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity... (g) Be adequately documented..."
2 CFR 200.303(a) states in part that the "non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award... (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards."
Condition: A sample of 89 expenditures were randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. For 38 expenditures, evidence of review and approval was not reflected within the voucher package.
Cause: Deficiencies occurred due to management failing to effectively implement Federal guidelines pertaining to expenditures. The entity has new procedures and personnel in place and hopes this will be resolved in the next fiscal year.
Effect or Potential Effect: Failure to ensure that expenditures are reviewed for allowability exposes the School District to unnecessary risk of error and misuse of Federal funds. Additionally, the School District is not in compliance with the Uniform Guidance and Georgia Department of Education guidance.
Recommendation: The School District should review current internal control procedures related to Child Nutrition Cluster expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review. Furthermore, management should develop and implement a monitoring process to ensure that controls are properly implemented.
Views of Responsible Officials: We concur with this finding.
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BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2019

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FA 2019-002 Compliance Requirement: Internal Control Impact: Compliance Impact: Federal Awarding Agency: Pass-Through Entity: CFDA Number and Title: Federal Award Numbers:
Questioned Costs: Repeat of Prior Year Finding:

Improve Controls over Equipment Equipment and Real Property Management Significant Deficiency Nonmaterial Noncompliance U.S. Department of Agriculture Georgia Department of Education 10.553 and 10.555 Child Nutrition Cluster 195GA324N1099 195GA324N1099 None Identified FA 2018-002

Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over equipment and real property management as it relates to the Child Nutrition Cluster.

Criteria: 2 CFR 200.313(d)(1) states, "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property." In addition, 2 CFR 200.313(d)(2) states, "A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years."

Condition: The following deficiencies were noted when reviewing the Child Nutrition Cluster equipment listing and physically locating equipment items:

Property records did not include the following required components for several equipment items: (1) A serial number or other identification number, (2) who holds title, (3) the acquisition date, (4) cost of the property, (5) percentage of Federal participation in the project costs for the Federal award under which the property was acquired, and (6) use and condition of property.
There was no evidence that a physical inventory had been performed in either the current year or the previous year.
The location was reported incorrectly for one piece of equipment based upon physical inspection of the item.

Questioned Cost: None Identified

Cause: Deficiencies occurred due to management failing to effectively implement Federal guidelines pertaining to equipment and real property. The entity hopes this is resolved in the next fiscal year with new procedures and personnel in place.

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BERRIEN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2019 III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Effect or Potential Effect: Failure to maintain a complete and accurate equipment listing and reconcile results of the physical inventory performed to the property records exposes the School District to unnecessary risk of error and misuse of equipment and/or Federal funds. Additionally, the School District is not in compliance with the Uniform Guidance and Georgia Department of Education guidance. Recommendation: The School District should strengthen controls over Child Nutrition Cluster equipment to ensure that the equipment records are complete and accurate. Management should update the equipment listing to reflect all required information, including a description, an identifying number, the source of funding, the title holder, the acquisition date, the cost, the percentage of Federal participation in the project costs, the location, the use and condition, and any ultimate disposal data for each piece of equipment. Management should perform a physical inventory of equipment at least once every two years and reconcile the results of the physical inventory to the Child Nutrition Cluster equipment listing. Views of Responsible Officials: We concur with this finding.
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SECTION V MANAGEMENT'S CORRECTIVE ACTION

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