Audit report, Brantley County Board of Education, Nahunta, Georgia, year ended June 30, 1998

AUDIT REPORT BRANTLEY COUNTY BOARD OF EDUCATION
NAJnJNTA,GEORGLA YEAR ENDED JUNE 30, 1998

BRANTLEY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

7

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

9

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

10

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

DEBT SERVICE FUND

K

COMBINING BALANCE SHEET

28

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

BRANTLEY COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

30

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

31

3 SCHEDULE OF STATE REVENUE

33

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECT

34

5 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

35

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

6

OVERALL

37

7

BY PROGRAM

38

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

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

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

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 7, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Brantley County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Brantley County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. These general purpose financial statements are the responsibility of the Brantley County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statementS are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We did not observe the taking of either the Federal donated commodities inventory or purchased foods inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

98ARL-13B

* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to confonn to generally accepted accounting principles.

* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.

* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries

and the corresponding employer's cost of related benefits earned for contractual services completed

prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia

Department of Education for the State's share ofthese unrecorded salaries and related benefits were

not recorded as revenue in the year under review. Conversely, the similar expenditures and related

revenues for contractua1 services completed prior to June 30, 1997, were improperly recorded in the

year ended June 30,1998. To confonn to generally accepted accounting principles, revenues should

be recorded when available and measurable and expenditures should be recorded when incurred,

rather than when funds are received or disbursed.

.

The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.

In our opinion, except for the effects of such adjustments, ifany, on the Special Revenue Fund, as might have been detennined to be necessary had we been able to satisfY ourselves as to the accuracy of the food service inventories as discussed in the third paragraph and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Brantley County Board of Education as of June 30, 1998, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued our report dated May 7, 1999, on our consideration of the Brantley County Board ofEducation's internal control over financial reporting and our tests ofits compliance with certain provisions oflaws, regulations, contracts and grants.

The year 2000 supplementary infonnation on Schedule "1" is not a required part of the basic financial statements but is supplementary infonnation required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally ofinquiries of management regarding the methods ofmeasurement and presentation of the supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Brantley County Board ofEducation is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Brantley County Board of Education does business are or will become year 2000 compliant.

Our audit was perfonned for the purpose of fonning an opinion on the general purpose financial statements of the Brantley County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through L) and the financial schedules (Schedules 2 through 7), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-l33,

98ARL-l3B

Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph and except for the effects ofthe matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.

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.

RWH:jb 98ARL-13B

Respectfully submitted,
~JJ.~ Russell W. Hinton State Auditor

BRANTLEY COUNTY BOARD OF EDUCATION

BRANTLEY COUNTY BOARp OF EDUCATION COMBINED BAlANCE SHEET
AlL FUND TYPES AND ACCOUNT GROUP JUNE30 1998

~
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donaled Commod~ies Purchased Food
Amount Available in Debt Service Fund
Amount 10 be Provided In Future Years For Payment of: Bond Debl Cap~1 Lease Agreements

GENERAL FUND

$

720,446,56

30,000,00

146,735.94

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

6,735,69

1,686,200,02

411.230,45

36,141,53 8,598.50

Total Assets

897.182,50

462,706.17

1.686 200.02

LIABILITIES AND FUND EQUITY
~
Accounts Payable Salaries Payable Expired Granl Balances Payable Conlracts Payable Relainages Payable Cap~1 Lease A9reements General Obligation Bonds Payable
Total Liebil.
FUNDEOUITY
Fund Balances Reserved For Bus Replacemenl Funds For Continuation of Federal Programs For Debt Service For Endowment Corpus For Inventories Food Donated Comrnod~ies Purchased Food For Purpose of Bond Issue For State Cap~1 Outlay Projects Unreserved Designated for Scholarships Undesi9naled
Total Fund Equity

35,985,70 $

82,681.32 $ 146.511,52

38,212,72
3,160,00 158,955.79

$

35.985.70 $

229,192,84 $

200,328.51

$

125,675.86

$

2,682,46

36,141,53 8,598.50 $

876,434.12 609,437,39

735,521.14

186,090.82

$

861.196,80 $

233,513.33

0.00 1,485,871 ,51

Total Uabil. and Fund Equity

$

897.182.50 $

The notes 10 lhe general purpose financial statements are an integral part of Ihis slalemenl

-2-

462,706,17 $

1.686.200,02

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE NONEXPENDABLE TRUST FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 1998

JUNE30 1997

$

246,892.64

$ 2,660,275.11 $ 4,345,353.17

$

10,000,00

40,000.00

115,900.76

518,20

674,385,35

313,351.00

36,141.53 8,598.50

$

362,264.50

362,264.50

17,408.59 8,147.85
31,791.74

$

362793.60 $

10,518.20

3,837,735.50 308,943.95

3,837,735.50 308,943.95

4,453,208.26 282,592.55

4,508,943.95

7,928,344,44

9.451853.16

$

529,10

$

529.10

157,406.84

36,765,79

146,511,52

129,565.92

3,017.98

3,160.00

53,410.00

158,955.79

$

306,943,95

308,943,95

282,592.55

4,200,000.00

4,200,000.00

4 485,000.00

$

4,506,943.95

4,974,980.10 $ 4,990,352,24

$

362,264.50

$

0.00 362,264.50 $

$

362:793.60 $

10,000.00
518.20 0.00
10,518.20

$

125,675.66

2,662.46

362,264.50

10,000.00

111,416.69
31,791.94 10,000.00

36,141.53 6,596.50
876,434.12 609,437.39
518.20 921.611.96
2,953,364.34 $

17,406.59 8,147.85 3,057,899.00
513.28 1.224,321.37
4,461 ,500.92

10,518.20 $

4,506,943.95 $ 7 928 344.44 $ 9,451 ,853.16

-3-

BRANTLEY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
AlL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 1998

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

11,324,155,64 $ 10,224,373.00

1,618,871.87

1,396,598.31

$

800,424.60

$

133,264,87

4,792.51

2,954,958.36 509,092,18

2,305,105.98 372,620,93

$

133,264,87

805,217,11 $ 16,407,078.05

14,298,698.22

$ 2,245,060.78 $
$ 2,245,060,78 $ $ -2,111 795.91 $

285,000.00 188,137,50
1,607,05
474,744.55
330,472.56 $

9,447,985,85 $
404,573.86 654,950,10 449,685.43 263,904,91 762,494.33 63,551.69 1,063,641.39 925,046.80 23,554,43 44,114.11 1,086,727.74 2,305,548.10
397,787.79 196,368.75
1,607.05
18,073542.33
-1 ,666,464.28

8,474,642.52
380,483.79 636,586.27 350,179,43 227,517,34 779,896.70 144,353.81 1,040,054.78 899,423.35 33,861.16
13,246.80 943,091.63 359,658.99
289,071.27 102,257.96
207.10
14,674,732,90
-376,034.68

$ -2,111,795,91 $ 3,597,867.42

$

8,958.75

$

139,139.19

32,933,56

-32,933.56

3,200,000.00 -4,691.00
223,492.90 163,389,00 -163,389.00

$

139,139.19 $ 3,427,760.65

330,472.56 $ 31,791.94

-1,527,325,09 4,450,967.64

3,051,725.97 1,394,964.92

18,732.94 450.65

3,484.60 792.15

$ 1,485,871.51 $

362,264.50

2,942,646,14 $ 4.450,987.64

-5-

BRANTLEY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
BUDGET AND ACTUAL - INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 1998

EXHIBIT"C"

REVENUES

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

Slate Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES

$ 9,995,894,00 $ 10,614,008,29

23,640.00

1,000.00

2,125,872.00

2,154,533.76

60,000.00

90,678.53

$ 12,205,406.00 12,860,220.58

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
CapilalOutiay Debt Service
Total Expendfturas
Excess of Revenues over (under) Expendfturas
OTHER FINANCING SOURCES (USES)

$ 8,437,335.00 $ 8,252,738.50

320,040.00 447,977.00 372,466.00 209,528.00 755,799.00 85,993.00 1,034,967.00 641,979.00 33,702.00 10,000.00

341,409.13 506,939.80 373,571.78 239,866.20 761,816.14 -63,551.69 1,051,218.20 916,603.15 23,554.43
9,339.07

34,682.00

60,467.32 121.019.04

$ 12,584,468.00 $ 12,722,314.45

$ -379,062.00 $ 137,906.13

Other Sources Other Uses
Total Other Financing Sources (Usea)
Excess of Revenues end Other FInancing Sources over (under) Expendfturas and Other FInancing Uses $
FUND BAlANCE JULY 1 1997
Adjustmenta Food Inventory - Net Change In Period
Donated Commodities Purchased Foods

$
$
-379,062.00 $ 532,648.23
-122.87

139,139.19 -32.933.66 106,205.63
244,111.76 817,085.04

FUND BALANCE JUNE 30 1998

$

153,461.36 $

861.196.80

SPECIAL REVENUE FUND

ACTUAL

BUDGET

(BUDGET BASIS)

$

77,853.00 $ 710,147.35

774,977.54

1,617,871.87

283,590.18

280,356.27

1,116,420.72

2,606.375.49

$ 586,775.00 $ 1,195,247.35

16,575.00 55,728.00
28,294.00 323.00

63,164.73 148,010.30 76,113.65 24,038.71
678.19

3,600.00

12,423.19 8,243.66

8,606.00 910,246.72

34,775.04 1,066,727.74

1,608,147.72 $ 2,631,422.66

$ -491,727.00 $

-23,047.06

$

32,933.66

$

32,933.56

$ -491,727.00 $ 235,079.21 -5,632.14

9,866.50 204,443.24
18,732.94 450.65

$ -262,279.93 $ 233,513.33

The noles to the general purpose financlel stetementa are an integral part of this slatement. -6-

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "D"

STATEMENT OF REVENUES EXPENSES AND CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

YEAR ENDED JUNE 30 1998

OPERATING REVENUES None Recorded
OPERATING EXPENSES Current Scholarships Operating Income(Loss)
NONOPERATING REVENUES Interest Eamed Net Income (Loss)
FUND BALANCE JULY 1
FUND BALANCE JUNE 30

ENDOWMENT FUND
WILLIAM M. ROBERSON SCHOLARSHIP
FUND

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

$

0.00 $

0.00 $

~O~.O~O

$

618.31 $

618.31 $

620.01

$

-618.31 $

-618.31 $

-620.01

623.23

623.23

618.31

$

4.92 $

4.92 $

-1.70

10,513.28

10,513.28

10,514.98

$

10,518.20 $

10,518.20 $

10,513.28

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

BRANTLEY COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDA8LE TRUST FUND YEAR ENDED JUNE 30 1998

EXHIBIT"E"

Cash Flows from Operating Activities: Cash Paid for Scholarships
Cash Flows from Investing Activities: Interest Received on Investments
Net Increase (Decrease) in Cash Cash and Cash Equivalents - July 1
Cash and Cash Equivalents - June 30

ENDOWMENT FUND
WILLIAM M. ROBERSON SCHOLARSHIP
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30.1998 JUNE 30,1997

$

-618.31 $

-618.31 $

-620.01

618.31

618.31

620.01

$

0.00 $

0.00 $

0.00

0.00

0.00

0.00

$

0.00 $

0.00 $

0.00

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

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIIE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Brantley County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set ofaccounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
- 10-

BRANTLEY COUNTY BOARD OF EDUCAnON

EXlllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, generallongtenn principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other goverument units and/or other funds. This fund includes:
NONEXPENDABLE TRUST FUND William M. Roberson Scholarship Fund - the fund used to account for an endowment of which the corpus is to be invested and preserved intact with the resultant income to be used to provide scholarship aid to a graduating senior of the Brantley County School System.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All goverumental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (Le., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure ofavailable spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the goverumental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
All nonexpendable trust funds are accounted for on a flow ofeconomic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation of these funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
Governmental funds are accounted for using the modified accrual basis of accounting under which:

II -

BRANTI..EY COUNTY BOARD OF EDUCATION

EXHIBIT "Fit

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the fmal two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30,1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
BUDGET
The Brantley County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school
- 12-

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

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

- 13 -

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES RECEIVABLES

Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Brantley County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on September 30,1997 (levy date). Taxes were due on December 20,1997. The lien date for property taxes
was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are
reported as revenue in fiscal year 1998. The Brantley County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

Tax millage rates levied for the 1997 tax year (calendar year) for the Brantley County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

14.90 mills 1.25 mills

SALES TAXES

~mills

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $625,782.13 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $3,174,217.87 has been collected or on June 30, 2002 whichever occurs first.
INVENTORIES

FOOD INVENTORIES
Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food

- 14-

BRANTLEY COUNTY BOARD OF EDUCATION

EXInBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations or cash flows in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. Certain reclassifications have been made to the comparative data to conform to the current year classifications.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent of the public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
- 15 -

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS
Acceptable security for deposits consists ofanyone 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 ofindebtedness or other obligations ofthe counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State ofGeorgia, 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 ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Horne Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Horne Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $3,604,096.85. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name."
The Board's deposits are classified by risk category at June 30, 1998, as follows:

- 16-

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 2: DEPOSITS

Risk Category

Bank Balance

1

$ 453,070.20

2

3,151,026.65

3

0.00

Total

$ 3 604 096.85

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The Board is exposed to various risks ofIoss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

The Board has obtained commercial insurance for risk of loss associated with torts, assets, and errors or omissions. The Board has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the Board's insurance coverage in any of the past three years.

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to this risk in the past three years.

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

1997 1998

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

1,505.00 $

$

0.00 $

166.00 $

Claims Paid

End ofYear Liability

1,505.00 $

0.00

166.00 $

0.00

- 17-

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "FlO

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 4: RISK MANAGEMENT

The Board participates in the Georgia Education Workers' Compensation 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 Board pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Superintendent Each Principal and Assistant Principal Each Board Member Each Director

$ 100,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Brantley County Board of Education has entered into various lease agreements as lessee for computers, equipment, buses and a building. These lease agreements qualifY as capital leases for accounting purposes and, therefore, have been recorded at the present value of the future minimum lease payments as of the date of their inception.

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

Purpose

Interest Rates

Amount

General Government - Series 1979 General Government - Series 1997

6.75%

$ 1,175,000.00

3.90% - 4.60%

3.025.000.00

$ 4200000 00

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

- 18 -

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO TIm GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1997

$ 157,592.55 $ 4,485,000.00 $ 4,642,592.55

Retroactive Restatement of Prior Year Balances

125,000.00

125,000.00

Balance July I, 1997 Restated

$ 282,592.55 $ 4,485,000.00 $ 4,767,592.55

Additions

139,139.19

139,139.19

Deductions Payments

112,787.79

285,000.00

397,787.79

Balance June 30, 1998

$ 30824395 $420000000 $ 4 508 943 95

At June 30, 1998, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30
1999 2000 2001 2002 2003 2004-2008
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments

Capital Leases

General Obligation
Bonds

Total Debt

$ 110,907,34 155,967.59 30,967.59 30,967.59

$ 843,756.25 897,806.25 967,000.00
1,011,000.00 624,600.00 568.831.25

$ 954,663.59 1,053,773.84 997,967.59 1,041,967.59 624,600.00 568,831.25

$ 328,810.11 $ 4 912 99375 $ 5 24180386

19,866.16

$ 30894395

- 19 -

BRANTLEY COUNTY BOARD OF EDUCATION

EXlllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1998

Note 6: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of$224,864.07 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies.
Georgia Department of Education
Paid to the State Merit System of Personnel Administration
For Health Insurance ofNon-Certified Personnel In the amount of $187,124.44
Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$I,390.63
Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $36,349.00
Note 7: SIGNIFICANT COMMITMENTS
The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as ofJune 30, 1998, together with funding available:

The amounts described in this note are not reflected in the general purpose financial statements.
Note 8: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by
grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
- 20-

BRANTLEY COUNTY BOARD OF EDUCATION

EXHffiIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 9: RETIREMENT PLANS

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

IRS CONlRmUTIONS REQUIRED AND MADE
Employees ofthe Board who are covered by IRS are required by State statute to contribute 5% of their gross earnings to IRS. The Board makes monthly employer contributions to TRS at rates adopted by the IRS Board ofTrustees in accordance with State statute and as advised by their independent actuaIy. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year
1998 1997 1996

Percentage Contributed
100% 100% 100%

Required Contribution
$ 1,019,712.73 $ 931,792.75 $ 836,079.19

- 21 -

BRANTLEY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30 1998

Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities FUND EqUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general purpose financial statements. -22 -

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 171.314.43

67.339.06 $

84.194.00

36.141.53 8,598.50

$

283,393.52 $ = __84..,=19;.;4.-.0"",0

$

5.386.69

$

17,737.63

27.419.05

34.825.04

51,388.26

$

52,562.67 $ _ _.::.84""".:,:19:.:4c:.::'0;.;:.0

$

36,141.53

8.598.50

186.090.82 $

$ 230.830.85 $

--"0c:.::.O;.;:.O --"0c:.::.0;.;:.0

$ 283.393.52 $ _ _,;;84,;0.;,;194;.;,;,;.0_0

EXHIBIT"G"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS JUNE 30, 1998 JUNE 30,1997

$

171,314.43 $

174,960.24

$ 219,605.14 $

40,092.25

411,230.45

197,151.86

36,141.53 8,598.50

17,408.59 8,147.85

$

219,605.14 $

40,092.25 $

627,284.91 $

397,668.54

$ 128,974.09 $ 27,650.35 60,298.22
$ 216,922.66 $

30,217.96 $ 9,874.29
40,092.25 $

164,578.74 $ 82,681.32 146,511.52
393,771.58 $

31,662.39 28,979.01 129,565.92
3,017.98
193,225.30

$

2,682.48

0.00 $

$

2,682.48 $

$

2,682.48

0.00 0.00 $

36,141.53 $ 8,598.50
186,090.82
233,513.33 $

17,408.59 8,147.85
178,886.80
204,443.24

$ 219,605.14 $

40,092.25 $

627,284.91 $

397,668.54

~23 -

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

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services 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
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and' Other Financing Sources over (under) Expendijures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30
See notes to the general purpose financial statements.
-24 -

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

65,921.00 $

729,654.49

280,356.27

$ 1,075,931.76 $

542,863.35 542,863.35

$ 473,495.53
48,675.23 8,904.67

$ 1,068,727.74

12,005.19 306.29

$ 1,068,727.74 $_--=54..:.;3",,3:.:8;=.6';=.9,,-1

$

7,204.02 $

-523.56

$

7,204.02 $

204,443.24

18,732.94 450.65

523.56
0.00 0.00

$ 230,830.85 $

0;;;.0_.0

EXHIBIT"H"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30,1997

$

1,363.00 $

100,000.00 $

710,147.35 $

565,723.71

888,217.38

1,817,871.87

1,362,692.31

280,356.27

266,722.06

$

889,580.38 $

100,000.00 $ 2,608,375.49 $ 2,195,138.08

$ 689,990.16 $

31,761.66 $ 1,195,247.35 $ 745,084.45

13,956.50 102,862.48 76,113.65 24,038.71
678.19
418.00 8,236.72
3,013.49

533.00 36,243.15
6.93 31,455.26

63,164.73 148,010.30 76,113.65 24,038.71
678.19
12,423.19 8,243.65
34,n5.04 1,068,727.74

78,793.79 176,667.59
4,819.39 594.96 39.02
45,967.66 7,634.15 2,500.00 3,130.30
943,091.63

60,112.n 5,827.23

$

919,307.90 $

100,000.00 $ 2,631,422.55 $ 2,074,262.94

$

-29,727.52 $

0.00 $

-23,047.06 $

120,875.14

32,410.00

$

2,682.48 $

0.00

32,933.56

0.00 $ 0.00

9,886.50 $ 204,443.24

120,875.14 79,291.35

18,732.94 450.65

3,484.60 792.15

$

2,682.48 $

0.00 $ 233,513.33 $ 204,443.24 -25-

BRANJl.EY COUNTY BOARD OF EDUCATION COMBINING BAlANCE SHEET CAPITAL PROJECTS FUND JUNE 30 1998

EXHIBIT "I"

~ Cash and Cash eqUivalents
LIABILITIES AND FUND EqUITY ~
Accounts Payable Contracts Payable Relalnages Payable
Totaillabilltles FUNDEOUITY
Fund Balances Reserved For Purposes of Bond Issue For State Capital Outlay Projects Unreserved Undesl9natad Tolal Fund equity
Tolaillabillties and Fund Equity

REGULAR 0.00

BOND PROCEEDS
1.068 872.71

LOTTERY PROJECT
617,327.31

TOTALS

JUNE 30 1998

JUNE 30 1997

1 686,200,02

3 651 ,077.42

37,122,80 $ 3,160.00 152,155.79
192438.59

1,089.92 6 800.00 7,889,92

38,212,72 3,160.00
158,955.79
200328.51 $

53,410.00 53410.00

$

876,434.12

0,00 0.00

0,00 876434.12

609,437.39 0.00
609,437,39

876,434.12 $ 609,437.39
0.00
1 485,871.51

3,057,899.00
539,768.42 3597,667.42

0,00 $ 1,068:872.71

617 327.31 $

1,686.200.02 $

3.651.077.42

see notes to the general purpOse financiel statements.

-26-

BRANTLEY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PRQJECTS FUND YEAR ENDED JUNE 30 1998

EXHIBIT"J"

~
Other Funds
EXPENDITURES
Current Support Services Business Administration
CapitalOuUay Land and Land Improvements Building and Building Improvements Equipment
Total Expandituras
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from General Obligation Bonds Par Value Discount on Bonds Sold
Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BAlANCE JULY 1

REGULAR

BOND PROCEEDS

LOTTERY PROJECT

TOTALS

YEAR ENDED

JUNE 30 1998

JUNE 30 1997

29320.24 $

103944.63 $

0.00 $

133264.87 $

13457.22

0.00

2,079,950.95 6n3.22

0.00

2086724.17

29320,24 $ -1 982779.64

56,721.00 101,615.61
158336.61 -158336.61

56,721.00 2,181,566.56
6773.22
2245060.78
-2 111 795.91

84,000.00 74,820.00 158820,00 -145362.78

-569 088.66 $ -569088.66 $

-198685.34 -198685.34

-539,768.42 $ -2,181,464.88

539768.42

3057899.00

767,774.00 $ 767774.00

767,774.00 -767774.00
0.00

609,437.39 0.00

-2, 111,795.91 3597,667.42

3,200,000.00 4,691.00
216,799.00 -53410.00
3358698.00
3,213,335.22
384332.20

FUND BALANCE JUNE 30

0.00 $

876434.12 $

609437.39 $

1 485871.51 $

3,597667.42

See notes to the general purpose financial sta~ments.

-27 -

BRANTLEY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30 1998

EXHIBIT"K"

ASSETS Cash and Cash Equivalents Accounts Receivable
Tetal Assets

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1998

JUNE 30, 1997

$

249,926.54 $

249,926.54 $

28,710.19

$

8,922.77

106,977.99

115,900.76

3,081.75

$

8,922.77 $

356,904.53 $

365,827.30 $

31,791.94

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft

$

Accounts Payable

Total Liabilities

$

FUND EQUITY

Fund Balances

Reserved

For Debt Service

$

Unreserved

Undesignated

Total Fund Equity

$

Total Liabilities and Fund Equity $

3,033.70 $
3,033.70 $

$ 529.10
529.10 $

3,033.70 529.10
3,562.80

5,889,07 $ 0.00
5,889.07 $

356,375.43 $ 0.00
356,375.43 $

362,264.50 $ 0.00
362,254.50 $

8,922.77 $

356,904.53 $

365,827.30 $

31,791.94 0.00
31,791.94
31?91.94

See notes to the general purpose financial statements.

-28-

BRANTLEY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30 1998

EXHIBIT"L"

~ Taxes Other Funds
Total Revenues
EXPENDITURES

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

$

174,642.47

2,016,36

825,782.13 $ 2,776.15

800,424,60 4,792.51

176,658,83 $

628,558,28

805,217.11 $

40,994.60 1,070.16
42,064.76

Debt Service Principal Interest Paying Agent Fees

110,000,00 83,025.00 577.95

Total Expenditures

$

193,602.95

Excess of Revenues over (under) Expenditures

-16,944,12

OTHER FINANCING SOURCES

175,000,00 $ 105,112.50
1,029.10
281,141.60 $
347,416.68

285,000,00 188,137,50
1607,05
474,744,55
330,472,56 $

100,000.00 90,112,50 207,10
190,319,60
-148,254.84

Accrued Interest on Bonds Sold

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$

FUND BALANCE JULY 1

-16,944,12 $ 22,833,19

347,416,68 $
8,95~,75

330,472,56 $ 31,791,94

8,958.75
-139,296.09 171,088.03

FUND BALANCE JUNE 30

$

5,889.07 $

356,375,43 $

362,264.50 $

31,791,94

See notes to the general purpose financial statements.

-29-

BRANTLEY COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30. 1998

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

See notes to the general purpose financial statements. - 30-

BRANTLEY COUNTY BOARD OF EDUCATION SCHEPULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDEp JUNE 30 1998

SCHEDULE ''2"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

A9ricu~ure, U. S. Department of Pass-Through from Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1) Nutrition Education and Training Program Pass-Through from Office of School Readiness Child and Adult Care Food Program 1998 Contract

. 10.553 . 10.555
10.550 10.564
10.558

N/A $ 173,342.40

NlA

474,569.45 $

NlA

72,359.16

NlA

5,000.00

(2)
996,368.58 (3) 72,359.16 (2)

N/A

4,383.48

(2)

Total U. S. Department of Agricu~re

$ 729,654.49 $ 1,068,727.74

Education, U. S. Department of Pass-Through from Georgia Department of Education Elemenlary and Secondary Education Act Tille I
Grants to Local Educational Agencies
1998 Grant Titiell
Eisenhower Professional Development 1998 Grant
TitieVI Innovative Education Program Strategies 1998 Grant
Goals 2000 Slale and Local Education Systemic Improvement Grants 1998 Grant
Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant
Vocational Education - Basic Grants to Slales High School Program Basic Grant 1997 Grant 1998 Grant Tech-Prep Education 1998 Grant

84.010 84.281 84.298
84.276
84.027 84.173
84.048 84.048 84.243

NlA $ 375,758.25 $

375,758.25

NlA

11,875.00

11,875.00

NlA

15,525.00

15,525.00

N/A

192,453.48

189,nl.QQ

N/A

152,849.64

152,849.64

NlA

42,286.01

42,286.01

N/A

1,000.00

1,000.00

NlA

24,390.00

24,390.00

NlA

50,000.00

60,000.00

-31-

BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Educetion, U. S. Department of Pass-Through from Okefenokee Regional Educational Service Agency Safe and Drug-Free Schools 1998 Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84.186

N/A

$

13.080.00 $ _ _--"'13"',0",8",0"".0",,0

$ 889.217.38 $ _ _",88",6""5",,34,,,.9=0

Total Federal Financial Assistance N/A = Not Available

$ 1.618.871.87 $_....1...9.""5.5.,_28"'2...6.4..

Notes to the Schedule of Exoenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dUring the current fiscal year.
(2) Expenditures for the Child and Adutt Care Food Program, the Nubition Education and Training Program, and the School Breakfast Program were not maintained separately and are inciuded in the 1998 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.

Major Programs are identified by an asterisk (oJ in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipient.

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

See notes to the general purpose financial statements.

-32-

BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 1998

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Speciai Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment At-Risk Summer School Program Environmental Science Program Health Insurance Mentoring Program Mentor Teacher Program Preschool Handicapped Program PSATExams Remedial Summer School Program Student Records Teachers' Retirement Lottery Programs Instructional Technology Assistive Technology Classroom Technology
Georgia Foresby Commission Wooden Bridge Grant
Human Resources, Georgia Department of Family Connection
Medical Assistance, Georgia Depsrtment of Heaith Check Grant
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
see notes to the general purpose financial statements.

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 5,643,847.00 789,682.00 249,333.00 237,175.00 74,792.00
1,621,332.00
438,964.00 146,877.00 218,784.00 289,568.00 78,477.00 166,265.00 24,147.00 57,684.00 -618,517.00 851,546.00
$
53,081.00 9,493.18
500.00 187,124.44
8,500.00 3,948.00 23,992.00
154.48 3,706.38 5,064.00 1,390.63
10,000.00
749.18
36,349.00

$
65,921.00 1,363.00

5,643,847.00 789,682.00 249,333.00 237,175.00 74,792.00
1,621,332.00
438,964.00 146,877.00 218,784.00 289,568.00 78,477.00 166,265.00 24,147.00 57,684.00 -618,517.00 851,546.00 65,921.00
1,363.00
53,081.00 9,493.18 500.00
187,124.44 8,500.00 3,948.00
23,992.00 154.48
3,706.38 5,064.00 1,390.63

6,686.00 77,508.00

6,686.00 77,508.00

10,000.00

100,000.00

100,000.00

458,669.35

749.18 458,689.35

36,349.00

$ 10,614,008.29 $

710,147.35 $ 11,324,155.64

-33-

BRANTLEY COUNTY BOARO OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECT
YEAR ENDEO JUNE 30 1998

SCHEDULE "4"

A new Waynesville Elementary Scnool, renovations and the
addition of four classrooms at Brantley County Middle School, renovations and improvements at Brantley County High School consisting of three science classrooms, laboratories, a media center, an addition to the gymnasium with new bleachers, construction of a girls' softball field, renovations to existing facilities. renovations to the gymnasium and physical education facilities at Hoboken and Nahunta Elementary SChools

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED IN PRIOR
YEARS

3,800,000.00

3,Boo,OOO.00

2,350,173.28 $

....::0"'.00"-

(1) The Board's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.
(2) The Boards' current estimate of total cost for each project. Includes all cost from project inception to completion.
(3) The voters of Brantley 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 project.

See notes to the general purpose financial statements.

-34 -

BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30 1998

SCHEDULE "5"

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Maintenance and Operation of Plant other Support Services

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

TOTAL

6,686.00 $

77,508.00 $

389,301.53 $
48,675.23 8,904.67
12,005.19 306.29

473,495,53
48,675.23 8,904.67 12,005.19 306.29

Total Expendilures

$ _ _-.:6::".,6::,:8:;:6.::.0:::,0

77,508.00

459,192.91 $

543,386.91

RECAP:
Salaries and Benefits Pre-Kindergarten Program
Other Expendilures Instructional Technology Assistiva Technology Classroom Technology Pre-Kindergarten Program

$

389,133.29

6,686.00 77,508.00 70,059.62

$

543,386.91

See notes to the general purpose financial statements.

-35-

BRANTLEY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUNp - QUALITY BASIC EDUCATION pROGRAMS YEAR ENpED JUNE 30 1998

SCHEDULE "6"

Minimum Expenditure Requirements (Total Allotment) Expenditures on Combined Program Basis
Salaries Operations
Less: Expenditures for Media Center Programs in Excess of Tolal Media Allotment
Expendnures per Audn
Amount of Underexpenditure for Tolal Allotment

See notes to the general purpose financial statements. - 37 -

BRANTLEY COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS. BY PROGRAM
GENERAL FUND - QUALITY BASIC EPUCATION PROGRAMS YEAR ENDED JUNE 30 1998

GENERAL ANp CAREER EDUCATION PROGRAMS Kindergarten (') Grades 1-31') Sub-Total- K-3 Grades 4 - 5 (') Grades 6 - 8 (') Grades 9 -12 (') High School laboratories (0) Vocational Education Laboratories (0) Total General and Career Education Programs
SPECiAl EDUCATION PROGRAMS Regular Programs Category II (') Category III (') CategorylV(') Sub-Total- Regular Category VI (Gifted) (') Total Special Education Programs
REMEDIAL EDUCATION PROGRAM r> Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS Sateries OperaJiona Total Media Canter Programs

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL ...J!.... ORIGINAL

MID-TERM

587,541.00 1,593,137.00 2,180,678.00 90
720,881.00 90 1,293,148.00 90
638,477.00 90 453,306.00 90 357,377.00 90 5,643,847.00

528,788.90 1,433,823.30 1,962,610.20
648,n4.90 1,163,633.20
574,629.30 407,975.40 321,639.30 5,079,462.30

-25,187.00 -18,058.00 -43,243.00 -19,681.00 18,147.00 30,540.00 20,244.00 12,038.00 18,045.00

722,764.00

650,487.60 $

132,390.00

$

722,764.00 90

650,487.80

88,918.00 90

60,226.20

789,882.00

710,713.80

249,333.00 90 $

224,399.70

6,682,882.00

$ 6,014,575.80

132,390.00 6,196.00
138,588.00 -14,887.00 141,764.00

191,265,00 90 45,910,00 90
237,175.00

172,138.50 $ 41,319.00
213,457.50 $

245,00 732.00
9n.00

Total Fourteen Weighted end MedIa Canter Programs

6,92M37.oo

6,228,033.30

142,741.00

STAFF DEVELOPMENT PROGRAMS Coal of Inmellon Professional Development

21,710.00 53,082.00

21,710.00 53,082.00

588.00 0.00

Total Staff Development Programs (') identifies Fourteen welghlBd Programs, see noIellto 1he general purpose financial statemenlll.

74,792.00 100 $

74,792.00 $

588.00

- 38 -

SCHEDULE"r

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

503,599.90

593,479.41

28,123,54

621,602.95

1,415,767.30

1,626,902.77

100,736,39

1,727,639.16

1,919,367,20

2,220,382,18

128,859,93

2,349,242,11

0.00

829,093,90

732,578,36

44,749,38

777,327.74

0.00

1,181,980.20

1,221,850,10

64,268,31

1,286,118,41

0.00

605,189.30

762,521,40

35,197.65

797,719.05

0.00

428,219,40

519,102,87

28,040,00

547,142,87

0.00

333,677.30

392,859.25

52,243,28

445,102,51

0,00

5,097,507,30

5,849,294.16

353,358.53

6,202,652.89

782,877,60 $

104,954,77 732,097.58
13,443.99

2,641,15 10,911.47 1,883.88

107,595.92 743,009.15
15,127.87

782,877,80 $

850,496,44

15,236,50

865,732,94

0.00

58,422,20

127,002,88

2,691,72

129,694.60

0.00

849,299.80 $

977,499.32

17,928,22

995,427.54

209,532,70 $

246,120.93

3,844.09

249,965.02

0.00

6,156,339,80 $ 7,072,914.41

375,130.64

7,448,045.25

172,383.50 $

309,898,11

309,898,11

0,00

42,051,00

54,647,98

64,647,98

0,00

214,434.50 $

309,898,11

54,647.98

354,546,09

6,370,774,30 $

713821812.52

429,778.82 $ 7.812,591.34 $

0.00

22,298.00 53,082.00
75,380.00

50,550.09 30,081.75

50,550,09 30,081.75

80,831.84 $ _ _.:8::;0,;:,6;:,31:;;.84;;;,

0.00

- 39 -

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HtNI'ON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
May 7, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Brantley County Board ofEducation
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements ofBrantley County Board ofEducation as of and for the year ended June 30, 1998, and have issued our report thereon dated May 7, 1999. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph,
we conducted our audit in accordance with generally accepted auditing standards and the standards applicable
to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods
inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as
inventories through alternative procedures,
Compliance
As part of obtaining reasonable assurance about whether Brantley County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion, The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

98YB-40

Internal Control Over Financial Reporting
In planning and perfonning our audit, we considered Brantley County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the fInancial statements and not to provide assurance on the internal control ov~r financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to signifIcant defIciencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Brantley County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6131-98-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of perfonning their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above, is considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~ . QQ. L.0.4~ Russell W. Hinton State Auditor
RWH:jb 98YB-40

RUSSELL W. H,NTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
May 7, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Brantley County Board of Education
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-I 33
Ladies and Gentlemen:
Compliance
We have audited the compliance of Brantley County Board of Education with the types of compliance
requirements described in the u.s. OjJice ofManagement and Budget (OME) Circular A-133 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Brantley County Board ofEducation's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Brantley County Board of Education's management. Our responsibility is to express an opinion on Brantley County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-B3, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-l33 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 Brantley County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal detennination on Brantley County Board of Education's compliance with those requirements.

98SA-10

In our opinion, the Brantley County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1998.
Internal Control Over Compliance
The management of Brantley County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Brantley County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
q ...!X2 w. 4-. Russell W. Hinton State Auditor
RWH:jb 98SA-IO

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

BRANTI.EY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6131-93-04 6131-94-02 6131-94-04 6131-96-02 FS-613 1-97-01

Further Action Not Warranted Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Partially Resolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses

CORRECTIVE ACTIONIRESPONSES

EMPLOYEE COMPENSATION Salary Overpayments Amount: $1,686,00 Finding Control Number: 6131-94-02

The Board will not take action to secure reimbursement for the overpayments.

EMPLOYEE COMPENSATION Salary Overpayment Amount: $128,07 Finding Control Number: 6131-94-04

The Board will not take action to secure reimbursement of this overpayment.

EMPLOYEE COMPENSATION Employee Overpayment Amount: $321.52 Finding Control Number: 6131-96-02

The Board is recouping this overpayment at the rate of $26.74 per month. (September 98-August 99)

- 1-

BRANTI..EY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30, 1998
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6131-97-01 The Board of Education of Brantley County has determined that it is not economically feasible at this time to maintain a separate General Fixed Assets Account Group from the primary accounting system provided by the Department ofEducation. Although the Board realizes the significant role the General Fixed Assets Account Group has on the financial statements it has decided not to take any action at this time. The Board hopes that this issue will be addressed in the accounting system software updates issued by the Department of Education in the future,
-2-

SECTION IV FINDINGS AND QUESTIONED COSTS

BRANTLEY COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998

SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Brantley County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Brantley County Board of Education disclosed a financial statement reportable condition related to the following control category.

General Fixed Assets

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

3. Noncompliance Material to the Financial Statements The audit ofthe Brantley County Board ofEducation disclosed no instances of noncompliance that were deemed to be material to the financial statements.

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Brantley County Board of Education did not disclose any reportable conditions in internal control over major programs.

5. Type of Reoort Issued on Compliance for Major Programs The auditor's opinion on the Brantley County Board of Education's report on compliance with requirements applicable to major programs was unqualified.

6. Audit Findings Required to be Reported by Section .510Ca) ofOMB Circular A-133 The Brantley County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program

8. Type "A" Program Dollar Threshold
The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee

The Brantley County Board of Education was audited as a low risk auditee based on a waiver granted

by the U. S. Department of Education.

.

-I-

BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
II FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-6131-98.01 The Brantley County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose fmancial statements of the Board being incomplete and not in accordance with the generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS No matters were reported.
-2-