Brantley County Board of Education, Nahunta, Georgia, report on audit of financial statements of the fiscal year ended June 30, 2001

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BRANTLEY COUNTY BOARD OF EDUCATION - TABLE OF CONtENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

7

D

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

8

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

9

F NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

11

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

28

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

30

2 SCHEDULE OF STATE REVENUE

32

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

33

BRANTLEY COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

34

5

BY SITE

35

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

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

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

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S. w.. SUite 2 J4
Atlanta. GeorgIa 30334-8400
May 17,2002

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, 2001, 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 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 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, 2001, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.

2001ARL-13

As described in the notes to the general-purpose fmancial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to 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 of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were improperly recorded in the year ended June 30, 2001. 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 detennined, but are beiieved to be material.

In our opinion, except for the effects of such adjustments, if any, on the Special Revenue Fund, as might have been detennined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe 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 ofthe Brantley County Board ofEducation as ofJune 30, 2001, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in confonnity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated May 17,

2002, on our consideration of the Brantley County Board of Education's internal control over

financial reporting and our tests of its compliance with certain provisions of laws, regulations,

contracts and grants. That report is an integral part of an audit perfonned in accordance with

Government Auditing Standards and should be read in conjunction with this report in considering the

results of our audit.

.

2001ARL-13

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 J) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States. Local Governments. and Non-Profit Organizations. are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such infonnation has been subjected to the auditing procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effect ofadjustments, ifany, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy ofthe food service inventories as discussed in the third paragraph, and except for the effects ofthe matters referred to in the fourth paragraph, such infonnation is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a pennanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
espectfully submitted,
W~
Ru ell W. Hinton State Auditor
RWH:gp 2001 ARL-I 3

BRANTLEY COUNTY BOARD OF EDUCATION

- - - - - - - - - - - - ---- --- -- --
BRANTLEY COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 2001

ASSETS
Cash and Cash Equivalents
Investments
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount Available in Debt Service Fund
Amount to be Provided in Future Years For Payment of: Bond Debt Capital Lease Agreements
Total Assets

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

561,830,83 $

77,169,08 $

306,931,11

30,000,00

164,708,63

176,125,26

42,086.37 11,191.10

$

756,539.46 $

306,571.81 $

306,93111

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Conbnuabon of Federal Programs For Debt Service For EndOMnnentCcwpus For Inventones Food Donated Commodities Purchased Food For State Capital Outlay Projects Unreserved Designated for Scholarships Deficit Undeslgnated
Total Fund EqUity

$

77,840,72

210,681,64

$ _---=2~88~,5~2:2~.36~

$

42,086,37

11,191.10

$

306,931,11

-35,228,02

$

756,539,46

000

000

$

756,539.46 $

18,049.45 $

306,931,11

Total Liabilities and Fund Equity

$

756,539.46 $

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

306,571,81 $ -====3..0..6.=,90=31=,1=1=

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE NONEXPENDABLE TRUST FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2001

JUNE 30, 2000

$

307,021.81

$ 1,252,952.83 $ 1.363,674.59

428,108.00 $

10,000.00

468,108.00

455,000.00

174,099.89

515.30

515,449.08

658,096.79

$

909,229.70

42,086.37 11,191.10
909,229.70

38,679.84 10,885.93
761,025.99

1,095,770.30 271,001.69

1,095.770.30 271,001.69

2,073,974.01 351,273.46

$

909,229.70 $

10,515.30 $

2,276,001.69 $ 4,565,789.07 $ 5,712,610.61

$

77,840.72 $

168,032.43

210,681.64

217,790.33

12,049.88

$

271,001.69

271,001.69

351,273.46

2,005,000.00

2,005,000.00

2,835,000.00

$

2,276,001 69 $ 2,564,524.05 $ 3,584,146.10

$

909.229.70

$

0.00

$

909,229.70 $

$

909,229.70 $

10,000.00
515.30 0.00
10,515.30

$

1,254.30

16.000.00

$

909,229.70

761.025.99

10,000.00

10,000.00

42,086.37 11,191.10 306,931.11

38,679.84 10,885.93 18,161.24

515.30 -35,228.02 756,539.46

516.70 1,271,940.51

$ 2,001,265.02 $ 2,128,464.51

10,515.30 $

2,276,001.69 $ 4,565l89.07 $ 5,712,610.61

-3-

BRANTLEY COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAl FUND TYPES YEAR ENDED JUNE 30, 2001

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support ServiceS Pupil Services Improvement of Instructional Services Educational Media ServiceS General Adminrstratlon School Administration Business Administration Maintenance and Operation of Plant Student Transportation ServiceS Central Support Services Other Support Services Food Services Operation
Capital Outlay DebtSerYIce
Principal Interest PaYIng Agent Fees
Total expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES IUSES)
Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) expenditures and Other FinanCIng Uses
FUND BALANCE JULY 1
Food Inventory Net Change In Period Donated Commodities Purchased Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 13,873,245,59 $
2,670,874,91 51,728,08
$ 16,595,848.58 $

739,928.70 1,767.204,84
341,897,15
2,849,030,69

$ 11,105,687,44 $
346,437,79 396,406,88 490,161.26 326,297,64 1,145,052,29 90,283,50 1,503,981,51 1,145,545.42
15,351,30 2,044.09
33,567.00
80.271,77 19,935,20

1,404,334,24
121,323.29 70,499,50
3,381.17 3,247,20 2,126.19
15,321.59 8,618,95
3,007,74 1,293,176,68
2,750.00

$ 16,701,023.09 $

$

-105,174.51 $

2,927,786,55 -78,755.86

$

-383,953,00

$ -383,953.00

$

-489,127,51 $

1,245,666,97

-78,755,86 93,093,61

3,406.53 305,17

FUND BALANCE JUNE 30

$

The notes to the general-purpose finanCial statements are an Integral part of this statement.

-4-

756,539,46 $ ====1=8=,O4=9=.4=5=.

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 14,613,174.29 $ 13,349,17433

1,767,204.84

1,831,210.64

$ 1,097,823.13

3,768,698.04

3.629.143.14

$

637.30

18,455.13

412,717.66

459,649.50

$

637.30 $ 1,116,278.26 $ 20,561,794.83 $ 19,269,177.61

$ 12,510.021.68 $ 11.111.508.09

$

95,820.43

467,761.08 466.906.38 493.542.43 329,544.84 1,147,178.48
90.283.50 1,519.303.10 1.154,164.37
15.351.30 5.051.83 1.293.176.68 132,137.43

503.297.03 649,955.79 475,879.88 278.695.93 1,032.909.92
84.516.93 1,195,615.23 1.188.764.62
30,798.00 13,048.40 1,257.921.43 779.685.42

$

830,000.00

137,000.00

1,074.55

910.271.77 156,935.20
1,074.55

826.260.26 177.513.58
896.10

$

95.820.43 $

968,074.55 $ 20,692,704.62 $ 19,607,266.61

$

-95,183.13 $

148.203.71 $ -130,909.79 $ -338,089.00

$

383.953.00

$

383.953.00

$

294.218.02

$

383,953.00

496.700.42

-383.953.00

-496,700.42

$

0.00 $

294.218.02

$

288.769.87 $

148.203.71 $ .130,909.79 $

-43.870.98

18,161.24

761.025.99

2,117,947.81

2,159.592.17

3,406.53 305.17

-1.832.98 4,059.60

$

306,931.11 $

909,229.70 $ 1.990,749.72 $ 2,117,947.81

-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, 2001

EXHIBIT C

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 13,483,909,00 $ 13,873,245.59

2,622,308,00 70,000,00

2,670,874,91 51,728,08

Total Revenues

$ 16,176,217.00 $ 16,595,848,58

EXPENDITURES

Current Instruction Support Services Pupil ServiceS Improvement of Instructional Services Educallonal Media Services General Administration School Adminlstrallon Business Admlnlstrallon Maintenance and Operallon of Plant Student Transporlabon Services Central Support Services Other Support Services Food Services Qperallon
capital Outlay Debt Service

$ 10.348,913,00 $ 11,105.687,44

865,317,00 565,487.00 482,014,00 370,104.00 1,131,427.00 139,058,00 1,467,820,00 1,204.116,00
61,202,00

346,437.79 396,406,88 490,161.26 326.297,64 1,145,052,29
90,283.50 1,503.981 ;51 1,145,545.42
15,351,30 2,044.09

592,018,00

33.567,00 100,206.97

Total Expenditures

$ 17,227,476.00 $ 16.701,023.09

Excess of Revenues over (under) expenditures $ -1,051,259.00 $ -105,174,51

OTHER FINANCING USES

Other Uses

-383,953,00

Excess of Revenues over (under) expenditures

and Other Finandng Uses

$ -1,051,259.00 $

-489,127.51

FUND BALANCE JULY 1. 2000

1.048,768,88

1,245.666,97

Adjusbnents Food Inventory - Net Change In Period
Donated Commodities Purchased Foods

20.96

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 647,554,00 $ 739,928.70

1,633,529,00

1,767,204,84

324,000,00

341 ,897,15

$ 2,605,083,00 $ 2,849,030.69

$ 1.303,490,86 $ 1,404,334,24

98,737,00 54,155,00
14,700,00

121,323,29 70,499.50 3.381.17 3,247,20 2,126,19

26,500.00 6,287.00

15,321.59 8,618.95

3,048.00 1,105,287.00

3,007,74 1.293,176,68
2,750,00

$ 2,612,204,86 $ 2,927,786.55 $ -7,121.86 $ -78,755.86

$ -7,121.86 $ -78,755.86

74,892,79

93,093,61

-10,598,14

3,406,53 305,17

FUND BALANCE JUNE 30. 2001

$

-2,469.16 $ _ _7.;.;56~,5;:;,39;;,;.4;;,;6;:.

$

18,04945

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

BRANTLEY COUNTY BOARD OF EI:>UCATION
STATEMENT OF REVENl\IES; EXPENSES;AND CHANGES IN FUND BALANCES FIDUCIARY F~N-B~tY.PE'- "N0NEXPENDAEilE"TRUST FUND :YEA.R"~NQE6 "Ji:JNE 30, 2001

EXHIBIT "0"

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

ENDOWMENT FUND
WILLIAMM. ROBERSON SCHOLARSHIP
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

0.00 $

0.00 $

0.00

$

620.06 $

620.06 $

618.31

$

-620.06 $

-620.06 $

-618.31

618.66

618.66

619,71

$

-1.40 $

-1.40 $

1.40

10,516.70

10,516.70

10,515,30

$

10,515.30 $

10,515.30 $ =-_...,;1=0,5;,;,16.,,;,;70....

The notes to the general-purpose financial statements are an integral part of this statement. - 8-

BRANTLEY COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30, 2001

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
WILLIAMM. ROBERSON SCHOLARSHIP
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 3D, 2001

JUNE 3D, 2000

$

-620.06 $

-620,06 $

-618.31

620.06

620.06

618.31

$

0.00 $

0.00 $

0.00

0.00

0.00

0.00

$

0.00 $

0.00 $ =======,0=.0:=0,=

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

BRANTLEY COUNTY BOARD OF EDUCATION

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

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

- 11 -

BRANTLEY COUNTY BOARD OF EDUCAnON

EXHmIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
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 government units and/or other funds. This fund includes:
NONEXPENDABLETRUSTFUND William M. Roberson Scholanhip Fund - the fund used to account for an endowment ofwhich the corpus is to be invested and preserved intact with the resultant income to be used 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 capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
All nonexpendable trust funds are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation ofthese funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.
- 12-

BRANTLEY COUNTY BOARD OF EDUCAnON

EXHIDIT "F"

NOTES TO mE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. 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 ofaccounting, 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 of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The
- 13-

BRANtLEY COUNfY BOARD OF EDUCAnON

EXHmIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper ofgeneral circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-l67(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.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the Unite~ States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,

- 14-

BRANTLEY COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

ruNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(5) Prime banker's acceptances,

(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions of the State of Georgia.

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 2000 tax year (calendar year) on October 24,2000 (levy date). Taxes were due on January 31,2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Brantley County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $2,644,564.27 and for school bonds amounted to $206,095.33.

Tax millage rates levied for the 2000 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

14.35 mills 1.09 mills

~mills

SALES TAXES
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 $891,727.80 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $709,822.85 has been collected or on June 30, 2002, whichever occurs first.

- 15 -

BRANTLEY COUNTY BOARD OF EDUCAnON

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES'
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements ofexpenditures/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 ofoperations 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.
DEFICIT FUND BALANCES
Funds reporting a deficit fund balance position at June 30, 2001, are as follows:

- 16-

BRANTLEY COUNTY BOARD OF EDUCATION

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fund Type/Fund Name

Deficit Balance

Governmental Fund Type Special Revenue Fund School Food Services Fund

$ 35,228.02

In the subsequent period, the School District anticipates using school food sales to eliminate this deficit.

Note 2: DEPOSITS

COLLATERALIZAnON OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.

Acceptable security for deposits consists of anyone of or any combination of the following:

(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,

(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,

(3) Bonds, bills, notes, certificates 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

- 17 -

BRANTLEY COUNTY BOARD OF EDUCAnON

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank., the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank. for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $2,846,228.34. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

The School District's deposits are classified by risk category at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 956,942.89

2

1,889,285.45

3

0.00

Total

$ 2.846.228.34

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

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

- 18 -

BRANTLEY COUNTY BOARD OF EDUCAnON

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 4: RISK MANAGEMENT

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

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

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

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

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $

820.00 $

820.00 $

0.00

$

0.00 $

4.803.00 $

4.803.00 $

0.00

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

Position Covered

Amount

Superintendent Each Principal and Assistant Principal Each Board Member Each Director

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

- 19-

- - - - - - - - - - -------- -

BRANTLEY COUNTY BOARD OF EDUCATION

EXHmIT "F"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Brantley County Board of Education has entered into various lease agreements as lessee for buses. 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% 3.90% - 4.60%

$ 805,000.00 1,200,000.00

$ 2,005,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 2001, were as follows:

Capital Leases

General Obligation
Bonds

Total

Balance July 1,2000

$ 351,273.46 $ 2,835,000.00 $ 3,186,273.46

Deductions Debt Retired

80.271.77

830,000.00

910,271.77

Balance June 30, 2001

$ 271.001.69 $ 2,005,000.00 $ 2,276,001.69

At June 30, 2001, payments due by fiscal year which includes principal and interest for these items are as follows:

- 20-

BRANTLEY COUNTY BOARD OF EDUCAnON

EXHffiIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2002 2003 2004 2005 2006

$ 100,206.97 $ 1,011,000.00 $ 1,111,206.97

69,239.38

624,600.00

693,839.38

69,239.38

189,362.50

258,601.88

69,239.38

188,225.00

257,464.38

191,243.75

191,243.75

Total Principal and Interest $ 307,925.11 $ 2.204.431.25 $ 2.512.356.36

Deduct: Imputed Interest

36,923.42

Net Present Value of Future Minimum Lease Payments $ 271.001.69

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $244,582.61 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$199,856.97

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $1 ,824.64

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 $42,901.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available:

- 21 -

BRANTLEY COUNTY BOARD OF EDUCAnON

EXHIDIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 7: SIGNIFICANT COMMITMENTS
Project 02GIO 1S-6l3-002

Unearned Executed Contracts
$ 19,992.40

Funding Available From State
$ 755,280,00

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 School District believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 9: SUBSEOUENT EVENTS

On November 6, 2001, the voters of Brantley County voted in favor of a Special Purpose Local Option Sales Tax referendum for education purposes, The imposition of the tax approved by the voters, as stated on the Official Ballot of Brantley County is as follows:

"Shall a one percent sales and use tax be imposed in the Brantley County School District for a period of time not to exceed twenty consecutive calendar quarters and for the raising of not more than $4,500,000,00 for the purpose of acquiring, constructing, and equipping the following capital outlay projects at schools and educational facilities throughout Brantley County; renovations, additions, and improvements at Waynesville Elementary School and Brantley County Middle School; renovations, additions, and improvements to the gymnasiums and lunchrooms at Hoboken and Nahunta Elementary Schools; renovations, additions, and improvements at Brantley County High School including a new roof, improvements to the athletic facilities, and construction of a Future Farmers of America Agricultural Show Barn and parking lot; construction ofan office for the Board ofEducation; system-wide technology upgrades; system-wide site and security upgrades; and construction ofa transportation garage?
If imposition of the tax is approved by the voters, such vote shall also constitute approval of the issuance ofgeneral obligation debt ofthe Brantley County School District in the maximum principal amount of $3,685,000.00 for the above capital outlay purposes."
Note 10: RETIREMENT PLANS
TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school districts are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple

- 22-

BRANTLEY COUNlY BOARD OF EDUCATION

EXHIDIT "F"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 10: RETIREMENT PLANS

employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 1,257,286.04 $ 1,152,590.76 $ 1,125,758.55

- 23-

--------------------------------
BRANTLEY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

38,326.67 $

90,359.72

8,165.52

42,086.37 11,191.10

Total Assets

$

99,769.66 $===9.0..=,3:;59.....7=2=

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 Deficit Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements.
- 24-

$

39,346.41 $

18,480.72

42,373.80

71,879.00

$

81,720.21 .$

90,359.72

$

42,086.37

11,191.10

-35,228.02 0.00 $

$

18,049.45 $

0.00 0.00

$

99,769.66 $ ===9=0:,3~59=.=72=

EXHIBIT"G"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

128,686.39 $

197,211.82

$

167,959.74

176,125.26

288,634.01

42,086.37 11,191.10

38,679.84 10,885.93

$

167,959.74 $

358,089.12 $ ====5=3.5...,4.=.11=.6;;,;0..

$

51,517.31 $

51,517.31 $

67,520.55

20,013.59

77,840.72

144,957.23

96,428.84

210,681.64

217,790.33

12,049.88

$

167,959.74 $

340,039.67 $

442,317.99

$

16,000.00

$

42,086.37

11,191.10

38,679.84 10,885.93

-35,228.02

$

0.00

0.00

27,527.84

$

0.00 $

18,049.45 $

93,093.61

$

167,959.74 $

358,089.12 $ =""""",5:=3=5!=,:,4=11=.6;;,;0...

- 25-

BRANTLEY COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

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 Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
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,
- 26

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

82,960,00 $

805,563,67

341,897.15

$ 1,230,420,82 $

656,968.70 656,968,70

$

537,723.02

84,368,81 13,471.04

$ 1,293,176,68

$ 1,293,176,68 '$

$

-62.755,86 $

1,859.62 15,321.59
1,324,87 149.75
2,750.00
656,968,70
0.00

$

-62,755.86 $

0,00

77,093.61

0.00

3,406.53 305,17

$

18,049.45 $ ==-===:::1100==0"',;;;,;00=

EXHIBIT"H"

FEDERAL
PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

739,928.70 $

714,970.77

$

961,641.17

1,767,204.84

1,831,210.64

341,897.15

307,899.52

$

961,641.17 $ 2,849,030.69 $ 2,854,080.93

$

866,611.22 $ 1,404,334.24 $ 1,499,943.22

36,954.48 57,028.46
3,381.17 3,247.20
266.57
7,294.08 2,857.99

121,323.29 70,499.50 3,381.17 3,247.20 2,126.19 15,321.59 8,618.95 3,007.74
1,293,176.68 2,750.00

89,458.14 118,826.86
3,986.68 3,069.13 1,785.60 14,519.03 8,324.22 3,459.99 1,257,921.43

$

977,641.17 $ 2,927,786.55 $ 3,001,294.30

$

-16,000.00 $

-78,755.86 $ -147,213.37

7,778.52

$

-16,000.00 $

-78,755.86 $ -139,434.85

16,000.00

93,093.61

230,301.84

3,406.53 305.17

-1,832.98 4,059.60

$

0.00 $

18,049.45 $ .............9.=3=,0.9.3;;,;.=61....

- 27-

BRANTLEY COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30, 2001

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$ 17,391.95 $

289,629.86 $

307,021.81 $

201,364.50

169,469.00

258,639.00

428,108.00

415,000.00

11,960.34

162,139.55

174,099.89

144,661.49

$ 198,821.29 $

710,408.41 $

909,229.70 $

7,;;,,61;.1,;,0;;;;2.5.,;;,;99;;.,

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated
Total Fund Equrty

$ 198,821.29 $ 0.00

710,408.41 $ 0.00

909,229.70 $ 0.00

761,025.99 000

$ 198,821.29 $

710,40841 $

909,22970 $

7.6..1.,O;,;;;;2;s,;5.,.99;c,

See notes to the general-purpose financial statements. - 28-

BRANTLEY COUNTY BOARD OF EpUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BAlANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30, 2001

EXHIBIT"J"

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

REVENUES
Taxes Other Funds
Total Revenues

$ 206,095,33 $ 3,517,68
$ 209,613.01 $

891,727,80 $ 1,097,823.13 $ 1,012,349.85

14,937.45

18,455.13

9,744,58

906,665,25 $ 1,116,27826 $ 1,022,094.43

EXPENPITURES

Debt Service PrinCipal Interest Paying Agent Fees
Total Expenditures
Excess of Revenues over (under) Expenditures

$ 130,000,00 $ 58,725,00 542,95
$ 189,267,95 $
$ 20,345,06 $

700,000.00 $ 78,275,00 531,60
778,806,60 $
127,858,65 $

830,000.00 $ 137,000,00
1,074.55
968,074.55 $
148,203,71 $

725,000,00 172,806,25
896.10
898,702,35
123,392,08

OTHER FINANCING SOURCES

Operating Transfers In

6,500.00

Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1

$ 20,345,06 $ 178,476,23

127,858,65 $ 582,549,76

148,203.71 $ 761,025,99

129,892.08 631,133,91

FUND BALANCE JUNE 30

$ 198,821,29 $ 710,408.41 $ 909,22970 $ 761,025.99

See notes to the general-purpose financial statements,

- 29-

BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agnculture, U S Department of Child Nutnbon Cluster Pass-Through From Georgia Department of Education Food and Nutnbon Program Food Services School Breakfast Program National School Lunch Program
Total Child Nutnbon Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutntlon Program Food Dlstnbutlon Program (1) Pass-Through From Office of School Readiness Food and Nutntlon Program Child and Adult care Food Program
Total U S Department of Agncullure
Education, U. S Department of SpeCial Education Cluster Pass-Through From Georgia Department of Education IndiViduals WIth DISabilities Education Act Part B - Speaal Education Flow Through Preschool
Total SpeCial Education Cluster
Other Programs Pass-Through From Georgia Department of Educallon Elementary and Secondary Education Act Title I Grants to Local Educational AgenCies Tille II Eisenhower ProfeSSional Development Title VI Innovative Education Program Strategies Class Size Reduction Vocational Education - BaSIC Grants to States High School Program BaSIC Grant Pass-Through From Okefenokee Regional Educational Service Agency Safe and Drug-Free Schools and Communities
Total U S Department of Educalton

CFDA NUMBER
10,553 10,555
10550 10,558
84 027 84173
84010 84 281 84 298 84 340 84 048 84186

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

NlA

$ 192,58089

(2)

N/A

532,62337 $ 1,219,722.02 (3)

$ 725,204,26 $ 1,219,722,02

N/A

73,454 66

73,454 66

NlA

6,904 75

(2)

$ 805,563,67 $ 1,293,176 68

NlA

$ 289,24880 $

N/A

45,92200

$ 335,17080 $

289,24880 45,92200
335,170.80

NlA

454,10204

454,10204

N/A

5,58933

21,58933

NlA

18,49900

18,499.00

NlA

74,75800

74,75800

N/A

42,44700

42,44700

N/A

31,07500

$ 961,641,17 $

31,075,00 977,641.17

Total Federal FinanCial AsSIstance
NlA = Not Available

$ 1,767,204 84 $ 2,270,817,85

- 30-

BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 2001

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assIgned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the ament fiscal year.
(2) Expenditures for the Child and Adult care Food Program and the School Breakfast Program were not maintained separately and are Induded In the 2001 National School Lunch Program.
(3) Expenditures for this program Indude State, and/or Other Funds. Expenditures are not maintained by fund source.
Major Programs are identified by an asterisk (0) In front of the CFDA number.
The School District did not provide Federal Assistance to any Subredpienl
The accompanYing schedule of expenditures of Federal awards indudes the Federal grant activity of the Brantley County Board of Educabon and Is presented on the modified aeaual baSIS of accounting which IS the basis of accounting used In the presentation of the general-purpose financal statements.

see notes to the general-purpose finandal statements.

- 31 -

--- - - ---- - - - - - - - - - - - - - - - - - - - - -

-
BRANTlEY COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Educatton. Georgia Department of Quality Basic Educatton Direct Instructional Cost Klndergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Interventton (1-3) Program Upper Elementary Grades (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocattonal Laboratory (9-12) Program Students With Disablllttes category I Category II category III category IV Gifted Student - category VI Remedial Education Program A1temative Educatton Program English Speakers of Other Languages (ESOL) Media Center Program Staff and Professional Development Indirect Cost categorical Grants Pupil Transportatton Regular Bus Replacement Nursing Services Prindpal Supplements Vocational Supervisors Migrant Education Mid-term Adjustment Holcl-Harmless Educational Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Health Insurance Mentonng Program Mentor Teachers Preschool Handicapped Program Remedial Summer School Teachers'Rettrement Lottery Programs Computers In the Classroom
Office of School Readiness Pre-Klndergarten Program
Office of Treasury and Fiscal Services Public School Employees Rettrement
CONTRACTS Education. Georgia Department of Georgia's Reading Challenge Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

509,416.00

152,416.00

1.679.977.00

556.260.00

985,459.00

1,718.928.00

1.179.123.00

529.360.00

21.936.00 205.739.00 752,158,00 151,412.00 141.061.00 161.656.00 121.238.00
6.321.00 282.676.00
78.853.00 1,849.159.00

556.090.00 148,026.00
75.810.00 12.638.00 20.980.00
2.051.00 52.913.00 1.502,495.00
$ 25.316.00
4.542.35 199.856.97
4.200.00 978.00
19.192.00 4,475.63 1.824.64

42.901.00

$

509,416.00

152,416.00

1,679,977.00

556,260.00

985.459.00

1.718.928.0(}

1.179,123.00

529,360.00

21.936.00 205,739.00 752.158.00 151,412.00 141.061.00 161.656.00 121.238.00
6.321.00 282,676.00
78,853.00 1.849.159.00

82.960.00 65,156.00

556,090.00 148,026.00 75.810.00
12.638.00 20.980.00
2.051.00 52.913.00 1.502,495.00 82.960.00 25.316.00
4.542.35 199,856.97
4.200.00 978.00
19.192.00 4,475.63 1.824.64
65.156.00

591.812.70

591.812.70

42.901.00

55.927.00 59,881.00

55.927.00 59.881.00

See notes to the general-purpose finanaal statements.

$ 13.873,245.59 $

739,928.70 $ 14.613,174.29

- 32

BRANTLEY COUNTY BOARD OF EPUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 2001

SCHEDULE "3"

PROJECT
The new Waynesville Elementary School, renovations and the addition of four dassrooms at Brantley County Middle School, renovabons and improvements at Brantley County High School conslsbng of three science dassrooms, laboratories, a media center, an addlbon to the gymnasium WIth new bleachers, construcbon of a new girls' softball field, renovations to existing facillbes, renovations to the gymnasium and phYSical education facillbes at Hoboken and Nahunta Elementary Schools

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

$ 3,800,000.00 $ 6,507,001.00 $ 174,095.43 $ 5,325,939.14 Ongoing

(1) The School Dlstrlcfs anginal cost estimate as specified In the resolution calling for the Imposition of the Local Option Sales Tax.
(2) The School Dlstncfs ament esbmate of total cost for the project. Indudes all cost from project incepbon to completion.
(3) The voters of Brantley County approved the Imposition of a 1% sales tax to fund the above project and rebre associated debt Amounts expended for this project may InclUde sales tax proceeds, state, local property taxes and/or other funds over the life of the project.

See notes to the general-purpose finanCIal statements.

- 33-

BRANTLEY COUNTY BOARD OF EDUCATION GENERAL FUNp - aUALlTY BASIC EDUCATION PROGRAM <OBE)
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Pnmary Grades (1-3) Program

Pnmary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Middle SChool (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category II

Category III

Category IV

Gifted Student Category VI

Remedial Education Program

Alternative Educalton Program

English Speakers of Other Languages (ESOL)

545,771,00 $ 163,293,00 1,799,870,00 595,957.00 1,055,78700 1,841,601.00 1,263,272.00 567,138.00 1,211,976.00
151,128.00 173,193.00 129,890.00
6,772.00

796,339,32 $ 83,312,03
2,039,725.00 255,323,27
1,114,139.01 1,734,051.93 1,721,047.26
534,637.21
101,923.79 1,018,85318
39,14543 173,916.96 136,907.75 157,009.83
5,851.72

15,734,33 $
133,004 87
52,746,03 81,600.86 83,509 57 111,11340
2,778.47 31,77146
797.71 4,445.55
14500 5,113.53
250.00

812,073,65 83,312.03
2,172,729,87 255,323.27
1,166,885 04 1,815,652.79 1,804,556.83
645,750.61
104,70226 1,050,624.64
39,94314 178,362.51 137,052.75 162,123.36
6,101 72

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

9,505,648 00 $ 9,912,183.69 $ 523,01078 $ 10,435,194 47

Media center Program Staff and ProfeSSional Development

302,851.00 84,479.00

425,91221 32,676.20

56,72957 52,99341

482,641.78 85,66961

TOTAL aBE FORMULA FUNDS

$

9,892.978.00 $ 10,370,772.10 $ 632,73376 $ 11,003,50586

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

See notes to the general-purpose financial statements.

- 34-

BRANTLEY COUNTY BOARD OF EDUCATION GENERAL FUND - aUALITY BASIC EDUCATION PROGRAM CaBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE -5"

Waynesville Elementary School Brantley County Middle School Nahunta Elementary School Brantley County High School Hoboken Elementary School Nahunta Primary School Central Office (Alternative Education Program) Other Auxiliary Facility
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share,

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

$

1,064,962.00 $

962,164.93

2,316,263.00

2,286,158.50

960,242.00

1,075,610,96

2,147,251,00

2,809,859.79

1,437,219.00

1,617,407.92

1,449,821.00

1,577,085.89

129,890.00

106,906,48

$

9,505,648.00 $ 10,435,194.47

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

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W.. Suite 214 Atlanta. Georgia 30334-8400
May 17,2002

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
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Brantley County Board of Education as of and for the year ended June 30,2001, and have issued our report thereon dated May 17,2002. 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 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.
We did not observe the taking ofeither the Federal donated commodities inventory or the purchased foods inventory at June 30, 2001, 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 of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
2001YB-40
L

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 detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Brantley County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6131-01-02, FS-6131-01-03 and FS-6131-0l-04.

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 nonnal 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, ofthe reportable conditions described above, we consider item FS-6131-01-

04 to be a material weakness.

.

This report is intended solely for the infonnation and use of the management, members of the Brantley County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

RWH:gp 200 1YB-40

~.~
Rus II W. Hinton State 1\uditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washmglon Slreel. S.w., Suile 214
Allanla. GeorgIa 30334-8400
May 17, 2002

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
REPORT ON COMPLIANCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-B3
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. Office ofManagement and Budget (OMB) Circular A-i33 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Brantley County Board of Education'S major Federal programs are identified in the Summary of Auditor's Results Section of 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 ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-B3 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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 determination on Brantley County Board of Education's compliance with those requirements.
2001SA-30
L

In our opinion, the Brantley County Board ofEducation 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, 2001.
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 ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Brantley County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-613 1-01-01.
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 of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would n"ot necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe the reportable condition described above is not a material weakness.
This report is intended solely for the information and use of the management, members of the Brantley County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
~~.~
Ru ell W. Hinton Stat Auditor
RWH:gp 2001SA-30

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

BRANTLEY COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED CQSTS YEAR ENDED JUNE 30, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6131-99-0 1 FS-6131-00-0 1 FS-6131-00-02

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

CORRECTIVE ACTIONIRESPONSES

CASH AND CASH EQUIVALENTS GENERAL LEDGER AccountinglIntemal Control Deficiencies Finding Control Number: FS-6131-0001

The responsibility to complete the monthly cash reconciliations has been assigned to different personnel. The Director ofFinance will review monthly cash reconciliations in order to ensure the accurate and timely performance of cash reconciliations.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6131-00-02

The Brantley County Board ofEducation does not at this time have sufficient resources to maintain a system-wide General Fixed Assets Account Group Within the formal accounting records.

SECTION IV FINDINGS AND QUESTIONED COSTS

-
BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Brantley County Board ofEducation'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 financial statement reportable conditions related to the following control categories.

Cash and Cash Equivalents Revenues/Receivables/Receipts General Fixed Assets

Expenditures/LiabilitieslDisbursements General Ledger

Of the reportable conditions described above, General Fixed Assets is considered to be a material weakness.

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

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Brantley County Board ofEducation disclosed a reportable condition in internal control over major programs for the following compliance requirement.

Program Income

The reportable condition described above is not considered to be a material weakness.

5. Type of Report 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 qualified.

6. Audit Findings Required to be Reported by Section .51 O(a) of OMB Circular A-I33 The Brantley County Board of Education's audit disclosed audit findings required to be reported by section .510(a) ofOMB Circular A-B3. These audit findings are included in section IV of this report.

- 1-

BRANTLEY COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
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 84.027 Individuals with Disabilities Education Act - Part B - Special Education Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education Preschool
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 qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
BUDGET PREPARATIONIEXECUTION Failure to Adopt a Balanced Budget Nonmaterial Noncompliance Finding Control Number: FS-6131-01-01
An examination of the School District's budget revealed that the School District failed to adopt a balanced budget for the General Fund. Chapter 32 ofthe Financial Management for Georgia Local Units of Administration manual issued by the Georgia Department of Education states in part:
"The budget must be balanced for all budgeted funds. Total anticipated revenues should equal total estimated expenditures. In the event anticipated revenues are insufficient to fund anticipated essential expenditures, a portion of unreserved fund balance from previous years must be used to fund the shortfall. In the event there is insufficient unreserved fund balance from previous years to fund anticipated expenditures, then such expenditures must be reduced to equal anticipated revenues plus available unreserved fund balance."
This condition occurred because management neglected the specific limitations imposed upon the School District by the Georgia Department of Education. Appropriate procedures should be implemented by the School District to ensure that the adopted budget for all budgeted funds is balanced as required.
-2-

BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS GENERAL LEDGER Accounting/Internal Control Deficiencies Reportable Condition Finding Control Number: FS-6131-01-02
An examination of the internal accounting control procedures revealed the following deficiencies:
1) Banks statements were not reconciled on a timely basis for all bank accounts.
2) Banks statements were not reconciled to the general ledger for the operating, payroll and school food service accounts.
3) Reconciling items were not resolved in a timely manner for the operating, payroll and school food service accounts.
4) Manual checks were issued, cleared the bank and were not recorded on the general ledger.
These deficiencies were the result of management's failure to establish internal control procedures that are necessary to adequately safeguard and report cash. The School District should implement appropriate procedures and controls to ensure that bank statements are reconciled to the general ledger and that required adjustments are identified and recorded in a timely manner.
CASH AND CASH EQUIVALENTS REVENUESIRECEIVABLESIRECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequate Separation of Duties Reportable Condition Finding Control Number: FS-6131-01-03
A review of the School District's internal control policies and procedures noted deficiencies in providing for adequate internal control over the following functions and related procedures for the School Food Services program:
1) The bank reconciliations were not reviewed by an individual independent of cash operations.
2) The School District utilizes a single employee to maintain the general ledger, prepare checks, sign checks and reconcile the bank statements.
-3-

BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
II FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
CASH AND CASH EQUIVALENTS REVENUES/RECEIVABLES/RECEIPTS EXPENDITURESILIABILITIESIDISBURSEMENTS GENERAL LEDGER Inadequate Separation of Duties Reportable Condition Finding Control Number: FS-6131-01-03
3) Journal entries were not reviewed and approved by someone independent of the general ledger function.
4) Cash custody and receipting functions were not separated from cash disbursement and general ledger functions.
5) Deposit preparation functions were not separated from cash receipts functions.
These conditions were a result ofmanagement's decision to limit the number ofadministrative staff made responsible for accounting functions over the School Food Services program. The School District should review the accounting procedures in place, design procedures that would enhance segregation of duties relative to the above control categories and implement those procedures to strengthen the internal control over the School Food Services' accounting functions.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6131-01-04
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 financial statements ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
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BRANTLEY COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS PROGRAM INCOME Accountingllnternal Control Deficiencies Reportable Condition U. S. Department of Agriculture Pass-Through From Georgia Department of Education Finding Control Number: FA-6131-01-01 A review ofthe School District's program income procedures for the Child Nutrition Cluster (CFDA 10.553 and 10.555) revealed the following deficiencies:
I) Reconciliations were not performed to verify weekly cash income reports to amounts recorded on the deposit slips and the general ledger.
2) Variances between the actual cash counts and the computer generated daily summary reports were not properly explained or documented.
3) Receipts for one week of meal sales were not recorded on the general ledger. 4) A one-day meal service observation disclosed:
a) Lunchroom personnel received payments for the sale oftwo adult meals and failed to properly record the sale in the computer system.
b) Five employees obtained food items from the serving line and lunchroom personnel failed to record or collect payment.
These conditions were a result of management's failure to implement appropriate internal controls over the program income function. The School District should implement policies and procedures to ensure compliance with Federal requirements over program income.
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