Brooks County Board of Education, Quitman, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2006

BROOKS COUNTY BOARD OF EDUCATION
QUITMAN, GEORGIA REPORT ON AUDIT
OF THE FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2006
STATE OF GEORGIA
DEPARTMENT OF AUDITS AND ACCOUNTS
Russell W. Hinton State Auditor

BROOKS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

DISTRICT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET ASSETS

1

B

STATEMENT OF ACTIVITIES

2

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

4

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET ASSETS

5

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

6

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

7

G

STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

8

H

STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

9

I

NOTES TO THE BASIC FINANCIAL STATEMENTS

10

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES - BUDGET AND ACTUAL

GENERAL FUND

23

BROOKS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

SCHEDULES

SUPPLEMENTARY INFORMATION

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

3 SCHEDULE OF STATE REVENUE

25

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

26

5 ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

BY PROGRAM

27

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133

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

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

BROOKS COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTIONV MANAGEMENT'S RESPONSES SCHEDULE OF MANAGEMENT'S RESPONSES

SECTION I FINANCIAL

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 5, 2007

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Brooks County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON BASIC FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION - SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying financial statements ofthe governmental activities, each major fund, and the aggregate remaining fund information (Exhibits A through I) of the Brooks County Board of Education, as of and for the year ended June 30, 2006, which collectively comprise the Board's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Brooks County Board ofEducation's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opm1ons.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information ofthe Brooks County Board of Education, as of June 30, 2006, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
2006ARL-11

In accordance with Government Auditing Standards, we have also issued our report dated March 5, 2007, on our consideration ofthe Brooks County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose ofthat report is to describe the scope ofour testing ofinternal control over financial reporting and compliance and the results ofthat testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.
Management's Discussion and Analysis and the Schedule ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual, as presented on pages i through viii and page 23 respectively, are not a required part ofthe basic financial statements but are supplementary information required by the accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Brooks County Board of Education's basic financial statements. The accompanying supplementary information which consist of Schedules 2 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 ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements, and in our opinion, is fairly stated, in all material respects, in relation to the basic 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.
Respectfully submitted,
w-~~
ell W. Hinton, CPA, CGFM State Auditor
RWH:as 2006ARL-11

BROOKS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
The discussion and analysis of the Brooks County Board of Education's financial performance provides an overall review of the School District's financial activities for the fiscal year ended June 30, 2006. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers are encouraged to review the basic financial statements and the accompanying notes to the basic financial statements to enhance their understanding of the School District's financial performance.
Financial Highlights
Key financial highlights for 2006 are as follows:
The Governmental Accounting Standards Board (GASB) issued GASB Statement 34 on June 30, 1999, requiring governments to comply with a new reporting model for financial statements. Based upon total revenues, the Brooks County Board of Education was a Phase Two implementer, and was required to implement GASB Statement 34 beginning in fiscal year 2003.
The School District's financial status improved during fiscal year 2006. In total, net assets increased $0.7 million, which represents a 4 percent increase from fiscal year 2005. This total increase was due to governmental activities since the School District has no business-type activities.
General revenues accounted for $7.8 million in revenue or 34 percent of all revenues. Program specific revenues in the form of charges for services and sales, grants and contributions accounted for $14.9 million or 66 percent of total revenues. Total revenues were $22.7 million
The School District had $21.9 million in expenses related to governmental activities; only $14.9 million of these expenses were offset by program specific charges for services, grants or contributions. General revenues, primarily taxes, of $7.8 million were adequate to provide for these programs.
Among major funds, the general fund had $21.5 million in revenues and $21.3 million in expenditures. The general fund's fund balance increased to $2.2 million from $2 million.
The School District received revenues of $1.2 million for the Special Purpose Local Option Sales Tax.
Using the Basic Financial Statements
This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand the Brooks County Board of Education as a financial whole, or as an entire operating entity.
The Statement ofNet Assets and Statement ofActivities provide information about the activities of the whole School District, presenting both an aggregate view of the School District's finances
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BROOKS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
and a longer-term view of those finances. The fund financial statements provide the next level of detail. For governmental funds, these statements tell how services are financed in the short-term as well as what remains for future spending. The fund financial statements also look at the School District's most significant funds. In the case of the Brooks County Board of Education, the general fund is by far the most significant fund.
Reporting the School District as a Whole
Statement ofNet Assets and the Statement ofActivities
While these documents contain the large number of funds used by the School District to provide programs and activities, the view of the School District as a whole looks at all financial transactions and asks the question, "How did we do financially during fiscal year 2006?" The Statement ofNet Assets and the Statement of Activities answer this question. These statements include all assets and all liabilities using the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting considers all of the current year's revenues and expenses regardless of when cash is received or paid.
These two statements report the School District's net assets and changes in those assets. This change in net assets is important because it tells the reader whether, for the School District as a whole, the financial position of the School District has improved or diminished. The causes of this change may be the result of many factors, some financial, some not. Nonfinancial factors include the School District's property tax base, facility conditions, required educational programs and other factors.
In the Statement of Net Assets and the Statement of Activities, the School District has one distinct type of activity:
Governmental Activities - All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, after school program, school activity accounts and various others.
Reporting the School District's Most Significant Funds
Fund Financial Statements
Fund financial reports provide detailed information about the School District's major funds. The School District uses many funds to account for a multitude of financial transactions. However, these fund financial statements focus on the School District's most significant funds. The School District's major governmental funds are the general fund, the District-wide capital projects fund and the debt service fund.
Governmental Funds: Most of the School District's activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at the year-end available for spending in future periods. These funds are reported using an accounting
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BROOKS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements.

Fiduciary Funds: The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the school activity accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the District-wide financial statements because it cannot use these assets to finance its operations.

The School District as a Whole

The perspective of the Statement of Net Assets is of the School District as a whole. Table 1 provides a summary of the School District's net assets for fiscal year 2006 compared to fiscal year 2005.

Table 1 Net Assets

Governmental Activities

Fiscal

Fiscal

Year 2006

Year 2005

Assets Current and Other Assets Capital Assets, Net

$ 14,590,511 $ 5,635,083

14,728,790

14,612,764

Total Assets

$ 29,319,301 $ 20,247,847

Liabilities Current and Other Liabilities Long-Term Liabilities

$ 2,624,105 $ 2,435,057 8,100,000

Total Liabilities

$ 10,724,105 $ 2,435,057

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Unrestricted
Total Net Assets

$ 14,118,170 2,909,648 1,567,378
$ 18,595,196

$ 14,612,764 1,698,510 1,501,516
$ 17,812,790

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BROOKS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Table 2 shows the changes in net assets for fiscal year 2006 compared to the changes in net assets for fiscal year 2005.

Table 2 Change in Net Assets

Revenues Program Revenues: Charges for Services and Sales Operating Grants and Contributions Capital Grants and Contributions

Governmental Activities

Fiscal

Fiscal

Year 2006

Year 2005

$ 387,024 14,478,070 89,803

$ 379,099 13,477,051 63,694

Total Program Revenues

$ 14,954,897 $ 13,919,844

General Revenues:

Taxes

Property Taxes

For Maintenance and Operations

$

Railroad Cars

Sales Taxes

Special Purpose Local Option Sales Tax

For Debt Service

For Capital Projects

Intangible Recording Tax

Real Estate

Grants and Contributions not Restricted to

Specific Programs

Investment Earnings

Miscellaneous

4,600,872 20,990
180,000 1,035,883
78,691 31,126
1,510,014 54,086
276,531

$ 4,225,976 24,924
1,131,240 111,453
1,537,025 50,797
271,122

Total General Revenues

$ 7,788,193 $ 7,352,537

Total Revenues

$ 22,743,090 $ 21,272,381

Program Expenses Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and OJ?eration of Plant Student Transportation Services Central Support Services Other Support Services Operations ofNon-Instructional Services Enterprise Operations Food Services

$ 13,455,756
848,962 963,248 336,732 617,984 1,388,274 319,592 1,241,102 872,323 117,978
23,370
295,236 1,480,127

$ 12,687,477
679,585 1,128,133
326,094 511,140 993,383 236,479 1,374,347 768,333
61,513 57,695
270,069 1,327,002

Total Expenses

$ 21,960,684 $ 20,421,250

Increase in Net Assets

$ 782.406 $ 851,131

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BROOKS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Governmental Activities

The School District is dependent upon operating grants and property taxes to support governmental activities. Instruction comprises 61 percent, Support Service 31 percent, and Operations of Non-Instructional Services 8 percent of governmental program expenses.

The Statement of Activities details the cost of program services and the charges for services and grants offsetting those services. Table 3 shows, for governmental activities, the total cost of services and the net cost of services. It identifies the cost of these services supported by tax revenue and unrestricted State entitlement.

Table 3 Governmental Activities

Total Cost of Services

Fiscal

Fiscal

Year 2006 Year 2005

Net Cost of Services

Fiscal

Fiscal

Year 2006 Year 2005

Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations ofNon-lnstructional Services Enterprise Operations Food Services

$ 13,455,756 $12,687,477 $ 2,916,283 $ 3,481,368

848,962 963,248 336,732 617,984 1,388,274 319,592 1,241,102 872,323 117,978
23,370

679,585 1,128,133
326,094 511,140 993,383 236,479 1,374,347 768,333
61,513 57,695

687,942 587,155 125,620
-796 931,992 319,592 639,701 407,367 117,978
22,949

399,209 611,618
87,295 -54, 115 477,029 236,479 749,822 339,676 58,116 14,061

295,236

270,069

1,480,127 1,327,002

99,800 150,204

74,075 26,773

Total Expenses

$ 21,960.684 $ 20,421,250 $ 7,005,787 $ 6,501,406

Although program revenues make up a majority of the revenues, the board is still dependent upon tax revenues for governmental activities. Approximately 32 percent of all governmental activities are supported by taxes, interest, and other governmental revenues.

The School District's Funds

The School District's funds are accounted for using the modified accrual basis of accounting. All governmental funds had revenues of $22.7 million and expenditures of $22.1 million. The School District received $1.2 million in proceeds from Local Option Sales Taxes for Capital Projects and Debt Service. The general fund's fund balance reflected an increase of $0.1 million and the district-wide capital projects funds increased $8.4 million. The increase in the fund balance of the general fund for the year indicates that the School District was able to meet

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BROOKS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
current costs from current revenues. The capital projects funds increased due to the issuance of general obligation bonds for the construction of the new Brooks County High School. The debt service fund was created to pay the future debt service payments on the bonds.
General Fund Highlights The School District's budget is prepared according to Georgia law. The most significant budgeted fund is the General Fund. During the course of fiscal year 2006, the School District amended its general fund budget as needed. The School District uses site-based budgeting. The budgeting systems are designed to tightly control total site budgets but provide flexibility for site management. The School District's top management monitors a detailed report comparing actual revenues and expenditures to budget on a monthly basis. Site management has access to this information on a demand basis through a report available using the School District's accounting software.
For the General Fund, the final budgeted revenues of $22.1 million exceeded the original budgeted amount of $21.3 million by $0.8 million. This difference was due to an increase in State revenue of $0.06 million and an increase in Federal revenues of $0.7 million. The actual revenue was less than the final budgeted amount by $0..6 million. The final budgeted expenditures of $22.2 million exceed the original budget of $21.3 million by $0.9 million. The difference was due to an increase of instruction by $719,315 an increase in pupil services of $1,758, an increase in improvement of instructional services of $119,427, an increase in general administration of $25,090, an increase in school administration of $3,800, a decrease in student transportation services of $4,500, and an increase in other support services of $5,725. The actual expenditures were $819,472 less than the final budgeted amount.
General Fund revenues exceeded expenditures by $0.1 million. The School District continues to make a concentrated effort to raise fund balance in anticipation of future needs.
Capital Assets
At the end of fiscal year 2006, the School District had capital assets of $14.7 million, net of depreciation. Table 4 shows fiscal year 2006 balances compared with fiscal year 2005 balances.
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BROOKS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006

Table 4 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal

Fiscal

Year 2006

Year 2005

Land Construction in Progress Buildings and Improvements Equipment Land Improvements

$ 552,029 1,196,779
10,087,849 1,136,778 1,755,355

$ 501,667 1,286,653 10,498,229 1,145,204 1,181,011

Total

$ 14,728.790 $ 14!6121764

The primary increases occurred in land improvements. The new Brooks County High School Stadium was completed in fiscal year 2006. Due to funding from a Special Purpose Local Option Sales Tax, the School District is planning for future construction of a new high school and additions to the current middle school.

Debt

At June 30, 2006 the School District had $8.1 million in bonds outstanding with $0.2 million due within one year and $7.9 million due in more than one year. Table 5 summarizes general obligation bonds.

Table 5 Debt at June 30

Governmental Activities

Fiscal

Fiscal

Year 2006

Year 2005

General Obligation Bonds

$ 8,100.000 $====0

At June 30, 2006, the School District's overall legal bonding authority was $27,871,034. The School District maintains an AA bond rating.

Current Issues

The Brooks County School District is financially sound and relatively stable, especially when the economic condition of the State is considered. The School District has maintained its economic stability by budgeting conservatively and monitoring its expenditures. The Brooks County

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BROOKS COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2006
Board of Education's current operating millage is 15.23 mills, which produces $347,254.76 per mill. The tax digest of the county has increased about 8.75 percent in the last year mostly because of an increase in real and personal property. The School District increased the mill rate for 2006 by 1.09 mills. Tax collections have been timely and there are no outstanding tax bills not levied due to appeals. The student population in Brooks County Schools had decreased in the past few years, however for the current school year has shown an increase. The School District experienced an increase of 47 student FTE's during the 2006-2007 school year. Sales tax collections have increased and state revenues have dropped. Austerity reductions have been implemented by the governor for fiscal year 2007. Brooks County's unemployment rate of 4.4 percent is slightly above the state average of 4.3 percent. These issues are of concern to the School District as they could have a negative impact on its financial health. Contacting the School District's Financial Management This financial report is designed to provide our citizens, taxpayers, investor, and creditors with a general overview of the School District's finances and to reflect the School District's accountability for the monies it receives. Questions about this report or for additional financial information, please contact Finance Director, Brooks County Board of Education, 489 Barwick Road, Quitman, Georgia 31643
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BROOKS COUNTY BOARD OF EDUCATION

BROOKS COUNTY BOARD OF EDUCATION STATEMENT OF NET ASSETS JUNE 30, 2006
ASSETS
Cash and Cash Equivalents Investments Accounts Receivable, Net
Taxes State Government Federal Government Other Capital Assets Land Construction in Progress Land Improvements Buildings Equipment Less: Accumulated Depreciation
Total Assets
LIABILITIES
Accounts Payable Salaries Payable Contracts Payable Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
NET ASSETS
Invested in Capital Assets, Net of Related Debt Restricted for
Bus Replacement Continuation of Federal Programs Debt Service Capital Projects Unrestricted
Total Net Assets
Total Liabilities and Net Assets

EXHIBIT"A"

GOVERNMENTAL ACTIVITIES

$

6,334,055

6,000,000

421,676 1,297,500
514,906 22,374

552,029 1,196,779 2,744,066 16,406,822 2,646,727 -8 817 633

$ ===2=9=,3==1=9=,3=01=

$

269,220

2,328,267

26,618

180,000 7,920,000

$

10 724 105

$

14,118,170

75,848 377,092 276,869 2,179,839 1567378

$

18,595,196

$ ===2=9=,3=1=9=,3=01=

The notes to the basic financial statements are an integral part of this statement. -1-

BROOKS COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2006

GOVERNMENTAL ACTIVITIES
Instruction Support Services
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Operations of Non-Instructional Services Enterprise Operations Food Services
Total Governmental Activities
General Revenues Taxes Property Taxes For Maintenance and Operations Railroad Cars Sales Taxes Special Purpose Local Option Sales Tax For Debt Services For Capital Projects Intangible Recording Tax Real Estate Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous
Total General Revenues
Change in Net Assets
Net Assets - Beginning of Year
Net Assets - End of Year

EXPENSES

CHARGES FOR SERVICES

$

13,455,756

848,962 963,248 336,732 617,984 1,388,274 319,592 1,241,102 872,323 117,978
23,370

295,236 $ 1 480 127

$

21,960,684 $

195,436 191 588
387 024

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

EXHIBIT"B"

PROGRAM REVENUES

OPERATING

CAPITAL

GRANTS AND

GRANTS AND

CONTRIBUTIONS CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET ASSETS

$

10,530,305 $

157,760 376,093 211,112 618,349 456,269

601,094 389,109

421

1 137 558

$

14 478 070 $

9,168 $ 3,260
431 13
307 75,847
777 89 803 $

-2,916,283
-687,942 -587, 155 -125,620
796 -931,992 -319,592 -639,701 -407,367 -117,978
-22,949
-99,800 -150 204
-7,005,787

$

4,600,872

20,990

180,000 1,035,883
78,691 31,126 1,510,014 54,086 276 531

$

7 788 193

$

782,406

17 812 790

$

18 595 196

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BROOKS COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2006

EXHIBIT"C"

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

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 2,701,572 $ 3,452,404 $ 6,000,000

225,655 1,297,500
514,906 22 374

196,129

180,079 $

6,334,055 6,000,000
421,784 1,297,500
514,906 22 374

Total Assets

$ 4,762,007 $ 9,648,533 $

180,079 $ ===1=4=5=9=0=61=9=

LIABILITIES AND FUND BALANCES

LIABILITIES

Accounts Payable Salaries Payable Contracts Payable

$

269,220

2,328,267

$

26618

Total Liabilities

$ 2,597,487 $

26,618

FUND BALANCES

Reserved for: Bus Replacement Continuation of Federal Programs Debt Service Capital Projects
Unreserved Undesignated Reported in: General Fund

$

75,848

377,092

$

96,790 $

9,525,125

1 711 580

Total Fund Balances

$ 2,164,520 $ 9,621,915 $

$ $ $ 180,079
180,079 $

269,220 2,328,267
26618 2,624,105
75,848 377,092 276,869 9,525,125
1 711 580 11,966,514

Total Liabilities and Fund Balances

$ 4,762,007 $ 9,648,533 $

180 079 $===1=4=,5=9,;;;0,=6=19=

The notes to the basic financial statements are an integral part of this statement. -4-

BROOKS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS JUNE 30, 2006

EXHIBIT"D"

Total Fund Balances - Governmental Funds (Exhibit "C")
Amounts reported for Governmental Activities in the Statement of Net Assets are different because:
Capital Assets used in Governmental Activities are not financial resources and therefore are not reported in the funds. These assets consist of:
Land Construction in Progress Land Improvements Buildings Equipment Accumulated Depreciation
Total Capital Assets
Some of the School District's property tax revenues will be collected after year-end but are not available soon enough to pay for the current period's expenditures.
Long-Term Liabilities, including Bonds Payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-Term Liabilities at year-end consist of:
Bonds Payable
Net Assets of Governmental Activities (Exhibit "A")

$ 11,966,514

$

552,029

1,196,779

2,744,066

16,406,822

2,646,727

-8,817,633

14,728,790

-108

-8,100,000 $ 18,595,196

The notes to the basic financial statements are an integral part of this statement.
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BROOKS COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2006

EXHIBIT"E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Proceeds of Long-Term Capital-Related Debt
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

GENERAL FUND

DISTRICTWIDE
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 4,575,110

109,817 $ 1,035,883 $

11,877,299

13,956

4,186,632

387,024

37,296

16,698

291,723

$ 21,464,901 $ 1,066,537 $

$ 180,000
92 180,092 $

4,575,110 1,325,700 11,891,255 4,186,632
387,024 54,086
291,723
22,711,530

$ 13,116,141
722,316 963,248 336,732 601,249 1,387,739 175,498 $ 1,416,598 731,120 117,978
23,370 295,236 1,449,950

$ 21,337,175 $

$

127,726 $

144,081 $
610,633 754 714 $ 311,823 $

$ 13,116,141

722,316

963,248

336,732

601,249

1,387,739

13

319,592

1,416,598

731,120

117,978

23,370

295,236

1,449,950

610,633

13 $ 22,091,902

180,079 $

619,628

8,100,000

$

127,726 $ 8,411,823 $

2,036,794

1,210,092

180,079 $ 0

8,100,000 8,719,628 3,246,886

$ 2,164,520 $ 9,621,915 $ 180,079 $ 11,966,514

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

BROOKS COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2006

EXHIBIT"F"

Total Net Change in Fund Balances - Governmental Funds (Exhibit "E")
Amounts reported for Governmental Activities in the Statement of Activities are different because:
Capital Outlays are reported as expenditures in Governmental Funds. However, in the Statement of Activities, the cost of Capital Assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:
Capital Outlay Depreciation Expense
Excess of Capital Outlay over Depreciation Expense
Because some property taxes will not be collected for several months after the School District's fiscal year ends, they are not considered "available" revenues.
In the Statement of Activities, only the loss on the sale of the equipment is reported, whereas in the Governmental Funds, the entire proceeds from the sale increase financial resources. Thus, the change in net assets differs from the change in fund balances by the carrying value of the equipment sold.
Bond proceeds provide current financial resources to Governmental Funds; however, issuing debt increases Long-Term Liabilities in the Statement of Net Assets. In the current period, proceeds were received from:
General Obligation Bonds Issued

$

8,719,628

$

864,119

-732,901

131,218 46,752

-15,192

-8,100,000

Change in Net Assets of Governmental Activities (Exhibit "B")

$ ===7=82=,4=0=6

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

BROOKS COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS JUNE 30, 2006

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments
Portfolio Accounts
Total Assets
LIABILITIES Funds Held for Others
NET ASSETS Held in Trust for Private Purposes
Total Liabilities and Net Assets

PRIVATE PURPOSE TRUSTS

AGENCY FUNDS

$ $ _ _..c.8=2,""'-16.c...;5;...

14,737

$

82, 165 $ ===14=====73=7=

$

14,737

$ _ _ _8~2,;...16_5_

$

82,165 $===14:::::!:i:::73=7=

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

BROOKS COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2006

EXHIBIT"H"

ADDITIONS Investment Earnings Net Increase in Fair Value of Investments Interest Total Additions
DEDUCTIONS Administrative Expenses Change in Net Assets
Net Assets - Beginning
Net Assets - Ending

PRIVATE PURPOSE TRUSTS

$

1,349

731

$

2,080

$

495

$

1,585

80,580

$ ===8=2'=16=5=

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

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
REPORTING ENTITY
The Brooks County Board ofEducation (School District) was established under the laws ofthe State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The 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 School District is a primary government and consists of all the organizations that compose its legal entity.
Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the District-wide financial statements, fund financial statements and notes to the basic financial statements of the Brooks County Board of Education.
District-wide Statements: The Statement ofNet Assets and the Statement ofActivities display information about the financial activities ofthe overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support ofthe School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
Program revenues include (a) charges paid by the recipients ofgoods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting ofinternal activities. Separate statements for each category (governmental and fiduciary) are presented. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.

- 10 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The School District reports the following major governmental funds:
General Fund is the School District's primary operating fund. It accounts for all financial resources ofthe School District, except those resources required to be accounted for in another fund.
District-wide Capital Projects Fund accounts for financial resources including Special Purpose Local Option Sales Tax (SPLOST), Bond Proceeds and grants from Georgia State Financing and Investment Commission to be used for the acquisition, construction or renovation ofmajor capital facilities.
Debt Service Fund accounts for taxes (sales) legally restricted for the payment ofgeneral longterm principal, interest and paying agent's fees.
The School District reports the following fiduciary fund types:
Private Purpose Trust funds report trust arrangements under which income may be expended to provide scholarships for selected students.
Agency funds account for assets held by the School District as an agent for various funds or individuals.
BASIS OF ACCOUNTING
The basis ofaccounting determines when transactions are reported on the financial statements. The District-wide governmental and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless ofwhen the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, grants and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
The School District uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this method, revenues are recognized when measurable
- 11 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds ofgeneral long-term liabilities are reported as other financing sources.
The School District funds certain programs by a combination ofspecific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
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 United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
- 12 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: 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.

The School District does not have a formal policy regarding investment policies that address credit risks, custodial credit risks, concentration ofcredit risks, interest rate risks or foreign currency risks.

RECEIVABLES

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

PROPERTY TAXES

The Brooks County Board ofCommissioners fixed the property tax levy for the 2005 tax digest year (calendar year) on September 15, 2005 (levy date). Taxes were due on November 15, 2005 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2005 tax digest are reported as revenue in the governmental funds for fiscal year 2006. The Brooks County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2006, for maintenance and operations amounted to $4,554,120.

The tax millage rate levied for the 2005 tax year (calendar year) for the Brooks County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

14.14 mills

SALES TAXES

Special Purpose Local Option Sales Tax, at the fund reporting level, during the year amounted to $1,215,883 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.

- 13 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES

FOOD INVENTORIES Inventories of purchased foods and donated food commodities used in the preparation of meals are not reported on the Financial Statements. To conform to generally accepted accounting principles, these amounts should be recorded in the basic financial statements. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements.

CAPITAL ASSETS

Capital assets purchased, including capital outlay costs, are recorded as expenditures in the fund financial statements at the time of purchase (including ancillary charges). On the District-wide financial statements, all purchased capital assets are valued at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at estimated fair market value on the date donated. Disposals are deleted at depreciated recorded cost. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. Depreciation is computed using the straight-line method. The School District does not capitalize book collections or works of art.

Capitalization thresholds and estimated useful lives of capital assets reported in the District-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land Land Improvements Buildings and Improvements Equipment

$

5,000

NIA

$

5,000 5 to 15 years

$

5,000 15 to 60 years

$

5,000 5 to 15 years

Depreciation is used to allocate the actual or estimated historical cost of all capital assets over estimated useful lives.

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond issuance costs are recognized in the financial statements during the fiscal 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 Statement of Net Assets.

- 14 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 3: DEPOSITS AND INVESTMENTS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa 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. At June 30, $362,902 of deposits were not secured by surety bond, insurance or collateral as specified above. The School District is working with the affected financial institutions to ensure appropriate levels of collateral are maintained for all of the School District's deposits.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by 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, 2006, the bank balances were $14,527,651. The amounts ofthe total bank balances are classified into four categories of custodial credit risk:

- 15 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 3: DEPOSITS AND INVESTMENTS

Category 1 - Cash that is insured (e.g., Federal Deposit 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 - Cash collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.
Category 4 - Uncollateralized.

The School District's deposits are classified by custodial credit risk category at June 30, 2006, as follows:

Custodial Credit Risk Category

Bank Balance

1

$ 585,698

2

9,338,712

3

4,240,339

4

362.902

Total

$ 14,527,651

CATEGORIZATION OF INVESTMENTS Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of a failure ofthe counterparty to a transaction, the School District will not be able to recover the value of the investment or collateral securities that are in the possession of an outside party. The School District does not have a formal policy for managing custodial credit risk.

Investments are classified as to custodial credit risk by the categories described below:

Category 1 - Insured or registered, or securities held by the School District or the School District's agent in the School District's name.
Category 2 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent in the School District's name.
Category 3 - Uninsured or unregistered, with securities held by the counterparty's trust department or agent, but not in the School District's name.

At June 30, 2006, the carrying value ofthe School District's total investments was $82,165 and this entire amount consisted ofU. S. Treasury Money Market Mutual Funds and Equity Mutual Funds (open ended).

Funds invested in U. S. Treasury Money Market Mutual Funds and Equity Mutual Funds (open-end mutual funds) are not required to be classified by categories of custodial credit risk.

- 16 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 3: DEPOSITS AND INVESTMENTS

Credit Quality Risk Credit quality risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The School District does not have a formal policy for managing credit quality risk. The Equity Mutual Funds are unrated.

Note 4: 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 2 - Inventories

Note 5: CAPITAL ASSETS

The following is a summary of changes in the Capital Assets during the fiscal year:

Balances July 1, 2005

Increases

Decreases

Balances June 30, 2006

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

$ 501,667 $ 1,286,653

50,362 609,832 $

$ 552,029

699,706

1,196.779

Total Capital Assets Not Being Depreciated $ 1,788,320 $ 660,194 $ 699,706 $ 1,748,808

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements

$ 16,406,822 2,713,573 $ 2,044,360

203,925 $ 699,706

$ 16,406,822

270,771

2,646,727

2,744,066

Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

5,908,593 1,568,369
863,349

410,380 197,159 125,362

255,579

6,318,973 1,509,949
988,711

Total Capital Assets, Being Depreciated, Net $ 12,824.444 $ 170,730 $

15,192 $ 12,979,982

Governmental Activity Capital Assets - Net $ 14,612,764 $ 830.924 $ 714.898 $ 14,728.790

Current year depreciation expense by function is as follows:

- 17 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 5: CAPITAL ASSETS
Instruction Support Services
Pupil Services General Administration School Administration Maintenance and Operation of Plant Student Transportation Services Food Services

$ 381,958

$ 135,831 17,949 574 12,779
151.444

318,577 32,366

Note 6: RESTRICTED ASSETS

$=====7==32-,9==0"=1

Special Purpose Local Option Sales Tax (SPLOST) and general obligation bond proceeds are reported as restricted assets in the Statement ofNet Assets because their use is limited by applicable bond covenants or statutory provisions. Restricted assets at June 30, 2006, were as follows:

District-wide Capital Projects

Bond

SPLOST

Proceeds

Debt Service Funds

Restricted Cash and Cash Equivalents: Debt Services Capital Acquisitions
Restricted Investments: Capital Acquisitions

$

96,790

$

$ 1,502,749 $ 1,852,865

$ 6,000,000

180,079

Note 7: RISK MANAGEMENT

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

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. However, the errors or omissions policy excludes coverage for sexual harassment and discrimination. 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 and acts of God. In addition, the School District has elected to self-insure for sexual harassment and discrimination. The School District has not experienced any losses related to these risks in the past three years.

- 18 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 7: RISK MANAGEMENT

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

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

2005 2006

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0 $

4974 $

4974 $

0

$

0 $

3 774 $

3 774 $

0

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

Position Covered

Amount

Superintendent Each Principal

$ 100,000

$

14,200

Note 8: LONG-TERM DEBT

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

Purpose

Interest Rate

Amount

General Government - Series 2006

3.81%

$ 8,100.000

The changes in Long-Term Debt during the fiscal year ended June 30, 2006, were as follows:

- 19 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 8: LONG-TERM DEBT

Governmental Funds General
Obligation Bonds

Balance July 1, 2005

$

0

Additions G. 0. Bonds

8,100,000

Balance June 30, 2006

$ 8,100,000

Portion of Long-Term Debt Due within One Year

$ 180,000

At June 30, 2006, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

General Obligation

Debt

Principal

Interest

2007 2008 2009 2010 2011 2012 - 2015

$ 180,000 $ 805,000 865,000 930,000
1,000,000 4,320,000

247,745 286,417 254,603 220,408 183,642 335,852

Total Principal and Interest

$ 8,100,000 $ 1,528.667

Note 9: SIGNIFICANT 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 costs which are disallowed under grant terms. The School District believes that such disallowances, if any, will be immaterial to its overall financial position.

- 20 -

BROOKS COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2006

EXHIBIT "I"

Note 10: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees 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 of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 9.24% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2006 2005 2004

100% 100% 100%

$ 1,077,475 $ 1,037,504 $ 1,072,143

- 21 -

(This page left intentionally blank)

BROOKS COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2006

SCHEDULE "1"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Enterprise Operations Food Services Operation
Capital Outlay
Total Expenditures
Net Change in Fund Balances
Fund Balances - Beginning

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

$

4,480,076 $

4,480,076 $

4,575,110

225,243

225,243

109,817

11,631,092

11,692,243

11,877,299

3,965,823

4,697,834

4,186,632

178,500

178,500

191,588

50,000

50,000

37,296

746 298

746 298

487 159

$

21,277,032 $

22,070,194 $

21,464,901

$

12,723,303 $

13,442,618 $

13,116,141

768,083 1,161,911
344,574 554,797 1,309,779 213,480 1,320,986 802,734 135,097
40,045
1,712,000 190 243

769,841 1,281,338
344,574 579,887 1,313,579 213,480 1,320,986 807,234 135,097
45,770
1,712,000 190 243

722,316 963,248 336,732 601,249 1,387,739 175,498 1,416,598 731,120 117,978
23,370 295,236 1,449,950

$

21,277,032 $

22,156,647 $

21,337,175

$

0 $

-86,453 $

127,726

1,853,116

1 853116

2,036,794

Fund Balances - Ending

$

1,853,116 $

1,766,663 $ ===2=,1=6=4,=52=0=

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include budgeted revenues or expenditures of the various principal accounts.
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 23-

BROOKS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2006

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food Donation (1)
Total U. S. Department of Agriculture
Education, U.S. Department of Special Education Cluster Pass-Through From Georgia Department of Education Special Education Grants to States Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education English Language Acquisition Grants Enhancing Education Through Technology Program Improving Teacher Quality State Grants Migrant Education Reading First State Grants Safe and Drug-Free Schools and Communities State Grants for Innovative Programs Title I Grants to Local Educational Agencies Vocational Education - Basic Grants to States
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

10.553 10.555

N/A

(2)

N/A $ - - ~ 1~31~3~4~7=2

$

1,313,472

10.550

N/A

61 780

$ _ _ _1"',3""7'-"5=,2=52~

84.027 84.173

N/A

$

N/A

$

465,245 19 380
484,625

84.365 84.318 84.367 84.011 84.357 84.186 84.298 84.010 84.048

NIA N/A N/A N/A N/A N/A N/A N/A N/A
$

6,554 213,216 284,712
36,845 241,857
32,678 12,179 1,633,905 46 351
2,992,922

Total Federal Financial Assistance

$

NIA= Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amount shown for the Food Donation Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the School District during the current fiscal year.
(2) Expenditures for the funds earned on the School Breakfast Program ($304,399) were not maintained separately and are included in the 2006 National School Lunch Program.

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

The School District did not provide Federal Assistance to any Subrecipient.

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

4 368174

See notes to the basic financial statements.

-24-

BROOKS COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2006

SCHEDULE "3"

AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category Ill Category IV CategoryV Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Migrant Education Mid-term Adjustment Hold-Harmless Education Equalization Funding Grant Food Services Vocational Education Austerity Reduction Other State Programs National Teacher Certification Preschool Handicapped Program School Improvement - CRCT Remediation Special Education Low Incidence Grant Statewide K-8 Reading and Mathematics Virtual Schools State Grant
Georgia State Financing and Investment Commission Reimbursement on Construction Projects

See notes to the basic financial statements.

-25-

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

401,755

$

401,755

471,507 314,954 1,429,538 240,539 686,976 199,854 1,496,596 948,769 441,125
42,144 262,192 624,560 114,215
56,612 60,071 67,595 105,959 35,171 211,112 68,914 43,159
361,348 423,210 601,094
383,343 75,847 35,802 58,895 7,883 2,163
327,439 1,510,015
74,698 115,698 -557,714
16,495 40,834
3,122 26,795 46,965
50

471,507 314,954 1,429,538 240,539 686,976 199,854 1,496,596 948,769 441,125
42,144 262,192 624,560 114,215
56,612 60,071 67,595 105,959 35,171 211,112 68,914 43,159
361,348 423,210 601,094
383,343 75,847 35,802 58,895 7,883 2,163
327,439 1,510,015
74,698 115,698 -557,714
16,495 40,834
3,122 26,795 46,965
50

_ _ _ _ _ $ _ ____,_13=-=-95""'6'--

13 956

$ 11,877,299 $

13 956 $=====1=1,=89=1=,2=55=

BROOKS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2006

SCHEDULE "4"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

The acquisition, construction and equipping

of capital outlay projects at North Brooks

Elementary School, Brooks Middle School,

Quitman Elementary School and Brooks County

High School, including the Brooks County

High School football stadium.

$

4,000,000 $

4,490,699 $

38,379 $ 4,452,320 Ongoing

The acquisition, construction and equipping a new high school in Brooks County and a facility to house and service the School District's vehicles and adding to, remodeling, renovating, improving, and equipping existing educational buildings, properties, and other facilities of the School District, and acquiring any necessary personal property and equipment, including computers and related technology, safety and security upgrades, and similar equipment.

6,300,000

6,300,000

716 335

515,126 Ongoing

$ 10,300,000 $ 10,790,699 $

754 714 $ 4 967 446

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

See notes to the basic financial statements.

- 26 -

BROOKS COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2006

SCHEDULE "5"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1) (2)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

Direct Instructional Programs

Kindergarten Program

$

Kindergarten Program-Early Intervention Program

Primary Grades (1-3) Program

Primary Grades-Early Intervention (1-3) Program

Upper Elementary Grades (4-5) Program

Upper Elementary Grades-Early Intervention (4-5)

Program

Middle School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category Ill

Category IV

Category V

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

517,782 $
384,051 1,626,720
290,000 786,566
246,324 1,700,429 1,067,772
504,532 1,254,409
70,415 78,519 120,317 47 446

380,101 $
566,554 1,696,093
327,703 822,816
217,342 1,876,130 1,434,225
633,802
27 297,098 579,518 112,631 135,447
71,342 70,352 181,314 65 240

16,778 $
4,870 52,941
3,822 27,264
2,775 83,742 93,583 47,172
8,427 4,964 6,765
588 494 1,195 1,207 5,555 722

396,879 571,424 1,749,034 331,525 850,080
220,117 1,959,872 1,527,808
680,974
8,454 302,062 586,283 113,219 135,941
72,537 71,559 186,869 65 962

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

8,695,282 $ 9,467,735 $

362,864 $

9,830,599

Media Center Program Staff and Professional Development

241,257 49448

274,993 18 694

31,738 35 317

306,731 54 011

TOTAL QBE FORMULA FUNDS

$

8 985 987 $

9 761 422 $

429 919 $ =====1='0=19=1=3=4=1

(1) Comprised of State Funds plus Local Five Mill Share. (2) Allotments do not include the impact of the State budget austerity reduction.

See notes to the basic financial statements.

- 27 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 5, 2007

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Brooks County Board of Education
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Brooks County Board of Education as of and for the year ended June 30, 2006, which collectively comprise Brooks County Board of Education's basic financial statements and have issued our report thereon dated March 5, 2007. We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Brooks County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion 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 of the internal control over financial reporting that, in our judgment, could adversely affect Brooks County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6141-06-01 and FS-6141-06-02.
2006YB-30

A material weakness is a reportable condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above are material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Brooks 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 grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
This report is intended solely for the information and use ofthe finance committee, management and members ofthe Brooks County Board ofEducation and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:as 2006YB-30

ell W. Hinton, CPA, CGFM State Auditor

Russell W. Hinton
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 1-156 Atlanta, Georgia 30334-8400
March 5, 2007

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Brooks County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH 0MB CIRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance ofBrooks County Board ofEducation with the types of compliance requirements described in the U.S. Office of Management and Budget (0MB) Circular A-133 Compliance Supplement that are applicable to its major Federal program for the year ended June 30, 2006. Brooks County Board of Education's major Federal program is identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements oflaws, regulations, contracts and grants applicable to its major Federal program is the responsibility of Brooks County Board of Education's management. Our responsibility is to express an opinion on Brooks County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and 0MB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and 0MB Circular A-133 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 Brooks County Board ofEducation's compliance with those requirements and performing such other procedures as we considered necessary in the

2006SA-10

circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Brooks County Board of Education's compliance with those requirements.
In our opinion, the Brooks County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to its major Federal program for the year ended June 30, 2006.
Internal Control Over Compliance
The management of Brooks 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 Brooks 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 0MB Circular A-133.
Our consideration ofthe internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements oflaws, regulations, contracts and grants caused by error or fraud 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 solely for the information and use of the finance committee, management, members of the Brooks County Board of Education, 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,
~ w..iH~
Russell W. Hinton, CPA, CGFM State Auditor
RWH:as 2006SA-10

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

BROOKS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2006

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

No matters were reported.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6141-05-01

Previously Reported Corrective Action Implemented

SECTION IV FINDINGS AND QUESTIONED COSTS

BROOKS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Brooks County Board of Education's financial statements was unqualified.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Brooks County Board of Education disclosed financial statement reportable conditions related to the following control category.
General Ledger
None ofthe reportable conditions described above are considered to be material weaknesses.
3. Noncompliance Material to the Financial Statements The audit of the Brooks 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 Brooks County Board of Education did not disclose any reportable conditions in internal control over its major program.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Brooks County Board ofEducation's report on compliance with requirements applicable to its major program was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-133 The Brooks County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-133.
7. Major Programs Federal award audited as a major program is as follows: 84.010 Title I Grants to Local Educational Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.
9. Low Risk Auditee The Brooks County Board ofEducation qualified as a low risk auditee as defined by Section .530 of 0MB Circular A-133.
- 1-

BROOKS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Failure to Report the Financial Statements in a Timely Manner Reportable Condition Finding Control Number: FS-6141-06-01

Condition:

The School District failed to submit the DE046 financial report to the Georgia Department of Education in a timely manner.

Criteria:

Chapter I Introduction to LUA Accounting ofthe Financial Management for Georgia Local Units of Administration indicates that "accounting records must provide meaningful, reliable, accurate and timely information to the many persons and groups with legitimate interests in the financial affairs of an LUA".

Questioned Cost: NIA

Information:

The School District's DE046 financial report was submitted to the Georgia Department of Education on October 4, 2006.

Cause:

Management failed to comply with the due date of September 30, 2006, as established by the Georgia Department of Education.

Effect:

The failure ofthe School District to prepare and submit the financial report in a timely manner prohibits legitimate users of the report from being able to have timely access to the financial information provided.

Recommendation:

The School District should implement controls to ensure that Georgia Department of Education policies and procedures are followed and implement procedures to ensure that the DE046 financial report is submitted in a timely manner.

GENERAL LEDGER Incomplete General Ledger/DE046 Financial Report Reportable Condition Finding Control Number: FS-6141-06-02

Condition:

The School District failed to include all fiscal year activity in the DE046 financial report submitted to the Georgia Department of Education.

-2-

BROOKS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2006

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

GENERAL LEDGER Incomplete General Ledger/DE046 Financial Report Reportable Condition Finding Control Number: FS-6141-06-02

Criteria:

Chapter 22 Annual Financial Reporting of the Financial Management for Local Units of Administration indicates that School Districts must prepare their financial statements in accordance with generally accepted accounting principles.

Questioned Cost: NIA

Information:

The following adjustments were necessary to present their financial statements in accordance with generally accepted accounting principles:

Food Inventory was not recorded in the School District's general ledger as required. No audit adjustment was made due to the amount being immaterial to the fair presentation of the basic financial statements.

All contracts payable were not recorded in the School District's general ledger as required. An audit adjustment of $26,618 was necessary to record contracts payable on construction contracts.

Long-term activity was not recorded in the School District's general ledger as required. An audit adjustment was necessary to record general obligation debt of $8,100,000 in the School District's governmental activities.

Cause:

Management failed to comply with the requirements of the Georgia Department of Education regarding financial reporting.

Effect:

The failure ofthe School District to maintain a complete and accurate general ledger can lead to inaccurate internal and external reporting.

Recommendation:

The School District should implement controls to ensure that Georgia Department of Education policies and procedures are followed and implement procedures to ensure that all financial data is properly recorded in the general ledger and reported in the DE046.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

-3-

SECTIONV MANAGEMENT'S RESPONSES

BROOKS COUNTY BOARD OF EDUCATION SCHEDULE OF MANAGEMENT'S RESPONSES
YEAR ENDED JUNE 30, 2006
Finding Control Number: FS-6141-06-01
We concur with this finding. The Financial Director will implement controls to ensure that Georgia Department of Education policies and procedures are followed and the DE046 financial report will be submitted in a timely manner.
Finding Control Number: FS-6141-06-02
We concur with this finding. Adjustments have been made to the general ledger and procedures will be implemented to ensure that all financial data is properly recorded in the general ledger and reported in the DE046.
Contact Person: Wanda Thompson, Finance Director Phone: (229) 263-7531 Fax Number: (229) 263-5206 E-mail Address: wthompson@brooks.kl2.ga.us