Audit report, Butts County Board of Education, Jackson, Georgia, year ended June 30, 1998

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AUDIT REPORT BUTTS COUNTY BOARD OF EDUCATION
JACKSON, GEORGIA YEAR ENDED JUNE 30, 1998

STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET
ATLANTA, GEORGIA 30334-8400

BurrS 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

6

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

31

Burrs COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

4 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

32

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

33

6

BY PROGRAM

34

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 INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

SECTIONm 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

CLAUDE L. VICKERS
STAlE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 3, 1999

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

98ARL-13A

* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.
* The Board did not report compensated absences within the general purpose financial statements as
required by generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries
and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To conform 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.
* Governmental Accounting Standards Board Technical Bulletin 98-1, Disclosures About Year 2000
Issues, requires disclosure of certain matters regarding the year 2000 issue in order for financial statements to be prepared in conformity with generally accepted accounting principles. Such required disclosures include:
<> Any significant amount of resources committed to make computer systems and other electronic equipment year 2000 compliant;
<> A general description ofthe year 2000 issue, including a description ofthe stages ofwork in process or completed as of the end of the reporting period to make computer systems and other electronic equipment critical to conducting operations year 2000 compliant.
<> The additional stages of work necessary for making the computer systems and other electronic equipment year 2000 compliant.
Butts County Board ofEducation has omitted such disclosures. We do not provide assurance that Butts County Board ofEducation is or will be year 2000 ready, that Butts County Board ofEducation's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Butts County Board of Education does business will be year 2000 ready.
The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material.
In our opinion, except for the effects of such adjustments, ifany, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service
98ARL-13A

inventories as discussed in the third paragraph, and except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Butts County Board of Education as of June 30, .1998, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated March 3, 1999, on our consideration ofthe Butts County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements ofthe Butts County Board ofEducation taken as a whole. The accompanying combining statements (Exhibits E through J) and the financial schedules (Schedules 1 through 6), 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 general purpose fmancial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effect of adjustments, if any, on the Special Revenue Fund, as might have been determined to be necessary had we been able to satisfy ourselves as to the accuracy of the food service inventories as discussed in the third paragraph, and except for the effects of the matters referred to in the fourth paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,
~~~
Claude L. Vickers State Auditor
CLV:jb 98ARL-13A

Burrs COUNTY BOARD OF EDUCAnON

BUTTS COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30. 1998

EXHIBIT "A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30,1998

JUNE 30,1997

$

16,383.99

$ 6,845,588.67 $ 2,072,713.96

4,064,903.45

1,750,351.47

221,497.72

25,525.08 11,709.42

$

16,383.99

16,383.99

8.493,616.01

8.493,616.01

26,711.35 11,575.37

$

16,383.99 $

8,510,000.00 $ 21,208,078.09 $ 2,332.498.40

$

14,967.08

$

34,160.68

30,885.04

109,871.60

92,911.92

2,410.46

7,190.77

117,249.55

$

8,510,000.00

8,510,000.00

$

8,510,000.00 $ 8,773,692.29 $

145,954.81

$

16,383.99

0.00

$

16,383.99

$

21,467.14 $

39,920.14

58,645.47

16,383.99

352.40

352.40

25,525.08 11,709.42 7,101,018.37 972,984.89 453,732.27
3,772,566.77
$ 12.434,385.80 $

26,711.35 11,575.37
-14,967.08 2,122,951.41 2,186,543.59

$

16,383.99 $

8,510,000.00 $ 21,208,078.09 $ 2,332.498.40

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

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 Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation
Capital Outlay Debt Service
Interest
Total Expenditures
Excess of Revenues over (undElr) Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds .
Par Value 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
Residual Equity Transfer

GENERAL FUND

SPECIAL REVENUE
FUND

$ 10,367,267.61 $ 722,00
5,870,760.34 204,294.02
$ 16,443,043.97 $

169,294,00 1,661,804,84
316,724.17
2,147,823.01

$ 9,096,406,80 $

853,485.55

759,124.84 477,509,70 440,987.04 355,740.46 1,174,730.47 111,338,86 1,252,273,90 722,288.14
32,341.00 228,076.02
50,499.06 109,068.40

61,261.34 28,468.26
8,005.03
6,188.78 90,974.10 1,045,112.29

$ 14,810,384.69 $ $ 1.632,659.28 $

2,093,495.35 54,327.66

$

$

-22,524.43

$

-22,524.43 $

$ 1,610,134.85 $ 1,958,945.76

15,587.67

22,524.43
22,524.43
76,852.09 227,012.44
-1,186,27 134,05

FUND BALANCE JUNE 30

$ 3,584,668,28 $

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

302,812.31

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30,1998

JUNE 30,1997

$ 1,508,006.97 $ 217,571.02
$ 1,725,577.99 $

$
86,738.75 35.20
86,773.95 $

10,536,561.61 $ 1,662,526.84 7,465,506.06
738,624.41
20,403,218.92 $

10,036,939.57 1,374,321.57 3,353,868.79 504,437.14
15,269,567.07

$

135,106.39

1,554,983.30

$

$ 1.690.089.69 $

$

35,488.30 $

$
86.738.75 86,738.75 $
35.20 $

9,949,892.35 $
820,386.18 505,977.96 440,987.04 363,745.49 1,174,730.47 246,445.25 1,252,273.90 728,476.92
32,341.00 319,050.12 1,095,611.35 1,664,051.70
86.738.75
18,680,708.48 $
1,722,510.44 $

9,203,031.29
755,317.60 405,961.13 420,457.57 341,195.46 1,006,259.28
82,149.49 1,161,504.26
691,003.99 34,235.00
720,679.71 1,080,236.44
169,798.54
16,071,829.76
-802,262.69

$ $ 8,510,000.00
$ 8,510,000.00 $ $ 8,545,488.30 $
-14,967.08

16,383.99 $ 16,383.99 $

16,383.99
8,510,000.00 22,524.43 $ -22.524.43
8,526,383.99 $

6,545.34 -6,545.34
0.00

16,419.19 $ 15,552.47

10,248,894.43 $ 2,186,543.59

-802,262.69 2,988,636.95

-15,587.67

-1,186.27 134.05 0.00

2,053.17 -1,883.84

$ 8,530,521.22 $

16,383.99 $ 12,434.385.80 $ 2,186,543.59

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Burrs COUNTY BOARD OF EDUCATION

COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES

BUDGET AND ACTUAL - (NON-GMP BASIS)

.

GENERAL AND SPECIAL REVENUE FUNDS

YEAR ENDED JUNE 3D. 1998

EXHIBITC

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

Burrs COUNTY BOARD OF EDUCATION

EXHIBIT liD"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Butts County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to, levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set 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 of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these fmancial 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 ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
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BUTTS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accwnulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt.
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 of these funds present increases (Le., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure 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.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (Le., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the 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 1998, a substantial nwnber of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment
-8-

Burrs COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
contracts had been earned, but two of the twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion of the compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Butts County Board ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal l.evel of budget control was established by the Board a. t the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general 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 fmal budget is then submitted, in accordance with provisions ofthe Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.
The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report:

-9-

BUTTS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Special Revenue
Fund

FUND BALANCE JULY 1, 1997

$ 227,012.44

Adjustments Inventories - July 1, 1997 Food Donated Commodities Purchased Foods

-26,711.35 " -11.575.37

Fund Balance July 1, 1997 (Budget Basis)

$ 188,725.72

Excess ofRevenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

76.852.09

FUND BALANCE JUNE 30, 1998 (Budget Basis)

$ 265.577.81

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.

INVESTMENTS

COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Participating interest-earning contracts and money market investments with a maturity at purchase greater than one year and equity investments are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return 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,

- 10-

Burrs COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,

(4) Obligations of any corporation ofthe United States government,

(5) Prime banker's acceptances,

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

(7) Repurchase agreements, and

(8) Obligations of other political subdivisions ofthe 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 Butts County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on June 12, 1997 (levy date). Taxes were due on September 5, 1997 and could be paid in two installments on September 5, 1997 and December 5, 1997 (due dates). The lien date for property taxes was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Butts County Tax Commissioner bills and collects the property taxes for the Board of Education, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

The tax millage rate levied for the 1997 tax year (calendar year) for the Butts County Board ofEducation was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

~mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and or debt service. Special Purpose Local Option Sales Tax collected by the State and remitted to the Board during the fiscal year amounted to $1,594,745.72 and was recorded in the Capital Projects and Debt Service Funds. The

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BurrS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
State will terminate collection ofthis tax once an additional $8,688,779.28 has been collected or on June 30, 2002 whichever occurs first.
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purc~ed foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food 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.
COMPENSATED ABSENCES
Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general purpose fmancial statements.
However, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources is material to the general purpose financial statements and has not been recorded in the General Long-Term Debt Account Group as required by generally accepted accounting principles.
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
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BurrS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Residual equity transfers are recorded for nonrecurring or nonroutine permanent transfers of equity.
Operating transfers are recorded for all interfund transactions other than residual equity transfers and 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 or results of operations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation ofthis data.
Note 2: 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 ofinsurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone ofor any combination ofthe 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 ofindebtedness or other direct obligations ofthe United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates ofindebtedness or other obligations ofthe countiesor municipalities ofthe State of Georgia,
(5) Bonds ofany public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and
- 13 -

Burrs COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

(7) Bonds, bills, notes, certificates ofindebtedness, or other obligations ofa subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal 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, 1998, the bank balances were $7,612,852.51. The amounts of the total bank balances are classified into three categories of credit risk:

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

The Board's deposits are classified by risk category at June 30, 1998, as follows:

Risk Category

Bank Balance

1

$ 1,425,466.20

2

2,417,706.43

3

3,769,679.88

Total

$ 7.612.852,51

CATEGORIZATION OF INVESTMENTS Investments are classified as to risk by the three categories described below:

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

- 14-

BurrS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS AND INVESTMENTS

At June 30, 1998, the carrying value ofthe Board's total investments was $3,964,903.45. The investments are classified as to risk categories as follows:

Type ofInvestment

Risk Categories

2

3

Canying Amount

Fair
Value

Repurchase Agreements

$

o00 $,

O~O~O $ 3 964,903 45 $ 3,964,903.45 $ 3 964,903.45

Note 3: NON-MONETARY TRANSACTIONS

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

Note 4: RISK MANAGEMENT

The Board 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; natural disaster and unemployment compensation.

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

The Board has elected to self-insure for all losses related to natural disaster, except for the commercial insurance obtained for flood loss at the Henderson Middle School Gym. The Board has not experienced any losses related to natural disaster in the past three years.

The Board is self-insured with regard to unemployment compensation claims. A premium is charged when needed by the General Fund to each user fund on the basis of the percentage of that fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The Board accounts for claims 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:

1997 1998

Beginning ofYear Liability

Claims and Changes in Estimates

$

0.00 $

5,522.00 $

$

0.00 $

0.00 $

Claims Paid

End ofYear Liability

5,522.00 $

0.00

0.00 $

0.00

- 15 -

BUITS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 4: RISK MANAGEMENT

The Board participates in the Georgia School Boards Association Workers' Compensation Fund, a public entity risk pool organized on July 1, 1992 to develop, implement, and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Fund for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Fund with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Fund in excess of$350,000.00 loss per occurrence, up to the statutory limit. Also, should losses within the retained limit of $350,000.00 aggregate to more than seventy-five percent (75%) of the standard experience rated premium during the policy term, the policy with the United States Fidelity and Guaranty Company will pay the next $1,000,000.00 ofloss.

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

Position Covered

Amount

Superintendent All Employees

$ 100,000.00 $ 50,000.00

Note 5: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

Amount

General Government - Series 1997

3.85% - 4.20% $ 8,510,000.00

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

General Obligation
Bonds

Balance July 1, 1997

$

0,00

Additions

8.510,000.00

Balance June 30, 1998

$ 8,510,000.00

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

- 16-

BUTTS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30

General Obligation
Bonds

1999

$ 1,710,197.50

2000

1,758,540.00

2001

1,874,302.50

2002

1,996,162.50

2003

2,123,680.00

Total Principal and Interest

$ 9.462.882.50

Note 6 ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$196,941.58 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of$146,088.38

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $6,750.20

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 $44,103.00

Note 7: SIGNIFICANT COMMITMENTS

Governmental Accounting Standards Board Technical Bulletin 98-1 requires certain disclosures in the Notes to the General Purpose Financial Statements concerning an entity's computer related year 2000 readiness. These disclosures, which are necessary to comply with generally accepted accounting principles, have not been made by the Board.

The following is an analysis of significant outstanding construction or renovation contracts executed by the Board as of June 30, 1998, together with funding available:

- 17-

Burrs COUNTY BOARD OF EDUCATION

EXlllBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30,1998

Note 7: SIGNIFICANT COMMITMENTS

Project

Unearned Executed Contracts

Funding Available From State

99/98S-618-002 Jackson High School Renovations

$ 9,013,744.96 $ 4,606,888.00 1,753,938.91

$10.767.683.87 $ 4.606.888.00

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 Board believes that such disallowances, if any, will be immaterial to its overall ftnancial position.

Note 9: ACCUMULATED EMPLOYEES' LEAVE
All employees earn sick leave days at arate ofone and one-quarter (1.25) days per month (for a total of 11.25
days for nine month personnel, 12.50 days for ten month personnel, 13.75 days for eleven month personnel, and 15 days for twelve month personnel). Unused leave days may be carried over from one year to the next with a maximum accumulation of seventy (70) days.

When an employee, who is eligible for renewal ofemployment, retires from the Butts County School System with a minimum offtve consecutive years of service in the system immediately preceding retirement and is eligible to draw retirement from the applicable State retirement system, said employee shall receive thirty dollars for each day of earned but unused accumulated sick leave.

Twelve month employees earn vacation at the rate often days per year (one day per 23 days worked for 230 day employees; one day per 24 days worked for 240 day employees). Vacation days may be accumulated from year to year, to a maximum oftwenty (20) days. Employees will be paid at their current rate of pay, for vacation days earned but not taken at the time ofresignation, retirement, or other termination ofemployment, up to maximum often (10) days. See Note 1- Compensated Absences

- 18-

BUTTS COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1998

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 Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board 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 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998

100%

$ 1,054,203.85

1997

100%

$ 964,321.10

1996

100%

$ 887,303.97

- 19-

ASSETS Cash and Cash Equivalents Investments Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Total Assets

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

EXHIBIT"E"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30,1998 JUNE 30,1997

$ 137,481.72 $

0,00 $

44,656.87 $ 182,138.59 $ 156,122.24

100,000.00

100,000,00

6,860.00

123,021.96

129,881.96

185,927.06

25,525.08 11,709,42

25,525.08 11,709.42

26,711.35 11,575,37

$ 281,576,22 $

0,00 $ 167,678.83 $ 449,255,05 $ 380,336,02

see notes to the general purpose financial statements,

-20-

see notes to the general purpose financial statements.

- 21 -

BUTTS COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1998

ASSETS Cash and Cash Equivalents Investments Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Retainages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purpose of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Deficit Undesignated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

$

2,785.69 $ 3,136,114.92

3,964,903.45

$

2,785.69 $ 7,101,018.37

$ 7,101,018.37

$ _ _--.;2=,7.;....;8;;.;;;5..;.;;.6;.;;....9

$

2,785.69 $

0.00 7,101,018.37

$

2,785.69 $ 7,101,018.37

See notes to the general purpose financial statements. -22 -

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1998

JUNE 30, 1997

$

504,041.99 $

757,383.95 $ 4,400,326.55 $

10,717.51

3,964,903.45

282,540.n

282,540.n

$

504,041.99 $ 1,039,924.72 $ 8,647,no.n $===1.:.!O,.7..1.=7=.5:::i:1

$

25,684.59

$

50,309.72 $

66,939.83 $ _ _.:..;11:..:..7,=24..:.:9=.5~5

$

50,309.72 $

66,939.83 $

117,249.55 $ _ _-=2:=.5'r.=.684=.5~9

$ 7,101,018.37

$

972,984.89

972,984.89

$

453,732.27

453,732.27

$

-25,684.59

0.00

0.00

2,785.69

10,717.51

$

453,732.27 $

972,984.89 $ 8,530,521.22 $

-14,967.08

$

504,041.99 $ 1,039,924.72 $ 8,647,no.n $===1=.O'r.;,,71=7=.5==1

-23-

BUTTS COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 1998

FUND BALANCE JUNE 30

$

2,785.69 $ 7,101,018.37

See notes to the general purpose financial statements. -24 -

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT
COMMISSION

SPECIAL PURPOSE LOCAL OPTION
SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

$

0.00 $

1,508,006.97 $

1,508,006.97 $

0.00

2,539.51

217,571.02

$

0.00 $ 1,510,546.48 $ 1,725,577.99 $

---::;O=.O~O

$

19,060.89 $

0.00 $

135.106.39

15.000.00 791,162.30

15,000.00 1.539,983.30 $

$

825,223.19 $

0.00 $ 1,690.089.69 $

$

-825,223.19 $ 1,510,546.48 $

35,488.30 $

75,684.59 75,684.59 -75,684.59

$ 1,278,955.46 $
$ 1.278,955.46 $

$

453,732.27 $

0.00

$ -511,877.00 -51t877.00 $

8,510.000.00 1.278,955.46 -1,278,955.46
8,510,000.00

998,669.48 $ -25,684.59

8.545,488.30 $ -14,967.08

-75,684.59 60,717.51

$

453,732.27 $

972,984.89 $ 8,530,521.22 $ _ _=-1=4,=96=7:=.0=8

-25-

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

EXHIBIT "I"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 3D, 1998

JUNE 3D, 1997

$

0.00 $

16,383.99 $

16,383.99 $

15,368.30

184.17

$

0.00 $

16,383.99 $

16,383.99 $

1_5..,,5.5.2. .4. .7 _

FUND EQUITY

Fund Balances

Reserved

For Debt Service

Unreserved

Undesignated

$

Total Fund Equity

$

$ O::.:.=.:OO~

16,383.99 $ 0.00

16,383.99 0.00 $ _ _....;1..;.5=,5=52;;.;".4.;,,;;7_

0.00 $

16,383.99 $

16.383.99 $ =====-=1.5.'.=:,5.5.2.;;,;,,4=7..

See notes to the general purpose financial statements.

-26-

See notes to the general purpose financial statements.

27 -

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

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U, S, Department of Pass-Through from Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1) Pass-Through from Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 1998 Contract
Total U. S. Department of Agriculture
Education, U. S. Department of Pass-Through from Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1998 Grant Tille" Eisenhower Professional Development 1998 Grant Title VI Innovative Education Program Strategies 1998 Grant Goals 2000 State and Local Education Systemic Improvement Grant 1998 Grant Individuals with DisabUities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant Tech-Prep Education 1998 Grant Pass-Through from Griffin Regional Educational Service Agency Safe and Drug-Free Schools 1998 Grant
Total U. S. Department of Education
Federal Emergency Management Agency Pass-Through from Office of the Governor Disaster Assistance
Labor. U. S. Department of Pass-Through from West Georgia Private IndUStry Council Job Training Partnership Act 97-5YP-02

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 10.553
* 10.555 10.550

NlA $
NlA NlA

128.620.15
456,953.53 $ 76.746.83

(2)
968.365.46 (3) 76.746.83

10.558

NlA $

3.498.23 665.818.74 $

(2) 1.045,112.29

84.010 84.281 84.298 84.276

NlA $ NlA NlA NlA

521.021.96 $ 17.500.00 16.914.00
257,000.00

541,392.60 (3) 14,484.30 16,914.00
201,380.93 (3)

84.027

NlA

84.173

NlA

111,229.60 23.096.00

111,229.60 23.096.00

84.048 84.243
84.186

NlA NlA
NlA $

26,673.86 1,562.08
14,748.00 989,745.50 $

26,949,01 (3) 1.562.08
14.748,00 951.756,52

83,516

NlA $

722.00

(4)

17.250

NlA $

6.240.60 $

6.435,35 (3)

Total Federal Financial Assistance NlA = Not Available

- 28-

$

1.662.526.84 $

2.003.304.16

BUTTS COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30. 1998
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 current fiscal year.
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast Program were not maintained separately and are included in the 1998 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Expenditures on this program were not maintained by fund source.
Major Programs are identified by an asterisk (*) in front of the CFDA number.
The Board did not provide Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Butts County Board of Education and is presented on the modified accrual basis of accounting which is the same basis of accounting used in the presentation of the general purpose financial statements.

See notes to the general purpose financial statements.

- 29-

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

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment At-Risk Summer School Program Health Insurance Innovative Programs Mentor Teacher Program Pay for Performance Program Preschool Handicapped Program Remedial Summer School Program Student Records Teachers'Retirement Lottery Programs Instructional Technology Assistive Technology Classroom Technology
Office of the Governor Disaster Assistance
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 6,226,061.00 778,274,00 104,654,00 257,142.00 78,599.00
1,731,390.00
287,828.00 88,829.00
226,877.00 384,542.00
79,406.00 238,477.00
28,674,00 28,842.00 -1,186,502.00 568,439.00
$ 1,314,00
71,378.00 20,234.79 146,088.38
5,000.00 5,076.00 104,000.00 32,341.00 3,886.74 5,485.50 6,750.20
78.00
44,103.00

$ 80,776.00

6,226,061.00 778,274.00 104,654.00 257,142.00 78,599,00
1,731,390.00
287,828,00 88,829,00
226,877.00 384,542.00 79,406.00 238,477.00 28,674.00 28,842.00 -1,186,502.00 568,439.00 80,776.00
1,314.00
71,378.00 20,234,79 146,088.38
5,000.00 5,076,00 104,000.00 32,341,00 3,886.74 5,485,50 6,750.20

5,926,00 82,592.00

5,926,00 82,592.00

78.00

44,103.00

$ 10,367,267.61 $

169,294.00 $ 10,536,561.61

See notes to the general purpose financial statements.

- 30-

BUTTS COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30. 1998

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

Acquiring, constructing, and equipping a

new middle school; constructing, installing

and equipping additional classrooms

at Jackson High School; renovating the

.existing middle school and elementary/

primary school complex; and acquiring

necessary property, both real and

personal, necessary therefore.

$

10,283,525.00 $

10,283,525.00 $

1,680,739.62 $

25,684.59

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

See notes to the general purpose financial statements. - 31 -

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

SCHEDULE "4"

EXPENDITURES
Current Instruction

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

TOTAL

$

6,207.25 $

83,983.94 $ _ _=90=,1=9..1..=.1.9.

RECAP: Other Expenditures Instructional Technology Assistive Technology Classroom Technology

$

6,207.25

83,983.94

$

90,191.19

See notes to the general purpose financial statements. -32 -

BUTTS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

7.604.608,00 $ _ _..,;;2=2'"'"'4....;.;46;..;;8..;.;;.0~0

$

7,988.234,22

757.324.n $ _ _...;:6;.:;;3::.12,.;::,;50::..::5~.4~6

$

8,745,558,99

176,228.31 $ _ _.:;.8.L:;.5.;:,;69;.r.;.3:;.,:3;.:,0;,.:;,6,;,.8

$

0,00 $=====0=,0:=0

See notes to the general purpose financial statements. - 33 -

BUTTS COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REqUIREMENTS BY PROGRAM
GENERAL FUND QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1998

SCHEDULE "6"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

564,094.80 $

623,331.79 $

32,596.85 $

655,928.64

1,650,194.10

1,559,633.56

146,656.28

1,706,289.84

$ 2,214,288.90 $ 2,182,965,35 $

179,253.13 $ 2,362,218.48 $

0.00

770,167.80

879,086.95

104,591.78

983,678.73

0.00

1,219,438.80

1,554,329.56

141,946.76

1,696,276.32

0.00

889,526.10

1,167,255.48

84,206.95

1,251,462.43

0.00

314,486.10

391,873.26

40,405.80

432,279.06

0.00

434,024.20

586,986.40

47,184.72

634,171.12

0.00

$ 5,841,931.90 $ 6,762,497.00 $

597,589.14 $ 7,360,086.14

$

666,938.70

$

192,609.28 $ 427,264.95
90,725.73 23,807.71

3,582.42 $ 19,596.25 2,910.19
0.00

196,191.70 446,861.20
93,635.92 23,807.71

$

666,938.70 $

734,407.67 $

26,088.86 $

760,496.53

0.00

33,507.90

89,287.55

7,816.52

97,104.07

0.00

$

700,446.60 $

823,695.22 $

33,905.38 $

857,600.60

$

94,188.60 $

93,491.00 $

1,010.94 $

94,501.94

0.00

$ 6.636,567.10 $ 7,679,683.22 $

632,505.46 $ 8,312,188.68

$

187,398.90 $

308,551.00

$

308,551.00

0.00

44,028.90

$

124,819.31

124,819.31

0.00

$

231,427.80 $

308,551.00 $

124,819.31 $

433,370.31

$ 6,867,994.90 $ 7,988,234.22 $

757,324.77 $ 8,745,558.99 $

0.00

$

22,828.00

55,771.00

$ ..... 78..,5;:;;9.90..0.

$

68,756.48 $

68,756.48

12,049.16

12.049.16

$

80,805.64 $

80,805.64 $

.....==0;;..00"=

- 35 -

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 3,1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Butts 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 Butts County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated March 3, 1999. This report was qualified for a scope limitation and for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. Except as discussed in the following paragraph, we conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
We did not observe the taking of either the Federal donated commodities inventory or the purchased foods inventory at June 30, 1998, nor could we satisfy ourselves as to the accuracy of the amounts stated as inventories through alternative procedures.
Compliance
As part of obtaining reasonable assurance about whether Butts County Board of Education's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination 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 of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

98YB-40

Internal Control Over Financial Reporting
In planning and performing our audit, we considered Butts County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in our judgement, could adversely affect Butts County Board ofEducation's ability to record, process, sunlmarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FS-6181-98-02.
A material weakness is a condition in which the design or operation of one or more ofthe internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of 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, the reportable condition described above, is considered to be a material weakness.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
??~~,.J
Claude L. Vickers State Auditor
CLV:jb 98YB-40

CLAUDE L. VICKERS
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 3, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Butts County Board ofEducation
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH QMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Butts County Board of Education with the types of compliance
requirements described in the u.s. Office ofManagement and Budget (OME) Circular A-133 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Butts County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings 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 Butts County Board of Education's management. Our responsibility is to express an opinion on Butts County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB 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 Butts County Board ofEducation'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 Butts County Board of Education's compliance with those requirementS.

98SA-I0

In our opinion, the Butts County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ended June 30, 1998.
Internal Control Over Compliance
The management ofButts County Board ofEducation 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 Butts County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A133.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation ofone or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~...,.,,;r: ~.J
Claude L. Vickers State Auditor
CLV:jb 98SA-1O

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

BUTTS COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE.
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 1998

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6181-93-01 6181-96-01 FS-6181-97-01

Further Action Not Warranted Unresolved - See Corrective Action/Responses Unresolved - See CorrectiveAction/Responses

CORRECTIVE ACTIONIRESPONSES

EXPENDlTURESILIABILITIESfDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $352.40 Finding Control Number: 6181-96-01

This finding will be resolved by the Georgia Department ofEducation through a future increase in the Board's local fair share portion of QBE Allotments.

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: 6181-97-01

Due to budgetary constraints, the Board is unable to increase staff necessary to clear this finding. The Board believes it provides appropriate staffto perform accounting functions. With the present staff limitations, this finding cannot be totally resolved.

SECTIONN FINDINGS AND QUESTIONED COSTS

Burrs COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
I SUMMARY OF AUDITOR'S RESULTS
1. Type of Report Issued on the Financial Statements The auditor's opinion on the Butts County Board of Education's financial statements was qualified for a scope limitation and for various departures from generally accepted accounting principles.
2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Butts County Board of Education disclosed a financial statement reportable condition related to the following control category.
General Fixed Assets
The reportable condition described above is considered to be a material weakness.
3. Noncompliance Material to the Financial Statements The audit ofthe Butts County Board ofEducation disclosed no instances ofnoncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Butts County Board of Education did not disclose any reportable conditions in internal control over major programs.
5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Butts County Board of Education's report on compliance with requirements applicable to major programs was unqualified.
6. Audit Findings Required to be Reported by Section .510(a) ofOMB Circular A-B3 The Butts County Board of Education's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-B3.
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee
The Butts County Board of Education was audited as a low risk auditee based on a waiver granted by the U. S. Department of Education.
- 1-

BurrS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1998
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS Uncollateralized Deposits Nonmaterial Noncompliance Finding Control Number: FS-6181-98-01
The Butts County Board ofEducation failed to have its bank balances fully collateralized as provided for by the Qfficial Code of Georgia Annotated Section 45-8-12 which states, in part, as follows:
"The collecting officer or officer holding public funds may not have on deposit at any time in any depository for a time longer than ten days a sum of money belonging to the public body when such depository has not given bond to the public body as set forth in this code section... The aggregate ofthe face value of such surety bond, and the market value ofsecurities pledged, shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance".
This noncompliance occurred because ofmanagement's failure to adequately monitor the collateralization of balances at individual banks. The Board should implement procedures to monitor the collateralization of bank balances to ensure compliance at all times with State laws governing deposits and investments.
Management's Response:
We concur with this fmding. We have communicated with individual banks to ensure that future deposits will be adequately collateralized as required by State law.
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-6181-98-02
The Butts County Board ofEducation 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 Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but 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.
-2-

BurrS COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1998 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-6181-98-02 Management's Response: We concur with this finding, however due to budgetary constraints, the Board is unable to increase staff necessary to clear this finding. The Board believes it provides appropriate staff to perform accounting functions. With the present staff limitations, this finding cannot be totally resolved. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
-3-