Audit report, Calhoun County Board of Education, Morgan, Georgia, year ended June 30, 1996

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AUDIT REPORT CALHOUNCOUNTYBOARDOFEDUCATION
MORGAN, GEORGIA YEAR ENDED JUNE 30, 1996

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

CALHOUNCOUNTYBOARDOFEDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXIDBITS .

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

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

5

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

6

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

SCHEDULES

I SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE

24

2 CASH AND CASH EQUIVALENTS

26

3 ACCOUNTS RECEIVABLE

27

SCHEDULE OF REVENUE

4

STATE

28

5

TAXES AND OTHER

29

CALHOUNCOUNTYBOARDOFEDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

SCHEDULE OF EXPENDITURES BY OBJECT

6

GENERAL AND SPECIAL REVENUE FUNDS

30

7

LOTTERY PROGRAMS

31

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

8

OVERALL

33

9

BY PROGRAM

34

10 SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS

36

SECTION II
COMPLIANCE
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS
SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

SECTION III
INTERNAL CONTROL
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS

CALHOUNCOUNTYBOARDOFEDUCATION -TABLE OF CONTENTS-
SECTIONN FINDINGS AND IMPROPER OR QUESTIONED COSTS SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS

SECTION I FINANCIAL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 11, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Calhoun County Board of Education .
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
Ladies and Gentlemen:
We have audited the general purpose financial statements (Exhibits A through D) of the Calhoun County Board of Education, as of and for the year ended June 30, 1996, as listed in the table of contents. These financial statements are the responsibility of the Board's management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the provisions of the Office of Management and Budget Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose 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.
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:
* 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.

96ARL-13

* 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, 1996, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1996. Also funds received, subsequent to June 30, 1996, from the Georgia Department of Education for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1995, were improperly recorded in the year ended June 30, 1996. 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.
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 on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements present fairly, in all material respects, the financial position of the Calhoun County Board of Education as of June 30, 1996, 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 a report dated June 11, 1997, on our consideration ofthe Board's internal control structure and a report dated June 11, 1997, on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the general purpose financial statements of the Calhoun County Board of Education taken as_a whole. The combining statements (Exhibits E through H) and the financial schedules (Schedules 1 through 10 which includes the Schedule of Federal Financial Assistance) are presented for purposes ofadditional analysis and are not a required part ofthe general purpose financial statements of the Calhoun County Board of Education. Such information has been subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and, in our opinion, except for the effects of the matters referred to in the third 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,
cf'~
Claude L. Vickers State Auditor
CLV:dt 96ARL-13

CALHOUN COUNTY BOARD OF EDUCATION -I-

CALHOUN COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1996

ASSETS
Cash and Cash Equivalents
Accounts Receivable
Inventories Food Donated Commodities Purchased Food
Amount to be Provided in Future Years For Payment of Capital Lease Agreements

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$

849,616.21 $

184,324.07 $

71,860.00

9,020.46

74,874.10

1,722.58 2,369.45

Total Assets

$

858,636.67 $

263,290.20 $ ==7=1==,8=6=0.=00=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Capital Lease Agreements
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Program For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For State Capital Outlay Project
Unreserved Designated for Self-Insurance Undesignated
Total Fund Equity

$

9,671.39 $

24,939.52

13,122.56

89,680.70

1,697.26

22,601.70

$

24,491.21 $

137,221.92

$

5,148.28

$

2,234.18

823.50

1,722.58 2,369.45
$

$

7,382.46 $

4,915.53 $

23,279.73 803,483.27

121,152.75

$

834,145.46 $

126,068.28 $

71,860.00 71,860.00
0.00 71,860.00

Total Liabilities. and Fund Equity

$

858,636.67 $

263,290.20 $

71,860.00

=======

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

EXHIBIT"A"

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS (Memorandum Only) JUNE 30, 1996 JUNE 30, 1995

$ 1,105,800.28 $ 1,023,780.35

83,894.56

138,120.74

$ _ _ _ _50....._,2_9'--4--'.6_0

1,722.58 2,369.45
50,294.60

6,414.95 1,786.37
82,905.44

$ ======50=,2=94=.6=0 $ 1,244,081.47 $ 1,253,007.85

$

34,610.91 $

18,670.43

102,803.26

71,559.33

24,298.96

13,310.76

$

50,294.60

50,294.60

82,905.44

$

50,294.60 $ 212,007.73 $ 186,445.96

$

5,148.28

823.50 $

2,234.18

276.55 198.21

1,722.58 2,369.45 71,860.00

6,414.95 1,786.37

$

84,157.99 $

8,676.08

23,279.73 924,636.02

24,238.73 1,033,647.08

$ 1,032,073.74 $ 1,066,561.89

$ ======5=0,=29=4=.6=0 $ 1,244,081.47 $ 1,253,007.85

-3 -

CALHOUN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30.1996

EXHIBIT"B"

GENERAL FUND

SPECIAL REVENUE
FUND

CAPITAL PROJECTS
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

REVENUES

State Funds Federal Funds Taxes and other Funds

$ 4,206,381.85 $ 8,360.91
1,023,548.86

263,605.99 $ 809,495.43 46,736.79

0.00 $

4,469,987.84 $ 817,856.34
1,070,285.65

4,004,172.60 746,896.43
1,084,934.34

Total Revenues

$ 5,238,291.62 $ 1,119,838.21 $

0.00 $ 6,358,129.83 $ 5,836,003.37

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 Community Service Operations Other Operations of Non-Instructional Services
Capital Outlay Debt Service
Principal Interest

$ 3,164,228.81 $
101,997.08 101,943.17 149,587.95 200,478.58 452,341.07 66,101.18 472,411.84 308,809.87
7,134.50
9,338.42 81,883.97
32,610.84 5,566.88

515,444.11
28,964.92 44,916.85
60,480.95
9,811.88 680.07 40.28
5,803.17 511,937.63
$

$ 3,679,672.92 $ 3,362,388.84

55,994.67

130,962.00 146,860.02 149,587.95 260,959.53 452,341.07 66,101.18 482,223.72 309,489.94
40.28 12,937.67 511,937.63 9,338.42 81,883.97 55,994.67

159,390.04 110,206.75 125,624.03 246,348.00 419,074.88 58,819.89 471,581.15 411,348.53
5,865.27 439,391.27
4,977.43 58,760.70 74,378.27

32,610.84 5,566.88

35,771.56 2,406.16

Total Expenditures

$ 5,154,434.16 $ 1,178,079.86 $ 55,994.67 $ 6,388,508.69 $ 5,986,332.77

Excess of Revenues over (under) Expenditures

$

83,857.46 $ -58,241.65 $ -55,994.67 $

-30,378.86 $ -150,329.40

OTHER FINANCING SOURCES (USES)

Capital Leases Operating Transfers In Operating Transfers Out

$ $ -142,576.87

14,722.20 $

127,854.67 $

$
142,576.87 -142,576.87

84,056.00 78,213.90 -78,213.90

Total Other Financing Sources (Uses)

$ -142,576.87 $

14,722.20 $ 127,854.67 $

o.oo s _ _ _84~,o_5_6_.o_o

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $

-58,719.41 $

-43,519.45 $

71,860.00 $

-30,378.86 $

-66,273.40

FUND BALANCE JULY 1

892,864.87

173,697.02

0.00

1,066,561.89

1,130,554.41

Food Inventory - Net Change in Period Donated Commodities Purchased Food

-4,692.37 583.08

-4,692.37 583.08

1,803.68 477.20

FUND BALANCE JUNE 30

$ 834,145.46 $ 126,068.28 $

71,860.00 $ 1,032,073.74 $ 1,066,561.89

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

CALHOUN COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1996

EXHIBIT"C"

REVENUES
State Funds Federal Funds Taxes and 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 Community Service Operations Other Operations of Non-Instructional Services
Capital Outlay Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Other Uses
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1, 1995
Adjustments Food Inventory
Donated Commodities Purchased Food

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 4,056,797.00 $ 4,206,381.85 8,360.91
1,003,738.00 1,023,548.86
$ 5,060,535.00 $ 5,238,291.62

$ 3,149,080.59 $ 3,164,228.81

142,586.00 87,740.00 149,569.00 218,218.00 485,868.00 60,850.00 483,630.20 374,639.00

101,997.08 101,943.17 149,587.95 200,478.58 452,341.07 66,101.18 472,411.84 308,809.87

6,800.00

7,134.50

11,265.00 63,584.00

9,338.42 81,883.97
38,177.72

$ 5,233,829.79 $ 5,154,434.16

$ -173,294.79 $

83,857.46

$ -266,000.00 $ -142,576.87 $ -266,000.00 $ -142,576.87

$ -439,294.79 $ 846,241.08 -3,507.26

-58,719.41 892,864.87

FUND BALANCE JUNE 30, 1996

$ 403,439.03 $ 834,145.46

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 168,880.00 $ 263,605.99

820,775.00

809,495.43

62,080.00

46,736.79

$ 1,051,735.00 $ 1,119,838.21

$ 391,024.00 $ 515,444.11

13,855.00 70,702.68

28,964.92 44,916.85

59,281.00

60,480.95

21,604.00 2,438.00
14,368.00 475,526.00

9,811.88 680.07 40.28
5,803.17 511,937.63

$ 1,048,798.68 $ 1,178,079.86

$

2,936.32 $ -58,241.65

$

0.00 $ 14,722.20

$

0.00 $ 14,722.20

$

2,936.32 $ -43,519.45

187,569.16

173,697.02

3,590.18

-4,692.37 583.08

$ 194,095.66 $ 126,068.28

The notes to the general purpose financial statements are an integral part of this statement. -5-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Calhoun County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board and Superintendent, both elected by the voters. With the exception of the departures from generally accepted accounting principles disclosed in these notes, the financial statements of the Board have been prepared in conformity with generally accepted accounting principles as applied to governmental units and unless otherwise disclosed in these notes, the financial statements present all of the fund types and account groups of the Board. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.
The more significant of the Board's accounting policies are described below.
REPORTING ENTITY
In evaluating how to define the governmental unit for financial reporting purposes, management has considered the criteria set forth in GASB Codification of Governmental Accounting and Financial Reporting Standards, Section 2100, "Defining the Financial Reporting Entity". The primary government consists of all the organizations that compose the legal entity of the Calhoun County Board of Education.
Based upon the application of the above criteria, the Calhoun County Board of Education is determined to be the lowest level of government exercising oversight responsibility and control over all activities related to public education in Calhoun County, Georgia. The Board is not included in any other governmental "reporting entity" as defined by GASB Codification of Governmental Accounting and Financial Reporting Standards.
Board members were elected by the public and have decision making authority, the power to designate management, except for the Superintendent who was also elected, the ability to significantly influence operations, and primary accountability for fiscal matters. The Board determines the millage rate at which school taxes are levied and may incur bonded indebtedness with voter approval.
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.

-6-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements.
The general purpose financial statements account for all State, Federal, Taxes and Other funds under control of the Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a 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 of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are primarily received from the Georgia Department of Education and from the Federal government to accomplish specific objectives and are required to be accounted for separately.
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - used to account for material capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
-7-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, intergovernmental grants and investment income. Property taxes are considered available if they are collected and remitted by the collecting agent to the Board within 60 days after fiscal year-end.
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 1996, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1995 and ending in early June 1996. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1995 and ending in August 1996. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1996, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1996, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1996. Also, the State's portion of the compensation paid in July and August 1996 was received and recorded as revenue in the fiscal year subsequent to June 30, 1996. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1995, were recorded in the year ended June 30, 1996. 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 Calhoun County Board of Education'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 level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.

-8-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper 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 final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits (including certificates of deposit and N.O.W. accounts) 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. The placement of proceeds from bond issues in certificates of deposit is limited to financial institutions located within this State.

RECEIVABLES

Receivables consist of grant reimbursements due from State or other grantors 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 Calhoun County Board of Commissioners fixed the property tax levy for the 1995 tax year (calendar year) on August 30, 1995 (levy date). Taxes were due on December 20, 1995. The lien date for property taxes was January 1, 1995. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1996 since their collection meets the criteria of GASB codification section P70.103. The Calhoun 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 1995 tax year (calendar year) for the Calhoun County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

I 1.01 mills

-9-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time 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.
FUND BALANCES UNRESERVED - DESIGNATED
Designated fund balances represent tentative plans for future use of financial resources.
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.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY -TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position 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 of this data.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured py 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 shall be equal to not less than 110 percent of the public funds being secured

- 10 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 2: DEPOSITS
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 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 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, 1996, the bank balances were $1,525,618.15. The amounts of the total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the Board or by the Board's agent in the Board's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the Board's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the Board's name.)
- 11 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 2: DEPOSITS

The Board's deposits are classified by risk category at June 30, 1996, as follows:

Risk Category
1 2 3
Total
Note 3: NON-MONETARY TRANSACTIONS

Bank Balance
$ 100,188.78 1,425,429.37 0.00
$ 1,525,618.15

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

Note 4: RISK MANAGEMENT

The Board is exposed to various risks 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 ofloss associated with torts and assets. 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. In addition, the Board has elected to self-insure for errors or omissions, which includes, among other risks, risks for sexual harassment and discrimination. The Board has not experienced any losses related to these risks 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 of that loss can be reasonably estimated.

- 12 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 4: RISK MANAGEMENT

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

1995 1996

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

634.00 $

$

0.00 $

959.00 $

Claims Paid

End ofYear Liability

634.00 $

0.00

959.00 $

0.00

The Board participates in the Georgia Education and Government Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991 to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the Continental Insurance Company to provide coverage for potential losses sustained by the Trust in excess of $250,000.00 loss per occurrence, up to $1,000,000.00.

Note 5: GENERAL LONG-TERM DEBT

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

The changes in General Long-Term Debt during the fiscal year ended June 30, 1996, were as follows:

Capital Leases

Balance July 1, 1995

$ 82,905.44

Deductions Payments

32,610.84

Balance June 30, 1996

$ 50,294.60

At June 30, 1996, payments due, by fiscal year which includes principal and interest for these items are as follows:

- 13 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 5: GENERAL LONG-TERM DEBT

Fiscal Year Ended June 30
1997 1998 1999
Total Principal and Interest
Deduct: Imputed Interest
Net Present Value of Future Minimum Lease Payments
Note 6: ON-BEHALF PAYMENTS

Capital Leases
$ 19,042.40 19,042.40 19,042.40
$ 57,127.20
6,832.60
$ 50,294.60

The Board has recognized revenues and expenditures in the amount of $121,457.64 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department of Education Paid to the State Merit System of Personnel Administration For Health Insurance of Non-Certified Personnel In the amount of $102,623.64

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $18,834.00

Note 7: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.

Note 8: 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 public employee retirement system (PERS).

- 14 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1996

Note 8: RETIREMENT PLANS
TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. A member is eligible for service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. A member is eligible for early retirement after 25 years of creditable service and attainment of age 55, at a reduced benefit. Retirement benefits paid to members are equal to 2% of the average of the member's two consecutive highest paid years of service multiplied by the number of years of creditable service up to 40 years. The normal retirement pension is payable monthly for life. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.
Retirement benefits also include death and disability benefits. A disabled member or surviving spouse is entitled to receive annually an amount equal to the member's service retirement benefit or disability retirement, whichever is greater. The death benefit is the amount that would be payable to the member's beneficiary had the member retired on the date of death on either a service retirement allowance or a disability retirement allowance, whichever is larger. The benefit is based on the member's creditable service (minimum of 10 years of service) and compensation up to the time of disability or death.
Members become fully vested after ten years of service. If a member terminates with less than ten years of
service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
The Board's payroll for employees covered by TRS for the year ended June 30, 1996, was $3,233,845.75; total payroll was $3,919,305.39.
TRS CONTRIBUTIONS REQUIRED AND MADE Employees of the Board who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The Board 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. For fiscal year 1996 that rate for employer contributions was 11.81%. The interest rate assumption (rate of return on investments) was 7.50%.
Total contributions made during fiscal year 1996 amounted to $543,743.12, of which $382,011.00 was made by the Board and $161,732.12 was made by employees. These contributions represented 11.81 % (Board) and 5% (employees) of covered payroll.
TRS FUNDING STATUS AND PROGRESS The amount of the total pension benefit obligation is based on a standardized measurement established by Statement No. 5 ofthe Governmental Accounting Standards Board (GASB) that, with some exceptions, must be used by a PERS. The standardized measurement is the actuarial present value of credited projected benefits. This valuation method reflects the present value of estimated pension benefits that will be paid in future years as a result of employee services performed to date, and is adjusted for the effects of projected salary increases. A standardized measure of the pension benefit obligation was adopted by the GASB to
- 15 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 8: RETIREMENT PLANS

enable readers of PERS financial statements to assess that PERS funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among other PERS and among other employers.

Total unfunded pension benefit obligation ofTRS as of June 30, 1995, was as follows:

Total pension benefit obligation

$17,442,607,000.00

Net assets available for benefits, at cost

15.857.066.000.00

Unfunded pension benefit obligation

$ 1,585,541,000.00

The measurement ofthe total pension benefit obligation is based on an actuarial valuation as ofJune 30, 1995. Net assets available to pay pension benefits were valued as of the same date. TRS does not make separate measurements of assets and pension benefit obligation for individual employers.

Total contributions from all employers to TRS for fiscal year ended June 30, 1996 were $607,275,000.00. The Board's contribution for the year ended June 30, 1996 of $382,011.00 was actuarially determined and represented .0629% of total contributions made by all participating employers.

Ten year historical trend information is presented in the 1996 TRS Component Unit Financial Report. This information is useful in assessing TRS's accumulation of sufficient assets to pay pension benefits as they become due.

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA (PSERS)

PSERS PLAN DESCRIPTION Substantially all bus drivers, maintenance, custodial, and lunchroom personnel employed by local school systems are covered by the Public School Employees Retirement System of Georgia (PSERS). All employer's contributions are made by the State of Georgia in accordance with State statute.

PSERS provides, in accordance with State statute, service retirement, disability retirement and survivors benefits for its members. A member is eligible for normal service retirement after 10 years of service and attainment of age 65. A member applying for service retirement with 10 years of service and retires between the ages of 60 and 65 receives a reduced benefit. Monthly retirement benefits paid to members are equal to $8.00 per month multiplied by the number ofyears of creditable service. Options are available for distribution of the member's monthly pension at a reduced rate to a designated beneficiary on the member's death.

Retirement provisions include death and disability benefits. Disability benefits are the same as if the employee haci retired at age 65 as long as the employee has 15 or more years of creditable service. Death benefits are dependent upon the number of years of service. If there are less than ten years of service, a lump

- 16 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1996

Note 8: RETIREMENT PLANS
sum refund of the employee's contributions and interest are made to the beneficiary. If there are more than ten years of service, the beneficiary shall receive for life half ofwhat the employee would have received upon retirement.
Members become fully vested after ten years of service. If a member terminates with less than ten years of service, no vesting of employer contributions occurs, but the member's contributions are refunded with interest.
There were 44 employees covered under PSERS for the year ended June 30, 1996.
PSERS CONTRIBUTIONS REQUIRED AND MADE Covered employees are required by State statute to contribute $4.00 a month for the nine month school year. Unlike TRS, the Board makes no contribution to PSERS. The State of Georgia is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS' Board of Trustees. Total contributions from employees of the Board made during fiscal year 1996 amounted to $1,516.00. Total contribution for all school systems made by the State of Georgia to PSERS for fiscal year ended June 30, 1996, was $9,817,769.80.
Note 9: SURETY BONDS
Dr. Corkin F. Cherubini, School Superintendent through December 31, 1996, was bonded in the amount of $50,000.00 with the Hartford Fire Insurance Company, Hartford, Connecticut, their Bond No. 4670096.
Mr. Larry Wilkerson, School Superintendent, effective January 1, 1997, is bonded in the amount of $50,000.00 with the Hartford Fire Insurance Company, Hartford, Connecticut, their Bond No. 20RN200012, on which premium is paid through January 1, 1998.

- 17 -

CALHOUN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 1996

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

ELEMENTARY AND SECONDARY

TITLEI

GRANTS TO

STATE

TITLE II

LOCAL

SCHOOL

EISENHOWER

EDUCATIONAL IMPROVEMENT PROFESSIONAL

AGENCIES

GRANTS

DEVELOPMENT

$ 151,198.38 $ 15,846.02 $

9,933.55 $

6,891.84 $

823.50

3,541.12

6,000.00

55,220.00

1,722.58 2,369.45

Total Assets

$ 158,831.53 $ 21,846.02 $

65,153.55 $

6,891.84 $ = = = =82=3.5=0

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable

$ 7,343.43 $ 26,243.32

Total Liabilities

$ 33,586.75 $

FUND EQUITY

Fund Balances

Reserved

For Continuation of Federal Program

For Inventories

Food

Donated Commodities

$ 1,722.58

Purchased Food

2,369.45

Unreserved Undesignated

$ 4,092.03 121,152.75 $

Total Fund Equity

$ 125,244.78 $

4,784.56 $ 17,061.46 21,846.02 $
0.00 $ 0.00 $

10,736.48 38,709.60 15,707.47 $ 65,153.55 $
0.00 $ 0.00 $

6,891.84 6,891.84
$
$ 0.00 0.00 $
/

Total Liabilities and Fund Equity $ 158,831.53 $ 21,846.02 $

65,153.55 $

6,891.84 $

823.50
823.50 0.00
823.50 823.50

See notes to the general purpose financial statements.

- 18 -

EXHIBIT"E"

EDUCATION ACT TITLE VI
INNOVATIVE EDUCATION PROGRAM STRATEGIES

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTB

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

VOCATIONAL JOB TRAINING

EDUCATION PARTNERSHIP

TOTALS

FEDERAL

ACT

JUNE 30, 1996 JUNE 30, 1995

$

2.39 $

1,548.58 $

361.78 $

0.00

$ 186,606.04 $ 189,356.58

5,500.63

2,330.38

$

2,281.97

74,874.10

119,337.05

1,722.58 2,369.45

6,414.95 1,786.37

$====2=.,,,,39== $

7,049.21 $

2,692.16 $

=======

0.00 $

2,281.97 $ 265,572.17 $ 316,894.95

$

1,487.89 $

587.16

5,561.32

2,105.00

$

2.39

$

2.39 $

7,049.21 $

2,692.16

$

2,281.97 $

2,281.97 $ 48,223.99

24,939.52

18,053.85

89,680.70

63,609.33

22,601.70

13,310.76

$

2,281.97 $ 139,503.89 $ 143,197.93

$

0.00 $

0.00 $

$

0.00 $

0.00 $

0.00 $ 0.00 $

$

2.39 $

=====

7,049.21 $

2,692.16 $

0.00 $ 0.00 $

$

823.50 $

276.55

$ 0.00 0.00 $

1,722.58 2,369.45 4,915.53 $
121,152.75
126,068.28 $

6,414.95 1,786.37
8,477.87
165,219.15
173,697.02

0.00 $

2,281.97 $ 265,572.17 $ 316,894.95

- 19 -

CALHOUN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1996

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

ELEMENTARY AND SECONDARY

TITLE I

GRANTS TO

STATE

TITLEII

LOCAL

SCHOOL

EISENHOWER

EDUCATIONAL IMPROVEMENT PROFESSIONAL

AGENCIES

GRANTS

DEVELOPMENT

REVENUES

State Funds Federal Funds Taxes and Other Funds

$ 32,316.00 $ 231,289.99

388,818.44

$

46,736.79

314,409.53 $

3,108.16 $

8,000.00

Total Revenues

$ 467,871.23 $ 231,289.99 $ 314,409.53 $

3,108.16 $

8,000.00

EXPENDITURES

Current Instruction Support Services Pupil Services Improvement of Instructional Services General Administration Maintenance and Operation of Plant Student Transportation Services Central Support Services Other Support Services Food Services Operation

$ 202,208.00 $ 250,807.88 $

$ 511,937.63

28,505.44 2,121.47 2,644.60 9,811.88 680.07 40.28

57,798.48 5,803.17

1,396.55 $ 1,711.61

91.58
7,345.82 15.65

Total Expenditures

$ 511,937.63 $ 246,011.74 $ 314,409.53 $

3,108.16 $

7,453.05

Excess of Revenues over (under) Expenditures

$ -44,066.40 $ -14,721.75 $

0.00 $

0.00 $

546.95

OTHER FINANCING SOURCES

Operating Transfers In

14,721.75

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$ -44,066.40 $

0.00 $

0.00 $

0.00 $

546.95

FUND BALANCE JULY 1

173,420.47

0.00

0.00

0.00

276.55

Food Inventory - Net Change in Period Donated Commodities Purchased Food

-4,692.37 583.08

FUND BALANCE JUNE 30

$ 125,244.78 $

0.00 $

0.00 $

0.00 $ ====82=3=.5==0

See notes to the general purpose financial statements.

- 20 -

EXHIBIT"F"

EDUCATION ACT TITLE VI
INNOVATIVE EDUCATION PROGRAM STRATEGIES

INDIVIDUALS WITH

DISABILITIES EDUCATION ACT

PARTS

SPECIAL EDUCATION

FLOW

THROUGH

PRESCHOOL

VOCATIONAL JOB TRAINING

EDUCATION PARTNERSHIP

FEDERAL

ACT

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

$

9,670.61 $ 54,960.86 $

$

9,670.61 $ 54,960.86 $

17,718.19 $ 17,718.19 $

1,796.03 $ 1,796.03 $

$ 11,013.61

263,605.99 $ 809,495.43
46,736.79

11,013.61 $ 1,119,838.21 $

141,090.00 742,527.76
51,412.45
935,030.21

$ 35,185.34 $

459.48

$

9,648.39

19,316.04

22.22

$

9,670.61 $ 54,960.86 $

$

0.00 $

0.00 $

17,718.19 $
17,718.19 $ 0.00 $

1,796.48 $
1,796.48 $ -0.45 $

6,240.09 $ 515,444.11 $

4,773.52

28,964.92 44,916.85 60,480.95
9,811.88 680.07 40.28
5,803.17 511,937.63

11,013.61 $ 1,178,079.86 $

0.00 $

-58,241.65 $

365,015.51
36,513.06 29,070.01 54,802.76 10,959.04
53.57
2,127.27 439,168.22
937,709.44
-2,679.23

$

0.00 $

0.00 $

0.00

0.00

0.00 $ 0.00

0.45
0.00 $ 0.00

14,722.20

3,835.63

0.00 $ 0.00

-43,519.45 $ 173,697.02

1,156.40 170,259.74

-4,692.37 583.08

1,803.68 477.20

$

0.00 $

0.00 $

0.00 $ ===O=.O=O $ ====O=.O=O $

126,068.28 $

173,697.02

- 21 -

CALHOUN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 1996

EXHIBIT"G"

ASSETS Cash and Cash Equivalents

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 97/96S-619-003

TOTALS JUNE 30, 1996 JUNE 30, 1995

$

0.00 $

71,860.00 $

71,860.00 $ ===-=o.=o=o

FUND EQUITY
Fund Balances Reserved For State Capital Outlay Project Unreserved Undesignated

$ $ _ _ _ _0._00_

71,860.00 $ 0.00

71,860.00 o.oo $ _ _ _ _o_.o_o

Total Fund Equity

$

0.00 $

71,860.00 $

11,a60.oo $====o=.o=o

See notes to the general purpose financial statements.

- 22 -

CALHOUN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30. 1996

EXHIBIT "H"

REGULAR

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION
PROJECT 97 /96S-619-003

TOTALS YEAR ENDED JUNE 30, 1996 JUNE 30, 1995

REVENUES

State Funds

$

0.00 $

0.00 $

0.00 $

0.00

EXPENDITURES

Capital Outlay Building and Building Improvements

$ 47,994.67 $

8,000.00 $

55,994.67 $

74,378.27

Excess of Revenues over (under) Expenditures

$ -47,994.67 $

-8,000.00 $

-55,994.67 $

-74,378.27

OTHER FINANCING SOURCES

Operating Transfers In

47,994.67

79,860.00

127,854.67

74,378.27

Excess of Revenues and Other Financing Sources

over (under) Expenditures

$

0.00 $

71,860.00 $

71,860.00 $

0.00

FUND BALANCE JULY 1

0.00

0.00

0.00

0.00

FUND BALANCE JUNE 30

$

0.00 $

71,860.00 $

71,860.00 $====o=.o=o

See notes to the general purpose financial statements.

- 23 -

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30, 1996

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U.S. Department of Through Georgia Department of Education Food and Nutrition Program Child and Adult Care Food Program 1996 Contract Food Services School Breakfast Program 1996 Grant National School Lunch Program 1996 Grant Food Distribution Program (1)
Total U. S. Department of Agriculture
Education, U. S. Department of Through Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1996 Grant State School Improvement Grants 1996 Grant Title II Eisenhower Professional Development 1995 Regular 1996 Grant Title VI Innovative Education Program Strategies 1996 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1996 Grant Preschool 1996 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1995 Grant 1996 Grant Through Southwest Georgia Regional Mental Health, Mental Retardation and Substance Abuse Center Safe and Drug-Free Schools 1995 Grant
Total U. S. Department of Education

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10.558 $

2,179.51

(2)

10.553

97,547.03

10.555 10.550

261,861.56 $ 27,230.34

$ 388,818.44 $

(2)
484,707.29 (3) 27,230.34
511,937.63

* 84.010 $ 84.218

314,409.53 $ 3,108.16

314,409.53 3,108.16

84.281 84.281

8,000.00

276.55 7,176.50

84.298

9,670.61

9,670.61

84.027 84.173

54,960.86 17,718.19

54,960.86 17,718.19

84.048 84.048

2,800.00 1,796.03

(4) 1,796.48 (3)

84.186

5,560.91

$ 418,024.29 $

5,560.91 414,677.79

- 24 -

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
YEAR ENDED JUNE 30, 1996

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Labor, U.S. Department of Through Southwest Georgia Regional Development Center Job Training Partnership Act 92-B-73-2 95-B-86
Total U.S. Department of Labor

CFDA NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

17.250 $ 17.250
$

8,731.64 $ 2,281.97
11,013.61 $

8,731.64 2,281.97
11,013.61

Total Federal Financial Assistance The Major Program is identified by an asterisk (*) in front of the CFDA number.

$ 817,856.34 $====9=37=,6=2=9=.0=3

(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 School Breakfast Program and the Child and Adult Care Food Program were not maintained separately and are included in the 1996 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 reported in the General Fund in the prior year.

See notes to the general purpose financial statements.

- 25 -

CALHOUN COUNTY BOARD OF EDUCATION CASH AND CASH EQUIVALENTS JUNE 30. 1996

SCHEDULE "2"

INTEREST BEARING ACCOUNTS
Bank of Edison, Edison, Georgia
N.O.W. Accounts (3.25%) Certificate of Deposit No. 17304 (6.50%)
First State Bank, Blakely, Georgia
SUPERNOWAccount (3.50%)
OTHER
Petty Cash

$ 1,001,569.98 104,210.12 $ 1,105,780.10 0.18
20.00 $ 1,105,800.28

See notes to the general purpose financial statements.

- 26 -

CALHOUN COUNTY BOARD OF EDUCATION ACCOUNTS RECEIVABLE JUNE 30, 1996

SCHEDULE "3"

Calhoun County Tax Commissioner County Wide School Tax
Education, Georgia Department of Child and Adult Care Food Program Food Services School Breakfast Program National School Lunch Program Federal Programs Elementary and Secondary Education Act Title I Grants to Local Educational Agencies Individuals with Disabilities Education Act Part B - Special Education Flow Through Preschool
Office of School Readiness Pre-Kindergarten Program
Southwest Georgia Regional Development Center Job Training Partnership Act

GOVERNMENTALFUNDTYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

9,020.46

$

9,020.46

$

250.05

1,632.88 1,658.19

250.05
1,632.88 1,658.19

55,220.00
5,500.63 2,330.38
6,000.00
2,281.97

55,220.00
5,500.63 2,330.38
6,000.00
2,281.97

$

9,020.46 $

74,874.10 $ ====83=,8=94=.5=6

See notes to the general purpose financial statements.

- 27 -

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1996

SCHEDULE "4"

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 Sparsity Grant Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Environmental Science Program Health Insurance Innovative Programs Preschool Handicapped Program Remedial Summer School Programs Technology Training Lottery Programs Instructional Technology Technology Installation
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 2,201,642.00 421,597.00 153,172.00 96,096.00 30,902.00 652,415.00
204,822.00 43,326.00 107,949.00 121,009.96 38,776.00 5,488.00
-374,010.00 282,802.00
$ 45,555.96
8,868.53 277.00
102,623.64 4,419.88 7,748.00 6,302.88
25,765.00

$ 2,201,642.00 421,597.00 153,172.00 96,096.00 30,902.00 652,415.00

32,316.00

204,822.00 43,326.00 107,949.00
121,009.96 38,776.00 5,488.00
-374,010.00 282,802.00
32,316.00 45,555.96

8,868.53 277.00
102,623.64 4,419.88 7,748.00 6,302.88
25,765.00

42,500.00 29,982.00

42,500.00 29,982.00

158,807.99

158,807.99

18,834.00

18,834.00

$ 4,206,381.85 $ 263,605.99 $ 4,469,987.84

See notes to the general purpose financial statements.

- 28 -

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF TAXES AND OTHER REVENUE
YEAR ENDED JUNE 30, 1996

SCHEDULE 511 11

Taxes County Wide School Tax Railroad Car Tax Real Estate Transfer Tax
Other Sources Indirect Cost Special Revenue Fund Interest Earned Reimbursement for Contracted Services Southwest Georgia Regional Educational Service Agency Salaries Various Sources Sales Breakfast Lunch School Assets Other

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 926,671.75 6,409.74 5,908.07

$ 926,671.75 6,409.74 5,908.07

3,112.00 36,791.20 $

5,205.96

3,112.00 41,997.16

14,828.32 6,629.12
9,426.48 13,772.18

6,239.92 34,131.12
1,159.79

14,828.32
6,629.12
6,239.92 34,131.12
9,426.48 14,931.97

$ 1,023,548.86 $

46,736.79 $ 1,070,285.65

See notes to the general purpose financial statements. - 29 -

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30. 1996

SCHEDULE "6"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Compensation and Travel of Board Members Water, Sewer and Cleaning Services Repair and Maintenance Services Rents Insurance Communications Commodity Hauling Shared Services Other Purchased Services Supplies Energy Food Usage Books, Textbooks and Periodicals Dues and Fees Federal Indirect Costs Other Expenditures
Nonoperating Costs Principal and Interest Equipment
Total Expenditures

GENERAL FUND

SPECIAL REVENUE
FUND

TOTAL

$ 3,335,977.61 $ 993,022.77 20,699.00 41,949.31 7,587.75 18,935.15 41,672.82 530.00 22,301.00 18,958.88
4,500.00 6,943.00 194,782.76 215,533.24
89,303.02 12,254.10
10,132.16

583,327.78 $ 162,051.57
11,004.11 6,202.71
14,204.51 8,292.24
4,157.59 2,019.26
44.16 64,543.03
197,783.31 9,620.64 5,857.10 3,112.00 4,676.07

3,919,305.39 1,155,074.34
31,703.11 48,152.02
7,587.75 18,935.15 55,877.33 8,822.24 22,301.00 23,116.47 2,019.26 4,500.00 6,987.16 259,325.79 215,533.24 197,783.31 98,923.66 18,111.20 3,112.00 14,808.23

38,177.72 81,173.87

101,183.78

38,177.72 182,357.65

$ 5,154,434.16 $ 1,178,079.86 $ 6,332,514.02

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

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES BY OBJECT
LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1996

SCHEDULE '7"

EXPENDITURES
Operating Costs Salaries Employee Benefits Travel of Employees Professional and Technical Services Rents Communications Other Purchased Services Supplies Books, Textbooks and Periodicals Dues and Fees Other Expenditures
Nonoperating Costs Equipment

INSTRUCTIONAL PRE-KINDERGARTEN TECHNOLOGY

TECHNOLOGY

PROGRAM

INSTALLATION

TOTAL

$

$

7,118.22

38,199.32

109,624.32 30,543.86 4,133.41 19.50 8,292.24 890.31 40.28 13,220.22 56.00 70.00 2,213.01
1 159.32 $

$ 109,624.32 30,543.86 4,133.41 19.50 8,292.24 890.31 40.28 20,338.44 56.00 70.00 2,213.01

30 431.73

69,790.37

Total Expenditures

$

45,317.54 $

170,262.47 $

30,431.73 $==2=4=6=,0=1=1.=74=

See notes to the general purpose financial statements.

- 31 -

THIS PAGE LEFT BLANK

CALHOUN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1996

SCHEDULE "8"

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

THIRTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF THIRTEEN WEIGHTED PROGRAMS

$ 2,872,507.00 $

87,158.00

$ 2,695,671.37
194,999.00 $ - - -1~ 76,19-4.3-4
$ 2,890,670.37

-20,397.55 $ 2,870,272.82

$

2,234.18 $ = = = = =0.=00

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

CALHOUN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30. 1996

GENERAL AND CAREER EDUCATION PROGRAMS Kindergarten (*) Grades 1 - 3 (*) Sub-Total - K-3 Grades 4 - 5 (*) Grades 6 - 8 (*) Grades 9 - 12 (*) High School Laboratories (*) Vocational Education Laboratories (*) Total General and Career Education Programs
SPECIAL EDUCATION PROGRAMS Regular Programs Category II (*) Category Ill (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM(*) Total Thirteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Thirteen Weighted and Media Center Programs
STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Thirteen Weighted Programs.

ALLOTMENTS FROM DEPARTMENT OF EDUCATION

REQUIRED

ORIGINAL

%

ORIGINAL

MID-TERM

$

237,600.00

$

213,840.00 $

545,924.00

491,331.60

$

783,524.00 90 $

705,171.60 $

252,216.00 90

226,994.40

515,324.00 90

463,791.60

368,833.00 90

331,949.70

109,352.00 90

98,416.80

172,393.00 90

155,153.70

$ 2,201,642.00

$ 1,981,477.80 $

0.00 0.00
33,021.00 -21,839.00 11,182.00

$

421,597.00

$

379,437.30 $

0.00

$

421,597.00 90 $

379,437.30 $

$

153,172.00 90 $

137,854.80 $

$ 2,776,411.00

$ 2,498,769.90 $

0.00 -11,182.00
0.00

$

77,000.00 90 $

69,300.00 $

19,096.00 90

17,186.40

$

96,096.00

$

86,486.40 $

0.00 0.00

$ 2,872,507.00

$ 2,585,256.30 $

0.00

$

7,620.00

$

7,620.00 $

0.00

23,282.00

23,282.00

0.00

$

30,902.00 100 $

30,902.00 $====0=.0=0

See notes to the general purpose financial statements.

- 34 -

SCHEDULE "9"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

213,840.00 $

172,143.05 $

7,900.38 $

180,043.43

491,331.60

528,146.38

25,374.42

553,520.80

$

705,171.60 $

700,289.43 $

33,274.80 $

733,564.23 $

0.00

226,994.40

253,957.79

21,571.58

275,529.37

0.00

463,791.60

449,955.30

22,230.07

472,185.37

0.00

364,970.70

444,612.92

39,843.23

484,456.15

0.00

76,577.80

69,493.35

10,349.05

79,842.40

0.00

155,153.70

195,778.07

27,824.88

223,602.95

0.00

$ 1,992,659.80 $ 2,114,086.86 $

155,093.61 $ 2,269,180.47

$

379,437.30

$

$

379,437.30 $

$

126,672.80 $

$ 2,498,769.90 $

193,313.16 $ 174,154.35
367,467.51 $
116,428.11 $ 2,597,982.48 $

11,261.54 $ 1,680.18
12,941.72 $
8,159.01 $
176,194.34 $

204,574.70 175,834.53
380,409.23 124,587.12
2,774,176.82

0.00 2,085.68

$

69,300.00 $

97,688.89

$

97,688.89

0.00

17,186.40

$

18,804.66

18,804.66

0.00

$

86,486.40 $

97,688.89 $

18,804.66 $

116,493.55

$ 2,585,256.30 $ 2,695,671.37 $

194,999.00 $ 2,890,670.37 $

2,085.68

$

7,620.00

23,282.00

$ ===30='=90=2=.0=0

$

11,227.06 $

11,227.06

25,450.60

25,450.60

$

36,677.66 $

36,677.66 $======0=.0=0

- 35 -

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF COMPENSATION AND TRAVEL OF BOARD MEMBERS
YEAR ENDED JUNE 30, 1996

SCHEDULE

10 11

11

BOARD MEMBER ADDRESS
Mr. C.E. Cowart, Chairman (*) P.O. Box M Arlington, Georgia 31713
Ms. Kathy Dukes (*) Route 1, Box 140 Edison, Georgia 31746
Mr. Willie E. Frost (*) P.O. Box45 Morgan, Georgia 31766
Mr. Julian Holder (*) P.O. Box 157 Morgan, Georgia 31766
Mr. Frank Miller (*) P.O. Box401 Edison, Georgia 31746
Mr. W.J. Taylor(*) P.O. Box402 Leary, Georgia 31762
Ms. Emma Zachary (*) P.O. Box 13 Arlington, Georgia 31713
(*) Denotes Board Members Serving as of June 30, 1996

COMPENSATION

TRAVEL

$

950.00 $

31.25

1,025.00

48.00

875.00

1,050.00

1,025.00

1,000.00

483.50

1,100.00

$

7,025.00

$

=

=

=

562.75 ===

See notes to the general purpose financial statements.

- 36 -

SECTION II COMPLIANCE

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 11, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Calhoun County Board of Education
COMPLIANCE REPORT BASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Calhoun County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 11, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
Compliance with laws, regulations, contracts, and grants applicable to Calhoun County Board of Education is the responsibility of the Board's management. As part of obtaining reasonable assurance about whether the general purpose financial statements are free of material misstatement, we performed tests of the Board's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our audit of the financial statements was not to provide an opinion on overall compliance with such provisions. Accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance that are required to be reported herein under Government Auditing Standards.

96CRL-10

This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:dt 96CRL-10

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 11, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Calhoun County Board of Education

SINGLE AUDIT REPORT ON COMPLIANCE WITH THE GENERAL REQUIREMENTS APPLICABLE TO FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Calhoun County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 11, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have applied procedures to test the Calhoun County Board of Education's compliance with the following requirements applicable to each of its Federal financial assistance programs, which are listed in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996:

(1) Political Activity

(5) Allowable Costs/Cost Principles

(2) Civil Rights

(6) Audit Follow-Up/Resolution

(3) Cash Management

(7) Administrative Requirements

(4) Federal Financial Reports

Our procedures were limited to the applicable procedures described in the Office of Management and Budget's "Compliance Supplement for Single Audits of State and Local Governments" and other additional procedures as deemed necessary. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Calhoun County Board of Education's compliance with the requirements listed in the preceding paragraph. Accordingly, we do not express such an opinion.

96CRL-50

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph of this report. With respect to items not test~d, nothing came to our attention that caused us to believe that the Calhoun County Board of Education had not complied, in all material respects, with those requirements. However, the results of our procedures disclosed an immaterial instance of noncompliance with those requirements, which is described in the Schedule of Findings and Improper or Questioned Costs.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
c:t~~
Claude L. Vickers State Auditor
CLV:dt 96CRL-50

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 11, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Calhoun County Board of Education

SINGLE AUDIT OPINION ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO MAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAMS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Calhoun County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 11, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

We have also audited the Calhoun County Board ofEducation's compliance with the requirements governing:

(1) Types of Services Allowed or Unallowed

(5) Applicable Special Tests and Provisions

(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(6) Other Requirement Claims for Advances and Reimbursements

(4) Reporting

These requirements are applicable to the major Federal financial assistance program, which is identified in the Schedule of Federal Financial Assistance, for the year ended June 30, 1996. The management of the Calhoun County Board of Education is responsible for the Board's compliance with those requirements. Our responsibility is to express an opinion on compliance with those requirements based on our audit.

96CRL-90

We conducted our audit ofcompliance in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and Office of Management and Bu4get (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether material noncompliance with the requirements referred to above occurred. An audit includes examining, on a test basis, evidence about the Calhoun County Board of Education's compliance with those requirements. We believe that our audit provides a reasonable basis for our opinion.
The results ofour audit procedures disclosed an immaterial instance of noncompliance with the requirements referred to above which are described in the Schedule of Findings and Improper or Questioned Costs. We considered this instance of noncompliance in forming our opinion on compliance, which is expressed in the following paragraph.
In our opinion, the Calhoun County Board of Education complied, in all material respects, with the requirements as disclosed in the second paragraph that are applicable to its major Federal financial assistance program for the year ended June 30, 1996.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers State Auditor
CLV:dt 96CRL-90

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 11, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Calhoun County Board of Education

SINGLE AUDIT REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO NONMAJOR FEDERAL FINANCIAL ASSISTANCE PROGRAM TRANSACTIONS

Ladies and Gentlemen:

We have audited the general purpose financial statements of the Calhoun County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 11, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.

In connection with our audit of the fiscal year 1996 general purpose financial statements of the Calhoun County Board of Education and with our consideration of the Board's control structure used to administer Federal financial assistance programs, as required by Office of Management and Budget (0MB) Circular A128, "Audits of State and Local Governments", we selected certain transactions applicable to certainnonmajor Federal financial assistance programs for the year ended June 30, 1996. As required by 0MB Circular A-128, we have performed auditing procedures on the selected transactions to test compliance with the requirements governmg:

(1) Types of Services Allowed or Unallowed

(2) Eligibility

Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on the Calhoun County Board of Education's compliance with these requirements. Accordingly, we do not express such an opinion.

96CRL-120

With respect to the items tested, the results of those procedures disclosed no material instances of noncompliance with the requirements listed in the second paragraph. With respect to items not tested, nothing cam~ to our attention that caused us to believe that the Calhoun County Board ofEducation had not complied, in all material respects, with those requirements.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,
tf~
Claude L. Vickers State Auditor
CLV:_dt 96CRL-120

SECTION III INTERNAL CONTROL

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 11, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Calhoun County Board of Education
REPORT ON INTERNAL CONTROL STRUCTURE IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Calhoun County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 11, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements.
We conducted our audit in accordance with generally accepted auditing standards, and Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement.
The management of the Calhoun County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to risk that procedures may become inadequate because of changes in conditions or that the effectiveness of the design and operation of policies and procedures may deteriorate.

96ICL-3

In planning and performing our audit of the general purpose financial statements of the Calhoun County Board of Education for the year ended June 30, 1996, we obtained an understanding of the internal control structure. With respect to the internal control structure, we obtained an understanding of the design of relevant policies and procedures and whether they have been placed in operation, and we assessed control risk in order to determine our auditing procedures for the purpose of expressing our opinion on the general purpose financial statements and not to provide an opinion on the internal control structure. Accordingly, we do not express such an opinion.
We noted a certain matter involving the internal control structure and its operation that we consider to be a reportable condition under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the entity's ability to record, process, summarize, and report financial data consistent with the assertions of management in the general purpose financial statements.
As described in the Schedule of Findings and Improper or Questioned Costs, a reportable condition was noted in the following control category:
General Fixed Assets
A material weakness is a reportable condition in which the design or operation of one or more of the specific internal control structure elements does not reduce to a relatively low level the risk that errors or irregularities in amounts that would be material in relation to the general purpose 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 structure would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, we believe that the reportable condition disclosed above is also considered to be a material weakness.
This condition was considered in determining the nature, timing, and extent ofthe procedures to be performed in our audit of the Calhoun County Board of Education's financial statements and this report does not affect our report thereon dated June 11, 1997.
This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies. This restriction is not intended to limit the distribution of this report which is a matter of public record.
Respectfully submitted,

CLV:dt 96ICL-3

~-~--c--
Claude L. Vickers State Auditor

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

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
June 11, 1997

Honorable Zell Miller, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Calhoun County Board of Education
SINGLE AUDIT REPORT ON THE INTERNAL CONTROL STRUCTURE USED IN ADMINISTERING FEDERAL FINANCIAL ASSISTANCE PROGRAMS
Ladies and Gentlemen:
We have audited the general purpose financial statements of the Calhoun County Board of Education as of and for the year ended June 30, 1996, and have issued our report thereon dated June 11, 1997. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We have also audited the Calhoun C9unty Board of Education's compliance with requirements applicable to major Federal financial assistance programs and have issued our opinion thereon dated June 11, 1997.
We conducted our audit in accordance with generally accepted auditing standards; Government Auditing Standards, issued by the Comptroller General of the United States; and the provisions of Office of Management and Budget (0MB) Circular A-128, "Audits of State and Local Governments". Those standards and 0MB Circular A-128 require that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial statements are free of material misstatement and about whether the Calhoun County Board of Education's complied with laws and regulations, noncompliance with which would be material to a major Federal financial assistance program.
In planning and performing our audit for the year ended June 30, 1996, we considered the Board's internal control structure in order to determine our auditing procedures for the purpose of expressing our opinions on the Board's general purpose financial statements and on its compliance with requirements applicable to major Federal financial assistance programs and to report on the internal control structure in accordance with 0MB Circular A-128. This report addresses our consideration of internal control structure policies and procedures relevant to compliance with requirements applicable to Federal financial assistance programs. We have addressed internal control structure policies and procedures relevant to our audit of the general purpose financial statements in a separate report dated June 11, 1997.
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The management of the Calhoun County Board of Education is responsible for establishing and maintaining an internal control structure. In fulfilling this responsibility, estimates and judgments by management are reqired to assess the expected benefits and related costs of internal control structure policies and procedures. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that, assets are safeguarded against loss from unauthorized use or disposition, that transactions are executed in"accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles, and that Federal financial assistance programs are managed in compliance with applicable laws and regulations. Because of inherent limitations in any internal control structure, errors, irregularities, or instances of noncompliance may nevertheless occur and not be detected. Also, projection of any evaluation of the structure to future periods is subject to the risk that procedures may become inadequate because of changes in conditions or that the effectiveness ofthe design and operation of policies and procedures may deteriorate.

For the purpose of this report, we have classified the significant internal control structure policies and procedures used in administering Federal financial assistance programs in the following control categories:

GENERAL REQUIREMENTS

SPECIFIC REQUIREMENTS

(1) Political Activity (2) Civil Rights (3) Cash Management (4) Federal Financial Reports

(1) Types of Services Allowed or Unallowed
(2) Eligibility
(3) Matching, Level of Effort, and/or Earmarking

(5) Allowable Costs/Cost Principles

(4) Reporting

(6) Audit Follow-Up/Resolution (7) Administrative Requirements

(5) Applicable Special Tests and Provisions
(6) Other Requirement Claims for Advances and Reimbursements

For all of the internal control structure categories listed above, we obtained an understanding of the design of relevant policies and procedures and determined whether they have been placed in operation, and we assessed control risk.

During the year ended June 30, 1996, the Calhoun County Board of Education expended 70% of its total Federal financial assistance under a major Federal financial assistance program and the following nonmajor Federal financial assistance program:

Food and Nutrition Program - Food Services National School Lunch Program

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We performed tests of controls, as required by 0MB Circular A-128, to evaluate the effectiveness of the design and operation of internal control structure policies and procedures that we considered relevant to preventing or detecting material noncompliance with general requirements and specific requirements as described above that are applicable to the Board's major Federal financial assistance program, which is identified in the Schedule of Federal Financial Assistance, and the aforementioned nonmajor program. Our procedures were less in scope than would be necessary to render an opinion on these internal control structure policies and procedures. Accordingly, we do not express such an opinion.
We noted certain matters involving the internal control structure and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the Board's ability to administer Federal financial assistance programs in accordance with applicable laws and regulations.
As described in the Schedule ofFindings and Improper or Questioned Costs, reportable conditions were noted in the following control categories:
(1) Administrative Requirements
(2) Eligibility
A material weakness is a reportable condition in which the design or operation of one or more of the internal control structure elements does not reduce to a relatively low level the risk that noncompliance with laws and regulations that would be material to a Federal financial assistance program 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 structure policies and procedures used in administering Federal financial assistance would not necessarily disclose all matters in the internal control structure that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses as defined above. However, as described in the Schedule of Findings and Improper or Questioned Costs, the following control category includes a reportable condition that is also considered to be a material weakness:
Administrative Requirements
These conditions were considered in determining the nature, timing, and extent of the procedures to be performed in our audit ofthe Calhoun County Board of Education's compliance with requirements applicable to its major Federal financial assistance program for the year ended June 30, 1996, and this report does not affect our report thereon dated June 11, 1997.
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This report is intended for the information of management, the Federal cognizant audit agency and other Federal grantor agencies and should not be used for any other purpose. This restriction is not intended to limit the 4istribution of this report which is a matter of public record.
Respectfully submitted,
~~
Claude L. Vickers
State Auditor
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SECTION IV FINDINGS AND IMPROPER OR QUESTIONED COSTS

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
PRIOR YEAR
AUDIT FOLLOW-UP/RESOLUTION Failure to Meet Expenditure Requirements Financial Statements Finding Resolved Audit Control Number 6191-93-03
The audit report for the year ended June 30, 1993, stated that the Board had an underexpenditure of Quality Basic Education (QBE) funds of $198.21 for the Staff Development - Professional Development Stipends Program. For the year under review, an adjustment was made to the Board's local fair share by the Georgia Department of Education to refund this underexpenditure as required.
PRIOR YEAR/CURRENT YEAR
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Financial Statements Reportable Condition - Material Weakness Audit Control Number 6191-93-01
The audit report for the year ended June 30, 1995, noted that the management of the Calhoun County Board of Education had chosen not to maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. In the year under review, the Board did not establish a General Fixed Assets Account Group within the formal accounting records. This condition results in the general purpose financial statements of the 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 of all additions and deletions to the General Fixed Assets Account Group.
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Financial Statements Nonmaterial Noncompliance Amount: $2,234.18 Audit Control Number 6191-96-01
For the year under review, the Board reported to the Georgia Department of Education on DE Form 0420 "General Fund QBE Program Expenditure Summary" expenditures totaling $2,896,935.37 for the Thirteen
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CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
CURRENT YEAR
EXPENDITURES/LIABILITIES/DISBURSEMENTS Failure to Meet Expenditure Requirements Financial Statements Nonmaterial Noncompliance Amount: $2,234.18 Audit Control Number 6191-96-01
Weighted and Media Center Programs. A review of the underlying source documentation for the Quality Basic Education (QBE) programs disclosed that actual expenditures were $2,890,670.37, resulting in an underexpenditure of $2,234.18 for the minimum required allotment overall. This underexpenditure of funds occurred because management did not properly monitor charges to the QBE programs for compliance with QBE regulations. The underexpenditure of $2,234.18 should be returned to the Georgia Department of Education through an increase in the Board's local fair share for the QBE programs in a subsequent fiscal period.
ADMINISTRATIVE REQUIREMENTS Inadequate Inventory Records Federal Financial Assistance Major Program Reportable Condition - Material Weakness Nonmaterial Noncompliance Audit Control Number 6191-96-02
Property management records maintained by the Board for the Elementary and Secondary Education Act Title I Program - Grants to Local Educational Agencies (CFDA 84.010) were incomplete and failed to meet property management standards as set forth in Chapter 41, of the Financial Management for Georgia Local Units of Administration (FMGLUA). The Board's property management records failed to meet federal requirements as follows:
(1) The inventory records as presented for audit did not contain the name of the vendor supplying the equipment, the use and condition of the equipment, and information regarding the ultimate disposition of the equipment (when applicable).
(2) A physical inventory count was not performed for the year under review.
These conditions occurred because management failed to follow property management standards. An inventory system should be implemented that provides for the identification of all equipment purchased as outlined in Chapter 41, of the FMGLUA. Perpetual records should include historical information regarding additions and deletions made to the equipment inventory during each fiscal year (when applicable). Periodic
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physical inventory courits should be performed and reconciled to the property records to ensure the accuracy of the inventory records.
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CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND IMPROPER OR QUESTIONED COSTS
YEAR ENDED JUNE 30, 1996
CURRENT YEAR ELIGIBILITY Failure to Maintain Eligibility Documentation Federal Financial Assistance Major Program Reportable Condition Nonmaterial Noncompliance Audit Control Number 6191-96-03 A review of Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies Targeted Assistance Program (CFDA 84.010) participant files indicated that the Board did not maintain records that sufficiently document the eligibility of participants. Title I, Section 1115 of ESEA (20 USC 6315) provides that the Board establish the selection criteria and the method by which participants will be selected in its Targeted Assistance Plan. As part of the Plan, the Board provides the assurance that it will keep such records and provide such information as may be required to support the selection of participants. For 8 of the 10 participant files reviewed, documentation of information used to determine eligibility was either missing or insufficient. This condition occurred because management failed to maintain records in accordance with the requirements of the grant application and the Targeted Assistance Plan. Procedures should be implemented to ensure that eligibility documentation is complete and kept on file in accordance with the requirements of the Targeted Assistance Program. The Georgia Department of Education should review this matter to determine if a refund of funds is appropriate.
Note: The Calhoun County Board of Education was provided an opportunity to include pertinent comments from the Board's management concerning these audit findings, conclusions and recommendations. The Board has elected not to provide comments for inclusion in this report.
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