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AUDIT REPORT
CALHOUN COUNTY BOARD OF EDUCATION
MORGrU~, GEORGIA
YEAR ENDED JUNE 30, 1999
'---------------------~
STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS
254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400

CALHOUN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINlNG AND INDNIDUAL FUND STATEMENTS

SPECIAL REVENUE FUND

E

COMBINlNG BALANCE SHEET

20

F

COMBINlNG STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

21

CAPITAL PROJECTS FUND

G

COMBINlNG BALANCE SHEET

22

H

COMBINlNG STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

I

FIDUCIARY FUND TYPE

STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUND

24

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

2 SCHEDULE OF STATE REVENUE

27

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

28

4 SCHEDULE OF EXPENDITURES

LOTTERYPROGRAMS

29

CALHOUN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

5

OVERALL

31

6

BY PROGRAM

32

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-B3

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

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

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W.. Suite 214 Atlanta, Georgia 30334-8400
August 1, 2000

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe 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 EXPENDITURES OF FEDERAL AWARDS
Ladies and Gentlemen:
We have audited the accompanying general purpose financial statements of the Calhoun County Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility of the Calhoun County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
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.

99ARL-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, 1999, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were improperly recorded in the year ended June 30, 1999. 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 referred to above present fairly, in all material respects, the financial position of the Calhoun County Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated August 1,2000, on our consideration ofthe Calhoun County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements
n of the Calhoun County Board of Education taken as a whole. The accompanying combining and individual
fund statements (Exhibits E through and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-B3, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such 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.
99ARL-13

A copy of this report has been filed as a pennanent 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,

RWH:gp 99ARL-13

Ru sell W. Hinton State Auditor

CALHOUN COUNTY BOARD OF EDUCATION

CALHOUN COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1999

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

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

271,145.42 $

3,750.00

$

111,489,58

1,564,683.92

40,732.10

5,704.52

1,559,55 876,37

'$

152,221,68 $

279,285.86 $

1,568,433,92

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Notes Payable Expired Grant Balances Payable Contracts Payable Funds Held for Others Capital Lease Agreements General Obligation Bonds Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Continuation of Federal Programs For Debt Service For Expired Grant Balances/Questioned Costs For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue Unreserved Designated for Self-Insurance Undesignated
Total Fund Equity

$

177,645,36

45,547,26 $

22,222,96

68,769.10

5,789,65

19,977,58

$

$

228,982,27 $

110,969,64 $

4,717.14 4,717.14

$

39,405,90

$

34,407,44

22,620,29

1,559,55 876,37 $

10,689,73 -149,476,51

131 ,472,86

$

-76,760,59 $

168,316,22 $

1,563,716,78
0.00 1,563,716.78

Total Liabilities and Fund Equity

$

152,221,68 $

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

-2-

279,285,86 $

1,568,433,92

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPE AGENCY FUND

$

0.00

$

4,603.79

34.50

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30,1999

JUNE 30,1998

$

274,895.42 $

290,629.51

1,680,777.29

220,106.52

46,471.12

242,182.27

$

4,638.29

1,559.55 876.37
4,638.29

1,924.82 1,048.63

1,595,361.71 71,151.93

1,595,361.71 71 ,151.93

17,855.08

$

4,638.29 $

0.00 $ 1,671,151.93 $

3,675,731.68 $

773,746.83

$

0.00 $

0.00

$

177,645.36

67,770.22 $

52,320.63

68,769.10

66,966.95

5,789.65

15,800.00

19,977.58

9,630.59

4,717.14

10,441.88

$

71,151.93

71,151.93

17,855.08

1,600,000.00

1,600,000.00

$

0.00 $

0.00 $ 1,671,151.93 $

2,015,820.98 $

173,015.13

$

4,638.29

0.00

$

4,638.29

$

4,638.29 $

$

39,405.90 $

34,407.44

4,638.29

22,620.29

1,559.55 876.37
1,563,716.78

10,689.73 -18,003.65

$

1,659,910.70 $

33,~27.48
83,932.86 6,473.42
1,924.82 1,048.63
20,968.73 452,755.76 600,731.70

0.00 $ 1,671,151.93 $

3,675,731.68 $

773,746.83

-3-

CALHOUN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1999

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Community Services Operations
Capital Outlay Building and Building Improvements Equipment
Debt Service Principal Interest
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds
Par Value Capital Leases Operating Transfers In Operating Transfers Out
Total Other Financing Sources (Uses)
Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
Residual Equity Transfer
FUND BALANCE JUNE 30
The notes to the general purpose financial statements are an integral part of this statement.
-4-

GENERAL FUND

SPECIAL REVENUE
FUND

$ 3,749,908,05 $ 2,651.49
961,977.23 78,345,14

130,728.82 927,530.98
21,638,92

$ 4,792,881,91 $ 1,079,898.72

$ 3,067,120.21 $
229,615.17 79,000.18
173,362.60 303,993.74 550,907.25
66,820.30 546,488.80 342,956.05
138.96

606,285.18
15,143.84 77,618.21
3,077.75 4,726.44
2,136.27 149.54 362.32
333,357.13

6,760.97

19,387.36

34,098.15 5,307.75

$ 5,406,570.13 $ 1,062,244.04

$

-613,688.22 $

17,654.68

$

87,395.00

$

-3,666.23

$

83,728.77 $

$

-529,959.45 $

375,732.00

77,466.86

3,666.23
3,666.23
21,320.91 147,532.84
-365.27 -172.26

$

-76,760.59 $

168,316.22

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1999

JUNE 30,1998

$

$

13,358.92

$

13,358.92 $

$
34.50 39.35
73.85 $

3,880,636.87 $ 930,182.47 962,011.73 113,382.33
5,886,213.40 $

4,292,555.25 930,111.63 987,441.30 95,842.99
6,305,951.17

$

$

44,925.00

4,717.14

$

49,642.14 $

$

-36,283.22 $

$ $ 1,600,000.00

$ 1,600,000.00 $
$ 1,563,716.78 $ 77.466.86

-77,466.86 $ 1,563,716.78 $

0.00 $
0.00 $ 73.85 $

3,673,405.39 $
244,759.01 156,618.39 176,440.35 308,720.18 550,907.25 111,745.30 548,625.07 343,105.59
362.32 333,496.09
11,478.11 19,387.36
34,098.15 5,307.75
6,518,456.31 $
-632,242.91 $

3,429,933.31
185,479.77 115,257.43 145,260.07 370,458.02 553,217.30
61,468.08 616,096.27 397,408.89
9,242.64 380,777.39
9,594.95
256,164.96 71,384.52
16,741.72 2,300.68
6,620,786.00
-314,834.83

4,564.44 $ 4,564.44 $

4,564.44
1,600,000.00 87,395.00 3,666.23 $ -3,666.23
1,691,959.44 $

4,638.29' $ 0.00

1,059,716.53 $ 600.731.70

-365.27 -172.26
0.00

2,970.62 -2,970.62
0.00
-314,834.83 917,539.42
-1,483.05 -489.84

4,638.29 $ 1,659,910.70 $

600,731.70

-5-

CALHOUN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30,1999

EXHIBITC"

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 3,930,051.20 $ 3,749,908,05

11,286.64

2,651.49

952,238.00

961,977.23

85,000.00

78,345.14

Total Revenues

$ 4,978,575,84 $ 4,792,881.91

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 Other Support Services Food Services Operation Community Services Operations
Capital Outlay Debt Service

$ 3,223,973.18 $ 3,067,120.21

93,025.19 59,982.59 138,123.20 210,078.58 429,082.88 59,563.52 456,212.28 268,248,44
7,500.00

229,615.17 79,000,18 173,362.60
303,993.74 550,907.25
66,820.30 546,488.80 342,956,05
138.96

6,760.97 39,405.90

Total Expenditures

$ 4,945,789.86 $ 5,406,570.13

Excess of Revenues over (under) Expenditures

$ 32,785.98 $ -613,688.22

OTHER FINANCING SOURCES (USES)

Other Sources Other Uses

$ $ -65,000.00

87,395.00 -3,666.23

Total Other Financing Sources (Uses)

$ -65,000.00 $ 83,728.77

Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ -32,214.02 $ -529,959,45

FUND BALANCE JULY 1. 1998
Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Foods Residual EqUity Transfer

469,756.49 -149,945.06

375,732.00

77,466.86

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 102,873.41 $ 130,728.82

938,581.79

927,530.98

29,500.00

21,638.92

$ 1,070,955.20 $ 1,079,898.72

$ 601,241.76 $ 606,285.18

20,466.14 56,523.00
4,715.00

15,143.84 77,618.21
3,077.75 4,726.44

7,115.82 160.69
2,365.00 414,238.00
800.00

2,136.27 149,54 362.32
333,357.13
19,387.36

$ 1,107,625.41 $ 1,062,244.04 $ -36,670.21 $ 17,654.68

$

3,666.23

$

3,666.23

$ -36,670.21 $ 21,320.91

248,428.78

147,532.84

-45,911.81

-365.27 -172.26

FUND BALANCE JUNE 30, 1999

$ 287,597.41 $ -76,760.59

$ 165,846.76 $ 168,316.22

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

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
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 elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these 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, incompliance 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 ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
-7-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30.1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.
DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
AGENCY FUND - the fund used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations.
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements 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.
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.
Agency funds are purely custodial in nature and do not involve measurement of results of operations.
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, local option sales taxes, intergovernmental grants and investment income.

- 8-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT liD"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. 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, 1999, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion ofthe compensation paid in July and August 1999 was received and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. 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.
!
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
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.
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 ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

-9-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the Board in nonparticipating interest-earning contracts (such as certificates of deposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation ofthe United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions ofthe State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose
-10 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES

The Calhoun County Board ofCommissioners fixed the property tax levy for the 1998 tax year (calendar year) on August 30, 1998 (levy date). Taxes were due on December 20, 1998. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. 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 1998 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 SALES TAXES

=10.18 mills

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $34.50 and was recorded in the Debt Service Fund. The State will terminate collection of this tax once an additional $1,999,965.50 has been collected or on June 30, 2004, whichever occurs first.

INVENTORIES

FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time of purchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net
current assets.

GENERAL OBLIGATION BONDS

The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the

- 11 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1999

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Tenn Debt Account Group.

INTERFUND TRANSACTIONS

The Board has the following types of interfund transactions:

Reimbursements of expenditures initially made from a fund that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.

Residual equity transfers are recorded for nonrecurring or nonroutine pennanent transfers of equity.

Operating transfers are recorded for all interfund transactions other than residual equity transfers and reimbursements.

MEMORANDUM ONLY - TOTAL COLUMNS

Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present fmancial position or results of operations in confonnity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.

DEFICIT FUND BALANCES

Funds reporting a deficit fund balance position at June 30, 1999, are as follows:

Fund Type/Fund Name

Deficit Balances

Governmental Fund Type General Fund

$ 149.476.51

No action was taken in the subsequent period by the Board to fund this deficit.

Note 2: DEPOSITS AND INVES~MENTS

COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by
surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond
and the market value ofsecurities pledged shall be equal to not less than 11 percent ofthe public funds being

- 12-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 2: DEPOSITS AND INVESTMENTS
secured after the deduction ofthe amount ofdeposit insurance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone 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 ofthe State of Georgia, and
(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest or debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.
CATEGORIZATION OF DEPOSITS At June 30, 1999, the bank balances were $655,217.49. The amounts ofthe total bank balances are classified into three categories of credit risk:
Category 1 - Cash that is insured (e,g., Federal depository insurance) or collateralized with securities held by the 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.)
- 13-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT liD"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1999

Note 2: DEPOSITS AND INVESTMENTS

The Board's deposits are classified by risk category at June 30, 1999, as follows:

Risk Categoty

Bank Balance

1

$ 100,000.18

2

555,217.31

3

0.00

Total

$ 655,217.49

CATEGORIZATION OF INVESTMENTS At June 30, 1999, the carrying value of the Board's total investments was $1,569,287.71 which is materially the same as fair value. This investment consisted entirely of funds invested in the Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services which are not required to be categorized since the Board did not own any specific identifiable securities in the pool. The investment policy ofthe State of Georgia, Office of Treasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description ofthe Primary Liquidity Portfolio is as follows:

The Primary Liquidity Portfolio consists of Georgia Fund 1, which is a combination local and state government investment pool, and Fund 6. Georgia Fund 1 is a stable net asset value investment pool which follows Standard and Poor's criteria for AAAm rated money market funds. However, Georgia Fund 1 operates in a manner consistent with Rule 2a-7 of the Investment Company Act of 1940 and is considered to be a 2a-7 like pool. The pool is not registered with the SEC as an investment company. The pool's primary objectives are safety of capital, investment income, liquidity and diversification while maintaining principal ($1.00 per share value). Net asset value is calculated weekly to ensure stability. The pool distributes earnings (net of management fees) on a monthly basis and determines participant's shares sold and redeemed based on $1.00 per share. Pooled cash and cash equivalents and investments are reported at cost which approximates fair value. The pool does not issue any legally binding guarantees to support the value of the shares. Participation in the pool is voluntary and deposits consist of funds from local governments; operating and trust funds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

Investments in Georgia Fund 1 and Fund 6 are directed toward short-term instruments such as U. S. Treasury obligations, securities issued or guaranteed as to principal and interest by the U. S. Government or any of its

- 14-

CALHOUN COUNTy BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1999

Note 2: DEPOSITS AND INVESTMENTS
agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. Fund 6 maintains a duration of approximately one year. The weighted average maturity for Georgia Fund 1 on June 30, 1999 was 27 days. The average investment duration for Fund 6 on June 30, 1999 was 1.03 years.
Note 3: NON-MONETARY TRANSACTIONS
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 ofloss 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 ofthat loss can be reasonably estimated.
Changes in the unemployment compensation claims liability during the last two fiscal years are as follows:

- 15 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 4: RISK MANAGEMENT

1998 1999

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

2,127.00 $

$

0.00 $

10,279.00 $

Claims Paid

End of Year Liability

2.127.00 $

0.00

10.279.00 $

0.00

The Board participates in the Georgia Education Workers' Compensation Trust, a public entity risk pool organized on December 1, 1991 to develop, implement and administer a program of workers' compensation self-insurance for its member organizations. The Board pays an annual premium to the Trust for its general insurance coverage. Additional insurance coverage is provided through an agreement by the Trust with the United States Fidelity and Guaranty Company to provide coverage for potential losses sustained by the Trust in excess of$250,000.00 loss per occurrence, up to $2,000,000.00.

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

Position Covered

Amount

Superintendent Each Principal

$ 50,000.00 $ 10,000.00

Note 5: GENERAL LONG-TERM DEBT

CAPITAL LEASES The Calhoun County Board ofEducation 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 oftheir inception.

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

Purpose

Interest Rate

Amount

General Government - Series 1999

3.95%

$ 1.600,000.00

The changes in General Long-Term Debt during the fiscal year ended June 30, 1999, were as follows:

- 16-

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30. 1999

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1, 1998

$ 17,855.08 $

0.00 $ 17,855.08

Additions Capital Leases G.O. Bonds

87,395.00

1,600,000.00

87,395.00 1,600,000.00

Deductions Payments

34,098.15

34,098.15

Balance June 30, 1999

$ 71.151.93 $ 1.600,000.00 $ 1.671.151.93

At June 30, 1999, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

Capital Leases

General Obligation
Bonds

Total Debt

2000 2001 2002 2003 2004 2005 - 2009

$ 20,363,50 $ 63,200.00 $ 83,563.50

20,363.50

293,558,75

313,922.25

20,363.50

343,091.25

363,454.75

20,363.50

360,846.25

381,209.75

377,416.25

377,416.25

397,702.50

397,702.50

Total Principal and Interest

$ 81,454.00 $ 1,835,815.00 $ 1.917.269.00

Deduct: Imputed Interest

10,302.07

Net Present Value of Future Minimum Lease Payments

$ 71.151.93

Note 6: LOANS PAYABLE

At June 30, 1999, short-term debt (temporary loans) amount to $5,789.65 with interest accruing at 6.50 percent. The aggregate amount of temporary loans is limited to 75 percent of the total gross income from taxes collected in the preceding year and all temporary loans must be repaid no later than December 31 ofthe calender year in which the loan was made.

- 17 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHillIT liD"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 7: ON-BEHALF PAYMENTS
The Board has recognized revenues and expenditures in the amount of$98,553.81 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$75,341.81
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$23,212,00
Note 8: CONTINGENT LIABILITIES
Amounts received or receivable principally from the Federal government are subject to audit and review by grantor agencies. This could result in requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms. The Board believes that such disallowances, if any, will be immaterial to its overall financial position.
Note 9: 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 defmed benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.
TRS CONTRillUTIONS 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. The required employer contribution rate is 11,95% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

- 18-

CALHOUN COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1999

Note 9: RETIREMENT PLANS
Fiscal Year
1999 1998 1997

Percentage Contributed
100% 100% 100%

Required Contribution
$ 402,203,87 $ 386,473.04 $ 381,248.44

- 19-

CALHOUN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 1999

EXHIBIT"E"

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30, 1999 JUNE 30, 1998

$ 147,760,50 $

8,594,04 $ 114,790,88 $

271,145.42 $

47,166.77

1,381.68

4,322.84

5,704.52

194,884.50

1,559.55 876.37

1,559.55 876.37

1,924.82 1,048,63

Total Assets

$ 151,578.10 $

8,594.04 $ 119,113,72 $

279,285.86 $ ==2=4~5~,0~24,;,;,'7;,;;2;",

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Un designated
Total Fund Equity

$ 4,630,72 $ 13,038.60
$ 17,669.32 $
$ 1,559.55 876.37
131,472.86 $ $ 133,908.78 $

1,955.58 $ 6,638.46
8,594.04 $

15,636.66 $ 49,092.04 19,977.58
84,706.28 $

$ 34,407.44 $

0.00 0.00 $

0.00 34,407.44 $

$ 22,222.96 68,769.10 19,977.58 110,969.64 $
34,407.44 $
1,559.55 876.37
131,472.86 168,316.22 $

5,695.93 19,646.23 63,342.95
8,806.77 97,491.88
83,932.86
1,924.82 1,048.63 60,626.53 147,532.84

Total Liabilities and Fund Equity

$ 151,578,10 $

8,594.04 $ 119,113.72 $

279,285.86 $ ==,2..4.~5~,0~24=.7=2=

See notes to the general purpose financial statements.

- 20-

CALHOUN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30,1999

EXHIBIT"F"

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Capital Outlay
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30,1999 JUNE 30, 1998

$ 30,930.00 $ 351,634,54 21,638,92
$ 404.203.46 $

85,314.41 $ 14,484.41 $ 575,896.44

130,728.82 $ 927,530.98 21.638.92

172,307.61 930,111.63
26.697.68

85,314.41 $ 590,380.85 $ 1.079.898.72 $ 1,129,116.92

$
$ 333.357.13 $ 333.357.13 $ $ 70.846.33 $

56.196.63 $ 550.088,55 $ 606.285,18 $ 397,800.48

10,038.90 549.05
2,136.27 149.54
19.387.36

5.104.94 77,069.16
3.077.75 4,726.44
362.32

15.143.84 77.618.21
3.077.75 4.726.44 2,136.27
149.54 362.32 333.357.13 19.387.36

12.997.42 75,701.44
70.382.96 4.933.78
449.43 314.85 380,777.39 71,384.52

88,457.75 $ 640,429.16 $ 1,062,244,04 $ 1.014.742.27

-3.143.34 $ -50.048.31 $

17,654.68 $ 114.374.65

3,143.34

522.89

3.666.23

2,970,62

$ 70.846.33 $ 63,599.98

0.00 $ -49.525.42 $

0,00

83.932.86

21,320.91 $ 147,532.84

117.345.27 32.160.46

-365.27 -172.26

-365.27 -172.26

-1,483,05 -489,84

FUND BALANCE JUNE 30

$ 133,908.78 $ _ _....:;.0.;,;:,00;.. $ 34,407.44 $ 168.316.22 $ 147,532,84

See notes to the general purpose financial statements.

- 21 -

CALHOUN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30,1999

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Investments
Total Assets

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS JUNE 30,1999 JUNE 30,1998

$

3,750.00 $

0.00 $

3,750.00 $ 104,133.76

1,564,683.92

1,564,683.92

$ 1,568,433.92 $ ====,;;;,O';';;'OO~ $ 1,568,433.92 $ ===-10=4=,1=3=3.=76=

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Contracts Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue Unreserved Undesignated
Total Fund Equity

$

4,717.14 $

$

4,717.14 $

$ 1,563,716.78 0.00 $
$ 1,563,716.78 $

0.00 $ 0.00 $

$ 4,717.14
4,717.14 $

26,666.90 26,666.90

$ 1,563,716.78

0.00

0.00 $

0.00 $ 1,563,716.78 $

77,466.86 77,466.86

Total Liabilities and Fund Equity

$ 1,568,433.92 $-=_==,;;;,0';;;;,00;;., $ 1,568,433.92 $ ......==-10;;,,4=,1=3=3.=76=

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 30,1999

EXHIBIT "H"

FUND BALANCE JUNE 30

$ 1,563,716.78 $=====0='0=0= $ 1,563,716.78 $==77===..4=6=6,=86==

See notes to the general purpose financial statements.

- 23-

CALHOUN COUNTY BOARD OF EDUCATION STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUND YEAR ENDED JUNE 30, 1999

EXHIBIT "I"

SPECIAL ACCOUNT
ASSETS Cash and Cash Equivalents Investments

BALANCE JUNE 30, 1998

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1999

$

2,611.50 $

7,830.38

212.39 $

2,823.89 $ 7,830.38

0.00

Total Assets

$

10,441.88 $

212.39 $

10,654.27 $ ======0,=0=0

LIABILITIES Funds Held for Others

$

10,441.88 $

212.39 $

10,654.27 $======0'=0=0

See notes to the general purpose financial statements.

- 24-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S, Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1999 Grant National School Lunch Program 1999 Grant
Total Child Nutrition Cluster
Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1)
Total U. S. Department of Agriculture
Education, U. S, Department of Special Education Cluster Pass-Through From Georgia Department of Education Individuals with Disabilities Education Act Part B - Special Education Capacity Building Improvement Grant 1999 Grant Flow Through 1999 Grant Preschool 1999 Grant
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Elementary and Secondary Education Act Title I Grants to Local Educational Agencies 1999 Grant Title II Eisenhower Professional Development 1998 Grant 1999 Grant Title VI Innovative Education Program Strategies 1999 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1998 Grant 1999 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1999 Grant
Total U. S. Department of Education

CFDA NUMBER
. 10.553 10,555
10,550
84.173 84.027 84.173
84.010 84.281 84.281 84.298 * 84.276 * 84.276 84.048

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

N/A

$

N/A

$

83,140,00
248,465,94 $ 331,605,94 $

(2) 313,328.53 (3) 313,328.53

N/A
$

20,028.60
351,634.54 $

20,028.60 333,357.13

N/A $
N/A N/A
$

759.85 $
54,408.79 6,488.85
61,657.49 $

759.85 54,568,01 (3)
6,488.85 61,816.71

N/A

316,824.47

316,824.47

N/A

7,465.37

N/A

18,500.00

18,500.00

N/A

8,848.00

8,981.77 (3)

N/A

76,467.49

N/A

150,000.00

115,592.56

N/A
$

8,759.84
564,589.80 $

8,759.84 614,408.21

-25-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 1999

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Health and Human Resources, U. S. Department of Pass-Through From Southwest Georgia Regional Mental Health, Mental Retardation and Substance Abuse Substance Prevention and Drug-Free School Grant 1999 Grant
Labor, U. S. Department of Pass-Through From Southwest Georgia Development Center Job Training Partnership Act 96-B-84 98-B-84
Total U. S. Department of Labor

CFDA NUMBER
84.186
17.250 17.250

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

N/A

$

2,651.49 $

9,513.78 (3)

N/A

$

N/A

$

9,113.28 $ 2,193.36

9,343.18 (3) 2,193.36

11,306.64 $_ _--"1..:.11,=53::.;;6;.;.:.54,-,-

Total Federal Financial Assistance
N/A = Not Available

$

930,182.47 $===9=6.8.,.=81=5=.6=6

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 1999 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.

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

The Board did not provide Federal Assistance to any Subrecipient

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

See notes to the general purpose financial statements.

-26-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 1999

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance 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 Middle School Incentive Program Special Instructional Assistance In-School Suspension Counselors Grades 4 and 5 Technology Specialist Local Five Mill Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Georgia Reading First Health Insurance Innovative Programs Preschool Handicapped Program PSAT Exam Remedial Summer School Program Student Records Lottery Programs Assistive Technology Computers in the Classroom
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

$

2,250.00

$

2,250.00

1,951,932.00 436,835.00 128,790.00 84,315.00 21,995.00 554,656.00
138,117.00 44,796.00
204,427.00 67,219.00
111,808.00 48,969.00
7,887.00 28,842.00 -439,411.00 168,472.00
$ 57,553.00
7,219.88
75,341.81 5,000.00
14,586.00 370.50
4,109.36 616.50
23,212.00

30,930.00 14,484.41
4,134.92 16,441.00 64,738.49

1,951,932.00 436,835.00 128,790.00 84,315.00 21,995.00 554,656.00
138,117.00 44,796.00
204,427.00 67,219.00
111,808.00 48,969.00
7,887.00 28,842.00 -439,411.00 168,472.00 30,930.00 57,553.00
7,219.88 14,484.41 75,341.81
5,000.00 14,586.00
370.50 4,109.36
616.50
4,134.92 16,441.00
64,738.49
23,212.00

$

3,749,908.05 $

See notes to the general purpose financial statements.

- 27-

130,728.82 $ =====3=,8=:8=0,=6.3.6.=.8=7=

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30,1999

SCHEDULE "3"

PROJECT
The acquisition, construction and equipping of modifications, extensions, renovations and repairs to the facilities and equipment of the Calhoun County Middle/High School, including, but not limited to the cafeteria, gymnasium and athletic facilities; the acquisition, construction and equipping of modifications, extensions, renovations and repairs to the facilities and equipment of the Calhoun County Elementary School, including, but not limited to the lunchroom, gymnasium and athletic facilities; and acquiring, constructing, equipping and adding to, renovating, repairing, improving and equipping instructional and support facilities, existing school buildings and other buildings and facilities useful or desirable in connection therewith; and acquiring any necessary property therefor, both real and personal, and acquiring any necessary or desirable rights in connection therewith.

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS

$ 2,000,000.00 $ 2,000,000.00 $

4,717.14 $===0=.=00=

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

See notes to the general purpose financial statements.

- 28-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTIERY PROGRAMS YEAR ENDED JUNE 30,1999

SCHEDULE "4"

EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Maintenance and Operation of Plant Student Transportation Services Capital Outlay

ASSISTIVE TECHNOLOGY

COMPUTERS IN THE
CLASSROOM

PRE-KINDERGARTEN PROGRAM

TOTAL

$

4,134.92

$

$

19,387.36

52,061.71 $ 56,196.63

10,038.90 549.05
2,136.27 149.54

10,038.90 549.05
2,136.27 149.54
19,387.36

Total Expenditures

$

4,134.92 $

19,387.36 $=====64:==,9=35=.4=7= $ 88,457.75

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Assistive Technology Computers in the Classroom Pre-Kindergarten Program

$

58,915.89

4,134.92 19,387.36
6.019.58

$

88,457.75

See notes to the general purpose financial statements.

- 29-

CALHOUN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30,1999

SCHEDULE "5"

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

FOURTEEN WEIGHTED AND MEDIA CENTER
PROGRAMS

100% TEST FOR OPERATIONS PORTION OF FOURTEEN WEIGHTED PROGRAMS

$

2,601 ,872.00 $

7;. .;1""",7. ;. 7.; ;.;8.;.; . 00.; . .

$

2,579,346.09

156,877.86 $ _ _-..:..14.:.;:3;.:::,2:.;:0;.::.3:.=;.5.::.,.5

$

2,736,223.95

-44,801.69 $ _ _-=2,l,,;:;,6.;:;..91.;..:.,4..:.:;2=2=.2.;:;..6

$

0.00 $=====0=.0==0

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

CALHOUN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - BY PROGRAM
GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30.1999

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 III (*) Sub-Total - Regular Category VI (Gifted) (*) Total Special Education Programs
REMEDIAL EDUCATION PROGRAM (*) Total Fourteen Weighted Programs
MEDIA CENTER PROGRAMS Salaries Operations Total Media Center Programs
Total Fourteen Weighted and Media Center Programs

ALLOTMENTS FROM GEORGIA DEPARTMENT OF

REQUIRED

ORIGINAL

~

ORIGINAL

MID-TERM

$

202,724.00

$

182,451.60 $

564,502.00

508,051.80

$

767,226.00 90 $

690,503.40 $

234,634.00 90

211,170.60

408,184.00 90

367,365.60

302,050.00 90

271,845.00

89,678.00 90

80,710.20

150,160.00 90

135,144.00

$ 1,951,932.00

$ 1,756,738.80 $

0.00 0.00
0.00

$

420,182.00

$

378,163.80 $

0.00

$

420,182.00 90 $

378,163.80 $

16,653.00 90

14,987.70

$

436,835.00

$

393,151.50 $

$

128,790.00 90 $

115,911.00 $

$ 2,517,557.00

$ 2,265,801.30 $

0.00
0.00 0.00 0.00

$

68,353.00 90 $

61,517.70 $

0.00

15,962.00 100

15,962.00

$

84,315.00

$

77,479.70 $

0.00

$ 2,601,872.00

$ 2,343,281.00 $

0.00

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. See notes to the general purpose financial statements.

$

6,935.00

$

6,935.00 $

0.00

15,060.00

15,060.00

0.00

$

21,995.00 100 $

21,995.00 $======0=.0=0

- 32 -

SCHEDULE "6"

EDUCATION TOTAL
REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$

182,451.60 $

160,182.26 $

4,496.18 $

164,678.44

508,051.80

490,232.60

28,047.49

518,280.09

$

690,503.40 $

650,414.86 $

32,543.67 $

682,958.53 $

7,544.87

211,170.60

258,552.08

16,067.26

274,619.34

0.00

367,365.60

449,275.56

8,543.76

457,819.32

0.00

271,845.00

315,561.41

29,423.38

344,984.79

0.00

80,710.20

78,217.06

2,070.61

80,287.67

422.53

135,144.00

200,455.07

36,044.79

236,499.86

0.00

$ 1,756,738.80 $ 1,952,476.04 $

124,693.47 $ 2,077,169.51

~

$

378,163.80

$

$

378,163.80 $

14,987.70

$

393,151.50 $

$

115,911.00 $

$ 2,265,801.30 $

210,567.20 $ 177,995.06 388,562.26 $
17,282.59 405,844.85 $ 105,582.82 $ 2,463,903.71 $

10,303.97 $ 5,119.61 15,423.58 $
884.28 16,307.86 $ 2,202.22 $ 143,203.55 $

220,871.17 183,114.67 403,985.84
18,166.87 422,152.71 107,785.04 2,607,107.26

0.00 0.00
8,125.96

$

61,517.70 $

115,442.38

$

115,442.38

15,962.00

$ _ _;.;;.13"",6.;;.;7-,4.;.;;.3..;.1

13,674.31

$

77,479.70 $

115,442.38 $

13,674.31 $ _---.;1..::.29;;.:.,.;...11;.;;.6.;.;;.6.;;.;9

0.00 2,287.69

$ 2,343,281.00 $ 2,579,346.09 $

156,877.86 $ 2,736,223.95 $=======18=,3=8=1=.0,;,5

$

6,935.00

15,060.00

$ = =.2..1;.l,,9=9=5.=00,;,

$

17,164.09 $

17,164.09

4,831.03

4,831.03

$

21,995.12 $

21,995.12 $=======0=.0=0

33

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
August 1, 2000

Honorable Roy E. Barnes, 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 COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTlNG BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Calhoun County Board of Education as of and for the year ended June 30, 1999, and have issued our report thereon dated August 1, 2000. 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 the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Calhoun County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Calhoun County Board of Education's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its
99YB-40

operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgement, could adversely affect Calhoun County Board of Education's ability to record, process, summarize and report financial data consistent with assertions ofmanagement in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items FS-6191-99-01, FS-6191-99-02, FS-6191-99-04 and FS-6191-99-06.
A material weakness is a condition in which the design or operation of one Of more of the internal control
components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we considered item FS-6191-99-06 to be a material weakness.
This report is intended solely for the information and use of management, members of the Calhoun County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 99YB-40

Ru sell W. Hinton State Auditor

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

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-X400
August 1, 2000

Honorable Roy E. Barnes, 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 COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-B3
Ladies and Gentlemen:
Compliance
We have audited the compliance of Calhoun County Board of Education with the types of compliance
u.s. requirements described in the Office ofManagement and Budget (OMB) Circular A-i33 Compliance
Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1999. Calhoun County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Calhoun County Board of Education's management. Our responsibility is to express an opinion on Calhoun County Board of Education's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-B3 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Calhoun County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Calhoun County Board of Education's compliance with those requirements.

99SA-30

In our opinion, the Calhoun County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1999.
Internal Control Over Compliance
The management of Calhoun County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Calhoun County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
We noted a certain matter involving the internal control over compliance and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgement, could adversely affect the Calhoun County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. The reportable condition is described in the accompanying Schedule of Findings and Questioned Costs as item FA-6191-99-01.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness.
This report is intended solely for the information and use of management, members of the Calhoun County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,

RWH:gp 99SA-30

R sell W. Hinton State Auditor

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

CALHOUN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6191-96-01 FS-6191-97-01 FS-6191-97-02 FS-6191-97-03 FS-6191-98-0 1 FS-6191-98-02 FS-6191-98-03 FS-6191-98-04

Previously Reported Corrective Action Implemented Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Further Action Not Warranted Unresolved - See Corrective Action/Responses Partially Resolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses Unresolved - See Corrective Action/Responses

CORRECTIVE ACTIONIRESPONSES

EXPENDITURES/LIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $4,216.70 Finding Control Number: FS-6191-97-01

The Board's Local Five Mill Share will be increased in a subsequent fiscal period to refund the QBE underexpenditure of$4,216.70.

EMPLOYEE COMPENSATION Salary Overpayments Amount: $1,769.23 Finding Control Number: FS-6191-97-02

It is the position of the Board that no further action be implemented in retrieving the salary overpayments of$1,769.23 paid to two employees that are no longer working in this system.

CASH AND CASH EQUNALENTS INVENTORIES Inadequate Separation ofDuties Finding Control Number: FS-6191-98-01

Appropriate procedures are in place to ensure that all inventories and bank reconciliations are overseen and signed off on by a designated central office personnel beginning at ending ofthe FY 99 audit.

- 1-

SECTION IV FINDINGS AND QUESTIONED COSTS

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999

I SUMMARY OF AUDITOR'S RESULTS

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

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

Cash and Cash Equivalents Inventories General Fixed Assets

Employee Compensation General Ledger

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

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

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

Cash Management

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

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

6. Audit Findings Required to be Reported by Section .51 O(a) of OMB Circular A-133 The Calhoun County Board of Education's audit disclosed an audit finding required to be reported by section .510(a) ofOMB Circular A-133. This audit finding is included in Section N ofthis report.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.276 Goals 2000 - State and Local Education Systemic Improvement Grants

- 1-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 1999
I SUMMARY OF AUDITOR'S RESULTS
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Calhoun County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUNALENTS INVENTORIES Inadequate Separation of Duties Reportable Condition Repeated From Prior Year Finding Control Number: FS-6191-99-01
The Board did not provide for adequate separation of employee duties in the performance of accounting functions and related procedures applicable to the School Food Service Fund. The following deficiencies were noted:
Cash and Cash Equivalents
The bank statements were reconciled by an individual directly connected to cash operations, and were not reviewed by an administrator independent of cash operations.
Inventories
The goods receiving function was not separated from the inventory records. In addition, the custodianship of inventory was not separated from the receiving function, and review of inventory records was not performed by someone independent ofthe goods receiving function.
Separation of duties involving key accounting functions is the basis for achieving an adequate system of internal control. This deficiency was a result ofmanagement's decision to limit the number of administrative staffmade responsible for accounting functions applicable to the School Food Service Fund. Management should periodically review this decision to determine if employee duties can be reassigned to achieve a higher degree of internal control with the existing staff.
-2-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCV\L STATEMENT FINDINGS AND QUESTIONED COSTS
CASH AND CASH EQUIVALENTS GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Repeated From Prior Year Finding Control Number: FS-6191-99-02
Accounting procedures of the Calhoun County Board of Education were insufficient to provide adequate internal controls over the Cash and Cash Equivalents and General Ledger control categories as noted below:
Cash and Cash Equivalents
An unidentified variance of$120.35 was noted in the general operating account.
General Ledger
Numerous posting errors in balance sheet, revenue and expenditure accounts were identified and corrected during the course of our field work.
Journal entries were made without proper supporting documentation or explanation and proper supervisory approval.
These deficiencies occurred because ofmanagement's failure to establish procedures to analyze and reconcile balances on the general ledger with supporting records, and management's failure to ensure journal entries made to the general ledger contained supporting documentation and adequate explanations. The Board should establish appropriate procedures to ensure that the general ledger is posted, balanced, and reviewed on a monthly basis and that detailed records supporting the general ledger are complete, accurate and reliable.
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $18,381.05 Finding Control Number: FS-6191-99-03
The Calhoun County Board ofEducation reported to the Georgia Department of Education on DE form 0420 underexpenditures of Quality Basic Education (QBE) funds of $7,544.87 for the Grades K-3 Program, $422,53 for the High School Laboratories Program, $8,125.96 for the Remedial Education Program and $2,287.69 for the Media Center Program.
-3-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Nonmaterial Noncompliance Amount: $18,381.05 Finding Control Number: FS-6191-99-03
The underexpenditure of the various QBE Programs listed above occurred because the Board expended less than the minimum expenditure requirement for these QBE Programs. These funds should be returned to the Georgia Office of Treasury and Fiscal Services.
EMPLOYEE COMPENSATION Salary Overpayment/Underpayment Reportable Condition Amount: $3,632.02 Finding Control Number: FS-6191-99-04
An examination ofpayroll records was performed on seventeen employees of the Calhoun County Board of Education. Our testing revealed that the Board overpaid employees in two instances amounting to $3,223.61 and underpaid one employee in the amount of $408.41. One overpayment and one under payment were the result of employee errors in payroll calculations. The other overpayment was the result of additional work being compensated at an excessive rate ofpay. The Board should seek reimbursement for the overpayments for deposit to the Board's General Fund and should issue a check to the underpaid employee.
GENERAL LEDGER Outstanding Loan Nonmaterial Noncompliance Finding Control Number: FS-6191-99-05
On December 31, 1998, the General Fund had an unpaid loan outstanding in the amount of$8,342.19. Article IX, Section V, Paragraph V of the Constitution of the State of Georgia provides, in part, as follows:
"The governing authority of any county, municipality or other political subdivision of this state may incur debt by obtaining temporary loans in each year to pay expenses... Such loans shall be payable on or before December 31 of the calendar year in which such loan is made..."
This condition occurred because the Board did not have adequate cash available to make loan payments on December 31, 1998. Repayment of loans should be made in conformity with constitutional limitations.
-4-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1999
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6191-99-06
The Calhoun County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements 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 ofa General Fixed Assets Account Group. These subsidiary records should include an inventory ofland, 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.
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CASH MANAGEMENT Excessive Cash Balances Reportable Condition U. S. Department of Education Through Georgia Department of Education Finding Control Number FA-6191-99-01
A review of cash management procedures for the Goals 2000 - State and Local Education Systemic Improvement Grants (CFDA 84.276) disclosed that cash draws utilizing DE Form 0147, "Quarterly Report of Expenditures and Estimated Requirements for Grant Funds", were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances. During fiscal year 1999, the program had an average cash balance of$21,453.00 and had excessive ending monthly cash balances in ten months. The excessive cash balances were the result ofmanagement's failure to accurately forecast the cash needs ofthis program. Procedures should be implemented to minimize the time elapsing between the transfer of funds from the Georgia Department of Education and disbursement of such funds by the Board.
-5-