fOfJr A-BOD /2.1 E26 CIS Iqqg 2000 STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 000000 00 1776 I CALHOUN COUNTY BOARD OF EDUCATION MORGAN, GEORGIA REPORT ON AUDIT OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2000 Russell W. Hinton State Auditor 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 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS ADDmONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2 SCHEDULE OF STATE REVENUE 3 .SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS ANALYSIS OF EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 4 OVERALL , 5 BY PROGRAM Page 2 4 7 8 20 22 24 25 26 27 28 CALHOUN COUNTY BOARD OF EDUCATION -TABLEOFCONTENTS- SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS S Y SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTIONN 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 Washingtoll Strcct, S.W.. Suitc 214 Atlanta, Gcorgia 30334-X400 July 6,2001 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 ofEducation 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, 2000, 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 auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial 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: 2000ARL-13A * The general purpose financial statements ofthe 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 com-'.:nn to generally accepted accounting principles. * School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general" purpose financial statements. * The Board did not recognize as expenditures, in the year ended June 30, 2000, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2000. Also funds received, subsequent to June 30, 2000, 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, 1999, were improperly recorded in the year ended June 30, 2000. 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 ofJune 30, 2000, and the results ofits operations for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated July 6, 2001, on our consideration of the Calhoun County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Our audit was performed 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 accompanying combining statements (Exhibits E and F) and the financial schedules (Schedules 1 through 5), which includes the Schedule ofExpenditures ofFederal Awards as required byU. S. Office ofManagement and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects of the matters referred to in the third paragraph, such information is fairly stated, in all material respects, in relation to the general purpose financial statements taken as a whole. 2000ARL-13A A copy ofthis report has been filed as a pennanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 50- 6-24. Respectfully submitted, RWH:jb 2000ARL-13A 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. 2000 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 GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 469,522.27 $ 3.750.00 $ 9.181.85 1,301.939.56 12.375.59 9.636.96 4,495.77 2.511.72 Total Assets $_.....:2;;.:.1.557.44 $ _ _4.-8-.6.166.72 $_--:.1.305,689.56 LIABILITIES AND FUND EQUITY LIABILITIES Gash Overdraft Accounts Payable Salaries Payable Notes Payable Expired Grant Balances Payable Contracts Payable Retainages Payable 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 Deficit Total Fund Equity $ 451,271.38 96,636.30 $ 55,833.84 $ 1,759.00 65.037.07 13,398.77 154,123.61 105,044.28 200,080.18 32,402.43 $ 563,065.45 $ 274,994.52 $ _ _...::!3~37!.1;,5~2:l:!6.:.!:!.8L9 $. 63.214.08 $ 18,403.59 29.773.61 4,495.77 2,511.72 $ 10,689.73 0.00 -633,815.41 174,391.10 $ -541,508.01 $ 211,172.20 $ 968,162.67 0.00 968,162.67 Total Liabilities and Fund Equity $ _ _,,:;2;,,:.1,557.44 $ _ _4~86~,166.72 $ _...:.1,305,689.56 The notes to the general purpose financial statements are an integral part of this statement. -2- EXHIBIT "A" DEBT SERVICE FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS _ _ _(Memorandum Onl>::l~=,.... JUNE 30, 2000 JUNE 30, 1999 $ 34.50 $ 473,306.77 $ 274,895.42 209,469.61 1.520,591.02 1.680,777.29 56,127.18 78,139.73 46,471.12 4,495.77 2,511.72 $ 265,631.29 265,631.29 1,559.55 876.37 4,638.29 1,334,368.71 54,790.34 1,334,368.71 54,790.34 1,595,361.71 71,151.93 $ 265,631.29 $ _ _....1..654,790.34 $ 3,733,835.35 $ 3,675,731.68 $ 451,271.38 $ 177,645.36 257,514.42 67,770.22 66,796.07 68,769.10 5.789.65 167.522.38 19,977.58 200.080.18 4,717.14 32,402.43 $ 54.790.34 54.790.34 71,151.93 1,600,000.00 1,600,000.00 1,600,000.00 $ 1,654,790.34 $ 2,830,377.20 $ 2.D15,820.98 $ 265,631.29 0.00 $ _-,2~6~5.&:::,6~31..:...2:::9::... $ 63,214.08 $ 29,773.61 265,631.29 18,403.59 39,405.90 34,407.44 4,638.29 22,620.29 4,495.77 2.511.72 968,162.67 1,559.55 876.37 1,563,716.78 10.689.73 174.391.10 -633,815.41 10,689.73 131,472.86 -149,476.51 $ 903,458.15 $ 1,659,910.70 $ _ _;;;;26;.:5,631.29 $ _ _-:0.1,6~54;:;;;,790.34 $ 3,733,835.35 $ 3,675,731.68 -3- CALHOUN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2000 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 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 GENERAL FUND SPECIAL REVENUE FUND $ 3,722.512.14 $ 19,443.67 959,013.97 83,558.38 178.689.63 813,492.53 20,793.68 $ 4,784528. 16 $ _---:.,,1,,::.01.:.,:2:.t.:9,:.:.7.::..5.~84:;:",. $ 3.089,848.76 $ 230.802.84 79.140.42 161,414.51 272.213.91 587.151.95 82.683.93 466.935.25 255,054.91 1.441.00 509.522.21 16,755.34 48,697.18 11,369.18 12,428.10 937.28 705.98 2.001.17 374,499.59 16.361.59 4.001.91 $ 5.247.050.98 $ _ _~97:..::6:.:.9~1~6':.l!:03~ $ -462,522.82 $ _ _.....:3~6~.0:.:::5.::..9.~81.:.... $ $ -.::2~.2::.24..:..:.::::60~ 2,224.60 $ -2,224.60 $ _ _--::2:.L:.2=2~4.~60~ $ -464,747.42 $ -76,760.59 38,284.41 168,316.22 2,936.22 1,635.35 FUND BALANCE JUNE 30 $ _ _-5..4...1..508.Q1 $ The notes to the general purpose financial statements are an integral part of this statement. -4- 21,;,,:1,172.20 EXHIBIT "B" CAPITAL PPt;JECTS 'jND _ _W"._ DEBT SERVICE FUND TOTALS _ _ _(Memorandum Onl:aL... _ YEAR ENDED JUNE 30, 2000 JUNE 30, 1999 $ $ _ _.....:8~5~,3:.:::9.:::;6.c:::.93=- $ 85,396.93 $ $ 318,820.91 5,372.09 324,193.00 $ 3,901,201.77 $ 832,936.20 1,277,834.88 195,121.08 6,207,093.93 $ 3,880,636.87 930,182.47 962,011.73 113,382.33 5,886,213.40 $ $ 1,353.81 679,597.23 _ _ _ _ _ _ $ _ _...;6:;.:::3"""2:.::;0",,,0,;.:.;00:- $ 680,951.04 $ 63,200.00 $ $ -595,554.11 $ 260,993.00 $ 3,599,370.97 $ 3,673,405.39 247,558.18 127,837.60 172,783.69 284,642.01 587,151.95 84,037.74 467,872.53 255,760.89 3,442.17 374,499.59 679,597.23 244,759.01 156,618.39 176,440.35 308,720.18 550,907.25 111,745.30 '548,625.07 343,105.59 362.32 333,496.09 11,478.11 19,387.36 16,361.59 67,201.91 34,098.15 5,307.75 6,968,118.05 $ 6,518,456.31 -761,024.12 $ _ _-6"",3:;2"",,2:.;.42:::.;.:.;91.:... $ -595,554.11 $ 1,563,716.78 $ 4,564.44 1,600,000.00 87,395.00 $ 2,224.60 3,666.23 -2,224.60 -3,666.23 $ 0.00 $ 1,691,959.44 260,993.00 $ 4,638.29 -761,024.12 $ 1,659,910.70 1,059,716.53 600,731.70 2,936.22 1,635.35 -365.27 -172.26 $ _ _.9.6..8.,162.67 $ 26.5.,631.29 $ 90.3.,458.15 $ _ _1,659,910.70 -5- CALHQUN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF ~EVEN!,JES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACT!,JAL - (NON-GAAP BASIS) GENERAL AND SPECIAL ~EVENUE FUNDS YEAR ENDED JUNE 30, 2000 EXHIBIT C GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) REVENUES State Funds Federal Funds Taxes Other Funds $ 3,756,027.00 $ 3,722,512.14 19,443.67 952,238.00 959,013.97 85,000.00 83,558.38 Total Revenues $ 4,793,265.00 $ 4,784,528.16 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 Debt Service $ 2,939,103.26 $ 3,089,848.76 161,182.17 69,583.71 167,685.93 288,373.78 461,491.20 80,916.85 372,819.37 273,622.57 6,200.00 230,802.84 79,140.42 161,414.51 272,213.91 587,151.95 82,683.93 466.935.25 255,054.91 1,441.00 20,363.50 Total Expenditures $ 4,820,978.84 $ 5.247,050.98 Excess of Revenues over (under) Expenditures $ -27,713.84 $ -462,522.82 OTHER FI,NANCING SOURCES (USESl Other Sources Other Uses Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses $ $ _ _..:-2"",2::2..:.;4.:::.60::... $ _ _~-2:c:,2:::.24"".~60::.... -27,713.84 $ -464.747.42 FUND BALANCE JULY 1. 1999 17,159.46 -76,760.59 Adjustments Food Inventory - Net Change in Period Donated Commodities Purchased Food -200,919.20 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 507,805.50 $ 178,689.63 582,336.26 813,492.53 19,400.00 20,793.68 $ 1,109,541.76 $ 1,012,975.84 $ 630,339.80 $ 509,522.21 13,955.37 37,013.44 13,094.35 16,755.34 48,697.18 11,369.18 12,428.10 6.514.03 3.062.18 399,400,00 800.00 937.28 705.98 2,001.17 374,499.59 $ 1.104,179.17 $ _-..::9~7.:::.6'L:::9..:.;16::,;.~03,,- $ 5.362.59 $ _---.;3~6~,0~5~9.~8.!...1 $ 2,224.60 $ _ _...o:2:c:,2:::.24"".~60::.... $ 5,362.59 $ 38,284.41 234,124.66 168,316.22 -47.709.54 2,936.22 1,635.35 F!,JND BALANCE JUNE 30, 2000 $ -211 .473.58 $ _ _-,;;,54_1.,.5..0..8'.,;;,01.. $ .777. 191 71 $ _...:.21:.:1...1.:.:.7.=;2.~20~ The notes to the general purpose financial statements are an integral part of this statement. -7- CALHOUN COUNTY BOARD OF EDUCAnON EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 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 ofall 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, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. - 8- CALHOUN COUNTY BOARD OF EDUCATION EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note I: SUMMARY OF SIGNIFIC, u~T ACCOUNTING POLICIES SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources other than for major capital projects that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND - the fund used to account for the accumulation ofresources for, and the payment of, general long-term principal, interest and paying agent fees. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding and capital lease obligations. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Governmental funds are accounted for using the modified accrual basis ofaccounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income. Expenditures are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2000, a substantial number of personnel of the Board were employed for a one hundred and ninety day -9- CALHOUN CO UNTY BOARD OF EDUCATION EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES period beginning in early August 1999 and ending in late May 2000. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1999 and ending in August 2000. State grants to fund the State's share of these contracts were disbursed from the Georgia Department ofEducation to the Board in the same twelve months. As ofJune 30, 2000, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2000, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 2000. Also, the State's portion ofthe compensation paid in July and August 2000 was received and recorded as revenue in the fiscal year subsequent to June 30, 2000. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1999, were recorded in the year ended June 30, 2000. 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 ofEducation's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget 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 ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws OCGA 45-8-14 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. - 10- CALHOUN COUNTY BOARD OF EDUCAnON EXHIDIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate of return shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following: (1) Obligations issued by the State of Georgia or by other states, (2) Obligations issued by the United States government, (3) Obligations fully insured or guaranteed by the United States government or a United States government agency, (4) Obligations of any corporation of the United States government, (5) Prime banker's acceptances, (6) The Local Government Investment Pool administered by the State ofGeorgia, Office of Treasury and Fiscal Services, (7) Repurchase agreements, and (8) Obligations of other political subdivisions of the State of Georgia. RECEIVABLES Receivables consist ofgrant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. - 11 - CALHOUN COUNTY BOARD OF EDUCAnON EXHmIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PROPERTY TAXES The Calhoun County Board of Commissioners fixed the property tax levy for the 1999 tax year (calendar year) on October 21, 1999 (levy date). Taxes were due on January 10,2000. The lien date for property taxes was January 1, 1999. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2000. 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 1999 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 8.43 mills SALES TAXES Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $318,820.91 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $1,681,144.59 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 ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component ofnet 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 full faith and credit ofthe government. The outstanding amount ofthese bonds is recorded in the General Long-Term Debt Account Group. - 12- CALHOUN COUNTY BOARD OF EDUCATION EXHffiIT "0" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 2000 Note I: SUMMARY Or. SIGNIFICANT ACCOUNTING POLICIES INTERFUND TRANSACTIONS The Board has the following types of interfund transactions: Reimbursements ofexpenditures 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 and reimbursements. MEMORANDUM ONLY - TOTAL COLUMNS Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations 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. Certain reclassifications have been made to the comparative data to conform to the current year classifications. DEFICIT FUND BALANCES Funds reporting a deficit fund balance position at June 30, 2000, are as follows: Fund Type/Fund Name Deficit Balances Governmental Fund Type General Fund $==="6~3~3.815.41 To fund this deficit, the Board has increased the local property tax levy to yield additional funding of approximately $675,000.00 per year. Note 2: DEPOSITS AND INVESTMENTS COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. If a depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe - 13 - . CALHOUN COUNTY BOARD OF EDUCAnON EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 2: DEPOSITS AND INVESTMENTS securities pledged to secure a pool ofpublic funds shall be not less than 11 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts. Acceptable security for deposits consists of anyone of or any combination of the following: (1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia, (2) Insurance on accounts provided by the Federal Deposit Insurance Corporation, (3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia, (4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia, (5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose, (6) Industrial revenue bonds and bonds of development authorities created by the laws 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, 2000, the bank balances were $411,856.52. 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.) - 14- CALHOUN COUNTY BOARD OF EDUCATION EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 2: DEPOSITS AND INVESTMENTS The Board's deposits are classified by risk category at June 30, 2000, as follows: Risk Category Bank Balance I $ 109,182.03 2 0.00 3 302,674.49 Total $ 411,856.52 CATEGORIZATION OF INVESTMENTS At June 30, 2000, the carrying value of the Board's total investments was $1,511,409.17 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 ofGeorgia, Office ofTreasury and Fiscal Services for the Local Government Investment Pool (primary Liquidity Portfolio) does not provide for investment in derivatives or similar investments. A description of the Primary Liquidity Portfolio is as follows: The Primary Liquidity Portfolio consists ofGeorgia 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. The pool is not registered with the SEC as an investment company but does operate Georgia Fund 1 in a manner consistent with Rule 2a-7 ofthe Investment Company Act of 1940 and is considered to be a Rule 2a7 like pool. 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 values 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 ofthe shares. Participation in the pool is volW1tary 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 directe~ 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 agencies or instrumentalities, banker's acceptances and repurchase agreements. The weighted average maturity of Georgia Fund 1 may not exceed 60 days. The weighted average maturity for Georgia Fund 1 on June 30, 2000, was 23 days. The average investment duration for Fund 6 on June 30, 2000, was .80 year. - 15 - CALHOUN COUNTY BOARD OF EDUCAnON EXHffiIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 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 of that loss can be reasonably estimated. Changes in the unemployment compensation claims liability during the last two fiscal years are as follows: 1999 2000 Beginning of Year Liability_ Claims and Changes in Estimates Claims Paid End ofYear Liability_ $ 0.00 $ 10,279.00 $ 10,279.00 $_ _~O=.O=O $ 0.00 $ 1,506.00 $ I,506.00 $_ _~O=.O=O 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 ofworkers' 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. - 16- CALHOUN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS .JUNE 30, 2000 Note 4: RISK MANAGEMENT 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 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. GENERAL OBLIGATION DEBT OUTSTANDING General Obligation Bonds currently outstanding are as follows: _ _ _ _~Purp~o:::..:se::.- _ 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, 2000, were as follows: Balance July 1, 1999 Deductions Payments Balance June 30, 2000 Capital Leases General Obligation Bonds Total $ 71,151.93 $ 1,600,000.00 $ 1,671,151.93 16,361.59 16,361.59 $ 54.790.34 $...1 .600.QQO.QQ $ 1,654.790,34 At June 30, 2000, payments due by fiscal year which includes principal and interest for these items are as follows: - 17 - CALHOUN COUNTY BOARD OF EDUCATION EXHIBIT "0" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 Note 5: GENERAL LONG-TERM DEBT , Fiscal Year Ended June 30 Capital Leases General Obligation Bonds Total Debt 2001 2002 2003 2004 2005 $ 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 $ 61,090.50 $ 1,772,615.00 $~,833?705.50 Deduct: Imputed Interest 6,300.16 Net Present Value of Future Minimum Lease Payments $ 54,79Q)4 Note 6: ON-BEHALF PAYMENTS The Board has recognized revenues and expenditures in the amount of $83,136.15 for health insurance and retirement contributions paid on the Board's behalfby the following State Agencies. Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance ofNon-Certified Personnel In the amount of$65,596.15 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$17,540.00 Note 7: SIGNIFICANT COMMITMENTS The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the Board as of June 30, 2000: Project Unearned Executed Contracts Calhoun County Elementary and Middle/High School Modifications $ 656,310,67 The amount described in this note is not reflected in the general purpose financial statements. - 18- CALHOUN COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30, 2000 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 ofGeorgia (TRS), which is a cost-sharing multiple employer defined benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and acopy can be obtained from the Georgia Department of Audits and Accounts. TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% 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 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows: Fiscal Year Percentage Contributed Required Contribution 2000 1999 1998 100% 100% 100% $ 379,481.90 $ 402,203.87 $ 386,473.04 - 19- CALHOUN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2000 ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food SCHOOL FOOD SERVICES FUND LOTTERY PROGRAMS $ 192,202.52 $ 29,542.27 2,527.69 1,314.80 4,495.77 2,511.72 Total Assets $ 201,737.70 $ ===3.0....,8.=.57=.0;;.;7= LIABILITIES AND FUND EQUITY LIABILITIES 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 Undesignated Total Fund Equity Total Liabilities and Fund Equity $ 4,795.30 $ 15,068.12 15,543.81 7,876.28 7,912.67 $ 20,339. 11 $ _ _..;:3:.::;0.18.:;'.:::.57.:..:.=.07:..,.. $ 4,495.77 2,511.72 174,391.10 $ $ 181,398.59 $ O=..=. OO=_ O~..::.;OO~ $ 201 ,737.70 $ ===3=0ol.:,8,.57,;,;.,;;;,07:.:, See notes to the general purpose financial statements. - 20 - . EXHIBIT "E" FEDERAL PROGRAMS TOTALS JUNE 30. 2000 JUNE 30, 1999 $ 247.777.48 $ 469.522.27 $ 271.145.42 5,794.47 9,636.96 5.704.52 4,495.77 2,511.72 1,559.55 876.37 $ 253,571.95 $ 486,166.72 $ =====2...7...9..0;;.2;;;,8,;;,;5..8..6.== $ 35,970.42 $ 55.833.84 $ 41.616.98 65.037.07 146.210.94 154.123.61 22,222.96 68.769.10 19.977.58 $ 223.798.34 $ 274.994.52 $ _ _1.:.;1;.::0..:.9:.;:.6;:,:9..:;.64.:,.. $ 29.773.61 $ 29,773.61 $ 34,407.44 4,495.77 2,511.72 1,559.55 876.37 0.00 174,391.10 131,472.86 $ 29.773.61 $ 211.172.20 $ _ _1.:.::6:=;8..:,3:.:.16;::,:.=:22=- $ =====2=5..3..,571.95 $ 486,166.72 $ -==......,;2;;;,,;7.-9.285.86 - 21 - CALHOUN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2000 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 LOTIERY PROGRAMS $ 28,476.00 $ 132,348.63 368,148.15 20,793.68 $ 417 ,417.83 $ _ _1.:.::3=2=,3c.:..48"".:.;63~ $ 109,892.65 16,755.34 624.40 5,088.00 937.28 705.98 $ 374,499.59 $ 374,499.59 $ _ _1:.:;:3c.:..4'z.::.0",,03~.6::;.:5,- $ 42,918.24 $ -1,655.02 $ 42,918.24 $ 133,908.78 2,936.22 1,635.35 1,655.02 0.00 0.00 FUND BALANCE JUNE 30 $ 181,398.59 $ = = =......0;0,.;.0..0.... See notes to the general purpose financial statements. - 22- EXHIBIT "F" FEDERAL PROGRAMS TOTALS YEAR ENDED JUNE 30, 2000 JUNE 30,1999 $ 17,865.00 $ 178,689.63 $ 130,728.82 445,344.38 813,492.53 927,530.98 20,793.68 21 ,638.92 $ 463,209.38 $ 1,012,975.84 $ 1,079,898.72 <.:-' 399,629.56 $ 509,522.21 $ 606,285.18 48,072.78 11,369.18 7,340.10 2,001.17 16,755.34 48,697.18 11,369.18 12,428.10 937.28 705.98 2,001.17 374,499.59 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 $ 468,412.79 $ 976,916.03 $ 1,062,244.04 $ -5,203.41 $ 36,059.81 $ 17,654.68 569.58 2,224.60 3,666.23 $ -4,633.83 $ 38,284.41 $ 21,320.91 34,407.44 168,316.22 147,532.84 2,936.22 1,635.35 -365.27 -172.26 $ 29,773.61 $ 211,172.20 $ ====1..6_8d,a3i.1.6;;,;.=22;;;", - 23- CALHOUN COUNTY BOARD QF EDUCATIQN SCHEDULE OF EXPE-!'!QlTURES OF WI;BAL AWABQS. YEAR I;NDED JUt:lE 30. 2000 SCHEDULE "1" FUNDING AGENCY PROGRAM/GRANT CFDA NUMBER PASSTHROUGH ENTITY ID NUMBER Agriculture. U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program National School Lunch Program " 10.553 " 10.555 NlA $ NlA Total Child Nutrition Cluster $ Other Programs Pass-Through From Georgia Department of Education Food and Nutrition Program Food Distribution Program (1) 10.550 N/A 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 Flow Through Pass-Through From Georgia Department of Education Elementary and Secondary Education AJ;t Title I Grants to Local Educational Agencies Title II Eisenhower Professional Development Title VI Class Size Reduction Innovative Education Program Strategies Goals 2000 State and Local Education Systemic Improvement Grants PaSS-Through From Southwest Georgia Regional Mental Health, Mental Retardation and Substance Abuse Board Substance Prevention and Drug-Free School Grant 84.027 " 84.010 84.281 84.340 84.298 84.276 84.186 NlA $ NlA NlA NlA NlA NlA NlA Total U. S. Department of Education $ Labor. U. S. Department of Pass-Through From Southwest Georgia Development Center Job Training Partnership AJ;t 17.250 NlA $ FEDERAL REVENUE IN PERIOD EXPENDITURES IN PERIOD 255.739.32 91,670.64 $ 347,409.96 $ (2) 353.761.40 (3) 353.761.40 20,738.19 368,148.15 $ 20,738.19 374,499.59 55,576.63 $ 55,576.63 263,865.43 16,000.00 25.626.43 9,440.00 57.359.50 19.443.67 447,311.66 $ 263,865.43 16,022.07 (3) 25,626.43 9,441.95 (3) 61,993.33 19,443.67 451,969.51 17.476.39 $ 17,476.39 Total Federal Financial Assistance NlA = Not Available $ _....;8~3~2.936.20 $ _ _84;;,,;,;;3,945.49 (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 induded in the 2000 . 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 r) in front of the CFDA number. The Board did not provide Federal Assistance to any Subrecipienl. 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 24 . CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2000 SCHEDULE "2" AGENCY/FUNDING GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs $ Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation RegUlar Bus Replacement Sparsity Grant 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 Preschool Handicapped Program Remedial Summer School Program Lottery Programs Assistive Technology Computers in the Classroom Georgia Department of Community Affairs Govemor's Emergency Funds (1) Local Assistance Grants 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 1,961,562.00 499,514.00 123,174.00 84,638.00 21,527.00 549,870.00 138,757.00 44,560.00 213,307.00 87,452.56 39,115.00 8,568.00 28,842.00 -449,427.00 187,191.00 $ 53,095.00 5,513.64 65,596.15 20,624.00 3,242.79 8,250.00 10,000.00 17,540.00 $ 28,476.00 17,865.00 5,759.80 53,000.00 73,588.83 TOTAL 1,961,562.00 499,514.00 123,174.00 84,638.00 21,527.00 549,870.00 138,757.00 44,560.00 213,307.00 87,452.56 39,115.00 8,568.00 28,842.00 -449,427.00 187,191.00 28,476.00 53,095.00 5,513.64 17,865.00 65,596.15 20,624.00 3,242.79 5,759.80 53,000.00 8,250.00 10,000.00 73,588.83 17,540.00 $ 3,722,512.14 $ 178,689.63 $ 3,901,201.77 (1) The purpose of the funds is for the replacement of a faulty compressor for the Calhoun County Elementary School. See notes to the general purpose financial statements. -25 - CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS YEAR ENDED JUNE 30. 2000 SCHEDULE "3" PROJECT ORIGINAL ESTIMATED COST (11..:.L.)_ CURRENT ESTIMATED COSTS (2) AMOUNT EXPENDED IN CURRENT YEAR (3) (4) AMOUNT EXPENDED IN PRIOR YEARS The acquisition, construction and equipping of modifications, extensions, renovations, and repairs to the facilities and equipment of the Calhoun County MiddlelHigh School, induding, 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, induding, but not limited to the lunchroom, gymnasium and athletic facilities; and acquiring, constructing and 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 $ 2,000,000.00 $ 2,000,000.00 $ _ ....6;;;,;7.:;,9,597.23 $ 4,717.14 (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. Indudes 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 indude sales tax proceeds, state, local property taxes and/or other funds over the life of the project. (4) In addition to the expenditures shown above, the Board incurred current year interest expenditures in the amount of $63,200.00 to provide advanced funding for the above project. See notes to the general purpose financial statements. -26- CALHOUN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS - OVERALL GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 2000 SCHEDULE "4" 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 $ 2,668,888.00 $ _ _---.,;6:.:9~6,:.,::0.=.;9,:":'0.:..0 $ 2,634,939.13 178,554. 7 $ _ _--:.;16:.:2:.!.:5,~7..:.:1.:.:.96.:.. $ 2,813,493.20 -7,759.39 $ _ _..;:2.z.;8:;.=, .;05:;;,z"7;;...;:3;;.;:;3.:.;:.8~1 $ 0.00 $ ======0=.0:=0 See notes to the general purpose financial statements. - 27 - . CALHOUN COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDIJURE REQUIREME;NTS - BY PROGRAM GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS YEAR END~D JUNE 3D. 2000 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 E,DUCAl'ION PROGRAMS Regular Programs Category II (*) Category III (*) Sub-Total - Regular Category VI (Gifted) (*) Total Special Education Programs REMEDIAL EDUCATIQN PROGRAMl:.} Total Fourteen Weighted Programs M~DIA CENTER PROGRAMS Salaries Operations Total Media Center Programs ALLOTMENTS FROM GEORGIA DEPARTMENT "OF REQUIRED ORIGINAL % ORIGINAL MID-TERM $ 212,420.00 $ 191,178.00 $ 552,204.00 496,983.60 $ 764,624.00 90 $ 688,161.60 $ 254,831.00 90 229,347.90 409,163.00 90 368,246.70 278,452.00 90 250,606.80 95,429.00 90 85,886.10 159,063.00 90 143,156.70 $ 1,961,562.00 $ 1,765,405.80 $ $ 472,908.00 $ 425,617.20 $ 0.00 0.00 ~O::.::.O::::..O 0.00 $ 472,908.00 90 $ 425,617.20 $ 26,606.00 90 23,945.40 $ 499,514.00 $ 449,562.60 $ $ 123,174.00 90 $ 110,856.60 $ $ 2,584,250.00 $ 2,325,825.00 $ 0.00 ~0::.::.00:.:::. ---:0:.:,:.0:.:::.,0 ---:0:.:,:.0:.:::.,0 $ 69,475.00 90 $ 62,527.50 $ 15,163.00 100 15,163.00 $ 84,638.00 $ 77,690.50 $ 0.00 ~O::.::.O:.:::.O Total Fourteen Weighted and Media Center ,:,rograms $ 2,668,888.00 $ 2,403,515.50 $ ....;;:O~.O~O STAJ:F DEVELOPMENT PROGRAM Cost of Instruction Professional Development Total Staff Development Programs (*) Identifies Fourteen Weighted Programs. $ 6,982.00 14,545.00 $ 6,982.00 $ 14,545.00 $ 21,527.00 100 $ 21,527.00 $ 0.00 0.00 -:;0;;,:.0;:;;.0 See notes to the general purpose financial statements. - 28 SCHEDULE "5" EDUCATION TOTAL REQUIRED ACTUAL EXPENDITURES SALARIES OPERATIONS TOTAL AMOUNT OF UNDEREXPENDITURE FOR REQUIRED ALLOTMENT $ 191,178.00 $ 191,877.17 $ 2,772.68 $ 194,649.85 496,983.60 485,854.50 13,120.37 498,974.87 $ 688,161.60 $ 677,731.67 $ 15,893.05 $ 693,624.72 $ 0.00 229,347.90 241,118.38 11,988.93 253,107.31 0.00 368,246.70 429,328.78 17,248.01 446,576.79 0.00 250,606.80 331,619.19 34,772.18 366,391.37 0.00 85,886.10 85,281.92 3,013.33 88,295.25 0.00 143,156.70 227,757.69 43,792.31 271,550.00 0.00 $ 1,765,405.80 $ 1,992,837.63 $ 126,707.81 $ 2,119,545.44 $ 425,617.20 $ 235,281.52 $ 195,208.18 11,193.67 $ 20,711.13 246,475.19 215,919.31 $ 425,617.20 $ 430,489.70 $ 31,904.80 $ 462,394.50 0.00 23,945.40 24,378.06 486.00 24,864.06 0.00 $ 449,562.60 $ 454,867.76 $ 32,390.80 $ _ _48;.;:;.:.:7,::;258=.56.;:.. $ 110,856.60 $ 110,818.46 $ 3,473.35 $ _ _1;.;.14-,-,::;29;.;.1,;.;:;.8.;.1 0.00 $ 2,325,825.00 $ 2,558,523.85 $ 162,571.96 $ 2,721,095.81 $ 62,527.50 $ 76,415.28 $ 76,415.28 0.00 15,163.00 $ _ _..:.1;:::5,.::,:98::2::.;.1.;..1 15,982.11 0.00 $ 77,690.50 $ 76,415.28 $ 15,982.11 $ _ _.::;9::12,.::,:39:.:,7,;.;:;.3.;:.9 $ 2,403,515.50 $ 2,634,939.13 $ 178,554.07 $ 2,813,493.20 $ 0.0_.0 $ 6,982.00 14,545.00 $ 2.1.,.-52.7..0.-.0 $ 19,592.87 $ 19,592.87 8,164.16 8,164.16 $ 27,757.03 $ 27,757.03 $ ,;;;;0.,;;;;00:;. 29 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 July 6,2001 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 REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCOR, DANCE 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, 2000, and have issued our report thereon dated July 6,2001. 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 auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards. 2000YB-40A Internal Control Over Financial Reporting In planning and perfonning our audit, we considered Calhoun Cotmty Board ofEducation's internal control over financial reporting in order to detennine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Calhoun County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FS-6191-00-01, FS-6191-00-02 and FS-6191-00-05. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the nonnal course of perfonning their assigned functions. Our consideration ofthe internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions, and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, ofthe reportable conditions described above, we consider item FS-6191-0005 to be a material weakness. This report is intended solely for the infonnation and use ofmanagement, members ofthe 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:jb 2000YB-40A R sell W. Hinton State Auditor RUSSELL W. HINTON STATE AUDITOR (404) 656-2174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Strcct. S.W., Suitc 214 Atlanta, Georgia 30334-X400 July 6,2001 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 ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Ladies and Gentlemen: Compliance We have audited the compliance of Calhoun County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2000. Calhoun County Board ofEducation's major Federal programs are identified in the accompanying Schedule ofFindings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility ofCalhoun County Board ofEducation'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 ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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 ofEducation's compliance with those requirements. 2000SA-30A In our opinion, the Calhoun County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year ende(' .. je 30, 2000. 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 ''Tants applicable to Federal programs. In planning and performing our audit, we considered Call <}un County Board ofEducation's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-l33. We noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, 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. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FA-6191-00-01 and FA-6191-00-02. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above is a material weakness. This report is intended solely for the information and use ofmanagement, members ofthe 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:jb 2000SA-30A 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, 2000 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6191-97-01 FS-6191-97-02 FS-6191-98-0 I FS-6191-98-02 FS-6191-98-03 FS-6191-98-04 FS-6191-99-01 FS-6191-99-02 FS-6191-99-03 FS-6191-99-04 FS-6191-99-05 FS-6191-99-06 Previously Reported Corrective Action hnplemented Further Action Not Warranted Further Action Not Warranted Further Action Not Warranted Unresolved - See Corrective ActionlResponses Further Action Not Warranted Previously Reported Corrective Action hnplemented Partially Resolved - See Corrective ActionlResponses . Unresolved - See Corrective ActionlResponses Further Action Not Warranted Previously Reported Corrective Action hnplemented Unresolved - See Corrective ActionlResponses CORRECTIVE ACTIONIRESPONSES EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $22.54 Finding Control Number: FS-6191-98-03 The Board's Local Five Mill Share will be increased in a subsequent fiscal period to refund the QBE underexpenditure of$22.54. .GENERAL LEDGER Inadequate Accounting Procedures Finding Control Number: FS-6191-99-02 Procedures are in place to ensure that accounting procedures will be analyzed and recorded to the general ledger with supporting records and all journal entries have supporting documentation and adequate explanation. EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $18,381.05 Fmding Control Number: FS-6191-99-03 The Board's Local Five Mill Share will be increased in a subsequent fiscal period to refund the QBE underexpenditure of$18,381.05. - 1- CALHOUN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6191-99-06 Due to current staffing limitations and budgetary considerations which prohibited the hiring of required additional administrative staff, the Board has decided not to pursue the recording of general fixed assets on the financial statements. PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FA-6191-99-01 Unresolved - See Corrective Action/Responses CORRECTIVE ACTIONIRESPONSES CASH MANAGEMENT Excessive Cash Balances Finding Control Number: FA-6191-99-01 Fiscal year 2001 procedures are in place to accurately forecast the cash needs of this Federal Program and other programs through the Georgia Department ofEducation. -2- SECTION IV FINDINGS AND QUESTIONED COSTS CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 I SUMMARY OF AUDITOR'S RESULTS 1. TYPe of Report Issued on the Financial Statements The auditor's opinion on the Calhoun County Board ofEducation'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. Employee Compensation General Fixed Assets 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 Maior Programs The audit report for the Calhoun County Board ofEducation disclosed reportable conditions in internal control over major programs for the following compliance requirements. Cash Management Eligibility None ofthe reportable conditions described above are considered to be material weaknesses. 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 .51O(~ of OMB Circular A-133 The Calhoun County Board of Education's audit disclosed audit findings required to be reported by section .510(a) ofOMB Circular A-133. These audit findings are included in section IV oftms 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 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies _1 _ . CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 I SUMMARY OF AUDITOR'S RESULTS 8. IYPe "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 EMPLOYEE COMPENSATION Salary Overpayments Reportable Condition Amount: $3,870.00 Finding Control Number: FS-6191-00-01 Audit procedures performed during employee compensation testing revealed payments to four employees in excess of original compensation approved by the Board. These excess payments totaled $3,870.00 and could not be supported by adequate documentation ofadditional time worked beyond the normal workday. This deficiency occurred because management approved payroll disbursements for amounts above those approved by the Board without proper documentation for additional time worked. The Board should review the excess payments of $3,870.00 to determine whether reimbursement should be secured. GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Repeated From Prior Year Finding Control Number: FS-6191-00-02 Accounting procedures of the Calhoun County Board of Education were insufficient to provide adequate internal controls over the General Ledger control category, in that journal entries were made without proper supporting documentation or explanation. This deficiency occurred because of 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 detailed records supporting the general ledger are complete, accurate and reliable. -2- CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 II FINANCIAL STATEMENT FINDING., AND QUESTIONED COSTS BUDGET PREPARATION/EXECUTION Deficit Fund Balance Nonmaterial Noncompliance Finding Control Number: FS-6191-00-03 At June 30, 2000, the liabilities and reserved fund balances exceeded assets available for the General Fund by $633,815.41. O.e.G.A. 20-2-67 (b) requires that the Superintendent submit to the Georgia Department of Education both a response to this condition and a corrective action plan designed to correct the budget deficit. The Board should establish budgetary procedures to ensure that funding is available prior to committing to expenditures. BUDGET PREPARATIONIEXECUTION Failure to Adopt a Balanced Budget Nonmaterial Noncompliance Finding Control Number: FS-6191-00-04 An examination ofthe Board's budget revealed that the Board failed to adopt a balanced budget for the General Fund. Chapter 32 of the Financial Management for Georgia Local Units of Administration issued by the Georgia Department of Education states in part: "The budget must be balanced for all budgeted funds. Total anticipated revenues should equal total estimated expenditures. In the event anticipated revenues are insufficient to fund anticipated essential expenditures, a portion of unreserved fund balance from previous years must be used to fund the shortfall. In the event there is insufficient unreserved fund balance from previous years to fund anticipated expenditures, then such expenditures must be reduced to equal anticipated revenues plus available unreserved fund balance." This condition occurred because management neglected the specific limitations imposed upon the Board by the Georgia Department ofEducation. Appropriate procedures should be implemented by the Board to ensure that the adopted budget for all budgeted funds is balanced as required. GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6191-00-05 The Calhoun County Board of Education did not maintain a system wide General Fixed Asset 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 -3- CALHOUN COUNTY BOARD OF EDUCAnON SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6191-00-05 maintenance ofa 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. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CASH MANAGEMENT Excessive Cash Balances Reportable Condition U. S. Department of Education Through Georgia Department of Education Amount: $4,785.35 Finding Control Number: FA-6191-00-01 A review ofcash management procedures for the Elementary and Secondary Education Act - Title I Grants to Local Educational Agencies (CFDA 84.010) disclosed that cash draws were made in advance of immediate cash needs, resulting in the accumulation of excessive cash balances for all twelve months during the year under review. In addition, the Board failed to comply with A-I 02 Common Rule paragraph 21(h)2(l), which states in part, interest earned on advances by local government grantees is required to be submitted promptly to Federal grantor agency. Up to $100.00 per year may be kept for administrative expenses. The Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies program earned interest amounting to $4,885.35 of which $4,785.35 should have been remitted to the Georgia Department of Education. The interest earned on these program funds was recorded in the Board's General Fund. The excessive cash balances are a result of management's failure to accurately forecast the cash needs of this program. The Board should implement procedures to minimize the time elapsing between the transfer of funds from the Georgia Department ofEducation and disbursement of such ,' funds. The excessive interest earnings totaling $4,785.35 should be refunded to the Georgia Department of Education. -4- CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2000 ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS ELIGIDILITY , Failure to Maintain Documentation for Eligible Attendance Areas Reportable Condition U. S. Department of Education Through Georgia Department ofEducation Finding Control Number: FA-6l9l-00-02 For the 2000 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies (CFDA 84.010) Program, the Board could not provide accurate documentation to support section IV of the Title I application pertaining to the determination of eligible and participating attendance areas and school allocations. As provided for in the grant application and required by 34 CFR 76.730, the Board assures the Georgia Department ofEducation that it will keep records and provide information as may be required for audit purposes. This condition was a result ofthe Board's failure to ensure that the grant application was accurate and supporting documentation was maintained for audit purposes. The Board should establish procedures to ensure that applications are complete, accurate and that proper documentation is maintained in compliance with the requirements of the grant application and 34 CFR 76.730. Also, the Georgia Department ofEducation should review this matter to determine ifa reclaim of funds is appropriate. -5-