Calhoun County Board of Education, Morgan, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2001

."
j , ..J ....
I .~y;',:... ,
...~. . : . . .,'~..

1 ;."
......
":',

l' ,

.j ,',' ~ ..... ,,1.,
.'

J

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

EXHmITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET:AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

24

. 2 SCHEDULE OF STATE REVENUE

. 26

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

CALHOUN COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
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 CIRCULAR A-l33
SECTION ill 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) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w.. Suite 214 Atlanta. Georgia 30334-X400
March 27, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly' Members of the State Board of Education
and Superintendent and Members ofthe 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, 2001, 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 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 of Education'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:

2001ARL-13

* The general-purpose financial statements of the Board of Education did not contain a
General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to confonn to generally accepted accounting principles.

* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general-purPose financial statements.

* The Board of Education did not recognize as expenditures, in the year ended

June 30, 2001, a portion of salaries and the corresponding employer's cost of related

benefits earned for contractual services completed prior to June 30, 2001. Also funds

received, subsequent to June 30, 2001, 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, 2000, were improperly

recorded in the year ended June 30, 2001. To confonn 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 ofthese 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 fmancial position of the Calhoun County Board of Education as ofJune 30, 2001, 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 March 27, 2002, 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 perfonned 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 perfonned for the purpose of fonning an opinion on the general-purpose financial statements of the Calhoun County Board of Education taken as a whole. The accompanYing combining stateI11ents (Exhibits E and F) and the financial schedules (Schedules I through 5), which includes the Schedule ofExpenditures ofFederal Awards as required by U. 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

200IARL-13

financial statements. Such infonnation 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 infonnation is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
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 506-24. .
Respectfully submitted,

RWH:as 2001ARL-13

Ru ell W. Hinton State Auditor

CALHOUN COUNTY BOARD OF EDUCATION

CALHOUN COUNTY BOARD OF EDUCATION COMBINER BALANCE SHEET
All FUND TYPES AND ACCOUNT GROUP JUNE 30 2001

~
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 ot 'Bond Debt Capital lease Agreements

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

$

362,526.23

$

9,100.00

$

152,965.62

33,103.82

84,834.22

2,537.63 1,399.49

Total Assets

$

42,203.82 $

451,297.57 $

152,965.62

llABllmES ANR FUND EQUITY
llABll!TIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue 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

$

4,080.44

$

117,606.46 $

72,130.53

63,019.94

70,378.53

52,235.84

25.823.73

$

121,686.90 $

257,764.84 $

25,823.73

$

67,040.64

18,381.05

$

2,537.63

1,399.49

$

10,689.73 0.00
-175,594.50

189,595.61

$

-79,483.08 $

193,532.73 $

127,141.89 0.00
127,141.89

Total liabilities and Fund Equity

$

42,203.82 $

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

- 2-

451,297.57 $

152,965.82

EXHIBIT "A"

DEBT SERVICE
FUND

$

29,608.23

274,666.73

83,067.24

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2001

JUNE 30, 2000

$

392.134.46 $

473,306.77

436,732.35

1,520,591.02

201,005.28

78,139.73

2,537.63 1,399.49

4,495.77 2,511.72

$

387,342.20

387,342.20

265,631.29

977,657.80 126,056.27

977,657.80 126,056.27

1,334,368.71 54,790.34

$

387,342,20 $

1,491,056.27 $ 2,524,865.48 $ 3,733,835.35

$

29,904.17 $

451,271.38

189,736.99

257,514.42

63,019.94

66,796.07

70,378.53

167,522.38

200,080.18

'~

32,402.43

52,235.84

$

126,056.27

126,056.27

54,790.34

1,365,000.00

1,365,000.00

1,600,000.00

$

1,491,056.27 $ 1,896,331.74 $ 2,830,377.20

$

387,342.20

0.00

$

387,342.20

$

67,040.84 $

63,214.08

29,773.61

387,342.20

265,631.29

18,381.05

18,403.59

2,537.63 1,399.49 127,141.89

4,495.77 2,511.72 988,162.67

10,689.73 189,595.61 -175,594.50

10,689.73 174,391.10
-S33,815.~1

$

628,533.74 $

903,458.15

$

387,342.20 $

1,491 ,056.27 $ 2,524,865.48 $ 3,733,835.35

3

CALHOUN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 2001

EXHIBIT"B"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 4,205,413.21 $ 3,901,201.77

946,769.24

832,936.20

$

402,296.84

1,995,776.45

1,277 ,834 .88

$

18,862.23

12,972.82

125,942.33

195,121.08

$

18,862.23 $

415,269.66 $ 7,273,901.23 $ 6,207,093.93

$

859,883.01

$

$

859,883.01 $

$ -841,020.78 $

$
235,000.00 58,558.75
293,558.75 $ 121,710.91 $

3,852,101.05 $
160,943.39 97,302.94 95,078.21 271,289.22 523,764.93 84,862.93 531,547.59 413,822.89
429,123.87 656.75
859,883.01
. 274,413.77 61,644.42
7,656,434.97 . $
-382,533.74 $

3,599,370.97
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
16,361.59 67,201.91
6,968,118.05
-761,024.12

$

110,679.70

3,429.82 $

-3,429.82

$

110,679.70 $

2,224.60 -2,224.60
0.00

$

-841,020.78 $

968,162.67

121,710.91 $ 265,631.29

-271,854.04 $ 903,458.15

-761,024.12 1,659,910.70

-1,958.14 -1,112.23

2,936.22 1,635.35

$

127,141.89 $

387,342.20 $

628,533.74 $=====9=03=,4=5=8'"",15=

-5-

CALHOUN COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
BUDGET AND ACTUAL - INON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2001

EXHIBIT C

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 3.932,518.92 $ 4,073,825.63

35,150.00

1.584,554.53

1,593,479.61

48,179.00

72,504.26

Total Revenues

$ 5.565,252.45 $ 5.774,959.50

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

$ 3.243.432.36 $ 3.288.834,15

114.475.14 36.210.00 106.034.95 238.922.09 485.511.09 76.440.55 388,147.35 290,636.98
6.200.00 1.000.00

109.546.42 76,491.24 95,078.21 271.233.04 505.910.25 84.862.93 531.547.59 412,123.76
2,057.42

42,499.44

Total Expenditures

$ 4.987.010.51 $ 5,420,184.45

Excess of Revenues over (under) Expenditures $ 578,241.94 $ 354,775.05

OTHER FINANCING SOURCES IUSES)

Other Sources Other Uses

$ 110,679.70 -3,429.82

Total Other Financing Sources (Uses)

$ 107,249.88

Excess of Revenues and Other Financing Sources

over (under) Expenditures and Other Financing

Uses

$

578.241.94 $

462,024.93

FUNp BALANCE JULY 1: 2000

-542.534.21

-541,508.01

Adjustments Food Inventory - Net Change in Period
Donated Commodities Purchased Food

-3.772.07

FUNP BALANCE JUNE 30. 2001

$ 31,935.66 $ -79,483.08

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 405,145.88 $ '131,587.58

753,202.88

911,619.24

19,480.00

21,603.02

$ 1.177,828.76 $ 1.064,809.84

$ 627,971.12 $ 563.266.90

11.075.27 3.924.62 40,179.05
31.395.00

51,396.97 20.811.70
56.18 17.854.68

226.00
458.036.88 300.00

1,699.13
427.066.45 656.75

$ 1,173,107.94 $ 1,082,808.76

$

4,720.82 $ -17,998.92

$ 10.700.00 $ -10,700.00

$

0.00 $

3,429.82 3,429.82

$

4.720.82 $ -14.569.10

366.593.38

211.172.20

-3.028.04

-1,958.14 -1,112.23

$ 368.286.16 $ 193,532.73

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, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Calhoun County Board of Education (School District) 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 School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity. .
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results ofits operations. Fund accounting is designed to demonstrate legal compliance and to aid fmancial 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 School District. 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 recor<;led in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District 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.

-7-

CALHOUN COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note I: SUMMARY OF SIGNIFICANT 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.
CAPITA.L 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 ~e payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A fmancial 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. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations.. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

- 8-

CALHOUN COUNTY BOARD OF EDUCAnON

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

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 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in late May 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30,2001. Also, the State's portion of the compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Calhoun County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutorY prohibition regarding overexpenditure ofthe 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 School District'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 ofgeneral 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.

- 9-

~-~------

CALHOUN COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposi~ its funds in one or more solvent banks or insured Federal savings and loan associations.
INVESTMENTS
COMPOSITION OF INVESTMENTS Investments made by the School District in nonparticipating interest-earning contracts (such as certificates ofdeposit) and repurchase agreements are reported at cost. Participating interest-earning contracts and money market investments with a maturity at purchase ofone year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code ofGeorgia Annotated Section 36-83-4 authorizes the School District to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate ofreturn shall be the objective, given equivalent conditions of safety and liquidity. Funds may be invested in the following:
(1) Obligations issued by the State of Georgia or by other states,
(2) Obligations issued by the United States government,
(3) Obligations fully insured or guaranteed by the United States government or a United States government agency,
(4) Obligations of any corporation of the United States government,
(5) Prime banker's acceptances,
(6) The Local Government Investment Pool administered by the State of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions of the State of Georgia.

- 10-

CALHOUN COUNTY BOARD OF EDUCATION

EXiImIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RECEIVABLES

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

PROPERTY TAXES

The Calhoun County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on November 30, 2000 (levy date). Taxes were due on February 15, 2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001, The Calhoun County Tax Commissioner bills and collects the property taxes for the School District, withholds 2,5% oftaxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $1,568,397.86.

The tax millage rate levied for the 2000 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

. 14.54 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 $402,296.84 and was recorded in the Debt Service Fund. The State will terminate collection ofthis tax once an additional $1,278,847.75 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 of net current assets.

- 11 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHffiIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL OBLIGATION BONDS

The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor 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 of these bonds is recorded in the General Long-Term Debt Account Group.

INTERFUND TRANSACTIONS

The School District 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.

DEFICIT FUND BALANCE

Funds reporting a deficit fund balance position at June 30, 2001, are as follows:

Fund Tvoe/Fund Name

DefiCit Balance

Governmental Fund Type General Fund

$ 175,594.50

As a partial step to fund this deficit, the School District has increased the local property tax levy to yield additional funding of approximately $40,000.00 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

- 12 -

CALHOUN COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS AND INVESTMENTS
been secured by surety bond, by guarantee of insurance, 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. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. 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 St~te 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 ofthe 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 ofdevelopment 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 beth 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, 2001, the bank balances were $752,234.75. 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 School District or by the School District's agent in the School District's name.

- 13-

CALHOUN COUNTY BOARD OF EDUCAnON

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30", 2001

Note 2: DEPOSITS AND INVESTMENTS

Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - 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 School District's name.)

The School District's deposits are classified by risk category at June 30, 2001, as follows:

Risk Category

Bank Balance

1

$ 109,100.00

2

0.00

3

643,134.75

Total

$ 752,234.75

CATEGORIZATION OF INVESTMENTS At June 30, 2001, the carrying value of the School District's total investments was $427,632.35 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 ofGeorgia, Office ofTreasury and Fiscal Services which are not required to be categorized since the School District did not own any specific identifiable securities in the pool. The investment poiicy ofthe State ofGeorgia, 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. 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 voluntary and deposits consist of funds from local governments; operating and trust ~ds of Georgia's state agencies, colleges and universities; and current operating funds of the State of Georgia's General Fund.

- 14-

CALHOUN COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS AND INVESTMENTS
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 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, 2001, was 39 days. The average investment duration for Fund 6 on June 30, 2001, was 6 months.
Note 3: NON-MONETARY TRANSACTIONS
The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories
Note 4: RISK MANAGEMENT
. The School District is exposed to various risks of loss related to torts; theft of, damage to, and destruction ofassets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.
The School District has obtained commercial insurance for risk of loss associated with torts and assets. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any ofthe past three years.
The School District has elected to self-insure for all losses related to natural disaster. In addition, the School District has elected to self-insure for errors or omissions, which includes; among other risks, risks for sexual harassment and discrimination. The School District has not experienced any losses related to these risks in the past three years.
The School District 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 ofthe percentage ofthat fund's payroll to total payroll in order to cover estimated claims budgeted by management based on known claims and prior experience. The School District 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 EDUCAnON

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 4: RISK MANAGEMENT

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $

1.506.00 $

1.506.00 $

0.00

$

0.00 $

101.50 $

101.50 $

0.00

The School District 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 School District 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 School District has purchased surety bonds to provide additional insurance coverage as follo~s:

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:

Purpose

Interest Rate

Amount

General Government - Series 1999

3.95%

$ 1.365.000.00

The changes in General Long-Term Debt during the fiscal year. ended June 30, 2001, were as

follows:

.

- 16-

CALHOUN COUNTY BOARD OF EDUCATION

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

Capital Leases

General Obligation
Bonds

Total

Balance July 1,2000

$ 54,790.34 $ 1,600,000.00 $ 1,654,790.34

Additions Capital Leases

110,679.70

110,679.70

Deductions Debt Retired

39.413.77

235,000.00

274.413.77

Balance June 30, 2001

$ 126,056.27 $ 1.365,000.00 $ 1.491.056.27

At June 30, 2001, 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

2002 2003 2004 2005

$ 47,363.82 $ 343,091.25 $ 390,455.07

46,258.44

360,846.25

407,104.69

24,718.82

377,416.25

402,135.07

23.467.38

397,702.50

421,169.88

Total Principal and Interest

$ 141,808.46 $ 1.479,056.25 $ 1.620.864.71

. Deduct: Imputed Interest

15,752.19

Net Present Value of Future Minimum Lease Payments $ 126,056.27

Note 6: SHORT-TERM DEBT

The School District obtains temporary loans in advance ofproperty tax collections, depositing the proceeds in its General Fund. This short-term debt is to provide cash for operations until property tax collections are received by the School District. Article IX, Section V, Paragraph V of the Constitution ofthe State ofGeorgia limits the aggregate amount of short-term debt to 75 percent of the total gross income from taxes collected in the preceding year and requires all short-term debt to be repaid no later than December 31 of the calendar year in which the debt was incurred.

- 17 -

CALHOUN COUNTY BOARD OF EDUCAnON

EXHIDIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 6: SHORT-TERMDEBT

Beginning Balance

Additions

Payments

Ending Balance

Temporary Loans

$,====:!O~,O~O $ 300,150,00 $ 300,150,00 $,====:!O~,O~O

Note 7: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $87,244.47 for health insurance and retirement contributions paid on the School District'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 $71,493,55

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$I,271.92 .

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$14,479,OO

Note 8: CONTINGENT LIABILITIES

AInounts 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 School District 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 districts

are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple

employer defined benefit pension plan, TRSprovides 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.

.

- 18-

CALHOUN COUNTY BOARD OF EDUCAnON

EXHffiIT "D"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 9: RETIREMENT PLANS

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 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

2001 2000 1999

100% 100% 100%

$ 370,383.51 $ 379,481.90 $ 402,203.87

- 19-

CALHOUN COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30. 2001

ASSETS Cash and Cash Equivalents Accounts Receivable Inventories
Food Donated Commodities Purchased Food
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
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
See notes to the general-purpose financial statements. - 20-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

217,851.45 $

21,650.58

14,610.54

2,537.63 1,399.49

$

236,399.11 $ ===2..1.:l::,6=5=:0.=:58==.

$

25,013.75 $

17,852.63

8,180.18 9,118.44 4,351.96

$

42,866.38 $

21,650.58

$

2,537.63

1,399.49

189,595.61 $

$

193,532.73 $

0.00 0.00

$

236,399.11 $ ===2..1.:l::,6=50=:.=:58==.

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

123,024.20 $

362,526.23 $

469,522.27

70,223.68

84,834.22

9,636.96

2,537.63 1,399.49

4,495.77 2,511.72

$

193,247.88 $

451,297.57 $==4:=8=6:6::,1.6.6.;;,;.7,;,;;2;;..

$

38,936.60 $

72,130.53 $

55,833.84

36,048.87

63,019.94

65,037.07

66,026.57

70,378.53

154,123.61

52,235.84

52,235.84

$

193,247.88 $

257,764.84 $

274,994.52

$

29,773.61

$

2,537.63

1,399.49

4,495.77 2,511.72

$

0.00

189,595.61

174,391.10

$

0.00 $

193,532.73 $

211,172.20

$

193,247.88 $

451,297.57 $==4=8=6.,.1...6.6.=.=72=

- 21 -

,------------------------------------~-~---~-- -
CALHOUN COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

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 School Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services .Food Services Operation Community Services Operations
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
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements.
- 22-

SCHOOL FOOD
SERVICES FUN9--

LOTIERY PROGRAMS

$

28,824.00 $

391,843.94

21,603.02

$

442,270.96 $

96,393.43 96,393.43

$

77,726,92

13,815.44 4,222.54

$

427,066.45

$

427,066.45 $

$

15,204.51 $

1,699.13
97,464.03 -1,070.60

$

15,204.51 $

181,398.59

-1,958.14 -1,112,23

1,070.60
0.00 0.00

$

193,532.73 $====O;;;;,'';';OO~

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

6,370.15 $

131,587.58 $

178,689.63

519,775.30

911,619.24

813,492.53

21,603.02

20,793.68

$

526,145.45 $ 1,064,809.84 $ 1,012.975.84

$

485,539.98 $

563,266.90 $

509,522.21

37,581.53 16.589.16
56.18 17,854.68
656.75

51,396.97 20,811.70
56.18 17,854.68
1!699.13
427,066.45 656.75

16,755.34 48,697.18 11,369.18 12,428.10
937.28 705.98 2,001.17 374,499.59

$

558.278.28 $ 1,082,808.76 $

976,916.03

$

-32,132.83 $

-17.998.92 $

36,059.81

2,359.22

3,429.82

2,224.60

$

-29.773.61 $

-14,569.10 $

38,284.41

29,773.61

211,172.20

168.316.22

-1,958.14 -1,112.23

2,936.22 1,635.35

$

0.00 $

193,532.73 $ ====2...1.=1,=:1=72=.2=0=

- 23-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30 2001

SCHEDULE "1"

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENPITURES OF FEDERAL AWARPS
YEAR ENDED JUNE 30 2001

SCHEDULE "1"

Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federelly 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 2001 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 School District did not provide. Federal Assistance to any Subrecipient.
The accompanying schedule of expenditures of Federal awards includes the Federal grant activity of the Calhoun County Board of Education and is presented on the modi.fied 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.

- 25-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2001

SCHEDULE "2"

AGENCY/FUNDING
GRANTS Community Affairs, Georgia Department of Governor's Emergency Funds (1) Local Assistance Grants (2)
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (13) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Gifted Student - Category VI Remedial Education Program Alternative Education Program Media Center Program Staff and Professional Development Indirect Cost Categorical Grants Pupil Transportation Regular Bus Replacement Sparsity Nursing Services Principal Supplements Vocational Supervisors Education Equalization Funding Grant Food Services Vocational Education Other State Programs At-Risk Summer School Program Environmental Science Program Health Insurance Preschool Handicapped Program Remedial Summer School Teachers'Retirement Lottery Programs 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

$

19,000,00

10,000.00

$

19,000.00

10,000.00

112,352.00 124,584.00 173,707.00 345,720.00 252,352.00 387,320.00 311,719.00 154,767.00
12,943.00 276,553.00 158,768.00 41,426.00
73,902.00 31,247.00 71,938.00 18,914.00 616,470.00

112,352.00 124,584.00 173,707.00 345,720.00 252,352.00 387,320.00 311,719.00 154,767.00
12,943.00 276,553.00 158,768.00 41,426.00
73,902.00 31,247.00 71,938.00 18,914,00 616,470.00

152,096.00 46,326.00 234,638.00 33,675.00
3,234.00 5,566.00 107,168.00
$ 60,980.00

28,824.00 .

1,550.36 750.00
71,493.55 22,376.00
3,047.80 1,271.92

14,610.11

152,096.00 46,326.00 234,638.00 33,675.00
3,234.00 5,566.00 107,168.00 28,824.00 60,980.00
1,550.36 750.00
71,493.55 22,376.00
3,047.80 1,271.92
14,610.11

81,783.32

81,783.32

14,479.00

14,479.00

- 26-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30. 2001

SCHEDULE "2"

AGENCY/FUNDING
CONTRACTS Education, Georgia Department of Georgia's Reading Challenge Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 121,492.00

$

$ _...:6:.1.:,3:.:,.7.::..:0...:..:15:'-,.

121,492.00 6,370.15

$ 4,073,825.63 $ 131,587.58 $ 4,205,413.21

(1) The purpose of the funds is for the purchase of a gasboy pump ($7,000.00) for the school bus shop and for the installation of a fire alarm system ($12,000.00) at Calhoun County High School. ..
(2) The purpose of the funds is for the purchase of athletic equipment for Calhoun County Schools.

See notes to the general-purpose financial statements.

27 -

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2001

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, 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

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED IN PRIOR YEARS (3) (4)

PROJECT STATUS

$ 2,000,000.00 $ 2,000,000.00 $ 859,883,01 $ 684,314.37 Ongoing

(1) The School District's original cost estimate as specified in the resolution calling for the imposition of the Local Option Sales Tax.

(2) The School District's current estimate of total cost for the 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 School District has incurred Interest to provide advance funding for the above project as follows:

Prior Years

$ 63,200,00

Current Year

58,558.75

Total

$ 121,758.75

See notes to the general-purpose financial statements.

- 29-

I

I
I

CALHOUN COUNTY BOARD OF EDUCATION

SCHEDULE "4"

GENERAL FUND - aUALITY BASIC EDUcATION PROGRAM caBEl

ALLOTMENTS AND EXPENDITURES - BY PROGRAM

YEAR ENDED JUNE 30, 2001

DESCRIPTION
Direct Instructional Programs Kindergarten Program Kindergarten Program-Early Intervention Program Primary Grades (1-3) Program Primary Grades-Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Middle Grades (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Category I Category II Category III Gifted Student - Category VI Remedial Education Program Altemative Education Program
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Media center Program Staff and Professional Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF
EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

129,506,00 $ 122,753,89 $

1,681,32 $ 124,435,21

143,606,00

144,222,03

1,445,83

145,667.86

200.229.00

376,222.67

5,224.39

381,447.06

398,505.00

247,474.03

3,763.12

251,237,15

290,882.00

281,284.53

5,557,84

286,842,37

446,457.00

375,212,44

13,186,68

388,399,12

359,313.00

420,415.13

15,598.60

436,013.73

178,397.00

247,159.95

39,823,91

286.983,86

516,707.00

14,167.00

14,167,00

262,726,78

5.963,17

268,689.95

169,510.94

7,597.60

177,108.54

47,752.00

44,023.43

44,023.43

85,186.00

70,031,15

4,324.75

74,355,90

36,018.00

36,340.87

36,340.87

$

2,832,558.00 $ 2,811,544,84 $ 104,167.21 $ 2,915,712.05

82,922.00 21,802.00

72,025.78 11,225,73

14,439,00 12,432.36

86,464.78 23,658.09

TOTAL aBE FORMULA FUNDS

$

2,937,282.00 $ 2,894,796,35 $ 131,038,57 $ 3,025,834.92

(1) Comprised of State Funds plus Local Five Mill Share,

See notes to the general-purpose financial statements.

- 30-

CALHOUN COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30. 2001

SCHEDULE "5"

Calhoun County Elementary School Calhoun County Middle/High School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

1,401,676.00 $

1,457,735.46

1,394,864.00

1,457,976.59

36,018.00

$

2,832,558.00 $ ====2:l::,9=15~',;,,71=2;;,;;.0~5

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

SECTIONn COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w.. Suite 214 Atlanta. Georgia 30334-X400
March 27, 2002

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 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, 2001, and have issued our report thereon dated March 27,2002. 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 ofour 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.
Internal Control Over Financial Reportin'g
In planning and performing our audit, we considered Calhoun County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
2001YB-40

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 condi'tions 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 COl;lnty 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-6191-01-01, FS-6191-01-02, FS-6191-01-03, FS-6191-01-04 and FS-6191-01-06.
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 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 consider item FS-6191-0106 to be a material weakness.
This report is intended solely for the information and use of the 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,
~.4.
Rus ell W. Hinton Sta Auditor
RWH:as 200 1YB-40

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washingloll Slreel, S.W., Suile 214 AII:.mta. Georgia 30334-X400
March 27, 2002

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 CIRCULARA-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, 2001. Calhoun County Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of 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 ofcompliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and QMB 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.
2001SA-30

In our 9pinion, the Calhoun County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each ofits major Federal programs for the year . ended June 30, 2001.
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 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-B3.
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-6191-01-01, FA-6191-01-02 and FA-6191-01-03.
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 c.ourse of performing their assigned fw1ctions. 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 of the 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:as 2001SA-30

Ru ell 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 OUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6191-98-03 FS-6191-99-02 FS-6191-99-03 FS-6191-99-06 FS-6191-00-01 . FS-6191-00-02 FS-6191-00-03 FS-6191-00-04 FS-6191-:00-05

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

CORRECTIVE ACTIONIRESPONSES

EXPENDITURESILIABILITIESIDISBURSEMENTS Failure to Meet Expenditure Requirements Amount: $18,381.05 Finding Control Number: FS-6191-99-03

The School District's Local Five Mill Share will be increased in a subsequent fiscal period to refund the QBE underexpenditure of$18,381.05.

GENERAL LEDGER Inadequate Accounting Procedures Finqing Control Number: FS-6191-00-02

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.

BUDGET PREPARATIONIEXECUTION Deficit Fund Balance Finding Control Number: FS-6191-00-03

On November 20,2000, the Calhoun County Board of Education raised the millage from 8.43 to 14.54. This should generate sufficient revenue to eliminate the deficit during fiscal year 2002. The School District will continue to monitor all expenditures to prevent any future deficit.

- 1-

CALHOUN COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Finding Control Number: FS-6191-00-05

Due to current staffing limitations lind budgetary considerations which prohibited the . hiring of required additional administrative staff, the School District has decided not to pursue the recording of general fixed assets on the fm~cial statements.

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6191-99-01 FA-6191-00-01 FA-6191-00-02

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

CORRECTIVE ACTIONIRESPONSES

CASH MANAGEMENT Excessive Cash Balances Amount: $4,785.35 Finding Control Number: FA-6191-00-01

The excessive cash balance of$4,785.35 has been returned to the Georgia DepartIitent of .Education. Procedures are in place to accurately forecast the cash needs 'of programs through the Georgia Department of Education.

ELIGffiILITY Failure to Maintain Documentation for Eligible Attendance Areas Finding Control Number: FA-6191-00-02

In the future the School District will maintain records to properly document eligibility attendance areas.

- 2-

SECTIONN FINDINGS AND QUESTIONED COSTS

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Calhoun County Board ofEducationt-S-ftnancial 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 Employee Compensation General Fixed Assets

Expenditures/Liabilities/Disbursements 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 matenal to the financial statements.

4. Reportable Conditions in Internal Control Over Major 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 Reporting

Eligibility

None otthe 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 .510(a) ofOMB Circular A-133

The .Calhoun County Board of Education's audit disclosed audit fmdings required to be

reported by section .510(a) ofOMB CircularA-133. These audit findings are included in

section IV of this report.

.

- 1-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
I SUMMARY-OF AUDITOR'S RESULTS
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 Service~ - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies
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 qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education.
II FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
CASH AND CASH EQUIVALENTS Uncollateralized Deposits Reportable Condition Nonmaterial Noncompliance Finding Control Number: FS-6191-01-01
As ofJune 30, 2001, the Calhoun County Board ofEducation failed to have its bank balances fully collateralized as provided for by the Official Code of Georgia Annotated Section 45-8-12 which states, in part, as follows:
"The collecting officer or officer holding public funds may not have on deposit at any time in any depository for a time longer than ten days a sum ofmoney belonging to the public body when such depository has not given bond to the public body as set forth in this code section. The aggregate of the face value of such surety bond, and the market value of securities pledged, shall be equal to not less than 110 percent ofihe public funds being secured after the deduction of the amount of deposit insurance."
This noncompliance occurred because of management's failure to adequately monitor the collaterization ofbalances at individual banks. The School District should implement procedures to monitor the collateralization of bank balances to ensure compliance at all times with State laws governing deposits and investments.
- 2-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
EXPENDITURESILIABII.JTIESIDISBURSEMENTS Inadequate Accounting Procedures Reportable Condition Finding Control Number: FS-6191-01-02
An examination of seventy-five operating expenditure vouchers for the Calhoun County Board of Education revealed the following deficiencies in accounting procedures:
(1) One voucher for $9,878.25 was paid without supporting documentation for services performed. .
(2) One voucher totalling $126.94 was incorrectly paid for a credit memorandum.
(3) One employee was reimbursed l~ch expenses totalling $19.75 for which the employee was not entitled.
These deficiencies occurred because ofmanagement's failure to establish procedures to implement controls over the disbursement function. The School District should implement accounting procedures to strengthen the internal controls over the disbursement process.
EMPLOYEE COMPENSATION Salary Overpayments/Underpayment Reportable Condition Amount: $2,162.09 Finding Control Number: FS-6191-01-03
An examination of payroll records was performed to test the validity of salary expenditures for 16 employees ofthe Calhoun County Board of Education. The following deficiencies were noted:
(1) The School District overpaid employees in four instances amounting to $478.70. Overpayments were the result of excess sick leave docked at the wrong rate, excess sick leave docked for an incorre~t number ofdays, payment of substitute work at an incorrect rate and an employee paid for additional work not performed.
(2) One employee was underpaid in the amount of$224.59. The underpayment was the result of excess leave taken at an incorrect rate.
(3) One employee. was paid $1,458.80 for additional work without adequate supporting documentation. This deficiency occurred because management approved payroll disbursements for amounts above those approved by the School Board without proper documentation for additional time worked.
-3-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30; 2001
II FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
EMPLOYEE COMPENSATION Salary OverpaymentslUnderpayment Reportable Condition Amount: $2,162.09 Finding Control Number: FS-6191-01-03
The School District should implement procedures to ensure that all payroll disbursements are based on approved contracts, salary amounts and time worked. The School District should seek reimbursement for the overpayments for deposit to the General Fund. The School District should review the undocumented payment of $1,458.80 to determine whether reimbursement should be secured.
GENERAL LEDGER Inadequate Accounting Procedures Reportable Condition Repeated from Prior Year Finding Control Number: FS-6191-01-04
Accounting procedures of the Calhoun County Bo'ard 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 School District should establish appropriate procedures to ensure that detailed records supporting the general ledger are complete, accurate and reliable.
BUDGET PREPARATIONIEXECUTION Deficit Fund Balance Nonmaterial Noncompliance Repeated from Prior Year Finding Control Number: FS-6191-01-05
At June 30, 2001, the liabilities and reserved fund balances exceeded assets available for the General . Fund by $175,594.50. O.C.G.A. 20-2-67(b) requires that the Superintendent submit to the Georgia
Department ofEducation both a response to this condition and a corrective action plan designed to correct the deficit. The School District should establish budgetary procedures to ensure that funding is available prior to committing to expenditures.
-4-

,
CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
IT FINANCIAL STATEMENT FINDINGS AND QUESTIQNED CQSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Asset Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Number: FS-6191-01-06 .
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 ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets AccountGroup. These subsidiary records should include an inventory of land, buildings, and equipment owned by the School District and should include but may not be limited to date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
Management's Response:
The System has contracted with Destin Cook and the "Valuation Advisory Group, Incorporated" to comply with the requirements on fixed assets.
ill FEDERAL AWARDFINDINGS AND QUESTIONED COSTS
CASH MANAGEMENT Excessive Cash Balances Reportable Condition U. S. Department of Education Through Georgia Department of Education Amount: $2,305.73 Repeated From Prior Year Finding Control Number: FA-6191-01-01
A review ofcash management procedures for the Elementary and Secondary Education Act - Title I Grants to Local Educational Agencies (CFDA 84.010) Program disclosed that cash draws were made .in advance ofimmediate cash needs, resulting in the accumulation ofexcessive cash balances for all twelve months of the year under review.
In addition, the School District failed to comply with A-102 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
-5-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
CASH MANAGEMENT Excessive Cash Balances Reportable Condition U. S. Department of Education Through Georgia Department of Education Amount: $2,305.73 Repeated From Prior Year Finding Control Number: FA-6191-01-01
administrative expenses. The Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies program earned interest amounting to $2,405.73 ofwhich $2,305,73 should have been remitted to the Georgia Department ofEducation. The interest earned on these program funds was recorded in the School District's General Fund.
The excessive cash balances are a result of management's failure to accurately forecast the cash needs of this program. The School District should implement procedures to minimize the time elapsing between the transfer offunds from the Georgia Department ofEducation and disbursement ofsuch funds. The excessive interest earnings totaling $2,305.73 should be refunded to the Georgia Department of Education.
ELIGmILITY Failure to Maintain Documentation for Eligible Attendance Areas Reportable Condition U. S. Department of Education Through Georgia Department of Education Repeated From Prior Year Finding Control Number:FA-6191-01-02
The School District could.not provide accurate documentation to support section IV ofthe Title I application pertaining to the determination of eligible and participating attendance areas and school allocations for the Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies (CFDA 84.010) Program. As provided for in the grant application and required by 34 CFR 76.730, the School District assures the Georgia Department ofEducation that it will keep records and provide information as may be required for audit purposes.
This condition was aresult ofthe School District's failure to ensure that the grant application was accurate and supporting documentation was maintained for audit purposes. The School District should establish procedures to ensure that applications are complete, accurate and that proper documentation is maintained in compliance with'the requirements ofthe grant application and 34 CFR 76.730. Also, the Georgia Department ofEducation should review this matter to determine if a reclaim of funds is appropriate.
- 6-

CALHOUN COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001

ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

REPORTING Failure to File Accurate Completion Report Reportable Condition U. S. Department of Education Through Georgia Department of Education Finding Control Number: FA-6191-01-03

An examination of the School District's compliance with reporting requirements revealed that the School District failed to file an accurate completion report for the Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies (CFDA 84.010) program as required by guidelines established by the Georgia Department ofEducation. A review ofthe School District's accounting records revealed that the completion report was not supported by the total expenditures recorded for this program as indicated below:

Actual Program Expenditures

Expenditures per Completion Report

Elementary and Secondary Education Act Title I Grants to Local Educational Agencies (CFDA 84.010)

$ 294,225.51

$ 292,806.67

This deficiency occurred because management failed to include all Title 1 expenditures on the . completion report. Procedures should be implemented by the School District to ensure that accurate completion reports are submitted and include all program expenditures.

-7-