Audit report, Carroll County Board of Education, Carrollton, Georgia, year ended June 30, 1998

AUDIT REPORT CARROLL COUNTY BOARD OF EDUCATION
CARROLLTON, GEORGIA YEAR ENDED JUNE 30, 1998

CARROLL 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

EXlllBITS

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

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN RETAINED EARNINGS/FUND BALANCES

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

7

E

STATEMENT OF CASH FLOWS

FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND

8

F NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

9

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

CAPITAL PROJECTS FUND

I

COMBINING BALANCE SHEET

24

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

26

DEBT SERVICE FUND

K

COMBINING BALANCE SHEET

28

L

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

29

CARROLL COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

EXlllBITS

COMBINING STATEMENTS

FIDUCIARY FUND TYPES

M

COMBINING BALANCE SHEET

30

N

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

31

SCHEDULES

1 SCHEDULE OF REQUIRED SUPPLEMENTARY INFORMATION

32

2 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

33

3 SCHEDULE OF STATE REVENUE

35

4 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

36

5 SCHEDULE OF EXPENDITURES

LOTTERY PROGRAMS

37

ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS

6

OVERALL

39

7

BY PROGRAM

40

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

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

CARROLL COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
April 1, 1999

Honorable Roy E. Barnes, Governor Members of the General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Carroll 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 Carroll County Board of Education, as of and for the year ended June 30, 1998, as listed in the table of contents. The~e general purpose financial statements are the responsibility ofthe Carroll County Board ofEducation's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to fmancial 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 fmancial 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's fmancial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:
* The general purpose financial statements of the Board did not contain a General Fixed Assets
Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles.

98ARL-13B

* The Board did not report compensated absences within the general purpose financial statements as
required by generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the general purpose
financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements.
* The Board did not recognize as expenditures, in the year ended June 30, 1998, a portion of salaries
and the corresponding employer's cost ofrelated benefits earned for contractual services completed prior to June 30, 1998. Also funds received, subsequent to June 30, 1998, from the Georgia Department ofEducation for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1997, were improperly recorded in the year ended June 30, 1998. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
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 Carroll County Board of Education as of June 30, 1998, and the results of its operations and the cash flows of its nonexpendable trust fund for the year then ended, in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated April 1, 1999, on our consideration ofthe Carroll County Board ofEducation's internal control over financial reporting and our tests of its compliance with certain provisions oflaws, regulations, contracts and grants.
The year 2000 supplementary information on Schedule "1" is not a required part of the basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods ofmeasurement and presentation ofthe supplementary information. However we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that Carroll County Board ofEducation is or will become year 2000 compliant, that the Board's year 2000 remediation efforts will be successful in whole or in part, or that parties with which Carroll County Board ofEducation does business are or will become year 2000 compliant.
Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Carroll County Board of Education taken as a whole. The accompanying combining statements (Exhibits G through N) and the financial schedules (Schedules 2 through 7), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes ofadditional analysis and are not a required part of the general purpose financial statements. Such information has been
98ARL-13B

subjected to the auditing procedures applied in the audit ofthe general purpose financial statements and in oUr opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose fmancial statements taken as a whole.
A copy of this report has been filed as a permanent record in the office of the State Auditor and made available to the press ofthe State, as provided for by Official Code of Georgia Annotated Section 50-6-24.
Respectfully submitted,

RWH:jb 98ARL-13B

Russell W. Hinton State Auditor

CARROLL COUNTY BOARD OF EDUCATION

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

EXHIBIT "A"

DEBT SERVICE
FUND

FIDUCIARY FUND TYPES TRUST AND AGENCY FUNDS

$

198,534.75 $

7,407.47

39,800.00

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 1998

JUNE 30,1997

$ 18,693,938.06 $ 15,184,464.12

54,800.00

48,611.89

2,828,740.75

917,357.93

742,124.22

$

198,534.75

9,801.465.25

53,025.90 39,824.07 198,534.75
9,801.465.25

41,913.66 35,349.65 165,756.68
129,243.32

$

198,534.75 $

47,207.47 $ 10,000,000.00 $ 32.412,453.00 $ 16,522,697.25

$

288,164.18

185,597.10 $

196,415.84

609,371.90

759,504.87

15,739.07

4,201.84

354,037.82

644,648.60

73,827.86

296,084.00

742,124.22

$

18,130.24

18,130.24

15,757.86

$ 10,000,000.00

10,000,000.00

295,000.00

$

18,130.24 $ 10,000,000.00 $ 12,286,992.39 $ 2,211,613.01

$

198,534.75

$

0.00

$

198,534.75 $

$

198,534.75 $

27,965.70
1,111.53 29,077.23

$

198,534.75 $

165,756.68

27,965.79

27,965.70

53,025.90 39,824.07 8,871,248.34 1,564,364.98

41,913.66 35,349.65
1,760,071.35

824,830.54 8,545,666.33

807,083.99 -386.17
11,473,329.38

$ 20,125,460.61 $ 14,311 ,084.24

47,207.47 $ 10,000,000.00 $ 32.412.453.00 $ 16,522,697.25

-3-

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

GENERAL FUND

GOVERNMENTAL SPECIAL REVENUE FUND

EXHIBIT"B"

FUND TYPES
CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 1998

JUNE 30,1997

$ 1.019,527.00
2,476,550.81 $ 350,261.32
$ 3,846,339.13 $

$
305,965.63 8,115.12
314,080.75 $

46.362,927.81 $ 5.159,106.18 16,803.-753.90 3,350,924.07
71,676,711.96 $

46.348,900.52 4.795,617.12 14.791,692.59 3,292,901.37
69,229,111.60

$

172,893.86

357,325.88

5.824,213.38 $
$ 6,354,433.12 $ $ -2,508,093.99 $

$ 42,607,532.37 $ 39,On.486.40

3,751,576.58 2,135,076.89 1.470,102.11 1,457.336.24 3,941 ,233.15
569,428.50 5,135,511.93 3,232,477.77
209,200.25 299,304.24 3,989,662.94 483,611.24 6,315,054.36

3.323,415.26 1,281.292.17 1.309,193.95 1.421,666.51 3,354.246.26
357.572.71 4.448.855.91 2,541.406.98
330.520.50 250.344.03 3.815,025.05 400.287.91 7.241.970.60

295.000.00 21.387.50 308.60

295.000.00 21,387.50
308.60

872.799.43 51,504.05
300.00

316,696.10 $ 75,913,804.67 $ 70,On,887.72

-2,615.35 $ -4,237,092.71 $

-848,n6.12

$ $ 10,000,000.00
-1.008.70 883,166.25
$ 10,882,157.55 $
$ 8,374,063.56 $ 2,061,549.76

35,393.42 $ 35,393.42 $

35.393.42
10,000,000.00 -1,008.70
995,976.21 $ -995,976.21
10,034,384.72 $

4.012;646.51 -4,012,646.51
0.00

32.n8.07 $ 165.756.68

5.797,292.01 $ 14,283,504.71

-848,776.12 15,127.222.n

11,112.24 4,474.42

-301.91 5,359.97

$ 10,435,613.32 $

198,534.75 $ 20,096,383.38 $ 14,283,504.71

-5-

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

CARROLL COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND BALANCES
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30,1998

EXHIBIT "0"

OPERATING REVENUES None Recorded
OPERATING EXPENSES Current Scholarships Operating Income (Loss)
NONOPERATING REVENUES Interest Earned Net Income
FUND BALANCE JULY 1

CARROLL COUNTY BOARD OF EDUCATION TEACHER
DEVELOPMENT SCHOLARSHIP FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1998 JUNE 30,1997

$

0.00 $

0.00 $

0.00

$

0.00 $

0.00 $

2,700.00

$

0.00 $

0.00 $

-2,700.00

1,497.70

1,497.70

1,539.11

$

1,497,70 $

1,497.70 $

-1,160.89

27,579.53

27,579,53

28,740.42

FUND BALANCE JUNE 30

$

29,077.23 $

29,077.23 $ =====2=7=,5=7=9.=53=

The notes to the general purpose financial statements are an integral part of this statement. -7-

CARROLL COUNTY BOARD OF EDUCATION STATEMENT OF CASH FLOWS
FIDUCIARY FUND TYPE - NONEXPENDABLE TRUST FUND YEAR ENDED JUNE 30,1998

EXHIBIT"E"

Cash Flows from Operating Activities: Cash Paid for Scholarships
Cash Flows from Investing Activities: Interest Received on Investments Purchase of Investments Sale of Investments
Net Cash from Investing Activities
Net Increase (Decrease) in Cash
Cash and Cash Equivalents - JUly 1

CARROLL COUNTY BOARD OF EDUCATION TEACHER
DEVELOPMENT SCHOLARSHIP FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 1998 JUNE 30,1997

$

0,00 $

0.00 $

-2,700,00

$

1,497.70 $

1,497,70 $

1,539.11

-27,800,00

-27,800,00

-27,000,00

27,000.00

27,000,00

0,00

$

697.70 $

697.70 $

-25,460,89

$

697.70 $

697.70 $

-28,160,89

579,53

579.53

28,740.42

Cash and Cash Equivalents - June 30

$

1,277.23 $

1,277,23 $ ==========5=7=9,=53=

The notes to the general purpose financial statements are an integral part of this statement. -8-

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Carroll County Board ofEducation (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources.
General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances ofthese 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 ofthe Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most ofa Board's educational activities.
Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required
to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.
SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. Thesefunds are received primarily from the Georgia Department ofEducation and from the Federal government to accomplish specific educational objectives.
-9-

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "P"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CAPITAL PROJECTS FUND - the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities.

DEBT SERVICE FUND - the fund used to account for the accumulation ofresomces for, and the payment of, general long-term principal, interest and paying agent fees.

FIDUCIARY FUND TYPES - the funds used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. These funds include:

NONEXPENDABLE TRUST FUND Carroll County Board of Education Teacher Development Scholarship Fund - the fund used to account for an endowment ofwhich the corpus is to be invested and preserved intact with the resultant income to be used to assistState University of West Georgia juniors and seniors who have committed to a career in education, or to veteran teachers who are returning to school to upgrade their teaching credentials.

AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.

ACCOUNT GROup

GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for

general obligation debt outstanding.

'

BASIS OF ACCOUNTING

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (Le., expenditures and other financing uses) in net current assets. Their reported fund balance is . considered a measure of available spendable resources.

Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.

All nonexpendable trust funds are accounted for on a flow ofeconomic resources measurement focus. With this measurement focus, all assets and liabilities associated with the operation ofthese funds are included on the balance sheet. Operating statements present increases (e.g., revenues) and decreases (e.g., expenses) in net total assets.

- 10-

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Agency funds are purely custodial in nature and do not involve measurement ofresults of operations.
Governmental funds are accounted for using the modified accrual basis of accounting under which:
Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those reveJlues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income.
Expenditures are generally recognized when the related fund liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1998, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1997 and ending in early June 1998. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1997 and ending in August 1998. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1998, compensation under these employment contracts had been earned, but two ofthe twelve monthly payments, due for July and August 1998, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1998. Also, the State's portion ofthe compensation paid in July and August 1998 was received and recorded as revenue in the fiscal year subsequent to June 30, 1998. Conversely, the similar expenditures and related revenues for contractuaI services completed prior to June 30, 1997, were recorded in the year ended June 30, 1998. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
The accrual basis of accounting, as required by generally accepted accounting principles, is utilized by nonexpendable trust funds. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded at the time liabilities are incUrred.
Agency funds are accounted for using the modified accrual basis of accounting in recognizing assets and liabilities.
BUDGET
The Carroll County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget-for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the
- 11 -

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

fund level. The budge~ for governmental funds was prepared on a basis other than generally accepted accounting principles.

The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper 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, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

The Statement ofRevenues, Expenditures and Changes in Fund Balances - Budget and Actual presents actual and budgeted data for the General Fund and Special Revenue Fund. To facilitate comparison with the budget, the following adjustments have been made to fund balance as reflected on Exhibit "B" of this report:

Special Revenue
Fund

FUND BALANCE JULY 1, 1997

$ 292,571.50

Adjustments Inventories - July 1, 1997 Food Donated Commodities Purchased Foods
Fund Balance July 1, 1997 (Budget Basis)

-41,913~66
-35.349.65
,..
$ 215,308.19

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

24,921.37

FUND BALANCE JUNE 30,1998 (Budget Basis)

$ 240,229.56

CASH AND CASH EQUIVALENTS

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

- 12-

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

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 of one year or less are reported at amortized cost. Both participating interest-earning contracts and money market investments with a maturity at purchase greater than one year are reported at fair value. The Official Code of Georgia Annotated Section 36-83-4 authorizes the Board to invest its funds. In selecting among options for investment or among institutional bids for deposits, the highest rate 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 of Georgia, Office of Treasury and Fiscal Services,
(7) Repurchase agreements, and
(8) Obligations of other political subdivisions ofthe State of Georgia.
RECEIVABLES
Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
PROPERTY TAXES
The Carroll County Board of Commissioners fixed the property tax levy for the 1997 tax year (calendar year) on October 20, 1997 (levy date). Taxes were due on December 20, 1997. The lien date for property taxes
- 13-

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

was January 1, 1997. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1998. The Carroll County Tax Commissioner bills and collects the property taxes for the Board ofEducation, withholds 2% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the Board.

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

School Operations

17.85 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Pwpose Local Option Sales Tax revenue during the fiscal year amounted to $2,782,244.56 and was recorded in the Capital Projects and Debt Service Funds. The State will terminate collection of this tax once an additional $44,457,755.44 has been collected or on December 31, 2002 whichever occurs first.

INVENTORIES

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

COMPENSATED ABSENCES

Compensated absences represent obligations of the Board relating to employees' rights to receive compensation for future absences based upon service already rendered. This obligation relates only to vesting accumulating leave in which payment is probable and can be reasonably estimated. No liability has been recorded in the individual funds for the current portion ofthis obligation as this amount is deemed immaterial to the general purpose financial statements.

However, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources is material to the general purpose financial statements and has not been recorded in the General Long-Term Debt Account Group as required by generally accepted accounting principles.

- 14-

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 3D. 1998

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL OBLIGATION BONDS
The Board issues general obligation bonds to provide funds for the acquisition and construction of major capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the financial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit of the government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The Board has the following types of interfund transactions:
Reimbursements of expenditures/expenses initially made from a fund that are properly applicable to another fund, are recorded as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results ofoperations or cash flows 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.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time inany depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value ofsecurities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount of deposit insurance. OCGA Section 45-8-11 provides an officer holding public funds may, in his discretion, waive the requirement for security in the case of operating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
- 15 -

CARROLL COUNTY BOARD OF EDUCATION

EXIllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 2: DEPOSITS

(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 ofthe counties or municipalities ofthe State of Georgia,

(5) Bonds of any public authority created by the laws ofthe State of Georgia, providing that the statute that created the authority authorized the use ofthe bonds for this purpose,

(6) Industrial revenue bonds and bonds of development authorities created by the laws ofthe State of Georgia, and

(7) Bonds, bills, notes, certificates of indebtedness, or other obligations of a subsidiary corporation of the United States government, which are fully guaranteed by the United States government both as to principal and interest and debt obligations issued by the Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit Bank, the Central Bank for Cooperatives, the Farm Credit Banks, the Federal Home Loan Mortgage Association, and the Federal National Mortgage Association.

CATEGORIZATION OF DEPOSITS At June 30, 1998, the bank balances were $21,181,742.67. The amounts of the total bank balances are classified into three categories ofcredit 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.)

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

Risk Category

Bank Balance

1

$ 360,870.41

2

0.00

3

20,820,872.26

Total

$21.181.742.67

- 16-

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

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: INTERFUND ASSETS AND LIABILITIES

Due to and due from other funds are recorded for interfund receivables and payables which arise from interfund transactions. The following analysis summarizes the status ofall interfund transactions ofthe Board at June 30, 1998:

Due From Other Funds

Due To Other Funds

General Fund C~pital Projects Fund
SPLOST

$ 742,124.22 $ 742,124.22

$ 742.124.22 $ 742.124.22

Note 5: RISK MANAGEMENT

The Board is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

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

The Board has elected to self-insure for all losses related to natural disaster. The Board has not experienced any losses related to these risks in the past three years.

The Board has established a limited risk management program for workers' compensation claims. In
connection with this program, a self-insurance reserve has been established within the General Fund by the
Board. The Board accounts for claims within the General Fund 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. An excess coverage insurance policy covers individual claims in excess of $225,000.00 loss per occurrence, up to the statutory limit.

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

- 17 -

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 5: RISK MANAGEMENT

1997 1998

Beginning ofYear Liability

Claqns and Changes in Estimates

$

0.00 $ 144,395.31 $

$

0.00 $ 290,680.06 $

Claims Paid

End ofYear Liability

144,395.31 $

0.00

290,680.06 $

0.00

The Board is self-insured with regard to unemployment compensation claims. The Board accounts for claims within the General Fund 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:

Beginning ofYear Liability

Claims and Changes in Estimates

Claims Paid

End ofYear Liability

1997 1998

$

0.00 $

2,892.00 $

2,892.00 $

0.00

$

0.00 $

6,246.00 $

6,246.00 $

0.00

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

Position Covered

Amount

Superintendent Each Principal

$ 100,000.00 $ 20,000.00

Note 6: GENERAL LONG-TERM DEBT

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

Pumose

Interest Rates

Amount

General Government - Series 1998

3.7%-4.0%

$10,000,000.00

Voters authorized $20,000,000.00 in general obligation debt for capital outlay projects on September 16, 1997. The debt was issued in two separate $10,000,000.00 sales. The final sale took place on March 8, 1999.

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

- 18 -

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 6: GENERAL LONG-TERM DEBT

General Obligation
Bonds

Balance July 1, 1997

$ 295,000.00

Additions

10,000,000.00

Deductions Payments

295,000.00

Balance June 30, 1998

$10.000,000.00

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

Fiscal Year Ended June 30

General Obligation
Bonds

1999 2000 2001 2002 2003

$ 4,090,461.67 1,736,430.00 1,745,000.00 1,753,000.00 1.773,200.00

Total Principal and Interest

$11.098,091.67

Note 7: ON-BEHALF PAYMENTS

The Board has recognized revenues and expenditures in the amount of$I,133,332.15 for health insurance and retirement contributions paid on the Board's behalf by the following State Agencies.

Georgia Department ofEducation Paid to the State Merit System ofPersonnel Administration For Health Insurance ofNon-Certified Personnel In the amount of $937,263.65

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $43,403.50

- 19-

CARROLL COUNTY BOARD OF EDUCATION

EXIllBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 7: ON-BEHALF PAYMENTS

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 $152,665.00

Note 8: SIGNIFICANT COMMITMENTS

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

Project
Bowdon High Reroofing Sharp Creek Elementary Mt. Zion Elementary Physical Education Facility Central Middle School Classroom Additions

Unearned Executed Contracts
$ 237,402.96 188,385.37 180,043.14 411,451.36
$ 1.017.282.83

The amounts described in this note are not reflected in the general purpose financial statements.

Note 9: CONTINGENT LIABILITIES

Amounts received or receivable principally from the Federal governinent 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.

The Board is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine Board operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general purpos~ financial statements.

Note 10: ACCUMULATED EMPLOYEES' LEAVE

All employees who are eligible for retirement benefits and who have a minimum ofthree years ofservice with the school system earn annual leave and sick leave at rates of .84 days and one and one-fourth days per month of service, respectively. Maximum accumulations for classified and certified employees are twenty and twenty-five days respectively for annual leave and sixty days for sick leave. An employee will be paid for unused accumulated annual leave at their current rate of pay if the employee leaves the system in good standing. An employee will be paid for unused accumulated sick leave upon retirement at the daily rate paid to a substitute teacher. See Note 1 - Compensated Absences

- 20-

CARROLL COUNTY BOARD OF EDUCATION

EXHIBIT "F"

NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS

JUNE 30, 1998

Note 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, administrative and clerical personnel employed by local school systems are covered by the Teachers Retirement System of Georgia (TRS), which is a cost-sharing multiple employer defmed benefit pension plan. TRS provides service retirement, disability retirement and survivors benefits for its members in accordance with State statute. The Teachers Retirement System of Georgia issues a separate stand alone financial audit report and a copy can be obtained from the Georgia Department of Audits and Accounts.

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe Board who are covered by TRS are required by State statute to contribute 5% oftheir gross earnings to TRS. The Board makes monthly employer contributions to TRS at rates adopted by the TRS Board of Trustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.81% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

1998 1997 1996

100% 100% 100%

$ 4,611,796.66 $ 4,224,857.42 $ 3,851,905.62

- 21 -

CARROLL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30.1998

EXHIBIT"G"

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

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

FEDERAL PROGRAMS

TOTALS JUNE 30,1998 JUNE 30,1997

$ 292,802.87 $ 276,610.65

$ 569,413.52 $ 631,844.00

15,000.00

15,000.00

10,000.00

65,024.87

20,534.00 $ 1,178,679.03

1,264,237.90

517,925.54

53,025.90 39,824.07

53,025.90 39,824.07

41,913.66 35,349.65

Total Assets

$ 465,6n.71 $ 297,144.65 $ 1,178,679.03 $ 1,941,501.39 $ 1,237,032.85

LIABILITIES AND FUND EQUITY

LIABILITIES

Cash Overdraft

Accounts Payable

$

Salaries Payable

Expired Grant Balances Payable

Total Liabilities

$

FUND EQUITY

Fund Balances

Reserved

For Inventories

Food

Donated Commodities

$

Purchased Food

Unreserved

Undesignated

Total Fund Equity

$

14,655.33 $ 172,899.69 187,555.02 $
53,025.90 39,824.07 185,272.72 $ 278,122.69 $

$ 72,279.57 224,865.08

857,577.70 $ 56,290.01 194,115.41 15,739.07

857,577.70 143,224.91 $ 591,880.18 15,739.07

297,144.65 $ 1,123,722.19 $ 1,608,421.86 $

0.00 $ 0.00 $

$
54,956.84 54,956.84 $

53,025.90 $ 39,824.07
240,229.56
333,079.53 $

191,131.25 749,128.26
4,201.84 944,461.35
41,913.66 35,349.65 215,308.19 292,571.50

Total Liabilities and Fund Equity

$ 465,677.71 $ 297,144.65 $ 1,178,679.03 $ 1,941,501.39 $ 1,237,032.85

See notes to the general purpose financial statements.

- 22-

CARROLL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 1998

EXHIBIT"H"

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 1998 JUNE 30, 1997

REVENUES

State Funds Federal Funds Other Funds
Total Revenues

$

281,924,00 $ 2,204,862,19 $ 1,498,483,00 $ 3,985,269.19 $ 3,883,038.83

2,200,497,93

2,958,608.25

5,159,106,18

4,795,617.12

1,431,587,39

89,918.47

1,521,505.86

1,424,814,64

.$ 3,914,009,32 $ 2,204,862.19 $ 4,547,009,72 $ 10,665,881.23 $ 10,103,470.59

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
Capital Outlay

$ 1,901,526,96 $ 2,444,702,82 $ 4,346,229,78 $ 4,138,413.55

$ 3.903,189.61

228,641.23 4,960.32
86,888.06 156,31 26.15
3,785,24 208,64

754,727,38 592,428,55
1,437,68 510,006,26
117,888.26 39,234.98 76,448,27
85,153.10 2,360.00

983,368,61 597.388.87
1,437,68 596,894.32
156,31 117,914.41
43,020,22 76,656,91 3,903,189,61 85,153,10
2,360.00

1,123,082,99 377,269.24
435,609,52 5,081.60
196,086.75 35,767,56 78,735.52
3,748,678.40 25.288.50 361.96

Total Expenditures

$ 3,903,189,61 $ 2,226,192,91 $ 4,624.387,30 $ 10,753,769.82 $ 10,164,375,59

Excess of Revenues over (under) Expenditures

$

10,819.71 $

-21,330.72 $

-77,377.58 $

-87,888,59 $

-60,905.00

OTHER FINANCING SOURCES (USES)

Operating Transfers In Operating Transfers Out

$

21.330,72 $

91,479,24 $

112,809.96 $

24.841,08

-483.29

Total Other Financing Sources (Uses)

$

21,330.72 $

91,479,24 $

112,809,96 $

24,357.79

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

10.819.71 $

0,00 $

14,101,66 $

24.921,37 $

-36,547,21

FUND BALANCE JULY 1

251,716,32

0,00

40,855,18

292,571,50

324.060,65

Food Inventory - Net Change in Period Donated Commodities Purchased Food

11,112,24 4,474,42

11.112,24 4,474.42

-301,91 5.359.97

FUND BALANCE JUNE 30

$

278,122,69 $

0,00 $

54,956.84 $

333,079.53 $

292,571,50

See notes to the general purpose financial statements.

-23 -

CARROLL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30. 1998

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

REGULAR

BOND PROCEEDS

$

0.00 $ 9,111,365.34

$

0.00 $ 9,111,365.34

Total Liabilities and Fund Equity

$

0.00 $ 9,111,365.34

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

EXHIBIT "I"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30,1998

JUNE 30,1997

$

1,436,753.94 $ 10,548,119.28 $

3,002,282.36

$

20,000.00

1,053,646.26

1,073,646.26

$

20,000.00 $

2,490,400.20 $ 11,621,765.54 $

3,002,282.36

$

16,002.32

$

16,002.32

160.00

160.00

3,837.68 $

137,753.00

354,037.82 $

644,648.60

46,158.00

73,827.86

296,084.00

742,124.22

742,124.22

$

20,000.00 $

926,035.22 $

1,186,152.22 $

940,732.60

$

8,871,248.34

$

1,564,364.98

1,564,364.98

$

1,760,071.35

$

0.00

0.00

0.00

301,478.41

$

0.00 $

1,564,364.98 $ 10,435,613.32 $

2,061,549.76

$

20,000.00 $

2,490,400.20 $ 11,621,765.54 $

3,002,282.36

- 25-

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

FUND BALANCE JUNE 30

$

0.00 $ =====8:!::i,8=71::::!i,2=4=:8=,34=

See notes to the general purpose financial statements, -26 -

EXHIBIT"J"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 1998

JUNE 30, 1997

$

1,019,527.00

$

1,019,527.00 $

3,383,022.00

$

2,476,550.81

2,476,550.81

137.674.98

13,849.39

350,261.32

4.744.11

$

1,157,201.98 $

2,490,400.20 $

3,846,339.13 $

3.387l66.11

$

$

98,508.57

2,614,615.63

914,660.35

$

3,627,784.55 $

$ -2,470.582.57 $

$
357,325.88 59,200.82
509,573.52
926,100.22 $ 1,564,299.98 $

172,893.86 357,325.88
1,154,640.84 . $
3,686,973.74 982,598.80
6.354,433.12 $
-2.508,093.99 $

365,491.83 6,224,980.46
24,053.00
6,614,525.29
-3,226,759.18

$

710,511.22 $

$

710,511.22 $

$
65.00
65.00 $

10,000,000.00 -1,008.70
897,575.17 $
-14,408.92
10,882.157.55 $

3,987,322.14 3,987,322.14

$ -1,760,071.35 $ 1l60,071.35

1,564,364.98 $
0.00

8,374,063.56 $
2,061,549.76

760,562.96 1,300,986.80

$

0.00 $

1,564,364.98 $ 10,435,613.32 $

2,061,549.76

-27 -

CARROLL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET DEBT SERVICE FUND JUNE 30.1998

EXHIBIT "K"

ASSETS Cash and Cash Equivalents Accounts Receivable

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 1998

JUNE 30, 1997

$

387.54 $

198,147.21 $

198,534.75 $

165,747.65

9.03

Total Assets

$

387.54 $

198,147.21 $

198,534.75 $===16=5=,7=56=.6=:8=

FUND EQUITY

Fund Balances

Reserved

For Debt Service

$

Unreserved

Undesignated

387.54 $ 0.00

198,147.21 $ 0.00

198,534.75 $ 0.00

165,756.68 0.00

Total Fund Equity $

387.54 $

198,147.21 $

198,534.75 $ ==1=6=5=,7.::56=.6=:8=

See notes to the general purpose financial statements. -28 -

CARROLL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30,1998

EXHIBIT"L"

FUND BALANCE JUNE 30

$

387.54 $

198,147.21 $

198,534.75 $==1~6~5,~75~6~.6~8

See notes to the general purpose financial statements.

- 29-

ASSETS Cash and Cash Equivalents Investments
Total Assets

CARROLL COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET FIDUCIARY FUND TYPES JUNE 30,1998

EXHIBIT"M"

NONEXPENDABLE TRUST FUND
CARROLL COUNTY BOARD OF EDUCATION TEACHER
DEVELOPMENT SCHOLARSHIP
FUND

AGENCY FUNDS

TOTALS

JUNE 30,1998

JUNE 30,1997

$

1,2n23 $

6,130.24 $

7,407.47 $

4,725.40

27,800.00

12,000.00

39,800.00

38,611.99

$

29,on.23 $

18,130.24 $

47,207.47 $ _ _..4.3.".,33_7..3..9.

Total Liabilities and Fund Equity $

29,On.23 $

18,130.24 $

47,207.47 $

4.3.".,33_7..3..9..

See notes to the general purpose financial statements.

- 30-

CARROLL COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30,1998

EXHIBIT"N"

BALANCE JULY 1,1997

ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 1998

QUINTON PRINCE SCHOLARSHIP FUND

ASSETS Cash and Cash Equivalents Investments

$

668.56 $

642,80 $

888.01 $

423.35

11,611,99

12,000.00

11,611.99

12,000.00

Total Assets

$

12,280.55 $

12,642.80 $

12,500.00 $ _-===1;,;2*.4;,;;2.3..3.5.;;"

LIABILITIES Funds Held for Others

$

12,280.55 $

12,642.80 $

12,500.00 $=====12:l:.4=2~3.:;;;3;;;.5

SPECIAL ACTIVITIES ACCOUNT
ASSETS Cash and Cash Equivalents

$

3,477.31 $

16,868.07 $

14,638.49 $ ========501:0,7..0.=6.8..9=

LIABILITIES Funds Held for Others

$

3,477.31 $

16,868.07 $

14,638.49 $ _ _-=501:0,7..0.=6.=89=

TOTALS - AGENCY FUNDS
ASSETS Cash and Cash Equivalents Investments

$

4,145.87 $

17,510,87 $

15,526.50 $

6,130.24

11,611.99

12,000.00

11,611.99

12,000.00

$

15l57.86 $

29,510.87 $

27,138.49 $=_=1..8.*,1;,;;;3.=0.=2.4..

LIABILITIES Funds Held for Others

$

15l57.86 $

29,510.87 $

27,138.49 $

1..8.i.!o,1.,3,;;;,;0.2..4...

See notes to the general purpose financial statements.

- 31 -

CARROLL COUNTY BOARD OF EDUCATION

SCHEDULE "1"

SCHEDULE OF REOUIRED SUPPLEMENTARY INFORMATION

YEAR 2000 DISCLOSURES

YEAR ENDED JUNE 30, 1998

At June 30, 1998, the Carroll County Board ofEducation had no outstanding contractual commitments for the purpose ofmaking computer systems and other electronic equipment year 2000 compliant. The year 2000 issue is the result of shortcomings in many electronic data processing systems and other equipment that make operations beyond year 1999 troublesome. The year 2000 issue is ofprimary concern for the Board's financial accounting system. The following stages have been identified as necessary to implement a year 2000 compliant systems.
Awareness Stage - Encompasses establishing a budget and project plan for dealing with the year 2000 issue.
Assessment Stage - The actual process ofidentifying all ofits systems and individual components of the systems to check for compliance.
Remediation Stage - When changes are made to systems and equipment.
Validation/Testing Stage - The process of ensuring that the changes made to systems and equipment will produce a year 2000 compliant system.
It will be necessary for the Board to progress through all four of these stages for each computer and/or electronic system, not already year 2000 compliant, in order to assure that these systems will not be adversely affected. As ofJune 30, 1998, the financial accounting system was determined to be at the Awareness Stage.
The Board's financial accounting software (GENESIS) and hardware (Wang VS) is owned by the State (Georgia Department ofEducation). These systems have been determined to be critical to the Board's ability to successfully conduct operations. As ofJune 30, 1998, the State had not contracted for the remediation of either the Wang VS operating system or the GENESIS accounting software. In the subsequent period, the Georgia Department of Education remediated the Wang VS operating system and the updated operating system was installed at all GENESIS sites as ofDecember 9, 1998. The Georgia Department ofEducation has remediated the GENESIS software and conducted tests at nine pilot sites. The remediated GENESIS software has been provided to all boards ofeducation currently utilizing the GENESIS accounting software.

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

CARROLL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30.1998

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Pass-Through from Georgia Department of Education Food and Nutrition Program Food Services School Breakfast Program 1998 Grant National School Lunch Program 1998 Grant Food Distribution Program (1) Pass-Through from Office of School Readiness Food and Nutrition Program Child and Adult Care Food Program 1998 Contract
Total U. S. Department of Agriculture
Education, U. S. Department of Pass-Through from Georgia Department of Education Elementary and Secondary Education Act Title I Even Start 1998 Grant Grants to Local Educational Agencies 1997 Summer 1998 Grant Title II Eisenhower Professional Development 1997 Grant 1998 Grant TItle VI Innovative Education Program Strategies 1998 Grant Goals 2000 State and Local Education Systemic Improvement Grants 1997 Grant 1998 Grant Individuals with Disabilities Education Act Part B - Special Education Flow Through 1998 Grant Preschool 1998 Grant Severely Emotionally Disturbed 1998 Grant Vocational Education - Basic Grants to States High School Program Basic Grant 1998 Grant Tech-Prep Education 1998 Grant
Total U. S. Department of Education

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

* 10.553
* 10.555 10.550

N/A $ 477,382.58

(2)

N/A

1,487,059.18 $ 3,697,393.59 (3)

N/A

205,796.02

205,796.02

10.558

N/A

30,260.15

(2)

$ 2,200,497.93 $ 3,903,189.61

84.213 84.010 84.010
84.281 84.281
84.298

N/A $ 149,982.77 $

184,312.12 (3)

N/A

5,000.00

5,000.00

N/A

1,418,315.25

1,418,~15.25

NlA

9,082.01

9,082.01

N/A

40,054.21

40,054.21

N/A

76,630.95

76,630.95

84.276

NlA

84.276

NlA

30,486.54 86,122.56

30,486.54 86,122.56

84.027

N/A

84.173

N/A

84.027

N/A

616,924.28 83,730.30 107,458.99

616,924.28 83,730.30 107,458.99

84.048 84.243

N/A

157,755.51

214,905.40 (3)

N/A

10,168.38

10,168.38

$ 2,791,711.75 $ 2,883,190.99

-33-

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

SCHEDULE "2"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTIlY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Health and Human Services, U. S. Department of Pass-Through from Georgia Department of Human Resources Family Preservation and Support Services 1997 Contract 1998 Contract Georgia Child Care 1998 Contract

93.556 93.556
93.575

N/A $ 23,080.10 $

N/A

28,125.00

N/A

33,948.00

23,080,10 28,125,00
33,948.00

Total U. S. Department of Health and Human Services

$

85,153.10 $

85,153.10

Labor, U. S. Department of Pass-Through from West Central Georgia Private Industry Council Job Training Partnership Act 97-SVP-01 97-1IC-01 98-SYP-01

17.250 17.250 17.250

N/A

$

32,217.82 $

N/A

36,417.58

N/A

13,108.00

32,217.82 36,417.58 13,108.00

Total U. S. Department of Labor

$

81,743.40 $

81,743.40

Total Federal Financial Assistance

$ 5,159,106.18 $

N/A=Not Available

Notes to the Schedule of Expenditures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the Child and Adult Care Food Program and the School Breakfast P.rogram were not maintained separately and are included in the 1997 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 ofthe CFDA number.

The Board did not provide Federal Assistance to any Subrecipient.

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

6,953,2n.10

See notes to the general purpose financial statements.

- 34-

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

SCHEDULE "3"

AGENCYIFUNDING
GRANTS Education, Georgia Department of Quality Basic Education General and Career Education Programs Special Education Programs Remedial Education Program Media Center Programs Staff Development Programs Indirect Cost Pupil Transportation Regular Bus Replacement Middle School Incentive Program Special Instructional Assistance In-School Suspension Migrant Mid-term Adjustment Counselors Grades 4 and 5 Technology Training Local Fair Share Educational Equalization Funding Grant Food Services Vocational Education Other State Programs Ad Valorem Tax Adjustment Alternative Program Apprenticeship Program At-Risk Summer School Program Environmental Science Program Health Insurance Innovative Programs Mentor Teacher Program Next Generation Schools Preschool Handicapped Program Remedial Summer School Program Severely Emotionally Disturbed Teachers' Retirement Lottery Programs Alternative School Program Instructional Technology Assistive Technology Classroom Technology
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Human Resources, Georgia Department of Children's Trust Fund Commission Carroll County Parenting Program Georgia Child Care Council Grant
Office of School Readiness Pre-Kindergarten Program
Office of Treasury and Fiscal Services Public School Employees Retirement
CONTRACT Georgia State University Reading Recovery Program
See notes to the general purpose financial statements.

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

$ 21,944,550.00 6,182,637.00 852,300.00 942,419.00 304,529.00 6,071,036.00
1,401,544.00 412,474.00 258,171.00
1,715,309.00 292,494.00 554.00 87,930.00 144,211.00
-3,879,013.00 2,575,586.00
$ 53,068.96
286,883.00 120,500.00 109,628.06
37,353.31 1,000.00
937,263.65 5,000.00
28,200.00 45,450.00 135,674.00 12,665.46
43,403.50

281,924.00
1,498,483.00 4,132.00 20,534.00
293,430.00

$ 21,944,550.00 6,182,637.00 852,300.00 942,419.00 304,529.00 6,071,036.00
1,401,544.00 412,474.00 258,171.00
1,715,309.00 292,494.00 554.00 87,930.00 144,211.00
-3,879,013.00 2,575,586.00
281,924.00 53,068.96
286,883.00 120,500.00 109,628.06
37,353.31 1,000.00
937,263.65 5,000.00
28,200.00 45,450.00 135,674.00 12,665.46 1,498,483.00 43.403.50
4,132.00
20,534.00 293,430.00

$ 1,019,527.00

1,019,527.00

18,461.56 17,184.12
152,665.00

1,886,766.19

18,461.56 17,184.12
1,886,766.19
152.665.00

47,000.00

47.000.00

$ 41,358,131.62 $ 3,985,269.19 $ 1,019,527.00 $ 46.362.927.81

- 35-

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

SCHEDULE "4"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED
COST (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED IN PRIOR
YEARS

CARROLL COUNTY SCHOOL PROJECTS-

Maximum cost of $46,934,306,25 (includes

capital outlay for bUilding three (3) schools,

acquiring land for schools, and additions,

improvements, renovations, modifications

and equipping of all eXisting schools),

$ 46,934,306.25 $ 46,934,306.25 $

2,432,554,02 $

0.00

FINAL INSTALLMENT OF OUTSTANDING

BONDED INDEBTEDNESS - Total cost of

$305,693.75 (represents remaining

principal and interest on debt for 1974

general obligation school bonds).

305,693.75

305,693.75

305,693.75

0.00

$ 47,240,000.00 $ 47,240,000.00 $

2,738,247.77 $......==.....-....,;;,0,.0...0...

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

See notes to the general purpose financial statements.

- 36-

CARROLL COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS YEAR ENDED JUNE 30, 1998

SCHEDULE "5"

EXPENDITURES

ALTERNATIVE SCHOOL PROGRAM

INSTRUCTIONAL TECHNOLOGY

ASSISTIVE

CLASSROOM

TECHNOLOGY TECHNOLOGY

PRE-KINDERGARTEN PROGRAM

TOTAL

Current

Instruction

$

Support Services

Pupil Services

Improvement of Instructional Services

General Administration

School Administration

Maintenance and Operation of Plant

Student Transportation Services

Other Support Services

4,132.00 $

20,534.00 $ 314,760.72 $

1,562,100.24 $ 1,901,526.96

228,641.23 4,960.32
86,888.06 156.31 26.15
3,785.24 208,64

228,641.23 4,960.32
86,888,06 156.31 26.15
3,785.24 208.64

Total Expenditures

$

4,132.00 $

20,534.00 $ 314,760.72 $

.7 1.886 66,19 $ 2,226,192.91

RECAP: Salaries and Benefits Pre-Kindergarten Program Other Expenditures Alternative School Program Instructional Technology Assistive Technology Classroom Technology Pre-Kindergarten Program

$ 1,847,720.11
4,132.00
20,534.00 314,760.72
39,046.08

$ 2,226,192.91

See notes to the general purpose financial statements.

-37 -

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

SCHEDULE "S"

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

$ 29,921,906.00 $ _ _....;:8:.=3~6,~49:..:1.:.:.0:.=..0

$ 34,026,875.28 1,552,629.69 $ _---'1;.J.;;,3=2=3,....;..14=5=.8~5
$ 35,579,504,97

-476,929.24 $ 35,102,575.73

$

0.00 $=====0=,0=0

See notes to the general purpose financial statements. - 39 -

CARROLL COUNTY BOARD OF EDUCATION ANALYSIS OF MINIMUM EXPENDITURE REqUIREMENTS - BY PROGRAM
GENERAL FUND - qUALITY BASIC EDUCATION PROGRAMS YEAR ENDED JUNE 30, 1998

STAFF DEVELOPMENT PROGRAMS Cost of Instruction Professional Development
Total Staff Development Programs
r> Identifies Fourteen Weighted Programs,
See notes to the general purpose financial statements,

$

88,228.00

$

88,228.00 $

0,00

216.301.00

216.301.00

0.00

$

304,529,00 100 $

===...... 304,529,00 $ .....

=-=0..0..=0

- 40 -

SCHEDULE "7"

TOTAL REQUIRED

ACTUAL EXPENDITURES

SALARIES

OPERATIONS

TOTAL

AMOUNT OF UNDEREXPENDITURE
FOR REQUIRED ALLOTMENT

$ 2.280.228.30 $ 2.855.300.66 $

54.715.43 $ 2,910.016.09

5?53.593.80

7,068,710.37

212,838.90

7.281,549.27

$ 8.033.822.10 $ 9.924,011.03 $

267.554.33 $ 10.191.565.36 $

0.00

2,358.855.90

3,127.901.88

153.781.16

3.281.683.04

0.00

4,109.501.70

4.946,234.48

337.970.05

5,284.204.53

0.00

2,331,707.40

3.548,029.04

202,557.82

3,750.586.86

0.00

1,644.499.80

1.609,438.43

75,984.16

1.685,422.59

0.00

1.271,708.10

1.597.281.38

175,144.76

1,772,426.14

0.00

$ 19,750,095.00 $ 24,752,896.24 $ 1,212,992.28 $ 25,965,888.52

$ 4,872,694.50 $

334,434.42 $ 971,129.41 4.652.215.73 444,426.19 42,046.11

9,487.14 $ 11,172.31 53.216.56 11,015.92
1.320.25

343.921.56 982,301.72 4,705,432.29 455,442.11 43,366.36

$ 4,872.694.50 $ 6,444.251.86 $

86.212.18 $ 6.530,464.04

0.00

691.678.80

878,201.13

17.269.69

895,470.82

0.00

$ 5,564,373.30 $ 7.322,452.99 $

103.481.87 $ 7.425.934.86

$

767.070.00 $

761.661.65 $

6,671.70 $

768,333.35

0.00

$ 26.081.538.30 $ 32,837.010.88 $ 1,323,145.85 $ 34,160,156.73

$

691.752.60 $ 1.189.864.40

$ 1,189,864.40

0.00

156.424.50

$

229,483.84

229,483.84

0.00

$

848,177.10 $ 1,189.864.40 $

229.483.84 $ 1.419.348.24

$ 26,929,715.40 $ 34,026,875.28 $ 1,552.629.69 $ 35,579,504.97 $

0.00

$

88,228.00

216,301.00

$ ........,;;3.04,:;.5;:;;2=9,;;;.0=0

$

289.083.42 $

289,083.42

53,861.55

53,861.55

$

342,944.97 $

342,944.97 $ ========0.00...

- 41 -

SECTION II 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 30334-8400
April 1, 1999

Honorable Roy E. Bames, Governor Members ofthe General Assembly Members ofthe State Board of Education
and Superintendent and Members ofthe Carroll 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 Carroll County Board of Education as of and for the year ended June 30, 1998, and have issued our report thereon dated April 1, 1999. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general purpose financial statements. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Carroll County Board of Education's financial statements are free ofmaterial misstatement, we perfonned tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and perfonning our audit, we considered Carroll County Board of Education's internal control over fmancial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over fmancial reporting. However, we noted a certain matter involving the internal control over financial reporting and its
98YB-40

operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our

attention relating to significant deficiencies in the design or operation of the internal control over fmancial

reporting that, in our judgement, could adversely affect Carroll County Board ofEducation's ability to record,

process, summarize and report financial data consistent with assertions of management in the financial

statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned

Costs as item FS-6221-98-01.

.

A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the fmancial statements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, the reportable condition described above, is also considered to be a material weakness.

This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.

Respectfully submitted,
~~I,OQ~.~
Russell W. Hinton State Auditor

RWH:jb 98YB-40

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
April 1, 1999

Honorable Roy E. Barnes, Governor Members ofthe General Assembly Members ofthe State Board ofEducation
and Superintendent and Members ofthe Carroll County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULARA-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Carroll County Board of Education with the types of compliance requirements described in the U.S. Office ofManagement and Budget (OMB) Circular A-I33 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1998. Carroll County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Carroll County Board of Education's management. Our responsibility is to express an opinion on Carroll County Board ofEducation's compliance based on our audit.
We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-B3, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-B3 require that we plan and perfonn the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Ca.r.roll 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 detennination on Carroll County Board of Education's compliance with those requirements.

98SA-1O

In our opinion, the Carroll 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, 1998.
Internal Control Over Compliance
The management of Carroll County Board of Education is responsible for establishing and maintaining effective internal control over ~ompliance with requirements of laws, regulations, contraqts and grants applicable to Federal programs. In planning.and performing our audit, we considered Carroll 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.
Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design oroperation of one or more ofthe internal control components does not reduce to a relatively low level ofrisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.
This report is intended for the information of management, the Federal cognizant agency, Federal awarding agencies and pass through entities. This restriction is not intended to limit the distribution ofthis report which is a matter of public record.
Respectfully submitted,

RWH:jb 98SA-1O

Russell W. Hinton State Auditor

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

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

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

6221-93-04 FS-6221-97-01

Further Action Not Warranted Unresolved - No Corrective Action Implemented

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6221-97-01

The Board and administration recognize the importance of maintaining a general fixed assets account group. However, staffing limitations and budgetary considerations preclude our being able to employ sufficient staffto carry out the process. Therefore, the Board chooses to not maintain a general fixed assets account group.

SECTION IV FINDINGS AND QUESTIONED COSTS

CARROLL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1998

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Carroll 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 Carroll County Board of Education disclosed fmancial statement reportable conditions related to the following control category.

General Fixed Assets

The reportable condition described above is considered to be a material weakness.

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

4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Carroll County Board ofEducation did not disclose any reportable conditions in internal control over major programs.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Carroll 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 Carroll County Board ofEducation's audit did not disclose audit findings required to be reported by section .51O(a) ofOMB Circular A-133.

7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program

8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.

9. Low Risk Auditee

The Carroll County Board ofEducation was audited as a low risk auditee based on a waiver granted

by the U. S. Department of Education.

'

- 1-

CARROLL COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 1998
II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Finding Control Numbe,r: FS-6221-98-01 The Carroll County Board ofEducation did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general pwpose financial statements ofthe Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance of a General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group. Management's Response: With regards to Audit Control Number FS-6221-98-01 (Failure to Maintain General Fixed Assets Account Group), the Board and administration recognize the importance of maintaining a General Fixed Assets Account Group. However, staffing limitations and budgetary considerations preclude our being able to employ sufficient staffto carry out the process. Therefore, the Board chooses to not maintain a General Fixed Assets Account Group.
ill FEDERAL AWARb FINDINGS AND QUESTIONED COSTS
No matters were reported.
- 2-