Catoosa County Board of Education, Ringgold, Georgia, report on audit of the fiscal year ended June 30, 2001

.STATE OF GEORGIA . DEPARTMENT OF AUDITS AND ACCOUNTS
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.CATOOSACOUNTY BOARD OF EDUCATION
RINGGOLD, .GEORGIA . REPORT ON AUDIT OFTHEFINAN.CIALSTATEMENTS . FORTHEFISCALYEARENOEDJUNE30,2001
RussellW. Hinton State Auditor

CATOOSA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES

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

7

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

8

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

23

I

FIDUCIARY FUND TYPE

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

AGENCY FUNDS

24

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

25

2 SCHEDULE OF STATE REVENUE

27

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

29

CATOOSA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

ADDITIONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

30

5

BY SITE

31

SECTIONll
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133

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

SECTIONN FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS

SECTION I FINANCIAL

RUSSELl. \V. HINTON
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
154 WashingtoI1 Street, S.W.. Suite 214 Atlanta. Georgia 30334-X400
April 24, 2002

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

200lARL-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 conform to generally accepted accounting principles.
* School activity accounts maintained at the individual schools are not included in the
general-purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
* The Board 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 umecorded 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 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 Catoosa 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 April 24, 2002, on our consideration of the Catoosa County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was performed for the purpose of forming an opinion on the general-purpose financial statements of the Catoosa County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through I) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audit~ of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such information has been subjected to the auditing
2001ARL-13

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 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 permanent 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,
~
Ru sell W. Hinton State Auditor
RWH:as 200 1ARL-13

CATOOSA COUNTY BOARD OF EDUCAnON

CATOOSA COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES JUNE 30, 2001

ASSETS Cash and Cash Equivalents Accounts Receivable Prepaid Items Inventories
Food Donated Commodities Purchased Food
Total Assets

GOVERNMENTAL FUND

SPECIAL

GENERAL

REVENUE

FUND

FUND

$ 5,067,971.56 $ 1,224,145.23

532,939.84

286,151.35

1,000.00

55,249.20 28,294.97

$ 5,601,911.40 $ 1,593,840.75

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable Deferred Revenue Funds Held for Others
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$

88,536.36 $

112,741.35

400,108.06

142.18

9,138.87

$

88,536.36 $

522,130.46

$

55,249.20

28,294.97

$ 5,513,375.04

988,166.12

$ 5,513,375.04 $ 1,071,710.29

Total Liabilities and Fund Equity

$ 5,601,911.40 $ 1,593,840.75

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

EXHIBIT "A"

TYPES CAPITAL
PROJECTS FUND

FIDUCIARY FUND TYPE AGENCY FUNDS

TOTALS

(Memorandum Only)

JUNE 30, 2001

JUNE 30, 2000

$ 7,325,811.84 $

5,341.97 $ 13,623,270.60 $ 8,863,086.54

1,414,058.93

2,233,150.12

2,030,303.13

1,000.00

1,000.00

55,249.20 28,294.97

42,976.53 31,877.63

$ 8,739,870.77 $

5,341.97 $ 15,940,964.89 $ 10,969,243.83

$

14,592.99

126,049.82

$

$

140,642.81 $

$
5,341.97 5,341.97 $

215,870.70 $ 400,108.06
142.18
126,049.82 9,138.87 5,341.97
756,651.60 $

197,692.62 338,366.24
18,098.83 367,317.30 213,307.00
664.10
1,135,446.09

$ 8,599,227.96
0.00 $ 8,599,227.96

$

12,533.71

$

55,249.20

28,294.97

8,599,227.96

6,501,541.16 $ 15,184,313.29 $

42,976.53 31,877.63 4,946,671.25 102,146.00
4,697,592.62
9,833,797.74

$ 8,739,870.77 $

5,341.97 $ 15,940,964.89 $ 10,969,243.83 -3-

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

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

GENERAL FUND

SPECIAL REVENUE
FUND

$ 37,797,980.69 $
74,451.27 14,260,260.40
1,421,761.95
$ 53,554,454.31 $

976,923.73 3,974,673.98
1,627,403.17
6,579,000.88

$ 36,677,243.67 $
1,049,342.30 1,180,499.27 1,398,137.63
581,587.82 3,995,639.52
465,291.51 3,600,401.12 2,143,407.82
121,023.67 567,895.19
53,076.20
$ 51 ,833,545.72 $
$ 1,720,908.59 $

2,434,953.31 246,010.01 214,700.75 20,077.37 60,546.78 533.00
92,695.07 49,437.59 3,399,267.76
6,518,221.64 60,779.24

$

9,727.00

$

9,727.00

$ 1,730,635.59 $

60,779.24

3,782,739.45

1,002,241.04

12,272.67 -3,582.66

FUND BALANCE JUNE 30

$ 5,513,375.04 $ ==1=:,,0=7=1.l:,7=1=0.=29=

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

EXHIBIT"B"

CAPITAL PROJECTS
FUND

TOTALS

(Memorandum Only) YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

208,202.48 $ 38,983,106.90 $ 35,388,325.17

4,049,125.25

3,541,662.35

6,723,292.72

20,983,553.12

18,867,562.35

227,765.16

3,276,930.28

2,906,085.97

$ 7,159,260.36 $ 67,292,715.55 $ 60,703,635.84

$ 39,112,196.98 $ 34,113,040.36

$ 3,599,122.65

1,295,352.31 1,395,200.02 1,418,215.00
642,134.60 3,996,172.52
465,291.51 3,600,401.12 2,236,102.89
121,023.67 617,332.78 3,399,267.76
3,652,198.85

2,112,747.44 1,248,299.95 1,378,410.53
614,695.08 3,971,548.47
415,937.68 3,250,582.01 2,105,800.87
205,944.17 545,721.86 3,225,529.48
11,735.16 3,785,623.59

$ 3,599,122.65 $ 61,950,890.01 $ 56,985,616.65

$ 3,560,137.71 $ 5,341,825.54 $ 3,718,019.19

$

9,727.00 $

140,691.77

$

-9,727.00

-9,727.00

-140,691.77

$

-9,727.00 $

0.00 $

0.00

$ 3,550,410.71 $ 5,341,825.54 $ 3,718,019.19

5,048,817.25

9,833,797.74

6,139,494.75

12,272.67 -3,582.66

-24,854.47 1,138.27

$ 8,599,227.96 $ 15,184,313.29 $ 9,833,797.74 -5-

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

EXHIBIT"C"

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

CATOOSA 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 Catoosa 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 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.
General Fixed Assets are recorded as expenditures in the various funds at the time ofpurchase. 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 recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds 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.
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.
-8-

CATOOSA COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

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.
FIDUCIARY FUND TYPE - the fund used to account for assets held by a government unit in a trustee capacity or as an agent for individuals, private organizations, other government units and/or other funds. This fund includes:
AGENCY FUNDS - the funds used to account for assets held in a fiduciary capacity for other funds, governments, or individuals.
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.
Agency funds are purely custodial in nature and do not involve measurement ofresults ofoperations.
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.
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
-9-

CATOOSA COUNTY BOARD OF EDUCATION

EXHIBIT tiD"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 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 ofthe 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.
Agency funds are accounted for using the modified accrual basis ofaccounting in recognizing assets and liabilities.
BUDGET
The Catoosa 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.
CASH AND CASH EQUIVALENTS
COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-term 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 deposit its funds in one or more solvent banks or insured Federal savings and loan associations.
- 10-

CATOOSA COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RECEIVABLES

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

PROPERTY TAXES

The Catoosa County Board of Commissioners fixed the property tax levy for the 2000 tax year (calendar year) on September 6, 2000 (levy date). Taxes were due on December 20,2000 (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 Catoosa 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 $14,166,196.19.

The tax millage rate levied for the 2000 tax year (calendar year) for the Catoosa County Board of Education was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

14.75 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $6,723,292.72 and was recorded in the Capital Projects Fund. The State will terminate collection ofthis tax once an additional $6,063,145.85 has been collected or on June 30, 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 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 amountsdo not constitute "available spendable resources" even though they are a component of net current assets.

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CATOOSA COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL~PURPOSE FINANCIAL STATEMENTS

JUNE 30,2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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 other than reimbursements.
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results 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.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value ofsecurities 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 ofthe following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State ofGeorgia,

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CATOOSA COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 2: DEPOSITS

(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,

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

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

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

CATEGORIZATION OF DEPOSITS At June 30, 2001, the bank balances were $17,213,818.74. 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.
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

$ 200,000.00

2

0.00

3

17,013,818.74

Total

$17.213,818.74

- 13-

CATOOSA COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30,2001

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 of assets; errors or omissions; job related illness or injuries to employees; natural disaster and unemployment compensation.

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. 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 of the past three years.

The School District has elected to self-insure for all losses related to natural disaster. The School District has not experienced any losses related to this risk in the past three years.

The School District has established a limited risk management program for workers' compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for 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 $250,000.00 loss per occurrence, up to the statutory limit.

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

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

$

0.00 $ 148,054.55 $ 148,054.55 $

0.00

$

0.00 $ 205,346.09 $ 205,346.09 $

0.00

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for 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:

- 14-

CATOOSA COUNTY BOARD OF EDUCATION

EXHIBIT "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 $

1,364.00 $

1,364.00 $

0.00

$

0.00 $

3,497.34 $

3,497.34 $

0.00

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

Position Covered

Amount

Superintendent All Other Employees

$ 25,000.00 $ 35,000.00

Note 5: SHORT-TERM DEBT

The School District issues tax anticipation notes 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 ofshort-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.

Tax Anticipation Notes

Beginning Balance

Additions

Payments

Ending Balance

$_ _---:0=.0=0 $1,000,000.00 $1,000,000.00 $_ _--'O=.O~O

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $635,656.65 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$498,830.01

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of $5,978.64

- 15 -

CATOOSA COUNTY BOARD OF EDUCATION

EXHIBIT "D" .

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 6: 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$130,848.00

Note 7: SIGNIFICANT COMMITMENTS

The following is an analysis ofsignificant outstanding construction or renovation contracts executed by the School District as of June 30, 2001, together with funding available:

Project

Unearned Executed Contracts

Funding Available From State

Battlefield Primary School 026-01 S-623-003

$ 6,041,970.06 $ 240,804.72

$ 6,041.970.06 $ 240,804.72

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

Note 8: CONTINGENT LIABILITIES

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

The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance ofroutine School District operations. The ultimate disposition ofthese proceedings is not presently determinable, but is not believed to be material to the general-purpose financial statements.

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

- 16-

CATOOSA COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 9: RETIREMENT PLANS

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 School District who are covered by TRS are required by State statute to contribute 5% oftheir 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%

$ 3,766,825.86 $ 3,490,271.59 $ 3,408,998.24

- 17 -

CATOOSA 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

SCHOOL FOOD
SERVICES FUND

LOITERY PROGRAMS

$ 1,200,574.92 $

63,823.68

3,515.06

55,249.20 28,294.97

Total Assets

$ 1,287,634.15 $ ===6;,;;;3&,8;;;:23=.=68=

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft 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.
-18-

$

42,999.50 $

172,924.36

$

215,923.86 $

13,002.20 42,821.48
8,000.00
63,823.68

$

55,249.20

28,294.97

988,166.12 $

$ 1,071,710.29 $

0.00 0.00

$ 1,287,634.15 $ ===6;,;;;3&,8;;;:2=3.=68=

EXHIBIT"E"

FEDERAL PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30,2000

$ 1,264,398.60 $ 1,164,575:36

$

282,636.29

286,151.35

220,620.78

55,249.20 28,294.97

42,976.53 31,877.63

$

282,636.29 $ 1,634,094.12 $ 1.460,050.30

$

40,253.37 $

40,253.37

56,739.65

112,741.35 $

101,344.19

184,362.22

400,108.06

338,366.24

142.18

142.18

18,098.83

1,138.87

9,138.87

$

282,636.29 $

562,383.83 $

457,809.26

$

12,533.71

$

55,249.2.0

28,294.97

42,976.53 31,877.63

$

0.00

988,166.12

914,853.17

$

0.00 $ 1,071,710.29 $ 1,002,241.04

$

282,636.29 $ 1,634,094.12 $ 1,460,050.30

-19-

CATOOSA COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND d1ANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2001

FUND BALANCE JUNE 30
See notes to the general-purpose financial statements. - 20-

$ 1,071,710.29 $=====0.=00,,=

EXHIBIT"F"

FEDERAL PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

976,923.73 $

728,221.39

$ 2,387,766.44

3,974,673.98

3,456,862.80

1,627,403.17

1,468,219.45

$ 2,387,766.44 $ 6,579,000.88 $ 5,653,303.64

$ 1,790,463.25 $ 2,434,953.31 $ 1,946,750.38

182,351.87 211,030.80
20,077.37 53,711.20
533.00
92,695.07 49,437.59

246,010.01 214,700.75
20,077.37 60,546.78
533.00
92,695.07 49,437.59 3,399,267.76

202,159.11 131,668.81 40,000.70
60,628.03 6,039.42 1,067.02
89,729.88 29,925.84 3,225,092.59 11 ,735.16

$ 2,400,300.15 $ 6,518,221.64 $ 5,744,796.94

$

-12,533.71 $

60,779.24 $

-91,493.30

818.77

$

-12,533.71 $

60,779.24 $

-90,674.53

12,533.71

1,002,241.04

1,116,631.77

12,272.67 -3,582.66

-24,854.47 1,138.27

$

0.00 $ 1,071,710.29 $ 1,002,241.04

- 21 -

CATOOSA COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 30, 2001

EXHIBIT"G"

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets

SPECIAL PURPOSE LOCAL OPTION SALES TAX

LOTTERY PROJECT

TOTALS JUNE 30, 2001 JUNE 30, 2000

$ 7,567,968.32

$ 7,567,968.32 $ 4,129,274.78

1,171,902.45 $ 242,156.48

1,414,058.93

1,500,166.77

$ 8,739,870.77 $ 242,156.48 $ 8,982,027.25 $ 5,629,441.55

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Contracts Payable Retainages Payable
Total Liabilities
FUND EQUITY
Fund Balances Reserved For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated
Total Fund Equity

$ 242,156.48 $ 242,156.48

$

14,592.99

14,592.99

$ 367,317.30

126,049.82

126,049.82

213,307.00

$

140,642.81 $ 242,156.48 $ 382,799.29 $ 580,624.30

$ 8,599,227.96
0.00 $ $ 8,599,227.96 $

$ 8,599,227.96 $ 4,946,671.25
102,146.00

0.00

0.00

0.00

0:00 $ 8,599,227.96 $ 5,048,817.25

Total Liabilities and Fund Equity

$ 8,739,870.77 $ 242,156.48 $ 8,982,027.25 $ 5,629,441.55

See notes to the general-purpose financial statements.

- 22-

CATOOSA COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND FUND BALANCES
CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2001

EXHIBIT "H"

FUND BALANCE JUNE 30

$ 8,599,227,96 $====0=.=00== $ 8,599,227.96 $ 5,048,817,25

See notes to the general-purpose financial statements.

- 23-

CATOOSA COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FIDUCIARY FUND TYPE - AGENCY FUNDS YEAR ENDED JUNE 30, 2001

EXHIBIT "I"

AWARD BANQUET FUND
ASSETS Cash and Cash Equivalents

BALANCE JULY 1, 2000 ADDITIONS

DEDUCTIONS

BALANCE JUNE 30, 2001

$

300.00 $ 7,050.00 $

6,550.00 $

800.00

LIABILITIES Funds Held for Others

$

300.00 $ 7,050.00 $

6,550.00 $ =====8=00=.=00==

O. WAYNE ROLLINS FOUNDATION SCHOLARSHIP
ASSETS Cash and Cash Equivalents

$

154.63 $ 10,000.00 $

10,000.00 $===:=:.1~54,;.;.6=3==

LIABILITIES Funds Held for Others

$

154.63 $ 10,000.00 $

10,000.00 $===:=:.1=54,;.;.6=3==

PARTNERSHIP 2000 PROGRAM
ASSETS Cash and Cash Equivalents

$

209.47 $ 32,222.08 $

28,044.21 $ ==",;,4o=,3~87;,,;,.3=4=

LIABILITIES Funds Held for Others

$

209.47 $ 32,222.08 $

28,044.21 $ ==.;;;4==,3;,;;;.87.;.;.~34.=

TOTALS - AGENCY FUNDS
ASSETS Cash and Cash Equivalents

$

664.10 $ 49,272.08 $

44,594.21 $==.;;;5==,3;,,;,4,;.;1.~97==

LIABILITIES Funds Held for Others

$

664.10 $ 49,272.08 $

44,594.21 $ ==,;;;,5o=,3,,;,41.:=.9=7~

See notes to the general-purpose financial statements.

- 24-

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

SCHEDULE "1"

CATOOSA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2001
Notes to the Schedule of Expenditures of Federal Awards
(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system during the current fiscal year.
(2) Expenditures for the School Breakfast Program were not maintained separately and are included in the 2001 National School Lunch Program.
(3) Expenditures for this program include State, and/or Other Funds. Expenditures are not maintained by fund source.
(4) Funds earned on this program do not require reporting of expenditures.
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 Catoosa County Board of Education and is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the general-purpose financial statements.

SCHEDULE "1"

See notes to the general-purpose financial statements.

- 26-

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

SCHEDULE "2"

AGENCYIFUNDING

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

TOTAL

GRANTS

Education, Georgia Department of

Quality Basic Education

Direct Instructional Cost

Kindergarten Program

$ 1,952,377.00

$ 1,952,377.00

Kindergarten Program - Early Intervention Program

469,960.00

469,960.00

Primary Grades (1-3) Program

5,443,015.00

5,443,015.00

Primary Grades - Early Intervention (1-3) Program

1,167,071.00

1,167,071.00

Upper Elementary Grades (4-5) Program

3,274,269.00

3,274,269.00

Middle Grades (6-8) Program

4,917,492.00

4,917,492.00

High School General Education (9-12) Program

3,678,539.00

3,678,539.00

Vocational Laboratory (9-12) Program

1,646,135.00

1,646,135.00

Students with Disabilities

Category I

136,302.00

136,302.00

Category II

469,365.00

469,365.00

Category III

1,975,564.00

1,975,564.00

Category IV

515,822.00

515,822.00

Category V

86,324.00

86,324.00

Itinerant

12,102.00

12,102.00

Supplemental Speech

7,200.00

7,200.00

Gif\ed Student - Category VI

715,375.00

715,375.00

Remedial Education Program

284,529.00

284,529.00

Alternative Education Program

368,850.00

368,850.00

English Speakers of Other Languages (ESOL)

48,828.00

48,828.00

Media Center Program

874,353.00

874,353.00

Staff and Professional Development

232,303.00

232,303.00

Indirect Cost

5,031,378.00

5,031,378.00

Categorical Grants

Pupil Transportation

Regular

758,771.00

758,771.00

Bus Replacement

217,587.00

217,587.00

Nursing Services

196,663.00

196,663.00

Principal Supplements

39,631.00

39,631.00

Vocational Supervisors

65,829.00

65,829.00

Education Equalization Funding Grant

2,032,894.00

2,032,894.00

Food Services

$ 258,270.00

258,270.00

Vocational Education

19,260.39

19,260.39

Other State Programs

Apprenticeship Program

40,000.00

40,000.00

At-Risk Summer School Program

9,172.23

9,172.23

Health Insurance

498,830.01

498,830.01

Innovative Programs

4,774.92

4,774.92

Mentoring Program

8,000.00

8,000.00

Mentor Teachers

1,141.00

1,141.00

National Teacher Certification

6,288.00

6,288.00

Pay 'for Performance

168,000.00

168,000.00

Preschool Handicapped Program

109,349.00

109,349.00

Remedial Summer School

11,107.50

11,107.50

Student Achievement

25,000.00

25,000.00

Teachers' Retirement

5,978.64

5,978.64

Lottery Programs

Applied Technology Labs

134,000.00

134,000.00

Computers in the Classroom

196,793.00

196,793.00

Exceptional Growth-Capital Outlay

$ 208,202.48

208,202.48

Office of School Readiness Pre-Kindergarten Program

387,860.73

387,860.73

Office of Treasury and Fiscal Services Public School Employees Retirement

130,848.00

130,848.00

- 27-

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

SCHEDULE "2"

AGENCY/FUNDING
CONTRACTS Education, Georgia Department of Elementary School Foreign Language Model Program Georgia's Reading Challenge Reading First Program

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

GENERAL

REVENUE

PROJECTS

FUND

FUND

FUND

$

39,477.00

$

73,988,00

28,238.00

TOTAL
39,477.00 73,988.00 28,238.00

$ 37,797,980.69 $ 976,923,73 $ 208,202.48 $ 38,983,106.90

See notes to the general-purpose financial statements,

- 28-

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

SCHEDULE "3"

PROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

To build, equip, and furnish three new schools; to make additions, renovations and provide furnishings and equipment at all existing schools and to acquire land and pay for site preparation for three new schools

$ 30,870,000.00 $ 30,870,000.00 $ 3,599,122.65 $ 14,686,707.21

PROJECT STATUS
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. Includes all cost from project inception to completion.
(3) The voters of Catoosa County approved the imposition of a 1% sales tax to fund the above project. Amounts expended for this project 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.'

- 29-

CATOOSA COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBEl
ALLOTMENTS AND EXPENDITURES BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

DESCRIPTION

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

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 School (6-8) Program

High School General Education (9-12) Program

Vocational Laboratory (9-12) Program

Students with Disabilities

Category I

Category II

Category III

Category IV

Category V

Gifted Student - Category VI

Remedial Education Program

Alternative Education Program

English Speakers of Other Languages (ESOL)

2,222,266.00 $ 534,924.00
6,195,439.00 1,328,402.00 3,726,891.00 5,597,268..00 4,187,047.00 1,873,690.00 3,645,406.00
814,268.00 323,864.00 419,838.00
55,579.00

2,329,694.97 $ 436,140.43
6,493,557.57 1,212,264.39 4,037,983.72 5,607,296.60 4,647,183.36 1,957,820.10
201,307.53 633,558.09 2,380,653.09 394,382.34 187,584.16 873,166.40 341,381.47 742,491.24
84,000.27

47,664.02 $ 2,703.03
165,872.82 25,633.03 95,598.21
162,595.91 204,547.04 267,413.86

2,377,358.99 438,843.46
6,659,430.39 1,237,897.42 4,133,581.93 5,769,892.51 4,851,730.40 2,225,233.96

53,113.29 3,809.20 7,226.28
38,252.41 1,264.02
15,564.45 588.00
2,023.91 1,126.67

254,420.82 637,367.29 2,387,879.37 432,634.75 188,848.18 888,730.85 341,969.47 744,515.15
85,126.94

TOTAL DIRECT INSTRUCTIONAL PROGRAMS

$

30,924,882.00 $ 32,560,465.73 $ 1,094,996.15 $ 33,655,461.88

Media Center Program Staff and Professional Development

995,222.00 264,415.00

1,187,921.01 53,266.35

193,708.82 211,869.93

1,381,629.83 265,136.28

TOTALQBEFORMULAFUNDS

$

32,184,519.00 $ 33,801,653.09 $ 1,500,574.90 $ 35,302,227.99

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

See notes to the general-purpose financial statements.

- 30

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

SCHEDULE "5"

Ringgold Primary School Battlefield Elementary School Tiger Creek Elementary School Boynton Elementary School Lakeview-Fort Oglethorpe High School West Side Elementary School Lakeview Middle School Cloud Springs Elementary School Ringgold Elementary School Ringgold High School Graysville Elementary School Ringgold Middle School Catoosa CrossRoads Academy Central Office (Alternative Education Program)

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,344,088.00 $ 2,343,324.43

2,236,248.00

2,385,217.74

1,846,155.00

2,039,253.49

2,066,364.00

2,350,510.46

3,353,163.00

3,945,454.84

1,692,029.00

1,832,824.28

3,080,827.00

3,163,653.98

2,196,927.00

2,365,966.24

1,819,074.00

1,876,985.13

3,976,329.00

4,396,363.32

2,055,320.00

2,251,064.73

3,838,520.00

3,924,185.73

780,657.51

419,838.00

TOTAL

$

30,924,882.00 $ 33,655,461.88

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

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

SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

RUSSELL 'V. HINTON
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street. S.W.. Suite 214 Atlanta, Georgia 30334-X400
April 24, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Catoosa 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 Catoosa County Board of Education as of and for the year ended June 30,2001, and have issued our report thereon dated April 24, 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 ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether Catoosa County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Catoosa County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of
2001YB-40

expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. However, we noted a certain matfer involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Catoosa 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 describedin the accompanying Schedule ofFindings and Questioned Costs as item FS-6231-01-01.
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 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, the reportable condition described above is considered to be a material weakness.
This report is intended solely for the information and use of the management, members of the Catoosa 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,
~~onW'~ State Auditor
RWH:as 2001YB-40

RUSSELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
2)4 Washington Street. S.W.. Suite 214 Atlanta. Georgia ::W:n4-X400
April 24, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members ofthe Catoosa County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB ClRCULAR A-133
Ladies and Gentlemen:
Compliance
We have audited the compliance of Catoosa County Board of Education with the types of
u.s. compliance requirements described in the Office ofManagement and Budget (OMB) Circular
A-I33 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Catoosa 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 Catoosa County Board of Education's management. Our responsibility is to express an opinion on Catoosa County Board of Education's compliance based on our audit.
We conducted our audit ofcompliance in accordanc~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 OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types ofcompliance requirements referred to above that could have a direct and material effect on amajor Federal program occurred. An audit includes examining, on a test basis, evidence about the Catoosa 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 Catoosa County Board of Education's compliance with those requirements.
2001SA-10

In our opinion, the Catoosa County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2001.
Internal Control Over Compliance
The management of Catoosa 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 Catoosa County Board ofEducation's internal control over compliance with requirements that could have a direct arid material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133.
Our consideration ofthe 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 or operation ofone or more ofthe internal control components does not reduce to a relatively low level of risk 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 ofperforming 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 solely for the information and use of the management, members of the Catoosa 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,
~.~
Rus 11 W. Hinton State Auditor
RWH:as 200ISA-IO

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

CATOOSA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6231-99-01 FS-6231-00-0 1

Further Action Not Warranted Partially Resolved - Corrective Action Partially Implemented

CORRECTIVE ACTIONIRESPONSES

GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6231-00-01

In Fiscal Year 2001 the Board ofEducation contracted with Mike Stephens, CPA, to assist with the gathering of data to meet the requirements of GASB 34. To date the following has been accomplished:
1) A thorough research study has been completed to determine a value of each property owned by the Catoosa County Board of Education.
2) Each site owned by the Board of Education has completed a listing of all real property with a value over $1,000.00.
3) A master spreadsheet is being built that will total all fixed assets by category. 4) The Excel database referred to under 2) and 3) will be used to arrive at figures
needed to enter on system financial books. 5) System personnel are currently determining fixed asset lives individually and by
category in order to show accumulated ~epreciation as of June 30, 2002.

SECTION IV FINDINGS AND QUESTIONED COSTS

CATOOSA 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 Catoosa 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 ofthe Financial Statements The audit report for the CatoosaCounty Board ofEducation disclosed a financial statement reportable condition 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 Catoosa County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements.
4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Catoosa 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 Catoosa County Board ofEducation'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-B3 The Catoosa County Board ofEducation's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-B3.
7. Major Programs Federal awards audited as major programs are as follows: 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies 84.027 Individuals with Disabilities Education Act - Part B - Special EducationCapacity Building Improvement 84.027 Individuals with Disabilities Education Act - Part B - Special EducationFlow Through 84.027 Individuals with Disabilities Education Act - Part B - Special Education Special Innovative Project 84.173 Individuals with Disabilities Education Act - Part B- Special Education Preschool
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CATOOSA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Catoosa County Board of Education qualified as a low risk auditee based on a waiver granted by the U. S. Department of Education.
IT FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated from Prior Year Audit Control Number: FS-6231-01-0l
The Catoosa County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general-purpose financial statements 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 Account Group. 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 maintainedofall additions and deletions to the General Fixed assets Account Group.
Management's Response:
In Fiscal Year 2001, the Board ofEducation contracted with Mike Stephens, CPA, to assist with the gathering of data to meet the requirements of GASB 34. To date the following has been accomplished:
A thorough research study has been completed to determine a value ofeach property owned by the Catoosa County Board of Education.
Each site owned by the Board of Education has completed a listing of all real property with a value over $1,000.00.
A master spreadsheet is being built that will total all fixed assets by category.
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CATOOSA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001 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 Audit Control Number: FS-6231-01-01
The Excel database referred to under 2) and 3) will be used to arrive at figures needed to enter on system financial books. System personnel are currently determining fixed asset lives individually and by category in order to show accumulated depreciation as of June 30, 2002. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.
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