CATOOSA COUNTY BOARD OF EDUCATION
RINGGOLD, GEORGIA
ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2020
(Including Independent Auditor's Reports)

CATOOSA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S REPORT

REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

EXHIBITS

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS

A

STATEMENT OF NET POSITION

B

STATEMENT OF ACTIVITIES

FUND FINANCIAL STATEMENTS

C

BALANCE SHEET

GOVERNMENTAL FUNDS

D

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION

E

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

GOVERNMENTAL FUNDS

F

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT

OF REVENUES, EXPENDITURES AND CHANGES IN FUND

BALANCES TO THE STATEMENT OF ACTIVITIES

G

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS

H NOTES TO THE BASIC FINANCIAL STATEMENTS

SCHEDULES

REQUIRED SUPPLEMENTARY INFORMATION

1 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA
2 SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA
3 SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY SCHOOL OPEB FUND
4 SCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA 5 SCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND 6 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION 7 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL GENERAL FUND

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1 2
3 4 5 6 7 8
31 32 33 34 35 36 37

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CATOOSA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
SECTION I FINANCIAL SCHEDULES SUPPLEMENTARY INFORMATION 8 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 9 SCHEDULE OF STATE REVENUE 10 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

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SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

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

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

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SECTION I FINANCIAL

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Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400

INDEPENDENT AUDITOR'S REPORT

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Catoosa County Board of Education
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Catoosa County Board of Education (School District), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the School District as of June 30, 2020, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis and required supplementary information listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the School District's basic financial statements. The accompanying supplementary information, as listed in the table of contents, is presented for the purposes of additional analysis and is not a required part of the basic financial statements. The Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Title 2 U. S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.
The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 29, 2021 on our consideration of the School District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control over financial reporting and compliance.
A copy of this report has been filed as a permanent record and made available to the press of the State, as provided for by Official Code of Georgia Annotated section 50-6-24.
Respectfully submitted,

March 29, 2021

Greg S. Griffin State Auditor

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CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020
INTRODUCTION
The discussion and analysis of the Catoosa County Board of Education's (School District) financial performance provides an overview of the School District's financial activities for the fiscal years ended June 30, 2020 and June 30, 2019. The intent of this discussion and analysis is to look at the School District's financial performance as a whole. Readers should also review the financial statements and the notes to the basic financial statements to enhance their understanding of the School District's financial performance.
FINANCIAL HIGHLIGHTS
Key financial highlights for the fiscal years 2020 and 2019 are as follows:
On the government-wide financial statements, the assets and deferred outflow of resources of the School District exceeded liabilities and deferred inflow of resources by $32.8 million and $27.0 million, respectively, for the fiscal years ended June 30, 2020 and 2019.
The School District had $134.3 million and $122.7 million in expenses relating to governmental activities for the fiscal years ended June 30, 2020 and June 30, 2019, respectively. Only $81.9 million and $78.2 million of the above mentioned expenses for 2020 and 2019 were offset by program specific charges for services, grants and contributions. General revenues (primarily property and sales taxes) of $58.2 million and $55.2 million, respectively, for 2020 and 2019 along with fund balance were adequate to provide for the remainder of these programs.
The current ratio, which measures the School District's ability to transform current assets into cash and pay its short term liabilities, was 2.10 and 2.02 for the fiscal years ended June 30, 2020 and June 30, 2019, respectively. A ratio greater than 1.5 implies the School District would have no trouble meeting debts that will arise in the next fiscal year.
The General Fund (the primary operating fund), presented on a current financial resource basis, ended fiscal year 2020 with a fund balance of $20.3 million, a decrease of $347,733 from the June 30, 2019 fund balance of $20.7 million.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of three parts; management's discussion and analysis, the basic financial statements, and supplementary information. The basic financial statements include two levels of statements that present different views of the School District. These include the government-wide and fund financial statements.
The government-wide financial statements include the Statement of Net Position and Statement of Activities. These statements provide information about the activities of the School District presenting both short-term and long-term information about the overall financial status.
The fund financial statements focus on individual parts, reporting the School District's operation in more detail. The governmental funds statements disclose how basic services are financed in the shortterm as well as what remains for future spending. The fiduciary funds statement provides information about the financial relationships in which the School District acts solely as a trustee or agent for the benefit of others. The fund financial statements reflect the School District's most significant funds. For the years ending June 30, 2020 and 2019, the general fund, the capital projects fund, and the debt service fund represent the most significant funds.
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CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020
The financial statements also include notes that explain some of the information in the statements and provide more detailed data. The statements are followed by a section of required supplementary information that further explains and supports the financial statements. Additionally, other supplementary information (not required) is also presented that further supplements understanding of the financial statements.
Government-Wide Statements
The government-wide statements report information about the School District as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Position includes all of the School District's assets and liabilities. All of the current fiscal year's revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid.
The two government-wide statements report the School District's net position and how it has changed. Net position, the difference between the School District's assets, deferred outflows or resources, liabilities and deferred inflows of resources, are one way to measure the School District's overall financial health or position. Over time, increases or decreases in net position are an indication of whether its financial health is improving or deteriorating. Changes may be the result of many factors, including those not under the School District's control, such as the property tax base, facility conditions, required educational programs and other factors.
In the Statement of Net Position and the Statement of Activities, the School District has one distinct type of activity:
Governmental Activities All of the School District's programs and services are reported here including instruction, support services, operation and maintenance of plant, pupil transportation, food service, student activity accounts and various others.
Fund Financial Statements
The School District's fund financial statements provide detailed information about the most significant funds, not the School District as a whole. Some funds are required by State law and some by bond requirements. The School District's major governmental funds are the general fund, capital projects fund, and debt service fund.
Governmental Funds - Most of the School District's activities are reported in governmental funds, which focus on the determination of financial position and change in financial position, not on income determination. These funds are reported using the modified accrual method of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds are reconciled to the financial statements.
Fiduciary Funds - The School District is the trustee, or fiduciary, for assets that belong to others, such as school clubs and organizations within the principals' accounts. The School District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The School District excludes these activities from the governmentwide financial statements because it cannot use these assets to finance its operations.
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CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020

FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT AS A WHOLE

Recall that the Statement of Net Position provides the perspective of the School District as a whole. Table 1 provides a summary of the School District's net position for fiscal years 2020 and 2019.

Table 1 Net Position

Fiscal Year 2020

Governmental Activities

Percent

Fiscal Year

of Total

2019

Percent of Total

Assets Current Assets Net Capital Assets

$ 52,203,662

20% $ 52,823,259

20%

207,861,108

80%

208,908,044

80%

Total Assets

260,064,770

100%

261,731,303

100%

Deferred Outflows of Resources Related to Pension and OPEB Plan

35,493,240

100%

24,193,135

100%

Liabilities Current Liabilities Long-Term Liabilities

24,843,135

11%

26,040,676

11%

210,807,656

89%

208,691,926

89%

Total Liabilities

235,650,791

100%

234,732,602

100%

Deferred Inflows of Resources Related to Pension and OPEB Plan

27,080,859

100%

24,231,343

100%

Net Position Net Investment in Capital Assets Restricted Unrestricted (Deficit)

196,266,588 17,031,870
(180,472,098)

598% 52%
(550)%

185,821,390 18,052,693
(176,913,590)

689% 67%
(656)%

Total Net Position

$ 32,826,360

100% $ 26,960,493

100%

In 2020, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. The primary objective
of this statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. That objective is accomplished by postponing the effective dates of certain
provisions in statements and Implementation Guides that first became effective or are scheduled to
become effective for period beginning after June 15, 2018, and later.

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CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020

Table 2 shows the changes in net position for fiscal years ending June 30, 2020 and June 30, 2019.

Table 2 Change in Net Position

Fiscal Year 2020

Governmental Activities

Percent

Fiscal Year

of Total

20219

Percent of Total

Revenues Program Revenues
Charges for Services Operating Grants and Contributions Capital Grants and Contributions

$

2,159,497

78,389,041

1,377,226

3% $ 96%
1%

2,824,525 75,102,923
231,660

4% 96%
0%

Total Program Revenues

81,925,764

100%

78,159,108

100%

General Revenues Property Taxes Sales Taxes Non-Program Specific General Contributions Investment Earning Miscellaneous

31,583,861 13,887,973
9,433,015 488,762
2,822,485

54% 24%
16% 1% 5%

30,581,173 11,864,527
8,479,941 456,974
3,853,023

55% 22%
16% 0% 7%

Total General Revenues

58,216,096

100%

55,235,638

100%

Total Revenues

140,141,860

133,394,746

Expenses Instruction Support Servies
Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Central Support Services Other Support Services Operations of Non-Instructional Services Community Services Food Services Interest on Debt

86,259,187
6,351,386 4,171,146 1,963,947 2,080,769 8,750,257
734,160 10,253,908
6,727,365 585,024 858,660
580,477 4,955,459
4,248

64%
5% 3% 1% 2% 7% 1% 8% 5% 0% 0%
0% 4% 0%

77,917,044
5,917,552 3,175,746 1,780,072 1,999,703 7,734,115
691,839 9,168,128 6,310,879
482,119 1,113,770
530,743 5,521,179
379,784

63%
5% 3% 2% 2% 6% 1% 7% 5% 0% 1%
1% 4% 0%

Toal Expenses

134,275,993

100%

122,722,673

100%

Increase in Net Position

5,865,867

10,672,073

Beginning Net Position

26,960,493

16,288,420

Ending Net Position

$

32,826,360

$

26,960,493

Program revenues, in the form of charges for services, operating grants and contributions, and capital grants and contributions increased $3.8 million for governmental activities in fiscal year 2020. This increase is largely due to an increase in funds earned through the State Quality Basic Education (QBE) Funding Formula.

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CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020

General revenues increased by approximately $3.0 million during fiscal year 2020. The majority of this increase came from an increase in property tax receipts, an increase in average ESPLOST sales tax collections and the audit of ESPLOST sales tax collections by Georgia Department of Revenue over fiscal year 2019.

The School District continues to analyze spending patterns and look for areas where reductions can be made without affecting the level of education provided. Table 3 shows the total cost of services and the net cost of services. Net cost of services can be defined as the total cost less fees generated by the activities and intergovernmental revenue provided for specific programs. The net cost reflects the financial burden on the School District's taxpayers by each activity.

Table 3 Governmental Activities

Total Cost of Services

Fiscal Year

Fiscal Year

2020

2019

Net Cost of Services

Fiscal Year

Fiscal Year

2020

2019

Instruction Support Service
Pupil Serviices Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Central Support Services Other Support Services Operations of Non-Instructional Services Community Services Food Services Interest on Debt

$ 86,259,187 $ 77,917,044

6,351,386 4,171,146 1,963,947 2,080,769 8,750,257
734,160 10,253,908
6,727,365 585,024 858,660

5,917,552 3,175,746 1,780,072 1,999,703 7,734,115
691,839 9,168,128 6,310,879
482,119 1,113,770

580,477 4,955,459
4,248

530,743 5,521,179
379,784

$ 24,033,162 $ 18,881,417

5,159,673 1,987,258
556,415 (320,779) 5,734,400 731,104 6,581,436 5,428,996 582,649 592,511

4,741,684 1,220,241
454,659 211,292 4,929,306 691,839 6,178,113 5,007,501 482,119 775,203

403,752 875,404
4,248

316,830 293,577 379,784

Total Expenses

$ 134,275,993 $ 122,722,673 $ 52,350,229 $ 44,563,565

Although program revenues make up a majority of the funding, the School District is still dependent upon tax revenues for governmental activities. For 2020 and 2019, respectively, local taxes and other general revenues were required to cover 40% and 37% of instruction and support activities during the fiscal year.

FINANCIAL ANALYSIS OF THE SCHOOL DISTRICT'S FUNDS

The School District's governmental funds are accounted for using the modified accrual basis of accounting. The governmental funds had total revenues of $138.6 million and total expenses of $139.1 million. There was a decrease in the fund balance totaling about $400,000 for the governmental funds as a whole. The majority of this decrease is due to the increased expenditure of ESPLOST funds for capital outlay projects but was offset by an increase in average ESPLOST sales tax collections over fiscal year 2019. The $20.3 million fund balance in the general fund reflects that the School District continues to be able to adequately meet current costs.

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CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020
General Fund Budgeting Highlights
The School District's budget is prepared according to Georgia Law. The most significant budgeted fund is the general fund, funded primarily through state revenue and local property tax revenue. During the course of fiscal years 2020 and 2019, the School District amended its general fund budget as needed.
During fiscal year 2020 the general fund had final actual revenues totaling $125.6 million, which represented an increase from the original budgeted amount of $122.3 million by $3.3 million. This difference (final actual vs. original budget) was due mainly to increased property tax receipts and investment earnings.
Final actual expenditures during fiscal year 2020 totaling $125.2 million represented an increase from the original budgeted amount of $124.2 million by $1.0 million. The increase in actual expenditures versus original budget expenditures was due primarily to increased support services spending.
General fund original budgeted expenditures exceeded budgeted revenues by $2.7 million for fiscal year 2020.
CAPITAL ASSETS
At fiscal years ended June 30, 2020 and June 30, 2019, the School District had $207.9 million and $208.9 million, respectively, invested in a broad range of capital assets, including land, buildings, and furniture and equipment for its governmental activities. Construction in progress decreased significantly with the completion of many ESPLOST V projects, and the majority of that balance moved to buildings and improvements in fiscal year 2020. ESPLOST funds finance all major additions and renovations of the School District. Table 4 breaks down the asset balances, by class, net of accumulated depreciation.
Table 4 Capital Assets (Net of Depreciation)

Governmental Activities

Fiscal Year

Fiscal Year

2020

2019

Land Land Improvements Building and Improvements Equipment Construction in Progress

$ 6,851,750 10,372,865
183,908,319 5,995,633 732,541

$ 6,606,750 9,758,319
164,725,884 6,004,309
21,812,782

Total

$ 207,861,108 $ 208,908,044

The construction in progress balance at June 30, 2020 consists of the following projects:

Lakeview Middle School Baseball/Softball Field Upgrades Heritage Middle School Baseball/Softball Field Upgrades

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CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020
DEBT ADMINISTRATION
On August 24, 2016, the School District issued general obligation bonds in the amount of $40.0 million. The bonds will be repaid from sales tax proceeds of a Special Purpose Local Option Sales Tax (SPLOST) that begins July 1, 2017 and ends June 30, 2022. Final payment on the 2016 General Obligation Bonds will occur on August 1, 2022. Table 5 summarizes bond debt outstanding at June 30, 2020 and 2019.
Table 5 Long-Term Debt Outstanding

Governmental Activities

Fiscal Year

Fiscal Year

2020

2019

General Obligation Bonds - 2016

$ 25,190,000 $ 32,780,000

Capital Lease Payable due > 1 Year

$

17,451 $

963

The School District's bonds have been assigned a rating of "AA+" by Standard and Poor's based on the School District's participation in the Georgia State Intercept Program. Standard and Poor's has assigned an underlying rating (without regard to the Georgia State Intercept Program) of "AA-" to the bonds.
Capital leases are generally used as a way to purchase buildings and equipment without a large lump sum payment. The leases are paid over a period of 3-5 years. The School District entered into one new capital lease in fiscal year 2020. Table 6 summarizes capital lease obligations outstanding at June 30, 2020 and 2019. A schedule of future payments can be found in the notes to the financial statements.
Table 6 Capital Leases Outstanding

Governmental Activities

Fiscal Year

Fiscal Year

2020

2019

Capital Lease Obligations Outstanding

$

24,231

$

3,273

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CATOOSA COUNTY BOARD OF EDUCATION MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2020
CURRENT ISSUES
Fiscal year 2020 was a largely successful year for the Catoosa County Board of Education. While new and unforeseen challenges occurred with the emergence of the COVID-19, the School District as a whole continued to see strong graduation rates, all teaching positions were maintained to continue to combat increasing class sizes, and was able to offer a 3.00% pay raise to all classified employees and increase the local supplement of all certified employees by 5.00%. The School District also continued its emphasis on student and staff safety by investing early on in distance learning solutions and other tools to continue educating students at a high level. All of this was accomplished while keeping expenses lower than earned revenues. The School District was able to maintain its strong financial position after a high water mark was obtained in 2019. However, several challenges remain in the near future.
The rising cost of employee benefits continues to be a major expenditure for the School District. In fiscal year 2020, the School District spent approximately $32.0 million on employee benefits alone. In addition, the required employer contribution rates for Teachers Retirement System of Georgia (TRS) increased from 20.90% to 21.14% in 2020. While the costs are temporarily peaking in 2020, with rates falling back down to 19.06% in 2021, they are projected to rise again to 19.81% in 2022. An economic decline caused by the COVID-19 pandemic has appeared to lead to an increase in 2022 and could force the school system to continue contributing at well over 20.00% in 2023 and beyond.
The continued and lasting impact of COVID-19 is still unknown to some extent. The School District will likely see an increase in expenditures related to virtual learning, cleaning supplies, and safety equipment, such as personal protection equipment and temperature scanners, in 2021 and beyond.
Approximately 92.00% of general fund expenses, the main operating fund for the School District, were related to salaries and employee benefits for the year ended June 30, 2020. More than a third of certified personnel in the School District have 21 years or more of experience resulting in salaries at the highest possible state pay level. With such personnel heavy expenses, it is difficult to offset mandated expense increases such as TRS and health insurance premium expenses. The School District consistently evaluates how funds can be spent smarter and more effectively to ensure that Catoosa County students receive a quality education from effective personnel.
In 2020, the Board voted to roll back the millage rate from 17.171 to 16.905 due to increased property values. This maintained the level of funding received from property taxes by the School District in previous years without passing on a higher tax bill to Catoosa County residents. This represents the new lowest millage rate in Catoosa County since 2012. The net digest for fiscal year 2020 increased to $1.676 billion, which produced approximately $1,676,000 per mill. We expect the tax digest to continue growing for fiscal years 2021 and 2022 with corresponding millage rate rollbacks. As shown in Table 3, property tax and sales tax are responsible for covering 40.00% of the School District's costs. It is anticipated that this pressure to provide local monies to meet mandated educational requirements and operational costs will continue.
CONTACTING THE SCHOOL DISTRICT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, investors, and creditors with a general overview of the School District's finances and to show the School District's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Chris Lusk, Director of Finance or Austin Carter, Finance Manager at the Catoosa County Board of Education, 307 Cleveland Street, Ringgold, Georgia 30736. You may also email your questions to clusk@catoosa.k12.ga.us or acarter@catoosa.k12.ga.us.
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CATOOSA COUNTY BOARD OF EDUCATION

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CATOOSA COUNTY BOARD OF EDUCATION STATEMENT OF NET POSITION JUNE 30, 2020
ASSETS
Cash and Cash Equivalents Receivables, Net
Taxes State Government Federal Government Other Inventories Prepaid Items Capital Assets, Non-Depreciable Capital Assets, Depreciable (Net of Accumulated Depreciation)
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Related to Defined Benefit Pension Plan Related to OPEB Plan
Total Deferred Outflows of Resources
LIABILITIES
Accounts Payable and Accrued Liabilities Salaries and Benefits Payable Interest Payable Claims Incurred but not Reported (IBNR) Contracts Payable Retainages Payable Deposits and Unearned Revenues Net Pension Liability Net OPEB Liability Long-Term Liabilities
Due Within One Year Due in More Than One Year
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Related to Defined Benefit Pension Plan Related to OPEB Plan
Total Deferred Inflows of Resources
NET POSITION
Net Investment in Capital Assets Restricted for
Continuation of Federal Programs Debt Service Capital Projects Unrestricted (Deficit)
Total Net Position
The notes to the basic financial statements are an integral part of this statement.

EXHIBIT "A"

GOVERNMENTAL ACTIVITIES

$

38,678,868

3,625,629 8,950,760
584,716 13,770
213,887 136,032 7,584,291 200,276,817

260,064,770

29,983,992 5,509,248
35,493,240

24,315 14,448,400
524,792 342,563
79,690 60,370 86,925 107,415,468 85,980,370
9,276,080 17,411,818
235,650,791

4,062,247 23,018,612
27,080,859

196,266,588
905,615 12,904,813
3,221,442 (180,472,098)

$

32,826,360

- 1 -

CATOOSA COUNTY BOARD OF EDUCATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2020

EXHIBIT "B"

EXPENSES

CHARGES FOR SERVICES

PROGRAM REVENUES OPERATING GRANTS AND
CONTRIBUTIONS

CAPITAL GRANTS AND CONTRIBUTIONS

NET (EXPENSES) REVENUES
AND CHANGES IN NET POSITION

GOVERNMENTAL ACTIVITIES

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 Operations of Non-Instructional Services Community Services Food Services Interest on Long-Term Debt

$

86,259,187 $

6,351,386 4,171,146 1,963,947 2,080,769 8,750,257
734,160 10,253,908
6,727,365 585,024 858,660

580,477 4,955,459
4,248

165,977 $
260,076 2,177
30,616 -
67,807 -
56,618 -
260,816
172,694 1,142,716
-

61,066,601 $
925,962 2,181,711 1,376,916 2,369,029 2,948,050
3,056 3,458,993 1,143,929
2,375 5,333
1,522 2,905,564
-

993,447 $
5,675 -
32,519 -
156,861 154,440
-
2,509 31,775
-

(24,033,162)
(5,159,673) (1,987,258)
(556,415) 320,779 (5,734,400) (731,104) (6,581,436) (5,428,996) (582,649) (592,511)
(403,752) (875,404)
(4,248)

Total Governmental Activities

$ 134,275,993 $

2,159,497 $

78,389,041 $

1,377,226

(52,350,229)

General Revenues Taxes Property Taxes For Maintenance and Operations Other Taxes Sales Taxes Special Purpose Local Option Sales Tax For Capital Projects Other Sales Tax Grants and Contributions not Restricted to Specific Programs Investment Earnings Miscellaneous

30,914,859 669,002
12,941,680 946,293
9,433,015 488,762
2,822,485

Total General Revenues

58,216,096

Change in Net Position

5,865,867

Net Position - Beginning of Year

26,960,493

Net Position - End of Year

$

32,826,360

- 2 -

CATOOSA COUNTY BOARD OF EDUCATION BALANCE SHEET
GOVERNMENTAL FUNDS JUNE 30, 2020

EXHIBIT "C"

ASSETS
Cash and Cash Equivalents Receivables, Net
Taxes State Government Federal Government Other Inventories Prepaid Items

GENERAL FUND

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$ 24,204,521 $
1,448,929 8,950,760
584,716 13,770
213,887 136,032

1,044,742 $
2,176,700 -

13,429,605 $
-

38,678,868
3,625,629 8,950,760
584,716 13,770
213,887 136,032

Total Assets
LIABILITIES
Accounts Payable Salaries and Benefits Payable Contracts Payable Retainages Payable Deposits and Unearned Revenue
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes Unavailable Revenue - Sales Taxes
Total Deferred Inflows of Resources
FUND BALANCES
Nonspendable Restricted Assigned Unassigned
Total Fund Balances

$ 35,552,615 $

3,221,442 $ 13,429,605 $ 52,203,662

$

24,315 $

14,448,400

-

-

86,925

14,559,640

- $ 79,690 60,370 -
140,060

- $

24,315

-

14,448,400

-

79,690

-

60,370

-

86,925

-

14,699,700

647,150 -
647,150

1,138,217
1,138,217

-

647,150

-

1,138,217

-

1,785,367

349,919 555,697 2,746,939 16,693,270
20,345,825

1,943,165
-
1,943,165

13,429,605
-
13,429,605

349,919 15,928,467
2,746,939 16,693,270
35,718,595

Total Liabilities, Deferred Inflows of Resources, and Fund Balances

$ 35,552,615 $

3,221,442 $ 13,429,605 $ 52,203,662

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

- 3 -

CATOOSA COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION JUNE 30, 2020

EXHIBIT "D"

Total fund balances - governmental funds (Exhibit "C")
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds.
Land Construction in progress Buildings and improvements Equipment Land improvements Accumulated depreciation
Some liabilities are not due and payable in the current period and, therefore, are not reported in the funds.
Net pension liability Net OPEB liability
Deferred outflows and inflows of resources related to pensions/OPEB are applicable to future periods and, therefore, are not reported in the funds.
Related to pensions Related to OPEB
Taxes that are not available to pay for current period expenditures are deferred in the funds.
Property taxes Sales taxes
Long-term liabilities, and related accrued interest, are not due and payable in the current period and therefore are not reported in the funds.
Bonds payable Accrued interest payable Capital leases payable Compensated absences payable Unamortized bond premiums Claims and judgments payable

$

35,718,595

$

6,851,750

732,541

233,827,641

16,326,240

12,928,408

(62,805,472)

207,861,108

$

(107,415,468)

(85,980,370)

(193,395,838)

$

25,921,745

(17,509,364)

8,412,381

$

647,150

1,138,217

1,785,367

$

(25,190,000)

(524,792)

(24,231)

(76,927)

(1,396,740)

(342,563)

(27,555,253)

Net position of governmental activities (Exhibit "A")

$

32,826,360

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

- 4 -

CATOOSA COUNTY BOARD OF EDUCATION STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2020

EXHIBIT "E"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Community Services Food Services Operation
Capital Outlay Debt Service
Principal Interest
Total Expenditures
Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Capital Leases Transfers In Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning

GENERAL FUND

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTAL

$

31,417,257 $

- $

946,293

11,803,463

80,534,395

1,102,786

7,356,946

-

2,159,497

-

378,006

12,735

2,774,656

47,829

125,567,050

12,966,813

- $ 98,021 -
98,021

31,417,257 12,749,756 81,637,181
7,356,946 2,159,497
488,762 2,822,485
138,631,884

79,764,689
6,183,662 4,083,235 1,907,105 1,904,406 8,488,878
742,213 9,579,641 5,790,505
574,932 843,918 511,101 4,859,033
-
8,127 2,423
125,243,868
323,182

64,378
56,511 213,460 49,216 4,393,728
-
4,777,293
8,189,520

29,085 -
(700,000)
(670,915)
(347,733)
20,693,558

700,000 (11,741,968)
(11,041,968)
(2,852,448)
4,795,613

-
-
7,590,000 1,449,250
9,039,250
(8,941,229)

79,829,067
6,183,662 4,083,235 1,907,105 1,960,917 8,488,878
742,213 9,793,101 5,839,721
574,932 843,918 511,101 4,859,033 4,393,728
7,598,127 1,451,673
139,060,411
(428,527)

11,741,968
-
11,741,968
2,800,739
10,628,866

29,085 12,441,968 (12,441,968)
29,085
(399,442)
36,118,037

Fund Balances - Ending

$

20,345,825 $

1,943,165 $

13,429,605 $

35,718,595

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

- 5 -

CATOOSA COUNTY BOARD OF EDUCATION RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES JUNE 30, 2020

EXHIBIT "F"

Net change in fund balances total governmental funds (Exhibit "E")
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense.
Capital outlay Depreciation expense
Taxes reported in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
Property taxes Sales taxes
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts and the difference between the carrying value of refunded debt and the acquisition cost of refunded debt when debt is first issued. These amounts are deferred and amortized in the Statement of Activities.
Capital leases issued Bond principal retirements Capital lease payments
District pension contributions are reported as expenditures in the governmental funds when made. However, they are reported as deferred outflows of resources in the Statement of Net Position because the reported net pension/OPEB liability is measured a year before the District's report date. Pension/OPEB expense, which is the change in the net pension/OPEB liability adjusted for changes in deferred outflows and inflows of resources related to pensions/OPEB, is reported in the Statement of Activities.
Pension expense OPEB expense
Some items reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds.
Accrued interest on issuance of bonds Amortization of bond premium Compensated absences Claims and judgments

$

(399,442)

$

4,835,063

(5,881,999)

(1,046,936)

$

166,605

1,138,217

1,304,822

$

(29,085)

7,590,000

8,127

7,569,042

$

(3,638,581)

742,977

(2,895,604)

$

158,125

1,289,300

(22,349)

(91,091)

1,333,985

Change in net position of governmental activities (Exhibit "B")

$

5,865,867

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

- 6 -

CATOOSA COUNTY BOARD OF EDUCATION STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS JUNE 30, 2020
ASSETS Cash and Cash Equivalents Receivables, Net
Other
Total Assets LIABILITIES Funds Held for Others

EXHIBIT "G"

AGENCY FUNDS

$

715,556.00

83,607.00

$

799,163.00

$

799,163.00

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

- 7 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

NOTE 1: DESCRIPTION OF SCHOOL DISTRICT AND REPORTING ENTITY
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 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.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the School District have been prepared in conformity with generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). GASB is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the School District's accounting policies are described below.
BASIS OF PRESENTATION
The School District's basic financial statements are collectively comprised of the government-wide financial statements, fund financial statements and notes to the basic financial statements. The government-wide statements focus on the School District as a whole, while the fund financial statements focus on major funds. Each presentation provides valuable information that can be analyzed and compared between years and between governments to enhance the information's usefulness.
GOVERNMENT-WIDE STATEMENTS:
The Statement of Net Position and the Statement of Activities display information about the financial activities of the overall School District, except for fiduciary activities. Eliminations have been made to minimize the double counting of internal activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions.
The Statement of Net Position presents the School District's non-fiduciary assets, deferred outflows of resources, deferred inflows of resources and liabilities, with the difference reported as net position. Net position is reported in three categories as follows:
1. Net investment in capital assets consists of the School District's total investment in capital assets, net of accumulated depreciation, and reduced by outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets.
2. Restricted net position consists of resources for which the School District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties or imposed by law through constitutional provisions or enabling legislation.
3. Unrestricted net position consists of resources not meeting the definition of the two preceding categories. Unrestricted net position often has constraints on resources imposed by management which can be removed or modified.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the School District's governmental activities.
Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expenses (expenses of the School District related to the administration and support of the School District's programs, such as office and maintenance personnel and accounting) are not allocated to programs.
- 8 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

Program revenues include (a) charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
FUND FINANCIAL STATEMENTS:
The fund financial statements provide information about the School District's funds, including fiduciary funds. Eliminations have been made to minimize the double counting of internal activities Separate financial statements are presented for governmental and fiduciary funds. The emphasis of fund financial statements is on major governmental funds, each displayed in a separate column.
The School District reports the following major governmental funds:
The general fund is the School District's primary operating fund. It accounts for and reports all financial resources not accounted for and reported in another fund.
The capital projects fund accounts for and reports financial resources including Education Special Purpose Local Option Sales Tax (ESPLOST), bond proceeds and grants from Georgia State Financing and Investment Commission that are restricted, committed or assigned for capital outlay expenditures, including the acquisition or construction of capital facilities and other capital assets.
The debt service fund accounts for and reports financial resources that are restricted, committed, or assigned including taxes (sales) legally restricted for the payment of general long-term principal and interest.
The School District reports the following fiduciary fund type:
Agency funds are used to report resources held by the School District in a purely custodial capacity (assets equal liabilities) and do not involve measurement of results of operations.
BASIS OF ACCOUNTING
The basis of accounting determines when transactions are reported on the financial statements. The government-wide and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, sales taxes, and grants. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year in which the underlying transaction (sale) takes place. Revenue from grants is recognized in the fiscal year in which all eligibility requirements have been satisfied.
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.

- 9 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The School District considers all revenues reported in the governmental funds to be available if they are collected within sixty days after year-end. The School District considers all intergovernmental revenues to be available if they are collected within 120 days after year-end. Property taxes, sales taxes and interest are considered to be susceptible to accrual. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general longterm debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term liabilities and acquisitions under capital leases are reported as other financing sources.
The School District funds certain programs by a combination of specific cost-reimbursement grants, categorical grants, and general revenues. Thus, when program costs are incurred, there are both restricted and unrestricted net assets available to finance the program. It is the School District's policy to first apply grant resources to such programs, followed by cost-reimbursement grants, then general revenues.
NEW ACCOUNTING PRONOUNCEMENTS
In fiscal year 2020, the School District adopted Governmental Accounting Standards Board (GASB) Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. The primary objective of this statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. That objective is accomplished by postponing the effective dates of certain provisions in statements and Implementation Guides that first became effective or are scheduled to become effective for period beginning after June 15, 2018, and later.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand, demand deposits, investments in the State of Georgia local government investment pool (Georgia Fund 1) and short-term investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Official Code of Georgia Annotated (O.C.G.A.) 45-8-14 authorizes the School District to deposit its funds in one or more solvent banks, insured Federal savings and loan associations or insured chartered building and loan associations.
RECEIVABLES
Receivables consist of amounts due from property and sales taxes, 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 basic financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.
INVENTORIES
Food Inventories
On the basic financial statements, inventories of donated food commodities used in the preparation of meals are reported at their Federally assigned value and purchased foods inventories are reported at cost (calculated on the first-in, first-out basis). The School District uses the consumption method to account for inventories whereby donated food commodities are recorded as an asset and as revenue when received, and expenses/expenditures are recorded as the inventory items are used. Purchased foods are recorded as an asset when purchased and expenses/expenditures are recorded as the inventory items are used.

- 10 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

PREPAID ITEMS

Payments made to vendors for services that will benefit future accounting periods are recorded as prepaid items, in both the government-wide and governmental fund financial statements.

CAPITAL ASSETS

On the government-wide financial statements, capital assets are recorded at cost where historical records are available and at estimated historical cost based on appraisals or deflated current replacement cost where no historical records exist. Donated capital assets are recorded at the acquisition value on the date donated. The cost of normal maintenance and repairs that do not add to the value of assets or materially extend the useful lives of the assets is not capitalized. The School District does not capitalize book collections or works of art.

Capital acquisition and construction are recorded as expenditures in the governmental fund financial statements at the time of purchase (including ancillary charges), and the related assets are reported as capital assets in the governmental activities column in the government-wide financial statements.

Depreciation is computed using the straight-line for all assets, except land, and is used to allocate the actual or estimated historical cost of capital assets over estimated useful lives.

Capitalization thresholds and estimated useful lives of capital assets reported in the government-wide statements are as follows:

Capitalization Policy

Estimated Useful Life

Land

Land Improvements

$

Buildings and Improvements $

Equipment

$

Intangible Assets

$

All 10,000 10,000 10,000
100,000

N/A 20 to 80 years 20 to 80 years
5 to 15 years 10 to 20 years

DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the statement of financial position will report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of resources that applies to a future period(s) and therefore will not be recognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the statement of financial position will report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of resources that applies to a future period(s) and therefore will not be recognized as an inflow of resources (revenue) until that time.
COMPENSATED ABSENCES
Compensated absences payable consists of vacation leave employees earned based on services already rendered.
Vacation leave of 5 days is awarded on a fiscal year basis to all full-time personnel employed on a twelve-month basis. No other employees are eligible to earn vacation leave. Vacation leave not utilized during the fiscal year may be carried over to the next fiscal year, providing such vacation leave does not exceed 5 days. Upon terminating employment, the School District pays all unused and unforfeited vacation benefits to employees. Accordingly, vacation benefits are accrued as a liability in the government-wide financial statements. A liability for these amounts is reported in the governmental fund financial statements only if they have matured, for example, as a result of employee resignations and retirements by fiscal year end.
- 11 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

Members of the Teachers Retirement System of Georgia (TRS) may apply unused sick leave toward early retirement. The liability for early retirement will be borne by TRS rather than by the individual School Districts. Otherwise, sick leave does not vest with the employee, and no liability is reported in the School District's financial statements.
LONG-TERM LIABILITIES AND BOND DISCOUNTS/PREMIUMS
In the School District's government-wide financial statements, outstanding debt is reported as liabilities. Bond premiums and discounts and the difference between the reacquisition price and the net carrying value of refunded debt are deferred and amortized over the life of the bonds using the straight-line method. To conform to generally accepted accounting principles, bond premiums and discounts should be amortized using the effective interest method. The effect of this deviation is deemed to be immaterial to the fair presentation of the basic financial statements. Bond issuance costs are recognized as an outflow of resources in the fiscal year in which the bonds are issued.
In the governmental fund financial statements, the School District recognizes the proceeds of debt and premiums as other financing sources of the current period. Bond issuance costs are reported as debt service expenditures.
PENSIONS
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the pension plan's fiduciary net position and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the Georgia School Employees Postemployment Benefit Fund (School OPEB Fund) and additions to/deductions from School OPEB Fund fiduciary net position have been determined on the same basis as they are reported by School OPEB Fund. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
FUND BALANCES
Fund balance for governmental funds is reported in classifications that comprise a hierarchy based primarily on the extent to which the government is bound to honor constraints on the specific purposes for which amounts in those funds can be spent.
The School District's fund balances are classified as follows:
Nonspendable consists of resources that cannot be spent either because they are in a nonspendable form or because they are legally or contractually required to be maintained intact.
Restricted consists of resources that can be used only for specific purposes pursuant constraints either (1) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments or (2) imposed by law through constitutional provisions or enabling legislation.
Committed consists of resources that can be used only for specific purposes pursuant to constraints imposed by formal action of the Board. The Board is the School District's highest level of decisionmaking authority, and the formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution approved by the Board. Committed fund balance also should incorporate contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.

- 12 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

Assigned consists of resources constrained by the School District's intent to be used for specific purposes but are neither restricted nor committed. The intent should be expressed by (1) the Board or (2) the budget or finance committee, or the Superintendent, or designee, to assign amounts to be used for specific purposes.
Unassigned consists of resources within the general fund not meeting the definition of any aforementioned category. The general fund should be the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it may be necessary to report a negative unassigned fund balance.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.
PROPERTY TAXES
The Catoosa County Board of Commissioners adopted the property tax levy for the 2019 tax digest year (calendar year) on August 31, 2019 (levy date) based on property values as of January 1, 2019. Taxes were due on December 20, 2019 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end on the 2019 tax digest are reported as revenue in the governmental funds for fiscal year 2020. The Catoosa County Tax Commissioner bills and collects the property taxes for the School District, withholds 2.5% of taxes collected as a fee for tax collection and remits the balance of taxes collected to the School District. Property tax revenues, at the fund reporting level, during the fiscal year ended June 30, 2020, for maintenance and operations amounted to $27,468,752.
The tax millage rate levied for the 2019 tax year (calendar year) for the School District was as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations

16.905 mills

Additionally, Title Ad Valorem Tax revenues, at the fund reporting level, amounted to $3,279,503 during fiscal year ended June 30, 2020.
SALES TAXES
Education Special Purpose Local Option Sales Tax (ESPLOST), at the fund reporting level, during the year amounted to $11,803,463 and is to be used for capital outlay for educational purposes or debt service. This sales tax was authorized by local referendum and the sales tax must be re-authorized at least every five years.
NOTE 3: BUDGETARY DATA
The budget is a complete financial plan for the School District's fiscal year and is based upon careful estimates of expenditures together with probable funding sources. The budget is legally adopted each year for the general fund. There is no statutory prohibition regarding over expenditure of the budget at any level. The budget for all governmental funds, except the various school activity (principal) accounts, is prepared and adopted by fund, function and object. The legal level of budgetary control was established by the Board at the aggregate function level. The budget for the general fund was prepared in accordance with accounting principles generally accepted in the United States of America.

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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

The budgetary process begins with the School District's administration presenting an initial budget for the Board's review. The administration makes revisions as necessary based on the Board's guidelines, and a tentative budget is approved. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality, as well as the School District's website. At the next regularly scheduled meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final budget. The approved budget is then submitted, in accordance with provisions of O.C.G.A. 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.
The Superintendent is authorized by the Board to approve adjustments of no more than 5% of the amount budgeted for expenditures in any budget function for any fund. The Superintendent shall report any such adjustments to the Board. If expenditure of funds in any budget function for any fund is anticipated to be more than 5% of the budgeted amount, the Superintendent shall request Board approval for the budget amendment. Under no circumstance is the Superintendent or other staff person authorized to spend funds that exceed the total budget without approval by the Board.
See the General Fund Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual in the Supplementary Information Section for a detail of any over/under expenditures during the fiscal year under review.
NOTE 4: DEPOSITS
COLLATERALIZATION OF DEPOSITS
O.C.G.A. 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum of money which has not been secured by surety bond, by guarantee of insurance, or by collateral. The aggregate of the face value of such surety bond and the market value of securities pledged shall be equal to not less than 110% of the public funds being secured after the deduction of the amount of deposit insurance. If a depository elects the pooled method (O.C.G.A. 45-8-13.1) the aggregate of the market value of the securities pledged to secure a pool of public funds shall be not less than 110% of the daily pool balance.
Acceptable security for deposits consists of any one of or any combination of the following:
(1) Surety bond signed by a surety company duly qualified and authorized to transact business within the State of Georgia,
(2) Insurance on accounts provided by the Federal Deposit Insurance Corporation,
(3) Bonds, bills, notes, certificates of indebtedness or other direct obligations of the United States or of the State of Georgia,
(4) Bonds, bills, notes, certificates of indebtedness or other obligations of the counties or municipalities of the State of Georgia,
(5) Bonds of any public authority created by the laws of the State of Georgia, providing that the statute that created the authority authorized the use of the bonds for this purpose,
(6) Industrial revenue bonds and bonds of development authorities created by the laws of the 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 or securities guaranteed 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.

- 14 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

CATEGORIZATION OF DEPOSITS

Custodial credit risk is the risk that in the event of a bank failure, the School District's deposits may not be returned to it. The School District does not have a deposit policy for custodial credit risk. At June 30, 2020, School District had deposits with a carrying amount of $39,394,424, and a bank balance of $42,392,466. The bank balances insured by Federal depository insurance were $1,000,000 and the bank balances collateralized with securities held by the pledging financial institution or by the pledging financial institution's trust department or agent in the School District's name were $806,541.

At June 30, 2020, $40,585,925 of the School District's bank balances was exposed to custodial credit risk. This balance was in the State's Secure Deposit Program (SDP).

The School District participates in the State's Secure Deposit Program (SDP), a multi-bank pledging pool. The SDP requires participating banks that accept public deposits in Georgia to operate under the policy and procedures of the program. The Georgia Office of State Treasurer (OST) sets the collateral requirements and pledging level for 3each covered depository. There are four tiers of collateralization levels specifying percentages of eligible securities to secure covered deposits: 25%, 50%, 75%, and 110%. The SDP also provides for collateral levels to be increased in the amount of up to 125% if economic or financial conditions warrants. The program lists the types of eligible criteria. The OST approves authorized custodians.

In accordance with the SDP, if a covered depository defaults, losses to public depositors are first satisfied with any applicable insurance, followed by demands of payment under any letters of credit or sale of the covered depository collateral. If necessary, any remaining losses are to be satisfied by assessments made against the other participating covered depositories. Therefore, for disclosure purposes, all deposits of the SDP are considered to be fully collateralized.

NOTE 5: CAPITAL ASSETS

The following is a summary of changes in the capital assets for governmental activities during the fiscal year:

Balances July 1, 2019

Increases

Decreases

Balances June 30, 2020

Governmental Activities Capital Assets, Not Being Depreciated:
Land Construction in Progress

$

6,606,750 $

245,000 $

- $ 6,851,750

21,812,782

2,717,961 23,798,202

732,541

Total Capital Assets Not Being Depreciated

28,419,532

2,962,961 23,798,202

7,584,291

Capital Assets Being Depreciated Buildings and Improvements Equipment Land Improvements
Less Accumulated Depreciation for: Buildings and Improvements Equipment Land Improvements

210,157,604 15,369,341 11,885,040

23,670,037 956,899
1,043,368

45,431,720 9,365,032 2,126,721

4,487,602 965,575 428,822

-

233,827,641

-

16,326,240

-

12,928,408

-

49,919,322

-

10,330,607

-

2,555,543

Total Capital Assets, Being Depreciated, Net

180,488,512

19,788,305

-

200,276,817

Governmental Activities Capital Assets - Net $ 208,908,044 $ 22,751,266 $ 23,798,202 $ 207,861,108

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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

Current year depreciation expense by function is as follows:

Instruction

$

Support Services

Pupil Services

$

22,260

General Administration

127,531

Maintenance and Operation of Plant

615,187

Student Transportation Services

1,075,579

Community Services

9,841

Food Services

3,906,981
1,850,398 124,620

$

5,881,999

NOTE 6: INTERFUND TRANSFERS

INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2020, consisted of the following:

Transfers From

Transfers to

General Fund

Capital Projects Fund

Capital Projects Fund Debt Service Fund

$ 700,000 $

-

-

11,741,968

Total

$ 700,000 $ 11,741,968

Transfers are used to move property tax revenues collected by the general fund to the capital projects fund as supplemental funding source for capital construction projects and to move sales tax revenues collected by the capital projects fund to the debt service fund to pay principal and interest for the general obligation bonds as required in the bond resolution.

NOTE 7: LONG-TERM LIABILITIES

The changes in long-term liabilities during the fiscal year for governmental activities were as follows:

Balance July 1, 2019

Governmental Activities

Balance

Additions

Deductions

June 30, 2020

Due Within One Year

General Obligation (G.O.) Bonds Unamortized Bond Premiums Capital Leases Compensated Absences(1)

$ 32,780,000 $ 2,686,040 3,273 54,578

- $ 29,085 22,349

7,590,000 $ 1,289,300
8,127 -

25,190,000 $ 1,396,740 24,231 76,927

7,980,000 1,289,300
6,780 -

$ 35,523,891 $

51,434 $ 8,887,427 $ 26,687,898 $ 9,276,080

(1) The portion of compensated absences due within one year has been determined to be immaterial to the basic financial statements.

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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

GENERAL OBLIGATION DEBT OUTSTANDING

The School District's bonded debt consists of general obligation bonds that are generally callable with interest payable semiannually. Bond proceeds primarily pay for acquiring or constructing capital facilities. The School District repays general obligation bonds from voter-approved property taxes. General obligation bonds are direct obligations and pledge the full faith and credit of the School District.

The School District had no unused line of credit or outstanding notes from direct borrowings and direct placements related to governmental activities as of June 30, 2020. In the event the entity is unable to make the principal and interest payments using proceeds from the Education Special Purpose Local Option Sales Tax (ESPLOST), the debt will be satisfied from the general fund or from a direct annual ad valorem tax levied upon all taxable property within the School District. Additional security is provided by the State of Georgia Intercept Program which allows for state appropriations entitled to the School District to be transferred to the Debt Service Account Custodian for the payment of debt.

General obligation bonds currently outstanding are as follows:

Description

Interest Rates

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

General Government - Series 2016

5.00% 8/24/2016

8/1/2022 $ 40,000,000 $ 25,190,000

The following schedule details debt service requirements to maturity for the School District's total general obligation bonds payable:

Fiscal Year Ended June 30:

General Obligation Debt

Principal

Interest

Unamortized Bond Premium

2021 2022 2023

$

7,980,000 $

1,060,000 $

1,289,300

8,390,000

650,750

107,440

8,820,000

220,500

-

Total Principal and Interest

$

25,190,000 $

1,931,250 $

1,396,740

CAPITAL LEASES
The School District has acquired copiers and band equipment under the provisions of various longterm lease agreements classified as capital leases for accounting purposes because they provide for a bargain purchase option or a transfer of ownership by the end of the lease term.
The following assets were acquired through capital leases and are reflected in the capital asset note at fiscal year-end:
Governmental Activities

Equipment

$

Less : Accumulated Depreciation

39,288 14,249

$

25,039

During the current fiscal year, the School District entered into a lease agreement as lessee for financing the acquisition of band equipment at a cost of $29,085. This lease qualifies as a capital lease for accounting purposes, and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of inception.
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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

Capital leases currently outstanding are as follows:

Purpose

Interest Rate

Issue Date

Maturity Date

Amount Issued

Amount Outstanding

Copier - Special Education Band Equipment - LFO

5.28%

12/1/2015 7/1/2019

12/1/2020 $ 7/1/2024

11,551 $ 29,085

963 23,268

$

40,636 $

24,231

The following is a schedule of total capital lease payments:

Fiscal Year Ended June 30:

Principal

Interest

2021 2022 2023 2024

$

6,780 $

5,817

5,817

5,817

2,028 1,745 1,745 1,745

Total Principal and Interest

$

24,231 $

7,263

COMPENSATED ABSENCES

Compensated absences represent obligations of the School District 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. Typically, the general fund is the fund used to liquidate this long-term debt. The School District uses the vesting method to compute compensated absences.

NOTE 8: RISK MANAGEMENT

INSURANCE

Commercial Insurance

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; and natural disasters. Except as described below, the School District carries commercial insurance for these risks. Settled claims resulting from these insured risks have not exceed commercial insurance coverage in any of the past three fiscal years.

WORKERS' COMPENSATION

The School District has established a limited risk management program for workers' compensation claims. The School District accounts for claims within the general fund with expenses/expenditures 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 $450,000 loss per occurrence, up to the statutory limit.

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

Beginning of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2019 $ 2020 $

307,332 $ 251,472 $

92,625 $ 292,729 $

148,485 $ 201,638 $

251,472 342,563

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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

UNEMPLOYMENT COMPENSATION

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the general fund with expenses/expenditures 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 of Year Liability

Claims and Changes in Estimates

Claims Paid

End of Year Liability

2019 $

- $

6,204 $

6,204 $

-

2020 $

- $

3,495 $

3,495 $

-

SURETY BOND The School District purchased a surety bond to provide additional insurance coverage as follows:

Position Covered

Amount

Superintendent

$

25,000

NOTE 9: FUND BALANCE CLASSIFICATION DETAILS
The School District's financial statements include the following amounts presented in the aggregate at June 30, 2020:

Nonspendable Inventories Prepaid Assets
Restricted Continuation of Federal Programs Capital Projects Debt Service
Assigned After School Program Local Capital Outlay Projects
Unassigned

$

213,886

136,033 $

$

555,697

1,943,165

13,429,605

$ 1,246,939 1,500,000

349,919
15,928,467 2,746,939
16,693,270

Fund Balance, June 30, 2020

$ 35,718,595

When multiple categories of fund balance are available for expenditure, the School District will start with the most restricted category and spend those funds first before moving down to the next category with available funds.

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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

NOTE 10: SIGNIFICANT COMMITMENTS

OPERATING LEASES

The School District leases equipment under the provisions of one or more long-term lease agreements classified as operating leases for accounting purposes. Rental expenditures under the terms of the operating leases totaled $129,905 for governmental activities for the year ended June 30, 2020. The following future minimum lease payments were required under operating leases at June 30, 2020:

Year Ending

Governmental Funds

2021 2022 2023 2024 2025

$

120,238

105,802

97,483

73,639

2,863

Total

$

400,025

NOTE 11: SIGNIFICANT CONTINGENT LIABILITIES
FEDERAL GRANTS
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 costs which are disallowed under grant terms. Any disallowances resulting from the grantor audit may become a liability of the School District. However, the School District believes that such disallowances, if any, will be immaterial to its overall financial position.
LITIGATION
The School District is a defendant in various legal proceedings pertaining to matters incidental to the performance of routine School District operations. The ultimate disposition of these proceedings is not presently determinable but is not believed to have a material adverse effect on the financial condition of the School District.
NOTE 12: OTHER POST-EMPLOYMENT BENEFITS (OPEB)
GEORGIA SCHOOL PERSONNEL POST-EMPLOYMENT HEALTH BENEFIT FUND
Plan Description: Certified teachers and non-certified public school employees of the School District as defined in 20-2-875 of the Official Code of Georgia Annotated (O.C.G.A.) are provided OPEB through the School OPEB Fund - a cost-sharing multiple-employer defined benefit postemployment healthcare plan, reported as an employee trust fund and administered by a Board of Community Health (Board). Title 20 of the O.C.G.A. assigns the authority to establish and amend the benefit terms of the group health plan to the Board.
Benefits Provided: The School OPEB Fund provides healthcare benefits for retirees and their dependents due under the group health plan for public school teachers, including librarians, other certified employees of public schools, regional educational service agencies and non-certified public school employees. Retiree medical eligibility is attained when an employee retires and is immediately eligible to draw a retirement annuity from Employees' Retirement System (ERS), Georgia Judicial Retirement System (JRS), Legislative Retirement System (LRS), Teachers Retirement System (TRS) or Public School Employees Retirement System (PSERS). If elected, dependent coverage starts on the same day as retiree coverage. Medicare-eligible retirees are offered Standard and Premium Medicare Advantage plan options. Non-Medicare eligible retiree plan options include Health Reimbursement
- 20 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

Arrangement (HRA), Health Maintenance Organization (HMO) and a High Deductible Health Plan (HDHP). The School OPEB Fund also pays for administrative expenses of the fund. By law, no other use of the assets of the School OPEB Fund is permitted.

Contributions: As established by the Board, the School OPEB Fund is substantially funded on a payas-you-go basis; that is, annual cost of providing benefits will be financed in the same year as claims occur. Contributions to the School OPEB Fund from the School District were $2,336,078 for the year ended June 30, 2020. Active employees are not required to contribute to the School OPEB Fund.

OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB

At June 30, 2020, the School District reported a liability of $85,980,370 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of June 30, 2019. The total OPEB liability used to calculate the net OPEB liability was based on an actuarial valuation as of June 30, 2018. An expected total OPEB liability as of June 30, 2019 was determined using standard roll-forward techniques. The School District's proportion of the net OPEB liability was actuarially determined based on employer contributions during the fiscal year ended June 30, 2019. At June 30, 2019, the School District's proportion was 0.700614%, which was a decrease of 0.000406% from its proportion measured as of June 30, 2018.

For the year ended June 30, 2020, the School District recognized OPEB expense of $1,593,101. At June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

OPEB

Deferred

Deferred

Outflows of

Inflows of

Resources

Resources

Differences between expected and actual

experience

$

- $ 9,353,769

Changes of assumptions

2,985,931

12,120,517

Net difference between projected and actual

earnings on OPEB plan investments

187,239

-

Changes in proportion and differences between School District contributions and proportionate share of contributions

-

1,544,326

School District contributions subsequent to the measurement date
Total

2,336,078

-

$ 5,509,248 $ 23,018,612

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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

School District contributions subsequent to the measurement date are reported as deferred outflows of resources and will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ended June 30:

OPEB

2021 2022 2023 2024 2025 Thereafter

$ (4,559,225) $ (4,559,225) $ (4,566,423) $ (3,818,992) $ (1,924,575) $ (417,002)

Actuarial assumptions: The total OPEB liability as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018 using the following actuarial assumptions and other inputs, applied to all periods included in the measurement and rolled forward to the measurement date of June 30, 2019:

OPEB:

Inflation

2.50%

Salary increases

3.00% 8.75%, including inflation

Long-term expected rate of return Healthcare cost trend rate

7.30%, compounded annually, net of investment expense, and including inflation

Pre-Medicare Eligible

7.250%

Medicare Eligible

5.375%

Ultimate trend rate

Pre-Medicare Eligible

4.75%

Medicare Eligible

4.75%

Year of Ultimate trend rate

Pre-Medicare Eligible

2028

Medicare Eligible

2022

Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale BB as follows:
For TRS members: The RP-2000 White Collar Mortality Table projected to 2025 with projection
scale BB (set forward 1 year for males) is used for death after service retirement and beneficiaries. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward two years for males and four years for females) is used for death after disability retirement.
For PSERS members: The RP-2000 Blue-Collar Mortality Table projected to 2025 with
projection scale BB (set forward 3 years for males and 2 years for females) is used for the period after service retirement and for beneficiaries of deceased members. The RP-2000 Disabled Mortality Table projected to 2025 with projection scale BB (set forward 5 years for both males and females) is used for the period after disability retirement.

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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the pension systems, which covered the five-year period ending June 30, 2014, and adopted by the pension Board on December 17, 2015. The next experience study for TRS will be for the period ending June 30, 2018.

The remaining actuarial assumptions (e.g., initial per capita costs, health care cost trends, rate of plan participation, rates of plan election, etc.) used in the June 30, 2018 valuation were based on a review of recent plan experience done concurrently with the June 30, 2018 valuation.

Projection of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculation.

The long-term expected rate of return on OPEB plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected nominal returns, net of investment expense and the assumed rate of inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. During fiscal year 2018, the School OPEB fund updated their investment strategy to a more long-term approach. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset class

Target allocation

Long-Term Expected Real Rate of Return*

Fixed income Domestic Stocks -- Large Cap Domestic Stocks -- Small Cap Int'l Stocks - Developed Mkt Int'l Stocks - Emerging Mkt Alternatives

30.00% 46.20%
1.30% 12.40%
5.10% 5.00%

(0.50)% 8.90%
13.20% 8.90%
10.90% 12.00%

Total

100.00%

*Net of Inflation
Discount rate: The discount rate has changed since the prior measurement date from 3.87% to 3.58%. In order to measure the total OPEB liability for the School OPEB Fund, a single equivalent interest rate of 3.58% was used as the discount rate. This is comprised mainly of the yield or index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA or higher (3.50% per the Bond Buyers Index). The projection of cash flows used to determine the discount rate assumed that contributions from members and from the employer will be made at the current level as averaged over the last five years, adjusted for annual projected changes in headcount. Projected future benefit payments for all current plan members were projected through 2119. Based on these assumptions, the OPEB plan's fiduciary net position was projected to be available to make OPEB payments for inactive employees through year 2026. Therefore, the calculated discount rate of 3.58% was applied to all periods of projected benefit payments to determine the total OPEB liability.

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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

Sensitivity of the School District's proportionate share of the net OPEB liability to changes in the discount rate: The following presents the School District's proportionate share of the net OPEB liability calculated using the discount rate of 3.58%, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point
lower (2.58%) or 1 percentage-point higher (4.58%) than the current discount rate:

School District's proportionate share of the Net OPEB Liability

1% Decrease (2.58%)

Current Discount Rate (3.58%)

1% Increase (4.58%)

$ 99,937,568 $

85,980,370 $ 74,626,815

Sensitivity of the School District's proportionate share of the net OPEB liability to changes in the healthcare cost trend rates: The following presents the School District's proportionate share of the net OPEB liability, as well as what the School District's proportionate share of the net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1percentage-point higher than the current healthcare cost trend rates:

School District's proportionate share of the Net OPEB Liability

1% Decrease

Current Healthcare Cost Trend Rate

1% Increase

$ 72,429,352 $

85,980,370 $ 103,191,190

OPEB plan fiduciary net position: Detailed information about the OPEB plan's fiduciary net position is available in the Comprehensive Annual Financial Report which is publicly available at https://sao.georgia.gov/comprehensive-annual-financial-reports.

NOTE 13: RETIREMENT PLANS
The School District participates in various retirement plans administered by the State of Georgia, as further explained below.

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)
Plan Description: All teachers of the School District as defined in O.C.G.A 47-3-60 and certain other support personnel as defined by O.C.G.A. 47-3-63 are provided a pension through the Teachers Retirement System of Georgia (TRS). TRS, a cost-sharing multiple-employer defined benefit pension plan, is administered by the TRS Board of Trustees (TRS Board). Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. The Teachers Retirement System of Georgia issues a publicly available separate financial report that can be obtained at www.trsga.com/publications.
Benefits P rovided: TRS provides service retirement, disability retirement, and death benefits. Normal retirement benefits are determined as 2% of the average of the employee's two highest paid consecutive years of service, multiplied by the number of years of creditable service up to 40 years. An employee is eligible for normal service retirement after 30 years of creditable service, regardless of age, or after 10 years of service and attainment of age 60. Ten years of service is required for disability and death benefits eligibility. Disability benefits are based on the employee's creditable service and compensation up to the time of disability. Death benefits equal the amount that would be payable to the employee's beneficiary had the employee retired on the date of death. Death benefits are based on the employee's creditable service and compensation up to the date of death.

Contributions: Per Title 47 of the O.C.G.A., contribution requirements of active employees and participating employers, as actuarially determined, are established and may be amended by the TRS Board. Pursuant to O.C.G.A. 47-3-63, the employer contributions for certain full-time public school support personnel are funded on behalf of the employer by the State of Georgia. Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees were required to contribute 6.00% of
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CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

their annual pay during fiscal year 2020. The School District's contractually required contribution rate for the year ended June 30, 2020 was 21.14% of annual School District payroll, of which 21.10% of payroll was required from the School District and 0.04% of payroll was required from the State. For the current fiscal year, employer contributions to the pension plan were $13,621,593 and $24,708 from the School District and the State, respectively.

PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM (PSERS)

P lan description: PSERS is a cost-sharing multiple-employer defined benefit pension plan established by the Georgia General Assembly in 1969 for the purpose of providing retirement allowances for public school employees who are not eligible for membership in the Teachers Retirement System of Georgia. The ERS Board of Trustees, plus two additional trustees, administers PSERS. Title 47 of the O.C.G.A. assigns the authority to establish and amend the benefit provisions to the State Legislature. PSERS issues a publicly available financial report that can be obtained at www.ers.ga.gov/financials.

Benefits provided: A member may retire and elect to receive normal monthly retirement benefits after completion of ten years of creditable service and attainment of age 65. A member may choose
to receive reduced benefits after age 60 and upon completion of ten years of service.

Upon retirement, the member will receive a monthly benefit of $15.25, multiplied by the number of years of creditable service. Death and disability benefits are also available through PSERS. Additionally, PSERS may make periodic cost-of-living adjustments to the monthly benefits. Upon termination of employment, member contributions with accumulated interest are refundable upon request by the member. However, if an otherwise vested member terminates and withdraws his/her member contribution, the member forfeits all rights to retirement benefits.

Contributions: The general assembly makes an annual appropriation to cover the employer contribution to PSERS on behalf of local school employees (bus drivers, cafeteria workers, and maintenance staff). The annual employer contribution required by statute is actuarially determined and paid directly to PSERS by the State Treasurer in accordance with O.C.G.A. 47-4-29(a) and 60(b). Contributions are expected to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

Individuals who became members prior to July 1, 2012 contribute $4 per month for nine months each fiscal year. Individuals who became members on or after July 1, 2012 contribute $10 per month for nine months each fiscal year. The State of Georgia, although not the employer of PSERS members, is required by statute to make employer contributions actuarially determined and approved and certified by the PSERS Board of Trustees. The current fiscal year contribution was $239,259.

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

At June 30, 2020, the School District reported a liability of $107,415,468 for its proportionate share of the net pension liability for TRS.

The TRS net pension liability reflected a reduction for support provided to the School District by the State of Georgia for certain public school support personnel. The amount recognized by the School District as its proportionate share of the net pension liability, the related State of Georgia support, and the total portion of the net pension liability that was associated with the School District were as follows:

School District's proportionate share of the net pension liability

$ 107,415,468

State of Georgia's proportionate share of the net pension liability associated with the School District

203,201

Total

$ 107,618,669

- 25 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

The net pension liability for TRS was measured as of June 30, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2018. An expected total pension liability as of June 30, 2019 was determined using standard roll-forward techniques. The School District's proportion of the net pension liability was based on contributions to TRS during the fiscal year ended June 30, 2019.

At June 30, 2019, the School District's TRS proportion was 0.499544%, which was a decrease of 0.001218% from its proportion measured as of June 30, 2018.

At June 30, 2020, the School District did not have a PSERS liability for a proportionate share of the net pension liability because of a Special Funding Situation with the State of Georgia, which is responsible for the net pension liability of the plan. The amount of the State's proportionate share of the net pension liability associated with the School District is $1,412,511.

The PSERS net pension liability was measured as of June 30, 2019. The total pension liability used to calculate the net pension liability was based on an actuarial valuation as of June 30, 2018. An expected total pension liability as of June 30, 2019 was determined using standard roll-forward techniques. The State's proportion of the net pension liability associated with the School District was based on actuarially determined contributions paid by the State during the fiscal year ended June 30, 2019.

For the year ended June 30, 2020, the School District recognized pension expense of $17,258,714 for TRS and $435,601 for PSERS and revenue of $33,521 for TRS and $435,601 for PSERS. The revenue is support provided by the State of Georgia. For TRS the State of Georgia support is provided only for certain support personnel.

At June 30, 2020, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

TRS Deferred Outflows of Resources

Deferred Inflows of Resources

Differences between expected and actual experience

$ 6,054,483 $

31,846

Changes of assumptions

10,307,916

-

Net difference between projected and actual earnings on pension plan investments

-

2,557,890

Changes in proportion and differences between School District contributions and proportionate share of contributions

-

1,472,511

School District contributions subsequent to the

measurement date

13,621,593

-

Total

$ 29,983,992 $ 4,062,247

- 26 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

The School District contributions subsequent to the measurement date for TRS are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Year Ended June 30:

TRS

2021 2022 2023 2024

$ 5,135,750 $ 500,507 $ 3,190,121 $ 3,473,774

Actuarial assum ptions: The total pension liability as of June 30, 2019 was determined by an actuarial valuation as of June 30, 2018, using the following actuarial assumptions, applied to all periods
included in the measurement:

Teachers Retirement System:
Inflation

2.50%

Salary increases

3.00% 8.75%, average, including inflation

Investment rate of return

7.25%, net of pension plan investment expense, including inflation

Post-retirement benefit increases 1.50% semi-annually

Post-retirement mortality rates were based on the RP-2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males) for service requirements and dependent beneficiaries. The RP-2000 Disabled Mortality table with future mortality improvement projected to 2025 with Society of Actuaries' projection scale BB (set forward two years for males and four years for females) was used for the death after disability retirement. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.

The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the assumed investment of return.
Public School Employees Retirement System:

Inflation

2.75%

Salary increases Investment rate of return

N/A
7.30%, net of pension plan investment expense, including inflation

Post-retirement benefit increases

1.50% semi-annually

Post-retirement mortality rates were based on the RP-2000 Blue-Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females) for the period after service retirements and for dependent beneficiaries. The RP-2000 Disabled Mortality projected to 2025 with projection scale BB (set forward 5 years for both males and females) was used for death after disability retirement. There is a margin for future mortality improvement in the tables used by the System. Based on the results of the most recent experience study adopted by the Board on December 17, 2015, the numbers of expected future deaths are 9-11% less than the actual number

- 27 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

of deaths that occurred during the study period for healthy retirees and 9-11% less than expected under the selected table for disabled retirees. Rates of mortality in active service were based on the RP-2000 Employee Mortality Table projected to 2025 with projection scale BB.
The actuarial assumptions used in the June 30, 2018 valuation were based on the results of an actuarial experience study for the period July 1, 2009 June 30, 2014, with the exception of the assumed investment rate of return.
The long-term expected rate of return on TRS and PSERS pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset class

TRS Target allocation

PSERS Target allocation

Long-term expected real rate of return*

Fixed income Domestic large stocks Domestic small stocks International developed market stocks International emerging market stocks Alternative

30.00% 51.00%
1.50% 12.40%
5.10% -

30.00% 46.20%
1.30% 12.40%
5.10% 5.00%

(0.10)% 8.90% 13.20% 8.90% 10.90% 12.00%

Total

100.00%

100.00%

* Rates shown are net of assumed rate of inflation.

Discount rate: The discount rate used to measure the total TRS pension liability was 7.25%. The discount rate used to measure the total PSERS pension liability was 7.30%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that employer and nonemployer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on those assumptions, the TRS and PSERS pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the School District's proportionate share of the net pension liability to changes in the discount rate: The following presents the School District's proportionate share of the net pension liability calculated using the discount rate of 7.25%, as well as what the School District's
proportionate share of the net pension liability would be if it were calculated using a discount rate that
is 1-percentage-point lower (6.25%) or 1-percentage-point higher (8.25%) than the current rate:

Teachers Retirement System:

1% Decrease (6.25%)

Current Discount Rate (7.25%)

1% Increase (8.25%)

School District's proportionate share of the net pension liability

$ 174,366,742 $

107,415,468 $ 52,357,731

Pension plan fiduciary net position: Detailed information about the pension plan's fiduciary net position is available in the separately issued TRS and PSERS financial report which is publicly available
at www.trsga.com/publications and www.ers.ga.gov/financials.

- 28 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

EXHIBIT "H"

DEFINED CONTRIBUTION PLAN

On July 1, 2006, the School District began an employer paid 403(b) annuity plan for the group of employees covered under the Public School Employees Retirement System (PSERS). Recognizing that PSERS was a limited defined contribution and defined benefit plan which did not provide for an adequate retirement for this group of employees, it was the School District's desire to supplement the retirement of this group.

The School District selected Lincoln Financial Group as the provider of this plan. For each employee covered under PSERS, the School District began contributing to the plan an amount equal to 3% of the employee's base pay.

The employee becomes vested in the plan with 5 years of experience. Employees who had already achieved 5 years of experience at the time the plan was implemented were vested upon enrollment.

Funds accumulated in the employer paid accounts are only available to the employee upon termination of employment and 5 years of service to Catoosa County Board of Education. If an employee terminates employment prior to achieving 5 years of service, funds paid on behalf of the non-vested employee are credited back to the School District.

Employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2020 2019 2018

100% 100% 100%

$

146,404.00

$

135,135.00

$

131,499.00

NOTE 14: TAX ABATEMENTS
Catoosa County enters into property tax abatement agreements with local businesses for the purpose of attracting or retaining businesses within their jurisdictions. The abatements may be granted to any business located within or promising to relocate to Catoosa County.
For the fiscal year ended June 30, 2020, Catoosa County abated property taxes due to the School District that were levied on August 31, 2019 and due on December 20, 2019 totaling $450,653. Included in that amount abated, the following are individual tax abatement agreements that each exceeded 10 percent of the total amount abated:
A property tax abatement to a local manufacturer of consumer goods for continued investment in operations and local employment. The abatement amounted to $205,754.
A property tax abatement to a local manufacturer of consumer goods for continued investment in operations and local employment. The abatement amounted to $86,278.
A property tax abatement to a local manufacturer of consumer goods for continued investment in operations and local employment. The abatement amounted to $17,594.
A property tax abatement to a local manufacturer of consumer goods for continued investment in operations and local employment. The abatement amounted to $141,027.

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CATOOSA COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY TEACHERS RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

SCHEDULE "1"

Year Ended
2020 2019 2018 2017 2016 2015

School District's proportion of the
net pension liability

School District's proportionate share of
the net pension liability

State of Georgia's proportionate share of the
net pension liability associated with the School
District

0.499544% $ 0.500762% $ 0.504993% $ 0.511997% $ 0.519443% $ 0.528899% $

107,415,468 $ 92,952,154 $ 93,854,504 $
105,630,690 $ 79,080,039 $ 66,819,412 $

203,201 177,268 177,490 194,964 146,607 125,073

Total
$ 107,618,669 $ 93,129,422 $ 94,031,994 $ 105,825,654 $ 79,226,646 $ 66,944,485

School District's covered payroll

$

61,087,120

$

59,773,765

$

58,135,486

$

56,273,693

$

54,931,930

$

54,125,004

School District's proportionate share of the net pension liability as a percentage of its
covered payroll

Plan fiduciary net position as a
percentage of the total pension liability

175.84% 155.51% 161.44% 187.71% 143.96% 123.45%

78.56% 80.27% 79.33% 76.06% 81.44% 84.03%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 31 -

CATOOSA COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY PUBLIC SCHOOL EMPLOYEES RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

SCHEDULE "2"

Year Ended
2020 2019 2018 2017 2016 2015

School District's proportion of the
net pension liability

School District's proportionate share of
the net pension liability

State of Georgia's proportionate share of the
net pension liability associated with the School
District

0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $ 0.00% $

-

$

-

$

-

$

-

$

-

$

-

$

1,412,511 $ 1,378,944 $ 1,184,443 $ 1,643,699 $ 1,061,104 $
958,505 $

Total
1,412,511 1,378,944 1,184,443 1,643,699 1,061,104
958,505

School District's covered payroll

$

2,566,076

$

2,409,737

$

2,181,359

$

2,231,706

$

2,160,106

$

2,125,207

School District's proportionate share of the net pension liability as a percentage of its covered
payroll

Plan fiduciary net position as a
percentage of the total pension liability

N/A

85.02%

N/A

85.26%

N/A

85.69%

N/A

81.00%

N/A

87.00%

N/A

88.29%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 32 -

CATOOSA COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF PROPORTIONATE SHARE OF THE NET OPEB LIABILITY
SCHOOL OPEB FUND FOR THE YEAR ENDED JUNE 30

SCHEDULE "3"

Year Ended
2020 2019 2018

School District's proportion of the net
OPEB liability

School District's proportionate share of the net OPEB liability

State of Georgia's proportionate share of the
net OPEB liability associated with the
School District

0.700614% $ 0.701020% $ 0.701443% $

85,980,370 $ 89,097,491 $ 98,552,459 $

-

$

-

$

-

$

Total
85,980,370 89,097,491 98,552,459

School District's covered-employee
payroll

$

30,026,520

$

30,011,398

$

29,213,712

School District's proportionate share of the
net OPEB liability as a percentage of its covered-
employee payroll

Plan fiduciary net position as a
percentage of the total OPEB liability

286.35% 296.88% 337.35%

4.63% 2.93% 1.61%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 33 -

CATOOSA COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS TEACHERS RETIREMENT SYSTEM OF GEORGIA
FOR THE YEAR ENDED JUNE 30

SCHEDULE "4"

Year Ended
2020 2019 2018 2017 2016 2015 2014 (1) 2013 (1) 2012 (1) 2011 (1)

Contractually required contribution

Contributions in relation to the contractually required
contribution

$

13,621,593 $

$

12,743,116 $

$

10,028,866 $

$

8,280,396 $

$

8,015,839 $

$

7,210,177 $

$

6,645,843 $

$

6,290,446 $

$

5,663,053 $

$

5,671,299 $

13,621,593 12,743,116 10,028,866
8,280,396 8,015,839 7,210,177 6,645,843 6,290,446 5,663,053 5,671,299

Contribution deficiency (excess)

School District's covered payroll

- $ - $ - $ - $ - $ - $ - $ - $ - $ - $

64,552,736 61,087,120 59,773,765 58,135,486 56,276,693 54,931,930 54,125,004 55,132,412 55,089,674 55,165,271

Contribution as a percentage of covered
payroll
21.10% 20.86% 16.78% 14.24% 14.24% 13.13% 12.28% 11.41% 10.28% 10.28%

(1) For years ended 2014 and earlier, the report contractually required contribution included payments on behalf of the State District by the Georgia Department of Education.

- 34 -

CATOOSA COUNTY BOARD OF EDUCATION REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CONTRIBUTIONS SCHOOL OPEB FUND
FOR THE YEAR ENDED JUNE 30

SCHEDULE "5"

Year Ended
2020 2019 2018 2017

Contractually required contribution

Contributions in relation to the contractually required
contribution

Contribution deficiency (excess)

School District's covered-employee
payroll

$

2,336,078 $

2,336,078 $

$

3,773,293 $

3,773,293 $

$

3,633,316 $

3,633,316 $

$

3,657,379 $

3,657,379 $

-$ -$ -$ -$

34,715,953 30,026,520 30,011,398 29,213,712

Contribution as a percentage of covered-
employee payroll
6.73% 12.57% 12.11% 12.52%

This schedule is intended to show information for 10 years. Additional years will be displayed as they become available.

- 35 -

CATOOSA COUNTY BOARD OF EDUCATION NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2020

SCHEDULE "6"

Teachers Retirement System
Changes of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP 2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to more closely reflect actual experience. In 2010, assumed rates of salary increase were adjusted to more closely reflect actual and anticipated experience.
On November 18, 2015, the -Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, disability, withdrawal and salary increases. The expectation of retired life mortality was changed to RP 2000 White Collar Mortality Table with future mortality improvement projected to 2025 with the Society of Actuaries' projection scale BB (set forward one year for males).
On May 15, 2019, the Board adopted recommended changes from the smoothed valuation interest rate methodology that has been in effect since June 30, 2009, to a constant interest rate method. In conjunction with the methodology, the long-term assumed rate of return in assets (discount rate) has been changed from 7.50% to 7.25%, and the assumed annual rate of inflation has been reduced from 2.75% to 2.50%.
Employees' Retirement System
Changes of benefit terms: A new benefit tier was added for members joining the System on and after July 1, 2009. A one-time 3% payment was granted to certain retirees and beneficiaries effective July 2016. $RQHWLPHSD\PHQWZDVJUDQWHGWRFHUWDLQUHWLUHHVDQGEHQHILFLDULHVHIIHFWLYH-XO\
Changes of assumptions: On December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement, withdrawal and salary increases.
On March 15, 2018, the Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for the June 30, 2017 actuarial valuation. In addition, based on the Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date.
Public School Employees Retirement System
Changes of assumptions: In 2010 and later, the expectation of retired life mortality was changed to the RP 2000 Mortality Tables rather than the 1994 Group Annuity Mortality Table, which was used prior to 2010. In 2010, rates of withdrawal, retirement, disability and mortality were adjusted to PRUHFORVHO\UHIOHFWDFWXDOH[SHULHQFH
On-December 17, 2015, the Board adopted recommended changes to the economic and demographic assumptions utilized by the System. Primary among the changes were the updates to rates of mortality, retirement and withdrawal. The expectation of retired life mortality was changed to the RP 2000 Blue Collar Mortality Table projected to 2025 with projection scale BB (set forward 3 years for males and 2 years for females).
On March 15, 2018, the Board adopted a new funding policy. Because of this new funding policy, the assumed investment rate of return was reduced from 7.50% to 7.40% for June 30, 2017 actuarial valuation. In addition, based on the Board's new funding policy, the assumed investment rate of return was further reduced by 0.10% from 7.40% to 7.30% as of the June 30, 2018 measurement date.
School OPEB Fund
Changes of benefit terms: There have been no changes in benefit terms.
Changes in assumptions: The June 30, 2017 actuarial valuation was revised, for various factors, including the methodology used to determine how employees and retirees were assigned to each of the OPEB Funds and anticipated participation percentages. Current and former employees of State organizations (including technical colleges, community service boards and public health departments) are now assigned to State OPEB fund based on their last employer payroll location; irrespective of retirement affiliation.
The discount rate was updated from 3.07% as of June 30, 2016 to 3.58% as of June 30, 2017 to 3.87% as of June 30, 2018, and back to 3.58% as of June 30, 2019.

- 36 -

CATOOSA COUNTY BOARD OF EDUCATION GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL
YEAR ENDED JUNE 30, 2020

SCHEDULE "7"

REVENUES
Property Taxes Sales Taxes State Funds Federal Funds Charges for Services Investment Earnings Miscellaneous
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 Community Services Food Services Operation
Debt Service
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Other Sources Capital Leases Other Uses
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning
Fund Balances - Ending

NONAPPROPRIATED BUDGETS

ORIGINAL (1)

FINAL (1)

ACTUAL AMOUNTS

VARIANCE OVER/UNDER

$

30,147,460 $

30,147,460 $

31,417,257 $

625,000

625,000

946,293

79,825,415

81,027,957

80,534,395

8,848,300

9,474,066

7,356,946

1,916,507

1,916,507

2,159,497

3,104

3,104

378,006

931,800

931,800

2,774,656

122,297,586

124,125,894

125,567,050

1,269,797 321,293 (493,562)
(2,117,120) 242,990 374,902
1,842,856
1,441,156

81,213,046
5,165,480 3,739,182 1,660,870 1,279,022 8,398,921
756,368 8,826,713 5,480,506
928,678 182,724 423,054 6,148,388
-
124,202,952
(1,905,366)

82,597,820
5,440,931 4,366,184 1,670,870 1,447,123 8,401,694
756,568 9,443,598 5,833,742
928,778 182,724 423,054 6,148,388
-
127,641,474
(3,515,580)

79,764,689
6,183,662 4,083,235 1,907,105 1,904,406 8,488,878
742,213 9,579,641 5,790,505
574,932 843,918 511,101 4,859,033
10,550
125,243,868
323,182

2,833,131
(742,731) 282,949 (236,235) (457,283) (87,184)
14,355 (136,043)
43,237 353,846 (661,194) (88,047) 1,289,355 (10,550)
2,397,606
3,838,762

435,840 -
(1,286,470)
(850,630)
(2,755,996)
20,688,036

435,840 -
(1,286,470)
(850,630)
(4,366,210)
20,688,036

29,085 (700,000)
(670,915)
(347,733)
20,693,558

(435,840) 29,085
586,470
179,715
4,018,477
5,522

$

17,932,040 $

16,321,826 $

20,345,825 $

4,023,999

Notes to the Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual
(1) Original and Final Budget amounts do not include the budgeted revenues or expenditures of the various principal accounts. The actual revenues and expenditures of the various principal accounts are $2,611,753 and $2,642,618, respectively.
The accompanying schedule of revenues, expenditures and changes in fund balances budget and actual is presented on the modified accrual basis of accounting which is the basis of accounting used in the presentation of the fund financial statements.

See notes to the basic financial statements.

- 37 -

CATOOSA COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 30, 2020

FUNDING AGENCY PROGRAM/GRANT
Agriculture, U. S. Department of Child Nutrition Cluster Pass-Through From Georgia Department of Education Food Services School Breakfast Program National School Lunch Program
Total U. S. Department of Agriculture
Education, U. S. Department of Pass-Through From Georgia Department of Education Special Education Grants to States Grants to States Preschool Grants Preschool Grants
Total Special Education Cluster
Other Programs Pass-Through From Georgia Department of Education Career and Technical Education - Basic Grants to States Education for Homeless Children and Youth English Language Acquisition State Grants Student Support and Academic Enrichment Program Student Support and Academic Enrichment Program Supporting Effective Instruction State Grants Supporting Effective Instruction State Grants Title I Grants to Local Educational Agencies Title I Grants to Local Educational Agencies
Total Other Programs
Total U. S. Department of Education
Defense, U. S. Department of Department of the Army R.O.T.C. Program

CFDA NUMBER
10.553 10.555
84.027 84.027 84.173 84.173
84.048 84.196 84.365 84.424A 84.424A 84.367 84.367 84.010 84.010

SCHEDULE "8"

PASSTHROUGH
ENTITY ID
NUMBER

EXPENDITURES IN PERIOD

205GA324N1099 $ 205GA324N1099

625,017 3,229,265
3,854,282

H027A180073 H027A190073 H173A180081 H173A190081
V048A190010 S196A190011 S365A190010 S424A180011 S424A190011 S367A180001 S367A190001 S010A180010 S010A190010

253,196 1,725,657
4,070 56,086
2,039,009
99,671 28,998 14,728
2,859 121,280
3,486 302,599 162,186 1,762,504
2,498,311
4,537,320
158,520

Total Expenditures of Federal Awards

$

8,550,122

Notes to the Schedule of Expenditures of Federal Awards
Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of the Catoosa County Board of Education (the "Board") under programs of the federal government for the year ended June 30, 2020. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Board, it is not intended to and does not present the financial position or changes in net position of the Board.
Note 2. Summary of Significant Accounting Policies
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Note 3. Indirect Cost Rate
The Board has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.

See notes to the basic financial statements.

- 38 -

CATOOSA COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30, 2020

SCHEDULE "9"

AGENCY/FUNDING
GRANTS Bright From the Start: Georgia Department of Early Care and Learning Pre-Kindergarten Program
Education, Georgia Department of Quality Basic Education Direct Instructional Cost Kindergarten Program Kindergarten Program - Early Intervention Program Primary Grades (1-3) Program Primary Grades - Early Intervention (1-3) Program Upper Elementary Grades (4-5) Program Upper Elementary Grades - Early Intervention (4-5) Program Middle School (6-8) Program High School General Education (9-12) Program Vocational Laboratory (9-12) Program Students with Disabilities Gifted Student - Category VI Remedial Education Program Alternative Education Program English Speakers of Other Languages (ESOL) Media Center Program 20 Days Additional Instruction Staff and Professional Development Principal Staff and Professional Development Indirect Cost Central Administration School Administration Facility Maintenance and Operations Mid-term Adjustment Hold-Harmless Amended Formula Adjustment Charter System Adjustment Categorical Grants Pupil Transportation Regular Nursing Services Education Equalization Funding Grant Other State Programs Food Services Hygiene Products in Georgia Schools Math and Science Supplements Preschool Disability Services Pupil Transportation - State Bonds School Security Grant Teachers Retirement Tuition for Multiple Disabilities Vocational Education Vocational Construction Related Equipment - State Bonds Vocational Supervisors
Georgia State Financing and Investment Commission Reimbursement on Construction Projects
Office of the State Treasurer Public School Employees Retirement
Technical College System of Georgia Operation of Career Academy

GOVERNMENTAL FUND TYPES

CAPITAL

GENERAL

PROJECTS

FUND

FUND

TOTAL

$

1,212,245 $

- $

1,212,245

3,108,810 1,105,979 7,589,318 1,997,496 3,938,700 1,067,289 7,325,386 6,562,236 2,233,529 15,022,174 4,194,727 1,724,244
536,177 192,020 1,372,021 403,573 244,584
4,675
2,319,334 2,888,798 2,773,748
226,745 (1,029,693) 1,117,798
883,873 217,640 9,433,015
134,916 3,489
60,376 242,054 154,440 454,660
24,708 76,043 219,729 120,000 28,280
-
239,259
110,000

-

3,108,810

-

1,105,979

-

7,589,318

-

1,997,496

-

3,938,700

-

1,067,289

-

7,325,386

-

6,562,236

-

2,233,529

-

15,022,174

-

4,194,727

-

1,724,244

-

536,177

-

192,020

-

1,372,021

-

403,573

-

244,584

-

4,675

-

2,319,334

-

2,888,798

-

2,773,748

-

226,745

-

(1,029,693)

-

1,117,798

-

883,873

-

217,640

-

9,433,015

-

134,916

-

3,489

-

60,376

-

242,054

-

154,440

-

454,660

-

24,708

-

76,043

-

219,729

-

120,000

28,280

1,102,786 -

1,102,786 239,259 110,000

$

80,534,395 $

1,102,786 $

81,637,181

See notes to the basic financial statements.

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CATOOSA COUNTY BOARD OF EDUCATION SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS
YEAR ENDED JUNE 30, 2020

SCHEDULE "10"

PROJECT ESPLOST IV:

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED IN PRIOR YEARS (3) (4)

TOTAL COMPLETION
COST

EXCESS PROCEEDS NOT
EXPENDED

Installing roofing, sprinklers, HVAC, paving,

plumbing, electrical wiring and fixtures,

painting, fences, alarms, telephone

upgrading, equipping, lighting, and general

land improvements;

$ 5,150,000 $

9,995,350 $

3,150,099 $

5,995,351 $

- $

-

ESPLOST V:

(1) Acquiring safety and security materials

and devices in the attempt to secure the

safety of students, employees and

property;

5,514,000

2,050,287

44,439

2,005,848

-

-

(2) Acquiring or purchasing of motor

vehicles, buses, vans, or other

transportation apparatus;

3,520,000

1,051,053

49,216

1,001,837

-

-

(3) Acquiring, adding-on, constructing,

installing, painting, refurbishing and

replacing existing buildings, classrooms,

ceilings, flooring, walls, hallways, roofs,

lunchrooms, media centers, gyms, sporting

fields and complexes, playground

equipment, and parking lots;

47,666,000

25,851,674

1,449,817

21,276,857

-

-

(4) Acquiring, replacing and/or refreshing

instructional and technological materials

and devices, including but not limited to

textbooks and student learning and

response devices;

10,400,000

13,152,281

64,378

9,962,903

-

-

(5) Acquiring land and buildings for

schools, school campuses, maintenance

facilities, training, and sports facilities;

2,000,000

84,074

-

84,074

-

-

(6) Acquiring, constructing or improving

covers, bleachers, tracks, sports fields and

courts, facilities which will be jointly used

for instructional sports and physical

education, accessory buildings, and other

energy-efficient or weather-protective

structures;

7,000,000

13,890,744

18,881

10,746,863

-

-

(7) Purchasing and replacing furniture,

kitchen equipment and machines, sinks,

lab equipment, cabinetry, electronic

systems, and other educationally related

personally.

2,900,000

3,329,228

-

204,228

-

-

ESTIMATED COMPLETION
DATE
June 2020 July 2022 July 2022
July 2022 July 2022 July 2022
July 2022 July 2022

$ 84,150,000 $

69,404,691 $

4,776,830 $

51,277,961 $

- $

-

(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 projects. 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 projects and retire associated debt. Amounts expended for these projects may include sales tax proceeds, state, local property taxes and/or other funds over the life of the projects.

(4) In addition to the expenditures shown above, the School District has incurred interest to provide advance funding for the above projects as follows:

ESPLOST IV

ESPLOST V

Prior Years

$ 5,333,766

$

4,691,722

Current Year

-

1,449,250

Total

$ 5,333,766

$

6,140,972

See notes to the basic financial statements.

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SECTION II COMPLIANCE AND INTERNAL CONTROL REPORTS

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Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Catoosa County Board of Education
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Catoosa County Board of Education (School District), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the School District's basic financial statements, and have issued our report thereon dated March 29, 2021.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the School District's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the School District's internal control. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the School District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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 or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the School District's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the School District's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,

March 29, 2021

Greg S. Griffin State Auditor

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Greg S. Griffin
STATE AUDITOR
(404) 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
270 Washington Street, S.W., Suite 4-101 Atlanta, Georgia 30334-8400

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

The Honorable Brian P. Kemp, Governor of Georgia Members of the General Assembly of the State of Georgia Members of the State Board of Education
and Superintendent and Members of the Catoosa County Board of Education
Report on Compliance for Each Major Federal Program
We have audited the Catoosa County Board of Education (School District) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020. The School District's major federal programs are identified in the Summary of Auditor's Results section of the accompanying Schedule of Findings and Questioned Costs.
Management's Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the School District's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the School District'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 on compliance for each major federal program. However, our audit does not provide a legal determination of the School District's compliance.

(This page left intentionally blank)

Opinion on Each Major Federal Program
In our opinion, the School District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020.
Report on Internal Control over Compliance
Management of the School District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the School District's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the School District's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Respectfully submitted,

March 29, 2021

Greg S. Griffin State Auditor

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

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CATOOSA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2020
PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
No matters were reported.
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
No matters were reported.

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SECTION IV FINDINGS AND QUESTIONED COSTS

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CATOOSA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2020

I SUMMARY OF AUDITOR'S RESULTS

Financial Statements
Type of auditor's report issued: Governmental Activities; All Major Funds; Aggregate Remaining Fund Information

Unmodified

Internal control over financial reporting: Material weakness identified? Significant deficiency identified?

No None Reported

Noncompliance material to financial statements noted:

No

Federal Awards

Internal Control over major programs: Material weakness identified? Significant deficiency identified?

No None Reported

Type of auditor's report issued on compliance for major programs: All major programs

Unmodified

Any audit findings disclosed that are required to be reported in

accordance with 2 CFR 200.516(a)?

No

Identification of major programs: CFDA Numbers

Name of Federal Program or Cluster

10.553, 10.555

Child Nutrition Cluster

Dollar threshold used to distinguish between Type A and Type B programs:

$750,000

Auditee qualified as low-risk auditee?

Yes

II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS No matters were reported.

III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported.