Gl!) Agoo . RI E2.6 C4-g IClQ8-QQ AUDIT REPORT CHARLTON COUNTY BOARD OF EDUCATION FOLKSTON, GEORGIA YEAR ENDED JUNE 30, 1999 '------------------~j STATE OF GEORGIA DEPARTMENT OF AUDITS AND ACCOUNTS 254 WASHINGTON STREET ATLANTA, GEORGIA 30334-8400 CHARLTON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS EXHffiITS GENERAL PURPOSE FINANCIAL STATEMENTS COMBINED STATEMENTS - OVERVIEW A COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP 2 B COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES 4 C COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS 7 D NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS 8 ADDITIONAL FINANCIAL INFORMATION COMBINING STATEMENTS SPECIAL REVENUE FUND E COMBINING BALANCE SHEET 18 F COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 19 CAPITAL PROJECTS FUND G COMBINING BALANCE SHEET 20 H COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 21 DEBT SERVICE FUND I COMBINING BALANCE SHEET 22 J COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES 23 SCHEDULES 1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 24 2 SCHEDULE OF STATE REVENUE 26 3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS 27 CHARLTON COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS - SECTION I FINANCIAL ADDITIONAL FINANCIAL INFORMATION SCHEDULES 4 SCHEDULE OF EXPENDITURES LOTTERY PROGRAMS 28 ANALYSIS OF MINIMUM EXPENDITURE REQUIREMENTS GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS 5 OVERALL 29 6 BY PROGRAM 30 SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS SECTION IV FINDINGS AND QUESTIONED COSTS SCHEDULE OF FINDINGS AND QUESTIONED COSTS SECTION I FINANCIAL 'V. RllSSELL HINTON STATE AUDITOR (404j 6562174 DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S.W.. Suite 214 Atlanta. Georgia 30334-8400 March 30, 2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Charlton County Board of Education INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Ladies and Gentlemen: We have audited the accompanying general purpose financial statements of the Charlton County Board of Education, as of and for the year ended June 30, 1999, as listed in the table of contents. These general purpose financial statements are the responsibility ofthe Charlton County Board of Education's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in the notes to the general purpose financial statements, the Board's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows: * The general purpose financial statements of the Board did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board which should be included to conform to generally accepted accounting principles. 99ARL-13 * School activity accounts maintained at the individual schools are not included in the general purpose financial statements. To conform to generally accepted accounting principles, these accounts should be included in the general purpose financial statements. * The Board did not recognize as expenditures, in the year ended June 30, 1999, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 1999. Also funds received, subsequent to June 30, 1999, from the Georgia Department of Education for the State's share ofthese unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were improperly recorded in the year ended June 30, 1999. To conform to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed. The aggregate effects on the general purpose financial statements of these variances or omissions have not been determined, but are believed to be material. In our opinion, except for the effects on the general purpose financial statements of the matters referred to in the preceding paragraph, the general purpose financial statements referred to above present fairly, in all material respects, the financial position of the Charlton County Board of Education as of June 30, 1999, and the results of its operations for the year then ended, in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated March 30, 2000, on our consideration of the Charlton County Board of Education's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. Our audit was performed for the purpose of forming an opinion on the general purpose financial statements of the Charlton County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through J) and the financial schedules (Schedules 1 through 6), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-l33, Audits ofStates, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the general purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such information is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. 99ARL-l3 A copy of this report has been filed as a pennanent record in the office of the State Auditor and made available to the press of the State, as provided for by Official Code of Georgia Annotated Section 50-6-24. Respectfully submitted, k).~ R ssell W. Hinton State Auditor RWH:gp 99ARL-13 CHARLTON COUNTY BOARD OF EDUCAnON CHARLTON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUP JUNE 30, 1999 . ASSETS Cash and Cash Equivalents Accounts Receivable Inventories Food Donated Commodities Purchased Food Amount Available in Debt Service Fund Amount to be Provided in Future Years For Payment of Bond Debt GENERAL FUND GOVERNMENTAL FUND TYPES SPECIAL CAPITAL REVENUE PROJECTS FUND FUND $ 1,407,207.21 $ 214,080.14 $ 2,063,184.13 78,065.73 147,728.70 394,681.05 14,518.78 7,759,58 Total Assets $ 1,485,272,94 $ 384,087.20 $ ==2;;l,,4=5=7,8=65=.=18= LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable Salaries Payable Expired Grant Balances Payable Contracts Payable Retainages Payable General Obligation Bonds Payable Total Liabilities FUND EQUITY Fund Balances Reserved For Continuation of Federal Programs For Debt Service For Inventories Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity $ 32,184.90 128,063.82 $ 526,29 369.20 $ 100,865.10 $ 526.29 $ 160,617.92 $ 100,865.10 $ 30,968.78 $ 1,484,746.65 $ 1,484,746.65 $ 14,518.78 7,759.58 $ 170,222.14 223,469,28 $ 1,844,771.83 509,282.25 2,946.00 0.00 2,357,000,08 Total Liabilities and Fund Equity $ 1,485,272.94 $ The notes to the general purpose financial statements are an integral part of this statement. -2- 384,087.20 $ """",=2;;l,,4,,;,;5=7,!,;;,8=65;;,;,',;,;18== EXHIBIT "A" DEBT SERVICE FUND ACCOUNT GROUP GENERAL LONG-TERM DEBT TOTALS (Memorandum Only) JUNE 30,1999 JUNE 30,1998 $ 137,076.71 $ 3,821,548.19 $ 4,939,286.67 11,067.13 631,542.61 396,165.07 14,518.78 7,759.58 16,654.17 6,695.36 $ 148,143.84 148,143.84 145,630.85 3,561,856.16 3,561,856.16 4,119,369.15 $ 148,143.84 $ 3,710,000.00 $ 8,185,369.16 $ 9,623,801.27 $ 32,184.90 $ 25,426.16 128,063.82 112,733.06 895.49 112.21 261,529.08 100,865.10 195,867.10 $ 3,710,000.00 3,710,000.00 4,265,000.00 $ 3,710,000.00 $ 3,972,009.31 $ 4,860,667.61 $ 148,143.84 0.00 $ 148,143.84 $ 30,968.78 $ 418.50 148,143.84 145,630.85 14,518.78 7,759.58 1,844,771.83 509,282.25 2,946.00 16,654.17 6,695.36 2,991,881.44 299,852.99 1,654,968.79 1,302,000.35 $ 4,213,359.85 $ 4,763,133.66 $ 148,143.84 $ 3,710,000.00 $ 8,185,369.16 $ 9,623,801.27 -3- CHARLTON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1999 REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay Debt Service Principal Interest Paying Agent Fees Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Accrued Interest on Bonds Sold Proceeds from General Obligation Bonds Par Value Operating Transfers In Operating Transfers Out Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1 Food Inventory - Net Change in Period Donated Commodities Purchased Food GENERAL FUND SPECIAL REVENUE FUND $ 7,440,209.74 $ 514,346.09 107,705,55 1,221,600.71 2,263,478.38 71,755.29 213,520.56 $ 9,883,148.96 $ 1,949,467,36 $ 5,857,275.73 $ 332,327,19 329,459.78 318,709.86 276,020.30 742,676.75 59,418.38 865,923.39 597,725.49 26,734.00 715.62 825,050.82 218,802,36 96,887.07 6,603.58 37,290.30 639.00 115.50 164.49 725,761.20 $ 9,406,986.49 $ 1,911,314,32 $ 476,162.47 $ 38,153.04 $ $ -146,865.96 $ -146,865.96 $ $ 329,296.51 $ 1,155,450.14 16,069.17 16,069.17 54,222.21 170,318.24 -2,135.39 1,064.22 FUND BALANCE JUNE 30 $ 1,484,746.65 $ 223,469.28 The notes to the general purpose financial statements are an integral part of this statement. -4- EXHIBIT"B" CAPITAL PROJECTS FUND DEBT SERVICE FUND TOTALS (Memorandum Only) YEAR ENDED JUNE 30,1999 JUNE 30,1998 $ 541,030.20 194,649.66 $ 274,359.37 $ 1,010,039.23 $ $ 741,077.15 6,491.21 8,495,586.03 $ 1,329,306.26 3,199,205.19 566,126.43 9,735,927.18 1,078,125.95 2,787,995.86 368,257.70 747,568.36 $ 13,590,223.91 $ 13,970,306.69 $ 2,075,570.37 $ $ 2,075,570.37 $ $ -1,065,531.14 $ $ 6,682,326.55 $ 6,097,395.78 551,129.55 426,346.85 325,313.44 313,310.60 743,315.75 59,418.38 865,923.39 597,840.99 26,898.49 725,761.20 2,076,285.99 405,644.18 325,161.94 374,007.48 342,932.80 633,564.32 156,710.56 739,182.79 445,999.30 27,884.77 634,520.95 3,487,764.42 555,000.00 182,265.42 7,789.95 555,000.00 182,265.42 7,789.95 175,000.00 79,300.00 715.15 745,055.37 $ 14,138,926.55 $ 13,925,784.44 2,512.99 $ -548,702.64 $ 44,522.25 $ 130,796.79 $ 130,796.79 $ -934,734.35 $ 3,291,734.43 $ 3,811.35 $ 146,865.96 -146,865.96 3,220,000.00 798,803.34 -798,803.34 $ 0.00 $ 3,223,811.35 2,512.99 $ 145,630.85 -548,702.64 $ 4,763,133.66 3,268,333.60 1,502,043.20 -2,135.39 1,064.22 -2,903.76 -4,339.38 $ 2,357,000.08 $ 148,143.84 $ 4,213,359.85 $ 4,763,133.66 - 5- CHARLTON COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL - (NON-GAAP BASIS) GENERAL AND SPECIAL REVENUE FUNDS YEAR ENDED JUNE 30,1999 EXHIBIT"C" REVENUES State Funds Federal Funds Taxes Other Funds Total Revenues EXPENDITURES Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration School Administration Business Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation Capital Outlay Total Expenditures Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES) Other Sources Other Uses Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses FUND BALANCE JULY 1, 1998 Adjustments Food Inventory - Net Change in Period Donated Commodities Purchased Food GENERAL FUND ACTUAL (BUDGET BUDGET BASIS) $ 7,288,922.66 $ 7,440,209.74 54,157.00 107,705.55 2,184,208.86 2,263,478,38 50,000.00 71,755.29 $ 9,577,288,52 $ 9,883,148.96 $ 6,112,221.54 $ 5,857,275.73 274,683.55 336,455.50 364,958.30 293,158,60 665,015.73 72,499.15 839,103.85 544,441.33 26,734.00 332,327,19 329,459.78 318,709.86 276,020.30 742,676.75 59,418.38 865,923,39 597,725.49 26,734.00 300;000.00 715.62 $ 9,829,271.55 $ 9,406,986.49 $ -251,983.03 $ 476,162.47 $ -146,865.96 $ -146,865.96 $ -251,983.03 $ 329,296,51 1,611,705.45 1,155,450.14 -11,056.24 FUND BALANCE JUNE 30,1999 $ 1,348,666.18 $ 1,484,746.65 SPECIAL REVENUE FUND ACTUAL (BUDGET BUDGET BASIS) $ 567,578.41 $ 514,346.09 1,313,976.20 1,221,600.71 195,174.39 213,520.56 $ 2,076,729.00 $ 1,949,467.36 $ 1,043,287.96 $ 825,050.82 147,643,00 126,076.92 1,968.00 52,861,00 119.00 218,802.36 96,887.07 6,603.58 37,290.30 639.00 625,00 400.00 1,700.00 677,684.82 115.50 164.49 725,761.20 $ 2,052,365.70 $ 1,911,314.32 $ 24,363.30 $ 38,153.04 $ 16,069.17 $ 16,069.17 $ 24,363.30 $ 54,222.21 159,649.49 170,318.24 -7,894.21 -2,135.39 1,064.22 $ 176,118.58 $ 223,469.28 The notes to the general purpose financial statements are an integral part of this statement. -7- CHARLTON COUNTY BOARD OF EDUCAnON EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30,1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REPORTING ENTITY The Charlton County Board of Education (Board) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The Board is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the Board is a primary government and consists of all the organizations that compose its legal entity. FUND ACCOUNTING The Board uses funds and an account group to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain governmental functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. An account group is a financial reporting device designed to provide accountability for certain assets and liabilities that are not recorded in the funds because they do not directly affect expendable available financial resources. General Fixed Assets are recorded as expenditures in the various funds at the time of purchase. A General Fixed Assets Account Group is not presently maintained by the Board. To confonn to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types. Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these financial statements. To confonn to generally accepted accounting principles, these accounts should be recorded in the general purpose financial statements. The general purpose financial statements account for all State, Federal, Taxes and Other funds under control oftne Board, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows: GOVERNMENTAL FUND TYPES - are used to account for all or most of a Board's educational activities. Governmental Fund Types include: GENERAL FUND - the fund used to account for all financial resources ofthe Board except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education. SPECIAL REVENUE FUND - the fund used to account for the proceeds ofspecific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives. -8- CHARLTON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CAPITAL PROJECTS FUND ., the fund used to account for financial resources to be used for the acquisition or construction of major capital facilities. DEBT SERVICE FUND - the fund used to account for the accumulation of resources for, and the payment of, general long-term principal, interest and paying agent fees. ACCOUNT GROUP GENERAL LONG-TERM DEBT ACCOUNT GROUP - A financial reporting device used to account for general obligation debt outstanding. BASIS OF ACCOUNTING The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources. Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group. Governmental funds are accounted for using the modified accrual basis of accounting under which: Revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount ofthe transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities ofthe current period. Those revenues considered susceptible to accrual are property taxes, local option sales taxes, intergovernmental grants and investment income. Expenditures are generally recognized when the related fund liability is incurred. A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 1999, a substantial number of personnel ofthe Board were employed for a one hundred and ninety day period beginning in late August 1998 and ending in early June 1999. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 1998 and ending in August 1999. State grants to fund the State's share ofthese contracts were disbursed from the Georgia Department of Education to the Board in the same twelve months. As of June 30, 1999, compensation under these employment -9- CHARLTON COUNTY BOARD OF EDUCATION EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30.1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES contracts had been earned, but two of the twelve monthly payments, due for July and August 1999, had not been made. Payments for these two months were made and recorded as expenditures by the Board subsequent to June 30, 1999. Also, the State's portion of the compensation paid in July and August 1999 was received and recorded as revenue in the fiscal year subsequent to June 30, 1999. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 1998, were recorded in the year ended June 30, 1999. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed. BUDGET The Charlton County Board of Education's budget is a complete financial plan for the Board's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure of the budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level ofbudget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles. The budget process begins when the Board's administration prepares a tentative budget for the Board's approval. After approval of this tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting ofthe Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167, to the Georgia Department ofEducation. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end. CASH AND CASH EQUIVALENTS COMPOSITION OF DEPOSITS Cash and cash equivalents consist of deposits in authorized financial institutions. Georgia Laws authorize the Board to deposit its funds in one or more solvent banks, insured Federal savings and loan associations, or insured State chartered building and loan associations. RECEIVABLES Receivables consist of grant reimbursements due on Federal, State or other grants for expenditures made but not reimbursed and other receivables disclosed from information available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables. - 10- CHARLTON COUNTY BOARD OF EDUCAnON EXHIBIT "D" NOTES TO THE GENERAL PURPOSE FINANCIAL STATEMENTS JUNE 30. 1999 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PROPERTY TAXES The Charlton County Board of Commissioners fixed the property tax levy for the 1998 tax year (calendar year) on January 1, 1999 (levy date)._ Taxes were due on April 1, 1999. The lien date for property taxes was January 1, 1998. Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 1999. The Charlton County Tax Commissioner bills and collects the property taxes for the Board of Education and remits taxes collected to the Board. Tax millage rates levied for the 1998 tax year (calendar year) for the Charlton County Board of Education were as f.O,,+ " ~(. '~~Jt :~'i~ilil/ DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street, S,W.. Suite 214 Atlanta, Georgia 30334-X400 March 30, 2000 Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education and Superintendent and Members of the Charlton County Board of Education REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Ladies and Gentlemen: Compliance We have audited the compliance of Charlton County Board of Education with the types of compliance requirements described in the Us. Office ofManagement and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major Federal programs for the year ended June 30, 1999. Charlton County Board of Education's major Federal programs are identified in the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of Charlton County Board of Education's management. Our responsibility is to express an opinion on Charlton County Board of Education's compliance based on our audit. We conducted our audit of compliance in accordance with generally accepted auditing standards; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-I33, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-I33 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 Charlton County Board of Education's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Charlton County Board of Education's compliance with those requirements. 99SA-1O In our opinion, the Charlton County Board of Education complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 1999. Internal Control Over Compliance The management of Charlton County Board of Education is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to Federal programs. In planning and performing our audit, we considered Charlton County Board of Education's internal control over compliance with requirements that could have a direct and material effect on a major Federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. This report is intended solely for the information and use of management, members of the Charlton County Board of Education, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Respectfully submitted, ~.~ R sell W. Hinton State Auditor RWH:gp 99SA-IO SECTION ill AUDITEE'S RESPONSE TO PRIOR YEAR FINDINGS AND QUESTIONED COSTS CHARLTON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999 PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS FINDING CONTROL NUMBER AND STATUS FS-6241-97-01 FS-6241-97-02 FS-6241-98-0 1 FS-6241-98-02 Further Action Not Warranted Further Action Not Warranted Previously Reported Corrective Action Implemented Unresolved - See Corrective ActionlResponses CORRECTIVE ACTIONIRESPONSES GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Finding Control Number: FS-6241-98-02 The Board of Education of Charlton County is unable to hire additional staffto include the system's assets in the general ledger. SECTIONN FINDINGS AND QUESTIONED COSTS CRARLTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999 I SUMMARY OF AUDITOR'S RESULTS 1. Type of Report Issued on the Financial Statements The auditor's opinion on the Charlton County Board of Education's financial statements was qualified for various departures from generally accepted accounting principles. 2. Reportable Conditions in Internal Control Disclosed by the Audit ofthe Financial Statements The audit report for the Charlton County Board of Education disclosed a financial statement reportable condition related to the following control category. General Fixed Assets The reportable condition described above is considered to be a material weakness. 3. Noncompliance Material to the Financial Statements The audit of the Charlton County Board of Education disclosed no instances of noncompliance that were deemed to be material to the financial statements. 4. Reportable Conditions in Internal Control Over Major Programs The audit report for the Charlton County Board of Education did not disclose any reportable conditions in internal control over major programs. 5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the Charlton County Board of Education's report on compliance with requirements applicable to major programs was unqualified. 6. Audit Findings Required to be Reported by Section .51O(a) ofOMB Circular A-B3 The Charlton County Board of Education's audit did not disclose audit findings required to be reported by section .510(a) ofOMB Circular A-B3. 7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program lO.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.027 Individuals with Disabilities Education Act - Part B - Special Education - Flow Through 84.173 Individuals with Disabilities Education Act - Part B - Special Education - Preschool 8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00. 9. Low Risk Auditee The Charlton County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-l33. - 1- CHARLTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 1999 II FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS GENERAL LEDGER Failure to Transfer Local Matching Funds Nonmaterial Noncompliance Finding Control Number: FS-6241-99-01 During the year under review, the Board failed to transfer local matching funds from the Capital Projects Fund - Bond Proceeds Fund to the Capital Projects Fund - Georgia State Financing and Investment Commission (GSFIC) Fund as required for the approved State Capital Outlay Project for the 1999 fiscal year. Both the instructions in Chapter 41 ofthe Financial Management for Georgia Local Units of Administration and the agreement signed by the Board to receive the funding through GSFIC require that the Board transfer local matching funds by year end and designate those funds by project name and number. A correcting audit adjustment was necessary to transfer $85,680.00 from the Bond Proceeds Fund to the GSFIC Project No. LWOO/99S-624-001 as required. GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition - Material Weakness Repeated From Prior Year Finding Control Number: FS-6241-99-02 The Charlton County Board of Education did not maintain a system-wide General Fixed Assets Account Group within the formal accounting records as required by generally accepted accounting principles. This condition results in the general purpose financial statements of the Board being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the Board to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the Board and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained of all additions and deletions to the General Fixed Assets Account Group. ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters were reported. -2-