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

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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

EXHIBITS

GENERAL-PURPOSE FINANCIAL STATEMENTS

COMBINED STATEMENTS - OVERVIEW

A

COMBINED BALANCE SHEET

ALL FUND TYPES AND ACCOUNT GROUP

2

B

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

ALL GOVERNMENTAL FUND TYPES

4

C

COMBINED STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDmONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

18

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

20

CAPITAL PROJEcrs FUND

G

COMBINING BALANCE SHEET

22

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

24

DEBT SERVICE FUND

I

COMBINING BALANCE SHEET

26

J

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

27

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

28

2 SCHEDULE OF STATE REVENUE

30

3 SCHEDULE OF APPROVED LOCAL OPTION SALES TAX PROJECTS

31

CHARLTON COUNTY BOARD OF EDUCATION - TABLE OF CONfENTS -

SECTION I

FINANCIAL

ADDmONAL FINANCIAL INFORMATION

SCHEDULES

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

32

5

BY SITE

33

SECTION II
COMPLIANCE AND INTERNAL CONTROL REPORTS
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE~GOVERNMENTAUDITINGSTANDARDS
REPORT ON COMPLIANCE ~ REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE ~ OMB CIRCULARA-133

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

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

SECTION I FINANCIAL

RUSSELL W. HINTON
STATE AUDITOR (404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
:!54 Washington Street, S.w., Suite 214 Atlanta, Georgia 30334-8400
June 27, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Charlton County Board of Education
INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMAnON 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, 2001, as listed in the table of contents. These general-purpose financial statements are the responsibility of the 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 auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our 0plmon.
As described in the notes to the general-purpose financial statements, the Board of Education's financial statements have been prepared using certain accounting practices and policies which, in our opinion, vary in some respects from generally accepted accounting principles. These variances are described as follows:

200IARL-13

'" The general-purpose financial statements of the Board of Education did not contain a General Fixed Assets Account Group to account for property and equipment owned by the Board of Education which should be included to confonn to generally accepted accounting principles.
'" School activity accounts maintained at the individual schools are not included in the general-purpose financial statements. To confonn to generally accepted accounting principles, these accounts should be included in the general-purpose financial statements.
'" The Board of Education did not recognize as expenditures, in the year ended June 30, 2001, a portion of salaries and the corresponding employer's cost of related benefits earned for contractual services completed prior to June 30, 2001. Also funds received, subsequent to June 30, 2001, from the Georgia Department of Education for the State's share of these unrecorded salaries and related benefits were not recorded as revenue in the year under review. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30,2000, were improperly recorded in the year ended June 30, 2001. To confonn to generally accepted accounting principles, revenues should be recorded when available and measurable and expenditures should be recorded when incurred, rather than when funds are received or disbursed.
The aggregate effects on the general-purpose financial statements of these variances or omissions have not been detennined, 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 ofJune 30, 2001, and the results ofits operations for the year then ended, in confonnity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated June 27, 2002, 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. That report is an integral part of an audit perfonned in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit.
Our audit was perfonned for the purpose of fonning an opinion on the general-purpose financial statements of the Charlton County Board of Education taken as a whole. The accompanying combining statements (Exhibits E through J) and the financial schedules (Schedules 1 through 5), which includes the Schedule of Expenditures of Federal Awards as required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, are presented for purposes of additional analysis and are not a required part of the general-purpose financial statements. Such infonnation has been subjected to the auditing
2001ARL-13

procedures applied in the audit ofthe general-purpose financial statements and in our opinion, except for the effects ofthe matters referred to in the third paragraph, such infonnation is fairly stated, in all material respects, in relation to the general-purpose financial statements taken as a whole.
A copy ofthis report has been filed as a pennanent record in the office ofthe State Auditor and made available to the press ofthe State, as provided for by Official Code ofGeorgia Annotated Section 506-24.
Respectfully submitted,
LJ.~
R ell W. Hinton State Auditor
RWH:as 200IARL-13

CHARLTON COUNTY BOARD OF EDUCAnON

CHARLTON COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
ALL FUND TYPES ANp ACCOUNT GROUP
JUNE 30, 2991

Cash and Cash Equivalents
Accounts Receivable
Inventones Food Donated Commodlbes 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

$ 1,859,259,69 $

256,452.88 $ 1,175,122,95

191,891 63

87,12857

83,14688

12,99959 7,85226

Total Assets

$ 1,96"'5132 S 364,424.21 $ 1,258,268.93

LIABILITIES AND FUND EqUITY
LIABILITIES
Cash Overdraft Accounts Payable Salanes Payable Expired Grant Balances Payable Deferred Revenue Contracts Payable Retalnages Payable General Obhgalton Bonds Payable
TotalbJablhtles
FUND EqUITY
Fund Balances Reserved For Conbnuatlon of Federal Programs For Debt Service For Inventones Food Donated Commodities Purchased Food For Purpose of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undeslgnated
Total Fund Equity

$

32,92942

134,333.24

$

1,266,78

495,56

167,27

$

78,444,12

17,36300

$

1,266,78 $

167,91649 $

95,89712

$

12,99959

7,85226

$

719,549.91

$ 1,959,884.54 $ 1,959,884 54 $

176,564.96 197,49772 $

451,912.89 1,162,461 81

TotalbJabihtles and Fund Equity

$

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

364,42421 $ 1,258,268 93

EXHIBIT "A"

DEBT SERVICE
FUND

ACCOUNT GROUP GENERAL
LONG-TERM DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2001

JUNE 30, 2000

$ 3,290,834.62 $ 2,919,686 89

$

76,451.29

348,618.37

473,34505

$

23.09339

2,016,906.61

12,99050 7,852.26
23,093.39

11,362.23 7,174.81 93,656.67
2,821,343 33

$

76,451.29 $

2,040,000.00 $ 5,700,29575 $ 6,326,568 98

$

53,357.90

$

53,35790

32.020.42 $

31,134.02

134,333.24

125,616.88

1,762.34

22280

167.27

78,444.12

17,363.00

$

2,040,000.00

2,040,000 00

2,915,000.00

$

53,357.90 $

2,040.000.00 $ 2,357,44829 $ 3,071,973.70

$

23,09339

000

$

23,093.39

$

65,720.15

$

23,093.39

93,656 67

12,99050 7,85226
710,54901

11,362.23 7.174.81 118,54316 598,29373 15,43609

2,588,36230

2,344.408 44

$ 3,342,847.46 $ 3,254,595.28

$

76,45129 $

2,040,00000 $ 5:700,29575 $ 6,326.568 98

3-

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

REVENUES
State Funds Federal Funds Taxes Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of InstrudJonal Services Educational Media services General Adminlstrabon School Admlnlstrabon BUSiness Admlnlstrabon Maintenance and Operation of Plant Student Transportabon seMces Other Support serviceS Food services Operabon
Capital Outlay Debt Service
Principal Interest PaYJng Agent Fees
Total expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES (USES)
Operating Transfers In Operabng 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

$ 8,357,67804 $ 41,92600
2,501,829.24 147,61212
$ 11 ,049,045 40 $

472,188.39 1,326,545 70
197,81530
1,996,549.39

$ 6,963,688 22 $
345,16968 282,61207 409,147.30 287,544.69 775,069.21 64,439.02 887,004 31 611,59957
27,10284

911,87846
188,460.28 179,17114 42,855.91
1,280.51
2;744 00 73390
754,20886

$ 10,653,376 91 $

$

395,66849 $

2,081 ,333.06 -84,78367

$ $ -316,664 22
$ -316,664 22 $

32,100.31 32,10031

$

79,004 27 $

1,880,880,27

-52,68336 247,785.36

1,62827 67745

FUNP BALANCE JUNE 30

$ 1,959,884 54 $ =_1=9=7~,4=07=7=2=

The notes to the general-purpose finanCIal statements are an Integral part of thiS statement -4-

EXHIBIT "8"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS

(Memorandum Only)

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$ 8,829,866.43 $ 8,839,278.46

1,368,471.70

1,570,003.62

$

83,146.88 $

932,788.78

3,517,764.90

3,657,606.75

36,336.46

4,29979

386,063.67

425,464 06

$

119,48334 $

937,08857 $ 14,102,166.70 $ 14,492,352.89

$ 7,875,566.68 $ 7,313,176.72

$

273,858.42

533,629.96 461,783.21 452,003.21 288,825.20 775,069.21
64,439.02 887,004 31 614,343.57
27,83674 754,208.86 273,858.42

638,341.59 478,823.39 405,473.20 285,949.65 736,459.10
77,38056 839,648.07 639,811.25
27,70714 774,444 70 2,264,346 62

$

875,000.00

131,470.00

1,181.85

875,000.00 131,47000
1,181.85

795,000.00 166,945.00
3,86915

$

273,85842 $ 1,007,651.85 $ 14,016,220.24 $ 15,447,37614

$

-154,375.08 $

-70,563.28 $

85,94646 $

-955,023.25

$

284,563.91

$

284,563.91

$

316,664.22 $

303,990.05

-316,664.22

-303,990.05

$

000 $

0.00

$

130,188.83 $

1,032,272.98

-70,563.28 $ 93,656.67

85,94646 $ 3,254,595 28

-955,023.25 4,213,359.85

1,628.27 67745

3,156 55 -58477

$ 1,162,461 81 $

23,093 39 $ 3,342,847 46 $ 3,254,595 28

-5-

CHARLTON COUNTY BOARD OF EDUCATION COMBINER STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCES
BURGET ANP ACTUAL - (NON-GMP BASIS) GENERAL AND SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30 2001

EXHIBIT C

GENERAL FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

REVENUES

State Funds Federal Funds Taxes Other Funds

$ 8,032,65842 $ 8,357,67804

47,80350

41,92600

2,663,640 43

2,501,82924

50,00000

147,612 12

Total Revenues

$ 10,794,10235 $ 11,049,04540

EXPENPITURES

Current Instruction Support Services Pupil SeMces Improvement of Instructional Services Educational Media Services General Administration School Administration BUSiness Administration Maintenance and Operation of Plant Student Transportation Services Other Support SeMces Food Services Operation
Capital Outlay

$ 7,052,20772 $ 6,963,688 22

336,271 16 324,471 34 437,04423 295,09240 842,93340
74,63798 856,187 17 615,28849
26,734 00

345,16968 282,61207 409,14730 287,544 69 775,06921
64,43902 887,004 31 611,59957
27,10284

300,00000

Total Expenditures

$ 11 ,160,867 89 $ 10,653,37691

Excess of Revenues over (under) Expenditures

$

-366,76554 $

395,66849

OTHER FINANCING SOURCES (USES>

Other Sources Other Uses

$ -316,66422

Total Other FinanCing Sources (Uses)

$ -316,664 22

Excess of Revenues and Other FinanCing Sources

over (under) Expenditures and Other FinanCing

Uses

$

-366,76554 $

79,00427

FUND BALANCE JULY 1 2000

1,806,276 57

1,880,880 27

Adjustments Food Inventory - Net Change In Penod
Donated Commodities Purchased Food

13780

FUND BALANCE JUNE 30 2001

$ 1,439,37323 $ 1,959,884 54

SPECIAL REVENUE FUND

ACTUAL

(BUDGET

BUDGET

BASIS)

$ 476,06380 $ 472,18839

1,310,22200

1,326,545 70

236,41800

197,81530

$ 2,022,70380 $ 1,996,549 39

$ 922,86980 $ 911,87846

186,04400 129,01800
41,01300 2,39800

188,46028 179,171 14
42,85591 1,280 51

4,00000 826,43714

2,74400 73390
754,20886

$ 2,111,77994 $ 2,081,333 06

$

-89,07614 $

-84,78367

$

85000 $

32,10031

$

85000 $

32,10031

$

-88,22614 $

-52,68336

316,16085

247,78536

-62,64887

1,62827 677 45

$ 165,28584 $ 197,40772

The notes to the general-purpose finanCial statements are an Integral part of thiS statement - 6-

CHARLTON COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Charlton County Board of Education (School District) was established under the laws of the State of Georgia and operates under the guidance of a school board elected by the voters and a Superintendent appointed by the Board. The School District is organized as a separate legal entity and has the power to levy taxes and issue bonds. Its budget is not subject to approval by any other entity. Accordingly, the School District is a primary government and consists of all the organizations that compose its legal entity.
FUND ACCOUNTING
The School District uses funds and an account group to report on its financial position and the results 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 School District. To conform to generally accepted accounting principles, a General Fixed Assets Account Group should be maintained for reporting the cost of assets acquired by governmental fund types.
Although "school activity accounts" are maintained at the individual schools, neither the assets, liabilities and fund equity, nor the revenues, expenditures and changes in fund balances of these accounts are reflected in these fmancial statements. To conform to generally accepted accounting principles, these accounts should be recorded in the general-purpose financial statements.
The general-purpose financial statements account for all State, Federal, Taxes and Other funds under control of the School District, in compliance with generally accepted accounting principles applicable to governmental units, unless otherwise disclosed in these notes. Funds and the account group presented in this report are as follows:
GOVERNMENTAL FUND TYPES - are used to account for all or most of a School District's educational activities. Governmental Fund Types include:
GENERAL FUND - the fund used to account for all financial resources of the School District except those required to be accounted for in another fund. These transactions relate to resources obtained and used for services provided by a board of education.

-7-

CHARLTON COUNTY BOARD OF EDUCAnON

EXHIDIT "0"

NOTES TO mE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note I: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SPECIAL REVENUE FUND - the fund used to account for the proceeds of specific revenue sources (other than for major capital projects) that are legally restricted to expenditures for specified purposes. These funds are received primarily from the Georgia Department of Education and from the Federal government to accomplish specific educational objectives.
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 ofresources for, and the payment of, general long-term principal, interest and paying agent fees.
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A fmancial reporting device used to account for general obligation debt outstanding,
BASIS OF ACCOUNTING
The accounting and financial reporting treatment applied'to a fund is determined by its measurement focus, All governmental funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements ofthese funds present increases (i,e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets. Their reported fund balance is considered a measure of available spendable resources.
Liabilities which are expected to be financed from available spendable resources are reported as liabilities in the governmental funds. Other liabilities, which are not expected to be financed from available spendable resources, are reported in the General Long-Term Debt Account Group.
Governmental funds are accounted for using the modified accrual basis ofaccounting under which:
Revenues are recognized when susceptible to accrual (i,e" when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The School District considers receivables collected within sixty days after yearend to be available and therefore susceptible to accrual. Nonexchange transactions, in which the School District gives (or receives) value without directly receiving (or giving) equal value in exchange, include property taxes, local option sales taxes, intergovernmental grants and donations. Revenue for property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from sales taxes is recognized in the fiscal year the resources are received or susceptible to accrual. Revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

-8-

CHARLTON COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures are generally recognized when the related fwid liability is incurred.
A departure from the above definitions is the accounting treatment afforded the final two payments on General Fund teachers' and bus drivers' contracts, and the resources available from the Georgia Department of Education for the State's share of these contracts. During fiscal year 2001, a substantial number ofpersonnel ofthe School District were employed for a one hundred and ninety day period beginning in August 2000 and ending in early June 2001. Personnel contracts for this employment period specify that compensation be paid in twelve equal monthly payments beginning in September 2000 and ending in August 2001. State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Education to the School District in the same twelve months. As of June 30, 2001, compensation under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2001, had not been made. Payments for these two months were made and recorded as expenditures by the School District subsequent to June 30, 2001. Also, the State's portion ofthe compensation paid in July and August 2001 was received and recorded as revenue in the fiscal year subsequent to June 30, 2001. Conversely, the similar expenditures and related revenues for contractual services completed prior to June 30, 2000, were recorded in the year ended June 30, 2001. Generally accepted accounting principles require that revenues be recorded when available and measurable and that expenditures be recorded when incurred, rather than when funds are received or disbursed.
BUDGET
The Charlton County Board of Education's budget is a complete financial plan for the School District's fiscal year and is based upon estimates of expenditures together with probable funding sources. There is no statutory prohibition regarding overexpenditure ofthe budget at any level. The budget for all governmental funds is prepared by fund, function and object. The legal level of budget control was established by the Board at the aggregate level. The budget for governmental funds was prepared on a basis other than generally accepted accounting principles.
The budget process begins when the School District's administration prepares a tentative budget for the Board's approval. After approval ofthis tentative budget by the Board, such budget is advertised at least once in a newspaper of general circulation in the locality. At the next regular meeting of the Board after advertisement, the Board receives comments on the tentative budget, makes revisions as necessary and adopts a final school budget. This final budget is then submitted, in accordance with provisions of the Quality Basic Education Act, OCGA Section 20-2-167(c), to the Georgia Department of Education. The Board may increase or decrease the budget at any time during the year. All unexpended budget authority lapses at fiscal year-end.

- 9-

CHARLTON COUNfY BOARD OF EDUCAnON

EXHffiIT "0"

NOTES TO TIIE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

COMPOSITION OF DEPOSITS Cash and cash equivalents consist ofcash on hand, demand deposits and short-tenn investments with original maturities of three months or less from the date of acquisition in authorized financial institutions. Georgia Laws OCGA 45-8-14 authorize the School District to deposit its funds in one or more solvent banks or insured Federal savings 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 infonnation available. Receivables are recorded when either the asset or revenue recognition criteria has been met. Receivables recorded on the general-purpose financial statements do not include any amounts which would necessitate the need for an allowance for uncollectible receivables.

PROPERTY TAXES
tlie The Charlton County Board of Commissioners fixed property tax levy for the 2000 tax year
(calendar year) on December 18, 2000 (levy date). Taxes were due on March 1,2001 (lien date). Taxes collected within the current fiscal year or within 60 days after year-end are reported as revenue in fiscal year 2001. The Charlton County Tax Commissioner bills and collects the property taxes for the School District and remits taxes collected to the School District. Property tax revenues during the fiscal year ended June 30, 2001 for maintenance and operations amounted to $2,478,317.12 and for school bonds amounted to $172,883.88.

Tax millage rates levied for the 2000 tax year (calendar year) for the Charlton County Board of Education were as follows (a mill equals $1 per thousand dollars of assessed value):

School Operations School Bonds

13.495 mills .900 mills

14.395 mills

SALES TAXES

Special Purpose Local Option Sales Tax is to be used for capital outlay for educational purposes and debt service. Special Purpose Local Option Sales Tax revenue during the fiscal year amounted to $841,818.51 and was recorded in the Capital Projects and Debt Service Funds. The State will tenninate collection ofthis tax once an additional $2,613,409.41 has been collected or on December 31, 2002, whichever occurs first.

- 10-

CHARLTON COUNTY BOARD OF EDUCAnON

EXHffiIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

ruNE 30. 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
FOOD INVENTORIES Inventories of donated food commodities used in the preparation of meals are reported on the Combined Balance Sheet at their Federally assigned value. Purchased foods inventories are reported on the Combined Balance Sheet at cost (first-in, first-out). Donated food commodities are recorded as revenues and expenditures at the time commodity items are received. Purchased foods inventories are recorded as expenditures at the time ofpurchase. The inventories reported on the balance sheet for donated food commodities and for purchased foods are equally offset by reservations of fund balance which indicates that these amounts do not constitute "available spendable resources" even though they are a component of net current assets.
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. No liability has been recorded in the individual funds for the current portion of this obligation as this amount is deemed immaterial to the general-purpose financial statements.
Additionally, the dollar value of accumulated compensated absences at June 30, which will be payable from future resources has not been recorded in the General Long-Term Debt Account Group as this liability is also deemed to be immaterial to the fair presentation ofthese financial statements.
GENERAL OBLIGATION BONDS
The School District issues general obligation bonds to provide funds for the acquisition and construction ofmajor capital facilities. Bond premiums and discounts, as well as issuance costs, are recognized in the fmancial statements during the year bonds are issued. General obligation bonds are direct obligations and pledge the full faith and credit ofthe government. The outstanding amount of these bonds is recorded in the General Long-Term Debt Account Group.
INTERFUND TRANSACTIONS
The School District has the following types of interfund transactions:
Reimbursements ofexpenditures initially made from a fund that are properly applicable to another fund are recorded as expenditures in the reimbursing fund and as reductions of expenditures in the fund that is reimbursed.
Operating transfers are recorded for all interfund transactions other than reimbursements.

- 11 -

CHARLTON COUNTY BOARD OF EDUCATION

EXHmIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
MEMORANDUM ONLY - TOTAL COLUMNS
Total columns on the general-purpose financial statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns do not present financial position or results ofoperations in conformity with generally accepted accounting principles. Neither are such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data.
Note 2: DEPOSITS
COLLATERALIZATION OF DEPOSITS Official Code of Georgia Annotated (OCGA) Section 45-8-12 provides that there shall not be on deposit at any time in any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofinsurance, or by collateral. The aggregate ofthe face value of such surety bond and the market value of securities pledged shall be equal to not less than 110 percent ofthe public funds being secured after the deduction ofthe amount ofdeposit insurance. Ifa depository elects the pooled method (OCGA 45-8-13.1) the aggregate ofthe market value ofthe securities pledged to secure a pool ofpublic funds shall be not less than 110 percent ofthe daily pool balance. OCGA Section 45-8-11 (b) provides an officer holding public funds may, in his discretion, waive the requirement for security in the case ofoperating funds placed in demand deposit checking accounts.
Acceptable security for deposits consists of anyone of or any combination of the following:
(I) Surety bond signed by a sureiy 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 ofthe . State of Georgia, and

- 12 -

CHARLTON COUNTY BOARD OF EOUCAnON

EXHffiIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 2: DEPOSITS

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

CATEGORIZATION OF DEPOSITS AtJune 30, 200 I, the bank balances were $3,778,018.40. The amounts ofthe total bank balances are classified into three categories of credit risk:

Category 1 - Cash that is insured (e.g., Federal depository insurance) or collateralized with securities held by the School District or by the School District's agent in the School District's name.
Category 2 - Cash collateralized with securities held by the pledging financial institution's trust department or agent in the School District's name.
Category 3 - Uncollateralized deposits. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, or by its trust department or agent but not in the School District's name.)

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

Risk Category

Bank Balance

1

$ 117,706.72

2

3,660,311.68

3

0.00

Total

$ 3,778,018.40

Note 3: NON-MONETARY TRANSACTIONS

The School District receives food commodities from the United States Department of Agriculture (USDA) for school breakfast and lunch programs. These commodities are recorded at their Federally assigned value. See Note 1 - Inventories

Note 4: RISK MANAGEMENT

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

- 13-

CRARLTON COUNTY BOARD OF EDUCAnON

EXHffiIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 4: RISK MANAGEMENT

The School District has obtained commercial insurance for risk ofloss associated with torts, assets, errors or omissions and job related illness or injuries to employees. The School District has neither significantly reduced coverage for these risks nor incurred losses (settlements) which exceeded the School District's insurance coverage in any of the past three years.

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

The School District is self-insured with regard to unemployment compensation claims. The School District accounts for claims within the same fund that the employee's salary and benefits were paid. Claims are accounted for with expenditure and liability being reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated.

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

2000 2001

Beginning of Year Liability

Claims and Changes in Estimates

$

0.00 $

0.00 $

$

0.00 $

202.00 $

Claims Paid

End of Year LiabilIty

0.00 $

0.00

202.00 $

0.00

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

Position Covered

Amount

Superintendent All Other Employees

$ 50,000.00 $ 25,000.00

Note 5: GENERAL LONG-TERM DEBT

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

Purpose

Interest Rates

General Government - Series 1978 General Government - Series 1998

6.50% 3.70% - 4.00%

Amount
$ 460,000.00 1,580,000.00
$ 2,040,000.00

The changes in General Long-Tenn Debt during the fiscal year ended June 30, 2001, were as follows:

- 14-

CHARLTON COUNTY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 5: GENERAL LONG-TERM DEBT

General Obligation
Bonds

Balance July 1,2000

$ 2,915,000.00

Deductions Debt Retired

875,000.00

Balance June 30, 2001

$ 2,040,000.00

At June 30,2001, payments due by fiscal year which includes principal and interest for these items are as follows:

Fiscal Year Ended June 30

General Obligation
Bonds

2002 2003

$ 1,067,350.00 1,113,595.00

Total Principal and Interest

$ 2,180,945.00

Note 6: ON-BEHALF PAYMENTS

The School District has recognized revenues and expenditures in the amount of $144,748.06 for health insurance and retirement contributions paid on the School District's behalf by the following State Agencies.

Georgia Department of Education Paid to the Georgia Department of Community Health For Health Insurance of Non-Certified Personnel In the amount of$100,740.91

Paid to the Teachers Retirement System of Georgia For Teachers Retirement System (TRS) Employer's Cost In the amount of$13,440.15

Office of Treasury and Fiscal Services Paid to the Public School Employees Retirement System For Public School Employees Retirement (PSERS) Employer's Cost In the amount of $30,567,00

- 15 -

CHARLTON COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2001

Note 7: SIGNIFICANT COMMITMENTS

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

Project

Unearned Executed Contracts

01-681-011

$ 256.377.54

The amount described in this note is not reflected in the general-purpose financial statements.

Note 8: CONTINGENT LIABILITIES

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

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

Note 9: SUBSEQUENT EVENTS

On March 19, 2002, the voters ofCharlton County voted in favor ofa Special Purpose Local Option Sales Tax Referendum for educational purposes. The imposition ofthe tax approved by the voters, as stated on the Official Ballot of Charlton County, is as follows:

"Shall a one percent sales and use tax for educational purposes ofthe Charlton County School District (the "School District") be reimposed within Charlton County, upon the termination of the one percent sales and use tax for educational purposes presently in effect, for a maximum period oftime of 20 calendar quarters, for the purposes ofproviding funds to pay (1 ) the cost of acquiring instructional and administrative technology improvements for existing schools, adding to, renovating, repairing, improving and equipping existing school buildings and other buildings and facilities useful or desirable in connection therewith, and acquiring any necessary property therefore, both real and personal, (2) the cost ofacquiring school buses, the maximum cost ofthe projects described in clauses (I) and (2) above to be $5,000,000, and (3) the cost of retiring a portion of the School District's School Bonds, dated June 1, 1978 (the "Series 1978 Bonds") by paying or making provision for the payment of the principal of and interest on the Series 1978 Bonds coming due on July I, 2003, in the maximum amount of $243,000?"

- 16-

CHARLTON COUNIY BOARD OF EDUCATION

EXHmIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2001

Note 9: SUBSEOUENT EVENTS

"Ifreimposition ofthe tax is approved by the voters, such vote shall also constitute approval of the issuance ofgeneral obligation debt ofthe Charlton County School District in the principal amount of $3,000,000 for the purpose set forth in clause (1) of the above question."

Note 10: ACCUMULATEDEMPLOYEES'LEAVE

The School District's twelve month employees earn vacation leave at the rate of one day per month with a maximum accumulation often days per year. Eleven month employees earn vacation leave at the rate ofone halfday per month with a maximum accumulation offive days per year. A maximum often days ofvacation leave can be carried forward to another year. Upon retirement or termination of employment, unused accumulated vacation leave will be paid to the employee at their current rate ofpay. See Note 1 - Compensated Absences

Note 11: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

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

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School District who are covered by TRS are required by State statute to contribute 5% of their gross earnings to TRS. The School District makes monthly employer contributions to TRS at rates adopted by the TRS Board ofTrustees in accordance with State statute and as advised by their independent actuary. The required employer contribution rate is 11.29% and employer contributions for the current fiscal year and the preceding two fiscal years are as follows:

Fiscal Year

Percentage Contributed

Required Contribution

2001 2000 1999

100% 100% 100%

$ 807,723.75 $ 759,797.74 $ 734,527.39

- 17 -

CHARLTON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REVENUE FUND JUNE 30, 2001

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

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$

212,026.09 $

56.724.94

12,990.50 7.852,26

Total Assets

$

232,868.85 $ ===5;,;;6"",,7=24=:,:=94==

LIABILITIES AND FUND EQUITY
LIABILITIES
Cash Overdraft Accounts Payable Salaries Payable Expired Grant Balances Payable Deferred Revenue
Total Liabilities
FUND EQUITY
Fund Balances Reserved For Continuation of Federal Programs For Inventories Food Donated Commodities Purchased Food Unreserved Undesignated
Total Fund Equity
Total Liabilities and Fund Equity
See notes to the general-purpose financial statements.
- 18-

$

3,149,69 $

12,248.94

32,311.44

44,476,00

$

35.461,13 $

56,724.94

$

12,990.50

7,852.26

176,564.96 $

0.00

$

197.407.72 $

0.00

$

232,868.85 $ """'===5..6....7.=24:::.:=94==

EXHIBIT "E"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

3,477.17

$

272,228.20 $

229,977.12

71,353.25 $

15,775.32

87,128.57

156,022.10

12,990.50 7,852.26

11,362.23 7,174.81

$

74,830.42 $

15,775.32 $

380,199.53 $ -===4:=04=,!=.5:=36=.2:=6=

$

15,775.32 $

15,775.32

$

16,621.79

32,020.42 $

31,134.02

57,545.80

134,333.24

125,616.88

495.56

495.56

167.27

167.27

$

74,830.42 $

15,775.32 $

182,791.81 $

156,750.90

$

65,720.15

$

12,990.50

7,852.26

11,362.23 7,174.81

$

0.00 $

0.00

176,564.96

163,528.17

$

0.00 $

0.00 $

197,407.72 $

247,785.36

$

74,830.42 $

15,77532 $

380,199.53 $ ==-4..0.4====:,5=36=.=26=

- 19-

CHARLTON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENPED JUNE 3D. 2001

REVENUES
State Funds Federal Funds Other Funds
Total Revenues
EXPENDITURES
Current Instruction Support Services Pupil Services Improvement of Instructional Services Educational Media Services General Administration Maintenance and Operation of Plant Student Transportation Services Other Support Services Food Services Operation
Total Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operating Transfers In
Excess of Revenues and Other Financing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory - Net Change in Period Donated Commodities Purchased Food
FUND BALANCE JUNE 30

SCHOOL FOOD
SERVICES FUND

LOTIERY PROGRAMS

$

48,668,00 $

373,520,29

520,762,35

197,815,30

$

767,245.65 $

373,520,29

$

287,479,25

66,596,02

42,855.91

$

754,208,86

733,90

$

754,208,86 $

397,665,08

$

13,036.79 $

-24,144,79

$

13,036,79 $

182,065.21

1,628.27 677.45

24,144.79
0.00 0,00

$

197,407.72 $ =.......==0====:00==

See notes to the general-purpose finanCIal statements. - 20-

EXHIBIT"F"

FEDERAL PROGRAMS

OTHER PROGRAMS

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

$

805,783.35

$

805,783.35 $

50,000.10 $ 50,000.10 $

472,188.39 $ 1,326,545.70
197,815.30
1,996,549.39 $

543,959.46 1,522,210.12
240,196.03
2,306,365.61

$

624,399.21

71,855.88 $ 179,171.14

1,280.51

2,744.00

$

879,450.74 $

$

-73,667.39 $

$ 50,008.38
50,008.38 $ -8.28 $

911,878.46 $
188,460.28 179,171.14
42,855.91 1,280.51
2,744.00 733.90
754,208.86
2,081,333.06 $
-84,783.67 $

1,028,515.66
280,315.22 135,042.81
60,476.12 1,221.36 500.00 355.25 973.14
774,444.70
2,281,844.26
24,521.35

7,947.24

$

-65,720.15 $

65,720.15

8.28

32,100.31

3,536.05

0.00 $ 0.00

-52,683.36 $ 247,785.36

28,057.40 223,469.28

1,628.27 677.45

-3,156.55 -584.77

$

0.00 $

000 $

197,407.72 $ ====:m2;;,,:4=7=,7=85===:36==

- 21

CHARLTON COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET CAPITAL PROJECTS FUND JUNE 3D, 2001

ASSETS Cash and Cash Equivalents Accounts Receivable
Total Assets
LIABILITIES AND FUND EQUITY LIABILITIES
Cash Overdraft Contracts Payable Retainages Payable
Total Liabilities FUND EQUITY
Fund Balances Reserved For Purposes of Bond Issue For SPLOST Projects For State Capital Outlay Projects Unreserved Undesignated Total Fund Equity
Total Liabilities and Fund Equity

REGULAR

BOND PROCEEDS

$

547,719.92 $

0.00

$

547,719.92 $====0....0..0...

$

78,444.12

17,363.00

$

95,807.12

$

451,912.80 $

0.00

$

451,912.80 $

0.00

$

547,719.92 $===1lIIII:0=.0=0...

See notes to the general-purpose financial statements. - 22-

EXHIBIT"G"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$

0.00 $

627,402.13 $ 1,175.122.05 $

950,988.19

83.146.88

83,146.88

154,960.80

$

000 $

710,549.01 $ 1,258,268.93 $ 1,105,948.99

$

73,676.01

$

78.444.12

17.363.00

$

95,807.12 $ _ _.....;7...3.."."".6;.;.76=..=,.01.;....

$

118,543.16

$

710,549.01 $

710,549.01

598,293.73

15,436.09

$

000

0.00

451,912.80

300,000.00

$

0.00 $

710,549.01 $ 1,162,461.81 $ 1.032.272.98

$

0.00 $

710,549.01 $ 1,258,268.93 $ 1,105,948.99

- 23-

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

REVENUES State Funds Taxes Other Funds Total Revenues
EXPENDITURES Capital Outlay Land and Land Improvements Building and Building Improvements Total Expenditures
Excess of Revenues over (under) Expenditures OTHER FINANCING SOURCES (USES)
Operating Transfers In Operating Transfers Out
Total Other FinanCing Sources (Uses) Excess of Revenues and Other FinanCing Sources
over (under) Expenditures and Other FinanCing Uses FUND BALANCE JULY 1
FUND BALANCE JUNE 30

REGULAR

BOND PROCEEDS

$

0.00

$

7,228.06

$

0.00 $

7,228.06

$

27,328.30

195,60847 $

$

222,93677 $

$ -222,93677 $

29,98165 29,981.65 -22,75359

$

374,849.57

$

$

374,849.57 $

-95,789.57 -95,78957

$

151,912.80 $ -118,543.16

300,000.00

118,543.16

$

451,912 80 $====-:i0z,;;'0~0=

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

EXHIBIT"H"

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

YEAR ENDED

JUNE 30, 2001

JUNE 30, 2000

$

0.00

$

505,21540

$

83,146.88 $

83,146.88

65,84870

29,108.40

36,336.46

57,514.92

$

0.00 $

112,255.28 $

119,483.34 $ _--...;6:::2:.::8J.:,5:.:..79:::....:::02=-

$

20,940.00 $

$ 0.00

27,328.30 246,53012 $

2,253,760.12

$

20,940.00 $

0.00 $

273,85842 $ 2,253,760.12

$

-20,940.00 $

112,255.28 $

-154,375.08 $ -1,625,181.10

$

5,503.91

$

5,50391

$

380,353.48 $ 1,874,851 68

-95,789.57

-1 ,574,397.68

$

284,563.91 $

300,454 00

$

-15,436.09 $

112,255.28 $

130,188.83 $ -1,324,727.10

15,436.09

598,29373

1,032,272.98

2,357,000.08

$

000 $

710,54901 $ 1,162,461.81 $ 1,032,272 98

- 25

ASSETS Cash and Cash EqUivalents Accounts Receivable
Total Assets

CHARLTON COUNTY BOARD OF EPUCATION COMBINING BALANCE SHEET pEBT SERVICE FUND JUNE 30. 2001

EXHIBIT "I"

PROPERlY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS

JUNE 30, 2001

JUNE 30, 2000

$ 17,706.72

$

17,706.72 $

78,78046

5,38667 $

71,064 62

76,45129

78,724.57

$ 23,093.39 $

71,064 62 $

94,158.01 $ ===15=7=,5=0=5=03=

LIABILITIES AND FUND EQUllY

LIABILITIES

Cash Overdraft

$

FUND EQUITY
Fund Balances Reserved For Debt Service Unreserved Undesignated
Total Fund Equity

$ 23,09339 000 $
$ 23,093.39 $

71,064 62 $

71,064.62 $

63,848.36

$ 000 0.00 $

23,09339 $ 000
23,093.39 $

93,65667 000
93,656.67

Total Liabilities and Fund Equity

$ 23,093.39 $

71,064 62 $

94,158 01 $ =====15=7=,5=05=0=3=

See notes to the general-purpose financial statements.

- 26-

CHARLTON COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
DEBT SERVICE FUND YEAR ENDED JUNE 30, 2001

EXHIBIT"J"

REVENUES
Taxes Other Funds
Total Revenues
EXPENDITURES
Debt Service PrinCIpal Interest Paying Agent Fees
Total expenditures
Excess of Revenues over (under) expenditures
FUND BALANCE JULY 1

PROPERTY TAXES FOR BOND DEBT

SPECIAL PURPOSE LOCAL OPTION SALES TAX

TOTALS YEAR ENDED JUNE 30, 2001 JUNE 30, 2000

$ 174,11715 $ 4,226.42
$ 178,343.57 $

758,671,63 $ 73.37
758,745,00 $

932,788,78 $ 4,29979
937,08857 $

904,414,86 6,91212
911,32698

$ 205,000,00 $ 43,225.00 681,85
$ 248,906.85 $
$ -70,563.28 $
93,65667

670,000,00 $ 88,245,00 50000

875,00000 $ 131,47000
1,181.85

758,74500 $ 1,007,651.85 $

0,00 $ -70,563,28 $

0.00

93,656.67

795,000,00 166,945,00
3,86915
965,81415
-54,48717
148,14384

FUND BALANCE JUNE 30

$ 23,093,39 $

000 $

23,09339 $

93,656 67

See notes to the general-purpose finanCial statements,

- 27-

CHARLTON COUNTY BOARp OF EDUCATION SCHEDULE OF EXPENDITURES OF FEpERAL AWARDS
YEAR ENDED JUNE 30, 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

Agnculture. U. S, Department of

Child NutrltJon Cluster

Pass-Through From Georgia Department of EducalJon

Food and Nutrition Program

Food serviceS

School Breakfast Program

"

NalJonal School Lunch Program

"

10.553 10.555

NlA

$

NlA

123.791.47 353,590 86 $

(2) 710.82884 (3)

Total Child Nutntlon Cluster

$

477,382.33 $

710.82884

Other Programs

Pass-Through From Atlanta-Fulton County Zoo.

Incorporated

Distance Leamlng and TelemedlClne Program

10855

NlA

Pass-Through From Georgia Department of EducalJon

Food and NutrltJon Program

Food DlstribuIJon Program (1)

10.550

NlA

11.258.30 43.38002

11.61924 43.38002

Total U S. Department of Agriculture

$

532.020.65 $

765.82810

Education, U. S. Department of SpeCIal Education Cluster Pass-Through From Georgia Department of EducalJon IndiViduals with Dlsablhtles Education Act Part B - Special EducalJon Flow Through Preschool

84.027 84.173

NlA

$

NlA

144.083.26 $ 37.504 00

144.385 12 (3) 43,983.25 (3)

Total Special EducalJon Cluster

$

181,587.26 $

188.368.37

Other Programs

Pass-Through From Board of Regents of the University

System of Georgia

Elementary and secondary Education Act

Trtlell

Teacher Quality Enhancement Grant for States

and Partnerships

84.336

NlA

Pass-Through From Georgia Department of Education

Comprehensive School Reform DemonstralJon Project 84.332

NlA

Elementary and Secondary Education Act

TIt1el

Administrative Site Evaluation

" 84.010

NlA

Grants to Local Educational Agencies

" 84.010

NlA

Title II

Eisenhower Professional Development

84.281

NlA

TItle VI

Class Size ReduclJon

84.340

NlA

Innovative EducalJon Program Strategies

84.298

NlA

Vocational EducalJon - Basic Grants to States

High School Program

BaSIC Grant

84.048

NlA

Pass-Through From Okefenokee Regional Educational

service Agency

Safe and Drug-Free Schools and Communities

84186

NlA

50.01300
4,30000 432,969.56
12,87895 58.95500 14.081.00
32.121.28
7.619.00

65.35921 50.19734 (3)
4,300 00 432,96956
12,978.16 (3) 59,572 90 (3) 14.08100
32,121.28
7.883.68 (3)

Total U S Department of Education

$

794,525.05 $

867,831.50

- 28-

CHARLTON COUNTY BOARD OF EDUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 3D. 2001

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
OTHER FEDERAL ASSISTANCE
Intenor. U. S. Department of Pass-Through From Charlton County CommISsioners Refuge Revenue Shanng Program

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

NJA

$

4..:,;1:.:;.9~2~6:..:.o.::..o

(4)

Total Federal FinanCIal Assistance
NJA = Not Available

$

1.368,471 70 $~===1._63::;,;3;,;;.6;;;;5;,;;,9,;;6,;;,0

Notes to the Schedule of Exoendltures of Federal Awards

(1) The amounts shown for the Food Distribution Program represents the Federally assigned value of nonmonetary assistance for donated commodities received and/or consumed by the system dunng the current fiscal year
(2) Expenditures for the School Breakfast Program were not maintained separately and are Included in the 2001 National SChool Lunch Program.
(3) Expenditures for this program lndude State. and/or Other Funds. Expenditures are not maintained by fund source
(4) Expenditures on thiS program were not maintained by fund source

Major Programs are Identified by an asterisk (*) in front of the CFDA number.

The School District did not provide Federal AsSistance to any Subredplent

The accompanying schedule of expenditures of Federal awards Includes the Federal grant actJvrty of the Charlton County Board of Education and IS presented on the modified aeaual basis of accounting which Is the basis of accounting used m the presentation of the general-purpose finandal statements.

see notes to the general-purpose finanCIal statements.

- 29-

- - - - - - - - - - - ----- ..

CHARLTON COUNTY BOARD OF EPUCATION SCHEDULE OF STATE REVENUE YEAR ENDER JUNE 30 2001

SCHEDULE "2"

AGENCY/EUNDING
GRANTS Community Affairs, Georgia Department of Local Assistance Grant
EducalJon, Georgia Department of Quality BaSIC EducalJon
DI~lnstruclJonalCost
Kindergarten Program KlndeJllarten Program - Earty InteNentlon Program Pnmary Grades (1-3) Program Pnmary Grades - Early InteNenlJon (13) Program Upper Elementary Grades (4-5) Program Middle Grades (&-Il) Program High SChool General EducatIOn (9-12) Program VocabOnal Laboratory (9-12) Program Students wtth DlssbllrtJes
category I Category II category III category IV Gifted Student - Category VI Remedial EducalJon Program AltematJve EducalJon Program Media Center Program Staff and Professional Development Indirect Cost Categoncal Grants Pupil TransportalJon Regular Bus Replacement Sparsity Speoallnstrudlonal AsSIstance Nursing Supplements PnnClpal Supplements VocalJonal SUperviSOrs EducalJon Equallzatlon Funding Grant FoodSeMces VocabonalEducabon Other State Programs At-Risk Summer SChool Program EnVIronmental Science Program Health Insurance Innovative Programs Preschool HandlC8Pped Program Remedial Summer School Teachers' Rebrement Lottery Programs Computars In the Classroom
Human Resources, Georgl8 Department of Family Connection
Office of SChool Readiness Pre-KIndergarten Program
Office of Treasury and Fiscal Services Public SChool Employees Retirement
CONTRACT EducalJon, Georgia Department of Reading First Program

See notes to the general-purpose finandal statements

- 30-

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$

25,00000

$

25,00000

312,53500 104,34300 904,24300 552,42000 689,96500 971,79300 806,560 00 276,50200
23,33800 151,19600 431,917 00 42,85900 89,64900 68,92300 82,73700 178,66700 47,65900 1,254,074 00

268,346.00 66,39800
139,97400 -1,26808 56,56500 8,066 00 11,45300
568,67300 $
7,45956
3,83574 75000
100,74091 5,000 00
19,12500 2,447.54
13,44015

48,66800 41,01300

50,00010

332.50729

30,56700

312,53500 104,34300 904,24300 552,420 00 689,96500 971,79300 806,56000 276,50200
23,33800 151,19600 431,917 00 42,85900
89,64900 68,92300 82,737,00 178,66700 47,65900 1,254,07400
268,34600 66,39800
139,97400 -1,26808 56,56500 8,06600 11,45300
568,67300 48,66800 7,45956
3,83574 75000
100,74091 5,00000
19,12500 2,44754
13,44015
41,01300
50,00010
332,50729
30,56700

41,72522

41,72522

$ 8,357,676 04 $ 47218839 $ 8,82986643

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

SCHEDULE "3"

pROJECT
Acqulnng, constructing and equipping one new multi-use phYSical education, mUSIC, and arts faCIlity at St George Elementary School, acqulnng instructional and admlnlstrabve technology Improvements for eXisting schools, adding to, renovating, repalnng, ImproVIng, and eqUipping eXlsbng school bUildings and other buildings and faCilities useful or deslreble In connection thereWJth and acqulnng any necessary property, both real and personal
Relinng a pOr!Jon of the School Olstnct's school bonds, dated June 1, 1978 by paying or making provIsions for the payment of the pnncrpal of and Interest on the said 1978 Bonds coming due on July 1, 1998 through January 1, 2003

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT YEAR (3) (4)

AMOUNT EXPENDED
IN PRIOR YEARS (3) (4)

PROJECT STATUS

$ 4,875,000 00 $ 4,875,000 00 $ 273,85842 $ 3,719,77392 Ongoing

375,00000

375,00000

252,92500 Ongoing

$ 5,250,000 00 $ 5,250,000 00 $ 273,85842 $ 3,972,69892

(1) The School OlStnct'S onglnal cost estimate 8S speCified In the resolulion calling for the Imposition of the Local Option Sales Tax

(2) The School Olstnct's current estimate of total cost for the projects Includes all cost from pl'OJllct inception to complebon

(3) The voters of Charlton County approved the Imposllion 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 OIStnct has Incurred Interest to proVide advanca funding for the above projects as follows

Pnor Years

$ 225,38542

Current Year

88,24500

Total

$ 313,63042

See notes to the general-purpose finanCial statements

31 -

CHARLTON COUNTY BOARD OF EDUCATION GENERAL FUNp - aUALlTY BASIC EpUCATION pROGRAM (aBEl
ALLOTMENTS AND EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30, 2001

SCHEDULE "4"

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

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

EL.lGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

$

352.266.00 $ 236,16983 $

3.97545 $

240,14528

117.608,00

274,466,07

3,766.19

278,252.26

1.019.19500 1.009,346,05

23,497,61

1,032,843 66

622.646.00

662.108 12

10,42013

672.528,25

777,677.00

750,788,62

18,332,32

769.120,94

1.095,332,00

980.52012

21.75826

1,002,278,38

909,094.00 1.165.480.36

36.056 97

1.201.537,33

311.652.00

266,178.73

37.376,75

303,555.48

731,854.00

277 66

277.66

220,440,07

3,142.25

223,582.32

287.463.36

7,454.53

294,917 89

133,769,05

733.43

134.502,48

101.046.00

112,946,88

3,451 51

116.398.39

77,68500

82.65982

1,096,66

83,756,48

93.255,00

115,13502

1,36910

116,504 12

$

6.209.310.00 $ 6.297.492.10 $ 172,70882 $ 6.470.20092

201.37900 53,718,00

274,796,96 5,525,99

56,677.60 48,461.58

331,47456 53.987,57

TOTAL aBE FORMULA FUNDS

$

6,464,40700 $ 6.577,815,05 $ 277,84800 $ 6,855,66305

(1) Compnsed of State Funds plus Local Five Mill Share

see notes to the general-purpose finanaal statements,

- 32-

CHARLTON COUNTY BOARD OF EDUCATION GENERAL FUND - aUALlTY BASIC EDUCATION PROGRAM (aBE)
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2001

SCHEDULE "5"

Folkston Elementary School Chartton County High School Bethune Elementary School St. George Elementary School Central Office (Alternative Education Program)
TOTAL
(1) Comprised of State Funds plus Local Five Mill Share.

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

$

1,849,597.00 $

1.784,708.70

2,230,434.00

2,625.334.00

1,413,546.00

1,430,069.78

622,478,00

628,888.44

93,255.00

1,200.00

$

6.209,310.00 $ =-======6..,.4.=70~.=20=0=.9=2

See notes to the general-purpose financial statements. - 33-

SECTIONll COMPLIANCE AND INTERNAL CONTROL REPORTS

RUS~ELL W. HINTON
STATE AUDITOR
(404) 6562174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Wu!>hmgton Slreet. S W.. SUite 214 Atlanta. Georgia 30334-1<400
June 27, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Charlton County Board of Education
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Ladies and Gentlemen:
We have audited the financial statements of Charlton County Board of Education as of and for the year ended June 30, 2001, and have issued our report thereon dated June 27, 2002. This report was qualified for various departures from generally accepted accounting principles, as identified in the auditor's report on the general-purpose financial statements. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether Charlton County Board of Education's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination offinancial statement amounts. However, providing an opinion on compliance with those provisions was not an objective ofour audit, and accordingly, we do not express such an opinion. The results ofour tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered Charlton County Board ofEducation's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the fmancial statements and not to provide assurance on the internal
2001YB-41

control over financial reporting. However, we noted a certain matter involving the internal control over financial reporting and its operation that we consider to be a reportable condition. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over financial reporting that, in ourjudgment, could adversely affect Charlton County Board ofEducation's ability to record, process, summarize and report financial data consistent with assertions of management in the financial statements. The reportable condition is described in the accompanying Schedule ofFindings and Questioned Costs as item FS-6241-01-0 I.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we consider item FS-6241-01-01 to be a material weakness.
This report is intended solely for the information and use of the management, members of the Charlton County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
II
~ V"..... (A) .A-I~t
R ssell W. Hinton State Auditor
RWH:as 2001YB-41

RUSSEtL. \V. HINTON
STATE AUDITOR 1404} 656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS 254 Washington Street. S w.. SUJlC 214
Atlanta. GeorgIa 30334-H400
June 27, 2002

Honorable Roy E. Barnes, Governor Members of the General Assembly Members of the State Board of Education
and Superintendent and Members of the Charlton County Board of Education
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON 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 U.S. Office ofManagement and Budget (OMB) Circular A-J33 Compliance Supplement that are applicable to each ofits major Federal programs for the year ended June 30, 2001. Charlton Couni.y Board ofEducation's major Federal programs are identified in the Summary of Auditor's Results Section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major Federal programs is the responsibility of 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 ofcompliance in accordance with auditing standards generally accepted in the United States ofAmerica; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A133, Audits of States, 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 ofcompliance requirements referred to above that could have a direct and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the 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 ofEducation's compliance with those requirements.
2001SA-40

In our opinion, the Charlton County Board ofEducation complied, in all material respects, with the requirements referred to above that are applicable to each of its major Federal programs for the year ended June 30, 2001.
Internal Control Over Compliance
The management of 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-l33.
We noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation ofthe internal control over compliance that, in our judgment, could adversely affect the Charlton County Board of Education's ability to administer a major Federal program in accordance with applicable requirements oflaws, regulations, contracts and grants. Reportable conditions are described in the accompanying Schedule ofFindings and Questioned Costs as items FA-6241-01-01, FA-6241-01-02 and FA-6241-01-03.
A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level of risk that noncompliance with the applicable requirements oflaws, regulations, contracts and grants that would be material in relation to a major Federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe none of the reportable conditions described above are a material weakness.
This report is intended solely for the information and use of the management, members of the Charlton County Board ofEducation, Federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.
Respectfully submitted,
RWH:as 2001SA-40

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, 2001

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6241-99-02 FS-6241-00-0 1 FS-6241-00-02

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-6241-00-02

The Charlton County Board of Education has been unable to hire additional staff to proceed with a General Fixed Assets Account Group.

PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6241-00-01 FA-6241-00-02 FA-6241-00-03 FA-6241-00-04

Unresolved - See Corrective ActionlResponses Unresolved - See Corrective ActionlResponses Partially Resolved - See Corrective Action/Responses Previously Reported Corrective Action Implemented

CORRECTIVE ACTIONIRESPONSES.

ELIGIBILITY Failure to Maintain Documentation for Eligible Attendance Areas Finding Control Number: FA-6241-00-01

Title I staffwill document and have available documentation ofeligibility. Documentation is available at the school and at the Board of Education.

EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Finding Control Number: FA-6241-00-02

Title I staff will complete and have on file at the Board of Education a copy of their inventory. All equipment will be marked and placed on the inventory records.

- 1-

CHARLTON COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30. 2001
PRIOR YEAR FEDERAL AWARD FINDINGS AND QUESTIONED COSTS CORRECTIVE ACTIONIRESPONSES MATCHING, LEVEL OF EFFORT AND/OR EARMARKING PROCUREMENT Inadequate Internal Controls Finding Control Number: FA-6241-00-03 Title I staff will attach required bids to purchase orders.
-2-

SECTION IV FINDINGS AND QUESTIONED COSTS

CHARLTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30. 2001

I SUMMARY OF AUDITOR'S RESULTS

1. Type of Report Issued on the Financial Statements The auditor's opinion on the Charlton County Board ofEducation's financial statements was qualified for various departures from generally accepted accounting principles.

2. Reportable Conditions in Internal Control Disclosed by the Audit of the Financial Statements The audit report for the Charlton County Board ofEducation disclosed a financial statement reportable condition related to the following control category.

General Fixed Assets

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

3. Noncompliance Material to the Financial Statements The audit of the 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 ofEducation disclosed reportable conditions in internal control over major programs for the following compliance requirements.

Procurement Equipment and Real Property
Management

Eligibility

None ofthe reportable conditions described above are considered to be material weaknesses.

5. Type of Report Issued on Compliance for Major Programs The auditor's opinion on the 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 .51 O(a) of OMB Circular A-133 The Charlton County Board of Education's audit disclosed audit findings required to be reported by section .510(a) ofOMB Circular A-133. These audit findings are included in section N of this report.

- 1-

CHARLTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
I SUMMARY OF AUDITOR'S RESULTS
7. Major Programs Federal awards audited as major programs are as follows: 10.553 Food and Nutrition Program - Food Services - School Breakfast Program 10.555 Food and Nutrition Program - Food Services - National School Lunch Program 84.010 Elementary and Secondary Education Act - Title I - Administrative Site Evaluation 84.010 Elementary and Secondary Education Act - Title I - Grants to Local Educational Agencies
8. Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was $300,000.00.
9. Low Risk Auditee The Charlton County Board of Education did not qualify as a low risk auditee as defined by Section .530 ofOMB Circular A-133.
n FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
GENERAL FIXED ASSETS Failure to Maintain General Fixed Assets Account Group Reportable Condition-Material Weakness Repeated From Prior Year Finding Control Number: FS-6241-01-01
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 ofthe School District being incomplete and not in accordance with generally accepted accounting principles. Appropriate action should be taken by the School District to establish accounting controls and procedures to provide for maintenance ofa General Fixed Assets Account Group. These subsidiary records should include an inventory of land, buildings and equipment owned by the School District and should include, but may not be limited to, date acquired, acquisition cost, estimated replacement cost, location and description. Detailed records should be maintained ofall additions and deletions to the General Fixed Assets Account Group.
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CHARLTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS
YEAR ENDED JUNE 30, 2001
ill FEDERAL AWARD FINDINGS AND QUESTIONED COSTS
ELIGffillJTY Failure to maintain Documentation for Eligible Attendance Areas Reportable Condition U. S. Department of Education Through Georgia Department of Education Repeated From Prior Year Finding Control Number: FA-6241-01-01
Internal control tests performed on the Title I - Grants to Local Educational Agencies program (CFDA No. 84.010) revealed that the School District could not provide documentation to support section IV (Determination ofEligible and Participating Attendance Areas and School Allocations) of its Title I Application (DE form 370). As provided in the grant application and required by 34 CFR 76.730, the School District assures the Georgia Department ofEducation that it will keep records and provide information as may be required for fiscal audit purposes.
The deficiency occurred because management failed to establish procedures to ensure that proper documentation is maintained. The School District should establish procedures to ensure that proper documentation is maintained in compliance with the requirements of the grant application and 34 CFR 76.730. The Georgia Department of Education should review this matter and determine if a reclaim of funds is appropriate.
EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Reportable Condition Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department of Education Repeated From Prior Year Finding Control Number: FA-6241-01-02
Property management records maintained by the School District for the Title I - Grants to Local Educational Agencies program (CFDA No. 84.010) failed to meet property management standards set forth in Chapter 41 of the Financial Management for Georgia Local Units of Administration (FMGLUA). The equipment records as presented for audit were incomplete and the annual physical inventory, reconciling the inventory count to the property records maintained at the Central Office, was not performed. These conditions occurred because management failed to maintain complete property management records and to ensure that physical inventory counts were performed and reconciled to property management records.
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CHARLTON COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30. 2001
ill FEDERAL AWARD FINDINGS AND OUESTIONED COSTS
EQUIPMENT AND REAL PROPERTY MANAGEMENT Inadequate Inventory Records Reportable Condition Nonmaterial Noncompliance U. S. Department of Education Through Georgia Department of Education Repeated From Prior Year Finding Control Number: FA-6241-01-02
An inventory system should be implemented that provides for complete inventory records and identification of all equipment as outlined in Chapter 41 ofthe FMGLUA. An annual physical count should be performed and reconciled to the property management records to ensure the accuracy of inventory records.
PROCUREMENT Inadequate Internal Controls Reportable Condition U. S. Department of Education Through Georgia Department of Education Repeated From Prior Year Finding Control Number: FA-6241-01-03
Internal Control tests performed on the Title I - Grants to Local Educational Agencies program (CFDA No. 84.010) revealed deficiencies in the District's procurement procedures. Audit tests performed on the Title I program revealed that the School District did not follow the procurement policy established by the School District which states that "Bids from at least three different sources will be obtained on all items purchased for a cost of more than $1,000.00 per item".
Three invoices containing items with an individual value greater than $1,000.00 were selected for testing. The School District was not able to document the required bids for any of the selected items.
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