Chattooga County Board of Education, Summerville, Georgia, report on audit of the financial statements for the fiscal year ended June 30, 2002

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CHATIOOGA COUNTY BOARD OF EDUCATION -TABLE OF CONTENTS-

SECTION I

FINANCIAL

INDEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATIONSCHEDULE 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 - BUIXiET AND ACTUAL

(NON-GAAP BASIS)

GENERAL AND SPECIAL REVENUE FUNDS

6

D NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

7

ADDITIONAL FINANCIAL INFORMATION

COMBINING STATEMENTS

SPECIAL REVENUE FUND

E

COMBINING BALANCE SHEET

20

F

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

22

CAPITAL PROJECTS FUND

G

COMBINING BALANCE SHEET

24

H

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

25

SCHEDULES

1 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

26

2 SCHEDULE OF STATE REVENUE

28

3 SCHEDULE OF APPROVED LOCAL OPTION SALES 1AX PROJECfS

31

ALLOTMENTS AND EXPENDITURES

GENERAL FUND - QUALITY BASIC EDUCATION PROGRAMS (QBE)

4

BY PROGRAM

32

5

BY SITE

33

CHATIOOGA COUNTY BOARD OF EDUCATION - TABLE OF CONTENTS -
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 wrrn GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE wrrn REQUIREMENTS APPLICABLE TO EACH MNOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
SECTIONID 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

SECfION I FINANCIAL

U~~I,LL W. II1N1UN
STATE AUDITOR
{"(\.oIl f56-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 WJ,hmglon Strcet ~ W ~ulle 214 AIIJnl', (,corgIJ 30111-!\400
May 9. 2003

Honorable Sonny Perdue. Governor Members of the General Assembly Members of the State Board of EducatIOn
and Supenntendent and Members of the Chattooga County Board of EducalJon
!l\'DEPENDENT AUDITOR'S COMBINED REPORT ON GENERAL-PURPOSE FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Ladles and Gentlemen
Wc have audited the accompanyIng general-purpose financial statements of the ChaUooga County Board of EducatIOn. as of and for the year ended June 30, 2002, as hsted In the table of contents These general-purpose financial statcmcnts are the responslblhty ofthe Chattooga County Board of Education's management Our rcsponslblhty IS to express an 0plmon on these gencral-purpose financial statements based on our audit
We conducted our audit In accordance WIth auditIng standards generally accepted In the Umted States of Amenca and the standards applIcable to finanCial audlls contaIned In Government AudItIng Standards. Issued by the Comptroller General of the Umted States Those standards reqUIre that we plan and perform the audIt to obtaIn reasonable assurancc about whether the finanCial statements are free ofmatenal misstatement An audit Includes ell.amInIng, on a test basiS, eVidence supportIng the amounts and disclosures In thc finanCial statements An audit also Includes assessIng the accountIng pnnclples used and slgmficant csltmates made by management, as well as evaluatIng the overall financial statement presentatIOn We beheve that our audIt provIdes a reasonable basIS for our opInion
As desenbed In the notes to the general-purpose finanCial statements, the Board of Eduealton's finanCial statements have been prepared USIng certaIn accountIng practices and pohcles WhIch, In our OpIniOn, vary In some respects from generally accepted accountIng pnnclples These vanances are desenbed as follows

2002ARL-13

The gencral-purpose financial statements of the Board of EducatIOn did not contaIn a General FIxed Assets Account Group to account for property and eqUIpment owned by the Board of Education which should be Included to conform to generally accepted accounting pnnclples
School actiVIty accounts maintained at the indiVidual schools are not Included In the general-purpose fmanclal statements To conform to generally accepted accounting pnnclples, these accounts should be Included In the general-purposc finanCial statements
The Board of Education did not recogmze as expenditures, In the year ended June 30, 2002, a portIOn of salanes and the corresponding employer's cost of related benefits earned for contractual services complcted pnor to June 30, 2002 Also funds receIved, subsequent to June 30, 2002, from the GeorgIa Department of EducatIOn for the State's share of these unrecorded salanes and related benefits were not recordcd as revenue In the year under review Conversely, the Similar expendItures and related revenues for contractual services completed pnor to June 30, 2001, were Improperly recorded In thc year ended June 30, 2002 To conform to generally accepted accounting pnnclples, revenues should be recorded when available and measurable and cxpendltures should bc recordcd when Incurred, rather than when funds are receIved or disbursed
The aggregate effects on the general-purpose finanCial statements of these vanances or omiSSIOns have not been determmed, but are bclieved to be matenal
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 matenal respects, the finanCIal posItion of the Chattooga County Board of Education as ofJune 30, 2002, and the results of Its operations for the year then ended, In conformity With accounting pnnclples generally accepted In thc Umted States of Amenca
In accordance With Government Auditing Standards, wc have also Issued our report dated May 9, 2003, on our conSideration of the Chatlooga County Board of EducatIOn's Internal control over finanCial reporting and our tests of ItS compliance With certain proVISions of laws, regulatIOns, contracts and grants That report IS an Integral part of an audit performed In accordance With Government Auditing Standards and should be read In conjunction WIth tlus report m consldenng the results of our audit
Our audit was performed for the purpose of formmg an opmlon on the general-purpose finanCial statements of the Chatlooga County Board of Education taken as a whole Thc accompanymg comblnmg statements (ExhibIts E through H) and the finanCial schedules (Schedules I through 5), which Includes the Schedule of Expenditures of Federal Awards as reqUlrcd by U. S Office of Management and Budget Circular A-133, Audas of States. Local Governments. and Non-Profit OrgantzatlOns, arc presented for purposes of additional analYSiS and are not a required part of the general-purpose finanCial statements Such mformatlon has been subjected to the audltmg
2002ARL-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 t1urd paragraph, such InformatIOn IS fairly stated, In all matenal respects, In relatIOn to the general-purpose financial statements taken as a whole.
A copy of this report has been filed as a permanent record In the office ofthe State Auditor and made available to the press of the State, as proVided for by OffiCial Code ofGeorb'la Annotated Seellon 506-24
Respectfully submitted,

RWH'gp 2002ARL-13

Ru ell W. HInton State Auditor

CHATIOOGA COUNTY BOARD OF EDUCATION

CHATTOOGA COUNTY BOARD OF EDUCATION COMBINED BALANCE SHEET
AlL FUND TYPES AND ACCOUNT GROUP JUNpO 2002

~ Cash and Cash EquIValents
Invesbnents
Accounts Receivable
Prepaid Items
Inventones Food Donated Commod,tIes Purchased Food
Amount Available In Debt 5eMeS Fund
Amounllo be ProvIded In Future Yea",
For Paymant at
Bond Debt Capital Laaae Agreemants

GENERAL FUND

GOVERNMENTAL FUND TYPES

SPECIAL

CAPITAL

REVENUE

PROJECTS

FUND

FUND

S 1,250,356 53 S 582,93815 S 2,868,87994

5,219,550 00

438,980 39

247,66995

16,96934

20,860 20 15,846 43

Total Assets

S 1.689.336 92 S 867,31473 S 8,105.399 28

LIABILITIES AND FUND EQUITY
LIABILITIES
Accounts Payabta Salarla. Payable Expired Grant Balances Payable Contracts Payabla Retalnagas Payable Deterred Revenue Caprtal Lease Agreements General ObHgation Bonds Payable
TotallJab~rtIas
FUND EQUITY
Fund Balances Reserved For Bus Replacement Funds For Debt ServIce For Expired Grant Balances/Questioned Costs For Inventones Food Donated Cornroodltle. Purchased Food For Purpose of Bond Issue
Unreserved Undeslgnated
Total Fund Equity

S

243,04988 S 121,133 82

212,769 68

10,429 51

27,42818

S

128,384 32

24,02000

S

253,47939 S 489,71600 S

24,02000

S

118,56800

S
1,317,28953
S 1,435,857 53 S

20,860 20 15,84843
S
340,89210
377,598 73 S

8,081,37928 OQQ
8,081 ,37928

Total Llabmtles and Fund Equity

S 1.689.336 92 S 867,31473 S 8.105,399 28

The notes to the general-purpose finanCIal statements are an Integral part of thiS statement -2-

EXHIBIT"A"

DEBT SERVICE
FUND $ 1,080,761 14
62615792

ACCOUNT GROUP
GENERAL LONG-TERM
DEBT

TOTALS

(Memorandum Only)

JUNE 30, 2002

JUNE 30, 2001

$ 5,762,935 76 $ 1,504,886 00

5,219,550 00

1,329,777 60

2225,899 07

148 77

$ 1,706,91906

20,860.20 15,846 43
1,706,91906

19,877 03 11,44883
1,075,073 20

7,083,080 94 811,64314

7,083,08094 811,64314

1,114,926 80 867,064 03

$ U06,91906 $ 9,601,643 14 S 21,970,61313 $ 6,819,32373

$

364,183 70 $

197,07877

212,76968

185,829 58

37,85769

44339

24,020 00

18,00000

15,696 20

128,384 32

26,029 68

$

811,64314

811,64314

867,064 03

8,790,000 00

8,790,00000

2,190,000 00

$ 9,601,64314 $ 10,368,858 53 $ 3,500,14165

$ 1,706,91906
000 S 1,706,91906

$

118,568 00

1,706,91906 $ 1,075,07320

68573

20,860 20 15,84643 8,081,37928
1,658,18163
$ '1,601,754 60 $

19,877 03 11,44883 1,035,74561
1,176,35168
3,319,162 08

$ 1,706.91906 $ 9.601,64314 $ 21,970,61313 $ 6,819,32373

-3

CHATTQQGA COUNTY BOARD OF EDUCATION COMBINED STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BAlANCES
ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30 2002

REVENUES
Stale Funds Federal Funds TllXBS Other Funds
Total Revenues
EXPENDITURES
Current InstructlOn Support 5ervlces Pupil serviceS Improvement of Instrucbonal Services Educational Medls 5eMces General AdmInistratIOn School Admlnlstrabon BUSiness Administration MaIntenance and Operation of Plant Student Transportatlon servICeS central Support 5elVlce. Other Support 5elVlceS Food 5eIVlCOS Operabon Community SelVlceS Operabons
Capital Outlay Debt Service
PmClpal Interest Paylng Agent Fee.
Total Expendrtures
Excess of Revenues over (under) Expendrtures
OTHER FINANCING SOURCES (USES)
Proceeds from General ObllgalJon Bonds Par Value
Caprtal LeaBes Operating Transfers In Operating Transfers Out
Total Other FlIlIIncing Sources (Use.)
Excess of Revenues and Other Flnanang Sources over (under) Expenditures and Other FinanCIng Uses
FUND BAlANCE JULY 1
Adjustments PriorYe.r Revenue SPLOST (see Note 1)
Faocllnvenlory ~ Net Change In Penod Donated Commochbes Purchesed Food

GENERAL FUND

SPECIAL REVENUE
FUND

$ 13713399 77 $ 512,71840

39,38835 2,998,10786

5,14116069

240,177 15

384,18373

$ 19,134,12596 $ 3,895,009 99

$ 13,18595871 $ 1,740,07467

521,96889 275,43117 532,521 64 345,93823 1,321,98688 129,646 99 1,328,476 17 573,25357
63,402 18
24690 11348

502,02988 369,477 45
4,17814 194 96 95582
28,42981 11805572
1,250 00 22,87003 1 24697673
43060

5542089 51,22311

$ 18,385,58881 $ 4,034,92381 $ 748,53715 $ -139,91382

$ 185,60579 $ -194,51690
$ -194,51690 $ 185,60579

$ 554,02025 $ 45,691 97

881,83728

326,52599

98317 4,39760

FUND BAlANCE JUNE 30

$ 1.435,857 53 $ 377,598 73

The notes to the general-ptXPose finanCIal slatements are an mtegral part of thIS statement -4-

EXHIBIT "8"

CAPITAL PROJECTS
FUND

DEBT SERVICE
FUND

TOTALS (Memorandum Only)
YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$ 14,226,11817 $ 14,027,29999

3,037,496 21

2,248,41514

$ 1,445,993 26

6,587,15395

5,982,704 92

$ 69,608 61

21,14416

715,11365

696,37646

$ 69,60861 $ 1,467,13742 $ 24,565,881 98 $ 22,954,796 51

$ 14,926,033 38 $ 13,834,95237

$ 184.91000 482.10614

1.023.998 77 644.908 62 532.521 64 350.11637
1.322.18184 315.51281
1.356.90598 691.309 29 64.65218 23.11693
1.247.09021 43060
482.106 14

674.33557 576.44079 515.18316 306,081 48 1.219.926 33 147.84599 1.893.442 07 822.47912
35.256 21 6.52307
1,129,363 83
2,496.669 56

$ 1.070.000 00 84.31500 80000

1.125.42089 135,53811 80000

1.056.27597 172,484 53 79500

$ 667.01614 $ 1.155.11500 $ 24.242.643 76 $ 24,888,054 85

$ -597,40753 $ 312.02242 $ 323,23822 $ -1,933.258 34

$ 7,670.00000
8.91111 $ -35.86991
$ 7.643,041 20 $

$ 35.86991
35.86991 $

7.67000000 $
230.386 81 -230,386 81
7.670,000 00 $

628.868 00 133.27204 -133.272 04
628,86800

$ 7.045.63367 $ 347.89233 $ 1.03574561 1.075.07320

7,993,238 22 $ -1.304.390 34

3.319.182 08

4.625,178 86

283.95353

283 953 53
98317 4,39760

-1.96592 35948

$ 8.081,37928 $ 1,706:91906 $ 11:601,75460 $ 3,319:18208

-5-

CHATTQQGA COUNTY BOARD OF EPUCATION COMBINED STATEMENT OF RE\fENUES EXPENPITURES ANp CHANGES IN FUND BALANCES
BUDGET AND ACTIJAl - lNON-GMP BASIS) GENERAL AND SPECIAl RE\fENUE FUNDS
)'EAR ENDED JUNE 39 2002

EXHIBIT C

REVENUES
State Funds Federal Funds
Taxes Other Foods
Total Revenues
EXPENDlllJRES

GENERAL FUND

BUDGET

ACTUAL

$ 12,757,794 20 S 13,713,399 n

39,388 35

5,213,26700

5,141,160 69

137,900 00

24O,ln 15

$ 18,108,961 20 $ 19,134,12596

Currant InslnJcbon
Support ServIces
PUpil Sel'VlC8S Improvement of Instruc:lK:lna1 Services
Educa11ona1 Media Setv1ces General Administration School AdmIntstra1lon BuSlll9SS Adn*llstration Mamtenance and Opera1Jon of Plant Sludem TransportatIOn ServIC8S
Central Sl4lPOI1 SeMC8S Other" Support ServICes
Food Services 0 _ Communrty 5eMces OperationS Debt Servoce

$ 13,343,811 56 $ 13,185,958 71

434,623.68 305,89760 528,079 26 356 34173 1,283,756 74 116,405 34 1,380,940 00 n5,58048
79 827 76 4,67500

521,968 89 275,431 17 532,52164 345,938 23 1,321,986 86 129,846 99 1,328,476 17 573,253 57
63,402 18 246 90 11348

106,644 00

Total expenditures Excess of Revenues over (under) Expendrtur8S

$ 18,609,739 15 $ 1813851588 81 $ .5OO,rn 95 $ 748,53716

OTHER FINANCING SOURCES lUSES)

Other 5oU'ces Other Uses

$ -194,51690

Total Other Financing Sources (Uses)

$ -194,51690

Excess of Revenues and Other Flnanclng Sources over (under) Expenditures and Other Flr\8oong Uees S -5OO,rn95 $

554 020 25

FUND BALANCE JULY 1 200 '
Ad)us1ments

755.633 "5

86183728

FUNp BALANCE JUNE 30 2002

S 254,855 50 S 1:435:857 53

SPECIAL REVENUE FUND

BUDGET

ACTUAL

$ 237,836 00 $ 512,71B 40 2,163,27000 2,998,10786

371,700 00

364,18373

S 2,m,60600 $ 3,895,009 99

$ 1,582,247 53 $ 1,740,07467

295,962 34 125,035 00

502,029 86 369,4n45

13,10000
25 456 93 98,64100
7,48700 1 130,93700

4,17814 19496 955 82
28,429 81 118,055 72
1,250 00 22 870 03 1,246,976 73
43060

$ 3,279,086 80 $ 4,034,92381 $ -506,280 60 $ -139,91382

$ 185,605 79

$ 185,605 79

$ -506 280 60 $ 45,69197

223 436 11

29520013

21.495 11

$

-261 34958 1

S

340,89210

The notes to lhe general-purpose ftnanClal statements am an Integral part of this statement - 6-

eTTAnOOGA COUNTY BOARD OF EDUCAnON

EXHIBIT "D"

KOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REPORTING ENTITY
The Chattooga County Board of EducatIOn (School Dlstnct) 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 Supenntendent appointed by thc Board. The School Dlstnct IS organlzcd 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 cntlty Accordmgly, the School Dlstnct IS a pnmary government and COnsiStS of all the orgaruzatlons that composc ItS legal entity
FUND ACCOUNTING
The School Dlstnct uses funds and an account group to report on Its finanCIal posItion and the resuJts 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 reportmg deVice deslgncd to proVIde accountabIlIty for certam assets and IIabillhes that are not recorded In the funds because they do not dIrectly affect expendable aVailable finanCIal resources
Gencral Fixed Asscts are recorded as expendltlrres In the vanous funds at the time of purchase A General FIxed Assets Account Group IS not presently mamtamed by the School Dlstnct To conform to generally accepted accounting pnnclples, 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, IIablhhes and fund eqUity, nor the revenues, expenditures and changes In fund balances of these accounts are rcflccted m these finanCIal statements To conform to generally accepted accounting pnnclples. these accounts should be recorded m the general-purpose finanCIal statements
The general-purpose finanCIal statements account for all State, Federal, Taxes and Other funds under control of the School DIStnCt, m complIance WIth generally accepted accounting pnnclples applIcable to governmental umts, unless otheIWIse dIsclosed In these notes Funds and the account group prcsented In thIS report arc as follows
GOVERNMENTAL FUND TYPES - are used to account for all or most of the School Dlstnct's educational actiVIties Governmental Fund Types Include
GENERAL FUND - thc fund used to account for all finanCIal resources of the School Dlstnct exeept those reqUired to be accounted for m another fund These transactions relate to resources obtained and used for services proVIded by a board of educatIOn

-7-

CHAITOOGA COUNTY BOARD OF EDUCAnON

EXHmIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

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 rcstnctcd to expenditures for specified purposes. These funds are received pnmanly from the Georgia Department of Education and from the Federal government to accomplish speCific educational objectIves
CAPITAL PROJECTS FUND - thc 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 accUJnulat:lon ofresources for, and the payment of, general long-term pnnclpal, Interest and paYIng agent fees
ACCOUNT GROUP
GENERAL LONG-TERM DEBT ACCOUNT GROUP - A finanCial rcpomng deVIce used to account for general oblIgatIOn debt outstanding and capital lease obligations
BASIS OF ACCOUNTING
The accounting and finanCial reporting treatment applied to a fund IS determIned by ItS measurement focus. All governmentaJ funds are accounted for uSing a current finanCial resources measurement focus With thiS measurement focus, onJy current assets and current liabilities generally are mcluded on the balance sheet Operat:lng statements ofthese funds present mcreases (I e , revenues and other finanCing sources) and decreases (I e , expenditures and other financmg uses) m net current assets Their reported fund balancc IS conSidered a measure of aVailable spendable resources.
Llablhtles 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 usmg 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 of the transactIOn can be determined and "avaIlable" means collectible WithIn the current penod or soon enough thereafter to be used to pay hablht:les of the current penod The School Dlstnct conSiders receivables collected Within sIxty days after yearend to be available Property taxes, sales taxes and Interest are conSidered to be susceptible 10 accrual Nonexchange transactIons, In whIch the School Dlstnct 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 recogruzed m the fiscal year for which the taxes are leVIed Revenue from sales taxes IS recogruzed 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 sat:lsfied.

-8-

CHATIOOGA COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures arc generally recogruzed when the related fund liability IS Incurred.
A departure from the above defimtlons IS the accountIng treatment afforded the final two payments on General Fund teachers' and bus dnvers' contracts, and the resources aVailable from the Georgia Department of Educahon for the State's share of these contracts Dunng fiscal year 2002, a substantlal number ofpersonnel ofthe School Dlstnct were employed for a one hundred and runety day penod begmrung In August 2001 and endIng In early June 2002 Personnel contracts for thiS employment penod specify that compensatlon be paid In twelve equal monthly payments begmrung In September 2001 and endmg In August 2002 State grants to fund the State's share of these contracts were disbursed from the Georgia Department of Educatlon to the School DIstnct m the same twelve months As of June 30, 2002, compensahon under these employment contracts had been earned, but two of the twelve monthly payments, due for July and August 2002, had not been made Payments for these two months were made and recorded as expenditures by the School Dlstnct subsequent to June 30, 2002 Also, the State's portIOn of the compensatlon paid In July and August 2002 was receIved and recorded as revenue In the fiscal year subsequent to June 30, 2002 Conversely, the SimIlar expendItures and related revenues for contractual ServICes completed pnorto June 30, 2001, were recorded In the year ended June 30, 2002 Generally accepted accountmg pnnclples reqUIre that revenues be recorded when aVailable and measurable and that expendItures be recorded when Incurred, rather than when funds arc received or disbursed
BUDGET
Thc Chattooga County Board of EducatIOn's budget IS a complete finanCial plan for the School Dlstnet's fiscal year and IS based upon estImates of expenditures together WIth probable fundmg sources There IS no statutory prohibition regardIng overexpendIture ofthe budget at any level The budget for all governmental funds IS prepared by fund, funetlon and object The legal level of budget control was established by the Board at the aggregate level The budget for governmcntal funds was prepared on a basIS other than generally accepted accountlng pnnclples
The budget process begms when the School Dlstnet's admmlstratlon prepares a tentatlve budget for the Board's approval After approval ofthiS tentatlve budget by the Board, such budget IS advertised at least once In a newspaper ofgeneral cIrculatIOn In the locality At the next regular meetIng ofthe Board after advcrtIsement, the Board receives comments on the tentatlve budget, makes reVISions as necessary and adopts a final school budget T1us final budget IS then sublfUtted, In accordance WIth proVISIOns of the Quality BasiC EducatIOn Act, OCGA SectIOn 20-2-167(c), to the Georgia Department of Educatlon The Board may Increase or decrease the budget at any tlmc dunng the year All unexpended budget authonty lapses at fiscal year-end.
The Statement of Revenues, Expenditures and Changes In Fund Balances - Budget and Actual presents actual and budgeted data for the SpeCial Revenue Fund To facIlitate companson WIth the budget, the followmg adjustments have been made to fund balance as reflected on Exlublt "B" oftlus report

-9-

CHAITOOGA COUNTY BOARD OF FDUCATION

EXHIBIT "D"

:-;0 nos TO THE GI:NERAL-I'URl'OSE FINANCIAL STATEMENTS

flJNE 30, 2002

Notc I ST..iMMARY OF SIGNIFICA"lT ACCOUNTING POLICIES

Special Revenue
Fund

FLTND BALANCE JULY 1,2001

S 326,52599

Adjustments Inventones - July 1,2001 Food Donated CommoditIes Purchased Foods

-19,877.03 -11,44883

Fund Balance July 1,2001 (Budget BasIs)

$ 295,200 13

Excess of Revenues and Other Financing Sources over (under) ExpendItures and Other FinancIng Uses

45,691 97

F'1J};D BALANCE JUNE 30, 2002 (Budget BasIs)

$ 340.892.10

CASH AND CASH EQUIVALEI'\TS

COMPOSITION OF DEPOSITS Cash and cash eqUIvalents consist of cash on hand, demand deposIts and short-term Investments With onglnal matunl1es of three months or less from thc date of acqUlslllon In authonzcd finanCial InstItutIOns Georgia Laws OCGA 45-8-14 authonze the School Dlstnct to depoSit Its funds In one or more solvent banks or Insured Federal savIngs and loan associatIons

INVESTMENTS
COMPOSITION or INVESTMENTS
Investmcnts made by the School Dlstnct In nonparticipatIng Interest-earning contracts (such as certIficates of depOSit) and repurchase agrccments are reported at cost ParticipatIng Interest-earnlng contracts and money market Investments With a matunty at purchase of one year or less are reported at amortized cost Both participatIng Interest-earmng contracts and money market Investments With a matunty at purchase greater than one ycar are reported at fair value The OffiCial Code of Georgia Annotatcd Secllon 36-83-4 authofl7es the School Dlstnct to Invest ItS funds and In selectIng among options for Investment or anlong institutIOnal bids for depOSitS, the highest mte of return shall be the obJcctlve, given eqUIvalent eondllJons of safety and lIqUIdIty Funds may bc Invcstcd In the follOWIng

(I) ObligatIOn; Issued by the State of GeorgIa or by other states,

- 10-

CHA11 OOGA COlINTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2) Obllgallons Issued by the Umted States government,

(3) ObligatIOns fully msured or guaranteed by the Umted States government or a Umted States government agency,

(4) ObligatIons of any corporallon of the Umted States government,

(5) Pnme banker's acceptances,

(6) The Local Governmcnt Investmcnt Pool admmlstcred by the State of Georgia, Office of Treasury and Fiscal ServIces,

(7) Repurchasc ab'Teemcnts, and

(8) ObligatIOns of other political subdivIsions of the State of Georgia

RECEIVABLES

Rcccivables consist of grant reImbursements due on Federal, State or other grants for expenditures made but not reImbursed and other receivables disclosed from mformatlon available ReceIvables arc rccorded when eIther the assct or rcvcnue recogmtlon cntena has been met Receivables recorded on the general-purpose finanCIal statements do not mclude any amounts which would necessitate the need for an allowancc for uncollecllble receivables

PROPERTY TAXES

The Chattooga County Board of CommissIOners fixcd the property tax levy for the 200 I tax digest ycar (calendar year) on October 8, 2001 (lcvydate) Taxes were due on January 16,2002 (lien date) Taxes collectcd wlthm thc current fiscal ycar or wlthm 60 days after year-end on the 2001 tax dIgest are reportcd as revenue m fiscal year 2002 The Chattooga County Tax CommissIOner bills and collects the property taxes for the School Dlstnct, wllhholds 25% of taxes collected as a fee for tax collecllon and rcmllS the balance of taxes collcctcd to the School Dlstnct Property tax revenues dunng the fiscal year ended June 30, 2002 for mamtcnance and operatIons amounted to $3,573,059 86

The tax millagc rate leVIcd for thc 200 I tax year (calendar year) for the Chattooga County Board of LducatlOn was as follows (a mill equals $1 pcr thousand dollars of assessed value)

School OperatIOns

~mllls

- II -

CHATfOOGA COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Notc I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES TAXES
Local OptIon Sales Tax revenue dunng the fiscal year amounted to $1,443,720 43 and was recorded In the General Fund Local Oplion Sales Tax IS to be used for the maIntenance and operatIOn ofthe School Dlstnct
Special Purpose Local OptIOn Sales Tax revenue dunng the year amounted to $1,445,993 26 and IS to be used for capital outlay for educatIonal purposes or debt service This sales tax was authonzcd by local referendum and the sales tax must be re-authonzed at least every five years
Dunng the year under reView, the Georgia Department of Revenue notIfied the School Dlstnct that an error had been made In the Special Purpose Local Option Sales Tax (SPLOST) allocatIon between the Chattooga County Board of EducatIOn and the City ofTnon Board of EducatIon. In the subsequent penod, the School Dlstnct received $378,604 71, of thiS amount, $283,953.53 was determIncd to be SPLOST revenues earned In pnor fiscal years An adjustment to fund balance for pnor year revenues IS reflected on Exhibit "B"
INVENTORIES
FOOD INVENTORIES Inventones of donated food commodities used In the preparatIOn of meals are reported on the Combmed Balance Sheet at their Federally asSigned value Purchased foods mventones are reported on the Combmed Balance Shect at cost (first-m, first-out) Donated food commoditIes are recorded as revenues and expcndltures at the tIme commodity Items are recClved Purchased foods mventones are recorded as expenditures at the tIme of purchase. The mventones reported on the balance sheet for donated food commoditIes and for purchased foods are equally offset by reservatIOns of fund balance which mdlcates that these amounts do not constItute "avaIlable spendable resources" even though they are a component of net current assets
COMPENSATED ABSENCES
Compensated absences represent obhgatlOns of the School Dlstnct relatmg to employees' nghts to receIve compensatIon for future absences based upon servIce already rendered This obhgatlOn relates only to vestmg accumulatmg leave m wluch payment IS probable and can be reasonably estImated No hability has been recorded m the mdlvldual funds for the current portIOn of thiS obligatIon as thIS amount IS decmed Immatcnal to the gcneral-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 m the General Long-Term Debt Account Group as thiS lIablhty IS also deemed to be Immatenal to the fau presentatIOn ofthese finanCial statements

- 12 -

CHATIOOGA COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30. 2002

Note I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL OBLIGATION BONDS
The School Dlstnct 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 financial statements dunng the year bonds are Issued General obligatIOn bonds are direct oblIgatIons and pledge the full fmth and credit ofthe government The outstanding amount of these bonds IS recorded m the General Long-Tenn Debt Account Group.
INTERFUND TRANSACTIONS
The School Dlstnct has the followmg types of Interfund transactIOns
Reimbursements of cxpendltures lllitlally 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 rClmbursements
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 m these columns do not present financial pos1l10n or results of operanons In confonnlty With generally accepted accounnng pnnclples Neither are such data comparable to a consolIdanon 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 m any depository for a time longer than ten days a sum ofmoney which has not been secured by surety bond, by guarantee ofmsurance, or by collateral The aggregate of the face value of sueh surety bond and the market value of secuntIes pledged shall be equal to not less than 110 pcrcent ofthe publIc funds bemg secured after the deductIOn ofthe amount ofdepOSit Insurance If a depOSitory elects the pooled method (OCGA 45-8-13 I) the aggregate ofthe market value ofthe secuntles pledged to secure a pool ofpublIc funds shall be not less than 110 percent ofthe dally pool balance OCGA Section 45-8-11 (b) proVides an officer holdmg publIc funds may, In lus discretion, waive the requlTement for secunty In the case ofoperating funds placed m demand depoSit checking accounts
Acceptable secunty for depOSits COnsiSts of anyone of or any combmanon of the followmg.

- 13-

CHATIOOGA COUNTY BOARD OF EDUCATION

EXIIIBIT "D"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 2 DEPOSITS
(I) Surety bond Signed by a surety company duly qualified and authonzed to transact busmess wlthm the State of Georgia,
(2) Insurance on accounts provided by the Federal DepOSit Insurance CorporatIon,
(3) Bonds, bIlls, notes, certIficates ofmdebtedness or other duect obligations of the Uruted States or of the State of Georgia,
(4) Bonds, bIlls, notes, certificates of mdebtedness or other obligatIOns of the counties or mumclpalitIes of the State of Georgia,
(5) Bonds of any public authonty created by the laws of the State of Georgta, provldmg that the statute that created the authonty authonzed the use of the bonds for thiS purpose,
(6) Industnal revenue bonds and bonds of development authontles created by the laws of the State 0 f GeorgIa, and
(7) Bonds, bills, notes, certIficates of mdebtedness, or other obligations of a subSIdiary corporation of the Umted States government, which are fully gIIarallteed by the Umted States government both as to pnnclpal and mterest 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
CATEGORIZAnON OF DEPOSITS At June 30, 2002, the bank balances were $12,113,97395 The amounts of the total bank balances are clasSified Into three categones of credit nsk
Category I - Cash that IS Insured (e g, Federal depOSitory msurance) or collateralized WIth secuntles held by the School Dlstnct or by the School Dlstnct's agent m the School Dlstnct's name
Category 2 - Cash collateralized WIth secuntIes held by thc pledgmg financial instItution's trust department or agent In the School Dlstnct's Dame
Category 3 - Uncollaterallzed depOSits, (This Includes any bank balance that IS collaterahzed With secuntIes held by the pledging finanCial instItutIon, or by ItS trust department or agent but not In the School Dlstnct's name)
The School Dlstnet's depOSits are clasSIfied by nsk category at June 30, 2002, as follows

- 14-

CHArJOOGA COU1'TY BOARD OF FDVCATION

EXHIBIT "D"

NOTES TO TIlE GENERAL-PURPOSb FINA~C1AL STATEMEl\'TS

JlJNh 30.2002

Note 2 DEPOSITS

Risk Category

Bank Balance

1

$ 300,00000

2

7,072,08143

3

4,741,89252

Total

$12.113,973.95

Note 3 NOl\-MONETARY TRANSACTIONS

The School District receives food commoditIes from the Vmted States Department of Agnculturc (USDA) for school breakfast and lunch programs These commodIties are recorded at their I'ederally assigned value See Note I - Inventories

I\ote 4 RISK MANAGEMENT

The School Dlstnet IS exposed to vanous nsks of loss related to torts, theft of, damage to, and destruellon of asscts. errors or omiSSIOns. job related Illness or Injunes to employees, acts of God and unemployment compensatIOn

Thc School Dlstnct has obtained commerCial msurance for risk ofloss associated With torts, assets, errors or omlsslons,job related Illness or injuries to cmployecs and acts of God (earthquakes) The School District has neither slgmficantly reduced coverage for these nsks nor Incurred losscs (settlements) which exceeded the School Dlstnct's Insurance coverage In any of the past three years

The School District has elected to self-Insure for all losses related to acts ofGod (flood) Thc School Dlstnct has not expenenced any losses related to thiS nsk In the past three years

The School District IS self-Insured wIth regard to unemployment compensatIOn chums The School District accounts for claims wlthm the same fund that the employee's salary and benefits were paid Claims arc accounted for With expenditure and hablhtybemg reported when It IS probable that a loss has occurred. and the amount of that loss can be reasonably estImated

Changes In the uncmployment compensatIon elalms hablhty dunng the last two fiscal ycars arc as follows

2001 2002

Begmnmg 01 Year Itab.htv

Claim, and Changes In Esltmales

Claims Paid

End of Year Ltablltty

S

000 S 2,89025 S 2.890 25 $

000

S

000 $

2,681 95 S

2.681 95 $

000

- 15 -

CHATIOOGA COUN1Y BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 4 RISK MANAGEMENT

The School Dlstnct has purchased surety bonds to proVIde addltJonallnsurance coverage as follows

PositIOn Covered

Amount

Supenntendent Each Pnnclpal

$ 20,00000 $ 5,00000

Note 5 GENERAL LONG-TERM DEBT

CAPITAL LEASES The Chattooga County Board of EducatJon has entered mto a lease agreement as lessee for energy management systems Tills lease agreement quahfies as a capital lease for accountmgpwposes and, therefore, has been recorded at the present value of the future mmImum lease payments as of the date of Its mception

GENERAL OBLIGAnON DEBT OUTSTANDING General Obhgation Bonds currently outstandmg are as follows

Pumosc

Interest Rates

Amount

General Government - Senes 1998 General Government - QZAB - Senes 2002A General Government - Senes 2002B

385% 000% 337%

S 1,120,00000 2,035,000 00 5,635,000,00

S ,790,OOO,()()

The changes m General Long-Term Debt dunng the fiscal year ended June 30, 2002, were as follows

Capital Leases

Gcneral Obligation
Bonds

Total

Balance July 1, 2001

$ 867,064 03 $ 2,190,000 ()() S 3,057,064 03

Additions GO Bonds

7,670,000,00 7,670,00000

Deductions Debt Retlrcd

55.42089 1,070,000 00 1,125.420 89

Balance June 30, 2002

$ 81 L643,14 $ 8,790,000,00 $ 9,60L643,14

- 16 -

CHATIOOGA COUNTY BOARD OF EDUCATION

EXHIBIT "0"

NOTES TO THE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 5 GENERAL LONG-TERM DEBT

At June 30, 2002, payments due by fiscal year which mcludes pnnclpal and mterest for these Items are as follows

Fiscal Year Ended June 30

Capital Leases

General OblIgation
Bonds

Total Debt

2003 2004 2005 2006 2007 2008 - 2012 2013 - 2016

$ 106,644,00 $ 1,293,939 66 $ 1,400,583,66 106,644,00 1,217,29125 1,323,935,25 106,644 00 1,221,400 75 1,328,044 75 106,644 00 1,224,16225 1,330,806.25 106,644 00 1,230,491.50 1,337,13550 533,22000 1,230,388 50 1,763,608,50 26,66200 2,035,00000 2,06 1.662 00

Total Pnnclpal and Interest $ 1,093,10200 $ 9.452,673:91 $10,545,775 91

Deduct Imputed Interest

281.458,86

Net Present Value of Future
Mlmmurn Lease Payments S 811.643.14

Note 6 SHORT-TERM DEBT

The School Dlstnct obtams temporary loans m advance of property tax collectIOns, deposltmg the proceeds m Its General Fund ThiS short-term debt IS to prOVide cash for operatIOns until property tax collectIOns are received by the School Dlstnct m January Article IX, SectIOn V, Paragraph V of the ConstitutIOn ofthe State ofGeorgia lImits the aggregate amount of short-term debt to 75 percent ofthc total gross mcome from taxes collected m the precedmg year and requires all short-term debt to be repaid no latcr than December 31 of the calendar year m which the debt was mcurred

Temporary Loans

Begmmng Balance

AdditIOns

Payments

Endmg Balance

$_ _....lOO~Olloo:O $ 515 000 00 $ 5 ! 5 000.00 $_ _....loI0oll0:.:O

Notc 7 ON-BEHALF PAYMENTS

The School Dlstnct has recogmzed rcvenues and expenditures m the amount of $226,383,58 for health msurance and retirement contnbutlOns paid on the School Dlstnct's behalfby the followmg State AgenCies

- 17 -

CHATIOOGA COUNTY BOARD OF EOUCATION

EXHIBIT "0"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS

JUNE 30, 2002

Note 7 ON-BEHALF PAYMENTS

GeorgIa Department of EducatIOn PaId to the GeorgIa Department ofCornmumty Health For Health Insurance of Non-Certified Personnel In the amount of$195,071 58

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 $31,312 00

Note 8 SIGNIFICANT COMMITMENTS

The followmg IS an analySIS ofslgmficant outstandmg construction or renovation contracts executed by the School Dlstnct as of June 30, 2002

Project

Unearned Executed Contracts

Chattooga County Schools Renovations Proposed New Elementary School, K-5

$ 108,18877 307,00000
$ 415,188,77

Thc amounts descnbed m tlus note are not reflected m the general-purpose finanCial statements

Note 9 CONTINGENT LIABILITIES

Amounts received or receivable pnncipally from the Federal government are subject to audit and review by grantor agencies This could result m requests for reimbursement to the grantor agency for any expenditures which are disallowed under grant terms The School Dlstnct belIeves that such disallowances, If any, Will be Immatenal to ItS overall financial posItion

Note I0 ACCUMULATED EMPLOYEES' LEAVE

Personnel employed on a twelve month basiS shaH be entitled to ten days of armualleave Annual leave Will be accumulated at the rate of 83 days per month and Will be accumulative to thirty days The School Dlstnct currently IS pa)'lng employees, at the current rate of pay, for unused leave up to the maximum accumulated vacation leave at the time of termmatlOn or retirement; however, the School Dlstnct does not have a wntten polIcy to support these payments Sec Note 1 -
compensated absences.

- 18 -

CHATIOOGA COUNTY BOARD OF EDUCATION

EXHIBIT "D"

NOTES TO TIlE GENERAL-PURPOSE FINANCIAL STATEMENTS
JUNE 30. 2002

Note II: RETIREMENT PLANS

TEACHERS RETIREMENT SYSTEM OF GEORGIA (TRS)

TRS PLAN DESCRIPTION Substantially all teachers, admInIstrative and clencal personnel employed by local school distncts are covered by the Teachers Retirement System of GeorgIa (TRS), whIch IS a cost-shanng multIple employer defined benefit pensIOn plan TRS proVIdes servIce retlrement, 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 obtamed from the Georgia Department of Audits and Accounts

TRS CONTRIBUTIONS REQUIRED AND MADE Employees ofthe School Dlstnct who are covered by TRS are reqUired by State statute to contnbute 5% of theIr gross earrungs to TRS The School Dlstnct makes monthly employer contnbutlOns to TRS at rates adopted by the TRS Board of Trustees In accordance WIth State statute and as adVised by their Independent actuary. The reqUired employer contnbutIon rate IS 9 24% and employer contnbutIons for the current fiscal year and the precedIng two fiscal years are as follows

FIscal Year

Percentage Contnbuted

ReqUired ContnbutIon

2002 2001 2000

100% 100% 100%

$ 1,160,80431 S 1,304,981 09 $ 1,235,990 05

- 19 -

CHATTOOGA COUNTY BOARD OF EDUCATION COMBINING BALANCE SHEET SPECIAL REyENUE FUND JUNE 30, 2002

ASSETS
Cash and Cash Equ,valents
Accounts Receivable
Inventones Food Donated Commod,bes Purchased Food

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

$ 402,581 05 $

72,01247

5,52231

20,86020 15,84643

Total Assets

$ 444,809 99 $

7:,:2.::,0;.:,1:;,2;;.47;..

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 Inventones Food Donated Commod,bes Purchased Food Unreserved Undes,gnated
Total Fund Equrty
Total Llab,lIbes and Fund Equrty

$

13,71516 $

53,49610

36,54885 35,46362

$ 67,211 26 $

72,01247

$

20,86020

15,84643

340,89210 $

000

$ 377,59873 $

000

$

See notes to the general-purpose financ'al statements 20

EXHIBIT "E"

FEDERAL PROGRAMS

TOTALS JUNE 30, 2002 JUNE 30, 2001

$

108,344 63 $

582,93815 $ 395,27203

242,14764

247,66995

401,18176

20,86020 15,84643

19,877 03 11,44883

$

350,49227 $

867,314 73 $ _ _8:::2;.:.7..:.,7.:.;79::.;65~

$ 241,41140

$

70,86981 $

121,13382

52,74287

123,80996

212,76968

180,62632

27,42818

27,42818

44339

128,384 32

128,384 32

26,029 68

$

350,49227 $

489,71600 $ 501,25366

$

20,86020 $

19,877 03

15,84643

11,44883

$

0"""'00'-

340,89210

295,200 13

$

000 $

377,598 73 $ _--",32",6"",5",2",5",99,,-

$

350,49227 $

867,314 73 $ _..::82~7:..,7.:.:7~9:.:6:;;5..

- 21 -

CHATTOOGA COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
SPECIAL REVENUE FUND YEAR ENDED JUNE 30, 2002

REVENUES
Slate Funds Federal Funds Other Funds
Tolal Revenues
EXPENDITURES
Current InstructIOn Support Services Pupil ServiceS Improvement of InstruclJonal Services General Administration School Admlnlstrabon BUSiness Admlnlstrabon Maintenance and QperaUon of Plant Student Transportabon SeMces Central Support Services Other Support Services Food SeMceS Operation Community Services Operabons
Tolal Expenditures
Excess of Revenues over (under) Expenditures
OTHER FINANCING SOURCES
Operabng Transfers In
Excess of Revenues and Other FinanCing Sources over (under) Expenditures
FUND BALANCE JULY 1
Food Inventory Net Change ,n Penod Donated Commodlbes Purchased Food
FUND BALANCE JUNE 30
See notes to the general-purpose financial statements
- 22-

SCHOOL FOOD
SERVICES FUND

LOTTERY PROGRAMS

S

84,14000 $

811,05712

384,18373

S 1,279,380 85 $

428,57840 428,57840

$

S 1,233,688 88

$ 1,233,688 88 $

$

45,691 97 $

369,35702 38,70106 1,591 24 194 96 16,62673 29514 3272 2,16219
428,96106 -38266

$

45,691 97 $

326,52599

98317 4,39760

38266
000 000

$

377:598 73 $

O::.:::OO~

EXHIBIT "F"

FEDERAL PROGRAMS

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

$

512,71840 $

468,74480

$

2,187,05074

2,998,10786

2,222,863 53

384,18373

371 ,80536

$

2,187,050 74 $ 3,895,009 99 $ 3,063,413 69

$

1,370,717 65 $ 1,740,07467 $ 1,461 ,530 09

463,32882 367,88621
4,17814
95582 11,80308 117,76058
1,250 00 22,83731 11,12566
43060

502,029 88 369,477 45
4,17814 194 96 95582
28,42981 118,05572
1,250 00 22,87003 1,246,976 73
43060

228,741 36 151,87633
1,89242 2,139 OS
22,89062 36,76765
6,52307 1,129,36363

$

2,372,27387 $ 4,034,92381 $ 3,041,72425

$

-185,22313 $ -139,91382 $

21,68944

185,22313

185,60579

38,26359

$

000 $

45,69197 $

59,953 03

000

326,52599

268,17940

98317 4,39760

-1,96592 35948

$

000 $

377,598 73 $ _....;;3;:;2:;:,6,~5:;;25;:.99=-

-23-

CHATTOOGA COUNTY BOARD OF EDUCATION COMBINING BAlANCE SHEET CAPITAL PROJECTS FUND JUNE 30 2002

EXHIBIT"G"

ASSETS Cash and Cash EqUIvalents Investments Accounts ReceIVable Prepaid Items
Total Assets

BOND PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS JUNE 30, 2002 JUNE 30, 2001

S 2 860,879 94 $

800000 $ 2,88887994 $ 1,061 293 04

5219550 00

5,219,55000

16,96934

16,96934

988,77000

14877

S 8097,399 28 S

~8~,00:;;;0=00::. $ 8,105,399 28 S 2,048,21181

LIABILITIES AND FUNP EQUITY
L1ABILmES
Cash Overdraft Contracts Payable Relalnages Payable
Total L1ablhtles
FUND EQUITY
Fund Balances Reserved For Purpose of Bond Issue Unreserved Undesgnated
Total Fund EqUIty

$ 16,02000 S $ 16,02000 $
S 8,081 37928 000 $
$ 8,081,37928 S

8,000 00 $ 800000 S

$ 24,02000

978,77000 18,00000 15,696 20

24,02000 $ 1,012,46620

$ 8081 37928 $ 1,035,74581

000

000

000

000 S 8,081,37928 $ 1 035,74561

Total Liabilities and Fund EqUity

$ 8,097,399 28 S==~.:8;,;,0;;;0;;;0;,;00;;;" S 8,105,39928 $ 2,048,21181

See notes to the general-purpose finanCial statements

- 24-

CHATTOOGA COUNTY BOARD OF EDUCATION COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUNp BALANCES
CAPITAl PROJECTS FUND YEAR ENDED JUNE 30 2002

EXHIBIT "H"

BONO PROCEEDS

GEORGIA STATE FINANCING AND
INVESTMENT COMMISSION

TOTALS YEAR ENDED JUNE 30, 2002 JUNE 30, 2001

REVENUES

State Funds Other Funds
Total Revenues
EXPENDITURES

$ 69,60861 $ S 69,60861 $

000 $ 000 $

$ 69,608 61

986,77000 46,694 45

69,60861 S 1,033,464 45

Current Support service. Busll188s AdmlrllStrabon
CapItal Outlay 8alanes Employee BenefllB Land and Land Improvements Bulkhng and BuUdmg Improvements
Total Expenchtures
Excess of Revenues over (under) Expenditures

S 184,91000 S
3,500 00 478,606 14 $ 667,01614 $ S -597,40753 $

000 $ 184,91000

$
3,500 00 478,606 14

9,82296 75144
2,447,95229

000 $ 667,01614 $ 2,458,526 69

000 $ -597,40753 $ -1,425,06224

OTHER FINANCING SOURCES (USES)

Proceeds from General ObWgatlon Bonds Par Value
Operating Transfers In Operatmg Transfelli Out

$ 7,670,000 00 8,91111
-35,86991

Total Other Flnanclllg Sources (Uses)

$ 7,643,04120

Excess of Revenues and Other FlOancmg Sources over (under) Expenditures and Other Ftnanclng Uses $ 7,045,633 67 $

FUNO BALANCE JULY 1

1,035,74561

$ 7,670,000 00 8,91111 $
35,86991

551,40535 -457,988 87

$ 7,643,041 20 $

93,41648

000 $ 7,045,633 67 $ -1,331,64576

000

1,035,74561

2,367,391 37

FUNO BALANCE JUNE 30

$ 8,081.379 26 $

..o~OO::. S 8,081,37928 S 1[035,74561

See notes to the general-pu~ firtanClal statements

- 25-

CHATTOOGA COUNTY BOARO OF EOUCATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
YEAR ENDED JUNE 39 2002

SCHEDULE "I"

FUNDING AGENCY PROGRAM/GRAMT
Agnculture. U S Department of Child NutnUon Cluster Pass-Through From Georg.. Department 01 Education Food and Nutnbon Program Food SoIVlC8S School Breakfast Program National School Lunch Program
Total ChIld Nutrttlon Cluster
Other Programs Pas&-Through From Georgia Department of Education Food and Nutrfuon Program Food Distribution Program (1) Pass-Through From omce of Treasury and Fiscal SoMC8s NatkJnal Forest Reserve Funds
Tolal U S Department 01 Agrlcullulll
Appalachian Ragoonal Commission D"eet Parent Child Teacher Force 3 Grant TeleconvnunlCabons Programs Commurlty Connection Grant
Total Appalachian RegIonal Com""sslOl1
Corporabon for National and Communrty SeMCe P....Ttvough From Georg.. Department 01 Educabon Learn and serve Amenca SChool and Community Baoed Programs
EducatlOl1. U S Rapartment 01 SpecIal EducatIOn Cluslar Pas..Through From Gaorgla Department 01 Educabon IndIVIduals with Dlsabl~bes Educatlon Act Part B - SpecIal Educabon Flow Through Preschool Capacity Bu~dlng Improvement
Total Spec1a1 EducaUon Cluster
Other Programs Direct Elementary and Secondary Education Act Title X 21st Century Commumty Leammg Center Pass-Ttvough From Georgia Department 0( EducaUon Elementary and secondary Education Act Title I Even Start Grants to Local Educational Agenaes T1t1a 1\ EtSef1hower ProfeSSIOnal Development

CFDA NUMBER

PASSTHROUGH
ENTITY 10
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

10553 10555

NlA

$ 214.39359

(2)

NlA

554.03537 $

1.191.060 72 (3)

$ 768,42896 $

1.191.060 72

10550 10665

NlA

42.62816

42.62816

NlA

9.066 35

(4)

$ 820.12347 $

1.233.686 88

23011 23002

$

7.77694 $

180.277 99

$ 188.054 93 $

99.522 94 (3) 257.420 29 (3) 356 943 23

94004

NlA

$

11.540 14 (3)

84 027 84 173 84 027

NlA

$ 384.79204 $

NlA

48.664 01

NJA

12.18700

$ 445.64305 $

384.792 04 48.664 01 12.18700
445.64305

84 287

84 213

NJA

84 010

NJA

84 281

NJA

349.26059
171.388 23 659.01027
20.31703

349.260 59
171.388 23 660.93763 (3)
20.317 03

- 26-

CHATTOQGA COUNTY BOARD OF EPUCATION SCHEPULE OF EXPENOITURES OF FEDERAL AWARDS
YEAR ENOED JUNE 30 2002

SCHEDULE "1"

FUNDING AGENCY PROGRAM/GRANT
Education, U S Department 01 Other Programs Pass-Through From Georgia Department of Educatlon Elementary and Secondary Educallon Act TItle III Technology Lrtoracy Challenge Fund Grant. TrtIo VI InnovatIve Educabon Program Strategies Cia.. SIze Reduction
Vocabonal Education - Basic Grants to States High SChool Program
Basic Grant
Total U S Department 01 Educa~on
Health and Human 8ervtces. U S Department of
Pa-Through From Goorglo Department of
Human Resources Block Grants for Prevention and Treatment of
Substance Abuse
Grantm-Ak:I
Labor, U S Department 01 Pass-Through From Coosa Valley ReglOOal Development Comml:sskJn Woricforce Investment Act

CFDA NUMBER

PASSTHROUGH
ENTITY ID
NUMBER

FEDERAL REVENUE IN PERIOD

EXPENDITURES IN PERIOD

84 318 84 298 84 340
84048

NfA

S 125,000 00 S

NfA

19,211 00

NfA

94,57600

125,00000
19,21100 94,57820 (3)

NfA

37,83546

40,677 95 (3)

S 1,922 24163 S

1,927,01368

93959

NfA

S 30,322 00 S

31,70293 (3)

17259

NfA

$ 76,754 18 S

76,77682 (3)

Total Federal Filanaal Assistance

S 3,037,496 21 S_...;;:3~63::.7:.66~5.:68:::.

NfA = Nol Available

Notes to the Schedylo of Expenditures of Federal AwardS

(1) The amounts shown for the Food Otsmbubon Program represents the Federally asstgned value of nonmonetaJy assl:stance for donated commodrtJes received and/or consumed by the system dunng the current frscal year
(2) Expenchtures for the School Breakfast Program were not malrltalned separately and are blcluded In
the 2002 National SChool Lunch Program (3) Expenditures for this program lndude Slate. and/or Other Funds
Expendrtures are not mamtamed by fund source (4) Funds earned on thts program do not require reportmg of expenditures

Major Programs are ldentffied by an asterisk (-) In front of the CFDA number

The School ratricl dld not provide Federal AssIstance to any Subreclpl8nt

The accompanying sdledule of expenditures of Federal awards Includes the Federal grant actlvlty of the Chatlooga County Board of Educallon and IS presented on the modified accrual basis of accounmg which i6 the baSIS of accountll1g used tn the presenlabon of the general-purpose financial 6tatements

See notes to the generaJ.purpose fDla1lClS1 statements

- 27

CHNITOQGA COUNTY BOABo OF EDUCATION
SCHEDULE OF STATE RElJENUE
YEAR ENOED JUNE 30 2002

SCHEDULE "2"

AGENCYiFUNOING

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

RElJENUE

FUND

FUND

TOTAL

AlIa,,,,, GRANTS Community

Georgia Department of

Govemo~s Emervency Fund

$

6,SOO 00

$

6,500 00

Educabon, Georgia Department of Cuailly Basic Education Direct Instrucbonal Cost Kindergarten Program Kindergarten Program - Early Inlsrvenbon Program Pnmary Grades (1-3) Program Primary Grodes - Early Intervenbon (1-3) Program Upper Elementary GradIeI (4-5) Program Upper Elementary Grade. - Eerly Intervenbon Program Middle Grades (6-8) Program MIddle SChool (6-8) Program High SChool General Educabon (9-12) Program VoceUonal Laboratory (9-12) Program Students wrth DlS8bilibes Category I Category II Getegory 111 Gete90ry IV Gifted Student- Category VI Remedial Educabon Program Attemabve EducatJon Program English Speake", of Other Languages (ESOL) Mad,a Conter Program Staff and Professional Development 20 Days Addlbonallnstrucllon Indirect Cost Categorical Grants Pupd Transportabon Regular Bus Replacement Sparsdy Nursmg ServICeS PnnClpal Supplements Voc:atJonal SUperviSOrs Educabon Equahzabon Funding Grant Food Services VocabonalEducabon Other Stale Programs EnVlronmentsl SCience Program Grades K-3 Stetewlde Reading Program Grades 4-8 Statewide After School program Health Insurance Mentor Teachers Preschool HendlC3Pped Program Post Secondary Option Lottery Programs AsslsUve Technology Computers In the Classroom

614,94700 347,935 00 1,155,17300 956,99100 622,41500 512,201 00 414,901 00 1,000,604 00 1,039,884 00 425,933 00
47,446 00 251,72200 1,373,78300 200,81800 227,82300
59,40300 110,01300 52,28500 263,85200 53,42200 77,55200 1,769,164 00

614,94700 347,93500 1,155,17300 956,99100 622,41500 512,201 00 414,901 00 1,000,604 00 1,039,884 00 425,93300
47,44600 251,72200 1,373,78300 200,81800 227,82300
5940300 110,01300
52,28500 263,85200
53,42200 77,55200 1,769,164 00

384,09700 120,85000 35,88900 70,617 00
12,61900 17,52000 817,75300
S 229,51072

84,14000

1,500 00 SO,611 20 31,22577 195,071 58
214200 3326900
1 68300

9,598 00 67,2SO 00

384,09700 120,85000 35,88900 70617 00
12,61900 1752000 817,75300 84,14000 229,51072
1,50000 SO,611 20 31,22577 195,071 58
2,14200 33,26900
1,68300
9598 CO 67,25000

- 28-

CHATTOQGA COUNTY BOARD OF EDUCATION SCHEDULE OF STATE REVENUE YEAR ENDED JUNE 30 2002

SCHEDULE "2"

AGENCY/EUNDING
GRANTS OffIce of School Readme.. Pre-Kmdergarten Program
omce of Treasury and Flscal Services Public SChool Employees Retllllmeni
CONTRACTS Human Resources, Georgla Department of Through Chattoog. County Board of H.alth Family Connection
Through Floyd County Board of Health Tobacco Use Prevention Program
National Genter on Educabon and the Economy Georgia Target AsSistance Program

GOVERNMENTAL FUND TYPES

SPECIAL

GENERAL

REVENUE

FUND

FUND

TOTAL

$ 351,730 40 $ 351,73040

$

31,31200

31,31200

37,972 50 5,000 00
50,00000

37,97250 5,00000
50,00000

$ 13,713,399n $ 512,71840 S 1422611817

see notes to the general-purpose finanCIal statements

- 29-

CHAUQQGA COUNTY BOARD OF EDUCATION SCHEPULE OF APPROVEP LOCAL OpJJON SALES TAX PROJECTS
YEAR ENpED JUNE 30 2002

SCHEDULE "3"

pROJECT

ORIGINAL ESTIMATED
COST (1)

CURRENT ESTIMATED COSTS (2)

AMOUNT EXPENDED IN CURRENT
YEAR (3)

AMOUNT EXPENDED
IN PRIOR YEARS (3)

PROJECT STATUS

Addulg to renovating repamng Improvll1g end equipping existing IChooI buLldlllOS and other buildings, faCiIibes and grounds useful or deSUllbie In connac:tkln therewrth. acqultUlg InstructklnaJ and adminIStrative technology unprovements for exllbng SChOOls and acqumng any necessary property therefOf'e. both real lind peraonaI

S 4800.000 00 S 5042 55a 00 S 10161067 $ 492494780 Ongoll1g

AcquISlbOn, COOItrudion and equipping of a new elementary BChooI, acquiring any necessary property therefore both real alld personal rehabilitating, adding to, repalr1ng renovating extending and improving Pennville Elementary SChool North SummervlDe Elementary School SummervIlle Elementary SChool. Lyery SChool. Chattooga High School, SUmmefVllle MlddJe SChool and Menlo SChool and related lacllrtJes useful or desirable In COMedlcn therewith. Including WIthout IIrrutabon roof replacements lind repairs madlIInlcll system repair'S and replacements, addlbonal parking and paYing and secunty systems. systemWlde technology addltkJns and Improvements and purchasmg achooI fumlltnllgs, equtpment and fixtures

8,550,00000

8,550,00000

4B4,820 47

Ongoing

S t 31 350 000 00 S 13159255800 S 566 431 14 S 4192'(~7 80

(1) The SChool Olltners onglrW COlt utunate as speofied 11 thll resolution call1:ng for the amposl!Jon of the Local OptIOn s.les Tax.
(2) The SChool Otstnet's currant estrnate of total cost tor the pro.teets IncIudel 1111 coal from prDf8Ct IIlceptlon to completion
(3) The votera of Chattooga County approved the mposrtlon or a 1% salel tax to fund the ebove Protects and retire 8SSOCJ8ted debt Amounts expended for thno projects may Include salel tax proceeds, state local property
taxel and/or other funds over the life of the projects

See notas \0 the general-purpoaa r.,ancllli statements

31

CHATIOOGA COUNTY BOARD OF EDUCATION GENERAL FUND - aUALITY BASIC EPUCATION PROGRAM raBE)
ALLOTMENTS ANp EXPENDITURES - BY PROGRAM YEAR ENDED JUNE 30 2002

SCHEDULE "4"

DESCRIPTION
Direct Instructional Programs KIndergarten Program Kmdergarten Program-Early Intervention Program Prunary Grades (1-3) Program Pnmary Grades-Ear1y Intervention (1-3) Program Upper Bementary Grades (4-5) Program Upper Elementary Grades-Early InterventIOn (4-5) Program Middle Grade& (6-8) Program Middle Sdlool (6-8) Program High Sdlool General Education (9-12) Program VocalJonal Laboratory (Q..12) Program Students with Disabilities Category I Category II Category III Category IV Category V Gifted Student - Category VI RemedIal Education Program AlternalJve Educa,bon Program English Speaker'S of Other Languages (ESOL)
TOTAL DIRECT INSTRUCTIONAL PROGRAMS
Medla Center Program Staff and ProfesSIonal Development

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE aBE PROGRAM COSTS

SALARIES

OPERATIONS

TOTAL

S

696,85700 S 665 103 12 S

32,54597 S

697,64909

394 281 00

306 514 54

2,34527

308 859 81

1 309 040 00

1766 170 36

101,11066

1 86728092

1 084 462 00

704 256 54

7,146 91

71140345

70509300

132163616

62334 66

1,383 970 72

580 652 00 47016500 113388300 1 178396 00 48266700 2,12335300
258 16900 6731500 124,66700 59,249 DO

151,434 23 650 504 74 1 244 74213 1570994 37 884 323 84
4271424 334 31449 1 31885149 13165957
334 880 95 7986531 11431516 52,05215

59542 27,559 35 47,54585 55,15039 49,66101
1504 83 90 10338 57 2773285 2141 90
752 5,96583
57081 1,88961
44276

152,079 65 678,064 09 1,292 287 98 1,626144 76 733 984 85
1504 42798 14 344 653 06 1 346,584 34 133,80147
752 340,846 78
8043612
116204 n
52494 91

S

10,668,24900 S 11 474,38339 S 435,184 08 S 11,909,56747

298,99700 60 537 00

453591 79 17,63015

54,434 81 51,34155

508026 60 68971 70

TOTALaSEFORMULAFUNDS

s

11,02778300 S 1194560533 S 54096044 S 12486565n

(1) Comprised of State Funds plus Local Five Min Share

See notes to the general purpose finBllCIa1 statements

- 32-

CHAITOOGA COUNTY BOARD OF EDUCATION GENERAL FUND - QUALITY BASIC EDUCATION PROGRAM (QBEl
ALLOTMENTS AND EXPENDITURES - BY SITE YEAR ENDED JUNE 30, 2002

SCHEDULE "5"

Chattooga High School Lye~y Elementary School Summerville Middle School Menlo Elementary School No~h SummervIlle Elementary School Pennville Elementary School Summerville Elementary School Chattooga CrossRoads Academy Central Office (A1temabve Educaoon Program)
TOTAL
(1) Compnsed of State Funds plus Local Five Mill Share

ALLOTMENTS FROM GEORGIA DEPARTMENT OF EDUCATION (1)

ELIGIBLE QBE PROGRAM COSTS

$

2,382,219 00 $

2,825,583 90

1,313,68100

1,286,37510

1,496,564 00

1,787,21834

1,353,033 00

1,545,346 08

816,54600

934,66797

1,229,439 00

1,331,01628

1,952,10000

2,098,92643

100,43337

124,66700

$

10,668,249 00 $ 11,909,56747

See notes to the general-purpose finanCial statements - 33-

SECIlONII COMPLIANCE AND INfERNAL CONTROL REPORTS

~IJ!>.~F.LL W. HIN roN
STATE AU04TOR
(404\ 65&2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 WdShmgton Street, S W SUlle 214 AIIJn"'. Geurgla 30114-8400
May 9, 2003

Honorable Sonny Perdue, Governor Members ofthc General Asscmbly Members of the State Board of Education
and Supenntendent and Members of the Chattooga 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
Ladles and Gentlemcn
Wc have audited thc financial statements ofChattooga County Board of EducatIOn as of and for the year ended June 30, 2002, and have Issued our report thereon dated May 9, 2003 This report was quahfied for vanous departures from generally accepted accountmg pnnclplcs, as Identified m the auditor's report on the general-purpose finanCial statcments We conducted our audit m accordance WIth audltmg standards generally accepted m thc Umted Slates of Amcnca and the standards apphcable to financial audits contamed m Government Audltmg Standards, Issued by thc Comptroller General of the Umted States
Comphance
As part of obtammg reasonable assurance about whether Chattooga County Board of EducatIOn's finanCial statements are free of matenal misstatement, we performed tests of ItS comphance With ccrtam proVISIOns oflaws, regulations, contracts and grants, noncomphance With wluch could have a direct and matenal effect on the determmahon of financial statement amounts However, proVldmg an opmlOn on comphance With those proVISions was not an obJechve of our audit, and accordmgly, we do not cxpress such an opmlOn The results ofour tests dIsclosed no mstances ofnoncomphance that are reqUired to be reported under Govcrnment Audltmg Standards
Internal Control Over Fmanclal Reportmg
In planmng and performmg our audit, we considered Chattooga County Board of Educanon's mternal control over finanCial reportmg m order to determme our audltmg procedurcs for the purpose of expressmg our opmlOn on the financial statements and not to proVide assurance on the mternal
2002YB-41

control over financIal reportIng However, we noted a certaIn matter mvolvmg the mternal control over financIal reportmg and Its operation that we consIder to be a reportable condItion Reportable conditions mvolve matters commg to our attention relatmg to slgruficant defiCIencies m the deSign or operation ofthe mternal control over financIal reportmg that, m ourJudgment, could adversely affect Chattooga County Board of Education's abIlIty to record, process, summarIze and report financIal data consistent WIth assertIons of management m the financIal statements The reportable condItion IS descnbed m the accompanymg Schedule of Fmdmgs and Questioned Costs as Item FS-6271-0201
A matcnal weakness IS a condItIOn m whIch the design or operation of one or more of the mternal control components does not reduce to a relatively low level the nsk that mIsstatements m amounts that would be matenal m relation to the financIal statcments bemg audIted may occur and not be detected WIthm a timely penod by employees m the normal course of performmg theIr asSIgned functIOns. Our consIderation of the mternal control over financial reportmg would not necessarily disclose all matters m the mternal control that mIght be reportable condItIons and, accordmgly, would not necessanly dIsclose all reportable condItions that are also conSIdered to be matenal weaknesses However, we consIder Itcm FS-6271-02-01 to be a matenal weakness.
ThIs report IS mtended solely for the mformatlon and use of the management, members of the Chattooga County Board of EducatIOn, Fcdcral awardmg agencIes and pass-through entities and IS not mtcnded to be and should not bc used by anyone other than these specIfied parties
. - -Re...s..pectfully submItted,
~.~--
Ru ell W. Hmton Sta e Auditor
RWHgp 2002YB-41

Ui>.~t U W. HINTON
STATF ,lLJDlTOR
(404)656-2174

DEPARTMENT OF AUDITS AND ACCOUNTS
254 WdShmgto" Slreel. S W SUlle 214 AlI""t. Georg'" 30334-S400
May 9, 2003

Honorable Sonny Perdue, Governor Members of the General Assembly Members of the State Board of EducatIOn
and Supenntendent and Members of the Chatlooga County Board of Educallon
REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133
Ladles and Gentlemen
Comphance
We have audited the comphance of Chattooga County Board of EducatIOn With the types of comphance requirements descnbcd In the US Office ofManagement and Budget (OMB) CIrcular A-133 Complwnce Supplement that are apphcable to each of Its major Fedcral programs for the year ended June 30, 2002 Chattooga County Board of Education's major Federal programs are IdenlIfied In the Summary of AudItor's Rcsults SectIOn of the accompanymg Schedule of Fmdmgs and QuestIOned Costs Comphance WIth the reqUirements of laws, regulatIOns, contracts and grants apphcable to each of ItS major Federal programs IS thc responslblhty ofChatlooga County Board of Educallon's management Our responslblhty IS to express an opmlOn on Chattooga County Board of EducatIOn's comphance based on our audit
We conducted our audit of comphance In accordance With audIlIng standards generally accepted m the Umtcd States of Amenca, the standards apphcable to finanCial audits contamed m Government Audltmg Standards, Issued by the Comptroller General of the Umted States, and OMB Circular A133, Audits of States, Local Governments. and Non-Profit Orgam=atlOns Thosc standards and OMB Circular A-133 reqUire that we plan and perform the audit to obtam reasonable assurancc about whether noncomphance WIth the types ofcomphancc requirements referred to above that could havc a direct and matenal effect on a major Federal program occurred. An audit mcludes exarrumng, on a test basiS, eVldencc about the Chattooga County Board of EducatIOn's comphance With thosc reqUirements and performmg such other procedures as we considered necessary In the circumstances We bcheve that our audIt proVides a reasonable basiS for our opInIOn Our audit does not proVIde a lcgal determmalIon on Chatlooga County Board ofEducalIon's comphance With those reqUirements
2002SA-65

As descnbed m Item FA-6271-02-01 m the accompanymg Schedule of Fmdmgs and QuestIoned Costs, Chattooga County Board of EducatIOn did not comply with reqUirements regardrng ActIvItIes Allowed or Unallowed, Allowable Costs/Cost Pnnclpals and Penod of AvailabIlity that are applicable to Its 21" Century Commumty Learnmg Centers program. Compliance WIth such requIrements IS necessary, m our opmlOn, for Chattooga County Board ofEducatIon to comply With requirements applicable to that program
In our opmlOn, except for the noncompliance descnbed m the precedmg paragraph, the Chattooga County Board of EducatIon complied, m all matenal respects, WIth the reqUirements referred to above that are applIcable to each of Its major Federal programs for the year ended June 30, 2002
Internal Control Over ComplIance
The management of Chattooga County Board of EducatIOn IS responsible for establIshmg and mamtammg effectIve mternal control over complIance WIth reqUirements of laws, regulatIons, contracts and grants applIcable to Federal programs In planmng and perfomung our audIt, we conSIdered Chattooga County Board of EducatIOn's mternal control over complIance WIth reqUirements that could have a duect and rnatenal effect on a major Federal program m order to determme our audltmg procedures for the purpose of expressmg our opmlOn on compliance and to test and report on mternal control over compliance m accordance With OMB Cucular A- I 33
We noted a certam matter mvolvmg the mternal control over complIance and ItS operation that we conSider to be a reportable condItIon Reportable conditIons mvolve matters commg to our attentIon relatmg to SIgnIficant defiCIenCies m the deSIgn or operatIon ofthe mternal control over complIance that, m our Judgment, could adversely affect the Chattooga County Board of EducatIon's abIlIty to admlmster a major Federal program m accordance WIth applIcable reqUirements oflaws, regulatIons, contracts and grants The reportable condItIon IS descnbed m the accompanymg Schedule of Fmdmgs and QuestIoned Costs as Item FA-6271-02-01
A matenal weakness IS a condItIon m whIch the deSIgn or operatIon of one or more of the mternal control components does not reduce to a relatIvely low level of nsk that noncomplIance WIth the applicable reqUirements oflaws, regulatIOns, contracts and grants that would be matenal m relatIon to a major Federal program bemg audIted may occur and not be detected wlthm a tImely penod by cmployees m the normal course of performmg theu asSIgned functIons Our consIderatIon of the mtcrnal control over compliance would not necessanlydlsclose all matters m the mternal control that might be reportable conditIons and, accordmgly, would not necessanly disclose all reportable conditions that are also conSidered to be matenal weaknesses However, the reportable conditIon noted above IS also conSidered to be a matenal weakness
2002SA-65

This report IS mtended solely for the mformatIon and use of the management, members of the Chattooga County Board of Education, Federal awardmg agencies and pass-through entItIes and IS not mtended to be and should not be used by anyone other than these specified parties

Respectfully submitted,

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~,4.$

R sell W Hinton State Auditor

RWHgp 2002SA-65

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

CHATTOOGA COUNTY BOARD OF EDUCATION AUDITEE'S RESPONSE
SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS AND OUESTIONED COSTS YEAR ENDED JUNE 30. 2002

PRIOR YEAR FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FS-6271-99-0 I FS-6271-00-0 I FS-6271-01-01

PrevIOusly Reported CorrectIve Action Implemented Further ACllon Not Warranted Unresolved - No Corrccllve ActIOn Implemented

CORRECTIVE ACTIO!'i/RESPONSES

GENERAL FIXED ASSETS Failure to Malntam General Fixed Assets Account Group Finding Control Number FS-6271-01-01

The School DistrIct has contracted with the Valuallon AdVISOry Group, Incorporated to Inventory fixed assets The School Dlstnct plans to have formal accounting records for the General Fixed Asset Account Group by June 30, 2003

PRIOR YEAR FEDERAL AWARD FINDINGS AND OUESTIONED COSTS

FINDING CONTROL NUMBER AND STATUS

FA-6271-01-01

PrevIOusly Reported Corrective Acllon Implemented

SECTION TV FINDINGS AND QUESTIONED COSTS

CHATTOOGA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 2002

I SUMMARY OF AUDITOR'S RESULTS

Type of Report Issued on the FInancial Statements The auditor's OpIniOn on the Chattooga County Board of Education's financial statements was qualIfied for vanous departures from generally accepted accountIng pnncipies

2 Reportable Conditions In Internal Control DISclosed by the Audit of the FInancial Staternents The audit report for the Chattooga County Board of EducatIon dIsclosed a financial statement reportable condition related to the followmg control category

General FIXed Assets

The reportable condition descnbed above IS conSidered to be a matenal weakness

3 Noncomphance Matenal to the FInanCial Statements The audIt of the Chattooga County Board of Education disclosed no Instances of noncomphance that were deemed to be matenal to the finanCIal statements.

4 Reportable CondItions In Internal Control Over MaJOr Programs The audit report for the Chattooga County Board of EducatIOn disclosed reportable condItIons In mternal control over major programs for the followmg comphance reqUirements

ActiVIties Allowed or Unallowed Allowable Costs/Cost Pnnclplcs

Penod of AvailabilIty of Federal Funds

All of the reportable conditions descnbed above are considered to be matenal weaknesses

5 Type of Report Issued on ComplIance for MaJOr Programs The auditor's opInion on the Chattooga County Board of Education's report on comphance With reqUirements apphcable to major programs was unqualIfied

6 AudIt Fmdmgs ReqUired to be Reported by Section .51O(a) ofOMB Circular A-133 The Chattooga County Board of EducatIOn's audit disclosed an audIt findIng reqUired to be reported by section 510(a) ofOMB Circular A-133. Tlus audit fmdmg IS Included m sectIon IV of thiS report

7 MaJOr Programs Federal awards audited as major programs are as follows 10553 Food and NutnlIon Program - Food Services - School Breakfast Program
10555 Food and NutntIon Program - Food ServIces - NatIonal School Lunch Program 84287 Elementary and Secondary Education Act - Title X - 21 st Century Community
LearnIng Center

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CHATTOOGA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
SUMMARY OF AUDITOR'S RESULTS
8 Type "A" Program Dollar Threshold The dollar threshold for type "A" programs was S300,000 00
9 Low RIsk Audltec The Chanooga County Board of EducatIon quahficd as a low nsk audltee as defined by SectIon 530 of OMB Circular A-133
II FINANCIAL STATEMENT FINDINGS AND OUESTIONED COSTS
GENERAL FLXED ASSETS FaIlure to MaintaIn Gencral Fixed Assets Account Group Reportable ConditIon - Matendl Weakness Repeated From Pnor Ycar Finding Control Number FS-6271-02-01
Thc Chattooga County Board of Educallon did not maintain a system-wide General Fixed Assets Account Group within the Connal accounting rccords as reqUired by generally accepted accounting pnnclples ThiS conditIon rcsults In the general-purpose finanCial statements of the School Dlstnct being Incomplete and not In accordance wllh generally accepted accounting pnnclplcs Appropnate acllon should be takcn by the School Dlstnct to estabhsh accounting controls and procedures to proVide for malntenancc of a General Fixed Asscts Account Group These SUbSidiary records should Include Inventory ofland, bUildings and eqUipment owned by thc School Dlstnct and should Include, but may not be hmltcd to, date acqUired, acquISItIon cost, estimated replacement cost, locatIOn and descnptlon Detailed records should bc maintaIned of all additions and deletions to the General Fixed Assets Account Group
III FEDERAL AWARD FNDINGS AND OUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES PERIOD OF AVAILABILITY OF FEDERAL FUNDS Improper Expenditures Reportable Condition - Matenal Weakness Matcnal Noncomphdnce 1I S Department of EducatIOn Dlrcct Grant Amount 524,589 56 Finding Control Number FA-627 1-02-01
A review of direct costs charged to the 21 <I Century Commumty Learmng Centers Program (CFDA 84 287) noted payments totahng $23,390 88 for a consulting agreement between thc School DIstnct
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CHATTOOGA COUNTY BOARD OF EDUCATION SCHEDULE OF FINDINGS AND OUESTIONED COSTS
YEAR ENDED JUNE 30, 2002
III FEDERAL AWARD FINDINGS AND OUESTIONED COSTS
ACTIVITIES ALLOWED OR UNALLOWED ALLOWABLE COSTS/COST PRINCIPLES PERIOD OF AVAILABILITY OF FEDERAL FUNDS Improper Expendlturcs Reportable Condltlon - Matenal Weakness Matenal Noncompliance U S Dcpartment of EducatIon Direct Grant Amount $24,589 56 Fmdmg Control Number FA-627I-02-01
and the vendor dated January I, 2000 Thc agreement was for "thc Consultant to asSiSt the Client m prepanng applicatIons for such grants, from such pnvatc and governmental sources, as the consultant shall dcem appropriate" rlus agreement docs not meet the reqUirements of allowable expcndltures for thiS program as follows
OMB CIrcular A-87, Paragraph C 6 statcs as follows, "Preagreement costs Costs inCurred pnor to the cffcctIve date of the grant or contract, whethcr or not they would havc been allowablc thereunder Ifmcurred aftcr such date, arc allowable whcn specifically provided for In thc grant agreement" Thc cffeclive datc of the grant IS June 1,2001, and the agreement was datcd January 1,2000
OMB Circular A-87, Paragraph C 7 slates as follows, "Proposal costs Costs ofprepanng proposals on potentIal Federal Government grant agreement are allowable when specIfically provldcd for In the grant agreemcnt "
The grant agreement does not spcclfically provldc for either preagrccrnent or proposal costs
In additIon, thc School Dlstnct was assessed "liqUidated damages" In the amount 0[$1,198 68 on a wireless phone agreement In accordance with OMB CIrcular A-87, costs charged to Federal programs must bc reasonable and neccssary for the performance and administration ofthe program Liquidated damagcs do not meet thiS requirement ofOMB Circular A-87
Managcment should cstablish mternal controls to ensure that expenditures charged to Federal progrdI11S are reViewed to cnsure that charges madc are allowablc m accordance With program gUldelincs The U S Dcpartment of EducatIOn should review thiS mattcr and determine If any reclaim of funds IS appropnate
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